June 17, 1976
Page 18846
JURISDICTIONAL DEBATE
The PRESIDING OFFICER. The hour of 3 p.m. having arrived, pursuant to the previous order, the Senate will now commence debating the so-called jurisdictional questions.
Mr. LONG. Mr. President, I yield to the Senator from Connecticut.
Mr. RIBICOFF. Mr. President, I ask unanimous consent that Mr. Alan Schick of the Congressional Research Service have the privilege of the floor during discussion of this issue.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. LONG. Mr. President, I believe it could help all Senators understand what we are talking about when we discuss the jurisdictional problem in regard to the Committee on Finance and the Committee on the Budget if we had a blackboard where the figures could all be put down and all Senators could look at the same figure and understand what we are talking about. We do business that way in the Committee on Finance all the time. I ask unanimous consent that our staff be instructed to locate a blackboard and a piece of white chalk so that we can write down some figures which Senators can look at while we are talking.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. LONG. Mr. President, I believe that those of us on the Committee on Finance have spelled out our view about the budget problem in that Senate Concurrent Resolution 109 states that:
First, the recommended level of Federal revenues is $362.5 billion and second, the amount by which the aggregate level of Federal revenues should be decreased is $15.3 billion. It seems to me that the Committee on the Budget did exactly what it should have done insofar as that resolution is concerned. They gave us a figure — $15.3 billion — for revenue reductions for fiscal year 1977. As I read the budget language and the budget law and the legislative history, in which I had a chance to participate, it pretty well dictates that the budget process is a squeezing out process and that the Budget Committee is to assign to each committee and for each category an overall figure.
Then each committee is expected to live within that figure. Now, we on the Committee on Finance had the opportunity to play a part in arriving at the figure that was to be chosen. At the beginning of this process, the Budget Committee invited us to state to the Budget Committee how much revenue, either in terms of increases or reductions, we thought would be appropriate in the year. We simply took the view that in view of the fact that there were $17.3 billion of tax reductions that would expire July 1, if we were permitted $17.3 billion latitude, any recommendations that we had to make on tax increases or tax decreases could be fitted within the $17.3 billion.
After the Committee on the Budget got through with its deliberations, it reduced that figure to $15.3 billion. As far as we on the Committee on Finance were concerned, we were prepared to live within the $15.3 billion. It seems to me that it is very clear, and the legislative history makes it clear, that within that $15.3 billion, the Committee on Finance has the discretion to make the detailed decisions. We had the right either to recommend a lesser amount of tax cuts or we had the right to recommend some tax increases, which would make it possible to have further tax cuts, or we had the right to do some of both — to recommend some larger cuts in some areas, some additional revenue in other areas, to mix the factors up as our best judgment would dictate — so long as we came out with a figure that was about a $15.3 billion revenue reduction.
That is what we have done, Mr. President. I am not here to say that anybody need agree with the particular mix that we arrived at. We could arrive at it however we wanted to arrive at it, I always thought, because we were the ones who were supposed to make the nitty-gritty decisions — the small decisions. The Budget Committee function was to make the overall decision — and a very important one, I must say — as to the overall amount of money that was available to the Committee on Finance for recommendations with regard to tax cuts or tax increases, all of which would have to fit within the overall figure.
Some of the things we have done do not meet with the agreement of some Senators, but the result is the collective judgment by its members of what the Finance Committee ought to do, and that is all we ought to be recommending.
I do not quarrel with the right of any Senator to disagree with that. I do contend, and I would like to get this settled, that we have the right to recommend it, that we are within both the letter and the spirit of Senate Concurrent Resolution 109, and that that settles that part of it. If the Committee on. the Budget or any member of it does not agree with how we recommended it, it seems to me that it is for each individual Senator to suggest how he thinks it should be done. I do not think that we should be arguingabout whether the Committee on Finance has respected both the letter and the spirit of Senate Concurrent Resolution. 109, because in my judgment, we have fully complied with it. I would be pleased to have the views of the chairman of the Committee on the Budget on this subject.
Mr. PERCY. Mr. President, will the Senator yield for a unanimous consent request?
Mr. MUSKIE. Yes, of course.
Mr. PERCY. Mr. President, I ask unanimous consent that David Kapnich and Hannah McCornack have the privilege of the floor during further proceedings on H.R. 10612.
The PRESIDING OFFICER (Mr. WEICKER) . Without objection, it is so ordered.
Mr. MUSKIE. Mr. President, I ask unanimous consent that Mike Joy and Bert Carp have the privilege of the floor during this discussion.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MUSKIE. Mr. President, I take it there was an interesting debate on the floor of the Senate last night. I regret that I was not here. There probably was a better audience then than we will get this afternoon. I take it, also, that the debate generated considerable heat and that I appear to have been a prime cause for a lot of that heat.
Well, I was not here last, evening because, months ago, I had promised the students of the senior class at Presque Isle High School in northern Maine that I would speak to them this morning at their commencement exercises. Normally, at this time of year, since I left at 5 o'clock yesterday afternoon and planned to arrive at 1:30 this afternoon, keeping that promise would not have disrupted the Senate schedule or interfered with the flow of legislation. Unfortunately, it did in this case, apparently, but in any case, I still would have kept my promise.
As I read the debate, as I did while traveling from Boston to Washington this afternoon, I was reminded of an experience I had 2 or 3 weeks ago in Maine. I was visiting an old friend who is in a nursing home, very ill. While I was visiting her, I received a message that another patient wanted to see me. So I stopped by his room and when I walked in, he looked like a thousand years old. He was completely wasted away. I suspect he did not weigh more than 70 or 80 pounds.
But when I approached him more closely I saw there was a very definite sparkle in his eye and vitality in his intellectual processes. He told me he was 94 years old. He said:
There are just two things I wanted to say to you, Senator. First, I have always voted for you, and I expect to vote for you next November.
Which, I thought, was the height of optimism, given his condition. But the second thing he said was:
If you hadn't talked so damn much, you might be President.
[Laughter.]
That was my reaction to the Senate debate last night, and I am sorry I was not here. [Laughter]
Last night, I take it, the Senate opened debate on the pending tax measure by discussing at length the relationship between the bill and the Congressional budget. That debate shed some light on the concerns of all committees, not just the Committee on Finance and the Committee on the Budget, about their roles and responsibilities under the rules of the Senate as they may have been amended by the Congressional Budget Act.
But the debate also reflected considerable misunderstanding of the role and the responsibility of the Budget Committee. So, at the outset, Mr. President, I want to make as clear a statement as I can of the Budget Committee's responsibility as I understand it in this matter, and the relationship between this bill and the congressional budget.
First of all, the Committee on Finance is clearly within its jurisdiction in reporting this bill.
Second, whether this bill complies with the congressional budget is to be determined by the Senate as a whole, not by the Budget Committee and not by the Finance Committee.
Third, the Budget Committee's responsibility requires us to call the Senate's attention in making its decision on the disparity between the bill and the congressional budget. That budget called for a tax cut for all of fiscal 1977. But this bill will result in a tax increase at the rate of $10 billion a year.
That budget called for a $2 billion reduction
Mr. LONG. Mr. President, will the Senator yield at that point?
Mr. MUSKIE. If I might finish my statement, I will yield at the end. I noted in the RECORD this morning that the Senator was allowed to make his whole statement and then there was a very interesting colloquy, and I expect if I am allowed to do the same it will be followed by an interesting colloquy. [Laughter.]
That budget called for a $2 billion reduction in tax expenditures to reduce the deficit.
This bill raises only half that amount, and even that $1 billion disappears next year.
That budget called for these tax adjustments in order to continue our march toward economic recovery and a balanced budget at the earliest possible date. This bill pursues a different economic plan.
But no one, Mr. President — I emphasize this, no one — is challenging the Finance Committee's jurisdiction to have reported this bill. No one connected with me is accusing the Finance Committee of bad faith in doing its duty as it sees it. As the letter Senator BELLMON and I sent to all Senators yesterday clearly stated, that committee has done its duty as it saw it. That a significant number of Finance Committee members have joined together to offer amendments to make the committee bill conform more closely to the congressional budget does not in any way impugn the actions or the motives of the other members of the Finance Committee who reported this bill. I want to make that clear.
May I make it perfectly clear that the Finance Committee bill offered to the Senate today is not a flimflam in this Senator's judgment, as some newspapers have alleged. Rather, as the distinguished majority leader pointed out last night, the Finance Committee has laid before the Senate a tax proposal which was that committee's choice to report.
The Budget Committee does not write the tax bill, and the Finance Committee does not write the congressional budget. The Senate and the Congress, in the last analysis, do both. So now it is up to the Senate to choose between that tax bill and the congressional budget Congress adopted just last month, for that is the Senate's choice.
No one on the Finance Committee asserts, unless I have missed something, that this bill meets the policy choices which underlie the budget resolution. In fact, some Senators seem to think Congress had nothing particularly in mind at all in adopting the budget.
Amendments will be offered by members of the Finance Committee and others who bring the bill more clearly into line with the policy assumptions of the congressional budget. The Senate, not the Finance Committee, not the Budget Committee, will determine which of those amendments are adopted.
The Senate will decide whether to uphold the assumptions of the congressional budget. What were those assumptions on the revenue side? The revenue side of the congressional budget, as stated in the Budget Committee reports and in debate in both Houses and in the conference report, was based on two simple assumptions: one, an extension of the 1975 tax reduction to at least fiscal 1977; and, two, reduction of tax expenditures by $2 billion to help pay for that tax cut and restrain the deficit.
This bill, in all of its 1,500 pages, achieves neither of these simple purposes, so the Senate must decide.
Yet the members of the Finance Committee who favor this bill will argue, as they already have, that this bill meets the requirements of the budget resolution. They will argue, as they already have, that since they have matched the numerical totals of the budget resolution, they have upheld the intent of the congressional budget. They will argue, as they already have, that for the Senate to decide that this bill must execute the revenue assumptions of that budget, and not just some numbers in it, is an intrusion on their jurisdiction.
Much was made in this connection last night of a colloquy between Senator PACKWOOD and myself during the debate on the congressional budget this spring. In that dialog I affirmed and supported the right of the Finance Committee, as I do now again, to report a tax bill which does not execute the policy of the congressional budget. Neither the congressional budget nor the Budget Act and, certainly, not the Budget Committee, can compel the Finance Committee to report a bill which complies with the policy of the congressional budget.
Neither the Budget Act nor the Budget Committee limits the prerogatives of the Finance Committee to shape a tax bill which pursues different assumptions than those assumed in the congressional budget.
But, as I noted in the last portion of my colloquy with Senator PACKWOOD, which Senator LONG has circulated in his letter to you yesterday, the Senate is the final arbiter of which shall survive, the tax bill or the congressional budget.
(At this point, Mr. WEICKER assumed the Chair.)
The Finance Committee has exercised its prerogative and reported this bill.
Now it is for the committee to defend it.
The Senate must choose between this bill and the congressional budget.
Where the congressional budget proposed an extension of last year's tax cut at least through fiscal 1977, this bill proposes that taxes increase — starting next July 1 — by $10 billion a year instead.
Where the congressional budget propose paying for a portion of that tax cut by cutting $2 billion from the $105 billion in existing tax preferences, this bill cuts only $1 billion, and even that savings disappears next year.
Where the congressional budget proposed putting the tax cut for a full year in the hands of the consumer, this bill cuts those tax cuts off 3 months early to finance existing and newly-created tax preferences.
Now what is the Budget Committee's role and responsibility in all of this? Have we no responsibility for the half of the budget which is revenues? Are we supposed to meet each March to propose a congressional budget and then retire to the cloakroom until the fall, when it is too late to advise the Senate of the implications of its tax and spending decisions? And then pop back out like some unwelcome jack-in-the-box each fall to shout, "surprise ! You've blown the budget."
Hardly.
No, Mr. President, our responsibility is to shape a budget — report it — help enact it and then help enforce it. Where Congress wants to change that budget. it can, as in this case. But changes should be conscious and purposeful. It is the Budget Committee's job to make sure they are conscious and purposeful.
It may not be pleasant to hear what the Budget Committee has to say, but so long as I am chairman of it, it will be said.
And who, after all, is the Budget Committee? We did not recently land from Mars on the Capitol Plaza and invade the Senate. Ours is a committee of other committees. Our membership includes senior representatives from virtually every standing committee in the Senate, including two from the Committee on Finance.
We do not duplicate these other committee's work. We do not make line item decisions. We have proved we can work with other committees to make the budget process work.
Where amendments to appropriations bills have threatened budget targets, we have stood shoulder-to-shoulder with the members of the Appropriations Committee to oppose and defeat those spending proposals.
When committees — as the Armed Services Committee is now — are seeking to hold the budget line in conference with the House, we go to their aid in every way we can.
When Senator LONG fashioned the compromise language which persuaded the President to sign the once-vetoed tax cut bill last fall, we helped carry the load of debate against some of his own committee members to persuade the Senate to accept the Long solution. Because that tax bill was part of the congressional budget.
But if this debate is not a contest, Mr. President, between committees, what does it boil down to?
The Budget Committee has devoted a few brief — but important — lines in the congressional budget report this year to the meaning of the revenue figure in the budget resolution. Six lines which call for a continued tax cut for all Americans through fiscal 1977, paid for in part by a modest reduction in tax expenditures.
That is clearly a policy assumption stated in the report of the committee.
Senator LONG says those words are meaningless. That only the numbers in the resolution count.
I fail to understand how he can speak of the letter and the spirit of the Budget Act if only the numbers count.
The numbers are not the spirit. The report is the spirit, because it explains the numbers.
I hope the Appropriations Committee does not begin to take the same position on the Labor-HEW appropriations bill.
In any case, Senator LONG knew what the revenue number in the congressional budget meant when it was adopted last month. He spoke at length against the policy it represented. And, speaking of the $2 billion in tax reform it assumed, he warned:
That was a mistake. We should not be asked to come up with $2 billion of tax increases effective in 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.
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.
I take it that the Senator would not have addressed those comments to the issue unless he understood that this policy in the committee report, the Committee on the Budget, meant something and that it represented policy until it was changed.
Why would he be interested in changing a mistake in a meaningless Senate report?
Now seems to be the time of which Senator LONG spoke. Now he is asking the Senate to jettison the budget this Senate and the Congress adopted last month. Abandon it because a majority of the Finance Committee disagrees with it.
Senator LONG has been consistent in his disagreement with the revenue policy adopted by Congress in the congressional budget.
Will Congress be as consistent in upholding it?
In answering that question, we are challenged not only by this bill, or by this year's budget. We are being challenged and judged as a Congress.
The Federal budget has more than doubled in size twice since 1960.
The public debt has doubled since 1970.We have had deficits for 39 of the last 45 years.
And, until 2 years ago, our only answer was that it is "uncontrollable."
Yet, in our frustration we have made a kind of triumph.
We invented the budget process.And it works.
When the Budget Act became law 2 years ago, no one dreamed we would be finishing its first full year of operation right now.
And no one dared dream that we would finish right on the money — that our spending controls would work and our priority planning could make a difference.
No congressional achievements of our generation, even the impeachment proceedings, outweigh the significance for our country that this new budget process works. The budget process works if we permit it to work. The budget process is not just a committee or a resolution or a set of numbers. The budget process is all of us, Senators, Members of the House, and staff, working together in a new and systematic way to bring measured control into our national tax and spending policy.
Without the cooperation of every Member of this body — that cooperation, in my judgment, having been magnificent — this budget reform would collapse. Congress made the budget process work and Congress can break the budget process.
No point of order, no set of rules, can make the process work unless we are willing to make it work.
Now let us be candid about it. Some may wish the budget process had never been created. Some may think the Budget Committee has gone too far in testing and preserving the structure of this reform process and trying to give it flesh. Some might even say this bill has been shaped and chosen to teach the Budget Committee a lesson; that this bill, because it provides the same revenues as the numbers in the budget resolution should be passed and the policy of the budget resolution should be ignored, even at the price of $10 billion a year in increased taxes starting next July for all our constituents.
Pass it anyway and put the Budget Committee down. Take away the one evidence we have that Congress can discipline itself or can conduct the public business.
This is no dispute, Mr. President, between two committees. This is a contest between a single bill, this tax bill, and the congressional budget. This is a contest for the credibility of the budget process and the credibility of this Congress. Did we mean what we said about decreasing tax expenditures to decrease the deficit just last month? Did we mean what we said about a full fiscal year of tax cuts for our individual constituents?
The floor manager of this bill says it fits both the letter and the spirit of the congressional budget.
Mr. President, the budget is more than just a collection of numbers. It is a coherent fiscal and economic plan to move steadily toward a balanced budget and the changes Congress wants to make in our national spending priorities. That is what this debate is about.
Senator LONG says the Budget Committee is not a line item committee. I agree, and I have expressed my agreement to him a hundred times in casual conversation and on the floor.
But extending a $17 billion tax cut is not a line item, like some railroad crossing or some sewage plant.
It is a national economic policy. And reducing some of the $105 billion in existing tax preferences by 2 percent to cut the deficit, as the congressional budget proposes, is not a line item. It is a national priority, adopting its budget.
In adopting its budget Congress did not tell the Finance Committee how to write this 1,500 page bill, but we did all agree some of the things the congressional budget expected this bill to achieve, including a full year's tax cut financed in part by $2 billion in tax reform.
As my colloquy with members of the Finance Committee at the time this budget was adopted records, we did not say the full year's tax cut had to take a certain form, just that it had to be drafted to be consistent with the budget. Even as to that the Finance Committee had full discretion to depart from the budget, but if it did so, it then had to make its case for that departure to the Senate as a whole, make its case for departing from the budget.
We did not say which of 82 line item tax expenditures should be reduced to help pay for this tax cut, but simply that some should be cut. We did not line item.We do not now. But in describing that budget we said what we meant, meant what we said, and Congress agreed barely1 month ago.
Mr. CURTIS. Mr. President, will the Senator yield?
Mr. MUSKIE. I am almost at the end of my statement.
Now the Finance Committee would have us abandon that plan, in order to preserve tax preference at taxpayers' expense.
It is the right of the majority of a committee to defy the congressional budget. It is the obligation of the Congress to uphold that budget.
Yet, the congressional budget is not inflexible. Changing conditions mean changing needs. The Budget Act provides that where the economy requires it, a revised budget can be adopted.
No such change has occurred since May.
We should amend the bill to fit the budget we have adopted.
What shall we say otherwise?
That the tax reform and tax cut provisions of the budget resolutions were double talk?
A hoax?
More of the Washington shuffle?
Or shall we just say that the budget resolution is "inoperative"?
I think we all want more than that. We owe more than that to our States.We owe more than that to this body We owe more than that to ourselves. And we are better than that.
I do not believe we will turn our backs on the budget reform.
I do not believe we will accept the individual tax increases and preserve tax preferences offered us by this bill.
It would be easy to do so — to follow the course of preserving tax preference and smoothing over the short changing of the average taxpayer.
It would be easy.
And expected.
And wrong.
Wrong to scuttle the budget reform. Wrong to our fellow citizens.
And wrong to ourselves.
We will either all hang together to preserve the budget process or all hang separately on the gibbet of public scorn.
So let us agree to follow our budget. Let us conform this bill to it.
And let us restore, even if but a little, the hope and confidence of our people in our Government.
And in ourselves.
I would like to close with a reference to the Budget Act, because this was discussed yesterday.
I have not had a chance to research this point thoroughly, but as I recall the Legislative Reorganization Act provides as to all other committees that legislation shall be accompanied by a report, period.
So far as I know, the Budget Committee is the only committee where the minimal contents of that report are spelled out, and for a reason, for a very definite reason.
I had something to do with writing this act. I was a member of the subcommittee. I was a member of the full committee. I was one of the floor managers of the bill in debate. I was one of the ranking conferees with the House. These provisions were put in here for a purpose.
This specifies the contents of the report at great length.
If I may read several items from the act, section 301 lays out the requirements for the budget resolution, including this:
3. The amount, if any, of the surplus or the deficit in the budget which is appropriate in light of economic conditions.
It is a clear mandate to the Budget Committee to make an economic judgment about the budget and other related policies influencing the pace of the economy.
"In the light of economic conditions." That relates to the resolution.
Now the report:
The report accompanying such concurrent resolution shall include —
Mr. President, I ask that all of the items be printed in the RECORD at this point.
There being no objection, the material was ordered to be printed in the RECORD, as follows:
The report accompanying such concurrent resolution shall include, but not be limited to—
(1) a comparison of revenues estimated by the committee with those estimated in the budget submitted by the President;
(2) a comparison of the appropriate levels of total budget outlays and total new budget authority, as set forth in such concurrent resolution, with total budget outlays estimated and total new budget authority requested in the budget submitted by the President;
(3) with respect to each major functional category, an estimate of budget outlays and an appropriate level of new budget authority for all proposed programs and for all existing programs (including renewals thereof), with the estimate and level for existing programs being divided between permanent authority and funds provided in appropriation Acts, and each such division being subdivided between controllable amounts and all other amounts;
(4) an allocation of the level of Federal revenues recommended in the concurrent resolution among the major sources of such revenues;
(5) the economic assumptions and objectives which underlie each of the matters set forth in such concurrent resolution and alternative economic assumptions and objectives which the committee considered;
(6) projections, not limited to the following, for the period of five fiscal years beginning with such fiscal year of the estimated levels of total budget outlays, total new budget outlays, total new budget authority, the estimated revenues to be received, and the estimated surplus or deficit, if any, for each fiscal year in such period, and the estimated levels of tax expenditures (the tax expenditure budget) by major functional categories;
(7) a statement of any significant changes in the proposed levels of Federal assistance to State and local governments; and
(8) information, data, and comparisons indicating the manner in which, and the basis on which, the committee determined each of the matters set forth in the concurrent resolution, and the relationship of such matters to other budget categories.
Mr. MUSKIE I shall simply read these:
4. An allocation of Federal revenues recommended in the concurrent resolution among the major sources of such revenues.
5. Economic assumptions and objectives which underlie each of the matters set forth in such concurrent resolution and alternative economic assumptions and objectives which the committee considered.
If that does not spell out a responsibility on the part of the Budget Committee to consider not only the numbers that one finds in the concurrent resolution but the economic implications of those numbers, the policy assumptions of those numbers, then I cannot read the English language.
Then let me read section 303:
It shall not be in order in either the House of Representatives or the Senate to consider any bill or resolution, or amendments thereto, which provides an increase or decrease in revenues to become effective during a fiscal year until the First Concurrent Resolution on the budget for such year has been agreed to, pursuant to section 301.
Now, if the first concurrent resolution on the budget has nothing to say about revenue and is not intended to influence revenue raising or revenue cutting policy except to the extent that there is a single number in the resolution, then of what importance is it to make its consideration by Congress contingent upon the prior adoption of the first concurrent resolution? To adopt the theory of the budget that has been advanced by my good friend from Louisiana — and I say this with all respect — is to make a hoax of the budget process.
Let me just, in closing, say this about something Senator LONG said last December 19, in connection with the debate over the veto of the tax cut bill. He was talking about the President's proposal that we immediately adopt a spending cut of $28 billion, in round numbers. This is what Senator LONG had to say:
When we come back here—
He is talking now about this fiscal year—
and see what the President's budget is and what the Budget Committees recommend, then we are going to have to approach the Budget Committee and say, "We would like to continue this tax cut, and we are going to have to have spending cuts."
Again he said:
The Budget Committee will have that difficult problem of trying to suggest, of all these good things we would like to do, where some could come off from one place and some from another so that we could finance this $17 billion from that budget. That is a difficult task, but that would be the problem of the Budget Committee.
That is the mandate we have tried to fill. Tax expenditures, which cost tax dollars, have grown over the past 10 years from something over $40 billion a year to about $105 billion. There is a place where we can cut. Not everybody would like to cut there. Not everybody would like to cut in the same place. But that is true of the appropriations budget as well.
But here is an acknowledgment, I think a candid one, in Senator LONG's own words — an acknowledgment of the kind of responsibility that the Budget Committee has.
It is not fun. We are going to step, at some point or another, on every toe in this Chamber, probably. I knew that when I asked for the job. But notwithstanding the heated debate last night, I am still glad I got the job, and I thank you all very much.
I am happy to yield.
Mr. LONG. Mr. President, I would like to be recognized in my own right.
The PRESIDING OFFICER. The Senator from Louisiana.
Mr. LONG. Mr. President, fundamental to the Senator's argument is that it is not the concurrent resolution that is the budget. Fundamental to his argument is that the budget is the language that one can find in the Budget Committee's report, and whatever thought the chairman and its Members had in mind when they wrote that. That is his argument.
We have no problem whatever, Mr. President, in living within this $15.3 billion figure. Let me show you, with help from the Finance Committee staff, how that figure was arrived at. I would like to ask one of our staff assistants to put the numbers on the board as we proceed with them.
We were asked from the beginning to make our suggestions, having looked at the President's budget, as to how much money we thought would be required from those areas under the jurisdiction of the Senate Finance Committee.
We came up with the following:
$17.3 billion tax cut extension.
$2.9 billion other tax cuts — capital formation.
Add that together, with a line, and that equals the $20.2 billion gross tax cut.
Subtract $0.6 billion tax increase, mainly unemployment insurance.
That, then, gets us to a final figure of $19.6 billion net.
Mr. President, those are suggestions from the Finance Committee, which ought to know best in the area of its jurisdiction, to the Budget Committee.
We at that time fully had in mind that within that top figure of $17.3 billion many Senators, not only on the committee but Senators who were not on the committee, would probably have suggestions about ways in which we could make tax reductions that might take precedence, because they might have more merit in their eyes than some of the things in that $17.3 billion. If so, we felt that we could simply take something out when we put something in, so that, by a squeezing-out process, we would be within the budget.
That is what a budget is supposed to be all about, as I imagine, in this sort of squeezing-out process. If you have something that you think is very good, and it was not inside the budget estimates to begin with, you have to find something to take out so you will still be within the budget.
I would suggest, now, that those figures simply be erased, and then we see what happens after that.
The Budget Committee looked at that. They allowed nothing for capital formation, and they apparently did not seem to be impressed by the possibility of requiring some money for unemployment insurance taxes. They gave us a figure — and I would like to have put on top that figure, $15.3 billion, and that it be written fairly large so we can see what we are talking about.
If one reads their committee report, one can see how the Budget Committee arrived at the $15.3 billion. They took the $17.3 billion that we suggested to them, and they proceeded to put an increase from tax expenditures — just put "tax expenditure legislation, $2 billion."
Then subtract that, and that gives you $15.3 billion.
Now, we on the Finance Committee understand how they arrived at that figure. We understand that. And it was made clear by Mr. MUSKIE on the floor that when they said "tax expenditures," they did not necessarily mean that you had to raise taxes any particular way; you could raise it however you wanted to.
He also made clear reference, in colloquy with Mr. PACKWOOD, that if the Senate Finance Committee felt that we were not able to raise that $2 billion, that we could recommend to the Senate that it simply reduce taxes less than $17.3 billion.
Mr. MUSKIE. Will the Senator yield on that point?
Mr. LONG. Yes, I yield.
Mr. MUSKIE. I want to be sure my position on that point is clear. As I reviewed the debate on the first concurrent resolution this year, I find myself saying over and over again especially to the distinguished Senator from Louisiana in connection with his amendment affecting appropriations that, of course, these are target numbers and if the committee finds it impossible to meet the target it is its duty to come to the Senate and tell the Senate to make its case and give the Senate an opportunity to change the target. That is not what the Senator is saying in this connection. He is saying he is making these changes and still doing what the budget resolution requires.
There is a different point altogether. The Finance Committee nor any other committee, including the Budget Committee, cannot unilaterally change the budget resolution. Yet if committees find it is impossible to live under the target in the budget resolution, then of course, the committee has the duty to come to the Senate floor and to make its case.
Mr. LONG. The Senator has read some of my language to me. Let me read some of his language to him.
Mr. PACKWOOD. Would this also be true, because it is slightly related, on page 6 of the committee report where you make reference to the $2 billion in the tax expenditures that you hope the Finance Committee will pick up this fiscal year — do I take that to mean it is not necessarily a mandate that we close $2 billion worth of loopholes, but that we could just as well raise the income tax or the corporate income tax $2 billion? You are just talking about $2 billion additional revenue, and the reference to tax expenditures does not necessarily mean so-called loopholes.
Mr. MUSKIE That is right. The only mandatory number with respect to revenues is the revenue total that we have included.
We have, however, indicated in the report, as we are required, our view as to whether any revenue should be generated by tax reform. We have done that, so our view is in the report, but it is not mandated.
Mr. PACKWOOD. If the Finance Committee's judgment at the end of 2 weeks of hearings and markups, they found it impossible to close $2 billion of loopholes, and they chose to fit within the mandate of the Budget Committee by simply reducing the tax reductions from $17 billion to $15 billion and pick up $2 billion that way?
Mr. MUSKIE That is right.
And then Mr. MUSKIE goes on to say: What we ask is a recommended level of Federal revenues of $362.4 billion in revenues, and we arrived at that number by assuming $2 billion possible additional revenues on tax expenditures. By the time the committee acts, the revenue picture changes. We may come up with $362.4 billion in some other fashion.
So it goes on. Let me make this clear.
Mr. MUSKIE. Wait a minute.
Mr. LONG. Yes.
Mr. MUSKIE. The Senator was quoting in part from a colloquy.
Mr: LONG. How much does the Senator want me to read?
Mr. MUSKIE. Let me read what I wish to quote. Senator PACKWOOD suggested this colloquy by posing an impossibility. He said :
If the Finance Committee's judgment at the end of 2 weeks of hearings and markups, they found it impossible to close $2 billion of loopholes, and they chose to fit within the mandate of the Budget Committee by simply reducing the tax reductions from $17 billion to $15 billion and pick up $2 billion that way?
Implicitly, is that optional? Of course, it is.
I have been saying all afternoon that the Finance Committee's jurisdiction to report any bill it chooses is not changed by the budget process. I say in the next column in the RECORD:
But in the last analysis, it is the Finance Committee's judgment, and I think the Senators and the Senate subsequently.
I agree, that language in colloquy is not always as precise as it might be, but the whole thrust of this is backed up by continuing colloquy with other Members of the Senate, including the Senator from Louisiana, which I emphasized over and over and over again that the first concurrent resolution numbers are targets, that it is the duty of committees to try to meet them. If they cannot, it is their duty to come to the Senate, make the case for not meeting them, and giving the Senate a chance to decide.
There was nothing in my mind in that colloquy designed to imply that the Finance Committee has the right unilaterally to change the budget resolution.
Mr. LONG. I am pleased to see now the Senator is only talking about the total figure because that is what we ought to be talking about.
Mr. MUSKIE. I am not talking about only the total figure at all.
Mr. LONG. I have the floor. I yielded to the Senator, which was more generous than he was to me.
Mr. MUSKIE. The Senator misquoted me and started the next sentence. I challenged it.
Mr. LONG. Yes.
I insist on my rights for a moment.
If we buy the Senator's argument, then when we read the budget report and listen to the Senator's speech today, what that adds up to is this; that the Budget Committee will give the Finance Committee two things: $17.3 billion, an extension of temporary tax reductions enacted in December 1975 of $17.3 billion through 1977, and another $2 billion for an increase in tax expenditures.
And the Finance Committee, having jurisdiction over all types of legislation, would have no discretion whatsoever as to what goes into that $17.3 billion, because it is clear, according to the Senator's argument, that the Budget Committee made clear what it had in mind. It made its assumption clear and thereby the committee that has prided itself on revenue legislation since the beginning of this Nation has no discretion to recommend anything different than that.
If that is correct, Mr. President, then that same committee has the right to tell the Committee on Armed Services and the Committee on Appropriations:
We would assume that they should not put anything in here for aircraft. We think aircraft is obsolete. It does not seem to us like anything ought to be in there for aircraft, even though the President and other people recommend it.
Then, if the Committee on Appropriations and the authorizing committee, the Committee on Armed Services, come in here recommending something for aircraft, they would then be told correctly, if the Senator is correct, that they have violated the budget process and they are going to bankrupt this Government buying airplanes because it is implicit in the Budget Committee language that the Budget Committee assumed that nothing was to be recommended in the way of aircraft defense. Therefore, that cannot be considered.
Mr. MUSKIE. Mr. President, if the Senator will yield, this Senator has not made any such statement with respect to appropriations because there is nothing in the Budget Act that gives us that authority. I refer to the Budget Act with respect to its mandate in connection with revenues. It said specifically we have to allocate.
Mr. LONG. I heard what the Senator said.
Mr MUSKIE. The Senator knows because he was in the Chamber with an appropriation modifying amendment when I told him over and over again that we are not a line item in appropriations and that the assumptions there are simply tentative and demonstrative.
Mr. LONG. Mr. President, I wish to answer that, if my rights to the floor will be respected for a few minutes. The Senator says that the language in this Budget Committee report is the law. I heard Mr. BELLMON say that last night. I could not believe it.
Mr. MUSKIE. I challenge the Senator. I made no such statement.
Mr. LONG. As I said last night, I find it difficult to believe that any Senator would stand here in this Chamber and undertake to tell any other Senator that the language in his committee report is the law. The language in his committee report is exactly what that is, how the committee went about arriving at the recommendation that they made. So to say that that is the law, Mr. President, is to me totally contrary to what one would think
Mr. President, it seems to me that what we have here is a simple matter. The Budget Committee is expected to recommend to these legislative committees, be they Finance, Appropriations, or even the authorizing committees, Armed Services, Public Works, and all the others, what the overall figure is to be within their function and then within their jurisdiction they are supposed to be the experts who do the nitty-gritty.
I am reminded; Mr. President, of a story that occurred when my dear friend, Alben Barkley, remarried. He has left us. He was one of the most beloved Senators of all times. He is a former majority leader and Vice President. When he remarried, it caused all the ladies to raise their eyebrows and there was a lot of pleasant conversation among people to the effect that it is never too late, that there is always hope, because here he was well into his seventies marrying this fine lovely widow who was much younger than he, almost perhaps young enough to be his daughter. Everybody was pleased about it. There was conversation among all the ladies and the gentleman about it. We were very happy about it.
After he had been married a while, someone asked Vice President Barkley how the marriage was going along. He said:
It's going just great. My wife and I had an understanding before we married. I would make all the big decisions and she would make all the small decisions. So far, we've been married 6 months, and we haven't had any big decisions to make.
[Laughter.]
Mr. President, the way this thing was supposed to be, I thought the Budget Committee was going to make the big decisions and the Finance Committee was going to make the small decisions. I regret to say that within that $17.3 billion, the chairman of the Budget Committee cannot find anything small enough for the Finance Committee to decide anything about. [Laughter.]
So all we can recommend is taxing somebody. We cannot spread any joy. The Budget Committee did that for us We do not have that discretion.
The Senator talks about a $10 billion a year tax increase. He surely must have taken a better look at the bill than that.
The reason why we have to recommend taking something out of the $17 billion is that we are putting other things in. It is a squeezing-out process. That is what the budget is all about. So when we vote to do something for mothers who have little children and who want to go to work — better child care; when we do something to help employees own some stock in the company for which they work; when we vote to do something to help the railroads find capital to modernize and stay in business, everything we do that involves the recommendation of perhaps a hundred Senators and their suggestions — any time we do anything along that line, we have to take something else out, in order to stay inside the budget, and we did.
This $10 billion we are talking about on an annual basis really makes no practical difference in the first year, because the $35 per person tax credit with which we are dealing at this moment is something that one handles on an annual basis anyway. It does not even reflect itself in the withholding schedule. I correct that: It is reflected in the withholding schedule. But it is taken at the end of the year in the final return.
So that the overall impact would be about the same as we had in mind to begin with, that we provide far more tax help for the poor than is in the House bill. We provide far more stimulation for the economy than is in the House bill.
We did what might be unpardonable: We exercised our discretion. We listened to witnesses. If we thought they were right, we tried to go along with them. If we thought they were wrong, we turned them down. We did what we thought we should do.
Now we are told that we were wasting our time when we were holding hearings, because the Budget Committee, when it made its assumption, assumed that there was going to be nothing but $17.3 billion in tax cuts; therefore, these people could have stayed home. Everybody who told us that the investment tax credit should be changed, to give them a little more tax relief to help get the economy going, should have stayed home. Those who came here representing the railroads and told us about their plight and how the law should be modified to help them stay in business should have stayed home. Those in the airline business who have their problems and who were seeking some consideration from the taxwriting committees should have stayed home. Those involved in the energy industries who wanted to do something about insulating homes or modernizing furnaces, or wanted to do something about solar energy, or geothermal energy, should have stayed home, even though the House had sent us an energy tax bill with provisions along that line, because it had been assumed in the Budget Committee that nothing of this sort would reflect itself in these tax bills.
If that is how the Senate wants to do business, any other committee can be bound by the same kind of assumption. How would one defend his position?
We read a resolution that says $15.3 billion. That is what the law is supposed to be. We are prepared to live with it; and we will, in good faith, and in good spirit, undertake to comply with it, and we do. When we do, we are told, "You are in violation of the budget process, and you are going to destroy this country."