April 24, 1979
Page 8413
Mr. HARRY F. BYRD, JR. Mr. President, I have a statement I wish to make. Before doing so, I commend the Budget Committee; the chairman, the Senator from Maine (Mr. MUSKIE) , and the ranking minority member, the Senator from Oklahoma (Mr. BELLMON), for the very hard work which they and the committee have put into bringing this budget resolution to the floor. I recognize the many long hours which the committee has devoted to this matter and I think that we in the Senate are indebted to them for their diligence and their hard work on this very important matter. Before getting to the amendment, I should like to query the able chairman of the committee on several different points.
The budget resolution, as I understand it, proposes a deficit for fiscal 1980 of $29 billion in round figures.
Mr. MUSKIE. Yes, $28.8. That rounds off to $29 billion.
Mr. HARRY F. BYRD, JR. Twenty-nine billion dollars in round figures.
As I visualize the figures, that, of course, is for the unified concept; namely, the general operations of Government consolidated with the trust fund operations.
Mr. MUSKIE. That is correct.
Mr. HARRY F. BYRD, JR. What we need to do, it seems to me, for clarification is to get an understanding of the surplus in the trust funds and equate that to the deficits in the general fund, or Federal funds, operation. As I understand it, for the fiscal year 1980, under the proposed budget resolution, there will be a surplus in the trust funds of $18 billion. My question to the Senator from Maine is, is that correct?
Mr. MUSKIE. The Senator is correct.
Mr. HARRY F. BYRD, JR. In regard to the Federal funds, namely, the general operations of Government, as I understand the figures there will be a deficit, again using round figures, of $45 billion in the Federal funds budget.
Mr. MUSKIE. $44.8 billion, to be precise, but the Senator has virtually hit it on the head.
Mr. HARRY F. BYRD, JR. So, were it not for the surplus in the trust funds, the deficit of the Federal Government would be $45 billion, instead of $29 billion?
Mr. MUSKIE. In terms of Federal funds, yes. That is correct.
Mr. HARRY F. BYRD, JR. It is correct, is it not, that the trust funds were earmarked funds and can be used only for specific purposes and not for the general operation of Government?
Mr. MUSKIE. That is correct.
Mr. HARRY F. BYRD, JR. Will the Senator from Maine break down, roughly, not in exact amounts, just roughly, that $16 billion of surplus in the trust funds?
As I understand it, the largest part of that comes from the surplus in the civil service retirement fund and also from the surplus in the unemployment fund.
Mr. MUSKIE. I do not have those figures here, may I say to the Senator, but I am advised by my staff that is probably correct.
I will be glad to make sure of that this afternoon, to make sure the RECORD accurately reflects the facts.
Mr. HARRY F. BYRD, JR. I thank the Senator.
Mr. MAGNUSON. What does the Senator mean by the words "the unemployment"?
Mr. HARRY F. BYRD, JR. The taxes paid by the businesses and employers of this Nation into the unemployment trust fund.
Is that correct, may I say to the Senator from Maine?
Mr. MUSKIE. That is correct, yes.
Mr. HARRY F. BYRD, JR. So the employers of this Nation have paid into this fund huge sums which in total comprise or make up a very large surplus in the trust funds and that surplus is being used to offset the very tremendous deficit in the general operation of Government.
Mr. MUSKIE. Let me make this point. At the depth of the recession, the trust fund was depleted and unemployment compensation benefits were paid out of the General Treasury.
I do not have the numbers here, but to that extent, that trust fund was the beneficiary of general revenues from the General Treasury in order to keep it going.
The fund is now building up again. I do not have the latest figure on what it amounts to.
Mr. MAGNUSON. There are supposed to be contributions from the States on unemployment, but the States have not made their contributions. Therefore, we have dipped into the General Treasury to the extent of about $21 billion last year and I think close to $16 billion — I do not know the exact figure.
Mr. MUSKIE. That is right.
Mr. MAGNUSON. For this coming year on unemployment insurance. But this involves the States that have failed to pay into the unemployment compensation.
Mr. HARRY F. BYRD, JR. May I sayto the Senator from Washington, unfortunately we cannot settle our controversy because the figures are not at the moment available.
Mr. MUSKIE. The Senator is correct.
Mr. HARRY F. BYRD, JR. There is a surplus — and I hope someone will correct me if I misstate it — of $16 billion in the trust funds. Now, of that $16 billion, my understanding is a substantial part of that is a surplus in the unemployment fund. Another substantial part of that is a surplus paid in by the civil service employees of the Government. There is a huge surplus in that area.
Mr. MUSKIE. May I say to the Senator, we will be glad to provide these precise figures for the RECORD because the question deserves the precise figures. I just do not have them at my fingertips.
Mr. HARRY F. BYRD, JR. I am not complaining about the Senator from Maine.
Mr. MUSKIE. But I do want to say with respect to the unemployment trust fund, there are years in which that trust fund is in deficit, as it has been in the recent recession, and funds flow from the General Treasury to the Trust Fund.
So, to some extent in those years, the Federal funds deficit is attributable to the unemployment compensation program.
Mr. HARRY F. BYRD, JR. Of course,we are speaking of 1980.
Mr. MUSKIE. In 1980, that is not the case, as far as I know.
Mr. HARRY F. BYRD, JR. In 1979, the figures I have show a surplus in the trust funds of $18 billion, which is even more.
Mr. MUSKIE. That is all the trust funds.
Mr. HARRY F. BYRD, JR. That is right.
Mr. MUSKIE. Including other trust funds.
Mr. HARRY F. BYRD, JR. That is right.
Mr. MUSKIE. But the unemployment trust fund at times in the last 5 years has been in deficit and those deficits have been covered out of the General Treasury.
So all I am saying is that it is a two-way flow at times.
Mr. HARRY F. BYRD, JR. Yes.
Mr. MUSKIE. Anticipating the Senator's question from years past, I have a record here dating from 1940 of the Federal fund deficits, the trust funds — largely surpluses, although there have been deficits — and the unified budget totals — mostly deficits since 1940. I have these figures both in current dollars and in constant dollars, and I will put that in the RECORD.
I also will try to get together for the Senator another table, perhaps, that I could put in tomorrow, that more precisely answers the questions he is now putting to me.
Mr. HARRY F. BYRD, JR. The Senator from Virginia would appreciateit if the Senator from Maine would do that tomorrow — he need not do it right now — but tomorrow would break down that $16 billion surplus so the Senate may know just where those funds—
Mr. MUSKIE. I will be delighted to do it.
Mr. President, I ask unanimous consent that a table showing the composition of the deficit be printed in the RECORD.
There being no objection, the table was ordered to be printed in the RECORD, as follows:
[Table omitted]
Mr. MUSKIE. Mr. President, this table shows both the unified budget surplus or deficit — the total figure we are accustomed to dealing with in budget resolutions — and the separate surplus or deficit attributable to operations of the Federal funds and trust funds.
The table shows each surplus or deficit both in "current" dollars — that is, the figures that actually show up in the budget and in "constant" 1972 dollars. The constant dollar figures make year-to-year comparisons more meaningful.
Let me emphasize that I believe the best measure of the fiscal impact of the Federal budget is the unified budget deficit, which takes into account all revenues and spending by the Government.
If one is interested in economic impact, it does not matter whether a tax dollar is deposited in a trust fund or in the general fund of the Treasury. Likewise, it does not matter whether a dollar spent is paid out of a trust fund or out of a Federal fund appropriation. In the first instance, the Government has taken a dollar out of the economy; in the second, it has put a dollar back. The economy is indifferent to internal Government bookkeeping, and primarily responds to the difference between how much the Government takes out of the economy and how much it puts into the economy.
I would like to emphasize one other point. It is sometimes implied that the Federal funds deficit is the deficit for the general operations of the Government. This is not the case. Using the private business distinction between an "operating" budget and a "capital" — or investment — budget, upwards of $100 billion of Federal outlays in fiscal year 1980 will be of a clearly "capital" type, and the large majority of these "capital" outlays come from Federal funds. On the other hand, a substantial portion of "operating" costs are paid from trust funds.
(Mr. BAUCUS assumed the chair.)
Mr. MAGNUSON. Will the Senator yield?
Mr. MUSKIE. Yes. I yield to the distinguished Senator from Washington.
Mr. MAGNUSON. The Federal fund appropriations for unemployment benefits has been $15 billion over the last 3 years, $5 billion each year, which comes out of the Treasury.
Mr. HARRY F. BYRD, JR. May I ask the Senator from Washington then, what is the surplus in the trust funds for the unemployment?
Mr. MAGNUSON. That I do not know.I just know that $5 billion each year comes out, dips into the Treasury, because, I think, I am pretty sure I am correct, of the lack of States making their contributions to the unemployment fund. States have just given up on it. They make a token payment. They are supposed to pay 50 percent of the unemployment fund.
Mr. MUSKIE. If I may ask the Senator from Virginia a question, we have an hour for this amendment of the Senator and there is a meeting at the White House involving some Senators. I wonder if the Senator would object to completing the debate on his amendment tonight and putting the vote over to a time certain tomorrow?
Mr. HARRY F. BYRD, JR. I am wondering if the Senator from Maine would be agreeable to this; I will speak only 6 or 7 minutes and then we could have a vote tonight.
Mr. MUSKIE. Is that agreeable?
Mr. HARRY F. BYRD, JR. May I make this suggestion? A vote at 4:15. I will speak for 2 minutes. I will explain the amendment as best I can in 2 minutes.
Mr. JAVITS. May I have 1 minute?
Mr. MUSKIE. Yes.
Mr. HARRY F. BYRD, JR. I will explain as best I can in 2 minutes. Then I am willing to vote.
Mr. MUSKIE. All right.
Mr. HARRY F. BYRD, JR. This amendment would require reductions of $1.1 billion of budget authority and $400 million in outlays in function 500 — education, training, employment, and social services.
This is a precise amendment, Mr. President. This amendment being offered by the distinguished Senator from North Carolina and the Senator from Virginia is a precise amendment which was offered by the Senator from Oklahoma (Mr. BELLMON) in committee; and that amendment was voted down by one vote, by a vote of 9 to 8. So 8 members of that 17-member committee saw a lot of merit in this amendment.
Mr. President, I ask unanimous consent that the name of the Senator from South Carolina (Mr. THURMOND) be added as a cosponsor of the amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. HARRY F. BYRD, JR. Mr. President, this is a reasonable amendment. There is no reason in the world to continue these CETA funds into 1981. This proposal would phase them out in 1980, precisely as the Senator from Oklahoma (Mr. BELLMON) , the ranking Republican member of the committee, advocated in committee; and his proposal in committee received eight votes. It was defeated only by 1 vote, by a vote of 9 to 8.
I reserve the remaining 1 minute of my time.
Mr. BELLMON. Mr. President, will the Senator yield me a minute and a half?
Mr. MUSKIE. I yield.
Mr. BELLMON. Mr. President, the Senator from Virginia has stated the proposition accurately.
This is an amendment I proposed in committee, and I lost by one vote.
There were others who also proposed amendments to change the funding level for countercyclical jobs, and those amendments were well above the figure the committee finally recommended, and those amendments also were defeated.
There were few votes that better illustrate the process of balance and compromise through which the committee arrived at its recommendation than the eight votes we had on this issue.
When we sat down to mark up this resolution, no one thought we would, or could, recommend favorably a resolution that would produce a balanced budget in fiscal 1981.
Much as I regret it, I feel that I must oppose this amendment and other amendments, on many of which in committee I was not on the prevailing side, which would upset the delicate compromise that the committee finally reached which makes it possible for us to present a balanced budget for 1981.
So, while I support the idea of the Senator from Virginia, I will not be able to support this amendment on the floor but will stick with the committee position.
Mr. MUSKIE. Mr. President, I yield 1 minute to the Senator from New York.
Mr. JAVITS. Mr. President, the long and short of this is that the cities of the country have been cut very severely in everything that has been done in this budget resolution — in housing, in jobs, in countercyclical aid. In everything that affects the cities, there have been drastic cuts.
The Budget Committee already has cut the President's budget 50 percent on this item — from 200,000 jobs to 100,000 jobs — and they have cut it by $700 million. It seems to me that all this does is to seek to cut people who already have been cut to the bone even deeper than that.
Almost half of the prime sponsors in CETA today, about 180, still have 6.5 percent unemployment in their communities. Many cities like my own have unemployment of 8 and 9 percent and more. This is an infinitesimal effort to help those areas with persistent and deep unemployment.
I think it is elementary justice and basic non-discrimination to leave this in the bill, as I hope the Senate will.
Mr. MUSKIE. Mr. President, the Budget Committee has voted — and this budget reflects it — to phase down CETA title IV, countercyclical jobs, by the end of 1981. The Byrd amendment would accelerate that phasedown by 1 year. The committee felt, on the whole, that that would throw too many people out of jobs and create the kind of disruption we should avoid. The committee estimates that CETA will employ 343,000 individuals at the end of this year. The Congressional Budget Office reports that the only way we can be sure of not laying off CETA employees is to provide for an 18-month phasedown, since 18 months is the new maximum length of a CETA job.
So, all we are talking about is 1 additional year of phasedown, and I think that was a reasonable position for the committee to take, in light of the conditions the Senator from New York has described so eloquently.
Mr. HARRY F. BYRD, JR. Mr. President, 8 of the 17 members of the committee thought this was an appropriate amendment. It is an appropriate amendment. We cannot continue the CETA program indefinitely. The Senator from New York says it is infinitesimal. I say that $1.1 billion is not infinitesimal.
This is a chance for the Senate to go on record as making a reduction in these fantastic spending programs.
Mr. President, I ask for the yeas and nays on the amendment.