land R. Hughes. This approach would have continuedthe use of a number of separate appropriations bills.None of the individual bills would be sent to the Presi-dent for his signature until work was completed anevery bill. Then all would be combined into a singlebill, which both appropriations committees and bot hfull houses would have an opportunity to re-examine .They would be able to view each spending program inthe light of all others and in relation to latest revenu eestimates. and to make other changes as might sxm t obe called for (such as to bring the budget into aalance) .This final bill. embodying all regular appropriationsactions for the year in question, would be sent to th ePresiden L

Until the House changes its attitude. nothing is likelyto happen in regard to use of an omnibus bill . Since theHouse originates appropriations bills, it can in effectforce the Senate to follow whatever method the Hous edesires concerning the organization of such bills_ If itwishes to use the combined bill (as it did in I950) i tcan do so without specific legislation . In contrast, no-thing which the Senate wishes to do can of-itself haveany control over the House? '

ARGUMENTS FOR THE OmmaIs BILL . Several ratherforceful arguments have been advanced on behalf of theomnibus bill.

? Its use would result in the discovery and eliminationof conflicts and duplications in appropriations re-quests. With a combined bill, it is asserteti, logrollin gwould be made more difficult, since all the cardswould be placed on the table and attempted tradingof votes between congressmen on particular itemscould easily be recognized. It is also held that theauthorization of all appropriations at ene time woul dreduce the chances of deficits .

3 . A combined bill could be devised, along the linesof the Byrd-Williams proposal, to do more thanbring all appropriations together for consideration i none place. Such a bill could include authorizatio nactions and do what neither the legislative budgetnor the 1950 omnibus appropriations bill was abl eto do, namely, regulate actual expenditures for a give nyear, e .g., within the limits set by estimated revenues.

vidual budget authorizations would be held up unti lwork on all spending arras visas completed . Yet thereis no way in which all difficulties can be avoided fo rboth executive and legislative branchrs, and the

--value of additional control over expenditure which a,combined bill could make possible is held to out -weigh possible added problems -for the executivebranch .

5 .= Its use would permit Congress to resist more effec-tively the proposals of agencies and the claims ofpressure groups for increased expenditure . Rcp-resentative Cannon has held that the omnibus ap-proach concentrates spending action in one place .f-vuses public attention on the operation, andthereby strengthens the forces of economy .

6. During the single year in which the omnibus ap-propriations bill was in effect, Congress reducedappropriations 4.6 percent below budget requests .This compared with a 3.0 percent reduction theyear before, and a 2.8 percent cutback the yea rafter, both years in which appropriations weremade by the traditional method of separate bills

7. A combined bill would reduce the number o fdeficiency and supplemental appropriations bills. I tis charged that the use of separate tills results in alack of over-all control and thereby encouragespresentation of these additional requests for funds .

An omnibus bill, it is said, would permit all appro-priations to be voted befa~e the end of the focalyear, obviating the need for continuing resolutions,and permitting earlier adjournment . In 1950 whenthe omnibus bill was used, action on appropriationswas completed two months earlier than was the cas ethe year before, when separate bills were employed .

9. It is recognized that some legislators would attemptto use an omnibus bill as a vehicle for puttingthrough a variety of extraneous and pork-barrelproposals on the assumption that, since the Presi-dent could not veto single items in an appropria-tions bill, he would let the combined bill go throug hrather than hold up the entire supply of funds forhis administration . However, the proper remedy, i tis argued, is for Congress to enforce its own rule sagainst legislative riders .

ARGUMENTS AGAINST T6 :7 OMNIBUS BILL . Thos ewho oppose the omnibus bill have presented an arrayof arguments against its use, some denying the ad -vantages claimed for it by its advocates .

1_ It would permit the :wo appropriations committees toview simultancensly d.21 regular appropriations ac-tions taken in any Congress' .:• nal session . Lawmakers

8 .would take action only after c : •Wining each appro-

-priation request in the light of all otihcs proposal s

for competing and complementing operations .

4. An omnibus bill would permit the handling of indi-

1 . An omnibus appropriations bill would not neces -

vidual agency requests in a more intelligent manner

sarily concentrate in one place all of the appropria -

and the carrying out of reductions in a more orderly

tions actions which Congress takes in any session .

and less haphazard way. Admittedly the use of a

Supplemental and deficiency appropriations bill s

combined bill would create some inconvenience for

seem to be inevitable . In addition, the large size an d_, .

executive agencies in program planning, .since indi-

the technically complex nature of defcnsc . spending

=+ Burkhead, op. cit., p. 331 .

224 Nclson, ca. cit., p . 282.

33

might necessitate at least two appropriations bills —one for defense and the other for nondefense.

The omnibus appropriations bill used in 1950 didnot set any over-all limits to appropriations, norslid it provide an over-all picture of both proposed -approprratiom and estimated revenues . Moreover, .it could not regulate the actual flow of expenditure sfor any given fiscal year since appropriations arenot the same as expenditures.

An omnibus bill would not give executive agenciesadequate time to plan their programs for the up .coming fiscal year in the light of knowledge o ftheir forthcomi :l_ budgets. Under the system ofseparate bills- funds for certain departments arenormally votcu enrly in the session. With a com-bined bill, all expenditure authorization would beheld up until work was completed on all items .

If the general expenditure authorization type billwere to be used (setting limits to actual expenditure

-for any given fiscal year), it would seriously in-terfere with the discretion of the executive branchoveritsunder authority granted in earlieryears for such long-term programs as-defense pro-curement.

`During the one year of trial use of the omnibu sbill caused protracted delays in the appropriation sprocess. Yet in haste to complete work on thehuge measure. Congress rushed through appro-priations actions at the last minute without giv-ing due attention to each item. When the 1950omnibus - bill came before the full membership ofthe House Appropriations Committee, only about10 minutes were allowed for discussion of each sec-tion . Probably never before in Congressional his-tory had so few members familiarized themselveswith so monumental a measure .

Use of the omnibus bill also left the full mem-bership of the House and Senate insufficien ttime to examine the contents when ;he bill wasfinally reported out of committee. When separatebills are used, they are reported out one at a time;the full membership is not required io pass on th eentire appropriations action at any one time . Whena combined bill is used, all the spending requests ,it is said, are likely to be held up until the lastminute, at which time they "descend in an aval-anche," overwhelming the membership with th esheer mass of detailed matters to be considere d(and approved) in a short space of time:

When the combined appropriations bill for fisca l1951 finally became law on September 6, 1950 ,nine weeks had elapsed since the beginning of th enew fiscal year. Three "continuing resolutions" ha d

26 Wallace, op. cit ., p. 135 .Phillips, op. cit., p . 257.

to be enacted in order to providetinuing government operations:s

Opponents admit that the use of the omnibus bil lin 1950 resulted in a reduction in appropriation sas compared with the year before and the yea rafter. They believe that this result came abou tbecause supporters of the omnibus bill made aspecial effort to hold down expenditures, to "siton the lid," in order to establish a favorablerecord which would save-as an argument for reten-tion of the method .%

An omnibus bill, by its sheer size, is said by itsopponents to have greater pork-barrel potentialitythan do individual bills . The larger the bill, theless the possibilities for close examination of it scomponent parts, they hold, and the greater theinducement for supporters of pet- :, sanding projectsto seek to add special riders?,

8. In response to claims that the use of an omnibu sbill will increase Congressional control of expendi-lures, opponents answer that the combined bil lactually weakened Congress anal influenc .- and con-centrated an undue amount of power in the handsof the Chief Executive . In 1950 Congress becameso entangled in the complexities of hand►ing th eomnibus bill that the usual practice of appling al lcuts to specific programs and particular items wasnot performed. Instead, in its haste to completework, Congress issued a directive to Presiden tTruman to reduce the spending total by $550million, leaving to his discretion the choice of wher eto make reductions . This action in effect gave thePresident an "item veto" over specific appropria-tions, but with the added characteristic that this wa sa veto which Congress could not override? 11 Oneobserver has said :

"Any President of the United States who wantedto achieve dictatorial control over Congress couldask for little more tha.= the restoration of the pack-age budget and the int-Atable move to amend i tevery year by directing him to make a cut of agiven size in any manner he chooses .. "32

9. Finally, it is held that use of the omnibus bill couldentail serious disruption of the entire financial oper-ation of the national government in the event tha tthe President were to veto the bill . Thus, in con-nection with actual introduction of the omnni;!os bil lprocedure, the-then Budget Bureau Director, Fed -crick J . Lawton, insisted that if this approach wer eto be used, the President would have to be given th e"item veto" power, as a protectio p against legisla-

Ibid., p. 260 .20 Nelson, op, cit., p . 283 .31 Phillips, op . cit ., p. 262; Nelson, op. cit ., p. 283 .a► Phillips, op. cit., p. 260.32 Ibid., p. 261 .

tine riders . Similar views were expressed by his suc-cessor, Frank Pace-33 -

-

SUMMARY- The omnibus bill of 1950 represented asignificant departure from traditional methods in a nattempt to find an answer to the perennial problem o f

_ C. expenditure control . The one-year experiment does notappear to have furnished conclusive evidence as to the

advantages and disadvantages . Another trial wouldseem reasonable. The problems, and some must be ex-pected after the best of effort to meet them, would, o nbalance, pro4ably not be so serious as to outweigh thepotentiai advantages. In any event, it is unlikely thatthe legislative branch will be able to develop any fullyeffective expenditure control so long as appropriations

-,are handled in the -present piece-meal fashion .

C. ITEM VETO

The Constitution does not authorize the Presidentto veto individual items in appropriations bills . Hemust either approve or disapprove such bills in thei rentirety. Advocates of economy in government hav esometimes recommended that the President be grantedthe item veto power, and proponents of the omnibu sappropriations bill r-nerally have held that this metho dwould be unworkable otr~*rwise? =

Support for the item veto, however, has by n omeans been posited on the assumption that a com-bined appropriations bill would be used- In his budgetmessage of January 1959, President Eisenhower said :

"The item veto is another important and needed re -form regardless of whether appropriations are made ina number of bills or in a consolidated bill. (Italicsadded.) In either case, the necessity of accepting o rrejecting a bill in its entirety prevents the Presiden tfrom considering separable provisions on their ownmerits. '

Well over 100 proposals for granting the Presiden tthis power have been introduced in Congress since1873. Presidents Grant, Hayes, Arthur, Franklin D _

_Roosevelt, Truman, and Eisenhower have specificall yrequested this authority. Governors of 42 of the 50states are permitted an item veto, every state admitte dto the Union since the Civil War, except Nevada, grantssome form of item veto to its Chief Executive . Wherethe item veto has been used on the state level, it ha sbeen employed frequently to weed out wasteful ex-penditures .

Bills providing an item veto have been introducedin Congress in recent years by members of both parties .Sponsors have comprised a cross-section of all shades.of political opinion . In 1963 item veto bills were intro-duced by Reps . James G . Fulton of Pennsylvania, an dMorris K . Udall of Arizona . Representative Fulton'smeasure proposed that the Constitution be amende dto provide specifically for an item veto power for thePresident. Congress, however, has consistently refuse d

as Nelson, op. cit., pp . 276-277 .a + Committee for Economic Development, Control of FederalGovernment Expenditures, A Statement on National Policy bythe Research and Policy Committee . New York, 1955, p . 18.are Financial Management in the Federal Goverment, op. cit.,p. 240. -

to strengthen the President 's hand in this manner. Ofall the bills introduced for granting the item veto, onhone has ever come up for a vote in either house -

Proponents of the item veto claim that such adde dpower for the executive would:

I_ Reduce extravagance in public expenditures.

2. Discourage "port:-barrel" appropriations .

3. Curb logrolling .

4. Restore to the President his veto power in regar dto substantive legislation. At present "legislativeriders" art often attached to appropriations bills -Unless the Chief Executive is prepared to hold upall funds provided in a bill, he is in effect com-pelled to allow these legislative proposals to beenacted into law.

5. Expedite completion of the appropriations processwhen there is a veto by requiring Congressional re-view of vetoed items only, rather than bills vetoe din entirety?"

Opponents charge that introduction of t',c item vetowould bring about a further shift in power fromthe legislative branch to the President. It is felt thatwith such added authority the President would havefar-reaching power to reward or punish individua lmembers of Congress by vetoing those particularitems in appropriations bills which pertain to outlaysin their districts . Such expenditures could then beapproved only if supported by a two-thirds vote i nboth houses of Congress . Consequently legislatorswould be loath to incur the dislike of the President byopposing any important part of his program . As onerepresentative commented :

"If we had a President who is politically minded an dhe has the item veto, just imagine what he could do t ohis friends to help them and just imagine what hecould do to hurt his enemies . That is more power thana good man should want or a bad man should have."3 1(Italics added. )$1i Wallace, op. cit., pp. 137-138 .ar Statement by Congressman Jensen of Iowa in hearings on th ebudget for 1961 before the Committee on Appropriations, Hous eof Representatives, 86th Congress, 2nd Session, Washington ,D. C ., 1960, p. 83.

35

C,

The item veto could also lead to some abuse in adifferent direction. Individual Congressmen, faced wit hpressure from their constituents to obtain funds for pe tprojects, might get such measures included in ap-propriations bills, believing that the President, by the

use of his hein veto, would subsequently remove them .But he might not. Anything which decreases fiscaldiscipline, or increases "legislative legerdemain," tendsfurther to muddy the already murky waters of spendingcontrol.

D. SEPARATION OF APPROPRIATIONS AND SUBSTANTIVE LEGISLATIO N

_ Another aspect of the Federal expenditure proces swhich has come in for serious criticism is the lack- o fcoordination between appropriations acts which provid efunds for government programs and the substantive leg-islation which authorizes the existence of these pro -grains- Before 1921 legislative committees exercisedjurisdiction over important areas of appropriation sHowever, the 1921 act, at least on parr, provided fo ra clear-cut separation of function between the legisla-tive and appropriations operations .

Appropriations committees. as noted earlier, areauthorized to vote funds for particular programs onl yafter they have been authorized by substantive legis-lation_ In some cases the statutes establishing the pro -grams provide the necessary authorization . But certai nprograms. examples of which appear below, must b eapproved by the: legislative committees on an annua l

;basis tKforc the appropriations committees may vote anyi ' funds to implement them.

Although Congress may at times suspend its ow nrules and attach so-called "legislative riders " to appro-priations bills,"' authorizatior. and appropriation mustusually be enacted separately . Yet despite an apparentlyneat theoretical separation between the legislating an dappropriating functions. there is in practice a considera-ble area of overlap . -1-his cat) lead to confusion and du-plication of effort between the legislative and appropria-tions committees. Embarrasing conflicts between thei rrespective objectives will sometimes arisi .

In some cases legislation authorizing programs canprovide for a method of financing which does not com ebefore the appropriations committees for review . L.egis --lation which stipulates that operations are to be financedthrough one or the other c,f the "backdoor financing"m:thods (see page 29) in effect preempts the jurisdic-tion of the appropriations committees .

Legislative authorization of what in essence amountsto advance commitments of "appropriations actions "has been widely criticized . Commitments to spen dmoney, it is argued, should not be made until the ap-propriations committees have had the opportunity toview all spending proposals in relation to each othe rand weigh them against revenues and the goals of publi cpolicy.

Such spending programs as public works, spaceactivities, procurement for the Defense Department ,

M Wallace. op . cit ., p. 10. -an Ibid., p. 4.

36

military construction, and parts of the foreign aidprogram require annual authorization by legislative com-mittees and both houses before the appropriations com -

= mittees may approve funds. There is a dilemma . Theprograms authorized each year by substantive legisla-lion may require specific amounts for designated ob-jects in particular fiscal years . The program objectivesmay be so precisely defined that they can be attainedonly if funds of a given amount are provided. If thelegislative committees do not consider specific amount sto be spent, they cannot effectively delimit the natur etint x-ope -of the activities which they authorize . Yetas they do become involved with program costs . they

-will inevitably transgress on the functions of the ap-propriations committees.

Actions by legislative committees may have th esame effect as if they were taken by appropriation scommittees. A legislative committee may refuse t oauthorize an agency to undertake a new program, th ecost of which is stated in exact amounts in the agenc ybudget proposal_ In 1963, for example, final actio nby a compromise committee made up of members o fthe House and Senate Science and Astronautics Com-mittees resulted in disapproval of programs involvinga total of S362 million contained in the President'sbudget requests for the National Aeronautics an dSpace Administration for 1964. The reduced programauthorization automatically set a lower ceiling on th eamount of new spending authority which the appropri-ations committees could subsequently approve . - fheresult, therefore, was the same as if the appropriation scommittees had reduced - the -agency_ budget by $362million .

- In examining the program proposals, appropriation s-committees generally go over much the same groun d

- .- as the legislative committees and may approve a dif-ferent amount of new spending authority from tha trecommended by the legislative committees. Althoughthe appropriations committees arc not normally em -powered to vote funds not authorized by the legislativecommittees, there is often nothing to prevent the ap-propriations committees from reducing or eliminatingbudgetary allocations for the programs which havebeen authorized . Doing so can have the same practica lresult as if the legislative committees refused toauthorize the programs .

Some programs which do not require annua lauthorization by substantive legislation arc governe dby basic statutes which -qrc couched in broad terms .

They do not require that particular operations ofn any predetermined size take place in a given fiscal year .

Appropriations committees are thus free to approv eor disapprove particular spending requests containedin agency budgets without acting in conflict with basicauthorizing legislation_

There are important instances, however, in whic hthe basic legislation in effect predetermines the sub-sequent appropriations. This situation applies in thecase of such continuing programs as veterans' benefits ,agricultural price supports, and the programs of grants-in-aid to the states which are administered by the U.S.Depamnent of Health, Education, and Welfare .

Unless the law establishing one of these program sis e=ither amended or repealed, the appropriations com-mittees find that they have no control over the amount sto be made available . In such cases, where in effect thebasic budgetary decisions have been made in the

c: authorizing legislation, the appropriations committee sfind their rol- reduced to that of examining detail .These committees do not have a legal obligation,strictly speaking, to provide the funds for paymentsunder such programs as obligations accrue. The moralobligation, however, is recognized so that there isnever any attempt to withhold the amounts-voted unde rother laws; l

This automatic provision of funds in totals that ar enot subjected to Lnnual review by the appropriationscommittees has been criticized as among the more im-portant factors limiting effective control of Federa lexpenditures. The author of a leading study of budget-

`, ing believes that this is one of the most serious defects_ in Federal budgetary procedures! = Other observers ,however, question the extent to which this practicerepresents a genuine weakening of control . They pointoui that if there is widespread agreement in Congress

= not only that veterans should receive pensions fo rservice-ccnnected disabilities but also that the pensionsshould be of a particular size, then there is no needfor the appropriations committees to become involvedin determining the merits of providing the necessaryfunds.'' Congress itself passes the substantive legisla-tion setting up the programs and determining th ecircumstances under which Federal funds are to b eexpended for their operation. Thus if Congress andthe President do not wish to see money spent for thes epurposes, or wish to provide smaller amounts, repealor-amendment of the substantive legislation is possible .

The only existing machinery for avoiding potentia lconflicts between authorizing legislation and imple-menting appropriations is the Senate practice of having .the chairmen and ranking members of certain legisla-

"40 Smithies, op. cit ., p . 144 .4t Burkhead, op. cit., pp. 309-310.-P= Smithies, op. cit ., pp . 175-178 .43 Burkhead, op. cit., pp. 310-311 .

tine committees participate in an ex-officio capacityin the work of the appropriations subcommittees . TheHouse has made no similar provision . No member ofthe House Appropriations Committee may serve o nany otl- committee, and member of other comit-tees do not serve, even informally, on the appropria-tions committee. Nevertheless, as stated some year sago :

" . . . the fact that the Congress operates as cohe-sively as it does is a tribute to the influence of leader-ship within the Congress, to the informal coordinationachieved by experienced staffs, and to the unwrittencode of `Congressional courtesy' which demands som edegree of consultation among members of various com-mittees dealing with the same subject :"'

. While there is no noticeable sentiment for returningto the pre-1921 situation of having the same commit-tee, or committees, handle both substantive legislatio nand appropriations, suggestiors have been made fromtime to time to bring about a better working relation-ship. Professor Smithies has suggested that the rulesof the House be amended so as:

1 . to require that reports on legislation authorizingappropriations or expenditures made by legislativecommittees contain comments by the appropria-tioas committee concerning the effects which therecommended programs may have on expenditurecontrol;

`2. to permit the appropriations committee to propos einclusion in appropriations bills of amendments t othose sections of the substantive legislation whichset formulas for- expenditures.

The proposals would effect similar changes betwee nSenate committees, although the procedural arrange-ments would necessarily be somewhat different.15 ' ,

A certain overlap between the legislative and ap-propriating functions appears inevitable . In some casesthe content of substantive legislation will of necessit yhave some effect on the specific size of expenditur eauthorizations. In some cases, where substantive legis-lation requires the almost automatic appropriation eachyear of funds for the operation of more or less perma -!nent programs, the substantive law should probably bere-examined at stated interval; to discover whether con-tinuation is clearly desirable in the light of current an dprospective conditions 46 There should ale;o be thoroughre-examination and probably drastic reduction if notcomplete cessation of the practice by which the legisla-tive committees at times grant agencies authority t outilize backdoor financing and thereby -escape reviewby the appropriations committees . :

44 Smithies, op. cit ., p. 147.45 Smithies, op . cit., p. 176.46 This occurs automatically when the substantive legislation set sa definite time limit for duration of at program .

\'

37

71

L SEPARATION OF APPROPRIATIONS AND REVENUE-RAISING FUNCTION S

"We believe the Congress should begin . . . to faceup to the tax implications of its expenditure decisions.

- If it refuses to economize in places where economy i scalled for, it should be prepared to increase taxes.It should make a careful evaluation of the revenu eestimates in the light of the data obtained after thebudget was submitted and keep a close account of it s

- actions on the President's budget requests as eachappropriation bill is completed""i

The 1921 Budget and Accounting Act did not rc-quire that Congress, in approving spending authority,consider the relationship between total appropriation sand estimated revenues. The two aspects of financeare handled by separate committees in each house . Nomember of the Appropriations Committee of the Hous emay serve on the revenuc-raising Committee on Waysand Means in any regular or ex-officio capacity ± '

. There is no formal procedure for coordinating theoperations of the two committees. The Committee onWays and Means is as independent a body as the Ap-propriations Committee and is not prone to approverevenue policies just so that they may correspond to theAppropriations Committee's views on what the level ofspending ought to be. Whatever co-ordination does exis tbetween the two committees is said to be informal ,resulting from the influence of Congressional leadershi pand the efforts of the President and the Treasury . Theexecutive branch has traditionally dealt with the Way sand Means Committee with caution and respect 4a

sisting of all members of both the appropriations an drevenue-raising committees of both houses was to sub-mit a figure which was to serve as a ceiling on tota l"appropriations for expenditure" and was to take intoconsideration the relationship between appropriation sand revenues. The committee, however, was given n oauthority to make recommendations in regard to ta xpolicy. The revenue committees retained full control ove rthis tunction. Thus, while the members of the revenuecommittees participated in the decisions which could bebinding on subsequent actions of the appropriations com-mittees, members of the appropriations committees had

0 The Budget o/ the United States Government for the Fisca lYear Ending June 30, 1962, op. cit., p. M 94.H Tax Foundation, Inc ., Tax .Review, Volume XIX, Number 1 2(December 1958), p. 32 .

38 u

A number of students of Federal government financehave concluded that one of the principal procedura lshortcomings in the present system is that Congres shandles appropriations entirely separately from revenueraising. A 1959 report of the Committee for Economi cDevelopment advocated that appropriations procedure sbe revised to require that Congress relate expenditur edecisions to over-all tax policy. The report stated :

cis sentiment for working out some procedural formulaby which Congress can carry out the appropriating and -revenue-raising functions on an interrelated basis. Ir-respective of the fiscal policy which the Federal gov-ernment may follow, any consideration of the totalbudget must take into account the estimated volum eof future revenue.

In his last budget message (January 1961), Presi-dent Eisenhower pointed out that the complete separa-tion of tax legislation from the consideration of appro-.pristions and expenditures adds to the difficulty of c-xcr-cising fiscal controls. Congress was urged to "provid ea mechanism by which the total receipts and total ap-propriations t :.nd expenditures) can regularly be con-sidered in relation to each other_":" However, nothinghas been done by Congress to implement this sugges-tion .

-

Advocates of bringing together the appropriating an drevenue-raising processes undoubtedly hold the vie wthat if those who vote on spending must also assume

= the responsibility for raising the necessary revenue,they might exercise greater caution in approving ex-penditure requests . The present Chairman of the Com-mittee on Ways and Means, Rep. Wilbur D. Mills, hasattributed the continual increase in expenditure levelsto the fact that there is no satisfactory method fo rweighing altcmat ;--c courses concerning both expendi-ture requests and -tax proposals. He has pointed ou tthat :

-

"At no place in the budgetary process is there a realopportunity to consider the fact that a given expendi-lure may require a tax increase and that as an altema-tive to that expenditure there not only- is the possibilit yof making other expenditures but also the possibilit yof making no additional expenditures at all, and in -stead decreasing taxes, or at least not increasingthem.":"

The Joint Committee on the Legislative Budget, con-Similarly, the Senate Appropriations Committee con -

ducts operations largely independently of the Senaterevenue-raising committee — the Finance Committee .No member of the Senate Appropriations Committeeserves on the Financc 'Committee, u:though there is nospecific prohibition againsi overlapping membership .

Appropriations committees thus approve expendi-tures without any need to relate them to the revenue sout of which the spending must be financed . There

a% The Budget and Economic Growth . A Statement on Nationa lPolicy by the Research and Policy Committee, op . cit., p. 6 .44 Membership of three House committees—Appropriations ,Rules, and Ways and Means---is said to be exclusive . A membe rwho serves on any one of them may serve on no other committee.See : Masters, op. cit .49 Smithles, op. cit., p . 137 .

no similar power or obligation to control actions of the Admittedly, hard problem: are involved in gettingrevenue committees .

--

- formal coordination of the appropriations and revenue

,

Many arguments have been advanced against cons-committees . Serious difficulties were encountered i ndealing with t

two functions by a single committeebining procedurally the appropriating and revenue- in each house of Congress before, the establishm .nt araising functions . Opponents point out that the opera- separate appropriations: committees in the 1860's. Evst.lions are separate and distinct. Appropriations cons-mittees must examine government programs in the light

then, the workload for - the single ' immittees was ex-:

of varied conditions, social and economic, defense, etc. cessive, and with it came what was , coasidercd att.- ern-due remount of powers'

ti

=It is argued that this is a task quite different from tha tfaced by the revenue committees x Nevertheless, there is a - : .try real need for keeping '

` Ili-

Most proposals for the joint handling of these func- members of appropriations committees continuouslyaware of the amount of revenues which will be avail -

_

tions have emanated from persons who believe that suc h- able. The need might be met in part by providing thes e

r=~

action limits spending, since the outflow of expenditures -committees, during the entire period when they are

would be -measured against the inflow of revenue. If considering expenditure authorizations, with the most,_ _=

revenue estimates actually served to restrict spending, ` up-to-date estimates of expected revenues .the procedure would achieve the desired purpose . Inpractice, however, the primary consideration might In view of thr fact that appropriations for a givencontinue to be given to particular types of expenditure year arc not the same thing as actual expenditures forregardless of the size of estimated revenues; if so, the that year, it is not enough to set up a procedure whic hprocedure would not lead to the desired result . There would re-quire appropriations committees merely to

-

mi ght then be attempts to use expenditure totals as the relate appropriations to estimated revenues for a fiscalguidelines to which revenues should be adjusted . Few year- Far more meaningful would be the establishmen twould advocate that tax policies be subject to erratic by appropriations committees of limits on actual expen -year-to-year fluctuations in spending . Tax policies ditures each year. Such a requirement would serve to

;-,should be determined on a longer run basis and after make the men who decide on spending more constantl ycareful consideration of standards which are not nec- aware of the relationship between expenditures an dessarily

related

to

short run

expenditure

require- revenues and, of the possible effects on the size of th ements:s public debt .

=

F. SUMMARY

=

For 1964, a typical year in this respect, only 30 provided for certain purposes, such as payment of in-percent of the total estimated expenditures from the terest on the public debt, or provision of funds required

--

administrative budget was subject to Congressional for operation of open-end or grant-in-aid 'program saction yet to be taken . The principal cause of about to the states .70 percent "uncontrollability" is that much of th e-, tual spending will be based on authority granted in large sums arc spent by government "enterprises"

` -

previous years . When Congress acts on the budget for which obtain little or none of their financing through

=

any given year, it does not thereby determine the appropriations . Although enterprises wholly owned by

amount of funds which may be spent during that year . the government trYust submit annual budgets whic h

Instead, it grants new spending (or obligational) au- form part of the over-all executive budget and thus

thority which may be spent over a period of several

_ c̀ome under examination of the appropriations com-

years . Congress will normally exzmine carefully the mittct s, as a practical matter, the bulk of the spending

-

purposes for which new spending authority is re- is largely outside effective control of the appropriations

" -

quested. But actual spending which results from the - - process.

.carryover of previously granted expenditure authority- "Backdoor financing, " which by-passes the jurisdic-will receive relatively little attention tion of the appropriations committees and yet author-

Appropriations arc the form of expenditure authori- ° izes agencies to spend public funds, constitutes anothe rzation most-susceptible to continuing control by Con- device which undermines expenditure control . Thegressional appropriations committee-; . Yet the manner practice of reappropriating and reauthorizing the un-in which certain appropriations are mado- lessens the obligated balances of funds previously approved also .degree of control over the time sequence in which the makes for confusion in measuring the total 'amounts ,_ .funds are spent . Moreover, appropriations committees -available for expenditure .

.1have ' no real control over the amounts which must beIn some respects control' r's weakened by, the practice

• r,2 Wallace, op. cit ., .pi►. 153-154. -

-'o l.eiserson, op, cit., p. 123 ,

1,

r,+ Wallace, op . cit ., p. 153 .. i :~

39

-

1

VI. HOW EXPENDITURE AMOUNTS ARE DETERMINE D

Congressional procedures, it has been seen, by no means assure that decisions to spend rest upon anyprecise knowledge of the probable fiscal consequences- Nevertheless, Congress has worked out a numbe rof methods for determining the size, measuring the justification, and limiting the volume of Federal spend-ing.' in addition to the practices actually employed, other procedural rules and substantive criteria havebeen suggested_

A. LEGISLATIVE CONSERVATIS M

One ruk-of-thumb method which Congressional ap-propriations committees use for limiting the size ofnew spending authority is referred to as "kgislativ veconservatism." This may be described as a preferer:cefor granting agencies the same amounts—the sam emeans for attaining program objectives--with whichthey operated during the past ?ear or 3ears. Onemethod of appl3img this rule is to compare the numberof personnel which an agency has used in the past wit hthe number requested for the future.

Legislative conser.-atism leads appropriations canimit-tees to look with favor on those agencies which submitbudgets no higher than the ones which they proposedthe vear before. On the other hand, it is said, agencieswhich ask for more funds each year engender a degreeof resentment among committee members irrespective o fparty affiliation or political philosophy . This attitude hasbeen expressed by one subcommittee chairman _

%%Ion you have sat on the Committer, you sec thatthose bureaus are always asking for more money--al-ways up, never down. They want to build up their or-ganizations_ You reach the point—I havewhere itsickens you, where you want to rebel against it-"=

- In practice committee members thus tend to givemost of their time and attention to examining andquestioning those budget requests which are highe r_than the year before, while agencies which request no

increases have their proposals accepted with touch les sdifficulty.

A principal reason w1n. this method has develop .-dis that committees experience great difficulty in obtain-ing information on which to base valid judgments abou tthe teal jttstifrcation of departmental requests . Congresscannot really be certain whether the spending proposalsput forth by some agencies are based on a correctestimate of program requirements. Therefore, it mayfeel that under the dn:uermantces~ the safest course ofaction is to follow the precedent of earlier budtetandecisions_

"I.egislatirc conservatism- helps to keep the level o fnew spending authority from rising automatically. Thisapproach may tend to prevent increases in funds forprograms what the value of the benelits as comparedto the costs has not been demonstrated satisfactorily .It may also lead to rejection of suggestions for pro-gram expansion w hkh Right be justified on their merit sif the latter were known-

"Legislative conservatism" can also operate to pre-vent Congress from uncovering and removing areas o finefficiency. By placing a premium on unchangedbudget requests, Congress may discourage those whomight suggest decreases as well as those who advocateexpansion.

B. "MEAT AXE" REDUCTION S

Another method is the so-called "meat-axe" ap-proach . This involves deciding on some particular pc.tentage—for exampic, 5 percent—bv which some o rall spending requests are to be rcduccd, and then ap-plying this percentage cut across the board to some o r

- all departments and agencies.

This practice is arbitrary, indiscriminate, and applicsto efficient agencies as well as the inefficient. Indeed,those government operations which seek to attain theirprogram objectives with the most economical use o f

t For a more detailed description of Congressional techn.luesfor determining expenditures, see Wallace, op. cit- Chapters 4-9.

Fenno. op. cit..V. 320.

funds will be hurt the most . In contrast, agencies which-allow themselves a considerable margin of safety i ntheir operating budgets may not have their program scurtailed at all . In this latter case, the "meat axe" will

-- be trimming away fat only, while in the former it wil lbe cutting into vital organs . The "meat-axes" approac his criticized also on the grounds that it represents avirtual abdication of Congressional responsibility fo rexercising intelligent spending control .

Finally, what can happen in practice is that agencieswhich have been hit by the "meat axe" may later in-dicate an inability to perform their program operationswith the reduced funds. This may be a feigned inability,

41

to induct Congress to restore an originally inflate damount. In other cases it :say be a genuine nubilityto carry out agency obligations with the monies pro-vided. In either case, if a "meat-axe" cut is then fol-lowed up by a deficiency appropriation, the end resultmay be little or no net reduction in new spendingauthority-

As long as Congress is faced with spending requestswhich arc huge in size and almost infinite in eom-pkxity, the temptation will be great to employ the"meat axe' for lack of any better method. For exam-ple. the defense budget has been characterized by re-quests for vast sums couched in hm uagt which. be-cause of technical detail and necessary secrecy . is vir-bony inoomprthensibie to most committee memberx.Yet at the same time Congress is irritated by exposureof waste and extmvagance, perhaps unrepresentativY

but still undeniable. With agency spokesmen custowar-ily defending all requests as of equal importance. theappropriations committees may be unable to determin ewhere aYSte may be involved. So the "meat axe" maybe used because Congress believes that some actio nmust be taken- An example of this attitude was ex -pressed when the House Appropriations Committeereduced the spending authority for the Defense De-partment for 1953 by about h0 percent, saving_

- - - a considerable portion of the 2 billion dolla rreduction in the current bill has been made witn th especific purpose in mind of enforcing a better job o fmilitary management and expenditure . Schnee %- r trus tbe found to shark the Department of Defenu from topto baton into du full tr ation dot Congress andthe American people will net tolerate waste in nume rand manpower_- (Italia added .?=

C. OVER-M REDUCTION S

A variation of the —M=—axe— cut is the overal lreduction. In this case Congress will direct that tota lappropriations be cut back by a specified percentage o ramount. It will not, however, designate that the cut b eapp!-d proportionately to all agenneies.

An examplew-as the Bridges-Byrd amendment to th egeneral appropriations act of 1951 ; it directed thePresident to reduce the total in the bill by not less tha nSSW million, leaving to the Budget Bureau Directorauthority for determining precisely where the cuts wereto be applied= The Bureau them made reductions inISO of the iotat of about 350 individual appropriation sitems, leaving the remaining 200 untouched . Of atotal reduction of S573 million, 5509 million . or 89percent, was concentrated in 17 spending areas whichare generally considered to be popular with the public .The cuts included a reduction of S96 million for loanauthority for rural electrification . S75 million in publichealth services hospital construction, and S32 millionfor flood control. Fighting in Korea had just begun .and it could be argued that these were types of spend-ing which should be cut back during such emergency:

Oyer--alt budget reductions have been criticized on

the grounds that they She to the President and depart-ment heads very broad authority to allocate the trots;thus they sharply reduce Congressional responsibilit yfor the results . The reduct"z .q in practice be madewhere Congress. on closet exarunation, would notwish to we reductions, while the untouched program swould include those which the legislative branch mightprefer to we curta`kd. Executive branch officials mightdeliberately concentrate reductions in programs knownto be popular, thus disrrctliting Congressional attemptsat economy.

On the other hand, this approach can be defendedas representing the kind of control to which Congressought to limit itself—nawJy. direction of the broadlines of general policy—while leaving to t ;.: cxeeutiv cbranch maximum discretion in the handling of th edetails of agency spending. Those who defend thi smethod claim that in fact Congress can do no mor ethan this. effectively. and that if it attempts to act ur nall the detailed aspects of budget requests, it Will in-evitably get so bogged dowr in trivial ramifications thatit will lose sight of the general policy considerations o nwhich its attention ought to be concentrated

D. REDUCTION IN OVERHEAD

Another procedure centers around attempts to cu toverhead, to "remove nett: fat," "reduce the flabbywaistline.- etc., of agency budget requests . while seek-ing to leave untouched the essential program objectives .One writer has described the attitude of appropriationscommittee members as follows:

"Members are hailed by their fellows as being 'prett ysharp with the knife . . . : Executives are urged to pu ttheir agencies `on a=fat boy's diet.' Budgets arc praised

when they are 'cut to the bone_' And members agreethat 'You can always get a little more fat out of a piec eof pork if you fry it a little longer and a little harder.*"

Because of a belief that there is considerable over-

House of kcpresentativ:-, Explanatory Notts on Defense Ap-propriations. 1953, p. 7 .

Cuts %ere not to impair the national defense effort.Wallace, op. cit. . pp. 75-77.

c Fenno, op. cit., p. 312.

42

stating in certain Federal agencies (a feeling whic his not limited to those who question the large-scale useof governmental power to accomplish social objec-tives , moves to cut overhead can take the form o fdirectives to agencies to reduce their personnel by cer-tain stated percentages, to freeze the hiring of newemployrees, to leave unfilled employment slots vacantuntil the required reduction has been absorbed, etc-

An example was provided in the amendments pro -posed by Representative Jensen of lou and Sen_ Home rFerguson of Michigan. for several non-defense appro-priations bills for 1952. These amendments specifiedthat particular agencies were not to fill more than 25

percent of their vacant personnel positions until theirtotal personnel complement had been reduced to 90percent of the total on which the President's 1952 budge trequests for those particular agencies had been based

Another instance occurred in the handling of the1953 budget. Representative Curtis of Missouri pro -posed to cut the authorization for operating expense sof the General Services Administration by 25 percent .He stated that as far as he could we this would resul tin "mainly cutting the top ovtdwad personnel. andshould in no way affect the actual operation of theGSA - - _ - The amendment was adopted .

E. ATTEMPTS TO UNIT NEW SPENDING AUTHORITY =0R ACTUAL EXPENDITURES

Still another method suggested to aid Congressionalcontrol of expenditures is to set an over-all ceiling o nthe amount of new spending authority which could b eapproved for any one fiscal year- This was attemptedby the Legislative Budget, discussed earlier.

A proposal introduced in 1952 by Rep . Frederic R_Cotdert of Kew York, but not adopted, would haveestablished on a one-year basis a ceiling on actual ex-penditures. The bill provided that expenditures mustnot exceed revenues for fiscal 1953 unless there wer ea war sr a period of national emergency as declaredby Congress.' It also provided that Congress could no tmake appropriations for the fiscal year in excess ofrevenues for that year. Proposals of the same generalnature introduced by Mr- Coudert in 1933 and 1957were not adopted-

_

Attempting to limit expenditures to revenue on asingle-year basis was criticized by officials of the Eisen-hower Administration as being inflexible and imprac-tical. At any given time there would already be in ex-istence a backlog of spending authority approved b yCongress in earlier years . Sonic of this unused author-ity would be scheduled to be used in the current fiscalyear; there was nothing which a later session could

do to prevent this result, even if total expenditure swould thereby go over the established ceding .

In 1957, Rep- John H_ Ray of New York introduceda resolution which would also have established on aone-year basis a mandatory ceiling for both appropria-tions and expenditures- The ceiling was to be set at adefinite dollar amount. For fiscal 1958—4he year towhich the limitations were to apply—this limit was tobe placed at S65 billion- Any revenues in excess ofS65 billion were to be set aside, one-half for reductio nof the public debt and one-half for a reduction of taxes.This proposal was not adopted ; appropriations for1958 amounted to S70 billion, 1 * while actual expendi-tures totaled S71 .9 billion-

In 1%1, Rep. H. R. Gross of Iowa introduced abill which would have required that Federal expendi-tures not exceed revenues, and that there be systemati creduction of the national debt. It, too, failed to pass -

In 1963, Senato-s Byrd of Virginia and Carl T.Curtis of Nebraska introduced a measure—not acte dupon—to require the President to submit a balancedbudget annually, with provision for debt retirement .If Congress then authorized expenditures in excess ofthe estimated receipts, it would be prohibited from ad-journing until action was taken to balance the budget .

F. CONTROL THROUGH SUBSTANTIVE LEGISLATIO N

The amounts provided for certain Fed-ral programs ,as described earlier, are not in effect determined by theappropriations process but by substantive legislation .Thus, the amounts which must be provided for veter -

s Douglas, op. cit., p. 74. Senator Douglas referred to -adminis -trative elephantiasis" in certain of the executive agencies

_ sThe 90 percent figure represented a revision of the earlier ver-sion of the amendment as submitted by Representative Jensen.(He wanted the amount of personnel to be reduced to 80 percen tbefore any new hiring could take place, but the Senate raised thefigure to 90 percent.) Smithies, op. cit., p. 145.

ans' pensions depend in part on the number of eligibleveterans and not on any specific action of the appro-priations committees. The programs of welfare assistanc eto the states also require Federal outlays as determined

t, Declaration of a national emergency by Congress would haverequired a concurrent resolution passed by both houscs with amajority of at least tyro-thirds of the authorized membership .W Total new obligational authority approved for fiscal year 1938 ,including reappropriations. contract authorizations, and author -izations to expend from public debt receipts, amounted to $76.3billion .

43

by the basic legislation, but dependent as well upon theactions of state governments in providing matchingfumds t t

Substantive legislation also controls the spending ofthe Federal highway aid program.'-- The Bureau ofPublic Roads enters into agreements with the state sundr . which the Federal government obligates itsel fto match funds put up by the states themselves, ac-cording to specific formulu set down in the substantivelegislation- Federal grants for primary, secondary, an durban highways are provided on a one-for-one basis —one dollar of Federal assistance for each dollar put u pby the states for these purposes. Grants for the inter-state highway system are generally provided on the

basis of nine collars of Federal funds for each on edollar of state funds .

Reflecting concern for the possible loss of spendingcontrol because of these continuing programs, Rep.Charles E Goodell of New York Atroduced a measur ein 1963 which mould provide for a periodic review ofthe various giant-in-aid programs, and for automaticexpiration of any program every five years unless i tis specifically renewed by Congress. A periodic reviewof these programs had earlier been recommended bythe Advisory Commission on Intergovernmental Re-lations. Neither the Goodell proposal ear others of asimilar nature has yet secured Congressional approval .However, hearings on the general subject are scheduledfor early 1964-

G. BENEFIT-cost CRITERIA

ured by probable payments -by users, a-g ., irrigationfees or charges for electricity . For others, such as sec-ondary and tertiary benefits imde img some that areintangible, measurement is as ditficttit as is measure-ment of the secondary and more remote effects o ftaxes. By putting a high appraisal on such benefits, a nadvocate of a project may make it appear far bette rthan may in fad be justified.'' Moreover, where animportant fraction of the benefits will appear man yyears in the future—typically the case in natural re-soum projects—the rate of interest used in discount-ing their value makes a substantial difference. For ex-ample, if the value of electricity to be produced andsold 50 years from now is discounted at S percent ,each dollar's worth then is worth only 9 cents today .If the discount is at 2 percent, the present value is 3 7cents. Similarly, if the benefits are capitalized over 50years, they produce one result; over 100 years, another.For these and other reasons computations of coat-bene-fit ratios tend to be highly subjective .

Executive agencies and Congressional committee spassing on substantive kgislation make increasing useof benefit-cost analysis. Thus far it appears that thiscriterion has had little value in restraining expenditures,except in eliminating clearly useless projects. Appro-priations committees rnig .tt well subject the analysesto further scrutiny even when the decisions about proj-ects and programs have apparently been made.14 It has been charged that cost-benefit calculations have been

-used to justify otherwise marginal or evst undesirable programs .

Benefit-cost criteria's as a too[ for guiding govent-ment expemditum are of potential value for some pro-grams. But they are complex and may be better suite dfor use within executive agencies than by Congressiona lcommittees until the latter obtain more professiona lstaff and technical assistance.

Bene&-cost otxnparisoms attempt to do for certaingovernmcc-tit operations what the interplay of the mar-ket does for private firms, namely indicate the opti-mum, or at least an improved, allocation of resources .TU objective is to compare the coat of programs, suchas a waterway development, against the benefits to beexpected from them as well as those which might beobtained from alternative uses of the same amounts .Where applicable, the analysis can be used to indicat ewhether a particular program should be nutiated, ex-panded, or terminated, or whether another progra mshould be undertaken in its place. Major applicationhas been in planning natural resource developments .

Use of the benefit-cost approach entails the massingof extensive cost data, but these should be availabl ein any case before a project is approved. Greater diffi-culty arises in estimating benefits. Some may be meas-to See pates 14-15. 29, 37.

t =As the highway grants are financed from the taxes dedicate dto the highway trust fund, these payments do not form part ofexpenditures under the regular or administrative budget .t= See: Lawrence G. Hines, -Tux Hazards of Benefit-Cost Analy-sis as a Guide to Public Investment Policy. Public Finance,Volume 17, Number 2 (1962), pp. 1-19.

44

Vlh POSSIBLE IMPROVEMENTS IN PROCEDURES:A RECAPITULATIO N

This study has indicated shortcomings in the procedures by which the legislative branch must carryout its responsibility in the determination and control of Federal expenditures. Information supplied in theannual executive budget is not entirely adequate for intelligent decision-making by the Congressiona lappropriations committees. These committees have not provided themselves with professional staff assistanc esufficient fez a complete understanding of the ramifications involved in executive recommendations .

In addition . Congress handles the appropriations process in a piece-meal and disjointed fashion . Thereis no satisfactory procedure for coordinating all forms of expenditure authorization (the unused past balanc eand current approvals) to determine actual expenditures for a coming year . Individual areas of the budgeta-e approved on a separate basis, without sufficient attention being given to the total of all actions or tothe amount of revenue which will be available. Moreover_ the function of the appropriations committees

in reviewing spending requests is in part by-passed by "backdoor spending

Chances in procedures will not of themselves brineeffective expenditure control . unless accompanied byan over-all determination on the part of Congress, an dparticularly the appropriations committees. to makethe procedures work_ If there were an overriding in-terest in achievinc the objective, the present system .despite its weaknesses, could be trade to work muc hmore effectively.

However. there is much of what appears to be am-bivalence in present Congressional attitudes_ Individua llegislators are theoretically in favor of economy_ Bu tholding the line on spending would often conflict wit heven stronger desires to maintain or increase particulartypes of expenditure_ The present system permits leg-islators to "have it both ways- in that congressme nare able to vote for particular expenditure authoriza-tions without having to face, in a clear-cut fashion, th eover-all fiscal consequences of the total of all of thzseactions_ Better results could be expected from a pro-cedure which assured that each spending action i sclearly related to the total of all spending actions andto the size of the revenues _

Congress can never control expenditures in any realsense until it is able to control the amount which isactually spent during a year, instead of as at present,merely the amount of new spending authorization mad eavailable . Since actual spending is made up partly o fnew, :.nd partly of previously approved spending au-thority, actual outlays for any one year cannot be con-trolled by setting limits to new authority only . Thereis need for a method by which Congress will determin eannually the limits of actual expenditures from allforms of spending authority, both new and previouslyexisting . Otherwise. Congress cannot establish an ef-fective; annual fiscal policy.

Congress will continue to have difficulty in control -ling expenditures so long as appropriatijns arc put

-

through by means of a dozen separate bills. Some type

of comprehensive bill . but one which goes beyond thatused on a trial basis in 1950. stems to be necessary. Thebill should encompass all forms of expenditure authori-zation. not merely appropriations . If the bill were alsoto set a limit on all actual expenditures to be made durin gthe year. effective legislative power to determine outlayswould be enhanced_ Such a general expenditure authori -zation bill would create problems for the executivebranch in program planning and in the schedule for dis-bursements for certain long-range operations . as in thedefer .:e program . Experience and experiment. however,should enable governtncnt to master these difficulties.

The approach suggested would also take care of th evexing problem of "backdoor spending- The methodwould automatically require review by appropriation scommittees of authorizations granted to agencies t oenter into contractual obligations which necessitat esubsequent appropriations, or to borrow from publi cdebt receipts.

The item veto deserves serious consideration . Con-gress is understandably loath to grant this additiona lpower to the Chief Executive_ Its supporters, however ,believe that it would be an effective device for elim-inating pork-barrel and other wasteful items, as wel las provisions extraneous to appropriations.

Formal coordination between the functions of theappropriations, legislative, and revenue committee sseems eminently desirable in principle . Yet efforts torequire such coordination could well come to grie fbecause of the zealous concern of Congressional com-mittees for preserving their prerogatives. Certainchwiges, however, might improve the actual contro lexercised by the appropriations committees .

Requiring that all forms of expenditure authorizationbe brought before the appropriations committees on anannual basis would remove the present conflict re-sulting from the practice of providing expenditureauthorizations by substantive legislation. There is also

45

need for a procedure by which Congress would re-examine the basic legislation establishing the open-endprograms at stated intervals—for example, every fou ror five years—to determine whether revisions mightbe in order in the light of present and prospectiveconditions ,

The budget document would be improved by fur-ther grouping of expenditure requests on a programbasis. Appropriations committees would thereby ge ta better opportunity to examine and compare individ-ual requests with alternative uses of equal funds. Inadditirm. the budget document should contain projec-tions of estimated coats of programs and of estimatedrevenues beyond the I2-month period comprising the

fiscal year in question_ Committee members would thenhave an overview of the total coats that might ulti-mately be involved. It would also be helpful to providein the budget document a more comprehensive presen-tation of the assumptions concerning operation of thenational economy on which revenue estimates arebased.

Finally, if appropriations committees are to be ableto decide intelligently on the justification and relativepriority of spending requests, some method must b efound for insuring that they obtain and make use ofadequate professional staff and of the findings of thestudies of past operations as the evidence becomes avail -able from the General Accounting Office .

APPENDI X

Table A

Expenditures of the Federal Government!Fiscal Years 1789-1964

(in millions)

Yew

Expenditures Yew Expenditures

1789-1791 $ 4 1835 - 181792 5 1836 - "311793 4 1837 371794 7 1838 341795 - 8 1839 271796 6 1840 241797 6 1841 271798 8 1842 251799 10 1843 121800 11 1844 22

1801 9 1845 231802 8 1846 281803 8 1847 571804 9 1848 `451805 11 1843 451806 10 1850 - 401807 8 1851 481808 10 1852 441809 10 1853 481810 8 1854 58

1811 8 1855 601812 20 1856 701813

321857 68

1814 35 1858 741815 33 1859 691816 31 1860 =

63=

1817 22 1861 671818 20 1862 475

-

1819 21 1863 7151820 18 1864 865

1821 16 1865 1.2981822 15 1866 52 11823 15 1867 3581824 20 1868 3771825 16 1869 3231826 17 1870 3101827 16 1871 2921828 16 1872 2781829 15 1873 2901830 15 1874 303

1831 15 1875 2751832 17 1876 2651833 23 1877 24 11934 19 1878 237

Yew Expenditures Yew Expenditures

1879 ;

267 1923 $3.1371880 268 1924 2.8%1881 261 1925 2,88 11882 258 1926 2,8881883 265 1927 2,8371884 244 1928 2.9331885 260 1929 3,1271886 242 1930 3.3201887 268 1931 3.5771868 268 1932 4,659

1889 299 1933 4,5981890 318 1934 6.6451891 366 1935 6.4971892 345 1936 8.4221893 383 1937 7.7331894 368 1938 6.76 51895 356 1939 8.84 11896 352 1940 9.05 5

= 1897 365 1941 13.25 51898 '43 1942 34.037

1899 605 1943 79.3681900 521 1944 94,98 61901 525 1945 98,3031902 485 194E 60,32 61903 517 1947 38.9231904 Si4 1948 32.9551905 561 1949 39,4741906 570 1950 39.54 41907 579 . 1951 43.97 01908 659 1952 65.303

1909 694 1953 74.1201910 694 1954 67.5371911 691 1955 64,3891912 690 1956 66.2241913 715 1957 68.9661914 725 1958 71,3691915 746 1959 80.3421916 713 1960 76.5391917 1,954 1961 81 .51 1;1918 12,662 1962 87,787

1919 18,448 1963 94,31 11920 6,357 1964 98.8021921 5 .0581922 3,285

(a) Expenditures are those from the regular or administrative budget . Data for 1963 and 1964 are estimated ; beginning in 1932 terrain interfundtransactions are excluded; beginning with 1913 refunds of receipts are excluded; for the period 1789-1842, the years end with December 31;for 1844-1964, years end June 30 ; for 1843, figures are for January 1-June 30 .

Sources: U . 5. Department of Cxnmerce, Bureau of the Census . Historical Statistics of the United States, Colonial Times to 1957, pp. 718.719;

- -and Bureau of the Budget, The Budget of the United States Government for the Fiscai Year Ending June 20, 1964, p . 422.

47

LEGISLATIVE REORGANIZATION ACT OF 194 6(P.L. 601, 79th Cone., 2nd sess.)

Section 138 (pertaining to the Legislative Budget) '

(a) The Committee on \\ears and Means and the

a reduction in the public debt- Such report shall b e

Committee: on Appropriations of the House of Repre-

made by February 15.2

sentatives, and tlx: Committee on Finance and the

(b) The report shall be accop-pnied by a concur-

Committee on Appropriations of the Senate . or duly

rent resolution adopting such budget and fixing the

authorized subcommittees thereof, are authorize , ' and

maximum amount to be appropriated for expenditure

directed to meet jointly at the beginning of each rceu-

in such year. If the estimated expenditure's exceed the

lar session of Congress and after study and consulta-

estimated receipts. the concurrent resolution shall in -

tion, giving due consideration to the budget recom-

clude a section substantially as follows : "That it is the

mendations of the Pre sident . report to their respective

sense of the Congress ►.hat the public debt shall be in -

Houses a legislative budget for the ensuing fiscal year .

creased in an amount equal to the amount by which

including the estimated over--alt Federal receipts and

the estimated expenditures for the ensuing fiscal year

expenditures for such year- Such report shall contain

exceed the estimated receipts, such amount being

a recommendation for the maximum amount to be

S _

appropriated for expenditure in such year which shall

s United srarr: sratcrrts ut tut,c. leis, Volume set. Put !

include such an amount to be reserved for deficiencies

(Washington. D. C_ U_ S_ Government Printing Office. 1947) .

as may be deemed necessary by such committees_ It

pp- x'=-K" -~

= In 1949. Section 1-38 was amended to extend until i;;, !thethe estimated receipts exceed the estimated ex ndi- deadline bf which the committee was to make its recommen -

tures, such report shall contain a recommendation for

dlatioaLr