April 25, 1978
Page 11386
Mr. MUSKIE. Madam President, I yield myself 2 minutes, and then I will yield to my good friend from Mississippi(Mr. STENNIS) .
I have listened to the statement by the distinguished sponsor of this amendment, Senator MCGOVERN. As I listen, I get two impressions which I would like to refute.
The first is that there is no concern in the Budget Committee for the priorities which Senator MCGOVERN has described at some length. Let me assure the Senator that I have heard his speech repeated over and over again in the Budget Committee by various Senators, on both sides of the aisle.
Let me assure him, also, that with respect to each of these priorities, the budget resolution before us reflects increases which reflect, in turn, our concern about these priorities.
The third point I make is that the Budget Committee has a responsibility, across the board, for 19 functions of Government, to try to fit all priorities within a spending total that relates to our economic condition. We have the responsibility of splitting up the pie, and we have to be concerned with the rate at which spending can be applied usefully to a problem. And most important, the pie itself is not expanding.
There is an idea that if you are concerned about the condition of our railroad beds, you just throw a lot of money at it. The Budget Committee has pushed for progress in this area ever since it came into existence.
The amount of money we provide in this budget resolution for that purpose is enough; and I suspect more than can be spent efficiently, until national policy identifying the specific rail beds to be improved and the transportation goals to be met are established.
There is another implication in Senator MCGOVERN statement which I refute, and that is the idea that the Budget Committee writes the authorizing legislation.
I listened to his description, for example, of his proposal to increase other spending.
Madam President, the Budget Committee does not decide on the mix of technologies. We provide the overall functional totals. The authorizing committees decide on the mix.
In any case, I do not have the time, unfortunately, to get into all the areas touched upon by Senator McGOVERN specifically.
I ask unanimous consent to have printed in the RECORD, Budget Committee staff memorandums which undertake to respond to the transfer amendment in the light of what the Budget Committee actually did. These memorandums will put these matters in better perspective as part of the RECORD.
There being no objection, the material was ordered to be printed in the RECORD, as follows:
ARGUMENTS AGAINST SENATOR MCGOVERN'S AMENDMENT TO INCREASE BUDGET TARGETS FOR TRANSPORTATION
PURPOSE OF AMENDMENT
To increase the budget targets for transportation by up to $0.6 billion in budget authority and $0.1 billion in outlays to allow for increased funding for national rail rehabilitation.
REASONS TO OPPOSE THE AMENDMENT
1. The Budget Committee targets already include $0.6 billion in both budget authority and outlays above current policy for Mission 2, Rail Transportation. This increase will permit additional Federal investment for the continued rehabilitation of Conrail.
2. The targets are adequate to accommodate the President's request of $279 million for
national rail rehabilitation (excluding Conrail), and it is not clear that even this amount will be fully utilized. It represents the balance of the $600 million authorized by Section 505 of the Railroad Revitalization and Regulatory Reform Act of 1976 (the 4R Act) for Federal equity investment in railroads requiring rehabilitation assistance. In the two years since the 4R Act was enacted, DOT has received only $400 million in applications for these funds and has approved less than $100 million.
3. The 4R Act provides additional financial assistance for rail rehabilitation which is not being used. Section 511 of the Act authorizes Federal loan guarantees of up to $1 billion. However, in two years DOT has received applications for less than $200 million, and has approved less than $50 million.
4. DOT has been very slow in completing its study of the rail rehabilitation problem and providing assistance to improve the nation's rail lines, but a shortage of funds is not the cause of the delay. It is likely that higher funding levels would only add to the backlog of unobligated funds.
ARGUMENTS AGAINST SENATOR MCGOVERN'S TRANSFER AMENDMENT TO INCREASE BUDGET TARGETS FOR EDUCATION
PURPOSE OF AMENDMENT
The amendment would transfer $4.6 billion in budget authority and $1.7 billion in outlays from defense to other spending purposes. The amendment transfers $2.0 billion in budget authority and $0.5 billion in outlays to function 500.
REASONS TO OPPOSE AMENDMENT
The amendment includes $1.3 billion in budget authority and $0.1 billion in outlays to provide for expanded spending for middle income tuition assistance.
The Committee mark for the Higher Education programs did not assume amounts necessary to fund the College Opportunity Act. Instead, the Committee voted to make room in the revenue floor for a modified version of the post-secondary education tuition tax credit portion of the Packwood/Moynihan Bill as reported by the Finance Committee. The Committee mark assumes $0.5 billion for enactment of the tax credit in revenue reductions in FY 1979, with the $0.1 billion refundable portion carried as spending in Function 500. The Committee voted to maintain current law in the existing higher education programs, which means continuation of the $1600 ceiling in BEOGS and no increases in the other programs. The spending proposal was rejected as the tax proposal and the spending bill serve the same purpose and the Congress cannot afford to enact both.
You should oppose the $1.3 billion transferred for middle-income tuition assistance on the grounds that it is inflationary and will most likely result in increased tuition rates. The spending will add to the budget deficit and the first year costs are only a foot in the door. Amounts assumed for the tax credit are sufficient.
The widespread support for middle class college tuition assistance is principally based on the perception that children of middle-income families are being squeezed out of the opportunity for higher education because of their inability to meet its high cost. A recent report of the Bureau of the Census has challenged this contention. The date show that overall enrollment rates for middle-income students were not different than enrollment rates in 1967 and that by last year the trend of declining enrollment of middle-income students had reversed and returned to the higher levels. In addition, growth in family incomes has more than kept pace with increases in tuition costs. For example, during 1967-76, median family income increased by 88.6 percent. Because of this growth in family income, student charges at public institutions decreased from 13.4 to 12.4 percent of median family income, while student charges at private institutions fell from 27.8 percent to 26.1 percent of median family income.
4. Add-ons proposed for employment and training programs will not spend in fiscal 1979. Both CBO and OMB agree that, at a minimum, $400 million of the $1.0 billion appropriated for new youth programs in the Economic Stimulus Appropriation in 1977 will remain unspent by the end of FY 1978. The Committee mark already presumes a $500 million increase over the original appropriation. Much the same is true for the Job Corps program which was doubled in size in fiscal 1978.
ARGUMENTS AGAINST SENATOR MCGOVERN'S AMENDMENT TO INCREASE BUDGET TARGETS FOR ENERGY
PURPOSE OF AMENDMENT
The transfer amendment would increase spending for energy (Function 270) by $2.0 billion for alternative energy research and development.
FUNCTION 270
In this function the Budget Committee is recommending $10.2 billion in budget authority and $10.1 billion in outlays. By mission, the Committee's recommendation is as follows:
Real growth — The Committee's recommendation for energy provides approximately, 21% real growth, by assuming $1.8 billion in budget authority and $0.9 billion in outlays over current policy, as shown below:
Increase over President — The Committee's recommendation for the energy function is $0.7 billion in budget authority and $0.2 billion in outlays above the President's request. This request is viewed by many as inadequate, and the Committee has responded accordingly.
Tools other than spending — The McGovern transfer amendment employs only direct spending to promote solar energy technologies and energy conservation. Yet these activities (which just about everyone supports) can be supported with tools other than direct spending. For example, solar technologies can be promoted by loans or loan guarantees. Energy conservation can be achieved by tax policies (such as the proposed Crude Oil Equalization Tax) .
Committee does not specify technology mix — The McGovern transfer amendment implies that current energy programs emphasize nuclear and coal technologies at the expense of solar and conservation activities. Regardless of whether this view is correct, the Budget Committee's recommendation does not address the appropriate mix of energy programs. If the authorizing and appropriations committees, within the amounts recommended by the Budget Committee, wish to adjust funding for solar energy and conservation, they are free to do so.
(Mr. METZENBAUM assumed the chair.)
Mr. MUSKIE. Mr. President, I ask unanimous consent — and I understand that this has been cleared by the leadership on both sides — that the vote on the McGovern amendment take place at 2 o'clock or following the debate on the Eagleton amendment, so that the votes can be back to back. I ask unanimous consent at this point that the vote on the McGovern amendment be set for 2 o'clock this afternoon.
Mr. McGOVERN. With the understanding that it will come before the vote on the Eagleton amendment.
Mr. MUSKIE. That is my understanding. That is not in my instruction.
Mr. McGOVERN. With that understanding, I will not object. I think it is important that we vote on this amendment first. I am not concerned about whether it is now or 2 o'clock, so long as we have an opportunity to vote on this amendment in the order in which it was brought up.
Mr. MUSKIE. Let me make that clear. I add to the unanimous consent request the further request that any votes ordered in the interim will follow the vote on the McGovern amendment.
The PRESIDING OFFICER. Is there objection?
Mr. STENNIS. Mr. President, reserving the right to object, I ask the Senator this: Suppose the debate on the Eagleton amendment should conclude prior to 2 o'clock. What would be the situation? Could we vote, then, when debate has been completed on both amendments, or would we have to wait until 2 o'clock?
Mr. MUSKIE. I assume, from what I have been told — and I have not had opportunity to discuss this formally with the leadership — that the intention still is to schedule the votes for 2 o'clock, with the vote on the McGovern amendment coming first.
Mr. STENNIS. I have no objection.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MUSKIE. Mr. President, at this time I yield 10 minutes to the distinguished Senator from Mississippi.
Mr. STENNIS. Mr. President, first, I want to say a special word of thanks as well as commendation for the members of the Senate Budget Committee. These men have done much in a relatively short time in bringing some order and arrangement of priorities out of what have been more or less loose, uncertain, and at times chaotic situations that we would get into here in discussion of the annual budget of many hundred billions of dollars.
I certainly commend them highly. They have accomplished more than a great many of us thought they could, due to the fine, dedicated hard work of the chairman, the ranking minority member, and a number of other members of that important committee.
Mr. President, I am here this morning as chairman of the Armed Services Committee which authorizes about 70 percent of the military budget, and also I make some reference to what the appropriations subcommittee has done on this same subject matter.
I think it is rather striking, Mr. President, that the Budget Committee now, with all their preparation and their splendid staff, has come up with a figure that is very close to the President's figure on what he thinks should be the military budget for the year and very close to what the membership of the Armed Services Committee has come up with, and also very close to what the Appropriations Committee thinks is the probable figure with reference to the priorities and the total amount that should be appropriated.
Mr. President, almost 4 months after the convening of this session, with a lot of work having gone into it already last fall by the staffs of these committees, the closeness of the final findings in dollars itself is tremendous argument in favor of the probability of the correctness of these figures.
More especially is this true now, at this stage of this Senate budget resolution, as it starts out on the floor here for the first time with actual figures in it. This is by no means the final appearance that it will have to make before it becomes valid and has the approval of this body. We will be back here May 15, or soon before, and everything will be open then for consideration and debate.
So I respectfully say that now is a time to make an overall rough estimate, so to speak, rather than have the final consideration of these hard figures. The work that has already gone into this matter by those who work on it from year to year to year certainly is prima facie evidence showing the approximate correctness for the Members of the body who have not had the chance to study as those whom I have referred to have.
To get down to the specific figures here, this massive defense budget of $128,400,000,000 as submitted by the President has been increased only $1.4 billion, just a little over 1 percent by the Budget Committee, just a slight amount more by the Armed Services Committee, $1.7 billion, and a similar increase by the Appropriations Committee. That is about as good a flying start as could be made with these estimates.
If there is a judgment of the body to reduce some of these military figures, I certainly will bow to that judgment, but I do not think to reduce the military budget is any argument for putting the money in another part of the budget. We are here to consider these segments in a tentative way, as I have said, but I do not believe it adds strength for putting the money in another part of the budget. I have great respect of the author of this amendment. He is consistent, diligent, honest and hard-working, and you better not discount him. If you do, those of us who handle bills here in the Senate will get into trouble if we do not take him seriously. That is Senator McGOVERN of South Dakota. I respect him very highly.
But now I respectfully submit that we must move on. We must move on now to the next steps. I hope that this military budget, with all the work that has been done on it, will continue as it is.
Let us go and mark up the bill. That is what we will be doing starting tomorrow. This is a budget that has already been described by the Secretary of Defense as austere, and the Secretary of the Navy, a man of unusual ability, says that the austerity in the shipbuilding program for this budget request should not continue beyond this year. That itself shows some pressure for some additional shipbuilding. That is what it is. That is the main reason why the Armed Services Committee voted to make a little above 1 percent increase in the President's total budget. That was to make room for what the committee might do with reference to some increase, a stepping up of the shipbuilding program, with the possibility of laying the groundwork for different types of ships to come.
I have the vote here, if anyone is interested in seeing it, that we took — it was not just a leap in the dark — before our Armed Services Committee. We had roll call votes on the President's budget and then the proposed increases. One proposal was for an increase — I believe the highest one ran to as much as $6 billion, and that was voted down by a very solid vote. Other smaller decreases were voted down, and we finally established the figure I have already referred to.
I wish to make clear that I hope we can hold this bill even below the President's budget, if reasonably possible. That is our committee recommendation.
Frankly, I do not expect now that can be done. But certainly we are going to try to hold it to the lowest possible dollar or the lowest reasonable dollar, because the time has passed when we can just throw away money right and left. I think our national debt and the deficits, and so forth, clearly give us that unmistakable warning that the days of free spending have to be brought to an end.
So, we want to go back now and work on this matter. We do not object to differences of opinion, but orderly processes are already in motion. A tremendous number of Members' minds have worked on these matters in detail. I think it is in fair shape.
The Senator from South Dakota referred to the fact of NATO increases. If we can find a place to decrease the amount the President recommended, we will certainly do it. He referred to the fact that a few years ago a great number of Senators were in favor of reducing NATO.
I remember when there were 44 Senators who offered a resolution here to very substantially reduce NATO — and 44 is almost half the membership — but that resolution did not pass. Here we are several years later with more support now in the body here, as I interpret it, for NATO than there has ever been since I have been handling these bills as floor manager.
So again with great deference to the author of this amendment, as a member of the Armed Services Committee, I submit these matters here on the basis of their merits and the work in which every member of this committee has actively participated and brought you this judgment. I hope it will not be upset.
I thank the chairman and I yield the floor, Mr. President.
Mr. MUSKIE. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The second 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. I yield 5 minutes to the distinguished Senator from Oklahoma.
Mr. BELLMON. Mr. President, I have listened with great interest to the McGovern proposal, and have already commented to some extent on what the transfer would do. But there are another couple of points I believe need to be made before we vote on this important amendment.
The McGovern proposal to increase funding in the area of education, in my judgment, does not fully take into account the actions of the Budget Committee. Senator McGovern would add an additional $1.6 billion for tuition assistance to middle-income families and for youth unemployment. The Senate Budget Committee has already allowed room in the resolution for a refundable tuition tax credit for middle-income families.
Mr. President, to keep the record straight, I would like to make it clear that I opposed provision for this credit in committee, and it is my intention now to oppose the tax credit when the legislation is before the Senate. But, nevertheless, this resolution which we have before us, and which I support, recognizes the concern which Senator McGOVERN and others feel about providing funding for tuition assistance to middle-income families.
In addition, the Budget Committee has recommended a shift of $3 billion of the $6 billion requested by the administration for CETA public service jobs to service the needs of the structural unemployed. So this resolution deals with that concern which Senator MCGOVERN has expressed.
Contrary to Senator MCGOVERN's assertion, the resolution includes as much money for existing youth programs as the committee was advised could effectively be expended in fiscal year 1979.
One of the problems we have, Mr. President, is sometimes we push so much money into these programs that it cannot be used effectively, and the result is that in efforts to spend the money the agencies frequently allow waste and abuse to creep in and put the whole program into disrepute. We simply cannot allow that to happen in these areas, and our resolution, we feel, does include as much money as can be effectively expended in fiscal year 1979.
We have checked with CBO and with the Department of Labor on this point and we got the information before the Budget Committee reached its decision.
Naturally, we are all concerned about the levels of youth unemployment. It is one of the great problems we have in our country, and the Budget Committee's recommendation does include, we feel, what should be the proper level of funding for youth unemployment programs in the maximum range we were told the money could be spent in existing programs.
Now then, Mr. President, in the energy function, the Budget Committee has added 19 percent of growth over fiscal year 1976 in budget authority, and a 65 percent growth in outlays over fiscal year 1976.
Let me repeat that. Our resolution, the resolution before us, which Senator MCGOVERN would amend, already includes 19 percent growth in budget authority and 65 percent growth in outlays in the energy function for 1979 over 1978.
This is one of the most dramatic increases included in any function in the budget this year.
The McGovern amendment would add an additional $1.9 billion in budget authority, an additional $1.14 billion in outlays to the energy function, and that would make an increase of 20 percent in budget authority over the committee recommendation and would bring the total increase in projected outlays to a whopping 87 percent over fiscal year 1978.
In my judgment, it is an unreasonable addition to a function we all know is important. But again the Budget Committee has taken the need into account and, we feel, adequately addressed the need in the resolution we have before us.
I feel that information needs to be taken into account by Members before we vote on the McGovern amendment.
Mr. MUSKIE. Mr. President, yesterday in colloquy with the distinguished Senator from Virginia (Mr. HARRY F. BYRD, JR.) I had discussion relative to replenishment of the IDA IV and IDA V, so-called soft lending programs of the World Bank.
In response to questions put by Senator BYRD yesterday I have had a memorandum prepared which outlines the history of IDA IV and IDA V at length; and I think it would be useful information to include in the RECORD.
I ask unanimous consent that that memorandum be included in the RECORD at this point.
There being no objection, the memorandum was ordered to be printed in the RECORD, as follows:
U.S. SENATE, COMMITTEE ON THE BUDGET,
Washington, D.C., April 24, 1978.
MEMORANDUM
To: Senator Muskie.
From: Committee Staff.
Subject: The Difference between IDA IV and V.
The terms IDA IV and IDA V refer to the fourth and fifth replenishments of the International Development Association (IDA), the soft-loan window of the World Bank. "Replenishment" Is the technical term for a multiyear schedule of donations by the wealthier nations (mostly in North America, Europe, and East Asia) which belong to the World Bank and the regional development banks. The total amount, individual country shares, and length of each replenishment are decided at a special negotiating session by designated finance ministry officials. The results of the session are submitted to governments (and their legislatures) for approval; agreements go into effect only afterwards.
The authorization for the U.S. to enter into IDA IV was enacted in 1974 (P. L. 93-373) . It committed the U.S. to provide $375 million a year for four years, for a total of $1.5 billion. The other donor countries extended their donations over three years, beginning in 1975. The U.S. insisted, however, on a four-year donation schedule starting in FY 1976. In part, this U.S. decision was due to a desire to prevent overlapping between IDA IV and the final installment of IDA III, due in FY 1975. For IDA IV, the other donor countries completed their contributions on schedule in FY 1977.
During the first two years of IDA IV, FY 1976-77, Congress met the U.S. commitment, but on a delayed basis, as shown on the following table:
(Dollars in millions)
Enacted Request
FY 1976 foreign assistance appropriation bill320
FY 1977 foreign assistance appropriation bill375
FY 1977 supplemental appropriation bill 55
The final two years' funding for IDA IV ran into trouble in Congress in FY 1978 when the Executive branch negotiated IDA V and asked Congress to begin the Fifth IDA Replenishment (IDA V) . The final two installments of IDA IV were due in FY 1978 and FY 1979.
The IDA V replenishment, fully authorized in 1977 (P. L. 95-118), was for the first time formally made subject to subsequent appropriations action. The U.S. share of the $7.3 billion total replenishment was 31 percent, or $2.4 billion. The payments were spread over three years, for an annual request of $800 million. The other donor nations, led by the West Germans, structured the IDA V agreement so that if the U.S. failed to pay its share in any year, the agreement would lapse. For this reason, the Carter Administration has concentrated on securing funds for IDA V at the expense of the remaining installments of IDA IV. Every other donor has completed payment on IDA IV.
During the FY 1978 appropriation process, the Administration requested $1,175 million ($375 million, IDA IV and $800 million, IDA V), but received only $800 million for IDA V. The Senate Committee on Appropriations reported a foreign aid bill which included $950 million for IDA ($150 million IDA IV and $800 million IDA V) . On the Senate floor, a threat by Senators Allen and Harry Byrd to offer and debate at length 39 amendments to the Foreign Assistance Appropriation Bill resulted in an agreement to cut the development banks. The two Senators mentioned above, the Committee, and the Leadership agreed to amend and lower the amounts for most of the development banks. For IDA, the decision was made to eliminate the remaining $150 million for IDA IV in the Committee bill. This is the Senate decision Senator Harry Byrd referred to on the floor today.
The floor manager did not strongly resist the elimination of IDA IV from the FY 1978 bill because he hoped to encourage the World Bank to accomplish management reforms and savings. The Inouye Subcommittee has held hearings in this session on the $375 million due to IDA IV in FY 1978 and the final $375 million due this year. Both are part of the President's total FY 1979 request for IDA, which also included the second $800 million for IDA V. If the Subcommittee is satisfied with World Bank management reforms and savings, all of IDA V due this year and at least part of IDA IV is likely to be reported by the Committee in the FY 1979 appropriations bill.
Mr. METZENBAUM. Mr. President, I support the amendment offered by the Senator from South Dakota.
I do so because I believe that the Senator is correct in pointing out that this Nation cannot afford to pour ever-increasing amounts of money into ever more costly military hardware at the expense of urgently needed domestic programs.
But I also support this amendment because I am convinced that the Department of Defense is one of the least efficient of all of our inefficient Federal bureaucracies. I firmly believe that our Nation can have fully adequate military forces at a cost far below that which the American taxpayer is now required to bear.
The Department of Defense is, for example, required by law to go to the competitive market place to procure the goods and services it requires. Yet in fiscal year 1976, the DOD awarded over $23 billion in contracts without competition. This included the incredible total of 117,000 noncompetitive awards greater than $10,000. Of these, 31,000 exceeded $100,000.
As one who spent much of his life in business, I know that no private firm could possibly operate in this manner and hope to survive in our free market economy. I am certain that the DOD's unbusinesslike approach to procurement must inevitably result in an annual loss of staggering amounts of taxpayer funds. I believe that procurement reform alone could save far more money — and on a continuing basis — than will the amendment before us today.
I note that the Senator from South Dakota has made a number of suggestions about specific items that could be cut from the defense budget. I think that some of his suggestions are well-taken, though I would want to examine others in greater detail before reaching a position on them.
But the main issue, whether we approach it from the point of view of national priorities, of specie programs, or of proper management of public funds, is that we are clearly spending too much for military purposes. We can bring the bill down and we can do so without impairing our national security or that of our allies.
Mr. President, I am aware that this amendment has little chance of passage at this time. I believe, however, that it is an important step in calling public attention once again to the unresolved questions about the true extent of our need to devote scarce resources to the defense budget. I hope that this amendment will reopen the question of how much is enough and I congratulate my colleague from South Dakota for his courage and foresight in bringing this vital issue before the Senate and the American people.
Mr. MUSKIE. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The second assistant legislative clerk proceeded to call the roll.