The Interim Report has been of particular interest to me my long service in the Bureau of the Budget where we fac the same problems to which the committee report has addr

It was not until after World War II that the Bureau of gave much attention to looking at the budget as a whole relating of revenues and expenditures in the budget. previously handled separately.

It was also during this period that the Bureau and dent began to consider establishing overall priorities t budget process.

Although the Employment Act of 1946 gave impetus t ing overall priorities, it wasn't until the early 1950's th formal systematic plan was developed within the execut to establish overall obligational and expenditure targets i stages of the budget formulation process and to allocate these targets to the major agencies as a way of establishin within such a target figure.

One very important consideration throughout the proce the extent to which an increasing portion of the budget h relatively fixed in any one budget year.

These came to be known as fixed costs or, as others prefe it, relatively uncontrollable items.

Obviously, the extent to which program costs are fixed trollable depends upon what time period one is discussing. with respect to any one year a large part of the budget is change for the reasons which the Interim Report of the J Committee has already well documented.

This fact emphasized the need to develop forward pro the cost of existing programs as well as new programs bei ered for submission to the Congress as proposed legislation.

Another relevant point is that the initial agency target fig lished by the President have been regarded as tentative. extremely useful in raising program and policy issues.

These issues were then discussed by the President with 1 visers the Cabinet, the Council of Economic Advisers, an tional Security Council, after it was established in the late

Once the overall target figures were established, the Pre quested the Budget Director to prepare an analysis and a recommendation with respect to specific targets for each of agencies.

These targets were then discussed with the agency heads. in a preliminary target or ceiling on both obligational auth expenditures for the upcoming budget.

It was understood, of course, that while the target figure w and meaningful, it was subject to change in the light of circumstances between the establishment of the target figu formal submission of the President's budget.

The target figures also served another highly important Agencies were told that they could submit a budget request in the target figure but they were also to submit a list of priorit the target figure.

In other words, submissions above the target figure, whil desirable and of high priority, were nevertheless supposed

ower priority than those within the target figure itself. This was anther way of providing a discipline in establishing program priorities. I cannot, of course, speak from first-hand observation with respect o the budget planning process since I became Comptroller General March of 1966.

However, my impression is that roughly the same procedure is folowed today. I cite this background because the experience of the exective branch closely parallels the problems faced by the Congress in any ways and supports the findings and tentative conclusions of the oint Study Committee in its Interim Report.

I guess I should add here, Mr. Chairman, as you can see from this ittle background that it took quite a long time, over a period of sevral years to work out some of the problems and difficulties in the xecutive branch.

The differences between the problems faced by the Congress and the President, of course, are many. You are thoroughly familiar with the practical problems which arise in a deliberative body which operates rincipally through committees and where decisions are effectively aken through votes rather than decisions which are made by the President acting usually on the advice of a few key advisers.

Turning to the Interim Report of the Joint Study Committee, I would like to offer a few comments and then turn to some of the ways n which the General Accounting Office as an arm of the Congress might possibly assist.

In general, I find very little, if anything, in the committee's report with which I would differ. The committee is now considering how best to implement this excellent Interim Report.

To this end I offer the following suggestions for the committee's consideration, knowing that you may have already considered them, and realizing that successful implementation of the concept in the report would be difficult, at least in the beginning, and will require the concerted support of all."

First, in my view, it would seem most important that the initial expenditure and obligational target is acted on by the entire Congress. In this way the target figure will become really meaningful as the separate committees proceed with authorization and appropriation action. An acceptable but less desirable alternative would be for each House to act on it by separate resolution.

Complying effectively with the discipline of obligational and expenditure targets will require that each major budgetary action by the Congress be considered from the standpoints of whether it significantly affects the budget totals either way and whether priorities for other areas should be adjusted.

At the same time, the initial overall target should not be considered as an inflexible and rigid limitation. Rather, it should serve as a general level within which the Congress will attempt to formulate specific legislation, recognizing that the overall target may need to be reviewed perhaps several times during a session of Congress.

Establishing an initial target also can guide the revenue raising committees on the need for tax increases or decreases.

Second, the Study Committee also made the important point that any limitations established on obligational authority and expenditures

should include all congressional funding authorizations, no made through the annual appropriations process.

Because, as the committee's report brings out, a large budgeted expenditures are not handled through appropria is essential that all forms of authorizations, including cont ity and borrowing authority, be covered by the targets. Oth gressional control of the budget on an overall basis will b from the start.

A closely related point is to maintain the integrity of federal budget. In 1967, the President's Commission on B cepts strongly recommended the adoption of the unified cept under which all federal activities financed with fed would be included.

The Commission, of which I was a member, viewed this important recommendation. A single budget covering all was recommended to replace the three different budgets t with the attendant confusion and misunderstandings.

President Johnson, and later, President Nixon, accepted t mendation and, since 1969, we have had the unified budget.

I mention this because if it is to exercise effective control eral expenditures through the budget, the Congress sho efforts to remove Federal activities from the budget.

One action of this nature approved by the Congress in 19 we recommended against-was to exclude the Export-Imp from the unified budget.

We believe that the budgetary system and congressional exercise better control over it should not be weakened by el certain activities from the overall budget.

The fundamental purpose of a single budget is to bring t one place competing needs so that priorities may be mor established and resources allocated with due regard to all fa

Third, one concern which has been expressed is that estab overall target figure, however preliminary in nature it might result in a detailed and time-consuming debate and possib tions which could bring about premature actions in lim discretion of the legislative and appropriations committees.

It is inevitable that considerable debate will be generate resolution proposing a particular level of obligational aut expenditures. This debate could provide useful input for 1 sideration of the specific recommendations which will be by the various committees.

I think the most meaningful debates would focus on suc issues as the desirable budget surplus or deficit level, the need tax legislation, and the debt ceiling.

The allocation of the overall target figures to individual l committees would, I assume, be a function of the permanen review committees in each House. That part which is subject priations action would presumably be allocated by the Appro Committees among the various subcommittees.

Fourth, because of the time pressures under which the Co working, a natural question is: "What can the executive bra help the Congress in its consideration of overall totals?" I I suggestions on this point.

(a) The executive branch could submit, along with the budget documents, or perhaps even earlier, detailed analyses of the relatively uncontrollable or fixed costs. These analyses could be broken down by programs falling within the jurisdiction of each committee or subcommittee concerned.

Mr. Chairman, the Legislative Reorganization Act of 1970 does provide that the President provide this kind of information but not until June 1, and what I am suggesting here is that that information be supplied in January instead of June.

(b) The President could provide an analysis of how the overall total, as submitted in the budget, would be broken down by committees and subcommittees having jurisdiction. In this way, any changes from the President's program would be highlighted as the Congress itself proceeded to develop obligational authority and expenditure targets. Fifth, another key proposal of the Study Committee calls for establishing permanent legislative committees on the budget in the House and Senate.

These committees, supported by an adequate nonpartisan, professional staff, would provide the machinery "for overall review of tax and expenditure policy."

The Study Committee suggested the possibility of a joint staff to serve both the House and Senate committees. This would appear to be an excellent idea. It would not only avoid confusion and duplication in terms of the basic data supplied but would also result in a savings in administrative expenses.

A somewhat more difficult question is how large such a staff should he, especially on a year-round basis. A small permanent staff would undoubtedly be necessary. For the period when overall target figures are being established, individuals from the appropriations committees, the revenue committees, and possibly the legislative committees, and the Joint Economic Committee could also be assigned.

Individuals assigned from the Congressional Research Service, and the General Accounting Office, and temporary and consultant personnel could augment the staff.

The Study Committee's report does not specifically indicate, but we assume that the staff of the Joint Committee on Internal Revenue Taxation and the Joint Economic Committee would examine the economic assumptions underlying the President's budget and would make estimates of receipts under existing taxes and those expenditures directly and somewhat automatically affected by economic conditions.

Sixth, the Joint Committee on Reduction of Federal Expenditures now maintains a "scorekeeping" report on the status of appropriations and authorization actions during each session. It has done a good job and the reports have served a highly valuable purpose.

The logical question arises as to whether this function might well be placed with the proposed legislative budget committees, especially if there is to be a joint staff.

Seventh, another important question not touched upon in the Study Committee's report is whether the committees established in the House and Senate would hold public hearings. There are potential advantages to such hearings. If rigidly controlled to avoid prolonging the process, such hearings could be quite valuable in assessing priorities within a budget total.

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The Legislative Reorganization Act of 1970 already prov overall hearings by the Appropriations Committees with the T the Office of Management and Budget, and the Council of E Advisers. The proposed committees might well extend this pr to have hearings on our overall defense posture with Defense. policy with State, and a limited number of hearings with la dustry, research organizations, et cetera.

Eighth, considering the budget as a whole is complicated fact that the authorization and appropriation processes are out over a long period of time, well after the beginning of t year for which the funds are to be authorized and expended. It is difficult to see how the proposed committees can overl relationship and still make the contemplated system work eff The alternatives to the present system have been widely d and are well known, including the proposal that the fiscal year October 1 or January 1, and that all authorizations be comple later than a fixed date, such as June 1.

Another proposal, not discussed as thoroughly as others, is each session of the Congress into two parts-one concerne appropriations and the other with authorizations.

It is particularly interesting to note that the Study Com report suggests the need for authorizations beyond the budge If the authorizing committees were required to authorize for the beyond the budget year, appropriation measures could be ta immediately after completing the work of the Appropriation mittees based on the prior authorization.

A variation in this proposal would be to specify that no author measures be scheduled for floor action prior to July 1, limitin period to appropriation measures and to legislation not in authorizations for appropriations involving the budget year. Another procedure that might be considered would be to p with action on appropriation bills at some specified time event authorization measures have not been acted upon.

Ninth, finally, consideration might be given to preparing at t of the congressional session a longer term outlook or projecti future years based upon actions taken during the session.

These projections could be based on alternative economic o projections and on legislative and budgetary actions taken duri previous session.

They could point up the effect of congressional actions for the f thus guiding debate on the need for new legislation or modifi of existing legislation.

Such a projection could also be useful to the President as he oped his recommendations for the following year's budget. Now, I would like to turn to the possible role GAO might ser way of assistance.

I would like to make several specific suggestions.

If the detailed agency budget justifications which are now subn to the appropriations committees and the legislative authoriz committees were made promptly available to us, we could p analyses for each subcommittee which would relate our audit. ings to budget areas where the committee may wish to co modifications.