Date: 1981-09-29
Speaker: ROBERT C. BYRD (democrat)
Chamber: S

Mr. President. last Thursday evening President Reagan addressed the American people for the fourth time regarding the state of the Nations economy. He outlined yet another round of budget cuts. the rising deficit for the coming fiscal year. and the prospect of a trillion dollar national debt. His prescription for further belttightening Included an additional 12percent cut in discretionary spending. a reduction in force of 75.000 Federal employees. the dismantling of the Departments of Energy and Education. and a wholesale revision of entitlements programnsthe socalled social safety netall of this in the name of eliminating waste and fraud and getting the economy moving again. Frankly. I was surprised at several of the Presidents remarks. He said his program Is not working yet. "because It does not even begin until October 1."1 and went oni to claim that the current doubters and naysayers. are the same ones who criticized his program in the first place. But the Presidents economice recovery program is already largely in place and. if anyone doubts that it Is having an effect. one need only look at the tumbling stock market and soaring interest rates on the bond market that followed passage of the administration program. The markets have given a loud vote of "no confidence" to the program. The administrations program consists of four parts: First. tax cuts. second. budget cuts. third regulatory relief for business. and fourth. a tight money policy. The tax cuts were made retroactive for business to January 1. This administration has been Issuing regulations for 8 months and Vice President Busr heads a task force on regulation. The Federal Reserve Board has been following one of the most restrictive money growth policies In history during 1981. And finally. many budget cuts have already been made In 1981 spending. So. when Wall Street analysts express doubts. they have a legitimate basis on which to judge the Reagan program. In his speech. President Reagan asked Congress to enact $13 billion in additional cuts for domestic programs. It Is easy to talk about trimming and belttightening in the abstractit is much harder when the reality of those cuts Is demonstrated in human terms. The reconcillation bill. signed into law in August. cut deeply into programs that help people--school lunches. social security. medicare. and lowincome energy assistance. to name a few. And that same bill also cut deeply Into valuable programs that insure a viable economic infrastructureports. roads. mass transit. energy research and development. I question the wisdom of mortgaging our future by engaging in round after round of cuts in basic public works and education programs. Admilnistration economists should be fully aware that there is a cast to budget cuts. and that the money we save today by slashing spending for student loans. child nutrition and health care. and public transportation will prove very costly a few years down the road. Democrats do not oppose reasonable budget cuts which are truly aimed at the fat In Government programs. But acrosstheboard slashes in funding assume that all programs have the same amount of waste. Thursday. at a luncheon for Democratic Senators we demonstrated clearly. by eating the administrations proposed school lunch. that some programs already have been trimmed to the bone. This new round of cuts. and the future rounds that the President assured us are soon to come. are necessary because of another acrosstheboard cut: The KempRoth tax bill. This plan. which the administration fought hard to convince the American people they needed. cost far in excess of what we can afford. Unless ther supply side miracle predicted during the Presidential campaign occurs. the Federal deficit could balloon to more than $100 billion In the near future. There is not enough discretionary spending left in the budget to cut so as to close this gap. The reconciliation bill signed into law by the President has already produced a 15percent cut in real spending for discretionary programs. We have no choice but to look at the revenue side of the ledger. We have now had some time for the financial markets to react to the new Reagan proposals. On Friday. the stock market dropped 11 points. Yesterday. the market rebounded. The steep slide in the market since June reflects a lack of confidence in the supplyside theory. It will be difficuit to resurrect this confidence if the President continues to make comments such as the one repeated over the weekend. When asked if he was concerned by the sharp drop in stock prices on the day after his latest economic message. President Reagan replied: "No. because I dont own any." That Is not great comfort to the millions of Americans who own stock and whose pension funds are invested in stock. Editorial coinment over the weekend has echoed the main message that Wall Street and most economic analysts are now espousing: The - hastily devised KempRoth tax bill commits the Nation to too large a tax cut. The Washington Post editorlaliztd on Sunday. September 27. that: It Is time . .. to give the same kind or attention to the revenue side of the budget that he (the President) is giving to spending. In the same vein. the New York Times commented: The Presidents fiscal problem did not end Thursday night. Nor will it end. we suspect.