Orrin Hatch: “Mr. President I would like to respond to some of the remarks made earlier by our distinguished ranking member on the…”

“Mr. President I would like to respond to some of the remarks made earlier by our distinguished ranking member on the Judiciary Committee about capital budgets. The proposed exemption for so-called capital investments could help evade the purpose of the balanced budget amendment or make it substantially more difficult for future Congresses to make capital investments. I have to confess that I am not certain of the purpose of the amendment as it is drafted, or at least as I anticipate it to be drafted. It appears to be a provision at war with itself. The first sentence seems to encourage capital investments by taking them out of the balanced budget rule. But the last two sentences seem to be designed to discourage capital investments. Now, this provision opens up a loophole in the balanced budget rule and unduly limits Congress' ability to make capital investments. There would be a powerful incentive for Congress and the President to help balance the budget by redefining more programs as capital investments. A gimmick capital budget exemption could actually endanger capital investments as fake investments crowd out real capital investment. Furthermore, the 10-percent limit ties the hands of future Congresses that may choose among the competing programs to fund more capital investments than this limits allows. With the talk of a need for infrastructure investment by my friends on our side, I am sure they would want to tie Congress' hands this way.”