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the drifts of our American economy. However, I firmly believe that with the present repayment conditions in this bill, we will accomplish little, if anything at all, in helping those States which will first experience the impact of a declining economy.

If the spirit and the intention which gave birth to H. R. 5173 are indeed to strengthen the Federal State Employment Security program, then I say either liberalize the repayment features, to which end I have already proposed an amendment which I shall call up later, or vote the bill down, with the hope of finding the right solution at the next sessior of Congress, when we will know more about our unemployment situation.

Mr. LEHMAN. Mr. President, will the Senator from Rhode Island yield for a question?

Mr. PASTORE. I yield to the distinguished Senator from New York.

Mr. LEHMAN. I am very glad, indeed, that the Senator has so clearly brought out the plight in which some of the States will find themselves if they avail themselves of the loan privilege provision of the bill. According to the report, the $200 million fund which is described in the bill will be available to States with depleted reserve accounts, for the purpose of assisting them in the administration of their unemployment benefit payments. Obviously, only those States which are in a serious financial condition regarding their unemployment insurance funds will or could avail themselves of that privilege. But how they will be able to repay the loan as is required by the bill, is totally incomprehensible to me. The bill provides that they must repay the amount within a limited period, either through a transfer of funds from the trust funds, at the direction of the Governor, or to accept a decrease in the 90-percent allowable credit against the 3 percent for the unemployment tax. And that deduction will be increased to 5 percent each year thereafter.

That would seem to me, obviously, to pile debt upon debt, a debt which the State could not possibly repay to the Federal Government unless it at the same time was willing materially to reduce the already very small unemployment insurance payments which were being paid to its unemployed residents.

Mr. PASTORE. If the Senator from New York will permit me to say so, the bill goes a step further than that. Under the arrangements provided in the bill, insofar as the repayment features are concerned, the bill requires that unless a State pays back the money borrowed by a year after the following January, then that State can claim only, in the first year, a contribution of 85 percent on each dollar paid to the fund, instead of 90 percent. In other words, there is provided a punitive imposition of an additional 5 percent tax on industry. Then, if that amount is not paid back in the first year, there is imposed another 5 percent penalty, which means that a State then receives a credit not of 85 percent, but of 80 percent. Then if that is not paid, there is imposed, in the third degree, another 5 percent penalty, which means that a State which is already de

pressed will be able to receive credit only pressed will be able to receive credit only to the extent of 75 cents on each dollar paid to its unemployed. Unless the State could pay the loan out of money surpluses, it would have to impose an additional tax on an already depressed industry in order to meet its obligation.

The Senator can see what would happen. First of all, industries would be driven out. There would not be a chance of attracting new industry to that State. All the bill does is to express a pious hope of help, but so far as actual help is concerned, it would not help at all.

I was hoping the distinguished Senator from Colorado [Mr. MILLIKIN] would be present when I made my statement, because I think what I have just stated is essentially the crux of the defects of the pending bill. It imposes a new penalty on an already depressed industry to the tune of 15 percent during 3 years, which means that it will not only make worse a situation which is already bad, but will actually drive out present industry and will not attract any new industry. As a matter of fact, any State which would borrow money under this plan would be foolish. It might just as well make up its mind now that it is going to stop imposing a tax of 3 percent, and start imposing a 4-percent tax on payrolls and try to meet its obligations as best it can.

Mr. LEHMAN. Mr. President, will the Senator from Rhode Island yield further to me?

Mr. PASTORE. I yield.

Mr. LEHMAN. Of course, it is unnecessary for me to say that I am in complete agreement with the statements which have been made by the distinguished Senator from Rhode Island. Enactment of the bill as reported would inevitably lead to one of two things: either to an increase in taxation, which would drive out industry; or to a serious further decrease in what already are completely inadequate compensation payments to unemployed workers of the State, and thus impose a hardship—possibly an unusually severe hardship-on the workers of the State, and an inevitable lowering of theilr standard of living.

The Senator from Rhode Island is so completely correct in his position on this matter that I feel certain he has made a very great contribution to the consideration of the pending legislation by speaking as he has today. No State could possibly avail itself of this socalled privilege, which in fact is no privilege at all unless it already was in difficulties in regard to its compensation funds; and the operation of the bill as reported by the committee would merely add additional burdens to the great burdens which many of the States already are carrying.

Mr. PASTORE. Mr. President, I wish to give to the distinguished Senator from New York a graphic example. First, let me say that under the terms of the bill as reported, no State could borrow one nickel until its surplus had fallen below the amount of the entire collection of the previous year.

In very simple terms that means that the State would be unable to repay. It would be similar to the case of a man

who came to one of us on Monday and said: "I am going to be paid on Friday of this week. Will you lend me $10 until then?" Let us assume that the person to whom he made the request was very magnanimous, and replied: "Yes; I will lend you $10, but you must repay me tomorrow." His friend would reply: "How can I repay you tomorrow? I just finished telling you that I will not be paid until Friday. So it will be impossible for me to pay you back tomorrow." In short, the bill provides, in effect, "We will lend you the money you need, but you must begin to repay the money 1 year from next January."

Mr. President, unless there were some hokus pokus in the operations of our economic structure, how would it be possible for the economy of any State to be rectified within 2 years, short of a war? Can the Senator from New York tell me how that could possibly be done?

Mr. LEHMAN. I cannot tell the Senator from Rhode Island how it could be done, because in my opinion it would be an absolute impossibility to do it.

Again I wish to congratulate the Senator from Rhode Island for the very able, useful, and valuable speech he has made on the floor of the Senate this morning.

Mr. PASTORE. I thank the Senator from New York.

Mr. President, I wish to repeat, for the benefit of the very astute Senator from Colorado [Mr. MILLIKIN], that the bill as reported by the committee amounts to no more than the expression of a pious hope. But from the practical point of view of giving help to someone who is in need of help, even with the with the hope of paying back the money—and I do not wish to question that too much, if it is the intent of Congress the bill as reported would do absolutely nothing at all, for nothing that could possibly happen, short or war, could raise the economy of a State within a period of 2 years sufficiently to enable the State to pay back the money without imposing punitive penalties on its industries by raising within a period of 3 years their contribution by an added 15 percent. In my opinion, that would tremendous national catas

cause

trophe.

So I hope the Senator from Colorado will give serious thought to that phase of the problem, when I call up my amendment.

Mr. President, I yield the floor.

MESSAGE FROM THE HOUSE

A message from the House of Representatives, by Mr. Maurer, its reading clerk, announced that the House had passed the bill (S. 1276) to amend the Bankhead-Jones Farm Tenant Act in order to increase the interest rate on loans made under title I of such act, with amendments, in which it requested the concurrence of the Senate.

The message also announced that the House had agreed to the concurrent resolution (S. Con. Res. 79) to express the sense of the Senate on continuing the operation of a tin smelter at Texas City, Tex., and to investigate the need

of a permanent domestic tin-smelting industry and the adequacy of our strategic stockpile of tin, with amendments, in which it requested the concurrence of the Senate.

ENROLLED BILLS SIGNED

The message further announced that the Speaker had affixed his signature to the following enrolled bills, and they were signed by the President pro tempore:

H. R. 5158. An act for the relief of Sgt. Welch Sanders; and

H. R. 5433. An act for the relief of the estates of Opal Perkins and Kenneth Ross, deceased.

CONTINUANCE OF OPERATION OF TIN SMELTER AT TEXAS CITY, TEX.

The PRESIDING OFFICER laid before the Senate the amendments of the House of Representatives to the concurrent resolution (S. Con. Res. 79) to express the sense of the Senate on continuing the operation of a tin smelter at Texas City, Tex., and to investigate the need of a permanent domestic tinsmelting industry and the adequacy of our strategic stockpile of tin, which were, on page 1, line 6, after "Congress", insert ", and the tin produced may be transferred to the national stockpile", and to amend the title so as to read: "Concurrent resolution to express the sense of the Congress on continuing the operation of a tin smelter at Texas City, Tex., and to investigate the need of a permanent domestic tin-smelting industry and the adequacy of our strategic stockpile of tin."

Mr. SALTONSTALL. Mr. President, I have taken up this matter with the majority leader and the minority leader. The amendment of the House of Representatives is a permissive one, not compulsory. It will not change the substance of the concurrent resolution as adopted by the Senate.

Therefore, Mr. President, I hope the Senate will concur in the amendments of the House of Representatives, and thus obviate the necessity of the resolution being sent to conference.

Mr. JOHNSON of Texas. Mr. President, will the Senator from Massachusetts yield?

Mr. SALTONSTALL. I yield.

Mr. JOHNSON of Texas. Will the Senator from Massachusetts tell us the effect of the amendment adopted by the House of Representatives?

Mr. SALTONSTALL. I shall be glad to do so. Let me say that the purpose of the concurrent resolution is to continue for 1 year-until Congress has had a chance to investigate and to determine whether there should be a further continuation-the operation of the tin smelter owned by the Government, at Texas City, Tex. The concurrent resolution as adopted by the Senate provided that operation of the smelter should be continued, and authorized the creation of a committee, but the Senate eliminated from the concurrent resolution a provision to the effect that the tin produced at the smelter should be added to the stockpile of the United States

Government.
Government. That change was made PROPOSED CONSTITUTIONAL

because it was thought that the stockpile was ample or could be ample, let me say, without going into security reasons, and that such a restriction should not be imposed.

The amendment adopted by the House of Representatives adds a provision to the effect that the tin may be transferred to the national stockpile, but the amendment does not require that it be added to the stockpile. Thus, the amendment is merely permissive, in the opinion of Mr. Mansure and Dr. Flemming, the heads of the two agencies concerned.

So, Mr. President, I can see no objection to the amendment of the House of Representatives, inasmuch as it is a per

missive amendment.

Therefore, I ask the Senate to concur in the amendment of the House.

Mr. JOHNSON of Texas. Mr. President, I should like to ask another question of the distinguished chairman of the Armed Services Committee: In his opinion, is the amendment necessary in order to have tin produced at the smelter?

Mr. SALTONSTALL. It is not.

Mr. JOHNSON of Texas. Then the amendment is superfluous, inasmuch as there is already on the statute books a law which provides that the tin may go into the national stockpile, if that is desirable, whereas the House has added an amendment to the same effect.

Mr. SALTONSTALL. I appreciate the comment the Senator from Texas has made, and I believe he is correct.

Mr. JOHNSON of Texas. Mr. President, in view of the fact that the amendment of the House of Representatives does not change or add anything to the existing law, I see no necessity for the amendment, although I do not particularly object to it. Certainly, it seems to me there is no necessity, after the passage of a law, to reiterate it from

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NATURALIZATION OF CERTAIN

FORMER CITIZENS

The PRESIDING OFFICER laid before the Senate the amendment of the House of Representatives to the bill (S. 1303) to provide for the expeditious naturalization of former citizens of the United States who have lost United States citizenship by voting in a political election or plebiscite held in occupied Japan, which was, in line 4, to strike out "plebescite" and insert "plebiscite."

Mr. WATKINS. Mr. President, in the Senate bill the word "plebiscite" was misspelled. The correction of the spelling is the only amendment.

I move that the Senate concur in the amendment of the House.

The motion was agreed to.

AMENDMENT TO REQUIRE ANNUAL BALANCING OF THE BUDGET Mr. BRIDGES. Mr. President, I should like to request the serious attention of this body to a fiscal policy in the Federal Government whose discontinuance is, in my opinion, long overdue.

The distinguished Senator from Virginia [Mr. BYRD] and I propose that the Government put an end to the practice of financing operations through the medium of an interest-bearing charge account that is never paid. This is precisely what we have been doing for the past 20 years.

I realize that, in many economic circles, fiscal morality has been largely relegated to the "old hat" department, and that balanced budgets are regarded as vestigial remnants of our remote past. But in spite of these experts, I cannot avoid the conviction that the stability and national security of America are directly dependent upon the stability of the American dollar, which in turn, depends upon our shutting off this fantastic charge account on which the Federal Government has come to depend. The time to start is right now.

II

If my position on this matter requires collateral support, it may be found in President Eisenhower's address of June 10, in which he predicted 40 years of costly defense, and called for a fiscal program which the country could sustain for a long, long period of timẹ.

During the past 20 years most of our serious fiscal problems have been dealt with on an emergency basis. Each issue was considered a nonrecurring crisis, a milestone in history, the crossroads of our destiny, and what have you.

No one would deny that emergencies of great magnitude which strike the Nation unexpectedly must be dealt with by heroic means, whatever the finanBut we have been cial cost may be. deceiving ourselves concerning the unpredictability of these fiscal problems. We cannot honestly say that there is anything unexpected about the emergency which faces us now, and is likely to face us for the next 40 or 50 or even 100 years.

We are going to have to stop using the words "emergency" and "crisis" and find a new name for our problem, and a new method of dealing with it.

I suggest that the problem of expensive national defense has become, to all practical purposes, a permanent one. I urgently suggest that we face the problem of fitting this permanent situation into our permanent American way of life. This is not merely something we should do: It is something we must do.

III

This return to orthodox financing should not be a psychological strain on the Nation because the one practice which has always set America apart from most other countries is our stubborn habit of not spending any more than we can pay. As a result, for almost 150 years we had a reasonably stable dollar, which in turn, contributed

to the maintenance of a stable government.

But during the 20-year period which has elapsed since the Federal Government opened its multibillion-dollar interest-bearing charge account, the value of the American dollar has been cut in two. Theoretically, if we were to continue the same policy and continue to depreciate our currency at the same rate for the next 40 years, in 1994 the American dollar would be worth about 122 cents.

However, there is little chance that our currency depreciation would work that way because, if history tells the truth, somewhere along the line the flood of money would burst its bounds and our entire money structure would have to be repudiated and revalued at ruinous rates.

Under these circumstances it would be virtually impossible to carry on an orderly defense program except under martial law, or under a dictatorship whose directives would carry the power to supersede the normal economic relations between people and people and between government and people.

As a result one of two things would happen. Our national defense would be weakened or our civil liberties curtailed. There will be voices from high places that will belittle these fears and assure us that no such dangers exist because with modern techniques this interestbearing charge account can be manipulated and kept under control ad infinitum.

In fact, there have already been proposals that deliberate inflation at a predetermined rate would be a good thing for the country because of the tested and proven methods of keeping the inflationary mechanism under precise control. Regarding this proposal, I can only say that among the few things of which I am certain concerning economics-and I am certain of very few things-is that nothing is certain despite the experts.

Economic behavior is human behavior, and no one-not even the person himself-can predict what he is going to do under certain circumstances. We must not put our trust in any scheme involving the manipulation of money. For national stability and safety, there is no substitute for a balanced budget.

It might be well for me to state at this point that I do not propose that the Federal Government be stopped from the use of its credit. The intricacies of Government finances require a flexibility that can only come from the use of credit. But that use should be limited to 1 year.

My proposal, therefore, is that the Federal Government be required to retire any such debt during the 12-month period following its creation.

A question that naturally arises concerns the disposition of the existing Federal debt. In my opinion, this debt, or most of it, as well as the cost of servicing it, will have to be regarded as semipermanent factors in our economy.

At least one thing seems certain-the disposition of our existing debt is a problem for future Congresses-not this one. But regardless of what can be done con

cerning the sins of the past, we must pledge ourselves to sin no more.

V

I do not believe that I should try to include in these remarks any technical description of the monetary inflation process.

Among the supposedly popular advantages of money which becomes progressively cheaper, is that people who owe money can cheat their creditors. In other words, a person can build a house with borrowed money consisting of 100 cent dollars and pay off the loan with 50 cent dollars. I have never subscribed to this theory. I have always found Americans to be fundamentally decent and honest. And actually the theory itself does not apply to Americans. That procedure is difficult enough to understand even when studied from a book.

But there is one basic principle, understandable to everyone, that should be made a part of these remarks, the essence of which is that monetary inflation is unnecessary and benefits no one.

I should like to present this argument to the Senate in the phraseology I found in a little elementary primer on money.

The passage is entitled "The Cost of War Is Not Money," but it could read "the cost of government at any time is not money":

The economic cost of fighting a war, although measured in money, is not money: It is used up goods and services.

Certain things are needed by the armed services, and because they must be taken from the people, the Nation suffers a lower scale of living.

For example, in World War II, about 50 percent of the national production was purchased by Government.

But taxes were not 50 percent: They were only about 30 percent, leaving the people about 70 percent of their income.

If the people and the Government had been willing to face up to the real cost of war, that is, if taxes had been at the rate of 50 percent, the Nation would have been on a pay-as-you-fight basis, and there would be no war debt.

This pay-as-you-fight plan would not have penalized people because they could have bought the same quantity and quality of goods and services with the remaining 50 percent of their income as they bought with the 70 percent.

For Government to take away goods and services without taking away the money paid out for their production only conceals the true cost of Government and creates unnecessary debt.

Let us look at this problem from a different angle. In its effect the inflationary borrowing which supposedly relieves the people of taxes is, in itself, a tax.

Let us assume that instead of getting from the people the full cost of the budget, we borrow from the commercial banks an amount equal to 5 percent of the money supply. When this money is spent by the Federal Government despent by the Federal Government departments, there is in the market $105 in search of every $100 worth of goods. search of every $100 worth of goods. So prices go up and the value of the dollar goes down.

The people will get only about 95 cents worth of goods for their dollars. This loss in purchasing power has the same effect as a tax or a capital levy.

I believe that it must be so considered, regardless of the technical explanations that may obscure the facts. To make matters worse, it leaves behind it an interest-bearing debt.

VI

One of the textbook maxims we learned concerning money is that it should be a safe store of value: In other words, people should be able to get as much for their money when they spend it as they gave up when they saved it.

Under our Constitution the responsibility and the power to make the United States dollar a safe store of value rests largely with the Congress.

The private actions of the peoplesuch as undue expansion of private credit-may affect the value of money, but by and large, the control lies in the Congress.

For 20 years we have been manipulating-or at least we have been a willing agent in the manipulation of-the value of the dollar.

A person who had an income from salary or other sources of $5,000 in 1939 now has an income of less than $2,500, even though the number of dollars remains the same. In other words, the United States dollar has ceased to be a safe store of value.

The Federal monetary policy under which this has happened is known as the cheap-money policy, under which money becomes cheaper and cheaper.

We are told by some political experts that this is a popular policy-a policy that wins friends and influences voters.

There is no doubt that in a country where private debt is owned by a few rich people and the debt is owed by millions of poor people a cheap-money policy would be politically popular, but in America private debt is owned by almost everybody, at least everybody who has an insurance policy or a savings account or a Government bond.

For this reason, cheap money in America hurts more people than it helps.

I am convinced that the American people know that cheap money is not, and should not be, a vote getter.

As evidence I quote from a national survey that was made a part of the hearings before the Bricker subcommittee of the Committee on Banking and Currency in April of this year.

In this survey, which was conducted by the Opinion Research group of Princeton, N. J., the people were asked if they would rather get ahead by being able to buy more with their present income or by receiving more money.

Eighty-five percent said they would rather get ahead by being able to buy more with the money they now receive. That is a good American sign.

It is significant, I believe, that there was very little variation of this percentage in any vocational or geographic breakdown. It makes no difference where a person lives in America or whether he is a plumber or a carpenter or a textile worker or a painter, the reaction is generally the same.

VII

At the risk of seeming to be an alarmist, I should like to point out that the political situations surrounding the

chronic use of this interest-bearing charge account serve the purposes of socialism.

The fundamental appeal of socialism is the apparently magical handout from the kindly central government which has declared war on poverty.

The bottomless purse in the hands of a Socialist-minded bureaucracy is the ideal weapon with which to break down the virtues of thrift and industry and destroy the self-sufficiency and personal initiative of the people.

At the same time it is, as we have noted, a form of invisible taxation-a secret capital levy-upon all of the people which can be used to destroy the people's financial stake in their free economy.

Under this policy it is also possible to buy the people's votes with their own money without the people having any knowledge of what is going on.

This charge account policy which we have been following came to America by way of Socialist England.

Its master architect was the late Maynard Keynes, who mysteriously jettisoned a lifetime of sound economics to serve the Fabian Socialist welfare state.

The Keynes plan looks much better on paper than it looks on the record.

As its name implies-the name being compensatory spending-it is supposed to work both ways: when times are bad, the government taxes less than the cost of government and charges the rest; when times are good, government taxes more than the cost of government and uses the surplus to reduce the charge account. The theory is a fascinating one. It is an appealing one.

The only trouble with compensatory spending is that it is not compensatory it works only one way.

The fact that Keynes, before he died, practically repudiated his own theory, does not seem to dampen the ardor of his American disciples.

VIII

It has been suggested that a balanced budget policy on the part of the United States would alarm our allies, who depend upon us to greater or lesser degrees for economic and military assistance.

I do not believe that this could be true

of any well-informed and candid ally. The basic necessity of a stable currency is certainly known to all, and no other country, except behind the Iron Curtain, would wish to see the United States weaken itself.

Regardless of what may appear in foreign capital newspapers, the foreign statesmen who are really in need of American assistance want America to stay strong and stable.

On a purely peacetime basis, the stability of the Yankee dollar is of tremendous importance to the stability of world trade.

In short, a balanced United States budget could not harm our friends and allies abroad.

IX

Last but not least, I should like to mention the spending pressure to which the Congress is subjected. It is known to every Member of the Senate.

One of the evils of this interest-bearing charge account is the difficulty we have experienced in resisting pressures for special consideration involving Federal expenditures.

As matters now stand, a pressure group or a Government bureau can approach the Congress with the full knowledge that if its story is good enough, it will not have to worry as to where the money is coming from.

I do not mean to infer that the Congress has succumbed to every eloquent spending group by which it has been approached, but I do say that we would be approached by far fewer and our resistance would be far higher if we were to close out our charge account.

A bill recently passed by Congress, which has just come to the attention of the Committee on Appropriations, allows the Committee on Appropriations no latitude whatever as to whether or not the committee shall recommend appropriations. It authorizes a department in the Federal Government to spend money, and to incur obligations which, if Congress failed to appropriate money, certainly would constitute a claim against the Government.

The bill was reported by a committee after hearings. It was passed by the Senate. Later, hearings were held in the House, and the bill was passed by the House. The bill went to conference and was signed by the President. Frankly, I did not know anything about that provision in the bill. I am not a member of the committee that reported the bill. I did not know anything about it until it came before the Committee on Appropriations.

That experience shows that Senators must not only resist pressure, but they must keep both eyes open and both ears open, and must read nine or ten thousand bills, or some such provision as that in the bill to which I have referred will be slipped over.

As matters now stand, there is little we can say concerning the evils of spending that would deter the spending groups.

Of the thousands of witnesses at the hundreds of hearings held by the Committee on Appropriations of the Senate, rarely-I could say almost never-except where a bill involves a local project and there is a local divided interest, do we have anyone appear before the Committee on Appropriations in opposition to big spending.

I see on the floor members of the Committee on Appropriations: The distinguished Senator from New Mexico [Mr. CHAVEZ], the distinguished Senator from Minnesota [Mr. THYE], and the distinguished Senator from Arizona [Mr. HAYDEN]. They will verify what I say, namely, that rarely, if ever, does a person appear before the Committee on Appropriations in opposition to an appropriation or in opposition to spending, unless it involves a controversy of a local nature, where two sides have developed with respect to a particular project. I ask the Senator from New Mexico whether I am correct.

Mr. CHAVEZ. Mr. President, will the Senator from New Hampshire yield?

Mr. BRIDGES. I yield to the Senator from New Mexico.

Mr. CHAVEZ. The Senator is correct. During some 14 or 15 years as a member of the Appropriations Committee I have noticed that there are always at the hearings the boys from the departments who will prove conclusively that it is necessary to give them everything they want. But I have yet to see a member of a department or someone appearing as a citizen who will say, "Yes, we should like to have this money, but for this reason we should not have it." It is a one-sided affair. The boys come up from the departments every year and usually make a fine showing, but we never have a representative of John Q. Public before the committee who will say, "This is very nice, but for this reason we should not do it at this time."

Mr. BRIDGES. The Senator is completely correct. That is the problem which we face. If the people knew that extra spending inexorably brings on extra taxes, the evils of spending would assume a personal significance. John Jones asks for funds for a particular project. He is probably a hero back home, where it is likely that someone who is egging him on and patting him on the back for coming to Washington and demanding big spending. But if he knew when he advocated the particular item of expense that it would bring on higher taxes, and the people back home would have to pay them, he would think for a second time before urging such an appropriation.

Mr. CHAVEZ. Mr. President, will the Senator from New Hampshire yield further?

Mr. BRIDGES. I yield.

Mr. CHAVEZ. Along the line of what the Senator is now discussing, permit me to speak of an instance which occurred in my own State and city. While a revenue bill was being considered by this body a gentleman representing a certain committee of the chamber of commerce in my city telegraphed requesting me to do everything possible to reduce taxes. I replied: "We have the Forest Service, the Soil Conservation Service; we have all kinds of governmental activities. Which one do you wish to cut out?" He did not wish to cut out a single one.

Mr. BRIDGES. That is a good example. I receive a letter from Mr. John Smith, who says, "Now, Senator BRIDGES, we demand that you stand for economy, and we urge you to cut the expense of Government." Government." So I am complimented to hear from Mr. John Smith, and I feel he is taking an active interest in Government.

A few months later I receive another letter from John Smith. This time he wants me to vote for funds for some particular interest which is worthy and appealing to him, but he completely contradicts his original communication. I can produce from the files of my own office and from the files of the Appropriations Committee scores and scores of letters from persons who are well intentioned and who, time after time, urge economy by the letter route, but who later request the Senate to vote to support an appropriation for a particular project in which they are interested.

ing all such fiscal years, it shall enact measures to raise during such ensuing fiscal year an amount of additional revenue at least equal to the amount of such excess.

We must find some definite, partic- the actual receipts of the Government durular, precise way to meet this situation. After years of seeing only occasionally, in the course of 2 or 3 decades, a possibility of balancing the budget, the distinguished Senator from Virginia [Mr. BYRD], who has made a study of this subject, and I are submitting a proposed constitutional amendment which which we

think will be the answer.

I have tried in these remarks to cover the following points:

First. Balanced budgets are essential to national defense.

Second. Balanced budgets are essential to the maintenance of the value of the people's savings.

Third. Balanced budgets do not add to the tax burden.

Fourth. Balanced budgets do not penalize our friends abroad.

Fifth. Balanced budgets would help Congress resist spending pressure.

Mr. President, I send to the desk an amendment for appropriate reference, proposed by the distinguished Senator from Virginia [Mr. BYRD] and myself.

The joint resolution (S. J. Res. 174) proposing an amendment to the Constitution of the United States to provide for the imposition of Federal taxes to provide revenues at least equal to appropriations, except in time of war declared by the Congress or when the United States is engaged in open hostility against an external enemy, introduced by Mr. BRIDGES (for himself and Mr. BYRD), was received, read twice by its title, and referred to the Committee on the Judiciary.

Mr. BRIDGES. Mr. President, before I close I should like to read one or two sections of the proposed amendment. It is very simple, and I think, if it could be adopted, it might at least maintain a solvent America. This is the only time

I know of and I have been in the Senate for 18 years when there has been a concrete, specific, positive approach offered on the question. I read from the proposed amendment:

SECTION 1. On or before the 15th day after the beginning of each regular session of the Congress, the President shall transmit to the Congress a budget which shall set forth his estimates of the receipts of the Government during the ensuing fiscal year under the laws existing on such date and his recommer.dations with respect to appropriations to be made for such fiscal year.

Listen to this:

Except in time of war declared by the Congress or when the United States is engaged in open hostility against an external enemy, the total appropriations recommended by the President for any fiscal year shall not exceed the total of his estimates of the receipts of the Government during such fiscal year.

SEC. 2. In the event the Congress, except in time of war declared by the Congress or when the United States is engaged in open hostilities against an external enemy, makes appropriations for the ensuing fiscal year in excess of the total of the President's estimates of the receipts of the Government during such fiscal year reduced by any amount by which the appropriations made for all previous fiscal years beginning subsequent to the effective date of this article of amendment (except fiscal years during which the United States has been engaged in a war declared by the Congress or open hostility against an external enemy) have exceeded

I shall skip a little and read section 4: SEC. 4. No motion in either House of Congress to adjourn for more than 3 days Congress to adjourn for more than 3 days shall be in order during any period of time when the Congress has failed to perform its duty under section 2 of this article.

In other words, Mr. President, unless this country is at war declared by the Congress, or in open hostility against an external enemy, when Congress appropriates money beyond the receipts estimated or beyond the actual receipts of the Government for that year, the Congress of the United States cannot recess or adjourn for more than 3 days at a time until the necessary revenue is provided.

Mr. President and Senators, as I have said, this is a simple amendment. simple amendment. Many persons will attempt to tear it to pieces, but it is stated as simply as it can be stated. If the amendment should be adopted by Congress and ratified by 36 States of the Union, it can save America. States of the Union, it can save America. If Senators have any love for their country, if they want to keep the United States solvent and stable, for their children and their grandchildren, they could not do better than to support this proposed amendment.

Mr. CHAVEZ. Mr. President, will the Senator yield?

Mr. BRIDGES. I yield.

Mr. CHAVEZ. With reference to the preparation of the amendment, which, in my opinion, has much merit, was consideration given to the practice of the executive departments coming before coming before Congress after the regular appropriation bills have been passed, and seeking supplemental appropriations, in an effort to make up for or to secure what the regulation appropriation bills did not provide? I have experienced instances of that kind. Even now, as the Senator from New Hampshire knows, hearings are being held on a supplemental appropriation bill. In my opinion, this practice should not be allowed to continue. If the Budget Bureau has any recommendations to make, I see no particular reason why it should not make them in connection with the regular appropriation bills, instead of waiting until the last days of the session to come before the Committee on Appropriations with a request for supplemental appropriations, and seeking to obtain at the end of a session what they did not see fit to recommend at the beginning of the session. Was any consideration given to that condition?

Mr. BRIDGES. Yes. I agree with the distinguished Senator from New Mexico. He well knows, as I know, that the supplemental bills or deficiency bills, as they are sometimes called-there are two types-are the most dangerous measures which Congress must consider. If the proposed constitutional amendment were ratified, it would apply to and include all supplemental appropriations, as well as regular appropriations, because all the appropriations would have to be acted on within a fiscal year or before the adjournment of Congress.

But the distinguished Senator from New Mexico has hit upon a very great weakness in our system. Instead of appropriations being handled in the regular budget of a department or a bureau, with the approval of the Bureau of the Budget, a department or a bureau may make a request for supplemental appropriations. These are not considered at the time when the regular appropriations, which are frequently made to appear very low, are considered. So the Senator from New Mexico has struck at the nub of the question.

Mr. BYRD. Mr. President, I wish to congratulate the distinguished Senator from New Hampshire, who is chairman of the Committee on Appropriations, upon the very splendid speech he has made. I have been closely associated with the Senator from New Hampshire for a long time, and I join with him in his efforts toward establishing an economically sound Government.

I wish also to pay tribute to the Senator from New Hampshire for the exceptionally able work he has done as chairman of the Committee on Appropriations in reducing nonessential Government expenditures. I am most pleased to be associated with him in the effort which is now being made to improve the budgetary procedure of the

Government.

For 25 years-a full quarter of a century-with only 4 exceptions, the Government of the United States has operated in the red, and a balanced budget is not yet in sight.

The deficit for the year ended June 30, 1954, was approximately $3 billion. In this new fiscal year the deficit will be larger because taxes have been reduced faster than expenditures.

It is imperative to stop deficit spending. I cannot conceive that the Government should operate on a permanent deficit basis. If that should happen, the Government would go over the precipice of financial disaster. I concede that the Government is operating on a permanent debt basis, but we must not continue to add to the debt.

In 25 years we have appropriated $1,200 billion or $1.2 trillion. Of this we have expended $900 billion, or $0.9 trillion, leaving unexpended balances on hand as of this date of $143 billion after excluding rescinded and expired appropriations.

At the same time we have taken $675 billion out of the pockets of the taxpayers and loaded $250 billion, or a quarter of a trillion dollars, in Federal debt on their backs within a period of 25 years.

It accomplishes nothing to say that much of this unhealthy fiscal condition was caused by depression and war emergency.

After all wars, except World War II, the war debt has been paid off. That happened following all wars, including World War I.

Actually, a substantial part of the debt we now owe was incurred during the nonemergency peacetime peacetime years. Whatever the occasion may have been, the debt is ours, and the full faith and credit of all of us are pledged to pay it

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