March 13, 2002
The Honorable Jim Nussle
Chairman
Committee on the Budget
309 Cannon House Office Building
Washington, DC 20515
Dear Mr. Chairman:
As required by Section 301(d) of the Congressional Budget Act of 1974, and in response to your letter dated January 17, 2002, this letter transmits the views and estimates of the Committee on Ways and Means on those aspects of the Federal budget for the fiscal year 2003 which fall within the Committee’s jurisdiction.
The U.S. economy is experiencing a recession that started in approximately March of 2001 (growth in 2001 was 1.1 percent). For fiscal year 2002, the Congressional Budget Office (CBO) estimates a unified budget deficit of $21 billion, 0.2 percent of GDP. For fiscal year 2003, the CBO estimates a unified budget deficit of $14 billion, 0.1 percent of GDP.
The Committee will address the recent slowing of the U.S. economy by considering legislation that increases the incentives to work and save by reducing the tax burden on American workers and business. Further, the Committee will continue to work to provide necessary support and benefits to workers displaced by reduced economic growth.
In addition, the Committee’s priorities are expected to include preserving and reforming Medicare and Social Security, expanding trade, and continuing to reform welfare and insurance programs.
I. Legislative Issues with Budgetary Impact
A. Social Security – The Committee will continue its work on the long term solvency issues surrounding the program, including examining proposals to strengthen Social Security and conducting subcommittee field hearings to hear Americans’ views on how to secure Social Security’s future. Emerging service delivery challenges will continue to be a part of this year’s agenda, as will addressing program integrity issues, including the misuse of Social Security numbers. Continuing concerns regarding the Disability Insurance program also will be examined.
B. Tax– Reinvigorating the economy through appropriate tax reductions continues to be a priority for the Committee including the extension of expiring tax provisions. The Committee also expects to review legislative responses to the recent appellate decision of the World Trade Organization (“WTO”) in United States - Tax Treatment for “Foreign Sales Corporations.” The Committee also expects to examine tax simplification and reform with the goal of promoting higher sustainable long-term growth.
C. Medicare and Health Reform – The Committee will continue its efforts to strengthen and improve the Medicare program in a way that ensures the long-term financial viability of the program. Among the reform areas to be addressed are expanding seniors’ access to affordable prescription drug coverage, modernizing program administration, and giving seniors greater choices in how they receive benefits. In addition, the Committee plans to examine strategies to reduce the number of Americans without health insurance, expand the availability of long-term care insurance and enact a patients’ bill of rights.
D. Human Resources– The Committee will work to reauthorize the Temporary Assistance for Needy Families (TANF) program. Provisions of the TANF program expiring at the end of fiscal year 2002 include TANF Family Assistance Grants, child care block grant funds, bonus grants to states to reduce out-of-wedlock birth rates, a loan fund, abstinence education, and transitional federal matching funds for increased Medicaid administrative costs. In addition, provisions that expired at the end of fiscal year 2001 to provide supplemental grants to certain states and to maintain a matching grant contingency fund will be considered. The Committee expects to reauthorize the child welfare waiver authority under Title XI of the Social Security Act that expires at the end of fiscal year 2002. The Committee will continue its oversight of the nation’s child welfare, child support, adoption and foster care, Supplemental Security Income, and unemployment programs. Legislative proposals from Congress and the President that may require Committee action include improving the child support program, the unemployment system, and the Supplemental Security Income program.
E. Trade – The Committee supports the expansion of trade opportunities, adherence to trade agreements and rules by our trading partners, and the elimination of foreign trade barriers to our goods and services. The Committee expects to complete consideration of Trade Promotion Authority, the Andean Trade Preferences Act, and the Trade Adjustment Assistance program, which have passed the House of Representatives and are pending in the Senate. The Committee has passed an extension of the Generalized System of Preferences and is committed to renewing this program. In 2003, the Committee will also consider implementation of any trade agreements, which are now being negotiated by the Administration, including agreements with Chile and Singapore, and any other legislation affecting our bilateral trade relationships, such as legislation to extend permanent normal trade relations to Russia and to other former Soviet republics. Finally, the Committee expects to consider a series of temporary duty suspensions to make U.S. companies more competitive.
II. The Fiscal Year 2003 Budget
The Committee is reviewing the President’s FY 2003 budget. The President’s proposed budget envisions moderate growth in federal spending while funding the President’s priorities and providing tax relief.
III. Public Debt Limit
The current statutory public debt limit is $5.95 trillion, a level that may be reached in early 2002. The Administration has requested that the Congress raise the statutory debt ceiling to $6.7 trillion.
The Committee on Ways and Means looks forward to working with the Committee on the Budget as we promote prosperity, opportunity, and security while maintaining fiscal prudence.
Best regards,
Bill Thomas
Chairman