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least three accounts would have to be kept to show by fiscal years what was being spent under each appropriation.

Senator WHERRY. Why shouldn't it be done?

Mr. WEITZEL. It could be done, but it is something that would be terrifically expensive.

Senator WHERRY. What would you get different in the way of an estimate from what you have already?

Mr. WEITZEL. The Appropriations Committee now have the benefit of those figures, but the Congress as such does not have the benefit of them in a usable place.

Senator BYRD. I think it would make it clearer to explain that you propose to substitute the control of obligations for the control of expenditures. The expenditures for technical reasons would be set. up as information, but this section 2 would be applicable to obligations rather than to expenditures.

Senator WHERRY. I see that now. I didn't understand that.
Senator BYRD. It is a technical subject.

Mr. WEITZEL. It would require a considerable amount of accounting. It has been estimated it would at least double the accounting expense of the Government to try to put a limitation first on obligations and then on the money to be spent to liquidate those obligations. In the face of that it was considered that in a great many instances an appropriation is made which is intended to be expended during the year for which made. For example, a salary appropriation would normally be pretty well expended by the end of the fiscal year.

The real question which is sought to be solved here is as to appropriations which continue available for obligation beyond the end of the fiscal year. Congress may appropriate $10,000,000 to be available. until expended for building a building, or building a dam, or some other purpose. There will not be control unless Congress specifies it over the amount to be obligated during any particular fiscal year over the life of that appropriation. If there is not control over obligations, of course, there will be difficulties in trying to control the amount to be expended, paid out, during any particular fiscal year.

However, if Congress in the appropriation bill specifies that where an appropriation is going to be available for 5 years, only 20 percent of it shall be available for obligation during the first fiscal year, it will automatically get a certain amount of control over expenditures because you can't expend it until it is obligated.

Senator BYRD. That is what this proposed change would do.

Mr. WEITZEL. That is right. We feel the information which is called for in the resolution as to expenditures would be very valuable and would help Congress in estimating the effect of its action on the future expenditures of the Government.

It has an estimate of the revenues, and it will have a pretty good estimate of expenditures, based on experience. I think that could be done, but that estimate will not be frozen into a limitation that would require a control account to be kept, which would be charged with every dollar spent until you get to the ceiling.

You would have your control accounting on the obligation just as you now have, but then you would also have it in the appropriation

bill, something along the lines of this paragraph which I will now read. Senator WHERRY. Which is the suggested amendment of section 2? Mr. WEITZEL. Yes; which could be either substituted for the paragraph or put in as a new paragraph 3. This is the way it is here [reading]:

Each general appropriation bill shall limit the amount to be obligated during the ensuing fiscal year under every item of appropriation provided therein, the availability of which for obligation shall extend beyond the close of such ensuing fiscal year, and shall similarly limit the amount to be obligated under all other prior appropriations under the same heading available for obligation during such ensuing fiscal year: Provided, That this paragraph shall not be construed to prevent the entering into of a contract or contracts to the limit of the amount appropriated or otherwise authorized by law, so long as such contract does not provide for the delivery of goods or the rendition of services during that year in excess of the limitation on obligations; Provided further, That this paragraph shall not be applicable to appropriations for the payment of judgments, certified claims, or amounts authorized under private Acts of Congress, or to appropriations for the public debt, or interest thereon.

Now, the intended effect of that would be to prevent the departments from taking a $10,000,000 appropriation, which is available until expended, and going out and obligating the whole $10,000,000 during the ensuing fiscal year. Perhaps I had better say obligating the appropriation for deliveries to be made or services to be rendered during the ensuing fiscal year.

The Department could still enter into a contract for $10,000,000 to be prosecuted over the next 5 years, perhaps, but it could not provide that under that contract any more goods should be delivered or services should be rendered than the limitation which you would provide in the appropriation act. You might provide an appropriation for $10,000,000 to be available until expended for building a public building, of which not to exceed $1,000,000 shall be obligated during the fiscal year 1948.

That would mean they could enter into the contract, but they couldn't pay out under obligations for deliveries during 1948 more than $1,000,000. Automatically you would get a large measure of control on expenditures without introducing a great deal of additional accounting; and you would substantially, I believe, serve the purpose of this original resolution because these are the cases where you need to exercise some additional control.

For the majority of appropriations in number, perhaps 80 percent, salaries appropriations and miscellaneous expense approriations, you would automatically have a limit on obligations by the amount of the apropriation. You would appropriate $1,000,000 for obligation during 1948, and if it was all obligated during that fiscal year, it might be actually spent out of the Treasury later, but substantially all of it would be both obligated and spent by the close of the fiscal year. You would not need this additional accounting control over expenditures.

You would automatically have a control over obligations.

Senator WHERRY. Let me ask a question. One of the provisos is that you do not want a limitation on the right to go ahead and contract, say, the $10,000,000 over 5 years, provided you don't exceed the obligations in any one year.

Mr. WEITZEL. Yes; provided you don't exceed the obligations.

Senator WHERRY: What is the difference in that limitation and the Presidential moratorium on funds that had been appropriated and authorized?

Mr. WEITZEL. There is a difference in this respect, Mr. Chairman, that Congress would be putting the moratorium on here. Congress would be saying how much could be obligated for delivery next year rather than the President.

Senator WHERRY. Except that you want the authority to go ahead and make the contract for 5 years.

Mr. WEITZEL. I wouldn't say we want that authority.
Senator WHERRY. That is the interpretation.

Mr. WEITZEL. That would be the authority to enter into a contract. That could be handled differently by making an annual appropriation for payment under contracts, and providing the contract author


There are some cases such as public works, mainly, where it is necessary to have a contract, as you can well understand, extend over several fiscal years. In such cases it has been found that a contractor is unwilling to enter into a contract unless Congress has provided some means of making payment under the contract.

Actually, the law provides that a department shall not enter into a contract unless it is under an appropriation adequate to its fulfillment or otherwise authorized by law.

Senator HAYDEN. I can illustrate that by the Federal-aid road appropriations. In 1917 Congress passed the original Federal Aid Road Act, and then for a series of years appropriated a total sum of money to be allocated among the States. Some States were slow in matching the appropriations made in advance, and the money remained in the Treasury.

Congress changed the system in 1921 by providing that a certain sum of money would be apportioned among the States, and that it would be a contract obligation of the United States to match State funds whenever a State submitted a project and it was approved. Then Congress later actually appropriated the money from year to year to meet the obligations after the States had built 10 roads.

We got away from very large appropriations on the books of the Treasury and accomplished an identical result.

Senator WHERRY. I understand the results. I have that very clearly. I understand Congress has a right to limit its appropriations. You give a pretty good reason there, but you took it from a different approach entirely. I was just interested in asking the question why you want the right to proceed and make a 5-year contract and not be limited by Congress, and yet we are limited by Presidential authority.

Senator BYRD. Congress would have to authorize it first.

Senator WHERRY. Really they are not parallel in a way, but I am intensely interested. I couldn't understand the limitation there, and yet we appropriate and authorize $85,000,000 in reclamation work, and the Presidential moratorium runs against it. Couldn't you make contracts against the funds covered by the Presidential moratorium?

Mr. LAWTON. Under the Presidential moratorium, you had the contracts, and with the exception of the one period from August to October when there was no contract to be let until they reviewed the material

situation. Then you could utilize the contracts. You would control the rate of expenditure under those contracts, and that is what this does.

Senator WHERRY. We are in this same category now?

Mr. LAWTON. This is in that same category. You are not in it now prior to this, but under this you are on that same basis. You are controlling the rate at which a large dam, for example, would be prosecuted.

Senator WHERRY. That is, the expenditures?

Mr. LAWTON. The current year's performance of work.
Senator WHERRY. Performance of work?

Mr. LAWTON. You would have to enter into a contract to build a dam like Garrison, for instance, where 8 years are required to complete the dam. This would say in the first year you could perform so much work and receive so much in the way of goods. In the second year whatever appropriation you made would control the amount you could do in that year, and the same with each of the succeeding years.

You couldn't pile it up in 1 year or you couldn't, if you deferred it, you would have to amend this appropriation.

Senator WHERRY. I can see where the Congress can limit its authority and legislation. Where does the President get his authority to execute a moratorium against those funds?

Mr. LAWTON. The authority there, I suppose, in real basis stems from his constitutional duty to carry out the laws and see that they are faithfully executed.

Senator WHERRY. There is no law for that, is there?

Mr. LAWTON. There is the Constitution.

Senator WHERRY. To carry out his duties? You mean it is a constitutional authority which is the precedent or basis upon which he can declare a moratorium on funds we have appropriated?

Mr. LAWTON. It stems from his authority to see that laws are faithfully executed. You had a condition there where you had several programs that were provided for by the Congress. You had a shortage of materials and a shortage of labor.

The question was simply not to say that he was not going to carry out those laws, but that the important thing to do first was housing, veterans' housing, and that you could slow up on some of these other programs, which required the same material and the same labor. It was simply a question of timing and not a question of saying, “We are not going to carry them out," but a matter of saying, "We will carry them out at a slightly slower rate."

Senator WHERRY. That is very good reasoning, but I would like to know from where the authority comes.

Mr. BARTELT. Basically, Mr. Chairman, an appropriation representsthe maximum, not the minimum, which an executive agency can spend. If any agency spends only part of that appropriation, it is still complying with the law. I should think it would be on that basis, that basic principle.

Senator WHERRY. That isn't what I am talking about.

Senator IVES. Isn't that fundamentally a matter of basic principle where the Executive acts also as administrator? He isn't mandated to spend all the money that is authorized at any time. He can spend as much or as little of it as he wants to. I think that is the discretion that automatically is left to the Executive.

Senator HAYDEN. We have a Government of three separate, equal, coordinate branches-the legislative, the executive, and the judicialeach functioning in its own sphere.

The legislative branch lays down the policy.

Senator IVES. They authorize it.

Senator HAYDEN. Congress authorizes certain things to be done. Then it is the function of the executive branch of the Government to carry the congressional policy into effect. As has been very well pointed out, if Congress appropriated a larger sum of money than was actually required to do the work, the executive is not required, because that sum was appropriated, to spend it all. An executive judgment must be exercised as to how best to carry out the policy. That is a power inherent in the executive branch of the Government. Senator WHERRY. I agree entirely with that explanation, but that does not run to my question. We authorize, we appropriate. Some of these are continuing contracts. What I want to know is where does the authority exist for the President of the United States to declare a moratorium on those funds authorized and appropriated by the Congress for specific purposes, much of which is spent annually? If you would like to take the time, I would like to have you place in the record a statement as to where he gets that authority. Of course, I can see what you are doing, and I think that is all right in a legislative way.

Does that amendment suit you?

Senator BYRD. Yes.

Senator WHERRY. At the same time, I would like to understand what the authority is for the Presidential moratorium against the use of funds.

Mr. LAWTON. There is no specific statutory authority for or against spending an appropriation within a given period of time.

Senator WHERRY. That is right.

Mr. LAWTON. The Presidential moratorium was not a cancellation of any appropriations.

Senator WHERRY. It held it up.

Mr. LAWTON. It delayed it; yes, sir.

Senator WHERRY. And some of them were pending contracts, the work of which is just as desperately needed now as it was a year ago. I think 35,000,000 out of 85,000,000 in reclamation was under contract and waiting to be carried out.

Of course, they come in under the justification of shortage of materials, priorities for veterans, all of which is justification for what was done. I am asking only "Where does the authority spring from?" We are talking to the General Accounting Office and also to the Treasury. The President must have been advised by somebody. I have asked the question of some qualified men and they can't cite me the authority.

Mr. LAWTON. If you are referring to specific statutory authority, there is none.

Senator WHERRY. Where is it in the Constitution?

Mr. LAWTON. It goes back to the general provision to take care of the faithful execution of the laws. That question is in effect a general directive to the President to operate and manage the executive branch of the Government.

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