February 7, 1975
Page 2806
SENATE RESOLUTION 70 – A RESOLUTION DISAPPROVING THE PROPOSED DEFERRAL OF BUDGET AUTHORITY
(Referred to the Committee on Appropriations, the Committee on the Budget, and the Committee on Public Works.)
Mr. MUSKIE (for himself, Mr. RANDOLPH, Mr. BURDICK. Mr. CANNON, Mr. GRAVEL, Mr. MAGNUSON, Mr. MONTOYA, Mr. MOSS, Mr. WILLIAMS, Mr. ROBERT C. BYRD, Mr. CULVER, and Mr. GARY W. HART) submitted the following resolution:
S. RES. 70
Resolved, That the Senate disapproves the proposed deferral of budget authority for Water Program Operations Construction Grants, which deferral (D75-9) was set forth in the special message transmitted by the President to the Congress on September 20, 1974, under Section 1013 of the Impoundment Control Act of 1974.
Mr. MUSKIE. Mr. President, in deferral No. D75-9, dated September 20, 1974, President Ford proposed to defer the obligation of $9 billion in clean water funds – a major part of the program to restore America's once beautiful lakes and streams.
The Congress authorized $18 billion for the fiscal years 1973-1975 under title II of the Water Pollution Control Act Amendments of 1972 to provide grants for the construction of municipal waste water treatment works. When we wrote the law in 1972, the cost of accomplishing this objective was estimated to be $25 billion. Current estimates of the minimum facilities needs are in excess of $60 billion. The Environmental Protection Agency is authorized by the act to allot the funds to the States in accordance with a formula based on the "needs" for such facilities. Grants are then made to municipalities for the construction of the waste treatment facilities. The Federal share of these construction projects is set at 75 percent.
The Congress authorized $18 billion for the program in 1972. However, only $9 billion had been allocated for fiscal years 1973, 1974, 1975.
On January 24, 1975, the President authorized release of $4 billion of the total, leaving $5 billion in deferral status. This $5 billion could be putting Americans to work; $5 billion to give Americans the quality environment they have asked for; $5 billion to stimulate a sagging construction. industry; $5 billion for a meaningful, productive program.
This deferral should be immediately disapproved by the Senate; I am today introducing the necessary resolution and ask for early Senate action.
While this withholding of funds to fight inflation was occurring the economy started a downward turn. A recessionary cycle began. High unemployment has developed as a result of the downturn in our economy. Unemployment in December was 7.1 percent which means that nearly 6 million workers are currently out of work. A large part of this unemployment – 1½ percent – is in the construction industry. This means that approximately 900,000 workers or 15 percent of construction employment is currently out of work. Mr. President, if the administration had not impounded these waste water treatment construction funds, many projects would be under way now which could be providing employment for construction workers.
Russell Train, Administrator of the Environmental Protection Agency, in recent testimony before the Environmental Pollution Subcommittee of the Senate Public Works Committee said,
We estimate that the program provided over 40,000 on-site jobs and more than that number of off-site jobs last fiscal year (1974).
This figure represents jobs on only those projects which are actually under construction and is not nearly reflective of what the obligation of the entire $18 billion – $13 billion presently available for allotment and $5 billion currently deferred – could accomplish. It is estimated by the Bureau of Labor Statistics that each $1 billion of contract construction for waste treatment plants creates 22,000 on-site jobs. Thus, allotment and obligation of the $14 billion available would create 310,000 on-site new construction jobs and nearly double that number for off-site jobs and jobs in other industries.
Mr. President, almost a quarter of a million Americans could be employed in worthwhile jobs – jobs helping to meet an important national objective. Americans want clean water – they have amply demonstrated it in countless local elections throughout the last several years. They want meaningful employment – make-work jobs should only be the very last resort. Release of these impounded funds provides both opportunities.
The impact of impoundment was characterized in a recent GAO report which stated:
The President's impoundment could seriously hamper achieving the goal of eliminating discharge of pollutants into navigable waters by 1985 once administrative and legislative requirements are met.
This deferral must therefore be disapproved for two reasons:
First. Delay in funding seriously hampers the national goal of elimination of discharge of pollutants into navigable waters by 1985 and,
Second. Job opportunities are unnecessarily curtailed in a period of rising unemployment.
While the Supreme Court considers the legality of Presidential impoundments, we must move now to release these funds under the authority of section 1013(b) of the Impoundment Control Act of 1974, if we are to effectively halt the current economic recession.
Some would argue that the obligational process is too slow for waste treatment construction programs to have any substantial effect on the unemployment situation. I do not believe this is necessarily correct. EPA has indicated in recent testimony that they are attempting to speed up the obligation process through administrative action such as the budget request for 172 new positions for construction grant administration, State certification of compliance with procedural requirements, and elimination of as much redtape as possible. Any increase in obligation rate will help the employment situation and that is what is needed at this time.
It has been argued that EPA can not spend the money any faster than they are – how will they know unless they try it? There certainly are countless worthy projects all across the country just waiting for Federal funding so they can begin. The States are constantly crying out for more Federal construction grant funds.
The President missed the point in his state of the Union message. There is not a thing in the budget that refers to the need to create jobs to deal with this 7 to 8 percent unemployment that the budget projects for the next 4 years, not a word.
The President should have said, "Look, we need to create some jobs. There is $9 billion of impounded funds for waste treatment plants, we are going to put that to work as fast as we can do it and I am going to release all of it."
If, as a practical matter, there is a limit to the pace at which it can be obligated, this will emerge. But the mere fact of announcing the release would have the effect of stimulating the construction industries, stimulating local governments across the country in order to appreciate their efforts. I believe it could have a very beneficial psychological impact upon the mood of the country.
This is a way to get people to do useful, lasting work. I have talked to municipal officials about public service employment. There are limits to that. There are limits beyond which you are only creating leaf-raking jobs, and at very high pay by comparison to the leaf- raking jobs of the depression of the 1930's. The public by and large would accept this $5 billion for sewage treatment plant construction. They would accept it enthusiastically.
The other day I was up in the town in which I was born. The business district is on an island in the middle of the river and as I went across the bridge onto the island, I was confronted by a big concrete breakwater – it had been built after the floods of the 1930's to protect the island. Written across the front of it, etched in the permanence of the concrete, was "WPA 1936". Now there is a public works project, produced with public money, supporting public jobs, built in 1936 – it still gives value to the citizens of my hometown. They see it every day. They understand it. They welcome it. They support that kind of spending. The kind of spending we are asking for today.
Mr. President, we have given the American people bad economic news for a long time; it is time we did something positive. The Senate must reject this deferral.
Mr. RANDOLPH. Mr. President, the Federal Water Pollution Control Act Amendments of 1972 committed this country to an ambitious program to end the contamination of our waters. That measure authorized the obligation of $18 billion in Federal funds to help communities build waste treatment facilities. Regrettably, the effectiveness of this program has been hampered by the impoundment of part of that money by the executive branch.
In deferral No. D75-9, dated September 23, 1974, President Ford proposed to defer the obligation of $9 billion in contract authority to finance the construction of waste treatment plants under the Federal Water Pollution Control Act Amendments of 1972 – Public Law 92-500.
On January 24, 1975, the President announced in a letter to the EPA Administrator his decision to release for allotment $4 billion of the $9 billion he had proposed in September be deferred. In so doing, he said that:
The Administrator should take aggressive steps to assure that the funds are used efficiently.
But the deferral is still pending before the Congress, minus the $4 billion. I propose that these funds be released for obligation into our sick economy as soon as is practicable.
Unemployment in the construction industry, seasonally adjusted, at the end of December was 15 percent, more than twice the national average. When the deferral message was sent up, the President made his case on fighting inflation. Today his more important priority, if I understand his recent words correctly, is fighting recession.
The President now has before us in effect a deferral request for the remaining $5 billion. The question is: Why should the President withhold this duly authorized money from the benefits it will bring to the economy? Inflation is no longer a valid reason. In fighting recession we need to put the unemployed to work and to stimulate the economy. These $5 billion would be money well placed to accomplish those purposes.
First, the sector of our economy that has consistently suffered severely is the construction industry. Beside high unemployment, the ravages of inflation were particularly severe – fantastic price increases in materials, shortages, supply delivery crisis, high priced and scarce capital and more – leading to bankruptcies and diminished bidding activity.
Engineering-News Record in its January forecast on construction sees a downturn in constant dollar volume for 1975 and 1976. Physical volume will be down, competition will be keener, and profit margins will be slim.
The Bureau of Labor Statistics has estimated that sewer works construction can employ onsite and offsite 47,680 persons per billion dollars. At the same time, the same billion dollars buys materials and equipment providing considerable stimulation to the economy. Thus using BLS estimates, the additional $5 billion in question would generate some 238,000 jobs.
Mr. President, it will be said that the Environmental Protection Agency cannot practically move the money out that fast – cannot obligate it – if even it were made available.
Suppose those practical limits exist. What harm does it do to release it? One thing it will do is create a blessed psychological impact that would surely bolster our sagging confidence in the economy today. But no one can say for certain that with extra effort the money cannot be spent.
The jobs would go more to the plain, everyday laborer on sewer lines and waste treatment plants than other categories of workers. Operating engineers make up a substantial part of the workforce needed, pipelayers, cement finishers, bricklayers, and plumbers are others. A significant category of jobs also is made up of administrative, clerical, technical, and professional people.
While I do not waiver in my support for a strong public service jobs program, I see in the release of these withheld EPA funds not only a sure method to create thousands of needed jobs and a way to stimulate the economy, but I see also a program that builds an enduring facility that a community will have for a long time to come.
What we ask is that this $5 billion be immediately allotted to the States; that all haste be made to move the money to obligation and get it percolating in the economy. But most of all, to hurry and put idle men and women to work.
Mr. President, I am sorry that the President did not address himself to the creation of needed jobs in his state of the Union message. The budget he has submitted does not address the question of jobs. Yet, the Economic Report says, dolefully, that we can expect high unemployment for the next few years. That may be candor, but it does not build much confidence.
I recommend that we deny the deferral of these funds, and press the President to allot them immediately.
Mr. President, the ranking member of the Public Works Committee, Senator BAKER, is absent from the Chamber but has asked that his written remarks be included at this point in the RECORD.
The Senator from Tennessee has given the issue his usual careful attention and has concluded that he cannot join us in introducing these resolutions. He has indicated, however, that he intends to follow developments carefully and could, perhaps, support selected increases in budget levels where reduced unemployment appears likely to result.
I ask unanimous consent that Senator BAKER'S statement appear at this point in the RECORD.
There being no objection, the statement was ordered to be printed in the RECORD, as follows:
STATEMENT BY SENATOR BAKER
Mr. President, I regret that I cannot support my good friends, the distinguished Senators from West Virginia and Maine, in the introduction of resolutions disapproving deferral of funds for sewage treatment construction grants and highways.
The effect of these resolutions is to make immediately available for obligation almost $20 billion not currently in the budget for 1975. Estimates are that we will experience a Federal deficit of $32 billion in fiscal 1975 without any additional release of funds.
It is, of course, true that the whole $20 billion will not be spent before the end of this fiscal year, June 30, 1975. But the availability of these funds will put pressure on the State to obligate them as quickly as possible.
There is no guarantee or indeed, great likelihood, that the funds obligated will be for projects in areas where there is high unemployment. In fact, it is likely that some of these funds may divert labor from other worthwhile projects to projects for which Federal funds are suddenly – and only temporarily – available.
I am aware of the need to stimulate employment. I am aware of the need to move ahead with projects to clean up the nation's waters and provide safe and efficient transportation. I am not opposed to carefully planned expenditure of funds for these purposes, even if such expenditures were to exceed the Administration's present budget plans.
But voting to release $20 billion with little control over where the money is spent would aggravate inflation without necessarily buying any decrease in unemployment.
At the end of last year Congress passed, as part of the Emergency Jobs and Unemployment Assistance Act of 1974, the Job Opportunities Program, which requires Federal agencies to review the programs they administer and recommend those which could be expanded to provide jobs for the unemployed.
The results of these evaluations could form the basis for assessment of where expenditures logically should be increased. Once information of this nature is available, I might very well join with others to propose selective increases in the President's budget levels.
We should not act injudiciously. Looking a little ahead we see the President's budget predictions of a $52 billion deficit for fiscal 1976. Even this level requires that there be belt-tightening in Federal programs. The projected deficit for 1976 exceeds any in peacetime history and is surpassed only by the deficit incurred at the peak of our war effort in 1943.
Where there is little assurance that a massive increase in the availability of Federal funds will significantly improve the unemployment picture, I must oppose potential escalation in an already staggering deficit.