Mr. CLAWSON. Subject to his reelection.

Mr. MCSPADDEN. Do you see the necessity for a budget balancing- or a spending-ceiling limit met, the necessity as prior ties might change from a session, in effect voting on the bill twice?

Mr. PEABODY. As tangled as that first timetable was, H.R. 7130 says nothing at all about the second concurrent resolution. Indeed, it says two or more, I think the language is, or there is a possibility of more than two. That one to me conjures all kinds of potential for conflict toward the end of a session with some intervening events such as either an economic downturn or some involvement in a foreign war which throws the budget drastically out of line from what it might have been.

The problem in arriving at a concurrent resolution under those circumstances would be very difficult indeed. I must say, when you get into whether or not it is balanced or not and the questions of reaching initial targets, these are areas which I really feel not very comfortable with and defer to people like Schultze and Wilson and other members of the financial committees.

Mr. MCSPADDEN. Would you not agree that with a variance of the philosophical ideas the membership of 435 people, especially on Appropriations, that this statement I am going to make is an oversimplification, but is it or is it not a fact that if you meet this ceiling or budget or whatever you call it, that you by necessity will have to write the bills in conference or the second time around which is one and the same?

Mr. PEABODY. I think there is no question but what you throw power up to the more senior members of the Ways and Means or Appropriation, if you go with the original or even the modified version of the committee. If it is earmarked by Appropriation and Ways and Means Committees, it goes up to the more senior members, and it throws legislation toward the end of the year into conferences. That is the ultimate of where seniority rules the roost. So, yes, of course.

The CHAIRMAN. Thank you, Mr. Peabody.

Mr. MCSPADDEN. I would like to ask unanimous consent to insert Mr. Gunter's statement.

The CHAIRMAN. Without objection, it is so ordered.

This concludes the hearings on the budget and, of course, there is a lot of work to do from now on by the committee, marking up the bill and so on.

In fact, some time ago I ran into a friend of mine who was always criticizing Congress for its delays and its procedures and what-not. I said, "Why don't you come on up and testify? We need a helping hand." He said, "You will have plenty of helping hands coming in there giving you advice, but each member of your committee has got two at the end of his arms if you would only use them." So it is up

us now.

to

[Whereupon, at 4:15 p.m., the committee adjourned the public hearing on budget control.]

[The following statements were received by the committee for inclusion in the record:]

STATEMENT OF HON. ELWOOD H. HILLIS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF INDIANA

Mr. Chairman and Members of the Committee, the budget control legislation being considered today is crucial, in my opinion, for two reasons: it would update an archaic and naive budget process and it would re-establish Congress' ability to control the nation's purse strings.

Speaking to the first point, I doubt there is one Member here who knows of any business or organization which balances its books in such a haphazard manner as the federal government. While one sector labors over Administration requests, then authorizes a spending amount, another body decides what part of that amount really needs to be spent, and yet another group reviewing the often uneven results, looks to where next year's coffers will be filled from.

No one is adding up all the items at the checkout counter-because it's felt that Uncle Sam's credit is good anywhere. But that's the problem-Uncle Sam's credit is in trouble, because he's been deficit spending in ever greater quantities and inflation has set in.

Back in the days when the country was young and the federal government was much more limited and uncomplicated, this budgetary problem didn't existonly one committee in each house had jurisdiction over authorizing, appropriating and balancing the full budget.

But today's proliferation of authorizing committees, issues, spending needs and complicated built-in back door spending programs require closer scrutiny and expertise. It's inevitable-along with big government must come a division of labor and specialization. But we also need a scorekeeper and overseeing body, or all the separate units tend to go their own way, believing their one function deserves a larger part of the pie than they had the previous year.

As one of the 435 Members of this Congress, I know I don't keep track day to day of how we've overspent the projected budget request on this item and saved some on that item; I just find out at the end of the year, along with everyone else, how much more generous we've been than we intended.

A vivid example of this was brought home to me as last year's budget process unfolded. When President Nixon unveiled his budget in January, with a spending increase of some $14 billion and a projected deficit of $25 billion, I'd never heard such moaning and criticism about irresponsible spending, deficit programming, disaster course financing. I thought for sure Congress would never stand for this budget, in light of all the protestations and rejections. Yet little by little, bill by bill, the Members of Congress forgot their indignation and approved new measures or became more generous with older measures.

By the end of last year, not only had we matched the President's "highly inflationary" budget, we had exceeded it by $15 billion! And when the President, for fiscal responsibility's sake urged us to cut our budget to an amount still $4 billion above his budget request, the majority flatly refused.

Which brings us around to point number two-who really controls the power of the purse-Congress or the President? I know what the Constitution says, but it's a principle of physics that when a vacuum develops, something will rush in to fill the void.

We have created the void of responsible budgetary programming and accounting, and as a result, of late we have abdicated this authority very reluctantly to the Executive branch. We have become so enraged by this replacement of our function that we have passed legislation specifically forbidding any further encroachments in this area and setting down specific ground rules for impoundment proceedings.

Let me make it clear at this point that I do not approve of the impoundment process, and I was pleased to vote for the impoundment control measure which passed the House last week. But I must admit, I can fully understand why the Administration has felt compelled to take such a drastic step as impounding large sums of money lately, and I think it has served as a helpful catalyst in forcing us to realize that what we won't do ourselves, someone else will feel compelled to do, legally or otherwise.

I think there is no more important issue facing Congress this year than putting its budgetary house in order, cutting our deficit spending, and reasserting our full control over how much is to be spent for what, when, and how. This is, after all, Congress' basic function.

We don't need to accept Administration recommendations on where spending priorities lie, but we should be able to work with the Administration in determining how big a pie we can afford to serve up this year. We should all be acutely aware that any additions to one slice are going to have to come out of another, or are going to require gathering additional ingredients so the pie can be enlarged.

I think the Joint Study Committee on Budget Control has done an excellent job in researching and documenting the need for better budget procedures and has made some excellent recommendations in the form of legislation here before us today.

The Committee's program makes a great deal of sense to me, particularly as a companion bill to the impoundment legislation passed last week. I would urge that this committee give its enthusiastic approval of H.R. 7130 and give the Members of the House an opportunity to show they want to reassume the burden of coordinating and planning a balanced and truly responsible budget.

STATEMENT OF HON, BILL Gunter, a RepresentatiVE IN CONGRESS FROM THE

STATE OF FLORIDA

Mr. Chairman, I agree with my distinguished Florida friend and colleague, Congressman Charles Bennett, that the subject you are considering is the most important legislative reform considered by the Congress in many years. I am a sponsor of legislation identical to S. 40, which takes a somewhat different approach to this problem. The more I study the whole area of budgeting and fiscal policy, the more I realize how complex the questions are. Therefore, I can accept the approach in H.R. 7130 in the light of the need for immediate action on budgetary reform and my basic agreement with the goals of this bill.

I have several suggestions concerning this issue which I feel will put the Congress well on the road to constructive budget making. My approach is a five step process that will permit us to make the hard choices on national priorities that need to be made.

One: I believe that a Joint Committee on the budget is the best approach to this matter. However, I certainly can accept the two-committee approach encompassed in H.R. 7130 if we can end the current practice of splintering the appropriations process with trust funds, mandatory entitlements, contract authority, and other budgetary authority.

If we adopt a two-committee system, I do have several changes to propose in the committee makeup suggested in H.R. 7130. I believe the committee will work more effectively if it is smaller. Therefore, I would recommend no more than 18 members on the House committee and 12 on the Senate committee. Furthermore, I am opposed to automatically including on the budget committee members who are currently on House Ways and Means, Appropriations, or Senate Finance Committees. If we are truly interested in reform, we should not overlook this opportunity to further democratise the Congress by allowing each caucus to choose its members to be named to these important committees.

The committees must be fully staffed with professionals to provide each committee with the necessary information upon which budgetary decisions can be based. Each committee, with the help of their staff, should prepare a legislative budget which includes (1) estimates for receipts and expenditures for the coming year, (2) maximum amounts of proposed expenditures for each major category, and (3) five year projections for the major categories.

To keep the legislative budget at the forefront of the authorization and appropriation process, neither the House nor the Senate committee would be permitted to consider a bill without a statement from the respective Budget Committee of their body, indicating whether or not the bill could be funded from within the existing legislative budget.

I recommend that the budget committees present their legislative budget to each House of Congress by March 31 of each year, which would assure timely Congressional participation in the budget making process.

Two: The requirement for five year projections of receipts and expenditures forms the core of sound budgetary action. Not only would the legislative budget contain such projections, but any bill reported by a committee would contain a projection of the five year costs associated with it. We are all familiar with the type of bill that has a first year cost of 20 million-only to be followed by

hundreds of millions of dollars in future years. To make an intelligent decision about individual programs, at the very least we need to know the price of the full iceberg-not just the first year tip.

Three: Another aspect of the budgetary problem has been our tendency to either require annual authorizations that slow the appropriations process and hobble our oversight function, or to permit permanent authorizations that avoid the oversight process altogether. To strike an intelligent middle ground that should both smooth the path to early appropriations and yet permit adequate oversight, I would require all programs to be re-authorized every three years. In some cases, Congress may eventually move to five year authorizations. But in the early stages of reform of the budgetary process, I feel three years represents a good beginning.

Four: I recommend pilot testing for two years of all new major programs. No corporation in the world would rush a new product on the market without a careful study of what the market demanded. Nor would the production engineer cavalierly accept a new process without adequate testing. Yet federal programs are often adopted with a hope and a promise and little else.

Testing is not, of course, a perfect science. Good sound theory is always a scarce commodity and that is especially true with regard to social programs. The current debate about compensatory education is a perfect example-no pilot test will give a sure answer where none exists.

But without a serious atempt to assess the value and operation of major new programs, areas of uncertainty will surely become areas of dark fumbling.

Pilot testing will also relieve many existing pressures for annual authorizations. That in turn will permit time to be devoted to more serious oversight of ongoing programs.

Five: My last and perhaps most important recommendation involves annual appropriations for every expenditure including all existing trust funds. I am perfectly aware that Congress is unlikely to cut social security expenditures, or to reduce veterans pensions, but until each and every appropriation is scrutinized annually, the budget is going to remain a wild animal on the loose.

The recent record of executive impoundments and the continuing specter of inflation have finally forced us to take a hard look at the Congressional role in the budgetary process. None of us like what he sees. We would certainly not run our business this way and we certainly should not allow the public's business to continue in such a state.

We owe it to the public, we owe it to the thousands of local governments that depend on us, we owe it to the average citizen fearful of rising prices, and we owe it to the Constitution to take hold of the budgetary process.

It is in this spirit that I offer these suggestions for reform for your consideration. I anxiously await your action.

(Appendix follows:)

Mr.

introduced the following bill; which was referred to the Committee on

A BILL

To amend the Rules of the House of Representatives and the Senate to improve congressional control over budgetary outlay and receipt totals, to provide for a Legislative Budget Office, to establish a procedure providing congressional control over the impoundment of funds by the executive branch, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

4 (a) SHORT TITLE.-This Act may be cited as the

5 "Budget and Impoundment Control Act of 1978".

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