April 25, 1979
Page 8568
Mr. HARRY F. BYRD, JR. Will the Senator from Maine yield for a question before he responds to the Senator from Delaware?
Mr. MUSKIE. Yes.
Mr. HARRY F. BYRD, JR. Has the Senator from Maine been able to get the figures on the trust funds?
Mr. MUSKIE. I think if the Senator will consult with Sid Brown of our staff; he has the figures. If they are not complete enough, we will make sure that they are.
Mr. HARRY F. BYRD, JR. I thank the Senator.
Mr. MUSKIE. Mr. President, I am sorry I missed the early part of Senator ROTH's statement. I was occupied elsewhere. However, I have listened to part of his statement and I have listened to the statement of the Senator from Wisconsin and to the statement of the Senator from Utah, who is a member of the Budget Committee. With respect to his statement, I would just have this to say: It was clear throughout the deliberations of the Budget Committee that Senator HATCH was in basic disagreement with the means chosen by the majority of the Budget Committee to fulfill its responsibility. But I was not aware that we differed as to the goals we were trying to achieve.
To have our efforts described as he has, as a deliberate effort to inflict unnecessary pain upon the American taxpayer in order to demonstrate that a balanced budget is difficult to achieve, I find very hard to swallow.
Today, the Senator voted to cut the food stamp program. What kind of pain is he seeking to inflict? His approach to the challenge of balancing the budget can be just as painful to Americans as he asserts our approach is. I reject that kind of characterization of the Budget Committee's motives or the means it has chosen. I simply want to make that very emphatic at the moment. I understand his disagreement with the Budget Committee procedures, with the Budget Committee's economic assumptions, with the Budget Committee's actions taken on the spending side of the budget, and with the Budget Committee's actions taken on the revenue side of the budget. That is his prerogative. As a matter of fact, there was not much he agreed with as we proceeded through the budget process, and that is his prerogative.
But to attribute the kind of motivation I just heard him describe, I think is taking quite a bit of liberty with a committee which worked long, hard, and conscientiously. As presiding officer I gave every opportunity to every member of the committee to express his point of view, to make statements, to offer amendments, and there was full and free debate. I do not think anyone listening to that debate can fairly ascribe to any member of that committee, including the Senator from Utah, the kind of motivation he ascribed to the majority just a few moments ago.
Mr. President, addressing myself to this amendment, I do not know how much of the material I am going to refer to at the outset has already been inserted in the record by the Senator from Delaware, but I want to be sure it is there.
First of all, Mr. President, under the Roth amendment he projects outlays for fiscal year 1980 at $522 billion, for fiscal year 1981 at $560 billion, and for fiscal year 1982 at $600 billion.
Revenues in fiscal year 1980 he projects at $494 billion, in fiscal year 1981 at $560 billion, and in fiscal year 1982 at $610 billion.
He projects a deficit in 1980 at $28 billion, which is essentially the committee's deficit, the deficit in 1981 at zero, and in 1982 a surplus of $10 billion.
The outlay change from current law under the Roth amendment would be a minus $16 billion in 1980, a minus $21 billion in 1981, a minus $20 billion in 1982.
He would reduce taxes from current law by $10 billion in 1980, $25 billion in 1981, and $75 billion in 1982.
His numbers compared to the subcommittee mark are these: In 1980 he would reduce the committee mark for outlays by $10.4 billion, in 1981 by $15.7 billion, and in 1982 by $14.3 billion.
Then he would propose a tax reduction under the committee mark of $10 billion in 1980, $25 billion in 1981, and $20 billion in 1982.
If those numbers are accurate, and I think they are, may I say that the subcommittee staff has been unable to duplicate those numbers, apparently because Senator ROTH's staff did not include in their revenue estimates the revenue loss, described by economists as negative reflow, resulting from the cuts of Federal spending due to their negative effects on GNP.
We have estimated revenues under the Roth proposal using standard Budget Committee methodology and also, of course, including all other adjustments to revenues assumed by the committee. With these estimates we arrive at these conclusions:
Revenues in 1981, instead of being $560 billion, as Senator ROTH projects them, would be $553.1. We would have not a balanced budget in fiscal year 1981 under the Roth proposal but a deficit of $6.9 billion.
With respect to fiscal year 1982, instead of revenues of $610 billion as projected by Senator ROTH, we would have revenues of $598.8 billion and a deficit of $1 billion in fiscal year 1982.
In order to achieve a balanced budget in fiscal year 1981, Senator ROTH's tax cuts would have to be reduced by $8.5 billion, so that instead of a tax cut of $25 billion it would be closer to $16 billion.
Under the Roth amendment, unemployment would be about the same as under the committee recommendation in fiscal years 1980 and 1981 but a little lower in 1982 because of earlier and larger tax cuts.
The inflation rate would be no different through 1982 but it would be higher in subsequent years.
Senator ROTH proposes a list of specifc outlay reductions. Let me say just a word about those. It is a long list. I ask unanimous consent that there be included in the RECORD a table showing the functions in which those cuts would be made.
There being no objection, the table was ordered to be printed in the RECORD, as follows :
[Table omitted]
Mr. MUSKIE. Let me refer to just some of them, if I may. Bear in mind that in 1980 and 1981, in order to achieve balance in 1981, the Committee on the Budget has already cut, and a lot of those cuts were painful in the committee. After we had taken our first run at 1980 and 1981 we were $9 billion away from a balance. We had to find $9 billion more in cuts in order to achieve a balance in 1981. It was that difficult.
Mind you, we had Senators representing many points of view, many political philosophies, with differing interests in particular programs across the board. So we squeezed every dollar we could in order to get down to the outlay numbers that we propose. Now Senator ROTH would reduce those by more.
Let me cite some of his in 1980: In function 400, he would reduce Amtrak and ConRail, would cut 25 percent of rail funds in fiscal year 1980 and 50 percent in fiscal year 1981. This is an area where, I thought, the Senate had a pretty broad consensus that one of the things we must do in this day of the energy crisis is expand our public transportation. We have understood, for all the years of the budget process, that energy and transportation were high-priority items. The Roth proposal would cut as I have indicated.
In function 500, Senator ROTH would phase out CETA countercyclical jobs in fiscal 1980. We had that debate yesterday, a long debate. The committee voted to phase those jobs out in 1981.
The proposal was to phase them out in 1980. We debated that proposal and the Senate overwhelmingly rejected it by a vote in the order of 60 to 20 — something in the 60's to 20. Now, Senator ROTH depends upon that for a $2.4 billion further cut in the 1980 budget. How realistic is that? Just how realistic is that?
He would also make small cuts in middle-income student assistance and library programs.
In function 550, he would cut $400 million in medicare and medicaid and another $600 million in medicaid savings related to AFDC; in other words, $1 billion in this function, which, of course, is the entitlement function affecting the poor and the elderly.
He would hold the current law for health research.
With respect to function 600, he would propose a $900 million cut by way of savings in AFDC — another $900 million; $300 million in savings in the SSI program; a half billion dollar savings in food stamp legislation. We have already had that issue debated all morning, and a Senate vote that was overwhelmingly in favor of the committee's mark. Two hundred million dollars in the lunch subsidy for the non-needy, $200 million in emergency fuel assistance — again, a program designed to help those at the bottom of the ladder deal with the escalating price of heating oil and gasoline for essential needs.
In function 920, the Senator proposes cutting $2.9 billion in categorical grants, without specifying where. These categorical grants are not found in function 920. The categorical grants which, with revenue sharing, amount to $82 billion, are scattered through the 19 functions in the budget. But that was too much work to get at those categorical grants and propose which ones to cut. That is a very easy way to make the cut, because nobody sees his program or his interests jeopardized by the proposed cut. It is simply a $2.9 billion across-the-board cut in categorical grants without specifying which ones would be hurt.
Mr. President, I suggest to Senators that they look at that $2.9 billion figure and seek to identify where it would impact, whose interests would be hurt, whose constituents would be hurt.
We have heard a lot about pain. Let me say again what I said yesterday, that achieving a balanced budget in 1981 does inflict pain — not because anybody, neither the Senator from Maine nor the Senator from Delaware, wishes to deliberately inflict pain on anybody.
The program is enough to balance the budget in 1981. We are hurting programs that help people. There is no question about that. If we cut even further, as proposed by Senator ROTH, we shall hurt people even more, not because that is Senator ROTH's deliberate intent, but because that is the effect, and it is that pain which prompted the Budget Committee to seek a moderate cut, which still achieves a balanced budget in 1981.
Mr. President, let us look at a comparison of the two proposals.
It appears doubtful that the Roth amendment can achieve budget balance in either 1981 or 1982.
The spending cuts exceed those recommended by the Budget Committee by about $10 billion in fiscal year 1980 and by nearly $15 billion in fiscal year 1981 and fiscal year 1982. The recommended budget required considerable sacrifice of national objectives, and achieving the Roth spending cuts would be even more difficult and I have already described it.
While the Roth spending cuts are larger and more anti-inflationary than the committee recommendation, the tax cuts are larger and more inflationary. On balance, the Roth proposal would become, over time, more inflationary than the committee recommendation.
Roth-Kemp advocates have maintained that tax cuts increase the supply capability of the economy to such an extent that they have no inflationary effect. This argument has been found to be invalid by CBO and many other analysts.
First, the supply response lags behind the demand response. Obviously, industrial capacity in the steel, machinery and construction industries is required to produce the additional equipment and plant that will eventually enlarge productive capacity. The extent to which the current capacity is made available depends on the extent to which households not only save a part of the tax reduction they receive but are induced by the tax reduction to save a larger fraction of their total income than they would have without the tax cut. In addition, additional labor supply may be forthcoming if individuals respond to the prospects of higher after-tax earnings by being more willing to work. Both of these behavioral responses are likely to occur, however, only after a long gradual adaptation, and not in the almost instantaneous fashion assumed by the Roth proposal.
Second, what will be the magnitude of the supply responses — and there must be supply responses to make the Roth theory work — once they begin to occur? A survey and evaluation of the relevant literature was commissioned by this committee last year. This concluded that the positive response of the labor supply to tax reduction is limited to married women, who account for only approximately 23 percent of the labor force. The question of whether saving responds positively is very controversial. The most generous estimate — due to Prof. Michael Boskin — is that the proposed tax reduction of almost 25 percent in 1982 would increase personal saving by 18 percent or about $23 billion. This would be a big enough increase in saving, or reduction in consumption, to offset about 0.2 to 0.3 percentage points of the inflationary effects of ROTH's combination of spending and tax cuts in the 1982-83 period. But shifting this amount from consumption to investment—as the Roth-Kemp argument assumes — would not amount to a rapid increase in the capital stock. The amount of reduced consumption and increased investment is only 0.6 percent of the capital stock. Thus, the process of increasing the size of the capital stock is a very slow one, which would not have the impact on the 1981 and 1982 budgets projected.
Mr. President, I really do not think it is necessary for me to comment further. Further comment would mean a repetition of the arguments I have already made. We have made an analysis of all the proposed functional cuts that the Roth proposal assumes. I could go through those in detail, but I think the basic issue before us is, No. 1, whether the economic policy reflected would work; No. 2, whether the additional cuts in program are realistic — and the whole assumption of the argument I heard after I came into the Chamber was that no cuts had been made, that the Budget Committee had not made any cuts, that the Senate had not approved any cuts.
That is contrary to the facts. What Senator ROTH is arguing is similar to what Senator PROXMIRE argued yesterday, that after you had made cuts, you could make more cuts, and then, after you had made those, I suppose you could make even more cuts, and there is no limit, that the effect of spending cuts is bound to be beneficent because it makes possible cuts in taxes that would be beneficent.
Well, it is is not quite that simple. I do not think we can repeal government. Certainly not repeal the essential functions of the Government as they relate to national defense, to the human needs of people who cannot care for their own needs out of their own resources, for the functions and the role the country is demanding we play in developing alternative energy sources, and the whole range of Government activities.
With the Budget Committee made up, as ours is, with people like Senator BELLMON and others on both sides of the aisle, this is not a committee of wild-eyed spenders. This is a committee of people who have divergent views about what the needs of the country are, but not one of them would propose repealing government, and they are a reasonable cross section, I think, of the Congress as a whole, maybe more conservative, whatever the word "conservative"means these days.
But a budget, if it is to be endorsed by the Congress, must appear to be a fair distribution of the resources of this Government to a majority of each House of the Congress. None of us can have our own way with respect to either the priorities or the mix of tax and spending policies which are reflected in the budget. We have to get a majority. The record of the Budget Committee over the last 5 years is that, without exception that I can think of, the Budget Committee result has been pretty much endorsed by a substantial majority of the Senate, at times a close majority in the House, because it was felt there that the human needs were not adequately addressed.
By and large, the Congress has approved what the Budget Committees, after long hours and days of work, have produced.
For me to say there is nothing in the budget that I would not cut if I had my druthers would be a misstatement. To say there is nothing in our budget Senator BELLMON would not cut if he had his druthers would be a misstatement. To say there is nothing in the budget we presented that no member of the committee would cut if he had his druthers would be a misstatement.
But what we produced is a budget that got a substantial majority vote in the Budget Committee because it represented a consensus of what would be a fair distribution of resources and what represented a moderate approach to a very complex and difficult economic future which lies ahead of us, which no one can predict with precision, not Senator HATCH who seems so certain he has the right crystal ball, and not anybody else who feels he has the right crystal ball.
I have not heard a single economist in 5 years as chairman of the Budget Committee who has boasted to me of his last year's economic predictions.
The members of the Budget Committee are no better. Senator ROTH is no better. Senator HATCH is no better. Senator MUSKIE is no better. We do the best we can based upon the testimony that is given us by so-called experts, Then, based upon those assumptions, we seek to evaluate program needs based upon the advice we get from the administration, from the authorizing committees, from the Appropriations Committee and its subcommittees, and from the members of the Budget Committee who have expertise in amazingly wide ranges of activities of the Federal Government.
That is what the budget process is all about. It is not the Budget Committee. It is the Budget Committees plus the Membership of both Houses, plus the committees of both Houses, with analytical assistance from the Congressional Budget Office.
We all have a responsibility in this, and I think the budget before us is a fair representation of a consensus in these two bodies.
Time will tell whether I am right or not, and it may come very soon on the vote on this amendment. But I do oppose this amendment and urge Senators to vote against it.
Mr. BELLMON. Will the Senator yield 5 minutes?
Mr. MUSKIE. I do.
Mr. BELLMON. Mr. President, I believe it goes without saying that along with many other Members of this body I favor reductions in Federal spending.
In fact, I believe reducing Federal spending and achieving a balanced budget may be the single, most important and most pressing policy issue the Congress faces.
It is an issue very much in the minds of the American people. The Congress, I believe, should and does desire to respond to this public demand.
I also share Senator ROTH's desire to reduce taxes and to retire a portion of the national debt as much as we possibly can. I was an original sponsor of the Nunn, Chiles, Bellmon, Roth, Danforth amendment of last year which undertook to limit Federal spending and provide substantial tax reductions.
But, Mr. President, I do not believe Senator ROTH's proposal is a realistic alternative to the budget resolution recommended by the Budget Committee that is before the Senate. And I am well acquainted with Senator ROTH's proposal, because it is similar in many respects to a package of spending reductions and tax cuts that I offered in committee on behalf of the Republican Members.
Many of the spending reductions contained in the Roth amendment reflect priorities which are shared by many on the Budget Committee, but not a majority. The Republican package that I offered in committee was defeated by a vote of 12 to 8. As I said, the Roth amendment is quite similar.
The Roth amendment, for example, would achieve a $2.6 billion reduction in function 500 by phasing out title VI countercyclical jobs in fiscal year 1980 and reducing both youth programs and the private sector initiative.
As our chairman pointed out on yesterday, by an almost 2-to-1 vote, on Senator BYRD's amendment to phase out title IV, it suggests that this proposal does not have majority support.
I would like to be sure Senator ROTH understands this. The budget resolution is a carefully constructed compromise among various views as to how a substantial reduction in Federal spending should best be achieved. And I believe that the committee membership reflects a full range of the Senate's own views.
The budget resolution, therefore, does not reflect the priorities of any one Senator or group of Senators. There were spending reductions I fought for — and lost, and some others I won. For other Senators there were increases and reductions they believed to be extremely important. Some carried the committee's support, others did not. No single Senator nor single issue bore the burden of the committee's commitment to spending restraint nor benefited from its favor.
Mr. President, I would like to applaud Senator ROTH for his efforts. He and Senator PROXMIRE came before the Budget Committee on March 6, on behalf of the "SOB," group — save our bucks group.They made some very constructive suggestions which were considered by the Budget Committee.
We considered their proposals and incorporated some of them into the budget resolution now before the Senate.
I would like to give some examples. For instance, Senator ROTH wanted a $2.5 billion cut in budget authority for CETA. The Budget Committee recommends — the resolution before us — most of this cut. We have recommended a $1.9 billion cut for CETA.
Senator ROTH wanted to deny funding for the targeted fiscal assistance program. The Budget Committee has taken that recommendation and we assume no funding for the targeted fiscal assistance program.
Senator ROTH wanted the Budget Committee to cut $2 to $3 billion from the budget for fraud and abuse anticipated savings. The Budget Committee's recommendations cut $3.8 billion from HEW programs in which the HEW Inspector General says that there are significant losses from fraud, abuse, and mismanagement. So we took his full recommendation in that connection.
The Budget Committee also assumed a $350 million saving from better management of the food stamp program by the U.S. Department of Agriculture.
In addition to that, Senator PROXMIRE had other recommendations which the Budget Committee considered.
The Budget Committee cut budget authority for housing assistance programs by $9 billion and outlays by $0.1 billion below current law and $12 billion below the Banking Committee's recommendation.
So we assumed all the changes in the housing assistance program suggested by Senator PROXMIRE even though he had been outvoted on those recommendations in his own committee.
In this case, the Budget Committee agreed with Senator PROXMIRE that the future costs of these programs look so large that we should take action now to limit the growth of those costs to some reasonable level.
So I say to my friend from Delaware that the budget resolution represents a consensus worked out over many long days of debate between people with very strongly held different points of view. It does achieve a balance in 1981, and this is an objective that many considered impossible when our deliberations began. I believe it is a result that is realistically attainable and achievable, that it should not be put aside lightly.
I urge that we stay with the Budget Committee's conclusions and that we not depart from our carefully thought out consensus by adopting the Roth amendment.
The PRESIDING OFFICER. The Senator's 5 minutes have expired.
Mr. ROTH. Mr. President, I yield 5 minutes to the distinguished Senator from Colorado.
Mr. ARMSTRONG. I appreciate the Senator yielding.
Mr. President, as I have listened to the debate for the past 21/2 days, I have been impressed by the rhetoric which has been called forth in support of the budget resolution. Words such as "cuts," "slashes," "reductions," "savings" have occurred over and over again during the course of the discussion of this resolution.
One might logically suppose that the result of all this cutting and shrinking and slashing and hacking and reducing would be a budget that was smaller than the one which was adopted by this body last year. Alas, this is not the case, and I would like to take a moment to put the matter in proper perspective.
After all that has been said and done, the budget is going up by perhaps 10 percent over that of last year. I think it would be well for Senators to recall that, within the service of many who are in this Chamber, the budget has risen from less than $100 billion to more than $500 billion at present. Even 2 years ago — just 2 years ago — in fiscal 1977, we were talking about a budget of only $400 billion.
So for the Budget Committee of which I am privileged to be a member — to come before the Senate and suggest that a proposed budget for fiscal 1979 of $493 billion and $531 billion for the following year is an austere, lean budget, it seems to me, is really a contradiction in terms.
The proposed spending cuts which have been suggested by Mr. ROTH are proper. I support them. But more than that — and the reason why I have sought recognition — I urge the justice of the tax cuts which have come to be known as the Roth-Kemp tax plan.
If Congress enacts the budget which is now pending before this body, it will be endorsing a $58 billion tax increase in the next 2 years. I would be glad to have a balanced budget. I have been for it; I have been fighting for it. But the concept in this budget resolution of balancing the budget by increasing taxes is offensive to the basic economic needs of this country. It amounts to what Mr. ROTH has said over and over: It is balancing the budget on the backs of the Nation's taxpayers.
All Mr. ROTH has suggested is a moderation of the rate of tax increase for fiscal 1980 and 1981 — certainly a modest proposal. It seems to me that the case for this kind of moderation — that is, a reduction from the present rate of increase — rests on two major premises.
The first is fair play for the Nation's taxpayers. The median income family in this country has seen its taxes tripled within the last 10 years. This means that after inflation and taxes, the average family of four in this country has less spendable income to take care of itself — to provide for education, clothing, food, shelter, and so on — than it had 5 or 10 years ago. In fairness, I think the taxpayers deserve some consideration; and the amendment now pending would give it to them.
The second premise upon which the case for tax reduction rests has been well stated by Senator ROTH, Senator HATCH, and others, and that is to give a break to the Nation's business firms and investors in order to create the kind of economic prosperity which was once commonplace in America and which is now out of vogue. Taxes have risen so high that we have literally discouraged investment in new business enterprises, in capital, in plants, in equipment for the kinds of things that create new jobs and economic prosperity.
It is no secret that the stock market is plunging, that the dollar is weakening on international exchanges, that our unemployment rate has risen. Many economists used to say that you could not have inflation and unemployment at the same time, but this has been disproved. It is obvious to me that there is something wrong with our economy, and I think it is increasingly clear to the Nation's taxpayers.
The PRESIDING OFFICER. The 5 minutes of the Senator have expired.
Mr. ARMSTRONG. Mr. President, will the Senator yield me 1 additional minute?
Mr. ROTH. I yield.
Mr. ARMSTRONG. Mr. President, what is needed is a tax reduction, the kind of tax reduction that will encourage investment, that will encourage risk taking, that will encourage entrepreneurship, that will encourage a return to the economic vitality on which America is premised.
I am convinced that there is a consensus in the country for spending reductions and for tax cuts.
I compliment the Senator from Delaware for bringing this matter before the Senate today. I am not surprised that he has done so, because during the last several years he has been the leader in this body in bringing this crucial issue into focus. In large measure, the Senator from Delaware already has won his victory, because it is an accepted idea that spending restraint and tax cuts are essential at some future date. Even the Budget Committee has agreed to that concept for 1981-82 and beyond.
Mr. MUSKIE. Mr. President, will the Senator yield?
Mr. ARMSTRONG. I will yield in a moment.
What the Senator from Delaware is saying — and I join him in saying it — is that we should not delay 2 more years in giving that tax break.
I have little time remaining, but I will yield whatever time I have to the Senator from Maine.
Mr. MUSKIE. I will use my time, in response to what the Senator has said.
Mr. President, twice today, I heard it said, one way or another, that the Budget Committee had to be pulled, yelling and screaming, into the acceptance of tax cuts to eliminate tax increases due to inflation. The Senator from Utah said we were insensitive to this. The Senator from Colorado — I find him a very welcome member of the Budget Committee — has said this about the Budget Committee.
However, if the Senator will examine our reports from the time we were constituted, he will find that we highlighted the point of tax increase due to inflation and the need to project plans down the road to deal with it. Even in this budget, we have done that.
It is interesting that since the Budget Committee was created, we have had three tax cuts, totaling $39.9 billion in current prices and $45.4 billion when all are calculated in today's prices — whatever that is.
The second point I make is that during the period the budget has grown as the Senator has indicated, GNP has grown in even greater proportions. To pretend that inflation can raise GNP, but have no effect on the budget is to live in an unreal world. If we translate both into real terms, that is another thing. However, during the period the Federal budget has gone up from $400 to $500 billion, GNP has grown more. Since the Budget Committee has been in effect, we have reduced the budget as a percentage of GNP.
The final point I wish to make is this: It is a strange coincidence, perhaps, but Senator ROTH's proposed tax cuts through fiscal year 1982 total $55 billion. We program a $55 billion tax cut in 1982,after achieving a balance in 1981.
I already have made the point that Senator ROTH's plan would result not in balance in 1981 but in a deficit of $6.9 billion; and in order to offset that, he would have to reduce his tax cut by more than $8 billion. So that, in effect, for that 3-year period he is proposing — or would have to propose — a lesser tax cut than the committee proposes in 1982.
What is involved is timing — timing designed to avoid hurting people who depend on the spending side of the Federal budget for relief against the pressures of inflation and the unfairness that goes with inflation; and, second, to keep the economy on a moderate course so that we can achieve a tax cut in 1982. More than that, we project an even higher tax cut than that in 1983 and a $100 billion tax cut in 1984.
So, to pretend in all this rhetoric that the Budget Committee is insensitive to the effect of inflation on taxes is to blind oneself to the record of what the Budget Committee has proposed.
Mr. ROTH. Mr. President, how much time do I have remaining?
The PRESIDING OFFICER. The Senator has 24 minutes remaining.
Mr. ROTH. I yield myself 5 minutes.
Mr. President, first I pay my respects both to the chairman of the Budget Committee and the ranking member. I think they both have done an excellent job in their capacity as the leaders of the Budget Committee, and I recognize that it is indeed a difficult job.
But I also recognize that it is their concept that the Senate should accept without change the recommendations of that committee.
Mr. MUSKIE. Mr. President, will the Senator yield on my time?
Mr. ROTH. I yield on the Senator's time.
Mr. MUSKIE. I have been faced with that assertion many times, and I do not take any such position. I take the position that as chairman of the Budget Committee I have the responsibility for presenting the Budget Committee's recommendation with all of the persuasion that I can. I do not deny the right of the Senate to change that in any way, and I have never said that, and yet I keep hearing that argument repeatedly. I do think I have a responsibility. If as chairman of the Budget Committee I do not believe in the product we produce I should let someone else manage the bill. That is something different than to say that I deny the right of the Senate to change it in any respect and in all respects that a majority wishes which is not the same thing.
Mr. ROTH. I accept the comments of the distinguished Senator from Maine and merely point out that I for one am seeking to change the direction of the budget resolution.
I also point out that there were a couple of things said that were not accurate as to what I am proposing. For example, I have not proposed during the next 3 years any cuts in transportation or student aid. That may have come from the recommendations made by the minority but that was not part of my recommendations.
I also point out that while we are proposing a tax cut we are not necessarily saying what the nature of that tax cut should be, I do not think it is any particular secret that I am an advocate of Roth-Kemp tax legislation. But under our amendment it could well be that it would be the will of the Finance Committee and Congress to move in another direction. Other possibilities would include such changes as a reduction in social security taxes. It could provide greater incentives for investment in new plant facilities. So I want to make it very clear to my colleagues that they are not necessarily voting for any particular tax reform or tax proposal.
Mr. President, whenever we talk about greater restraint in spending we overlook what is happening to the American working people. They are suffering from inflation from many directions, and as the distinguished Senator from Wisconsin pointed out, one of the biggest increases in the cost of living is taxes. I do not happen to think a family of four earning $10,000 is wealthy. And I think it is a serious matter when a man with a family of four finds his taxes increasing from $1,051 to $1,356 by 1980. A family of four earning $20,000 finds that their taxes are increasing from $3,251 in 1978 to $4,022 in 1980. I think this growing tax burden places a tremendous burden on these families, including the family of four earning $30,000 that pays $5,300 in taxes in 1978 and will be paying $6,650 in 1980 if the budget resolution of the Budget Committee is accepted.
So No. 1, I do think that we have to recognize that a great burden is being assumed by the working people, if it should be the will of the Senate to accept the recommendation of the Budget Committee.
Mr. President, I am equally concerned about the direction that this country is going. I recently spent some time in Tokyo at a conference dealing with the economies of the world, especially the economy of the United States. Great concern was expressed by economists and leaders of foreign countries that the United States has one of the lowest saving rates in the world, at least of the industrialized countries of the world. It amounts to something like less than 5 percent, compared with 15 percent for West Germany and something like 22 to 25 percent for Japan. They expressed concern that our productivity is the lowest in the world, and I think it is about time that we take some steps to increase savings and productivity.
The Senator from Maine disputed the numbers in my amendment. You can argue with any figures. You can argue my figures. Very candidly, one can argue the figures of the CBO. The CBO does not accept the figures of the President. All of the figures are guesstimates.
The PRESIDING OFFICER. The Senator's 5 minutes have expired.
Mr. ROTH. I yield myself 3 additional minutes.
We all know that economists' predictions are based upon looking into a crystal ball. They are much better in hindsight than foresight. But that should not prevent each one of us from using our best judgment as to what is necessary to move this country in the right direction.
I happen to think the Roth proposal, which is cosponsored by a number of people from both sides of the aisle, is a valuable contribution in that it proposes a balanced budget in 1981, with tax cuts in 1980 and 1981. I also propose a $10 billion further restraint in spending. I do not think there are many American working people who think the Federal budget is reflecting that much tightness, that it is tight and austere and has no fat in it. When they realize the Federal Government has 456,000 cars, vehicles, and buses, and one vehicle for every six employees in the Federal Government, I think the American people are not going to consider that very trim or austere.
So, I think there are ways and means of cutting this budget further without hurting the basic needs and requirements of the American people.
But more important, we must provide incentives for real growth in the economy, a growth that will mean not only more for the working people, but also will create jobs in the private sector for the unemployed; and, most important, will also provide more money for the Federal Government in future years from an expanding economy.
Mr. President, I hope the Senate will vote in favor of this amendment because it represents a clear chance to change the direction of this country in the direction of real growth and real productivity with-out inflation.
I yield back the floor.
Mr. MUSKIE. May I say to the SenatorI have nothing further.
Mr. ROTH. I am ready to yield back the remainder of my time.
Mr. MUSKIE. Has the Senator gotten the yeas and nays yet?
Mr. ROTH. No.
I will ask for the yeas and nays, Mr. President.
The PRESIDING OFFICER. Is there a sufficient second? There is not a sufficient second.
Mr. MUSKIE. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. MUSKIE. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MUSKIE. Mr. President, I ask for the yeas and nays on the pending amendment.
The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient second.
The yeas and nays were ordered.
The result was announced — yeas 36, nays 56, as follows:
[Roll call vote tally omitted]