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TREAS.

HJ
10
• A13?4

v.332

u.s.

Department of the Treasury

PRESS RELEASES

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Citation Information
Document Type: Transcript

Number of Pages Removed: 10

Author(s):
Title:

Text of Speech by Morihiro Hosokawa, Prime Minister of Japan, Georgetown University

Date:

1994-02-11

Journal:

Volume:
Page(s):
URL:

Federal Reserve Bank of St. Louis

https://fraser.stlouisfed.org

DEPARTMENT

OF

THE

lREASURY {+')

TREASURY

NEW S

1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C.· 20220· (202) 622-2960

COMMENTS BY TREASURY SECRETARY LWYD BENTSEN
ON ms MOSCOW/ASIA TRIP

2

PRESS CONFERENCE. WASHINGTON. JANUARY 7.1994
I will be leaving early next week for Moscow and the summit, and then we'll be
going on to Asia. I'll be visiting China for a broad discussion of our economic relations.
And I'll be stopping also in Indonesia and Thailand to discuss regional issues such as the
Asia Pacific Economic Cooperation organization and financial services matters.
Let me run down our objectives on the three legs, and then perhaps I can take a
few questions.
I will join President Clinton, as I did in Vancouver, in discussing the various facets
of our economic relationship with Russia. While I'm there I want to commend the
reformers for the progress that has been made in liberalizing and privatizing Russia's
economy. And I also want to urge President Yeltsin to deepen the process of market
reform.
In addition, we will underscore the West's commitment to provide large-scale
financing in support of comprehensive market reform. And we will ask the international
community to pay greater attention to the social hardships of Russia's transformation.
Now, as to the rest of the trip:
In China, among the more significant things I will do is reconvene meetings of the
Joint Economic Committee. This is a forum at which we and the Chinese talk about
bilateral economic issues.
Look at what is going on economically in China. They also are in the midst of an
historic economic transformation. In our discussions, I want to stress the shared interest
of both countries in China's successful transition to an open, market economy. But let
me emphasize, at the same time I will make clear that U.S. concerns about human rights
remain fundamental. We will obviously be watching China's actions in this area closely
as we move toward the President's MFN decision this year.
The economic dialogue will include China's recent reforms of its foreign
exchange, tax, monetary and financial systems. In addition, we'll talk about opening
China's markets. And we will discuss areas in which we can cooperate on regional
matters such as APEC. We have a full agenda in China.

3

I also want to make progress on one of our key foreign polky goals -strengthening regional economic cooperation in Asia. The President's Leaders' Meeting
in Seattle last fall was a big step forward. I want to talk with my counterparts in
Indonesia and Thailand about the Finance Ministers' meeting I will be hosting this year.
This will be an unprecedented opportunity for finance ministers from throughout the
region to discuss the economic policies which will shape our future.
We need to start sharing ideas on the challenges we face, such as how can we
sustain high growth, for rich and poor countries? And how can we promote economic
links that promote region-wide growth? We all have enormous infrastructure needs. We
ought to look at how they can be financed. We should look at how we can promote
private investment, which has been driving much of the growth. And we need to look at
how to have deeper and less volatile capital markets in the region. American investors
can benefit from the opportunities available in the region. We need to look at how
regional cooperation can make that happen.

In addition, while I am in Bangkok I expect to layout our approach to financial
services in the aftermath of the GAIT negotiations.
My emphasis in my discussions with the Asian leaders will be on making the
Finance Ministers meeting a cooperative venture. It should be a consensus-building
exercise, building on the formula which has worked so well in the APEC trade and
investment meetings. I want to stress our common interests, not any country's bilateral
agenda. Our common interest is to sustain this region's strong economic performance.
The APEC region is a primary factor in our growth. Half of our exports go there.
And those exports are up by two thirds in just five years. We clearly have a stake in the
growth strategies of our APEC partners, and they clearly have a stake in ours. It's time
for us to begin talking to each other about these economic issues.

###
THE BROOKINGS INSTITUTION, WASHINGTON, JANUARY 5, 1994
"Immediately after the summit in Moscow, I will be making my first trip to the
region since becoming Treasury Secretary. I want to follow up on the progress made in
Seattle at the meeting of the Asia Pacific Economic Cooperation organization that
President Clinton called together.
Our nation has had, and will continue to have, a significant focus on our economic
and security alliances with our European partners. That will not change. But we must
also recognize that the United States has a substantial interest in the Pacific region.

4

The Asian Pacific region is the fastest growing economic region on the globe.
Fully two-thirds of our trade deficit is with just two countries there - Japan and China
We need to make a greater effort to see that the growth taking place in the Pacific
encourages growth not only here in the United States but also among other industrial
nations.
I've made this point a number of times in the past year when I was talking about
NAFfA or GATI, and I'll make it again today. Exports are a driving force in our
economy. Since the middle of the last decade half of our increase in income and almost
all of our new manufacturing jobs have come about because of exports. It becomes
clearer every day that the way to make our economy grow is to get better access to more
markets.
And where are those markets? In Asia and in the Pacific, and in Latin America
-- places where economies are taking off and they need the goods and the services that
America can provide.
Look at the growth rates in the countries I'll be visiting. Indonesia, which has the
fourth largest population in the world, has had average real growth rates of over 6
percent in the past 25 years. In Thailand, which is a regional leader in financial
liberalization, the annual growth rate in the GDP has been over 7 percent for the past
five years. And in China, which now is the world's third-largest economy, GDP growth
rose 13 percent last year.
There are other issues that must be raised besides economic ones, such as human
rights in China. But one of the ways to promote human rights is to encourage market
reform and trade. They can be the engine of political change.
So I'll be talking with my counterparts in the region about our economic
relationships, about having an APEC finance ministers meeting sometime this year, and
about how each of us sees APEC as a vehicle to further growth and development in our
respective nations. I also expect to talk about sustaining the growth we've seen, about
how development can be financed, and about how capital markets can be developed.
This is a region to which we've had historic ties, and one I believe can play an
increasingly important global role.
###

5

PRESS CONFERENCE, WASHINGTON, JANUARY 7, 1994

Mr. Secretary, in the fall report on international
Q
foreign exchange markets and trade it was mentioned that China
is continuing to manipulate its currency. And I was wondering
(inaudible due to background noise) -- announcement this week of
a big reduction in textile quotas for China, if that would
present a -- (off mike) -- to your discussions, or -- ?
SEC. BENTSEN: Well, first I want to congratulate them on
the consolidation of their currency and getting away from the
two-currency approach. I think that's helpful, and that
certainly is an improvement.
Insofar as the action that's been taken on textiles,
there's still some time, obviously, for negotiation in there.
We've had a serious problem with transshipments that exceed the
quotas that we have and up to this point feel like we have not
had enough cooperation from China in trying to apprehend those,
that circumvention that's taking place of these quotas. And
we're continuing to urge that on the Chinese, and hopefully that
can be worked out, that they'll come to the negotiation table on
that and we'll make some effective progress. That's one of the
reasons that even though the agreement has expired some time has
been left in there for negotiation with the Chinese.
Q

17th, or

Do you expect something to occur between now and the
(off mike)?

SEC. BENTSEN: Well, I am hopeful, obviously, that
something will have occurred in that regard.
Yes.
Q
Mr. Secretary, how are the Chinese -- what kind of
progress are the Chinese making on human rights as far as the
administration is concerned, are they making good progress? And
also, is there any chance that human rights could be decoupled
from the trade mission?

SEC. BENTSEN: No, I don't think it'll be decoupled. I
think that they playoff on each other, and I think the Chinese
have made some progress. I think there's more to be done.
Yes.
Q
Mr. Secretary, can you explain why it was decided
that on the Asian leg of your trip that you would not be going
to Japan, and

6

is there a risk that the Japanese government might perceive this
as a bit of a snub and -SEC. BENTSEN: Absolutely not. I've been to Japan and we've
been very interested and we're meeting with them. We have the
prime minister coming here next month, and it's just a matter of
time limitation.
Look at my trip. I go all the way down from Moscow down to
Jakarta, and then over to Bangkok. Look at the size of my
suitcase just trying to take care of the cold weather and the
warm weather. (Laughter.)
Q
Do you expect Mr. Fuji to accompany Mr. Hosokawa next
month on his trip to Washington?

SEC. BENTSEN: That I don't know. That I don't know. But I
will be hosting a meeting for the finance ministers of Asia
where we will try to do some of the things, for example, we've
been able to do in the G-7 with the finance ministers.
(Cross talk.)
Mr. Secretary, a Chinese trade official was quoted
this morning as
Q

SEC. BENTSEN:
all right.

I was trying to listen to two of you, so --

Q
A Chinese trade official was quoted this morning as
threatening possible retaliation for this textile move
yesterday. I wonder if anything has actually been communicated
to the U.S. --

SEC. BENTSEN:
MODERATOR:

Not to my knowledge. Not to my knowledge.

We can take one more question. Mr. Cresinger

(sp) .
When do you see the IMF moving on the second tranche
of the
(off mike) -- operation for Russia? Is that going to
happen soon, and what does Russia need to do to get the money?
Q

SEC. BENTSEN: Well, I think what you'll have to see is
some progress on the part of Russia and the IMF in working
closer and better together in trying to work out the differences
that they have at the present time. And we'll be pushing to try
to see that that's done. But to give you a definitive time
schedule, I can't do that.
What we also want to have is the G-7 countries tv be fully

aware of the pain that the Russiqn people are going through in
making this kind of a transformation. Part of that, obviously,
was reflected in the elections. But that does not mean that we
should lessen reform. Actually, I think it means that we ought
to accelerate reform to try to get that inflation down and get
them on a sound basis .
. ETX
BRIEFING/BENTSEN
.STX

PAGE 7 01/07/93

Q
You talk in your statement about the need for
large-scale Western aid to Russia. Will there be any
announcement on this trip in that regard, if not from the IMF,
from individual countries?
SEC. BENTSEN:
yet. Do not.
MODERATOR:

Thank you very much.

SEC. BENTSEN:

####

I don't have anything definitive on that

Thank you.

PUBLIC DEBT NEWS
t)q,arllllcllt of the Treasury •

Bllreau oflhc Puhli( Lkbt • W'lshill.~,on. DC 20239

FOR IMMeDIATE RELEASE

Contact: Peter Hollenbach

January 19, 1994

(202) 219·3302

BUREAU OF THE PUBLIC DEnT AIDS SAVINGS BONUS OWNERS
IN LOS ANGELES COUNn AJi"FECTED BY EARTHQUAKE

The Bureau of Public Debt took action to assist victims of the earthquake that struck Lo~
Angeles. California by expediting the replacement or payment of United States Savings Bonds
for owners in the affected area. The emergency procedures are effective immediately for
paying agents and owners in Los Angeles County and will remain in effect through
February 28, 1994.
Public Debt's action waives the normal six-month minimum holding period for Series BE
savings bonds pre~ented to authorized paying agent~ for redemption by residents of the affected

area. Most financial institutions serve

a~

paying agents for savings bonds.

The replacement of hands lost or destroyed will alsu be expedited by Public Debt. Bond
owners should complete form PO-104M, available at most financial institutions or the Federal
Reserve Bank. Bond owners should include as much information a.~ possible about the lost
bonds on the form. This information should include how the bonds were inscribed, social
security number, approximate dates of issue, bond denominations and serial numbers if
available. The completed form must be certified by a notary public or an officer of a financial
institution. Completed form~ should be forwarued to Public Debt's Savings Bonds Operations
Office located at 200 Third St., Parkershurg, West Virginia 26106-132M. Bond owners should
write the word "Earthquake" on the front of their envelopes to help speed the processing of
claims.
Public Debt is the Treasury hurcau responsible for administering the Savings Bonds Program.
000

DEPARTMENT

OF

THE

'IREASURY
((~ tl
..................................\.t~'T==~. ~/

•

•

1789

TREASURY

NEW S
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .

1500 PENNSYLVANIA AVENUE, N.W.· WA-SHINGTON, D.C.· 20220· (202) 622-2960

Remarks by Jeffrey R. Shafer
Assistant Secretary for International Affairs
Department of the Treasury
before the Bankers' Association for Foreign Trade
February 11, 1994
It is a pleasure for me to be here today to take part in the BAFT's mid-winter review
of key issues. I have come to know more than a few of you over the past few months as this
Administration has worked to fmd a practical and effective way to advance open fmancial
markets in emerging economies. We' 11 get to know each other better over the next year or
so, because we have a long way to go together before we reach our goal: commitments to
essentially full market access and national treatment from the leading countries and those
with emerging markets.
This work has brought me back to issues I dealt with fifteen years ago. Then, as a
Federal Reserve officer, I helped put together the proposals to authorize International
Banking Facilities in this country. They were a way of expanding the ability of banks to
compete in global markets from a U.S. base, at a time when domestic regulations would
otherwise have put them at a competitive disadvantage. The IBFs brought jobs to New
York, Miami and other American cities in the early 1980s. Now I see special international
banking arrangements in many countries. It is a way for countries to test the competitive
waters.
But we want them to do more than dip their toes in. We want to see markets opened,
and we want to see our firms given national treatment.
President Clinton has set the strategy. It is a simple one: this country must compete,
not retreat. You are on the front lines of this campaign: your job is to compete. There is
no disputing that the U.S. financial community is the most competitive in the world.
Innovation in the banking and securities markets here has led the world and created
tremendous new opportunities for U. S. frrms to meet the financial needs of consumers and
businesses in economies around the world. We in the government have a complementary
task: to create the opportunities for you to do what you do best by securing open markets.
And we take this task seriously.
LB-654

2

There is tremendous potential in flnancial services. This industry already accounts
for over 6 percent of U.S. GDP and employed 5.4 million Americans in 1992. Continued
growth in this industry means more jobs for Americans. But we are not the only ones who
beneflt. As U.S. banks, securities flrms, flnance companies, investment advisers and
insurance underwriters extend their global presence, they bring competitive efficiency and
state-of-the-art techniques to emerging markets. Efficient and open flnancial markets are
vital to economic growth in developing countries. As Secretary Bentsen said in Bangkok last
month, "the sector sends signals to the industrial muscle as to where those resources ought to
go, where they'll have the most effective growth, the highest return."
We are following a three pronged approach to open markets for increased trade and
investment in financial services:
1)
2)
3)

multilateral negotiations on the General Agreement on Trade in Services
(GATS) that was reached in the Uruguay Round;
bilateral financial policy talks; and
fair trade in financial services legislation.

The multilateral framework of the GATT has for more than forty years been the focus
of U.S. efforts to open markets for goods. The advantages of engaging with our trading
partners through this forum are many. The most important is that multilateral commitments
are the best, most enforceable,longest-Iasting means to increase world-wide trade and
promote growth in all economies. The conclusion of the Uruguay Round has taken the
multilateral system a big step ahead with the World Trade Organization (or WTO) slated to
replace the GATT. We have ambitions for the World Trade Organization to enhance further
the potential for international trade to contribute to growth and improved quality of life for
people around the globe.
From the beginning, at Punta del Este, the Uruguay Round brought a new era to
multilateral trade negotiations by putting services on the table. This provided an important
opportunity for us to pursue increased access to global markets in an area in which the U.S.
has long been in the forefront. Because of our competitiveness in the financial services
sector and because of the importance of fmancial markets to growth, the U.S. Government
placed a very high priority on this sector in the negotiations that concluded in Geneva in
December. The services negotiations were tough, and I don't think anyone in this country
was fully satisfied by the outcome -- not in basic telecoms, not in audio-visual, and not in
financial services.
But this was a pioneering effort. The differences between trade in goods and trade in
service meant that the approaches had to be different. This was not like cutting tariffs.
Domestic regulations were involved. Rights of establishment and all that entailed had to be
dealt with. Of particular importance in fmancial services was the disparity between a market
like that of the United States, which is essentially wide open on a national treatment basis,
and some others which are closed tight. While we are proud of -- and our economy benefits

3

greatly from -- the open market we have maintained in fInancial services, we could not
commit ourselves to maintain this open door unconditionally, while other important markets
were effectively closed to our fIrms. Our objective in the Round was to get commitments
from others to a more level playing fIeld of market access and national treatment to foreign
ftrms -- ours and others. It is important for us all to remember that it was, and is, our
overriding objective to gain increased market access abroad in return for our commitment to
provide ongoing open access -- including potential new powers -- to our banking and
securities markets.
When the new team came to Treasury last year, the Uruguay Round, which had
already run for six years, had less than a year to run. Secretary Bentsen set a clear
objective: access for U.S. fmancial institutions or we would not guarantee access to our
market. We did not seek confrontation; but neither could we accept what was on the table.
We felt we had to go into the last round of negotiations with the ability to reward in kind
those that would commit to open their markets to our fIrms.
With that in mind, we devised what many called a two-tier approach. We undertook
to bind a basic level of commitments for all countries that would guarantee continued
operations for institutions already in the market and allow some access for those from
countries which did not already have a presence in the United States. For countries that
were willing to make commitments on substantially full market access and national treatment,
we were willing to provide equivalent access to their banking and securities fIrms, including
guaranteed rights of expansion and new powers on a national treatment basis. It was
necessary to take a limited exemption from the MFN provision of the Agreement in order to
offer this, and we did so.
Although this position represented a considerable softening of the U.S. position -- a
blanket MFN exemption had been taken earlier --- it was not well received by our
negotiating partners. By their own admission, many of them had not taken the previous U.S.
position seriously. The European Community, which had much to gain if our approach was
successful in convincing key countries to open their markets, nevertheless led the opposition.
We did a lot of talking in Geneva in our effort to convince our negotiating partners
that we were trying to make the fmancial services sector of the Round successful; that we
were not trying to jettison it. In the end, we were able to gain signifIcant improvements in
the offers of some countries; others stood pat. We could not, with what was on the table,
give away open-ended access to our own market. There were too many free riders. We
agreed to a compromise; we retained our limited MFN exemption, but would suspend it for
six months after the Uruguay Round GATS agreement enters into effect. Until then,
negotiations will continue. Our goal will continue to be achievement of substantially full
market access and national treatment, at least over some agreed time frame. If we make

4

considerable progress in this period, we could then waive our right to distinguish among
countries in granting access to our fmancial market. If we do not obtain good commitments,
we will retain the exemption and grant full market access only to those countries that we
judge to be doing essentially the same for us.
In our effort to gain access to national markets for our fInancial institutions, we are
pursuing a bilateral track alongside our multilateral efforts in the GATS. We negotiated with
virtually all GATS parties "bilateral1y" in Geneva as part of the Uruguay Round. But we
also can -- and do -- work with some countries bilaterally outside the specifIc context of the
GATS to address issues of special concern.
The longest-running of these efforts is our dialogue with the Japanese Ministry of
Finance. The Yen-Dollar talks date back to the early 1980's. U.S. interest in gaining fuller
access for our banking and securities fIrms to the Japanese market has been an important part
of this process, particularly in more recent years. Previous administrations scored some
successes, and foreign banks now operate profItably in Japan. But their market share is
small, about 1 percent compared to Japanese banks 10 percent share of the U.S. market.
Our securities fIrms are prevented from bringing their considerable expertise and innovations
to bear in a market that is underdeveloped. Foreign investment advisors are precluded from
managing 90 percent of Japanese pension fund assets. High entry costs and limited
distribution channels hamper the ability of U.S. mutual fund companies to establish and
market their products.
There is still much to be done. The fInancial services sector is a key element of the
Framework which President Clinton and Prime Minister Hosokawa are meeting to discuss
today. Insurance is on the agenda now; work is underway with a view to making a
breakthrough on other ftnancial services issues this summer. The outcome of the current
review of Japan's public pension fund system will be a bellwether of their Willingness to
undertaken meaningful reform.
In addition to this dialogue with the Japanese, we have pursued similar discussions
with other key countries. We have met bilaterally with both Taiwan and Korea over the
years to address currency issues and to discuss fInancial market access. We believe that
these fora have provided critical opportunities to address policy concerns. We have gained a
much better understanding of these countries' markets, as well as the political and economic
factors that shape their attitudes toward reducing restrictions on access. And, for their part,
they have listened, if not always agreed, with our arguments for open markets and the
benefits they bring -- by increasing access to capital, promoting innovation and competition,
and contributing to healthy economic growth.
As part of this tradition, as well as our efforts to close the Uruguay Round
successfully, I traveled to seven countries in Asia last November. My objective was to make
our case about the merits of greater fInancial liberalization and to make clear our objectives
in the Uruguay Round. I did not come home with huge concessions. But I believe that this

5

was an important step in the process: governments in countries with key markets must know
that we are serious about what we are trying to accomplish, but we are also reasonable in
how we are going about it.
Last month, Secretary Bentsen travelled to Asia to follow up on the Round and to
nurture relationships with some of our partners in the Asia-Pacific Economic Cooperation
organization. He delivered a three-part message: that we want to open markets, not close
ours; that we will negotiate constructively, allowing current operations of foreign fmns in the
U.S. to continue unchecked; and that our ultimate objective is a multilateral, MFN-based
agreement. Secretary Bentsen reached out to the countries he visited by praising their
innovations and discussing how further steps would benefit them, not just us. He and his
Chinese counterpart agreed to set up a working group on monetary and banking issues under
the Joint Economic Committee to discuss improving market access.
Treasury will continue to engage governments of countries with emerging economies
in dialog on fmancial policies.
The third integral tool in our drive to open fmancial markets is legislative. We need
this tool for our work in building a fair competitive arena. Without authorization from
Congress, the Administration cannot implement a strategy of staged access to our fmancial
markets. The Fair Trade in Financial Services Act is a test of our seriousness. With it, we
will provide an extra inducement to countries to provide access as well as to benefit from it.
With such a law we will be able to negotiate more effectively. We may be successful
enough that we will not have to invoke the reciprocity provisions in the legislation. On the
other hand, if Fair Trade in Financial Services does not pass, those who bet that the U.S.
would not be tough on free riders would be vindicated. We would see no better
commitments to market access.
How do we bring this strategy together? How precisely do we intend to move ahead?
In Geneva, we have begun the process of reviewing documents to clarify countries'
commitments, not just on fmancial services but in all sectors. This is a routine technical step
in preparation for the official closing of the Round planned for Marrakesh in April. But it
will also give us a much clearer understanding of what each country has committed and
where our greatest challenges lie in trying to deepen market access and national treatment in
the next twelve to eighteen months.
In sum, we see the time between now and Marrakesh as a preparatory period. We
will be reviewing our situation and reining our strategy for moving ahead with negotiations.
We certainly hope to hear from you in this period. Without your input -- both from the
perspective of your field representatives who deal with local conditions every day and from
your front office that has a broader vision for your future -- we will not be effective.

6

We will then begin working with countries to make progress toward our goals. We
are not single-minded about how substantial market access and national treatment are
achieved. We recognize that liberalization is a process that does not happen with a flip of a
switch. We would like to help countries fmd a way to accommodate our needs and WOUld,
for instance, be prepared to consider transitional arrangements that provide breathing room
for domestic fIrms to let them adjust to greater competition. Indeed, we are not encouraging
countries to act carelessly, but to commit to national treatment and to allow access to their
market consistent with prudent regulation. Without proper regulatory control, even
promising innovations can bring volatility and risk.
And, as I mentioned before, having the Fair Trade in Financial Service Act in our
back pocket wil1 greatly enhance our effectiveness in these negotiations. This will be
particularly true if interstate banking and branching moves along as recent events suggest it
might. The freedom to branch on an interstate basis that the recently approved House
Subcommitee bill would provide catches the interest of foreign fmancial institutions
when they think about operations in the U.S. We think it is important that they be provided
this ability on a national treatment basis. This provides us with a carrot, while FTFS is the
stick we hope never to have to use.
In closing, I want to remind you that we are your advocates. But we cannot be
effective ones if we do not know what you think is important. We need to understand how
you see countries: which are key markets, what are the of greatest signifIcance on your
operations, what your visions for the future are. That's why I expect to get to know you still
better in the coming 18 months or two years. I expect to get to know your overseas
managers better, too. I'm looking forward to it.
The next two years will be busy ones for us. If we suceed in gaining good market
access agreements, however, we will have done only half the job. The other half is yours.
You are the ones who must reap the opportunities that are there, and who must go out into
the market and compete.
-000-

DEPARTMENT

OF

THE

TREASURY ('it~
3~~7

TREASURY

NEW S

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1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C.· 20220· (202) 622-2960

FOR RELEASE AT 2:30 P.M.
February 15, 1994

CONTACT:

Office of Financing
202/219-3350

TREASURY'S WEEKLY BILL OFFERING
The Treasury will auction two series of Treasury bills
totaling approximately $24,400 million, to be issued February 24,
1994. This offering will result in a paydown for the Treasury of
about $1,825 million, as the maturing weekly bills are
outstanding in the amount of $26,231 million.
Federal Reserve Banks hold $6,180 million of the maturing
bills for their own accounts, which may be refunded within the
offering amount at the weighted average discount rate of accepted
competitive tenders.
Federal Reserve Banks hold $2,818 million as agents for
foreign and international monetary authorities, which may be
refunded within the offering amount at the weighted average
discount rate of accepted competitive tenders. Additional
amounts may be issued for such accounts if the aggregate amount
of new bids exceeds the aggregate amount of maturing bills.
Tenders for the bills will be received at Federal
Reserve Banks and Branches and at the Bureau of the Public
Debt, Washington, D. C. This offering of Treasury securities
is governed by the terms and conditions set forth in the Uniform
Offering Circular (31 CFR Part 356, published as a final rule on
January 5, 1993, and effective March 1, 1993) for the sale and
issue by the Treasury to the public of marketable Treasury bills,
notes, and bonds.
Details about each of the new securities are given in the
attached offering highlights.
000

Attachment

LB-655

HIGHLIGHTS OF TREASURY OFFERINGS OF WEEKLY BILLS
TO BE ISSUED FEBRUARY 24, 1994

February 15, 1994
Offering Amount .
Description of Offering:
Term and type of security .
CUSIP number
Auction date
Issue date
Maturity date .
Original issue date .
Currently outstanding .
Minimum bid amount
Multiples .

$~2,200

million

9~-day

bill
K7 8
February 22, 1994
February 24, 1994
May 26, ~994
November 26, ~993
$~4,063 million
9~2794

$~O,OOO

$ 1,000

$12,200 million
182-day bill
912794 L6 9
February 22, 1994
February 24, 1994
August 25, 1994
August 26, ~993
$15,299 million
$10,000
$ 1,000

The following rules apply to all securities mentioned above:
Submission of Bids:
Noncompetitive bids .
Accepted in full up to $1,000,000 at the average
discount rate of accepted competitive bids
(1) Must be expressed as a discount rate with
competitive bids
two decimals, e.g., 7.10%.
(2) Net long position for each bidder must be
reported when the sum of the total bid
amount, at all discount rates, and the net
long position is $2 billion or greater.
(3) Net long position must be determined as of
one half-hour prior to the closing time for
receipt of competitive tenders.
Maximum Recognized Bid
at a Single yield
Maximum Award .
Receipt of Tenders:
Noncompetitive tenders
competitive tenders .
Payment Terms .

35% of public offering
35% of public offering
Prior to 12:00 noon Eastern Standard time
on auction day
Prior to 1:00 p.m. Eastern Standard time
on auction day
Full payment with tender or by charge to a funds
account at a Federal Reserve Bank on issue date

DEPARTMENT

OF

THE

TREASURY

(t ~i. ~ (~ NEW S
TREASURY
________ ~'~~'f________
._~~8CJ:::...

1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C.· 20220· (202) 622-2960

FOR RELEASE AT 2:30 P.M.
February 16, 1994

CONTACT: Office of Financing
202/219-3350

TREASURY TO AUCTION 2-YEAR AND 5-YEAR NOTES
TOTALING $28,000 MILLION
The Treasury will auction $17,000 million of 2-year notes
and $11,000 million of 5-year notes to refund $15,189 million of
publicly-held securities maturing February 28, 1994, and to raise
about $12,800 million new cash.
In addition to the public holdings, Federal Reserve Banks
hold $763 million of the maturing securities for their own
accounts, which may be refunded by issuing additional amounts of
the new securities.
The maturing securities held by the public include $979
million held by Federal Reserve Banks as agents for foreign and
international monetary authorities. Amounts bid for these
accounts by Federal Reserve Banks will be added to the offering.
Both the 2-year and 5-year note auctions will be conducted
in the single-price auction format.
All competitive and noncompetitive awards will be at the highest yield of accepted
competitive tenders.
Tenders will be received at Federal Reserve Banks and
Branches and at the Bureau of the Public Debt, Washington, D. C.
This offering of Treasury securities is governed by the terms and
conditions set forth in the Uniform Offering Circular (31 CFR
Part 356, published as a final rule on January 5, 1993, and
effective March I, 1993) for the sale and issue by the Treasury
to the public of marketable Treasury bills, notes, and bonds.
Details about each of the new securities are given in the
attached offering highlights.
000

Attachment

LB-656

HIGHLIGHTS OF TREASURY OFFERINGS TO THE PUBLIC OF
2-YEAR AND 5-YEAR NOTES TO BE ISSUED FEBRUARY 28, 1994
February 16, 1994
Offering Amount .
Description of Offering:
Term and type of security
Series
CUSIP number
Auction date
Issue date
Dated date
Maturity date
Interest rate
Yield .
Interest Payment dates.
Minimum bid amount
Multiples
Accrued interest
payable by investor .
Premium or discount

$17,000 million

$11,000 million

2-year notes
AD-1996
912827 N9 9
February 23, 1994
February 28, 1994
February 28, 1994
February 29, 1996
Determined based on the
highest accepted bid
Determined at auction
The last calendar day of
August and February through
February 29, 1996
$5,000
$1,000

5-year notes
K-1999
912827 P2 2
February 24, 1994
February 28, 1994
February 28, 1994
February 28, 1999
Determined based on the
highest accepted bid
Determined at auction
The last calendar day of
August and February through
February 28, 1999
$1,000
$1,000

None
Determined at auction

None
Determined at auction

The followinq rules aDDlv to all securities mentioned above:
Submission of Bids:
Noncompetitive bids .
· Accepted in full up to $5,000,000 at the highest accepted yield
Competitive bids
(1) Must be expressed as a yield with two decimals, e.g., 7.10%
(2) Net long position for each bidder must be reported when the
sum of the total bid amount, at all yields, and the net long
position is $2 billion or greater.
(3) Net long position must be determined as of one half-hour prior
to the closing time for receipt of competitive tenders.
Maximum Recognized Bid
35% of public offering
at a Single yield
35% of public offering
Maximum Award .
Receipt of Tenders:
· Prior to 12:00 noon Eastern Standard time on auction day
Noncompetitive tenders
· Prior to 1:00 p.m. Eastern Standard time on auction day
Competitive tenders .
· Full payment with tender or by charge to a funds account
Payment Terms .
at a Federal Reserve Bank on issue date

The United States
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the United States 7
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CSO, Robert
Reischauer, has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it.· Make no mistake, balancing the budget would
require tough choices and cost the United States billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of the United States.

The Balanced Budget Amendment:
Nationwide Impact
Option 1: Tax increase and across-the-board spending cut l

Increases in taxes -- $90 billion a year ($728 per taxpayer)
Cuts in Benefits, Services, and Defense -- $110 billion a year
•
•

$605 cut per year for the average Social Security recipient
$480 less for each person enrolled in Medicare

•
•

$ 254 less for each Medicaid recipient
$34.4 billion in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$16.8 billion additional cut in annual defense spending

•

Option 2: Across-the-board spending cut

Cuts in Benefits, Services, and Defense -- $ 200 billion a year
•
•
•
•

•

$1 ,100 cut per year for the average Social Security recipient
$873 less for each person enrolled in Medicare
$462 less for each Medicaid recipient
$62.6 billion in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$30.6 billion additional cut in annual defense spending

ITax increaee comprises 45% of nationa' deficit reduction package Ipercantage varies bV statel. equal to the average
revenue component of the last two deficit reduction packages. Spending cuts ara proportional across programs.
Nota: Budget numbers based on ceo projections for FY 2000. Allocations based on 1992 data. Tha potential
,.nftt'A~tiO-;:;;; impact of tax increases and/or spending cuts is not included.

Option 3: Across-the-board spending cut, excluding defense

. Cuts in Benefits and Services -- $ 200 billion a year
•
•
•
•

$1 ,298 cut per year for the average Social Security recipient
$1,031 less for each person enrolled in Medicare
$545 less for each Medicaid recipient
$73.9 billion in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

Option 4: Across-the-board spending cut, excludiny Social
Security

Cuts in Benefits and Services -- $200 billion a year
•
•
•

•

$1 ,177 less for each person enrolled in Medicare
$623 less for each Medicaid recipient
$84.4 billion in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$41 .2 billion additional cut in annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $ 200 billion a year
•
•
•

$1,483 less for each person enrolled in Medicare
$784 less for each Medicaid recipient
$106.3 billion in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

The Balanced Budget Amendment snd the United Ststes

The State of Alabama
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of Alabama?
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the ceo, Robert
Reischauer, has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, "it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it.· Make no mistake, balancing the budget would
require tough choices and cost Alabama billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Alabama.

The Balanced Budget Amendment
would cost Alabama
$3.0 to $3.5 billion a year
Option 1: Tax increase and across-the-board spending cut 1

Increases in taxes -- $1.1 billion a year ($574 per taxpayer)
Cuts in Benefits, Services, and Defense -- $1.9 billion a year
•

$ 541 cut per year for the average Social Security recipient

•
•
•

$412 less for each person enrolled in Medicare
$281 less for each Medicaid recipient
$650 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
educateon, and other federally funded programs
$293 million additional cut in annual defense spending

•

Option 2: Across-the-board spending cut

Cuts in Benefits, Services, and Defense -- $3.4 billion a year
•
•
•

•
•

e",.,.o.

$984 cut per year for the average Social Security recipient
$749 less for each person enrolled in Medicare
$ 512 less for each Medicaid recipient
$'.2 billion In reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$ 532 million additional cut in annual defense spending

,._nu.

0'

. T•• Incr •••• comon•••• 5-..
"1110.... d.hCII .eduction p.cll.loe (p.rcentaoe varres bv l1atel. equal to the
component
t"'- ••" t_o dehc.1 reduCtion o.c ....ge •. SpendlnO cut. are proportional across proorams.

0'

numb.,.

~ole
Budget
b .. eeI on taO P'o.. cuo". '0' N 2000. Allocattons based on 1992 dala. The potentllli
co"tr.Ctlo-;;;':; 'mo.Ct 01 ••• Incr ••••••net/Of aoenet."U cut. I. not Included.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services - $3.4 billion a year
•
•
•
•

$1 , 161 cut per year for the average Social Security recipient
$884 less for each person enrolled in Medicare
$604 less for each Medicaid recipient
$1.4 billion in reduced funding for fighting crime, building highway~
and bridges, protecting the environment, providing education, and
other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services -- $3.5 billion a year
•

$ 1,010 less for each person enrolled in Medicare

•
•

$690 less for each Medicaid recipient
$1.6 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$ 7 1 7 million additional cut In annual defense spending

•

Option S: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $ 3.5 billion a year
•

$ 1,272 less for each person enrolled in Medicare

•
•

$869 less for each Medicaid recipient
$2.0 ~illion In reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

The State of Alaska
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of Alaska?
While supporters offer a lot of tough talk. few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CBO, Robert
Reischauer, has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer. -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it.· Make no mistake. balancing the budget would
require tough choices and cost Alaska billions.
In order to encourage a more realistic. responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Alaska.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $ 511 million a year
•
•

•
•

$' ,249 cut per year for the average Social Security recipient
$ 740 less for each person enrolled in Medicare
$499 less for each Medicaid recipient
$393 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services -- $820 million a year
•
•

$ 846 less for each person enrolled in Medicare
$ 570 less for each Medicaid recipient

•

$449 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education, and other federally funded programs
$ 298 million additional cut in annual defense spending

•

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services - $658 million a year
•
•

•

$1,065 less for each person enrolled in Medicare
$ 718 less for each Medicaid recipient
$566 million an reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education. and other federally funded programs

The Balanced Budget Amendment
would cost Alaska
$511 to $820 million a year
Option 1: Tax increase and across-the-board spending cut'
Increases in taxes -- $ 271 million a year ($ 742 per taxpayer)
Cuts in Benefits, Services, and Defense -- $359 million a year
a
a
a
a

a

$582 cut per year for the average Social Security recipient
$345 less for each person enrolled in Medicare
$233 less for each Medicaid recipient
$183 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$ 1 21 million additional cut in annual defense spending

Option 2: Across-the-board spending cut

Cuts in Benefits, Services, and Defense -- $653 million a year
a

$ 1.058 cut per year for the average Social Security recipient

a

$627 less for each person enrolled in Medicare
$423 less for each Medicaid recipient
$333 million In reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$ 221 million additional cut in annual defense spending

a
a

a

:T ••• nc, •••• compn•••• 5 .. 01 IWOOIW OIhot teOwcDOn pee.IO' (p.rc.ntege vln .. by .tltel. eQual to the
.... ,~ ' .... "". component of '''' ... , two OIhot teOwcDOn ~~.. Spending cut. are proportional Icro•• progremi,

cao ~DOnI '0' FY 2000.

~o!.· Budget nun-bI,.. belld on
contrKDoftary 1I'nPec:1 of I. . Inc,,"" and/Of

. . . . . .'"

CUll

Allocation. b.. ed on 1992 data. The potenOl1
II nol Indudad.

The State of Arizona
and the
Balanced Budget Amendment

(
/

What does a Balanced Budget Amendment mean to the State of Arizona?
While supporters offer a lot of tough talk. few proponents spell out the details of
how they would aChieve this laudable goal. The Director of the cao, Robert
Reischauer, has indicated •• and this administration agrees .- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it. - Make no mistake. balancing the budget would
require tough choices and cost Arizona billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Arizona.

The Balanced Budget Amendment
would cost Arizona
$2.6 to $2.8 billion a year
Option 1: Tax increase and across-the-board spending cutT

Increases in taxes -- $1. 1 billion a year ($606 per taxpayer)
Cuts in Benefits, Services, and Defense -- $1.5 billion a year
•
•
•
•

•

$600 cut per year for the average Social Security recipient
$390 less for each person enrolled in Medicare
$228 less for each Medicaid recipient
$485 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$ 238 million additional cut in annual defense spending

Option 2: Across-the-board spending cut

Cuts in Benefits, Services, and Defense -- $ 2.8 billion a year
•
•

•
•

•

$1,091 cut per year for the average Social Security recipient
$ 709 less for each person enrolled in Medicare
$41 5 less for each Medicaid recipient
$881 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education, and other federally funded programs
$432 million additional cut in annual defense spending

'T •• Inc'•••• comon ••• 45 .. of . . - w I . .focot reduc_ pec .... g. to.re.ntege vene. bV 11etel, eQuel 10 Ihe
.w,ege ,.wnu. componenl of the ... , two . . hcil reduCtMN\ peclLegel. SpendlnO cutl
proportional .ero •• programs.

.'I!I

.-otee--

No •• ' Budgel numbere bee.cI on cao
'or FY 2000. Alloc.tlonl b •• ed on 1992 deta. The potent.al
conllectJo-;;;; ""Peet of t •• Incr..... ef'd/Of ..,.~ cut. I. not Included.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $2.8 billion a year
•

•
•
•

$' ,288 cut per year for the average Social Security recipient
$837 less for each person en~olled in Medicare
$489 less for each Medicaid recipient
$' .0 billion in reduced funding for fighting crime, building highway!
and bridges, protecting the environment, providing education, and'
other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services -- $2.7 billion a year
•
•
•

•

$956 less for each person enrolled in Medicare
$559 less for each Medicaid recipient
$'.2 billion in reduced funding for fighting crime, building highways
and bridges, protectmg the environment, providing education, and
other federally funded programs
$583 million additional cut m annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $2.6 billion a year
•
•
•

$' ,204 less for each person enrolled in Medicare
$ 704 less for each Medicaid reCipient
$' .5 billion In reduced funding for fighting crime, building highways

and bridges, protecting the enVironment, providing education, and
other federally funded programs

The State of Arkansas

and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of Arkansas?
While supponers offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CBO, Robert
Reischauer, has indicated •. and this administration agrees .- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it.· Make no mistake, balancing the budget would
require tough choices and cost Arkansas billions.
In order to encourage a more realistic, responsible debate, the Treasury Department
has analyzed five possible routes to a balanced budget in 2000. These projections
do not include the contractionary impact on the economy that might accompany a
sharp rise in taxes or reduction in spending over such a short period of time. In
this sense, these are very conservative estimates of the cost of such an
amendment to the people of Arkansas.

The Balanced Budget Amendment
would cost Arkansas
$1.5 to $1.9 billion a year
Option 1: Tax increase and across-the-board spending cut 1
Increases in taxes -- $ 530 million a year ($ 500 per taxpayer)
Cuts in Benefits, Services, and Defense -- $934 million a year
•
•
•

•

•

$537 cut per year for the average Social Security recipient
$409 less for each person enrolled in Medicare
$ 262 less for each Medicaid recipient
$269 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$ 57 million additional cut in annual defense spending

Option 2: Across-the-board spending cut
Cuts in Benefits, Services, and Defense -- $1.7 billion a year
•
•
•
•

•

$976 cut per year for the average Social Security recipient
$745 less for each person enrolled in Medicare
$476 less for each Medicaid recipient
$489 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$'03 million additional cut in annual defense spending

: T •• Incr •••• compn••• 45 .... of natIonal d.flc,t reductIon p.ckage (percentage veries by statel, equal to the
ever.o_ r.venu. COfTlC)OMnt of the le.t Iwo d.f,clt 'eduction p.ckaoe •. SpendIng cuts are propon.onel across programs.

Note: Budget numb.r. b ••ed on eao p,o,.ctlon. tor FY 2000. Allocations based on 1992 data. The potent.al
Con.,ecIIO-;';;:; Impect 01 te. Incr •••••• nellor .penel,no culS •• not .ncludad.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $1.9 billion a year
•

$ , , , 52 cut per year for the average Social Security recipient

•
•
•

$879 less for each person enrolled in Medicare
$ 562 less for each Medicaid recipient
$578 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $1.6 billion a year
•
•
•

$1 ,004 less for each person enrolled in Medicare
$642 less for each Medicaid recipient
$660 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education. and other federally funded programs
39 million additional cut In annual defense spending

· $'

Option 5: Across-the-board spending cut, excluding defense and

Social Security
Cuts in Benefits and Services - $1.8 billion a year
•

•
•

$' .264 less for each person enrolled in Medicare
$808 less for each Medicaid recipient
$831 million In reduced funding for fighting crime, building
highways and bridges. protecting the environment. providing
education. and other federally funded programs

The State of California
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of California?
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CSO, Robert
Reischauer, has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it. - Make no mistake, balancing the budget would
require tough choices and cost California billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of California

The Balanced Budget Amendment
would cost California
$21.3 to $24.7 billion a year
Option 1: Tax increase and across-the-board spending cut'

Increases in taxes -- $11.7 billion a year ($ 789 per taxpayer)
Cuts in Benefits, Services, and Defense -- $12.8 billion a year
•
•
•
•

•

$608 cut per year for the average Social Security recipient
$578 less for each person enrolled in Medicare
$160 less for each Medicaid recipient
$4.0 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$2.8 billion additional cut in annual defense spending

Option 2: Across-the-board spending cut

Cuts in Benefits, Services, and Defense -- $23.2 billion a year
•
•
e

•

•

$1,106 cut per year for the average Social Security recipient
$ , ,050 less for each person enrolled in Medicare
$290 less for each Medicaid recipient
$7.2 billion in reduced funding for fighting crime, building highways
and bridges, protectang the environment, providing education, and
other federally funded programs
$5.1 billion additional cut in annual defense spending

• T e. Incr •••• compn •••• S~ of MtlO'" dafocn reduction package (percentege venes by Itatel. equal to the
.ver.oe revenue component of the I•• t two ClahcII reOuctlon peck.oe •. Spending cuts are proportIonal across progrems.

Not.: Budget numb.,. b ••ed on CSO p,o.-CIIOM tor FY 2000. AllocatIons besed on 1992 deta. The potentlel
contr.ctlo-;;;'; Imp.ct of t •• Inc' ••••••nd/Of .pendlng cut. I. not Included.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services
•
•
•
•

eo ..

$21.3 billion a year

$1,306 cut per year for the average Social Security recipient
$1 ,240 less for each person enrolled in Medicare
$343 less for each Medicaid recipient
$8.5 billion in reduced funding for fighting crime, building highwaYI
and bridges, protecting the environment, providing education, and'
other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Sec;;,-iiy

Cuts in Benefits and Services - $24.7 billion a year
•

$ 1 ,416 less for each person enrolled in Medicare

•
•

$392 less for each Medicaid recipient
$9.7 billion in reduced funding for fighting crime, building highways

•

and bridges, protectmg the environment, providing education, and
other federally funded programs
$6.9 billion additional cut In annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $ 22.3 billion a year
•
•
•

$'.784 less for each person enrolled in Medicare
$493 less for each Medicaid recipient
$ 12.2 billion .n reduced fundmg for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

The State of Colorado
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of Colorado?
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CBD, Robert
Reischauer, has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it.· Make no mistake, balancing the budget would
reQuire tough choices and cost Colorado billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Colorado.

The Balanced Budget Amendment
would cost Colorado
$2.7 to $3.1 billion a year
Option 1: Tax increase and across-the-board spending cutT

Increases in taxes -- $1.3 billion a year ($ 722 per taxpayer)
Cuts in Benefits, Services, and Defense -- $1.6 billion a year
•
•
•
•

•

$583 cut per year for the average Social Security recipient
$41 3 less for each person enrolled in Medicare
$244 less for each Medicaid recipient
$665 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$330 million additional cut in annual defense spending

Option 2: Across-the-board spending cut

Cuts in Benefits, Services, and Defense -- $ 2.9 billion a year
•
•
•
•

•

$' ,059 cut per year for the average Social Security recipient
$ 750 less for each person enrolled in Medicare
$444 less for each Medicaid recipient
$1.2 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$600 million additional cut in annual defense spending

:T •• Incr •••• comon••' .5411. 01 MaoM dehot reGYCbOl'I o.c....oe (percentaoe vanes bV statal, equal to the
everege ,evenue component of the I . . , two det,clI reduction pec .. ege •. Spenc:hng cut. e,e p,oponlonel ac,oss programs.
Nota: Budoe, numbers ba.ed on cao O'O,.ctJOM 1o' FY 2000. Allocations based on 1992 data. The potentlel
contrec'lo~ Impact ot 'e. 1I'ICf • • • • • •nd/Of soef'4t~ evtl II not Included.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $2.7 billion a year
•
•
•
•

$' ,251 cut per year for the average Social Security recipient
$886 less for each person enrolled in Medicare
$525 less for each Medicaid recipient
$ 1.4 billion in reduced funding for fighting crime, building highwa~
and bridges, protecting the environment, providing education, and,
other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $ 3. 1 billion a year
•
•
•

•

$1,01 1 less for each person enrolled in Medicare
$599 less for each Medicaid recipient
$ 1.6 billion in reduced funding for fighting crime, building highway,
and bridges. protecting the environment, providing education, and
other federally funded programs
S809 million additional cut In annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $2.9 billion a year
•
•

•

$1,274 less for each person enrolled in Medicare
$ 755 less for each Medicaid recipient
$2. 1 billion In reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

The State of Connecticut
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of
Connecticut? While supporters offer a lot of tough talk, few proponents spell out
the details of how they would achieve this laudable goal. The Director of the CSO,
Robert Reischauer, has indicated -- and this administration agrees -- that any
discussion of a balanced budget amendment must be in the context of an honest
discussion about the program cuts and tax increases necessary to achieve such a
balance. According to Reischauer, "it would be a particular folly to pass a balanced
budget amendment and ignore the need to expeditiously enact legislation that
would offer some hope of complying with it. Make no mistake, balancing the
budget would require tough choices and cost Connecticut billions.
II

In order to encourage a more realistic. responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Connecticut.

The Balanced Budget Amendment
would cost Connecticut
$2.3 to $3.4 billion a year
Option 1: Tax increase and across-the-board spending cut T

Increases in taxes -- $1.9 billion a year ($1, 100 per taxpayer)
Cuts in Benefits, Services, and Defense -- $1.5 billion a year
•
•

$663 cut per year for the average Social Security recipient
$484 less for each person enrolled in Medicare
$ 380 less for each Medicaid recipient
$313 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$293 million additional cut in annual defense spending

•

•

•

Option 2: Across-the-board spending cut

Cuts in Benefits, Services, and Defense -- $2.7 billion a year
•

$ 1,206 cut per year for the average Social Security recipient

•
•
•

$881 less for each person enrolled in Medicare
$691 less for each Medicaid recipient
$569 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$533 million additional cut in annual defense spending

•

: T••• nc,•••• comon.e. 45"- 01 nel.onel deficit ,eduCtion peckaoe (percentege vanas bV statel. equal to the
aYe'.ge ,eYe"". componenl of the 'a.1 IWO def,cl' ,eduction peck.oe •. Spandlng CUls are proponlonal across programs.
Note:

Budget numb." ba.eeI on

ceo p,otectlon. 10' F'Y

cont,.ctlo~ Impact of ta. Inc'..... end/or epend.ng

CUll"

2000. Allocations besed on 1992 data. The potentlel
nOl Included.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $2.5 billion a year
•
•
•
•

$1,423 cut per year for the average Social Security recipient
$1 ,040 less for each person enrolled in Medicare
$816 less for each Medicaid recipient
$672 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services -- $2.6 billion a year
•
•
•

•

$1 , 187 less for each person enrolled in Medicare
$932 less for each Medicaid recipient
$767 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$ 719 million additional cut in annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $2.3 billion a year
•
•
•

$1,496 less for each person enrolled in Medicare
$1 , 1 74 less for each Medicaid recipient
$966 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

The State of Delaware
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of Delaware?
While supporters offer a lot of tough talk. few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CBO, Robert
Reischauer, has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it. - Make no mistake, balancing the budget would
require tough choices and cost Delaware billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Delaware.

The Balanced Budget Amendment
would cost Delaware
$418 to $527 million a year
Option 1: Tax increase and across-the-board spending cut'
Increases in taxes -- $276 million a year ($774 per taxpayer)
Cuts in Benefits, Services, and Defense -- $ 251 million a year
•
•
•
•

$621 cut per year for the average Social Security recipient
$410 less for each person enrolled in Medicare
$235 less for each Medicaid recipient
$83 million in reduced funding for fighting crime, building highways

•

and bridges, protecting the environment, providing education, and
other federally funded programs
$24 million additional cut in annual defense spending

Option 2: Across-the-board spending cut

Cuts in Benefits, Services, and Defense -- $456 million a year
•
•

•
•

•

$1 , 1 28 cut per year for the average Social Security recipient
$745 less for each person enrolled in Medicare
$428 less for each Medicaid recipient
$150 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$44 million additional cut in annual defense spending

: T ••• ncr •••• CDmC»n ••• ~5" of _t.onal d.f,Ctl reduCbOn pack.ge (percentage vanes bV slatei. equal to ,he
awrage r.wnue cDmC»onent 0' the 1.. 1 t_o de"C'" raGucbon pedlage., Spencllng cut. ara propon,onal acro •• programs.
Note: Budge, numbar. b ..ed on
contr.etto; Imp.CI of t ••• nc .......

cao prQfeCIION 'or FY

2000. Allocabona beaed on 1992 data. The pOlenl.el

""'0' apendtng cut. ,. not Included.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $487 million a year
•
•
•
•

$, ,332 cut per year for the average Social Security recipient
$879 less for each person enrolled in Medicare
$ 505 less for each Medicaid recipient
$'77 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services -- $418 million a year
•

$' ,004 less for each person enrolled in Medicare

•
•

$577 less for each Medicaid recipient
$203 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$59 million additional cut in annual defense spending

•

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $452 million a year
•
•

•

$1,265 less for each person enrolled in Medicare
$ 727 less for each Medicaid reCipient
$255 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

The District of Columbia
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the District of Columbia?
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CSO, Robert
Reischauer, has indicated .- and this administration agrees .. that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it.· Make no mistake, balancing the budget would
reQuire tough choices and cost DC billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of DC.

The Balanced Budget Amendment
would cost DC
$2.1 to $4.8 billion a year
Option 1: Tax increase and across-the-board spending cut'

Increases in taxes -- $ 285 million a year ($851 per taxpayer)
Cuts in Benefits, Services, and Defense -- $1.8 billion a year
•

$ 5 1 5 cut per year for the average Social Security recipient

•

$848 less for each person enrolled in Medicare

•
•

$322 less for each Medicaid recipient
$ 1.4 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$220 million additional cut in annual defense spending

•

Option 2: Across-the-board spending cut

Cuts in Benefits. Services. and Defense -- $3.3 billion a year
•
•
•

•
•

$937 cut per year tor the average Social Security recipient
$ 1,543 less for each person enrolled in Medicare
$ 586 less for each Medicaid recipient
$2.6 billion in reduced funding for fighting crime, building highways
and bridges, protect.ng the environment, providing education, and
other federally funded programs
$400 million additional cut in annual defense spending

;1 •• Incr •••• compn•••• 5 ... 0' NOOne! d.hot ,ecluCoon pack.ge (pe,centage vanes bV .tllte), eQual to the
.v.r.~ r.~nu. component 0' the ,.. ttwo d.'ocot ,eduCnon peclr.eg ••. Sp.ndlng cut. IIr. proportional across progrllm6.

Not.: Budget numb.r. b ...d on cao p.o,ecnoM lor FY 2000. Allocations ba.ad on 1992 data. Tha potential
contr.ctlo~ IITIP.ct of t •• Incr ••••• endlor eoe.-ng cut. ,. not .,~Iuded.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $3.4 billion a year
•
•

•
•

$ 1,106 cut per year for the average Social Security recipient
$ 1,821 less for each person enrolled in Medicare
$692 less for each Medicaid recipient
$3.1 billion in reduced funding for fighting crime, building highways
and bridges. protecting the environment. providing education, and
other federally funded programs

Option 4: Across-the-board s!1lJnding cut, excluding Social
Security

Cuts in Benefits and Services -- $4.3 billion a year
•

$2,080 less for each person enrolled in Medicare

•

$ 790 less for each Medicaid recipient
$3.5 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$539 million additional cut in annual defense spending

•
•

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $4.8 billion a year
•

$2.620 less for ·each person enrolled in Medicare

•
•

$996 less for each Medicaid recipient
$4.4 billion in reduced funding for fighting crime. building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

The State of Florida
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of Florida?
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CBO, Robert
Reischauer, has indicated .- and this administration agrees .• that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it.- Make no mistake, balancing the budget would
require tough choices and cost Florida billions.
In order to encourage a more realistic. responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Florida.

The Balanced Budget Amendment
would cost Florida
$9.6 to $11.0 billion a year
Option 1: Tax increase and across-the-board spending cut T

Increases in taxes -- $4.8 billion a year ($720 per taxpayer)
Cuts in Benefits, Services, and Defense -- $5.8 billion a year
•
•
•

$597 cut per year for the average Social Security recipient
$472 less for each person enrolled in Medicare
$ 1 70 less for each Medicaid recipient
$ 1.5 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$ 71 9 million additional cut in annual defense spending

•

•

Option 2: Across-the-board spending cut

Cuts in Benefits, Services, and Defense -- $10.6 billion a year
•
•
•
•

$1,085 cut per year for the average Social Security recipient
$858 less for each person enrolled in Medicare
$309 less for each Medicaid recipient
$2.7 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$' .3 billion additional cut in annual defense spending

•

;T •• Incr•••• Comcln ••• "5'11. 01 NtJonei d.ftCII ,eduCtion p.ck.ge (percenl.ge .... nes bV state I. equal to the

.....,.Q4I ,.....nu. component of the ...t t"o d.hctl ,eduction Deek.g••.
Note:
CO"".C1l0;;;':;

BudQ41t

Spendmg cutl lire proportional acr088 programs.

numbe', b ••ed on CBO D'O,.CtJOM for FY 2000.

I~act of ta. Incr..... ancJlor

Allocations basad on 1992 data. The potential

apendlng CUll I. not Included.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $11.0 billion a year
•
•
•
•

$1,281 cut per year for the average Social Security recipient
$1,013 less for each person enrolled in Medicare
$365 less for each Medicaid recipient
$3.2 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services -- $9.6 billion a year
•
•
•

•

$1 , 157 less for each person enrolled in Medicare
$41 7 less for each Medicaid recipient
$3.7 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$' .8 billion additional cut in annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $9.9 billion a year
•

$' ,458 less for each person enrolled in Medicare

•
•

$525 less for each Medicaid recipient
$4.6 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
.

The State of Georgia

and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of Georgia?
While supporters offer a lot of tough talk. few proponents spell out the details of
how they would achieve this laudable goal. The Director of the ceo, Robert
Reischauer. has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it.· Make no mistake. balancing the budget would
require tough choices and cost Georgia billions.
In order to encourage a more realistic. responsible debate. the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Georgia.

The Balanced Budget Amendment
would cost Georgia
$4.3 to $4.9 billion a year
Option 1: Tax increase and across-the-board spending cutT

Increases in taxes -- $2.1 billion a year ($654 per taxpayer)
Cuts in Benefits, Services, and Defense -- $2.6 billion a year
•
•
•
•

•

$552 cut per year for the average Social Security recipient
$ 394 less for each person enrolled in Medicare
$ 21 3 less for each Medicaid recipient
$ 795 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$ 586 million additional cut in annual defense spending

Option 2: Across-the-board spending cut
Cuts in Benefits, Services, and Defense -- $4.7 billion a year
•
•

$' ,004 cut per year for the average Social Security recipient
$ 71 7 less for each person enrolled in Medicare

•

$388 less for each Medicaid recipient
$, .4 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$1.1 billion additional cut in annual defense spending

•

•

:T •• 'ncr•••• compn ••• ~5'" ot netlo,* d.flClt recklctlon peck age !percentege veneB by Btete), equel to the
aye rag. r._nu. component of the I.at two d.heet reduCtion pedtage•. Sp.nchng cut. ars proportlonsl across programs.
Not.: Budget numba,. ba.ed on cao proteCbOM tor N 2000. AllocatIon. based on 1992 dets. The potential
contrKUo; tmpaet of t.ll 'ncr••••••nd/or 84)endtng cute ,. not Included.

The Balanced Budget Amendment
would cost Georgia
$4.3 to $4.9 billion a year
Option 1: Tax increase and across-the-board spending cutT

Increases in taxes -- $2.1 billion a year ($654 per taxpayer)
Cuts in Benefits, Services, and Defense -- $2.6 billion a year
•
•
•
•

•

$552 cut per year for the average Social Security recipient
$ 394 less for each person enrolled in Medicare
$ 21 3 less for each Medicaid recipient
$ 795 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$586 million additional cut in annual defense spending

Option 2: Across-the-board spending cut

Cuts in Benefits, Services, and Defense -- $4.7 billion a year
•
•

$ 1,004 cut per year for the average Social Security recipient
$ 7 1 7 less for each person enrolled in Medicare

•

$388 less for each Medicaid recipient
$ 1.4 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$ 1. 1 billion additional cut in annual defense spending

•

•

: T•• 'ncr•••• compn••• "5"- of netJonei defiCit reduction peck.ge (percentege vanes by IItatel. equal to the
.ve,.ge ,.venu. eomponent of the I.et Iwo d"'at ,eduCtion pltdl.gee. Sp.nd,ng eutl a,e proportIonal .crOSIi programs.
Not.: Budget numbe,. bee" on cao p'O!8ClJone 'or r:v 2000. AllocatIons beled on 1992 data. The potential
eontrec:bo-;;;'; tmp.ct of Ie. ,nc,••••••ndlor 8Mndtng cutl " no! Included.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $4.3 billion a year
•
•
•
•

$1,185 cut per year for the average Social Security recipient
$846 less for each person enrolled in Medicare
$458 less for each Medicaid recipient
$1.7 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

Option 4: Across-the-board spend;~g cut, excluding Social
Security

Cuts in Benefits and Services -- $4.9 billion a year
•
•
•

•

$966 less for each person enrolled in Medicare
$523 less for each Medicaid recipient
$1.9 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$, .4 billion additional cut in annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $4.3 billion a year
•
•
•

$' ,217 less for each person enrolled in Medicare
$659 less for each Medicaid recipient
$2.5 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

The BtI/lllleed Budge' Amend",."t and G.argll

The State of Hawaii
and the
Balanced Budget Amendment

o

What does a Balanced Budget Amendment mean to the State of Hawaii?
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CBO, Robert
Reischauer. has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it.· Make no mistake, balancing the budget would
require tough choices and cost Hawaii billions.
In order to encourage a more realistic. responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Hawaii.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $4.3 billion a year
•
•
•
•

$ , , , 85 cut per year for the average Social Security recipient
$846 less for each person enrolled in Medicare
$458 less for each Medicaid recipient
$' .7 billion in reduced funding for fighting crime, building highways
and bridges,· protecting the environment, providing education, and
other federally funded programs

Option 4: Across-the-board spend;r:~ cut, excluding Social
Security

Cuts in Benefits and Services -- $4.9 billion a year
•
•
•

•

$ 966 less for each person enrolled in Medicare
$ 523 less for each Medicaid recipient
$'.9 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$1.4 billion additional cut in annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $4.3 billion a year
•
•
•

$1 ,21 7 less for each person enrolled in Medicare
$659 less for each Medicaid recipient
$2.5 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

The State of Hawaii
and the
Balanced Budget Amendment

o

What does a Balanced Budget Amendment mean to the State of Hawaii?
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CBD, Robert
Reischauer, has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it.· Make no mistake, balancing the budget would
reQuire tough choices and cost Hawaii billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Hawaii.

The Balanced Budget Amendment
would cost Hawaii
$769 million to $1.2 billion a year
Option 1: Tax increase and across-the-board spending cut T

Increases in taxes -- $459 million a year ($ 751 per taxpayer)
Cuts in Benefits, Services, and Defense -- $ 581 million a year
•
•
•
•

•

$578 cut per year for the average Social Security recipient
$350 less for each person enrolled in Medicare
$ 204 less for each Medicaid recipient
$172 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education. and other federally funded programs
$ 223 million additional cut in annual defense spending

Option 2: Across-the-board spending cut
Cuts in Benefits, Services. and Defense -- $1. 1 billion a year
•

$' ,051 cut per year for the average Social Security recipient

•
•
•

$636 less for each person enrolled in Medicare
$371 less for each Medicaid recipient
$313 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education. and other federally funded programs
$405 million additional cut in annual defense spending

•

:T.x Incr•••• CC)mC)n. . . . s~ of netJOIWI d.hc:I, reduction pack.ge (pereentaga vane. bv .tatel. equal to the
._raga r._,.,. eC)mC)onan' of thil Int two d.feo' ,eduCtion pedo.ave'· Spending eut. ere propo~lonal eeross programs.
Not.: Budoat number. baaed on cao OIotaCbona for FY 2000. Alloe.tlons based on 1992 data. The potential
c:ontrec:bo-;;;':; lfnC).ct of
Incr..... end/o, ..,.ttdtng cut. " not Included.

,.x

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $769 million a year
•

$ 1,241 cut per year for the average Social Security recipient

•
•
•

$751 less for each person enrolled in Medicare
$438 less for each Medicaid recipient
$370 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $1.2 billion a year
•
•

•

•

$858 less for each person enrolled in Medicare
$ 50 1 less for each Medicaid recipient
$423 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$ 546 million additional cut in annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $ 786 million a year
•
•
•

$ 1,080 less for each person enrolled in Medicare
$631 less for each Medicaid recipient
$ 532 million in reduced funding for fighting crime, building
highways and bridges, protectmg the environment, providing
education, and other federally funded programs

The State of Idaho

and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of Idaho?
While supporters offer a lot of tough talk. few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CBO. Robert
Reischauer, has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it.- Make no mistake, balancing the budget would
require tough choices and cost Idaho billions.
In order to encourage a more realistic. responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Idaho.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $ 769 million a year
•
•
•
•

$1,241 cut per year for the average Social Security recipient
$751 less for each person enrolled in Medicare
$438 less for each Medicaid recipient
$370 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $1.2 billion a year
•
•

•

•

$858 less for each person enrolled in Medicare
$ 50 1 less for each Medicaid recipient
$423 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$546 million additional cut in annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $ 786 million a year
•
•
•

$1,080 less for each person enrolled in Medicare
$631 less for each Medicaid recipient
$532 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

The State of Idaho
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of Idaho?
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the cao, Robert
Reischauer, has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it. - Make no mistake, balancing the budget would
require tough choices and cost Idaho billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Idaho.

The Balanced Budget Amendment
would cost Idaho
$707 to $958 million a year
Option 1: Tax increase and across-the-board spending cut T

Increases in taxes -- $266 million a year ($556 per taxpayer)
Cuts in Benefits, Services, and Defense -- $441 million a year
•
•
•
•

•

$575 cut per year for the average Social Security recipient
$342 less for each person enrolled in Medicare
$ 282 less for each Medicaid recipient
$222 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$ 20 million additional cut in annual defense spending

Option 2: Across-the-board spending cut

Cuts in Benefits, Services, and Defense -- $ 80 1 million a year
•

$ 1,045 cut per year for the average Social Security recipient

•

$621 less for each person enrolled in Medicare
$ 51 3 less for each Medicaid recipient
$403 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$36 million additional cut in annual defense spending

•

•

•

:T.lllncr•••• CQmC)n •••• S~ of RIIuonei dehcn reduction pecll.g. (percentage vanas by state I. equal to the
.~r.ve ,e~nue component of the ,•• , t ... o defiCIt reduCbOn pecaege.. Spending cut. ere proportional acrOB. programs.

!t2!!: 8ud~t number. b ..ed on CBO Pfo,acnoM for N 2000. Alloc.tlon. ba.ed on 1992 dala. The potential
contr.ct,one", '"'P.ct of , •• 'ncr..... ..-itor ..,.ndo"G cut. ,. not Included.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $ 903 million a year
•
•
•
•

$1,233 cut per year for the average Social Security recipient
$ 7 33 less for each person enrolled in Medicare
$605 less for each Medicaid recipient
$476 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

Option 4: Across-the-board spending cut, Gxcluding Social
Security

Cuts in Benefits and Services -- $810 million a year
•
•
•

•

$837 less for each person enrolled in Medicare
$69' less for each Medicaid recipient
$544 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
.
$49 million additional cut in annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $958 million a year
•

$' ,055 less for each person enrolled in Medicare

•
•

$871 less for each Medicaid recipient
$685 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

The State of Illinois
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of Illinois?
While supponers offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goa/. The Director of the CSO, Robert
Reischauer, has indicated .- and thIs adminIstration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it. - Make no mistake, balancing the budget would
require tough choices and cost ""nols billions.
In order to encourage a more realistic, responsible debate, the Treasury
Depanment has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Illinois.

The Balanced Budget Amendment
would cost Illinois
$7.0 to $8.9 billion a year
Option 1: Tax increase and across-the-board spending cut T

Increases in taxes -- $4.8 billion a year ($822 per taxpayer)
Cuts in Benefits, Services, and Defense -- $4.2 billion a year
•

$638 cut per year for the average Social Security recipient

•
•

$555 less for each person enrolled in Medicare
$1 84 less for each Medicaid recipient
$1.3 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$ 232 million additional cut in annual defense spending

•
•

Option 2: Across-the-board spending cut
Cuts in Benefits. Services. and Defense -- $ 7.6 billion a year
•

$, ,159 cut per year for the average Social Security recipient

•

$1,010 less for each person enrolled in Medicare

•

$335 less for each MedIcaId recipient
$2.3 billion In reduced fundmg for fighting crime, building highways
and bridges. protecting the environment, providing education, and
other federally funded programs
$422 million additional cut in annual defense spending

•
•

; T •• Incr•••• compn . . . .5'" of neCioneil ca.hat reduCtion peck age (p.rcentage vanes bV atatel. eQual to the
.wr.ge ,awnua component of the I . . t two dahclt redvCbQn Q«lr.agel SpendIng cuts .re proponlonal across programs.
Note

Budget number. b ••ed on

cao pi'OfKClOft8

fo' FY 2000

AliocaUons based on 1992 data. The potential

conuectlo-;;;'; Imo.Ct of , •• IftCr_. ._. andlof eoenclo"Q cut ••• not Included.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $8.4 billion a year
•
•
•
•

$1,368 cut per year for the average Social Security recipient
$1,192 less for each person enrolled in Medicare
$396 less for each Medicaid recipient
$2.7 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services -- $7.0 billion a year
•
•
•

•

$1 ,361 less for each person enrolled in Medicare
$452 less for each Medicaid recipient
$3. 1 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$569 million additional cut In annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $8.0 billion a year
•

$ 1,71 5 less for each person enrolled in Medicare

•
•

$570 less for each Medicaid recipient
$3.9 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

The State of Indiana
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of Indiana?
While supporters offer a lot of tough talk. few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CBO, Robert
Reischauer. has indicated .- and this administration agrees .. that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer. -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it.· Make no mistake, balancing the budget would
require tough choices and cost Indiana billions.
In order to encourage a more realistic. responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Indiana.

The Balanced Budget Amendment
would cost Indiana
$2.9 to $3.7 billion a year
Option 1: Tax increase and across-the-board spending cut T

Increases in taxes -- $1.8 billion a year ($651 per taxpayer)
Cuts in Benefits, Services, and Defense -- $1.9 billion a year
•
•
•
•

•

$633 cut per year for the average Social Security recipient
$408 less for each person enrolled in Medicare
$329 less for each Medicaid recipient
$388 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$ 193 million additional cut in annual defense spending

Option 2: Across-the-board spending cut

Cuts in Benefits, Services, and Defense -- $ 3.4 billion a year
•
•
•
•

•

$1 , , 50 cut per year for the average Social Security recipient
$742 less for each person enrolled in Medicare
$598 less for each Medicaid recipient
$ 705 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education, and other federally funded programs
$351 million additional cut in annual defense spending

__

~T ••• ncr.... compn... ~s
of netIonIII Oeftc:ot reduCtJOn PKk.ga (percantaoe vanal by Itatal, equal to the
alter-o- r.lte""e component of the I. ., t.o defICIt reOuc:tJOn pedLege •. Spendlno cutl .r. proportional acrOl1 programa.
~: Budget~" b..-d Oft ceo ptOteICbOfte for FV 2000. Allocatlonl baled on 1992 data. The potentllli
contrKtionary ImOKt of ta. Incr..... !Md/or ecMftdt"O cut. II not Included.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $3.6 billion a year
•
•
•
•

$1,358 cut per year for the average Social Security recipient
$875 less for each person enrolled in Medicare
$706 less for each Medicaid recipient
$833 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

Option 4: Across-the-board spending cut, excl13ding Social
Security

Cuts in Benefits and Services - $ 2.9 billion a year
•
•
•

$1,000 less for each person enrolled in Medicare
$807 less for each Medicaid recipient
$951 million in reduced funding for fighting crime, building

•

highways and bridges. protecting the environment, providing
education, and other federally funded programs
.
$473 million additional cut in annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services - $3.1 billion a year
•
•
•

$1,259 less for each person enrolled in Medicare
$1,016 less for each Medicaid recipient
$1.2 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

The State of Iowa

and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of Iowa?
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CBO, Robert
Reischauer, has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it. - Make no mistake, balancing the budget would
require tough choices and cost Iowa billions.
In order to encourage a more realistic. responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Iowa.

The Balanced Budget Amendment
would cost Iowa
$1.7 to $2.2 billion a year
Option 1: Tax increase and across-the-board spending cut'
Increases in taxes -- $816 million a year ($591 per taxpayer)
Cuts in Benefits, Services, and Defense -- $1. 1 billion a year
•
•
•
•

•

$604 cut per year for the average Social Security recipient
$410 less for each person enrolled in Medicare
$249 less for each Medicaid recipient
$337 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$45 million additional cut in annual defense spending

Option 2: Across-the-board spending cut

Cuts in Benefits. Services. and Defense -- $ 2.0 billion a year
•
•

•
•

•

$1 ,099 cut per year for the average Social Security recipient
$ 746 less for each person enrolled in Medicare
$453 less for each Medicaid recipient
$613 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$83 million additional cut in annual defense spending

. T•• ,nc,._. campn ••• 45"" 0' NltIOfteI "hot .eoucbOft pac:keoe jpercentege vart.a bV atat.l. equel to the
.".r.ge r.".nu. compo.... nt 0' IN I.. , "'''0 a.foco' ,educbOft pac:kege.. Spenchng cut. are proportional aero II programa.
~: Budget numben beeed Oft C:BO PfoteCtJone to. FY 2000. Alloc.tlon. baa.d on 1992 data. Tha potential
coft"eeuonary '"'Peel of ••• Inc'..... and/or SCMncIong cuta la not Included.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $ 2.2 billion a year
•
•
•
•

$1,297 cut per year for the average Social Security recipient
$881 less for each person enrolled in Medicare
$535 less for each Medicaid recipient
$723 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services -- $1.7 billion a year
•
•
•

•

$1,006 less for each person enrolled in Medicare
$ 611 less for each Medicaid recipient
$826 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$111 million additional cut in annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services - $2.0 billion a year
•
•
•

$1,267 less for each person enrolled in Medicare
$ 769 less for each Medicaid recipient
$1.0 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

The State of Kansas
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of Kansas?
While supporters offer a lot of tough talk. few proponents spell out the details of
how they would achieve this laudable goal. The Director of the ceo, Robert
Reischauer, has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer. -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it. - Make no mistake, balancing the budget would
require tough choices and cost Kansas billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractlonary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Kansas.

The Balanced Budget Amendment
would cost Kansas
$1 .8 to $1.9 billion a year
Option 1: Tax increase and across-the-board spending cut T

Increases in taxes -- $821 million a year ($676 per taxpayer)
Cuts in Benefits, Services, and Defense -- $1.0 billion a year
•
•
•
•

•

$612 cut per year for the average Social Security recipient
$469 less for each person enrolled in Medicare
$294 less for each Medicaid recipient
$295 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$ 1 50 million additional cut in annual defense spending

Option 2: Across-the-board spending cut

Cuts in Benefits, Services, and Defense -- $1.9 billion a year
•

$ 1 , , , 3 cut per year for the average Social Security recipient

•
•
•

$852 less for each person enrolled in Medicare
$535 less for each Medicaid recipient
$536 million in reduced fundIng for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$272 million additional cut in annual defense spending

•

:T •• Incr"",, coml)n •••• 5 .. 01 Noone! d"flClt reductIOn peck age \percentage vanes bV atelel. eQual to the
__ rage r.venu. component 01 the
two dehclt ,eclvCbOn pedLege8. Spending cut. ere proponlonal aero •• programs.

I",

Note: 8ucIget number. b .. ed on ceo P'OfIJCuon. for FY 2000. Allocation. be.ed on 1992 data. The potentllsl
contrKtJo; ~Kt of te. ,ncra"". endlOf eperO"V cull,. nollncluded.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $1.9 billion a year
•
•
•
•

$1 ,314 cut per year for the average Social Security recipient
$1,006 less for each person enrolled in Medicare
$631 less for each Medicaid recipient
$632 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

Option 4: Across-the-board spending cut, excluding Sncial
Security

Cuts in Benefits and Services -- $1.8 billion a year
•
•
•

•

$1 , 149 less for each person enrolled in Medicare
$ 721 less for each Medicaid recipient
$ 722 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education. and other federally funded programs
$367 million additional cut in annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $1.8 billion a year
•
•
•

$1,448 less for each person enrolled in Medicare
$908 less for each Medicaid recipient
$910 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education. and other federally funded programs

The &.I.need Budget Amendment ",d K,nslJ

The State of Kentucky
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of Kentucky?
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CSO, Robert
Reischauer, has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it. - Make no mistake, balanCing the budget would
require tough choices and cost Kentucky billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Kentucky.

The Balanced Budget Amendment
would cost Kentucky
$2.4 to $2.8 billion a year
Option 1: Tax increase and across-the-board spending cut'
Increases in taxes -- $ 937 million a year ($ 566 per taxpayer)
Cuts in Benefits, Services, and Defense -- $1.4 billion a year
•
•

$ 540 cut per year for the average Social Security recipient
$ 368 less for each person enrolled in Medicare

•

$211 less for each Medicaid recipient

•

$404 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$164 million additional cut in annual defense spending

•

Option 2: Across-the-board spending cut

Cuts in Benefits, Services, and Defense -- $2.6 billion a year
•
•
•

•

•

$981 cut per year for the average Social Security recipient
$669 less for each person enrolled in Medicare
$493 less for each Medicaid recipient
$135 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education. and other federally funded programs
$ 298 million additional cut in annual defense spending

:Ta. Incr•••• compn••• 45-' of ftetJOftaI "fOCI' ,acklcbOn package Cpercentege vllnlle by eilltlli. equIII to the
aver.ge revenue component of tN 1. .1 '..,0 o.hclt racklcllOf\ package•. SPllndlng cut. lire proportlonlll IIcroee progrllms.
~: Budget numba,. b..ed on C80 P'OfIICbOne for FV 2000. AIlOClltlon. blleed on 1992 dlltll. The potentllll
concractJonary Impact of ta. Incr..... endlOr ~ng cut. II not Included.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $2.8 billion a year
•
•
•

•

$1 , 1 58 cut per year for the average Social Security recipient
$ 790 less for each person enrolled in Medicare
$ 582 less for each Medicaid recipient
$868 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

Option 4: A~ross-the-boa,d spending cut, excluding Social
Security

Cuts in Benefits and Services -- $2.5 billion a year
•
•
•

$902 less for each person enrolled in Medicare
$664 less for each Medicaid recipient
$991 million in reduced funding for fighting crime, building

•

highways and bridges, protecting the environment, providing
education, and other federally funded programs
$401 million additional cut in annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $ 2.7 billion a year
•

•
•

36 less for each person enrolled in Medicare
$837 less for each Medicaid recipient
$'.2 billion In reduced funding for fighting crime, building highways
$ , •,

and bridges, protecting the environment, providing education, and
other federally funded programs

The State of Louisiana
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of louisiana?
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the ceo, Robert
Reischauer, has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Aeischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it.· Make no mistake, balancing the budget would
require tough choices and cost louisiana billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of louisiana.

The Balanced Budget Amendment
would cost Louisiana
$2.8 to $3.4 billion a year
Option 1: Tax increase and across-the-board spending cut'

Increases in taxes -- $1.1 billion a year ($588 per taxpayer)
Cuts in Benefits, Services, and Defense -- $1.7 billion a year
$ 54 1 cut per year for the average Social Security recipient
$414 less for each person enrolled in Medicare
$41 5 less for each Medicaid recipient
$445 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education, and other federally funded programs
$182 million additional cut in annual defense spending

•

•
•
•
•

Option 2: Across-the-board spending cut
Cuts in Benefits, Services, and Defense -- $3.1 billion a year
•

$984 cut per year for the average Social Security recipient
$ 754 less for each person enrolled in Medicare
$ 754 less for each Medicaid recipient
$808 million in reduced fundmg for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$331 million additional cut in annual defense spending

•
•

•

•

;T •• IftC ••••• c:omo" ••• 45~ 0' _tlOftel de'lCtt .educ:bOft peek.ge (percentage vene. bv stetel. equel to the
the I. . t two
.IIOuCtJOn peckegel Sp.ndlng cull ere proponlonel ecr088 programs.

O."CI'

.w ••ge •• wnu. COfnCl0_nt 0'
Note:

Budge' numbe •• b . . ec:t

Of'

CIO DfoteCbOne for

r:v 2000

Allocation. ba.ed on 1992 deta. The potentlel

contr.cno-;;;; empact 01 t •• IftC ...... end/o' ~""'no CUll '1 not Included.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $3.3 billion a year
$ 1,162 cut per year for the average Social Security recipient
$890 less for each person enrolled in Medicare
$891 less for each Medicaid recipient
$954 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

•
•
•
•

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services -- $3.2 billion a year
•
•
•

•

$1,016 less for each person enrolled in Medicare
$1,017 less for each Medicaid recipient
$1.1 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$447 million additional cut in annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services - $3.4 billion a year
•
•
•

$ 1,280 less for each person enrolled in Medicare
$1,281 less for each Medicaid recipient
$ 1.4 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

The State of Maine
and the
Balanced Budget Amendment

)

I

What does a Balanced Budget Amendment mean to the State of Maine?
While supporters offer a lot of tough talk. few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CSO. Robert
Reischauer, has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax Increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it.· Make no mistake. balancing the budget would
require tough choices and cost Maine billions.
In order to encourage a more realistic. responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Maine.

The Balanced Budget Amendment
would cost Maine
$ 932 million to $1. 1 billion a year
Option 1: Tax increase and across-the-board spending cut T

Increases in taxes -- $336 million a year ($560 per taxpayer)
Cuts in Benefits, Services, and Defense -- $596 million a year
•
•
•
•

•

$530 cut per year for the average Social Security recipient
$437 less for each person enrolled in Medicare
$322 less for each Medicaid recipient
$136 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$148 million additional cut in annual defense spending

Option 2: Across-the-board spending cut

Cuts in Benefits, Services, and Defense -- $1. 1 billion a year
•
•
•
•

•

$964 cut per year for the average Social Security recipient
$794 less for each person enrolled in Medicare
$585 less for each Medicaid recipient
$246 million In reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$270 million additional cut in annual defense spending

o.

·T.lI .ncr•••• cOft1C)nl" .54!1o.
".~ "fICO' ,eductIOn peck age lpercenlege veruts by 8tate). eQual to the
.v.rege '.""nu. cOft1C)onent of the la,t two d.focl' ,.auctIOn peck.gel. Sp.ndlng cut.
proportlona' IIcros. programs.

'f'

No •• : Budget numb.rs Meed on C80 ~oteCt>one tOt FY 2000. Allocations ba.ed on 1992 date. The potentllli
con,reetlo; '"'Peet 01 ta. ,nc,..... end/Of ..,.ndong cull" not Included.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services •• $ 961 million a year
•
•
•
•

$',138 cut per year for the average Social Security recipient
$938 less for each person enrolled in Medicare
$691 less for each Medicaid recipient
$291 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

Option 4: Acros$-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services •• $1. 1 billion a year
•
•
•

•

$ 1,071 less for each person enrolled in Medicare
$ 7 89 less for each Medicaid recipient
$332 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education, and other federally funded programs
$364 million additional cut in annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services .- $939 million a year
•
•
•

$1,349 less for each person enrolled in Medicare
$994 less for each Medicaid recipient
$419 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

The State of Maryland
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of Maryland?
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CBO, Robert
Reischauer, has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, Wit would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it.· Make no mistake, balancing the budget would
require tough choices and cost Maryland billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Maryland.

The Balanced Budget Amendment
would cost Maryland
$5.0 to $6.1 billion a year
Option 1: Tax increase and across-the-board spending curl

Increases in taxes -- $2.1 billion a year ($840 per taxpayer)
Cuts in Benefits, Services, and Defense -- $2.9 billion a year
•
•
•

•

•

$605 cut per year for the average Social Security recipient
$526 less for each person enrolled in Medicare
$ 304 less for each Medicaid recipient
$'.5 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$541 million additional cut in annual defense spending

Option 2: Across-the-board spending cut

Cuts in Benefits, Services, and Defense -- $ 5.4 billion a year
•

$' , , 00 cut per year for the average Social Security recipient

•
•
•

$956 less for each person enrolled in Medicare
$553 less for each Medicaid recipient
$2.6 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$983 million additional cut in annual defense spending

•

'l •• Incr•••• CDmPn••• 45"'" 0' net-W cs.f>CI, r.cswcnon pac....Il. Ip.rc.n'.Il. Vltrlll8 by Itate), eQuel to the
.verage r.ve"". component of lhe I.. t ,wo d.'tO' reductIOn pack.gel. Sp.ndlng cutl .r. proportional aero •• programs.
Not.: Budget!'lUfnbe,. baead on C80 Ofo,ec~ 'or r:v 2000. Allocatlonl b •• ed on 1992 data. The potential
contractJo; Imp.ct of , •• Incr••••• andlor eoendtng cull I' not Included.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $ 5.2 billion a year
•
•
•
•

$ 1,298 cut per year for the average Social Security recipient
$ 1, 128 less for each person enrolled in Medicare
$653 less for each Medicaid recipient
$3.1 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services -- $ 6. 1 billion a year
•
•
•

•

$ 1,289 less for each person enrolled in Medicare
$745 less for each Medicaid recipient
$3.6 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$1.3 billion additional cut in annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $6.0 billion a year
•

$, ,623 less for each person enrolled in Medicare

•
•

$939 less for each Medicaid recIpient
$4.5 billion In reduced fundmg for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

The 8IIIenced Budge' Amendment end Maryl,nd

The State of Massachusetts
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of
Massachusetts 7 While supporters offer a lot of tough talk., few proponents spell
out the details of how they would achieve this laudable goal. The Director of the
CBO, Robert Reischauer, has indicated .. and this administration agrees .- that any
discussion of a balanced budget amendment must be in the context of an honest
discussion about the program cuts and tax increases necessary to achieve such a
balance. According to Reischauer, -it would be a particular folly to pass a balanced
budget amendment and ignore the need to expeditiously enact legislation that
would offer some hope of complying with it. - Make no mistak.e, balancing the
budget would require tough choices and cost Massachusetts billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Massachusetts.

The Balanced Budget Amendment
would cost Massachusetts
$5.3 to $5.7 billion a year
Option 1: Tax increase and across-the-board spending cut 7

Increases in taxes -- $2.6 billion a year ($852 per taxpayer)
Cuts in Benefits, Services, and Defense -- $3.0 billion a year
•
•
•
•
•

$609
$589
$352
$829

cut per year for the average Social Security recipient
less for each person enrolled in Medicare
less for each Medicaid recipient
million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$531 million additional cut in annual defense spending

Option 2: Across-the-board spending cut

Cuts in Benefits, Services. and Defense -- $ 5.5 billion a year
•
•

•
•
•

$1,107 cut per year for the average Social Security recipient
$1.071 less for each person enrolled in Medicare
$639 less for each Medicaid recipient
$1.5 billion in reduced funding for fighting crime. building highways
and bridges. protecting the environment, providing education, and
other federalty funded programs
$966 million additional cut in annual defense spending

: T•• Inc'•••• eOft'C)n••• 45411t 0' netIOftaI eN'OCI' ,eOucbOft oeek.ge Ipercantaoe vanes by IUlte), eQulI1 to tne
.".,aoa ra".,.,. eOfTlC)OMn, 0' the In, ''''0 d."':I' ,""'.:lIon peck_ge_ SP.ndlOO cut •• re propo"Ionlil across programs.
fIIo.. 84Jdget numbers bnecl on cao p'oteetlOftS fo' FY 2000. A"oc.lIon. ba.ed on 1992 date. The potential
con"acllo-;;;;; .mpee. of , •• Inc'..... andlo' eoendo"9 cut ••• no' Included.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $ 5.3 billion a year
•
•
•
•

$1,307 cut per year for the average Social Security recipient
$1,264 less for each person enrolled in Medicare
$755 less for each Medicaid recipient
$1.8 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services -- $5.7 billion a year
•

$ 1,444 less for each person enrolled in Medicare

•
•

$862 less for each Medicaid recipient
$2.0 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$ 1.3 billion additional cut in annual defense spending

•

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $ 5.5 billion a year
•

$ , ,81 9 less for each person enrolled in Medicare

•
•

$' ,086 less for each Medicaid recipient
$2.6 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

The State of Michigan
and the
Balanced Budget Amendment

J

\
!

What does a Balanced Budget Amendment mean to the State of Michigan?
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CSO, Robert
Reischauer, has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditIously enact legislation that would offer
some hope of complying with it. - Make no mistake, balancing the budget would
reQuire tough choices and cost Michigan billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Michigan.

The Balanced Budget Amendment
would cost Michigan
$5.4 to $6.8 billion a year
Option 1: Tax increase and across-the-board spending cut t

Increases in taxes -- $3.2 billion a year ($ 716 per taxpayer)
Cuts in Benefits, Services, and Defense -- $3.4 billion a year
•
•
•
•

•

$639 cut per year for the average Social Security recipient
$ 561 less for each person enrolled in Medicare
$232 less for each Medicaid recipient
$830 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$'92 million additional cut in annual defense spending

Option 2: Across-the-board spending cut
Cuts in Benefits, Services" and Defense -- $6.1 billion a year
•

•
•

•

$1,162 cut per year tor the average Social Security recipient
$' ,021 less for each person enrolled in Medicare
$421 less for each Medicaid recipient
$ 1.5 billion in reduced fundmg for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$349 million additional cut in annual defense spending

:T •• 'ncr •••• campn•••• 5~ of

aw,ag_

rwttOnel

d.foo' redYctton peek.ge (percentage vanes bV .tatel, eQual to t~e

,._nu. component of tN 1••, .wo d.f.c.' reductIO" pecllage.

SpendIng cut ••re proportIonal aero"" programs.

Not. BudQlt numb... ~ed on CBO protK'""" tor FY 2000. Allocations bas.d on 1992 data. The potentflll
conuactto-;;;':; ""Peet of tax ,nc ...... andlor aoendong cut. " not ,ncluded.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $ 6.8 billion a year
•
•
•
•

$1,372 cut per year for the average Social Security recipient
$1,205 less for each person enrolled in Medicare
$497 less for each Medicaid recipient
$1.8 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services -- $ 5.4 billion a year
•
•

•

•

$1,376 less for each person enrolled in Medicare
$ 568 less for each Medicaid recipient
$2.0 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$471 million additional cut in annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $6.2 billion a year
•
•

$ 1,734 less for each person enrolled in Medicare
$ 71 6 less for each Medicaid recipient

•

$2.6 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

The &J.nced Budget Amendment and Michlg'"

The State of Minnesota
and the
Balanced Budget Amendment

I

\
~,
!

What does a Balanced Budget Amendment mean to the State of Minnesota?
While supporters offer a lot of tough talk. few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CSO. Robert
Reischauer. has indicated •. and this administration agrees .- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it.· Make no mistake, balancing the budget would
reQuire tough choices and cost Minnesota billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Minnesota.

The Balanced Budget Amendment
would cost Minnesota
$2.7 to $3.1 billion a year
Option 1: Tax increase and across-the-board spending cut T
Increases in taxes -- $1.6 billion a year ($711 per taxpayer)
Cuts in Benefits, Services, and Defense -- $'.6 billion a year
•

$590 cut per year for the average Social Security recipient

•
•
•

$397 less for each person enrolled in Medicare
$ 31 2 less for each Medicaid recipient
$ 505 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education, and other federally funded programs
$137 million additional cut in annual defense spending

•

Option 2: Across-the-board spending cut

Cuts in Benefits. Services. and Defense -- $2.9 billion a year

•

$' ,073 cut per year for the average Social Security recipient

•

$722 less for each person enrolled in Medicare
$ 567 less for each Medicaid reCIpient
$919 million In reduced fundeng for fighting crime, building
highways and bridges, protecting the environment, providing
education. and other federally funded programs
$249 million additional cut In annual defense spending

•

•

•

·1 •••ftC, .... COf'1D"_

.~~

_ ' ' ' - ,._""". cOf'I"OO_'" ot ..w ... '

.' Me..- "'00'

..-..,cloeft

iMC&ege (percentege ",ene. by .tete). equel to the
Spenc,."o cut. er. proponlonel eero .. programs.

'.0 "'-' ..o..c_ "--va-

'.f

"'ote Buclget ,.,..,.,.,. t»eeed _ CaD or...c ....
F'Y 2000. Alloe.t.on. ba.ad on 1992 d.ta. lhe po,.nual
CO""Kt••;
If'IIOKt of t •• ,ftC._ ............., . CUI.'. ".., ,ftClud.G.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $3.1 billion a year
•
•
•
•

$1 ,266 cut per year for the average Social Security recipient
$853 less for each person enrolled in Medicare
$670 less for each Medicaid recipient
$1.1 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $ 2. 7 billion a year
•
•
•

•

$974 less for each person enrolled in Medicare
$765 less for each Medicaid recipient
$1.2 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$335 million additional cut In annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $3.0 billion a year
•
•
•

$' .227 less for each person enrolled in Medicare
$963 less for each Medicaid recIpient
$' .6 billion In reduced funding for fighting crime, building highways
and bridges, protecting the enVironment, providing education, and
other federally funded programs

T,.. BMenced Budget Amendmetlt .,.d M",,,'JO"

The State of Mississippi
and the
Balanced Budget Amendment

/

/

\,
I

What does a Balanced Budget Amendment mean to the State of Mississippi?
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CSO, Robert
Reischauer, has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it. - Make no mistake, balancing the budget would
require tough choices and cost Mississippi billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Mississippi.

The Balanced Budget Amendment
would cost Mississippi
$1.7 to $2.3 billion a year
Option 1: Tax increase and across-the-board spending cut'
Increases in taxes -- $503 million a year ($451 per taxpayer)
Cuts in Benefits, Services, and Defense -- $1.2 billion a year
•

$507 cut per year for the average Social Security recipient

•
•
•

$406 less for each person enrolled in Medicare
$212 less for each Medicaid recipient
$346 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education. and other federally funded programs
$277 million additional cut in annual defense spending

•

Option 2: Across-the·board spending cut

Cuts in Benefits. Services. and Defense -- $2.2 billion a year
•

$922 cut per year for the average Social Security recipient
$ 738 less for each person enrolled in Medicare
$ 386 less for each Medicaid recipient
$628 million In reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education, and other federaUy funded programs
$503 million additional cut In annual defense spending

•
•

•

•

"1 •• 1ftC'. . . . CO".,.,.. . . . s~.t _
..t.c-t.-..c_ pee...oe (pe,c.ntage v.n •• bv .Ialel. aQua/lo Ihe
-'eva •• _ _ compo_,n . ' __ '-0' t . . . . . .0' .-..c_ peeaevae SO-tidIng cull are propon,ono/ aero •• programe.

!!!!!!

.a. _,._ ..... _•••

8udO'it ~ ... I»eMd

COftUKt_r>t ompKl 0'

Oft

CaD ... . c _
"0 CUll

'0' N
"

2000

AUocat,one ba.ed on 1992 date. The pOlen"al

"CII rncIUOad.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $ 2.0 billion a year
•
•
•
•

$1,088 cut per year for the average Social Security recipient
$871 less for each person enrolled in Medicare
$456 less for each Medicaid recipient
$742 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services -- $2.3 billion a year
•
•

•

•

$995 less for each person enrolled in Medicare
$ 520 less for each Medicaid recipient
$847 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$678 million additional cut In annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $2.1 billion a year
•
•
•

$1,253 less for each person enrolled in Medicare
$655 less for each Medicaid recipient
$1.1 billion in reduced funding for fighting crime, building highways
and bridges, protecting the envIronment, providing education, and
other federally funded programs

The State of Missouri
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of Missouri?
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CBO, Robert
Reischauer. has indicated •. and this adminIstration agrees .. that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditIously enact legislation that would offer
some hope of complying with it.· Make no mistake, balancing the budget would
require tough choices and cost Missouri billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Missouri.

The Balanced Budget Amendment
would cost Missouri
$4.0 to $4.4 billion a year
Option 1: Tax increase and across-the-board spending cut 7

Increases in taxes -- $'.6 billion a year ($651 per taxpayer)
Cuts in Benefits, Services, and Defense -- $2.4 billion a year
•

$ 588 cut per year for the average Social Security recipient

•
•
•

$472 less for each person enrolled in Medicare
$304 less for each Medicaid recipient
$688 million in reduced funding for fighting crime, building

•

highways and bridges, protecting the environment, providing
education, and other federally funded programs
$405 million additional cut in annual defense spending

Option 2: Across-the-board spending cut

Cuts in Benefits, Services, and Defense -- $4.4 billion a year
•
•
•
•

S1,068 cut per year for the average Social Security recipient
S858 less for each person enrolled in Medicare
$552 less for each Medicaid recipient
$1.3 billion," reduced funding for fighting crime, building highways

•

and bridges. protecting the environment. providing education, and
other federally funded programs
$ 736 million additional cut In annual defense spending

°T •• ....:,._ c-.. ... _
_ ' .... , .... _
~

.s....t

c~"t of , . . . . . .

_____ . .toot..-..c_

8YcIoot ...,..."... ....., Oft cao .._ _

C_"ocIIO~ ~I

pecllev- Ip.rcenl.ge "'ene. bv 1181el. eQuellO the
SpendIng cute efe propon,onel .CIO•• progreme.

'.0 "'001 •.owe_ DOCII.ge_

to' ~ 2000 "lIocebonl b •••d on 1992 d.t •. The pOlentiel
ot 'e• ....:r_.......' ......"8 cvte .. flGt IncJuaod

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $4.3 billion a year
•
•
•
•

$1,261 cut per year for the average Social Security recipient
$1,012 less for each person enrolled in Medicare
$652 less for each Medicaid recipient
$1.5 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $4.3 billion a year
•

$1 , 156 less for each person enrolled in Medicare

•

$ 744 less for each Medicaid recipient

•

$1.7 billion in reduced funding for fighting crime, building highways

•

and bridges, protecting the environment, providing education, and
other federally funded programs
$992 million additional cut in annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services - $4.2 billion a year
•

$1.456 less for each person enrolled in Medicare

•

$937 less for each Medicaid recipient
$2.1 billion In reduced funding for fighting crime. building highways
and bridges. protectmg the environment, providing education, and
other federally funded programs

•

The State of Montana
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of Montana?
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CBO, Robert
Reischauer, has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it.· Make no mistake, balancing the budget would
require tough choices and cost Montana billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Montana.

The Balanced Budget Amendment
would cost Montana
$ 586 to $829 million a year
Option 1: Tax increase and across-the-board spending cut 1
Increases in taxes -- $204 million a year ($515 per taxpayer)
Cuts in Benefits, Services, and Defense -- $382 million a year
•

$ 569 cut per year for the average Social Security recipient

•
•
•

$383 less for each person enrolled in Medicare
$406 less for each Medicaid recipient
$' 80 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education, and other federally funded programs
$1 7 million additional cut 10 annual defense spending

•

Option 2: Across-the-board spending cut

Cuts in Benefits, Services, and Defense -- $ 695 million a year

•
•
•

•

•

s, .035 cut per year for the average

Social Security recipient
$697 less for each person enrolled in Medicare
$ 739 less for each Medicaid recipient
$328 million In reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education. and other federally funded programs
S 32 million additional cut en annual defense spending

°l •• one,....

_'eo-

f . . . ., . , .

c~. 4~"'.'

ComDOfte"'

of .........

"."1.

_____ . . hot ,-.,eMf' Oeck.ge _pe,c.n'eoe v.n •• by
eQuel to the
, - . , e _ . .~eoe' Soenes.ng cute
proponlonel eero•• progrems.

I ••

"foci'

a,.

"'ote BYdo-' numDot~ DeMCII ... cao .....cMfta 10' N 2000. Allocallon. be.ed on 1992 dete. The potent ..1
com.ecbOfWry '"'D8Ct 01 , •• _ _ ...,,.. ......."9 cu,. " no. IftCluOed.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $ 783 million a year
•
•
•
•

$' ,222 cut per year for the average Social Security recipient
$822 less for each person enrolled in Medicare
$872 less for each Medicaid recipient
$387 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $ 70 1 million a year
•
•
•

•

$939 less for each person enrolled in Medicare
$996 less for each Medicaid recipient
$442 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$43 million additional cut In annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services - $829 million a year
•

$ , , 183 less for each person enrolled in Medicare

•
•

$' ,255 less for each Medicaid recipient
$557 million In reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

The State of Nebraska
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of Nebraska?
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CBO. Robert
Reischauer, has indicated _. and this administration agrees .- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it. - Make no mistake, balancing the budget would
require tough choices and cost Nebraska billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Nebraska.

The Balanced Budget Amendment
would cost Nebraska
$1 . 1 to $1.2 billion a year
Option 1: Tax increase and across-the-board spending cut'

Increases in taxes -- $482 million a year ($601 per taxpayer)
Cuts in Benefits, Services, and Defense -- $640 million a year
$ 588 cut per year for the average Social Security recipient
$423 less for each person enrolled in Medicare
$247 less for each Medicaid recipient
$213 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education. and other federally funded programs
$67 million additional cut in annual defense spending

•
•
•
•

o

Option 2: Across-the-board spending cut

Cuts in Benefits. Services. and Defense -- $1.2 billion a year
$ , ,069 cut per year for the average Social Security recipient
$ 769 less for each person enrolled in Medicare

o

•

$450 less for each Medicaid recipient
$388 million In reduced fundIng for fighting crime, building
highways and bridges, protecting the environment, providing
education. and other federally funded programs
$123 million additional cut In annual defense spending

o

o

o

t.

·l •• lftC,o_. co" ... _ •• \~ 0' - . . .....t ..-.c_ INICkege lPerc.ntege ven •• bv "at. I. oQU.' to the
comoo..'" of ...... '
too ••--..c_
Soend'ne cut •• p,oponlonel .ero.. program,.

'.0 ..

....'eoe .. __
!!!!!

Budge'

numDOf1I ....., _

COftt,oe .. o . .,., Im08CI 0' I •• 1ftC'. . . . . . . . . . _

CIO

"kOQe'

.,-c__ '0' N

2000

Alloe.tlon. b...d on 1992 det •.

. . . . . .' " evt. " _. IftCklded.

Tn. poten".'

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $'.2 billion a year
•
•
•
•

$1,262 cut per year for the average Social Security recipient
$908 less for each person enrolled in Medicare
$531 less for each Medicaid recipient
$458 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services •
•
•

•

$'. 1 billion a year

$1.037 less for each person enrolled in Medicare
$606 less for each Medicaid recipient
$523 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education, and other federally funded programs
$ , 65 million additional cut In annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services - $'.2 billion a year
•
•

•

$1,306 less for each person enrolled in Medicare
$ 764 less for each Medicaid recipient
$659 million In reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education, and other federally funded programs

The State of Nevada
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of Nevada?
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the cao, Robert
Reischauer, has indicated •• and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it.· Make no mistake, balancing the budget would
require tough choices and cost Nevada billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Nevada.

The Balanced Budget Amendment
would cost Nevada
$897 million to $1.1 billion a year
Option 1: Tax increase and across-the-board spending cut'
Increases in taxes -- $ 573 million a year ($828 per taxpayer)
Cuts in Benefits, Services, and Defense -- $ 500 million a year
•
•
•
•

$604
$362
$296
$223

cut per year for the average Social Security recipient
less for each person enrolled in Medicare
less for each Medicaid recipient
million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education, and other federally funded programs
$46 million addItional cut in annual defense spending

•

Option 2: Across-the-board spending cut

Cuts in Benefits, Services. and Defense -- $ 910 million a year

· $' ,099 cut per vear for the average Social Security recipient
•

$659 less for each person enrolled in Medicare
$538 less for each Medicaid recipient
$405 million en reduced fundmg for fighting crime, building
hIghways and bridges. protecteng the environment, providing
education. and other federally funded programs
$85 million additIonal cut In annual defense spending

•
•

•

. T•• tftC ..... como..... 4S," .'
C:OfrtDOI'enl 0' ... lee'

!!!!!

~

....0'

.-..c_

oeclL.ge (perc.ntage van •• bv a,a'el. aQual 10 the
Spending CUI. ara proportional aero .. proor.mi.

'_0 "'OCI' '.owe........ ~.

.-'-0- ,...._

CIO .._ ...... or N 2000. AlioCObona baaed on 1992 da' •. The potanl•• 1
tftCr_a • ..,.,..' eoa .''9 cut ... not ,ncluded.

Budoel..."...,."", _

con"Ktao--.rv ompecl 0'

t ••

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $974 million a year
$ , ,297 cut per year for the average Social Security recipient
$778 less for each person enrolled in Medicare
$636 less for each Medicaid recipient
$479 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

•
•
•
•

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $897 million a year
•
•
•

•

$888 less for each person enrolled in Medicare
$ 726 less for each Medicaid recipient
$ 547 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education. and other. federally funded programs
$ 1 14 million additional cut In annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $ 986 million a year
•
•

•

$1 •119 less for each person enrolled in Medicare
$ 9 14 less for each Medicaid recipient
$689 million In reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

The State of New Hampshire
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of New
Hampshire 7 While supporters offer a lot of tough talk, few proponents spell out
the details of how they would achIeve this laudable goal. The Director of the CBO,
Robert Reischauer, has indicated -- and this administration agrees -- that any
discussion of a balanced budget amendment must be in the context of an honest
discussion about the program cuts and tax increases necessary to achieve such a
balance. According to Reischauer, -it would be a particular folly to pass a balanced
budget amendment and ignore the need to expeditiously enact legislation that
would offer some hope of complying with it.· Make no mistake, balancing the
budget would require tough choIces and cost New Hampshire billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of New Hampshire.

The Balanced Budget Amendment
would cost New Hampshire
$683 to $845 million a year
Option 1: Tax increase and across-the-board spending cut 7
Increases in taxes -- $446 million a year ($774 per taxpayer)
Cuts in Benefits, Services, and Defense -- $399 million a year
•
$603 cut per year for the average Social Security recipient
•
$403 less for each person enrolled in Medicare
•
•

$919 less for each Medicaid recipient
$78 million in reduced funding for fighting crime, building highways
and bridges. protecting the environment, providing education, and
other federally funded programs
$42 million additional cut in annual defense spending

•

Option 2: Across-the-board spending cut

Cuts in Benefits, Services. and Defense -- $ 725 million a year
S, .097 cut per ye. r for the average Social Security recipient
$ 734 less for each person enrolled in Medicare
$ , ,671 less for each Medicaid recipient
$ , 42 million In reduced funding for fighting crime, building
highways and bridges. protectmg the environment, providing
education. and other federally funded programs
$ 76 million additional cut In annual defense spending

•
•
•
•

•

,-..c_ DeCIl.ge (percenl.ge ".n•• bv Italel. eQuel to I"'e

• •!t'-.' ____ ..hoI
CClft'l)O-'" of ...... , , . . . .hell r-..c_

'l •• _ ,.... c . . ._
_,oge

'O_ftYe

!!!!!

lucIo-'

COftlfoetlOM"t....-c1

~

of '0.

..... _

1f'IC' _ _ ...... _

"'-808.

SO-nc!.ng CuI. er. propon.onel

ceo ..____ •• - r:v 2000.
..

.CIO••

progrem5.

Allocetlon. be.ed on 1992 dale. The potenlllil
-"V ev.... not Included.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services •• $767 million a year
$ 1,295 cut per year for the average Social Security recipient
$866 less for each person enrolled in Medicare
$ 1,972 less for each Medicaid recipient
$'68 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

•
•
•
•

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $ 683 million a year
•
•
•

•

$989 less for each person enrolled in Medicare
$2.253 less for each Medicaid recipient
$ '91 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education. and other federally funded programs
S 103 million additional cut In annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Serv;ces •• $ 731 million a year
•
•
•

$1,246 less for each person enrolled in Medicare
$2,838 less for each Medicaid recipie.nt
$241 million In reduced fundeng for fighting crime, building
highways and bridges. protecteng the environment, providing
education. and other federally funded programs

The State of New Jersey

and the
Balanced Budget Amendment

/

~
What does a Balanced Budget Amendment mean to the State of New
Jersey? While supporters offer a lot of tough talk, few proponents spell out the
details of how they would ach,eve this laudable goal. The Director of the CaD,
Robert Reischauer, has indicated -- and this administration agrees -- that any
discussion of a balanced budget amendment must be in the context of an honest
discussion about the program cuts and tax increases necessary to achieve such a
balance. According to Reischauer. -it would be a particular folly to pass a balanced
budget amendment and ignore the need to expeditiously enact legislation that
would offer some hope of complying with it.· Make no mistake, balancing the
budget would require tough choices and cost New Jersey billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of New Jersey.

The Balanced Budget Amendment
would cost New Jersey
$5.4 to $7.1 billion a year
Option 1: Tax increase and across-the-board spending cut'
Increases in taxes -- $3.9 billion a year ($952 per taxpayer)
Cuts in Benefits, Services, and Defense -- $3.2 billion a year
•
-

$665 cut per year for the average Social Security recipient
$552 less for each person enrolled in Medicare
$351 less for each Medicaid recipient
$ 782 million in reduced funding for fighting crime, building
highways and bndges. protecting the environment, providing
education, and other federally funded programs
$375 million additional cut in annual defense spending

•

-

Option 2: Across-the-board spending cut

Cuts in Benefits, Services. and Defense -- $ 5.8 billion a year
•

$1.209 cut per Vea r for the average Social Security recipient
$' .003 less for each person enrolled in Medicare
$639 less for each Medicaid recipient
$' .4 billion In reduced funding for fighting crime, building highways
and bradges. protectmg the environment, providing education, and
other federally funded programs
$682 million additional cut In annual defense spending

•

•
•

•

"'1C'rI

.eowc_
---v-.

°l •• tnCr •••• como-. . . S~.' _ _
, . . . .loco••-.,c ....

--'eve ,.__ c~n' _t ,,. ...,
"'21.

~.ge

lpe,c.nt.ge vene. bv "e'el. eau.' to the
cut. ere proponlon.' .ero •• progrem,.

s.~nOlng

8udoel numoe......... _ caD .-_ _ 10' N 2000 Alloc ... on. b... d on 1992 det.. The poten"e'
0' , •• tnC._ ..... _ . . . . ."0 CVtl .. "CIt tftCtyded

COftt'ectionery ImD8Ct

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $6.1 billion a year
•
•

•
•

$' ,427 cut per year for the average Social Security recipient
$ , , , 84 less for each person enrolled in Medicare
$754 less for each Medicaid recipient
$1,7 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $5.4 billion a year
•
•
•

•

$1 ,352 less for each person enrolled in Medicare
$861 less for each Medicaid recipient
$1.9 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$920 million additional cut an annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services - $ 5.7 billion a year
•

$ , ,703 less for each person enrolled in Medicare

•
•

$1 ,085 less for each Medicaid recipient
$2.4 billion an reduced funding for fighting crime, building highways
and bridges. protectang the environment, providing education, and
other federally funded programs

The State of New Mexico
and the
Balanced Budget Amendment

,
I

U
What does a Balanced Budget Amendment mean to the State of New
Mexico? While supporters offer a lot of tough talk, few proponents spell out the
details of how they would achieve this laudable goal. The Director of the CBO,
Robert Reischauer, has indicated .. and this administration agrees -- that any
discussion of a balanced budget amendment must be in the context of an honest
discussion about the program cuts and tax increases necessary to achieve such a
balance. According to Reischauer, -it would be a particular folly to pass a balanced
budget amendment and ignore the need to expeditiously enact legislation that
would offer some hope of complying with it.· Make no mistake, balancing the
budget would require tough chOices and cost New Mexico billions.
In order to encourage a more realistic. responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractlonary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of New Mexico.

The Balanced Budget Amendment
would cost New Mexico
$1.3 to $2.1 billion a year
Option 1: Tax increase and across-the-board spending cut T

Increases in taxes -- $379 million a year ($517 per taxpayer)
Cuts in Benefits, Services, and Defense -- $953 million a year
•

$540 cut per year for the average Social Security recipient
$366 less for each person enrolled in Medicare
$225 less for each Medicaid recipient
$539 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education, and other federally funded programs
$120 million additional cut In annual defense spending

•
•

•
•

Option 2: Across-the-board spending cut

Cuts in Benefits. Services. and Defense -.. $1.7 billion a year
•

$982 cut per year for the average Social Security recipient
$666 less for each person enrolled in Medicare
$409 less for each Medicaid recipient
$98' milhon '" reduced fundIng for fighting crime, building
highways and bridges. protecting the environment, providing
education. and other federally funded programs
$ 219 million additional cut In annual defense spending

•
•
•

•

s....' _

·t •• _ '.... c ... , ........
....'-0- , . _ c~'" ot ...... '

!::!2!!

I . . . .toC"

luclgo' nwmbe" ......, _

COftUKtlOnory ""OK' of •••• ftC . . . . . . . . . . _

..toc.••.owe..... pee••v- IDercent.g. vene. by "elel. eauel to the
,.owe_ CMC&~' Spend."O cut •• r. "ropO"loool ecro•• programs.

CIO ..-..c- tor N 2000

Allocatlona ba.ed on 1992 date. The potentlsl

. . . . ."0 CUll .. _1 IlICludoCl.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $1.8 billion a year
•
•
•
•

$1,159 cut per year for the average Social Security recipient
$786 less for each person enrolled in Medicare
$482 less for each Medicaid recipient
$1.2 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $2.0 billion a year
•
•
•

•

$897 less for each person enrolled in Medicare
$551 less for each Medicaid recipient
$'.3 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$ 295 million additional cut In annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services - $ 2. 1 billion a year
•
•
•

$1 , 130 less for each person enrolled in Medicare
$694 less for each Medicaid recipient
$1.7 billion in reduced fundmg for fighting crime, building highways
and bridges, protectmg the environment, providing education, and
other federally funded programs

The State of New York
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of New York?
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CaD, Robert
Reischauer, has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with It. - Make no mistake, balancing the budget would
require tough choices and cost New York billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of New York.

The Balanced Budget Amendment
would cost New York
$13.9 to $15.8 billion a year
Option 1: Tax increase and across-the-board spending cutt

Increases in taxes -- $ 7.7 billion a year ($877 per taxpayer)
Cuts in Benefits, Services, and Defense -- $ 7.8 billion a year
•

$642 cut per year for the average Social Security recipient
$577 less for each person enrolled in Medicare
$430 less for each Medicaid recipient
$'.8 billion in reduced funding for fighting crime, building highways
and bridges. protecting the environment, providing education, and
other federally funded programs
$564 million additional cut in annual defense spending

•
•

•
•

Option 2: Across-the-board spending cat

Cuts in Benefits. Services. and Defense -- $14.2 billion a year
•
•

$' . , 68 cut per ye.' for the average Social Security recipient
$1.049 less for each person enrolled in Medicare

•

$ 782 less for each Medicaid recipient

•

$3.4 billion In reduced funding for fighting crime, building highways

•

and bridges. protecting the enVironment, providing education. and
other federally funded programs
$ , .0 billion additional cut tn annual defense spending

·l ••

'-'-0-

tftC'. . . .

con ........ s~.t

r._~ c~ne"l

"0'.

0' 1"- ... ,

_____ ..hew • ..ouc ..... DKIL~ (perc.ntage vene. bv Itatel. eque' to the

'.o"hCot ..ouc....- __ .. ~.

Spend'''G cut. are propon.onal aero •• programa

Budge' ~....., ... cao ~_ to' N 2000 "'Iocetlo". b ••ed on 1992 da'a. Tne pOlentoel
cOtt,r.cno'";;;; .moecl 0' I•• 1ftC,_" ....... NIle ."'0 cu, ... not .ncluded.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $15.6 billion a year
•

$' ,379 cut per year for the average Social Security recipient
,238 less for each person enrolled in Medicare
$923 less for each Medicaid recipient
$4.0 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

· $'
•

•

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $13.9 billion a year
•
•

$ 1,414 less for each person enrolled in Medicare
$ 1,054 less for each Medicaid recipient

•

$4.5 billion in reduced funding for fighting crime, building highways

•

and bridges, protecting the environment, providing education, and
other federally funded programs
$ 1 .4 billion additional cut In annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $15.8 billion a year
•
•

•

$ 1.781 less for each person enrolled in Medicare
$ 1,328 less for each Medicaid recipient
$5.7 billion .n reduced funding for fighting crime, building highways
and bridges. protecting the environment, providing education, and
other federally funded programs

The State of North Carolina
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of North
Carolina 7 While supporters offer a lot of tough talk, few proponents spell out the
details of how they would achieve this laudable goal. The Director of the CBO,
Robert Reischauer, has indicated .. and this administration agrees -- that any
discussion of a balanced budget amendment must be in the context of an honest
discussion about the program cuts and tax increases necessary to achieve such a
balance. According to Reischauer, -it would be a particular folly to pass a balanced
budget amendment and ignore the need to expeditiously enact legislation that
would offer some hope of complying with it.· Make no mistake, balancing the
budget would require tough chOices and cost North Carolina billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of North Carolina.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $15.6 billion a year
•
•
•

•

$1,379 cut per year for the average Social Security recipient
$1,238 less for each person enrolled in Medicare
$923 less for each Medicaid recipient
$4.0 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $13.9 billion a year
•
•

$ 1.414 less for each person enrolled in Medicare
$ 1 ,054 less for each Medicaid recipient

•

$4.5 billion in reduced funding for fighting crime, building highways

•

and bridges, protectmg the environment, providing education, and
other federally funded programs
$ 1 .4 billion additional cut In annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services - $15.8 billion a year
•
•

$ 1,781 less for each person enrolled in Medicare
$ 1,328 less for each Medlclld recipient

•

$5.7 bilhon In reduced funding for fighting crime, building highways
and bridges. protecting the environment, providing education, and
other federally funded programs

The State of North Carolina
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of North
Carolina? While supporters offer a lot of tough talk, few proponents spell out the
details of how they would achieve this laudable goal. The Director of the ceo,
Robert Reischauer, has indicated -- and this administration agrees -- that any
discussion of a balanced budget amendment must be in the context of an honest
discussion about the program cuts and tax increases necessary to achieve such a
balance. According to Reischauer, Wit would be a particular folly to pass a balanced
budget amendment and ignore the need to expeditiously enact legislation that
would offer some hope of complying with it.· Make no mistake, balancing the
budget would require tough chOices and cost North Carolina billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of North Carolina.

The Balanced Budget Amendment
would cost North Carolina
$3.9 to $4.3 billion a year
Option 1: Tax increase and across-the-board spending cut 7

Increases in taxes -- $1.9 billion a year ($581 per taxpayer)
Cuts in Benefits, Services, and Defense -- $ 2.4 billion a year
•

$555 cut per year for the average Social Security recipient

•

$331 less for each person enrolled in Medicare
$ 250 less for each Medicaid recipient
$631 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment. providing
education, and other federally funded programs
$387 million additional cut in annual defense spending

•

•

•

Option 2: Across-the-board spending cut

Cuts in Benefits, Services. and Defense -- $4.3 billion a year
•

$' .009 cut per year for the average Social Security recipient

•

$ 60 1

less for each person enrolled in Medicare
$455 less for each Medicaid recipient
$1.' billion an reduced funding for fighting crime, building highways
and bndges. protectang the environment, providing education, and
other federally funded programs
$ 704 million additional cut an annual defense spending

•
•

•

·1 ••

0ftC, . . . .

c ......... 45'.' _____

..... ave f . . . ....,. COfnI»Ofte"' . f , . . . . .'
!!2!.!

_. . . .,~

Budoe' numoe,."'" _

CO"trecl.onary ""Pee' ot •••

"'_~ .~- oac •• oe t,".c.nt_ge ..,an •• bV "ale/. .QUal 10 tne
..ouc . . . . .-ave. Spend,ng cut. ar. propon,onal aero•• programe.

CIO ......c_ to. N 2000

0ftC . . . . . . . . . . . . . . . . ."0

cute ,.

fIOt

tnCtydad

Allocatton. baaad on 1992 dete. Tne potantlal

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $4.3 billion a year
$ 1 ,191 cut per year for the average Social Security recipient
$ 71 0 less for each person enrolled in Medicare
$537 less for each Medicaid recipient
$ 1.4 billion in reduced funding for fighting crime, building highwa l
and bridges, protecting the environment, providing education, and
other federally funded programs

•
•
•
•

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $4.0 billion a year
•
•

$811 less for each person enrolled in Medicare
$613 less for each Medicaid recipient
$ 1.5 billion in reduced funding for fighting crime, building highwal
and bridges, protectmg the environment, providing education, and
other federally funded programs
$950 million additional cut in annual defense spending

•

•

Option 5: Across-the-board spending cut, excluding defense an
Social Security
,

Cuts in Benefits and Services - $3.9 billion a year
•
•

•

$1,022 less for each person enrolled in Medicare
$ 773 less for each Medicaid recipient
$'.9 billion In reduced fundang for fighting crime, building highwa
and bridges. protecting the environment, providing education, anc
other federally funded programs

The State of North Dakota
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of North
Dakota? While supporters offer a lot of tough talk, few proponents spell out the
details of how they would achIeve this laudable goal. The Director of the cao,
Robert Reischauer, has indicated .0 and this administration agrees -- that any
discussion of a balanced budget amendment must be in the context of an honest
discussion about the program cuts and tax increases necessary to achieve such a
balance. According to Reischauer, -it would be a particular folly to pass a balanced
budget amendment and ignore the need to expeditiously enact legislation that
would offer some hope of complying with it.· Make no mistake, balancing the
budget would require tough choices and cost North Dakota billions.
In order to encourage a more realistic. responsible debate. the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of North Dakota.

The Balanced Budget Amendment
would cost North Dakota
$494 to $655 million a year
Option 1: Tax increase and across-the-board spending cut '

Increases in taxes -- $173 million a year ($ 565 per taxpayer)
Cuts in Benefits, Services, and Defense -- $321 million a year
•
•
•
•

•

$ 547 cut per year for the average Social Security recipient
$487 less for each person enrolled in Medicare
$374 less for each Medicaid recipient
$'25 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education, and other federally funded programs
$36 million additional cut in annual defense spending

Option 2: Across-the-board spending cut

Cuts in Benefits, Services. and Defense -- $583 million a year
•
•
•
•

•

"1 ••
. . .reee , .... _

$995 cut per year for the average Social Security recipient
$885 less for each person enrolled in Medicare
$681 less for each Medicaid recipient
$228 million In reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
educatIon, and other federally funded programs
$66 millton additional cut In annual defense spending

.5 ..... f ~ . .fIer. ,eowc_ pec.lr..ge lpercent.ge v.ne. bV .tatel. .Qualto the
ot IfIe ... ' 1_0
...owe..., "-800. Spendlno cull er. proponlonel eero.. proo,.mG.

tftC,• • • • C~_

c~nen'

"fICo'

.e..,.

!!2!! Budoe l ftUf'IIOOnI""" - CIO .._ _ 'or f:'t 2000. Allocations b •••d on 1992 de'e. The poten"al
conuocbonery omDOCl 01 , •• tnC'. . . . . . . . . _
N'. I. not Incl~ed

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $ 610 million a year
•

$ , , 174 cut per year for the average Social Security recipient

•
•
•

$' ,045 less for each person enrolled in Medicare
$804 less for each Medicaid recipient
$269 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $ 609 million a year
•
•
•

•

$1, 193 less for each person enrolled in Medicare
$918 less for each Medicaid recipient
$307 million in reduced funding for fighting crime, building
highways and bradges, protecting the environment, providing
education, and other federally funded programs
$89 million additional cut en annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services - $655 million a year
•
•

•

$' ,503 less for each person enrolled in Medicare
$ , , 156 less for each Medicaid recipient
$387 million en reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

The State of Ohio
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of Ohio?
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the ceo, Robert
Reischauer, has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, "it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it." Make no mistake, balancing the budget would
require tough choices and cost Ohio billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Ohio.

The Balanced Budget Amendment
would cost Ohio
$6.7 to $7.9 billion a year
Option 7: Tax increase and across-the-board spending cut'

Increases in taxes -- $3.6 billion a year ($643 per taxpayer)
Cuts in Benefits, Services, and Defense -- $4. 1 billion a year
•
•
•

$613 cut per year for the average Social Security recipient
$463 less for each person enrolled in Medicare
$239 less for each Medicaid recipient
$' .0 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$390 million additional cut in annual defense spending

•

•

Option 2: Across-the-board spending cut

Cuts in Benefits, Services. and Defense -- $7.4 billion a year
•

$ , • , 1 5 cut per year for the average Social Security recipient

•
•

$841 less for each person enrolled in Medicare
$434 less for each Med.cald recipient
$'.9 billion In reduced funding for fighting crime, building highways
and bridges. protecting the environment. providing education, and
other federally funded programs
$ 710 million additIonal cut In annual defense spending

•
•

°T ••

_,_a

'-'eva '.__
~o,.

COI"4O_

cOft"GO_nl

.5~

el ____ . .'-0' ,.owc,-" oectL.ge Cpe,cen'age ",.na. bv .,a'el. aQual to the
Spend.ng cut ••,e p,oponaonal acro .. prog,am,.

0' ......, -•• "'Ct' ,--..c_ ..-ega-

luclgel~" DeHG'"

COft"ectJonoe,... ""DeCt 01 'e' ....:' _ _ ..... -

C.O ...-eN" to, N 2000 Allocation. b •• ed on 1992 deta. The potent.el
......"'0 cu'_ .. _I .ncluded.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $ 7.9 billion a year
•
•
•
•

$1,317 cut per year for the average Social Security recipient
$993 less for each person enrolled in Medicare
$ 512 less for each Medicaid recipient
$2.2 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $ 6.7 billion a year
•
•

$ , , '34 less for each person enrolled in Medicare
$ 585 less for each Medicaid recipient

•

$2.5 billion in reduced funding for fighting crime, building highways

•

and bridges, protecting the environment, providing education, and
other federally funded programs
$957 million additional cut In annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services - $ 7.3 billion a year
•
•

$' ,429 less for each person enrolled in Medicare
$ 737 less for each Medicaid recipient

•

$3.2 billion In reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

Til. lMIem:.d Budg.t Am.ndm.", ."d OhIO

The State of Oklahoma
and the
Balanced Budget Amendment

•

•

What does a Balanced Budget Amendment mean to the State of Oklahoma?
While supporters offer a lot of tough talk. few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CBO. Robert
Reischauer. has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer. -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it. - Make no mistake, balancing the budget would
require tough choices and cost Oklahoma billions.
In order to encourage a more realistic. responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Oklahoma.

The Balanced Budget Amendment
would cost Oklahoma
$2.2 to $2.4 billion a year
Option 1: Tax increase and across-the-board spending cut'

Increases in taxes -- $833 million a year ($574 per taxpayer)
Cuts in Benefits, Services. and Defense -- $1.3 billion a year
$ 564 cut per year for the average Social Security recipient
$430 less for each person enrolled in Medicare
$255 less for each Medicaid recipient
$411 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education. and other federally funded programs
$' 92 million additional cut in annual defense spending

•
•

•
•

•

Option 2: Across-the-board spending cut

Cuts in Benefits, Services. and Defense -- $ 2.4 billion a year
51.026 cut per year for the average Social Security recipient
578' less for each person enrolled in Medicare
$463 less for each Medicaid recIpient
$ 74 7 million an reduced fund,"g for fighting crime, building
highways and bridges. protecting the environment, providing
education. and other federally funded programs
$ 348 million additional cut an annual defense spending

•

•
•
•

•

. , •• 1ftC'. . . . cDft'IP...... S~

.' _ _ "'OCO' .eo.-c ..... oec-.ge !De,e.nl.g_ venea bv al.lel. eQuel 10 Ihe
'oc,o' .-..c ..... INC"~. $penO'ng cuIa .re p,opon,on.' .e,o.. p,og,.ms.

. _.... t. _ _ CDft'lPOrteni 01 ,he .... 1_0 ••
~

&uogel ..,.,...,.•• bee.., _

tao .. _ ...... 10' N

2000

conl'ecl,Orte", .,.,.cl of I•• me' . . . . . .,.., ........... ftQ CUI ... _, 'N:luded

""OC.hon. b ...d on 1992 oet •. The potent,el

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $ 2.4 billion a year
•
•

$1,212 cut per year for the average Social Security recipient
$922 less for each person enrolled in Medicare

•

$ 546 less for each Medicaid recipient
$881 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

•

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services -- $2.4 billion a year
•

$1,053 less for each person enrolled in Medicare

•

$624 less for each Medicaid recipient
$1.0 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$469 million additional cut In annual defense spending

•
•

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $2.4 billion a year
•

$1.327 less for each person enrolled in Medicare

•

$ 786 less for each Medicaid recipient

•

$1.3 billion an reduced funding for fighting crime, building highways
and bridges. protecting the environment. providing education, and
other federally funded programs

The /aI.need Budge' Amendment end Olcl,homl

The State of Oregon
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of Oregon 7
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CSO, Robert
Reischauer, has indicated -- and thiS administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax Increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it.· Make no mistake, balancing the budget would
require tough choices and cost Oregon billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Oregon.

The Balanced Budget Amendment
would cost Oregon
$1.8 to $2.3 billion a year
Option 1: Tax increase and across-the-board spending cut'
Increases in taxes -- $913 million a year ($633 per taxpayer)
Cuts in Benefits, Services, and Defense -- $1. 1 billion a year
•
•

$603 cut per year for the average Social Security recipient
$405 less for each person enrolled in Medicare

•

$ 224 less for each Medicaid recipient

•

$409 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$31 million additional cut in annual defense spending

•

Option 2: Across-the-board spending cut

Cuts in Benefits, Services, and Defense -- $ 2.0 billion a year
•
•

$ 1,096 cut per yea' tor the average Social Security recipient
$ 737 less for each person enrolled in Medicare

•
•

$407 less for each MedIcaid recipient
$ 744 million 10 reduced fundmg for fighting crime, building

•

highways and bridges, protecting the environment, providing
education, and other federally funded programs
$ 5 7 million additional cut In annual def.ense spending

_

'1 •••ftC, . . . . c . . . . . . . . . S~.'
COItIIDO... ftl 0' ,"- ... , , . . . . hct •

....,eo- ,....'-1.
!:!!1!

,,'-,..ewc_ pec ••ge (perc.nt.ge ".n., bv It.tel. equ.' to the
..-..c_ pec.. ~. Spend.ng cut •• re proponlona' .cto•• program,.

8uoee',.,.....,........, - cao .._ _

Coft.,ec'tOnerv rmoect 0' , ••

to' r:v 2000

rftC'_ .......' .....fIG cvtl •• _ I .ncluded

Alloc.,.onl b ••ed on 1992 da'e. The pOlenl.el

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $ 2.3 billion a year
•
•
•
•

$1,294 cut per year for the average Social Security recipient
$870 less for each person enrolled in Medicare
$481 less for each Medicaid recipient
$879 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $1.8 billion a year
•
•

•

•

$993 less for each person enrolled in Medicare
$ 549 less for each Medicaid recipient
$1.0 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$ 76 million additional cut in annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services - $ 2.2 billion a year
•

$' .25' less for each person enrolled in Medicare

•
•

$692 less tor each Medicaid recipient
$'.3 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

The State of Pennsylvania
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of
Pennsylvania 1 While supporters offer a lot of tough talk, few proponents spell out
the details of how they would achieve this laudable goal. The Director of the CBO,
Robert Reischauer, has indicated -- and this administration agrees -- that any
discussion of a balanced budget amendment must be in the context of an honest
discussion about the program cuts and tax increases necessary to achieve such a
balance. According to Reischauer. -it would be a particular folly to pass a balanced
budget amendment and ignore the need to expeditiously enact legislation that
would offer some hope of complying with it.· Make no mistake, balancing the
budget would require tough choices and cost Pennsylvania billions.
In order to encourage a more realistic. responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Pennsylvania.

The Balanced Budget Amendment
would cost Pennsylvania
$8.7 to $10.3 billion a year
Option 1: Tax increase and across-the-board spending cut'

Increases in taxes -.. $4.2 billion a year ($ 707 per taxpayer)

Cuts in Benefits, Services, and Defense -- $5.2 billion a year
•
•
•
•

$625 cut per year for the average Social Security recipient
$546 less for each person enrolled in Medicare
$298 less for each Medicaid recipient
$1.3 billion in reduced funding for fighting crime, building highways
and bridges. protecting the environment, providing education, and
other federally funded programs
$421 million additional cut in annual defense spending

•

Option 2: Across-the-board spending cut
Cuts in Benefits. Services. and Defense -- $9.5 billion a year
•

$ 1.136 cut per yea' for the average Social Security recipient

•

$992 less for each person enrolled in Medicare

•

$ 541 less for each MedIcaId reCipient

•

$2.3 billion In reduced fundang for fighting crime, building highways
and bridges. protecting the environment, providing education, and
other federally funded programs
$ 765 million addItional cut In annual defense spending

•

._,~

t._ ..

---eve.

'0

. , •• oftC' . . . . c....,... . . ~--. .t _____ "'-Of ,-..c .... oec&age IDercentege vane. bv .'.'el. eQUel
the
r. _ _ CClO";oo-' 0' , ...... ,
foot ..-..c_
S~nd,ng cut. efe p,oportlonal acro•• progr.ms.

"'ot.

_t_ . . ._

8ua~t""""ftI

COfttrK";;:; 1mPOC' 0' •••

...., _

cao ..-..c ...... '01 FY

2000 AUocauon. be ..d on 1992 da' •. The potentlel
- - - " 0 cut ... not .ncklded.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $10.3 billion a year
•
•
•
•

$1,342 cut per year for the average Social Security recipient
$1 , 171 less for each person enrolled in Medicare
$639 less for each Medicaid recipient
$2.7 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $8.7 billion a year
•
•

$ , ,338 less for each person enrolled in Medicare
$ 729 less for each Medicaid recipient

•

$3.' billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$' .0 billion additional cut In annual defense spending

•

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services - $ 9.7 billion a year
•
•

•

$1,685 less for each person enrolled in Medicare
$ 9' 9 less for each Medicaid recipient
$3.9 billion In reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

The State of Rhode Island
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of Rhode
Island? While supporters offer a lot of tough talk, few proponents spell out the
details of how they would achieve this laudable goal. The Director of the CBO,
Robert Reischauer, has indicated -- and this administration agrees -- that any
discussion of a balanced budget amendment must be in the context of an honest
discussion about the program cuts and tax increases necessary to achieve such a
balance. According to Reischauer, -it would be a particular folly to pass a balanced
budget amendment and ignore the need to expeditiously enact legislation that
would offer some hope of complying with it.- Make no mistake, balancing the
budget would reQuire tough choices and cost Rhode Island billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractlonary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Rhode Island.

The Balanced Budget Amendment
would cost Rhode Island
$816 to $868 million a year
Option 1: Tax increase and across-the-board spending cut'
Increases in taxes -- $346 million a year ($701 per taxpayer)
Cuts in Benefits, Services. and Defense -- $469 million a year
•
•

$605 cut per year for the average Social Security recipient
$457 less for each person enrolled in Medicare
$ 220 less for each Medicaid recipient
$122 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education, and other federally funded programs
$65 million additional cut in annual defense spending

o
o

•

Option 2: Across-the-board spending cut

Cuts in Benefits. Services. and Defense -- $ 853 million a year
•

$ , .100 cut per year for the average Social Security recipient

o

$831 less for each person enrolled in Medicare
$401 less for each Medicaid recipient
$221 million In reduced fundtng for fighting crime, building
highways and bridges. protecting the environment, providing
education. and other federally funded programs
$1 1 8 million additional cut 10 annual defense spending

•
o

o

"'ogt

., •• "'Cr ___ cowen. . . . S~ .' _____
.-..c... pee.ev- toe,c:en,ege vene. bv eta'el. eQual to the
ow'-o- raw",,_ Comoofte'" of
t.cot ,-..c_ ... .,.. Spendang cu •• e •• p,opon,on81 oero •• prog,om •.

.fIIe ... ' ,._ ..

"',!e

6wctV-',..",..... ......, ... '10 ... _ _ 10' rt 2000 AMoco"on. b ••e<S on 1992 do.o. The pOlenllol
a "'C'_. - - _ ......."G cut ••e
OftCklded

co""ec~,.,.moect

0' ..

_I

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $868 million a year
•
•
•
•

$' ,299 cut per year for the average Social Security recipient
$ 98 1 less for each person enrolled in Medicare
$473 less for each Medicaid recipient
$261 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $831 million a year
•
•

•

•

$1,121 less for each person enrolled in Medicare
$ 540 less for each Medicaid recipient
$298 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education. and other federally funded programs
S 159 million additional cut in annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services - $ 846 million a year
•
•
•

$1.412 less for each person enrolled in Medicare
$680 less for· each Medicaid recipient
$375 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education. and other federally funded programs

The State of South Carolina
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of South
Carolina 7 While supporters offer a lot of tough talk, few proponents spell out the
details of how they would achieve this laudable goal. The Director of the CSO,
Robert Reischauer, has indicated .- and this administration agrees •• that any
discussion of a balanced budget amendment must be in the context of an honest
discussion about the program cuts and tax increases necessary to achieve such a
balance. According to Relschauer. -it would be a particular folly to pass a balanced
budget amendment and ignore the need to expeditiously enact legislation that
would offer some hope of complying with it.· Make no mistake, balancing the
budget would require tough choices and cost South Carolina billions.
In order to encourage a more realistic. responsible debate. the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractlonary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of South Carolina.

The Balanced Budget Amendment
would cost South Carolina
$2.4 to $2.7 billion a year
Option 1: Tax increase and across-the-board spending cut'

Increases in taxes -- $894 million a year ($529 per taxpayer)
Cuts in Benefits, Services, and Defense -- $1.5 billion a year
•

$554 cut per year for the average Social Security recipient
$ 3' 7 less for each person enrolled in Medicare

•

$305 less for each Medicaid recipient
$51 B million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education. and other federally funded programs
$227 million additional cut in annual defense spending

o
o

o

Option 2: Across-the-board spending cut

Cuts in Benefits. Services. and Defense -- $ 2.7 billion a year
$' .007 cut per year for the average Social Security recipient
$ 5 76 less for each person enrolled in Medicare
$555 less for each Medicaid recIpient
$942 million In reduced fundang for fighting crime, building
highways and bridges. protectang the environment. providing
education. and other federally funded programs
$41 3 million additional cut In annual defense spending

•
•
•
•

•

·l ••

IftC'."O COft"4O". . . . ~ .. 0' _ _ _ "100' ~_ NC"O~ tpe,con'.ge vono. by .'.'01. .Qu.1 to the
, . . . . .foCII • .ovc_ .-:a.~. Spending cut. a,a ",oponlol\8l oero .. p,ogroms

-'eee •• __ comooften, 0' , . . . . . ,
"'0'.
COftuecilonerv

Budoet~,. beood _
0I'IIp0C'

of I •••ftC . . . . . .

CIO ....c..... tD' f'Y 2000. Allocauon. bo.ed on 1992 de'a. The potenuel

...a,....... "9 cut ••• .."

.ndudoc:l.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $ 2. 7 billion a year
•
•
•
•

$1,188 cut per year for the average Social Security recipient
$680 less for each person enrolled in Medicare
$656 less for each Medicaid recipient
$1.1 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $ 2. 7 billion a year
•
•

•

•

$776 less for each person enrolled in Medicare
$ 749 less for each Medicaid recipient
$1.3 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$557 million additional cut In annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services - $2.7 billion a year
•
•
•

$978 less for each person enrolled in Medicare
$943 less for each Medicaid recipient
$1.6 billion In reduced fundmg for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

The State of South Dakota
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of South
Dakota? While supporters offer a lot of tough talk, few proponents spell out the
details of how they would achieve this laudable goal. The Director of the CSO,
Robert Reischauer, has indicated -- and this administration agrees -- that any
discussion of a balanced budget amendment must be in the context of an honest
discussion about the program cuts and tax increases necessary to achieve such a
balance. According to Reischauer, -it would be a particular folly to pass a balanced
budget amendment and ignore the need to expeditiously enact legislation that
would offer some hope of complving with it.· Make no mistake, balancing the
budget would require tough choices and cost South Dakota billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five pOSsible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of South Dakota.

The Balanced Budget Amendment
would cost South Dakota
$ 503 to $ 633 million a year
Option 1: Tax increase and across-the-board spending curT

Increases in taxes -- $193 million a year ($ 563 per taxpayer)
Cuts in Benefits, Services, and Defense -- $310 million a year
•
•
•
•

$539 cut per year for the average Social Security recipient
$388 less for each person enrolled in Medicare
$ 319 less for each Medicaid recipient
$126 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education. and other federally funded programs
$23 million additional cut in annual defense spending

•

Option 2: Across·the-board spending cut

Cuts in Benefits, Services. and Defense -- $ 564 million a year
•

$979 cut per year tor the average Social Security recipient
$ 706 less for each person enrolled in Medicare
$ 581 less for each Medicaid reCipient
$ 229 million In reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education. and other federally funded programs
$42 million addItIonal cut In a,nnual defense spending

•
•
•

•

._,.~

'l •• IftC'•••• c.",.,.,....••S"., _
r. _ _ comooneft' of tfte"" , • •

.. hoI ,-..c_ peCll.~ Ipereen'.ge ven •• by .,.t.l. .au.' to the

"'oCI' f-..c .... DeC&.~'

"'o.e

Budget

COfttt8C1IOnery tmDeC' 01

numDe'.

~

_

CIO .._

Spending cut. are proponlonal aerOl1 progrems.

...... to. N 2000. Alloe.tlon. be.ed on 1992 del •. The poten,IO'

,e. tftC,_...... _ .....fIG C"'. . . ftOl IftCluded.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $ 617 million a year
•
•
•
•

$1 ,1 56 cut per year for the average Social Security recipient
$834 less for each person enrolled in Medicare
$685 less for each Medicaid recipient
$270 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $ 559 million a year
•
•

•

•

$952 less for each person enrolled in Medicare
$ 783 less for each Medicaid recipient
$308 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$ 56 million additional cut In annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services - $ 633 million a year
•

$ , , '99 less for each person enrolled in Medicare

•
•

$986 less for each Medicaid recipient
$388 million In reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education, Ind other federally funded programs

The State of Tennessee

and the
Balanced Budget Amendment

!
What does a Balanced Budget Amendment mean to the State of Tennessee?
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the eso, Robert
Reischauer, has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it.· Make no mistake, balancing the budget would
require tough choices and cost Tennessee billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contraCtionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Tennessee.

The Balanced Budget Amendment
would cost Tennessee
$3.6 to $4.3 billion a year
Option 1: Tax increase and across-the-board spending cut'
Increases in taxes -- $1.5 billion a year ($622 per taxpayer)
Cuts in Benefits, Services, and Defense -- $2.1 billion a year
•
•
•
•

$552 cut per year for the average Social Security recipient
$403 less for each person enrolled in Medicare
$ 244 less for each Medicaid recipient
$797 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education, and other federally funded programs
$145 million additional cut in annual defense spending

•

Option 2: Across-the-board spending cut

Cuts in Benefits. Services, and Defense -- $ 3.8 billion a year
$1,004 cut per year tor the average Social Security recipient
$ 733 less tor each person enrolled in Medicare
$444 less for each MedIcaId recIpient
$1.4 billion en reduced fundIng for fighting crime, building highways
and bridges. protecting the enVironment, providing education, and
other federally funded programs
$ 263 million additional cut an annual defense spending

•
•

•

•

•

,--..c_

'1 •• eftC'. . . . c ....... .~"" •• _ _ _ . .toot
peC"~ to.rc.nlege vene. by "e,.1. eQuel 10 11'1.
_ r .... ,._ _ Compo,.."1 . ' . . . ",1 1 _ . .hct • .-wc_ ........ Soendlng CUlt er. proportlonel ecro •• progrems.
~Ol.

a."ooet..",..,........ -" CIO..-..c ....... '0' ry 2000 Allocation. ba.ed on 1992 dale. The pOlen,••1
eftC,. . . . . . . . . _ . . . . '41 cUle Ie - , mc.tuOed.

c .... ,ec,..-;;,:;~, o' t ••

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $4.2 billion a year
•
•

•
•

$ , , 186 cut per year for the average Social Security recipient
$865 less for each person enrolled in Medicare
$524 less for each Medicaid recipient
$' .7 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $3.8 billion a year
•
•

$988 less for each person enrolled in Medicare
$ 598 less for each Medicaid recipient
$2.0 billion in reduced funding for fighting crime, building highways

•

and bridges, protecting the environment, providing education, and
other federally funded programs
$354 million additional cut In annual defense spending

•

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services - $4.3 billion a year
•
•

•

$' ,245 less for each person enrolled in Medicare
$ 753 less for each Medicaid recipient
$2.5 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

The State of Texas
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of Texas?
While supporters offer a lot of tough talk. few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CBO, Robert
Reischauer, has indicated -- and this admmistration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax Increases necessary to achieve such a balance.
According to Reischauer. -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it. - Make no mistake, balancing the budget would
require tough choices and cost Texas billions.
In order to encourage a more realistic. responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractlonary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Texas.

The Balanced Budget Amendment
would cost Texas
$11.5 to $12.3 billion a year
Option 1: Tax increase and across-the-board spending cut 7

Increases in taxes -- $5.8 billion a year ($713 per taxpayer)
Cuts in Benefits, Services, and Defense -- $6.4 billion a year
$ 568 cut per year for the average Social Security recipient
$484 less for each person enrolled in Medicare
$ 233 Jess for each Medicaid recipient
$2. 1 billion in reduced funding for fighting crime, building highways
and bridges. protecting the environment, providing education, and
other federally funded programs
$1 . 1 billion additional cut in annual defense spending

•
•
•
•

•

Option 2: Across-the-board spending cut

Cuts in Benefits. Services. and Defense -- $11.7 billion a year
•

$1,033 cut per yeer for the average Social Security recipient
$8al less tor each person enrolled in Medicare
$423 less for each Medicaid recipient
$3.8 billion In reduced funding for fighting crime, building highways
and bridges. protecting the envIronment, providing education, and
other federally funded programs
$2.0 billion additional CUJ In annual defense spending

o

o
o

•

·l ••

tftC, •••• COf'I'IID. . . . . . ~,. 0' N ' - . . t.ot teOYC_ DKIl.oe

o-'eee ,__",,0 C~"I of ....... , '.0 "'oe·. ,~_ .-ca • .,..
lifolo
COft"KIIO-;:;';

luclOOI ,.,.".,.'.......

omooc'

eft

CIO ..-..c'- '0'

01 , •• _ ' _ _ I ....... _ - 11

rv

cv.... _t

too.e.n'OOIl "ono. bv .Ie.el. OQu.1 10 Ihe
$pend.ng cui •• ro proponlonel .ero •• progr.m5.

2000
,ftCfudod

Alloe.lIon. b .. ed on 1992 d.te. TI'M pOlenu.'

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services - $11.5 billion a year
•
•
•
•

$' ,220 cut per year for the average Social Security recipient
$' ,040 less for each person enrolled in Medicare
$500 less for each Medicaid recipient
$4.5 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $12.0 billion a year
•
•

•

•

$1,188 less for each person enrolled in Medicare
$ 571 less for each Medicaid recipient
$5.1 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$2.7 billion additional cut In annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $11.8 billion a year
•
•

•

$1,496 less for each person enrolled in Medicare
$ 719 less for each Medicaid recipient
$6.4 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

The State of Utah

and the
Balanced Budget Amendment

I

j

What does a Balanced Budget Amendment mean to the State of Utah?
While supporters offer a lot of tough talk. few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CBO. Robert
Reischauer. has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Aeischauer. -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it. - Make no mistake, balancing the budget would
require tough choices and cost Utah billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Utah.

The Balanced Budget Amendment
would cost Utah

$1.1 to $1.3 billion a yearOption 1: Tax increase and across-the-board spending cut 7
Increases in taxes -- $445 million a year ($ 58 1 per taxpayer)
Cuts in Benefits, Services, and Defense -- $652 million a year
$ 589 cut per year for the average Social Security recipient
$301 less for each person enrolled in Medicare
$ 299 less for each Medicaid recipient
$274 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education, and other federally funded programs
$122 million additional cut in annual defense spending

•
•
•
•

•

Option 2: Across-the-board spending cut

Cuts in Benefits. Services. and Defense -- $1.2 billion a year
$' ,071 cut per year tor the average Social Security recipient
$548 less for each person enrolled in Medicare
$ 544 less for each MedicaId reCIpient
$498 million In reduced fundang for fighting crime, building
highways and bridges. protecting the environment, providing
education, and other federally funded programs
$221 million additIonal cut In annual defense spending

•
•
•
•

•

., •• Inc' ....
""-0-

C~••• S~.'

,._~. c~_,u.f

"0"

____ ..hco' .4IOYC ..... OK....ge (perc.nt.ge v.n•• bv .te,.1. eQU.1 to the

,tw"" .....hco' --..c_ ....

Budget ........., . . . . . .

ef\

COft"ectJo-:;;'; tmOeCl 0' te. _ , _ ..... _

ceo ....c..- fo' N
. . . . . CUtl ..

~.

Soe~lng

2000

cut •• r. p.opo""onel ecro•• progrem,.

Allocehone be..d on 1992 d.ta. The potenuel

ftC, Included.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $1. 1 billion a year
•
•
•
•

$' ,265 cut per year for the average Social Security recipient
$647 less for each person enrolled in Medicare
$643 less for each Medicaid recipient
$588 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $1.3 billion a year
•
•

$ 738 less for each person enrolled in Medicare
$ 734 less for each Medicaid recipient

•

$671 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education, and other federally funded programs
$298 million additional cut in annual defense spending

•

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services - $1.2 billion a year
•
•
•

$930 less for each person enrolled in Medicare
$925 less for each Medicaid recipient
$846 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education, and other federally funded programs

Th. B./enc.d Budg.t Am.ndment ."d Ula/!

The State of Vennont
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of Vermont?
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the CBO, Robert
Reischauer, has indicated -- and this administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer. -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it. - Make no mistake, balancing the budget would
require tough choices and cost Vermont billions.
In order to encourage a more realistic. responsible debate. the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense. these are very conservative estimates of the cost of such an
amendment to the people of Vermont.

The Balanced Budget Amendment
would cost Vermont
$ 345 to $418 million a year
Option 7: Tax increase and across-the-board spending cut'

Increases in taxes -- $'72 million a year ($599 per taxpayer)
Cuts in Benefits, Services, and Defense -- $203 million a year
•

$587 cut per year for the average Social Security recipient
$41 7 less for each person enrolled in Medicare

•
•

$241 less for each Medicaid recipient
$69 million in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$9 million additional cut In annual defense spending

•
•

Option 2: Across-the-board spending cut

Cuts in Benefits. Services. and Defense -- $370 million a year
$' .068 cut per year for the average Social Security recipient
$ 759 less for each person enrolled in Medicare
$439 less for each MedicaId recipient
$'25 million In reduced fundang for fighting crime, building
highways and bridges. prOtecting the environment, providing
education. and other federallv funded programs
$ 16 milhon additional cut In annual defense spending

•
•
•
•

•

°l ••

InC'. . . . C~ ..... ~"".'

""eo- ,.__ COftlOO_"t of "- ...,
"ot.

_.-w ....en......:- INICkave 'oe,cantaoe vane, bv Itatel. eaual to the
"'crt ~ '-"-0-' !»peftd,"G cu ••• re propon,onel aero •• ptog..m&.

t ••

luOoe',."..,......... _ cao....-c-- f., N

COftUecbO_........eet 01 to. _ . _ .... _

2000

" I ""0 001 .... flOl lfICIuCIed

Allocat,oni ba••d on 1992 dota. The potant..1

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services - $418 million a year
•
•
•
•

$' ,261 cut per year for the average Social Security recipient
$896 less for each person enrolled in Medicare
$ 5 1 8 less for each Medicaid recipient
$'48 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $ 345 million a year
•

$ 1,023 less for each person enrolled in Medicare

•

$592 less for each Medicaid recipient
$ 169 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$ 2 1 million additional cut in annual defense spending

•

•

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services - $409 million a year
•
•

•

$1,289 less for each person enrolled in Medicare
. $ 746 less for each Medicaid recipient
$213 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

rh. /MIanc.d Budge' A",."dmant ."d v"moM

The State of Virginia
and the
Balanced Budget Amendment

/

I

/

/

/

~

What does a Balanced Budget Amendment mean to the State of Virginia?
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve this laudable goal. The Director of the eso, Robert
Reischauer. has indicated -- and this admintstration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it.· Make no mistake. balancing the budget would
reQuire tough choices and cost Virginia billions.
In order to encourage 8 more realistic. responsible debate. the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contr8ctionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense. these are very conservative estimates of the cost of such an
amendment to the people of Virginia.

The Balanced Budget Amendment
would cost Virginia
$ 5. 1 to $ 7 6 billion a year
I

Option 1: Tax increase and across-the-board spending cut
Increases in taxes -- $2.4 billion a year ($759 per taxpayer)
Cuts in Benefits, Services, and Defense -- $3.7 billion a year
I

•
•
•

•

$ 567 cut per year for the average Social Security recipient

$392 less for each person enrolled in Medicare
$1 89 less for each Medicaid recipient
$1.3 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$ 1.3 billion additional cut in annual defense spending

Option 2: Across-the-board spending cut

Cuts in Benefits, Services, and Defense -- $6.7 billion a year
•

$ 1.031 cut per year for the average Social Security recipient

•

$ 7 13

•
•

•

less for each person enrolled in Medicare
$343 less for each MedIcaid recIpient
$2.4 billion an reduced fundeng for fIghting crime, building highways
and bradges. protecting the environment. providing education, and
other federally funded programs
$2.3 billion addItional cut In annual defense spending

'T •• IftC'. . . .

c."......•• 5--. . f _ _ . .hoi • .owc_ pecIL,,,, ,.,.,c.n••"e v.nel by "lie). 'QUI' 10 'h"

""eoe ,...."". cOftlOOMni of "" &ell t.o . .herl ..auc_ O«&~.

_,_I . . .,.

,",0..
Bud 01 , ,.,..,.,.'. MeocI
ControclOO:;; '"'DOCI Of fl.

Of'

5.,.oOln" cull

I'" p,oponlonl' lerOI' progrem5.

'10 ..~- fo' N 2000. A"OClllon. b •••d on 1992 dl'l. Thl pOllnlle'

""'''0 evfl .. no. Included.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $ 5. 1 billion a year
•
•
•
•

$1,217 cut per year for the average Social Security recipient
$842 less for each person enrolled in Medicare
$405 less for each Medicaid recipient
$2.9 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services -- $7.6 billion a year
•
•
•

$962 less for each person enrolled in Medicare
$463 less for each Medicaid recipient
$3.3 billion in reduced funding for fighting crime, building highways

•

and bridges, protecting the environment, providing education, and
other federally funded programs
$3.1 billion additional cut in annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services .- $5.6 billion a year
•
•

•

$1.212 less for each person enrolled in Medicare
$ 583 less for each Medicaid recipient
$4.1 billion In reduced funding for fighting crime, building highways
and bridges. protecting the environment, providing education, and
other federally funded programs

The State of Washington
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of
Washington 7 While supporters offer a lot of tough talk, few proponents spell out
the details of how they would achieve this laudable goal. The Director of the CBO,
Robert Reischauer, has indicated .- and this administration agrees that any
discussion of a balanced budget amendment must be in the context of an honest
discussion about the program cuts and tax increases necessary to achieve such a
balance. According to Reischauer, -it would be a particular folly to pass a balanced
budget amendment and ignore the need to expeditiously enact legislation that
would offer some hope of complying with it.- Make no mistake, balancing the
budget would require tough choices and cost Washington billions.
ee

In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Washington.

The Balanced Budget Amendment
would cost Washington
$3.9 to $4.3 billion a year
Option 1: Tax increase and across-the-board spending cut'

Increases in taxes _. $ 2. 1 billion a year ($809 per taxpayer)
Cuts in Benefits, Services, and Defense -- $2.2 billion a year
•
•
•
•

$621 cut per year for the average Social Security recipient
$373 less for each person enrolled in Medicare
$240 less for each Medicaid recipient
$830 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federalty funded programs
$377 million additional cut in annual defense spending

•

Option 2: Across-the-board spending cut

Cuts in Benefits. Services. and Defense -- $4.0 billion a year
•

$ , • 1 29 cut per year for the average Social Security recipient

•
•
•

$677 less for each person enrolled in Medicare
$437 less for each Medicaid recipient
$1.5 billion en reduced fundang for fighting crime, building highways
and bridges. protecting the environment, providing education, and
other federally funded programs
$686 million additional cut an annual defense spending

•

; , • • InC'• • • •

c....-" 45"-.' ~ . ._ , teOoIC_ pack.ge w.rc.ntege v.,.e, bv "etel. 'QU.' to the
leO' _.0 "'IC'II .-..c ____ ~.. eoe. Spending cut. ere proponlonal ecro., progr.m,.

e-,-o- ,._ _ c ......._", •• tM
"'o'e

luclve' """""" ....., ... tIO...-c: ..... '0' N

COfttroc"o; ompeet

.f

2000. Alloeeuonl be,ed on 1992 dete. The potentJe'
t •• 1nC'-" Oftd_ ... ~ cut, .. not lnduded.

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $ 3.9 billion a year
•
•
•
•

$1,333 cut per year for the average Social Security recipient
$800 less for each person enrolled in Medicare
$ 5 1 5 less for each Medicaid recipient
$ 1.8 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $4.1 billion a year
•
•
•

•

$913 less for each person enrolled in Medicare
$589 less for each Medicaid recipient
$2.0 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs
$925 million additional cut in annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services - $4.0 billion a year
•
•

•

$1,151 less for each person enrolled in Medicare
$ 741 less for each Medicaid recipient
$2.6 billion in reduced fundang for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

The /MIene.d Budge' Amendment MId Wuhlllg ton

The State of West Virginia
and the
Balanced Budget Amendment

r

/

r

What does a Balanced Budget Amendment mean to the State of West
Virginia? While supporters offer a lot of tough talk. few proponents spell out the
details of how they would achieve this laudable goal. The Director of the CSO.
Robert Reischauer. has indicated -- and this administration agrees -- that any
discussion of a balanced budget amendment must be in the context of an honest
discussion about the program cuts and tax increases necessary to achieve such a
balance. According to Reischauer. -it would be a particular folly to pass a balanced
budget amendment and ignore the need to expeditiously enact legislation that
would offer some hope of complying with it. - Make no mistake. balancing the
budget would require tough choices and cost West Virginia billions.
In order to encourage a more realistic, responsible debate. the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of West Virginia.

The Balanced Budget Amendment
would cost West Virginia
$1 .2 to $1.6 billion a -year
Option 1: Tax increase and across-the-board spending cut f

Increases in taxes -- $412 million a year ($ 546 per taxpayer)
Cuts in Benefits, Services, and Defense -- $ 767 million a year
•

$ 584 cut per year for the average Social Security recipient

•

•

$405 less for each person enrolled in Medicare
$ 286 less for each Medicaid recipient
$225 million in reduced funding tor fighting crime, building

•

highways and bridges. protecting the environment, providing
education, and other federally funded programs
$'5 million additional cut in annual defense spending

•

Option 2: Across-the-board spending cut

Cuts in Benefits, Services, and Defense -- $1.4 billion a year
•
•

51.06' cut per year for the average Social Security recipient
5737 less for each person enrolled in Medicare
S 520 less for each Medicaid recIpient
5409 million In reduced fund'"g for fighting crime, building

•

highways and bndges. protectang the environment, providing
education. and other federally funded programs
$27 milleon additional cut In annual defense spending

•

·1 ••

"'C, ••••

c.......-...

4S~.t

"-'eo- '._'-Ie COft1OOfWft' _I ,"- ...,
"'0'.

-....- "foCIt , . - , e _ peclLeo- toe,eenteoe venes bv steta\. .quel to the
Soend,nG CUll er. proponlonal ec,os. proO'''''' •.

-._ . .foctt • .-,eMf' .-.~,

""'0-' ---... ..... _ cao ..- - '0- N

c_"ac,~ 1IfIIOOC' 01 , •• _ , .......... _

...... "0

cull ..

1000

ftO' .~ed

""oee'lon, ba.ed on 1992 dete. The po'en".1

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $1.6 billion a year
•
•
•
•

$' ,252 cut per year for the average Social Security recipient
$870 less for each person enrolled in Medicare
$614 less for each Medicaid recipient
$483 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services - $1.3 billion a year
•
•
•

•

$993 less for each person enrolled in Medicare
$701 less for each Medicaid recipient
$552 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education, and other federally funded programs
$36 million additional cut in annual defense spending

Option 5: Across-the-board spending cut, excluding defense and

Social Security
Cuts in Benefits and Services - $'.5 billion a year
•

$ 1.251 less for each person enrolled in Medicare

•
•

$883 less for each Medicaid recipient
$695 million in reduced funding for fighting crime, building
highways and bridges. protecting the environment, providing
education, and other federally funded programs

The State of Wisconsin
and the
Balanced Budget Amendment

r~~
I

/

What does a Balanced Budget Amendment mean to the State of Wisconsin?
While supporters offer a lot of tough talk, few proponents spell out the details of
how they would achieve thiS laudable goal. The Director of the CBO, Robert
Reischauer, has indicated -- and thiS administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax Increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with It. - Make no mistake, balancing the budget would
require tough choices and cost Wisconsin billions.
In order to encourage 8 more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractlonary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Wisconsin.

The Balanced Budget Amendment
would cost Wisconsin
$2.6 to $3.4 billion a year
Option 1: Tax increase and across-the-board spending cut '

Increases in taxes -- $'.6 billion a year ($644 per taxpayer)
Cuts in Benefits. Services, and Defense -- $1.7 billion a year
•
•
•
•

$616 cut per year for the average Social Security recipient
$439 less for each person enrolled in Medicare
$333 less for each Medicaid recipient
$391 million in reduced funding for fighting crime, building
highways and bndges. protecting the environment, providing
education. and other federally funded programs
$97 million additional cut In annual defense spending

•

Option 2: Across-the-board spending cut

Cuts in Benefits, Services, and Defense -- $3.1 billion a year
•

51,120 cut per year for the average Social Security recipient
5199 less for each person enrolled In Medicare
5605 less for each Medicaid reCIpient
$110 millton In reduced funding for fighting crime, building
highways and budges, protectang the environment. providing
education. and other federally funded programs
$ 176 milh,on additional cut In annual defense spending

•
•

•

•

--'808

'le ••ftC, •••• c.,.,.". •••• !t~ e' _ _ _ . . ,oCYt .-..c ..... pec".ge Ipe,c.nt.oe v." •• by .'e'el, .Que' 10 the
of.,- lee' 1.0 . . . .c ••• -..c ......... ege. SO.nG,ng cuI. e'e p,opon,onal ec'oe. proo,.ms.

'0_'-'8 C~"I

"'0'.

8YGV-I........oere.-.a _ CIO .. _ _ tOf N 2000

co""echO;;;':; ""'I)ecl 0' •••

tftC'O_ efId_

~. . c",. I.

,.."

,ftCh,aod

Allocetlons b •••d on 1992 de'a

The poten"el

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $ 3.4 billion a year
$' ,322 cut per year for the average Social Security recipient
$ 943 less for each person enrolled in Medicare
$ 71 5 less for each Medicaid recipient
$838 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

•
•
•
•

Option 4: Across-the-board spending cut, excluding Social
Secuflty

Cuts in Benefits and Services - $ 2.6 billion a year
•
•
•

•

$1 ,077 less for each person enrolled in Medicare
$816 less for each Medicaid recipient
$957 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$237 million additional cut in annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $3.0 billion a year
•
•
•

$1,356 less for each person enrolled in Medicare
$1,028 less for each Medicaid recipient
$1.2 billion in reduced funding for fighting crime, building highways
and bridges, protecting the environment, providing education, and
other federally funded programs

The State of Wyoming
and the
Balanced Budget Amendment

What does a Balanced Budget Amendment mean to the State of Wyoming?
While supporters offer a lot of tough talk. few proponents spell out the details of
how they would achieve this laudable goal. The Director of the cao, Robert
Reischauer. has indicated -- and thiS administration agrees -- that any discussion of
a balanced budget amendment must be in the context of an honest discussion
about the program cuts and tax increases necessary to achieve such a balance.
According to Reischauer, -it would be a particular folly to pass a balanced budget
amendment and ignore the need to expeditiously enact legislation that would offer
some hope of complying with it.· Make no mistake, balancing the budget would
require tough choices and cost Wyoming billions.
In order to encourage a more realistic, responsible debate, the Treasury
Department has analyzed five possible routes to a balanced budget in 2000. These
projections do not include the contractionary impact on the economy that might
accompany a sharp rise in taxes or reduction in spending over such a short period
of time. In this sense, these are very conservative estimates of the cost of such an
amendment to the people of Wyoming.

The Balanced Budget Amendment
would cost Wyoming
$354 to $413 million a year
Option 1: Tax increase and across-the-board spending cut T

Increases in taxes -- $159 million a year ($697 per taxpayer)
Cuts in Benefits, Services, and Defense -- $'95 million a year
•
$ 596 cut per year for the average Social Security recipient
•
•

$381 less for each person enrolled in Medicare
$232 less for each Medicaid recipient
$96 million in reduced funding for fighting crime, building highways
and bridges. protecting the environment, providing education, and
other federally funded programs
$ , 6 million additional cut In annual defense spending

•
•

Oprion 2: Across-the-board spending cut

Cuts in Benefits, Services. and Defense -- $ 355 million a year
•

$ , .083 cut per year for the average Social Security recipient

•
•

5693 less for each person enrolled m Medicare
5423 less for each Medicaid recIpient
51 75 million," reduced fundmg for fighting crime, building
hlghwavs and bridges. protecting the environment, providing
education. and other federallv funded programs
529 million add.tlonal cut In annual defense spending

e

•

.t _____ ..

"l •• _ ' •••• c .......... S,,"
,oco. '-..c_ D.ekeg. 'D.re.nt.ge ".,.e. bv .t.tel. eQue. to the
....'.08 r...."". C~fte"t O. 'N 108' . . . . .Ioc.' .-..c_ .-c"~. SpendIng cut. ere propo",on.1 .ero., progr.m,.
~o,.

COftI.OC"O;

....get - - ........ _ CIO .. ______ '0' N 2000

.....,.t

0' , •• 1ftC . . _

........ _

. . . . COl' . . . _I 'nc'l.ICIed

Alloc.tlons b •••d on 1992 dete. The potent,.t

Option 3: Across-the-board spending cut, excluding defense

Cuts in Benefits and Services -- $385 million a year
•

$, ,279 cut per year for the average Social Security recipient

•
•
•

$818 less for each person enrolled in Medicare
$499 less for each Medicaid recipient
$206 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education. and other federally funded programs

Option 4: Across-the-board spending cut, excluding Social
Security

Cuts in Benefits and Services -- $ 366 million a year
•
•
•

•

$934 less for each person enrolled in Medicare
$570 less for each Medicaid recipient
$236 million in reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs
$ 39 million additional cut In annual defense spending

Option 5: Across-the-board spending cut, excluding defense and
Social Security

Cuts in Benefits and Services -- $413 million a year
•
•

•

$1 , 1 77 less for each person enrolled in Medicare
$ 718 less for each Medicaid recIpient
$297 million In reduced funding for fighting crime, building
highways and bridges, protecting the environment, providing
education, and other federally funded programs

Derivation of State-by-State Estimates
for Balanced Budget Amendment Effects
The following description and tables provide detailed information for estimating the
allocation of spending cuts and tax increases to states that would occur under the balanced
budget amendment

Step 1:

Derive size of budget cuts required under balanced budget amendment.

An amendment that requires a balanced budget by FY2000 was used as a basis for this
exercise. The first table shows recent CBO estimates of the Federal deficit and the (lower)
levels of the deficit that would be required given a linear path to a balanced budget in
FY2000. No cuts were assumed to occur in FY 1995 as ratification of an amendment likely
would come after any changes could be made to the FY1995 budget. The required cuts take
into account the interest savings that would result from lower deficits and debt; a 5 percent
rate of interest was assumed. The required cuts are static in nature as no macroeconomic
feedback--e.g. lower economic growth resulting from the contractionary effects of deficit
reduction--is assumed. As a result, the estimated size of the cuts is very conservative,
representing the minimum size of cuts required. The table shows that deficit-reducing
spending and tax changes of $200 billion would have to be made in FY2000.
Step 1:

Consider alte17U1live deficit reduction spending and tax mixes.
Five different options for obtaining a balanced budget were examined:

Option 1:

Deficit reduction split between spending cuts (55 percent) and tax
increases (45 percent).

The allocation percentages for this option were derived (approximately) from
the averages of the 1990 and 1993 deficit reduction legislation.
The spending cut translates into an across-the-board cut of 6.6 percent. The tax
increase was assumed to result from a proportional increase in individual
income taxes.

Option 2:

A cross-the-board spending cui.

An across-the-board spending cut of 12.0 percent of total noninterest spending
in FY2000 ($200/$1661).

2

Option 3:

A cross-the-board spending cut, excluding defense spending.

An across-the-board spending cut of 14.2 percent of non interest, nondefense
spending in FY2000 ($200/$1407).
Option 4:

Across-the-board spending cut, excluding Social Security.

An across-the-board spending cut of 16.2 percent of noninterest, non-Social
Security spending in FY2000 ($200/$1232).
Option 5:

Across-Ihe-board spending cut, excluding defense and Social Security.

An across-the-board spending cut of 20.4 percent of noninterest, nondefense,
non-Social Security spendmg m FY2000 ($2001$978).
Values for CBO's projected levels for FY2000 for Social Security; nondefense;
nondefense, non-Social Security; and nonmterest total spending are shown in Table F. CBO
did not project a level of defense spendIng for FY2000. For defense spending, the
Administration's FY1999 defense prOjection was inflated by the rate of growth of total
discretionary spending from FY 1999 to FY2000 in the CBO projections.

Step 3:

Derive spending allocation parameters for states.

Spending by states as reported in the Census pUblication "Federal Expenditures by
State for Fiscal Year 1992" was used to derive allocation percentages for the defense, Social
Security, Medicare, Medicaid, and nondefense, non-Social Security spending cuts. Detailed
spending data by state for defense. SOCial Security, and nondefense non-Social Security are
shown in Tables A and B. The resulting allocation percentages are shown in Table E.
Medicaid and Medicare spending detail and allocation percentages are shown in Table D.
(Note: The data and derivations described thus far are sufficient to allocate spending
cuts by state--as shown In the first tables for Options 2 through 5.)

Step 4:

Derive tax allocation parameters.

Option 1 has 45 percent of the deficit reduction resulting from tax increases. For
purposes of this exercise, it was assumed that the higher tax revenues would be obtained from
an across-the-board increase in Individual income taxes. Data for income tax liability by state
for 1991 were obtained from the Treasury Publication "Statistics on Income." The tax
liability data and the resulting allocation percentages by state are shown in Table C.

3

Step 5:

Derive per-person values.

Per-person values for the year 2000 (shown in the second table for each option) were
derived by dividing projected total spending cuts or tax increases by the projected numbers of
affected persons. For Social Security. the number of recipients by State for 1992 was
obtained from the Social Secunty Bulletin; the projected level of total recipients in 2000 was
obtained from the 1993 Social Security Trustees Report. Medicare recipient data by state for
1991 were obtained from the 1993 StatIstical Abstract, Table 159. Medicaid enrollee data by
state for 1992 were obtained from "Medicaid Statistics" FY1992, U.S. Dept. of Health and
Human Services. Health Care Financing Administration Publication No. 10129 (October
1993). The projected levels of total enrollees and recipients for 2000 were obtained from the
Health Care Financing Administration These data are shown in Tables C and D. The
numbers of taxpaying units by state for 1991 were inflated by the rate of population growth to
obtain taxpaying units in 2000

Final Note:
In the methodology employed, there is an implicit assumption that spending and tax
allocation percentages by state WlII not change from 1992 (1991 for income taxes) to 2000.
This is unlikely to be the case, but It was the best approach to take given the available data
and the difficulties associated Wlth estimating migration patterns and age and income
distributions across states over tIme.

Balanced Budget Amendment-Balanced Unified Deficit by FY2000 (CeO Deficit Estimates)

Fiscal
Year

94
95
96
97
98
99
2000
2001
2002
2003
2004
2005

CBO
DEFICIT
223
171
166
182
180
204
226

CBO
DEFICIT
223
171
166
182
180
204
226

ADJ. TO
BALANCE
BY 2000

STATIC
REQUIRED
CUTS

APPROX
INTEREST

223
171
160
120
80
40
-0

0
6
59
92
148
200

0
0
3
8
18
28

SAVINGS

Option 1-55~. Spending Cuts fS11 Dbll). 45% Tax Increase (S9D bll)
Addendum
Social
NonDef,
Total
Total Tax Total OeflCit
Security
NonSS
Spending
Medicare
Medicaid
Reduction
Increase

Actosa-the-Board Cut of 6.6 ~cent
Defense

OthNondef
NonSS

(Sbillions)
U.S. Total
Alabama

AIaka
Arizona

AItcansaa
California
Colorado
Connecticut

Delaware
DC
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky

16.82

28.41

64.77

110.00

SO.OO

200.00

19.21

11.13

34.44

0.29
0.12
0.24
0.06
2.83
0.33
0.29
0.02
0.22

0.46
0.02
0.44
0.30

112
0.21
0.85
0.58
7.23
0.93
0.75
0.15

1.88
0.36
1.53

1.08
0.27
1.08

0.29
0.01
0.24
0.19
2.27
0.18
0.27
0.04
0.08
1.33

0.18
0.02
0.13

0.65

0.93

0.53

12.75
1.57
1.46
025
1.81
5.85

".n

1.27
1.91
0.28
0.29
4.85

2.96
0.63
2.61
1.46
24.47
2.83
3.37
0.53
2.10
10.70

2.59
0.58
0.44
4.17
1.87
1.07
1.04
1.45
1.73
0.60

2.08
0.46
0.27
4.77
1.78
0.82
0.82
0.94
1.09
0.34

4.66
1.04
0.71
8.94
3.66
1.89
1.86
2.38
282
0.93

295
3.02
3.36
1.57
1.22
2.41
0.38
0.64
0.50
0.40

210
260
3.23
1.57
0.50
1.61
0.20
0.48
0.57
0.45

5.05
5.62
6.59
3.14

4.02
0.59
1.12
1.07
0.84

3.19
0.95
7.83
2.39
0.32
4.07
1.32
1.10
5.21
0.47

3.92
0.38
7.67
1.94
0.17
3.55
0.83
0.91
4.19
0.35

0.62
0.05

0.13
1.82
1.30
O.SO
0.97
0.13

1.47
0.31
210
6.43
0.65
0.20
3.67
2.21
0.77
1.68
0.20

15.30

28.15

63.47

1.52

0.26

1.29

o.n

2.69
0.31
0.42
0.08
0.05
1.94

0.59
0.22
0.02
0.23
0.19
0.05
0.15
0.16
0.18
0.15

0.60
0.10
0.11
1.33
0.69
0.37
0.30
0.42
043
0.14

Nebraska
Nevada
New Hampshire

0.54
0.53
0.19
0.14
0.28
0.40
0.02
0.07
0.05
0.04

0.45
0.71
115
0.47
0.28
0.64
0.10
0.19
0.13
0.12

NewJetSey
NewMDico
New York
North Caro/lna
North Dakota
Ohio
Oldahoma
Oregon
Pennsylvania
Rhode Island

0.38
0.12
0.56
0.39
0.04
0.39
0.19
0.03
0.42
0.07

0.98
0.15
2.17
0.74
007
1 32
0.36
0.36

South Carolina
South Oakota

0.23
0.02
0.14
1.09
0.12
0.01
1.27
0.38
0.01
0.10
0.02

0.37
0.08
0.56
1.53
0.14
0.06
0.58

louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Miasissippi
Misaouri

Montana

Tennessee
Texas

ut.h
Vermont
Virginia
Washington
West Virginia
WISCOnsin
Wyoming
State Total
Undiat. & Terr.

1.66

0.13

0.54

0.25

1.55

3.19
1.40

0.25
0.31
2.61
0.99
0.66

059
086
1 12
030
196

1.n

2.02
0.96
0.67
1.36
0.27
0.38
0.32
0.24
1.84
0.69
5.10
1.26
0.21
2.36

on

0.71
3.13
0.27
0.87
0.21
1.40
3.81
0.39

1.01
0.09
0.17
0.02
0.05
0.37

0.18
0.48
0.27
3.96
0.67
0.31
0.08
1.42
1.49

0.35
0.05
0.05
1.01
0.37
0.22
0.20
0.23
0.26
0.10

0.26
0.03
0.03
0.34
0.23
0.10
0.09
0.22
0.41
0.07

0.79
0.17
0.22
1.26
0.39
0.34
0.29
0.40
0.44
0.14

0.34
0.61
0.83
0.28
0.18
0.44
0.05
0.12
0.06
0.07

0.16
0.34
0.37
0.18
0.15
024
0.03
0.05
0.03
0.09

1.46
0.83
0.83
0.51
0.35
0.69
0.18
021
0.22
0.08

7.12
1.33
15.50
4.32
0.49
7.62
216
202
9.41
0.82

o.n

0.08
1.71
0.36
0.06
0.85
0.23
0.21
1.27
0.09

0.34
0.07
1.55
0.28
0.03
0.48
0.13
0.09
0.59
0.07

0.78
0.54
1.85
0.63
0.13
1.02
0.41
0.41
1.28
0.12

0.89
0.19
1.48
5.84
0.44
0.17
238
2.07
0.41
1.59
0.16

2.36
0.50
3.58
12.27
1.10
0.38
6.05
4.28
1.18
3.27
0.35

0.17
0.05
0.33
1.06
0.06
0.04
0.34
0.27
0.15
0.37
0.02

0.19
0.03
0.27
0.66
0.06
0.03
0.14
0.19
0.12
0.21
0.01

0.52

106.93

89.49

196.41

19.13

11.11

33.23

3.07

0.51

3.59

0.07

0.01

121

1.n

0.12

0.13
0.80
2.08

OZT
0.07
1.34
0.83
0.23
0.39
0.10

Option 1-Per Person
Social Security
Medicare
Medicaid
Cut per Recipient(doBars)
(doUars)
(doUars)

Tax Increase
per Tax Filing Unit
(doUars)

U.S. Total

605

480

254

n8

Alabama
Alaska
ArIzona
Arkansas
California
Colorado
Connecticut
Delaware
DC
Florida

541
582
600

412
345
390
409
578
413
484
410
848
472

281
233
228
262
160
244
380
235
322
170

574
742
606
500
789
722
1,100

Georgia
Hawaii
Idaho
Illinois
Indiana

552
578
575
638
633
604
612
540
541
530

394
350
342
555
408
469
368
414
437

213
204
282
184
329
249
294
271
415
322

654
751
556
822
651
591
676
566
588
560

605
609
639
590
507
588
569
588

526
589
561
397
406
472
383
423
362
403

304
352
232
312
212
304
406
247
296
919

840
852
716
711
451
651
515
601
828

552
366

351
225
430
250
374
239
255
224
298
220

952
517

Iowa

Kansas
Kentucky
Louisiana
Maine
Maryland
Masaachusett:s
Michigan
Minnesota

Miasiasippi
Milaouri
Montana
Nebraska
Nevada
New Hampshire

537

608
583
663
621
515
597

604

603

410

n4

851
720

n4

New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island

665
540
642
555
547
613
603
625
605

331
487
463
430
405
546
457

South Carolina
South Dakota
Tennessee
Texas
Vermont
Virginia
Washington
WfI8t Virginia
"rsconsin
·yaming

554
539
552
568
589
587
567
621
584
616
596

317
388
403
484
301
417
392
373
405
439
381

305
319
244
233
299
241
189
240
286
333
232

529
563
622
713
581
599
759
809
546
644
697

State Total

599

479

261

724

5.463

11

Utah

Undist & Terrs.

584

sn

8n

581
565
643
574
633
707
701

Option 2- All Spending Cuts, $200 Billion
Addendum
Across-the-Board Cut of 12.0 ~ercent
Social
NonDef
Medicaid
Security
Total Medicare
NonSS
Defense

Oth Nondef
NonSS

30.58

51.66

117.76

($ billions)
200.00

34.92

20.23

62.61

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
DC
Ronda

0.53
0.22
0.43
0.10
5.14
0.60
0.53
0.04
0.40
1.31

0.84
0.05
080
0.55
4.89
0.56
0.76
0.15
0.09
3.52

2.04
0.39
1.54
1.05
13.15
1.70
1.37
0.27
2.81
5.80

3.41
0.65
2.78
1.70
23.19
2.85
2.66
0.46
3.30
10.63

0.52
0.02
0.43
0.35
4.12
0.32
0.49
0.08
0.14
2.41

0.34
0.03
0.23
0.21
1.83
0.16
0.31
0.04
0.09
0.67

1.18
0.33
0.88
0.49
7.19
1.21
0.57
0.15
2.58
2.72

Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

1.07
0.41
0.04
0.42
0.35
0.08
0.27
0.30

2.55
0.46
0.56
474
1 80
1 19
1.07
1.56
2.03
0.55

4.70
1.06
0.80
7.58
3.41
1.95
1.89
2.63
3.14
1.08

0.63
0.10
0.10
1.84
0.67
0.40
0.37
0.43
0.48
0.17

0.47
0.05
0.06
0.62
0.43
0.18
0.17
0.40

0.27

109
0.19
0.20
242
, 25
068
054
077
077
0.26

0.13

1.45
0.31
0.40
2.28
0.71
0.61
0.54
0.73
0.81
0.25

Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

0.98
0.97
0.35
0.25
0.50
0.74
0.03
0.12
0.08
0.08

0.82
1 30
2.08
0.86
0.50
117
0.17
0.34
0.24
022

3.56
3.23
3.68
1.75
1.21
2.48
0.49
0.70
0.58
0.43

5.36
5.49
6.11
2.85
2.22
4.38
0.69
1.16
0.91
0.73

0.62
1.10
1.50
0.51
0.32
0.80
0.10
0.22
0.12
0.12

0.29
0.62
0.67
0.32
0.26
0.43
0.06
0.10
0.06
0.17

2.65
1.51
1.51
0.92
0.63
1.25
0.33
0.39
0.41
0.14

New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsytvania
Rhode Island

0.68
0.22
1.03
0.70
0.07
0.71
0.35
0.06

, 78
0.27
3.94
1 34
0.13
2.40
066
0.66
302
0.24

3.35
1.25
9.28
2.30
0.39
4.28
1.40
1.29
5.70
0.50

5.81
1.73
14.24
4.34
0.58
7.40
2.41
2.01
9.48
0.85

1.30
0.14
3.11
0.65
0.10
1.55
0.42
0.37
2.31
0.16

0.63
0.12
2.81
0.50
0.05
0.88
0.23
0.17
1.06
0.12

1.42
0.98
3.36
1.15
0.23
1.86
0.75
0.74
2.33
0.22

0.03

067
0.15
1.01
2.78
0.26
0.11
1 as
0.98
0.46
1 12
008

1.58
0.37
2.55
6.92
0.71
0.24
3.30
2.36
0.90
1.76
0.24

2.67
0.56
3.82
11.69
1.19
0.37
6.67
402
1.39
3.06
0.35

0.31
0.09
0.61
1.93
0.11
0.07
0.62
0.50
0.27
0.68
0.04

0.34
0.05
0.49
1.21
0.11
0.05
0.25
0.35
0.23
0.37
0.03

0.94
0.23
1.45
3.79
0.50
0.13
2.43
1.51
0.41
0.71
0.17

27.82

51.19

115.41

194.41

34.79

20.20

60.41

2.n

0.47

2.35

5.59

0.13

0.03

2.20

U.S. Total

South Carolina
South Dakota
Tennessee
Texas
utah
Vermont
Virginia
Washington
West Virginia
WISconSIn
Wyoming
State Total
Undist & Terr.

0.33

o.n
0.12

0.41
0.04

0.26
1.98
0.22
0.02
2.31
0.69
0.03

0.18

0.74

Option 2-Per Person
Social Security
Medicare
Medicaid
Cut per Recipient - - .
(delara)
(deBars)
(doUara)

1,100

873

462

Alabama
Alaska
Arizona
Arkansas
Califomia
Colorado
Connecticut
Delaware
DC
Florida

984
1,058
1,091
976
1,106
1,059
1,206
1,128
937
1,085

749
627
709
745
1,050
750
881
745
1,543
858

512
423
415
476
290
691
428
586
309

Georgia
HawaII
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

1,004
1,051
1,045
1,159
1,150
1,099
",13
981
984
964

717
636
621
1,010
742
746
852
669
754
794

388
371
513
335
598
453
535
493
754
585

Maryland
Masaachusett:s

956

Mississippi
Milaoun
Montana
Nebraska
Nevada
New Hampshire

1,100
1,107
1,162
1,073
922
1,068
1,035
1,069
1,099
1,097

1.071
1,021
722
738
858
697
769
659
734

553
639
421
567
386
552
739
450
538
1,671

New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oldahoma
Oregon
Pennsytvania
Rhode Island

1,209
982
1,168
1,009
995
1,115
1,026
1,096
1,136
1,100

1,003
666
1,049
601
885
841
781
737
992
831

639
409
782
455
681
434
463
407
541
401

South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
Wast Virginia
"lSconsin
yoming

1,007
979
1,004
1,033
1,071
1,068
1,031
1,129
1,061
1,120
1,083

576
706
733
881
548
759
713

555
581

State Total

1,090

.V.S. Total

Michigan
Minnesota

Undist & Tens.

444

444

737
799
693

423
544
439
343
437
520
605
423

870

475

9,934

20

6n

Option 3- NonDe' Spending Cuts, $200 BIllion
NonDef cuts of 14.2 percent
.
Addendum
Social
NonDef
Security
NonSS
Total Medicare Medicaid

Oth Nondef

NonSS

($ billions)

U.S. Total

60.98

139.02

200.00

41.22

23.88

73.92

Alabama
Alaska
Arizona

1.00
0.05
0.95
0.64
5.78
0.86
0.90
0.17
0.10
4.16

2.41
0.46
1.82
1.24
15.52
2.00
1.61
0.31
3.32
6.85

3.40
0.51

0.61
0.02
0.51
0.41
4.87
0.38
0.58
0.09
0.17
2.85

0.40
0.04
0.28
0.25
2.16
0.19
0.36
0.04
0.11
0.79

1.39
0.39
1.04
0.58
8.49
1.43
0.67
0.18
3.05
3.21

3.01
0.55
0.67
5.59
2.13
1 41
127
185
2.40
0.65

4.29

Kansas
Kentucky
Louisiana
Maine

1.29
0.22
0.24
2.86
1.48
0.80
0.64
0.90
0.91
0.31

0.74
0.12
0.12
2.11
0.79
0.48
0.43
0.50
0.56
0.20

0.56
0.06
0.07
0.13
0.50
0.21
0.20
0.48
0.88
0.16

1.71
0.37
0.48
2.69
0.83
0.72
0.63
0.87
0.95
0.29

M.rytand
Massachusetts
Michigan
MiMesota
MiDissippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

0.96
1.53
2.46
1.01
0.59
1.38
0.21
0.40
0.29
0.26

4.20
3.81
4.34
2.06
143
2.92
0.58
0.83
0.69
0.51

5.17
5.34
6.80
3.07
2.02
4.30
0.78
1.23
0.97

0.73
1.30

o.n

0.60
0.38
0.94
0.12
0.26
0.14
0.14

0.35
0.73
0.19
0.38
0.31
0.51
0.07
0.11
0.07
0.20

3.12
1.78
1.78
1.08
0.74
1.48
0.39
0.46
0.48
0.17

New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsytvania
Rhode Island

2.10
0.32
4.65
1.58
0.15
2.84
0.78
0.78
3.57
0.28

3.96
1.47
10.95
2.11
0.46
5.06
165
1.52
6.72
0.59

6.05
1.79
15.60.
4.29
0.61
7.89
2.43
2.30
10.29
0.87

1.54
0.17
3.67
0.76
0.12
1.83
0.49
0.44
2.72
0.19

0.74
0.14
3.32
0.59
0.06
1.04
0.28
0.20
1.26
0.14

1.68
1.16
3.96
1.35
0.27
2.19
0.88
0.88
2.75
0.26

South Carohna
South Dakota
Temessee
Texas

0.79
0.18
1.20
3.28
0.30
0.13
1.25
1.15
0.55
1.32
0.10

1.87
0.44
3.00
8.17
0.84
0.28
3.90
2.78
107
2.08
0.29

2.66
0.62
4.20
11.45
1.14
0.42
5.14
3.94
1.61
3.40
0.38

0.36
0.11
0.12
2.28
0.13
0.08
0.13
0.59
0.32
0.80
0.05

0.40
0.06
0.58
1.42
0.12
0.06
0.29
0.41
0.27
0.44
0.03

1.11
0.27
1.71
4.47
0.59
0.15
2.87
1.78
0.48
0.84
0.21

60.43

136.24

196.67

41.07

23.85

71.32

0.55

2.78

3.33

0.15

0.03

2.60

ArtuInsas
Caifomia
Colorado
Comecticut
Delaware
DC
Florida
Georg,a
Hawaii
Idaho
Illinois
Indiana
Iowa

Utah

Vermont
V".ginia

Washington
West Virginia
WISCOnsin

Wyoming
State Total
Undist. & Terr.

2.n
1.88
21.30
2.66
2.51
0.49
3.42
11.01

o.n

0.90
8.45
361
2.21
1.91
2.75
3.31
0.96

l.n

Option 3 - Per Person
Social Security
Medicare
Medicaid
Cut per Recipient - - .
(dollars)
(dollars)
(doUars)
.u.S. Total

1,298

1,031

545

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
DC
Florida

1,161
1,249
1,288
1,152
1,306
1,251
1,423
1,332
1,106
1,281

8B4
740
837
879
1,240
886
1,040
879
1.821
1,013

604
499
489
562
343
525
816
505
692
365

Georgia

1,185
1,241
1,233
1,368
1.358
1,297
1,314
1,158
1,162
1,138

846
751
733
1.192
875
881
1.006
790
890
938

458
438
605
706
535
631
582
891
691

Miaaiaaippi
Milsouri
Montana
Nebraska
Nevada
New Hampshire

1,298
1,307
1,3n
1,266
1,088
1,261
1,222
1,262
1.297
1,295

1,128
1,264
1,205
853
871
1,012
822
908
778
866

653
755
497
670
456
652
872
531
636
1.972

New Jersey
New MelCico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsytvania
Rhode Island

1,427
1,159
1,379
1,191
1,174
1,317
1,212
1,294
1,342
1,299

1,184
786
1.238
710
1,045
993
922
870
1,171
981

754
482
923
537
804
512
546
481
639
473

South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
'rlSConSln
yoming

1,188
1,156
1,186
1,220
1,265
1,261
1,217
1,333
1.252
1,322
1,279

680
865
1,040
647
896
842
800
870
943
818

656
685
524
500
643
518
405
515
614
715

State Total

1,286

1,027

561

11.727

24

HawaiI

Idaho
lOinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Marytand
Masaachusett:s
Michigan
Minnesota

Undist. & Terrs.

834

396

499

Option 4- Non-Social Security Spending Cuts, $200 Billion
NonSS cuts of 16.2 eercent
Addendum
NonDef
Oth Nondef
Defense
NonSS
Total Medicare Medicaid
NonSS
U.S. Total

($ billions)

41.23

158.77

200.00

47.08

27.27

84.42

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
DC
Rorida

0.72
0.30
0.58
0.14
6.93
0.81
0.72
0.06
0.54
1.76

2.75
0.52
2.08
142
17.73
2.29
164
0.36
3.79
7.82

3.46
0.82
2.67
1.56
24.66
3.09
2.56
0.42
4.33
9.58

0.70
0.03
0.58
0.47
5.56
0.44
0.66
0.11
0.19
3.26

0.45
0.05
0.32
0.29
2.47
0.22
0.41
0.05
0.12
0.90

1.59
0.45
1.19
0.66
9.70
1.63
0.17
0.20
3.48
3.66

GeorgIa
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

1.44
0.55
0.05
0.57
0.47
0.11
0.37
0.40
0.45
0.36

3.43
0.62
076
639
2.43
1 61
2.11
2.74
0.75

487
1.17
0.81
696
2.91
172
1 81
2.51
3.18
, .11

0.85
0.13
0.13
2.48
0.91
0.54
0.50
0.57
0.64
0.23

0.64
0.07
0.08
0.83
0.57
0.24
0.23
0.54
1.00
0.18

1.95
0.42
0.54
3.08
0.95
0.83
0.72
0.99
1.09
0.33

Maryland
Massachusetts
Michigan
Minnesota
Milsissippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

1.33
1.30
0.47
0.34
0.68
0.99
0.04
0.17
0.11
0.10

480
435
496
2.36
1.64
3.34
066
0.94
0.78
058

6.13
5.65
5.43
2.69
2.31
4.33
0.70
1.11
0.90
0.68

0.84
1.49
2.03
0.68
0.43
1.07
0.13
0.29
0.16
0.16

0.40
0.83
0.90
0.44
0.36
0.58
0.08
0.13
0.08
0.23

3.57
2.03
2.03
1.24
0.85
1.69
0.44
0.52
0.55
0.19

New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsytvania
Rhode Island

0.92
0.29
1.38
0.95
0.09
0.96
0.47
0.08
1.03
0.16

452
168
12.50
3.09
0.52
5.7B
189
1.74
768
0.67

5.44
1.98
13.89
0.61
6.73
2.36
1.81
8.71
0.83

1.76
0.20
4.19
0.87
0.14
2.09
0.56
0.50
3.11
0.21

0.84
0.16
3.79
0.68
0.07
1.19
0.32
0.23
1.43
0.16

1.92
1.32
4.53
1.55
0.31
2.50
1.01
1.00
3.14
0.30

South Carolina
South Dakota
Tennessee

0.56
0.06
0.35
2.68
0.30
0.02
3.12
0.92
0.04
0.24
0.04

2.14
0.50
3.43
9.34
0.96
0.32
445
3.18
237
0.33

2.69
0.56
3.79
12.01
1.25
0.35
7.57
410
1.26
2.61
0.37

0.41
0.12
0.82
2.60
0.14
0.09
0.83
0.67
0.36
0.91
0.06

0.45
0.07
0.66
1.62
0.14
0.06
0.34
0.47
0.30
0.51
0.03

1.27
0.31
1.95
5.11
0.67
0.17
3.28
2.03
0.55
0.96
0.24

37.50

155.59

193.10

46.91

27.24

81.45

3.73

3.17

6.90

0.17

0.03

2.97

Texas
Utah
Vermont
Virginia
Washington
West Virginia
WBconsin
Wyoming
State Total
Undist & Terr.

1 45

122

4.04

Option ~-Per Person
Medicare
Medicaid
Cut per Recipient (doUars)
(doUars)
U.S. Total

1,1n

623

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
DC
Florida

1,010
846
956
1,004
1,416
1,011
1,187
1,004
2,080
1,157

690
570
559
642
392
599
932

966

5n

790
417

Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

858
837
1,361
1,000
1,006
1,149
902
1,016
1,071

523
501
691
452
807
611
721
664
1,017
789

Maryland
MlISS8chusetts
Michigan
Minnesota
Miasissippi
Milsouri
Montana
Nebraska
Nevada
New Hampshire

1,289
1,444
1,376
974
995
1,156
939
1,037
888
989

745
862
568
765
520
744
996
606
726
2,253

New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Ponnsytvania
Rhode Island

1,352
897
1,414
811
1,193
1,134
1,053
993
1,338
1,121

861
551
1,054
613
918
585
624
549
729
540

South Carolina
South Oakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
WisconSin
Wyoming

n6

934

749
783
598
571
734
592
463
589
701
816
570

1,173

640

13,393

28

State Total
UndiSt & Terr.

952
988
1,188
738
1,023
962

913
993
1,On

Option '-Spending Cuts of $200 8""on (20.4 percent)
excluding Defense and Social Security
NonDef
Oth Nondef
NonSS
Medicare
Medicaid
NonSS
($ billions)

U.S. Total

200.00

59.30

34.36

106.34

3.46
0.66
2.62
1.78
22.33
2.88
2.32
0.45
4.78
9.85

0.88
0.03
0.73
0.59
7.00
0.55
0.83
0.13
0.24
4.10

0.57
0.06
0.40
0.36
3.11
0.27
0.52
0.06
0.15
1.14

2.01
0.57
1.50
0.83
12.22
2.05
0.97
0.26
4.39
4.62

Georgia
H8W8ii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

4.32
0.79
0.96
8.05
3.07
2.03
1.82
2.66
3.45
0.94

1.07
0.17
0.17
3.12
114
0.68
0.62
072
0.81
0.29

0.80
0.09
0.11
1.05
0.72
0.30
0.29
0.69
1.27
0.23

2.45
0.53
0.69
3.88
1.20
1.04
0.91
1.25
1.37
0.42

Maryland
Massachusetts
Michigan
Mmesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

6.05
5.48
6.25
2.97
2.06
4.20
0.83
1.19
0.99
0.73

105
1.87
2.55
0.86
0.54
1.35
0.17
0.37
0.20
0.21

0.50
1.05
1.14
0.55
0.45
0.73
0.11
0.16
0.10
0.28

4.50
2.56
2.56
1.56
1.07
2.12
0.56
0.66
0.69
0.24

New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsytvania
Rhode Island

5.69
2.12
15.75
3.90
0.66
7.27
2.38
2.19
9.67
0.85

2.21
0.25
5.28
1.10
0.18
2.63
0.71
0.64
3.92
0.27

1.06
0.21
4.78
0.85
0.09
1.49
0.40
0.29
1.81
0.20

2.42
1.67
5.70
1.95
0.39
3.15
1.27
1.26
3.95
0.38

South Carolina
South Dakota
Temessee
Texas
Utah
Vermont
VlI'ginia
Washington
West VirginIa
WISConsin
Wyoming

2.69
0.63
4.32
11.76
1.20
0.41
5.61
4.00
1.54
2.99
0.41

0.52
0.16
1.03
3.28
0.18
0.11
1.05
0.85
0.46

1.60
0.39
2.46
6.43
0.85
0.21
4.13

0.07

0.57
0.09
0.83
2.05
0.18
0.08
0.42
0.59
0.38
0.64
0.04

196.00

59.09

34.31

102.60

4.00

0.22

0.04

3.74

Alabama
Alaska
Arizona

Arkansas
California
Colorado
Connecticut
Delaware
DC
Ronda

State Total
Undist & Terr.

1.15

2.56
0.70
1.21
0.30

Option 5-Per Person
- Cut per RecipientMedicare
MedicaJd
(dolars)
(doBarsl
U.S. Total

1,483

784

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
OeIaware
DC
Rorida

1,2n
1,065
1,204
1,284
1,784
1,774
1,496
1,265
2,620
1,458

869
718
704
808
493
755
1,174
727
996
525

Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

1,217
1,080
1,055
1,715
1,259
1,267
1,448
1,136
1,280
1,349

659
631
871
570
1,016
769
908
837
1,281
994

Maryland
Masaachusett:s

Milsiaippi
Milaouri
Montana
Nebraska
Nevada
New Hampshire

1,623
1,819
1,734
1,227
1,253
1,456
1,183
1,306
1,119
1,246

939
1,086
716
963
655
937
1,255
764
914
2,838

New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island

1,703
1,130
1,781
1,022
1,503
1,429
1,377
1,251
1,685
1,412

1,085
694
1.328

South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
Weat Virginia
rlSCOnsin
tOming

978
1,199
1,245
1,496
930
1,289
1.212
1,151
1,251
1.356
1,1n

943
986
753
719
925
746
583
741
883
1,028
718

State Total

1,478

807

16,871

35

Michigan
Minnesota

Undist & Terrs.

n3
1,156
737
786
692
919

680

Table A
1992 Fiscal Year Spending
Total Less
Interest

Defense

1,191,087

202,976

281,878

988,111

909,209

706,233

20,351
4,035
16,513
9.957
139,695
17,184
15,900
2,885
19,998
62,698

3,531
1,465
2.869
684
34.131
3,981
3.540
291
2.655
8,678

4,601
248
4,380
2.974
26.710
3,037
4,161
798
467
19,231

16,820
2,570
13,644
9,273
105,564
13,203
12,360
2,394
17,343
54,020

15,750
3,787
12, 133
6,983
112,985
14,147
11,139
1,887
19,531
43,467

12,219
2,322
9,264
6,299
78,854
10,166
8,199
1,596
16,816
34,789

Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine

28,295
6.497
4,721
44,412
19.980
11,397
11,208
15.541
18,605
6,533

7,075
2,690
241
2,800
2,329
548
1,806
1,976
2,199
1,791

5,952
1,030
1,096
13,198
6,827
3,694
2,964
4,183
4,227
1,425

21,220
3,807
4,480
41,612
17,651
10,849
9,402
13,565
16,406
4,742

22,343
5,467
3,625
31,214
13,153
7,103
8,244
11,358
14,378
5,108

15,268
2,m
3,384
28.414
10,824
7.155
6,438
9,382
12,179
3,317

M.ryIand
MDSaChusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire

32,337
32,832
35,752
16,806
13,349
26,093
4,092
6,873
5,3n
4,281

6,526
6,408
2.319
, ,651
3,339
4,884
210
814
561
50S

4,460
7,076
11,365
4,672
2,736
6,361
954
1,864
1,334
1,195

25,811
26,424
33,433
15,155
10,010
21,209
3,882
6,059
4,816
3,nS

27,8n
25,756
24,387
12,134
10,613
19,132
3,138
5,009
4,043
3,086

21,351
19,348
22,068
10,483
7,274
14,848
2,928
4,195
3,482
2,581

New Jersey
New Mexico
New York
North Carohna
North Dakota
Ohio
Oldahoma
Oregon
Pennsylvania
Rhode Island

34,313
10,390
83,923
25,139
3,467
43,514
14.292
11,712
55,718
5,066

4,528
1,451
6,805
4,675
437
4,712
2.311
375
5.079
785

9,688
1,459
21,493
7,299
716
13,113
3,586
3.614
16.482
1.295

29,785
8,939
n,118
21,064
3,030
38,802
11,981
11,331
50,639
4,281

24,625
8,931
62,430
18,440
2,751
30,401
10,106
8,098
39,236
3,n1

20,097
7,480
55,625
13,765
2,314
25,689
8,395
1,n3
34,157
2,986

South Carolina
South Oakota
Temessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia

15,908
3,330
22,533
69.856
7.114
2,167
40,913
24,025
8.127
17.842
2.100

2.744
278
1,744
13.170
1,467
103
15.358
4.552
179
1,168
191

3.660
816
5.524
15.157
1.392
621
5,755
5,336
2.526
6.114
452

13,164
3,052
20,189
56,S86
5,647
2,064
25,555
19,473
7.948
16,674
1.909

12,248
2,514
17,009
54,699
5,122
1,546
35,158
18,689
5,601
11,728
1,648

9,504
2,236
15,265
41,529
4,255
1,443
19.800
14,137
5.422
10,560
1,457

1.156.046

184.609

279,318

971,437

876,728

692.119

35,041

18.367

2.560

16,674

32,481

14,114

Social
Secunty

Total
NanDef

Total Total Nondef,
NonSS
NonSS

($ millions)

U.S. Total
Alabama
Alaska

Arizona
Arkansas
Califomia
Colorado
COMecticut
Delaware
DC
Rorida

WlSCOnstn

Wyoming
State Total
Undist & Terr,

Source: Federal Expenditures by State for Fiscal Year 1992
U.S. Dept of Commerce, March 1993

Table B

o.r.n•• Detail

SOCIal Security Detail

W~&

SIIIIries Procurement

U.S. Total

($ miUiona)
73.851
129.125

AJ.bama
AJIIaka
Arizona
Artcansas

1.590
1.081

CaIifamja

10.680
1,513

CoIcndo
Cannecticut
Delaware
DC

Florida
Georg..
H8waii
IdMo
Illinois

Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland

Masachusetts
Michigan
Minnesota
MiMisaippi
Mluouri

Montana
N. . . .ka
Nevada
New Hampshire
NewJersay
New Mexico
New York
North Carolina
North Dakota
Ohio
Oldahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota

Tennessee
T....
Utah

933
392
.a3
188
1.222
3.694
3,293
2.079
174
1,458
797
106
949
1,551
994

.as

2.494
719

653
204
711
1,212
154
517
321
88
1,300

725
1,397
3,1T1
290

1,684
1,551
173
2.016

m

2.008
199

f:JJ7
4,509

1,941
384
1,936

292
23,451
2.468
3,071
105
1,433
.,984
3,782
611
67
1,342
1,532
442
857

425
1,205
1,306

Retirement

SinMn
($ millions)

194.036

58.990

30.852

2.819
158
3.'42
1.878
18,922
2.042
3,141

1.104

678

3,741
796

775
9,219
4,664
2,619
2,120
2,"70
2,412
982

34

781

4Tl
4182

634
4.834
609

2.854

702
152
99

318

588
318
14.273

58

3,295
1,309
160
210
2.723
1,411
T14

608

3B5

BTl

204

7,m
963
15.306
4,886
493
8.7'20
2.410
2.637
11.624
956

1,767

1,498
147
3,028
754
202
3,063
448
736
79
1,237
8,661
614

752
301
236

no
165

1.329
970

5,408

902
74
111
1,256

659

~7

3,228
726

7B
50
1,663

278

3.110
5.070
7,691
3,339
1.626
4,332

843

388

993
1.156

4,032
5,689
1,666
1,447
2,568
3,672
56
2..0
419

Disability

943

4(J7

1,282
2.380

724
1.294

930
633

403

1.310
193

719
',8
150
150
114

214

308

3,948
1,411
166
2.983

796
645

4Tl

848
188
2.239
1,002

51
1,"10

380

3,482
213

332
1.376
126

2,376
566
3.524

741

543

1Tl
1.2D7

793

9,938

3,646

273

1,573
134

120
1.215

717

73

WISCOnSin

283

6,523
2.211
80
885

Wyoming

129

62

985
434
3,823
3,830
1,..ao
4,346
312

73,229

111,380

192,728

56,415

30,175

622

17,745

1.308

5T5

ffT7

Vermont
Virginia
Washington
W .... Virginia

SIMeTotal
Undist & Terr,

853
39
8,835
2.341
99

64

67

961

545

646

400

1,176

592

92

48

Source: Federal Expendrtures by State for Fiscal Year 1992
U.S. Dept. of Commerce, March 1993

T.bleC
Tax .nd Social Security Redplent Oewll
IneTax
UIbiIity
1991
($biIIions)

U.S. Total

473.53

Alabama
AIasIaa

5.68

Arizona
Artcanaaa
california

5.68

Colorado

Connecticut

D-.ware
DC

Florida
Georgia
H.waii
Idaho
III. .
Indiana
Iowa
Kansas
Kentucky
Louisiana
MUle
Maryland

Maaachusetts
Michigan
Mimesota
M~

Milsouri
Montana
Nebraska
Newdil
N.w Hampshire
NewJtney
New Mexico
New York
North Carolina
North Dakota

Ohio
Oklahoma
Oregon
Pennsylvania

Rhode Island

South Carolina
South Dakota
Tennessee
Texas

lbh
Vermont
Virginia
Washington
Weal Virginia
WISCOnSIn
Wyoming
St.te Total
Undiat. & Terr.

Soc Sec

Recips
1992

Soc Sec

Recips

Income Tax· Population Population
2000 Allocation %
1992
2000

(millions)
40.53
46.98

%

100.00

255,082

1.20
0.30

4,136

1.20

3,832
2,399

Taxpaying Talq)aying
Units
Units
1991
2000

(thousands)
114,707
274,815

123,581
1,882

3,470
3,281
689
589
13,488

4,456
632
4,128
2,585
33,255
3,738
3,535
742
635
14,531

1,747
339
1,654
984
13,790
1,627
1,610
331
311
6,250

1,782
1,060
14,857
1,752
1,734
356
335
6,733

2.31
0.51
0.30
5.30
1.98
0.91
0.91
1.04
1.21
0.37

6,751
1,160
1,001
11,631
5,662
2,812
2,523
3,755
4,287
1,235

7,m
1,250
1,150
12,531
6,100
3,030
2,718
4,045
4,619
1,331

2,947
567
445
5,391
2,544
1,281
1,128
1,538
1,723
556

3,175
611
480
5,808
2,740
1,380
1,215
1,657
1,856
599

0.74
1.17
1.79
0.80
0.54
1.09
0.17
0.32
0.22
0.20

2.33
2.89
3.58
1.74
0.56
1.79
0.23
0.54
0.64
0.50

4,908
5,998
9,437
4,480
2,614
5,193
824
1,&06
1,m
1,111

5,288
6,462
10,167

2,321
2,836
4,181
2,048
1,036
2,295
368
745
643
534

2,500
3,056
4,505
2,206
1,116
2,4n
396
802
693

1.27
0.23
2.91
114
0.11
1.86
0.55
0.52
2.29
0.19

1.47
0.27
3.37

7,789
1,581
18,119
6,843
~
11,016
3,212
2,9n
12,009
1,005

8,392
1,703
19,521
7,3n
685
11,868
3,460
3,207
12,938
1,083

3,exT

0.13
2.15
0.64
0.60
2.66
0.22

4.36
0.42
8.52
2.15.
0.19
3.95
0.93
1.01
4.66
0.38

680
8,119
3,094
284
5,129
1,347
1,339
5,502
458

4,123
733
8,747
3,333
306
5,526
1,451
1,442
5,927

4.70
1.02
7.78
30.74
2.34
0.90
12.52
10.90
2.17
8.35
0.84

0.57
0.13
0.87
2.32
021
0.09
0.88
0.75
0.38
0.86
0.07

0.67
0.15
1.01
2.69
0.24
0.11
102
0.87
0.44
1.00
0.08

0.99
021
1.64
6.49
0.49
0.19
2.64
2.30
0.46
1.76
0.18

3,603
711
5,024
17,656
1,813
570
6,m
5,136
1.812
5,007
466

3,882
766
5,413
19,022
1,953
614
6,870
5,533
1,952
5,394
502

1,507
319
2,208
7,607
711
266
2,908
2,378
700
2.287
211

1,689
343
2,379
8,196
766
286
3,133
2,562
754
2,464
228

470.85

40.53

46.98

99.43

255,081

274.814

114,707

123,581

2.69

0.00

0.00

0.57

a

0

a

0.55
0.11
0.08
2.80

0.86
0.04
0.74
0.56
4.43
0.53
0.63
0.13
0.09
3.25

0.59
13.02
1.41
2.12
0.31
0.32
5.39

25.12
9.38
4.29
4.32
4.93
5.74
1.n

0.94
0.15
0.17
1.80
0.94
0.53
0.42
0.67
0.68
0.23

1.09
0.18
0.19
2.09
1.09
062
049
078
0.79
0.27

11.04
13.70
16.97
825
2.64
8.47
1.07
2.54
3.02
2.34

0.64
101
1.55
0.69
0.47
0.94
0.15
0.28
0.19
0.17

20.65
1.99
40.34
10.19
0.91
18.69
4.38
4.80
22.06
1.82

1.43
2.79
61.65
6.66
10.04
1.45
1.50
25.50
10.93
2.42

UO

0.74
0.04
0.63
O...a
3.82
o.~

133

587
30,867

4,exT
2,816
5,595
888
1,730
1,430
1,197

Sources: Tax data. Statistics on Income, U.S. Dept. of Treasury
Social Secunty Recipients by State, 1992, SOCIal Secunty Bulletin
2000 data-total from 1993 Social Security Trustees Report
allocated by 1992 historic:al distribution

365

575

494

Table 0
Medicare and Medicaid Detail
Medicare

Medicare

1992

Enroll. 1991 Enroll. 2000 Payments
U.S. Total

Alabama
Alaska
Arizona

Arbnsu
CaIifomia
Colorado

Connecticut
Delaware
DC

Florida
Georgia
H.waii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
M.-ytand
Maaachusetts
Michigan
Minnesota
M••iII8ippi

Miaouri
Montana

Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota

Ohio
Oldahoma
Oragon
Pennsylvania

Rhode Island
South Carolina
South Dakota
Tennessee
T. . .

Utah
Vermont
Virginia
W .....ingtDn
Weat Virginia
Wi8consln
Wyoming
State Total
Undist. & Terr.

(thousands )
34,153
39,995

593
Xl
517
397
3,352
369
476
91
. 78
2,402
750
131
135
1,553
775
461
368

543
541
186
554
879

1,'2!!i1
597
371
792
120
2<10
151
141
1,109
186
2,529
917
100
1,571
458
434

1,985
161

69-'
32
605
465
3,925
432
557
107
91
2,813

878
153
158
1,819

(Smillions)

Medicare

Medicaid

Medicaid

A110caticn

Recip1992

Recip2000

Payments

(thousands)
31,150
43,800

(Smillions)

%

147,922

100.00

2,204
84
1,819
1 ,.sa

1.49
0.06
1.23
0.99
11.81
0.93
1.41
0.23
0.<10
6.91

17,464

1,373
2,080
336

597
10.228
2,666
413
416
7,779
2,851
1.706
1,556
1.802
2.022
733

1.80
0.28
0.28
5.26
1.93
1.15

2,m
4,670
6,366
2,140
1,358

513

1.78
3.16
4.30
1.45
0.92
2.28
0.28
0.62
0.33
0.35

1,299
218
2,962
1,074
117
1,840
536
508
2,325
189

5,518
614
13,158
2.736
439
6,557
1,775
1.586
9.770
664

3.73
0.42
8.90
1.85
0.30
4.43
1.20
1.07
6.60
0.45

532
130
827
2,193
194

1.297

0.88
0.26
1.74
5.53
0.30
0.19

908

540
431
636
634

218
649
1,029
1.472
699

434
9Z1
141
281
177
165

3,369

415
915
494

1.05

1.22
1.37
0.50

4ffl

657

58
402
321
4,_
259
316
61

81
566
<451
6,307

109

153
2,162

1,538

364

4<45

85

1992

100.00

1,127
'15
786

1.66
0.17
1.16
1.06
9.06
0.80
1.52
0.18
0.44
3.31

72!J
6,142
542
1,031
123
300
2,243

279
227
583
702
162

1,581
175
210
2,077
1,430
595

377

530

686

965
1,588

983
2,069
2,243
1,087

fI:J1

1,129
406

sn

1,355
2,498
448

554

5T2
685
780

60
151

85
212

78

109

71

100

1,443
210
320
197
561

6ff7

980

2,100

212
2,558
785

298
3,596
1,104

408

~

~

80

1,442
3SC
295
1,398
213

2,028
506
415
1,966
300

431
64
785
2,025
137
78
515

606

%

ffT,8Xl

1,214
1<10
122
1,846
713
392
319
820
987
228

864
100
87
1,313

Medicaid

Allocation

886

9,429
1,684
183
2,950
786
567
3,567

2.33
0.26
0.31
3.06
2.11
0.88
0.84
2.00
3.68
0.66
1.<45
3.05

3.31
1.60
1.31
2.13
0.31
0.47
0.29
0.83
3.10
0.60
13.90
2.48
0.27
4.35
1.16
0.84

5.26

403

0.59

1.43

o.n

569
308

800

1.94
0.12

4«l
42

619

1,129
176
1,642
4,041
352
160
834
1.170
756
1.256

60

85

1.66
0.26
2.42
5.96
0.52
0.24
1.23
1.73
1.11
1.85
0.12

99.6

30,252

42,537

67,741

99.9

0,4
1,263
898
87
11
542
13
Sources: 1992 spending data-Federal expenditures by State: Medicaid recipient data
data from Medicaid Statistics, FY1992. HHS, HCFA; Medicare enrollee dati
tram 1993 St:atJstica1 Abstract Table 159; 2000 total enrollment from
unpublished HCFA estimates.

0.1

454
111
706

1,873
166
76
741
630
312
723
53
34,142

389

62

2,567
8.185
451
286
2.622
2.117
1,140
2.865
182

39,982

147,380

89
868
738
365
847

1.n

90
1,104
2,847
193
109

n4
434

Table E
Spending Allocation percentage.

NonSS

NanDef
NanSS

100.00

100.00

100.00

1.63
0.09
1.55
106
9.48
1.08
1.<48
0.28
0.17
6.82

1.70
0.26
1.38
0.94
10.68
1.34
1.25
0.24
1.76
5.47

1.73
0.42
1.33

12.43
1_56
1.29
0.21
215
4.78

1.73
0.33
1.31
0.89
11.17
1.44
1.16
0.23
2.39
4.93

3.49
1.33
0.12
1.38
1.15
0.27
0.89
0.97
1.08
0.88

2.11
0.37
0.39
468
2.42
1 31
105
1<48
150
0.51

2.15
0.39
0.45
4.21

0.<48

2.46
0.60
0.40
3.43
1.45
0.85
0.91
1.25
1.58
0.56

2.16
0.39
0.48
4.02
1.53
1.01
0.91
1.33
1.72
0.47

3.22
3.16
1.14
0.81
1.65
2.41
0.10
0.40
0.28
0.25

1.58
2.51
403
1.66
0.97
2.26
0.34
0.66
0.47
0.42

2.61
2.67
3.38
1.53
1.01
2.15
0.39
0.61
0.49
0.38

3.07
2.83
2.68
1.33
1.17
2.17
0.35
0.55
0.44
0.34

3.02
2.74
3.12
1.48
1.03
2.10
0.41
0.59
0.49
0.37

223
0.71
3.35
230
0.22
232
1.14
0.18
2.50
0.39

3.44
0.52

3.01
0.90

7.62

7.80

2.59
0.25

2.13
0.31
3.93
1.21
1.15
5.12
0.43

2.71
0.98
6.87
203
0.30
3.34
1.18
0.89
4.32
0.41

2.85
1.06
7.88
1.95
0.33

1.35
0.32
216
5.88
0.60
0.20
280
200

0-..

Soc. See.

100.00

100.00

1.74
0.72
1.41
0.34
16.82
1.96
1.74
0.14
1.31
4.28

NonDe'

(percent)
U.S. Total

Alabama

Alaka
Arizona

Arkansas
California

Colorado
Connecticut

Del8ware
DC

Aorida
Georgia
Hawaii

Jdaho
Illinois
Indiana
Iowa
Kansas

Kentucky
Louisiana

M8ine
M.ryland
Masaachusett:s
Michigan
Minnesota

Miaissippi
Miaaouri
Montana
Nebnlska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota

Ohio
Oklahoma

ar.gon

Pennsylvania

Rhode Island
South Carolina
South Dakota
Tennessee

Texas
Utah
Vennont

Virginia
WahingtDn
WMt Virginia
WISCOnsin
Wyoming
S1atB Total
Undist & Terr.

4.65

1.27
1.28
5.85
0.46

1.79

1 10
0.95
1 37
1.66

o.n

3.64
1.19
1.09
4.84
0.42

1.35
0.14
0.86
6.49
0.72
0.05
7.57
2.24
0.09
0.58
0.09

1.30
0.29
1.96
5.38
0.49
0.22
2.04
1.89
0.90
2.17
0.16

1.33
0.31
2.10
5.74
0.57
0.21
2.59
1.97
0.80
0.19

1.35
0.28
1.87
6.02
0.63
0.17
3.87
2.06
0.62
1.29
0.18

90.95

99.09

98.31

96.43

98.00

9.05

0.91

1.69

3.57

200

1.69

Derived from 1992 spendIng as shown in Federal

Expenditures by State. Commerce. 1993

o.n
1.50
0.21

Table F
CBO FY2000 Budget Amounts
NonDef Total Less
Interest
Nondef
NonSS
NonSS

Defense

Soc. Sec.

254.0

429.0

1,407.0

1,232.0

97B.0

4.4
1.8
3.6
0.9
42.7
5.0
4.4
0.4
3.3
10.9

7.0
0.4
6.7
4.5
40.7
4.6
6.3
1.2
0.7
29.3

24.0
3.1
19.4
13.2
150.3
18.8
17.6
3.4
24.7
76.9

21.3
5.1
1B.4
9.5
153.1
19.2
15.9
2.B
28.5
58.9

Kansas
Kentucky
Louisiana
Maine

8.9
3.4
0.3
3.5
2.9
0.7
2.3
2.5
2.8
2.2

9.1
1.6
1.7
20.1
10.4
56
4.5
6.4
6.4
2.2

30.2
5.4
6.4
59.3
25.1
15.4
13.4
19.3
23.4
6.8

Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Milsauri
Montana
Nebraska
Nevada
New Hampshire

8.2
8.0
2.9
2.1
4.2
6.1
0.3
1.0
0.7
0.6

6.8
10.8
17.3
7.1
4.2
9.7
1.5
2.B
2.0
1.8

New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island

5.7
1.B
8.5
5.9
0.5
5.9
2.9
0.5
6.4
1.0

South Carotina
South Dakota
Temessee
Texas
Utah
Vermont
Virginia
Washington
Virginia
WlSCons.n
Wyoming

Medicare

Medicaid

1,681.0

290.0

16B.0

16.9
3.2
12.B
8.1
109.2
14.1
11.4
2.2
23.4
48.2

2B.3
5.4
23.1
14.1
192.6
23.1
22.1
3.B
27.4
88.3

4.3
0.2
3.B
34.2
2.7
4.1
0.7
1.2
20.1

2.B
0.3
1.9
1.8
15.2
1.3
2.8

30.3
7.4
4.9
42.3
17.8
10.4
11.2
15.4
19.5
6.9

21.1
3.8
4.1
39.3
15.0
9.9
8.9
13.0
16.9
4.6

39.1
B.8
6.7
62.9
2B.3
16.2
15.7
21.8
28.1
9.0

5.2
0.8
0.8
15.3
5.6
3.3
3.1
3.5
4.0
1.4

3.9
0.4
0.5
5.1
3.5
1.5
1.4
3.4
6.2
1.1

36.8
37.6
47.6
21.6
14.3
30.2
5.5
8.B
6.9
5.4

37.8
34.9
33.0
1B.4
14.4
26.7
4.3
6.8
5.5
4.2

29.6
28.B
30.S
14.5
10.1
20.6
4.1
5.8
4.8
3.6

44.5
45.6
50.8
23.7
18.4
36.4
5.8
9.7
7.B
6.0

5.2
9.2
12.5
4.2
2.7
6.B
0.8
1.B
1.0
1.0

2.4
5.1
5.S
2.7
2.2
3.8
0.5
O.B
0.5
1.4

14.7
2.2
32.7
11.1
1.1
20.0
5.5
5.5
25.1
2.0

42.4
12.7
109.8
30.0
4.3
55.3
17.1
16.1
72.1
6.1

33.4
12.1
84.6
25.0
3.7
41.2
14.5
11.0
53.2
5.1

27.8
10.4

19.1
3.2
35.6
11.6
10.7
47.3
4.1

48.2
14.4
118.3
36.0
4.8
61.4
20.0
16.7
7B.7
7.1

10.8
1.2
25.8
5.4
0.9
12.9
3.5
3.1
19.2
1.3

5.2
1.0
23.4
4.2
0.5
1.3
1.9
1.4
B.B
1.0

3.4
0.3
2.2
16.5
1.B
0.1
19.2
5.7
0.2
1.5
0.2

5.6
1.2
8.4
23.1
2.1
0.9
B.8
8.1
3.e
9.3
0.7

1B.7
4.3
29.6
80.7
B.O
2.9
36.4
27.7
11.3
23.7
2.7

16.6
3.4
23.0
74.1
7.B
2.1
47.6
25.3
7.6
15.9
2.2

13.2
3.1
21.1
57.5
5.9
2.0
27.4
19.6
7.5
14.6
2.0

22.2

2.5
O.B
5.0
16.0
0.9
0.6
5.1
4.2
5.6
0.4

2.B
0.4
4.1
10.0
0.9
0.4
2.1
2.9
1.9
3.1
0.2

231.0

425.1

1,383.3

1,188.0

958.5

1,614.6

288.9

167.8

23.0

3.9

23.7

44.0

19.5

46.4

1.1

0.2

(S billions)
U.S. Total
Alabama
Alaska
Arizona
Arkansas
Caifomia
Colorado
Connecticut
Delaware
DC
Rorida
Georgia
Hawaii
Id.t\o
Illinois
Indiana

Iowa

west

State Total
Undist & Terr.

ceo

n.o

2.9

4.7
31.7
97.1
9.B
3.1
55.4
33.4
11.6
25.4
2.9

estimates; defense derived from Administration FY99 defense
projection inflated at the rate of total discretionary spending for

ceo

2.2

0.3
0.7
5.6

DEPARTMENT

OF

THE

TREASURY (J.efji
\}~J

TREASURY

.

NEW S

~~J78q~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11

.................................

1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C.· 20220· (202) 622-2960

February 18, 1994

Monthly Release of U.S. Reserve Assets

The Treasury Department today released U.S. reserve assets data for the month of
January 1994.
As indicated in this table, U.S. reserve assets amounted to $74,243 million at the end
of January 1994, up from $73,442 million in December 1993 .

... .•.•. ·.·.• U. s~·. Reserve .~;ts·i:·r.>

·(in·.l1lilli()~r:f·do~~))·Ji:< . . ·

End
of
Month

Gold
Stock II

Special
Drawing
Rights Yl/

Foreign
Currencies
1)

IMF21

73,442

11,053

9,039

41,532

11,818

74,243

11,053

9,070

42,214

11,906

Total
Reserve
Assets

Reserve
Position in

1993
December
1994
January

11
11

Valued at $42.2222 per fine troy ounce.
Beginning July 1974, the IMF adopted a technique for valuing the SDR based on a
weighted average of exchange rates for the currencies of selected member countries. The
U.S. SDR holdings and reserve position in the IMF also are valued on this basis
beginning July 1974.

11

Includes allocations of SDRs

1/

Valued at current market exchange rates.

LB-6S7

by the IMF plus transactions in SDRs.

Removal Notice
The item identified below has been removed in accordance with FRASER's policy on handling
sensitive information in digitization projects due to copyright protections.

Citation Information
Document Type: Transcript

Number of Pages Removed: 31

Author(s):
Title:

Date:

Announcement By President Clinton on Sale of Aircraft to Saudi Arabia, Joined by Prince
Bandar of Saudi Arabia

1994-02-16

Journal:

Volume:
Page(s):
URL:

Federal Reserve Bank of St. Louis

https://fraser.stlouisfed.org

DEPARTMENT

lREASURY

OF

THE

TREASURY

NEWS

1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C.· 20220· (202) 622-2960

FOR IMMEDIATE RELEASE
Text as prepared for delivery
February 22, 1994

Remarks of Treasury Secretary Lloyd Bentsen
National Association of Business Economists
Washington, D.C.

LB-658

REMARKS OF TREASURY SECRETARY LLOYD BENTSEN
NATIONAL ASSOCIATION OF BUSINESS ECONOMISTS
FEBRUARY 22,1994

I want to welcome you to Washington for your spring meeting. I know you'll be
talking with Alice Rivlin and Bob Rubin and a few other of your friends in the administration
tomorrow, so I won't make a long speech tonight. I do want to take it quick look at what
we've accomplished in one year and cover a few of the things we're working on now here at
Treasury.
The last time I was in a room with this many economists, I was in Asia talking about
opening markets, increasing trade, creating jobs. There were about 300 economists in the
room in Jakarta, so I suspect that between them they had about 400 opinions. I'd wager the
situation in this room is the same.
However, there is one thing I think we ail agree on. Our economy is doing quite well,
and it looks like it will continue performing in a steady and sustainable way into the
foreseeable future.
I think it's useful to review how far we've come in a year. I know that things were
starting to get better when the Clinton Administration took office, but I think we can rightly
claim credit for some of the improvement because of the policies we've put in place. I
guarantee you that if the economy had gone back downhill, back into that recession for a third
time, that everyone would be pointing their fmgers at us. So I think it's fair to claim some of
the credit.
In the past year we've seen substantial headway against our unemployment rate -down a full percentage point. We've seen nearly 2 million jobs created, and those aren't
hamburger flippers either. We've seen a rebound in manufacturing jobs.
Our growth rate has rebounded to the highest point in six years, and I think it will settle down
for that strong, sustainable growth we've been talking about. Americans are more confident
than ever, and they're not worried about inflation.

LB-658

2

Insofar as interest rates are concerned, the long term rate is down. And the interest
sensitive areas of the economy, like housing and autos, are showing good growth.
We also have the deficit headed down. We're $65 billion ahead of projections, and
we're $125 billion lower now than what it would be if we'd done nothing.
Let's look at a few measures a little closer to home for you that are sure signs that
we're doing the right thing and it's having the right effect. Your employers -- I suspect on
your advice -- are replacing short tenn debt with long tenn debt. Business failures are
declining. Debt-to-equity ratios on a market-value basis are at their lowest point in 20 years.
There's a fundamental restructuring of corporate [mance under way, and balance sheets are
getting much stronger.
On top of all that, we've restored our place of leadership in the global economic arena,
and now economic policy is an integral part of foreign policy. I'm a regular now at the
summit meetings.
That's not bad for one year in office, but what are we going to do for an encore?
First, we're going to keep plugging away at the deficit, and bringing down the size and the
cost of government. The budget we just submitted actually cuts back on discretionary
spending. We're eliminating or cutting back on some 300 programs.
Our agenda goes a long way beyond just passing another budget.
For instance, we're interested in health care reform not only because it will hold down
the deficit but also because it will save businesses money in the long run. That's not to
mention that we also think it's the right thing to do. We're the only 0-7 country without
universal protection for our citizens, and that's wrong.
We're interested in reforming our bank regulation system because, among other things,
we want to take the kinks out of our economy. Having four regulators when one will do is
overkill. It makes life difficult for our financial services industry. It cost the private sector
money. And government analysts tell us we could save something on the order of $150
million or even more by eliminating this duplication.
We have some significant anti-crime legislation in the works, to cut down on the
number of gun dealers and keep guns off our streets.
And we have one other major item on our agenda, and that's opening markets and, as
a result, creating jobs. We did it with NAFTA, and we're in the process of doing it with the
~ruguay R~und. We'~e also working to get growth restored where it's been lagging lately
SInce gro\\1ng economIes mean growing demand.

3

Let me tell you why I consider it so important. Since the mid '80s, half of our growth
and almost all of the increase in manufacturing employment has been because of exports.
They are absolutely critical to our economy.
That's why we're so committed to convincing Japan it needs to open its markets. And
it's for that reason we're working to increase market access throughout Asia and the Pacific.
There's tremendous growth there from which we can benefit.
That's a substantial agenda. But I'm confident we'll do well this year. People said
we bit off more than we could chew last year, that we couldn't get the deficit down and
growth up, but we made that work. We'll make even more progress this year.
With that, let me renew my welcome. I hope you find the sessions tomorrow useful,
and enjoy your evening here at the Treasury.
Thank you.
-30-

~""

VBLIe DEBT NEWS ~t\ I).:.\'
,

\04

Dl'p~rLnlJ.:nt ofLhc Trs.:.as!J.ry

-

FOR lMM~DIATE R~L~ASE
February 22, 1994

Bureau of the PublIc D,Sbt • Washin\?;t9Q, DC 20239.

,~~

cONTACT: Ortlce of Flnanclng
202-219-3350

RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
Tenders for $12,305 million of 13-week bills to be issued
February 24, 1994 and to mature May 26, 1994 were
accepted today (CUSIP: 912794K78).
RANGE OF ACCEPTED
COMPETITIVE BIDS:
Low
High
Average

Discount
Rate
3.31%
3.33%
3.33%

Investment
Rate
3.39%
3.41%
3.41%

Price
99.163
99.158
99.158

$2,000,000 was accepted at lower yields.
Tenders at the high discount rate were allotted 48%.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED AND ACCEPTED (in thousands)

TOTALS
Type
Competitive
Noncompetitive
Subtotal, Public
Federal Reserve
Foreign Official
Institutions
TOTALS

Received
$49,453,787

Accepted_
$12,304,731

$44,095,732
1.270.844
$45,366,576

$6,946,676
1.270.844
$8,217,520

3,180,164

3,180,164

907.047
$49,453,787

907.047
$12,304,731

An additional $38,753 thousand of bills will be
issued to foreign official institutions for new cash.

LB-659

~~
........ )
'!j
{/I

..

ii i
m~•~}~:\~~"
~-v:s~;.

""

.

UBLIC DEBT NEWS
Department of the Treasurv

j.

FOR IMMEDIATE RELEASE

Bureau of the Public Debt • Washington, DC 20239

..

•

O'

~y

CONTACT: Office of Financing
202-219-3350

February 22, 1994

RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
Tenders for $12,310 million of 26-week bills to be issued
February 24, 1994 and to mature August 25, 1994 were
accepted today (CUSIP: 912794L69)

RANGE OF ACCEPTED
COMPETITIVE BIDS:
Low
High
Average

Discount
Rate
3.51%
3.53%
3.53%

Investment
Rate
3.62%
3.64%
3.64%

Price
98.226
98.215
98.215

Tenders at the high discount rate were allotted 40%.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED AND ACCEPTED (in thousands)

TOTALS
Type
Competitive
Noncompetitive
Subtotal, Public
Federal Reserve
Foreign Official
Institutions
TOTALS

Received
$47,806,004

Accented
$12,309,809

$42,127,697
904,954
$43,032,651

$6,631,502
904,954
$7,536,456

3,000,000

3,000,000

1,773,353
$47,806,004

1,773,353
$12,309,809

An additional $75,747 thousand of bills will be
issued to foreign official institutions for new cash.

LB-660

..

.1."

I

D EPA R.T MEN T

0 F

THE

IREASURY ~'JJ~(l)
\~\~~'t"'
~ -b!

T REA SUR Y

NEW S

1I1I1I1I1I1I1I1I1I1I1I1I1I1I1I1I....II.....j/7H4.~___
1500 PENNSYLVANlA AVENUE, N.W.· WASHINGTON, D.C.· 20220· (202) 622-2960
FOR RELEASE AT 2:30 P.M.
February 22, 1994

CONTACT:

Office of Financing
202/219-3350

TREASURY'S WEEKLY BILL OFFERING
The Treasury will auction two series of Treasury bills
totaling approximately $25,200 million, to be issued March 3,
1994. This offering will result in a paydown for the Treasury of
about $325 million, as the maturing weekly bills are outstanding
in the amount of $25,524 million.
Federal Reserve Banks hold $6,131 million of the maturing
bills for their own accounts, which may be refunded within the
offering amount at the weighted average discount rate of accepted
competitive tenders.
Federal Reserve Banks hold $2,311 million as agents for
foreign and international monetary authorities, which may be
refunded within the offering amount at the weighted average
discount rate of accepted competitive tenders.
Additional
amounts may be issued for such accounts if the aggregate amount
of new bids exceeds the aggregate amount of maturing bills.
Tenders for the bills will be received at Federal
Reserve Banks and Branches and at the Bureau of the Public
Debt, Washington, D. C. This offering of Treasury securities
is governed by the terms and conditions set forth in the Uniform
offering Circular (31 CFR Part 356, published as a final rule on
January 5, 1993, and effective March 1, 1993) for the sale and
issue by the Treasury to the public of marketable Treasury bills,
notes, and bonds.
Details about each of the new securities are given in the
attached offering highlights.
000

Attachment

LB-661

HIGHLIGHTS OF TREASURY OFFERINGS OF WEEKLY BILLS
TO BE ISSUED MARCH 3, 1994
February 22,
Offeri~_

Amount .

Description of Offering:
Term and type of security
CUSIP number
Auction date
Issue date
Maturity date
Original issue date
Currently outstanding
Minimum bid amount
Multiples .

1994

$12,600 million

$12,600 million

91-day bill
912794 K8 6
February 28, 1994
March 3, 1994
June 2, 1994
June 3, 1993
$28,394 million
$10,000
$ 1,000

182-day bill
912794 M9 2
February 28, 1994
March 3, 1994
September 1, 1994
March 3, 1994
$10,000
$ 1,000

The following rules apply to all securities mentioned above:
Submission of Bids:
Noncompetitive bids
Competitive bids

Accepted in full up to $1,000,000 at the average
discount rate of accepted competitive bids
(1) Must be expressed as a discount rate with
two decimals, e.g., 7.10%.
(2) Net long position for each bidder must be
reported when the sum of the total bid
amount, at all discount rates, and the net
long position is $2 billion or greater.
(3) Net long position must be determined as of
one half-hour prior to the closing time for
receipt of competitive tenders.

Maximum Recognized Bid
at a Single yield

35% of public offering

Maximum Award .

35% of public offering

Receipt of Tenders:
Noncompetitive tenders
Competitive tenders
Payment Terms .

Prior to 12:00 noon Eastern Standard time
on auction day
Prior to 1:00 p.m. Eastern Standard time
on auction day
Full payment with tender or by charge to a funds
account at a Federal Reserve Bank on issue date

T

Monthly Treasury Statement
of Receipts and Outlays
of the United States Government
For Fiscal Year 1994 Through January 31, 1994, and Other Periods

Highlight

This issue includes the estimates from the Presidents's budget for fiscal years 1994 and 1995, released
by the Office of Management and Budget on February 7, 1994.

RECEIPTS, OUTLAYS, AND SURPLUS/DEFICIT
THROUGH JANUARY 1994

500
B
I

400

L

300

L
I

o
N

S

Contents
Summary, page 2
Receipts, page 6
Outlays, page 7
Means of financing, page 20

200
Receipts/outlays by month, page 26

100

Federal trust funds/securities, page 28
Receipts by source/outlays by
function, page 29

o

Explanatory notes, page 30

-1 00~======;z:::=====:::;z:=:::=======t
Compiled and Published by

Department of the Treasury

Financial Management Service

Introduction
of receipts are treated as deductions from gross receipts; revolving and manage.
ment fund receipts, reimbursements and refunds of monies previously expended are
treated as deductions from gross outlays; and interest on the public debt (PUblIC
issues) is recognized on the accrual basis Malor information sources include
accounting data reported by Federal entities, disbursing officers, and Federal
Reserve banks.

The Montllly Treasury Statement of Receipts and Outlays of the United States
Government (MTS) IS prepared by the Financial Management Service, Department of
the Treasury, and after approval by the Fiscal Assistant Secretary of the Treasury, is
normally released on the 15th workday of the month following the reporting month.
The pubhcatJon IS based on data prOVided by Federal entities, disbursing officers,
and Federal Reserve banks

Triad of Publications
The MTS is part of a triad of Treasury financial reports, The Daily Treasury
Statement is published each working day of the Federal Govemment It provides
data on the cash and debt operations of the Treasury based upon reporting of the
Treasury account balances by Federal Reserve banks. The MTS is a report at
Govemment receipts and outlays, based on agency reporting. The US. Government
Annual Report is the official publication of the detailed receipts and outlays of the
Govemment. It is published annually in accordance with legislative mandates given
to the Secretary of the Treasury.

Audience
The MTS IS published to meet the needs of: Those responsible for or interested
In the cash POSItion of the Treasury; Those who are responsible for or interested in
the Government's budget results; and Individuals and businesses whose operations
depend upon or are related to the Govemment's financial operations.

D1aclosure Statement
ThiS statement summarizes the financial activities of the Federal Govemment
and off-budget Federal entities conducted in accordance with the Budget of the U.S,
Government, i.e., receipts and outlays of funds, the surplus or deficit, and the means
of financing the deficit or disposing of the surplus. Information is presented on a
modified cash basis: receipts are accounted for on the basis of collections; refunds

Data Sources and Infonnation
The Explanatory Notes section of this publication provides information concem.
ing the flow of data into the MTS and sources of information relevant to the Mrs.

Table 1. Summary of Receipts, Outlays, and the Deficit/Surplus of the U.S. Government, Fiscal Years 1993 and 1994,
by Month
[$ millions]
Period

Receipts

Outlays

Deficit/Surplus (-)

FV 1993

October
November
December
January
February
March
April
May
June
July
August
September
Vear-to-Date , .. ,""""." .. ,'"''''''

76,824
74,625
113,683
112,712
65,975
83,284
132,012
70,638
128,566
80,626
86,734
127,469

125,616
107,351
152,629
82,896
114,172
127,258
123,921
107,601
117,467
120,204
109,812
118,904

48,792
32,726
38,947
-29,817
48,197
43,974
-8,091
36,963
-11 ,099
39,577
23,078
-8,565

1,153,147

1,407,831

254,684

78,668
83,107
125,416
122,968

124,090
121,488
133,667
107,355

45,422
38,381
8,252
-15,613

410,159

486,601

76,442

FY 1994
October
November
December
January
Vear-ta-Date " " " " , .......... , ...... ,
Note Detalls may not add to totals due to rounding

2

Table 2. Summary of Budget and Off-Budget Results and Financing of the U.S. Government, January 1994 and
Other Periods
[$ millions]

Total on-budget and off-budget results:
.................... ...........
Total receipts

Prior
Fiscal Year
to Date
(1993)

Budget
Estimates
Full Fiscal
Year'

Current
Fiscal
Year to Dale

This
Month

Classification

Budget
Estimates
Next Fiscal
Year (199S)'

122,968

410,159

1,249,071

377,844

1,353,815

94,397
28,571

308,683
101,476

912,892
336,179

285,969
91,875

998,594
355,221

Total outlays .........

107,355

486,601

1,483,829

468,492

1,518,945

On-budget outlays
Off -budget outlays

83,164
24,192

402,440
84,161

1,202,953
280,876

388,697
79,795

1,223,582
295,364

+15,613

-76,442

-234,758

-90,648

-165,130

On-budget surplus (+) or deficit (-) ......... ,
Off-budget surplus (+) or deficit (-) ................

+11,234
+4,379

-93,758
+17,315

-290,061
+55,303

-102,727
+12,079

-224,987
+59,857

........ , ....

-15,613

76,442

234,758

90,648

165,130

-6,933
-8,090
-590

82,345
-5,306
-596

225,234
12,506
-2,982

73,140
12,463
5,045

173,715

On-budget receipts
Off-budget receipts

................ ...........

Total surplus (+) or deficit (-)

................

Total on-budget and off-budget financing

Means of financing:
Borrowing from the public ........... .
Reduction of operating cash, increase (-)
8y other means .

....

.. No TransactIons.
Note: Details may not add to totals due to rounding.

'These figures are based on the FY 1995 Budger, released by the Office of Management and
Budgel on February 7, 1994

Figure 1. Monthly Receipts, Outlays, and Budget Deficit/Surplus of the U.S. Government, Fiscal Years 1993 and 1994

$ billions
Outlays
,,

,

I

,

,,
,

','

I·

,,

., ,,,

I

,,"

,

"

I

I

,..

,

I

....... --., "
I

,

Receipts

Defic~( -)/Surplus

Oct.

Dec.

Feb.

Apr,

Jun,

Aug,

Oct.
FY
94

FY
93

3

Dec. Jan.

-8,585

re 2.

Monthly R&Celpts 01 the U.S. Government. by Source, Fiscal Years 1993 and 1994

$ billions
ITotal Receipts

Dec.

Oct.

Feb

Apr.

I

Jun.

Aug.

FY
93

ure 3.

Oct.

Dec. Jan.

FY

94

Monthly Outlays of the U.S. Government, by Function, Fiscal Years 1993 and 1994

$ billions
Total Outlays

0
Oct
FY

93

Aug.

Oct.
FY

94

Dec. Jan.

Table 3. Summary of Receipts and Outlays of the U.S. Government, January 1994 and Other Periods
[$ millions]
Classification

This Month

Current
Fiscal
Year to Date

74,167
3,916

203.664
36.521

195,251
29,736

549.901
130.719

28.571
7.260
794
358
4.011
1.105
1,526
1.260

101,476
28.593
4.872
1.508
17.111
4,580
6.506
5.329

91,875
25,986
4,393
1,575
15.073
3.828
6.018
4.108

336.179
93,974
27.041
4,729
54.550
12.749
19.198
20.031
1,249,071

Comparable
Prior Period

Budget
Estimates
Full Fiscal Year'

Budget Receipts
Individual income taxes
............. .
Corporation income taxes .. . ........... .
Social insurance taxes and contributions:
Employment taxes and contributions (off-budget) .... .
Employment taxes and contributions (on-budget) .. .
Unemployment insurance
Other retirement contributions
Excise taxes
Estate and gift taxes
Customs duties
Miscellaneous receipts .

Total Receipts ................................................ .

122,968

410,159

377,844

(On-budget) ................................................. .

94,397

308,683

285,969

912,892

(Off-budget) ................................................ .

28,571

101,476

91,875

336,179

212
179
20
673
4.789
244
17,752
2,509
1,102
1.269

1.000
746
73
6.386
23.238
1.068
88,447
10.123
8,799
6.195

829
702
75
6.621
23,836
1,034
93,786
9,946
10,576
5,434

2.755
2.872
193
11.383
64,931
3,234
267,484
30,980
28,738
17,206

21,710
24.591
1,564

101.130
100.599
8,932
2,317
3,249
13.511
2,315
12,642

90,691
95,098
8,659
2,162
3.771
14,472
2,165
11.218

316,615
314,663
25,535
7.240
10.817
37,111
5.785
36,687

-7

110.509
1.547
12.543
1.850
-524
4.500
12.542
202

110.224
332
11.519
1.898
-241
4.773
11.991
250

298,505
10,763
37.919
6,539
1.048
14.183
38.101
604

Budget Outlays
Legislative Branch .......... .
The Judiciary
Executive Office of the President
Funds Appropriated to the President ....
Department of Agriculture ....... .
Department of Commerce
Department of Defense-Military
............. .
.......... .
Department of Defense-Civil
Department of Education ........
. ............... .
Department of Energy ............
. .............. .
Department of Health and Human Services, except Social
Security...
.................... . ......... .
Department of Health and Human Services, SOCial Security .. .
Department of Housing and Urban Development
.......... .
Department of the Interior
.......... .
Department of Justice
Department of Labor
Department of State
Department of Transportation ...
Department of the Treasury:
Interest on the Public Debt
Other
Department of Veterans Affairs ..
Environmental Protection Agency ............... .
General Services Administration
............ .
National Aeronautics and Space Administration
Office of Personnel Management
.......... .
Small Business Administration
............... .
Other independent agencies:
Resolution Trust Corporation
Other
Undistributed offsetting receipts:
Interest
.....................
. ......... .
Other .......................... .

-74
1.262

1.235
4.263

-8,164
5.592

3.555
11.617

-122
-2.914

-41,682
-11,154

-39.847
'10.908

-85.845
-37.389

Total outlays .. ,", .... , .. , .................................... .

107,355

486,601

468,492

1,483,829

(On-budget) ................................................ ..

83,164

402,440

388,697

1,202,953

(Off-budget) ............................................... ..

24,192

84,161

79,795

280,876

Surplus (+) or deficit (-I .................................. ..

+15,613

-76,442

-90,648

-234,758

(On-budget) ................................................. .

+11,234

-93,758

-102,727

-290,061

(Off-budget) ............................................... ..

+4,379

+17,315

+12,079

+55,303

677
822
3.508
407
2.498
17.899
590
2.132
456
-658
1,015
3,249

'These figures are based on the FY 1995 Budget. released by the Office of Management and
Budget on February 7. 1994
Note: Details may not adO to totals due to rounding.

5

Table 4. Receipts of the U.S. Government, January 1994 and Other Periods
[$ millions)

Classification

Gross
Receipts

individual income taxes:
Withheld
Presidential ElectIon CampaIgn Fund

Other
Total-Individual income taxes

.........................

Corporation Income taxes ....................................
Social Insurance taxes and contributions:
Employment taxes and contributions
Federal old-age and survivors ins. trust fund:
Federal Insurance Contributions Act taxes
Self-Employment Contributions Act taxes
Deposits by States
Other
Total-FOASI trust fund
Federal disability insurance trust fund:
Federal Insurance Contributions Act taxes
Self-Employment Contributions Act taxes
Receipts from railroad retirement account
Deposits by States
Other
Total-FDI trust fund
Federal hospital insurance trust fund:
Federal Insurance Contributions Act taxes
Self-Employment Contributions Act taxes
Receipts from Railroad Retirement Board
Deposits by States

I (Deduct)
Refunds I Receipts

Gro~s

Receipts

I (Deduct)
RefUndS'
Rtceipla

152.036
1
47.474

'470

74,167

207,428

3,764

203,664

199,512

4,261

185,251

4,761

844

3,916

40,849

4,328

36,521

34,293

4,557

21,738

26.950
-1.143

92.841
-1.143
-45

92,841
-1.143
-45

85.256
-2.270
-10

25.806

25.806

91.653

91.653

82.976

82,976

'2.888
'-123

2.888
-123

9.947
-123

9.947
-123

9.141
-241

..

9.141
-241

)

-1

-1

'26.950
'-1.143

....

..

(
(

( )
(" .)

..

)
)

..)

..

..

(

)

(

..

(

)

)

85.256
-2.270
-10

..

..)

(

( )

(

(

2.764

2.764

9.824

9.824

8.899

8,899

'7.188
'-323

7.188
-323

27.614
-323

27.614
-323

25,244
-521

25,244
-521

(

)

..)

..)

..

)

-3

-3

27.291

24.719

24.719

21

713
588

700
573

7

693
573

21

130.069

117.868

7

117.860

3.843
1.014
14
1

3,341
1.021
24
28

4.872

4,414

1,480
28

1,480
28

1.543
32

1,543
32

358

1.508

1.508

1.575

1,575

36,983

136,479

31

136,448

123,857

28

123,829

2.594
141
1.220
56

10.367
1,492
5.690
204

550
10
84

9.817
1.483
5.607
204

9.374
-113
5.850
213

146
5
99

9,228
-118
5.751
213

17,755

643

17,111

15,324

251

15,073

6.865

6.865

27.291

243
153

243
153

734
588

35.831

35.831

130.090

Unemployment insurance:
State taxes deposited in Treasury
Federal Unemployment Tax Act taxes
Railroad unemployment taxes
Railroad debt repayment

474
314
6

474
314
6

(

(

..)

3.843
1.023
14
1

Total-Unemployment insurance

794

794

4.881

Federal employees retirement - employee
contributions
Contributions for non-federal employees

352
6

352
6

Total-Other retirement contributions

358
36,983

..)

..

(

)

(

Total-Employment taxes and contributions

Gross
Receipts

74,637

(

Railroad retirement accounts:
Rail industry pension fund
Railroad Social Security equivalent benefit

I (Deduct)
Refunds I Receipts

160.129
1
47.297

'236.838
1
'37.798

(

Total-FHI trust fund

Prior Fiscal Year to D...

Current Fiscal Year to Date

This Month

10

10

21

21

3.341
1.000
24
28
4,393

O1her retirement contributions:

Total-Social insurance taxes and
contributions

........................................

Excise taxes:
Miscellaneous excise taxes'
Airport and airway trust fund
Highway trust fund
Black lung disability trust fund

.............

2.729
148
1.389
56

135
7
169

.....................................

4,323

312

4,011

Estate and gift taxes .........................................

1,133

28

1,105

4,702

122

4,580

3,921

93

3,828

...............................................

1,582

56

1,526

6,809

304

6,506

6,268

251

8,018

..)

1.004
256

4.330
1.003

3

4.330
1.000

2.940
1.170

2,940
1,168

)

1,260

5,332

3

5,329

4,110

4,108

124,678

1,710

122,968

419,353

9,195

410,159

387,285

9,441

377,844

96,107

1,710

94,397

317,877

9,195

308,683

295,411

9,441

285,989

28,571

101,476

101,476

91,875

Total-Excise taxes

Customs duties

Miscellaneous Receipts:
DePOSItS of earnings by Federal Reserve banks
All other
Total -

Miscellaneous receipts ........................

Total Total -

........................................
On-budget ......................................

Total -

Off-budget

Receipts

......................................

1.004
256

(

1,261

(

..

28,571

'In accordance Wlth the prOVISIonS of the Soaal Secunty Act as amended, 'IndiVlduai Income
Taxes Withheld have been decreased and 'Federal ContnbutlonS Act Taxes correspondIngly
tnereased by $1,330 mlliton to correct estImates for the quarter endIng December 31. 1992
"!ndMduaJ Income Taxes Other have been Increased and Self Employment Contnbutlons Act
Taxes correspondIngly deCreased by $3.164 mlliton to correct estImates for calendar year 1991

-

91,875

'ThIS amount has been adjusted by coIlectoons not reported in the currrent month by !toe
Intemal Revenue ServIce.
'Th,S amount is partially es~mated and will be adlusted pending further analysiS of !toe
accountIng data
'Includes amounts for the windfall profits tax pursuant to P.l. 96-223.
No TransactIons.
(. -) Less than $500.000

and poor

6

Table 5, Outlays of the U,S, Government, January 1994 and Other Periods
[$ millions]
This Month
Classification
Gross IAPPlicable
Outlays Receipts

Prior Fiscal Year to Date

Current Fiscal Year to Date

I Outlays

1

Gross [APPIiC.abI
Outlays Receipts

Outla s
y

Gross lAPPIic.ablel Outlays
Outlays Receipts

Legislative Branch:
Senate
House of Representatives
Joint items
CongreSSional Budget Office
Architect of the Capitol ..
. . .. .. . .... .. ........ .
Library of Congress
.......................... .
Government Printing Office:
Revolving fund (net)
General fund appropriations
General Accounting Office
United States Tax Court ..
Other Legislative Branch agencies
Proprietary receipts from the public ............... .
Intrabudgetary transactions .......... .. .................... .

-1

Total-Legislative Branch ............................... .

217

35
69

140
247

7

7

65

268

83
107

58
32
135
10
10

58
32
135
10
10

17
35
152
12
11

-1

-4

-1
-4

-3

212

1,010

1,000

837

3

9

9

7

164
12

699
40

698
40

687

179

747

746

702

15
20
39

15
20
39

13
19

11

4
5
11

43

19
43

20

20

73

73

7S

7S

-9

98
2,601
1,683

320
2,697

11

-6
14
10

6

2
13
22

(")

23
9
32

23

9

32
2

2
2

2
(")

5

139
261
26

3

140
250
25

4

35
66
6
2
13
22

(")

138
255
26

(")

(' ')

6

7

67
268

2

(")
10

25
7

3

80
107
17

2
8

35
152
12
11
-2
-3
829

The Judiciary:
Supreme Court of the United States .. . ... ,,, ............ .
Courts of Appeals, District Courts. and other judicial
services
Other ..

Total-The Judiciary , ........ , .............. , •........ ".

3

164

CO)

12

179

(

..

)

9

7
(")

..

( )

687
9
702

Executive Office of the President:
Compensation of the President and the White House
Office" .......................................... .
Office of Management and Budget ....................... ..
Other
.. . .. . .. .. . .. .. . .. ... .. .......... ..

Total-Executive Office of the President

4
5

13

Funds Appropriated to the President:
Intemational Security Assistance:
Guaranty reserve fund .............. . ................ .
Foreign military financing grants .... .
Economic support fund
.......... .
Military aSSistance
Peacekeeping Operations ...................... ..
Other ..........
.. .......... ..
Proprietary receipts from the public ................ .
Total-International Security Assistance ... .
International Development Assistance:
Multilateral ASSistance:
Contnbution to the International Development
Association
.................. , .. , .
International organizations and programs .......... .
Other .....
. ............. ..
Total-Multilateral Assistance .......... .
Agency for International Development:
Functional development aSSistance program .......... .
Sub-Saharan Africa development aSSistance .......... .
Operating expenses .................................... .
Payment to the Foreign Service retirement and
disability fund ........... . ............................. .
Other ......
. ............................ " ..
Proprietary receipts from the public .. .
Intrabudgetary transactions ....... , ................... .
Total-Agency for International Development
Peace Corps
.. .. .. .. .... .. ........ , ...... ..
Overseas Private Investment Corporation
Other..............
.. .......................... .
Total-Intemational Development ASsistance
International Monetary Programs ..
Military Sales Programs:
Special defense acquisition fund
Foreign military sales trust fund
Kuwait civil reconstruction trust fund
Proprietary receipts from the publiC ...... .
Other................... ........

Total-Funds Appropriated to the President ......... ..

60
223
108

69

158

8
5

8

255
2.601
1.683
11

5

24

24

2

10

209

2
-209

233

10
-233

277

129

4.585

391

4,194

4,930

160

160

354

354

367

2
1

2

116

116

144

144

201

201

240

240

164

164

671

671

751

751

103

103
36

379

379

447

447

36

199

227

227

45

45

199
174

174

144

144

26

44
213

177

199

-199

225

810

995
64

406

223
108

44

44

14
53

28
-53

239

67

202

1,036

17

78

8

15

68

32

C ')

78
-53
32

294

44

42

269

17
6
6

(")

-1
6

462

75

388

1,832

-41

323

13
1 ,015

67
4,361

(")

(")

-41

13
1,015

(")

(. 'J
836
5
1,861

1,188

7

73

5

6

673

11,173

4,788

156

2,697

1,895

1,895
-6

105

14
10
-105

269

4,661

367

19
297

-297

317

678

36
28

81

64
-45

1

27

1,538

1,874

399

1,475

323

644

-6

93
4,054
4

4,361
(")

4,029

-836

164

-4,029

6

4

6,386

",603

157

644

75

18
4.054

4,240

4
-4,240
4

4,983

6,821

Table 5.

Outlays of the U.S. Government, January 1994 and Other Periods-Continued
[$ millions]

Classification

Gross IApplicable I Outlays
Outlays
Receipts

Department 01 Agriculture:
Agncultural Research Service
Cooperative State Research Service
Ext en Slon Service
Animal and Plant Health Inspection Service
Food Safety and InspecllOn Service
Agncultural Markellng Service
Soil Conservation Service
Watershed and flood prevention operations
Conservation operations
Other
Agncultural StabilizallOn and Conservation Service:
ConservallOn programs
Other
Farmers Home Administration:
Credit accounts:
Agncultural credit insurance fund
Rural hOUSing insurance fund
Other
Salaries and expenses
Other

Prior Fiscal Year to Dlte

Current Fiscal Year to Date

This Month

Gross
Outlays

IAPPlic.abl~l
Receipts

Gross IAPPIlcabiel
Receipts
Outlays

Outla s
y

OutleY'

38
36
92

52
40
34
38
36
92

227
154
137
144
151
326

227
154
137
144
151
325

255
143
135
161
157
409

255
143
135
161
157
408

20
45
6

20
45
6

93
181
26

93
181
26

81
181
28

81
181
28

14
58

14
58

1,787
225

1,787
225

1,712
226

1,712
226

-325
84

323
982

-504
-110

285
1.004

913
1,050

(

(

52
40
34

24
304

349
220

827
1,091

..

(

195
27

195
27

206
28

-183

1.526

-392

1,523

91

363

363

105

754
25

-40
23
5
-51
332

246
107
23
878
1,216

24
107
22
-571
895

301
85
24
750
349

732

882

9,027
2

6,386
2

10,721
4

569

1,918

)

..

(' ')

52
6

52
6

)

..

)

-628
-46

..

( )

206
28
1.964

-440

Total-Farmers Home Administration

386

Foreign assistance programs
Rural Development Administration:
Rural development insurance fund
Rural water and waste disposal grants
Other
Rural Electrification Administration
Federal Crop Insurance Corporation
Commodity Credit Corporation:
Pnce support and related programs
NallOnal Wool Act Program

91

1,614
1

Food and Nutrition Service:
Food stamp program
State child nutrition programs
Women, infants and children programs
Other

2,166
636
278
91

2,166
636
278
91

8,531
2.400
1,087
233

8.531
2.400
1,087
233

8.129
2.372
990
239

8.129
2.372
990
239

3,172

3,172

12,251

12,251

11.730

11.730

98
21
68

98
21
68

434
140
406

434
140
406

484
146
487

484

186

186

980

980

1,117

1.117

4
131

70
-131
-1

234

11
498

222
-498

208

12
384

-384

7,076

2,287

4,789

30,302

7,064

23,238

30,405

6,569

23,838

22
22
21

2

20
22
21

96
100
89

7

88
100
89

86
132
102

10

76
132
102

150
8
20
7

2

665
24
85
34

5

610
31
81
30

600

12

660
24
85
22

9

3

148
8
20
4

12

Total-SCience and Technology

184

4

180

808

17

791

752

22

Other
Propnetary receipts from the public
Intrabudgetary transactions
Offsetllng govemmental receipts

11

39

39
-40

31

..)

10

11
-10

-31

38

-38

260

16

69

1,G34

Total-Food and NutrillOn Service

32
23
6
703
357

Forest Service:
National forest system
Forest service permanent appropriations
Other
Total-Forest Service

74

Other
Propnetary receipts from the public
Intrabudgetary transactions
Total-Department 01 Agricultura
Department
EconomiC
Bureau of
Promotion

..)

(

-1

.......................

01 Commerce:
Development Administration
the Census
of Industry and Commerce

SCience and Technology:
National Oceanic and Atmospheric Administration
Patent and Trademark Office
National Institute of Standards and Technology
Other

Total-Department 01 Commerce

71

(

.......................

1.449
321
2,641

..)

..)

40

(

244

1,132

64

(

8

222

..

(

)

1,068

..

(

105
187
1
1.418
310
2,293

-668

40
8,428
4

148
487

)

1,103

113
85
23

196

31
81
18
731

('I

-

-

Table 5. Outlays of the U.S. Government, January 1994 and Other Periods-Continued
[$ millions1
This Month

I

Classification
Gross
Outlays
Department of Defense-Military:
Military personnel:
Department of the Army
Department of the Navy
. . . . ... . .. .
Department of the Air Force
Total-Military personnel

............

Operation and maintenance:
Department of the Army
Department of the Navy
Department of the Air Force
Defense agencies

. . . .. . . . . . .

Total-Operation and maintenance .
Procurement:
Department of the Army
Department of the Navy
Department of the Air Force
Defense agencies .......

............... ,

Total-Procurement .....
Research. development. test. and evaluation:
. ...........
Department of the Army ..
Department of the Navy
Department of the Air Force
Defense agencies ..............
Total-ResearCh, developmenl, test and evaluation
Military construction:
Department of the Army ....
Department of the Navy
Department of the Air Force .
Defense agencies .......
Total-Military construction
Family housing:
Department of the Army
Department of the Navy
Department of the Air Force
Defense agencies ............
Revolving and management funds:
Department of the Army , .....
Department of the Navy
Department of the Air Force ..
Defense agencies:
Defense business operations fund
Other .......
Trust funds:
Department of the Army
Department of the Navy
Department of the Air Force ...
. . . . . . . . . . ..
Defense agencies
Proprietary receipts from the public:
Department of the Army .......
Department of the Navy
Department of the Air Force
Defense agencies .........
Intrabudgetary transactions:
Department of the Army ....
Department of the Navy ..
Department of the Air Force
Defense agencies:
Defense cooperation account
Voluntary separation incentive fund
. . . . . . . .. .. . . . .. .
Other
Offsetting govemmental receipts:
Department of the Army ...
Defense agencies:
Defense cooperation account ......

...... - .......

..................

,

. . . . .. . , . .

Applicable
Receipts

I

Outlays

Prior Fiscal Year to Date

Gross [APPlicabl1 0 tI
Outlays
Receipts
u ays

Gross /APPlicable / Outla s
Outlays
Receipts
y

1,041
999
539

1,041
999
539

8,758
8,381
6,057

8,758
8,381
6,057

9,620
9,455
7,252

9,620
9,455
7,252

2,579

2,579

23,197

23,197

26,327

26,327

2,274
1,814
2,951
1,629

2,274
1,814
2,951
1,629

7,147
6,955
8,374
6,607

7,147
6,955
8,374
6,607

8,183
7,313
7,636
5,786

8,183
7,313
7,636
5,786

8,668

8,668

29,083

29,083

28,918

28,918

-192
2,082
1,773
380

-192
2,082
1,773
380

2,162
8,585
7,856
1,448

2,162
8,585
7,856
1,448

3,927
9,416
8,571
1,113

3,927
9,416
8,571
1,113

4,043

4,043

20,051

20,051

23,027

23,027

650
631
800
597

650
631
800
597

2,073
2.251
4,579
2,586

2,073
2.251
4,579
2,586

1,932
2.283
4.595
2,917

1,932
2.283
4,595
2.917

2,678

2,678

11,489

11,489

11,728

11,728

101
100
85
129

101
100
85
129

359
190
363
685

359
190
363
685

339
333
458
523

339
333
458
523

415

415

1.597

1,597

1,653

1,653

118
72
80
6

118
80
3

374
234
320
29

374
234
320
20

418
253
268
28

418
253
268
25

-1
88

-58
231

-58
231

67

67
1

-963
-17

1.626
-30

1,626
-31

2,195
-13

2,195
-14

(")
1
C')
2

(")

72
3

-1

...........

88

-963
-17

(")

(")

..

2
( )

1

..

(

)

2

.

. . . . ... . . .

41
37
18
-42

. ..........

Total-Department of Defense-Military

Current Fiscal Year to Date

-41
-37
-18
42

)

(.)

(

-73

-73

-137

..

(

5
3

186
158
180
14
245
551
88

-8

(")

9
3
106

109
12
-8

109
12

10

..

.............

17,811

58

17,752

9

-45

-186
- 158
-180
-14

..

)

..

(

)

7
13

(H)
10
-1
-45

162
271
166
75

-162
-271
-166
-75

104
832
37

104
832
37

-13
-860
-435

-13
-860
-435

-3

7

-7

)

(. 0)

25

-25

560

88,447

732

93,786

(

89,007

106

-137

..

..)

(

)

(")

(

)

..

(

17
12

245
551
88

3
(")

4

2

94,518

Table 5. Outlays of the U.S. Government, January 1994 and Other Periods-Continued
[$ millions)

Classification

This Month

Current Fiscal Year to Date

Prior Fiscal Year to Date

Gross IAPPlicable I Outlays
Outlays
Receipts

Gross IAPPlic.able I Outla s
Outlays
Receipts
y

Gross IAPPlicablel
Outlays
Receipts
Outlays

Department of Defense-Civil
Corps of Engineers
Construction. general
Operation and maintenance. general
Other
Propnetary receipts from the publiC

75
76
153

Total-Corps of Engineers

303

MIlitary retirement·
Payment to military retirement fund
Retired pay
MIlitary retirement fund
Intrabudgetary transactions
Education benefits
Other
Propnetary receipts from the public
Total-Department of Defense-Civil

Total-Office of Elementary and Secondary
Education
Office of Bilingual Education and Minority Languages
Affairs
Office of Special Education and Rehabilitative Services:
Special education
Rehabilitation services and disability research
Special institutions for persons with disabilities
Office of Vocational and Adult Education
Office of Postsecondary Education
COllege housing loans
Student financial assistance
Federal family education loans
Higher education
Howard University
Other

Total-Department of Education

........................

Department of Energy:
AtomIC energy defense actiVities
Energy programs'
General science and research activities
Energy supply. Rand D activities
Uranium supply and enrichment activities
Fossil energy research and development
Energy conservallOn
Strategic petroleum reserve
Nuclear waste disposal fund
Other
Total-Energy programs
Power Markettng Administration
Departmental admlnlstrallOn
Propnetary receipts from the publiC
Intrabudgetary transacllOns
Offsetting govemmental receipts
Total-Department of Energy

............................

11,908

11,908

12,273

12.273

8,788
-11,908
59
28

8,425
-12,273
64
21

4

8,788
-11,908
59
27
-4

1
3

8.425
-12,273
64
20
-3

56

10,123

10,009

62

9,946

292

1,303

2,200

58
58

1.441

1
13

2,509

10,179

438
28
113

438
28
113

7

7

2,203
589
476
5
24

2,203
589
476
5
24

2.162
463
526
5
23

2,162
463
526
5
23

585

585

3,296

3,296

3,180

3,180

25

25

75

75

59

59

278
201
14
121

278
201
14
121

975
761
45
431

975
761
45
431

887
668
46
493

887
668
46
493

-2
949
-1,238
101
17
-1

1
2,912
-246
271
67
4

24

-23
2,912
-246
271
67
4

3,037
1,635
293
69
4

2

-176

3,008

24

2,984

5,038

140
117
26

140
117
-26

128
117

9

44
19
-9

11

1,102

8,849

50

8,799

10,617

862

862

4,086

4,086

3,570

3,570

97
265
9
26
46
14
15
43

(' ')

97
265
9
26
46
14
15
43

452
1,028
201
133
168
67
92
138

452
1,028
201
133
168
67
92
138

474
882
361
130
148
112
105
74

474
882
361
130
148
112
105
73

516

(

516

2,279

2,279

2,285

2,285

142
41

121

619
149

43

174
149
-298
-152
-43

649
154

28

21
41
-150
8
-28

299

1,269

786

6,195

..

(

2,522

)

2

Office of Educational Research and Improvement
Departmental management
Proprietary receipts from the public

1,498

12

949
'-1,238
101
17
-1

Total-Office of Postsecondary Education

1,252

12

367
460
672
-58

10
8
-1

10
8

Department of Education:
Office of Elementary and Secondary Education:
Compensatory education for the disadvantaged
Impact aid
School improvement programs
Chicago litigation settlement
Indian education
Other

51

345
352
606

2,200

...................

367
460
672

51

345
352
606
-51

75
76
153
-12

-174
44
19
1,113

..)

150
8
1,568

10

444
298

-152
6,981

(

..

)

29

-29
3,037
1,635
293
69

29

5,009

12

128
117
-12

41

10,576

5

225
154
--679
-116
-5

1,110

5,434

424
679

-116
6,543

-

Table 5. Outlays of the U.S. Government, January 1994 and Other Periods-Continued
[$ millions]
This Month

Current Fiscal Year 10 Date

Prior Fiscal Year to Dale

Gross !APPlicablel Outlays
Outlays Receipts

Gross !APPlicabl1 0 II
Outlays Receipts
u ays

Gross !APPlic.ablej Outlays
Outlays
Receipts

Classification

Department ot Health and Human Services, except Social
Security:
Public Health Service:
Food and Drug Administration ...
. ...........
Health Resources and Services Administration ".
Indian Health Service
..............
Centers for Disease Control ....
National Institutes of Health
Substance Abuse and Mental Health Services
Administration
..................
Agency for Health Care Policy and Research ..
Assistant secretary for health ... ......... ,.

44
193
106
111
639

(")

44
193
106
111
639

235
667
552
482
3.324

234
667
552
482
3.324

234
609
504
424
2.913

166
8
-90

723
26
-30

723
26
-30

932
10
211

1.178

5.978

5.977

5.837

6.097
2.992

6.097
2.992

27.205
14.294

27.205
14.294

24.108
14.575

24.108
14,575

7.112
81

7,112
81

31.597
354

31.597
354

27.812
330

27,812
330

...............................

7.193

7.193

31.951

31.951

28.142

28.142

Federal supplementary medical insurance trust fund:
..... , .............
Benefit payments ..
Administrative expenses and construction ... , .........

4.009
161

4.009
161

18.927
577

18.927
577

16,897
393

16.897
393

4.170

4.170

19.504

19.504

17,289

17,289

-23

-23

40

40

193

193

20,429

20,429

92.994

92.994

84.307

84.307

1,559
64
137

1.559
64
137

2.564
263
7.856

2.564
263
7.856

3.062
268
7.102

3.062
268
7.102

1.760

1.760

10.683

10.683

10.432

10,432

1,421
226
42
38
69
6
67
239
467

1,421
226
42
38
69
6
67
239
467

5.497
1.030
135
121
262
579
259
897
1.389

5,497
1.030
135
121
262
579
259
897
1,389

5.156
625
115
140
234
41
87
987
1.238

5.156
625
115
140
234
41
87
987
1,238

195

195

950

950

731

..

731

'"

Total-PUblic Health Service .... ...........
Health Care Financing Administration:
Grants to States for Medicaid ..
Payments to health care trust funds

1.179

.............

'

Federal hospital insurance trust fund:
Benefit payments
Administrative expenses and construction
Interest on nonmalized tax transfers ......
Quinquennial transfers to the general fund from FHI
Total-FHI trust fund

Total-FSMI trust fund
Other

.... , .................

. ..............

Total-Health Care Financing Administration
Social Security Administration:
Payments to Social Security trust funds .....
Special benefits for disabled coal miners
Supplemental security income program
Total-Social Security Administration

166
8
-90

...........

..............

Administration for children and families:
Family support payments to States .................. ..
Low income home energy assistance ... , ..........
Refugee and entrant aSSistance .....
Community Services Block Grant ... , ....... , ...
Payments to States for afde work programs ..
Interim assistance to States for legalization ....
Payments to States for child care assistance ...........
Social services block grant ................. , . , .
Children and families services programs ... , .............
Payments to States for foster care and adoption
. .................
assistance ........ .. .........
Other ..
. ............. ......................
,

Total-Administration tor children and families ...
Administration on aging . ....................................
...........
Office of the Secretary
Proprietary receipts from the public . ............
Intrabudgetary transactions:
Quinquennial transfers to the general fund
From FHI. FOASI. and FDI ..................... ,
Payments for health insurance for the aged:
. . . . . . . . . .. .
Federal hospital insurance trust fund
Federal supplementary medical insurance trust fund ..
Payments for tax and other credits:
Federal hospital insurance trust fund ...........
Other ........
Total-Department of Health and Human Services,
except Social Security ................................

(

..)

(

2

232
609
504
424
2.913
932
10
211

2

5,835

..

)

(

)

2,771

2.771

11.119

11.119

9.353

9.353

101
21

101
21
-1.559

303
84

303
84
-5.736

159
63

159
63
-4.883

-2.991

-2,991

-14.294

-14.294

-14.579

-14,579

-1

·-1

-1

-1

4

4

21,710

106,867

101,130

95,576

1.559

23,269

1,560

11

5,736

5,737

4,883

4,884

90.691

Table 5.

Outlays of the U.S. Government, January 1994 and Other Periods-Continued
[$ millions]

This Month
Classification

Department of Health and Human Services, Social
Security (off-budget):
Federal old-age and survivors Insurance trust fund:
Benefit payments
Administrative expenses and construction
Payment to railroad retirement account
Interest expense on Intertund borrOWings
Interest on normalized tax transfers
QUinquennial transfers to the general fund from
FOASI
Total-FOASI trust fund
Federal disability Insurance trust fund:
Benefit payments
Administrative expenses and construction
Payment to railroad retirement account
Interest on normalized tax transfers
QUinquennial transfers to the general fund from FDI
Total-FDI trust fund
Proprietary receipts from the public
Intrabudgetary transactlOns 2
Total-Department of Health and Human Services,
Social Security(off-budget) ..............................
Department of Housing and Urban Development:
HOUSing programs:
Public enterpnse funds
Credit accounts:
Federal housing administration fund
HOUSing for the elderly or handicapped fund
Other
Rent supplement payments
Homeownershlp assistance
Rental hOUSing assistance
Rental hOUSing development grants
Low-rent public hOUSing
PubliC housing grants
College hOUSing grants
Lower Income housing assistance
SectIOn 8 contract renewals
Other
Total-HouSing programs
PubliC and Indian HOUSing programs:
Low-rent public housing-Loans and other expenses
Payments for operation of lOW-Income housing
proJects
Community Partnerships Against Crime
Total-PubliC and Indian Housing programs
Government NatIOnal Mortgage Association:
Management and liqUidating functions fund
Guarantees of mortgage-backed securities
Total-Government NatIOnal Mortgage ASSOCiation
Community Planning and Development:
Community Development Grants
Other
Total-Community Planning and Development
Management and Administration
Other
Propnetary receipts from the public
Offsetting governmental receipts
Total-Department of Housing and Urban
Development .............................................

IAPpli~ble
I
Receipts

Gross
Outlays

Current Fiscal Year to Date

Prior Fiscal Year to Date

IAppli~blel
Receipts

Gross IAPPlicable I
Outlays
Receipts
Outlay.

Gross
Outlays

Outlays

Outlays

23.054
43

23.054
43

90.617
507

90.617
507

86,499
644

86.499
644

23.097

23.097

91.124

91.124

87.143

87.143

2.983
71

2.983
71

11.741
294

11.741
294

10.749
271

10.749
271

3.054

3.054

12,035

12,035

11,020

11,020

(' ')

-1,559

(")

(")

-1,559

-2,560
(

..

(")

(")

-2,560

-3,064

)

100,599

95,099

(

..

)

24,592

(' ')

24,591

100,599

18

14

4

60

42

18

26

23

587
-5
36
4
8
54

1,030
57

-443
-62
36
4
8
54

2,270
369
154
18
36
216

2.364
233

-94
137
154
18
36
216

1,852
199

(")

(")

33
261
2
884
277
8

360
1,128
7
3,515
1,088
18

360
1 ,128
7
3,515
1,088
18

2,505
394
80
19
25
222
14
368
772
8
3,581
709
7

(")

33
261
2
884
277
8

(")

(")

-3,064

(")

95,098

653
196
80
19
25
222
14
368
772
8
3,581
709
7

2,169

1,102

1,067

9,237

2,639

6,599

8,728

2,074

6,655

6

(")

5

270

192

78

103

19

83

161
11

802
53

802
53

710
28

161
11

710
28

178

(")

177

1,125

192

933

841

19

822

116

4
143

-4
-27

415

4
539

-4
-124

424

2
546

-2
-122

116

147

-31

415

543

-128

424

548

-124

275
62

9

275
53

1 ,196
292

48

1 ,196
244

1,117
117

35

1,117
81

337

9

329

1,488

48

1,440

1.233

35

1,198

164
12
(")

88

164
12
-88

188
9

22

38
6
-22

85
3

188
9
-85
-3

1,279

1,564

12,442

3,510

8,932

11,423

2,764

8,659

38
6

2,843

12

-

Table 5. Outlays of the U.S. Government, January 1994 and Other Periods-Continued
($ millions]

This Month

Current Fiscal Year to Date

Prior Fiscal Year to Date

IApPlicabl~ f

Gross !APPlicableJ 0 tl
u ays
Outlays Receipts

Classification
Gross lAPPlicablel Outlays
OutllYs Receipts

Gross
Outlays

Receipts

Outlays

Department of the Interior:
Land and minerals management:
Bureau of Land Management:
Management of lands and resources ............. .
.. .. .. .. .. .. .
.. ................ .
Fire protection..
Other ...
.. ............ "........ .. .. " ...... ..
Minerals Management Service
Office of Surface Mining Reclamation and
Enforcement
Total-Land and minerals management
Water and sCience:
Bureau of Reclamation:
Construction program
Operation and maintenance
Other ..
Geological Survey ............... .
Bureau of Mines ................. " " ............. .

48

48
6

6
25
58

25
58

183
24
106
243

183
24
106
243

183
49
76
237

183
49
76
237

25

25

102

102

103

103

162

162

657

657

648

648

19
27
36
62

86
84
169
188

75

51

9

90
93
171
215
65

90
93
121
215

63

86
84
94
188
54

9

57

84

506

635

59

576

387

387

519

519

17

2

19
27
25
62
15

162

14

148

590

89
14

89
14

367
36

136

136

489

367
36
489

Total-FiSh and wildlife and parks

238

238

891

891

906

906

Bureau of Indian Affairs:
Operation of Indian programs
Indian tribal funds ... ,.. .. ........ .
Other .. .. ... .... .,," ......... .

192
38
20

511

511

459

459

16
159

3

16
155

28

2

192
38
18

95

4

91

Total-Bureau of Indian Affairs

250

2

248

686

3

683

581

4

577

26

26
7

148
39
584

148
39
-584

143

7

722

143
38
-722

-22

-5
(0 .)

r 0)

785

2,162

Total-Water and science
Fish and wildlife and parks:
United States Fish and Wildlife Service ............. .
National Biological Survey
..... , . , ..... , . ,
National Park Service " .....

Territorial and intemational affairs ..
Departmental offices ...........
.. ................. ..
Proprietary receipts from the public ........... . ........... .
Intrabudgetary transactions .... ".....
. .......... ..
Offsetting governmental receipts ........ .

Total-Department of the Interior

11

153
-1

845

168

-153

38

-1
("0)

-22

677

2,988

172
196
33
132
153

751
694
233
467
720

65

288

288

125

273

-1

-3

135

273
-3
-135

173

3,249

3,929

r

28

-5

0)

(0 .)

671

2,317

2,947
1,154

1,154

654

654

287

39

751
694
233
467
682

287
486
682
321

Department of Justice:
Legal activities
Federal Bureau 01 Investigation , .. .. . .. . ..
.. ........ " .
Drug Enforcement Administration , ..
Immigration and Naturalization Service ....... .
Federal Prison System ."...
. .... " ......... ..
Office of Justice Programs
................. .
Other .... " .. """.".",,. " " " " " "
Intrabudgetary transactions ....
Offsetting governmental receipts

Total-Department of Justice

172
196
33

132
163
65
125

10

-1

486
712
321
496
-180

30

129

496
-180
-129

158

3,771

53

-53

63

822

3,423

271
35

1,291

1.291

1.270

1,270

35

127

7

128
49

127

7

128
49

55

55

-32

-32

-43

-43

885

Department of Labor:
Employment and Training Administration:
Training and employment services .......... . ........... .
Community Service Employment for Older Amencans .,.
Federal unemployment benefits and allowances ........ .
State unemployment insurance and employment service
operations ."..........
. ..... " ......... " ...... .
Payments to the unemployment trust fund ........... .
Advances to the unemployment trust fund and other
funds ..... " ...... " ...................................... .

271

215

215

13

2.511

2.511

41

41

3,220

3,220

250

250

Table 5.

Outlays of the U.S. Government, January 1994 and Other Periods-Continued
[$ millions]

This Month
Classification

Department of Labor:-Continued
Unemployment trust fund
Federal-State unemployment Insurance
State unemployment benefits
State administrative expenses
Federal administrative expenses
Veterans employment and training
Repayment of advances from the general fund
Railroad unemployment Insurance
Other
Total-Unemployment trust fund
Other
Total-Employment and Training Administration
PenSion Benefit Guaranty Corporation
Employment Standards Administration:
Salanes and expenses
Special benefits
Black lung disability trust fund
Other
Occupational Safety and Health Administration
Bureau of Labor Statistics
Other
Propnetary receipts from the public
Intrabudgetary transactions

Gross IAPPlicable I Outlays
Outlays
Receipts

Current Fiscal Year to Date

Prior Fiscal Year to Olte

IAPPli~blel
Receipts

Gross IAPPlicablel
Receipts
Outlays
Outlays

Gross
Outlays

Outlays

2,801
286
-67
16

2,801
286
-67
16

10,382
1,146
45
59

10,382
1.146
45
59

11,954
1,124
40
56

11,954
1,124
40
56

6

6

23
7

23
7

23
7

23
7

3,044

3,044

11,662

11,662

13,203

13,203

10

10

28

28

24

24

3,551

3,551

15,626

15,626

18,190

18,190

18

540

507

256

23
8
46
9
27
19
29

75
-549
196
46
93
78
142

75
-549
196
46
93
78
142
-1
-2,701

74
-522
201
45
88
101
127
-3,719

13,511

14,841

67
23
8
46
9
27
19
29

349

..

(

)

33

(' ')

369

-113
74
-522
201
45
88
101
127
-1
-3,719

-221

-2,701

3,508

13,545

187
49

187
49

617
204

617
204

724
178

724

35
12

35
12

125
138
46

125
138
46

119
134
36

119
134
36

Total-Administration of Foreign Affairs

283

283

1,130

1,130

1,191

1,191

Intematlonal organizations and Conferences
Migration and refugee assistance
Intemational narcotics control
Other
Propnetary receipts from the public
Intrabudgetary transactions
Offsetting govemmental receipts

116
44
9
5

116
44
9
5

1,093
209
39
19

1,093
209
39
19

832
233
42
32

832
233
42
32

-51

-51

-176

-176

-165

-165

407

407

2,315

2,315

2,165

2,165

1,232
12
17

1,232
12
17

6,095
39
103

6,095
39
103

5,300
47
71

5,300
47
71

1,260

1,260

6,237

6,237

5,418

5,418

19

19

87

87

80

80

105
34

105
33

319
129

4

319
125

262
123

6

262
117

138

138

448

4

444

385

6

380

Total-Department of Labor

.............................

Department of State:
Administration of Foreign Affairs:
Salaries and expenses
Acquisition and maintenance of buildings abroad
Payment to Foreign Service retirement and disability
fund
Foreign Service retirement and disability fund
Other

Total-Department of State ..............................
Department of Transportation:
Federal Highway Administration:
Highway trust fund
Federal-aid highways
Other
Other programs
Total-Federal Highway Administration
NallOnal Highway Traffic Safety Administration
Federal Railroad Administration:
Grants to NallOnal Railroad Passenger Corporation
Other
Total-Federal Railroad Administration

-221
3,557

49

14

34

370

14,472

178

Table 5, Outlays of the U,S, Government, January 1994 and Other Periods-Continued
[$ millions]
This Month

Current Fiscal Year to Date

Prior Fiscal Year to Date

Gross jAPPlicable j Outlays
Oullays
Receipts

Gross [APPlicab'i 0 II
Outlays
Receipts
u ays

Gross jAPPlicablej 0 tl s
Outlays
Receipts
u ay

Classification

Department of Transportation:-Continued
Federal Transit Administration:
Formula grants .
Discretionary grants
Other
Total-Federal Transit Administration
Federal Aviation Administration:
Operations . . . . . ., " ' "
Airport and airway trust fund:
Grants-in-aid for airports ..
Facilities and equipment
Research. engineering and development
Operations . . . . , .. , , . . , . , , ,
Total-Airport and airway trust fund
Other
Total-Federal Aviation Administration
Coast Guard:
Operating expenses
Acquisition. construction. and improvements .....
Retired pay
.............
Other
. .... .. .. ...
Total-Coast Guard
Maritime Administration
Other
Proprietary receipts from the public .
Intrabudgetary transactions ........
Offsetting governmental receipts

...........

-525
142
463

-525
142
463

-268
511
1,337

-268
511
1,337

544
439
129

544
439
129

79

79

1,580

1,580

1,112

1,112

120

120

683

683

628

628

124
252
17
191

124
252
17
191

624
707
67
765

624
707
67
765

743
599
58
760

743
599
58
760

584

584

2,162

2,162

2.160

2,160

(* ')

(

..)

(")

(")

(")

(* ')

(")

(

704

704

2.845

(' ')

2,845

2,788

(' ')

2,788

145
34
38
28

814
97
152
55

2

814
97
152
53

822

(

145
34
38
28

245

(

)

245

1.117

2

26

57
-1

280
126

82
1

..

13

83
-1

..)

..

(")
(' ')

(")

-1

........... , ..

Total-Department 01 Transportation

..... .............
~

Department of the Treasury:
Departmental offices
Exchange stabilization fund . . . . . . . . . . . .
Other
Financial Management Service:
.....................
Salaries and expenses
Payment to the Resolution Funding Corporation ......
Claims. judgements. and relief acts
................
Other ...
Total-Financial Management Service

...........

...........
Federal Financing Bank .........
Bureau of Alcohol, Tobacco and Firearms:
Salaries and expenses
Intemal revenue collections for Puerto Rico ..
United States Customs Service ......
Bureau of Engraving and Printing ....
.. , ........
United States Mint
..... , .....
., ...........
Bureau of the Public Debt
Internal Revenue Service:
Processing tax returns and assistance
Tax law enforcement
.................
.... , ......
Information systems
Payment where earned income credit exceeds liability
for tax
Health insurance supplement to earned income credit
Refunding internal revenue collections, interest
Other
Total-Internal Revenue Service .....

(")
( )

..

)

822

77

77

149
56

149
2

54

1.115

1.105

2

1,103

358
139

124
4

2

198
126
-1
13
-2

29

235
135
-1
-3
-29

-3

2,498

12,733

91

12,642

11,383

165

11,218

-86
12

-87
12

-280
84

4

-283
84

-293
101

4

-297
101

22
577
7
16

22
577
16

70
1.164
123
56

70
1.164
123
56

75
1.164
130
76

75
1,164
130
76

622

622

1,414

1,414

1,445

1.445

-114

-114

224

224

224

224

27
21
149
22
-11
18

27
21
149
22
-11
18

119
78
594
-2
-19
91

119
78
594
-2
-19
91

119
75
574
13
37
93

119
75
574
13
37
93

112
293
74

112
293
74

454
1,178
311

454
1,178
311

513
1,219
378

513
1,219
378

4218
413
84
13

218
13
84
13

252
20
873
49

252
20
873
49

251
17
597
39

(")

251
17
597
39

807

807

3,137

3.137

3,014

(")

3,014

2,528

30

7

15

,Ie 5.

Outlays of the U.S. Government, January 1994 and Other Periods-Continued
[$ millions]
-.--

This Month
ClaSSIfication

Gross
Outlays

Applicable
Receipts

I

Current Fiscal Year to Date
Outlays

Gross
Outlays

jApplic.able I Outla
Receipts

Prior Fiscal YeaT to Date

;

..,
y

s

Gross
Outlays

Applicable
Receipts

Outlays

i

:
Brtment of the Trea5ury:-Contlnued
Siaies S~rel Service
)mplroller of the Currency
Iflee 01 Thrift Supervlson

164
26
-15

179
123
81

68.813
41.696

68,813
41,696

69,292
40,932

40,932

17,899

110,509

110,509

110.224

110,224

4
192

21
394

21
-394

19

5-192

-950
-52

-3,442
249

-3,442
-249

-4.588

52
18,588

99

18,489

112,957

902

112,056

1,465
55

21

1.465
35

4,919
232

91

247
78
3
61
66
3

535
509
214
5.615
389
30

98
1
13
-1

383
6
45
-19

569
46
100

46
52
-63

164
201
65

17.384
514

17,384
514

17.899

46
110
12

111(Cd

terest on the public debt
Public Issues (accrual baSIS)
SpeCial Issues (cash baSIS)
Total-Interest on the public debt

~

.....................

)artment 01 Veterans Affairs:
eterans Health Administration
Medical care
Other
'eterans Benefits Administration
Public enterprise funds
Guaranty and Indemnity fund
Loan guaranty revolVing fund
Other
Compensation and pensions
Readjustment benefits
Post· Vietnam era veterans education account
Insurance funds
National service lite
United States government life
Veterans speCial life
Other

58
37
11

98
1
16
678
46
100

29

.. )

(

..)

54

2,344

213

(

.......... , ......

,vironmental Protection Agency:
Program and research operations
Abatement. control. and compliance
Water Infrastructure finanCing
Hazardous substance superfund
Other
Proprietary r~elpts from the publiC
Intrabudgetary transactions
Offsetting governmental receipts

63
123
191
72

272

.. )

(

15
-250

.. )

(

...............

Total-Environmental Protection Agency
eneral Services Administration:
Real property actiVities
Personal property actiVities
Information Resources Management Service
Federal property resources actiVities
Gene'al actiVities
P'opTietarv r~elpts from the publiC

471
~638

4
24
2
-49

15

..

..........,.

·657

~

67

69,292

238

-4,588
-238

111,439

883

110,556

4.919
141

4,497
235

85

282
353
95
5.615
389
30

202
639
165
5,477
314
38

91

383
6
-46
-19

315
6
40
-13

7,708

619

7.089

7.182

540

216
532

C')

216
532

188
379

( )

lBB
379

-29

118

(

..)

-118

135

..)

-135

(

~54

229

-229
-8

198

-19B

-6

12,543

12,476
302
425
682
439
129

3

266
409
693
417
381
-62
-250
-3

67

1,850

1,977
-182
-50
-15
7
( )

..

("I

2

-513
-86
71
9
-3
-2

2

-524

-240

-241

..)
(.. )

-8

2,132

13,600

63
123
191
72
272
-15
-250

266
409
693
417
383

.. )

-250

456

1,917

-638
4
24

-513
-86
71
9
-3

(

2

-49
-1

,

179

90
14

19
-538

3
109

176
80

538

-1

:onstructlon
Jepartmental administration
"roprletary r~elpts from the publiC
National service life
United States government life
Other
Intrabudgetary transactions

Total-General Services Administration

950

305
115
14
61
66
3

Total-Veterans Benefits Administration

Total-Department 01 Veterans Affairs

~

4

ther
roprletary r~elpts from the publiC
~elpls Irom ott-budget federal entities
Ilr abudgetary transactions
Iflsetllng governmental receipts
Total-Department 01 the Treasury

162
76

-658

-522

253
156
119

1,057

2
62

(•• J

4,497

128
181
147

150

74

458
18
5.477
314
38

85

..

(

315
6
-45
-13
6,643

n

-6
957

11,519
302
425
6B2

439
114

15
62

~2

3

-3

80

1,898
-182
-50
-15

-1

Table 5. Outlays of the U.S. Government, January 1994 and Other Periods-Continued
[$ millions}

This Month

Current Fiscal Year to Dale

Prior Fiscal Year to Date

Gross !APPlicable!
Outlays Receipts Outlays

Gross !APPlicable! 0 tl
u ays
Outlays Receipts

Gross !APPlicable! 0 tl
Outlays Receipts
u ays

Classification

National Aeronautics and Space Administration:
Research and development """""'"
............. .
Space flight, control, and data communications ........... .
Construction of facilities
Research and program management ....................... .
Other ..................................... ..

Total-National Aeronautics and Space
Administration ........................................... .

454
400
38
122

454
400
38
122

2,218
1,627

2,311

152
498
5

2,218
1,627
152
498
5

1.015

1.015

4.500

4.500

4.773

4.773

372

372

1,245

1,245

1,165

1,165

2,979

11,873
4,882
453

11,873
5,134

813

-252
-359

11,297
4,651
430

0)

3

3

(oo)

3

7

47

47

57

57

-3

-11

-11

-15

-15

1.418

3.249

18.492

5.949

12,542

17.588

5,597

11.991

10

33

-23

224

301

-26

80

-34

204

(+OJ

10

42

(")

42

159

(' 0)

6
159

20
161

264
166
6

38

1

153
114
5

71

26
1

(0 0)

161

53

60

-7

474

272

202

686

436

250

15
17

40
67

40
67
275

83
319

698

698

-6
79

864

1

2,311
1,753

1,753
200
505
5

200
505
5

Office 01 Personnel Management:
Govemment payment for annuitants, employees health
and life insurance benefits .......... .................... ..
Payment to civil service retirement and disability fund .... .
Civil service retirement and disability fund
Employees health benefits fund ............ .
Employees life insurance fund
Retired employees health benefits fund
Other ................... ..
Intrabudgetary transactions:
Civil service retirement and disability fund:
General fund contributions ............. .
Other ............ ..

Total-Office of Personnel Management

2,979
1,198

1,252

-54

114

165

-51

1
7

-3
4.668

to

11,297
4,819
775
3

-169
-345
(oo)

Small Business Administration:
Public enterprise funds:
Business loan fund ...... .
Disaster loan fund ...... .
Other ...................... .

Other .................. .
Total-Sma" Business Administration
Other independent agencies:
Action ...
.. .................................. ..
Board for International Broadcasting ............... .
Corporation for Public Broadcasting ............... .
District of Columbia:
Federal payment .................................. .
Other .................................................. .
Equal Employment Opportunity Commission ........... .
Export-Import Bank of the United States ..
Federal Communications Commission
............ .
Federal Deposit Insurance Corporation:
Bank insurance fund
.. .
.. .........
Savings association insurance fund
FSLlC resolution fund ........ .
Affordable housing and bank enterprise .
Federal Emergency Management Agency:
Public enterprise funds ........ " .. , . . . . .
. ........... .
Disaster relief .............................
.. .......... ..
Emergency management planning and assistance
Other
......... ..
Federal Trade Commission
Interstate Commerce Commission ........ . ......... .
Legal Services Corporation ............... .. .............. ..
National Archives and Records Administration .
National Credit Union Administration:
Credit union share insurance fund .....
Central liquidity facility .... .. .. .. .. .. .. .. ............. ..
Other ........................ ...... .

r 0)

15

17

275

3

1,094
12

-754

29

43

11

992

2,896

-9

4,928
18

-1,033

-93

23
1,082

-1,904
-17

3,895

6
857

-225

763

582

181

-1

(oo)

-20
250

209
715

98
689

146

22
37

87
85

-48
689
60

8
5

30
14

33

130
67

23

(0 0)

190
2

8

192
-3
35

644
21
128

-452
-25

31

37
8
5
33
27

to

0)

27

-6

155

-161

4

4

-4

43

17

73
83
319

73

2
72
366

33
10

11
250
22

15

698
6
79
340
40

3
23
-157

-1

37

9
30

-47

3

12
(+0)

24
(+OJ

698
-22
72
-498
32

-27

(+0)

97

112

715
87

(+OJ

182
30
44

85
30
14
130
67
-173

-41

60
100

100

29
14
118
86

(+OJ

86

57

288

-231

46

46

29
14
118

43

-42

Ie 5.

Outlays of the U.S, Government, January 1994 and Other Periods-Continued
[$ millions]

-_.

Cia SSlltcahon

Gross \APPlicable
Receipts
Outlays

r Independent agencles:-Continued
',I('lf'ld' EnOl",Vment lor the Ans
t',_'Pd l Endowmerot lor the Humanities
h,Y'dl Lat:>or Relations Board
I.'l)r\dl S':lence Foundation
"lear Regulatory CommisSion
"ami] Canal CommiSSion
1,1JI Service
Put)IIC enterprise fundS (off-budget)
F\l\ r'lent to the Postal Service fund

14
12
18
186
50
51
3.948
23

lilroad Retirement Board
Federal windfall subSidy
Federal payments to the railroad retirement accounts
Regional rail transponatlon protective account
Rail Industry pension lund
Advances Irom FOASDI fund
OASDI cenlflcatlOns
Administrative expenses
Interest on refunds of taxes
Supplemental annUity pension fund
Other
Intrabudgetary transactions
SOCIal Security equivalent benefit account
Payments from other funds to the railroad
retirement trust funds
Other

32
50
63.754

Gross \APPlicable
Outlays
Receipts

Outlays

Gross !APPlicable
Outlays
Receipts

Oullays

62
48
58
742
144
166

-·406
85

16.166
100

92
25

92
25

98
30

98
30

("J

(" 'J

(' 'J

(")

-359
359
26
18
966
3

-359
359
26
18
966
3

-348
351
26
5
951
4

-348
351
26
5
951

63
51
59
786
166
176

194
23

16.358
85

23
13

..)

Outlays

63
51
59
786
15
10

14
12
18
186
18
2

23
13

..)

Prior Fiscal Year to Dale

Current Fiscal Year to Date

This Month

151
186
16.764

62
48

58
742
45

189
175

9

16.617

452
100

(

(

-91
92
7

-91
92
7

247

247

397

397

1.568

1.568

1.554

1.554

-13

-13

-25

-25

-30

-30

Total-Railroad Retirement Board

675

675

2.673

2.673

2.641

2.641

esolutlon Trust Corporation
eCUritles and Exchange CommiSSion
mlthsonlan Institution
ennessee Valley AuthOrity
nlted States Information Agency
Ither

903

-74

4.886

204

450

1.235
47
87
586
360
562

7,480
31
129
2.907
347
524

15.645

20
212
108
273

6.121
47
87
3.220
360
1.012

68

-8.164
31
129
832
347
456

6,715

1,188

36,042

30,543

5,499

39,147

41,720

-2,573

.. )

( )

..

( )

Total-Other independent agencies

20
692
108
477

....................

7,903

listributed oHsetting receipts:
)ther Interest
mployer share. employee retirement.
Leglslatlye Branch
United States Tax Courl
Tax coun Judges survivors annuity fund
The JudiCiary
JudiCial survlyors annuity fund
Department of Defense-CIvil
Military retirement fund
Depanment of Health and Human Services. except
SOCIal Security
Federal hospital Insurance trust fund
Federal employer contributions
Postal Service employer contnoutlons
Paj ments for military service credits
Department of Health and Human Services. SOCIal
Security loff-budget!
Federal old-age and survlyors Insurance trust fund
Federal employer contributions
Pa,ments lor military service credits
Federal disability Insurance trust fund
Federal employer contributions
Pa)ments lor military service credits
Department of State
FlVelgn Ser-.lce retirement and disability fund
Ott c-e 01 Personnel Management
C \ ,I ser-. 'ce retirement and disability fund
'C' :e[\e~dent agenCies
C0 .. 0: of,eterans appeals retirement fund
-,- __->:21

-E~D!J\er

S'Iar€

977

10

10

emplo'iee retirement

480

(

..

2.634

..

( )

("J

(

.. )

..

2.075
(")

(

)

..

..

("J

( )

(<0)

( )

-1.053

-1.053

-4,245

-4.245

--4.393

-4.393

-159
-37

-159
-37

-634
-146

-634
-146

-605
-152

-605
-152

-519

-519

-1.794

-1.794

-1.696

-1.696

-56

-56

-194

-194

-181

-181

-9

-9

-34

-34

-35

-35

-770

-770

-3.167

-3.167

-3094

-309 A

2.601

-2.601

-10.214

--10.214

10.156

-10156

Table S. Outlays of the U.S. Government, January 1994 and Other Periods-Continued
[$ millions]
This Month

Current Fiscal Year to Date

Prior Fiscal Year to Date

Gross /APPlicable I
Outlays
Outlays Receipts

Gross IAPPlicable/ 0 tl
u ays
Outlays Receipts

Classification
Gross IAPPlicable
Outlays Receipts

1

Undistributed offsetting receipts:-Continued
Interest received by trust funds:
The Judiciary:
Judicial survivors annuity fund ..................
Department of Defense-Civil:
Corps of Engineers
Military retirement fund
..............
Education benefits fund ....
. ...... , ....
Soldiers' and airmen's home permanent fund ..
Other ........................ .....................
Department of Health and Human Services, except
Sooal Security:
Federal hospital insurance trust fund ...... ............
Federal supplementary medical insurance trust fund ..
Department of Health and Human Services, Social
Security (off-budget)
Federal old-age and survivors insurance trust fund
Federal disability insurance trust fund .. ................
Department of Labor:
.. ,., ....... ............
Unemployment trust fund
Department of State:
Foreign Service retirement and disability fund ....
Department of Transportation:
Highway trust fund .. _...
...............
Airport and airway trust fund
...........
Oil spill liability trust fund ....
Department of Veterans Affairs:
National service life insurance fund
United States government life Insurance Fund ........
Environmental Protection Agency
............
National Aeronautics and Space Administration
Office of Personnel Management:
Civil service retirement and disability fund ..
Independent agencies:
Railroad Retirement Board
Other.
..................
Other ...
Total-Interest received by trust funds ................

Outlays

-5
-4,844
-18
-4

-4
-4,603
-19
-8

-4
-4,603
-19
-8

(")

(. 0)

(

-20
-13

-20
-13

-5,269
-1,015

-5,269
-1,015

-5,210
-881

-5,210
-881

-17
-2

-17
-2

-13,678
-366

-13,678
-366

-12,475
-499

-12.475
-499

-7

-7

-1,264

..

-1,264

-1,327

-1,327

)

-280

-280

-267

-267

-6
-2

-707
-418

-746
-554
-3

-746
-554
-3
-538
-5

..

(

)

(

-6
-2

..

(

)

(

..

)

(0 0)

(" 0)

)

-2

( )
(H)
( )

-537
-5

-537
-5

-538
-5

)
)

(0)

(")

(

(

..
..
..

(

r 0)

..)

-707
-418
-2

....

(
(

....

)
)

(
(

..

..

)

)

-2

-2

-12,910

-12,910

-12,388

-12,388

-133
-1

-133

-320
-4
-31

-373
-4
61

-373
-4
61

-41,682

-39,847

-39,847

..

)

(0 *)

-320
-4
-31

-122

-122

-41,682

(

-1

-2,723

313

-3,036

123,216

15,861

...........................................

95,271

12,107

Total off-budget , ............................. , .... , .... , ..

27,945

3,754

Total on-budget

-4

-5
-4,844
-18
-4

-313

Total outlays"",,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, """"

-4

-4
81
-1
4

313

................

--4

-4
81
-1
4

Rents and royalties on the outer continental shell lands ..
................................
Sale of major assets ....
Total-Undistributed offsetting receipts

-4

940

-940

-51,896

940

-52,836

107,355

549,929

63,328

83,164

449,004

46,563

24,192

100,925

16,764

752

-752

-50,003

752

-50,755

486,601

541,617

73,126

468,492

402,440

445,204

56,508

388,697

84,161

96,413

16,618

79,795

................................

+15,613

-76,442

-90,648

...........................................

+11,234

-93,758

-102,727

Total off-budget " ..• ',.,"""""""',.,.,."."., •.. ',.

+4,379

+17,315

+12,079

Total surplus (+) or deficit
Total on-budget

MEMORANDUM
Receipts offset against outlays

[$ millions]

Current
Fiscal Year
to Date
Proprietary receipts .............................................. .
Receipts from off-budget federal entities ............ , .... , ..... .
Intrabudgetary transactions ................................. .
Governmental receipts ..... . . . . . . . . . . . . . . . . . . . ................ .
Total receipts offset against outlays .................... .

Comparable Period
Prior Fiscal Year

14,104

13,908

86,826
585
101,515

89,095
627
103,630

'Includes $383 million of unclassified January payroll charges
'The Postal Service accounting is composed of thirteen 28-day accounting periods. To
confonn with the MTS calendar·month reporting baSIS utilized by all other Federal agencies. the
MTS reflects USPS results through 117 and estimates for $1,495 million through 1/31.
. No Transactions.
(0 'J Less than $500.000
Note· Details may not add to totals due to rounding

'InCludes $2.000 million in receipts from the Student Loan Marketing ASSOCiation in
prepayment of Federal Financing Bank loans.
'Jncludes FICA and SECA tax credits, non-contributory military service credits, special benefits
for the aged, and credit for unnegotiated OASI benefit checks.
31nCludes a decrease in net outlays of $25 million for amortization of zero coupon bonds.
'This amount is partially estimated and will be adjusted pending further analysis of the
aCCOunting data.

19

Table 6.

Means of Financing the Deficit or Disposition of Surplus by the U.S, Government, January 1994 and Other PeriOds
[$ millions]

Assets and Liabilities
Directly Related to
Budget Off·budget Activity

Net Transactions
(-) denotes net reduction of either
liability or asset accounts

Account Balances
Current Fiscal Year
Beginning of

Fiscal Year to Date
This Month
This Year

liability accounts:
Borrowing from the public
Public debt secuntles. ISSUed under general Financing authontles:
Obligations of the United States. ISSUed by
United States Treasury
Federal FinanCing Bank
Total. publiC debt sec unties
Plus premium on public debt seCUrities
Less discount on public debt sec unties
Total public debt secunties net of Premium and
discount

Deduct:
Federal secunties held as investments of government accounts
(see Schedule D)
Less discount on federal securities held as Investments of
government accounts
Net federal securities held as investments of government
accounts

) This Month

This Year

Prior Year

-9,379

114,819

102,580

4,396,489
15,000

4,520,687
15,000

4,511,308
15,000

-9,379

114,819

102,580

4,411,489

4,535,687

4,526,308

-8
-617

33
-6,534

-20
-579

1,373
86,397

1,414
80,480

1,406
79,864

-8,771

121,385

103,139

4,326.466

4,456,622

4,447,852

-98

1,832

435

24,682

26,613

26,514

4,483,235

4,474,366

Agency secuntles, ISSUed under special financing authorities (see
Schedule B for other Agency borrowing, see Schedule C)
Total federal secunties

I

Close of
This month

-8,869

123,217

103,575

4,351,149

-2,029

34,743

30,246

1,116,740

1,153,512

1,151,483

-93

-6.129

-189

12,709

6,672

6,579

-1,936

40,872

30,435

1,104,032

1,146,840

1,144,904

-6,933

82,345

73,140

3,247,117

3,336,395

3,329,462

Accrued Interest payable to the public
AllocallOns of special drawing rights
Deposit funds
Miscellaneous liability accounts (includes checks Outstanding etc)

4,691
35
70
-1,561

4.036
-185
-1,268
-4,078

6.966
-446
-154
-3.667

43,819
6.950
5.975
2.928

43,163
6,730
4,637
410

47,854
6,765
4,707

-1,150

Total liability accounts ............... " ....... , .......................... .

-3,698

80,850

75,838

3,306,788

3,391,335

3,387,638

6,732
1,358

4,252
1,054

-15,014
2,551

17,289
35,217

14.809
34,914

21,541
36,271

8,090

5,306

-12,463

52,506

49.723

57,812

47

-133

-3,565
2.000

9,203
-8,018

9,023
-8,Q18

9,070
-8,018

47

-133

-1.565

1,185

1,005

1,052

126

-1,001
78
45

12,063
-1,797
-9,079
-27

31,762
5,864
-25,514

31,762
4,737
-25,435
-106

31,762
4,863
-25,436
-53

Total borrowing from the public

Asset accounts (deduct)
Cash and monetary assets:
U.S. Treasury operating cash l .
Federal Reserve account
Tax and loan note accounts
Balance
Special drawing rights:
Total holdings
SDR certificates issued to Federal Reserve banks
Balance
Reserve position on the U.S quota in the IMF:
U.S subscription to International Monetary Fund:
Direct quota payments
Maintenance of value adJustments
Letter of credit issued to IMF
Dollar deposits with the IMF
Receivable/Payable (-) for interim maintenance of value
adlustments

-1

53

-98

-85

678

1,153

90

853

768

93

-200

2,313

12,103

11,811

11,904

Loans to International Monetary Fund
Other cash and monetary assets

)

(")

3,251

3,305

-175

22,414

22,468

25,719

Total cash and monetary assets

11,480

8,279

-11,890

88,208

85,007

96,487

497
175
800

-1,947
1,023
-2,727

-1,170
1.027
-2,679

-6.320
6,862
-636

-7,769
7,710
-4,164

-8,266
7,885
-3,363

11,958

4,629

-14,713

88,114

80,785

92,743

15,656

+76,221

+90,551

+3,310,551

+3,294,895

43

221

97

178

221

-15,613

+76,442

+90,648

+3,310,729

+3,295~

Balance

Net activity. guaranteed loan finanCing
Net activity. direct loan finanCing
Miscellaneous asset accounts

Total asset accounts
Excess of liabilities (+) or assets (-)
Transactions not applied to current year's surplus or deficit (see
Schedule a for Details)

Total budget and off-budget federal entities (financing of deficit (+)
or disposition of surplus (-)) ............................................. .

..

(

'Ma,Of sources of Information used to determine Treasury s operating cash Income Include the
Daily Balance Wires from Federal Reserve Banks re~rtlng from the Bureau of Public Debt
electronIC transfers through the Treasury FinanCial Communication System and reconCIling wires
from Internal Revenue Centers Operating caSh IS presented on a mOdified cash basIs. depoSits
are reflected as recetved and withdrawals are reflected as processed

)

+3,218,674

+3,218,674

No Transactions
(' 'j Less than $500,000

Note Detruls may not add to totals due to rounding

20

..

(

Table 6. Schedule A-Analysis of Change in Excess of Liabilities of the U.S. Government, January 1994 and
Other Periods
[$ millions]
Fiscal Year to Date
Classification

This Month
This Year

...

Excess of liabilities beginning of penod:
Based on composition of unified budget in preceding period
Adjustments during current fiscal year for changes in composition
of unified budget:
Reclassification of the Disaster ASSistance Liquidating Account.
FEMA. to a budgetary status ................................. .
Revisions by federal agencies to the prior budget results .... .
ReclaSSification of Thrift Savings Plan Clearing Accounts to a
non-budgetary status ........................................... .
Reclassification of Deposit in Transit Differences (Suspense)
Clearing Accounts to a budgetary status ...... .
Excess of liabilities beginning of period (current basis)

3.310.551

1

3.218.965

Prior Year

2.964.066

r ')
-291

101

..)

(

174
3.310.551

3.218.674

2.964.341

Budget surplus (-) or deficit:
Based on composition of unified budget in prior fiscal yr .......... .
Changes in composition of unified budget ................. .

-15.613

76,442

90.648

Total surplus (-) or deficit (Table 2) .................................

-15.613

76,442

90.648

-4.379

-17.315

-12.079

-43

-221

-97

-43

-221

-97

3,294,895

3,294,895

3,054,892

Total-on-budget (Table 2)

=====================
102.727
-11.234
93.758

Total-off-budget (Table 2) ..............................................
Transactions not applied to current year's surplus or deficit
. ....................... .
Seigniorage
. . . . .. ...........
Total-transactions not applied to current year's Surplus or
deficit.............
. ....................... .

Excess of liabilities close 01 period .. , ...... " ....................... .

Table 6. Schedule 8-Securities isued by Federal Agencies Under SpeCial Financing Authorities, January 1994 and
Other Periods
[$ millions]
Net Transactions
(-) denotes net reduction of either
Liability accounts

Account Balances
Current Fiscal Year

Classification
Beginning of

Fiscal Year to Date
This Month

I

This Year

This Year

Prior Year

I

Close of
This month

This Month

..

Agency securities, issued under special finanCing authontles:
Obligations of the United States. issued by:
Export-Import Bank of the United States
Federal Deposit Insurance Corporation:
Bank insurance fund ..
FSLlC reSOlution fund
............. .
Obligations guaranteed by the United States. issued by:
Department of Defense:
Family housing mortgages ........................... .
Department of Housing and Urban Development:
Federal Housing Administration ...................... .
Department of the Interior:
Bureau of Land Management ............................. .
Department of Transportation:
Coast Guard:
Family housing mortgages
.......................... .
Obligations not guaranteed by the United States. issued by:
Legislative Branch:
Architect of the Capitol .................................... .
Independent agencies:
Farm Credit System Financial Assistance Corporation ..... .
National Archives and Records Administration ............. .
Tennessee Valley Authority ........................... .

-145

..

(

)

-175

-145

..)

(

-133

5

Total, agency securities .. " ... , .... , .. , ............. , ............ ,
... No Transactions
(' ') Less than $500.000.
Note: Details may not add to totals due 10 rounding.

21

(

..)

(' .)

(

-194

93
943

93
943

93
797

..)

7

6

6

-71

213

255

80

13

13

13

(

..

..)

..

r ')

(

5

176

180

182

1.261
302
23.560

1.261
302
23.780

26,613

26,514

220

2.105

695

1.261
302
21.675

-98

1,832

435

24,682

)

(

)

Table 6.

Schedule C (Memorandum)-Federal Agency Borrowing Financed Through the Issue of Public Debt Securities,
January 1994 and Other Periods
[$ millions]
Account Balances
Current Fiscal Year

Transactions
Classification

Beginning of

Fiscal Year to Date

l

This Month
This Year
Borrowing from the Treasury:
Funds Appropriated to the PreSident'
Intematlonal Security ASSistance:
Guaranty reserve fund
Agency for Intematlonal Development:
HOUSing and other credit guaranty programs
Overseas Private Investment Corporation
Department of Agriculture'
Foreign assistance programs
Commodity Credit Corporation
Farmers Home Administration:
Agriculture credit Insurance fund
Self-help hOUSing land development fund
Rural hOUSing Insurance fund
Rural Development Administration:
Rural development Insurance fund
Rural development loan fund
Federal Crop Insurance Corporation:
Federal crop Insurance corporation fund
Rural Electnflcatlon Administration:
Rural commUnication development fund
Rural electrification and telephone revolving fund
Rural Telephone Bank
Department of Commerce'
Federal ship financing fund, NOAA
Department of Education'
Guaranteed student loans
College hOUSing and academiC facilities fund
College housing loans
Department of Energy:
Isotope production and distribution fund
BonneVille power administration fund
Department of Housing and Urban Development:
HOUSing programs'
HOUSing for the edeny and handicapped
Public and Indian hOUSing:
Low-rent public housing
Department of the Intenor'
Bureau of Reclamation Loans
Bureau of Mines, Helium Fund
Bureau of Indian AffairS'
Revolving funds for loans
Department of Justice'
Federal prison Industries, Incorporated
Department of Transportation'
Federal Railroad Administration:
Railroad rehabilitation and Improvement
finanCing funds
Settlements of railroad litigation
Amtrak corndor Improvement loans
Regional rail reorganization program
Federal AViation Administration
Aircraft purchase loan guarantee program
Department of the Treasury'
Federal FinanCing Bank revolving fund
Department of Veterans AffairS'
Loan guaranty revolving fund
Guaranty and Indemnity fund
Direct loan revolving fund
Vocational rehabilitation revolving fund
EnVIronmental Protection Agency
Abatement, control, and compliance loan program
Small BUSiness Administration
BUSiness loan and revolving fund

Prior Year

This Year

I This Month

Close 01
This monlh

348

348

348

125
8

125
8

125
16

8

8

966

-12.284

31
-2.749

193
24.745

193
11.495

193
12.461

-2.385

103

5.771
1
2.910

3.386
1
2.910

3.386
1
2,910

1,680
5

1,670
5

1,670
5

113

113

25
8,099
802

55
8,341
818

55
8,341
794

2,058
154
460

2,058
168
460

2,058
168
460

("")

108
-10

-113

-113

-24

31
242
-9

14

55

r")
-2

13

100

6

158

2
200

13
2,332

13
2,390

13
2,490

-475

185

8,959

8,484

8,484

110

110

110

5
252

5
252

11
252

17

17

17

20

20

20

8

8
-39
2
39

8
-39
2
39

8
-39
2
39

("")

("")

("")

r ")

r'I

-4,147

-13,363

114,329

113,187

110,182

-678
8

860
83
1
2

860
83
1
3

860

12

12

12

3,203

3,203

3,203

6

2

("")

-3,005

r")
r ")

("")

22

83

Table 6. Schedule C (Memorandum)-Federal Agency Borrowing Financed Through the Issue of Public Debt Securities,
January 1994 and Other Periods-Continued
[$ millions]
Account Balances
Current Fiscal Year

Transactions
Classification
Fiscal Year to Date
This Month
This Year
Borrowing for the Treasury:-Contlnued
Other independent agencies
Export-Import Bank of the United States
Federal Emergency Management Agency:
National insurance development fund .....
Pennsylvania Avenue Development Corporation:
Land aquisitlcn and development fund
Railroad Retirement Board:
Railroad retirement account
Social Security equivalent benefit account
Smithsonian Institution:
John F. Kennedy Center parking facilities
Tennessee Valley Authonty
................
Total agency borrowing from the Treasury
financed through public debt securities issued

263

..................

Borrowing from the Federal Financing Bank:
Funds Appropriated to the President:
Foreign military sales
...........
Department of Agriculture:
Rural Electrification Administration
Farmers Home Administration:
Agriculture credit insurance fund
...........
Rural housing insurance fund '"
Rural development insurance fund
Department of Defense:
Department of the Navy
Defense agencies
Department of Education:
..............
Student Loan Marketing Association
Department of Health and Human Services,
Except Social Security:
................
Medical facilities guarantee and loan fund
Department of Housing and Urban Development:
...... " .....
Low rent housing loans and other expenses .. ,"
Community Development Grants
Department of Interior:
Territorial and international affairs
Department of Transportation:
.............
Federal Railroad Administration
Depanment of the Treasury:
...........
Financial Management Service
General Services Administration:
..............
Federal buildings fund
Small Business Administration:
Business loan and investment fund
Independent agencies:
...........
Export-Import Bank of the United States
Federal Deposit Insurance Corporation:
. , , . . . . . . . . .. . . . , . . .
Bank insurance fund ..... , ........
............
Pennsylvania Avenue Development Corporation
. , . . . . . , . . . . . . .. . . . . . . . . .
Postal Service
. . . , . . . . . . . . .. . .
Resolution Trust Corporation .... .............
Tennessee Valley Authority.
..............
Washington Metropolitan Transit Authority ....
Total borrowing from the Federal Financing Bank

................

I

Beginning of
This Year

Prior Year

I

Close of
This month

This Month

811

28

386

1,197

1,197

125

7

42

167

167

3

76

76

76

996

2,126
2,690

2,126
3,405

2,126
3,668

20
150

20
150

20
150

979

-1,799

-17,047

-15,037

183,196

167,948

166,149

-32

-70

-72

4,083

4,045

4,013

-68

-143

-106

22.252

22,177

22,110

8,908
26,036
3,675

8,908
26,036
3,675

8,9D8
26,036
3,675

-49

-49

-48

1,624
-96

1,624
-96

1,624
-145

-2,000

-2,030

-30

4,790

4,760

2,760

(""j

-1

85

84

B4

-1

-54
-15

-52
-27

1,801
131

1.747
117

1,747
116

-1

-1

-28

23

23

22

-1

-1

17

16

16

-30

-51

30

20

81

411

1,436

1,497

1,518

-7

-27

-40

670

650

643

-485

-490

5,795

5,309

5,309

150
9,732
31,688
6.325
177

176
9,732
30,542
6,325
B42

184
9,732
30,093
6.075
665

129,332

128,190

125,185

8

35

-449
-250
-177

-1.595
-250
488

-3,005

-4,147

-3,160
16
537
-9,552
-670
-13.363

. No Transactions.

Note: This table includes lending by the Federal Financing Bank accomplished by the purchase
of agency finanCial assets, by the acqUISitiOn of agency debt secunttes, and by direct loans on
behalf of an agency. The Federal FinanCing Bank borrows from Treasury and issues its own
securities and in tum may loan tnese funds to agencies in lieu of agenCies borrowing directly
through Treasury or issuing their own securilies.

(. OJ Less than $500,000

Note: Details may not add to totals due to rounding

23

Table 6.

Schedule D-Investments of Federal Government Accounts in Federal Securities, January 1994 and
Other Periods
[$ millions]
Secutities Held as Investments
Current Fiscal Year

Net Purchases or Sales (-)
Classification

Fiscal Year to Date

Beginning of

This Month

I Prior Year

This Year
Federal funds:
Department of AgnCulture
Department of Commerce
Department of Defense-MIlitary:
Defense cooperation account
Department of Energy
Department of HOUSing and Urban Development:
HOUSing programs:
Federal hOUSing administration fund:
PubliC debt secunties
Govemment National Mortgage Association:
Management and liqUidating functions fund:
Public debt securities
Agency securities
Guarantees of mortgage-backed securities:
Public debt securities
Agency securities
Other
Department of the Interior:
Public debt securities
Department of Labor
Department of Transportation
Department of the Treasury
Department of Veterans Affairs:
Canteen service revolving fund
Veterans reopened insurance fund
Servicemen's group life insurance fund
Independent agencies:
Export-Import Bank of the United States
Federal Deposit Insurance Corporation:
Bank insurance fund
Savings aSSOCiation insurance fund
FSLlC resolution fund:
Public debt securities
Federal Emergency Management Agency:
National flood insurance fund
National Credit Union Administration
Pos tal Service
Tennessee Valley AuthOrity
Other
Other

-1

I

This Month

3

10

3
12

2
12

-4
40

-4
189

-1.996
97

9
4.081

9
4.229

5
4,269

-185

-305

-422

5,214

5,094

4,909

4

5

2

9
20

9
20

13
20

32

124
1
-28

105
5

3,221
1
191

3,313
2
163

3,345
2
163

..)

(

51
-42
9
47

208
-6,602
37
-20

176
-76
34
1,773

2,508
16,590
881
5.773

2.666
10,030
909
5,706

2.716
9,988
91a
5.753

-1

3
15
-109

-2
17
-25

38
518
150

41
534
41

41
533
41

264

805

392

76

618

881

446
25

1,978
18

-2,095
27

4,325
1,283

5,857
1,277

6,303
1,302

-51

690

311

828

1,569

1,518

207
-223
-273
83
73

-71
213
851
1,297
85
-89

-90
272
537
-465
13
86

71
2,764
3,027
3,452
853
2,715

2,771
4,100
5,022
855
2,554

4}49
938
2,627

498

-708

-1,318

58,589
21

57,382
22

57,880
22

-1,318

58,610

57,404

57,902

..4

)

1
4
27

5
5
27

5
5
28

9
-1

212
5

233
184

233
184

n

(")

n

.............................................

Trust funds:
Legislative Branch:
Library of Congress
United States Tax Court
Other
The JudiCiary"
JudiCial retirement funds
Department of Agnculture
Department of Commerce
Department of Defense-Military
Voluntary separation incentive fund
Other
Department of Defense-CIVIl:
MIlitary retirement fund
Other

(")

(")

Total public debt securities
Total agency securities
Total Federal funds

2

This Year

Close 01
This month

498

..

(

)

-707

4

r·)
1

n

r .)

20
179

(

n

2,978

3,an

r·)

r·)

r .)

-5

-49
6

875
1

844
151

801
157

796
157

-1,119
-15

12,021
-7

11,965
161

96.690
1,213

109,830
1,221

108,711
1,206

24

Table 6. Schedule D-Investments of Federal Government Accounts in Federal Securities, January 1994 and
Other Periods-Continued
[$ millions]
Securities Held as Investments
Current Fiscal Year

Net Purchases or Sales (-)
Classification

Fiscal Year to Date
This Month
This Year

I

Beginning of

Prior Year

This Year

J This Month

Close of
This month

Trust Funds-Continued
Department of Health and Human ServiceS, except Social Security:
Federal hospital insurance trust fund:
Public debt securities .............. . ............... .
Federal supplementary medical insurance trust fund .................. ,
Other ................................................................... .
Department of Health and Human Services, Social Security:
Federal old-age and survivors insurance trust fund:
Public debt securities ............................................... .
Federal disability insurance trust fund ............................... .
Department of the Interior:
Public debt securities ................................................... .
Department of Justice .................................. , ................ ..
Department of labor:
Unemployment trust fund ........................................ , ..... ..
Other ................................................................. ..
Department of State:
Foreign Service retirement and disability fund ..... . ....... , .......... .
Other ................ , ................................................. ..
Department of Transportation:
Highway trust fund ......... .. .. . .. .. . .. . .. .. .. . .... .. ............ .
Airport and airway trust lund ......................................... ..
Other .................................................................. ..
Department of the Treasury .............................................. .
Department of Veterans AHairs:
General post fund. national homes ............ .
National service life insurance:
Public debt securities ................................................. .
United States government life Insurance Fund ........................ .
Veterans special life insurance fund .................................. ..
Environmental Protection Agency .......................... .. ............ .
National Aeronautics and Space Administration
............... .
Office of Personnel Management:
Civil service retirement and disability fund:
Public debt securities ......... ... " .......................... ..
Employees health benefits fund ....................................... ..
Employees life insurance fund ....... , ................................. .
Retired employees health benefits fund .. . ......................... ..
Independent agencies:
Harry S. Truman memorial scholarship trust fund ........ . ......... ,.
Japan-United States Friendship Commission .......................... .
Railroad Retirement Board ............................................ ..
Other ................................................................... ..

-836
-667
10

1.890
927
40

2,797
2,572
19

126,078
23,268
659

128,804
24,862
690

127,969
24,195
699

4,735
-181

18,561
-1,408

12,915
-1,294

355,510
10,237

369,335
9,010

374,070
8,829

-84

34
82

-130
90

184

302
82

219
82

-2,102
-9

-2.832
-38

-4,299
-38

36,607
53

35,877
25

33,775
15

296
(* *)

301
12

289
12

6,662
38

6,667
50

6,963
50

-604
-417
-4
21

-914
-252
-4
-56

638
-1,809
69
-34

22,004
12,672
1,675
209

21,694
12,837
1,676
132

21,090
12,420
1,671
153

r *)

4

39

38

38

271
-1
37
207

362

11,666
125
1,462
5,477
16

11,984
122
1,508
5,551
16

11,937
124
1,499
5,683
16

319,335
7,044
14,008
1

317,473
7,099
14,060
1
52
17
11,834
222

-47
2
-10
133

(* *)

45
79

r *)

(* *)

-1,862
55
52

5,768
305
372

5,796
125
345

(* *)

(* *)

(* *)

311,705
6,794
13,688
1

(* *J
(* *J

r ')

(* *)

r *)

52

35

..-5
..

)

17

)

11,961
125

52
16
11,799
129

(
(

94

-127
98

Total public debt securities .......................................... .

-2,527

35,450

31,564

1,058,131

1,096,108

1,093,581

Total trust funds ................................ , ............... .

-2,527

35,450

31,564

1,058,131

1,096,108

1,093,581

Grand total ................................................................ ..

-2,029

34,743

30,246

1,116,740

1,153,512

1,151,483

Note: Investments are in public debt securities unless otherwise noted .
Note: Details may not add to totals due to rOUnding.

... No Transactions
(' *) Less than $500.000.

25

Receipts and Outlays of the U.S. Government by Month, Fiscal Year 1994

Table 7.

[$ millions)

Oct.

Classification

Receipts:
Individual Income taxes
Corporation Income taxes
Social Insurance taxes and
contnbutlons
Employment taxes and
contnbutiOns
Unemployment Insurance
Other retirement contnbutlons
Excise taxes
Estate and gift taxes
Customs duties
Miscellaneous receipts

Noy.

Dec.

Jan.

March

Feb.

April

May

June

July

Aug.

Sept.

Fiscal
Year
To
Date

Com·
parable
Period
Prior

F.Y.

37.680
2.158

37.634
2.208

54.183
28.239

74.167
3.916

203.664
36.521

195.251

29.440
1.046
343
3.597
990
1,708
1,706

31.525
2.773
385
4,808
1,305
1,688
781

33.273
259
423
4.695
1.179
1,584
1,582

35.831
794
358
4.011
1,105
1.526
1,260

130,069
4.872
1,508
H,111
4,580
6,506
5,329

117.860
4,393
1,575
15,073
3,828
6,018
4,108

...........

78,668

83,107 125,416 122,968

410,159

(On·budget) ........................

55,864

58,700

99,721

94,397

308,683

......
.. ....

(Off-budget) ........................

22,804

24,407

25,694

28,571

101,476

76,824

74.625 113.683 IIUI2

(a" hlldge/)

55.048

51,211

89.586

90.124

285,969

(ali hlldge/)

21.776

23.414

24.096

22.589

91.875

378
158
20

206
219
18

204
190
16

212
179
20

1,000
746
73

829
702
75

3,302

397

366

129

4,194

4,661

557
133

351
348

242
H

388
156

1,538
655

1,475

900
3,993
264

2,263
4,886
277

2,614
3,794
282

974
3,815
244

6,750
16,488
1,068

8,537
15,299
1,034

6,634
6,413
5.131

5.357
7.049
5,132

8.626
6,953
5,746

2,579
8.668
4,043

23,197
29,083
20,051

26,327
28,918
23,027

2,987
404
226

2,875
388
208

2,949
390
241

2,678
415
273

11,489
1,597
948

11,728
1,653

1,568

816

275

-892

1,767

Total-Receipts this year

rOlal-Raelpl, pnor rear

Outlays
Legislative Branch
The JudiCiary
Executive Office of the President .
Funds ApprOpriated to the President:
Intematlonal Security ASSistance
Intemational Development
ASSistance
Other
Department of Agriculture:
Foreign assistance. Special export
programs and Commodity Credit
Corporation
Other
Department of Commerce
Department of Defense:
Military
MIlitary personnel
Operation and maintenance
Procurement
Research, development. test, and
evaluation
MIlitary constnuction
Family housing
Revolving and management
funds
Defense cooperation account
Other
Total Military
C,v,l
Department of Education
Department of Energy
Department of Health and Human
Services. except Social Security:
Public Health Service
Health Care FinanCing Administration:
Grants to States for Medicaid
Federal hosptal Ins. tnust fund
Federal supp med. Ins. tnust
fund
Other
SOCial Secunty Administration
Administration for children and
families
Other
De parlment of Health and Human
ServiceS SOCial Secunty
Federal Old-age and SUrviVorS Ins
trust fund
Federal disability Ins tnust fund
Other

..)

(")

(.')

(")

(

-217

-27

572

-12

23.147

21.796

25,752

17,752

2.550
1,805
1,710

2,515
3,356
1,723

2.550
2,535
1,492

2,509
1,102
1,269

1.467

1,700

1,633

1,178

7.394
7,432

6.626
8,006

7,088
9.319

6.097
7.193

4,650
3.783
2.970

4.838
3.801
2.061

5.846
3,782
3,892

4,170
2.968
1.760

2.797
-5.060

2.723
-5.060

2.828
-5.094

2,771
-4,429

22.546
2.992
-977

22.554
2.998
-7

22.927
2,991

23.097
3.054
-1,559

-17

....

..... ,
377,844

484

964

..

2,249

( )

-38

316

-1,040

88,447

93,786

10,123
8,799
6,195

9,946
10,576
5,434

5,977

5,835

27,205
31,951

24,108
28,142

19,504
14,334
10,683

17,289
14,768
10,432

11,119
-19,643

91,124
12,035
-2,560

26

29,736

9,
-19,

87,1
11,
-3,

Table 7. Receipts and Outlays of the U.S. Government by Month, Fiscal Year 1994-Continued
[$ millions]

Classification

Oct.

Nov.

Dec.

Jan.

Feb.

March

April

May

June

July

Aug.

Sept.

Fiscal
Year
To
Date

Comparable
Period
Prior
F.Y.

Outlays-Continued
Department of Housing and Urban
Development . , . " , '
....
Department of the Interior
Department of Justice .... .....
Department of Labor:
...
Unemployment trust fund .. '
. ..
Other ....... .... ..........
Department of State .... , ....
Department of Transportation:
......
Highway trust fund
... . ....
Other. .....
Department of the Treasury:
Interest on the public debt
Other .....
Department of Veterans Affairs:
Compensation and pensions ....
.... ...... .
National service life
United States government life
Other ...... .... ..... . ......
Environmental Protection Agency
General Services Administration .........
National Aeronautics and Space
.......
Administration
Office of Personnel Management
Small Business Administration ... ...
Independent agencies:
Fed. Deposit Ins. Corp.:
........
Bank insurance lunds
... ...
Savings association fund
.....
FSLlC resolution fund .
Postal Service:
Public enterprise funds (off·
...
budget) .......... ......
Payment to the Postal Service
..... ..... .....
fund
Resolution Trust Corporation
Tennessee Valley Authority ....
. ..
Other independent agencies ..
Undistributed offsetting receipts
Employer share. employee
retirement ....... . . . . . . . . . . .
Interest received by trust funds
Rents and royalties on outer
continental shelf lands
...............
Other ...
'"

2.645
527
749

2,415
600
905

2.309
514
773

1.564
677
822

8.932
2.317
3.249

8.659
2.162
3.771

2.710
652
843

2.762
61
586

3.146
673
478

3.044
463
407

11.662
1.849
2.315

13.203
1.268
2.165

1.774
1.377

1.601
1.651

1.516
2.224

1,243
1.255

6.134
6.508

5.347
5,871

17.638
-102

22.260
75

52,712
983

17.899
590

110.509
1.547

110.224
332

1,400
66
2
1.338
430
239

1.406
57
1
1,705
506
-489

2,748
75
2
1,613
458
384

61
68
1
2,001
456
-658

5.615
266
6
6.657
1,850
-524

5.477
180
6
5.856
1.898
-241

1,079
3,335
14

1,214
2,879
146

1,191
3.079
49

1.015
3.249
-7

4, 500 1
12.542
202

4.773
11.991
250

52
)

-182
4
8

-1,322
8
-140

-452
-25
-93

-1,904
-17
-225

-1,033
-27
181

-509

-237

146

194

-406

-452

61
7
106
1,705

....

-1.169
168
2.048

2,471
101
991

23
-74
212
1.402

85
1,235
586
6,146

100
-8,164
832
5,990

-2,449 -2,592
-5,173 -36,027

-2.601
-122

-10.214
-41.682

-10,156
-39.847

-145

-313

-940

-752

..

-5

(

-2.572
-359
-21

..)

(

. .....

-461

r .)

.

n

,

..

(

r .)

)

Totals this year:
Total outlavs

.........................

124,090 121,488 133,667 107,355

486,601

96.724 121,985

83,164

402,440

11,683

24,192

84,161

-8,252 +15,613

-76,442

-44.704 -38,024 -22,263 +11,234

-93,758

+4,379

+17,315

-6,933

82,345

(On-budget) ........................

100.568

(Off-budget) , .......................

23,523

.....
....................

Total-surplus (+) or deficit (-)
(On-budget)

..

"

-45,422 -38,381

(Off-budget) ........................

-719

....

4,255

Total borrowing 110m the public

TaJa/-ouJlays prior year

13,995

73.140

82.896

83.432 116.568

84. 921

388.697

36.061

-2.025

79.795

(Offbudget) .

21.841

(Offbudget) .

71,028

125.616 107.351 152.629

103.775

lan-budget) .

-357 +14,012

......
......
......
......
......
......
468.492

(On-budget) .

Toral-surplus (+) or dejiciJ (-) prior
year.

24.764

..)

(

23.919

-48.792 -32.726 -38.947 +29,817

-YO.648

+5,202

-IOU:!7

-505 -ll.965 +24.614

+1:!()79

-48,727 -32.221 -26.982

-65

... No transactions.
(. ') less than $500.000
Note: Details may not add to lotals due to rounding.

27

Table 8.

Trust Fund Impact on Budget Results and Investment Holdings as of January 31, 1994
[$ millions)
Fiscal Year to Date

This Month
Classification

Securities held as Investments
Current Fiscal Year
Beginning of

Receipts

Outlays

Excess

Receipts

Outlays

Excess
This Year

Trusl receipts. outlays, and investments
held:
Alfport
Black lung disability
Federal disability Insurance
Federal employees lile and health
Federal employees retirement
Federal hospital insurance
Federal old-age and survivors insurance
Federal supplementary medical Insurance
Highways
Military advances
Railroad retirement
MIlitary retirement
Unemployment
Veterans Ii Ie insurance
All other trust

1,183
7,166
27,826
4,424
1.226
836
541
971
1,021
30
557

584
46
3,054
-89
3,015
7,193
23.097
4.170
1.395
1,015
652
2,200
3,044
111
224

-441
10
-156
89
-1,832
-27
4,729
254
-169
-179
-111
-1.229
-2,024
-82
332

48,878
7,820

49,713
7.820

-835

143
56
2,898

18,098
33,612
109.531
20,614
6,313
4,029
1,648
20,996
8.830
660
1,630

2,162
196
12.035
-473
12,015
31.951
91.124
19.504
6,712
4.361
2.581
8.788
11.662
344
1.132

-261
9
-1,498
473
6.083
1.661
18,407
1,110
-399
-332
-933
12.208
-2.832
316
497

238,604
83,896

204,095
83,896

34,509

1,901
205
10.536

I This Month

Clos.ol
This Month

12.672

12.837

12.420

10.237
20,484
318,583
126.078
355.510
23,268
22.004

9.010
21,054
326.239
128.804
369,335
24.862
21,694

B.B29
21,161
324.673
127,969
374.070
24,195
21,090

11.961
96.690
36.607
13,253
10.784

11.799
109.830
35.877
13.615
11,153

11.834
10B,711
33.775
13,560
11,295

1,058,131

1,096,108

1,093,581

Total trust lund receipts and outlays
and investments held from Table 6-

0

..........................................

Less. Interlund transactions
Trust lund receipts and outlays on the baSIS
01 Tables 4 & 5

41,058

41,893

-835

154,708

120.200

34.509

Total Federal fund receipts and outlays
Less: Interlund transactions

84,146
-224

67,699
-224

16,447

265,566
29

376,517
29

-110,951

Federal fund receipts and outlays on the
baSIS of Table 4 & 5

84,370

67,923

16,447

265.537

376,488

-110.951

2,460

2,460

10,087

10.087

122,968

107,355

410,159

486,601

Less offsetting proprietary receipts
Net budget receipts & outlays

...............

15,613

No transactions

-76,442

Note: Details may not add to totals due to rounding.

Note Inter1und receipts and outlays are transactions between Federal funds and trust funds
such as Federal payments and contributions, and mterest and profits on Investments In Federal
secunlles They have no net eHect on overall budget receipts and outlays Since the receipts Side of
such transactlOOS IS offset against bugdet outlays. In this table. Interfund receipts are shown as an
adjustment to amve at total receipts and outlays oj trust funds respeclovely

28

Table 9. Summary of Receipts by Source, and Outlays by Function of the U.S. Government, January 1994
and Other Periods
[$ millions)
This Month

Fiscal Year
To Date

Comparable Period
Prior Fiscal Year

74,167
3,916

203,664
36,521

195,251
29,736

35,831
794
358
4,011
1,105
1,526
1,260

130,069
4.872
1,508
17,111
4,580
6,506
5,329

117,860
4,393
1,575
15,073
3,828
6,018
4,108

122,968

410,159

377,844

National defense
International affairs
General Science. space. and technology
Energy
.......... ..
Natural resources and environment
Agriculture . . . . . . . . .. .. ..................... .
Commerce and housing credit ................................... .
Transportation
................................... .
Community and Regional Development
Education, training, employment and social services ............ .
Health
........................... ..
Medicare.....
. .............................. ..
Income security '"
........................... .
Social Security
............... ..
.......... .
Veterans benefits and services
Administration of lustice
General govemment
Interest
Undistributed offsetting receipts ... . ........................ .

1B,B61
1,103
1,299
465
1,447
1,122
-1,124
2,503
906
2,693
7,665
9,858
16,196
26,151
2,151
1,210
669
17,095
-2,914

92,941
8,347
5,737
1,7B4
7,710
7,874
-981
12,599
3,506
15,832
34,562
45,881
70,073
103,163
12,637
4,770
4,334
66,986
-11,154

97,653
8,481
5,988
1,677
8,055
9,014
-8,388
11,238
3,104
16,721
31,460
40,719
66,974
98,160
11,610
4,855
5,070
67,010
-10,908

Total, ..... , ............... , ......... " ... " ................ ..

107,355

486,601

468,492

Classification

RECEIPTS
Individual income taxes
Corporation income taxes ..
Social insurance taxes and contributions:
Employment taxes and contributions
Unemployment Insurance ..
Other retirement contributions
Excise taxes .
Estate and gift taxes ..................... .
Customs
Miscellaneous
Total .................... , .................................. ..

NET OUTLAYS

Note: Details may not add to totals due to rounding.

Explanatory Notes
the employee and credits for whatever purpose the money was withheld.
Outlays are stated net of offsetting collections (including receipts of
revolving and management funds) and of refunds. Interest on the public
debt (publiC issues) is recognized on the accrual basis. Federal credit
programs subject to the Federal Credit Reform Act of 1990 use the cash
basis of accounting and are divided into two components. The POrtion of
the credit activities that involve a cost to the Government (mainly
subsidies) is included within the budget program accounts. The remaining
portion of the credit activities are in non-budget financing accounts.
Outlays of off-budget Federal entities are excluded by law from budget
totals. However, they are shown separately and combined with the onbudget outlays to display total Federal outlays.

1. Flow of Data Into Monthly Treasury Statement
The Monthly Treasury Statement (MTS) IS assembled from data in the
central accounting system The major sources of data Include monthly
accounting reports by Federal entities and disbursing officers, and daily
reports from the Federal Reserve banks. These reports detail accounting
transactions affecting receipts and outlays of the Federal Government
and off-budget Federal entities. and their related effect on the assets and
liabilities of the U S Government Information is presented in the MTS on
a modified cash baSIS

2. Notes on Receipts
Receipts Included In the report are classified into the following major
categories (1) budget receipts and (2) offsetting collections (also called
applicable receipts). Budget receipts are collections from the public that
result from the exerCise of the Government's sovereign or governmental
powers. excluding receipts offset against outlays. These collections, also
called governmental receipts. conSist mainly of tax receipts (including
social Insurance taxes). receipts from court fines, certain licenses, and
depoSits of earnings by the Federal Reserve System. Refunds of receipts
are treated as deductions from gross receipts.
Offsetting collections are from other Government accounts or the
public that are of a business-type or market-oriented nature. They are
classified into two major categories: (1) offsetting collections credited to
appropnatlons or fund accounts, and (2) offsetting receipts (i.e., amounts
depOSited In receipt accounts). Collections credited to appropriation or
fund accounts normally can be used without appropriation action by
Congress. These occur in two Instances: (1) when authorized by law,
amounts collected for materials or services are treated as reimbursements to appropriations and (2) in the three types of revolving funds
(public enterprise, intragovernmental, and trust); collections are netted
against spending, and outlays are reported as the net amount.
Offsetting receipts in receipt accounts cannot be used without being
appropriated. They are subdivided into two categories: (1) proprietary
receipts-these collections are from the public and they are offset against
outlays by agency and by function, and (2) intragovernmental fundsthese are payments into receipt accounts from Governmental appropriation or funds accounts. They finance operations within and between
Government agencies and are credited with collections from other
Government accounts. The transactions may be intrabudgetary when the
payment and receipt both occur within the budget or from receipts from
off-budget Federal entities in those cases where payment is made by a
Federal entity whose budget authonty and outlays are excluded from the
budget totals
Intra budgetary transactions are subdivided into three categories:
(1) Interfund transactions. where the payments are from one fund group
(either Federal funds or trust funds) to a receipt account in the other fund
group. (2) Federal Intrafund transactions, where the payments and
receipts both occur Within the Federal fund group; and (3) trust intrafund
transactions. where the payments and receipts both occur within the trust
fund group
Offsetting receipts are generally deducted from budget authority and
outlays by function. by subfunction, or by agency. There are four types of
receipts. however. that are deducted from budget totals as undistributed
offsetting receipts. They are: (1) agencies' payments (including payments
by off-budget Federal entities) as employers into employees retirement
funds (2) Interest received by trust funds. (3) rents and royalties on the
Outer Continental Shelf lands. and (4) other interest (i.e., interest collected
on Outer Continental Shelf money In deposit funds when such money is
transferred Into the budget)

4. Processing
The data on payments and collections are reported by account symbol
into the central accounting system. In turn, the data are extracted from
this system for use in the preparation of the MTS.
There are two major checks which are conducted to assure Ihe
consistency of the data reported:
1. Verification of payment data. The monthly payment activity reported by
Federal entities on their Statements of Transactions is compared to the
payment activity of Federal entities as reported by disbursing officers.
2. Verification of collection data. Reported collections appearing on
Statements of Transactions are compared to deposits as reported by
Federal Reserve banks.

5. Other Sources of Information About Federal Government
Financial Activities

• A Glossary of Terms Used in the Federal Budget Process, March
1981 (Available from the U.S. General Accounting Office, Gaithersburg,
Md. 20760). This glossary provides a basic reference document of
standardized definitions of terms used by the Federal Government in the
budgetmaking process.
• Daily Treasury Statement (Available from GPO, Washington, D.C.
20402, on a subscription basis only). The Daily Treasury Statement is
published each working day of the Federal Government and provides data
on the cash and debt operations of the Treasury.
• Monthly Statement of the Public Debt of the United States
(Available from GPO, Washington, D.C. 20402 on a subscription basis
only). This publication provides detailed information concerning the publiC
debt.
• Treasury Bulletin (Available from GPO, Washington, D.C. 20402, by
subscription or single copy). Quarterly. Contains a mix of narrative, tables,
and charts on Treasury issues, Federal financial operations, international
statistics, and special reports.
• Budget of the United States Government, Fiscal Year 19 _
(Available from GPO, Washington, D.C. 20402). This publication is a
single volume which provides budget information and contains:
-Appendix, The Budget of the United States Govemment. FY 19_
-The United States Budget in Brief, FY 19 _
-Special Analyses
-Historical Tables
-Management of the United States Government
-Major Policy Initiatives

3. Notes on Outlays
Outlays are generally accounted for on the basis of checks issued,
electroniC funds transferred. or cash payments made. Certain outlays do
not require Issuance of cash or checks. An example is charges made
against appropnatlOns for that part of employees' salaries withheld for
taxes or savings bond allotments - these are counted as payments to

• United States Government Annual Report and Appendix (Available
from Financial Management Service, U.S. Department of the Treasury
Washington, D.C. 20227). This annual report represents budgetary
results at the summary level. The appendix presents the individual receipt
and appropriation accounts at the detail level.

30

Scheduled Release
The release date for the February 1994 Statement will be 2:00 pm EST March 21, 1994.

For sale by the Superintendent of Documents. U.S. Government Printing
Office. Washington. D.C. 20402 (202) 783·3238. The subscription price is
$27.00 per year (domestic). $33.73 per year (foreign).
No single copies are sold.

UBLIC DEBT NEWS
Department of the Treasury ~ •

FOR IMMEDIATE RELEASE
February 23, 1994
RESULTS OF TREASURY'S AUCTION OF 2-YEAR NOTES
Tenders for $17,005 million of 2-year notes, Series AD-1996,
to be issued February 28, 1994 and to mature February 29, 1996
were accepted today (CUSIP: 912827N99).
The interest rate on the notes will be 4 5/8%. All
competitive tenders at yields lower than 4.66% were accepted in
full.
Tenders at 4.66% were allotted 98%. All noncompetitive and
sucessful competitive bidders were allotted securities at the yield
of 4.66%, with an equivalent price of 99.934. The median yield
was 4.63%; that is, 50% of the amount of accepted competitive bids
were tendered at or below that yield. The low yield was 4.58%;
that is, 5% of the amount of accepted competitive bids were
tendered at or below that yield.
TENDERS RECEIVED AND ACCEPTED (in thousands)
TOTALS

Received
$42,888,236

Accepted
$17,004,936

The $17,005 million of accepted tenders includes $796
million of noncompetitive tenders and $16,209 million of
competitive tenders from the public.
In addition, $1,509 million of
high yield to Federal Reserve Banks
international monetary authorities.
of tenders was also accepted at the
Reserve Banks for their own account
securities.

LB-662

tenders was awarded at the
as agents for foreign and
An additional $413 million
high yield from Federal
in exchange for maturing

DEPARTMENT

OF

THE

TREASURY

ISOO PENNSYLVANIA AVENUE, N.W.• WASHINGTON, D.C.· 20220· (202) 622-2960

FOR IMMEDIATE RELEASE
Text as Prepared for Delivery
February 24, 1994

Summary Testimony of Treasury Secretary LJoyd Bentsen
Senate Committee on Banking, Housing and Urban Affairs
Washington D.C.

LB-663

FOR IMMEDIATE RELEASE
Text as Prepared for Delivery
February 24, 1994

Summary Testimony of Treasury Secretary Uoyd Bentsen
Senate Committee on Banking, Housing and Urban Affairs
Washington D.C.

Mr. Chairman, members of the Committee, with me today are Oversight Board
members: Alan Greenspan, Chairman of the Federal Reserve Board; Roger Altman,
RTC Interim CEO; Jonathan Fiechter, Acting Director of the Office of Thrift
Supervision; and Andrew Hove, Acting Chairman of the Federal Deposit Insurance
Corporation. Also accompanying us is Dietra Ford, Executive Director of the Oversight
Board.
I have a longer version for the record, which I'll summarize today. But before I
begin, thank you, Mr. Chairman and the other members, for your bi-partisan efforts last
session to obtain funding for RTC to finish its job.
Let me tell you something you don't hear very often: we're not here to ask for
more money. The funding provided through the RTC Completion Act should be
sufficient.
In fact, they tell me this is the first time the Oversight Board has been before you
that it won't be asking for additional funding -- and I'm glad to have that honor!
I'm also happy to report that few S&Ls are failing. And 99 percent of privatesector thrifts are well or adequately capitalized.
Let me review some numbers. Since RTC was created in 1989, it's taken over
743 failed institutions -- and it's closed or sold 680 of them.
In the process, it protected nearly 23 million deposit accounts, with average
balances of $9,000. RTC made good on the government's guarantee of deposit insurance
to millions of Americans nationwide.

-2-

I might add, it did this without disruption. A lot of the customers didn't even
know RTC ~had taken control of their S&L.
The RTC also undertook the greatest liquidation in history -- so far disposing of
5393 billion in assets for about 90 percent of their book value.
RTC sold -- since its inception -- nearly 80,000 units as affordable housing. So, at
least tens of thousands of lower-income families have benefited as this problem is being
resolved.
Crime is at the top of our agenda these days. We talk about violent crimes -well, this scandal had criminals. White-collar criminals.
More than 1,500 persoIt5 were charged with major crimes involving S&Ls.
;-..Iearly 1,250 were convicted. or those sentenced, more than 75 percent went to prison.
And RTC has pursued civil recoveries from wrong-doers, with all involved agencies
collecting nearly $2 billion.
Mr. Chairman, when this Administration took office, the total cost of resolving the
S&L problem was estimated at between $100 and $160 billion.
When I testified last March, we thought as much as $45 billion in additional
funding would be needed. That was on top of the nearly $87 billion already
appropriated.
A lot of people agreed with us. The Congressional Budget Office estimated $50
billion. The General Accounting Office had us around that level. So did both the
House and Senate Budget Committees.
RTC funding legislation moved through Congress last year, constantly
improving economic conditions resulted in record earnings for the S&L and banking
industries. By mid-November, after lengthy deliberations in both Houses, the funding
bill provided $18.3 billion.
As

That brought the total amount provided by Congress for the clean-up to
S105 billion, a figure on the low end of the estimate when this Administration took
office.
I know the results could have been different -- easily.
Depositors could have lost their savings. Losses to the government could have
been far greater. Resolution of the problem could have taken much longer.

-3-

But to the credit of a great number of people, including many of you sitting here
today, the problem is near resolution.
I'd like to give some credit for that to the management of RTC.
And I think we better credit the economy.
Deficit reduction has helped interest rates fall. And we've taken steps to increase
the availability of credit, and tackling unnecessary regulations and reporting requirements
that ,discouraged lenders from making loans to small businesses.
And we'll continue to propose changes that'll result in greater credit availability
and efficiencies in the bar..king industry. This is why we want to solve a number of
issues, including passage of the community development financial institutions legislation,
which includes a balanced reduction in regulatory burden.
I'll be before this Committee next week with specifics on the Administration's
proposal to reform and simplify the regulatory structure for depository institutions.

Our proposal not only will eliminate unnecessary regulatory expenses, which could
result in the availability of greater credit -- but as importantly, it can help avoid new
crises by putting a stop to inconsistent and confused regulation. We'll talk more next
week.
But the point I want to make on deficit reduction is that the market responded.
The economy responded.
Housing starts and home sales are up. And that's good news When you're RTC
and you're trying to sell real estate.
And lower interest rates and increased credit activity have brought about
increased earnings for all types of financial institutions. Many S&LS that may have been
at risk are now making profits.
But you and I know -- we can't predict what will happen between now and 1995
when RTC goes out of business. Nobody foresaw floods and earthquakes -- and they can
have economic consequences.
We're not done yet. Through 1995, RTC must continue to protect depositors. It
must dispose of some very hard to sell assets. It must ensure its operations are run
effectively. It must work toward an orderly transition of its responsibilities to the FDIC.
And it must never lose sight of its mandates to provide affordable housing and maximize
minority participation, including implementation of provisions of the RTC Completion
Act.

-4-

I've urged RTC to work aggressively on the issue of minority participation. It's
imperative th;t minority- and women-owned businesses have an ample opportunity to
win contracts, to purchase assets, and to acquire failed thrifts.
In fact, RTC is taking special care to meet requirements of the Completion Act to
provide preferences to minority institutions, while applying the least-cost test.
Let me be more specific on some of those things I mentioned.
RTC has begun resolving 63 insolvent institutions now operating in
conservatorship, which have about 2.3 million deposit accounts.
Some additional institutions may be transferred this year. If so, RTC will make
good on the government's guarantee to these insured depositors -- and any others who
may yet fall under its jurisdiction.
Insofar as the remaining inventory of nearly $64 billion assets, these are mostly
hard-to-sell land, other real property, and non-performing mortgages.
While the improved economy helps sales, the potential losses to the taxpayers
could be reduced if these assets are managed and sold efficiently.
RTC is working on improving its marketing and sales strategies and is seeking
creative, yet sound, techniques to maximize returns.
To fulfill its remaining missioI\ RTC will benefit from good managers.
Jack Ryan, of OTS, was appointed Deputy CEO. Ellen Kulka of OTS, has been
appointed General Counsel. And Tom Horton has been promoted to Acting Senior
Vice President for Asset Management and Sales.
And I can tell you today that the Administration expects to submit its nomination
for a permanent Chief Executive Officer shortly.
I thank Roger Altman for his service as Interim CEO. His term expires the end
of March, and we hope by then to have our nominee before you. In line with the
RTC Completion Act, Jack Ryan will serve as the Interim CEO between the time
\1r. AJtman's term expires and the permanent CEO is confirmed.
.
\\'hlCh

~e ~ersight Board will also make some appointments to the Audit Committee,
WIll be III operation soon.

-5-

I've asked Frank Raines, vice chairman of Fannie Mae, to chair that one. And to
serve as members, we've asked Jonathan Fiechter, of OTS; and Robert Larson,
vice chairman of the Taubman Company, and a former member of the Oversight Board.
Mr. Larson has also been re-nominated to serve on the Oversight Board, and I hope
you'll be able to approve his nomination soon.
R TC will close down on December 31, 1995 - one year earlier than originally
thought. And planning for this is well underway.
I expect the new management to work with the people at the FDIC, in a
cooperative way, to carry out the transition of RTC to FDIC.
This past year, the Oversight Board has also strengthened our staff reviews.
We want to ensure improvements continue, and so we're scrutinizing some things.
For instance, our staff has been monitoring RTC's efforts to improve its
contracting systems and oversight. A review is being conducted to make sure policies are
applied uniformally to all contractors, and that contract oversight procedures provide
effective review of performance.
Another example: the staff has focused on RTC's Financial Operating Plan -- its
operating budget and all its borrowing activity.
And our advisory boards are taking hard looks at the policies governing asset
sales. Late last year, Ira Hall of mM USA was named chairperson of the National
Advisory Board -- bringing considerable financial and private-sector expertise to the
process.
These boards meet regularly at sites nationwide to discuss progress and hear
testimony from witnesses. RTC listens to their advice -- they've been instrumental in
advancing affordable housing opportunities.
Our advisory board structure will change this year. The Completion Act created a
new Affordable Housing Advisory Board -- to replace the National Housing Advisory
Board. The new board will be made up of nine members, including the Secretary of
HUD.
They'll be providing advice on affordable housing programs and how to merge
RTC programs with FDIC programs after the shut down. We're looking forward to
working with them.
Now, last year at this hearing, I announced 10 goals insofar as improving or
reforming RTC management.

-6-

Things like putting in place a system to ensure prompt follow-up on findings of
the Inspector General and General Accounting Office; strengthening the contracting
system ~nd oversight of its private sector contractors; and appointing a Chief Financial
Officer.
The RTC Completion Act mandated and expanded on these reforms, and RTC is
moving to meet the standards Congress set.
I'm pleased with the results. In a minute, I'd like Roger Altman to discuss them
\'11 th you -- one by one.
I hope you especially note what we've done on opportunities for minority and
women-owned businesses and in strengthening our internal accounting and administrative
control systems.
I personally believe these programs are an important part' of R TC's duties and
that this is an area it must continue to focus attention on to ensure legislative mandates
are attained.
Mr. Chairman, let me end on this. I believe RTC has made significant progress
in the past year in achieving its mandates ... and in addressing the concerns raised by
Congress, by GAO, and by the Oversight Board.
There have been many problems, but the organization has been relatively free
from partisan conflict. Republicans and Democrats alike have been committed to
fulfilling the government's obligations to protect depositors at the least cost to the
taxpayer.
In 1994, we'll keep working at it.
.

And looking to 1995, well, I believe RTC will be more than happy to be out of

bus mess.

We'll all be happy!
Thank you, and let me turn this over to Mr. Altman.
·30-

VBLIe DEBT NEWS
Department ot the Treasur\, •

Burl'~lu

or the Public Debt

FOR IMMEDIATE RELEASE
February 24, 1994

• Washington, DC 20'2:)9

:1·1\,·
1'""~,,,
•••• )
II.
I"

\

""

~\

CONTACT: Office of Financing
202-219-3350

RESULTS OF TREASURY'S

A~CTION

OF 5-YEAR NOTES

I:

Tenders for $11,021 million of 5-year notes, Series K-1999,
to be issued February 28, 1994 and to mature February 28, 1999
were accepted today (CDSIP: 912827P22).
The interest rate on the notes will be 5 1/2%. All
competitive tenders at yields lower than 5. 61%" w,ere accepted in
full.
Tenders at 5.61%" were allotted 94%".
All noncompetitive and
sucessful competitive bidders were allotted securities at the yield
of 5.61%", with an equivalent price of 99.526.
The median yield
was 5.60%; that is, 50% of the amount of accepted competitive bids
were tendered at or below that yield.
The low yield was 5.55%;
that is, 5% of the amount of accepted competitive bids were
tendered at or below that yield.
TENDERS RECEIVED AND ACCEPTED (in thousands)

TOTALS

Received

Accepted

$31,437,721

$11,021,186

The $11,021 million of accepted tenders includes $516
million of noncompetitive tenders and $10,505 million of
competitive tenders from the public.
In addition, $530 million of tenders was awarded at the
high yield to Federal Reserve Banks as agents for foreign and
international monetary authorities.
An additional $350 million
of tenders was also accepted at the high yield from Federal
Reserve Banks for their own account in exchange for maturing
securities.

LB-664

/."../

'Z'u~"",,

NEWS

IREASURY

1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C.· 20220 -(202) 622-2960

FOR IMMEDIATE RELEASE
Text as Prepared for Delivery
February 24, 1994

STATEMENT OF TREASURY SECRETARY LLOYD BENTSEN
PRE G-7 PRESS CONFERENCE

This Saturday, Chairman Greenspan and I will attend the meeting of G- 7 finance
ministers and central bank governors in Frankfurt, Germany.
It's been a year since I attended my first G-7 meeting. We've seen a lot since then.
Our recovery has taken hold, and a number of other G- 7 countries also are recovering. The
international community has come forward to support the historic transformation taking place
in Russia.
The meetings this weekend will assess the progress achieved over the past year and
consider the unfinished agenda ahead of us. Clearly. our first priority remains broadening and
extending the economic recovery throughout not only the G-7 economies but also throughout
the world economy.
In the United States, we have laid the basis for that recovery with our solid growth.
our declining budget deficit and the lowest inflation and interest rates in more than 20 years.
However, the situation in continental Europe and in Japan is not as good. Some useful steps
have been taken, but more needs to be done. We will want to discuss that with our partners.
In particular I'm anxious to learn how Japan intends to create the growth led by domestic
demand needed to cut its external surplus. That surplus clearly is acting as a drag on the
world economy.
Beyond that, we want to hear about Europe's effort to reduce the staggering burden of
rising unemployment by lowering interest rates and making structural economic reforms.
LB-665
(MORE)

\\'L' ~11sl1 \,ill mect \\ ith the nc\\ Russian economic team -- Finance :Ylinister Dubinin.

ECl)nl)mic \lir1lstcr Shl)khin. ~nd Ccntr~:d Bank Governor Gerashchenko, \Ve \vant to discuss
\\ ays th~lt lntern~ltil)nal SUPpl)rt can help their efforts to stabilize and reform the Russian
CCl)nl)mV 1'11c manaQinQ- director ()1' the International :Ylonetarv. Fund. as well as the
m~lI1ag.ing. dl rector l)1' the \\'orld Bank. will join us for part of our talks to review the efforts
l)f the mternational lTIstitutions,
~

Let me say that Russia has made progress in liberalizing and privatizing its economy -we' \'e seen that o\'er the past year -- but we want to see them bring intlation under control.
That's a \ery cruel tax on the Russian people. '}.;e \vill urge Russia to strengthen its
stabilization efforts. so it can obtain additional I\IF financial support. And we will urge them
to take advJJ1tage of \Vorld Bank support for structural reform and social programs,
Finally, we \vill continue our recent practice of holding informal discussions. The
chairmJJ1 of the meeting, German Fina.nce :vlinister \VaigeJ. will meet \vith you afterwards to
let you know what did and didn' t happen. However, we \\'on't be issuing any formal G-7
commumques.
-30-

TESTIMONY

OF

ROGER C. ALTMAN
INTERIM CHIEF EXECUTIVE OFFICER

OF THE

RESOLUTION TRUST CORPORATION

BEFORE THE

COMMITTEE ON BANKING J HOUSING, AND URBAN AFFAIRS
OF THE

UNITED STATES SENATE
10:00 A.M.
FEBRUARY 24, 1994

ROOM 534 DIRKSEN SENATE OFFICE BUILDING

LB-666

Good morning, Mr. Chairman and Members of the Committee. This is the final time I will
appear before Congress in my RTC capacity. Under the terms of the Vacancy Act, my
appointment expires on March 30, 1994.

It is the intention of the Administration to nominate a permanent CEO for this agency as

soon as possible. As the Chairman knows, we are quite far down the road in that selection
process, and it won't take much longer. Once a nomination is forwarded to you, we hope
that this Committee will act expeditiously. The RTC needs a full time chief executive, as
I've said many times.

Last year, we chose a fme candidate, Stanley Tate, and we regret that he withdrew his
nomination, 4 112 months after it was announced, and after Congress recessed for the
remainder of 1993. He withdrew on his own, not at our urging, and he would have done a
good job.

Let me also thank the Chairman and Members of the Committee for your efforts 10 secure
funding for the RTC. With your help, the RTC Completion Act was enacted last December.
That will make it possible for the RTC to complete its mission, close its doors and bring the
S&L cleanup to a close.

Here at the outset, I'd also like to note the RTC's activities in response to the earthquake in
California. Foreclosures in the affected area have been delayed, and staff and loan services

1

have been directed to help homeowners avoid delinquencies on mortgages held by the RTC.
We also have searched our inventory for properties that can be made available to FEMA for
shelter. So far, we have notified FEMA of 54 multifamily units and 47 single-family
residences that can be made available. Additional suitable properties will be directed to
FEMA as they are identified. There also is a temporary moratorium on new sales of
properties in the eanhquake area until full assessments of damages are made and the potential
for such properties as shelter is evaluated.

Let me tum now to a status report on the RTC. As you know, we are now in the last lap of
this thrift clean-up, which everyone hopes will never happen again.

The S&L collapse required the biggest financial rescue in recent history. Including monies
spent by the FSLIC in 1988, the thrift cleanup is expected to cost the American taxpayer
approximately $150 billion. Putting this into perspective, at present budget levels, this is
equivalent to 9 years of AFDC payments or 45 years of Head Start. At a time when we all
struggle to finance federal support of vital activities--from national security to education-these are sobering comparisons. We must strive to ensure that such a fiasco is never
repeated.

Mr. Chairman, when we inherited responsibility for this agency, it was not in a sound
condition. During the 1991 and 1992 period, it had been run with only one goal: resolve
institutions and sell the related assets as fast as possible and close its doors as soon as

2

possible. There was little interest or attention either to the internal soundness of the
organization or to opponunities for women and minorities which could be created by its
operations.

In addition, the RTC became one of the largest contracting organizations of all time, yet its
contracting procedures were poor. It was charged with auditing major contractors, but had
inadequate audit follow-up systems. It was selling assets in huge blocks, denying local
investors a shot at local properties they knew best. Despite being larger than almost any
American bank or securities fum, it had no full time chief financial officer; nor a permanent
general counsel; nor a business plan of any kind. Typifying this rush, a whole series of RTC
offices were closed in 1992, in effect, at the height of the agency's activities. This
contributed to severe staff turnover and weakened efforts in certain crucial areas, like the
pursuit of those with liability in thrift failures. And, these weaknesses had turned the RTC
into an object of much controversy.

,

We determined, Mr. Chairman, to concentrate on repairing the organization, not just
shoveling assets out the front door. This didn't require us to postpone the RTC's closing
date. Indeed, the agency will be out of business one year earlier than foreseen in the original
RTC statute. But, when Secretary Bentsen first testified on the RTC before this Committee.
almost exactly one year ago, he outlined management reforms to which we committed
ourselves. Most of these reforms were subsequently incorporated in the 21 management
reforms required by the RTC Completion Act. As indicated below, the reforms originally

3

called for by Secretary Bentsen have largely been completed. RTC's progress to date on all
21 reforms prescribed by the recently enacted RTC Completion Act is summarized in
Exhibit 1. Let me point out a few areas which we particularly emphasized.

Management Reforms

1.

Stren&tbened Contractinl Procedures

The agency's contract award procedures had often been violated in the past and our first
action here was to mandate compliance. Every RTC contractor and employee was advised
that contracts could only be secured through proper channels, which include only Warranted

Contracting Officers and Managing Agents for conservatorship institutions.

Some of these compliance problems reflected weak organizing principles. Contracts were
often let by the same employees responsible for overseeing them. Obviously, in the event of
a compliance problem, the employee had little incentive to draw attention to it. To correct
this, the Office of Contracts has been re-organized into two separate units, one for contract
solicitation and awards and another for contract administration.

4

Background investigation procedures for prospective contractors have also been beefed up;
training sessions have been conducted for contracting staff on improved contract oversight; a
monthly reporting system has been developed to monitor progress in promoting competition
by RTC offices; and the scope of contracting oversight has been substantially expanded,
along with more stringent contract controls. Contractor Oversight staffing has more than
doubled, from (118 to 265) and reviews of nearly 500 outstanding contracts were initiated in

1993.

Contracting Performance Compliance Reviews are performed on a regular basis, and
contracting procedures are again being reviewed as part of the 21 management reforms found
in the RTC Completion Act.

2.

Audit Follow-up

A new reporting system has been implemented to ensure that management responds to the

concerns expressed by auditors. The system now tracks and updates the status of all

Inspector General, GAO, and internal RTC flndings and recommendations, including
corrective actions.

5

PrQCe{iures and time requirements for resolving audit findings are also in place.
Management responsibility is assigned and certifications are required attesting to the
completion of plannoo management actions. I am pleased to say that the RTC is current in
following up on almost all GAO and OIG findings and is placing increased emphasis on
responding to internal RTC reviews.

3.

Comprebensive Business Plan

The RTC has completed a comprehensive Business Plan and copies have been sent to this
Committee. It is a highly detailed and, in my view, an impressive piece of work. The
Business Plan is intended to be a living document, and it will be updated as circumstances
warrant.

4.

A True Cbief rmancial Officer

A Chief Financial Officer has been on board since June 1993. Ms. Donna Cunninghame has

taken that helm very ably, as reflected in the improvement in internal controls at RTC.

6

5.

gpand opportunities for minorities and women

Mr. Chairman, one of our highest priorities has been to increase participation for minorities
and women in RTC activities, particularly contracting of all kinds and asset sales. I am '. !ry
pleased by the record we have built in this area.

Our rust step was to elevate, in 1993, the Minority and Women's Program (MWP) to the
Divisional level, and require that its head report to the CEO and serve on the Executive
Committee.

Then, we insisted that the MWP program be involved fully in the contracting process. It
now participates in virtually every phase of contract operations, including pre-solicitation,

solicitation, evaluation, selection, contract administration, and post-award activity.

We have taken action to expand the number of minority- and women-owned businesses
(MWOBs) receiving RTC contract solicitations. Source Selection Plans developed by the
contracting offices are reviewed to ensure equitable inclusion of MWOBs. An MWOB
database has been developed which centralizes the listing of certified finns. It has

significantly improved the process of developing source lists and there are now more than
1,100 certified MWOBs in the database.

7

During the proposal evaluation phase of the contracting process, MWP reviews joint venture
proposals and subcontracting plans submitted by prime contractors to determine if they meet
eligibility requirements.

To further improve contracting opportunities, the Division actively participates in Technical
Evaluation Panels (TIPs) for contracts over $50,000. And, it maintains effective
communication with the Contracting Officers and Contract Oversight Managers to assure
MWOB participation in smaller cases where fees are estimated to be below $50,000. The
MWP Division also has increased efforts to encourage SAMDA contractors to utilize
MWOBs as subcontractors.

Let's look at the record. First, on a cumulative basis since inception, the RTC has awarded
126,939 non-legal contracts nationwide, with 41,267 or 33 percent being awarded to
MWOBs (Exhibit 2). Of the $3.7 billion awarded in non-legal fees, $786 million (21
percent) has been awarded to MWOBs. Non-minority women received fees of $399 million,
or 11 percent of total fees. Ethnic minorities received $387 million, or 10 percent of fees.

Now, let's look at last year. In 1993, RTC paid non-legal fees of $500 million, with
MWOBs receiving 5155 million (31 percent). Non-minority women were awarded fees of
$54 million (11 percent). Ethnic minorities received S101 million in fees (20 percent).

8

Our commitment to maximizing opportunities for minorities and women is reflected in these
rising totals. The proportion of non-legal contracts awarded to MWOBs rose from 35
percent in 1992 to 43 percent in 1993. Over the same period, the proportion of fees going to
MWOBs rose from 22 to 31 percent.

The RTC also has continued efforts to encourage the use of minority- and women-owned law
firms (MWOLFs) as outside counsel. And, there have been significantly increased levels of
MWOLF participation. As of December 31, 1993, 1,083 MWOLFs were on the RTC Legal
Information System (RLIS), including 450 women-owned fIrms. MWOLFs represented 35
percent of all law firms on this system. Last year, MWOLFs received 553.8 million or 13
percent of all legal fees from the RTC, a big increase over the 537.6 million paid in 1992.
Minority-owned law firms received 535.7 million in 1993, way above the 523.1 million of
1992. Women-owned law firms received $18.1 million in fees in 1993, up from the $14.5
million received in 1992.

And, in 1993, 24 percent of all legal fees were billed by minority and women attorneys in
non-MWOLFs.

Beyond contracting, MWP also worked to improve asset acquisition opportunities for
minorities, women and small investors. During 1993, it participated in the Small Investor
Program (SIP), and the Judgments, Deficiencies, and Charge-Offs (mCs) initiative, which

9

had MWOB equity or MWOB subcontracting participation in about 80 percent of its bidders.
MWP also participated in activities to support the Affordable Housing Disposition Program.

On the resolution side, RTC will implement the provision of the RTC Completion Act
relating to acquisition of institutions or branches in predominantly minority neighborhoods.
Our interim rule defines the term "predominantly minority neighborhood" as any postal zip
code area in which 50 percent or more of the residents are minorities, unless the RTC has
determined that other reasonably reliable and readily accessible data indicate more accurate
neighborhood boundaries.

There will be a directive to implement this provision. It probably will define an institution in
a predominantly minority neighborhood as one whose home office is located in such a
neighborhood if deposits are taken and operations are directed from that office, or one that
has 50 percent or more of its offices in predominantly minority neighborhoods. The
directive will also spell out bidding procedures for institutions or branches in such
neighborhoods. These are likely to include a provision that, in bidding for institutions or
branches in such a neighborhood, if a minority bidder has bid within 10 percent of the high
bid (which has been made by a majority bidder), both the high majority bidder and the high
minority bidder shall have an opportunity to submit one more best and final bid (which can
be no lower than the high bid). This is within the spirit of the requirement in the Act that

minority bidders receive a meaningful preference while still maximizing return to the
taxpayer. Finally, minority bidders for institutions or branches in predominantly minority

10

neighborhoods will be offered interim capital assistance, will have an option to purchase
RTC assets at market values, and may be able to occupy branch offices owned by the failed
institutions and located within a predominantly minOrity neighborhood on a rent-free basis for
5 years.

6.

Improve RIC's professionalUability section CPLSl

PLS has been a particularly troubled area of RTC operations. There have been complaints
that the RIC was unfairly pursuing fonner S&L directors who had no real role in the
organization. There also have been criticisms at the other end of the spectrum, Le. that the
RTC was not sufficiently zealous in its pursuit of the "real crooks." As GAO recognized in
its mid-1993 report on this program, the primary problems have involved inadequate staffing
levels and an overall lack of experienced attorneys. The temporary nature of this agency has
made recruiting efforts more difficult. But, we have worked hard to increase the size and
training of PLS staff. Currently, there are 83 attorneys on staff, the largest total in the
history of the program. Additional PLS managerial positions were recently authorized to
improve oversight in this area.

Senior RIC and FDIC officials also are planning an accelerated merger of the RIC PLS unit
with its counterpart in the FDIC. This recognizes that the FDIC is a source of experienced

11

attorneys in this highly s~ializ.e<i area. Such a merger would help restore a needed sense of
stability to the program.

Let me briefly review the record of recoveries in this area. As of the end of 1993, RTC
PLS had obtained over $744 million in settlements and judgments, with total collections

amounting to just over $680 million. Legal fees and expenses through December 1993
totaled $259 million. Since a substantial portion of these expenses have been incurroo in
connection with matters that have not yet been resolved, the ratio of recoveries to expenses
will continue to improve in the future. In 1993, for example, recoveries exceeded $348
million, over 50 per cent of the total for the entire history of the program.

PLS has also been a leader in utilizing the services of MWOLFs. During a six month period
in 1993, for example, the headquarters Legal Services Committee studied MWOLF hiring

performance by the various Legal Division departments in the Washington office. The
headquarters PLS unit, which oversees the largest and most complex matters in the program,
made 60 percent of its total referrals during this period to MWOLFs, with some 39 percent
of total fees budgeted for these referrals allocated to these MWOLFs.

Finally, the effective prosecution of PLS claims continues to be one of the RTC's highest

priorities. Both the GAO and the OIG, investigating charges that the program had been

12

weakened by political influence and management efforts to undermine its effectiveness, found
no evidence that such forces were at work.

7.

Improved manaeement infonnatioD systems

Systems has been another troubled area. One weakness in RTC' s management information
systems has been the accuracy of the data contained in these systems. RTC has instituted a
corporate-wide data quality program that focuses on the verification of the data in all of
RTC's systems with an initial focus on RTC's 17 major information systems. To date, data
quality programs for seven of these systems have been developed, with the remaining ten
underway.

Another weakness has been that RTC management information systems have inadequately
met the business needs of the RTC. To address this problem, the RTC has created system
user groups to better identify its requirements, has allocated resources to better connect the
user groups with the builders of systems, and has established an Information Resources
Management Steering Committee to better communicate and coordinate information
management issues.

Finally, in light of the limited remaining life of the RTC, emphasis has shifted from systems
development and enhancement to the consolidation of resources and maintenance of the main
application systems with a view toward the eventual transition of systems to the FDIC.

13

8.

Appoint an audit committee

As discussed in Secretary Bentsen's testimony, an audit committee is in the process of being
formed, and is expected to begin its work shortly. It was necessary to await passage of the
Completion Act before this could be finalized.

9.

Establish an RTC/FDIC Transition Task Force

The RTC and FDIC developed a joint Consolidation Coordinating Committee that met

throughout the year. The recently-enacted RTC Completion Act mandates an RTC/FDIC
Transition Task Force that will assume the functions of this Committee. Current RTC

transition planning activity is discussed at the end of this statement.

The Operations and Fmancial Report

Depositor Protection aDd Resolutions Activity

Since its inception in August 1989, the RTC has resolved 680 institutions, more than 90
percent of those taken over (Exhibit 3). Resolution of these failed thrifts provided protection
for 23 million deposit accounts, with $204 billion in deposits and an average balance of about

14

$9,000. Although the final cost will not be known until the last asset is sold, the current
estimate is that these resolutions will cost the American taxpayer $81 billion.

The remaining 63 institutions continue to operate under conservatorship and held $18 billion
in deposits at the end of 1993. Enactment of the RTC Completion Act has now made it
possible to resume resolutions. As a result, the RTC is in the process of marketing these
remaining conservatorships. Resolution of these thrifts will occur by the summer of 1994
and is expected to cost $9 billion to $11 billion.

The RTC is also responsible for resolving any institutions that fail through a date before July
1, 1995. That deadline will be determined by the Chairperson of the Oversight Board. How
many additional thrift failures may occur will depend on many factors including the course of
the economy. In the current favorable climate of low interest rates and low inflation, the
number of failures is likely to be small. Any which do occur should be able to be resolved
expeditiously. Any authorized funds not needed for resolutions will not be used.

Asset Sales in 1993

In early 1993, we shifted the RTC's overall strategy from one of "speed at all cost" in regard
to resolutions and asset sales to a greater emphasis on ensuring that proper contracting

15

procedures are followed, that internal controls are tightened, and that small investors have
greater opportunities to compete for assets controlled by the RTC. As a result of these
policy changes, the original 1993 sales goals were scaled back. The 1993 goals were
lowered from book value sales and principal collections of $70 billion, with expected cash
proceeds of $55 billion, to book value sales and collections of $56 billion, with expected
proceeds of $42 billion.

We actually exceeded those targets. Book value sales and principal collections totaled $63
billion, and cash proceeds totaled $48 billion. Cash proceeds represented 76 percent of book
value reductions. This recovery rate was below previous years because the RTC's inventory
is increasingly dominated by poorer-quality assets.

Exhibits 4-8 provide historical perspective for these 1993 results.

From inception through December 1993, the staggering sum of $457 billion in book value of
assets have come under RTC control, as shown in Exhibit 4. The RTC has disposed of
$393 billion (book value), or 86 percent of the total, through sales or other collections. This
left $63 billion of book value assets under RTC management as of the end of 1993. As
shown in Exhibit 5, assets under RTC management at anyone time peaked at $186 billion at
the end of May 1990 and reached their lowest level, $63 billion, at the end of December
1993.

16

Through December 1993, the RTC disposed of 93 percent of all securities received, 92
percent of 1-4 family mortgages, 78 percent of other mortgages, 87 percent of other loans,
81 percent of real estate, and 62 percent of other assets (Exhibit 6).

Proceeds reached 5353 billion on the 5393 billion in book value reductions through the end
of December, or an average 90 percent of book value. Different types of assets received
very different recovery rates of return. Securities, for instance, received on average 98
percent of their book value while real estate received on average 56 percent of its original
book value (Exhibit 7).

Recovery rates have declined over time as the better quality assets were sold off. Cash
proceeds of sales and principal collections represented 97 percent of book value reductions in
1989-90, 93 percent in 1991, 85 percent in 1992 and 76 percent in 1993 (Exhibit 8).

RemajniDI

Asset Inventoa

Assets remaining under RTC management totaled $63 billion as of December 31, 1993.
Seventy-one percent of this inventory represents hard-to-sell assets--delinquent loans,
performing commercial mortgages, real estate, subsidiaries and other assets (Exhibit 9).

17

Projected 1994 Asset Sales

As detailed in our business plan, at book value amounts, projected sales and principal
collections for 1994 total $43 billion. Cash proceeds from these sales and principal
collections are expected to total $29 billion. The projected recovery rate in 1994 is 66
percent, lower than the 76 percent experienced in 1993 because of the growing proportion of
lower quality assets in RTC's inventory.

The asset disposition strategies that will be employed by RTC to achieve these goals are
discussed later in this statement. In implementing these strategies, a major role will be
played by the Small Investor Program.

Small Investor Promm

The Small Investor Program (SIP) was established in April 1993 to ensure that assets are
available for sale individually to small investors with moderate levels of capital. SIP offices
have been established in the RTC's Washington, D.C. headquarters and in each of the RTC's
field offices.

18

Under the SIP, individual offerings of real estate properties have been emphasized. Auctions
and sealed bid sales have become more frequent and geographically focused. Smaller loan
pools are being offered to allow buyers to purchase smaller, more geographically segmented
groups of loans. Minimum deposits on loan sales have also been lowered to increase the
participation of small investors.

The small investor, as defined by the RTC, is an individual or group of investors with the
capacity to purchase:

•

Real estate assets valued up to $5 million;

•

Loan pools up to $10 million (book value);

•

Subsidiaries valued from $5 thousand to $30 million; or

•

Equity investments from $4 to $9 million in joint venture transactions.

The RTC has aggressively expanded its outreach program to attract small investor
participation in virtually all of the agency s asset offerings. The SIP has sponsored "How To
I

Buy" seminars with all major real estate and loan offerings to ensure that local and regional
investors are informed of RTC purchasing and investment opportunities. More than 16,000
investors have participated in these seminars so far.

19

SIP has worked with the Depanment of Asset Marketing to expand the investor database for
direct mail marketing of RTC sales initiatives based on an investor's stated interest in asset
type and geographic location. At the end of December, more than 4,000 investors had
completed the RTC Investor Profile and were registered in the Small Investor Database. Of
those, 969 investors identified themselves as minorities and 799 investors indicated that they
were women or from women-owned firms.

Three national initiatives have been sponsored by the SIP, including:

•

the nonperforming loan auction of August 24·25, 1993;

•

the S-series; and

•

and the judgments, deficiencies, charge-offs, and small balance assets (IDes)
program.

The nonperforming loan auction held in August 1993 achieved the highest collection ever for
an RTC nonperfonning loan auction. The auction resulted in the sale of 306 loan packages,
composed of 11,200 loans, for $335 million. There were 155 registered bidders compared
with 103 for the March 1993 auction. More importantly ,one-third of the winners were new

buyers who had not participated in a prior RTC national nonperforming loan auction. The
new bidders at that auction: (a) were for the most part smaller companies (with a net worth

20

of $2 million or less or with five or fewer employees); (b) had a much higher preference for
small loan pools--those under $1 million, and; (c) were more interested in buying
geographically focused loan packages--Iocated in their own state or a bordering state. In
addition, 14 percent of the registered bidders surveyed identified their firms as either
minority- or woman-owned.

Affordable Housine

The RTC's Affordable Housing Disposition (AHD) Program has made it possible for many
low-and moderate-income families to acquire housing. From inception through December
31, 1993, the Program sold over 77,500 units for a total $1.17 billion. This includes 20,500

1-4 family properties (containing 24,200 units) sold to low- and moderate-income households
as well as nonprofit agencies and public agencies that rent and resell the units to low-income
families. It also includes 575 multifamily properties (containing 53,300 units) sold to entities
that rent at least 3S percent of the units in each property to low- and very-low income
households at restricted rents for the remaining useful life of the property. Recoveries under
the AHD Program, since inception, have averaged 73 percent of appraised value. As of the
end of 1993, the AHD program had about 4,000 single-family and 386 multifamily properties
remaining in its inventory.

21

Most AHD single-family properties have been sold through the 235 affordable housing sales
events targeted to first-time homebuyers held in 32 states. The RTC also uses a network of
66 community-based nonprofit housing organizations to provide an array of marketing

strategies to reach low-income families and minorities that are often by-passed by traditional
marketing methods. Approximately 40 percent of buyers at recent sales events were
minorities and 74 percent were first-time homebuyers. The average annual income of
households purchasing in the program was about $23,800, representing 61 percent of national
median family income.

With respect to the multi-family housing program, these properties are currently marketed
fust to public agencies, next to nonprofit organizations, and then to all other interested
buyers. This is in contrast to the program s earlier strategy of offering multi-family
I

properties on a competitive sealed bid basis. Nonprofit and public agencies are now eligible
for low down payment financing. Buyers are evaluated, in pan, on the degree to which they
can provide suppon services for their low-income residents. The RTC has sold 175
multifamily properties to nonprofit and public agencies and provided $82 million of seller
fmancing to these types of organizations. In addition, 325 nonprofit and public agencies
have purchased over 1,500 single family properties which are rented or resold to low-income
households.

Plans are currently underway for unifying the RTC's and FDIC's Affordable Housing

Disposition Programs as required by the RTC Completion Act. A joint working group has

22

been convened to develop this plan which is expected to be completed by mid-April 1994 and
implemented by mid-August 1994. The RTC is currently working with the Federal Home
Loan Banks and the Department of Housing and Urban Development to implement the RTC
Completion Act provision which expands the Housing Opportunity Hotline.

Other Asset Sales Strate&ies

The RTC has undertaken significant changes in its asset sales strategies beyond the Small
Investor and Affordable Housing Programs.

The RTC continues, where appropriate, to pursue bulk or portfolio sales, securitization, and
Joint Venture Initiatives. When choosing the best disposition strategy, the RTC considers the
following factors: asset characteristics, recovery experience, current market conditions, and
the volume of assets to be sold.

Portfolio Sales: In portfolio sales, RTC bundles large quantities of lower quality assets,
generally nonperforming commercial mortgages. This permits the RTC to sell a large
quantity of assets quickly and shift management and maintenance costs to the private sector.
There is, however, a restricted number of large investors with the resources necessary for
this type of transaction.

23

Auctions: Auctions are used to sell smaller assets of all types and quality with a regional
geographic focus. The primary advantage of auctions is quick sale and hence reduced
holding costs. A disadvantage is that only a limited volume of assets can be disposed of
through this method. The RTC is holding open-cry auctions more frequently. These are
used to sell a wide variety of real estate and most types of smaller balance nonperforming
loans. Smaller, geographically focused, local events are being planned instead of large

national initiatives.

Individual Asset Sales: Individual asset sales are best suited to real property or very

complex assets with limited marketability. Individual real estate properties are offered
through real estate brokers as well as in auctions and sealed bids. As required by the RTC

Completion Act, real estate is being marketed on an individual property basis for at least 120
days before being placed in a multi-asset sales initiative.

Securitization: Securitization is a sales technique whereby securities are issued, backed by

assets. Securitization is RTC's primary method for selling performing residential mortgage

loans. More recently, RTC has also securitized sub-performing and nonperforming loans.
The primary benefits of securitization are quick disposition of assets and superior prices
compared to whole loan sales. In addition, securitization requires minimal RTC staffing, and
the securities are attractive to a very broad investor base. From 1991 when the securitization

program began through December 1993, the RTC had completed 67 securitized performing
mortgage loan transactions disposing of $36.5 billion in book value assets. RTC's

24

securitization program has been studied by the Congressional Budget Office, which stated in
a report in July 1992 that "securitization may be the option most consistent with the RTC's
conflicting objectives. "

Other Matters

"Wbistleblowing" and Complaints

In September of last year, the Senate Banking Committee held oversight hearings where a
variety of allegations were made, including retaliation against whistleblowers. We strongly
support protection for whistleblowers.

I have taken several actions to address the allegations made by the individuals who testified
before the Committee. I issued a memorandum on October 4, 1993 to all RTC employees
strongly reiterating the RTC's policy prohibiting retaliation against whistleblowers. I also
established an Employee Ombudsman program to, among other things, augment the efforts of
the Inspector General in gathering all types of employee allegations. The Employee
Ombudsman reports directly to me on a weekly basis on the activities of the office. The
Employee Ombudsman Program appears to be well received by RTC personnel. As of
February 15, the program had received 116 inquiries, 96 inquiries had been closed and 20

25

were still pending. Additionally, the Office of the Inspector General has revised its internal
procedures for handling employee allegations of retaliation against whistleblowers by
encouraging employees to step forward and by protecting the identity of such employees.

As a means of supplementing the information revealed at the September hearings, we have
had conversations in person and by telephone with six of the individuals who testified before
the Committee. Two additional individuals were contacted, but declined interviews. During
these interviews we solicited comments, feedback and suggestions from the individuals on
how best to remedy the problems raised in their testimony. Some of these interviews were
insightful and have been useful in our efforts to remedy some of the management problems at
the RTC.

I want to underscore how seriously we have taken these allegations. Hundreds of hours have

been spent working to understand and resolve them. Our work on the allegations raised by
the people who testified, and others complaining of unfair treatment, continues. We have
given this a very high priority and I believe that we have made significant progress in this
regard.

26

Transition to the FDIC

The RTC Completion Act requires the RTC to terminate on December 31, 1995. The Act
also requires the RTC and the FDIC to establish an interagency transition task force to
facilitate the transfer of assets, personnel and operations from the RTC to the FDIC or the
FSLIC Resolution Fund in a coordinated manner. It must recommend which of the
management, resolution and asset disposition systems, and which of the management reforms

of the RTC should be preserved for the FDIC. It is required to submit its recommendations
to the Senate and House Banking Committees in January and July of 1995. These will serve

as a basis for decisions by the Secretary of the Treasury to transfer systems and personal
property used to operate the systems to the FDIC.

The RTC contingent of this joint group is John E. Ryan, Deputy Chief Executive Officer and

Ellen B. Kulka, General Counsel. The FDIC contingent is John F. Bovenzi, Director of

Depositor and Asset Services and Dennis F. Geer, Deputy Chief Operating Officer. This
joint committee has begun its work and now meets once a week.

This concludes my prepared statement. I would be happy to answer any questions.

27

Exhibit 1

Status Report
RTC Completion Act
Management Reforms Section 3(a)

ORGANIZATIONAL CHANGES

OBJECTIVE:

Create a division of Minority and Women's Programs whose head is a
vice president and serves on the RTC's Executive Committee (Reform 4)

STATUS:

CEO resolution 93-CEO-21 created the position of Vice President of
Minority and Women's Programs on April 13, 1993.
Johnnie Booker was appointed as Vice President of MWP on April 13,
1993 via CEO resolution 93-CE0-22.
CEO resolution 93-CEO-23 dated April 13, 1993 appointed the Vice
President of MWP to the RTC Executive Committee.
CEO resolution 94-CE0-29 dated January 13, 1994 provided a position
description for the Vice President for MWP.

1

OBJECTIVE:
Appoint a Chief Financial Officer reporting directly to the CEO with no
operating responsibilities other than as CFO as determined appropriate by
the Oversight Board. (Reform 5)

STATUS:
Interim CEO Altman signed 93-CE0-24 creating the position of CFO on
July 13, 1993.

CEO resolution 93-CEO-25 appointed Donna Cunninghame as the RTC's
Chief Financial Officer on July 13, 1993.
CEO resolution 93-CE0-26 dated July 13, 1993 delegated specific
authorities to the CFO.
Corporate acccunting, financial management, and control functions and
appropriate Headquarters and field organizations have been assigned to the
Chief Financial Officer.

2

OBJECTIVE:
Appoint an Assistant General Counsel for Professional Liability within the
Legal Division and Report to Congress semiannually (on April 30 and
October 31 of each year) on litigation. (Reform 10)
STArns:
Thomas Hindes has been selected to fill the position of Assistant General
Counsel for Professional Liability.
Reports on RTC litigation will be included in RTC's Semi-annual Report
to Congress on an on-going basis.

3

OBJECTIVE:

Appoint a Vice President for Minority and Women's Programs, a Chief
Financial Officer, an Assistant General Counsel for Professional Liability,
a General Counsel, and a Deputy Chief Executive Officer. Failure to
make these appointments constitutes failure to comply with requirements
necessary for securing funding in excess of $10 billion. (Reform 13)
STATUS:
Johnnie Booker holds the position of Vice President for Minority and
Women's Programs (see Reform 4).
Donna Cunninghame holds the position of Chief Financial Officer (see
Reform 5).
Thomas Hindes holds the position of Assistant General Counsel for
Professional Liability (see Reform 10).
Ellen Kulka was appointed as General Counsel effective January 17, 1994.
John (Jack) Ryan was appointed as Deputy Chief Executive Officer
effective January 4, 1994. CEO resolution 94-CEQ-29 dated January 13,
1994 created the position of Deputy CEO, consistent with the RTC
Completion Act.

4

OBJECTIVE:

Create Client Responsiveness Units in each RTC regional office reporting
to the Corporation's Ombudsman. (Reform 21)
STATUS:
Client Responsiveness units have been established at each RTC field
office, including Atlanta, California, Dallas, Denver, Kansas City, and
Valley Forge.
All field Vice Presidents have been contacted to assure adequate staffing
of the program in each field office to assist the public.
A directive will be issued clarifying the role and responsibilities of each
unit and emphasizing that all RTC field offices must maintain Client
Responsiveness departments at their respective sites.

5

ASSET DISPOSmON

OBJECTIVE:
Promulgate a regulation implementing a 120-day waiting period before
selling real property assets on other than an individual basis and requiring
that portfolio sales or sales in connection with any multi-asset sales
initiative made after the 120-day waiting period be justified in writing.
(Reform 2)

STATUS:
A policy was established on April 15, 1993 (through memo 93-AMSD(031) implementing these provisions. The regulation required by the
Completion Act is being drafted.

6

OBJECTIVE:

Require a qualified person or entity to prepare a written management and
disposition plan on an asset·by·asset basis or provide a written
determination that a bulk transfer would maximize net recovery with
opportunity for broad participation by MWOBs for non performing real
estate loans with a book value of at least $1 million and real property with
a book value of at least $400,000. (Reform 3)
STATUS:

A directive is in process modifying current policy to comply with this
requirement.
A regulation will be promulgated to defme "asset" and "qualified person
or entity".

7

CONTRACTING
OBJECTIVE:

Modify contracting procedures for MWOBs by: 1) reviewing and revising
procedures for reviewing and qualifying applicants for Basic Ordering
Agreements to ensure that MWOBs and small businesses are not
inadvertently excluded; 2) reviewing existing lists of eligible contractors
to ensure maximum participation by MWOBs; and 3) promulgating a
regulation to implement the new requirement providing for maximum
participation by MWOBs in lists of eligible contractors. (Refonn 6)
STATUS:

All solicitations for new contracts and renewals of existing contracts
undergo, on a continual basis, an extensive review to identify any
inadvertent exclusionary language. More explicit direction is forthcoming
in the Contracting Policy and Procedures Manual (CPPM) revision due in
March 1994.
For each solicitation, lists are reviewed to include MWOB contractors,
and MWP staff input is solicited.
A draft Interim Final Rule (which would amend the current MWOB
Interim Rule) is being amended to include the requirement of maximum
participation by MWOBs in lists of eligible contractors.

8

OBJECTIVE:

With regard to contracting systems and contractor oversight: 1) maintain
procedures and uniform standards for entering into contracts with private
contractors and overseeing the performance of contractors and
subcontractors; 2) review contract oversight to ensure that sufficient
resources are available; 3) maintain uniform procurement guidelines for
procurement of basic goods and administrative services; (Reform 7)
STATUS:

These procedures and standards have been reviewed and strengthened and
are included in the CPPM Version 5 distributed on July 21, 1993 and
again in Version 6 on December 15, 1993.
The Office of Contractor Oversight and Surveillance evaluated their
staffing needs, increased staffing from 118 to 265, and conducted
extensive training during 1993.
Uniform procurement guidelines are maintained in the CPPM and version
7.0 of the CPPM is being updated to fulfill any other provisions required
by the Act. Version 7 is expected to be published in March 1994.
The CPPM sets fonh the policies and procedures necessary for RTC
contracting.
The Warranted Contracting Officer program was
implemented to ensure that only appropriate and knowledgeable staff are
involved in the contracting process.
Requirements for Warranted Contracting Officers for non-legal contracts
were published in the Federal Register in January 1994.

9

OBJECTIVE:

Establish guidelines for achieving a reasonably even distribution of
contracts among subgroups of Minority and Women-Owned Businesses
STATUS:

The Draft Interim Rule on the Minority and Women-Owned Business and
Law Firm Program also sets forth the requirement for the RTC to
establish guidelines to achieve a reasonably even distribution in
contracting among minority subgroups.
The CPPM is being revised to incorporate this provision of the
Completion Act to establish guidelines for achieving reasonable parity.

10

OBJECTIVE:
Establish reasonable goals for MWOB subcontracting and prohibit any
contracts, with certain exceptions, of $500,000 or more unless the contract
has a subcontract with an MWOB and compensates it commensurately.
(Reform 18)
STATUS:

The Draft Interim Rule on the Minority and Women-Owned Business and
Law Firm Program has been updated to require subcontracting of work to
minority and women owned firms for all awards with total estimated fees
equal to or greater than $500,000.
The CPPM is also being updated to reflect this requirement.

11

OBJECTIVE:

Promulgate a regulation to provide sanctions for violations of MWOB
subcontracting and joint venture requirements. (Reform 16)
STATUS:
The Draft Interim Rule on the Minority and Women-Owned Business and
Law Firm Program has been updated to outline sanctions for noncompliance with subcontracting requirements. Remedial action could
result in contract suspension, exclusion or termination.
Contracting documents are being revised to incorporate reference to these
sanctions.

12

OBJECTIVE:
Apply competitive bidding procedures in awarding contracts that are no
less stringent than those currently in effect. (Reform 19)

STArns:
The Office of Contract Policy and Major Dispute Resolution was created
in December 1993. Among its duties is to assure that any change in
contracting procedures do not result in any diminution in the competitive
bidding process.

13

INTERNAL CONTROLS

OBJECTIVE:

The Oversight Board is directed to establish and maintain an Audit
Committee to monitor RTC's internal controls, monitor audit findings and
recommendations, maintain a close working relationship with the IG and
GAO, report on findings and recommendations of the Committee, and
monitor financial operations. (Reform 8)
STATUS:
An audit committee is in the process of being formed and is expected to

commence its work shortly.

14

OBJECTIVE:
Respond to problems identified in audits or certify to the Oversight Board
that no action is necessary or appropriate. (Reform 9)
STATITS:

Circular (1250.2), Mana~ement Decision Process and Audit Followup,
which prescribes procedures and time requirements for resolving audit
findings, recommendations, and corrective actions was issued on July 20,
1993.
A management reporting system to track and update the status of all IG,
GAO, and internal audit report findings was implemented on June 30,
1993.
Status and management reports have been produced which identify aging
open issues to alert senior management since October 21, 1993.

Procedures have been established in the audit follow up circular to require
certifications from responsible program managers attesting to the
completion of planned corrective actions.
Scheduled evaluations and subsequent reviews will verify effectiveness of
completed corrective actions.
Reports have been provided and meetings held with GAO, IG, and the
Oversight Board, beginning in late 1993 and continuing on an on-going
basis.
The audit follow up circular requires management to certify the rational
and legal basis for not implementing an audit recommendation or an
agreed upon corrective action. RTC will provide the Board with a copy
of such certification statements.

15

OBJECTIVE:

Maintain effective internal controls against fraud, waste, and abuse.
(Reform 12)
STATUS:

Circular 1250.1, Internal Control Systems established RTC's internal
control program and requires managers to:
- Identify activities or functions (Assessable Units) subject to risk.
- Conduct an assessment and rate the susceptibility of the function or
activity to risk (Vulnerability Assessment).
- Schedule high risk functions for annual examination (Management
Control Plan).
- Conduct detailed examination (Internal Control Review) of function to
determine if internal controls and procedures are current, adequate, and
cost effective.
- Develop and implement corrective actions to resolve deficiencies and
strengthen controls.
Field offices have redesigned and enhanced their internal control programs
to provide preemptive review of high risk areas and evaluation of
implemented corrective actions for effectiveness.
Headquarters organizations conduct reviews of field offices and fmancial
service centers operations for compliance with Corporate policies and
procedures, and for effectiveness of internal control activities.
SpecjaJiU(i program initiatives such as the Loan Servicer Oversight
Program have been implemented to address specific management and
internal control concerns.

16

RESOLUTIONS
OBJECTIVE:

Subject to the least cost test, give a preference to offers from MWOBs in
considering offers to acquire institutions or their branches, located in
predominantly minority neighborhoods and give a fust priority to the
disposition of the performing assets to such acquirers and define by
regulation a predominantly minority neighborhood. (Reform 17)
STArns:
An interim rule defining "predominantly minority neighborhood" was
approved by the CEO on February 15, 1994 and will be published in the
Federal Reeister. The rule generally defines predominantly minority
neighborhood as a postal zip code area with more than 50 percent
minority population unless the RTC has determined that other reasonably
reliable and readily accessible data indicate more accurate neighborhood
boundaries.
Although not yet finalized, a directive is currently being developed to
implement the minority preference in resolutions.
As currently
contemplated, the directive will establish procedures to:
•

Define institutions In predominantly minority
neighborhoods as institutions headquartered in
predominantly minority neighborhoods or with 50 percent
or more of its offices in predominantly minority
neighborhoods;

•

Provide that in the event a minority bidder is within 10
percent of a high majority bid for an institution or branches
in a predominantly minority neighborhood that both shall
submit best and final bids;

•

Provide minority bidders for institutions and branches in
predominantly minority neighborhoods with interim capital
assistance, rent free offices for five years, and earning
assets at market prices.

17

MANAGEMENT
OBJECTIVE:
Establish and maintain a comprehensive Business Plan. (Reform 1)
STATUS:

An RTC Business Plan was transmitted to the House and Senate Banking
Committees on December 15, 1993. It will be updated as circumstances
warrant.

18

OBJECTIVE:
Include in the annual report to Congress an itemization of the expenditures
of funds provided by the RTC Completion Act and a list of the salaries
and other compensation paid to directors and senior executive officers at
RTC-controlled institutions. (Reform 14)

STATUS:
This information will be included in RTC's annual report to Congress,
with the first such report expected June 30, 1994.

19

OBJECTIVE:

Modify existing RTC procedures for using outside counsel so that in-house
counsel would be preferred, and limiting the use of outside counsel to
those instances where it would provide the most practicable, efficient and
cost effective resolution to the action and only under a negotiated fee,
contingent fee, or competitively bid fee arrangement. (Reform 20)
STATUS:

RTC is currently revising the Legal Services Committee's procedures for
retention of outside counsel to comply with this provision. The revision
will apply to Washington and all field offices.

20

OBJECTIVE:

Maintain an effective Management Information System. (Reform 11)
STATUS:

Information resources support has been prioritized to meet key goals and
functions by evaluating existing systems to confirm that all essential
corporate management information needs have been met and will continue
to be met.
The Department of Information Resources Management (DIRM) has
established and maintains an on-going communication with RTC client
offices regarding the effectiveness and qualify of RTC's major automated
information systems to ensure they meet management's information
requirements.
DIRM continues to work with system users to enhance information
systems to adequately support business needs. Enhancements are
approved through the existing management and committee structure and
are implemented with the interaction of system users and management.
DIRM continue to enforce its requirement that costlbenefit analyses be
conducted and approved prior to initiation of new systems development
and any enhancement activities. A directive outlining policies and
procedures related to cost/benefit analyses is being developed.
As a major component of an ongoing effort to improve data quality, a
corporate-wide Data Quality Program was implemented through a
directive issued on November 11, 1993.
Individual Data Quality Action Plans are being developed to assess the
quality of data in each of RTC's 18 primary automated information
systems and establish initiatives to improve data where needed. To date,
10 Data Quality Plans have been completed and 8 are under development.
Information Resources Management (IRM) field reviews have been
conducted in all six RTC field offices. These reviews help management
assess the quality and effectiveness of IRM operations.

21

~:rnIT

2

Summary of MWOB Non-Legal Contracting
Inception through December 31, 1993

Ethnic/Gender Identity
All Contracts

Awards

%

Estimated
Fee Value
lin millions)

%

126,939

100.0%

$3,735.8

100.0%

Non - Minority Men

85,672

67.3%

$2,949.6

79.1%

MWOB

41,267

32.6%

$786.2

20.8%

Non-Minority Women

27,391

21.7%

$399.1

10.6%

All Minority

13,876

10.9%

$387.1

10.1%

DJUBIT 2
Summary of MWOB Non - Legal Contracting
Calendar Year 1993

I
I

I

Ethn ie/Gender Identity

Awards

%

Estimated
Fee Value
{in millions)

%

All Contracts

22,986

100.0%

$500.3

100.0%

Non - Minonty Men

, 2,997

56.5%

$345.2

69.0%

9,989

43.4%

$155.1

30.9%

Non-Minority Women

6,617

28.8%

$53.8

10.6%

All Minority

3,372

14.6%

$101.3

20.3%

MWOB

EXHIBIT 3

Through February 7, 1994, RTe took over
743 thrifts, closed 680.
Total No.: 743
No. Closed: 680

No. in Conservatorship:

63

D:EIBIT

~

Through 1993, the RTC had disposed of more
than three-fourths of the assets that have come:
under its control.

I

I
I

I

Book Value
Sold and Collected
$393 billion

\

\
I

I

Book Value of Assets: $457 Billion

EXHIBIT 5

Assets under RTe management peaked at the end of May 1990.
Billions of Dollars
$~~j--------------------------------------------------~

$150

Conservatorship Assets

$100

$50

$0 9

+1989

12

~ ~- .

3

6

9

12

1990 _____

3

6

t t___ ..-

9
1991

12

--.~+

3

6

9

1992-----

12

3

~ ~ ...

6
- .. 1993

9

12

+

EXIUBIT 6

As of December 31, 1993, the RTe had disposed of 93% of its
securities, 92% of home mortgages, and 81 % of real estate owned.

1-4 Family Mortgages

Other Mortgages

$157

93%

Securities

92%
~I------~------~------,_------~

$113
I

$80

78%
~I------~------~--~

Total Book Value Reduction: $393
Total Book Value Remaining:
$63
I

$35

87%

Other Loans

D Book Value Reduction

81%

Real Estate

Book Value Remaining
Other Assets I-

o

62%

25

50

75

100

125

150

175

Assets Under ATC Control (Dollars in Billions)
-~--

---

------

EXlUnIT 7

Through 1993, recoveries from sales and collections have averaged
90% of original book value.

Securities
1-4 Family
Mortgages
Other
Mortgages

$146!

98%

104

96%

I
I

~I------~-----'-----'r-----II------

t

$62

79%

Total Reboveries: $353
I
Total Book Value: $393

Other Loans

D

Real Estate

Cash
Recoveries

erAssets

o

20

40

60

80

100

120

140

Book Value Sales and Collections ($ Billions)

160

180

EXHIBIT 8
-----~

As the composition of RTe's inventory has changed, recovery rates
have dropped from 97% in 1989 and 1990 to 76% in 1993.
I

1989

$26
97%

'

~otal Reco~erles:

$353

~otal

$393

Book yalue:

I
i

1990

97%

1991

93%

1992

$11

D Cash
Recoveries

85%

Discount from
Book Value

1993
$0

$20

$40

$60

$80

Note: Dollar amounts are net of all putbacks recorded to date.
---

$100

$120

$140

$160

$18

E:<IUrlIT 9

r------------------------------------------------------------------------------------------------------------------------------------------

Hard-to-sell assets represented 71 % of all assets under RTe
control as of December 31, 1993.
Performing 1-4 12%
Family Mortgages
Cash and Investment
Securities 17%
Other Performing 12%
Mortgages

Other Performing 4%
Loans
Other Assets 24%

Delinquent Loans 220/0
Real Estate

90/0

Hard-to-Sell Assets: $45 billion
Total Assets: $63 billion
- _._----

--

------ -

-------------

DEPARTMENT

OF

THE

lREASURY

TREASURY

NEWS

FOR RELEASE AT 2:30 P.M.
February 25, 1994

CONTACT:

Office of Financing
202/219-3350

TREASURY'S 52-WEEK BILL OFFERING
The Treasury will auction approximately $16,500 million
of 52-week Treasury bills to be issued March Ie, ~994. This
offering will provide about $1,675 million of new cash for the
Treasury, as the maturing 52-week bill is currently outstanding
in the amount of $14,829 million. In addition to the maturing
52-week bills, there are $24,979 million of maturing I3-week and
26-week bills.
Federal Reserve Banks hold $9,341 million of bills for their
own accounts in the three maturing issues. These may be refunded
at the weighted average discount rate of accepted competitive
tenders.
Federal Reserve Banks hold $3,807 million of the three
maturing issues as agents for foreign and international monetary
authorities. These may be refunded within the offering amount
at the weighted average discount rate of accepted competitive
tenders. Additional amounts may be issued for such accounts if
the aggregate amount of new bids exceeds the aggregate amount
of maturing bills. For purposes of determining such additional
amounts, foreign and international monetary authorities are considered to hold $985 million of the maturing 52-week issue.
Tenders for the bills will be received at Federal
Reserve Banks and Branches and at the Bureau of the Public
Debt, Washington, D. C. This offering of Treasury securities
is governed by the terms and conditions set forth in the Uniform
Offering Circular (31 CFR Part 356, published as a final rule on
January 5, 1993, and effective March 1, 1993) for the sale and
issue by the Treasury to the public of marketable Treasury bills,
notes, and bonds.
Details about the new security are given in the attached
offering highlights.
000

Attachment

LB-fih7

HIGHLIGHTS OF TREASURY OFFERING OF 52-WEEK BILLS
TO BE ISSUED MARCH 10, 1994
February 25, 1994
Offering Amount .

$16,500 million

Description of Offering:
Term and type of security
CL'SIP number
Auction date
Issue date
Maturity date
Original issue date
Maturing amount.
Minimum bid amount
Multiples .

364-day bill
912794 Q8 0
March 3, 1994
March 10, 1994
March 9, 1995
March 10, 1994
$14,829 million
$10,000
$1,000

submission of Bids:
Noncompetitive bids
competitive bids

Accepted in full up to $1,000,000
at the average discount rate of
accepted competitive bids.
(1) Must be expressed as a discount rate
with two decimals, e.g., 7.10%.
(2) Net long position for each bidder
must be reported when the sum of the
total bid amount, at all discount
rates, and the net long position are
$2 billion or greater.
(3) Net long position must be reported
one half-hour prior to the closing
time for receipt of competitive bids.

Maximum Recognized Bid
at a Single yield

35% of public offering

Maximum Award .

35% of public offering

Receipt of Tenders:
Noncompetitive tenders
competitive tenders.
Payment Terms .

Prior to 12:00 noon Eastern Standard
time on auction day.
Prior to 1:00 p.m. Eastern Standard
time on auction day.
Full payment with tender or by charge
to a funds account at a Federa 1 Reserve
bank on issue date.

DEPARTMENT

OF

THE

TREASURY

NEWS

'IREASURY

1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C.· 20220· (202) 622-2960

FOR IMMEDIATE RELEASE
FEBRUARY 26, 1994
STATEMENT OF TREASURY SECRETARY LLOYD BENTSEN
Good evening. I would like to thank Minister Waigel for a very constructive meeting. It's good
to be back in Germany.
Let me start with our discussions on the world economy.
There was a general sense that the worst of the recent downturn is behind us. There are
encouraging signs in most of the industrial countries. We have begun to lay the basis for
sustained recovery.
Inflation has receded. Long-term interest rates have come down in all G-7 countries. There has
been some progress on the structural side. Credible programs to- reduce budget deficits have
been put in place where necessary. And the successful conclusion of the Uruguay Round has
strengthened the multilateral trading system.
It was generally agreed, however, that more needs to be done.

Unemployment remains
unacceptably high. We need to create more demand to create more jobs.

For these reasons, we continued to urge Japan to live up to its commitment to put in place a
substantial and effective program to strengthen domestic demand, reduce its large trade surplus
and open its markets. This is in the interest of all of Japan's trading partners. And, given the
progress Europe has made on-inflation, we believe the authorities should take advantage of any
opportunities to reduce interest rates further.
We started making these points about this time last year. The strategy was right then and it
remains valid today. We have seen some movement, but we need to see more if we are to
succeed in generating sufficient growth in employment.
Now, let me turn to Russia.

(MORE)

L13-668

Russian Finance Minister Dubinin assured us that his Government was committed to continue
the process of economic reform. He told us about his Government's deliberations on how to
stabilize inflation over the course of 1994. And, he told us about his budget preparations.
I am encouraged by the fact that Russia's economic team is pressing to carry on with reform.
As I see it, the privatization is impressive, but the stabilization effort is disappointing. We
urged them to strengthen their efforts to bring inflation under control. That is essential in
creating a market economy, and in raising the investment needed to modernize the country.
We told the Russians that a strong stabilization program is needed to trigger more support from
the IMF. And we encouraged them to take advantage of World Bank loans that will support
structural reform and help address social problems. We also heard from senior officials of the
IMF and World Bank about their efforts to provide support for Russia's transformation. We
want these institutions to be sllre that reforms are moving before they lend, so their financial
support will be lIsed effectively. But we also want them to do all it can to understand the
political realities of reform, to help make it possible for Russia to meet the IMF's conditions and
gain access to IMF support.
I would happy to take a few questions.
###

DEPARTMENT

OF

THE

TREASURY

NEWS
178<)

1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C.· 20220· (202) 622-2960

FOR IMMEDIATE RELEASE
February 28, 1994

BENTSEN ANNOUNCES SHOTGUN RECLASSIFICATION
AND BRADY LAW IMPLEMENTATION
Treasury Secretary Lloyd Bentsen Monday announced the reclassification of
several semiautomatic shotguns into the same category as machineguns.
The shift to the "destructive device" classification will require that the
approximately 18,000 weapons in existence be registered with the Bureau of Alcohol,
Tobacco and Firearms. In addition, it imposes a new annual tax of $1,000 on
manufacturers, requires an additional $500 annual license tax from dealers who wish to
sell the weapons, and imposes a $200 transfer tax on future sales.
"These aren't sporting weapons," said Bentsen in remarks prepared for delivery at
the Third District police station in the District of Columbia. "These are destructive
devices, pure and simple. They were designed for combat and have no sporting use or
purpose."
The weapons involved in the reclassification are sold under the names USAS-12,
Striker, and Street Sweeper. In addition to registering the weapons with ATF, owners
must be fingerprinted and photographed, and obtain a certification from a law
enforcement officer that their possession of the weapon does not violate the law.
Bentsen also announced that the new Brady Law, requiring a five-day waiting
period for a handgun purchase, along with a background check, is now in effect. He
praised ATF for its efforts to implement the statute, named after former presidential
Press Secretary James Brady. Notification of the statue's provisions and forms related to
administration of the law were sent to the 284,000 firearms dealers in the country.
Bentsen also praised officers of the Third District for an innovative program to
remove guns from Washington's streets.

-30-

LB-669

DEPARTMENT

TREASURY

OF

THE

TREASURY

NEWS

1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C.· 20220· (202) 622-2960

FOR IMMEDIATE RELEASE
Text as prepared for delivery
February 28, 1994

Remarks of Treasury Secretary Lloyd Bentsen
Third District Police Station
Washington, D.C.

LB-670

REMARKS OF TREASURY SECRETARY LLOYD BENTSEN
THIRD DISTRICT POLICE STAnON
WASHINGTON, D.C.
FEBRUARY 28, 1994
Good afternoon. I want to talk about something very important to the Treasury
Department -- getting guns off the street. There are plenty of them out there, too many
of them out there.
Inspector Collins and Lt. Hobson gave me an excellent briefing a few minutes ago
about the new, innovative program here in the Third District to take guns off the streets.
I had the opportunity to meet the officers involved in this dangerous work. I want to
compliment all of you on. You've had some remarkable successes, such as blocking a
would-be murderer from reaching a weapon and using it. In a very real sense, your
efforts are saving lives.
Before I talk about the Brady Bill and one other issue, there is something else I
want to say. In the past year, the Treasury Department has lost seven of its own in the
line of duty -- four from A TF near Waco and three from Customs in a helicopter crash.
Here in the District, you buried Officer Jason White, a victim of handgun violence, the
day after I gave my first speech of the year on crime. As we look forward, every step we
take to remove guns from the street, to reduce the flow of drugs, to combat crime,
honors their memory, and protects citizens and officers everywhere.
That's what we're doing today. I want to make two announcements related to gun
control.
First, I want to announce that as of today, in every state and territory that doesn't
already have something similar on the books, anyone who wants to buy a handgun from
a dealer has to wait five days to take delivery and must undergo a check to make sure
they're not a felon. The Brady Bill has finally become the Brady Law. It's the most farreaching firearms Jaw in a quarter of a century, and it's going to do something about
keeping guns off the streets.

2

I lere in the District, you can't sell guns, but you and and I know there are guns
()ut un the strccb. Thc\' cO~1e in from other jurisdictions. Let me give you a case of
h()w the Brady Law will' help. There was a man from Martinsburg, West Virginia, who
ll;ld a long list of felony drug convictions. He bought 25 guns in Martinsburg, went up to
Phi lade lphia where he traded them for drugs. And then he brought the drugs back to
\tartinsburg. Fortul1:ltely, he went to jail. But those guns were out on the streets in
Philadelphia. They were used in armed drug crimes and assaults. They could just as
\\;ell have heen here, in Washington.

John Magaw and his team at ATF have done a tremendous job in getting ready
tur the Brady Law. It was no easy task to develop the regulations, work with the 284,000
fi rearms dealers, the law enforcement agencies, and the common carriers. I want to
L'()I1lIl1CIHJ John and his team for that effort.
This hill is also a tribute to the hard work and courage of Jim and Sarah Brady.
There is one other thing I want to talk ahout this afternoon, and that's these 12
gauge se rniautomatic shotguns you see on the table here. I use the word shotgun
~[(h·isedly. Frankly, wretched excess might be better.
'-

One of these is called the U-S-A-S-12. The others go by the names Striker and
Street Sweeper.
Let me tell you a little bit about these guns. I'm a sportsman. I use shotguns.
This isn't exactly what I'd take on a duck hunt -- unless I wanted to have shredded duck
szechuan, and do the shredding on the spot.
These aren't sporting weapons. You don't lead a target with this, you fill people
full (1f kad with it. You know what kind of things they say in their advertising
II tl' r~\ lure? Let me quote from a magazine ad I saw: "Why try clean-ups with inadequate
equipment. Buy the machine designed to clean thoroughly on the first pass." Clean
\\ h~lt'? Ducks? More like innocent bystanders, more like police officers.
I ha\'c consulted with the ATF and reached a decision about these weapons.
Effectiw tomorrow morning, these \'.'eapons will be classified just as we classify
11UL'tllf1cgurb. Thl'~C arc uestructi\,e de\'ices, pure and simple. These are for combat~
They ha\'c no sporting use or purpose.

Tilt manufacturtrs are heing informed of this action at this hour. It doesn't mean
thl'Y cm't keep making them, but we will require that they pay a special annual tax to
[1Ul1uta(turc thiS wcapun, that dealers pay a special annual tax to sell them and that any
future ~al-: Glrry a S200 transfer tax.
'

3

We will also require that anyone who owns one of these register it with the ATF
within 30 days of being notified of the new classification, be fingerprinted and have their
picture taken, and obtain a certification from a local law enforcement officer that their
possession of the weapon does not violate the law. By the way, having an unregistered
weapon like this means a fine of up to $250,000, 10 years in jail, or both.
These weapons are already flatly banned by the states of California and New
Jersey, and the Striker is banned in Virginia. I have gone as far as the existing law
allows me in declaring them to be destructive devices. It's a start, another step like our
proposal to raise gun dealer license fees and review Federal Firearms license applicants.
Let me add that Senator Feinstein's amendment to the crime bill would ban these and
other assault weapons, and we endorse that amendment.
There are over 200 million guns in the United States. There are law abiding gun
owners and sportsmen who use weapons in legitimate settings and legitimate
circumstances. But there are guns that have no purpose or legitimate use in our society,
in the hands of people who have no business having them. We intend to see that these
people are denied access to guns, and that these weapons are taken off the streets.
The officers of the Third District are doing that here, gun by gun, corner by
corner, block by block. They're doing their part. And the Clinton Administration will
do its part -- with 100,000 more officers out on patrol, with more prosecutors for gang
cases, with an effective new Brady Law, and legislation to further strengthen our efforts
against violence in America.
Thank you very much.
-30-

DEPARTMENT

IREASURY

OF

THE

TREASURY

NEWS

1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C.· 20220· (202) 622-2960

BACKGROUND ON SHOTGUN CLASSIFICATION

•

On May II, 1993, Handgun Control, Inc., petitioned the
Secretary to cl~ssify the USAS-12, tr~ Striker12/Streetsweeper, and the Mossberg Bullpup as
destructive devices under the National Firearms Act
(NFA) .

•

On September 13, 1993, former Director Higgins, ATF,
asked for a review of the 3 shotguns to determine
whether they should be reclassified as destructive
devices.
A working group was assembled to perform the
review.

•

Section 5845 (f) (2) of the NFA, classifies certain
weapons as "destructive devices" which are subject to
the registration and tax provisions of the NFA.
Section 5845 (f) (2) includes within the definition of
"destructive device" shotguns with a bore of more than
one-half in diameter which are not generally recognized
as particularly suitable for sporting purposes.

•

On February 9, 1994, the Associate Director, Compliance
Operations, recommended t~dt the USAS-12 and the
Striker-12/Streetsweeper be classified as destructive
devices, since both weapons have a bore of more than
one-half inch in diameter and are not generally
recognized as particularly suitable for sporting
purposes.
The Director, ATF, agreed with the
recommendation and advised Compliance to publish ATF
rulings classifying the two shotguns as destructive
devices.

•

The Associate Director did not recommend that the
Mossberg Bullpup be classified as a destructive device,
since the physical features of the weapon do not
indicate that it is a nonsporting weapon.

•

The Striker-12/Streetsweeper was initially evaluated by
ATF in 1984 in connection with a request to import the
weapon under the Gun Control Act of 1968, as amended.
The shotJun was denied importation on the basis that it
is not generally recognized as particularly suitable
for or readily adaptable to sporting purposes, as is
required for importation under 18 U.S.C. § 925(d) (3).

•

The USAS-12 was initially evaluated by ATF in 1988 in

connection with a request to import the weapon under
the Gun Control Act of 1968, as amended.
The shotgun
was denied importation on the basis that it is not
generally recognized as particularly suitable for or
readily adaptable to sporting purposes, as is required
for importation under 18 U.S.C. § 925(d) (3). ATF's
determination that the USAS-12 is not a "sporting"
firearm was upheld in Gilbert EQuip. Co. y. Higgins,
709 F. Supp. 1071 (S.D. Ala. 1989), aff'd without Opt,
894 F.2d 412 (11th Cir. 1990). The court held that
there was a rational basis for ATF's decision that the
USAS-12 was designed primarily for military and law
enforcement use and is not suitable for sporting
purposes.
•

The Gilbert case and ATF's decisions interpreting the
importation standards of section 925(d) (3) are relevant
to the classification of the USAS-12 and the Striker12/Streetsweeper as destructives devices under the NFA
since the "sporting purposes" standards of the two
statutory schemes are virtually identical.
TIMING OF THE DECISION

•

The manufacturers of the USAS-12 and Striker12/Streetsweeper began manufacturing the shotguns in
the United States in 1988. Approximately 18,000
firearms have been manufactured to date.

•

ATF was aware that the shotguns were being manufactured
in the United States, since the manufacturers were
required to be licensed under the Gun Control Act of
1968, as amended.

•

It was not until the petition was filed by Handgun
Control, Inc. that ATF considered whether the shotguns
should be classified as destructive devices under the
NFA.

COMPARISON WITH OTHER SHOTGUNS
•

In determining whether a shotgun is "generally
recognized as purticularly suitable for sporting
purposes" within the meaning of either section
925(d) (3) of the Gun Control Act or the destructive
definition of the NFA, ATF evaluates the physical
features of the shotgun.
In making this determination,
ATF evaluates the weight, size, bulk, designed magazine
capacity, configuration, and other characteristics.

•

In classifying the USAS-12 and Striker-12/Streetsweeper
as nonsporting shotguns which are "destructive

- 3 -

devices," ATF considered whether any other shotguns
might arguably fit within the statutory definition.
ATF determined that there are no other shotguns in
production in the United States at this time whose
design characteristics would require such a
classification.

DEPARTMENT OF THE TREASURY
WASHINGTON

A.SSISTANT SECRETARY

BRIEFING PAPER,FROM ,THE OFFICE OF
THE ASSISTANT SECRETARY (ENFORCEMENT)
DEPARTMENT OF THE TREASURY

Brady Implementation

*

After seven years of hearings and debate in the Congress, the Brady Handgun
Violence Prevention Act was passed and promptly signed into law by President
Clinton on November 30, 1993. It is the most significant gun law curtailing criminal
access to handguns since the 1968 Gun Control Act.

*

Each year nearly 7.5 million ....rearms are sold at retail in the United States, nearly

*

Until February 28, 1994, the effective date of the Brady Act, those guns have been
sold primarily on the honor system. Although the purchaser had to sign a statement
attesting to the fact that s/he was not legally prohibited from purchasing a firearm,
there was no nationwide system to permit law enforcement to verify that statement.

*

On February 28, 1994, every retail sale of a handgun will be preceded by a
background check. Honest, law abiding citizens will continue to be able to purchase
firearms. Criminals will not be able to buy a handgun without law enforcement first
having an opportunity to prevent such sale.

*

According to a Justice Department survey of prison inmates, nearly 30 percent had
purchased their firearms from a licensed gun dealer.

*

States that have had statewide systems of background checks tell us that they reject
between 2 and 6 percent of the purchase requests they receive.

*

Brady stops convicted criminals from arming themselves out of the yellow pages, and
it does far more:

half of them are handguns.

Gun runners have traditionally gone from states where the police check on
buyers to states where law enforcement does not do background checks.
Under Brady, there will be no such states.
Under Brady, law enforcement can learn that a violent criminal suspect is
shopping for a new handgun.
Under Brady, law enforcement will know if a buyer is going from store to
store to buy one handgun at a time to avoid filing the multiple sales report -- a
possible indicator of illegal street sales.
1

Title I: 5-Dav Waiting Period and Background Check -- Effective on February 28, 1994

*

The mechanics of Brady are as follows: a handgun purchaser must fill out a form
stating that s/he intends to purchase a handgun and is not in one of the prohibited
categories. The gun dealer must transmit the form to the Chief Law Enforcement
Officer within 24 hours. Law enforcement is required to make a "reasonable effort to
ascertain within 5 business days whether receipt or possession would be in violation
of the law." If law enforcement has not infonned the dealer that the sale cannot go
forward within five working days, the sale may be completed.

*

Regulations for implementing the 5-day waiting period and background check for the
purchase of handguns were developed by the Treasury, through the Bureau of
Alcohol, Tobacco, and Fireanns. The regulations were printed in the Federal
Register on February 14, two weeks before the deadline, to ensure that all affected
parties had adequate opportunity to learn and understand their new responsibilities.
There is a 90-day comment period, after which fmal regulations will be issued.

*

In addition to the regulations, several informational mass mailings have been sent to
the 284,000 current Federal Fireanns Licensees (FFLs) and to thousands of state and
local law enforcement offices around the country. Each FFL in Brady states received
two mailings, one addressed to all FFLs "subject to the waiting period provision of
the Brady laws," and the other specific to each Brady state. All other FFLs received
a letter addressed to those "not subject to the waiting provisions of the Brady laws. "
State and local law enforcement officials received detailed instructions outlining their
Brady obligations. ATF has conducted numerous meetings with state and local law
enforcement officials to advise them of their responsibilities and to tailor the
implementation process to the needs of each state.

*

The Justice Department has held several meetings and conferences concerning the
information to be accessed in the background checks required by Brady. The
Attorney General has designated the National Crime Information Center (NCIC) as
the national system to be used in the criminal history background check.

*

The law allows for several alternatives to the Brady background check (commonly
referred to as State exemptions). ATF has analyzed state laws and regulations to
determine which states meet the following alternative criteria:
if there is a State system in place which requires a pennit to purchase a
handgun. The permit cannot be issued more than 5 years earlier and must
have been issued following an adequate background check; or
if the state already has in place a background check system comparable to the
Bradv. back£round check .
~

2

Thirty-four states and territories will be required to implement Brady. (See attached
list.) Of the states which will be required to implement Brady as of February 28,
four are considering new legislation which would qualify them as alternative states.
They include Colorado, North Carolina, Utah and Washington.

*

In addition, certain transactions may be exempt from Brady: (1) ATF determines that
remote geographic location combined with a lack of telecommunications facilities
makes the check impractical; or (2) if the purchaser has received a waiver from law
enforcement due to threat(s) against the lives of the purchaser or his/her family.

*

The burden of implementing the backgmllnd check rests on the local "Chief Law
Enforcement Officer". This will vary from jurisdiction to jurisdiction. Chief Law
Enforcement Officer is statutorily dermed as "chief of police, or sheriff, or equivalent
officer, or their designee" -- a definition we interpret to allow state and local
governments the flexibility to develop the most effective and efficient background
check system which is appropriate for their geographic and jurisdictional areas.

*

The law neither provides for, nor prohibits, law enforcement offices from defraying
their costs with some type of user fee. ATF has provided to the states model fee
structures utilized in states that are successfully implementing alternatives to Brady.

*

The 5-day waiting period will sunset in 5 years, at which time a new automated
"Instant Check" system is to be in place. The Department of Justice is responsible
for developing the automated data system to be accessed in the Instant Check. This
system will be used for the purchase of all firearms, not just handguns.

*

Treasury and Justice are working closely together on all aspects of Brady
implementation. Both Departments have designated Brady coordinators.

Titles n and III: Other Provisions
ATF has sent out notification and is implementing the following provisions:

*

Multiple sales reports of firearms purchases are now required to be disseminated to
state and/or local law enforcement.

*

Common carriers are prohibited from labeling as firearms packages or other
containers of firearms.

*

Common carriers are required to obtain written receipt for imports or interstate
deliveries of firearms.

*

It is now a federal felony to steal a firearm from a licensee (dealer, manufacturer or
importer).
3

DEPARTMENT OF THE TREASURY
BUREAU OF ALCOHOL. TOBACCO AND FIREARMS
WASHINGTON. D.C. 20226

LIST OF STATES SUBJECT TO THE FEDERAL FIVE DAY WAITING PERIOD OR
STATES HAVING ALTERNATIVE SYSTEMS AS DEFINED IN THE LAW
As of 2-23-94

STATES WHICH MUST COMPLY WITH THE FEDERAL 5-DAY WAITING PERIOD
Alabama
Alaska
Arizona
Arkansas
Colorado •
Georgia ••
Idaho
Kansas
Kentucky
Louisiana
Maine
Marianas Islands

Minnesota
Mississippi ••
Montana
Nevada
New Hampshire
New Mexico
North Carolina •
North Dakota ••
Ohio
Oklahoma
Pennsylvania ••

Puerto Rico
Rhode Island
South Carolina
South Dakota **
Tennessee
Texas
Utah·
Vennont
Washington State ..
West Virginia
Wyoming

• Legislation pending to qualify as an "alternate state" •
•• In these States, the Federal 5-day waiting period does not apply to transfers of handguns to persons
holding valid pennits/licenses to carry handguns issued within 5 years of the proposed purchase.

STATES WHICH MEET ONE OF THE ALTERNATIVES TO THE FEDERAL 5-DAY
WAITING PERIOD
California
Connecticut

Delaware
Florida
Guam
Hawaii
lllinois
Indiana
Iowa
Maryland
Massachusetts
Michigan
Missouri
Nebraska
New Jersey
New York
Oregon
Wisconsin

Virginia
Virgin Islands

Permit or other approval type system
Permit or other approval type system
"Instant check"
"Instant check"
Permit or other approval type system
Permit or other approval-type system
Pennit and "instant check"
Permit or other approval-type system
Permit or other approval-type system
Permit or other approval-type system
Permit or other approval-type system
Pennit or other approval-type system
Permit or other approval-type system
Permit or other approval-type system
Permit or other approval-type system
Pennit or other approval-type system
Permit or other approval-type system
"Instant check"
"Instant check"
Pennit or other approval type system

DEPARTMENT OFTHE TREASURY
WASHINGTON, D.C. 20220

TREASURY CRIME CONTROL INITIATIVE SUMMARY
•

Guns in the U.S. There are an estimated 200 million firearms in civilian hands in the
U.S. Nearly 4 million new firearms enter the marketplace annually. Each year an
estimated 639,000 Americans will be confronted by a criminal armed with a handgun.
Between 130,000 and 270,000 firearms are taken to school every day by juveniles.

•

Brady Bill (signed into law on November 30, 1933). The Treasury Department,
through the Bureau of Alcohol, Tobacco and Firearms (ATF), i$ responsible for
drafting and implementing the Federal regulations by February 29, 1994, for the 5day waiting period to purchase a gun. Justice is responsible for developing the
computerized criminal information net~ork for the "Instant Check".

In support of the President's anti-crime commitment. Treasury supports the following
initiatives:
•

Federal Frreanns License (FFL) Refonn. Federal law requires that all persons who
engage in the business of selling firearms be licensed by ATF. At present there are
284,000 FFL holders in the U.S.; over 70 percent of those are not "engaged in the
business" as required by law. We strongly support Senator Simon's FFL reform
package included in the Senate Crime Bill, which would:
require the submission of photos and fingerprints with an FFL application;
require FFLs to notify promptly ATF and local authorities of firearms thefts;
impose additional record keeping requirements for FFLs 2nd greater penalties
for non-compliance; and
require FFLs to comply with local business ordinances.

In addition, Treasury proposes to :
increase FFL fee to $600 per year by 1995;
increase the penalty from a misdemeanor to a felony for willful falsification of
FFL records; and
provide ATF the authority to immediately revoke a license UP0'l the felony
conviction of the licensee.
Treasury supports other Senate-passed Crime Bill legislation:

a ban on the manufacture, sale and possession of semi-automatic assault
weapons;
prohibitions on large capacity ammunition cartridges;
a ban on cop-killer bullets which are designed to pierce bullet proof vests; and
a prohibition on the transfer or sale of handguns to juveniles.

2

In addition, there are nwnerous administrative and enforcemelU initiatives which will be
undertaken and/or expanded subject to availability offunding from the crime bill.
•

New York City Demonstration Project. ATF, in conjunction with the New York
City Police Department, has developed a pilot firearms dealer licensing project which
was designed to deny FFLs to dealers who intended to use their license for criminal
purposes, thereby limiting the number of illegal firearms in the city. Since the
program began, 90 percent of the FFL applications have either been withdrawn or
denied. Previously, 90 percent were granted. For most firearms sold on the black
market in New York City, the black market price is four times that of the state of
origin. We propose to expand this project to other cities with serious gun violence
problems.

•

Intelligence. Treasury proposes to expand our firearms trace capability to assist
Federal, State and local law enforcement in their criminal investigations. We plan to
expand a pilot project currently in Washington, DC, called Operation Ceasefire.
Ceasefire utilizes new technology to identify projectiles found at crime scenes, and
has provided valuable information to law enforcement linking otht:!rwise unconnected
cases.

•

Law Enforcement. Treasury proposes to expand law enforcement programs, such as
"Achilles" which targets armed career criminals; and Project Uptown which focuses
on crime infested public housing. In addition, ATF will study the illegal gun markets
in the 10 major counties where 23 percent of the nation's felony crimes are reported.

•

Explosives. Explosives are currently sold over the counter without a background
check. Treasury is developing legislative changes which will, in part, include the
issuance of permits to buy explosives.

•

Prevention:

G.R.E.A.T. With the leadership of Senator DeConcini, ATF has developed
the Gang Resistance Education and Training (G.R.E.A.T.) program, a yearround, school based program designed to help children become responsible
members of society, resist negative pressures, learn how to resolve conflicts
and understand how gangs and drugs negatively impact the quality of their
lives. G. R. E. A. T. is underway in 12 cities; Treasury supports the Senate
Crime Bill provision to add 50 new cities.

Project Outreach. Recognizing that poverty, unemployment, and community
disillusionment contribute to the nation's crime crisis, Treasury law
enforcement agents and other employees volunteer their time to reduce the
demand for drugs, teach CPR, tutor children, and other endeavors to improve
their communities.

~

,
DEPARTMENT

OF

THE

TREASURY

I

IREASURY

NEWS

ISOO PENNSYLVANIA AVENUE, N.W. -WASHINGTON, D.C.· 20220 -(202) 622-2960

FOR IMMEDIATE RELEASE
Text as Prepared for Delivery
February 28, 1994
STATEMENT BY THE HONORABLE JEFFREY R. SHAFER
TREASURY ASSISTANT SECRETARY FOR INTERNATIONAL AFFAIRS
TO THE GLOBAL LEGISLATORS ORGANIZATION
FOR A BALANCED ENVIRONMENT (GLOBE)
Thank you for inviting me to participate on this distinguished panel. I'm glad
GLOBE has made the International Financial Institutions (IFls) an important part of its
agenda.
Over the past few years, the world has learned a great deal about the need for
development to be based on the principle of environmental sustainability -- development
must conserve the natural resource base upon which future generations depend. The
increased international understanding of sustainable development issues that led to the
Rio Summit and the international environmental conventions has also sharpened
attention, appropriately, on the role of the IFIs.
The United States has been a leader in addressing the environmental and social
performance of the IFIs, especially the multilateral development banks (MDBs). U.S.
government agencies review every MDB project for compliance with the Bank's policies,
including environmental policies, and for the sustainability of the project. We do not
support projects with significant environmental impacts if an adequate environmental
impact assessment has not been available to the public well in advance of Board
consideration of the project.
These actions reflect the fact that poverty reduction and environmental protection
are central to the Administration's development agenda. We believe that increased
attention to environmental and social sustainability will lead to greater economic and
social benefits for borrowers. We also believe constructive criticism brings fresh ideas,
which is good for any institution.
Together, the MDBs are lending about $45 billion annually to developing
countries for such essential activities as poverty reduction, improved agricultural

(MORE)
LB-671

-2-

production, transportation, electric power, natural resource conservation, and economic
policy reform. It is essential, given the scale. of resources in~olved, that the~e inst.itutions
work in partnership with their borrowers to Incorporate envIronmental consIderatIOns
into national development agendas and individual projects.
The good news, of course, is that the IFIs are responding rapidly to this challenge.
The \Vorld Bank, in particular, has made great strides over the past few years,
establishing strong policies on environmental assessment, agriculture, water resources
management, energy efficiency and the power sector, forestry, indigenous peoples and
resettlement. The IMF also has become more aware of the consequences of its
programs on poverty and the environment, and works with the World Bank to address
the social and environmental concerns associated with Enhanced Structural Adjustment
Facility programs.
In addition to the environmental policy reforms discussed above, the World Bank
has taken a hard look at the quality of its projects in a study known as the Wapenhans
Report. The Bank has made several important changes in the way it does business to
address the shortcomings identified by the Wapenhans Report. The action plan initiated
by the Bank in July 1993 established a comprehensive process for improving the quality
of projects during the design stage, and strengthening the Bank's role in project
performance management.
The Bank has established a more open policy on information disclosure to
increase accountability and public input. And the Bank is creating an Independent
Inspection Panel to investigate complaints from local people who feel that they have
been adversely affected by a project supported by the Bank.
The United States believe these changes will reshape the Bank's programming
and improve the quality of its projects. We continue to encourage the World Bank to
fully implement its new policies. We are pushing for similar changes to be adopted by
the regional development banks in their ongoing replenishment exercises.
There is more that remains to be done, make no mistake. The Banks need to
move more aggressively to implement the environmentally sound policies they have been
putting in place. They need to incorporate environment as a central component of their
macroeconomic policy dialogue with borrowers. Public consultation in the development
of projects and policies needs to be strengthened and expanded.
The United States will continue to push for strong action in these areas in each of
the MOBs. As all of you know, however, the IFIs are multilateral institutions.
C~nsens~s. among. governme~ts ~ll b~ required for further progress. That is why the
ettorts ot mternatIOnal orgamzatIOns lIke GLOBE are so important.
GLOBE member governments should send a clear signal to the IFIs that full

-3-

implementation of environmental policies is of the highest priority. This signal will be
strengthened if GLOBE member governments make it a point to systematically review
MDB projects for compliance with environmental policies. In addition, GLOBE member
governments should strongly encourage the MDBs to provide environmental leadership
in their policy discussions with borrowing governments. This is especially important in
key sectors such as agriculture, energy and transportation.
-30-

UBLIC DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239

FOR IMMEDIATE RELEASE
February 28, 1994

CONTACT: Office of Financing
202-219-3350

RESULTS OF TREASURY'S AUCTION OF 13-WEEK BILLS
Tenders for $12,743 million of 13-week bills to be issued
March 3, 1994 and to mature June 2, 1994 were
accepted today (CUSIP: 912794K86).
RANGE OF ACCEPTED
COMPETITIVE BIDS:
Low
High
Average

Discount
Rate
3.38%
3.40%
3.40%

Investment
Rate
3.45%
3.48%
3.48%

Price
99.146
99.141
99.141

$400,000 was accepted at lower yields.
Tenders at the high discount rate were allotted 20%.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED AND ACCEPTED (in thousands)
TOTALS
Type
Competitive
Noncompetitive
Subtotal, Public
Federal Reserve
Foreign Official
Institutions
TOTALS

Received
$58,643,683

Accepted
$12,743,255

$53,924,761
1, 224,213
$55,148,974

$8,024,333
1,224,213
$9,248,546

3,081,330

3,081,330

413,379
$58,643,683

413,379
$12,743,255

An additional $114,521 thousand of bills will be
issued to foreign official institutions for new cash.

LB-672

VBLIe DEBT NEWS
Department of the Treasury • Bureau of the Public Debt • Washington, DC 20239

FOR IMMEDIATE RELEASE
February 28, 1994

CONTACT: Office of Financing
202-219-3350

RESULTS OF TREASURY'S AUCTION OF 26-WEEK BILLS
Tenders for $12,742 million of 26-week bills to be issued
March 3, 1994 and to mature September 1, 1994 were
accepted today (CUSIP: 912794M92).
RANGE OF ACCEPTED
COMPETITIVE BIDS:
Low
High
Average

Discount
Rate
3.60%
3.61%
3.61%

Investment
Rate
3.72%
3.73%
3.73%

Price
98.180
98.175
98.175

$400,000 was accepted at lower yields.
Tenders at the high discount rate were allotted 44%.
The investment rate is the equivalent coupon-issue yield.
TENDERS RECEIVED AND ACCEPTED (in thousands)
TOTALS
Type
Competitive
Noncompetitive
Subtotal, Public
Federal Reserve
Foreign Official
Institutions
TOTALS

Received
$52,665,493

Accepted
$12,741,796

$47,643,776
913,996
$48,557,772

$7,720,079
913,996
$8,634,075

3,050,000

3,050,000

1,057,721
$52,665,493

1, 057 ,721
$12,741,796

An additional $293,079 thousand of bills will be
issued to foreign official institutions for new cash.

LB-673

DEPARTMENT

lREASURY

OF

THE

TREASURY

NEWS

_~/7 H'l::""• • •

1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C.· 20220· (202) 622-2960

FOR IMMEDIATE RELEASE

Text as Prepared for Delivery
March 1, 1994

SUMMARY TESTIMONY OF TREASURY SECRETARY LLOYD BENTSEN
SENATE COMMII lEE ON BANKING, HOUSING AND URBAN AFFAIRS
WASHINGTON D.C.

LB-674

FOR IMMEDIATE RELEASE
Text as Prepared for Delivery
March 1, 1994

SUMMARY TESTIMONY OF TREASURY SECRETARY LLOYD BENTSEN
SENATE COMMITIEE ON BANKING, HOUSING AND URBAN AFFAIRS
WASHINGTON D.C.

Mr. Chairman, members of the Committee.
I've appeared before you to discuss many issues, but few are as important as bank
regulatory consolidation. And from my experience in the Senate, I appreciate that few
will be as challenging for you to resolve.
But I also realize the importance of addressing this matter now, rather than
waiting until it has to be dealt with, in the face of other urgent problems.
First, let me express appreciation to Chairman Riegle and Senator D'Amato for
inviting the Administration to formulate and present our proposal. I greatly appreciate
your bipartisan spirit. And I know it's the desire of all members of this Committee, as
well as the Administration, to work together on this one.
I have a longer statement for the record, but let me summarize.
Here's where we are today. Four different agencies regulating depository
institutions.
The Office of Thrift Supervision and the Office of the Comptroller of the
Currency -- both under Treasury. The Federal Reserve. And FDIC.
These aren't nice clean boxes on an organizational chart. 70 percent of the
nation's commercial bank assets are held by organizations regulated not by one
organization -- but by two. And almost half are regulated by three or four.

LB-674

-2-

Let me show you something. This was put out by the Federal Reserve of New
York. It uses four colors, 12 columns, 17 rows, and 31 footnotes to explain to a customer
which regulator handles what. Good luck! I'm giving this one to Arlen Specter and Bob
Dole.
Under the Consolidation Act of 1994, we'll combine supervisory and regulatory
functions of the four into a single Federal Banking Commission.
You'll recognize a lot of our proposal. It incorporates many of the elements
of bills introduced in Congress -- in particular, the bill introduced by you, Mr. Chairman,
and Senator D' Amato; and in the House by Chairman Gonzalez and 12 other members
of the Banking Committee.
Our plan also builds upon many bipartisan proposals that have emerged over the
past 45 years. Do you know that the first commission calling for regulatory reform -- the
Hoover Commission -- came out my very first term in Congress?
We've seen several since. We saw it in the Grace Commission under President
Reagan. We saw it with President Bush.
And like your Congressional proposals, ours attacks redundancy and waste by
realigning regulators according to their core functions of regulator, central bank, and
deposit insurer.
The core functions of the Federal Reserve as the central banker and FDIC as
deposit insurer won't be disturbed.
Nothing in our proposal will affect the Federal Reserve's independence, deprive it
of needed information, or hamper theperformance'of its essential functions.

It will continue to conduct monetary policy, administer the payments system, and
provide liquidity through the discount window. These are all important components of
our plan that have been misunderstood. I'll say more about that later.
Let me say something about state-charted banks regulated by the states -- that's
something else that has been misunderstood.
They'll continue to play their important role. The dual banking system will not be
weak~ned by this. I ~sed to be the Chairman of the Board of Directors of a community
bank III Texas. And If I thought the dual system would be weakened, I wouldn't be here.

-3-

. Nothing in the Act gives the federal government any additional authority over
them. Nothing prevents a institution from seeking a state, rather than a federal charter.
And our proposal provides the opportunity for state supervisors to take on more of the
responsibilities for their banks.
To be blunt, I see critics of our proposal confusing the state dual-banking system
with having a choice between different federal regulators. Our plan preserves the dual
system, while eliminating a confusing federal regulatory structure that as Treasury
Secretary, I find redundant and wasteful.
What we're seeing is a situation that enables banks to shop for the most lenient
federal regulators.
As Senators, you should worry about a system where the more faithfully an agency

implements laws you enact, the more likely the institution it regulates will look for a
more lenient regulator.
That, right there, is a key reason to consolidate.
I was before you last week, talking about our worst financial crisis since World
War II. One lesson we better have learned is that our regulatory system did not
adequately anticipate or resolve that S&L crisis.
And in the months and years ahead, I don't want to have to appear before you, as
my predecessor did, to ask you to take costly measures to contain some other crisis. It's
better to fix the roof, while the sun is shining.
I ask that we take action now, while we can, so that none of us will be forced to
act with a gun to our heads.
We need a federal regulator that can focus on the banking industry -- full time.
An agency that'll keep the industry healthy. That'll promote a safe and sound system.
Over the past 20 years, the percentage of financial institution assets in banks and
thrifts has shrunk. It's gone from 62 percent to just 36 percent -- the lowest level in
history. That's a tremendous loss.
I'll tell you who that impacts. Small businesses on Main Street. The big fellows
can get their money on Wall Street. But the small business people -- the job creators in
this· economy -- they visit their local bank.
There will be a lot of benefits from this. Let me take you through seven of them
in some detail.

-4-

One, we can do a better job of regulating.
Almost three-quarters of a trillion dollars in assets ar~ in holding companies that
control a national bank, a state non-member bank, and a thrift. That means they have
four regulators.
The Fed does the holding company; OCC, the national bank; FDIC, the
non-member bank; and OTS, the thrift.
And what happens? We have a situation where each regulator relies on the
others for parts of the institution they're not responsible for.
Incredibly, there are thousands of cases where our system has layered on separate
regulators for the holding company, even though that agency regulates none of the
entities that actually make the loans. None.
It's fragmented. We don't get a complete picture. And we can do better than
that.
Two, consolidation will eliminate inconsistent and duplicative regulation.
Four agencies. Four sets of rules. Four sets of inspectors. Bankers often see
different regulators apply different rules to similar situations, and sometimes they see
them apply the same rules differently.
And under our plan, there no longer will be a need to coordinate policies and
regulations among different agencies. It has sometimes literally taken an Act
of Congress to get the agencies to coordinate.
Three, we'll see more accountability.
Today, when complaints arise in the industry, the various agencies can side-step
accountability. All they have to do is point their fingers at each other.
I'll illustrate. In the mid 1980s, the warning signs were clear that banks had over
invested in commercial real estate loans, but the regulators could not agree on a unified
strategy to address the problem.
And under our plan, Americans who pay the regulators' salaries but can't afford
bankjng lawyers to guide them through the maze, will know where to go when they
have a problem: the Federal Banking Commission. Period.
Four, it'll eliminate potential conflicts when agencies perform dual roles.

-5-

Look at the Federal Reserve -- as regulator and central bank. The two functions
compete for the time and energy of policy-makers, and you know that bank regulation
takes a back seat to monetary policy;
Or look at the FDIC. As an insurer, it has incentives to resist innovations even if
those innovations may be exactly the changes banks need to maintain their long-term
health and be responsive to evolving customer needs.
Five, consolidation works better and costs less.
OMB says our plan reduces government spending between $150 and $200 million
a year -- 15 to 20 percent of today's costs.
Direct savings to the banking industry -- and ultimately the consumer -- will be
substantially greater.
I can't tell you whether the savings in the private sector will be 5 percent or
25 percent. But based on a 1992 study chaired by Federal Reserve Board Governor
John LaWare, each 5 percent reduction in regulatory burden that this reform achieves
will save the industry $1 billion.
Six, a single regulator will be responsive to the concerns of community banks.
In the present system, most small banks are regulated by either the Fed or FDIC,
and like I've said, they have other jobs, other priorities.
Under our plan, small banks will have a regulator solely dedicated to responding
to supervisory concerns. They'll be in all 50 states, and if they're not responsive, I'm sure
they'll hear from members of this Committee and the· rest of Congress: ... .
Seven, a consolidated agency will assess fees and expenses more equitably among
institutions.
Like OCC, OTS, and FDIC, the Commission will not require any taxpayer funds.
It will recover all its costs through non-appropriated means. The Administration's
proposal incorporates a funding method for the Commission that's fair to both national
and state banks and institutions of all sizes. That's not the case now.
I know a number of state-chartered community banks have worried that the
Commission might impose heavy fees on them. Many of those bankers feel they're
already contributing to federal supervision costs through a portion of their FDIC
premiums, and they pay fees to their state supervisors.
Well, we heard their concerns. We agree. They make sense.

-6-

So, I'm happy to present a plan that calls for no fees to be paid to the new
Commission by state banks for the first $1 billion in assets.
That means 7,500 state-chartered banks -- more than 90 percent of all state banks
__ will have no fees assessed by the Commission. Larger state banks will pay half the
rates, reflecting the role of the state supervisors.
You know, a lot of people of both parties have endorsed this proposal -- including
several former regulators, including Peter Grace, including some of your former
colleagues. But there have been some critics, in particular members of the Federal
Reserve.
They agree consolidation is needed. But they have a different idea of how to do
it.
I have a great respect for the Fed and for its role in monetary policy and financial

systems. This proposal not only assures that the Fed has the authority it needs, it
improves the Fed's involvement in supervising major banks -- but within a much more
workable and efficient framework.
They have their own proposal. They think two full-scale regulators would be
better than one. I'm not persuaded.
Two are not necessary. The Federal government is not Noah's Ark. We don't
have -- or need -- two Securities and Exchange Commissions. Or two Food and Drug
Administrations. Or two central banks. We don't need two sets of rules and
interpreters, or two sets of examinations.
It's also a mistake to believe that competition among bank agencies is needed to
promote financial product innovation. Innovation is not initiated by bank regulatory
agencies. It comes from the marketplace.
And it's the non-bank financial services providers that dominate the industry, and
our current unresponsive, inefficient system is killing the banks' ability to compete with
them.
Some critics argue against full consolidation on the grounds that it eliminates
checks and balances.
Congressional oversight of the regulators is a check and balance. So are the
courts. And the state bank system. And the press. And the marketplace. And the new
Commission's Board that I'll discuss in a minute. We don't need two federal regulators
to serve as a check and balance for every bank.

-7-

Nevertheless, we believe that the Fed should playa meaningful role of
participation in bank supervision.
There is a legitimate concern that I know some of you have expressed about very
large banks -- that they really warrant special attention.
We've heard those concerns. We agree.
So our proposal provides a back-up system between the Commission and the Fed
for the top 20 banks. If either agency sees a serious problem, it can act to correct it in
any of the 20 largest institutions. Those 20 make up 35 percent of total bank and thrift
assets.
In addition, the Fed will be able to select, each year, 10 of those top 20 for joint
examination. Those 10 could make up 25 percent of total system assets.
And, for any of the 10 that have historically been supervised by the Fed, the Fed
can take the lead role in the joint exams. But there will be just one exam per institution.
Just one.
Today, the Fed directly supervises and examines only 7 percent of all
FDIC-insured depository institutions, only 15 percent of the nation's bank and thrift
assets, only five of the 20 largest institutions, and only 12 of the 52 U.S. banks with assets
of more than $10 billion.
For information concerning the remaining 93 percent, including most of the large
organizations, the Fed relies on reports prepared by OCC, by OTS, or by FDIC.
Now, some say the Fed needs bank supervisory powers to guard against systemic
risks -- crises that effect the financial system - like the stock market crash in October
1987.
I'm a Depression kid. I understand the failure of banks. But not every
disturbance is a systemic risk.
And in these times, possessing supervisory capabilities is unlikely to improve the
ability of the Fed to anticipate shocks.
The financial market encompasses far more than what the Fed supervises. It's the
stock market, the bond market, the commodities market, the insurance industry.
Our proposal won't affect the Fed's ability to react to a systemic shock. It will
continue to regulate the payments system and be actively involved in the supervision of
the largest banks. The Fed's done just fine in the past and it will in the future.

-8-

The monetary policy-makers at the Fed don't conduct bank exams themselves.
They get information they need from examination reports, just as they will under our
plan.
The Fed does say that some involvement in some statistical cross-section of
banking is useful to them.
Fine. Our proposal provides an opportunity for the Fed to participate in exams of
just such a cross-section -- in a way that doesn't duplicate or overlap with the
Commission.
These banks all across the country could compose up to 5 percent of total system
assets. Between their participation in exams of the largest banks and the cross section,
the Fed would actually be involved in banks with 30 percent of system assets, compared
to 15 percent now. So, the Fed will have better information, without all the overlapping
and confusion of today's structure.
And this Commission will have a Board -- and the Fed will have a seat on it.
The Treasury will also have a seat. And there will be three others, appointed by
the President and confirmed by the Senate. Both parties will be represented. And one
member will have experience in supervising state-chartered institutions. This Board will
bring balance and judgement to the job of regulation.
And the new Commission will have access to a range of views on policy matters.
It will have advisory councils for community banks - both state and national -. for thrifts,
consumer issues, and small businesses.
I look around the world. I've dealt with many .finance ministers. In fact, I just

got back from Germany over the weekend for a meeting with the G-7.
I spoke at length with the top officials from the Bundesbank, and they told me

they have no examination responsibilities. Nor do they want them.
I have to tell you -- no other country has a regulatory system anywhere near as

confused as ours. No other country.
It's a serious disadvantage in today's competitive world for our nation, to have our
banks, that serve our economy, hobbled by our regulators.
.

I've heard enough stories. Like the bank in California that had more regulators
In one day then they had employees -- so many that customers couldn't find a place to
park.

-9-

Let'S stop tripping over each other. This plan provides each bank -one examination, one application, and one report to their board of directors. It'llieave
the bankers time to make loans, instead of spending all day filing multiple regulatory
reports.
The need to restructure has been around a long time. I want to read you
something. The banking regulatory system is "a crazy quilt of conflicting powers and
jurisdictions, of overlapping authorities and gaps in authority."
That's from a Fed annual report -- of 1938.
The need has grown more urgent over the past several decades as distinctions
between depository institutions have blurred and the regulatory system has grown more
costly, more complex, less efficient, less responsible.
I talked today about all the advantages of our proposal. You're probably thinking
-- what are the disadvantages? It's hard to find them.
But, nevertheless, when you make improvements, someone will protest the way
it'll be done -- they'll resist change.
But here, and with other areas of government that need to be made more
efficient, we have to join together to counter that resistance.
You know, the OCC and OTS are bureaus of the Treasury -- and they supervise
62 percent of bank and thrift assets. I'm prepared to give up that authority, and put
them into the new Federal Banking Commission. I'm ready to fix the system -- the right
way.
In this time of economic stability, when bank profits remain at all-time highs, we
have a window of opportunity open: to take bold action to improve the system; to make
it work better and cost less; to promote a safer, sounder banking system; and to promote
a more efficient system.
For all those reasons, I urge this Committee and this Congress to move quickly on
the Consolidation Act, and I look forward to working with members on both sides of the
aisle.
I'm here to answer your questions.

-30-

DEPARTMENT

OF

THE

TREASURY

NEWS

IREASURY

1500 PENNSYLVAl\IA AVENUE. N.W.· WASHINGTON, D.C.· 20220· (202) 622-2960

STATEMENT OF
THE HONORABLE LLOYD BENTSEN

SECRETARY OF THE TREASURY
BEFORE'I'HE
COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
OF'I'HE

UNITED STATES SENATE
MARCH 1, 1994

LB-675

TABLE OF CONTENTS
Page
I.

INTRODUCTION

1

II.

THE ADMINISTRATION'S PROPOSAL

6

A.

The Core Functions of Regulator, Central Bank,
and Deposit Insurer Will Remain Intact at
Separate Agencies.

7

B.

States Will Continue to Regulate State-Chartered
Banks, Thereby Preserving the Dual Banking System.

11

C.

The FBC Structure Will Provide an Appropriate Balance
Between Independence and Accountability.

14

III.

THE NEED FOR BANKING AGENCY CONSOLIDATION

15

IV.

BENEFITS OF THE CONSOLIDATION PROPOSAL

18

A.

Consolidation Will Improve Supervision of the
Financial Services Industry.

18

B.

Consolidation Will Eliminate Inconsistent Regulation.

20

C.

A Consolidated Agency Will Be More Accountable to
Congress, the Public, and the Industry.

22

D.

Consolidation Will Eliminate Potential Conflicts
Presented When Agencies Perform Dual Roles.

23

E.

Consolidation Will Reduce Government and Industry
Expenses.

25

F.

A Single Regulator Will Be Responsive to
the Concerns of Community Banks.

27

G.

A Consolidated Agency Will Assess Fees and
Expenses Equitably Among Institutions.

28

T ABLE OF CONTENTS
(Page Two)

V.

VI.

Page

RESPONSE TO CONCERNS ABOUT THE
ADMINISTRATION'S PROPOSAL

30

A.

One Federal Regulator Is Better Than Two.

31

B.

The Administration's Proposal Provides an Appropriate
Role for the Federal Reserve.

33

1.

The Federal Reserve Will Have Ample Bank
Supervisory Powers to Perform its Central
Bank Functions.

34

2.

The Federal Reserve Will Retain Full Authority
to Manage the Payments System and Operate
the Discount Window.

39

3.

The Federal Reserve Will Have Abundant
Bank Supervisory Powers to Guard Against
"Systemic Risk."

42

45

CONCLUSION
APPENDICES

Appendix A: The Current Federal Structure for Supervising FDIC-Insured
Depository Institutions and Their Holding Companies
Appendix B: The Proposed Federal Structure for Supervising FDIC-Insured Depository
Institutions and Their Holding Companies
Appendix C: Bank Supervision Responsibilities in the Non-U.S. Member
Countries of the Basle Committee on Banking Supervision

STATEMENT OF TIlE
HONORABLE LLOYD BENTSEN
I.

INTRODUCTION
Mr. Chairman and members of the Committee, I want to thank you for

the opportunity to appear before you today to present the Administration's proposal to
consolidate the federal banking agencies. I want to express our appreciation to the
Chairman and Senator D' Amato for inviting the Administration to fonnulate this
proposal, which will meaningfully reform the way we supervise our Nation's banking
and thrift industries. In the past year, I have had the privilege of appearing before the
members of this Committee -- my former colleagues -- to discuss a wide variety of
matters, but in the end, I think few of those discussions could be more important than
the matter we will address today. From my own experience here in the Senate, I also
appreciate that despite the resounding logic of the Administration's plan, there will be
some controversy regarding certain aspects of the proposal that will be challenging for
you to resolve.
Consolidation of the federal banking agencies presents a unique
opportunity to rebuild a part of America's economic infrastructure that has become
badly outmoded, and to make government more effective and efficient in a way that is
meaningful to all Americans. The current federal bank regulatory structure is
senselessly convoluted, places a serious drag on the Nation's banking industry and the
economy in general, has failed to effectively protect the stability of the banking
system, and ill serves the financial services needs of the American people.

2

If that were not reason enough for reform, the present system also has
another, insidious impact that should especially concern you. The current regulatory
scheme enables banking organizations to shop for the most lenient regulator. Thus,
the more faithfully an agency implements the laws enacted by Congress, the more
likely the institutions it regulates will look for another regulator. You should not
tolerate a regulatory system whose structure inevitably saps the effectiveness of the
laws you pass.
Today, four different federal agencies regulate and supervise depository
institutions that are insured by the Federal Deposit Insurance Corporation (FDIC).
The Office of the Comptroller of the Currency (OCC) charters, regulates and
supervises national banks. The Board of Governors of the Federal Reserve System
and the Federal Reserve Banks (referred to collectively as the Federal Reserve)
regulate and supervise bank holding companies and state-chartered banks that are
members of the Federal Reserve System. The Federal Reserve, as well as the OCC,
also has certain responsibilities for regulating and supervising foreign banks' U.S.
operations and U.S. banks' foreign operations. The FDIC, in addition to insuring
deposits, regulates and supervises state-chartered banks that are not members of the
Federal Reserve System. 1 The Office of Thrift Supervision (OTS) charters, regulates

The FDIC also has back-up enforcement authority to stop unsafe practices at
any FDIC-insured institution if the institution's primary Federal regulator fails to do
so.
I

3
and supervises Federal savings associations, and regulates and supervises savings and
loan holding companies and state-chartered savings associations. (See Appendix A for
a depiction of the current Federal regulatory structure.?
Trapped in this maze of bureaucracies, most banking organizations are
subject to redundant demands, overlapping supervision and often inconsistent
regulation by two, three, or even all four of the Federal regulatory agencies. 3 The
system was aptly described in a 1973 staff report to the House Committee on Banking
and Currency as a "patchwork structure of regulation consisting of a battery of
contradictory agencies which have often reduced supervision of financial institutions to

A more comprehensive chart published by the Federal Reserve Bank of New
York, entitled "Depository Institutions and Their Regulators," uses 12 columns, 17
Ii nes, and 31 footnotes to explain which regulator handles what.
2

As Chairman Riegle has observed, "no thoughtful person would ever design
such a system from scratch." Instead, the structure arose over time as the Federal
Government, in response to crises and changing needs, established new agencies and
expanded existing agencies' responsibilities without ever significantly rationalizing and
simplifying the overall structure. For example, Congress created the DeC in 1863 to
provide a system of federally chartered banks that would help the Union to finance the
Civil War. It established the Federal Reserve System in 1913 to stabilize the economy
after a series of banking panics. It created the FDIC in 1933, after the banking
system collapsed during the Great Depression. The following year, it extended
federal regulation and deposit insurance to the thrift industry through the Federal
Home Loan Bank Board, which became the OTS in 1989, and the now-defunct
Federal Savings and Loan Insurance Corporation. It instituted holding company
regulation in 1956 for banks and in 1968 for savings associations. It applied federal
regulation to foreign banks in 1978.
3

4
the lowest common denominator among their conflicting positions. 114 In the two
decades since that report appeared, these problems have grown worse. Today, over
70 percent of the Nation's commercial bank assets are held by organizations that are
supervised and regulated by at least two different Federal banking agencies and almost
one half are supervised and regulated by three or four agencies.
Given its duplication, waste and confusion, this system would be ripe for
reform even if it had a strong record of preserving bank safety. But it does not. Our
country has just emerged from its worst financial crisis since The Great Depression.
One of the lessons of that crisis is that our bank regulatory system is cumbersome and
antiquated. It did not adequately anticipate or help resolve the recent crisis.
Under the Regulatory Consolidation Act of 1994 (Consolidation Act)
proposed by the Administration, bank and thrift resources that are now dedicated to
coping with inconsistent and redundant regulation under the current scheme can be
redirected to productive uses, such as meeting the needs of customers and the demands
of global competition. In addition, the regulatory system proposed by the
Administration will be more effective than the current patchwork of regulators in
protecting the safety and soundness of the banking system.

Staff Report of the Subcommittee on Domestic Finance of the House
Committee on Banlcing and Currency, Financial Institutions: Reform and the Public
Interest 5 (Comm. Print 1975).
4

5

On its face, consolidating Federal agency functions appears to be an
obvious thing to do. But as a former Senator, I know how challenging this issue is
for you. Congress has grappled with the issue of banking agency consolidation for
years. I appreciate that there are those who argue to you that the status quo should
not be disturbed; that any change affecting certain regulatory functions will risk
various unfortunate results. I understand your concern about the consequences of
change, and I do not dismiss the claims you are hearing. I say we need to examine
them.
An astonishingly diverse array of observers agree that our current bank
regulatory system is broken.
II

II

If we fail to fix it now, the next financial crisis we

face will again reveal its flaws. And who suffers then? Our banking industry, our
economy, and potentially, the taxpayers. You have the chance to help prevent that
result.
I am sure you have many questions about the Administration's proposal.
Under Secretary Newman and I are here to explain the proposal and answer your
questions. I am confident that once we probe the concerns you have heard expressed
about our proposal, you will conclude that the real risk lies not in change, but in
missing this opportunity to affect badly needed reform.

6

THE ADMINISTRATION'S PROPOSAL

II.

The Consolidation Act will combine the regulatory and supervisory
functions of the OCC, the Federal Reserve, the FDIC, and the OTS into a new
independent agency, the Federal Banking Commission (FBC). The proposal
incorporates many of the highly constructive elements of the well-considered bills
introduced in the Senate and House, in particular, S. 1633, introduced by you, Mr.
Chairman, and Senator 0' Amato, and H.R. 1214, sponsored by Chairman Gonzalez
and 12 other members of the House Banking Committee. The Administration's plan
also builds upon the many previous proposals for regulatory consolidation that have
emerged over the past 45 years. 5 Like the Congressional proposals, the Consolidation
Act will attack redundancy and waste in government by realigning the banking and
thrift regulators according to their core functions of bank regulator, central bank, and
deposit insurer.

Virtually every study of our Federal banking regulatory system since 1949 has
recognized the need for major consolidation. Proponents of consolidation have
included a task force of the Commission on Organization of the Executive Branch of
Government, commonly known as the Hoover Commission (1949); the Commission
on Money and Credit (1961); House Banking Committee Chairman Wright Patman
(1965); the Hunt Commission (1971); the House Banking Committee's Study of
Financial Institutions in the Nation's Economy (1975); Senate Banking Committee
Chairman Proxmire (1975); the Private Survey on Cost Control, commonly known as
the Grace Commission (1983); Vice President Bush's Task Group on Regulation of
Financial Services (1984); and the Bush Administration (1991).
5

7

A.

The Core Functions of Regulator, Central Bank, and
Deposit Insurer Will Remain Intact at Separate
Agencies.
Under the Consolidation Act, the banking regulatory system will consist

of a strong and stable three-part structure based upon core agency functions that
complement each other. The Federal Banking Commission will regulate and supervise
all federally-insured banks and thrifts, all bank and thrift holding companies, U.S.
banks' foreign operations, and foreign banks' U.S. operations. The FBC also will
charter national banks and Federal savings associations. The FBC thus will carry out
all the functions currently exercised

by the acc and OTS,

as well as the FDIC's

functions as primary Federal overseer of state nonmember banks and the Federal
Reserve's functions as primary Federal overseer of bank holding companies, state
member banks, and foreign banks. (See Appendix B for a depiction of the proposed
Federal regulatory structure.) The core functions of the Federal Reserve and FDIC

will not be disturbed. This is an important component of the Administration's plan
that has been much misunderstood.
Nothing in the Administration's proposal will affect the Federal
Reserve's independence, deprive it of needed information, or hamper the performance
of its essential functions. The Federal Reserve, as the Nation's central bank, will
continue to conduct monetary policy, administer the payments system, set bank
reserve requirements, and provide liquidity through the discount window. It will
retain full rulemaking and other authority necessary to carry out those responsibilities.

8
It will still participate in market oversight of government securities dealers and

brokers as part of its responsibilities for open market operations. In addition, it will
participate in FBC examinations of certain banking organizations that the Federal
Reserve concludes it needs to examine because of the relationship of those operations
to the Federal Reserve's monetary policy, payments system and discount window
functions. This includes examinations of national banks that the Fed does not
presently have an opportunity to inspect.
The Federal Reserve's participation in examinations will be meaningful.
From the Nation's 20 largest banking organizations, the Federal Reserve will select
annually for joint examinations up to 10 banking organizations (whose subsidiary
insured depository institutions could, in the aggregate, hold up to 25 percent of the
total assets of all FDIC-insured depository institutions). The Federal Reserve and the
FBC will jointly examine those banking organizations. Federal Reserve staff will be
actively involved in planning the scope, timing, and their role in the joint
examinations. Federal Reserve examiners will also participate in meetings between
FBC examiners and senior management as well as the board of directors of banking
organizations when examination findings are discussed and transmitted.
Generally, joint examinations will be conducted under the direction of
the relevant FBe examiner-in-charge. However, the Federal Reserve could elect to
lead the examinations of banking organizations (with up to 10 percent of the total

9
assets of all FDIC-insured depository institutions) that have a majority of their assets
in state member banks.
The Federal Reserve could also join in examining an array of smaller
state member banks, with up to 5 percent of the total assets of FDIC-insured
depository institutions.
In addition to authorizing the Federal Reserve to examine a cross-section
of both large and small banking organizations jointly with the FBC, the Consolidation
Act gives the Federal Reserve back-up enforcement authority to correct actual or
potential safety and soundness problems at the Nation's 20 largest banking
organizations. The Federal Reserve will be able to initiate back-up enforcement action
against any such institution by submitting in writing to the FBC a recommendation that
it take enforcement action against the particular institution. If, in the judgment of the
Federal Reserve, the FBC fails to take appropriate action, the Federal Reserve could
institute its own enforcement action if the Board of Governors determines either that
(1) the institution is in an unsafe or unsound condition or, (2) the institution's current

practices, if allowed to continue, will likely render the institution unsafe or unsound.
This back-up enforcement authority would be reinforced by the Federal Reserve's seat
on the FBC board, which would inextricably link the two agencies and give the
Federal Reserve a continuing role in all the FBC's activities.
The FDIC will continue to insure deposits at all federally-insured banks
and thrifts. It will continue to grant, suspend, and terminate deposit insurance. It will

10

be able to conduct its own special examinations of insured institutions where necessary
to protect the deposit insurance fund and take "back-up" enforcement action to stop
unsafe practices if the FBC will not do so. It also will retain its current roles as
deposit insurer overseeing activities of state banks and thrifts that could pose risks to
the insurance funds and carrying out the prompt corrective action statute ~, helping
determine whether a critically undercapitalized institution should remain open), and
will retain responsibility for resolving bank and thrift failures at the least cost to the
insurance funds.
The Federal Reserve and the FDIC will have full access to bank and
thri ft supervisory information so they will be able to make independent judgments on

matters bearing on their core functions. The FBC will be required to provide the
Federal Reserve and the FDIC with timely and accurate information on the condition
of the banking and thrift industries and on individual depository institutions.
In essence, the Administration's proposal creates a three part structure of
banking industry oversight. Like the legs of a sturdy three-legged stool, each agency
will have important, independent functions and strengths, and each will complement
the others to create a stable, effective regulatory structure. The new regulatory
structure will oversee the safety and soundness of the banking industry and guard
against risks to the banking system far more effectively than the current mixup of
regulators.

11

B.

States Will Continue to Regulate State-Chartered Banks,
Tbereby Preserving the Dual Banking System.
The dual banking system will not be weakened by establishment of the

FBC. I would not be here before you if I thought the Administration's proposal
would have that result. In fact, rather than harm the dual banking system, state banks
and state regulators will both benefit under the Consolidation Act. They will have to
deal with only one Federal agency to resolve supervisory issues and may benefit from
the broader perspectives and reduced entrenchment of interests that a single regulator
system will provide. In particular, state regulators will have the opportunity to play
an enhanced role in the supervision of their state-chartered institutions.
Concerns that the dual banking system would be undermined because the
FBC would have a tendency to regulate state banks in the same manner as national
banks and not fully preserve their statutory differences, misunderstand the
Administration's proposal and mistake the powers of the FBC.
The Consolidation Act does not try to displace the states as primary
regulators of the banks they charter. Nothing in the Consolidation Act will give the
Federal government any additional authority over state-chartered banks or state bank
regulators, 6 and nothing will prevent an institution from seeking a state, rather than a
Federal, charter.

The FDIC will retain its authority to restrict activities by insured state-chartered
institutions that may present unacceptable risks to the Federal deposit insurance fund.
6

12
Under the Administration's plan, the FBC will certify state banking
departments that have demonstrated the ability to conduct satisfactory examinations.'
The FBC will place increased reliance on examinations by certified states. In
particular, the FBC will not duplicate examinations of well-capitalized state-chartered
institutions with less than $250 million in assets. 8 Thousands of state-chartered
institutions will fall into this category.
Even if the FBC wanted to discriminate against state-chartered
institutions, it simply could not do so. Under the Administration's proposal, it is !12t
possible for the FBC to regulate state banks in the same manner as national banks, and
to homogenize their powers, as some have asserted. Nothing in the Administration's
proposal authorizes the FBC to override state law to limit state bank powers. The
closest thing to that type of authority is the ability of the FDIC today to limit activities
of state banks that are not permissible for national banks if the FDIC believes the
activity presents risk to the insurance fund. 9 This is a deposit insurance-related power
that would remain with

~

FDIC under the Administration's proposal. Nor will the

FBC have the ability to re-interpret state law to override existing state precedents or to
construe state law one way when state authorities say it means something else. In
At present, the Federal Reserve and the FDIC each accept examination results
from 35 state banking agencies.
7

Periodic Federal examinations would still be required for larger banks and
small state-chartered banks that are in weaker condition.
8

9

12 U.S.C. § 1831a.

13
short, nothing in the Consolidation Act would enable the FBC to take the sort of
action that critics of the Administration's proposal regard as threatening to the dual
banking system.
To be blunt, I see critics of the Administration's proposal confusing the
"dual banking system" with having a choice between different Federal regulators. The
Administration's plan will preserve the former, but eliminate the latter. Arguments
that preservation of the dual banking system requires a choice between two or more
Federal regulators are really arguments for retaining the ability for institutions to
arbitrage Federal supervision. We need to face the fact that having multiple Federal
regulators preserves the risk that the regulators will engage in "competition in laxity"
to preserve their "share of the market." This does not promote safety and soundness
and, in fact, is a key reason to consolidate the agencies. Allowing institutions to seek
the most lenient regulator also undermines the legislative process. The banking
agency that most faithfully enforces laws passed by Congress loses its market share to
the agencies that "go easy" on the institutions they regulate.
The Administration's plan will give institutions a meaningful choice
between having a state or a Federal charter and consequently a choice between having
a state or Federal agency as a primary regulator. But institutions should not, and
under the Consolidation Act will not, have the opportunity to play one Federal
regulator off against another.

14

C.

The FBe Structure Will Provide an Appropriate
Balance Between Independence and Accountability.
The board of the FBC will have five members: the Secretary of the

Treasury (or the Secretary's designee); a member of the Board of Governors of the
Federal Reserve, designated by the Federal Reserve and acting as its representative;
and three members appointed by the President and confirmed by the Senate. One of
the three appointed members will be specifically appointed and confirmed as
Chairperson of the Commission, and will serve a four-year term (both as a member
and as Chairperson) expiring on the last day of March following a Presidential
election. The two other appointed members will serve staggered five-year terms.
One of these two members must be from another political party. The three appointed
members could be removed from office only for cause. Of the three appointed
members, one must be experienced in supervising state-chartered institutions. The
Commission will select its own Vice-Chairperson.
The FBC will be an independent agency, unlike the present OCC and the
OTS, which are bureaus of the Treasury Department. Thus, although the Treasury
Department will be represented on the FBe board, the Treasury Department will
actually give up supervisory authority over the banking system. The Administration
believes this governing structure will properly balance the need for independence in
regulatory action with responsibility to the electorate through a continuing Executive
Branch role.

15
The five-member board will provide the right balance between, on the
one hand, ensuring the FBC will be receptive to diverse perspectives, and on the other
hand, having a board of manageable size that can function smoothly and allow
individual board members to be held accountable for their decisions.

III.

THE NEED FOR BANKING AGENCY CONSOLIDATION
Mr. Chairman, members of the Committee, in the months and years

ahead, I do not want to have to appear before you, as my predecessor did, to ask you
to take drastic and costly measures in order to contain a banking or thrift crisis.
Rather, I want us to take action now, while we have such a good opportunity, so that
none of us will be forced to act with a gun to our heads. You have heard that
changing the status quo entails risks. The greater risk however, is to do nothing and
continue with a dilapidated regulatory system that is ill-designed to prevent future
banking crises and ill-equipped to

~

with crises when they occur.

We need a federal regulator that can focus on our Nation's banking
industry. We need a full-time banking regulator that will have the responsibility and
authority to keep this vital part of our financial system healthy. The FDIC's focus
should be on deposit insurance, not the myriad of other regulatory issues concerning
the banking industry, and the Federal Reserve's focus is necessarily and should be
foremost on monetary policy.

16

Regulatory consolidation is an important and necessary step in rebuilding
the infrastructure of the American economy. Every American deserves a place to
save, to borrow, and to invest. A healthy banking system performs these functions
and is a critical component to a robust economy. Overlapping and inconsistent
regulation has imposed excessive regulatory costs and burdens on the banking
industry. The excess costs are passed on -- in some form -- to customers. The excess
burdens stifle innovation, repress economic growth and, over the past two decades,
have contributed to a significant shrinkage of the industry.
Over the past twenty years, the percentage of our Nation's credit market
assets that are managed by depository institutions has shrunk from 62 percent to just
36 percent, the lowest level in history. This transformation may have limited
consequences for Fortune 500 companies that can tap the Wall Street and international
credit markets. But when the source of financial products and services moves from
Main Street to Wall Street, there are important consequences for most Americans.
For most people, the ability to go to college, to start a business, or to
buy a home depends on whether they can get a loan. As one banker quoted in Martin
Mayer's classic book, The Bankers, starkly put it, the actions of banks "determine
who will succeed and who will fail." 10 If the banking industry continues its decline,
where will these opportunities come from?

10

M. Mayer, The Bankers, p. 24 (1974).

17
For savers, this trend of declining market share means more reliance on
investments in place of federally insured deposits and a relative contraction of the
Federal deposit insurance safety net. For borrowers, this trend means reduced credit
availability, particularly for small and medium-sized businesses. It also means more
standardized credit tenns. At present, when a bank wants to offer a new product or
service to its customers, it often must weave through multiple regulators to obtain the
necessary approvals. This increases the cost of new products and services and stifles
innovation. Banks now must devote resources to regulatory compliance that they
could otherwise apply to meeting customer needs and reducing costs.
Small businesses also suffer as the role of banks vis-a-vis other financial
services providers continues to shrink. Small businesses are the principal source of
new jobs for Americans. In fact, from 1988 through 1990, small businesses created
all of the net new jobs in the economy. But these businesses are heavily dependent on
the banking industry for credit. Absent the major structural refonns set forth in the
Consolidation Act, the regulatory burdens created by the duplication, waste and
confusion of having four banking agencies will further sap the vitality of the Nation's
economy and narrow the opportunities the banking system can provide to emerging
businesses and the American people.
The purpose of the Administration's plan is not to shuffle responsibilities
from one Federal bureaucracy to another. I would not waste your time or mine on
any such proposal. Rather, the Consolidation Act seeks to establish a regulatory

18

system that will efficiently oversee the banking industry's safety and soundness and
support the vital role banks play in the domestic and global economies.

IV.

BENEFITS OF THE CONSOLIDATION PROPOSAL

The Administration's proposal for consolidating the Federal banking
agencies has many undeniable benefits. It will improve the quality of the regulation
and supervision of our banking system and eliminate inconsistent interpretations of the
same laws and rules. It will increase the accountability for regulating financial
institutions, providing a focal point for Administration, Congressional, and public
concerns. The Consolidation Act also will eliminate the potential conflicts of interest
inherent in the present system and ultimately reduce government and industry
expenses, benefitting banks, thrifts, consumers, and the economy as a whole.

A.

Consolidation Will Improve the Supervision of the
Financial Services Industry.

Today, because each banking agency is responsible for supervising just a
part of the financial services industry, the supervision of most banking organizations,
including virtually all of our Nation's largest organizations, is conducted by more than
one Federal agency. Each agency examines and supervises just a part of the typical
banking organization. For example, a holding company that controls a national bank,
a state nonmember bank and a thrift, is regulated by all four of the Federal banking
agencies. The Federal Reserve supervises the holding company, the

oce supervises

19
the national bank, the FDIC supervises the state nonmember bank, and the OTS
supervises the thrift. As of September 1993, there were 28 holding companies with
$743 billion in assets in exactly this position. In these and similar instances, each
regulator relies upon the other regulators for information regarding the parts of the
banking organization for which it is not responsible. Incredibly, there are literally
thousands of cases where our current system requires a separate bank holding
company regulator that does not regulate ~ of the holding company's subsidiary
banks or thrifts.
This fragmented approach to supervising and examining a banking
organization ignores the modem realities of how banking organizations operate and
hinders the agencies from obtaining a complete and accurate picture of what is really
happening. Transactions between related entities that are supervised by different
regulators can escape adequate scrutiny since no one agency sees -- much less
understands -- the organization as a whole. Supervision is particularly difficult when
the responsibility is divided between three or four agencies.
Like the classic Indian fable of the three blind men and the elephant,
each of the Federal banking agencies examines only a part of any large banking
organization and only a fraction of the overall banking industry. The blind man who
felt the elephant's leg thought he was standing beside a tree, the man who felt the
trunk thought he was holding a snake, and the man who touched the tail thought it was
a rope. Under today's bank regulatory system, anyone regulator may see only a

20
limited piece of a dynamic, integrated banking organization, when a larger perspective
is crucial both for effective supervision of the particular organization and for an
understanding of broader industry conditions and trends. l1 No one can credibly argue
that the current, segregated approach to regulation is the most effective way to guard
against risk to individual banking organizations or the banking system as a whole.
Under the Consolidation Act, banks and their holding companies and
other affiliates will be supervised as a 'unit, eliminating inefficiencies and potential
blind spots in supervisory oversight, and providing the FBC with multi-dimensional
perspectives on individual banking organizations and the banking industry.

B.

Consolidation Will Eliminate Inconsistent Regulation.

The Administration's proposal will eliminate inconsistencies in bank
regulation. Since banks and thrifts will no longer suffer or benefit from the different
application of enforcement standards or other policies of the separate agencies,
consolidation will end the practice of "regulator shopping, where institutions change
II

the character of their charters to come under the jurisdiction of a more lenient federal
regulator. Charter decisions will be made on their merits. Today, regulators are
sometimes inhibited from talcing the most appropriate action by the knowledge that the

Although the Federal Reserve supervises bank holding companies, it does not
supervise most of the banking subsidiaries of such organizations. Accordingly, it
often does not directly acquire any information about the banks owned by the holding
companies under its supervision.
11

21
action could prompt an institution to switch charters to obtain a more lenient federal
regulator. Of course, as already discussed, the Consolidation Act preserves the dual
banking system and consequently will not prevent an institution from choosing
between having a state or federal agency as its primary regulator.
Beyond the problem of federal regulator shopping, the multiplicity of
regulators creates countless headaches, particularly for banking organizations that must
reconcile inconsistent regulatory decisions, substantive standards, and procedural
requirements applied to their subsidiary organizations by different regulators. The
agencies sometimes apply different rules to similar situations and sometimes apply the
same rules differently. The Consolidation Act will provide a comprehensive and
coordinated mechanism for enforcing applicable laws and regulations.
In addition, since banking regulations will be consolidated into one
agency, there will be no need to coordinate policies and regulations among different
agencies. These efforts at coordination can take months, indeed, years, and involve
hundreds of people in complex negotiations. In the end, the efforts frequently fail. In
recent years, it has sometimes literally taken an Act of Congress to get the agencies to
coordinate.
With consolidation, the long delays inherent in the interagency
coordination process will disappear, allowing more rapid resolution of significant
policy questions. The quality of regulatory decisions and rulemaking also will likely

22
improve because agencies with different (and sometimes competing) agendas will no
longer have to negotiate and settle for compromise positions.

C.

A Consolidated Agency Will Be More Accountable to
Congress, the Public, and the Industry.
Consolidation of the Federal banking agencies will increase the

accountability of the regulators to the public. Today, when complaints arise in the
industry, the various agencies can side-step public and political accountability by
pointing fingers at each other. And any regulator who assumes responsibility has only
limited ability to influence the overall structure and effectiveness of the Federal
supervisory system. With a consolidated agency, the Congress, the public, and the
industry will know where to direct their questions and concerns and from whom to
expect action.
The structural flaws of the current system are not theoretical. In the mid
1980s, the warning signs were clear that banks had overinvested in commercial real
estate loans, but the regulators could not agree on a unified strategy to address the
problem. As we all know, this failure to take responsibility and act led to enormous
financial losses.
The government and industry will not be the only ones to benefit from a
single, accountable agency. The public and public interest groups, which cannot
afford banking lawyers to guide them through the existing regulatory maze, will be
able to go straight to the FBC with their comments and complaints. Few consumers

23
now know which Federal agency they should contact if they have a problem with their
bank or thrift. Institutions such as the Federal Financial Institutions Examination
Council have been unable to address the day-to-day concerns of consumers. Even
basic Community Reinvestment Act information has not been available in one place
because each agency has a different method for compiling and storing the information.
A single regulator will eliminate these problems.

D.

Consolidation Will Eliminate Potential Confticts
Presented When Agencies Perform Dual Roles.
The Administration's proposal addresses the inherent conflicts of interest

and focus that can arise when an agency has more than one core function. Under the
current structure, the Federal Reserve Board, as the central bank, and the FDIC, as
the insurer of bank deposits, both face such potential conflicts when they wear their
bank supervisory hats.
The Federal Reserve's primary mission is to oversee monetary policy,
but it also has bank supervisory duties. There are at least three ways in which
monetary policy and supervisory functions may conflict: (1) bank examinations may
conflict with counter-cyclical monetary policy; (2) the two functions compete for the
time and energy of policy-makers, with bank regulation always taking a back seat to
monetary policy; and (3) implementation of both functions by the same agency may

24
involve conflicts of interest with the result that the goals of one are subverted to those
of the other. 12 This combination presents potential conflicts.
As fonner Federal Reserve Board Vice-Chairman J. L. Robertson stated,
"in appraising the soundness of loans or investments, bank examiners should never be
obliged to switch from rose-colored glasses to black ones, and back and forth again, in
an effort to implement the monetary policy of the moment. "13 Banks and the
businesses they deal with need consistent direction and advice -- not policies that will
be tugged by macro-economic cycles. Regulatory and supervisory policy should be a
matter of safety and soundness.
The FDIC's primary role is to insure bank deposits, so it also has
potential conflicts when it supervises banks. The FDIC, as insurer, has incentives to
resist banking innovations if the insurance fund is solvent. These innovations,
however, may be exactly the changes banks need to pursue to be responsive to

Peterson, "Conflicts Between Monetary Policy and Bank Supervision," 1 Issues
in Bank Regulation, 25, 26 (1977).
12

Remarks of J.L. Robertson Before the 72nd Annual Convention of the
Tennessee Bankers Association (May 16, 1962), as reprinted in Federal Bank
Commission Act. Hearin&s Before the Senate Committee on Bankin~. HQusin~ and
Urban Affairs, 94th Cong., 1st Sess., 20 (1975). Federal Reserve Board ViceChairman Robertson further stated that "[t]he overriding reason ... for seeking to
have supervisory powers vested elsewhere than the Federal Reserve is my deep-seated
conviction that bank examiners should always be free to call the pitches as they see
them. They should be insulated from any possible temptation of the monetary
authority to use supervisory powers to implement monetary policy .... " Robertson,
"Federal Regulation of Banking: A Plea for Unification," 31 Law & Contempt Probs.
673,692 (1966).
13

25
evolving customer needs and to ensure a healthy future. On the other hand, if the
insurance fund nears insolvency, the insurer has incentives to forbear.
In the 1980's, the Federal Home Loan Bank Board (FHLBB) was
saddled with conflicting mandates similar to those the FDIC and Federal Reserve have
today. Like the FDIC, the FHLBB was responsible for both supervising the thrift
industry and protecting the thrift insurance fund. The FHLBB thrift examiners were
employed by the regional Federal Home Loan Banks. These banks were run by
presidents and boards of directors who were in turn appointed by the local thrift
industry. The conflicting insurance functions along with the structure of the thrift
examination staff produced an institutional bias in favor of forbearance and loose
regulatory control. This eventually led to the massive thrift crisis in the 1980s. 14
Agencies that are forced to wear two hats still have only one head.
Conflicts of responsibilities and focus are inherent in these situations. By realigning
bank and thrift regulators according to their core functions, the Consolidation Act will
eliminate these potential conflicts.

E.

Consolidation Will Reduce Government and Industry
Expenses.
The Consolidation Act is an important component of the Administration's

overall agenda of reinventing government -- creating a government that works better

14

The FHLBB was replaced by the OTS in 1989.

26
and costs less. Under the current system, each of the four Federal banking agencies
has its own team of examiners, its own bureaucracy, and its own regulations.
Consolidation will streamline government by eliminating this overlap.
We estimate that the administrative cost savings to the government from
agency consolidation will run somewhere between $150 and $200 million a year, after
initial transition costs and even apart from any fundamental changes in the
examination process. Direct savings to the banking industry will be substantially
greater. Banks will be able to tum from form-filing to lending, as they will have only
one regulator to deal with instead of two, three or four, and only one set of
exami nations and compliance reports to complete instead of many. Current trends in
the financial services industry make the reduction of compliance costs imperative.
Competition from other providers of financial services is shrinking profit margins in
banking, making it increasingly important for banks and thrifts to minimize expenses.
In 1992, the Federal Financial Institutions Examination Council, chaired
by Governor John LaWare of the Federal Reserve Board, estimated that the cost of
complying with banking regulations may be as high as 14 percent of banks' noninterest expenses. Given bank and thrift non-interest expenses of $156 billion in 1992,
that means the cost of complying with banking regulations may be as high as $22
billion annually. These costs are passed on -- in one way or another -- to customers.
If the Administration's reorganization proposal reduces this burden by

only ~ percent, it will result in savings of over $1 billion per year to the industry.

27
These are cost savings that eventually can be translated into loans to businesses and
homeowners and benefits to consumers.

F.

A Single Regulator Will Be Responsive to the Concerns
of Community Banks.
Since a large proportion of the Nation's banking assets are held by a

relatively small number of banking institutions, small banks, particularly statechartered banks, have expressed concern that a single Federal regulator would
concentrate on the issues important to large banks. I believe the Federal Banking
Commission will actually be more responsive to concerns of small institutions than the
present regulatory regime.
The FBC will be dedicated to bank supervision. In the present system,
most small banks are regulated by either the Federal Reserve or the FDIC, both of
which have other, potentially conflicting, and at least distracting, core functions.
Under the Consolidation Act, the FBC will focus solely on bank supervision and not
have any conflicting responsibilities. As a result, small banks will have a regulator
that is solely dedicated to responding to supervisory concerns.
The FBC will supervise banks in all 50 states and the District of
Columbia. As the sole agency accountable for banking matters, it will have to be
responsive to concerns of the full range of banks and thrifts -- otherwise I am sure the
FBC will hear from the members of this Committee and the rest of Congress.

28
G.

A Consolidated Agency Will Assess Fees and Expenses
Equitably Among Institutions.

Like the OCC, OTS, and FDIC, the FBC will not require any taxpayer
funds. It will recover all its costs through non-appropriated means. The
Administration's proposal incorporates a funding method for the FBC that is equitable
to both national and state banks and institutions of all sizes.
The current funding system is based largely on assessments levied on
institutions to pay for the cost of their supervision and regulation. The current
system, however, does not always allocate the costs fairly.
All institutions currently pay for FDIC supervision through deposit
insurance premiums. A rough estimate is that approximately 1 basis point of the
deposit insurance charge currently goes for FDIC supervision expenses. But because
the FDIC directly supervises only state non-member banks, national and state member
banks bear far more than their fair share of the FDIC's examination costs.
Holding companies and state member banks are inspected without charge
by the Federal Reserve. Taxpayers pay indirectly for these costs, which the
Administration recently estimated at about $311 million annually, since this amount
represents monies that are not turned over to the Treasury by the Federal Reserve.
Nationa! banks and thrifts pay assessments to the

oce and OTS to cover

the costs of their examinations. State banks pay varying amounts to their state
regulators, but these charges are typically less than federal assessments.

29
Under the Consolidation Act, the FBC will be funded from three
sources. The FDIC will earmark a small portion -- 1 basis point -- of the deposit
insurance premiums that it collects from all depository institutions to pay for federal
supervision -- essentially the same amount it uses for supervision today -- but the
money would be provided to the FBC. Deposit insurance premiums would not rise;
indeed, they are projected to fall sharply, as the Bank Insurance Fund approaches its
statutory target of 1.25 percent of reserves to insured deposits. We anticipate, in fact,
that with the likely decrease in deposit insurance premiums for banks, the combined
deposit insurance premium and supervision charge will be less than the insurance
premium banks pay today.
For a transition period, the Federal Reserve will make annual payments
to the FBC in an amount equal to the Federal Reserve's savings from transferring
supervisory functions to the FBC. This payment would begin to phase out in the sixth
year after consolidation and would be fully phased out after the fourteenth year.
The rest of the FBC's funds will be generated by fees levied on the
institutions it examines. Assessments would be based on asset size. National banks
and thrifts will pay fees on the full amount of their assets. State-charted banks will
pay no fees on their first $1 billion in assets, and fees on assets of more than $1
billion will be at no more than half of the rate for national banks of comparable size.
All assessments will be set pursuant to standard notice and comment
procedures to solicit industry input, and, along with all FBC expenditures, will be

30
subject to periodic review by the General Accounting Office, Congress, and FBC
board members.
V.

RESPONSE TO CONCERNS ABOUT THE ADMINISTRATION'S
PROPOSAL

Change is always unsettling, even change for the better. We all know
this is particularly true in Washington, when responsibilities are proposed to be shifted
from one bureaucracy to another. Critics of the Administration's proposal, which
include certain members of the Federal Reserve, have raised a number of concerns
respecting those aspects of the Consolidation Act that will reduce the Federal
Reserve's bank supervisory and regulatory functions. In fact, the Federal Reserve
Board has even published a counter-proposal. But virtually everyone agrees that
consolidation of some form is needed.
The arguments opposing the Administration's plan all assert that the
Federal Reserve must retain a large role in banking regulation and supervision.
Several of these arguments rely on intimidating invocations of terms such as systemic
11

risk," or the "payments system." When probed, however, none of the arguments is
persuasive. We have carefully crafted the Administration's proposal to take account
of the Federal Reserve's legitimate needs and concerns.

31

A.

One Federal Regulator Is Better Than Two.
Critics contend that we need more than one Federal banking agency in

order to promote "competition" in the bank regulation and supervision arenas and to
preserve "the healthy process of dynamic tension in bank rule making." This
argument sounds very strange to me. Its logic would require any really important
Federal regulatory responsibility to be split between at least two agencies. Thus, we
should have two Securities and Exchange Commissions, or three Food and Drug
Administrations. Fortunately for the taxpayers, the Federal government is not Noah's
Ark -- two of everything is not necessary, or sensible.
The argument for maintaining multiple banking regulators also fails as a
practical matter. To the extent multiple regulators have different viewpoints, banking
organizations can express their regulatory preferences by switching their charters so
they come under the jurisdiction of their preferred regulator. However, it is difficult
to see any advantage or reason to continue or encourage this type of regulatory
arbitrage. The more lenient regulator always wins, whether or not its views best
promote safety and soundness or other public policy goals such as fair lending.
It also is a mistake to believe competition among bank agencies is needed

to promote financial product innovation. Innovation is not initiated by bank regulatory
agencies. It comes from the marketplace, not a government desk. It is the non-bank
financial services providers, which dominate the industry, as well as foreign banks,

32
that now instigate change by responding to and anticipating customer needs. State
banking industries also serve as testing grounds for new ideas.
Some critics further argue against full consolidation on the grounds that
it would eliminate important checks and balances on supervisory powers. This

argument is predicated upon a fundamental misunderstanding of what governmental
checks and balances are all about. Regulatory power is not restrained by creating
additional agencies to perform duplicate functions. Rather, an agency acts responsibly
because it is subject to Congressional oversight, the courts, the press, and market
pressures -- particularly from the nonbank financial services sector and foreign bank
regulators. National banks and thrifts also will retain their ability to convert to state
charters in order to switch their primary regulator.
Moreover, as mentioned above, the FBC will be governed by a five
member board that will include a representative of the Federal Reserve. The
Consolidation Act also will require a political mix on the FBC board. This diverse
governing body will not be of one mind on every issue and to suggest that
Commission members will not express their views when they disagree with each other
is to say that FBC members will behave differently from members of every other
government commission and board. In addition, the FDIC will retain authority to
conduct back-up examinations when it deems necessary. The staff of the Federal
Reserve will participate in FBC bank examinations, communicate freely with FBC
examiners, and take back-up enforcement action when needed. In other words , the

33
structure of the FBC, and its relationship with the FDIC and the Federal Reserve, will
provide plenty of balance.

B.

The Administration's Proposal Provides an Appropriate Role
for the Federal Reserve.
I know each of you have heard voices saying that the Administration's

proposal would improvidently remove the Federal Reserve from the bank supervisory
business which, in turn, would cause untold harm to our economic system and
increase the risk of systemic financial crises. This is not true.
The Federal Reserve, and others, have articulated a number of needs -this consolidation proposal meets those needs. The Federal Reserve is concerned
about its access to the bank supervisory process, which it believes it needs to conduct
monetary policy and control systemic risk. It also has sought assurances that it will
retain the powers necessary to manage the discount window and payments system.
This proposal satisfies all of these concerns, providing the Federal Reserve with
sufficient bank supervisory capabilities and preserving all of its core, central bank
powers and responsibilities. Let me assure you, this Administration would do nothing
to put any part of our financial system in jeopardy.

34
1.

The Federal Reserve Will Have Ample Bank
Supervisory Powers to Perform its Central Bank
Functions.

Opponents of full consolidation argue that the integrity of our monetary
policy and the stability of the financial system depend on the Federal Reserve
maintaining a role in banking supervision. The Administration's proposal fully
addresses this concern and actually expands the scope of the Federal Reserve's
supervisory authority in banks most related to these functions.
Today, the Federal Reserve directly supervises only 7 percent of all
FDIC-insured depository institutions, and only 15 percent of the Nation's bank and
thrift assets. Most of the banks under its supervision are small, with an average size
of less than $45 million in assets. The Federal Reserve supervises only 12 of the 52

u .S.

banks with assets of more than $10 billion, and only 5 of the 20 largest

institutions. For information concerning the remaining 93 percent of the depository
institutions, including most of the largest organizations, the Federal Reserve relies on
reports prepared by the other banking agencies -- namely the DCC, OTS and FDIC.
Some contend that it is unrealistic and unduly hopeful to believe that the
knowledge and expertise that the Federal Reserve needs to do its job properly can be
gai ned from studying exam reports prepared by another agency. However, this is
exactly what the Federal Reserve does today. Review of Federal Reserve supervisory
practices at the largest national bank holding companies reveals that the Federal
Reserve relies heavily, indeed, almost entirely, on the examination reports prepared by

35
the OCC for information regarding national banks and their subsidiaries. The Federal
Reserve does not audit, or otherwise probe behind the conclusions of the OCC
reports. The OCC's conclusions regarding the national banks are adopted wholesale
and often incorporated into the Federal Reserve's annual bank holding company
reports. If the Federal Reserve can rely on the examination reports prepared by the
OCC and the other federal banking agencies for the bulk of the information it obtains
regarding the banking industry, it is hard to see why it cannot rely on the more
comprehensive reports that will be prepared by the FBC. IS The contention that sound
monetary policy rests on the Federal Reserve's continued direct supervision over a
small subset of the banking industry simply is not credible. 16
In addition to receiving FBC examination reports, the Administration's proposal
will enable the Federal Reserve to participate actively in FBC examinations of key
institutions. Considering that the Federal Reserve currently examines only 6 of the
Nation's 25 largest banks, the Consolidation Act will significantly expand the Federal
Reserve's information-gathering capacity. The Federal Reserve will also have.a
representative on the FBC board, and will be able to consult with FBC examiners,
many of whom will undoubtedly be drawn from the Federal Reserve's present bank
examiner ranks. It will be unlawful for the FBC to withhold information, at any
level, from the Federal Reserve.
IS

Even if the Federal Reserve's powers were expanded to include responsibility
for all bank supervision, it could not obtain by itself the information necessary to
formulate monetary policy. Banks hold only 36 percent of the Nation's credit market
assets. Relying solely upon banks to take the pulse of the financial services sector is
an anachronism that the Federal Reserve had to abandon long ago as the market shares
of non-bank competitors have grown. In addition, sound monetary policy depends on
information from the non-financial sectors of the economy and the Federal Reserve
obtains most of this information from others -- such as the Departments of Commerce
and Labor. While it supplements this data with its own surveys, the Federal Reserve
does not take the position that it needs to duplicate the data-gathering operations of the
(continued ... )
16

36
Moreover, much of the Federal Reserve's supervisory activities in
connection with bank holding companies with national bank subsidiaries are
duplicative of the work already performed by the OCC and the states. This
duplication results from the way modern banking organizations are structured and
operated, and the different supervisory approaches taken by the Federal Reserve and
the

oce.
Most banking organizations are structured along functional lines rather

than according to charter type. For example, a banking organization may engage in
securities trading through its bank and nonbank subsidiaries. Since the activities of
these various entities often are highly integrated, a proper examination of most
modern banking organizations must encompass the bank's interactions with its nonbank affiliates, not just banking operations or nonbanking operations taken in isolation.
For this reason, the

oee looks at the holding company nonbank subsidiaries in

connection with its examination of national banks. The Federal Reserve frequently
repeats part of the process, however, when it looks at the same subsidiaries in
connection with its inspection of holding company nonbanking entities.
Similarly, since the procedures and controls of the banking and
nonbanking subsidiaries often are the same, it is not necessary to examine them twice

continued)
other agencies. It can work the same way for the banking sector.
16(, ..

37
-- first for the bank subsidiaries and then for the nonbank subsidiaries. Nonetheless,
under the current system, this is exactly what happens. The

oce examines the

procedures and controls of the national bank subsidiaries and the Federal Reserve
inspects the same procedures and controls in connection with its review of the holding
company's nonbank subsidiaries.
The Administration's plan satisfies the needs articulated by the Federal
Reserve for a significant supervisory role and, at the same time, dramatically reduces
the duplication and eliminates the inconsistency inherent in the current supervisory
system. By allowing the Federal Reserve to participate in, and even direct, joint
examinations, the Consolidation Act will give the Federal Reserve a "hands-on" role
involving up to 30 percent of the Nation's bank and thrift assets -- double the amount
under its present direct supervision. 17

It is worth noting that some contend the :federal Reserve does not need any
"hands-on" supervisory experience to monitor the Nation's economy. At present, the
Federal Reserve's monetary policy-makers do not conduct bank examinations nor do
they sit down with Federal Reserve bank examiners and discuss the conditions of
particular banks. They get the banking information they need to formulate monetary
policy from examination reports. "Divorcing the Federal Reserve from bank
supervision would in no way diminish its ability to keep abreast of banking
developments ... [and] would enable the Federal Reserve Board to devote its time
and attention exclusively to its most valued function -- the formulation and
implementation of monetary policy." Federal Reserve Board Vice-Chairman
Robertson nu;u:a note 13, at 692.
11

The experiences of other countries' central banks do not support the contention
that effective monetary policy requires direct bank supervisory authority. While
comparisons of the bank regulatory and monetary policy apparatus in other countries
(continued ... )

38
I do not accept the assertion that the changes proposed to the Federal
Reserve's bank regulatory responsibilities and the redefinition of its bank supervisory
authority will so reduce the Federal Reserve's "clout" that it will become incapable of
implementing monetary policy. While any reform of the banking system must
inevitably shift responsibilities, the Federal Reserve will lose only a fraction of its
powers and responsibilities and will gain others. It will retain all of its core functions
and powers, including the formation of monetary policy, open market operations,
establishment of bank reserve requirements, management of the payments system, and
operation of the discount window. It will only lose its rulemaking authority over state
member banks and bank holding companies. Given that all state member banks hold
only 15 percent of the Nation's bank and thrift assets, it is difficult to see how the
Federal Reserve could be rendered ineffectual by the loss of direct control over these
institutions. No banker would ever ignore the local Federal Reserve district bank
President, let alone the Federal Reserve Board in Washington.

continued)
is difficult, the diversity of systems certainly indicates that there is no "right" way to
accomplish these tasks. Only four of the twelve Basle Committee countries conduct
banki ng regulation and supervision mainly through their central bank. Even in those
cases -- and in many of the other countries where banking regulation has been lodged
in the central bank -- the bank itself is responsible to or overseen by a government
entity, typically the Finance Ministry. The United States is unique among developed
countries in having both fully insulated its central bank from ongoing national
executive control ruJ..d having assigned it a major role in bank regulation and
supervision. For a more detailed discussion of the role of other central banks in bank
regulation and supervision, see Appendix C.
17 ( •••

39
2.

The Federal Reserve Will Retain Full
Authority to Manage the Payments System
and Operate the Discount Window.

Under the Consolidation Act, the Federal Reserve will continue to have
complete. independent authority to regulate and supervise the payments system.
Notwithstanding, certain critics oppose agency consolidation on the basis that it could
impair the Federal Reserve's ability to manage the payments system. Few challenge
this argument because few understand what the "payments system" is, or what the
Federal Reserve does in connection with it. Let us look at what is really going on.
The Federal Reserve basically perfonns four different functions in
relation to the payments system. First, it is responsible for insuring sufficient
currency is in circulation. When depository institutions need more currency, such as
during the holiday shopping season, they can order currency from the Federal Reserve
Banks and branches. These banks and branches also retire currency when the need
for cash declines and depository institutions return excess currency in exchange for
credit to their accounts. Thus, for these purposes, the Federal Reserve serves as a
cashier. It does not need to supervise banks or their holding companies to perform
this function.
The second component of the Federal Reserve's role in the payments
system concerns check-processing services. The Federal Reserve has complete
authority to regulate all aspects of the check-processing system, including the receipt,

40
payment, collection, and clearing of checks. Its authority in this regard is complete.
This too requires no further regulatory powers over banks.
It is important to note that the Federal Reserve competes with private

check clearing services in the processing of checks. Clearing centers process checks
by crediting the accounts of institutions receiving payments, and debiting the accounts

of paying institutions. The success of these competitors is further evidence that the
Federal Reserve does not need bank supervisory powers to perform these check-

.

.

processmg servIces.
The third Federal Reserve function in the payments system involves
electronic funds transfer services. Federal Reserve offices transfer large dollar
payments between different institutions, or an institution and the U.S. Treasury or
other government agency, through the tlFedwire" system. Such transfers take only a
few minutes and are guaranteed final once the receiving institution receives notice of a
credit to its account. Fedwire competes with other electronic fund transfer services,
such as the Clearing House Interbank Payments System ("CHIPS") and the Society for
Worldwide Interbank Financial Telecommunications (n SWIFT"). As with check
clearing centers, the existence of private electronic funds transfer services, like CHIPS
and SWIFT, demonstrates that there is no essential link between bank supervision and
operation of the Fedwire system.
The final role of the Federal Reserve in the payments system concerns its
net settlement services. The Federal Reserve Banks provide these services to private

41
participants in the payments system

(~,

check clearinghouses and wire transfer

systems) that process a large volume of transactions among their member institutions.
The Federal Reserve Banks perform net settlement by posting net debit and net credit
entries generated by these private organizations to the accounts of individual
institutions. Essentially, this is an extensive, sophisticated computer system that keeps
track of the flow of funds between institutions. This function too does not depend on
any bank supervisory powers the Federal Reserve mayor may not have.
The Federal Reserve does not need bank supervisory powers in order to
perform any of its responsibilities in connection with the payments system. This is
obvious, since today the Federal Reserve directly supervises only 15 percent of the
Nation's bank and thrift assets and only approximately 970 out of 13,500 depository
institutions. No evidence suggests that the Federal Reserve conducts any "hands-on"
supervisory examination of individual banking institutions not under its primary
supervision in regards to the payments system.
Some also have asked whether the Federal Reserve needs bank
supervisory powers to operate the discount window." Like the Federal Reserve's
II

oversight of the payments system, its management of the discount window (where
Federal Reserve Banks make short-term, secured loans to financial institutions), does
not depend upon the Federal Reserve's bank supervisory jurisdiction. As noted above,
the Federal Reserve does not examine the vast majority of institutions that borrow
from the discount window, and no evidence indicates the Federal Reserve conducts

42
any "hands-on" supervision of individual institutions with respect to their use of the
discount window. Under the Consolidation Act, the Federal Reserve will coordinate
with FBe regulators to assess the financial condition of all banks, much as it
coordinates with the OCC, OTS and FDIC today. Moreover, the Federal Reserve
lends only on a fully secured basis, and traditionally, accepts only the highest quality
collateral,

~,

government securities. It does not take knowledge about banking to

evaluate the quality of readily marketable government securities. And it does not take
the skills of an entire bank examination agency to be a fully-secured lender.

3.

The Federal Reserve Will Have Abundant
Bank Supervisory Powers to Guard Against
"Systemic Risk."

The term "systemic risk" pops up in virtually every statement made by
opponents of the Administration's consolidation proposal. Like the "payments
system," few understand what systemic risk is, and fewer still know the Federal
Reserve's connection with it.
Systemic risk refers to the likelihood of a sudden, unexpected, and
widespread collapse of confidence in the financial system, with a potentially large
effect on the economy in general. Systemic risk can be triggered by a wide variety of
events and originate either inside or outside the banking system. One recent example
of a systemic event occurred in October 1987, when the Dow Jones stock market

43
index dropped almost 600 points in a single day. 18 What made this a potential
"systemic crisis was the possibility of contagion, or other spill-over effect. Virtually
II

every aspect of the financial system was affected by the 1987 stock market break.
This system includes banks and thrifts, insurance companies, investment banks,
finance companies, pension funds, mutual funds, and various government sponsored
agencies, as well as the markets where financial instruments trade, such as the stock
markets, markets for public and private debt, futures exchanges, international markets,
and over-the-counter markets.
Consolidation opponents try to raise the specter of impending financial
crisis by stating that any reduction in the Federal Reserve's banking regulatory
responsibilities would decrease its ability to anticipate and cope with potential systemic
financial problems. This is simply not correct.
The financial market encompasses far more than the state-chartered
member banks that the Federal Reserve directly supervises today. As previously
noted, it includes stock markets, bond markets, commodities markets, the insurance
industry, and many other components. Today, the Federal Reserve is the principal
supervisory authority for only a small fraction of the overall market. The SEC, OTS,

acc,

FDIC, Department of the Treasury, and additional federal agencies, together

with state bank and insurance regulators and the supervisory authorities in other

The failure of Drexel Burnham Lambert in 1990 arguably constituted a systemic
crisis, albeit a much less significant event than the 1987 stock market drop.
18

44
countries, are all responsible for overseeing portions of this market. 19 The Federal
Reserve does not have, and has not argued that it needs or wants supervisory authority
over these other institutions or markets to deal with systemic risk. Recent events
suggest that this arrangement works well. Thus, it appears that the Federal Reserve is
satisfied that these other supervisory authorities and the information they collect and
suppl yare sufficient for it to contain systemic risk. It is difficult to understand why
the Federal Reserve would be unable to cooperate with the FBC to obtain whatever
information it needs about the banking industry.
The consolidation proposal also will not affect the Federal Reserve's
ability to react to a systemic shock. The Federal Reserve responses to systemic crises
by supplying liquidity through open market operations, discount window lending or
some combination of the two. In the case of open market operations, the Federal
Reserve relies on the market to allocate the new liquidity. No Federal Reserve bank
supervisory capability is required. The effectiveness of this approach has been

The Federal Reserve is by no means the only agency involved in crisis
management. Other government agencies can and do play a role in containing
systemic problems. For example, by virtue of the deposit guarantee it conveys, the
FDIC bolsters public confidence in the banking system's ability to pay insured
depositors. The oce contains systemic risk when it removes uncertainty in financial
markets by quickly, consistently, and uniformly dealing with troubled and failing
national banks. The Working Group on Financial Markets, comprised of
representatives from the Treasury Department, the Federal Reserve, the SEC, and the
Commodities Futures Trading Commission, also monitors financial market activities
and addresses systemic risk issues.
19

45
demonstrated in a number of recent cases, such as the failure of Drexel Burnham
Lambert in 1990 and the stock market break in 1987.
Not every financial market disturbance constitutes a systemic risk. In
fact, in the post-Depression era, truly systemic events have been relatively rare.
Furthermore, the possession of bank supervisory capabilities would not likely help the
Federal Reserve to anticipate the type of market shocks that trigger systemic events,
such as extreme stock or commodity price movements or regional recessions. In any
event, as discussed above, the Federal Reserve will continue to have significant bank
supervisory powers under the Administration's plan.
Noone wishes to impair the means for dealing with a systemic crisis.
But the Administration's proposal raises no such issue. The Consolidation Act does
not reduce the Federal Reserve's ability to monitor and anticipate systemic risk nor to
react to a systemic problem and play its role along with other agencies.

VI.

CONCLUSION
The need to restructure the Federal banking and thrift regulatory system

has grown more urgent over the past several decades, as distinctions among depository
institutions have blurred and the regulatory system has grown more costly and
complex, and less efficient and responsible. In this time of economic stability, when
bank profits remain at all-time highs, we have an opportunity to take bold,
comprehensive action to improve the system.

46
Reforming our Nation's regulatory structure is one of the most
significant steps that could be taken to reduce the regulatory burdens on insured
depository institutions and help assure their continued success. The Administration's
proposal is the best way to accomplish this reform. It will allow banking institutions
to compete more effectively and it will promote better service to consumers. It will
create a regulatory structure that is more effective than the current hodgepodge of
agencies in overseeing the safety and soundness of individual banking organizations
and safeguarding the stability of the banking system as a whole. The Consolidation
Act also will advance the overall agenda of reinventing government by streamlining
the bureaucracy, reducing costs, and improving service. For all these reasons I urge
this Committee and the Congress to move quickly on the Consolidation Act, and I, the
rest of the Treasury Department, and other members of the Administration, look
forward to working with you.
That completes my formal statement. I would be pleased to answer any
questions you have.

Appendix A: The Current Federal Structure for Supervising
FDIC-Insured Depository Institutions and Their Holding Companies

Treasury

~~.---..,
Office of Thrift
Supervision

Office of the
Comptroller of
the Currency

~Z---..Sr-~

./ZSr----.....;a",.-.-----,
State and
Federal Savings
Associations

Savings and
Loan Holding
Companies

Federal Reserve

Federal Deposit
Insurance
Corporation

National Banks

State Member
Banks

Bank Holding
Companies

State
Nonmember
Banks

Appendix B: The Proposed Federal Structure for Supervising
FDIC-Insured Depository Institutions and Their Holding Companies

Federal Banking Commission

State Banks

National Banks

Bank Holding
Companies

State and Federal
Savings
Associations

Savings And loan
Holding
Companies

APPENDIX C
Bank Supervision Responsibilities in the Non-U.S. Member
Countries of the Basle Committee on Banking Supervision
Belgium
Bank supervision is the responsibility of the Banking and Finance Commission, an
autonomous commission.
Monetary policy is the responsibility of the National Bank of Belgium, the central bank.
Canada
Bank supervision is the responsibility of an independent agency, the Office of the
Superintendent of Financial Institutions (OSFI). The Superintendent is appointed by the
Finance Minister and confirmed by the Cabinet for a seven-year term. Governmental
policy regarding financial institutions is determined by the Finance Department.
Monetary policy is the responsibility of the central bank, the Bank of Canada. The Prime
Minister appoints the Bank's Board of Directors, which selects the Governor. The
Governor is confirmed by the Cabinet and serves a seven-year term which does not
coincide with that of the Government.
France
Bank supervision is the responsibility of the Banking Commission, which is chaired by
the Governor of the Bank of France (central bank) and includes a high ranking Finance
Ministry official as Vice Chairman. At present, the Banking Commission's staff is drawn
from the Bank of France, although 1993 legislation gives the Commission authority to
recruit from other sources as well. Overall regulatory policy is established by the
Committee for Banking Regulation, which is chaired by the Finance Minister. The 1993
legislation strengthening the central bank's independence also deleted the designation of
the Governor of the Bank of France as Vice Chairman (although continuing the Governor
as a Committee member).
Under the recent legislation, monetary policy is now the responsibility of the Bank of
France, which must aim to assure price stability "within the government's general
A nine-member Monetary Policy Council (with six
economic policy framework.
independent members named by the government) makes the necessary decisions; the
Finance Minister may participate in the Council's meetings but not in its decisions.
It

German)'
Bank supervision is the responsibility of the Federal Banking Supervisory Office (PBSO),
an agency of the Finance Ministry. The FBSO is headed by a President, who is
nominated by the German Chancellor and appointed for an unspecified term by the
German President. Certain regulatory changes proposed by the FBSO must have the
concurrence of the central bank (Bundesbank). The FBSO also depends in part on the
central bank for data collection and monitoring of compliance with banking regulations
(e. g., foreign exchange).
Monetary policy is the responsibility of the Bundesbank, the central bank, with sole
authority to formulate and implement monetary policy. The President of the Bundesbank
is nominated by the German Chancellor and appointed by the German President for an
eight-year term, which does not coincide with the term of the Government.

Bank supervision is the responsibility of the Bank of Italy. The Bank of Italy is a public
institution whose shareholders are public financial institutions. The Governor is
appointed for an unspecified term, generally for life, by the Bank's Senior Council,
whose members are nominated by the shareholders. The Prime Minister and the
Treasury Minister must approve the nomination of the Governor. The Treasury Ministry
has the responsibility for inspecting the Bank of Italy.
Monetary Policy is the responsibility of the Bank of Italy. The Bank sets the monetary
and credit targets and official interest rates within the guidelines of the Inter-Ministerial
Economic Planning Committee (CIPE). CIPE is chaired by the Prime Minister and
includes Ministers of the Treasury, Budget, and Finance. eIPE sets macroeconomic
policy such as GDP growth and inflation targets.
Japan
Responsibility for bank supervision is shared by the Ministry of Finance (MOF) and the
Bank of Japan. Licensing, regulation and supervision are the direct, primary
responsibility of the Ministry of Finance. The MOF Banking Bureau plays the most
significant role, although the International Finance Bureau of the MOF supervises bank's
foreign exchange and international operations. Banks are also supervised to some degree
by the Bank of Japan, which has entered into broad supervisory agreements with all
individual banks and many other financial institutions as a condition of access to bank
credit services and payment facilities.

2

Japan (continued)
Monetary policy is the responsibility of the Bank of Japan. While nominally independent,
Bank of Japan policy is heavily influenced by the MOF I which has a non-voting seat on
its board. The Governor of the Bank of Japan is appointed for a five-year term by the
Cabinet, reflecting the consensus of the Prime Minister and the leadership of the ruling
party. His term does not coincide with that of the Government.
Luxembourg
Bank supervision is the responsibility of the Institut Monetaire Luxembourgeois, which
is an autonomous authority; however, some staff members of the Institut are appointed
by the Ministry of International Finance, which also has some involvement in bank
supervision matters.
Luxembourg's monetary policy is the responsibility of the Ministry of International
Finance, which works closely with the Belgian Ministry of Finance and the Belgian
Central Bank. Luxembourg has no central bank.
Netherlands
The central bank, De Nederlandsche Bank, is responsible for both the supervision of the
banking system and monetary policy. The management of the Bank is overseen by a
Governing Board, consisting of a President, a Secretary, and four other members, who
are appointed by the Minister of Finance for a period of seven years. The government
exerts its influence over the Bank's administration through its Supervisory Board, which
consists of twelve members, all appointed by the Ministry of Finance.
Sweden
The Financial Supervisory Authority, which is subordinate to the Ministry of Finance,
is responsible for the licensing and supervision of banks (and insurance, securities, and
other credit companies). The authority is directed by a Board comprised of six
government-appointed members and a Director-General, who serves as Chairman.
The Sveriges Riksbank, the central bank, is responsible for monetary policy. The Bank
is independent of the government, reporting to the Swedish parliament.

3

Switzerland
Bank supervision is the responsibility of the independent Federal Banking Commission.
The Commission members, including the President, are appointed by the Cabinet of the
Executive Branch (Federal Council) for four-year terms. The President can be
reappointed. The Commission works part-time, and its work is carried out by a
secretariat administratively under the Finance Ministry.
Monetary policy is the responsibility of the independent central bank, the Swiss National
Bank. The Bank's Governing Board meets periodically with the Government to
coordinate major policy decisions. The President of the Governing Board is nominated
by the private sector National Bank Council and appointed to a six-year term by the
Federal Council.

United Kingdom
H. M. Treasury is responsible for establishing the overall legislative framework for the

operation and implementation of all facets of the financial services sector, including
banking, securities and building societies. In addition, H.M. Treasury is responsible for
establishing monetary policy. Meanwhile, the Bank of England plays a role in
implementing monetary policy and supervises the banking industry. Responsibility for
supervising the securities industry rests with the Securities and Investments Board and/or
one of the recognized Self-Regulatory Organizations.
Bank supervision is the responsibility of the Bank of England (central bank). The
Governor is appointed by the Prime Minister for a five-year term that does not coincide
with that of the Government.
Monetary policy is the responsibility of the Treasury. Decisions to change the base
interest rate are made by the Chancellor of the Exchequer (Finance Minister) in
consultation with the Prime Minister and with the advice of the Governor of the Bank of
England. The Bank of England carries out monetary policy for the government.

4

Primary Responsibility for Bank Supervision and Monetary Policy in
Non-U.S. Member Countries of the Basle Committee on Banking Supervision

FINANCE MINISTRY

CENTRAL BANK-

OTHER

Bank Supervision

Germany (a)
Luxembourg
Japan (a)
Sweden

France (b)
Italy
Netherlands
United Kingdom

Belgium (c)
Canada (c)
Switzerland (c)

Monetary Policy

Luxembourg
United Kingdom

France
Belgium
Canada
Germany
Japan
Netherlands
Sweden
Switzerland

Italy
(Committee)

(a) Some involvement of Central Bank
(b) Significant involvement of Ministry of Finance
(c) Independent Authorities
*In no case is bank supervision the responsibility of an inde.pendent central bank.

5

DEPARTMENT OF THE TREASURY
WASHINGTON. D.C. 20220

Highlights of the Administration's
Regulatory Consolidation Proposal

•

•
•

The dual banking system will be preserved - and enhanced. The
Administration's plan will establish a system for certifying state banking
departments and placing increased reliance on the examinations they conduct.
In particular, the Federal Banking Commission (FBC) will not repeat certified
states' examinations of small, well-capitalized state banks. (See p. 7.)

State banking concerns will be heard on the FBC board. The plan will
require that one of the independent members of the FBC board be experienced
in regulating state-chartered depository institutions. (See p. 7.)

The Board of Governors of the Federal Reserve System (Fed) will have a
significant role in examining both small and large institutions. The Fed be
able to participate in joint examinations of 10 of the nation's top 20 banking
organizations, and could lead the examinations for a portion of those top 20
organizations. In addition the Fed could also participate in joint examinations
of a cross-section of the smaller state member banks. (See pp. 13-14.)

•

The FBe will have a meaningful process for institutions to appeal
supervisory decisions without fear of retribution. The Administration's plan
specifically provides for a disciplined internal appeals process for review of
material supervisory decisions. The review is required to be conducted by an
agency official who was not involved in and does not report to the official who
made the supervisory decision in question. (See p. 8.)

•

Community banks, consumers, small businesses, and thrifts will be able to
make their concerns heard by the FBC through the FBC's advisory
councils. The Administration's proposal calls for four advisory councils to
facilitate communications with community banks, consumers, small businesses,
and thrifts. These councils provide a direct forum to bring concerns to the
attention of the FBC.

•

The Government and the banking industry will save money as a result of
consolidation. The Administration estimates that the administrative cost
savings to the government from agency consolidation will run somewhere
between $150 to $200 million per year, after initial transition costs and even
apart from any fundamental changes in the examination process. Moreover, a
1992 Federal Financial Institutions Examination Council study, headed by Fed
Governor John LaWare, suggested industry regulatory compliance costs were

substantial, exceeding 14 percent of non-interest expense per year. Using 1992
cost figures for banks and thrifts, this methodology suggests that each 5 percent
reduction in regulatory burden achieved by regulatory consolidation would save
the industry $1 billion annually. (See p. 11.)
•

The funding structure for the FBC will treat all sizes and types of
institutions fairly. First, when collecting deposit insurance premiums, the
Federal Deposit Insurance Corporation (FDIC) will collect on behalf of the
FBC I cent per $100 of domestic deposits, which approximates what the FDIC
currently spends from the deposit insurance fund to cover the cost of
supervlsIOn.
Second, for a period after consolidation, the Fed will make payments to the
FBC reflecting what the Fed will save from transferring supervisory functions
to the FBC. These payments will be phased out over time.
Third, the FBC is also authorized to impose fees on the institutions it regulates.
The FBC will recover most of its remaining costs through asset-based
supervision fees. State banks will pay no FBC supervision fee on their first
$1 billion in assets, and any fee on assets of more than $1 billion will be at
no more than half the rate charged to comparable national banks. (See p.
12.)

Benefits of the Administration's
Regulatory Consolidation Proposal
The Administration proposes to create a new agency, the Federal Banking
Commission, to supervise the banking and thrift industries, consolidating
supervisory functions of the Office of the Comptroller of the Currency (OCC),
the Office of Thrift Supervision (OTS), the Federal Deposit Insurance
Corporation (FDIC), and the Board of Governors of the Federal Reserve System.
The Administration's proposal will:
Improve the effectiveness and efficiency of bank supervision by eliminating
inconsistencies and redundancies in the current system of supervision and
regulation and by eliminating time-consuming inter-agency rulemakings. Banks
will have one source to look to for answers. Rule changes could be
accomplished quickly. Depository institutions and their holding companies will
be regulated as integrated organizations, not as isolated pieces.
Benefit consumers, businesses, and the economy by enabling banks and
thrifts to redirect the resources now consumed trying to work through the
current regulatory maze toward more productive uses such as lower costs to
consumers and increased lending activity. Overlapping and inconsistent bank
regulation detracts from customer service, often ignores consumer needs, stifles
innovation, and is a drag on economic growth and opportunity.
Save money for the government and the banking industry by eliminating
redundant functions and improving the focus and consistency of regulation.
The Office of Management and Budget estimates that the government cost
savings that will result from agency consolidation will run from between $150
to $200 million per year, after initial transition costs. A 1992 Federal Financial
Institutions Examination Council study, headed by John LaWare, suggests
industry regulatory compliance costs amount to as much as 14 percent of noninterest expense per year. Using 1992 cost figures for banks and thrifts, this
methodology suggests that each five percent reduction of regulatory burden
achieved by regulatory consolidation would save the industry $1 billion
annually.
Increase accountability by clearly defining responsibilities and providing a
focal point for Administration, Congressional, industry, and public concerns
regarding regulatory policy. Not only will there be a clearly identified,
efficient decision-maker, but the decision-maker also will be clearly accountable
for its actions. Under the current system, all decisions must be laboriously
1

negotiated among the four regulators making quick, decisive action difficult, if
not impossible. And when something goes wrong, no one assumes
responsibility .
Increase consistency in enforcement and corrective actions.

No bank or thrift
will suffer, or benefit, from the differential application of enforcement
standards or closure policies of different agencies.
Eliminate potential tensions presented by the dual roles of the Fed and the
FDIC by moving supervisory responsibilities from the Federal Reserve and the
FDIC. The Federal Banking Commission will be responsible solely for
supervision and regulation and will not be distracted by the potentially
competing objectives of directing monetary policy or protecting the deposit
insurance fund. As we saw in the 1980's, banking problems develop slowly,
but once embedded in the banking system, cannot be rooted out without
substantial cost.
Fix a flawed regulatory system now before another crisis again reveals its
flaws. Changing the status quo, particularly an agency bureaucracy, raises
questions. The real risk, however, is continuing with a regulatory system that
is ill-designed to prevent future banking crises and ill-equipped to deal with
crises when they do occur.

The Administration's regulatory consolidation proposal preserves the vital roles of
the Federal Reserve Board, the Federal Deposit Insurance Corporation and the
dual banking system. The Administration's proposal will:
Preserve the independence of the Federal Reserve Board to conduct
monetary policy and help prevent and respond to systemic crises in the
financial sector. The Fed, as the Nation's central bank, will continue to
conduct monetary policy, administer the payments system and provide liquidity
through the discount window. Under the Administration's plan, the Fed will
retain full rulemaking and other authority necessary to carry out those
responsibilities. It will have an opportunity to participate significantly in
examinations of both large and small banking organizations. In fact, the
Administration's proposal will allow the Fed to better focus on its core
functions.
Preserve the role of the Federal Deposit Insurance Corporation as the
deposit insurer for all federally insured banks and savings associations. The
2

FDIC will also retain its "back-up" enforcement authority and its ability to limit
activities of state institutions that pose unacceptable risks to the insurance fund,
and will continue to be resp<?nsible for resolving banks and thrifts at the lowest
cost to the deposit insurance fund.

Preserve and enhance the dual banking system. States will continue to be
the primary regulators of banks that they charter. Current law allowing federal
regulators to rely on state examinations in alternate years will remain in place.
A system will be established for the FBC to certify state banking departments.
Examinations of small, adequately capitalized state banks conducted by certified
state agencies will not be repeated by the FBC. It is likely that almost 60
percent of all state banks will be examined only by state regulators. As under
current law, the FDIC will be the only federal agency with authority to restrict
the activities of state banks. The Administration's proposal will give both state
and federally chartered institutions the benefits of broader perspective and more
openness to diversity and innovation.

3

Questions and Answers on the Administration's Regulatory
Consolidation Proposal

Consolidation of the Four Federal Regulatory Agencies
Why is the Administration proposing regulatory consolidation?

•

Long-term economic benefit. Regulatory consolidation is one facet of
President Clinton's efforts to build a stable environment for long-term economic
growth. The Administration believes regulatory consolidation will help prevent
the credit crunches and savings and loan crises of the future.

•

Simplify the system. The current federal regulatory structure is needlessly
tangled, disjointed, and convoluted. Four different federal agencies regulate
FDIC-insured depository institutions. The Administration's plan would provide
much needed reform.

•

Save money for the Government and the banking industry. The Office of
Management and Budget estimates that the government cost savings that will
result from agency consolidation will run from between $150 to $200 million
per year, after initial transition costs. A 1992 Federal Financial Institutions
Examination Council study, headed by Federal Reserve Board Governor John
La Ware , suggests industry regulatory compliance costs were substantial,
exceeding 14 percent of non-interest expense per year. Using 1992 cost figures
for banks and thrifts, this methodology suggests that each five percent reduction
of regulatory burden achieved by regulatory consolidation would save the
industry $1 billion annually.

•

Increase accountability and consistency. A single regulator will enhance
accountability by providing a focal point for Administration, Congressional, and
public concerns regarding banking policy. Banking organizations will be
regulated as a whole; not as separate pieces. Moreover, a single agency will
facilitate decision-making and promote consistency in regulatory interpretation
and development.

•

Improve competitiveness of the industry. Dealing with one federal banking
regulator will drastically reduce the banking industry's regulatory burden.
Resources formerly used by banks to meet duplicative examination requirements
4

can be redirected to meet the needs of their customers. This regulatory
streamlining is necessary to allow banks to operate more efficiently and
compete more effectively against non-bank entities.

Why not just consolidate the DeC and the DTS?

•

Consolidating just the OCC and the OTS wouldn't meet most of the goals
above. Three different federal regulators would continue to supervise the
banking industry, with all of the attendant problems. Little efficiency would be
gained by combining only one bank regulator with the thrift regulator, whose
institutions are generally specialized in home mortgage lending.

This proposal isn'l new. Why should it be done now?
•

Unique opportunity to act. While the industry is stable and the nation's
economy is strong, there is a critical opportunity to fix the current flawed
regulatory system before another crisis again reveals that the system is illdesigned to prevent future banking crises and ill-equipped to deal with crises
when they do occur.

•

Stability of the industry. The bank and thrift industries are in better financial
condition than they have been for many years and can easily handle any
changes resulting from regulatory consolidation. Although some disruption
may initially occur, the proposal will, over the long run, strengthen the ability
of banks and thrifts to compete by increasing efficiencies and reducing
overlapping regulation and supervision.

•

Good government. The proposal is an important example of Vice President
Gore's efforts to make government work better.

•

Unprecedented support. We now have a rare opportunity to implement truly
historic and sensible restructuring since the Administration and leadership of
both the Senate and House Banking Committees are, for the first time, in
accord on the pivotal issues presented by regulatory consolidation.

5

Consolidation and the Banking Industry
What will the Administration's plan mean for the banking industry?

•

Reduced regulatory burden. The Administration's plan will reduce the
regulatory burden on banks and thrifts by reducing duplication and
inconsistency. Almost half of bank and thrift assets are held by companies
which are now regulated by three or four federal banking agencies. This often
results in duplicative regulation and conflicting advice.

•

Greater consistency. The Administration's proposal will bring consistent,
coordinated regulation to banks and bank holding companies. Banks will have
one set of rules and one place to look to for answers. Rule changes could be
accomplished quickly. Banks and their holding companies will be regulated as
integrated business units.

•

Lower costs. Dealing with regulatory overlap and inconsistency is expensive
and wasteful. In no other area of the federal responsibility do we have such a
high degree of duplication. There are almost five times as many staff working
on federal bank supervision than work for the SEC. Banks and thrifts largely
pay for their costs.

•

Greater accountability. The banking industry will have a single federal
agency charged with and accountable for ensuring the long-term vitality of the
banking industry. Too often, under the current system, too many regulators
means nobody is accountable. And any regulator who assumes accountability
has only limited ability to influence the overall structure and effectiveness of
the federal supervisory system. The Administration believes that the structural
flaws of the current regulatory system are perhaps the single most important
reason why federal banking law and regulation have failed to keep pace with
market developments.
The new Federal Banking Commission's will put supervision and regulation of
the banking industry first. It will have no distractions, no competing missions.

6

Consolidation and the Dual Banking System
Will the Administration's plan undennine or eliminate the dutd banking system?
•

The dual banking system will be preserved - and enhanced. Under the
Administration's plan, current law allowing state examinations to alternate with
federal exams will remain in place. In addition, state banking regulators in
certified states will be given enhanced authority over the institutions they
charter. The FBC will certify state banking departments that have
demonstrated the ability to conduct satisfactory examinations. It will rely on
examinations conducted by certified state agencies of state chartered banks that
have less than $250 million in assets and are well-capitalized.

•

As under current law, the FDIC will be the only federal agency that has

the authority to restrict the activities of state-chartered banks. Under the
Administration's proposal, the FBC would not homogenize the attributes of
federal and state institutions. Nothing in the Administration's legislation
authorizes the FBC to override state law to limit state bank powers.
•

The FBC would have no reason to discriminate against state-chartered
institutions. The Administration understands the concerns of those who fear
that a national charter might be the preferred charter under our consolidation
proposal. We believe, however, that a federal regulator responsible for h2th
state and federally-chartered institutions and for hmh banks and thrifts would
gain broader perspectives and would be less entrenched, and more open to
diversity and innovation, than one with more limited scope. Any effort to
disadvantage state-chartered institutions would be senseless since it would be
challenged by members of Congress and regulators from 50 states.

•

The FBC board and advisory councils will provide additional avenues for
the views of state banks to be beard. The Administration's legislation
proposes that one of the independent members of the FBC board must be
experienced in supervising state-chartered depository institutions. In addition,
the FBC will establish a Community Depository Institution Advisory Council,
with membership reflecting the fact that state-chartered institutions are a
majority of all depository institutions.

7

Will the Administration's proposal create a "monolithic" reguImor?
•

The result of the Administration's proposal will not be monolithic by any
stretch of the imagination.

•

The FDIC will remain integrally involved in banking. The FDIC will
continue to insure deposits at all federally insured banks and savings
associations. It will resolve failed or failing institutions. It will continue to
grant, suspend or terminate deposit insurance and to determine which activities
of state-chartered institutions present excessive risks to the federal deposit
insurance funds. It could conduct special examinations of insured institutions to
protect the deposit insurance fund. It could take "back-up" enforcement action
to stop risky practices at such institutions if the Federal Banking Commission
failed to do so. And it will help determine whether a critically undercapitalized
institution should remain open.

•

The Fed will remain integrally involved in banking. The Federal Reserve, as
the nation's central bank, will continue to conduct monetary policy, administer
the payment system, and provide liquidity through the discount window. Under
the Administration's plan, the Fed will retain full rulemaking and other
authority necessary to carry out those responsibilities. It will also have an
opportunity to participate significantly in examinations of both large and small
banking organizations. In fact, the Administration's proposal will allow the
Fed to better focus on its core functions. It will remain fully independent.

•

Both the FDIC and the Fed will have access to aU supervisory information
of the new Federal Banking Commission.

•

Fifty-one state banking commissioners will provide important checks and
balances on the federal regulator. States will continue as the primary
regulator of institutions they charter.

•

The structure of the FBC board and advisory committees will ensure that a
diversity of views are heard by the FBC. The FBC will have advisory
committees for community banks, thrifts, consumer issues, and small business.

•

The FBC will have a meaningful process for institutions to appeal
supervisory decisions without fear of retribution. The Administration's
legislation specifically provides for a disciplined internal review process for
material supervisory decisions by an agency official who was not involved in
and does not report to the official who made the decision being questioned.

8

•

And, of course, Congress and the courts will continue to oversee the entire
system.

Won't a single regulator replicate the failings of the Federal Home .Loan Bank
Board that led to the thrift crisis of the 1980s?
•

No, the Federal Banking Commission will Dot have the conflicting mandates
that afflicted the Bank Board. The Federal Home Loan Bank Board was
saddled with conflicting mandates: promoting the thrift industry, supervising
thrifts, and running the deposit insurance fund. Many blame the inherent
conflicts in these responsibilities for the problems witnessed in the savings and
loan crisis.

•

The Administration's plan will eliminate any potential conflicts by
reorganizing the banking agencies around their core functions. The FDIC
will focus on the protection of the deposit insurance fund. Similarly, the Fed
will focus on conducting monetary policy, managing the discount window, and
monitoring the payment system.

Consolidation and the Business Community
•

A system that meets the economy's needs. The Administration's plan will
create a modem, consistent, and responsible regulatory system. This is
essential to getting our economy back on track. Our economy can't afford the
system that brought us the S&L crisis, hundreds of bank failures and the credit
crunch. America's businesses need a stable banking environment that rewards
sound management and hard work.

•

A system that supports business. Even though bank failures are declining
rapidly, businesses are suffering from the fact that federal banking policy has
been adrift. Banking companies are consolidating, branches are closing, and
businessmen are finding their long-standing lending relationships suddenly cut
off. Small businesses are getting hit especially hard, since they depend heavily
on the banking sector for credit. America's business community is looking
ahead to an increasingly competitive marketplace. It needs a financial
regulatory system that can keep pace.

•

A system in which the concerns of small business have a voice. One of the
advisory committees of the FBC will be focused on small business. This will
9

give small businesses a direct forum to bring their needs and concerns to the
attention of the FBC.

•

Greater stability. The current regulatory system doesn't give business the
banking environment it needs. Over the last 10 years, the banking industry has
oscillated between periods when it would extend credit to anybody and periods
in which credit was virtually impossible to get. Inefficient, ineffective, and illadvised regulatory policies can be devastating to businesses.

•

Greater accountability. Under the current system, nobody in Washington is
fully accountable for failing to do what needs to be done. Four different
regulators share responsibility. And no one regulator can speak for or negotiate
for the others, so business interests have nobody to tum to -- only four
directions to tum in -- when they attempt to pursue a financial institutions
policy that supports the economy.

•

A system that makes sense. The Administration's proposal will keep things
simple: one deposit insurer; one central bank; one bank regulator. The whole
world will know who's responsible for getting things right, and who's
accountable when things go wrong.

Consolidation and Consumers
What will the Administration's plan mean for consumers?
•

A responsive regulator. The Administration's plan will provide a regulatory
system that can be truly responsive to consumer interests. Consumers need a
safe place to keep their money and a stable source of credit. The current
regulatory system has not responded adequately to consumer's concerns in this
area.
With occasional and generally minor exceptions, the federal banking agencies
have historically downplayed and frequently just ignored consumer protection
concerns. The agencies have failed to take a proactive stance on consumer
protection issues, forcing consumer interests to take their concerns to Congress.
Frequently, the results of this dynamic have been statutes that meet consumer
needs poorly while nonetheless saddling banks with excessive burdens.

10

•

•

A. regula~ry system consumers can understand. The Administration's plan
wIll provIde a system that consumers can understand and in which their
complai~ts will be addressed. In the complex system we have now, consumers
have no Idea how to complain or who to complain to when something goes
wrong. Nobody takes responsibility for protecting consumer interests. Nobody
is ~ccountable ~hen those interests go unprotected. Nobody can define,
articulate, and Implement a coherent, long-term view of the banking industry's
responsibilities to consumers.
A regulatory system in which consumers will have a voice. One of the
advisory committees that the FBC will establish will be for consumer issues.
This will provide consumers with a direct forum in which to raise their
concerns with the FBC.

Cost Savings of Consolidation
How much will be saved by regultJtory consolidation?
•

•

Significant government savings will result from agency consolidation. The
Administration anticipates significant long-term savings by eliminating
unnecessary duplication of managerial, policy, and administrative staff and
redundant supervision by mUltiple regulators, and by consolidating the
examinations of holding companies with individual institutions. The OCC,
OTS, FDIC and Federal Reserve collectively spend approximately $1.1 billion
annually and employ roughly 12,500 full-time staff to conduct the bank and
thrift supervision and regulation functions the FBC will carry out under the
Administration's proposal. The Administration estimates that the administrative
cost savings to the government from agency consolidation will run somewhere
between $150 to $200 million per year, after initial transition costs and even
apart from any fundamental changes in the examination process.
The banking industry should see significant savings from agency
consolidation. The Administration's proposal will reduce the amount banks
pay to comply with current excessive and redundant regulations and supervisory
practices. Specifically, banking companies will have one agency to deal with
for rules, regulations and examinations instead of the two, three, and even four
federal agencies they must deal with today. Firm estimates of these savings are
very hard to come by, but the Administration believes they will be substantial.
11

For example, a 1992 Federal Financial Institutions Examination Council study,
headed by Federal Reserve Board Governor John LaWare, stated indus~
regulatory compliance costs amounted to as much as 14 percent of non-Interest
expense per year. Using 1992 cost figures for banks and thrifts, this
methodology suggests that each 5 percent reduction of regulatory burden
achieved by regulatory consolidation would save the industry $1 billion
annually.

Funding the New Federal Banking Commission
How would the new Federal Banking Commission be funded?
•

The FBC will receive no appropriated funds. It will recover its operating
costs through a four-part financing structure that combines several components
to form an overall approach that is fair to institutions of all sizes and different
charter types.

•

The fIrSt component of the FBC's funding will be a fee, coUected by tbe
FDIC, that approximates what the FDIC currently spends from tbe Bank
Insurance Fund to cover the cost of supervision. The FDIC, when collecting
insurance premiums, will collect the on behalf of the FBC. The fee will
amount to 1 cent per $100 of domestic deposits. Deposit insurance premiums
will not increase.

•

Second, for a period after consolidation, the Fed will make payments to the
FBC in an amount equal to the Fed's savings from transferring supervisory
functions to the FBC. The payments will be at the full amount of the savings
for the first five years after consolidation, and will then be phased out over nine
years.

•

The FBC also is authorized to impose fees institutions or entities it
regulates. The FBC will recover most of its remaining costs through assetbased supervision fees. State banks will pay no FBC supervision fee on their
first $1 billion in assets, and any fee on assets of more than $1 billion will be at
no more than half the rate charged to comparable national banks. The fee
structure will also take into account the extent to which large institutions are,
per dollar of assets, cheaper to supervise than small institutions.

12

•

The Commission will also be authorized to collect processing fees from any
person, not just institutions and entities regulated by the Commission, in
connection with applications, filings, notices, requests, or similar submissions
made to the Commission. These fees will be designed to recover the
Commission's cost of processing such submissions.

Consolidation and the Federal Reserve System
How wiU the Administration's plan affect the Federal Reserve System?
•

The Administration's proposal will not affect the Fed's independence.

•

The Federal Reserve's core responsibilities and authority will remain intact.
It will continue to conduct monetary policy, administer the payment system,
and will provide liquidity through the discount window. In addition, it will have
authority to monitor the payment system.

•

The Fed will have a significant role in bank supervision. Under the
Administration's plan, the Fed could annually select for joint examinations up
to 10 of the top 20 banking organizations, with aggregate assets not exceeding
25 percent of total industry assets. The FBC and the Fed would then jointly
examine these organizations. The Fed's role would be meaningful. In each
joint exam, examiners from the Fed would participate in planning the scope and
timing of, and their role in, the examinations, subject to the overall direction
and management of the FBC's examiner-in-charge. Fed examiners could also
participate in any meetings between FBC examiners and the senior management
and board of directors of the organization being examined, when examination
findings are transmitted.
In addition, from the banking organizations that it selects from the top twenty
group for joint examinations with the FBC, the Fed could elect to take the ~
in examinations of banking organizations in the group (with aggregate assets not
exceeding 10 percent of total industry assets), that have a majority of their
assets in state member banks.
The Fed could also jointly examine a cross-section of smaller state member
banks, with up to 5 percent of total industry assets.

13

•

The Fed will also have back-up enforcement authority to correct actual or
potential safety and soundness problems at the 20 largest banking
organizations. In order to initiate back-up enforcement action against such an
organization, the Fed would recommend in writing to the FBC that the FBC
take enforcement action against the organization. The FBC could resolve the
matter by taking the recommended action or by providing the Fed with an
acceptable written plan for responding to the Fed's concerns. If the FBC did
neither, however, the Fed could then take the recommended enforcement action
itself, if a majority of the Fed board determined that the organization is, or is
in danger of becoming, in unsafe or unsound condition.

•

The Fed will have access to all information in the Federal Banking
Commission's possession about the overall state of the banking industry
and the condition of the largest banks.

•

The Fed would also have a seat on the FBC's five-member board.

Will the Administration's plan undermine the Fed's ability to respond to systemic
crises?
•

No. The Fed doesn't need to have a direct role in bank supervision to
handle systemic crises.

•

Banks no longer dominate the rmancial sector. Banks hold onIy
about a third of financial institution assets. And banks' share of financial
institution assets has been dropping for two generations. The Fed,
therefore, must focus on markets rather than banks.

•

Many of the recent crises in rmancial markets were not triggered by
banks. The Fed was able to handle the 1987 stock market crash, the
Penn Central Railroad bankruptcy and the Ohio thrift crisis of the early
'80s without a direct supervisory role in any of those industries.

•

Recent statutory changes enacted in FDICIA have further reduced
the likelihood banks will trigger a crisis. Regulators must now close a
bank before its capital is dissipated, and limit the ability of healthy banks
to lend to weak ones.

•

The Fed. uses discount window lending, not banking regulation, to
battle cnses. When people lose confidence in the markets or a key

14

participant, the Fed must provide liquidity quickly. Today, it supervises
only a small portion of the banks that come to the discount window, and
so the Fed relies on the opinions of the banks' primary regulators.
There is no reason why this cannot work for all banks. Under the
Administration's plan, the Fed will have full control over discount
window lending.

Will the Administration's plan undermine the Fed's ability to conduct monetary
poUcy?
•

No. The Fed doesn't need to be the primary bank regulator or supervisor
to conduct monetary policy, either.
•

Even under tbe current system, the Fed only supervises 15 percent of
combined bank and thrift assets. Only 12 of the 52 biggest banks with
assets of more than $10 billion are supervised by the Fed. As of the 3rd
quarter 1993, the avera&e size of all state member banks supervised by
the Fed was $730 million. Two-thirds of these banks were very small,
with less than $100 million in assets. Sound monetary policy clearly
does not depend on continued primary Fed oversight of these banks.

•

The Fed routinely relies on other agencies - such as the Departments
of Commerce and Labor - for information needed to conduct
monetary policy. The Administration's plan would simply extend this
to banking, as well. In fact, by virtue of its seat on the Federal Banking
Commission, which will supervise 100% of the banking and thrift
industries, the Fed will have better and more comprehensive access to
banking data than to other types of data -- better access to banking data,
in fact, than it enjoys today.

•

Many central banks in other countries don't supervise banks. The
United States is the only developed nation whose central bank is
insulated from executive control and has a major direct role in
supervision. The central banks in Germany, Japan, Belgium, Canada,
Sweden, and Switzerland have no, or only limited, direct involvement in
bank supervision. In the European Community, central banks rely upon
information from bank supervisors in 11 different countries.

15

•

The objectives of supervision and monetary policy are often at odds.
Banks and the businesses they deal with need consistent direction and
advice.

Administration's Proposal vs. Federal Reserve Board's Proposal
What's the difference between the Administration's plan and the Federal Reserve
Board's plan?

•

Both the Administration and the Federal Reserve agree that the current
federal bank regulatory system needs revamping. We differ, however, on
how to accomplish that, and whether to fix it once and for all or to approach
the problem in a piecemeal fashion.

•

The Administration's proposal would reorganize the federal banking
agencies around three core functions: (1) deposit insurance; (2) central
banking, and (3) supervision and regulation. The FDIC would continue to
insure deposits at banks and thrifts. The Fed would continue to conduct
monetary policy, administer the payment system and respond to systemic crises
in the financial sector. All of the current supervisory functions of the Office of
the Comptroller of the Currency, the Office of Thrift Supervision, the Federal
Deposit Insurance Corporation and the Federal Reserve Board would be
combined in a new independent agency in the Executive branch, the Federal
Banking Commission.

•

The Fed's plan would reorganize bank supervision around no clear lines.
Under the Fed's plan, the Fed would supervise all state-chartered member
banks, state-chartered non-member banks, all depository institutions (including
national banks and thrifts) in bank holding companies with a lead state bank,
and bank holding companies and their non-bank subsidiaries big enough to pose
any threat of systemic risk. The OCC and the OTS would be merged into one
agency responsible for supervising national banks, federally-chartered thrifts,
and all banks in bank holding companies with a lead national bank. The FDIC
would continue to insure deposits at banks and thrifts.

•

The Fed's proposal is complex, inefficient, and does little to increase
accountability. It would result in increasing amounts of overlap and
duplication because both the Fed and the new agency would supervise and
therefore have to become expert in all facets of the industry -- thrifts, national

16

banks, state banks, bank-holding companies, non-bank subsidiaries, etc. The
plan would perpetuate the need for time-consuming interagency negotiations
between multiple regulators that make flexible and responsive policies difficult
to achieve.
'
•

The Fed's proposal would greatly expand the Fed's jurisdiction - from
supervising only 15 percent of combined bank and thrift assets to over 37
percent of assets even though bank supervision would continue to be a
secondary matter for the Fed. The Fed's proposal would continue a system
in which institutions can switch their federal regulator in an attempt to avoid
compliance with regulations or laws regarding safety and soundness, fair
lending or the basis of who is most lax.

Consolidation and Politicization
WiU the Administration's plan politicize bank supervision?
•

Absolutely not. The new Federal Banking Commission will be governed by a
five-member board consisting of a Chairman appointed by the President and
confirmed by the Senate; the Secretary of the Treasury or his designee; a
member of the Federal Reserve Board; two other appointed members appointed
by the President and confirmed by the Senate to staggered terms. Members of
both major political parties will be represented on the Commission.

•

Currently, bank supervision is conducted by the OCC, the OTS, the FDIC, and
the Federal Reserve Board. Members of the FDIC board, the Federal Reserve
Board, and the heads of the OCC and the OTS are aU selected by the President.

•

The new FBC would in no way expand the number of politically appointed
supervisors. Under the current system, both the OCC and the OTS -- which
between them supervise 62 percent of all insured depository institution assets -are bureaus of the Treasury Department. The Comptroller of the Currency and
the Director of the OTS can be removed without cause. The new FBC will be
independent of the Treasury, and its appointed members could be removed only
for cause. The Treasury would give up supervisory authority over the banking
system.

•

Compare the structure of the proposed FBC board to that of the current FDIC
board: the difference is that the FBC board would have one less Treasury

17

representative, and, in place of the second Treasury seat, would include instead
a representative of the Federal Reserve Board.

18

DEPARTMENT OF THE TREASURY
WASHINGTON

1994 PRIORITIES FOR
TAX REGULATIONS AND OTHER ADMINISTRATIVE GUIDANCE

The Honorable Leslie B. Samuels
Assistant Secretary (Tax Policy)
U.S. Department of the Treasury

The Honorable Margaret M. Richardson
Commissioner
Internal Revenue Service

The Treasury Office of Tax Policy and the Internal Revenue Service are aware
that there are many areas in which taxpayers seek guidance about the Internal
Revenue Code. In allocating our resources and developing a list of priorities, we have
carefully considered the needs of taxpayers as expressed in correspondence and
other comments we have received.
The 1994 Guidance Priorities which we are releasing today is a listing of
specifically identified areas in which regulations and other administrative guidance
realistically can be completed by year-end. It should not be viewed as an exclusive list
of the guidance that may be published in 1994. Other areas currently under study
may ultimately result in published guidance, depending on the availability of staff
resources. Moreover, the Internal Revenue Service and the Office of Tax Policy intend
to respond to developments and needs that may arise throughout the year.
In approaching any regulation, ruling or other guidance, we will endeavor to
provide clear and relatively simple rules that do not attempt to address every
conceivable situation. We believe that this approach most effectively achieves our goal
of providing helpful guidance to taxpayers without burdening them with undue
complexity. In so doing, it should also promote greater compliance by taxpayers.
We also know that the success of our published guidance can only be fully
realized if we have the benefit of the insight, experience and cooperation of the
taxpayers who apply the rules in the ordinary course of their business dealings.
Consequently, we reaffirm our invitation to the public to provide us with comments and
suggestions as we write tax guidance.
Additional copies of the 1994 Guidance Priorities can be obtained by calling
Treasury's Office of Public Affairs (202) 622-2960 or IRS Public Affairs (202) 622-4040.

February 1994

DEPARTMENT OF THE TREASURY
WASHINGTON. D.C. 20220

OFFICE OF TAX POLICY
and
INTERNAL REVENUE SERVICE

1994 GUIDANCE PRIORITIES

Alternative Minimum Tax

1.

Proposed regulations under section 55 on the computation of
adjusted gross income for AMT purposes.

Bankruptcy, Workout, and Related Issues

A.

Section 108
1.

8.

c.

Final regulations under section 108(e)(8) on when stock issued in
exchange for debt satisfies the nominal-or-token and the ratio
tests.

Section 382
1.

Final regulations under section 382(b)(3) on allocating income to
pre- and post -change periods based on a closing of the books.

2.

Final regulations on what indebtedness qualifies under section
382(1 )(5)(E) when stock is transferred to creditors.

3.

Final regulations under section 382(1 )(6) on applying section 382
in certain insolvency transactions.

4.

Final regulations revising the option attribution rules under section
382.

Other
1.

Final regulations under section 1398 relating to the use of passive
activity loss carryovers by bankruptcy estates of individuals.

Consolidated Returns
1.

Proposed regulations revising the rules for intercompany
transactions and distributions in consolidated groups.

2.

Final regulations revising the investment adjustment rules for
consolidated groups.

Corporations and Their Shareholders
1.

Proposed regulations under section 305(c) relating to the
treatment of callable preferred stock.

2.

Final regulations under section 338, including the consistency
rules.

3.

Proposed regulations on the basis of stock in triangular
reorganizations.

4.

Guidance under section 1202 relating to the 50% exclusion for
gain from certain small business stock.

5.

Revenue ruling regarding Yoc Heating following a qualified
purchase of target stock.

Employee Benefits
A.

Employee Benefits and Executive Compensation
1.

Additional guidance on the disallowance under section 162(m) of
deductions for executive compensation exceeding one million
dollars.

2.

Final regulations under section 401 (a)(17) regarding the $150,000
limit on compensation taken into account for qualified plans.

3.

Amendments to regulations under section 401 (k) and (m) to reflect
publication of final nondiscrimination regulations under section
401 (a)(4) and related provisions.

4.

Proposed guidance relating to cash balance plans.

-2-

B.

5.

Final regulations under section 404A relating to deductions for
certain foreign deferred compensation plans.

6.

Revenue ruling addressing issues relating to transfers of qualified
plan benefits from money purchase to profit-sharing plans.

7.

Update of procedures governing applications for pension plan
benefit waivers under section 412(c)(8).

8.

Update of procedures governing applications for pension plan
funding waivers under section 412.

9.

Revenue ruling on insurance contract plans under section 412(i).

10.

Final regulations under section 414(r) regarding separate line of
business requirements for qualified plans.

11.

Notice requesting public comments on joint and survivor annuity
spousal consent rules.

Employment Taxes and Wage Reporting
1.

Guidance on electronic filing issues relating to W-4 withholding
forms submitted to employers.

2.

Proposed regulations under section 83 relating to withholding on
transfers of property as compensation for services.

3.

Proposed regulations under section 3121 (v) addressing the
application of employment taxes to nonqualified deferred
compensation.

4.

Final regulations providing guidance and a safe harbor regarding
the determination of work hours subject to the section 3221
railroad retirement supplemental annuity tax.

5.

Final regulations updating regulatory provisions under section
3231 relating to the Railroad Retirement Tax Act.

6.

Guidance with respect to the application of FICA tax to employee
tips.

-3-

7.

Proposed regulations on W-2 reporting obligations of employers
that cease operations.

Excise Taxes
1.

Final regulations under section 4081 on the imposition of the
diesel fuel tax.

2.

Proposed regulations under section 4081 on conforming
amendments to the gasoline tax regulations to reflect the OBRA
'93 changes to the diesel fuel tax.

3.

Final regulations under section 4221 on the treatment of exported
vaccines for purposes of the vaccine excise tax.

Exempt Organizations

1.

Final regulations under section 514(c)(9)(E) (the "fractions rule")
on real estate investments held by qualified tax-exempt entities
through partnerships.

2.

Guidance under section 514 on the treatment of short sales.

3.

Proposed regulations under section 4955 on the political
expenditures of exempt organizations and related sanctions.

Financial Institutions

1.

Guidance under section 475 and related provisions on mark-tomarket accounting for securities dealers.

2.

Final regulations under section 597 on the treatment of federal
financial assistance paid to insolvent financial institutions.

3.

Guidance on the interaction of sections 706 and 4982 with respect
to master fund - feeder fund arrangements of regulated investment
companies.

4.

Final regulations on the application of section 7507 to financial
institutions that receive federal financial assistance.

-4-

5.

Guidance on whether a regulated investment company may
deduct section 12b-1 fees as trade or business expenses when
computing its investment company taxable income.

6.

Modification of Rev. Rul. 53-216 and Rev. Ru!. 64-278 with respect
to lenders' accounting for points income on the loan liquidation
method and the composite method.

Financial Products

1.

Final regulations under section 246(c) on certain issues relating to
the dividends received deduction.

2.

Final regulations regarding the timing and character of hedging
transactions.

3.

Proposed reg ulations under section 1258 on selected conversion
transaction issues.

4.

Final regulations on original issue discount under section 1271 et
seq.

5.

Proposed regulations under section 1275 on debt instruments with
contingent payments.

General Tax Issues

1.

Proposed regulations and other guidance relating to the
disallowance of lobbying expenses under section 162(e).

2.

Temporary regulations under section 170 relating to the
substantiation requirements for certain charitable contributions,
including those made by payroll deduction.

3.

Temporary regulations on the election to apply section 197 to
intangibles acquired after July 25, 1991.

4.

Proposed regulations relating to the section 274 disallowance of
deductions for club dues and spousal travel expenses.

-5-

5.

Final regulations under section 1254 setting forth rules for
determining gain from the disposition of interests in oil, gas,
geothermal, or other mineral properties.

Gifts. Estates, and Trusts
1.

Proposed regulations amending section 1.671-4 relating to the
reporting requirements of grantor trusts.

2.

Final regulations under sections 2056 and 2523 relating to the
marital deduction and the qualified terminable interest property
election.

3.

Final regulations under chapter 13 on the generation skipping
transfer tax.

4.

Final regulations under section 7520 regarding the valuation of
annuities, life or term interests, and remainder interests.

Insurance Companies and Products

1.

Proposed regulations relating to section 338(h)(10) and insurance
companies.

2.

Final regulations under section 809 clarifying the composition of
the equity base.

3.

Revenue ruling regarding the application of section 351 upon a
transfer of an insurance business to a subsidiary.

4.

Revenue ruling under section 807(f) on reserve strengthening and
weakening.

International Issues
A.

Foreign Tax Credit
1.

Proposed regulations under section 902, including guidance for
the "pooling" method added by the Tax Reform Act of 1986.

-6 -

B.

C.

D.

2.

Final regulations under sections 905 (c) and 6689 on notification
requirements, necessary adjustments, and the civil penalty relating
to foreign tax redeterminations.

3.

Proposed regulations under section 904(i) limiting the use of
deconsolidations of corporations to avoid foreign tax credit
limitations.

Subpart FjDeferral
1.

Final regulations under section 954 regarding the definition of a
controlled foreign corporation, foreign base company income, and
foreign personal holding company income.

2.

Guidance under section 1296 concerning the characterization of
income received by a foreign bank or securities dealer not
licensed to do business as a bank or securities dealer in the
United States.

Inbound Transactions
1.

Proposed revisions to regulations under section 1441 regarding
withholding rules on fixed and determinable annual or periodical
income.

2.

Guidance on whether a nonresident alien student or trainee needs
to obtain a certificate of compliance with income tax laws under
section 6851.

Outbound Transactions
1.

Regulations under section 338 relating to international consistency
rules.

2.

Final regulations under section 367(e) involving certain corporate
distributions to foreign corporations.

3.

Regulations under section 936 concerning the computation of
combined taxable income.

4.

Guidance on changing elections under section 936 as a result of
OBRA '93 changes to section 936.

-7-

5.

E.

F.

Sourcing and Expense Allocation
1.

Final regulations under section 864(e) on the allocation of interest
expense.

2.

Proposed regulations under section 864(e) relating to interest
equivalents, hedging, and integrated financial transactions.

3.

Proposed regulations under section 865 providing guidance on the
source of gain and loss on the disposition of personal property.

Treaty
1.

G.

Final regulations under section 6038 to modify the information
required on Form 5471.

Guidance under section 894 concerning agency and permanent
establishments.

Other
1.

Revision of the section 482 cost-sharing regulations to incorporate
the "commensurate with income" standard.

2.

Guidance under section 482 on a safe harbor for small taxpayers.

3.

Regulations under section 482 on intercompany transfer pricing
methods.

4.

Final regulations under section 985 implementing the dollar
approximate separate transactions method (DASTM) for qualified
business units operating in a hyperinflationary environment.

5.

Proposed regulations under section 6503(k) concerning
designated summonses.

6.

Proposed regulations under section 6662(e) on substantial or
gross valuation misstatement penalties relating to section 482
adjustments.

7.

Proposed regulations under section 7701 (I) relating to conduit
arrangements in multiple-party financing transactions.

-8-

Partnerships
1.

Final regulations under section 704(C) on the remedial allocation
method and securities aggregation.

2.

Proposed regulations under section 737 on the recognition of
precontribution gain in certain partnership distributions.

3.

Guidance on the definition of liability under section 752 in the
context of securities transactions.

4.

Final regulations under section 761 dealing with election out
procedures for natural gas partnerships subject to a gas balancing
agreement.

5.

Revenue ruling on a partnership paydown of nonrecourse debt
under section 752.

Passive Activity Losses

1.

Final regulations under section 469 on the definition of an activity.

2.

Proposed regulations providing guidance under section 469(c)(7)
on rules for taxpayers in real property businesses.

Subchapter S
1.

Final regulations under section 1363 (d) on the merger of a C
corporation into an S corporation.

2.

Final regulations under section 1374 on the built-in gain or loss
rules.

3.

Revenue procedure providing automatic inadvertent termination
relief under section 1362(f) to an S corporation when the income
beneficiary fails to elect timely to be a qualified subchapter S trust.

Tax Accounting
1.

Final regulations under section 168(i)(4) on the use of general

-9 -

asset accounts.
2.

Final regulations under section 174 on research and experimental
expenditures.

3.

Proposed regulations concerning the section 179A deduction for
qualified clean fuel vehicles and qualified clean fuel vehicle
refueling property and the section 30 credit for qualified electric
vehicles.

4.

Final regulations relating to treatment of distribution costs under
section 263A.

5.

Final regulations under section 263A(f) relating to the requirement
to capitalize interest with respect to certain property produced by
a taxpayer.

6.

Final regulations concerning when a modification of a debt
instrument is an exchange under section 1001.

7.

Final regulations under sections 1031 and 453 coordinating the
deferred like-kind exchange provisions with the installment sale
provisions.

8.

Additional guidance on Indopco.

9.

Guidance on the treatment of environmental clean-up
expenditures.

10.

Revenue procedure relating to accounting method changes
necessary to comply with the section 263A final regulations.

11.

Revenue procedure under section 461 (g) on the purchaser's
treatment of points paid by the seller in connection with the
purchase of a principal residence.

12.

Revenue procedure providing guidance under section 1016 on
adjusting basis for property for which the taxpayer claimed no
depreciation or the incorrect amount of depreciation.

- 10 -

Tax Administration
1.

Temporary regulations and a revenue procedure relating to the
establishment of a TIN matching program to allow a payor to
check whether a name/TIN combination provided by a payee
matches a name/TIN combination on file with the Service.

2.

Proposed regulations under section 3505 dealing with the
maximum liability of third parties paying or providing for wages.

3.

Temporary regulations under section 6103(1)(14) on the use of tax
return information by the U.S. Customs Service.

4.

Final regulations under section 60S0H on reporting for mortgage
interest.

5.

Final regulations under section 6159 dealing with the payment of
past due taxes in installments.

6.

Proposed regulations under section 6311 dealing with the payment
of taxes by check or money order.

7.

Temporary regulations relating to the electronic payment of tax.

8.

Proposed regulations under section 6323 dealing with the proper
place for filing a notice of a lien for certain personal property.

9.

Final regulations under section 6331 dealing with circumstances
under which the IRS is prohibited from making a levy because it is
uneconomical.

10.

Final regulations under section 6334 dealing with property that is
exempt from levy.

11.

Final regulations under section 6343 dealing with the release of a
levy and the return of property levied upon.

12.

Final regulations under section 6695(b) to permit the use of
facsimile signatures by preparers of Form 1042.

13.

Proposed regulations under section 6867 dealing with the
presumption of jeopardy in cases of "illegal activity" cash.

- 11 -

14.

Proposed regulations under section 7425 dealing with the
treatment of excess expenses incurred in connection with a
redemption of real property.

15.

Final regulations under section 7426 dealing with wrongful levy
actions where levies are served on other government agencies.

16.

Final regulations under section 7430 on the exhaustion of
administrative remedies.

17.

Final regulations under section 7430 on the awarding of
reasonable administrative costs incurred in connection with a
proceeding before the IRS.

18.

Proposed regulations under section 7514 providing for the use of
an alternate seal of office by IRS offices.

19.

Proposed regulations under section 7609 dealing with the
extension of statutes of limitations in John Doe summons disputes.

20.

Revenue procedure on how to apply the resolution of issues
under exam to other returns of CEP taxpayers that have not yet
been examined.

21.

Finalize revisions to Circular 230.

1.

Final regulations under section 42 on carryover allocations and
other rules concerning the low-income housing credit.

2.

Final regulations under section 42 on the order in which housing
credit dollar amounts are allocated from a state's housing credit
ceiling under section 42(h) (3) and the determination of which
states qualify to receive credit from a national pool of credit under
section 42(h)(3)(O).

3.

Revenue procedure under section 42 on how a taxpayer whose
building received an allocation of low-income housing credits
before 1990 elects to satisfy the 200-percent rent restriction for its
deep-rent skewed project.

Tax Credits

- 12 -

4.

Revenue procedure under section 42 on how a taxpayer whose
building received an allocation of low-income housing credits
before 1990 elects to determine rent under the number-ofbedrooms method.

5.

Revenue ruling under section 45 clarifying what constitutes a
qualified facility for electricity produced from certain renewable
resources.

Tax-exempt Bonds
1.

Proposed regulations under section 141 to define and clarify the
private business use test, the private security or payment test, and
the private loan financing test.

2.

Technical corrections with respect to final arbitrage regulations.

February 1994

- 13 -

lREASURY
1500 PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C.. 20220· (202) 622-2960

March

1, 1994

MARY ELLEN WITHROW
TREASURER OF THE UNITED STATES
Mary Ellen Withrow was confirmed unanimously by the Senate to be the 40th
Treasurer of the United States on February 10, and sworn into office March 1, 1994.
She is the first person to have held the post of treasurer at all three levels of
government -- local, state and national. She was elected Treasurer of her native Marion
County, Ohio, in 1976 and 1980. She was elected as Ohio State treasurer in 1982 and reelected in 1986 and 1990.
As Treasurer of the United States, Withrow is responsible for the operations of both
the U.S. Mint and the Bureau of Engraving and Printing.
During her tenure as Ohio's Treasurer, Withrow's innovative programs, management
efficiencies and record earnings for Ohio eamed her nationwide recognition. In March 1992
she received the Donald L. Scantlebury Memorial Award from the Treasury's Joint Financial
Management Improvement Program for financial excellence and improvement in government.
She was named the nation's Most Valuable State Public Official by City & State Newspaper
in 1990.
She is past president of the National Association of State Treasurers, and past president
of the National Association of State Auditors, Comptrollers and Treasurers. She also is a
member of the Anthony Commission on Public Finance, a panel addressing state and local
government fmancing.
Withrow, who began her career in public service in 1969 as the first woman elected to
the Elgin Local School Board in Marion County, is a member of the board of directors of
Women Executives in State Government, an inductee into the Ohio Women's Hall of Fame
and a recipient of a Women Executives in State Government fellowship to Harvard
University .
Withrow was born Oct. 2, 1930, in Marion County, Ohio. She and her husband,
Norman, have four daughters and four grandchildren.
-30LB-676

DEPARTMENT

lREASURY

OF

~J7R<'J

THE

TREASURY

NEWS

•••

lSO() PENNSYLVANIA AVENUE, N.W.· WASHINGTON, D.C.· 20220· (202) 622-2960

FOR IMMEDIATE RELEASE
March 1, 1994

WITHROW TAKES OATH AS 40TH TREASURER OF THE UNITED STATES
Mary Ellen Withrow of Marion, Ohio, was sworn in Tuesday as the 40th Treasurer of
the United States. Vice President Al Gore administered the oath of office to Withrow in the
Treasury Department's historic Cash Room.

Treasury Secretary Lloyd Bentsen praised Withrow, saying, "Mary Ellen Withrow has
fust-rate qualifications for this important position. Her background in financial management
and administration is well-respected."
Withrow, 63, served as Ohio's treasurer from 1983 until taking office as the nation's
treasurer. Prior to that, she served as Marion County (Ohio) treasurer, and she is the first
person in the nation's history to hold that position at each level of government -- local, state
and national.
As treasurer, Withrow will oversee the operations of the U.S. Mint, which
manufactures coins and medals, and the Bureau of Engraving and Printing, which prints paper
money and postage and revenue stamps.
Because U.S. currency is countersigned by the Secretary of the Treasury and by the
Treasurer, newly printed notes will soon carry Bentsen's signature for the first time since he
took office. In the absence of a treasurer, the Bureau of Engraving and Printing was required
to continue printing notes with the signatures of Bentsen's and Withrow's predecessors. The
new notes are expected to enter circulation later in the month.
Withrow, a recipient of an award for excellence in fmancial management from the
Treasury Department's Joint Financial Management Improvement Program, earned Ohio more
than $2 billion in investment income during her tenure. She created a variety of plans to
improve Ohio's economy and strengthen the state's business climate. She also initiated a
technical assistance program for the government of Poland, and led a delegation offering
technical help to officials of three cities in the former Soviet Union.
Withrow and her husband, Norman, have four daughters and four grandchildren.
-30LB-677

DEPARTMENT

OF

THE

TREASURY

_ _•••./17X'l

1500 PEN;\jSYLVANIA AVENUE, N.W.· WASHINGTON, D.C.· 20220· (202) 622-2960

FOR RELEASE AT 2:30 P.M.
March 1, 1994

CONTACT:

Office of Financing
202/219-3350

TREASURY'S WEEKLY BILL OFFERING
The Treasury will auction two series of Treasury bills
totaling approximately $25,200 million, to be issued March 10,
1994.
This offering will provide about $225 million of new cash
for the Treasury, as the maturing 13-week and 26-week bills are
outstanding in the amount of $24,979 million.
In addition to the
maturing I3-week and 26-week bills, there are $14,829 million of
maturing 52-week bills.
The disposition of this latter amount
was announced last week.
Federal Reserve Banks hold $9,688 million of bills for their
own accounts in the three maturing issues. These may be refunded
at the weighted average discount rate of accepted competitive
tenders.
Federal Reserve Banks hold $3,391 million of the three
maturing issues as agents for foreign and international monetary
authorities.
These may be refunded within the offering amount
at the weighted average discount rate of accepted competitive
tenders.
Additional amounts may be issued for such accounts if
the aggregate amount of new bids exceeds the aggregate amount
of maturing bills.
For purposes of determining such additional
amounts, foreign a~j international monetary authorities are
considered to hold $2,406 million of the original 13-week and
26-weeJ< ~ssues.
Tenders for the bills will be received at Federal
Reserve Banks and Branches and at the Bureau of the Public
Debt, Washington, D. C.
This offering of Treasury securities
is governed by the terms and conditions set forth in the Uniform
Offering Circular (31 CFR Part 356, published as a final rule on
January 5, 1993, and effective March 1, 1993) for the sale and
issue by the Treasury to the public of marketable Treasury bills,
notes, and bonds.
Details about each of the new securities are given in the
attached offering highlights.
000

Attachment

LB-678

HIGHLIGHTS OF TREASURY OFFERINGS OF WEEKLY BILLS
TO BE ISSUED MARCH 10, 1994

March 1, 1994
Offering Amount . . . . .
Description of Offering:
Term and type of security
CUSIP number
. .
Auction date
. .
Issue date
. . .
Maturity date .
Original issue date
Currently outstanding
Minimum bid amount
Multiples . . . . . . . .

.
.
. .

.

$12,600 million

$12,600 million

91-day bill
912794 K 94
March 7, 1994
March 10, 1994
June 9, 1994
December 9, 1993
$13,496 million
$10,000
$ 1,000

lS2-day bill
912794 N2 6
March 7, 1994
March 10, 1994
September S, 1994
March 10, 1994
$10,000
$ 1,000

The following rules apply to all securities mentioned above:
Submission of Bids:
Noncompetitive bids

Accepted in full up to $1,000,000 at the average
discount rate of accepted competitive bids.
(1) Must be expressed as a discount rate with
two decimals, e.g., 7.10%.
(2) Net long position for each bidder must be
reported when the sum of the total bid
amount, at all discount rates, and the net
long position is $2 billion or greater.
(3) Net long position must be determined as of
one half-hour prior to the closing time for
receipt of competitive tenders.

Competitive bids

Maximum Recognized Bid
at a Single Yield

35% of public offering

Maximum Award . . . . .

35% of public offering

Receipt of Tenders:
Noncompetitive tenders

Prior to 12:00 noon Eastern standard time
on auction day
Prior to 1:00 p.m. Eastern standard time
on auction day

Competitive tenders
Payment Terms .

. . . . . .

.

.

. .

Full payment with tender or by charge to a funds
account at a Federal Reserve Bank on issue date

Removal Notice
The item identified below has been removed in accordance with FRASER's policy on handling
sensitive information in digitization projects due to copyright protections.

Citation Information
Document Type: Transcript

Number of Pages Removed: 15

Author(s):
Title:

Date:

Lloyd Bentsen, Secretary of the U.S. Department of Treasury, Press Conference, Frankfurt,
Germany

1994-02-26

Journal:

Volume:
Page(s):
URL:

Federal Reserve Bank of St. Louis

https://fraser.stlouisfed.org