September 12, 1978
Page 28893
Mr. RIBICOFF Mr. President, for almost a year and a half the effort to formulate a comprehensive national energy policy has dominated the Congress and public affairs more than any single domestic issue. The enactment of a broad-based national energy program has been a top legislative priority throughout the 95th Congress. This goal has yet to be achieved.
Today we continue to debate a key element of the President's energy proposal, the natural gas compromise. The world is watching and waiting to see how we act on this controversial measure. Our trading partners in Western Europe and Japan are anxious to know whether we have the will and ability to deal with our energy challenges in an affirmative manner. Americans throughout the country look to us to take meaningful steps to curb and reverse the inflationary spiral which has been fueled by our indecision on an energy policy.
As consideration of the natural gas conference report begins, I want to share with my colleagues the article by Senator MUSKIE which appears in this morning's Washington Post. In a most cogent and well-reasoned fashion, the distinguished chairman of the Senate Budget Committee outlines the major issues involved in the natural gas debate. Senator MUSKIE focuses on the impact this legislation will have in restoring world confidence in the value of the dollar and its impact in controlling inflation at home. I believe Senator MUSKIE's article very successfully sums up why the natural gas compromise warrants our support and I commend it to my colleagues' attention. I ask that the article be inserted in the RECORD.
The article follows:
(From the Washington Post, Sept. 11, 1978]
NATURAL GAS COMPROMISE: THE COST OF DELAY
(By Edmund S. Muskie)
Two things are certain about the natural gas compromise. First, it is nowhere near so bad as the opponents claim. Second, if the Senate does not approve it, the consequences are likely to be much worse than learning to live with the new policy.
The country is so evenly split between energy-importing states and energy exporters that finding a satisfactory compromise is almost impossible. But compromise we must. In the 16 months the Senate has wrestled with the price of gas, we have been playing economic roulette. We are losing.
Very little else is certain about the bill or its consequences, although "facts" are abundant. No one really knows what will happen to energy prices and supplies if we pass the bill, or even if we defeat it.
But the compromise is infinitely preferable to doing nothing at all. The bill will bring some desperately needed certainty to the question of natural gas prices. People who were laid off or cold the last two winters cannot be enthusiastic about the present policy. Neither should the Senate be.
And the present uncertainty clearly affects business decisions as well as the average family's budgeting. Here at home this "confidence factor" is difficult to measure. But internationally we do have a yardstick: the value of the dollar.
The dollar's value on the international market is in one sense almost purely a measure of the confidence the international community has in the dollar's long term value. That judgment is based on perceptions of American economic policy. Since the natural gas debate began, the dollar has lost10 percent of its value against all other currencies. Against stronger currencies like the West German mark and Japanese yen, the dollar's value has plummeted by as much as 30 percent.
The overall 10 percent decline has increased inflation here at home by about 1 percent. That means American consumers are already in the process of losing $15 billion to $20 billion in purchasing power in a single year — more than the natural gas bill would cost in seven years.
There is abundant evidence that the lack of an energy policy is a prime cause, along with inflation, of the dollar's decline. The dollar has dropped 4 percent in value since the August summit on energy. The international community is less concerned with present policy than it is with the long term trend. The international community must be convinced that America is indeed committed to an energy policy and to controlling inflation. If it remains unconvinced, it will continue to bet against the dollar. We must begin to prove the international community wrong.
If we do not, we face at least the possibility of more inflation, more restrictive interest rates and slower economic growth; an increase in the price of foreign oil; and growing demands from our allies for a voice in America's economic policy.
And the consequences could be much worse.
The bill itself is a moderate attempt to bridge the yawning gulf that has separated the House and Senate on the question.
Predictions are impossible in a highly complex and uncertain field. But from the information we do have, coupled with an independent review by the Congressional Budget Office, we can say this much about the natural gas compromise:
1. It will allow prices to rise gradually enough to avoid serious consequences to our economy. CBO estimates that by 1985 the price of gas will be 5 to 8 percent higher under the bill than under current policy. With the gross national product approaching $4 trillion by then, the inflationary effect of that increase would be negligible.
The price increase will not be trifling to the individual consumer, but even by 1985 hewill still be paying less for natural gas than he would pay for alternative fuels such as heating oil and electricity. In addition, the bill throws the bulk of the new cost on industrial users.
2. Supplies will increase and the supply will be more stable. The distinction between gas produced and consumed in a single state and gas on the interstate market will be abolished. There should be enough gas to avoid curtailments and allow increased residential use. Industrial users will be encouraged to switch to alternative fuels.
3. Finding a "quick fix" to replace the bill is impossible. If the question were easy we would have answered it by now. Congress is not being dilatory. Energy is the most difficult political, economic and social question to come before the Congress in our lifetime. The natural gas compromise may not be perfect, but I am not so foolish as to think that given time much improvement could be made in it.
So I will vote for the natural gas compromise. It is not perfect. It will not entirely satisfy anyone. It is by no means the last word on energy policy. But the consequences of our remaining mute are already costing us dearly.