July 21, 1976
Page 23108
Mr. LONG. Mr. President, there may have been a time in my early years in the Senate when I might have made an argument somewhat like that of the Senator. I cannot recall whether I ever did, but let me analyze it for a moment.
Basically, the Senator's argument is that if he had his way, he would put several billion dollars of additional taxes on rich people, and he would provide tremendous social welfare benefits to people who are not rich, particularly the poor. That is fine. I certainly applaud the Senator for looking at it that way. If I could specify the particular rich people that I would like to specify — those who have foundations, for example — I probably would do the same. But the Senator has not been successful in taxing those people he would like to tax. So, having failed to raise the revenue which he would like to raise, he now wants to spend the money, anyway.
I did what little I could, within the limits of my conscience, to help raise a lot more money. I voted for about $4 billion of additional revenues that we do not have now. I do not like to incur the wrath of all the bankers and building and loan associations in the country; but I voted, notwithstanding that, to have a withholding tax on interest and dividends, and it did not succeed.
One reason why it did not succeed was that the Senator got up and damned it with faint praise.
But that is all right. We all have a different opinion about these matters.
Then I tried to do something about the deduction for the gasoline tax, which does not benefit those who take the standard deduction, anyway, and I got nowhere with that. That would be another $570 million we would have picked up. Those two items total $2.7 billion.
If we had the revenue, which I voted for, I would be glad to vote for the Senator's amendment.
We do not have the revenue.
The Senator is talking about spending money we do not have. In my early years in the Senate, I suppose I tended to take somewhat the same view about some of these matters. But when I became a member of the Committee on Finance, I found more and more the pressure of circumstances requiring me to think in terms of fiscal responsibility. That being the case, it may be that the chairman of the Budget Committee and his committee are now prepared to relieve me of any obligation to stay by that $15.3 billion ceiling.
Can I look to the distinguished Senator from Maine and think that I am now relieved of any obligation to stay by that $15.3 billion ceiling, that the sky is the limit from now on?
Mr. MUSKIE. Mr. President, I think the Senator understands from the discussions we have had on the floor that the $2 billion tax reform target is one not that the Senator from Maine proposed but one that Congress as a whole did.
That is my view and it is still my view. It is not my prerogative to pick and choose what the revenue losers will be or the revenue gainers will be. The Senator from Louisiana and the Senator from Massachusetts are as aware as the Senator from Maine of what the budget targets are. I hope we do not forget them as we move along. But I have not been given a prerogative. If I were to assert it, I cannot think of any Senator who would be more vigorously in opposition to my asserting that prerogative than the Senator from Louisiana, because he has been very careful to spell out what my business is. His view of what my business is is much less expansive than my view of my business is. But there certainly is no disagreement, there should not be, by any Member of this body that our targets are our targets.
There is an overall revenue target, there is also a tax reform yield target. The latter we are slipping farther and farther away from. I think an informal estimate indicates that we are down to about $500 million now, in terms of the net $2 billion in revenue gainers that we were hoping to get from tax reform. So we are slipping farther and farther away from that. That is obvious.
This amendment will take us away from it; other amendments that are pending will take us even farther away from it.
I can understand how Senators who are for one type of revenue gainer may be against another type of revenue gainer, and getting them together is the interesting exercise which I sit here and observe as chairman of the Committee on the Budget. I am almost tempted to reach the conclusion which the Senator from Louisiana has expressed from time to time, that when we are all through, it will balance out as a wash.
I much prefer some other revenue gainers than to vote against the pending amendment. I think I share the view of the Senator from Massachusetts that his amendment would establish a real equity that ought to be supported. Whether or not I can vote for his amendment when I get through listening to the arguments will be heavily weighted by my special responsibilities as chairman of the Committee on the Budget, I am sure. I have to try to be reasonably evenhanded on these things. But I would have much preferred to pick up some revenue from some of the things the Senate has already rejected.
The Senator from Louisiana knows what my views are on those; there is no sense in repeating them. But I do join him in cautioning the whole Senate that we are slipping farther and farther away, on almost every amendment submitted, from the goal of $2 billion in net revenue gain from tax expenditures.
It is hoped that we can pick up some revenue gainers. There still may be some other possibilities, but I am not going to act as the conscience of the Senate on each and every amendment. I am going to try to guide my own vote in accordance with what I think are the equities. It is not always easy to do, but I think I have a little tougher job to do in that respect than other Senators have.
Mr. LONG. The question, then, Mr. President, resolves itself to a matter of whether we can afford this. We are already way over the target. I do not know how we hope to get back within it.
Frankly, it was my thought, and it is still my thought, that the Committee on the Budget should give us one figure: how much revenue does it expect us to raise? With regard to the activity of the Committee on Finance, how much money does it expect to raise and how much money does it expect to spend?
With regard to the money to be raised by the tax system, considering both the increases and cuts, my feeling has been, and I think the Senate by now understands my view, that we ought to have just one figure and that we ought to try to hew to that figure. I would have thought that the Committee on the Budget and the Committee on Finance ought to try to work together to see that, however we do it, to stay within that figure, so if somebody puts something else in, he has to take something out somewhere. If we could get together on that, maybe we could make it work.
Mr. MUSKIE. I would welcome that kind of arrangement, but the revenue number was $362.5 billion. That was the revenue number in the first concurrent resolution. It was made possible by, basically, a tax cut extension which would be part of that $362.5 billion. Part of that we offset by $2 billion in tax reforms. There would be a $15.3 billion overall tax loss, leaving us with net revenues of $362.5 billion. I hope that we hold to that $362.5 billion. If we do not, then the pressures will mount to hold down spending and to reduce spending below targets that we set. We have done a good job on appropriation bills up to this point.
They also include subjects of interest to those who are compassionate about the disadvantaged. Direct programs also benefit the elderly and benefit a lot of people who cannot help themselves.
The priority setting feature of direct appropriations as well as revenues involve some tough decisions. But we have to keep our eye on that $362.5 billion revenue here, until we finally put it in place in the second concurrent resolution. I am going to do my best to cast my votes in the line of that target.
Mr. LONG. Mr. President, I think the Senator made clear to me, as we entered into the debate that has been taking place on this floor, that he felt that we would both learn something about this budget process as we went along. I hope we do. I hope that, as we go through this matter, we can learn how to work together to try to make this budget process work.
As far as this Senator is concerned, I am going to vote against this amendment for one simple reason: I believe that when the Senate voted that budget resolution, it placed me under a responsibility, as chairman of the Senate Committee on Finance, of holding that figure in the Senate. As long as anybody around here wants to stand by the principle of fiscal integrity in this matter, I am disposed to try to stay with it, until I feel it is disposed of.
Mr. KENNEDY. Mr. President, it is interesting to listen to the chairman of the Committee on Finance make this argument about whether we can afford the improvement of this tax credit for elderly people and those who are beneficiaries under public retirement programs. We have seen legislation come to the floor of the U.S. Senate that protects almost every major loophole, for every rich and powerful interest that takes advantage of the Internal Revenue Code. We did not hear these doubts when we had the opportunity to raise a billion dollars in terms of DISC or hundreds of millions of dollars in deferral, which goes to the major multinational corporations; or on the minimum tax, where we could have recovered over a billion dollars, which now goes to the richest 1 percent of individuals in this country. But suddenly, when it comes to those people, primarily public employees — firefighters, policemen, teachers — who have retired, they say we just cannot afford it. Their hands go up in the air, and they say, if you can find the money, I am glad to support it. Well, the House of Representatives found the money. It is not so magical to try to find the resources. We can find the resources and we can find the money.
I daresay that I agree with the position that has been taken by the chairman of the Committee on the Budget. Individuals in this body are conscientiously attempting to follow the Budget Committee's resolution as we go through the many additional provisions of this legislation. They have a sense of equity but they are faced with a problem, when proposals are advanced that exceed the budget targets. They wonder whether they can, in good conscience, support those proposals, which they would have supported without hesitation if we had been able to recover the hundreds of millions or billions of dollars of revenues in these other areas.
I would say to my good friend and colleague, the Senator from Maine, that we will have the opportunity, certainly as we move through this legislation, to reconsider, hopefully, the minimum tax proposal amendment that will be offered by the Senator from Arkansas, and tax deferral, and see if we cannot recover some of those additional resources. Perhaps, then, the Senate of the United States will be able to exercise both sound fiscal judgment and a sense of equity, after having supported this particular proposal, recognizing that we should set our priorities straight and try to provide equity for those retirees who will be affected by this amendment. We know that far stronger groups have benefitted generously through the earlier provisions of this legislation.
You know, it is interesting, Mr. President, that the Supreme Court in the last term upheld the forced retirement of firefighters and police under the age of 65. In that particular case it involved a policeman from Massachusetts who was only 50 years of age. He had served in the fire department for his period of years and was then retired. If he had been on social security, he would have at least benefitted with the 135-percent increase we have provided over the last 12 years. But because this individual is a public employee and participating in a public retirement program, he may be denied his credit, as the Finance Committee has recommended because it refuses to find the necessary resources to help him.
There are few issues, as I mentioned before, that raise the question of priorities as clearly as this issue does, Mr. President, and I am very hopeful that the Senate will support this proposal.
I would like to ask for the yeas and nays on this amendment.
The PRESIDING OFFICER (Mr. PERCY) . Is there a sufficient second? There is a sufficient second.
The yeas and nays were ordered.
Mr. MUSKIE. Mr. President, will the Senator yield? The definition of what the budget process is is not simple, and what its mandate is, what the authority of the various institutions which make it up may be. But let me say this about it: It is not the Senate Budget Committee alone, it is not the House Budget Committee alone, it is not the Congressional Budget Office alone, it is those three new institutions, but it is also everyother committee of the Senate, and it is every Member of the Senate, as well as every Member of the House.
When we commit ourselves to the budget process and the targets which together we establish following it, we do not at one and the same time surrender our individual sense of equity and justice in the process. I think that gets confused in the debate over this tax bill. Tax bills during all of my term in the Senate, have become among the most complicated and difficult pieces of legislation to understand.
I have watched direct appropriations grow over the 18 years I have been in theSenate, and I have been reminded over and over again, especially by the more conservative Members of the Senate, of the growth in those direct appropriations, and I have heard them testify before the Budget Committee and speak on the floor of the Senate to the effect that that growth in direct appropriations and direct spending has been inflationary, that it has taken the Government into activities and roles and programs that exceed what the people want the Government to be involved in.
But, at one and the same time, there has been an even greater growth in the cost of tax expenditures. Over the same 10-year time frame that the more conservative Members of this body have focused my attention to on the growth in direct appropriations, there has been a greater growth in tax expenditures which we rarely examine closely, and which are rarely subjected to the same tests of equity and justice and priorities that we are asked to apply to direct appropriations.
I personally — and I am speaking now not as chairman of the Budget Committee, I am speaking now as an individual Senator reflecting my own sense of priorities and equities — think our performance on this tax bill in terms of the equities and the priorities has been very disappointing and, at one and the same time, we have fallen short, fallen short deliberately with our eyes wide open, of the targets we set in the budget resolution of this spring.
I applaud the willingness of the Senate to exercise discipline on the spending side, the appropriations side, of the budget. That has been a plus, and we have been credited with an important achievement, as an institution, on the outside by those who watch the performance of the Senate and of the Congress as a whole.
But we have not, in all frankness and candor, matched it by a similar performance on the revenue side and on the tax expenditure side. Maybe that is so because it is more complicated, more difficult, much more difficult to pinpoint in terms of the impact on people and on the economy.
I find it very difficult to watch this parade of amendments, revenue losers, revenue gainers, and to apply my twin responsibilities, my responsibility as chairman of the Budget Committee to try to hold the Senate's feet to the fire in terms of the targets we set in the spring, but my other responsibility as a Senator to respond to the sense of equity that I have developed in my own public career and as a representative of my people.
I think we have done a much better job on the appropriations side, and that we are in the process of doing a very disappointing job on the revenue side.
I am not sure whether I am going to vote for this bill when we finish working on it. I am not sure how long we are going to be working on it, but if this bill, when we have finished work on it, falls as far short of what we have mandated in the budget resolution and as far short of what I think is equity to the American people, as it now stands, I would doubt very much that I can vote for it.
That is not a threat to anybody. It is simply an explanation of the internal turmoil that I feel as I view these twin responsibilities that I have.
The Kennedy amendment puts me right in the middle of both of them, and I am not sure at this point how I will vote on it because in my role as Budget Committee chairman I ought to be concerned about the revenue loss.
Mr. KENNEDY. Mr. President, will theSenator yield?
Mr. MUSKIE. But in my other role I am concerned about the inequity of what we have done up to this point in this tax bill.
Mr. KENNEDY. I think the Senator from Maine has explained very well the dilemma, but would he not agree with me that we should not be forced into the position of depending on who gets on the floor first and advances his particular amendment? Why should we be put into a situation where we must vote against a meritorious proposal because of revenue problems, when the revenue issues in the bill are still open. Yet that is where we find ourselves today. The Finance Committee brings a bill to the floor with its own priorities, and says take it or leave it. But we have our own priorities. We have gone through what I think the Senator from Maine, in reviewing his own votes, and I would agree, were the major opportunities for significant increases in terms of revenues raised. We tried to conform with the budget resolution, and we failed so far.
But would not the Senator have felt easier if this had been the first amendment? Perhaps the Senator at that time could have supported it, not looking back over these past weeks. As we go through the rest of this legislation, I hope we can vote on the basis of merit on particular amendments, and then attempt to reconcile the revenue figures at the end. Why should the cost of the failure of the Senate to close some of these loopholes be borne by the elderly people of this country?
If we fail to provide these kinds of benefits, then the Senator from Maine will understand that in order to reduce the budget or reduce the deficit next year, we are going to have to find additional reductions in expenditures. If we look at the track record of Congress over the period of the past 10 years, those reductions will not come from the Defense Department. They will come in the area of child and maternal care, health, community mental health centers, title I education programs, meals-on-wheels. We have seen that happen over the past few years.
It does seem to me that, hopefully, we can gain the support not only of the Senator from Maine, but of others who are also concerned about the budget process in terms of the merits of these amendments. We can give them assurance that there will be an opportunity for us to raise the revenues before the final vote is cast. Then I, too, will join the Senator from Maine in expressing reservations or opposition if we are not going to provide at least some degree of conformity with the budget resolution. But I admire the sense of equity which the Senator from Maine has not only spoken about, but has exemplified duringthe course of his legislative career.
Mr. MUSKIE. I think that is a reasonable argument, a reasonable position to take.
It seems to me, we are almost forced now, given the way the debate on this pending bill has gone, to follow our own sense of equities until we finish the work and then look at the finished product and determine whether we can support it, depending upon whether it meets the budget targets, and at the same time, is an equitable matter.
I think that is almost the recourse to which we have been forced by the way in which the legislative process has worked on this bill. So I could not disagree at all with the argument.
As a matter of fact, the argument that the Senator just made follows the theme laid down by the floor manager of the bill in reminding us of Paul Douglas, "lead kindly light" philosophy.
We take one step at a time until we see where we have gone and then, at that point, stop and take stock of what we have got and either support it as consistent with established congressional policy, or we know our equities are inconsistent, then vote on the final product.
I guess we just cannot, through all these amendments coming along, judge each one in the context of the whole. We have almost got to take each one on its merits. I think that is the Senator's argument.
Several Senators addressed the Chair.
The PRESIDING OFFICER. The Senator from Louisiana.
Mr. LONG. Mr. President, this bill contains $2.5 billion additional taxes on people.
We tried to do something for the low income people and we did that with the earned income credit. That was to help the working poor. That cost some money.
We tried to do something to help employees to own stock in the companies in which they worked. That cost some money.
We expanded the standard deduction to help low income people, and that cost us some money.
So that we have done things to help the poor and we have done things to tax the rich.
We did not do everything exactly the way the Senator had in mind, but anybody who knows what that minimum tax is and who has paid it and finds it has been increased five times over what it was, or, put the other way, increased by 400 percent, will know it is collecting a lot of additional taxes. And we have 50 amendments in the bill aimed at the kind of people against whom the Senator spoke in such impassioned terms as those who do not pay enough in the way of income taxes.
I do not like to vote for tax increases, but I have voted for this $2.5 billion I made reference to.
I voted for the $2 billion proposal on interest and dividends. I voted for another $600 million by terminating the deduction of State and local gasoline taxes. I voted for the Hartke amendment.
That is $5 billion of additional taxes I voted for. Most of that $5.2 billion is taxes I would not enjoy voting for. But I voted for them just because the Government needs the money. Those are regarded as reforms.
I would like to have voted for the $35 tax credit to be extended all year, but I voted against the Allen amendment which I would like to have voted for.
I was prepared to vote against the Muskie amendment, which I would have loved to have voted for, just as a matter of my duty to the Nation's fiscal problems.
So there is $8 billion of fiscal responsibility that this Senator has tried to demonstrate, as manager of this bill.
With all deference to the Senator, I have been in this business of trying to help the aged, the poor, and disabled a lot longer than he has, and I have offered amendments that would cost as much as his, and some of them cost more.
I understand the problem. I sympathize with the people. I also recognize the Government's fiscal responsibility.
That being the case, I think even if the chairman of the Budget Committee retires to the field to try to save the fiscal solvency of this Government, I will still have to stay and see what I can do about it.