Pris. David J and Atriar F. Ort, Clark Carersion A. L. Beiten, Jr. Nanonai Association of Manufacturers. Senaar Lawen Chiles, Flenda. SUBMISSIONS FOR THE RECORD Congressman Juck Broks, Texas. Senator Jucre K. Jams, New York. Cemressman Bill Lexander Asansus. Congressman J7 Pesie. Texas. Congressman 3. Joan Sens Pennsylvania Compassman Karen 2. Esca. Mengan Muray Wadencam, pisser. Wishing in Chiversity. De Cart E. Matten, CS Chamcer of Commere. Pexene drent. Inercan Conservace Con CONGRESSIONAL CONTROL OVER BUDGETARY OUTLAY AND RECEIPT TOTALS THURSDAY, JANUARY 18, 1973 CONGRESS OF THE UNITED STATES, JOINT STUDY COMMITTEE ON BUDGET CONTROL, EXECUTIVE SESSION Washington, D.C. The Joint Committee met at 10 a.m., pursuant to notice, in room F 100, the Capitol, Representatives Al Ullman and Jamie L. Whit1 (cochairmen) presiding. Present: Representatives Ullman, Whitten, Mahon, Burke, Griffiths, xes, Cederberg, and Rhodes. Present: Senators Fulbright, Fannin, Pastore, Young, Hruska, irtke, and Roth. Representative ULLMAN. Ladies and gentlemen, in accordance with instructions given to Jamie and myself at the last meeting, we have vited Mr. Charles L. Schultze, senior fellow at Brookings, who of urse was the former Director of the Bureau of the Budget, to appear fore our committee, and who has appeared before your committee, orge and Jamie, many times. He has an intimate knowledge of the hole budgetary context, more than anyone I know, and he is specializin the field now at Brookings. Charley, we have brought you up here to pick your brains and we ed all of the help we can get. We have a tough challenge and a real assignment as you well know. this point, I would like to introduce my distinguished colleague and -Chairman, Jamie Whitten, for a few words. Mr. WHITTEN. As Co-Chairman, I just want to welcome you also harley and express my appreciation for your appearance here today. e all thought that this leadoff working session of the committee ould involve a briefing on how the budget is formulated, the various lationships between Congress and the administration in the budget ocess, and the different types of funding devices that must be conlered in developing any mechanism of budgetary control. Because your recognized ability and the extensive practical experience you ve had in budgeting administration, I know we will all profit from -ur presentation. Mr. ULLMAN. With no further ado I will introduce Charley hultze-except for this one proviso-as you know this is a working ssion of the committee and remarks here are strictly speaking off e record; however, Mr. Schultze has kindly consented to have his marks included in our published testimony. As a result Charley's (1) remarks will appear for the record as a continuing presentatio out interruption, although we here today will be interrupting essential points to seek additional information as he goes alon STATEMENT OF CHARLES L. SCHULTZE, FORMER DIRECT THE BUREAU OF THE BUDGET Mr. SCHULTZE. I have no prepared testimony. I do have son on several points, and I passed around some rather amate drawn charts, and they are amateurishly drawn because I dre myself. These might help us a little bit in getting through som technical problems. [Two charts follow:] Mr. SCHULTZE. The fiscal situation of the Federal Governm such that it is absolutely vital for the Congress to get its hands a its own budget, not just because it is very important in a subst sense for the good of the country in the short run, but because long run unless the Congress gets its hands around its own bud the aggregate, then, Republican or Democrat, it will gradually l power to the White House and the power of the purse will becon and less and less important. So I think this is a very critical committee and a very critical a ment. But let me start. If I may, I would like to make three points t First, to talk a little bit about the very complex set of relation which exist between congressional actions, on the one hand, and b expenditures and revenues, on the other. It is a very complex relationships, and we will talk about those. The second point I would like to cover is some of the pro which you will encounter in trying to set a budget ceiling. I wil talk about the complexity of the problems and then some of the lems you will run into in trying to get up a mechanism to set budget ceiling. Finally, a little bit gratuitously. I would like to offer just for the a couple of alternative possibilities of how one sets up a mechanis do this. And I offer those humbly and only as a couple of ideas. Let me start with the complexity problem. It is dry as dust and complex, but I think it is essential. Let us look at the process by which expenditures actually made. A lot of this, I know, is duck soup to you, but I would i put it all together |