Date: 1982-05-06
Speaker: ROBERT C. BYRD (democrat)
Chamber: S

The Senator will not have to wait long. So what we really see is not only ROBERT C. BYRD who said it last year and the Democrats who said it last year. but today we see the investment community. we see the business community of this country. we see the Business Roundtable. we see the National Association of Manufacturers. we see outside independent financial analysts saying that the KempRoth third year should be deferred. The Presidents program is in place. We gave the President everything he asked for. We gave him his budget cuts of $35 billion last year and then another 4 percent across the board in December. We gave him the KempRoth tax cut for 3 years. I personally asked the President in the Oval Office. when he was talking with me and some other Senators and House Members. if he would be willing to tie the third year of the tax cut to the performance of the economy and to the size and trend of the budget deficits so that if. indeed. we were not on the glidepath toward a balanced budget in 1984which at the time he said we would be and which at that time he sincerely believed we would be but which he later reversed himself onthen that we tie that third year to the performance of the economy so that we would not exacerbate the budget deficit by piling deficit on top of deficit. The President did not agree. and I know he was sincere in believing that his plan was the right thing. but he got the whole program. It is in place. and it has not worked. We have heard a lot of talk that we have to wait until the program is in place. We have heard that a long time. but we made the business tax cut retroactive all the way back to the beginning of that last year. Nobody is quarreling with that. But the administration got the whole thing. It rammed the KempRoth tax scheme through Congress. In addition to that. the administration supported the tight monetary policy. so you have expansive fiscal policy and tight monetary policy here. tight monetary policy which the administration has supported and. as a result. we have had an increase. a great increase. in unemployment. we have high interest rates. We also have these massive prospective deficits which are causing the investment community not to invest. and which are not producing the results that the administration predicted would be produced upon enactment of its supplyside economic policies. So now we find ourselves in this ter rible situation in which we have to take some strong actions in order to bring those budget deficits down. There are those of us who believe that the actions that ought to be taken to bring the budget deficits down are to defer the third year of the tax cut. We are not saying eliminate It. but defer it until such time as the economy can stand it. and also defer the tax indexing until such time as the economy can stand it. and in connection with a more prudent fiscal policy. also have a less restrictive monetary policy so that interest rates will come down and businesses will invest. and people will be put back to work. With each increase of 1 percent in unemployment. it costs the Federal Government an additional $25 billion to $30 billion. That is added to the deficit. With each $100 billion added to the deficit we have to also include something like 14 percent on top of that. So. yes. we would suggest that the way to bring the deficits down is to defer the third year of the KempRoth tax cut. and that the tax Indexing be deferred. and that the Pentagons budget be more carefully scrutinized for reductionsreductions in the proposed increase in defense spending. It is my understanding that the Defense Department is one of the few agencies of the Government that does not have an Inspector General whose role it is to ferret out waste. fraud. and abuse. Surely there must be some mismanagement. some waste in a budget of that size. So it seems to me that there are many actions that could be taken to reduce the budget deficits. We all want to work together to see that done. But what we are concerned about is that we not do it on the backs of the old people who have been promised a social security payment. and to which this Government is committed and which agreement we all entered into in good faith. Now I yield to the distinguished Senator. with my apologies. because he has been waiting: I yield for a question.