February 5, 1973
Page 3305
A REGRESSIVE TAX SYSTEM
Mr. MUSKIE. Mr. President, more and more of our responsible commentators are concluding that the administration's budget proposals are inequitable and insensitive. In yesterday's Washington Post Hobart Rowan pointed out that the budget leaves intact a regressive and unfair tax system and subsidies for business, while slicing $10 billion from programs aimed at the poor and underprivileged. Mr. Rowan summarizes the administration's attitude as follows:
For the most part, people ought to be fending for themselves, and if they can't – tough.
I hope and expect that Congress will reject a budget based on this negative attitude.
I commend Mr. Rowan's article to the Senate and ask unanimous consent that it be printed in the RECORD.
There being no objection, the article was ordered to be printed in the RECORD, as follows
[From the Washington Post, Feb. 4, 1973]
1973 issue: Nixon's Cuts in Social Programs
(By Hobart Rowan)
President Nixon has confounded his critics, and commentators including myself, by doing what they said during the election campaign he couldn't do: slash the budget sufficiently to avoid an increase in taxes in fiscal 1974.
He did it by being ruthless in reducing the social obligations of the government to a growing population. The axe he wielded was a bigger one than envisioned by the Brookings institution, the American Enterprise institute, former Republican Congressman Johnny Byrnes and former Treasury aide Murray L. Wiedenbaum, to name a few.
On Dec. 17, in this space I wrote:
"It now appears realistic to believe that the President will hold spending for the current fiscal year (1973) to $250 billion ... if so, it is possible an administration dedicated to austerity could hold the fiscal 1974 budget to be presented in January to $270 billion, with a unified budget deficit trimmed to $13 or $15 billion – and a balance in the full employment budget."
To accomplish this feat of austerity, as Ralph Nader, the black caucus on the Hill, and other public interest groups pointed out, Mr. Nixon whacked the money out of social programs for individuals, and left the major corporate "tax expenditure" subsidies virtually untouched.
The budget leaves intact a regressive Social Security tax system, while the investment tax credit and accelerated depreciation privileges add to the corporate take. And the administration's pledges to bring in tax reform proposals are not honored with as much as a token.
A letter this week from 23 public interest advocates and groups to President Nixon says:
"... we would urge that before you stop programs for the many, you at least should scrutinize programs for the few. Before there are fewer libraries and hospitals and low-income apartments and sewage control systems, there should be fewer subsidized ships, less expensive drug and arms procurement, and more taxes paid by coddled corporations."
In other words, if today's economic imperatives call for reducing the federal budget deficit to counter inflation, Mr. Nixon had an opportunity to whack away at billions used to subsidize the maritime, aviation, defense and other industries, in addition to cutting whatever social programs had failed, or had already fulfilled their purposes. And at the same time, more sense could have been made out of the tax structure.
A close analysis of Mr. Nixon's 1974 budget for which he claims savings of $16.9 billion in "program reductions and termination" indicates that about $5 billion are in gimmicks or part of a numbers game, and the rest is real.
Some of the "cuts" are most inventive. Remember the son who told his father, "Dad, I saved a dime by walking home instead of taking the bus"? The father responded: "If only you had walked instead of taking a cab, you would have saved three bucks."
An example of that is a claimed $400 million saving in the 1974 defense budget set down as follows: "limit new spending for All-Volunteer Force and other legislation." But that's a "cut" from a total commitment that had never been made.
A bigger phoney item is a claim for savings on social service grants. The assumption in the budget is that this figure would have grown to $4.7 billion in fiscal 1975, although Congress had already put a ceiling on such expenditures at $2.5 billion. Independent budget experts figure that the 1974 saving in this category is over-staked by $2.1 billion. Agriculture "cuts" assume unrealistically high support costs in the neighborhood of $600 million. Another double 1974 item is a $1.0 billion claim for oil recipients.
But putting all that aside, the real cuts are substantial, and are made at a time when many public needs are unmet.
This is where the cuts in the 1974 budget were made: Welfare, $1.5 billion; Medicare and housing, $1.5 billion; Manpower programs, $1.0 billion; Health, Education and Poverty programs, $1.0 billion; Pensions and retirement, $1.0 billion; Environment (by not full-funding the Muskie bill), $1.0 billion; Agriculture, $1.5 billion; Water and natural resources, $0.5 billion; Defense and foreign, $2.0 billion; Space, $0.3 billion; and All other, $1.0 billion.
That all adds up to $12.3 billion. If the $2.3 billion saved on defense, foreign, and space commitments is subtracted, there's an even $10 billion that's been sliced out of money basically ticketed in fiscal 1974 for the poor and the underprivileged.
Perhaps that represents the will of the majority of people. Certainly, that's the way the President is interpreting this election "mandate." To a certain extent, the "I'm all right, Jack" philosophy is pervasive, as Potomac Associates good new book, State of the Nation" shows.
Mr. Nixon has proposed the issue in unmistakable terms, in his interview with Jack Horner of the Washington Star-News, in his Inaugural Address, and now, in concrete terms, in the budget.
But some people in this society do need help, despite the bland and unsupported assumption made by this administration that anything the federal government can do, the states can do better.
Experience casts doubt on this assumption. Fifty different states and the District of Columbia have 51 different standards. One doubts that what motivates Mr. Nixon is a real belief that revenue-sharing with the local communities will do more for the less affluent in our society.
What comes through, is the belief that for the most part, people ought to be fending for themselves, and if they can't – tough. We see the true Nixon: austere, conservative, straitlaced and uncompromising, despite the string of surprises he has achieved abroad. His domestic record will go down in the history books, too.