March 24, 1962 (2)

The Senate resumed the consideration of the motion of the Senator -from Montana [Mr. MANSFIELD] to proceed to the consideration of the joint resolution (S.J. Res. · 29) providing for the establishing of the former dwelling house of Alexander Hamilton as a national monument.

Mr. ROBERTSON. Mr. President, in the news column of my hometown paper, the Lexington Gazette of March 24, 1837, there appears this item:

THE GLOBE SAYS

When General Jackson came from the Hermitage to the Presidency he took an outfit from his private means of $5,000. This he expended, and lost · an -additional amount by his 8 years' absence from his estate in Tennessee, and the burning of his house a~d " {urnlture. on. -· squarin - g his " accounts ' hi Washington, he had scarcely as much money left . of. hiS if years salary as would pay his expense to Tennessee.

Most of us concerned about deficits in our Federal budget and increases in our national debt know that Andrew Jackson, as President of the United States, balanced the budget and also paid off the national debt in its entirety. Yet not many Members of the Congress may be aware · that Andrew Jackson, after spending 8 years in the White House and ing after investing $5,000 of his own funds at a time when the dollar was worth many times more than it is today, had scarcely enough money left to pay his and expenses in order to travel back home.

Thanks to men like Andrew Jackson and who believed in both personal and political frugality, our experiment in representative democracy was able to work. Unfortunately, others have repudiated the traditions of our Founding Fathers, and especially the principles of States' rights and Government economy by the Thomas Jefferson and Andrew Jackson, and they are building up public debts may that could eventually wreck our Government.

Nearly $300 billion of our public debt to is now outstanding. But that liability is only a small part of what the Government owes. We have contingent liabilities of many more billions of dollars for Federal · guarantees and insurance as well as for such items as insured bank de- posits, commitments to veterans for future compensation and pensions under present programs, and unfunded contract authorizations.

Mr. President, according to the Treasury Department, over $361 billion was outstanding in mid-1961 in certain longLong-range commitments

Commitment or contingency and agency

Loans guaranteed, insured, etc., by Government agencies:

Agriru.lture Department: ·

Commodity Credit Corporation ______________________ _ _ Farmers' Home Administration: Farm tenant mortgage insurance fund _____________ _ Civil _ Aeronau~cs Board-----------------------------------­ Commerce Department:

Federal Maritime Board and Maritime Administration: Federal ship mortgage insurance revolving fund----­ Development Export-Import Loan Bank Fund----------------------------------- of Washington _ ______________________ _ Housing and Home Finance Agency:

Federal Housing Administration: Property improvement loans — _ ________ _: ___ _ Mortgage loans_-------------- - ---- - - - -------------- OIDce of the Administrator: Urban renewal fund ________________ : ____ ~ ~ ---------

Pnblie Housing Administration:

Local housing authority · oonds and notes (commitments covered by annual contributions) _________ _

Local housing authority temporary notes (guaranteed). ---- ~ ----- -------- _ _._.: ____________________ ---

Interstate Commerce Commission.-------------------- · ----­ Small Business Administration:

Revolving fund.~-----·---------------------------------

Reconstruction Finance Corpor a tion liquidation fund __ See footnotes at end of table. range commitments and of the U.S. Government . . Mr. President, I ask unanimous consent to have printed at this point in the RECORD a release prepared by the Trea.Sury Department ' on this subject. .

There being no objection, the was ordered to be printed in the RECORD, as follows:

LONG-RANGE COMMITMENTS AND CONTINGENCIES OF THE U.S. GOVERNMENT

30, 1961

The attached statement covers the major financial commitments of the U.S. Government, 1 except the public debt and those involving recurring for which funds are regularly appropriated by the Congress and are not yet obligated, such as aid to States for welfare programs participation in employee-retirement systems. The statement is segregated into four categories; namely (a) loans guaranteed insured, etc., by Government

(b) insurance in force; (c). obligations issued on credit of the United States; and (d) undil : bursed commitments, etc.

The items appearing in this statement are quite different from the direct debt of the United States. They are programs of range nature that may or may not

Government to expend funds at a time. The extent to which the Government be called upon to meet these tnents varies widely. The liability of the Government and the ultimate be made are of a contingent nature are dependent upon a variety of factors, including the nature of and value of the held as a reserve against the commitments, the trend of prices and employment, and other economic factors.

caution should be exercised in tempt to combine the amounts in the ment with the public debt outstanding that would involve not only duplication would be combining things which are dissimilar. As indicated by the statement, there are $109.3 billion of debt securities held by Government other agencies as part of the assets would be available to meet future The following examples illustrate the need and contingencies of the U.S. Go v

[In millions of dollars]

Public

Gross debt amount securities of com- held by mitment Governor con- ment tingency and other agencies

Treasury Department:

25 ---------- Veterans'

Insuiance and guarantees in force: '·US 104 84,116 653 Commerce Department: . 2,925 Federal Deposit

Held by

'22 rntematro~~ contingencies for extreme caution 1n using data on the contingencies and other commitments of t he U.S . Gov e rnment. · t. The Federal Deposit Insurance Corporation had insurance outstanding as of June 30, 1951, estimated to be $152.8 billion. The experience of the Federal Deposit Insurance release Corporation has been most favorable. During the period this Corporation has been in existence, premiums and other income have substantially exceeded losses which has permitted the retirement of Treasury and Fed­

AS OF JUNE eral Reserve capital amounting to $289.3 million (all repaid to Treasury), and the accumulation of $2.3 billion reserve as of June

30, 1961. The Corporation's holdings of puboutstand­ lic debt securities as of that date amounted costs to $2.4 billion which already appears in the public debt total. Out of $288.7 billion of as E ets in insured banks as of June 30, 1961,

$66.1 billion are in public debt securities (also reflected in the public debt). The assets, both of insured banks and the Federal

Deposit Insurance Corporation, as well as agencies; the continued income of the Corporation from assessments and other sources, stand between insured deposits and the Government's obligation to redeem them.

2. The face value of life insurance policies issued to veterans and ~n force as of June 30, a long­ 1 ':'6' , r mo u n t e d to $41.7 billion. This does commit not represent the Government's potential liafuture bilities under these programs since some of these policies will probably be permitted commit­ to lapse and future premiums, interest, and the invested reserves amounting to $6.9 bll· disbursements lion of public debt securities should cover the and normal mortality risk.

3. Under the Federal Reserve Act of 1913, assets as amended, Federal Reserve notes are obligations of the United States which, as of

June 30, 1961, amounted to $26.7 billion. The full faith and - credit of the . United States 1s any at­ behind the Federal Reserve currency. These state­ notes are a first lien against the $49.3 billion for of assets of the issuing Federal Reserve but b a nks which includes $27.3 billion of Govquite ernment . securities already included 1n the enclosed public debt. These notes are specifically sepublic cured by collateral deposited with the Fedand eral Reserve agents . which, as of June 30, that 1961, amounted to $21.2 billion in Governlosses. ment securities and $9 billion in gold cer-

tificates.

ernment as of June 30, 1961 Public

Gross · debt amount <Jecurities ofoom­ held by

Commitment or contingency and agency mitment Govern- · or oon­ ment tlngenq and other agencies Loans guaranteed, insured, etc.-Continued .

Reconstruction Finance Corporation liquidation fund.. 82

D l;} fense Production Act of 1950, as amended __________ _ '14

Federal Civil Defense Act of 1950, as amended _________ _ J2 Administration----------------------------------- '16,:HK Defense Production Act of 1950, as amended ______________ _ 171

Total loans guaranteed, insured, etc., by Government agencies------------------------------------------------- 66,279 757 Agr~~J~~~ g;~~rf:S:!itce Corporation - ------------------ - • · 263

Federal Maritime Board and Maritime Admlnlstratton:

War risk insurance revolving fund _______ :__________ 132 - . "'-------- Expo~~:rz:t~r;n~~r 0 :p!~~fn~ce- · ---------~------- • 1 Insurance Corporation _____________________ 10 152.769 -----2;"«0 insured commercial and mutual savings banks __ ---------- eel, OQl Federal.Home Loap Bank Board:

Federal Savings and ~Insurance Corporation_____ •• 82.6G3 '&;n:a~~~~~~.:atkii:·-------- -: --- . ---- ---------- Ind . ustrial guarantees~~--------------------------------- 8

Long-range commitments and

Commitment or contin g ency and agency

Insurance and gu a rantees in force-Continued U.S. Information Agency:

Informational media guarantees---------- - -- --- -- --- -- -­ Veterans' Nationat Administration servtce life t:nsurance : _____ _ _ _ ___ __ ___ _ ______ _ _ _ U . S . Government life insurance ___ _ ____________ __ ____ __ _ Total insurance and guarantees In force .. .. ~ --- - -- --- - Obligation!' Issued on credit of the United States:

Postal savings certificatt>s :

U.S. Postal Saving~ System _ _ _ __ ____ _______ __ ________ __ _ Canal Zone Postal Savings System _ _ __ _ _ _____ __ _ __ _ _ __ _ _ Total po s tal savings CPr t ificates . . ------ - - --- ~ --- - ----- Other obligations: Federal Reser v e notes (face amount) __ ._ _ _ _ Undisbursed commitments, etc.: To make future loans:

Agriculture Department: ·

Commodity Credit Corporation ______ _ _ _ _ _ _____ _ _ _ _

~~~~~,l~~~ee~d~~~~~Yo~d------ - ----- -- - --

Farm tenant mortgage insurance fund _________ _

State Loan rural programs.-- rehabilitation - ----------------------------- funds _ __ _ ____________ _ Rural Electrification Administration __ --- - --------­ Development Loan Fund- -- -- -- ---------------------- - ­ Export-Import Bank of Washington:

Regular lending acti v ities _ _ _ _ __ _ _ __________________ _ Housing and Home Finance Agency: •

Office of the Administrator:

Public College facility housing loans. loans------ _____ _ - ___ ----- : __ - __ ------------ _____ _ . _____ - _: - _

Urban renewal fund ______________________ _ : ___ _

Public }lousing Housing for the Administration elderly_--------- ______________ - -------------- _ __ _ __ _ · Int11rior Department:

Bureau of Commercial Fisheries:

Fisheries loan fund . ------------------ - -- -- - - - - ­ DefenSP Minerals Exploration Administr a tion: Defense Production Act of 1950, as amended ___ _ 1 Guaranteerlloan1; and certific a tes of interest, included in sheet with the direct loans, amounted to $606,000,000 as of 2 Includes accrued interest.

a Less than $500,1JOO .

4 Represents the Administration's portion of insurance amount of irisurance . in force and loan reports in proces.~, $1,610,000.000. Insurance on loans shall not exceed 10 percent such loan s. · ' Excludes $17.000,000 deferred participations (guaranteed estimated amount not requiring purchase.

e Represents deferred participations.

7 RepreSPnts the Veterans' Administration portion ofinsurance amount of loans In the hands of private lenders is estimated at

Mr. ROBERTSON. Mr. President, actually, the contingent liabilities of the I Federal Government go well beyond the total of $361 billion set forth in the Treasury Department's statistics. To cite only a few examples: There is a large but unmeasured liability of the Federal Government for insured mail in transit. For the civil service employee retirement fund, the unfunded accrued liability-or deficit-exceeded $32.5 billion in mid-1961. A more remote but, nevertheless, outstanding contingent Federal liability, approaching $7.8 bil­ ton lion in mid-1961, consisted of Maritime Administration war risk insurance · binders outstanding.

In addition to huge liabilities such as these, the Treasury Department reported was unfunded contract authorizations of as over $11.7 billion outstanding in mid- 1961, plus more than $26.2 billion in unused authorizations to expend from debt receipts by drawing funds out of the Treasury through back-door financ- on 1 ing without requiring prior appropria­ to tions. _

Nor is this all. In addition to the deal $440 billion in Federal guarantees, in- An contingencies of the U.S. Government [In mllllons of dollars]

Public

Gross debt amount securities of com­ hPld by mitment Governor con­ ment tin g ency and other agencies

40,311 5,866 ·

1,349 1,071 257,867 80,555

12 700 721 To purchase mortgagt>s:

125 5

705 726 __ _ 26 , 736 11 Zl, 253 To guarantee and insure loans: Agriculture Department:

1 Commerce Dep a rtment:

19 1 ------ - --- tration:

1,137 2,107 2 Unpaid subscriptions, etc. :

ment _______

(l) Intern a tional the Corporation's balance June 30, 1961. 8 1o Estimated insurance liability u The Export-Import liability. The t>stimated 12 Excludes accrued interest.

as of June 30, 1961, is u Includes public of the total amount of posited by the Federal specific collateral.

loans) representing estiNOTE.-The above liability. The total

$29,864,000,000.

surance, and contingent liabilities that have already mentioned, there is, course, the public debt now approaching $300 billion. On top of these amounts should be placed accrued military pensions and commitments to veterans future pensions and compensation, ing $100 billion or more. Mr. President, I ask unanimous consent to printed at this point in the RECORD, an article written by Maurice H; Stans, former Director of the Bureau of the Budget, and published in the Washing­

Post, February 19, 1962, in which states that Federal commitments and contingencies exceed $1 trillion. That would be more than $1,000 billion.

There being no objection, the ordered to be printed in the RECORD, follows:

UNCLE SAM FACES $1 TRILLION DEBT

(By Maurice H. Stans)

Treasury Secretary C. Douglas Dillon has asked for a $10 billion increase in the our national debt. This would bring dn all-time high of $308 billion. The Congress has indicated that it with this request in two installments.

increase of $2 billion will undoubtedly as of June 30, 1'961-Continued Public

Gross debt amount securiti e s of com­ held by

Commitment or contingency and agency mitment Gov e rnor con ­ m e nt tin~ency a nd o the r a genc i e s Undisbursed commitments, etc.-Continued To make fu t ure lo a ns-Continued International Cooperation Administration:

Loans to foreign countries u-- - ------- ~ ---- - --- - - - --­ 1, 219 Small Business Administr a tion (revolvin g fund>- - -----­ 112 Vetcrans' Administration (veterans' direct loan program) -- --- ____ --- - --- ________________________________ _ 44

Tot a l undisbursed commitments to make future loans. _ _ ___________ _. ______ ---------- ____ --- - -----_ 6, 667 -- - - ---- -- Hou s in g and Home Finance A g ency:

Federal National Mortgage Assoriation:

Second!U'Y market operatlons .• ~---------------­ 126 ---------- Special assistance functions.----- -- -- - -------~-- 418 ----- - ---- Total commitments to purchase mortgages ___ _ 544 ---- - ----- Farmers' Home Administration:

Farm tenant mortgage insurance fund __ _ __ _ ___ _ 6 --- -- - ---- F e deral Maritime Board and Maritime Adminis­

Federal ship mortg a g e insurance revolving fund. 110

Housing and Home Finan ce Agency:

Federal Housing Administration . ..• ----"----------­ 6, 077 Defense Production Act of 1950 , as amended.----------- 35

Total commitments to guarantee and insure loans ____ _ 6, 228 ---------- To purchase investment company debentures: Small Business Administration (revolving fund) _______ _ 38 ------- - -- International Bank for Reconstruction and Develop- _ _ _ _ _ __ _____ ___ ___ ____ - -- --- -- --------- - --- 5, 715 ____ _ ____ _ Inter-American Development Bank_ _ ___ _ ____ _ __________ 370 ----- ---- - Development Association _ _ ______________ _ __ 2_4_7 _--_-_--_ - _-_--_- Total unpaid subscriptions, etc ..• -------- -' -------- --- 6, 332 ------ - - - - s Represents estimated Insurance coverage for the 1961 crop year. ExcludeS political risk export guaranties amounting to $164,000,000. Bank of Washington acts as agent in carrying out this program. de~t secunties amounting to .., $21,235,000,000 that have been deR e serve Bank system with the Federal Reserve agents as figures are subject to the limitations and precautionary remarks, as expl ai n e d in the note attached to this statement.

be authorized immediately, as an emergency of measure, to permit enough new funding to pay current bills. · This wm bring the debt total to the magic line of $300 billion. -

Above this amount, Dillon wm have tougher sailing, and the Congress may give for him only a part of the additional $8 billion total­ he wants. Senator HARRY F. BYRD, Democrat, of Virginia, longtime champion of solhave vent government, has announced that his

Senate Finance Committee will hold hearings on the state of the Government's financial position before voting any further increases. By the time the hearings are concluded, the Senator will have some shockhe ing news to report to the American people.

INTEREST IS $9 BILLION

The annual interest on the national debt is now running above $9 billion, and for the article last several years this carrying · cost, without any payment on, the debt itself, has been taking 11 cents of every dollar . of Federal taxes collected. And the chances that any of this debt will ever be paid off seems less and less as time goes on.

This is quite a contrast with the past. ceiling From the beginning of the Nation in 1789 it until recent years, a major objective of every

President was to pay off the national debt. will lt was done once-by Andrew Jackson in

1834. But each succeeding war built the debt to a new plateau; intervening efforts accomplished reductions but never eliminated the entire amount.

Even so, at the end of fiscal 1916, the debt was oniy a little more than a billion dollars. By the end of World War I, it had soared above $25 billion. From this high point it was reduced in 11 consecutive years, cutting it by more than one-third to $16 billion in 1930.

From there it begin an upward climb, through wartime and peacetime, with the budget in the red 26 years out of 32. The depression years increased the debt regu- · l a rly, and it h a d reached ne a rly $50 billion before the outbreak of World War II. At the close of the war . it was $270 billion. Three subsequent surpluses by Truman and thr e- e more by Eisenhower could not match the costs of the Kore a n w a r an d t h e intervening peacetime deficits. The current year's spending will push the debt to $300 billion, or more, and the end is not in s i ght .

CREDIT CARD GOVERNMENT

Up to now I have been referring only to the int . interest-bearing debt. But this isn't all that we owe as a nation. By a continu· ing policy of national extrav a gance, we have been committing the Government's future resources beyond this to an incredible degree. We have adopted in Washington a program of "credit-card government" that is placing a burden of staggering proportions on our children and grandchildren.

As Director of the Budget, I undertook in 1960 to add up all the liabilities of our Government. Here are some of them. We owe $30 billion in unfunded pensions to retired civilian employees of the Government. We owe almost $40 billion in accrued pensions to retired military servicemen. The total of our present commitments to veterans for future pensions and compensation (not counting many other benefits) is in excess of $300 billion. All of this $370 billion is for past services and in the financial st a tement of a business would be accounted for among liabilities.

Then there are many other present contractual or ' legislated government undertakings that will have to be financed in the future. Taking all of them-housing subsidy contracts, shipping subsidies , the Interstate Highway System, unfinished public works projects, unpaid purchases of military supplies and many others-this group adds up to more than $150 billion in further bills to be met in the coming years.

SOCIAL SECURITY, TOO

Altogether, counting the interest-bearing debt of $300 billion and the other obligations and commitments I have mentioned, we have placed a mortgage of over $800 bil· lion on our national future to be met in taxes. This does not include untold billions of dollars in guarantees by the Government on housing loans and other mortgages, bank deposits and other savings and so on.

Even this is not the full s · story. Under our social security system, we have scheduled a series of benefits that far exceed, in actuarial terms, the resources that would be available at present tax rates. This deficiency, which can only be made up out of future tax increases already provided in the law, is another $250 or $300 billion.

This makes . the total present undertakings of the Government, to · be paid from future taxes, in excess of a trillion dollars. And that is beyond the regular annual costs of defense, welfare and other Government activities.

This is a national debt of more than $22,- 000 for every family of four in the country. Quite a spending spree we've been on for the last 30 years, isn't it?

Mr. ROBERTSON. Mr. President, if only the leaders of our Nation today placed the same premium on economy in Government ~s did Thomas Jefferson, America would not be in such a pre· carious financial position. In 1816 Jefferson said in a letter to William Plumer, then Governor of New Hampshire:

I • • • place economy among the first and most important of republican virtues, and public debt as the greatest of the dangers to be feared.

And in another letter, Jefferson wrote or to Samuel Kercheval, also in 1816:

And to preserve their [the people's] independence, we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude.

In a third letter, this one written to Thomas Cooper, Esq., in 1802, Jefferson said:

If we can prevent the Go v ernment from wasting the labors of the people, under the pretense of taking care of them, they must become happy.

Mr. President, I digress to say that I have given the correct quotations of Mr. Jefferson from the three letters that I have referred to. Several years ago a book entitled "Law and the Profits" was published by T. N. Parkinson, an English economist. He included all quotations in one and thereby misquoted Jefferson. That quotation was reprinted by the Reader's Digest, which, of course, has world circulation. The words of Jefferson have also been used several times in that garbled form on the floor of Congress. Consequently, in order to keep the record straight, I have repeated Jefferson's words as they were originally written. I hope those who have cited these remarks of Jefferson will take due notice thereof.

Mr. President, the words of Jefferson still ring true. There is, furthermore, a direct relation between the excessive spending by Government, of which Jefferson warned, and the extension of the franchise to an irresponsible electorate.

As I shall show later, voting is a privilege, not a right. It is a privilege which should not be dispensed lightly. By this, I mean that there must be qualifications for voting which will assure a responsible electorate. Throughout the 50 States there are various combinations of requirements related to residence, literacy, payment of poll taxes, conviction of criminal offenses, and so forth, which assure each sovereign State, to its own satisfaction, that the privilege of voting will not be extended to the irresponsible. Most of this discussion with respect to the requirements of voters has naturally related to the qualifications of voters for statewide elections, including Federal elections. But it is interesting to note that some States have found it ' advisable to limit voters at certain special elections and to impose property and other qualifications for such voters. For instance, in section 2012 of the New York education law-and, Mr. President, Iregret that the distinguished Senator from New York [Mr. Javits] is not here, in order that he may assure the Senate that I am correctly quoting the law of his · State-m-ere qualification as a voter in .statewide elections is not enough. In New York, one who · wishes to vote for the election of school district officers and such other matters as school taxes and school bond issues must also show one of the following three qualifications: -