IMPROVING CONGRESSIONAL BUDGET CONTROL

TUESDAY, MARCH 13, 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 2359, the Rayburn Building, the Honorable Al Ullman presiding. Present: Representatives Ullman (presiding), Schneebeli, James Broyhill, and Senators Curtis, Fannin, Fulbright, and Roth.

Chairman ULLMAN. The committee will be in order.

We are very pleased to have as our first witness this morning the distinguished Senator from California, John V. Tunney, who served over in this body very ably and all of us recognize his capacities. We are extremely pleased. Senator, that you have taken a leadership position over there in trying to develop and formulate this concept of budgeting which, I think, you and I both agree is one of the priorities in this Congress.

So we are extremely pleased to have you here and we are looking forward to hearing your further views.

STATEMENT OF HON. JOHN V. TUNNEY, A U.S. SENATOR FROM THE STATE OF CALIFORNIA

Senator TUNNEY. Thank you very much, Mr. Chairman. It is an honor to be before this committee under your distinguished chairmanship.

I mentioned to you a few moments ago that I had the opportunity to see you on the Martin Agronsky show with Congressman Rhodes and I was impressed by the way that you directed your attention to this critical problem of establishing new procedures so that we can get a handle on the budget.

I think that the work your committee is doing and what you are doing personally is perhaps the single most important order of business, not only in this Congress, but in this decade, because I feel, quite frankly, that if we do not get a handle on the budget that the President—and it makes no difference whether he is a Republican or Democratic President-the President will.

I think that is a subversion of the democratic constitutional process that we had in the past. There is nothing in the Constitution that gives the President the right to have line vetoes. But I can understand why the President is doing it and I sympathize with the President's rationale for it.

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I just think it is wrong from the overall viewpoint of t the Nation, but it is the Congress' responsibility to reform it cedures so that the President doesn't have to feel obliged t cuts himself, impound the funds which he feels are necessary inflation from running rampant in the country.

Now, Mr. Chairman and committee members, thank you for this opportunity to outline my views on establishing a b will meet our national priorities in a prudent and workab

Shortly, I will introduce legislation to implement a firm b ing and explicit congressional priorities. I should like to ou of the procedures I believe are indispensable if we are to assu responsibility for the fiscal integrity of our Nation.

We are faced with essentially two challenges. We must cre procedures for determining and enforcing outlay and obligat ings. We need also to devise methods for reaching early agr the relative priorities of major spending programs.

Both challenges must be met. I suggest they can and shou through processes which involve:

One, the broadly representative participation of the Membe Houses, and,

Two, the most complete and objective information base p To achieve these objectives, my legislation calls for the foll First, establishment of separate House and Senate Budget tees. Each committee shall have 21 members. The composition committees should be proportionately representative of the tion of each House with respect to years of service, political p geographic origin and membership on standing committees.

The decisions of the Budget Committees will be among the portant of all congressional determinations. It is thus impera these bodies also include members from across the entire spe philosophies represented in the Congress.

Second, establishment of six parallel subcommittees within the full committees.

These subcommittees will have jurisdiction over broad areas human resources, military affairs, economic affairs, natural re general governmental administration, and uncontrollable out

Subcommittee memberships should reflect existing member standing committees and should otherwise be representative composition of the two Houses.

Third, several innovations in the information delivery syste No. 1, all executive agency heads should submit their requests to the Budget Committees no later than October 1 requests should include projections of future costs for the next years.

No. 2, all other budget-related information sent by a to the OMB should be concurrently submitted to the Budget C

tees.

No. 3, the President's budget should be transmitted to Cong later than January 1.

No. 4, all standing committees will be invited to subm ommendations for outlay and obligational authorities to the Committees no later than November 1 of each year.

No. 5, the existing Joint Economic Committee should annualy recommend ceilings on outlays and new obligational authority no ater than January 15.

Finally, we need to establish the congressional counterpart of the Office of Management and Budget. The last major section of my bill ccomplishes this objective.

Fourth, procedures for determining ceilings.

Both Budget Committees will hold hearings and consider recomnendations from the executive department, the standing committees, and the committees' staff. After joint consultation, the committees will eport out identical outlay and obligational authority ceilings no later han February 1.

The Houses then vote within 5 working days. If both Houses fail to agree on the recommended or other ceilings within 10 working days after February 1, the ceilings recommended by the Joint Economic Committee become legally binding.

Fifth, machinery for setting priorities:

One, after consideration of all available information and hearings, each subcommittee will recommend to its parent committee a single subceiling for all programs within the subcommittee's jurisdiction. Two, the full committees meeting individually and jointly will consider the subceiling recommendations of their subcommittees. The Budget Committees shall report out a concurrent resolution fixing subceilings for each of the six broad subcommittee jurisdictions no later than March 15.

The sum of these subceilings must equal the total ceiling agreed to earlier. If both Houses fail to agree upon a change in the subceiling by March 31, they automatically become binding. The subceilings thus established constitute the basic statement of congressional priorities. No bills reported to the floor which affect actual outlays or obligational authorities are in order until both Houses approve subcommittee reports.

Since the process I just described is a bit complicated, let me illustrate with a brief example. Assume that the outlay ceiling for fiscal year 1 is $269 billion. The Budget Committees recommend and the Congress approves a ceiling of $279 billion for fiscal year 2. The subcommittees then consider recommendations from hearings, staff, executive agencies, and other standing committees and then recommend subceilings to the parent committees.

In this example, we might find a $5 billion increase in the subceiling for uncontrollable outlays, a $2 billion increase for human resources, a $5 billion increase for military affairs, no change for economic affairs or general governmental administration, and a $2 billion decrease for natural resources.

The net effect is allocation of the $10 billion increase in total outlays in a way which is consistent with changing national priorities and with maintenance of the total outlay ceiling.

The changes illustrated here would, of course, be tentative until approved by both Houses of Congress.

Enforcement of priorities is strengthened by a sixth section of the proposed legislation.

The committee reports which accompany bills reported to the floor should state their outlay and obligational authority impacts and the

sum total of such impacts of all bills approved by Cong major program category. The Parliamentarians will mainta totals of spending authorities already approved in each Whenever a bill might cause the category subceiling to be ex Parliamentarians shall rule that the bill requires a two-thi ity for approval.

Section 7 provides for midsession review of ceilings and Each September the Budget Committees will hold join to consider recommendations from interested parties and staff on possible revisions of the established ceilings and sul After due deliberation, the Budget Committees may re concurrent resolution which changes the established ce established subceilings or both.

If either House fails to approve the resolution, the ceilings and subceilings continue in force.

The last major section of my bill creates a Joint Budget staff, a Congressional counterpart to the OMB, employing and temporary professionals from the business, academic service communities, and working with the help of comp other technological assistance, this staff would have functions.

One is servicing the short-term information and advisor the committees and their subcommittees. The other is the analysis of programs and their future cost directions.

The Budget Committees and their subcommittees will dependent upon the quality of staff assistance. We should, be generous in providing resources for the staff operation.

In closing. I would like to adjust a few additional cor will deviate a bit from the text I have given to you, Mr. Cha

To a very great extent we have heretofore boxed ourse obligating a large portion of future revenues years in advan receipt. I suggest, therefore, that we provide for periodic an tory review of all permanent appropriations, authorizat authorities.

I think, also, that a few additional words on the role of th priations Committee are in order. Under the procedures I hav this morning, the Appropriations Committee will continue vital role in determining the specific distribution of Federa The same is true of the other standing committees which important impact on the setting of priorities through the appropriations procedure.

The Budget Committees perform the critical function of an overview of the budgetary picture. The Appropriations standing committees serve the equally important function o ing judgment and oversight at a lower level of generality.

Clearly, all of these are compatible, complementary a necessary if we are going to have a firm handle on the b process.

I can add nothing more than to reiterate my belief that w ately need a major overhaul of the budgetary and priority nations processes. In summary, we need to create a broad informed mechanism for asserting reason and responsibility in our budget and national priorities.

Chairman ULLMAN. Thank you very much, Senator. You have obously given this matter a great deal of thought and presented to us me very interesting concepts.

Generally speaking, you are following the interim recommendaons of the committee, are you not?

Senator TUNNEY. Very similar to the interim recommendations of e committee and it is an interesting point. We have been working on is now for maybe 5 months ourselves and I think that the interim ecommendations of the committee were good.

I think that the proposal we had developed was quite compatible, f I can use that word, not identical, but compatible and consistent with what the committee in its Interim Report had recommended to he Congress.

Chairman ULLMAN. Yet your proposal provides one system of mehanics for carrying out the basic intent of the Interim Report and the nterim recommendations of the committee. Certainly this is most helpful to us, because we are in the process now, as you know, of attempting to implement procedurally the concepts that have been developed.

We are covering new grounds, introducing new procedures in the Congress, and perhaps stepping on some toes. But we are attempting to step on as few as possible because this budgeting process, as you have pointed out toward the end of your statement, would not limit committees like the Appropriations Committee. In fact it would enhance their functions and their stature in the Congress. The same would be true, I think, of legislative committees.

As a matter of fact, it probably would make backdoor spending devices unnecessary, wouldn't you agree?

Senator TUNNEY. I think so and I am deeply concerned about the backdoor spending devices. I am concerned, quite frankly, the Appropriations Committee only has control of about 40 percent of the budget.

Now, that just doesn't make sense. There is not a State legislature in the country that runs its business, which is a small-functioning system, that way. We don't have any overview of what our spending is and that is because we print the money. But I feel that we have got to have a procedure whereby individual Congressmen and the standing committees at the beginning of the year know what the ceiling is, how much money there is to spend, what money is going to be allocated for their particular area of concern and then they can establish the priorities within that particular area of concern.

But there has to be the overview. I feel strongly that when this overview is developed, it ought to be developed by a committee that is broadly representative of the Congress of each House, both as to party and as to philosophy and to some extent to years of service, although I realize that is more difficult to achieve.

But I think that particularly as to philosophy and party, it is important that it be fully representative.

Chairman ULLMAN. Thank you.

Mr. Schneebeli.

Mr. SCHNEEBELI. I think you have been very helpful by having a timetable here. I have one question.

You say the President's budget should be submitted to Congress no later than January 1. Wouldn't this be a little difficult for a new President, particularly where there is a change in parties, because if there

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