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One, it will provide for balanced budgets through a constitutional amendment.

The next thing, it will make provisions for paying the debt. Since the Congress has not exercised the restraint it should in spending, they may not exercise restraint in paying its debt. They may just keep on carrying this debt.

That is the reason that I think that 5 percent of the budget each year, 5 years after the budget has been balanced, should go to making payments on our debt.

Senator Hatch. Senator, we have just heard testimony from Senator Muskie, the distinguished chairman of the Senate Budget Committee, and he indicated that he has concerns about the constitutional amendment approaches that have been taken, and also concerns about having a constitutional convention.

Senator THURMOND. He is concerned about both?
Senator Hatch. About both.

Plus, he feels, if I have interpreted his remarks correctly, that the best way to solve our problems is to continue to work through the normal budgetary process of the Senate and House Budget Committees.

Do you have any comments with regards to this?
Senator THURMOND. Yes, I do have comments on that.

I think that would be fine if it would work, but it hasn't worked.'I just stated, in the last 49 years the Congress hasn't balanced the budget but eight times. In the last 20 years, we haven't balanced it but one time. That simply hasn't worked; so why do we think it will work in the future?

Even if it did work for a year or two when the pressure is on, and'it is on right now because there is a threat of a Constitutional Convention being called, but even if the budget should be balanced, say for 1 year or 5 years, then what restriction or restraint is there on the Congress to again, after that 1 or 5 years, to go back to spending more than they take in, and get back in the same shape we are in today?

Senator HATCH. Do you think that the budget process has worked over the last 2 or 3 years in the Senate and the House and in the Congress as a whole as a result of the Budget Committees in the Senate and the House?

Senator THURMOND. In other words, it is estimated in 1978 the debt will be $61,847 million; 1979, $60,586 million.

Senator Hatch. You mean "billion."
Senator THURMOND. Oh, of course, billions.

Senator Hatch. So you are suggesting that, as much as we talk about the budget process, it doesn't work?

Senator THURMOND. It simply is not working. I think everyone agrees it is not working, or why are we holding this hearing here this morning, if it is working?

Why are the people back home so dissatisfied with the Congress and losing faith in the Congress and in the Government?

Simply because the processes here of restraint on spending are not working. I want to get something that works. We are convinced-and in 50 years, if we haven't balanced the budget. I think that's res ipsa loquitur. I think it speaks for itself.

Senator Hatch. The people in this country, I think, would tend to agree with you, but we learned today, as Senator Muskie stated, that this so-called austere budget of the President, which was only supposed to be $29 billion, is actually $41 billion when you count the off-budget requests.

And who knows, when you count the guarantees and other Government businesses that really aren't counted in the budget. Not too many people know or understand that, and that tends to undermine the morale of people and the confidence in the U.S. Congress to solve some of these problems.

Would you agree with that?

Senator THURMOND. I believe that the estimate made by the President for his state of the Union message

Senator Hatch. The estimate was $29 billion, but Senator Muskie brought out that, in addition to that, there are at least $12 billion in off-budget expenditures that are not counted in that total.

So you are talking $41 billion right there-not counting loan guarantees, not counting Government-sponsored corporations, et cetera. These are some of the reasons why people have lost confidence in the budget processes, not only of the Congress, but of the administration as well.

We are hiding the true facts.

Senator THURMOND. These estimates are made up from official figures that the President has brought in over his reduction. Even with the reduction he has submitted now, it would be $29 to $40 billion.

It is still not working. If something does not work, it simply does not work, and this is not working.

Now what are they going to do about it? Are we going to go on and trust the Congress again? Or are we going to take steps that would put restraints on the Congress, which we need to do, so we can balance this budget and protect the taxpayers.

Senator Hatch. Maybe the 51st time, it might work. You never know. But the odds are certainly against it, aren't they?

Senator THURMOND. Well, I say, even if we should balance the budget next year, for the next year or two years, then what would keep the Congress again from going on a spending spree as it did 49 years ago?

Senator Hatch. That is a good poi

Senator, I appreciate your efforts for balanced budgets through the years, and I thank you so much for your testimony here today.

Senator THURMOND. Thank you.
Mr. Chairman, did you have a question?
Senator Bayh. No, Senator Thurmond. Thank you.

Senator THURMOND. Mr. Chairman, I wish to thank you and the members of your committee for your courtesy.

[The following materials were submitted by Senator Thurmond :)



Table 21. BUDGET RECEIPTS AND OUTLAYS, 1789–1979 (wo millions of dollers)

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1789-1849. 1850-1900. 1901-1905. 1906-1910. 1911-1915. 1916-1920. 1921. 1922 1923 1924. :725. 1926. 1927. 1928. 1929. 1930. 1931. 1932. 1933. 1934. 1935. 1936. 1937. 1938. 1939. .19+0. 1941. 1942. 1943. 1944. 1945. 1946. 1947.


1.030 +70 1948.. 14. 462 15, 453 -99119:9. 2.797 2.678


3,143 3.196 -52 1951
3.517 3,568 --491952.
17,286 40.195 -22.909 1953.
5,571 5,062


+509 : 4.026 3.269


+736 3.853 3.140


+713 3.871 2.908


+963 3.641 2.924


+717 3.795 2.930


+865 4.013 2,857 +1.155

1960. 3.900

2.961 +939 | 1961. 3.862 3.127 +734 1962. 4.058 3,320 +738 1963. 3,116 3,577

- 462

1964. '1.924

4.659 -2.735

4.598 -2.602
3,015 6.645 -3.630

3.706 6.497


3.997 8.422 -4.425

7.733 -2.777

5.588 6.765 -1,177 1971.
4.979 8.841 -3, 862 1972.
6,361 9.456 -3.095|1973.
8,621 13,634 -5.013

1974. 14.350 35.114 -20.764

1975. 23,649 78.533 -54, 854

1976. 44.276 91.280 - 47,034 TQ.. 45, 216

92.6% -47, 474 1977. 39,327 55.183 -15,856 1978 ot. .38,394 34.532 +3.852 | 1979 ost.

Tolols, including outloys of off-budael Federal enlilies

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Budget Budget Budert surplus receipts outlige

debuit (-)

41,774 29,773 +12,001 39, 437 38.834 +503 39. 435 (2.597 -3.112 51.646 45.546 +6.100 66. 234 67,721 -i. Siz 69,574. 76, 107

-6.533 69.719 70.8% - 1.170 65, 469 68.509 -3.041 74.547 . 70.460

#4.087 79.990 76,741 +3.249 79.636 82,575

-2.939 79,249 92. 104 - 12.855 92, 492 92.233

+269 94, 399 97,795 -3.406 99,676 106,813 -7.137 106.560 111.311 -4.751 112.662 118.584 -5.922 116,833 118.430 -1.596 130, 856 134.652 -3.796 149,352 156, 254 -8.707 153,671 178.833 -25, 161 187,784 184,548

+3.236 193,743 195,588

-2,845 188. 392 211.425 -23.033 205.619 232.021 -23.373 232, 225 247.074 -14.849 264.932 269.620 -4.688 280,097 326,092 – 45,095 299,197 365,643 -- 66.446

81,687 94.657 -12,970 356,861 401.902 -45,040 410.387 462, 234 -61.47 439,588 500.174 -60.586

Ouilayo of o. budget Federal colitico

Total outlıyo

Total dcbcit

1.770 56.427 -14,740 8.693 410.594. -53.733 11.514 473,748 -73.361 12,538 512,712 -73.134

.9500 thousand or less. Norco.--Certain interlund trononction; use cocluded from receiple and outlayo starties ia 1937. For years prior to 1932 the amounts of such transactions are not signifcant.

Relund. of receipto de excluded lion receipts and outleys starting is 1913; compueble dato are not available for prior years.

Dore lor1783-1939 are lost the minisisative budget: 1940-1979 (lop the vnihed budse.

in colendes cas !976. the Federal focal y cas va converted from July 1-jupe 30 bosit 10 ** Oct. !-Scpt. 30 lasis. The TQ clero to the transition quartet ison July 1 to Sept. 30. 1976.,

Oo.budget Federal entity cutleyo begin in 1973.

The amounts of crand income credit in eactol or 110 lisbilities we showo w pegative fudge! receipti milies i.." budset outlays. Accordior's, the budget totale Live bera odjuried seticictively.

The 1975-7? dit hove beco revived selsanctively to include the housing for the eldurly Hoodicapped flod in the united budget insland of viib che ce budget Federal Cotilien

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150,UTIOX CALLING FORTE IONAL CONVENTION ON À 291, CED FEDERAL BUDGET AMENDMENT (Washington, D.c:) The National Taxpayers Union (NTU), the organization coordinating the nationwide efforts calling for Congress to pass an arendrent requiring a balanced federal budget today announced that Iowa has become the 28th state to officially pass a balance the budget amendment resolution.

The 28 state legislatures which have passed balanced budget amendment resolutions are: Alabama HJR 227, Act 302

1976 Arizona нсм 2003.

1977 Arkansas HJR 1

1979 * Coloraio SJM 1

1978 Delaware HCR 36

1975 Florica Sen. Vemorial 234

1976 Georgia Res. Act.893,HR 469-1267

1976 Idaho HCR 7

1979* Iowa SJR 1

1979* Kansas SCR 1661

1978 Louisiana SR 73, HCR 269

1978, 1975 Haryland

SJR 4 (Original), MD JR 77 1975

lenrolled) Mississippi HCR 51

1975 Nebraska LR 106

1976 Xevada SJR 2

1977 Xew Mexico SJR 1

1976 North Carolina SJR 1

1979 North Dakota SCR 4018

1975 Oklahoma HJR 1049

1976 Oregon SJ Memorial 2

1977 Pennsylvania HR 236

1976 South Carolina SCR 1024, SCR 670

1978, 1976 South Dakota SJR 1

1979 Tennessee HJR 22

1977 Texas HCR 13, HCR 31

1978, 1977 Utah HJR 12

1979* Virginia SJR 36

1976 Wyoming HJR 12 (original),JR I


Certified copies of these resolutions are on file at the National
Taxpayers Union.

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Senator Bayh. We now welcome another distinguished colleague, Senator Dole. I appreciate the fact that you are here, and I appreciate the fact that you and a lot of your Republican colleages were out in Indiana stimulating our economy.

I appreciate your being here.

Senator DOLE. We might not have stimulated the audience, even if we did stimulate the economy.

Senator Bayh. A large part of that audience must not have been from Indiana.



Senator Dole. I appreciate the opportunity to testify here today on the pressing need for a constitutional amendment to balance the Federal budget. Mr. Chairman, I am also pleased that this subcommittee will shortly consider another constitutional amendment on direct election.

Mr. Chairman, since I know that the members of this committee are busy, and since the Finance Committee is now in the process of hearings, four floors down, to which I need to return, I will take only about 5 minutes to summarize my views. Then if there are any questions I would be happy to respond. I ask that my entire statement be made a part of the record.

Mr. Chairman, there is always considerable controversy that surrounds any proposed change in the constitution. I subscribe to the proposition that changes in the Constitution should be infrequent and should be very carefully considered.

However, I believe that the fundamental changes that have occurred in our national fiscal policy warrant an equally fundamental change in the basic document of our Government. For a number of decades, the country has been charted on a disaster course of uncontrolled growth in Federal spending, of ever more oppressive taxation and of burgeoning budget deficits. A succession of past Presidents and Congresses have been simply unwilling or unable to reverse this course.

After years of observing and participating in fruitless efforts to stem the growth of Government, I have reluctantly concluded that a constitutional amendment offers the only realistic prospect for restoring fiscal responsibility to Washington. Accordingly, I have introduced an amendment which is a three-pronged attack on the fiscal ills that beset us. My proposal not only requires a balanced budget, but it also directly limíts Federal spending and taxation. The proposal is drafted to provide flexibility.

It seems to me that one proper criticism of some of the amendments are that they take away the flexibility in the case of a national interest or some national emergency. So to provide that flexibility needed to manage the economy and respond to any financial or political crisis, it yet still requires reasonable fiscal restraint.

Mr. Chairman, there is broad and vigorous public support for adoption of a balanced budget constitutional amendment whether there are 28, 29, or 30 States that have called for a constitutional amendment to balance the budget is not certain. It is also uncertain what the final State count will be by the end of this year. There have been some surveys indicating that the number will never exceed 32 States. Such


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