July 29, 1975
Page 25702
PUBLIC WORKS EMPLOYMENT ACT OF 1975
The Senate continued with the consideration of the bill (S. 1587) to amend the Public Works and Economic Development Act of 1965 to increase the anti-recessionary effectiveness of the program and for other purposes.
Mr. THURMOND. Mr. President, I ask unanimous consent that John Steer of my staff be accorded the privilege of the floor during the debate on this bill.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. HATHAWAY. Mr. President, I ask unanimous consent that John Robert Strauss be accorded the privilege of the floor during the debate and vote on this measure.
The PRESIDING OFFICER. Without objection, it is so ordered.
The bill is open for further amendment.
Mr. MONTOYA. Mr. President, I yield 2 minutes to the Senator from Maine on the bill.
Mr. MUSKIE. Mr. President, I will take just a moment to–
The PRESIDING OFFICER. The Senator will suspend.
The Senate is not in order. Senators will please take their seats so that the Senator from Maine may be heard in the Chamber.
The Senator may proceed.
Mr. MUSKIE. Mr. President, I simply make the point with respect to the amendment, which has just been adopted, that my State had completely obligated all of the money allocated under the formula now in the law and that as a result of the action of the Senate, which is matched in the House of Representatives, that will destroy obligations to the State of $32 million, which is a considerable impact on a State that is suffering unemployment of 10 to 11 percent.
I did not plead my State's special case in the argument on that amendment, but I make it a matter of record here so that the Senate may understand what it has done.
Mr. President, I send to the desk an amendment which is a modification of one I have at the desk. In addition to the sponsors listed I add the Senator from Indiana (Mr. HARTKE) , the Senator from Massachusetts (Mr. KENNEDY) , the Senator from South Dakota (Mr. McGOVERN) , the Senator from Washington (Mr. MAGNUSON) , and the Senator from Minnesota (Mr. MONDALE), as cosponsors.
The PRESIDING OFFICER. The amendment will be stated.
The assistant legislative clerk read as follows:
The Senator from Maine (Mr. MUSKIE) for himself and others proposes an amendment No. 816 as modified.
The amendment is as follows: Immediately after the first section insert the following caption:
"TITLE I – GENERAL PROVISIONS"
Redesignate sections 2 through 12 as sections 101 through 111, respectively.
After section 111, as redesignated by thisamendment, insert the following new title:
"TITLE II — ANTIRECESSION PROVISIONS
"FINDINGS OF FACT AND DECLARATION OF POLICY
"SEC. 201. (a) FINDINGS: The Congress finds–
(1) that State and local governments represent a significant segment of the national economy whose economic health is essential to national economic prosperity;
"(2) that present national economic problems have imposed considerable hardships on State and local government budgets;
"(3) that those governments, because of their own fiscal difficulties, are being forced to take budget-related actions which tend to undermine Federal Government efforts to stimulate the economy;
"(4) that efforts to stimulate the economy through reductions in Federal Government tax obligations are weakened when State and local governments are forced to increase taxes;
"(5) that the net effect of Federal Government efforts to reduce unemployment through public service jobs is substantially limited if State and local governments use federally financed public service employees to replace regular employees that they have been forced to lay off;
"(6) that efforts to stimulate the construction industry and reduce unemployment are substantially undermined when State and local governments are forced to cancel or delay the construction of essential capital projects; and
"(7) that efforts by the Federal Government to stimulate the economic recovery will be substantially enhanced by a program of emergency Federal Government assistance to State and local governments to help prevent those governments from taking budget-related actions which undermine that Federal Government efforts to stimulate economic recovery.
"(b) POLICY.—Therefore, the Congress declares it to be the policy of the United States and the purpose of this title to make State and local government budget-related actions more consistent with Federal Government efforts to stimulate national economic recovery; to enhance the stimulative effect of a Federal Government income tax reduction; and to enhance the job creation impact of Federal Government public service employment programs. It is the intention of Congress that amounts paid to a State or local government under this title shall not be substituted for amounts which the State would have paid or made available to the local government out of revenues from State sources.
"FINANCIAL ASSISTANCE AUTHORIZED
"SEC. 202. (a) EMERGENCY SUPPORT GRANTS.—The Secretary of the Treasury (hereafter in this title referred to as the 'Secretary') shall, in accordance with the provisions of this title, make emergency support grants to States and to local governments to coordinate budget-related actions by such governments with Federal Government efforts to stimulate economic recovery.
"(b) AUTHORIZATION OF APPROPRIATIONS. Subject to the provisions of subsection (c), there are authorized to be appropriated for each of the twelve succeeding calendar quarters (beginning with the first calendar quarter beginning after the date of enactment of this title) for the purpose of making emergency support grants under this title
"(1) $125,000,000 plus
"(2) $62,500,000, multiplied by the number of one-half percentage points by which the rate of seasonally adjusted national unemployment for the most recent calendar quarter which ended before the beginning of such calendar quarter exceeded 6 percent.
"(c) TERMINATION.— No amount is authorized to be appropriated under the provisions of subsection (b) for any calendar quarter if–
"(1) the average rate of national unemployment during the most recent calendar quarter which ended 3 months before the beginning of such calendar quarter did not exceed 6 percent, and
"(2) the rate of national unemployment for the last month of the most recent calendar quarter which ended 3 months before the beginning of such calendar quarter did not exceed 6 percent.
"ALLOCATION
"SEC. 203. (a) RESERVATIONS:
"(1) ALL STATES.—The Secretary shall reserve one-third of the amounts appropriated pursuant to the authorization under section 202 for each calendar quarter for the purpose of making emergency support grants to States under the provisions of subsection (b).
"(2) ALL LOCAL GOVERNMENTS.—The Secretary shall reserve two-thirds of such amounts for the purpose of making emergency support grants to local governments under the provisions of subsection (c).
"(b) STATE ALLOCATION
"(1) IN GENERAL.—The Secretary shall allocate from amounts reserved under subsection (a) (1) an amount for the purpose of making emergency support grants to each State equal to the total amount reserved under subsection (a) (1) for the calendar quarter multiplied by the applicable State percentage.
"(2) APPLICABLE STATE PERCENTAGE.— For purposes of this subsection, the applicable State percentage is equal to the quotient resulting from the division of the product of—
"(A) the State excess unemployment percentage, multiplied by
"(B) the State tax amount
by the sum of such products for all the States.
"(3) DEFINITIONS.— For purposes of this section—
"(A) the term 'State' means each State of the United States;
"(B) the State excess unemployment percentage is equal to the difference resulting from the subtraction of the State base period unemployment rate for that State from the State unemployment rate for that State;
"(C) the State base period unemployment rate is equal to the average annual rate of unemployment in the State determined over the period which begins on January 1, 1967, and ends on December 31, 1969, as determined by the Secretary of Labor and reported to the Secretary;
"(D) the State unemployment rate is equal to the rate of unemployment in the State during the appropriate calendar quarter, as determined by the Secretary of Labor and reported to the Secretary; and
"(E) the State tax amount is the amount of compulsory contributions exacted by the State for public purposes (other than employee and employer assessments and contributions to finance retirement and social insurance systems, and other than special assessments for capital outlay), as such contributions are determined for the most recent period for which such data are available from the Social and Economic Statistics Administration for general statistical purposes.
"(C) LOCAL GOVERNMENT ALLOCATION:
"(1) IN GENERAL.—The Secretary shall allocate from amounts reserved under subsection (a) (2) an amount for the purpose of making emergency support grants to each local government, subject to the provisions of paragraph (3), equal to the total amount reserved under such subsection for the calendar quarter multiplied by the local government percentage.
"(2) LOCAL GOVERNMENT PERCENTAGE.—For purposes of this subsection, the local government percentage is equal to the quotient resulting from the division of the product of
"(A) the local excess unemployment percentage, multiplied by—
"(B) the local adjusted tax amount,
by the sum of such products for all local governments.
" (3) SPECIAL RULE.
"(A) For purposes of paragraphs (1) and (2), all local governments within the jurisdiction of a State other than identifiable local governments shall be treated as though they were one local government.
"(B) The Secretary shall set aside from the amount allocated under paragraph (1) of this subsection for all local governments within the jurisdiction of a State which are treated as though they are one local government under subparagraph (A) an amount determined under subparagraph (C) for the purpose of making emergency support grants to each local government, other than identifiable local governments, within the jurisdiction of such State.
"(C) The amount set aside for the purpose of making emergency support grants to each local government, other than an identifiable local government, within the jurisdiction of a State under subparagraph (B) shall be—
"(i) determined under an allocation plan submitted by such State to the Secretary which meets the requirements set forth in section 206 (b) , or
"(ii) if a State does not submit an allocation plan under section 206(b) for purposes of this paragraph within 30 days after the date of enactment of this title or if a State's allocation plan is not approved by the Secretary under section 206(c), equal to the total amount allocated under paragraph (1) of this subsection, for all local governments within the jurisdiction of such State which are treated as though they are one legal government under subparagraph (A) multiplied by the local government percentage, as defined in paragraph (2) (determined without regard to the parenthetical phrases at the end of paragraphs (4) (B) and (C) of this subsection).
"(D) If local unemployment rate data (as defined in paragraph (4) (B) of this subsection without regard to the parenthetical phrase at the end of such definition) for a local government jurisdiction is unavailable to the Secretary or the State for purposes of determining the amount to be set aside for such government under paragraph (C) then the Secretary or State shall determine such amount under subparagraph (C) by using—
"(i) the best available unemployment rate data for such government if such data is determined in a manner which is substantially consistent with the manner in which local unemployment rate data is determined, or
"(ii) if no consistent unemployment rate data is available, the local unemployment rate data for the smallest unit of identifiable local government in the jurisdiction of which such government is located.
"(E) If the amount determined under subparagraph (C) which would be set aside for the purpose of making emergency support grants to a local government under subparagraph (B) is less than $1,000 then no amount shall be set aside for such local government under subparagraph (B).
"(4) DEFINITIONS.—For purposes of this subsection—
"(A) the local excess unemployment percentage is equal to the difference resulting from the subtraction of 4.5 percentage points from the local unemployment rate;
"(B) the local unemployment rate is equal to the rate of unemployment in the jurisdiction of the local government during the appropriate calendar quarter, as determined by the Secretary of Labor and reported to the Secretary (in the case of local governments treated as one local government under paragraph (3) (A), the local unemployment rate shall be the unemployment rate of the State adjusted by excluding consideration of unemployment and of the labor force within identifiable local governments, other than county governments, within the jurisdiction of that State);
"(C) the local adjusted tax amount means—
"(i) the amount of compulsory contributions exacted by the local government for public purposes (other than employee and employer assessments and contributions to finance retirement and social insurance systems, and other than special assessments for capital outlay) as such contributions are determined for the most recent period for which such data are available from the Social and Economic Statistics Administration for general statistical purposes,
"(ii) adjusted (under rules prescribed by the Secretary) by excluding an amount equal to that portion of such compulsory contributions which is properly allocable to expenses for education,
(and in the case of local governments treated as one local government under paragraph (3) (A), the local tax amount shall be the sum of the local adjusted tax amounts of all local governments within the State, adjusted by excluding an amount equal to the sum of the local adjusted tax amounts of identifiable local governments within the jurisdiction of that State);
"(D) the term 'identifiable local government' means a unit of general local government for which the Secretary of Labor has made a determination concerning the rate of unemployment for purposes of title II of the Comprehensive Employment and Training Act of 1973 during the current or preceding fiscal year; and
"(E) the term 'local government' means the government of a county, municipality, township, or other unit of government below the State which—
"(i) is a unit of general government (determined on the basis of the same principles as are used by the Social Economic Statistics Administration for general statistical purposes), and
"(ii) performs substantial governmental functions.
Such term includes the District of Columbia and also includes the recognized governing
body of an Indian tribe or Alaskan native village which performs substantial governmental functions. Such term does not include the government of a township area unless such government performs substantial governmental functions.
"CONTINGENCY FUND
"SEC. 204. (a) RESERVATION.—The Secretary shall reserve from the amounts appropriated pursuant to the authorization under section 202 for each calendar quarter an amount equal to the amount, if any, not paid to State or local governments by reason of section 210(c), but not in excess of an amount which is equal to 10 percent multiplied by the total amount appropriated under the authorization in section 202 for such quarter, for the purpose of making additional emergency support grants to State or local governments which are in severe fiscal difficulty, as determined under subsection (e) .
"(b) ALLOCATIONS.—The Secretary shall allocate from the amounts reserved under subsection (a) such amount as he determines is necessary for an additional emergency support grant to assist each State or local government, upon application by such government, which is in severe fiscal difficulty. The sum of the amounts allocated under this subsection may not be less than 75 percent of the amount reserved under subsection (a) for the calendar quarter. No amount may be allocated for an additional emergency support grant to a State or local government under this section in excess of an amount equal to the lesser of—
"(1) 10 percent of the amount allocated to such State or local government under section
203 for the calendar quarter, or
"(2) 15 percent of the amount reserved under this subsection for the calendar quarter.
"(C) SPECIAL RULE FOR PUERTO RICO, VIRGIN ISLANDS, GUAM, AND THE TRUST TERRITORIES OF THE PACIFIC.—The Secretary may allocate from the amount reserved under subsection (a) amounts for the purpose of making emergency support grants to the governments of the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and the Trust Territories of the Pacific upon application by such governments, if such governments are in severe fiscal difficulty, as determined under subsection (e). The total amount of payments made under this paragraph during any calendar quarter may not exceed 10 percent of the amount reserved under subsection (a) for that quarter. For purposes of sections 205 through 215, the governments of the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and the Trust Territories of the Pacific shall be considered to be State governments.
"(d) CRITERIA FOR SEVERE FISCAL DIFFICULTY.—For purposes of this section, a State or local government shall be considered to be in severe difficulty if—
"(1) the rate of unemployment during the appropriate calendar quarter within its jurisdiction exceeds the national annual average rate of unemployment.
"(2) if it is currently unable, or will be unable before the end of the current calendar quarter, to pay accrued interest to the holders of its outstanding debt instruments, or
"(3) it must increase taxes immediately to maintain its level of basic services or reduce the level of those services before the end of the current calendar quarter.
"USES OF EMERGENCY SUPPORT GRANTS
"SEC. 205. Each State and local government shall use emergency support grants made under this title for the maintenance of basic services customarily provided to persons in that State or in the area under the jurisdiction of that local government, as the case may be. State and local governments may not use emergency grants made under this title for the acquisition of supplies and materials and for construction unless such supplies and materials or construction are essential to maintain basic services.
"APPLICATIONS
"SEC. 206. (a) IN GENERAL.—Each State and local government may receive emergency support grants under this title only upon application to the Secretary, at such time, in such manner, and containing or accompanied by such information as the Secretary prescribes by rule. The Secretary may not require any State or local government to make more than one such application during each fiscal year. Each such application shall—
"(1) include a State or local government program for the maintenance, to the extent practical, of levels of public employment and of basic services customarily provided to persons in that State or in the area under the jurisdiction of that local government which is consistent with the provisions of section 205;
"(2) provide that fiscal control and fund accounting procedures will be established as may be necessary to assure the proper disbursal of, and accounting for, Federal funds paid to the State or local government under this title;
"(3) provide that reasonable reports will be furnished in such form and containing such information as the Secretary may reasonably require to carry out the purposes of this title and provide that the Secretary, on reasonable notice, shall have access to, and the right to examine any books, documents, papers, or records as he may reasonably require to verify such reports;
"(4) provide that the requirements of section 207 will be complied with;
"(5) provide that the requirements of section 208 will be complied with;
"(6) provide that the requirements of section 209 will be complied with; and
"(7) provide that any amount received as an emergency support grant under this title shall be expended by the State or local government before the end of the 6calendar month period which begins on the date after the day on which such State or local government receives such grant.
"(b) STATE ALLOCATION PLANS FOR PURPOSES OF SECTION 203(c) (3).—A State may
file an allocation plan with the Secretary for purposes of section 203(c) (3) (C) (i) at such time, in such manner, and containing such information as the Secretary may require by rule. Such allocation plan shall meet the following requirements:
"(1) the criteria for allocation of amounts among the local governments within the State shall be consistent with the allocation formula for local governments under section 203 (c) (2) ;
"(2) the allocation criteria must be specified in the plan; and
"(3) the plan must be developed after consultation with appropriate officials of local governments within the State other than identifiable local governments. The allocation plan required under the subparagraph shall, to the extent feasible, include consideration of the needs of small local government jurisdictions with severe fiscal problems.
"(c) APPROVAL: The Secretary shall approve any application that meets the requirements of subsection (a) or (b) within 30 days after he receives such application, and shall not finally disapprove, in whole or In part, any application for an emergency support grant under this title without first affording the State or local government reasonable notice and an opportunity for a hearing.
"NONDISCRIMINATION
"SEC. 207. (a) IN GENERAL.—No person in the United States shall, on the grounds of race, religion, color, national origin, or sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity funded in whole or in part with funds made available under this title.
"(b) AUTHORITY OF THE SECRETARY: whenever the Secretary determines that a State government or unit of local government has failed to comply with subsection (a) or an applicable regulation, he shall, within 10 days, notify the Governor of the State (or, in the case of a unit of local government, the Governor of the State in which such unit is located, and the chief elected official of the unit) of the noncompliance. If within 30 days of the notification compliance is not achieved, the Secretary shall, within 10 days thereafter—
" (1) exercise all the powers and functions provided by title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d);
"(2) refer the matter to the Attorney General with a recommendation that an appropriate civil action be instituted; or
"(3) take such other action as may be provided by law.
(c) ENFORCEMENT.—Upon his finding of discrimination under subsection (b), the Secretary shall have the full authority to withhold or temporarily suspend any grant under this title, or otherwise exercise any authority contained in title VI of the Civil Rights Act of 1964, to assure compliance with the requirement of nondiscrimination in federally assisted programs set forth in that title.
"(d) APPLICABILITY OF CERTAIN CIVIL RIGHTS ACTS.
"(1) Any party who is injured or deprived within the meaning of section 1979 of the Revised Statutes (42 U.S.C. 1983) or of section 1980 of the Revised Statutes (42 U.S.C. 1985) by any person, or two or more persons in the case of such section 1980, in connection with the administration of an emergency support grant under this title may bring a civil action under such section 1979 or 1980, as applicable, subject to the terms and conditions of those sections.
"(2) Any person who is aggrieved by an unlawful employment practice within the meaning of title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e at seq.) by any employer in connection with the administration of an emergency support grant under this title may bring a civil action under section 706(f) (1) of such Act (42 U.S.C.. 2000e5(f) (1) ) subject to the terms and conditions of such title.
"LABOR STANDARDS
"SEC. 208. All laborers and mechanics employed by contractors on all construction projects assisted under this title shall be paid wages at rates not less than those prevailing on similar projects in the locality as determined by the Secretary of Labor in accordance with the Davis-Bacon Act (40 U.S.C. 276a to 276a5). The Secretary of Labor shall have, with respect to the labor standards specified in this section, the authority and functions set forth in Reorganization Plan Numbered 14 of 1950 (15 C.F.R. 3176) and section 2 of the Act of June 13, 1934, as amended (40 U.S.C. 276c).
"SPECIAL REPORTS
"SEC. 209. Each State and local government which receives a grant under the provisions of this title shall report to the Secretary any increase or decrease in any tax which it imposes and any substantial reduction in the number of individuals it employs or in services which such State or local government provides. Each State which receives a grant under the provisions of this title shall report to the Secretary any decrease in the amount of financial assistance which the State provides to the local governments within its jurisdiction below the amount which equals the amount of such assistance which such State provided to such local governments during the 12-month period which ends on the last day of the calendar quarter immediately preceding the date of enactment of this title, together with an explanation of the reasons for such decrease. Such reports shall be made as soon as it is practical and, in any case, not less than 6 months after the date on which the decision to impose such tax increase or decrease, such reductions in employment or services, or such decrease in State financial assistance is made public.
"PAYMENTS
"SEC. 210. (a) IN GENERAL.—From the amount allocated for State and local governments under sections 203 and 204, the Secretary shall pay to each State and to each local government, which has an application approved under section 206, an amount equal to the amount allocated to such State or local government under section 203 or section 204.
"(b) ADJUSTMENT.—Payments under this title may be made with necessary adjustments on account of overpayments or under payments.
"(c) TERMINATION.—No amount shall be paid to any State or local government under the provisions of this section for any calendar quarter if—
"(1) the average rate of unemployment within the jurisdiction of such State or local government during the most recent calendar quarter which ended three months before the beginning of such calendar quarter was less than 6 percent, and
"(2) the rate of unemployment within the jurisdiction of such government for the last month of the most recent calendar quarter which ended three months before the beginning of such calendar quarter did not exceed 6 percent.
"STATE AND LOCAL GOVERNMENT ECONOMIZATION
"SEC. 211. No State or local government may receive any payment under the provisions of this title unless such government in good faith certifies in writing to the Secretary, at such time and in such manner and form as the Secretary prescribes by rule, that it has made substantial economies in its operations and that without grants under this title it will not be able to maintain essential services without increasing taxes or maintaining recent increases in taxes thereby weakening Federal Government efforts to stimulate the economy through reductions in Federal tax obligations.
"WITHHOLDING
"SEC. 212. Whenever the Secretary, after affording reasonable notice and an opportunity for a hearing to any State or local government, finds that there has been a failure to comply substantially with any provision set forth in the application of that State or local government approved under section 206; the Secretary shall notify that State or local government that further payments will not be made under this title until he is satisfied that there is no longer any such failure to comply. Until he is so satisfied, no further payments shall be made under this title.
"REPORTS
"SEC. 213. The Secretary shall report to the Congress as soon as is practical after the end of each calendar quarter during which grants are made under the provisions of this title. Such report shall include information on the amounts paid to each State and local government and a description of any action which the Secretary has taken under the provisions of section 212 during the previous calendar quarter. The Secretary shall report to Congress as soon as is practical after the end of each calendar year during which grants are made under the provisions of this title. Such reports shall include detailed information on the amounts paid to State and local governments under the provisions of this title, any actions which the Secretary has taken under the provisions of section 212, and an evaluation of the purposes to which amounts paid under this title were put by State and local governments and the economic impact of such expenditures during the previous calendar year.
"ADMINISTRATION
"SEC. 214. (a) RULES. The Secretary is authorized to prescribe, after consultation with the Secretary of Labor, such rules as may be necessary for the purpose of carrying out his functions under this title.
"(b) COORDINATION.—In administering the provisions of this title, the Secretary is authorized to use the services and facilities of any agency of the Federal Government and of any other public agency or institution in. accordance with appropriate agreements, and to pay for such services either in advance or by way of reimbursement as may be agreed upon.
"PROGRAM STUDIES AND RECOMMENDATIONS
"SEC. 215. (a) EVALUATION.—The Comptroller General of the United States shall conduct an investigation of the impact which emergency support grants have on the operations of State and local governments and on the national economy. Before and during the course of such investigation the Comptroller General shall consult with and coordinate his activities with the Congressional Budget Office and the Advisory Commission on Intergovernmental Relations. The Comptroller General shall report the results of such investigation to the Congress within two years after the date of enactment of this title together with an evaluation of the macroeconomic effect of the program established under this title and any recommendations for improving the effectiveness of similar programs. Such report shall include the opinions of the Congressional Budget Office and the Advisory Commission on Intergovernmental Relations with respect to the program established under this title and any recommendations which they may have for improving the effectiveness of similar programs. All officers and employees of the United States shall make available all information, reports, data, and any other material necessary to carry out the provisions of this subsection to the Comptroller General upon a reasonable request.
"(b) COUNTERCYCLICAL STUDY.—The Director of the Congressional Budget Office and the Advisory Commission on Intergovernmental Relations shall conduct a study to determine the most effective means by which the Federal Government can stabilize the national economy during periods of excess expansion and high inflation through programs directed toward State and local governments. Before and during the course of such study the Director and the Advisory Commission shall consult with and coordinate his activities with the Comptroller General of the United States. The Director and the Advisory Commission shall report the results of such study to Congress within two years after the date of enactment of this title. Such study shall include the opinions of the Comptroller General with respect to such study.".
Mr. MUSKIE. Mr. President, I yield myself 5 minutes.
Mr: KENNEDY. May we have order, Mr. President?
The PRESIDING OFFICER. The Senate will please be in order.
Mr. MUSKIE. Mr. President, the amendment we are proposing today represents a concept in antirecessionary policy that is relatively new to this body.
What this proposal would do would be to provide assistance to State and local governments based upon their unemployment rate, as a measure of recession's impact, and the taxes they raise, as a measure of the level of services they provide. No government would receive assistance if its unemployment averaged less than 6 percent for a full calendar quarter, or if it were below 6 percent for the final month in that quarter.
On a national level, the program would turn on when unemployment reached 6 percent, and cut off when unemployment dropped back below the 6 percent level.
In almost every part of the Nation, State and local governments — faced with recession-related declines in projected revenues and increases in demands for services — are being forced to adopt restrictive budgetary policies, such as higher taxes or fewer services.
The Joint Economic Committee has estimated that State and local governments are in the process of removing about $8 billion from the economy through such restrictive budget policies, at the same time that the Federal Government is pumping more money in to stimulate greater economic activity. On a smaller scale, the budgetary decisions of State and local governments have a definite impact on the local private sector. For example, James Needham, president of the New York Stock Exchange, testified at hearings on countercyclical assistance that proposed tax increases in New York City could well result in the loss of 20,000 jobs in the private sector.
We do believe that during bad economic times, belt tightening by Government at all levels is a good idea. Consequently, the assistance we propose to provide would make up only a very small part of the total State and local government deficit estimated at about $8 billion.
But we do not believe that it is sound policy for governments to be able to provide good local services during good times, but be forced to lower the quality, of those services when the economy turns dawn.
More important — and this is really the essential argument for this amendment — we do not believe that it is sound economic policy for the Federal government to pursue a course of stimulating the economy, through tax cuts and jobs programs, only to have State and local government further contribute to recession by doing just the opposite, and that is what is happening in our economy today.
The Government Operations Committee has given the countercyclical assistance proposal substantial consideration. Six days of hearings were held this spring, and legislation identical to the amendment we now propose was approved overwhelmingly by the committee on July 16.
We believe that the amendment we are offering meets virtually every criterion of a sound anti-recession policy. Testimony at hearings on the proposal supported this belief.
In the first place, the money that would be provided under the amendment would get out into the economy immediately, providing a quick stimulative impact.
Second, the program would shut itself off entirely when the recession has subsided, so it would not contribute to a revival of inflationary pressures.
Third, the assistance that would be provided is very selectively targeted, to reach only those places which have been severely affected by the recession.
And finally, the amendment we propose would strengthen the hand of the Federal Government in dealing with recession, by helping to prevent State and local governments from taking budgetary actions which undercut Federal efforts to stimulate the economy.
One of the most frequently asked questions about the amendment we are proposing is how it relates to the first concurrent budget resolution adopted earlier this year. The answer is that a combination of the countercyclical assistance amendment and S. 1587, the Public Works Employment Act, would be within the outlay target set by the budget resolution.
Under the community and regional development section — function 450 — of that resolution, $2.1 billion in outlays for fiscal year 1976 were included for programs of public works and anti-recession assistance to State and local governments. Total outlays for the public works anti-recession assistance package during fiscal year 1976 would be below that level, with outlays for the countercyclical proposal estimated to be $1.25 billion and for the public works program between $500 and $900 million.
The budget resolution allows $5 billion in budget authority for fiscal 1976 for public works and countercyclical assistance. The combined budget authority of the public works bill and the countercyclical amendment would be $3.35 billion — $2.1 for public works and an estimated $1.25 for countercyclical.
Those of us offering this amendment believe that it is a logical complement to the public works approach. Complete recovery from the current recession promises to be slow, with high unemployment lingering well into the second half of the decade. A solid anti-recession program, therefore, should be one with both immediate and long-range impact, aimed at both the private and public sectors of the economy. That is what this package would consummate.
Mr. President, I reserve the remainder of my time. I yield to the distinguished Senator from Tennessee (Mr. BROCK) , who is a cosponsor of this amendment and of the bill.
The PRESIDING OFFICER. Who yields time?
Mr. MUSKIE. I yield 5 minutes to the distinguished Senator from Tennessee.
Mr. BROCK. Mr. President, first, I pay my respects to the Senator from Maine for his principal efforts in developing this legislation. It is a remarkable piece of work and one in which I am privileged to join.
In these days of economic adversity, both inflation and recession, we have had a great deal of talk in Congress about how to respond to our current economic malaise. It seems that everybody has a different answer.
I believe that in this particular instance we have something which is unique, because it is related explicitly to the economic hardship under which we now suffer — and only that. In other words, by the very definition of the term "countercyclical," this bill comes into play when the economy is in a slump; and as the economy bottoms out and starts working its way back up to good times — hopefully, not too long — the bill phases down in very specific stages. Therefore, by this effort, we do not create a permanent program that stays well beyond its necessary life, and that is rather unique, in my experience in Government. That is one of the most attractive features about it; because in the 12 years I have been here, I have seen us place into law program after program which was needed at a particular time but which remained in effect no matter how long ago the need disappeared. This bill is a specific remedy that deals only with the problem and phases out when the problem is gone.
I wish to take just 1 minute to address the concern of some of my colleagues with regard to budgetary impact, because I have an enormous respect for those who make that argument, and I generally agree with their posture.
We are spending far more money than we should spend in Government today. Our budget has an inexcusable deficit. If we look at the way this amendment is drawn, we find two or three things worthy of attention.
First of all, the amendment is drawn so as to fit within the budget authorization of Congress, itself, and that has been passed by this body. The total outlays of this amendment, coupled with the basic legislation, will come within the $2 billion ceiling imposed by the Budget Committee and voted by this body.
Second, it seems to me that this is a far preferable way to do business than the categorical grants approach, which does not reflect the real world. We have a public service jobs program–
The PRESIDING OFFICER. The 5 minutes has expired that the Senator had allotted.
Mr. MUSKIE. I yield 2 more minutes.
Mr. BROCK. When we have a public service jobs program, when we tell the mayor of Newark, N.J., Mr. Gibson, who has probably the toughest job in the United States, "Your income is going to fall off so fast that you are going to have to lay off people with 8 to 10 years' seniority, yet we are going to come back in with a public service jobs program so you can hire somebody else on a temporary basis, with no skills, and it will last 6 months," there is something wrong with our program.
What does this bill do? It takes the same resource, puts it in the hands of the mayor of that community or any other, and says, "Do what you must to protect the essential services required to take care of your citizenry; do what you must to determine your own priorities and own needs, but do it within the priority of those needs as you see them and not as we see them."
That makes so much more sense than the categorical grants approach of our program that I will do whatever I can to speak for and support this legislation. I desperately hope that this is the kind of bill that can effectuate a compromise between Congress and the Executive.
We all know the President cannot sign the House bill. This bill, in contrast, affords him an opportunity to walk down the road with us in concert to deal with the problem that very much does exist.
I appreciate again the leadership of the Senator from Maine in his offer.
Mr. MUSKIE. I thank the Senator from Tennessee.
Mr. President, I reserve the remainder of my time.
Mr. MONTOYA. Mr. President, I yield myself such time as I may consume.
We had the Muskie amendment before the committee. It had been before the Committee on Government Operations in hearing and had not been reported at that point when we considered and marked up the bill. It was the feeling of the committee at the time that the Muskie bill did not belong in the public works bill. I say this today because it is designed to provide an authorization approximating $2 billion for each of 3 years, although I concede that the outlays because of late enactment of this legislation for this particular year, will be $1,250,000,000.
What is this so-called Muskie amendment? What does it do? It is, in my opinion, another revenue sharing bill. We have a $30 billion authorization on the books now. The authorization carries automatic appropriation by way of revenue sharing. Each year, there is an expenditure in revenue sharing funds of $6 billion, which goes to the State and local governments from Washington. This Muskie amendment is designed to do the very same thing. It is designed as aid to the State and local governments, the same as revenue sharing, no strings attached. Only there is a little triggering device in the allocation in the particular amendment.
I am concerned that this amendment will burden the bill to such an extent that it will expose the bill to a veto by the President. When we first considered this legislation, we were considering the House bill. The House bill came over to us with a $5 billion authorization. There was no revenue sharing feature in it. It was the consensus of the committee that we should reduce the House bill, so, instead of $5 billion in authorization, we provided in the Senate bill $2 billion to try to anticipate possible approval by the President. To add $2 billion for each of 3 years on this bill in the name of revenue sharing is merely to add to what we have already on the books and just to give dollars all over the country; no control by Congress, no control from Washington, no strings attached.
I would probably vote for this particular amendment as a bill if it came here separately. But I say, Mr. President, that the amendment puts a burden on the bill and makes it subject to a Presidential veto.
The amendment does not create jobs. It rests on the premise that local governments should not have to lower the quality of their essential services just because of a recession. I submit that this is a near-depression recession. If anyone has escaped some belt tightening, I should be surprised. Everyone has had to change priorities, including governments at all levels; most of all, the Federal Government.
Third, it has had no action on the House side. At least 10 bills similar to this one are pending before the House. Yet no committee action has been taken on this amendment. Why? If it is attached to S. 1587, will it be an albatross, as I stated? It is an ingenious way to get the matter before the House. But I regret that it is using the public works bill as a vehicle to get there.
I agree that it is an anti-recession bill, too. But it distributes money under a formula to State and local governments and does not say how the money must be spent. I wonder, as I study the amendment before us, if it is not basically an urban bill. I know that in aggregate numbers, the most persons unemployed are in the large, urban States. But I am concerned about the allocation formula. It is the "balance of State" provision that bothers me.
I represent a poor rural State. Take, for example, a town of 15,000 people in a county of 60,000. Unemployment data for the county might be available, but it will assuredly not be current, and current data are of utmost importance in a recession such as we are experiencing. There are no unemployment data for the town. On what basis will it get a share of the funds without that information?
My State is made up of many towns this size and smaller. They know how real their unemployment is. But how do they persuade someone in Washington without current data? The identifiable units in the bill are larger urban places. They have relatively current unemployment data. Everything else is lumped into a nebulous, ill-defined "balance of State." The Governor is invited to decide how to distribute the money. Perhaps he knows best. But there will be some mayors and city councils that will not like to see that power exercised by their Governor. I wonder why the Governors, at their recent meeting in New Orleans, on a vote of 19 to 17, indicated their dissatisfaction with the bill — that is, the Muskie amendment now.
There is a question of equity in this amendment. If I were a mayor and, with my city council, managed to survive the recession without an increase in taxes or an appreciable reduction in essential services, my colleagues and I are going to be upset when we see the city down the road, that we all know has been poorly managed, get a check from Washington to keep them in business. I know that is something of an exaggeration, but it is a concern that needs to be brought out and ventilated.
The most serious objection that I have to this is that this does not belong in a public works bill. This certainly, at this time, is a burden on the public works bill and renders the bill more eligible for a Presidential veto if this $2 billion revenue sharing authorization is adopted by the Senate and, finally, adopted by Congress before it goes to the President.
I reserve the remainder of my time.
The PRESIDING OFFICER. Who yields time?
Mr. MUSKIE. Mr. President, I yield 5 minutes to the distinguished Senator from Minnesota.
Mr. HUMPHREY. Mr. President, I want to respond briefly to some of the remarks made by the very able distinguished Senator from New Mexico.
First of all, the Senator from New Mexico indicated that the amendment does not create jobs. Let me say what it does do.
It does preserve jobs, because many of the cities in America today are compelled to lay off people by the hundreds and thousands, and they add these people to the unemployment rolls.
The Joint Economic Committee has made a survey of American cities with respect to their rates of unemployment. While the national average is about 9.3 percent, many of our cities have unemployment rates of 11, 12, and 14 percent. This morning we heard from New York City, over 11 percent; in Detroit, over 25 percent; in Phoenix, I believe, over 14 percent.
You can go across America and find these difficulties. In city after city. From Providence to Wilmington to New York to Cleveland to Detroit, to many other cities, you find mayors and city councils compelled in the name of fiscal frugality to lay off workers.
Most of us, I think, are aware that State and local governments are experiencing severe recession-induced financial problems. In fact, it is estimated that the shortfall of revenue for State and local governments is $11 billion, and it is this shortfall which is causing great difficulty in providing employment and proper services.
Recession also creates additional demands upon State and local governments. So what you are seeing here is an effort, on the one hand, by the Federal Government to stimulate the economy by public service jobs, public works, by deficit financing, by monetary policy and by the Federal Reserve Board pumping in what we call economic stimuli into the economy. On the other hand, you see State and local government, because of the shortfall of revenues, having to lay off the very workers we are trying to hire. It does not make much sense.
Now, long ago in 1971 the Joint Economic Committee, at that time under the able chairmanship of Senator Proxmire, recommended very strongly that there be this kind of legislation. This has been recommended in every recession since as a policy which the Government ought to pursue at the Federal level. We call it countercyclical assistance. It really is a type of unemployment compensation, only this is for local governments that suffer from a shortfall of revenues due to a recession.
This is as much a part of a program for getting this country back on its feet as any form of public works, which I fully support.
May I say I commend the able Senator from New Mexico for an extraordinarily good job of legislative craftsmanship in bringing to us a bill which makes a tremendous amount of sense.
The issue, of course, that has us worried here is will this provoke a veto. I think the Senate would be interested in knowing that this morning, as I was holding hearings as chairman of the Joint Economic Committee, Dr. Arthur Burns, who is one of the senior advisers to the President of the United States, and chairman of the Federal Reserve Board, responded to questions from Senator JAVITS. Dr. Burns said of this very proposal that we are now debating:
The one proposal that makes sense to aid our cities is the countercyclical revenue assistance program.
Here is a top economic adviser to this Government, Dr. Arthur Burns, who says this is the one program that makes sense.
The PRESIDING OFFICER (Mr. HATFIELD). The Senator's time is up.
Mr. HUMPHREY. And I think we should support it and pass it.
Mr. MUSKIE. I reserve the remainder of my time, Mr. President.
The PRESIDING OFFICER. Who yields time?
Mr. LONG. Mr. President, will the Senator yield 5 minutes?
Mr. MONTOYA. I yield 5 minutes to the Senator from Louisiana,
Mr. LONG. Mr. President, the Senator from New Mexico has correctly said this amendment does not belong on a public works bill, it belongs on a Finance Committee bill, if it belongs on any bill. I do not know why anyone would want to bypass the committee whose jurisdiction includes revenue sharing.
This is not a bill to build so much as a chicken coop. This is an amendment that would share revenues, $2 billion, with the States.
Now, I notice it does not follow the revenue sharing formula. There are 30 States that make out a lot worse under this amendment than they would under the general revenue sharing formula. To some States it will not make much difference. It will not make much difference to Maine, for example. It will make a lot of difference to Wyoming. Wyoming would get 12 times less than it would under the general revenue sharing formula.
The amusing thing is that some of the States will not get anything.
Mr. McGEE. Mr. President, will the Senator yield 20 seconds?
Mr. LONG. Yes.
Mr. McGEE. If Wyoming gets 12 times as much under the existing revenue sharing formula, would it be a stroke of statesmanship if I took that position?
Mr. LONG. It would be a stroke of statesmanship for the Senator from Wyoming to say that on a needs basis Wyoming needs its share, and it is entitled to 12 times as much as it gets under this amendment.
Look at poor little Alaska, small in population terms. This amendment works on the theory that excess unemployment is the unemployment that occurs after a certain date. So here is Alaska, with one of the highest levels of unemployment in America, and they get less than they would get under the revenue sharing formula. As a matter of fact, Alaska had some of the highest unemployment in America to begin with, so they get no credit for that.
Alaska had base period unemployment of 9 percent. So they only get credit for an additional 2.8 percent, which is the difference between its base period rate and its current rate of 11.8 percent unemployed. So Alaska does worse than it would under revenue sharing.
The same would be true of West Virginia. They would get half as much as they would get under revenue sharing, and they have got 8.3 percent unemployed. They start out with base period unemployment of 6.1 percent, and 2.2 percent is added to that. Since their unemployment predated the period when the recession became severe, West Virginia does not get credit for that.
Now, the formula cannot begin to tell you what all the little communities are going to get. Why not? They cannot tell you what the counties are going to get, what the small towns are going to get. Why not? Because this is a big city mayor bill, and those people figured this thing out in a way that helps each one to meet their problems. I do not blame them. If I were a big city mayor that is what I would do.
Mr. President, if we are going to pass a major revenue sharing bill, we ought to be in position to do what we did with the Finance Committee bill, to tell everybody from Podunk to New York City how much they are going to get, including those little counties that a lot of people are completely unaware of in the Senate.
Mr. President, this matter is one that should be on a revenue sharing bill. It should be studied by the proper committee. These figures ought to be run through a computer, just like we do with the revenue sharing bill, so that you can compare county by county, city by city, parish by parish what they get and what the justification for it is, and we should not have such blind spots in it, such as that a State that has the highest unemployment of all does worse than a State with a lower rate of unemployment. In other words, we should not discount the fact that a lot of people are already out of work.
Mr. President, it is said this amendment would have very little budgetary impact because $2 billion has been budgeted for temporary recovery programs.
Well; Mr. President, that refers to public service jobs programs. That refers to other programs, where the objective is more jobs.
Mr. MUSKIE. Mr. President, will the Senator yield at that point?
Mr. LONG. Yes.
Mr. MUSKIE. May I point out to the Senator if he will examine the report on the first budget resolution that $2 billion is allocated for public works and for other anti-recession assistance to State and local governments.
Mr. LONG. Well, it says additional temporary recovery programs, and I do not think anybody had this bill in mind when they put that language in there. We voted on it.
Mr. MUSKIE. If the Senator will yield, Mr. President, that was precisely the bill that was discussed in conference. If the Senator has not examined the transcript of the conference he ought not to presume what was said. This is precisely the bill that was envisioned by the language–
Mr. LONG. Well, I was not–
Mr. MUSKIE. – by the resolution.
The PRESIDING OFFICER. The Senator's time has elapsed.
Mr. LONG. Mr. President, will the Senator yield 1 more minute?
Mr. MONTOYA. I yield 1 more minute.
Mr. LONG. I was not in the conference, but I am a United States Senator, I was here, and I am familiar with the fact that I heard very little about this bill except in vague general terms, and I am still not hearing anything about it except in vague general terms. Nobody can tell me how much Winnfield, Louisiana, will get out of this bill.
Mr. HUMPHREY. Will the Senator yield?
Mr. LONG. Yes.
Mr. HUMPHREY. The Senator will find out that all he needs to know is that in any community that has 6 percent or more unemployment will share in this bill. The reason we do not have information on Winnfield, La., is that as of yet there is no statistical evidence gathered. That does not mean the Governor cannot allocate under the formula in this bill.
May I also say that the fact the Senator had not heard about it does not mean it has not been discussed. As a matter of fact, the main witness for the bill was the mayor of New Orleans.
The PRESIDING OFFICER. The time has expired.
The Senator from New Mexico.
Mr. MONTOYA. Mr. President, I yield myself 1 more minute so I can ask the Senator from Louisiana a question.
I would like to elicit from the Senator from Louisiana how much the total authorization for revenue sharing is and when does it expire, is it not $30 billion?
Mr. LONG. It is about $6 billion a year. It is about a $30 billion program, and the program proposed in this amendment, in my judgment, should be considered in connection with revenue sharing; which is what this is.
Mr. MONTOYA. Another question, to follow up. Under the new revenue sharing bill which has been submitted, or will be submitted by the administration, is it not contemplated that for another 5-year period Congress will be asked to authorize and appropriate not $30 billion, as it has for the previous four and the current fiscal year, but $39 billion. Is that correct?
Mr. LONG. That is my understanding. It is a very large bill.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. BENTSEN. Will the Senator from New Mexico yield for an unanimous consent request?
Mr. MONTOYA. Yes.
Mr. BENTSEN. Mr. President, I ask unanimous consent that a member of my staff, William Buechner, be granted privilege of the floor during this debate.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MUSKIE. Mr. President, what is the time situation?
The PRESIDING OFFICER. The Senator from Maine has 13 minutes, the manager of the bill (Mr. MONTOYA) has 10 minutes remaining.
Mr. MUSKIE. I promised to yield the floor, but some points have been raised in the debate I ought to answer. Could I satisfy my friends with 2 minutes?
Mr. JAVITS. Three minutes, if the Senator will yield.
Mr. BUCKLEY. May I have 3 minutes, also, Mr. President?
Mr. MUSKIE. All right, let us try it. Three minutes to the senior Senator from New York.