March 25, 1980
Page 6486
Mr. MUSKIE. Mr. President, I yield myself 5 minutes on the bill.
I was not inclined to speak at this point, but the distinguished Senator from Idaho said something that caught my attention. He said, near the close of his remarks, that we ought not to be fooled by superficial evidence of budget cuts which are designed only for psychological effect.
Mr. President, I have been handed several pages of proposed cuts intended to document the claim made by the distinguished sponsor of the Roth amendment, real cuts that he could perceive could be made to the budget. The first point I make is that by his own totals, his own arithmetic, they amount to $35 billion. His original resolution — and it is still in that form at the desk — would require $45 billion. So he is $10 billion short to begin with.
He has said he is going to modify his amendment at some point to eliminate or reduce the onerous burden of finding $45 billion in cuts, I take it, and is going to adopt something similar to the Domenici proposal, which he thinks will do that. But even Senator ROTH, apparently, has had difficulty, even using his own arithmetic, finding $45 billion in cuts.
Now, let us look at his $35 billion in cuts. I have been listening to the rhetoric here that he does not believe, and the Senator from Idaho has repeated that, that he does not believe in balancing the budget with tax increases. Well, the Roth list includes increases in waterways user charges of $1 billion, increases in Coast Guard user fees of $600 million, and increases in airport and airway user charges of $900 million. That is $2.5 billion.
When the President proposed withholding on interest and dividends, with a revenue gain of $2 billion to $3 billion in 1981, I heard all of this indignation on the other side that the President was going to balance the budget by increasing taxes. The distinguished Senator from Delaware may be able to distinguish between increases in user charges and increases in taxes, but I suspect that the people who have to pay the higher user charges will find it hard to make the distinction.
So his $2.5 billion is not in outlay reductions. It is an increase in taxes. It cannot be considered to be a reduction in outlays.
So, take the $2.5 billion from his $35 billion and we are down to $32.5 billion. The $2.5 billion would help reduce a deficit, but it does not help reduce outlays. Revenue increases are not outlays by any stretch of the imagination. Talk about a smokescreen. That is a deficit-eliminating provision, it is not an outlay reduction. That ought to be clear. So, by his own arithmetic, it is $32.5 billion.
Let us look at some of the other cuts. I have not had an opportunity to examine these proposals as comprehensively or as in depth as I would like. The place to do that is in the budget committee. That is what we do. Senator ROTH does not trust the Budget Committees. He has made that very clear in his remarks today. So that forces me to react to his specific proposals on the floor here, off the cuff, with the fastest possible expert advice I can get.
I am going to do my best to be fair in analyzing these cuts, but I do have to analyze them. And when Senator ROTH calls my cuts, which are based on hard figures, a smokescreen, then I have a right to examine his proposed cuts and see what they mean.
For instance, the Roth list includes savings on interest of $3.3 billion. The best judgment that we can get from our staff and CBO is that those savings could not be more than a billion and a half. I do not know where the $3.3 billion came from. That $3.3 billion is not realizable. Only $1.5 billion is, by our best calculation as of today. So there is $1.8 billion of inflated outlay savings.
The PRESIDING OFFICER (Mr. LEVIN). The Senator's 5 minutes have expired.
Mr. MUSKIE. I will take another 5 minutes off the bill.
Mr. President, another thing Senator ROTH says is that an unemployment reduction which would be produced by a tax cut, the amount of which he did not specify, I think he called it a modest tax cut, would save $4.1 billion.
Now, if a tax cut had the effect of reducing unemployment by 1 percent, that would save $4.1 billion.
Senator ROTH has not told us what the tax cut would be. A $30 billion tax cut, which would be roughly comparable to the amount of reductions in outlays he is proposing, would save only two-tenths of 1 percent on the unemployment rate, not 1 percent. So the savings there would not be $4.1 billion, but $800 million, according to the best professional advice I can get. That is a $3.3 billion difference.
With respect to categorical grants, we do not have any specifics at all. But we are told that we could save $4 billion.
How? Where? In what respects? By what controls? We are not told. But I doubt that in fiscal 1981, this close to the beginning of the fiscal year, that we could get even one-fourth of that. But beyond that, I cannot comment because I do not have the specifics.
Then Senator ROTH would cancel the grain embargo. Wholly apart from the policy implications of pulling back on a positive policy decision that our Government took in response to the Russians' Afghanistan invasion, wholly apart from the policy implications, what about the budget savings if we should cancel?
Senator ROTH says we would save $800 million in 1981. CBO estimates that the effect of the grain embargo will now fall in fiscal year 1980, not in 1981. Therefore, there would be no savings in 1981 due to cancellation; the savings would occur in 1980. As far as the 1981 budget is concerned, there is another $800 million down the drain.
With respect to the strategic petroleum reserve, Senator ROTH says he would eliminate the re-appropriation that the President requested, the new money for 1981.
The fact is that that would produce no savings at all in 1981. In order to save $1.2 billion in 1981, it would be necessary to rescind in fiscal year 1980 $4.1 billion in budget authority. That has not been proposed.
He thinks he can do it mildly, just eliminate the re-appropriation the President requested.
Whether or not he is prepared to take the drastic step of cutting out $4.1 billion in budget authority this year, he has not indicated.
But what he has proposed will not save a dime in 1981. Strictly smokescreen cuts.
Mr. President, on food stamps, SenatorROTH proposes a saving of $2 billion. I am not sure to what extent that amount of savings beyond that already assumed in the numbers I have discussed is possible, but there is one fact that is quite clear: The amount of savings through elimination of duplication between food stamps and school lunch is overstated by $600 million.
So, instead of $2 billion, at most we could save $1.4 billion, and I have some doubts about that figure.
Airport and airway user charges, $900 million, is a tax increase, not an outlay reduction.
Senator ROTH made it clear this morning he is against balancing the budget by tax increases. I do not know how he distinguishes between user fees and tax increases. I find it very difficult to understand.
I am sure Senator LONG would see no difference between taxes and an increase in waterway user charges in his part of the country.
A tax is a tax is a tax. If it looks like a duck, walks like a duck, sounds like a duck, it has got to be a duck. And a user charge is a tax.
But I have been hearing all morning long that we are against tax increases to balance the budget.
EPA construction grants. Now, this is a program about which I know a little something, as much as any Member of the Senate. I created it. I have voluntarily reduced the amount of money available for this program each year the budget process has been in effect. So we have shrunk it considerably.
Senator ROTH would go against that, too. He would save $200 million.
The fact is that if there was a total cessation of new obligations beginning right now, the most we could save in 1981 is $100 million. That is a figure we really dug into in the meetings of the last 2 weeks in order to save every dime we could, and $100 million is all we could save.
With respect to youth jobs, Senator ROTH would propose the elimination of this new initiative to save $400 million. The fact is that total elimination would save only $200 million.
We are told that cuts in administrative and regulatory costs would save $5.5 billion in outlays. Where? How?
Of course we must do whatever we can to hold down the administrative costs of the Government, including reforming the regulatory agencies, which I think is a commitment many in this body have, including the Senator from Maine.
But I do not think we can, between now and October 1, put in reforms that would save $5.5 billion in outlays in fiscal year 1981.
How do we pick that figure? How were the amounts arrived at that have been added together to get $5.5 billion? What is the impact? Will we just save $5.5 billion because people are against overhead costs and are against regulation and are for regulatory reform. Obviously, it is popular to say, "Let us cut $5.5 billion."
Why not $6 billion? Why not $7 billion? Why not $10 billion? Why not enough to balance the budget? We will not have to cut any other program.
Some of that $5.5 billion can be saved. I would even be willing to give credit to half of that, $2.8 billion, which I think would be very hard to get.
Now, the multilateral development banks, $1 billion, we are told, can be saved. Mr. President, if there were no new appropriations for the banks in fiscal year 1981, only $100 million in outlays could be saved in fiscal year 1981.
On the basis of this quick analysis, which covered items totaling $28.5 billion on the Roth list, I cannot be sure that there is more than about $10 billion in outlay savings. I have not gone into the remainder of the items on the list.
Mr. President, what I have tried to do here, in all good faith, is to indicate where, in my judgment the Budget Committee will make cuts. I have shared that with the Senate — specific cuts that were a product of 8 days of agonizing appraisal of programs. We are perfectly willing to let Senator ROTH take advantage of those cuts in coming up with his totals, but he calls them smokescreen cuts, so perhaps he does not want them. But I shared them.
Then I took the responsibility that I assume the Roth resolution would impose on me. The Roth resolution says to me and my committee, "You shall produce a budget with outlays no higher than 21 percent of GNP." After proposing to impose that responsibility on me, he proceeds, in the course of the morning, to question my ability to do it.
The PRESIDING OFFICER. The Senator's 5 minutes have expired.
Mr. MUSKIE. I yield myself 5 additional minutes.
I assumed the responsibility, nevertheless, so that I could let Senator ROTH and his colleagues know where I think the cuts would have to be made. This is not a phony list.
If you want to make the cuts above the line on the chart I discussed earlier, you have a $20.1 billion increase in social security between 1980 and 1981, which includes the entire cost-of- living increase this year; or $17.9 billion in defense, which represents the entire increase in national defense over 1980; or $6.4 billion in medicare and medicaid, which represents the entire increase from 1980 to 1981; and then $4.3 billion for unemployment compensation, which represents the increase from 1980 to 1981.
Those are the targets, are they not? That is where you will have to cut, unless you go below the line on the chart, where you have $47 billion remaining, after you take into account appropriations that already are contracted out and committed and that you cannot change, even if you change the law.
Those are the choices. I am not making them here. I am just saying to Senator ROTH that this is where you will have to look to make that additional $29 billion in cuts. Apparently, he does not find it comfortable for me to say that. That is where you will have to look.
Under the Muskie substitute, what we will do is produce a balanced budget and make even deeper cuts than I have talked about here if we can, but I do not think we can get to $45 billion.
Then, to those who think we should get to $45 billion, we will produce an amendment in which we will make the moat equitable distribution among the targets to which I have referred, to give Senator ROTH and his colleagues an amendment to vote for, to the first budget resolution. That amendment will take us down to 21 percent of GNP, given whatever the estimate of GNP is on April 15. That is a commitment of the Muskie resolution. You will have a chance to vote for a Roth budget — in specifics, not phony cuts, not smokescreen cuts. The Senate will be given specifics.
Apparently, Senator ROTH does not like to have to vote on specifics, or perhaps he does not like some of his associates on his amendment to have to vote for specifics. He would rather have generality: Outlays shall be no more than 21 percent of GNP. Any effort on my part to indicate how specifically that will impact on programs, how specifically it will impact upon our constituents, how specifically it may impact upon defense, how specifically it may impact on social security, how specifically it may impact on veterans programs, how specifically it may impact on Federal retirement — those kinds of questions are irrelevant. They are called a smokescreen by Senator ROTH. He does not want to deal with the uncomfortable implications of specific cuts that will be necessary in order to achieve his $45 billion reduction.
The PRESIDING OFFICER. The Senator's 5 minutes have expired.
Mr. MUSKIE. I yield myself 5 additional minutes.
Mr. President, one further comment on the Roth list of cuts.
I do not pretend to have made a comprehensive analysis of all of those cuts. There are several pages of them. We usually review them through the Congressional Budget Office and our own staff and with the executive agencies in appropriate cases, in order to analyze the cuts.
So what I have said here today is not necessarily the last word; but I think that to the extent there is some useful preliminary perspective on the validity of these cuts, that perspective has to be stated.
I ask unanimous consent that a preliminary staff analysis of the Roth proposals be placed in the RECORD at this point.
There being no objection, the analysis was ordered to be printed in the RECORD, as follows:Mr.
MUSKIE. If I have misstated it in any way, I will apologize.
I was not given these cuts in advance, with an opportunity to scrub them, as the OMB puts it, in order to make sure that I am not misstating what Senator Roam is claiming. So I have confined my remarks to a few of the reductions he proposes on which I believe there is a perspective to be given.
I have not pulled my numbers out of the air. They are not the product of any prejudice against the Roth resolution or my opposition to it. They are the product of the staff and the organizational structure we put into place in order to guide Congress on budget numbers and budget implications. That is what I have tried to give.
With that, Mr. President, I yield the floor.
Mr. ROTH. I yeld myself time on the resolution.
Mr. President, I think the statement by the distinguished chairman of the Budget Committee almost states better than I can what the problem is in trying to put a lid on Federal spending.
As one Senator who has tried to restrain spending, I can say it usually has been the reaction of at least some of the members of the Budget Committee to ridicule and criticize the good faith efforts of those who feel that the Federal Government is out of control.
In years past, I have brought up proposed legislation for across-the-board spending cuts and was attacked strongly — that that was being irresponsible, that it was a meat-ax approach. Then, when one offers specific cuts, as I have done, in a rather detailed memorandum, the game is to attack each of those, even though many of these cuts also are on other lists, including that of the ranking minority member of the Budget Committee.
The thing that bothers me the most, and I am not going to spend time criticizing or trying to answer each of the charges, is that instead of welcoming the aid of those who strongly believe that Federal budget deficit spending has had a serious negative impact on our economy, we find that we are ridiculed, attacked, and told in essence that it is none of our business, that this is the prerogative of the Budget Committee.
Mr. MUSKIE. Mr. President, will the Senator yield 30 seconds?
Mr. ROTH. I am happy to yield.
Mr. MUSKIE. I do not think I have said that. We have a process in which Senators can come into the Budget Committee. They have representatives on it. And we can look at numbers such as this and we welcome them. The budget process requires this.
But to try to do it in the Chamber, pulling numbers out that have had no analysis at all, the Senator is saying we should just accept these numbers without examining them?
Mr. ROTH. I have to leave, but I just point out that the chairman just called them phony cuts. I pointed out, and I have said this several times, that the cuts the Senator proposes were not smokescreen cuts in the sense that they were phony, but I felt that the big spenders who are talking about balancing the budget are using the balancing of the budget as a smokescreen; in other words, they do not want to really take the steps that are necessary to keep Federal spending from exploding and from having the highest taxes in U.S. history. The chairman wrote us a letter recently asking for our proposals. The proposals I submitted have been analyzed within my office. We have discussed them with a number of people, including CBO, agencies, and so forth. But I have to admit I do not have the 300- or 400-person staff that the CBO has.
But the point I am trying to make is that if we are really going to be able to put a lid on spending so that we can give some supply-side tax relief, then, all of us have to work together.
Mr. MUSKIE. Mr. President, will the Senator yield?
Mr. ROTH. No, I cannot yield at this time because I unfortunately have to leave.
I never said it had to be these cuts. But I did try to react favorably to his letter asking us to give our list of cuts.
Last year I went before the Budget Committee — I was one of two Senators — and made my proposals. I may be wrong on some of those, but it was a bona fide good-faith effort to do something constructive.
Mr. MUSKIE. Will the Senator yield?
Mr. ROTH. No, I will not yield.
Mr. MUSKIE. All right. I thought the Senator would like to know that I welcome his suggestions.
Mr. ROTH. Mr. President, I have not yielded.
The PRESIDING OFFICER. The Senator from Delaware has the floor.
Mr. ROTH. Mr. President, we have already discussed in some depth about what is 21 percent of the gross national product. We all know that the CBO and the others are using the most negative factors to try to make the proposal look inappropriate and unreasonable.
Again, there is not a good-faith effort, in my judgment, of sitting down and working together, saying, "How can we hold down Federal spending?"
As I pointed out, the chairman himself 6 months ago said that we should keep the Federal budget at $596 billion. But every year spending just goes up month by month.
The people back home are finding that their income is going down roughly 18 percent a year. Eighteen percent inflation means the typical American family is losing something like $300 a month in buying power.
They do not want to hear you say you cannot cut these spending programs. They want some action. They want some can-do spirit. They want to see Congress say we can devise a strategy that is going to work, that gives them some hope and confidence in the future.
Senator MUSKIE says that these cuts cannot be made, none of them. He says they are false; they are phony. That is just not true.
Even Government contracts can be terminated. Every Government contract has a right of the Government to terminate for its convenience. So do not say it cannot be done. Maybe it should not be done, but it can be done.
I have no doubt what is going to happen. As I said, while the chairman was away, the majority is going to prevent a vote on our proposal up and down, and they have that right. But that is not going to be the final chapter.
The American people are listening and they are looking for some leadership. Look at what the economists and the various people in the private sector are saying about the President's proposal.
They are saying it is inadequate, it will not do the job. It does not provide strong leadership.
I hope that somehow reasonable men in the Senate will work together and try to devise a program not only for this year, but for the next several years to begin to bring our Federal spending under control, to begin phasing in some real supply-side tax cuts, so that once again this country can begin moving upward and the American people will be facing a better standard of living rather than downward.
I yield back the floor.