May 12, 1976
Page 13667
Mr. MUSKIE. Mr. President, I thank my good friend the Senator from Utah for his personal references and for the superb job he did in handling this assignment, with very little notice and with excellent cooperation from his colleagues on the Senate committee on both sides of the aisle, including Senator BELLMON.
Today, the Senate considers the fiscal year 1977 Federal budget concluded last Thursday by the House-Senate conference.
Senate action on this first concurrent resolution for fiscal year 1977 is an important milestone in the new congressional budget process initiated last year. Our adoption and successful implementation of this budget plan will provide the strongest evidence so far that Congress is at long last asserting its full constitutional control over the Federal purse strings.
This new congressional budget control is good news for every taxpayer. And this budget, which will produce more jobs with less inflation than the President's original January proposal, is good news for every wage earning family in America.
The budget set forth in the first concurrent resolution provides a fiscal policy which will create 1 million more jobs by the end of next year than the President's January budget proposal would have meant. Congress strong initiative on jobs is particularly welcome to the people of Maine, where unemployment remains in the range of 9 percent, with some 40,000 people still out of work.
Key elements of this job producing strategy include:
Full extension of the tax reduction enacted in 1975;
Additional funding for such programs as Federal aid to hard hit States and localities, public service and public works employment.
Overall, the effect of such policies will be to reduce the Nation's jobless rate to 6 percent by the end of next year. Our economists estimate that congressional adoption of the administration's budget proposals would keep unemployment in the 7 percent range through that period.
Of equal importance, these new jobs will not mean more inflation for the American consumer — just the reverse. The budget now before you offers the American consumer real hope that the age old tradeoff between jobs and price stability need not be inevitable.
Two clear cut cases are the plan's rejection of the President's proposal for increasing payroll and unemployment insurance taxes. Both would have added directly to the cost of labor and the prices consumers pay for goods and services. At the same time, they would have served to reduce the number of available jobs.
In achieving these overall fiscal objectives of continued economic recovery without new inflation, the budget plan allocates Federal resources where they are most urgently needed: To those areas which contribute most directly to the Nation's essential security, both military and economic. It allocates some $100.8 billion in outlays for national defense, the largest peacetime level in history. At the same time, it maintains Federal support for programs in health, education, and other social services at current real levels. It provides needed new funds for energy research.
To insure that these high priority needs are met within the framework of tight fiscal control, the budget plan mandates a series of cost saving initiatives affecting Federal programs across the board. Target areas for such program efficiencies include: defense, health, and welfare programs.
Key features of the overall fiscal year 1977 budget plan include:
A fiscal strategy designed to produce an additional 1 million jobs;
Full extension of the tax reductions enacted in 1975;
Additional Federal funding of programs targeted to increase available job opportunities;
Rejection of the President's proposal to increase payroll and unemployment insurance taxes;
The sum of $2 billion in new Federal revenues to be derived through legislation directed at "tax expenditures" and related provisions;
A level of Federal expenditures $8 billion below that which would result from a continuation of congressional budget policies adopted last year — adjusted for inflation and other factors; and
Cost economies in both defense and non-defense programs, including a 5 percent cap on Federal salary increases.
Our success in implementing important cost savings, as well as the overall budget plan, will determine the effectiveness of the new budget control process. Only if the executive branch meets its constitutional responsibility to "execute" these policy objectives can they be achieved.
But Congress must exercise restraint as well. Spending bills in excess of the budget targets will raise the deficit. Authorizations which put pressure on the Appropriations Committee to exceed the targets will equally jeopardize our success with the budget.
The Budget Committee and its chairman will be examining both the spending and authorization bills closely throughout the rest of the session for compliance with the targets in the budget resolution. We will not hesitate to make very clear to the Senate when those targets are being jeopardized by either spending or authorization bills. We will not hesitate to oppose those bills, amendments, and even conference reports which pose a threat to these targets.
If the new Federal budget process prescribed by the Budget Act is to achieve the fiscal discipline that we must have to balance the budget and, within a balanced budget, to address our national priorities in a sensible fashion, we must hold the line on the budget adopted. I pledge you the Budget Committee will do so.
I conclude by adding my warmest personal congratulations to Senator MOSS and Senator BELLMON and to my colleagues, who, I am sure, together managed to end this conference much more quickly than it would have ended if I had participated in it.