Congress now limits obligations to be incurred by the Government through its action in fixing the amounts of the various appropriation items. After necessary obligations have been incurred and the goods or services have been received, the payments therefore are made as promptly as possible. Most obligations are paid in the year in which the expense is incurred, but some payments necessarily take place in a later year due to time necessary for delivery of goods to be. effected, for contracts to be fulfilled, for bills to be rendered, for pay rolls to be prepared, and for payment vouchers to be examined and certified. This has been recognized by Congress in law which permits an appropriation to remain available for expenditure for 2 years after the close of the fiscal year for which the appropriation was made.

The proposed resolution would require Congress to set a new type of limit, restricting the expenditures to take place within a year, in addition to the usual practice of limiting obligations through its action on appropriations. It is impossible to predict with complete accuracy many months in advance the time of delivery on every contract and purchase order and the time when bills will be examined, found correct, and paid. A limitation on expenditures might operate in many cases to stop payment until the next July 1 on obligations which had been lawfully incurred, with annoyance to those businessmen with whom the Government deals, loss of discounts, increase of interest on refunds and certain claims, and some impairment of the Government's credit.

Certain technical problems would also arise in enforcing and obtaining current reports on annual expenditure limitations by agency and by appropriation items. Some of these involve: the necessary time lag in getting information on expenditures made through disbursing officers abroad, the present use of the "account of advances" procedure allowed by law for the Army, Navy, and State Department, the handling on noncheck transfers of funds between agencies, the procedure for handling repayments to appropriations and revolving funds, the relationship of disbursing officers of other agencies to the Treasury Department, the existence of special-deposit accounts exempt from the usual warrant pro'cedures and controls of Treasury and the General Accounting Office. Some of these problems might be solved by administrative action; others would probably require legislation in order to accomplish the results intended.

Subsection (c) (1), which proposes the consolidation of all the appropriations into a single bill, would have the advantage of enabling Congress to treat the President's budget as an entity rather than as a collection of departmental appropriation proposals. The single bill would also seem to be in line with the principle of the legislative budget. The fear which we expressed that such a bill might become a ready vehicle for legislative riders seems borne out by the action on the recent deficiency bill in which an attempt was made to foreclose the decision on rent control and sugar rationing in the appropriation bill at the time when legislation was pending on these subjects before the appropriate legislative committees of Congress. Unless the President were granted some form of item veto power over items and legislative provisions in appropriation bills, he would be placed in a more difficult position than he is at the present time.

We recognize, of course, that there is a difference of opinion as to whether item veto power can be granted through a legislative act or whether it requires a constitutional amendment. Either course would, of course, involve delay. However, the step proposed in the resolution is so important and so far reaching that we believe it should be taken only after a plan covering all of its elements and including all necessary legislative amendments has been developed. A thorough and complete study looking toward improvements in the Government's fiscal and accounting procedures would be a worth-while undertaking. E. F. BARTELT,

Fiscal Assistant Secretary, Treasury Department.
F. J. LAWTON,

Acting Assistant Director, Bureau of the Budget. Senator BYRD. With respect to logrolling, it would appear that under the procedure in connection with the tabular form features of the resolution this evil would be reduced. It would be expected that Members interested in an item at the end of the bill would not be inclined to do any trading with Members interested in items in the upper parts of the bill. With an expenditure ceiling controlling, each

early revision upward would reduce the possibility of increasing later

items.

You must bear in mind, of course, that under the reorganization bill there is an, expenditure ceiling which we are supposed to get, and I hope we will.

With respect to legislative riders on appropriation bills, it must be conceded that it may be more difficult for the President to veto a consolidated appropriation bill than it is for him to veto a single departmental bill. But by the same token the probability of his veto being sustained quickly is increased. It would be very improbable, I should think, that his veto would not be sustained because, unless it were sustained, it would mean practically the discontinuance of all the activities of the Government. But that is a question and personally I would like to see single veto-item veto in some way provided, if it can be done short of a constitutional amendment, and I would even favor a constitutional amendment. Most governors in the States have that power. When I was governor I used it quite a number of times. Senator WHERRY. We have it in Nebraska.

Senator BYRD. With respect to assurance of ample time for Senate consideration of the consolidated bill, I believe the patrons of the bill would support an amendment which would place House and Senate consideration of the bill on a date schedule. That is what we discussed.

With respect to the necessity of establishing accounting controls on expenditures in the executive branch it can only be pointed out. that in effect Congress has imposed expenditure control over appropriation items on an annual, or fiscal year basis, and what this bill attempts to do is to establish the same control in the bills themselves; and it would seem to be inconsistent with established policy if the same controls were not carried through in execution and administration.

With respect to technical difficulties in administration of expenditure controls in the executive branch, it may be said that Congress is having to overcome some technical difficulties of its own resulting from establishment of the legislative budget in terms of expenditures. It is probable that some fiscal flexibility in the use of funds within departments is necessary and an effort is being made to provide for this in the pending resolution, but to date legislative counsel have been unable to devise language to accomplish it. They are still working on it.

With respect to the difficulties resulting from year-end payments, an amendment will be suggested as a part of this statement which is designed to adjust this situation. That amendment, Mr. Chairman, is in line 16, page 2, after the word "year." The amendment reads: Each general appropriation bill shall contain a provision that an expenditure shall be deemed to have been made in a fiscal year with respect to any moneys available for expenditure in such fiscal year, if such moneys are obligated in such year and the expenditure pursuant to such obligation is made within ninety days after the close of such fiscal year.

Then there is another amendment suggested in line 1, page 2, after the word "ends":

The consolidated general appropriation bill may be divided into separate titles, each title corresponding so far as practicable to the respective regular general appropriation bills heretofore enacted.

Senator WHERRY. You are offering those as a modification of your own resolution or amendment?

Senator BYRD. Yes.

Senator WHERRY. I think the record ought to show that.

Senator BYRD. While the point had not yet been raised before this. meeting, the committee is assured that there is nothing in the resolution as it stands to disturb the present system of subcommittee consideration of appropriate legislation. It may be presumed that the consolidated bill would be organized and drawn under titles closely paralleling the subjects of the present 12 bills; they would be sections of the whole bill and these sections could be handled by the various subcommittees. It would require, of course, that all of the titles, or parts, would be combined by the full committees in the respective Houses, and that a consolidated bill would be presented on the floors and considered as such.

Neither would the resolution necessarily preclude the handling of the bill on the floors by the various subcommittee chairmen, each managing the consideration of his respective title.

However, to assure the possibility of this procedure, a suggested amendment will be made a part of this statement, which I have just read.

In view of the fact that section 138 of the Reorganization Act is applicable to appropriation legislation in the current session, it was hoped that the provisions of this resolution also could be made applicable to the legislation this year. At this late date, however, it is doubtful whether it is practicable to make provisions for a consolidated appropriation bill for fiscal year 1948. For this reason an amendment advancing the effective date to the second session of the Eightieth Congress will be suggested as a part of this statement. That is on page 1, line 6, after the word "the", insert the words "second session of the". This change will serve also to afford the Budget Bureau time to prepare recommendations for fiscal year 1949 in accordance with the requirements of the resolution; it will afford the Treasury time to work out the technical difficulties, and it will afford the General Accounting Office time to devise any necessary changes in its auditing methods and procedures.

Meanwhile, if the committee should look with favor upon the suggestion, I am sure that the sponsors of the resolution would cooperate in devising some means for determining the amount of 1948 expenditures which will be provided for in the various appropriation bills which will be enacted between now and June 30. It is suggested that information be provided on each appropriation bill as to the total of the appropriations in each, and so forth, and what part of them is to be expended in the ensuing year. Possibly this might be accomplished in some degree by cumulative expenditure tables carried in the Appropriation Committee reports on the respective bills.

In this connection the chairman of the Senate Appropriations Committee, Senator Bridges, has expressed himself as favoring this resolution on two occasions, once before the Joint Committee on the Legislative Budget, and again in a letter to me. That letter was written to

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me on February 11, 1947, and is submitted as exhibit E. The letter reads as follows:

DEAR HARRY: I am glad to have your letter of February 7 outlining the gist of the resolution which you and Senator Butler have redrafted. I want you to know that I heartily approve of this proposed resolution and I feel that it will be of great assistance to the Members of Congress in presenting prospective budgetary statistics in a readily comprehensible and workable form, something which has heretofore been lacking in the matter of congressional understanding of appropriation bills.

It seems to me that this resolution is in accord with our conversation of last Saturday night and is in all respects an excellent scheme for carrying into effect the intent of the Legislative Reorganization Act.

Sincerely yours,

STYLES BRIDGES.

In addition to that, I would like to ask the Chairman to insert in the record the statements from Congressman Herter; Senator Bridges; Mr. Harold Smith, the then Director of the Budget; Mr. Carter Atkins, executive director of the Connecticut Public Expenditure Council; and Mr. Fred Fairchild, Yale University, representing the committee on Federal finance, Chamber of Commerce of the United States, which is testimony that was given before the Reorganization Committee.

Senator WHERRY. Those statements will be accepted and made a part of the record.

(The excerpts 1 referred to are as follows:)

REPRESENTATIVE CHRISTIAN A. HERTER, OF MASSACHUSETTS

(P. 107 of hearings)

But it seems to me that in the handling of our fiscal affairs here in Congress we have two very loos things. Our appropriation bills come through piece by piece. They never make a pattern until you add them all up at the end of the session. The Appropriations Committee is considering each one of them entirely separately, without regard to an over-all fiscal pattern for that year's operation through the Congress. While it may be cumbersome, I still think it would be very worth while for the Appropriations Committee to postpone throwing into the lap of the Congress any single appropriation bill until they have satisfied themselves on the whole and can submit to the Congress a consolidated balance sheet, so that the Congress has some idea as to how much the Appropriations Committee is appropriating for each one of these agencies, instead of having them string along so you never have a chance to look at the fiscal picture as a whole.

SENATOR STYLES BRIDGES OF NEW HAMPSHIRE

(Pp. 273-275 of hearings)

There are two other phases that I would like to take your time with, if I may. One is the over-all budget consideration.

If all Federal expenditures were annually reviewed and appropriated after an adequate presentation of facts to the Congress there would still be another weakness in Congressional appropriation procedure. This might be termed the piecemeal method of passing appropriation bills. Each of the appropriation bills is now considered individually when presented by the Appropriations Committees. There are no facilities to establish a limit for all appropriation totals so that it might conform either to estimated tax yields or the needs of the taxpayers. Present procedure does not secure comparative measurement of the

1 From hearings before the Joint Committee on the Organization of Congress, 79th Cong., 1st sess., pursuant to H. Con. Res. 18, a concurrent resolution establishing a joint committee on the organization of the Congress.

needs covered by one appropriation bill with the needs of the others. Relatively unimportant projects may be appropriated for in one bill and relatively important projects rejected in another. As a matter of fact, the two Appropriations Committees themselves operate through subcommittees whose knowledge and understanding largely determine the presentation and decision respecting the items in a bill. Therefore, little over-all consideration by the entire committee is given. The lack of this over-all control encourages deficiency and supplemental appropriations which still further weaken congressional control. In 1939 the Secretary of the Treasury stated as follows, with respect to the need of over-all consideration of the legislative budget responsibility:

"If, for instance, the Ways and Means and Appropriations Committees of this House and the Finance Appropriations Committees of the Senate could meet each session as one Joint Committee on Fiscal Policy, to consider the over-all aspects of the expenditure and, revenue programs, simplification and greater effectiveness would result."

The need for some such joint committee facilities will be exigent after the war. If expenditures are not to exceed income, there must be over-all limitation of appropriation totals. It is likewise probable that the financial demands on Government will be such that reductions in budgets necessarily will be more severe than in the past. In justice to the executive branch of Government, such reductions should be intelligently made with proper regard to the relative needs covered in one appropriation bill as compared with the others. This will require more comparative measurement of the necessity for the services covered in each appropriation bill.

This could be done if early in the appropriation season a joint decision of the Senate Finance and the House Ways and Means and the two Appropriations Committees could determine anticipated revenue available for the coming fiscal year and the total of appropriations which should not be exceeded. This would insure an agreed [agreement] upon fiscal policy. Each Appropriations Committee could thereafter withhold presentation of individual appropriation bills until all of them are presented by the subcommittees to the full committee. Then, if the resultant total would overturn the fiscal policy previously agreed to in joint session, they could revise and adjust the individual bills to meet the fiscal policy. Any later decision of either branch of Congress to then exceed the total proposed in any appropriation bill would require showing of where a similar reduction in amount could be made in some other bill or the fiscal policy would be overthrown.

MR. HAROLD SMITH, BUREAU OF THE BUDGET

(P. 674 of hearings)

Short of bringing together the consideration of general tax and expenditure policy, a more consistent congressional policy could probably be achieved in appropriations by consolidating all annual appropriation bills into a single measure. The present practice of dealing with individual bills over a long period of time is not conducive to uniformity of policy; it also contributes to the excessive length of the period between the submission of budget estimates and the beginning of the fiscal year. The consolidation of appropriation bills would have to be accompanied by more stringent rules against the inclusion of legislative provisions in appropriation acts.

MR. CARTER W. ATKINS, EXECUTIVE DIRECTOR, CONNECTICUT PUBLIC EXPENDITURE COUNCIL, HARTFORD, CONN.

(P. 776 of hearings)

We suggest that procedures be developed to set up an over-all fiscal plan for the ensuing fiscal period and to bring all appropriations into a budget of the whole for review in the light of the anticipated revenue. Even though adequate appropriation audit facilities should be developed, the present procedure is weak because appropriation bills are now passed piecemeal. As a result, there is no fiscal plan discussed and formulated beforehand. In fact, there can be no determination of the end result upon the Treasury under the present system, and