October 13, 1978
Page 36735
Mr. SARBANES. I yield myself an additional 3 minutes.
So those who have had concerns about the legislation, and who perceived earlier drafts of it as in some ways under-cutting or casting doubt on the important role of the private sector in our economy, I think should be greatly reassured by the legislation that is before us.
I have an additional strong objection to this amendment, because I think that in a very fundamental way it tends to render the Budget Committee irrelevant.
One of the major responsibilities we gave to the Budget Committee in the Budget Act was to focus on just this question. I submit to the Senate that if there is any committee of this body which has discharged its responsibilities in an effective way it is the Budget Committee, in terms of the process it has established over the past 4 years, in terms of the judgments it has made in exercising that process, and in terms of the discipline and the consistency that it has brought to Federal fiscal policy.
The Budget Committee is in the posture of receiving the recommendations from all of the authorizing committees, and the chairman of the Banking Committee knows as well as I do that we have on occasion sent to them authorizations which they were not prepared to accept fully in the budget resolution, because these authorizations went beyond what they thought was reasonable after they had balanced all of the requests received from all different directions.
They hold the vantage point for making those judgments. They have the recommendations of every authorizing committee with their respective judgments as to what should be done, and they then engage in the process of weighing these judgments, making determinations as to our economic conditions, what the level of Federal expenditures should be, projecting revenue levels, and giving us a budget that makes sense.
Until very recently we never had this in the Congress. We spent years here enacting 13 separate appropriation bills that have no relationship to one another and there was no requirement that Members make hard decisions on priorities, and build on the premise that if they were going to spend more on housing they could not spent as much on health or if they are going to spend more on—
The PRESIDING OFFICER. The Senator's 3 minutes have expired.
Mr. SARBANES. I yield myself additional time.
Of if they were going to spend more on defense they would not be able to do more for the environment, or for energy resources, or for something.
The Budget Committee has brought all of that together and they have that responsibility, and they have exercised it well. Most people do not appreciate that in the 4 years of their operation the Budget Committee in every one of the second concurrent resolutions has arrived at a figure less than the budget submitted by the President to Congress at the beginning of that year for the next fiscal year. I believe I am correct. If I could have his attention for a second, perhaps the chairman of the Budget Committee could respond to the point I am making? I believe, is it not correct, that in each of the 4 years since the Budget Committee began functioning under the Budget Act the second concurrent resolution setting the levels of Federal spending the committee has finally recommended to Congress and which we have adopted, has set a total level of Federal spending below the levels contained in the budgets submitted by the President or the executive branch at the beginning of the congressional consideration of the budget?
Mr. MUSKIE. I believe that to be true, yes.
Mr. SARBANES. I think that is an extraordinary accomplishment. I think it reflects the point that I have been trying to make about the skill with which the Budget Committee has been carrying out its responsibilities. I do not think we should place the committee in the rigid mold which this amendment would do by specifying a specific percentage share of GNP for public outlays. I have no quarrel with the objective of the lowest share when that meets our needs, our priorities, and our policies.
But to place the specific numbers in legislation is misleading: it may in fact be an inaccurate guide; under some circumstances it may be too high, rather than too low; and under other circumstances too low rather than too high. But the one thing it would insure is that if this amendment setting out specific figures is adopted, then the range of decision making open to the Budget Committee — in its deliberations; in receiving all the recommendations from the authorizing committee, including the committee of which the author of the amendment is the chairman; in making judgments on them dealing with the budget resolution — will have been very severely restricted.
The committee may in fact reach a decision that corresponds with or is even less than these figures, but we should not now bind the hands of the Budget Committee so that they do have the range of choice which I think is essential to them in carrying out their job, which they have been doing in an extraordinarily successful way.
Mr. MUSKIE. Mr. President, will the Senator yield?
Mr. SARBANES. I yield to the Senator.
Mr. MUSKIE. The argument may be made that these are simply goals established in the law, not self-enforcing. May I add there is nothing in the amendment that makes them reviewable either. These numbers are just put into the law, if we put them in in 1978, and it would take an amendment of the law to change them.
The argument is made that the Budget Committee can change them simply by issuing its budget resolution. What that puts us in the position of doing or what that would put us in the position of doing is to violate, not in any criminal sense, but violate a policy that is written into law, and no one likes to do that.
There are many, many circumstances, I am sure, that would suggest higher priorities in a given year than the priority suggested in this amendment. A recession, for example, which automatically makes outlays a higher percentage of GNP, because GNP drops, because Government outlays expand, because of the needs of unemployment and other needs such as a recession automatically sends the GNP share up. I think it reached a peak of 23 percent in the recent recession.
In addition, Congress must constantly consider new needs and priorities that may emerge.
National health insurance, for example, is very much in the public dialog at the moment. I do not think it is possible to consider putting national health insurance into place in this year's budget or next year's budget given the state of the budget.
But if Congress should decide, with the support of a President, that a program of national health insurance is indeed a high public priority, that would represent an enormous additional investment of public resources and affect this GNP share number.
If we are going to put a number into law, with an open understanding that it is not going to mean anything, that is one thing. But if we are going to put numbers in the law with the intent that they shall be a strong influence, if not a binding influence upon budgetary policy for the years into the future, then we may well exclude many such options that the public interest may require us to consider in 1980, 1981, 1982, 1983, or some year in the future.
Congress' function is to consider emerging public needs as well as those which we now serve.
So the GNP share to me is a tool, a budgetary tool. It is a useful budgetary tool. It is one we have tried to emphasize very heavily, we in the Budget Committee, to the Senate as we present our budgets. We have said explicitly that our objective is to reduce the GNP share of Federal outlays, pointing toward 19.9 percent in 1893, and that is our intent.
But our intent may well have to be modified if circumstances such as those two that I have mentioned should arise, and we ought not to put the Budget Committee in a defensive position when that happens.
If you put these numbers in the law, you should not at the same time say to us, "Well, disregard them when, in your judgment, you need to." If that is what you are doing, then why put the numbers in?
Mr. RIEGLE. Mr. President, will the Senator yield?
Mr. MUSKIE. If you want the numbers to be binding, then you really tie our hands in a way that might be against the public interest.
Mr. MOYNIHAN. Mr. President, will the Senator yield for just a quick observation?
Mr. MUSKIE. I yield.
Mr. MOYNIHAN. I spoke earlier, when the Senator was unable to be on the floor, about the growth of Federal outlays as a percentage of GNP over the last generation. There has been a very small growth: from about 18 percent in 1958, to about 22 percent today. In this period our true GNP has quintupled, and the American economy has been transformed from a basically blue collar, manufacturing economy to a white collar information economy. This is sometimes also called a service economy.
But it would be wrong to imagine that such a service economy, reflects a mere increase in consumption as against production. Rather, it reflects technological revolution and a change in the character of production — symbolized by the computer and the electric typewriter, if you will.
Finally, the industrial revolution came to office work, and office work grew in size and importance. This because it was economically desirable for office work to grow. General Motors may one day find itself with more white collar workers than blue collar workers, because it makes more money that way. GM may not have reached that point, but many other industrial companies have reached the same point.
What we call the public sector falls largely into what I am here defining as the service sector, and the service sector of the public sector has grown in parallel to the growth of the service sector in the private economy. When we talk about GNP, when we talk about unemployment, when we talk about inflation rates, what do we talk about except the product of economic services which Government provides to the Nation? Who tells us how many people are working, where they are working, what they are making, how much money they made last year, and how much they expect to make this year? Who tells us the level of our gross national product, who produces the highly technical amalgam of thousands of calculations done in the Department of Commerce, provided as a service to anybody who wants to use it, as a priceless asset in making estimates of whether you should make more cars next year or fewer cars next year, whether you should buy zinc, or sell gold? These are all services — but who would deny that they are economically productive? Of course, there is such a thing as an increase in the public sector which is not productive, and which represents consumption — even wasteful consumption.
But there are other aspects of the growth of the public sector which are integral to an expanding economy, and if we say we will not expand those services, then we are saying we will let the economy itself decline. Such cuts in Government expenditures would have just the opposite effect on levels of employment and the use of productive capacity that this bill is supposed to have. This is why I very much support the Senator's amendment.
But could I ask the Senator, who is so knowledgeable about these matters: Does he accept the point that the public sector, that Federal Government expenditures, increase out of the same causes that have brought about increases in the service sector of the private economy?
Mr. MUSKIE. That is correct. They are a reflection of the needs of our total economy. Now, to a certain extent— and this is what prompts this amendment, the Proxmire amendment — they also reflect Government waste.
Mr. MOYNIHAN. That is right.
Mr. MUSKIE. But they also may reflect private waste.
Mr. MOYNIHAN. But that requires you to discriminate between useful and non-useful information. But merely to say no more increase is foolish. For example, I was Assistant Secretary of Labor under President Kennedy when we doubled the size of the panel that produces the monthly report of our unemployment index. Did we spend more money? Yes. We doubled the public sector with respect to unemployment data; we got quadruple the information. Today nobody would dream of saying, "Go back to the old unreliable information that we used to get with a fourth of the present staff."
Mr. MUSKIE. The Senator makes a good point.
Mr. MOYNIHAN. I thank the Senator.
Mr. RIEGLE. Mr. President, will the Senator yield to me?
Mr. MUSKIE. I yield.
Mr. RIEGLE. I appreciate the Senator from Maine yielding. I want to associate myself with the thrust of his remarks and the remarks of the Senator from Maryland (Mr. SARBANES) and say not only does the Budget Committee have an opportunity year by year to exercise its responsibilities to weigh these questions and make judgments, but the Senate as a whole has an opportunity to act upon your recommendations, so there are really two steps to the process.
We rely on the specialists who are on the Budget Committee but, in turn, we all have an opportunity to be a part of ratifying or modifying in some way the judgments that you reach.
I think it is also important to point out the reason in the past why we have not set a fixed percentage is because we cannot see the future. The chairman of the Appropriations Committee, Senator MAGNUSON, said to me just a few moments ago that over the last 17 years, the percentage of GNP allocated to Federal spending has worked within a range of about 18 percent to something close to 23 percent, but that range has been a relatively constant range. But all kinds of different factors arise that have caused us to move back and forth within that range.
So to try to predict ahead of time where we need to be in that range for some future year really violates common sense. That is not the way we have behaved in the past, and I do not think that is the way we can behave now. There are just too many factors, and the way we are tied into the world scene, to the extent that we are, there are factors beyond our control like an oil embargo, a war breaking out in another part of the world that might not directly involve the United States but have an impact that no one can possibly begin to foresee even 2 months ahead of time, let alone 4 or 5 years ahead of time.
So I would hope we would retain for ourselves the right to make these adjustments, these decisions, year by year as we go along. It seems to me we are in a much stronger position if we do that.
Mr. MUSKIE. The Senator is exactly on point, and I am in total agreement with his analysis.
Mr. NELSON. We do not have anybody on this side who needs any more time. I may speak for 3 minutes at the end.
Mr. PROXMIRE. Why does not the Senator go ahead.
Mr. KENNEDY. Mr. President, will the Senator yield 2 or 3 minutes on the bill?
Mr. NELSON. We have time on the amendment.
The PRESIDING OFFICER. Fifteen minutes remain.
Mr. KENNEDY. Maybe 7 minutes.
Mr. NELSON. Make it eight.
Mr. KENNEDY. I thank the distinguished Senator.
The PRESIDING OFFICER. The Senator from Massachusetts.
Mr. KENNEDY. Mr. President, I rise at this time in full support of the legislation which is before us. I support the legislation and the Muskie amendment to modify the Federal share of GNP goal.
Mr. President, all of us in. this body know that Senator Hubert Humphrey was a forward-looking, forward-thinking, visionary man. I think he understood one of the most basic and fundamental tenets of our democratic society: that we need a sound economy for the great range of programs which concerned him so deeply; that we were not going to be able to look after the needs of the elderly, or to educate the young, or to provide decent health for the people of this Nation, or to have the type of national security which this country requires; that we could not extend the arm of friendship and humanitarian concern abroad, or exert leadership to the world, unless we are going to have a sound economy.
He brought to bear his full energies in focusing on the importance of bringing together the monetary and fiscal policy of this Nation, and recognized, as a skilled legislator, the extraordinary importance and impact on the economy of the role of the legislature.
Those of us who had the good fortune of serving with and listening to Senator Humphrey on the Joint Economic Committee, as he chaired those hearings day after day, and wrestled with the macroeconomic issues know how deeply he cared about and thought about the thrust of this type of legislation. He knew how we had to exert discipline, so that the executive branch together with the Federal Reserve, and the mechanism which has been selected by Congress, the budget process, could insure that we were going to create a wide range of economic options for the people of this Nation; and that at the top of his priorities were the issue of jobs and the issue of inflation.
I understand that it was not just what happened in a local community that determined whether a factory would close or expand, that it was not going to just be private or State action that would make the decision, as important as private and State action are but that Federal economic policy that would mean the difference between whether people were actually going to be employed or unemployed in so many sectors of our economy; and to make that difference would require the kind of foresight and discipline that this legislation requires and the kind of goals that it sets.
I think that the development of this legislation was the incarnation of Senator Humphrey's leadership and concern about these issues.
I had the good fortune to be a sponsor of this legislation when it was initially introduced, and have closely followed its progress in our Human Resources Committee. I welcome the opportunity for the Senate to address itself to this legislation. I think it is a matter of considerable importance, and all of us are mindful, I think, that the extraordinary service of Senator Humphrey to this body and to this Nation in so many different areas has continued and will continue through successful implementation of this legislation.
So I welcome the opportunity to be one of those who support this legislation, and I believe deeply in it. We can reach the goals that have been set for us. In the early part of the 1960's, when we saw a reduction from about 7.1 percent unemployment to some 3.5 percent unemployment, with virtual price stability at one point a 2-percent average increase in the Consumer Price Index for some 4 years. We can have economic growth, full employment, and price stability; and I think our best prospect of achieving these goals will be through the implementation of this legislation. I think this is a sound program, and I add my voice in support of it.
Finally, Mr. President, I want to underscore what the Senator from Maine has said mentioned on the issue of the relationship between the Federal share of the GNP and our other goals.
The PRESIDING OFFICER (Mr.CHILES) . The Senator's 8 minutes have expired.
Mr. KENNEDY. One more minute.
Mr. NELSON. I yield the Senator 1 minute.
Mr. KENNEDY. We discussed and debated this measure at some length the other evening, when none of the amendments were before us. I think we are interested in permitting Congress to exercise its full responsibility for the development of our economy and meeting all our other national goals. We cannot preclude the flexibility which is essential to meeting all our responsibilities and in fulfilling the constitutional process. This body has the responsibility to redouble our efforts if unemployment should begin to ascend; we have a responsibility in a broad range of social and economic areas which we must be able to meet if necessary — Congress cannot tie its hands for the future, it must be sensitive to ongoing developments as it chooses, each year, the mix of programs and policies which make our people strong and our Nation strong.
Mr. President, a more formal statement follows and I ask that it be printed immediately following these remarks.
There being no objection, the speech was ordered to be printed in the RECORD, as follows:
STATEMENT BY SENATOR KENNEDY
The full employment and balanced growth act has come to the Senate in its own right. Now, for the sake of our economy and for the sake of our workers, we must enact it. I strongly urge my colleagues to adopt the Humphrey-Hawkins Act.
The Humphrey-Hawkins Act is not a magic cure-all, nor was it ever intended to be. But it is an act which provides the framework within which this country can provide jobs to those who need them, lower the deficit and hold the line against inflation. We are putting some direction in our economic policy, establishing goals for it and establishing a procedure by which we can measure how well we are achieving those goals. We are taking account in a cohesive, explicit way of the fact that the Federal Government is a major factor in the economic arena. It has the responsibility to direct its policies to meeting the need for a strong economy, one which keeps our people at work. This must be the aim of the President, it must be the aim of the Federal Reserve Board and it must be the aim of Congress.
Mr. President, the number one issue in the land — the first priority on the agenda of economic justice — is providing jobs for American workers. We are a great nation and much of the greatness has been due to the sacrifices, the struggles and the courage of our working men and women. If we are to turn this nation back on its historic path, we must provide every American with the will to work an opportunity to work.
For full employment is the key to achieving so many of our goals. It is, of course, an end in itself, for it is the luck and genius of this country that people want to work and would prefer working to getting a dole. Full employment is the key to a better economy: for we then reap the bounty of productive hands and minds. And full employment saves us the billions of dollars that we otherwise disgorge on welfare and unemployment compensation and gain for us the billions which otherwise never materialize because of lowered tax revenues.
Does the floor manager of the bill wish to pick up his time?
Mr. NELSON. Did the Senator want more time?
Mr. MUSKIE. No, I do not need more time. At the appropriate time I will have an amendment subsequently to offer. I am not quite ready.
Mr. NELSON. Does the distinguished Senator from Wisconsin wish to speak further?
Mr. PROXMIRE. May I say to my colleague that I do have more. I understand the Senator from Maine has an amendment to offer that he cannot offer until all time has expired on this amendment. So I would like to wind up if I could. If the Senator from Wisconsin, my colleague from Wisconsin, has other re-quests for time, I will wait. I do not have any request so far as I know at the moment.
Mr. NELSON. There are no pending requests with me for time. Has the distinguished Senator from Maine used all the time he desires on this amendment, the pending amendment?
Mr. MUSKIE. Yes, indeed. I have 30 minutes that I do not expect to use anyway on my amendment, so I do not need any more time at this point.