April 30, 1975
Page 12594
The PRESIDING OFFICER. The Senator from North Carolina has been on his feet and seeking recognition.
Mr. HELMS. Mr. President, I will be happy to delay and yield to the Senator from West Virginia.
Mr. MUSKIE. Might I suggest that the Senator from North Carolina be recognized first? He has indicated a willingness to yield. I think that may save us some time.
AMENDMENT NO. 391
Mr. HELMS. Mr. President, I call up an amendment which I have at the desk, and ask that it be stated.
The PRESIDING OFFICER. The amendment will be stated.
The assistant legislative clerk read as follows
The Senator from North Carolina (Mr. HELMS) proposes an amendment in the nature of a substitute numbered 391.
Mr. HELMS amendment (No. 391) is as follows:
Strike out all after the resolving clause and insert the following: That the Congress hereby determines, pursuant to section 301 (a) of the Congressional Budget Act of 1974, that for the fiscal year beginning on July 1, 1975–
(1) the appropriate level of total budget outlays is $297,800,000,000;
(2) the appropriate level of total new budget authority is $388,600,000,000;
(3) the amount of deficit in the budget which is appropriate in the light of economic conditions and all other relevant factors is zero;
(4) the recommended level of Federal revenues of $297,800,000,000; and
(5) the appropriate level of the public debt is $531,000,000,000.
Mr. ROBERT C. BYRD. Mr. President, before the Senator yields to my distinguished senior colleague, may I ask the Senator from North Carolina, does he want the yeas and nays on his amendment?
Mr. HELMS. Yes. I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient second.
The yeas and nays were ordered.
Mr. ROBERT C. BYRD. Now, Mr. President, so that Senators may know when we will vote, is it agreeable that we vote at 6 o'clock on this amendment? I understand there is a 40-minute time limitation. This will cut it to 30 minutes.
Mr. HELMS. It is agreeable to me. However, I have agreed to yield some time to the distinguished Senator from Nebraska.
Mr. CURTIS. Ten minutes will be enough for me.
Mr. HELMS. In that case, Mr. President, 6 o'clock will be fine.
Mr. ROBERT C. BYRD. With 20 minutes to the Senator from North Carolina, from which he will yield 10 minutes to the Senator from Nebraska, and 10 minutes to the Senator from Maine.
Mr. HELMS. Very well.
The PRESIDING OFFICER. Without objection, it is so ordered. Who yields time?
Mr. HELMS. Mr. President, Senate Concurrent Resolution 32 purports to reflect the will of Congress. It seeks to put us on record as favoring a gargantuan budget deficit for fiscal year 1976. According to the resolution, the amount of the deficit in the budget which is appropriate in the light of economic conditions and all other relevant factors is $67.2 billion. In my view, this amount is preposterous; and I wish to go on record as unalterably opposed to this kind of fiscal irresponsibility.
What are these so-called "economic conditions and other relevant factors" justifying this resolution? The answer is: There are none, none at all. We are told that this vast deficit is necessary to stimulate the economy, an argument that I find incomprehensible in light of
the fact our present economic situation is a product of successive deficit budgets.
Instead of stimulating the economy, the new budget will, in all likelihood, run it further into the ground.
Certainly I need not remind my colleagues of the ever-increasing price of just about every commodity one can possibly imagine, including the necessities of life such as food, shelter, and clothing. Who is so blind as to ignore the obvious truth that this spiraling inflation is the offspring of deficit Federal spending during the past four decades?
For many years now – longer than I care to remember – we have been living on tomorrow's income. According to figures released on February 3, 1975, the Federal budget for fiscal year 1975 exceeds $313 billion, with a deficit of more than $35 billion. Then the Federal budget for fiscal year 1976 was estimated to exceed $349 billion, with a deficit of over $51 billion. Senate Concurrent Resolution 32 proposes that the budget outlays for fiscal 1976 should be $356 billion, with a deficit of $67.2 billion.
As I have noted on previous occasions, the interest alone on the Federal debt exceeds $30 billion a year. In fact, for fiscal 1975, the interest is estimated at $32.9 billion. This works out to $62,595 a minute in interest. This is $1,043.25 every second of the day.
And here are more disturbing figures. On December 31, 1972, the national debt was $449.3 billion. A year later it was up $20.6 billion to the sum of $469.9 billion. On December 31, 1974, the debt was up again – to $492.7 billion, an increase of $22.8 billion over the previous 12 months and an increase of a whopping $43.4 billion in a 2-year period.
Where does it end? The answer is obvious. If action is not taken in this Chamber to stop deficit spending, and emancipate our fiscal policies from the economic theories of John Keynes, we are headed for economic disaster. The American people know this, if the polls be any guide. Their faith in the American economy has already been shaken to the point that they fear a real depression, and here we are singing hosannah to the gods of big spending.
In the interest of candor and honesty, let us level with the American people for a change and admit that it is Congress which has created our current economic collapse and only Congress can do something about it. It is not pleasant to contemplate one's own folly, but I for one believe that it is time for Congress to say to the American people: "Yes, we caused this economic mess — we and our predecessors, who led the Government of the United States into the swamps of deficit spending and, what is worse, led the American people to believe that the swamps were a good place to be."
Before we become more deeply mired, let us turn to common sense and simple arithmetic for an honest solution to our economic problems. Any real solution must address itself to the real cause of the problem, and not just the symptoms. Any budget that falls short of the balanced budget falls short of our goal of economic prosperity, for even a ton of deficit spending and a little inflation hurts everyone.
I therefore, propose an amendment in the nature of a substitute to Senate Concurrent Resolution 32. My substitute provides no Federal deficit. It works this way: The Budget Committee estimated that Federal revenues under existing law would be $297.8 billion. Accepting this figure for income, and applying the concept of a balanced budget, I propose that the appropriate level of total budget outlays is $297.8 billion. The Treasury Department has projected the amount of the national debt at the conclusion of the current fiscal year to be $531 billion. Since the Government should operate on a balanced budget for the next fiscal year, including the expenditures for interest payments on the debt, no increase in the debt level is necessary. The appropriate level for the deficit, of course, is zero.
One final figure remains in my substitute. That is the appropriate level of total new budget authority. I have simply accepted the Budget Committee figure of $388.6 billion for budget authority. I, frankly, doubt that we should go on increasing spending authority. The ultimate result will be that the Government eventually controls every sector of our economy, with a consequent diminishing of freedom and justice. But I recognize that this Congress will probably not turn away from the siren call of initiating new programs.
Yet, in the long run, we must recognize that simply because the authority is granted, it need not be fully exercised. This authority should be exercised only in a manner consistent with the concept of a balanced budget – not only for fiscal year 1976, but also for succeeding fiscal years.
A final question remains. Where should the necessary reductions in expenditures be made in order to achieve a zero deficit. As my colleagues are aware, there are many competing points of view in response to this question. I am aware that there are some who would substantially reduce defense spending, but I favor a strong national defense with appropriate expenditures to accomplish that important goal.
There are some who feel that appropriations for social welfare programs are not large enough at present, but I feel there is a great deal of wasteful spending in this area. Considering all of the diverse views, I propose that Federal spending be cut across the board, on a pro-rata basis, with the single exception of interest payments on the national debt, in order to achieve a zero deficit.
The interest payments on the debt should be paid as they accrue. As a basis for determining the pro-rata reductions, the budget message of the President relative to the Federal budget for fiscal year 1976 together with supporting material should be used.
While this approach is not fully responsive to all of my concerns regarding wasteful Federal programs, it is perhaps the most realistic proposal in the light of the realities of life that confront us. I make this proposal of across-the-board reductions, frankly, as a concession to opposing philosophies, but I do so because I believe so firmly that the future of my grandchildren is at stake, together with the future of every American who hopes that his lineage may face the future with a reasonable expectation of prosperity and freedom. I say this because there is no real freedom without economic freedom. And, there is no economic freedom in the midst of spiraling inflation, and confiscatory taxation, and there certainly is no real prosperity.
Mr. President, it is not the intention of the Senator from North Carolina to consume a great deal of time. The hour is late, and I do not wish to detain Senators. Moreover, I am not laboring under illusion about the number of votes my amendment will attract.
On yesterday I expressed as clearly and forthrightly as possible my concern about this legislation, which will pave the way for a deficit of $67.2 billion.
Mr. President, when I contemplate the fact that this legislation involves a planned deficit of $67,200,000,000, it occurs to me that the Senate of the United States is bordering on being pyromaniacal in terms of fanning the fires of inflation.
Apparently Congress simply does not intend to learn from its mistakes of the past, and in fact intends to compound them with even more serious mistakes.
Let us make no mistake about it, Mr. President, with the adoption of a $67.2 billion deficit, there will be a horrendous increase in inflation. We ought not to kid ourselves about it, or try to deceive the American people.
Commerce will be stultified because the Federal Government will be drawing off capital so badly needed by the people of America; particularly the small businesses. Therefore, unemployment will continue to rise because the private sector will be denied the funds needed to create jobs and provide the goods and services necessary to revitalize and stabilize our ailing economy.
Mr. President, I spent the weekend in Brazil and Argentina. I visited the latter country at the invitation of my old friend, Bob Hill, who is the distinguished U.S. Ambassador to Argentina. During that visit — which, incidentally was not made at the taxpayers' expense — I met with prominent South American citizens from business, from agriculture, one or two from government.
One of the gentleman during a luncheon period demonstrated a surprising knowledge of what is going on in the Senate of the United States. He said, "I understand that the U.S. Congress is proposing a planned deficit of between $60 billion and $70 billion." I said, "That is correct." And he said, "Well, the United States is traveling the dismal road that Argentina traveled — and we are now bankrupt." He said the inflation rate in Argentina for the first 3 months of 1975, projected on an annual basis, is 108 percent. Then he said, "Now, I am not trying to tell you how to run your country, but if the United States makes that mistake you may as well plan to suffer a terrible economic upheaval within the next year or so."
Now, Mr. President, a few facts ought to be borne in mind, then I am going to yield to my distinguished friend from Nebraska, Mr. CURTIS.
The interest on the Federal debt for fiscal 1975 is estimated to be $32.9 billion. How do you put in perspective such an enormous sum of money as that? Well, if you use a calculator, Mr. President, you learn that this amounts to $62,595 per minute, in interest alone. Or if you want to break it down further it amounts to $1,043.25 every time the clock ticks, over $1,000 a second, every minute of every hour of every day of the year.
In 1973, the Federal debt increased $20.6 billion. In 1974, the debt increased another $22.8 billion, for a total increase during the 2-year period, Mr. President, of $43.4 billion. At that point, Mr. President, the Federal debt stood at $492.7 billion.
Of course, as all Senators know, the Federal debt is now in the neighborhood of a half-trillion dollars, which is a pretty expensive neighborhood when you consider what it is costing the taxpayers and what it is draining away from the economy.
For a generation we have been playing this game of deficit financing, going into debt year after year. And look where it has led us. Is it not time, Mr. President, to try the route of commonsense?
Mr. President, I yield 10 minutes to the distinguished Senator from Nebraska.
Mr. CURTIS. I thank the distinguished Senator from North Carolina.
Mr. President, the Budget Committee has worked faithfully on this matter. They have taken into account what the various programs called for, and that requires for more spending than there will be income, and on the basis of that approach we would have a resolution providing for a deficit of $67.2 billion.
I cannot bring myself to vote for a zero deficit or a balanced budget without stating how I would bring it about. I think this situation is so serious that we should change existing law. I think we should cut certain existing programs and, to that extent and in that manner, I would go beyond the consideration that went into the pending resolution.
Others might come in with a different shopping list, but I am willing to vote for the reductions that I am about to recite, and if anybody has any doubt about it, let them just offer such amendments and I will vote for them.
How in the world are you going to eliminate $67.2 billion in spending or eliminate that much deficit? Well, here is my shopping list.
Mr. President, I would repeal the recent tax reduction bill. That would reduce the deficit by $23 billion. That act was pure nonsense. I heard a distinguished economist say within the last 3 or 4 days that that bill was planting the seeds of a recession late in 1976.
Our distinguished Secretary of the Treasury stated that our recessions are caused by the inflation.
There is $23 billion. I voted against the tax reduction bill before. I am anxious to vote to repeal it before it goes into effect.
I am ready to vote to abolish revenue sharing. Why, of course, it is nice to send checks to States and subdivisions. It has some merit, but not enough merit for us to borrow the money to do it.
Fifteen percent of all the spending next year is going to be with borrowed money. Fifteen cents out of every dollar. Only 30 cents comes from individual income taxes. So when one pays his income tax, keep in mind they will be borrowing half that much to keep going.
That is $6.3 billion.
We could not stop foreign economic assistance entirely. It is something over $4 billion. It ought to be cut by about $3 billion, and the billion left to phase out foreign aid. When we are nearing a $100 billion deficit, what business have we scattering money around the world? I am ready to vote to cut it by $3 billion.
I served for a long time on the Space Committee. I was ranking minority member. The space program is one of those programs that has been greatly reduced, it should have been, because they bought a lot of hardware and other things that were a one-time purchase.
So the space program has been reduced by several billion dollars, but in spite of the fact that I think it is a great educational program to advance science, I would cut it by half a billion dollars.
Now, mass transit is costing us a lot of money. Are we developing new systems of transportation? No.
We are underwriting failing transportation systems. Why, think of it, here the United States is broke, approaching $100 billion deficit, and we pass a law that says that anybody, almost, can run a busline or a streetcar line or some mass transit system and we will pick up the deficit. Even if we had money, that invites the worst practices. I would cut that by a billion dollars.
We have got a lot of programs in community development that did not exist 10 years ago. These things are well set out in a book entitled "The Budget in Brief."
Now, many of these programs to develop communities are worthwhile, but when we are facing such a crucial thing I am ready to go back to the 1974 expeditures for community development and that would cause us to vote for a billion-dollar reduction in that program.
Now, on education, 10 years ago we were spending about $3 billion. It is over $7 billion now. Due to the circumstances we are facing, I am ready to go back to the 1974 figure on that. That would save $2 billion.
Manpower and social service. Social service started in the Finance Committee. It was supposed to cost a couple of hundred million dollars. The first thing we knew, it was headed for $5 billion. We cut it back about half of that, but I am ready to vote a $1.2 billion cut for social services and manpower.
Do you know what we were spending for Federal programs for health 10 years ago? $3 billion. Today it is $30 billion.
We have taken about 28,000 doctors from treating patients and put them on the Government payroll. Pushing papers does not make patients well. Think if it, tenfold increase from $3 billion to $30 billion.
A modest cut would be $5 billion and we would have a more manageable program, we would get better research, we would do a better job.
Now, here is a good one. Instead of freezing retirement increases and Government wages at 5 percent, I would freeze them at zero.
What business does a Government employee, who has the security of a Government job, when we are approaching a $100 billion deficit to protest if we say that there will not be increases this year; what is wrong with that? Do you know how much it would save? A total of $12.9 billion would be saved if we postponed for 1 year all raises in Government wages and retirement programs.
Law enforcement is largely a local obligation, but we are in that in a big way. Ten years ago we were spending for law enforcement about a half a billion dollars. Now it is $3.5 billion. A sevenfold increase. It has not resulted in any measurable crime reduction. I would cut that by a billion dollars.
The PRESIDING OFFICER. The time of the Senator has expired.
Mr. CURTIS. May I have a few minutes more?
Mr. HELMS. I will yield 1 more minute to the Senator.
Mr. CURTIS. All right.
A food stamp reduction, $2 million. Welfare reform, $2 billion. I would enact the administration's recommended windfall petroleum tax, which would pick up $3 billion. We talk a lot about tax reform but a modest $1 billion in tax reform can be achieved.
If we operated on a zero deficit, a balanced budget, we would save $2 billion on interest next year.
Mr. Chairman, that adds up to $67,700,000,000, and if we would do that, we would cure the recession. It would so encourage the country, it would so encourage investors, it would so encourage all in our economy so that we would move forward.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. HELMS. I reserve the remainder of my time.
The PRESIDING OFFICER. The Senator from Maine has 10 minutes.
Mr. MUSKIE. Mr. President, I think Senator MORGAN wanted some time and I am delighted to yield 3 minutes.
Mr. MORGAN. Four minutes?
Mr. MUSKIE. Four minutes.
The PRESIDING OFFICER. The Senator from North Carolina.
Mr. MORGAN. Mr. President, I want to join with my colleague from North Carolina and vote for the amendment which would call for a balanced budget for the United States.
I must say, though, in all candor, that I realize that it is not realistic to hope that we can balance the budget this year. I said so last year as I debated the issue back and forth across North Carolina. But, Mr. President, the people of North Carolina believe in a balanced budget. For more than 45 years, we have operated the State of North Carolina with a balanced budget.
We believe also, Mr. President, in doing for the people those things that they cannot very well do for themselves, and I take a back seat to no one, personally or for my State, for the things we have done for the people.
During 10 years in the Senate of North Carolina I voted for most, if not all the bills to improve mental health in our State, public health in our State, public education, public welfare. I fought many battles for higher education. We support 16 universities in North Carolina, 50-some community colleges.
We provide for the people of the state of North Carolina, but we are willing to pay the price.
I was in a New England State the other day that is complaining of being almost bankrupt. Mr. President, I paid 7 percent sales tax in that State, but it had no income tax.
In my State, we have an income tax, and we have had one for years. And we have a sales tax. In other words, we are willing to pay the price.
I will vote in this Senate through the years that I am here for a lot of bills to do a lot of things for the people of this country. But I am also willing to vote for taxes to pay for those program. I do not think we ought to vote programs we are not willing to pay for.
So I am going to vote for the amendment offered by my colleague as an indication or an expression of the feeling of the people of North Carolina that the Government of the United States ought to operate with a balanced budget.
The PRESIDING OFFICER. Who yields time?
Mr. MUSKIE. Mr. President, I will take 2 or 3 minutes simply to respond to the amendment so the record may be complete.
Mr. President, as I understand the Helms amendment, it would reduce outlays under the budget resolution by $67.2 billion, to a level of $297,800,000,000, that being the same number as the revenue estimate contained in the budget resolution. So there would be no change in taxes.
According to the best advice that economists and our staff can provide us, the effect of this amendment would mean a reduction in gross national product of some $110 million below our forecast. This would raise the GNP gap to about $350 billion and boost the unemployment rate to 12 or 13 percent. Meanwhile, the reduction in GNP would cause revenues to fall. It would also increase expenditures on unemployment compensation. The combined effect would be to leave a deficit of about $40 billion after the Senator's cut of $67.2 billion has been made.
Senator HELMS would then have to introduce new legislation to remove this deficit.
Either taxes might be raised or expenditures might be lowered, or some of both might be undertaken.
An unemployment rate of 20 percent can probably not be achieved within the fiscal year, but 15 percent is well within reach.
As I contemplate this approach to our economic problems, I am reminded of a story told us by Charls Walker, who was Deputy Secretary of the Treasury in the Nixon administration, and is a conservative economist. I read from a footnote on page 25 of the report of the Budget Committee:
In testimony on February 5, former Deputy Secretary of the Treasury, Charls E. Walker gave the Committee an impromptu lecture on the results of an attempt in the early 1930s to balance the budget during a recession:
[Balancing the budget] did not sound crazy in 1931 and 1932. That is precisely what they tried to do. It was a bipartisan effort. President Hoover and Mr. Garner and the whole crowd wanted to balance the budget. That was the fiscal orthodoxy of the day. So they sent a message to the Treasury and the Treasury raised practically every tax it could get its hands on. I believe the deficit was running in the general horrifying range of a billion dollars and they tried to raise taxes about a billion, maybe around $800 million. And they did not get anything back. They raised the taxes and they further exacerbated the deflationary pressures and incomes dropped and profits dropped and it just did not work.
We saw on the charts yesterday the story of 17 to 22 percent unemployment which resulted from those wrong economic policies of that time. I know that this business of balanced budgets is a
mysterious business to laymen and it is to me. But I am persuaded from the insights that we have gained on the Budget Committee that the amendment of the Senator from North Carolina is simply very much the wrong medicine and that the result would be to send us in the wrong direction. It would be a disaster for the country's economy.
The PRESIDING OFFICER. Who yields time?
Mr. MUSKIE. I am happy to yield the remainder of my time. I think the Senator from North Carolina would like tome more time.
Mr. HELMS. Mr. President, with all due respect to my good friend from Maine, I perceive that the distinguished Senator is using the same line that has been used for the past 30 or 35 years in this country, that we cannot balance the budget now.
As they say in North Carolina, "can't never will."
The question is whether we have the guts to do it. If we do not, we ought to admit to the American people that we are playing politics with the Treasury of the United States and with the pocketbooks of the taxpayers of the United States. I can jolly well tell the distinguished Senator from Maine and everyone else within earshot that the people of this country are far ahead of the Congress in this matter of fiscal responsibliity of the Federal Government. They know what is going on — and they are sick of it.
I have no illusions about how many votes this amendment will bring. I have submitted it for the purpose of putting Senators on record so that the people of this country will know who is in favor of fiscal responsibility and who is not.
We can cut this budget. We can cut the bureaucracy in the U.S. Senate and to the House of Representatives. We can do away with forty-eleven expensive Subcommittees that the Senate operates, costing millions of dollars a year — and for what? Most Senators will acknowledge privately that the purpose of a remarkable part of the millions spent to operate this legislative bureaucracy is purely and simply for the aggrandizement of Senators. We can cut operating expenses here in the Senate. We can cut them in the House of Representatives. We can cut them downtown, and throughout this sprawling Federal Government. We can serve notice. We can do it. But not if we say, "Not this year." Do we have the guts to do it, Mr. President? The vote on my amendment will tell.
I can assure the Senate, Mr. President, that if this money is drained out of the private economy, we can forget our hope of stopping the inflationary spiral. Free enterprise must be allowed to work, or this country will not function. It is just as simple as that. We can play games up here. We can talk about what we are "doing for the people." But what we are doing is raiding their pocketbooks.
This is the time for us to put up or shut up. This Senator is willing to put up. Thank you, Mr. President.
I yield back the remainder of my time.