December 6, 1979
Page 34928
Mr. MUSKIE. Mr. President, the Armstrong amendment the Senate defeated today proved the old saying that for every difficult problem there is a solution which is simple, easy, and wrong. It was politically attractive and easy to vote for that amendment. It took more than a little courage to vote against it.
The Armstrong amendment addressed a very important goal: How to keep Federal taxes from eroding American taxpayers' real purchasing power. Surely, that is a goal we all agree upon.
Congress has regularly reduced rates to avoid taxing the part of Americans' income which results from, inflationary rather than real income increases. In fact, Congress cut taxes last year and has cut taxes 3 of the 5 years since 1974, when we rejected a tax increase proposed by President Ford.
The Armstrong amendment was the wrong answer to the problem of taxes and inflation.
Congress voted just 1 week ago for a congressional budget which provides for tax cuts much larger than those in the Armstrong amendment, after the budget is balanced in 1981. The Armstrong amendment would have reduced taxes by $176 billion through 1984. The congressional budget will reduce them by at least $230 billion during the same period.
The Armstrong amendment proposed cutting taxes in the wrong way. It uses a rigid formula known as indexing which is so controversial, even among conservative economists, that it was rejected by President Ford, as Senator DOLE, one of the Armstrong amendments chief spokesmen, told us this afternoon.
The congressional budget tax cuts will be shaped to meet the precise needs and circumstances of the economy and our fellow taxpayers. The Armstrong amendment was not.
For example, the Armstrong amendment provided none of the tax cuts we need to encourage job creation and inflation-reducing productivity growth in American industry.
The Armstrong amendment provided no spending limits to assure that it did not lead to deep deficits in the future.
Of course, on the surface, the Armstrong amendment was politically attractive, as any proposed tax cut always is. It is always easy to vote for a tax cut.
It is much harder to patiently analyze all the needs of our citizens and the economy and come up with a sound, multiyear budget plan which cuts taxes and — most importantly — also controls spending. But that is why we established the congressional budget process.
That budget establishes as the first priority a balanced budget in 1981. That budget process has produced the multiyear $230 billion tax cut and spending limit plan Congress adopted just a week ago.
It would have been politically useful for Senators to have voted today for the Armstrong tax cut, even though it is smaller than the cuts planned in the congressional budget. It was tempting to kick over the congressional budget plan by impulsive action now.
It would have been easy.
It would have been wrong.
So I commend the Senators who put the long-term welfare of our fellow taxpayers ahead of attractive but short-term political gain. The larger tax cuts provided by the congressional budget will, in the near future, vindicate their vision and their courage here today.