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Thank you.

Mr. RHODES. The gentleman, of course, has put his finger on a very important problem, that is, that it is easy to make a resolution that we are going to have a balanced budget, but then you come to the day-byday nitty-gritty hard votes which you make in order to have that become an accomplished fact, it is a daily grind. Very difficult.

Chairman HOLIFIELD. Mr. Fuqua.
Vír. FUQUA. Thank you, Mr. Chairman.

Let me say to my friend from Arizona, he has made a very good statement and I agree with much of it regarding spending priorities we in Congress inflict upon ourselves. I am hopeful that the Joint Committee on the Budget will be able to come up with some rather meaningful recommendations that can bring this into proper perspective so we can do a better job in the overall budget and appropriations process.

I note the gentleman has been a very distinguished member of the Appropriations Committee and has made many great contributions in that field. The problem is not so much in the impoundment of funds, over which I recognize the President's limited authority, and I think he should have certain authority in impoundment of funds from an ordinary management point of view. But what does concern me is the complete curtailment of programs without the express approval of Congress, laws that have been enacted, programs funded, signed in some cases by the incumbent President, and yet the program completely curtailed or stopped or eliminated.

Can the gentleman enlighten us on that, with reference to impoundment?

Mr. RHODES. I share the gentleman from Florida's concern about completely doing away with programs. I would have thought the better way to approach a problem like this, and I think the President would agree with this, would be for him to send up legislative proposals to repeal or to strike down the programs which he seeks to have ended.

However, I think the gentleman and I would also have to agree, this is not an ordinary time and the budgetary problem was of such an immediate nature that it had to be dealt with right away. And I think the President was very much in the situation of the man who had to attract the attention of the mule by hitting him over he head with the 2 hy 4. This is exactly what he did.

There are some fairly extreme actions which were taken in the budget in this particular year which the President would have preferred not to take, but his analysis of the budgetary situation was such he felt it necessary to do that.

Mr. FUQUA. I just might say to the gentleman, it is certainly not this gentleman's intention to impugn the motives of the President or present Director of the Office of Management and Budget in this legislation. I think it should have happened in 1921 when the Bureau was created and particularly even more so with the added responsibilities that have been placed in the Office of Management and Budget, that the Director be held answerable to the Congress by his confirmation, whether he is appointed by a Democratic or Republican President.

This is just a philosophical feeling and is not directed at the present occupant of the White House, or whomever may follow him.

Thank you, Mr. Chairman.
Chairman HOLIFIELD. Mr. Brown.

Mr. Brown, Mr. Chairman, I notice that the hour is late, but I would like to impose on your good nature, if I may, to read a question that I directed to Mr. Ash when Reorganization Plan No. 2 of 1970) was up.

At that time, I said:

It seems to me there is a substantive difference in whether or not the Director of the Bureau of the Budget has the President's ear directly or whether he becomes a participant with the other members of the Domestic Council in hammering out policy. I am not privy to everything that goes on in court, but in the past the Bureau of the Budget and the Secretary of the Treasury and the chairman of the Council of Economic Advisers sat down from time to time with the President to discuss economic policy and this was very different from domestic policy.

Domestic policy sprang from other sources, domestic recommendations, but the economic policy was something considered separate and apart. From time to time there was added to that group the Chairman of the Federal Reserve.

Now, is that separate input still going to be possible under this reorganization plan? Will the Director of the Bureau of the Budget and other people that are involved with the economic situations of the Council have a separate voice that doesn't go through the Domestic Council?

Mr. Ash's response, in effect, was, "yes.” What was trying to be set up here was an opportunity for the Director of the Bureau of the Budget to resolve domestic program priorities within the Domestic Council. And then for him to also have separate input into the ear of the President about his views about economic policy and how the budget should reflect that economic policy.

John, my concern was then that the Chairman of the Domestic Council would preside over these sessions, agreement would be reached, and the Congress would have no way of finding out how the agreement had been arrived at or what the alternative positions were.

I gathered from the testimony of the gentleman who preceded you, Mr. Melcher from Montana, that in testimony before the Agriculture Committee, for instance, the Secretary of Agriculture had commented that he would have preferred maybe to have his program go through, not be one of them that was cut, but that was the decision that was made.

My question is, do you think, without this legislation, making the Director of the Office of Management and Budget a Senate-confirmed appointee of the President, that we are likely to continue to get information about the economic decisions that have been made in terms of the budget by the executive branch? Are there other vehicles for secretaries of the various departments who are confirmed officials?

Mr. RHODES. Well, I can't imagine that this legislation is either going to help or hinder us in getting information which the Executive feels that he can and properly should divulge under the doctrine of executive privilege.

As far as that particular point is concerned, I think, however, it is necessary to realize that the Director of the Office of Management and Budget, wears at least two hats. One, he is an operating head, second, he is an adviser to the President. I can't imagine that he would be inhibited as an operating head by being confirmed by the Senate, but I can imagine him being very definitely inhibited as adviser of the President, by going through the confirmation.

Mr. Brows. And if, in fact, you inhibit him, the President is going to have his adviser on the budget in some other location, where the candor with which the exchanges go on about the budget would not be privy to full public view, I would assume!

Mr. Rhodes. That was the point I was trying to make. Exactly. Mr. Brown. Thank

you. Mr. FUQUA. Mr. Chairman, if you will yield to me, I didn't want to take up any of the gentleman's time, but my good friend, in his dissenting views of the disapproval resolution in 1970, the gentleman from Ohio said:

The Congress, in turn, has the constitutional responsibility for seeing that the executive branch is executing the laws properly and managing the machinery of Government efficiently and economically. And, obviously, if this duty is to be discharged responsibly, the Congress must maintain a close and watchful eye upon the operations of the Executive Office of the President-the fount of all major directives within the executive branch and the source of all major policy,

Mr. Brown. The gentleman hasn't changed his opinion on that one whit. My concern is whether or not the two functions provided for the Director of the Office of Management and Budget--one is the function of being an adviser to the President, and the other one is an operative role can continue to be done in one office if this legislation is passed.

And I am concerned that they might not be. What we may wind up with is, in effect, somebody else then being the budgetary adviser to the President, establishing what the budget policy will be and this job being downgraded to the point it will not be what it is today.

Chairman HOLIFIELD. Would the gentleman yield ? I say to my friend from Ohio that there is no doubt in my mind at all, that the very able Secretary of the Treasury, Mr. Shultz, advises constantly with the President on matters having to do with fiscal policy, and yet he is confirmed by the Senate and he does appear before congressional committees. I am sure, when he appears before congressional committees, he has no trouble in differentiating between a question related to facts and one related to confidential discussions with the President.

So I would suggest the gentleman think on that point and that he maintain his position, which happened to coincide with the Chair's, on the disapproving resolution of 1970.

Also, I am not sure the gentleman was here this morning when Mr. Brooks said he is working on some amendments which he plans to bring before the committee after the witnesses have testified. As I understand, he hopes to complete those amendments this afternoon, which may alleviate some of the doubts I have in my mind and maybe some others.

Mr. RHODES. Mr. Chairman, might I comment on this last exchange very briefly, just to say, Mr. Shultz, of course, has two hats. He is Counsellor to the President as well as Secretary of the Treasury. I merely suggest the probability that in giving advice to the President, he does so more under the counsel hat upon which he is not subject to confirmation than he does under the Secretary of Treasury hat.

Chairman HOLIFIELD. That is possibly true.
Mr. Brown. Precisely.

Chairman HOLIFIELD. But the gentleman recognizes that all Cabinet officers have confidential sessions with the President. They would be

less than human and less than loyal to the President if they did not have a degree of confidentiality as to expressions on policy and that sort of thing with the President.

I doubt very much if any Senate committee or any House committee could cause them to break their own judgments as to what was proper and what was improper with the relationship with the President. At different times, with different Presidents, including the present President, I have had conversations which I deemed to be of a confidential nature and have not revealed to the press or others, and I am sure they do the same.

The Chair is faced with a time situation and we will excuse you now.

Mr. Rhodes. Mr. Chairman, may I express my appreciation to you, my good friend of many years, for the courtesy of the committee.

Chairman HOLIFIELD. Thank you very much.
Mr. Moorhead.

Mr. MOORIIEAD. Mr. Rhodes has made the most eloquent statement which could be made against this bill, which bill I happen to favor.

Chairman HOLIFIELD. I see that Director Roy Ash has been in the audience and patiently waiting.

Mr. Ash and Mr. Dixon and Mr. Cohen, who is also an afternoon witness, I would say that in view of the fact that the other three Congressmen who asked to appear did not appear, and knowing the importance of the witnesses that have been scheduled for the afternoon, that we will schedule you, Mr. Ash, and Mr. Dixon, in that order, or together if you wish to appear at the same time at the table. I understand Mr. Dixon will be excused until 2:30. But you can start off at 2 if you will, Mr. Ash.

We have your statement and I think probably we should hear that rather than just have it put in the record, unless you want it put in the record.

Mr. Ash. Mr. Chairman, I would like to read my statement and I can do it as we reconvene.

Chairman HOLIFIELD. Yes. When we reconvene at 2, you will be given that opportunity.

(The following statements were submitted for the record :)


FROM THE STATE OF ARKANSAS Mr. Chairman and members of the subcommittee, thank you for giving me this opportunity to make a statement in support of the proposal that the appointment of the Director and Deputy Director of the Office of Management and Budget be made by the President with the advice and consent of the Senate.

I am sponsoring this proposal as an integral part of my efforts and support for insuring that the Congress control the national budget and the setting of national priorities. The Congress has this constitutional responsibility. The 535 Members of the Congress by virtue of their direct election by the people, their diversity and their first hand knowledge of national needs is the branch of the Federal Government best able to represent the multitude of interests of the people of the Nation.

In recent years, the executive branch has used the OMB to control and shape the budgets of the various departments and agencies and thereby to determine which needs of our society to spend money on and how much. The manner in which the Director and Deputy Director of OMB has been named in the past and the fact that they are not directly responsive to the Congress has led to a subversion of the constitutional principal of separation of powers.

One of the bluntest examples of the Executive Office's attitude toward congressional authority in fiscal matters was heard on the January 30, 1973, CBS Morning News with John Hart program. Newsmen Dan Rather and Nelson Benton were interviewing Presidential adviser John Ehrlichman. The following exchange came during a discussion of Federal budgetmaking practices :

Mr. RATHER. Well, speaking of testimony before Congress, the budget is now primarily made up according to Sam Ervin, the Senator from North Carolinaby-and managed by the Office of Management and Budget. But the man who directs the Office of Management and Budget and his associate, as I understand it, are not required—they don't require Senate confirmation. Is that correct?

Mr. EHRLICHMAN. That's right.

Mr. RATHER. Well, why should they? If they're going to have that kind of power, why shouldn't they be accountable at least to Senate confirmation?

Mr. EHRLICHMAN. Well, Senate confirmation ways—when you talk about thatwhat you're saying is the Senate ought to participate with the President in the choice of the individuals. It happens that the way the Office of Management and Budget is set up-by act of Congress-by reorganization plan-is that all the powers that formerly were in the Bureau of the Budget and other places around the Government, have been delegated to the President of the United States, and he in turn delgates to the Office of Management and Budget, to that Director, any powers and duties which he wishes to delegate. So that the only powers that the director of OMB and his deputy have are derivative from the President personally. They're not set up by statute.

Now, you're getting into this area of just five or six personal assistants to the President whose powers are only derivative of the President's power and you get to the basic constitutional question of whether, in effect, the President ought to be confirmed by the Senate. He isn't. He's elected by the people.

Mr. RATHER. But you're getting into the area of one-man rule. I mean (interruption).

Mr. EHRLICHMAN. Sure, well, that's what the President of the United States is, Mr. Rather.

Mr. RATHER. One-man rule?

Mr. EHRLICHMAN. Yes, sir; he is the only elected officer-elected by all of the people of the United States, unlike Senators and the Congressman.

The constitutional system has contemplated that the President would always have reserved to himself a few personal assistants, to assist him in the discharge of his duties. And, the Congress had said-by its actions—that this budget process is the President's duty.

So, I think we have to be very scrupulous about preserving the constitutional system.

I had a good talk with Senator Ervin about this yesterday. To my knowledge neither the President nor any of his assistants have disavowed the stance taken by Mr. Erlichman. I assume that his comment that "*** the Congress has said -by its action—that this budget process is the President's duty * * *” he meant the passage of the Budget and Accounting Act of 1921 under which the Bureau of the Budget-or the Office of Management and Budget-was established.

It is undeniable that the Congress passed that act. And, what Congress can enact it can amend or repeal. The Executive's practice of reinterpretation, misinterpretation and distortion of the law makes it clear that the time has come to amend it. To make it crystal clear to the Executive that Congress has no intention of abdicating his responsibility for the national budget.

Our constitutional system must be preserved-not twisted into a new and dangerous shape.

The law must be changed to make the Director and Deputy Director of the Office of Management and Budget be confirmed by the Senate. These powerbrokers must become responsible to the Congress for their actions and responsive to the needs of the people. This Nation cannot afford to allow a miniscule group of elitists who believe they know best what's good for the people without consulting them or their elected congressional representatives, or being accountable at the ballot box-to dictate the shape and direction of our future.

We must rise above politics in considering this proposal.

Many people support the President's budget-cuts decisions, especially those persons who do not support social programs or other domestic programs. But, the evidence shows that even these people do not want to put all the power in the hands of one man.

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