June 7, 19 77
Page 17832
HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1977
The Senate continued with the consideration of the bill (S. 1523) to amend the Housing and Community Development Act of 1974; to extend housing assistance and mortgage insurance programs; and for other purposes.
AMENDMENT NO. 361
Mr. MUSKIE. Mr. President, I call up my amendment 361, which is at the desk.
The PRESIDING OFFICER. The amendment will be stated.
The legislative clerk read as follows:
The Senator from Maine (Mr. MUSKIE) for himself and Mr. BELLMON, proposes amendment numbered 361.
Mr. MUSKIE . Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it so ordered.
The amendment is as follows:
On page 40, delete lines 14 to 24.
On page 41, delete lines 1 to 9.
Mr. MUSKIE. Mr. President, I ask unanimous consent that the names of Senators BIDEN, DOMENICI and ZORINSKY be added as cosponsors of the amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MUSKIE. Mr. President, S. 1523, the bill before the Senate, would authorize and extend a broad range of housing and community development programs. These programs and the problems they address have been of particular concern to me throughout my tenure in the Senate. Providing decent housing for all Americans, and improving the quality of life in our cities are goals that must be high on our national agenda.
These goals deserve our full attention. The problems are complex. They do not yield to easy solutions. Housing programs by their nature require a sizable share of our national resources. Community development programs cannot be both effective and wavering. These programs require a steady, long term national commitment. We must make our commitments knowing that we are in for the long haul. We must make our choices with our eyes open.
With that statement, Mr. President, I regret that I must oppose one particularly unfortunate provision of S. 1525. I refer to section 208 of the bill, and I ask unanimous consent that section 208 be printed in the RECORD.
There being no objection, section 208 was ordered to be printed in the RECORD, as follows:
Sec. 208. Section 7 of the Department of Housing and Urban Development Act is amended by adding at the end thereof the following:
"(o) In determining, for a fiscal year, the amount of budget authority which is necessary to provide for the liquidation of housing assistance contracts entered into under the United States Housing Act of 1937; section 101 of the Housing and Urban Development Act of 1965; sections 235 and 236 of the National Housing Act; section 402 of the Housing Act of 1950; and section 802 of the Housing and Community Development Act of 1974, the Secretary shall utilize estimates based on (1) the amount of payment requirements to liquidate housing assistance contracts which were already in effect at the beginning of that year; and (2) the amount of payment requirements to liquidate housing assistance contracts estimated to be entered into during that year. The total amount of budget authority determined by the Secretary under the preceding sentence shall be final for the purpose of section 201 of the Budget and Accounting Act, 1924, and the Congressional Budget Act of 1974.".
Mr. MUSKIE. Mr. President, section 208 of this bill, in effect, amends both theCongressional Budget Act and the Budget and Accounting Act of 1921. The latter is a concern of the Governmental Affairs Committee, and the former, the Budget Act, is of concern to both the Governmental Affairs Committee and the Budget Committee. Section 208 would have the effect of significantly and, in my judgment, drastically changing the way in which we count budget authority for housing in the congressional budget resolution. For that reason, I believe that section 208 should have been referred to either or both of the other committees, so that they might evaluate it because of its importance and significance. However, I think the issues are pretty clearly drawn with respect to section 208, and I have no objection to getting at the substance of the provision here this afternoon.
Section 208 removes tens of billions of dollars of federally assisted housing programs from congressional control by hiding the future year costs of these programs. For this year alone, some $34 billion in housing contract obligations would show as less than $60 million in the budget. The real costs of our decisions would be obscured.
As chairman of the Senate Budget Committee, I am deeply concerned that this bill would hide the true budget impact of these long term Federal obligations through cosmetic shifts in accounting that would obscure the real costs of these programs. The administration also has voiced its strong opposition to this change in accounting which violates sound budgetary practice.
In yesterday's RECORD, Mr. President, I included letters from Budget Director Bert Lance and from Secretary Patricia Roberts Harris, the Secretary of Housing and Urban Development, expressing their opposition to section 208.
Mr. President, under the current method which is required by law and supported by the administration and comptroller general, the full cost of these 15 to 40 year contract obligations is shown in the budget for the year in which the contracts are signed. Under S. 1523, only the first year costs of these long term obligations would appear in the budget in the year the obligation is incurred. The remainder of the contract costs would appear as uncontrollable costs in future years.
The present method has been used since 1975 throughout the Federal Government. It was adopted in the summer of 1975 after considerable debate regarding the fiscal year 1976 HUD-Independent agencies appropriation bill. At the time, there was deep concern that the Director of the Office of Management and Budget, at the time James Lynn, was proposing a change in budget authority in order to build up opposition to Housing Assistance programs. Mr. Lynn wanted to show budget authority by multiplying housing contract authority by 40 years, when most of the contracts would be signed for much shorter periods of time.
As the distinguished Senator from Wisconsin, the chairman of the Committee on Banking, Housing, and Urban Affairs and the floor manager of the bill, knows, the Senate Budget Committee supported the Senate Banking Committee in resisting the Lynn position or any other position not consistent with sound budgetary practices. The Comptroller General conducted a study of the matter at that time and issued a ruling that defined sound budgetary practice.
Specifically, he ruled that the budget must reflect the full cost of the housing assistance contracts in the year in which the obligation was entered to conform with the Congressional Budget Act; however, he ruled that the full cost should be based on the length of each proposed contract — not necessarily 40 years in all cases. The appropriations committee followed this practice in the HUD-Independent Agencies Appropriations Act for fiscal year 1976 and in all subsequent HUD-Independent agencies appropriations measures to reflect the full costs of these obligations.
Mr. President, section 208 reverses this sound budgetary practice, which was instituted by the Comptroller General in 1975, and should be opposed for the following reasons:
First, section 208 of S. 1523 would, in effect, remove assisted housing programs from the effective control of the Congress as a whole. Assisted housing programs fall within function 600 — income security — a function which includes large entitlement programs that are sensitive to changes in the national economy. Section 208 would produce an assisted housing budget authority number comprised of two things only: First, uncontrollable outlays from prior year contracts; and second, the relatively small first year outlays that would result from new contracts in the budget year. Thus under section 208, the controllable fiscal year 1978 budget authority for housing resulting from full funding of S. 1523 would be only about $0.3 billion. Within that amount, the entire section 8 program would have controllable budget authority of only $0.05 billion. Nevertheless, the bill would authorize over $1.2 billion in new annual contracts in fiscal year 1978 and some $34 billion worth of outlays over future decades. Let me repeat, if section 208 is adopted, a budget showing only $50 million in the 1978 budget resolution would trigger obligations of some $34 billion over future decades.
The congressional budget process could not affect the contract authority or those future outlays unless it became a "line item" process. The controllable budget authority for housing assistance, that is, the $50 million to which I just referred, would simply be too small in relationship to the budget totals to permit effective congressional review. With a level of $50 million in outlays, there would be no way for the congressional budget process to control a proposed $34 billion in Federal obligations. The proposed change would also weaken the ability of the Appropriations Committee to control these programs. By misrepresenting the budgetary impact of housing programs, the new method makes these programs uncontrollable, unresponsive to current year congressional decisions.
Second, section 208 would threaten the effectiveness of the budget process. The congressional budget process, much more than the executive budget process, is unavoidably tied to decisions on numbers in the budget document. If those numbers are deceptive or if that document's structure is flawed, the congressional budget process is pervasively weakened as a vehicle for directing Federal resources. Thus an ongoing concern of the Budget Committee must be the technical task of refining the structure of the budget and making it a more informative and useful tool for the Congress and the public. Incongruities of budgetary practice should not distort the design of Federal programs or bias the selection of financing mechanisms. The Budget Committee has a duty to improve and strengthen the budget process. Section 208 weakens the budget process.
Third, section 208 of S. 1523 would undercut Congress’ ability to consider the multi-year implications of current year decisions. The present method of calculating budget authority highlights the fact that current year housing contracts will produce uncontrollable outlays for at least 15 and as many as 40 years in the future. According to CBO current policy projections, which assume new contract authority of about $1 billion annually, outlays for assisted housing will grow from $2.5 billion or 0.6 percent of total outlays in fiscal year 1977 to over $7.5 billion or 1.3 percent of total outlays in fiscal year 1982. Assuming levels of contract authority proposed in S. 1523, the 1982 outlays would be significantly higher than that figure. The growth of uncontrollable outlays from prior year authority would continue for several decades if contract authority is kept constant at present levels.
The impact of section 208 would be enormous if HUD maintained a constant or gradually increasing level of new contract commitment as it is expected to do. In fiscal year 1991, 15 years after the start of the section 8 program, some of the original contracts will begin to expire. Thereafter, new contract authority would increasingly replace expiring contract authority.
Therefore, about fiscal year 2005 or 27 years from now, uncontrollable outlays for assisted housing would level off somewhere between $30 billion and $40 billion a year. By fiscal year 2005, the Federal Government would have been legally committed to a total of as much as $1 trillion in outlays. Under section 208 only about $1.5 billion of these commitments would have appeared as controllable budget authority. Under the method now in use, all of those commitments would have been subject to congressional review and vote before the contracts for them were signed.
Fourth, the present method provides a reasonable, readily understandable way to indicate roughly the total Federal outlays that may result from the expected use of contract authority. It relates the size of budget authority closely to current year decisions and indicates the approximate magnitude of future year outlays resulting from those decisions. Of course, total future outlays may actually turn out to be somewhat higher or lower than the budget authority figure. More sophisticated procedures might use computers to estimate outlays under given long term economic assumptions, but there is no way to be certain that those estimates would be more accurate. Federal outlays under section 8 will vary depending on the average income of tenants at the start of the contract, the rate of inflation in fair market rents, and the rate at which tenant incomes keep up with inflation. The program design makes it difficult to estimate precisely the outlays that will result from current year decisions. But the projected level of budget authority is likely to be close to the mark, and it should not be ignored altogether just because absolute precision is not possible.
Fifth, enactment of section 208 of S. 1523 would establish a dangerous precedent that could lead other special interest groups to develop new ways to disguise the budgetary impact of programs under their jurisdiction. Section 208 should not have been reported from the Banking Committee. The Governmental Affairs Committee and the Budget Committee have responsibility for changes in the Federal accounting system and the Budget Act. This section of S. 1523 proposes a capricious, deceptive definition of budget authority. The Banking Committee has itself designed housing programs using long term contracts so that current year decisions will affect Federal outlays for decades to come. The designers of Federal housing policy were convinced that housing programs require these long term obligations. That belief is not unwarranted. Housing is a costly capital good with a long economic life. Therefore, if the Federal Government is to assist low income families to have decent housing, it must make long term commitments that can be relied upon by tenants, developers, investors, and the many others involved in providing or using an assisted housing unit. If the Congress intends in its current year decision to provide those future year outlays, then its intent should be reflected appropriately in the level of budget authority. Enactment of section 208 of S. 1523 could encourage many other special interest groups to pressure congressional committees to both make and mask multi-year commitments. The example should not be set.
Mr. President, let there be no doubt that the precedent established by section 208 will be seized on to rip major loopholes in the Federal budget. At this very hour, there is circulating in the Defense Department a rent-a-ship proposal employing the very tactics to disguise the Defense budget which section 208 employs for this housing bill.
The proposal is for the Navy to have support ships built for the fleet which will be put in private ownership and leased back by the Navy. The hooker is that the Navy would show on the budget only the one year cost of the ship's lease, even if the lease ran for many years. This is precisely the proposal the Senator from Wisconsin is advancing for housing. Under the Senator's proposal, the rent-a-ship proposal would allow the Navy to build and pay for, for example, $25 billion worth of ships, even though only $1 billion of that commitment would show up in the budget the year the irrevocable commitments to the $25 billion are made.
Thus, just as in housing, under the Senator's proposal, the Defense budget would begin to build up huge future year costs for actual obligations to which the Federal Government was committed regarding ships. But only a small fraction of these costs would be reflected on the budget in the year the irrevocable, major commitments were made.
Mr. President, I ask unanimous consent that an excerpt from Shipyard Weekly, published by the Shipbuilders Council of America, which describes the rent-a-ship concept, be printed at this point in the RECORD.
There being no objection, the excerpt was ordered to be printed in the RECORD, as follows:
SHIPYARD WEEKLY,
Washington, D.C., May 19,1977.
"BUILD AND CHARTER" PLAN ADVANCED BY MILITARY SEALIFT COMMAND
In context of preparations for FY '79 DOD legislative package, Navy Department has placed before Pentagon and Office of Management and Budget (OMB) "build and charter" proposal which would be applicable initially to procurements of fleet oilers (AO), fleet ocean tugs (TATF) and surveillance ships (TAGOS) coming under cognizance of Military Sealift Command (MSC). Assuming concurrence, it is understood concept would ultimately extend to all naval fleet auxiliary vessels.
MSC — and predecessor Military Sea Transportation Service (MSTS) — has heretofore been restricted to charter contracts of no more than five years, with renewal options in five year increments. Current proposal would statutorily authorize charter to Navy of vessels "not now in being" for periods of up to 30 years after construction in U.S. private shipyards and delivery to U.S. Government. Financing of "build and charter" projects would be through working capital funds or other Navy funds for ship operating expenses. In late 1975, similar approach was turned down by OMB on grounds "it would provide authority to enter into contracts obligating the United States to make outlays from appropriations for which budget authority is not provided in advance."
Mr. MUSKIE. I call special attention to the fact that the Office of Management and Budget has been opposing the rent-a-ship concept on exactly the same grounds that the President opposes section 208 of the housing bill — that it violates sound, honest, and above board accounting practices.
Sixth, and finally, enactment of section 208 would endanger future support for low income housing assistance programs. The Banking Committee claims that large budget authority numbers have precipitated opposition to housing programs. The committee claims that showing the full runout cost of housing programs has placed them at an unfair disadvantage in the budget process. There is no evidence that this is the ease. Large budget authority numbers have not dissuaded Congress from supporting a rapid growth in housing programs in recent years. In the debate on the first budget resolution for fiscal year 1978, the Senate by a margin of 3 to 2 increased budget authority for assisted housing by $6.2 billion above the Budget Committee's recommendation.
In the 3 years in which we have been involved in the congressional budget process, Mr. President, Congress has approved between $75 billion and $80 billion for assisted housing.
Clearly, housing has fared no worse than other programs; in fact, it has fared much better than many. The Budget Committee does not arrive at budget targets by arbitrarily adding or cutting blocks of outlays or budget authority with no perception of the operation of underlying programs.
Those who have recommended cuts in housing budget authority have done so because of their judgment about the operating problems within the Department of Housing and Urban Development, the ability of housing programs to effectively absorb additional Federal resources, and the proper levels of future year outlays. Although there may be serious disagreement on these matters, the concerns of Senators will not be silenced by simply making budget numbers appear smaller.
In fact, opposition may be increased by charges of budget gimmickry. Under the current method, budget authority levels, though large, would tend to increase each year in proportion to the rest of the budget. Although outlays rise much more rapidly, supporters of housing programs can point to the past appropriation of large amounts of budget authority as clear evidence of congressional intent that those large outlays should occur. Under the Banking Committee method, budget authority for housing programs each year would rise rapidly, almost uncontrollably, and dramatically out of proportion to that of other programs. Supporters of housing could not justify new budget levels with previous budget decisions. Opponents could bring the rise of housing budget authority into line with that of other programs only by obliterating new commitments. Large changes in program activity would be needed to produce small changes in budget authority. Housing assistance programs cannot tolerate such instability.
Those are the reasons, Mr. President, which I thought it should be spread out clearly for the record because they are essential to an understanding of the implications of section 208 for the budget process.
I appreciate the patience of my good friend from Wisconsin in listening to me for these 25 minutes.
At this point I yield to my good friend from Oklahoma, the distinguished ranking minority member of the Budget Committee, who shares these views with me and whose support has been so indispensable to the success of the budget process.
Mr. BELLMON. Mr. President, I thank my friend and distinguished chairman of the Budget Committee. I have joined him in the position he has taken on this amendment.
I have to say that having admired the Senator from Wisconsin for years, particularly on his stand favoring fiscal responsibility, I am hopeful he may see the merit in our position and perhaps even agree to accept the amendment before we are through.
Mr. President, I strongly support S. 1523. I feel that the goals of this legislation are laudable and that by expressing concern for one or two specific sections of this bill I do not intend in any way to detract from what I consider to be the excellent intent of the legislation.
In fact, I have every intention of supporting this bill on final passage because I do support the goals intended here.
But let me express grave concern about section 208 of this bill. This section would drastically change the way we account for budget authority for housing. This may appear to be a purely technical budget issue, but it is in fact a truth-in-budgeting matter of great importance and impact far beyond a mere technicality. The accounting change which would be mandated by this section of S. 1523 would have us recognize in this year's budget only the first year impact of housing commitments. But this first year cost is far short of the total liability. The total liability would involve outlays not just the first year but also an additional 15 to 40 years, depending upon the different types of housing involved in the package. Each future year's cost of this package would, under the new method of accounting, merely show up in the future year's budget as "uncontrollable" costs. At the present time, the full amount of the commitment is subject to prior congressional review since the full commitment is put in the budget before the contracts are signed. Under the new method, we would only see the tip of the iceberg, and would then be shocked and helpless each year when the "uncontrollable" costs show up in the budget.
Mr. President, we have already heard much about uncontrollable costs in the budget. The distorted accounting practices as suggested by S. 1523 would add to the problem significantly.
Mr. President, I should point out that this week we are publishing the first of our weekly scorekeeping reports for fiscal year 1978. It should be noted that in this first report we have a budget with estimated outlays of $461 billion. Yet we are already committed to spend $217.6 billion due to prior year congressional actions. The $217.6 billion is committed. before the first appropriations bill or entitlement legislation has even come to the Senate floor.
Mr. President, I believe the significance of that should be carefully studied by each Member of the Senate. What we are saying here is that because of prior year actions, we are already committed to spend almost 47 percent of the budget. This is the amount of uncontrollables that are in the budget due to prior years' actions by the Congress. If we go along with section 208 of S. 1523 we would further complicate our problem by adding more commitments based on prior year actions.
Supporters of section 208 believe that housing programs are hurt by the current practice of showing the entire budget authority to be committed at the time the commitment is made. But the evidence is to the contrary. Housing programs have done extremely well during the last 2 years while the budget process has been in effect. This can be demonstrated as recently as 1 month ago, when a floor amendment which added housing funds to the budget resolution passed easily.
Housing programs have grown, Mr. President, from $17 billion in fiscal year 1976 to $34 billion in fiscal year 1978. That is a doubling in only 2 years. So there is no evidence that the present method of handling the funding and reporting of housing programs budget authority is in any way restraining Congress from making the necessary funds available for housing programs.
I fail to see the danger in the present practice, but I can easily see the extreme danger of the change that is suggested in section 208.
First of all, the accounting change is misleading and would give a distorted picture. When we make a housing commitment, we are not just committed for the first year costs; we are committed to the full amount to liquidate the contracts, and sometimes these contracts run from 15 to 40 years.
Second, failure to recognize the true costs at the outset of programs merely adds to the uncontrollability of the budget in future years and reduces our ability to establish spending priorities, since so much of our resources turn out to be committed in advance.
Third, distorted accounting and trickery here will invite deception from other sources. Other committees will surely try imaginatively to hide the true costs of their programs. This will invite the ultimate collapse of our efforts to control the Nation's economy.
Mr. President, there is virtually universal support for the current method of accounting for budget authority and, in my judgment, virtually no support for this proposed change. The HUD position is clearly stated in Secretary Harris' letter when she says, "The Department opposes section 208."
OMB's position is clearly stated in a June 2 letter from Director Lance, where section 208 is described as a serious threat which would seriously mislead and destroy scorekeeping.
So, Mr. President, both these highly placed administration officials, the Secretary of HUD and the Director of OMB, are on record opposing section 208. Apparently, they see no danger in handling the reporting of the BA under the present rules and established policy, and they do not want to move to a new system which they feel would be dangerous. I certainly share with them. that feeling.
Mr. President, I strongly urge support for the Muskie amendment, which would delete this change and which would maintain the present practice of accounting.
Mr. BROOKE. Mr. President, will the Senator yield for a question?
Mr. BELLMON. I am happy to yield to my friend.
Mr. BROOKE. I have the greatest respect for the Senator from Oklahoma, and certainly for the Senator from Maine, who is proposing this amendment. With the exception of the Senator from Maine, because he voted against it in committee, would the Senator from Oklahoma agree that when the Budget Committee looked at the housing budget in considering the budget resolution, the reason for its reasoning behind the committee action so far as this program was cut in housing funds was the high runout costs due to the accounting method for computing budget authority.
Mr. BELLMON. Is the Senator referring to the committee action on the floor in opposing the Proxmire amendment?
Mr. BROOKE. In the committee.
Mr. BELLMON. In the committee?
Mr. BROOKE. I think it was a vote of 8 to 1, if I am not mistaken.
Mr. MUSKIE. If the Senator will yield, the vote was 7 to 5. The reason given by Senator CHILES, who was the sponsor of the amendment, was his concern for recent operating problems within HUD and for the growth of future outlays. This concern led him to favor a level of operations in housing programs in fiscal year 1978 that would require a lower budget authority number. That was his argument. I wish he were here in the Chamber. He intended to be here. He would describe his argument better than I. I voted against his amendment, as the Senator from Wisconsin has correctly pointed out. But Senator CHILES' amendment was not based on the issue that the level of budget authority was too high.
Senator CHILES did not see the justification for the level of operations the administration requested, for as much as the Banking Committee requested, or for as much as I supported. That was the reason, may I say to the Senator. The Senator might disagree with the judgment of the Budget Committee but the judgment was not just based on the size of the budget authority numbers.
Mr. BROOKE. And the Senator from Maine disagreed with the judgment of his Committee on Community Development as well. I thought it was the view of other members of the committee that the enormously large budget figures for housing troubled him.
Mr. MUSKIE. It was really a major operating problem, as he saw it.
Mr. BELLMON. The problem was that HUD had not been able to get the 400,000 units committed which are allowed by the present funding. He felt we could cut back and not restrain the activities of the Department.
Mr. BROOKE. My point is it is very misleading, and I believe we in housing suffer from it, when the cost figures are run out for up to 40 years. These amounts do not apply to the fiscal 1978 budget at all. The Senator is talking about 40 years down the road. When we look at it in 1978—
Mr. BELLMON. If we do not account for it in 1978, when do we account for it?
Mr. BROOKE. But it is not the true picture. It is 1978, 1979, and all the way down the road to 2017. That is the point I am trying to make. I thought it was the existence of the numbers which really caused the Senator to vote as he did in committee. That is why I was asking the Senator, rather than the distinguished Senator from Maine, who did oppose cutting the housing budget in committee.
But he tells me his vote was on the basis that he believed that the programs were justifiable, whereas Senator CHILES did not believe so.
Mr. PROXMIRE. If the Senator will yield, I believe the Senator from New Mexico made this point with great effect on the floor. He made a speech which I believe turned around a lot of Senators. He got a lot more votes on his amendment, which tried to knock out the $8.1 billion, than anyone expected him to get. It was our fault that he was not answered. The point the Senator made was we are not talking about $200 million, the effect for 1 year, but $6 billion.
Mr. DOMENICI That is correct.
Mr. PROXMIRE. It was not put in context. The Senator was talking about $6 billion in a budget that would not be $450 billion, but a budget that would be $15 trillion, 15,000 billion dollars over a period of 30 years. Put the $6 billion into that context and it is less than one-tenth of 1 percent.
I talked to a number of Senators and they were very impressed by the Senator from New Mexico.
They were so impressed they said, "Bill, I am sorry, but I have to leave you on this one. Senator DOMENICI was right. Six billion dollars is a whale of a lot of money. That is an amount which seems uncontrollable, and I am just not going to go down that path of $6 billion."
I am sure that they were not thinking of the fact that it is $6 billion in a context of $15,000 billion.
Mr. DOMENICI. I did not win on the amendment.
Mr. PROXMIRE. When it is put in that context, it is a little different.
Mr. DOMENICI. I did not win, I say to the Senator.
Mr. PROXMIRE. The Senator almost did win.
Mr. BROOKE. They were looking at it in the context of fiscal year 1978.
Mr. DOMENICI I want to answer that shortly, because I knew that is what the Senators were going to talk about.
I want to say that, from my own standpoint in the committee, when I voted, I do not think it is pride on my part to say that I think that, after 3 years on the Committee on the Budget, I understand what budget authority means. I understand that $6.5 billion in budget authority for housing does not necessarily mean very much in outlays next year, but it means that we are committed to $6.5 billion precisely as prescribed in the Budget Act.
Mr. BROOKE. That is true.
Mr. DOMENICI. The problem I have with the amendment is that I do not think that, in a housing bill, we should mandate what budget authority is when we have a substantive law, that affects both Houses of Congress, that defines budget authority. I think if the committee has a case for people not understanding what budget authority means, and I seriously doubt that people do not understand it and I hope the Senators know that the technicians that are advising us clearly understand it. We are not hung up on a few million dollars in budget authority.
When the Senators come before us representing the authorizing committee, we clearly understand that part of it is 15 years, part of it is 40. If the committee would like us to put more in our report, I am sure the good chairman would agree that when it puts function 600 in for budget authority for housing, we will put five paragraphs in it if they like, saying one-third of it is for 15 years, one-third is for 30 years, and one-third is for 40 years, and I think everyone is capable of understanding.
I think the chairman and the ranking member have expressed the substantive points and have tried to talk with the Senators here on the floor about their concerns. As the younger member of that committee — one who, perhaps, is not as inhibited as they — I think it is almost incredible, I say this to both of my good friends, that they would come here with a housing bill and define budget authority as they did. Look at what they are asking for. Look at the substantive committees, which write authorizing legislation, that do not like the fact that we are reporting 10 years of what it is going to cost for their bill. They come down here, and on the 190th page of a bill, they put in here, in section 293, that for budget authority purposes for this bill, they are only going to report 1 year instead of the 10. And it passes.
Well, that is not right. We have a Budget Act that has definitions in it that we adopted. What budget authority is very precise. It is precisely what we have been putting in under Function 600 for housing.
The committee should not come along, in a housing bill — and I am not here to argue or to move to strike it on parliamentary grounds because I think it is a good exercise. I think all the Senators ought to understand that if we let an authorizing committee that concerns itself with housing come along here and, in section 208, say what this committee is saying — and, listen here, they did not just say, "Let us change the way we do it." They said, "Here's how we want it done, and when we finish adding it up, it is almost outlays per year."
Nobody reports budget authority on the basis of outlays. Maybe some people do not understand that. I believe the committee believes that most staff people understand it. I believe they believe that most technicians on the Budget Committee understand it. I think they must believe that we understand it at this point.
That is really why I stayed down here. I do not have as much to say as they do. I hope no one understands that my argument is against the programs in this bill. I hope no one understands the Muskie amendment to be against programs in this bill. I think the committee ought to take it as a challenge to explain its budget authority when it comes to us and when it comes to the floor.
The committee knows how to do that. If budget authority is a 40 year commitment and they come down here during the budget process, just tell them that and say, "If you want to be against housing, just go along with cutting budget authority here."
We will understand that.
But it cannot be that they can come along with a bill and say, "We are going to dictate budget authority in it to suit us because we are afraid people are going to misunderstand the old way they are doing it"— the way dictated by the law, the way dictated by everyone that has anything to do with good accounting practices. We just cannot sit here and say, because there may be some misunderstanding, that this particular committee, with the most wonderful motives in the world, because they are providing housing and community development and new kinds of projects, ought to come down here and tell us that.
The Senator from Oklahoma said, I think, in his most casual way, that he really hoped Senators would agree to the amendment and agree to delete this section. I almost thought maybe he was just sort of chiding the committee. But as I stand up here, I am saying, "I think you ought to."
I do not think the committee ought to make the Senate vote on the Muskie amendment. I think they have made their point that Senators ought to concern themselves a lot about what budget authority means in housing. Today we are reminding them that it is apt to be a very big figure because it is 40 year commitments and 30 year and 15 year commitments. But I do not think that, in good conscience, they ought to dictate a budget authority figure that will be included in this next budget the way they have chosen to do it here.
I think it is presumptions and, excuse me for saying it, I think it is self-serving. And excuse me for saying it, but I honestly do not believe that an authorizing committee should do that.
I would suggest to Senator STENNIS, on Armed Services, if this works, let him put some very smart people into cutting budget authority in the military. He can take those 10 year contracts and show them as two and put in a definition for shipbuilding and say that, for purposes of BA only, they put in 2 years and put in an authorizing committee.
I do not think it is right. I, for one, say to Senators that I believe the Senate is beginning to understand budget authority. I do not believe we are going to lose good housing programs because of budget authority being a big figure. I do not think that we should be changing a traditional, legalized budget authority definition in a bill that authorizes the very programs that the Senators are talking about.
Mr. BROOKE. Maybe the Senator ought to review budget authority generally. I think that ought to be done. I think the Senator has made a clear case that we ought to review budget authority.
Mr. DOMENICI. Perhaps.
Mr. BROOKE. Obviously, if we were to vote budget authority for 1979, 1980, 1981, 1982, 1983, and 1984, it would not be contained in the fiscal 1978 budget. Is that not correct?
Could the Senator answer that question?
Mr. DOMENICI I did not understand the question.
Mr. BROOKE. If we were to vote authorizations for 1979, 1980, 1981 — say, 5 years — it would not be contained in the fiscal 1978 budget.
Mr. DOMENICI. Of course it would. Of course it would. If we have a bill that has a 5 year authorizing life and has $500 million a year for each of 5 consecutive years—
Mr. BROOKE. But it would not be included in the 1978 budget.
Mr. DOMENICI. Of course, it would show up in budget authority for 1978 if it has a 5 year life and is authorized.
Mr. BROOKE. I ask the chairman, would that show up in the 1978 budget?
Mr. MUSKIE. Would the Senator restate his question? His face was turned away from me and I did not hear clearly.
Mr. BROOKE. If we were to authorize, say, for 5 years, starting in 1979, would that show up in the 1978 budget?
Mr. MUSKIE. I think the Senator needs to make a distinction between multi-year authorization bills, which authorize the appropriation of budget authority in subsequent years, and contract authority, which authorizes an agency this year to sign contracts that trigger future outlays. If we have multi-year authorization bills with specific numbers of budget authority in each of, say, 5 years, the Congress can still control those 5 years through the budget and appropriations process.
But we cannot control contracts once they are signed. Under section 208, once we approve the $1.2 billion in annual contract authority that is involved, there will be only $60 million, roughly, in outlays in 1978. Outlays thereafter would be entirely outside of the control of the budget process of each year for 15 years, 30 years, or 40 years.
Mr. BROOKE. But in the example I gave, it would not control the appropriations process.
Mr. MUSKIE. The difference between the two is this: that with respect to the use of contract authority, they are not subject to control through the appropriations process after they are signed.
Under current practice budget authority is controlled in the appropriations process before the contracts are signed.
But under section 208 of the committee's bill, contract authority would be released to administrative agencies that could result in outlays of $34 billion; only $54 million of which would be reflected in appropriated budget authority that year.
Once that contract authority is released to the appropriate agencies, it is not subject to control by the Appropriations Committee.
That is the difference.
Mr. DOMENICI I wonder if the Senator from Massachusetts will let me just finish this statement and then I will be delighted to yield.
I am trying to make a point that we are really dealing with substantive budget law. That is why I have said what I did. I think it is substantive budget law and I will read section 3, subparagraph 2, under definitions. I believe the committees that worked so long and hard on the budget process when they defined this area meant precisely the area we are talking about here:
(2) The "term budget authority" means authority provided by law to enter into obligations which will result in immediate or future outlays involving Government funds.
I think that is the difference that we should not be changing in a housing bill when it is part of the substantive budget law.
If they would like us to review budget authority in general, that is the prerogative of the institution, or the committee. But I repeat that to do that in the bill I really believe is a very dangerous precedent and the Housing Committee ought to seriously consider whether they want to set that precedent for authorizing committees.
I thank the Senator for yielding to me.