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for this purpose by the Committee on the Budget (and confirmed by the Congress through the passing of a concurrent resolution), problems may arise if this procedure is followed in the future. With a ceiling on an appropriation bill, proposed increases, if they occur in the early language of the bill, might be out of order since they might exceed the ceiling allowable. However, reductions might be offered subsequently which would then make the proposed increases possible under the ceiling. To deal with this type of problem, it is recommended that through a rule change, provision be made for the consideration of reductions with respect to an appropriation bill before increases are considered, even though this is not in the order in which the amended language occurs in the bill itself. 5. Timing of authorization by legislative committees

Under the rules of both Houses of Congress, appropriations are not in order until Congress has passed a bill authorizing the expenditure and the level of operation of a program. The period of time for which authorizations are valid vary from one year to an indefinite number

In recent years there has been an increase in the number of programs that have been made subject to authorization on a one-year-at-a-time basis. One effect of this has been to delay action on appropriations bills, since they must await action on authorizations. Presently, 9 of the 13 annual appropriation bills are affected at least in part by the requirement of annual authorizing legislation. It is believed that the appropriation bills could be speeded up appreciably if the authorizations did not occur in the same year as the appropriation. Therefore, the Joint Study Committee recommends that, except where there is a showing to the Rules Committees of an emergency, authorizations take effect no earlier than the fiscal year after the fiscal year in which they are enacted.

of years.

F. IMPROVEMENTS IN Tax PROCEDURES AND POLICIES

1. Imposition of Surcharge Where Expenditures Exceed Receipts in

Čertain Cases. As indicated elsewhere, after Congress acts on the second concurrent resolution, it may be necessary to provide for additional funds for spending in the current year. It is planned in this case that there would be a so-called final wrap-up appropriations bill in each session to handle any additional funding permitted in the final resolution of the session. Similarly, a tax surcharge is called for under certain circumstances. This surcharge would be included in this same bill providing the wrap-up appropriations. The intention is that the tax committees consider and report out a tax surcharge on individuals and corporations, if after determining the appropriate level of the deficit (or surplus) in view of economic conditions, it is determined that the level of the deficit (or surplus) expected is above (or below) this level. In this event, the tax committees would report out for inclusion in the same bill with the appropriations a surcharge raising the necessary funds. The intent of this is to give assurance that the spending is not in excess of the receipts level appropriate from an economic standpoint.

2. Review by the tax committees of the President's proposed tam or

social security legislation The President, in proposals taken into account in his budget message, frequently makes recommendations or changes in tax or social security legislation. If there is to be a congressional budget determined, there must be some indication from the tax committees as to whether they will act upon this legislation. In recent years, the administration has often included proposals for various user taxes which the Congress did not desire to act upon. More recently, in the President's budget request for 1974, he recommended amendments designed to reduce public assistance costs to the extent of $169 million. He also recommended amendments to reduce social security (OASI, Medicare, etc.) costs by $826 million. These two items alone will make a difference in the budget of about $1 billion. On the other side, the President recommended changes in the railroad retirement laws resulting in an increase in expenditures of $561 million.

It would appear desirable for the tax committees early in each session to consider the President's proposals involving tax or public assistance or social security changes and to indicate to the Budget Committee whether in establishing its limitations on expenditures and new budget authority or in determining its revenues (and, therefore, its surplus or deficit) these changes should be taken into account for purposes of the contingency fund or whether it is clear that the changes will not be made. Å similar review of proposed legislation

efore other committees, with an early report on its status to the Budget Committees, would also appear desirable. 3. Review by the tax committees of other legislation likely to affect

revenues, expenditures or budget authority In addition to considering the President's proposed changes, it would also appear desirable for the tax committees to review their plans for the year and give to the Budget Committees their estimates of what effect their actions are likely to have on taxes, expenditures, or new budget authority in the coming year. The committees will undoubtedly have difficulty in arriving at specific figures in this regard in much the same way as is true of the Appropriations Committees in arriving at specific expenditure figures. Nevertheless, if there is to be a congressional budget, it would appear that such a determination needs to be made. This, of course, does not entail a determination of specific measures that the committees expect to report out but rather the general impact of the proposals as a group on revenues and expenditures. Insofar as expenditures and new budget authority are concerned, this is needed so that programs before these committees can be taken into account (in the contingency fund) in setting limitations in the concurrent resolution. On the revenue side, information as to any probable revenue increases or revenue decreases are needed for the same reasons. It is important to note that since there are to be at least two concurrent resolutions acted upon by the Congress during the year, to the extent the tax committees do not properly forecast the actions at the first of the year, revisions can be made at the time of the congressional action on the second concurrent resolution. A simi lar report to the Budget Committees on their legislative plans for the year would also be desirable.

APPENDIX

TABLE 1.-COMPARATIVE DATA ON THE FEDERAL GOVERNMENT BUDGET ESTIMATES ORIGINALLY SUBMITTED TO CONGRESS AND THE FINAL BUDGET RESULTS, FISCAL YEARS 1921-74

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TABLE 1.-COMPARATIVE DATA ON THE FEDERAL GOVERNMENT BUDGET ESTIMATES ORIGINALLY SUBMITTED TO CONGRESS AND THE FINAL BUDGET RESULTS, FISCAL YEARS 1921-74-Continued

[In millions of dollars)

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

2 No estimates were submitted for fiscal year 1921. The first budget, under provisions of the Budget and Accounting Act of 1921, was submitted by President Harding on Dec. 5, 1921, containing actual data for 1921 and estimates for 1922 and 1923.

: 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 includes 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 paida All trust funds receipts are paid into the specific trust fuad 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 $102,000,000,000 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. * Represents revised estimates contained in the budget submitted by President Nixon on Jan. 29, 1973.

Represents revised estimates contained in "Bureau of the Budget Review of the 1970 Budget" dated Apr. 15, 1969. Source: U.S. Office of Management and Budget. Annual budget documents for fiscal years 1923 to 1974.

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