October 13, 1978
Page 36742
The PRESIDING OFFICER. The time of the Senator has expired.
Mr. NELSON. I yield myself 1 additional minute.
Whereas you would have had your victory on this point, you have destroyed the whole bill and our chance. That is why I am pleading with the rest, at least: Do not vote for this modification, as important as you believe it to be.
I do not denigrate in any way the importance of the issue. I repeat that nobody has done more in this issue than has Senator PROXMIRE — on balanced budgets and inflation — and I am not critical of his efforts. I am making a political assertion on a political issue that is very delicate. This is the issue I am talking to, not the merits on both sides.
Senator MUSKIE and Senator PROXMIRE have studied this issue in greater depth than I have. I do not feel qualified to discuss it with any authority, but I feel I have some qualification because I have been involved in the Humphrey-Hawkins legislation for the past 3 or 4 years. I have conducted hearings on it and have discussed it. I feel that I have some qualification for making a judgment on what the political situation is, and I think this Federal spending amendment is a very dangerous modification to make.
Mr. President, has all time expired?
The PRESIDING OFFICER. The time has expired on the amendment.
Mr. BELLMON. Mr. President, this amendment is similar to a provision of the coalition amendment to the Finance Committee tax bill H.R. 13511, passed overwhelmingly only 2 days ago. In fact, both the House and Senate have given 2-to-1 mandates for such a provision. Despite the fact that this provision is somewhat weaker than the restraint imposed in the coalition amendment — for example a 19.5 percent ratio of expenditure to GNP in 1983 rather than the 20 percent in this amendment — I believe it is a necessary and proper addition to this bill.
The Congress, reflecting the demands of the voters, has indicated its insistence upon a reduced Federal sector. The second budget resolution in its 5-year projections this year provides a 1983 proportion of expenditures to GNP of 19.9 percent. It is a feasible and responsible goal. In 1958 the proportion was 18.7 percent, in 1968 21.5 percent. and 23.2 percent in 1978. The budget resolution this Congress has adopted promises a reduction to 21.5 percent in 1979 — so the direction is proper. We have found in our budget process that planning especially long-range planning, is the key to a well-functioning budget process; 20 percent is only a return to the average proportion of the last decade. It is not a radical goal or idle wishful thinking.
The amendment to the tax bill which the coalition introduced would:
First. Hold outlays to no more than a 1-percentage point rate of growth above the Nation's rate of inflation;
Second. Reduce the relative size of the Federal sector to 19.5 percent in successive steps by 1983 from its present 21.5-percent level, and
Third. Provide a balanced budget by fiscal year 1982.
Thus, Mr. President, I am not only concerned about the share of Federal Government spending in GNP, but also bringing the budget into balance. Nevertheless, I am told by economists that inflation alone could balance the budget by shoving taxpayers into higher and higher tax brackets. Balance could be at 20, 25, 30, or even 50 percent of GNP — depending upon the rate of inflation. I feel strongly, Mr. President, that balance at the cost of an increased Federal sector is not what Congress or the American people want.
When I was Governor of Oklahoma, we, like many other States, passed a law requiring our budget — except for capital improvement items — to be balanced each year. It worked. I came to Washington 10 years ago hopeful that we could do the same here. I was, and still am, convinced that constant yearly deficits erode fiscal discipline and promise inefficient and inflationary Government activities. Similarly, they force the Federal Reserve System into the dilemma of having to expand the Nation's money supply with its inflationary consequences.
The budget has been balanced only twice in the last 20 years — 1960 and 1969.Cumulative deficits total $311.7 billion over that time period while surpluses amount to only $3.5 billion. Whether or not the deficit was needed on a yearly basis at the time, it is inflationary for the Treasury and Federal Reserve to have to refinance such staggering amounts of debt.
Mr. President, I would point out that the converse of a growing Federal sector is a shrinking private sector. In these times when inflationary pressures are rampant and when more and more knowledgeable people are pointing their fingers at the Federal sector as a prime culprit, it impels us to send a clear message to the American people that we are working to expand the private sector.
UP AMENDMENT NO. 2103
(Purpose: To establish the appropriate share of an expanding gross national product accounted for by Federal outlays)
Mr. MUSKIE. Mr. President, I call up my amendment, on behalf of myself, Mr. NELSON, Mr. JAVITS, and others.
The PRESIDING OFFICER. The amendment will be stated.
The legislative clerk read as follows:
The Senator from Maine (Mr. MUSKIE) for himself, Mr. NELSON, Mr. JAVITS, and others, proposes an unprinted amendment numbered 2103.
Mr. MUSKIE. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
In lieu of the matter proposed to be inserted on page 116A, insert at the appropriate point the following new subsection:
"(j) The Congress further declares that it is the purpose of the Full Employment and Balanced Growth Act of 1978 to rely principally on the private sector for expansion of economic activity and creation of new jobs for a growing labor force. Toward this end, it is the purpose of this Act to encourage the adoption of fiscal policies that would establish the share of the gross national product accounted for by Federal outlays at the lowest level consistent with national needs and priorities.".
In lieu of the matter proposed to be inserted on page 118 insert: "fiscal policies that would establish the share of an expanding gross national product accounted for by Federal outlays at the lowest level consistent with national needs and priorities, and strike all the remaining language."
Mr. MUSKIE. Mr. President, for the past few days, I have had to live on the floor, listening to Senator after Senator complaining about the rigidities of the budget process. Some of those arguments have been very emotional, very vigorous, to the point that I wondered whether or not the budget process could survive if the Senate were asked to vote today on its discontinuance.
Yet, here we are, considering proposals to fix public policy in place which will limit the options which the Budget Committee can consider for presentation to the Senate.
The Budget Committee does consider itself bound by law, if that law means anything.
I have listened with a great deal of interest to the colloquy between Senator PROXMIRE and Senator PERCY. In effect, they have tried, by colloquy, to amend the Proxmire amendment to a meaningless piece of rhetoric. If all the questions raised by the Senator from Illinois with the Senator from Wisconsin are indeed an accurate interpretation of the Proxmire language, then, in effect, the Proxmire language does not mean anything more than I think it should mean — a pious wish.
I said earlier this afternoon that either those numbers in the Proxmire amendment mean something or they do not. If they mean something, they can limit our options severely at a time when we might regard those limitations with great regret. If they are meaningless — if all those options are open to us, whatever those numbers — then why do we need it?
We have the same numbers in the report of the Senate Budget Committee this year, and I ask unanimous consent that the table on page 27 of the Senate Budget Committee report be printed at this point in the Record.
There being no objection, the table was ordered to be printed in the RECORD, as follows:
[Table omitted]
Mr. MUSKIE. Mr. President, those numbers are better than the Proxmire numbers, and they represent a commitment by the Budget Committee. But they are based on the assumption that moderate expansion will continue without break through 1983, and that there will be a resurgence in the private sector beyond what is now evident in those later years. The Proxmire amendment makes no such qualifications. This is the path we intend to follow, if economic circumstances permit. If they do not, then the budget process gives us the flexibility to respond to the changes and circumstances.
If the Proxmire amendment means what it does by those numbers, it deprives us of that flexibility. If it does not, as a result of the colloquy between the Senator from Illinois and the Senator from Wisconsin, we do not need it. It is as simple as that.
My amendment reads very simply. It says this:
The Congress further declares that it is the purpose of the Full Employment and Balanced Growth Act of 1978 to rely principally on the private sector for expansion of economic activity and creation of new jobs for a growing labor force. Toward this end, it is the purpose of this Act to encourage the adoption of fiscal policies that would establish the share of the gross national product accounted for by Federal outlays at the lowest level consistent with national needs and priorities.
Mr. President, I submit that the Budget Committee has followed that kind of policy from the beginning. In our first year, at the bottom of the recession, outlays as a share of gross national product were 22.4 percent, if one did not include the off budget agencies, and 23 percent, if one included off-budget agencies, of which the biggest is the Federal Financing Bank, which is under the jurisdiction of the committee chaired by the Senator from Wisconsin.
His amendment does not tell us whether his numbers include the Federal Financing Bank or not. But in any case, from a high of 22.4 percent we have steadily reduced the outlay share of GNP until in fiscal 1978 it is 22 percent, in the fiscal 1979 budget it will be 21.6 percent, and I have already put in the record our target for 1983 of 19.9 percent. That would mean a reduction from 22.4 percent in fiscal 1975 to 19.9 percent in fiscal 1983.
Surely, that record that we have been writing and that commitment we have been making is as solid an assurance as this Senate can give on the economic future of the country in the next 5 years, without the Proxmire amendment and especially if the Proxmire amendment admits of the kind of flexibility that he assured Senator PERCY and admitted of. I read the Proxmire amendment, and I do not see any such kind of flexibility. Now he can argue that there is no enforcement mechanism and that is true, except that as chairman of the Budget Committee when something is written into law that seems definite the enforcement mechanism is my conscience.
He admits of no flexibility there. He admits to no flexibility to the President. There is no review mechanism there. There is no authority for the President to change those numbers. Those numbers are in the amendment with now the one flexibility that he has written in with respect to meeting the unemployment goal of the Humphrey-Hawkins bill.
So, Mr. President, I submit my amendment, as chairman of the Budget Committee, with our record of commitment to precisely the goals of the Proxmire amendment, but with the advantage that the Budget Committee and the Senate as a whole by adopting this substitute has the flexibility to meet that great range of unanticipated exigencies, emergencies, and needs that the government of a country and an economy as complex as ours has. To try to write a 5-year economic plan for this economy into fixed law, either it is fixed or not am not sure what Senator PROXMIRE intends at this point — but in a fixed law, and that is what those numbers look like to me,. makes no common sense at all especially when we have a process in place that clearly on the record is moving us toward the same objective, the same goals, with the added advantage of flexibility to change course when the national interest requires that we change course.
Mr. ROBERT C. BYRD. Mr. President, will the Senator yield?
Mr. MUSKIE. I yield to the majority leader.
Mr. ROBERT C. BYRD. I thank the distinguished Senator from Maine.
ORDER FOR RETURN OF PAPERS ON H.R. 12929
Mr. ROBERT C. BYRD. Mr. President, I ask unanimous consent that the Secretary of the Senate be authorized to request the House of Representatives to return the papers on H.R. 12929.
The PRESIDING OFFICER. Without objection, it is so ordered.
FULL EMPLOYMENT AND BALANCED GROWTH ACT OF 1978
The Senate continued with the consideration of H.R. 50.
Mr. MUSKIE. Mr. President, I reserve the remainder of my time.
Mr. PROXMIRE. Mr. President, will the Senator from New York yield?
Mr JAVITS. We yield time in opposition to the Senator from Wisconsin.
Mr. PROXMIRE. Mr. President, I thank my good friend from New York. Mr. President, obviously a vote for the Muskie amendment is a vote against the amendment that I have put up. It is a vote for providing a specific goal for inducing a goal that we point out is moderate, limited, and well within what the President and Budget Committee both indicated we can do by 1981 and 1983.
Furthermore, it is a vote against a specific limit on spending that means anything.
Read the language of the Muskie amendment. The first sentence is exactly the same and puts the emphasis on that the same as it was in my amendment. After that it says:
Toward this end, it is the purpose of this Act to encourage the adoption of fiscal policies that would establish the share of the gross national product accounted for by Federal outlays at the lowest level consistent with national needs and priorities.
That is nice. We all would like to do that. We have been saying that for years. We have been saying it in the Chamber. The Presidents say that all the time. But it does not mean anything unless there is a specific goal one can measure it against. I do not mean a region.
Mr. MUSKIE. Mr. President, will the Senator yield on my time?
Mr. PROXMIRE. I yield on the Senator's time.
Mr. MUSKIE. It is backed by more than that. It is backed by our 4 years of budget process that laid out these goals and stuck to them.
Mr. PROXMIRE. All right.
Mr. MUSKIE. And stuck to them. That is the record and the support behind the language I have introduced.
Mr. PROXMIRE. Now, Mr. President, I wish to come to that.
This reminds me of the old story about the boxer who is getting clubbed all around the ring. He is bloody, bowed, and knocked down four or five times and staggers to his corner and his manager says:
"He didn't lay a glove on you." And the boxer turns to the manager and said "Keep an eye on the referee because somebody is beating the dickens out of me."
I tell that story because look what happened. The Budget Committee has done a good job under all the circumstances. As I said over and over again, I have great admiration for them. But up until 1975 when we authorized the Budget Committee spending in any peacetime year had not been above 20.5 percent and most of the time it was well below that.
Since then, in 1965 it was 22.4 percent; in 1976, 22.5 percent; and in 1977, it went down a little bit to 21.9 percent; and in 1978 it was 22.6 percent.
Of course, this year we do not know as yet but it is roughly the same level. I say that unless we do something specific and definite, unless we set standards against which we can measure their performance, we can always say we are fiscally responsible, we are trying to hold down spending and we aim to hold down spending and are going to try our best to do it. Unless one measures it some way, unless one has a standard against which he can say the President and Congress is not doing a good job or is doing a good job, it simply will not mean very much.
Mr. President, under those circumstances, I do hope Senators will recognize what they are doing when they vote on the Muskie amendment. They are voting in favor of providing a goal for unemployment, a goal for inflation, but the one area over which we really have control, Federal outlays, the one area which is our responsibility, not the responsibility of the economy as a whole or what happens over in Europe or what happens with respect to oil or what happens with climbing food prices, but our responsibility, the Federal outlays, they say:
No, we cannot do it. No, we cannot do it. We cannot accept that because it is too rigid.
Mr. President, if there is any area where we should set goals and where those goals will be effective, where they will be useful, where we can measure our performance against the standard we have set, it is in this area.
Mr. President, I reserve the remainder of my time.
Mr. MUSKIE. Mr. President, I wish to take note on this occasion that if my information is correct, Senator PROXMIRE's vote on my amendment will be his 6,000th consecutive vote, which means 12 years without missing a vote. I think that is a remarkable record. It is too bad that his 6,000th vote is going to be the wrong one. [Laughter.]
But, nevertheless, I had not realized that his record had climbed to such astronomical proportions.
I would say this in tribute to him, that every one of those 6,000 votes has been a reflection of his own intellectual ability, his commitment to the public interest, and his own conscience. I cannot remember a Senator who has been more conscientious not only to meeting the schedule of the Senate but also to the issues which confront him.
I could not resist using my amendment as a chance to congratulate him on that.
Mr. DOLE. Mr. President, will the Senator yield?
Mr. MUSKIE. I yield.
Mr. DOLE. I think it would be a tragedy if he did not win the 6,000th vote.
Mr. PROXMIRE. I cannot thank the Senator enough. What the Senator from Maine could really do if he really means, and I am sure he means the affection, to show his affection is to vote against his own amendment. That would be marvelous and he would show he really recognizes the 6,000 consecutive vote.
Incidentally, I beat the record of his distinguished former colleague, Margaret Chase Smith, and so there is a Maine element in here, too. But let us really put the icing on the cake.
Mr. MUSKIE. The real trouble is I do not want to break my record of never having been wrong.
Mr. SARBANES. Mr. President, will the Senator yield?
Mr. MUSKIE. I yield.
Mr. SARBANES. think it is very important in view of the colloquy that has just taken place that on the next vote the Senator from Wisconsin lose, because we would then prove that we have the ability in the Senate to separate the substance of an issue on which we may disagree very strongly from the profound respect which we have for a particular individual and for his role in this body. Therefore, the best way to prove in this instance the enormous affection and respect we have for the Senator from Wisconsin and this incredible 6,000-vote record, is to defeat him on the amendment and demonstrate our affection and respect for him as an individual. We would not want anyone to think that our judgment on the substance of this amendment was influenced by our ability to respect one of our colleagues as an individual.
Mr. NELSON. Mr. President, on that very thoughtful note, I am prepared to yield back the remainder of my time.
The PRESIDING OFFICER. Is all time yielded back?
Mr. PROXMIRE. I yield back my time. I ask for the yeas and nays.
The PRESIDING OFFICER. All time is yielded back. Is there a sufficient second? There is a sufficient second.
The yeas and nays were ordered.
The result was announced—yeas 56, nays 34, as follows:
[Roll call vote tally omitted]