March 14, 1973
Page 7863
BUDGET INFORMATION
Mr. MUSKIE. Mr. President, I would like to bring to the attention of the Senate an excellent research article prepared at my request by Mr. John Braden, an economic analyst for the Library of Congress Congressional Research Service. The article provides a most revealing background and analysis of the Budget and Accounting Act of 1921 as it pertains to executive confidentiality and its relationship to S. 676. S. 676, which I introduced on January 31, contains the same objectives as S. 1214 which Senator ERVIN and I introduced today as a substitute for S. 676.
Among numerous items of interest in the article is the statement–
The provisions of Section 206 (Budget and Accounting Act of 1921) make it impossible to presume that any authority rests with anyone in the executive branch of the government to withhold preparatory budget information should either house of Congress wish to review such documents.
S. 676 and S. 1214 both go one step further and provide, without request, that estimates or requests for appropriations be submitted to the Congress at the same time it is submitted to the Executive. Certainly, if the Congress is going to perform its constitutional role in setting spending ceilings and determining program priorities it must have available the basic information from which the Executive determines its budget priorities.
As I stated when introducing S. 1214 without such timely and complete information the Congress will have a very difficult time in implementing the thoughtful reform proposals for a responsible legislative role in the budget making process outlined by the Joint Study Committee on Budget Control in their recent recommendations.
I ask unanimous consent that the analysis be printed in the RECORD.
There being no objection, the article was ordered to be printed in the RECORD, as follows:
THE BUDGET AND ACCOUNTING ACT OF 1921:
BACKGROUND AND ANALYSIS OF EXECUTIVE CONFIDENTIALITY IN RELATIONSHIP TO S. 676
BACKGROUND
The Budget and Accounting Act of 1921, was an outgrowth of the financial problems facing the U.S. Government after World War I. The War forced the Federal budget into a position of continuing deficit imbalance as war expenditures inflated government spending far beyond Federal revenues. A sharp increase in the National debt continued for several years after the War's close as a result of accumulated government obligations. This escalation of public indebtedness caused substantial concern among Congressmen who, in times of peace, had become accustomed to a balanced or surplus budget status. Raising taxes was considered an undesirable alternative to reconciling the budget by most legislators, and as a result, the favored direction of Congressional action was toward a reduction of Federal expenditures.
The Federal budget process at this time was decentralized and disorganized. Individual proposals were submitted annually to Congress by each Federal department and agency without any centralized attempt to coordinate the requests or to compose an aggregate budget statement.
Many Congressmen recognized the difficulty of reducing the level of spending without some system by which budget priorities might be set in a unified manner. In 1919, both the House and the Senate formed select committees on the budget which were charged with the task of suggesting ways in which the Federal budget procedure might be improved. The House Select Committee was more vigorous and comprehensive in its response to its charge, and in late 1919, it proposed legislation designed to institute a centralized budget bureau in the executive branch.
The Committee also proposed the formulation of a separate agency to carry on the auditing and accounting of Federal finances. The report of the House Select Committee was the forerunner of the Budget and Accounting Act passed a year and a half later.
One major issue emerged as the budget reform measure made its way through Congress: The House and the Senate disagreed with respect to the proper hierarchical placement of the proposed budget bureau. The Senate preferred the bureau to be within the bailiwick of, and responsible to, the Secretary of the Treasury. The House wanted a bureau tied directly to the President. In its final form, as it was reported out of joint conference committee, the bill placed the bureau structurally beneath the Secretary of the Treasury while making its work, the formulation of a centralized budget, the responsibility of the President.
The Budget and Accounting Act was vetoed by President Wilson in 1920 because of a technicality involving the President's ability to appoint or remove the director of the proposed Government Accounting Office. The measure was again introduced into Congress in 1921, passed easily, and was signed into law by President Harding who found Congressional control over the directorship of the G.A.O. to be less objectionable.
The Budget and Accounting Act of 1921 had the following fundamental features:
The direction given to the President annually to prepare and submit to Congress a document to be know as the Budget, which should give complete information regarding the condition of the treasury, revenues, and expenditures in the past and his program in respect to the provision that should be made for expenditures in the future and the manner in which such expenditures should be financed; the prohibition of any other officer of the government to request the grant of funds except when called upon to do so by Congress; the provision of a new service to be known as the Bureau of the Budget, which should act as the agency of the President for the preparation of the budget; and the creation of the new service, the General Accounting Office, with a Comptroller General at its head, which should be an independent establishment and take over all the duties formerly vested in the Comptroller of the Treasury and the six Auditors for the departments, which offices were abolished. The character of these provisions and their significance will be fully set forth in the pages that follow.
The Budget and Accounting Act represented the first effort of Congress to deal with a comprehensively formulated budget, and was considered a great improvement on the previously existing, decentralized budget procedure. One of the most significant effects of the act was to place responsibility for the establishment of budget priorities directly on the President.
THE BUREAU OF THE BUDGET AND THE PRESIDENT
The hierarchical position of the Bureau of the Budget remained ambiguous until 1939, at which time it was incorporated into the Executive Office of the President. In practice, however, its position has remained consistent and identifiable: The Bureau serves as the locus at which Presidential priorities with respect to existing Federal programs and new initiatives are expressed in terms of dollars. The Bureau collects estimates from all agencies and departments in the executive branch and molds them into a comprehensive outline of Federal action for the coming fiscal year.
Because it has this function of composing an annual outline of the executive program, a close relationship between the Bureau of the Budget and the President is understandably important.
Under Title II of the Budget and Accounting Act of 1921, the President is made fully responsible for the formulation of the budget:
Sec. 201. The President shall transmit to Congress on the first day of each regular session, the Budget, which shall set forth in summary and in detail
(a) Estimates of the expenditures and appropriations necessary in his judgment for the support of the Government for the ensuing fiscal year.
(b) His estimates of the receipts of the Government during the ensuing fiscal year .
Sec. 206. No estimate or request for an appropriation and no request for an increase in an item of any such estimate or request, and no recommendation as to how the revenue needs of the Government should be met, shall be submitted to Congress or any committee thereof by any officer or employee of any department or establishment, unless at the request of either House of Congress.
Sec. 207. The Bureau [of the Budget], under such rules and regulations as the President may prescribe, shall prepare for him the Budget, the alternative Budget, and any supplemental or deficiency estimates, and to this end shall have authority to assemble, correlate, revise, reduce, or increase the estimates of the several departments or establishments.
Section 207 describes a very close working relationship between the President and the Bureau of the Budget. This relationship has gone virtually unchallenged by Congress until the very recent decision on the part of the Senate to require confirmation of the Director and Assistant Director of the Office of Management and Budget. It appears that the only definite ramification on the functioning of the O.M.B. of this new development in the Senate will be to require that the Director and Assistant Director submit to questioning by the appropriate Senate committee preceding confirmation. Otherwise, the functioning of the budget bureau as an agent of the President does not appear to be altered.
CONGRESSIONAL ACCESS TO PREPARATORY BUDGET INFORMATION
The above passages, quoted from the Statutes at Large, describe a budget process in which departmental and agency needs are made known to the Bureau of the Budget, at which point they are coordinated, adjusted according to Presidential priorities, and submitted for the President's approval. After complete executive review, the refined aggregate budget is finally released for Congressional consideration. Section 206, Title II, of the Budget and Accounting Act, clearly states that preliminary facts and figures used to formulate the final comprehensive budget should not be submitted to Congress unless specifically requested to do so by either or both houses: Two reasons stand behind this provision. First, Congress believed that it would be needlessly confusing to receive preparatory data as well as final data when all Congressional decisions depended only on the final budget statement. Second, Section 206 served to emphasize the President's new role as chief budget officer, and to underscore Congress' determination that the President should make his program priorities known through his budget recommendations. The law is clearly intended to reduce the fragmentation of budget data and simplify the job which Congress faces in acting on the budget. However, the provisions of Section 206 make it impossible to presume that any authority rests with anyone in the executive branch of the government to withhold preparatory budget information should either house of Congress wish to review such documents.
The confidentiality of preliminary budget data and reports has been the subject of numerous Budget Circulars since the Budget and Accounting Act came into law in 1921. Circular number A-10, issued January 18, 1964, is the currently effective statement of Bureau policy with respect to the availability of preparatory budget information:
3. Restrictions on disclosure of agency estimates. All budget estimates and supporting materials submitted to the Bureau of the Budget are privileged communications. Their confidential nature must be maintained, since they are the basic data and worksheets in the process by which the President resolves budget problems and arrives at conclusions with respect to his recommendations to the Congress. The head of each agency is responsible for preventing disclosure of information contained in such estimates and materials except on request in formal appropriation hearings and when requested by Members of the Congress in connection with their consideration of the budget after its transmittal.
4. Restrictions on premature disclosure of Presidential recommendations. The decisions of the President as to his budget recommendations and estimates are administratively confidential until made public by the President. The head of each agency is responsible for preventing premature disclosure of information as to such recommendations and estimates. This rule does not apply, however, to the presentation of data on the President's budget to the Appropriations Committees, pursuant to arrangements made in specific instances by the Bureau of the Budget, in connection with any formal hearings on the budget which may be held prior to the actual transmittal of the recommendations of the President.
5. References to supplemental appropriation requirements. Paragraphs 3 and 4 relating to restrictions on disclosure of agency estimates and Presidential recommendations apply to supplemental as well as to annual estimates. However, if a supplemental request is being considered but has not yet been recommended by the President, a witness may appropriately mention the fact, but should not state the amount which he thinks is needed, unless this information is explicitly requested .
Paragraph 3 of the 1964 Circular appears to challenge the open-ended provisions of the Budget and Accounting Act with respect to Congress's ability to receive budget information.
Confidentiality is upheld except–
on request in formal appropriations hearings ... in connection with their consideration of the budget after its transmittal." (My emphases).
This paragraph, then, imposes temporal and situational qualifications on excessive responsiveness to Congressional requests. These qualifications are extremely questionable in view of Section 206 of the Budget and Accounting Act which provides no justification for such limitations on Congress' rights to budget data. It would appear that this assertion of administrative restraint is without statutory defense.
Paragraph 4 is similarly confining with respect to the release of budget information to Congress. However, this paragraph applies to Presidential recommendations rather than to agency reports and estimates, and does provide for discussion about such recommendations prior to the transmittal of the budget. The section which deals with presentation of data on the President's budget to the Appropriations Committees is the one dubious restriction in paragraph 4. If it is interpreted to restrict the disclosure of information to Congressional bodies other than the Appropriations Committees, this provision would stand in violation of the Budget and Accounting Act.
Budget Circular A-10 does, therefore, appear to express an opinion, on the part of the executive, that revelation of preliminary budget documents to Congress should be limited to specific circumstances. However, there is no statutory justification for such restrictions. The provisions of section 206 of the 1921 Act prevail over policy statements issued in Budget Circulars, and must be regarded as warranting Congressional review of preparatory budget information.
Title 5, Section 552 of the U.S. Code regulates the issuance of information by Federal departments and agencies. Except under specific circumstances delineated by Section 552, this Federal regulation calls for the general issuance of documents and data produced by Federal agencies and departments. Part c of Section 552 states:
"This section does not authorize withholding of information or limit the availability of records to the public, except as specifically stated in this section. This section is not authority to withhold information from Congress."
Part b of the same section states, in part, that among those documents which are permitted to receive confidential treatment are those "required by Executive order to be kept secret in the interest of the national defense or foreign policy." This is the only provision in that public law which can be construed as permitting the withholding of preparatory budget reports. The use of this provision as justification for confidential handling of such information is clearly tenuous.
However, in practice, the exceptions to public revelation of governmental documents have been extended to encompass information deemed by the President to be critical to the national welfare or to the confidential relationships existing between executive personnel. Congress has been unwilling to formally challenge the assertion of "executive privilege", when it has been invoked in deference to the national welfare or executive relationships, because of its awareness that secrecy may at times be desirable for reasons of expediency, efficiency, or timing.
Recent testimony by Roy L. Ash, current Director of the Office of Management and Budget, before the Subcommittee on Separation of Powers of the Senate Committee on the Judiciary, serves to shed additional light on the present attitude on the part of the administration toward the status accorded preparatory budget documents. In response to a question by Senator Edmund Muskie as to whether Mr. Ash would assert executive privilege as the rationale for the withholding of such documents, Mr. Ash flatly responded in the negative. He also stated that, though it is the feeling of the administration that budgetary efficiency would be hindered rather than helped by the release of such information, "... it is not up to us [the executive] to determine how best to run the Congress." Mr. Ash did mention the possibility that preliminary documents might be considered as being Presidential "working papers", but was not permitted to deduce the impact of such a designation on their status.
The conclusion to be drawn from Mr. Ash's testimony is that there is strong feeling on the part of the administration that the release of unrefined budget reports is an undesirable prospect even though there is awareness among administrators that legal precedent establishes the right of Congress to receive such information. Withholding preparatory documents by the invocation of executive privilege or the inclusion of such information in the secret "working papers" of the President would raise serious questions with respect to the ability of administrators to declare confidentiality without the consent of Congress. Such a declaration would stand in direct opposition to the stipulations of the Budget and Accounting Act of 1921.
CONFIDENTIALITY AND THE PROVISIONS OF S. 676
Briefly stated, S. 676 provides for the routine transmittal of preliminary budget information to Congress and to the public, as well as to the Office of Management and Budget. We have seen that the Budget and Accounting Act of 1921 specifically requires that this sort of information be made available to Congress upon the request of either house. We have also concluded that subsequent policy statements issued by directors of the Bureau of the Budget have been consistent in taking account of this provision, though they appear to have initiated several compromises on the Congress' access to preparatory documents. Nevertheless, the principle of Congressional authority to request budget information from the executive branch remains statutorily intact. Hesitance on the part of administrative officials to provide information dealing with original budget requests would contravene legal precedence. Nothing appears to compromise Congress' right to statutorily assert that such information should be made available to Congress by executive departments and agencies annually.
The legal justification for S. 676 seems beyond question. However, passage of S. 676 runs the risk of irritating the sensitivity existing among administrators to the confidentiality which protects their interrelationships. It is precisely this ability to function outside of the range of public scrutiny, an ability considered essential by most administrators, that is threatened most seriously by S. 676. Careful evaluation of the advantages and disadvantages of administrative confidentiality, specifically as it may have importance in budget matters, should be an important element in the discussion of that bill.