HELLMAN:... sponsoring () legislation this year - why do you feel this is an important issue?

FRANK: Becasue I think we are are over spending internationally in areas where we don't have a major need and that comes at the expense of important needs at home. For example: we passed the law a few years ago providing some funds for local communities to hire police officers. Tens of thousands of police officers have been hired and I think that's been a contribution to one of the great successes we've had recently, which is a reduction in the crime rate. There can't be any higher priority for the government than to protect people.

Under our current budgetary plans, under the balanced budget agreement act enacted last year, we're going to stop funding those police officers in a year or two and the communities that hired them are then going to be faced with the financial need to raise local taxes.

Why? In part becasue we are defending western Europe against a non-exitent threat. We are spending - it's hard to get an exact figure - but clearly tens of billions of dollars a year on the military defense of western Europe. We began the military defense of western Europe, quite sensibly, fifty years ago when western Europe had been devastated by World War II, it was poor, it was defensless, and the Soviet threat was quite menacing.

A couple things have changed. 1) western Europe has now become strong and prosperous. Secondly, the Soviet threat has essentially collapsed as a threat to western Europe. The only thing that hasn't changed is that we're still spending an enormous amount of American tax dollars protecting western Europe, which could protect itself if it needed protection, which it doesn't need. So what we're talking about here is a zero-sum game under the balanced budget act that was adopted.

Every dollar we spend makes sure that Russia doesn't invade France, and that's why we got into NATO in the first place. It's a dollar not spent to keep a cop on the street in Fall River, New Bedford, or Detroit or Chicago. It's money not spent cleaning up a superfund site. It's money that we took away from the Medicare program. We have a terrible crisis right now in home care. If you are an elderly person who needs home care, you are introuble becasue the balanced budget act severely restricted home care funds.

We were spending a lot of money on the military and people have pointed out that we're now spending less. It's true we're spending less, but we have not reduced military spending nearly as much as the threat has been reduced. 15 years ago we were dealing with a Soviet Union and teh Warsaw Pact. If you go back to the '80s and if you talk to the Pentagon, as I did, they told you that we had to assume, prudently, that the Polish and East German and Tchek and Hungarian armies - and the Bulgarian, we needn't forget the powerful Bulgarians - that they were a threat to western Europe and we had to spend money on the assumption that those armies would come against us.

The nations of eastern Europe have now switched sides. Three of them are about to get into NATO. The Soviet Union has been dismantled. You still have Russia but you no longer have the Soviet Union - you have about half the size. The military threat that we were facing has not disappeared, there is still North Korea, there's still Iraq, there's still Libya. And we should still have a major military force. But I do believe that if you look at the dimunation of the threat that came with the defection of the Warsaw pact countries and the break up of the Soviet Union, the military threat has been diminshed by more than we have cut the defense budget.

And secondly the European allies have a capacity for self-defense that we have not paid attention to. And the greatest subsidy - the most unjustified subsidy anywhere in the world today - is the subsidy the American taxpayers are providing to the prosperous nations of the European Union.

HELLMAN: You mentioned the balanced budget act and the zero-sum game, how do possibly $50 Billion in projected surpluses change the dynamic?

FRANK: Well, they don't change it in one sense. The balanced budget act is a binding act as to how much we spend and additional revenues are irrelevant to that. Besides, there are other demands on some of those revenues. The President quite sensibly said "look, let's use this in part for social security." The social security system is one of the great successes in American history - it's been in existance for over 60 years. It's done an enormous amount, particularly once we began to index it for inflation.

That and Medicare together, we've transformed a situation where, if you were a working person, the expectation would be that when you retired fifty years ago, your quality of life would substantially deteriorate. We should be very proud as a society of having stopped that.

Now much of that surpus could go to shoring up the Medicare and social security systems and preventing the need for the deterioration of the quality of life of older people. And again, I have to stress, the balanced budget act hasn't been amended, and the Republican majority says they don't want to change it, they don't want to increase the total amount of government spending. Even the President said, that while he's for some initiatives that I strongly support, extending medical care for people 55-64, providing money for school construction, providing money for day care centers.

You know,we have a terrible social problem facing us. In part of my district, if you're eight years old, you almost certainly live in a house where there's a computer and someone to teach you how to use it. In other parts of my district, the likelihood that, if you're eight years old, there isn't any such computer in your house. There isn't someone to teach you. If we don't beef up the schools in the poorer parts of this country, the parts that have not benefited from the economic advances of globalization that have enriched some people but no others - in fact have impoverished others, atleast diminshed thier income - we're going to be perpetuating social inequality.

Physically improving the schools is a part, a necessary part, of extending this kind of computer literacy. We can't afford that in our current budget. Now even the President said we can only do this if we raise cigarette taxes. We're in a terrible arguement right now about whether or not we should raise cigarette taxes and if we do - and I'm afraid of that - should we use it for these programs? But the majority position is "no, we shouldn't so that," and we should live with the money we adopted in the uh, balanced budget act.

And given that, either we cut military spending or we tell local communities we're not going to continue to help them with police, we're not giong to clean as many superfund sites, we're not going to continue to have a good transportation system. Those are the choices.

HELLMAN: Some of your colleagues, you mentioned the republican leadership is not supportive of changing the rules of the game, with regard to the balanced budget act, but some of your colleagues, but Republicans and Democrats down at the House National Security Committee, have expressed their willingness to readdress that issue. Are they out of step with the political main stream, and the average American?

FRANK: The arguement I've heard from the National Security people have been "let's take money away from domestic programs and put them into military." They want to address it by making a bad situation worse. For example, the recent budget we just passed - the supplemental appropriation - severely cuts Section 8 housing, further exacerbating the housing crisis. I have not heard any of them say we should use any of this surplus for restoring the homecare cuts in Medicare. They're talking about preventing further cuts in Medicare with this money. They have not, to my knowledge, embraced doing that.

We have not had people embrace an expansion of daycare, which I think is absolutely morally essential. You can't tell welfare recipients that they should go out to work and not provide day care for them in a humane situation.

We have - I have in my own district - superfund sites that we haven't yet been able to tackle. There are a lot of public needs here. And there are some things in a complex society such as ours, which cannot be done individually. I can can cut taxes, and cut taxes and cut taxes, and I'm not going to be able to provide more cops on the streets. I'm not going to be able to build school building in those urban areas where students are going to school in inadequite facilities.

You know, we talk about increasing computer literacy. The way schools in America - where if you gave them computers and they plugged them in, the next sound you would hear would be the fire engines coming when the wiring blew up.

You need teachers to be trained. You know, you can make a lot more money these days if you're 24 years old, or 25 years old and you're computer literate and sophisticated in the private sector, than you can teaching 8 year olds how to use computers. Well, I think that's gonna' perpetuate social inequality and I'd like to be able to pay teachers more so we can compete for the first rate talent that we ought to have to do this.

Now, none of those things will happen under the current rules. Yes, it is true, we could say we're going to take a large part of the surplus and add it to total spending, but there are other claimants on that spending - as I said, the social security and the Medicare - I would do some of that.

But even if we did do some of that, on it's own merits there is no justification for the United States spending what it's spending in Europe. Let me give one breakdown for example: in the supplemental appropriation we just passed, we appropriated $486 Million dollars - that's quite a big chunk of federal funding - just for three more months of the American ground troops in Bosnia. I accept the fact that the American ground troops have to be in South Korea to confront that terrible North Korean regime until the process of their becoming civilized is completed. I think we need to confront Sadam Hussein as long as he is a threat and I wish he weren't, but I think he still is.

There are clearly going to be - there's clearly going to be a need for an American presence in much of the world. I do not understand why Germany and France and Italy and Denmark and Belgium, etc, etc, - a very large collection of populations bigger than ours all together, with a gross domestic product bigger than ours - why can't they do Bosnia? The Europeans say "well, we're doing part of Bosnia." But the U.S. is doing all of Korea. The U.S. is doing almost all of the Iraq situation. Isn't Europe's turn? Is Europe going to be forever a dependent little brother?

HELLMAN: You mentioned support for shifting funds from domestic accounts while not increasing overall federal spending. Next year the budgetary fire walls are scheduled to come down. How do you view that as affecting the current situation?

FRANK: That's a major opportunity. And that's really a prerequisite for some of what I'm saying. If the fire walls stayed up then you could not infact take money from the military and put it into domestic. Although my conservative colleagues are perfect to leave it the other way around. While the Senate didn't go along, the bill that the House voted by majority, took money from domestic programs - airport construction, I have a city, New Bedford, where an airport expansion would be very helpful economically. The businesses in the New Bedford area tell me that if we could expand a New Bedford runway from 5000 feet to 8000 feet, we could do a great deal to improve employment in a depressed area, an area that's been depressed in part by national policies, national trade policies that have devastated the garment and textile industry, national conservation policies that have severely curtailed fishing.

The Republicans in the House actually voted to take money out of the airport construction account and put it into Bosnia. Now, the Senate said no to that. They were, in effect, prepared to breach the fire walls. But next year there will be no fire walls. We will have a balanced budget act which puts an overall limitation of spending of about $1 trillion, and it will call for it to be roughly 50% in the discrecionary account in the military and 50% elsewhere. If we could make that 60/40 we could do an enormous amount to improve the quality of life in America without, in any way, shape or form, diminishing the security internationally.