April 30, 1975
Page 12588
Mr. TUNNEY. Mr. President, we must identify and support a fiscal strategy which will permanently return both full employment and price stability. We must find and implement a policy mix which will produce a high but sustainable rate of economic growth for the years ahead. I believe that the Senate Budget Committee has pointed the way toward these goals.
This new but very diligent committee has labored many months on a thorough examination of fiscal policy and priorities. It offers today a 1976 fiscal year budget recommendation providing for total outlays of $365 billion and for a deficit of $67.2 billion. The deficit is not the result of profligate Government spending programs. It does not grow out of new social initiatives. To the contrary every penny of the suggested deficit is the result of the massive recession which descended on this Nation in the last three quarters. In fact, if the economy were operating at a full employment level of production, the Federal budget would actually show a small but significant surplus.
Mr. President, I yield to no one in my concern for the more than 8 million Americans who cannot find jobs. I support the Senate Budget Committee's resolution precisely because it recognizes the urgency of economic stimulation and the imperative of direct job creation for the unemployed.
The budget presented by the committee provides economic stimulation totaling $17 billion more than the amount suggested by President Ford when he presented his budget on February 3, 1975. The committee budget provides more than six times the amount of funds recommended by the President for direct job creation. Thus, the committee budget is carefully sculpted to stimulate substantial progress toward both increasing employment opportunity and price stability for many years ahead.
Unfortunately, the amendment of the Senator from Minnesota (Mr. MONDALE) would add several billions to the deficit proposed by the Budget Committee. While this amendment calls for $2.5 billion in additional revenues from tax reform, the sad history of the tax reform movement suggests that such revenues are unlikely to be forthcoming in the very near future. Furthermore, the additional savings in the form of increased tax revenues and reduced unemployment compensation suggested by the Senator from Minnesota may well be partially delayed beyond the period covered by the 1976 fiscal year budget. Thus, there is considerable danger that the Senator's amendment could add more than $6 billion to the $67.2 billion deficit proposed by the committee. Even if outlay ceiling were increased by the $9 billion proposed in the amendment, there is no assurance that the additional monies would be used to stimulate new job creation.
We have just as much reason to hope and work for a reduction in unnecessary military expenditures as for an increase in total outlays as a means of providing opportunities. I, for one, intend to work toward precisely this conclusion.
Mr. President, no one can foresee the future with perfect certainty. The budget reform procedure enacted in the last congress recognizes this and requires Congress to take a second look at the budget later this year. At that time we may find that economic conditions have changed. The stimulus thus far provided may be too great or it may be insufficient. In either case, we will have ample opportunity for a mid-course correction, if any is needed, later this year.
Mr. President, when we enacted the Congressional Budget and Impoundment Control Act of 1974 we told the American people that Congress had the resolve to put the fiscal affairs of this Nation in order. Today we have the first opportunity to show we are indeed serious about meeting this heavy responsibility. I am very pleased to have the opportunity to stand with my distinguished colleague, the senior Senator from California, and the other very conscientious members of the Budget Committee in support of Senate Concurrent Resolution 32.
I think the Budget Committee has done an outstanding job with its hearings identifying the problems, working as best it can with the facts that are available to establish a budget ceiling for this Congress within which we can live, and which is going to provide jobs and not produce runaway inflation. This is the first time that the Budget Committee has had the opportunity to work and I do not want to see us destroy our child before it has really had a chance to develop and mature.
Mr. MUSKIE. I thank the distinguished Senator from California for those words of support. I yield 3 minutes to the distinguished Senator from Kentucky.
Mr. FORD. I thank the distinguished Senator from Maine.
Mr. President, as an ex-Governor who has felt the trauma and frustration incumbent upon anyone who must prepare a budget, I think I understand the deep feelings of the members of the Budget Committee – those in the majority and those in the minority.
First let me say that I do not quarrel with the basic program elements outlined in Senator MONDALE's amendment, but I do have reservations that I think are of utmost importance, not only to the success or failure of the Senate's new budget process, but also to the economic climate of our Nation.
It is extremely important to the Nation, not only this year, but more importantly, in the future, that the Budget Reform Act of 1975 become a working reality not just in terms of specifics, but in terms of developing a viable working institution that can, in the years to come, reflect the will of the people through their elected representatives in Congress.
It would seem that at a time of great national trauma over economic problems and at a time when there are grave doubts about our political system being capable of handling our serious domestic problems, this act must be given a chance to succeed.
There are several points we must consider relative to the Mondale amendment.
First, as I said before, I agree with the principle of the program elements, but have reservations about the timing because of the psychological effect of the deficit increase embodied in the amendment, especially on the financial community of this Nation.
I believe that since this May resolution is not binding, and since we cannot adequately forecast what will be needed by September when the binding resolution will be considered, it is unnecessary to pass the Mondale resolution at this particular time.
Second, I think that the individual elements in the amendment – for example the tax reform – should be worked out in advance of the expenditure levels in the program.
This timing would seem to be only a logical, realistic, fiscal policy to follow if we are to assume our role in a responsible manner in the Congress.
Third, I think the expenditure levels of many of the program elements contained in the Mondale amendment need close, further consideration.
As so eloquently articulated by Senator MUSKIE, this first budget resolution resulting from the Budget Reform Act of 1975 cannot be expected to be, nor is it, perfect, but rather a beginning and in my opinion, a monumental beginning of our equal involvement with the executive branch in setting fiscal policy for our Nation.
I commend all the members of the Budget Committee, including those in the majority and the minority for this important first step that has been taken.
The PRESIDING OFFICER. The time of the Senator has expired.
Mr. MONDALE. Mr. President, 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. MUSKIE. I yield 3 minutes to my distinguished colleague on the committee, the Senator from Florida (Mr. CHILES).
Mr. CHILES. I rise to support the distinguished chairman of the Budget Committee and the Budget Committee in opposition to the Mondale amendment. I think in this opposition no one on the Budget Committee takes the stand that countercyclical revenue sharing is wrong, or that we should not perhaps have some. There was a great discussion in the Budget Committee in that regard. In fact, a discussion about that is in the report. But really what we are talking about is what the figure is going to be for the deficit. While this is a figure where there is no exact science about it and none of us knows whether $70 or $78 billion is the magic number, or something lower than that, I think what is important is that the American people have the strongest feeling that we have been irresponsible in the past. They know that we have not had any discipline concerning spending and how we are going to control spending. For the first time we have in the Budget Act the holding out of hope to the American people that we are going to try to get a handle on the Federal spending; that we are going to try to exercise some form of discipline.
I think it is very important when you really consider the recession that we are in now, that most people realize that if tomorrow the American public decided for some reason to have confidence in our economy, decided to go buy a new car, to go buy a new refrigerator, to start the new house, this recession would end very quickly.
On the other hand, if they are afraid of what we are doing in Government, or of anything that is happening, if it is going to jeopardize the economy, and they decide that they are not going to buy or they are going to hoard or they are going to save, then the tax rebate that we made will fail because they will take that money and put it in a sock.
So one of the most important things that we are doing now is the signal that we are giving to the American people of whether we are exercising control or not.
I think it is so important that we not break the budget as presented by the Budget Committee and in doing this first exercise that we not allow the ceiling to be broken. I think we should signal to the American people that we will exercise this restraint. For that reason, I support the committee.
The PRESIDING OFFICER. The time of the Senator has expired.
Mr. MUSKIE. Mr. President, I yield the remainder of the time to myself.
I would like to use this remaining time to discuss the remarks of Senator MONDALE.
The statement was that last fall no one predicted the present unemployment rate or anything like it. On December 12, 1974, in a hearing before the Budget Committee, Mr. Ash, who was then Budget Director, testified. He and Senator MONDALE engaged in some slight disagreement over economic policy.
Senator MONDALE said:
What I am saying is that you are pursuing a policy which almost guarantees 8 percent unemployment, even though at this point most of the economists we have talked to have said through reflation we could put many back to work without significantly affecting inflation.
I offer that correction for the RECORD.
May I say with respect to the programs that Senator MONDALE'S amendment encompasses, a vote against his amendment at this time is not a vote against these programs. Rather, it would be a judgment that the Budget Committee ought to monitor the progress of the economy in the weeks and months ahead and then use the authority which is clearly given to it under the budget reform legislation to report other concurrent resolutions for the purpose of changing economic policy.
That is clearly not only our prerogative, but it is our responsibility.
What we are saying to the Senate today is that the budget we recommend includes some $48 billion in stimulative spending directly related to the objective of dealing with the recession. Most of this spending is not in place yet. The tax cut checks begin going out tomorrow. The emergency employment program covering 1 million jobs that we approved last Saturday has not begun spending money.
What we are saying is let us see the effect of those things that have already been put in motion. If the progress of the economy requires that we do more, the Budget Committee has the responsibility and the authority to recommend it. Those recommendations could well include countercyclical assistance to State and local governments, could well include additional public works, and could well include additional public service employment. All of these options are open to us. They are not closed off to us by a vote against the Mondale amendment.
Mr. MONDALE. Mr. President, will the Senator yield?
Mr. MUSKIE. I yield.
The PRESIDING OFFICER. All time has expired.