HOUSE JOINT RESOLUTION NO. 29 Relating to the federal balanced budget amendment. Representative Parnell, the sponsor of HJR 29, spoke in its support. He observed that HJR 29 urges Congress to support and pass a resolution proposing a constitutional amendment requiring a federal balanced budget. He noted that absent policy changes, entitlement and interest spending will consume almost all federal revenues in the year 2010. In the year 2030, federal revenues will not even cover entitlement spending. He noted that the United States House of Representatives passed HJR 1, a balanced budget amendment. Representative Brown provided members with Amendment 1 (Attachment 1). Representative Brown MOVED to adopt Amendment 1. Amendment 1 would insert after "WHEREAS" on page 1, line 7, "the goal of." "Could be accomplished" would also be deleted on page 1, line 8 after "spending" and "may be advanced" would be inserted. Representative Parnell had no objections. There being NO OBJECTION, Amendment 1 was adopted. Representative Brown provided members with Amendment 2 (Attachment 2). Amendment 2 would insert after "budget" on page 1, line 12, "with provisions that will allow a response to national economic emergencies and long-term investments 2 in national infrastructure." Representative Brown MOVED to adopt Amendment 2. She explained that Amendment 2 would allow capital improvement expenditures to be accounted for separately. Representative Mulder OBJECTED. He stated that the amendment would "open the door a crack". Representative Parnell objected to the amendment on the basis that the amendment would make HJR 29 too specific. He emphasized that HJR 1, introduced in the United States Congress, provides that total outlays for any fiscal year shall not exceed total receipts for the fiscal year unless three-fifths of the whole number of each House in Congress shall provide by law for a specific excess. He asserted that the breadth of the HJR 1 already allows response to national economic emergencies and long-term investments in national infrastructure upon a three-fifths vote of Congress. Representative Grussendorf spoke in support of Amendment 2. Representative Brown accentuated that the amendment would be compatible with HJR 1. She stressed that the amendment would send the message that the State of Alaska wants a solution that will respond to the needs of our state. A roll call vote was taken on the MOTION to move Amendment 2. IN FAVOR: Brown, Grussendorf OPPOSED: Kelly, Kohring, Martin, Mulder, Parnell, Foster, Hanley The MOTION FAILED (2-8). Representative Brown referred to remarks by Senator Ted Stevens made on the floor of the United States Senate on February 25, 1994 (Attachment 3). She noted that he stated that: "I think it will be a total, total disaster for a state such as mine to come under a balanced budget amendment. We will lose at least Fort Richardson and Eielson Air Force Base, and maybe one other. Alaska will lose 94,000 jobs; there will be 24 percent less personal income in Alaska; the rate of unemployment, which is already the Nation's highest, will increase by 6.4 percent." She observed that Senator Stevens, in his speech, detailed other effects the balanced budget amendment would have on Alaska. Senator Stevens concluded that "this is the wrong amendment at the wrong time to address the wrong problem." Representative Brown stressed that the effects of a balanced 3 budget amendment have not changed. Representative Brown acknowledged the philosophical correctness of helping Congress to restrain its spending. She questioned what will happen to Alaska if federal contraction occurs when state dollars available for expenditure are also being reduced. Representative Therriault stressed that Senator Stevens' change of heart in regards to the balanced budget amendment was based on the fact that the national situation is so severe that something absolutely has to be done. He highlighted that everybody feels there is a problem, but no one wants to give anything up or have the programs that they have come to rely on considered for reduction or elimination. He asserted that the State of Alaska cannot be separated from the Nation. Representative Grussendorf emphasized the importance of federal funding to the State of Alaska. He questioned members' priorities: "The economy of the State of Alaska" or "do we want to have a nation wide perspective." Co-Chair Hanley concluded that the Nation's credit card balance has reached its limit. He emphasized that tough decisions need to be made. He expounded that inaction could result in a worst scenario, in terms of the kinds of reductions that would have to be made in the future. He reiterated that the three-fifths vote allows flexibility. He asserted that a balanced budget amendment will focus public pressure. Representative Martin avouched that calamity will be the result of inaction. He stressed: "Either pay the bill or let your grandchildren pay it." He asserted that we have to "get control of this wild spending in Congress." Representative Mulder MOVED to report CSHJR 29 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CS HJR 19 (FIN) was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the Office of the Governor. HB 19 was reported out of Committee with a "do pass" recommendation and with two zero fiscal notes by the Department of Law, date 2/8/95 and the Department of Administration, dated 2/8/95.