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So this amendment would bring in line those that see fit to vote against tax increases but in favor of higher appropriations for increased benefits. With great deference, again, they're the ones that have created a great part of this deficit.
Now, let me refer to some figures that I've considered in reaching this conclusion. And it's been not hastily reached. I do want to refer to the national debt, although this is not my main motivation.
These are rounded out figures. In 1970 the national debt was $382 billion. In 1980, it's an estimated $898 billion. So in 10 years it's gone up $516 billion. That's over $51 billion a year. I was a part of it. I was here when all that happened.
I know how easy it is for it to get by. I note here with alarm that the interest estimated for the 1980 budget is $57 billion, and that's more than the entire Federal budget was for fiscal year 1951. As I say, I was a Member of the Senate then.
But I want to refer just to the word “straitjacket," and the claim that this amendment would put the Congress in a straitjacket. I don't think so. It's the Congress which is elected by the people that I want to preserve. But I don't see any straitjacket to this Senate Joint Resolution 6 when they would not have a firm cutoff ceiling on them and would have all the discretion that's provided. They'll just be required to keep the receipts and expenditures in balance.
Now, let me tell you, I handled the appropriation bill for the Department of Defense, and I'm sure that I lean in favor of most of those items, but I don't think that the national defense requires a person be wasteful.
And I was greatly impressed last summer. We were trying to go into the matter of increasing appropriations, gentlemen, to take care of the sliding dollar abroad. Every time it goes down, you know, the people in the services we have stationed abroad, their wives and children, have to pay more for what they buy on the market.
We'd get a call sometimes from the Pentagon that said: We sent in a request this morning at 9 o'clock to increase this line item so much to take care of the deficit on the dollar, but it has lost so much more now that we need these added millions of dollars since 9 o'clock. And I looked at my watch, and it was only 11 o'clock then.
So they were giving us a 2 hourly report on how much they'd have to increase the appropriations over here to take care of our sliding dollar abroad.
Now, I think this, that if we're to force the Congress into making a real list of priorities, we need a mandatory requirement for a balanced budget. We don't want to impose another tax on the people. It's up to us to bring appropriations into line. Let's be careful. Let's make a real list of priorities. We've improved on that a little lately, but when the pressure gets strong enough and elections are close enough, it's sad to say—but most always—we yield. We yield under one pretext or another. That's one of the ways that these deficits were built up.
Now, getting back and trying to give some figures-by the way, I don't know what experience anyone else has had—but since we left here last fall I've had actual requests for additional sums over and above what we appropriated for last year to get either new programs or inereases that is in the neighborhood of $100 billion-$100 billion. I want to refer to some that I've seen start here myself. We put in this food stamp program, and it has some good features. In 1961 I think that figure was as low as $6 million-a demonstration program I
-a might say, to see what would happen. The estimated appropriation for fiscal 1980 is $6.9 billion.
There have been several attempts to reduce that figure, but without a great deal of success.
Now, here's something that's close to the people—and I know what it is something about these medical bills, medicare and medicaid. These items alone have gone up in the last 10 years from $10 to $45 billion. In 10 years there has been a 450-percent increase. Well, there's a lot of it that goes for a good cause. How can you just stop the thing at any point?
Now, I don't want to repeal all of that. I didn't vote for those two items because we didn't have the money, and I didn't see how it was going to be paid. That was the only reason I didn't vote for it. But that's the way—that's the record on it.
If I had any pledge from my first election, it was to keep an interest in veterans' benefits. I'm prejudiced in favor of them, but I didn't skip it. I put down here what it was in 1970, $9 billion; in 1980, it was $20.5 billion.
We didn't have mass transportation a number of years ago. We usually defeated it.
Anyway, by 1970 expenditures for transportation had gone to $7 billion; now it's $11.5 billion. Energy-and certainly this is going to be much more in years to come-energy appropriations in 1970 was $1 billion in round numbers; in fiscal 1980, $8 billion. Necessarily it will be much more than that in the future. We've just scratched the surface in all this cost to the Federal Government of extensive research and development programs, even on matters of existing energy sources such as coal, oil and gas, and getting more out of a ton of coal. Other examples are the construction of transmission lines in great numbers, and the development of solar energy.
So there's a big, big share of the budget that must go for those, as I
Now, revenue sharing and other aid to States and local jurisdictions was $1 billion in fiscal 1970. Now it's $8.8 billion for fiscal 1980. That's a pretty healthy growth.
I haven't mentioned the military. Well, I will mention the military. This is a perplexing problem. I wish we could have brought you a remedy. Military retirement pay in 1956—that's when my attention was first called to this—was $477 million for 192,000 of our retired service personnel. I tried to get
up a plan, a new plan, then. I predicted it would go to a billion dollars. That was scoffed at by some of the press. The Pentagon had estimates—computers were just beginning to come in. They got so hot behind me that I thought I might be mistaken. But that first billion came a year earlier than I had predicted.
Now, for fiscal 1980 that's $11.4 billion $11.4 billion. There is not time to argue the matter here. I proposed we put in an additional system based on contributions and let them both run until the old system ran out.
But I will pass on now. Training, employment, and certain other services, one program I ran across, in 1970, was $4 billion; in 1980 it was $17 billion. And I will support larger figures than that for
training, Federal training, for subsidized training. I realize that we have got to do more than we have been doing, and I would go for a bigger program, subsidizing industry because that's where the jobs are, that's where the know-how is, the machinery and the management.
Well, I will have to move on. Just a word of warning: At the end of the war in Vietnam our Army was run down, so to speak, in a lot of essential things like tanks, and it's going to be an enormous amount necessary to bring it up to date. Tanks, helicopters, and missiles are just three of them. Tanks are going to cost $134 million apiece, and we abandoned a tank a few years ago because it was approaching $1 million each cost. We just threw it out the window and said that's too much. But before we get another one rolling, it's gone to_13 million.
I am not blaming anyone. The Air Force, the F-15, F-16, A-10, that line of planes coming in now, it took this long, you know, to get them into actual production, modernizing them. New planes, additional ones for the cargo fleet, these involve enormous sums.
The Navy has six new aircraft programs that are going to come into production right away. Astronomical, almost, the cost, across the board.
New warships, as I have said, we've got navies running around over the tables in our rooms, trying to decide which Navy we should have but they're all going to cost tremendous sums of money. Submarines and support vessels of various kinds—when I went on this Armed Services Committee, you could get a pretty good submarine for $30 million. Now the most advanced one is $950 million; that's the price, and that doesn't include the missiles themselves.
Secretary of Defense Brown says that the budget for the next 5 years will go up perhaps to $179 billion per year. I turned in the largest appropriations bill last year. The bill was passed. But, you see this is a proposed 46 percent increase in the military budget.
Now, my point is: We've got to have priorities set on these things. We see these clouds of figures coming, and it will run away with us before we know it if we don't prepare.
I think a basic thing that happened was that we got into the pattern of having a personal account for millions and millions of people, like social security, retirement and various other matters, personal accounts, you might say, with the Government, and in a generous mood, we guaranteed cost-of-living increases and all; that was a change in the whole system of government. And it's got to be controlled better and curbed some, as I see it.
Now, I want to mention one other major reason, and then I am going to thank you again for your attention. There is a man out there in America, I call him Joe Doak, and his wife's name is Mary. He makes a fairly good living. They've always paid their debts. They supported the church and other institutions in their community. They save something for their future. They set aside some money for their children's education beyond high school, and they carried their part and got ahead a little and had something left for whichever one outlived the other.
Now, Joe and Mary are still the way they were, but they're whipped before they start, and they're beginning to realize it. We have got to save that group, one way or another.
Now they're taxed, as you already know, of course: Sales tax; property tax; town; city; county; State; income taxes—State and Federal; and even an inheritance tax if they have anything saved up and left.
My point is: The obstacles in front of that group have become more than they can carry. They can't get a start like they could. They can't get that savings account. Now, I think, a reordering of the priorities will help their situation.
So, that's the substance, and I have confidence in this subcommittee. I think you're going to respond to the challenge in some way. I hope you can bring out a resolution that's better than anything that's been introduced. I hope that we can pass it this year. That we will be preparing the way, as I said, for the decades ahead, to save our democratic form of government and free enterprise system. Well, I thank you very much.
Senator Bayh (presiding). Thank you very much, Senator Stennis. We appreciate very much your being here to get our hearing started this morning. I know that you have severe time constraints, and Senator Byrd, who is here also, has severe time constraints. And as much as I would like to explore the vast warehouse of knowledge that you have, particularly that very sensitive responsibility that you have for appropriating funds in the area of the military, I am going to resist the temptation to ask any questions. It won't be a lack of interest; it's just a matter of accommodation of Senator Byrd. I
appreciate your being here to start us off this morning. Senator STENNIS. Thank you.
I know if the past is any indication, you will get in behind us and help us.
Senator Bayh. You are very thoughtful, and I don't want to forgo any of my other colleagues.
Senator STENNIS. I thank you, but that's entirely all right. I understand your situation, and I hope to let you hear from me again.
Senator Hatch. I have no questions. I personally am interested in your particular approach to balancing the budget, as we all should be. I won't
ask any questions at this time.
Senator Bayh. Thank you, Senator Stennis. We appreciate it very much.
[The prepared statement by Senator Stennis follows:)
PREPARED STATEMENT OF SENATOR JOHN C. STENNIS
Mr. President, and members of the Subcommittee, I appreciate the opportunity to appear today to discuss with you Senate Joint Resolution 6 and other matters relating to a proposed constitutional amendment which would put the Federal government on a pay-as-you-go basis and would require the end of deficit financing. This resolution, which I introduced on January 15th, is co-sponsored by Senators Young, Goldwater, Hollings and Zorinsky.
I am acutely conscious of the lasting and enduring nature of our Constitution and I certainly recognize that it should not be tinkered with or amended except for most compelling reasons. However, the financial history of this nation for the past 25 years and my strong sense of fiscal responsibility compel me to propose the amendment embodied in S.J. Res. 6. I believe that it is an idea whose time has come.
Let me briefly explain the proposed amendment. Its basic purpose is to seek to assure that the total outlays of the government during any fiscal year do not exceed the total receipts available to the government during such fiscal year.
For this purpose the proposed amendment provides that no later than the twentieth day after the close of each fiscal year the President shall ascertain the total receipts of the government during such fiscal year, not including receipts derived from the issuance of bonds, notes, or other obligations of the United States. Likewise, during the same twenty day period, the President shall ascertain the total outlays of the government during such fiscal year, not including any outlays for the redemption of bonds, notes, or other obligations of the United States.
If the total receipts are determined to be less than the total outlays, then under the amendment the President would be required to determine the percentage rate of income surtax which would be necessary to raise enough additional taxes to eliminate the deficit and transmit it to the Congress by a special message. The income tax surtax would be levied and effective for the calendar year following the close of the fiscal year with respect to which the Presidential determination was made, and would be an additional income tax upon all individual and corporate incomes.
It can be seen that the proposed amendment is clear and simple. It would require that any Federal deficit be offset by a surtax to be levied in the calendar year following the year in which the deficit was incurred. No exercise of judgment or discretion on the part of anyone would be involved. If expenditures exceeded revenues during a fiscal year a surtax would have to be levied during the following calendar year to bring the budget into balance. The rate of surtax would be determined by the President purely as a mathematical calculation and, as I have said, this would not require any exercise of judgment or discretion.
There is an essential and necessary escape valve in the proposed amendment, however. Under this safety valve the requirement for a balanced budget could be waived and set aside by a three-fourths vote of all members of each House in the case of a grave national emergency such as a war or serious depression. This would be the sole exception to the requirement that the budget be balanced.
I helieve that the Congress should make a start now-at this very momentto advance towards a pay-as-you-go constitutional amendment. At best it will take several years to get the constitutionally-required two-thirds vote in each House and have the amendment ratified by three-fourths of the States. This means that even if the Senate passes the amendment at this session, its effective date would still be several years down the road, so that the Congress would have the time to bring the budget in balance. In addition, as a further protection, the amendment itself provides that it should not become operative until the first fiscal year beginning after the amendment is ratified.
I do not want to burden this record with numerous facts and figures. However, I do think it is pertinent to refer to the unhappy fiscal history which makes this amendment so necessary. I will recapitulate it briefly at this point.
It took us 173 years—from 1789 to fiscal year 1962—before the Federal budget reached $100 billion. In the 18 years since fiscal year 1962 the budget has skyrocketed to $531 billion. Thus, even with anticipated receipts of $502 billion, the estimated deficit for fiscal 1980 is $29 billion.
In fiscal year 1970 the national debt was $382 billion. The estimated national debt at the end of fiscal year 1980 is $898 billion. Therefore, we find that in ten years the national debt will have increased by $516 billion, an average of more than $51 billion a year. The estimated interest on the national debt for fiscal year 1980 of $57 billion is more than the entire Federal budget for fiscal year 1951.
Given the record of the Federal deficits over the past quarter of a century, it is elear that the Executive and Legislative branches, acting in a permissive legis. lative situation without constitutional compulsion or restriction have utterly failed to bring Federal spending under control. This is why I believe we need a strong, mandatory constitutional amendment with real teeth and action-forcing provisions.
The Constitution is the supreme law of the land. If we add to it a budget balancing amendment which has mandatory provisions and is self-enforcing-and that is the type of amendment proposed by S.J. Res. 6—this will bind both the Executive and Legislative Departments to a balanced budget as long as that amendment is on the books. It will put an element of unequivocal control and discipline into the matter which will be applicable to all three branches of the government.