February 9, 1978
Page 3005
Mr. MUSKIE. Mr. President, I yield myself 5 minutes. I expect that Senator BELLMON from the Budget Committee may be on the floor shortly to speak on the same subject, if he can get away from the Budget Committee hearing we are conducting this morning.
Mr. President, there is no question that all of us understand that the farmers of this country face a critical problem. What I have to say this morning should not be interpreted as a failure to understand the existence of that problem.
The farmers in my State have severe income problems. They have not benefited from the farm program since the 1940's. Potato farmers of my State are facing one of the most disastrous years in history. When I was elected Governor of Maine, there were 7,000 potato growers in my State. There are now less than 1,000. They have not benefited from a farm program since the 1940's. The resolution before us would benefit them in no way. The farm bill we passed last year benefits them in no way.
The poultry growers of my State benefit from no farm programs. Indeed, they have not solicited one. So this legislation and this resolution do not meet the problems that all of the farms of this country are facing.
Nevertheless, there is a problem. There is, of course, a program. The Agriculture Committee would not be meeting its duty, in my judgment, if it were not scheduling hearings to consider the options for action in this largely unanticipated situation. I rise to speak this morning so that the Record will not suggest that the pending resolution is to be interpreted as a policy-setting action by this body. It is only a sense-of-the-Senate resolution. If it were adopted without a word of question about it, I am fearful that it might later be interpreted as a policy-setting action which is binding upon the Senate as it considers future legislative proposals. That is the reason I rise to speak, Mr. President.
This resolution states:
It is the sense of the Senate that the President and the Secretary of Agriculture should exercise the broad authority vested in them under the Food and Agriculture Act of 1977 and other statutes to increase farm income.
First. The installation of a voluntary land diversion program for 1978 under which payments would be made to producers of wheat, feed grains, and upland cotton who divert cropland from production.
Second. The establishment of higher price support loan rates for the 1978 crops of wheat, feed grains, and soybeans at levels substantially above the rates in effect for these 1977 crops.
Third. The establishment of a price support loan rate for non-quota peanuts for the 1978 crop at the same minimum level required for quota peanuts.
Fourth. The expansion of export sales of American agricultural commodities, including increased sales under Public Law 480.
The resolution also states that—
It is not intended in any way to affect the consideration by Congress of additional legislation that may be needed to assist farmers for 1978 and subsequent crop years.
I am reassured, Mr. President, by the inclusion of that statement in the resolution to suggest that Congress will be free to take whatever action the hearing records may suggest later in the year on specific legislative proposals.
It is quite obvious that this resolution has major policy implications which could affect the second budget resolution levels of spending for fiscal 1978 and also the level of spending for fiscal 1979 and future years. For these reasons, as chairman of the Budget Committee, I wish to comment on it. While Senate Resolution 393 does not require the Secretary of Agriculture to take any of the actions specified, it puts pressure on the Secretary to increase Federal outlays to farmers.
The latest Senate scorekeeping report, issued last Monday, shows that, taking into account all possible later requirements known at this time, we may be over the second budget resolution ceiling for fiscal 1978 in budget authority by $300 million, although there is $2.1 billion left in the outlay ceiling in the over-all totals in fiscal 1978.
However, the President's January budget contains estimates for fiscal 1978 which, if they prove to be correct, would cause the second budget resolution budget authority ceiling to be breached by $2.8 billion while outlays would be exceeded by almost $4 billion without any implementation of this resolution.
The Congressional Budget Office is now analyzing the President's budget estimates. We do not yet have their professional judgment as to the reasonableness of the President's estimates. We will know more in a week to 10 days, and I shall share that information with the Senate.
There is no question, however, that a proposal such as the Agriculture Committee is making would break the budget if it is implemented.
We do not know exactly what this resolution will cost. But it contains the same proposals which Senator TALMADGE, in a press release issued January 23, called on the Carter administration to implement in his five-point program to pump $8 billion into the farm economy. In that statement, Senator TALMADGE said his land diversion proposal would cost up to $3.5 billion for 1 year, and it can be assumed that, if it is implemented with the urgency he suggests, half or all of that cost could occur in fiscal 1978. Senator TALMADGE also urged that the loan level for wheat be increased by 50 cents per bushel to $2.75 for the 1978 crop, which he estimated would cost another $1 billion. Most of this billion dollar outlay could occur in fiscal 1978. We can conclude that about half of the $8 billion he has said he wants farmers to receive in additional payments could become outlays in fiscal 1978. As I have said, I can assure my colleagues that if that occurs, it will bust the budget for fiscal 1978.
Let us get away from the overall budget totals and focus specifically on what this resolution does to the agriculture function of the budget. When the second budget resolution for fiscal 1978 was adopted by the Congress, it was more than generous in providing for the programs that comprise the agriculture function. It provided $2.1 billion in budget authority and $6.3 billion in outlays for fiscal 1978. That was $4 billion more in outlays than President Carter recommended in his February 22, 1977, budget message. That $6.3 billion in outlays was intended to be adequate to cover the costs of the Food and Agriculture Act of 1977.
The latest Senate scorekeeping report shows agriculture function outlays are likely to be $8.1 billion, or $1.8 billion above the functional ceiling in the second budget resolution.
The President's latest estimate of agriculture outlays for fiscal year 1978, contained in his January budget, is $9.1 billion, or $2.8 billion above the second budget resolution level. Preliminary information from the Congressional Budget Office indicates that this $9.1 billion total is likely to materialize.
So regardless of which estimate you use, the agriculture function outlay ceiling in the second budget resolution has already been exceeded by $1.8 to $2.8billion, and that does not include the increased spending which the Agriculture Committee now urges.
Let me also say a word about the congressional budget process. On September 15, less than 5 months ago, we adopted a congressional budget. We set a ceiling on outlays at $458.25 billion, we set a floor on revenues at $397 billion, and we said the deficit should not exceed $61.25 billion. We set national priorities within those ceilings. Now we are considering a resolution that tells the President and the Secretary of Agriculture that we did not mean what we said when we established those ceilings, that we ought to ignore those ceilings and give a blank check to agriculture. That is what this resolution suggests. It does not even tell the Secretary of Agriculture how much to spend, just so long as he spends enough to satisfy those who want more and more and more for agriculture.
There is another important point that we ought to consider with respect to this resolution. This resolution was ordered reported by the Agriculture Committee on February 1 — the same day that the chairman announced a full-scale inquiry into current farm problems with hearings to begin on February 23. Here we are considering a resolution to have the Secretary of Agriculture take action before the Senate Agriculture Committee hears a single witness discuss the proposals made in the resolution and before the committee can give adequate thought to the consequences of any proposals which may be offered.
I know farmers are having difficulty selling their commodities at a fair price, paying their bills, and providing for all of their needs. But so are a lot of other Americans. I hear complaints not only from farmers, but from people, in all walks of life — the poor, the downtrodden, the middle-income wage earners who bear most of the tax burdens of this country, and the elderly who have a hard time paying their bills too. So it is not just the farmer that has a stake in the orderly budget process, but every American. And if we give in to one group who demand more Federal spending for their needs, where does it all lead. I will tell you where it leads — it leads us right back to where we started, before we set up this budget process, with no real control over spending, inflation or the Federal deficit.
I think the proposals presented here are far too important to be dealt with in cavalier fashion. One of the great strengths of the Senate is that it is a deliberative body which can think before it acts.
This resolution was introduced and reported on Tuesday. I doubt seriously if many Members of this body have had time even to read the report filed with the resolution, much less consider the implications. Furthermore, it has been difficult to get the views of the Secretary of Agriculture due to the constraint of time. I asked the Secretary of Agriculture for his views on this resolution and for a cost estimate of its costs on Tuesday afternoon, as soon as a copy of the resolution was available. I have not yet received his response.
Because I do not think that this resolution will be implemented, and because I do not want to embarrass any of my colleagues concerning this resolution, I will not ask for a record vote on it.
I regard this resolution as a move away from the discipline of the budget process, and I hope we will not be faced with other proposals which urge the administration to exceed the level of the budget resolutions that have been agreed to by the Congress.
Mr. President, I reserve the remainder of my time. I understand I have about 3 minutes left.
The PRESIDING OFFICER. Who yields time?
Mr. TALMADGE. I yield 1 minute to the newest member of our committee, the distinguished Senator from Arkansas.
The PRESIDING OFFICER. The chair recognizes the Senator from Arkansas.
Mr. HODGES. Mr. President, I am somewhat surprised by the remarks of the distinguished Senator from Maine. I was involved in farming in 1974 when this problem began on the farms. It directly relates to the Federal Government and to these institutions. So this is not something that the farmer himself has gotten himself into.
It is unfortunate that only a short time is available to discuss and debate these matters. But the farmers' stress is apparently better understood by the American public. The leading Harris poll indicates a majority of the American public being polled were willing to pay an increase of 5 percent on their food in order to help the farmer, apparently having more sympathy in the general American public than they do in the representation in Maine.
But we were told in 1974 in the farming community, "Plant fence row to fence row because we can sell at high prices everything you produce." Now we have to come back to that same Government.
I am aware my time is up and I regret it because this is a serious issue, not only for the American farmer who is in deep trouble, but those who eat. So my remarks should be listened to only by those who eat three meals a day because they are the ones ultimately that will have to pay the price for the farmers' demands.
Mr. President, I rise in support of the resolution being offered by the Committee on Agriculture, Nutrition, and Forestry. I voted for this resolution in committee and I intend to vote for it again this morning. However, I think a word of explanation is in order so that the resolution may be placed in a proper context.
At my suggestion to the committee, section 2 was added to the resolution. This additional section is intended to indicate clearly that the resolution committed neither the Agricultural Committee nor the full Senate to the Agricultural Act of 1977, directly nor indirectly. Indeed, my personal view is that the Agricultural Act of 1977 is not sufficient to meet the severe crisis which is taking place in American agriculture. Certainly the responses of Secretary of Agriculture Bergland to this point have constituted the use of band-aids to stop a deep and open wound. His responses to date not only will not alleviate the problem, but essentially indicate a serious misunderstanding or lack of concern for a fair and equitable solution.
A brief restatement of the difficulties facing American agriculture is in order. Farm debt since 1972 has increased from $60 billion to approximately $120 billion. Farm net income in 1972-73 was approximately $31 billion, but has now decreased to $19 to $20 billion in 1977, and in terms of 1972 spending power is only $13 billion. It does not take an economics degree to realize the serious implications of the direct relationship of debt to income. Without immediate assistance many farmers will go bankrupt.
If those figures alone do not convince the executive branch, the spontaneous arousal of the American farmers, seen specifically in the American agricultural movement and farmers' presence in great numbers in Washington and at rallies across the country should provide the concluding evidence.
Farmers are by nature passive people, and probably to their own detriment have failed to become as involved in the political arena as have others. They are extraordinarily efficient in raising food and fiber, and in the past have relied upon hard work and efficiency to achieve a fair shake in the market place. In my judgment most of the present problems facing farmers trace directly to Government actions taken in the last 4 years. The soybean embargo by President Ford in 1974, the freeze on cattle prices by President Nixon in 1973, and the demand for full agricultural production in both 1973 and 1974 have both distorted and depressed farm prices.
I am of the opinion that within the next few years there will be substantially higher prices for farm products. Simple economics indicate that higher prices must occur because products can no longer be produced at a substantial loss to the producer. There will be food production in the future sufficient to meet the needs of America. Thus, the basic issue is not higher prices, which will occur, nor whether there will be food production. The basic issue is who will be doing the farming in the future, and how will such higher prices be obtained? Under the present policies of the Secretary of Agriculture and the executive branch of the Government; and under the Food and Agricultural Act of 1977, many of the small and medium farmers and cattlemen presently producing will be driven from production.
Agricultural production will then move into the hands of fewer people, and be controlled by large capital investment. The prices inevitably will rise, but that rise will be caused by the bankruptcy and losses of many of the people farming now. That approach is intolerable to me, unacceptable to a majority of Americans, and can be averted only by decisive and new action by this Congress and by the President.
It is time that we develop a comprehensive and total agricultural policy. The situation has existed for too long that one commodity receives benefits solely because of a disaster or severe economic problems in another commodity. The history of the last few years has been wholesale transfers of economic problems from one commodity to another, because when severe economic problems affect a commodity such as wheat, as in present markets, those producers who would ordinarily plant wheat then switch to soybeans.This is now occurring since there is an 8 percent increase in planting intention projected in soybeans for 1978.
The final result simply transfers the economic problems facing wheat markets to soybean markets. It is this transfer of economic problems from one commodityto another that has put American agriculture on a vicious cycle, and put the agricultural producer at the mercy of the middle men. This trend must stop. It can only be done, however, with a broad and consistent look at agriculture.
The American public has a large stake in seeing that the present character of agricultural producers does not change. The recent Harris poll which showed overwhelming public support for the family farmer and his severe economic plight is a clear signal the public itself is more sensitive to these problems than those decision makers in the executive branch. Indeed, a majority of those polled stated that they would be willing to see the price of food go up as much as 5 percent if it would benefit the American farmer. It is moving to me to see the sensitivity of the general public to these agricultural problems, and I call on our leaders to be as farsighted as their people.
In conclusion, I think it clear from my remarks that I do not believe that the Food and Agricultural Act of 1977 will alleviate the economic problems facing American agriculture. Our chairman, Senator TALMADGE, has set aside considerable time in the Agricultural, Nutrition, and Forestry Committee for hearings on specific suggestions for solving the farm problem. I admire his leadership in doing this, and applaud his openness and willingness to seek solutions that will not only be fair and equitable to the American farmers and the American public, but will also provide meaningful long range agricultural policies. The American farmers and stockmen are not asking for a Government handout nor for a guaranteed profit. They are simply asking for the ability to obtain a fair and reasonable price for the products which they grow so skillfully.
The planting of a farm crop or the raising of livestock is still the greatest risk venture in American business today. Farmers are willing to take those risks. They ask, however, that they no longer be a pawn in American foreign policy and a statistic to be manipulated in our balance-of-trade deficit. They no longer want their family and assets to be sacrificed for a policy of cheap food.
The general sense of this resolution is that not enough has been done for American agriculture, that considerable additional measures must be taken, and that those of us in the Congress are open to suggestions and moreover commit ourselves to seeking a fair and equitable solution for all.
Mr. TALMADGE. Mr. President, I yield1 minute to the distinguished Senator from Montana.
The PRESIDING OFFICER. The Senator from Montana.
Mr. MELCHER. I thank our chairman.
Mr. President, adoption of this resolution is absolutely essential. It is only an expression of what way we are going to go here in Congress in urging to the administration to recognize that and we will have to follow up with a solemn program that is legislated by the Congress and passed by the President to do something about farm and ranch income.
I point out at this time that when we raise the low rates on grain, we narrow the gap on deficiency payments. That means there is less of a Treasury outlay for those deficiency payments for target prices, and raising the loan rates makes all kinds of new economic situations, not only for American farmers, but also for the Treasury, and will be demonstrated in the CBO study as an offset for any other costs that might be involved for the farm program.
The PRESIDING OFFICER. The Senator's time has expired. Who yields time?
Mr. MUSKIE. What is the time situation?
The PRESIDING OFFICER. The Senator has 2½ minutes.
Mr. MUSKIE. Does the Senator from Oklahoma wish any time?
Mr. BELLMON. Mr. President, will the Senator yield me 2 minutes?
The PRESIDING OFFICER. The Senator from Oklahoma is recognized.
Mr. BELLMON. Mr. President, I was not in the Chamber for all the debate. I would not want to go over matters already covered, but I understand the concern that the Senator from Georgia feels about the plight of the American farmer.
There is no question, American agriculture is in a very serious condition. Many farmers have lost all the money they have had during the last couple of years when prices have been substantially below the cost of production.
I join with Senator TALMADGE in the desire to help improve the situation and I know unless improvements are made that the ability of this country to feed its people and furnish goods for our customers overseas is going to be seriously hurt and that we cannot allow this to happen.
I would not support the system that Senator TALMADGE has chosen to bring about these changes. Rather, I feel the Secretary of Agriculture, using the authority we gave him in the 1977 Farm Act, can set aside, or can cause farmers to set aside, additional acreages, in this way bring the supply of commodities more in line with demand, and in this way strengthen the prices in the market place in an orderly way.
My concern is that if we were to take the path Senator TALMADGE's resolution would call for, by increasing support prices, that it would price American farm commodities out of the world market.
Especially in cotton, it would be damaging, because higher support prices would make cotton less competitive with synthetics, reduce consumption of cotton, add to the oversupply, and thereby bring about further market depressing surpluses.
So I do not want to be on record as supporting the way Senator TALMADGE would go about helping American farmers; but I would like to be on record recognizing the seriousness of the problem and expressing my hope that the administration and the Secretary of Agriculture and the President will use the authority they have to help correct the situation.
Mr. MUSKIE. Mr. President, do I have 30 seconds left?
The PRESIDING OFFICER. The Senator's time has expired.
The Senator from Georgia has 30 seconds.
I might caution, we must dispose of the resolution before 11 o'clock, because we must go into executive session.
Mr. TALMADGE. Mr. President, I yield back my 30 seconds.
Mr. MUSKIE. May I have 15 seconds?
Mr. TALMADGE. I yield to the Senator, providing that will take us to 11 o'clock. I want to vote by 11.
Mr. MUSKIE. I just wanted to say to the distinguished floor manager of the resolution that the resolution is not binding. The record indicates there are issues that we will consider later in connection with legislation.
Because it is not binding, I will not ask for a record vote. I see no reason to challenge the right of Senators who want to express concern by this means to do so. I simply wanted the record to be clear as to what the possible costs of implementation of this resolution might be.
So, as an expression of my concern, I have no desire to ask for a rollcall vote.