Senator BYRD. That, Mr. Chairman; I think can be worked out. Senator WHERRY. They can make it flexible so that it runs to one whole department, and that is your idea if you can do it.

Senator BYRD. As far as a definition of "expenditure" is concerned I think that a very simple one is a withdrawal from the Treasury. That is what it means under the Legislative Reorganization Act. That is what we meant when we provided for a ceiling on expenditures. Mr. BARTELT. Well, some expenditures charged in the budgetand Mr. Lawton could explain this in greater detail-do not involve actual cash withdrawals from the Treasury, and those items would have to be taken care of, it seems to me.

Senator WHERRY. Couldn't that be done in the legislation? What I am trying to ascertain here is whether there is any hurdle, legislatively, that might throw this thing out. Is there an impossibility there, or is it a question of policy or a question of mechanical difficulties entailing a considerable expense in operation?

Mr. BARTELT. Fixing an expenídture limitation on the departments as a whole, provided term "expenditure" is defined, should not be insuperable, but the fixing of a cash limitation on each appropriation would, in my opinion, be very expensive.

Senator WHERRY. Have you discussed that in this memorandum? Mr. BARTELT. As I say, it is not discussed there in much detail, but it is there.

Senator WHERRY. I just want to bring out all the facts.

Senator BYRD. That matter I think in large measure at least, Mr. Bartelt, can be worked out without doing any injury to the principle of the bill. I would like to make the suggestion that Mr. Lawton and Mr. Bartelt confer with Mr. Rice

Senator WHERRY (interposing). That is exactly what I was going to suggest, and see if they can work out the necessary amendments to overcome that difficulty.

Senator BYRD. Then also there are certain permanent appropriations such as the appropriation for interest on the public debt, and provisions should be made for the inclusion of that so that when the totals are added up in the appropriation bill it would include all the expenditures for the fiscal year. But that would be a simple matter.

Senator WHERRY. Now this objection No. 6 which you have listed here:

Strict enforcement of annual expenditure control might prove embarrassing to the Government in connection with payments pursuant to commitments made near the end of the year but do not clear for actual payment before the year has expired. Just what is that?

Senator BYRD. This amendment would cover that.

Mr. LAWTON. I can clarify that by a few figures here.

In the average annual appropriations that are passed there is a considerable portion of those appropriations that are for personal expenses. Normally there is a carry-over of one pay period on a cashwithdrawal basis. The checks for the last pay period are paid in July and cashed in July. There is about a 4 percent carry-over. A 60-day period would substantially cover that.

In payments for transportation the carry-over is much longer. It runs from 33 to 40 percent of the amounts carried over, running from 120 to 140 days for that sort of an item.

It runs from 35 to 90 days in printing and binding. That is due to the fact that the Printing Office takes some time to deliver an order, sometimes as much as 6 months to print an order. So there is a carry-over of 20 to 25 percent of the printing items into the second year.

Senator WHERRY. Is that because of the congested condition or the volume of business?

Mr. LAWTON. It is largely volume.

Senator WHERRY. When we get back to peacetime conditions will that be reduced, that time element?

Mr. LAWTON. Some, but there has always been a lag on work that didn't have a high priority. They will push work such as taking care of the Congressional Record, and things of that sort.

Then in travel and communications, they will come close to getting within the 60-day limit. The average there is 55 to 75 days. That is travel vouchers and communications expense and contractual services, supplies, and materials.

Rents and utility services would generally be within the 60-day period. They run from 35 to 55 days after the end of the year, as a lag. Those are current billings, generally, and are billed the month after the service takes place.

Those are the types of things that have a normal lag. This is a normal pattern picked out from the considerable number of appropriations over a period of years.

Senator WHERRY. There are other examples that you might mention, but these would be ones that

Mr. LAWTON (interposing). Those are in the annual appropriations; that doesn't apply to public works and things of that sort.

Senator WHERRY. If you made the maximum 90 days, that would cover most of it, would it not?

Mr. LAWTON. Yes; except the transportation, and that could possibly be speeded up. The delay there is in the rendition of bills.

Senator WHERRY. This amendment that the Senator offers on page 2 is offered to correct the very difficulty that you mention.

Senator BYRD. Yes; but Mr. Lawton thinks that 60 days is not sufficient.

Mr. LAWTON. I would say that 60 days would fail of covering two or three classes of expenditures.

Senator BYRD. I see no objection to making it a maximum of 90 days, if Senator Butler is agreeable.

Mr. LAWTON. That would cover the bulk of annual expenditures. But the question of when you will know that is a question for Mr. Bartelt to answer.

Senator WHERRY. If the thing were put into law, then it might speed it up. I can see with respect to printing, where you have all these priorities, that you might have a handicap that would be justifiable, but in connection with getting the bills in, if you made it 90 days, wouldn't that speed it up; wouldn't you get them in then?

Mr. LAWTON. It is possible that you would, with the reduced volume. Senator WHERRY. If this were made 90 days, would that amendment, do you feel, be practical and answer the questions that have been raised?

Mr. LAWTON. That gets into the accounting field primarily and I would rather have Mr. Bartelt answer that.

Mr. BARTELT. I would say that that would not obviate the necessity of maintaining a dual set of accounts, in my opinion. The only thing that would obviate, as I see it-that difficulty-is to strike out the word "show," in line 6 of page 2, and insert in lieu thereof "shall be accompanied by a statement." My point is that if that is written in the appropriation bill, then it seems to me that we have to maintain a separate cash account for each one of those appropriations.

Now, the matter of supporting the bill with a statement showing this information is something entirely different from writing it right into the appropriation bill.

Senator BYRD. It is very different because this makes it a matter of law, and what Mr. Bartelt suggests is just a matter of information. There is a big difference.

Mr. BARTELT. And that, it seems to me, should be very carefully considered because, if you write it into the law, it means that you have to maintain a separate set of accounts.

Senator BYRD. There certainly ought to be some way whereby if you spend $37,000,000,000 a year you can get accurate information as to what is spent in each fiscal year and what is not.

Mr. BARTELT. We propose to give you the information, but it is a question of whether you want to write into the law a dual requirement-one to maintain controls on a cash basis and the other to maintain controls on an obligation basis.

Senator BYRD. If you don't write it into the law, then the departments are not compelled to abide by it; they simply give the information.

Mr. BARTELT. If you fix the limitation on the department as a whole, wouldn't that accomplish your main objective and at the same time avoid putting the departments into a strait-jacket so that they are prevented from operating at the end of the fiscal year?

Senator BYRD. That is what we are trying to do-to prepare a satisfactory amendment.

Mr. BARTELT. These amendments that you propose will not do that. Senator BYRD. I understand that. I just stated that there was another amendment that we wanted to work out. If we are spending 30 and 40 billion dollars a year we ought to have an accounting system that tells us how we have spent it.

Mr. BARTELT. The accounting system does show how it is spent. Senator BYRD. I don't mean that there shouldn't be some flexibility in it. We have been trying to work that out and we asked you gentlemen nearly a month ago to work out something along that line; but to take it completely out of the law would, to my mind, nullify a good deal of the benefits of the proposed law.

(Discussion off the record.)

Senator BYRD. Mr. Bartelt should have made his opposition before the Reorganization Committee, which considered the policy which was later enacted by Congress fixing a ceiling on expenditures.

Mr. BARTELT. Mr. Chairman, only one person out of a hundred, I imagine, would have interpreted the word "expenditure" to mean cash withdrawal, because the term "expenditure" usually is understood to mean an obligation that you incur. That is the interpretation that is usually placed on such a term in business.

Senator BYRD. Let me ask you, Mr. Bartelt: That isn't the interpretation placed upon the Reorganization Act; is it?

Mr. BARTELT. Not as Congress has interpreted it.

Senator BYRD. Congress has already decided that policy.

Mr. BARTELT. I am talking about the time it was under consideration.

Senator WHERRY. If the Congress has adopted that policy, and that is Senator Byrd's statement-and personally, as I say, I don't want to prejudge this thing, but I am inclined to go along with him on that— what I am asking is: Can you perfect an amendment which will accomplish the purpose that has been set out here, or does it take a complete change-over mechanically, so that the administration of the act would involve an expensive change-over and be impractical?

Mr. BARTELT. Before the law can be written, Congress must determine as a matter of policy whether it wants to control the limitation referred to in the appropriation act by specific appropriations, or whether Congress is content to exercise that control over the total for the department or for all departments.

Senator WHERRY. That is the flexibility feature. We could still do that, couldn't we, and yet not settle the question I have raised?

Mr. BARTELT. Well, if you permit this word to stand as it is in line 6 on page 2, in my opinion it will require a separate system of accounts, and that is for Congress to determine.

Senator WHERRY. Regardless of the flexibility, if we let the language there stand as it is, it is your opinion that we would require this dual system of accounts?

Mr. BARTELT. That is my opinion.

Senator BYRD. At this point I would like to read into the record the appropriate part from section 138 of the Legislative Reorganization Act:

The report shall be accompanied by a concurrent resolution adopting such budget, and fixing the maximum amount to be appropriated for expenditure in such year. If the estimated expenditures exceed the estimated receipts, the concurrent resolution shall include a section substantially as follows: "That it is the sense of the Congress that the public debt shall be increased in an amount equal to the amount by which the estimated expenditures for the ensuing fiscal year exceed the estimated receipts"

*

Congress has already adopted the policy of expenditures being the money paid out in that year.

Mr. BARTELT. But that doesn't say that there shall be a separate limitation for each appropriation.

Senator BYRD. You are arguing on another matter now; you are arguing on the question of what is meant by the word "expenditure." Mr. BARTTUT. Im arguing on the feasibility of carrying the legis

lation into effect.

Senator BYRD. You don't deny, do you, that the act, as Congress has interpreted it, means that "expenditure" is money paid out in that fiscal year?

Mr. BARTELT. I would rather not express an opinion on that because there is some question

Senator BYRD (interposing). You know what Congress has been trying to do; it has been trying to set an over-all ceiling on expenditures. That must refer to the money spent out, because if the ceiling is exceeded and it is necessary to increase the public debt, adoption of a resolution for this purpose is required.

Mr. BARTELT. In business when an order is placed it is usually considered that the money is expended.

Senator BYRD. You are the representative of the Treasury and you are not clear in your mind whether Congress intended by the passage of that act, and the later action taken by Congress, to say that an expenditure is the cash withdrawal in that fiscal year?

Mr. BARTELT. No, sir; I don't think that is clear.

Senator BYRD. Well, we had better stop all this work we are doing and clear that up.

Mr. BARTELT. I think Congress ought to define this term "expenditure" now.

Senator BYRD. It was certainly my understanding, as one Member of Congress who voted on it, that I was voting to limit the expenditures paid out in cash in that fiscal year, otherwise this thing about increasing the public debt would be absurd.

Mr. BARTELT. So that there will be no misunderstanding, I don't want to have it appear that I am objecting to the objective of this resolution. My only question is whether or not it is necessary to place a cash limitation on each appropriation, because that gets you into administrative difficulties and additional expense.

Senator WHERRY. Now we have Senator Butler. The first bell has rung

Senator BUTLER. Yes; I realize our time is rather limited, so I will be very brief.

Senator WHERRY. I didn't mean that, Senator; I meant that we would be glad to continue this to a later date so as to give you all the time you need, if you would prefer.

Senator BUTLER. No; I only have a short statement and I can finish before it is time for us to be on the floor.

STATEMENT OF HON. HUGH BUTLER, UNITED STATES SENATOR FROM THE STATE OF NEBRASKA

I want to say that it is indeed an honor and a pleasure to be associated with the distinguished Senator from Virginia in another piece of legislation that I think is quite important. I am referring to the first one in which he and I were associated, the Corporation Control Act, and in that connection I see here about the same faces that we saw in the 30 to 40 meetings that we had in connection with the passage of that act. I consider this resolution of almost equal, if not greater, importance than the Corporation Control Act.

The statement is very short and I will just read it into the record. Mr. Chairman, and members of the Senate Rules and Administration Committee, our entire Federal budget system is a ramshackle structure of inconsistencies and contradictions badly in need of reform. This is just as true of the congressional part of the system as it is of the part controlled by Executive action. The bill you are considering today, Senate Concurrent Resolution 6, is intended to make at least a start toward reform by correcting two of the worst evils.

Under the present system, appropriation action by the Congress is contained in 12 separate general supply bills, plus a number of deficiencies and supplements. This system makes it virtually impossible for any one of us to get a look at the budget picture as a whole. Reductions made in one agency by one bill may be canceled out by increases