CONGRESSIONAL. RECORD — SENATE
March 25, 1980
Page 6480
Mr. ROTH. Mr. President, I yield 4 minutes to the distinguished Senator, the Senator from Illinois, on the resolution.
The PRESIDING OFFICER (Mr. BAUCUS). The Senator from Illinois.
Mr. PERCY. Mr. President, I hope that the answer from the Senate today will not be a resounding "No." I hope that this vote will not be looked upon as a partisan matter.
I cannot imagine anything worse for the Senate to do today than to reject a proposition which was hammered out and put forth by Republicans of all philosophies, not just this week or this month, but last summer. Our economic plan was presented to the country at that time, and had, I think, an outstanding response. I hope there are enough Members on the majority side who will say that this is the time to bite the bullet, this is the time to do something about inflation. I urge my colleagues on the other side of the aisle to bury partisanship and work together with the minority — and I reiterate, work together with the minority — in finding an answer to this problem.
The people of Missouri have spoken very clearly through my distinguished colleague, Senator DANFORTH. He served with me for the past year on the Republican Task Force on Productivity and Capital Formation. The people of Illinois and all States are speaking out very clearly for action on inflation. The Roth resolution offers us a beginning.
This morning, the Labor Department released the February Consumer Price Index and, like the January CPI — of which February was an exact duplicate — it is good reason for alarm. An annual inflation rate of 18 percent cannot be tolerated and cries out for effective policies to deal with it. There has been a great deal of commotion in Washington since the January inflation rate was released. The President has suddenly scrapped his January budget to show his concern for inflation.
Yet, we still lack a true anti-inflation program.
Inflation cannot be solved, as we all know, by just one action. It cannot be solved by Federal spending restraint alone. There are many aspects of inflation. The business community and organized labor cannot say, "It is all your fault down there in Washington." But Government must bear its share of the blame. There are things we can do and must do, but there also are things that can be done by business, by labor, and by consumers. A broad-based program is essential for us to combat inflation.
The Republicans developed such an economic program last summer, as I have indicated; and it was re-endorsed recently by the Senate Republican Conference. Our anti-inflation program is multifaceted and recognizes that there are several sources of inflation. Our economic principles, in a summarized form, are as follows:
First, limit Federal spending to 21 percent of GNP in fiscal year 1981. This is the first step we are taking today.
Second, balance the fiscal 1981 budget without a tax increase and work for subsequent balanced budgets.
Third, reduce taxes to encourage greater individual and business savings, investment, productivity and job formation.
Fourth, reduce America's energy dependence on foreign imports by 50 percent over the next decade.
I commend the distinguished assistant majority leader, Senator CRANSTON, for the leadership he has provided, following in the footsteps of Hubert Humphrey, as co-chairman with me of the Alliance to Save Energy. We recognized many years ago, when we established the alliance, that one of the best ways to combat inflation, and help our balance of payments, is to cut down the wasteful consumption of energy and to become more self-sufficient. So this call for a 50-percent reduction in the next decade is an essential goal.
Fifth, institute an immediate regulatory reform program;
Sixth, implement an export drive;
Seventh, encourage the establishment of labor-management committees to improve U.S. work force participation and productivity.
Our consideration today of the Roth resolution, calling for a fiscal 1981 limit on spending, is just part of a call for a comprehensive anti-inflation program. I am encouraged that other parts of this program are on the way to realization, but none of them will have more of an impact on inflation than imposition of fiscal discipline.
The resolution before us will require cuts of about $25 billion in next year's budget. The $13 billion in cuts the President has recommended are not sufficient — without a tax increase — to bring the budget into balance. It is time we told the American people this truth and ceased playing games with them. This President plans to balance the budget with tax increases when taxes are already at their highest level since World War II.
I do not want to dismiss entirely the President's program. It is too little and too late, but it is at least a start. The President has started, and we support that beginning, but we simply do not feel that it is going to achieve the desired end at the levels the President is talking about.
Inflation is eating into the substance of every American's paycheck and lifestyle. When we run up an inflation rate of 18 percent, savings are eroded quickly, the elderly cannot make ends meet, and high interest rates make business expansion and financing an education simply impossible. Everyone is affected by inflation and, after awhile, it begins to undermine confidence in the Government and in all our institutions.
So it is important to get a grip on inflation now and not lock the barn door after the horse has run away. To date we have not had a serious effort by the President to get the budget under control.
I think we in Congress have a serious effort underway now, and I commend both the House and the Senate on the serious effort that is being made. But it is a job in which we must work hand in glove together with the President, and I think the President's hand can be reinforced and strengthened when he sees firm resolve by Congress in this regard.
Just look at the President's 1980 budget, submitted only 2 months ago: Spending outlays were set at $616 billion and revenues estimated at $600 billion for a $16 billion deficit. Now that deficit sounds pretty good compared to the $35 billion deficit we will have this year, until one takes a look at the budget estimates the Budget Committee made last fall for fiscal year 1981. At that time, $597 billion was estimated for total outlays; revenues were projected to be $604 billion — with a $7 billion surplus. How far we traveled in just 2 months — from a $7 billion surplus to a $16 billion deficit.
Mr. President, the following table, which I ask unanimous consent be printed in the RECORD at this point, summarizes the progress of the fiscal year 1981 budget.
There being no objection, the table was ordered to be printed in the RECORD, as follows:
[Table omitted]
Mr. PERCY. Mr. President, what this table tells us is that we are dealing with budget sleight-of- hand when the President says he will balance the budget through spending cuts. The so-called $13 billion in cuts recommended by the President in March will simply trim off the budget growth that occurred between January and March. Those are not deep cuts. They do not even get near the original estimated fiscal year budget of $597 billion that Congress thought was on target last fall. In other words, the President's budget-cutting efforts are all mirrors and smoke. There are no real cuts.
Mr. MUSKIE. Mr. President, will the Senator yield on that point?
Mr. PERCY. I will be happy to yield on the Senator's time, because I do not control the time on this side.
Mr. MUSKIE. I yield a couple of minutes on this side.
I do not know how many times I have to go over this point. I have done it several times today.
The President's cuts are the same cuts that the Budget Committee is going to make, the same cuts that would have to be included by Senator ROTH if he is to cut $45 billion from the President's programs.
I cannot understand why those cuts are real cuts on the basis of Senator ROTH's proposal but phony cuts when it comes to the President's budget or my resolution. They are the same cuts. Describing them as something else, I do not think changes that fact.
I have made this point several times this morning. I seem to have to make it with every speaker who rises on that side of the aisle.
I do not see how you are going to get $45 billion in Roth cuts without including the cuts, $16 billion of them, that would go into the Senate Budget Committee's balanced budget approach.
How do we get up to the balanced budget with phony cuts and get to real cuts only then?
I do not understand that, I say to the Senator from Illinois, and I think we should get down to talking about facts here, There is no such thing as phony cuts in anything I have discussed this morning. They are real cuts. If the Senator does not believe it, wait until his constituents start hitting him with complaints about cuts the Budget Committee is going to make in order to achieve a balanced budget. I do not know how we are going to achieve a balanced budget with phony cuts.
I have been chairman of the Budget Committee for 6 years, and I have proposed spending reductions that the Senate has refused to honor. What is phony about that? If it is real enough so that Senators vote for real increases in order to avoid the phony cuts we propose, which is phony, the cuts or the increases?
I am becoming a little fed up with this kind of shallow rhetoric that is used to obscure the real facts.
Senator ROTH talks about smokescreens. He has erected more smokescreens here this morning, as well as other speakers on that side, than I could build after a year of training with Indian smoke signals. There is no way of doing it that way. We have not done it with mirrors. We are talking about $16 billion in real cuts, and I assume that Senator ROTH is talking about $29 billion more in real cuts, and that is the issue, the $29 billion more — a total of $45 billion.
If we would address ourselves to that, then we would see what the implications are of the Roth proposal as against the implications of the Muskie substitute.
Mr. PERCY. Mr. President, I ask unanimous consent for 2 additional minutes to complete my statement.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. PERCY. Mr. President, the table that I submitted for the RECORD shows that in January 1980 outlays were estimated at $616 billion and in March 1980, $625 billion.
Therefore, the $13 billion in cuts recommended by the President in March will simply trim off the budget growth that occurred since January. These reductions cannot in the opinion of the Senator from Illinois be looked upon as deep budget cuts for the budget is still growing by leaps and bounds.
Mr. MUSKIE. Mr. President, if the Senator will yield, the Senator is looking at something that happens three times a year. The Senator has been following the budget for years. He was part of the Government Operations Committee that wrote the Budget Act. Surely he is not unaware that budgets presented in January are the best guess of the budget-numbers people of what will happen beginning the following October.
He is talking about a budget that is not going to end for a year and a half. To suggest that only the January estimates are valid is living in a dream world. We get the March reestimates every year.
This is not a different thing. We had March reestimates when Nixon was President. We had March reestimates when Ford was President. We get March reestimates in a Carter Presidency.
What you have to do is estimate the cost of inflation, which is volatile, the rate of unemployment, which is volatile, the estimates of program growth and demographics, which go up and down. So March reestimates being closer to the fiscal year are likely to be sounder, and then in July we get another round of re-estimates, and in September the CBO will reestimate the present figures on the resolution.
If the Senator will look over the record of the last 5 years, he will find that the reestimates change in the course of a year, as they should. What are we going to do, freeze our feet in concrete on the
January reestimates and to pretend that there has been no program growth between January and March?
Mr. PERCY. A parliamentary inquiry, Mr. President.
Mr. MUSKIE. I yield to the Senator.
The PRESIDING OFFICER. The Senator will state it.
Mr. PERCY. The Senator from Illinois said he did not have any time to yield and Senator MUSKIE indicated he would be speaking on the bill. Does that go also for the second commentary that has just been made?
Mr. MUSKIE. Of course. I do not want to penalize the Senator.
Mr. PERCY. We are limited in time on this side.
Mr. MUSKIE. I ask the time I just consumed be charged to the bill on our side. There is no problem.
The PRESIDING OFFICER. Time will be so charged.
Mr. MUSKIE. If the Senator wants time to respond, I am glad to yield to him.
Mr. PERCY. I thank my distinguished colleague because we are short of time on this side. I appreciate the comments of the chairman of the Budget Committee.
The PRESIDING OFFICER. Who yields time?
Mr. PERCY. I have asked for 2 additional minutes to finish my statement.
Mr. ROTH. I yield.
Mr. PERCY. I have in the past paid tribute to the Budget Committee and to Senator MUSKIE for his work on that committee. Today I would like to reiterate my respect for the chairman and his committee, which has given us a framework for budget discipline.
I have tried to explain, however, that I feel that the President's expenditure cuts are not real cuts. We have the same $616 billion in spending now, even with the President's cuts, that we had 2 months ago. There appears to be no discipline.
The second point I wish to make about the table I submitted earlier — and I do not think it can be subject to argumentation at all — has to do with the tax burden.
The table clearly shows the phenomenal growth in taxes that is taking place. Just since submission of the January budget, taxes are scheduled to increase by $25 billion. In other words, revenues are estimated to go up from $600 to $625 billion and this revenue increase was not even voted. When that is combined with the tax increase already forecast, we see that the budget will sock the American taxpayer with nearly $100 billion in new taxes over last year, a 17-percent jump.
So taxes are keeping up with inflation, even if every American paycheck is not. A 17-percent tax increase on one hand and a 2-percent budget cut on the other: This is not fiscal discipline and it is no wonder that the stock market plunged after the President's announcement on March 14 and is still on the skids. It is no wonder the bond market is still anemic and began another decline last week. The markets are sending us an economic message and we had better listen carefully if we are to avoid complete fiscal chaos.
Adoption of the Roth resolution today will send a signal to those financial markets and to the American people that the Senate is ready and willing to put the brakes on inflation. As I said earlier today, this is only part of a broad campaign we must wage against inflation, but this initial salvo can be a shot heard 'round the world.
And the world is watching to see whether or not we have the discipline, whether we have the fiscal responsibility in Congress to recognize that we are exporting our inflation all over the world. The rest of the world wants this Congress to act and support the Roth resolution today.
Mr. ROTH. Mr. President, I yield myself time.
The PRESIDING OFFICER. The Senator from Delaware.
Mr. ROTH. I am happy to see that the distinguished chairman of the Budget Committee has returned.
The PRESIDING OFFICER. Is the Senator yielding time on the resolution?
Mr. ROTH. Yes, I yield myself 5 minutes.
The PRESIDING OFFICER. The Senator from Delaware.
Mr. ROTH. Mr. President, when I use the term "smokescreen" I am not saying that cuts themselves, if actually made are a smokescreen. I am saying that the so-called concept of balanced budget is being used as a smokescreen to prevent Congress from taking any realistic action either from balancing the budget or from providing some tax relief.
I want to underscore once again what I am arguing is not a partisan matter. The Joint Economic Committee supported exactly what I am proposing. It spells out in detail that there must be some reasonable tax relief in 1981 and it quotes the figure $25 billion.
That is what the Roth resolution does and that is what the Muskie resolution does not do.
The Muskie substitute does not say how the budget would be balanced and does not say what would happen to taxes.
A number of times the chairman has attacked Members who cosponsored my resolution on the grounds that they have not voted for spending cuts.
I note with interest he did not mention two specific instances this year that I voted to limit or restrain spending.
I also note that the distinguished chairman of the Budget Committee also votes on occasion to increase spending. For example, he supported an increase in funds for the Hart Senate Office Building. He voted for $710,000 for the Dickey-Lincoln Dam. He voted to extend countercyclical revenue sharing which cost the American taxpayer an additional $150 million. He voted to raise the spending ceiling for food stamps from $6.16 billion to $6.78 billion. He voted to increase weatherization funds from $200 to $500 million in fiscal year 1980.
I might say on each of these issues I voted to the contrary.
Mr. MUSKIE. Mr. President, will the Senator yield?
Mr. ROTH. Not at this time.
Mr. MUSKIE. I just point out at this time in reply that those were within the budget.
Mr. ROTH. I point out, of course, it is his committee that controls the budget so he can always assert that, but I am not being critical of the distinguished Senator.
Mr. MUSKIE. Will the Senator yield on that point?
Mr. ROTH. No; I will not yield at this time. I am not being critical of those votes. I am not saying that they are irresponsible.
What I really want to see done is that the chairman of the Budget Committee, with others, sit down with all of us who have a great deal of concern as to what is going on with the economy.
Mr. MUSKIE. Mr. President, will the Senator yield on that?
Mr. ROTH. I want to finish my statement.
Mr. MUSKIE. The Senator is making assertions, each of which is wrong, and I am going to ask him to yield every time he does it.
Mr. ROTH. Mr. President, I am not yielding.
What I am saying is that what the country wants, what the country has a right to expect, is for Members of both parties, the leadership both from the Republican and Democratic sides, to sit down and try to work out an approach that will get this economy moving.
Mr. MUSKIE. Mr. President, will the Senator yield at that point?
Mr. ROTH. I am not yielding.