Ask the Scholar
Document scope · 1 page
Scholar
Ask about this object, its catalog metadata, its source description, or the page inventory.
For page-specific OCR and visual context, open one of the page chats.
Scholar Source Context
Document identity
localId
323153192
label
State of the Union 1/29/91 [OA 8321]
core
doc
dtoType
document
citationUrl
pageCount
1
Source metadata
id
323153192
contentType
document
title
State of the Union 1/29/91 [OA 8321]
citationUrl
identifierLocal
13744-014
collections
Records of the White House Office of Speechwriting (George H. W. Bush Administration)
Speech Backup Chronological Files
imageCount
1
hasImages
yes
source
import
hasTranscription
no
Source extras
naId
323153192
levelOfDescription
fileUnit
recordType
description
ocrSource
nara-archive
Single page context
seq
1
pageIndex
0
type
document
mediaId
d0c284f625ad5c5a
ocrText
Originally Processed With FOIA(s):
FOIA Number:
S
S
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the George Bush Presidential
Library Staff.
Record Group/Collection:
George H.W. Bush Presidential Records
Collection/Office of Origin:
Speechwriting, White House Office of
Series:
Speech File Backup Files
Subseries:
Chron File, 1989-1993
OA/ID Number:
13744
Folder ID Number:
13744-014
Folder Title:
State of the Union 1/29/91 [OA 8321]
Stack:
Row:
Section:
Shelf:
Position:
G
26
21
2
4
/
F4
WHRC
The Wit
and Wisdom
of the
Presidents
By
Vic Fredericks Fell, Frederick Victor
Frederick Fell, Inc.
New York
States, too.. Just think of such a
was another who was not exactly
ospect of becoming head man. When
Both Houses, Upstairs
that he might be the next President
said:
and Down
to go on the Supreme Bench for
presidency, and that in twenty years
make myself more useful to the
even if my election should come
Congressmen, the lawmakers, solons, senators, representa-
tives, whatever you want to call them (and some Presidents
had their own pet appellations), have been, at various times
throughout our history, sources of aid and comfort, and
irritation and annoyance to the Presidents.
The select group of lawmakers sent to Washington from
all parts of the country is a tightly-knit club, despite surface
outbursts and occasional friction. It is a brotherhood, and
carthis
be revised
very often members will jump party lines and band together for a joke
to oppose a President's wish.
There's a story they tell about Grover Cleveland who had
been having trouble with a batch of senators. His wife woke
up in the middle of the night and nudged him awake.
"I think there are burglars in the house," she whispered.
"No, not in the house, the Senate, my dear, they're in the
Senate," he said, turning over and going back to sleep.
At one time Abraham Lincoln took great abuse for being
too tolerant with his underlings. He was subjected to con-
stant abuse for not firing General Grant as his number one
soldier during the Civil War.
29
BOTH HOUSES, UPSTAIRS AND DOWN
BOTH HOUSES, UPSTAIRS AND DOWN
Senator Wade of Ohio was particuarly adamant that Lin-
There is another story. concerning Calvin. He liked to ride
coln should dismiss the General.
horseback as a means of getting exercise. He and Mrs.
"You," he said, pointing a finger, "are only a mile from
Coolidge used to go for their regular jogs through the park.
hell."
On this one occasion, Mrs. Coolidge noticed a man on a
Said Lincoln with a smile, "About the distance from here
horse coming toward them.
to the Capitol, right?"
"That's Senator Borah," she said, referring to a well-
known solon who was known for his obstreperousness.
There
Joke!
t must
"Can't be," said Cal, "the horse and the rider are both
contend
from
ion he
going in the same direction."
desires.
"When cl. set back A Sandi Arabia
reof is
credited
people as ked me if cl was
with
Peac
t always
Thomas
nervous being so mean to
rather
be adm
is cam-
than bic
such hostile + potentially
S way:
paign,
Joke w/ cars +
"You
dangrous forces. I replied
D cool.
Aki
Gingrich
: Demo-
The bic
Counthing along the lines of)
nating
crats W
inderful
in one H
Congian aint 80 band
se will
arrange
-talk about
nocratic
serve as
and the
more
equitabl
isn't it
conservative consent ative
ens and
saucer
in our S
A saucer also figures in this story involving a neshman
gress, t
we din,
vision & how
In at
in are the all same ridi in
to Con-
congressman from the Far West who was invited to have
"Tex
fits Partnetapher
men to
dinner in the White House with Calvin Coolidge. He had
Congre
a good
never been there before and was quite nervous. He was
average."
unsure of himself and decided to do everything that his
host did.
One of the best comments made on President Kennedy's
Part way through the meal, the freshman noticed that
much publicized rocking chair came from Senator Everett
Coolidge took his cup of tea and poured some into his saucer.
Dirksen, who said, "It gives you a sense of motion, without
The tyro representative did the same. With some alarm, he
a sense of danger."
noted that Calvin poured some cream into the same saucer.
Not knowing why, the novice followed suit. Then, looking
One of President Kennedy's closest friends in Congress:
on with mounting mortification, he watched as Calvin put
was Senator George A. Smathers of Florida. At a dinner
the saucer down on the floor for his pet cat.
honoring Smathers, Kennedy needled him this way:
30
31
D DOWN
BOTH HOUSES, UPSTAIRS AND DOWN
been one of my most valuable
was taken up on a mountain top by a devil who offered him
ents. In 1942 when I was thinking
all the land if he would adore him. It so happened that the
States Senate, I went to Senator
devil who was offering all that property didn't own one inch
re, what do you think?' He said,
of it. And neither do you."
ed to win.
bout running for Vice-President,
Another story involved Cannon's handwriting, which was
he thought. 'It's up to you,' he
quite difficult to read. At one time it was so illegible that
960 I was considering running in
a fellow congressman told him, "Joe, you're getting worse
nd George warned me against it
than ever. I showed that last letter you sent to about fifty
carry it.
guys and we finally managed to figure out everything but
e I really got nervous about the
the last four words at the bottom of the page."
ominated for President was just
Cannon snatched his letter back, looked at it and shouted,
George came up and told me, 'I
"Beautifull Those last four words are Top Secret and Con-
d for you.'."
fidential."
funniest campaign speech of all
President Lyndon Johnson, who was one of the most
ator Smathers, and it was one of
vigorous and influential senators of all time, before accept-
appened when Smathers was run-
ing the nomination for Vice-President, defied congressional
ber for the senatorial nomination
tradition by keeping his name in the telephone directory
so people could reach him easily. He kept his name in even
ckwoods Floridians, Smathers said,
when he became Vice-President.
de Pepper is known all over Wash-
A relaxed, competent executive with huge amounts of
overt? Not only that, but this man
energy, Johnson sometimes quotes a congressman to quiet
actice nepotism with his sister-in-
his harried, harassed, upset colleagues. Johnson said that one
ho was once a Thespian in Green-
time the late Representative Magnus Johnson of Minnesota,
1, it is an established fact that Mr.
who occasionally blew sky-high when things went awry,
do
age, practiced celibacy."
shouted from the floor of the House, "We must take the
dountrys
bull by the tail and look the situation square in the face."
orite about congressmen concerns
be Cannon. A group of newspaper
A verbose congressman had written a long bill and getting
nd told Cannon they would push
bored by the repetition and length, Lincoln said to the aide
e would lift the tariff on Canadian
who was reading it aloud to him, "He's like the preacher
with those long sermons. He started writing and is so lazy
it 2,000 years ago, a certain fellow
he can't stop."
33
MAYBE I SHOULDNT SAY THIS, BUT
MAYBE I SHOULDNT SAY THIS, BUT
House. Advising professional advice-givers and trouble-
the least. But the second thought of the best people is, I
makers on how to treat any President, he said:
believe, with me."
"If you would only give them a consistent and hearty
support, bearing patiently with them when they seem to be
When Andrew Jackson was dishing out patronage ap-
making mistakes and giving them credit at least for good
5
pointments, one editor, who was being neglected, criticized
intentions, when-these seem not to be clear-what comfort
the caliber of men being named to important posts.
you would bestow."
Jackson, who believed that the men could honestly do
the job, said, "Say to him, before he condemns the tree, he
Abe, at. another time, explained the situation this way:
ought to wait and see its fruit."
"Suppose everything you owned was being carried across
by a man along Niagara Falls. Would you shout advice like
who had
lean to the left, or go slow? No, you would hold your breath.
left of
Wh Addressing the problems
Harding
Gulf effort
The government is carrying an immense weight. We are
was
were experienced, but
him with
doing the, best we can to guard our treasures. Don't badger
"We
n't know
us. Keep quiet and we will get you across safely."
the
h experi-
Congress managing the
ence fa noting we've only taken
for Presi-
General McClellan was constantly carping at Lincoln,
dent
giving him endless suggestions on how to run the White
the first steps along
House. Lincoln said McClellan reminded him of the story
Joh the "New Path"
Jefferson
of the man trying to get on a horse. As he climbed aboard,
for a
n his re-
the animal picked up one of its rear feet friskily and got it
electic
ertaining
caught in a stirrup. Said the man to the horse, "All right,
too O:
if you want to get on, I'll stay off."
"I
: that all
my ti:
n's whole
Before he became President, Lyndon Johnson was a very
eight
any once
influential senator, being majority leader in 1954. Many of
or twice a week; Jefferson was for liberty and straight hair;
his fellow Democratic Party members urged Lyndon to
I thought curled hair just as democratic."
really "get tough" on Eisenhower, putting the pressure on
him politically for party purposes.
Lyndon refused, saying, "Any jackass can kick down a
The hardships and difficulties imposed on a President by
barn, but only men can build and keep one."
a constant barrage of criticism was summed up this way
by Woodrow Wilson:
Ru
stoically
"I fancy that it is just as hard to do your duty when men
and I
ng, to say
are sneering at you as when they are shooting at you."
36
why POTUS went
37
attack Democrats
MAYBE I
While
odore
Roosevelt
hakes
a mistake
A gentle shaft of ridicule rather than a frontal assault was
Abraham Lincoln's best weapon in bursting the arguments
of his many opponents. He was once confronted by a weasel-
worded politician who tried to put himself constantly in the
most favorable light so he would profit.
Said Lincoln, "You remind me of the man who murdered
both his parents and then, when sentence was about to be
announced, pleaded for mercy on the grounds that he was an
orphan."
Presic
use. In
a speech
We 1
Don't know if its
thusly:
E every
case of
useful, but it's
selfish
interest,
funny
38
For the People
Our unique form of government, brought about through
many years of trial, bloodshed and travail, has managed to
flourish despite many bitter attacks throughout its existence.
Its hi
ustodians
of ou
emocracy.
More
efinitions.
Sai
1 back in
1789,
pillar of
gover
The
t consists
in the
Jeff
and our
Consti
of Inde-
pende
It ro
that all
men a
by their
creatoi
ag these
are lif
In 1937, Franklin D. Roosevelt said, "The ultimate fail-
ures of dictatorship cost humanity far more than any tem-
porary failures of democracy."
44
THE SMART WAY OUT
blew up at someone who had
hurt the speaker's feelings, while taking care not to demean
him about his actions on a
himself by being too humble.
coln for advice. Abe told him
Three months before his election in 1960, John Kennedy
the matter and letting the
handled his effusive introduction this way:
feels to be victimized like that.
'I want to express my appreciation to the Governor.
others you," said Abe, "and in
Ev
ally greatest
Pr
always think
: it delivered by messenger?"
pe
fees. George
W.
int to say a
you finish. You'll feel much
WC
11 accept the
CO
Lincoln's great diplomacy was
retary of the
d to comment on a painting
In
mateurish in fact.
like
White House
pa
known
me
nentioned to
n's feelings outright, Lincoln
a
tain in that
ed the Lord's commandments.
CO
Pakistan, but
the likeness of anything that is
in
ffense.
is in the earth beneath or that
leaned over
rth."
ar
I appointed
M
Valdo Emerson said, "his heart
at there was no room in it to
Abraham Lincoln once described diplomacy as the "ability
ig," had a habit that irritated
to describe others as they see themselves."
ds. Despite a temper that occa-
ath, often he spoke in friendly
Diplomacy often involves knowing when to keep quiet.
Calvin Coolidge was a past master at this. When someone
I not destroy my enemies when
asked the taciturn New Englander how he became President,
he replied with a shrug, "I just listened my way along."
ery presidential candidate's life
that it is embarrassing. Yet, he
e-road manner so that he won't
49
Services of Mead Data Central
****
****
*
1 PAGE
11 LINES
*
*
1:54 P.M. STARTED
1:54 P.M. ENDED
*
*
EEEEE
N N
DDDD
*
*
E
N N
D D
*
*
E
NN N
D D
*
*
EEE
NNN
D D
*
*
E
N NN
D D
*
*
E
N N
D D
*
*
EEEEE
N N
DDDD
#
****
****
****
SEND TO: DOOLY, PEGGY
EXECUTIVE OFFICE OF THE PRESIDENT
OLD EXECUTIVE OFFICE BUILDING
17TH & PENNSYLVANIA AVE., NW
WASHINGTON, DISTRICT OF COLUMBIA
LEXIS® ® NEXIS® LEXIS® NEXIS ®
Services of Mead Data Central
***** 89420
PRINTOUT COMPLETED ****** DECEMBER 27, 1:54 P.M. ******
***** 89420
PRINTOUT COMPLETED
******
DECEMBER 27, 1:54 P.M. ******
***** 89420
PRINTOUT COMPLETED
******
DECEMBER 27, 1:54 P.M. ******
***** 89420
PRINTOUT COMPLETED ****** DECEMBER 27, 1:54 P.M. ******
***** 89420
PRINTOUT COMPLETED
******
DECEMBER 27, 1:54 P.M. ******
***** 89420
PRINTOUT COMPLETED ****** DECEMBER 27, 1:54 P.M. ******
LEXIS® ® NEXIS® LEXIS® ® NEXIS® ®
Services of Mead Data Central
***** 24492
BEGIN PRINTOUT
JANUARY 2, 5:24 P.M.
***** 24492
BEGIN PRINTOUT
JANUARY 2, 5:24 P.M.
***** 24492
BEGIN PRINTOUT
JANUARY 2, 5:24 P.M.
***** 24492
BEGIN PRINTOUT
JANUARY 2, 5:24 P.M.
***** 24492
BEGIN PRINTOUT
JANUARY 2, 5:24 P.M.
***** 24492
BEGIN PRINTOUT
JANUARY 2, 5:24 P.M.
***** 24492
BEGIN PRINTOUT
JANUARY 2, 5:24 P.M.
***** 24492
BEGIN PRINTOUT
JANUARY 2, 5:24 P.M.
***** 24492
BEGIN PRINTOUT
JANUARY 2, 5:24 P.M.
***** 24492
BEGIN PRINTOUT
JANUARY 2, 5:24 P.M.
*****
24492
BEGIN PRINTOUT
JANUARY 2, 5:24 P.M.
SEND TO: GROSSMAN, JENNIFER
EXECUTIVE OFFICE OF THE PRESIDENT
OLD EXECUTIVE OFFICE BUILDING
17TH & PENNSYLVANIA AVE., NW
WASHINGTON, DISTRICT OF COLUMBIA
LEXIS® NEXIS® LEXIS® NEXIS® ®
5:21 P.M. EST
LEXIS® ® NEXIS® LEXIS® ® NEXIS ®
Services of Mead Data Central
PAGE
1
LEVEL 1 - - 2 OF 2 STORIES
Copyright (c) 1990 News World Communications Inc.;
The Washington Times
October 18, 1990, Thursday, Final Edition
SECTION: Part G; COMMENTARY; BOOK REVIEW; Pg. G4
LENGTH: 918 words
HEADLINE: Risks in the war on bias
BYLINE: Melville Ulmer
BODY:
Simply put, Clint Bolick is an idealist. His hero is Thomas Paine and like
Paine, he takes natural rights and civil rights as synonymous. His cause
transports him not to picket lines, nor even the lobbies of Congress, but to
courtrooms. In "Unfinished Business: A Civil Rights Strategy for America's
Third Century" he makes his case for the general reader.
As director of the Landmark Legal Foundation for Civil Rights, Mr. Bolick's
explicit objective is to reinforce America's national commitment to the Bill
(c) 1990 The Washington Times, October 18, 1990
of Rights and the 14th Amendment to the Constitution, the latter of which
guarantees "equal protection of the law" to all citizens. The particular rights
Mr. Bolick has in mind pertain to individual economic freedom.
That approach invites him to a forensic war on two fronts. On one front, he
opposes the reverse discrimination implicit in affirmative action quotas. He
views quotas as illegal, immoral and counterproductive. On the other front, he
would sweep away a mixed bag of government regulations such as minimum wage
laws, license requirements and entry tests. Mr. Bolick contends they violate
the Constitution and particularly restrict economic opportunities open to
minorities.
Individuals, he observes, differ from one another in innumerable ways,
including abilities and motivation. If they all enjoy equal treatment under the
law, as the Constitution commands, they are bound to wind up with different
shares in the bounties of life. Therefore equal "bounties" can be mandated only
through "discriminating coercion," which by definition violates the
constitutional guarantee for "equal treatment."
But such reasoning doesn't convince everyone. Think of Massachusetts
Democratic Sen. Edward Kennedy and Supreme Court Justice Harry A. Blackmun -
or the host of racial quotas already fixed in place, informally or otherwise,
LEXIS® NEXIS® LEXIS® NEXIS ®
Services of Mead Data Central
PAGE
2
(c) 1990 The Washington Times, October 18, 1990
in industry, government and universities. The common defense of quota
supporters is that discrimination in the past justifies favoritism in the
present.
Mr. Bolick rejoins that quotas compound injustice, rewarding non-victims at
the expense of others guilty of no wrongdoing. More important, he adds, quotas
deal only with the unwelcome symptoms of racial inequality, not with the
fundamental causes - unequal education and entry-level job opportunities.
It is at this point in the argument that Mr. Bolick joins forces with what
promises to be a distinctly conservative and possibly more effective approach to
the persistent issue of inner-city poverty. One of the code words that captures
the spirit of this budding campaign is "incentives."
One of the contributors to this campaign is sociologist Charles Murray, who
wrote the graceful foreword to Mr. Bolick's book. He is author of the
path-breaking studies that demonstrated the perverse disincentives to personal
effort and self-improvement inherent in traditional anti-poverty programs.
Specifically, he showed that the most lavishly supported federal effort -
centered in Aid for Families with Dependent Children - made it unprofitable for
beneficiaries to accept the low-paying jobs that their limited education and
skills would allow. The same federal readiness to support impecunious
(c) 1990 The Washington Times, October 18, 1990
"households" inspired a record-breaking increase in teen-age pregnancies.
One corrective directly implied by Mr. Murray's findings was a significant
cut in the magnitude of handouts, but this raised the specter of penalizing many
of the truly helpless and desperately needy.
Mr. Bolick's central objective is to generate greater economic
opportunities for minorities. It functions exclusively through revising or
eliminating existing laws and regulations that restrict personal economic
freedom, especially those that restrict opportunities open to blacks.
High on the list of things Mr. Bolick would rather do without, therefore,
are officially sanctioned monopolies, trade licenses and entry examinations that
unduly restrict newcomers to a business, and the minimum wage laws, which limit
competition, especially that of less productive minorities. All of these
impediments, he charges, lower competition and inhibit the efforts of the
less-privileged to help themselves.
Mr. Bolick concludes: "In essence, government is slowly cutting off the
bottom rungs of the economic ladder, leaving those outside the economic
mainstream to argue their case for quotas and set-asides or to join the welfare
rolls."
LEXIS® NEXIS® LEXIS® NEXIS®
Services of Mead Data Central
PAGE
3
(c) 1990 The Washington Times, October 18, 1990
The proposition could hardly be better put and is surely well documented
here. Yet, strangely and unnecessarily, its force is weakened by the author's
failure to clarify, or even frankly to confront, the underlying relationship
between government and society.
Is there no case at all - ever - for regulation by government in the public
interest? I may hope that Mr. Bolick would agree with Adam Smith that there
is, but he gives no sign of it anywhere in this book. In fact, one gets the
impression that he would oppose speed limits and traffic lights.
Melville J. Ulmer is professor emeritus of economics at the University of
Maryland and a fellow of the National Endowment for the Humanities and the
American Association for the Advancement of Science.
*****
UNFINISHED BUSINESS: A CIVIL RIGHTS STRATEGY FOR AMERICA'S THIRD CENTURY
By Clint Bolick
Pacific Research Institute for Public Policy, $24.95, 149 pages
LEXIS® ® NEXIS® LEXIS® ® NEXIS ®
The White House
THE OF Visit OF UNUM THE UNITED
Office of
Public Affairs
TABLE OF CONTENTS
PAGE
1.
The State of the Union Address
1
2.
State of the Union Fact Sheet
9
3.
State of the Union Themes
21
4.
National Drug Control Strategy
24
5.
The National Education Goals
34
6.
Surface Transportation Reauthorization
41
7.
The National Energy Strategy
45
8.
Expanding Choice and Opportunity for
Individuals, Families and Communities
55
9.
Crime Legislation
63
10.
Civil Rights Legislation
71
11.
Extension of Fast Track Authority
73
12.
Banking Reform --
the Financial Institutions Safety and Consumer Choice Act
83
13.
The National Export Initiative
94
14.
FY 1992 Budget
(Director's Introduction and Summary of Selected Items)
98
15.
The President's Economic Growth Agenda
151
16.
America 2000:
The President's Education Strategy
163
17.
21st Annual Council on Environmental Quality Report
and letter to Congress.
172
18.
Enterprise Zone and Job-Creation Act of 1991
Home Ownership and Opportunity for People Everywhere (HOPE)
184
Community Opportunity Act of 1991
19.
Improving Health for Infants and Children.
188
20.
Medical Malpractice
194
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release
January 29, 1991
ADDRESS BY THE PRESIDENT
ON THE STATE OF THE UNION
The U.S. Capitol
Washington, D.C.
9:09 P.M. EST
THE PRESIDENT: Mr. President, and Mr. Speaker, and
members of the United States Congress. I come to this House of the
people to speak to you and all Americans, certain that we stand at a
defining hour. Halfway around the world, we are engaged in a great
struggle in the skies and on the seas and sands. We know why we're
there. We are Americans -- part of something larger than ourselves.
For two centuries, we've done the hard work of freedom. And tonight,
we lead the world in facing down a threat to decency and humanity.
What is at stake is more than one small country; it is a
big idea: a new world order, where diverse nations are drawn
together in common cause to achieve the universal aspirations of
mankind -- peace and security, freedom, and the rule of law. Such is
a world worthy of our struggle and worthy of our children's future.
(Applause.)
The community of nations has resolutely gathered to
condemn and repel lawless aggression. Saddam Hussein's unprovoked
invasion -- his ruthless, systematic rape of a peaceful neighbor --
violated everything the community of nations holds dear. The world
has said this aggression would not stand -- and it will not stand.
(Applause.)
Together, we have resisted the trap of appeasement,
cynicism, and isolation that gives temptation to tyrants. The world
has answered Saddam's invasion with 12 United Nations resolutions,
starting with a demand for Iraq's immediate and unconditional
withdrawal and backed up by forces from 28 countries of six
continents. with few exceptions, the world now stands as one.
The end of the Cold War has been a victory for all
humanity. A year and a half ago, in Germany, I said that our goal
was a Europe whole and free. Tonight, Germany is united. Europe has
become whole and free -- and America's leadership was instrumental in
making it possible. (Applause.)
Our relationship to the Soviet Union is important, not
only to us, but to the world. That relationship has helped to shape
these and other historic changes. But like many other nations, we
have been deeply concerned by the violence in the Baltics, and we
have communicated that concern to the Soviet leadership.
The principle that has guided us is simple: Our
objective is to help the Baltic peoples achieve their aspirations,
not to punish the Soviet Union. (Applause.) In our recent
discussions with the Soviet leadership, we have been given
representations which, if fulfilled, would result in the withdrawal
of some Soviet forces, a reopening of dialogue with the Republics,
and a move away from violence.
We will watch carefully as the situation develops. And
we will maintain our contact with the Soviet leadership to encourage
1
continued commitment to democratization and reform. (Applause.) If
it is possible, I want to continue to build a lasting basis for
U.S.-Soviet cooperation, for a more peaceful future for all mankind.
The triumph of democratic ideas in Eastern Europe and
Latin America, and the continuing struggle for freedom elsewhere all
around the world all confirm the wisdom of our nation's founders.
Tonight, we work to achieve another victory -- a victory
over tyranny and savage aggression.
We in this Union enter the last decade of the 20th
century thankful for our blessings, steadfast in our purpose, aware
of our difficulties, and responsive to our duties at home and around
the world.
For two centuries, America has served the world as an
inspiring example of freedom and democracy. For generations, America
has led the struggle to preserve and extend the blessings of liberty.
And today, in a rapidly changing world, American leadership is
indispensable. Americans know that leadership brings burdens and
sacrifices. But we also know why the hopes of humanity turn to us.
We are Americans: we have a unique responsibility to do the hard
work of freedom. And when we do, freedom works. (Applause.)
The conviction and courage we see in the Persian Gulf
today is simply the American character in action. The indomitable
spirit that is contributing to this victory for world peace and
justice is the same spirit that gives us the power and the potential
to meet our toughest challenges at home.
We are resolute and resourceful. If we can selflessly
confront evil for the sake of good in & land so far away, then surely
we can make this land all that it should be. If anyone tells you
that America's best days are behind her, they're looking the wrong
way. (Applause.)
Tonight, I come before this House and the American people
with an appeal for renewal. This is not merely a call for new
government initiatives; it is a call for new initiative in
government, in our communities, and from every American -- to prepare
for the next American century.
America has always led by example. so who among us will
set this example? Which of our citizens will lead us in this next
American century? Everyone who steps forward today -- to get one
addict off drugs, to convince one troubled teenager not to give up on
life, to comfort one AIDS patient, to help one hungry child.
We have within our reach the promise of a renewed
America. We can find meaning and reward by serving some purpose
higher than ourselves -- a shining purpose, the illumination of a
thousand points of light. And it is expressed by all who know the
irresistible force of a child's hand, of a friend who stands by you
and stays there -- a volunteer's generous gesture, an idea that is
simply right.
The problems before us may be different, but the key to
solving them remains the same. It is the individual -- the
individual who steps forward. And the state of our Union is the
union of each of us, one to the other -- the sum of our friendships,
marriages, families, and communities.
We all have something to give. So if you know how to
read, find someone who can't. If you've got a hammer, find a nail.
If you're not hungry, not lonely, not in trouble, seek out someone
who is. Join the community of conscience. Do the hard work of
freedom. And that will define the state of our Union. (Applause.)
Since the birth of our nation, "We the people" has been
the source of our strength. What government can do alone is limited
-- but the potential of the American people knows no limits.
MORE
2
We are a nation of rock-solid realism and clear-eyed
idealism. We are Americans. We are the nation that believes in the
future. We are the nation that can shape the future. And we've
begun to do just that -- by strengthening the power and choice of
individuals and families.
Together, these last two years, we've put dollars for
child care directly in the hands of parents instead of bureaucracies.
(Applause.) Unshackled the potential of Americans with disabilities.
(Applause.) Applied the creativity of the marketplace in the service
of the environment, for clean air; and made home ownership possible
for more Americans. (Applause.)
The strength of a democracy is not in bureaucracy. It is
in the people and their communities. In everything we do, let us
unleash the potential of our most precious resource -- our citizens,
our citizens themselves. We must return to families, communities,
counties, cities, states, and institutions of every kind the power to
chart their own destiny, and the freedom and opportunity provided by
strong economic growth. And that's what America is all about.
(Applause.)
I know tonight in some regions of our country, people are
in genuine economic distress. And I hear them.
Earlier this month, Kathy Blackwell, of Massachusetts,
wrote ne about what can happen when the economy slows down, saying,
"My heart is aching, and I think that you should know your people out
here are hurting badly."
I understand. And I'm not unrealistic about the future.
But there are reasons to be optimistic about our economy.
First, we don't have to fight double-digit inflation.
Second, most industries won't have to make big cuts in production
because they don't have big inventories piled up. And third, our
exports are running solid and strong. In fact, American businesses
are exporting at a record rate.
So let's put these times in perspective. Together, since
1981, we've created almost 20 million jobs, cut inflation in half,
and cut interest rates in half.
And, yes, the largest peacetime economic expansion in
history has been temporarily interrupted. But our economy is still
over twice as large as our closest competitor.
We will get this recession behind us and return to growth
soon. (Applause.) We will get on our way to a new record of
expansion and achieve the competitive strength that will carry us
into the next American century.
We should focus our efforts today on encouraging economic
growth, investing in the future, and giving power and opportunity to
the individual. (Applause.)
We must begin with control of federal spending.
(Applause.) That's why I'm submitting a budget that holds the growth
in spending to less than the rate of inflation. And that's why, amid
all the sound and fury of last year's budget debate, we put into law
new, enforceable spending caps -- so that future spending debates
will mean a battle of ideas, not a bidding war. (Applause.)
Though controversial, the budget agreement finally put
the federal government on a pay-as-you-go plan and cut the growth of
debt by nearly $500 billion. And that frees funds for saving and
job-creating investment.
Now, let's do more. My budget again includes tax-free
family savings accounts; penalty-free withdrawals from IRAs for
first-time home buyers -- (applause) -- and to increase jobs and
MORE
growth, a reduced tax for long-term capital gains. (Applause.)
I know there are differences among us -- (laughter) --
about the impact and the effects of a capital gains incentive. so
tonight, I'm asking the congressional leaders and the Federal Reserve
to cooperate with us in a study, led by Chairman Alan Greenspan, to
sort out our technical differences so that we can avoid a return to
unproductive partisan bickering. (Applause.)
But just as our efforts will bring economic growth now
and in the future, they must also be matched by long-term investments
for the next American century.
That requires a forward-looking plan of action -- and
that's exactly what we will be sending to the Congress. We've
prepared a detailed series of proposals that include:
A budget that promotes investment in America's future --
in children, education, infrastructure, space, and high technology;
legislation to achieve excellence in education --
building on the partnership forged with the 50 governors at the
Education Summit, enabling parents to choose their children's schools
and helping to make America number one in math and science; --
(applause) --
a blueprint for a new national highway system -- a
critical investment in our transportation infrastructure; --
(applause) --
a research and development agenda that includes record
levels of federal investment, and a permanent tax credit to
strengthen private R&D and to create jobs; -- (applause) --
a comprehensive national energy strategy that calls for
energy conservation and efficiency, increased development, and
greater use of alternative fuels; -- (applause) --
a banking reform plan to bring America's financial system
into the 21st century so that our banks remain safe and secure and
can continue to make job-creating loans for our factories, our
businesses and home-buyers.
You know, I do think there has been too much pessimism.
Sound banks should be making sound loans now -- and interest rates
should be lower, now. (Applause.)
In addition to these proposals, we must recognize that
our economic strength depends on being competitive in world markets.
We must continue to expand American exports. A successful Uruguay
Round of world trade negotiations will create more real jobs and more
real growth for all nations. You and I. know that if the playing
field is level, America's workers and farmers can out-work,
out-produce anyone, anytime, anywhere. (Applause.)
And with a Mexican Free Trade Agreement and our
Enterprise for the Americas Initiative, we can help our partners
strengthen their economies and move toward a free trade zone
throughout this entire hemisphere. (Applause.)
The budget also includes a plan of action right here at
home to put more power and opportunity in the hands of the
individual. And that means new incentives to create jobs in our
inner cities, by encouraging investment through enterprise zones. It
also means tenant control and ownership of public housing. Freedom
and the power to choose should not be the privilege of wealth. They
are the birthright of every American. (Applause.)
Civil rights are also crucial to protecting equal
opportunity. (Applause.) Every one of us has a responsibility to
speak out against racism, bigotry, and hate. (Applause.) We will
continue our vigorous enforcement of existing statutes, and I will
MORE
4
once again press the Congress to strengthen the laws against
employment discrimination without resorting to the use of unfair
preferences. (Applause.)
We're determined to protect another fundamental civil
right -- freedom from crime and the fear that stalks our cities. The
Attorney General will soon convene a crime summit of our nation's law
enforcement officials. And to help us support them, we need tough
crime control legislation, and we need it now. (Applause.)
And as we fight crime, we will fully implement our
national strategy for combatting drug abuse. Recent data show that
we are making progress, but much remains to be done. We will not
rest until the day of the dealer is over, forever. (Applause.)
Good health care is every American's right and every
American's responsibility. And so we are proposing an aggressive
program of new prevention initiatives -- for infants, for children,
for adults, and for the elderly -- to promote a healthier America and
to help keep costs from spiralling. (Applause.)
It's time to give people more choice in government, by
reviving the ideal of the citizen politician who comes not to stay,
but to serve. And one of the reasons that there is so much support
across this country for term limitations is that the American people
are increasingly concerned about big-money influence in politics. so
we must look beyond the next election, to the next generation. And
the time has come to put the national interest above the special
interest -- and totally eliminate political action committees.
(Applause.)
And that would truly put more competition in elections,
and more power in the hands of individuals. And where power cannot
be put directly in the hands of the individual, it should be moved
closer to the people -- away from Washington.
The federal government too often treats government
programs as if they are of Washington, by Washington, and for
Washington. Once established, federal programs seem to become
immortal.
It's time for a more dynamic program life cycle: Some
programs should increase. Some should decrease. Some should be
terminated. And some should be consolidated and turned over to the
states. (Applause.)
My budget includes a list of programs for potential
turnover totalling more than $20 billion. Working with Congress and
the governors, I propose we select at least $15 billion in such
programs and turn them over to the states in a single consolidated
grant -- fully funded -- for flexible management by the states.
(Applause.)
The value -- the value of this turnover approach is
straightforward. It allows the federal government to reduce
overhead. It allows states to manage more flexibly and more
efficiently. It moves power and decision-making closer to the
people. And it reinforces a theme of this administration:
appreciation and encouragement of the innovative powers of "States as
Laboratories."
This nation was founded by leaders who understood that
power belongs in the hands of people. And they planned for the
future. And so must we -- here and all around the world.
As Americans, we know that there are times when we must
step forward and accept our responsibility to lead the world away
from the dark chaos of dictators, toward the brighter promise of a
better day.
Almost 50 years ago we began a long struggle against
aggressive totalitarianism. Now we face another defining hour for
MORE
5
America and the world.
There is no one more devoted, more committed to the hard
work of freedom, than every soldier and sailor, every Marine, airman,
and Coastguardsman -- every man and woman now serving in the Persian
Gulf. (Applause.) oh, how they deserve -- (applause) -- and what a
fitting tribute to them.
You see -- what a wonderful, fitting tribute to them.
Each of them has volunteered -- volunteered to provide for this
nation's defense -- and now they bravely struggle, to earn for
America, for the world, and for future generations, a just and
lasting peace.
Our commitment to them must be equal to their commitment
to their country. They are truly America's finest. (Applause.)
The war in the Gulf is not a war we wanted. We worked
hard to avoid war. For more than five months we, along with the Arab
League, the European Community, the United Nations, tried every
diplomatic avenue. U.N. Secretary General Perez de Cuellar;
Presidents Gorbachev, Mitterrand, Ozal, Mubarak, and Bendjedid, Kings
Fahd and Hassan; Prime Ministers Major and Andreotti -- just to name
a few -- all worked for a solution. But time and again, Saddam
Hussein flatly rejected the path of diplomacy and peace.
The world well knows how this conflict began and when:
It began on August 2nd, when Saddam invaded and sacked a small,
defenseless neighbor. And I am certain of how it will end. So that
peace can prevail, we will prevail. (Applause.) Thank you.
Tonight, I am pleased to report that we are on course.
Iraq's capacity to sustain war is being destroyed. Our investment,
our training, our planning -- all are paying off. Time will not be
Saddam's salvation.
Our purpose in the Persian Gulf remains constant: to
drive Iraq out of Kuwait, to restore Kuwait's legitimate government,
and to ensure the stability and security of this critical region.
Let ne make clear what I mean by the region's stability
and security. We do not seek the destruction of Iraq, its culture,
or its people. Rather, we seek an Iraq that uses its great
resources, not to destroy, not to serve the ambitions of a tyrant,
but to build a better life for itself and its neighbors. We seek a
Persian Gulf where conflict is no longer the rule, where the strong
are neither tempted nor able to intimidate the weak.
Most Americans know instinctively why we are in the Gulf.
They know we had to stop Saddam now, not later. They know that this
brutal dictator will do anything; will use any weapon; will commit
any outrage, no matter how many innocents suffer.
They know we must make sure that control of the world's
oil resources does not fall into his hands, only to finance further
aggression. They know that we need to build a new, enduring peace --
based not on arms races and confrontation, but on shared principles
and the rule of law.
And we all realize that our responsibility to be the
catalyst for peace in the region does not end with the successful
conclusion of this war.
Democracy brings the undeniable value of thoughtful
dissent -- and we've heard some dissenting voices here at home --
some, a handful, reckless -- most responsible. But the fact that all
voices have the right to speak out is one of the reasons we've been
united in purpose and principle for 200 years. (Applause.)
Our progress in this great struggle is the result of
years of vigilance and a steadfast commitment to a strong defense.
Now, with remarkable technological advances like the Patriot missile,
MORE
6
we can defend against ballistic missile attacks aimed at innocent
civilians.
Looking forward, I have directed that the SDI program be
refocused on providing protection from limited ballistic missile
strikes -- whatever their source. (Applause.) Let us pursue an SDI
program that can deal with any future threat to the United STates, to
our forces overseas, and to our friends and allies.
The quality of American technology, thanks to the
American worker, has enabled us to successfully deal with difficult
military conditions and help minimize precious loss of life. We have
given our men and women the very best. And they deserve it.
(Applause.)
We all have a special place in our hearts for the
families of our men and women serving in the Gulf. They are
represented here tonight by Mrs. Norman Schwarzkopf. (Applause.) We
are all very grateful to General Schwarzkopf and to all those serving
with him. And I might also recognize one who came with Mrs.
Schwarzkopf -- Alma Powell, the wife of the distinguished Chairman of
the Joint Chiefs. (Applause.) And to the families, let ne say our
forces in the Gulf will not stay there one day longer than is
necessary to complete their mission. (Applause.)
The courage and success of the RAF pilots, of the
Kuwaiti, Saudi, French, the Canadians, the Italians, the pilots of
Qatar and Bahrain -- all are proof that for the first time since
World War II, the international community is united. The leadership
of the United Nations, once only a hoped-for ideal, is now confirming
its founders' vision. (Applause.)
I am heartened that we are not being asked to bear alone
the financial burdens of this struggle. Last year, our friends and
allies provided the bulk of the economic costs of Desert Shield. And
now, having received commitments of over $40 billion for the first
three months of 1991, I am confident they will do no less as we move
through Desert Storm. (Applause.)
But the world has to wonder what the dictator of Iraq is
thinking. If he thinks that by targeting innocent civilians in
Israel and Saudi Arabia, that he will gain advantage, he is dead
wrong. (Applause.) If he thinks that he will advance his cause
through tragic and despicable environmental terrorism, he is dead
wrong. (Applause.) And if he thinks that by abusing the coalition
prisoners of war he will benefit, he is dead wrong. (Applause.)
We will succeed in the Gulf. And when we do, the world
community will have sent an enduring warning to any dictator or
despot, present or future, who contemplates oulaw aggression.
The world can, therefore, seize this opportunity to
fulfill the long-held promise of a new world order, where brutality
will go unrewarded and aggression will meet collective resistance.
Yes, the United States bears a major share of leadership
in this effort. Among the nations of the world, only the United
States of America has both the moral standing and the means to back
it up. We're the only nation on this Earth that could assemble the
forces of peace. This is the burden of leadership and the strength
that has made America the beacon of freedom in a searching world.
This nation has never found glory in war. Our people
have never wanted to abandon the blessings of home and work for
distant lands and deadly conflict. If we fight in anger, it is only
because we have to fight at all. And all of us yearn for a world
where we will never have to fight again.
Each of us will measure within ourselves the value of
this great struggle. Any cost in lives -- any cost -- is beyond our
power to measure. But the cost of closing our eyes to aggression is
beyond mankind's power to imagine.
MORE
7
This we do know: Our cause is just. Our cause is moral.
Our cause is right. (Applause.)
Let future generations understand the burden and the
blessings of freedom. Let them say we stood where duty required us
to stand.
Let them know that, together, we affirmed America and the
world as a community of conscience.
The winds of change are with us now. The forces of
freedom are together, united. We move toward the next century more
confident than ever that we have the will at home and abroad to do
what must be done, the hard work of freedom.
May God bless the United States of America. Thank you
very, very much. (Applause.)
END
9:57 P.M. EST
8
THE WHITE HOUSE
Office of the Press Secretary
EMBARGOED FOR RELEASE
AND WIRE TRANSMISSION
UNTIL 9:00 PM (EST)
TUESDAY, JANUARY 29, 1991
THE PRESIDENT'S STATE OF THE UNION ADDRESS
FACT SHEET
The President's 1991 State of the Union address discussed:
A New World Order
Preparing for the Next American Century
The War in the Gulf
The President explained that he came to speak to the Congress
and all Americans "certain that we stand at a defining hour."
I. A NEW WORLD ORDER
A.
Peace and the Rule of Law
The President declared that what is at stake in the Persian
Gulf is more than just the independence of Kuwait. It is a new
world order where diverse nations are brought together. to give.
permanence to the universal aspirations of mankind:
Peace and security;
Freedom; and
The rule of law.
The world has "resisted the trap of appeasement, cynicism, and
isolation" and is united in demanding Iraq's immediate and
unconditional withdrawal from Kuwait. We are working to
achieve victory over tyranny and lawless aggression. America
has "a unique responsibility to do the hard work of freedom."
9
B.
Constructive Change
The President noted that "the end of the Cold War has been a
victory for all humanity Germany is united. Europe has
become whole and free -- and America's leadership was
instrumental in making it possible."
C.
U.S.-Soviet Relations
The President stated that "our relationship with the Soviet
Union is important, not only to us, but to the world." It has
contributed to positive, historic change.
The President also noted that "like many other nations, we have
been deeply concerned by the violence in the Baltics.' The
President stated that in discussions with the Soviet leadership
"we have been given representations, which, if fulfilled, would
result in the withdrawal of some Soviet forces, a reopening of
dialogue with the Republics, and a move away from violence."
We will watch carefully as the situation develops; we will also
maintain our contacts with Soviet leaders to encourage
democratization and reform.
II. PREPARING FOR THE NEXT AMERICAN CENTURY
The President asserted that the spirit that is winning a
victory for world peace and justice in the Persian Gulf is "the
same spirit that gives us the power and the potential to meet
our toughest challenges at home." The President called for
"new initiative in government, in our communities, and from
every American, to prepare for the next American century."
The President encouraged all Americans to join the "community
of conscience", asserting that "we have within our reach the
promise of a renewed America." He said "we can find meaning
and reward by serving some purpose higher than ourselves."
The President called for "strengthening the power and freedom
of choice of individuals and families." He declared that "the
strength of a democracy is not in bureaucracy," but "in the
people and their communities." The President called for the
unleashing of "the potential of our most precious resource --
our citizens." This should be done by returning to "families,
communities, counties, cities, states, and institutions of
every kind, the power to chart their own destiny."
10
A.
Encouraging Economic Growth
The President explained that he understands the genuine
economic distress experienced by many Americans. He
offered three reasons to be optimistic about the economy:
-
Inflation is low;
-
Inventories are low; and
-
Exports are strong.
The President expressed confidence that "we will get this
recession behind us, and return to growth -- soon.
Controlling Federal Spending and Enforcing the Budget
Agreement
The President declared that strong economic growth
requires control of Federal spending. He will transmit a
budget that holds the growth in spending to less than the
rate of inflation.
The budget agreement put the Federal government on a pay-
as-you-go plan and cut the growth of debt by nearly $500
billion.
Encouraging Savings and Investment
The President explained that the budget agreement helped
free private funds for savings and job-creating
investment.
In addition, the President announced that his budget again
includes:
Tax-free family savings accounts;
Penalty-free withdrawals from IRAs for first-
time home buyers; and
A strengthened long-term capital gains
incentive.
He also asked congressional leaders, the Administration,
and the Federal Reserve to cooperate in a study, led by
Federal Reserve Chairman Alan Greenspan, to reach
technical agreement on the budgetary and other economic
effects of a strengthened capital gains incentive.
11
B.
Investing in the Future
The President said that we must match incentives for
economic growth today with long-term investments for the
next American century.
Budget Priorities
The President indicated that his FY 1992 budget priorities
will include promoting investments in children, education,
infrastructure, space, and high technology.
Strengthening Education
The President will propose a new Educational Excellence
Act which contains strategic initiatives to improve the
learning achievement of all Americans and to restructure
the nation's educational system. Initiatives in the
Educational Excellence Act will:
Stimulate fundamental reform and restructure our
education system through promoting educational
choice and alternative certification for
teachers and principals.
Promote local control and innovation in
education by providing increased flexibility in
funding at the Federal and state levels in
exchange for enhanced accountability.
Assist educators in their mission to improve
student performance by: rewarding schools that
demonstrate improved achievement among students;
rewarding excellent teachers; and providing
innovation in training school administrators.
Provide incentives to school districts to design
and implement innovative approaches to
mathematics and science education; enhance the
endowments of Historically Black Colleges and
Universities; and contribute to improving
literacy.
12
Strengthening Transportation Infrastructure
The President believes a strong highway system is a
critical investment for our economic success. He
indicated that he would shortly outline the details of a
new National Highway System managed in partnership with
the States.
Enhancing Research and Development
To strengthen our research and development capability and
economic competitiveness the President will propose:
A record Federal budget commitment to science
and expanding the frontiers of knowledge,
including basic research and making government
research more available to the private sector
for speedier commercialization;
Increased support for generic or enabling
technologies at the pre-competitive stage of R&D
in such areas as high-performance computing, new
energy technologies, and advanced manufacturing
and materials; and
Making permanent the R&E tax credit.
Reducing Energy Vulnerability
The President will soon present a comprehensive National
Energy Strategy that calls for energy conservation and
efficiency, increased domestic energy development, and
greater use of alternative fuels. The elements of the
strategy are designed to:
Foster economic growth through the availability
of ample supplies of reasonably priced energy;
Enhance energy security by reducing
vulnerability to oil disruptions; and
Increase research and development of a wide
range of promising energy technologies.
Providing Financial Security
The President said that we will continue to make sure
banks are safe, sound, and able to provide adequate credit
13
for job-creating loans for factories, businesses, and
homebuyers.
He stated that "sound banks should be making more sound
loans, now -- and interest rates should be lower, now."
The Treasury will shortly unveil a plan to bring America's
financial system into the 21st century. The elements of
the plan are designed to:
Continue to protect the deposits of America's
workers and savers;
Assure the safety, soundness, and
competitiveness of our financial institutions;
Create a regulatory system that is strong,
simple, and streamlined; and
Move toward a deposit insurance fund that is
well capitalized with industry funds.
Expanding World Trade
The President called for an expansion of world trade, to
create new opportunities for U.S. exports, which have
grown by 23 percent over the past two years to nearly $400
billion. His priorities include:
-
Strengthening and expanding the world trading system
through the swift and successful completion of the
Uruguay Round of multilateral trade negotiations.
These negotiations aim to open markets
worldwide, lower government subsidies and trade
barriers that distort agricultural markets, and
establish rules of fair play in areas vital to
U.S. competitiveness -- such as services,
agriculture, and high technology.
The lower trade barriers that would result from
a successful Uruguay Round could increase world
output by approximately $5 trillion over the
next ten years, and U.S. output by $1 trillion.
-
A U.S. - Mexico Free Trade Agreement (FTA), first
endorsed by President Bush and Mexico's President
Carlos Salinas de Gortari in June 1990.
14
A comprehensive FTA would aim to eliminate
barriers to trade in goods and services and
investment between the United States and Mexico,
as well as provide for the protection of
intellectual property rights.
It would free trade totalling $59 billion
between the two countries.
The FTA might also include Canada, thus creating
the world's largest market, with 360 million
consumers and $6 trillion in total output.
Implementing the Enterprise for the Americas
Initiative, launched by President Bush last June.
The President's initiative aims to spur economic
growth and create jobs among the nations of the
Western Hemisphere by removing barriers to trade
and investment, and by reducing debt burdens.
The initiative envisions the eventual
development of a hemispheric zone of free trade.
The United States has begun the process of
opening markets to trade and investment with
over a dozen countries in the region.
The President will propose legislation to enable
full implementation of the investment and debt
reduction portions of the initiative.
Export Promotion. The Administration will be taking
quality and export programs to cities around the
country, to make certain that more U.S. firms know
the export potential of top quality goods and
services.
C.
Giving Power and Opportunity to the Individual
The President announced an action plan to "put more power
and opportunity in the hands of the individual." "
Creating Job Opportunities
The President called for new incentives to create jobs in
our inner cities by encouraging investment through
enterprise zones.
15
Increasing Home Ownership
The President also called for increasing tenant ownership
and control of public housing to help build the bonds of
community in neighborhoods that need help.
Fighting Discrimination
The President stated that "civil rights are also crucial
to protecting equal opportunity." He called on all
Americans to speak out against racism, bigotry, and hate.
The President indicated that "we will continue our
vigorous enforcement of existing statutes," and promised
to press the Congress again "to strengthen the laws
against employment discrimination without resorting to the
use of unfair preferences."
Protecting People From Crime and Combatting Drug Abuse
The President described freedom from crime as a basic
civil right and said that we must eradicate the fear that
stalks our cities.
-
He announced that the Attorney General will soon
convene a Crime Summit of our nation's law
enforcement officials.
-
He called for prompt action on tough crime control
legislation. The President will propose legislation
that will include:
A meaningful Federal death penalty for the most
heinous crimes with procedures to ensure its
fair and colorblind application;
Habeas corpus reform to reduce unnecessarily
repetitive appeals that clog the courts and
delay justice;
Exclusionary rule reform to ensure that evidence
gathered by law enforcement officials in a good
faith belief that they are acting lawfully can
be used to help courts establish the truth;
Provisions to strengthen Federal laws concerning
the safety of women by modifying rules on the
16
admissibility of evidence in cases of sex
crimes, enhancing penalties for the distribution
of illegal drugs to pregnant women, increasing
penalties for recidivist sex offenders, and
offering greater protection for victims below
the age of sixteen; and
New authority to enhance international
cooperation among law enforcement officials to
combat international criminal activity,
including international terrorism.
The President noted that recent data shows we are
making progress in reducing drug abuse, but that much
remains to be done. The Administration will soon
release the third edition of the National Drug
Control Strategy.
This comprehensive strategy includes increased
resources for drug prevention and education,
treatment, law enforcement, and international
initiatives.
Enhancing Good Health Through Prevention
The President stated that good health is every American's
right and responsibility. He announced that he will
propose an aggressive program of new prevention
initiatives to promote a healthier America and to help
control costs.
The initiatives are designed to make Americans of all ages
healthier.
Infant health will be improved through an
initiative that targets cities with
exceptionally high infant mortality rates;
Children will benefit from large increases in
immunization resources;
Adults will benefit from new efforts to promote
physical activity and reduce injury, reduce
tobacco use, and implementation of a new program
to detect breast and cervical cancer; and
Elderly women will benefit from mammography
services newly available to Medicare
beneficiaries.
17
Giving People More Choice in Government
The President urged "reviving the ideal of the citizen
politician who comes not to stay, but to serve."
He endorsed term limitations in order to reduce
the influence of special interests.
He also endorsed election reform -- total
elimination of Political Action Committees -- as
necessary to put more power in the hands of
individuals.
D.
Moving Government Closer to the People
The President said that "where power cannot be put
directly in the hands of the individual, it should be
moved closer to the people -- away from Washington."
The President called for a more dynamic program life
cycle.
Some programs should increase;
Some should decrease;
Some should be terminated; and
Some should be consolidated and turned over to
the States.
The President's Budget includes a list of potential
programs for turnover totalling more than $20 billion
Working with the Governors and the Congress, the President
proposed selecting at least $15 billion in such programs
and turning them over to the States in a single
consolidated grant, fully funded, for flexible management
by the States. This initiative will:
Allow the Federal Government to reduce overhead;
Allow States to manage more flexibly and
efficiently;
Move power and decision-making closer to the
people; and
Encourage the innovative power of "States as
Laboratories."
18
III. THE WAR IN THE GULF
A.
The Heroism of Our Servicemen and Servicewomen
The President said that, in this defining hour for America
and the world, "there is no one more devoted, more
committed to the hard work of freedom than every soldier
and sailor, every Marine, airman and Coastguardsman --
every man and woman now serving in the Persian Gulf." He
stated that our commitment to them must match their
commitment to their country.
B.
We Are on Course
The President said that while we worked hard to avoid war,
Saddam Hussein repeatedly rejected the path of diplomacy
and peace. But we will prevail; we are on course.
"Iraq's capacity to sustain war is being destroyed
Time
will not be Saddam's salvation.
C.
Objectives in the Gulf
The President reaffirmed our objectives:
Drive Iraq from Kuwait. Iraq must comply with all
relevant United Nations resolutions.
Restore Kuwait's legitimate government. Kuwait will
once again be free.
Ensure stability and security in the Gulf region. It
is our hope that Iraq will live as a peaceful and
cooperative member of the family of nations.
The President stated that most Americans know
instinctively why we are in the Gulf -- "we had to stop
Saddam now, not later." The President noted the
undeniable value of thoughtful dissent. The right to
speak out "is one of the reasons we've been united in
purpose and principle for 200 years."
D.
Strategic Benefits of High Technology
The President observed that our progress in the Gulf is
the result of using American technology and economic
19
strength to minimize the risk to human life. Our men and
women have the best and deserve the best.
The President directed that the Strategic Defense
Initiative (SDI) program be refocused on providing
protection from limited ballistic missile strikes -- from
whatever their source.
E.
The Unity of the International Community
The President observed that for the first time in the
post-war era, the international community is united. It
has an opportunity to fulfill the long-held promise of a
new world order -- where brutality goes unrewarded, and
aggression meets collective resistance.
The President praised the courage and success of the
pilots of the coalition countries and the leadership
provided by the United Nations, an organization that is
now confirming its founders' vision.
The President also commended our friends and allies who
have provided the bulk of the financial costs of Desert
Shield, and expressed confidence that they will similarly
financially support Desert Storm.
F.
U.S. Determination is Great
The President stated that Saddam will not benefit from
targeting innocent civilians, from environmental
terrorism, or by abusing POWs. We will succeed, and in
the process send a powerful message to any dictator or
despot who would follow Saddam's lead.
G.
The Special Role of U.S. Leadership
The President stated that "the United States bears a major
share of leadership" in the Gulf War effort. He noted
that the burden of leadership is a "strength that has made
America the beacon of freedom in a searching world."
20
STATE OF THE UNION THEMES AND PRIORITIES
The President's Domestic Agenda
1.
Encouraging Economic Growth & Increased Competitiveness in World Markets
Controlling federal spending by enforcing the budget agreement
Promoting personal savings, investment and capital formation
Providing financial security
Expanding world trade
2.
Investing in the Future
Strengthening education
Strengthening transportation infrastructure
Preserving and protecting the environment
Enhancing research and development
Reducing energy vulnerability
3.
Giving Power and Opportunity to the Individual
Creating job opportunities
Increasing home ownership
Fighting discrimination
Protecting people from crime and combatting drug abuse
Enhancing good health through prevention
Giving people more choice in government
2/91
21
National
Drug Control
Strategy
Executive
Summary
February 1991
National Drug
Control Strategy
Executive Summary
In accordance with the Anti-Drug Abuse Act of 1988, the President
presented the third National Drug Control Strategy to the Congress on
January 31. 1991.
The fundamental principle of the National Strategy remains firm:
to reduce drug use through a mix of supply and demand policies and
programs. Like its predecessors, this Strategy recognizes the key roles
of Federal. State, and local governments. the private sector, and com-
munities and individuals across the Nation. The Strategy calls for
applying pressure across all fronts of the drug war simultaneously.
recognizing that prevention is the only answer in the long run. but that
in the short run increased interdiction, international. and law enforce-
ment efforts are necessary. as well as treatment for those currently
using drugs.
It declares that as a Nation we must:
Establish meaningful and effective programs to prevent people
from using drugs in the first place.
Provide effective treatment for those who need it and can benefit
from it.
Hold users accountable for their actions and thereby deter
others from using drugs.
Target and dismantle drug trafficking organizations.
Prosecute drug dealers and traffickers.
Punish those convicted of drug crimes.
Disrupt the flow of drugs. related chemicals, and drug money.
Engage other nations in efforts to reduce the growth. produc-
tion, and distribution of drugs.
1
24
Executive Summary
Support basic and applied research in behavior. medicine, and
technology.
Improve our intelligence capabilities in order to attack drug
trafficking organizations better.
The National Drug Control Strategy established nine detailed goals
and objectives. These goals were first set in the 1989 Strategy as targets
for 1991. As the following chart shows. these objectives have been met.
NATIONAL DRUG CONTROL STRATEGY
NATIONAL OBJECTIVES
GOAL
ACTUAL
CURRENT OVERALL DRUG USE
-10%
-11% 3
CURRENT ADOLESCENT DRUG USE
-10%
-13% 4
OCCASIONAL COCAINE USE
-10%
-29% 1
FREQUENT COCAINE USE
50%
-23% 4
reduction
actual
in rate
decline
of increase
CURRENT ADOLESCENT COCAINE USE
-20%
-49% 2
DRUG-RELATED MEDICAL EMERGENCIES
-10%
-18% 5
DRUG AVAILABILITY
-10%
data not yet
available
DOMESTIC MARIJUANA PRODUCTION
-10%
data not yet
available
6
STUDENT ATTITUDES TOWARD DRUG
-10%
-28%
USE
Significant at the .01 level. 2Significant at the .06 level. Significant at the .15 level.
4Significant at the .3 level. 5 No sampling variance. 6Average of three separate measures:
significant at the .01 level.
25
Executive Summary
For Fiscal Year 1992, the Administration is seeking $11.7 billion in
drug-related funding - a $5.3 billion (82 percent) increase since the
beginning of the Administration and a $1.1 billion (11 percent) increase
over Fiscal Year 1991. Additional detail on the National Drug Control
Budget is available in the National Drug Control Strategy Budget Sum-
mary.
The 1991 Strategy follows the same format as previous Strategies.
Seven sections (The Criminal Justice System: Drug Treatment: Educa-
tion, Community Action and the Workplace; International Initiatives:
Border Interdiction and Security: A Research Agenda: and Intelligence
and Information Management) present a thorough discussion of issues.
policies. and programs related to our national drug control activities.
Broad reviews of Federal drug program management issues, budget
proposals. High Intensity Drug Trafficking Areas. and recommended
model State legislation are included as appendices.
Highlights From the February 1991
National Drug Control Strategy
The Criminal Justice System
Expanded Joint Task Forces
$402 million in total funding for Organized Crime Drug En-
forcement Task Forces (OCDETFs) and $55 million for Drug En-
forcement Administration (DEA) State and local task forces (in-
creases of 20 percent and 25 percent compared to FY 1991
respectively).
Over 400 new Federal agents and attorneys added to the
OCDETF program.
Continued High Priority to Domestic Marijuana Eradication
Programs
Nearly $90 million for Federal agency efforts to eliminate mari-
juana on Federal lands.
$15 million in DEA funding. training. and investigative support
to local government efforts.
26
Executive Summary
Additional DEA and FBI Agents
134 more DEA agents and 44 more FBI agents than this year,
exclusive of those added through OCDETFs.
Expanded Federal Prison Capacity
Funding for over 2,500 drug-related new beds in the Federal
prison system in Fiscal Year 1992.
50,000 total beds (drug and nondrug) under design, construc-
tion. or in the planning stage in the Federal prison system
through 1996.
Expanded Resources for Federal Money Laundering Investigations
An increase of 102 positions (85 special agent positions) and
$8.8 million for the Internal Revenue Service's OCDETF pro-
gram and an additional $1.6 million to expand the intelligence
information systems of the Financial Crimes Enforcement
Network.
Proposed Legislation
Drug Testing - condition receipt of Federal criminal justice
funds upon States adopting drug testing programs in their
criminal justice systems.
Deporting Aliens - streamline exclusion of deportation proce-
dures by eliminating some administrative avenues by appeal
while fully maintaining the judicial appeals process.
Death Penalty - make the death penalty available in cases in-
volving three additional categories of drug offenders: major
drug kingpins: drug kingpins who attempt to kill in order to
obstruct justice: and Federal drug felons whose offense results
in death.
Drug Treatment
Expanded Treatment System Capacity
$100 million increase in Federal support for treatment capacity,
enabling 200,000 more people to receive treatment.
Explore use of "treatment voucher" experiments, which allow
addicts to be treated at private facilities.
27
Treatment Campuses to offer a variety of treatment approaches,
enhanced treatment capacity, improved treatment quality. and
the opportunity to evaluate and compare the efficiency of differ-
ent treatment methods.
Approximately $119 million for treatment programs directed at
priority populations such as adolescents, pregnant/postpartum
women and their children. and drug users risking or suffering
from HIV/AIDS.
$21 million increase in funding for treating Federal arrestees,
prisoners. probationers, and those on post-incarceration super-
vised release (a 36 percent increase over 1991).
Improved Quality of Treatment
Development and testing of promising treatment strategies.
Evaluation of current treatment methods to see what works.
Continued research on the effects of drugs on infants and preg-
nant women.
Assistance to States in setting and meeting standards of treat-
ment quality and improving treatment for the priority popula-
tions noted above.
Proposed Legislation
Maintenance of Effort . ensure that States receiving funds from
the Alcohol. Drug Abuse, and Mental Health Services (ADMS)
block grant program do not reduce their own drug-related fund-
ing below the average amount of such expenditures for the pre-
ceding two years.
State Treatment and Prevention Plan - condition the receipt of
Federal treatment funds on a State's development and implem-
entation of a coordinated, statewide treatment and prevention
plan.
Education, Community Action, and the
Workplace
Community Drug Prevention
$114 million in Community Partnership Grants to assist com-
munities in developing comprehensive prevention strategies to
address drug and alcohol problems - a 14 percent increase
over 1991.
28
Executive Summary
$165 million for HUD's Public Housing Drug Elimination Grant
program - a 10 percent increase over 1991.
Protection for Children
Expanded efforts to develop approaches that provide havens for
children of addicts.
Training for criminal justice officials and social workers. child
care workers, and foster parents who deal with addicts and
their children.
Drug-Free Schools
Nearly $500 million to improve drug education in classrooms.
Drug-Free Workplace
Continued cooperation with the private sector to develop drug-
free workplace programs. including information dissemination
and research to help employees and employers understand
better the impact of drug use in the workplace.
Continued efforts to achieve a fully implemented drug program
- including a drug testing plan - in every Federal agency.
Proposed Legislation
Lab Accreditation - seek high-quality drug testing programs by
ensuring that there are high standards of confidentiality and
accuracy.
International Initiatives
Expanded International Efforts
$125 million increase in military. law enforcement. and eco-
nomic assistance to Colombia, Peru, and Bolivia.
Continued diplomatic initiatives to increase hemispheric trade,
improve regional and global mechanisms for money laundering
and precursor chemical control. and launch joint demand
reduction efforts overseas.
29
Executive Summary
Increased Assistance to Mexico
Continued support of Mexican efforts against drug production
and trafficking. particularly along the U.S. Southwest Border.
Potential Source and Transit Countries
Assistance to potential transit countries in developing their own
intelligence capabilities and their ability to act on shared intelli-
gence.
Encouragement to drug producer and transit countries to
strengthen their laws. legal institutions, and programs to ap-
prehend and bring drug traffickers and drug money launderers
to justice.
Strengthened Financial Crimes Enforcement
Continued priority targeting of money laundering and other
drug-related financial crimes through the Department of the
Treasury's Financial Crimes Enforcement Network (FinCEN)
and the multi-agency Drug-Related Financial Crimes Policy
Group.
Improved intelligence on financial activities of drug traffickers,
investigation of suspected money launderers, achieving effective
regulation at the Federal and State levels, and promoting inter-
national cooperation.
Border Interdiction and Security
Enhanced Interdiction Activities
Improved automated data processing programs at Customs,
INS. and the Coast Guard.
Application of innovative technologies from Federal laboratories
and private industry to various interdiction problems including
detection of concealed drugs. control of movements across our
borders, and enhanced data collection and information process-
ing.
Additional sanctions for pilots who violate flight planning. entry
notification, or border clearance rules. and additional legislation
making it a criminal offense to refuse orders of Federal authori-
ties to land an aircraft or bring-to a vessel.
30
Executive Summary
Continued vigorous enforcement of laws and pursuit of interna-
tional cooperation to halt illegal diversion of precursor chemi-
cals, weapons. and explosives to drug traffickers.
Strengthened law enforcement activities along our Southwest
Border.
A Research Agenda
Science and Technology
Creation of a Counternarcotics Technology Assessment Center
within the ONDCP to establish drug-related research and devel-
opment priorities and to plan for the acquisition and use of ad-
vanced drug law enforcement technologies by Federal agencies.
Upgraded ability of Federal law enforcement agencies to store.
retrieve, and manipulate information to understand drug traf-
ficking networks better and to attack them more effectively.
Improved Data Collection and Evaluation
Improved information systems that measure our national objec-
tives: expanded treatment system data; and intensified treat-
ment and prevention evaluation.
Quick response and target surveys to provide up-to-date and
responsive information for policy use.
Biomedical and Behavioral Research
Enhance NIDA's strategic planning process to address the
research needs identified in previous Strategies.
Further identify the neural mechanisms by which cocaine oper-
ates, and develop medications that can block cocaine euphoria
and relieve cocaine cravings.
Find effective means of persuading drug users, especially intra-
venous drug users, to enter treatment.
Support research to define quality treatment and desirable out-
comes for clients. identify determinants of quality treatment,
and develop accountability standards for treatment delivery.
31
Executive Summary
Intelligence and Information Management
Law Enforcement Drug Intelligence Council
Establishment of a Law Enforcement Drug Intelligence Council
to coordinate development of drug intelligence collection and
analysis requirements. The Administration will also seek ways
to accomplish National Drug Intelligence Center missions.
High Intensity Drug Trafficking Areas
Five Areas Designated as HIDTAs
Continued support to the five areas designated as High Inten-
sity Drug Trafficking Areas (HIDTAs) in the 1990 Strategy: New
York City, Miami. Houston. Los Angeles. and the Southwest
Border.
$50 million will support the ongoing Federal program in Fiscal
Year 1992.
In addition to the appropriation for HIDTA activities described
above. $1.5 billion for other drug-related programs in the
HIDTA areas in Fiscal Year 1992, up from $1.3 billion in 1991.
32
HIGHLIGHTS FROM
THE PRESIDENT'S FISCAL YEAR 1992 BUDGET
RELATED TO THE NATIONAL EDUCATION GOALS
The following section is adapted from the Budget of the United States Govern-
ment: Fiscal Year 1992 which is issued by the Office of Management and Budget.
The President's Fiscal Year (FY) 1992 budget reflects the Administration's
ongoing commitment to provide resources for priority areas in education as
identified in the Joint Statement of the President and the Governors from the
Education Summit (Appendix B) and that support the national education goals.
Even under current budget constraints, the President's budget includes sig-
nificant increases to help prepare children for school, to enhance research
and demonstration of "what works," and to improve mathematics and science
education.
As announced in his State of the Union Address on January 29, 1991,
President Bush also proposes:
A new Education Excellence Act (see initiatives under specific goals) which
is designed to assist states and localities in restructuring efforts; and
To select at least $15 billion in programs and turn them over to the states
in a single consolidated grant for flexible management by the states.
The items below reflect budget proposals in key education-related programs in
the Department of Education and the Departments of Agriculture, Health and
Human Services, Labor, and other Federal departments and agencies.
GOAL 1 - SCHOOL READINESS
Head Start. The budget requests a total of $2.05 billion for Head Start
in the Department of Health and Human Services, $100 million above
1991. Under the Bush Administration, funding for Head Start has risen
from $1.24 billion to $2.05 billion. an increase of 66 percent. This
will allow 630,000 poor and disabled youngsters to participate.
Special Supplemental Food Program for Women. Infants. and Children
(WIC). The budget requests a total of $2.57 billion for the WIC program in
the U.S. Department of Agriculture, a 9.5 percent increase ($223 million)
over 1991. This will allow virtually all eligible infants and pregnant women
to be served as well as provide additional funds for one- and two-year
olds.
Child Care and Development Block Grants. The budget requests $745
million for the first Federal grant program to require that parents be given
the option of receiving a certificate which can be used to select the child
care of their choice. States will use 25 percent of the grant to increase the
availability and quality of before- and after-school and early childhood
development programs.
34
Infant Mortality. The budget requests a $676 million increase (9 percent
over 1991) to help reduce infant mortality. prematurity, and low birth-
weight. This includes a new $171 million initiative to expand and improve
early and regular prenatal care in ten cities with exceptionally high infant
mortality rates.
Immunizations. The budget proposes to increase categorical grants by $40
million, an 18 percent increase over the 1991 enacted level.
Preschool Services to Children with Disabilities. The budget requests $296
million for preschool services to children with disabilities to provide
services for an estimated 360,000 three- to five-year-old children. An
additional $129 million is requested to support state systems to identify
and arrange services for handicapped infants and their families.
Additional requests to help prepare children for school include:
- almost $10 billion for new and expanded refundable tax credits to low-
income working families with children:
- $300 million for new child care grants for families at risk of welfare
dependency:
- $124 million in the Department of Health and Human Services for
research and demonstrations to increase the efficiency and effectiveness
of social and support services for children at risk: and
- $145 million for biomedical research through the National Institute
on Child Health and Human Development to expand knowledge and im-
prove treatment of diseases afflicting children, including pediatric AIDS,
Sudden Infant Death Syndrome, and childhood accidents and injuries.
GOAL 2 - SCHOOL COMPLETION
Dropout Demonstrations. The budget requests $29 million in the
Department of Education to continue a set of dropout demonstration
projects designed to provide information on strategies that are most
successful in preventing children at risk from dropping out of school
and in encouraging those who have left to return.
Job Corps. The budget requests $887 million for the Job Corps program in
the Department of Labor which annually provides basic education and
vocational skills training for about 65,000 youth at risk.
Youth Education and Job Training Program. Approximately $1.3 billion is
requested for the Department of Labor's new year-round youth education
and job training program which will offer comprehensive services and
incentives to assist severely disadvantaged youth and provide incentives
to communities to better coordinate programs.
35
Youth Opportunities Unlimited (YOU). An additional $25 million is
requested for a new Youth Opportunities Unlimited (YOU) demonstration
program which will also target severely disadvantaged youth.
GOAL 3 - STUDENT ACHIEVEMENT AND CITIZENSHIP
Educational Excellence Act. The President's Fiscal Year 1992 budget
requests $690 million for a new Educational Excellence Act to assist states
in working toward the national education goals.
- Education Certificate Program Support Fund. This $200 million
initiative will provide incentive grants to local school districts with
qualified certificate programs that enhance parental choice. Funds will
be available to districts with Federal compensatory education programs
for the disadvantaged that also have operational certificate programs.
Qualified programs will. at a minimum. provide for public and private
school choice. Districts that receive funds will be able to use them for a
range of educational services.
- Education Choice Initiatives. Additional choice initiatives include
$30 for demonstration projects; legislation to permit state's to direct up
to 50 percent of the Department of Education's block grant funds to
support choice initiatives; and a program to support magnet schools. In
addition. the budget provides continuing support for the Department of
Education's new Center for Choice in Education.
- Flexibility/Accountability Initiative. An initiative designed to further the
President's and the Governors' commitment to seek increased flexibility
in Federal funding in exchange for enhanced accountability.
- Alternative Certification Initiative. An initiative to reward states with
alternative methods for certifying and training teachers and school
administrators.
- Rewarding Excellent Teachers and Training School Administrators.
Additional initiatives to recognize and reward teachers and to train
school administrators.
An additional initiative is listed under Goal 4.
Teacher Training Partnerships. The budget includes $20 million for
a new program to establish partnerships between school districts and
universities to provide school-based teacher training. Programs in the
Department of Education, the National Science Foundation, the Depart-
ment of Energy. and the National Endowment for the Humanities also
support the training of new teachers and assist in upgrading skills of
current teachers.
36
Compensatory Education. The budget requests $6.4 billion. an increase of
$149 million. for current programs to improve the skills of over five million
educationally disadvantaged children. Emphasis will be placed on
improving the performance of the lowest achieving children.
Children with Disabilities. The budget, requests $2.7 billion. an increase of
$114 million over 1991, to assist four million children with disabilities.
Assessment and Statistics. The budget includes $80 million to support the
development of new techniques for student assessment, the expansion of
the National Assessment of Educational Progress (NAEP). and U.S.
participation in international assessments.
GOAL 4 - MATHEMATICS AND SCIENCE ACHIEVEMENT
The budget includes a $661 million -- a 28 percent increase over 1991
funding -- for precollege mathematics and science education programs.
Overall. $1.9 billion is requested for all levels of mathematics and science
education, a 13 percent increase over 1991, across the Departments of
Agriculture, Commerce, Defense, Education, Energy. Health and Human
Services, Interior: and the Environmental Protection Agency, National
Aeronautics and Space Administration, and National Science Foundation.
Highlights include:
Pre-college
Performance-based Mathematics and Science Education Initiative Grants.
The Educational Excellence Act includes $40 million in the Department of
Education for new grants to school districts to stimulate improved student
performance in mathematics and science. Districts showing significant
increases in student performance in mathematics and science would
qualify for a grant and could use the funds for any purpose that will
effectively promote continued improvements in mathematics and science
learning.
Teacher Preparation. The budget requests $359 million to support
workshops, courses, summer research appointments, partnerships with
national research laboratories, equipment loans, and other programs.
Curriculum Reform. Dissemination. and Research and Development. The
budget requests $137 million for research to develop and disseminate
new curricula and standards, and new educational technologies to enhance
student learning. Funds will support: partnerships between publishers
and schools systems; academic curriculum development teams; improve-
ments in the use of computers and laser videodiscs in the classroom;
and a diffusion network to disseminate information about exemplary
programs.
37
Reform Incentives. The budget requests $58 million to support and pro-
vide incentives for education reform. including state adoption of effec-
tive teacher preparation and enhancement, curriculum and research,
assessment, standards, and student incentive programs.
Student Incentives and Opportunities. To stimulate curiosity among
elementary and secondary students about mathematics and science, $48
million is included in the budget for research experiences at colleges and
universities, research facilities, science fairs, direct student finan-
ctal assistance, and other programs.
Undergraduate and Graduate
Curriculum Development. The budget requests $124 million to support
activities to help undergraduate curricula and laboratories keep pace
with changes in scientific research.
Faculty Development and Enhancement. The budget requests $42 million
to support research experiences for undergraduate faculty at leading
research universities and national laboratories, workshops, conferences,
and courses.
Student Opportunities and Support. In addition to the $20 billion in
student financial aid generated by the broad-based programs of the Higher
Education Act. the budget provides $230 million for activities focused on
students in science and engineering fields.
Graduate Training. The budget includes $803 million for graduate
education.
GOAL 5 - LITERACY AND LIFELONG LEARNING
Adult Literacy. The budget provides $286 million for Department of
Education literacy activities, including $251 million for Adult Education Act
programs. The Educational Excellence Act will include initiatives designed
to improve adult literacy.
Job Training Partnership Act (JTPA). The budget includes $1.1 billion for a
new, more effectively targeted JTPA program that will provide basic skills
and occupational training. job placement, and support services to more
than 400,000 disadvantaged adults.
Vocational Education. The budget includes $1 billion for the support of
vocational education, with emphasis on the integration of academic and
job-related skills at the secondary level and improved program
accountability.
38
Pell Grants. The budget requests $5.8 billion. an increase of
$401 million or a 7 percent increase over 1991. The Administration's
proposals for reauthorization of the Higher Education Act would raise the
maximum Pell award to $3,700. an increase of $1,300 or 54 percent over
the 1991 level. The average would be raised to $1,909, an increase of $425
or 29 percent over the 1991 level.
Presidential Achievement Scholarships. The budget requests $170 million
for supplementary awards for Pell Grant recipients based on superior high
school and college performance. These awards would, for the first time,
relate recognition of merit to the Pell grant program.
Support Services to Assist Low-income Students. The budget includes
$395 million, an increase of 18 percent over 1991, for support services to
help prepare low-income and minority elementary and secondary students
for higher education and to help such students stay in higher education.
Guaranteed Student Loans. The Administration is proposing legislative
improvements to restore integrity to the guaranteed student loan program
which would reduce administrative costs and reduce government risk. If
analysis now underway demonstrates its feasibility and cost effectiveness,
the Administration may later propose replacing the guaranteed loan
structure with a Federal direct loan program.
GOAL 6 - SAFE, DISCIPLINED AND DRUG-FREE SCHOOLS
Drug Free Schools and Communities Act. The budget requests $632
million for the Drug-Free Schools and Communities Act.
Emergency Grants Program. Included in the above request is $50 million
for Emergency Drug Grants in the Department of Education, a $25 million
increase over 1991. This initiative was a proposal in the President's
original Education Excellence Act.
Formula Grants for States and Communities. The budget includes $512
for formula grants in the Department of Health and Human Services. This
represents an 83 percent increase since President Bush came into office.
Community Partnership and High Risk Youth Grants. The budget seeks an
additional $15 million for Community Partnership Grants and $4 million
for High Risk Youth Grants.
Models to Assist Children of Addicts. The budget includes $20 million to
expand efforts to develop models for approaches that provide a safe haven
for children of addicts and $16 million to support demonstration projects
to develop strategies to prevent abandonment of infants and to provide care
for those that are abandoned or exposed to drugs in utero.
39
Research and Evaluation of "What Works." The budget includes $166 to
conduct research and evaluation of "what works" in drug prevention.
Indian Drug Education. The budget requests $4 million for Indian drug
education and $44 million for drug treatment programs in the Indian
Health Service.
40
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release
February 13, 1991
FACT SHEET
THE SURFACE TRANSPORTATION ASSISTANCE ACT OF 1991
President Bush today announced transmittal to Congress of the
Administration's Surface Transportation Assistance Act of 1991.
The bill reflects the President's determination to strengthen
significantly the nation's surface transportation infrastructure
by increasing the federal investment in transportation and
building a stronger partnership with the states.
The Administration's bill proposes a $105.4 billion investment
over the next five years in highways, mass transit and highway
safety programs. The proposal represents a new vision for
surface transportation to meet the needs of an increasingly
mobile society.
GOALS OF THE BILL
The bill is an important part of what the President described in
his State of the Union address as "a forward-looking plan of
action" to provide "long-term investments for the next American
century." It implements basic goals outlined by Transportation
Secretary Samuel Skinner and the Administration's National
Transportation Policy, released in March 1990. The bill would:
1.
Increase infrastructure investment. A strong surface
transportation system is critical to ensuring the mobility
of our nation and the competitiveness of our economy. The
bill proposes to increase spending on highways from $14.6
billion in FY 1991 to $20.3 billion in FY 1996 -- a 39
percent increase over the next five years. Mass transit
capital funding will increase by 25 percent to $2.9 billion.
The bill also contains new incentives for private sector
investment in toll roads.
2.
Restructure the federal highway system. The 43,000 mile
Interstate Highway System has united America and stimulated
our nation's growth. Now that the system is over 99 percent
complete, the President is proposing a new 150,000 mile
National Highway System. This system will include the
present Interstate System and other roads of national
significance. In addition, the proposal consolidates
41
several present funding categories inco the new Urban and
Rural Program. The present Bridge Program will be retained
with substantially increased funding. This new structure
will improve program efficiency and better focus federal
funds on our nation's most important highways.
3.
Provide greater flexibility to states and local governments.
The proposal strengthens the federal, state and local
partnership. States and local governments will have far
greater discretion in selecting projects for funding and
will participate in designating the new National Highway
System. They will, for the first time, have broad
flexibility to use funds for either highways or mass
transit. New requirements for modern management systems and
performance-based accountability at the state and local
level will ensure cost-effective management of our
transportation resources.
4.
Assure a safe and efficient system. For the transportation
system to serve the needs of America, it must be safe and
efficient. The President's proposal meets both needs. The
proposal increases funding for highway safety by 34 percent
over the next five years, and provides incentives for states
to adopt tough anti-drunk driving measures and promote
increased seat belt use. The proposal will also call for
the elimination of duplicative and costly state regulations
governing the rates and services of interstate motor
carriers.
The President's bill is divided into three main parts: the
Federal-aid Highway Program, the Mass Transit Program and the
Highway Safety Program. These three programs are described
below.
THE MAJOR PROGRAMS
I. THE FEDERAL-AID HIGHWAY PROGRAM
The bill proposes to invest $87.7 billion in highways over the
next five years. It restructures the federal highway system into
three main components:
O
The new National Highway System will encompass some 150,000
miles, including the existing Interstate System and other
principal arterial routes. Funding for the National Highway
System (NHS) will increase from $7.7 billion in 1992 to
$11.2 billion in 1996.
The NHS will reflect the major demographic and travel
changes that have occurred since the Interstate routes were
designated. It will be an interconnected system of
42
principal arterial routes serving major population centers,
rural areas, ports, airports and international border
crossings. Designation of the routes will be made through
consultation with state and local government officials. The
federal matching share will be 75 percent, except for
repairing or improving the operation of Interstate highways,
which will be at 90 percent.
The new Urban and Rural Program will consolidate several
existing programs and provide funding for approximately
700,000 miles of non-local roads. Funding for the program
will be increased from $3.9 billion in 1992 to $5.7 billion
in 1996. States will have greater flexibility in selecting
projects for funding within this program and may use federal
funds for either highway or mass transit capital projects.
The federal matching share will be 60 percent.
The Bridge Program will provide funding for the
rehabilitation and replacement of existing bridges. Funding
will increase by 50 percent, going from $1.8 billion in 1992
to $2.8 billion in 1996. The federal matching share will be
75 percent.
In addition, the proposal will remove the restriction on the use
of federal funds for the construction and improvement of toll
roads and will encourage private participation in the
construction and management of toll roads. The federal share for
toll projects will be up to 35 percent. To reduce traffic
congestion and improve air quality, the Secretary of
Transportation may permit, on an experimental basis, large cities
with serious air quality problems to impose rush hour fees on
drivers.
The bill also contains proposals to encourage new technologies
including:
-- state of the art toll collection systems, which can
electronically "read" a car and register a toll charge
without requiring the car to stop; and
-- intelligent vehicle highway systems, often referred to as
"smart cars" and "smart highways," which integrate the
vehicle, the driver, and the highway through electronic
warning and vehicle/traffic control systems.
II. THE MASS TRANSIT PROGRAM
The mass transit program consists of two major components: a
formula program that provides grants to transit systems and a
discretionary program that assists with major construction
projects. The discretionary program will include the most cost
43
effective new construction projects, funding for innovative
approaches to solving transportation problems and activities
addressing the needs of users with disabilities.
The entire mass transit program will be funded from the Mass
Transit Account of the Highway Trust Fund. This will more
equitably distribute user fee revenues and will provide state and
local decision-makers with a more predictable and stable federal
funding source.
The bill proposes a shift in federal support, from operating
subsidies to more capital spending. The bill also encourages
maintenance of existing transit fleets.
Consistent with the Administration's commitment to research and
new technology, the bill provides for increased and flexible
funding for research and proposes a new and expanded partnership
with the transit community to foster innovative solutions to
transit problems.
The proposed five-year funding for mass transit programs totals
$16.3 billion. The federal matching share is 60 percent for the
formula grant program, 50 percent for the discretionary program
and 75 percent for planning grants.
III. HIGHWAY SAFETY PROGRAMS
The bill places an increased emphasis on safety. Funding for
highway safety programs financed by the Federal Highway
Administration (FHWA) and the National Highway Traffic Safety
Administration (NHTSA) will be increased from $355 million in
1991 to $436 million in 1992 and to $476 million in 1996. Five-
year funding for highway safety programs will total $2.3 billion.
These programs consist primarily of grants to the states in
support of safety initiatives. All NHTSA programs will be funded
from the Highway Account of the Highway Trust Fund. NHTSA's
current highway safety grant program will continue, with the
federal share at 60 percent. Safety bonuses from existing NHTSA
and FHWA programs will be provided to states that satisfy certain
criteria relating to their highway safety programs, especially an
aggressive effort to remove drunk drivers from our highways.
###
44
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release
February 20, 1991
FACT SHEET:
THE NATIONAL ENERGY STRATEGY
President Bush today proposed a comprehensive and balanced
strategy for an energy future that is secure, efficient, and
environmentally sound. The National Energy Strategy is designed
to diversify U.S. sources of energy supplies and offer more
efficiency and flexibility in the way energy is consumed.
The National Energy Strategy is the product of twenty months of
public recommendations and Administration consideration. In
developing this strategy, the Department of Energy conducted
eighteen public hearings and received thousands of written
comments.
With the benefit of this input, the Administration analyzed the
full array of energy options and has developed a strategy that
will support continued economic growth, increase energy
efficiency, protect the environment, and reduce America's
vulnerability to energy supply disruptions.
The Strategy is consistent with the Administration's policy of
reliance on market forces. Over the next two decades, the
Strategy will make the U.S. more energy efficient and enhance our
competitiveness without resorting to heavy-handed regulations,
taxes, or import fees that can hurt consumers and cost Americans
jobs.
The Strategy acknowledges that the U.S. is part of an energy
interdependent world. It is not in our interest to adopt
measures that may reduce imports, but inflict severe economic or
environmental damage. Therefore, the National Energy Strategy
balances economic, environmental and energy security objectives.
Over the next twenty years, this balanced approach to production
and conservation will power a larger U.S. economy while using
less energy. At the same time, the U.S. will produce more of the
energy it uses. The National Energy Strategy by the year 2010
will:
45
reduce domestic oil demand by 3.4 million barrels per day,
below projected levels.
increase domestic oil production by 3.8 million barrels per
day above projected levels.
increase the electricity produced from renewable sources,
such as solar, hydropower, and geothermal by 16 percent.
raise the use of alternative transportation fuels, such as
compressed natural gas, ethanol and methanol, thereby
reducing the need for approximately 2.0 million barrels of
oil per day.
reduce growth in electricity demand by over 10 percent, by
unlocking market forces through elimination of costly
regulation, thereby saving consumers approximately $27
billion in electricity costs in the year 2010.
The Strategy will also benefit the environment. Proposals to
increase the use of clean coal technology, natural gas, and
nuclear energy to generate electricity, as well as the
development of new energy efficient technologies will:
hold U.S. emissions of greenhouse gases by the year 2000 at
or below 1990 levels.
improve air quality by reducing emissions of pollutants that
contribute to acid rain and smog.
mitigate solid waste problems by reducing coal ash waste 25
million tons per year, and by lowering coal cleaning wastes
by 50 million tons per year.
The Strategy incorporates and complements a number of Bush
Administration initiatives. These include (1) the 1990 revisions
to the Clean Air Act; (2) natural gas well-head decontrol
legislation; (3) incentives provided to domestic renewable and
fossil energy producers in fiscal year 1991 budget agreement; (4)
the energy research and development initiatives announced in the
President's FY 92 budget; (5) the Administration's domestic
energy supply and demand measures adopted in response to the
Iraqi oil disruption; and (6) the Administration's science and
mathematics education initiatives.
To meet the challenges ahead, the National Energy Strategy calls
on Federal, State, and local governments to work together to
encourage energy conservation and new energy production through
reduced regulation and streamlined licencing procedures,
particularly in the natural gas, oil and gas pipeline and
hydropower areas. At the Federal level, the Administration
46
intends to lead by improving the energy efficiency of federal
buildings, federal housing and accelerating the purchase of
alternative fuel vehicles for the federal fleet.
INCREASING ENERGY AND ECONOMIC EFFICIENCY
Transportation Efficiency
Highlights
The National Energy Strategy will increase transportation
efficiency by:
requiring centrally-fueled fleets to purchase vehicles
capable of using alternative fuels, such as compressed
natural gas, ethanol and methanol.
increasing Federal purchases of alternative fuel vehicles.
increasing the Corporate Average Fuel Economy credit that
automakers currently receive for producing alternative fuel
vehicles.
promoting State and local government and private-sector
programs that offer a "bounty" for scrapping older, high
pollution, gas guzzling cars.
increasing use of public transit, vanpooling and ridesharing
by raising the limit on tax-free commuter subsidies that
employers can give employees.
proposing to invest a Federal share of up to $150 million
from FY 92 to FY 96 in a new research program with the
automobile industry to accelerate the development of
electric vehicles.
accelerating R&D in new energy efficient technologies,
including high performance aircraft engines, vehicle
propulsion systems, MAGLEV and high-speed rail and by widely
implementing Intelligent Vehicle/Highway systems.
These measures are projected to save the equivalent of 3.0
million barrels of oil per day by 2010 without the harmful
effects of higher taxes, oil import fees, or unjustifiable CAFE
levels. The Administration has commissioned an independent study
by the National Academy of Sciences on feasible fuel economy
levels. The number of passenger miles driven is estimated to
increase by 60 percent by 2010; however, under the Strategy the
volume of gasoline purchased by consumers is projected to fall by
13 percent.
47
Electricity Generation and Efficiency
Highlights
The National Energy Strategy will raise electricity efficiency by
removing barriers to greater competition that currently raise the
cost of electricity and by encouraging energy efficient
investments by utilities and consumers:
o
amending the Public Utility Holding Company Act (PUHCA) to
allow power suppliers to build, own and operate power
facilities in more than one area.
supporting state and utility efforts to invest in energy
efficiency as an alternative to power plant additions
(Integrated Resource Planning).
reforming the Public Utility Regulatory Policies Act (PURPA)
to modify size and fuel use restrictions for small power
producers.
providing tax-free treatment of utility discounts on
consumers' electricity bills for efficiency investments.
expanding access to electricity transmission for utility and
non-utility wholesale buyers and sellers.
reducing Federal subsidies for the debt of Federal Power
Marketing Administrations.
These measures are projected to reduce electricity demand growth
by over 10 percent in 2010 and save consumers $27 billion in
electricity costs in the year 2010.
Residential and Commercial Building Efficiency
Highlights
The National Energy Strategy will raise efficiency levels for
residential and commercial buildings by:
accelerating R&D for building technologies by increasing
Federal funding to $55 million in FY 92, a 22 percent
increase.
encouraging providers of home mortgages to share energy
efficiency ratings with prospective home buyers.
setting cost-effective energy efficiency standards for
appliances and equipment as provided under current law.
expanding energy efficiency labeling programs to include
48
certain other equipment including light bulbs.
develop and encourage the use of cost-effective building
efficiency standards.
These measures will reduce building energy demand. The amount of
floor space in malls, office buildings, and other commercial
building is projected to grow by 57 percent, but the energy
needed to heat, cool, and light that space will grow by less than
half that amount. In the year 2010, the U.S. is forecast to have
24 percent more occupied housing than today, but will use only 10
percent more energy to service that housing.
Industrial Energy Efficiency
Highlights
The National Energy Strategy will raise industrial energy
efficiency by:
increasing research and development for industrial waste
reduction and recycling.
encouraging the use of industrial energy audits at the state
and local level.
modifying existing regulation where needed to ensure that
the use of waste minimization technologies is not
discouraged.
By the year 2010, industrial output is projected to grow 80
percent; yet if the Strategy is implemented, the United States is
projected to use only 27 percent more energy to power our
factories, plants, mills, and similar facilities. In addition,
the negative environmental impacts of industry will decline.
SECURING FUTURE ENERGY SUPPLIES
Securing Petroleum Supplies
Highlights
The National Energy Strategy will reduce our vulnerability to oil
supply disruptions by:
encouraging oil production in other countries outside the
Persian Gulf.
expanding worldwide strategic petroleum stocks available to
offset future oil supply disruptions, including our
49
Strategic Petroleum Reserve.
expanding joint Federal/private investment in advanced oil
recovery technology by increasing Federal funding in FY 92
by 24 percent to $52 million.
providing environmentally responsible access to areas of the
coastal plain of ANWR and resolving technical and regulatory
barriers to greater Alaska North Slope oil development.
allowing environmentally responsible access to Outer
Continental Shelf areas, consistent with the President's
decision last year.
deregulating oil pipelines in competitive markets.
increasing production of California heavy oil and allowing
access to export markets.
evaluating the refining sector's ability to meet future
demand for a variety of liquid fuels.
These measures will increase domestic oil production by up to 3.8
million barrels per day in 2010, and raise economically
recoverable resources by 25 to 70 billion barrels.
Securing Natural Gas Supplies
Highlights
The National Energy Strategy will promote domestic and
international natural gas production by:
streamlining gas pipeline construction reviews and
developing more efficient environmental review procedures.
deregulating pipeline sales rates in competitive markets
and reforming gas pipeline rate designs.
supporting environmentally responsible exploration and
development in certain offshore areas, consistent
with the President's OCS decision last year.
improving third party access to gas pipeline transportation
services.
eliminating certain import/export regulations on natural
gas.
expanding use of natural gas in alternative fuel vehicles.
These measures are projected to save up to 600,000 barrels of oil
50
per day by 1995, and increase natural gas consumption by almost 1
trillion cubic feet in 2000. Residential consumers are projected
to save $200 million in 2000 and $850 million in 2010 in reduced
costs.
Securing Future Coal Supplies
Highlights
The National Energy Strategy will promote the use and export of
clean coal resources by:
accelerating use of clean coal technology through Federal
and State regulatory incentives.
clarifying the applicability of the Clean Air Act to
refurbished power plants.
creating favorable export markets for U.S. coal and coal-
burning technologies.
removing barriers to constructing coal slurry pipelines.
pursuing research and development on environmental
protection during mining.
These measures will allow the U.S. coal industry to capture a
major share of the growing international coal and coal technology
markets, while improving our ability to more cleanly and
efficiently utilize the large U.S. supplies of low cost coal.
Securing Nuclear Power
Highlights
The National Energy Strategy will promote the ability of nuclear
power to meet electricity needs by:
reforming and streamlining the nuclear plant licensing
process, as well as the process for siting and licensing of
waste facilities.
developing standardized designs for "next generation" power
plants, so that the licensing process is not delayed and
financial risks are reduced.
accelerating research and development of "next generation,"
passively safe design nuclear reactors.
These measures will enhance the ability of nuclear technology to
meet electricity needs by reducing costs and increasing safety
and reliability. Nuclear power production could increase by 10
51
percent over levels otherwise projected for the year 2010.
Securing Renewable Resources
Highlights
The National Energy Strategy will promote the development and use
of renewable resources by:
extending the current investment tax credit for renewable
energy technologies through 1992.
streamlining hydropower licensing processes at existing dams
and eliminating unwarranted Federal regulation of small
hydropower projects.
amending PURPA to encourage renewable power production by
small power producers.
supporting conversion of municipal solid waste to energy as
part of a comprehensive waste management strategy.
developing cost-competitive liquid fuels from non-food crops
with new research and development support.
These measures will increase electricity generation from
renewables by 16 percent in 2010. In addition, they would
reverse the losses of hydropower generation capacity and increase
fuel and technology choices for transportation.
Securing Fusion Technology
The National Energy Strategy will intensify international
collaboration in fusion research and focus investments in
magnetic and inertial confinement reactor concepts.
Through these efforts a demonstration plant could be developed by
2025 and an operating commercial plant could cost-effectively
supply power by 2040.
Enhancing Research and Development for Energy Security
The National Energy Strategy includes a major commitment to
advanced energy technology. The FY 92 budget includes $903
million, or 34 percent above 1991 levels, for increased
investments in support of National Energy Strategy research and
development initiatives.
To ensure that research and development efforts pursue useful
goals and result in ultimate commercialization of technologies,
these initiatives will utilize industry cost-sharing and will be
carried out as joint government-industry programs. In addition,
52
a national awards program will be created, offering prizes for
energy-related innovations that meet specific technological
challenges.
Major research initiatives include: advanced transportation
fuels from biomass, vehicle propulsion technologies, electric
vehicle technology, aeronautical technologies, high speed rail
and magnetic leviation, intelligent vehicle/highway systems,
telecommuting, air traffic control, advanced oil recovery
technologies, industrial technologies, and advanced light water
nuclear reactors concepts.
By 2030 these research and development initiatives could save
between 5 million and 8 million barrels per day of oil
equivalent.
ENERGY AND THE QUALITY OF AIR, LAND AND WATER
Highlights
The National Energy Strategy will enhance environmental quality
by:
increasing the use of natural gas, renewable energy sources,
and alternative fuels.
improving energy impact assessments in federal regulatory
proceedings.
developing model programs for energy facilities siting.
minimizing waste from energy production, transformation,
and use.
These measures, in conjunction with the Clean Air Act Amendments,
are projected to reduce sulphur dioxide emissions by 40 percent,
nitrogen oxides by 30 percent, and volatile organic compounds
emissions by 25 percent from projected levels by 2030. In
addition, they will improve the economics and efficiency of
environmental compliance, which currently costs over $100 billion
per year and is rising.
ENERGY AND THE GLOBAL ENVIRONMENT
The National Energy Strategy and previous Bush administration
actions, coupled with ongoing Federal research aimed at reducing
scientific uncertainty on the potential for global climate
change, will reduce greenhouse gas emissions and demonstrate U.S.
international leadership on this issue.
In 2000, U.S. greenhouse gas emissions are projected to be at or
below their 1990 levels, despite steady increases in U.S.
53
economic growth.
FORTIFYING FOUNDATIONS: Science and Engineering Research, Technology
Transfer, Science and Math Education
The National Energy Strategy will continue the administration's
commitment to science and engineering research, technology
transfer, and science and math education by:
increasing the Federal investment in the nation's basic
science research portfolio to over $12 billion in FY 92.
re-aligning Federal research and development priorities to
better serve National Energy Strategy goals.
ensuring the viability of world class U.S. facilities and
pursing international agreements to support high-cost
facilities.
increasing industry participation in research and
development and commercialization.
protecting intellectual property rights.
promoting technology exports.
promoting the Administration's commitment to math/science
education through, for example, strengthened curriculum;
Federal technical assistance and training for teachers; and
broadened public science literacy programs.
LEGISLATIVE PACKAGE
A legislative package to implement National Energy Strategy
measures that require statutory change will be transmitted to
Congress shortly. As an addition to that legislative package,
the Administration will propose bringing the Federal Energy
Regulatory Commission (FERC) into the Department of Energy.
54
THE WHITE HOUSE
Office of the Press Secretary
Embargoed for Release
February 27, 1991
Until 11:05 a.m. EST
Wednesday, February 27, 1991
FACT SHEET
EXPANDING CHOICE AND OPPORTUNITY
FOR INDIVIDUALS, FAMILIES, AND COMMUNITIES
In his State of the Union Address, the President said: "The
strength of democracy is not in bureaucracy. It is in the people
and their communities
We must return to families, communities,
counties, cities, states and institutions of every kind the power
to chart their own destiny, and the freedom and opportunity
provided by strong economic growth."
The Administration is committed to strengthening the power
and opportunity of individuals and families, to breaking down
barriers to independence and self-reliance wherever they exist,
and to providing hope to distressed communities.
This means giving people access to jobs and the ability to
make choices that will better their lives and the lives of their
families. People with access to housing, jobs, and quality
education have a stake in their community, and a greater
incentive to lead productive lives. More important, people with
economic opportunity have hope for the future -- an important and
powerful weapon against poverty and despair.
The Administration seeks to use numerous administrative,
regulatory, and budgetary means to expand economic opportunity
for low-income individuals. In addition to these continuing
efforts, the President today announced that he will seek
Congressional action to promote choice and opportunity on several
fronts:
1. educational choice;
2. educational flexibility;
3. homeownership for low-income persons;
4. enterprise zones;
5. anti-discrimination laws;
6. community opportunity areas;
7. the social security earnings test; and
8. anti-crime efforts.
Legislation, where required, will be transmitted to Congress in
the next several weeks to implement these proposals.
- more -
55
GIVING PARENTS AND STUDENTS CHOICE IN EDUCATION:
Choice programs provide parents the opportunity to select
the most appropriate school for their children -- based on
informed judgments about which school offers the best education.
Choice leads to healthy competition among schools by focusing on
proven educational quality as the way to attract students.
Clearly, parents should have the opportunity to send their
children to schools of their choice. Choice can lift the
performance and quality of all schools.
The President will propose a new Educational Excellence Act
which contains strategic initiatives to improve the learning
achievement of all Americans and to restructure the nation's
educational system. Initiatives in the Educational Excellence
Act will:
Stimulate fundamental reform and restructure our education
system through promoting educational choice and alternative
certification for teachers and principals.
Assist educators in their mission to improve student
performance by: rewarding schools that demonstrate improved
achievement among students; rewarding excellent teachers;
and promoting innovation in training school administrators.
Provide incentives to school districts to design and
implement innovative approaches to mathematics and science
education; enhance the endowments of Historically Black
Colleges and Universities; and contribute to improving
literacy.
PROVIDING EDUCATIONAL FLEXIBILITY IN RETURN FOR ACCOUNTABILITY:
Federal Departments and agencies administer hundreds of
separate programs that provide or support education services;
each has its own statutory and regulatory requirements. Program
requirements can impede the ability of local schools and
districts to provide the best possible education. Flexibility in
administering Federal education programs will allow Governors,
school administrators, teachers, service providers, parents, and
others in the community to work together to develop effective
education programs that meet the needs of all students,
particularly those students who are educationally disadvantaged.
- more -
56
The Educational Excellence Act of 1991 would promote local
control and innovation in education by providing increased
flexibility in the use of Federal funding in exchange for
enhanced accountability for results. The Administration's
bill will be guided by the following principles:
--
Flexibility should be linked to accountability for
improvements in educational outcomes.
--
Flexibility should result in delivering services to
current target populations in a more effective manner.
Flexibility should retain key protections in current
laws (e.g., protection of the disabled).
PROVIDING HOMEOWNERSHIP OPPORTUNITIES:
Low-income Americans have a greater stake in their
communities when they have the opportunity to own their own
homes. The HOPE (Homeownership and Opportunity for People
Everywhere) initiative is a new grant program to increase
homeownership opportunities. By offering residents greater
control and access to property, the HOPE program will instill
pride of ownership and enhance incentives for maintenance and
improvement. While HOPE was enacted into law last year, Congress
provided no funding for the program in Fiscal Year 1991.
o
The President has requested $500 million in Fiscal Year 1991
supplemental funding to start the HOPE program immediately.
The President's Budget also requests $1 billion in 1992 for
the new HOME program -- a housing block grant program
providing States and localities greater flexibility in
meeting the housing needs of their low-income residents,
with incentives for use of housing vouchers.
o
HOPE Grants will be made on a competitive basis to resident
management corporations, resident councils, cooperative
associations, non-profit organizations, cities and States,
and public and Indian housing authorities. Funding will
help participants design and execute their plans for
resident management and buyouts of public and assisted
housing.
O
The HOPE initiative also targets $258 million in 1992 for a
new "Shelter Plus Care" program to help the homeless. The
Shelter Plus Care program will link housing with the full
range of services needed by the homeless. The program will
combine shelter with the support services -- job training,
- more -
57
health care, and drug treatment -- that help people achieve
dignified and independent lives.
CREATING JOBS IN ENTERPRISE ZONES:
Enterprise zones will attack poverty by promoting investment
in economically distressed neighborhoods. Enterprise zones will
attract new seed capital for small business start-ups, create new
incentives for entrepreneurial risk-taking, and reduce high
effective tax rates on those moving to work from welfare.
O
The Enterprise Zone and Jobs-Creation Act of 1991 will
target tax incentives and regulatory relief to some of our
nation's most economically depressed areas.
The Secretary of Housing and Urban Development would
designate up to 50 (urban, rural, and Indian) enterprise
zones over a four year period. Designation will be based on
the level of distress, as well as on the nature and extent
of State and local efforts to improve living conditions and
to eliminate government burdens to economic activity.
Designation will be for a maximum of 24 years.
The legislation will provide tax incentives to attract seed
capital, stimulate employment, and increase the economic
return from work for the working poor:
--
Workers will be eligible for a 5 percent refundable tax
credit for the first $10,500 of wages earned in an
enterprise zone business. This will put up to $525
more income in the pockets of low-income workers. The
credit phases out between $20,000 and $25,000 of total
annual wages.
--
To spur investment, capital gains taxes will be
eliminated for gains on investment in tangible property
(e.g., buildings and equipment) used in a business
located in an enterprise zone for at least two years.
--
To encourage entrepreneurial risk-taking, individuals
will be permitted to expense investments in the capital
of corporations engaged in enterprise zone businesses.
This essentially provides an immediate write-off for
investments in enterprise zone businesses.
Corporations must have less than $5 million of total
assets. Expensing will be permitted up to $50,000
annually per investor, with a $250,000 lifetime limit.
- more -
58
The legislation would also give enterprise zone communities
priority for free trade area status. Such status would, for
example, allow a business in an enterprise zone to import
materials duty-free if the materials are used to manufacture
products for export to other countries.
Enterprise zones would reduce Federal tax revenues by $1.8
billion over five years.
STRENGTHENING AND ENFORCING ANTI-DISCRIMINATION LAWS:
A vital element in the effort to protect the civil rights of
all Americans is the vigorous enforcement of existing anti-
discrimination laws. Over the past two years, the Bush
Administration has moved aggressively to fight hate crimes and
combat discrimination in housing, voting, employment, and
education. A few examples:
Enactment of the Americans with Disabilities Act in July
1990 was one of the most important expansions of civil
rights protections in a quarter of a century. The
Administration is now pursuing swift implementation of the
landmark law.
The Department of Housing and Urban Development (HUD) is
aggressively enforcing the 1988 Fair Housing Amendments
which prohibit housing discrimination on the basis of race,
color, national origin, religion, sex, familial status, or
disability. The Bush Administration has resolved nearly
12,000 of the almost 16,000 fair housing cases.
In 1989, the Justice Department prosecuted more than twice
as many hate crimes cases as in any previous year. In 1990,
the Justice Department had a 100 percent success rate in
prosecuting hate crimes.
O
In 1990, the Department of Education received and resolved
more civil rights complaints than in any previous year of
its history -- and in record time.
The largest settlements in the history of the Department of
Labor's Federal Contract Compliance cases have been achieved
during the Bush Administration. A single case involving
employment discrimination against women and minorities
resulted in a payment of $14 million. In another case, a
back pay settlement of $3.5 million will benefit
approximately 1,000 women who were discriminated against in
hiring.
- more -
59
The Administration is committed to strengthening the strong
employment discrimination laws that now exist. These
improvements will remove consideration of factors such as sex,
race, religion, or national origin from employment decisions.
This can be done without encouraging the use of quotas or
preferential treatment, without departing from the fundamental
principles of fairness that apply throughout our legal system,
and without creating a litigation bonanza that brings more
benefits to lawyers than to victims.
o
A major objective of the Administration is to ensure that
Federal law provides strong new remedies for harassment
based on sex, race, color, religion, or national origin.
The Administration will propose to codify a cause of action
for "disparate impact," involving employment practices that
unintentionally exclude disproportionate numbers of certain
groups from some jobs. The burden of proof will be shifted
to the employer on the issue of "business necessity."
The time has come for Congress to bring itself under the
same anti-discrimination requirements it prescribes for
others.
Other improvements, including changes in certain provisions
affecting statutes of limitations and encouragement for the
use of alternative dispute resolution mechanisms, will also
enhance the administration of our comprehensive civil rights
laws.
REDUCING FEDERAL BUREAUCRACY AND ESTABLISHING OPPORTUNITY AREAS:
Programs providing social, welfare, health, education, and
nutritional services are often delivered in fragmented ways.
Allowing services to be integrated will better serve the
recipients of these programs and promote self-sufficiency and
opportunity.
O
The Community Opportunity Act of 1991 will enable local
communities to develop "community opportunity systems" and
allow them to restructure Federal programs to provide
services and benefits in the way the community deems best to
meet the needs of the individuals and families served.
The legislation would allow a Federal administrator
designated by the President to recommend a budget-neutral
waiver of most Federal statutory and regulatory requirements
for any Federally funded program to be included in the
- more -
60
community's opportunity delivery system. The Federal
administrator will make recommendations regarding the waiver
requests to the relevant Federal agency heads.
Communities will be able to develop community opportunity
systems in which:
--
services and benefits can be integrated, combined, and
restructured at the community level;
--
the system is neighborhood- or community-based, with a
specified target group of beneficiaries;
the individuals and families served can participate in
the design of the system; and
--
the delivery system offers individuals and families in
the target group of beneficiaries the maximum choice
and control over the range, source, and objectives of
the services and benefits to be provided.
Each community opportunity system will have clear and
measurable goals and will be evaluated with regard to both
the short- and long-term outcomes.
EXPANDING JOB OPPORTUNITIES FOR OLDER AMERICANS BY LIBERALIZING
THE SOCIAL SECURITY EARNINGS TEST:
If social security recipients aged 65 to 69 wish to
supplement their benefits with earnings, they may earn only up to
$9,720 this year before their social security benefits are
reduced. Beyond $9,720, each three dollars of earnings reduces
their social security benefits by one dollar.
For retirees with sources of income other than earnings,
such as private pensions and investment income, this limitation
on allowable earnings may have little effect on their lives.
Presently, the earnings test falls most heavily on elderly
persons who do not have significant savings or income from
pension plans, and can seriously constrain their choices of
employment.
o
The President's Fiscal Year 1992 Budget proposes an increase
in the amount of allowable earnings for social security
recipients aged 65 to 69.
--
For 1992, allowable earnings would be increased $800,
or 8 percent, from $10,200 to $11,000.
- more -
61
--
For 1993, the increase would be $200, from $10,800 to
$11,000.
--
For 1994, allowable earnings would continue to rise to
the level projected under current law, $11,400.
PROTECTING CITIZENS BY FIGHTING VIOLENT CRIME:
As President Bush has stated in the past, the right to be
free from fear in our homes, streets, and neighborhoods is the
first civil right of every American. Where streets are not safe
and property is not secure, economic opportunity is impossible.
The President announced in his State of the Union Address
that the Attorney General will soon convene a Crime Summit of our
nation's law enforcement officials. A major objective of the
Crime Summit is to strengthen the working relationship between
the Administration and State and local law enforcement
officials.
The Administration will again propose comprehensive violent
crime control legislation to give law enforcement authorities the
tools they need to apprehend, prosecute, and incarcerate violent
criminals. The legislation will include:
o
A meaningful Federal death penalty for the most heinous
crimes with procedures to ensure its fair and colorblind
application.
Habeas corpus reform to reduce unnecessarily repetitive
appeals that clog the courts and delay justice.
O
Exclusionary rule reform to ensure that the evidence
gathered by law enforcement officials in a good faith belief
that they are acting lawfully can be used to help courts
establish the truth.
Provisions to strengthen Federal laws concerning the safety
of women by modifying rules on the admissibility of evidence
in cases of sex crimes, enhancing penalties for the
distribution of illegal drugs to pregnant women, increasing
penalties for recidivist sex offenders, and offering greater
protection for victims below the age of sixteen.
# # #
62
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release
March 11, 1991
COMBATTING VIOLENT CRIME
FACT SHEET
The President today transmitted to Congress comprehensive
legislation to combat violent crime. The provisions, when
enacted, will enhance the ability of Federal, State and local
law enforcement officials to ensure the safety of American
communities, neighborhoods and citizens.
The Comprehensive Violent Crime Control Act of 1991 builds
on many of the provisions from the President's violent crime
control proposals of 1989 that, although passed by one or both
Houses, were not enacted. It also contains new and
complementary provisions dealing with terrorism, obstruction of
justice, violence against women, victims' rights, and gangs and
juvenile offenders.
Fundamental Principles
Four principles guided the development of the
Comprehensive Violent Crime Control Act of 1991:
A primary purpose of government is to protect
citizens and their property. Americans deserve to
live in a society in which they are safe and feel
secure.
Those who commit violent criminal offenses should,
and must, be held accountable for their actions.
Our criminal justice system should seek the swift and
certain apprehension, prosecution, and incarceration
of those who break the law.
Success in accomplishing our criminal justice system
goals requires a sustained, cooperative effort by a
coalition of Federal, State and local law enforcement
officials.
The legislation transmitted to Congress today is
consistent with and fosters these principles.
63
COMPREHENSIVE VIOLENT CRIME CONTROL ACT OF 1991
I.
The Death Penalty and Equal Justice
For the most heinous Federal crimes, the Nation needs a
workable and enforceable death penalty. Although various
Federal laws provide the death penalty for crimes of
homicide, treason and espionage, most of these laws are
unenforceable. They are ineffective because they fail to
meet the constitutionally required standards and
procedures enunciated by the Supreme Court.
This legislation addresses those deficiencies for existing
capital offenses and authorizes imposing the death penalty
for several additional aggravated federal crimes. The
legislation also provides effective safeguards against
racial discrimination and racial bias in the
administration of capital punishment and other penalties.
A.
Offenses for which the Death Penalty is Authorized
After Consideration of Aggravating and Mitigating
Factors.
Existing Federal crimes for which the death penalty
may be imposed after enactment of proper procedures
include: espionage, treason and, where death
results, the destruction of aircraft and aircraft
facilities, mailing dangerous articles, wrecking
trains, bank robbery, aircraft piracy, and violence
against Members of Congress and cabinet officers.
In addition to these existing crimes, this
legislation authorizes the death penalty for certain
existing but currently non-capital Federal crimes:
the murder of certain foreign officials, kidnapping
where a death results, murder for hire, murder in aid
of racketeering, murder during a hostage taking,
terrorist murders of American nationals abroad, the
attempted assassination of the President, and murder
in furtherance of genocide.
Drug crime offenders potentially eligible for the
death penalty include:
Leaders of the largest drug trafficking
enterprises who are currently subject to a
mandatory term of life imprisonment;
64
"Drug Kingpins" who attempt to obstruct
investigations or prosecutions by attempting to kill
persons in the criminal justice system; and
Those offenders who, while acting with the requisite
intent required for capital murder, engage in a
Federal drug felony and a person dies in the course
of the offense or from the use of drugs involved in
the offense.
The legislation also authorizes the death penalty for a
number of other crimes including murder by a federal
prison inmate serving a life sentence, murders in
violation of Federal civil rights statutes, and certain
obstruction of justice and new terrorism offenses where
death results.
B.
Factors That May be Considered in Determining Whether the
Death Penalty is Justified.
In determining whether the death penalty should be
imposed, the legislation requires considering aggravating
factors some of which are specifically tailored to the
crime in question. Other, more general, aggravating
factors include: knowingly creating a grave risk of death
to one or more persons in addition to the victim of the
offense; committing the offense in an especially heinous,
cruel or depraved manner involving torture or serious
physical abuse to the victim; or committing the offense
after substantial planning and premeditation.
The legislation also requires the consideration of several
mitigating factors if the death penalty is sought.
C.
Procedures to be Implemented in Imposing a Sentence of
Death.
The bill requires holding a special hearing to determine
whether a sentence of death is justified. If the
prosecution believes that a sentence of death is
justified, the prosecutor must provide defendant's counsel
with notice of the aggravating factors the prosecution
proposes to prove at the hearing. After the hearing, the
jury makes a binding recommendation as to whether the
sentence of death is justified.
The bill also includes improved procedures for Federal
death penalty litigation modeled on the recommendations of
the Ad Hoc Committee of the Judicial Conference on Federal
65
Habeas Corpus in Capital Cases. These procedures include
the appointment of counsel meeting specified standards of
competency.
D.
Equal Justice
The Equal Justice provisions include:
Requiring administration of the death penalty and
other penalties without regard to the race of the
defendant or victim, and prohibiting racial quotas
and other statistical tests for imposing the death
penalty or other penalties;
Guarding against racial prejudice or bias at trial by
providing for the examination of potential jurors for
racial bias, a change venue to avoid racial bias, and
prohibiting appeals to racial bias in statements
before the jury; and
Requiring, in Federal cases, jury instructions and
certifications guarding against consideration of race
in capital sentencing decisions, and making the
capital sentencing option consistently available for
racially motivated murders in violation of the
Federal civil rights laws.
II. Habeas Corpus Reform
Each year over 10,000 habeas corpus petitions are filed in
the Federal courts. Many of these petitions are
repetitive, raise no new issue from previous habeas corpus
petitions, and are only intended for delay.
The President proposed:
Establishing a general one-year time limitation on
Federal habeas corpus applications by State
prisoners;
Requiring deference in Federal habeas corpus
proceedings to the results of full and fair State
court adjudications; and
Authorizing special habeas corpus procedures to
respond to problems of delay and abuse while ensuring
increased fairness to defendants through broadened
appointment of counsel.
66
III. Exclusionary Rule Reform
The President again proposed a general "good faith"
exception to the exclusionary rule. This exception would
permit the admission of evidence if the officers carrying
out a search or seizure acted with an objectively
reasonable belief that their conduct met Fourth Amendment
requirements. The legislation would also clarify that,
absent statutory authority, Federal courts may only
exclude evidence on the basis of constitutional
violations.
In addition, this legislation creates a limited exception
to the exclusionary rule that would bar the suppression of
firearms seized by federal officers where the firearms are
to be used in a federal prosecution for a crime of
violence or serious drug offense, or a federal
prosecution of an offender who is disqualified from
firearms possession because of a prior felony conviction
or on other grounds. This exception is contingent on the
establishment of alternative safeguards and sanctions to
ensure compliance with the Fourth Amendment prohibition
against unreasonable searches and seizures by Federal law
enforcement officials. Standards and procedures would
also be required for settling claims for damages for
Fourth Amendment violations under the Federal Tort Claims
Act.
IV. Enhanced Penalties for Firearms Violations
Violent offenders must be held fully accountable for their
actions. The amendments to Federal law the President
proposed addressing the criminal use of firearms include:
Doubling the mandatory penalty from five to ten years
for using a semi-automatic firearm while committing a
violent crime or drug felony;
Providing a mandatory five-year prison term for
possession of firearms by felons who are disqualified
from firearms possession and who have a previous
conviction for a violent felony or serious drug
offense;
Allowing pre-trial preventive detention of defendants
in cases involving certain serious Federal firearms
and explosive offenses;
Authorizing criminal penalties and mandatory minimum
sentences for theft of a firearm; and
67
Doubling the current penalty for a knowing and
materially false statement in connection with
acquiring a firearm from a licensed dealer.
The legislation also generally prohibits the importation,
manufacture, transfer, or sale of gun magazines that allow
firing over 15 rounds without reloading.
V.
Gangs and Juvenile Offenders
To address the increasing problem of violent activities by
juveniles and gangs, the President proposed:
Broadening the authorization for reporting,
retaining, and disclosing juvenile records for
criminal justice purposes;
Increasing options for prosecuting serious juvenile
offenders and gang leaders as adults;
Broadening the scope of the Armed Career Criminal Act
to include as predicate offenses acts of juvenile
delinquency that, if committed by an adult, would
meet the Act's definition of a "serious drug
offense";
Increasing the penalty for Travel Act crimes
involving violence; and
Increasing the penalty for conspiracy to commit
murder for hire.
VI. Terrorism
To combat terrorism more effectively, the President's
violent crime legislation includes:
An enforceable federal death penalty for the crimes
most likely to be committed by terrorists in cases
where death results, such as fatal bombings,
hijackings, hostage takings and assassinations;
Aviation terrorism provisions implementing an
international treaty prohibiting and punishing acts
of violence at international airports such as the
1985 attacks on the Rome and Vienna airports;
68
Maritime terrorism provisions implementing an
international treaty prohibiting and punishing
hijackings, dangerous acts of violence, and threats
in relation to ships and maritime platforms which was
prompted by the Achille Lauro hijacking;
Effective procedures, including provisions to deal
with classified information, for removing aliens
involved in terrorist activities from the United
States;
New offenses and increased penalties targeted on
terrorism, including implementation of the
international convention against torture, a new
offense prohibiting and punishing the use of weapons
of mass destruction against American citizens or
United States property anywhere in the world, a new
offense prohibiting and punishing killings and
attempted killings in firearms attacks on federal
facilities, a new offense for providing material
support to terrorists, adding terrorist offenses to
the RICO statute, authorizing forfeiture of the
instrumentalities and proceeds of terrorist
activities, increasing penalties for offenses
involving falsification of international travel and
identification documents, and directing the United
States Sentencing Commission to increase penalties
for offenses that involve or promote international
terrorism; and
Provisions to strengthen antiterrorism enforcement
activities, including authorizing admission to the
United States of a limited number of aliens who
assist in antiterrorism investigations, broadening
access to telephone and credit records in
counterintelligence investigations, strengthening the
provisions for court-ordered electronic surveillance
and other interceptions of communications to
facilitate their use in investigations of terrorist
activities, and increasing the time available for
investigation of terrorist acts committed outside the
United States by extending the statutes of
limitations.
69
VII. Sexual Violence and Child Abuse
To address sexual violence and child abuse the President's
proposal:
Broadens the admissibility of evidence of the
defendant's commission of similar crimes in sexual
assault and child molestation cases;
Provides enhanced penalties for the distribution of
controlled substances to pregnant women;
Broadens the definition of "sexual act" for Federal
sexual abuse offenses committed against victims below
the age of 16;
Enhances penalties for recidivist sex offenders;
Requires HIV testing in Federal cases involving a
risk of HIV transmission;
Provides enhanced penalties for federal sex offenders
who risk HIV infection of their victims; and
Provides that victims of violent crimes and sex
crimes may address the court concerning the
defendant's sentence.
VIII. Drug Testing in the Criminal Justice System
To decrease drug use and increase the accountability of
the Federal and state criminal justice systems the
President proposed:
Requiring drug testing of Federal offenders on post-
conviction release. Federal offenders would be
required to refrain form drug use as a mandatory
condition of post-conviction release; and
Requiring a drug testing program for state criminal
justice systems as a condition for receipt of Federal
drug grants.
70
FACT SHEET ON ADMINISTRATION
CIVIL RIGHTS BILL
The Administration is committed to strengthening the strong
employment discrimination laws that now exist. These
improvements will operate to obliterate consideration of
factors such as race, religion, sex, or national origin from
employment decisions.
This can be done without encouraging the use of quotas or
preferential treatment, without departing from the
fundamental principles of fairness that apply throughout our
legal system, and without creating a litigation bonanza that
brings more benefits to lawyers than to victims.
A major objective of the Administration is to ensure that
Federal law provides strong new remedies for harassment
based on race, sex, religion, or national origin. The
Administration proposes to create a new monetary remedy,
with a $150,000 cap, for these forms of discrimination.
In addition, the Administration proposes to extend 42 U.S.C.
1981 to outlaw racial discrimination in the performance of
contracts, overruling Patterson V. McLean Credit Union, 109
S. Ct. 2363 (1989).
The Administration also proposes legislation overturning the
Supreme Court's decision in Lorance V. AT&T Technologies,
Inc., 109 S. Ct. 2261 (1989), which unfairly limits the time
for challenging discriminatory seniority systems.
The administration also proposes to codify the "disparate
impact" cause of action for employment practices that
unintentionally exclude disproportionate numbers of certain
groups from some jobs. This codifies Griggs V. Duke Power
CO., 401 U.S. 424 (1971) The Administration will propose
to place the burden of proof on the defendant to justify
practices having a disparate impact under the rule of
-
"business necessity." This overrules the contrary decision
in Wards Cove Packing Co., Inc. V. Atonio, 109 S. Ct. 2115,
2126 (1989)
In order to help curtail unnecessary litigation, the use of
alternative dispute resolution mechanisms will be
encouraged.
The time has come for Congress to bring itself under the
same antidiscrimination requirements it prescribes for
others. This will promote both fair treatment for
congressional employees and a greater appreciation by
Congress of the consequences of new legislative initiatives.
71
Other improvements, including changes in certain provisions
affecting the statute of limitations and expert witness
fees, will also enhance the administration of Title VII of
the 1964 Civil Rights Act.
The Administration recognizes that equal opportunity can
never be a reality unless there are decent schools, safe
streets, and revitalized local economies. Therefore, in
addition to this bill it seeks Congressional action to
promote choice and opportunity on several fronts:
educational choice and flexibility; home-ownership
opportunity; enterprise zones and community opportunity
areas; and heightened anti-crime efforts.
72
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release
March 19, 1991
EXTENSION OF FAST TRACK AUTHORITY
FACT SHEET
FAST TRACK PROCEDURES
Historical Background to the Fast Track
For the better part of this century, the Congress and the
Executive have recognized that the negotiation and
implementation of trade agreements require special
cooperation.
In the aftermath of the record-high rates of the Smoot-
Hawley Tariff Act of 1930 and the Depression they helped
fuel, both the Congress and the Executive branch recognized
that only by working closely together could the two branches
effectively bring down barriers to our foreign trade and
open international markets for U.S. products and services.
This new partnership was reflected in the Reciprocal Trade
Agreements Act of 1934, which gave the President authority
not only to conclude tariff-cutting agreements but also to
implement them without the need for subsequent legislation.
As countries began to rely less on tariff protection and
more on non-tariff trade barriers, the scope of trade
negotiations broadened, and the "fast-track" procedures were
created by the Congress as the necessary complement to this
broader trade agenda.
o
Fast track procedures for approval of trade agreements were
included by the Congress in trade legislation in 1974, 1979,
and again in the 1988 Trade Act.
Fast Track is Essential to Successful Trade Negotiations
While assuring the Congress meaningful participation
throughout the negotiation process, fast track provides two
guarantees essential to the successful negotiation of trade
agreements: (1) a vote on implementing legislation within a
fixed period of time, and (2) no amendments to that
legislation.
73
These procedures reflect the understanding that trade
agreements, in which results in one area are often linked to
results in others, are particularly vulnerable to multiple
amendments that, while possibly small in themselves, could
unravel entire agreements.
Whether the balance of benefits contained in any trade
agreement is in the overall interest of the United States
can only be determined by looking at the whole package.
Through the fast track, the Congress gave the President the
same bargaining power possessed by his counterparts: the
ability to ensure that the agreement reached internationally
would be the agreement voted on at home.
Without fast track, the President cannot assure our
negotiating partners that the deal they strike is the deal
that will be voted on by the Congress.
Without that assurance, foreign governments are reluctant to
negotiate with the United States and will not make the tough
concessions necessary to reach agreements the United States
would be willing to sign. No trading partner will give its
bottom line knowing that the bargain could be reopened.
Using fast track, the United States has negotiated and
implemented three remarkable agreements that were each
approved by an overwhelming majority in both Houses of the
Congress. These agreements -- the results of the Tokyo
Round in 1979, the Free Trade Agreement with Israel in 1985,
and the Free Trade Agreement with Canada in 1988 -- have
reduced barriers to trade and contributed to growth in the
United States and worldwide.
The United States has much to gain from trade agreements
that open markets and provide rules for free and fair trade.
Maintaining the fast track will preserve our ability to
continue our efforts to liberalize trade and open markets
through the General Agreement on Tariffs and Trade, through
other multilateral agreements and through bilateral
agreements.
The Congress is an Essential Part of the Fast Track Process
Fast track procedures preserve the role of the Congress
during the negotiation, approval, and implementation of
trade agreements.
To ensure congressional and private sector input, the fast
track statute contains extensive notification and
consultation requirements. At each step along the way, from
74
initiation through implementation, the Congress is an active
partner.
To use the fast track for any agreement, bilateral or
multilateral, the President must notify the Congress 90
calendar days before signature. By the time the President
gives his 90-day notification, our many private sector
advisory committees must report their views on the agreement
both to the Congress and to the President. For bilateral
agreements, the Congress must be given advance notice of the
negotiations; during the following 60 legislative working
days, either the Senate Finance or House Ways and Means
Committee can vote to deny fast track treatment.
Once an agreement is reached, the Congress and the
Administration work in close consultation to formulate
implementing legislation. The process has involved the full
participation of all committees of jurisdiction, not only
those committees traditionally consulted in setting trade
negotiating objectives. If the agreement and its
implementing legislation are still not acceptable, they can
be rejected by a majority vote of either House.
We are today engaged in bilateral and multilateral trade
initiatives that hold unprecedented promise for the
advancement of U.S. economic objectives. With such
initiatives in train, it is clearly in the national interest
to continue a partnership that has proved its worth for
almost 60 years.
Use of Fast Track if Extended
In incorporating the fast track in the 1988 Trade Act, the
Congress expressly contemplated that an extension might be
necessary and appropriate in order for the President to
pursue effectively the trade policy goals set out in the
law.
If extended, the fast track would be available until June 1,
1993, and would be used to implement trade initiatives such
as completing the Uruguay Round, negotiating a North America
Free Trade Agreement (NAFTA) with Mexico and Canada, and
pursuing the trade objectives of the Enterprise for the
Americas Initiative.
Supporting fast track will allow these important initiatives
to go forward without in any way detracting from the ability
of the Congress to assess each agreement on its merits when
presented for approval.
75
A Vote Against Fast Track Denies Fast Track for all Agreements
Current fast track authority would have expired on
June 1 if the President had not requested an extension by
March 1. The requested extension is granted automatically
unless either house passes a statutorily prescribed
disapproval resolution before June 1.
The language of the disapproval resolution, which is set out
in the statute, makes clear that disapproval eliminates all
fast track authority, multilateral and bilateral.
The disapproval resolution cannot be amended to eliminate
fast track for some agreements but not others because the
resolution itself cannot be amended. It is not possible,
for example, to vote against the fast track for the Uruguay
Round agreements but preserve it for the NAFTA.
If a disapproval resolution is passed by either House, the
fast track is gone for all purposes, and the President's
ability to successfully negotiate any trade agreement
requiring congressional approval, bilateral or multilateral,
is severely crippled if not eliminated entirely.
Simply put, a vote against fast track is a vote against
trade.
Continuing Fast Track is Essential to Securing Economic Gains
As the world's largest trader, the United States has an
enormous stake in the future of the global trading system.
Exports have become a vital source of strength to the U.S.
economy. In 1990, the nearly 8.5 percent growth in U.S.
exports accounted for 88 percent of U.S. economic growth.
In order to sustain the expansion of exports and consequent
growth, we must continue our efforts to open world markets.
We must maintain our active leadership role. Without an
extension of fast track, those efforts are futile.
Maintaining fast track procedures -- and the partnership
between the Congress and the executive branch that fast
track represents -- will keep on course our joint efforts to
liberalize trade and open markets through the GATT, through
other multilateral agreements, and through bilateral
agreements. NO country stands more to gain from those
efforts than the United States.
As we approach the beginning of a new century, we should not
hesitate to pursue the opportunities for expanded economic
growth and prosperity presented by successful trade
negotiations.
76
In order to turn those opportunities into realities, the
Congress and the Executive must continue to work together in
the manner envisioned by the fast track.
THE IMPORTANCE AND BENEFITS OF THE URUGUAY ROUND
Uruguay Round is the Most Ambitious of Trade Negotiations to Date
The world trading system is now vastly more complex than it
was when the GATT was written in 1947. Over one-third of
world trade, more than $1 trillion, is inadequately covered
by international trade rules.
The Uruguay Round negotiations -- in which 108 countries
participate -- are an ambitious effort to strengthen and
expand the global trading system as well as to further lower
trade barriers. Launched in 1986 in Punta del Este,
Uruguay, these negotiations are the eighth round of
multilateral trade negotiations conducted under the auspices
of GATT.
The United States led the call for the far-reaching agenda
of issues in the Uruguay Round. The Congress established
objectives for the Uruguay Round in the Omnibus Trade and
Competitiveness Act, passed in August of 1988.
The negotiating agenda runs the gamut of U.S. interests,
both in opening world markets and in establishing internal
rules of fair play in areas vital to U.S. competitiveness
-- services, investment, agriculture, and intellectual
property. The negotiations fall into four broad categories:
-- market access (tariffs and non-tariff measures, natural
resource-based products, tropical products, and
textiles);
--
the "new" areas of services, trade-related intellectual
property rights (TRIPs), and trade-related investment
measures (TRIMs);
-- agriculture; and
--
GATT rules (dispute settlement, safeguards, GATT
Articles including balance of payments reform, and the
non-tariff measure codes, including subsidies and
antidumping).
Moreover, unlike previous GATT negotiating rounds,
developing countries are active participants in every aspect
of the negotiations.
77
The Administration is Committed to Ensuring that the Uruguay
Round Results in Agreements that Truly Meet U.S. Objectives
This resolve was demonstrated at Brussels in December 1990.
The U.S. delegation and other important delegations
determined that it was preferable to end the ministerial
meeting without result rather than to lower ambitions and
accept minimal Uruguay Round agreements.
The negotiations formally resumed in all areas on
February 26, 1991, when a framework to negotiate
agricultural reform was reached. The exact pace of
negotiations will depend on how quickly we are able to reach
an acceptable solution on agriculture.
The Administration is not prepared to accept an inadequate
agreement for the sake of an agreement; but we are prepared
to continue to negotiate to obtain a good result.
A Successful Uruguay Round Would Bring Substantial Benefits to
the U.S. and World Economies
Exports have become a vital source of strength to the U.S.
economy. Since the Round was launched in 1986, export
expansion has been responsible for 40 percent of total
growth in U.S. GNP. In 1990, export growth accounted for 88
percent of U.S. GNP growth.
An open multilateral trading system is the best guarantee
that U.S. export opportunities continue to expand into the
next century. The Uruguay Round is the most important
initiative to expand these opportunities.
Specifically, a successful Uruguay Round would provide
substantial benefits to the U.S. economy, including:
--
Lower tariff and non-tariff barriers to manufactured
products and other goods, which could increase world
output by $5 trillion and U.S. output by over
$1 trillion over the next 10 years, meaning an
additional $16, 000 for every American family of four;
--
Rules to protect the intellectual property of U.S.
entrepreneurs, who lose $60 billion annually through
theft and counterfeiting of their ideas;
:
New markets for U.S. services firms, which export
$115 billion annually and generate 90 percent of new
U.S. jobs;
78
An agreement opening world markets to investment, which
helps generate $240 billion, or two-thirds of total
U.S. exports in goods;
Fair competition and open markets in agriculture,
creating new opportunities for American farmers, who
lead the world with more than $40 billion in annual
exports;
The full participation of developing countries in the
global trading system, which could increase U.S.
exports by $200 billion over the next 10 years; and
Strengthened rules on dispute settlement, antidumping,
subsidies and trade remedy provisions, which should
provide predictability and certainty in access to
foreign markets and ensure fair trade at home.
Conversely, failure to extend fast track authority will end
the Uruguay Round negotiations, damaging prospects for world
economic growth and cooperation.
A collapse of the Round brought about by removal of U.S.
fast track authority would increase worldwide pressures to
raise trade and investment barriers. A sufficiently sharp
movement away from open markets could contribute to a global
recession, as it did in the 1930s.
Although the ultimate success of the Uruguay Round cannot be
guaranteed, the United States should continue negotiations
because a successful Round is overwhelmingly in our long-
term economic interests.
IMPORTANCE OF A NORTH AMERICAN FREE TRADE AGREEMENT
A NAFTA Would Create One of the World's Largest Free Trade Areas
A NAFTA would create an enormous market, encompassing some
360 million consumers and total output of $6 trillion.
The progressive elimination of barriers to the flow of
goods, services, and investment and strengthened protection
of intellectual property rights would benefit a broad
spectrum of businesses, workers, farmers, and consumers.
Creation of a NAFTA would be a catalyst for economic growth
and development in the United States, Mexico and Canada
through increased trade, investment, and jobs.
79
The Importance of North American Trade
Canada and Mexico are America's first and third largest
trading partners, respectively. In turn, the United States
accounts for over two-thirds of their total trade. In 1990,
three-way trade came to about $237 billion.
Since 1980, U.S. exports to Mexico and Canada have doubled,
rising from $55.3 billion to $111.4 billion. Our exports to
our neighbors have grown substantially faster than those to
the rest of the world.
Removal of Barriers Would Create New Trade and Investment
Opportunities
O
Since Mexico joined the GATT in 1986 and started its
unilateral policy of lowering trade barriers, U.S. exports
have more than doubled, growing from $12.4 billion to $28.4
billion.
--
U.S. agricultural exports to Mexico totalled
$2.5 billion in 1990, our third largest market.
--
Consumer goods exports from the United States to Mexico
have tripled since 1986, rising from
$1 billion to $3 billion.
--
U.S. exports of capital goods have grown from
$5 billion in 1986 to about $9.5 billion last year.
We can do better. Mexico has greater barriers to U.S.
exports than we impose on Mexican shipments to the United
States. For example:
--
Mexican tariffs average 10 percent, compared to the
average tariff of 4 percent we impose on Mexican
exports to us.
--
Mexico still maintains a restrictive import licensing
regime, one that affects 40 percent of U.S.
agricultural exports to Mexico.
In addition, while Mexico has liberalized its investment
regime, it is still closed to many U.S. investments, both in
manufacturing and in services, and performance requirements
distort export opportunities for U.S. products.
Mexico has already pledged to improve its protection for
intellectual property rights, and we expect action on those
pledges in the near future. A NAFTA will make those reforms
secure.
80
A NAFTA Offers Benefits to U.S. Producers, Workers and Consumers
Economic analyses show that a NAFTA will have a positive
impact on the U.S. economy and U.S. employment.
U.S. producers and workers will benefit from a NAFTA through
increased sales opportunities, improved operating
efficiencies, and strengthened competitiveness vis-a-vis
Asia and Europe.
U.S. consumers will enjoy increased access to lower cost,
higher quality products.
A NAFTA Strengthens the Broader North American Relationship
A NAFTA would help cement the extensive historical,
familial, cultural, and language links the United States has
with both Mexico and Canada.
More prosperous neighbors are better neighbors and better
customers for U.S. goods and services.
We have a broad agenda with both Mexico and Canada that goes
well beyond trade, economic, and investment links. By
boosting economic prosperity in all three nations, a NAFTA
will help us make progress on issues such as the
environment, drugs, and immigration.
#
#
#
81
CITY
TREASURY NEWS
COMMUNITY THE TREASURY
THE
1789
epartment of the Treasury
Washington, D.C.
Telephone 566-204
THE FINANCIAL INSTITUTIONS SAFETY AND CONSUMER CHOICE ACT OF 1991
MARCH 20, 1991
FACT SHEET
The Need for Reform
It is time to modernize our financial system to make banks
safer and more competitive:
We must modernize our banking system, updating outmoded
laws that date back to the 1930s.
Banks must be sound to protect depositors and
taxpayers.
A strong, internationally competitive banking system is
essential to a strong, growing economy.
The Banking System is Under Stress
Technology has revolutionized the way financial
institutions do business, but our banks are hampered by
out-of-date rules.
Weak banks shrink lending when the economy slows,
hurting businesses and costing jobs.
Our banks are falling behind international competitors:
Not one of the 25 largest banks in the world is
American, compared to seven of 25, including the top
three, just 20 years ago.
NB-1187
83
The Benefits of Reform
A modern, safe and internationally competitive banking
industry will protect depositors and taxpayers, serve consumers,
benefit workers and businesses, and strengthen our nation.
Protect depositors and taxpayers:
Depositor confidence and taxpayer protection will
result from:
--
A safe, competitive, well-capitalized banking
system;
--
limitations on taxpayer exposure to losses from
bank failures;
--
and a strong, well-capitalized insurance fund.
Serve consumers:
An efficient, integrated financial services system will
mean:
--
Consumers will have access to a wider range of
services at the least possible cost.
--
Consumers also will enjoy the convenience of
nationwide access to services.
Benefit workers and businesses:
A healthy banking system with strong, competitive banks
will ensure:
:
Jobs are preserved because loans are not called at
the first sign of economic downturn.
:
Small businesses that lack access to securities
markets can count on banks in bad times as well as
good.
Strengthen the nation:
A world-class financial services system provides a
foundation for a world-class economy:
--
International economic leadership in the 21st
century will require an internationally
competitive financial services system.
84
The Principles Governing Reform
First, we will preserve deposit insurance for small savers
while protecting taxpayers by reducing the overextended deposit
insurance system. Deposit insurance, originally intended to
protect small depositors who could not protect themselves, has
been expanded so that large, sophisticated investors receive
unneeded protection. This reform will restore market discipline
over risky activities that have increased the possibility of
taxpayer exposure to losses in the banking system.
Second, we will make banks stronger and safer by
strengthening the role of capital -- not by raising capital
standards, but with a plan to attract capital to the banking
industry. This will include rewarding well-capitalized banks
with new activities that will attract still further capital, and
taking prompt corrective action to address under-capitalized
banks.
Third, we will make banks more competitive by modernizing
outdated laws. Technological advances and other innovations in
financial markets have put banks at a competitive disadvantage --
at home and abroad -- that has weakened the system and hurt the
economy. Changes will allow banks to engage in a broader range
of financial services and to operate nationwide.
Fourth, we will strengthen the banking system by making the
regulatory structure more efficient. Currently, overlapping
regulatory responsibilities lead to confusion and uneven results.
85
KEY ELEMENTS OF THE LEGISLATION
I.
DEPOSIT INSURANCE COVERAGE
Preserves deposit insurance coverage for small savers.
--
$100,000 per person per institution
--
Plus, $100,000 for retirement savings per person
per institution
--
Two year phase-in period.
--
Example: A husband and wife will be able to have
as much as $400,000 in insured deposits in any one
institution ($200,000 each). While this reduces
the amount of deposit insurance available at any
one bank, if the couple needs more than $400,000
coverage, they can still go to another bank to get
an additional $400,000 insured coverage.
No change in current treatment of corporate accounts.
Eliminates coverage for "brokered deposits".
Reduces deposit insurance for professionally managed
pension plans.
--
Eliminates coverage for bank investment contracts
(BICs).
--
Eliminates "pass-through" coverage for deposits of
most professionally managed pension plans.
:
Exceptions:
OO
Continues deposit insurance coverage for
state and local government pension plans
00
Continues deposit insurance coverage for
escrow and similar types of accounts
OO
Continues coverage for self-directed pension
plans (such as IRAs and small company
Keoghs).
86
FDIC to perform 18 month study of feasibility, costs
and benefits of implementing system-wide limitation of
coverage for every depositor; Fed to undertake survey
to gather data on ownership of deposits and report in
one year.
Pilot program for private reinsurance coverage.
II. TOO BIG TO FAIL
Eliminates current policy of routinely protecting all
insured and uninsured depositors in every case.
FDIC permitted to cover uninsured depositors only if
that would be the least costly approach to resolving a
failed institution.
Maintains ability to intervene in cases where there is
a threat to our financial system (same power afforded
to governments of every other industrialized nation).
Treasury and the Fed could order coverage of uninsured
deposits in rare cases of systemic risk, in
consultation with OMB and FDIC.
Three year phase-in period.
III. RISK BASED ASSESSMENTS
Requires establishment of a risk-based system for
setting insurance premiums.
Effective two years after enactment.
Risk categories must use ratio of capital to risk
weighted assets as fundamental measure.
87
IV. RESTRICTIONS ON FEDERALLY INSURED STATE BANK ACTIVITIES
Maintains dual banking system, but limits taxpayer
exposure.
Limits the states' ability to authorize risky
activities for federally insured state banks.
Federally insured state-chartered banks and their
subsidiaries will not be able to undertake principal
activities which are not permissible for federally
insured national banks, unless they meet their capital
requirements and obtain permission from the FDIC.
Taxpayers should not be on the hook for risky state-
chartered bank activities that are covered by federal
deposit insurance.
V.
IMPROVED SUPERVISION
Banks that fall below minimum capital standards are
subject to prompt corrective action - including, for
example, dividend cuts - aimed at preventing failure.
Generally, requires annual on site examinations for
banks.
--
Smaller banks (less than $1 billion in assets)
that maintain required capital need only have
exams once every 18 months.
Capital standards must reflect interest rate risk.
VI. CREDIT UNIONS
Recognizes independence of credit unions.
National Credit Union Administration (NCUA) remains as
insurer and regulator.
Protects taxpayer by eliminating double counting of
insurance fund assets over 12 year period.
88
Revises the Board of Directors of NCUA to include the
Director of the Office of Depository Institutions
Supervision as a Board member.
VII. FINANCIAL SERVICES MODERNIZATION
Permits new financial services to be conducted only in
separately capitalized financial affiliates and only
for well-capitalized banks.
Only banks have access to deposit insurance fund
coverage.
Requires appropriate firewalls to ensure that new
activities are not conducted under the federal deposit
insurance safety net.
Creates "Financial Services Holding Company" (FSHC)
structure which will permit a single company to own
affiliates engaging in banking, securities, and
insurance.
Allows commercial firms to own FSHCs (if FSHC's banks
are well-capitalized) through a. "Diversified Holding
Company" (DHC).
Firewalls
--
Tighter limits on lending inside FSHCs (23a &
23b). Banks cannot put deposit insurance funds at
risk in non-bank financial services.
--
Broad regulatory authority to prevent unfair
competition, conflicts of interest, and unfair
banking practices. Banks cannot use deposit
insurance funds to gain an unfair competitive
advantage in other financial services activities.
--
Strict disclosure laws to ensure that customers do
not confuse insured products with uninsured
products.
:
Regulatory authority to limit disclosure of non-
public customer information.
89
-- No lending by a bank, or its FSHC, to any
affiliated commercial company.
Imposes capital restoration requirements on FSHCs that
fail to maintain specified levels of capital in banks
they own. They must either build up the capital of the
bank to the required level, sell the bank, divest
themselves of non-bank financial activities, or become
subject to holding company capital requirements and
much greater regulation.
Similar prompt corrective action applies to commercial
firms that own FSHCs that fail to maintain specified
capital levels in banks they own.
Provides for functional regulation of new activities
allowed in subsidiaries.
Requires insured depository institutions and affiliates
to prominently disclose in writing to each of their
customers that any securities or insurance products
offered, recommended, or sold by the institutions or
affiliates are not deposits and therefore are not
covered by federal deposit insurance.
Insurance
-- Banks and insurance companies can affiliate on a
full two-way street.
--
Insurance affiliates of banks continue to sell
insurance in any state, but banks themselves can
only sell insurance in states where state-
chartered banks can sell insurance.
-- National banks can sell insurance wherever state
banks are allowed to sell insurance, but
interstate authority to sell insurance in towns of
5,000 or less would be eliminated.
Securities
--
Banks and securities companies could affiliate on
a full two-way street.
--
Certain securities activities are moved out of
banks into subsidiaries or affiliates.
90
Real Estate
--
No real estate development by state or national
banks. Real estate development and brokerage
cannot be financial activities in new FSHC.
Existing real estate brokerage activities of
state-chartered banks are left undisturbed.
VIII. NATIONWIDE BANKING
Authorizes full nationwide banking for bank holding
companies following a three year phase-in period.
Authorizes interstate branching for national banks in
any state in which the financial services holding
company in the same state could acquire a bank.
Removes barriers to interstate branching by state
banks.
IX. STATE REGULATION
Generally, preempts state anti-affiliation provision,
but continues policy of having states determine
limitations on direct bank marketing of real estate and
insurance products.
Preserves procedures for enforcing the Community
Reinvestment Act (CRA).
States may tax interstate branches to the same extent
they tax interstate banks.
X.
REGULATORY RESTRUCTURING
Simplifies and consolidates current four-requlator
model (the Federal Reserve, the Office of the
Comptroller of the Currency, Federal Deposit Insurance
Corporation and Office of Thrift Supervision) into two
regulators, with the same regulator responsible for a
bank holding company and its principal subsidiary bank.
91
Creates a new federal banking agency -- the Office of
Depository Institution Supervision -- as a bureau of
the Treasury which replaces the Office of the
Comptroller of the Currency and the Office of Thrift
Supervision.
State-chartered banks (including savings banks) will be
regulated by the Federal Reserve.
National banks will be regulated by a new federal
banking agency -- the Office of Depository Institution
Supervision.
Thrifts and their holding companies will be regulated
by the Office of Depository Institution Supervision.
There is no reduction of FDIC examination authority as
the insurer.
XI. RECAPITALIZATION OF BANK INSURANCE FUND (BIF)
Includes necessary legislative language to implement
FDIC proposal for industry financed recapitalization of
BIF.
FDIC will be authorized to borrow up to a maximum of
$25 billion from the Federal Reserve banks.
FDIC will pay interest on any such borrowings at a rate
equal to the Treasury rate for borrowings of comparable
maturity.
Any borrowing under this new authority will be secured
by the FDIC's dedication of insurance premiums in
amounts sufficient to service and retire the debt in
accordance with its terms.
Annual premiums paid by the BIF insured institutions
will be capped at an aggregate of 30 basis points.
FDIC's existing authority to borrow from the Treasury
and the Federal Financing Bank will not be affected.
92
XII. PROVISIONS FOR SMALLER INSTITUTIONS
Increases the exemption in the Home Mortgage Disclosure
Act for small depository institutions from $10 million
to $50 million and eliminates duplicative reporting.
Treasury, and the appropriate federal banking agencies
to review whether it is feasible to reduce the number
of reporting requirements for institutions with assets
less than $50 million.
XIII. FOREIGN BANKS IN THE U.S.
Foreign banks are provided national treatment under
Treasury's proposed reforms.
93
USA
SCOPE OF THE EXPORT CONFERENCES
In May 1990, President Bush announced an initiative to
highlight his support for U.S. exporters, and he asked
Commerce Secretary Robert A. Mosbacher to chair the Trade
Promotion Coordinating Committee (TPCC), composed of 18 U.S.
government agencies, to integrate and streamline federal
trade promotion activities.
The heart of this national export initiative is a series of
conferences and follow-up events to be held throughout the
United States during 1991.
The conferences, "Exports - Generating Jobs for Americans,"
will illustrate how the federal government can be a powerful
resource for U.S. exporters.
--
Each program is designed to show U.S. companies how the
local Commerce office and the various U.S. government
programs work together and when and how to use them.
The conferences stress three essential ingredients for
success in rapidly changing world markets:
quality products and services
accurate and timely information on market opportunities
--
adequate financing to produce and ship the product.
Each conference will consist of:
panel presentations focusing on the three key
ingredients for successful exporting.
a luncheon keynote address by Secretary Mosbacher
a case study discussion by local Commerce trade
specialists on expanding exports by using the resources
available through state, local and federal governments
one-on-one export counseling sessions and elective
workshops to allow participants to learn more about
specific aspects of exporting of their choice
continuous demonstrations of the National Trade Data
Bank and the Commerce Department's Economic Bulletin
Board.
Expert speakers from business and government at all levels,
including the Export-Import Bank of the U.S., the Overseas
Private Investment Corporation, the Small Business
Administration, the Trade and Development Program, and the
Agency for International Development, will provide
conference participants with a wide array of tools to build
a stronger export engine for the economy.
94
USA
CONFERENCE SCHEDULE
"Exports--Generating Jobs for Americans"
Date
Location
April 10
Chicago, IL
April 11
Omaha, NE
April 12
Milwaukee, WI
April 30
Atlanta, GA
May 1
Tampa/St. Petersberg, FL
May 17
San Jose, CA
May 20
San Diego, CA
May 21
Phoenix, AZ
May 22
Kansas City, MO
May 24
Boston, MA
June 17
Anchorage, AK
June 18
Seattle, WA
June 19
Portland, OR
* A VIP reception will be held the evening before each conference
TPCC Office- Phone: (202) 377-4501
Fax:
(202) 377-1999
95
BUDGET OF THE
UNITED STATES
GOVERNMENT
DIRECTOR'S
INTRODUCTION AND
OVERVIEW TABLES
THE
PRESIDENT
OF THE of OFFICE THE UNITED OFFICE BUDGET OF and
FISCAL YEAR 1992
II.
DIRECTOR'S INTRODUCTION AND
OVERVIEW TABLES
A SOMBER MOMENT-BUT
Iraqi invasion has the potential to set a favor-
WITH HOPE FOR A NEW ORDER
able precedent for the post-Cold-War era-
what the President has termed a New World
Last year's budget was published in an his-
Order.
torical context that bordered on the euphoric.
At home, the Iraqi invasion of Kuwait has
Its introduction noted:
caused obvious economic difficulties. Oil prices
State-centered, command-and-control systems
were driven up for several months. Long-term
seem to be decomposing. Liberated celebrants
interest rates reflected a risk premium. In the
have cheered the opening of the Berlin wall and
the decline of communist dictators. So too have
face of uncertainty, consumers and investors
liberated Panamanians celebrated the fall of the
have understandably held back. The resulting
dictator in near-by Panama
economic slow-down has taken its toll. And the
This is not small stuff. It is another giant leap
problem of the fiscal deficit has thus been
of the human spirit yearning to breathe free.
compounded by the effects of the crisis in the
The introduction, then, went on to lament:
Gulf.
Yet this great historical shift has been almost
Yet in this somber domestic picture, too,
trivialized in its translation into public debate
there is cause for hope. The move toward satis-
about the budget. The issue has been framed as:
"How big is the 'peace dividend"?"-and, in effect,
factory resolution of the Gulf crisis is un-
"How can I get mine?"
equivocally positive for the domestic economy.
And the residual fiscal crisis, though regret-
This year's budget goes to press at a more
somber moment, when the fragility of peace
table, has the potential to foster-even to ac-
celerate-domestic reform. Within the frame-
has again been made painfully evident. In Au-
gust, a militaristic dictator brutally invaded
work of the 1990 Budget Agreement, construc-
tive reforms can be framed. Though less grand
a peaceful neighbor. He refused to conform to
international norms established by the United
than a New World Order, steps toward a new
domestic order can continue to be advanced—
Nations. He destabilized a region that is vital
to the global economy-a region which, for too
at least at the margin of practicable change.
long, has been the victim of conflict.
It is in this spirit that the new budget is
As a result, suffering has increased within
presented.
the region and throughout the world. Innocent
This introduction:
people have been hurt. Economies have weak-
reviews the deficit outlook;
ened. Allied military action has been under-
taken as a last resort to enforce the resolutions
outlines a reform agenda; and
of the United Nations. The early action has
discusses the need for a new conception
gone well. But precious lives have been lost.
of "program life cycles"-within the frame-
The poignant human costs of protecting free-
work of the 1990 Budget Act.
dom and the civilized rule of law have again
been made clear.
THE DEFICIT OUTLOOK-
Yet, although the moment is somber, there
WORSE BEFORE BETTER
is cause for hope.
The liberation of Kuwait has begun. But of
The new budget is for fiscal years 1992 and
more far-reaching significance is this: With
beyond. For each of these years, the consoli-
U.S. leadership, the global response to the
dated deficit estimate promises to be better
98
THE BUDGET FOR FISCAL YEAR 1992
than the year before. The projected deficit goes
includes $30 billion in budget authority and
down by $37 billion from 1991 to 1992. It
$8 billion in outlays (net of foreign con-
reaches balance by 1996. (See Table II-1.) As
tributions) as a placeholder for the incremental
a percent of GNP, it declines from 5.7 percent
costs of Operation Desert Shield. This does not
(near the recent high of 6.3 percent in 1983)
fully cover the additional costs of actual com-
to roughly 1 percent in the mid-1990s. The
bat, however. With substantial foreign con-
longer-term trend is favorable by several dif-
tributions, the adverse financial effects on the
ferent measures of "the deficit." (See Chart
United States should be mitigated. But neither
II-1). But the inescapable reality of the near
full costs not total contributions can be reliably
term is: the deficit outlook is not good.
estimated as the budget goes to press.
The consolidated deficit for the current fiscal
Even without the full net costs of Desert
year, 1991, is estimated at $318 billion. This
Shield (which includes Desert Storm), this
Table II-1. DEFICIT ESTIMATES, 1991-1996
(In billions of dollars)
1991
1992
1993
1994
1995
1996
Consolidated Baseline
-310.3
-284.9
-212.3
-67.5
-12.1
14.1
Consolidated Baseline with pessimistic economics
-336.1
-326.0
-262.1
-126.3
-75.3
-61.4
Consolidated Policy
-318.1
-280.9
-201.5
-61.8
-2.9
19.9
Policy excluding Social Security
-378.6
-343.3
-274.9
-151.1
-106.8
-101.9
Policy excluding Deposit Insurance
-206.6
-192.8
-157.3
-99.9
-45.3
-10.0
Policy excluding Social Security and Deposit Insurance
-267.1
-255.2
-230.7
-189.2
-149.1
-131.8
Chart II-1. DEFICITS AS A PERCENT OF GNP
PERCENT
7
POLICY EXCLUDING
SOCIAL SECURITY
6
CONSOLIDATED BASELINE WITH
PESSIMISTIC ECONOMICS
5
CONSOLIDATED BASELINE
4
POLICY EXCLUDING
SOCIAL SECURITY
3
&
DEPOSIT INSURANCE
POLICY EXCLUDING
2
DEPOSIT INSURANCE
CONSOLIDATED
1
POLICY
o
-1
1991
1992
1993
1994
1995
1996
99
П. DIRECTOR'S INTRODUCTION AND OVERVIEW TABLES
1991 deficit estimate represents a substantial
The return to healthy economic growth-and
deterioration relative to the 1990 deficit of
the associated improvement in the deficit-as-
$220 billion. It is worse than was estimated
sumes, and probably requires:
last summer, by both the Administration and
improvement in all three areas-the Gulf,
the Congressional Budget Office, during the
the financial system, and monetary policy;
Budget Summit negotiations. And it is far
worse than the baseline deficit estimated a
adoption of the growth-oriented policies
noted in the President's Message and dis-
year ago.
cussed further below; and
The two largest elements of this deteriora-
tion for 1991-each far greater than all others
full implementation of the 1990 Budget
Agreement-which reduces the previous
combined-are:
baseline deficit by $72.9 billion for 1992
an increase of $105.5 billion in estimated
and $138.1 billion for 1995.
outlays for thrift and bank insurance (part
of which is due to a change in accounting
As always, there is a risk that these are
excessively hopeful assumptions. But with the
treatment); and
new Budget Agreement, the risk is arguably
a decrease of $87 billion in estimated re-
lower than in previous years.
ceipts (principally due to a weaker econ-
Prior to enactment of the Agreement's proce-
omy).
dural reforms, there were incentives for the
The longest period of peacetime economic
Administration to err in the direction of rosy
growth has been interrupted. Revised economic
projections. There were related incentives for
assumptions now reflect two consecutive quar-
the Congress first to criticize these projections
ters of negative real growth-the fourth quar-
(visibly) and then to adopt the same projec-
ter of calendar year 1990 and the first quarter
tions (invisibly). Now, these perverse incen-
of calendar year 1991. (See Table III-1)
tives have been reduced.
This temporary economic downturn was not
For this and other reasons, the Administra-
assumed last year by the Administration or
tion's projections are closer to mainstream
by most outside economists. Indeed, it was not
thinking. The calendar year 1991 real growth
the result of ordinary causes. It did not start
forecast is almost identical to the current con-
as a turn of the "business cycle." Inventories
sensus forecast of the "Blue Chip" economic
were relatively low. And it was not a correction
experts, and is actually below that of the Con-
for "overheating."
gressional Budget Office (CBO). The long-term
growth forecast, although higher than that of
Among the principal causes of the weaker
CBO, is nonetheless below America's post-
economy were a combination of the following:
World-War-II average. Thus, the deficit out-
monetary policy, which for an extended pe-
look presented here may be judged to be more
riod (roughly two years) remained on the
credible than in the past.
tighter side of its target range-not seek-
Unfortunately, however, this does not nec-
ing to halt real growth, but slowing
essarily mean that it is correct. Even in the
growth out of concern for inflation and dol-
best of times, macroeconomics is a highly fal-
lar weakness;
lible "science." (Macroeconomists are often clos-
the "credit crunch"-as the banking sys-
er to each other than to reality.) And as this
tem (both banks and regulators) struggled
budget goes to press, there are crucial un-
to react to the S&L experience, new cap-
knowns: the timing and character of events
ital requirements, problems in the real es-
necessary to resolve the crisis in the Gulf.
tate market, and fears of a more general
These are fundamentally relevant uncertain-
slowdown; and,
ties. Much will turn on them.
perhaps most significantly, the multiple
So Chapter III, "Economic Assumptions and
adverse economic and psychological effects
Sensitivities," bears special attention. It dis-
of the crisis in the Gulf (as noted above).
cusses the extent to which the deficit outlook
100
THE BUDGET FOR FISCAL YEAR 1992
should be modified if one wishes to use dif-
adopt choice-oriented certificate programs.
ferent economic assumptions.
Greater choice would help foster a more mar-
ket-like system and hold schools more account-
able for performance. It is only with perform-
REFORMIST STEPS-TOWARD A
ance-based choice that more fundamental re-
NEW DOMESTIC ORDER
form is likely to be achieved. (See Chapters
IV.A. and V.A.)
Whatever one's economic assumptions,
America nonetheless can-and must-continue
(2) Research and Development
its historic mission: protecting freedom, accel-
America's long-term position internationally
erating innovation, assuring fairness, increas-
and the potential for improvement in life at
ing growth and opportunity, while limiting the
home depend fundamentally upon investment
expansion of intrusive and inefficient govern-
ment. The President's 1992 budget limits the
in a strong R&D base. Unfortunately, short-
term claims and pressures often tend to drive
growth of Federal spending to 2.6 percent-
less than the inflation rate. Within this limit,
out long-term investment. R&D is especially
vulnerable in both the public and private sec-
it nonetheless helps advance the process of
tors. Since the 1960s, investment in civilian
American renewal. The budget proposes reform
R&D, particularly, has experienced a trouble-
measures in each of the following domestic
some decline as a percent of GNP. To counter
areas:
these tendencies, the President's budgets have
(1) Education Reform
sought to protect and increase R&D invest-
ment-without having the government cross
The United States spends more per student
the line into the problematic area of "indus-
on education than almost every other country
trial policy."
on earth. Yet, the average performance of
American elementary and secondary school
This budget proposes to make the R&D tax
students on internationally administered tests
credit permanent in order to encourage more
is disgracefully low. The performance is below
private R&D; while it also increases the direct
that of America's major trading partners. It
Federal investment to $76 billion for 1992-
falls consistently near the bottom. The current
up $8.4 billion to the highest level ever. Basic
system unnecessarily holds young people back,
research would increase to $13 billion, with
holds workers back, and holds the Nation
pathbreaking efforts that range from high-en-
back. Clearly, more of the same cannot be ac-
ergy physics to what promises to be one of
ceptable.
the most important and far-reaching research
projects in human history: the Human Genome
In coordination with the Nation's Governors,
Project. In applied civilian R&D, exciting in-
the President has initiated an ambitious na-
vestments range from materials processing, to
tional reform effort. Consistent with that re-
biotechnology, to high-speed rail transport and
form effort, the budget gives special emphasis
electric battery technology, to high perform-
to increased investment in child care (includ-
ance computing. This investment in R&D un-
ing almost $10 billion in tax credits and $732
questionably has the potential-in time-to
million for the new child care block grant),
bring radical improvement in the quality of
Head Start ($2.1 billion), compensatory edu-
human life across-the-board. (See Table II-2
cation ($6.4 billion), mathematics and science
and Chapter IV.C.)
education ($1.9 billion), and the measurement
of results.
(3) Financial Sector Reform
To accelerate the more basic reforms that
The S&L crisis was a central focus of reform
are necessary, the budget provides $690 mil-
last year. This year, public attention has
lion for a new Educational Excellence Act.
begun to shift to the risks associated with
And, perhaps most importantly, it encourages
banks. While the analogy with S&Ls is not
increased parental choice through: dem-
appropriate, there unquestionably are risks.
onstration grants, greater flexibility for States,
From a budgetary perspective, they are re-
an information clearinghouse, and a new in-
flected in the baseline projection for the Bank
centive fund for States and localities that
Insurance Fund. In the absence of remedial
101
П. DIRECTOR'S INTRODUCTION AND OVERVIEW TABLES
Table II-2. ENHANCING RESEARCH AND DEVELOPMENT AND
EXPANDING THE HUMAN FRONTIER-HIGHLIGHTS
(Dollar amounts in millions)
Budget Authority
1991
1992
Dollar
Percent
Enacted
Proposed
change
change
Basic Research
Doubling the NSF budget
2,316
2,722
+406
+18
Increasing Basic Biomedical Research at NIH
4,634
4,968
+334
+7
Human Genome Project
135
169
+35
+26
Agricultural Research Initiative
73
125
+52
+71
Superconducting Super Collider
243
534
+291
+120
Applied Research
High Performance Computing and Communications
489
638
+149
+30
Energy R&D
676
903
+227
+34
Advanced Manufacturing and Materials
1,316
1,310
-6
-
HIV/AIDS
1,152
1,210
+58
+5
Moving Fusion Energy from Science to Engineering
275
337
+62
+23
Aeronautics R&D
482
543
+61
+13
Expanding R&D at the National Institute of Standards and Tech-
nology
215
248
+33
+15
Maintaining National Security: Defense R&D
37,783
43,247
+5,464
+14
Expanding the Geographic Frontier: Space Exploration
Space Transportation Infrastructure
4,801
5,517
+716
+15
Space Science
1,774
2,141
+367
+21
Mission to Planet Earth (Global Change)
954
1,186
+232
+24
Mission From Planet Earth
2,199
2,470
+271
+12
Expanding the Human Frontier through Biotechnology
3,788
4,107
+319
+8
legislative action, the Fund balance would turn
ance, the tax system has been radically im-
negative in 1992. (See Chapter VIIIA)
proved. As a general matter, both the tax sys-
tem and the taxpayer deserve a rest. Still,
But the issues involved are far broader than
there is one area that continues to merit fur-
merely the accounting status of the Bank In-
ther reform: the need to strengthen incentives
surance Fund. Financial markets have become
for saving and long-term investment.
global. So has competition in financial services.
Technological advances have changed both the
Accordingly, the President's budget proposes
character of services and of service-providers.
incentives to encourage: family savings, home-
Yet, the legal and regulatory framework at-
ownership, longer-term investment, and in-
tempting to govern the American financial
vestment in Enterprize Zones. (See Chapter
service sector has not adapted. It is outdated-
X and the related discussion of pay-as-you-go
as will be many American competitors if the
requirements in Chapter XIV.)
framework is not modernized.
(5) "Entitlement" Reform
With this problem in clear view, the Presi-
dent is proposing a comprehensive reform of
In looking at the changing composition of
both deposit insurance and the legal-regu-
the Federal budget since the 1960s, two trends
latory framework governing the financial serv-
stand out:
ices sector. (See associated Treasury study.)
First, the budget is being taken over by
so-called "mandatory" or "entitlement
or
(4) Incentives for Saving and Investment
programs. These are largely transfer pay-
In the past decade, significant tax bills have
ments, which are not now subject to an-
been enacted at the rate of almost one per
nual appropriation. They have grown from
year-including historic tax reform. On bal-
28 percent of the budget in President Ken-
102
THE BUDGET FOR FISCAL YEAR 1992
Chart II-2.
PERCENT
"MANDATORY" PROGRAMS ARE TAKING
OF TOTAL
OVER THE BUDGET
SPENDING
60
MANDATORY
DEFENSE
50
40
ao
20
DOMESTIC DISCRETIONARY
to
o
1962
1967
1972
1977
1982
1987
1992
DOMESTIC DISCRETIONARY, DEFENSE, AND MANDATORY SPENDING
19928
(Outlays)
BILLIONS
800
700
MANDATORY
600
500
DEFENSE
400
300
200
100
DOMESTIC DISCRETIONARY
O
1982
1967
1972
1877
1982
1987
1992
103
П. DIRECTOR'S INTRODUCTION AND OVERVIEW TABLES
nedy's administration to nearly 52 percent
those with greater need; standardize benefits
today. (See Chart II-2).
to increase payments to survivors of lower-
ranking military personnel; and limit farm
Second, within the "mandatory" total,
subsidies for individuals with non-farm income
funding for the non-poor has increased far
over $125,000. (See Chapter V.C.)
more than for the poor. (See Chart II-3.)
No serious effort to address the deficit can
(6) Health System Reform
ignore the 52 percent of the budget comprised
by "mandatory" programs. That is why the
Although the American health system leads
1990 Budget Act included measures to reduce
the world in research and in many specialized
the growth of "mandatories" by $100 billion
areas, its general performance is not yet satis-
over five years. But that is still not enough.
factory. Its costs continue to grow faster than
both inflation and the economy. Total national
Accordingly, this budget proposes to reduce
expenditures on health now claim 13.5 percent
"mandatories" by another $47 billion over five
of GNP. Federal health spending is over 15
years. (See Table II-9.) In addition, the budget
percent of the budget. This enormous and ris-
reflects an important new emphasis for reform:
ing claim on resources comes at the expense
increasing fairness in the distribution of bene-
of what might otherwise be the expansion of
fits, reducing subsidies for those who do not
services for those who do not have fair or ade-
need them.
quate access to the health system. And not-
withstanding the huge expenditures, indicators
In particular the budget proposes to: reduce
such as infant mortality and preventable death
the subsidy of Medicare "Part B" premiums
and disease remain unnecessarily high.
for individuals with annual incomes over
$125,000; restructure higher education assist-
The American health system is a hybrid-
ance to serve the needy better; reallocate
partly government-managed, partly private,
school lunch subsidies to increase benefits for
partly in-between; partly a model of excellence,
Chart II-3. MANDATORY SPENDING BY INCOME
19928
(Outlays)
BILLIONS
850
600
550
SPENDING ON PEOPLE OF ALL INCOMES
500
450
400
350
300
250
200
150
SPENDING ON POOR PEOPLE
100
50
o
1962
1967
1972
1977
1982
1987
1992
104
THE BUDGET FOR FISCAL YEAR 1992
and partly a disgrace. The challenge of reform
tributed to all elements of the Strategy. (See
is complex. Comprehensive reform plans
Chapter V.B.)
abound. But none is a certain remedy, and
some threaten to cause as many problems as
(8) Housing Reform
they would cure. None is likely to be imple-
American public policy reflects a long-stand-
mented quickly.
ing commitment to the importance of invest-
For the coming year, the Administration will
ment in housing. But the results have been
mixed-and clearly unsatisfactory for many of
continue to advance reform in manageable
steps-implementing last year's expansion of
the poorest Americans. Part of the problem
has been conceptual: too great an emphasis
access to Medicaid and the reform of Medi-
on direct governmental ownership and man-
care's physician payment system, while also
agement; too little emphasis on opportunities
accelerating reform in two new areas:
for poor people to benefit from choice and
Malpractice reform. The budget proposes
homeownership.
new Federal financial incentives for States
The budget reflects a reformist shift in con-
to adopt model malpractice reform meas-
cepts: It proposes to fund fully ($2.1 billion
ures. This can help reduce both the direct
in 1992) the new HOPE program-creating op-
costs of malpractice insurance and the in-
portunities for tenant management and owner-
direct costs of "defensive medicine"-while
ship. It requests a 38 percent increase in
expanding the availability of medical serv-
vouchers for low income people-to increase
ices and increasing attention to appro-
their power in the marketplace. And, on the
priate standards of care.
tax side: it would permit the use of Individual
Investment in Prevention. The budget pro-
Retirement Accounts by young families and
poses to fund a concerted effort-through
first-time homebuyers; and it would offer spe-
both education and increased investment
cial incentives for investment in Enterprise
in preventive services-to stop avoidable
Zones-a refundable tax credit for wages,
health problems before they start. In doing
expensing of investor purchases of new cor-
so, it gives special emphasis to programs
porate stock, and a zero capital gains rate for
affecting children-and to prenatal care,
investment in tangible property within Enter-
infant nutrition, cancer screening, injury
prise Zones. (See Chapter V.A.)
control, smoking cessation and other mat-
ters of personal responsibility. (See Tables
(9) Transportation Infrastructure
Investment
II-3 and II-4, and see Chapter IV.B.)
The Nation's transportation systems are fun-
(7) Drug Abuse Reduction
damental to both economic productivity and
the quality of life. And the stresses upon these
One of the most troubling breakdowns of
systems continue to mount. While attending
personal responsibility is reflected in drug
to important limits on the Federal role and
abuse. In the 1970s and 1980s, the problem
responsibility, the 1992 budget makes a major
grew to near-epidemic proportions. The Presi-
contribution to expansion and improvement of
dent advanced the first National Drug Control
the transportation infrastructure:
Strategy in September 1989. Several recent
studies have shown encouraging results. Co-
Annual obligations of the Highway Trust
caine use seems to have declined significantly
Fund would be increased to $16 billion in
from levels in the mid-1980s. But the drug
1992 and to more than $20 billion by 1996.
abuse problem is far from solved
In seeking to reauthorize the Federal
highway program, the Administration
Accordingly, the budget continues to increase
would simplify and strengthen the existing
the resources allocated to the National Drug
program-establishing a new National
Control Strategy. For 1992, the Federal share
Highway System, giving States greater
increases by $1.1 billion to $11.7 billion (80
flexibility with a new block grant program,
percent higher than when the President took
and allowing more innovative financing
office). The increase in these resources is dis-
with private participation. In addition, the
105
II. DIRECTOR'S INTRODUCTION AND OVERVIEW TABLES
Table II-3. SPENDING ON SELECTED PROGRAMS SERVING CHILDREN
INCREASES 9.5 PERCENT IN 1992
(In millions of dollars)
1992
1990
1991
Proposed
Nutrition:
WIC
2,126
2,350
2,573
Child Nutrition
4,887
5,577
6,066
Other Nutrition
7,985
9,138
9,825
Health:
Targeted Infant Mortality
-
¹³⁴
139
Medicaid
8,200
10,300
12,000
Community/Migrant Health
227
238
238
Immunizations
187
218
258
Maternal/Child Health
554
¹554
554
Other Health
222
264
266
Education and Social Services:
Head Start
1,552
1,952
2,052
Handicapped Education
2,055
2,467
2,730
Compensatory Education
5,368
6,225
6,424
Educational Excellence Act (proposed)
-
-
490
Precollege Math and Science Education
333
515
661
Child Care Block Grant
-
732
732
Foster Care
1,375
2,611
2,186
Social Security
8,375
9,048
9,716
Supplemental Security Income
1,261
3,531
2,497
Aid to Families with Dependent Children and Child Support
12,165
14,008
15,162
Other Education and Social Services
2,453
2,642
2,352
Refundable Tax Credits
6,287
6,941
9,973
Total Children's Funding
65,612
79,345
86,851
, Reflects HHS' plans to reprogram $34 million from MCH Block Grant to Targeted Infant Mortality in 1991. Overall resources
supporting this initiative will total $57 million in 1991 and $171 million in 1992, including funds from other public health grants.
Table II-4. THE BUDGET PROVIDES INCREASES FOR PROGRAMS
FOCUSED ON PREVENTION AND THE NEXT GENERATION
(Obligations in millions of dollars)
1991
1992
Percent
Enacted
Proposed
Increase
Childhood immunization
218
258
+18.3
Infant Mortality Initiative
7,335
8,011
+9.2
(Targeted Infant Mortality Initistive-non-add)
57
171
+300.0
Breast and Cervical Cancer Prevention
269
410
+52.4
Smoking Cessation
90
97
+7.8
Physical Fitness and Diet
122
139
+13.9
Accident and Injury Prevention
1,683
1,907
+13.3
Access to Preventive Health Care
5,410
6,026
+11.4
Family Planning
899
420
+5.3
Lead Poisoning Prevention
8
41
+412.5
Substance Abuse Prevention
1,442
1,515
+5.1
106
THE BUDGET FOR FISCAL YEAR 1992
Table II-5. SELECTIONS FROM THE REFORM AGENDA-
WITHIN THE FLEXIBLE FREEZE FRAMEWORK 1
Area
Highlights
(1) Education Reform:
Long-term national goals-with Governors
Special funding emphasis on early childhood ($87 billion)
Parental choice-new incentive fund ($200 million)
Educational Excellence Act ($690 million)
Higher education funding reform
Math/Science improvement program ($1.9 billion)
(2) Research and Development:
Record level for R&D ($76 billion)
Record level for basic research ($13 billion)
Human Genome Project
Increased emphasis on applied civilian R&D (e.g., materials
processing, biotechnology, high-performance computing)
(3) Financial Sector Reform:
Deposit insurance reform
Recapitalization of Bank Insurance Fund
Comprehensive reform of legal and regulatory structure to mod-
ernize financial services sector
(4) Incentives for Saving and Investment:
Enterprise Zones
Family Savings Account
IRA withdrawal for first-home buyers
Capital gains modification for longer-term investment
(5) Entitlement Reform:
$47 billion savings over 5 years
Increased fairness/reduced subsidies for wealthy
(6) Health System Reform:
Physician payment reform
Malpractice reform
Increased investment in prevention (prenatal care, infant nutri-
tion, cancer screening, education for personal responsibility,
child care)
(7) Drug Abuse Reduction:
National Drug Control Strategy
$1.1 billion increase-to record $11.7 billion (Federal share)
(8) Housing Reform:
Full funding for HOPE ($2.1 billion in 1992)
38 percent increase in vouchers
IRA withdrawal for first-home buyers
Enterprise Zones (refundable wage credit, expensing for new
stock, zero capital gains rate)
(9) Transportation Infrastructure Invest-
New highway program (new National Highway System and new
ment:
block grant)
Major increase in Highway Trust Fund obligations (over $20
billion by 1996)
NASPLAN modernization
Space transportation systems (Shuttle, ASRM, ALS, NASP)
(10) Government Management Reform:
Budget process reform
Regulatory reform
Accounting systems reform
High-Risk Area targeting
Terminations: 238 programs and 3,591 projects
(11) "States as Laboratories":
Demonstrations and waivers
Evaluation of natural experiments
$15 billion program turn-over to States (fully funded)
1 Proposed total governmental spending for 1992 is 2.6 percent greater than 1991 (Le, growth is less than the inflation rate).
107
П. DIRECTOR'S INTRODUCTION AND OVERVIEW TABLES
budget proposes funding for major techno-
application of Risk Management Budget-
logical advances in high-speed rail and
ing. (See Chapter IX.C.)
"smart cars/smart highways," which could
Accounting reform and oversight. The
help relieve the stress on the current sys-
budget continues to expand its analysis
tem. (See Chapter IV.D.)
and presentation of "Hidden Liabilities."
The budget would continue to modernize
(See Chapter VIII.) The Administration is
the national airspace system ("NAS-
implementing the new Chief Financial Of-
PLAN")-increasing funding for Federal
ficers legislation-improving accounting
Aviation Administration facilities, equip-
standards, financial reporting systems,
ment, and systems by 29 percent, to $2.7
and audits. The budget explicitly identifies
billion.
High-Risk Areas of vulnerability to fraud,
waste, and abuse. And, as appropriate, the
Within the budget for space exploration
Administration is engaging special teams
and development, there is funding for the
in the effort to reduce these vulnerabil-
space shuttle, a new advanced solid rocket
ities. (See Chapter IXA)
motor (ASRM), a new advanced launch
system (ALS), and a national aerospace
Reducing waste and improving returns on
plane (NASP). As the use of space becomes
investment. This is not only a problem of
increasingly relevant, these essential ele-
accountancy and oversight, as suggested
ments of the space transportation system
above. It is also a problem requiring great-
should be better understood-and fund-
er program evaluation and a willingness
ed-as a vital part of America's infrastruc-
to terminate outdated or ineffective pro-
ture investment. (See Chapter IV.C.)
grams and projects. (See Chapter IX.B.)
The problem, however, goes beyond con-
(10) Governmental Management Reform
ventional matters of accounting and eval-
uation-as discussed further below.
Any 1.4 trillion-dollar-per-year enterprise
(e.g., the Federal Government) is bound to
show signs of failure in one place or another.
PROGRAM LIFE-CYCLES-AND
But the public is demanding; and respect for
STATES AS LABORATORIES
governmental performance remains under-
standably low. There is much room for man-
Clearly, the government has a need and a
agement improvement.
responsibility to improve the return on invest-
ment of Federal dollars. And improved ac-
Discontent with government is often visible
counting, analysis, and/evaluation have an im-
(and deemed to be newsworthy). The less
portant role to play in this effort. But beyond
glamorous issues of management improvement
these rather technical issues, there are larger
typically are not. Nonetheless, management re-
structural issues that also require attention.
form continues to be advanced:
Fortunately, the 1990 Budget Act creates a
Budget process reform. The Administration
framework that can encourage a more basic
is implementing the important and valu-
reform perspective.
able reforms of the 1990 Budget Agree-
ment-enforceable spending caps, "pay-as-
The discussion of Entitlement Reform
you-go," and credit reform. Beyond these,
(above) has highlighted the budgetary "take-
the Administration continues to seek the
over" by mandatory programs-and the tend-
line-item veto, joint (not concurrent) budg-
ency of such programs increasingly to benefit
et resolutions, biennial budgeting, and a
the non-poor. The pay-as-you-go reforms may
balanced budget Constitutional amend-
serve not only to restrain the further expan-
ment. (See Chapter IX.D.)
sion of "mandatories." They should also en-
courage greater anti-poverty efficiency in the
Regulatory reform. The principles of regu-
design of such programs.
latory reform continue to be advanced
through the President's Competitiveness
With respect to discretionary programs, the
Council and the Office of Information and
effect of budget process reforms may be an
Regulatory Affairs-and through broader
even more direct increase in attention to pro-
108
THE BUDGET FOR FISCAL YEAR 1992
gram efficiency, effectiveness, and return on
vestments have been decreasing as a share of
investment. This should be a natural out-
domestic discretionary spending. (See Chart
growth of the existence of fixed, enforceable
II-5.) The President's budget seeks to correct
caps on discretionary spending. With un-
this trend by increasing investment in R&D,
equivocal limits on available resources, com-
prevention, early childhood, and transportation
petition on the merits should increase.
infrastructure-areas with higher return.
As one begins to think about returns on in-
The expectation of a possible shift toward
vestment, it is perhaps interesting to consider
investment in programs with higher return
how much Federal spending might be consid-
may, of course, prove to be no more than a
ered "investment" at all. This question in-
request and a hope. The existing domestic dis-
volves highly arguable definitional issues.
cretionary program structure has, to date,
proven to be rather rigid. Reform will require
If one puts defense aside, and looks at how
a new flexibility and a new dynamic.
much nondefense spending is oriented toward
longer-term investment (returns accruing over
In the past, domestic discretionary programs
a period greater than five years), one finds
often came into existence to address one al-
that expenditures for short-term benefits clear-
leged "urgent priority" or another. The urgency
ly dominate. Long-term investments have been
may have derived from a transitory emer-
declining as a percent of GNP. (See Chart
gency, a desire for "demonstration," or a per-
II-4.) This is, in part, a reflection of the budg-
ceived need for Federal leadership in areas
etary "takeover" by transfer payments to indi-
where States and localities were slow to rec-
viduals ("mandatories").
ognize or accept responsibility. As an abstract
But even if one focuses only on domestic
matter, this rationale may have been legiti-
mate.
discretionary programs (i.e., excluding
mandatories), one finds that longer-term in-
Chart 11-4. CORE GOVERNMENT, LONG-TERM INVESTMENTS,
AND SHORT-TERM BENEFITS
PERCENT
(Total Domestic Discretionary and Mandatory Outlays as a Percent of GNP)
15
14
13
SHORT-TERM BENEFITS
12
11
10
.
8
7
$
5
LONG-TERM INVESTMENTS
4
3
2
CORE GOVERNMENT
1
0
1962
1967
1972
1977
1982
1987
1992
NOTE: Long-term Investments and short-term benefits Include spending on both people and physical investments.
109
II. DIRECTOR'S INTRODUCTION AND OVERVIEW TABLES
Chart II-5. CORE GOVERNMENT, LONG-TERM INVESTMENTS,
AND SHORT-TERM BENEFITS
PERCENT
(As a Percent of Total Domestic Discretionary Outlays)
70
LONG-TERM INVESTMENTS
60
50
40
SHORT-TERM BENEFITS
30
20
CORE GOVERNMENT
10
0
1962
1967
1972
1977
1982
1987
1992
NOTE: Long-term investments and short-term benefits Include spending on both people and physical Investments.
Once in existence, however, programs have
budget authority in 1992. (See Chapter
tended to become fixtures in the budget. There
IX.B.)
is, in practice, little evidence of a program life-
Some programs should decline. This
cycle-other than a move toward immortality.
should be the case when their relative pri-
In a world of fixed spending caps, there will
ority is judged to have decreased. This
be no room for emerging priorities if the pro-
budget proposes declines of $8.3 billion in
grams-of-old remain immortal. To allow adap-
budget authority from an additional 109
tation to shifting priorities, there will have to
domestic discretionary programs. These
be a more dynamic concept of program life-
programs were funded at a total of $27.4
cycles:
billion in 1991. Reasons for proposed re-
ductions are presented in Chapter IX.B.
Some programs and projects will have to
die. This should be the case, for example,
Some programs should increase. The re-
when a program (whether demonstration
ductions and terminations noted above
or not) has proven a failure, or when the
help finance program increases in areas
urgency of a past priority has been over-
judged to merit higher priority or im-
taken by events. It should also be the case
proved return on investment. 250 domestic
when a demonstration has proven a suc-
discretionary programs are specifically rec-
cess and is, therefore, available for rep-
ommended for increases totaling $17.8 bil-
lication and funding through other
lion. (See Table B-6 in Chapter IX.B and
sources. In applying these principles, this
the associated detail in Chapter XIII.)
budget proposes the outright termination
Some programs should be consolidated and
of 238 specific domestic discretionary pro-
turned over to the States-funded in more
grams and 3,591 specific projects. These
flexible form. Programs appropriate for
terminations would save $4.6 billion in
such turnover may be selected from two
110
THE BUDGET FOR FISCAL YEAR 1992
broad categories: those whose purposes are
welfare reform, and transportation fi-
judged by States to be of continuing value,
nance. (See Chapter VI.)
but whose relative funding priority at the
The Administration seeks to reenforce this
Federal level is declining; and those which
natural power of the States-and to help
seem, in any case, to be appropriate for
build upon it.
flexible management by the States.
The President has established a target of
In sum, the opportunities for constructive re-
$15 billion in program turnovers for the
form are many. (See Table II-5.) Incentives
States. A list of possible turnover can-
for choice, innovation, and improved perform-
didates totaling over $20 billion is at Table
ance can be advanced in education. Investment
II-9. The actual selection of programs for
in path-breaking R&D can be increased. The
turnover would have to be authorized by
financial service sector can be modernized. Tax
the Congress-in consultation with the
incentives for saving and long-term investment
Administration and the Governors. (After
can be strengthened. The budgetary "takeover"
the actual selection is determined, the cur-
by "mandatory" programs can be slowed; and
rent distribution of such programs by
the benefits of entitlements can be better tar-
State would be calculated. The Adminis-
geted for the needy. The problems of the
tration would then propose to replace
health system can be alleviataed, to some de-
these programs with a single consolidated
gree, by physician payment reform, mal-
block grant to the States. The formula for
practice reform, and an emphasis on preven-
this new block grant would approximate
tion. The National Drug Control Strategy can
the same distribution to the individual
be carried forward aggressively to its next
States as they would receive under the
stage. The approach to housing can be im-
present program structure-seeking to as-
proved by greater emphasis on choice, home-
sure that no State would be harmed by
ownership, and Enterprise Zones. Stresses on
the move to a new, consolidated block
the transportation infrastructure can be re-
grant.)
lieved. And the government itself can be man-
The value of this turn-over approach is
aged better-through budget process reform,
as follows. It allows the Federal Govern-
accounting reform, program evaluation, regu-
ment to reduce overhead. It allows States
latory reform, and reenforcement of the inno-
to manage a pool of financial resources
vative power of "States as laboratories."
more flexibly. It moves power and deci-
These reforms can all be accommodated
sionmaking closer to the people. And it
within the "flexible freeze" (with total spending
reenforces another reformist theme of this
growing at less than the inflation rate) and
Administration: appreciation and encour-
within the limits of the 1990 Budget Act.
agement of "States as Laboratories."
This last point is especially important. The
If these reform measures are adopted-and
American Federal system has within it an
assuming satisfactory resolution of the Gulf
crisis in the not-too-distant future-the econ-
enormous power for innovation: the natu-
ral variation and experimentation among
omy can not only return to economic growth.
the States. For too long, this potential has
It can move on toward a new record for eco-
been under-appreciated at the Federal
nomic expansion as America advances to the
level. Nonetheless, the reality is that some
21st century.
of the most interesting examples of inno-
vation are being set by the States-in
RICHARD DARMAN
areas ranging from educational choice, to
DIRECTOR,
enterprise zones, to health cost control,
OFFICE OF MANAGEMENT AND BUDGET
111
II. DIRECTOR'S INTRODUCTION AND OVERVIEW TABLES
Table II-6. SPENDING, REVENUE, AND DEFICIT, 1991-1996
(Dollar amounts in billions)1
1991
1992
1993
1994
1996
1996
Dollars
Dellars
%
Dollars
%
Dollars
%
Dollars
%
Dollars
%
Change
Change
Change
Change
Change
Spending:
Discretionary:
Defense
307.8
300.4
-2.4
293.3
-2.4
287.6
-1.9
289.2
0.5
293.8
1.6
International
18.7
19.6
4.7
20.4
4.2
21.5
5.1
21.8
13
22.0
0.9
Domestic
199.8
212.0
6.1
223.2
5.3
228.9
2.6
231.7
1.2
238.5
2.9
Subtotal, discretionary
526.3
532.1
1.1
536.9
0.9
538.0
0.2
542.7
0.9
554.2
2.1
Mandatory
686.2
707.5
3.1
705.3
-0.3
673.5
-4.5
713.8
6.0
775.6
8.7
Interest
197.0
206.3
4.7
212.0
2.8
215.5
1.6
213.8
-0.8
211.0
-1.3
Total spending
1,409.6
1,445.9
2.6
1,454.2
0.6
1,427.1
-1.9
1,470.3
3.0
1,540.8
4.8
Total revenues
1,091.4
1,165.0
6.7
1,252.7
7.5
1,365.3
9.0
1,467.3
7.5
1,560.7
6.4
Consolidated deficit
318.1
280.9
-
201.5
-
61.8
-
2.9
-
-19.9
-
Memorandum
Deposit insurance (included above):
Resolution Trust Corporation
84.6
76.1
-
34.3
-
-47.6
-
-45.7
-
-32.0
-
Bank Insurance Fund
15.9
9.7
-
8.0
-
6.8
-
0.9
-
0.6
-
FSLIC Resolution Fund
11.1
3.3
-
2.8
-
2.2
-
2.7
-
1.5
-
Savings Association Insurance Fund
and Other
_.
-1.0
-
-0.8
0.4
-0.3
.
-
-
-
-
Subtotal, Deposit insurance
111.5
88.1
-
44.2
-
-38.1
-
-42.3
-
-29.9
-
Desert Shield (placeholder, included
above)
8.2
4.6
-
0.8
-
0.4
-
-
-
-
-
Social Security (included above):
Operating surplus
40.3
38.7
-
45.3
-
56.6
I
65.5
-
77.2
-
Interest
20.2
23.7
-
28.0
-
32.8
-
38.3
-
44.6
-
Total
60.4
62.4
-
73.3
-
89.3
-
103.9
-
121.8
-
"Percent change measures change from previous year.
*850 million or less.
112
THE BUDGET FOR FISCAL YEAR 1992
Table II-7. RECEIPTS MEASURES, 1991-1996
(In millions of dollars)
1991
1992
1993
1994
1995
1996
Enhance long-term investment'
400
3,000
1,700
900
1,800
1,700
Extend HI coverage to State and local employees'
-
1,125
1,537
1,545
1,548
1,544
Improve retail compliance with alcohol special occupa-
tional taxes'
-
43
43
9
9
9
Increase IRS enforcement funding
I
35
133
176
180
184
Extend tax deadlines for Desert Shield (placeholder) par-
ticipants
-38
21
6
-
-
I
Extend railroad UI reimburseable status'
-10
2
10
8
-1
-1
$
*
8
.
.
Increase HUD land sales fee
-
Extend abandoned mine reclamation fees
-
-
-
-
-
260
Extend R&E credit
-
-500
-1,000
-1,300
-1,600
-1,800
Extend R&E allocation rules
-
-346
-264
-
-
1
Establish family savings accounts
-
-300
-800
-1,300
-1,800
-2,300
Extend health insurance deduction for self-employed
-
-120
-239
-
-
-
Extend low-income housing credit
-
-59
-215
-305
-337
-337
Extend targeted jobs credit
-
-56
-100
-64
-29
-20
Establish enterprise zones
-
-50
-160
-310
-520
-750
Waive excise tax for certain early withdrawals from IRAs
-
-50
-70
-100
-110
-110
Extend business energy credits
-
-30
-17
4
2
1
Double and restore adoption deduction
-
-
-3
7
-3
-3
Extend highway trust fund taxes'
-
-
-
-
-
-2,722
Total effect on receipts
352
2,715
561
-740
-861
-4,345
Total effect on receipts with enhance long-term invest-
ment at zero
-48
-285
-1,139
-1,640
-2,661
-6,045
*$500,000 or less.
"The proposal to enhance long-term investment in shown as estimated by the Treasury Department's Office of Tax Analysis
(OTA) Because the methodological differences among OTA, Congressional estimators, and outside experts have not yet been
resolved, totals are presented with the Administration's estimate and with a zero (neutral) entry for the proposal.
"Net of income tax offsets.
Table II-8. DEFICIT IMPACT OF ADMINISTRATION PAY-AS-YOU-GO
PROPOSALS
(In billions of dollars)
1991
1992
1993
1994
1995
1991-95
Deficit impact of Administration pay-as-you-go proposals:
Direct spending (see Table II-8)
-0.1
-6.3
-9.3
-9.0
-11.0
-35.8
Receipts:
Extenders (selected)
.
1.1
1.8
1.7
2.0
6.6
Long-term investment incentive¹
-0.4
-3.0
-1.7
-0.9
-1.8
-7.8
AB other
$
-0.8
-0.6
0.2
0.9
-0.3
Total, receipts
-0.4
-2.7
-0.4
0.9
1.0
-1.5
Total, receipts with long-term investment incentive
.
at zero
0.3
13
1.8
2.8
6.3
Total, met deficit impact
-0.5
-9.0
-9.8
-8.1
-9.9
-37.3
Total, net deficit impact with long-term investment in-
centive at zero
-0.1
-6.0
-8.1
-7.2
-8.1
-29.5
*$50 million or less.
"The proposal to enhance long-term investment is shown as estimated by the Treasury Department's Office of Tax Analysis
(OTA) Because the methodological differences among OTA, Congressional estimators, and outside experts have not yet been
resolved, totals are presented with the Administration's estimates and with a zero (neutral) entry for this proposal.
113
II. DIRECTOR'S INTRODUCTION AND OVERVIEW TABLES
Table II-9. PROPOSED POLICY CHANGES IN MANDATORY PROGRAMS
(Outlays; in millions of dollars)
1992
1993
1994
1995
1996
Department of Agriculture
Commodity Credit Corporation: reduce subsidies to those
with off-farm income over $125,000
-36
-90
-90
-90
-90
Coup Insurance: increase farmer responsibility for premium
-77
-167
-164
-152
-146
payments
Fund Safety and Inspection Service: seek reimbursement
from industries for certain overtime activities
-50
-50
-50
-50
-50
Fand Stamps: effect of increased child support enforcement
-
-10
-20
-30
-34
Miscellaneous User Fees: increase fees for recreation and
grain inspection and establish fees for agricultural mar-
-29
-32
-32
-33
-34
keting
Reral Electrification Administration: continue shift from di-
rect to guaranteed loans
-13
-38
-59
-74
-67
Department of Education
Guaranteed Student Loans: net impact of reducing the
mumber of loans that default by: improving eligibility
screening of schools; enhancing procedures for default col-
lection; requiring risk sharing and increasing loan limita-
-102
-173
-229
-282
-289
tions
Department of Energy
Elk Hills Naval Petroleum Reserve: lease production rights
-1,191
139
120
113
95
Power Marketing Administrations: revise the level and
schedule of the PMAs' debt repayments to the Federal
-402
Government
-377
-382
-406
-417
Strategic Petroleum Reserve: delay required purchase of pe-
36
86
-
-
-
troleum until 1992 and 1993'
Department of Health and Human Services
Family Support: improve the child support enforcement sys-
tem
-120
-129
-142
-163
-179
Fuster Care: limit the Federal Government's payment of ad-
ministrative costs to only those required to provide bene-
its to low-income children
-210
-290
-352
-405
-452
Medicaid: net impact of allowing States to expand medi-
mlly-needy eligibility for pregnant women and children;
strengthening medical child support enforcement; and the
25
75
75
90
95
impact of Medicare proposals
Medicare:
Clinical Labs:
Apply 2% update for 1992 and 1993, only for those
below payment caps
-20
-50
-70
-80
-90
Restore 20% co-insurance, identical to all other Part B
services
-450
-800
-900
-1,020
-1,160
Subtotal, clinical labs
-470
-850
-970
-1,100
-1,250
Coordinated Care Initiative: Begin a Medicare coordi-
nated care initiative whose costs would be largely offset
by: applying home health limits by discipline and estab-
Eahing a uniform disabled/ESRD secondary payor
threshold
-130
25
40
70
195
The SPR proposal saves $123 million in outlays for 1991.
114
THE BUDGET FOR FISCAL YEAR 1992
Table II-9. PROPOSED POLICY CHANGES IN MANDATORY PROGRAMS-
Continued
(Outlays; in millions of dollars)
1992
1993
1994
1995
1996
Durable Medical Equipment (DME):
Adjust enteral/parenteral fee schedule
-10
-15
-15
-15
-15
Refine DME/oxygen payment methods, in part to reflect
increased use of less-expensive oxygen delivery serv-
ices
-35
-85
-105
-130
-135
Subtotal, medical equipment
-45
-100
-120
-145
-150
High-Income Beneficiaries: Reduce Federal Medicare sub-
sidy for high-income beneficiaries (over $125,000 AGI) -
-41
-169
-245
-323
-426
Hospitals:
Adjust indirect medical education add-on payment fac-
tor from 7.65% to 4.4% in 1992, phasing down to 3.2%
in 1996
-1,045
-1,385
-1,705
-2,080
-2,500
Eliminate duplicate payments for hospital-based non-
physician practitioners by adjusting hospital payment
update factor
-10
-10
-10
-10
-10
Include payment for certain post-hospital services in
Medicare hospital payment
-30
-40
-50
-50
-60
Limit graduate medical education per-resident pay-
ment, and encourage training of primary care physi-
cians
-140
-160
-190
-230
-260
Place Medicare hospital update on a January 1 cycle
-670
-930
-1,320
-1,450
-1,540
Subtotal, hospitals
-1,895
-2,525
-3,275
-3,820
-4,370
Outpatient Departments (OPDs): Pay a uniform rate for
outpatient services, whether performed in doctors' of-
fices or OPDs
-50
-100
-125
-150
-175
Physicians:
Eliminate double payment for physician collection of lab
specimens
-10
-20
-20
-20
-25
Establish a single fee for anesthesia services
-80
-150
-170
-200
-230
Establish a single fee for assistants at surgery
-50
-80
-90
-100
-110
Revise 1991 Medicare volume performance standard to
correct error
-
-90
-150
-190
-220
Revise Medicare economic index to reflect better data
and new methodology
-30
-
-
-
-
Use efficient rate for radiology and diagnostic tests
-
-10
-15
-20
-20
Subtotal, physicians
-170
-350
-445
-530
-605
Other:
Effect of Medicare proposals on HI premiums
17
20
26
30
33
Eliminate return-on-equity payments for proprietary
skilled nursing facilities
-50
-70
-60
-60
-70
Establish a uniform payment policy for medicare cov-
ered drugs
-10
-30
-30
-40
-40
Recalculate payments for physical and respiratory ther-
apy, based on newer data
-10
-10
-15
-15
-20
Subtotal, other
-53
-90
-79
-85
-97
Subtotal, Medicare
-2,854
-4,159
-5,219
-6,083
-6,878
Supplemental Security Income: collect SSI over-payments
and charge States certain administrative fees
-96
-159
-250
-250
-240
115
II. DIRECTOR'S INTRODUCTION AND OVERVIEW TABLES
Table II-9. PROPOSED POLICY CHANGES IN MANDATORY PROGRAMS-
Continued
(Outlays; in millions of dollars)
1992
1993
1994
1995
1996
Department of Housing and Urban Development
Federal Housing Administration: reduce FHA multifamily
insurance claims through: improved underwriting, mon-
itoring, and servicing, removal of legislative restraints on
defaulted property sales; and the proposed Low-Income
Resident Economic Empowerment program
-564
-1,062
-1,024
-360
-1,269
Government National Mortgage Association: exempt GNMA
from VA's formula for acquiring foreclosed property pro-
ducing savings for VA-guaranteed loans acquired by
GNMA
-45
-38
-25
-20
-19
Department of the Interior
Arctic National Wildlife Refuge: lease oil and gas explo-
ration rights
-
-1,901
-1
-1,201
-1
Department of Labor
Trade Adjustment Assistance: repeal TAA benefits for work-
ers unemployed due to competition from imports
-114
-193
-204
-200
-194
Department of Treasury
Coinage Profit Fund: finance numismatic and bullion coin
operations for the United States Mint
-94
-
-
-
-
Department of Veterans Affairs
Veterans Compensation and Pension: standardize Depend-
ency and Indemnity Compensation payments; increase
pension eligibility requirements and extend several expir-
ing previsions of OBRA
-17
-433
-391
-354
-320
Veterans Home Loans: raise fee and require down payment
for multiple use of loan guaranty benefit; improve formula
used to acquire foreclosed property and extend expiring
OBRA fee increase
-308
-242
-202
-178
-160
Veterans Readjustment Benefits: target eligibility for voca-
tional rehabilitation to veterans with higher rated disabil-
ities and eliminate step-children from eligibility for train-
ing and education benefits
-12
-32
-31
-31
-31
Veterans Third Party Medical Recoveries: extend several ex-
piring provisions of OBRA
-
-
-225
-255
-274
Environmental Protection Agency
Pesticide Reregistration Fee: remove existing cap on
amount that may be collected from any one registrant
-3
-3
-3
-3
-3
Other Agencies
Corps of Engineers: expand existing user fees for day use of
developed recreational sites
-20
-20
-20
-20
-20
Postal Service: require the Postal Service to pay a larger
share of the costs for health benefits and cost-of-living ad-
justments for post-1971 retired postal employees and
their survivors
-198
-198
-198
-198
-198
Railroad Retirement Board: reflects net impact of conform-
ing rail security benefits with social security benefits and
requiring the rail pension to finance 25% of the windfall
benefits
145
142
141
139
137
Other
8
15
17
20
24
Total, outlay savings
-6,316
-9,344
-8,984
-10,987
-10,999
116
THE BUDGET FOR FISCAL YEAR 1992
Table II-10. POTENTIAL BLOCK GRANT PROGRAMS
(In millions of dollars)
Enacted
Proposed
Department/Pregrams
1991
1992
1993
1994
1996
1996
BA
o
BA
o
BA
o
BA
0
BA
0
BA
0
Education:
Impact aid payments
781
815
620
695
620
651
620
624
620
620
620
620
Supplemental education oppor-
tunity grants
520
404
347
498
347
352
347
347
347
347
347
347
Chapter 2 block grant
449
533
449
465
449
445
449
449
449
449
449
449
Public hbrary services programs
143
155
35
115
35
71
35
35
35
35
35
35
Environmental Protection Agency:
Construction grants
2,083
2,345
1,900
2,195
1,200
2,082
600
1,883
-
1,482
-
1,025
Health and Human Services:
State welfare administrative ex.
penses for Medicaid, AFDC,
and Food Stamps
5,178
5,167
5,878
5,867
6,453
6,440
7,062
7,048
7,701
7,686
8,366
8,349
Social services block grant
2,800
2,800
2,800
2,800
2,800
2,800
2,800
2,800
2,800
2,800
2,800
2,800
Low-income home energy assist-
ance program
1,610
1,669
1,025
991
875
796
625
552
475
393
375
287
Housing and Urban Development:
Selected public and subsidized
housing programs
5,512
3,185
4,789
3,805
4,837
4,484
4,897
4,685
4,961
5,036
5,026
4,968
Community development block
grants
3,200
3,073
2,920
3,097
2,920
3,061
2,920
2,906
2,920
2,914
2,920
2,915
Justice:
Byrne Memorial State and local
law enforcement assistance
program
490
342
490
421
490
475
490
481
490
484
490
491
Total
22,766
20,488
21,253
20,949
21,026
21,657
20,845
21,810
20,798
22,246
21,428
22,286
117
П. DIRECTOR'S INTRODUCTION AND OVERVIEW TABLES
Table II-11. PROPOSED OUTLAYS, BY AGENCY
(In billions of dollars)
1991'
1992
Agency
Discretionary
Mandatory
Total
Discretionary
Mandatory
Total
Cabinet Agencies:
Agriculture
11.6
43.9
55.4
12.5
43.2
55.7
Commerce
2.9
-0.1
2.8
2.9
-0.1
28
Defense-Civil
3.4
23.0
26.4
3.5
24.7
28.2
Defense-Military
288.3
-0.8
287.5
283.8
-0.7
283.0
Education
18.8
6.1
24.8
20.5
7.0
27.5
Energy
16.0
-2.4
13.5
17.4
-2.5
14.9
Health and Human Services
27.8
458.4
486.3
28.7
496.6
525.3
Housing and Urban Development
21.8
1.7
23.5
23.4
0.9
24.3
Interior
6.6
-0.2
6.4
6.7
-0.2
6.5
Justice
7.7
1.0
8.7
9.0
1.0
10.0
Labor
8.8
25.7
34.5
9.2
25.5
34.8
State
4.0
0.3
4.3
4.2
0.3
4.5
Transportation
30.5
0.2
30.8
31.6
0.3
31.9
Treasury
8.8
268.3
277.1
9.6
289.0
298.6
Veterans Affairs
13.9
17.5
31.3
14.7
18.1
32.8
Major Agencies:
Deposit Insurance Accounts
0.1
111.4
111.5
-
88.1
88.1
Environmental Protection Agency
5.9
-0.1
5.8
6.1
-0.2
5.9
General Services Administration
0.9
-0.1
0.8
0.9
-0.1
0.7
National Aeronautics and Space Admin-
istration
13.5
-
13.5
14.7
-
14.7
Office of Personnel Management
0.2
35.0
35.2
0.2
36.8
37.0
Small Business Administration
0.5
-
0.5
0.5
-0.2
0.3
Other Agencies:
Executive Office of the President
0.3
-
0.3
0.3
-
0.3
Funds Appropriated to the President
11.8
-0.5
11.3
12.7
-0.7
12.0
Judicial Branch
1.9
0.2
2.1
2.2
0.1
2.3
Legislative Branch
2.2
0.3
2.5
26
0.4
3.0
Other Independent Agencies
10.3
4.0
14.2
9.4
4.6
14.0
Allowances
8.2
-
8.2
4.7
-
4.7
Undistributed offsetting receipts
-
-109.4
-109.4
-
-118.0
-118.0
Total Outlays
526.3
883.3
1,409.6
532.1
913.8
1,445.9
'Includes impact of supplementals and rescissions.
118
THE BUDGET FOR FISCAL YEAR 1992
Table II-12. DISCRETIONARY PROPOSALS, BY APPROPRIATIONS
SUBCOMMITTEES
(In millions of dollars)
1991
1991
1992
1992 Proposed Less
Enacted
Proposed
Proposed
1991 Enacted
Appropriations Subcammittee
BA
Outleys
BA
Outlays
BA
Outlays
BA
Outlays
Domestic Discretionary
Commerce, Justice, State and Judiciary
13,941
14,311
13,981
14,339
15,686
15,927
1,745
1,616
District of Columbia
568
575
568
575
536
536
-32
-39
Energy and Water
9,062
8,607
9,062
8,607
9,830
9,132
768
525
Interior
12,758
11,816
12,758
11,816
12,068
12,214
-690
398
Labor, HHS, and Education
55,972
54,074
56,197
54,269
56,003
57,352
31
3,278
Legislative Branch
2,158
2,165
2,158
2,165
2,664
2,597
506
432
Rural Development, Agriculture, and Related Agen-
cies
8,845
8,901
8,856
8,914
10,204
9,674
1,360
773
Transportation
12,496
29,842
12,498
29,842
14,560
31,067
2,062
1,225
Treasury, Postal Service and General Government
11,872
10,772
11,872
10,772
10,807
11,241
-1,065
469
Veterans Affairs, HUD, and Independent Agencies
60,265
58,549
60,198
58,516
64,914
62,195
4,649
3,646
Allowances
-
-
-
-
97
97
97
97
Total Domestic Discretionary
187,939
199,612
188,147
199,814
197,370
212,032
9,431
12,419
Defense Discretionary
Defense
268,994
281,393
265,681
280,611
270,866
275,474
1,872
-5,919
Energy and Water, Function 050
10,955
10,355
11,578
10,513
11,780
11,443
825
1,089
Military Construction
8,410
7,939
8,290
7,928
8,143
8,366
-267
427
Commerce, Justice, State and Judiciary
225
166
225
166
225
178
-
12
Veterans Affairs, HUD and Independent Agencies -
335
336
335
336
337
339
3
2
Total Defense Discretionary
288,919
300,189
286,109
299,554
291,351
295,800
2,432
-4,389
Allowance for Desert Shield (placeholder)
-
-
14,000
8,200
-
4,611
-
4,611
Total Defense Discretionary with Allowance for
Desert Shield (placeholder)
288,919
300,189
300,109
307,754
291,351
300,411
2,432
222
International Discretionary
Commerce, Justice, State, and Judiciary
4,279
4,632
4,379
4,715
5,402
4,906
1,123
274
Foreign Operations
14,869
12,855
14,730
12,897
27,311
13,578
12,441
723
Labor, HHS and Education
8
9
8
9
9
9
1
-
Rural Development, Agriculture, and Related Agen-
cies
981
1,097
1,011
1,120
1,301
1,120
320
23
Total International Discretionary
20,137
18,593
20,129
18,740
34,022
19,613
13,885
1,021
Total Discretionary
496,995
518,394
508,385
526,308
522,744
532,056
25,749
13,662
119
EXECUTIVE OFFICE OF THE PRESIDENT
OF THEY'S UNITED
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
FOR IMMEDIATE RELEASE:
February 4, 1991
Summary of Selected Items
From the President's Fiscal Year 1992 Budget
Overview:
Summary of Receipts, Outlays, and Deficit
Selections From the Reform Agenda
Chapter Highlights:
Investing in Human Capital and
Reforming American Education
Focusing on Prevention
and the Next Generation
Enhancing Research and Development and
Expanding the Human Frontier
Improving the Transportation Infrastructure
Preserving America's Heritage and Protecting
the Environment in A Growing Economy
Increasing Choice, Expanding Opportunity,
and Providing Hope to Distressed
Communities
Ending the Scourge of Drugs and Crime
Distributing Federal Benefits More Fairly
Protecting National Security
Advancing America's Interests Internationally.
Federal Credit Reform
Strengthening Management and Accountability
Improving Returns on Investment
Proposed Outlays, By Agency
121
THE FEDERAL GOVERNMENT DOLLAR
FISCAL YEAR 1992 ESTIMATE
Where It Comes From
Other
Excise
Corporate
4%
Taxes
Income
3%
Tax
7%
Individual
Income
Taxes
Borrowing
37%
19%
Social
Insurance
Receipts
30%
Deposit
Other
Insurance
Federal
Operations
Grants 10 States
6%
Where It Goes
7%
& Localities
Direct Benefit
12%
Payments for
Individuals
41%
Net
Interest
14%
National
Defense
20%
RECEIPTS, OUTLAYS, DEFICIT/SURPLUS UNDER THE PRESIDENTS
PROPOSED POLICY
(In billions of dollars)
1990
1991
1992
1993
1994
1995
1996
Receipts
1,031.3
1,091.4
1,165.0
1,252.7
1,365.3
1,467.3
1,560.7
Outlays
1,251.7
1,409.6
1,445.9
1,454.2
1,427.1
1,470.3
1,540.8
Surplus or Deficit (+/-)
-220.4
-318.1
-280.9
-201.5
-61.8
-2.9
+19.9
122
Table 11-5. SELECTIONS FROM THE REFORM AGENDA-
WITHIN THE FLEXIBLE FREEZE FRAMEWORK
Area
Highlights
(1) Education Reform:
Long-term national goals-wish Governors
Special funding emphasis so early childhood (887 (million)
Parental cholos-pew incentive fund ($200 million)
Educational Excellence Act (8690 million)
Higher education funding reform
Math/Sclence improvement program ($1.9 billion)
a) Research and Development:
Record level for R&D (878 billion)
Record love) for basic research ($18 billion)
Human Genome Project
Increased emphasis BD applied civilian R&D 6s., materials
processing, biotechnology, high-performance computing)
(3) Financial Sector Reform:
Deposit insurance reform
Recapitalization of Bank Insurance Fund
Comprehensive reform of legal and regulatory structure so mod.
ernize financial services sector
(4) Incentives for Secing and Investment:
Enterprise Zones
Family Savings Account
IRA withdrawal for first-home buyers
Capital gains modification for longer-term investment
(5) Entitlement Reform:
$47 billion savings over 5 years
Increased fairness/reduced subsidies for wealthy
(6) Health System Reform:
Physician payment reform
Malpractice reform
Increased investment in prevention (prenatal care, infant autri-
tion, cancer acreening, education for personal responsibility,
child care)
(7) Drug Abuse Reduction:
National Drug Control Strategy
$1.1 billion increase-to record $11.7 billion (Federal share)
(8) Housing Reform:
Full funding for HOPE ($21 billion in 1992)
38 percent increase in vouchers
IRA withdrawal for first-home buyers
Enterprise Zones (refundable wage credit, expensing for new
stock, zero capital gains rate)
(9) Transportation Infrastructure Invest
New highway program (new National Highway System and new
ment:
block grant)
Major increase in Highway Trust Fund obligations (over $20
billion by 1996)
NASPLAN modernization
Space transportation systems (Sbuttle, ASRM, ALS, NASP)
(10) Government Management Reform:
Budget process reform
Regulatory reform
Accounting systems reform
High-Risk Area targeting
Terminations: 238 programs and 2,591 projects
(11) "States as Laboratories:
Demonstrations and waivers
Evaluation of natural experiments
$15 billion program turn-over to States (fully funded)
Proposed total governmental spending for 1992 in 26 percent greater than 1991 lie growth is loss than the inflation rate).
123
INVESTING IN HUMAN CAPITAL AND REFORMING AMERICAN EDUCATION
(Chapter IV. A.)
Head Start: The budget provides an increase of $100 million,
to $2.05 billion for 1992, which will enable 633,000
youngsters to take advantage of this proven child
development program. This funding is supplemented by $732
million for the new Child Care and Development Block Grant.
Education Department Funding: The budget proposes a total
of $29.6 billion, an increase of $2.5 billion (9.5 percent)
over 1991. This funding level will permit increases for
programs, such as compensatory education and special
education, for students that have the greatest need for
additional services.
Educational Excellence and Choice: $690 million is included
for a new Educational Excellence Act to support State and
local efforts to reform and improve American education. The
budget provides support for local efforts to enhance
parental choice in education through the Education
Certificate Program Support Fund ($200 million) and funding
for nationally significant choice demonstrations. Funding
is also requested for rewards for schools that raise student
achievement and for outstanding teachers; a new approach to
training school administrators; an adult literacy
initiative; endowments for historically black colleges and
universities; and a performance-based math and science
initiative. The Administration's proposals would provide
greater flexibility in the use of Federal education
resources in exchange for enhanced accountability for
results.
Math and Science Education: Federal support for mathematics
and science education will reach $1.9 billion, a 13 percent
increase above 1991. Federal efforts focus most intensively
on improving precollege science and mathematics -- with
total funding of $661 million, a 28 percent increase.
Pell Grants: The $5.8 billion for Pell grants (an increase
of $401 million) would be better targeted on the lowest
income students to encourage and enable them to pursue
postsecondary education. The budget also includes $170
million for new supplementary awards for Pell grant
recipients tied to academic achievement. These Presidential
Achievement Scholarships would, for the first time, relate
recognition of merit to the Pell grant program.
Guaranteed Student Loans: The $5.9 billion Guaranteed
Student Loan Program would be reformed to restore integrity
and improve program efficiency, reduce default rates and
provide incentives to improve program performance by
students, institutions, lenders, and State and local
governments.
124
Table A-1. HIGHLIGHTS OF SPENDING ON EARLY CHILDHOOD,
EDUCATION, AND TRAINING
(Budget authority in millions of dollars)
Actual
Enacted
Proposed
1990
1991
1992
Preparing young children for school:
Head Start
1,552
1,952
2,052
WIC
2,126
2,350
2,573
Targeted infant mortality
-
57
171
Immunizations
187
218
258
Reforming Elementary and secondary education:
Proposed Educational Excellence Act
-
-
690
(Certificate program support fund-non-add)
-
-
200
Precollege math and science education
333
515
661
Increasing access to higher education:
Pell grants
4,804
5,374
5,775
Presidential achievement scholarships
-
-
170
Guaranteed student loans
4,348
4,210
5,893
Improving workforce skills:
Job Training Partnership Act adult initiative'
1,070
1,088
1,088
Adult education
193
241
251
Total
14,613
16,005
19,582
, Amounts for 1990 and 1991 are estimates of activity in those years comparable to the 1992 initiative.
125
FOCUSING ON PREVENTION AND THE NEXT GENERATION
(Chapter IV. B.)
Background: Federal investments in children have not kept
pace with increases in other Federal spending. In 1992
dollars, Federal spending on adults rose by over 5208 from
1960 to 1989, while spending on children rose by 3308 during
same time period.
Children: The budget includes proposals that would increase
Federal funding for selected children's programs by 9.58,
from $79.3 billion in 1991 to $86.9 billion in 1992.
Continuing this trend into the future, spending on selected
mandatory programs related to children is projected to rise
by 38% over FY 1992-1996.
Immunizations: The budget increases Federal support for
Centers for Disease Control (CDC) categorical immunization
grants by $40 million, an 18.3 percent increase over 1991.
Total Federal resources available for purchasing
immunizations will increase by 10 percent to $1.1 billion.
Infant Mortality Prevention: The budget increases Federal
support for infant mortality prevention by $676 million
government-wide (9.2 percent over 1991). This includes $171
million for prevention activities targeted to 10 cities with
exceptionally high infant mortality rates, and a $223 million
increase for the WIC program. The initiative will support
additional pre-natal care in existing health clinics in hard-
hit areas and help local communities support new clinics
where none exist now. To get an early start, the Department
of Health and Human Services expects to devote $57 million to
this special effort from current appropriations. The $223
million increase for WIC will enable 225,000 additional
nutritionally at-risk pregnant women, infants, and children
to get nutritional supplemental foodstuffs. As a result,
total WIC enrollment will rise to 4.9 million participants
per month.
Breast and Cervical Cancer Screening: The budget increases
Federal support for breast and cervical cancer screening for
low-income women and the uninsured by $141 million, an
increase of 52 percent over 1991.
Smoking Cessation: The budget increases support of smoking
cessation by $7 million over 1991. This will double funding
for CDC's Office of Smoking and Health and will allow CDC to
expand its smoking cessation education activities for
specific target populations (e.g., teenagers).
Injury Prevention: The budget increases Federal support of
injury prevention by $224 million. This 13 percent increase
over 1991 includes a $218 million increase for Department of
Transportation funding of highway, aviation, and maritime
safety activities.
126
Table II-3. SPENDING ON SELECTED PROGRAMS SERVING CHILDREN
INCREASES 9.5 PERCENT IN 1992
(In millions of dollars)
1990
2001
1992
Proposed
Nutrition:
WIC
2,126
2,850
2,573
Child Nutrition
4,887
5,577
6,066
Other Nutrition
7,985
9,138
9,825
Health:
Targeted Infant Mortality
-
$24
189
Medicald
8,200
10,300
12,000
Community/Migrant Health
227
238
238
Immunizations
187
218
258
Maternal/Child Health
554
'554
854
Other Health
222
264
266
Education and Social Services:
Head Start
1,552
1,952
2,052
Handicapped Education
2,055
2,467
2,730
Compensatory Education
5,368
6,225
6,424
Educational Excellence Act (proposed)
-
-
490
Precollege Math and Science Education
333
515
661
Child Care Block Grant
-
782
732
Foster Care
1,375
2,611
2,186
Social Security
8,375
9,048
9,716
Supplemental Security Income
1,261
8,531
2,497
Aid to Families with Dependent Children and Child Support
12,165
14,008
15,162
Other Education and Social Services
2,453
2,642
2,852
Refundable Tax Credits
6,287
6,941
9,973
Total Children's Funding
65,612
79,345
86,851
Reflects HHS plans to reprogram 834 million from MCH Block Grant to Targeted Infant Mortality in 1991. Overall resources
supporting this initiative will total 857 mallion is 1991 and $171 million is 1992, including funds from other public health grants.
Table II-4. THE BUDGET PROVIDES INCREASES FOR PROGRAMS
FOCUSED ON PREVENTION AND THE NEXT GENERATION
(Obligations in millions of dollars)
1991
1992
Percent
Enacted
Proposed
Increase
Childhood immunization
218
258
+18.3
Infant Mortality Initiative
7,235
8,011
+9.2
(Targeted Infant Mortality Initistive-non-add)
57
171
+300.0
Breast and Cervical Cancer Prevention
269
410
+524
Smoking Cessation
90
97
47.8
Physical Fitness and Diet
122
139
+13.9
Accident and Injury Prevention
1,683
1,907
+13.3
Access to Preventive Health Care
5,410
6,026
+11.4
Family Planning
299
420
+5.3
Lead Poisoning Prevention
8
41
+412.5
Substance Abuse Prevention
1,442
1,515
45.1
127
NHANCING RESEARCH AND DEVELOPMENT
AND EXPANDING THE HUMAN PRONTIER
R&D: The budget proposes to invest about $76 billion in
1992 for research and development, including R&D facilities.
This is an increase of over $8 billion, or 13 percent over
1991. The budget proposes over $13 billion for basic
research, $1 billion or about 8 percent over 1991. Federal
civilian R&D will increase by 10 percent while defense-
related R&D will increase by 14 percent.
Space: The budget proposes $16 billion for space
activities, $2 billion, or 15 percent, over 1991. The
budget for the National Aeronautics and Space Administration
(NASA) will increase by 13 percent to $15.7 billion.
Biotechnology: The budget proposes over $4 billion for
biotechnology, $319 million, or 8 percent, over 1991.
NSF: The budget proposes an 18 percent increase for the
National Science Foundation (NSF), to a total of $2.7
billion, continuing the commitment to double NSF's budget
between 1987 and 1994.
Individual Investigators: The budget emphasizes support for
individual investigators at universities, and proposes $50
million for a new program to provide state-of-the-art
research instrumentation to academic researchers. Funding
for grants for basic research through NSF will increase by
16 percent, and a 9 percent increase for research project
grants at the National Institutes of Health is proposed.
High Performance Computing and Communications: The budget
proposes a total of $638 million, an increase of $149
million, or 30 percent, over 1991 for a new initiative in
high performance computing and communications. This
initiative involves 8 Federal agencies. The goal is to
assist in the development of computing capability with about
1,000 times improvement over current systems by 1996.
Energy R&D: The budget proposes over $900 million, an
increase of $227 million or 34 percent above 1991, for
research investments in targeted, high-payoff technologies
in support of the National Energy Strategy. The R&D
initiatives would increase the efficiency of energy use,
develop alternatives to petroleum and advance new
electricity technologies.
Human Immunodeficiency Virus/Acquired Immune Deficiency
Syndrome (HIV/AIDS): The budget proposes an increase of 5
percent to $1.2 billion for R&D on HIV/AIDS. The budget
includes a total increase of $558 million, or 15 percent,
128
for HIV/AIDS research, treatment, prevention and income
support.
Superconducting Super Collider (SSC): The budget proposes
an increase of $291 million, to a total of $534 million, to
support continued work toward the transition from prototype
superconducting magnets to production, and to begin the
construction of facilities.
Mission to Planet Earth and the U.S. Global Change Research
Program (USGCRP): The budget includes an increase of $232
million, or 24 percent, to a total of $1,186 million to
support a broad range of research efforts, including NASA's
Mission to Planet Earth/Earth Observing System (MTPE/EOS)
and ground-based programs such as the World Ocean
Circulation Experiment.
New Launch System: A new space launch system is proposed,
jointly funded by the Department of Defense and NASA ($175
million each in 1992), consistent with the recommendations
of the Advisory Committee on the Future of the U.S. Space
Program.
Mathematics and Science Education: The budget includes an
increase of $225 million, or 13 percent, to $1,941 million,
for a major initiative in mathematics and science education.
This initiative will help address problems that limit the
pool and performance of math and science learners. of the
total increase, $146 million, a 28 percent increase, is
targeted toward the precollege level.
Human Genome Project: R&D for this project will increase by
$35 million, or 26 percent, to a total of $169 million in
the Departments of Energy and Health and Human Services
(National Institutes of Health).
Research and Experimentation (R&D) Tax Credit: The budget
proposes that this credit be made permanent and be
reformulated to increase its effective rate.
129
Table II-2. ENHANCING RESEARCH AND DEVELOPMENT AND
EXPANDING THE HUMAN FRONTIER-HIGHLIGHTS
(Dollar amounts in millions)
Budget Authority
1991
1992
Dollar
Parcent
Enacted
Proposed
change
change
Basic Research
Doubling the NSF budget
2,316
2,722
4406
+18
Increasing Basic Biomedical Research at NIH
4,534
4,968
+334
49
Human Genome Project
125
169
+35
+25
Agricultural Research Initiative
78
125
+52
+71
Superconducting Super Collider
243
534
+291
+120
Applied Research
High Performance Computing and Communications
489
638
+149
+30
Energy R&D
676
903
4227
+34
Advanced Manufacturing and Materials
1,216
1,310
Y
-
HIV/AIDS
1,152
1,210
+58
48
Moving Fusion Energy from Science to Engineering
275
337
+62
+23
Aeronautics R&D
482
543
+61
+18
Expanding R&D at the National Institute of Standards and Tech-
nology
215
248
+33
+15
Maintaining National Security: Defense R&D
37,783
43,247
+5,464
+14
Expanding the Geographic Frontier. Space Exploration
Space Transportation Infrastructure
4,801
5,517
4716
+15
Space Science
1,774
2,141
+367
+21
Mission to Planet Earth (Global Change)
964
1,186
+232
+24
Mission From Planet Earth
2,199
2,470
+271
+12
Expanding the Human Frontler through Biotechnology
8,788
4,107
+319
+8
130
IMPROVING THE TRANSPORTATION INFRASTRUCTURE
(Chapter IV. D.)
Highways: Between 1991 and 1996, highway budget authority
will increase from $14.6 billion to over $20 billion. This
represents an increase of more than 398. In total, the five-
year authorization will provide almost $86.8 billion for
highway construction and rehabilitation.
National Righway System: The Administration's new highway
program will propose the creation of a "National Highway
System" which concentrates Federal resources on the
rehabilitation and improvement of highways which are most
critical to interstate travel and commerce. The system will
consist of about 150,000 miles of highways and will
incorporate the existing Interstate Highway System, but will
also reflect the major demographic and travel changes that
have occurred since the Interstate was designated. In 1992,
funding for the system will total $7.7 billion, growing to
$11.1 billion by 1996.
Urban/Rural Program: For other highways, the budget proposes
the establishment of a highway block grant program which will
consolidate many narrow categorical highway grant programs
into a larger and more flexible program, termed the "Urban/
Rural Program." This program will give States unprecedented
discretion in the use of their Federal funds.
Bridges: The budget contains increased funding to
rehabilitate bridges ($1.8 billion in 1992, growing to $2.8
billion in 1996). Resources will be focused on priority
bridge repairs, wherever located on the National Highway
System.
Other Highway Initiatives: The proposed program will allow
the expanded use of Federal funds to construct toll roads and
contains an increase of $30 million, for a total of $50
million, for research into high technology such as "smart
cars." Such technology has the potential to increase safety
and help control traffic congestion.
Aviation: The budget continues the Administration's
commitment to modernize the aviation system by: 1) Keeping the
equipment modernization program on track with funding of $2.7
billion, a $.6 billion (29%) increase over 1991; 2) providing
450 additional air traffic controllers as well as other staff
increases for total FAA operation funding of $4.5 billion, a
$.4 billion (10%) increase over 1991; and 3) funding airport
grants at $1.9 billion, a level that when combined with
airport passenger fees, will help address airport congestion.
O
Mass Transit: The budget increases investment in transit
capital from about $2.4 billion in 1991 to $2.9 billion in
1992. Furthermore, the States will be given increased
flexibility to choose how to use their Federal transportation
assistance on either transit or highways.
131
PRESERVING AMERICA'S HERITAGE AND PROTECTING THE ENVIRONMENT
IN A GROWING ECONOMY
(Chapter IV. E.)
National Parks, Forests and Public Lands: The America the
Beautiful program for 1992 will increase by 40 percent to
nearly $1 billion. This includes $350 million to acquire
new lands for parks, wildlife refuges, national forests, and
the BLM; with $30 million to be provided to the states as
matching grants for open space protection and outdoor
recreation. The budget funds a 33 percent increase to
conserve and restore wetlands, protect endangered species,
and enhance recreation; and a new $10 million Targeted Parks
Program to protect the Nation's "crown jewel" national
parks.
Civil War Battlefields: The budget proposes a new $15
million program to protect important civil war battlefield
sites, including Gettysburg, Antietam, and Harpers Ferry.
Tree Planting: The budget proposes $140 million (a 100%
increase over FY 1991) to implement the President's
ultimate goal to plant one billion trees each year.
Legacy '99; The budget provides $820 million to restore
facilities in existing parks and recreation areas. Also
included is the first third of a $625 million, 3 year Forest
Service program to construct new recreation facilities,
trails, campsites and other amenities, especially on lands
adjacent to urban areas.
Coastal Protection: The budget includes a major new Coastal
America initiative. Specifically, the initiative includes:
$23 million to implement an action-oriented coastal
protection and restoration program; $300 million in EPA
sewage treatment grants to five coastal cities (Boston, New
York, Los Angeles, San Diego and Seattle) to accelerate the
completion of their plants; $100 million for a border
facility to treat Tijuana's raw sewage discharges into the
U.S.; $1.9 billion in total for sewage treatment; and a 17%
increase to improve the oil spill response capability of the
Coast Guard.
Wetlands: Wetlands will receive high priority in 1992,
including $500 million to add 600,000 acres of wetlands to
the Environmental Wetlands Conservation Acreage Reserve
Program; and a $230 million increase for purchases of
critical wetlands habitat and wetlands research.
EPA Operating Budget: The budget proposes an increase of
$164 million, or 7% over FY 1991, for EPA's operating
budget. In total, EPA's regulatory, enforcement and
research activities will have increased by 40 percent in
funding and 20 percent in staffing since the President took
132
office. The budget includes increases of $120 million and
340 staff years to carry out the new Clean Air Act; and $20
million for an innovative multi-media initiative for the
Great Lakes.
Federal Facilities Cleanup: The program to clean up Federal
facilities is significantly expanded for the third year in a
row. Increases are included for the Department of Energy,
for which resources have risen from $1.8 billion in 1989 to
a proposed $4.4 billion for 1992; and the Department of
Defense for which an increase of $700 million or 34 percent
over 1991 levels is proposed. In total, the budget includes
$7.15 billion, an increase of 31% over FY 1991 appropriated
levels, to clean up Federal facilities.
Climate Change Research: The 1992 Global Climate Change
budget includes $1.2 billion, a 25 percent increase, to help
improve scientific and economic understanding of global
climate change. Two special reports will supplement
the Budget: one which details the action the U.S. has taken
to date to reduce gases affecting global climate and one
which details the U.S. Global Climate Change Research
Program.
133
Table E-1. THE BUDGET INCLUDES $2.4 BILLION IN NEW FUNDING
FOR ENVIRONMENTAL PROTECTION INITIATIVES
(Budget authority; dollar amounts in millions)
Actual
Summary of Major Initiatives
1991
1992
Percent
1989
1990
Enacted
Proposed
Change,
1991-92
America the Beautiful
363
411
589
785
+33
Reforestation
-
-
70
140
+100
Legacy '99
517
563
819
823
+1
Protecting America's Wetlands'
201
283
299
489
+64
EPA Operating Budget
1,752
1,938
2,313
2,477
47
Superfund
1,410
1,530
1,616
1,750
+8
Federal Facility Cleanup:
Department of Energy
1,762
2,354
3,687
4,352
+18
Department of Defense
1,155
1,282
1,923
2,582
+34
Other Agencies
107
147
172
211
+23
Global Change Research
-
659
954
1,186
+24
Natural Resources Research
680
710
844
900
+7
Total
7,947
9,877
13,287
15,695
+18
'Total has been adjusted to eliminate double counting of DOI Wetlands already included in America the
Beautiful and wetlands, Coastal American and global change research included in EPA's operating budget.
"Includes a proposed $340 million 1991 supplemental for Environmental Restoration and Waste Management.
134
INCREASING CHOICE. EXPANDING OPPORTUNITY.
AND PROVIDING HOPE TO DISTRESSED COMUNITIES
(Chapter V. A.)
Child Care and Health Insurance Tax Credits: A newly
expanded Earned Income Tax Credit, and a new Health
Insurance Credit will make child care and health insurance
more affordable for low-income families with children while
assuring maximum freedom of choice over the use of the
benefits. For 1992, these credits will provide $10 billion
in support to working families with children, and $69
billion over the next five years. These credits were
created as part of the budget agreement last fall.
Child Care Block Grant: The new Child Care and Development
Block Grant, the first grant program of its kind to require
that assistance be offered through certificates to ensure
parental choice, will be funded at $732 million.
Educational Choice: The budget includes funding for the
President's upcoming Educational Excellence Act legislative
proposal which will include:
-
$200 million for a Certificate Program Support Fund to
provide school districts with an incentive to allow
parents to choose the public or private schools their
children will attend.
-
New authority to fund Magnet Schools of Excellence in
order to extend this proven choice approach to schools
regardless of racial composition or the presence of a
school desegregation plan. Support for magnet schools
for desegregation will be maintained as well.
-
Amendments to facilitate and increase use of Local
Agency Grants and Education Block Grants under Chapters
1 and 2 of the Elementary and Secondary Education Act
for educational choice programs.
-
$30 million to fund nationally significant choice
demonstrations.
Housing Choice: For 1992, $2.4 billion is requested to
provide an additional 78,860 housing vouchers to low-income
renters. This 41 percent funding increase over tenant-based
housing subsidies appropriated for 1991 reflects the
Administration's policy of assuring subsidized tenants
maximum choice over where to live and how much to pay for
housing.
Homeownership: Opportunity for low-income families to
become homeowners will be expanded through HOPE
(Homeownership and Opportunity for People Everywhere). For
1991, a fully-offset supplemental request for $287 million
135
is proposed for MOPE: for 1992, the request is $2.25
billion.
TO preserve those subsidized rental properties that may be
converted to other uses, $718 million is requested. The
goals are to protect low-income renters, provide
opportunities for low-income tenants to become homeowners,
and compensate owners fairly to retain their properties as
low-income rental units.
To reduce defaults and improve housing conditions for low-
income renters in financially distressed, FHA-insured rental
properties, a $668 million Low-Income Resident Empowerment
Program is proposed for 1992. This program will assist
those landlords who are willing to provide their low-income
tenants an equity interest in their units.
Increased Flexibility: To allow grantees to use funds more
effectively: certain categorical housing programs will be
replaced with more flexible HOME grants; several small
categorical programs for the homeless will be consolidated;
legislation will be proposed to permit waivers of some
Federal education program requirements for innovative
programs which can demonstrate progress toward stated
educational goals.
Using IRAS for First Home Purchases: First-time home-buyers
would be permitted to withdraw up to $10,000 from tax-
deferred IRAs without penalty for a down payment.
Enterprise Zones: To help revitalize economically
distressed communities, the budget includes proposals for
Federal tax incentives in up to 50 enterprise zones. A 5
percent refundable tax credit for low-income workers,
favorable tax treatment for purchase of newly issued
corporate stock in enterprise zones, and a zero capital
gains rate for investments in zone businesses are proposed.
Job Training: Reforms to the $4.0 billion Job Training
Partnership Act (JTPA) are proposed to target job training
efforts on extremely disadvantaged adults and youth.
Included is a new Youth Opportunities Unlimited (YOU)
program in up to 40 high-poverty areas. Reforms of the
Federal-State Employment Service also are intended to target
resources on more disadvantaged workers.
Reform of Davis-Bacon: Recently issued Labor Department
regulations would improve opportunities on Federal
construction projects for workers still learning their
journeyman skills and create another rung on the ladder to
economic success for less-skilled workers. The threshold
for application of the Davis-Bacon Act wage level provisions
136
for Federal construction projects would be raised to
$250,000 from the present $2,000., a ceiling which has not
been raised since 1t was imposed in 2935.
o
social Security Earnings Test: A modest liberalization is
proposed for the social Security earnings test, which
reduces retirement benefits to aged recipients after their
earnings reach a specified amount in any year. For 1992,
the amount of earnings recipients are allowed before their
benefits are affected would be increased 8 percent, to
$11,000.
137
Table A-2. MAJOR INCREASES IN HUD PROGRAMS EXPANDING
CHOICE AND OPPORTUNITY
(Dollar amounts in millions)
1991
Proposed 1992
Dollar Change
Percent Change
Budget
Authority
Outlays
Budget
Outlays
Budget
Authority
Outlays
Budget
Authority
Authority
Outlays
Vouchers and Certificates'
6,517
4,454
8,277
4,930
+1,760
+475
+27
+11
Incremental Only
1,713
1,330
2,415
1,440
+703
+110
+41
$
HOPE Initiative Total
$287
11
2,147
142
+1,860
+130
+648
+1,141
HOPE Grants
'155
-
855
41
4700
+41
4452
n/a
Shelter Plus Care
*122
11
258
51
+136
+40
+111
+364
Preservation
-
-
718
36
+718
+36
n/a
n/a
Other HOPE
'10
-
315
13
+305
+13
+3,050
n/a
Enterprise Zone
-
-
a50
$50
*+50
$+50
n/a
a/a
HOME Grants
*500
10
1,000
105
+500
495
+100
+950
Low-Income Resident Economic
Empowerment Program
-
-
668
77
+668
+77
m/a
n/a
'Includes renewal funding for vouchers and certificates.
Reflects proposed budget-neutral supplemental.
"Reflects estimated revenue loss (tax expenditures).
m/a = Not applicable.
138
ENDING THE SCOURGE OF DRUGS AND CRIME
(Chapter V. B.)
Drug Funding: The budget proposes an increase of $1.2
billion (11% above 2991) for the war on drugs. The total
Federal budget to fight illicit drug use is over 808 higher
than when the President took office. Drug treatment and
prevention programs would grow by st or $260 million over
1991.
Drug Treatment: A new grant program is proposed to expand
the capacity to treat drug users (+$99 million) 8 and
increased funds are provided to expand services for
veterans' drug treatment (+$39 million).
Drug Prevention: The budget provides increased funding for
the Education Department's Drug Free Schools Program (+$25
million) ; an increase for HUD's Drug Elimination grants to
help provide a drug free environment in public housing
projects (+$15 million) ; and an increase for demand
reduction research (+$31 million).
Supply Interdiction: Under the proposed budget, supply
reduction programs would grow by 12% or $874 million over
1991.
Drug Law Enforcement: The budget proposes an increase of
$67 million (+20 percent) for the Organized Crime Drug
Enforcement Task Forces; an increase of $54 million for the
Drug Enforcement Administration to concentrate on drug
trafficking organizations; and an increase of $350 million
for the drug-related portion of the Federal Bureau of
Prisons.
International Law Enforcement: The budget includes
increases to fully fund the President's Andean Strategy and
provide conditioned military and economic assistance (+$150
million).
Anti-Crize Funding: Fighting crime retains its high
priority with a proposed $2 billion increase over 1991.
Included in the 1992 budget are: initiatives that would add
$328 million to the FBI to target both violent and white
collar crime; an increase of $104 million for the U.S.
Attorneys to ensure that criminals are tried and held
accountable for their offenses; an increase of $505 million
for the Judiciary to assure speedy and equitable trials; and
an increase of $467 million for the Federal Bureau of
Prisons to add 3,600 new prison beds by 1996 to help assure
that convicted offenders are incarcerated for their crimes.
139
Table B-1. FEDERAL SPENDING TO FIGHT THE WAR ON DRUGS
(Budget authority; dollar amounts in billions)
Actual
Percent
1992
Request
change,
1981
1989
1991
1991-92
Prevention
0.1
0.7
1.4
1.5
45
Treatment
0.4
0.9
1.5
1.7
+10
0.1
0.2
0.4
0.5
+12
Research
0.3
1.4
2.0
2.1
+4
Interdiction
International
0.1
0.3
0.6
0.8
+20
0.1
0.1
0.1
+6
Intelligence
-
Criminal Justice
0.4
2.8
4.4
5.0
+14
1.5
6.4
10.5
11.7
+11
Total
Table B-5. FEDERAL SPENDING WOULD INCREASE BY $2.1 BILLION
TO FIGHT CRIME
(Budget authority; dollar amounts in millions)
Actual
1991-92
1992
1989
1991
Request
Dollar
Percent
change
change
Federal Bureau of Investigation
1,439
1,693
2,021
+328
+19
Bureau of Prisons
1,542
1,738
2,205
+467
+27
U.S. Attorneys
460
675
779
+104
+15
Immigration and Naturalization Service
822
887
1,008
+121
+14
Drug Enforcement Administration
534
694
748
+54
+8
U.S. Marshals
205
290
347
+57
+20
Organized Crime Task Forces
-
335
402
+67
+20
Judiciary
1,476
2,046
2,551
+505
+25
Other
2,944
4,431
4,781
+350
+8
Total
9,422
12,789
14,842
+2,053
+16
140
DISTRIBUTING FEDERAL BENEFITS MORE FAIRLY
(Chapter V. c.)
The explosive growth of individual benefit programs since the
2960s has occurred without any cross-cutting or comprehensive
review of the fairness or equity in the distribution of federal
benefits. The budget identifies programs where large subsidies
are provided to upper income individuals and better targets
resources to those most in need.
o
Medicare: Wealthy Medicare beneficiaries receive an average
subsidy of $2,445. The budget proposes to reduce the average
subsidy to $1,690 in 1992 by adjusting premiums in the
taxpayer-subsidized Part B portion of the program for the
highest income beneficiaries. Individuals with adjusted
gross incomes (AGI) over $125,000 (couples, over $150,000)
who elect to participate in this voluntary component of
Medicare would have their premium subsidy reduced from 75
percent to 25 percent of total Part B program costs.
Agricultural Subsidies: Significant farm commodity program
payments are provided to individuals with non-farm AGIs over
$125,000. The budget proposes an income test that would
make these high income individuals ineligible for subsidies
in order to target farm program payments to those who depend
on farm income to ensure their farm's viability and support
their families.
Student Aid: Students from low income families are the most
likely to default on loans and may avoid post-secondary
education altogether for fear of incurring excessive debt.
The budget re-allocates student aid to provide more Pell
Grant assistance to students from the lowest income
families. Students from somewhat higher and middle income
families would be able to borrow larger amounts ($875 to
$6,000 more per year) under the heavily subsidized
Guaranteed Student Loan program. Pell Grant funding in
total would rise by $400 million over 1991, to $5.8 billion;
Guaranteed Student Loan volume, by $721 million, to $11.7
billion.
School Lunch: School Lunch meal subsidies now are provided
to all participating students, regardless of their family
income. The budget-heutral proposal would reallocate a
portion of the subsidy to the most needy. It would increase
the subsidy for children from families with incomes between
130 and 185 percent of poverty by as much as $45 a year.
This increase would be funded by a decrease of up to $11 a
year in the subsidy for children from families with incomes
above 185 percent of poverty. Under this proposal, School
Lunch is funded at the current law level of $4.3 billion, a
$244 million increase over 1991.
141
o
other Proposals: other proposals designed to increase the
fairness with which Federal benefits are distributed include
the following: (2) replacement of the untargeted Health
Professions Loan program with an improved Health Professions
Student Loan program to better serve disadvantaged students;
(2) standardization of Veterans Administration Dependency
and Indemnity Compensation program benefits to increase
payments for survivors of lower-rank military personnel and
(3) eligibility reforms to insure that basic social
Security benefits are available to rail industry families.
142
PROTECTING NATIONAL SECURITY
(Chapter VII. A.)
National Defense: The 1992 budget request for national defense is
$290.8 billion in budget authority and $295.2 billion in outlays,
consistent with the Budget Agreement signed last fall. Within
these amounts, funding for the military programs of the Department
of Defense (051) is $278.3 billion in budget authority and $283.0
billion in outlays. The 1992 budget authority level is 12% below
1990 in real terms (after inflation) and 24% below 1985.
Atomic Energy Defense and other Defense Programs: Funding for
defense-related programs of the Department of Energy and other
agencies is $12.5 billion in budget authority and $12.2 billion in
outlays.
o Savings in the Budget Agreement: Requested 1992 levels for
National Defense are $21.7 billion in budget authority and $14
billion in outlays below the planned 1992 levels in last year's
budget. The 1991-1995 levels are $130 billion in budget authority
and $97 billion in outlays below last year's plan.
Desert Shield and Desert Storm: Amounts requested in the budget do
not reflect the total 1991 incremental costs of Operation Desert
Shield, which includes Desert Storm. When costs can be more
reliably determined, a supplemental request will be submitted
formally. In the interim, Desert Shield placeholder amounts are
included in Government-wide allowances. These amounts assume
substantial foreign contributions.
Strategic Force Modernization: The budget provides for continued
modernization of Strategic nuclear forces including procurement of
four B-2 Stealth bombers, 115 Advanced Cruise Missiles, and 28
Trident D-5 Missiles.
SDI: The Administration is proposing a reorientation of the
Strategic Defense Initiative (SDI) to emphasize global protection
against limited strikes. In 1992, $4.6 billion is requested for
SDI. Funding in 1992-1997 is about 20% less than in earlier plans.
Force Reduction: The budget assumes continued modernization but
reduction in size of general purpose forces. Military personnel
levels are projected to decline by about 20% below 1990 levels by
the mid-decade and force structure (in terms of divisions, ships
and air wings) by about 25%.
Terminations: The budget proposes several program terminations,
with savings of about $10 billion from previous plans.
Terminations include the A-12 aircraft and the F-14D
remanufacturing program. Production ends in 1991 for the
Peacekeeper missile and the Trident submarine. Program rescissions
in 1991 total $3.4 billion reflecting proposed program terminations
in 1992 and elimination of low priority programs.
Management Initiatives: The budget assumes savings of $.7 billion
in 1992 as a result of functional consolidations and streamlining
of activities such as supply depots, inventory control points,
research and development laboratories, maintenance facilities, and
finance and accounting operations.
143
ADVANCING AMERICA'S INTERESTS INTERNATIONALLY
(Chapter VII. B.)
International Affairs Funding: The budget requests $34
billion in budget authority and $19.6 billion in outlays for
International Affairs (function 150), consistent with amounts
provided in the Budget Agreement signed last fall. The
International Affairs (150) budget category includes funding
for Security Assistance, development and humanitarian
assistance, the conduct of foreign affairs, foreign
information and exchange activities and international
financial programs.
IMF Quota Increase: Although budget authority for foreign
assistance increases by $13.9 billion over 1991, $12.2 billion
of this is the increase in the U.S. quota in the International
Monetary Fund. Such quota increases occur periodically and do
not involve outlays.
Security Assistance: $8 billion is requested for FY '92 with
emphasis on support of countries in the Persian Gulf region,
especially, Egypt, Turkey and Israel. In addition, more than
$400 million in security aid, 47% over 1991, is proposed for
narcotics programs in Andean countries.
© Development Assistance: The budget proposes a major increase
for the Enterprise for the Americas Initiative. This program
will promote economic growth and create jobs in Latin America
and the Caribbean by removing barriers to trade and
investment, and by reducing debt burdens.
o Eastern Europe: The budget also requests $400 million in
development assistance to Eastern Europe, up 8% over 1991, to
help the new democratic governments of that region to shift
their economies to free market operations.
o United Nations: Under conduct of foreign affairs, payments to
United Nations programs increase $417 million above 1991 to
$1.3 billion. Most of the increase is to pay arrearages
accumulated because of past appropriations shortfalls on
payments required by treaties.
144
FEDERAL CREDIT REFORM
(Chapter VIII. A.)
Total Federal Credit: The face amount of Federal and
federally assisted credit and insurance reached $6.2 trillion
in 1990 -- up 81 from 1989 and 2238 from ten years ago.
About half of all non-Federal borrowing is assisted by Federal
credit programs, Government-sponsored enterprises (GSE5), or
Federal deposit insurance. The present value of future budget
costs for these programs is in the range of $100-200 billion.
Effect of the Budget Agreement: Much was accomplished in the
Budget Agreement signed last fall to recognize and reduce
these potential costs. The Agreement required that budget
authority be available to pay the subsidy costs of direct
loans and loan guarantees when credit is extended.
GSL's: The budget proposes comprehensive reforms for the
guaranteed student loan (GSL) program that are expected to
reduce students. defaults and costs, while more effectively helping
FHA: The FHA multi-family mortgage program will be reviewed,
and steps will be taken to identify and eliminate physical and
financial problems in low income rental properties.
VA Mortgage Guarantees: Proposals are made to reduce defaults
and costs for the VA mortgage guarantee program.
Farm Credit System: Reforms are proposed to strengthen the
Farm Credit System (FCS), to continue improvements in FmHA
credit programs, and to enable Federal crop insurance to
better serve its purpose.
Pensions: Proposals are made to deal with underfunded
pensions and to advance PBGC claims in bankruptcy.
145
STRENGTHENING MANAGEMENT AND ACCOUNTABILITY
(Chapter IX. A.)
Investments in Financial Systems: The Budget requests $603
million for financial systems upgrades, $162 million (37%)
more than enacted in 1991. Correcting financial system
inadequacies is essential in order to prevent future
financial disasters, such as those at HUD. This investment
can also help correct the high volumes of loan defaults at
credit agencies generally.
Audited Financial Statements: The Budget specifically
includes $104 million to initiate audited financial
statements to disclose better the Government's financial
condition and implement the Chief Financial Officers Act of
1990.
High Risk Management Areas: High risk areas are those
designated by OMB as requiring personal attention by agency
heads. Agencies are making progress in reducing
vulnerability -- since 1989, 11 areas have been sufficiently
corrected so as to no longer warrant designation as high
risk and 12 new areas have been added. The budget
identifies sixteen high risk areas for priority attention in
Calendar Year 1991, including: Department of Energy
environmental clean-up; the Department of Education's
Guaranteed Student Loan Program; the Department of Housing
and Urban Development's financial management; and the Bureau
of Indian Affairs' administrative and financial management.
Credit Management and Debt Collection: To collect more of
over $100 billion in delinquent debt owed the Federal
Government, the budget proposes to: add over 1,700 staff
(in 1991 and 1992) to the Internal Revenue Service; add $44
million to improve debt collection and prevent future
defaults in education, veterans, and small business
programs; and add a $35 million pilot program to improve
internal controls and accounting in the Farmers Home
Administration.
Defense Management Reform: The budget adds 25 defense
management initiatives to the 34 reflected in the 1991
Budget, with savings totalling about $72 billion over the
1991-1997 period. These 1991 and 1992 management
initiatives will reduce civilian personnel by 28,000 and
military personnel by 45,000; consolidation of supply depots
and depot maintenance activities will save over $7 billion;
and service-specific initiatives will capitalize on
management structure streamlining and save over $5 billion.
Information Resources Management: The budget includes
increased investments in nine of the Federal Government's
significant information technology projects in such areas as
tax collection and patents. Two particular priorities are
146
the Department of Defense's Corporate Information Management
project and the Federal Bureau of Investigation's Integrated
Automated Fingerprint Identification System.
Procurement Reform: The budget includes several initiatives
to reform procurement practices, including: requirements
that government consultants disclose all other employers or
clients; proposed penalties barring misuse of sensitive
procurement information; and proposals to encourage greater
reliance on the commercial marketplace when purchasing goods
and services.
selected Improvements in Service Delivery: The budget
includes investments to improve service delivery in critical
areas directly affecting Americans. These include: an
increase of $375 million, or 98, to a total of $4.5 billion,
for operating the Social Security Administration; a $1.3
billion, or 168, increase for the Federal Aviation
Administration, to a total of $9.3 billion; and an increase
of $622 million, or 108, to a total of $6.7 billion, for the
Internal Revenue Service.
147
IMPROVING RETURNS ON INVESTMENT
(Chapters IX.B.,C. and D.)
Program Evaluation: The budget proposes an increased
investment in program evaluation. Over 20 program
evaluations -- involving 14 departments and agencies -- are
proposed, in areas ranging from defense mobilization to Head
Start.
Budget Process Reform: The budget proposes a joint budget
resolution requiring the President's signature; enhanced
rescission authority requiring an up-or-down vote in
Congress on Presidential rescission proposals; the
Presidential line-item veto for provisions in legislation
reflecting narrow or special interests; and a balanced
budget amendment to the Constitution, with safeguards
against achieving the balance through higher taxes.
Risk Management Budgeting: The budget contains a new
initiative -- Risk Management Budgeting -- the objective of
which is to lower both risks to public health and safety and
costs by allocating efficiently scarce resources. The
concept of Risk Management Budgeting will be tested in 11
pilot programs, some involving budget outlays and some
involving regulations.
Terminations and Reductions: To meet the discretionary
spending limits set under the budget agreement -- and still
fund priorities such as education, prevention, research and
development, transportation infrastructure, environmental
protection, drug prevention and treatment, and law
enforcement -- some programs must be reduced, and others
must be terminated. Terminations are proposed for 207
projects which do not meet published statutory or regulatory
criteria, reducing 1992 budget authority needs by $.6
billion. The budget would terminate 64 defense programs
(saving $6.7 billion) and more than 3,000 other low priority
domestic discretionary projects and some entire programs
(saving $4.4 billion). In addition, 7 defense and 261
domestic programs (saving $1.9 and $8.3 billion,
respectively) would be funded below 1991 levels.
148
Table II-11. PROPOSED OUTLAYS, BY AGENCY
(In billions of dollars)
1991'
1992
Agency
Discretionary
Mandatory
Total
Discretionary
Mandatory
Total
Cabinet Agencies:
Agriculture
11.8
43.9
55.4
12.5
48.2
55.7
Commerce
29
-0.1
2.8
29
-0.1
23
Defense-Civil
8.4
23.0
26.4
8.5
34.7
28.2
Defense-Military
233.3
-0.8
287.5
283.8
-0.7
283.0
Education
18.8
6.1
24.8
20.5
7.0
27.5
Energy
16.0
-24
18.5
17.4
-2.5
14.9
Health and Human Services
27.8
458.4
486.8
28.7
496.6
$25.3
Housing and Urban Development
21.8
1.7
23.5
23.4
0.9
24.3
Interior
6.6
-0.2
6.4
6.7
-0.2
6.5
Justice
7.7
1.0
8.7
9.0
1.0
10.0
Labor
8.8
25.7
84.5
9.2
25.5
84.8
State
4.0
0.3
4.3
4.2
0.3
4.5
Transportation
30.5
0.2
20.8
31.6
0.8
31.9
Treasury
8.8
268.3
277.1
9.6
289.0
298.6
Veterans Affairs
13.9
17.5
313
14.7
18.1
82.8
Major Agencies:
Deposit Insurance Accounts
0.1
111.4
111.5
-
88.1
88.1
Environmental Protection Agency
5.9
-0.1
5.8
6.1
-0.2
5.9
General Services Administration
0.9
-0.1
0.8
0.9
-0.1
0.7
National Aeronautics and Space Admin-
istration
13.5
-
13.5
14.7
-
14.7
Office of Personnel Management
0.2
85.0
35.2
0.2
36.8
37.0
Small Business Administration
0.5
-
0.5
0.5
-0.2
0.8
Other Agencies:
Executive Office of the President
0.3
-
0.3
0.3
-
0.3
Funds Appropriated to the President
118
-0.5
11.3
12.7
-0.7
120
Judicial Branch
19
0.2
2.1
22
0.1
23
Legislative Branch
22
0.3
2.5
2.6
0.4
3.0
Other Independent Agencies
10.3
4.0
14.2
9.4
4.6
14.0
Allowances
8.2
-
8.2
4.7
-
4.7
Undistributed offsetting receipts
-
-109.4
-109.4
-
-118.0
-118.0
Total Outlays
526.3
883.8
1,409.6
532.1
913.8
1,445.9
"Includes impact of supplementals and rescissions.
149
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release
April 9, 1991
THE PRESIDENT'S ECONOMIC GROWTH AGENDA
FACT SHEET
The President believes that a strong, growing, and dynamic
economy enhances job creation and opportunity for all
Americans. The Administration is pursuing an economic growth
agenda built around four principles:
Encouraging Savings and Investment
Opening New Opportunities in International Markets
Promoting an Educated and Dynamic Workforce
Reducing the Burden of Government Regulation
I. ENCOURAGING SAVINGS AND INVESTMENT
The President is committed to creating conditions that foster
long-term, market-driven economic growth. The Administration
is taking important steps to lower the cost of capital and to
encourage entrepreneurship, savings, investment, and
innovation. The President is pursuing policies that will lower
the barriers to the formation of productive capital and ensure
that our physical, human, and technological infrastructure
remains the finest in the world.
A.
Reducing the Cost of Capital
Controlling Government Borrowing
The President is committed to controlling Federal
government spending. Last year's budget agreement
will decrease the Federal government's borrowing
requirements by nearly $500 billion over the next
five years. The agreement's spending caps set limits
for discretionary spending while a pay-as-you-go
system will force new mandatory spending to be offset
by revenue increases or reductions in other programs.
151
Increasing Private Savings and Investment in the Economy
The President has repeatedly called for a reduction
in the capital gains tax rate and has asked Federal
Reserve Chairman Alan Greenspan to lead a technical
study of the economic effects of the capital gains
reduction.
The Administration's Fiscal Year 1992 Budget also
includes proposals for Family Savings Accounts which
will create needed incentives to save and penalty-
free IRA withdrawals for first-time home buyers.
Encouraging an Innovative and Sound Financial System
The Administration's financial industry reform
package will help ensure the continued strength of
our Nation's financial system. Comprehensive banking
reform will modernize our outdated banking laws,
protect taxpayers and depositors, help alleviate
tight credit conditions, and make our financial
institutions more competitive at home and abroad.
B.
Investing in Infrastructure and Research and Development
Revitalizing our Transportation Infrastructure
The Administration is proposing a significant
increase in Federal highway spending, from $14.6
billion in 1991 budget authority to $20.3 billion in
1996. On a cumulative basis, almost $88 billion will
be provided for highway construction and
rehabilitation over the next five years. The
Administration is also proposing a 17 percent
increase in budget authority for our Nation's
aviation systems.
Expanding Research and Development
The President's FY 1992 budget includes $76 billion
for research and development, an $8.4 billion (13
percent) increase over 1991 levels. To encourage
private sector R&D, the President supports the
permanent extension of the Research and
Experimentation Tax Credit.
Implementing the National Energy Strategy
The President transmitted his National Energy
Strategy to the Congress in February. The Strategy
is a comprehensive and balanced plan for a secure,
152
efficient, and environmentally sound energy future.
Over the next two decades, the Strategy will remove
unnecessary barriers to market forces so that ample
supplies of affordable energy can continue to foster
economic growth.
II. OPENING NEW OPPORTUNITIES IN INTERNATIONAL MARKETS
Throughout the postwar period, the United States has led the
world toward a system of free trade and open markets. The
benefits of global economic integration and expanded
international trade have been enormous, at home and abroad.
The President and his Administration are aggressively working
with the Congress to remove the remaining barriers to
international trade and investment in our own hemisphere and
throughout the world. Today, America is in the midst of an
export boom. Merchandise exports have risen 55 percent in the
last 4 years -- twice as fast as imports. Continuation of fast
track authority for congressional approval of trade agreements
is crucial to the President's trade strategy.
A.
Successfully Concluding the Uruguay Round Negotiations
The President's top trade priority remains the Uruguay
Round negotiations of the General Agreement on Tariffs and
Trade. Success in the Uruguay Round will open
agricultural markets, lower or eliminate tariffs on many
products, strengthen the GATT system, and extend it to
cover important new areas -- such as services, investment
and intellectual property -- critical to U.S. economic
vitality. A strong multilateral trading system is
essential to America's economic future, since it assures
our businesses access to growth markets in Europe and
Asia.
B.
North American Free Trade Agreement
The President has committed with Mexican President Salinas
and Canadian Prime Minister Mulroney to negotiate a North
American Free Trade Agreement (NAFTA). Creation of a
NAFTA, with a market of some 360 million consumers and
total output of $6 trillion, would be a catalyst for
economic growth and development throughout the three
countries.
The U.S.-Canada Free Trade Agreement has contributed to
growth in both economies in its first two years.
153
Bilateral trade increased approximately nine percent from
1988 to 1989 and 4.2 percent from 1989 to 1990 despite a
slowdown in both economies.
C.
Advancing the Enterprise for the Americas Initiative
The Enterprise for the Americas Initiative promises to
fuel growth and prosperity throughout this hemisphere by
removing barriers to trade and investment. This
Initiative also aims to provide official debt reduction to
countries engaged in significant economic reforms and
thereby to build on the Administration's ongoing support
for commercial debt reduction. Restoring Economic growth
in Latin America will boost U.S. trade, since the region
is a natural market for American goods, services, and
investment.
D.
Challenging Unfair Trade Barriers
The Administration is pursuing numerous bilateral
initiatives aimed at persuading foreign governments to
open their markets and remove unfair barriers to American
goods, services, and investment. In addition, the
Administration is involved in ongoing bilateral
negotiations with Japan to identify and eliminate
structural factors that may impede balance of payments
adjustment and efficient patterns of world trade. Our
policy is to address trade concerns by opening foreign
markets, not by closing our own.
E.
Promoting the Nation's Exports
The President is committed to building on these market-
opening initiatives by expanding the nation's exports, a
major source of growth in recent years. The Trade
Promotion Coordinating Committee has for the first time
brought together the resources of eighteen Federal
agencies to provide one-stop shopping to U.S. businesses
seeking help in exporting. As part of this effort, the
Department of Commerce is sponsoring a series of seminars
across the country to help prospective exporters expand
overseas sales.
154
III. PROMOTING AN EDUCATED AND DYNAMIC WORKFORCE
The President believes that long-term economic growth requires
skilled and adaptable workers as well as modern capital and new
technology. The Administration is taking important steps to
ensure that American workers are well-educated and highly-
skilled and that U.S. labor markets remain the world's most
dynamic and flexible.
A.
Restructuring the Education System
The President is committed to educational excellence
for all Americans. He has advocated choice in education,
increased flexibility in education-related funding in
exchange for greater accountability, alternative
certification for teachers and principals, rewards for
outstanding teachers and for schools that improve their
students' achievements, and innovative approaches
to mathematics and science education. In partnership with
the Nation's governors, the Administration is working to
determine how best to measure and monitor progress toward
the national education goals. The President will soon
propose a new Educational Excellence Act with additional
initiatives.
B.
Maintaining Flexible Labor Markets
The President has taken a number of steps to preserve the
dynamism which is the hallmark of U.S. labor markets. He
has continued to oppose mandated employer benefits which
will reduce the options available to employees and slow
down job growth in the economy. The President supports
flexible benefit packages, negotiated between employers
and employees.
The President opposes recent efforts to undermine more
than fifty years of balance in labor/management relations.
He objects to current Striker Replacement Legislation that
would prohibit employers' ability to continue operations
during labor disputes through the use of permanent
replacement workers. i Cooperation, not confrontation, is
the key to international competitiveness.
The Immigration Act of 1990, the first major reform of
legal immigration in a quarter-century, will substantially
increase the overall level of immigration, particularly of
skilled workers. These new workers will contribute to
U.S. economic growth.
155
C.
Improving our Job Training Efforts
The President proposed amendments to the Job Training
Partnership Act (JTPA) which would have targeted job
training efforts toward severely disadvantaged adult and
youth workers. In an effort to reach youth in poverty
stricken inner-city neighborhoods and rural communities, a
new Youth Opportunities Unlimited (YOU) Program was
proposed for certain high-poverty areas. In addition, the
Job Opportunities and Basic Skills Program (JOBS) allows
the states flexibility in providing Aid to Families with
Dependent Children (AFDC) recipients help in acquiring
needed job skills. The Administration currently is
preparing a JTPA bill to transmit to the 102nd Congress.
IV. REDUCING THE BURDEN OF GOVERNMENT REGULATION
The remarkable flexibility of the U.S. economy, which stems
from its reliance on free markets, is a major national asset.
Government regulations generally reduce economic flexibility
and thus should have a very limited role. Where regulation is
necessary, regulatory programs should pass strict cost-benefit
tests and should seek to harness the power of market forces to
serve the public interest, not to distort or diminish those
forces.
A.
Council on Competitiveness Deregulation Task Force
The Vice President's Council on Competitiveness has formed
a task force to study deregulation's effect on the U.S.
economy. This task force will examine the Federal
government's role in the marketplace by studying the
history and costs and benefits of regulations on a wide
variety of industries: transportation, communications,
energy and financial services.
B.
Biotechnology
The Vice President's Council on Competitiveness recently
released the Report on National Biotechnology Policy
outlining the Administration's commitment to free market
development of biotechnology products. The Report makes
15 recommendations within three broad policy areas:
investing in science and technology; risk-based
regulation; and a free market environment providing
156
capital and financial resources and protecting
intellectual property rights.
C.
Joint Production Ventures
The Economic Policy Council has developed a proposal which
would encourage manufacturing consortia and joint ventures
among industrial competitors. Currently, antitrust laws
inhibit such ventures due to uncertainties regarding the
risk of prosecution and private lawsuits. The current
proposals would require the Justice Department and courts
to consider global competition when deliberating antitrust
issues.
D.
Drug Approval Process Working Group
The working group has been assembled to review the FDA's
drug approval process and propose operational or
structural changes. This is an effort to create a more
time-conscious and efficient process, especially with
respect to experimental drugs, without increasing risk.
Further, the group will review the condition of the U.S.
pharmaceutical industry and suggest options for
maintaining its health and competitive position.
E.
Telecommunications
Estimates reveal deregulation in the telecommunications
industry may save the U.S. economy $45 billion per year.
Despite its aggressively dynamic nature the structure,
conduct and performance of this industry is still largely
determined by legal and regulatory decisions and
restraints. Telecommunications is critical to our
nation's economic future. Unnecessary barriers and
regulation must be eliminated and our regulatory policies
must be balanced and market based.
157
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release
April 9, 1991
REMARKS BY THE PRESIDENT
TO THE AMERICAN BUSINESS CONFERENCE
The Department of Commerce
Washington, D.C.
2:07 P.M. EDT
THE PRESIDENT: Thank you very, very much. And, Bob,
thank you, sir, for that introduction and for letting this
distinguished group use this meeting room today. It's always a
pleasure to be back here.
Let me also salute the ABC's leader, Jim Jones. What a
job he's doing. But I remember his effectiveness in the leadership
role in the Congress and I'm glad that those energies that he has are
being used and shared by all of you. We have many distinguished
visitors with us today, and I won't single them out. I was told that
Bill Seidman and Richard Breedon were here. But as I look around,
unless they're basking way back in anonimity somewhere, they may not
have made it.
But in any event, I'm delighted to see this group. Great
to talk to the American Business Conference. We did a little
homework on this. And I've been here four times in recent years.
And then, of course, we're privileged to have two of your own with us
in the administration, Bob Mosbacher and Arthur Levitt.
And it's an honor and a pleasure to, as Bob says, talk to
a group that stands for success -- a group that admits only
medium-sized companies that thrive in the marketplace.
But I've got to tell you, I feel a little funny being
here. After all, I'm the CEO now of an outfit that's lost money for
33 of the last 35 years. (Laughter.)
But in keeping with today's theme -- Charting Economic
Growth in the '90s -- I'd like to talk about our administration's
plan for generating more American success stories like your own.
Our recent success in the Gulf has renewed America's
belief -- Americans' belief in themselves. In just the past couple
of months, consumer confidence has soared. And the stock market, of
course, has been climbing toward that 3,000 mark. Most economists
predict that the recession soon will give way to a new cycle of
growth. And, incidentally, our -- we agree with that assessment,
inside.
But we can't rest on our laurels. There's an entire
world of competition out there. The administration's economic growth
package is designed to let people like you do what you do best --
create jobs, create new opportunities, create wealth.
Let's start with an issue that we all have to address in
the next month. And I think Bob just talked about it -- Jim has been
participating in a meeting with me in the Cabinet Room at the White
House about it -- I'm talking about the issue of free and fair trade.
As you know, I have asked Congress to extend the
Fast-Track trade authority.
Fast-Track, in my view, is another term for good faith.
It guarantees that Congress will accept or reject the very same
MORE
159
agreements that our negotiators and their counterparts have worked
out. And this doesn't weaken the Congress' power to review
agreements; it simply prevents eleventh-hour changes that would force
negotiators from all countries to start over -- to start from
scratch.
Our trading partners consider Fast-Track a vital test of
our reliability. And if we do not retain the Fast-Track process, we
jeopardize three critical foreign trade initiatives: the Uruguay
Round of trade talks, the North American Free Trade Agreement, and
the Enterprise for the Americas Initiative.
Americans understand the benefits of free trade. In the
last four years, exports from the United States have increased 55
percent, more than twice the rate of import growth. And export
business has grown more rapidly than the rest of our economy.
This trade boom has helped everyone involved. A North
American Free Trade Agreement would place us in the largest
integrated market on earth: 360 million people, $6 trillion of
annual output. It would also give our neighbors access to the
technologies and products that they need to improve their standards
of living; further clean their environments; and create a true
community of nations on our continent.
We also believe strongly in promoting trade. I have
asked Bob Mosbacher to lead a government-wide effort to help small-
and medium-sized companies sell their goods and services abroad. I
know you support free trade, which is why I want to help you in
persuading Congress to extend the Fast-Track process. Without it, we
will surrender our chance to shape the emerging world economy.
Without it, we risk setting off the kind of protectionist warfare
that helped produce the Great Depression. And with it, American
workers and businesses will be able to demonstrate their strength in
a new and vibrant world market.
Let me say that we are approaching this Fast-Track
process on the Hill in a totally nonpartisan manner. The Democratic
leaders, several of the key Democratic leaders, are as enthusiastic
about this Fast-Track authority granting as I am. And we're
approaching it strictly because we believe that it is best for the
United States of America. And I also know that it's good for our
trading partners as well.
This brings me, then, to a second part of our growth
package: creating an educated, innovative work force.
Our budget emphasizes the importance of building an
America that is ready to take its place in an emerging world economy.
It stresses the absolute necessity of an educated nation.
We want to reinvent the American school, to create a nation of
students, to make sure that education offers opportunity to everyone.
Our education strategy starts with some very obvious
truths: that schools succeed when teachers teach. When parents
support the schools. When schools accept help from people with
skills -- local businesses, community colleges -- that huge pool of
untapped talent, our retirees. When communities fight harder to rip
down barriers that prevent effective teaching, barriers such as
crimes and drugs and community indifference.
And we also want to encourage entrepreneurship in
education. We will support research into the best teaching methods
and techniques. We want to help workers improve their knowledge and
skills. Your Vital Link program offers a great way to achieve this
goal. And we want to ensure that the American people are the best
educated, best motivated in the entire world.
Our economic proposals also sweep away obstacles to free
enterprise. What we're trying to do, we're trying to unleash the
power of American imagination.
MORE
160
Your organization understands, I'd say better than most,
that runaway government spending steals opportunity from private
citizens. Last year's budget agreement -- controversial though it
was -- placed real and stringent caps on congressional spending. If
Congress wants to spend money now, more money on certain programs,
it'll have to make the hard choices. It'll have to raise taxes or
take the money from other programs.
This year, for the first time in years, federal spending
will actually increase less rapidly than the inflation. And I can
promise you that if Congress sends me these spending bills that break
this budget, I will send them back, with a veto message. (Applause.)
But there's lots more to do. We in government must do
more. As vice president, I headed the Task Force on Regulatory
Relief. And as President, I remain committed to weeding out
regulations that prevent people from creating jobs and opportunities.
(Applause.) I see some know what over-regulation means. (Laughter.)
But we're going to continue to do this and we must.
Last year regulations -- here's why -- last year
regulations cost the economy at least $185 billion or $1,700 for
every taxpayer. The government generated more than 5.3 billion hours
of paperwork last year. And that's enough to keep 2 million people
busy doing nothing but filling out forms.
Our Council on Competitiveness, as chaired by Vice
President Quayle, attacks the scourge of unnecessary regulation. We
want to let people turn their attention to the more important and
rewarding work of building a prosperous future.
We've followed the same approach in looking at our tax
code. We want a tax system that rewards enterprise. I have
repeatedly asked the United States Congress to cut our high capital
gains tax.
And I can't think of any issue that's been more badly
misrepresented than this one. Our critics say that a capital gains
cut helps only the rich. And in my view, they are dead wrong.
Here are the facts on it. More than a quarter of all
families who file capital gains have annual incomes of less than
$20,000 a year. More than three-quarters of all families who
declared make less than members of Congress. A capital gains cut
isn't a sop to the rich. It rewards people who turn good ideas into
goods and services -- goods and services that people need.
When taxes on entrepreneurship are high, investors have
no incentive to risk money on untried businesses and entrepreneurs.
Before Congress cut the capital gains rate in 1978, the pool for
start-up businesses had virtually dried up. And after the cut, we
experienced an investment boom. Between 1978 and 1986, the number of
initial public offerings increased nearly 1600 percent from 45 to
719. The amount of investment seed money increased nearly a
hundredfold, from $250 million to $22.5 billion. Capital gains
payments to the federal government quadrupled. This is what happens
when you reduce the cost of capital.
We must encourage savings and discourage debt. And for
the past four years we've taxed capital gains like any other form of
income. And at the same time, we have encouraged people to take on
debt. Not surprisingly, people have borrowed more and invested less.
Home equity lines of credit offer a perfect example. These devices,
which let homeowners borrow against their increased home values have
nearly tripled in volume since tax reform.
No other major industrial power taxes capital gains at
nearly the rate we do. Germany and Japan enjoy much higher savings
and investment rates in part because they don't punish successful
investment.
MORE
161
My point is simple: Taxes on growth are taxes on the
American dream. We should clear away obstacles to the American
dream. And similarly, we should foster innovation wherever we can.
Our budget advocates increased federal support for R & D,
for research and development, in basic and applied science. It also
encourages private-sector innovation by extending the Research and
Experimentation Tax Credit. Our administration understands the power
of knowledge, and we want the tax code to reward people who turn
their big dreams into revolutionary new goods and services.
And finally, this administration believes in protecting
workers' earnings and savings. Our banking reform proposals -- they
try to modernize the laws that affect our banking system. Let's face
it: 1930's regulations and restrictions don't cut it in the 1990s.
To pick just one example, under our current laws, a
California bank can open a branch in Birmingham, England, but not in
Birmingham, Alabama. Think of the banking system as an irrigation
network for the economy. When it works properly, it nourishes the
seeds of economic growth. And when it doesn't, companies like the
ones represented here can wither and die.
Our reform package tries in a very comprehensive way to
make our banking system more competitive, up to date, safe and sound.
We also believe in protecting retirees from undue
hardship. Eight years ago, Congress adopted measures to guarantee
the short-term solvency and long-term stability of the Social
Security system. Congress should resist any temptation to undermine
that stability by permitting raids on the trust fund balances. We
need to honor our promises to the workers and retirees. I know we've
got a fight on this one. But I believe we're going to prevail.
I know I have covered a lot of ground, a lot of different
-- touching on a lot of different issues here, but I wanted to make a
point: Our growth package addresses the challenges posed by a new,
exciting, rapidly changing world. Our themes: We want to promote
growth. We want to create jobs for all Americans. We want to
unleash the power of American imagination. We want to ignite
people's ambitions, rather than inciting their fears.
Many people call the 20th century "The American Century."
Well, we shouldn't be content with that.
The stunning collapse of communism in 1989 was no
accident. During the 1980s the communist world learned that no wall,
no barrier can fend off powerful ideas. It saw our prosperity and
our vitality. It saw that our way is better. The prosperity of the
1980s, which began with tax cuts and pro-growth policies in the
United States, transformed the entire world.
Our challenge now is to shape the revolution that we
started to make the 21st century the next American Century.
And so I ask your help in that quest. Together, with
business working cooperatively with government, we cannot fail.
Thank you all very much for coming to Washington. And
may God bless our great country.
END
2:26 P.M. EDT
162
THE WHITE HOUSE
Office of the Press Secretary
EMBARGOED FOR RELEASE
UNTIL 2:00 P.M. EDT
APRIL 18, 1991
AMERICA 2000: THE PRESIDENT'S EDUCATION STRATEGY
FACT SHEET
The President today outlined his strategy to move the Nation toward achieving the
national education goals and educational excellence for all Americans. The
President believes we must restructure and revitalize America's education system
by the year 2000.
Emphasizing that this effort is a national challenge, the President asked all
Americans to take part in "the crusade that counts most -- the crusade to prepare
our children and ourselves for the exciting future that looms ahead."
AMERICA 2000 builds on four related themes:
Creating better and more accountable schools for today's students;
Creating a New Generation of American Schools for tomorrow's
students;
Transforming America into a Nation of Students; and
Making our communities places where learning will happen.
I. CREATING BETTER AND MORE ACCOUNTABLE SCHOOLS
FOR TODAY'S STUDENTS
The President called on all Americans to help create better and more accountable
schools based on world class standards and the principle of accountability. He
encouraged all elements of our communities -- families, businesses, unions, places
of worship, neighborhood organizations and other voluntary associations -- to
work together with our schools to help the Nation achieve educational excellence.
163
A.
World Class Standards in Five Core Subjects
The President believes the time has come to establish world class standards for
what our children should know and be able to do in five core subjects: English,
mathematics, science, history, and geography.
Through the National Education Goals Panel, and working with interested
parties throughout the Nation, the President and the Governors will develop
a timetable for establishing national standards in these five subjects, and in
September 1991, and each year thereafter, the panel will report to the
Nation on progress toward the national education goals.
The standards are intended to lift the entire education system and improve
the learning achievement of all students. The President and the Governors
oppose a national curriculum or federalizing our education system.
B.
A System of Voluntary National Examinations
Throug! e efforts of the National Education Goals Panel, a system of voluntary
examinations will be developed and made available for all fourth, eighth, and
twelfth grade students in the five core subjects.
These American Achievement Tests will challenge all students to strive to
meet the world class standards and ensure that, when they leave school,
students are prepared for further study and the workforce. The tests will
measure higher order skills (i.e., they will not be strictly multiple choice
tests).
The President, working with the Nation's Governors, will seek
Congressional authorization for State-level National Assessment of
Educational Progress assessments and for optional use of these assess-
ments at district and school levels.
Students who distinguish themselves on the American Achievement Tests
will receive a Presidential Citation for Educational Excellence in recognition
of their outstanding achievement.
The President will seek authorization for Presidential Achievement
Scholarships to reward academic excellence among low income students
pursuing postsecondary education opportunities. These financial awards
will be based on superior high school and college performance.
164
C.
Schools as the Site of Reform
The Administration will help strengthen the capacity of elementary and secondary
schools to improve results and to innovate by increasing flexibility in
decisionmaking at the State, district, and school levels and encouraging report
cards on performance.
In addition to an annual National Report Card, the President will encourage
schools, school districts, and States to issue regular report cards on their
education performance. These report cards will measure results and
progress toward achieving the national education goals.
As part of his AMERICA 2000 Excellence in Education Act of 1991, the
President will again seek legislation that will allow greater flexibility in the
use of Federal resources for education in exchange for enhanced
accountability for results.
To stimulate reform in mathematics and science education, the AMERICA
2000 Excellence in Education Act of 1991 will include $40 million for new
grants to school districts that show significant gains in student achievement.
Awards will be used for continued improvements in these vital subjects.
The AMERICA 2000 Excellence in Education Act of 1991 also will seek
funds for a Merit Schools Program for States to award individual schools
that demonstrate significant progress toward the national education goals.
States may "bank" funds over several years to create even more incentives
for successful schools.
D.
Providing and Promoting School Choice
The President believes that educational choice for parents and students is critical
to improving our schools.
The President will promote State and local choice programs as part of his
AMERICA 2000 Excellence in Education Act of 1991.
A $200 million Education Certificate Program Support Fund will
provide incentive grants to local school districts with qualified
education certificate programs that enhance parental choice.
National school choice demonstration projects will be supported
through a $30 million initiative.
The Administration also will seek ways to ensure that Federal education
programs are more supportive of choice.
165
E.
Teachers and Principals
America's teachers and principals are on the front lines of transforming our
schools. As part of his AMERICA 2000 Excellence in Education Act of 1991, the
President will propose several initiatives to promote outstanding leadership in our
schools.
Presidential Awards for Excellence in Education will recognize and reward
outstanding teachers across America.
The President will encourage States and communities to provide alternative
routes of certification through one-time grants to States to support
implementation of alternative certification.
In order to improve the training of school principals and other school
leaders, the President will propose establishing Governors' Academies in
every State with Federal seed money to enhance principal training through
instructional and mentoring programs.
The President will seek to establish Governors' Academies for America's
teachers with Federal seed money to offer advanced instruction focusing on
the five core academic disciplines.
The President also encouraged States to consider differential pay and financial and
other awards for those who excel in teaching, teach core subjects, teach in
challenging settings, and serve as mentors for new teachers.
II.
CREATING A NEW GENERATION OF AMERICAN SCHOOLS
FOR TOMORROW'S STUDENTS
The President today challenged the best minds in America to design -- and help
communities create -- the best schools in the world.
A.
Research and Development
A series of Research and Development Teams, funded by contributions from the
business community, will help design a New Generation of American Schools.
America's business leaders will establish and mobilize private resources for
the New American Schools Development Corporation, a new non-profit
organization that will award contracts in 1992 to between three and seven
Research and Development Teams. These teams may consist of
166
corporations, universities, think tanks, school innovators and others. The
teams' products will be available to the American people.
The mission of these teams is to help communities create schools that will
reach the national education goals, including world class standards in the
five core subjects for all students, as monitored by the American
Achievement Tests and similar measures.
The President will ask his Education Policy Advisory Committee, as well as
the Department of Education, to examine the work of these Research and
Development Teams and to report on their progress.
B.
New American Schools
The President will ask Congress to provide $550 million in one-time start-up
funds to create at least 535 New American Schools that "break the mold" of
existing school designs.
These funds will provide up to $1 million for each New American School to
underwrite special staff training, instructional materials, or other support
the school needs. The goal is to have at least one New American School
operating in each Congressional district by September 1996.
Once the schools are launched, the operating costs of the New American
Schools will be no more than those of conventional schools.
The President also will ask Congress for start-up funds to help design
state-of-the-art technology appropriate for New American Schools.
A New American School does not necessarily mean new bricks-and-
mortar. Nor does a New American School have to rely on technology;
the quality of learning is what matters.
C.
AMERICA 2000 Communities
The President called on every community in the country to do four things:
Adopt the six national education goals;
Establish a community-wide strategy for achieving the goals;
Develop a report card for measuring its progress; and
Demonstrate its readiness to create and support a New American School.
167
Communities that accept this challenge will be designated, by the Governors of
their States, as "AMERICA 2000 Communities."
Governors, in conjunction with the Secretary of Education, will review
community-developed plans with the assistance of a distinguished advisory
panel and will determine which AMERICA 2000 Communities in each State
will receive Federal financial support in starting New American Schools.
The Governors and the Secretary will ensure that many such schools serve
communities with high concentrations of children at risk.
D.
Leadership at All Levels
Transforming American education and creating a New Generation of American
Schools will require the commitment of America's leaders at all levels.
The President welcomes the commitment by American business to
contribute $150-$200 million to support the Research and Development
effort.
The President asked the Nation's Governors to lead the New American
Schools effort in their States.
The President challenged State legislatures to: support the creation and
operation of New American Schools; embrace the world class standards
and adopt the American Achievement Tests; and work toward school,
district, and State-level report cards.
The President encouraged civic leaders to help organize community plans
all across the country to seek designation as an AMERICA 2000
Community, and to help plan and operate New American Schools.
Business can encourage local schools to use the world class standards and
American Achievement Tests, and encourage schools to issue report cards
on their performance.
The President called on educators to accept new roles and to take risks.
Teachers, principals, and other educators are asked to work to develop a
consensus on the world class standards and to determine what it would
take to create a New American School in each community.
E.
Families and Children Devoted to Learning
The President called on parents to urge use of world class standards, American
Achievement Tests, and report cards by local schools. Parents must play a key
168
role in creating New American Schools in their own communities and must work
with children in the home to improve children's performance in school.
III.
TRANSFORMING AMERICA INTO "A NATION OF
STUDENTS"
The President believes that learning is a life-long challenge. Approximately 85
percent of America's workers for the year 2000 are already in the workforce.
Improving schools for today's and tomorrow's students is not sufficient to ensure a
competitive America in the year 2000. The President called on Americans to move
from "A Nation at Risk" to "A Nation of Students" by continuing to enhance the
knowledge and skills of all Americans.
A.
Strengthening the Nation's Education Effort for Yesterday's Students,
Today's Workers
To advance the goal of improving literacy for all Americans:
The President will push for greater accountability and choice in the Adult
Education Act, and will advance these twin principles in new adult literacy
activities proposed under the new AMERICA 2000 Excellence in Education
Act of 1991.
The Department of Education will provide regular, timely, and reliable
information by expanding the National Adult Literacy Survey and collecting
information about literacy efforts on a regular basis.
B.
Establishing Standards for Job Skills and Knowledge
The President urged business and labor cooperatively to develop -- and then to
use -- world class standards and core proficiencies for each industry. Federal
resources will be sought to provide start-up assistance for this effort.
C.
Creating Business and Community Skill Clinics
Today's workers will be assisted through Skill Clinics -- one-stop service centers
located in businesses and communities across America where adults can get job
skill diagnosis and referral services.
The Administration will urge businesses to make Skill Clinics available to
their employees and encourage AMERICA 2000 Communities to establish
community Skill Clinics.
169
Federal departments and agencies will be encouraged to establish such Skill
Clinics and, working with the Office of Personnel Management, will be
encouraged to undertake activities to upgrade their employees' skills.
D.
Enhancing Job Training Opportunities
The Domestic Policy Council Job Training 2000 Working Group will review
current Federal job training efforts and identify successful ways of motivating and
enabling individuals to receive the comprehensive services, education, and skills
necessary to achieve economic independence.
E.
Mobilizing A "Nation of Students"
The President will work to transform "A Nation at Risk" into "A Nation of
Students."
The President called on the Secretary of Education and the Secretary of
Labor to convene business and labor leaders, education and training experts,
and Federal, State, and local government officials at a national conference
on the education of adult Americans to launch a national effort to transform
adult America into a "Nation of Students."
IV.
MAKING OUR COMMUNITIES PLACES WHERE LEARNING
WILL HAPPEN
The President called on communities to adopt the six national education goals as
their own; set a community strategy to meet them; produce a report card to
measure results; and agree to create and support a New American School.
The President believes that it is essential to reaffirm such enduring values as
personal responsibility, individual action, and other core principles that must
underpin life in a democratic society. The aim of the AMERICA 2000 Community
campaign is to make our communities places where learning will happen.
A. Greater Parental Involvement
The President urged parents to become more involved in their children's education
and in the work of the New American Schools.
170
Parents and teachers should encourage children to study more, learn more,
and strive to meet higher academic standards.
The President encouraged parents to read aloud daily to their children,
especially their younger children.
B.
Enhanced Program Effectiveness for Children and Communities
The President is committed to making government work better to improve
programs for America's children and communities.
Working through the Domestic Policy Council Economic Empowerment
Task Force and with the Nation's Governors and other officials, the
Administration will undertake better coordination of existing Federal
programs with corresponding State and local activities.
As part of this effort, existing program eligibility requirements will be
reviewed in order to streamline them and reduce Federal red tape.
Wherever possible, States will be afforded maximum flexibility to design
and implement integrated State, local, and Federal programming.
171
EXECUTIVE OFFICE OF THE PRESIDENT
PRESIDENT STATE UNITED
COUNCIL ON ENVIRONMENTAL QUALITY
WASHINGTON, D.C. 20503
For further info: 202-395-5750
PRESIDENTIAL MESSAGE OUTLINES ENVIRONMENTAL STRATEGY.
PRIORITIES FOR 1991-1992
WHITE HOUSE REPORT LOOKS
IN-DEPTH AT ENVIRONMENTAL ECONOMICS, TECHNOLOGY,
ENERGY, LAND MANAGEMENT, BIODIVERSITY, LEGAL ISSUES
On Thursday, April 18, President George Bush sent a message to
Congress on environmental quality, along with the twenty-first
annual report of the Council on Environmental Quality (CEQ). The
President's message stated, in part:
"
1990 was a landmark year in the nation's efforts
to enhance environmental quality
"Our work, however, is incomplete. Americans are
sobered by the scope of the stewardship challenge and
recognize that it requires ongoing vigilance and
action
Several forces work in our favor
=
our national environmental strategy must be
comprehensive, long-range, efficient, and adaptable to
changing information about risks and benefits."
Strategy: The package laid out the Bush Administration's
National Strategy for Environmental Quality. The strategy rests
on several principles already embodied in Administration
initiatives and recently-enacted laws. Those principles are:
Harnessing the Power of the Marketplace,
Stewardship of Natural Resources,
Creative Partnerships,
Cooperative International Solutions,
Preventing Pollution, and
Vigorous Law Enforcement.
Priorities: The President's message also identifies priority
initiatives for 1991-1992, including the following:
Amendments to the Clean Water Act and other
environmental laws, seeking opportunities to
incorporate innovative, market-oriented provisions.
Further progress, taking advantage of legislative and
executive branch opportunities, toward the President's
goal of "no-net-loss of wetlands."
172
-- 2 --
Enactment of legislation to create a U.S. Department of
the Environment without extraneous provisions that have
delayed Congressional action on the proposal.
Programs to revitalize ecosystems such as the Great
Lakes, the Chesapeake Bay, and the Florida Everglades.
Implementation of a balanced National Energy Strategy
to increase energy efficiency, increase use of
alternative fuels, and develop all U.S. energy
resources in an environmentally responsible fashion.
Negotiation of international accords with a goal of
completing them for the 1992 U.N. Conference on
Environment and Development:
--
A comprehensive framework convention on global
climate change. [The United States is committed
to the world's largest program of research and
development and a series of actions that will help
hold U.S. greenhouse gas emissions at or below the
1987 level through the year 2000.]
--
An international convention to monitor, protect
and enhance forests.
Further progress on integrated U.S. foreign economic
and environmental assistance, using mechanisms such as
the newly-established Global Environmental Facility,
the Enterprise for the Americas initiative, and the
East European Environmental Center.
Development of a partnership between business and
government to develop worldwide opportunities for U.S.
environmental technology exports.
Efforts by a blue-ribbon panel of environmental,
conservation, business, academic, and foundation
leaders--the President's Commission on Environmental
Quality--to promote voluntary, innovative private
sector initiatives.
A program of Presidential "challenge awards" for
achievement in conservation and environmental affairs.
173
-- 3 --
"Strategic" Issues: The 408-page CEQ report, Environmental
Quality, aims to inform and stimulate the national debate on
environmental issues. The annual document is used widely as a
reference by journalists, policymakers, foreign leaders,
businesses, nonprofit groups, and educators. Each year's report
contains information about trends in environmental quality, an
assessment of public and private programs, and recommendations
for future policies.
This year's report includes special reports on "strategic"
issues and ideas that range across many government agencies and
many sectors of society:
Where We Stand (Chapter 1) sets out a comprehensive six-
point national strategy for environmental quality in the
1990s, at home and abroad. It also recaps in almanac form
the environmental accomplishments and initiatives of the
federal government in the past two years.
Making the Environment Count (Chapter 2) studies the
intersection of economics and the environment, and considers
ways the environment can be accounted for in economic and
political decisionmaking: pollution prevention, marketable
pollution allowances, taxes, better accounting practices,
natural resource auction reforms, and greater technical
assistance, education, research and development.
Technology for Pollution Prevention (Chapter 3) explores the
technical and managerial aspects of a promising trend in
environmental policy--pollution prevention. The chapter
suggests that significant progress is possible -- especially
in the energy and chemical sectors -- using existing
technology and a systematic management approach.
Linking Ecosystems and Biodiversity (Chapter 4) lays out the
facts about declining U.S. biodiversity, and proposes
national goals and policy tools for its conservation:
regional ecosystem management, a national biological
inventory, a national network of bioreserves, and attention
to the global context (the U.S. is engaged in negotiations
to develop an international accord on biodiversity).
The National Environmental Policy Act (Chapter 5) outlines
how the NEPA process can integrate efficiently the
requirements of environmental and other laws. This chapter
also presents abstracts on selected NEPA court cases in
1990, along with the latest data on NEPA trends.
174
4
Environmental Data and Trends (Part II) presents 141 tables
and figures with text that describes the state of the
environment in the following categories: population, the
economy, energy, air, water, land, agriculture, forestry,
protected lands, cultural and living resources, wastes, and
environmental hazards.
Accomplishments: The CEQ report also includes an alphabetized
almanac of federal environmental accomplishments in 1989-1990,
many of which flowed from Administration initiatives. Major
accomplishments and initiatives included the following:
The Clean Air Act Amendments of 1990;
A global agreement to phase out production and use of ozone-
layer-depleting substances;
The Oil Pollution Act of 1990;
The most environmentally-progressive Farm Bill in history,
which authorized stronger wetlands protections and the
President's tree planting initiative;
A moratorium of up to ten years on oil and natural gas
leasing in large offshore areas pending further
environmental and resource analysis;
Sharply increased budgets for many programs including
national parks, wildlife refuges, recreation areas,
wetlands, environmental law enforcement, and global climate
research;
Enhanced protection for marine mammals, the African
elephant, and other endangered species; and
International initiatives including aid to establish the
East European Environmental Center, debt-for nature swaps
under the Enterprise for the Americas initiative, creation
of the Global Environmental Facility to assist developing
nations, and efforts toward concluding international accords
on global climate change, forests, and biodiversity by the
summer of 1992.
*
*
*
*
FURTHER INQUIRIES ABOUT THE PRESIDENT" S MESSAGE AND/OR
THE CEQ ANNUAL REPORT MAY BE MADE BY CALLING 202-395-5750.
175
TO THE CONGRESS OF THE UNITED STATES:
of all the great social and technological changes of the
20th century, none may be more crucial to our well-being and
that of future generations than the change that has occurred in
the way we view our environment. Ours was the first generation
to see the many colors of Earth from the vastness of space, and
to recognize that our decisions will determine whether the next
generation lives in a polluted world of lowered expectations or
in a world that sustains humanity and a wondrous diversity of
life.
Given these high stakes, I am pleased to report that
1990 was a landmark year in the Nation's efforts to enhance
environmental quality.
O
We enacted the Clean Air Act Amendments of 1990, providing
the United States with the world's most advanced,
comprehensive, and market-oriented laws to address air
pollution, including acid precipitation, urban air quality,
toxic air pollutants, and global ozone layer depletion.
We adopted an international agreement and enacted laws to
phase out chlorofluorocarbons (CFCs) and other substances
that deplete the Earth's ozone layer, which protects us
from the harmful effects of solar radiation.
We enacted the oil Pollution Act of 1990 and adopted a
major international agreement to strengthen laws related
to oil pollution prevention, liability, and response.
We enacted the most environmentally progressive farm bill
ever. It will help farmers protect water quality and
wildlife habitat and it launches a part of our America the
Beautiful initiative to begin a long-term national tree
planting and improvement campaign aimed at both rural and
urban areas.
In partnership with the Nation's Governors, we developed
ambitious national educational goals, while the Congress
and the executive branch strengthened environmental
176
education programs. These actions are an essential part
of our efforts to revitalize American education and to
improve the environment.
We made other commitments to environmental stewardship,
including the expansion of national parks, wildlife
refuges, marine sanctuaries, and recreation areas;
accelerated cleanup of Federal facilities; enhanced
protection of marine mammals, the African elephant, the
Florida panther, and other threatened species; and the
suspension for up to 10 years of oil and gas leasing in
many areas off our coastlines pending further environmental
and resource analysis.
The complete record is told in this report. I am proud that our
Administration played a catalytic and constructive role in
securing these achievements. Progress has come from working
cooperatively with the Congress, State and local governments,
environmental and conservation groups, corporations, educators,
and scores of individuals, as well as other nations and
international institutions.
Our achievements in 1990 add to a growing national record
of environmental action that has improved the quality of
American life. Compared to the conditions facing Americans
earlier in my lifetime, our skies are clearer, our lakes and
streams are cleaner, and our major technologies are less
wasteful.
Our work, however, is incomplete. Americans are sobered by
the scope of the stewardship challenge and recognize that it
requires ongoing vigilance and action. We know, for example,
that increased trade and economic development is needed to
reduce poverty and improve the quality of life for all of the
world's people. However, if we fail to make wise economic and
environmental choices, those needed increases in economic
activity are likely to result in new burdens on the Earth's
ability to sustain life. Our challenge is both to provide
greater opportunities for an expanding population and to protect
the environment upon which we depend.
177
Several forces work in our favor. Our economy is
fundamentally sound, which allows us to make environmental
investments and serve as a model for others. Our technology is
first-rate, as is our research establishment. Our citizens are
eager to make a personal contribution.
In the days ahead, therefore, we must summon the full
measure of our powers to achieve environmental results. In that
effort we should be guided by what science tells us about the
most serious threats to our health and environment, and also by
our knowledge of what works and what does not.
In particular, we must learn to harness wherever possible
the power of the marketplace in service to the environment. The
goal of a healthy environment may not be provided by markets
acting alone. However, government regulations are blunt tools
that impose unforeseen human costs. Therefore, we need to
consider all costs and benefits of government programs as they
are developed and expand the use of market incentives that
deliver results at the lowest possible cost to society. As a
corollary, we need to strengthen the base of scientific and
economic understanding that supports such decisions.
Our environmental efforts should also be guided by a
holistic view. The environment is composed of a seamless web of
relationships between living organisms and the air, water, and
land that surround them. Accordingly, rather than continue to
address environmental issues in isolation from each other or
from other social goals, we must expand our efforts to
understand and protect the functional integrity of the
environment -- and our place in it.
We can also apply American ingenuity to the challenge of
preventing pollution. There is no reason to think of pollution
as an inevitable problem that occurs at the end of a pipe.
Quite the contrary: as pollution becomes more costly, and
178
because we recognize the environment is an enclosed sphere, we
are finding that pollution prevention can be less costly and
better for the environment.
Our efforts to enhance the quality of the domestic
environment must be accompanied by comparable efforts toward
global environmental quality. In these times, Americans are
aware that our political and economic security is affected by
actions occurring abroad. Likewise, we know that environmental
threats do not stop at a line on a map. In the months and years
ahead, we need to broaden our dialogue with other nations and
international institutions and together address environmental
issues that know no boundaries.
At home, two further principles will guide our
environmental policies. First, we will continue to harness
the enthusiasm and expertise of citizen volunteers. Partner-
ships between the public and private sectors have always been a
key to our success, and their value in environmental affairs is
growing. Second, we will continue to enforce environmental laws
firmly and fairly. Our record and our message in this regard
are absolutely clear: polluters must pay.
Taken together, these principles -- and the new programs
and initiatives that are putting them into action -- represent a
turning point in American environmental affairs. No longer
should we as a nation focus on isolated fragments of what is in
fact a complex, interconnected set of problems. Nor should we
accept rigid, shortsighted measures that stymie innovation,
shift pollution from one location to another, or impose
unnecessary costs. In the future, our national environmental
strategy must be comprehensive, long-range, efficient, and
adaptable to changing information about risks and benefits.
In the coming months, our Administration will pursue a
number of new initiatives to advance these principles. For
example, in December 1990 I established by Executive order the
179
President's Commission on Environmental Quality. This
Commission will soon be at work building public-private
partnerships to help achieve concrete results in the areas of
pollution prevention, conservation, education, and international
cooperation. A program of Presidential awards for achievement
in conservation and environmental affairs will stimulate
voluntary activity and recognize the outstanding efforts of
individuals and organizations. Each of these projects is
intended to underscore my belief that environmental stewardship
must flow from action by all Americans, not just from government
action.
In the legislative arena, our Administration will work
with the 102nd Congress toward enactment of amendments to the
Clean Water Act and other laws, seeking opportunities to
incorporate innovative, market-oriented provisions. We will
also seek to make progress toward the goal of no-net-loss
of wetlands and to strengthen programs to revitalize the
Great Lakes, the Chesapeake Bay, and other productive
ecosystems. And we will work for a National Energy Strategy
that provides a balance among the goals of increased energy
efficiency, increased use of alternative fuels, and
environmentally responsible development of all U.S. energy
resources.
I have proposed that the Congress give the environment a
permanent place at the Cabinet table by creating a Department of
the Environment. Given the importance of environmental matters,
both domestically and internationally, the Environmental
Protection Agency is already accorded equal status with other
major Federal departments in my Administration. However, I feel
this policy should be established in law for the future. The
Congress should reject extraneous provisions that would delay
consideration of this proposal.
180
Looking abroad, the United States will continue to seek to
conclude an international convention on global climate change in
time for its signing at the 1992 United Nations Conference on
Environment and Development in Brazil. In our view, such a
convention must be comprehensive in scope, addressing all
sources and sinks of greenhouse gases, adaptation as well as
mitigation measures, and continued scientific and economic
research and policy responses. The United States is committed
to a series of domestic actions that have many benefits such as
curbing air pollution, conserving energy, and restoring forest
lands and that also help to curb greenhouse gas levels. These
actions -- recently established in law or proposed by my
Administration -- will hold U.S. net emissions of greenhouse
gases at or below the 1987 level through the foreseeable future.
An effective response to potential climate change also requires
that all nations participate and meet obligations that are
appropriate to their circumstances.
I have also proposed that a worldwide convention on forests
be developed and ready for signing by world leaders at the U.N.
conference in 1992. Forests provide diverse benefits, helping
to clean our air and water, foster biological diversity, and
sequester greenhouse gases. We should take steps now to protect
and enhance them. In the coming year, I also hope we can
move forward on U.S. proposals for integrated economic and
environmental assistance in such regions as Latin America and
the Caribbean, Eastern and Central Europe, and the Middle East.
The worldwide market potentially available for U.S.
exports of environmental goods and services approaches
$60 billion annually, and it is growing. I have directed the
Department of Commerce to assess that market, and I look forward
to the creation of a partnership between business and government
to develop the opportunities for environmental technology
exports. This effort will help to create new jobs while
enhancing the quality of life here at home and around the globe.
181
The causes and effects of environmental problems are
diverse and complex. We should be humbled by the fact that
the more we learn, the more questions arise. But unlike the
situation a generation ago, we know today that ecological
degradation can be halted and, indeed, reversed through rigorous
analysis, constructive dialogue, and hard work. Let us work
together in this generation to achieve a more productive harmony
between humanity and the environment.
Cy Tzl
THE WHITE HOUSE,
Apr_1 1991.
182
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release
May 3, 1991
FACT SHEET
PROMOTING JOBS, HOMEOWNERSHIP, AND OPPORTUNITY
In his State of the Union Address, the President said: "The
strength of democracy is not in bureaucracy. It is in the people
and their communities
We must return to families, communities,
counties, cities, states and institutions of every kind the power
to chart their own destiny, and the freedom and opportunity
provided by strong economic growth."
On February 27, 1991, the President announced a series of
initiatives to expand choice and opportunity for individuals,
families, and communities. Today, the President called for
policies to promote jobs and homeownership for low-income people,
and to return flexibility to local organizations to maximize
opportunity for low-income people.
In St. Louis today, the President announced that his
Enterprise Zone and Jobs-Creation Act of 1991 will be introduced
in Congress next week by a bipartisan coalition and called on
Congress to enact this important legislation swiftly. He also
called upon Congress to appropriate $855 million for the HOPE
(Homeownership and Opportunity for People Everywhere) initiative
in Fiscal Year 1992. The President announced that the Community
Opportunity Act of 1991 would be transmitted to the Congress
today. These three initiatives are vital components in the
effort to revitalize America's communities and to increase jobs
and homeownership for low-income people.
CREATING JOBS IN ENTERPRISE ZONES:
Enterprise zones will attack poverty by promoting investment
in economically distressed neighborhoods. Enterprise zones will
attract new seed capital for small business start-ups, create new
incentives for entrepreneurial risk-taking, and reduce high
effective tax rates on those moving from welfare to work.
184
The Enterprise Zone and Jobs-Creation Act of 1991 will
target tax incentives and regulatory relief to some of our
nation's most economically depressed areas.
The Secretary of Housing and Urban Development will
designate up to 50 (urban, rural, and Indian) enterprise
zones over a four year period. Competitive designation will
be based on the level of distress, as well as on the nature
and extent of State and local efforts to improve living
conditions and to eliminate government burdens to economic
activity. Designation will be for a maximum of 24 years.
This legislation will provide tax incentives to attract seed
capital, stimulate employment, and increase the economic
return from work for the working poor:
--
Workers will be eligible for a 5 percent refundable tax
credit for the first $10,500 of wages earned in an
enterprise zone business. This will put up to $525
more income in the pockets of low-income workers. The
credit phases out between $20,000 and $25,000 of total
annual wages.
To spur investment, capital gains taxes will be
eliminated for gains on investment in tangible property
(e.g., buildings and equipment) used in a business
located in an enterprise zone for at least two years.
--
To encourage entrepreneurial risk-taking, individuals
will be permitted to expense investments in the capital
of corporations engaged in enterprise zone businesses.
This essentially provides an immediate write-off for,
investments in enterprise zone businesses.
Corporations must have $5 million or less of total
assets. Expensing will be permitted up to $50,000
annually per investor, with a $250,000 lifetime limit.
This legislation will also give enterprise zone communities
priority for free trade area status. Such status would, for
example, allow a business in an enterprise zone to import
materials duty-free if the materials are used to manufacture
products for export to other countries.
Enterprise zones will reduce Federal tax revenues by $1.8
billion over five years.
185
REDUCING FEDERAL BUREAUCRACY AND ESTABLISHING OPPORTUNITY AREAS:
Programs providing social, child welfare, health and
nutrition, education, and job training services are often
delivered in fragmented ways. Allowing services to be integrated
effectively will better serve the recipients of these programs,
expand social and economic opportunities, and promote greater
personal responsibility and individual and family self-
sufficiency.
The Community Opportunity Act of 1991 will enable local
communities to develop "community opportunity systems" and
allow them to restructure Federal programs to provide
services and benefits in the way the community deems best to
meet the needs of the individuals and families served.
The legislation creates the framework for experimentation
and innovation across a broad band of domestic social
programs not allowed under current law. It moves Federal
programs from being an impediment to being a catalyst in the
work of States and localities as laboratories of change.
The legislation will allow a Federal administrator
designated by the President to recommend to the appropriate
Federal agency heads a waiver of most Federal statutory and
regulatory requirements applicable to each of the Federally
funded programs included in the community's opportunity
delivery system. Activities carried out under the waiver
must be budget-neutral overall but can target available
funds to areas of innovation.
Communities will be able to develop community opportunity
systems in which:
services and benefits can be integrated, combined, and
collocated at the community level;
--
the system is neighborhood- or community-based, with a
specified target group of individuals and families and
could adopt a consolidated and streamlined eligibility
process;
the individuals and families served can participate in
the design of the system;
the labeling and stigma associated with participation
in many categorical programs can be eliminated; and
186
--
the delivery system offers individuals and families in
the target group of beneficiaries the maximum choice
and control over the types of the services and benefits
to be provided, the providers of services, and the
service environment.
O
Each community opportunity system will have clear and
measurable goals and will be evaluated with regard to both
the short- and long-term impact on individuals and families.
# # #
187
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release
May 13, 1991
FACT SHEET
IMPROVING HEALTH FOR INFANTS AND CHILDREN
Improving the health of infants and children is an important
objective of the Bush Administration. The prevention,
immunization and Healthy Start initiatives are a vital part of
the Administration's policy of investing in the future of our
nation's children.
I.
FOCUSING ON PREVENTION
Prevention offers the greatest opportunities for realizing a
healthier America. The Bush Administration is vigorously
pursuing a prevention strategy to realize that goal.
The Administration's approach to improving infant and child
health is part of this effort. Ten thousand of the nearly 40,000
infant deaths in America each year are preventable. Our
generation has a responsibility to ensure that young people get
as good a start in life as society can offer.
The Administration's Fiscal Year 1992 Budget recognizes the
value of investment in prevention and in children. The Budget
includes increased funding for:
increase
the supplemental nutrition program for
9.52%
Women, Infants, and Children (WIC);
breast and cervical cancer prevention;
52.4%
smoking cessation;
7.8%
physical fitness and nutrition programs;
13.9%
injury prevention;
13.3%
access to health care;
11.4%
188
o
lead poisoning prevention;
412.5%
substance abuse prevention;
5.1%
0
The Administration is also increasing evaluations of
prevention and children's programs to ensure that Federal
investments get the highest possible payoff.
Childhood Immunisations
Childhood immunizations are a vital prevention measure.
Every year since the 1981-1982 school year, 95 percent or more of
elementary students entering school are immunized against each of
the vaccine-preventable diseases. However, much more needs to be
done to protect pre-school children from vaccine preventable
diseases; low immunization levels among pre-school children have
led to measles outbreaks. In this regard:
o
For Fiscal Year 1992, the President has requested an
additional $40 million for the Centers for Disease Control's
immunization program for a total of $258 million -- an
increase of 19 percent over 1991. Federal funding for
immunizations has more than doubled since 1988.
Of this increase, $35 million will be targeted to increasing
immunizations of preschool children in low-income minority
populations.
o
Three pilot demonstration projects -- in Chicago, Jersey
City, and New York City -- are presently being funded to
test "one stop shopping" for the children of low-income
families needing immunizations.
II. IMPROVING INFANT HEALTH
The Administration's three-part strategy to improve infant
health and to attack the persistent tragedy of infant mortality
in the United States includes:
1.
Increasing prenatal care and nutrition services for low-
income pregnant women, focusing on treatment for damaging
behavior such as smoking, alcohol and drug abuse.
2.
Targeting services and programs to at least 10 communities
with exceptionally high infant mortality rates.
3.
Making the public, and especially would-be parents, aware of
the sad fact that the behavior of parents often contributes
to poor infant health.
189
Background
The U.S. has significantly reduced the infant mortality rate
-- cutting the rate in half since 1970 to an estimate of 9.1
deaths per 1,000 live births in 1990. But the percent of low
birthweight babies (babies who are more likely to die or face a
lifetime of serious health problems) has remained essentially
constant. Tragically, black infants are more than twice as
likely to die as white infants. American Indian infants are 60
percent and Puerto Rican infants are 40 percent more likely to
die than white infants.
One of the largest causes of infant health problems is
individual behavior. For example, smoking during pregnancy leads
to 10 percent of infant deaths and 25 percent of low birthweight
babies; yet, over 20 percent of women continue to smoke during
pregnancy. Infant health problems are particularly acute in
communities overwhelmed by the near collapse of two-parent
families, by shortages of available services, and by the use of
crack cocaine and other illegal drugs in epidemic proportions.
The Administration's Initiative to Reduce Infant Mortality
1.
A broad-based effort to expand service use.
Early access to prenatal care is critical to improving
infant health, yet nearly 25 percent of mothers receive no
prenatal care during the first trimester of pregnancy. Over 6
percent of women receive no care at all or wait until the third
trimester to receive care.
As recently as 1988, some States set eligibility levels for
pregnant women as low as 15 percent of poverty. The President
proposed increasing that level, and signed legislation that would
make all pregnant women and infents in families with incomes
below 133 percent of the poverty standard eligible for Medicaid,
an expansion that makes Medicaid available to more than two
million women when they become pregnant. The initiative seeks to
realize the potential for early prenatal care and also put in
place targeted treatment programs.
The health initiative seeks to increase the frequency with
which high-risk women seek prenatal care and develop new targeted
treatment programs through the following measures:
improving participation in Medicaid among eligible pregnant
women by 5 percent per year (60,000 women/infant pairs);
increasing the number of high-risk women who receive prompt,
adequate prenatal care in community and migrant health
centers;
190
increasing the number of pregnant women and infants who
obtain adequate nutrition and healthcare referrals through
the Women, Infants, and Children (WIC) supplemental
nutrition program; and
o
integrating smoking and drug abuse cessation programs into
public prenatal care and nutrition programs.
2.
Target areas worst-hit by high infant mortality rates.
While the infant mortality rate in the United States has
dropped in recent years, disparities between geographic regions
of the country remain great -- ranging from a rate of 6.9 deaths
of children less than one year old per 1,000 live births in
Anaheim-Santa Ana, California to 23.2 such deaths in Washington,
D.C. As part of the effort to reduce overall infant mortality,
significant effort and resources must be committed to those areas
where infant mortality rates are highest.
The Administration's Healthy Start initiative will target at
least 10 communities with exceptionally high infant
mortality rates. As announced in the April 17 Federal
Register, the Federal government will fund programs that
encourage high-risk women to seek more frequent prenatal
care, establish new targeted treatment programs, and develop
special initiatives that address non-financial barriers to
prenatal care. The Administration has requested $171
million in Fiscal Year 1992 to fund this program.
Programs in the targeted areas will be a testing-ground for
new strategies that will serve as models for other
communities throughout the country.
3.
A national public education campaign.
In 1985, only 54 percent of women aged 18-44 knew that heavy
drinking during pregnancy increases the chance of birth defects;
only 52 percent were aware that smoking during pregnancy
increases the chance of low birth weights. The health initiative
will try to get the message out by:
cooperating with the National Advertising Council, employers
and private insurers to stimulate free air-time for public
service announcements;
targeting educational messages to schools, hospitals,
community centers, business groups, and Healthy Mother-
Healthy Baby networks in each state;
191
distributing maternal and child health handbooks to all
pregnant women in publicly-funded programs;
providing information for expectant parents through a
national toll-free hotline that is linked to local health
care systems; and
developing a model program that encourages community
awareness and involvement.
# # #
I
192
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release
May 15, 1991
HEALTH CARE LIABILITY REFORM
FACT SHEET
As part of the Administration's continuing efforts to
improve the delivery of health care services throughout our
nation, the President today transmitted to Congress the Health
Care Liability Reform and Quality of Care Improvement Act of
1991. This new initiative will reduce the costs and increase the
availability of quality health care by addressing the problems of
medical malpractice. In part because of liability risks, too few
physicians -- especially obstetricians and gynecologists -- are
available to serve rural and low-income communities. The
Administration's medical professional liability reforms will
enable more physicians to serve these communities.
The Administration's proposal is built on three principles:
1.
Medical malpractice reform should seek both improved quality
and lower legal costs.
2.
Legal reforms should reduce the incentives for physicians to
practice unnecessary defensive medicine or to abandon
practice in certain inner city and rural areas.
3.
Incentives for states to act are preferable to Federal
preemption of state law.
Background
Malpractice costs -- the direct costs of insurance,
litigation, and settlements, and the indirect costs of defensive
medicine -- play a significant role in the rapid growth of health
care spending. The costs associated with medical liability have
increased more rapidly than any other component of physician
practice costs. During the mid-1980's, medical liability
insurance was the fastest growing component of a physician's
practice expense, rising at an average annual rate of 21.9
percent.
Nationally, between 70 and 80 percent of obstetricians have
been sued, and other medical specialties have also been
194
significantly affected. In Miami, Florida, for example, it was
recently reported that neurosurgeons with good records paid
$220,000 per year for liability insurance.
The rise in insurance premiums has forced many physicians to
close certain practices, leaving some areas of the country
without adequate medical services. The American Academy of
Family Physicians reported that, at the end of 1985, 23.3 percent
of its members had stopped practicing obstetrics because of
professional liability concerns.
The fear of lawsuits has also imposed enormous costs on
patients. Some doctors have begun practicing defensive medicine,
in which they order vast batteries of costly, and often
unnecessary, tests in order to protect themselves from the
possibility of lawsuits. Researchers shy away from potentially
promising products and techniques for fear of lawsuits.
Moreover, the specter of litigation weakens the doctor-patient
relationship, one that should be built on trust.
Legislative Proposal
The Health Care Liability Reform and Quality of Care
Improvement Act of 1991 is designed to create incentives for
states to implement tort and quality reforms and also address
claims arising under the Federal Tort Claims Act.
To encourage states to implement tort law and quality of
care reforms, a bonus pool of funds will be distributed to states
that have implemented these reforms. The incentive mechanism
would take effect in three years to give states time to respond.
Many states have already enacted tort reforms and are well on the
way to being able to comply with these reforms The
tort reforms
a state would be required to have in place to be eligible for the
incentive funds are:
A $250,000 cap on non-economic damages -- those damages
beyond economic expenses (e.g., for pain and suffering);
a waiver may be granted for good cause, for example, to a
state whose constitution does not permit a cap;
The elimination of joint and several liability for non-
economic damages (joint and several liability makes all
parties responsible for the entire amount owed to the
plaintiff);
The elimination of the collateral source rule to prohibit
double recovery by the plaintiff when compensation has been
received from other sources such as health insurance;
195
Allowing judgments for future costs, such as future medical
bills, to be paid in periodic payments rather than as a lump
sum; and
An alternative dispute resolution mechanism such as
mediation or pretrial screening panels.
In order to receive incentive payments, states would also be
required to institute reforms to improve the quality of health
care. These steps include:
Cooperation with federal efforts to learn the comparative
effectiveness of different medical treatments;
Improved performance in the oversight of physicians through
state medical boards; and
A requirement that physicians sanctioned by the medical
boards participate in continuing medical education in areas
where the board has found deficiencies.
States could pursue alternatives to those activities involving
medical boards if the alternatives were equally effective.
The incentive to implement tort law and quality of care
reforms would be increased payments to states and hospitals in
the qualifying states on a proportional basis. The incentive
pools would be created by withholding two percent from the amount
payable to states for Medicaid administrative costs and one
percent from the annual increase payable to hospitals for
operating costs through Medicare's prospective payment system.
In Medicaid, the pool would be divided among states that have
implemented the necessary tort reforms and quality assurance
mechanisms. In Medicare, the pool would be directed to increased
payments to hospitals in complying states.
Administrative Actions
The Administration will also take several administrative
actions to reduce medical malpractice problems. These include:
Gathering and disseminating scientific findings about the
effectiveness of varying types of treatment, including
clinical practice guidelines;
Shifting the approach of Medicare's Peer Review
Organizations (PROs) from after-the-fact review of hospital
records toward providing statistical data which will enable
hospitals to compare their performance;
196 -
Providing the public with comparisons of the operation of
state boards that license health care providers, along with
technical assistance for improvement;
Evaluating current risk management practices in health care
settings and establishing an interagency study group to
review malpractice cases against the federal government for
lessons applicable across the health care system; and
Expanding within the Federal Employees Health Benefits
Program the number of plans that offer an alternative
dispute resolution process instead of litigation.
# # #
197