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permanent appropriations, contract authorities, borrowing authorities, and provisions establishing basic standards or criteria of eligibility and rates of benefits which dictate the amount of budget authority and mandate expenditures. It should be noted that only 60 percent of the estimate of budget authority for fiscal year 1974 requires current action by Congress.
A ceiling on spending also is required if the ceiling is to be directly related to estimated receipts for the current year and control is to be exercised over the rate and timing of expenditures by program categories. Estimating and controlling spending involves a materially different process from control of budget authority. Spending in any one fiscal year stems not only from budget authorities granted in the current year, but also from various budget authorities granted in prior fiscal years. For example, of the $268.7 billion spending estimate in the budget for fiscal year 1974 only about 44 percent is in the bills pending before the Appropriations Committees. Of the rest, about 14 percent stems from previously enacted appropriation bills, and the balance, 42 percent, stems from permanent budget authority (trust funds, interest on the debt, etc.) and other legislative actions.
The complex relationship between budget authorities and expenditure actions, involving a mix of fiscal years, is evident from the following summary prepared from the fiscal year 1974 budget data :
Fiscal year 1974 budget 1. New budget authority recommended :
(a) To be spent in fiscal year 1974.
Billions $173.9 114.1
Total budget authority recommended (includes
$115.2 billion in permanent authorizations available with-
2. Estimated outlays—expenditures :
Total, budget outlays, fiscal year 1974---
3. Estimated balances of unspent authority to be carried over at the end
of fiscal year 1974 for expenditure in future years :
(a) Unspent authority enacted prior to fiscal year 1974-
191.6 114. 1
Total carryover at end of fiscal year 1974.1 Most of this carryover of unspent authority is earmarked for special uses (trust funds, insurance and loan guarantee programs, and liquidation of prior obligations) and is not available for new program purposes.
It appears that to be most effective and meaningful, ceilings should be placed on both new budget authority and outlays (expenditures and net lending). This would involve determination and control of two different sets of figures for many individual congressional actions affecting the budget. Although it should not be implied that ceiling allocations would have to be applied to each legislative action, the complexity of the control problem is evident from the fact that for fiscal year 1973 approximately 160 legislative actions had a direct or indirect relationship to budget authority and spending. In addition, there were 82 legislative actions having a potential impact on the fiscal year 1973 budget and/or subsequent years which were subject to funding in appropriation legislation. A summary table with this information and additional supplementary detail is presented in Appendix Table 14.
Another major problem in the establishment of ceilings is an accurate determination of allocations to the so-called budgeted outlays which are classified as "relatively uncontrollable” under present law. About 75 percent of the budgeted outlays for fiscal year 1974 are classified in this category and include such major programs as: social insurance trust funds, interest on the national debt, veterans benefits, Medicaid program, public assistance grants, general revenue sharing, military retired pay, outlays from prior year contracts and obligations, etc. Outlays for many of these categories are difficult to accurately estimate in advance, which presents special problems in establishment of meaningful ceilings. It should be noted that during the fiscal years 1969–1971, when overall ceilings were established, the uncontrollables exceeded the estimates included within the ceilings by an average of $5 billion over the 3-year period.
III. GENERAL OBJECTIVES OF COMMITTEE
To meet the problems outlined above, the Study Committee concluded that the legislative process should improve the opportunity for the Congress to examine the budget from an overall point of view, together with a congressional system of deciding priorities. To achieve this objective, the recommendations set forth in the next section of this report make provision for an overall ceiling on both budget outlays and new budget authority together with a procedure for determining the aggregate level of revenues and public debt. The committee concluded that control over expenditures and net lending was essential since this total has the most immediate economic impact and also because only this total matches the revenue and deficit totals in the budget. At the same time, it is also important to recognize that the budget deficit be no larger (or the surplus no smaller) than the Congress considers appropriate for economic or other reasons. This objective is achieved by imposing any tax surcharge needed to bring the desired level about at the time of the passage of the final appropriation bill for the session. In addition, it was believed that a ceiling over new budget authority was also needed in order to help the Congress obtain better control over spending in the long run. Because appropriation bills and similar legislation can have an impact for many years to come if controls are not obtained over them, Congress is likely to be faced with expenditure totals in any given year which were largely determined in the past and which are subject to little control in the current year.
To consider the expenditure, appropriation and revenue matters referred to above, the Study Committee in its recommendations has recommended the formation of a Committee on the Budget in each House which in part represents an amalgamation of the two financing committees in both cases. At the same time, it recognized the need for significant representation of the general legislative committees of the two Houses and, therefore, included equal representation of these committees. In creating this committee, the Study Committee has to the extent possible not interfered with or changed the essential nature of the responsibilities of the financial committees dealing with the different aspects of budgetary matters.
Provision for adequate staffing of these budget committees is essential. The Study Committee concluded that this could best be provided by a single joint staff servicing both committees modeled after the experience in California with the Legislative Budget Analyst. Here the expertise developed by the staff in assisting one committee can be made available to the other committees as well. It is important that this staff be a professional, nonpartisan staff.
Another aspect of the duties of the Committee on the Budget would be to keep a current record of the effect on expenditures of appropriation bills and also authorization bills. Such a tabulation insofar as appropriation bills are concerned is already maintained for the current year. However, this scorekeeping technique needs to be used not only as a means of keeping a record of this type for the current year but also as a means of indicating clearly to Congress the effect of its current actions on future expenditures and revenues.
In the past when committees similar to the Committee on the Budget have been used, difficulties have arisen primarily in two areas. The first is attributable to the fact that consideration of budgetary ceilings early in the year is difficult because full information is not yet available to the committees. The recommendations set forth below deal with this problem by first providing ceilings and then subsequently, later in the session after more information is available, a reconsideration of the ceilings by the Congress.
A second cause of difficulty in the past has arisen from the fact that ceilings once adopted have on occasion been ignored. The procedures set forth in the next section give assurance that the ceilings (although they can be subsequently changed by the Congress) are nevertheless binding until changed. The result is obtained principally by requiring action on appropriation bills to be consistent with the totals arrived at in the limitations resolutions reported by the Budget Committees. To achieve this, the resolutions reported by the Budget Committees not only will contain budget outlay and new budget authority ceilings but also will make provision for the division of these ceilings among the various appropriation bills and other spending bills considered by the Congress.
The recommendations set forth below also are designed to increase the effectiveness of the appropriation actions. Especially important here is the requirement that authorizations be made early enough so that the Appropriations Committees need not wait on them before Congress can act on appropriation bills.
IV. RECOMMENDATIONS OF JOINT STUDY COMMITTEE
ON BUDGET CONTROL
A. COMPOSITION OF COMMITTEES ON THE BUDGET
The Joint Study Committee recommends that both the House and Senate have a special standing “Committee on the Budget” with specific legislative jurisdiction. In the House, the committee would consist
of 21 members : seven members from the Appropriations Committee, seven members from the Ways and Means Committee, and seven members selected
at large from the membership of the House legislative committees. Because of the smaller size of the Senate, the Senate committee would consist of 15 members: five members from the Appropriations Committee, five members from the Finance Committee, and five members selected at large from the membership of the Senate legislative committees. Drawing on the appropriations and tax committees for two-thirds of the membership of each of the Budget Committees means that in effect these budgetary decisions at the committee level, to a substantial degree, will continue to be made by the financial committees of the House and Senate which have basic responsibilities in these areas. At the same time, the one-third representation on these committees of the legislative committees of the House and Senate means that their views also will be well represented.
The appointments to the Budget Committee in the case of the members at large would be made by the Speaker of the House or the President pro tempore of the Senate. The appointment of the members of the appropriations or taxation committees could be made by the committee from which the members were selected. Selection of the members in this manner will give assurance that they will appropriately reflect the different views of the membership of the House or Senate.
Presumably, the members would, in most cases, be selected from the majority and minority on the basis of a 4 to 3 ratio in the House and
a a ratio of 3 to 2 in the Senate. With units of seven or five members selected for the committee, these ratios are probably as close to the majority-minority representation in the House (now 55 precent for the majority) and Senate (now 57 percent for the majority) as it is possible to obtain under most circumstances. However, in any case, it would be left to each Congress to decide, in the same manner as is usually followed in determining committee ratios as to the majority and minority representation. By not specifying this ratio in the statute, it would be possible to vary these ratios from time to time should a majority in the House or Senate become unusually large.
Each committee in this case would consist of an uneven number of members to prevent ties. The membership from the House and Senate general legislative committees was increased (over and above their representation on the study committee) to provide greater representation for those Members of Congress. The chairman of the House
committee during each even-numbered year would be selected from among the members who come from the Appropriations Committee, and during the odd-numbered years, the chairman would be selected from among the members who come from the Ways and Means Committee. In the Senate the pattern of alternating the selection of committee chairmen would be reversed, that is, the chairman would be selected from the Finance Committee in evennumbered years and from the Appropriations Committee in odd-num
As is pointed out in section D below, it is recommended that the two committees have a joint staff, headed by a director, which is
professional and nonpartisan in nature. The joint staff in this case, in a sense, will give Congress its own center of congressional budgetary operations, much along the lines of several of the State legislatures which in effect have their own budget director. In California, for example, a legislative analyst prepares a legislative budget for California's Joint Leglislative Budget Committee.
B. RESPONSIBILITIES OF THE COMMITTEE ON THE BUDGET
In order to assure an overall congressional consideration of budget priorities, the Committee on the Budget (in the case of each house) would be given exclusive jurisdiction to report out for the consideration of the House and Senate a concurrent resolution early in each year, providing for an overall limitation on budget outlays (expenditures and net lending) together with an overall limitation on new budget authority (sometimes referred to as new obligational authority). As indicated in the explanation below, the aggregate limitations on budget outlays and new budget authority are intended to be allinclusive, including not only expenditure or new budget authority coming before the Appropriations Committees but such authority coming before all other committees as well. The establishing of the budget outlay limitation will also make it necessary to evaluate carefully the possibility of congressional action on proposals in the President's budget that require the amendment of existing laws or the passing of new legislation. In the same concurrent resolution, the committees would also have the authority to direct the taxation committees to report out legislation raising or lowering the aggregate level of revenue and raising or lowering the limitation on the public debt.
Also included in the concurrent resolution to be reported would be an allocation of the budget outlay and new budget authority limitations to each of the Appropriations Committees of the House or Senate (as well as any other committees having jurisdiction over any budget outlay or budget authority or over any measure mandating spending). After receiving the recommendations of the various committees involved, the Budget Committee would also subdivide the allocations made to each of these committees by various programs within a committee's jurisdiction, or along the division followed by a committee in establishing subcommittees.
In establishing the ceiling on budget outlays and new budget authority and also in making its decisions with respect to the level of taxation or debt, the Committee on the Budget presumably would take into account the probable size of budget outlays and new budget authority and the deficit or surplus in the unified budget (and also in the Federal funds budget) as presented by the President. The committee could, of course, change as it saw fit the aggregate levels of budget outlays, taxation and debt based upon its views of appropriate fiscal policy and other national objectives. It would, of course (like the President), find that its options were limited to the appreciable extent the budget for the current year consists of items which are relatively uncontrollable under present statutes through the annual appropriations process. (In the longer run, however, it is expected that the committee, through measures set forth below, would be able to regain control over a much larger portion of the budget.)
Presumably, the Committee on the Budget, before reaching any conclusions as to budget outlay or new budget authority limitations, or
• The term "budget authority" as used here includes lending authority.