September 16, 1976
30674
THE BUDGET PROCESS
Mr. BELLMON. Mr. President, the efforts of Congress to bring about a more responsible approach to Federal spending depend to a considerable extent upon Members of Congress and the public at large having an understanding of both the importance of this effort and the procedures which the Congress has established.
As the ranking minority member of the Budget Committee and as one who has both participated in and witnessed frequent floor debates, I have been greatly impressed by the ability of the chairman of the Budget Committee to discuss the budget process in a clear and persuasive manner. The efforts of Senator MUSKIE to accomplish this educational process include appearances before many groups outside of Government. Recently he appeared before a breakfast of the Washington-based corporation representatives where he again discussed the budget process. His comments show the Senator's unparalleled understanding of this process. His lucid presentation enables members of non-governmental groups to understand what the Congress is doing in our efforts to establish greater Federal fiscal responsibility.
The educational effort which Senator MUSKIE is voluntarily carrying on needs to be undertaken by every Member of the Senate. Following adjournment, we will all have opportunities to appear before groups in our own States. I strongly urge that the budget process become a common topic of our discussions. I believe we would all be helped by the comments of Senator MUSKIE. I ask unanimous consent that his remarks be printed in full in the RECORD.
There being no objection, the statement was ordered to be printed in the RECORD, as follows:
THE BUDGET PROCESS
(By U.S. Senator EDMUND S. MUSKIE)
Today, I would like to discuss with you the budget process established by the Congressional Budget Act of 1974 and the Sunset Bill, a euphemism for zero base budgeting. The word "sunset", incidentally, was invented out in Colorado. The State Legislature enacted something similar to what we're talking about in Congress today.
I've been told and I have read that under the new budget process the Senate Budget Committee has become a powerful committee. Actually, the Budget Committee has little power, unless it has proven to be and continues to be an effective way of focusing the attention of the Congress upon the consequences of its spending decisions.
I have no whip that I can use on recalcitrant Senators. I have no goodies to hand out to any of them, a different situation than most committees.
The Budget Committee can offer only restraint, if it is to measure up to its responsibilities. So that if we have power it's not because we have anything to give or to withhold from members in the tradition of other Senate committees.
I'm delighted that the new budget process itself is working. But, if it is working, then it's working because the Senate and the House are exposed to the consequences of their spending decisions.
Now this isn't to say that the Budget Committee has nothing to do with the success of the process. Our challenge is to present the case, to present the issues, to raise the red flag, to keep the Senate and the House on continuous notice, and to work with committees, because the whole object of the process is to avoid confrontations in committee or on the Senate floor.
And so as legislation moves along — from the time that it's first introduced — we must follow and monitor it, identify its budgetary consequences, and alert the committees involved to the budgetary dangers that may be down the road.
Now this is done not only for the purpose of restraining overall spending, although that's important. It's also for the purpose of ensuring that the Congress really is in a position to exercise its own sense of what the appropriate priorities for the country ought to be at a given time. And thirdly, it's done for the purpose of enabling the Congress, in all of its actions, to become part of the economic policy making institution here in Washington.
Now we may disagree over what values public policy should protect or enhance and what directions we ought to take. But I think it's useful to all of us if we have a rational, effective system for focusing on the choices, focusing on the consequences, and focusing positively on what we can do together. Now it's a lot more difficult, of course, for the legislative body than it is for the executive branch to reach the final decision on what total spending should be, on what the priorities ought to be, and on what the economic policy ought to be. We have to meld the viewpoints of 535 men and women from diverse circumstances, and under varying pressures from the constituents they serve, and that's difficult.
But the magic of the process up to now is that apparently it has worked reasonably well. Not with precision. We're not working with a very clearly focused lens, but at least we can see the picture, even if at times it's a little bit out of focus.
How does the new process work? Well, first of all, of course, budget making has become a 12-month process. Until this system was established, the process began when the President's budget was sent up in January and theoretically should have been concluded by the following July 1. But because the time frame was too tight and because there was no opportunity for the Congress to work on the budget before the President sent up his request, it was an inefficient, imperfect, inadequate kind of system.
So the first thing we had to do was stretch out the time. We did that in these ways: First, we imposed an obligation on the President to send up a current services budget in November, which gave us about three months additional time to work on the basic budget.
Secondly, we advanced the fiscal year from July 1 to October 1. That gave us three more months in the legislative year itself. And then finally, we divided the legislative year into two parts. Prior to May 15 authorizing legislation is developed and required to be reported. This gives us from May 15 to October 1 to work on appropriations and spending decisions.
I'm talking about committee work now, because obviously on the floor the two periods are going to overlap as they are this year. But increasingly we'll see the legislative year divided into an authorizing period and an appropriations period. As a matter of fact, Mike Mansfield refers to it in that way now.
It is interesting to hear from longtime staff people how much more satisfying it is to see legislation moving in an orderly way, in accordance with some kind of scheme and some kind of system.
On the substantive side, the first Budget Resolution simply sets targets. It must be completed by May 15. It's based on a number of inputs: The President's budget; the Congressional Budget Office's analysis of the President's budget; the CBO's economic forecast; inputs from all of the Senate Committees, including the Joint Economic Committee and the Appropriations Committee; and by March 15, hearings of the Budget Committee on aspects of the budget we think need to be particularly dealt with.
Incidentally, may I say that having the current services budget in November followed by the President's complete budget in January has the advantage of identifying the major policy decisions with which the Congress is likely to be confronted, so that we can focus our hearings on these or any other areas that we think are going to be of high priority when the Budget Resolution gets to the floor of the Senate or the House.
About April 15, we begin the markup of the Budget Resolution for the purpose of setting these targets: total revenues and overall spending for all of the 17 functions of the budget, which range from defense to interest on the national debt.
The Budget Act requires that the revenue estimates in the Budget Resolution be accompanied by a presentation of the Budget Committee's allocation of those revenues from the various sources, including tax expenditures. It is that policy and whether or not it is binding in any way upon the Congress that is the subject of debate. And as long as the Chairman of the Finance Committee disagrees with the Chairman of the Budget Committee on this issue I suppose it will take time before the Congress finally resolves the question.
But I'd like to emphasize what I hope has come through from what I've said up to this point, that the budget process is more than bookkeeping, it's more than simply a numbers game. It is an economic tool as well as a budgetary tool; and it's a priorities tool as well as a spending tool. So unless it fulfills all three of these functions well, I doubt that it will survive. Because when you talk about the numbers in the budget simply in terms of the need for restraint, you're going to frustrate too many people who are also concerned about priorities and concerned about economic policy, and if the budget doesn't do the other two things, it's not alive, it's not meaningful. It is simply, you know, old grandma off in the corner complaining about spending too much. It is important to understand that the budget process is not a set of books, it's a process.
When the Congress finally approves the first Budget Resolution it has adopted targets on spending and revenues and the national debt. Now getting an agreement between the two Houses, or within each House, on these things is quite an achievement. On the House side, for example, both the conservatives and the liberals have voted against the Budget Resolution — conservatives because it spends too much, the liberals because it doesn't spend enough. As a consequence, I think it was last year, the Budget Resolution passed by one vote. If we hadn't gotten that one vote, you know, we might be talking about history this morning instead of a process that's alive.
And so you've got to accommodate these widely varied points of view in this budget. Now what were the results of the first year? We did better than hit our targets. But I wouldn't crow too much over this until we know precisely why it happened.
The final deficit of $65 to $66 billion is almost $8 billion under the Congressional target, which ended up last October at about $74 billion. The President's target was not much different.
The second Budget Resolution last October set the final deficit number at $74 billion and it will end up at between $65 and $66 billion. When you recall that a year ago last spring Secretary Simon was predicting the Congress would end up with a deficit of $100 billion, that's not a bad result.
One final thing about the budget process. Between the first Congressional Budget Resolution and the second one, the spending bills go through. And incidentally, this year as a result of the budget process, for the first time in my memory, and probably within the memory of anybody in this room, we are going to finish appropriations bills before the beginning of a fiscal year.
Now that doesn't mean that there conceivably won't be some supplementals after October 1. It's a little difficult to get the spending machine under that much control. But ideally, eventually we hope that the appropriations bills as passed will be adequate to fund the activities and programs of the government, short of emergencies that are unanticipatable.
This year we've gone a long way toward that goal, and I don't think anybody could remember or could conceive of not operating under a continuing resolution or a series of them. So that, I think, is an achievement.
Now the second Budget Resolution in September is designed to reconcile the first one with the accumulation of spending and revenue decisions that will have been made in the interim by the Congress. The first resolution does not impose handcuffs on the Congress and its targets are just targets. But it is our job to ensure that if they are breached, it happens only with the full awareness of each body.
And it's this awareness that has enabled us to win the major fights on the floor over how much is spent for certain purposes. And so the power comes from within the Senate.
But in preparing the second resolution, once we've reconciled those spending decisions, it might mean cutting back some program where we've voted to spend more, or it might mean shifting priorities, or it might mean adding to the deficit, or it might mean requiring the Finance Committee to report additional revenue raising measures.
All these options are available. But when they are finally resolved in the second Budget Resolution, that's when the budget process begins to bite, because those targets then are fixed and it is the job of the Budget Committee, and each member of the Senate, to police them. After the second concurrent resolution any member of the Senate can raise a point of order with respect to any bill that he or she thinks is likely to breach the targets, and it would take a majority of the house involved to overcome that point of order.
Never in the history of the country has the Congress been willing to subject itself to this kind of discipline on spending. We haven't had to use it once this year, because we've stayed under our targets.
I've spoken out to the Senate on every spending bill that has come before the Senate and raised red flags — I forget how many times I spoke last year. I think it was 70 to 75 times on this question of the budget and whether we were getting too close, whether we should support this or that. And it has worked.
Now if the public mood changes about spending, the Congressional mood may also change. But I hope by that time we will have the institution so solidly in place that it will survive that kind of public indifference, if it should come.
Now for the Sunset legislation. The Budget Act gives us control over the whole picture but no effective control over the parts. There are two most disturbing things about the budget. One is the proliferation of programs which from a management point of view become increasingly difficult to monitor.
The other frustration is the fact that a larger and larger proportion of the budget becomes uncontrollable. Now about 77 percent of the total budget is uncontrollable — uncontrollable in the sense it would take legislation in order to bring it under control, and that's not easy to do.
So I concluded after a year that we had to find a way to control the parts, and that's what Sunset legislation is. It uses two tools: One, it would require the termination of every program on a five-year cycle. That means every program, except interest on the national debit and contributory systems like Social Security and pensions to which people have made contributions in anticipation of future benefits.
But every other program of the government would be terminated on schedule in five years. The second tool is that before a program could be reauthorized for spending purposes it must be subjected to a zero base review justifying, not simply an increase in spending, but justifying all of its spending in terms of its fundamental premises.
Now that's the proposition. The bill itself, of course, is more complicated and difficult than that because it's an enormous task to undertake. As a matter of fact, most of the witnesses who have appeared before us, including such people as Roy Ash and Charlie Schultz, have been exposed to the budget process for many years. They predicted that we were taking on too much and that the result might be a casual kind of review that wouldn't really be effective. And so most of the bill is directed at trying to get a handle on the workload so that it does not carry the process, if we finally institute it, down to nothing.
But that's the objective, and it has stimulated just amazing response in the Congress. I have over 50 cosponsors. Yesterday the Government Operations Committee reported it out unanimously with the support of Senators such as Senator Javits, Senator Percy, Senator Brock, Senator Roth, the whole spectrum, and they were all there. It's difficult to get a quorum in a committee at this stage of the session. But they were all there for two mornings so that we could work on the bill and report it out. So the bill's been reported out. It will have to go to the Rules Committee because it involves some changes in the Senate rules. There's a Title V to it which would subject tax expenditures to the same kind of discipline, and that could be an anchor on its legislative process. But I'm hoping we'll find a way to resolve that, because I'd like to get this bill passed and enacted by Congress before we recess about October 2.
That's a tall order. But we've acquired so much momentum behind it up to now that I think we've got a reasonable possibility of doing that.
Well, those are the two, my two most recent legislative initiatives. Were it not for these, I doubt that I'd be running for reelection, because all the rest of it is getting to be sort of old hat. But improving the fiscal environment is something that I take it the National Chamber approves.
Question from the floor: It seems to me that the budget proposal of an Executive agency should be kept within the Administration until it becomes an Administration position. What are your views?
Senator MUSKIE. Well, I don't see why it should. After all, the Executive has access to all of the reports that the Senate committees send to the Budget Committee, and they made political hay of it. For instance, this year the cumulative requests of Senate committees were $28 billion in excess of what we finally approved. Nobody took issue with the fact that the difference of $28 billion represented insensitivity to the part the Budget Committee plays. But we ourselves made that information public so that people would know what choices we made.
The whole objective is to let the Congress and the public also know what choices the President makes when he evaluates agency requests and cuts them back. It seems to me that is a way to establish a firmer base for the President's budget than otherwise. We all know he has to make choices. We all know he has to say "no"to somebody. That he may say "yes" to some people who ought to get a "no." We have to do the same thing. I think that the success of the budget process in the Congress is dependent upon its openness. We never have a closed meeting. Every discussion, every decision and every vote is made with the press in the room. So if we can survive this process in the chaos that some people see the Congress as, it seems that the President can.
The question is controversial. The Administration argues that it ought to be free to make its decisions in confidence, that if this information is released the President would be subject then to the pressures of all the lobbyists whose interests are involved in the recommendations of the agencies. Well, nobody knows the pressures of the lobbies better than me.
But has it done any harm, really? It's a good way to stiffen your backbone.