December 11, 1975
Page 39998
SECOND CONCURRENT RESOLUTION ON THE BUDGET, FISCAL YEAR 1976 — CONFERENCE REPORT
The Senate continued with the consideration of the conference report on the concurrent resolution (H. Con. Res. 466) revising the congressional budget for the U.S. Government for the fiscal year 1976, and directing certain reconciliation action.
Mr. MUSKIE. Mr. President, I ask unanimous consent that the vote on the conference report on the second concurrent budget resolution take place at not later than 3:30.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. MUSKIE. Mr. President, I ask that the conference report on the second concurrent resolution of the budget be printed in the RECORD.
There being no objection, the conference report was ordered to be printed in the RECORD, as follows:
CONFERENCE REPORT
The committee of conference on the disagreeing votes of the two Houses on the amendment of the Senate to the concurrent resolution (H. Con. Res. 466) revising the congressional budget for the United States Government for the fiscal year 1976, and directing certain reconciliation action, having met, after full and free conference, have agreed to recommend and do recommend to their respective Houses as follows:
That the House recede from its disagreement to the amendment of the Senate and agree to the same with an amendment as follows: In lieu of the matter proposed to be inserted by the Senate amendment insert the following:
That the Congress hereby determines and declares, pursuant to section 310(a) of the Congressional Budget Act of 1974, that for the fiscal year beginning on July 1, 1975—
(1) The appropriate level of total budget outlays is $374,900,000,000;
(2) The appropriate level of total new budget authority is $408,000,000,000;
(3) The amount of the deficit in the budget which is appropriate in the light of economic conditions and all other relevant factors is $74,100,000,000;
(4) The recommended level of Federal revenues is $300,800,000,000, and the House Committee on Ways and Means and the Senate Committee on Finance shall submit to their respective Houses legislation to decrease Federal revenues by approximately $6,400,000,000; and
(5) The appropriate level of the public debt is $622,600,000,000.
SEC. 2. The Congress hereby determines and declares, in the manner provided in section 301(a) of the Congressional Budget Act of 1974, that for the transition quarter beginning on July 1, 1976—
(1) The appropriate level of total budget outlays is $101,700,000,000;
(2) The appropriate level of total new budget authority is $91,100,000,000;
(3) The amount of the deficit in the budget which is appropriate in the light of economic conditions and all other relevant factors is $15,700,000,000;
(4) The recommended level of Federal revenues is $86,000,000,000; and
(5) The appropriate level of the public debt is $641,000,000,000.
And the Senate agree to the same.
EDMUND S. MUSKIE,
WARREN G. MAGNUSON,
FRANK E. MOSS,
WALTER F. MONDALE
ALAN CRANSTON, ,
HENRY BELLMON,
ROBERT DOLE,
J. GLENN BEALL,
PETE V. DOMENICI,
Managers on the Part of the Senate.
BROCK ADAMS,
JIM WRIGHT,
ROBERT N. GIAIMO,
J. G. O'HARA,
ROBERT L. LEGGETT;
PARREN J. MITCHELL,
PHIL M. LANDRUM,
SAM M. GIBBONS,
BUTLER DERRICK,
Managers on the Part of the House.
JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE
The managers on the part of the House and the Senate at the conference on the disagreeing votes of the two Houses on the amendment of the Senate to the concurrent resolution (H. Con. Res. 466) revising the congressional budget for the United States Government for the fiscal year 1976, and directing certain reconciliation action, submit the following joint statement to the House and the Senate in explanation of the effect of the action agreed upon by the managers and recommended in the accompanying conference report:
SECOND CONCURRENT RESOLUTION ON THE BUDGET
Outlays
The House resolution provided for total outlays in the amount of $373.891 billion.
The Senate amendment provided for total outlays in the amount of $375.6 billion.
The conference report provides for total outlays in the amount of $374.9 billion. Estimates of outlays by functional category of the budget is set forth below.
Budget authority
The House resolution provided for total new budget authority in the amount of $408.004 billion.
The Senate amendment provided for total new budget authority in the amount of $406.2 billion.
The conference report provides for total new budget authority in the amount of $408.0 billion. Estimates of new budget authority by functional category of the budget is set forth below.
Deficit
The House resolution provided for a budget deficit in the amount of $72.091 billion. The Senate amendment provided for a deficit in the amount of $74.8 billion. The conference report provides for a deficit of $74.1 billion.
Revenues
The House resolution provided for Federal revenues in the amount of $301.8 billion; and to achieve that level, it directed the House Ways and Means and Senate Finance Committees to reduce revenues by $5.4 billion. The Senate amendment provided for revenues in the amount of $300.8 billion; and to achieve that level it directed the Ways and Means and Finance Committees to reduce revenues by $6.4 billion.
The conference report provides for revenues in the amount of $300.8 billion; and directs the Ways and Means and Finance Committees to reduce revenues by $6.4 billion. The $6.4 billion reduction of revenues is necessary to maintain the personal income tax withholding rates and extend the temporary corporate tax reductions in the 1975 Tax Reduction Act.
The managers accept the Senate position that it is unrealistic to expect this required reduction in revenues to be partially offset by $1.0 billion to be received through tax reform during the remainder of Fiscal Year 1976, as contemplated in the House resolution.
Public debt
The House resolution provided for a public debt level of $620.5 billion. The Senate amendment provided for a public debt level of $623.2 billion. The conference report provides for a public debt level of $622.6 billion.
Transition quarter
The House resolution did not set budget limits on the transition quarter, July 1– September 30, 1976. The Senate amendment provided limits as follows: revenues $84.8 billion; budget authority $92.2 billion; outlays $100.1 billion; deficit $15.3 billion; and public debt $639.5 billion.
The conference report establishes the following targets for the transition quarter;
(1) The appropriate level of total budget outlays is $101.7 billion;
(2) The appropriate level of total new budget authority is $91.1 billion;
(3) The amount of the deficit in the budget which is appropriate in the light of economic conditions and all other relevant factors is $15.7 billion;
(4) The recommended level of Federal revenues is $86.0 billion; and
(5) The appropriate level of the public debt is $641.0 billion.
Purpose and Effect of Section 1 of the Second Concurrent Resolution on the Budget
The purpose of Section 1 of the Second Concurrent Resolution on the Budget for fiscal year 1976 is to revise the First Concurrent Resolution on the Budget adopted on May 14, 1975. It is required by Section 310(a) )f the Congressional Budget Act of 1974 as implemented by the Budget Committees for Fiscal Year 1976.
Adoption of Section 1 of this conference report will limit Congressional actions on spending and revenue for the balance of this fiscal year. The amount specified for revenues represents a floor; after adoption of this conference report, it will not be in order for either House to consider legislation which would have the effect of lowering revenues for fiscal year 1976 below the floor.
The amounts specified for total new budget authority and total outlays represent ceilings: after adoption of the conference report, it will not be in order for either House to consider legislation which would have the effect of increasing budget authority or outlays for fiscal year 1976 above the ceilings.
The amounts specified for the deficit and the public debt are not ceilings; these amounts. represent mathematical derivations from the revenue floor and spending ceilings. The estimates below for various functional categories do not represent ceilings. They do represent the Congress's budget priorities for fiscal year 1976.
After adoption of the conference report, the House and Senate Budget Committees will inform their respective Houses, periodically, of the relationship between the revenue floor and spending ceilings set in the conference report and estimated revenues and spending under existing law.
With respect to budget authority and outlays, this information will be based on estimated spending pursuant to mandatory authorities and enacted budget authority and revenue legislation.
Purpose and effect of the transition quarter provisions
These targets are intended to have the same purpose and effect as the targets established in the First Concurrent Resolution on the Budget for fiscal year 1976. The managers agree that these targets will be established as ceilings, with such revisions as necessary, for the transition quarter, as part of a Third Concurrent Resolution on the Budget for fiscal year 1976 or as part of the First Concurrent Resolution on the Budget for fiscal year 1977, to be adopted in the Spring of 1976, whichever occurs earlier. Thereafter, it will not be in order in either House to consider legislation which breaches the budget authority or outlay ceilings or which reduces revenues below the floor.
Estimates of fiscal year 1976 budget authority and outlays for functional categories
The following estimates of budget authority and outlays for the various functional categories of the budget are intended to explain to the House and Senate the basis on which the managers arrived at the total new budget authority and outlay ceilings contained in the conference report. As stated above, the conference report sets ceilings only for total new budget authority and total outlays; it does not set ceilings for functional categories of the budget.
050: National defense
The House resolution provided budget authority of $100.356 billion and outlays of $91.575 billion. The Senate amendment provided budget authority of $101.5 billion and outlays of $92.1 billion.
The conference report provides budget authority of $101.0 billion and outlays of $91.9 billion.
The managers assume that:
(1) Anticipated congressional action on Defense appropriations will be accommodated within the levels set for this function;
(2) Outlays from prior year balances will be $0.4 billion lower than assumed in the House resolution;
(3) Administration requests for military assistance other than the Middle East will be reduced by $0.2 billion in budget authority and $0.1 billion in outlays; and
(4) At least 10 percent of the cost-of-living pay increase for active duty military and civilian personnel will be absorbed.
The managers have assumed $1.3 billion in budget authority and $0.5 billion in outlays in this function for security assistance programs, a reduction of $0.2 billion in budget authority and $0.1 billion in outlays from the President's request. The managers note, however, that due to the lateness of the submission of the worldwide security assistance legislative package, which falls within both the National Defense and International Affairs functions, neither body has fully considered the details of the program requests. The managers have set a spending ceiling high enough so that the bulk of the request can be accommodated, should this be deemed desirable by the Congress in subsequent authorization and appropriation action. However, the managers agree that should the amounts assumed for security assistance programs be reduced by legislative action, the reductions should be applied to reducing the deficit rather than providing additional funding for other programs.
The managers emphasize the uniqueness of this situation. The Administration request was not received until after the Committees had completed all preliminary work on the Second Budget Resolution. It is the managers' expectation that requests will be submitted in more timely fashion in the future. This action by the managers should not be considered a precedent for future budget resolutions.
150: International affairs
The House resolution provided budget authority of $5.986 billion and outlays of $4.978 billion.
The Senate amendment provided budget authority of $6.0 billion and outlays of $4.8 billion.
The conference report provides budget authority of $6.0 billion and outlays of $4.9 billion, which assumes a reduction of $0.2 billion in budget authority and $0.1 billion in outlays in the President's request for security supporting assistance programs other than the Middle East.
With respect to the $1.7 billion in budget authority and $0.7 billion in outlays assumed in this function for security assistance programs, any reductions as a result of subsequent authorization or appropriation action should be applied to reducing the deficit rather than providing additional funding for other programs. This unique treatment of possible reductions is explained in the statement of managers on the Defense function.
250: General science, space, and technology
Both the House resolution and Senate amendment provided budget authority of $4.7 billion and outlays of $4.6 billion. The conference report provides these amounts.
300: Natural resources, environment, and energy
The House resolution provided budget authority of $18.617 billion and outlays of $11.190 billion. The Senate amendment provided budget authority of $18.8 billion and outlays of $11.5 billion.
The conference report provides budget authority of $18.7 billion and outlays of $11.4 billion.
The managers assume that:
(1) Amounts provided for the Public Works and Interior Appropriations bills will be consistent with the amounts provided in the House resolution;
(2) Outlays provided for pending authorizations, primarily for energy-related programs, will be $0.1 billion above the House resolution; and
(3) Budget authority and outlays for an anticipated Forest Service supplemental are provided for.
350: Agriculture
The House resolution provided budget authority of $4.120 billion and outlays of $2.550 billion. The Senate amendment provided budget authority of $4.1 billion and outlays of $2.6 billion.
The conference report provides budget authority of $4.1 billion and outlays of $2.6 billion.
400: Commerce and transportation
The House resolution provided budget authority of $17.300 billion and outlays of $18.600 billion. The Senate amendment provided budget authority of $19.1 billion and outlays of $18.3 billion.
The conference report provides budget authority of $19.0 billion and outlays of $18.3 billion.
The managers assume that:
(1) An additional $1.6 billion in budget authority over the House resolution is provided for advance apportionment of contract authority for highway programs for the transition quarter;
(2) Estimated outlays for highway programs will be $0.3 billion below the House resolution, reflecting the effect of actual first quarter fiscal year 1976 obligations within the $7.2 billion obligation limitation for the fiscal year; and
(3) The transfer of highway funds for D.C. METRO construction results in an increase of budget authority in the House resolution of $0.1 billion.
450: Community and regional development
The House resolution provided budget authority of $10.600 billion and outlays of $7.000 billion. The Senate amendment provided budget authority of $8.5 billion and outlays of $7.1 billion.
The conference report provides budget authority of $9.5 billion and outlays of $7.0 billion.
The managers assume that:
(1) Budget authority of $3.9 billion and outlays of $1.0 billion are provided for public works and anti-recession assistance legislation now pending before the Congress; and
(2) Outlays for the Rural Water and Waste Disposal Grant program in Fiscal Year 1976 will be consistent with the House resolution.
500: Education, manpower, and social services
The House resolution provided budget authority of $23.848 billion and outlays of $21.288 billion. The Senate amendment provided budget authority of $19.6 billion and outlays of $20.9 billion.
The conference report provides budget authority of $21.3 billion and outlays of $20.9 billion.
The managers assume that:
(1) Budget authority and outlays for a Department of Labor supplemental for administering unemployment benefits will be $0.4 billion and $0.2 billion, respectively, below the House resolution;
(2) Amounts provided for education and social services will be consistent with the House resolution, however, fiscal year 1976 budget authority for summer youth employment programs will be $0.1 billion lower than the House with the understanding that such amount will be provided for the transition quarter;
(3) Budget authority and outlays for public service employment will be $2.0 billion and $0.3 billion, respectively, below the House resolution; and
(4) Outlays for the CETA Title I program and other pending legislation will be $0.1. billion above the House resolution.
550: Health
The House resolution provided budget authority of $33.550 billion and outlays of $32.870 billion. The Senate amendment provided budget authority of $33.5 billion and outlays of $33.0 billion.
The conference report provides budget authority of $33.6 billion and outlays of $32.9 billion.
The managers assume that amounts for the Labor-HEW Appropriation bill will be consistent with the Senate resolution and that the amounts for an anticipated medicaid supplemental and various programs requiring reauthorization will be consistent with the House resolution.
600: Income security
The House resolution provided budget authority of $137.587 billion and outlays of $128.461 billion. The Senate amendment provided budget authority of $137.3 billion and outlays of $128.1 billion.
The conference report provides budget authority of $137.5 billion and outlays of $128.2 billion.
The managers assume that:
(1) Legislative and/or administrative reform in the food stamp program are essential and that such reforms will be implemented in Fiscal Year 1976 to achieve a reduction of program costs of $0.1 billion in budget authority and outlays;
(2) Outlays for Social Security Disability benefits will be reduced below the House resolution by $0.2 billion because of reestimates; and
(3) Amounts provided for civil service retirement and life insurance programs will be consistent with the House resolution.
700: Veterans benefits and services
The House resolution provided budget authority of $19.852 billion and outlays of $19.064 billion. The Senate amendment provided $19.9 billion in budget authority and $19.1 billion in outlays.
The conference report provides budget authority of $19.9 billion and outlays of $19.1 billion.
750: Law enforcement and justice
Both the House resolution and Senate amendment provided budget authority of $3.3 billion and outlays of $3.4 billion. The conference report provides these amounts.
800: General government
The House resolution provided budget authority of $3.300 billion and outlays of $3.300 billion. The Senate amendment provided budget authority of $3.4 billion and outlays of $3.3 billion.
The conference report provides budget authority of $3.3 billion and outlays of $3.3 billion.
850: Revenue sharing and general purpose fiscal assistance
Both the House resolution and Senate amendment provided budget authority and outlays of $7.3 billion. The conference report provides these amounts.
Funds have not been included in the resolution for pending legislation providing seasonal loans to New York. The managers are aware that this legislation would result in budget authority for Fiscal Year 1976, although it would produce no net outlays. At the present time, budget authority for the New York legislation could be accommodated without giving rise to a point of order for breaching the budget aggregate ceilings. However, if funds are appropriated for this purpose and other major items assumed in this resolution are also enacted, a revision of budget authority total would be necessary during the next session of Congress.
900: Interest
The House resolution provided budget authority and outlays of $35.400 billion. The Senate amendment provided budget authority and outlays of $35.2 billion.
The conference report provides budget authority of $35.4 billion and outlays of $35.4 billion.
Allowances
The House resolution provided budget authority of $0.788 billion and outlays of $0.915billion. The Senate amendment provided budget authority of $0.8 billion and outlays of $0.9 billion.
The conference report provided budget authority of $0.5 billion and outlays of $0.8 billion.
The managers assume that:
(1) At least 10 percent of the cost-of-living pay increase for civilian agencies will be absorbed; and
(2) In addition to the funds included for legislation already enacted, no contingency allowance is provided to cover unforeseen requirements during the remainder of Fiscal Year 1976.
950: Undistributed offsetting receipts
The House resolution provided budget authority and outlays of -$18.6 billion. The Senate amendment provided budget authority and outlays of -$16.6 billion. The function for undistributed offsetting receipts involves financial transactions that are deducted from budget authority and outlays of the Government as a whole.
The conference report provides budget authority and outlays of -$17.1 billion based on the assumption that rents and royalties from the Outer Continental Shelf will be $4.5 billion. The managers wish to emphasize the great uncertainty involved in estimating rents and royalties from the Outer Continental Shelf. Such receipts, historically, have been highly speculative due to differing valuations of the tracts involved and environmental law suits. The estimate of receipts agreed to by the managers represents a substantially reduced level from that assumed in the House resolution.
BROCK ADAMS,
JIM WRIGHT,
ROBERT N. GIAIMO,
J. G. O'HARA,
ROBERT L. LEGGETT,
PARREN J.MITCHELL.
PHIL M. LANDRUM,
SAM M. GIBBONS,
BUTLER DERRICK,
Managers on the Part of the House.
EDMUND S. MUSKIE
WARREN G. MAGNUSON.
FRANK E. MOSS,
WALTER P. MONDALE,
ALAN CRANSTON,
HENRY BELLMON,
ROBERT DOLE,
J. GLENN BEALL,
PETE V. DOMENICI,
Managers on the Part of the Senate.
Mr. MUSKIE. Mr. President, I wish to indicate that the distinguished Senator from South Carolina (Mr. HOLLINGS) who was in travel status at the time the report was signed, would have signed the report if he had been physically present. I express my appreciation for his support in the conference and signing the report.
Mr. President, presenting the congressional budget conference agreement to the Senate today, I take some satisfaction in that the new congressional budget process has, so far, succeeded beyond, I think, our expectations of last spring.
This conference report on the second concurrent resolution on the budget provides spending ceilings and a revenue floor for the current fiscal year — a first of historic significance for the Federal budget process.
This congressional budget control is in force a full year earlier than contemplated when the Budget Act was enacted in July of 1974. What was intended as a trial year has turned out to be a meaningful implementation of the Budget Act. The wholehearted cooperation of the Members of Congress, the leadership, committees, and committee staffs has made this historic leap forward by the Congress possible.
The Federal budget provided by this conference report includes a spending plan adequate to continue the basic services of the Federal Government expected by our citizens, States, and localities, plus a limited program of temporary spending to move the economy toward full employment without substantial risk of renewed inflation.
This is a very tight budget. It allows no surplus for late-blooming incidentals.
This Federal budget also provides a revenue floor. No tax cuts can be enacted which would reduce revenues beneath it.
The conference report provides for extension of the anti-recession tax cuts of 1975 until June, and mandates the Finance and Ways and Means Committees to report such legislation. The Finance Committee yesterday reported the reconciliation bill necessary to achieve the approximate $6.4 billion reduction in revenues for the balance of 1976 required by this budget resolution. It is important to note that reconciliation bills on either the spending or tax side are required by the Budget Act to fully carry out the reconciliation instructions given, and amendments which would have the effect of changing the amounts contained in those instructions are not in order. The bill reported by the Senate Finance Committee meets that standard.
One measure of our success with the new congressional budget process is the limitation in the Federal deficit achieved this year, despite the heavy tax loss and unemployment costs which have accompanied the recession. Last spring the administration was predicting a $100 billion deficit for this year. Spending proposals presented to the Budget Committee by the President and congressional committees could have taken that total even higher.
The deficit in the Federal budget established by this conference report is the lowest possible under the circumstances. It is $74.1 billion — more than $25 billion less than the administration feared last spring. The deficit figure is $5.3 billion larger than contemplated in the congressional budget adopted last May. This entire increase and more results, however, from Presidential reestimates of the cost of the programs contained in the President's budget. It does not result from congressional initiatives which were not contemplated in the original congressional budget.
In short, Mr. President, the congressional budget process achieved encouraging success in its first year.
Against this background, I must call your attention to the President's threat to veto the essential tax extension provided by this congressional budget. The President threatens to veto the tax bill unless Congress makes much deeper tax cuts now, for both fiscal years 1976 and 1977, and agrees today on a spending ceiling for fiscal year 1977 which does not begin until next October, and for which we have yet to see the President's own budget. This high-handed attitude represents nothing less than an effort by the President to abort the congressional budget process which has so far been so singularly successful.
The new Budget Act provides a system for the Congress and the President to formulate the Federal budget. President Nixon signed that law; President Ford is bound by it. There is no exception in the Budget Act for election year politics.
The President wants a ceiling. Well, the Congress wants a ceiling, too. This conference report provides a spending ceiling for the current fiscal year which is $20 billion less than the President says he wants for next fiscal year. We have set a spending target for the transition quarter, and we will set a ceiling for next fiscal year, in accordance with the budget act, when we have the President's budget and the economic and program data necessary to make that judgment. The budget law wisely prescribes that the Congress wait until these facts are known before setting a spending ceiling. We will be setting that ceiling for next fiscal year just 4 months from now in May of 1976.This orderly plan of the Budget Act for setting spending ceilings is based on the simple proposition that no one can predict a year in advance what tax collecting and spending needs the Federal Government will face. We cannot ignore the fact that this administration, which urges us to cut taxes by $28 billion and to set a spending ceiling to be effective a full year from now, is the same administration that urged us to raise taxes just a year ago and advised the country there would be no recession.
We must repudiate this assault on the congressional budget process. The Budget Act binds not just the Congress, but the President as well. He may ignore it, but we dare not, unless the country is to sink once more into the quagmire of unregulated budgets, runaway spending, inflation, and recession.
The Federal budget provided by this conference report gives the President what he asked for. It sets a spending ceiling for the entire Federal Government. It provides for the minimum temporary extension of tax cuts necessary to avoid a return to recession. It leaves, as the law requires it must, the question of agreeing to the President's spending and tax proposals for the next year until we formulate the budget for that year this coming spring.
Mr. President, the statement of managers accompanying the conference report indicates the allocation of the dollars provided in the overall budget between the various broad budget priorities. It also describes a number of the budget priority decisions discussed in the conference.
It is by no means exhaustive on that subject. Maximum discretion has been left to the line-item committees to determine how the funds provided by this budget will actually be spent within each priority area.
Questions will nonetheless inevitably arise as to whether a particular bill or program amount is "within the congressional budget." A short answer would be that an amount is within the budget until the spending ceilings have been reached. That is to say, a point of order will not lie against a spending bill which does not breach the overall spending ceiling or a revenue bill which does not breach the floor. However, the Budget Committee will continue to give the Senate guidance as to where we stand on overall spending and spending in each priority category. We are confident the Senate will continue to observe these priorities as instructive as to how the Federal budget should be allocated. It will not do to have vital spending legislation crowded out by less important spending which uses up the available funds within the ceiling.
Mr. President, while all conferences involve compromise, I am pleased to report that the conference on the budget resolution sustained the major Senate positions in most cases. The major decisions of the conference are as follows:
First, the revenue floor has been set at a level which will permit an extension of the 1975 tax reductions into the first half of 1976. The question of an appropriate level of revenues for fiscal year 1977 must be reserved, under the Budget Act, until the formulation of the first concurrent resolution on the budget for fiscal year 1977, 4 months from now. The conference agreed that failure to provide for an extension of the 1975 tax cuts would result in an increase in withholding and tax rates in 1976 which would threaten the present economic recovery from the worst recession since the 1930's.
The House receded from its estimate that $1 billion worth of revenues might be raised through tax reform between now and next July. The Senate, acting on the advice of its Finance Committee and Budget Committee, did not believe it realistic to expect that any reform in the revenue laws could produce such receipts during the next 6 months of 1976. Therefore, the conference report does not anticipate the receipt of significant revenues from tax reform in 1976.
The Budget Committees believe, however, that efforts to make the tax laws more equitable should be vigorously pursued. Our reduction in the estimate of the receipts from tax reform in fiscal year 1976 simply reflects a judgment that there is no expectation that any degree of reform can be enacted soon enough to raise significant revenue before July.
Second, the spending ceiling contained in the conference report is adequate to provide funding for anticipated appropriations, including known supplemental requests including those not yet submitted by the President. The ceiling does not include any surplus to be allocated to unforeseeable programs yet to be originated in the Congress or by the administration. This is a tight budget, and all Members of Congress must recognize that funding of unforeseen initiatives
may crowd out funding of other needed programs which have been provided for under the budget resolution.
Third, the statement of managers allocates budget authority and outlays for the national defense function adequate to accommodate anticipated congressional action on defense spending legislation. Regarding pay raise absorption, the conference assumed the 10-percent figure of the Senate rather than the much higher figure of the House which simply would have meant that something else would have had to be cut.
Fourth, the conference agreed to the Senate proposal that any reductions in the amounts assumed in the budget resolution for foreign security assistance programs, including the Middle East, should be reserved to reduce the deficit rather than used for any other purpose. Let me emphasize the unique character of the security assistance program situation. The President did not submit any reasonable basis on which to estimate the cost of this program until after the budget resolution markup in both Houses was complete. The statement of managers expressly indicates that the accommodation to the President's late proposal should not be taken as a precedent, and that Congress must insist on a more timely submission of such programs in the future. Were it not for the urgency specifically expressed by the President and the Secretary of State for the accommodation of some funds in the budget resolution for this program, it would not have been included.
Fifth, the conference agreed to the Senate proposal to allow funds in fiscal year 1976 for advance highway apportionments for the transition quarter.
Sixth, the managers assume $3.9 billion in budget authority and $1 billion in outlays for the public works/anti-recession assistance legislation on which conference action has just been concluded. The budget authority assumption is a compromise between the House and Senate figures.
Seventh, the managers assume higher levels for public service jobs and education programs than the Senate and lower levels than the House. The conference also provided some forward funding for public service jobs and summer youth programs, which had not been assumed in the Senate resolution.
Eighth, the managers support the senate belief that legislative and administrative reforms in the food stamp program are essential, and assume $100 million of savings through such reforms in fiscal year 1976. While the initial savings are small, the need for reform which can be contemplated during the next 6 months has been clearly recognized.
Ninth, budget authority is not expressly included in the resolution for the New York aid legislation recently authorized by the Congress. Agreement between the administration and the Congress to enact such legislation was achieved after both Houses had adopted budget resolutions. However, budget authority is available within the ceilings set by this budget resolution to fund the New York aid bill which has been enacted. The managers note that, if appropriations are made for that purpose, and other major legislation assumed in the budget resolution is also enacted, a revision of the budget authority total may be necessary during the next session of Congress.
Tenth, the managers assume $4.5 billion in Outer Continental Shelf oil lease receipts, which is $500 million above the Senate assumption and $1.5 billion below the House assumption. The misestimation by the administration of the amount of deficit reduction which can be achieved by the Federal leasing of the Outer Continental Shelf for oil exploration purposes resulted in significant public misunderstanding of the deficit contemplated by the congressional budget this year. The President's January budget estimated 1976 receipts from OCS leases to be $8 billion.
The Budget Committees of each House found this figure incredible, based on the experience of such leasing so far this year, and reduced this estimate to $4 billion in the first budget resolution last May. Since then, the administration revised its estimate of such receipts downward to $6 billion, thus admitting that its original deficit was understated by $2 billion, since these oil leasing receipts are a direct tradeoff against the deficit.
The managers did not accept the administration's $6 billion estimate. We discussed the question of an appropriate estimate and conducted extensive staff research during the conference as to the most current expectations of such revenues. The managers agreed that a realistic estimate of such revenue is $4.5 billion, $1.5 billion less than the administration's current estimate.
Mr. President, other matters considered by the conferees are set forth in the statement of managers which I ask to have printed, together with the conference report, at the conclusion of these remarks. That statement of managers also summarizes the effect of the adoption of the concurrent resolution regarding points of order against legislation which would exceed the spending and revenue limits set therein.
The conference report also establishes spending, revenue, deficit, and public debt targets for the transition quarter, a fiscal period provided by the budget act to make possible a change in the beginning of the fiscal year from July 1 to October 1. The transition quarter is a one-time phenomenon. It will never occur again. Once the initial date for the fiscal year has moved to October 1 next year, the fiscal year will always begin on that date.
It would, of course, have made no sense for the Congress to adopt spending and revenue limits for fiscal year 1976 and for fiscal year 1977 without providing comparable limits for the transition quarter. Thus, the Senate-passed resolution provided a specific ceiling on spending and a specific floor under revenues for the transition quarter. The House version contained no provision regarding the transition quarter. This was the most difficult issue in the conference.
The Senate managers were adamant in their insistence on the need to provide guidance to Congress on spending and taxing in the transition quarter, consistent with the budget policy adopted in the budget resolution for 1975. The House managers were equally adamant in their position that, since the House had not considered spending ceilings for the transition quarter, it would be inappropriate to take them back to the House in the conference report. The ultimate agreement in the conference was that the conference report would include spending and revenue targets for the transition quarter. The next budget resolution, be it a third concurrent resolution for 1976 or the first resolution for 1977, will reappraise those targets and convert them into ceilings after which, under the Budget Act, a point of order will lie against legislation which exceeds the limits agreed to.
The statement of managers divides the transition quarter aggregate spending target into separate totals for each functional category of the budget. As in the case of this year's first concurrent resolution on the budget, the Budget Committees will scorekeep legislation for the transition quarter against these functional and aggregate totals and urge their respective Houses to stay within them.
Mr. President, this conference report on the second concurrent resolution on the budget is more than a landmark in the new congressional budget process. It represents a positive action by the Congress to assert control over runaway Federal spending and move deliberately toward a balanced budget as soon as the condition of the economy permits. It begins the long and difficult process of appraising the relative priority of competing demands on the Federal budget.
The lessons of this first year's operation of the budget process should be very clear:
First, the budget process works.
Second, it has saved billions of dollars which otherwise would have been spent under the old system in which there was no overall control of the Federal budget.
Third, Congress has begun to make hard decisions on competing priorities. No longer is the door to the Federal Treasury wide open. Funding for programs must now be based on both the basic need addressed and on the relative availability of funds to meet that need compared to other national needs.
Fourth, administration officials who administer Federal programs are on notice that Congress, through the budget process, is going to insist that economies must be made wherever possible without sacrifice of program purposes.
Fifth, the taxpayers of the United States can have greater confidence that the Budget Committee and the Congress itself are committed to weeding out those projects which never had relative merit compared to other national needs, or which have lost the priority they originally possessed.
Mr. President, the congressional budget process has been initiated at a very difficult time — a time of staggering recession-caused deficit. Yet this first year of the budget process has been one in which the Congress can take pride — pride in creating a new budget system which works, and pride in making it work.
I urge the adoption of the conference report on this budget resolution.
Mr. President, I am prepared to go into further detail if Members of the Senate should desire, but in the light of the time limitation on consideration of the conference report, I should like at this point to yield to my good friend the distinguished ranking Republican member of the Budget Committee (Mr. BELLMON) .
Mr. BELLMON. I thank the distinguished chairman of the committee.
Mr. President, I join the distinguished chairman of the Budget Committee, Senator MUSKIE, in urging my colleagues to adopt the conference report of House Conference Resolution 466, the second concurrent resolution on the budget for fiscal year 1976. This is an historic occasion in that with the adoption of this report; Congress will have imposed upon itself the establishment of binding spending ceilings for this fiscal year. I emphasize the word binding. For the rest of this year, any legislation which would have the effect of increasing total budget authority or total outlays in this fiscal year above the ceiling or which would have the effect of lowering total revenue below the floor will be subject to a point of order. With the adoption of this report, Congress will have taken another big step in our collective efforts to both control total spending and give priorities to those needs which Congress deems most important.
Our chairman has already presented the totals that this resolution encompasses. I simply wish to say, as he has, that these numbers do not necessarily please any of us, but they are the best we would do under the circumstances and under the laws with which we are now working.
These large numbers do not represent a spendthrift budget — none of us sought or want a deficit of the levels suggested here. Rather, much of the spending and most of the deficit is a product of current economic conditions and current law. On other occasions we have talked of the so called "uncontrollables"— the existing mandatory entitlement programs which demand under existing law outlays to those activities meeting the requirements established by law. On other occasions we have talked about current economic conditions causing reduced tax revenues from individuals and corporate profits. These are the primary reasons for our deficit. It is obvious to those of us on the Budget Committee that next year, the second year of the budget process, closer attention must be given the entitlement programs. This is especially true of the payment levels and eligibility requirements which are part of the current law in those programs. For if these programs do not receive our close attention, we could find ourselves in the same position next year — facing a large deficit despite our expectations that economic conditions will be improved.
My colleagues will also find in this report spending targets for the transition quarter, the period July 1, 1976 through September 30, 1976. These targets have been set for each of the functional areas. These targets will assist the Congress in its guidance of spending during the unique once only period between the end of fiscal year 1976 and the beginning of fiscal 1977. The Senate Budget Committee is convinced that these target levels are required by law and by the realities of sound fiscal management.
Mr. President, the Senate has come a long way in this first year of the new budget process. While there is a long way to go before any of us will be totally pleased with the results, an important beginning has been made. I congratulate Chairman MUSKIE, the other members of the Budget Committee and the entire staff for the effort that has brought us this far. While there is more to be done, I believe we can take satisfaction in the progress to date.
I also wish to express my appreciation to the full membership of the Senate for the support this body has given to our newly established budget process; especially the understanding and support of committee chairmen and members of the Appropriations Committee who have contributed substantially to the progress which has been made. The continued support and understanding of the full Senate is essential to continued movement toward sound fiscal policies for the Federal Government, which is the goal we all seek.
Mr. MUSKIE. Mr. President, I yield to my good friend the distinguished Senator from Utah (Mr. MOSS), who has been such a strong support in the whole process of the committee.
Mr. MOSS. Mr. President, I rise in support of the conference report on the second concurrent budget resolution.
I wish to pay tribute to our chairman, the ranking Republican member, and the other members of the Budget Committee, who have worked so diligently this year on this budget process, which we are now completing for the very first time in this body. The leadership exhibited by our chairman, the Senator from Maine (Mr. MUSKIE) and our ranking Republican member, the Senator from Oklahoma (Mr. BELLMON) has been outstanding. We have been supported by excellent staff, who have worked diligently and long.
I pay tribute also to the members of the House committee, with whom we met in conference at some length and had considerable difference of opinion and many matters to work out. They, on their side, have exhibited great vision and firmness, and they have produced for the House of Representatives the budget on that side, which now comes together with the Senate budget in this conference report on the concurrent resolution.
I should also mention the new Congressional Budget Office, CBO, which in1 year's time has grown into a great and effective organization, with tremendous expertise, and one that Congress can use as its point of reference and storehouse of knowledge and information.
I believe that this is one of the most important pieces of legislation that the 94th Congress will be asked to vote on. Adoption of this resolution will mark another key step in affirming congressional control over the Federal budget, which is long overdue. The resolution will establish binding ceilings on spending and a floor on revenues which become applicable to all subsequent legislation affecting the fiscal year.
This resolution results from executive hearings, studies, and consideration of views of Government officials and various experts. In developing this resolution, the committee adopted priorities which differ from those of the administration. The committee rejected administration proposals for major cutbacks in social programs, and included full cost of living increases for recipients of Federal programs below the level of current services. Additionally, a key element of this resolution is a recommendation that the 1975 tax reduction be extended in a manner that does not raise withholding rates next January, when most of the provisions of the 1975 tax reduction are scheduled to expire. If the tax bill expires, the average worker will pay about $160 more in taxes each year. That means people will have less money to buy the things they choose. It means more people will be out of work. It means another blow to an economy which is already struggling to get back on its feet. Extension of the tax cut will increase consumer income and offset the loss of purchasing power, stimulate business activity and reduce unemployment. The tax policy inherent in this resolution, expenditures of about $374 billion, the fiscal policy implicit herein, together with a monetary policy that would keep short-term interest rates near current levels will enable the economy to move on an 8 percent growth path which is the committee target.
I believe that the strategy in this resolution is the best for the Nation's economic needs at this time. The deficit could easily have been $25 billion more this year but for the new budget process and the discipline shown by members of this committee and the Congress. It is important to point out that this resolution aims to reduce the deficit in subsequent years by maintaining and strengthening the economic recovery that is now underway, and by better management of the Nation's financial affairs. This resolution cannot correct in 1 year budget problems which have accumulated over many previous years. But it is a beginning. Living within these ceilings will not be easy, but it is necessary.
Some of our colleagues have advocated a higher level of budget expenditures and deficit spending. Others, including myself, have argued in favor of greater fiscal restraint and holding the deficit down. The resolution represents a compromise between many differing points of view.
In my own case, I would have preferred a lower spending level and a smaller deficit. But despite my personal preferences, I support this conference report as the best result attainable. I urge my colleagues to support it. I believe this resolution offers the means to meet the Nation's current needs, continue the economic recovery, and to bring the economy back to something closer to full employment. These actions together with increased fiscal responsibility will enable us to begin moving toward a balanced budget. As a member of the Committee on the Budget, that is also a personal goal of mine.
The new budget system manifests the foresight and wisdom of Congress in enacting budget reform last year. Although not slated to be implemented until fiscal 1977, I, for one, am pleased that we decided to start this year — fiscal 1976 — in light of the prevailing economic situation.
Although belatedly, the new system also eliminates the longstanding and somewhat irresponsible practice of piecemeal congressional budgeting; and enables Congress to consider income and expenses together, in total; and to know in advance the cost impact on the budget of existing programs and new proposals.
This was by no means an easy year for budget making, but we have taken a big step toward improved control of the budget.
However, it is apparent that we are going to have to do better to bring the Federal budget under the type of control I believe is required. For example, a recent survey of my constituents — which elicited an overwhelming response of over 85,000 of 228,000 questionnaires — Utahans reaffirmed their concern about "heavy Government spending." Accordingly, I intend to work even harder to achieve another of my objectives as a Committee on the Budget member; that is to get the Federal Government to exercise greater fiscal responsibility and restraint in Federal spending.
Let me suggest some actions which emanate from this year's budget experience, which I believe will help us to do that. Although not a complete list, these initiatives are illustrative of actions which if implemented would enable us to better realize the full potential of the new budget system, and restore the public's confidence in Government's ability to deal with today's economic realities.
First, Congress should focus its efforts on the time period further out — further up the budget stream — in order to more effectively establish the budget priorities and to achieve greater budget control. Priorities cannot be shaped by decisions on each year's budget alone.
Second is the need for Congress to review the so-called uncontrollable programs which now comprise over 70 percent of the Federal budget. This seriously limits the scope of budget control and restricts flexibility for recognizing new programs or setting national priorities. In the aggregate, the organization needed to administer such programs constitutes a large part of the Federal bureaucracy. Even improved management of existing programs could save billions.
While certain programs are uncontrollable under present laws, it is Congress who made the laws and Congress can change them. Accordingly, such programs should be reviewed as a basis for determining whether they are in accord with current priorities and national needs and whether savings can be achieved on those essential programs which are continuing.
Third, there is a need to improve the Federal budget estimates. Studies show that over the last 12 years, the administration's budget normally submitted to Congress in January has mis-estimated expenditures about 7 percent annually. A smaller deficit might make news, but one that is only an illusion does not make sense.. Some uncertainties in estimating are recognized but they can be reduced. Unrealistic or poor estimates are not conducive to achieving tight budget control, which the Nation needs and for which we are striving under the new process.
Fourth, is the significant amount of budget authority which is carried forward for spending in periods beyond the current fiscal year. In many cases, advanced funding is necessary, but the existing pattern would appear to have serious implications for congressional efforts to establish firmer control over spending priorities in the future. Accordingly, I think it is important that this committee work with other committees and especially the Committee on Appropriations as a basis for expanding congressional understanding of the "prior year" authority. These are but some of the actions that I think would enable us to fully exploit the benefits of the new budget process.
I especially commend the committee leadership, Chairman MUSKIE and Senator BELLMON, the ranking minority member. Their extraordinary performance has been an inspiration to all of us. I also express appreciation to the other committee members for their cooperation and bipartisan spirit and to the staff for their superb performance. I believe the committee has made a noteworthy contribution to what, in my view, history will record as an important step in budgetary reform.
Finally, I believe that this resolution offers a long needed step for Congress to exert effectively its influence over the Nation's financial affairs and to lay the groundwork for recovery and long-term stability. Accordingly, I urge our colleagues to support this conference report.
I yield the floor.
Mr. BELLMON and Mr. MUSKIE addressed the Chair.
The PRESIDING OFFICER (Mr. DOMENICI) . Who yields time
Mr. BELLMON. Mr. President, will the Senator yield for a unanimous-consent request?
Mr. MUSKIE. Yes, I yield.
Mr. BELLMON. Mr. President, I ask unanimous consent that Mr. Donald V. Moorehead, chief minority counsel of the Committee on Finance, and Janet Bollen of the staff of the Committee on the Budget be granted privileges of the floor during the remainder of the debate on this resolution.
The PRESIDING OFFICFR. Without objection, it is so ordered.
Mr. MUSKIE. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. On whose time?
Mr. MUSKIE. Take it out of my time.
The PRESIDING OFFICER. The clerk will call the roll.
The second assistant legislative clerk proceeded to call the roll.
Mr. MUSKIE. 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. MUSKIE. Mr. President, I ask for the yeas and nays on the conference report.
The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient second.
The yeas and nays were ordered.
Mr. MUSKIE. Mr. President, I suggest the absence of a quorum.
The PRESIDING 0FFICER. On whose time?
Mr. MUSKIE. The time to be equally divided.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. MUSKIE. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
The PRESIDING OFFICER (Mr. CASE). Without objection, it is so ordered.
Mr. JAVITS. Mr. President, I am greatly obliged to the Senator from Maine for calling me in. I should like to talk a minute about a statement in the conference report relating to the New York situation. This was explained, also, in the debate on the so-called New York bill, but I think we should have it very clear.
I note that the statement which is found at page 9 says:
Funds have not been included in the resolution specifically for seasonal loans to New York.
The PRESIDING OFFICER. Will the Senator yield for an inquiry as to the time situation?
Is the Senator from Maine yielding time to the Senator from New York?
Mr. MUSKIE. Yes. I yield 2 minutes to the Senator.
Mr. JAVITS. The managers are aware, they say, that the legislation which is agreed to in the conference report would result in budget authority for fiscal 1976,"although it would produce no net outlays." I assume that what that means is that, as the revolving credit is to be fully repaid before the end of fiscal year 1976,that is the reason for it.
Mr. MUSKIE. Precisely.
Mr. JAVITS. And that if for any reason — one never knows what can happen to these things — there is a problem, it can be accommodated under the general item which would cover this kind of outlay in the budget resolution, that the law would permit us to deal with the revision of budgetary authority during the next session of Congress.
Mr. MUSKIE. That is right. We can do it in a third concurrent resolution, before the end of the fiscal year.
Mr. JAVITS. So the Senator is satisfied and the Budget Committee is satisfied that accommodation has been met fully with the policy and the appropriation as adopted by the Senate.
Mr. MUSKIE. The Senator is correct. The House and Senate Budget Committees discussed it at length and reached clear cut agreement on that point.
Mr. JAVITS. I am very much obliged to the Senator.
Mr. HOLLINGS. Mr. President, the conferees on the second concurrent budget resolution, after four difficult meetings, have agreed to fiscal 1976 revenues of $300.8 billion, outlays of $374.9billion, a deficit of $74.1 billion, new budget authority of $408 billion, and a public debt of $622.6 billion.
For the transition quarter beginning July 1, 1976, and ending September 30, 1976, the recommended level of revenues is $86 billion with outlays of $101.7 billion and a deficit of $15.7 billion. New budget authority for the transition quarter is $91.1 billion and the public debt increases to $641 billion.
Mr. President, this is a record deficit. However, the size of the deficit is directly traceable to the recession. The recession creates large demands for unemployment insurance and other income support benefits. It puts taxpayers on the welfare rolls. At the same time, it reduces the national income and Federal tax receipts. Consequently, an effort to balance the budget in today's economy would create economic chaos and immeasurable personal hardships. Moreover, at the employment levels which we enjoyed 8 years ago, Federal costs today would be lower, revenues would be higher, and this budget would be in balance.
With this budget we will begin to move out of the recession and return toward the high plateau of full employment which this Nation enjoyed under our last Democratic President. But the recovery will be slow and we can predict deficits again next year and in the future until we completely emerge from the recession. Mr. President, I intend to do everything in my power to see that these deficits are as small as they can be consistent with a steady economic recovery. In this time of budgetary stringency, I will oppose all unnecessary additions to permanent Federal programs.
I will also continue to strive for truth in budgeting, so that the Federal Government's budget is as reliable a forecast as we can make it of probable actual spending.
As one of the Senate conferees on the budget, I am concerned that this legislation probably overestimates Outer Continental Shelf receipts — and consequently underestimates Federal budget authority, outlays, the size of the deficit, and the size of the public debt — by as much as $1.6 billion.
Last February the President predicted Outer Continental Shelf receipts of $8 billion in fiscal 1976. We took a close look at that prediction and concluded that the President's figures were wildly inflated. The first concurrent resolution agreed to our OCS receipts estimate of $4 billion.
Subsequently, the administration reduced its estimate to $6 billion. The House, in the second concurrent resolution, accepted this figure. But the Senate stood by its earlier estimate of $4 billion. After the second concurrent resolution passed the Senate, we received information indicating that even the $4 billion level is unlikely to be reached.
However, the House conferees were extremely reluctant to abandon the $6 billion estimate. The best we could obtain from them was a concession in which they came down to an estimate of $4.5 billion. This is the figure carried in the conference report.
While this compromise figure is considerably more realistic than the figure being used by the President's spokesmen, in my view it is still well over the mark. There is, admittedly, at least a remote chance that we could achieve $4.5 billion in receipts if the Alaska sales proceed on schedule — which I strongly doubt — and if the highly optimistic figures being used by the administration for the California sale materialize — which I strongly doubt. In recognition of this fact, the conferees adopted language in the conference report on House Concurrent Resolution 466 to emphasize "the great uncertainty involved in estimating rents and royalties in the Outer Continental Shelf." In my view, we are unlikely to obtain more than$2.9 billion in OCS receipts.
Mr. President, I ask unanimous consent to include in the RECORD at this point a table showing actual, probable, and further possible Outer Continental Shelf receipts of fiscal year 1976.
There being no objection, the table was ordered to be printed in the RECORD, as follows:
[Table omitted]
Mr. HOLLINGS. As I have said, it is my view that we are likely to miss the second concurrent resolution target for OCS receipts by as much as $1.6 billion. The practical effect of such a shortfall is that the budget ceilings on budget authority and outlays will be reached before we have passed all the legislation contemplated under the second concurrent resolution. All spending legislation brought to the floor after the ceilings have been reached is subject to a point of order.
As a practical matter, then, we will have to pass a third concurrent resolution or require reductions in spending legislation already enacted. Either approach will be time-consuming and to some extent disruptive of the budget process.
Mr. President, in spite of my misgivings about the Outer Continental Shelf issue, I support the second concurrent resolution on the budget because it is the vehicle for achieving overall fiscal responsibility in the Congress.
Mr. MUSKIE Mr. President, if there is no further discussion, we are ready for the vote.
The PRESIDING OFFICER. Is all time yielded back?
Mr. MUSKIE I yield back the remainder of my time.
Mr. BELLMON. I yield back the remainder of my time.
The PRESIDING OFFICER. All time having been yielded back, the question is on agreeing to the conference report. On this question the yeas and nays have been ordered, and the clerk will call the roll.
On the vote the yeas are 74 and the nays are 19.
[Roll call vote tally omitted]
The conference report was agreed to.