April 24, 1978
Page 11145
Mr. MUSKIE. A full discussion of the committee's revenue recommendations is also contained in the committee's report. But let me summarize for you now some important features of those recommendations.
The committee recommends a revenue floor of $443.3 billion for fiscal year 1979.
The committee revenue floor allows for a $19.4 billion income tax reduction in addition to the extension of the general tax rate reductions scheduled to expire at the end of calendar 1978.
The $19.4 billion reduction represents a $25 billion reduction on a full year basis, but assumes that all the additional rate reductions first would become effective on January 1, 1979, for only 9 months of fiscal year 1979.
By comparison, the administration recommended a full fiscal year $25 billion in additional net tax reductions. Primarily because of the later effective date assumed by the committee for new rate reductions, the committee recommends $5.2 billion less in net revenue reduction legislation for fiscal year 1979 than does the administration.
The committee specifically rejected a proposal to reduce social security taxes and to partially finance the hospital insurance trust fund with appropriated general revenues.
I strongly concur with the committee in this decision. The American people broadly approve of the existing social security system — a system based for over 40 years on trust funds financed solely with social security tax contributions.
The link between social security benefits and taxes should not be severed by a general financing mechanism without the most deliberate and careful study and analysis.
The 1977 Social Security Amendments first take effect in January 1979. They will have a limited effect in 1979 on both individual workers and the economy. Therefore, the Budget Committee recommends that Congress not act in haste to block those increases. At least four major studies of the social security system are scheduled during the next year. We should have the benefit of the results of these studies before further action is taken.
Mr. President, tinkering with the social security system every year, even if in response to voter concerns in an election year, will only serve to reduce public confidence in our system and the ability of the Congress to handle it responsibly.
The committee's revenue floor would allow for a number of legislative proposals, including a college tuition tax credit, a targeted employment tax credit, and an expanded earned income credit.
I was outvoted by the committee on the tuition tax credit. Personally, I oppose enactment of a tuition tax credit, whether it applies solely to college tuition or also to elementary and secondary school costs. Enactment of such a credit would be inflationary at a time when the Senate should do everything it can to contain inflation. The credit would be inflationary because most of its benefits would be captured by educational institutions in the form of higher tuition charges. Taxpayers would be little or no better off than they are without the credit.
Moreover, all the reliable data indicate that, contrary to public perceptions, tuition costs are not rising faster than the average income levels. The need for this credit has not been demonstrated. As a result, a tuition tax credit is neither efficient nor justifiable education policy.
I should add that the committee made no allowance for the increased direct grant approach to tuition aid which the President offered as an alternative to the tax credit.
CONTROLLING THE FREE-SPENDING MENTALITY
Mr. President, I have described some of the major implications of the recommended 1979 budget and some of the Budget Committee's concerns in shaping it.
But Mr. President, let there be no doubt that the Senate itself holds the key to success or failure of budget reform.
The congressional Budget Act reforms have gained a momentum and have had an influence on congressional spending as great as any for which we dared hope when they were enacted 4 years ago.
But I must frankly advise the Senate that this may well be the decisive year in which the fate of this attempt at fiscal responsibility will be sealed.
We simple cannot afford to enact every bill, every program which appeals to us — or which some interest group is pressuring us to enact. Each of us in the Senate has a greater responsibility. That is to be responsible with the public interest, the public purse, and the public trust. To ignore this responsibility is to bankrupt our Nation, destroy our budget process and betray the confidence and well-being of the people we are supposed to represent.
Rather, we must choose carefully those bills, those programs, which we have judged most meritorious and most advantageous to the greatest number of American citizens. We cannot afford them all.
Mr. President, in the absence of congressional restraint we could face the very real possibility of an $80 billion deficit in fiscal year 1979.
Not the $61 billion deficit the President proposed.
Not the $56 billion deficit this resolution assumes.
But $80 billion. Almost a 10-percent increase in our national debt to be added in a single year.
This $80 billion deficit was not plucked out of midair. It was taken from the reports of just two committees of the Senate.
First, the Appropriations Committee recommended total outlays in fiscal year 1979 of $508 billion. Second, the Committee on Finance recommended tax cuts to reduce fiscal year 1979 revenues to $428 billion.
The difference between the spending recommended by the Appropriations Committee and the taxes recommended by the Finance Committee is $80 billion. And the requests of the other standing committees would make the total go even higher — beyond $90 billion.
Mr. President, the Budget Committee exercised great care and restraint in reporting to the Senate a $55.6 billion deficit. And now the full Senate must act responsibly in reviewing the congressional budget and adhering to the budget we adopt.
Let Senators who disagree with the recommendations of the Budget Committee openly acknowledge their positions and offer amendments to change the results.
We cannot afford to have Senators supporting the resolution with mental reservations which only emerge when later spending or revenue measures hit the floor. We should all be cognizant of the impact any changes could have on the deficit — and on the Federal budget.
Mr. President, this year the Senate has already demonstrated on the agriculture bill a willingness to pass legislation without pausing to examine its budgetary and inflationary consequences.
Thanks to the House of Representatives which rejected the conference report by almost a 2-to-1 margin, we will not have to live with the consequences of such legislation. We will not have to respond to the American people when they ask why we enacted a bill which would have increased the inflation rate for food by 1.1 percent to 1.5 percent in fiscal year 1979:
But we cannot continue to rely on the President or the House of Representatives to demonstrate fiscal responsibility in Washington.
The Senate must also send a signal to the American people that we are serious about restraining Federal spending, that we do intend to hold the line on inflation, that we will reduce the deficit..
And we must start today with the first budget resolution. I realize that the budget recommended by the committee does not provide each committee with everything it wanted Each committee, in making its request for fiscal year 1979, addressed national needs as it saw fit, and none should be condemned for doing so.
But we cannot enact all of this legislation. We cannot afford it all.
I know it, the other Members of this body know it.
The American people know it.
We must begin to show our people that we .are doing our very best to hold Federal spending to the lowest possible level consistent with effective fiscal policy to meet the Nation's' needs..
Mr. President, any additional spending and a higher deficit than the committee's recommendation would send the wrong signal to the American people, and I must oppose all such amendments.
Mr. President, in closing let me express by great personal admiration and gratitude to the distinguished Senator from Oklahoma (Mr. BELLMON) the ranking member on the Budget Committee, for his consistent support and counsel in upholding the goals and objectives of the Budget Act. I could not have asked to work with an individual more devoted to the maintenance of the integrity of the budget process. Without his unflinching support the budget process would not have had 3 years of positive achievements of which we can all be proud.
Let me also express my thanks to the staffs of the Budget Committee and the Congressional Budget Office for the diligent and excellent and highly professional support they have provided in the preparation of the first budget resolution. Their task this year was especially challenging as the committee moved into multiyear and mission budgeting. But we have come to expect the highest professional performance from them and we were not disappointed this year.
Mr. President, I yield the floor.