The turning point for President Carter's energy program came with a little lecture from Sen. Spark Matsunaga (D-Hawaii) about the macadamia nut.
While reporters fiddles with their pencils, momentarily unaware of the significance of it all, Matsunaga regaled the Senate Finance Committee the other day with an account of the stunning growth of the macadamia nut industry in Hawaii. The secret of succes, he said, was the piling up of special tax incentives by the state legislature to spur nut production. Now, the macadamia nut is worth $20 million a year to Hawaii's economy.
Matsunaga proposed tackling the energy crisis in the same way. Forget about the onerous taxes that President Carter advocated and that the House has adopted largely intact. Matsunaga contended that the President's ambitious goals (such as slashing oil imports and switching to other sources of energy) could still be achieved by 1985 with a potpouri of tax credits, incentives, moratoriums and what have you.
The Senate Finance Committee swiftly approved the proposition by a vote of 9 to 3. As a result, the austere program that Carter proclaimed last spring as the "moral equivalent of war" is about to be transformed - for the moment at least - into a gigantic Christmas tree full of baubles of "incentive."
"I envision a bill going to the floor with literally billions of dollars in tax incentives," Chairman Russell B. Long(D-La.) told reporters after Friday's session. Even if it comes back again froma House-Senate conference with some of those distasteful taxes in it, the senior from the oil-producing state of Louisiana will do his best to see that it retains plenty of those "incentives," too.
"Hopefully we can make them [the Senate] a proposition they can't refuse," Long said with an anticipatory grin.
At the resumption of the committee's markup sessions Wednesday after the Senate had voted to deregulate natural gas, the big question was where to pick up the pieces. Having cannibalized Carter's energy tax program, the committee began, at Long's urging, to look for enough bones from which to fashion a presentable skeleton.
Long said all he wanted was a bill that he could take to conference with the House.
The House Ways and Means Committee, where the process begins, is like an oriental bazaar, but is has some semblance of order, a lingering addiction to parliamentary procedure. The markups of the Senate Finance Committee are much more antic gatherings, full of colorful exuberance and bizarree twists and turns.
Long, for example, opened up the Wednesday markup session by proposing that his committee designate how the money could be spent from taxes it had already rejected.
This piece of legislative gamesmanship was aimed at the impending House-Senate conference on the energy bill. In the event that a House-passed tax measure, such as the well-head tax, should prevail in conference, the Long strategem would give the Senate conferees a say in how the proceeds would be spent. Otherwise the House-adopted formula would be the only one upon which the conferees could act.
Brushing aside, the tactical intent of Long's proposal, Sen. Robert Park-wood (R-Ore.) protested to the chairman: "I don't want a program looking for a tax."
The session broke up because, as Long confessed, "We are so far apart on what we want to do."
The next day, after a huddle with fellow Democrats, Long presided over the committee's rejection of Carter's last big tax proposal - the "user's tax" on industrial use of oil and gas. Then the irrepressible chairman began trying to collect some residual benefits such as tax credits for homeowners who insulate their residences, for a bare-bones bill.
Packwood wanted more susbtance. He complained that Carter's own legislative proposals, even before they were somewhat diluted by the House, would still fall short of the energy-saving goals the President had set.
"The President called it the 'moral equivalent of war'; the acronymn for that is MEOW." Packwood said, borrowing a line from New York Times columnist Russell Baker. The Oregon Republican said he wanted more than a meow, but he didn't want to bother drafting any particular proposals unless the committee was first willing to commit itself to the long-range goals of the Carter program.
Long was wary. He called to mind a story his father, Huey, once told about a man on his deathbed who dictated this inscription for his tombstone:
Remember, man, as you pass by,
That as you are, so once was I,
As I am, so will you be,
Prepared for death and follow me.
When the tombstone was ready, the man's wife went down to look at it, but told the stonecutter she wanted to think about what it said. She came back the next morning, Long chortled, and asked for the addition of just two more lines:
To follow you, I'm not content.
Until I know which way you went!
The debate continued inconciusively until Matsunaga spoke up to emphasize the power of positive thinking and the parable of the macadamia nut. His motion calling for a bill with enough tax breaks in it to meet the President's goals was promptly adopted.
Sitting at the witness table, Assistant Secretary of the Treasury Laurence N. Woodworth seemed to shudder. As he understood it, he told the senator, they had just decreed that the nation should solve the energy crisis with legislation consisting of "nothing but tax reductions."
"I think you have, in effect creased the [federal] deficit several times over," he warned. "I really don't believe it is possible to come back without very substantial revenue losses."
No one disagreed with him. And no one was deterred. The committee began dressing up the bill. The trimming included a $3-a-barrel tax credit for production of shale oil at the behest of Sen. Herman E. Talmadge (D-Ga.): a 10 per cent credit for hydro-electric generating equipment at the suggestion of Sen. William D. Hathaway (D-Maine), and a special tax credit clause to cover the product of a Connecticut thermostat manufacturer who had contacted Sen. Abraham A. Ribicoff (D-Conn.).
The parade had started. The next morning, Long told the committee's staff lawyers to keep it up by collecting all the tax credits and incentives any member wanted to offer and to put them in legislative shape over the weekend. Voting is scheduled to start Tuesday.
For his part. Long is plumping for a $100 billion energy development corporation to help private industry with big energy projects that the companies consider too risky or expensive for their own money. The House shot it down as a handout for business when Nelson Rockfeller first proposed it as Vice-President, but Long likes the idea.
By the time an energy bill moves out of Long's committee, he told reporters, "it might not be that bare a skeleton." In fact, he said it may take the committee a week or two "to add such morsels as they want to add."
Long added that he is not at all concerned about the likelihood stiff opposition from the House. Right now he isn't even thinking about that.
"I never did open my packages before Christmas anyway." exclaimed the chairman of Senate Finance.