CHART 2.-COMPARISON OF U.S. GOVERNMENT ANNUAL BUDGET DATA ON THE UNIFIED BUDGET CONCEPT AND THE FEDERAL FUNDS BASIS AND PUBLIC DEBT OUTSTANDING AT FISCAL YEAR END, 1954-73

1 The unified budget concept incjudes both Federal funds and trust funds for receipts and outlays. Federal funds correspond roughly to the old administrative concept used by the Federal Government prior to fiscal year 1969. Federal funds are those which the Government administers as owner as distinguished from those administered in a trustee or fiduciary capacity (the trust funds). Historical functions of Government, such as National Defense, Veterans' Benefits, Commerce, Labor, Agriculture, interest on the public debt, and others are paid from Federal funds (tax revenue and borrowed funds). Income taxes (individuals and corporations), most excise taxes, estate and gift taxes, customs duties, and miscellaneous receipts are paid into the Federal funds accounts from which all Federal funds expenditures are piad. All trust funds receipts are paid into the specific trust fund accounts for which the revenue is earmarked. All trust fund payments are made from the specific trust funds accounts Trust funds surplus receipts are invested in Federal securities (public debt or Federal agencies obligations). At the end of fiscal year 1971 the trust funds owned $96,000,000,000 of public debt securities. Major Federal trust funds are: old-age and survivors insurance, disability insurance, heajth insurance, unemployment, Federal employees retirement, railroad employees retirement, and the highway trust fund.

2 Since the Second Liberty Bond Act of Sept. 24, 1917, the U.S. Government gross public debt has been subject to a statutory ceiling or maximum limit. Public Law 92-5, Mar. 17, 1971, established a debt limit of $400,000,000,000 and temporarily increased the limit to $430,000,000,000 through June 30, 1972. Since 1954 there have been 21 legislative measures increasing or extending the public debt limit. During this period the debt limit has been raised from $275,000,000,000 to $430,000,000,000. New legislation is expected in the immediate future to raise the public debt limit above the current level of $430,000,000,000 so as to permit financing of the current budget deficit.

Sources: U.S. Office of Management and the Budget (selected budget documents). U.S. Treasury Department (selected Treasury reports).

With the tremendous growth in the Federal budget, Congress has lost more and more of the control it should rightfully exercise over the budget. A review of the total budget is an activity in which Congress no longer participates. If Congress required itself to establish an overall limitation on expeditures, this situation would change. Setting such a limitation would require Congress to consider the economic state of the country at the beginning of each budgetary cycle. It would encourage Congress to establish a comprehensive plan for Federal budget priorities.

We have heard a great deal of rhetoric lately about changing the Nation's priorities, but Congress cannot have a hand in this process until it starts to consider the budget as a plan for action which make basic choices between competing categories. Aaron Wildavsky, author of "The Politics of Budgetary Process," describes several different uses for the budget. He states that it is a financial document, a plan of “intended behavior," a statement of goals, a choice mechanism, and a contract. In recent years Congress has worked from the President's budget exclusively so that its adjustments have been made without references to an overall congressionally established spending plan. The roles in the budget which include planning and evaluation are lacking in congressional deliberation. This seems incongruous in light of the many thousands of hours of thought and work which goes into individual pieces of legislation which creates the programs the budget later funds.

In the last 5 years Congress has found it necessary to pass 29 supplemental appropriations bills, these represent several midyear corrections in Federal spending policy. However, they also represent a serious deficiency in congressional budgetary planning. In the last nine fiscal years we have appropriated almost $10 billion a year through supplementals. Chart 5 presents a record of supplemental appropriations since 1964. Chart 5A presents the cost of these supplemental measures for each fiscal year since 1964.

Chart 5A.—Total dollar amount for supplementals fiscal years 1964–721