August 8, 1974
Page 27327
ANNOUNCEMENT OF BUDGET COMMITTEE HEARINGS
Mr. MUSKIE. Mr. President, I am pleased to announce to my colleagues today that the newly created Senate Budget Committee is ready to begin hearings on an issue of paramount concern to all of us – the Federal budget and inflation.
The Labor Department announced just this morning that the Wholesale Price Index rose 3.7 percent from the end of June to the end of July. Computed on an annual basis, this represents a whopping increase of 44.4 percent.
Other economic indicators tell us the same thing: that inflation is continuing unabated, with little hope for relief in the near future.
Clearly, this is a condition we cannot sustain for much longer.
As we attempt to juggle the economic equation, one particular issue which has received a great deal of attention but too little hard analysis of late is that of the impact of Federal spending on the rate of inflation. Here in the Senate, over the last few weeks, we have heatedly debated the question of whether cutting the Federal budget will ease inflationary pressures. Opinions are sharply divided.
As its first official act, the Senate Budget Committee will take a hard look at this issue and all its ramifications.
The most important question we must ask is whether or not present double digit inflation has in fact been caused by Federal spending levels.
We must also ask how the Congress can best control Federal spending – whether we reduce it, increase it, or simply try to stabilize it – within a broad framework of national priorities.
If budget cuts are required, we must ask where they can best be taken, to avoid the pitfalls of false economy.
And we must ask the price of the various options before us on factors other than inflation, such as unemployment and industrial production.
Of course, the Budget Committee can make no formal legislative recommendations to the Congress this year, under the provisions of the Budget Reform Act.
But hopefully, through careful analysis of these and other questions, the Budget Committee will be able to shed much-needed light on this critical debate. Certainly, we have our work cut out for us.
The hearings of the Budget Committee will begin next Wednesday, August 14, when the committee will hear from Kenneth Rush, economic adviser to the President, followed by Gardner Ackley, former chief economic adviser to President Johnson.
The following day, August 15, the committee will hear testimony from Roy Ash, Director of OMB, and Secretary of the Treasury William Simon.
The hearings will be continued the following week, with a complete schedule and list of witnesses to be released shortly.
At this time, I also want to announce the scheduling of an organizational meeting of the Budget Committee next Tuesday, August 13, at 10 o'clock, in room S-146 in the Capitol.