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Also in that same ballpark it is probably going to mean $270 billion expenditures and $270 billion in revenues. But in order to get those expenditures at $270 billion he is probably going to have $3 or $4 billion increase in the Defense Budget for a lot of different reasons, and there is going to be a huge increase in social security automatically coming through, and in order to hold to $270 billion he is going to have actions which add up to $8 or $9 billion worth of cuts in domestic programs.
Now it seems to me if you are getting at a ceiling I think you have to recognize that without having had long-range projections so you know where you are going from prior years, you can't do it all at once. You may very well end up the first year by saying maybe from an economic standpoint the President is roughly right, we ought to have expenditures in balance with revenues.
On the other hand—I am just suggesting we look at what is going to happen-there isn't much hope for cutting in the first year more than $3 or $4 billion out of Defense. Then we would be left with approving the President's cut of $5 or $6 billion in other areas and/or suggesting a tax increase.
Now, quite frankly, in this first year we think we need more leeway and in the first year we are going to set a ceiling which is $3 or $4 billion above the President without raising taxes, and we are going to have to cut some to get through, not quite as much as he has there, and we don't think more is do-able. That is an example of how you might arrive at a $273 billion or $274 billion budget.
I think just setting an expenditure ceiling and not making your procedure clear is dangerous. What I have been trying to look for is something which will allow the Congress to vote on individual items but have full knowledge of what that is doing to the total. That is the essential problem, I agree with you. Ultimately you have to turn the water off or water down and not put your hand at the end of the spigot, which you are doing with a simple expenditure ceiling.
What I am saying is you need to make a decision on two things : How much water do you want flowing from the spigot and what do you have to do to get the right amount of water coming out. It is not easy for somebody to decide that. For example, I am a moderately willing spender myself, but nevertheless it is easy for someone to jump up and down and say, "I want absolutely full funding of the pollution control bill," and that alone is not going to wreck the economy. But full funding of pollution control and full funding of higher education, etc.? And as for the President, we don't like his domestic cuts and yet we really can't cut a lot out of the defense budget. Each one of those may be perfectly reasonable by itself. I think the higher education bill ought to be funded. But that isn't the point. It is how you tell the Congress, “you have got to make up your mind on both the total and you have to fit your individual actions into it.”
You have to watch NOA, but you have to know what it does to your totals. Fifty percent of obligational authority is outside the appropriations committees. Even if you had an Appropriation Committee which presented one bill, for example, and would have the chance to vote for it all at once, it won't do the job. A lot of spending doesn't come from there, anyway. You have to put the two things together.
I have a couple of more points to make, one of which I have not fully thought through, but I just raise the point. That is, if you devise any procedure which attempts to reconcile individual items to what you want in total, I find it hard to believe you can devise such a procedure which won't have some major sort of reconciliation bill coming along near the end of the year. What does this do to the timing of appropriations? It is late enough now.
It seems to me that as part of this problem we have to look at the whole relationship of the authorization process to the appropriation process.
There are a number of things that maybe could be done, but I find it very difficult to believe one can get hold of this if there aren't some procedural changes to make sure that that final reconciliation bill is on the floor not much later than August.
The Executive can live with a couple of months of continuing resolution if it is policed, but you can't really live with all of this going through to November each year.
Next, I would urge your attention in this area to the hearings and report of a committee chaired by Jack Brooks on the calendar-year budget.
I don't want to go into that now, but that committee went in with five out of the seven members having sponsored a calendar year idea, and when they listened to all of the testimony, they reversed themselves and voted against it.
I think you have to think about timing procedures. One suggestion I have always liked, and it is easy to like if you are not in Congress, is that after a certain date any appropriation bill is in order, even if an authorizing bill has not been passed (and you don't have to make it June 30, you can slop over some).
Secondly, I think it is worthwhile considering making all authorizing bills, subject to some special exceptions, take effect only a year later. In other words, normally in this session you authorize for programs to begin in effect the next year, which means all the money committees are not under that terrible gun of having to wait until all of the authorizing legislation is there.
In a few cases you will need special exceptions. There is no reason in the world, it seems to me, that this really couldn't be done in most cases, because necessary programs are not such that one couldn't take care of emergencies this way.
Again I am a little reluctant to be specific. But the timing problem has to be addressed. You will just be filled up to November and December and then you are in trouble.
Where it is regularly authorized, as NASA and AEC are authorized, and I don't mean something that you have never done before, but these are the regular authorizing bills each year, an appropriation bill might be in order if an authorization is delayed. I don't mean a new program, but I do mean regularly recurring programs. It seems to me, by a certain date you have to have them through. That could really be handled if you would authorize a year in advance.
I want to make two points about revenues. One, as a general proposition I don't think the Treasury Department estimates of revenues tend to be that bad within the context of human ability to forecast the economy.
Second, the Congress is fortunate in having, I think, in the Joint Internal Revenue Committee a very good staff, very capable of doing
this. They do issue reports, sometimes second-guessing the Treasury, and clearly this is a better job. Both revenues and these uncontrollable expenditures are involved.
So my own view is that estimating revenues is always going to be a terribly difficult problem because you have to forecast the economy and a number of other things. But, it is probably not done badly in the context of human fallibility. I don't think there is a general bias or you get generally lousy estimates out of the Treasury.
In particular I think you already have the capability of giving them à very good review and coming up with the best estimates human knowledge is capable of giving, in terms of just estimating what are our tax laws going to yield us this year. You will make mistakes all of the time, but given the limits of human knowledge, I am not sure I have a better way of doing it.
Returning to the spending ceiling, it seems to me what you are really doing, you are voting money, and the spending flows from that, and the total spending ought to be based on two things: On the one hand it is an estimate of what the spending consequences in your individual NOA actions are going to be; and, secondly, it is an economic target.
It seems to me that the whole point of this is not for the Congress to pass and have the President approve a spending total inconsistent with its individual actions. Therefore, I think if you have a mechanism which lets you know, and you have to take action on the spending consequences of each bill, that is enough.
Because what you are really saying is, "Here is what we are aiming for, and this number up here is just an estimate," and what we want to do is make sure our individual actions produce consequences consistent with that overall ceiling. If you have your actions consistent with the ceiling, I don't think it is quite so important whether the President approves it or not.
There is one other point that I have not stressed, and I would like to end, if I could, with stressing it.
Two to three years ago you could do a projection and roughly predict where you are now on expenditures. Also some very large percentage of your actions don't affect spending this year but in other years.
Ultimately, it seems to me, to go along with whatever you do, you need an information system which at least lets the Congress know. You start a nuclear carrier, $100 million for the reactor, but you are basically committed for a $2 billion enterprise. It is possible and feasible with a modest-sized staff to keep up with things like this, to feed the Congress not only with the kind of information we have talked about, but also with what is equally critical in 1975—how is a particular action going to look in the total picture then.
HEARINGS OF JOINT STUDY COMMITTEE ON
TUESDAY, MARCH 6, 1973
Washington, D.C. The Joint Committee met, pursuant to notice, at 10 a.m., in room 1114, the Dirksen Building, Hon. Jamie L. Whitten and Hon. Al Ullman presiding.
Present: Representatives Whitten (presiding), Ullman (presiding), Rhodes, Čederberg, Sikes, Schneebeli, Griffiths, James Broyhill, Rostenkowski, Mahon, and Davis and Senators Bennett, Proxmire, Long, Young, Roth, Fulbright, and Pastore. Chairman ULLMAN. The committee will please be in order.
The Joint Study Committee on Budget Control was established last year in the Debt Ceiling Bill. This committee is charged with the responsibility of examining the fiscal procedures of the Congress and with bringing back to the Congress recommendations for procedures that will establish some budgetary control on the fiscal activities of the Congress.
This is an assignment that is terribly important in view of the problems of the Nation and one that this committee is taking very seriously.
The committee was organized at the beginning of the 93rd Congress, and, after deliberations, has issued an interim report that makes tentative recommendations for the establishment of a separate budget committee in the House and in the Senate. It recommends procedures that would require this budget committee to bring to the Congress early in each session a budget that encompasses revenue objectives and expenditure limitations that would be operative on the legislative authorizations as well as the appropriations. Procedures would be established whereby the Congress could stay within the limits set forth by the committee.
In other words, what we hope the interim report will lead to is to give the Congress an opportunity to establish a congressional budget, and to set up procedures in the Congress to fit the parts into the whole in such a way that we could stay within the budget limitations.
My colleague, Congressman Whitten of Mississippi, is the Cochairman of this committee and we share this important responsibility. I would like at this time to call upon him to make a few appropriate remarks.
Mr. WHITTEN. First, may I say it is a pleasure to serve on this Joint Committee and I think if you look at the list of the membership you will agree it reflects a most experienced group and represents