Date: 1982-02-10
Speaker: ROBERT C. BYRD (democrat)
Chamber: S

Mr. President. the administrations recently submitted budget has once again touched off -a debate in this city and across the land. The budget debate used to be a fairly dry process. a debate by experts over such arcane subjects as "functions" and "crosswalks." It has become. in addition. a policy debate. taking up in the process much of the Senates schedule. Without going into the reasons for this development. I should say that this year will be no exception to the new rule. The 1983 budget is the administiations blueprint for shoring tip our economy. for .balancing the benefits and hardships of governmental policies as they Impact on our families and communities. It is not a blueprint that I trust to accurately reflect reality. It describes a world of data that. once again. has been carefully tailored to appear to be something it is not. In short. what we have here are more phony numbers. The economic assumptions contained in this budget are overly optimistic. The estimated savings from potential cuts are politically unrealistic. The result is that the debate which follows will be nothing more than a futile exercise. unless we replace these estimates with working numbers that reflect accurately the budget picture as it is. The administration projects a deficit of $91.5 billion for 1983. Less than a year ago. looking at the same year. it estimated a deficit of $22.8 billion. The Congressional Budget Office estimates that the deficit for 1983 will be $157 biillon. The assumptions in this budget for real economic growth. Inflation. and interest rates for the years 1983 through 1987 are likely to prove equally erroneous and result in discrepancies as great. if not greater. For example. the CBO forecasts 4.4 percent real economic growth for 1983. Private forecasts. on the average. target real growth at 3.9 percent. The administrations real growth projection. however. is much higher5.2 percent. Projections on interest rates also vary widely. but the administrations estimate is the lowest for 198310.5 percent. The average of private forecasters is 11.9 percent. and CBOs is 13.2 percent. The administration estimates the unemployment rate for 1983 at 7.9 percent. CBO estimates 8 percent. and 8.4 percent is predicated by the private forecasters. * The administration is estimating an inflation rate (CPI) of 6.9 percent. and the average of private forecasters is 7.4 percent. In each instance. the administra tions estimate is considerably rosier than that of objective analysts. Overly optimistic economic assumptions. however. are only half the reason for the credibility gap we are once again facing. The other is a reliance on projected cuts which. in fact. do not stand a chance in all likelihood. of being passed. None of us at this point has had time enough to assess the extent of the spending cuts proposed in this budget. Obviously. I cannot approve of further deep cuts in veterans programs. fossil fuel research. and job training programs. to name just a few that have been gutted in this proposal. The administrations priorities contint unfairly toburden the most vulnerable. continue to shift resources from the middle class to the wealthy. and continue to underinvest in the human capital. the people. of this country. Turning away for the moment. however. from a discussion of the merits of some of the proposed cuts contained in this budget. the question for those of us having to evaluate it remains whether the cuts assumed are likely to happen. I do not believe that medicare is going to be cut substantially. I do not believe that all the "revenue enhancers." many of which have been tried before and failed. are going to pass. and I do not believe that Congress is going to buy more of the "magic asterisk" budgeting technique. now called "management initiatives." and approve more huge unspecified savings without knowing what the cuts contain. Assuming that half their requested cuts are passed. which Is a very generous assumption. they are still going to lose $28 billion from their socalled savings package. Combining the shortfall due to rosy economic forecasts with the shortfall due to unrealistic political assumptions. It becomes clear that the predictions of many independent forecasters that the deficit for 1983 wIl be around $140 billion could well be accurate. I believe that this number is one most Senators will have In mind as they attempt to shape this years budget. By transmitting to Congress another budget based on highly questionable economic and political assumptions. the administration is clearly throwing back to Congress the job of solving the problems caused by the failure of its economic program. These frightening deficits spring from an illconceived mix of tight monetary policy and loose fiscal policy driven by the radical Kemp/Roth tax package. This is why I have found it a little surprising to read of the shock. dismay. and disbelief of some of my colleagues on the other side of the aisle over the size of the deficits in this budget. My response to this uneasiness over this budget is that. "when you buy bologna at the supermarket. you shouldnt expect to get home and find roast beef." The administration should not have expected to enact an economic program where tax cuts greatly exceeded spending cuts. with accompanying large increases in defense spending. and not expected astronomical deficits. As the deficit grows. pressure on the already impossibly high interest rates will continue. further shutting off any recovery. An honest reading of objective figures a year ago would have led to this conclusion. We should not now be surprised at what was totally predictable. Now for the final point I should like to make today. It is not the mistakes of the last administration that are to blame for these deficits. It is not the mistakes of the last 20 years. the last 30 years. or whatever period of years that is the current scapegoat for economic mismanagement. This program belongs to this administration. and so do the results. These policies have selfdestructed. because they contain internal contradictions that doomed them from the start. For example. the administration predicted this years deficit would be $41.7 billion. It is now estimated by the administration itself to be $98.6 billion. The gap is $56.9 billion. If one looks closely at that figure and breaks it down. it becomes evident where the shortfall comes from: $31 billion lost on the revenue side. $1.5 billion lost to Inflation. $7.9 billion lost to unemployment. and $16.6 billion lost to high interest rates. The reason the deficit is so high has not so much to do with historic failures as it does with the failure of the current experIment in economic policy. No budget can be balanced this way. No amount of wishful thinking will stop the budget from hemorrhaging further. As a first step. we need a realistic budget. Hopefully. it will become the basis for economic policies which do not work at cross purposes. I would prefer to think the administration has not surrendered in its efforts to achieve a better balance between fiscal and monetary policy: has not thrown in the towel in its efforts to achieve a program based on the possible and not the impossible. has not decided to throw back to Congress the job of balancing the budget. putting people back to work. and getting the economy growing again. This is a very tall order. This is a time when we need real leadership. This is a time when passIng the hot political potato back and forth will not suffice. If the newspaper reports on the comments of my Republican friends are accurate. many of them have reached the same conclusions as I have reached. Hopefully. this will develop into a Senate bipartisan effort and to bipartisan efforts between Congress and the administration to accurately assess the economic realities and make budget decisions based on those realities. That is the job before us.