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Thank you very much. The committee will stand adjourned.

[Whereupon, at 12:30 p.m., the committee was recessed, to reconvene at 2 p.m.]

AFTERNOON SESSION Chairman ULLMAN. The committee will come to order. We are very pleased to have as our first witness this afternoon our distinguished colleague from Wisconsin, Congressman Henry Reuss.

We have been extremely pleased with your membership on this Joint Committee, Mr. Reuss, and we are particularly pleased with the proposals that you have made and distributed to the membership. These ideas have broadened our thinking on this important problem of establishing congressional responsibility and budgeting.

You also have a reputation as our congressional economist and therefore we doubly appreciate your taking the time to appear before the committee. We are very pleased to recognize you, sir, and look forward to hearing your views.

STATEMENT OF HON. HENRY REUSS, A U.S. REPRESENTATIVE

FROM THE STATE OF WISCONSIN Mr. Reuss. Thank you very much, Mr. Cochairman and members of the committee.

Conforming to the committee's excellent suggestion, I prepared a written statement which, under the rule, I would like to submit for the record. Then I would like to summarize it, adhering to the 15-minute rule.

Chairman ULLMAN. Without objection it will appear in full in the record.

Mr. Reuss. What I have done, gentlemen, is to take the very constructive recommendations made in your Interim Report of February 7 and related to these recommendations what I conceive of as a good way to accomplish our mission.

Because I think those are simply excellent recommendations by the committee on February 7, I didn't have any great trouble in finding pegs to hang the various thoughts that I might have on. So I will start right out by referring first to recommendation No. 7 of the study committee, which says: “Let there be some sort of committee or organization to carry out congressional budgetary control.”

I thoroughly agree. What I have suggested, and others have suggested, is that each House have a budget committee which would be composed of about the same sort of members that this interim study committee has-namely, it would be mainly composed of Appropriations Committee, Ways and Means or Finance Committee members, with perhaps a couple of members from other committees, one for the majority and one for the minority.

Recommendation No. 1, of the interim report-I have changed the order around a bit to present this thing chronologically-says that there should be a mechanism for determining spending and revenues the first time around.

I make the suggestion there that shortly after we convene every January, the new Budget Committees of the House and Senate would start work on a Tentative Budget Resolution. By February 15, I envisage that they would have in hand from the Joint Economic Committee a recommendation of what kind of a budget deficit or surplus or balance is needed to produce our national goals of maximum employment, production, and purchasing power.

Here we turn to recommendations 2 and 4 of the February 7 report. These recommendations should cover not only authorizations and appropriations handled by the Appropriations Committee, but also backdoor spending, mandatory spending, any other kind of spending, because the net effect on the budget is quite the same.

I envisage that the Budget Committees— let's start with the House side because that side should act first-would block out on about February 15, with the advice of the Joint Economic Committee, the general outline of the necessary deficit or surplus and then would do two things. First, it would ask the Appropriations Committee to make tentative allocations to each of its 13 appropriations subcommittee categories. Second, to determine spending not subject to appropriations, it would consult with the appropriate legislative committees. After that consultation, the Budget Committee would bite the bullet and report to the House by March 1 a concurrent resolution. The resolution would not require Presidential signature, since this time around it is purely internal housekeeping, setting the total figures, blocking out the target figures for each of the 13 appropriations subcategories, blocking out spending limits for all the backdoor spending, and blocking out the total revenue goal.

This could be called a Tentative Budget Resolution and it would be fully debated on the floor, where, in both the House and Senate with our proposed new rules, amendments are permitted.

After the usual procedures the resolution would go to conference and should be adopted by April 15. I realize that this is putting quite a burden on us all, but to get our job done in time, we have to adopt this kind of hurry-up schedule.

Recommendation 5 says that procedures should be developed to assure compliance with the expenditure and budgetary ceilings. On the first go-around it would be up to the Members themselves to secure conformance with the Tentative Budget Resolution ceilings and targets. Any appropriation or legislation departing from the original recommendation would have to contain a provision specifying the amount by which it exceeds or falls short of the tentative target amount. There is no penalty for departing from the targets at this time. It is a little more complicated when you deal with nonappropriations, socalled backdoor spending. The Tentative Budget Resolution would contain a provision asking the appropriate legislative committees to carry forth the will of Congress by May 15.

Now, if that isn't done, we would have to empower the Budget Committee to bring the necessary legislation directly to the floor if nothing has been done by the legislative committee by May 15.

The Budget Committee would have to get a rule, as for anything else. There has to be some way of getting backdoor spending on the floor for a vote and this seems to me an appropriate way to do it.

On revenues, it seems to me that since the Ways and Means Committee would take up such a large and important part of the new Budget Committee they would probably respect the May 15 target deadline, so that legislation could start moving by late May. If they didn't

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however, the lapse would be made good in the second round, the corrective round.

As recommendation No. 3 says, there should be a procedure established for reconsideration of these ceilings in the latter part of each congressional session. Indeed there should be. What I suggest is that immediately following the start of the new fiscal year on July 1, the Budget Committee, first of all with the help of the Joint Economic Committee, would review the boxcar figures. Are the economic estimates right? In most years, I think they would not change much but there is always that possibility. Then these new Budget Committees would report out what I call the Final Budget Statute.

This statute would be reported out in early July, it would specify whatever changes are deemed to be necessary in either appropriations measures, nonappropriated spending, or in revenue measures. It is designed to correct any slippages which might have occurred in the first go-around. The general boxcar figures, the Joint Economic Committee macroeconomic figures would be in title I. Have the total figures voted on first, if there is any change from the tentative budget resolution. If there isn't any change, you don't need to vote on it.

Then you get to title II and there anybody-any Member who doesn't like the admittedly tough job that the budget committee has done-is enabled, under the new rules, to offer an amendment. For instance, suppose I don't like the assumed $3 billion cut that the budget committee has made in the education appropriation or in an urban renewal piece of backdoor spending. I think it is $3 billion too small. I can't just put in an amendment at this stage to up it $3 billion, because that obviously would destroy the whole budgetary control. The only amendment I can put in is an amendment to up education $3 billion but find that $3 billion in some other way; either cut defense and military spending by a total of $3 billion or cut defense $1 billion and raise $2 billion in additional taxes.

I would then have my time at bat with that amendment. If I won, that then would become a fiscally responsible part of the final budget statute. Whatever interim actions taken thus, would not destroy the overall balance. Then, finally, when the amendment process is through, I and every other Member gets an opportunity to vote on the final budget statute, which, whatever its composition, would be in a fiscally responsible position. Therefore, though I am by nature inclined to vote in favor of high appropriations for social budget matters, I would have had my dav in court earlier and the final question confronting me is solely and simply this: Am I going to vote for a fiscally responsible budget, even though I may not like its composition.

That differs markedly from the present situation where I could vote with little check or hindrance late in the year for increases of programs I like, even though I have been able to do nothing about decreasing other programs or tinkering with taxes in order to make my position fiscally responsible.

That is about it. The beauty of the procedure is that it does give Members a chance to vote for a responsible budget after they have had a full opportunity to work their will on individual spending—appropriation or nonappropriation and revenue bills.

Finally, let me ask what this does to the current grave controversy between the President and Congress about impounding. As far as I am

concerned, it would make impoundment, relatively speaking, a dead issue. Under this procedure, the Congress would have to proceed responsibly. It wouldn't give the President the excuse that we now give him to impound; the President can now say—and does--that Congress is, if not overappropriating, at least overspending.

If, however, we make our reform and control spending, considering appropriations and revenues all together, then if the President tries to interfere with the responsible judgment of Congress, constitutional questions aside, he would have such a wave of public opinion against him that I don't think he could get away with it, and I don't believe he would try.

I would hope that the general sense of urgency which has pervaded this committee, Mr. Chairman, will continue. Certainly we want to be in good shape for the fiscal 1975 budget, but I do not give up hope that we can work a reform in time to take at least a partial bite on the fiscal 1974 budget. I would hope that we could have a reform like this in place by the middle of this year and then maybe go through round two of it on the fiscal 1974 budget. Thus, and only thus, we will be able to restore to ourselves the powers that we should never have let slip from our fingers, but which started slipping in about 1965 and have been slipping faster ever since.

Chairman ULLMAN. Thank you very much, Mr. Reuss. You have been very constructive in your procedure by taking the items from our tentative committee report, and attempted to put some flesh on the bones and spell out some of the procedural matters that this committee is going to have to decide on. .

You have raised a number of possibilities that we will seriously consider.

Wouldn't you agree that the biggest problem that we have is that of deciding priorities, and putting a tough ceiling on spending. How can we develop procedures in the Congress that are hard, fast, and binding and will require us to make decisions on priorities? This is our No. 1 problem. Wouldn't you agree?

Mr. Reuss. I do. That is it, to get a ceiling that is meaningful and won't be pierced by every piece of backsliding we might do on spending or revenue bills, while at the same time allowing Members and the proposed new committees the maximum possible role in deciding priorities within that ceiling.

You see, as I have said many times since I have had the honor to be named to this Study Committee, a proposal like this is neither liberal nor conservative. It doesn't favor either side. It simply says the liberals and conservatives, the people who want to spend on one thing and the people who want to spend on another thing, or don't want to spend at all, have to fight it out on the ceiling. This format gives an opportinnity which I feel is fair to both sides and will reflect whatever ideologies the voters of this country send down to Congress. But neither conservative nor liberal can make a case that it makes sense to have a budget that is out of control. That doesn't do anybody any good.

Chairman ULLMAX. One of the problems this whole procedure poses and the problem that (ongressmen Whitten and I face, is the fact that we have other committee responsibilities. We are borrowing the ranking members from the Appropriations and Ways and Means Committees, in order to put together the budget. We may well be running out of manpower or time in order to accomplish the purpose. But I see no other way of doing this simply because Ways and Means, Finance, and the Appropriations Committees are really the ones we have to put back together, and we can't use someone else to require them to come together. It seems to me this is the mechanism for bringing them together, while also getting to the problem of backdoor spending.

Mr. Reuss. As I tried to set down these ideas on paper it is a bone crunching task which is assigned members, particularly of the appropriations and the tax writing committees. But look at it: this envisages activities to take place between New Years Day, January 1, and August 10, when we go on a 1 month summer recess.

It's got to be done, it seems to me, by August 10. I don't think it should be allowed to slop over. So if Members come back around September 10, there are only- particularly in an election year in the House, every other year—a few weeks of session left. Even in nonelection years, an effort ought to be made to give Members some time back in their constituencies in the fall of the year. So if the task set forth here seems onerous, it is simply because the task of being a Congressman and conducting the Nation's business is onerous. I don't see any way out of that, frankly.

Chairman ULLMAN. Right. Congressman Whitten.

Chairman WHITTEN. In the first place, may I say to my colleague in the years I have served with him he has proven himself to be a student not only of government but of many other matters, including financing. He has views of his own. We all have them, but it is a pleasure to have you come before us, and discuss the mechanics as you have spelled them out here of what you think would help to bring the overall budget under legislative control. I find there are many features of it with which I agree.

I am prone to point out the other side of most anything, when the first man measures his fish first. I have felt as a practical matter that the biggest problem we have is one to limit ourselves to the possible and that means as perfect as your plan might be, how do we get it adopted.

Knowing of your experience I raise some questions here that in my mind don't go directly to the mechanism of what you propose. That is, my observations that the tax committees are going to be rather jealous of our turning over any of their rights and prerogatives to any super committee. I happen to mention them first, but the same thing applies to the appropriations and the legislative committees. We have seen many controversies, you and I, as to who has jurisdiction among various legislative committees. I have always urged my colleagues on the committees, don't ever get on the floor and make an argument about encroaching on the jurisdiction of the committee. You are going to lose that one. That has been my feeling about such matters. So you have to approach it on principle.

Mlv own feeling is that the most we can hope to get, and I speak for myself only, is that the legislative committees might agree on representatives on what you call a Budget Committee. The tax committees and the appropriations committees might agree to recommend for service on that committee members of their committee.

With such a committee the next question is how are we going to get them informed enough, in time enough to set the first target. This was

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