March 30, 1976
Page 8664
Mr. MUSKIE. Mr. President, I make this statement on the budget implications of the pending measure.
Mr. President, H.R. 9721 would accomplish two purposes: It would authorize continued U.S. participation in the Inter-American Development Bank and initial U.S. participation in the African Development Fund. Both of these organizations are part of a network of international financial institutions that provide the United States and other industrialized nations a means to participate in the economic development of the poor countries.
The Inter-American Bank supports a broad range of development throughout Latin America. Its conventional loans, largely obtained through borrowing in private financial markets, fund income-generating projects in the agricultural sectors. Concessional loans to the poorest countries finance social and economic infrastructure programs, such as rural development, education, housing, and technical assistance. The bank encourages integration projects which benefit more than one member country.
This bill would authorize a total U.S. participation of $2.25 billion in the fourth replenishment of the resources of the Inter-American Development Bank over the 4-year period fiscal year 1976 through fiscal year 1979. Of this amount, a total of $1.32 billion is expected to be appropriated.
Some $720 million of appropriated funds would be paid in and would eventually result in outlays, while $600 million would be appropriated for ordinary callable capital which under normal operations should not result in outlays since these funds are designed to provide backing for the bank's borrowing in the private capital markets.
The remaining $930 million is for new callable capital that is separate from the bank's ordinary callable capital. This separate callable capital subscription, which includes European and Japanese contributions, would be backed, on the basis of this authorization, by the full faith and credit of the United States, but no appropriations request for this amount is anticipated unless an unprecedented default occurs.
The bill would also authorize an initial U.S. contribution of $25 million to the African development fund in fiscal years 1976, 1977, and 1978, which would be paid in and thus result in outlays.
In fiscal year 1976 — the first year covered by this bill — budget authority of $240 million for the Inter-American Bank contribution and budget authority of $25 million for the African Development Fund contribution are expected to be appropriated. The Inter-American Bank funds spend slowly and outlays this year are estimated to be only $2 million. The African Development Fund appropriation would be spent over a 3-year period, with fiscal year 1976 outlays of $9 million.
Leaving aside the callable capital portions which are not likely to cause outlays, this bill involves a $745 million commitment of U.S. resources over the next several years, even though the fiscal 1976 outlay amounts are small. While the Appropriations Committees have stressed that the levels authorized do not bind future Congresses as to appropriation levels — and while the Appropriations Committees have in recent years cut or stretched out the appropriations under authorizations such as this — I would point out that tremendous pressure is put on the Congress to fund fully thesecommitments which have been negotiated unilaterally by the executive branch without congressional involvement.
We should therefore recognize that if Congress declines to appropriate fully the administration's requests for this bill this year, the unfunded remainders will likely appear again as budget requests in following years. And the outlays resulting from these appropriations — particularly in the case of the Inter-American Development Bank — normally extend for several years beyond the formal replenishment period. Thus passage of this bill represents a significant commitment of Federal funds over a considerable period of time.
I want to turn now to the condition of the overall fiscal year 1976 budget. During consideration of the recent foreign assistance appropriation bill, I said the second budget resolution ceilings adopted by Congress last December may be exceeded by $4.9 billion in budget authority and $300 million in outlays if all the additional legislation that may materialize during the remainder of the fiscal year were enacted and fully funded. Major pieces of legislation still to be considered are:
District of Columbia appropriations.
Supplemental requirements for programs already authorized.
Energy, health, and veterans' legislation.
Public service jobs, summer youth, and other legislation in the education, manpower, and social services area.
Public works and antirecession assistance requirements, all of these programs, as well as the one presently under consideration, were assumed in the second concurrent budget resolution.
There are, however, two factors which contribute to the pace at which we are approaching the ceiling of the second resolution. First, the assistance to New York City was not assumed in the second resolution because that matter was not settled at that time. Since then, spending legislation amounting to $2.3 billion in budget authority has been enacted by Congress to aid New York. Second, our problem is compounded by the fact that the administration had inadequately estimated the cost of existing programs, and therefore we are faced with increases in budget authority beyond our control.
I expect, within the next few days, Mr. President, to be able to give the Senate an up to date, current figure on the reestimates, which are always a part of the budget process at this point. There has not been excessive spending on the part of Congress.
The budget authority and outlays contemplated in the Inter-American Development Bank authorization bill are consistent with the second resolution. Nevertheless, we must keep in mind that if we vote in favor of the bill, some other priority item may be crowded out later unless we are willing to increase the ceiling on budget authority.
I plan to vote for this bill because it represents a continuation of a major 15-year-old U.S. commitment to the well-being of this hemisphere. This commitment cannot be taken lightly. I support the bill, however, with the knowledge that the multi-year appropriation requirements for these programs will have to be considered in light of total budget priorities and availabilities as determined by existing and future budget resolutions.