There is no objection to the provisions of sections 33 (a) and (b) which provide for the transfer of appropriation balances in connection with reorganizations. Reorganization statutes and plans usually make somewhat similar provisions, and therefore it is a matter for your judgment as to whether these provisions are needed in a general bill.

Section 33 (c) would transfer personnel limitations in connection with reorganizations. The only statutory personnel limitations that apply to particular agencies are applicable to the Department of Defense. The personnel ceilings fixed by the Director of the Budget are normally adjusted by this office under the provisions of existing law whenever reorganizations take place. As suggested above, I believe that the laws on personnel limitations and ceilings should be repealed, and if they are not, there already is sufficient authority to make the adjustments which this section provides.

Part IV of the bill would repeal many specific laws found in title 31 of the United States Code, most of which have fallen into disuse and were probably superseded by the Budget and Accounting Act. Since the code constitutes prima facie evidence of the law, the fact that these statutes have been retained in the code has led to some confusion, and it is desirable that they be specifically repealed. As I pointed out earlier, I would prefer to see section 204 amended as in the original bill, and in that event, it could be dropped from part IV (where it is now shown as clause 86). If section 204 is not amended, however, it would be appropriate to leave it among the repeals of part IV. As pointed out above, I would also suggest that there be added to this part a reference to the law on personnel limitations and ceilings, as follows:

Section 607 of the act of June 30, 1945, as amended (59 Stat. 304; U. S. C. title 5, section 947).

The Bureau has not checked all the other laws involved, but it appears that some of the provisions in the bill may also require changes in other laws in order to make them consistent. For example, the date for the submission of agency budget estimates to the Bureau of the Budget is set in the Government Corporation Control Act, as well as in the Budget and Accounting Act. Thus the former act might need to be amended. Likewise, if it should appear that there are other obsolete provisions which should be added to the repeal sections we would be happy to submit such suggestions to the committee for its consideration.

Finally, I should like to refer to the accounting proposals incorporated in part II of the bill. Distribution of responsibility for accounting was one of the most controversial subjects with which the Commission on Organization of the Executive Branch had to deal. There were five views expressed in the Commission's report, with five Commissioners setting forth a total of four minority views, dissents and additional comments.

A little more than 2 years ago the General Accounting Office, the Treasury Department, and the Bureau of the Budget launched a joint program looking toward the cooperative solution of our Federal accounting problems. Real progress is being made under the joint accounting program. Work has concentrated heavily on the improvements of accounting systems of individual agencies. Budgeting, accounting, and reporting processes are being developed on a coordi

nated and integrated basis which will produce more meaningful results and eliminate duplication and unnecessary effort. Audit methods are being changed. Tests of simplified basic procedures for the collection, deposit, and disbursement of funds are now under way in several agencies. Principles and standards are being developed to provide long neglected accounting control over Government property. Work now is starting in framing the outlines of the central reporting system for the Government. A vigorous day-to-day attack is continuing on unnecessary red tape and antiquated methods.

Work will continue along these lines so as to provide a modern and effective system of fiscal administration of the Government as a whole. I am sure the committee will be interested in a report of the accomplishments under this program, which the Comptroller General can give you.

The results achieved so far under the leadership of the Comptroller General in this joint accounting program afford ample evidence that this cooperative approach with the three top fiscal agencies in a concerted attack on the accounting program—and with the other agencies bearing their fair share of the work-is the most promising and most practical way to achieve the objective we all desire-better accounting in the Government. In the judgment of the Bureau of the Budget this program is basic to the achievement of management improvement throughout the Government and should not be interrupted.

The CHAIRMAN. Thank you very much, Mr. Lawton.

I should like to ask you specifically with reference to three or four provisions of the bill. You have a copy of the committee print before you. In section 201, page 2 of the bill, it is proposed to give the President 3 months after the convening of any regular session of Congress in which to submit his budget. Do I understand that the Bureau of the Budget favors that provision of the bill?

Mr. LAWTON. The Bureau of the Budget favors it from the viewpoint of the executive branch because the later and the nearer to the beginning of the fiscal year that you can submit a budget, the better information you have on the current year's activities and the better job you can do. We do feel from the congressional point of view it would be an extremely difficult thing to handle.

The CHAIRMAN. That would mean that you would have until the third of April to submit a budget, would it not?

Mr. LAWTON. Approximately, yes.

The CHAIRMAN. That would give the Congress only a very few days' time; it would have only 90 days then in which to study the budget and pass the appropriation bills if they were all concluded by the end of the fiscal year. Is that not correct?

Mr. LAWTON. That is correct.

The CHAIRMAN. You, in your position in the Bureau of the Budget, appreciate that that time would certainly be inadequate for the Congress to make the proper appraisal of the budget and appropriations in conformity thereto; do you not think so?

Mr. LAWTON. I believe so; yes, sir.

The CHAIRMAN. It strikes me that that provision might be of some advantage, as you say, to the Executive. It would not crowd him quite so much to take a longer time to prepare his budget, and possibly he would be a little more accurate by being given that time. At the same time the relief it would afford the Executive and any

advantage the Executive would get out of it would be greatly exceeded by the handicap and hardship that it would work on the Congress. Senator MCCARTHY. In connection with that, Mr. Chairman, I personally did not approve of that section, but it was inserted in this draft, I understand, by the Hoover Commission staff and the people who have worked with it. This was inserted at the demand of the executive. The executive maintained that they would oppose the legislation unless it was inserted. You must know something about that, Mr. Lawton.

Mr. LAWTON. Senator, I do not know who it was who suggested that. Certainly it was not the Bureau of the Budget, because I think that we recognize the fact that under the present procedure, and present set-up, and the present detailed examination, particularly with the fact that the committee members in one body at least are on several committees, it would be practically impossible to handle the bill by the 30th of June unless there was a radical change in the congressional method of operating.

Senator MCCARTHY. I might say I personally think it would be infinitely better to require that the President submit the budget on the opening day of Congress. This was one of the compromises which we felt we had to make.

Mr. LAWTON. I believe that arises from the task force report of the Hoover Commission and not from any action of the executive branch.

The CHAIRMAN. Then, as I understand you, although it might be desirable to the Executive, the Bureau of the Budget is not insisting upon that provision of the bill at all.

Mr. LAWTON. We would not recommend it. We would take it if it were in the bill.

The CHAIRMAN. You do not even recommend it?

Mr. LAWTON. No, sir.

Senator LEAHY. Mr. Chairman, might I ask, if the budget is required to be presented on the opening day of the session, how can a new incoming President handle the budget? What time would he have to examine the budget?

Senator MCCARTHY. You apparently think it is conceivable that some day we may have a new President.

Mr. LAWTON. The only opportunity he would have under the present system and with the present timing would be to review the budget after he came into office and make recommendations and suggestions to the Congress for alterations or changes in it. If the present system of a single appropriation bill continues, this would give the Appropriations Committee probably a month or so to review his findings.

The CHAIRMAN. Will you explain the difference and just what is meant here in the same section, in language so that we can all fully 'understand, with reference to submitting the budget on a basis offunctional programs and activities * * * with segregation of the operating and capital programs.

what do you mean by "functional programs” and what is meant there by "operating and capital programs"?

Mr. LAWTON. The functional program is a description of those things which the agency does, the activities in which the agency engages. In the case of an agricultural appropriation it may mean the investigation

of a certain type of pest, or the experimental and developmental programs under the Soil Conservation Act, or the carrying out of research into some particular agricultural problem, apart from the things which the Government uses to accomplish those ends, as for example, whether it uses a certain amount of travel expense or a certain amount of communication facilities or a certain number of personnel. It lays the emphasis on the things to be accomplished, the things to be done, rather than the tools with which you do them, which was the former system. Under the former system the main classification in the budget was on "objects of expenditure," the means to an end. Under the new system it is the end itself on which the primary emphasis is laid. An agency is given functions to perform by the Congress; it is given activities to carry out. The performance budget describes the needs for money of that agency on the basis of those functions, on the basis of those needs, and lays the primary emphasis on that. We do in the budget, of course, show both classifications, but the object classification is subordinate-the travel, the personnel, the communications, the equipment.

The CHAIRMAN. That comes under operation, then?

Mr. LAWTON. It can come under operations or it can come under capital expenditure, either one, but they are the things that you use. In other words, it is not important that you have a certain number of desks. That isn't the important thing for Congress to know. The important thing to know is what they are going to be used for, what program is going to be carried out. The amount of money that is required to carry out such a program is the place to which Congress should direct its primary attention, and its secondary attention to the tools inside in carrying out that program.

The CHAIRMAN. If you will turn to page 3, section 205, I have a question or two about that. I notice it provides here that the President may submit a budget or estimate in alternative form, or an alternative budget. What is meant by that? What is the purpose of that provision?

Mr. LAWTON. The only purpose of that provision that I can see is that if the form of the budget is rigidly fixed by one provision in section 201, any change in that budget would have to require the presentation of a completely alternative set of estimates under some other type of classification.

The CHAIRMAN. What I am trying to determine is, does that mean he suggests in one instance that so much be appropriated, but under other conditions that may be found to exist a greater or smaller amount should be appropriated and that the Congress have its choice? Is that what it implies? Is that the intent of it?

Mr. LAWTON. It could possibly be interpreted to mean that, but our interpretation of it is rather that it would mean an estimate or a budget in a different kind of classification than a performance basis, that it would mean some other sort of category or classification.

The CHAIRMAN. Is it quite clear what it does mean and what is intended? I am not clear on that, and I should like to have it thoroughly explained if I can. If we put in the word "alternative" there, giving discretion to submit it in some other form, just any form that the President might choose, I think we ought to know that. If we are going to permit an alternative budget, we ought to know what the objective of the alternate budget is, what the necessity for

it is, and what the wisdom of it is. That is what I should like to find out.

Senator LEAHY. Might it relate to revenue proposals which, if enacted, might result in one type of budget, and if not enacted, would result in a different type of budget? Does it refer to that?

Mr. LAWTON. I don't believe so, because the present law requires the President to submit the budget on the basis of existing revenues, and if he decides to make recommendations with respect to revenue, he includes those in his budget.

The one word that puzzles me in this is the word "amounts." That is in line 6. The rest of it deals primarily with the matter of form, because it shows the tie-in between the alternate budget and the regular budget, and it expresses it according to "such system of classification and itemization as is, in his opinion, most appropriate.' I gather that the major emphasis in this is on the question of a different classification and itemization of expenditures, either complete revision in the form or something other than performance type of budgeting. The CHAIRMAN. Do you not think this section probably needs a little further study so we can clarify it and find out just what we are trying to do?

Mr. LAWTON. Yes, sir. I think the sponsors of the measure would have to explain that.

The CHAIRMAN. I think we may have the benefit of the budget's views on it and that you will help us clarify it.

May I ask you another question right in line with this provision. Senator MCCARTHY. Mr. Chairman, I might say that section 205 provides for what might be classed as an alternative informational budget. I would like to spend considerable time on that with the committee when I am in little better voice.

The CHAIRMAN. I am merely suggesting that I think this provision needs further study and maybe some revision so that when it is enacted we will know what it means. It is not clear to me what it means now. It may be clear to others.

In this connection I should like to ask your views with reference to amendment of this section to require an alternate budget that will present a balanced budget in line with Senate Joint resolution 131. I introduced that resolution last year so that Congress might have a picture of what expenditures would be and how they would be made, what expenditures the executive would recommend, and how they would be made, if Congress determined to try to balance the budget. I believe you have some views with reference to a provision of that kind. If the Budget Bureau does have, I should be glad to have you express them because that resolution is still pending in the Congress. Senator MCCARTHY. Mr. Chairman, I shall have to leave now and I shall not get back before twelve. I might say that I, for one, feel that the Bureau of the Budget has done a tremendously good job in trying to put into effect most of the Hoover Commission recommendations, and actually all we need here is statutory approval of what has largely been accomplished in the past year by the Bureau. I should like, however, to get Mr. Lawton's thought on the possibility of having an alternate budget that does provide for a balanced budget in addition to what the President requests.

The CHAIRMAN. Thank you, Senator McCarthy. I am very much interested in it. The resolution is still pending, and whether it