March 26, 1980
Page 6648
WINDFALL PROFIT TAX ACT OF 1980 — CONFERENCE REPORT
The Senate resumed consideration of the bill.
Mr. TALMADGE. Mr. President, I suggest the absence of a quorum.
Mr. ROBERT C. BYRD. Mr. President, I ask that the time be equally charged against both sides.
The PRESIDING OFFICER. Without objection, it is so ordered.
The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. LONG. 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 President, I ask unanimous consent that the order for the quorum call be rescinded.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. LONG. I yield to the Senator from Maine (Mr. MUSKIE).
Mr. MUSKIE. Mr. President, in Monday's CONGRESSIONAL RECORD, March 24, 1980, pages 6279-6283, a colloquy was entered into between the distinguished Senator from Louisiana, the floor manager of the bill, and Senator BELLMON, my colleague on the Budget Committee, with respect to section 102 of the conference agreement, which appears to some Senators, at least, to have the effect of earmarking the revenues from this bill. Senator BELLMON expressed his concern that the effect of that provision is to recreate the trust funds which the Magnuson amendment eliminated when the bill was before the Senate. That is not the way I read it.
Mr. LONG. Mr. President, if the Senator will yield for just a moment
Mr. MUSKIE. Yes.
Mr. LONG. The Magnuson amendment was agreed to and it did remove from the bill all the trust funds except one. It left in the bill the so-called taxpayers trust fund, which was a proposal originally by the Senator from Delaware (Mr. ROTH) . That taxpayer trust fund was not agreed to in conference. What we have of an earmarking nature is the result of the taxpayer trust fund, which went to conference and which was not stricken by the Magnuson amendment.
Mr. MUSKIE. The Senator has more accurately stated the point I wanted to make.
I have read that colloquy at length and will make reference to certain portions of it in a few moments. But in order to pinpoint the issue succinctly, I have prepared a colloquy and conferred with the distinguished floor manager of the bill on it. This colloquy identifies the significance of section 102 in a way that assures me that section 102 is merely an expression of desire, if you will, for the distribution of the windfall profit tax proceeds, but is not binding in any way on the President or on the Congress. If I may first put these specific questions to the distinguished floor manager, then I will refer to some of the comments he made in response to Senator BELLMON's questions, in order to further clarify the RECORD.
My first question, Mr. President, is this: Is it not true that the conference agreement does not establish any trust funds?
Mr. LONG. That is correct.
Mr. MUSKIE. Is it not correct that further legislation would be required to provide any tax cut or new spending from the windfall profit tax receipts?
Mr. LONG. Yes, that is correct.
Mr. MUSKIE Is it not also true that section 102 of the agreement does not bind this or subsequent Congresses?
Mr. LONG. Yes, that is right.
Mr. MUSKIE. Is it not true that, if the Congress should find that there is more money in one of the spending sub-accounts than is needed to achieve the intended purpose, that extra money can be used to reduce or prevent an overall budget deficit?
Mr. LONG. Yes, that is true.
Mr. MUSKIE. Is it not true that, in any year, if the Congress decides not to spend all of the money in any account, the remaining money could be used to reduce the public debt?
Mr. LONG. Yes, that is correct.
Mr. MUSKIE. If none of the money in the windfall profit account were spent in a given year, would not all of that money be applied to reduce the deficit or the public debt?
Mr. LONG. Yes, it would.
Mr. MUSKIE. Could not this same thing be true for all 10 years?
Mr. LONG. Yes, it could.
Mr. MUSKIE. If the Congress thought it appropriate to cut taxes by more than the amount in the tax reduction account, could not money be used from one of the other accounts?
Mr. LONG. Yes. whatever tax cut is enacted would be the law.
Mr. MUSKIE. Is it not still possible for the Congress to finance synfuels projects from the windfall profit tax receipts?
Mr. LONG. Yes. Future Congresses may finance these projects as they see fit.
Mr. MUSKIE. Is it not also true that the only thing required of the President is to propose an allocation of the receipts expected to flow each year into the windfall profit tax account?
Mr. LONG. Yes.
Mr. MUSKIE. Thus, is not the disposition of receipts suggested in the bill basically an indication of the sense of the Congress as to how this money should be used?
Mr. LONG. Yes, it is.
May I say, with reference to the question the Senator asked about reducing the debt, it was specifically suggested in the conference that we should have the reduction of the national debt as one of the purposes for which the money should be used. That suggestion was very much opposed by the Senator from Delaware (Mr. ROTH, who made it clear in the record of the conference that, obviously, if we did not use the money to reduce taxes, it followed that that would reduce the debt by that much. He simply did not want to negate the suggestion that it would be desirable to use this money to reduce taxes.
That is the basis of the suggestion that we would like to see the money used in this fashion, but it is not binding on anybody. Even those of us who are conferees are not bound by it — anyone here, any one of the conferees, including the chairman of the conferees, the Senator from Louisiana. Tomorrow or today, I could change my mind and say, "The more I think of it, the better I think it would be to use it for some other purposes."
Mr. MUSKIE. I appreciate the clarification of the issue, and I am going to take the opportunity, because I think it is helpful, to quote some of the colloquy on the pages in the RECORD to which I have just referred.
For example, on the bottom of page 6279, Senator Long is quoted in this way:
Mr. LONG Mr. President, let me just speak to the earmarking in the conference report. That is simply a statement that the Treasury will keep a record of how much is collected and will attempt to keep some record of where the money goes. We say in the law that we think 25 percent ought to go to lower income households, 60 percent for income tax reductions, and 15 percent for energy and transportation programs. But that is not binding.
Those Appropriations Committees can recommend appropriations the way they want to do it. The tax-writing committees can either recommend or not recommend tax cuts. And the Budget Committee can recommend whatever it pleases about any of this.
So that while that is stated as a statement of desire, it is not binding. The Senator can use it all to balance the budget, if he wants to, provided the Senate will support him on that.
Then later, on page 6280, Senator LONG had this to say about the Magnuson amendment as it relates to this bill:
Mr. LONG. The Magnuson amendment deleted trust funds from the bill. We do not set up trust funds.
The Magnuson amendment repeals the trust fund set by the committee. We are not setting up trust funds here. There are no trust funds set up. They will simply have some accounts over there in the Treasury where they will keep track of how much money is taken in by this tax, and we set forth a very noble hope that the money would be spent for certain useful purposes.
I regret to say there is no more assurance that the money is going to be spent the way we would like to see it spent than there is for other money being spent the way the Congress would like to see it spent. It is the expression of a hope and it is not binding.
Continuing further on the same page, Senator BELLMON says:
Could the Senator choose to spend some of this money or propose to spend some of this money for defense? It is not one of the three worthy purposes set forth in the report.
Senator LONG had this to say:
He can propose to spend as much money as he wants to spend. Assuming we run a great big deficit, which would not be unusual, then if he did not spend any of this money for the purposes indicated here, under a consolidated budget, it would be just the same as if we had never earmarked it to begin with and never had any separate account to keep track of it.
Then further on page 6281:
We agreed at the time, and it was clear to me every step of the way, that it was never intended to be binding on anybody. It is binding. None of this takes place unless the Congress sees fit to pass it.
If Congress does not want to pass it, then Congress can spend the money however it wants to spend that money. There is nothing whatever in there that says Congress cannot spend it for any purpose that is permitted under the Constitution of the United States. So while we do express our hope that 60 percent will be used to reduce income taxes, 25 percent will be used for low-income relief, and 15 percent will be used for energy and transportation programs, none of that is binding.
Mr. President, that is the end of the comments which I had identified for quoting at this point.
But I say to those who read the RECORD and are interested in the full colloquy, including the doubts expressed by Senator BELLMON, who has real doubts about the implications of this language, that the full colloquy is on pages 6281-6286 in the RECORD. Those who want continuity in the discussion can read Senator BELLMON's reservations as well as Senator LONG's statement.
Mr. LONG. Mr. President, as the Senator so well knows, where we have a trust fund, it be the wisdom of the Congress not to spend the money out of the trust fund, but to spend the same amount of money for some other purpose. On a consolidated budget, the deficit is the same, in either event. To balance the budget, the fact that money remains in the trust fund serves the same purpose as if we did not have a trust fund and did not spend the money.
But, at least, having a trust fund does have the effect of placing a burden on those who desire not to use the money to respect the fact that in creating the trust fund the previous Congress intended the money should be spent for that purpose designated in the trust fund.
We went to conference with a trust fund. The taxpayers' trust fund. That was the Roth amendment in the Finance Committee. We came back from conference without a trust fund. All we have is an account in the Treasury to identify the money.
There is certainly less burden on the Congress where we have an account on the books to indicate from whence the money came, to spend the money in a particular way, than if we had a trust fund set up for that purpose.
So insofar as people wanting the money to be available to be spent the way they would like to see it spent, and the freedom to do it that way, I think they have greater freedom with what came back from conference than with what went to conference.
But, in any event, if the Congress does not want to spend a nickel of this money, it will not be spent. If it does want to, it has the power to do it.
Mr. BELLMON. Mr. President, first of all, the language, to me, is very plain. I realize there are differences. But it says:
(1) Basic net revenues.— In the case of the amount of basic net revenues allocated to the Account for any fiscal year, there shall be a further allocation to sub-accounts for the following uses:
Use for: Percent
Income tax reductions 60
Low-income assistance 25
Energy and transportation programs 15
(2) Additional net revenues.— In the case of the amount of additional net revenues allocated to the Account for any fiscal year, there shall be a further allocation to sub-accounts for the following uses:
Use for: Percent
Income tax reductions 66⅔
Low-income assistance 33⅓
According to this bill, we have allocated every dime it will raise, plus any surplus. It is all set forth very clearly. Yet in our colloquy, after the Senator from Louisiana made the comment that it would be just the same as if we never earmarked it. To begin with, we are earmarking it.
I think the Senator will agree to that.
It is going to take action by the Congress to unearmark it. This is a very definite tilt in favor of these spending powers.
Mr. LONG. Clearly, what we did here was to say we would like to see the money spent for that purpose. Yes, we did.
Mr. BELLMON. Is the Senator asking Congress to agree?
Mr. LONG. Yes, that is right.
Mr. BELLMON. Once we have done that, we have earmarked the money for that purpose. We can change social security, but we do not do that.
Mr. LONG. Let us assume we say, "Yes, it has been earmarked."
Let me show the Senator a piece of a dollar bill. Let us say I bend it — it is a $10 bill.
Let us say I fold this corner over. When I did that, I had in mind spending that to buy a meal. Now, I change my mind. I decide to hire a taxicab with it.
It is the same $10 bill. It serves exactly the same purpose. It has a little crease on it. It does not make the least difference.
The same dollar in this case would not have the crease. We can do whatever we want to do with it.
Mr. BELLMON. It does have a crease. We are putting an indelible mark on it when we agree to this conference report.
Mr. LONG. And it is still worth the same dollar.
Mr. BELLMON. It also has a label saying we are going to spend 60 percent for income tax reductions, 25 percent for low-income assistance, and 15 percent for energy and transportation programs.
Unless Congress passes a law changing that, we are stuck; our hands are tied.
Mr. LONG. Let us assume the Senator says "Congress will, Congress shall, Congress must."
Suppose the Senator said all that, which this does not say. Then all you have to do to spend it any way you please is simply to say, "Notwithstanding any other provision of law, the money will be spent this way."
In this case, you do not even need to do that. You can spend the money any way you want and give it no further thought.
The fact that you have an account in the Treasury that says this money came from the windfall profit tax and you have language on the books that says we would like to spend the money for these purposes does not impede you one bit. You go ahead and appropriate any amount of money you want to, for any purpose, so long as a majority in the House and the Senate vote for it and the President signs it into law. This is a mere statement of desire and intent, and it does not bind anybody unless Congress passes a law authorizing and appropriating the money.
Mr. BELLMON. I am sure the Senator will agree that anything this Congress does can be changed by the next Congress. If the next Congress chooses, it can wipe out social security.
Mr. LONG. It can be changed the minute we pass this bill. You do not even need a provision in there saying "notwithstanding." You can go ahead and spend the money any way you wish — the money we put in.
This tax increases the income of the Federal Government by that amount, that precise amount, and the money that is spent from the Treasury can be spent in the same amount, without having a deficit. To the extent that you go above that, you could have a deficit.
Mr. BELLMON. But the Senator will agree that we can do the same with social security or food stamps or WIC or any other program on the books. The fact is that once we get them on the books and the people become used to receiving those benefits, it is the law. Here, when we write the law, Congress, after a time, will have a difficult time changing it. This is earmarked.
Mr. LONG. Let me explain this to the Senator.
If you never knew that this statute was on the books, you would have the same power to spend money out of the Treasury that you would have if you did know it. So you would be just as well off not knowing it as you would if you did know it.
Somebody might rise on this floor and make an argument — and I can picture the Senator from Delaware making this statement — "Senators, you are under a burden to support my amendment to reduce income taxes, because when you passed this bill, you said in the law that you think it would be good to spend 60 percent of this money to reduce income taxes, and you are under a burden to go along with me on this."
When he makes that speech, if you like the amendment, you will vote for it; if you do not, you will vote against it. That is how you are going to react. If he has a hundred points for his argument, that is one of them — that you said in the bill that that is how you would like to see the money spent, reducing taxes.
I would like to see 60 percent of it spent to reduce income taxes. I am proud to say that I am for tax reduction. I would like us to reduce the social security tax as well, which is what the amendment was to begin with, to cut the social security tax. We would like to use some of that money for that purpose, but we did not come back here with that. The House said, "We will go along if you would like to use some of this money to reduce the income tax."
Mr. MUSKIE. Mr. President, I think it might be useful if we include in the RECORD at this point the language in section 102, so that Senators may read the actual language.
I have discussed these questions with my good friend Senator BELLMON, with whom I am more often in agreement than in disagreement on budget matters. I had some of the same concerns he had.
Frankly, I wish the issue were not raised by the language of the bill. But I am satisfied that the language is not binding. It has been a long time since I practiced law, but I think my judgment is right. It does not create a trust fund, and I do not see that it in any way binds the President's or Congress decisions.
If the President decides in a particular year, that it is not in the country's interest to propose spending money in accordance with these purposes, he is perfectly free to say so. The language says that "the President shall propose for each fiscal year to which this section applies an allocation of the net revenues among the uses set forth in subsection (b) ."
He may decide that no allocation for these purposes is in the best interests of the country, and I see nothing in this bill to prevent him from making such a decision.
If he made no such decision and Congress disagreed with him, Congress could enact legislation to implement those allocations. But there is nothing that requires Congress to do so. The money would be in the Treasury and available for expenditure under other laws that are unrelated to this one; and those laws will not be subject to challenge in the courts or elsewhere simply because they fail to implement this law.
So I do not see anywhere that section 102 is binding. It is an expression of desire, an expression of wish.
As chairman of the Budget Committee, I do not believe that we are bound to use the revenues from the windfall profit tax in accordance with these formulas. If I thought it wise in a particular year to do so, I might recommend or join the Budget Committee in recommending it to the appropriate committees, but I am not bound to do so, and I do not see that the President is bound
to do so. It think it is an expression of wish and desire.
It does not serve a useful purpose to interpret these provisions as though they were binding because that might conceivably lend them a meaning which they were not intended to have.
Mr. LONG. I want to make clear that at no time has anybody suggested that this was binding on anybody.
Let me make reference to a situation in which we did require the President to make recommendations. We required the President, in the debt limit bill, with an amendment I offered, cosponsored by the Senator from Maine (Mr. MUSKIE), that if the President did not submit a balanced budget, he should make recommendations as to the way the budget could be balanced.
Here is a page of the budget of the U.S. Government, fiscal year 1981. Look at page 319. Here are alternate budget proposals.
The President suggested, "If you fellows want to balance the budget, look at page 321. Why don't you put on a 6-percent surtax?"
In my judgment, he knows we have no more intention of putting on that surtax than we do of taking a quick trip to the Moon. He said, "If you fellows want to balance the budget, why don't you put on a 6 percent surtax?"
He goes on and says, "Here are some spending charges," and he suggested some things. We have no intention of doing most of those things.
Look at pages 322 and 323, and there might be something in there that somebody might like to do. I gain the impression, and so does our staff, that most of the stuff he recommended there, he knows we have no intention of doing. But, to be fair about it, he did suggest it. He said, "If you fellows want to know some ways to balance the budget, here are some suggestions."
I am not sure whether that is how he would like to do it forever, or whether he wants us to do that; but since he told us to make recommendations, he said, "You can do this and that and the other thing."
Frankly, I think the Budget Committee has made us a more good faith proposal of what it intends to follow through with, something that can be done, than the President's recommendations. But at least he recommended some alternatives.
Mr. MUSKIE. Similar to the resolution we adopted yesterday. The issue yesterday was whether the Budget Committee should be mandated to report a budget that reduced outlays to 21 percent of the GNP. We finally mandated a balanced budget and, in addition, asked the committee to report such additional cuts as would reduce outlays to 21 percent of the GNP.
There is nothing in that which makes it binding on the Budget Committee to recommend those additional cuts. Neither does it forbid us from recommending those additional cuts. We can do either. But the Senate wanted the benefit of having those recommendations before it.
Mr. BELLMON. Mr. President, will the Senator yield?
Mr. MUSKIE. Yes, I am happy to yield.
Mr. BELLMON. I am not sure I understand my friend.
Mr. LONG. Hold on a minute.
Mr. President, how much time remains?
The PRESIDING OFFICER. The Senator from Louisiana has 41 minutes remaining; the Senator from Kansas has 48 minutes remaining.
Mr. LONG. Will the Senator object to taking this out of the time of the opposition?
Mr. BELLMON. I am glad to. I do not see the Senator in the Chamber.
I ask unanimous consent that I have 5 minutes on Senator DOLE'S time.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BELLMON. The point I wish to raise, and I think it is the gist of the whole thing, is that the Senate did act yesterday and in effect gave the Budget Committee certain instructions. If we adopt this conference report, which we will decide tomorrow, in my opinion we are also giving the Budget Committee instructions. We are instructing the Budget Committee that these revenues shall be used in this way.
Suppose later the Senate does not do that. That is fine. I say this ties our hands.
Mr. LONG. I do not think it ties the Senator's hands. The chairman of the committee does not think it ties the Senator's hands.
Mr. BELLMON. What does it do then? Is this just a funny paper we are reading here?
Mr. LONG. It is a statement of intent.
Mr. BELLMON. It is not in the conference report. It is in the law. It is in the body of the report.
Mr. LONG. We passed this. We went to conference on the taxpayer's trust fund.
Mr. BELLMON. We understand that.
Mr. LONG. It is a trust fund.
In my judgment, this is less binding than a trust fund so that if the Senator is worried about being bound, he is not as much bound by this as he is with the trust fund.
Let me say that in any event this expresses an intent that we wish to use 60 percent of the money for tax cuts, and I wish to see that happen. If the Senate does not want to do it, I would be the first one to recognize the right of the Senate to do whatever it pleases about the matter.
Mr. BELLMON. The Senate will do that.
Mr. LONG. I am glad to hear the Senator say that. That is what I have been saying.
Mr. BELLMON. The Senate can do anything it wants to with any law on thebooks. The problem is once we get the laws on the books we tend to respect them.
This language says very clearly that these funds are hereby allocated, and then it goes on to say that for the net revenues that are allocated there be a further allocation for the following uses.
Over here, on the next page, it says the President shall propose. It does not say it is our advice. This is compulsory language. I do not know how we can write it any stronger.
Mr. LONG. There is nothing that compels us to spend it. We cannot spend it without authorization and we cannot spend it without appropriation.
Mr. BELLMON. That is true about every dollar. The so-called uncontrollables can be changed if we change the law. We do not change the law. Once we write a law around here we tend to leave it alone.
Mr. LONG. We have a low-income provision in there, and the low-income provision is actually an authorization. So we do have an authorization for the first year for the low income. After that it is not.
Mr. BELLMON. Is that binding?
Mr. LONG. it is an authorization for an appropriation. For the first year we have an authorization for appropriations.
Mr. BELLMON. The Senator knows once we get those low-income people hooked on this money, we never take it away from them.
Mr. LONG. Not necessarily. We have a low-income program right now. It is just because of inflation. It is not necessarily that is the case at all.
Mr. BELLMON. I cannot understand the need for this. We have an Appropriations Committee. If the funds are available, the Appropriations Committee is going to look at various priorities and make the appropriations. I do not know why the Finance Committee has to tell the Appropriations Committee how to use these revenues.
Mr. LONG. Yes. With all due deference to my good friend, the Finance Committee has the right to tell the Finance Committee what the Finance Committee should do. I have a right to tell RUSSELL LONG what RUSSELL LONG should do, and I have a kind of a duty to my own conscience whether someone likes it or not.
Mr. BELLMON. There is no difficulty with that. The Finance Committee does not appropriate for energy and transportation.
Mr. LONG. We handle the tax bill. I defy the Senator to show me where it says the Appropriations Committee handles the tax bill.
Mr. BELLMON. I do not make that claim at all. I say we should appropriate but do it without having our hands tied by the Finance Committee. I do not think the Finance Committee wants the Appropriations Committee to pass on a tax bill. We do not like to have the Finance Committee passing on appropriation bills. That is what it is all about.
Mr. LONG. May I say to my good friend that I was under a duty to bring back something in this area because the Senate gave us the taxpayer trust fund,an idea Mr. ROTH had, and he fought hard for it in the committee and he prevailed, and he prevailed out here in this Chamber, and I would be derelict in my duty if I just dumped out Mr. ROTH's taxpayer's trust fund without trying to bring something back to show for it.
Mr. BELLMON. The Appropriations Committee and the Budget Committee are going to be derelict in their duties if they do not follow the instructions of the Senate the same as the conference committee had a right to do. The whole thing is a loaded gun.
Mr. LONG. That may be good news for Mr. ROTH. He may be pleased that the Senator feels he has his hands tied to do what Mr. ROTH wishes to see him do.
That would be all right with me. Take my word for it. No one can make a Senator vote yes on a bill unless he himself makes that decision.
Mr. BELLMON. I yield the remainder of my time.
Mr. MUSKIE. Mr. President, will the Senator yield briefly?
Mr. LONG. I yield to the Senator.
Mr. MUSKIE. I wish to emphasize that what the language says is that the basic net revenue is to be allocated to an account in the Treasury.
It does not say authorized for appropriations. The phrase is "allocated to an account," which suggests a bookkeeping transaction in the Treasury and nothing more. It does not mean you cannot spend the money that is accounted for in the Treasury for other purposes. Congress is free to make any decision with respect to these funds. That is the way I read it.
My good friend from Oklahoma may feel bound to treat this as though it read "authorized for appropriation." I would not.
The chairman of the Finance Committee may someday challenge me on the basis of this language, in which case I will refer him to this colloquy, and to the language on page 118 in the conference report, which says:
Further legislation is needed to use the money raised by the tax for any of the purposes specified above. Failure to enact such legislation, of course, would mean that the revenue from the tax would have the effect of reducing the Federal deficit.
I hesitate to see any part of this RECORD treating this as a trust fund, which it is not. The RECORD should make clear what was the intention of those who wrote the conference report.