April 19, 1977
Page 11253
WAIVER OF THE CONGRESSIONAL BUDGET ACT WITH RESPECT TO CONSIDERATION OF H.R. 3477
Mr. ROBERT C. BYRD. Mr. President, I ask unanimous consent that the Senate proceed at this time to the consideration of Calendar Order No. 70, Senate Resolution 126, the resolution waiving section 303(a) of the Congressional Budget Act with respect to H.R. 3477, with the understanding that upon the disposition of the waiver — which would naturally flow without the request — the Senate resume the consideration of H.R. 3477.
The PRESIDING OFFICER. The resolution will be stated.
The assistant legislative clerk read as follows:
Resolved, That (a) pursuant to section 303 (c) of the Congressional Budget Act of 1974, section 303(a) of such Act shall not apply with respect to the consideration in the Senate of the bill (H.R. 3477) to provide for a refund of 1976 individual income taxes and other payments, to reduce individual and business taxes, and to provide tax simplification and reform;
(b) That waiver of this section is necessary in order to enable the Senate promptly to consider legislation providing urgently needed economic stimulus measures; and further
(c) That no point of order shall lie under section 401(b) of the Budget Act with respect to consideration of title I of such bill, the budgetary impact of which has already been considered by the Congress in its deliberations on the third concurrent resolution on the budget for fiscal year 1977.
The PRESIDING OFFICER. Without objection, the Senate will proceed to its immediate consideration. Under the law, there is a time limitation of 1 hour, to be equally divided. Who yields time?
Mr. MUSKIE. Mr. President, I yield myself such time as I may require.
Under section 303 of the Budget Act, whenever new revenue legislation is proposed to the Senate which becomes effective in a fiscal year for which no first budget resolution is in effect, it cannot be considered unless the Senate adopts a waiver of the requirement that such legislation be reported to the Senate after the May 15 in question.
In the case of the tax bill which is on the calendar and is pending, the waiver resolution was reported to the Senate by the Finance Committee at the same time that it reported the tax bill. As required by the Budget Act, the waiver resolution was referred to the Senate Budget Committee, and the Budget Committee reported the resolution with approval prior to the recess.
The waiver was required, not with respect to all of the tax bill, but only with respect to those parts that dealt with extension of the temporary tax reductions and the $50 rebate provision.
Since the latter has been withdrawn, the question of the applicability of the waiver requirements of the Budget Act is really moot with respect to these payments; at least I assume that the Finance Committee will withdraw the $50 tax rebate provision as requested by the chairman of the Finance Committee yesterday.
Mr. HARRY F. BYRD, JR. Mr. President, if the Senator will yield at that point, the Finance Committee acted this morning to do that.
Mr. MUSKIE. That being the case, then may I say to the Senator from Virginia, the requirement of the waiver resolution at this point is moot in terms of the Budget Act with respect to the rebate payments.
That does not mean, of course, that the merits of the tax bill in the final form that it will take when it comes before the Senate should not be debated.
I discussed the waiver resolution with the members of the committee by polling them individually. It was not possible to get a meeting of the Budget Committee this morning, because of a meeting on energy at the White House, but the members of the Budget Committee overwhelmingly approved this report to the Senate, that the waiver resolution is appropriate and the committee can see no objection to its consideration by the Senate at the present time. I really see no reason to take up the Senate's time any further with respect to the consideration of it.
I do have a statement, Mr. President, that I would like to put into the RECORD, that discusses some of the issues that have been raised by the President's withdrawal of his support for the tax rebate, the economic considerations that must now be weighed by the Budget Committee, by the Senate, and by Congress as a whole.
May I say to the Senate, Mr. President, that the Budget Committee will meet this week as a first step in reevaluating the economic policies that are reflected in the third concurrent budget resolution for 1977 and the first concurrent resolution for 1978. A change of the magnitude proposed by the President cannot be made without raising questions about the underlying economic policy that is involved. The committee will be meeting for that purpose, and conceivably could be recommending modifications of those two budget resolutions after it has given both of them the kind of consideration that this action by the President merits. The statement I am submitting for the RECORD covers someof those issues at greater length.
Mr. President, the issue before the Senate is the adoption of Senate Resolution 126, reported by the Committee on the Budget on April 6. Adoption of this resolution is necessary to clear the way for Senate consideration of H.R. 3477, the Tax Reduction and Simplification Act of1977.
Under the Budget Act, Senate consideration of any revenue or spending measure which first takes effect in a fiscal year for which no budget resolution has yet been adopted must be preceded by consideration and adoption of a resolution under the authority of section 303 of the Budget Act. The purpose of this Budget Act provision is to assure that revenue changes adopted in one fiscal year do not inadvertently or imprudently mortgage the revenue collections of the Government in a future fiscal year.
The tax bill to which the pending waiver resolution applies is an integral part of the congressional fiscal policy adopted in the third concurrent resolution on the budget just 2 months ago. Many of its features take effect immediately. The extension of the temporary personal and corporate tax reductions provided for by the bill take effect next January 1, a date which falls in the forthcoming fiscal year. These fiscal 1978 provisions are those to which the pending waiver resolution applies.
The Senate Budget Committee considered this waiver resolution in connection with its markup and report on the first budget resolution for fiscal year 1978. That budget resolution will be considered in the Senate soon after completion of the work on this tax bill. That budget resolution, the tax bill, and this waiver resolution are closely intertwined. I will have additional remarks to make about the principal individual features of the tax bill when it is the pending business of the Senate. But I want to call the Senate's attention now to the reality that the pending tax bill is inseparably woven into the fabric of the consistent economic policy Congress has adopted in the third budget resolution and will soon consider in the congressional budget for 1978.
Congress, in adopting the Budget Act, provided a mechanism for assuring a coherent and consistent fiscal policy for the Federal Government on a year in, year out basis. Congress did so by healing the century old rift between spending and tax decisions in the Congress by its creation of the Budget Committees. Congress also provided that the budget process would be aided by professional economic and analytic staff, not only in the two Budget Committees, but in the Congressional Budget Office as well. The purpose of all these measures was to free the country from the roller coaster of haphazard and inconsistent economic policy which had afflicted the Federal Government until that time. In furtherance of that purpose, the Budget Act sought to assure effective congressional control over the budgetary process in order to free the legislative branch from exclusive dependence for economic leadership and analysis upon the executive branch.
The budget process has been proven effective in its 2 years of operation. We tempered plans to spend and directed them toward job creating purposes. We held down the recession created deficit and shaped a congressional fiscal policy to accelerate our national economic recovery.
Just a few months ago, we believed it was operating at its best in cooperation with the President when we reported a third budget resolution to accommodate the program of job creation the President submitted on January 31. We now confront the reality that the President has changed his mind about a large portion of that program which affects this tax bill. He has withdrawn support for the $50 payments which were a keystone of his economic program. I have made clear my view that the President's positions was a serious economic misjudgment.
I ask unanimous consent that my statement in favor of the $50 payment, which I made in the Senate on April 7, and my reaction to the President's withdrawal of that proposal, be made a part of the RECORD at the conclusion of these remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibits 1 and 2.)
Mr. MUSKIE. But the President's change of mind does not change the economy or the congressional budget policy set forth in the third concurrent resolution on the budget. Whether there are viable alternatives to the rebate proposal to fill the gap which the President's failure to support his own program has created remains to be seen. The Budget Committee will meet this Friday to consider that issue and whether additional amendments to the congressional budget are in order.
This change of circumstances, however, required me to consult the membersof the Budget Committee as to whether the waiver resolution reported before the recess should be reconsidered. It is my conclusion, based on those consultations, that the committee believes that debate on this tax bill should proceed at the present time, and that the waiver resolution should be adopted. I concur in that judgment.
The Budget Committee will meet soon to evaluate whether, in light of the President's withdrawal of support for his own program, the revenue floor stipulated in the third budget resolution should be revised. We have to assure that imprudent or inadvisable revenue amendments are not enacted during the balance of this fiscal year which use up any significant portion of the $6.5 billion included in that budget resolution for those portions of the President's program support for which he was now withdrawn. It may be that the President's action came too late in the fiscal year to permit Congress to craft and substitute an equivalent stimulative and employment related fiscal policy. If that is so, our only option may be to revise the revenue floor upward again to hold down the deficit and to preserve the remainder of the fiscal plan we adopted in the third resolution and the fiscal plan contemplated in the first resolution for next year. I have no doubt that such a change in the revenue floor can be accomplished prior to the return of a conference report on this tax bill, if that course must be followed to assure that improvident amendments to this tax bill, even if they are in order under the present revenue floor of the third resolution, will be out of order in a conference report.
We should not add one nickel to the deficit to pay for tax programs which may be sound but which ought to be postponed until the budget is in balance. While Congress should spend what it must to return the country to full employment and a balanced budget at the earliest possible date, it should not go into the marketplace to borrow funds to pay for tax cuts which are nice to have but do not serve the goalof a balanced budget at the earliest possible date.
As usual, it is not pleasant to remind my colleagues, as I must as chairman of the Budget Committee, of the counterproductive, unpleasant, and unacceptable fiscal implications of tax bills which are attractive in their purpose but unacceptably add to the deficit we face. But that is my duty as chairman of your committee, and I will pursue it in connection with this tax bill with all the vigor at my command.
Let me also take this opportunity, however, to commend the distinguished chairman of the Finance Committee, Senator LONG, and that committee itself for the high degree of restraint and responsibility they have demonstrated in the formulation of the present tax bill. They have adhered to the budget process and supported it. The bill they reported advanced both the President's program and the budget process. Although I have some differences on individual features of the bill they have reported, I will stand with them now to defend the bill from imprudent additions which do not conform to the policy of the congressional budget.
EXHIBIT 1
A CRITICAL NEED FOR THE PERSONAL INCOME TAX REBATE
Mr. MUSKIE. Mr. President, I address my remarks this morning to the rebate on personal income taxes proposed by the President and provided for in the third concurrent resolution on the budget for fiscal year 1977.
We are in the midst of recovery from the worst economic recession since the 1930's. The recovery has been under way for 2 years, but has proceeded too slowly to cut deeply into unemployment or unused industrial capacity. Unemployment remains at unacceptable levels. Seven million persons, including 21/2 million family heads, are still out of work.
In my home State of Marne, for example, unemployment remains above 10 percent, a figure essentially unchanged from a year ago, despite our hopes for a speedier recovery. And it is a measure of the seriousness of the recession that analysts concluded that 1976 was a relatively good year for Maine's economy, even though 1 worker in 10 did not have a job.
The pace of the recovery slowed down in mid 1976. The Budget Committee recognized this slackening when we proposed the fiscal policy embodied in the second concurrent resolution for 1977. We stated in our report to the Senate that we were prepared to consider a subsequent concurrent resolution early in 1977 if the economic data received by then did not indicate that the recovery was proceeding satisfactorily.
President Carter shared our sentiments. As a candidate for the Presidency, he promised to provide a fiscal policy that would stimulate the economy and reduce unemployment.
Soon after taking office, he sent his stimulus proposals to Congress. The Budget Committee also recognized the need for immediate additional stimulus early this year. In response to the President's proposals and our own recognition of the slowdown in the recovery, we reported the third concurrent resolution to the Senate. Congress reduced the revenue floor for fiscal year 1977 in order to provide additional economic stimulus as quickly as possible.
The need for the stimulus is still critical. The rebate we are now considering provides about 60 percent of the stimulus provided for in the third budget resolution for fiscal year 1977. We adopted the budget resolution with utmost speed in order to facilitate rapid enactment of the stimulus proposals. A month has now passed since the resolution was adopted; we have lost too much time already. If we fail to adopt the rebate we will fall even further behind in our schedule for economic recovery.
Mr. President, the worst possible mistake that could be made in fiscal policy would be to decide, at this late date, that the economy is in fine shape, that effective stimulus is no longer required in 1977, and that the rebate can be abandoned., Policymakers in this country and other have been justly criticized for a lack of steadiness in policy, for stop-go policies. To abandon this revenue reduction now, after it has been incorporated into the spending plans of millions of households and businesses, would be a flagrant example of go-stop policy.
We adopted the third budget resolution because we decided that additional stimulus was necessary as soon as possible. Let us stick to our plans. Let us not attempt to fine tune the economy. We cannot allow our policies to be guided by every small movement of the economic statistics. Should we propose stimulus during the slowdown, oppose it when Christmas sales turn up, propose it again when the severe winter descends, and once again oppose it when spring raises the temperature and our spirits?
Some say we do not need additional stimulus in 1977 because we can expect strong growth in the second and third quarters. The economy will make up for ground lost during the severe cold and gas shortages of the winter. But these catchup effects do not add to total employment and output during 1977 — they merely redistribute it. They provide no substitute for the steady fiscal policy contained in the 2 year stimulus package originally proposed by the administration and anticipated in the third budget resolution.
What will happen if we reject the stimulus provided by the rebate? The econometric models are virtually unanimous on the point — growth will be slower in the remainder of this year. The Data Resources model estimated that over one-half point of real growth — almost $12 billion of output — will have been lost by the end of 1977. 250,000 fewer jobs will have been created, and unemployment will be higher. Is this the way to signal American business that the demand for their products will be strong in 1978, and that commitments to expand capacity will be rewarded with higher sales? The rebate was needed — and is needed — because the growth in final sales has been slow throughout the recovery, averaging only 4.3 percent. There is still no evidence that business investment will accelerate by itself. Investment waits for solid evidence of continued growth in sales. We need to support steady, solid growth at this point in the recovery, not to undermine it.
Mr. President, some of those who have opposed the rebate have done so not because they believe that additional stimulus is unnecessary, but because they do not believe it will work. I would like to speak briefly to that question as well.
It has been argued that the rebate will not increase consumption expenditures because it will go into savings instead. In particular, it is said that the rebates will simply be used to replenish savings which were used to pay fuel bills. But that is precisely the point. That is the strongest possible argument for the rebate.
How will families pay those fuel bills, and restore their savings, if the rebates are not provided? They will have to reduce other expenditures. Indeed, there is considerable danger of reduced household spending during the rest of the year for just this reason. Preliminary estimates suggest that the savings rate fell sharply in the first quarter, down nearly to 5 percent, as the fuel bills came in. Household savings were about $17 billion lower than they would have been at last year's savings rate.
The danger is that the savings rate will now move sharply upward, and the growth of spending will be slow. The rebate provides a quick and effective way to improve the financial position of low and middle income families and allow them to maintain their accustomed expenditure. The February survey of consumer attitudes done by Michigan's Survey Research Center found higher confidence among consumers who expected a tax reduction than among those who did not. I have no difficulty understanding this finding, although it seems that some of my colleagues do.
I have never been able to understand why American families would treat the tax rebate very differently from any other small change in their incomes. Economists are very good at telling us what we already know and one of the things they tell us is that people who receive very large windfalls do not spend it all very quickly. Now that is a very good theory for the winners of State lotteries and the heirs of large fortunes, but I do not see what it has to do with the average American family. For the median family the rebate would be only about 1% percent of annual income.
For once the economists have something useful to tell us, for their studies indicate that small temporary changes in income, such as rebate, get treated much like any other income. They show that the rebate should have a substantial and pronounced effect on consumption expenditure for several quarters after it is paid, which is exactly what it was intended to do.
Dr. Thomas Juster, the director of the Institute for Social Research of the University of Michigan, has recently done a study of the effects of permanent and temporary tax changes on consumer spending and saving. He found no significant difference between permanent and temporary tax changes.
Prof. Saul Hymans at Michigan examined the effects of the 1975 tax rebate and tax cuts on consumer purchases. He found a huge increase in purchases of furniture and household equipment associated with the additional purchasing power arising from the tax reductions.
Arthur Okun of the Brookings Institution, in studying the 1968 tax surcharge, found that the experience confirmed "the general efficacy and continued desirability of flexible changes in personal income tax rates — upward or downward, permanent or temporary."
Still other studies have confirmed the difference in the effects on spending of large and small temporary income changes to which I referred previously.
Mr. President, I do not believe we should withhold the economic stimulus this country needs because of a misapplication of economic theory, or a failure to recognize the. abundant evidence which supports the use of the rebate.
I do not believe that future tax revenues should be mortgaged when the new administration is less than 3 months old, and still formulating its programs, if a clear alternative is readily available. I do not believe that we should go further in attempting to devise permanent tax reductions before we have given the administration an opportunity to present its proposals for tax reform.
Mr. President, the way to get the economy moving again is not to put up a stop sign. When the Senate returns from recess on April 18 it will immediately consider the tax bill reported by the Finance Committee. I urge my colleagues to declare themselves in support of a steady fiscal policy and continued economic recovery by supporting the fiscal stimulus provisions, including the rebate, as recommended by the Finance Committee.
One closing point, Mr. President. On yesterday the Senate Budget Committee completed its consideration of the first concurrent budget resolution for fiscal year 1978. That resolution is not directly relevant to the $50 tax rebate, except to this degree: that if it is not enacted, it will affect the revenues we can expect to flow from the Federal tax structure in 1978.
If the $50 tax rebate is not approved, or if in lieu thereof Congress should enact into law the permanent tax reductions proposed by several Republican Senators — and it is their prerogative to do so — revenues that we can anticipate in 1978 will be lower than those provided for in the resolution adopted by the Budget Committee yesterday. The effect will be a larger deficit, lower revenues, lesser ability to deal with tax reform later this year, and the effects on the economy which I have taken the last few minutes to describe here for the benefit of the Senate.
So for all those reasons, Mr. President, it makes sense to enact into law this feature of the President's economic stimulus proposal.,
(EXHIBIT 2)
STATEMENT OF SENATOR EDMUND S. MUSKIE ON THE WITHDRAWAL OF THE ADMINISTRATION'S TAX REBATE
Senator Edmund S. Muskie (DMaine), Chairman of the Senate Budget Committee, issued the following statement concerning President Carter's withdrawal of support for the tax rebate and business tax proposals:
"The Administration's policy reversal on the tax rebate is disappointing. It is disappointing both because of its likely economic effects and the manner in which the decision was taken.
"The economic effects of this decision are likely to be substantial. It raises the risk of repeating the pattern of 1976, when the economy was strong in the beginning of the year and slowed down sharply at the end. This action is likely to cost about 250,000 jobs by the end of this year, at the same time that the Administration is asking shoe workers, and those in other depressed industries, to bear the heavy cost of unemployment. The Administration's goal of reducing unemployment below 6 percent by the end of 1978 will now be much more difficult to achieve.
"These costs might be necessary to bear if the economy was in danger of overheating and additional fiscal restraint was required. But this is not the case, as Chairman Schultze indicated yesterday. The unusual price increases in the last several months have been due to the effects of the winter on food and energy prices, and to inflationary momentum in the economy. They have not been caused by excess demand. There is no serious prospect that the rebate and business tax relief would give rise to such excess demand.
"The fundamental economic reasons for the rebate remain valid. The Administration claims, on the basis of strong industrial production and retail sales figures for February and March, that the rebate is now 'unnecessary.' An accurate characterization of these data, however, would be that the first quarter may turn out to be less bad than we had feared. It now appears that real GNP growth is likely to be around 5 percent, rather than the 3 – 4 percent expected earlier because of the severe weather. Industrial production has rebounded strongly from its winter depression, to be sure, but is still only 2.4 percent above its 1974 peak and 5.5 percent above its level of a year ago. Capacity utilization in manufacturing, at about 81 percent, is still below its average postwar level. These are hardly the marks of an economy that is 'overheating.' With 7 million Americans out of work, what can it mean to say that two-thirds of the fiscal year 1977 stimulus package is 'unnecessary'?
"The tax rebate was proposed because final sales in the economy had been growing at a relatively slow pace throughout two years of recovery. Two months of good retail sales do not provide a sound basis for an abrupt reversal of this policy. The gain in retail sales was in fact stronger in the fourth quarter of 1976 than in the most recent quarter, and some of the recent strength of consumer spending may be precisely because the rebate was expected. The protests against the rebate have not come from low and middle income families. Indeed, many consumers are counting on the rebate for relief from heavy fuel bills. How can we expect to maintain consumer confidence if we cannot maintain a steady fiscal policy?
"The reversal of policy suggests a kind of 'super fine tuning' of the economy which is beyond the capacity of economists. As I stated on the Senate floor last week, 'Should we propose stimulus during the slowdown, oppose it when Christmas sales turn up, propose it again when the severe winter descends and oppose it once again when spring raises the temperature and our spirits?'
"Both the personal tax rebate and the business tax relief were proposed because investment demand has been unusually weak during the recovery. There still is no evidence that business capital spending will accelerate to boost the recovery. Is stronger investment demand now 'unnecessary'?
"Another factor in the disappointing recovery has been slow export growth due to the worldwide nature of the recession. The Administration stimulus package originally signalled a determination to provide U.S. economic leadership in world recovery. The stimulus package represented a commitment to vigorous expansion. We urged some reluctant and important trading partners to go and do likewise. What signals is the Administration sending them now? Will the Administration argue at the economist summit in London next month that a more vigorous expansion is suddenly 'unnecessary'?
"The Administration's action is disappointing, finally, because of the failure to coordinate fiscal policy decisions with the Congress. Reasonable men can certainly differ with respect to the composition of fiscal policy and such differences were being resolved within the legislative process. But the Administration and Congress appeared to be in agreement on the required direction of policy. The Administration had proposed additional stimulus, and the Congress had revised its fiscal year 1977 budget in a coordinated action. The Administration has now made an abrupt policy reversal without consideration of the Congressional budget process and without adequate consultation with the Congress. It has done so on the most meager and preliminary evidence. It may prove much more difficult to convince consumers or businesses in the future that the Government is committed to a carefully planned, deliberate and steady fiscal policy."
Mr. HARRY F. BYRD, JR. Mr. President, will the Senator yield?
Mr. MUSKIE. I yield.
Mr. HARRY F. BYRD, JR. As I understand it, the pending measure does not change any of the figures which were in the third concurrent resolution.
Mr. MUSKIE. No. The waiver resolution does not serve that function, may I say to the Senator, and does not affect those numbers at all. But the validity of those numbers is very much in the mind of the Senator from Maine, and we need to take a long and thoughtful look at those numbers in the light of these developments.
Mr. HARRY F. BYRD, JR. As I understand from the previous remarks of the Senator from Maine, any change in those numbers will be forthcoming later on in the week, perhaps, or next week?
Mr. MUSKIE. More likely next week.There is not that much pressure for change except with respect to the first concurrent resolution for the 1978 fiscal year. Since that is on the calendar, and the leadership is pushing for its consideration next week, we may have to move a little more rapidly than we might otherwise.
Mr. HARRY F. BYRD, JR. The Budget Committee would need to act if any numbers were to be changed prior to the consideration of the 1978 budget?
Mr. MUSKIE. I would think so, although I would say to the Senator our initial examination of the 1978 numbers does not suggest that the changes in the 1978 budget would be significantly large. The reason for that, of course, is that the tax rebate was a one-shot deal, with the total impact in fiscal year 1977. There is some impact on fiscal year 1978, and we do want to look at it, but it will be much smaller than the fiscal year 1977 impact. That is the big point, the fiscal 1977 impact.
Mr. HARRY F. BYRD, JR. I thank the Senator.
Mr. MUSKIE. I appreciate the presence of my good friend from Oklahoma, who is the ranking Republican member of the committee. This action meets with his approval, as I understand it, and I am happy to yield to him at this time.
Mr. BELLMON. Mr. President, I am in agreement with Chairman MUSKIE that the action he recommends is entirely in order. I would like to raise one point with the chairman of the Budget Committee, if I may get his attention, as to something we have discussed privately here on the Senate floor, that has to do with whether or not the action the Senate is about to take will preclude action on a permanent tax cut, if the Senate wishes to get into that.
As I understand, this action still leaves room for a permanent tax cut if we desire to get into that matter.
Mr. MUSKIE. The Senator is correct; there is still room in the Third Concurrent Resolution for tax reductions unless that resolution is changed, and this waiver resolution does not change it.
I would like to say one further thing to the Senator from Virginia with respect to this waiver resolution, a point that may have escaped my mind a few moments ago: the waiver resolution is also required, technically, to cover the extension of the 1975 tax cuts into the next fiscal year. As the Senator will recall, under an amendment offered by theSenator from Alabama (Mr. ALLEN) last year, we continued those tax cuts until the end of this calendar year.
The tax bill extends those tax cuts through calendar year 1978. Technically, because those cuts would not become effective until fiscal year 1978, a waiver is required for that purpose. So this waiver is very much needed technically for that purpose. I did not want to abuse the Senator's reliance on my information.
Mr. LONG. Will the Senator yield at that point?
Mr. MUSKIE. I yield to the distinguished chairman of the Finance Committee.
Mr. LONG. Let me congratulate the chairman for the fine presentation he has made.
Mr. President, I ask unanimous consent that the following staff members be granted the privilege of the floor during the consideration of H.R. 3477. We will have that revenue measure before us after we complete action on this resolution.
From the Finance Committee:
Michael Stern, Bob Willan, Bill Morris,Charles Bruce, Bill Galvin, Gordon Gilman, and Dave Swoap.
From the Joint Tax Committee:
Bobby Shapiro, Jim Wetzler, Bob Strauss, Mike Bird, Herb Chabot, Paul Oosterhuis, Bill Lieber, Dianne Bennett,Michelle Scott, Mark McConaghy, Don Ricketts, and Randy Weiss.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MUSKIE. Mr. President, I see no reason for further discussion and I see no other Senators seeking recognition.
I suggest we act on the resolution.
Mr. McCLURE. Mr. President, before doing that, will the Senator respond to a question?
Mr. MUSKIE. Of course.
Mr. McCLURE. As I understand, the necessity for the waiver comes about, because of the way the Budget Act is written and not because of the President's action in suggesting that the $50 rebate is no longer necessary.
Mr. MUSKIE. That is correct. Of course, the waiver resolution has been pending on the Senate calendar for some weeks and predated the President's decision on the $50 tax rebate. The only question before us today was whether or not we should reconsider the basis on which the waiver resolution was reported to the Senate before we take up the tax bill. It was my feeling that there was no need to reconsider it. It was required in the first instance for only two provisions of the tax bill. One was the $50 tax rebate, which would appear to be moot now that it has been withdrawn or is proposed to be withdrawn from the bill; and, second, we needed the waiver resolution in order to continue the 1975 tax cuts through calendar year 1978. So our action in approving this waiver resolulution will not in any way be a reflection on the merits of the President's action.
Mr. McCLURE. I assume the waiver resolution as pending before us now does not prejudge that question and that the Congress could either agree with the President's suggestion, disagree with it, or adopt any other alternatives which are within the targets established by the third concurrent resolution.
Mr. MUSKIE. The Senator is correct.
May I make this point also: He knows, as a member of the Budget Committee, that waiver resolutions do not represent judgments on the substantive issue of a piece of legislation to which they apply by the Budget Committee. The only question that we consider, when we consider a waiver resolution, is whether there are adequate reasons why the legislation requiring the waiver failed to meet all the procedural requirements of the Budget Act.
When we are asked to consider a piece of legislation out of the ordinary budget process sequence, the Budget Committee has taken the position that it must have a very good reason for approving the consideration of the bill. When we give the green light we are not passing judgment on the merits. The Senator is absolutely right.
Mr. McCLURE. The reason I took the time to ask the Senator this question, and I appreciate the response, is that some Members were suggesting that the waiver resolution was required by the action of the President or the recommendation of the President. I just wanted the record to be very clear that, as a matter of fact, the waiver resolution is totally unrelated to that decision by the President of the United States. The Congress and the Senate still have the same latitude to make decisions they did under the third concurrent resolution.
Mr. MUSKIE. The Senator is correct. I asked the committee to reconsider the waiver resolution only for the purpose of using this occasion to give the Budget Committee an opportunity to determine whether or not there was any policy option which it would like to pursue. The overwhelming response of the committee was that it did not, and so we come here simply supporting the waiver resolution for the reasons that we reported it in the first instance.
Mr. McCLURE. I thank the Senator.
The PRESIDING OFFICER. The question is on agreeing to the resolution.
The resolution was agreed to.
Mr. MUSKIE. Mr. President, I move to reconsider the vote by which the resolution was agreed to.
Mr. LONG. Mr. President, I move to lay that motion on the table.
The motion to lay on the table was agreed to.