Office of Management and Budget
October 16, 2001; 7:00 p.m. EDT
In Conference Board Address OMB Director Daniels Says
Emergency Needs Must Supercede Lower Priority Spending
Springtime for-Spenders Threatens Long-Term Surpluses
New York, NY -- In an address before the Conference Boards annual
dinner, Office of Management and Budget Director Mitchell E. Daniels, Jr.
today said that while the Bush Administration will ensure that needs related
to the attack on America are properly funded, now more than ever discipline
must govern the expenditure of taxpayer dollars.
Highlights of Director Danielss Speech
Funding Emergency Needs
"I have just returned from the site of the former World Trade Center,
where a visitors heart is torn yet again by the loss New Yorkers have
suffered. It has been clear from the first day that the compassion of
Americans would be manifested in a totally unprecedented response."
"Regrettably, the funds the nation wants to devote to assisting victims,
protecting our people, and conquering terror are now the target of
opportunistic spending sorties masquerading as "emergency" needs. Tree
trimming does not qualify as disaster relief, or permanent expansions of
government as emergency response."
Springtime for Spenders
"It might be autumn everywhere else, but in Washington its springtime
for spenders. Overnight, a climate of fiscal restraint has been dispelled. We
now face a great risk of runaway spending, the erosion of the long-term
surpluses we have been anticipating, and the erection of a much larger
permanent federal government."
"This sudden springtime has inspired a flowering of creativity across the
federal government, Congress, and the special interest community. The
availability of $40 billion in emergency appropriations triggered more
than $120 billion in helpful suggestions from Cabinet departments. Many of
these blossomed from bulbs dormant for years in the bottom drawer of some
bureaucracy. Others are hardy perennials that have been offered up time and
again by special interest groups. With a little imagination, any straight-faced
advocate can recast his pet program somewhere under the inviting headings of
war, recession, or disaster recovery."
Economic Stimulus Plan
"The government has acted swiftly to address the twin crises of
terrorism and economic downturn. Both are expensive problems, particularly
when addressed under pressure and with the need to preserve bipartisan harmony. The President has always listed war and recession as acceptable reasons for deficit spending and we may well see a deficit in FY 2003. But recklessness now could dig a deficit hole from which we would not emerge even after recovery comes."
"While additional stimulus is warranted, it should be limited to between
$60 billion and $75 billion; made up mainly of tax relief to balance the
billions in spending already enacted; neutral across industries, not sector-specific;
and of limited duration. We need to return to surplus as soon as possible and
preserve long-term surpluses for debt reduction, Social Security reform, and
other major objectives."
Airline Industry Support
"The government has ensured that the airline industry not collapse
under the weight of business losses and uninsurability. Although the airline
industrys initial request was cut by 60%, enough cash was provided and
liability limited to keep the carriers flying. A window has also been opened
for federal loan guarantees to carriers that can demonstrate a strong
prospect of success in the changed, probably downsized air transport market
Treating Causes, Not Symptoms
"Other sector-specific bailouts should be avoided. Industries heavily
dependent on air travel will benefit from the recovery of the airlines, and
from macroeconomic measures that spur overall growth. Our ministrations must
stop at causes, not symptoms. Attempting to rush from sector to sector
applying first aid would be an economically futile and fiscally ruinous
Summary -- Clarity of Mission
"The nation now has two overriding public goals: defeat terrorism and
defend the homeland. It also must meet its obligation to repair the damage
evil has done. Beyond these imperatives, everything is secondary. Many lesser
priorities will have to yield while we ensure that the essential functions of
government are provided for. The alternative is to discard discipline totally
and imperil our long-term economic health."
here for the entire transcript