April 9, 1976
Page 10283
Mr. MUSKIE. Mr. President, I understand that the presiding officer (Mr. HOLLINGS) wanted to get involved in the discussion. I would be glad to substitute with him for that purpose. I am anxious to have some other voices than my own raised in this debate.
(Mr. BELLMON assumed the chair as Presiding Officer at this point.)
Mr. MUSKIE. If I might have the attention of the Senator from Louisiana, I would like to make it clear for the record and for my own understanding what the various components of the amendment are. I am going to put a table in the record to indicate it.
What the Senator proposes is to add $1.4 billion to function 550 to cover the medicare and medicaid savings that the Budget Committee has anticipated of $1.1 billion and $.3 billion, and then he proposes to add $600 million to income security, function 600, to offset the savings on social security and AFDC that the committee had anticipated, for a total increase of $2 billion?
Mr. LONG. That is right.
Mr. MUSKIE. Offsetting that, the Senator would take $1 billion in function 450 to offset countercyclical revenue sharing, and $1 billion in income security, function 600, to eliminate an extension of unemployment compensation?
Mr. LONG. Beyond 39 weeks.
Mr. MUSKIE. Beyond 39 weeks. If that is accurate, I ask unanimous consent to put that table in the RECORD.
Mr. LONG. That is correct, and it would work out to a zero change in the overall ceiling.
Mr. MUSKIE. That is right.
There being no objection, the table was ordered to be printed in the RECORD. as follows:
[Table omitted]
Mr. HOLLINGS. Mr. President, I thank the distinguished chairman and our distinguished ranking Republican member, the Senator from Oklahoma (Mr. BELLMON) for momentarily taking the presiding position so I could make a few comments because, listening to the debate, as my friend from New Mexico (Mr. DOMENICI) was pointing out, we did not go after this one willy-nilly.
When the distinguished chairman of the Committee on Finance says that we cannot do these things, on the contrary, we find them well studied out, well contemplated, and fairly well along in the course of events for this particular legislative year.
For example, on social security, rather than having it, as Senator Domenici was pointing out, eliminating every one, we were looking at the Congressional Budget Office report and reading there when we debated in the Chamber. We said what is contemplated here are prospective. reductions, not reductions in benefit levels to current beneficiaries nor limiting or capping the cost of living increases.
These reductions would include, first, requiring a test for financial dependence as a condition for benefits to spouses and survivors.
So, with our women's lib movement, of which I am a supporter, I do not wish to harshly say: "You live by the sword, you die by the sword." But are we going to have true equality? We say here now we are going to impose a dependency test in the one instance, for women, for example, and then we are going to do away with that minimum benefit of $105 a month, which is a minimum benefit really as a welfare provision under social security.
We can have a majority vote on that in the Chamber at any time, and the Congressional Budget Office studied it out and it was well within the contemplation over on the House side.
Mr. President, I think the distinguished chairman would want to remember this. I mean the chairman of the Budget Committee, as well as the chairman of the Committee on Finance. When we drew up our amounts we of course, corresponded, communicated, and worked with the Committee on Finance. The distinguished. chairman of the Committee on Finance, on aid to families with dependent children, on the next item, that he has here $.3 billion, he wrote—
Mr. LONG. Mr. President, will the Senator yield?
Mr. HOLLINGS. I will not yield now. I wish to make one sentence without jambalaya. I know exactly how my distinguished colleague makes a debate and no one can follow it, and these things are not easy to follow. I do not profess any particular expertise other than the actual record. Reading that RECORD on March 4 to Senator MUSKIE and the Committee on the Budget, this is exactly what the Committee on Finance told us.
Income security. The committee estimate for new legislation under the income security category represents a net figure of both savings and additional benefits in the programs of aid for families with dependent children and supplemental security income for the aged, blind, and disabled.
That did not give a figure, but when the staff of our Committee on the Budget checked with the Committee on Finance they said rather than $.3 billion or $300 million that they would estimate $.6 billion, double that amount. They came in the Chamber now and say: "Look, it can't be done. It is just impossible. It is made out of whole cloth. Someone dreamed it up. Where did the staff get this? You just don't get no votes."
We got that, nonetheless from the author of this particular amendment.
With respect to the next item, $1.1 billion, under medicare, of course, that, too, requires legislation, but it limits the hospital reimbursement to a 7 percent inflationary increase. It is still inflation. But throughout we are simply trying to say no one is cut off from whatever it is, but rather than 10 or 12, let us limit that to 7 percent, which is not unreasonable. It can be agreed to in this Chamber. We were trying to pick out the reasonably easy items on which to agree.
We realized that, feeling our way and just establishing the Committee on the Budget and its credibility, we would have to use restraints.
We cannot take a Finance Committee, and a distinguished chairman, particularly, and have us, who do not have the experience that he has had over the 20 some years here, with all the witnesses that he has heard and all the expertise that he has on his staff, say: "Oh, Senate Finance Committee, you just do it our way."
That would make an impossible situation here within the budget process.
We were trying to lean over on the side of reasonableness with respect to having this one enacted, and we just chose that 7 percent inflationary figure, which is not a tough one. The same thing is true with respect to doctors — limit them to 4 percent. That came out in several of the studies.
Now, as to medicaid, of course, that was for the States themselves. They have no less than six investigations going on as to States operations with respect to medicaid, and they said that the States themselves — on quality control, on many of the studies around — could easily save, and they have all kinds of figures out within the consideration of our committee, but we took the $300 million one there.
So they were well-conceived ones.
We got to the unemployment compensation benefits, over on the other side of the ledger.
Unemployment compensation benefits expire in March of next year. Those benefits, incidentally, should be perhaps under the Committee on Finance but right now are under the Committee on Labor and Public Welfare. We are going to extend those benefits. The people are unemployed. If we only get to a 7.1 percent unemployment rate at the end of this year, which is a pretty optimistic projection, then by March when this is expiring in January and February, we are not simply going to leave them without benefits and just give them welfare payments, put them on food stamps, and all. It is one of these uncontrollables. And we will pass that legislation.
Rather than being impossible to pass, we extended those unemployment benefits to $1 billion there.
Then with countercyclical revenue, I could not believe my ears. They said: "Where did you get that?"
We got that from none the less than the distinguished mayor of New Orleans, Moon Landry. I never heard a more eloquent presentation of the plight the cities find themselves in than in the colloquy we had with the distinguished mayor of New Orleans. Federal programs time after time after time again exacerbated the problems and the dilemma of the inner city of America.
And I had been in the initial debate on countercyclicals. It is something rather nebulous and hard to get your hand on, with far too much money and everything else. The first proposal was at a $70 billion rate, that the cities said, and they made a record as to how they could use these funds, how it would help them out, and how it would not expire. I have seen those mayors, as the distinguished chairman of the Committee on Finance has, and those Governors. They are going to get revenue sharing and they were equally strong with this particular program.
Mind you me, a good majority has voted for this, which was even in a sense overridden on the House side. It missed by one vote. We are talking about a majority vote. And they come here now and say: "Look, fellows, you just cannot do these things, you cannot do them."
I say, "We cannot do without them."
That is how this particular program is. Each one of these items is that way. This is very cleverly drawn. What you do is you take the Committee on Finance items on the left hand side of the page and you just increase those, and just leave the Committee on Finance out of this particular budget procedure. Those things that are not within the Committee on Finance — there are two of them, one of them is with the Committee on Labor and Public Welfare, and the other one is the countercyclical program that would be with the Committee on Government Operations — and with those committees, then by gosh, we will have those decreases. Let them handle those cuts, and they can get by.
I simply state that we tried our very level best to be minimal with respect to any kind of requirements of budget restrictions as they might be characterized on the Committee on Finance.
That is a tough one. I know, as the Senator from Louisiana pointed out, every time one thinks he is going to reform and he brings legislation out, everyone puts their little special interests on there, and they turn into a Christmas tree instead of reform. It comes out deformed instead of really increasing the revenues and eliminating loopholes. The loopholes are increased.
We look at the budget. We look at this budget. I think this is a good thing for my friend from North Carolina and I, because he generally looked fiscally at outlays the same way we looked at revenue spending over on this side. We find, as it says in the Bicentennial celebration — it took 186 years to get to that $180 billion. In 1963, 9 short years later, it took those years to get to the second $100 billion budget. That shows how it has been spiraling upwards. In only 3 years, really, about 3½, to get to the $300 billion budget in 1971, and now the Senator and I, regardless of all the constitutional amendment proposals and everything else, he and I are fighting at the $400 billion level.
When I came to the Senate in 1966 or 1967, I voted for a $158 billion budget. Incidentally, Lyndon Johnson balanced it in the year he left office, in 1969. Noone wants to remember that.
We increased revenues and cut spending some $5 billion in order to get that balanced budget, 1968-69. But we have $400 billion here with an increase over the last 9 years, let us say, of 146 percent.
And we look over here at tax spending. They call them tax expenditures. How many more loopholes have we added? When have we increased taxes in the United States? The States have done so. The municipalities have been forced to do so. But at the Federal level, we have gone from $38 billion in tax expenditures in 1967 to $101 billion — the exact size of the defense budget.
We have all those loopholes in there and an increase of 167 percent.
We look at the broad picture. With reference to the adjustments that have been packaged singularly by the amendment of the Senator from Louisiana, Heaven knows, every one of those is within the ballpark and is what we ought to do. Maybe we will not.
However, in the adoption of this budget, we have been reasonable. We have taken more than a restraint type of approach to those functions coming within the prerogative of the Committee on Finance.
We have to face up to it. We cannot go to Defense every year and say, "Cut it," which we have done 5 years in a row, when we cut almost $5 billion. I have been part of it: $5 billion, $5 billion, and $5 billion — until now we are in trouble with the Soviet Union. Over here, on the other side, life is good and life is great, and let us have more loopholes, loopholes, loopholes.
The Senator has come along within the adjustments that the President has put into the works, that Congress has put into the works; that the Finance Committee has put into the works. There has been correspondence, and he comes to the floor of the Senate and says that it cannot be done; it will not happen. I think we should give it a try. I believe we have to defeat this amendment and give it a try. The Senator and I agree that we cannot tell, but I believe we should work toward it. That is why I asked that the Senator yield.
I will be glad to yield for a question or yield the floor.
Mr. LONG. The point that it seems to me the Senator is overlooking is this: In the letter to which he has referred, I pointed out that this net figure included both savings and additional benefits. I have tried to exercise restraint in managing these social welfare bills, but it will be very difficult to defeat some of these benefit amendments, and I do not think they can be defeated.
For example, an amendment can be offered, as it has been offered many times, simply to raise the earnings limitations under social security, so that beneficiaries can keep more of what they earn by dint of hard work. I have resisted amendments such as that on occasion and then have been beaten by about 90 to 10. I do not think anyone is going to have much more success than that. They may have a little more success, but. I cannot picture them getting a majority when they come out with a social security bill that would only cut benefits, as the Senator would like to do.
I do not think it is realistic to anticipate that the Senate will reject an amendment to increase benefits of the kind for which it has voted repeatedly by votes exceeding 90 percent. I have observed amendments such as Mr. HARTKE's amendment to help the blind under the social security programs. Watching the Senate vote for that type of amendment, I do not think it is likely that anyone would introduce a bill to undertake to pick up about $300 million by cutting down on some social security benefit without being confronted with an amendment that historically has mustered a vote of 95 percent of the Senators. I do not know how the Senator is going to defeat that kind of amendment.
Mr. MUSKIE. The Senator has told us how difficult it is to save $2 billion.
Mr. LONG. In this social welfare area.
Mr. MUSKIE. Yet the Senator, in his amendment, has proposed a way to save half of it in extended unemployment compensation. That is in the same function as social security.
This is not a line item resolution. What the Senator's amendment proposes is a reduction in the income security function of $400 million below the budget resolution target.
If we leave the Budget Committee's figures as they are, one of the options available to the Senate is to come back and announce that he is going to discontinue extended unemployment compensation and save $1 billion of the $2 billion that way. We are not telling the Senator that he cannot do that. We do not tell him that at all.
If we adopt the Senator's proposal to cut the income security function by $400 million, that is not a mandate to eliminate the extended unemployment compensation, because this is not a line item piece of legislation. The Senator will have cut income security by $400 million and will find himself in a greater squeeze in that function if the Senate happens to disagree with his idea of unemployment compensation. He will be in a greater squeeze than if he accepts the Budget Committee’s number for income security.
What I am trying to say to the Senator — and I suppose it has to be repeated over and over because it is hard to divorce the details from the overall budget totals — and that is that this is not a line item question, and the range of options available within each function for spending or reducing spending are as broad as that available to him on revenues. The Senator and I have talked about that.
The Budget Committee says, "Yes, we would like to have $2 billion in savings in revenues." The Senator says that is impossible. The Senator and I have agreed that if he comes in with $362 billion in revenues, he will have met the revenue target: How he does it is his job and his responsibility.
What I am saying to the Senator is that if he wants to achieve savings in the income security function, one way of doing it is his way; that is a way available to him. He does not have to do it here. He can save the $1 billion in extended unemployment compensation benefits by recommending that to the Senate, down the road. The Senate might not agree with him, and I might be pessimistic about that, just as he is pessimistic about the other options he has discussed. I do not see why that should be the problem.
The other $1 billion in savings scattered through the health function does not necessarily have to be achieved with medicare and medicaid. It can be achieved in other health programs. We do not mandate it. But I will say this about medicare: There is a great deal of concern in my State about the abuses of medicare, not by beneficiaries but by vendors — doctors, drug stores, and what not.
The Special Committee on Aging has held hearings in which these kinds of abuses have been highlighted. So there is a need for reform. It seems to me that it should be possible to develop some interim controls, getting at those kinds of problems.
So there is a range of savings that can be achieved — eliminating unemployment compensation extension, if that is the Senator's preference, or saving on some of these medicaid abuses, or even without being able to save anything on medicaid and concentrating solely on medicare.
These are all options that I would think the chairman of the Committee on Finance would have open to him.
Then he could come here and report the net result. If the net result is a need to change that overall functional total, so be it. The Senate can then consider it and make it.
What I am saying here is in the essence of the budget process as I understand it. That may not disabuse the Senator from offering his amendment. I am just trying to make the legislative history that underlines the range of options available to the Senator, to the Finance Committee, and to the Senate, down the road.
Mr. LONG. I thank the Senator for his statement, but I want to make it clear that in my judgment, some of what is involved here is sort of like what happens when the preacher says, "Anyone who knows any reason why this should not happen had better speak now or forever hold his peace." If you do not want something happening here, you had better speak up.
Mr. MUSKIE. That is a good way to put it.
Mr. LONG. Because otherwise, the girl is going to be married to the other guy.
Mr. MUSKIE. And other unfortunate consequences.
Mr. LONG. It would seem to me that, as much as I would like to see more unemployment insurance for people, if I had to choose between extending unemployment benefits and passing a law to make old people pay a great deal more for their medical care, I guess I would just prefer not to extend unemployment benefits.
It is my understanding that if these Budget Committee figures are accepted the way they stand now, the amount that is here for health will be $1.4 billion lower than what the Committee on Finance has thought can be achieved.
Mr. MUSKIE. Let me make clear again on that point that the health function is over two-thirds medicare and medicaid with only about one-third other programs that are not in the jurisdiction of the Committee on Finance. So the savings that the Budget Committee anticipated in the health function cannot be met without some savings, but specific savings will not be mandated.
Now, if they cannot be achieved up to the amount of that the Committee on the Budget would like to see achieved, then it seems to me the committees, all committees involved — the Committee on Appropriations as well as the Committee on Finance—
Mr. LONG. I would be willing to settle with the Senator right now on this. We could come to terms and agree at this moment if we can agree that that $1.4 billion is going to be saved by some other committee. I would be happy to agree to that right this very minute.
Mr. MUSKIE. That would make us a line item committee.
Mr. LONG. But if we could have an understanding as between the committees that the Committee on Appropriations and the Committee on Labor and Public Welfare are going to save that $1.4 billion, and if they could save that net without increases to offset it, as far as this Senator is concerned, I would be happy just to modify my amendment to take out the change in the health figure. But I think I have to inform the Senator that if we expect to save this money in this area, if we can save some of it, there will undoubtedly be an amendment to provide some additional benefits somewhere else and, by the time we get through with Senate action, the savings will be gone.
Mr. MUSKIE. The process the Senator is suggesting takes place after the first concurrent resolution is adopted and before the second concurrent resolution. The committee staffs work together as legislation moves through the Congress. We try to be constantly alert to, and understanding of the problems and the difficulties that the budget process can pose for the Senators and their committees. We cannot do this in advance.
If we were to try to negotiate an agreement with every committee as to how the first concurrent resolution is to be implemented before we bring it to the floor, we would be reporting the first concurrent resolution on Christmas Eve. And the Senator knows what happens on Christmas Eve, because he has managed Finance Committee bills on Christmas Eve, and I do not want that kind of thing to happen.
What I am saying is that this is a kind of give and take process that proceeds from here on. I do not know of anyway to say it any better than I have.
I do not know of any better way to present the arguments than I have. I think I have tried to indicate the flexibility of this process and the price of these targets. I think, really, that the Senator's objective of producing reasonable and realistic legislation can be accommodated. I would not try to predict specifically, but I think it can be accommodated, given the range of options that we have been talking about here this morning.
Mr. LONG. I believe, Mr. President, that the record fairly well presents our difference of opinion at this point. It seems to me that, as between assuming $2 billion of reductions from the projected cost of the existing programs, which will require changes in the law, it would be far more practical simply not to pass a new spending program and not to extend unemployment benefits.
I should like to vote for the increases, but if the way that we would finance them would be by the reductions that we have discussed here, then it seems to this Senator that, faced with a hard choice, it would be better to postpone our plans in the area of increase and extension of programs rather than to cut back on the projected cost of those we presently have.
Mr. MUSKIE. I repeat, that option is available under the committee resolution without any change.
The PRESIDING OFFICER. Who yields time?
Mr. LONG. I yield to the distinguished Senator from Nebraska.
Mr. CURTIS. I thank the Senator. How much time do I have, Mr. President?
Mr. LONG. How much time do I have, Mr. President?
The PRESIDING OFFICER. The Senator from Louisiana has 28 minutes remaining.
Mr. LONG. I yield 10 minutes to the distinguished Senator from Nebraska.
Mr. CURTIS. Mr. President, I am convinced that when the people of the country supported the movement for budget reform in Congress and backed the proposal that was then before this body and the House of Representatives, they thought they were backing a proposal to balance the budget. There was no discussion that we might be engaged in an exercise of a manageable deficit. I believe that that is where our problems start.
Mr. President, regardless of the resolution that is brought in here by the Committee on the Budget, the assumption will be made by the Senate and the country that the Senate has mandated the Committee on Finance to bring in a net increase in revenue by reducing tax expenditures $2 billion.
The country and the Senate will also assume that the decision to grant a 5 percent pay raise to all Government employees is made. That provision will go to the floor having been blessed by the Committee on the Budget.
The debate then will not center around should we, at a time of a $76 billion deficit, have a pay raise? The debate will center on, shall it be what the Senate spoke on the day they ratified this resolution, 5 percent, or a higher figure if they can get it?
Also, I am disappointed in this resolution, that it sets a situation up where the Senate and the country will assume that we will not increase social security taxes. There is a statement in here, "additional financing fiscal 1977 for social security unemployment trust fund." They anticipated there would be none.
Now, Mr. President, I happen to believe that if I am to be honest, I must support an increase in social security tax. The reserves have gotten down to practically nothing, just a few months. This year, we are going to pay out more than we take in. We are in trouble for many reasons.
One of the reasons is that in 1972, the House of Representatives sent us an increase in social security benefits of 5 percent and some change in the tax structure for it.
And the Presidential bee hit over in the House of Representatives, and an announcement was made that they could have a 20 percent increase in social security without changing the tax structure, and that became law.
The junior Senator from Nebraska did not vote for it, although I was up for reelection and I took some punishment for it. But I do not believe we can be fair to the old people of the country and not maintain the social security fund.
The reserve is disappearing. Long ago it was way less than a year and, as I say, we are going to pay out more than we take in.
Yet the Committee on the Budget has made a decision the practical effect of which is that, if it is adopted, it is a mandate to the Finance Committee not to attempt to do anything about the social security fund.
Why should the Finance Committee hold a hearing, call in actuaries and see if they cannot work out something that will maintain the Social Security Fund if the Senate is going to mandate us today not to increase the tax?
I support my chairman as a procedural matter. I do so for different reasons.
If these proposed cuts in existing programs are presented — and I hope they will be — I will vote for the cuts. I will not vote to cut something in title II of the Social Security Act because that is contractual in its nature with the people involved.
But on the subject of medicare, we can talk all around the fringes we want to. There are some hard issues that we must face there. Now they are not faced by talking about inflation and saying to a hospital, "You cannot raise your cost more than x percent."
These hospitals are having a terrific struggle. But here is the issue that we ought to meet: We are paying medicare benefits, hospital and doctor benefits, to everybody over 65 years of age regardless of their wealth or income. How are we paying it? Out of the payroll tax of the workers of the country.
There are many of these aged without funds or without very much in the way of funds, and they should have their medicare. But why on Earth with social security taxes going that high should the rank and file of the workers and the self-employed be taxed to provide free hospital and free medical benefits to everybody just because they have got a birth certificate that says they are 65 years of age even though they may well be able to pay their own bills?
If the Budget Committee wants to do something constructive about social legislation why do they not face that issue? Why do they talk about the percentage of inflation which, after all, means how much of an artificial cap are you going to put on the hospitals and say, "Here, we have not the courage to revise the medicare program, but to save our face we will say to you you must absorb the additional costs."
If you were running a hospital, your wages went up, your utilities went, up, and all the other expenses went up, and then you are told by the Federal Government that your reimbursement cannot be raised to meet these things, what would you do? Is it any wonder that people in all walks of life are losing confidence in their Government in Washington?
So I want the distinguished Budget Committee to realize that while I object to what is going on here I do so for different reasons from my distinguished chairman of the Finance Committee.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. CURTIS. Mr. President, I ask for about 5 minutes more, if I may.
Mr. LONG. I yield the Senator 5 minutes.
Mr. CURTIS. Mr. President, as the ranking minority member of the Committee on Finance, I feel compelled to comment on the Budget Committee's recommended level of Federal revenues for fiscal year 1977.
The Budget Committee has recommended that the level of Federal revenues for fiscal year 1977 be $364.2 billion. This represents a decrease of $15.3 billion from what would be collected if the tax laws in effect of January 1, 1976 remain unchanged. This $15.3 billion was derived by taking the amount necessary to extend the expiring tax reductions — which is $17.3 billion — and combining that with a $2 billion increase resulting from other tax legislation. The effect of this recommendation is that, if the prior tax reductions are to be extended, other tax legislation must produce a net increase in Federal revenues of at least $2 billion. In my view, this decision of the Budget Committee is both unrealistic and unwise.
The Committee on Finance is now conducting extensive hearings with respect to tax revision in general and H.R. 10612 — the House tax revision bill — in particular. By the time the committee has completed these hearings, testimony will have been received from more than 300 individuals and organizations. The committee will start developing a tax revision bill later this month and seek Senate action upon it this year. However, even if a tax revision bill is enacted this year and signed by the President, I believe that it is unrealistic to assume that any tax increases included in such legislation would in fact produce a $2 billion net increase in revenues during fiscal year 1977.
As a matter of policy, the Congress has generally — and I believe wisely — been reluctant to increase taxes on a retroactive basis. H.R. 10612 was passed by the House in late 1975 and the tax increase provisions of that bill were generally effective as of January 1976. Even if the Senate should accept these tax increase provisions of the House bill, but apply them on a prospective basis starting January 1977, the legislation would not increase revenues for fiscal year 1977 by $1.2 billion — net — as the House estimated. Rather, revenues for fiscal year 1977 would be decreased by $156 million.
I personally am not prepared to vote for many of the tax increase proposals passed by the House or recommended by others. Testimony received by the Finance Committee indicates that many of these provisions will, in fact, reduce revenues in the long run by reducing investment and employment. That may be "reform" to some, but it is not "reform" to me. However, debate on the merits of these proposals can and should be saved for another day, when the Senate debates tax revision. Our limited purpose today is to debate the budget.
The important point that must be made here in this budget debate is that, when the Senate considers these tax revision proposals, it will in all likelihood impose any tax increases on a prospective basis. Even if taxes are increased by the $2 billion recommended by the Budget Committee, it is most unlikely that such an increase can or should be realized during the 1977 fiscal year. For these reasons, I find the Budget Committee's recommendation to be unrealistic.
It is significant to point out that the Budget Committee itself recognized the very point I am making here. In its report, at page 8, the Budget Committee states that "revenue gains from a termination of or reduction in tax expenditures may be much smaller in the year of enactment than they will be when they become fully effective." I find this statement difficult to square with the recommended $2 billion target for fiscal year 1977.
I also believe that the Budget Committee's $2 billion target is unwise as well as unrealistic. Let us assume for the moment that the Senate does find a way to increase revenues by $2 billion in fiscal year 1977 through new tax legislation. It is entirely possible — and I believe it is likely — that the Senate, when it considers tax revision will conclude that there are other inequities in the tax code which must be corrected even at the cost of reducing revenues. For example, many Senators have introduced bills recommending amendments to the estate tax to preserve small businesses and family farms. During the Finance Committee's hearings, we have received testimony about other tax inequities which should be corrected. I believe, and I think the Senate believes, that a tax which is unjust, or unjustly applied, should be repealed or modified.
Nevertheless, proposals which may reduce revenues are overlooked in the Budget Committee's resolution.
Those of us who sit on the tax writing committees know full well that tax reform can mean revenue reductions as well as revenue increases. For example, the House tax revision bill would raise more than $2.7 billion for calendar year 1977, but it would also reduce revenues by more than $1.9 billion for that year. Despite this fact, and despite the past history of Senate action on tax bills, the Budget Committee has only looked at the revenue increase side of the equation.
Mr. President, I believe the Budget Committee's action is both unrealistic and unwise.
Nevertheless, I shall not at this time offer an amendment to the budget resolution. I did, however, believe it necessary to point out to my colleagues that we may in this resolution be budgeting for matters that the Senate may not be prepared to vote for later in the year.
The PRESIDING OFFICER. Who yields time?
Mr. CURTIS. I have not yielded the floor.
Mr. President, only yesterday the charge was led by the Budget Committee to set aside their own Budget Act in order to balloon the food stamp bill.
I am thoroughly convinced that the bill that was passed yesterday by the Senate, if it became law, would increase food stamp expenditures by nearly a billion dollars at a time when the country knows that the present $6 billion program ought to be reduced.
I do not think there is any question but that we could take care of every hungry and undernourished person in the United States and do it for $4 billion.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. CURTIS. Yet I was disappointed to see what the Budget Committee did about that yesterday.
There were five members of the Budget Committee who, of course, did not join.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. TAFT. Mr. President, I ask unanimous consent that Don Zimmerman, Larry Greenberg, and Robert Hunter, of the Labor Committee staff, be granted privilege of the floor, and that Tom Block of my staff be granted privilege of the floor during the debate and voting on this legislation.
The PRESIDING OFFICER. Without objection, it is so ordered.
Who yields time?
Mr. LONG. Mr. President, if other Senators are not here to offer amendments, I suggest we yield back our time.
Mr. CURTIS. I believe the Senator from Alabama—
Mr. ALLEN. When the time is yielded back.
Mr. LONG. If that is the case, Mr. President, I am prepared to yield back the remainder of my time.
Mr. CURTIS. That is all right.
The PRESIDING OFFICER. Is all time yielded back?
Mr. MUSKIE. Mr. President, I would just like to use about a minute on the resolution simply to emphasize the nature of the issue that is involved.
The Senator has told us that the $2 billion in savings scattered between two functions — the health function, function 550, and the income security function, function 600 — cannot be achieved, that the $2 billion that they add up to is more than he can see as being within reach.
Yet in his amendment, he proposes a way to achieve half of those savings, and that is to eliminate an extension of unemployment compensation benefits. That would have saved a billion dollars. That option is available to the committee. It does not have to be exercised here and now and today. It can be exercised by the committee.
If the Senator and the committee choose to exercise that option, then between the two functions they need to find another $1 billion in savings.
What the Budget Committee is saying, that it is so important to hold down health costs that an effort ought to be made to achieve savings.
If the total $1 billion in additional savings cannot be achieved, the committee certainly has the option of reporting back to the Senate, but it does not have to reach the conclusion now that there is no possibility beyond eliminating an extension of unemployment benefits of achieving any more savings.
The Budget Committee respectfully disagrees with that.
Because of the doubts Senator Long has on the score of these savings, then he would have the Senate make specific decisions eliminating the countercyclical program, which is part of congressional policy today, which was part of a vetoed bill which the Congress came within three votes in the Senate of overriding, established policy, desperately needed, and he asks us to make a specific decision to eliminate that program because of his doubts about his ability to achieve all the savings that the Budget Committee would like to see achieved in the other two functions.
I think on the basis of that case, Mr. President, the Senate has every right to sustain the Budget Committee and the Budget Committee's numbers in these functions.
I yield back the remainder of my time, if I have any, which I doubt.
The PRESIDING OFFICER. All time is yielded back.
Mr. ALLEN. Mr. President, I have an amendment at the desk and I ask that it be stated.
The PRESIDING OFFICER. The amendment will be stated.
The legislative clerk proceeded to read the amendment.
Mr. ALLEN. Mr. President, I ask unanimous consent that further reading of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
On page 1, line 2, strike "$453,500,000,000" and insert "$452,900,000,000".
On page 1 strike lines 7 through 10.
On page 2, lines 2 and 3, strike "$163,000,000,000" and insert "$162,700,000,000".
On page 2, lines 5 and 6, strike "$139,700,000,000" and insert "$139,100,000,000".
Mr. ALLEN. Mr: President, I will explain the amendment.
Mr. President, I ask unanimous consent that the time limit for the discussion of this amendment be set at 30 minutes, divided equally between myself and the manager of the bill.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. ALLEN. Mr. President, I ask unanimous consent to have printed in the RECORD a fact sheet on that amendment.
There being no objection, the fact sheet was ordered to be printed in the RECORD, as follows:
ALLEN AMENDMENT TO LONG AMENDMENT TO BUDGET RESOLUTION
The Senate Budget Committee report indicates that they assumed the following reduction and increases in the dollar amounts in their recommended first budget resolution:
Reductions
Billion
Social security $0. 3
Aid to families with dependent children 0.3
Medicare 1. 1
Medicaid 0.3
Total 2.0
(Material in brackets deleted from Long Amendment)
[Increases
Billion
Extension of unemployment benefits beyond 39 weeks+$1.0
Countercyclical revenue sharing +1. 0
Total +2. 0]
The Long Amendment to the budget resolution would delete both the $2.0 billion in reductions and also the $2.0 billion in increases. It would thus not change either the expenditure total or the deficit figure in the Budget Committee recommendation.
The Allen Amendment keeps reductions, eliminates increases, and reduces the budget by $2 billion.
Mr. ALLEN. Mr. President, I have listened with a great deal of interest to the discussion of Senator LONG'S amendment. Senators will find on their desks a fact sheet as to the amendment.
The fact sheet shows what the Budget Committee has done. That is, it has effected reductions of $2 billion in a certain program, but instead of the budget receiving the benefit of those reductions, $2 billion was added to two programs.
So we see the two columns on the page.
Senator LONG argues that these reductions, the $2 billion reduction in these programs, should be restored and that to offset that restoration the increases of $2 billion proposed by the Budget Committee should be eliminated.
Therefore, as he correctly argues, there should be no effect on the budget.
Each of these gentlemen is an eminent authority on finance, and I give great weight to any contention they might make. I believe in this particular case each of these gentlemen is 50 percent right. I will agree 50 percent of the way with each of their contentions.
I believe that Senator MUSKIE and the Budget Committee are right in recommending reductions of $2 billion.
I believe that they are wrong, Senator MUSKIE and the Budget Committee, in recommending increases in these two programs for which they recommend increases.
I believe Senator LONG is correct in recommending the decrease of the $2 billion in the programs in which he is recommending $2 billion reductions.
I believe he is wrong in asking for the restoration of the $2 billion that the Budget Committee has cut.
So I am accepting half of each proposal, that is, agreeing to the reductions of $2 billion that Senator MUSKIE and the Budget Committee are recommending, but agreeing with Senator LONG on the other half of the proposal that the $2 billion increase in the unemployment benefits and the countercyclical revenue sharing should be decreased.
So if we take the best part of each proposal we will end up with a $2 billion savings in the budget, and we will have as authority for both steps an eminent financial authority. We will have Senator MUSKIE and the entire Budget Committee, which we all have great confidence in. We are accepting their view that $2 billion can be cut from the programs where they are suggesting a $2 billion cut. What could be more authoritative than the Budget Committee? So we are following the Budget Committee on that proposal.
(Mr. HARRY F. BYRD, JR. assumed the Chair at this point.)
Mr. ALLEN. Then, Mr. President, as to our effort on the decrease in the unemployment and countercyclical revenue sharing, who do we have for authority there? Not the Senator from Alabama. I am just following the lead and the suggestion of the eminent chairman of the Finance Committee, through whom I believe these measures pass. If the distinguished Senator from Louisiana, the chairman of the Finance Committee, says we can decrease these programs by $2 billion, we are anchoring our action, under my amendment, to the opinion and recommendation of the distinguished Senator from Louisiana, the chairman of the Finance Committee.
We hate to disagree with our friends here in the Chamber. We hear Senator LONG making a fine argument and we say,"He must be right," and then we hear Senator MUSKIE make a very fine argument and we say, "My, he must be right."
So not to disagree with either of them, take the best of both. In that way we will save the budget $2 billion. If anyone calls us to task for that action and asks, "Why did you cut $2 billion off these programs?"
"Senator MUSKIE and the Budget Committee recommended it."
"Why, then, did you decrease the other programs by $2 billion, the extension of unemployment beyond 39 weeks and the countercyclical revenue sharing?"
"We did that on the recommendation of the distinguished Senator from Louisiana, the chairman of the Finance Committee."
Mr. President, it is quite obvious that both of these distinguished Senators in this particular case are half right, and that is not too bad a percentage. Each of them are half right and all we have to do is adopt the best of the two proposals. That is what the amendment offered by the Senator from Alabama would do.
Mr. President, I reserve the remainder of my time.
The PRESIDING OFFICER. Who yields time?
Mr. MUSKIE. Mr. President, I yield myself 5 minutes.
If the standing rule is that Senators are half right, I wonder how that would affect the amendment of the distinguished Senator from Alabama. We could get the whole business whittled down to no amendments at all.
I appreciate the Senator's amendment, and the fact that it reflects his understanding of the debate that has taken place in the last hour and a half and his own personal decision about how that debate ought to be resolved. That is in the nature of this process and I believe it is very helpful.
I cannot support the Senator's amendment. His proposal to eliminate the extension of unemployment benefits beyond 39 weeks, and his proposal to eliminate the countercyclical revenue sharing provisions which are reflected in this budget.
First of all, with respect to the first, the extension of unemployment compensation benefits beyond 39 weeks, it is a fact, of course, that the Budget Committee assumed that extension. It also appears to be a fact that the chairman of the Finance Committee, which has jurisdiction over it, would prefer to eliminate that extension rather than some of the other programs that we discussed this morning.
My own position is that although it is assumed by the Budget Committee resolution, it is not a decision that needs to be taken by the Senate as a whole today; that we really ought to watch the economy as it develops; that we ought to watch what happens to the unemployment rate as the economy develops this year, and not make that decision finally until later on in the year, after the Senator from Louisiana has had a chance to consider it in the Finance Committee, after he has had a chance to consider it as one option in achieving the cost savings that the Budget Committee would like to see.
So I think it is premature, as I said in connection with Senator LONG'S amendment, premature to make that final decision now.
The effect of the amendment of the Senator from Alabama would be, if we were to approve it, for the Senate to put itself on record now against an extension of unemployment benefits, whatever happens to the economy or the rate of unemployment, the rest of this legislative year. I just do not think that would be a responsible thing to do, and I say that without any denigration of the motives of the Senator from Alabama.
Second, with respect to countercyclical revenue sharing, this is a policy that is included in the second concurrent resolution for this year. It is a policy that has been tested in both Houses by favorable votes. It is a policy that has been tested in the attempted override of a Presidential veto.
It is going to be one of the elements, I take it, of an effort to revive that vetoed bill, sometime next week, conceivably, or later, here in the Senate. So I think it is premature at this point to make a final decision on countercyclical revenue sharing, and the effect of the Senator's
amendment would be to put us in that position.
Beyond the time limits of the amendment, I, of course, want to reaffirm my own commitment personally to both of these concepts. I think that when we have unemployment of 7 million Americans, we ought to have in place policies other than food stamps and welfare as a means of providing for their day-to-day needs; and the private sector is not providing those opportunities now.
The economy is improving, but all of the projections indicate that we are going to have high unemployment throughout this year, next year, and possibly the following year, and that we ought not to assume that there will be no need for these kinds of programs at that time.
The PRESIDING OFFICER. The Senator's 5 minutes have expired.
Mr. MUSKIE. I yield myself another 5 minutes.
There has been some disillusionment about unemployment compensation, notwithstanding the fact that ever since the program was put into place in the thirties, as a result of the Great Depression, we have recognized it as one of the great economic stabilizers that has saved us from violent swings in the economy for the 30 years since.
Indeed, I think it has cushioned the present recession. I think we would be in a much deeper recession but for that unemployment compensation program. In the present budget, I think it represents about $16.6 billion, given current economic assumptions about unemployment. I think we ought not to abandon or reduce the benefits of a program that has stood us in such good stead, helping to stabilize the economy for more than 30 years. I think it is well tested.
It is interesting that this President, who is reluctant to do anything else about unemployment, is willing to lean heavily on this program as a way of moderating the effects of unemployment on those who are unfortunate enough to be out of work.
Countercyclical revenue sharing is a new idea which, in a very short time, has generated a lot of interest — the kind of countercyclical response which turns on when unemployment goes up and turns off when unemployment goes down. Many of those who evaluate the potential for Government programs to deal with recessions are struck by the innovative possibilities of this one. I have been committed to it for a year. A year ago, may I say to the Senator from Alabama, I could not get the Budget Committee to allocate a nickel for this program, but simply to express some interest in the principle. Before the year was over, we were able to get the House of Representatives to go along with it on an experimental basis. We finally got to this point, and I am just not willing to abandon an issue that I have ridden so hard for the last year. That is my personal viewpoint and feeling.
I think we have clarified the issue. I have discussed it, and the Senator from Alabama has taken some time on it.
Mr. LONG. Mr. President, I would like some time.
Mr. MUSKIE. I yield whatever time I have left to the Senator from Louisiana.
Mr. LONG. Mr. President, I could not vote for the Allen amendment. I would be compelled to vote against my amendment if it were amended as suggested by the Senator from Alabama (Mr. ALLEN) .
I frankly would be happy to vote for the extension of unemployment benefits or for countercyclical revenue sharing, if we could do it within the budget figures which Congress wishes to agree upon. If we cannot do that, then that presents a very difficult matter, and makes for a hard choice in the other direction.
The Senator from Maine has demonstrated how $600 million of the problem with which we on the Finance Committee would be confronted could be handled, with regard to the social security item and the aid to families with dependent children; but he has not shown us how we could handle the $1.4 billion with regard to medical care.
If we did it the way the President would recommend, for example, we could require that the aged and disabled pay 10 percent of their hospital bill in addition to what they are paying now, up to a ceiling. That would increase the amount they pay by $1.4 billion, and I do not think the Senate would like to vote for that.
Someone might find some other ways that we might save something on medicaid and medicare, but if we do, I personally feel that in this area we will not want to do less to provide health care for the poor, for the sick, for the disabled, or for older Americans. If anything, we ought to try to do something more, particularly for those people who are being destroyed by catastrophic illnesses.
Therefore, I cannot support the suggestion that we should have an overall cutback of $1.4 billion on what we would provide for medical care for the aged, the disabled, and the poor of this country.
The PRESIDING OFFICER. The time on the amendment has expired.
Mr. MUSKIE. If all time on the amendment has expired, I can yield the Senator some time on the bill.
Mr. LONG. One minute.
Mr. MUSKIE. I yield the Senator 1 minute on the bill.
Mr. LONG. I would simply think we would wind up with a difficult situation, as I have indicated before, in a trap from which we would have to find some way to extricate ourselves; and my hard experience in this body has been that in that situation it is best not to get in the trap to begin with.
Mr. MUSKIE. Mr. President, I would move to table the Long amendment and the amendment of the Senator from Alabama, but I would like the yeas and nays on that motion. Therefore, I suggest the absence of a quorum.
The PRESIDING OFFICER. On whose time?
Mr. MUSKIE. On the bill.
The PRESIDING OFFICER. The clerk will call the roll.
The second assistant legislative clerk proceeded to call the roll.
Mr. LONG. Does Senator ALLEN have more time?
Mr. MUSKIE. Does the Senator from Alabama have some time remaining?
The PRESIDING OFFICER. Yes. A quorum call is in progress.
Mr. MUSKIE. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. ALLEN. Mr. President, how much time remains?
The PRESIDING OFFICER. The Senator from Alabama has 7 minutes.
Mr. ALLEN. Mr. President, I yield myself 2 minutes.
I realize that the distinguished Senator from Maine is going to move to table the amendment of the Senator from Louisiana, which would carry with it the amendment of the Senator from Alabama.
The thought that I am expressing in this amendment is that if Senator MUSKIE and the Budget Committee say that the programs listed in this sheet can be cut back by $2 billion, and the distinguished Senator from Louisiana says that the extension of unemployment benefits beyond 39 weeks and countercyclical revenue sharing can be cut back by $2 billion, if we would take the best parts of the two proposals and agree with Senator MUSKIE on his reduction and agree with Senator LONG on his reduction, then we would save $2 billion for the public and for the taxpayers of the country.
I recognize that in all likelihood the Long amendment will be tabled, and that would carry with it the amendment of the Senator from Alabama. Still, I wanted to offer the amendment as an alternate route to the mere offset of increases and reductions proposed by the Senator from Louisiana.
His proposal would effect no reduction at all. It would be swapping one program for another program or the money from one program for the money for another program.
My amendment would accept the reductions proposed by Senator MUSKIE and the Committee on the Budget and would also accept the reductions proposed by Senator LONG in his amendment.
I yield back the remainder of my time.
Mr. MUSKIE. Mr. President, I yield briefly on the time of the resolution for a unanimous consent request.
Mr. BIDEN. Mr. President, I ask unanimous consent that Bert Carp of Senator MONDALE' s staff be granted privilege of the floor during debate on this measure.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. LONG. Mr. President, will the Senator yield 30 seconds to me?
Mr. MUSKIE. I yield.
Mr. LONG. Mr. President, I ask unanimous consent that Mr. Larry Woodworth of the staff of the joint committee be granted privileges of the floor.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BELLMON. Mr. President, will the Senator yield to me for a unanimous consent request?
Mr. MUSKIE. I yield.
Mr. BELLMON. Mr. President, I ask unanimous consent that Richard Vodra of Senator SCHWEIKER's staff be granted privileges of the floor.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MUSKIE. Mr. President, I move to table the Long amendment, and the Allen amendment with it, and ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient second.
The yeas and nays were ordered.
The PRESIDING OFFICER. The question is on the motion of the Senator from Maine to table the amendment.
The clerk will call the roll.
The legislative clerk called the roll.
The result was announced — yeas 49, nays 26, as follows :
[Roll call vote tally omitted]
So, the motion to table Mr. LONG'S amendment (No. 1584) was agreed to.
Mr. LONG. Mr. President, although I do not plan to offer an amendment dealing with the problem, there is one aspect in which I believe the revenue figures presented by the Budget Committee are based on an unfortunate assumption and I believe this needs to be understood by the Senate.
The Budget Committee recommends a revenue target for the fiscal year 1977 of $362.4 billion.
The committee has used revenue under existing law of $377.7 billion, which means that they make an allowance for a revenue reduction on a net basis of $15.3 billion. The simple extension of the tax reductions that the Congress has provided through June 30 of this year through fiscal year 1977 will mean a tax reduction of $17.3 billion. What the Budget Committee has in mind is this tax reduction of $17.3 billion, but they would offset $2 billion of this with tax increases elsewhere. This is the way they bring the total down to $15.3 billion.
That was a mistake. We should not be asked to come up with $2 billion of tax increases effective in the fiscal year 1977. It would, of course, be possible to come up with a lesser reduction than the $17.3 billion, but this would mean a tax increase for people beginning the 1st of July of this year. Frankly, I just cannot imagine the Senate or the House adopting legislation which would result in a tax increase at this time. So that leaves us with the necessity of finding $2 billion of additional revenue somewhere which will be collected in the fiscal year 1977.
The House version of the major tax revision which we are currently working on in the Finance Committee generally had its effective dates applicable as of January 1976. The House version of the bill, given this effective date, would have raised $2.76 billion in tax increases in the fiscal year 1977 while losing $1.52 billion in tax decreases. This means that given the House effective dates, the bill would have resulted in a net revenue gain, apart from the general tax reduction, of $1.24 billion. This is slightly over three-quarters of a billion dollars below the total the Budget Committee is asking us to raise in fiscal year 1977. Yet I find hardly anyone — even those who believe in the House revisions — who believe that we should maintain those January 1976 effective dates. This is just too far back to impose retroactive increases. If the House bill provisions are retained but effective dates are delayed 1 year, the bill would result in tax increases of $354 million in the fiscal year 1977 and decreases of $510 million. Please note that instead of being a revenue gain this is a revenue loss of $156 million.
We have enough differences as it is among the Members in trying to determine what are appropriate tax revision measures. Asking us to apply them retroactively, I think, goes too far, and I believe the Senate, when you are actually considering them, will think it goes too far.
The report of the Budget Committee recognizes this problem when on page 8 of its committee report in the last paragraph it states:
Because the termination of the tax expenditure program may involve the choice of an effective date at some time in the future or may be phased out over a number of years, revenue gains from a termination of or reduction in tax expenditures may be much smaller in the year of enactment than they will be when they become fully effective.
It seems to me that this material in the Budget Committee's own report recognizes that they are asking the Finance Committee and, in the last analysis, the Senate, to do something which is exceedingly difficult to do; namely to raise $2 billion and have this impact on revenues in the fiscal year 1977. I do not question the fact that it would be possible to have this revenue impact over the longer run, but I do think it is unrealistic to expect a $2 billion tax increase in the fiscal year 1977. It is most unfortunate that our Budget Committee, because of problems they have in trying to make ends meet, came out with what I think is clearly an unrealistic set of assumptions as to what we can do in the fiscal year 1977. I am just as anxious as anyone to see the budget process work, but I believe the best way to make it work is to be realistic in our assumptions rather than try and kid ourselves that we can raise money when in practice I just do not believe the Senate will be able to do it.
The Senate has a capacity to correct mistakes once it becomes clear that the decision was, in fact, in error. That is the problem with what the Budget Committee has done thus far. There are many ways that the Senate can correct the mistake in the future, and I shall endeavor to show how that can be done at the appropriate time.