September 24, 1976
Page 32359
SUNSET LEGISLATION
Mr. MUSKIE. Mr. President, I would like to thank and congratulate the junior Senator from Ohio (Mr. GLENN) for the hard work and thoughtful attention given to the sunset legislation.
Senator GLENN was one of the original coauthors of the bill and has helped guide it out of subcommittee and full committee and on to the Senate Calendar.
I am deeply appreciative of Senator GLENN's efforts and I ask unanimous consent that his excellent statement on the sunset legislation be printed for the RECORD.
There being no objection, the statement was ordered to be printed in the RECORD, as follows:
STATEMENT OF SENATOR GLENN ON THE SUNSET BILL
As a coauthor with Senator Muskie, of S. 2925, the Government Economy and Spending Reform Act of 1976, I am especially pleased to see this tremendously significant legislation make the progress that it has during this session of Congress. If it is not enacted by the end of the 94th Congress, then it is absolutely imperative that it be one of the first items on the agenda for the next Congress.
I believe that this legislation meets some. of the demands of the American people with respect to the way in which our government operates. What our citizens are demanding is an efficient, responsive, and competent Government, one that delivers what it promises, one that makes its decisions humanely, clearly, and understandably, and that does not proliferate and continually grow minus any rational scheme.
I believe that the Government Economy and Spending Reform Act of 1976 has the potential of coupling itself with the Congressional Budget Act to serve as a thoroughly effective mechanism by which the Congress may get a better handle on money spent by the Federal Government.
The once ever-expanding pie of Federal expenditure has begun to reach its limits. Within that limitation, competition for program priority and preference will be severe. That competition must be rational, sane, and substantive. The Government Economy and Spending Reform Act of 1976 provides a framework for serious evaluation of our programs and our spending. Basically and fundamentally, the bill requires that congressional committees take a hard look at programs under their jurisdiction and report, among other things:
First, whether they are, indeed, working as Congress intended;
Second, whether the program is duplicative of others; and
Third, the impact the program has on the national economy.
In other words, we are asking that congressional committees assume their oversight function with increased vigor and vitality and with more quantitative stringency. With the exception of programs to which individuals make payments to the Federal Government in expectation of later compensation — social security, railroad retirement, civil service retirement, medicare, et cetera — all Government programs would have to be reauthorized after stringent review every 5 years.
Additionally, I have worked to extend the sunset concept to what are commonly known as "tax expenditures" — tax incentives. To my mind this is essential if we are to effectively achieve the objectives of the bill, for example to get a firm hold on Federal spending.
It would seem to follow that if the termination and reauthorization process of the bill is confined to spending programs alone, we will leave a substantial portion of our job undone. The Congress recognized this basic problem in 1974 by including in the Congressional Budget Act the tax, as well as the spending side of the equation.
My proposal would require that each Federal tax expenditure be investigated systematically to determine whether it has been effective, whether it is being used for the purposes not originally intended by Congress, and to what extent revenue is being lost through the operation of the provision. Today there are scores of tax incentives built into the Federal income tax system. All were created with a specific goal in mind.
Some were intended to stimulate or move the economy in certain directions; others were motivated by social concerns and were intended to encourage individuals and businesses to move toward various national goals. Yet, whatever their original purposes, the fact remains that some of these tax incentives have grown to the point where they are tax loopholes, going far beyond their original purposes and eagerly sought as a means of avoiding taxes. The result has been that the revenue loss due to these tax expenditures has mounted each year to the point where, in fiscal year, 1977, it is estimated that they will approximate the amount our nation spends for defense.
Over the past years the growth of tax expenditures has in fact been at a faster rate than the growth of direct expenditures. The Joint Committee on Internal Revenue Taxation has recently estimated that in the decade from 1967 to 1977, Federal spending has climbed by 146 percent from $158 billion to the $394 billion now proposed by President Ford. In the same period, however, tax expenditures have mushroomed by 176 percent to an estimated $101 billion in fiscal year 1977 from a level of $36 billion in fiscal year 1967.
This upward trend in revenue loss gives no indication of abating. It is certainly disturbing that there are no clear limitations on how much each tax expenditure provision could ultimately cost the Treasury. Presently there is insufficient analysis of each tax expenditure to determine whether some have grown out of control and should be eliminated because the original purposes have been obscured. The limited success of efforts toward tax reform reflect how difficult it is to revoke or even modify tax expenditure provisions once they take effect and become entrenched. It is my hope that this proposal will greatly facilitate such revisions of the tax code whenever circumstances warrant them.
I strongly support this bill and I am happy to be a principal cosponsor of it. I know that we must clean up and improve our Government. Only by eliminating dead weight, inoperative, wasteful and inefficient programs can we make available the resources needed to adopt fresh, innovative, and exciting new solutions to our pressing problems of poverty, discrimination, urban decay, pollution and so on. This bill is perhaps a small procedural step that will free us from so much built-in failure, that will help restore our people's confidence in Government and will help us along the road to really moving to cure the ills of the Nation.