March 26, 1980
Page 6647
Mr. BELLMON. My fears that this embargo will have the same disappointing effects as former embargoes are being realized. I do not believe the cost of the Soviet embargo will be as high as recent estimates show; however, there will be significant costs associated with this decision. And who is to pay the embargo decision — the American farmer and American taxpayer.
Mr. President, Senator TALMADGE is offering an amendment to S. 2427 which would provide needed changes to the farm storage facility loan program. This amendment would allow farmers to have more control over their own economic destiny by being able to store and maintain possession of grain in anticipation of higher prices. This amendment would increase the maximum authorized loan amount from $50,000 to $100,000, a change to recognize continuing inflation which has made storage facility construction much more expensive. A grain silo which will hold 32,000 bushels of dried corn and is 24 feet in diameter and 80 feet high costs approximately $63,000, exclusive of loading equipment also needed. In addition, the Soviet grain sales embargo has increased the need and utility for more on-farm storage. I support this amendment.
S. 2427 with the Talmadge amendment will reduce the costs of the administration's policies to mitigate the effects of the Soviet grain sales suspension. The Senate Agriculture Committee has provided a responsible cost savings bill in S. 2427. This bill should save over $40 million in fiscal year 1980 and over $25 million in fiscal year 1981. This will help with our ongoing budget efforts to reduce Federal spending and balance the budget.
Mr. President, the farmers and ranchers of this country are confronted with an unprecedented squeeze caused by declining prices and increased cost of production. The 1979-80 fertilizer costs are up by 35 percent, fuel prices are up by 83 percent, and interest costs up by more than 42 percent. I submit for the RECORD the following USDA table showing the increase in selected prices paid by farmers:
[Table omitted]
I remain greatly concerned that the administration's mitigation actions of the Soviet grain embargo may be insufficient to protect the American farmer from adverse effects. S. 2427 is a positive step in righting that situation.
The PRESIDING OFFICER. The question is on agreeing to the amendment of the Senator from Georgia.
The amendment was agreed to.
Mr. MUSKIE. Mr. President, the Senate is now considering S. 2427. This bill would permit farmers who did not participate in the 1979 set-aside programs to receive price support loans under the farmer-held reserve programs. As amended by the Agriculture Committee, this bill would also increase the maximum individual loan under the storage facility loan program.
The administration's efforts to mitigate the adverse effects of the Soviet grain sales suspension will be aided further by this new authority. By allowing more grain to be isolated from the market under the farmer-held reserve program, this legislation as amended should reduce the Federal costs of maintaining farm prices by almost $40 million this year. Without this new authority, the Department of Agriculture would be required to purchase grain directly, at a higher cost, to meet the President's commitment to American farmers.
In addition to the cost-saving aspects of this bill, there is one other budgetary matter that should be brought to the attention of the Senate. Technically, this bill and amendment are in violation of section 401(b) (1) of the Budget Act. That section provides for a point of order against any entitlement reported after January 1 which takes effect prior to October 1 of that year.
The purpose of section 401(b) is to make sure that entitlements do not take effect prior to the adoption of a second budget resolution and completion of the reconciliation process. New entitlements would be less vulnerable to reconciliation if they had already taken effect by the time of the second resolution.
Although S. 2427 is subject to a point of order under section 401 (b) (1), I believe that the purposes of the budget process are not served by raising that point of order in this case. With our ongoing efforts to reduce Federal spending, I would urge Senators not to block consideration of this bill on technical grounds when it really would save tax dollars in 1980 and 1981.
The Budget Act was not intended to frustrate congressional action when that action is consistent with the current congressional budget. Especially, any action to reduce fiscal year 1980 spending is consistent with the budget resolution. So I will not raise the point of order and I urge approval of this bill.