He may recognize too, that governments are somewhat more flexible than he They can increase taxes much more easily than he can get a raise. And they in engage in deficit financing, and get away with it for a little while at least. But common sense tells him that no person and no nation can get away with forever. He can ease a temporary imbalance by borrowing money, but he knows must pay it back. The national debt, he recognizes, is similar. There is not, ter all, any free lunch.

So even though there are unlikely to be marches, picketing or street demonstraons, we do have broad public support in our efforts at budgetary reform. Recnizing this, and mindful of our objectives, as stated in the Interim Report, we in undertake the challenging task of structuring the particulars of our reform echanism.

My proposals in this regard are embodied in legislation, S. 40, which I have retroduced into this session of the Congress. I want to make it clear at the outt that I am in no way rigid with regard to the language of this bill; I have no verweening pride of authorship. Solid accomplishment is far more important to e than any particular bill.

Nonetheless, I believe that the structure enunciated in S. 40 is a workable and fective one, very much in the spirit of the general principles of the Interim eport.

JOINT COMMITTEE ON THE LEGISLATIVE BUDGET

Titles I and VI of this bill amend the House and Senate rules to create a Joint ommittee on the Legislative Budget.

A joint congressional committee and a legislative budget is not a new idea. he Legislative Reorganization Act of 1946 enacted both concepts. But the joint ›mmittee under the 1946 act proved unworkable. The 102-member committee as too large and understaffed, and its legislative budget proved unworkable ecause of inadequate time for its formulation. One of the lessons from this xperiment was that Congress simply did not have the professional staff to do ne job required in budget analysis.

The Joint Committee and the Legislative Budget provided in this legislation emedy earlier defects in attempts to reform the congressional budgetary system. A standing Joint Committee with adequate time to formulate a Legislative Budget is provided. This Joint Committee is streamlined to be composed of 8 members represented by three members from the Senate Appropriations and inance Committee, three members from the House Appropriations and Ways nd Means Committees, and three members at large from the House and Senate. o function, this Joint Committee must be adequately staffed.

Incidentally, I should point out this procedure, and the staffing attendant to it, s a normal one in many states. California, for example, provides its State Legislature with a budget review and analysis staff of comparable size to that fforded the Governor. This Review and Recommendations are encompassed in report equal in magnitude to his original proposal.

The Legislative Budget provided in this bill is a viable mechanism, since it stablishes budgetary guidelines with or without formal enactment. The Legislaive Budget is to be submitted to Congress not later than May 31 of each year. egislative and appropriations committee work will not be hindered, but a ystematic analysis of the Federal budget will be made before any expenditure is uthorized or appropriated.

The Legislative Budget is to include (but is not limited to): estimated receipts ind proposed expenditures for the forthcoming fiscal year; the maximum amount of proposed expenditures for each major category of expenditures; five-year rojections of estimated receipts and expenditures in the aggregate and in pro(ram detail for each major category of expenditures; and, a recommendation for reduction in taxes or in the public debt if estimated receipts vary from xpenditures in any fiscal year.

Neither the House nor the Senate is to consider any bill reported out by a ommittee of Congress, unless a statement from that committee accompanies the ill as to whether an authorization or appropriation is within the Legislative Budget limits.

Title I effectively deals with seven of the eleven general principles of the Interim Report, and provides a workable mechanism for their implementation. Within these seven principles, however, there are two points which represent lightly different approaches from that outlined in Title I, and I would like to liscuss each of these:

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1. A portion of general principles No. 3 and No. 5 of the Inter suggest, that "an adequate opportunity" should exist "for review ceilings in the latter part of the sessions." It is certainly true that t be, during the course of any session, developments which would ren spending limitations obsolete. One such that occurs immediately w the case of war.

We must be extremely careful in providing for revisions, howeve initial action become worthless. We must not encourage a condition upward revision for transient political causes. We must not allow a to develop analogous to our ceilings on the national debt, which ha entirely meaningless.

S. 40 obviates the necessity for formal end-of-the-session revisions because it itself does not involve the formal enactment of a rigid e ceiling. Rather, it provides for a guideline, the exceeding of which wou in all instances a statement of the reasons for the excess, thereby b light immediately any violence to the ideal of controlled spending, wi same time guaranteeing flexibility for dealing with crises of great If a more rigid ceiling were adopted, however, it would be my stro mendation that any provision for changing it later in the session requ thirds vote in both houses.

2. General principles No. 7 and No. 8 imply the creation of separate b mittees in each house. S. 40 provides for a Joint Committee.

I prefer a joint committee because it seems to me more workable an The Interim Report suggests a common staff for the two separate co Either is acceptable. With the latter, a staff would be saddled with consuming task of having to report to two masters. Moreover, sepa mittees would almost surely report out budgets that differ in at 1 degree, and would presumedly have to be reconciled by a conference m There the offsetting advantage would lie in an achieved consensus, which must come if our objectives are to be met.

5-YEAR BUDGET PROJECTIONS

In line with general principle No. 6, Title II requires five-year budget p in program detail for every major functional category of Federal spen recognition of the long-range costs of expenditure programs will provid basis for decisionmaking on the part of the Administration and Cong Because of the ballooning costs of Federal programs in years follow enactment, it is no longer acceptable to evaluate and plan expendit one-year horizon.

This title repeals an existing section of the Legislative Re-organiz of 1970 which only superficially attempts to overcome this problem. In Title II provides that the Executive Budget and bills involving spending out by Committees of Congress (except the Committees on Appropri each house) must contain a statement of the five-year projected cost parison of projected costs with estimates by any Federal agency and existing or proposed programs with similar objectives.

The idea of comprehensive five-year budget projections has broad In addition to its recognition by the Joint Study Committee, the Ho and Means Committee has expressed a deep concern for increasing ex levels, and recommended that budget and program expenditures shoul jected on a five-year basis. The Brookings Institution study of the 197 also endorses this idea of detailed five-year budget projections. The from Wisconsin, Mr. Nelson, has been a long time advocate of five-year pr in defense spending.

3-YEAR LIMITATION ON AUTHORIZATIONS FOR APPROPRIATIONS AND CONGR REVIEW OF MAJOR FEDERAL PROGRAMS

Title III requires that all authorizations for any major Federal exp programs (except those funded by user taxes) must expire no less t every three years-this is a zero-based budgeting. The trend today i on to old existing programs without the objective of terminating out-m useless ones. We must force program administrators to justify their e This title requires a detailed evaluation in the last fiscal year of a before further authorization can be made.

There is a concern, expressed in general principle No. 10 of the Interim Report, at annual authorizations are cumbersome and time-consuming, and impede vift action on budgetary measures. I agree. Title III of my bill permits authoritions of up to three years, while at the same time setting up a mechanism or detailed evaluation of each program by the Senate and House Committees ith jurisdiction in that area.

The Committee Report is to contain an evaluation of the overall success or ilure of the program. This report is to include (but is not limited to): a cost⚫nefit analysis of the program; a determination of whether the program obetives are still relevant and whether the program has adhered to its innded purpose and achieved its objectives in solving the problem; whether e program has impinged on the functions and freedoms of the private sector f the economy; the feasibility of alternative ways of dealing with the probm; the program's relationship with similar programs and an examination of elated pending and proposed legislation and private efforts; and whether the rogram will help or hinder any private efforts to solve the problem.

Title IV requires consideration of at least two-year pilot testing of every proosed major program. This will provide a better estimate of costs and would perit a complete evaluation before national implementation.

Today, many Federal programs are no longer forecast in thousands, but ather in billions of dollars. Authorizations and appropriations run for many

ears.

Congress must introduce objectivity in determining which projects are best erved through Federal tax money.

Pilot testing is to be conducted under conditions similar to those if the proram were enacted. Multiple pilot testing is encouraged and the testing is to e monitored by the Comptroller General of the United States.

Each committee in both Houses, after holding public hearings with a thorough valuation, is to submit a report on the results of the pilot test. The report hall include (but is not limited to): the suitability of implementing the proram on a national scale; a cost-benefit analysis; and in the event the proram would change a current method of dealing with a specific problem, a omparison of the current method and the method used in the test to carry out he program.

ANNUAL APPROPRIATIONS

Title V provides that all Federal expenditures-including those made by the trust funds-must be appropriated annually by Congress. Currently there are over 800 Federal trust funds with a permanent budgeting authority that do not come under a thorough annual appropriations review.

Payment of interest on the national debt and refund overpayment of taxes are exempted. Appropriation acts may stipulate that funds made available for a fiscal year can remain available until expended.

CONCLUSION

We use incredible terminology these days. We say that 75% of the total budget is "relatively uncontrollable." Two hundred and two billion dollars relatively uncontrollable."

Social Security. Medicare, unemployment benefits, interest on public debt, farm supports, public assistance * * * all these and more are "relatively uncontrollable."

There are many good programs in these categories, and quite a few bad ones. But even if they were all good, I sometimes wonder how we have the gall to stand for reelection, knowing that we have taken $202 billion from the people, and lost control of it.

It ought to be a scandal, and I believe it is. We have the opportunity now, through the vehicle of S. 40 or a similar measure, to do something about it. If we fail to seize that opportunity, we will have failed the test of fiscal responsibility. We will have failed the American people.

Chairman ULLMAN. Thank you very much, Senator Brock.

Chairman WHITTEN. Thank you, Senator Brock.

I appreciate the benefit of your views and your bill. I think it is headed in the right direction.

There can be many ideas and different views about whe should do it this way and that. The problem with all of u we are going to get a plan adopted and I don't see any easy w

now.

Certainly we need to establish more effective fiscal control country so that we can maintain a stable economy and avoid I wish to congratulate you for your presentation.

I want to say here that I expect to study it more fully. We going to have to get together and decide how we can get the b adopted by the Congress. I think that remains our biggest jo

Senator BROCK. You gentlemen will note in my prepared s I say very clearly I have no pride of authorship. We put a lot of work into this bill but I am not asking that any partic be passed. I simply say there is a desperate need for cong reform as this committee recognizes.

The gentleman from Oregon has legislation that is comm and it isn't a matter of specific contest between ideas. It is a of whether or not we move in the right direction.

Chairman WHITTEN. I appreciate that.

Mr. SCHNEEBELI. I think you are among the forerunners whole area of budgetary control and I congratulate you.

Based on my mail from the various chambers of commerce, say that it has been very well publicized. You say neither th nor the Senate is to consider any bill reported out by a comm Congress unless a statement from that committee accompa bill as to whether an authorization or appropriation is wit legislative budget limits.

I am thinking of the revenue-sharing bill which had a authorization as well as appropriations.

Is it difficult to make a statement as to what might be wit legislative budget limits 5 years from now.

Senator BROCK. Yes, it is. This bill considers that problem a 5-year projection of all bills, whether they are on a 5-year au tion or 1-year authorization. I grant the specific instance t raise.

The fact that we have that kind of problem illustrates the r some structural change. Let's just say I would be delighted to modification of my bill to encompass that particular circumst that we could protect against it.

Mr. SCHNEEBELI. I would assume that a modification would essary because to put it in would require a gradual approach Senator BROCK. Revenue sharing is a new concept. It is one going to have to be tested by the real world and not in theory up Hill. That process is going on now. Whether or not we can c 5-year authorizations, which is a new concept-it may just not realistic to do that at this point.

If it does prove realistic, we should modify my approach account of that.

Mr. SCHNEEBELI. Maybe we can adopt a rule to allow 5-year izations down the road.

Senator BROCK. I suggest 3-year authorizations and I think frankly more logical because it does allow for continuing revie these programs.

Mr. JAMES BROYHILL. To get back to your statement where you xpressed some disagreement with me, I was not necessarily advocatg an actual joining in partnership with OMB in preparation of the udget. But in the original statement Mr. Burns did advocate not only at Congress should become more involved in reviewing the budget, ut he said that perhaps Congress should become involved in the reparation.

Of course, as you well know, under present procedures, all we are oing is going over figures that have been supplied by OMB.

Senator BROCK. I understand that and I very much resent it. I would ke to have our own figures.

Mr. JAMES BROYHILL. Either you are going to have to have a mechnism where we set up our own figures or the other alternative of ctually doing this jointly with OMB or establishing a middle course of having some liaison with OMB.

At any rate, we should have some procedure where the Congress has ore input into this process prior to the actual appropriation process. Senator BROCK. I couldn't agree more.

There is no Member of this body, either body, that I have greater espect for than the gentleman from North Carolina and I very much. ppreciate the point he has raised.

The danger that I see in that kind of merging of the coequal ranches is when you have a very strong Chief Executive, that power ould be translated into further erosion of congressional power, beause the Congress simply does not have a staff of comparable magniude to provide it with alternative choices.

That is the danger that you can get enfolded into the bureaucracy of the OMB with all the computers and staff they have-if you have 10 competing alternative that can give us other choices and other igures.

It could be equally true that we could dominate OMB if we had a ery strong Speaker and Majority Leader in the Senate. But one body s going to suffer in that kind of relationship.

I think the kind of reform we achieve should be one that guarances the integrity of the peoples' branch of Government under such echanisms as are necessary to give us all the facts, all the figures, all he alternatives-so it is truly the legislative branch that does estabish the national priorities of this Nation.

Mr. JAMES BROYHILL. I endorse your idea of the 3-year authorization for legislation. I am one of the members of this committee who is representing a legislative committee, most of the members are from the tax writing committees or appropriation committees. I happen to sit on a legislative committee.

We have established in our committee a practice of 3-year authorization, and have been involved in this for some time. As you well know, there are a number of programs that do have open-end dates only. One area is the regulatory agency.

The regulatory agencies have open-ended authority. I introduced legislation to establish 3-year authorizations for the regulatory agencies.

I think this is an excellent idea and with more oversight authority exercised by various legislative committees