August 3, 1978
Page 24205
SUNSET
Mr. MUSKIE. Mr. President, I had the privilege this morning of participating in a national town meeting on the "Tax Issue" with Howard Jarvis and Senator ROBERT DOLE.
At that meeting we discussed ways to reduce the burdens on the American taxpayer and to bring Government spending under control.
During the course of that discussion, I was delighted to find that the three of us agreed on the essential role the sunset legislation must play in that effort.
We agreed that sunset is a rational, workable, and sensible way of getting a grip on wasteful and low-priority Federal spending.
With California's overwhelming endorsement of Proposition 13, it is clearer than ever that the time for sunset has come.
Sunset is really a very simple idea. It attacks the notion that Government programs, once enacted; should remain forever on the books. Instead, it proposes that a program should continue only if Congress decides that it is needed and is still going well. If a program cannot meet these conditions, it goes out of business.
Under S.2, virtually all Federal programs would come up for systematic review on a rotating, 10-year basis. S.2 also proposes that similar programs be considered at the same time. That way we can see whether dozens, and sometimes hundreds of programs in a particular area, are still needed.
Mr. President, I am hopeful that in the very near future the Senate will have the opportunity to vote on S. 2, the sunset legislation I introduced with 60 of my colleagues.
S. 2 has been approved by both the Committee on Governmental Affairs and the Committee on Rules and Administration. It has been endorsed by the President and it has been sponsored by more than 150 Members of the House.
As the time for debate in the Senate nears, I have prepared a number of materials explaining S.2 and the reasons it should be enacted. I ask that these documents be printed in the RECORD.
The material follows:
SUMMARY OF S. 2
Title I.—Sets out a five-congress (or ten year) schedule for the reconsideration and reauthorization of all Federal programs, according to groupings by budget subfunction;
Requires that no new budget authority can be obligated or expended for any program not specifically reauthorized by Congress which is subject to the reauthorization schedule;
Requires that the report accompanying any authorization bill reported out by a committee must answer certain basic questions about the legislation;
Provides that programs which are not included in the required reauthorization schedule be subjected to the comprehensive evaluation procedures of Title III;
Assures that the Committees of the Congress will have a direct role in shaping the schedule and scope of the reauthorization requirements.
Title II.—Directs the General Accounting Office with input from the authorizing committees and the Congressional Budget Office to compile an inventory of Federal programs prior to the beginning of the first review cycle;
Requires the General Accounting Office to update on a regular basis its inventory of programs to take into account action taken by Congress in reauthorizing or terminating programs under the S. 2 process. The update shall include changes in the fiscal status of the programs as provided by the Congressional Budget Office;
Title III.—Establishes a procedure for the Senate and House to decide upon a selected number of program areas, from among those scheduled for termination in a particular Congress, which will be the subject of in-depth evaluations;
Requires the President to submit to the Congress and the various congressional sup-port agencies to submit to the Congress suggestion for those programs which should be the focus of congressional evaluation;
Requires the President to submit to the Congress his own evaluation of those pro-grams chosen by the Congress for in-depth review:
Sets out guidelines for committees to follow in conducting their evaluation of selected programs.
Title IV.—Establishes a blue-ribbon commission for the purpose of studying the efficiency, and effectiveness of government at all levels and for assisting in the implementation of the S. 2 process;
Title V.—Provides for a privileged "current services reauthorization bill" to extend the life of a program for up to two years at existing budget levels in the event that its reauthorization is prevented due to a filibuster or other delaying tactic;
Provides for the submission, at the request of a committee of the Congress, of agency budget requests and materials supporting those requests at any time following the submission of the President's budget to the Congress;
THE CASE FOR A FEDERAL SUNSET LAW
S. 2. the federal sunset bill would require reauthorization of virtually all federal programs according to a regular, systematic schedule and reconsideration of all programs of similar purpose at the same time.
The principal purpose of S. 2 is to establish a systematic and orderly procedure to require Congress to reconsider its past program enactments so that it can have increased options available in the future for allocating federal resources and establishing federal policies to meet changing national needs.
In short, S. 2 is intended to establish a procedure to guard against tying the hands of each succeeding Congress by the actions of earlier Congresses.
The sunset concept is rooted in the role of Congress as the legislative branch of the national government. As the national legislature, Congress should make positive decisions with regard to the programs and policies of the government.
That is all sunset mandates. It requires that the Congress take positive action to reauthorize the programs which it wishes to continue. Its thrust is reconsideration, not reevaluation. It does not require Congress to embark on a wholesale evaluation of all programs scheduled for reauthorization, though Congress may want to undertake such an evaluation of some of those programs. Thus, the mere establishment of a procedure for the evaluation of government programs would not achieve the principal purpose of sunset.
There are a number of reasons why Congress needs a process like sunset if it is to have necessary flexibility to establish and adjust national policy in the future:
First, the policymaking flexibility of the Congress has already been reduced substantially in recent years by a number of factors, including inflation, rising uncontrollable spending, and increased tax expenditures.
Second, the nation has paid a high price — in the form of a complex, overlapping, duplicative, uncoordinated, and too often ineffective and wasteful array of federal programs — for the failure of Congress to consider and reconsider programs in a rational and comprehensive manner.
Third, in the foreseeable future the combination of limited federal resources and pressing national needs is likely to force Congress to make complex and difficult programmatic choices that it should make in an orderly and systematic manner.
Fourth. with the national economy improving rapidly inflation will not be controlled if the large budget deficits resulting from excessive federal spending and tax expenditures continue.
Inflation erodes congressional flexibility. Inflation affects the federal budget just as it does the family budget.
In times of high inflation, the government must spend more each year just to finance existing service levels. As a result, during such periods, increases in federal spending actually may result more from inflation than in decisions of the Congress to spend more.
The last four years have been a case in point. Since fiscal 1975, federal spending has increased by $172.7 billion. However. $118 billion of that increase — 68% — is a result of inflation. In other words, just to carry on the same level of government activity in fiscal 1979 as was being carried on in fiscal 1975 will cost $118 billion more.
What that means is that more than two-thirds of the increase in federal spending since fiscal 1975 has resulted not from Congressional decisions but rather from inflation.
Uncontrollable spending
Just as inflation limits the room with which Congress has to work in adjusting national priorities through the budget, so too does uncontrollable spending.
Uncontrollable spending is spending over which Congress has no control during a particular fiscal year, unless it amends a law already on the books. That spending results from choices made in prior years by previous Congresses which tie the hands of future Congresses.
About three-quarters of that uncontrollable spending is mandated under permanently enacted programs which do not come up for regular consideration by the Congress. The remaining uncontrollable spending results from contracts and obligations the government has made in prior years. Uncontrollable spending is, in other words, largely self-perpetuating
In recent years, the percentage of uncontrollable spending in the budget has skyrocketed. In 1962, the combined total of permanent programs and trust fund spending, roughly equivalent to today's definition of uncontrollable spending, constituted over 30% of the federal budget.
By 1967, uncontrollable spending had risen to 59% of the budget. Today that figure is close to three-quarters of all federal spending — a percentage that has remained reasonably stable since the Congressional Budget process began operating.
In the last 10 years alone uncontrollable spending has grown by 150%, far faster than the budget as a whole (120%). Controllable spending, on the other hand, has grown only by 60%.
Discretionary spending thus has not kept up with federal spending as a whole. True, we are spending, twice as many "controllable dollars" now as ten years ago, but in terms of the overall budget, those dollars are less significant today, by almost one-third.
For fiscal year 1979, it is expected that only about one-quarter of all federal spending will fall into the relatively controllable category. Indeed, of the $40 billion increase proposed in the President's budget over last year's spending total, only $2.5 billion was available for all controllable domestic needs.
With nearly three-quarters of the budget in the uncontrollable category from year to year we are talking about setting, adapting and molding national priorities from a pool of only 25% of what we spend. Congressional power to control national priorities through the constitutional power of the purse is thus eroded by legislative commitments made in the past and now set more or less in concrete.
Tax expenditures
There is another kind of uncontrollable spending which is growing rapidly and reducing congressional flexibility to set policy. Yet that kind of uncontrollable spending is largely overlooked in budget discussions.
That uncontrollable spending comes through the tax code in the form of tax expenditures.
Tax expenditures are incentives provided through the Internal Revenue Code for certain kinds of private activities or to aid taxpayers in certain circumstances. These incentives can take the form of tax credits, tax deductions, exclusion from income, tax deferral, or special rates of tax. They are functionally the equivalent of direct spending programs in that the money lost through tax expenditures is not available for other federal programs. They are the operational equivalent of entitlement programs in that persons and corporations that meet certain criteria automatically qualify.
The tuition tax credit passed by the House of Representatives recently is an excellent example of a tax expenditure. If that credit becomes law, every taxpayer who used it would, in effect, receive a government subsidy toward the cost of tuition. But that subsidy would come as a reduction in income taxes rather than as a direct payment as it would under a direct spending program. In either case, the cost to the government and the benefit to the individual would be the same.
Currently, there are 85 tax expenditures — 75 of which are permanent and do not require periodic reconsideration by the Congress. So, in a sense, 75 of the 85 tax expenditures are uncontrollable.
Since 1975, the growth of tax expenditures has paralleled the growth in spending. Tax expenditures have increased by 53% in the past 4 years. In 1975 tax expenditures cost the budget $88.8 billion dollars. For fiscal 1979, they are projected to cost $136.2 billion.
Just as in the case of uncontrollable direct spending each time a permanent tax expenditure increases in cost, it reduces the flexibility of the Congress to set policy. For each increase in the cost of the tax expenditure reduces the revenue available to Congress in setting national priorities and policies.
The need for an orderly and systematic reconsideration of programs
To be sure today many programs — in particular, many domestic assistance programs — operate under short term authorizations. Those programs, under current law, terminate when their authorization expires unless Congress reauthorizes them.
These programs are reconsidered by the Congress — though in a helter-skelter fashion. And the complex maze of government activity that has resulted argues strongly for the establishment of the orderly and systematic reconsideration procedure that sunset promises.
Today, no one really knows how many federal programs are on the books. In fact, the CBO is just finishing the first comprehensive inventory of federal programs ever compiled. Up to now, the principal source of information about government programs has been the Catalog of Federal Domestic Assistance. And the picture it has presented has been a complex and confusing system.
The 1977 Catalog lists 1086 programs administered by 56 federal agencies. In fiscal year 1978 these programs provided an estimated $80.0 billion to the 50 states and nearly 80,000 units of local government, for a total of almost 23 percent of federal domestic outlays and an estimated 27.5 percent of all state and local government expenditures.
It lists education, health, and community development programs in the hundreds — veterans and transportation programs in the dozens. There are over 100 different agencies and offices with regulatory responsibilities. And 22 separate entities run health programs.
As the program category is narrowed, the number of programs is no less bewildering. The 1977 Federal Catalog lists 38 different programs under the veterans category, with another 20 under the heading Veterans Medical Facilities and Services. Under the category of Vocational Education, there are 24 different programs listed. The reader is referred to the Job Training Subcategory of the Employment, Labor and Training Category for other programs in this area. Under the heading of Transportation, there are 43 separate entries.
These numbers suggest a government so fragmented and uncoordinated that it cannot do the job.
A few years ago, a GAO study on health services in outpatient health centers in the District of Columbia, found seven different programs — administered by HEW and OEO. Coordination was so lacking, the GAO found, that one neighborhood had eight clinics, several of which were badly underutilized.
Another GAO study of the use of military maintenance facilities found extensive duplication and under-utilization of these facilities because of the emphasis each service placed on developing its own facilities rather than sharing existing facilities of other services. The study concluded that substantial long range savings could be realized through greater interservice maintenance, but that despite repeated encouragement from the Department of Defense, the individual services had continued to circumvent both the spirit and intent of such policy.
An HEW study found over 50 federal programs providing some type of service to handicapped youth. Most of these programs were administered by HEW — by 14 separate units within that department. A GAO study of the HEW study found no point within HEW at which all these efforts were coordinated.
Finally, a study by the JEC found 62 separate programs involved in providing aid to the needy and social insurance at a projected cost in fiscal year 1975 of $142 billion.
In sum, over the last fifteen years, Congress has created an array of programs so complex government cannot deliver the services Congress enacts into law. That is a Congressionally created problem which demands a Congressional response. And sunset offers such a response — a process for systematically considering and reconsidering similar programs at the same time.
Tough choices in the future
If one thing is clear, it is that over the next few years, Congress will have to make a number of tough spending and tax decisions if it is to move toward a balanced budget in the early 1980's and avoid a resurgence of inflation.
A number of recent analyses have made this clear. A recently released Brookings Institution study concluded for example: "Although receipts will rise more than $80 billion a year during 1981-83, there will not be much left for new programs or for further tax cuts. By 1983, if outlays are held to 21 percent of the gross national product, they would be $722 billion. And under the President's tax program, receipts would be $747 billion, leaving a margin of $25 billion — enough for only small reductions in taxes. For example, assuming the 1978 tax cut equals $25 billion, the 1981 margin could be used to reverse the 1977 payroll tax increases but for little else. Even if the entire margin were used to reduce the income taxes of individuals, the individual income tax would still be over 11.5 percent of personal income, nearly the highest since the end of the Second World War ...
"The budget outlook is therefore not rosy. It will be difficult to keep outlays to 21 percent of the gross national product in 1883. But given success in reaching that goal, the margin for tax reductions (beyond those proposed for this year) would be slim. Since a budget deficit is dangerous during full employment, the cautious approach is to avoid more outlays or lower taxes than the President proposes. Any significant tax reduction in the early 1980's would require either substantial spending cuts or large deficits, which might be extremely inflationary in the economy projected for those years."
The report by the Senate Budget Committee accompanying the First Concurrent Resolution on the Budget dramatizes the kind of choices Congress will have to make over the next several years even more clearly. The Senate Budget Committee asked the other committees of the Senate to give them an idea of the new program initiatives they foresee Congress having to decide upon
during the period between 1980 and 1983.
The Budget Committee report listed 31 such new initiatives which could cost as much as $416 billion between 1980 and 1983. According to the CBO, there will be about $120 billion in revenues available to pay for those new initiatives.
Inflation and the deficit
During the past three years, when we have run high deficits, those deficits have had little inflationary impact. This was because our economy was running so far below capacity.
But that will no longer be the case. With our economy recovering, large budget deficits threaten to fuel inflation. So getting control of the federal budget will be critical in the government's effort to fight inflation.
What that means is that over the next few years — or as long as inflation poses a threat — Congress is going to have to make very hard choices. If we want to spend more money on a good program, we will have to throw out a bad one. The sunset process could make it possible for Congress to make those tough decisions in a systematic, orderly, way.
QUESTIONS AND ANSWERS ABOVE SUNSET
What is sunset?
Sunset is a procedure under which governmental programs come to an end unless they have been specifically reauthorized by the legislative body, in this case the Congress.
The specific sunset mechanism can be written in any number of ways. In S. 2, it takes the form of a ban on outlays for any program not reenacted by the scheduled reauthorization date for that program. In this regard, the S. 2 sunset mechanism is little different from the regular reauthorization process practiced hundreds of times each year by Congress for programs with short-term authorizations. Thus, sunset is not a new process. It is new only in that S. 2 would apply the reauthorization process to now permanent programs.
Isn't the main purpose of sunset to improve Congressional evaluation of programs?
No. The main purpose of sunset is to give Congress a procedure for reconsidering all past legislative commitments, in an orderly and rational way.
In any given year, Congress will evaluate in depth certain programs and routinely reauthorize others. Sunset does not propose to shift this distribution of emphasis in any way. Sunset would require Congress to reconsider all like programs at the same time — something the Congress does not do now. But S. 2 would leave discretion with the authorizing committees to determine which programs would receive in-depth evaluation and which would not.
A principal factor in the origin of the sunset legislation was the proliferation of single-purpose programs which constitute the bulk of Federal programs. While most of these programs are reauthorized regularly, they are done so one at a time, with the result that Congress seldom has a perspective on the entire Federal effort in one programmatic area. The schedule set out in S. 2 would provide Congress with this kind of perspective.
The principal sponsors of S. 2 believe that improved program oversight is an important goal. But they also believe that oversight cannot be truly effective unless it is more comprehensive in scope — much as a doctor cannot evaluate the effectiveness of a single treatment if he is using several different treatments at the same time.
Sunset may be intended to force Congress to reconsider its past programs enactments, but is termination really necessary?
Yes. In the first place, Congress has passed legislation in the past designed to encourage improved Congressional oversight. Title VI of the Intergovernmental Cooperation Act required authorizing committees to evaluate permanent programs every four years. But that law has no action-forcing mechanism and, as a result, its requirements have never been observed.
The termination mechanism in S. 2 is necessary to ensure that reconsideration of programs will take place. It is. not a draconian measure. But a great number of Federal programs operate on a short term today. They face the threat of termination every time their reauthorization comes up. Judging from the fact that no programs ever seem to die, termination, while it does force action, does not seem too much of a threat.
Shouldn't Congress test something as radical as termination before it applies it to virtually every program?
Congress already has tested the termination mechanism. Indeed, it does so hundreds of times each year — every time a program comes up for reauthorization.
The sunset bill would simply extend this tried and true reauthorization process to permanent programs as well.
Even if reauthorization of all programs is useful, why is it necessary to schedule reauthorizations by budget function?
Today, there are about 1,000 different Federal programs. Most of these programs are reviewed on a regular basis. But they are usually done so one program at a time. What with different expiration dates, and overlapping agency and committee jurisdictions, Congress has no opportunity to examine all health programs, for example, at the same time. Thus Congress is expected to pass judgment on one piece of a very complex puzzle without knowing how that piece fits into the puzzle as a whole.
Over the years, GAO has done a number of studies of conflicting and overlapping Federal programs. One of the best involved a study of outpatient health care facilities in the District of Columbia. GAO found, in 1975, that so many Federal agencies and programs were involved that no one knew what anyone else was doing. One result was that in a single neighborhood, there were 8 different clinics. In several of these clinics, doctors were seeing as few as four or five patients a day.
One of the fundamental premises of the sunset bill is that Congress, if required to look at all like programs at the same time, would be able to eliminate such instances where gross waste of budget resources occurs.
Doesn't S. 2 establish a presumption against continuation of a program?
No more so than the regular reauthorization process does for current short-term programs.
More philosophically, S. 2 is basically a hopeful piece of legislation. Its purpose, over the long haul, is to free up resources not now being used effectively so that these resources can be directed to changing national needs. The bill was born not out of concern that government is too big, but out of a sense that government has many important jobs to do, and right now it is not doing them well enough, Toward this end, S. 2 does establish a presumption against reauthorization of programs which are not working well.
Isn't it premature to jump into sunset if we don't even know how many programs there are?
We do know the universe of Federal programs. Lists have been prepared by both GAO and CBO.
We do not know the number of pieces into which that universe will be divided. For example, the Elementary and Secondary Education Act can be considered as several programs, title by title, or as one program.
However, the subdivision of Federal programs is not important as far as the purposes of sunset are concerned. It is important only to the authorizing committees in their determination of priorities for program review.
With automatic termination, shouldn't there be a phase-out for programs Congress doesn't reauthorize?
Not necessarily. Currently, when an authorization for a program is not renewed, it simply ends. There is no requirement for a special phase down period.
Presumably, should any committee decide not to reauthorize a specific program, it would also make provision for phasing that program out. S. 2 does not include such provisions. because of the difficulty of prescribing one general rule for all the different contingencies which might occur.
Are budget functions really the best groupings for program review and reconsideration?
At this time, yes, They are not perfect. But they are better than any other possible grouping we now have. S. 2 does include provision for amending budget functions as improvements in them are made.
Would sunset cause increased uncertainty among state and local governments?
This is unlikely, since the vast majority of aid programs for state and local governments are already short-term in nature. General revenue sharing, CETA, community development, waste treatment grants — these are just a few of the largest grant-in-aid programs which must face regular reauthorization under current practice.
How does S. 2 differentiate between reconsideration and evaluation?
S. 2 treats these two different concepts in two different ways. Title III sets out a procedure for selecting a few programs each year for in-depth evaluation by Congress and the agencies. Title I of S. 2 will amend it forcing Congressional reconsideration of and recommitment to any program before it can continue beyond the termination date.
The term "evaluation" implies in depth scrutiny. It is not a function to which the legislature is particularly suited. The resources required to do an evaluation will make it more of an executive branch function. Congress is simply not equipped to evaluate more than a handful of programs each year.
In contrast, Congress now reconsiders and reauthorizes hundreds of programs each year. A basic purpose of S. 2 is to make this reconsideration process more orderly — by grouping like programs together — and more comprehensive — by including now permanent programs in the schedule for review.
Won't S. 2 impose an impossible workload on Congress?
The workload question is the single most difficult issue posed by S. 2. In the narrowest sense, the only net increase in workload will result from the addition of a number of permanent programs to those now already reviewed from time to time.
In reality, S. 2 may very well impose an additional workload on congressional committees. However, the legislation has been written to provide every possible discretion to committees in setting their own workload within a set schedule. Moreover, there are ample safeguards in the bill as written to allow for changes in the schedule where workload burdens are found to be excessive.
What kind of additional staff resources will be required to carry out the provisions of S. 2?
Estimates of the extra staff requirements vary considerably. No one can say for sure what those requirements will be.
Again, it has to be noted that the only net increase in workload imposed by S. 2 is the addition of permanent programs to the list of those already reconsidered from time to time. To be sure, many permanent programs are also major programs. But even here, the extra staff requirements will be determined in large part by the priority that a committee gives to review of any one program. If Medicaid is slotted for major evaluation, extra staff will be required. If only routine review is contemplated, extra staff may not be needed.
Wouldn't S. 2 alter the balance between Congress and the President by giving the President power to kill a program by veto?
The President already has veto power over those Federal programs that are reauthorized from time to time. He also has veto power over appropriations measures which contain funding for some permanent programs.
More important, however, S. 2 assumes that the goal of improving congressional control over Federal spending outweighs concerns of presidential personalities.
A major concern behind S. 2 is that Congress is abdicating its power of the purse today by failing to articulate national policy through the budget in a rational and orderly way. To a very great degree, the budget now runs itself. For Congress to dig in its heels and refuse to improve its performance will only perpetuate an existing imbalance between Congress and the President where budget matters are concerned.
Doesn't S. 2 threaten the progress made over the years in such areas as civil rights?
No. In response to repeatedly expressed concerns over the protection of basic civil rights, the Governmental Affairs Committee amended S. 2 to exempt from reauthorization requirements of the bill those activities which have as their objective the protection of civil rights guaranteed by the Constitution.
Under S. 2, what would prevent a minority of Senators from filibustering a program to death?
S. 2 is not intended to suggest or promote the widespread termination of programs by Congress. The termination provision of the bill is intended only as a means of forcing Congress to make a decision regarding the future of individual programs.
Therefore. S. 2 contains a specific provision to protect against the possibility of inadvertent termination. That provision allows for privileged consideration of a so-called "sunset reauthorization bill" extending funding for a program, at its current appropriation level, for anywhere from one year to the length of the entire review cycle. Such a bill would be in order at any time after a bill reported by a committee to reauthorize a program had been debated for 50 hours. S. 2 also contains a provision for discharging legislation from an authorizing committee.
Wouldn't S. 2, in effect, force Congress to reenact the entire U.S. code every ten years?
S. 2 does not terminate any provisions of law. Therefore, it would not require Congress to reenact the entire U.S. code every ten years.
The termination mechanism of S. 2 has been chosen carefully to avoid the termination of specific provisions of law. That mechanism involves nothing more than a ban on outlays for any program not reauthorized by Congress in accordance with the review schedule.
Is the S. 2 process workable?
It seems fair to assume that if Congress can reauthorize hundreds of programs each year in a disorderly way, that it can also reauthorize all these programs in an orderly way.
Moreover, S. 2 includes ample provisions for changing the review schedule should it threaten to become unworkable at any point..