September 26, 1975
Page 30557
The PRESIDING OFFICER. The Senator from Maine.
Mr. MUSKIE. Mr. President, I yield myself such time as I may require.
Mr. President, I will not take too much time to make the points I would like to make. First of all—
The PRESIDING OFFICER. Will the Senator yield for a moment? There is some discrepancy over who is yielding time from whose side?
Mr. TOWER. I yield to the Senator from Maine 10 minutes.
Mr. MUSKIE. I think that may be all I require. I assumed I had some control over the time, which I do not desire. I appreciate the courtesy of the Senator from Texas.
First of all, I would like to express my appreciation to my good friend, the distinguished Senator from Mississippi (Mr. STENNIS) for the enormous work he has devoted to this important bill. It extends for a period of several weeks prior to the Senate's action on the first conference report and since. We have been constantly in communication, and I have done my best to give him the perspective of the Budget Committee on this bill. He has been perfectly free to discuss with me the developing situation. I know that he fights hard for the Senate position in every conference of which he is a part, even though that may mean fighting for positions he did not himself support in the Senate Chamber. I think that is a classic demonstration of the responsibility of a Senator in a House-Senate conference.
Mr. President, I told Senator STENNIS that, as far as I am concerned, I accept this conference result. That is not to say I am completely happy with it from the point of view of the congressional budget process, because I am not. I would have liked to have seen further cuts in the conference report. But I think given Senator STENNIS' diligence in pressing the Senate point of view, and other problems to which I will come in a moment, to try to force the Senate conferees back into conference to achieve more cuts would be an extremely difficult if not impossible mission.
The Senator mentioned the question of the differences between the House and Senate Budget Committees' estimates of the relation of first conference report to the congressional budget targets. The Senate Budget Committee's estimate was that it was $900 million in budget authority above the budget resolution, and that is a figure we shared with the Senate on August 1. The House Budget Committee gave its conferees on this bill a figure of $286 million. I appreciate the difficulty of requiring Senator STENNIS to persuade the House conferees that they ought to honor the Senate Budget Committee's figures rather than the House Budget Committee's figures. That is an almost impossible mission.
In the statement I have prepared, which will follow these remarks, I have tried to explain why the House and the Senate arrive at different numbers for a purpose of this kind. I might do it briefly in this way: The overall defense function, of course, is handled in three major appropriations bills. Neither budget resolution divides up that defense function as between these three major bills. So there is nothing in the budget resolution which tells either of us what the Congress decided should be in the Defense appropriations bill, or what should be in the military construction appropriations bill, or how much should be in the foreign military assistance appropriations bill. Each budget committee, using its own best judgment as to the issues that are coming down the road in the national defense function, has tried to do that division in a way that, to it, makes sense.
So it is no surprise, may I say to Senator STENNIS, that these two different numbers have emerged. I hope we can do something about it next year. There is something that we know will happen next year that I think the Senator will find helpful. Next year, in the process of adopting the first concurrent resolution, the Budget Committees will break out that part of total budget authority and outlays which is controlled by both the Appropriations Committees, and it will give those numbers to the Appropriations Committee. The Appropriations Committees will then distribute those overall amounts among their various subcommittees. The Appropriations Committees will make that division and report it back to each body so that we will then have a number that can be used by the Armed Services Committee in considering authorizing bills. I think that will be a much better situation and will avoid some of the frustrations the Senator has experienced. I fully share the frustration of the Senator.
What has this conference report achieved? It is $250 million in budget authority below the original conference report, but it is still above the original Senate-passed bill by $500 million in the procurement items and $180 million in personnel costs.
There are some positive things I would like to say about this conference report. First, the conferees stuck to the Senate position on full funding for naval shipbuilding programs. I think this is an important element in gaining more efficiency in the management of the future Navy, a service all of us are plainly aware is and will be our most costly. The House position on incremental funding would, in my judgment, have had the effect of authorizing blank checks for procurement, something Congress would be called upon to honor later.
Secondly, initial development of the $1.2 billion nuclear strike cruiser was struck from the second conference report. This item amounted to $60 million in outlays for this fiscal year, but in terms of its long range implications for the budget, it is a massive program. As I have indicated to Senator STENNIS in correspondence we had before the first conference report, I am opposed to the ill-conceived and irregular method by which the ship was authorized in the original conference report. Neither Committee on Armed Services took testimony nor did either body deliberate and debate the nuclear strike cruiser. It was added on in conference. Next year, this program can be brought before both Houses in the recognized legislative channels for thorough consideration.
Mr. President, I ask unanimous consent that my prepared statement be included in the RECORD in its entirety, at this point.
There being no objection, the statement was ordered to be printed in the RECORD, as follows:
FLOOR STATEMENT OF SENATOR EDMUND S. MUSKIE ON THE MILITARY PROCUREMENT AUTHORIZATION BILL REVISED CONFERENCE REPORT, H.R. 6674
Mr. President, I speak today in support of the Revised Military Procurement Conference Report, and to present my views on its significance regarding Congress' budget process.
First, I want to extend my appreciation to my friend, the distinguished Senator from Mississippi (Mr. STENNIS) for the enormous work he has devoted to this important legislative measure. Just before our summer recess, the first Military Procurement Conference Report was sent back to Conference. Senator Stennis has worked hard and long to carry out the Senate's mandate. I salute his diligence and perseverance, and I believe that his work is helping to make the new budgetary process work.
Mr. President, the Conference Report brought back to the Senate by the Chairman of the Committee on Armed Services provides $25.5 billion in budget authority to the Department of Defense to procure weapon systems and to carry forth research and development programs. This amount is $250 million below the original Conference Report. Because this money was cut from the procurement of certain weapon systems which spend slowly, it will result in a savings of only $22.6 million in outlays in' FY 1976.
I believe our colleagues who served on this conference should be commended for their efforts to bring down this final measure to a level closer to that which the Senate voted for on June 6th in S. 920. At that time, the Senate decided on a bill worth $25 billion in budget authority; this latest Conference Report is one half billion dollars over the Senate total.
I support this second effort for several reasons. First, the conferees stuck to the Senate position of full funding for Naval shipbuilding programs. This is an important element in gaining more efficiency in the management of the future Navy, a service all of us are plainly aware is and will be our most costly. The House position of incremental funding would have had the effect of authorizing blank checks for procurement, something Congress would be called upon to honor later.
Secondly, initial development of the $1.2 billion Nuclear Strike Cruiser was struck from the second Conference Report. This item amounted to $60 million. As I have said before, I am not for or against this Naval vessel; however, I am opposed to the ill-conceived and irregular method by which the ship was authorized in the original Conference Report. Neither Committee on Armed Services took testimony nor did either body deliberate and debate the Nuclear Strike Cruiser. It was added on in Conference. Next year, this program can be brought before both Houses in the recognized legislative channels for thorough consideration.
And finally, while I personally had hoped that further cuts could have been made, I believe that the conferees did well overall in making reductions so that the final figures are closer to the original ones voted by the Senate in S. 920.
I want to sound a note of caution, however. Including the procurement reductions I have mentioned, and also the proposed cuts in personnel, this bill is still over the Senate-passed level by about $880 million in budget authority and $220 million in outlays.
Mr. President, if both this Conference Report and the Conference Report on the Military Construction Authorization Bill are agreed to, we will still need a further cut of $3 to $4 billion in both budget authority and outlays if we are to achieve the first budget resolution targets of $100.7 billion in budget authority and $90.7 billion in outlays for national defense. I believe it may be especially difficult to hit the outlay target, which is, of course, particularly crucial to the measurement of the deficit. This additional reduction must come largely from the appropriations process — in the three bills that affect the National Defense function: the Defense Appropriation Bill, the Military Construction Appropriation Bill and the military assistance component of the Foreign Assistance Appropriation Bill.
I want to point out that new expenditures for the recently negotiated Middle East interim agreement are not included in the figures I have cited. Any requirements for this purpose would have to be added to the numbers I have outlined.
The United States must have a formidable military force structure and posture which protects America from foreign aggression and contributes to peace abroad. I believe in this kind of strong defense. But I want an America economically and militarily strong. Meeting our budget target this year in the National Defense function will help.
Mr. President, the question has been asked — and I think fairly — why there is a divergence of interpretation between the Senate and the House Budget Committees over the exact amount by which the Military Procurement Authorization Bill exceeds the amounts contemplated in the First Budget Resolution. The Senate Budget Committee staff calculated the original Conference Report to be about $900 million in budget authority over the amounts contemplated for these programs in the budget target; the House Committee Chairman notified the Committee on Armed Services that the first Report was only over by $286 million in budget authority. The difference in these numbers reflects different approaches taken by the two Committees in estimating the budgetary effects of this bill.
As Chairman of the Budget Committee, I believe it is important for me to comment on major authorizing legislation. This logic was applied to the Military Procurement Bill. On June 6th, I stated here in the Senate chamber that "S. 920, as reported to the Senate, is in line with the assumptions of the Budget Committee regarding those elements of the defense program that are covered in this bill." I also pointed out, however, that additional cuts in the National Defense function would be necessary to stay within the budget targets, and urged the military conferees to stay as close as possible to the Senate level. When the original Conference Report was debated on August 1st, I made the same point about the National Defense function overall. At that time, I pointed out the difficulty of holding to the National Defense targets and argued for a lower total in this bill as one of the many cuts we would need to make if we were to achieve the targets.
Thus the question of whether this particular bill is in line or not in line with the targets is less important than the question of how we will eventually get down to the targets. Whatever we do with this bill, that will be a tough job.
As to how this bill fits the targets, perhaps the problem is caused by the Senate Budget Committee decision not to set a specific target for the Military Procurement Authorization or any other individual bill. We did this for several reasons. In Committee markup sessions it was agreed that our role did not encompass line item or program type decisions. Also, in the Committee's Report on the First Budget Resolution and in the subsequent Conference Report, we specified targets for budget authority and outlays for the National Defense function. Our guidelines were these: The reductions from the President's February requests were allocated to the DoD programs, including Vietnam and Cambodia. The cuts were to be taken in program growth, financial adjustments in the procurement accounts, and inflation allowances — purchases rather than compensation.
Using these very general guidelines, the House and Senate Budget Committee staff approached the application of budget authority and outlays to individual programs differently. Our approach yielded the result that the First Conference on the Military Procurement bill was some $900 million in budget authority above the budget target. The House came up with a figure of $286 million which was included in a letter from Chairman Brock Adams of the House Budget Committee to Chairman Melvin Price of the House Armed Services Committee. Here are the pertinent portions:
EXCERPTS FROM LETTER FROM BROCK ADAMS, CHAIRMAN, HOUSE BUDGET COMMITTEE, TO MELVIN PRICE, CHAIRMAN, HOUSE ARMED SERVICES COMMITTEE
In arriving at its aggregate targets, the Budget Committee obviously had to analyze the budget on a functional basis. In addition, I have asked the Budget Committee's staff to make breakdowns of the functional categories aggregates by bill, so we can scorekeep to see where we are in relation to total spending and so we will know where we are when we present the Second Budget Resolution.
Our breakdown of the authorization for appropriations in H.R. 6674, compared with our target assumption, is as follows:
Budget authority in millions
H. Con. Res. 218 $25,277
H.R. 6674 (conference report) 25, 783
Basic amount by which H.R. 6674 authorization
is above budget resolution assumption + 486
This estimate is subject to a further modification because the Conference Report on H.R. 6674 also reduces active duty personnel by 9,000 military and 23,000 civilians. Our estimate is that this action could reduce budget authority by approximately $200 million in FY 1976. If this assumption is valid then the figures would be as follows:
Budget authority in millions
Basic amount by which H.R. 6674 authorization
is above budget resolution assumption $486
Less: Estimated Amount for Reduced Personnel 200
Total 286
Therefore, I estimate that the authorization bill H.R. 6674, as reported from conference, if fully funded through subsequent appropriations would result in the enactment of budget authority approximately $286 million above the target.
I would be less than frank with my colleagues if I said I felt satisfied with this situation. I am not. While the present situation arises from an honest difference of opinion, I believe it is important that the two Committees collaborate on assumptions and logic so that the language and tabulations we use are the same.
Regardless, Mr. President, I do want to remind my colleagues that whatever assumptions were used this spring and summer, I must repeat what I said earlier: We are still at this stage over the National Defense target by some $3 to $4 billion in both budget authority and outlays. That is the important point. I support this Conference Report. I believe the conferees have done well. But we still have a long way to go.
Mr. SYMINGTON. Will the Senator yield?
Mr. MUSKIE Yes, I yield to the distinguished Senator from Missouri.
Mr. SYMINGTON. Mr. President, first, I congratulate the able Senator from Maine for his concentration on the fiscal problems of this country. In that connection, I ask unanimous consent that there be printed in the RECORD at this point an editorial from the Wall Street Journal of this morning entitled, "Off to a Good Start."
There being no objection, the editorial was ordered to be printed in the RECORD, as follows:
OFF TO A GOOD START
Two months have elapsed in the government's fiscal year and we notice that the budget deficit so far is $18.1 billion. A simple calculation would suggest that the government is failing to cover its costs to the tune of over $100 billion a year.
Now, we admit that this is only a rough calculation, without consideration of seasonal factors or a possible economic recovery. But even if the government manages to hold the deficit to $70 billion or so, it is dealing with mind-boggling numbers.
The total personal savings of all Americans last year amounted to only $77 billion. And gross retained earnings of business, the other component of the nation's savings, totaled only $136.8 billion.
In the face of the prospect that federal overspending could use up nearly half the nation's savings this fiscal year we still have assorted blank check writers in Washington following the philosophy that money doesn't matter. It is easy to be brave in the face of such numbers when you are spending or cheapening someone else's money.
Mr. SYMINGTON Mr. President, I also respectfully commend the chairman of the Senate Committee on Armed Services, who, as the senior Senator from Maine has mentioned, did not agree with all of the decisions made by the Senate, but I have never seen anyone work harder, once a decision was made by the Senate, to carry it out. Although it does not meet entirely what the chairman of the Committee on the Budget would like to have, let me assure him that I am very surprised that we got as much as we did, and what we did get was primarily due tothe indefatigable effort of the distinguished senior Senator from Mississippi.
Mr. MUSKIE I thank the Senator from Missouri.
The PRESIDING OFFICER. The 10 minutes of the Senator from Maine has expired.
Mr. BEALL. Will the Senator yield?
Mr. THURMOND. How much time do we have for the minority?
Mr. STENNIS. There are 30 minutes to the side. The Senator controls the time. It was intended to be put in for the Senator from Maine.
What time does the Senator want?
Mr. THURMOND. I want about 20 minutes.
Mr. MUSKIE. May I make this one other substantive point, then I shall use my 5 minutes to answer questions.
The point that I want to emphasize is this: Notwithstanding the fact that the House and the Senate Committees on the Budget had different numbers with respect to the amount assigned to this bill by the first concurrent resolution, the job that we have of meeting the target in the national defense function is still enormous.
This is the point that I want to make. If we adopt this conference report, even including the action we took last week on the pay cap, at this stage we will still be over the national defense target by some $3 billion to $4 billion in both budget authority and outlays. That is the important point. We are now left with the appropriations process as the only place where we can make further cuts to reduce this gap. The important number is at the bottom of the line. At the moment, after we act on this conference report, we still have $3 billion to $4 billion to go, and I wish the Senate to understand that.
I yield to my good friend the junior Senator from Georgia (Mr. NUNN) .
Mr. NUNN. Mr. President, this has been a most difficult year for the Congress to undertake a "dry run" of the new congressional budget process. The economy has not been working as well as we would like and at the same time, the demands for Federal spending on a vast array of problems have continued unabated. This has put the Congress in the difficult position of trying to meet the many problems we face with a tightly limited bag of money.
As a member of both the Budget Committee and the Armed Services Committee, I believe that both committees are to be commended for their efforts to make this new budget process work.
While I do not agree with all the facts and decisions that have been presented, I believe there has been a sincere effort to come to grips with this difficult problem. The Budget Committee has been trying to point out the limited resources available and possible threats to the budget targets the Congress established earlier this year. The Armed Services Committee did its very best to provide for an adequate national defense in the authorization bill taking account of the limitations on resources that we faced. This second conference report is clear evidence of that cooperation and spirit.
However, Mr. President, I want to point out one major factor that perhaps few have yet realized. I do not believe that in the end the defense targets set by the original budget resolution can be maintained through the whole process. They will have to be raised even after the substantial cuts made in this authorization conference report and after further major cuts in other areas reported by the House Appropriations Committee today. I have said right from the beginning that these original budget targets, particularly the target on outlays, has been unrealistically low. There are substantial additional costs not considered in the budget resolution that have nothing to do with U.S. military forces and capability but nevertheless appear in the defense budget category. These costs include military aid to Israel, the retired and blue-collar pay raises which are not held to 5 percent and over estimated revenues from stockpile and oil sales that were in the budget.
If we try to meet the budget targets by cutting U.S. military forces to offset these non-U.S. military force costs, it will result in massive cutbacks and layoffs of military and civilian personnel and severe cuts in research and development and procurement contracts. I do not believe that we should or will make these massive reductions and, therefore, I believe we will have to raise the defense targets of $100.7 billion in budget authority and $90.7 billion in outlays.
I ask unanimous consent to print in the RECORD a breakdown of the figures on the overall defense budget as I see them now.
There being no objection, the material was ordered to be printed in the RECORD, as follows:
[Table omitted]
Mr. NUNN, I commend the Senator from Maine for embarking on a very difficult new journey in the Committee on the Budget, but doing an exceptional job. The military relationship to the Committee on the Budget and the Committee on Armed Services is going to be one of the most difficult. I think everyone recognizes that to begin with. One of the main difficulties, of course, is the relationship between authorizations and outlays.
In this particular bill, although it is something like $29.9 billion, or started off at that figure, the outlay section of it is only about $8.4 billion.
I also commend the Senator from Mississippi for doing an exceptionally good job in conference for the Senate both in the first go-around and the second go-around.
The Senator from Missouri has already outlined the qualities of the Senator from Mississippi in conference and how he is dedicated representing the Senate, and I certainly share that view.
This particular bill, as the Senator from Maine has said, does not end the budgetary problems this year. On the positive side I point out — and this may be new information — but in the beginning the President's budget request was $107.7 billion budget authority, $94 billion outlays. The first budget resolution came back with $100.7 billion in budget authority, and $90.7 billion in outlays.
If we subtract those two figures, what the Committee on the Budget really said on the first concurrent resolution to the Committee on Armed Services and to the Committee on Appropriations is that we need a cut of $7 billion in budget authority and a cut of $3.3 billion in outlays.
What has happened since then, and all of this will be part of my statement in the RECORD in more detail, the conference report that we are dealing with today has cut $4.3 billion in budget authority, according to my figures, and $1.3 billion in outlays. In addition, the military construction authorization cut another $4 billion in budget authority.
The other possibility of savings, of course, is in the appropriations process, and that process has not been completed.
Based on preliminary figures from the House of Representatives AppropriationsCommittee, which I believe has just had their markup, they have tentatively at least cut $3.3 billion in authority and $2 billion in outlays, more than the reductions in authorizations.
So looking at it a moment from the point of view of positive results from the budget process, if we look back to what the first budget resolution instructed the Committee on Armed Services and the Committee on Appropriations to try to accomplish, it was a $7 billion budget authority cut and a $3.3 billion outlay cut. Further, if we assume the House Appropriations Committee figures will stick, as presently indicated — we do not know that but if that happens — then the three combined, that is, this conference report,the military construction authorization, plus the Appropriation Committee action in the House, would total a cut in budget authority of $8 billion and a total cut in outlays of $3.3 billion. This means that the cuts already identified have really exceeded the original target reductions.
The problem that we all must face, however, is the fact that the original cuts have had to be changed somewhat, if we are going to meet the original overall targets because of three additional factors.
One question that has to be resolved is what do we do with the request for additional aid in the Middle East, both to Israel and Egypt. The President has not, I guess, formally sent that here to the Capitol yet. It was not in his budget. This was not part of the President's original budget. So it is not only this budget process; it is the President himself did not have it in his budget.
But my best estimate would be something like $1.5 billion in authority and $400 million in outlays.
The other important point, and I will take just 1 more minute, is that, even though the 5 percent pay cap on white collar workers and active military personnel has been ratified by the Senate — it is pending in the House — the President's original budget recommended a 5 percent pay cap also on retired pay and on blue collar pay.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. NUNN. Two more minutes.
Mr. STENNIS. I yield 2 more minutes.
Mr. NUNN. Those two items have not been accomplished, and there is no sign that they will be accomplished. They would have to be accomplished, I am informed, by legislation.
So those 5 percent recommendations of the President have really not even been dealt with in the legislative process which means that there has been a cost there that was not in the President's budget of about $1 billion in both authorization and outlays.
That is an item that is causing the targets not to be met.
Another part of the difficulty is the overestimated revenues from stockpile and oil sales. That was an overestimate on the revenue side of about $800 million in authority and $900 million in outlays.
So the point I am making is that, if we take this conference report bill together with the military construction authorization, and if we take the House Appropriations Committee action, the Budget Committee targets in terms of the cuts that have been made have been met. But, if we then consider the changes that have taken place in the aid to the Middle East, in the blue collar and retired workers' raises, and also in the overestimate for revenues in oil and stockpiles, this is where the difficulty lies, and this is why it is going to be very difficult and, in the opinion of the Senator from Georgia, it is going to be impossible to meet the original guidelines unless there is provision made for these contingencies which are not related to the military. None of these add one penny to real U.S. military strength.
So I point that out.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. STENNIS. I yield 2 additional minutes.
Mr. MUSKIE. I can say this to the Senator: Of course, these contingencies that come up not only affect the defense targets for the defense function but also all others. But we still have a responsibility of trying to hold to those targets until we make a deliberate decision to change them.
For instance, reestimates overall in the budget amount to $3.9 billion, affecting functions across the board. That means that unavoidable costs have been added to those that we considered in the spring and yet, nevertheless, we have been able to offset some of them. We may not be able to offset all of them and have to make those changes in the reconciliation process.
Mr. NUNN. I agree completely with the Senator from Maine. I thought it was a timely point that should be made about the prospective and the fact that the Committee on Armed Services has really, I think, done its part in meeting these targets. I certainly do not in any way disagree with. the clarification of the Senator from Maine.
Mr. MUSKIE I thank the distinguished Senator for his contribution to this discussion.