May 14, 1975
Page 14295
FIRST CONCURRENT RESOLUTION ON THE BUDGET – FISCAL YEAR 1976 –
CONFERENCE REPORT
Mr. NUNN. Mr. President, this morning I had understood that the conference report on the first concurrent budget resolution would have a rollcall vote at 12:30 p.m. I arrived at about 20 minutes of 12 to make a speech against this resolution, for reasons which I shall go into in a moment, and I found that the resolution had already passed.
The Senator from Maine, the chairman of the committee, made every effort, I am sure, to notify various people he thought might have objections to get them to appear. He can speak on this point better than I, but he ran into problems with the House and their time frame on this particular resolution. Therefore, there was no roll call vote.
So, even though I would like to have a roll call vote to register a "no" vote on this resolution for the reasons I shall delineate, that is not possible at this time and, therefore, the Senator from Maine has agreed to a brief colloquy on a very important point concerning the Department of
Defense budget.
Mr. MUSKIE. Mr. President, will the Senator yield?
Mr. NUNN. I am glad to yield to the Senator.
Mr. MUSKIE. I think it might be helpful to Senators to understand the procedural picture this morning.
When I left the Senate yesterday I had an agreement with the leadership that the budget resolution conference report would be the first item of business this morning. There was no understanding with respect to a roll call vote except that the Senator from West Virginia
(ROBERT C. BYRD) made it clear we would not want a roll call vote called before noon for the convenience of the Members of the Senate. That was agreeable to me, and I had no opinion at that point as to whether a roll call vote would be desirable.
When I arrived this morning, I came to the floor shortly after 10 for the purpose of proceeding with the business. At that point, the distinguished Senator from Georgia (Mr. TALMADGE) had a special order to make some remarks on the action of the House yesterday on the agriculture bill veto. He had the floor, and Senator BYRD had scheduled a 30-minute morning hour, so it was clear we would proceed about 11 o'clock and we did so.
At that point, no Senators other than myself and the distinguished ranking Republican (Mr. BELLMON) were on the floor. We each made a statement; we inquired as to whether other Senators were interested in participating in the discussion. There were none of which the Senate aides were aware. There were none of which my staff was aware, and we did check specifically with the office of the distinguished Senator from Virginia (Mr. BYRD) because of his ongoing interest in these matters. He indicated he was not interested in participating.
At that point, I was advised by the distinguished Chairman of the House Budget Committee that the House ought to have the papers before noon.
I remind Members that the Budget Act requires that final action on the conference report be taken by May 15 and the House had other business scheduled for today which, if it were started at noon, probably would preclude the taking up of the budget resolution today and might put it over until next week when we would be well beyond our statutory deadline.
Since at that point I had no indication that other Senators were interested in being involved in the discussion, and because I had this urgent call from Congressman ADAMS, I checked with Senator BELLMON and we both agreed perhaps we could proceed by voice vote to get the matter over to the House and proceed, and that is what happened.
Now, if I did what I have said, it is in no way critical of Senator NUNN. I know of his long- standing interest in the Defense budget and fully understand why he wants to raise these questions and discuss them. I would have welcomed that discussion this morning, as I do this afternoon.
I simply express my regret to Senator NUNN that somehow we were both caught up – in rapidly occurring parliamentary events, and that is where we are.
I am personally happy to engage in any discussion that would serve the Senator's' interest.
Mr. NUNN. I thank the chairman, my colleague from Maine, and I certainly have no points to cast on him. I understand the exigencies he was operating under and I certainly understand the circumstances.
I do hope in the future that on matters as important as this conference report and the budget resolution, there would at least be notification by the various members of the committee that are handling the matter even though no roll call vote is contemplated. I would hope under normal circumstances – and I know this morning's circumstances were not normal – there would be a roll call vote on something setting the overall level of the Government expenditure for the fiscal year that is forthcoming.
Mr. President, first of all I object to the conference report for a reason that I think many Members share, and that is that the overall deficit is too high. It does go up considerably from the Senate deficit, but I also understand the conferees have to reach a compromise, and that is not the major point I would like to make today.
The major point I would like to make is that when we started this year, the administration requested an outlay ceiling of $94 billion, and at the very beginning of this process Senator McCLELLAN announced, after due deliberation and study of the defense budget, that he felt we could cut $5.2 billion off budget authority and $2.1 billion out of outlays.
The net result of this budget resolution which has just passed is that we will be cutting out of outlays or we possibly can be cutting out of outlays certainly a minimum of $3.3 billion.
The other point I would like to make is that this is not really the most likely outcome. The most likely outcome is that we are going to be cutting $5.1 billion out of outlays.
The reason for this is, I suppose, a little complicated, but it needs some explanation.
In the report that the conferees passed, they make it clear on page 9 that the conference report sets a total target limit – and this is a target, not an absolutely binding limit – a target limit of $90.7 billion on outlays for the Defense Department – a $3.3 billion cut from the President's request.
But unlike any other department in Government, they have a provision on page 4 in discussing the national defense budget, labeled (a) on page 4, that states as follows:
(a) If Congress should decide not to limit increases in defense salaries and retirement allowances, there are sufficient funds within this total to support that decision.
Mr. President, what this means is that if we do not go along with the request of the President of the United States to put a 5-percent cap on military and civilian salaries of employees of the Federal Government, then that $1.8 billion additional cost, according to the Budget Conference Committee report, can come out of the $90.7 billion in outlays.
If we assume for a moment that the cap will be removed by Congress – in all likelihood it will be, based on the House resolution which has already passed – then that means that instead of a $90.7 billion outlay ceiling, what we practically have as a real target is an $88.9 billion ceiling.
I am not here, Mr. President, to take a position at this time one way or the other about whether these caps are desirable, or whether there should be a full cost-of-living allowance. That is not the purpose of this colloquy. But I think we should assume a couple of things for a moment:
No.1, that this budget resolution is a serious resolution; No. 2, that the targets, even though they are targets, are the basis on which the total has been arrived at. If we start exceeding these targets on various items, like national defense and others, instead of having an estimated deficit of about $68.8 billion, we will have a deficit much larger than that as we proceed through the years.
Mr. HOLLINGS. Will the Senator yield?
Mr. NUNN. I am glad to yield.
Mr. HOLLINGS. I was in a conversation this morning with Senator MUSKIE and Senator BELLMON. The Senator knows, as well as I, serving together on the Budget Committee, our entreaties and considerations during the markup were that we always took the position that the cap did remain. When we were in conference, I was looking at the additional amount. We had an additional $500 million cut. I had talked with the Secretary of Defense and since there had been an end in Vietnam, it was stated that we could have the $500 million cut.
I have to say that in no way did the House want any pay caps on it, but in my mind we were equally adamant and left the pay caps stay. With the additional $500 million cut I could attribute that cut, as a conferee, to the phaseout or the end of the war in Vietnam.
Mr. NUNN. I thank the Senator from South Carolina. I know of his interest in this matter as we have deliberated.
Mr. CHILES. Will the Senator yield?
Mr. NUNN. I am glad to yield.
Mr. CHILES. I associate myself with the remarks of the Senator from Georgia,
Serving on the Budget Committee and also serving on the Appropriations Committee, I took the figures that the distinguished chairman of the Appropriations Committee had set forth as being the amount he felt the budget could be cut, and we started working from there. I believe in all of our deliberations on our side of the Budget Committee we were cognizant of this and had long deliberations between the difference in budget authority and the difference in outlay, how drastic would be the cuts in outlay in order to effect those cuts, and what kind of steps we actually had to take.
On several occasions on our side of the budget we had much deeper cuts than some of the members of our committee moved. Those cuts were defeated on the basis that it could be so severe to the R. & D. portion of the budget, to personnel and to procurement, that, in order to effectuate those cuts, you would have to go so deep that you could really cut not at all fiber but you would cut into muscle and bone.
Our feeling – and the strength of our committee was very strong – was that we could do much more toward budget outlay which would affect future spending and certainly have a drastic effect on future spending, and try to drive the direction of where future spending would go. But when you went too far on outlay then you ran into a great danger.
I concur with the Senator from Georgia on the proposition we are faced with here that if this does mean that the caps are totally removed, then we have real problems.
I think it is probably good that this is a walk-through process that we are going through. In no way do I want to minimize what I think is the level, the bottom line of spending. We should not hold ourselves to that. I think the Budget Committee staff needs to be on the floor every time we are passing a new kind of money bill to see how that will affect the overall spending. Thank goodness, this is not poured into concrete, or what did this morning I think drastically would hurt the military.
I again want to thank the distinguished Senator from Georgia for bringing this to the attention of the Senate. I think this is a valuable colloquy in which he has engaged.
NUNN. I thank my colleague.
I would like to complete my analysis of the matter and then I shall be glad to yield. I hope the Senator from Maine will help me on the time problem because I believe this point should be made.
As the Senator from Florida said, if we follow directly the implications of this budget resolution and adhere to the targets, in my opinion, if the pay caps are removed, what we would be telling the federal employees, particularly those in DOD, is "We are going to raise your pay but we are going to take your job away."
The analysis that we made in the Armed Services Committee, and I admit it is a hasty analysis, is that we feel that the most likely result of this particular resolution, assuming it is adhered to, and
assuming that the pay cap is removed, is that it will cost 700,000 to 800,000 jobs in the Department of Defense. That includes military and civilian jobs. If you take 700,000 or 800,000 jobs in the Department of Defense, you have closed bases all over this country. You have a result, I believe, that no one could logically propose.
I will give my analysis of that. The implications of a $5.1 billion reduction in outlays – again, this is assuming that caps are removed – is $3 billion higher than the $2.1 billion reduction recommended by the Senate Appropriations Committee. It is $3.6 billion higher than the real, actual reductions found after detailed examination of the program by the Armed Services Committee in the authorization bill. The Armed Services Committee reductions were based upon the same kinds of items recommended in the statement of managers. That included an elimination of military assistance in Southeast Asia, reductions in program growth, inflation estimates, and financial adjustments. Yet the Committee on Armed Services, on which I serve, was only able to find $1.5 billion in outlay reductions after a detailed review of all the line items.
Of course, as we know, the authorization bill does not encompass the entire defense budget. In budget authority, the Armed Services Committee exceeded the recommendation of the Budget Committee, if you take this on a proportional basis and allocate it throughout the entire military budget and not just the part of the budget that has been handled by the Armed Services Committee.
The authorization bill that we passed in the Armed Services Committee that will be debated next week does cover all of the research and development, most of the procurement, and all of the military, civilian and reserve strengths. So it is a large part of the overall total.
Let us assume for a moment that other authorizations and appropriations actions could reduce an additional $1 billion more than the Armed Services Committee bill. In other words, that Senator McCLELLAN and the Appropriations Committee can find an additional $1 billion that will be added to the $1.5 billion that we have already cut in terms of budget outlays. This would still leave $2.6 billion in outlays to be cut to achieve the recommendation of the statement of the managers – an additional $2.6 billion.
We made a detailed analysis in the Armed Services Committee. However, the budget outlay recommendation made by the conference committee exceeds any reasonable outlay that can be achieved, in my opinion, by the Armed Services Committee or the Appropriations Committee without damaging the national security of this country.
I have had a brief analysis of this done by the staff, and I have talked to Senator McCLELLAN's staff, and they also have done a very hasty analysis. This size reduction in outlays most likely will have to be made by cutting military and civilian personnel and by closing bases. A
cut of this magnitude in 1 year, in our opinion – assuming that we do not want to do away with research and development and assuming that we do not want to do away with procurement –
most likely would require a civilian personnel cut of between 700,000 and 800,000. In my opinion, this massive, undirected cut would create such turmoil and turbulence in our military forces and would require such cuts in forces, bases, and hard military muscle that it would
be totally irresponsible.
I think we should be aware of this as we work our way through this admittedly difficult process involving the concurrent resolution.
Mr. STENNIS. Mr. President, will the Senator yield me 1 minute?
Mr. NUNN. I yield.
Mr. STENNIS. Mr. President, I commend the Senator for the work he has done on the Budget Committee. He has been working consistently for reductions.
His analysis as to the figures, as I understand them, is undoubtedly correct. Reductions already have been made by the Armed Services Committee in the authorization bill for hardware, weapons, R. & D., and related matters – substantial reductions. Still, it would not meet the requirements of this budget resolution in its present form because of the discriminatory portion that applies to the Department of Defense, and it would be brought right on over into the personnel. Those reductions and outlays would have nowhere else to go. They fall into the category of civilian employees and the uniformed men. It would not apply to retirement; it would not apply to other things. It would have to fall into those categories with respect to reductions. It would be indiscriminate, nationwide, and it would have to be perfected in a short time.
The PRESIDING OFFICER. The Senator's 20 minutes have expired.
Mr. NUNN. Mr. President, I ask unanimous consent that we might have an additional 6 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered. The time will be equally divided between the Senator from Georgia and the Senator from Maine.
Mr. NUNN. The Senator from Maine has been very kind in allocating to the Senator from Georgia a good portion of his time.
In response to the Senator from Mississippi, I say that I agree completely with his analysis. It might be that we could find some more in R. & D. and procurement by taking out items we have
not taken out so far. I feel that we have cut pretty severely already.
Even if we found another billion dollars in R. & D. and procurement, beyond the billion dollars that Senator McCLELLAN is going to find – and this is by approximation – if we are going on with this budget outlay reduction, with massive layoffs of civilian employees of the Department of Defense and with massive base closings, we are going to see the reduction of our forces which are already below the Korean war level; and if we cut some more in committee, we are going to see that number go down beyond what anyone would prudently want for the national security of our Nation.
I thank the Senator from Maine for being most generous with his time.
Mr. MUSKIE. I am more than happy to do so. I still feel defensive about this morning's foul-up, and I am happy to contribute in the way of time and information in any way I can. I am not sure that I can do it in 3 minutes. I hope I can use time out of my hour on the pending measure, in order to cover the matter more thoroughly. First, let me make this point The concurrent resolution this year does not contain targets on functional categories. The only numbers in the concurrent resolution this year having to do with the Defense Department budget is the
overall outlay target of $367 billion, and the overall budget authority target of 395.8 billion as a result of the conference report. How the $367 billion is to be divided among the 16 functions of the budget has yet to be determined finally by Congress and by the committees. It is our hope that as we move through the appropriations process, the guidelines which the Budget Committee has developed with respect to the functional categories will be examined closely by the authorizing committees and by the Appropriations Committee, so that we can come close to the overall target of $367 billion when our work is completed.
To ignore the functional categories as they have been developed by the Budget Committee, I think, would be to lose a very important disciplinary tool. They are not binding. That should be made clear. We deliberately chose that course this year, because we felt that it would be difficult enough for the Senate and the House to adjust to this discipline with the overall totals, without getting into these 16 functional categories in a binding way. So I make that point. Second, with respect to the category 050, which is the defense category, there was a difference between the House number and the Senate number, going into conference, of $1 billion. The Senate amendment assumed outlays of $91.2 billion, and the House resolution assumed budget outlays of $90.2 billion. The House conferees, on the basis of a vote which was taken on the floor of the House, took the position that their $90.2 billion was sufficient to absorb the impact of lifting pay caps. They assured us that from their point of view, their $90.2 billion ceiling, which was $500 million lower than ours, was sufficient to absorb the impact of lifting the pay caps.
That number, the staff tells me, is $600 million for retired pay and approximately $1.2 billion for active duty pay, so that the total impact is $1.8 billion. The House took the position – they are very strong about it – that their $90.2 billion ceiling on defense would absorb that.
What other differences were there between the House numbers and the Senate numbers which in their view justify that conclusion? There are two, mainly. One, they had eliminated all military assistance for Southeast Asia. That number was $1.4 billion in outlays in the President's budget base. Only $500 million had been eliminated. Our action had been taken before the collapse of South Vietnam. So the House had eliminated $900 million more in their defense budget total than the Senate budget had done. In addition, the House had deducted $900 million in outlays from so-called financial adjustments.
Mr. President, I ask unanimous consent to have printed in the RECORD the detail on what the House had done with respect to financial adjustments.
There being no objection, the material was ordered to be printed in the RECORD, as follows:
[Table omitted]
Mr. MUSKIE. With those two figures – $900 million in financial adjustments and $900 million more in military assistance to Southeast Asia – they had $1.8 billion, which in their judgment covered the decision they had taken on pay caps. This is where the numbers came out after our discussion.
The House was adamant in its position, because the House had taken a vote, and that vote was critical to passage of the concurrent resolution in the House. The resolution passed by just four votes. So the House conferees were not about to upset that decision on pay caps.
The PRESIDING OFFICER. The Senator's 3 minutes have expired.
Mr. MUSKIE. Mr. President, may I have 5 minutes out of my time on the pending measure, rather than additional time?
The PRESIDING OFFICER. The Senator from Maine is recognized for 5 minutes.
Mr. MUSKIE. The Senate conferees, on the other hand, did not feel that we were in a position to commit the Senate to a lifting of the pay caps without having had a vote on it in the Budget Committee or a vote on it on the floor of the Senate. So we felt it unresolved so far as the Senate conferees are concerned, and I apologize for the ambiguous language in the report. I shall read it, because it was intended to bridge this gap between the Senate and the House conferees. The only reason we did it this way was that we do not have ceilings on functional categories in this year's resolution. We only have the overall. This is what we put in the report–
If Congress should decide not to limit increases in Defense salaries and retirement allowances, there are sufficient funds within this total to support that decision.
The first half of that sentence is a gesture toward the Senate; the last half of that sentence is a gesture toward the House.
Next year, we cannot do that sort of thing, because next year we will have ceilings in the resolution on each of these 16 functional categories, and we cannot get that kind of ad hoc compromise between the two groups of conferees.
Mr. President, I must say that I have found the distinguished Senator from Georgia a very useful and effective source of information on the defense budget in the Budget Committee deliberations. I compliment him for the interest he has taken and for the effort he has made to raise these questions this afternoon. These are matters that the Senate should consider head-on and directly, so that we just do not slide around them. I appreciate that.
Where we are on this point on the Senate side is that a decision has not been taken in any committee, so far as I know, with respect to lifting pay caps. That decision has not been taken. That is yet to be taken.
Second, the decision has not been taken on what should be done with the overall defense number if the cap is lifted. Nobody, so far as the Committee on the Budget is concerned, has made that decision.
Mr. NUNN. On that point, will the Senator yield for one question?
Mr. MUSKIE. Yes, I yield.
Mr. NUNN. I believe the Senator has already made this clear, but to make it abundantly clear, did the conferees intend to make massive cuts in Government DOD personnel, either civilians or military or both, in this report? Was that an intention of the conferees?
Mr. MUSKIE. It was not. As a matter of fact, that subject was not discussed.
Mr. NUNN. I used the word "massive." I ask, for example, did the conferees intend to make cuts as much as 100,000 people in personnel?
Mr. MUSKIE. No such intention was expressed on either side of the conference. Our discussion of the defense number was pretty much limited to – I think totally limited – to the question of the money available from military assistance to Southeast Asia and the financial adjustment item.
Those were the only two. We did not take a position with respect to personnel or with respect to the other matters which the Senator has properly raised. Whether or not in the language of the report there are sufficient funds within this total to support that decision would depend upon individual senators' views on what our total spending ought to be for defense. It is not a position that has been taken so far as the conference is concerned. I am delighted to clarify that point.
Mr. DOMENICI. Will the Senator yield?
Mr. MUSKIE. I yield to the distinguished Senator from New Mexico, who was a very valuable member of the conference for the Senate.
Mr. DOMENICI. I thank my distinguished chairman. I might answer that question also for the distinguished Senator from Georgia.
As he will recall, on the Senate side, throughout the debates on the budget, we discussed only the administration's proposed 50,000, more or less, troop cut in the President's $94 billion outlay budget, and various efforts were made to say we could cut substantially more troops. I think the Senator will concur that on the Senate side, we continually voted, repeatedly voted those down in arriving at our $91-plus billion outlay figure.
There is nothing in the record, in conference, which would indicate that the compromise with the House, where we basically split the difference in outlays, we intended to depart substantially on the position we had taken with reference to troop strength or overall civilian or military strength, other than as was recommended in either the Senate appropriations recommendations or the president's budget. I think we at no time contemplated massive personnel cuts of the type the Senator has described.
The hangup is a very difficult one, because they were mandated by a resolution on caps, as the Senator knows. We were not. The Senate did not mandate in that regard.
Basically, I think when we are saying if the caps are put on, there is enough money in the budget, it should not be construed to mean that we are saying that if the Senate feels that the amount herein is needed, and then more is needed for the caps, and the House insists that it be taken out of the meat, muscle, and personnel by the amount described by the Senator, either 1.2 or 1.9 depends on whether we treat retired and all active personnel the same.
Mr. NUNN. I thank the Senator.
Mr. President, I ask for 5 more minutes of my time on the main bill, rather than additional time, for this.
I thank the Senator from New Mexico. I thank the Senator from Maine.
As I have said before, I think the Senator from Maine has done a yeoman job in getting this resolution through in time for the statute. He has done an excellent job on committee, he has spent hundreds and hundreds of hours. This is the most difficult assignment I think anybody could have this year. It is difficult enough in any year, but in a budget year, when we have, no matter what we do, an inevitable deficit, it is difficult. This dialogue today in no way reflects on my admiration for the tremendous job the Senator from Maine has done.
I understand the background and the compromises that were necessitated, in all likelihood, in the committee report. But I do think it is important for the Senate and Congress to realize that we think, based on an analysis of this particular resolution, the likely result of it is that we are going to be saying to Department of Defense personnel, we are going to raise your pay, but we are going to take your job away. We think that is the only result that can flow out of this unless there are some changes and adjustments made as we move through the processes, and unless we decide to cut somewhere else in order to prevent a massive loss of jobs by civilians and by military personnel.
In closing, I again would like to emphasize that I am taking no position on the question of caps at this time. We did not ever confront that directly in committee. We have not confronted it in the Committee on Armed Services. I know there are strong arguments on each side.
But what I have felt and am prepared to point out in this colloquy is the likely result that could flow from this particular provision.
Mr. MUSKIE. May I say in closing, Mr. President, that I appreciate the remarks of the distinguished Senator from Georgia. I assure him of this: as far as the Committee on the Budget is concerned, we are involved in a learning process. We have much to learn from the Committee on Appropriations, from the Committee on Armed Services, from the other authorizing committees. We shall undertake, through the course of the weeks between now and next September, to follow the deliberations of the authorizing committees closely so that we can become more familiar with the values and the imperatives of all of these programs and all of the 16 functions of government.
We shall particularly monitor this one. With the help of the distinguished Senator from Georgia, who is a member of both committees, I am sure that we shall improve our ability to respond to the national interest in all of these competing fields – and they do compete. That is one thing we see in the Committee on the Budget and so we saw in the conference committee, the intensity of the competition between all these programs, all these interests, for the Federal resources. It is a tough competition to be in the middle of.
I am most grateful to the distinguished Senator from Georgia for raising this subject this afternoon.
Mr. McCLELLAN. Mr. President, I ask unanimous consent that I may use 1 minute of my time on the consumer bill.
The PRESIDING OFFICER (Mr. HELMS). Without objection, it is so ordered.
Mr. McCLELLAN. Mr. President, I have listened with interest to this colloquy. I have prepared a statement that I would have made had I had the opportunity to be here at the time the conference report was considered. I had no notice of it. I did not know it was going to be brought up.
Therefore, I ask unanimous consent to have this statement printed in the RECORD at this time.
The PRESIDING OFFICER. Without objection, It is so ordered.
STATEMENT BY SENATOR McCLELLAN
The FY 1976 budget request for National Defense is $107.7 billion in new budget authority and $94.0 billion in outlays. After careful consideration of all the factors involved in the required March 15 report to the Budget Committee, the Committee on Appropriations recommended a target ceiling on budget authority of $5.2 billion below the budget request and an outlay reduction of $2.1 billion. It was the judgment of the defense Subcommittee that this reduction was the absolute maximum that could be made in defense spending consistent with present national security requirements and the prevailing atmosphere of international tensions. Some Subcommittee members were convinced that this reduction was too great, and they may prove to be right. Anyway, no member at that time indicated that he thought it could be further reduced.
Nevertheless, in its report, the senate Budget Committee further reduced National Defense budget authority by $1.5 billion and outlays by $0.7 billion over the amount of the outlays recommended by the Committee on Appropriations. The Conference Committee then further reduced these estimates by $300 million in budget authority and $500 million in outlays.
In summary then, the Conference Committee reduced budget authority $7.0 billion below the President's request with an accompanying reduction in outlays of $3.3 billion.
This further reduction in defense spending I believe can prove hazardous and if this trend continues may soon imperil our national security. The burden of reordered priorities and reduced spending should I believe be borne more equitably by all sectors of the budget and not by National Defense alone.
In addition to my concern over the total magnitude of spending cuts recommended by the Conference Committee, I am also quite concerned that the outlay reductions are not commensurate with either the budget authority reductions made or with the implicit assumption that there will be little if any civilian or military personnel reductions. The Conference Committee report states "If Congress should decide not to limit increases in Defense salaries and retirement allowances, there are sufficient funds within this total to support that decision". In fact, removal of the "pay cap" will require approximately $1.8 billion more in outlays than originally estimated for the Defense Department, and this will be additive to the Conference Committee's reductions. This means that Defense will need to make a total outlay reduction of $5.1 billion. Without very substantial personnel reductions, military or civilian or both, I see no way to achieve such a large outlay reduction without making reckless and irresponsible additional reductions in defense spending.
As stated previously, the report of the Appropriations Committee to the Senate Budget Committee suggested that a budget authority reduction of $5.2 billion, coupled with an outlay reduction of $2.1 billion, was at that time deemed feasible. These figures assumed that the "pay cap" proposed by the President would be placed on civilian and military salaries. Quite frankly, after holding the majority of our hearings on the Defense budget for fiscal years 1976, it now appears that it may not now be advisable to meet the spending reductions recommended by the Appropriations Committee and certainly not the additional cuts implicit in the Concurrent Spending Resolution.
Mr. McCLELLAN. I make this further observation: I have tried to take a middle ground on this issue between cutting the military, slashing it $10 billion or $15 billion or so each year, and continuing to spend more than a lot of people think is necessary. I have tried to take a middle ground.
I believe that is the sensible thing to do.
This year, at my urging, the committee, particularly the Defense Subcommittee, reported out and recommended a cut of $5 billion, as I recall it, as we had in the year previous. As we hear the testimony now in these hearings, it is becoming apparent to me that it is going to be most difficult to meet this ceiling, to hold it within the ceiling that we have recommended, unless we are willing, as pointed out here by the distinguished Senator from Georgia, to make considerable slashes in personnel of our military establishment, or to cut drastically in research and development, or to cut drastically in our weapons procurement program. It has to come from somewhere.
We are getting it down to a bare-bones situation, in my judgment, taking into account the dangerous conditions in the world today.
I think we better stop, look, and listen, Mr. President, before we go too far in the wrong direction.
Mr. PERCY. Mr. President, I again commend the distinguished chairman of the Budget Committee and the members of the committee, including the ranking Republican member and the minority members.
I ask one question, and I am sorry I was not able to be here for the beginning of the discussion. As I understand the conference report, it does contemplate an expanded public employment program and includes $2 billion for either countercyclical State and local government fiscal assistance, or new public works projects. It essentially splits the difference between the Senate and the House passed bills; is that correct?
Mr. MUSKIE. In dollars, of course, the Senate provided nothing for either of these approaches. When it was clear that, we would have to move toward the House outlay figure, we then undertook to make the case for countercyclical assistance, as contrasted to local public works projects.
Because the House felt very strongly about its local public works approach, what we did again, was bridge the gap by opening the door to both for consideration of the Senate and the House, but we put in $2.1 billion as the outside figure.
Mr. PERCY. I have one last question, to ask our distinguished colleague, because I think his preeminence in this; field, his judgment, and his opinion will be a very helpful factor.
As he knows, the Senator from Illinois has been very concerned about our passing a bill which gives back a lot of tax rebates to people who realize that we are giving it back when we do not have it to give. We are just adding to our debt. We are going out to borrow this money that is being given back from taxes already paid in order to stimulate the economy.
The Senator from Illinois hopes that it is going to stimulate the economy, but he has a high regard for the intelligence level of people who are going to wonder why they are getting the money back when they know it is just simply adding to the Federal debt.
It is the opinion of the Senator from Illinois that the people of this country are willing and ready to pay for more of our cost expenditure programs as we go along rather than constantly adding it to the Federal debt.
Would. the distinguished chairman of the Budget Committee look with an open mind and with some degree of favor to revenue-raising measures that might be introduced; such as gasoline tax, increased taxes on tobacco and alcohol and other kinds of taxes, including removal of, say, the deductibility of State and local gasoline taxes from our Federal tax return and the dyeing of fuel oil so that it cannot be used in diesel trucks and thereby get around the tax imposed on diesel fuel by State and Federal Governments? We have a tremendous amount of fraud in that area, which could virtually be eliminated, as Canada has done, by simply dyeing the heating oil so that it cannot be used in diesel trucks.
Would the distinguished chairman of the Budget Committee look with favor upon enacting measures now that will help bring in revenue to start to pay for some of these new programs that we have instituted to help offset the recession and also try to bring down the deficit, hold this ceiling that we have now imposed, and possibly give up a little more margin to spare?
Mr. MUSKIE. Of course, the conference report does now commit us to tax reform legislation, which would have the effect of raising revenues on a selective basis in the interest of reform as well as funding some of these outlays.
Apparently, there is also in motion something in the order of an energy tax of some magnitude. There is some wide difference of opinion on what that ought to be.
If we really want to begin a program of energy conservation and energy research and development, I think we are going to have to move in that direction. It is a question, in my judgment, of timing.
I would not want to see any substantial increases of taxes of that order at this point, when we are trying to move the economy upwards for the benefit of the stimulus that we have in this budget.
But I think as we recover, as we move out, then we have to begin to look at energy taxes, for example, for the purposes I have described and perhaps beyond.
I would not want to see the reduction in the progressive income tax offset by increases in more regressive kinds of consumer taxes. I think that would be extremely counterproductive, not only in the short term but in the long term.
But I think the Senator is absolutely right in focusing upon the importance of taking at the right time those steps with respect to revenues as well as outlays which would move us toward a budgetary balance in due course, as the result of a rational kind of process, with that target in view.
Mr. PERCY. I thank the Senator for his comments. We thank him for the tremendous devotion he has had to this principle and concept, which is virtually revolutionary to the Congress of the United States.
Think of it: For us to really be now a responsible body, to think in terms of an overall budget, and to relate each of the budget bills that come on board, the appropriation bills as they are voted on, to see how it fits in the context of an overall budget.
I also express great appreciation for the work that has been done by the Appropriations Committee, who have done a Herculean job and who have understandingly looked upon this as a device that can be extraordinarily helpful to them, because they had really been fighting the battle all alone before. Now we are all a part of that process.
So I hope that we will scrutinize very carefully our expenses, make absolutely certain, as to every bill we bring on to the floor of the Senate, that we either see that it fits within the guidelines that we have tried to establish or that we produce new revenue for it or drop out other items of lesser priority.
I think it will be a tremendous encouragement to the American people if they see we are running the American family now, in the appropriation, authorization and budgetary process, very much as any well-ordered family must operate for themselves, or a business operates, and the business of government should be run in a businesslike way. I think we have made a giant step forward. with the cooperation of every Member of the Senate.
Mr. MUSKIE. I thank my good friend from Illinois.
Mr. MAGNUSON addressed the Chair.
Mr. MUSKIE. I would like to say just a word, if I may, about the time frame in which we operate.
We found this morning that the 30 days the Budget Act provides for say, congressional action on the resolution is a very tight period. Each House must act, and the House incidentally must wait 10 days into that period before it can move on the first concurrent resolution, so we may find it necessary to stretch out this period so that we will not be caught in a kind of a bind which regrettably deprived the Senator from Georgia (Mr. NUNN) of the opportunity to make the points he made this afternoon before the senate finally voted, because the purpose of this is to give every Senator and every committee an opportunity to make an input into this process.
Mr. President, I yield to the Senator from Washington.
Mr. MAGNUSON. Mr. President, I yield myself 2 minutes on the bill. I want the record to show that had there been a roll call vote this morning I would have voted "aye" on the conference report.
When the Senator from Maine talked about the difficulties timewise yesterday the full Appropriations Committee appropriated some $9.5 million in the supplemental over and above what we would consider. It was after the fact.
We are going down right now to consider almost half a billion dollars for the Vietnam refugees.
All of this stuff adds up, and most of it is sent up by the Office of Management and Budget, by the administration, and it is of an emergency nature. So, of necessity, it would be pretty hard, with all of the time spent by the Budget Committee in the past 2 or 3 months, to anticipate these things, and they are going to amount to another $20 billion.
But the reason I want to vote for the conference report, I do think that the conferees and the two committees did a magnificent job in anticipating some of these things. In my own HEW bill how do I know exactly what it is going to be? Usually that is taken up by the budget, by all of us here, but you give us, I think, enough leeway in which to take care of these matters and establish some priorities that are long needed.
There will be a fight about establishing priorities. As the Senator from Maine well knows, everybody competes with everybody else, and even within HEW itself they compete with one another as to who gets what, and this is so in the health research field. But I think this first stab at this budget control was overall a good one, and I want the record to show that I would have voted "aye" had there been a roll call vote on the conference report.
MUSKIE. I thank the Senator. I might say that the consolidated supplemental is covered in our totals.
Mr. MAGNUSON. Yes.
MUSKIE. And also the humanitarian assistance for the refugees.
MAGNUSON. Health programs.
Mr. MUSKIE. All of these are covered. But it is difficult to anticipate.
Mr. MAGNUSON. It is difficult to estimate this. You do not know.
Mr. MUSKIE. Yes.
Mr. MAGNUSON. So I think on our first stab at this thing there is enough leeway work out these things.
Mr. MUSKIE. We will learn as we go
Mr. MAGNUSON. We will have to learn as we go along.
Mr. MUSKIE. I yield the floor, Mr. President.