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appropriations. It does not control contract authority or authority to spend from debt receipts. The Appropriations Committee does not control contract authority which accounts for a substantial amount of budget authority. Programs such as mass transit capital grants, water pollution control, and the highway trust fund bypass the Appropriations Committee through contract authority. Nor are a large portion of appropriations controllable in any meaningful sense by the Appropriations Committee. The Committee cannot-and properly so cut social security, unemployment insurance or other similar payments. It must appropriate sufficient funds to cover the amount of payment set by law for all eligible recipients who apply.
My proposal addresses this problem by requiring that all new budget authority excepting those for activities with permanent appropriations such as social security, unemployment insurance, payment of interest on the national debt, etc. be made available only through appropriations bills. It also specifies that the appropriations bill shall specify the amount of unobligated contract authority existing at the time of passage of my proposal (contract authority already provided but which the Executive branch has not yet obligated) which may be obligated during the fiscal year. The same provision would apply with respect to unobligated budget authority already available through the State and Local Financial Assistance Trust Fund (general revenue sharing).
Of greater importance, however, the present appropriations process deals only with budget authority rather than with budget outlays. Budget outlays remain the most important measure for any fiscal year in terms of impact on the economy, since outlays represent the actual amount of Federal dollars disbursed from the Treasury into the economy that year. Budget outlays, of course, result from obligations of budget authority (including appropriations), but the actual expenditure may not come until several years hence.
My bill would strike directly at the heart of this problem by requiring the appropriations bill to specify the amount of outlays each year for each Federal program and activity. The amount of outlays for many programs and activities will remain uncontrollable because legal obligations already entered into must be honored as will legal entitlements that have been created. Thus Congresslike the Executive can properly do no more than project estimates of outlass for the fiscal year which will be necessary for social security, unemployment insurance, civil service retirement and other such programs. These estimates will, of course, be subject to later revision. But in many other cases Congress will achieve effective control of program outlays.
With the above reforms Congress as an institution will be on the same footing as the President and his Office of Management and Budget in their consideration of the budget.
The Appropriations Committee would report out only one appropriations bill, and that bill would specify the amount of outlays for each Federal program and activity during the next fiscal year. The total of these outlays must match the total set forth in the spending ceiling set previously.
The Appropriations Committee would follow any procedure it wished, although two possibilities seem most obvious. It could begin its deliberations, after initial full committee hearings, by assigning a target outlay level to each of its subcommittees, which, after their own hearings, would allocate that outlay target among the various programs and activities under the subcommittee purview, Or it could let the subcommittees submit their proposals first, without reference to an outlar target and then, when all subcommittee proposals are submitted, let the full Committee determine which subcommittee proposals to cut or add to in order to equal the outlay ceiling. In either case, the full Committee could report only one bill to the floor. The bill could be in any form. Each subcommittee allocation might constitute a separate title. It must also contain, as part of total outlays, a contingency allowance for unforeseen outlays. These funds would be available pursuant to future appropriations by Congress specifying the programs and activities for which they could be spent.
The bill would have to be reported out of the House Appropriations Committee by May 15 and out of the Senate Appropriations Committee within 15 days after it had passed the House, though it is to be assumed that the Senate Committee consideration of appropriations would begin far before formal receipt of the House bill, as is presently the case. If portions of the bill were not ready at the appointed times, those programs and activities for which specific appropriations and outlays were not included would be reported out with outlays at the same level as the previous fiscal year. This device would provide a strong incentive for appropriations
subcommittees to be ready with their portions by the time the bill must be re. ported out.
The reported bill would contain outlays at the same level as provided for in the outlay ceiling. Floor amendments to the omnibus appropriations bill would have to be "strike out and insert" and the amount inserted could not be greater than the amount struck out. Such an amendment could either specify the acrivities and programs and the amounts for and by which outlays would be reduced, or it could mandate the Appropriations Committee to recommend the appropriate places for cuts subject to floor amendment and approval, Congress could exceed the existing outlay ceiling only by passing an amendment increasing that ceiling.
As I have already observed, it is necessary to build a degree of flexibility into the spending ceiling and priority setting process. The state of the economy may change, emergencies may occur, or projections of outlays for uncontrollable expenditures (such as social security or unemployment insurance) may prove inaccurate. At any time after signing of the omnibus appropriations legislation, the
or Congress could initiate such action itself. The President would specify the activities for which outlays would be increased or decreased to correspond with the change in the outlay ceiling, and he would have to state his reasons for both the change in the ceiling and the changes in specific outlays. The President could also recommend that outlays for specific activities be changed while keeping the total spending ceiling constant. Congress itself could, of course, initiate such changes in the ceiling or in specific outlays without a Presidential recommendation.
Congress could disapprove the President's request completely or it could amend his proposals. However, if Congress did not act upon the President's request within 30 days, it would automatically became law. Provisions would be made for expedited consideration of the President's request through a mechanism similar to that provided for in considering executive reorganization proposals.
The procedure I have just described provides the needed flexibility. Let me illustrate with an example. Suppose Congress had projected outlays of $4 billion for unemployment insurance in the omnibus appropriations bill, but the economic situation had deteriorated and it becomes apparent that outlays for unemployment insurance would be $6 billion. The President could request a $2 billion increase in the outlay ceiling to take account of the increased unemployment insurance outlays. Or he could ask for an increase in the ceiling of less than $2 billion and recommend a corresponding decrease for other controllable outlays. He could request no increase in the spending ceiling, but instead request a $2 l»illion decrease in controllable outlays to match the $2 billion uncontrollable increase in unemployment outlays.
If this legislation is enacted, Congress will have institutionalized a means of considering the budget in a fiscally responsible manner. The President will no longer be able to contend that he must impound funds, regardless of the legality of such an act, in order to assure economic stability. The bill would prohibit the President from reserving (impounding) funds except for technical reasons as provided for in the Anti-Deficiency Act. Under no circumstances could funds he reserved if it would result in impairing the efficient operation of the activity for which obligational authority had been provided or if it would result in not fully carrying out that activity.
Chairman W'HITTEN. Mr. Stratton, it is a pleasure to have you before us.
STATEMENT OF HON. SAMUEL S. STRATTON, A U.S. REPRESENTA
TIVE FROM THE STATE OF NEW YORK
Mr. STRATTON. I appear here this morning, Mr. Chairman, primarily to express my strong support for the preliminary work already done by this Joint Committee as contained in House Report 93-13 and to urge you to continue your work with all possible speed.
Nothing, it seems to me, is more important today to the continued survival and vitality of the Congress as the people's branch of the Federal Government than that we should find the means to achieve absolute control over the Nation's budgetary practices.
As we are all well aware, we have been sharply challenged, if not in fact defied, on this very point by the President of the United States. lleis, in effect, betting that we can't do the job.
Is long ago as 1946, Congress recognized the need for finding a means of establishing congressional budgetary control, as spelled out in the reorganization act of that year. Yet though the need was clear, those ('ongresses were unable to develop the procedures to do the job.
Today the need is far greater and more urgent. This time, as every Member of the House and Senate is aware, we simply cannot fail.
Having spent some time of my own since November 1972, in trying to devise procedures to meet this need, I am intimately aware of just how difficult and complex a job this is.
After some struggle, I submitted legislation of my own, H.R. 2443, which has been referred to the Rules Committee and which I trust has also been brought to the attention of the committee.
I am aware that it does not represent a complete answer to the problem, but I believe it points at least in the general direction we ought to be moving, and I am delighted to see that it does, in large part, coincide with the tentative recommendations set forth in your own Interim Report.
As I see it, there are four basic parts of this problem. The first is to agree, as you have pointed out, on some overall spending ceiling for the fiscal year very early in the congressional session.
The trouble with the 1946 act, and the reason it could never be implemented, was that it required agreement on a whole, detailed congressional budget, similar to the executive budget, early in the session. That, obviously is impossible.
It would require us to go through the whole complex appropriation process to get such agreement, and by then the legislative year is over. Obviously we can't get early agreement on all the details, but we can get agreement at least on the overall ceiling.
This has apparently been demonstrated very clearly in this vear of dramatic fiscal confrontation and showdown by the fact that both Senator Mansfield and Speaker Albert have accepted President Nixon's $269 billion spending ceiling for 1974. The quarrel is only over where we allocate the money within that ceiling, with the matter of priorities. We would have moved a great step toward solving our problems if both Houses today could agree formally and officially on a $269 billion ceiling.
We have something of this sort available today, if you know where to find it, but it is not really adequate for the job.
Thirdly, as you point out-and this is the toughest part of all-we need some device at the end of the legislative vear for bringing all these separate appropriation totals into line under the previously adopted ceiling.
My bill offers one such device-holding up the final bill until the total of them all fits the ceiling. Obviously we can make the cuts all in one bill, we can prorate them through the earlier bills, or we can even raise the ceiling if changed circumstances warrant it.
Fourth, and finally, and this is not touched on in your recommendations unless it is implied in recommendation No. 10, we will obviously need more time to do this more complex and certainly controversial job.
I provide that we slip the fiscal year back to coincide with the calendar year, and thus we will have all 12 months to work out our answers rather than just 6 months plus the chaos of continuing resolutions.
Mr. Chairman, I am well aware that many additional aspects of this overall budgetary problem of which your committee is well aware have not been touched on in my own bill—the attention to revenues, for example, and debt limits; and the problem of backdoor spending and pipeline spending.
These do need thought and I have simply not had the time to work them into my procedural suggestions. But this, of course, is now primarily the job of your committee, and I am confident you have an excellent grasp of what is required.
I am well aware, of course, that the job is not an easy one. Like yourselves, I have for that very reason recommended that this Joint Committee be continued on a permanent basis.
One final point. In the current confrontation between Congress and the White House, the Executive is pictured as clear, precise, exact, and prudent when it comes to budgetary matters.
Congress, on the other hand, is pictured as profilgate, bumbling, inexact, sloppy, and devoid of any capacity for tight management control. Obviously it is the easiest thing in the world for one man to draw up a budget and decide on his priorities. It is quite another matter for 535 men and women, all with firm convictions of their own, operating in two separate bodies, and through involved and complex parliamentary procedures, to agree on a specific budget and a precise set of priorities of their own.
The lean, hard, fast boxer can often outpoint the slow, heavy, ponderous slugger. This is the problem we face in dealing with the Executive today and it is a problem not unknown in other parliamentary bodies over the past few decades.
The answer, I believe, is that we must find a way for 535 men and women to make a clearcut, precise decision with reasonable speed.
The way to do it probably will be for us to delegate a fairly large share of the responsibility to a relatively small group.
Possibly this approach will fly in the face of a new current reformist pressure for open rules and participatory caucus democracy. But the ability of the legislature to act with force and speed is what is at stake here. If parliamentary government goes down, we all go down.
Congress can and Congress must solve this problem. And if it requires that all of us yield a little bit in making it possible this will be a very small price indeed to pay for winning the victory we all seek in the current constitutional crises.
Chairman WHITTEN. Thank you, Mr. Stratton. We appreciate your presentation.
As I pointed out earlier, about 56 percent of the total expenditures do not flow through the annual appropriations process.
If you have a chance to work that out, the committee would be interested in a solution for the 56 percent.
Mr. STRATTON. I recognize that I have not touched on that part of the problem.
Chairman WHITTEN. We appreciate your statement.
Chairman WHITTEN. Now, we have with us Senator Percy. We wish to express our regrets at being caught in a situation which delayed your appearance here.
STATEMENT OF HON. CHARLES H. PERCY, A U.S. SENATOR FROM
THE STATE OF ILLINOIS Mr. PERCY I would like to say at the outset I followed the proceedings of this committee with great interest.
I originally asked Senator Scott to be assigned to the committee but because I was on a trip in Asia I yielded to Senator Roth who could begin work immediately.
I have, however, participated as a ranking Republican on the Government Operations Committee of the Senate in the creation of a new subcommittee for the first time this year, a Subcommittee on Budgeting, Management, and Expenditures. That committee is under the chairmanship of Senator Metcalf and ranking Republican Senator Saxbe, the subcommittee on which I serve.
We held our organizational meeting this morning and I am pleased to report to you, Mr. Chairman, that the first order of business in this comunittee which will have jurisdiction over any legislation in this field for the Senate, the first order of business was unanimously agreed to be to implement the recommendations and reports that come from this very important committee. We have assigned staff. They have been requested to study immediately all of the hearings that you have been conducting and will be anxiously awaiting your final recommendations and, of course, we have already gone over very carefully the preliminary recommendations.
I have a prepared statement and I would ask that the statement in entirety be incorporated in the record.
I would like to say that we hear a great deal about the Congress. We sit here as sort of a helpless giant.
We have seen over a period of vears, I have orer fewer vears than you have, Mr. Chairman, the erosion of power and a part of that erosion is due, I think, to our own fault.
We have the business of running a great Government and we have not conducted ourselves in the Congress, certainly not in the Senate, as a great business should.
I reminded my own colleagues one night in a late session in the Senate that we sometimes remind me of a family with a hundred members in it all sitting there with a family checkbook writing checks, not looking to see how much is in the bank account and not telling each other how much we are writing out.
Ile don't face up responsibly to the fact that we have to match our outcoing with our incoming to know ahead what we are going to do with that difference.
It has an impact on the economy. We have been mistaken. I think this Joint Committee is one of the most important things that I have seen in my relatively brief experience here, to take a good hard look at our procedures noir,
I was delighted that Elmer Staats, a man we all respect greatly, in his testimony this morning seemed to concur with many of the principles of the legislation that I have introduced and have cosponsored with Senator (ranston and Senator Harry Byrd.