what they are of $20 billion, roughly, that we would be down to about $65 billion level for the total budget on a continuing basis which we would achieve at the end of the fiscal 1954.

Of course, you realize that these had to be very rough estimates; but, if you assume the continuing carrying charge of around $65 billion in fiscal 1955, we roughly approximated with the staff of the Senate Finance Committee to be about a $75 billion figure in fiscal 1954. The CHAIRMAN. That is right.

Mr. STAATS. And that has to be a very rough figure.

The CHAIRMAN. Of course, these expenditures go down very slowly after they have once been established, and if we should embark on a great enlargement of the Air Force it is possible there will not be any reduction of these figures?

Mr. STAATS. They would certainly affect any estimate that we provided at that time.

I want to underscore again the roughness of the figures; but, in order to be as helpful as we could to the Senate Finance Committee, we felt that we should forward them our best estimate for the fiscal years 1953 and 1954.

I think you have to underscore very much that the estimate depended on a lot of different factors.

Representative CANNON. How do our rates of taxation compare with those of France?

The CHAIRMAN. Mr. Graham, could you answer that?

Mr. Graham is representing the Treasury Department.

Mr. GRAHAM. I think Mr. Magill has probably made more of a study of the world system than I have, Mr. Chairman.

The CHAIRMAN. I hear that the French don't pay their taxes very carefully and regularly.

Mr. GRAHAM. I will make this observation, Mr. Chairman: that, as you know, there have been representatives here this week of the International Bank and Monetary Fund, and I had occasion to talk with some of them about the tax systems, and it appears that those Governments are putting through increased tax programs to cover their portions, or at least some portion, of the defense program. The CHAIRMAN. Are they collecting the taxes, though?

Mr. GRAHAM. That, sir, I would not attempt to pass on. I would not attempt to pass on their enforcement program, but I was thinking particularly

The CHAIRMAN. I thought you might have some figures per capita, or percentage of national income. You have not got that? Mr. GRAHAM. I do not have anything with me, sir.

Representative CANNON. You say you have no information?
Mr. GRAHAM. I have nothing with me today, sir.

The CHAIRMAN. I think that would be very interesting, if we could have the Treasury present the figures from the other major countries of the world on the basis of national income, per capita, or whichever is the best comparison he can make.

Representative CANNON. It is the general impression that the rate of taxation in England is materially higher than it is in the United States.

Representative REED. Forty percent is what they are paying now. Mr. MAGILL. I think that Mr. Stam of the joint committee has some of those figures.

The CHAIRMAN. We would like those compiled, Mr. Graham, for the purpose of the record.

Senator FERGUSON. I am wondering whether the ECA would not have all the figures on the tax structures of the various countries? They must have looked into that when they were going into the financial figures.

Mr. MAGILL. I would think that they have the figures, Senator.
Mr. STAATS. I am sure that they do have that figure.

The CHAIRMAN. Well, we would like to have that furnished to Mr. Cannon; then, we would like to put it in the record.

Mr. GRAHAM. Yes, sir.

(The information requested is as follows:)

The following table shows the percentage of the national income taken by taxes in a number of foreign countries. The figures are the most recent available, and generally apply to fiscal years ending in 1951. As an aid to interpreting the significance of the figures, a partial breakdown of the tax revenues is shown. The percentage figures shown should be considered as a general order of magnitude, rather than precise measurements of the relative burdens of the taxes collected by the governments of the various countries. The data from which the percentages have been compiled, particularly the national income estimates, vary considerably from country to country in accuracy and completeness of coverage. Furthermore, comparison between countries is made difficult because of such things as differences in the proportion of governmental expenditures met through taxes, and the amount and kinds of services which the various governments perform.

Estimates of tax receipts as a percentage of national income, selected countries, fiscal year ending 19511

1 The fiscal year end date varies among countries from December 1950 to June 1951. Data used for tax receipts of the central governments represent in many cases budget figures rather than actuals. For local governments and insurance taxes, the data were used which were closest to the fiscal year of the central government and represent in most cases estimates or projections based on available data for earlier years. Social insurance data represent the contributions paid by employers, employees, and self-employed to government social-insurance agencies. National income data in general are national income at factor costs and are estimates based on official reports.

Source of data: Economic Cooperation Administration.

The CHAIRMAN. Mr. Graham, do you have any questions or comment as to Mr. Magill's statement or about the estimate of the revenue for the next fiscal year and the following fiscal year? Take the Senate and House tax bill as reported and divide it up and see how it comes out. What would be the revenue next year, in your judgment, for this present fiscal year and the following fiscal year?

Mr. GRAHAM. We think, for the purposes of your discussion here today, that the estimates which you have cited are approximately

correct.

The CHAIRMAN. Sixty-five billion dollars or sixty-six billion dollars? Well, it is very nice to plan that, once you get these expenditures up on a very high basis, then you are going to cut them down, but we are not in actual war; we are in a threatening war, and if some act is committed by Russia they may, instead of spending $85 billion, spend $100 billion; and this level may keep up for an indefinite period. Nobody knows how long.

Representative REED. Senator Byrd, if I may interrupt you, you have done a magnificent job in pointing out the expenditures which you regard as rather unnecessary expenditures. Have you any recent figures in regard to the increase in the personnel of the various departments of the Government?

The CHAIRMAN. Mr. Bell, could you give us a statement on that? Mr. BELL. It has increased, but I would rather give the figures to you after I have checked them.

The CHAIRMAN. The personnel is now approximately two and a half million? It was one and seven-tenths million at the postwar low point.

And we are adding at the rate of how many?

Representative REED. That is what I want, how many are we adding, and is it necessary?

The CHAIRMAN. The military is supposed to add more than 300,000. Representative REED. I mean outside of the Armed Forces.

The CHAIRMAN. That is the civilian personnel. I think we are approaching certainly a 3 million civilian personnel. This compares to 1.7 million after the last war. And it compares with 900,000 before the last war, about 1940. We are adding approximately, as I understand it, about 1,000 a day since March 1950. Of course, most of that is in the military, but they are civilian employees, and we are not counting the armed services, those in uniform.

I would predict that within a year, or a little longer, we will have 3 million civilian employees drawing an average of about $3,500, at present pay rates. That would run considerably over $10 billion, just for that item alone.

Representative REED. Do you think that hoarding or stocking up is necessary?

Representative DOUGHTON. Don't you think, Mr. Chairman, that instead of the Director of the Budget or the administration telling us what we must spend, that Congress should tell the administration what we can and should spend?

The CHAIRMAN. Yes, I do; yes. The purpose of this meeting is to try to devise the ways and means whereby Congress can do that. We are now greatly handicapped by the method of authorization and long-term commitments and different kinds of appropriations.

Mr. Magill, can you make a statement as to how many kinds of appropriations there are?

Mr. MAGILL. Well, there are probably six or seven, I am told by Herbert Miller, the director of the Tax Foundation.

The CHAIRMAN. Will you give us that list, Mr. Miller?

Mr. MILLER. Well, several of them are listed here. You have permanent indefinite, you have permanent definite, annual definite, annual indefinite, to liquidate contract authorizations; you have some that have certain individual strings tied to them, because of the basic legislation that is involved.

90490-51-4

The CHAIRMAN. Any you have open-end appropriations, too? Mr. MILLER. Yes, exactly; you have open-end appropriations which-well, no one knows what they are, in accurate dollars.

The CHAIRMAN. Would the Treasury or the Budget furnish for the committee a definite statement as to the different kinds of appropriations and explain what they are?

Mr. STAATS. I think that the budget could supply that information for the committee.

The CHAIRMAN. And how they could be controlled, and so forth? I imagine the members of the committee would like to question Mr. Magill. He has made a very important statement here and laid down some principles that are very vital. We are trying to restore the power over appropriations to the Congress.

Senator Ferguson, we are pleased to have you visit with us; do you have any questions?

Senator FERGUSON. Well, I do not have. I am greatly concerned, though, with the problem that we are facing. It is very difficult to put it on a pay-as-you-go basis, I think.

The CHAIRMAN. Mr. Cannon?

Representative CANNON. We have been making every effort, as the Senator knows, in the last year or two, to require all agencies to come in and make an annual accounting, and then to provide such appropriations as the changed situation warrants, rather than to continue these indefinite appropriations.

Of course, you realize the difficulty of such a proposition.

The CHAIRMAN. Yes; there is a terrific resistance to the reduction of any appropriation, but when you are circumscribed by these different laws, it gives those who oppose a reduction an added weapon to fight with. In other words, they say that it has been authorized and we are obligated. Yet when authorization bills are before us we are told, "This means nothing, it has no legal binding effect when the appropriation comes up," and then when you try to cut it below the authorization they argue that we are under a moral commitment to follow it through.

These authorizations are not made by the Appropriations Committee, but they come out of legislative committees which, by association at least may have special interest, or partiality to the particular thing that they are dealing with, which is only natural. The Appropriations Committee then has to deal with the appropriations in the light of what legislative committees have authorized. It seems to me that is one of the great weaknesses in our procedures.

Representative DOUGHTON. The authorization is where the trouble

starts.

I would like to say this, Mr. Chairman, that I believe the distinguished chairman of the Committee on Appropriations, and Mr. Cannon, the distinguished ranking minority member, Mr. Taber, do and are making an honest and earnest effort to hold down appropriations, but sometimes, the same as the House, it gets out of their control. I do appreciate the effort they are making, both of them, to hold down appropriations to a reasonable level.

The CHAIRMAN. I want to add my word of appreciation to that, too, because they have done very fine work and have done better work than the Senate has done, although some of us have tried to

maintain the cuts made by the House. We are not always able to do it.

Senator FERGUSON. I would like to say that I think we are at a disadvantage in the Senate, in that on the appropriations they come over from the departments to have put back in anything that has been taken out by the House, or taken from the House, and they exert all of their efforts upon the restoration of that amount, which takes practically all of the time of the Senate committee on that item alone.

Now, that is a very difficult job and, as Mr. Cannon knows, we face this task of having so many committees in the House and so many in the Senate that determine the amounts, and then we are practically forced to appropriate to cover that amount that is authorized.

The CHAIRMAN. On that point, Senator Ferguson, I would like you to express an opinion about the single-appropriations bill, reported by the Rules Committee, that will come up before the Senate next week.

Senator FERGUSON. Of course, I feel that is the one way, to see the entire picture at one time as we go along, but when we take them in order and have them passed out to conferences, and so forth, we are not seeing the total expenditure or the appropriated amount at one time in relation to our national income.

I think today that if we had one bill on the floor, and could see this picture that has been presented here today, we could really make reductions in that bill. I feel that way about it.

Representative CANNON. When the bills are brought on separately it is impossible to judge the impact of the proposed appropriation on the national economy. They can frequently secure unwarranted appropriations, which they would not get if the full picture was before them at the time.

Senator FERGUSON. They get additions here and there, and they say, "It is only a few million dollars," and that is given to them, and then you finally have an amount which you cannot meet with taxes.

The CHAIRMAN. Senator Ferguson and Mr. Cannon, you are both on the Appropriations Committee isn't it true, that under the present system of having 12 or more bills, that there is no way to tell where you stand at any given time? Some bills are in conference, and some of them are passed by one body, the House, and have not been passed by the Senate. You cannot strike a balance sheet. The Finance Committee made an earnest effort to find out what our commitments would be so we could meet them, and we could not find that out. We had all of the various appropriation bills in a different status, some in conference, some only passed by one body, and others in some other status. There was no way of determining at any given time the obligations of the Government. How can you balance the budget unless you know what the expenditures are going to be. If you don't know what expenditures will total, how can you decide intelligently what taxes should be levied?

Senator FERGUSON. I agree with the chairman that that is absolutely true.

The CHAIRMAN. Now, another thing that I think deserves condemnation is the effort of the different agencies in the Government to use the franked mail at Government expense to incite people to bring pressure on the representatives of Congress not to reduce these expend