July 27, 1979
Page 21093
Mr. PROXMIRE. Mr. President, I yield such time as the Senator from Maine may require.
The PRESIDING OFFICER. The Senator from Maine.
Mr. MUSKIE. Mr. President, I rise not so much to discuss the merits of this particular program as to remind the Senate that the budget implications have changed since I discussed the subject earlier today. We have already added to this bill $700 million in budget authority and outlays by restoring the full amount of revenue sharing to the States.
Now, that revenue sharing program happens to be a program which I support. As a matter of fact, I think I introduced perhaps the first revenue sharing bill ever introduced in the Senate, and conducted the first hearings in the Government Operations Committee. Yet I supported the amendment of the Senator from Wisconsin holding the amount for that program to the amount approved by the committee because this bill as it came to the floor, together with later requirements in these areas, threatened, and indeed, inevitably breached the budget targets.
Now we have added that $700 million and the numbers now are $1.6 billion in budget authority over the 302(b) allocation when you take into account later requirements, and $1.3 billion in outlays.
Mr. President, we started out this year with a program of fiscal restraint because we all believed, I thought, that inflation was the No. 1 problem facing the country.
Well, at the beginning of this fiscal year the annual rate of inflation was 9 percent. It is now between 13 and 14 percent. Has inflation become less important? And yet what we have already done prior to action on this bill threatens to breach the budget targets by $6 billion in budget authority and $5 billion in outlays independent of this bill — independent of this bill, let me repeat.
I was assured that when I raised this specter at the time we debated the first three appropriation bills it would be taken care of, it would be taken care of before the appropriations process was over.
Now, the District of Columbia appropriations bill, which we acted on a little while ago, is the only one that has not added to the problem, and I do not see any prospect that any of the remaining appropriation bills will alleviate the problem. So you cannot dodge the problem by saying, "Well, I will vote for this bill because I will take care of it later." It will not be taken care of later.
If the Senate votes for this bill with full knowledge of what I have just said, that is the Senate's prerogative. But I want to make it as clear as I can that this is the consequence, the budgetary consequence.
In addition, may I point out to my colleagues we are going into a markup on the second budget resolution next week. CBO reestimates — those reestimates are related to actual experience since the May 15 budget resolution — plus the worsening economic picture, show that we will go up by possibly $9 billion in outlays independent of what we do on the appropriation bills.
So what we are looking at when the second budget resolution is marked up by the Budget Committee is a deficit at least at the $35 billion figure, and probably higher, and when we passed the first budget resolution we reported a deficit of $23 billion.
If the Senate wants that, if that is the price the Senate is willing to pay, in order to follow its heart; to follow the pressures, to respond to the appeals, that is the Senate's prerogative. But I do not want somebody, I do not want any Senator, not a single one, coming up to me after we report the second budget resolution and saying to me, "Senator, why did you let that deficit climb from $23 billion to $35 billion or more?"
If that is what I am forced to do, because of the actions of this body and the other body in the meantime, I will do it, because that is my job. But I will not accept full responsibility for it, and I am going to share that responsibility with my colleagues by reminding them of what the computers show is the result, the potential result, of what we are doing on these appropriation bills, and of the deteriorating economy.
I like these housing programs, as the floor manager knows. I served with him on the Banking, Housing and Urban Affairs Committee when it was known as the Banking and Housing Committee, indeed when it was known as the Banking and Currency Committee, and I got involved deeply in these housing programs, and they helped my State. This amendment will hurt my State, but I do not know how you make cuts in any area of the budget with programs that are worthwhile without hurting somebody. There is not any way.
So either we stick to our fiscal policy of budgetary restraint or we abandon it, and once we abandon it, why then, Mr. President, should I not be able to restore the $400 million in waste treatment funds that this bill cuts from a program that had already been cut by $1.2 billion out of $5 billion? I accepted the cut to $3.8 billion without a murmur, in the name of budget austerity. Now it has been cut by $400 million more, and again I accepted it in the name of budget austerity.
If that same philosophy is not going to inhibit and restrain other programs, then I will be tempted to come back and start fighting for a restoration of those funds, and then where will we be? We will be the Senate of the pre-budget process days, each of us voting for every goody that comes along, keeping a mental budget in our minds with the determination somewhere down the line to vote for cuts that we can then justify to our constituents as representing budget prudence.
It did not work then, and it will not work now, and that is the sum and substance of it.
Mr. CHILES. Mr. President, will the Senator yield?
Mr. PROXMIRE, Mr. President, before the Senator yields, may I ask for the yeas and nays on this amendment?
The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient second.
The yeas and nays were ordered.
Mr. PROXMIRE. I yield 2 minutes to the Senator from Maine for the purpose of a colloquy.
Mr. CHILES. I just want to ask the Senator, I continue to hear people characterize what we have done in the Budget Committee figures that we had and what now is proposed in this amendment as being a cut in housing. You know, I think it is very hard to sort of get that across, but I note that we are talking about 286,000 units in our Budget Committee figures. This would be in addition to the 898,000 units that are already being assisted. Therefore, we are talking about from our budget resolution of a 32-percent increase in the number of households to be assisted under section 8, and a 32-percent increase at a time when we are talking about austerity, at a time when we are talking about how we can kind of hold the line, and at the same time we are talking about cash outlays to be upped 23 percent over 1979.
We talked about inflation or we put in a figure of 8 percent; we talked about real growth on top of that of 1 percent for programs, which would be 9 percent. Here we have a program that under our Budget Committee figures would be a 23-percent increase in cash, a 32-percent increase in assisted families, and yet we are sort of combatting what goes out saying this is a cut, this is a slash, we are cutting back on the housing programs, and again at a time where we are just trying to hold the line during a period of time where we are saying these units, not having been taken up, that we have a pipeline full.
This is one area that we do not cut. We are adding this amount, and it should be sufficient to add, and yet we are told it is not enough, that they have to have additional amounts of money. I just do not understand it.
Mr. MUSKIE. Mr. President, the Senator's statement illustrates a very frustrating fact. The fact is that the budget as a whole does not represent a cut. It represents a smaller increase than at any time, I think, overall, since the budget process came into being. But that was because the Senate mandated us to produce a balanced budget.
Mr. CHILES. Right.
Mr. MUSKIE. In 1981 if possible, and by 1982 at the latest, the Senate mandated a balanced budget, and in order to get it, you have to start by deescalating, not rolling back but deescalating the amounts of increases.
That is what we did. We did not put any cuts in here, or any slashes. The growth may not be as much as some Senators would like, but it is certainly not a cut.
Mr. PROXMIRE. Mr. President, I very much appreciate this colloquy. I think the Senator from Maine has told us exactly the correct story. The fact is that we are over the budget resolution by $6 billion in outlays, and this bill makes a colossal increase in that it is $1.6 billion over the budget resolution in budget authority and $1.3 billion over this resolution in outlays.
The Senator from Florida made the excellent point that the level recommended in the budget resolution for assisted housing is not a cut but an increase. Outlays are going up by 23 percent. Twenty-three percent. How can you say a proposal is unfair, is cutting back, is hurting housing, when it allows an increase of 23 percent?
The fact is that we have before us a 6-months inflation figure that is the worst since 1951, and 1951 was a war year. We were in the middle of the Korean war the last time we had the current rate of inflation. We have never had such inflation in peacetime, and we have to recognize that if we are going to do anything about it, we have to start right now.
Mr. MATHIAS. Mr. President, I take a somewhat different view of the answersto the Senator from Florida's questions.
The fiscal 1981 request actually reflects a net reduction when the prior year carryover is taken into account. From fiscal year 1979, approximately $34.2 billion will be available for new authority from prior years. In 1980, the comparable amount is $26.9 billion. I think the distinguished chairman of the Budget Committee will understand the impact of those figures.
Again let me address myself to the Senator from Florida's question. The committee bill is already one-fourth less than HUD's 1979 request. We are going downhill. We have already cut this program. The arguments of the Senator from Maine are very forceful, telling arguments, but we have already followedhis advice. We reduced the units from 300,000 to 265,000. We did that in the authorization; we cut that. Now we are going to make a cut on top of a cut, and add, on top of a 15-percent cut, another 6- or 7-percent cut.
And who are the people who are being cut? The poor people of America, who need to have housing units.
I think we have to consider all of the elements that create inflation.
Mr. WILLIAMS. Mr. President, may I just ask the Senator a question?
Mr. MATHIAS. I yield to the distinguished Senator from New Jersey.
Mr. WILLIAMS. All of you — the Senator from Maine was honest, as always, when he said he is not going to deal with the merits here, but only the budget figures.
Mr. MATHIAS. That is right.
Mr. WILLIAMS. It is almost like with blinders on, looking only at the Budget Committee numbers, the columns of figures. He is giving us these
Mr. MATHIAS. But they do it in the interest of fighting inflation.
Mr. WILLIAMS. If we do not get some rental housing out there for poor people, the supply is going down—
Mr. MATHIAS. And rents are going up.
Mr. WILLIAMS. And rents are going up; and if that is not inflation, I do not know what is. That is not the kind that is an academic exercise, out of a big volume of numbers in a book. These are
poor people. The rents go up and up. People with 25 percent of their income already going for rent. That is hitting people with the worst kind of inflation.
Mr. MATHIAS. And hitting people where they are hurt the worst.
Mr. President, I ask unanimous consent to have printed in the RECORD a factsheet on housing assistance payments provided in comparison with the need.
There being no objection, the fact sheet was ordered to be printed in the RECORD, as follows:
FACT SHEET FY 1980 HOUSING ASSISTANCE PAYMENTS
Senate Appropriations Committee request level: $1.140 billion.
The entire HUD/Independent Agencies appropriations bill is: $44 million under the first concurrent budget resolution; $1.594 billion under the President'srequest; $607 million under the House appropriations level.
Low and moderate income households to be assisted by Sec. 8 in fiscal year 80: 265,000 households (C.B.O. estimate).
A sum of $1.140 billion includes: 6,000 units of Indian housing construction; 50,000 public housing units.
Estimated need: 670,000 units per yr. for next 10 years, low and moderate income families (C.R.S. estimate).
Who program serves: the poor, the senior citizen, those earning less than $4,500 per year (C.B.O. estimate).
Declining rental -housing stock: an estimated 420,000 units are lost from the rental stock each year due to: razings, abandonment, and condominium conversions.
Private sector is no longer building rental housing because of limited return on investment, threat of rent control, more lucrative investments.
Vacancy rates in rental housing are at their lowest level since World War II. Apartments for rent are almost impossible to find in many metropolitan areas.
NOTE.—This is the lowest assisted housing request level by HUD since 1970, with the exception of the "housing freeze" year of 1973.
Mr. MATHIAS. I yield the remainder of my time to the Senator from Minnesota (Mr. DURENBERGER) .
Mr. DURENBERGER. Mr. President, I join the Senator from New Jersey and the Senator from Maryland in insisting that we not look at this in terms of budgetary figures, but in terms of the inflation that the gentlemen on the other side of the aisle are fighting to protect us from. I am going to give you a few statistics from a State that is probably rarely looked at as a very impoverished State.
Two weeks ago, the Senate reduced the funding for assisted housing from 300,000 units to 266,000 units. Now, we in the Senate are being asked to make further reductions in the section 8 assistance level. These additional cuts would have the effect of reducing the total units for assisted housing to about 255,000.
I opposed the earlier budget reduction and I am adamantly opposed to the cut in funding proposed today.
Adequate and affordable housing is essential to the welfare of all people. Yet, the housing assistance program has come under repeated attack and has borne more than a fair share of budget reductions. We cannot, in good conscience, accept further cuts at a time when there are increasing housing needs and extremely low vacancy rates.
The proposal before us today will have the effect in Minnesota of knocking out an estimated additional. 150 housing starts. In addition to the previous cuts, today's measure would eliminate 400 new and badly needed units in my State.
In the Twin Cities metropolitan area, to cite but one example, there are very few vacancies for persons with low or moderate incomes. In 1973, there were 45 subsidized apartment complexes that had about 590 vacant units. In June of 1979 a survey of 82 developments indicated that there were only 23 vacant units.
In addition, the metropolitan HRA has a waiting list of over 4,000 persons needing subsidized housing. The story is much the same throughout the State. We will be fortunate if we are able to meet about 35 percent of the housing needs for low and moderate income persons.
There are no new apartment units being built to meet this need by the private sector without assistance. The section 8 new construction program has provided needed additional units and has assured adequate housing for the segment of our population in need of assistance.
The Minnesota Housing Finance Agency has been able to make the section 8 program work. Section 8 is the only program we have to meet our special housing needs. Further curtailment only serves to ignore a problem that will eventually have to be met, but at increased costs to all concerned.
Mr. President, there is no question, in the State of Minnesota, but that this cut, on top of the one we took several weeks ago, will have a substantial impact on my State.
I thank the Senator very much.
Mr. PROXMIRE. Mr. President, I yield 2 minutes to the Senator from Maine (Mr. MUSKIE) .
Mr. MUSKIE. Mr. President, I find it interesting that the Budget Committee is accused of being focused on narrow numbers, and insensitive to human needs.
I do not know what kind of mail other Senators get on this question of inflation,but that mail comes from people, and particularly from the people that the opponents of this amendment are seeking to help. Because the people most vulnerable to inflation are the poor, the working poor, senior citizens, the beneficiaries of Federal programs like food stamps, assisted housing and on down the line.
With inflation increasing at the rate that it is this year, there is no way for Government spending programs to protect them against next month's increase in inflation. I mean, the idea that somehow there is a way for Government or those of us who have political muscle in this society to protect against inflation is the most old-fashioned, outdated, unworkable idea I have ever heard.
The Budget Committee is not a narrowly focused committee. I have never had a broader education into the workings of our Government, the interrelationship of programs, the impact of agencies upon each other and upon people, than I have had in my 5 years on the Budget Committee.
Let me tell you, gentlemen, I do not know how long I will be in politics or in this body, but I am sure that I will look back upon this period, when policy makers will determine whether or not inflation will become a permanent part of our economic lifestyle, as the most critical of my public career.
I have seen from a distance what inflation does to countries, to economies, to societies, and so have all of you. And it is threatening us. An inflation rate of 13½ percent, an inflation rate that makes an interest rate of 12 percent look reasonable because the lender cannot recover the rate of inflation from his money, is not sound public policy.
What I am talking about is not that more housing is inflationary. What I am saying is that an abrupt departure from a policy of budgetary restraint will raise inflationary expectations throughout the economy, and if the Congress calls off the signals in the fight against inflation, every labor contract in this country is going to see an escalation in demands to protect not against last year's inflation but against next year's and the year after and the year following that. So you are going to have written into these contracts assured inflation for as many years into the future as the labor negotiators can persuade industry to accept in order to get the bargaining over. That is the kind of a threat we are fighting.
Let us get that threat dealt with and licked. Then we can build housing, we can build waste treatment plants, to match the need. But ignore inflation, treat it as something that somebody else has to worry about, that some other program ought to absorb rather than your particular one, Mr. President, and we are not going to lick it.
Mr. President, that is my preoccupation. I do not want to leave my kids the legacy of permanent inflation, and we are threatened with that now.