April 25, 1979
Page 8552
Mr. MUSKIE. Mr. President, I yield myself 10 minutes.
I ask unanimous consent that Marshall Matz and Steve Storch of the Agricultural Committee staff be granted the privileges of the floor during the consideration and vote on the pending amendment.
The ACTING PRESIDENT pro tempore. Without objection, it is so ordered.
Mr. MUSKIE. Mr. President, I have listened with a great deal of interest to the remarks of the distinguished Senator from Indiana. I was struck by his emphasis on the fact that what we are dealing with here is only estimates. Well, that is what the entire budget resolution deals with, estimates — budget estimates which we receive from the President and evaluate; estimates which we receive from the authorizing committees, including the Agricultural Committee, of which the Senator is a member; estimates of the Appropriations Committee. What else can one do when one is building budgets for 3 years into the future except estimate what Government activities are going to cost?
If that is an argument against a particular program such as this one, it is an argument against the whole budget process. We must instead find some precise and guaranteed way, according to the argument of the Senator from Indiana, to nail down the precise dollar costs of every activity in the Federal Government, whatever the economic conditions may be, for the next 3 years.
I have not heard the Senator suggest any way in which that can be done.
Mr. President, describing this budget as made up of estimates is something different than saying there is no evidence upon which the Budget Committee based its estimates. Let me emphasize again that we based our estimates on the information and recommendations that we received from the sources which I have described.
Mr. President, yesterday we considered two amendments which would have substantially reduced the defense function. Those proposals to reduce spending in defense were overwhelmingly rejected, notwithstanding a rather widespread feeling in the Congress and in this body that defense is being treated more favorably than other programs.
One of those amendments was a so-called transfer amendment, to transfer funds from defense to so-called social and human programs. That was rejected overwhelmingly.
Now it is proposed we go the other way and drastically cut — and I will describe it as — a program to deal with the poor. The Senator from Indiana has described food stamp participants as having an average income of $3,600 a year. May I add a statistic to that? Food costs for that group of Americans amount to up to 50 percent of their budgets compared to 16 percent for Americans generally. That is the problem we are talking about.
What is responsible for the growth in the program? Elimination of the purchase requirement is one of the factors. The elimination of that program feature is bringing into the program what kind of people? The evidence is that it is bringing into the program people whose average income is about $3,600 a year.
Apparently, the Senator from Indiana feels that the new ones at that income level ought not to be made eligible for the program, and that we ought to restrict the program to those who are already benefiting at that average income.
Mr. President, the Senator and the distinguished Senator from North Carolina are members of the Committee on Agriculture. That is the committee which has the responsibility for writing legislation, eligibility requirements, and presenting its recommendations to the Senate. The Budget Committee does not do that. The Budget Committee undertakes to respond to the program as it is in the light of economic conditions, insofar as we can anticipate them, relying upon estimates from the various sources which I have identified and, adding to that, the Congressional Budget Office.
The Congressional Budget Office begins with economic assumptions. The economic assumptions which we adopted were those of the Congressional Budget Office. The Congressional Budget Office assumed unemployment of 6.7 percent in the fourth quarter of 1979, and 6.8 percent in the fourth quarter of 1980, compared to the President's assumption of 6.2 percent. Obviously, that differs and, if we are going to be intellectually honest, projects a higher potential caseload for programs such as this, so that you cannot compare the numbers in the President's budget for this program with the numbers in our program.
The fact is, Mr. President, that, using our economic assumptions, our deficit is $11 billion lower than the President's, notwithstanding our estimates for this program. So we try to be consistent in that respect. We adopt economic assumptions after reviewing all of the evidence and testimony that we get, and we get testimony from the whole spectrum of economists in this country, as well as the administration, CBO, and the Joint Economic Committee of this Congress. It is on the basis of that that we finally achieve a consensus. That is not to say that there is no disagreement. That is the underlying economic basis for the Budget Committee estimates.
If we were prudent with respect to defense expenditures, and I do not know how the Senator voted on those amendments, those cuts yesterday were overwhelmingly rejected. I suggest the Senate give us the credit for the same prudence with respect to other functions of the budget.
What are the numbers with respect to this function of the budget? Food stamps is part of function 600, which is the income security function. Our numbers are $212.4 billion in budget authority and $183.7 billion in outlays. Senator LUGAR proposes to reduce both those numbers by $1 billion, but wholly in the food stamp program. Our recommendation there is 7.2 in budget authority and 7.2 in outlays.
The Congressional Budget Office estimate was $7.55 billion. We reduced CBO's estimate, which was based on their economic assumptions, which we had adopted. We reduced their estimate by $350 million, accepting the President's proposals for efficiencies, and adding $200 million more of ours in efficiencies that we are asking the appropriate committees to help us make possible. So the $7.2billion represents a reduction in CBO's estimate of what this program would cost.
What would the Lugar amendment do? What would be its effect on the people involved? I pointed out that the number of participants is growing, in part because of the elimination of the purchase requirement. That elimination is bringing in people at the average income of $3,600, which is the average for the food stamp program as a whole. Congress can decide, if it wishes, that either the number of people whose income is only $3,600 should be reduced to what we can afford, leaving the others to shift for themselves, or we can reduce, pro rata, the amount which will be allowed for these people whose income is $3,600.
What is the average price per meal under the food stamp program? It is 33 cents. A pro rata reduction to reflect the Lugar amendment would require reducing that 33 cents by 18 percent. Eighteen percent of 33 cents is only pennies, you can say, but it is a large chunk for each recipient of this program when one considers that the average recipient whose income is $3,600 spends up to 50 percent of his income for food.
(Mr. MORGAN assumed the chair.)
Mr. MUSKIE. There is another reason, Mr. President, why this estimate has gone up. That is that the price of food has escalated, compared to what was assumed when the cap was written into law by the Committee on Agriculture. It was estimated at that time that food prices would rise 3 to 4 percent a year and that unemployment would steadily decline. What has happened? Food prices rose 20 percent in 1978 and 1979 alone — 20 percent instead of 3 to 4 percent — and the projected unemployment rate, which I have already described, is higher, or will be higher than it was when the ceiling was established in 1977.
Do we take no account, do we just blind ourselves to those facts? The Senator from Indiana talks about the Budget Committee using only estimates. We use estimates based on facts. The Senator apparently prefers to blind himself to the facts and criticize the estimates. The facts are that food prices have gone up by several times over what was estimated when the cap was set and unemployment is projected to be higher. The elimination of the purchase requirement has brought in more poor people — not rich people — into the program.
Those three factors are what are responsible for the estimate which the Budget Committee brings here, and which the Budget Committee approved 11 to 1 — a Budget Committee that is not noted as a wild, liberal, free-spending group. All you have to do is look over the membership. But the facts are the facts, and we present them.
If the Agriculture Committee decides the program costs too much, notwithstanding any reduction in the impact upon people who rely on it, that is their prerogative as the legislative committee. And if we do not want to spend the amount of money that is provided for in this budget, the Congress, of course, has the prerogative of stiffening the eligibility requirements, reducing that 33 cents per meal or just arbitrarily cutting off some poor people, if it wishes. We do not mandate that. We do not mandate that they spend what we provide. All we do is provide what the facts tell us is going to be required. If they choose not to look at those facts, that is their prerogative.
Then the Senator used the argument that correction of widespread fraud and abuse could be used to reduce the cost. I have yet to hear anybody suggest how you get at fraud and abuse except by proceeding against people guilty of fraud and abuse in this program as you do in the private sector: Turn the law loose on them. What guarantee does an aggressive law enforcement program give us as to how much money might be produced in savings in a given year? We have already assumed $350 million, in this budget, of savings from that source and from efficiencies.
In the Agriculture Committee, of which the Senator is a member, they had 8 votes out of 17 votes on retaining the cap; there is where he ought to fight the battle for changing the program. But when he comes to us and tells us that weare responsible because we have, based on the facts as we know them, made room in the budget for the operation of the program under current eligibility guidelines, and not totally at that — we have asked for efficiencies of $350 million — then he is fighting the wrong battle in the wrong place, as far as I can see.
So, Mr. President, I think the Budget Committee was responsible in bringing this estimate to the floor. I voted for this estimate. The committee voted 11 to 1 for this estimate.
The Budget Committee, in presenting tight budgets to the Senate, yesterday defended the defense program against cuts, and by God I am going to defend this program, which is addressed to the poor people of this country, against cuts.
I think we have asked all we can reasonably ask without forcing the retrenchment upon people who get 33 cents a meal, whose food costs are 50 percent of their budget, whose average income — and this figure from the Senator from Indiana coincides with the one I have — is $3,600. Mr. President, that is no place to cut.
Mr. President, I yield 10 minutes to the distinguished Senator from Kansas.
The PRESIDING OFFICER. The Senator from Kansas.
Mr. DOLE. Mr. President, I thank my distinguished former chairman for yielding.
I listened with interest to a portion of my colleague from Indiana's statements. I certainly share his concern about the food stamp program. But I find myself in total agreement with the distinguished Senator from Maine.
Mr. President, since 1975 I have been actively involved with the food stamp program. For an even longer period of time, I have been concerned with Federal spending, and cognizant of the need to balance our Federal budget. It is for this reason that I follow this debate today with deep interest, for its concerns two issues that I give serious attention to.
The Senator from Indiana (Mr. LUGAR) proposes to cut the food stamp program by over $1 billion in the first concurrent budget resolution. While I am basically in sympathy with what Mr. LUGAR is attempting to accomplish, I am unable to support his amendment. I realize that these are tough times monetarily. On the heels of proposition 13 we now hear a national call to cut Federal spending, balance the Federal budget, and reduce the Federal budget deficit. Like other Members of the Senate, however, I would not like to see the poor and needy of this Nation bear the brunt of the burden of this call for budget balancing and reduced Federal spending. I am afraid that if the Lugar amendment were accepted, this would be the result.
In 1977, the Congress made substantial changes in the food stamp program. Although the administration has not yet implemented all of these changes, there were drastic reductions made to the program to insure that only the very poor are eligible for benefits.
Having been actively involved in what we thought were appropriate reforms in the food stamp program in 1977, having made a number of changes to restrict the benefits, to, in effect, lower the level of income to make one eligible for benefits, at the same time eliminating the purchase requirements, which this Senator supported, because it was justified, if, in fact, the program was to be for the poor, and then to say that now since that has been successful, and more people who should come into the program are coming in, we ought to reduce those costs, is not very persuasive.
I might also underscore, as the distinguished Senator from Maine has indicated, the estimates early on were about half what they should have been insofar as increased food costs were concerned. Even without the elimination of the purchase price, we have exceeded the cap, as I recall, nearly a half billion dollars.
I know the food stamp program is not popular. If we want to cut something, get up and rail against the food stamp program, because it is not a popular program. There were a lot of abuses in the food stamp program and probably still are abuses in the food stamp program, or any other program that affects 15 million, 16 million, or 17 million people.
I realize that we are in tough times monetarily and I commend the Budget Committee for the difficult decisions theyhave to make.
There is this call to cut Federal spending. I am not suggesting that is the intent of the Senator from Indiana, because I would like to join with him and perhaps change the law in the Agriculture Committee if, in fact, it should be changed, but we cannot really change it on the floor today.
Maybe the Secretary should be given more discretion, or maybe we should go back now after a year of the program with the purchase price eliminated and take another look.
But let me just repeat very briefly some of the changes made in 1977 because we had long drawn out, expensive, protracted hearings, and we had very close votes in the Senate Agriculture Committee.
Before doing that, let me suggest that the food stamp program has grown, no doubt about it. But we are going to have hearings on Monday in the Nutrition Committee and we will be told by experts in the field that because of the food stamp program and because of the efforts of, yes, the distinguished Senator from Dakota (Mr. McGOVERN) and others who served on the Nutrition Committee for some time, we will hear on Monday that 10 years after we began our efforts, millions of Americans are better off and that poverty-caused malnutrition has been reduced. Poverty, we will be told, is still a fact of life in America, but in the area of food, there is a difference, according to the field foundation medical team.
These are not partisans, these are not promoters of food stamp programs that will be testifying on Monday. They are a team of medical experts who will talk about the impact the food stamp program has had over the past 10 years.
Prior to that program, we had a commodity program and there were 8 or 9 million people participating in that commodity program. Somehow, some of usfrom farm States could justify the commodity program as being sort of an indirect benefit to our farmers, and it is more difficult to justify it, perhaps, if we use the food stamp program.
But the commodity program was phased out. It was not effective and did not provide proper nutrition in many cases. So, along came the food stamp program.
There were a lot of abuses. We had statements made on the floor of the Senate and in the committee where airline pilots were qualifying for food stamps, where people with extensive real estate holdings were qualifying for food stamps, and that was corrected.
1977 AMENDMENTS
Under the 1977 food stamp bill, the net income eligibility limits were reduced by $1,200 yearly for a four-person family. The net income was placed in the poverty level. Anyone whose net income did not fall beneath the limit simply was ineligible to participate.
That is a pretty good requirement. It was a change in the right direction and answers the justified criticism of many in the Congress and many Americans that we had to do something to tighten up the program.
We enacted stronger work requirements, a job search requirement was mandated, and strict, immediate penalties for fraud were also written into the program.
I might add, they were the efforts of the distinguished Senator from North Carolina. They were added to the bill by a unanimous vote, because it was widespread, as the distinguished Senator from North Carolina pointed out in the committee.
In addition, we tried to tighten up assets a person might have to qualify for food stamps, so that any family or recipient who has a car worth over $4,500 in fair market values does not qualify for food stamps. College students are no longer eligible unless they were a tax dependent or could have been a tax dependent of a person who is eligible to receive food stamps. The itemized deduction which had long been subject to abuse was replaced with a monthly standard deduction.
As a work incentive, there was allowed a 20 percent disregard for work-related expenses, and a combination child-care/shelter care deduction for working families or families in regions with severe weather conditions, respectively.
Mr. MUSKIE. Will the Senator yield for a moment?
Mr. DOLE. Yes.
Mr. MUSKIE. The Senator referred to the committee's concern with fraud.
Is it not true that as much of the fraud was due to vendors at the time there was a purchase requirement as to beneficiaries of the program, and that is one of the reasons why the purchase requirement was eliminated?
Mr. DOLE. That is right.
There was a lot of vendor fraud and that was the very issue addressed by the distinguished Senator from North Carolina, which was a good amendment.
But after all these reforms were enacted, the net result was removal of about a million persons from the food stamp rolls and reduced benefits for another 3 to 4 million persons.
I regret that the administration has been so slow in implementing the 1977 program, for I sincerely feel that we made progress in cleaning up the program, and wish that we had reports and figures to show whether or not the program is now working as we intended. Unfortunately, most of the changes made in the program are only now being implemented.
I think they should move with more rapidity to clean up the program. If they had, I do not think the distinguished Senator from Indiana would be offering an amendment today. So, I fault those in charge of administering the program.
Unfortunately, a little late, we are now seeing all these changes implemented.
THE CAP
Another provision in 1977 was to put a cap on food stamp spending, and that has been discussed in great detail by the distinguished chairman of the Budget Committee (Mr. MUSKIE) .
I assume, and I agreed with the effort to put a cap, it has now been rather clearly demonstrated that we used the wrong assumptions, at least the Department did. The price of foods increased. Certainly, everybody understood the price of foods increased. It has increased for food stamp recipients like it has for everyone else.
The cap was designed to allow Congress to maintain its authority over program costs. However, I maintain that through our budget process — with committee recommendations, the budget resolution, and the appropriations process — we have adequate controls over spending.
Nonetheless, when the cap was first established, it was determined largely on the basis of projected increases in food prices and in the unemployment rate. Unfortunately, food prices were estimated to increase annually at 3 to 4 percent between 1977 and 1981. Instead, the price of food is increasing at double this rate. Also, when the cap was established the unemployment rate was projected to be 5.7 percent by the Congressional Budget Office. Now, the new projections set an unemployment rate of 6.2 percent by 1980.
Mr. President, the increases we are experiencing in these two areas has a direct impact on the cost of the food stamp program. A 1-percent increase in the unemployment rate adds 750,000 persons to the food stamp rolls. A 1-percent increase in the cost of food adds $50 million to the cost of the program.
It is true, as the Senator from Kansas indicated earlier, that when we eliminated the purchase requirement, we made it possible for more deserving people to participate in the program. That was the purpose of the amendment. As the Senator from Maine has stated, we eliminated a lot of vendor fraud when we did that.
It is true that the elimination of the purchase requirement 2 years ago has recently added to the cost of the program. However, the USDA reports that even had the purchase requirement not been eliminated, program costs would exceed the cap by $400 million due to increases in food and unemployment. Given these facts, I feel that it is not right to maintain the cap when the basic information used in figuring it has since proven incorrect. As has been stated, when we used the CBO figures, which the Budget Committee did not do, they knocked off about $350 million from the projections of CBO.
We cannot make our Nation's poor shoulder a disproportionately heavy burden for the economic ills in our society. Already these factors have made their lives more difficult, and to cut food stamp benefits would be like imposing a surtax on this population. I do not believe that this is a fair manner by which to reduce Federal spending. I would rather support the recommendation made by the Budget Committee, and then if the Senate wishes to change the program, the agriculture committee can once again review this matter.
Mr. President, it has become obvious to me that we will reach the cap not so much because the program is being mismanaged but because too many ineligible persons have crept on to the rolls.
Our economy has dealt a devastating blow to the program. The poor cannot control food prices, inflation, or unemployment. Yet they must bear their effects. It would be indefensible to punish the poor, because we in Washington have failed to solve our economic woes. The food stamp program is the only public assistance program which offers help to the working poor, and I am afraid that should the cap not be lifted, benefits will be cut and low income workers will find it more attractive to give up their jobs for welfare. I believe that Government assistance programs should serve as work incentives, and I think that the food stamp program does serve in this capacity. I will, therefore, be disappointed if we impose such severe restrictions on the recipients that meeting the eligibility requirement serves as a work disincentive.
CONCLUSION
So I just suggest this: There are going to be faults in the food stamp program. This has been dubbed the "Oversight Congress." Those of us on the Agriculture Committee have a responsibility, and certainly the distinguished Senator from Indiana has carried out that responsibility. I am willing to join him, and I am certain every other member of the Agriculture Committee is willing to join him, in trying to figure out more ways to reduce spending. But if we are going to take a billion dollars out of the food stamp program, from $7.2 to $6.7 billion, someone is going to suffer. People are going to suffer. Elderly people are going to suffer.
The program is not faultless. We made a lot of improvements in 1977. Perhaps we need to go back to the drawing board or back to the authorizing committee.
Therefore, I feel compelled to vote against this amendment. The Senator from Kansas, I might add, has not been widely praised for his efforts in the food stamp program. For some reason, Republicans are always supposed to be against these kinds of programs. We are not supposed to be concerned about the hungry or the needy or the poor.
I say again that the benefits in the nutrition area are largely due to the efforts of the distinguished Senator from South Dakota (Mr. McGOVERN).
When I went on a field trip with the Senator from South Dakota, I wondered what the real motive was. We are all a little suspect. I learned, after years on that committee, that his motive was to try to help the American people and to try to serve the undernourished and to try to find a better balanced diet for American people who could not afford it otherwise. That was the motive of the Senator from South Dakota.
I assume that we have made mistakes along the way, but from whom are we going to cut the benefits? What legislative change are we going to make? What would be the top limit for participation?
It has been said that the average food stamp meal cost is 33 cents. If you reduce that 18 percent, that is talking about only a few cents. I cannot believe that anybody in this Chamber could survive on a 33-cent-per-meal allotment.
I suggest that the program is being scrutinized closely. Those of us who support it certainly want to restrict the fraud and the abuse. Everyone is opposed to that.
As I said, I do not claim that the food stamp program is faultless. Although considerable improvements were made in the 1977 act, I am sure that there is still room for even further refinement. I do suggest, however, that the appropriate place to legislate changes is in the authorizing legislation, rather than through the funding process. The Senator from Indiana (Mr. LUGAR) and I share many concerns about this program, and I would hope that in the future we can work together to make improvements in its operation. At this time, however, I feel compelled to vote against this amendment, for I do not feel that it carries out the intent of the law nor that it serves the food stamp recipient in a responsible manner. I hope that my colleagues will give this matter serious consideration, and will vote in support of the Budget Committee's recommendation.