April 29, 1975
Page 12361
Mr. MUSKIE. Mr. President, I yield myself 2 or 3 minutes to respond to some points that have been made by the distinguished Senator from Oregon.
He gave us the date of only one of those publications.
He described it as being published in the latter part of last year. In terms of the economics of the situation, the latter part of last year was very different from April and May of 1975.
The second point I would make to the Senator is this: Whether his apocalyptic view of the Budget Committee's economic policy is justified by events or whether my apocalyptic view of the consequences of the amendment of the Senator from New York is justified by events, we are going to be held accountable. Either course, with hindsight, could be perceived as the course of insanity. So it is not quite that simple.
The Senator refers to the fact that estimates of a safe deficit have floated upward in the hearings which he has attended. Let me suggest that those estimates have floated upward because economic activity has floated downward. As investment, housing, and inventories decrease, two things happen: Private borrowing needs also decrease, and the deficit increases. So we can invest in that downward slide by doing what the Senator suggests, and hope that somewhere we will bottom out and can begin to build an economy again; or we can invest in an upward climb, hoping that the time for building has come. With tighter money, a cutback in Federal programs, which is the effect of a $340 billion ceiling in real terms, can have one consequence: It is going to slow down the economy some more. We may quarrel as to how much more, but I do not think there is any doubt but that it will.
So if we adopt this policy, we will have more unemployment, not less. We will have less economic activity, not more. And the Senator is going to hear from his middle-income constituents, and so will I.
Mr. President. I yield the floor.