September 23, 1978
Page 31122
Mr. DANFORTH. I should like to ask the Senator from New York if he has considered, .in making that assertion, that in 1977, non-Federal governmental units — State and local governments — had an aggregate surplus of $29.6 billion, and the non-Federal governmental units have had an aggregate surplus in each of the last 10 years. Therefore, obviously, if a non-Federal governmental unit — a city or county — has a surplus in its revenue such as the $5 billion that California had or the $5 million that the city of Houston, Tex., had, it would not necessarily have to raise local property taxes to pay for the surplus.
Mr. MOYNIHAN. The Senator is correct, and the circumstance — which he knows very well, and I appreciate debating with him on these matters, because he does know so much about it — is that there is not a uniform situation. The situation is complex indeed. The bulk of this money will be going to jurisdictions which are on the edge of insolvency and have been so for the last 5 years, places which have not recovered from the economic shift that took place in the course of the largest recession, deepest recession, we have had since the 1930s.
In the course of that recession, there were huge shifts in production facilities from some parts of the country to others. It has been a common feature of those changes. But it leaves behind and stranded cities and stranded people, and the President of the United States has asked that we respond.
The Senator from Florida raises a perfectly legitimate concern, when he cautions against this becoming a fixture of our Federal assistance programs. But there is a trigger built into this legislation, which will keep it from becoming permanent. This is legislation that will not be in effect if we are at levels of unemployment which, not 10 years ago, we thought to be very high indeed, 4.5 percent.
Mr. CHILES. Mr. President, I wonder if we might get the yeas and nays while we have enough Senators?
Mr. MOYNIHAN. I am happy to do that.
Mr. CHILES. Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient second.
The yeas and nays were ordered.
Mr. MOYNIHAN. Does the Senator wish to call up his amendment?
Mr. CHILES. Yes.
Mr. MUSKIE. Mr. President, I should like to take just a minute or two, if I may. I suppose, as much as anyone, I am responsible for the establishment of the countercyclical program. That is why I have followed its establishment, its development, and its evolution with great interest.
Part A of the pending bill continues the countercyclical program as it was originally established. I am delighted that part A is before us and I hope that the Senate will support it, because I think it is important to have the principle on the books.
I am concerned about part B. Senator CHILES has given some of the reasons for my concern as well as his own. Nevertheless, I am reluctant to see part B eliminated altogether. It is a fact, and I am satisfied by the data which has come to my attention, that, even after the national trigger shuts off part A, there are cities in distress which continue to need some kind of assistance which part A provides when there is national unemployment of 6 percent or higher. So I much prefer the Danforth amendment, which corrects some of the mistakes which I think the Committee on Finance wrote into part B.
It would establish a trigger for local assistance at 6 percent for both A and B. It would eliminate the revenue sharing bonus in part B which was written into the concept by the Committee on Finance, which I think reduces the targeting, and which has been the subject of much of the discussion here this morning. And it would reduce the cost of part B.
As the bill now stands, more money would flow at 5 percent unemployment under part B than would flow at 6 percent unemployment under part A. So part B does need reform, in my judgment. The Danforth amendment proposes such reform, and I would support it.
My difficulty with Senator CHILES' amendment is that it would eliminate all assistance for cities in real distress after part A has turned off as a result of the working of the trigger. For those reasons, I find that I cannot support the Chiles amendment but that I can support and will support the Danforth amendment.
Mr. MOYNIHAN. Mr. President, I thank the Senator from Maine for making clear what I regret to have to say about the amendment of the Senator from Florida, which is that it kills the bill. We are going to have a vote on the bill as soon as we vote on the Senator's amendment. Thereafter, if, as I do hope the Senator's amendment is not successful, then we shall hear from Senator DANFORTH a proposal which has great merit. If it did not, it would not have the support of the Senator from Maine. On the other hand, it does not have enough merit to have persuaded the Senate Committee on Finance.
Mr. CHILES. It has greater merit than it had earlier this morning.
Mr. MOYNIHAN. It may have. Such is the purpose of informed discussion of issues such as has taken place.
If the Senator is ready to put the question
Mr. CHILES. I am ready. But I just have one word. The Senator from New York characterizes the Chiles amendment as killing the bill.
If you believe in countercyclical revenue assistance as designed by the Senator from Maine, as passed by this Senate, and as has been operating in a time that we were in a recession, then a vote for the Chiles amendment is a vote to continue that progress. If you want to change it to a completely different program, then you might want to vote against the amendment. But in no way does it kill the program as we have known it.
Mr. MOYNIHAN. The Senator is correct in what he says. But it does, in effect, kill the second stage which we are shifting into as we move away from that great recession. But, well-informed, and perfectly well-intentioned persons can differ over the wisdom of this part of the program.
Mr. MOYNIHAN. I yield back the remainder of my time.
Mr. CHILES. I yield back the remainder of my time.
The PRESIDING OFFICER. All time having been yielded back, the question is on agreeing to UP amendment No. 1902 of the Senator from Florida. The yeas and nays have been ordered and the clerk will call the roll.
The legislative clerk called the roll.
The result was announced — yeas 22, nays 30, as follows:
So the amendment (UP No. 1902) was rejected.
Mr. MOYNIHAN. Mr. President, I move to reconsider the vote by which the amendment was rejected.
Mr. ROBERT C. BYRD. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. DANFORTH addressed the Chair.
The PRESIDING OFFICER. The Senator from Missouri.
Mr. MOYNIHAN. Mr. President, may we have order?
The PRESIDING OFFICER. The point is well made. The Senate will be in order. Senators will take their seats.
Mr. DANFORTH. Mr. President, the amendment which I will call up as soon as some drafting changes are accomplished is the one on which there is a 1-hour time agreement. The purpose of this amendment is to better target countercyclical revenue sharing.
Mr. DURKIN. Mr. President, will the Senator yield?
Mr. DANFORTH. I yield to the Senator from New Hampshire.
Mr. DURKIN. I thank the Senator from Missouri.
I ask unanimous consent that Jeff Petrich and Harris Miller, of my staff, be accorded the privilege of the floor.
The PRESIDING OFFICER (Mr. ZORINSKY) . Without objection, it is so ordered.
Mr. MOYNIHAN. Mr. President, I ask unanimous consent that Mr. Tom Cator, of Mrs. HUMPHREY's staff, be accorded the privilege of the floor.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MOYNIHAN. Mr. President, we have not yet gotten the Chamber in order.
The PRESIDING OFFICER. The Senator from New York is correct. The Senate will please be in order. Those wishing to carry on conversations please retire to the cloakroom.
The Senator from Missouri.
Mr. DANFORTH. Mr. President, this amendment, which I will offer, does not go so far as the amendment which was offered by the Senator from Florida which we just voted on, but it does, I think, bring a little bit of rationality in the countercyclical revenue-sharing program by better targeting it to those communities with high rates of unemployment and, therefore, with tax bases which have been eroded.
The amendment which I will offer will significantly reduce the cost of the countercyclical revenue-sharing program. It will reduce it by approximately $310 million over the next 2 years.
The amendment will eliminate from eligibility all local governments with unemployment of 6 percent or less. As opposed to the current law which has a local trigger of 4½ percent, this would provide an unemployment trigger locally of 6 percent.
It would eliminate from the present bill the general revenue-sharing element of the funding formula that is under the present bill, and subtitle B communities are given the option of computing their benefits on the basis of the countercyclical revenue-sharing revenue or the general revenue-sharing formula whichever is best for them.
This would eliminate that option, which would be a substantial cost saving, and all benefits would be computed under the countercyclical revenue-sharing formula which is the existing formula in the law today.
It would eliminate State governments from eligibility under subtitle B of the program, that is, when unemployment nationally is below 6 percent State governments would not receive anything. However, it would maintain State governments as participants in the program when unemployment nationally is over 6 percent, and under subtitle B it would reduce the size of the program quarterly from $125 million a quarter, as is the case under the bill now, to $85 million quarterly, and it would hold harmless all cities over 6 percent under both subtitles A or B so that they would not be receiving any less under the program.
Mr. President, I first became interested in this program a couple months ago when I visited Cape Girardeau, Mo., and I happened to be talking to a friend of mine who is the county collector of Cape Girardeau whose name is Harold Wills Kuehle. He told me when I saw him, "We just received our $3,000 check."
Cape Girardeau County is a county of about 50,000 people. He said:
We just received our $3,000 check. We don't know what to do with the $3,000. So we sent away for a booklet to tell us what to do about it.
I then called, when I got back to Washington, Mr. Kuehle's wife, who works for the State for the county auditor's office, and I put my secretary on the other extension of the telephone and got her to take down word-for-word what Mrs. Peggy Kuehle told me on the telephone. It is a very short story, and I wish to read it to the Senate. This is what Mrs. Kuehle said about Cape Girardeau County:
The check came to the Treasurer's office of the county. They had no idea what the money was for, so they brought it to the auditor's office and asked what it was for and what they should do with it. We were not sure. It was anti-recession money. We had never received it before.
So Mr. Mackey who is the auditor called the officer who was on the check. He did not know about it either, and said he would check on it and get back to him.
We were not sure that we were supposed to have it.
A call came from Washington saying we were supposed to have it, because according to their figures it was determined that Cape Girardeau County's unemployment rate had gone up and we were entitled to it. We had never received any before.
Washington said that they would send the regulations that went along with the spending of this money because it was different from revenue sharing.
Cape Girardeau County has not spent the money yet because they do not know how to spend it. They have not made a decision of what to do with it because there are so many regulations. We got a kick out of it.
The regulations said something like it could not be put into construction or capital improvements, anything consumable, or that could change its shape. It would be a new accounting, and so forth.
It said something like it could be used for bonuses and salary increases. We were all for that, but the county court would not allow that.
The regulations all said that it had to be spent in six months. You know, with a thing like this, if you do not do it just right, you have all kinds of complications.
Mr. President, I think the theory of this program at the outset of countercyclical revenue sharing was a good theory. It was to assist governments that had their tax bases eroded in periods of high unemployment.
But when you have a local trigger that is down to 4½ percent, which is below what the Council on Economic Advisers says is full employment, then you really do not have countercyclical revenue sharing at all. You have a kind of a grab bag approach. You have sort of a shotgun method of spreading money around the country.
So Cape Girardeau County, with a population of 50,000 people, receives a check for $3,000, or Madison County, Mo., I believe received a check for $164.
Senator CANNON read a list of the checks that were received by communities in his State, and the State of Missouri is very similar to that.
For example, Memphis, Mo., received a check for $345; Valley Park, $303; a town, Arcadia, Mo., received a check for $164.
That is really no real help, Mr. President, and the whole purpose of this amendment is to bring a little rationality into the program to try to target the program more effectively at those communities that really do have needs; namely, those with unemployment of over 6 percent, and to try to create a system where the money is not just spread around on sort of a willy-nilly basis as is the case with the present program.
Mr. PROXMIRE. Mr. President, will the Senator from Missouri yield?
Mr. DANFORTH. I yield.
Mr. PROXMIRE. I congratulate the Senator on this amendment. I think it is a thoroughly rational, sensible, and logical amendment. I hope the Senate will adopt it, because what the Senator is doing, as I understand it, is to say if we are going to continue to have a program that is going to help cities in distress it should do that. It should do that. It should not just be an addition to revenue sharing.
As I understand it, he does four things:
No. 1, he eliminates the eligibility for all governments that have unemployment of less than 6 percent.
Mr. DANFORTH. That is correct.
Mr. PROXMIRE. I cannot understand anyone would argue against that at least as a national policy. I can see if I were a mayor in a city that had unemployment of less than 6 percent I would not agree with it. But as a matter of national policy that makes sense.
No. 2, it would eliminate the general revenue-sharing element from the funding formula so it would restore in current law estimated savings of $22 million in fiscal year 1978. I think it is more than that now. The Senator redrafted his amendment to provide for a greater saving than he indicated in the sheet he passed around. Is that not right?
Mr. DANFORTH. That is correct. For 2 years it would be a saving of about $310 million, which would be $62 million in fiscal year 1979 and $248 million in fiscal year 1980.
Mr. PROXMIRE. So the Senator's amendment would have the effect of reducing assistance as unemployment declines rather than the reverse which is the way the bill is in its present form.
Mr. DANFORTH. That is correct.
Mr. PROXMIRE. So it would become a countercyclical program, not a counter-countercyclical program.
Mr. DANFORTH. That is correct. Instead of having the amount of funds available for distribution under the program increased as unemployment goes down, which would be the reverse logic, the amount of funds under the program would be reduced as unemployment goes down.
Mr. PROXMIRE. I thank the Senator.
Mr. MOYNIHAN. Mr. President, may I say that not for the first time has the Senator from Missouri risen in this Chamber and pointed to the difficulties which are presented by the kinds of legitimate compromises which are made in the course of trying to fashion a national program of this kind. We have tried to craft a national program that will establish uniform provisions in situations with a great lack of uniformity.
It is an essential fact that this program is designed to make some provision for the difficulties of States and localities which have high levels of unemployment.
The Senator from Missouri's proposal is to eliminate those governments which have unemployment rates under 6 per-cent.
The Senator might want to hear that I am disposed to accept his amendment, but I do not accept the idea that 5.5-percent unemployment is an acceptable low level that precludes any public exertion; nor does he assert it. For 15 years we have been having this kind of national debate over acceptable unemployment levels, and each year I see the level of unemployment creep upward, to a point which is thought to be normal and moderate and even agreeable.
The Senator's amendment would reduce the impact of this bill. The President wanted more. President Carter wanted more than this provides. Yet the essential purpose of this legislation persists and, if anything, is to some extent clarified. We lose something, 2,900 jurisdictions lose what they would get. We must understand this. In the sense that 2,900 jurisdictions lose something, every State loses as well. The program will be diminished. I think it is significantly cut back. But it is, if I am not mistaken, consistent with the mood of the Senate today, and in the circumstances I feel the appropriate thing to do is to respond to the mood of the Senate.
I see the Senator from Texas has taken the floor.
Mr. BENTSEN. I think the Senator made some good points in the debate. I, for one, am ready to accede to his amendment, if the manager so desires.
Mr. MOYNIHAN. That is very generous and a very characteristic response of the Senator from Texas.
Mr. JAVITS. Mr. President, will the Senator yield?
Mr. MOYNIHAN. I am happy to yield to my senior colleague.
Mr. JAVITS. I, too, am pleased that the Senator will take this amendment. It is not only because of the mood of the Senate, but because of the mood of the country. We come here from a big city, as I do, New York, which, as well as our State, has many requirements, not demands. We are in really very, very grave trouble. Therefore, when it is possible to fashion something which can help us and, at the same time, represents general economy to the total expenditure of the United States, even if it is not the optimum — and I agree with you, Senator MOYNIHAN, that it is not the optimum — it is a very wise and statesmanlike course for us to take.
I think we need so much. The difficulty of the great cities is so enormous in the problems they have, especially with us and many other cities, with the demographic problems, the shifts in population, that we should use our own best brains to minimize the cost, indeed, to emphasize more and more guarantees and borrowing and other ways in which actual expenditures will not be taxed, regardless of the archaic book-keeping we do in our Federal Government respecting expenditures, which is ridiculous and crazy but, nonetheless, the fact that we have to live with it.
So I would like to join Senator MOYNIHAN in thanking Senator DANFORTH and
in appreciating the thoughtfulness which dictated cutting this particular program exactly to fit what was the pressing need, and I am delighted that he is accepting it. I thank the Senator very much.
Mr. MOYNIHAN. It is characteristically generous of my senior colleague in response, and I thank him.
Mr. MUSKIE. Mr. President, will the Senator yield?
Mr. MOYNIHAN. I am happy to yield to the Senator from Maine.
Mr. MUSKIE. I think the Danforth amendment is pretty well understood by the Senate as a whole, as represented by the previous vote. The previous vote indicates that the Senate is receptive to the form as represented by the Danforth amendment. As I indicated earlier, I said I would accept it, and I see no reason to further belabor the point.
Mr. MOYNIHAN. I will belabor the point for only a little. When the Senator from Maine indicated he was for the Danforth amendment, it suggested to the Senator from New York that he had better be for it as well.
Mr. MUSKIE. I had no doubt about the position of the Senator from New York at any time.
Mr. MOYNIHAN. Mr. President, the amendment is not pending. Does the Senator from Missouri wish to move his amendment?