December 19, 1975
Page 42160
Mr. LONG. Mr. President, the amendment I am offering is the tax cut bill as incorporated in the conference report on H.R. 5559, which was sent to the President and which was vetoed. The veto was sustained in the House yesterday.
The amendment to the amendment is language which we believe to be a fair compromise of the difference between the President and Congress with regard to relating tax cuts to spending cuts.
Mr. President, in order that Senators who would like to vote against a tax cut but who, at the same time, would like to record themselves in favor of the proposition that tax cuts should be related to spending cuts, I ask unanimous consent that we might vote on the amendment first and on the amendment to the amendment thereafter. That would then give every Senator the right to express his views most accurately.
The PRESIDING OFFICER. Is there objection? The Chair hears none, and it is so ordered.
Mr. LONG. Mr. President, the first vote then will come on the tax cut itself. The Senate passed the tax cut extension by a vote of 73 to 19. I hope we could dispose of the tax cut provisions by a voice vote, Mr. President, on the assumption that the vote would be the same as it was before.
Mr. HUGH SCOTT. Mr. President, will the Senator yield?
Mr. LONG. Yes.
Mr. HUGH SCOTT. I have reason to believe, good reason to believe, Mr. President, that the proposal of the Senator from Louisiana by which certain language will be inserted will be acceptable to the President.
In fairness to the Senate, I have not had an opportunity to talk to the President, but I am so advised by his intermediaries.
Mr. ROTH. Mr. President, will the Senator yield on that point?
Mr. HUGH SCOTT. Yes.
Mr. ROTH. I was trying to get in contact with our minority leader earlier today.
Mr. HUGH SCOTT. The minority leader knows. I returned the call and missed the Senator.
Mr. ROTH. But I will advise that the chairman of the Finance Committee and I labored long last night in trying to develop this language, and I advised the chairman, at the completion of that, that I was going to send the language over to the White House so that this would not be an exercise in futility.
After several discussions with the White House I am pleased to say that they would accept the—
Mr. HUGH SCOTT. I thank the Senator. For the sake of the RECORD, the Senator called me, I missed him, and I spent the rest of the morning trying to get in touch. I found the Senator from Oklahoma and told him I was looking for the Senator from Delaware because that was the way the word was coming to me.
I hope this will be acceptable. We want tax relief, we want it very much. I voted for the tax relief extension. The Senator from Louisiana is one of the greatest Members of this Chamber in his ingenuity and his competence and, thank God, in his persistence. I personally am so relieved that I, for once in my life, lack the words to express it.
Mr. LONG. I thank the distinguished Senator.
Mr. CURTIS addressed the Chair.
Mr. LONG. I yield to the Senator from Nebraska.
Mr. CURTIS. I was going to take a very little time on my own here.
Mr. LONG. Fine.
Mr. CURTIS. Mr. President, the issue now has developed in this manner. Some language has been—
Mr. STENNIS. Mr. President, may we have silence?
The PRESIDING OFFICER. There will be order in the Chamber and in the galleries, please.
The Senator from Nebraska.
Mr. CURTIS. Some language has been formulated which expresses an intent or a desire to cut Federal spending. I supported that language in the committee. I support it now. I will vote for any language, any feeling, that restrains spending because it is obvious with a more than $70 billion deficit in 1 year that has got to be done.
I am sure that that will meet with the approval of the vast majority of Senators.
Mr. President, we should keep in mind that a ceiling of a figure, or words committing us to restrain spending, are all about the same because none of them have any authority beyond the statute and they are of limited authority.
Any procedure that we wait and go through next spring is an act of Congress, which in this body can be overturned by majority vote, even a point of order, and after this, Congress goes through the legalistic steps to establish a congressional ceiling for fiscal 1977.
At the best, it is very little for 3 months because the next 9 months is in a new Congress and one Congress cannot bind another.
So I have disagreed all along with the legalistic views taken by some on the Budget Committee about ceilings. Ceilings are a commitment to an objective, that is all.
Here, this language commits to an objective — because I hoped that it will restrain something, something I supported in that language.
I believe we will have a chance to vote on this proposal. Then the question is, after we put in that language, should we reduce taxes?
On that I am not going to take time to argue because everyone has been committed. With me, I cannot. I cannot vote for any tax reduction when we are operating under a $74 billion deficit.
I cannot even extend the existing one and I assume there will be some others who will take the same attitude.
But that is the issue. The language committed for restraining spending carries a certain commitment. I approve of that effort.
When the roll is called on final passage, I will not support the cut, not because of the deficiencies in the language, but because I do not favor a cut of any kind in view of the great deficit we have.
I want to thank my distinguished chairman, as well as staff and other people who worked on this matter through the night.
Mr. ALLEN. Mr. President, I think it is important that the tax cuts be continued and that the enactment of the continuation of the tax cuts take place prior to the first of the year.
I think that this is a good compromise of this issue to enact the extension of the tax cuts and at the same time have the Congress go on record, not as shooting for a definite ceiling on expenditures, but as committing itself to a reduction in spending.
This is the best compromise that could be worked out. I commend the distinguished chairman, the distinguished Senator from Louisiana (Mr. LONG) , and the able and distinguished Senator from Delaware (Mr. ROTH), who has made a most important contribution and the distinguished Senator from Nebraska (Mr. CURTIS) and the distinguished Senator from Maine (Mr. MUSKIE) for staying in behind this matter and seeing that we did not adjourn for the holidays until at least one more effort had been made to resolve this impasse.
It would seem to me that there is enough credit here for the Congress, there is enough credit for the President, but really there are no gainers in resolving this impasse other than the American taxpayers and the benefit to the economy.
So I am delighted that this compromise has been arrived at, at least here in the Senate, and I hardly see how the House will fail to go along with the compromise.
Mr. MUSKIE addressed the Chair.
The PRESIDING OFFICER. The Senator from Maine.
Mr. MUSKIE. Mr. President, this language has been developed by my distinguished colleague from Delaware (Mr. ROTH) and Senator LONG, with the assistance of the Finance Committee staff.
I understand that they did so in consultation with two Members of the House and also with some consultation with the White House.
I gather also that there was some—
Mr. LONG. Mr. President, will the Senator yield at that point?
Mr. MUSKIE. Yes.
Mr. LONG. There is not one word in the amendment that was suggested to me, or as far as I know was suggested to the Senator from Delaware, by any person from the White House.
I have in my hand here an original suggestion which embodied the thoughts that we had which had been drafted by Mr. Larry Woodworth, who is the chief of the staff of the Joint Committee on Internal Revenue Taxation.
He did this after checking to find something that we thought would appeal to some of those who voted to sustain the President's veto, but who also agree with what we are trying to do.
We perfected his draft and wound up with the language we are now offering. What we are now offering, by the way, includes a change suggested by the Senator from Maine (Mr. MUSKIE). But so far as I know, there is not one word in here that was suggested by the White House.
Mr. MUSKIE. I did not mean to imply that. It was my understanding when the language was presented to me that the language had been discussed. I understood that it was discussed with representatives of the White House, and favorable signals were received. That is the only point I was trying to make. I was not privy to those discussions.
Mr. LONG. I just wanted to get the record straight that after we perfected what we proposed to offer, the Senator from Delaware communicated with the White House. And he certainly has the right to do that. I do not challenge anyone's right to communicate with anyone he wants to. The Senator did tell me that he expected to communicate with the White House and he hoped that they would go along with this, and if they could not support it that they would not fight it. He had the right to communicate with them, of course.
Mr. MUSKIE. I welcome the fact that he did. It is important to the Senate to get some indication of what reception this language will get from the administration if the Congress is to be asked to act on it and try to enact it into law.
I discussed this earlier with the distinguished chairman of the Finance Committee (Mr. LONG) prior to the meeting of the Finance Committee this morning on this proposal. The Finance Committee, as he has told us, unanimously supported it.
At his request I called a meeting of the Budget Committee and we considered it at 11 o'clock this morning. The Budget Committee has also approved it. We are together in the Chamber in support of this language. I rise simply for the purpose of giving briefly some of the reasons why the Budget Committee supported the language.
In the first place, of course, and overriding everything else, is the importanceof continuing the tax cut, both in terms of the individual taxpayers who would be impacted if the tax cut is not continued, and also because of the impact on the economy if the tax cut is not continued.
I would like to remind Members that the tax cut on an annual basis amounts to a little over $16 billion. On an annual basis the increase in social security taxes which will go into effect the 1st of the year are on the order of $3 billion. So what we are talking about in terms of an additional tax burden for taxpayers and the economy the 1st of this year if we do not extend the tax cuts would be on the order of $19 billion. That is a significant impact. It concerns all the members of the Budget Committee and the members of the Finance Committee. It also concerns every Member of the Senate as well. I have heard Senator LONG emphasize this point in so many of the discussions we have had.
So it is important that we find a way to continue the tax cuts and to accommodate our differences with the administration on how we handle the budget. This language attempts to get at that second problem.
With respect to that, it seems to me, as I read this language that it has the effect of affirming the budget process which the Congress has adopted and which we have been implementing, I think with demonstrable success this year.
As a matter of fact, in the second paragraph, this language states, "Congress affirms its commitments to the procedures established by the Congressional Budget and Impoundment Control Act of1974."
The language does contain a reference to a principle which the President asserts with respect to his budget policy for this year. The President has been asserting the principle that if there is a dollar in tax cuts, it ought to be matched by a dollar in outlays. We, in the SenateBudget Committee, have not been prepared to adopt that principle. No. 1, because at this point we do not know what tax cuts the President has in mind or will propose in his budget message the last of the month. Second, we do not know what the impact might be on particular segments of our population or our society. Until we know that, we are hardly in a position to give them our blank check blessing.
Third, of course, we are concerned about the needs of the economy in these troubled times as they may develop in the course of the next months until the beginning of the next fiscal year.
Then, of course, we are concerned with unforeseen circumstances of another nature that may come up.
So what we have been striving for, while assuring the President that we would give consideration to this principle that he has asserted, is the preservation of Congress prerogatives for taking into account these other factors.
If I may now refer to the language of the distinguished Senator from Louisiana, first of all with respect to the President's principle, the language says:
If the Congress recommends a continuation of the tax reduction provided by this measure for the remainder of the calendar year 1976, Congress shall provide for reductions in the level of spending which would otherwise occur by one dollar for each one dollar of tax reduction from the 1974 tax rate levels.
That is the move in the direction of the President.
Provided, however,—
And this is the language that preserves our options—
— that nothing shall preclude the right of the Congress to pass a resolution containing a higher or lower expenditure figure if the Congress concludes that this is warranted by changing economic conditions or other unforeseen circumstances.
The key language is the last, "by changing economic conditions or other unforeseen circumstances."
Let me point out that that does not say "provided that economic conditions next year are different than we now think they will be."
If it were that kind of language, I would consider that to be a deprivation of congressional prerogatives. What it says is, "by changing economic conditions." Economic conditions, of course, are constantly changing, in recent months in undesirable ways.
In any event, Congress still retains the option under that language to make its independent judgments about what economic conditions may require when we look at the budget next spring.
With respect to the language "other unforeseen circumstances," let me point out that one of the unforeseen circumstances that we can foresee is the nature of the President's $28 billion in cuts.
He has not told us what they are. He has refused to give us information as to what they are. We have no idea how they will impact upon particular people who are affected by Federal programs.
So far as I am concerned, the nature of those proposed cuts constitute, in my judgment, an unforeseen circumstance within the language of this amendment.
I am trying to be as frank as I can with the Senate and with the administration in giving my views on this language. It is with those views in mind that I have agreed to accept this language for myself. I believe that is also the view of the members of the Budget Committee who were in attendance this morning at the Budget Committee session.
In my judgment, what we have done here is to make a commitment to the President that we will give serious consideration to this budget principle that he asserts, but that we also retain the prerogatives which the Congressional Budget and Impoundment Control Act of 1974 gave to us.
With that in mind and recognizing, of course, that those on the other side of this compromise see in it whatever they want to see and will say so, recognizing that that is in the nature of compromise, whenever we enter into compromises. The Budget Committee found this meaning for it.
Mr. MONDALE. Mr. President, will the Senator yield?
Mr. MUSKIE. I yield to the Senator from Minnesota.
Mr. MONDALE. I thank the distinguished chairman of the Budget Committee for the explanation, which I think does express the view of most of us who serve with him on the committee.
Will the Senator also comment on the matter of how these cuts can be made with respect to a possible tax expenditure pickup?
Mr. MUSKIE. Yes. I have suggested to my good friend from Minnesota and to the Budget Committee the addition of language in this amendment which would clarify that point, and I might suggest to the Senator where that language would have gone. Following the language "containing a higher or lower expenditure figure" there would have followed the words "offsetting tax expenditure reductions."
As I understand the discussion that took place in the Committee on Finance, it was the clear understanding of all members that that was implicit in the language, and that it was not necessary to put it explicitly. Am I correct?
Mr. LONG. The Senator is entirely correct. I do not think there is any misunderstanding about that point, either at the White House, in the House of Representatives, or in the Senate. If we want to bring in a revenue bill which increases taxes on certain people and reduces taxes for others, or if we want to bring in a bill that increases excise taxes and reduces income taxes, or vice versa, but where the revenue we raise offsets the revenue that we lose, or if we bring in two bills and do it on two separate bills, there is nothing in this resolution that would preclude Congress from spending whatever additional revenue it can raise, either in that bill or a subsequent bill. There never has been a misunderstanding about that, and that is why I do not think it is necessary for it to be in the resolution.
Mr. PASTORE. Mr. President, will the Senator yield?
Mr. MUSKIE. Yes. I yield.
Mr. PASTORE. One thing that seems a little bit depressing to me is the fact that this whole thing seems motivated on the assumption that there will not be an upsurge in the economy, that there will be no return to prosperity. What if the economy so changes that more money comes into the coffers of the U.S. Treasury? Are we then going to be bound by setting this ceiling, and taking it out of the hides of those on social security or what have you?
Mr. MUSKIE. No, I do not—
Mr. PASTORE. Is seems to me that the language as read could be so construed. It strikes me that if the economy should so improve that more money comes into the Treasury, we should reserve the prerogative that Congress should do whatever is in the best interests of the people.
Mr. RIBICOFF. Mr. President, if the Senator will yield, unfortunately copies of the amendment are not on every Senators' desk, but the last clause, "To pass a resolution containing a higher or lower expenditure figure if the Congress concludes that this is warranted by changing economic conditions or other unforeseen circumstances" would cover that. And that is in the resolution at the suggestion of the Senator from Rhode Island.
Mr. PASTORE. That is correct; and this was in response to the original caveat of the President that we were freezing in a ceiling of $395 billion, as though we were going down the drain in the meantime, that the only way we could pick up a premium to the taxpayer by lowering taxes is if we were cutting off at the other end.
Mr. President, I think there is in this country a possibility of a little bit of prosperity, and I do not think we should rule that out at this moment, because what we need at this moment in the United States of America more than anything else is the restoration of confidence, and I do not think we ought to cement ourselves in so that we cannot be extricated.
Mr. MUSKIE. I could not agree with the Senator more.
Mr. RIBICOFF. We are not cementing ourselves in at all. As the Senator from Minnesota commented earlier, we were facing a situation of substantial cuts in social services, and I think that could be picked up by substantial tax reform, to bring into the Treasury some $5 or $6 billion, and this body will have an opportunity at that time to determine whether it really wants tax reform, closing loopholes, as against cutting basic social services to the people of this Nation.
I think that is understood by both the Committee on Finance and the Budget Committee, and this will really give us an opportunity next year to grapple with the issue: Do we really want tax reform for all the people of this country?
Mr. MUSKIE. I think that is a very important point.
Mr. FORD. Mr. President, will the Senator yield for two or three questions?
Mr. MUSKIE. Yes, but let me make another point, to indicate the flexibility in this proposal.
For example, it contains this language: If the Congress recommends a continuation of the tax reduction next July 1st.
In other words, implicit in that language is the right of Congress to look at the state of the economy next May, to determine whether or not we need this kind of economic measure at that point.
Mr. PASTORE. Well, I would stipulate that whatever we do, at least we give one signal to the American people, that we look to the future with a little bit of optimism rather than pessimism. I do not think it is the end of the road.
Mr. MUSKIE. With a jacket like that, a man has to be an optimist.
Mr. PASTORE. You are not kidding, and that is why I wore it today, in the spirit of Christmas. And I hope they let us go home to enjoy Christmas with our families.
SEVERAL SENATORS. Hear, hear.
Mr. MUSKIE. I yield to my friend from Kentucky.
Mr. FORD. I thank the Senator.
Will the Senator answer this question? I have two or three. If there is no change in the economic conditions, then what do we do? If we just stay at the status quo, on the same level, what do we do then?
Mr. MUSKIE. I think we can assume there is going to be change. It is a dynamic situation. All the forecasters say there will be change; there may be differences about what the degree of change may be, but that there will be change in important elements of the economy seems certain.
Mr. FORD. All right. Then the Senator is saying to me that we will not adhere to the $395 ceiling, it will be changed?
Mr. MUSKIE. That number is not included here, either explicitly or implicitly.
Mr. FORD. All right. The resolution states:
Congress shall provide for reductions in the level of spending which would otherwise occur by $1.00 for each $1.00 tax reduction (from the 1974 tax rate levels).
Is that dollar for dollar from the Executive budget that the President presents?
Mr. MUSKIE. That is left ambiguous.
Mr. FORD. Is it from the $395 billion ceiling that he is asking us to put on?
Mr. MUSKIE. It is not.
Mr. FORD. Are we going to take the $28 billion from the OMB projected need of, I believe, as high as $423 billion?
Mr. MUSKIE. There is no commitment to either the $423 billion figure or the $28 billion figure.
Mr. FORD. I respect the chairman a great deal, but I have heard an analogy to this resolution in the halls that it appears we have been wrestling with the President, he now has us down and we have said "uncle," and we are going to vote for the bill and send it back to him.
Mr. MUSKIE. No, I would not say that at all to my good friend from Kentucky, unless we choose to interpret it as the Senator has, which I think would be a real disservice to our own interests and prerogatives and the country's interests.
This is not a commitment to a $395 billion flat outright ceiling. If we had wanted to make such a commitment, we could have made it, and we refused to make it; and it is because we refused to make such a commitment that we have this language. We have not committed ourselves to the $423 billion estimate of projected spending, because there was no justification for it. We refused to make such a commitment, and it was because we refused to make such a commitment that we have this language here.
We have not committed ourselves to $28 billion of budget cuts that the President has proposed because he has not told us what they are. He has not presented them. He refused to make the commitment. Because we refused to make that commitment we have this language before us.
So the whole history of the negotiation of this language is of congressional refusal to commit itself to those numbers.
I fail to see how the Senator can turn that legislative history around to read this language as a commitment to some thing which we designed the language prevent.
Mr. FORD. As I said before, it is about like a beagle dog getting ahold of a great dane, which I think the Senator from Maine is, and I am not going to do that. I am a little bit smarter than that, I hope.
But we in this one paragraph say "shall" and then in the middle of the paragraph we say "provided, however".
Really we are not saying anything, but one can read the first half of it and print that, and we have committed ourselves dollar for dollar, however any one individual wishes to interpret that language in this resolution.
Mr. MUSKIE. One can distort any law by printing only half of it, I say to the Senator.
Mr. FORD. That is right.
Mr. MUSKIE. But this has to be read in the context of the whole language.
Mr. FORD. One is going to be able to read it in the context he wishes.
We have one saying "shall", and the other said "provided, however", and one can take the "shall" out.
Mr. MUSKIE. No. There is another "shall" after the "provided". May I read it?
Mr. FORD. Changing economic conditions.
Mr. MUSKIE. "Nothing shall preclude — nothing — by that one is referring to the "shall" that the Senator referred to.
Mr. FORD. All right.
Mr. MUSKIE. "Nothing shall preclude". Nothing, including the language before the "provided", "shall preclude the right of Congress to pass a resolution containing a higher or lower expenditure figure", and the rest of that condition.
The "nothing shall preclude" is surely just as final, definite, and precise as the other "shall" which worries the Senator so.
Mr. FORD. I think some areas of the country would probably pronounce it a "shilling".
Mr. MUSKIE. It may be a shell game.
Mr. FORD. I think maybe that is where we are. I do not believe we are fooling anyone, really.
Mr. MUSKIE. I hope not.
Mr. FORD. I hope not.
Mr. MUSKIE. I concur with that. I hope it is clear to everyone, including the Senator from Kentucky, that under this language the prerogatives of Congress under the Congressional Budget Control Acts are preserved.
Mr. FORD. I want it preserved, and that is why I was so concerned. I want it preserved because I have seen it work. I have seen the Senator from Maine work and labor hard in the Senate Chamber to send bills back to conference, and I think we are eliminating the ability of this Chamber.
Mr. MUSKIE. I do not think so.
Mr. FORD. We have a piece of that language that is getting the tax extension bill through, that says dollar for dollar, and anyone can lay on that who wants to, to say we received what we wanted and now it is going through.
Mr. MUSKIE. Let me say this to the Senator: In the first place, if the Senator's interpretation is correct, the question follows: how would that interpretation be enforced? Second, I do not think that interpretation would hold unless Congress gives it that interpretation. I mean it is Congress that implements the Budget Control Act. It is Congress that determines what this language means. The President conceivably would challenge us, as he has for months.
Mr. FORD. Will the Senator agree, though, this will be a piece of legislation that will either be passed or turned down by the House and the Senate and will go to the President for his signature?
Then, as I understand it, it becomes law.
Mr. MUSKIE. That is right.
Mr. FORD. That law is subject to interpretation.
Mr. MUSKIE. That is right.
Mr. FORD. I believe we have two areas in which one can interpret it any way he wishes to.
Mr. MUSKIE. Has the Senator seen a law that could not be interpreted in more than one way?
Mr. FORD. Yes, if he were not a lawyer.
Mr. MUSKIE. What I am trying to do here is to make legislative history.
Mr. LONG. Mr. President, will the Senator yield at that point?
Mr. MUSKIE. Everyone on that part agrees, except the Senator from Kentucky, in making legislative history that makes it clear that leaves this prerogative in the hands of Congress and the Budget Committee.
Mr. LONG. Mr. President, everyone can construe the language any way he wishes to construe it as far as I am concerned. But as far as I am concerned, what that language means is that we will take this tax cut into consideration in deciding how much we are going to spend.
The President has said, that it looked to him as if the way things were going, Congress would spend $423 billion next year, which he felt was altogether too much. He said he was willing to go along with a $28 billion tax cut if Congress would reduce spending that much below $423 billion.
This is what our approach is in the amendment. We say we do not buy the $423 billion figure. We are not prepared to buy any specific figure, and we do not know what the figure is going to be. We understand that the President is using $423 billion as his starting point, and cutting down from there. He will take a tax cut into consideration, thinking how much money he can afford to spend, and so would we.
Every Governor in every State in America does business that way. He says:"Let me see how much money we have here. How much can we afford? Can we afford a tax cut?"
We are saying here that if we extend the tax cut we expect to spend less money than if we do not extend the tax cut, because the tax cut reduces the revenue that we have to spend.
It seems to me, whether one reaches it by adding up a column of figures from the bottom to the top or from the top down to the bottom, one still arrives at the same conclusion.
What we are saying here is that we expect to take the tax cut and weigh that against some things that we would like to do and say: "Would you rather spend this money reducing taxes, or spend that same amount of money providing services?"
This is the way the President is thinking about it. If he wishes to think about it from that point of view, I do not know why we also cannot think about it from that point of view.
Let us decide what we wish to spend for this country. We can say, "Here are some wonderful things we would like to do." Let us look at the lowest priority items we can find no matter how much merit they all contain. Let us see, looking at them, whether we think we ought to put that much into spending or whether we should put some of it into tax reductions?
I would be pleased but very much surprised if the President looks upon the level of spending that this Nation can afford as being the precise same figure as the Budget Committee does, by the time those men, representing 535 Members of Congress, each makes his input and they arrive at their figure. But I do not think the President and the Congress are going to be all that far apart.
My guess is they are going to be a lot closer together than people at this point anticipate.
So rather than have this Nation suffer because we anticipate that they will not be able to agree, we ought to be willing to presume we are going to do as we did this year. By the time the Budget Committee gets through with deliberations, they may not be all that far apart from the President's figure.
Mr. MOSS. Mr. President, will the Senator yield?
Mr. MUSKIE. I yield to my good friend from Utah.
Mr. MOSS. If I understand what the chairman of the Budget Committee and the chairman of the Committee on Finance have been saying it is that we are here talking about some semantics, some cosmetic type language.
As we sat in the Budget Committee this morning we discussed this.
Really, the language, as I see it, does not change things at all as far as the Budget Committee is concerned.
I understand the concern of the Senator from Kentucky, pointing out that on one hand it appears to give something and immediately qualifies it out in the other way.
Is it not a fact that we are, in effect, reenacting the tax cut? We are taking the chestnuts out of the fire for the President and in order to do that and salve his conscience, or whatever else, we have to put in this kind of cosmetic language. It is really meaningless, is it not?
Mr. MUSKIE. I do not wish to overstress things. I do not wish to discourage the President from signing the bill. But let me say that I think he preserves all our prerogatives.
Mr. MOSS. I thank the Senator.
Mr. MUSKIE. It may mean something to him.
Mr. RIBICOFF. Mr. President, will the Senator yield?
Mr. MOSS. I yield.
Mr. RIBICOFF I think the Senator from Utah is correct and also the Senator from Kentucky. There is really no winner except the American people.
The President has gained no victory and Congress has gained no victory, but some 80 million taxpayers in this country have gained a victory. We are in a situation in which Congress and the President are at sword's point on the language. The people of this country would have suffered and the economy would have suffered by taking out these billions of dollars from the economy and being in a position to assure the loss of some 500,000 jobs, in accordance with the opinion of all the economists who appeared before the Budget Committee and the Finance Committee.
I point out to the Senator from Kentucky that what there is in this proviso is that none of this affects the tax cut for the first 6 months. That goes into place, and the budget figures that we have adopted still pertain. This resolution applies only to what other additional tax cuts are made after July 1, 1976. It does not apply to the tax cuts to which we are now addressing ourselves.
During those circumstances, we also are in a position — and I believe the Senator from Maine has won his point — that the President of the United States finally will have to tell Congress and the American people where he expects to cut the budget. The administration continuously has refused to give that information to Congress and to the American people. So, comes the end of January and the beginning of February, the President finally will have to give all of us a bill of particulars.
We are not obliged to take the bill of particulars that the White House gives us. At this point, the congressional committees — the Budget Committee, the Appropriations Committee, and the Authorizations Committee — will go to work and make their other determinations; and then we will find out where the cuts will or will not come. In addition, we can make the determination, if we wish, to pick up some of these cuts by some tax reform which could bring billions of dollars into the Treasury.
Mr. MUSKIE. I thank the Senator.
Mr. President, I ask unanimous consent to have printed in the RECORD an editorial published today in the New York Times and an editorial in the Washington Post in connection with this matter.
There being no objection, the editorials were ordered to be printed in the RECORD, as follows:
[From The New York Times, Dec. 19, 1975]
IMPASSE ON TAXES
President Ford's veto of the tax bill and the failure of the House to override create a situation that ought not be allowed to drag into 1976 unresolved. If inaction causes income tax rates to revert to the pre-cut levels of 1974, virtually every American family will suffer some loss in purchasing power, with further adverse effects on an already sluggish recovery.
This is a foolish price to make the country pay when both President and Congress agree that continued tax relief is essential. In recognition of that reality, Congress has wisely decided not to take its holiday recess but to keep meeting in hopes of arriving at an accommodation with Mr. Ford. It is no time for inflexibility by either side.
We remain convinced that the President should have signed the tax cut extension in the clear cut form in which it emerged from Congress. His insistence that the renewed cut in Federal revenue had to be matched by a precisely equal cut in projected Federal spending for fiscal 1977 was an expression of politics, not economics.
The fact is that Congress proposed to limit the tax cut to the next six months, a period already covered by the Federal spending ceiling the legislators have fixed for the 1976 fiscal year under their admirable new budget procedure. It is senseless for Mr. Ford to demand that Congress bind itself now to his own proposed 1977 ceiling of $395 billion or to any other arbitrary figure.
The budget appropriate to the nation's needs next year can only be determined after the President submits his own proposals for each agency and function, and after these proposals are subjected to thorough review under the exacting rules Congress has set for itself. The pre-run of that machinery this year encourages hope that it can establish realistic curbs on the runaway growth in governmental expenditure at the same time that it guards against shortchanging priority functions.
The pinch of inflation on living standards at every level and the frailty of the economic revival mandate an extension of tax relief for at least another half year. It is up to the White House and Congress to reconcile their differences on a basis that will promote national, not partisan, interests.
[From the Washington Post, Dec. 9, 1975]
STALEMATE ON TAXES
Another stalemate on the basic economic policy now confronts the country, and this one is the most dangerous of all. With President Ford's profoundly unwise decision to veto the tax cut extension, and his congressional opponents' unfortunate inability to override him, the stalemate is complete. Neither side can impose its will upon the other — and with that, both sides pack up to leave town for the holidays. Merry Christmas to all you taxpayers.
If last spring's temporary tax cut expires at the end of the month — as it will, unless there is further legislation — the taxes withheld from the average paycheck will go up $3 to $4 a week.
For most families, it will be an annoyance rather than a disaster. Three dollars a week is not the end of the world. But three dollars a week times 86 million paychecks is well over $1 billion a month, and that is enough to make a substantial difference in the way in which the American economy works. The effect is, of course, to reduce purchasing power, consumer demand and business investment — all of them essential to recovery from the recession.
That recovery has already shown itself to be a rather frail and contingent affair — a vehicle on which sensible people would not try to load any more baggage than it is currently carrying. But now it is going to have to take on, in addition to everything else, an intolerably heavy freight of ideology. You can already hear the springs creaking. Will they break altogether? No one knows. It is at least possible that this unplanned tax increase, in conjunction with other uncertainties ahead, could tip the country back into another recession. Perhaps you have lost count: It would be the third since 1970.
It is impossible to avoid the impression that Mr. Ford's harsh and stubborn resolve in this long dispute has been increased by the recent political polls, which climaxed last weekend in figures showing Mr. Reagan to be running ahead of him among Republicans. Presidential overreaction to polls is one of the notorious hazards of our system of government. But the whole handling of the tax issue at the White House strengthens the dismaying prospects that the country is going to be ruled mainly by Mr. Gallup, Mr. Harris and their computers for the next 11 months.
The substance of this collision between the President and Congress is exasperatingly meager in proportion to the dire consequences that might flow from it. There is a clumsiness that overtakes American politicians when they begin to pursue ideological dogma; that pursuit does not lie in their tradition, and they are not generally very gifted at it. Mr. Ford has let himself be talked into becoming an example of this rule.
Mr. Ford wants, and thinks that he needs, some sort of symbolic acknowledgement from Congress that it has committed a fiscal sin. He wants it to kneel down with him right now, here in front of the crowd, and take the pledge — in the form of a limit on spending. You might think that we would want it to cover the current fiscal year, which ends next summer. But the current year does not suit Mr. Ford's purpose since Congress, following its own Budget Reform Act, has just legislated its own spending limit to cover it. That limit is a very tough one, under which any bill exceeding the total budget is illegal and can be stopped dead on a point of order brought by any one member of either House. In regard to 1976, that does not leave Mr. Ford much to ask for. In consequence he has briskly moved the quarrel ahead to fiscal 1977, which does not begin until next October.
That is how the country comes to be entangled in a bitter dispute over a spending limit for a year for which the President himself has not drafted his own budget proposals, and for which the economic forecasts are still highly imprecise. As everyone has learned by recent experience, both recession and inflation tend to increase spending rapidly. The tremendous budget deficit this year, for example, is much less a cause of the recession and inflation than a result of it. Inflation pushes up spending because the Navy has to pay more for the same amount of oil for its ships, and because Social Security benefits rise automatically with the cost of living. Early this year Mr. Ford proposed to reduce the cost-of-living increments in the Social Security checks, but Congress would not hear of it. At the same time, recession adds costs in categories like unemployment insurance, in which federal outlays rose from $6 billion in fiscal 1974 to something over $18 billion this year. If a spending limit is based on forecasts of unemployment that turn out to be too low, is it a fair and effective public policy to cut off unemployment benefits because they exceed that arbitrary and premature limit? The question answers itself.
Despite all the angry words of the past few days, there is doubtless still a chance that the President and Congress will be able to get together before New Year's Eve on some sort of temporary compromise. To extend the present tax withholding schedules for a period of three months would be a poor precedent, but it would be better than nothing.
The truth of the matter is that Mr. Ford has taken a firm grip on the wrong side of this argument. and the role of Oliver Cromwell does not become him. It would be helpful to him, and to his cause, if he were to reflect upon the characteristics that brought him remarkably wide public support through his first year in office. In those days he made great efforts to be open minded, conciliatory and pragmatic. Those are qualities that served him well then, and could serve him well again. After all, the business before him is not only the next election, but quite possibly the next recession as well.
Mr. MUSKIE. Mr. President, I yield to the ranking Republican on the committee, Senator BELLMON
Mr. BELLMON. Mr. President, I congratulate the chairman of the Committee on Finance, Senator LONG, and Senator ROTH, and Senator MUSKIE for the tremendous amount of work that has gone into this matter and for the spirit of cooperation which has developed. As has been said, this language does protect the budget processes that were mandated by the law which Congress approved last year. It also gives Congress sufficient flexibility to deal with economic realities in these uncertain times, as they develop over the next 12 months.
The thing that has been good about this whole business, I believe, is that it has served as an educational process for some people downtown who did not fully realize what Congress did when we approved the Budget Act. I believe they understand better now the determination Congress has to hold the line on spending, and they understand the problems that are presented by some arbitrary spending ceiling which makes it difficult for Congress to discharge its duties properly.
When we look at the record of spending by the 94th Congress, I believe it is one that cannot be criticized by the President or the administration. Later today, I understand, the distinguished chairman of the Committee on Appropriations will put into the RECORD some figures which will make this point very eloquently. So if Congress can continue next year to do as good a job as it has done this year, I believe the President should be pleased with the results.
So far as I am concerned, the objective we have here is to find a way of providing the essential services the American people need and to get the Nation back on the route to prosperity. If we are able to arrive at this kind of program and if the country does recover, there will be plenty of credit for all of us. If it does not, it will be futile for us to waste time trying to fix the blame.
I congratulate all those who worked out this compromise language, and I will support it wholeheartedly.
Mr. MUSKIE. Mr. President, I express my appreciation to Senator LONG, who served all week in trying to resolve the impasse between Congress and the President. He has had more optimism about that than I have had, in all frankness. But I suppose politicians and Senators from his part of the country have a greater confidence in the magic of words than some of us in my part of the country, where words are used more sparsely. If, indeed, this thing flies, I am going to take my hat off to that culture, I say to my good friend from Louisiana. [Laughter.]
I yield to the Senator from Kentucky.
Mr. FORD. I thank the Senator from Maine.
Mr. President, I believe the junior Senator from Kentucky has accomplished what he wanted to accomplish. The statement is now in the RECORD that Congress did not win and the President did not win, but the people of this country won; and that is the reason for our being in this Chamber.
If anyone has any doubts as to why this measure is going through, we now have it as a matter of record from the distinguished chairman of the Committee on Finance, the Senator from Louisiana, and the Senator from Maine. It is a matter of record. So the point I wanted to make has been made, and that was the reason for my question.
Hopefully, now, the people of this country will understand that they are supreme. If we can keep that image, we will restore the confidence that this Chamber needs.
Mr. MUSKIE. I want the Senator to know that we smoke something no different from that which he raises in the State of Kentucky, that we are operating with our faculties intact, as a result. I appreciate the questions of the Senator from Kentucky.
Mr. FORD. I am delighted that the Senator is smoking tobacco. [Laughter.]
Mr. MUSKIE. Mr. President, I yield the floor.
Mr. FANNIN. Mr. President, I do not want to delay the vote on this matter. I do commend the distinguished chairman of the committee for his fine work. I also commend the Senator from Delaware (Mr. ROTH) for his fine participation, which has been very important, and the staff members, who have worked long hours in getting together what I think is a good resolution.
The resolution states exactly what is involved. It is very clear to me. I think I understand the affirmation by Congress to share with the President his determination to reduce spending levels in order to reduce the national deficit. That is exactly what we say. Congress also affirms its commitments to the procedures established by the Congressional Budget and Impoundment Control Act of 1974. So it is clear what is involved.
The word "shall" is important, because we do commit ourselves, I think, to more than what would have been done otherwise. When we say that we will provide for a dollar reduction for each dollar of tax cut, we are making a commitment. It is a serious commitment, and one that I believe will affect what is done so far as the budget is concerned next year.
So I feel that a great deal has been accomplished. Regardless of how some may read this language, the intent, so far as I am concerned, is that we are going to do our utmost to reduce expenditures, and that is tremendously important to this body.
Mr. PASTORE. Mr. President, I am afraid that unless we stop complimenting one another and get this bill to a vote, there will not be enough time for the House to join us in this venture. I hope we keep that in mind. It is 1 o'clock in the afternoon. I understand that they are losing a quorum in the House. I believe we had better get going, if we want to pass the bill.
Mr. ROTH. Mr. President, I agree with the sentiments just expressed. I just wish to make a very brief statement, as one who has worked for many days with the distinguished chairman of the Committee on Finance.
It is important to point out that — at least, in my judgment — we are doing something today. I feel very strongly that it is important that we have a tax cut to assure a recovery from the recession; but I feel just as strongly that it is important that we go on record, in principle, that a reduction in Federal spending is necessary to curb inflation.
Mr. CURTIS. Will the Senator yield at that point?
Mr. ROTH. Yes, I yield.
Mr. CURTIS. I commend the distinguished Senator from Delaware for several things — his devotion to duty, his persistance, and, above all, his commitment to the principle that the huge expenditures of this Government must be restrained and that Congress should now commit themselves to that principle. He has given long hours and many days to trying to maintain that principle in connection with moving ahead the legislation before the committee and before the Senate. I not only commend him, I congratulate him.
Mr. ROTH. I thank the distinguished Senator for his very generous words. I want to add one further thought.
I also have been a strong believer in the budgetary process, as one who worked very hard to develop this new procedure. It seems to me that we have made an accommodation that does protect the rights of the Budgetary Committee and does provide the flexibility that we may need in the months ahead.
I urge the adoption of this amendment. I congratulate my chairman, as well as Larry Woodworth, Don Moorehead, and Bruce Thompson, who worked so hard, as staff, to get this accomplished.
I am happy to yield to the distinguished Senator from New York.
Mr. BUCKLEY. Mr. President, I thank my friend from Delaware.
I want to say two things very briefly. First of all, I do believe there is an element of fraud in describing what we are doing as a tax reduction to the American people. What we are really doing is making sure that all Americans will not be pushed into a still higher level of taxation by virtue of the fact that inflation has lifted working Americans into higher tax brackets. This is not a tax reduction in real terms.
The second thing I wish to say, as a member of the Committee on the Budget, is that I do not dismiss, as some others have, the words, "by changing economic conditions or other unforeseen circumstances." I believe that if we accept this resolution, and I trust we shall, we have every right to ask in the months ahead, as we deliberate on the budget resolution matter, whether or not there have been changed economic conditions or whether or not there have been other unforeseen circumstances that will justify a reduction in expenses that is not equivalent to a reduction in at least the nominal rate of taxes we have received.
I, too, want to express my appreciationto the Senator from Delaware for his work in seeing to it that we join our families by the 25th.
Mr. ROTH. I agree with the distinguished Senator from New York. I thank him for his kind words. This really is not a tax reduction, and the results of inflation have been to push many people into higher tax brackets so that all we are really doing is trying to protect them in some small measure.
I also want to reiterate what I said earlier: I think this should be satisfactory to the President — I have been so advised — and that he will accept it. I think it is important to point out again that it does establish the principle of Congress that we will move for a dollar-for-dollar cut in the event we extend the tax next July.
Mr. PASTORE. Vote.
Mr. HELMS. Mr. President, I ask for 30 seconds.
Mr. MANSFIELD. Fair enough.
Mr. HELMS. As I read this resolution, I am reminded of Lewis Carroll's "Through the Looking Glass," and what a gentleman named Humpty Dumpty said: "When I use a word," Humpty Dumpty said in a rather scornful tone, "it means just what I choose it to mean — neither more nor less."
I thank the Chair.
Mr. PASTORE. Vote.
The PRESIDING OFFICER. The question is on agreeing to the amendment. The amendment was agreed to.
Mr. LONG. The question is now on agreeing to the amendment to the amendment, Mr. President.
The PRESIDING OFFICER. The question is on agreeing to the amendment to the amendment.
Mr. LONG. 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. CURTIS. Would the Senator identify what that is about?
Mr. LONG. What we are voting on now is a compromise proposal which suggests that if the tax cut is to be extended, it should be accompanied by a reduction in spending below the level that would otherwise occur. That is the language that we have been discussing.
The voice vote occurred on simply adding to the bill the tax cut that we had previously passed. What we have here now is language expressing the principle that if the tax cut is to be extended beyond July 1, there should be budget restraints to accompany that.
Mr. MOSS. Vote, Mr. President.
The PRESIDING OFFICER. The question is on agreeing to the amendment to the amendment.
The yeas and nays have been ordered, and the clerk will call the roll.