Date: 1981-11-16
Speaker: ROBERT C. BYRD (democrat)
Chamber: S

Mr. President. the city of Washington hbs become blase to shocking revelations from Oodernment officials. But even this blase c~ty is still reeling at the cynicistp displayed by OMB Director David Stockitians comments as reported in the Atlantic Monthly. In an era In which the public grows Increasingly disenchanted with our public Institutions. Mr. Stockmnans admissions that the administration has been intentionally fooling the American people about Its economic program are particularly disheartening. He spoke the truth. but he spoke the truth to an assistant editor of the Washington Post. He did not speak the truth to the Congress of the United States nor did he speak the truth to the American people. But the Issue is not simply whether or not Mr. Stockman has been. so discredited as to severely limit his utility as an administration spokesman. The larger issue is that. with his indiscreet candor. Mr. Stockman has totally discredited the administrations socalled economic recovery plan. Many of us have said for some time that the socalled economic recovery plan was a thinly veiled effort to transfer wealth from the middle class to the wealthy in America. Many of us have said for some time that the program was internally flawed. based on phony numbers. and a major economic gamble with the only economy we have. Now. Mr. Stockmian has told the world that he agrees with much of this analysis. As our economy careens into -what appears to be a deep recession. It becomes ever more clear that the administrations economice game plan cannot bring about vigorous economic growth and. therefore. that this game plan must be dramatically revised. Therefore. it Is particularly unfortunate that at this critical time the domestic policy apparatus of the administration now seems to reflect the same disarray. doubt. and confused leadership that has characterized the foreign policy apparatus for some time. OMB Director Stockmans comments show his remarkable understanding of the consequences which are flowing from his budget and tax programs. He was forthright in his conversations with Mr. Greider although not with the publicin assessing the internal failures of the administrations fiscal policies. At the same time. I am deeply disturbed that millions of working men and women and our Nations elderly citizens were not told earlier that the sacrifices they were asked to endure would be in vain. Mr. Stockmnan has now told them: "We have a [budget] gap which we couldnt fill even with all these budget cuts 0 * * ." Why could he have not made this clear before the cuts were made? Mr. Stockman told the House Ways and Means Committee this past May that if social security cuts were not made. "the most devastating bankruptcy in history will occur on or about November 3. 1982."1 He paints a far different picture in this article. admitting that the social security cuts were made to satisfy " $ * $the hereandnow of budget requirements." This was a cruel and unnecessary misrepresentation that distressed many of our elderly citizens. Billions of dollars have been cut from housing programs at a time when the housing sales are at near depression levels. Employment programs have been ended at a time when 8.5 million people are out of work. School lunches and child nutrition programs have been slashed. and student loans are drying up. The most tragic aspect of these cuts is that they were made with neither rhyme nor reason. Mr. Stockman has now conceded that. "none of us really understands whats going on with all these numbers." Why did he not say that to the American people and to Congress before? The administration sold its budget and tax cuts using economic assumptions and budget projections which were woven from whole cloth. The Atlantic Monthly article reports that Mr. Stockmans reaction to early economic forecasts of unprecedented Federal deficits was to change the computer program by contriving a "**..swift decline in prices and interest rates 0* *(and] a dramatic $urge In the nations productivity." All the time. Mr. Stockman understood that. "You dont stop inflation without some kind of dislocation. You dont stop the growth of the money supply in a threetrilliondollar economy without some kind of dislocation. The supplysiders have gone too far." Why did he not reveal this to the American people and to the Congress before the program was enacted? The administration was no more lionest about the tax cuts than about the budget cuts. Democrats warned repeatedly that the proposed tax cuts were a total surrender to big business and the wealthy. As Mr. Stockman has now admitted. the plan was 4*really trickle down. " The supplyside rhetoric was added for political consumption. Mr. Stockman said the administration disguised the tax cuts as supply side because. "Its kind of hard to sell trickle down. so the supplyside formula was the only way to get a tax policy that was really trickle down. " It does not surprise anyone that trickle down Is hard to sell. Any program that gives money to the wealthy in the hope that some relief will eventually drip down to the middle classes should be hard to sell. But. because of the ideological facelift. we now have the trickledown theory embodied In the tax cuts passed this summer. Since the truth about tax and budget cuts has now been told. It is time to bring reality back to the fantasy land of supplyside economics which has brought on our current recession. For some time. I have been asking the administration to come forth with a realistic and full accounting of Its fiscal policy. I have introduced a bill. S. 1787. and offered an amendment. which require Mr. Stockman to make a full and complete accounting of his budget and tax plans. When I offered my amendment requiring that the administration produce the specific details of budget cuts and tax Increases necessary to balance the budget. it was defeated on a straight partyline vote. One revelation In the Atlantic Monthly article that did not come as a surprise is that the numbers in the administrations budget games did not add up. Mr. Stockman tried to disguise this phony budget by employing a magic asterisk. as he called it. This asterisk stood for unIdentified cutsthe unidentified cuts that I have tried unsuccessfully to flush out through these past months. This Is the time to recognize that no hocuspocus. whether it be "magic asterisks" or voodoo economics. will put the economy back on a road to economic recovery. The American people should be told the truth. Now that Mr. Stockman has admitted that his budget is phony. I hope that the majority will not continue to stonewall my efforts to get the administration to provide us with a believable plan to balance the budget. The administration plan has brought us no economic relief. Inflation Is higher now than it was in January. 14.8 percent compared to 9.1 percent then. Unemployment has shot up to 8.0 percent from the 7.4 percent rate in January. Mortgage rates are more than 3 points higher now. 18.3 percent compared to a 15.15 percent rate when the administration took office. To top It all off. our real GNP has dropped. by $8 bilion between the first and third quarters of this year. Retail sales in October dropped 1.5 percent. All indications are that the recession is growing deeper each day. The time has come for the administration to act decisively. It is time for the administration to abandon Its discredited fiscal plan and to send Congress a realistic plan to bring down the ballooning deficits. It Is time for the administration to abandon its bankrupt tight money policy. It Is time to get our Nations citizens back to work. Mr. Stockman has shown a great ability to focus the clear light of reality on his past failures. I am sure he can shine this same light on our economic future. I hope the administrations next budget proposals reflect this clear light and not the diffuse cloud of blue smoke that has obscured the economic horizon so far this year. I ask unanimous consent that a sneclal report prepared by the staff of the Democratic policy committee entitled "The World According to Stockman" be printed in full In the RECORD. This special report highlights the very lengthy Atlantic Monthly article. I also ask unanimous consent that an article entitled "The Stockman Confessional" published In the Washington Post oin November 12. 1981. be printed in the RECORD.