Rep. Richard Wigglesworth, another senior member of the joint committee, admitted that it was "impossible so early in the session to arrive at reliable estimates before committee hearings are held. The cart is, in effect, put before the horse." 34 Clarence Cannon, chairman of House Appropriations during the last attempt with a legislative budget in 1949, commented that Congress could no more expect success with "this well-meant but hopeless proposal than we can expect a verdict from the jury before it has heard the evidence." 35 While it is true that Title I of S. 3984 provides for a later submission date for the legislative budget (May 15 compared with February 15), giving members of the joint committee additional time to examine the budget, the legislative budget would still appear prior to the time the appropriations committees had completed their scrutiny of budget estimates. Even if the joint committee examined departmental and bureau estimates in detail, it would be examining estimates that are already, to some degree, out of date. Having been prepared six months or more prior to the date of submission of the President's budget, estimates are often of a highly tentative quality, subject to considerable modification. Congress is not notified of these budget amendments until the new session is well underway. The joint committee would therefore be put in a position of having to predict or anticipate these budget amendments. A legislative budget could also be thrown out of kilter by subsequent supplemental and deficiency bills. To take a concrete example, Congress established a spending ceiling of $31.7 billion for the fiscal 1948 budget. But in addition to funds provided in the regular appropriation bills, billions more were made available elsewhere. The Supplemental Appropriations Act, passed on July 30, 1947, contained more than $1.6 billion.36 Many of the major items reflected legislation that had been enacted after the President submitted his budget. Thus, $400 million was appropriated for assistance to Greece and Turkey (by an act of May 22, 1947), while $332 million was provided for relief assistance to war-devastated countries (by a joint resolution of May 31, 1947). Two other supplementals for fiscal 1948 totaled more than a billion dollars.37 Similar difficulties would confront a legislative budget today. During the Vietnam buildup, supplementals came to $21.8 billion for fiscal 1966 and $19.4 billion for fiscal 1967. Even after this buildup, supplementals remained at the multibillion-dollar level : $8.1 billion for fiscal 1968; $5.8 billion for fiscal 1969; $6.2 billion for fiscal 1970; and $9.9 billion for fiscal 1971. ITEM NO. 3. This topic is covered in a separate CRS memorandum by Walter J. Oleszek, analyst, Government and General Research Division. ITEM NO. 4. If a budget surplus is anticipated, the joint committee is to recommend tax reduction, public debt reduction, or a combination thereof. Should there not also be a procedure in the event of budget deficits, particularly in view of the record of recent years? Moreover, what legislative expertise is to brought to bear on such macroeconomic 34 Ibid., p. 1881 (Feb. 27, 1948). 95 Cong. Rec. 880 (Feb. 7, 1949). 61 Stat. 610 (July 30, 1947). #61 Stat. 695 (July 31, 1947), and 61 Stat 941 (Dec. 23, 1947). decisions? Should the Joint Economic Committee, for instance, be required to make a recommendation? 9. Restriction on Appropriation and Authorization Bills Provision: It shall not be in order in either house to consider any bill or joint resolution making appropriations for any fiscal year (beginning with fiscal 1974), or any bill or joint resolution authorizing appropriations for any such fiscal year, until the joint committee has submitted the legislative budget for that fiscal year. Analysis: There could be an awkward period between the start of a new session and the appearance of the legislative budget by May 15. This provision would tend to delay the early enactment of authorization bills and thereby delay the timely passage of appropriation bills. Action on supplemental appropriations or continuing resolutions might also have to be postponed. It would be an exceptional situation to need action on a continuing resolution in the latter half of a fiscal year (January 1 to June 30), but it is not inconceivable. The delay of the foreign assistance authorization bill in 1971 required a continuing resolution to be passed by the House on December 15 and by the Senate on December 17. 10. Restriction on Appropriation and Authorization Reports Provision: The committee report accompanying any bill or joint resolution making appropriations or authorizing appropriations for any fiscal year (beginning with fiscal 1974) shall contain a comparison of the amounts appropriated therein, in the aggregate and in each major category, with the amounts set forth in the legislative budget for that fiscal year. If any such amount appropriated or authorized exceeds the amount set forth in the legislative budget, such report shall contain an explanation for the excess. It shall not be in order in either house to consider any bill or joint resolution unless the committee report accompanying it complies with the requirements of this paragraph. Analysis: In complying with this provision, authorization and appropriation committees may well take the position that the ceilings in the legislative budget are necessarily superficial and out-ofdate. The recommendations of the joint budget committee, no matter how well staffed, cannot match the expertise and scrutiny of the committees that authorize and appropriate the funds. If that is the attitude of these committees, they may choose to comply with this provision in a perfunctory way. That was the experience with the legislative budget of 1947-49. As Rep. Clarence Cannon noted: 38 After the legislative budget was adopted in the Eightieth Congress we passed all the supply bills carrying innumerable items and billions of dollars. Was the over-all figure ever considered or referred to at any time during the consideration of these bills? After its adoption by the House and Senate it was never heard from again. We trust that these observations will be helpful to you. If we can be of any further assistance, please do not hesitate to contact us. 3 95 Cong. Rec. 881 (Feb. 7, 1949). EXPERIENCE WITH A LEGISLATIVE BUDGET (1947-1949) (By Louis Fisher, Analyst, American National Government, Government and General Research Division, Library of Congress) JANUARY 30, 1973 Section 138 of the Legislative Reorganization Act of 1946 established a joint committee for the purpose of preparing a legislative budget. The committee was composed of members of the two Appropriations Committee, House Ways and Means, and Senate Finance. It was the responsibility of the full committee (or its subcommittees) to meet at the beginning of each session to study the President's budget and report a legislative budget, including estimates for receipts and expenditures. The report, to be made by February 15, was to contain a recommendation for the "maximum amount to be appropriated for expenditure in such year which shall include such an amount to be reserved for deficiencies as may be deemed necessary by such committees." If estimated receipts exceeded estimated expenditures, the report would contain a recommendation for a reduction in the public debt. If a deficit appeared likely, the concurrent resolution accompanying the report would include a section substantially as follows: "That it is the sense of the Congress that the public debt shall be increased in an amount equal to the amount by which the estimated expenditures for the ensuing fiscal year exceed the estimated receipts, such amount being $ Attempts in 1947 and 1948 to implement Section 138 were frustrated by various factors. Congress failed to agree on a legislative budget the first year and it voted funds in excess of the legislative "ceiling" the next year. When Congress tried a third time in 1949 to formulate a legislative budget, it extended the reporting deadline from February 15 to May 1. The new deadline came and went, without action on a legislative budget. Section 138 remained a dead letter for the next two decades until repealed by the Legislative Reorganization Act of 1970 (Section 242). The concept of a legislative budget had conflicted with certain practical realities: 1. There was a lack of time and information, both of which were needed to meet the tight deadline of February 15. The first concurrent resolution reported out in 1947 began with the phrase "it is the judgment of the Congress, based upon presently available information..." That by itself conveyed an apologetic tone, an admission that recommendations were being offered in the absence of reliable data. Although the report (H. Rept. 35) claimed that the joint committee had conducted "a careful survey" of Presidential budget estimates, a minority statement compared the committee recommendations to "a court rendering a verdict without evidence." The statement said that only three meetings of the joint committee had been called, only two witnesses heard, and no actual hearings held. In this case the criticism came from Democrats. But the following year Senator Styles Bridges, Republican chairman of the Appropriations committee, agreed that it was impracticable to set a spending 92-496 O-73-17 ceiling without first making a minute appraisal of the budget requests: "As the act is now written, I do not believe that the legislative budget will ever be more than a pregame guess at the final score, for it asks the Joint Budget Committee to give its estimate of a multitude of new facts, figures, conditions, and requests with which it has had no time to become acquainted" (94 Cong. Rec. 1400). Richard B. Wigglesworth, second-ranking Republican on House Appropriations, underscored the same point by saying that it was "impossible so early in the session to arrive at reliable estimates before committee hearings are held. The cart is, in effect, put before the horse" (94 Cong. Rec. 1881). The timing dilemma was difficult to solve. The early date of February 15 gave the joint committee an opportunity to affect the level of appropriations and expenditures, but not enough time for study. Extending the deadline by several months would permit hearings and a more detailed scrutiny of budget estimates, but by that time the House might begin action on appropriation bills without reference to a legislative budget. 2. The joint committee was also criticized for recommending large spending reductions without specifying what would be cut. In 1947 the House proposed a $6 billion cut in the President's $37.5 billion budget; the Senate voted a $4.5 billion cut. No itemized estimate of major program reductions was included in the committee report or in the concurrent resolution. No suggestions were made on the floor as to which programs should be abbreviated or abolished. The spending reduction represented a major policy declaration, but there was not the slightest indication of how it should be executed. 3. The House and the Senate could not agree on the disposition of anticipated surpluses. The Legislative Reorganization Act had called for debt retirement, but the joint committee recommended in 1947 that only "a portion" of the expected surplus be applied to the debt. That left the door open to a tax cut which many Republicans favored. The Senate had different ideas on how to dispose of the anticipated surplus. As a consequence, the conference committee became deadlocked principally on the debt retirement issue, with House conferees preferring tax reduction over debt retirement. As the matter remained unresolved in conference, it became clear that the spending reductions recommended by Congress could not be realized-neither the $6 billion House cut nor the $4.5 billion Senate cut. Under those conditions the concurrent resolution was allowed to die in conference and no legislative budget was adopted. 4. The concurrent resolution, even if adopted, was nothing more than a recommendation and a target. It had no binding effect; both houses were at liberty to ignore it. Individual appropriation bills could be considered as though the legislative budget did not exist. Clarence Cannon, ranking minority member of the House Appropriations Committee in 1947 and 1948 and committee chairman in 1949, said this of the legislative budget: "Was the over-all figure ever considered or referred to at any time during the consideration of these [appropriation] bills? After its adoption by the House and Senate it was never heard from again" (95 Cong. Rec. 881). 5. The size of the joint committee was unwieldy (102 members drawn from the four House and Senate committees). The problem was al leviated when the committee decided to operate through a subcommittee of 20, with five members taken from each committee. This subcommittee was further broken down into two groups of ten each, one responsible for revenue estimates and the other for expenditure and appropriation estimates. The creation of subcommittees made the joint committee more workable, but it also provoked criticism from those who were denied an active role in the formulation of the legislative budget. Their participation was reduced essentially to a pro forma ratification of what the subcommittees recommended. 6. The joint committee lacked a permanent staff to make independent studies on budget estimates. It relied largely on the staff of the Joint Committee on Internal Revenue Taxation, conferences with executive officials and the appropriation subcommittees, and data supplied by the Budget Bureau and private organizations. 7. It was difficult to set a ceiling that would allow room for future supplemental and deficiency appropriations. The joint committee had to act on the basis of initial agency estimates, prior to the time that departments offered their revised estimates and budget amendments. The legislative budget was therefore likely to be in considerable error. 8. There was no procedure or mechanism to assure that the legislative budget would have the appropriate impact on unemployment levels or inflationary pressures. It was acted on without reference to over-all economic needs. For example, suppose the twin goals of economy and a balanced budget are the basic motivation for a spending cut. Yet the effect could be to retard economic growth and provide lower tax yields from corporations and individuals, putting the budget even more out of balance. 9. The atmosphere in which the legislative budget was debated was thick with partisan charges and countercharges. When the first legislative budget was brought to the House floor on February 20, 1947, Leo Allen, Republican chairman of the Rules Committee, declared that for "16 years under the Democratic Party this Nation unjustifiably and unwarrantedly squandered billions of dollars, hundreds of billions of dollars, until now we have a national debt of $270,000,000,000." Adolph Sabath, ranking Democrat on the Rules Committee, lost little time in offering a rebuttal: "Mr. Speaker, charges have been made that the Democratic administration and Congress under President Roosevelt and under President Truman spent vast sums of money. Of course we did. We rescued the country from an abyss of depression into which 12 years of Republican misrule, and especially after the last 4 years of Mr. Hoover's term, had led the Nation and the world." The political climate in 1947 and 1948 featured a contest between a Republican-controlled Congress and a Democratic-controlled White House. When the legislative budget proposed deep spending cutbacks in 1947 ($6 billion by the House and $4.5 billion by the Senate), critics regarded it not so much as an informed and realistic attempt at economy but as part of the Republican commitment to tax reduction. And when the legislative budget of 1948 included a spending reduction of $2.5 billion, it was interpreted in some quarters as an election-year gesture. |