March 21, 1978
Page 7745
Mr. TALMADGE. Our staff economist tells me that under the Dole bill it is estimated that 34 million acres of land would be retired, and, under the Talmadge bill, 61.8 million acres would be retired, but that includes the set aside already mandated.
Several Senators addressed the Chair.
Mr. TALMADGE. The Senator from Maine has been seeking time.
Let me point out to my colleagues that under the unanimous consent agreement we have only 2 hours to the side.
I would like, if I could, to dispose of these amendments and then yield for colloquies later.
But I yield now to the distinguished chairman of the Budget Committee.
Mr. MUSKIE. I thank the Senator from Georgia.
I simply rise at this moment to ascertain what the likely parliamentary situation is going to be. The unanimous consent agreement provides for 4 hours to be equally divided on the Talmadge bill.
Mr. TALMADGE. That is right.
Mr. MUSKIE. To be followed by 4 hours to be equally divided on the Dole bill.
Mr. TALMADGE. That is correct.
Mr. MUSKIE. Now, I understand, contrary to my understanding at the time that unanimous consent agreement was entered into, that the Dole bill will be offered as an amendment to the Talmadge bill. That will considerably shrink the time that I had expected would be available for these two very important issues because the Dole bill, in effect, will have to be debated the same time as the Talmadge bill within the constraints of a 4 hour rather than an 8 hour time limitation.
Then, in addition, I understand there will be a McGovern amendment offered, the existence of which I was unaware of yesterday, which also has serious budgetary as well as economic implications.
That, too, I understand will be offered in this 4 hour period on the Talmadge bill, and a combination of these three really restricts the time that we ought to have available to us to discuss these issues. They are difficult. They are urgent.
Mr. TALMADGE. I think we can get unanimous consent for further time.
Mr. MUSKIE. In what order does the floor manager expect these to arise?
Mr. TALMADGE. The McGovern amendment is pending at the present time. I understand subsequent to the McGovern amendment the Senator from Kansas desires to offer his amendment. That would be the next pending matter after the McGovern matter.
Mr. MUSKIE. There is one other matter that needs to be disposed of, a technicality, that is the question of the section 402 waivers. Implementation of our understanding on those requires that two amendments be offered, one to the Talmadge bill and one to the Dole bill, in order to eliminate provisions that would otherwise require a section 402 waiver.
That, I understand from staff, can be done toward the end of the consideration of the bills.
Mr. TALMADGE. Yes.
Mr. MUSKIE. And that is agreeable to me.
Mr. TALMADGE. Yes.
Mr. MUSKIE. I would reserve my comments on that until we can get to that point.
For the time being, I say to my good friend from Georgia that I would reserve my time.
Mr. TALMADGE. That is agreeable. Before I yield to the junior Senator from South Dakota, may we complete action on the McGovern amendment?
Mr. ALLEN. I have an amendment that I hope will be agreed to.
The PRESIDING OFFICER. Who yields time?
Mr. TALMADGE. I have yielded 2 additional minutes to the Senator from South Dakota.
Mr. McGOVERN. Mr. President, after listening to the statements of the Senator from Alabama and the chairman's willingness to accept this amendment on the cotton target price, I would have no objection to going to conference with the 70 cent target price on cotton.
UP AMENDMENT NO. 1214
Mr. ALLEN. Mr. President, I have an amendment I would like to offer on behalf of myself and the distinguished Senator from South Carolina (Mr. THURMOND), which I send to the desk.
The PRESIDING OFFICER. The amendment will be stated.
The legislative clerk read as follows: The Senator from Alabama (Mr. ALLEN), for himself and Mr. THURMOND, proposes unprinted amendment numbered 1214:
Amend pending amendment on page 2, line 21, strike 60 and insert 70.
The PRESIDING OFFIER. Who yields time?
Mr. MUSKIE. Mr. President, will the Senator yield?
Mr. TALMADGE. I yield 1 minute to the distinguished Senator.
Mr. MUSKIE. Do I understand we are on the verge of seeing the McGovern amendment accepted without further debate?
I would like to speak to the McGovern amendment as well as these others.
Mr. TALMADGE. The Senator will have that opportunity. How much time does the Senator want at this time?
Mr. MUSKIE. I would like to begin with 10 minutes. I am in a difficult position.
Mr. TALMADGE. Mr. President, I ask unanimous consent that the distinguished Senator from Maine may be allotted 10 minutes at this time without it being charged to either side.
Mr. ALLEN. Reserving the right to object, and I shall not object, is the distinguished Senator speaking on the amendment to the amendment?
Mr. MUSKIE. On the McGovern amendment.
Mr. ALLEN. Yes, but the Senator—
Mr. MUSKIE. Is there an amendment to the McGovern amendment now?
Mr. ALLEN. Yes. Does the Senator have an objection to the adoption of the amendment to the amendment?
Mr. MUSKIE. Will the Senator advise me of the nature of the amendment to the amendment?
These are coming out of the woodwork faster than I can keep track of them.
Mr. ALLEN. It changes the 60 cent floor for cotton to 70 cents.
Mr. MUSKIE. Well, we might as well make the amendment as bad as possible from a budgetary standpoint.
The PRESIDING OFFICER. Is there objection?
Mr. ALLEN. Parity will be 84 cents.
Mr. MUSKIE. This sets it at 70 cents. I have no objection to it being part of the McGovern amendment. My difficulty is, may I say to my good friend from Alabama, that since I was not advised of these amendments until 10 o'clock last night, I have not had an opportunity to get an economic analysis of their implications.
I am really disturbed. I understand the urgency of the farm problem. I have no desire to delay beyond the time necessary for us to understand the implications of what we are doing.
These amendments have budgetary implications. They have inflationary implications. We ought to at least know what those are.
The Senator from Alabama has offered an amendment to a McGovern amendment which itself catches me by surprise without the kind of analysis we ought to have.
Now, if we have agreed to make it partof the McGOVERN amendment, I guess I have no real objection to that. But I have considerable reservation about moving so quickly on proposed agricultural policy which has such serious implications.
I am going to be able to give the Senate only a very smattering of insight from the point of view of the Budget Committee on either proposition.
The PRESIDING OFFICER. Is there objection to the unanimous consent request by the Senator from Georgia to allow 10 minutes to the Senator from Maine, without objection, from either side?
Mr. ALLEN. I reserve the right to object and I hope the Chair would put the question on the pending amendment.
The PRESIDING OFFICER. The Senator cannot reserve the right to object unless someone yields time for that purpose.
Mr. ALLEN. Well, I object to the unanimous consent request pending the approval of the pending amendment to the amendment.
The PRESIDING OFFICER. Objection is heard. Who yields time?
Mr. MELCHER. Will the Senator yield 2 minutes to me?
Several Senators addressed the Chair.
Mr. ALLEN. I do not object to the distinguished Senator from—
The PRESIDING OFFICER. I thought I heard the Senator object.
Mr. ALLEN. I reserve an objection and I was in hopes the Chair would put the question on the amendment to the amendment, prior to recognizing the distinguished Senator from Maine because he said he has no objection to that.
The PRESIDING OFFICER (Mr. ZORINSKY). Will the Senator from Georgia propound the unanimous consent agreement?
Mr. TALMADGE. Yes. I ask unanimous consent that the distinguished Senator from Maine have 10 minutes, without it being charged to either side.
The PRESIDING OFFICER. Is there objection? The Chair hears none. Without objection, it is so ordered.
The Senator from Maine.
Mr. MUSKIE. Mr. President, I appreciate the Senator's courtesy.
Let me repeat what I just said. The budget imposed upon this Senator is an obligation and a duty to provide the Senate with a budgetary analysis and with an analysis designed to identify the economic impact of legislation of this kind and this Senator is unable to do so this morning. My inability to do so has nothing to do with our lack of resources. It has to do only with the lack of time.
The haste with which this series of policy proposals are being paraded to the floor I find enormously disturbing. I reached a unanimous consent agreement last Friday with the distinguished Senator from Georgia, the distinguished Senator from Kansas, and the majority leader covering two propositions.
We set the date for Tuesday because, in my judgment, from Friday to Tuesday would give the CBO and my staff adequate time to develop the information which the Budget Act says I have a duty to provide the Senate. Now, this morning I find that there has been added to those two propositions two more: one, the Dole amendment as an amendment to the Talmadge bill; and the other, a McGovern amendment to the Talmadge bill.
Now, Mr. President, there is no way — no way — for the budget process to provide instant analysis on such serious problems. I would have to oppose these amendments on that ground alone. The budget process is designed and intended to equip us to know what we are doing before we adopt programs with budget implications. I do not know what other amendments are lurking in the woodwork to be added to these bills, but my fear is that they are pretty horrendous.
Mr. DOLE. Will the distinguished Senator yield for just a moment?
Mr. MUSKIE. Of course.
Mr. DOLE. I share the frustration of the distinguished Senator from Maine and I know it is not a matter of resource; it is a matter of time, but in defense of the Dole amendment, I think the budget implications do not change. In fact, if anything, they are reduced because we remove the Food for Peace section, which reduces the cost by $400 million.
Mr. MUSKIE. The Dole and Talmadge measures together had different consequences for. the budget and the economy than Talmadge and Dole separately. There are three combinations: Talmadge alone, Dole alone, and Talmadge-Dole together.
As a matter of fact, on Talmadge-Dole together, unless the Senator is equipped with information that I have not been able to get, the Department of Agriculture has not yet been able to tell us how they would administer both of them together, so they are not the same.
Combining them is not the same as having two and two and getting four, and I do not know what the answer to that is going to be, but I know that the infiationary implications are going to be magnified if both are adopted.
I know that the budgetary costs are going to be magnified if both are adopted. And if on top of that the McGovern amendment is added, both the inflationary and budgetary costs are going to be magnified and exacerbated in ways that I have absolutely no way of advising the Senate.
This chapter in agriculture policy follows on a very disturbing year from last year. Let us review what happened last year.
President Carter asked for $2.3 billion for agriculture in the budget — $2.3 billion. The Agriculture Committee, the very committee that brought these bills to the floor, recommended $4.35 billion in its recommendation to the Budget Committee. That $4.35 billion is not the number that the Budget Committee produced. It is a number that the Agriculture Committee recommended to us and we put it in the budget. That first budget resolution provided $4.35 billion.
Two weeks later the Senate passed an agricultural bill that cost $5.6 billion. The ink was not dry yet on the first budget resolution and it was that $5.6 billion that we put in the second budget resolution.
Then what happened? The very day after the Budget Committee went along with that $5.6 billion the Agriculture Conference Committee voted a conference report costing $6.3 billion, and the Senate reported that conference bill and defeated the Budget Committee's recommendation of $5.6 billion which it had just approved the day previously. By a vote of 64 to 27 the Senate voted to raise the second budget resolution and the deficit it contained to pay for this new agriculture bill.
That is not all. Three weeks later the Senate voted to break that new ceiling which the Agriculture Committee had added to the budget resolution. Three weeks later, the Agriculture Committee reported another bill which reached the ceiling Congress had just adopted. This new bill provided a new and unanticipated $21 million payment program for some of the wealthiest, largest farmers in the United States. It gave them money to cut their crop losses from last year's drought, even though loan programs are available from the Government for the same purpose.
When Senator BELLMON and I took the floor against that budget — the Muskie bill — we were defeated by a vote of 61 to 26.
May I point out that 10 Senators who had voted against the budget resolution only voted against it because it was too high, and voted for this new agriculture bill which broke that very budget which they said was too high.
What kind of game are we playing? The present projected cost of what I just recited, according to the latest scorekeeping report, for fiscal year 1978 is not $6.3 billion. It is $9 billion. And that number does not include $1.5 billion that was added to the SBA program for disaster relief payments to farmers. If we add that we are up to $10.5 billion for agriculture compared to the $2.3 billion we started the year with just a year ago.
We have not even tried that farm bill which has produced this escalation. We have not even tried it to see whether it would work. We were told that the increases I have recited were justified because we needed new farm policy and that this new farm policy was going to solve the problem. Now before it is tried we have this deluge of proposals that are going to add billions of cost to the budget. They are going to trigger inflationary pressures again with promises that this time it will work.
I say to Senators I think that is the greatest comedy of errors under the supposed aegis of the Budget Act that I have seen in all my experience with it. The Senate of course can work its will. The Senate, if it chooses, can break the budget and a lot of these costs that we are talking about will show up in 1979 rather than 1978.
But let me tell Senators something about 1979. The March 15 committee reports to the Budget Committee are in. I have not had a chance to analyze them all, but let me give just two.
The PRESIDING OFFICER. The Senator's 10 minutes have expired.
Mr. MUSKIE. Mr. President, will the Senator yield me just a minute so I may finish?
Mr. DOLE. I yield 1 minute to the Senator.
The PRESIDING OFFICER. One minute is yielded on the time of the Senator from Kansas.
Mr. MUSKIE. Mr. President, the Appropriations Committee has recommended $508 billion. That is above the President's budget. The Finance Committee, with its tax cut recommendations, has given us a revenue floor of $428 billion.
I say to Senators the difference is $80 billion of deficit, not the President's $60 billion, not this year's figure of $57 billion, not $65 billion or $70 billion, but $80 billion, and we have not yet looked and fully analyzed the recommendations of other Senate committees. That $80 billion does not include anything of what we are debating today, nothing of what we are debating today with these proposals.
The PRESIDING OFFICER. The 1 minute has expired.
Mr. MUSKIE. Mr. President, will the Senator yield me 2 additional minutes?
Mr. DOLE. Mr. President, I yield 2 additional minutes.
The PRESIDING OFFICER. The Senator from Kansas yields 2 additional minutes to the Senator from Maine.
Mr. MUSKIE. Mr. President, these proposals should not even be considered under the Budget Act until we take up the first concurrent resolution — that is what the Budget Act says — because we should not decide and make these spending decisions for 1979 until we know what other spending decisions we are asked to make.
So here we have the prospect of an $80 billion deficit, or more. Before we even get into the details of that one we are adding spending above the $80 billion, or considering adding it in the form of these amendments which hit us too fast for anyone to analyze them.
I know the plea of urgency and emergency. Congress should be flexible enough to be able to respond to urgencies and emergencies. But I say to Senators if we set precedents here of this kind, which just casually brush aside the budget process, we set the precedent for others who will seek to do the same for other purposes. When that becomes a snowball the budget process will be dead.
As I get other insights into the McGovern amendment, I will be glad to provide whatever analysis we can on the spot.
I will just say this, without McGovern, the Talmadge bill in 1978-79 would have a net cost of $700 million. With the McGovern amendment, the McGovern-Talmadge bill would have a net cost in those 2 years of $2.6 billion. That is a difference of almost $2 billion attributable to the Talmadge bill, and we have not even gotten to Dole. We have not even gotten to Dole.
Mr. DOLE. Get to me first.
Mr. TALMADGE addressed the Chair.
The PRESIDING OFFICER. Who yields time?
Mr. TALMADGE. Mr. President, I yield myself such time as I may take.
BUDGET WAIVER RESOLUTION
Mr. TALMADGE. Mr. President, I move that the Senate proceed to the immediate consideration of Calendar Order No. 648, Senate Resolution 415.
The PRESIDING OFFICER. Is there objection?
Mr. ALLEN. Mr. President, if the Senator will yield, should we not dispose of this first?
Mr. TALMADGE. No. We cannot dispose of that until we get the waiver passed.
Mr. ALLEN. Very well.
The PRESIDING OFFICER. The question is on agreeing to the motion. The motion was agreed to.
The PRESIDING OFFICER. The resolution will be stated.
The assistant legislative clerk read as follows:
A resolution (S. Res. 415) waiving section 402(a) of the Congressional Budget Act of 1974 with respect to the consideration of H.R.6782.
Mr. MUSKIE. Mr. President, I do not want to delay the Senate unusually, but I think it is important for the record to note the reason why the Budget Committee reported the two waivers. It reported them, because this amendment has the effect of taking out of the Talmadge bill that provision which was subject to a point of order under section 402.
Mr. President, I ask unanimous consent that the committee report on that issue be printed in the RECORD at this point.
There being no objection, the committee report was ordered to be printed in the RECORD, as follows:
WAIVER OF SECTION 402(a) OF THE CONGRESSIONAL BUDGET ACT WITH RESPECT TO CONSIDERATION OF H.R. 6782
PURPOSE OF THE RESOLUTION
Section 402(a) of the Congressional Budget Act of 1974 provides that it shall not be in order in either the House or the Senate to consider any bill or resolution which directly or indirectly authorizes the enactmentof new budget authority for a fiscal year unless that bill or resolution is reported in the House or Senate, as the case may be, on or before May 15 preceding the beginning of such fiscal year. Because H.R. 6782, as reported, authorizes enactment of new budget authority, which could be available in FY 1978, and was reported by the Committee on Agriculture, Nutrition and Forestry on March 13, 1978, — after the May 15, 1977, deadline — a resolution waiving Section 402(a) of the Budget Act with respect to H.R. 6782 must be adopted before this bill can be consideredby the Senate. In reporting favorably on the resolution, the Budget Committee is assuming that the effective date of this provision will be changed and is not otherwise prejudging the merits of the bill.
Committee criteria
The Budget Committee is extremely reluctant to recommend the adoption of resolutions waiving section 402(a) of the Budget Act. This section was included in the Budget Act to insure that all authorized legislation is considered as far as possible in advance of the fiscal year in which it will take effect so that it could be considered in the formulationof the First Concurrent Resolution. In addition, this section was included to provide the Appropriations Committee with some reasonable notice of needed appropriations for the coming fiscal year so that the Appropriations Committee can meet the appropriations timetable spelled out in the Budget Act.
Legislation authorizing the enactment of new budget authority which is reported to the Senate after May 15 could delay the enactment of appropriations bills past the Budget Act deadline of seven days after Labor Day for the completion of the entire appropriations process. The legislative history of the Budget Act indicates that the May 15 reporting deadline is not to be lightly waived. Under these circumstances, the Budget Committee, in deciding whether to favorably report resolutions waiving section 402(a) of the Budget Act, will consider factors including: the reporting committee's effort to meet the May 15 deadline, the delay in the appropriations process engendered by the late reporting of the authorization, and whether the enactment of the authorization will significantly affect the national priorities established in the Congressional budget.
Budget considerations
H.R. 6782 authorizes appropriations of an increase in the borrowing authority of the Commodity Credit Corporation from $14.5 billion to $25 billion. Since the reported bill is effective upon the date of enactment, the legislation constitutes an authorization of new budget authority for FY 1978 and, therefore, is subject to a point of order under Section 402 of the Budget Act because it was reported after May 15, 1977.
However, the Chairman of the Committee on Agriculture, Nutrition and Forestry has reviewed the status of the Commodity Credit Corporation and found that delaying the authorization until FY 1979 will not restrict the program. In a letter to the Budget Committee, reproduced below, the Chairman has stated that he will offer a floor amendment on behalf of the Committee to change the effective date of this provision to fiscal 1979.
To permit orderly consideration of H.R. 6782 by the Senate, the Budget Committee reports favorably on Senate Resolution 415, with the understanding that the effective date of the authorization will be changed, and recommends that the resolution be adopted.
Mr. MUSKIE. I think further comments by me are unnecessary.
Mr. TALMADGE. Mr. President, I move adoption of the resolution.
The PRESIDING OFFICER. The question is on agreeing to the resolution.
The resolution was agreed to as follows :
Resolved, That pursuant to section 402(c) of the Congressional Budget Act of 1974, the provisions of section 402(a) of that Act are waived with respect to the consideration of H.R. 6782, a bill to permit marketing orders to include provisions concerning marketing promotion, including paid advertisement, of raisins and distribution among handlers of the pro rata costs of such promotion. As reported by the Committee on Agriculture, Nutrition, and Forestry, H.R. 6782 would also provide emergency assistance to producers of wheat, feed grains, upland cotton, and soybeans.
Such waiver is necessary to permit consideration of statutory authority to increase the borrowing authority of the Commodity Credit Corporation from $14,500,000,000 to $25,000,000,000. Section 3 of H.R. 6782, as reported by the Committee, states that the increase in the borrowing authority of the Commodity Credit Corporation will be effective only to the extent provided in appropriation Acts. Section 3 therefore, is an authorization of new budget authority, which was not reported by May 15, 1977, and requires adoption of a waiver resolution pursuant to section 402(c) of the Congressional Budget Act before it may be considered by the Senate.
The need for increased borrowing authority is an emergency response to a deteriorating situation with respect to American agriculture. This need for increased support could not have been foreseen prior to May 15,1977.
BUDGET WAIVER RESOLUTION
Mr. TALMADGE. Mr. President, I move that the Senate proceed to the consideration of Calendar Order No. 649, Senate Resolution 418.
The PRESIDING OFFICER. The question is on agreeing to the motion of the Senator from Georgia.
The motion was agreed to.
The PRESIDING OFFICER. The resolution will be stated.
The assistant legislative clerk read as follows:
A resolution (S. Res. 418) waiving section 402(a) of the Congressional Budget Act of 1974 with respect to the consideration of S. 2481.
Mr. MUSKIE. Mr. President, I ask unanimous consent that the committee report on that waiver which touches the Dole bill be printed in the RECORD.
There being no objection, the report was ordered to be printed in the RECORD, as follows:
WAIVER OF SECTION 402(a) OF THE CONGRESSIONAL BUDGET ACT WITH RESPECT TO CONSIDERATION OF S. 2481
PURPOSE OF THE RESOLUTION
Section 402(a) of the Congressional Budget Act of 1974 provides that it shall not be in order in either
the House or the Senate to consider any bill or resolution which directly or indirectly authorizes the
enactment of new budget authority for a fiscal year unless that bill or resolution is reported in the House
or Senate, as the case may be, on or before May 15, preceding the beginning of such fiscal year.
Because S. 2481, as reported, authorizes enactment of new budget authority in FY 1978 and was
reported by the Committee on Agriculture, Nutrition and Forestry on March 16, 1978, — after the
May 15, 1977 deadline, a resolution waiving Section 402(a) of the Budget Act with respect to S. 2481
must be adopted before this bill can be considered by the Senate. In reporting favorably on the
resolution, the Budget Committee is assuming that the effective date of this provision will be changed
and is not otherwise prejudging the merits of the bill.
Committee criteria
The Budget Committee is extremely reluctant to recommend the adoption of resolutions waiving section 402(a) of the Budget Act. This section was included in the Budget Act to insure that all authorizing legislation is considered as far as possible in advance of the fiscal year in which it will take effect so that it could be considered in the formulation of the First Concurrent Resolution. In addition, this section was included to provide the Appropriations Committee with some reasonable notice of needed appropriations for the coming fiscal year so that the Appropriations Committee can meet the appropriations timetable spelled out in the Budget Act.
Legislation authorizing the enactment of new budget authority which is reported to the Senate after May 15 could delay the enactment of appropriations bills past the Budget Act deadline of seven days after Labor Day for the completion of the entire appropriations process. The legislative history of the Budget Act indicates that the May 15 reporting deadline is not to be lightly waived. Under these circumstances, the Budget Committee, in deciding whether to favorably report resolutions waiving section 402(a) of the Budget Act, will consider factors including: the reporting committee's effort to meet the May 15 deadline, the delay in the appropriations process engendered by the late reporting of the authorization, and whether the enactment of the authorization will significantly affect the national priorities established in the Congressional budget.
Budget considerations
S. 2481 authorizes additional budget authority of $0.2 billion for Public Law 480, the Food for Peace program. Since the reported bill is effective upon the date of enactment, the legislation constitutes an authorization of new budget authority for 1978 and, therefore, is subject to a point of order under Section 402 of the Budget Act, because it was reported after May 15, 1977.
However, the sponsor of the provision, Senator McGovern, has reviewed the status of P. L. 480, Food for Peace, and has found that delaying the authorization until FY 1979 will not restrict the program. In a letter to the Budget Committee, reproduced below, Senator McGovern has stated that he will offer a floor amendment to change the effective date of this provision to fiscal 1979.
To permit orderly consideration of S. 2481 by the Senate, the Budget Committee reports favorably on Senate Resolution 418, with the understanding that the effective date of the authorization will be changed, and recommends that the resolution be adopted.
Mr. DOLE. Mr. President, it, too, is relevant because that provision in the Dole measure which raises a point of order will be stricken by agreement.
Mr. TALMADGE. Mr. President, I move adoption of the resolution.
The PRESIDING OFFICER. The question is on agreeing to the resolution.
The resolution was agreed to as follows:
Resolved, That pursuant to section 402(c) of the Congressional Budget Act of 1974, the provisions of section 402(a) of that Act are waived with respect to the consideration of S 2481, a bill to provide wheat, feed grain, and cotton producers the opportunity to receive parity prices for the 1978 crops.
Mr. TALMADGE. Mr. President, I believe now the amendment proposed by the Senator from South Dakota, modified by the Senator from Alabama, is in order.
Mr. BENTSEN. Mr. President, I wish to suggest to the Senator from Georgia that he allow me 3 minutes to proceed.
Mr. TALMADGE. I yield 3 minutes to the Senator from Texas.
The PRESIDING OFFICER. The Senator from Texas is recognized for 3 minutes.
Mr. BENTSEN. Mr. President, I would like to state my support of Senator McGOVERN's amendment. I am particularly interested in its application to upland cotton. The cotton loan rate is presently at least 10 cents per pound below the level any Member of the Senate anticipated at the time of passage of the 1977 farm bill. I know the intent of the Senate at that time was to set a loan rate which would allow producers the ability to continue growing cotton on their land.
Certainly, it was not the intention of Congress to have a loan rate on 1978 crops which is below the 1977 loan level; however, this is currently the situation. This problem is even more serious in Texas. Due to the type of short staple cotton grown in Texas, many producers are forced to put their cotton in the loan at less than 40 cents per pound. I am sure my colleagues realize this price is well below today's cost of production. Frankly, I believe the loan for cotton should be higher than the 50 cents proposed in the McGovern amendment, but recognizing the sentiment of the Senate I believe this is the best we can expect.
Mr. President, 60 percent of the cotton grown in Texas is exported to foreign countries. Without agricultural exports, our balance-of-payments deficit would be considerably higher, and we as a nation cannot afford this. To my colleagues who say a higher loan rate will only increase cotton production (resulting in a surplus), I say that our farmers will participate in the set aside programs available. If farmers are forced to grow alternative crops because of the low upland cotton loan rate, it will only increase the surplus of other commodities.
Mr. President, I ask unanimous consent to have printed in the RECORD a letter dated January 20, 1978, from the Fisher County agriculture movement.
There being no objection, the letter was ordered to be printed in the RECORD, as follows:
Rosy, Tex.,
January 20, 1978.
DEAR SENATOR BENTSEN: The purpose of this open letter is to present data compiled by the Fisher County American Agriculture Movement to accurately identify the disparity of prices paid by farmers and ranchers in Fisher County, Texas, for goods and services versus the prices received by farmers for raw agricultural products. The businesses of Fisher County furnished yearly prices from 1967 through 1977 of representative items which had no product improvement. Some items had design changes during the period. No product improvement items accurately reflect inflation of prices.
Prices were obtained on representative items in the categories of farm equipment, chemicals, petroleum, rubber, steel, textile, food, and medical services. Percent of price increase from 1967 through 1977 was computed. The percent of price increase for cotton, milo, and wheat (primary agricultural products of Fisher County) was computed for the same period. Comparisons were made to reveal the discrepancy between operation and living costs and receipts for agricultural products which results in a loss in a typical Fisher County farming operation at current prices received for agricultural products. The following comparisons illustrate this disparity by showing the number of pounds of an agricultural product required to purchase farming and ranching necessities based on 1977 Fisher County market prices: December 15, 1977 USDA price quotations; and 100 percent parity:
In 1977 cost per ground acre for a diversified farming operation in Fisher County was approximately $130, excluding land costs and management fees. (See attached per acre costs breakdown.) Receipts from sale of agricultural products in 1977 were approximately $100 per ground acre. This is a loss of $30 per ground acre or a $30,000 loss for a 1,000 acre diversified farming operation in 1977, which was an above average crop production year. The primary reason for the loss was the increased cost of essential goods and services. (Computations of price& for goods and services purchased by Fisher County farmers from 1967 through 1977 showed:
1. Petroleum products showed the most drastic increases; increases averaged 216 percent. Propane increased 260 percent. An energy policy which is effective in reducing inflation rates of petroleum products is a most pressing need.
2. Farm chemicals (cotton insecticides and defoliants which are petroleum derivatives) showed an increase of 175 percent.
3. Rubber products (e.g. tractor, implement, and road vehicle tires) increased by 72 percent.
4. American-made hammered and pressed steel items, increased 245 percent. A solutionto the rapidly increasing price of steel is imperative for agriculture.
5. Farm equipment increased 173 percent. Highest increases in equipment for which data were obtained were planters and cultivators which increased 216 percent.
American agriculture uses over half the steel milled in the United States. Much of the steel is used in equipment to a farming operation. Attached is a list of the most basic equipment required for a 1,000 acre diversified farming operation in Fisher County. The approximate cost of this equipment purchased new is $241,330. The same equipment purchased used would cost approximately $159,675.
Fisher County has an average annual income of $22.5 million from agriculture. At no time from 1967 through 1977 were any agricultural commodities marketed at 100 percent of parity. The 1967 prices were an average of 25 percent below parity; the 1977 prices, lowest percent of parity since 1933, were an average of 35 percent below parity.
The attached graph shows average percent of parity since 1910.
In addition to prices for agricultural commodities already being below parity, the slight increases from 1967 through 1977 in prices paid farmers and ranchers in no way kept pace with increases in prices for essential goods and services purchased. During this period agricultural commodity prices increased the following amounts: (1) cotton increased 21 percent; (2) cottonseed increased 14 percent; (3) wheat increased 52 percent; (4) milo increased 28 percent.
Texas State Senator Ray Farabee recently stated:
When costs of production exceeds that income ($22.5 million acreage farm income), it not only hurts the people of Fisher County, but it hurts Texas and America and destroys the family farm which has been responsible for making this country the most productive in the world.
Not only has cost of production exceeded income for Fisher County farmers and ranchers, but the cost of living has shown drastic increases during the period from 1967 through 1977.
Computations revealed:
1. Medical services which include doctor, hospital, and nursing care, increased 208 percent. Prescription drugs, identical in form today as in 1967, rose 105 percent.
2. American-made retail cotton products which have not been improved since 1967 (i.e. sanforized with shrinkage allowances but not prewashed, faded, etc.) increased 93 percent. In contrast the price (already below parity) paid for baled cotton used in these manufactured cotton products increased only 31 percent
3. Grocery items manufactured from raw agricultural products increased by 75 percent. Canned vegetables increased only 32 percent, which suggests the vegetable farmer is experiencing the same problems as the Fisher County farmer and rancher.
The difference between these average increases (31.25 percent average increase for agricultural products and 139.4 percent average increase for goods and services) puts the Fisher County farmer and rancher at a 108.15 percent disadvantage. This 108.15 percent disadvantage shows why farmers and ranchers are losing money in their farming and ranching operation and equity in their land, homes, and equipment.
Mr. McGOVERN. Mr. President, will the Senator yield me 2 minutes? I thank the Senator from Texas for his support, and I would suggest, if there is no objection, that we go to the consideration of the Allen-Thurmond amendment which would set the target price on cotton at 70 cents. Senator BENTSEN of Texas would also like to be listed as a cosponsor, as would Senator TOWER, and I ask unanimous consent that they be added.
The PRESIDING OFFICER. Without objection, it is so ordered.
The question is on agreeing to the amendment of the Senator from Alabama. (Putting the question.)
The amendment was agreed to.
Mr. TALMADGE. Mr. President, I yield 1 minute to the distinguished Senator from Montana.