April 8, 1976
Page 10161
CONGRESSIONAL BUDGET FOR THE U.S. GOVERNMENT FOR FISCAL YEAR 1977
The Senate continued with the consideration of the concurrent resolution (S. Con. Res. 109) setting forth the congressional budget for the U.S. Government for the fiscal year 1977 — and revising the congressional budget for the transition quarter beginning July 1, 1976.
Mr. MUSKIE.Mr. President, I ask unanimous consent that the following members of the staff of the Committee on the Budget be granted the privilege of the floor during consideration of and votes on the pending business:
Douglas Bennet, John McEvoy, Sid Brown, Arnold Packer, Jim Storey, Dan Twomey, Tom Dine, Faye Hewlett, Nancy Haslinger, Bob Sneed, Charles Flickner, Terry Finn, John Giles, Rodger Schlickeisen, Lauren Walters, Tony Carnevale, Karen Schubeck, Becky Beauregard, Mike West, Ira Tannenbaum, Heather Ross, Hal Gross, Jon Steinberg, Jack Wickes, and Andrew Hamilton.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DOLE. Will the Senator yield?
Mr. MUSKIE. I yield.
Mr. DOLE. Mr. President, I ask unanimous consent that the following members of the staff of the Committee on the Budget be allowed the privilege of the floor during the consideration of and votes on Senate Concurrent Resolution 109:
Robert S. Boyd, Kenneth R. Biederman, Hayden Bryan, Edmond Q. (Ted) Haggard, Franklin Jones, Charles D. McQuillen, Reid Nagle, David Shilling, Frank G. Steindl, William L. Stringer, and John Walker.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MUSKIE. Mr. President, the Senate today begins debate on Senate Concurrent Resolution 109, the first concurrent resolution on the Federal budget for fiscal 1977.
The first concurrent resolution is the most broad ranging measure we will have before us this session. Our debate on it will largely determine America's economic and budgetary priorities for the next year.
Once it is adopted, our adherence to it will demonstrate Congress capacity for self-discipline and leadership.
A year ago, at the beginning of our debate on the very first concurrent resolution on the budget, I said:
The budget and impoundment control act of 1974 is not a book keeping tool. It is a policy instrument that gives us new control over the direction America takes ... If we did not have an instrument for making overall fiscal policy and monetary judgments ... If we did not have a way to total up spending programs before we make commitments rather than after we make them ... Then we would be searching for one.
For Congress must now shape a recovery program that will help pull the United States out of the worst recession in a generation.
I went on to say that the pinch of fiscal realism would frustrate the Members of the Senate as it had the members of the Budget Committee in working out that year's resolution. But I expressed confidence in the ability of this body and the Congress to live up to the promise of the Budget Reform Act.
We did face up to the need for an expansive fiscal policy. Now the economy is recovering.
We did discipline our spending choices,even though it was painful from time to time, and now the budget process, after its first year of operation, is bringing us in close to target.
PRIORITIES FOR FISCAL 1977
As we confront this year's resolution, the Nation's needs are different:
To promote the steady pace of economic recovery — to keep America moving toward full employment and a balanced budget;
To avoid any action, such as an increase in payroll taxes, which would increase the rate of inflation;
To maintain antirecession programs and Federal support for health, education, and other social services at roughly constant levels;
To permit real growth in defense expenditures, so that no other power misreads U.S. intentions to protect the interests of its own people and its allies; and
To accelerate research on new resources of energy and conservation programs and to promote the recovery of existing energy resources.
My colleagues will find all of these priorities reflected in Senate Resolution 109 — in the overall figures and in the figure for each budget function.
Nobody in the Senate is going to like every one of those figures. I doubt if anybody on the Budget Committee liked every one of those figures. I expect some of them may be amended.
That is fine with me. This budget resolution is not Holy Writ. It is the best compromise the Budget Committee can put before the Senate. It is a reasonable compromise which reflects the Nation's priorities as we understand them. But it is neither the beginning nor the end of the fiscal year 1977 budget process. It is simply a reference point to help the Senate express its will.
I am anxious to see the Senate make whatever changes it must to make this resolution its own because I am also anxious to see the Senate accept the discipline of decisions it finally makes.
Let us make our changes now, in a conscious and orderly fashion, so that we can then enforce the result as we pass our separate spending and taxing bills during the rest of this session.
FISCAL POLICY IN FISCAL YEAR 1977
Largely as a result of congressional decisions made in the last session, this year's fiscal situation is far less threatening than last year's. Unemployment and inflation are down, and so is the deficit.
Much of the credit for the Nation's improved economic circumstances must rightly go to the budget Congress adopted last year, which—
Expanded the President's proposed tax reductions;
Altered the administration's priorities, channeling an additional $4.5 billion into antirecession programs; and
Deferred long range programs in favor of short term programs to help stimulate the economy and ease the burden of unemployment.
Continued joblessness. The Nation's jobless rate has fallen from 8.5 to 7.5 percent during the past 12 months.
Despite this progress, however, more jobs must remain a high Federal priority. Since March of last year, for example, some 2.7 million jobs have been created, yet the net drop in unemployment over that time has been only 750,000. One of the by-products of the recovery has obviously been to bring frustrated job seekers back to the labor market. They must not be frustrated again.
By the end of 1977, this budget will produce up to 750,000 more jobs than the President's budget. The committee rejects the President's proposal to terminate present public service employment programs. In addition, we have allowed $1 billion for countercyclical assistance to State and local governments hit hard by recession. Finally, our proposed budget will produce a stronger economy generally than the President's budget, which will add to the number of available jobs.
Inflation has subsided even more dramatically from the double digit rates of 1974.
During the past year, the Labor Department index of consumer prices has risen at a rate of 6.3 percent. During the past quarter the moderation has been even more pronounced, with the rate dropping to 4.4 percent.
This is evidence that we can reduce unemployment further without accelerating inflation. For a long time we believed there was an unavoidable tradeoff between the two.
The committee recognizes that neither problem can be ignored while we attempt to find solutions to the other. As the committee report states:
Avoiding a resurgence of rapid inflation is crucial to economic recovery from high unemployment.
The committee report emphasizes, however, that it would be a "tragic mistake for the Nation to repeat old errors of fiscal and monetary judgment that would choke off the hardwon recovery."
From the evidence presented to the committee, the clear need is to maintain the current steady pace of recovery, while avoiding any actions that would cause an inflationary resurgence.
To achieve these goals the committee recommends the following overall fiscal targets for fiscal year 1977:
Total new budget authority of $454.9 billion;
Total budget outlays of $412.6 billion;
Total revenues of $362.4 billion;
Resulting in a deficit of $50.2 billion; a reduction of one-third from this year's projected deficit; and
A public debt level of $711.5 billion.
FEDERAL OUTLAYS
The committee's recommended overall outlay figure reflects considerable fiscal restraint.
The $412.6 outlay total is $8.8 billion below what would be spent if the same policies and laws contemplated in last year's second concurrent resolution were continued through fiscal year 1977. Had the committee simply taken the same policies, adjusted them for inflation and shifts in various beneficiary groups, the level of outlays now recommended for fiscal year 1977 would have been $421.4 billion.
The committee's recommended overall outlay target is higher than that proposed by the administration chiefly because the Budget Committee decided to maintain programs in employment, health, education, and social services at or near current policy level.
INFLATION
In addition to an overall fiscal restraint, the committee report discourages specific actions which increase prices and the inflation rate in particular sectors.
It recommends, for example, that Federal pay be held to a "cap" during the coming year. It also argues against a reduction in postal or mass transit subsidies, which would have the effect, direct or indirect, of increasing consumer costs. The report's recommended level for health also implies a reduction in that sector's rate of inflation. The administration's proposal to increase taxes for social security and unemployment insurance were also rejected, avoiding an inflationary increase in payroll costs.
REVENUES AND TAX EXPENDITURES
The committee report calls for a total revenue collection during fiscal year 1977 of $362.4 billion. It further recommends that in meeting this revenue total Congress fully extend the temporary tax reductions enacted in December of last year through fiscal year 1977.
The committee report also recommends the establishment of a $2 billion target for net revenue increases through legislation aimed at existing tax expenditures and related provisions.
The committee report views this target as a "first step" toward controlling the growth of tax expenditures currently associated with a projected $105.0 billion total revenue loss during fiscal year 1977. In urging adoption of this target, the committee believes it just as important to control the growth of tax expenditures as to control direct Federal spending.
As I mentioned before, the committee also rejected any additional increase in payroll taxes not already mandated in existing law.
The committee's overall revenue target for fiscal year 1977 rests upon a number of economic assumptions concerning growth in gross national product, profits and personal income. I ask unanimous consent that a set of tables illustrating our revenue calculations, together with underlying economic assumptions, be printed in the RECORD at this point.
I ask unanimous consent that the RECORD also include at this point an allocation of the $362.4 billion revenue total by major source as is required to appear in our report by the Congressional Budget Act.
There being no objection, the tables were ordered to be printed in the RECORD, as follows:
Fiscal year 1977 revenues
Billions
Tax law as of January 1, 1976 $377.7
Extension of December 1975 temporary tax reductions 17.3
Net increase from tax expenditures legislation +2.0
Total 362.4
Economic assumptions underlying revenue estimate
[In billions of dollars]
Calendar year 1976 1977
GNP 1,690 1,885
Profits 160 185
Personal Income 1, 390 1, 640
Allocation of Federal revenues by major source
Billions
Individual income tax $160.9
Corporation income tax 57.8
Social insurance taxes 106.6
Excise taxes 17. 8
Estate and gift taxes 6.0
Customs duties 4.3
Miscellaneous revenues 7.0
Net increase from tax expenditure legislation 2.0
FEDERAL DEFICIT
Mr. MUSKIE. The committee recommends a Federal deficit target for fiscal year 1977 of $50.2 billion. Like the current budget deficit, this figure results entirely from revenue losses and increased Government costs — for such programs as unemployment compensation and food stamps, which are caused by less than full employment. The deficit remains a symptom of our Nation's economic weakness, not its cause.
COMPARED TO FORD DEFICIT
Despite any rhetoric to the contrary, no significant difference exists between the deficit set forth in our committee's report than that proposed by the Ford administration. When put on the same basis — that is, when non-policy differences in accounting and projections are factored out — the difference between the Senate Resolution 109 deficit and the President's budget deficit is less than a billion dollars.
I ask unanimous consent that a table reconciling the two deficit figures be printed in the RECORD at this point.
There being no objection, the table was ordered to be printed in the RECORD, as follows:
[In billions of dollars]
President's January budget deficit $43. 0
Plus:
Increase projected by the President's March budget update 1.6
Adjustment for more accurate estimates of offshore
oil receipts 2. 0
Increased Postal Service funding requirements 1.3
Correction for underestimates of required funding
for existing human resources programs 1. 4
President's adjusted deficit 49. 3
MONETARY ACCOMMODATION
Mr. MUSKIE. The committee's fiscal targets for fiscal year 1977 are consistent with real economic growth rate of 6 percent. This growth rate assumes both continued strength in the private sector and an accommodative monetary policy.
I believe that the Federal Reserve Board will fully cooperate in insuring the Nation's economic recovery because of the fiscal restraint and positive effort to avoid inflation contained in the recommended first concurrent resolution.
Only if we have this coordination between fiscal and monetary policy can we hope to achieve low interest rates, reduced Federal deficits, and an economic recovery without new inflation.
It is the Budget Committee's belief, as expressed in its report, that the Federal Board should strive for a real economic growth rate of at least 6 percent. A real growth rate of 7 percent is possible, however, and would be even more satisfactory.
DEFENSE
Mr. President, the committee's recommendation for the national defense priority — function 950 at page 19 in the report — is that we very nearly adopt the recommendation of the President, the Appropriations Committee, and the Armed Services Committee. This will produce a budget which is roughly $4 billion above current policy in budget authority, and about $1 billion below current policy in outlays. This budget will permit a real growth of $9.6 billion in budget authority for defense programs.
I wish to emphasize, however, that making the outlay savings from current policy and achieving the full measure of the real growth depend upon making $5.4 billion in savings which the President has proposed. A portion of these savings can result from administrative actions, but some will require action by Congress in areas such as pay and compensation and stockpile sales. If Congress does not achieve these savings — and the Budget Committee sees no reason why they cannot be achieved if we are prepared to cooperate with the administration on them — then the amount remaining for new initiatives in defense will be reduced.
PHYSICAL RESOURCES
A major initiative proposed by the Budget Committee in the physical resources area is a substantial increase in energy development and conservation funds over the President's recommendation. Senate Resolution 109 contains roughly $1.1 billion in budget authority and $0.8 billion in outlays over the President's recommendation in function 300 for energy related initiatives.
The committee also added $7 billion in budget authority in the same function for continuation of the Environmental Protection Agency's construction grant programs for sewage treatment facilities.
The committee once again found the administration's estimate for receipts from sale of offshore oil leases to be unreasonably high. We have included a figure of $4 billion under offsetting receipts — function 950 — instead of $6 billion as proposed by the President. The resulting lower estimate for offsetting receipts means a higher deficit figure, but as last year, the committee felt it necessary to put the most honest possible estimates before the Senate.
HUMAN RESOURCES
As far as individual taxpayers are concerned, the committee's most important initiative in the human resources area is its recommendation against the administration's proposed increase in social security and unemployment insurance taxes. While the President's budget included a personal income tax cut in addition to what we have proposed, virtually all of that tax cut would have been offset next January by these proposed payroll tax increases and by increases already enacted to take effect next January.
Nor does the committee generally recommend taking the savings associated with the President's proposals to consolidate a wide range of human resources programs through block grants to State and local governments. Without wishing to prejudice the debate over the desirability of consolidation, we must be concerned about the impact a reduction in Federal support would have on State and local governments hit hard by inflation and caseloads increased by recession.
With regard to unemployment, the committee rejected the President's proposed termination of public service jobs programs, as I mentioned earlier, because there are still over 7 million Americans out of work. For the same reason, the committee allows for a continuation of extended unemployment benefits.
TRANSITION QUARTER
In addition to setting forth budgetary targets for fiscal year 1977, Senate Concurrent Resolution 109 recommends binding fiscal totals for the transition quarter, July 1 through September 30, 1976.
The recommended totals, which reflect current policy levels, are meant to serve as a second concurrent resolution on the transition quarter.
The decision to delay establishing these totals until this time, as my colleagues will recall, represented a compromise with the House of Representatives during the conference on the second concurrent resolution for fiscal year 1976.
At that time it was agreed that Congress would establish a target setting first concurrent resolution on the 3-month period simultaneously with the second concurrent resolution for fiscal year 1977. Adoption of binding totals would be postponed until Congress considered the first concurrent resolution for fiscal year 1977.
The Senate conferees' position had been to set binding totals last December.
I ask unanimous consent that section 3 of Senate Concurrent Resolution 109, which sets forth the transition Quarter budget totals, be printed in the RECORD at this point.
There being no objection, the excerpt was ordered to be printed in the RECORD as follows:
Sec. 3. The Congress hereby determines and declares, in the manner provided in section 310(a) of the Congressional Budget Act of 1974, that for the Transition Quarter beginning on July 1, 1976—
(1) the appropriate level of total budget outlays is $102,200,000,000;
(2) the appropriate level of total new budget authority is $95,800,000,000;
(3) the amount of the deficit in the budget which is appropriate in the light of economic conditions and all other relevant factors is $16,200,000,000;
(4) the recommended level of Federal revenues is $86,000,000,000; and
(5) the appropriate level of the public debt is $646,200,000,000, and the amount by which the temporary statutory limit on such debt should be accordingly increased is $19,200,000,000.
"CROSSWALK"PROCESS
Mr. MUSKIE. As submitted by the President, the Federal budget is divided into 17 functional categories. Each of these brings together programs that share broad policy objectives
NATIONAL DEFENSE, HEALTH, INCOME SECURITY, AND SO FORTH
While these functional subdivisions are helpful in comparing and determining broad budgetary priorities, they are not so useful in terms of internal congressional procedures.
In general, the 17 functional categories do not correspond one-to-one to the various subcommittee jurisdictions. This is the case both with the Appropriations Committee and with other committees which consider spending legislation.
To meet this problem, the Budget Act provides a process for reallocating the spending figures contained in the concurrent resolutions on the basis of committee jurisdiction.
This process, known as "crosswalking," takes effect for the first time this year. The statement of managers accompanying the first concurrent resolution conference report must contain an allocation of the spending totals for each committee holding spending jurisdiction. The committees themselves are responsible for subdividing these amounts among their own subcommittees or programs.
The Budget Act requires that the results of the "crosswalk" procedures be reported by each affected committee as soon as practicable after adoption of the concurrent resolution. Only in this way can the Senate have a clear idea of how spending legislation reaching the floor relates to the concurrent resolution targets.
DEBATE THE FOREST, NOT THE TREES
Let me conclude with a word of advice about debating priorities.
As my Budget Committee colleagues know very well, it is easy to slip into discussion of individual programs or line items in the budget. We all have our favorite programs, and areas of special expertise. It is tempting to forget about the broad priority questions and to try to guarantee that our favorites are "in the budget."
In the Budget Committee, we have successfully avoided a line item approach. We have not wanted to trespass on the programmatic jurisdiction of the authorizing and appropriating committees. And we have tried to concentrate on our priority setting mission.
We do discuss individual programs. We count on the special expertise of all our Members. But generally we do not vote to include or exclude a given program or even an amount for such a program, except in rare cases where the program is of such magnitude, generally in the hundreds of millions of dollars, as to constitute in itself a significant priority.
As this debate goes forward let us not try to create a legislative history which guarantees the funding of this program but not that program. That work will be done in our other committees and on the floor through the summer.
AMENDMENTS
The Budget Act does contemplate the possibility of amendments to this resolution. It is not written in stone. it is the Budget Committee's considered recommendation to the Senate. The purpose of this debate is to allow the Senate to work its will in creation of an appropriate and comprehensive congressional budget.
The Budget Act provides a few important changes in Senate procedure affecting this debate. As you know, in the creation of the Budget Act, we limited debate on this first budget resolution to 50 hours, with no more than 2 hours allocable to each amendment and no more than 1 hour to amendments to amendments, debatable motions or appeals.
There are also a couple of special rules affecting amendments. Amendments must be germane. In addition, amendments will be in order, even to sections of the legislation which have already been amended, as long as those further amendments propose to change a figure or figures then contained in the resolution so as to make the resolution mathematically consistent or to maintain such consistency.
Mr. President, as I have so often since the Budget Committee began its work 18 months ago, I want to commend my fellow committee members for their diligence, for their hard and successful work in a new field, and for their political courage in coming to grips with the conflicting demands that budgeting always entails.
I particularly commend and thank the Senator from Oklahoma (Mr. BELLMON) , whose bipartisan objectivity and support, more than any other single ingredient, have guaranteed our success to date.
So let this debate on national priorities go forward. I am convinced we can achieve a result through compromise of which the Senate can be proud. I am convinced we can achieve a result that will be good for America.
AMENDMENT NO. 1584
(Ordered to be printed and to lie on the table.)
Mr. LONG. Mr. President, I am submitting an amendment to the congressional budget resolution. This amendment will reflect more realistically the actions which the Congress is likely to take and which the Congress will want to take in connection with federally funded health and income security programs. My amendment does not increase Federal outlays or affect the budget deficit projected by the Budget Committee for fiscal year 1977. My amendment reduced by $1.4 billion the necessary level of budget authority for the year.
The budget resolution, as reported by the Senate Budget Committee assumes that legislation will be enacted to reduce benefits under Social Security Act, health and income security programs for needy and aged persons by some $2 billion. I do not believe that this is at all realistic. The Committee on Finance which has jurisdiction over these programs did not, in its March 15 report to the Budget Committee, give that committee any reason to believe that reductions of this magnitude are possible. Certainly it is conceivable that some savings could be effected in provisions which do not seriously undermine our aid to these groups — but there are also many gaps in the protection provided to our needy and aged citizens which the Congress would like to fill if sufficient funds were available. The Finance Committee concluded that there were no grounds for expecting substantial reductions in these programs. We concluded that if some savings can be effected by eliminating low priority provisions, the Congress will want to spend at least as much as is saved to provide some of the many improvements which are desirable in these programs.
The Budget Committee did. not specify what types of cuts it expects the Finance Committee to make in these programs, and I agree that it is not their role to do so. However, the only basis on which I can imagine their having arrived at this recommendation is an assumption that we would enact cuts similar to what the President has proposed in his budget. The President's proposals involve such things as cutting off social security benefits for orphans completing their education, requiring aged and disabled persons to pay more for medical expenses under medicare, or limiting how much doctors or hospitals can be reimbursed for their medicare costs. Now, it may be that the Finance Committee can find ways to improve these programs and to eliminate unnecessary costs over the long run, but I do not believe it is possible to cut out $2 billion in program costs in the coming fiscal year without enacting measures which primarily take benefits away from needy people or which indiscriminately cut payments to doctors or hospitals, and I do not think that Congress wants to or will enact such measures.
In order to stay within the overall fiscal guidelines recommended by the Budget Committee, the amendment I am submitting balances the elimination of these proposed cutbacks by also eliminating some new spending initiatives proposed by the Budget Committee. The resolution, as reported, assumes that legislation will be enacted extending two temporary unemployment programs which are scheduled to expire at or just after the end of this calendar year. These programs were enacted as emergency measures to deal with the particular problems of the recession we have just been through. It was intended when they were enacted that they should phase out and disappear as the levels of unemployment receded. I would hope that the current pattern of declining unemployment rates will continue into next year and that these programs will expire as planned. It does not, in any case, make too much sense to me for us to recommend cutbacks in our permanent programs for needy persons in order to allow room for the extension of temporary programs which may be neither necessary nor appropriate.
My amendment also recommends the elimination of $1 billion allowed by the Budget Committee for a new program of countercyclical aid under the category of community and regional development. I make this proposal with some reluctance. The objective of this program, as I understood it, is to indirectly offset some of the unfortunate effects of the recession by helping hard-pressed local governments to maintain employment and services. While this may be a highly desirable objective, I cannot agree that it is sufficiently desirable to justify funding it by cutting Federal services to needy individuals. I ask unanimous consent to have printed in the RECORD a chart demonstrating how the amendment would work.
There being no objection, the chart was ordered to be printed in the RECORD, as follows:
The Senate Budget Committee report indicates that they assumed the following reductions and increases in the dollar amounts in their recommended first budget resolution:
Reductions
Billion
Social security $0.3
Aid to families with dependent children .3
Medicare 1. 1
Medicaid .3
Total 2. 0
The Long Amendment to the budget resolution would delete both the $2.0 billion in reductions and also the following $2.0 billion in increases:
Increases
Billion
Extension of unemployment benefits beyond 39 weeks+$1.0
Countercyclical revenue sharing + .1.0
Total + 2.0
It would thus not change either the expenditure total or the deficit figure in the Budget Committee recommendation.
Mr. LONG. Mr. President, this does not change the overall budget figure, but I believe it makes more possible achieving the overall objectives of the budget resolution. I do not believe that Congress is going to vote to reduce social security, aid to families with dependent children, medicare, and medicaid expenditures by $2 billion. Recognizing that that is not realistic at all, it seems to me that it would be far more practical not to plan to do that and to make reductions elsewhere in that budget resolution.
I ask unanimous consent that the amendment be printed in the RECORD.
There being no objection, the amendment was ordered to be printed in the RECORD, as follows:
AMENDMENT No. 1584
In clause (2) of section 1, strike out "$454,900,000,000" and insert in lieu thereof "$453,500,000,000";
In clause (7) (A) of section 2, strike out "$7,400,000,000" and insert in lieu thereof "$6,400,000,000";
In clause (7) (B) of section 2, strike out "$7,600,000,000"and insert in lieu thereof "$6,600,000,000";
In clause (9) (A) of section 2, strike out "$40,400,000,000" and insert in lieu thereof "$40,700,000,000";
In clause (9) (B) of section 2, strike out "$37,600,000,000" and insert in lieu thereof "$39,000,000,000";
In clause (10) (A) of section 2, strike out "$163,700,000,000" and insert in lieu thereof "$163,000,000,000"; and
In clause (10) (B) of section 2, strike out "$140,100,000,000" and insert in lieu thereof "$139,700,000,000".
Mr. MUSKIE. Mr. President, I yield to my good friend, the distinguished Senator from Kansas (Mr. DOLE), who is representing the minority this evening, and then to the distinguished Senator from Utah (Mr. MOSS) who has been such a staunch supporter in the Committee on the Budget throughout this past year and during the consideration of this concurrent resolution.
Mr. DOLE. Mr. President, the ranking Republican member, the distinguished Senator from Oklahoma (Mr. BELLMON) is unavoidably. out of town and will make his opening remarks tomorrow.
Mr. President, the Senator from Kansas will support the budget resolution as reported by the Budget Committee. I would point out several features of that resolution which make it worthy of the support of my colleagues in the Senate.
First, total outlays recommended by the Budget Committee are $412.6 billion. Not counting changes in allowances and undistributed offsetting receipts, this is $9.4 billion less than estimated current policy outlays.
In all but two functional categories of the budget — natural resources, energy, and environment — 300 — and education, training, employment, and social services — 500 — recommended outlays are equal to or less than current policy. Even in the national defense function outlays are reduced because the assumed savings from manpower and efficiency measures more than offset first year outlays for increased weapons procurement.
If adopted and followed, these targets would exert a good deal of pressure on Congress to find ways to provide important Government services more efficiently, at less cost to the taxpayer. The Budget Committee has taken seriously its responsibility to impose real but realistic discipline on the total Federal budget.
The Senator from Kansas is one of many who would like to see greater restraint on Government spending. There are, however, at least two related factors which limit the degree of budgetary restraint that can reasonably be asked for in fiscal year 1977. First, this will be only the second year of operation of this process. As a Budget Committee member, I realize that some time is required for the Congress to become accustomed to and fully responsive to the operation of and limitations imposed by this new budget process.
A second and related reason is that sufficiently numerous and well-documented options for decreasing spending in all functional areas of the budget were not available to the Budget Committee.
The Budget Committee is understandably reluctant to recommend — implicitly — in its budget targets actions of a kind that have not been contemplated and received at least preliminary consideration by the jurisdictional committees of Congress. In preparation for the first concurrent resolution for fiscal year 1977, the March 15 reports to the Budget Committee by the authorizing committees presented options and recommendations which involved, with very few exceptions, spending above the current policy level. Options for reducing spending were forthcoming almost exclusively from the administration in its budget recommendations. Both for political reasons and for lack of opportunity or inclination, the appropriate congressional committees did not fully examine these proposals. The ability of the Budget Committee to act on these budget reducing recommendations was therefore severely limited.
The Appropriations Committee provided some options for budget restraints. Those recommendations could cover only those programs for which funds are subject to the appropriations process, however. This excludes programs which involve a legal entitlement to benefits from the Government, for which spending is therefore "uncontrollable" under existing law, and which are subject only to the control of the authorizing committees.
The effectiveness of the budget process will be greatly enhanced if this imbalance is redressed. This will require conscientious and thorough evaluation of all existing programs. Several bills have been introduced which would require such periodic reexamination. Congress must carefully consider these proposals and subsequently enact strong oversight requirements if the budgetary control potential of the budget process is to be fully realized.
Second, the committee's recommendation of a $50.2 billion budget deficit represents significant progress toward Federal budget balance. At the same time, it represents a prudently moderate fiscal policy.
The budget deficit is still much larger than most of my colleagues find acceptable. I share that concern. But a budget deficit is virtually unavoidable in the event of a serious recession, and we are still a considerable distance from full economic recovery. I would point out that in December the Senate approved a budget deficit of $75 billion for fiscal year 1976. We did so with the expectation that allowing such a deficit would cushion the effects of recession and encourage economic recovery. We did so in anticipation of approving a reduced deficit for the next fiscal year. The $50.2 billion deficit recommended by the Budget Committee represents a significant and responsible reduction in the Federal deficit. The economy is clearly on the road to full recovery and the budget is on track toward budget balance. Based on the trends begun last year and reinforced by this budget, I believe that the dual goals of full economic recovery and a balanced budget are attainable no later than fiscal year 1977.
Third, the Budget Committee's recommendation represents admirable resistance to the temptation to try to push economic recovery too fast. The national unemployment rate will still be higher than anyone likes in 1977. The Budget Committee gave consideration to a variety of proposals to eliminate this problem more quickly. It has allowed for and recommended continuation of public service employment at the current policy level. It has allowed for countercyclical fiscal assistance to hard-pressed States and localities. But it has not recommended sweeping public works or public service employment programs. I concur strongly in the wisdom of this judgment. In a variety of ways, such programs raise more problems than they solve. They tend to trade some gains now for a lot of problems later. I concur in the judgment implicit in the committee's recommendation to rely mainly on the private sector — which is now recovering strongly — for productive and permanent jobs for those now unemployed. I would urge that private firms be assisted in this effort by means of the unemployment tax credit proposed in the Employment Assistance Act introduced by the Senator from Kansas last week.
Fourth, I support the expression of national priorities represented by the distribution of spending within the functional categories. One can debate at length and to no avail the relative military strengths of the United States and the Soviet Union. It is clear, however, that while the United States has been decreasing its efforts in the area of national defense, the Soviets have redoubled theirs. Now is an appropriate time to moderate this trend. I am convinced that our military experts have presented us with a proposal which requests no more than is needed to maintain a strong nuclear deterrent and a flexible conventional response capability that allows a high nuclear threshold. The substantial increase in budget authority is needed in order to procure the military equipment that is essential to this capability in the coming years. I am similarly convinced that there is nowhere in this defense budget any allowance for so-called "cut insurance."
The other budget categories for which the committee has recommended spending above current policy are natural resources, energy, and environment — 300, and education, training, employment, and social services — 500. These increases reflect our Nation's need for adequate and secure supplies of energy and economic circumstances that warrant emphasis on a better utilization of our labor resources.
The Senator from Kansas will give careful consideration to any amendments that are proposed to the committee's recommended budget targets. I would expect to oppose, however, any substantial increase in total outlays. If any of my colleagues feel that more spending should be allocated to certain functions, I urge him to propose a corresponding decrease in some other functions. If the committee has misjudged the Nation's priorities, then perhaps spending should be shifted among the budget functions. But I am convinced that the budget total should exert a good measure of budgetary restraint and will therefore be reluctant to vote for any amendment to increase the total of Government spending for fiscal year 1977.
I would remind my colleagues that the budget resolution does not set program-by-program spending amounts.
The process by which the Budget Committee arrives at its target recommendations for functional categories is subject to some misunderstanding. The discussion of programs contained within a function — with regard to purposes, effectiveness, and costs — is an essential aid to committee members in determining what total budget commitment to that function is appropriate in light of the priorities they wish to reflect. However, the specifics of those program discussions are in no way binding on committee members or on the Senate. Subsequent to adoption of the budget resolution it will at times be appropriate for Members to point out that in light of the established target for the relevant budget functions, approval of legislation being considered would require either offsetting cost reductions in subsequent legislation or exceeding those targets. It is not appropriate, however, to maintain that the target recommended by the Budget Committee and subsequently adopted or amended by Congress, together with the attendant discussion and debate, mandates or requires a specific limit on funding for that individual legislation.
Therefore, the spending targets set in this budget resolution will not preclude funding for any specific programs or legislation.
Similarly, amendments to those recommended targets will not assure funding amounts for any specific programs or legislation. Rather, it is the function of the budget resolution to provide guidance as to the total cost of all legislative actions within functions and for the entire budget.
The Senator from Kansas urges his colleagues to approve a budget resolution whose guidance provides a reasonable degree of budgetary restraint and discipline. I believe that the targets recommended by the Budget Committee constitute such a budget.