June 20, 1975
Page 20143
Mr. MUSKIE. Mr. President, I want to make the point, first of all, in respect to the legislation which is pending on unemployment comp, the cost is under the budget figure.
The budget figure is $18.2 billion and the bill as it stands without the Long amendment is $16.7 billion.
There will, of course, continue to be pressures which we cannot predict upward depending upon what happens to unemployment, but at this point, there is a billion-dollar slack with respect to the Long amendment that, of course, was not contemplated by the budget, and by the Senator's own estimate, the cost is $550 million.
I have a rough estimate from the Budget Committee staff of the offsetting increases in taxes and reduction, in unemployment compensation. They estimate roughly, and this is a rough estimate without an opportunity really to get a comprehensive estimate. The estimate is that one-half of that $550 million would be returned to the Treasury in increased taxes and reduced unemployment compensation benefits.
So there is some logic to attaching this to an unemployment compensation bill as an alternative to unemployment compensation benefits.
Jobs, of course, are always better than that sort of treatment, but I think the Senate ought to understand that this is outside the budget, unless Senators persuade themselves that it relates to the unemployment compensation problem and that they can support it on the basis that the bill, as a whole, is at least a billion dollars under the budget resolution.
I thought the Senate ought to have that information for whatever use we care to make of it.
On the merits, may I say that I agree, this is most attractive. This has proven to be an attractive stimulus to the homebuilding industry and the economic statistics thus far indicate that it has had a positive, measurable, and important effect. That ought not to be ignored.
The second point I would make is that time is a factor, and the Senators are offered another at this point, that is, if we want to extend it another 3 months, we almost have to act on it now. If we act on it a month or 2 from now, we have to consider whether or not to extend it for a month or 2.
So I think there is some logic for presenting it for decision now.
In any case, I felt I had the responsibility of bringing the budget impact to the attention of the Senators, and there are several Senators here who are very interested.
Mr. LONG. I point out at this point that I have here the June 20 letter from Mr. Storey to Senator
MUSKIE indicating that for unemployment compensation programs the latest estimate is $1.8 billion below the previous estimates.
So in that area, which we are legislating with regard to in this bill, there has been a large reduction in the unemployment insurance estimates as of June 20.
Mr. MUSKIE. The relevant number bearing upon the congressional budget is $1.5 billion. The $1.8 billion has to do with the President's budget estimate earlier this year. The $1.5 billion figure is the figure. However, I plan to vote against the amendment, which was not considered in the budget resolution. The possibility of lower unemployment outlays may not materialize as these estimates are still quite tentative.
The PRESIDING OFFICER. The Senator's additional time has expired.
Mr. MUSKIE. May I ask unanimous consent that a statement and the memorandum to which Senator LONG has referred, be printed in the RECORD at this point?
There being no objection, the material was ordered to be printed in the RECORD, as follows:
BUDGET COMMITTEE POSITION ON H.R. 6900
The Senate Budget Committee, in its consideration of the resolution on FY 1976 spending, assumed that the temporary emergency extensions of unemployment compensation coverage and benefit duration would be renewed by Congress and would be in operation through the coming fiscal year. Thus, the income security outlay target level of $125.3 billion was set with the idea in mind that a bill such a H.R. 6900, extending these temporary unemployment benefits, would be enacted.
The outlay estimates for both current law unemployment benefits and for this legislation have been revised downward recently by OMB. We are dealing with the highest level of unemployment we have faced in many years, and in the case of the temporary provisions, with programs having little prior experience to base judgments on, so earlier estimates have been changed considerably by OMB and may have to be revised again as more information becomes available.
However, using the latest estimates, the cost of this legislation is well within the outlay target set by H. Con. Res. 218.
BUDGET ESTIMATES FOR UNEMPLOYMENT COMPENSATION
The President's Estimates.
In the February budget, the President estimated FY 1976 outlays for all unemployment compensation programs would total $18.2 billion. OMB's June 1 budget estimates revised this figure downward to $16.4 billion. The components of these estimates, and OMB's rationale for their revisions, are as follows:
[Table omitted]
As the above table indicates, OMB's downward revision of outlays by $1.8 billion was the result of overestimating outlays in those programs where there was little or no prior operating experience. The President's new deficit estimate of $59.9 billion would be $62.7 billion in the absence of this $1.8 billion revision.
Secretary Dunlop's Testimony.
On June 10, 1975, Labor Secretary Dunlop told the Finance Committee that annual unemployment outlays would reach $19 billion. There are two reasons why his estimate was so high. First, the $19 billion figure applies to calendar year 1975 rather than fiscal year 1976. Average unemployment over CY 1975 will be higher than for FY 1976.
The second reason for the discrepancy is that the Department staff preparing Dunlop's testimony were not aware of OMB's reestimating, which was going on at the same time. A failure in OMB clearance of the testimony resulted in an unofficial estimate being used before the Finance Committee.
The H. Con. Res. 218 Estimate.
Unemployment compensation outlays were estimated at $18.2 billion in H. Con. Res. 218, coincidentally the same as the President's February estimate. This congressional target resulted from a compromise between a higher Senate and a lower House figure. The House had assumed a more stimulative budget and had anticipated OMB's downward reestimates. The Senate had assumed higher unemployment, benefit extensions such as are pending in H.R. 6900, and no downward reestimates.
H.R. 6900 and the Budget Resolution.
Based on the estimates presented in the Finance Committee report, enactment of H.R. 6900 would not raise outlays above the resolution level of $18.2 billion. The Administration's new figure of $16.4 billion would rise to $17.2 billion if the House-passed version were enacted. The Senate Committee version would leave outlays at $16.7 billion. Given the tentative nature of all unemployment estimates at this time, a surplus in the resolution of $1-plus billion may well dissolve by the time the Committee could propose a second budget resolution.
Mr. LONG. I yield myself 2 minutes, Mr. President. Mr. President, permit me to say one thing: It will be good news for the Senate to learn that as far as this bill is concerned, even if the bill is agreed to, it will still be $500 million below the budget estimate.
Mr. MUSKIE. It will be $750 million less
Mr. LONG. It will still be $750 million below the budget estimate. Furthermore, Mr. President, in terms of raising more money to reduce the deficit, I have not been very successful. I just finished voting – and encouraging the Senator from Maine to vote against a motion – to table where we hoped to pick up $100 million, where his committee and mine estimated we were going to make a little money. But, of course, this along with other things are things that we should be thinking about in case we decide to do this.
Mr. President, I would point out that this is an area where I believe there is a greater degree of efficiency than any other. I challenge anyone to show me an area where dollar for dollar we will get as many jobs to put people back to work than we will in this area where we encourage people to buy new homes.
I would like to ask for the yeas and nays, Mr. President;