Master Bennet Pres IBA b

but let me turn not so much to a rehash of the farm bill which I suspect you've dealt with piece by piece and over and over again but let me talk to you just for a moment about what I consider the great crisis in agriculture today and that's the crisis of adequate credit at reasonable rates the interest rates alone are driving twenty five thousand full-time farmers out of business each year just the weight of the interest rate alone they're forcing another seventy-five thousand farmers to turn to other primary sources of income and get a job off the farm while continuing to try to keep their farming operation intact that's 100,000 farmers every year seriously and adversely affected by the cost of money the interest cost in agriculture have doubled in the last four years the interest on a forty five thousand does take for example a $45,000 PCA loan at 15 percent amounts to six thousand seven hundred and fifty dollars per year and I don't have to tell you you have to sell a fair amount of corn or beans or whatever to make up six thousand seven hundred fifty dollars and that's not to retire the note that's just to pay the interest on it when you add the higher end interest rates to the crop production and to the extraordinarily inadequate price structure that we're now seeing you begin to get the notion of why farmers are going bankrupt and what the real cause of it is farmers are having an increasingly difficult time finding the cash flow to meet their own financial needs and obligations on a year-by-year basis a good many farmers as you know borrowed money to buy land in the past which was appreciating its peak in 1980 as it begins to back off the liquidity problems for a number of farmers in that particular position are critical and we'll continue to be critical and unless we can get this thing turned around we're going to see some very difficult times as I spoke to another national farm organization the corn growers the summer I say it of all the times that I farmed which was for many many years this is the year I would like least to have a substantial debt hanging over my head in terms of land not paid for or combines on credit a good many farmers are faced with that right now and I want to talk about it because I don't think farmers are talking enough about it now normally you guys come to lobby us today the shoe is on the other foot Devon I'm here to lobby you I'm here to lobby you to start raising your voices as articulately and as forcefully and as repeatedly as you can possibly do to argue the case that we must reverse the Reagan economic program make adjustments to it or we're going to see tens of thousands of farmers going bankrupt on interest rates alone in the next 36 months now what is behind the interest rates well I finally took it upon myself I didn't even think I'd get the appointment I took it upon myself to try to grow over to the Federal Reserve Board with an appointment with mr. Volker and tried to explain that these numbers and percentages and all of the cumulative index of the economy had real live people on the other end and I spoke to the problem of farmers in my congressional district as they faced the credit crunch in competing with the federal government in borrowing money in competing with other segments of the private industry industry in borrowing money well I do not agree at all with the feds high interest rate policies I have serious problems with the tight money policy given the fact that we're now proceeding toward an unconsciously high deficit on the part of the federal government and I do not agree with that but I certainly do agree with the Fed Chairman on one point and that is that the federal government is one of the chief contributors to the credit crisis and the crunch that we're all faced with for as you look at the numbers it is depressing indeed to discover that 40 percent of the available credit in the country this year will be absorbed by the federal government we are facing a record deficit under this administration and it really is ironic I know some of you guys belong to both parties but it is really ironic to look at an administration which came to power on the theme that the federal government was spending too much money and therefore running up too much of a deficit to be now in the posture of seeing come to pass within the first year of that administration an unprecedented amount of deficit we are now faced with a 100 billion dollar deficit this year in 1982 in fiscal 1982 I've said for six months we were faced with an 80 billion dollar deficit now with the beginning of the sagging of the economy and the loss of revenues as a result of that in the recession that we're moving into it looks very much like a hundred billion or more now the highest previous deficit ever run up by the federal government was sixty billion dollars in 1976 we stand the possibility we stand to see the possibility of twice that amount of deficit in this year a projected deficit of one hundred and twenty five billion dollars in the next fiscal year and a deficit beyond that of a hundred and forty five two hundred and sixty billion dollars in fiscal 1984 now the reason is not contrary to what you may see on television the reason is not that we are not cutting spending enough in my congressional office in Lafayette we have applications for Farm Home Administration loans stacked people who want help with the Farm Home Administration loan for this that or the other function of farming stacked on the desk and their qualified borrowers and farm loan administration says we simply don't have the money they have been cut like all others have been cut not all others not all others and I want to come to that in a moment for there are segments of the economy which have remained untouched and it's unfair it is the unfairness of the system that bothers me most it is the unfairness of what the ingredients of the tax bill is of course I'm happy that my efforts over the last six years on the estate tax were ultimately taken care of in this bill and there's some other things in the bill the adjustment of some of the brackets and so forth which we can all applaud but no one can applaud the majority part of that bill we have simply given away the store in the tax bill to the vested interests of the United States and that is where the problem is coming and there's no way that you can cut on the cut side of the budget and get there it's strikingly as it may seem to you if you took the if you took the entitlement section of the budget which is roughly one-half and you said you can't change Social Security and you shouldn't start cutting that and you can't change some of the entitlements and it's going to be difficult to do and then just looked at the other half of the budget wheel and said what is there well obviously you're going to have to service the national debt or lose the Good Faith and Credit of the United States so that's not one you can quarrel with try to get the interest rates down so you don't have such a service cost on the debt we're already committed to an increased spending in terms of defense and so that one is not we may cut off a couple of billion or something but that one's not the problem if you take all of the rest of the spending you have ninety seven point five billion dollars left in all the programs of the federal government and we're faced with the deficit greater than that so my friends if you cut all of the federal programs to zero zero dollars you just phase it out Farm Home administration everything else if you cut all of those programs to zero you would not balance the budget you cannot balance the budget then simply buy it some additional cuts yes I can point out some places for some additional cuts I've argued the case for some of the boondoggles and the water projects and the Tennessee Tombigbee and a number of those Untouchables that ought to be touched and you're going to you could pick up a few billion dollars there and we should and maybe there's some other places to cut and I'm not opposed to cutting but that will not get the answer when you look at the numbers the numbers go something like this in the single tax bill while we were going to cut budgets over the next three years of a hundred and thirty billion dollars now that's what's in there over the 3-year cut three years of cuts 130 billion dollars the tax bill alone just in the tax reduction of revenues is 750 billion dollars in the next five years now there's no way there's no way of matching those numbers up you know a long time ago when I was a little kid my father who was a carpenter and a stonemason gave me a little kind of a present and it was for for people to get some I guess because it's little shapes and blocks and holes and so on I do not remember this but I remember him telling me about it for years afterward that one day I was sitting there and I had this little square object and I was trying to fit it in to one of the little round holes in the little in the little gizmo that was setting out on the rug and I couldn't get it in so he told me and I picked up something else and I was hammering and pounding as little kids are want to do and he reminded me periodically for years thereafter that you can't pound a square peg into a round hole now this administration in this budget and in this tax bill is trying to pound a square peg into a round hole and it will not get there when you say you cannot afford a farm program at the same time that you say that the most prosperous industry in the country the oil industry should have in that tax bill a grant of a reduction of their profit of the windfall profits tax by nearly twelve billion dollars at a time when you couldn't think of coming up with another billion dollars for the turtle farm program something is wrong go on over to that go from that to those industries which under the leasing of tax credits are going to garner in this fiscal year alone twenty nine billion dollars I'm sorry in the three year life of this particular tax bill twenty nine billion dollars that's wrong yes we need incentives taxes yes we need profit and productivity incentives built into it yes we need to give industry a faster write-off for modernizing industry and creating jobs and creating tax base and doing what they have to do environmentally we need those things but you do not need the rest and it's at that point where I part ways with this administration on the tax bill you do not need to give to the computer chip industry the hottest item in the market today you don't need to give them and across-the-board corporate income tax cut not at a time when we are in the kind of credit crunch that this country faces when decent hard-working people out on the farms and in the small businesses and in the individual families of this country are trying very very hard to figure out a way to make ends meet and they look at 18 percent money and they conclude there is no way well there is no way the point is this we must if we really care about the economy of this country we must have your help and your help ought to come along this line you ought to go to your Senators and you want to go to your Congressman Republican or Democrat and you ought to say enough is enough you cannot give away two billion dollars in tax revenue and expect to do anything with regard to farm program you expect to do anything with regard to getting the federal government out away from the borrowing window let me tell you when individual farmer X goes to that borrowing window and the federal government is there I don't have to tell you who has precedence the federal government will have precedence over you every time the federal government is the preferred customer at the borrowing window and we we must I think begin that alteration and that's where you can help most I think we ought to go back into that tax bill and we ought to say if we do not have the boats and if we do not have the power and maybe we don't against the oil interests and the major corporate interests of the country we may not have the power to do this to repeal it it ought to be repealed outright it never should have been enacted but at the very least what we ought to opt for to get to get over the crunch that we're in right now is a program whereby we defer those tax breaks for a year defer them for a year maybe then people would begin to get the notion that we ought to defer them for two years and then five years and then finally somewhere along the line eliminate them all together as unnecessary and undesirable for that's where it is and I think if we're going to begin to remove the government and shove it aside from the credit window so that farmers are not going to be faced and I'll come to what I project on interest rates in a moment farmers are not going to be faced with having to compete with the federal government for credit then we're going to have to go back and look at that tax bill and look at some of the awful provisions that are in it and at least get a deferral on them if we're going to begin to write the balance which I think is absolutely essential let me then say that right now I recognize interest rates are dropping a bit in fact they've dropped a lot and I'm all for that we have a long way to go before they become such a rate that you can actually afford really objectively afford to get involved in borrowing as a farmer but the drop in interest rates accompanied as they are or accompanying as they do the the severity of the beginning of the recession in my view will last for about six months maybe eight or maybe nine and then when the economy begins to revive and heaven help us if it does not begin to revive and it starts to swing back up and business begins to regain some confidence an industry begins to do some expansion they're going to be right back at the credit window with you the farmer and with the federal government and we will be back at the same place that we were two months ago or three months ago when interest rates were driven to unpress unprecedented heights and sustained at eighteen to twenty percent interest over a period of time in fact as I was telling a farmer friend of mine up in the district the other day if I had to do any borrowing I think I'd probably try to do it in the next four or five months to lock in some interest rates on the loan that are a little less than they're likely to be next summer I really believe that I believe it's going to happen because the numbers are there the numbers are there the budget is there and we've given away the revenues and there's no way that you can keep the federal government from borrowing and so when that borrowing is superimposed over a program of tight money and that's where the Federal Reserve Board is is in a tight money program now when that borrowing and other borrowings come together at that point and are imposed upon a policy of tight money supply which is the kernel of Volkers campaign against inflation when you arrive at that point there's only one place for interest rates to go and that's back up again now they're not low enough now by several percentage points they're not low enough now I believe that we cannot expect to run this economy of this cover of this country on 15 to 20 percent interest rate money I just don't think it can happen over a long period of time and I could I could share with you some other people who are in trouble not just farmers I could share with you kinds of businesses in this that are going bankrupt and they're going bankrupt on a regular basis in an accelerating basis they talked to a lawyer friend the other day and I was not around trying to stir up some interest in my campaign and he said he had I said how how are you doing they keeping you busy or some such opening crack and he said yes and I said what kind of law do you specialize in he said chapter 11 chapter 11 reorganization z' is what I specialize in he said I have never been so busy in my entire lifetime as a lawyer as I am right now in trying to figure out for my clients how to reorganize under bankruptcy or near bankruptcy it is a serious matter my friends you will do yourself a favor you will do those of us in Congress who have been waging this battle a favor but more than that you will do your country a favor by beginning to make your voice heard and insist that your senator and your congressman hear you out and insist that they not slip off the end by arguing well it was all rolled together in one big tax bill and I couldn't do anything about it in fact that tax bill was so bad that it should have been rejected by a majority vote of both parties in the house and both parties in the Senate and that is not an acceptable answer when the bill is that bad when we are in when we're insisting on essentially morgan e mortgaging the economy of the government the united states in that kind of tax bill i would urge you for your own sake and for the sake of the government in the in the congress and for the sake of the american people - ray - raise your voices individually and collectively and as an organization and insist that this administration and this Congress go back in sometime prior to next summer go back into that tax bill and take a long hard look at what it is that we ought to eliminate or defer because if we can do that and if we can begin to show by doing that that combined with the cuts were already making that going to begin to remove the government from the credit window then you're going to see interest rates come down and I believe if you're talking about a kind of a permanent arrangement I believe you will not see interest rates come down one day ahead of that with the exception of this anomaly that we have right now which is the recession that we're going into well mr. president I've been a little too long I just happened to feel very strongly about this I appreciate you inviting me here I should have started out of course with the traditional welcome to the Hoosier State and welcome to Indiana but didn't you have somebody do that earlier today I I trust you had the mayor and the governor and various and sundry other people welcome you to Indiana I just came here to talk cold hard economic facts and I would urge you to go home and give some thought about that because I think it's serious thank you very much