November 8, 1975
Page 34734
INTERNATIONAL DEVELOPMENT AND FOOD ASSISTANCE ACT OF 1975
The Senate continued with the consideration of the bill (H.R. 9005) to authorize assistance for disaster relief and rehabilitation, to provide for overseas distribution and production of agricultural commodities, to amend the Foreign Assistance Act of 1961, and for other purposes.
Mr. MANSFIELD. I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The second assistant legislative clerk proceeded to call the roll.
Mr. GRIFFIN. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. GRIFFIN. Mr. President, I ask unanimous consent that Robert Turner, of my staff, have the privilege of the floor during the consideration of this bill and votes thereon.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. GRIFFIN. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The second assistant legislative clerk proceeded to call the roll.
Mr. INOUYE. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
The PRESIDING OFFICER (Mr. BEALL). Without objection, it is so ordered.
Mr. INOUYE. Mr. President, I ask unanimous consent to withdraw my point of order.
The PRESIDING OFFICER. Does the Senator ask unanimous consent that his point of order be withdrawn?
Mr. INOUYE. I do.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. HUMPHREY. Mr. President, in light of the discussion which we have had, both here and in the colloquy, as well as our private discussions, I now move, on page 23, on line 6, after the words, "to be," to strike the words "made available," and insert in lieu thereof the word "appropriated." The line will then read: "and after July 1, 1975, are authorized to be appropriated" for each of the fiscal years, and so on.
The PRESIDING OFFICER. The question is on agreeing to the amendment.
The amendment was agreed to.
Mr. HUMPHREY. Mr. President, on page 5, on line 17, I move to strike the words "made available," and insert the word "appropriated."
On line 21 into line 22, I move to strike the words "from the funds made available pursuant to section 103(e) of this act,". The language will then read, on line 17, "There are authorized to be appropriated"; on lines 21 and 22, the language will read "be necessary for fiscal year 1977, which amounts are authorized to remain available until expended."
The PRESIDING OFFICER. The question is on agreeing to the amendment.
Mr. MUSKIE. Mr. President, will the Senator yield?
Mr. HUMPHREY. I yield.
Mr. MUSKIE. I would like to put this question: As I understand the bill, according to the floor manager, total authorizations were $1,325,000,000.
Mr. HUMPHREY. I believe that is the correct figure, yes.
Mr. MUSKIE. These reflow moneys were not reflected by that number. The effect of the Senator's amendment, then, is to increase that number by the amount of the reflow moneys.
Mr. HUMPHREY. No, only if they are appropriated.
Mr. MUSKIE. I know. But under the spending practices of the Government we have two kinds of commitments to spend: Budget authority and outlays. Now, actual appropriations will produce outlays, depending on the spend out rate.
Mr. HUMPHREY. The Senator is correct.
Mr. MUSKIE. But the total commitment is budget authority which has never been reflected by the reflow money in the budget documents or the other instruments in which we record the financial commitments of the Government.
By converting this to an appropriation it seems to me you are increasing the authorization beyond $1.325 billion by the amount of $353 million in fiscal 1976 and $403 million in fiscal 1977. In other words, you are eliminating the distinction between the authorization to spend the reflow and the authorization to spend from the Treasury.
Mr. HUMPHREY. Yes. In other words, for example, there would be an item here for the Sahel, one item of $50 million, as I recollect. Therefore, that would be an increased authorization.
Mr. MUSKIE. If my interpretation is correct, then, the effect of this amendment would put us over the budget authority target.
Mr. HUMPHREY. May I say to the Senator, according to the Senator's latest score card it would be $400 million below the projected outlays.
Mr. MUSKIE. On outlays, yes.
Mr. HUMPHREY. Yes.
Mr. MUSKIE. But at budget authority we are on target, $4.9 billion.
Mr. HUMPHREY. Right.
Mr. MUSKIE. On outlays we are under by $400 million.
Mr. HUMPHREY. $400 million.
Mr. MUSKIE. But that $4.9 billion does not reflect the $353 million in reflow of money. This cannot be recorded until the Appropriations Committee acts.
Mr. HUMPHREY. Correct.
Mr. MUSKIE. But reflow moneys have always been recorded in a different way. They show up in the outlay column, but not in the budget authority column. That is one of my objections to the use of reflow moneys in this way.
Mr. HUMPHREY. May I say to the Senator from Maine, of course, he makes a very valid point. I want to point out, however, that we do preserve the integrity of the appropriations process, which was one of the dangers that was involved in reflow money before.
Second, we will undoubtedly in the military assistance bill, which will be before us very shortly, make rather substantial reductions. That is at least the way the current view of the committee seems to be.
Mr. MUSKIE. If we want to make this whole process operate effectively, we ought to eliminate the reflow mechanism and eliminate any possibility of confusion.
I would remind Senators that we have the new security assistance request from the administration; there is not much room here. We are going to have to breach the budget authority target to accommodate the security supporting aid package, most of which is designated for the Middle East confrontation countries. Anything we can save here will be all to the good when we reach the point where we have to fund those Middle East requests that the administration sent over last week.
Mr. HUMPHREY. I am sure the Senate is going to have to make some reevaluations of some budget targets with the budget request of the administration as to the Middle East.
Mr. MUSKIE. That is why I am trying to squeeze a little money out of this.
Mr. HUMPHREY. No. 2, the Committee on Appropriations is going to squeeze a little out of the assistance and grant money from the administration's request, there is not a shadow of any doubt in my mind. We will be well within any budget target I am sure, the Committee on the Budget lays down before us on foreign aid matters, no doubt about it.
Might I also say that the amendment we adopted on page 5, lines 21 through 22, provides a specific authorization for $50 million that would otherwise be taken from reflow funds.
Mr. MUSKIE. What is left—
Mr. HUMPHREY. It makes a difference of $50 million, I should say.
Mr. MUSKIE. What is left is $353 million.
Mr. HUMPHREY. I believe that is about correct.
The Senator means the new authorizations, with the reflow funds?
Mr. MUSKIE. That is right. The total amount.
Mr. HUMPHREY. About $353 million.
Mr. MUSKIE. Added to $1.3 billion. In other words, if this were treated—
Mr. HUMPHREY. May I say, Senator,if it were all used—
Mr. MUSKIE. No, but this is an authorization, of course. The total bill is subject to the appropriations process.
Mr. HUMPHREY. Of course.
Mr. MUSKIE. And the distinguished Senator from Hawaii will influence that. But, nevertheless, the total amount involved now, given the Senator's amendment, should be clearly reflected on the face of the bill as $1.325 billion plus $353 million, if Senators want to know exactly how much money is being committed.
Mr. HUMPHREY. May I say the difference is we are just listing out exactly what is in the bill rather than having the confusion that was before with the reflow not being accounted for.
Mr. MUSKIE. Will the Senator answer this question for me: If, in fact, the intent of this amendment is to eliminate the confusion between the use of reflow money and the use of Treasury money directly, what is wrong with going the whole way and simply using the authorization of Treasury money so that there is no confusion?
Mr. HUMPHREY. An amendment will be offered by the Senator from Idaho (Mr. CHURCH) on this very item. But we have not in the committee report, may I say, attempted to disguise this at all. The committee in its report says:
The committee estimates that the cost of implementing this bill will be approximately $1,678,000,000 for FY 1976.
And we point out this, as compared to what you might call the budget items, the different things in the reflow, that is, in terms of authorization of use of reflows.
The use of reflows authorized by this bill are subject to the appropriation process. They are not automatically available simply because their use is authorized.
Mr. MUSKIE. I compliment the Senator on that, but that would be subject to the appropriation process in any event. It has always been subject to the appropriations process.
Mr. HUMPHREY. I have said that, but there was some doubt about it here.
Mr. MUSKIE. Where the confusion arises is not on that point. The confusion arises out of the fact that when the use of these funds is authorized, the amount of these funds is never included in any totals disclosing the obligational authority which has been approved by the Congress.
Mr. HUMPHREY. Might I say—
Mr. MUSKIE. It never appears in that column, and as a result there is a tendency to confuse the question, whether or not this is subject to the appropriations process.
Mr. HUMPHREY. We have eliminated any confusion about the appropriation process.
Mr. MUSKIE. I do not think we will have changed the bookkeeping on it.
Mr. HUMPHREY. Second, the committee report itself stated what the total cost would be of the bill.
Mr. MUSKIE. Will not have changed the bookkeeping on it.
Mr. HUMPHREY. That is because the bookkeeping is not good then.
Mr. MUSKIE. I do not create bookkeeping.
Mr. HUMPHREY. May I say that there was no attempt on the part of the committee to be deceptive on the part of the bookkeeping.
Mr. MUSKIE. Would the Senator then come back to my question. If this is as straightforward in the Senator's own mind, using appropriations directly, why bother with the reflow mechanism at all? Why not just add this amount to the authorization?
Mr. HUMPHREY. It is agreeable to me.
Mr. MUSKIE. And then make it all identical.
Mr. HUMPHREY. I am perfectly agreeable. I have no objection to that at all, if that is what the desire is.
The point is that it is a reflow from funds that have been loaned out. It is not as if someone is being denied the revenue of those funds. They come into the Treasury and they are subject then to the appropriation process.
What the Senator from Maine is suggesting is to eliminate the reflows, put the items in just as they are and add them into the budget authority, which would give a clear budgetary picture of the actual amount of authorized funds.
Mr. MUSKIE. Let me point out what happens if one does that.
Mr. CHURCH addressed the Chair.
Mr. MUSKIE. That response comes out of the Senator's generous heart.
With respect to the bookkeeping involved, the President's request, covering this bill, is $1,293,000,000.
Mr. HUMPHREY. But, wait a minute, he had—
Mr. MUSKIE. If we add and do what I suggest on reflows—
Mr. HUMPHREY. We have included in this bill items which the administration has asked us to include for certain other purposes which were not in the original budget request.
Mr. MUSKIE. But not the reflow money.
Mr. HUMPHREY. No.
Mr. MUSKIE. His request does not cover the reflow money.
Mr. HUMPHREY. No; but the President's request covering the reflow
Mr. MUSKIE. The $1,293,000,000 would have to be increased by the $353 million which puts us over the budget target.
Mr. CASE. Will the Senator permit an intervention?
Mr. MUSKIE. Yes.
Mr. CASE. I think that the Senator from Maine will have to recognize that in order to accomplish this budget tightening operation, that is to say, insuring that the Appropriations Committee has a veto or — on the appropriation of any of this money so made available here, that we do have to raise the budget ceiling by the amount we are putting in here,and that that is not a breach of the ceiling. It is a recognition that we are bringing within the budget process expenditures which, really, as far as availability went were not, and, therefore, he should not feel that this is breaching the ceiling in any sense.
The ceiling should be raised automatically by this action to the extent of these reflows.
Mr. MUSKIE. It is a breach of the ceiling because the law with respect to reflows did not permit their use for this purpose when the budget ceilings were set. The Senate, of course, can vote, as it has in the past, to make them available for that purpose.
The law covered by the budget ceilings was set on the assumption that the numbers of 1.3 billion was the amount that we were talking about for authorization in this field.
If that authorization number is going to be increased, either using reflows in the way they were before the law was changed or converting reflows to regular appropriation authorizations, the total amount then is above what the concurrent budget resolution assumed.
Mr. CASE. I would suggest to the Senator that what we did in the Foreign Relations Committee in respect to this matter when we made our estimates, which were given to the Senator's committee for the purpose of arriving at their final figure, was to exclude this because it was expected that this amount would be outside the budgetary authority and in addition to it, and if we are going to change the rules on that matter then we ought to change them openly and frankly.
Mr. MUSKIE. The law at that time did not permit the use of reflows.
Did the letter from the Foreign Relations Committee explicitly recommend changing the law on reflows?
Mr. HUMPHREY. We will get the letter for the Senator. I will have the chairman (Mr. SPARKMAN) here, but let us see what it says. I believe the letter did indicate the use of reflows. We will get the letter here for the Senator in a minute.
Mr. MUSKIE. We will check it out, but our recollection is that no mention was made of reflows in Chairman SPARKMAN's letter to me of March with regard to the President's budget request.
Mr. CHURCH. Will the Senator yield to me just to clarify something?
Mr. HUMPHREY. I am just being told by staff that our recent response to the committee did tell the Budget Committee of the use of reflows, the projected use of reflows.
Mr. CHURCH. Mr. President, will the Senator yield to me?
Mr. HUMPHREY. Yes.
Mr. CHURCH. Because I do have a problem to get back to a committee, but I would like to speak for a moment on this.
Mr. HUMPHREY. I yield to the Senator.
Mr. CHURCH. I appreciate the generosity of the Senator.
This has been an old fight. We have been trying to stop backdoor financing on this program for a long, long time. I thought we had it stopped last year finally when we adopted an amendment that I sponsored which finally required that repayments from foreign governments go back to the Federal Treasury and not be recycled once more into the foreign aid program.
When we did that, the distinguished Senator from Minnesota applauded it just last year, when the amendment was adopted. He said in connection with it:
This is an extremely important amendment and a distinct contribution to this legislation. I do believe that Congress should have control over the recycling of the funds and I believe that the Committee on Appropriations should be the authority and the power to decide the amount of the funds to be appropriated, not to be just backdoor financing. Therefore, as the manager of the bill, having consulted with our colleagues here on the other side of the aisle, we are more than pleased to accept it and I want to thank the Senator from Idaho for his amendment.
When that amendment was finally passed, I thought we had put an end, once and for all, to backdoor financing, but at the next opportunity a bill brought to the floor of the Senate has a footnote in it which has $353 million added to the face of the bill this year and $403 million next year.
That is footnote foreign aid and I think it must break all records in the history of footnotes.
Mr. HUMPHREY. Now, wait a minute—
Mr. CHURCH. In the way of cost. Let me say this—
Mr. HUMPHREY. If the Senator will yield, because after all there was no — it is not only a footnote, on page 15, in large print, it is not a footnote, so I want the Senator to know it is in two places.
I do not have any objection to what the Senator is talking about.
Mr. CHURCH. I am saying that we tried to put a stop to backdoor financing and it is back in this bill once more. Every time one turns his head, it reappears.
Furthermore, nobody asked for this extra money. The committee comes in with a report that gives the administration every dime and more that they want for foreign aid and this is just one-sixth of the foreign aid package this year.
Nobody asked for this money. It was put in by the Foreign Relations Committee by footnote or otherwise, and it increases the administration's requests for economic assistance by 27 percent.
If that is not budget busting, I do not know what budget busting is.
If one wants to do that, remember, this is just the first of a series of bills. This bill does not involve Israel, it does not involve the Middle East, it does not involve all the additional payments we are going to be asked to take care of.
This is just the beginning, and by way of footnote in the beginning we are asked to increase the administration's request 27 percent.
If we start that way, we have got no chance to keep the budget. It is going to be blown sky high and that is why I am not very satisfied to be content once more to say, "Strike the backdoor method because it is wrong." We tried to do it before and finally thought we had.
Strike the whole provision. We need that $353 million coming back to the Treasury this year.
Instead of backdooring it, let us open door it and, let it flow back into the coffers of the Treasury.
And we need the $403 million next year. The last thing we need is to increase the administration's request by 27 percent on the first foreign aid bill we have before us, equal to about one-sixth of the total.
I would hope that in addition to correcting the footnote aspect the Senate would adopt my amendment striking this additional three-quarters of a billion dollars out of the bill for the next 2-year period.
Mr. HUMPHREY. Mr. President, the Senator from Idaho is a very persuasive man. No. 1, I do not believe in backdoor financing. That is why I believe in the Appropriations Committee process. There is a big argument as to whether or not the inflow of funds are backdoor financing when they go through the Appropriations Committee process. I say that is not. Every Senator knows what he is voting for. It is not as if somehow or another they are just shoved along with our eyes closed and we do not know what we are doing. It is simply that insofar as the budget outlays were concerned, the out of reflow was not put in the budget item but is in the outlays which are laid down and appropriated by the Congress of the United States — appropriated. It is not something that is just handed along as if somebody is a good Samaritan or the national social worker. Let us get that cleared up.
As far as the amendment of the Senator from Idaho, I am perfectly willing to vote for it again much as I did before.
The second point I make is that the administration has asked, or plans to ask, for $200 million for the International Agricultural Development Fund, a proposal which came up after the budget had been presented to us. The additional$50 million for the Sahel is an item that is desperately needed and was put in out of consideration of the facts of life West Africa.
I might also add that the very tight fisted other body of the Congress passed this bill with a larger amount of money than we have in it for the Senate, considerably larger, as a matter of fact. We reduced the House bill by a considerable sum of money.
Mr. HARRY F. BYRD, JR. Will the Senator yield?
Mr. HUMPHREY. I want to say that no one is trying to disguise what the facts are.
On page 13 of the committee report under the cost estimates this committee tells the Senate what this bill has involved in it.
Mr. HARRY F. BYRD, JR. Will the Senator yield?
Mr. HUMPHREY. Furthermore, I have said to the chairman of the Senate Appropriations Subcommittee on Foreign Assistance that a line item on items that relate to the administrative expenses is acceptable and desirable, and he will offer such an amendment.
The Senator from Idaho was not here earlier when we said that we were expecting his amendment. We knew that we would vote on it one way or another. What we were attempting to do was to clarify language which is presently in this bill and to make it very clear that we are not permitting what we call the reflows to be used exclusive of the appropriations process. We already adopted one amendment on page 23 of the bill. An amendment I just offered on page 5 I believe would be helpful. Then we can come to the amendment of the Senator from Idaho (Mr. CHURCH) on the whole subject of reflows. We will have it in proper sequence.
I yield to the Senator from Virginia.
Mr. HARRY F. BYRD, JR. On page 1 of the bill it says:
The principal purpose of the bill is to authorize appropriations totaling $1,325 million for fiscal year 1976.
Mr. HUMPHREY. That is correct.
Mr. HARRY F. BYRD, JR. As I understand it, the actual authorization will not be that figure, but it will be $1,678 million.
Mr. HUMPHREY. It will be, with the reflows which we have indicated.
Let me just say nobody is trying to skin anybody and nobody is trying to deceive anybody. We have been following this procedure for many years. The other body voted to continue the practice. We have always felt that the use of the reflows was subject to the authorization process. This year I said, "Let us remove any ambiguity. My amendment makes that clear."
We are going to go up the hill and down the hill because there need not be this problem.
Mr. HARRY F. BYRD, JR. I do not agree with that.
Mr. HUMPHREY. The problem is the one which has been raised by the Senator from Idaho. We can reconcile it quickly. As far as the reflow funds are concerned, the Senator can offer his amendment again. My only point is I hope we will authorize the $200 million for the International Agricultural Development Fund, which is desperately needed.
Just the other day 66 nations agreed on an international food aid, and of that amount a similar amount of $200 million will be contributed by the Common Market countries. Fifty percent of the total package will be contributed by the OPEC countries. Two hundred million dollars will be contributed by the United States. That can come out of reflow funds or it can be a separate item. It is all the Government's money. It all comes into the U.S. Treasury one way or another.
We make something so complicated that is really not that complicated. It is U.S. Government money, the taxpayers' money. The difference is that there is a certain amount of money coming back from the foreign aid loans. Of that amount of money that is coming into the Treasury under foreign aid loans, there is an authorization in this bill that a portion of that money be used for the International Agricultural Development Fund; that another $50 million of it be used for the purposes of relief in West Africa, in the Sahel.
The Senator from Minnesota said:
I want to make sure the appropriations process works here because there is no requirement upon the Appropriations Committee to appropriate the amount that you authorize. You can authorize an amount and generally the appropriation is less.
The language of the bill as it came from committee might have had some doubts as to whether or not the appropriations process was to work its will.
It has always been my feeling that, of course, the appropriations process must work. Now the question is have we been deceptive? I say we have not been.
I repeat there is no law in the Senate that says we have to read only the first page of a report. As a matter of fact, it would be well for Members to read all of this report. If the Senators will read it all, they will see why this is a good bill.
On page 13 it gives the cost estimates and it says exactly what the cost estimates are. They are listed out there as $1,678,000,000. That amount of money, may I say, is not excessive.
Mr. HARRY F. BYRD, JR. Will the Senator yield?
Mr. HUMPHREY. Yes.
Mr. HARRY F. BYRD, JR. I believe the Senate has the right to assume that the figure on page 1 is the total figure.
Second, when the Senator from Minnesota reads from page 13 he read only part of it. It says:
The committee estimates that the cost of implementing this bill will be approximately
$1,678,000,000 for fiscal year 1976, plus amounts available from reimbursements and recoveries.
Mr. HUMPHREY. Yes; plus amounts "other than loan reflows which are included in this estimate" which we are talking about, loan reflows.
Mr. HARRY F. BYRD, JR. The point the Senator from Virginia would like to get clear is that the figure on page 1 is not the total authorization. It is actually $353 million more. Is that correct?
Mr. HUMPHREY. Might I say to the distinguished Senator from Virginia I believe the law requires the total cost estimate. That is why these paragraphs on page 13 are there.
Mr. HARRY F. BYRD, JR. I am just asking the Senator from Minnesota if he will confirm or deny that the total authorization is not what it says on page 1; that the total authorization being requested is $1,678 million, which is $353 million more than is on page 1. Is that correct or is it incorrect?
Mr. HUMPHREY. I would say to the Senator that the total amount of specific authorizations that we agreed to in the committee was $1,325 million. We did not know how much would be reused of the reflow funds. We have not tried to conceal. If it makes the Senator and the Senate feel any better, I like to be an accommodating man. The total amount is estimated at $1,678 million.
Mr. CASE. Mr. President, if the Senator will yield, I would like to make a minor comment on this matter.
What we said was that the principal purpose of the bill is to authorize these amounts. In other words, the bill authorizes to the extent of whatever legal authority is necessary the appropriation of the reflows, which is not unusual.
Mr. HUMPHREY. Which has happened repeatedly.
Mr. CASE. Which has been customary all along. The Senator from Minnesota, the Senator from Idaho (Mr. CHURCH) , and I have always felt that a single appropriation of everything would be desirable, no matter where the money comes from, and if anyone was misled by this, I certainly would want to accept my share of the responsibility in behalf of the committee. We are sorry about it.
Mr. HUMPHREY. Let me say that I am not going to apologize, because when we wrote this up, I asked the staff of the committee to put in the total cost of the bill.
Mr. CASE. And we have it here.
Mr. HUMPHREY. And we have it here,because the law required one thing in terms of the estimates. The total cost estimates are there. We are not trying to deceive anyone, and if anyone cannot read page 13 of the report, I would say he is not much interested in the legislation, it says:
The Committee estimates that the cost of implementing this bill will be approximately $1,678,000,000 for FY 1976, plus amounts available from reimbursements and recoveries (other than loan reflows which are included in this estimate). The estimated cost for FY 1977 is $1,881,300,000, including loan reflows but no other recoveries or carryover funds.
Because we do not know what they are.We have no way of knowing that, unless one has the gift of prophecy of an Ezekielor an Isaiah. How do we know what the recoveries or reimbursements are going to be? There is no way to know that.
Mr. HARRY F. BYRD, JR. Do I understand the Senator from Minnesota correctly to say that the total authorization being sought for fiscal 1976 is $1,678 million, and not $1,325 million?
Mr. HUMPHREY. In using the loan reflows, the Senator is correct.
Mr. HARRY F. BYRD, JR. That is the total loan authorization?
Mr. HUMPHREY. That is correct, using the reimbursement as reflows.
Mr. CASE. If the reflows were larger, the amount authorized would be larger.
Mr. HARRY F. BYRD, JR. Oh; then that makes it an open-ended proposition.
Mr. CASE. To the extent of the possible reflows.
Mr. HUMPHREY. No, it is one open-ended.
Mr. HARRY F. BYRD, JR. it is open-ended as far as possible reflows are concerned; the Senator from New Jersey just so stated.
Mr. HUMPHREY. It is not, because we put in language specifying how reflow funds can be used. We said, "You can use $200 million of the reflows for the agricultural development fund."
Mr. HARRY F. BYRD, JR. Well, do we put a cap on the appropriation of $1,678 million, or do we let the amount go abovethat, if the reflows exceed the estimate?
Mr. HUMPHREY. Will the Senator repeat that? I am sorry; I say respectfully I did not pay attention, and I am sorry.
Mr. HARRY F. BYRD, JR. Is it a firm ceiling of $1,678 million, or is that ceiling flexible, to be determined by the amount of reflows?
Mr. HUMPHREY. It is our judgment that the estimated cost is what we have said here, $1,678,000,000, but it is flexible in the sense that there can be more reflows.
Mr. HARRY F. BYRD, JR. So that is an open-ended proposition.
Mr. HUMPHREY. But the Senate Committee on Appropriations is not exactly Santa Claus twice a year. It could be less, depending on what the reflows are. However, we tried to specify in the language of the bill what the reflows would be used for. We indicated, for example, a total of $200 million of such reserves may be used only, and we listed it for this purpose. Then we listed another $50 million of the reflows for relief in West Africa and the Sahel. One of these items was suggested by the administration — which, by the way, will come up, as I understand, in an additional budget estimate — and the $50 million was felt necessary by the committee in the light of testimony we had received.
I offer my amendment on page 5, as previously described. Has that been adopted?
The PRESIDING OFFICER. It has not been adopted.
Mr. HUMPHREY. On page 5, line 17, "there are authorized to be appropriated" instead of "there is made available," and on lines 21 and 22, to strike out "from the funds made available pursuant to section 103(e) of this Act,".
Mr. MUSKIE. Mr. President, will the Senator yield at that point?
Mr. HUMPHREY. Yes.
Mr. MUSKIE. Just to make the colloquy we had earlier complete, I have checked the letter we received from Senator SPARKMAN last March on the subject of reflows, and the subject was not covered in that letter. It was covered in an October letter, reporting the action taken by the Foreign Relations Committee as reflected in this bill. The committee has not been able to identify that item in the letter of March 14, which, of course, formed the basis for the first current budget resolution.
Mr. HUMPHREY. May I say the bill had not come to us, as I understand, at the time of the letter we addressed to the Senator last March, as I recollect. So therefore those were, may I say, very flexible estimates.
Mr. MUSKIE. Let me recite what I understand to be the facts: First, reflows were not covered by the President's budget.
Mr. HUMPHREY. I believe that is correct.
Mr. MUSKIE. His budget was based on the existing law, which does not permit the use of reflows for this purpose.
Mr. HUMPHREY. That is correct.
Mr. MUSKIE. Second, the Committee on Foreign Relations, having the President's budget before it, did not include its letter to the Budget Committee the subject of the use of reflows this year.
Mr. HUMPHREY. Well, the President's budget, but not the Foreign Assistance Act—
Mr. MUSKIE. The Foreign Assistance Act, which was submitted by the agency, is the only place reflows is cited, and that document was not available to the Budget Committee during its first concurrent resolution mark-up.
Mr. HUMPHREY. That is correct.
Mr. MUSKIE. And that is the only place where this issue was raised for a possible modification of the law.
The point I wish to make, may I say to the Senator, is that the targets were set in the first concurrent resolution based upon the situation as it existed last May. If the result of the Senate's action is to change the law, and thus to increase budget authority or authorizations for appropriations, that needs to be taken into account.
The Senate, of course, can vote to breach the target at any time for a good reason, or a not so good a reason. The only point I am trying to make for the Record is that if we judge the use of reflows, as recommended to the Senate by the Committee on Foreign Relations now to be the equivalent of an appropriation or budget authority approved in the legislative process, the effect of it will be to raise the spending commitments above those assumed by the Budget Committee last spring.
I state that simply as a statement of fact. The Senator from Minnesota, as always, is being very forthcoming in his acceptance of that fact, and urging the Senate nevertheless to support what he believes to be a worthwhile program. But I think the Senator, in addition to his advocacy of the program, needs to take into account the fact that the acceptance of reflows for spending purposes can have the effect of passing the spending targets we adopted last spring. That is the clear and simple point I wish to make.
There is one other point I wish to make. That is that reflows represent returns to the Treasury of money that went out of the Treasury in the form of loans.
Mr. HUMPHREY. Correct.
Mr. MUSKIE. And this repaid loan money is going to be used for the purpose of giving grants. So not only are were spending the money, but we are converting the spending from the form of loans to the form of grants.
Mr. HUMPHREY. That is correct.
Let me say, first of all, that the Senate committee acted on a resolution adopted overwhelmingly by the House of Representatives, which also has a budget resolution. The bill passed the House under date of September 11. The House, I am sure, is also somewhat concerned about budget targets.
Mr. MUSKIE. Did the House include the reflows?
Mr. HUMPHREY. Oh, yes. This is the language of the House.
Second, I say that the Budget Committee has a global picture of foreign assistance, both economic and military. Those of us who have some responsibility here for looking at this global picture of military assistance and economic assistance, have different priorities than have been sent to us by the administration. For example, I happen to personally believe — and I have checked around with many members of our committee — that some of the requests for military assistance and military grant authority are excessive. I am sure that we will be well within the budget and I can assure the Senator we will be well within the target of the Budget Committee on overall global assistance, because we have a second bill coming down to us now from the administration, of approximately a little over $4½ billion, and we are going to have to excise that, and it is our judgment that in excising that we will make substantial changes in it and substantial reductions so that the overall budget figure, I believe, will be on track with the Committee on the Budget.
Mr. MUSKIE. I make this point insofar as the military assistance portion of the new security proposal is concerned. That comes under the national defense function. So cuts there, where we can use some cuts, will not be reflected in this foreign economic aid function which reflects only the supporting assistance and special requirements fund requests, and I suspect those may be more difficult to cut.
Mr. HUMPHREY. I realize how the Budget Committee acts because we have its scorecard report here. In the committee, as the Senator, who was on the committee, knows, we kept these two items literally working together in tandem side by side or had them all together in one bill. We have now separated them into two separate functions, so that we have nothing but the economic food assistance and humanitarian assistance in one package. We have the supporting assistance and the military assistance, military grant package in the second. It is our judgment that we will be well within it whatever targets the Budget Committee may set.
But I wish to be very frank with the Senator. We received the bill from the House. Actually the bill of the House of Representatives is much more generous than we are.
Mr. MUSKIE.That is sort of a reversal.
Mr. HUMPHREY. It is a reversal, I might add. They are generally substantially less than we. We took the language of the bill, and we worked on the subject matter. We revised some of the authorization figures that the House had. I believe our bill is $125 million less than theHouse bill. The House bill did have the reflow provision with language that is less precise than that which we are trying to work out. I believe that we will have another amendment offered by the Senator from Hawaii that will put a line item in on what we call administrative expenses which will again tighten up on the structural organization of the Foreign Assistance Act.
It is my feeling that the Senate budget storekeeping by the Congressional Budget Office does not find us particularly out of line here in terms of the current status. It says under target in outlays by $400 million.
Mr. MUSKIE. That is correct. That is correct. But if the reflow of authorizations stays in the bill—
Mr. HUMPHREY. It will still be under it.
Mr. MUSKIE. No. If it is spent, that will reduce the $400 million margin that we have there by whatever amount out of the reflow which is appropriated and spent. I do not know what it will be; it depends on the programs.
Mr. HUMPHREY. Yes.
Mr. MUSKIE. In other words, that $400 million does not reflect on the other side.
Mr. HUMPHREY. I say, if the Senator will note, that it takes account of the House action, and the House passed this bill as with the reflows in it, if I am not mistaken. The Senator knows this book better than I.
Mr. MUSKIE. This does not include House action which increases the President's request.
Mr. HUMPHREY. This only includes Senate action.
Mr. MUSKIE. Yes, but only when spending requests are reported in the Senate or finally enacted.
Mr. HUMPHREY. It says total category 2C taken in account of House action to date. That is on page 17.
Mr. MUSKIE. I shall read from the Senate Scorekeeping Report which says the President's spending requests not yet reported in the Senate are "adjusted, where applicable, to reflect — completed congressional action on legislation that authorizes appropriations for ongoing programs at levels lower than the President's appropriation request."
But the point I do wish to make, may I say to the Senator, treating these reflows in the unusual way that they would be even with the Senator's amendment is not the conventional way to handle appropriations, meaning there will not be reflected in any accounting of the obligations in which the U.S. Government is committed. It will never show upin the budget authority.
Mr. HUMPHREY. I do not disagree with that. I simply say that is a lousy way to keep books. I think they ought to keep books better than that.
Mr. MUSKIE. No. Now the Senator is off target.
Mr. HUMPHREY. I am not speaking of the Senator's committee. I am simply saying there is a better way of keeping books than that.
Mr. MUSKIE. I will tell the Senator why the bookkeeping is not accurate is because gimmicks like this have crept into the law. The bookkeeping would be accurate if it were not for these kinds of gimmicks. I say to the Senator I am not talking about the merits of the proposals he would follow. The Senator is a much more articulate and eloquent spokesman of those kinds of programs than I am. I am running into this problem of trying to explain to other Senators why certain numbers in the budget documents are misleading. They are always being thrown back at me as though I were responsible for their misleading character. I am not accusing the Senator of saying that.
Mr. HUMPHREY. I am the last one to do that.
Mr. MUSKIE. No. But the problem is, if we are really going to make this bookkeeping accurate with what it reflects to those who read the numbers, we have to take on a more straightforward habit of entering into obligations and accounting for them.
I was not around when the reflow gimmick was first devised. I doubt very much that those who devised it were as straightforward in acknowledging its essential nature as the Senator from Minnesota and the Senator from New Jersey have been this afternoon.
I suspect it was devised, in the first instance, as a way of finding an indirect means for adding to foreign aid spending.
Mr. HUMPHREY. The Senator is absolutely right.
Mr. MUSKIE. All right. If that is the case, then it seems to me that we can further eliminate the misleading quality of Federal bookkeeping if we eliminate these gimmicks rather than try to doctor them up some more so they become barely acceptable. I would wish to see them go the whole straightforward route and eliminate this reflow gimmick and make their case on the merits.
The Senator obviously believes that this $1,678,000,000 is solid on its merits. Here we are diverted this afternoon into talking about something other than the merits, because of this bookkeeping device that was put into the law years ago before I was around and which now ought to be wiped off the statute books, in my judgment.
Mr. HUMPHREY. I agree with the Senator. I agree with the philosophy of the Senator and not only his philosophy but his detailed explanation of how the budget process ought to work.
Let me just state the history a little bit. When Public Law 480 was first established, there were funds that were generated from Public Law 480 that came back into the Treasury that were used for whatever purposes anyone wished to use them without the appropriations process. At that time the distinguished Senator from Louisiana (Mr. ELLENDER) raised the point that this was not the way to handle funds that were being paid back under title I sales of Public Law 480.
Indeed, what we called the soft currency that we got under Public Law 480 was being used without the appropriation process. That was a type of reflow. I was one of those who supported the appropriation process on those soft currencies and on funds that were generated under title I.
In this bill, I thought we were being budgetarily responsible; but I see the merit of the argument of the Senator from Maine, when we were insisting that the reflows at least must go through the appropriation process. But I can see that from the point of view of giving an accurate picture in advance to the electorate, as well as to the Senate, it is much better to have it as a line item. This is why a moment ago I said to the Senator from Hawaii, in reference to administrative costs, that we would make it a line item, even though this committee went to great efforts to try to get the Department of State and the AID administration to give us estimates of what the administrative costs would be.
We turned back those estimates two times, because we felt they were not satisfactory. We now, I think, have an understanding with the Senator from Hawaii in reference to a line item on the administrative or operating costs.
I wish the discussion we had here today had taken place before the Committee on Foreign Relations. The House bill was passed on September 11, and we had not heard a word about this. It would be well if, once and for all, we could get this thing straightened out.
This is what I propose. I propose that we do away with the concept of reflows and that we then put on the basis of merit the items we are talking about — the $200 million for the international agricultural fund, the $50 million for the Sahel, and the other items that are included in those additions which are from reflow funds.
The Senator from Hawaii is cognizant of those items. Ordinarily, they would have been taken care of under the appropriation process. I see no reason why we should not try to handle them in a forthright manner now.
Mr. MUSKIE. Mr. President, will the Senator yield?
Mr. HUMPHREY. I yield.
Mr. MUSKIE. I have here a table of what these reflows have amounted to since 1962 and what the projected receipts for the next 5 years are likely to be. It would be very useful to Senators to have a table prepared by the Appropriations Committee, and I ask unanimous consent to have it printed in the RECORD.
There being no objection, the table was ordered to be printed in the RECORD, as follows:
Agency for International Development loan reflows available for reuse
Fiscal year: Amount
1962 $220,000
1963 1,799,000
1964 7,942,000
1965 14,907,000
1966 23,354,000
1967 38,695,000
1968 53,441,000
1969 65,370,000
1970 166,295,000
1971 168,495,000
1972 189,617,000
1973 204,710,000
1974 167,884,000 *
1975 197,194,000 *
Grand total 1,299,923,000
* Fifty percent of scheduled receipts. The full amounts of scheduled receipts estimated for the next five fiscal years are as follows:
Fiscal year Amount
1976 $353,000,000
1977 511,000,000
1978 540,000,000
1979 580,000,000
1980 570,000,000
Total 2,554,000,000
Mr. MUSKIE. Mr. President, in 1962, the amount of reflows available for use totaled $220,000. That amount climbed. By 1975, it amounted to $197 million, or a total over those years of $1,299,000,000 in reflow funds that have been subject to this reflow technique.
This is the reason why many of us, including the Senator from Minnesota, believe that this particular door to the Treasury should be closed. I compliment the Senator for the changes he is proposing.
Mr. HUMPHREY. Mr. President, the amendment is now before the Senate. If it is adopted, we will proceed with the other amendment, which the Senator from Hawaii has to offer, and then we will proceed with the amendments in order.
The PRESIDING OFFICER (Mr. HELMS). The question is on agreeing to the amendment.
The amendment was agreed to.