September 9, 1977
Page 28473
Mr. STONE. Will the Senator yield half a minute for a question?
Mr. CHILES. I yield.
Mr. STONE. Is the Senator from Florida not aware, as the junior Senator from Florida is aware, of the fact that what has happened is that all these folks have filed application, the applications have been approved in principle, locally and regionally, and are sitting on the desks here in Washington because they do not have the money?
Mr. CHILES. That is exactly correct.
Mr. NUNN. I completely agree with the Senator from Florida (Mr. CHILES) regarding the crop insurance situation. The SBA's physical disaster loan program is not the best way to provide relief from disaster for farmers. It is the only way this year that it can be done, however.
The crop insurance program would be much better because farmers would not have to pay the money back. They would contribute to their insurance, perhaps subsidized by the Federal Government to some extent, but the SBA's program is the only road for many at this time.
I also believe we must take another look at some of the provisions of the applicable portions of SBA's statutes. These are not new law, but in application to farmers there may be changes that will have to be made. There may be abuses in the program that we need to take a look at. But, right now, the program is desperately needed by thousands of farmers and, even though we may have some abuse, I think it is the price we must pay to keep a vital segment of our economy going, both in our section of the country as well as in many other sections.
Mr. President, I ask unanimous consent that Mr. CHURCH be added as a cosponsor on this amendment.
The PRESIDING OFFICER. Without objction, it is so ordered.
Mr. NUNN. I thank the Senator from Maine for yielding.
Mr. MUSKIE. Mr. President, I yield myself 5 minutes.
Mr. President, I said at the outset that I discussed this with the distinguished Senator from Georgia (Mr. NUNN) , with Senator STONE and Senator CHILES, and I think others, over the last 24 hours. I think we have reached an accommodation with which the Budget Committee can live for the moment.
But I think it would be useful to identify some of the budgetary problems created in this body by giving some of the background for the legislation which gives rise to this amendment.
The legislation was not considered in committee. It was added as a floor amendment, and I will read that floor amendment, which can be found on page 40338 of the CONGRESSIONAL RECORD dated December 12, 1975. It reads as follows:
It is the declared policy of the Congress that the Government, through the Small Business Administration, should aid and assist small business concerns which are engaged in the production of food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricultural related industries; and the financial assistance programs authorized by this Act are also to be used to assist such concerns.
There is other language in the amendment of a definitional quality, but that is the substance of it.
In due course, the question arose in the Senate debate as to what that amendment would cost, and on page 40325, this is what was said on that point:
This adds nothing to the appropriations and adds nothing to the authorization of the Agency.
The implication was that this was simply an addition of an eligible activity to the activities already eligible for assistance under the SBA program and that the resources traditionally made available to SBA would be sufficient to take care of its traditional clients and the new one.
There were no guidelines, no consideration of any requirements that this new client might bring to the operation of SBA — simply a good will gesture to the farmers of the country that a new program was available for them. There was no consideration of the future costs — whatever consideration there was dismissed future costs. Nobody brought the Senate Budget Committee this problem, no committee of the Senate, no agency of the executive branch.
I am sure if the Budget Committee had been asked to consider disaster assistance to farmers in the circumstances described by the distinguished Senator from Georgia, the Budget Committee would have been sensitive to the problem and the emergency and would have taken steps to bring relief.
But it was not until yesterday afternoon with the budget resolution already on the floor that I was asked to consider the amendment which the Senator from Georgia has just called up.
Now, I say all this not by way of criticism of the Senator from Georgia or of the farmers whose assistance he seeks to provide. My criticism is directed at the method by which this program was created, without adequate hearings, without adequate consideration by the committees. And my criticism is directed at the agencies, specifically SBA, for not preparing this budget estimate and getting it up here so that the Budget Committees and the Congress could give adequate consideration to it.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. MUSKIE. Five more minutes.
Mr. President, we do not yet have a recommendation from the President. We do not yet have a budget estimate from the administration. We do not yet have a recommendation from SBA. And we are being asked now to accommodate the budget resolution to that kind of ambiguous situation.
As I say, I think we have worked out an accommodation which is a practical one. But I am reciting this history so that those Senators who read the RECORD may begin to contemplate the consequences of some of the hasty actions that we all too often take on the floor of the Senate.
We have taken two yesterday and today that will add between them in the first full budgetary year $2.1 billion a year in budgetary cost. And we have done it in each case with only a handful of Senators on the floor during the debate, considering the consequences and understanding the facts. Then we just casually and blithely added $2.1 billion for first year costs when those two programs are fully implemented. We do that over and over again, and then the Budget Committee gets the kind of criticism it got from Members this afternoon. We hear that the Budget Committee brings in deficits that are too high and spending that is excessive. Whose responsibility is it, in addition to the Budget Committee, to watch those kinds of consequences?
So I use the occasion of this amendment to say this. I repeat, we have tried to work it out so that the farmers who have real need and who deserve the attention of the Government will get it. But I urge upon my colleagues that we examine our habits on this floor a little more carefully and with a little greater sense of restraint than we have in the past.
Having said that, I say to my good friend from Georgia — and I appreciate the quality of the discussion we have had off the floor on this subject — that the Budget Committee obviously has not had an opportunity to consider this. So the solution we have taken is to permit some room in this budget resolution, with the understanding that either through a third concurrent resolution process and/or Appropriations Committee consideration of the program implications of the problem, we will pursue a more complete remedy. I am perfectly willing to do that. I think the budget process should be that flexible, so that the farmers whose needs were addressed by this amendment back in 1975 will not be left hanging high and dry.
Mr. President, the issue raised by this amendment is not the kind of issue the Senate should have to deal with as it shapes the budget resolution. We should expect floor amendments to the resolution reported by your Budget Committee because Senators disagree on national priorities and on the desired level of Federal revenues and spending. But that is not the reason for this amendment. I am sure that if the Budget Committee had known that drought-affected farmers were generating a huge flood of applications for SBA disaster relief loans, the Budget Committee would have recommended a budget resolution that could accommodate that need. I must say as one Senator that there is something very disturbing about the events that brought about this state of affairs, but I am certain that the Budget Committee would have supported adequate assistance to farmers whose crops were lost by drought.
If there is no disagreement on national priorities, why is this amendment being offered? Is it being offered because just over a month ago, when the Budget Committee was marking up the second resolution, there was not an inkling from anywhere in the executive branch that there might be a need to spend an additional $1.2 billion and as much as $2.5 billion through the SBA disaster loan fund. There was not a hint that the budget of the Small Business Administration might be expanded by fourfold in order to provide emergency credit for agriculture. There was not a word to indicate that the SBA disaster loan fund would be increased to a level 20 times the amount that the Congress had been led to expect.
This amendment is here not because of a disagreement among Senators, it is here because Federal agencies have failed to provide us with the information we need to carry out our responsibilities. And that is intolerable.
The congressional budget process was created to strengthen the hand of the Congress, and to give the Nation more effective fiscal policy. It was created so that we could make individual decisions in the light of all of the demands on Federal resources. The process established by the Congressional Budget Act is now no mystery. Each of its steps was designed to provide the Congress with information it needs to make difficult choices. The process is working well because of broad cooperation and effort throughout the Congress.
However, the Congress cannot control the Federal budget if agencies cannot, or do not, accurately estimate their need for funds. The law that made farmers eligible for SBA assistance was not recently thrust on the Small Business Administration — it was enacted in June of 1976.
The drought has been a matter of concern for many months. The drought disaster areas were recognized 2 or 3 months ago. The Small Business Administration has little excuse for waiting until 10 days before the deadline for passage of the second budget resolution and then informing the Congress of its desire to increase spending by at least $1.2 billion and as much as $2.4 billion. The January budget indicated that the SBA disaster loan fund would require only $20 million in budget authority. That estimate was repeated in the mid-session review of the budget that the administration completed by the end of June. There was no mention of massive new requirements for this program when the Budget Committee staff contacted Federal agencies in preparation for our second budget resolution markup in July.
Whatever the Senate's decision is on this amendment, I am one Senator who will not accept this level of performance from Federal agencies in the future. This budget resolution will bind the Congress for the rest of fiscal year 1978. Each agency must develop the skills to provide accurate estimates of the need for budget authority and of the outlays that will result from their operations. Congress must have this information on a timely basis.
Mr. NUNN. I say to the Senator from Maine that I appreciate his position, and I understand his analysis of the amendment that was adopted in 1975.
It is my understanding — and we can have the staff check this out; I am not absolutely certain of it — that what we are talking about is SBA's 7(b) (1) program. The way the law was worded, the farmers already would have been eligible for these funds in a disaster even if that amendment, which made farmers eligible for other SBA funds, had not been adopted. We can check that. It is not really important. It does not really affect the merits of what the Senator has said. I voted against that amendment when it was presented on the floor because I did not think it had been adequately considered.
However, we are in a position now where we have virtually an entitlement program on the books, which is SBA's 7(b) (1) program. It is virtually open ended and has been interpreted as applying to farmers. Had it not been, they could have brought suit in the courts, with a reasonable chance of success. That program is what we are trying to fund here.
I have every obligation to my farmers in Georgia, who are hurt badly, to pursue every avenue possible, to see that the funding is there for the entitlement program which others have utilized in similar circumstances. That is where we stand.
The Senator from Maine is absolutely correct about the fact that many measures are passed on this floor, the fiscal implications of which we do not adequately consider. We are doing a better job now, thanks largely to the Senator from Maine and the Senator from Oklahoma in pointing out these matters.
I agree with the position of the Senator from Maine, and I agree with the proposed compromise.
The PRESIDING OFFICER. The time of the Senator has expired.
Mr. MUSKIE. I have 2 minutes remaining, and I want to make another point. I yield 30 seconds
to the Senator.
Mr. NUNN. The administration has not come forth with any kind of really good estimates in this area. I think we all have been let down by the administration, SBAand OMB, in not coming forth sooner than they have. The first I knew about the potential for running out of money was in the last 2 days. I serve notice on SBA, OMB and the Agriculture Department that they need to turn their attention to this program. They need to propose any kind of amendments that need to be adopted in order to safeguard the taxpayers so that they will not be abused, and they need to do this immediately. We cannot wait forever on this. We will have to have their recommendations not only as to the amount of money that is going to be needed, but also any kind of changes that need to be made in existing law. That is their obligation, and I hope we will hear from them on that in the immediate future.
Mr. MUSKIE. Mr. president, do I have 2 minutes remaining?
The PRESIDING OFFICER. The Senator's time has expired.
Mr. MUSKIE. I yield myself 2 minutes on the bill.
One of the problems is this: Farmers Home loans are available in disasters. Unfortunately, for the poorer tenant farmers and those at the bottom of the pile, they cannot meet the Farmers Home Loan eligibility requirements: They must demonstrate that they have no access to other lending facilities. That requirement does not exist with respect to this. With this program existing, if we give it open ended funding, we are just going to attract not only those who have real need but also those who could provide for their needs through Farmers Home or other lending facilities. This is just going to attract a runaway kind of program, unless we write some guidelines and some definitions and some requirements that will limit the application.
For example the $1.2 billion in the Senator's amendment is almost twice as large as the entire budget request for SBA, and it is 10 times the size of the request for the disaster loan fund. I cite those figures just to demonstrate the kind of pressures that have been generated behind this program because of the need and because of the lack of eligibility requirements that limit the applications.
That is the sort of thing we have to address, and it is for the purpose of addressing them that I urge the Senator to accept the more modest figures we have agreed to include in the budget resolution, so that there will be ample time for the appropriate committees to write appropriate guidelines and safeguards for this program.
Mr. MAGNUSON. How much is that?
Mr. MUSKIE. We are providing $175 million in this budget resolution. I say to the Senator from Washington.
Mr. NUNN. I believe it is a rounded $0.2 billion, and I think the staff can explain the reason for that figure.
Mr. MAGNUSON. Will the Senator yield me a minute on the bill?
Mr. MUSKIE. I am happy to yield.
Mr. MAGNUSON. I had hoped that we would accept the amendment of the Senator from Georgia in the full amount. I did have some discussion in the Budget Committee, of which I am a member, that we might have this compromise. However, I ask this question: As the Senator from Georgia has well pointed out, this is only a temporary procedure for the legislative purposes here today, and we have to move ahead with this program and do something about it as fast as possible.
In my State, 33 counties are eligible. There is an immediate rush of loan applications all at once. But the complaint is that they cannot get any kind of loan. The criticism is very legitimate. Unless we are going to provide the funds, we should not have said that we were going to do something for these farmers.
There must be some immediate speeding up of this procedure and some action. I hope I have the assurance of the chairman of the Budget Committee that we can move on a third budget resolution as soon as possible, if we decide they have not been doing what they should be doing.
Mr. NUNN. I have the assurance of the Senator from Maine that he will consider a third such resolution. I do not want in any way to misinterpret him. He has not said that he would support it, but he would consider it as an item of an emergency nature and give us a chance to consider a third resolution, if it is deemed to be needed.
Mr. MUSKIE. Exactly.
Mr. NUNN. Is that a correct interpretation?
Mr. MUSKIE. Yes. May I say the Senator ought to understand and believe that the budget process is flexible enough to respond to emergencies. The method available for that purpose is additional concurrent resolutions. In this case it would be a third resolution.
I would regard the Budget Committee as obligated to respond to requests for emergency action requiring or having budgetary impact. What we might do with the requests when they come before us will depend on how we are impressed by their merits. But the process should be made available, and I assure the Senator I will see to it that it is.
Mr. NUNN. I thank the Senator from Maine.
I might say to the Senator from Washington that I have been in his State in recent weeks. I know how dry it is there, and I know you faced situations similar to what we faced in Georgia. I know the need of your farmers.
I would ask the Senator from Washington to join with Senator STONE from Florida and myself and many others in a meeting with OMB, SBA, and with the Department of Agriculture to see if we cannot iron out these difficulties in the coming week. Next week we are going to try to get together.
Mr. MAGNUSON. Just 30 seconds. You will not believe this, but although this drought has been going on out there for a long, long time, and everybody has known about it, up to yesterday there was a total of only three applications approved for the big sum of $302,000 in my State. Now, there is something wrong.
Mr. NUNN. I might also say to the Senator—
Mr. MAGNUSON. Three hundred and two thousand dollars. When millions are involved in this problem out there.
Mr. NUNN. I would also say it is my understanding that the checks, even on applications which have been approved, have been held up because the administration, having now gotten into this program, is concerned about it and, quite frankly, I understand their concern. But what we need is some rational thought and not handwringing. We need some people to examine what we really are going to do, and who can come up with some answers and make sure those who need the program get it. Those who do not absolutely need it should not be eligible. That is going to take some changes in the law and some administrative initiative.
Mr. President, I ask unanimous consent that the Senator from Washington (Mr. MAGNUSON) and the Senator from Mississippi (Mr. EASTLAND) be added as cosponsors.
The PRESIDING OFFICER. Without objection, it is so ordered.
UP AMENDMENT NO. 789
Mr. NUNN. I send to the desk a compromise which basically increases the budget authority and the outlays by $0.2 billion as opposed to the original proposal. This would be a compromise agreed to by the Senator from Maine (Mr. MUSKIE) that would have in mind the possibility of a third budget resolution once the administration makes its case for what is needed.
The PRESIDING OFFICER. The pending amendment is withdrawn, and the clerk will report the new one.
Mr. NUNN. I ask unanimous consent that the Senator from New Mexico (Mr. DOMENICI) be added as a cosponsor.
The assistant legislative clerk read as follows:
The Senator from Georgia (Mr. NUNN), for himself and others, proposes unprinted amendment
No. 789.
The amendment is as follows:
On page 1, line 11, strike the numeral and insert in lieu thereof "$501,400,000,000". On page 2, line 2, strike the numeral and insert in lieu thereof "$459,900,000,000". On page 2, line 5, strike the numeral and insert in lieu thereof "$65,075,000,000". On page 2, line 7, strike the numeral and insert in lieu thereof "$779,275,000,000". On page 2, line 9, strike the numeral and insert in lieu thereof "$79,275,000,000". On page 3, line 17, strike the numeral and insert in lieu thereof "$8,200,000,000". On page 3, line 18, strike the numeral and insert in lieu thereof "$10,600,000,000".
Mr. STONE. Did the Senator from Georgia include all of the original cosponsors on this amendment?
Mr. NUNN. I ask unanimous consent that all the original cosponsors on the original amendment be included in the compromise amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. HOLLINGS. Mr. President, this past growing season has been one of the worst, if not the worst, in South Carolina's history. That the drought and heat conditions have devastated much of the State's crops is evidenced by the fact that President Carter's disaster declaration covers nearly all 46 of our counties.
The assistance provided by the Small Business Administration's physical disaster loan program can have a beneficial impact on reducing the dimensions of this natural disaster. South Carolina has over 17,000 farms and it is conservatively estimated that as many as 60 percent are affected and will seek help from the Small Business Administration. The Small Business Administration district office advises me that to date applications totaling $28 million have been received. However, since the State only recently qualified for the program this figure will shoot up dramatically.
In cosponsoring this amendment to increase money available for this Small Business Administration program, I am persuaded by several points I wish to share with you.
First, the money provided by this amendment will go to the farmer in the form of loans. The money will be paid back. Our farmers are not looking for a handout, but they do need our help. They are hardworking people who have been affected by a terrible natural disaster that is simply beyond their ability to manage.
Second, the disaster not only has hurt the growers, but also those who supply them. The non-farm service industry needs help, in most instances as much as the growers.
Third, the farmer is a very good risk. His roots are in the land and year after year — boom or bust — he has stayed with the land
Fourth, the American farmer is probably the most efficient component of our economy.
However, because of his efficiency he is constantly beleaguered with the problems of his market — as evidenced with boom-burst cycles and surpluses.
For these reasons and those offered by my colleagues I urge you to join with me in supporting this amendment.
Mr. MUSKIE. Mr. President, I take it that new amendments are eligible for another 30 minutes of time. I yield back my time.
Mr. NUNN. If I have any, I yield it back.
The PRESIDING OFFICER. The Chair would respond that that is not so. There are only 14 minutes remaining on the bill itself.
Mr. MUSKIE. I yield back my time.
The PRESIDING OFFICER. All time having been yielded back, the question then is on agreeing to the amendment of the Senator from Georgia.
The amendment was agreed to.
Mr. MUSKIE. Mr. President, I move to reconsider the vote by which the amendment was agreed to.
Mr. LONG. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. MUSKIE. Mr. President, I yield the remainder of my time on the bill to the distinguished Senator from Louisiana (Mr. LONG) .
May I ask for the yeas and nays on final passage.