April 12, 1976
Page 10483
Mr. MUSKIE. Mr. President, I think my good friend from Oklahoma, the distinguished ranking Republican on the Budget Committee, has made the case. I might emphasize a few points to supplement what he had to say.
First of all, I think most of these issues that are touched upon by the amendment of the distinguished Senator from New York were discussed, debated, and resolved in the Budget Committee. So I do not know that there is any particular usefulness to a continuation of the argument between the Senator from New York and the Senator from Oklahoma and myself on the Senate floor, especially since we seem to be the only ones here.
But let me touch upon the essence of the Buckley amendment.
It would cut $4.5 billion in budget authority and $6.8 billion in outlays from the budget resolution. Those cuts would include CETA jobs, education support, medicaid payments, Postal Service subsidies, supposed savings in income security, cuts in public works and other natural resources, environment and energy programs.
I think the debate on the Senate floor last Friday indicates how tight the Senate budget resolution is with respect to some of those items. The distinguished Senator from Ohio and the distinguished Senator from Rhode Island, for example, are much concerned about the ceilings that the budget resolution imposes on function 300 which, among other things, is the energy function.
I think we had rather extensive debate on the Senate floor on the part of those Senators, arguing that high energy priorities simply could not be accommodated by the overall functional totals in function 300.
Now the Senator from New York urges that we cut even those function totals to a lower figure, by $500 million in outlays and $400 million in budget authority, as I understand it.
But having heard the debate on Friday, I am persuaded even more that the function totals in the budget resolution are a reasonable accommodation between the requests that were made by authorizing committees and the real and justifiable need.
Indeed, it was contemplated as a result of the debate last Friday that it might be necessary for the appropriate committees dealing with the energy questions to come to the floor of the Senate and urge a lifting of the function ceilings in order to accommodate real and essential energy initiatives.
So on the basis of the record we have had on the floor up to this point. I do not think it would be wise to accept this recommendation of the Senator from New York.
With respect to the Postal Service deficit, I concur wholeheartedly with my friend from Oklahoma. It was a temptation for the Budget Committee to follow the route that had been taken by the administration, to force that deficit off budget and thus make our deficit look better. The temptation was even greater because the President had done it and, as a result, made his deficit look better.
But it was our feeling that as to the money involved — and it is $1 billion with respect to the general Postal Service's deficit — it was time we brought that deficit on budget where it could be seen, and so that nobody is fooled.
The Senator from New York argues that keeping things as they are is a way of generating pressure for efficiency. But what I am finding in my State is that under the pressure of this kind of budgeting, the Postal Service is not inaugurating efficiencies but eliminating vital postal services and depriving people in the rural areas of my State — and I take it in the rural areas in other parts of the country — of needed services because the Congress fails to recognize the need for the services by funding the deficit which is generated by their continuation.
If I could believe, as the Senator from New York suggests, that the Postal Service would react to his proposal with a sense of delicate surgery, I might buy his argument.
But it has not produced that kind of result. Instead, the Postal Service has used a hammer to knock out rural post offices, to cut down on postal deliveries, to increase the first class postage rate, and in other ways to put the Postal Service beyond the reach of more and more Americans who depend upon it for basic communication in this free society.
The committee, as I said, debated this issue at length and decided that notwithstanding the temptation to make our deficit look better, that honesty and candor required that we put that Postal Service on the budget where we could see it and take it into account as we consider all of the problems that the Postal Service is generating for so many people in this country.
Mr. LEAHY. Will the Senator yield?
Mr. MUSKIE. I yield.
Mr. LEAHY. Mr. President, I ask unanimous consent that during the deliberations and the votes this afternoon Judith Heffner and Herb Jolovitz, of my office, be granted the privileges of the floor.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. LEAHY. I thank the distinguished Senator from Maine.
Mr. MUSKIE. I thank my good friend.
With respect to function 550, it would seem to me that the RECORD of last Friday of the debate between myself and the distinguished chairman of the Finance Committee suggests that, again, the numbers that the Budget Committee came up with are pretty realistic.
The distinguished Senator from Louisiana made the point that what we were asking for by way of economies in medicaid and medicare were simply unrealistic. The resulting response might simply be a reduction in essential benefits for people with real needs, rather than a savings in administrative costs and other kinds of abuses.
He insisted that in his judgment the Congress would not accept any such result and, therefore, that it was not possible to achieve the kinds of savings that the budget resolution imposes upon function 550 and function 600, the income security function.
Well, we managed to prevail over the protests of the distinguished Senator from Louisiana, but now the Senator from New York would urge an additional $1 billion in savings in the medicaid program below those mandated by the budget resolution before us.
I do not see the Senator from Louisiana in the Chamber, but if he knew we were discussing this I think we would probably be able to hear him from wherever he is in response to this suggestion of the Senator from New York.
So again I think the budget resolution numbers suggest a reasonable accommodation between the view of the Finance Committee and its chairman and the view of the Senator from New York.
I would make the same point with respect to function 600.
The question of CETA jobs, I suspect, involves a fundamental philosophical difference of opinion between the Senator from New York and myself as to the place for public employment at a time of high unemployment in the private sector.
The Senator, as I understand it, comes close to adopting the President's proposal for a phase out of CETA jobs by the beginning of fiscal year 1978. The Budget Committee considered that and rejected it, I think rightly so. As a matter of fact, I think that given the unemployment figures which have been projected in the President's budget as well as by other distinguished economists, one could make a case for more public service jobs than are provided in this resolution. Indeed, I expect we will be listening to an amendment offered later this afternoon on that very point, as well as some others.
There are other items in the Senator's proposal. They do not at this point seem to have sparked extensive debate. So at this point, given the limitation on time, I will reserve the remainder of my time and give the Senator from New York an opportunity to reply to my observations.
Mr. BUCKLEY. I thank the Senator from Maine and the distinguished chairman of the committee, who, incidentally, I believe, did a very fine job in a very difficult process, though we do disagree on different points here and there.
People keep trying, Mr. President, to put items into my mouth or into my plan. I went to some pains, I thought, to suggest that I deliberately kept my figures high enough so there could be alternate strategies with which we could come in and achieve desired levels of reductions so that, among other things, we could create jobs in the only way that will really satisfy the needs of our economy and the desires of the American people, namely, through an appropriate expansion of employment in the private sector where we actually make things, where we deliver services that people want, where we create wealth-producing employment.
The Senator did go to some length about whether or not anything was available in the way of savings in the health delivery sector in function 550. He stated that if the distinguished chairman of the Finance Committee were to come here, he would advise me that my figures were not only low but that the estimates that are incorporated into the Budget Committee's proposal are also on the low side.
I would point out that had we followed the advice and expertise of each chairman of each authorizing committee, we would be adding about $25 billion to what we already propose as a $50 billion deficit.
I believe there is another expert as to what we can anticipate from existing programs, and that is the expertise of the Appropriations Committee. If the distinguished chairman, the Senator from Arkansas, were to come here, he would probably be castigating me for my extravagance in recommending $1.2 billion of outlays in the health field over and above what was recommended by the Appropriations Committee. But I repeat, there are clearly areas, if we will energize ourselves, if we will focus on the problems, where we can go in and exercise control rather than merely accepting philosophically the existence of fraudulent practices where, for example, doctors will conspire with medical laboratories to run up bills for nonexistent tests. As I say, one of the Senate's own committees, the Committee on Aging, has estimated that this alone results in the waste of over $1 billion a year.
With respect to the Post Office, I was not focusing on any particular area. I was suggesting this was one of a number of areas that could be examined. In point of fact, If we take the President's recommended figures and throw in the Post Office, transferring it from where it presently is, being financed through the Federal Financing Bank, we still find that there is a $1 billion gap between what I propose and what the President proposes.
I would say that I do believe we have problems with the Post Office that are not going to be solved by deciding how we finance deficits. They are only going to be solved if we do get at the managerial problems. My own offering in this area has to do with allowing competition to creep in, in the delivery of first class mail, so that we do not find ourselves, in effect, rewarding mismanagement.
With respect to the category 300, in which we have energy plus water resources and so on, we have extraordinary needs in the energy field. I am among those who have been working these last 3 or 4 years in expanding our efforts, in focusing them, and in exploring the alternatives, the options that we will have to have in place before very long if we are going to meet our economic needs.
But I do suggest that it is not necessary or even useful to accept every demand for new research in every field because there are real limitations in what can be done productively in a given year beyond the expenditure of a certain amount on research and development.
I would point out that the President's budget called for a 50 percent increase in the financing for ERDA. Again, I think that we have had in this area as well as in the Corps of Engineers and in the water resources work, ample room to fine tune what we are spending without interrupting any necessary program.
Mr. President, as the Senator from Maine has pointed out, we have discussed this whole area in the Budget Committee, before. I only wish there were Senators here who were not members of the Budget Committee, because I believe that the economic philosophy, the understanding of the macroeconomic consequences of the fiscal philosophy adopted by Congress, is probably the most important single debate we could have.
I would only suggest, based on history,that the macroeconomic suggestions by the Budget Committee have proved far less reliable than those of the minority, and I would hope that our proposed alternative would have the result of reducing interest rates, increasing investment, getting more people into productive jobs, and, in effect, helping to decrease still further the deficit we project as well as the need for public assistance that we provide for.
Mr. TAFT. Mr. President, I wish I could support the distinguished Senator from New York, Senator BUCKLEY, in his efforts to bring about a reduction in Government spending by $6.8 billion. However, this approach must wait for an improved economy to cut income security and health to the extent proposed.
While I have supported modest increases in several budget categories in an attempt to modify priorities somewhat, I still feel that Federal spending is too high, and has been for many years. This amendment, even if it should fail, is an eloquent protest against the deficits, inflations, and subsequent recessions we have been experiencing over the last decade.
A firm commitment is needed from the Senate to the concept of a balanced budget, if not this year, then very soon. The public is not fooled by deficits. They know that taxes will be higher in the future to pay the interest on the increased Government debt. They know that inflation will be made worse. And so I think it is time for the Senate to realize that deficits are not so stimulative as they once may have been when tax rates were lower. Deficits can damage an economic recovery by worsening the disincentive effects on productive labor and investment, indeed on all output, that high tax rates produce.
It is time the Senate brought itself up to date on the effect of taxes and inflation on output and growth. I hope that a sizable vote for this amendment will serve as incentive for the appropriate committees of the Senate to hold hearings in this area. We must back away from higher tax rates and higher Federal spending, for they have gone far beyond the point of diminishing returns, and are well into the area of actual negative impact.
Mr. MOSS. Mr. President, I rise in opposition to the amendment which has been offered by the distinguished Senator from New York to modify the budget resolution. It would cut $4.5 billion in budget authority and $6.8 billion in outlays.
I am in sympathy with the stated objective of the amendment to reduce spending. However, I oppose the amendment because of the nature of the cuts proposed. The amendment would do more than make some apparently simple cuts. Its adoption would impact markedly on the priorities in this resolution, thus changing the resolution significantly. Further, the so-called savings are more apparent than real. For example, the amendment would reduce outlays by $0.5 billion in function 300 — natural resources, environment, and energy.
Specifically, the Senator from New York, makes the point that the Budget Committee has allowed $1.1 billion in budget authority and about $800 million in outlays over the numbers recommended by the President's budget. The Budget Committee did recommend expenditures which exceeded the President's figures in the energy area. But I would point out that the President's budget did not even include funds for the implementation of the Energy Policy and Conservation Act — EPCA — which the Congress enacted and the President signed into law last December. In testimony before the energy task force of the Budget Committee, in response to a question I posed, Mr. Zausner, Deputy Administrator, FEA, indicated that FEA was now "preparing both an amendment to the 1976 budget and a supplemental for 1976 and the 1977 amendment to take account of the EPCA.". Mr. Zausner also said:
When we look at that legislation (EPCA) now, for its budget impacts for 1977, it is clear that it will be appreciably greater than what it is in the 1976 budget.
With regard to the amount of money needed in 1977, Mr. Zausner responded to my question by indicating that the administration would "need (budget) authority perhaps close to $1 billion on top of what is in the 1977 budget." He further indicated that this was perhaps "the major increase" over what is in the President's 1977 budget.
While we have heard for some time that the President was going to submit these supplemental budget requests for the 1976 and 1977 budgets to cover the required funding of EPCA, such requests have not yet been forthcoming. I do not know why. EPCA is the law and it is obvious that it must be supported. And, the President will eventually send up a request which will add to the spending ceiling and the deficit. In the interim, the President's deficit appears smaller.
This resolution provides for future energy needs by funding programs of research, conservation development and demonstration, and supports of energy price and safety regulatory efforts, as I indicated in my statement before the Senate on April 8. Energy should rightfully be accorded high priority. I am for holding down the budget ceiling and for reducing the deficit, but what is proposed by this amendment regarding energy would be penny wise and pound foolish. It is difficult to think of any function in this budget of any greater importance. It is directly tied to the Nation's security.
This amendment also proposes to cut $1 billion from function 400 by withdrawing funds needed to support the Postal Service, and to force the Postal Service to go off budget.
In the absence of funding the full projected 1977 postal deficit of $1 billion, the postal deficit would not be reduced nor disappear. Rather, it would be financed through a combination of off-budget borrowing and other means which tends to mask the realities of the Postal Services' severe financial situation. There is obviously a need for examining Postal Service operations and reaching new solutions. This is certainly a priority matter of the Senate Post Office and Civil Service Committee. But the budget resolution is not the appropriate vehicle to affect substantive action with regard to operations of the Postal Service.
The amendment also proposes a cut in function 500 which would reduce public service employment jobs funding under CETA title VI of the resolution. Obviously, this would add to the unemployment rate which is already too high. The Budget Committee rejected, overwhelming, the President's proposal to eliminate public service jobs in 1977. And this amendment has brought nothing new to light which suggests a need for change in that determination.
The amendment claims "savings" in function 500 for "school consolidation" which presumably means program consolidation. During budget markups, the committee acted to increase funding for education, on the grounds that additional funding was necessary to permit forward funding of vocational education, to meet anticipated supplemental requests for funding the "hold harmless" provisions of impact aid programs, and to fully fund the education for all Handicapped Children Act. Congress had earlier passed that act and then not provided funds to fully support it. Such action seems somewhat hypocritical and does not reflect credibly on the Congress. The resolution also provides increased funds in the education subfunction to accommodate at least in part for increased costs in recent years in elementary and secondary education programs, and in the higher education area to fully fund the basic education opportunity grant programs. The committee does not deal with line items. But it is clear the committee felt education to be a priority need to be supported.
In function 550 — the amendment proposes a reduction of another $1 billion for medicaid. This is in addition to the $0.3 billion reduction the committee recommends in the resolution for medicaid outlays in fiscal 1977. There was much discussion during the committee markup regarding health programs, and the need to demonstrate effective methods of controlling health care costs. The Finance Committee had indicated a desire to develop legislative proposals which would moderate the anticipated increases in reimbursement under medicare/medicaid and encourage program efficiencies. Because health care costs have been a major contributor to the increasing inflation in the last several years, I believe action can and should be taken to improve management and reduce costs without reduction of services provided.
As a member of the Special Committee on Aging, I am aware of abundant evidence of abuse and fraud in both medicare and medicaid programs. I believe the committee's reduction of $.3 billion is proper and fiscally responsible. However, I do not believe that it is realistic to think that we could get another billion dollars in Federal expenditures from this program in 1977. The medicaid program is funded on a cost sharing basis by the States and Federal Government. A reduction of this magnitude would clearly mean that services would have to be reduced drastically, that the numbers served would have to be cut deeply, that the States would have to raise taxes, or some combination of these actions. I support measures to keep the pressure on to reduce costs, but in doing so, we must be realistic and act to achieve savings which are attainable.
In function 600, income security, the amendment proposes a reduction of $.8 billion in budget authority and $2.4 billion in outlays. Let me point out that the Budget Committee recommendations were below the authorizing committees recommendations by $4.9 billion in budget authority and $3.9 billion in outlays. The significance of these cuts is better understood when they are compared with current policy levels which shows nearly a $20 billion cut in budget authority and nearly $5 billion in outlays. As I understand it, the amendment would reduce the temporary extension of unemployment coverage and benefit duration as of March 1977, as the President proposed. The committee clearly rejected that. I am certainly hopeful that the upturn of the economy will continue to intensify, but that is not guaranteed. Therefore, I think it is important to support the resolution which includes sufficient funds in this function so as not to aggravate the problems or impede economic recovery about which we are concerned.
In summary, the nature of the proposals included in this amendment were carefully considered by the committee — not only in studies and extensive hearings on the budget, but also during 4 days of intensive effort in budget markups. The resolution rejected such proposals. This amendment would markedly alter the nature of the budget resolution, would change the priorities inherent in the resolution; and, therefore, I recommend the amendment not be accepted.
The PRESIDING OFFICER. All the time of the Senator from New York has expired. Who yields time?
Mr. MUSKIE. Mr. President, I am prepared to yield back the remainder of my time, but I do not see the sponsor of the next amendment. Let me suggest the absence of a quorum on my time on this amendment, to see if we can get the sponsor of that amendment on the floor.
The PRESIDING OFFICER. The clerk will call the roll.
The second assistant legislative clerk proceeded to call the roll.
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.