July 2, 1976
Page 22240
FEDERAL BUDGET CONTROL: FISCAL YEAR 1976 RECORD
Mr. MUSKIE. Mr. President, the Congressional Budget Act of 1974 instituted an historic new mechanism for congressional control of the Federal budget. The fundamental purpose of this landmark bill was to provide Congress with a means to both design and carry out a coherent fiscal policy consistent with the Nation's broad economic objectives.
We now have solid evidence that the new budget process is capable of achieving its fundamental goal. For the fiscal year just ended, Congress designed a comprehensive budget plan — to end the recession without triggering a new round of inflation. More importantly, we carried the plan to realization. In so doing Congress exercised a degree of fiscal discipline which in my experience in the Senate is unprecedented.
While the final figures will not become available until late July, the current estimates of the Congressional Budget Office provide a good picture of the likely fiscal year 1976 outcome.
Total Federal outlays during fiscal year 1976 are currently estimated at $372.5 billion. The outlay ceiling adopted in the second concurrent resolution was $374.9 billion.
Total new budget authority, the other measure of Federal spending, is currently estimated at $406.7 billion. The second concurrent resolution ceiling was $408 billion.
With revenues estimated at $301.1 billion, the projected fiscal year 1976 deficit is $71.4 billion. The second concurrent resolution figure was $74.1 billion.
Federal budget control: Fiscal year 1976 record
[Billions]
Second concurrent resolution :
New budget authority $408. 0
Outlays 374.9
Revenues 300.8
Deficit 74.1
Current estimates:
New budget authority 406. 7
Outlays 372. 5
Revenues 301.1
Deficit 71.4
There is some indication that when the final figures become available, the deficit will be even lower than now estimated — possibly around $70 billion or less. It appears likely that both revenues and outlays may be somewhat lower than our current estimates, and that the shortfall in outlays may be somewhat greater than the shortfall in revenues. Hence the possibility of a lower deficit figure.
There is equally strong evidence that Congress achieved the underlying economic goals of its fiscal year 1976 budget.
The fiscal policy strategy set forth in last year's budget resolutions was designed to reduce the Nation's unemployment rate to 7 percent and its inflation rate to 5 percent by the end of the current calendar year. Both these targets now appear to be within reach. Last month the jobless rate stood at 7.3 percent. Consumer prices meanwhile have experienced an annual increase during the past 6 months of 4.6 percent.
It should be remembered as we review these figures that the fiscal and economic policies adopted by Congress last session were substantially different than those initially proposed by the administration.
The President's budget for fiscal year 1976 proposed a $16 billion tax reduction. Congress enacted a tax cut of some $23 billion, much of which was continued through this calendar year.
Congress also rejected administration proposals for raising $35 billion in energy taxes and for decontrolling oil and gas prices. Had Congress not rejected these proposals, inflation would still be near the double digit range and unemployment would not be far behind.
I would like to add that Congress ability to develop and carry through a conscious, and apparently successful, fiscal policy during the past year would have clearly been impossible under the fragmented legislative practices of the past.
The success we mark today would also have been impossible without the demonstrated cooperation of the various committees. While attention in recent months has tended to focus quite rightly on the areas of policy and procedural conflict, these cases have been the exception not the rule. The new budget process has worked because Congress has overwhelmingly supported it.
I believe this is a good sign for Congress — and the country.