Date: 1982-12-14
Speaker: ROBERT C. BYRD (democrat)
Chamber: S

Mr. President. may I say in response to the Senators concern about taking money out of the private sector. as we have said repeatedly. the program would be paid for. by a delay in the tax cut for those more wealthy persons in our society who are not showing. an Liclination on the whole to invest in any event and. therefore. in my judgment. it would not be Impinging upon the private sector and. therefore. would not be impinging upon investments. The investment potentialand we have been hearing this all along. I have been hearing this now for about 3 or 4 years. about how this KempRoth tax scheme was going to promote investment in this country. Well. the program has been in place and business investment has not been promoted. As a matter of fact. those businesses that might otherwise be expected to invest. and we had hoped to have them invest. are scaling down their plans for investment over the next period of a year or so. I do not much blame them when the utilization of equipment. plant capacity. is under 70 percent. The steel industry. for example. is showing a capacity utilization of only 40 percent. How can one expect the private sector to invest when there .s that much unused plant and equipment lying around? So this is not a panacea. as I have stated earlier. We do not expect this to cure the unemployment problem. but it is a step in the right direction. and with the monetary resolution which I have Introducedwhich I think is probably the more important of the two measures. and which I would hope to call up as an amendment to this bill or to the continuing resolutionwhich would commend the Fed for taking actions in recent months to bring down the interest rates by lowering the discount rate. That resolution is really the kind of step we ought to take to get this econory growing again because it is only with a healthy and expanding economy that we are going to really put people back to work. . Mr. President. 12 million people are out of work. and either of these proposals is just a drop in the bucket as far a putting 12 million people back to work. But this amendment is at least two drops in the bucket. I think the way to get this country moving again is to get away from the tightmoney. highinterestrate policy that the Federal Reserve Board has espoused. and which has been supported by the administration in the words of Mr. Stockman himself. "We urged it. we endorsed it. we support it." Only in that way can the private sector finally begin to grow and invest and put people back to work because it is the private sector that Is capable of putting people back to work if it has a chance to grow. I am glad to see the Federal Reserve moving in that direction. But it was not moving in that direction early this year when I sent a letter. which was endorsed by every Senator on this side who attended the caucus. calling on the President to urge the Federal Reserve Board to relax its tightmoney policy. Legislation was introduced by me on behalf of the Members on this side that would require the Federal Reserve Board to institute certain actions. to relax the tight money policy. and to bring down interest rates. and we then began to get action by the Fed. I was in the midst of a little debate down at the Greenbrier. a socalled debate during the c mpaign. one of those collegetype debates. not really debates. and I got a call from Mr. Volcker. I thought at that moment it was NCPAC or some crank call. but I found out later that it was really Mr. Volcker calling me. He wanted to come to see me. So I got his attention fast. He was gracious enough to ask to come to see me. and I was gracious enough to accept him. and we had a nice talk in my office. He wanted to know how hard I was going to push that measure. Well. I said "I am not going to push it this year. I see that the Fed is taking steps to relax the tight money policy. It has the tools. it has lowered the discount rate. and it can operate through many other ways to bring down interest ratesFederal fund rates. discount rates. its open market operations. and so on. It is not my desire to make this an election gimmick. so I do not intend to press hard for it before the election. I will wait until after the election and see what continues to happen." The San Francisco Examiner -irote an editorial saying that. perhaps. it was the legislation. who knowsperhaps it was the legislation that was introduced in the Senate and followed up in the Housethat reminded the Federal Reserve Board that it is the creature of the Congress and that the Congress still has the power to step in and to provide guideline policies for the Fed. I understand that Mr. Volcker has been talking with a good many Senators around the Hill on both sides of the aisle and. perhaps. he has extended his talks to Members on the other side. But he has been very concerned about that legislation. And. rightfully so. he is concerned about the economy. Apparently. he does not propose to stay the course. But in any event. action has been taken by the Fed to relax the tight money policy. so we have seen the drop in the discount rate and we have seen the drop in the interest rate. And this is the direction in which to go. I would say to the distinguished Senator from Oklahoma. if we really want to get people back to work. the Federal Reserve Board can go a long way in that direction and is at last moving in that direction. because. with all of the unused plant capacity. we are not going to see much investment. And following the adoption of the KempRoth scheme. much heralded. investments were supposed to follow. and we were told to anticipate a great spate of investment. the business community was going to modernize the plants. but we saw just the opposite. We saw plant utilization shrivel and shrink. So I would say to the distinguished Senator. I am not persuaded by his argument that this legislation would inhibit the private sector from investing money when what we propose to do is simply delay a tax cut for those people in this country who can afford to have a tax cut delayed. If experience is to be a light unto our feet. we have not seen them investing thus far. But we have to do something to begin to put people back to work. and this proposal that we have put forward here is a step in that direction. There is an old fiddlers tune. "It is a Step in the Right Direction. That is All." It would help the elderly. There is a good farm provision here that would help farmers to increase their exports of grain and fruit and other foodstuffs. There is a provision for retraining displaced workers. There is a soft infrastructure program that would deal with sewer and water systems. And it would replace some of the programs that have been dismantled in recent months which are so necessary to build sewer and water systems and to build the infrastructure in some areas so as to encourage industry and stimulate the economy. So I would simply say to the Senator that I doubt that this legislation would have any adverse impact on investment. but may indeed. have just the opposite effect.