without really having to vote for any hard item on what is g be cut within the ceiling.

In effect, Congress then avoids its real responsibility of de just where the individual items are going to be cut to get down ceiling.

Secondly, Congress then abrogates its judgments over those ties to the President and puts a stamp of approval on it by voti ceiling and telling him to cut.

Thirdly, it encourages irresponsible votes on "back door" aut and on appropriations. Why not vote for big individual item it doesn't mean anythng, and then vote for economy by voting low ceiling?

Fourth, if you go this route gradually you will erode the m of appropriations and legislative action. They will become mo more meaningless, if you have ceilings on the one hand and which add up to more than the ceiling, because the President ing to decide where the money goes. Why not get a good v an appropriation item? Gradually power of the purse will mov down Pennsylvania Avenue. There is no question of it. It that you do it the first year, but over time, I think you will li erode away the concept of responsible appropriations and "back authority because it won't mean anything.

Therefore, to come back to my key point: A process has devised which makes the individual spending actions of the Co consistent with a reasonable total and, conversely, makes sur the total which Congress authorizes and votes is consistent wi individual actions.

In the executive branch, whether you like the results or least that is done. The parts add up to the total, and the whole ess of getting to a budget involves considerations of the tota considerations of parts and they are consistent. You may not 1 but they are consistent.

There are two parts to that process. There are two ke doing it. One is what I will call an "iterative" process. Your cons tion of the parts affects your judgment about the total, and you sideration of what kind of total you want for economic reasons your judgment about the parts. How much can you allow on each If you look at the process in the executive branch, it is a mat continuous revision. There are some rough initial targets for agency, but then the whole process of putting the budget toget a continual revision of that.

The initial targets are revised and the total is revised and affect each other and you are continually revising all the way thr

So you have all sorts of negotiations and appeals and political being used here and there, but in this iterative process you pie parts together until they come up to a total.

The second characteristic in the executive branch, in additi that one; it heads up through the Budget Director and the Pres to one authority with all of the appeals and the negotiations an calling in of your mayor from so and so to make a phone call President. With all of that business it ends up with one man an major staff assistant making a decision, which is easier.

The central problem, therefore, is to get the parts related to the tal. You do it in the executive branch as it all heads up through e man. How can you do that in a congressional situation where u obviously don't have and can't have the same kind of structure? is hard to apply to the Congress.

Who sets those initial targets, if anybody? As actions are taken on ch appropriation or on other spending authority, who reconsiders id revises and tries to keep this within the total or modifies the total suit the parts? This is the problem.

I think I am fairly good at setting up the problem. I am not so od at suggesting a solution. But let me try.

I don't suggest this as an easy solution, but it is the kind of thing ou have to think about.

As I say my whole thrust is this business of relating parts and totals. I am wrong about that, nothing of this follows. But if I am right out it, these are the kind of things you have to think about.

I am going to refer to what I call a budget committee, but I am not oing to describe it. It is not my business and I don't know enough out who should make it up, but let me assume there is a Budget ommittee in each body. From now on I will call it a Budget Committee nd I don't know enough to say how it should be set up.

The Congress first gets the President's budget. The staff of the udget Committee makes an analysis. That analysis has the following ements in it. What does the President's budget request? What does request for each of the 13 appropriation bills? What is in it for each ppropriation bill? What does it have for social security increases, or he GI bill of rights?

So what you then have is a translation of the President's budget into is implications for each congressional committee which affects pending.

Next the Budget Committee proposes in the form of a resolution target for overall expenditures and revenues for that fiscal year. t goes to the floor and it becomes a congressional action setting the eiling.

Second, the Budget Committee, on the basis of its analysis, specifies or expenditures and for revenues, the difference between its recommendation and the President's recommendation. Let me take an examle. Suppose in a given year, after looking at the economic situation, he fiscal situation, this Budget Committee suggests an expenditure eiling which is $3 billion higher than the President's. It could be $3 illion lower, but let me for the moment, say it is $3 billion higher. In effect then, Congress has $3 billion worth of leeway in terms of he sum of all of its individual actions relative to the President's -udget. As each committee action which affects spending, through appropriations or any other action, is reported to the floor, the Budget ommittee issues an accompanying report which tells the extent to hich that action exceeds or falls short of what is implicit in the President's budget.

Again let me go back, and suppose that the ceiling allowed a $3 bilion leeway. You would be coming along with a social security action which might add $2 billion, and say you had an increase in veterans ntitlements which added $2 billion and right on down the line, and ou would see what each action did in terms of that total.

As the session proceeded there would be a cumulative count. where it gets tough. Near the end of the session let us assume t total actions taken by all of the committees and passed by each exceeded the President's budget by $5 billion. The ceiling th started with exceeded it only by $3 billion. You have $2 billion to cut out of individual items or to raise the ceiling.

Reports have been made on each bill as the session goes along the Budget Committee would present a final budget bill which pi specific amendments to prior actions necessary either to adj parts to the ceiling or adjust the ceiling to the parts or some co tion of both. In the above example, you would have to cut $2 if you want to stay at the same ceiling.

You might postpone social security effective dates for 3 r and you might cut another half billion dollars from HEW fense. Or you might decide the economic situation had change you might want to change the ceiling, but the final bill would cile the two-the parts and the ceiling.

Next that final budget reconciliation bill could be amended floor, but any amendment would have to carry the following c teristics. If anyone wanted to amend it, for example, saying, "I like your postponing that social security action for 3 months, would add half a billion dollars to the budget.

However, that amendment to be in order would have to be a panied by a companion amendment cutting an equal amount elsey or providing for an increase in the ceiling.

What this procedure really does is simply say you have to your choices explicit. Congress goes through and sets a ceiling, it can modify later, but it sets a ceiling. You keep a record of the individual actions go forward, how each affects the ce and at the end of the process the sum of the parts and the ceilin not likely to be in consonance. The Budget Committee would pro way of making them consistent through a reconciliation bill, w combination of specific amendments to prior actions or an amend to the ceiling, or a combination.

When that reconciliation bill got to the floor, Congress is per free to amend it, but for an amendment to be in order it would to be a consistent amendment, either proposing cuts elsewhere must explicitly raise the ceiling, which puts the heat on anybody wants to add something, to say, "Well, I am willing to increas total or I am going to face up to the necessity that we cut elsewh What this alternative proposal would do is provide an inform system so everybody knows how individual actions affect the ce as the year progresses. It would provide a mechanism to recom how the sum of individual actions could be reconciled to the total. finally, it forces anyone who wants a different set of priorities explicit about it. If you want to add more, then you either cut s where else, or face up to the necessity of increasing the total.

This process of reconciling parts and whole deals with the ex tive on grounds of equality, in which the Congress, like the Execu ends up wtih a budget which explicitly sets out priorities fo dividual items consistent with an explicitly chosen total. This up a congressional budget which is consistent.

Eventually, along with all of this, it seems to me critical that this 1get Committee, through its own judgment and its staff, provide continuing flow of longer run projections so that you know what sum total of your action is doing, and not just for this year, which ot of your actions don't impact anyway, but in 1975 and 1976 and 7. Because, as I say, 85 percent of the budget is locked in and the son it is locked in is because of what someone did 1, 2, or 3 years

One of the secrets is to know what you are doing when it really ints, which very often is not this year, anyway.

When I suggested that particular proposal, it wasn't so much to say it is necessarily a viable way to do it, but to indicate the problems it you do face in trying to reconcile parts to the total. There are a of alternative ways to do it.

I have addressed myself to expenditures and not to the revenue side. itially, in deciding on a ceiling whatever mechanism you set up to do whatever the name of the committee or the makeup of the committee the joint group, whatever it is, we have to take into account first the vel of expenditures and, second, the relation of that level of expendires to revenues. This means that presumably what the committee ould recommend would be first an expenditure ceiling, and, second, t binding but as a recommendation, an aggregate amount of tax tion consistent with that ceiling on expenditures.

By that I mean, for example, one might look at the economic situaon and say this year we believe it would be desirable to end up, for ployment reasons, with the Government spending $2 billion more an the President recommends, without raising any additional taxes. another year on examination of the budget we might find that we e going to aim for an expenditure ceiling of so and so, and think controllable expenditures are rising so rapidly we might not make is, and therefore might recommend to the Ways and Means Commite that they consider a contingency tax plan which would raise $3 llion.

In other words, in setting the initial expenditure ceiling one would ave not a binding but a guidance statement which goes to what this plies for the revenue side of the budget.

I assumed, when I went through this, that if you set the expendire ceiling, what you really do is set it with respect either to saying o change in taxes, or with respect to an explicit statement as to hat this implies for changes in taxes. Obviously, that will vary from ar to year depending on the economic situation and depending on hat has actually happened to expenditures.

Suppose you started with a given expenditure number and found at as the year proceeded you would be substantially exceeding that imber and it turned out that you make a judgment, that you are ot going to be able to make enough end-of-the-year reconciliations nd cuts to stay with it. You may have that Budget Committee, someThere about the middle of the year, issue a report saying that it now pears as if there may be some need for a tax change.

In other words, this may be something that you do at the beginning the year and it may have to be done as you proceed, because in some ses you don't know until you get part way down the year.

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What I am saying is that when you make your recommend with respect to expenditures, you simply make explicit the re ship of that to taxes. I happen to think in certain periods of ti may want to run a deficit. All I am suggesting is that when y the ceiling you set it with explicit recognition of taxes, and yo agree with the President.

It seems to me one of the major problems is that what affects ing is partly appropriations and partly a whole batch of other a If the human mind were capable of dealing with everything once, you could wrap all of those up into one bill, fine. But I really feel the human mind is capable of doing that.

Now, I hate to get in a position of pushing one suggestion, 1 mean that, but it seems to me one of the things to keep in mind i can you leave the existing committee structure without radical cl in order to get anything accepted and have a mechanism so that how you would adjust those individual actions to an explicitly total.

Now I come very close to what some have in mind in the sugg of an omnibus appropriations bill. I think even though the vidual actions would go ahead. Because I don't think you can wa lump social security and black lung disease appropriations all in thing at the end of the year. But I think maybe what you can do i even though individual bills go through and get passed, you put body on notice that they are really in suspense, and at the end year you are going to need a reconciliation bill and that consi adjusting those piecemeal actions to the total.

Then you can deal with a limited number anywhere from 5 modifications which will do that.

Now the one thing you have to remember is that it is impossil look at any given $1 billion spending item and say, "Does that b break the ceiling?" That billion is only one item in and of itself can't look at it and say that it breaks the ceiling. Maybe the Do Subcommittee has cut the appropriation and you have room. M they have added an appropriation and a billion somewhere else y doesn't break the ceiling. When you add the two together you the total. So I am suggesting that you need somehow, some w have reconsideration.

The really radical step I am suggesting is that this Budget Imittee would have the authority to propose amendments at the of the year which would affect any bill which directly affected s ing. It couldn't amend a purchase authorization bill which ha backdoor authority in it. You might authorize but if it has no door authority the Budget Committee has no rights over that a bill which has back door authority in it, a social security bill, which increases veterans' pensions, an appropriation bill, any which directly requires or directly authorizes spending you affect. That is admittedly radical.

Let me try by illustrating this year what I think you are goi be faced with, which illustrates what you have to go through. going to be making the numbers up and they may be roughly i right ballpark. I think the President is going to send up a b which will show for the fiscal year 1974 what is called the ful ployment balance. The expenditures will be roughly equal to

revenues would be calculated under accumntiona