[From the Congressional Record, Feb. 27, 1973]

INTRODUCTION OF S. 1030 BY SENATOR HUMPHREY

OF MINNESOTA

Mr. HUMPHREY. Mr. President, the Fiscal and Budgetary Reform Act of 1973, which I now introduce, establishes the tools and mechanisms for closer coordination between the authorization and appropriation committees, sets up appropriate staff facilities for budget analysis, and establishes a program of evaluation for ongoing and newly proposed programs.

Specifically the bill has the following major provisions:

First, it establishes, under the direction of the Joint Economic Committee, a Congressional Office of Budget Analysis and Program Evaluation, to recommend budget ceilings and control expenditures.

Second, it places responsibility on the respective Appropriation Committees of both Houses to report a budget ceiling bill.

Third, it opens the budget process to public scrutiny through a process of hearings, and congressional availability of transcripts of budget examinations within the executive branch.

Fourth, it establishes a procedure for the General Accounting Office to review, verify, and recommend congressional action concerning Executive impoundment.

Fifth, it prohibits impoundment if such action terminates or otherwise impairs the legislative intent of a program.

Sixth, it provides for a 3-year limit on all authorizations to force evaluation and oversight of all programs.

Seventh, it provides that all taxpayers will be made aware of exactly where their tax dollars are spent through a system of individual taxpayer notifications.

Mr. President, the Federal budget has grown at a rapid rate. In the beginning of this Nation, the budget took the form of "Books of Estimates," and annual Government expenditures were about $2.65 million. Today, the Federal budget comprises four separate documents, a total of more than 1,000 pages, requires hundreds of thousands of man hours to prepare, and involves expenditures of more than $270 billion. In addition, the famous "pipeline"-authorizations and funds obligated from past years and to be spent in future years-involves more total dollars than the actual budget of fiscal 1974-more than $305 billion.

This growth in the budget reflects an expanding country, expanding international responsibilities, expanding domestic programs to meet social needs, and expanded provision for national security.

Each new budget is really a social accounting. It represents the policies and priorities of the President as proposed and Congress as enacted. The budget should be examined not just as a collection of figures or as an exercise in cost accounting but rather from the perspective as to whether or not the budget meets the needs of our people.

This ought to be the criterion of governing: Are the people's needs reflected in this budget?

One budget of 1 single year cannot accomplish every goal that all of us would like. Neither borrowing or tax revenues will permit that kind of spending. There have to be choices. There has to be a setting

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of priorities. That is what the budget does. Each budget contains unstated assumptions: Assumptions about the worth of Government programs whether or not a particular problem is one that Government ought to address itself to; assumptions about the relative power position of various groups in our society; and assumptions about our Nation's leaders, how they view our country and its people.

On such assumptions, program choices are made for the allocation of competing resources. How much to allocate to education. How much to allocate to manpower, to health and the elderly. How much to be allocated to natural resources and environmental protection-to national security and the Armed Forces.

These are the kinds of choices that have to be made. These are the choices that are made, and made within a specific framework. The person or office who sets that framework-who establishes the bases and posture-both public and private on which these choices are made, to a large extent controls the decisions that are made.

For too long, Congress has been content to accept the President's definitions of that framework. We have been content to assume that, because the President said no new taxes are necessary that no new taxes are in fact necessary. Or that, because the President says that we must spend $268.7 billion and only $268.7 billion, this becomes the budget ceiling.

The President has also been trying to structure the terms of the budget debate by repeating over and over again that Congress is the big spender; that Congress is fiscally irresponsible; that Congress just spends and spends and only the President can control expenditures.

Well, it simply is not true. The fact is that Congress is not the big spender. Since 1920, 32 Presidential budgets have been presented to Congress with a deficit.

In Mr. Nixon's last term of office alone, the 1970 budget deficit was $13 billion; in 1971, it was $30 billion; in 1972, it was $21 billion; and the 1973 fiscal year budget deficit is estimated to be around $34 billion. Those are Presidentially submitted budget deficits.

The fact is, however, that Congress has cut Mr. Nixon's budget requests in the last 4 years by $20 billion. Congress reduced the budget $8.2 billion in 1969; $3.4 billion in 1976; $2.6 billion in 1971; and $6.4 billion in 1972.

But even in the face of these cuts, the budget had increases. Why? There are two main reasons. First, both the executive branch and Congress have requested new initiatives. These programs such as the black lung bill or Disaster Relief Acts were badly needed to deal with a pressing humane social problem. They are indeed worthwhile investments.

One branch of the Government ought not to blame the other branches of the Government for investing in these kinds of programs even though total expenditures increase.

A second reason is more endemic to Congress as an institution. The fact is that through Executive proposals such as general revenue sharing and congressional proposals such as water pollution control, the appropriations process has become splintered. There is a great deal

of back door spending today-the kind of spending that is not reflected directly in appropriations bills, but ultimately must be paid.

We have for example, such back door spending as borrowing authority, contract authority, permanent appropriations, and mandatory appropriations. These funds go for such programs as student loan guarantees, water pollution control, revenue sharing, social services, public assistance grants, and the like.

These are worthwhile programs. They are priority programs of Congress. Yet, they do require funding, and that means appropria

tions.

There is, in short, a need for congressional budget control. A need brought forth by both Congress and the executive branch.

The Joint Study Committee on the Budget has released its preliminary report. This report cites the need for a congressional mechanism to determine the proper level of expenditures, to provide an overall ceiling, and determine the revenues available for obligation.

I am encouraged by this report, I think it is a workable first step.

SECTION-BY-SECTION COMMENT-FISCAL AND BUDGETARY REFORM ACT OF 1973

The bill I am introducing today is complementary to the thrust of the Joint Study Committee's interim report.

OFFICE OF BUDGET ANALYSIS AND PROGRAM EVALUATION

Title I of the Fiscal and Budgetary Reform Act of 1973 would establish an Office of Budget Analysis and Program Evaluation as part of the Joint Economic Committee.

The Office would, prior to the submission of the President's budget report to the Joint Economic Committee on an estimate of revenues that will be received by the Federal Government and a recommendation of the amount, if any, by which the Federal outlays should exceed revenues, or revenues exceed outlays.

Such proposals would be made as the result of a thorough study of authorization committee proposals, budget initiatives, and current program refunding. It would take into account the current economic condition, budget assumptions, and objectives of the Employment Act

of 1946.

The Joint Economic Committee-after receiving this report and the President's budget-would hold hearings, and report to the Congress and its respective committees a proposed limit on new obligations and a proposed limit on total outlays.

After receiving this report, the Appropriations Committees, within 15 days, will report to the floor a bill establishing the total amount of outlays to be made during the fiscal year.

Upon passage by the Congress and signature of the President, this bill becomes the budget ceiling.

The Office would have four separate divisions. The first division, the Informational Section, would be required to provide to all members and committees information on budget amounts requested by the

Federal departments, request as set forth in the President's budget, amounts authorized, amounts appropriated, estimates of projected cost over a 5-year period, amounts obligated by the agencies and amounts apportioned by the Office of Management and Budget.

A second division, the Analytic Section, would analyze the assumptions on which the budget is based in light of current economic conditions, operation of the general economy as it affects revenues and budget outlays, choices evidenced in the President's budget.

A third division, the Program Evaluation Division, would examine and scrutinize the various programs, either proposed or enacted by the Congress. It would provide Congress with the information it lacks:

Is the program worth it? Is it working? Is it accomplishing its goals? Does the administration of the program follow legislative intent?

A fourth division, the Special Studies Section would be available to undertake specific budget analysis and projects from Members of Congress and the committees.

In all cases, the various divisions of the Office would be required to work closely with the General Accounting Office to see that the legislative mandates of this new bill and the Legislative Reorganization Act of 1970 are fully executed.

OPEN BUDGET PROCESS

Title II of the bill makes major changes in and overhauls the departmental budget process. It calls for the participation by State and local officials in the preparation of the budget. It requires opening hearings and the opportunity for elected officials to appear before budget examiners and departmental secretaries in the preparation of the budget.

Governors, mayors, and other elected officials would have an opportunity to offer comments and suggestions about their needs and submit general evaluations as to what they feel the budget of the various departments should attempt to accomplish-given a limited amount of

resources.

In addition, after an executive agency has submitted its budget request to the Office of Management and Budget, transcripts of all budget examination meetings will be made available to the Congress and the public. And, executive agency heads would be required to submit such budget requests to the Congressional Office of Budget Analysis and Program Evaluation.

The goal of this title of the bill is to open up the budget process. It makes it an open document that would reflect the needs of the people.

IMPOUNDMENT

Titles III and IV are directed to the impoundment of congressionally appropriated funds by the executive branch.

The Comptroller General would be required to investigate the impoundments to verify the information provided by the executive branch and to assess the validity of the reasons given for the impoundment.

În addition, the Fiscal and Budgetary Reform Act of 1973 would expressly prohibit the President from impounding funds when such impoundment would impair a congressionally approved program. No programs would be permitted to be terminated by the impoundment procedure.

Under my proposals, the Comptroller General would make a report to the Congress as to whether or not the impoundment has impaired or terminated the program in question. If such a finding is made, then Congress must, within 30 days, approve such impoundment or the impoundment is disallowed and the funds must be spent.

A 3-YEAR LIMIT ON AUTHORIZATIONS

Title V provides for a 3-year limititation on authorizations. This title is included for one basic reason. It would require the Congress and the executive branch to conduct a thorough review and evaluation of the various programs. Limiting the life of the programs would give Congress a chance to assess the performance of the program, to find out whether or not the program is meeting legislative intent.

TAX EXPENDITURE AWARENESS ACT

Title VI of this legislation would require the Internal Revenue Service to provide information to taxpayers as to how their tax dollars are spent. This title is similar to the Tax Expenditure Awareness Act introduced last year. It would give the taxpayer an accounting of how much of his total tax dollars were spent on national defense, space, agriculture, natural resources, transportation, community development, housing, education, manpower, health, social services, welfare payments, veterans pensions, and benefits, law enforcement, national debt, and foreign aid.

Mr. President, I feel that the Budgetary and Fiscal Reform Act of 1973 will provide Congress with the vehicles and mechanisms that will allow it to examine rationally all expenditures. It utilizes an ongoing joint committee established by the Employment Act of 1946. This joint committee has demonstrated expertise in economics. And, this legislation provides the kind of staffing and authority for Congress to set its own budgetary priorities with sound, fiscal responsibility.