Thank you very much. The committee will stand adjourned [Whereupon, at 12:30 p.m., the committee was recessed, to 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 afte distinguished colleague from Wisconsin, Congressman Her We have been extremely pleased with your membership on Committee. Mr. Reuss, and we are particularly pleased wit posals that you have made and distributed to the membersi ideas have broadened our thinking on this important problen lishing congressional responsibility and budgeting.

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

STATEMENT OF HON. HENRY REUSS, A U.S. REPRESEN FROM THE STATE OF WISCONSIN

Mr. REUSS. Thank you very much, Mr. Cochairman and m the committee.

Conforming to the committee's excellent suggestion. I pr written statement which, under the rule, I would like to subm record. Then I would like to summarize it, adhering to the 1 rule.

Chairman ULLMAN. Without objection it will appear in fi record.

Mr. REUSS. What I have done, gentlemen, is to take the structive recommendations made in your Interim Report of 7 and related to these recommendations what I conceive of a way to accomplish our mission.

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

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

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

I make the suggestion there that shortly after we conver January, the new Budget Committees of the House and Senat start work on a Tentative Budget Resolution. By February 15,

ige 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 rective round.

As recommendation No. 3 says, there should be a procedu lished for reconsideration of these ceilings in the latter par congressional session. Indeed there should be. What I sugge immediately following the start of the new fiscal year on J Budget Committee, first of all with the help of the Joint Committee, would review the boxcar figures. Are the econ mates right? In most years, I think they would not change there is always that possibility. Then these new Budget Co would report out what I call the Final Budget Statute.

This statute would be reported out in early July, it woul whatever changes are deemed to be necessary in either appro measures, nonappropriated spending, or in revenue measu designed to correct any slippages which might have occurr first go-around. The general boxcar figures, the Joint Econom mittee macroeconomic figures would be in title I. Have the tot voted on first, if there is any change from the tentative bud lution. If there isn't any change, you don't need to vote on it.

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

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

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

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

Finally, let me ask what this does to the current grave cont between the President and Congress about impounding. As far a

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

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

I would hope that the general sense of urgency which has pervaded his committee. Mr. Chairman, will continue. Certainly we want to be n 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 scal 1974 budget. I would hope that we could have a reform like this n place by the middle of this year and then maybe go through round wo of it on the fiscal 1974 budget. Thus, and only thus, we will be ble to restore to ourselves the powers that we should never have let lip from our fingers, but which started slipping in about 1965 and ave 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 entative committee report, and attempted to put some flesh on the ones and spell out some of the procedural matters that this commitee 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 leciding 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 von't be pierced by every piece of backsliding we might do on spendng 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 or 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 ll, have to fight it out on the ceiling. This format gives an opportunity 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 ULLMAN. One of the problems this whole procedure poses and the problem that Congressmen 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. B other way of doing this simply because Ways and Means. Fi the Appropriations Committees are really the ones we have t together, and we can't use someone else to require them t gether. It seems to me this is the mechanism for bringing gether, while also getting to the problem of backdoor spend Mr. REUSS. AS I tried to set down these ideas on paper i crunching task which is assigned members, particularly of priations and the tax writing committees. But look at it: this activities to take place between New Years Day, January 1, a 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 should be allowed to slop over. So if Members come back ar tember 10, there are only-particularly in an election ye House, every other year-a few weeks of session left. Eve election years, an effort ought to be made to give Members back in their constituencies in the fall of the year. So if th forth here seems onerous, it is simply because the task of bei gressman and conducting the Nation's business is onerous. I any way out of that, frankly.

Chairman ULLMAN. Right. Congressman Whitten.

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

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

Knowing of your experience I raise some questions here th mind don't go directly to the mechanism of what you propose. my observations that the tax committees are going to be rathe of our turning over any of their rights and prerogatives to a committee. I happen to mention them first, but the same thing to the appropriations and the legislative committees. We h many controversies, you and I, as to who has jurisdiction amo ous legislative committees. I have always urged my colleague committees, don't ever get on the floor and make an argume encroaching on the jurisdiction of the committee. You are goin that one. That has been my feeling about such matters. So you approach it on principle.

Mr own feeling is that the most we can hope to get, and I s myself only, is that the legislative committees might agree resentatives on what you call a Budget Committee. The tax con and the appropriations committees might agree to recomm service on that committee members of their committee.

With such a committee the next question is how are we goin them informed enough, in time enough to set the first target. 1