When you can get Senator Cranston and Senator Harry Byrd on e same bill together with Charles Percy, it is either awfully good awfully bad. I hope in this case it is awfully good. We are all after e same thing, to find an orderly process in which Congress can assert itself, but in a way that would be welcomed by the executive anch of the Government. To my friends in business who have joined the executive branch of overnment, I would like to say, because I have the feeling that some the executive branch might have representation here this morning hear the testimony, I was confronted by a businessman who rently joined the administration and he said if I could just operate own here the way I do with my board of directors back in business, I ould have no trouble, and I had to remind him, in my judgment, hough, there is a whale of a lot of difference. You don't have the utocracy that you have in business. All the authorization goes to one man who can be thrown out in idyear or midmonth if he does not perform. You don't do that in Government. We can't look to the Congress to be a board of directors, to be dealt with like a board of directors. I have served on them; fellows jet in, I have done the same thing, for four, five meetings a year. They arrive at 10 in the morning. They want to leave at noon. They vant everything presented in capsule form and the annual budget submitted by management is rarely changed. It is changed when the ed ink at the bottom persists and when you get too many cries from stockholders, but for the most part the board of directors of a company can't be compared to the Congress of the United States. Many Members as they sit and have heard testimony through the years from so many different Secretaries, so many different department heads, they begin to think that these men are the phasing part of government that comes in and goes out, but the Congress persists and stays here, and I think the Congress has a tremendous knowledge and a tremendous expertise that if properly marshaled can contribute to this whole budget process. So the bill that I have introduced-we introduced it last year with Senator Cranston and myself and this year Senator Harry Byrd joined us. We have formed it to conform to what we saw in the recommendations. This would establish a congressional budget process that I think would work. It sets up a Joint Committee on the Budget of 28 members, seven from each of the four committees, the House and Senate Appropriations, the House Ways and Means, and the Senate Finance. Four members to represent the majority, three the minority. They meet at the beginning of the session of Congress and after considering the overall budget situation, the state of the economy, taking into account the President's annual economic report and budget recommendations and the annual economic review of the Joint Economic Committee, the joint committee would make a report to each House of Congress by March 30. The report would contain a recommendation for the maximum amount to be appropriated or authorized for outlays in the coming fiscal year. This recommendation would be based on an estimate of expected buget receipts during the coming fiscal year, and on this basis the joint committee would also make recommendations regarding any necessary increase in the national debt or in Federal income taxes. 93-764-73-9 The report would be accompanied by a joint resolution be introduced in each House or Congress. The joint resc fix an amount for all outlays and budget authority fo fiscal year. If the recommended outlay total were to ex mated receipts, the joint resolution would authorize an in public debt. The joint resolution would also provide for a division amount of outlays among the subcommittees of the Ap Committee and all other committees have the authority outlays. This provision is intended to implement the important r tion of the Joint Study Committee on Budget Control tha priations process should be coordinated with the au process. It also deals with another important problem stemmin fact that there are several committees of the Congress oth Appropriations Committees which have the authority to spending. In brief, this bill would attempt to solve two problem been very troublesome for some time. One is that approp made by a number of committees in addition to the App Committees. The second is that the authorizing committees ofter amounts for programs in current and future fiscal years tha relationship to the real funding needs of such programs ability of the Nation to afford them in any given fiscal year. By assigning to the new Joint Budget Committee the to determine amounts both for budget outlays and for auth the bill would provide for the first time a congressional assigning priorities among programs. We would be creating a new discipline on our budget and tions processes and we would be linking planned expenditur able revenues. The joint committee would not, however, have the abilit such priorities in a vacuum. Then I go on to outline-and I won't take the time now will be incorporated in the record the reasons why I believ procedure we have outlined would adequately fill the bill a ment the work that this committee has carried out. Chairman WHITTEN. We appreciate very much your att your statement and the fact that you have made arrangemen this may be the matter of highest priority in your committ I was intrigued by your statement of experience on boards tors, that they quit promptly at 12 noon. I don't know that t realizes you and I are here at 12:30 p.m. with another commi ing at 1 p.m., and we have to eat sometime in between. [The full statement follows:] STATEMENT OF SENATOR CHARLES H. PERCY Mr. Chairman, first I would like to commend you and the co-cha members of this Committee for proceeding with dispatch to design a system for the Congress. As you may know, Senator Cranston and I introduced a legislat provision as an amendment to the debt ceiling bill last year. Senator Senator Byrd of Virginia and I revised and reintroduced the pr S. 846 on February 8. Our purpose was to design a bill that would implement, to a substantial extent, tentative recommendations that the Joint Budget Committee issued on Febru7 6. The bill would esablish a Congressional budget process that would work as lows: A Joint Committee on the Budget would be created consisting of 28 Members, en from each of four committees-the House and Senate Appropriations Com ttees, the House Ways and Means Committee and the Senate Finance Comttee. Four Members from each committee would represent the majority, and ree the minority. This joint committee would meet at the beginning of each gular session of Congress. After considering the overall budget situation and e state of the economy, and taking into account the President's annual ecomic report and budget recommendations and the annual economic review of e Joint Economic Committee, the Joint Committee would make a report to each ouse of Congress by March 30. The report would contain a recommendation for e maximum amount to be appropriated or authorized for outlays in the comg fiscal year. This recommendation would be based on an estimate of expected idget receipts during the coming fiscal year, and on this basis the Joint Comittee would also make recommendations regarding any necessary increase in e national debt or in Federal income taxes. The report would be accompanied by a joint resolution which would be introuced in each House or Congress. The joint resolution would fix an amount for Il outlays and budget authority for the coming fiscal year. If the recommended utlay total were to exceed the estimated receipts, the joint resolution would uthorize an increase in the public debt. The joint resolution would also provide for a division of the total amount of utlays among the subcommittees of the Appropriations Committees and all other ommittees having the authority to authorize outlays. This provision is intended to implement the important recommendation of the oint Study Committee on Budget Control that the appropriations process should e coordinated with the authorizations process. It also deals with another imporant problem stemming from the fact that there are several committees of the Congress other than the Appropriations Committees which have the authority to reate new spending. In brief, this bill would attempt to solve two problems that have been very roublesome for some time. One is that appropriations are made by a number of committees in addition to the Appropriations Committees. The second is that the uthorizing committees often authorize amounts for programs in current and future fiscal years that have little relationship to the real funding needs of such programs, or to the ability of the Nation to afford them in any given fiscal year. By assigning to the new Joint Budget Committee the authority to determine amounts both for budget outlays and for authorizations, the bill would provide for the first time a Congressional system of assigning priorities among programs. We would be creating a new discipline on our budget and authorizations processes and we would be linking planned expenditures to available revenues. The joint committee would not, however, have the ability to create such priorities in a vacuum. The joint resolution embodying its decisions would be reported by the Joint Budget Committee after it had received the views of many experts and organizations, including the authorizing committees. More importantly, the joint resolution would be subject to approval by a record vote of both Houses. At this point, early in in each session of Congress, the Members of both Houses would have the opportunity to debate and decide on the budget priorities for the coming year. These would not be decisions on line-by-line, or item-by-item programs. Rather, they would be decisions about broad program categories, defined by the number of appropriations subcommittees and the categories or programs over which they have jurisdiction-and other committees with the ability to appropriate, such as Ways and Means and Finance. Parenthetically, I would note that the subcommittees of the House and Senate Appropriations Committees are not similar in number or subject matter. The two committees would probably have to agree on a new, similar structure of subcommittees and jurisdictional areas. During this process the Members of both Houses would have the opportunity to amend the joint resolution, so that they could change the priorities established by the Joint Budget Committee, and even change the recommended outlay ceiling. Differences in the House- and Senate-passed resolutions would be reconciled in conference according to standard procedures. However, until this process had been completed, and the joint resolution adopted, no bill appropriating money or otherwise authorizing budį the ensuing fiscal year could be passed by either House. Neither c mittee report a bill authorizing budget outlays or authorities in limits provided in the joint resolution. And each bill would cont outlays under that bill for the coming fiscal year. The bill realistically contemplates a situation in which changes be made in the initial joint resolution. An appropriations subcomm committee might find that it urgently needs more money for some gram or for some unforeseen need. A natural disaster, such as Hu or a need to create an international famine relief program are g In such cases the bill would provide a procedure whereby the joi would meet again and agree to assign additional amounts of me outlays in the current fiscal year. It would do so by recommending the total amount for outlays in the current fiscal year, or by rec reduction in the budgeted amounts for other subcommittees or co recommendation would be embodied in another joint resolution wh submitted to a vote in both Houses. Finally, the bill authorizes the creation of a new joint committed would include the staff and the functions of the present Joint C the Reduction of Federal Expenditures. At present, the principa this Joint Committee is to issue scorekeeping reports on receipts an and appropriated expenditures during the year. The new Joint Budg staff would continue this function. In addition it would be direc projections of the effect on future expenditures of existing and pr lation, to analyze the budget, to become expert in estimating bu and in problems of debt management and fiscal policy, and in all re come a major, highly professional joint budget staff for the Congre CONCLUSION Gentlemen, I believe that this proposal, and other legislative budg you are studying, are the key to the solution of our conflicts with th Branch over impoundments. Were we to establish a rational, orderly process in which Congressional outlays are related to available e we would not have the undisciplined budget deficits that the Admini used as the main justification for its impoundment of appropriated f There has been some criticism of S. 846, and I am sure other prop ground that Congress somehow lacks the necessary intellectual create a budget for the Federal Government. I suggest that the particular art of budget-making does not reside Executive Branch. All of us have created budgets-either persona budgets, business budgets, or budgets for operation of our committee are essentially judgmental ones-the ability to make judgments relative importance and merits of different, perhaps competing pro We have left the budget job to the President, and over the year veloped and become entrenched in that role. If we provide the nec tutional framework and support it with skilled staff, there is ever expect our spending decisions will be as good, and perhaps better, for than his. This Congressional process would certainly not operate in a vacuu have the President's economic and budget recommendations and al and information his officers may wish to supply. But we would rely system, and our own experts, to weigh and decide for the Nation, as tution intends, the amounts and priorities for the Nation's spending. For some time now we have ceded the powers and prerogatives of to the Executive Branch, until today we are faced with the very r of becoming increasingly irrelevant to the Federal budget process. T told that a President may refuse to spend funds the Congress appr some future date we may be told the President has the power to arbitrarily from one program to another. From there it is but a step that the President also has the authority to raise the revenues to programs he deems worthy. That is why reforming the budgetary Congress is more than responsible or desirable. It is absolutely imp Chairman WHITTEN. We are adjourned until 10 o'clock morning. [Whereupon, at 12:30 p.m., the committee was adjour mi IMPROVING CONGRESSIONAL BUDGET CONTROL THURSDAY, MARCH 8, 1973 U.S. CONGRESS, JOINT STUDY COMMITTEE ON BUDGET CONTROL, Washington, D.C. The Joint Committee met, pursuant to notice, at 10 a.m., in room [114, the Dirksen Building, Hon. Al Ullman, presiding. Present: Representatives Ullman (presiding), Schneebeli, Davis, Griffiths, James Broyhill, and Senator Bennett. Chairman ULLMAN. The committee will please be in order. We are privileged this morning to have as our first witness. Robert P. Mayo, President of the Federal Reserve Bank of Chicago, who is better known to most of us on the Hill as the Director of the Budget for a considerable period of time. He is very experienced in coping with fiscal problems and has had great experience working with the Congress on the budget. We certainly look forward to your testimony. If you wouldn't mind, Paul, are you in somewhat of a hurry? Would it take a great deal of time to present your testimony? Mr. FINDLEY. My only problem is about 11. My part would perhaps take 15 minutes, something like that. Chairman ULLMAN. Perhaps we could hear Mr. Mayo and then hear you before we get into questioning. Then we would get you out of here before 11. Your testimony would be probably not more than half an hour, would it? Mr. MAYO. It will be less than that. Chairman ULLMAN. Why don't you go ahead and proceed. STATEMENT OF ROBERT P. MAYO, PRESIDENT OF THE FEDERAL Mr. MAYO. Thank you, Mr. Chairman. I appreciate the opportunity to appear before you today to add a few words of further encouragement as you undertake the difficult task of finding the most appropriate way for the Congress to reorganize the structure of its Federal Government fiscal policy responsibili ties. My appearance before you today is in the role of a concerned citizen, growing largely out of my experience as a Treasury official, as staff director of President Johnson's Commission on Budget Concepts, and as President Nixon's first director of the Bureau of the Budget. My views do not express any official position of the Federal Reserve System. Nevertheless, as a Federal Reserve official, it is appropriate. for me to note that whatever success the Federal Reserve may be able |