April 29, 1975
Page 12373
Mr. LONG. Mr. President, I am concerned that the pending resolution makes some assumptions about the revenue effect of energy and other tax legislation the Senate will be considering later this year. I think it is too early for us to predict the revenue effect of this legislation. We will have a second budget resolution in the fall, and we will have an opportunity to consider the effect of further tax legislation in light of economic circumstances at that time.
My amendment would simply delete the language in the resolution referring to the possible revenue effect of upcoming legislation.
I have discussed this matter with the distinguished manager of the bill, and I believe he is willing to accept the amendment.
Mr. MUSKIE. Yes.
Mr. President, I have discussed this matter with the distinguished Senator from Oklahoma (Mr. BELLMON) and with members of the committee on both sides, and we are willing to accept this amendment. Before doing so, I should like to take a few moments to explain why that language was included.
In the first place, under the Budget Reform Act, it is our responsibility to estimate revenues and to recommend changes that may be consistent with what we believe to be the interests of the country.
In this case, we included this language for informational purposes. We understood that the tax cut approved by Congress this winter extended only through the first half of fiscal 1976 and that the probability was that it would be extended into the last half of fiscal 1976. We felt that we could not discharge our responsibility without reflecting that possibility in our resolution.
Second, it was clear that energy taxes of one kind or another were under consideration by the administration – indeed, the administration had imposed some. On the House side, the Ways and Means Committee was considering some energy taxes and we felt that we should indicate the possibility of some energy tax revenues accruing to the Treasury in the latter part of the fiscal year.
We wanted Members to understand that if tax actions of this order were enacted, the impact on the deficit would be to increase it by $2.4 billion.
However, our point having been made, and the information having been conveyed to the Senate with all Senators understanding that possibility, I see no reason to insist upon inclusion of the language in the resolution; and I am more than happy to support the amendment of the distinguished Senator from Louisiana, the chairman of the Committee on Finance.
Mr. BELLMON. Mr. President, I join the chairman in accepting the amendment.
I believe it is important to invite the attention of the Senate to the fact that the Budget Committee tried every way it knew to lay out the record so that the full Senate would know what is involved in this budgeting process. We tried very hard to be candid and straightforward, to the extent even of reducing the present anticipated revenues from the sale of Outer Continental Shelf leases by $4 billion. This would have made our deficit $4 billion less than it is. This is the reason why we have the figure that the Senator from Louisiana is now moving to remove.
I agree with the chairman that the point has been made and that the Members have been informed as to what the situation is, and I join in accepting the amendments.
Mr. MUSKIE. Mr. President, I think we are ready for a vote on the amendment of the Senator from Louisiana.
The PRESIDING OFFICER. Is all time yielded back?
Mr. LONG. I yield back the remainder of my time.
Mr. MUSKIE. I yield back the remainder of my time.
The PRESIDING OFFICER. The question is on agreeing to the amendments of the Senator from Louisiana.
The amendments were agreed to.
Mr. ROBERT C. BYRD. Mr. President, I simply wish to state for the benefit of the Members that there will be no more rollcall votes today.
Mr. MUSKIE. Mr. President, I yield 15 minutes to the distinguished Senator from Illinois.
Mr. PERCY. Mr. President, while the acting majority leader is in the Chamber, together with the manager of the bill and the ranking minority member of the Budget Committee, is it possible to get some idea as to when we might have a vote on passage of the bill tomorrow? I presume that passage will occur tomorrow. It will be appreciated very much by the Senator from Illinois if it is possible to have the vote no later than 3:30 tomorrow afternoon.
Mr. MUSKIE. There are two possible amendments, one which is being considered by Senator DOLE, and another by Senator MONDALE. The Dole amendment may not materialize, but that is not finally resolved. I have asked Senator HUMPHREY, who is a cosponsor of the Mondale amendment, if they could begin discussion of their amendment at 11 o'clock. There are 2 hours allotted under the order to an amendment. We could, of course, grant some additional time under the bill.
I made the point to Senator HUMPHREY that we would like to have a final vote on that amendment substantially before 3 o'clock, if possible. I think that would accommodate the Senator from Illinois if it materializes.
Mr. PERCY. It would be very much appreciated indeed. I shall speak this evening for 10 or 15 minutes to accelerate the process tomorrow, then.
The PRESIDING OFFICER. Who yields time to the Senator from Illinois?
Mr. BELLMON. I yield the Senator 15 minutes on the bill.
Mr. PERCY. Mr. President, it is with a great deal of personal satisfaction and a sense of real accomplishment that I rise to participate in this opening day of debate on the first of what I hope will be a great many "first concurrent resolutions on the budget."
As the distinguished managers of the resolution well know, I devoted a great deal of personal effort to the passage of what I considered to be the most important reform of congressional procedures since the Civil War. I enjoyed very much working with my colleagues on both sides of the aisle on the Committee on Government Operations.
The very able Senator from Maine, the chairman of the Budget Committee (Mr. MUSKIE), and I worked very closely together on this legislation in the Government Operations Committee (Mr. ERVIN). I am proud of this result of our work. The first concurrent resolution is the keystone of the process we created.
Though we all recognize that this is the "trial run" of the new budget processes, which will not become fully effective until next year, I think the Budget Committee has set the correct course.
The authors of this reform intended these processes to bring order out of an increasingly apparent fiscal and budgetary chaos. Faced with apparently undisciplined spending, increasing debt, higher taxes, runaway inflation, and dwindling purchasing power, Americans had come to the perfectly logical conclusion that we were failing in our constitutional duty to manage the national budget.
These criticisms were summed up by the respected Committee on Economic Development in a way which had a particularly strong impact on me.
This is a quotation that I have used constantly throughout the country over a period of many months in trying to convince the country, the U.S. Chamber of Commerce, the National Association of Manufacturers, the UAW, the AFL-CIO, the United Steel Workers and other organizations, of the necessity of having this budget process. The CED had this to say:
The present congressional approach to fiscal affairs is indefensible. When budget decisions are extended long past the beginning of the fiscal year for which they are intended, when there is no congressional mechanism to tie revenues and appropriations into a coherent pattern, when no legislative procedure exists to initiate actions based on a comprehensive view of the economy, then national stability is endangered.
We answered these harsh judgments with the Congressional Budget and Impoundment Control Act. We are answering them again today in this debate.
I cannot commend too highly the managers of the bill, and all members of the Budget Committee. I think they have produced a remarkable document, a fiscally responsible document.
I regret that some administration spokesmen have characterized this as an excessively deficit budget. I disagree. When the perhaps unrealistic assumptions underlying the deficit projected by the President are taken into account, the deficit projected by this first concurrent resolution is extremely close to the administration's projection.
The deficit projected by this first concurrent resolution is extremely close to the administration's projections. I think that time will show that the Budget Committee's deliberations have been far more realistic than the OMB have been in the presentation of the President's program to Congress and to the American people. I will join my colleagues in refuting any insinuation that this is an irresponsible document.
On the contrary, it is a politically exceptional document. I have an acutely clear understanding of the intense, diverse, political pressures that were focused on the Budget Committee. The drafters of this legislation intended that. We also anticipated that the Budget Committee would act in a statesman like way, and it has.
There is one sense in which the budget document seems of particular value. The concurrent resolution, when passed, will be the formal expression of Congress on national fiscal issues. It, and the processes and institutions that back it up, now permit Congress to speak with one voice on fiscal policy. The concurrent resolution tells the American people and the executive branch what our judgments are about national fiscal needs. It is going to go a long way toward keeping everyone honest.
Of all of the comments that I made at the luncheon today at the U.S. Chamber of Commerce, the one that drew the strongest and most instanteous and enthusiastic response was when I said they will always remember this day, the first day of debate on a concurrent resolution that the Senate of the United States has gotten on a bill that the Chamber, in its final deliberation on this bill and measure, strongly supported as being in the national interest and certainly, the first major attempt in many, many years to have Congress establish a spending goal and establish revenue and spending levels and a national debt level in perspective before it even considers the detail of the budget. We have some guidelines now and some guideposts. Certainly the vote on the first amendment offering, an historic amendment – I am sure we shall have more exciting votes than that in the future, but it was an indication that there was a strong vote on confidence for the judgment of this committee.
If I have one regret about this first concurrent resolution, it is that it does not contain the functional subtotals that are instead contained in the report at page 37. I think inclusion of the subtotals in the concurrent resolution would have permitted a more realistic debate. But I respect the judgment of the Budget Committee that in this trial run it is wiser to limit the debate to the aggregate figures.
As I went through the record of the hearings – I certainly commend to my colleagues for reading the views that are available, the condensations and summaries that are available in the Congressional Quarterly on it, I think they will get a sense of the drama and debate and exchange of ideas that went on in those hearings – I think that I wanted to be a member of the committee, I wanted to live through the experiences. I think my concurrence would have been the same after watching the flow of that debate, that this was the main goal that we should work on and that the next one that we present, next year, obviously, is the time to move in with those functional subtotals that will be difficult to arrive at – but again terribly good discipline for us to have, guideposts which we can go by.
I do not believe that any of us anticipated that the first, "trial" run for our new process would face such overwhelming difficulties. I ask the distinguished chairman: When we were drafting this bill did we anticipate that its first test would take place in an economic environment worse than any since the Great Depression?
This may be the worst of times for this test to take place, but in another sense it is also the best of times. If the trial run succeeds in this climate, as I anticipate that it will, I think we can expect that our new processes will work when fully in force next year.
I must say that, as the economic conditions unfold, I have felt a sense of disheartenment that this would be the first challenge of the Committee on the Budget. I had hoped that we could start the history of this new chapter in the fiscal life of Congress with a balanced budget – that goal that we always dream about, that we always talk about in our political campaigns and never seem to get hold of when we take the floor in the House of Representatives or in the Senate.
But, on the other hand, I have to bury my dream and recognize, what if we did not have the Budget Committee? Today we are faced with one of the greatest climactic experiences, economically, that we have had since the days of the so-called Great Depression. Never have we had an economic environment that has been any worse except in that particular period, nor more difficult to appraise or analyze. It has caused every economist in the country to wonder whether economics really is a science. Maybe it is more an art than a science.
But what if we did not have this whole budget process installed? It would be much worse. And rather than dealing in the best of times, with the possibility of a balanced budget, maybe from the standpoint of the learning process we are going to have to go through, it was just as well to have it in the worst of times; and certainly these are the worst of times.
A more personal observation: At the beginning of this Congress when the Republican Caucus adopted rules that effectively prevented the more senior members of the minority from taking seats on the Budget Committee I regretted that I could not participate directly in the implementation of the reforms we had conceived. However, I must say to the ranking minority member, my friend from Oklahoma, that I have great admiration for the job he and the other members of the minority have done.
Certainly when we look at the members of the minority, and we see the fact that seniority is low by experience in all levels of Government, yet from the standpoint of judgment and background, we certainly have a fine complement on the minority side in the Senator from Oklahoma (Mr. BELLMON) as ranking minority member, the Senator from Kansas (Mr. DOLE), the Senator from Maryland (Mr. BEALL), the Senator from New York (Mr. BUCKLEY), the Senator from Idaho (Mr. McCLURE), and the Senator from New Mexico (Mr. DOMENICI).
I do not think the chairman will mind my repeating in the confidence of this Chamber this evening, when there are few of us left, the comment that he made to the Senator from Illinois that he was extraordinarily proud of the work that, has been done by all members of the Budget Committee, and was particularly pleased with the spirit of cooperation and the way that the minority has worked with the majority in this regard, and the seriousness with which they have taken their responsibilities.
I admire it tremendously myself, and I have to reluctantly conclude that the decision of the caucus was absolutely correct. The more junior Republican members have had the time to focus their attention on it, and have done very well indeed, and this early in their Senate careers to have assumed a position on an important committee such as the Budget Committee, with the enthusiasm and the effort they have put into it, will in the end offset the fact that there could be more senior Members, possibly, serving on the committee, but it is a lot better to have those Members there who have the time and the real interest, and who look upon this as a major committee assignment, rather than as a second or third committee, as it might have to be with the ranking members of other committees.
Mr. MUSKIE. Mr. President, will the Senator from Illinois yield?
Mr. PERCY. I am happy to yield.
Mr. MUSKIE As the Senator knows, I had hoped that he might represent the minority on the Budget Committee. We had worked together for long months in writing the budget legislation, and I had come to greatly enjoy the association with the Senator from Illinois. But having said that, I must say how enormously impressed I have been by the contributions of all the members of the committee, and especially those on the Republican side.
I say "especially" because I suppose I would expect a certain ideological and partisan strain across the party lines, but I have not found that at all. I have found all the members of the committee on both sides to regard the matter as a challenge to be faced. We have all regarded this as an exciting and stimulating educational experience. I think it was more than just the responsibility that prompted the members to attend the committee sessions so religiously, but they did attend, and I think beyond that they enjoyed it.
Speaking personally, I have learned more about the overall perspectives that one must have in dealing with our Government than I ever knew before. So it has been a real personal pleasure for me to deal with such people as the distinguished Senator from Oklahoma, whom I happened to know well before and whom I now count not only as a valued colleague, but as a friend.
So, if I could not have the distinguished Senator from Illinois as the ranking minority member, I was most happy to have the distinguished Senator from Oklahoma.
Mr. PERCY. As among the three of us, we represent the West, the Midwest, and the East. I think that is a great spectrum, and I think that is the important point.
So I intend to support the concurrent resolution, and to vote against amendments which would alter it.
I believe it sets out a realistic and economically sound program for Federal budgetary policy as we begin fiscal 1976.
I do not believe the projected deficit should be raised from the level recommended by the committee. While I appreciate the motivation of those who believe a greater Federal effort should be made to counter the recession, a significant effort is already underway.
The first rebates from the $22.8 billion tax reduction bill will soon be received. Approximately $6 billion in emergency appropriations for additional public service jobs and accelerated public works projects will soon be available. Our unemployment compensation program has been extended and expanded, as have other programs to assist those out of work. We should allow the programs we have initiated to take hold and assess their impact before piling more programs and spending on top of them.
Certain counter-recessionary proposals – such as fiscal relief for State and local governments – may prove to be necessary and if so I will support them. However, I will attempt to support such programs within the outlay ceiling recommended by the Budget Committee. If additional counter-recessionary programs are needed, less essential spending should be postponed.
I will also work to include revenue raising measures in any tax reform bill adopted this year. If the Congress extends portions of the Tax Reduction Act on a permanent basis, it should pay for the tax cuts with permanent tax increases. Non-recessionary revenue-raising measures could include an increase in the excise tax on alcohol and tobacco. Additional revenue could also be raised, and our energy posture improved, through a substantial tax on gasoline.
Certainly between now and the time of the second concurrent resolution, which would be in September, we will have a chance to appraise and assess, and I for one will be working earnestly, if the economy can absorb it, to find ways to close this gap just as promptly as we possibly can.
Certainly in an area where we have not increased the tax on gasoline for 23 years, where we have not increased the tax on alcohol for 23 years, and where we have not increased the tax on cigarettes for 23 years, relatively speaking, they are the lowest-priced products in the world. We literally, in a sense, subsidize them. I think there is no reason not to properly tax those products and try to bring the revenue more in line with our expenditure levels.
While it is tragic for any worker to be without a job, it will be even more tragic if in our efforts to reduce unemployment quickly we lay the base for a new round of inflation-caused recession several years hence.
In addition, I think it would set a bad precedent, and one contrary to the intent of the Budget Reform Act, to "trigger" different levels of spending and revenues on the basis of unemployment or other economic indicators. A number of factors, including unemployment, must be weighed in determining the correct level of outlays, revenues and deficit. I do not believe it can be done properly on the basis of a simple formula. It is the responsibility of the Budget Committee to continue to analyze budgetary and other economic data and to present additional recommendations to the full Senate in its second concurrent resolution. If we build a triggering formula into the first concurrent resolution, there is little point in the Budget Committee proceeding; indeed, there is very little point to the entire process.
I am also opposed to any significant reduction in the committee's recommended deficit level. The $67.2 billion deficit recommended is higher than the administration's figure of $60 billion only because of a more realistic assessment of economic assumptions and estimated program costs. In addition, the full amount of the deficit can be attributed to the economic downturn. If the economy were operating at full employment, outlays would be $15 billion lower and revenue would be $53 billion higher. To attempt a significant reduction in the recommended. deficit level would be recessionary.
An outlay cut in the amount of $25 billion would, in my opinion, be impossible as a practical matter. On a constant dollar basis it would require a cut in program costs from their fiscal year 1975 level and thus a significant cut in personnel and services. In addition, the cut would have to come from the 28 percent of the Federal budget that is "controllable", further exacerbating its impact.
While I look forward to the day when we can enact a balanced Federal budget, economic realities make this impossible and unwise now at a time of deep recession.
In conclusion, I suggest the recommendations and the work of the Budget Committee. I urge my colleague to do so.
I commend most highly our distinguished chairman and our distinguished ranking minority member for the extraordinary work they and the members of their committee have done in the past few months to bring us up to this stage.
Mr. BELLMON. Mr. President, will the Senator yield?
Mr. PERCY. I am happy to yield.
Mr. BELLMON. I thank the distinguished senior Senator from Illinois for his kind comments. I know a little of the great contribution that the Senator made in the formation of the budget legislation which the Senate approved last year.
I regret that the Senator from Illinois is not on the Budget Committee. He could have made a great contribution to this committee. But, in all honesty, I must confess that I count it somewhat a fortuitous development that things worked out so that I could become the ranking member. It has truly been a great experience and, as Chairman MUSKIE has said, it has been a learning experience for all of us.
Senator PERCY has had wide experience in government, and before coming to the Senate he had an illustrious career in the private sector, and clearly could have made a great contribution to the deliberations of the Budget Committee. As I say, I am sorry he was not able to serve on the committee because of the other important committee assignments he has.
I would like to say to the Senator that, having served with the committee now since the first of January, I am convinced that the members of the Budget Committee are determined to live up to the high expectations that those who perfected the Budget Act had when the law was passed.
It seems we do have a group who, under the able chairmanship of Senator MUSKIE, are dedicated to this work. Their attendance at committee hearings has been exceptionally high, and their level of participation has been high, and I believe among all the committees on which I have served in Congress, the work of the Budget Committee is outstanding. So I think the group we have together is going to do a job as good as humanly possible.
I would again like to compliment our chairman, the Senator from Maine. I believe under his chairmanship we have real hope that a new day has dawned in the management of this country's fiscal affairs.
Again I would like to congratulate the distinguished senior Senator from Illinois for the role he had in perfecting this legislation.
Mr. PERCY. I thank my distinguished colleague.
Now that the budget process has been put together, the hard work really begins. It is going to take a lot of tenacity, a lot of determination. But I would like to say that since the Senator from Illinois has come to the Senate – and this is his 9th year – he has never introduced a piece of legislation that would cost money above the budget that he did not find another way to reduce another expenditure to pay for that additional money above the budget. He has never introduced an expenditure without an offsetting program to reduce an element of lesser priority.
I know that President Nixon said to me one time when I went there to discuss the process with him that we have been operating under in our office, that he had never heard of a Member of Congress who ever did that.
The Senator from Illinois has done it now for 9 years, and it works. I think we, as a whole, ought to adopt that process.
Once we set this ceiling, and we decide no matter what happens, an emergency comes along, and we need a new program, we have to have something we did not take into account, it was going to break the ceiling, then we have got to go through the whole process again, and I hope the first inclination will be to take out some other program of lesser priority and cut the spending.
The second inclination should be if you cannot cut anything else, then raise the revenue and vote the taxes that will do it and pay-as-we-go.
And third – and only third – is to raise the ceiling. That is the easy way out, but that will then bring about, I think, what we all feared and what we hope will never transpire; that elastic ceiling has to be just as fixed as we possibly can make it, and live within it. I could not imagine we could have finer committee members and leadership on the committee than to hold to those principles.
Mr. MUSKIE. At that point, we may be raising the roof. [Laughter.]
I would like to thank the distinguished Senator from Illinois for his support and his expression of approval. They are particularly meaningful to me because I know how closely he has followed the processes we followed as we worked out the law, so I have a deep appreciation for that spirit.
I think we are through for today, and I believe we will resume deliberations on the bill at about 11 in the morning.