February 4, 1976
Page 2284
Mr. MUSKIE. Mr. President, will the Senator yield?
Mr. DOLE. I yield 5 minutes to the Senator from Maine.
Mr. MUSKIE. Mr. President, this will be the first roll call vote in the Senate on this legislation.
The Senate version of the legislation passed September 29, 1975, as a calendar item, on a voice vote. The conference report passed by a voice vote on December 18, 1975.
The purpose of the legislation is to increase the level of Federal payments to milk producers by changing the frequency of adjustments in the support price for milk and the support price itself. The President has vetoed the legislation as being too costly. The question before the Senate is whether to sustain or override the veto.
I have supported the Senate version of this legislation which provides for quarterly adjustments in the support price for milk. I have supported that provision because I believe that our dairy farmers need all the help that the Federal Government can afford to give them. We must assure a level of farm income which is adequate to maintain our dairy farmers and our milk production capacity. The more than 1,200 dairy farmers in my own State know of my concern that the level of price supports not fall below a reasonable level.
Unfortunately, the measure before the Senate. which the President has vetoed, is not the measure we passed in September. It is, instead, the significantly more expensive House version of the legislation which the conferees agreed to and sent to the President after a voice vote in the Senate on December 18,1975. The Congressional Budget Office cost estimate of the difference between the two bills shows that the bill before us will be twice as expensive as the legislation the Senate passed. In this fiscal year alone and the transition quarter, which runs from July to October, the legislation before us will cost $72 million more than the bill we passed in September. It will cost over $200 million more during the next 2½ years. I ask unanimous consent that a table containing the Congressional Budget Office estimates be printed in the RECORD at the conclusion of my remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibit 1.)
[Table omitted]
Mr. MUSKIE. Mr. President, there is no room in the congressional Budget for the House version of this legislation which is before us. In adopting the second concurrent resolution on the budget on December 12, 1975, Congress provided what we then estimated to be an appropriate allocation of Federal spending to the agriculture function. It did not include any provision for this House version of this legislation. Furthermore, shortly after the adoption of the congressional budget resolution, the Agriculture Department revised upward by $283 million its estimate of the uncontrollable spending for farm price supports already provided in existing law. This reestimate caused the agriculture budget total in the second resolution to be exceeded by more than 11 percent. The joint resolution the President has vetoed would add another $43 million more than the Senate bill to this coverage in this fiscal year alone, and another $72 million by the beginning of the next fiscal year.
It is on this basis that I will vote today to sustain the President's veto. I must recommend that Senators vote likewise.
The congressional budget ceilings which are now binding on all spending legislation for the remainder of this fiscal year provide for a carefully planned program of congressional spending adequate to meet the known demands for additional appropriations and essential spending for the remainder of the year. There is no room within those ceilings for new programs like the House increase in the parity price support level contained in this bill. If the House version becomes law, some other planned-for program will have to be excluded from appropriation this year. It is as simple and painful as that. It is on this basis that I am forced, as chairman of the Budget Committee and as a Senator who believes we must adhere to the budget we have adopted, to vote to sustain the President's veto. I do not find this pleasant to do. I would much prefer to be able to say "Yes" to my 1,200 dairy -farmers, if they all should agree on the House version of the bill.
But if I were to blink when an interest in my own State suggested that that would be politically wise, then I think we would begin blinking at the concurrent resolution ceilings, to the destruction of the process.
I recognize that farmers need all the help that they can get. I wish there were some way to accommodate all these needs within the constraints we must face if we are to hold the deficit to the $74 billion contemplated in the budget.
In my judgment, there is an alternative approach. I think we should go back to the original Senate bill which provides for quarterly adjustments of milk price supports. The reading that I get from Maine dairy producers is that they are most concerned about quarterly adjustments of price support levels and that imports of dairy products be stringently controlled.
I shall, therefore, vote to sustain the veto of this measure and shall support what I deem to be a reasonable compromise — the passage of the original Senate version of Senate Joint Resolution 121, which provided for quarterly adjustments of milk price supports.
Mr. President may I add to my above statement a confirmation of what the distinguished Senator from Kansas said about decisions that Secretary Butz has promised to make if the veto is sustained.
I talked to Secretary Butz this morning, at his invitation, and he confirmed that as of April 1, he will order the parity price for milk to be raised to 80 percent.
He promised me, in addition, that there would be quarterly review of price supports for dairy products, in accordance with the Senate version of the measure.
I was delighted to get from him this call, which was unsolicited on my part, and delighted to have him demonstrate the flexibility to move in the direction in which he has indicated he will move.
Mr. HUMPHREY. I yield myself 10 minutes.
Mr. President, I have just heard about the flexibility of the Secretary of Agriculture. He had flexibility because we used a crowbar on him. He did not come around and give us quarterly adjustments at 80 percent. I introduced that legislation and in the testimony, he was not sure that he could support it. He is for 80 percent of. parity now, with quarterly adjustments, because he knows that we can carry such legislation; that is why. There is no great compassion here for the dairy farmer.
Second, I remind the Senate that last year, when we had the emergency farm bill before the Senate, the Secretary came here and said, "It is going to cost you over a billion dollars." Again, he was dead wrong.
Mr. President, those cost estimates scared everybody around here, particularly people who do not know anything about agriculture.
Now they come up again with these figures. Let me say what those figures show.
First of all, they show no purchases by the Government for domestic food programs. The dairy price support permits the Government to buy cheese and powdered milk and other dairy products at low prices for our feeding programs. Now, we are going to buy for those feeding programs. The Senate is not going to turn down the feeding programs. I do not think very many people here are going to turn down the school lunch program or the commodity programs. If they are, I want them to stand up and tell the folks that they do not believe we ought to feed kids. That all has to come out of this money.
Here is what we have. The USDA estimates that for April 1976 to March 1977, which is a so- called production or marketing year, the cost will be $180 million under this resolution. It estimates that from April 1977 to March 1978, it will cost $350 million. That is a total of $530 million; that is their estimate.
The truth is that if we take a look at that estimate, using their own figures, the amount for U.S. Government domestic purchase for our feeding programs, we come closer to our estimate of $72 million for the 2 years.
Furthermore, the Department of Agriculture envisioned the worst possible set of circumstances. Let me give an example. On production and on consumption — that is the way they base their cost estimates — at 85 percent of parity, the USDA estimates that in 1976, production will be 117,500,000,000 pounds; for 1977, 119,100,000,000 pounds.
What do the dairy producers themselves, the National Milk Producers Federation, estimate? They know more about dairy cows, than some of the people in the Department of Agriculture, who have been misleading the Senate and the Congress for years. And they have been misleading us on their facts. The National Milk Producers Federation estimates production of 116 billion pounds for 1976 and 117 billion pounds for 1977. In other words, a difference of over 3 billion pounds. If we add in those 3 billion pounds, of course, they can make it look like it’s going to cost more.
The Department of Agriculture underestimates consumption also. In 1976, they estimate consumption at 111 billion pounds. The National Milk Producers Federation estimates it at 115 billion pounds, about the same as 1975.
In 1977, the Department of Agriculture estimates consumption at 111 billion pounds, while the National Milk Producers Federation expects consumption of 115 billion pounds. If we take lower consumption and higher production figures, we get the worst possible scenario. That is what the Department of Agriculture has given to us.
My point is that if they had been right at other times, I would buy their figures But they have been wrong, and the Senate knows they have been wrong. We know the estimates have been wrong. And when we have been fooled once, twice, and three times, why do we not listen?
Sure, the Department of Agriculture could come up here with figures like this, just exactly as the Office of Management and Budget came up a year ago and told us we were going to get $8 billion worth of revenue out of offshore oil. Have we got a billion dollars?
Their estimates are cockeyed, and I can say that the National Milk Producers Federation has given Congress more reasonable figures than the Department of Agriculture.
I remember only a little over a year ago, when they told us what it would cost to have a farm bill. That is why this Senator is not going to listen to their arguments.
I know that Mr. Butz has suddenly got religion. Oh, he is for quarterly adjustments now. But when we tried to get quarterly adjustments before, he fought it. He just fought it and fought it. It was the consummate sin.
We need to remember, my fellow Senators, that the Secretary of Agriculture had to have a court suit, that was filed in my State, to bring him to even 80 percent of parity once a year. What a reluctant dragon that fellow is.
Now, he is going to be very nice to the dairy farmers. He has a couple of Senators convinced now that we are going to get 80 percent of parity and have a quarterly adjustment. I think we will, because we backed him to the wall. But we had to take him to court and get a court order to get him to come to 80 percent of parity, when the law was set at 80 percent of parity. We also had to get a court order to get him to release funds for the women's, children's, and infants' program — the WIC program. He fought that for a year and refused to spend the money.
I do not trust him. I say the Department figures being presented here are not factual. They are not fair. They are not right. My evidence is based upon the practice of the past. We have had a lot of slippery practices around here. We got an embargo put on our wheat, in spite of the Export Control Act.
Mr. DOLE. That was a Meany embargo.
Mr. HUMPHREY. Never mind about Meany, he is not in the Government. He did not get elected. The President of the United States, Secretary Butz, and Secretary Kissinger, worked a fast end run, trimming the figures again, because the law said you could not put an embargo unless there was a certification of shortage. There was no shortage when we had 2.1 billion bushels of wheat.
Now they come up here with these phony figures again. Well, they are going to fool some of the people some of the time, but they are not going to fool HUBERT HUMPHREY all the time. I have not been fooled by them yet. I know what they are talking about when they talk about these farm matters.
What else do they say? They say if we have 85 percent of parity, it is going to raise the cost. We have 94 percent of parity right now. What they are really telling us is that they expect the price to go way down. I want to remind the Senators that if the price goes down, the supermarket price will not go down very much. The only fellow who gets hurt is the producer. The present market price is 94 percent of parity, and there is no cost to the taxpayer in terms of the Department of Agriculture budget. But the taxpayer and the consumer are one and the same. When those butter prices go up through lack of supply, that means that the consumer and the taxpayer are paying more.
I should hope that this 85 percent of parity might give an assurance of supply. But I want to say, we can pass 85 percent of parity here in January and we are going to have a tough time getting a cow between now and May that can produce milk. It just does not happen.
Even Secretary Butz cannot make a cow produce that quickly. He has cows and hogs mixed up. You can get pigs fattened up in 6 months, but not a dairy cow.
I do not know: what kind of Agriculture Department do we have? What makes anybody think that we are going to increase production on the same number of cattle between now and May or June? We just cannot get little calves and make them into cows overnight. Only God can do that, and he has not seen fit to try it yet. The Department cannot.
I want to say one other thing. There was mention here today that outlays in the budget are $300 million over receipts.
Why? Not because of farm supports, but because of disasters that the law requires that we pay for, and because of food stamps that are in the Department of Agriculture, which do not relate to the farmers. We have not had any price supports on wheat or corn or soybeans or grain sorghum or flax or oats.
What is all this nonsense about the farmer getting a big deal? I think we should have amended the railroad bill around here a while ago. How much was that? We were giving the railroads a subsidy for $1 billion or more to take us over a rocky road that will not even get you where you want to go.
COMPARISON OF COST ESTIMATES FOR SENATE JOINT RESOLUTION 121
In the President's veto message, a cost impact estimate was made of $530 million for marketing years 1975-77 and 1977-78. These years would run from April 1976 to March 31, 1977 and April 1, 1977 until March 31, 1978.
They also charge that it would result in an additional cost to consumers of $1.38 billion.
There is good reason to doubt the accuracy of these estimates. In the case of H.R. 4296, we received three official estimates from the Department of Agriculture. None of these proved to be accurate.
However, under independent analyses and subsequent questioning, each of the subsequent estimates resulted in a lower projected cost figure than the previous estimate — both on cost to the Government and on consumer price impacts.
With the multiplicity of numbers and time periods being batted around, I think it is imperative to get a few basic points clear in our minds.
First, the established support price would be beneath current market levels and therefore would not result in higher costs to consumers.
Second, there is little evidence to support the idea that reasonable farm prices would prevent downward price adjustments because virtually no retail price adjustments have been evident in spite of sharp price declines at the farm levels for milk as well as most other farm products.
Third, we need to consider the impact in relation to the current level of our program and the benefits of that program beyond price support. Principally, the fact is that these stocks of dairy products that the Government acquires are used in our food distribution programs both at home and abroad.
The result of purchasing at peak supply periods under this legislation assures the Government of low cost acquisition of these food stocks for the distribution programs.
In addition, these food stocks represent an important reserve that can be called upon in the event of national emergency, or if some natural disaster should disrupt production in a major agricultural dairy producing area.
The $1.38 billion consumer price impact that has been much bandied around is a rather mysterious number.
How could it cost them more when the support price is below the market price?
An interesting aspect of the consumer price response is the fact that we have seen increases of two to four times what the administration is predicting for manufactured dairy products in the year in which we have endured their veto policies.
Finally, I am increasingly concerned about the potential problem of over-zealous attention to the dollars and cents but general lack of attention to the more sensible concept of what programs will do to benefit the people of this land.
I'm especially bothered by the Congressional Budget Office's estimates of costs.They did not make an independent assessment of the costs, instead they accepted at face value only the Department of Agriculture's and the administration's estimate and then shuffled the amounts to fit into the fiscal year framework. I don't think this offers much of a contribution.
However, the dairy industry did make an independent assessment, and I think a fair assessment.
They established a potential outlay of $290.9 million in marketing years 76-77 and a $307.2 million outlay in the 77-78 marketing year. The significant difference is that this assessment considers the use of these products in our food distribution programs and considers what the current program would cost.
In taking out these factors, the actual increase in Government outlays would be in the neighborhood of $27.9 million in 1976-77 and $44.2 million in the 1977-78 marketing year.
Regardless of what set of assumptions are taken in regard to costs, the benefits would far outweigh these costs.
The benefits are these:
Expanded production that would provide consumers with the continuous and adequate supplies of milk products that they need and want.
Income stability for our producers and therefore a slowing in the liquidation of herds and of herdsmen.
And, finally, we would be able to achieve a rebuilding of our stocks that have been depleted by the misguided programs of the administration.
That policy of refusing farmers reasonable income security and exacerbating the problem by encouraging and permitting untimely and market-disrupting imports of dairy products is a policy that has seriously injured our consumers, especially the poor.
I will save my extra minute.
Mr. BELLMON Mr. President, will the Senator yield me 2 minutes?
Mr. DOLE. Yes.
Mr. BELLMON. Mr. President, as I said earlier I believe it is an extremely, dangerous thing for any producer when the Government begins to hold substantial stocks in any commodity. I know how bad it hurt the grain business and the wheat business when the Secretary of Agriculture had at his disposal hundreds of millions of bushels of grain which were used to hold down the market.
I know how rapidly the stocks of dried milk which the Government has owned went up. In 1973 the Government was almost out of the dried milk business, their total stock was 78,000 pounds. In 1974 they went up to 150 million pounds,and in 1975 they reached a level of 421 million pounds. Under this parity, if it were to go up to 85 percent, it is very likely that figure would go even higher.
So I would contend again that in the interests of the dairy industry in this country we should not allow these stocks to continue to rise. This is the reason why I believe the veto should be sustained.
Mr. DOLE addressed the Chair.
The PRESIDING OFFICER. The Senator from Kansas is recognized.
Mr. DOLE. Mr. President, I have always listened with interest to the Senator from Minnesota. I do not disagree with everything he said although maybe a certain percentage of it and not based on parity. But I would remind the Senator from Minnesota that on September29, 1975 — and I think it was a bill we sponsored together — we came to the Senate floor and passed by a voice vote the bill that would provide just for quarterly adjustments, that is all.
Mr. HUMPHREY. That is correct.
Mr. DOLE. Nothing more.
We discussed in the committee, and then later we were both conferees and discussed in the conference; that if it went to 85 percent of parity, we were just asking for a veto. I guess, looking back, we probably surveyed it accurately.
But now we come to the Senate consideration of the veto with this new assurance from the administration. I would guess some farmers would be a little skeptical about any assurance from any administration, and based on the track record of President Ford on embargoes. But I believe that Secretary Butz, after a conversation with the President, was in a position to say, as he did say, that it would be raised to 80 percent on April1, and that he, in effect, endorsed the quarterly adjustment concept, although he did not say so totally.
The point the Senator from Kansas wishes to make is we are ending up with more now than we had last September. It has been a victory for the Senate largely because of Senator HUMPHREY’s efforts and, I hope, some effort on this side.
As the Senator from Kansas tried to indicate earlier, it is not who supports the farmer the most on this floor, because there are many factors to be considered. I assume if we do not look at the budget, it is easy to stand up and vote to override everything. If we come from farm States, it is easy to override everything that deals with farmers. But farmers have children, and they are concerned about deficit spending. They are concerned about the $70 billion deficit we had last year, and how much we are going to have this year. They are concerned about the budget process, and they look to us for leadership. They do not want to go out of business, but they are also concerned about the next generation.
Now, the compromise, if that is what it may be called, offered by Secretary Butz may have been made on his death bed, I do not know. I do not necessarily believe we had the votes to start with, but it is not going to be free. It could cost somewhere between $30 million and $40 million by the indicated quarterly adjustments and 80 percent parity on April 1.
So the Senator from Kansas believes that, based on this assurance, we have had a victory so far as the dairy industry is concerned. Instead of talking symbols we are talking about real progress for the dairy industry.
It seems to this Senator, as he has indicated before, we have two clear cut choices when we walk into the Senate Chamber to consider this veto. One is to make a long speech and downgrade the Secretary and the price and uphold the farmers, and the other is to try to get something for our farmers or you might not get anything, and I believe the latter has been accomplished.
Now, there have been mistakes made by this administration, I assume by any administration. I think dairy herds and farmers have been going down in the numbers as long as I have been in Congress. We had annual adjustments up until a few years ago. When Secretary Freeman was Secretary we did not have adjustments twice a year. We had them every April. Now we are up to quarterly adjustments under this administration which, I hope, is an improvement.
With reference to not trusting figures by the Department of Agriculture, that may or may not be true. I assume they make certain projections. Some may be true, some may be inaccurate. But the Congressional Budget Office created by Congress to ride herd on these agencies, whether they are Democratic or Republican makes no difference, and the Budget Office estimates it is $539 million over the next 2 years.
Mr. HUMPHREY. Mr. President, will the Senator yield? The House says $65 million. I will ask that this letter be printed in the RECORD.
Mr. DOLE. Put it right in.
Mr. HUMPHREY. It says the Congressional Budget Office in the House of Representatives—
Mr. DOLE. We have the same Budget Office.
Mr. HUMPHREY. The House Budget Committee indicated that the net cost would be $65 million.
Mr. DOLE. Net cost for what?
Mr. HUMPHREY. $65 million.
Mr. DOLE. It is my understanding those figures were updated last night after they had more information.
Mr. HUMPHREY. It that right? Who got hold of them last night?
Mr. DOLE. Not the Senator from Kansas.
Mr. HUMPHREY. This is a February 4 letter. That is about as good as you can get.
Mr. DOLE. That was early on, but they work late over there.
Mr. HUMPHREY. I ask unanimous consent, if the Senator will permit me, to have this letter printed in the RECORD.
There being no objection, the letter was ordered to be printed in the RECORD, as follows:
CONGRESS OF THE UNITED STATES,
Washington, D.C.,
February 4, 1976.
DEAR COLLEAGUE: We urge you to vote to override the veto on S. J. Res. 121, the Dairy Bill. Other letters have related the needs of the dairy industry brought out by nationwide hearings. This letter addresses only the consumer interests with respect to the USDA facts in the veto message.
Widely varying facts are flying around. Who do you believe?
To best way to determine which facts to believe is to examine the reliability of past projections and past programs. The following questions and answers will answer this question for you.
What has happened to retail prices under present USDA policy from January 1973 to December 1975?
Butter is up 37'%. Cheese is up 50%. Milk is up 32%. Last spring we were told (by two contradicting sets of figures) that unless we followed USDA policy, large increases would occur in retail prices. Congress followed the USDA and rejected the 85% of parity support price. The USDA policy has again resulted in disaster. Butter is up 30%. Cheese is up 15 %a. Milk is up 4% The cost to consumers has been 1.1 billion in 1975, over 3 billion since 1973, with an additional 16.8: million per week now.
Don't these price increases mean the farmer is living it up?
No. The average farm income has risen only slightly, less than the increase in the cost of production, forcing thousands of farmers out of business. This created. the present shortages. Also, cows produce much less milk in the fall and winter. These seasonal shortage periods force prices up. When milk is more plentiful in the spring, farm prices fall — but not retail prices (see attached chart). Therein lies the dilemma — under USDA policy both the consumer and the farmer are being hurt.
What would have occurred had 85% of parity been in effect?
Farm prices would not have fallen as low and more farms would have stayed in production. Sufficient supplies of butter and cheese would have been on hand this fall because of support purchases. Thus, no shortages would have occurred, resulting in much lower prices. Staff figures show at least a ½ billion dollar consumer savings for 1975, and 8.4 million dollar savings per week now. In the future, milk supplies would even out giving more stable lower prices.
Will going to 85% raise consumer prices now?
Definitely not. Since prices are at a seasonal high, the present price to farmers is well above the support price. History has shown that retail prices do not fall along with farm prices in the spring. Thus, if the support price takes effect it will not hurt the consumer.
Won't 85% cost the taxpayers a bundle and result in large stores of milk products?
No. Since most support purchases will be sold during the fall seasonal short period the House Budget Committee testified the net 1976-77 cost at only 65 million dollars. At present there is no cheese or butter on hand, causing the high prices. Non-fat dry milk stores are down from the beginning of the year. Saving the consumers over ½ billion for 65 million would not have been a bad bargain. Let’s not miss the bargain now.
If you want more detailed information, call Bob at 225-4115 or Jim at 225-2171.
The record of the USDA is so bad that the consumer can't lose if Congress has a temporary chance to stabilize milk prices.
An urban Congressman from Brooklyn and a rural Congressman from Vermont urge you to vote to override.
Sincerely,
FREDERICK W. RICHMOND.
JAMES M. JEFFORDS.
Mr. DOLE. I might add the Senator from Minnesota is talking about just this fiscal year. I am talking about this fiscal year; 1977 and 1978.
Mr. HUMPHREY. I am talking about the fiscal year 1976-77.
Mr. DOLE. That is not much different then. We have the $73 million for that, and your figure is what, $65 million?
Mr. HUMPHREY. Sixty-five million dollars.
Mr. DOLE. If we look down the road for 2 years we are talking about a $.5 billion.
Mr. HUMPHREY. If you look down an extra year you are talking possibly about another $44 million. I doubt that outlays will be even that much.
Mr. DOLE. In which year?
Mr. HUMPHREY. 1977-78.
Mr. DOLE. Our figures are not in accord with those figures. But there is only one Congressional . Budget Office. The House does not have one—
Mr. HUMPHREY. This is the House Congressional Budget Committee.
Mr. DOLE. I see.
Mr. MUSKIE. Mr. President, will the Senator yield?
Mr. DOLE. I will yield to the Senator from Maine.
Mr. MUSKIE. The figure we have from the Congressional Budget Office, and it is only one, it serves both the House and Senate Budget Committees, the figures we had indicate that the fiscal year 1976 cost was $43 million; the transition quarter costs were $29 million. The $65 million the Senator from Minnesota is talking about and the figures we put in are consistent.
Mr. HUMPHREY. They are additional cost.
Mr. MUSKIE. The $539 million the Senator from Kansas was talking about was for the period of fiscal 1976, the transition quarter, fiscal 1977, and fiscal 1978. So the $65 million the Senator from Minnesota is talking about is pretty close to the number we have from the Congressional Budget Office for the period that is covered. That figure has now been updated by the Congressional Budget to $73 million.
The extra increase in the House bill for fiscal year 1976 is $43 million. For the transition quarter $29.3 million, so those two figures together are $72.3 million.
I think the $65 million figure originated in December when the cost was first considered, and the $73 million figure is a little later.
Mr. HUMPHREY. I think that is true. I think the difference is the date of computation.
Mr. MUSKIE. Yes, I think so.
Mr. DOLE. I thank both Senators. It is important that we have the figures.
Mr. HUMPHREY. Mr. President, will the Senator yield? I think we are getting closer on the figures 1976-77.
Mr. DOLE. Right.
Mr. HUMPHREY. Between $65 million and $70 million. The milk producers estimate $72 million as a possible cost for both years.
Mr. DOLE. Yes.
Mr. HUMPHREY. Net increase in cost.
Mr. DOLE. Right.