September 6, 1978
Page 28014
Mr. MUSKIE. Mr. President, the Senator from Maine thinks this exercise is becoming a semiannual one between the distinguished Senator from Virginia and myself. First of all, let me address the percentage figures that the Senator has yielded. The increase in budget authority from 1978 to 1979 was $9.6 to $12.6 billion, which is $3 billion. Percentagewise, that is a large increase. Curiously, the bulk of that increase is related to a mandate of the Budget Act: To put proposed spending on budget where it can be controlled by the appropriations process.
The major part of that $3 billion increase is $1.8 billion for the Witteveen Facility to support countries having balance-of-payments problems related to costs of energy and energy imports. It is a facility which we agreed to create with other industrialized countries and with the OPEC countries. At the time, it was pretty widely hailed as a reasonable and wise reaction to the balance-of-payments problems generated for relatively small countries, particularly, who are in no position to fund the increases in energy costs. The struggle all year long has been between those in the administration who would prefer to have this facility off- budget and thus outside the control of the appropriations process, rather than on budget and subject to the appropriations process; and those of us who are responsible for administering the budget process in Congress.
We were determined that this Witteveen Facility would go on budget and, being on budget, it adds to the total by the amount that the Senator from Virginia finds unacceptable.
We cannot have it both ways: Enforce the budget process in accordance wish its explicit terms and thus reveal the amount of money that is involved in the budget; or ignore the budget process and let the administration have its way by going off budget and creating another one of those problems that we have all come to find distasteful. If you take the $1.8 billion out of the three, that leaves $1.2 billion, which is roughly a 12-percent increase.
Mr. President, may I suggest the absence of a quorum?
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. MUSKIE. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MUSKIE. Mr. President, I am happy to yield to my good friend from Oklahoma.
Mr. BARTLETT. I thank my distinguished friend from Maine.
Mr. President, I ask unanimous consent that Mike Roush of my staff be granted privilege of the floor during voting and the consideration of this measure.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BUMPERS. Will the Senator yield?
I hate to break the continuity of this, but I need to go to another place and I have three questions to ask, if I may.
Mr. MUSKIE. I am happy to yield. I am awaiting some further information. In any case, it will be a respite and I yield to the Senator.
Mr. BUMPERS. Fine.
In looking over the information, the summary of the second budget resolution I find on my desk, I see that the Budget Committee has in the second concurrent budget resolution projected now a deficit of $42.3 billion, or 30 percent less than the President's original estimate, which I believe was $60 billion.
Is that correct?
Mr. MUSKIE. That is correct.
Mr. BUMPERS. The committee has also taken into consideration, in arriving at the $42 billion deficit, a $23.4 billion tax cut?
Mr. MUSKIE. The Senator is correct. That includes continuation of the temporary tax cut, to continue each year now for 3 or 4 years, $8.2 billion.
Mr. BUMPERS. In addition, this is a $23-some billion cut in addition to the temporary tax cut?
Mr. MUSKIE. No. It includes the $8.2billion.
Mr. BUMPERS. Very well. My question is, if we left the present temporary tax cut in effect and did nothing toward enacting the House bill, for example, that figure would be roughly $15 billion in savings.
Is that correct?
Mr. MUSKIE. Fourteen billion dollars plus $1.2 billion in structural tax changes that we anticipate.
Mr. BUMPERS. Right.
Mr. MUSKIE. For a total of $15.2 billion.
Mr. BUMPERS. So if we left everything status quo, and I realize there is some variation, because economic activity might be reduced or stimulated, one way or the other, but, just on the face of it, if we did not pass the tax proposal the House already passed and we did nothing except leave the present temporary tax cut in effect, we could trim another, roughly, $15 billion off the $42.3 billion.
Is that correct?
Mr. MUSKIE. It would be something below that. I will try to get the figure.
The net gain, may I say to the Senator, would be on the order of $11 to $12 billion.
Mr. BUMPERS. Is that because of the reduction in economic activity as a result of not enacting the tax cut?
Mr. MUSKIE. The Senator is correct.
Mr. BUMPERS. That is very good, because that answers the question.
Finally, I take it that the present resolution has not taken into consideration the possible sustaining of the President's cut of $1.9 billion for the aircraft carrier?
Mr. MUSKIE. The President vetoed the authorization bill. The aircraft carrier, as I understand it, is included in the Defense Subcommittee's markup of the defense appropriation bill, which has not yet been reported in the Senate. The subcommittee's recommendation does not violate either the targets set in the first budget resolution or the ceilings established in the second budget resolution. That, of course, raises some of the issues the President used as reasons for vetoing the authorization bill. In other words, the carrier was funded, or is proposed to be funded, by the Appropriations Committee.
Mr. BUMPERS. In the authorization?
Mr. MUSKIE. As a substitute for other defense expenditures in the appropriation request that the President thinks are more clearly related to our present defense requirements than the carrier.
The defense appropriations bill that the Appropriations Committee is considering will implement many of the items in the authorization bill. It will be within the budget, even though it includes funding for the nuclear carrier.
I want the Senator to understand that the full amount of budget authority for the carrier would be in this year's budget, but that first year outlays associated with the budget authority would be minimal.
Mr. BUMPERS. The budget authority was $1.9 billion. I suppose the appropriation will probably be $300 million to $400 million, I am not sure, in fiscal year1979.
In any event, the Budget Committee has taken into consideration the authorization which, as the Senator says, did not violate the first concurrent resolution.
Mr. MUSKIE. The Senator is correct.
Mr. BUMPERS. I thank the Senator very much.
Mr. MUSKIE. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. MUSKIE. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MUSKIE. Mr. President let me make these further observations with respect to the Byrd amendment.
In the first place, the second budget resolution as reported by the Budget Committee already has cut $200 million from the level of the first budget resolution.
The second point I would make is that the second budget resolution actually cuts $1 billion from the President's request for foreign economic assistance and financial programs.
Third, the amount in the resolution is, roughly, the amount already appropriated by the House of Representatives. It represents only a slight increase.
Further reductions in these programs would threaten to end effective U.S. participation in multilateral development banks which we have come to encourage in recent years as a wise substitute for unilateral aid, whenever possible. These banks generate $3 from other donor countries for every $1 provided by the United States.
Now, with respect to the $3 billion increase to which the Byrd amendment addresses itself, let me give the Senate the details of that $3 billion.
One billion eight hundred million dollars is for the Witteveen Facility, which I have already explained, and the Senate has spoken on that explicitly with respect to approving on-budget rather than off-budget treatment of that facility.
Six hundred million dollars is for the foreign military sales trust fund, reflecting increased sales to Saudi Arabia, Iran, and other countries.
Four hundred million is both for partial funding of our arrearages in multilateral banks out of a total of $800 million in arrearages which we now owe, and for real growth in our bilateral aid programs. Two hundred million dollars is for inflation and pay raises.
Those are the details, Mr. President, of the amounts that the Byrd amendment would strike from this function. I think it would represent a serious blow to the Witteveen Facility and the concept of on-budget treatment.
The foreign military sales program has been of great importance to us in maintaining our presence and influence in the Middle East with countries such as Iran and Saudi Arabia.
The arrearages which we owe the multilateral banks have been the subject of extensive discussion in the past on this floor between the distinguished Senator from Virginia and myself, and I do not think that subject needs further amplification at this point.
The other two items are not as large, but they are equally important.
That is the sum and substance of it, Mr. President. There has been an effort, as I emphasized to the committee, to cut this function below the President's request, below the first concurrent resolution, and I think the Budget Committee was satisfied with the figures finally approved.
So I urge the rejection of the Byrd amendment.
Mr. HARRY F. BYRD, JR. I yield myself 5 minutes.
First, Mr. President, the Senator from West Virginia (Mr. RANDOLPH) has requested that his name be added as a cosponsor of the pending amendment, and I ask unanimous consent that that be done.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. HARRY F. BYRD, JR. Mr. President, I think what the Senate needs to decide is whether it is wise to increase foreign aid spending by $3 billion. There are many Senators, of course, who think it is wise. The Senator from Virginia happens to disagree. I do not believe that it is reasonable at this time, when our Nation as a whole is being asked to respond affirmatively to measures designed to hold down inflation, that Congress should increase foreign aid spending by $3 billion. I point out that the total foreign aid spending under the concurrent resolution will be $12.6 billion.
In regard to the Witteveen Facility, that is a new program. It is not now in effect. It is an entirely new program. It has been neither off budget or on budget. It is an additional, new program costing $1.8 billion, and that is piled on top of all the other foreign aid programs.
Another point needs to be emphasized, Mr. President: There is in the pipeline now, available to the President, an unobligated balance of $11.3 billion for foreign economic aid. This concurrent resolution would provide for an additional $12.6 billion. The amendment now before the Senate would seek to reduce this substantial increase by $2.4 billion. I think it is reasonable and is something that the American people would feel is reasonable.
How are we ever going to get Government spending under control if in this year of 1978, this year of high inflation, we adopt a budget resolution in the Senate providing for a 31-percent increase in foreign aid?
Mr. SCOTT. Mr. President, will the Senator yield?
Mr. HARRY F. BYRD, JR. I am delighted to yield to my colleague from Virginia.
Mr. SCOTT. Mr. President, I appreciate the Senator yielding, and I associate myself with the remarks my distinguished colleague from Virginia has made.
It is often said with respect to foreign aid that the recipients of Federal funds have no constituency. Oftentimes, we vote on matters in which the people we represent have a direct interest, but that is not true of foreign aid.
I have taken polls during the 12 years I have been in Congress to see how the people of Virginia felt with regard to foreign aid. I posed the question whether they felt that foreign economic aid should be eliminated or reduced. In each instance, 90 percent or more have indicated that they felt that the foreign aid either should be eliminated or reduced.
So I think the distinguished Senator is representing the will of the people of Virginia and, in my judgment, the will of the people of the entire Nation, with the amendment he has offered.
We know about proposition 13. People want to pay less taxes. How do you pay less taxes unless you reduce spending? If you are going to increase spending and not increase taxes, you are going to have a larger deficit, and you are going to have more inflation, and the money that the people have will be worth less.
So I commend the distinguished Senator, and I associate myself with his remarks. I mentioned to him a few minutes ago, privately, that it is only $2.4 billion and that perhaps it should be $4.8 billion. I do not know what the amount should be. But I feel that the people of the country want less foreign economic aid, and I believe that the distinguished Senator is on very solid ground in the amendment he offers. I hope it will be approved. Certainly, I will vote to support it.
The PRESIDING OFFICER. The time of the Senator has expired.
Mr. HARRY F. BYRD, JR. I yield myself 5 additional minutes.
Mr. President, I thank my friend from Virginia.
I invite the attention of the Senate to page 75, "Special Analysis C," of the 1979 budget. It shows that as of September 30 of this year, the President will have available to him, for economic aid, funds appropriated but not obligated in the amount of $11.3 billion. Yet, this proposal is to add another $12.6 billion.
Mr. MUSKIE. Mr. President, first of all, let me make clear to my good friends from Virginia that they are no more aware than I am that there is no constituency, not any votes, in this country in the foreign aid function. That is largely because most people — I will speak of my State, and the Senators can speak of theirs — have no exposure to the human conditions or to the national security problems which influence our responsibilities as a world leader. Most people have no exposure to the circumstances of those foreign problems that we have or that the President has or that our representatives overseas have.
To most citizens, foreign aid means that we are just handing out to individuals in other countries, who do not appreciate it, gifts of dollars. That is a very common impression. Of course, there are no votes in it.
I recall that when I first campaigned for the Senate, campaigning extensively on the importance of the United States using its role as leader in the world to try to influence the affairs of mankind for the better, by using the resources available to us, I won a rather overwhelming victory. That is not to say that I sold foreign aid as such.
It is an easy whipping boy, an easy scapegoat, and I am fully aware that I do not gain a vote by standing here and opposing the amendment of the distinguished Senator from Virginia.
But since Senators keep making the point, I thought they should understand that I am in full agreement with them on the lack of popular support for foreign aid.
Second, the $11 billion to which Senator BYRD refers is mostly callable capital. in the form of guarantees, and the multilateral banks involved have never called for a single dollar of that money. It has never been expended. It is on the Treasury books, and it is not available to the President, by and large, for the purposes to which I have referred in my response to the amendment of Senator
HARRY BYRD. It is not available for the Witteveen facility, not available for the foreign military sales trust fund, not available for the bilateral program, and not available for salary increases to meet the cost of inflation. The $11 billion is simply not available for those purposes.
It is mostly callable capital. It will remain as callable capital which has never been called by the banks.
We should at least understand the distinction between callable capital and the unobligated amounts Senator HARRY F. BYRD, Jr., is talking about.
To imply that the unobligated money could be used for these purposes is not an accurate statement of the facts.
Senators may be opposed to both the callable capital and these purposes. That is understandable. But to suggest that you can finance this $2.4 billion that the Harry F. Byrd, Jr., amendment would strike from the close to $11 billion in callable capital that now exists is simply not an accurate statement of the facts.
Another point about this budget function is that this is the first year that foreign military sales have been included in this function. Previously, they have been included in the defense function, and I never heard any amendments offered then to strike military sales, especially by those who have a special interest in the defense of our country, our national security interests, and our allies and partners overseas. Now that it is in the international affairs function, it becomes fair game as foreign aid.
They are sales. They are by and large cash sales, and they are included as budget authority, because the United States becomes obligated to the transfer of funds out of the Treasury.
Senator BYRD's amendment would, in effect, strike $600 million of foreign military sales included in the $3 billion.
(Mr. CHILES assumed the Chair.)
Mr. HARRY F. BYRD, JR. Mr. President, if the Senator will yield, the amendment does not strike $600 million. It would reduce the total of $12.6 billion by $2.4 billion.
Mr. MUSKIE. That is correct, but the Senator justifies his amendment removing most of a $3 billion increase over 1978 and that $3 billion increase includes $600 million in foreign military sales.
If the Senator proposed to cut something out of the $9.6 billion, it seems to me the Senator owes it to the Senate to tell us what he is going to cut in place of the $600 million in foreign military sales. I can only address myself to the premise upon which his amendment is based.
I agree that there are no votes in foreign aid. I make two final points:
First, the Witteveen facility is not foreign aid. It is a new facility created by the industrialized countries and the OPEC countries to help the world adjust — the poor nations, the industrial nations, the intermediate nations — to the enormous balance-of-payments problems that were created by the quadrupling of energy prices and the flow of capital from the industrialized countries to the OPEC oil producing countries. That is a world problem. That is not an American problem. It is a world problem. And this country has similar problems. We are in a better position to deal with our domes-tic problems, but we find ourselves overwhelmed by them.
How about these poor countries that have no way of supporting their balance-of-payments deficits attributable to the higher cost of energy except with the help of the industrialized world and the countries whose increase in prices made the problem come into existence? The United States, as part of an enlightened program by the industrialized countries, was able to persuade the OPEC countries to come into the plan to create the Witteveen facility.
The facility simply helps these countries through their adjustment period. I do not call that a foreign aid program. I call that an international program designed to help the world international economic structure which, includes poor as well as rich nations, respond to the quadrupling of energy prices.
It seems to me that, as the world's most powerful Nation, we have some responsibility. Or are we to take the position: "Let every other country participate in this, but let us stand on the sidelines. Let us sit on the sidelines. We cannot afford it."?
I tell Senators that if this international energy problem, and the balance-of-payments deficits which it has created, is not part of our world responsibilities, then by what right do we take our balance-of-payments problems to the rest of the world? We go to the OPEC countries and we ask them to restrain their price increases, because if they do not, they will destabilize our country, destabilize the international economic situation, and create economic chaos. So we, the world's most powerful Nation, are dependent on the OPEC countries to help contain this balance-of- payments problem that has been created by the quadrupling of energy prices. But when we are asked to participate modestly in a facility designed to help poorer countries get the same kind of relief that we are asking for ourselves, do we say we cannot afford it?
The Senator from Virginia praised me this spring for putting the Witteveen Facility on budget. Now he criticizes the committee, because of its cost.
How many ways can you ask to have a proposition?
I yield to my good friend from Mary-land.
Mr. SARBANES. Mr. President, I wish to underscore the limited nature of the American contribution to the Witteveen Facility in comparison with that to be made by other countries. The American contribution will account for approximately 17 percent of the facility. Saudi Arabia, for one, will exceed our contribution significantly and OPEC countries, taken together, are contributing about one-half of the resources for the Witteveen Facility. It is the first time that they have been drawn into the international balance-of-payments system to provide resources to help to meet the problem created by developments in the energy field, in this instance with request to the lesser developed countries.
This is an American investment that is a wise one especially when one compares the terms of the American role here with most other things we go into.
I am very frank to say to the Senator from Virginia I would expect to find him praising the Witteveen Facility in terms of marking a new departure in the limited American contribution and in the assumption of responsibility by the OPEC countries and by the other advanced industrialized nations in percentages that far exceed what has heretofore been the case.
In other words, we ought not lose the opportunity of placing the Witteveen Facility on line, because it establishes a very important precedent in terms of the contribution which other countries, either the other advanced industrial countries or the OPEC countries, are expected to make to this problem in comparison with the U.S. contribution. It shifts us away from the heretofore prevailing assumption that the United States alone is going to carry these international burdens — burdens which more appropriately should be shared by other countries and will be in this instance by their underwriting the Witteveen Facility.
Mr. MUSKIE. I thank my friend from Maryland for putting that point in perspective.
I will close with a second and final point: Function 150, the total amount provided is 2.3 percent of the budget. It is six-tenths of 1 percent of gross national product. What does this very minor percentage of our resources represent? It represents this Witteveen Facility which has just been described by the distinguished Senator from Maryland as a sharing of responsibility, with other industrial countries and the oil-producing countries, for the balance-of-payments problem that has been created by the quadrupling of energy prices; second, it represents the sale of arms under the foreign military sales trust fund to countries like Iran, Saudi Arabia, Israel, and other countries with which we have entered into agreements for that purpose to help meet their defense needs.
We have concluded that such sales help these countries meet their defense needs and also meet our national security needs.
This small percentage represents our sharing responsibility in these development banks for providing economic assistance to countries which seek to achieve economic viability. If they succeed, of course, they serve our economic interests overseas as they become trading partners and consumers of American goods.
This 2.3 percent of the budget, six-tenths of 1 percent of GNP, represent our contribution to world leadership through our economic resources. Now, is that excessive? Is that beyond the call and the responsibility of our role in the world? Is that more than we can afford to try to influence events around the world in directions we think beneficent and consistent with our own national interest, or is it too much?
Well, because there is no constituency for it, because there are no votes for it, it is easy to say we cannot afford it and that in this one function alone we are going to balance the budget.
Mr. SCOTT. Mr. President, will the Senator yield?
Mr. HARRY F. BYRD, JR. I yield.
Mr. SCOTT. I appreciate the Senator's yielding to me.
You know when an amendment like this is offered, I believe we have to reflect back after World War II when we had the Marshall plan submitted, and we had to think about the happenings since that time in the field of foreign aid.
I remember H. R. Gross on the House side used to refer to this as the foreign giveaway program. Perhaps this was a misnomer to call it that, but the people of the country do not favor the way in which Congress has been providing assistance, broad-brush assistance, throughout the world.
When we talk about no constituency, I believe that we, as representatives of the people of the country, do need to reflect upon the desire of the people for less Government spending. There is no doubt in my mind at all that the people. of the country want our budget reduced. They want less taxes. Every time they have an opportunity to express themselves directly on this, they indicate that they want less taxes. Whether it is at the local level, the State level, or the Federal level, the only way we can cut is to cut and to vote "no" on some of these giveaway programs.
Again I commend my colleague from Virginia in what he is attempting to do. He is attempting to do what the people of Virginia and the people of the country want done. To me we are here to carry out the will of the people of the country, and voting in favor of this amendment is what the people would have us do, in my own personal judgment.
I appreciate the Senator's yielding.
Mr. HARRY F. BYRD, JR. Mr. President, I thank the Senator from Virginia. I shall take only a minute or two and then I will be glad to yield back the remainder of my time.
I think the basic question to decide is whether the Senate feels it is justified in increasing foreign aid by $3 billion in the upcoming budget.
I frankly do not think so. If we need to go into a new program like the Witteveen Facility, and it has, as the Senator from Maryland pointed out, some advantages over some of the current programs, it is, however, a new program; but if we are going into that, then I say let us reduce some of the existing programs, and let the funds come from that source.
The facts are that this concurrent resolution provides for a $3 billion increase, or a 31 percent increase, in foreign aid spending. I contend that is too much of an increase. I feel that increase ought to be reduced, and this proposal would do that.
I realize there is a difference of viewpoints. The able Senator from Maine has made a strong statement in behalf of his way of thinking just as the able Senator from Maryland has, but in my judgment the Congress is not justified in adding $3 billion to the foreign aid program, which represents an increase of 31 percent.
Mr. MUSKIE. Mr. President, I thought as a little personal footnote I should indicate that when passage of the Witteveen Facility bill was before the Senate the Senator from Virginia is recorded as voting "Yea" and the Senator from Maine is recorded as not voting. [Laughter]
Mr. HARRY F. BYRD, JR. That was a part, the Witteveen Facility was a part, of another larger bill, if the Senator will recall, it was not voted in alone.
Mr. MUSKIE. I also think the Senator was voting to put the Witteveen Facility on budget where it would become a more tempting target.
Mr. HARRY F. BYRD, JR. I think it is very desirable, and I have in the past, and do now, commend the Senator from Maine and the Budget Committee for putting this new foreign aid spending program in the budget process rather than having it as an off-budget item. If we are going to have this new program, most certainly it should be incorporated in the budget, as the Senator from Maine has advocated and as the Budget Committee has proposed to the Senate. That is the way to handle it.
My contention is if we are going to go into this new program, then we should reduce the other programs accordingly, because I just think it is too large an increase for the American taxpayer to increase foreign aid spending by $3 billion, or 31 percent.
Mr. MUSKIE. At least we have found some area of agreement.
Mr. HARRY F. BYRD, JR. We have many areas of agreement.
Mr. CHILES. Mr. President. will the Senator from Maine yield just temporarily?
Mr. MUSKIE. I yield.
Mr. CHILES. How much money is in the bill for the Witteveen Facility?
Mr. MUSKIE. $1.8 billion.
Mr. CHILES. $1.8 billion. If we had not put the facility on record, the authority was there, was it not, to spend that $1.8 billion off record?
Mr. MUSKIE. Yes, the Senator is correct.
Mr. CHILES. So of the $3 billion increase we are talking about in this number, $1.8 billion of that could have been spent off budget, still would have been a spending, and it would just have been off record?
Mr. MUSKIE. That is correct.
Mr. CHILES. So we are really then talking about an increase of $1.2 billion?
Mr. MUSKIE. The Senator is correct. That was the point I was trying to make earlier.
Mr. CHILES. The other could have been done through the back door.
Mr. MUSKIE The Senator is absolutely correct.
Mr. CHILES. I thank the Senator.
Mr. MUSKIE. I am ready to yield back my time.
Mr. HARRY F. BYRD, JR. I yield back my time.
Mr. MUSKIE. I yield back the time and I ask for the yeas and nays.
The PRESIDING OFFICER (Mr. HUDDLESTON). Is there a sufficient second? There is a sufficient second.
The yeas and nays were ordered.
The PRESIDING OFFICER. Is all time yielded back? Does the Senator from Virginia yield back his time?
Mr MUSKIE. I think he has used his time. I yield back my time.