August 23, 1978
Page 27383
Mr. MUSKIE. Mr. President, I have listened with great interest to the discussion this afternoon concerning the amendment of Senator HART, and also the discussion proposing additions to the bill by Senator GRAVEL. I have been trying to sort out in my own mind the implications on the budget process in the approval by the Senate of these two proposals. These two proposals were part of the energy tax bill that the Senate approved a little less than a year ago.
I was not on the floor at the time because I was hospitalized, but that bill as it went to conference had a first-year cost in fiscal 1978 of $2 billion. The budget had allowed only $1 billion. So it was in violation of the budget resolution when it went to conference.
Now we are having pieces of that offered to the Senate this afternoon. I am sure I do not have figures in which I have final confidence as to the cost of these pieces. My best information is that the Hart amendment, by itself, would have a first full year cost of approximately $1 billion, and the cumulative projection through 1985 would be approximately $10 billion.
The Gravel amendment, which includes part but not all of another portion of that bill, represents a cumulative cost through 1985 of $19 billion.
Mr. GRAVEL. If the Senator will yield, I think there is a mistake in my amendment. My staff is clearing it up now. The $16 billion item is not in my amendment. My total cost is $2 billion to $3 billion. We will get the figures to the Senator.
Mr. MUSKIE. I am not trying to confirm or not confirm any figures. The point I am trying to make is that these proposals were part of the extended debate on the energy tax bill a little less than a year ago. They went to conference. The budget implications at that time were difficult to understand fully. There was disagreement about it, although we reached conclusions about those implications from the point of view of the Budget Committee. I suspect Senator LONG had a different view of those implications at the time.
I am simply pointing out the difficulty this afternoon of trying to put on a price tag and to evaluate the budget implications of these proposed amendments to an unrelated piece of tax legislation without the opportunity to make the kind of analysis that we did with the bill last fall.
Mr. HART. Will the Senator yield?
Mr. MUSKIE. I will just take a few minutes to finish my thought.
Second, I do not know what else is in Senator GRAVEL's amendment, but I believe it may include payments to non-taxpayers, and, if so, may be subject to a point of order for reasons which were discussed on the floor of the Senate last week. Again, that is a point I have not had the opportunity to analyze, evaluate, or make a final, firm judgment about. I just find myself frustrated as chairman of the Budget Committee sitting here looking at the legislation which I did not expect to include these items, with the responsibility of advising the Senate on how it ought to proceed or what the Budget Committee's recommendations might be with respect to them.
This is not a new phenomenon with respect to tax bills. We have all experienced it. Those who have been here for 20 years have experienced it more than those who have been here 5 years. I suspect that 10 years from now we will still be experiencing it. I must say for myself, I am willing to sit here and continue to listen to debate, listen to attempts — and I am sure there will be such attempts — to reconcile these amendments with responsibilities of the budget process.
Frankly, though I am fully sympathetic to Senator HART's amendment, I am going to vote against any amendments to the pending legislation because I just find it impossible, with this state of affairs, to give the Senate any kind of thoughtful, responsible, and comprehensive judgment on what the impact on the budget process will be.
For example, here is a question: The energy tax bill which passed last year was considered within the budget limitations applicable to fiscal year 1978. Fiscal year 1978 is drawing to a close, as of October 1. The budget resolution for 1979 makes no provision for these tax proposals because an allowance was made in the 1978 fiscal budget. What, if anything, we need to do, I do not know, when Senator LONG comes back with a package that he and the House have been able to work out. It is something I have not worked out yet because I did not think I had to by this afternoon.
All I am saying is that when we approach a complicated piece of tax legislation in this fashion, we are just stepping so far outside the regular procedures or processes we have established that no one can have a clear judgment as to what the implications are from the point of view of the budget process.
I am happy to yield to my friend from Colorado.
Mr. HART. I believe I can answer the Senator's question. I do not think there is as much confusion on this issue as the Senator has indicated.
The calculations prepared by the Joint Committee on Taxation are as follows: In the Senate bill for the items named in this amendment, the figure involved there is $1,266,000,000. Again, as the Senator pointed out, the budget function there may have been for a previous year. I shall get back to that question.
The House bill for these items contained $748 million. The compromise in the conference, which is what is being offered to the amendment before us today. the Hart amendment, would cost $978 million, which is, of course, above the House provision by $230 million, but below the Senate version passed by some $300 to $400 million. That was largely as a result of a compromise on the question of refundability where the Senate receded in part from its position taken on the floor.
The principal point here, at least according to the calculations done by the Joint Committee on Taxation, is that the passage of the Hart amendment will amount to less authorization than the Senate originally passed as a result of that conference compromise, which is incorporated in the amendment.
As to the separate issue of what happens in the budget resolution, the Senator from Maine, as chairman of that committee, would be much more able to respond to this. What happens when a bill is carried over from year to year, as the energy package has been, I cannot say.
Mr. MUSKIE. I suspect, and this is off the top of my head, since I have had no opportunity to consider it, it may well be that since the Budget Act provides for the additional budget resolutions at any time that the national interest requires it, I suppose that an additional resolution is a conceivable option when Senator LONG is ready to come back to the floor; if we need additional action, that may be the vehicle for doing it.
The second point I make, referring to the figures, the figures of the Senator from Colorado are consistent with those that I have, roughly a billion dollars. The problem is that we are sending this over as a separate piece of legislation. I do not know whether the same conference committee will consider this bill or whether it will be another one, or how this bill will be handled in conjunction with the other one. We will have approved these provisions twice if the Senator's amendment is adopted and the bill as amended is passed. I suppose we can straighten it out when it all comes back to the Senate in some form. I am sure we are not going to pass the same program twice eventually.
But simply as a matter of orderly procedure, I simply cannot see this way of implementing this program. I do not believe that this program is going to become law on this bill.
Mr. PROXMIRE. Will the Senator yield?
Mr. MUSKIE. I suspect it is going to become law at some point and I shall support it when it becomes law, because I think it makes sense. But I think to do it this way is something that, as Budget Committee chairman, I ought to protest.
Yes, I yield.
Mr. PROXMIRE. As Budget Committee chairman, would the Senator feel that it might be a better proposition by the Senator from Colorado if he confined his amendment to what he has made a case for? There is an emergency need now for credit legislation for solar energy, not for insulation. The big cost of this amendment is in insulation. In insulation, they are operating at 100 percent of capacity, or close to it, in the production of insulation materials. This tax credit is simply going to be a bonanza for the people engaging in insulation production.
It will help them, but it will not increase the insulation.
Solar energy is different. The Senator from Colorado has made a case for it and made it well. However, that will have a much smaller budgetary impact, as I understand it, a fraction of the $978 million that the Senator says his amendment would cost now.
Perhaps the Senator from Maine would consider that as something that might be doable within budget constraints, perhaps not, I am suggesting that as a moderate compromise.
Mr. MUSKIE. My concern is not so much substantive as it is procedural, because the budget process was created to provide all the information that the Senate ought to have to evaluate proposals that have an impact on the budget, that have tax implications and spending implications. I just think that approaching proposals in this fashion, outside of the regular proceedings, deprives us of the kind of thoughtful, deliberative, comprehensive information we ought to have.
Mr. PROXMIRE. I understand.
Mr. MUSKIE. I do not challenge any Senator's right to use this approach. I understand what Senator Hart is doing. But I have watched these Christmas tree tax bills for so many years, I cannot imagine that anyone who has watched them can be blind to the birth of another one when it happens, or can be insensitive to the fact that they are really not productive in the long run and that they do generate some harm. I think some tax provisions have been written into the law that ought not to be in the law in the confusion generated by this kind of tax writing.
Maybe I am beginning the process of trying to resist Christmas-tree tax legislation. I was just sitting here, I was a bystander, and did not expect to get involved in this discussion. Then when we began to get involved in amendments that involved billions of dollars, I found I could not just sit on the sidelines; I had to speak.
Mr. McINTYRE. Will the Senator yield?
Mr. MUSKIE. Yes, I yield.
Mr. McINTYRE. The good Senator from Maine must realize that the Senator from New Hampshire and the Senator from Colorado are here this afternoon because we feel that these conservation provisions, the insulation and solar credits, have been held hostage too long. We think it is time that they be broken out. With all due respect to the budgetary process, and the Senator from Maine knows I have supported him time and time again, the fact remains that we are trying to highlight a part of the legislation that deserves to move. There is a consensus in both Houses that substantial parts of what we are talking about here today should already be law. The only way we have to make them law is to come down here and force the situation.
We recognize that it is not the most orderly way to do it, but I think the Senator from Colorado and other sponsors feel as I do, that it is high time this matter moved in tie interests of the people of this country.
With all due respect to the people of Alaska, I do not feel that the Senator from Alaska has a situation with the urgency like that which faces the solar industry, with all due respect.
Mr. MUSKIE. May I say to my good friend from New Hampshire, there is no Member of this body for whom I have higher regard and affection. My good friend from New Hampshire has been here almost as long as I have, and I have campaigned in New Hampshire with him for the last 25 years, so I share his sense of urgency.
I certainly understand that the floor of the Senate is the place above all legislative bodies on the face of this planet for a Senator to protest when he does not like something that is going on. I certainly would not want to chill that right at all. But I would add that I have felt like kicking vending machines that did not produce after swallowing my quarter dozens of times in my life and it has not done one bit of good. I have always had to put another quarter in and often have lost that one, too.
If you want to kick this vending machine, I do not object, but I do not really think that it is going to produce this program that we so urgently need — and I agree with the Senator — in this fashion. We are just going to begin building another Christmas tree.
Senator LONG has devised, over the years, his own unique and innovative ways of dealing with Christmas trees, with Senator LONG ending up writing the final tax bill. The public interest, by and large, has been served by that system. But it seems to me that, although I can appreciate the motivation and I share completely the Senator's evaluation of the need of the program, as Budget Committee chairman, it is my business to point out whatever I think needs to be pointed out. It is the Senate's business to override the Budget Committee chairman if that is the Senate's wish.
Mr. HANSEN. Mr. President, I thank my distinguished friend from Maine. I ask unanimous consent that Barbara Washburn of Senator JAVITS' office and Sally Crossman of Senator STEVENS' staff be granted privilege of the floor during all of the debate and votes on these tax bills.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. HARRY F. BYRD, JR. Will the Senator yield for the same purpose?
Mr. MUSKIE. Yes, to my good friend from Virginia.
Mr. HARRY F. BYRD, JR. I ask unanimous consent that Edward Beck of my staff be granted privilege of the floor.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MUSKIE. I yield to the Senator from Colorado.
Mr. HART. I, like my colleague from New Hampshire, think the fact this amendment has close to or over one and a half dozen sponsors—
Mr. MUSKIE. Beware of that.
Mr. HART (continuing) . People on both sides of the aisle who have made their own decisions, that we have gone on long enough.
I share his frustration. I think a lot of us are frustrated by the inability of this vending machine to turn out an adequate program.
For some of us, I hope a majority, we will reach a decision today to move in a different direction.
Now, the Senator in his budget capacity objects on the grounds of orderly procedure, and I understand that.
But I think the orderly procedure was applied when first introduced and worked its way through the Congress. We have a significant piece of it here today, that both Houses agreed to. It has received informal conference approval. It was taken into consideration in the original budget process. It must become law, in the judgment of some of us, if we are to move in these important areas. Like many other pieces of legislation, it has worked its way through committee, worked its way through the Houses, worked is way through the conference committee, and It is just sitting there, a hostage to some very controversial petroleum pricing problems that some of us think will never be resolved, at least in this Congress.
So, for the Senator from Maine to say "Christmas tree," I think is to avoid a very important issue.
These provisions are not incentives for chili pepper growers, they are not incentives for slot machine owners, they are not incentives for some special interest here.
They are incentives to help solve the energy problems of this country.
Mr. MUSKIE. Will the Senator yield on that point?
Mr. HART. If the Senator will allow me, that is not, in my judgment, the Christmas tree approach.
I do not like to legislate by adding amendments of this consequence onto relatively insignificant tax bills, but something has to be done. I do not like to do it procedurally.
Mr. MUSKIE. If the Senator will yield — I guess I still have the floor. No, I was not characterizing the substance of the Senator's amendment when I referred to the Christmas tree approach. I was characterizing the procedure which so often starts on the Senate floor.
Christmas trees often include a lot of meritorious proposals. So I am not denigrating the proposal. As a matter of fact, I support this form of incentive for conservation.
I just think, in the long run, we do ourselves a disservice using this type of procedure. Granted that the Senate is the one place in the parliamentary world where, when the Senate wishes to, it can abandon procedure in order to accomplish what it thinks ought to be accomplished. So I have lived with that, too.
Having made my point, I will not belabor it. The Senator understands it.
Unless the Senator from Alaska wantedto ask any questions, I will take my seat. I have made my point. I think I had a duty to make it.
Mr. GRAVEL. Could I ask this question?
I was just checking quickly the first year figures, which would have been this year had the bill passed last year, are less than second year figures.
I presume last year's budget resolution was for a period of time. Since we did not act on the bill, would it not be a proper inference that regardless of the size of .this amendment that the costs are less what was projected for this year, because we never got to the second year?
Mr. MUSKIE. We would still be in thefirst year, I think.
Mr. GRAVEL. Would we?
Mr. MUSKIE. Until October 1.
Mr. GRAVEL. Well, obviously, this cannot take place
Mr. MUSKIE. It could be last year, the best we can call is that last year's bill would have cost $2 billion in 1978, and $5 billion in 1979.
I do not know how much of that bill is encompassed in the combination of Senator HART'S pr000sal and the Senator from Alaska's. So I am not going to make "guestimates" beyond those Senator HART provided, and any the Senator can provide, because I have no basis for independent evaluation, not having had an opportunity to make one or ask CBO to make one.
So whatever the Senator gives us as estimates, I assume they are the best he can get. I do not challenge that. It is simply that I do not yet have them, and I cannot provide the Senate with any, and I think that is an unfortunate situation.
Senator HART's figures, I think, are firmer because they are based on evaluation made by the Joint Committee on Taxation which certainly is a creditable source, although it is not CBO, and that is roughly a billion dollars for the first full year cost.
Mr. ROBERT C. BYRD. Vote!
Mr. GRAVEL. Mr. President, I would just like to speak to a point raised by the Senator from Wisconsin, which was an interesting point.
The plea is made for solar, and with respect to the West, or anywhere which is logical, I agree with that.
The plea is made, from me to my colleague from New Hampshire, that the cost that we have for the Hart amendment, is about, over a 5-year period, $10,500,000,000.
So the lion's share of that cost is in the credit.
Now, we do not have—
Mr. PROXMIRE. Credit for what? Not solar.
Mr. GRAVEL No; not solar. Let me finish and I will explain.
The credit goes for furnace replacement, flue openings, caulking, wood peat stoves, insulation, heat pumps, fluorescent lighting, energy saving meters, and in some of this it was absolutely fantastic. I can recall the meter demonstration. It will save energy. It was not a high-cost item. As I recall, the high-cost item was insulation.
Now, this amendment which, of course, appeals to the consumer, and it is for the residence owner, has a lot of appeal. But when we go deeper, we find out, and I, for one, in committee was not terribly happy with the insulation credit because the prices are driven up. All the insulation that can be used is being used and this will not alter the dynamics of it. It looks like it might, but it will not.
In my amendment I am suspending import duties on insulation so that we can let more insulation material come into this country, because we do not have enough to go around.
So, we are giving credit here under this amendment, which has great virtue, to something that really does not need a credit, because there is not enough to go around. What the committee decided was to turn around and suspend tariff to get more into the country. That will help insulate more homes, to get more insulation in the hands of the workmen to fill in the studs. That will do something of value.
So I submit that prior to the budget discussion, the Senator from Colorado and I seemed to be parted on one particular issue, and that was that his had somewhat more virtue because it was agreed to by the conference. As was pointed out by the distinguished Senator from Nebraska, it obviously was a tentative agreement that we had and, subject to what other things were adopted. This was what we got down to on the list before everything fell apart.
So I submit that there is no extra merit to what the Senator is offering. It may have more sex appeal to talk in terms of what the Senator is going to give the homeowner, but in fact it is going to benefit some industrialist.
I submit that it is not very sexy to talk in terms of an investment tax credit for a producer who is going to dig holes for geothermal. But that may have a lot more impact on what is going to happen to energy in this country than caulking.
I suspect — and I cannot prove it, because I do not have the time — that the Senator's insulation credit, with all its sex appeal, costs more than what I am offering, which is $4.1 billion over the 5-year period, as opposed to the Senator's amendment, which is $10.5 billion.
So I submit that the Senate has acted on what the Senator is proposing and has passed it. The Senate has acted on what I am proposing and has passed it. The chairman of the committee has indicated to both of us that he is prepared to accept both amendments.
So I find the Senator's opposition odd, in view of what I have just laid out here as to some of the elements contained in the Senator's amendment.
If I could do it, I would add gasahol to this amendment. It was left out inadvertently. We left out purposely the burner furnaces for large enterprises because the cost is horrendous and the marginal benefit is not as strong as some of these other items.
We are talking about an investment tax credit and the additional credit of 10 percent for cogeneration property. That means that if you have an enterprise that is already generating something and it has excess heat, you can take a credit for the extra costs of using that heat to generate electricity. You can get an investment tax credit of 10 percent to do that. That is an incentive to do it. That may be every bit as beneficial as caulking or heat pumps.
The next item we have in this 10 percent investment tax credit is a recycling amendment, which obviously will save energy and is provident.
Then, of course, there is oil shale equipment and non-oil or gas electric-generation equipment which has a useful life of at least 3 years. That is as reasonable as solar energy. That is as reasonable as anything the Senator has on his side of the bill.
What we are talking about is an investment tax credit similar to these other items that have tax credits.
So I do not know how one can play Solomon and think one proposal is not as meritorious as the other.
The other item in the part I am offering is a depletion allowance for geothermal, a depletion allowance for geopressurized methane, and an allowance for peat.
Pray tell me what the difference is, other than the sex appeal, to offer an investment tax credit for peat, when the Senator is offering an investment tax credit for a stove that can burn only peat or wood. Pray tell what the difference is in that regard.
I also am offering a deduction for intangible drilling costs for geothermal wells. Oil has that. Pray tell me what the difference is between offering an amendment providing a tax credit for furnace replacement or flue openings as opposed to allowing a similar type of tax advantage for drilling some geothermal wells, These wells which offer a great deal of potential, but are not being drilled because the incentives are not there.
So I submit that, if we are talking about an energy package that is going to have some suction and become law, I would like to see it become law with these items, which are every bit as virtuous as any items the Senator has in his proposal.
I say to the Senator that the only reason I think we are all up in arms over this is that it goes to the homeowner initially. Ultimately, it does not go to the homeowner. It goes to the person who will manufacture these new furnaces. It goes to the person who will manufacture the new flue openings. It will go to the industry that manufactures caulking. It will go to the insulation industry. which has more than it can say grace over right now. We should not be giving them a credit, it should be going to increase the credits.
So if my colleague insists that we go to a vote, I am prepared to vote. I hope it is agreed to, because I think it will be a fine turn of events to turn down one facet of a bill because it does not have quite the sex appeal and the vote-gathering appeal that the other process has.
In terms of equity, the Senate and the committee have done their work, and I think there is no reason to pull out selectively what we think is an advantageous provision.
So I am prepared to vote on this amendment at this point.
Mr. HART. Mr. President, the Senatorfrom Alaska has referred to the amendment as my proposals. These are not my proposals or those of the Senator from New Hampshire or any of the other 18 or so cosponsors. These are the proposals accepted by the Senate and the House of Representatives and which have received solid acceptance in the conference committee.
The second fact of the agreement of the conference committee, I think, does distinguish the incentives of our amendment from those offered by the Senator from Alaska. The Senator from Alaska, unlike the information we have from the Joint Committee on Taxation, does not have the cost figures for the incentives he seeks to add.
Therefore, primarily by way of distinguishing his amendment from ours, and with all due respect to the Senator from Alaska, I move to table his amendment, and I ask for the yeas and nays.
Mr. GRAVEL. Will the Senator withhold?
Mr. HART. I withhold.
Mr. GRAVEL. I will be moving to tablethe Senator's amendment. Everything he does to me, I am going to do to him. Let us get that straight.
The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient second.
The yeas and nays were ordered.
The PRESIDING OFFICER. The question is on the motion to table the amendment of the Senator from Alaska. On this question the yeas and nays have been ordered, and the clerk will call the roll.
The second assistant legislative clerk called the roll.
The result was announced — yeas 53, nays 43, as follows:
So the motion to lay on the table UP amendment No. 1726 was agreed to.