itures. Mr. Cannon knows about it. He was telling me before the meeting of an instance that is being done generally all over the country. They have programs over the local radio stations and they say, "Write to So-and-so," when they try to reduce the subsidy, and you get a high pressure on Congress, and it comes from the Government itself, and the cost is paid out of Government funds. That is not the proper function of any department of this Government, to indulge in an activity of that character. Senator FERGUSON. The chairman attempted to take off 25 percent of that pressure by cutting the so-called public relations expenditures in these various bills, by 25 percent, and that is in most of the bills, but that really does not reach the problem at all. The problemcould I have a moment The CHAIRMAN. Yes. Senator FERGUSON (continuing). I think the problem is that it is not the public relations office, but it is everyone in the department who is put on the job of pressuring, of seeing that these appropriations are kept up and increased, not only the public relations department. The CHAIRMAN. Mr. Staats, do you have a statement to make about this a general statement in regard to changing the method of procedure? Mr. STAATS. No; I do not have, this morning, Mr. Chairman. It was our understanding that you would like to have the Bureau come back before this committee later. The CHAIRMAN. I know that you will be able to furnish this committee with basic material. You think it is a very important question, do you not? Mr. STAATS. I do, sir, and one thing that I do think, or would like to say is, that as far as any help that we can provide the committees of Congress, in terms of the estimates of the cost of the proposed legislation, the matter you referred to a while ago, we will be most happy to provide assistance, and we have so written the committees of Congress who have asked for our views on that subject. I do think that that is one of the important aspects of this problem. Senator FERGUSON. I wanted to thank the department for their work on that, as one of the sponsors of that legislation, as well as the chairman. But so far we have not been able to get it through Congress, but that, I think, would solve many of our problems. The CHAIRMAN. Does the committee approve going into this exhaustively? Evidently we do. We intend later on to have the Bureau of the Budget and the General Accounting Office and other agencies of the Government to testify. I think that is one of the basic questions that has got to be improved upon if we are to effect any substantial economies. Mr. Reed, do you have any questions to ask Mr. Magill? Representative REED. Not a question exactly, and I don't know, but I supposed I aroused the ire of my good friend Representative Cannon one day on the floor, and I think he thought that I was criticizing him, but I was not; I was not criticizing his group at all. In fact, I have a great appreciation for the hard and effective work he does. I have had this clearly in mind and never got anywhere with it: I believe the Government could spend very wisely almost any amount of money, even up to a billion dollars, if they could in some way have in ས་ the departments and bureaus of the Government a person who would just be objective in finding out to what extent they are padding the approach to the Appropriations Committee. Now, I know from good, honest, hard-working people in some of these departments that tell me if they were to eliminate half of their force, they could do more work, and they also say that much of their time is spent several months before they are to go before the Appropriations Committees to build up their case for a larger appropriation. Then you have another thing, and that is, if they do have a great deal of money they will try to spend it all before they come in and ask for more, rather than have it go back into the Treasury, and then be criticized when they come in asking for money because they did not use what they asked for the previous year. Now, I only drop that as a thought. I think, sooner or later that will have to be done, because it is human nature to these people to build up their case, and they do it. Another thing that I think is wrong in the Government, and that is that a person is rewarded for not having fewer people under him, but by getting a large staff, and the larger it gets the larger his prestige, and I think that is all wrong. Now, I just leave those thoughts as I have observed them over a period of years. The CHAIRMAN. Mr. Doughton. Representative DOUGHTON. I have no questions. I appreciate very much the interesting and illuminating statement given. It has been very helpful. Mr. MAGILL. Thank you, sir. Representative DOUGHTON. I do not have anything that I want to say myself this morning. The CHAIRMAN. Is there any further discussion? Mr. Graham, do you have a statement you would like to make? Mr. GRAHAM. I have two questions that I would like to ask Mr. Magill. The CHAIRMAN. Very well. Mr. GRAHAM. Doctor, you referred to this printed pamphlet, and I note that it is dated in 1951. I think you said that it had just been recently completed. Do you have an approximate date of when this was completed? Mr. MAGILL. Let me ask my associate. When did this come out? Mr. HERBERT MILLER. That came out in March of this year. Mr. MAGILL. They tell me in March 1951. Mr. GRAHAM. March 1951. Thank you. Now, the second question, on page 2 of your prepared statement you asked permission and received from the chairman permission to read an excerpt from the pamphlet ? Mr. MAGILL. Yes. Mr. GRAHAM. You did not identify the page number. Mr. MAGILL. I appreciate your speaking of that. It is on page 29. It is the smaller print, the double-column material on page 29. Mr. GRAHAM. Thank you, sir. That is all I have to ask, Mr. Chair man. The CHAIRMAN. Mr. Graham is Assistant Secretary of the Treasury. Would you like to make a statement of any kind? Mr. GRAHAM. No, sir. I am glad to have the opportunity to represent the Secretary here today. As you know, he has notified you that he is tied up with this international meeting of the bank and fund. The CHAIRMAN. Yes, I know. I would like to have some comment from the committee as to how far we should go into this investigation to try to develop some kind of a plan and recommendation as to what should be done. What do you think, Mr. Cannon? Representative CANNON. I do not think we can have too much light, Mr. Chairman. The CHAIRMAN. What is the feeling of the committee? Is the feeling of the committee that we should go through with further hearings? Representative REED. Yes, sir. some report? And I wish to thank you, Senator, for the opportunity of coming here today. It has been very, very informative. The CHAIRMAN. If there is nothing further we will stand adjourned until the next meeting. (Whereupon, at 11:15 a. m., the committee was adjourned.) ANNUAL CONTROL OF THE FEDERAL BUDGET WEDNESDAY, SEPTEMBER 26, 1951 CONGRESS OF THE UNITED STATES, The joint committee met, pursuant to notice, at 10: 10 a. m., in room P-36, United States Capitol Building, Senator Harry Flood Byrd (chairman) presiding. Present: Senators Byrd (chairman) and Butler; Representatives Doughton, Kerr, Reed, Cooper, Taber, Cannon, and Frederick J. Lawton, Director, Bureau of the Budget. Also present: John S. Graham, Assistant Secretary of the Treasury, representing John W. Snyder, Secretary of the Treasury. The CHAIRMAN. The committee will come to order. For the benefit of the members of the committee who were not present at the last meeting, this meeting is a continuation of the hearings opened on September 14 on the subject of Federal expenditure control. Many of us think-and I think it is very obvious that the Congress has lost a large measure of control over annual expenditures. In the previous meeting the Honorable Roswell P. Magill, former Under Secretary of the Treasury, speaking as a representative of the Tax Foundation, presented to the committee a statement of findings by that organization indicating the increasing difficulty of controlling Federal expenditures. It is the belief of this committee that no man living can speak with greater authority on this subject than the Honorable Lindsay Warren, Comptroller General of the United States. He has been a watchdog of the Treasury, and I think history will record him as our best and most able Comptroller General. We must devise ways and means to so fix the laws and the regulations that we can have control of the expenditures. Consideration of this subject is the purpose of these hearings. The first witness will be the very able and distinguished Comptroller General of the United States, the Honorable Lindsay C. Warren. Mr. Warren. STATEMENT OF LINDSAY C. WARREN, COMPTROLLER GENERAL OF THE UNITED STATES Mr. WARREN. Mr. Chairman and members of the committee, I welcome the opportunity to tell you gentlemen some of the things more than a quarter century in Washington has taught me about congressional control of public funds. For practically the entire period I 27 have been closely associated and deeply concerned with the subject, first as a Member of Congress, and for the past 11 years as Comptroller General. I especially welcome your invitation to come here, Mr. Chairman, because you have been a stanch advocate and tireless worker for economy in Government. I have long admired your unwavering, if sometimes thwarted, efforts to reduce expenditures on a Governmentwide front. American taxpayers are fortunate in having such a stalwart friend. I want to pay high tribute also for your part in the enactment of the Government Corporation Control Act of 1945. The Byrd-Butler Act has been a tower of strength in the fight to obtain legislative control over Government funds and property. The number of Government corporations in which Government funds are invested has decreased from over 100 to only 53, and millions of dollars of funds that were in the hands of the corporations have been paid into the Treasury. I need remind no one here that legislative power of the purse is the basic fiscal policy of our constitutional system of checks and balances. Checks by the Congress, and by its agent, the General Accounting Office, are means of enforcement of that power. There is no denying the power has been weakened. Seldom has there been any direct frontal attack. Instead, there has been a constant, insidious gnawing and whittling away at its vitals. Primary responsibility for this state of affairs must rest squarely where it belongs on the Congress itself. I do not mean to imply that it is all the fault of the Congress. I know the bitter frustration felt by Members trying to get adequate information on the needs of programs and results of their operation. The General Accounting Office is exerting every effort to make such information available to the Congress. Recognizing that knowledge is power, the joint accounting program is already working to give Congress more accurate, complete, and timely financial information. This program, in which the Secretary of the Treasury and the Director of the Bureau of the Budget joined with me, is an important means to strengthen legislative control of public funds and property. I might add that all of the departments and agencies are cooperating. The first need is for full disclosure of the Government's financial dealings for the Congress, full disclosure for the President, and full disclosure, if you please, for the taxpayers. Of course, you know and I know that neither this nor any other program alone can guarantee complete congressional control of public funds. During the past 10 or 15 years a great deal of legislation has been passed which, bit by bit, has had the effect of leaving executive agencies free to do what they will in their spending actions. My very first annual report to the Congress, covering the fiscal year 1941, included special reference to legislation giving administrative officers too great authority over expenditures. Dozens of instances have been recited in later reports. While some of that legislation was temporary, and some of the instances once cited have come to be standard practice, the point is that to the extent Congress enacts such laws it relinquishes its control of public funds and little by little gives away its great patrimony. Sometimes misunderstanding is to blame, an |