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 point. 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:] THE BUDGET FOR FISCAL YEAR 1979 488 Table 21. BUDGET RECEIPTS AND OUTLAYS, 1789-1979 (in millions of dollars) $500 thousand or less. budget Federal entities 1,770 96,427 -14,740 8.693 410.594. -53.733 11,514 473,748 -73.361 12,538 512,712 -73,124 Notes.-Certain interfund transactions are excluded from receipts and outlays starting in 1932. For years prior to 1932 the amounts of such transactions are not significant. Refunds of receipts are excluded from receipts and outlays starting in 1913; comparable data are not available for prior years. Date for 1789-1939 are for the administrative budget: 1940-1979 are for the united budget. In calendar year 1976, the Federal facal year was converted from a July 1-June 30 basis to as Oct. 1-Sept. 30 tais. The TQ refers to the transition quarter from July 1 to Sept. 30, 1976. .... Of budget Federal entity outlays begin in 1973. The amounts of earned income credit in excess of tax liabilities are shown as negative budget receipts rather than as budget outlays. Accordingly, the budget totals have been adjusted retroactively. The 1975-77 data have been revised retroactively to include the heusing for the elderly of handicapped fund in the united budget instead of with the cf-budget Federal entities. CHENT OF 28 STATE JAGISDA- TORES WHICH HAVE_PASSED (Washington, D.C.) The National Taxpayers Union (NTU), the organiza tion coordinating the nationwide efforts calling for Congress to pass an amendment 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 1979 * 1976 1977 Certified copies of these resolutions are on file at the National Taxpayers Union. EPDATED: February: 23, 1979 *Recently-passed, copies-are-in transit Lap: 8440 fsople favor conti. withire 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. TESTIMONY OF HON. ROBERT DOLE, A U.S. SENATOR FROM THE STATE OF KANSAS 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 limits 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 |