April 29, 1975
Page 12329
Mr. MUSKIE. Mr. President, I express my appreciation to the distinguished Senator from California for his statement, and for his dedicated efforts in the work of the committee.
I think the Senator's description of his disagreements in the social area are appropriate as a part of the debate this afternoon, and really highlight the problems we will face a year from now when we have to work out those differences on the Senate floor.
Mr. CRANSTON. I thank the chairman very much, and I again applaud his leadership of the committee.
In behalf of the Senator from South Dakota (Mr. ABOUREZK), I ask unanimous consent that Alan Chvotkin of his staff be accorded the privilege of the floor during the consideration of the budget concurrent resolution.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MUSKIE. Mr. President, I yield to my good friend the Senator from New Mexico (Mr. DOMENICI), who has been such a valuable member of the committee.
Mr. DOMENICI. I thank the Senator.
First let me say, Mr. President, that I wish to congratulate our distinguished chairman, the ranking Republican member, and all the other members of the committee.
Two years ago, when I came to the Senate, the 13 freshmen Senators, after about 6 months of watching appropriation bills come to the floor that we could not understand, that had no relationship one to the other, nor to the spending total, authorized a letter to our bipartisan leadership. We said to the leadership, "We are disposed to stop voting on appropriation bills, or to vote 'No' on them all, because we just do not understand what it is all about. We would have to carry calculators around, because these spending bills do not relate to any priorities relative to one another, nor even to any time frame."
We requested a meeting with our leaders, and received assurances from them that they, too, were concerned, and would join with us in pushing for expeditious hearings before the Committee on Government Operations and others on budget reform.
I really did not think, Mr. President, that we would be here today, so soon after that, with a historic first: The beginning of budget reform, for the first time in some 5 decades, for the U.S. Senate and Congress.
I wish I could say that with this resolution, which we expect to pass tomorrow, which I support and am confident will pass, we will have completed the quest of those 13 freshman Senators, and will be able to say that budget reform is really a completed fact. I think our optimism here on the Senate floor should be tempered a little bit by the fact that we are just beginning. We have come to the Senate today with a concurrent resolution and some essential recommendations in regard to its components that I think are tremendous and make great sense. On the other hand, we could not have chosen a more difficult time to begin this budgetary process.
I think perhaps there are two ways to look at that. Perhaps the easiest way out would have been to say, "Let us wait until next year," for that is when we were given the mandate. We were only given the option to begin this year. But another way to look at it is that when we start something in difficult times, times more or less calculated to make it fail, if it does work then, it is probably here for a long time and will become a very meaningful part of the most important policy-making component of the U.S. Government, which is its budget.
We can talk about policy statements by those in positions of power, but American citizens, local governments, and people out in the field in American business recognize that the budget, the document which determines how we spend money, is the policy decided for America. Not
who says what, but where we spend, determines the policies of this great Nation.
SUPPORT FOR THE BUDGET RESOLUTION
So, Mr. President, I support the Budget Committee's concurrent resolution despite my reluctance to see the Federal debt increased by the $67.2 billion deficit. I am convinced that revenues will run somewhere between $295 and $300 billion and that outlays cannot be kept significantly under the $365 billion contemplated by the resolution. Spending can be held to that figure only if we in the Congress have the courage to exercise the most careful fiscal discipline based on constantly updated budget information. We must be prepared to make hard choices among the many meritorious programs making demands on the same dollars.
MINIMAL SHORT-TERM CONTROL
During the several months of intensive work by the Senate Budget Committee, it has become clear that only minimal control can be exercised over outlays in a single budget. If the congressional budget process is to achieve any substantial portion of the benefits claimed for it by its supporters, the Budget Committees and, in turn, the Congress at large must base current actions on constantly corrected projections of long-term effects.
DEFICIT: THE RESULT OF PRIOR DECISIONS
The outlays for fiscal year 1976 are for the most part the result of prior actions which are impossible to reverse in the short run. The deficit which has occurred in this fiscal year and the deficits which will occur in 1976 and in the next 2 fiscal years are clear signals. The Federal Government, if it is not to remain a prime cause of "boom-bust" cycles, must use the budget as the means for defining its areas of responsibility. Complete responsibility for, and control over, other actions must be left to the States, the cities, the counties and the people themselves.
We will need to abandon some programs, accept full responsibility for others and leave to the good judgment of the people and their local officials the establishment of priorities in the non-Federal areas. The Federal Government must attempt less but do that "less" very well.
"BOOM-BUST" CYCLES
In the years since World War II, this country has suffered five "boom-bust" cycles of varying intensity and duration. The present recession is the most intense and promises to be of the longest duration of any economic catastrophe since the Great Depression. The Budget Act process can be a significant tool in dampening the violence of the cyclical swings if technical competence is accompanied by political courage.
RESTRAINING STIMULATIVE SPENDING
While I disagree with many of the economic theories which have currency today, I am convinced that something like the full-employment budget concept is useful in establishing a ceiling for outlays not related to the recession. To the extent that expenditures in excess of the full- employment budget amount are adopted by Congress, good fiscal management dictates that such outlays end as economic recovery begins. The mechanisms for detecting and reacting to early indicators of changing economic conditions must be perfected and applied if we are to avoid action which is "too much, too late."
PRIVATE SECTOR IMPORTANCE
It is my belief that economic factors largely outside the control of the Federal Government are much more significant than many economists admit and that incautious acceptance of unverified economic theory can cause substantial fiscal and monetary policy errors. I am convinced that the private sector contains great internal strength when allowed to operate in an essentially free market environment.
This resolution is based upon a very moderate involvement of Government in management of the economy. Much room should be left for the operation of market mechanisms. If stimulative spending is carefully related to the state of the economy and is moderate in amount, the interference of Federal fiscal policy with the productivity of the private sector will be minimized, assuming that monetary policy is also moderate.
FINANCING THE DEFICIT
The financing of the additional Federal debt that will result from the massive deficits for 1975, 1976, 1977, and possibly 1978 will place severe strains on the capital markets. Careful and skillful management will be required to accomplish this financing without, on the one hand, aborting economic recovery by crowding the private sector out of the capital markets and without, on the other hand, so increasing the money supply as to create an inflationary push into a new "boom-bust" cycle. Sustained economic stability can only be achieved by an adequately financed private sector developing and utilizing productive capacity to satisfy, at stable prices, the needs of a work force which is nearly fully employed at good but stable wages. The task will require superior monetary judgment and painful fiscal restraint.
CONCLUSION
The Congress is now embarked on a difficult reexamination of the role of the Federal Government in our system. Having, in prior years, tested the outer limits of our capacity to solve perceived problems by disregarding the finite limits of the resources available, we made our system vulnerable to outside events such as the oil embargo and the worldwide food shortage. This must not happen again. We owe the people of this country the freedom to pursue their happiness without fear that well-intentioned but poorly conceived and clumsily executed government programs will wreck the economic framework of their lives.
We must discipline our spending actions in the future by constant reference to accurate and current information. There is no hope of staying within spending limits if the individual components are uncontrolled. "Business as usual" will cause us to fail our fiscal responsibilities.
Assessing blame for the situation which forces us to accept the presently inevitable, by way of deficits, will divert us from our task of solving the short-range problem in a way which is minimally destructive to our future.
While I might disagree with certain aspects of the budget presented in the resolution, I am unable to find acceptable options for reducing outlays in ways which would significantly diminish the total. I urge that we promptly approve the resolution and move on to the difficult task of so reordering the future of the Federal Government that the people of this great country are relieved of the cruel burdens imposed by an unstable economy; economic instability resulting, in large part, from our failure to look at the long-run effects of our present actions.
I thank my distinguished chairman for yielding.
Mr. MUSKIE. I thank my good friend from New Mexico for his excellent statement.
I think it might be useful for the record, Mr. President, to indicate some of the disabilities under which we have tried to make this process work this year compared to the circumstances which we expect for next year.
In the first place, in a normal year the committee and Congress would have the benefit in November of the preceding year of a current services budget submitted by the President of the United States.
That current services budget was not available this year, and thus our work, as a committee and as a Congress, on the President's budget could not really begin until his regular budget submission on February 3. That was a loss of more than 2 months in working time which we will not face a year from now.
Second, a year from this fall we will see the inauguration of the new fiscal year which will begin on October 1 of 1976 as compared with July 1 in this year of 1975.
Now those two dates, taken together, mean that next year we will have 11 months from the beginning of this process until its conclusion, whereas this year we have technically only from February 3 until July 1 if we were to operate within the constraints of the fiscal year. Those are very real limitations.
Then, finally, Mr., President, this year the Budget Committees were not created until August, and we began the process of organizing and staffing them in late August and September but did not really complete the formation of the core staff until about January or February of this year.
That also was a limitation, and although the staff has responded in outstanding fashion to the constraints of this year, I am hopeful that next year they will be able to perform even better.
It also took some time to get the Congressional Budget Office off the ground. There was, of course, a long period of consideration and evaluation of candidates as Director of the Congressional Budget Office. Both the House and the Senate regarded that as a key appointment. There were several outstanding candidates available, and the process of accommodating the two Houses to a final selection was more time-consuming than we had expected.
It was not until Congress came back this year that we were finally in a position to agree on a Director in Dr. Alice Rivlin, who is proceeding with the organization of that office.
Unfortunately, that office has not been available to assist the two Budget Committees in connection with this budget. A year from now they will be in place, staffed and organized, and in a position to make a solid contribution to our work.
So for all of these reasons, I suppose we could find excuses for not undertaking to do what we are doing today. I am so pleased that with all of those shortcomings, we were in a position to move as effectively as I think we are moving today.
The fact that we are not able to get into a debate on the 16 functional categories deprives this debate of some of the priority issues that we will have to face next year, and that may be a loss. But, on the other hand, getting prepared for that kind. of debate may well take the kind of flexibility that is built into this year's procedures.
I again would like to thank my good friend from Oklahoma for making it possible by his cooperation and his patience for us to come to the Senate as fully prepared as I think we are.
Mr. BELLMON. Mr. President, will the Senator yield?
Mr. MUSKIE. Yes, I yield.
Mr. BELLMON. I thank the Senator for paying the Senator from Oklahoma a tribute he does not deserve.
I thank the Senator also for pointing out the constraints the Budget Committee worked under this year, but I also invite the chairman to bring the Senate up to date, if he will, on the Congressional Budget Office. This might serve other committees and other Members if we know how soon the Congressional Budget Office will begin to function and what services we might expect from it.
Mr. MUSKIE. We now have about 30 persons on board in the Congressional Budget Office. We have temporary space arranged, part on the House side and part on the Senate side of the Capitol. So the Congressional Budget Office is operating under very difficult circumstances.
I think both the Senator and I, as well as Representative BROCK ADAMS on the House side, assured Dr. Rivlin that she ought not to concern herself with the needs of this budget; that it was more important for her to gear up and prepare for next year, and that is her focus at the present time.
She is putting together a professional staff. She has available to her qualified people in the academic world and people who have had experience in the Federal budget practices, and so I think her staff is going to be outstanding.
Her function, as she sees it, and I concur with her fully, is the development of options for the Congress to consider – options to set against the President's options.
The essence of this budget process is the making of choices. I think it is clear from the debate we have had this afternoon, that we must learn to choose among our limited resources. We have to learn to say no, learn to discriminate between programs, learn to select those which are most clearly at the top of the list in terms of the country's interests.
So I think the first obligation is that of developing the options which the Congress ought to consider next year, in all of these functional areas from defense to education, environment, transportation, and energy.
Dr. Rivlin does not see the office as that of an advocate. I think we would agree with that. It is not the function of the office, the Director of the CBO, to impose the economic philosophy of the Director or of any staff member of the Congressional Budget Office, but it is their responsibility to present us with the options.
Second, it is their responsibility to keep us on track with respect to the costs of the options we adopt.
One of the important requirements, it seems to me, to make this process work is that from the moment Congress adopts a first concurrent resolution until we act finally in September to nail in place our budget decisions, we have got to stay on track in terms of the budgetary consequences and implications of every decision we make in between. Every appropriations bill, every authorizations bill, every policy decision that we make has to be kept on the track which we will set in motion with this first concurrent resolution. .
The Congressional Budget Office has a very important function in helping us to do that, so that every time a vote is taken on the Senate floor which has an impact upon the budget, upon the decisions we have made, each Member of the Senate will know what the consequences are in terms of the budget.
Now, going beyond that, of course, the Congressional Budget Office has long term responsibilities of enormous consequence, but I think we can get into that at another time.
Mr. BELLMON. I thank my distinguished chairman and I believe that once the Congressional Budget Office is functioning, as it will be when we begin consideration of the 1977 fiscal year budget, it will be in a better position to deal with the problems than this year.
Mr. MUSKIE. May I make one other point, and then I will yield to my good friend from Delaware.
The Senate might be interested to know how we proceeded through the process of bringing these numbers to the Senate. We did so by taking up each of the 16 budget functions of the Government, which are reflected on the chart at the back of the Senate Chamber.
We debated each of these 16 functions, not in terms of particular programs, but in terms of the way the resources were needed by these various functions in our Government, from a priorities point of view.
When we got through that whole process, then, and only then, did we add up the numbers. Those numbers came to $365 billion.
Now, those numbers reflect a wide disagreement within the committee about how much should be spent in particular functional categories.
So each of us, as a member of the committee, had to decide whether it was more important to agree as a committee on an outlay ceiling and on a deficit, or more important to pursue our individual priorities.
We decided, as the vote of the committee will indicate, that it was more important that we come to the Senate in agreement about an outlay ceiling and a deficit ceiling than to come to the floor debating again our differences as to priorities.
We believe that this ceiling will accommodate the priorities, the essential priorities that are represented in the Senate as a whole.
Beyond that, it will have a disciplinary impact upon our disposition as individual Senators to vote for good programs as they come along, not simply because they are attractive.
This ceiling imposes some discipline, but it also provides an opportunity for rearranging priorities in accordance with the differences which are so well known to Senators individually.
At this point, I yield to the youngest member of the Budget Committee, who already has gone so far to establish the role of juniority in the Senate being a member of both the Foreign Relations Committee, which I had to leave in order to come to this Budget Committee, and the Budget Committee.
As always, the Senator is a very articulate, vocal and vigorous Member of the Senate. We are delighted to have him on the Budget Committee.
I yield to the Senator at this point for whatever time he may need.
Mr. BIDEN. Mr. President, I thank the distinguished chairman very much for those kind words and ask unanimous consent that Richard Andrews of the Budget Committee staff be granted privilege of the floor during consideration and votes on Senate Concurrent Resolution 32.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BIDEN. Mr. President, the Senate today begins consideration of its first budget resolution.
I believe that this marks the beginning of a new era of responsible fiscal policy for our country.
This is the day when Congress starts looking at the whole budget, not just the pieces.
This new process, which is built upon the strong foundations developed by the Appropriations and Finance Committees, is surely one of the most important things that has happened in American Government in many years.
I believe that the Senate Budget Committee has done a good job.
The members have worked together, disagreed together, and finally come up with a budget that most members felt was supportable and proper under our current economic circumstances.
I hope to see this responsible view of the process continued here on the floor of the Senate in the next day or so.
Trying to put together a budget this year was not an easy task, given the problems of organizing the committee and its staff, and embarking on a new venture.
However, it was important to start this year to provide as much fiscal guidance as possible in these difficult economic times.
The credit for the success that I believe we have had goes in large measure to the careful guidance provided by the committee's chairman, Senator MUSKIE.
Senator MUSKIE deserves the commendation of the entire Senate for his willingness to undertake the chairmanship of this new endeavor. In fact, to give up for this new process, particularly, the Foreign Relations Committee spot which is so sought after by many of us.
Ever since a group of Senators sat down around a table last summer to organize this new committee, he has carefully pointed it in the direction which has led to what I believe to be a remarkably good end product.
I would also commend all of the other committees of the Senate for the spirit in which they have entered into this new process.
They have given us careful and thoughtful reports about the budget as they saw it, which have really formed the base for our decisions. In addition to the formal reports, the members and the staffs of the committees have been most helpful in providing information which we needed to do our job.
I believe that this cooperative effort is a good sign for the future in the Senate.
I think one other thing should be said about this new process, and that is that it. is not quite as new as some Senators make it out to be.
There has been a myth around that the Congress never looks at financial matters, and is totally irresponsible in dealing with them.
The fact of the matter is that the Appropriations and Finance Committees in the Senate, and their counterparts in the House of Representatives, have been looking at our money problems for a long time.
These committees have many knowledgeable members, as well as staff, and their work forms the base on which this new process is built.
Getting now to the resolution, Mr. President, I would urge my colleagues to support the committee's efforts.
I realize that there is probably not a Senator here who could not find something to disagree with in the committee report or with the total figures in the resolution itself.
I do not subscribe to every word of the report myself.
I do believe, however, that the committee's recommended figures contained in the concurrent resolution are supportable at the present time.
By and large, the $365 billion outlay target represents a fairly tight spending level.
Some would wish that the figures were higher, and others that they were lower, which is one thing that makes me think that they may be just about right.
I believe that the committee has walked a fine line between a budget which would be ineffective in encouraging recovery from the recession, and one which, on the other hand, would be too stimulative and would lead to a resurgence of inflation.
No economist from whom we heard has said that there should not be a deficit. They all concurred that there was a need for a deficit.
The deficit is caused, in large part, by the economic conditions in which we find ourselves.
This is not a spending deficit, it is a recession deficit.
Present economic conditions tend to decrease tax revenues, and to increase such spending programs as unemployment compensation.
The result is an almost automatic deficit.
The deficit which the Budget Committee has presented is not caused by massive new spending programs.
These are totally absent from the considerations which led the committee to its recommendations.
I believe that in recommending the figures we did, we have reached the point where we would soon have to dig into programs that are essential to the national welfare if we were going to reduce the budget further under present economic conditions.
I would like to take a moment to examine the Budget Committee's role in the entire budget process and the purpose of the concurrent resolution before us now.
Our purpose here is to set budget totals that are consistent with the needs of an economy that is in deep recession, with unemployment now at 8.7 percent.
We are also looking at broad priorities for spending within available resources.
We are not looking at line items.
It would be a mistake were we to do it here.
The Appropriations Committee and the authorizing committees will do this.
If we disagree with their review, then we can take up individual items on the floor of the Senate.
I know there is waste that can be cut out and I intend to try to get it cut.
But to do that would distract us from the first, big decision we must make about the spending of our Government and the areas of priority.
The Senate should keep in mind that this budget was developed on the basis of the best economic information available to us right now.
The course of the recession is not clear at this time.
There are some optimistic signs that the economy may be getting ready to turn up.
On the other hand, there are the very discouraging figures on unemployment, which continues to climb.
Whichever way the economy goes, I hope that the Members of this body will keep in mind that the figures they are being asked to approve are not set in concrete.
These figures are targets to guide us.
Even under the Congressional Budget Act, the life of the first concurrent resolution and its figures is only 120 days.
In September, it is supplanted by a more final and more permanent second concurrent resolution, which can alter the budget figures drastically if that is appropriate.
There is no need to change this resolution now to anticipate what may happen.
We need not try to foresee every development in the economy now.
It is the intention of the Budget Committee to carefully monitor the economy during the period between the first and the second concurrent resolutions when the Senate is considering various spending measures.
If it sees any significant changes in economic trends which would have a significant impact upon the budget, it will certainly announce that fact.
It is always appropriate to consider an interim concurrent resolution setting new totals more appropriate to changed conditions.
So I would urge my colleagues to support this resolution with the clear understanding that, if conditions warrant, the committee will reconsider its recommendations.
In addition, of course, any Senator has the right at any time to introduce a concurrent resolution to change the ceilings, and I am sure the Budget Committee would give careful consideration to it.
I am sure that the Senate will give careful, serious, and responsible consideration to this resolution.
To do otherwise would be to doom two of the most promising recent developments in American Government.
The first is the possibility that we may finally have a mechanism for setting a sound fiscal policy for our country.
The second is that Congress will be able to assert its responsibility in guiding the financial policies of our Government.
Mr. President, again I cannot emphasize too strongly how difficult it was to get this whole mechanism in order, and how much credit the chairman of the committee deserves. He has taken this on almost single-handedly, pushed some of us, prodded some of us, cajoled the rest of us, and insisted that, in fact, we get about the business of getting that resolution in and doing it not in a piecemeal way but in a very thorough way. Sometimes I have been a little disturbed at some of the decisions that have been made in the committee. Sometimes I have disagreed. But by and large my opinion has been one that has done nothing but increase my respect for the mental prowess and leadership of the gentlemen of the committee. I also now know if someone is going to take a position in opposition to the chairman of that committee they had better have their facts together and know what they are talking about or they will have a very serious problem. I hope my colleagues, those few who might come in here with superfluous amendments, ones not particularly thought out, will keep that in mind. I can assure them that the chairman and the ranking minority member are very well prepared. They have very thoroughly gone through this and I suspect will be prepared to argue on its merits.
Again, I would like to compliment the ranking minority member and the chairman of the committee for the fine job they have done.
Mr. MUSKIE. Mr. President, I express my appreciation to my good friend from Delaware for his excellent statement and his overgenerous remarks. I hope the leadership of the committee is not too intimidated but just intimidated enough to get this job done.
It might be useful to members to know what is coming up this afternoon and tomorrow. I expect the first amendment to come up at about 2:45. It will be a Buckley amendment to lower the outlay ceiling and to lower the deficit number. In respect of tomorrow there will be an amendment to be offered by Senator MONDALE and some of his colleagues to raise the outlay ceiling and, in effect, to raise the deficit number.
There may be one or two variations of a cutting amendment that will come up tomorrow.
I hope that we can begin debate in about 45 minutes on the first amendment. I would be willing to entertain another one before then. That is the time that we sort of agreed that the Buckley amendment could be offered. We hope to get to a vote this afternoon.
May I make clear to the Members of the Senate that the budget-reform legislation provides for 50 hours of debate. Included in that 50 hours is all time on amendments. Amendments have a maximum of 2 hours to be equally divided for debate. So the Buckley amendment, unless we give additional time from the resolution, ought to be in shape for a vote late this afternoon.
That is the latest intelligence that I have. This is not like a normal piece of legislation where there would be a lot of amendments in the wings. There should not be, as I see it, more than four or five amendments, unless I am taken by surprise, between now and tomorrow.
At this point I am happy to yield to any Senator who may have comments.