October 12, 1978
Page 36235
Mr. MUSKIE. Mr. President, I rise in opposition to the Sugar Stabilization Act of 1978 as proposed by the Finance Committee.
Although this bill does not violate the spending ceiling or revenue floor of the second budget resolution, it has a significant inflationary impact which cannot be ignored. Based on preliminary CBO estimates, in fiscal 1979 this bill will reduce outlays by about $0.2 billion, and reduce revenues by a slightly smaller amount. This means the bill will reduce the deficit by less than $50 million. But this reduction in the deficit comes at a great cost to the American consumer.
We have before us another case of the Senate legislating inflation. This bill will increase prices for sugar by over 40 percent in the next 5 years and will cost consumers over $3.5 billion in increased expenditures for sweeteners.
I have great sympathy for the plight of this Nation's farmers. Many of my constituents in Maine are hard working farmers who have struggled through lean years. However, they have not asked the Congress for a guaranteed profit that keeps all but the most inefficient farmers in business.
The U.S. Department of Agriculture estimates that the average costs of producing sugar are at least 5 percent less than the support price in this bill. Our farm programs were never designed to treat agriculture as a regulated industry where the Federal Government insured each producer a profit.
I am not opposed to the principle of farm income stabilization. It has long been a goal supported by Congress and the American people. However, I do strongly object to an attempt to unduly enhance the incomes of 14,000 growers and processors at an enormous cost to the consumers of this country.
This bill is estimated to add nearly a full point to the Consumer Price Index for food over the next 5 years. This disturbs me greatly. Food price inflation significantly affects the inflation psychology of the American consumer. Food items are purchased with greater frequency than almost any other items and this leads to an increased awareness of inflation and potentially inflationary responses.
During the debate on the recent tax bill much concern was expressed for those Americans with low incomes. The burden of this bill will fall most heavily on low income consumers who spend a larger portion of their disposable income on food and whose diets consist of more sugar and items containing sugar.
The distribution of benefits from this program only adds to the inequity. A small number of sugar processing firms receive substantial benefits from this program. Furthermore, the increased returns from this legislation will go primarily to the largest sugar growers. This is especially true among sugarcane growers where 1 percent of the growers will obtain over 50 percent of the benefits from the higher prices received for sugarcane.
As an alternative I would like to state my strong support for the amendment offered by Senator METZENBAUM. This amendment would revise the proposed sugar program to dramatically reduce its direct inflationary cost. In accepting the amendment the impact on consumer expenditures and food price inflation would be only one-tenth of that in the Finance Committee bill.
The Metzenbaum amendment would treat sugar producers no differently from wheat, feed grain, or cotton farmers. Profits would not be guaranteed but substantial losses to sugar producers would be prevented. This is consistent with the goals of American agricultural policies dating back to the 1930's.
Finally, acceptance of this amendment would reduce the risk of a Presidential veto, which would otherwise prevent the continuation of some form of income protection for domestic sugar producers.
The Senate is about to adjourn shortly. The defeat of this bill will provide one last opportunity to show the American people that the Congress will take the lead in fighting the battle on inflation.
Mr. President, in closing let me note that this bill as proposed by the Finance Committee is subject to a section 303 point of order under the Budget Act consistent with the Chair's ruling last week. In view of the Senate's vote on the appeal of that ruling, I now merely note this violation, and reserve my right to reopen the issue at an appropriate time.