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should be processed independently, or be abandoned, or be made part of this bill is something that I think we may consider as we proceed with hearings on this

measure. I should be very glad, if you are prepared this morning, to have you make any statement or comment about such a provision.

Mr. Lawton. The question of submitting an alternate budget, one representing the recommendations of the President and another representing a distribution of revenues to appropriations so that a balance will be produced would, in the first place, be a ministerial act on the part of the President because in a great many cases it would not represent his real views as to what should be done.

The CHAIRMAN. Are not those views already contained in his general budget?

Mr. LAWTON. He would be limited in a great many respects in making any such recommendations by reason of a number of laws that are on the statute books that require a certain amount of money to be provided. There are other cases where the appropriations are open end appropriations under present legislation and where he is merely estimating in his budget the probable expenditures. One of those is the Commodity Credit price support estimate, which is not governed by the President. It is governed by law and the harvesting of crops. Another is the question of the secondary mortgage market for loans to veterans for housing or FHA loans for housing, under which RFC accepts a certain amount of those loans that are presented for sale to the RFC by mortgage institutions. The question there is an estimate as to how many dollars' worth of those loans are going to be presented. The only change that could be made there is one which must be made by basic law. Of course, in a great many instances the amounts of money are governed also by commitments made in prior years. I have explained to this committee heretofore that probably 25 percent of the expenditures in the budget result from appropriations made in the prior year, and from liquidation of contract authorities made in the prior year.

In addition to that, there are such additional uncontrollable expenditures as interest on the public debt and other fixed charges.

Senator SCHOEPPEL. Would that not be considered to be classified as fixed charges, though?

Mr. LAWTON. That is right. The point I am making is that the President's authority is very much limited in making his recommendations, and it is limited to a small proportion of the budget. In that case he would be compelled by necessity, in order to produce a budget in balance, to reduce the things which are susceptible of executive control. They might be quite far apart from any recommendations or feeling of his own that that was the proper thing to do. You would not be getting a presidential recommendation, in other words, that was based on any real judgment of his.

If you have an executive budget, I assume that it is supposed to represent the viewpoint of the President as transmitted to the Congress, on which the Congress then acts.

The CHAIRMAN. I appreciate that. Now let me ask you this: Of course, the President's budget, and not the alternate budget, would represent the President's views and recommendations. The alternate, balanced budget might simply indicate to the Congress or point up to the Congress just what you are emphasizing now, the impracticability of undertaking to balance the budget.

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We have a great deal of demand now for a balanced budget, but it is pretty hard to explain why we cannot reduce expenditures sufficiently to balance the budget. An alternate balanced budget from the President showing the necessary reductions in essential Government services—let us ssume that the budget should not be balancedwould indicate to the Congress showing that if he were compelled to operate within revenues, we could not meet these obligations that already have been incurred, as you say, and that we would have to dispense with indispensable services. It would enable the taxpayers and the country to understand better why the Congress cannot hold appropriations within revenues and why the President felt compelled to recommend greater expenditures or that it was necessary that he recommend greater expenditures than the anticipated revenues would be. It just seems to me that from my viewpoint it is not trying to put anybody in an impractical or impossible position or embarrassing position, but simply for the purpose of enlightening the Congress and the country that the fiscal situation of the Government makes it impossible or impractical or inadvisable to try within the next fiscal year to live within its revenues.

That is the thought I have in mind. I do not quite understand why the President would not still be asked also to make just as free recommendations on what he considers the budget should be.

Mr. LAWTON. I think his recommendations would be free to the extent of those items on which there is some control, that he would be able to say that if expenditures are to be reduced-and we are talking here of just one side of budgeting—that these are the results. Of course Congress has, and can get, that information in detail now and frequently does get it in the development of the appropriation hearings. They have the presentation of the President. Each agency comes before the committees of both Houses of Congress and explains why they need the funds. They are also asked to explain in many cases what would be the result if certain things were done. The Congress has the opportunity to make that sort of judgment now. The difference would be that they would have a document before them in which the President would have said that if expenditures are to be kept within a certain limitation, this is what would have to be done. It isn't what he would recommend to be done. It would indicate that, of course, but it would not represent as much of a judgment in many cases as it would represent a mathematical distribution of funds, without judgment.

The CHAIRMAN. If the President's budget is sound and these expenditures in his regular budget are necessary and are the very minimum that we can well provide and operate the Government efficiently and provide the necessities and essential services, the alternate balanced budget would certainly point up and strengthen the position the President takes with reference to his original budget. That alternate would simply demonstrate, as I see the picture, that you would have to dispense with this indispensable service or this essential service of government, and therefore what would happen if you undertook to balance the budget. It would simply indicate that a lot of these services would have to be dispensed with or would have to be sharply curtailed, perhaps to an inadvisable extent. You would have an expression from the Executive who prepares the budget and

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who recommends expenditures to the Congress. Congress would have no other answer but to go to the people and say, "Here is the real condition. It is necessary that we live beyond our income for another year.” That is the way it seems to me, Senator Mundt.

Senator MUNDT. Mr. Lawton, I cannot see where the President's problem is any greater in connection with these open end commitments that you mentioned like the CCC and prior commitments from previous years, and so forth, in the advisory budget than it is in his actual budget because he has to wind up with some kind of exact figure anyhow. He winds up and says the budget is so much. It has to be an educated guess in either budget, does it not, with regard to the CCC? He knows no more about weather conditions and crop prices in his advisory budget than he would know in his actual budget.

Mr. LAWTON. It would have to be the same figure in both budgets.

Senator MUNDT. Exactly. So, that is no obstacle as to bringing in advisory budget of what he would do if Congress said “You have just so much money.”

Mr. LAWTON. It would put the problem on those items of budgeting or those expenditure items that are within certain limitations controllable. We would have fixed a certain amount of dollars which would be the same in both budgets—interest on the public debt, CCC, RFC secondary mortgages, veterans pensions and things of that sort. What would be left in one case is a distribution of what he thinks it takes to run the Government and his recommendations for it. What he would have in the other case is a balance which he would have to distribute, a smaller amount of money which would have to be distributed, and distributed in many cases without representing judgment on his part, but merely the best he could do under the circum. stances. He might in that case have to say that certain legislation and certain statutes won't be carried out, that there is no money to do it.

Senator MUNDT. I think that would have a tremendous value. As the chairman pointed out, it would have a great educational value. I do not think Congress and the country as a whole realize that under certain conditions balancing the budget would become inadvisable. It would point out exactly what would happen. It would be the same position as the householder who tells the architect he wants to plan for a $25,000 house and then he discovers he has only $15,000. He gives him the $15,000 and says, “If my rich uncle dies, I will get the other $10,000. What kind of a house can I build for $15,000?And the architect draws him a plan and has to decide which house he is going to take. Congress is in the position of having some discretionary authority. The country would realize it. I think it would be very useful. Of course if the Indian Bureau came in and said they wanted $40,000,000 and they got only $30,000,000, we are not going to keep the Indian school open in Minnesota.

So you have a comparison in one particular program, and Congress does not get an over-all picture of what happened if they have $5,000,000 left or $8,000,000 left to balance the budget. With this alternate budget you would have it. Maybe it is enough, maybe it is not. It seems to me it gives the picture, and I do not think that it is complicated at all. The CCC accounts and the secondary mortgage are there. If all we appropriated were enough to cover those, they are fixed charges, like interest on the debt. You have to pay those. The President has not any more discretion on that than you have.

Mr. LAWTON. That is right.

Senator MUNDT. Congress would have to change the law if you were going to change that. It would give us a picture to look at.

Senator LEAHY. I wonder whether the difficulty has not been in determining what was essential. Take our appropriation for defense: Is the President going to say, "If you wipe out all appropriations for defense, we can balance the budget”? What is the President going to do? What is essential and what is not essential? Who is going to determine that?

Senator MUNDT. We have the advice of the President under that plan. If we cut the President by, say $10,000,000,000 in total, he can come to us and say, "If you do that I have to take $4,000,000,000 off National Defense; I have to take something off these other programs.” Congress might say, "We do not want that at all. We had better go back to our original budget, the one that you recommended.”

Mr. Lawton. Of course, in actual practice Congress does exactly that in a great many cases. They do it now, they do it through committees, through the appropriations committees and the subcommittees. If the subcommittee structure remains the same, you would be dealing with this thing in 10 different places, and each one would be dealing with a portion of it. It is a question of whether you get the entire look at it or not.

Senator MUNDT. You have all these subcommittees. One subcommittee is very economy minded and is slashing very desperately, too much, perhaps, in one budget; and another one tends to. coast along with whatever the President has recommended. There is no composite picture that everybody can see as to what you would buy with a balanced budget.

The CHAIRMAN. There is this change being made in the experimental approach of having only one appropriation bill. One of the ideas in support of such procedure is that it will better enable the appropriations committees and the Congress to look at the whole picture at the time of passing the appropriations. I do not know how it is going to work out. We are experimenting with it. That was one of the thoughts in support of this procedure.

May I ask you just one other question about the bill. It is not at all important, but I was just wondering the reason why section 120 page 5 provides for a change in the name of the Bureau of the Budget to the Office of the Budget. I do not know that there is an important point in that, but I am just wondering why it was felt that the name should be changed since it has been so long established.

Mr. LAWTON. I think the reason for that probably stems from the Hoover Commission's idea of something of a uniformity of terminology. Actually I think the only real effect of it would be a little additional cost of printing to change all the letterheads, forms, and so forth that are now established. Other than that it would not make

. any difference.

The CHAIRMAN. I wanted to determine whether there is any essential need for changing the name so far as you know.

Mr. LAWTON. None.

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The CHAIRMAN. This provision is not in the bill at the instance of the Bureau of the Budget?

Mr. LAWTON. This bill is not at the instance of the Bureau of the Budget, none of it.

The CHAIRMAN. None of it. I see.

Mr. Lawton, in your prepared statement I believe you referred to a letter that you had submitted on October 11, 1949, to the committee.

Mr. LAWTON. Yes, sir,

The CHAIRMAN. With your permission I shall be glad to have that printed in the record right at the conclusion of your testimony.

Mr. LAWTON. That letter does refer to the original draft of the bill and not to the amended bill.

The CHAIRMAN. Yes, I understand, but I thought we might have it printed in the hearings.

Are there any questions by other members?

Senator MUNDT. Mr. Lawton, is there anything in this legislation that you see which would tend to bring the Comptroller General's office more under the control of the Office of the President than it now is, and does it in any way jeopardize its semi-independent status?

Mr. LAWTON. The bill in part II changes the present authority of the Comptroller General with reference to the prescription of accounting and places him in a position of approving or agreeing with the Secretary of the Treasury with respect to the prescription and development of accounting methods. It is a restriction and change in the present authorities of the Comptroller General.

Senator MUNDT. As I gathered from your testimony, it appears to me that to that extent it did destroy the benefit of his independent status. I should like to have your expert opinion as to whether I have interpreted that correctly.

Mr. LAWTON. As to that particular phase, it certainly would change his present independent authority.

Senator MUNDT. Is there anything in the legislation that moves in the direction of giving the President an item veto on the budget?

Mr. LAWTON. There is one section which is related to that subjectsection 32, which writes into this statute provisions for reducing expenditures, and so forth, consistent with public interest and the maximum of economy in operation. It merely reiterates what the present practice is with respect to the establishment of reserves where conditions have changed and where there is the opportunity to save money. That is now done under the apportionment system and reserves are established. This specific statute would simply spell out the present practice.

Senator MUNDT. If section 32 were adopted as written, with no further modifications or restrictions, and Congress were to appropriate $2,000,000 to build a portion of a ship canal, say, in Florida, or the portion of the Passamaquoddy project in Maine, under this as I read it, the President could exercise what would be tantamount to an item veto simply by setting that aside and not spending any portion of it. Is that correct?

Mr. LAWTON. If and to the extent he determines the purpose intended by the Congress will be accomplished by the expenditure of a lesser amount.

Senator MUNDT. He would have to go forward with the project, though, would he?

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