Footnotes:

1/ Represents original estimates by the President to the Congress each January in his annual budget message.

2/ Represents revised estimates contained in the budget submitted by President Nixon on January 29, 1973.

3/ The budget is compiled on the unified budget concept. The unified budget form was recommended
by the President's Commission on Budget Concepts in October 1967. The budget was first submitted
on the unified budget basis in January 1968 for fiscal year 1969. The unified budget concept in-
cludes both Federal funds and trust funds for receipts and outlays. Federal funds correspond
roughly to the old administrative concept used by the Federal Government prior to fiscal year 1969.
Federal funds are those which the government administers as owner as distinguished from those
administered in a trustee or fiduciary capacity (the trust funds). Historical functions of
government, such as National Defense, Veterans' benefits, Commerce, Labor, Agriculture, interest
on the public debt, and others are paid from Federal funds (tax revenue and borrowed funds).
Income taxes (individuals and corporations), most excise taxes, estate and gift taxes, customs
duties, and miscellaneous receipts are paid into the Federal funds accounts from which all
Federal funds expenditures are paid. All trust funds receipts are paid into the specific trust
fund accounts for which the revenue is earmarked. All trust fund payments are made from the
specific trust funds accounts. Trust funds surplus receipts are invested in Federal securities
(public debt or Federal agencies obligations). At the end of fiscal year 1972 the trust funds
owned $102 billion of public debt securities. Major Federal trust funds are: old-age and survivors
insurance, disability insurance, health insurance, unemployment, Federal employees retirement,
railroad employees retirement, and the highway trust fund.

4/ Represents revised estimates contained in Bureau of the Budget Review of the 1970 Budget dated April 15, 1969.

Source: U.S. Office of Management and Budget. Annual budget documents for fiscal years 1923 to 1974.

PART THREE

IMPROVEMENT OF CONGRESSIONAL AND
EXECUTIVE PROCEDURES

P

VIII. THE POSSIBILITIES OF

IMPROVEMENT

ROPOSALS for further improvement of the budgetary proc

ess should be built on the constructive ideas that have emerged during the past thirty years and should avoid the reinforcement of practices that experience has shown to be inadequate. That there is abundant need for further improvement on both the Congressional and the Executive sides has been indicated. Discussion of the directions that improvement should take will be preceded by a recapitulation of the main continuing weaknesses in Congressional and in Executive processes that need to be remedied, even though such a summary necessarily fails to pay tribute to the very considerable progress, especially in the Executive Branch, over the past generation.

WEAKNESSES IN CONGRESSIONAL PROCEDURES

The major weaknesses in Congressional procedures are: 1. Commitments for particular expenditure programs are frequently made at the legislative stage of the process rather than at the appropriations stage. While the basic legislation should indicate the Congressional view of the urgency of the expenditure programs involved, commitments to spend should not, in general, become final until the competing claims on the budget are considered in relation to each other and expenditures as a whole are weighed against taxation and other aspects of the economic impact of the budget.

2. The appropriations process is not based on adequate

Congressional and Executive Procedures

consideration of the program issues involved. This failure can have diverse consequences: In some instances the committees simply ignore the major issues and center their attention on minor questions of detail; in others, they make changes in the President's budget on the basis of inadequate information; in still others, they accept the President's recommendations with emotions of resignation, frustration, or enthusiasm, depending on their general view of the President and his policies.

3. The budget is considered in the Congress on a fragmented rather than on a unified basis. Subcommittees dealing with particular programs have undue authority compared with that of the appropriations committees as a whole. Efforts to unify the activities of the appropriations committees with those of the revenue committees have so far failed. 4. Congressional action has not resulted in improved efficiency of operations in the Executive Branch. In fact, its traditional means of control-striction on the use of appropriations-was not even designed for this purpose but grew out of the struggles for power between the Congress and the President. Excessive restriction has meant that the attention of administrators is centered on obeying the restrictions rather than on conducting their operations efficiently.

5. The Congress has not realized the possibilities of promoting economy and efficiency through an effective review of the past performance of the Executive. While the appropriations hearings are largely concerned with a review of the past, they usually raise minor rather than major questions of administrative management. On the other hand, the expenditure committees which could specialize on the problems of efficiency have not been given a regular role in the budgetary process.

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