September 25, 1973
Page 31284
CONGRESSMEN OBEY AND STEIGER ON BUDGET REFORM
Mr. MUSKIE. Mr. President, last week in joint testimony before the House Rules Committee, Congressman DAVID R. OBEY and Congressman WILLIAM A. STEIGER of Wisconsin, submitted one of the most lucid and most compelling statements on congressional budget reform that I have yet seen. I commend Congressmen OBEY and STEIGER for their excellent statement and urge my colleagues to read it.
I ask unanimous consent that this statement be printed in its entirety in the RECORD.
There being no objection, the statement was ordered to be printed in the RECORD, as follows:
JOINT STATEMENT OF CONGRESSMEN DAVID R. OBEY AND WILLIAM A. STEIGER
Over the past six months we have been among those who have been raising questions about proposals made by the Joint Study Committee on Budget Control contained in H.R. 7130. That does not mean we do not believe that there is a strong need for budget reform. We need it badly, and if we get it, it will be in no small measure due to the efforts of members of the Joint Study Committee – especially the efforts of Al Ullman and Jamie Whitten.
We hope Congress will enact a budget procedures reform bill in this session, but it must be a workable bill that will be compatible with the processes and traditions of Congress. In our statement here today we will try to do two things:
(1) Explain why we strongly question certain procedural aspects of H.R. 7130, the Joint Study Committee proposal, and
(2) Give some suggestions as to modification of that plan which we believe would make it acceptable.
1. What is wrong with the Joint Study Committee Proposal?
That proposal already has been modified by its sponsors substantially in an effort to soften some of its harsher provisions. But there still remain basic procedural defects that cannot be remedied merely by expanding the composition of the budget committees or by a slight relaxation of the rigid rules which would be imposed on the consideration of budget matters.
The problem, as we see it, is that supporters of H.R. 7130 simply come before the committee and say "we have a terrible problem; the budget process is impossible" which everyone agrees with. But then they jump to the statement "so let's pass our bill."
We agree that something must be done. But we think it is critically important that that something be the right thing. If it isn't; if it is unnecessarily complicated and does not reflect reality in the House, it will fail. The price of the 1947-49 legislative budget fiasco was 25 years of waiting before another drive for budget reform could get off the ground. If we fail again, it may be difficult to move on this matter for another generation. We dare not bequeath to the 1980's the tale: "They tried to change it in 1973, but it didn't work." If we are not to repeat the mistakes of the 1940's, we must not readopt the simplistic notion of a legislative budget.
Let us briefly outline the four problems we see with H.R. 7130:
Problem No. 1: A monopoly of budgetary power. Virtually every reform that the House has adopted in the last four years has tried to do two things:
1. Provide additional tools for the Leadership, and
2. Build an increased sense of participation on the part of individual members of the House.
The problem with H.R. 7130 in this regard is that its thrust is just the opposite. Under the original plan Members of the new budget committee would have been largely self-appointed (from Ways and Means and Appropriations). Elaborate procedure and the two-thirds requirement would have denied to a majority of the House an opportunity to work its will on the most important piece of legislation we deal with each year.
In short it would have created a tremendously powerful committee which could set ceilings and subceilings for the overall budget and of its subcategories before the average Member even knew what was in the budget recommended by the Budget Committee. Gentlemen, that is not a procedure which the membership of the House will allow to stand over the long run.
Problem No. 2: Premature spending decisions. The problem with the proposal is that it calls for the establishment of the overall budget ceiling and subceilings early in the year, before public hearings have been held on the various budgets by Appropriations. A number of problems are associated with that procedure which we believe are profoundly unrealistic and needlessly complicated.
The Congress is forced to make macro-economic and priority choices at a time when their best judgments about future economic conditions are nothing more than seat of the pants guesstimates.
Priority choices will be made without adequate opportunity for review by an outside group – giving any President an advantage in the budget process he should not have.
Problem No. 3: A hopelessly complicated process. The establishment of an early session budget resolution adds another step to an already complicated budget process and will further delay the passage of actual appropriations bills.
A. If the overall ceilings and subceilings are binding – as they are in the original Whitten-Ullman proposal and in the Senate bill – the most controversial and important budget decisions each member is asked to make – i.e., overall spending levels and priority choices – will be made at the time when individual members of Congress are least able to make intelligent choices.
They will be at a much greater disadvantage in terms of budget information available to them than will members of the budget committee. They will not even have any reasonably firm estimates regarding program spending levels in the previous fiscal year. For example, as late as June 1972, the Administration was several billion dollars off in its projection of the amount of money that would be spent in the fiscal year that ended only one month later.
They will not have been able to read appropriations subcommittee hearing records to determine what facts were brought before the committee by witnesses who know the most about individual programs – including administration witnesses.
That procedure will put a very few people – members of the budget committee – in the driver's seat. It will severely handicap every other member of the House.
The winners in such an arrangement would be 21 members of the House who would collectively wield more power than any group since the time of Speaker Cannon.
The losers would be many:
Individual members of the House – especially younger members – who are interested in and want to retain their ability to have an effect on budget priorities;
The appropriations process itself, because the appropriations process would become meaningless.
The ceilings for the committee and each subcommittee would be established by the concurrent resolution of the budget committee, and while the committee could change its priorities within a subcommittee, it could not significantly alter the emphasis between subcommittees by, for example, cutting money for defense and using it for health, except within certain very narrow limits;
The elected leadership of both caucuses, who would have even less input in budget decisions rather than the additional input which is badly needed;
The public because budget levels would be established before the public has had a chance, through hearings in the Appropriations Committee process, to assess the adequacy of Presidential budgetary recommendations and to try to effect changes which they deem necessary;
The authorizing committees which would be deprived of an opportunity for meaningful participation in setting program priorities. The new budget committee would be able to work its will without regard for the oversight work conducted by the other committees. Thus, while authorizing legislation would have a June 30 cutoff date under H.R. 7130, the concurrent resolution on the budget would have been decided two months earlier, by May 1.
In short, we would be replacing one solitary king in the budget-making process – the President – with a collection of 21 new and enormously powerful demi-gods – members of the budget committee itself.
B. If the ceilings and subceilings are merely suggestive in nature – in other words unbinding targets – they will be a meaningless additional layer of procedures on top of an already complicated appropriations procedure and the result will be more delay. In short, it will not get the country off a continuing resolution, and that is the main procedural problem facing this Congress in budget reform.
Problem No. 4: The needless creation of another committee. H.R. 7130 would needlessly complicate the appropriations process by adding another committee. At the present time, the Bolling Committee (Select Committee on Committees) is trying to remedy problems of committee jurisdictions. Many of these problems arise from the tendency of the House to create another committee or subcommittee whenever a problem arises. It is ironic that a budget reform aimed to do something about the incredible fragmentation of the budget process proposes to further fragment the process by layering still another committee into the process. What we need is not additional committees, but a sensible restructuring of the committee process already in place.
What supporters of Whitten-Ullman say is that the traditional role of the Appropriations Committee – the coordination of Congressional budget actions has been so eroded that the Appropriations Committee no longer can do the job. It exercises control over only a minority portion of the budget. Backdoor spending – contract authority – and the like, is in other hands. A new budget committee is created to piece together the pieces. It is given the power to make macro-economic decisions.
Gentlemen, that is a Rube Goldberg approach. If you do that, you will have a three stage authoring and appropriating process. Authoring committees will authorize. Appropriating committees will appropriate. The budget committee will reconcile the results with fiscal reality.
Gentlemen, if you are going to do that, you are really suggesting that the Appropriations Committee should be abolished. The logical outcome of the creation of another committee – the budget committee to reconcile committee action with economic and fiscal considerations – is the abolition of the Appropriations Committee. Members of Congress will look at the system in a few years and they will say "since the budget committee decides priorities and reconciles spending with marco-economic reality, why do we need the Appropriations Committee anymore?
Why not just abolish the Appropriations Committee, add their functions to the budget committee, let the budget committee set over-all ceilings and subceilings and let the authorizing committees parcel out the money to individual programs within the targets set out by the budget committee?
If that is what should be done, let's do it now. Let's not refuse to face the logic of our decisions. Let's not add yet another layer. Let's do it right the first time.
And gentlemen, we think we can do it right – and do it within the present committee structure in a very simple way.
AN ALTERNATIVE APPROACH TO BUDGET REFORM
The Joint Study Committee recommended that Congress equip itself to do two things: Give Congress an opportunity to deal with macro-economic questions; give Congress an opportunity to deal with priorities within a comprehensive decision process.
Both of these opportunities are absolutely necessary and we suggest we can do them without passing a premature budget resolution each year; without setting up another layer of budget committees; without concentrating unprecedented budget power in a budget committee.
The remedy must fit the problem. The evidence gathered by the Joint Committee points to a different conclusion than the one it drew. The evidence is that concerning those matters within the province of the Appropriations Committee, Congressional action is timely and responsible. In each of the past 20 years, the Appropriations Committees have carefully examined the money bills brought before them and have reduced the amounts recommended by the President. Even as it operates through subcommittees – as any Congressional committee with a broad workload must – the Appropriations Committees have kept an eye on spending totals. Some would say that they have done too good a job of budget-cutting, but none can accuse them of being reckless spenders.
The Joint Study Committee also showed that appropriations action usually comes only a short time after the authorizations bottleneck has been removed. It is not the appropriations process that is responsible for the flood of continuing resolutions, and no change in that process will bring relief from this undesirable practice.
Let's recognize that fact and act accordingly.
What should be done?
1. Move the fiscal year to October 1st. As Comptroller General Staats has stated: "It is clear that the Congress cannot reasonably be expected to complete appropriation action on the budget by July 1." An October 1st date would enable the Congress to adequately consider the budget and it would enable the President to submit a budget using actual prior year figures. That would do a great deal to solve the most pressing problem we have – getting the country off continuing resolutions – provided that it is accompanied by other budget reforms. Other advantages are outlined by Mr. Staats, and we will not outline them here.
2. Early Congressional access to budget estimates. Require federal agencies to give Congress their budget estimates at the same time they are submitted to OMB in the Fall of each year. This would give Congress an early start on preparing the next year's appropriations, and equally important, it would give Congress some independence from the dogmatic estimates contained in the President's budget. While this might seem to be a radical breach in the executive budget process, it is nothing of the sort. When we served in the Wisconsin Legislature, we obtained agency estimates at the time they went to the Governor. In fact, this practice is followed in well over half of the states – without any dire consequences and, in many instances, with continuing cooperation between the executive and legislative branches.
3. June 30 deadline for new authorizations. Prohibit appropriation of money for any program unless it has been authorized by June 30, three months before the start of the new fiscal year (which would begin on October 1). Of course, there would be ample provision for the Rules Committee to vote exceptions in emergency cases. Two advantages would flow from early authorizations. First, the main cause of delays and continuing resolutions would be eliminated.
The authorizing Committees would have a full half year to report new legislation, but (with the fiscal year change) there still will be three months for completion of all appropriations. Second, these committees will be freed during the second half of each year to review and evaluate agency programs, a responsibility which currently often is pre-empted by the continuing pressure of authorizing legislation. (Of course, even more lead time could be obtained by simply requiring authorizations to be completed the previous calendar year. Either approach would be preferable to the present system.)
4. Return jurisdiction over backdoors to the Appropriations Committee. The Joint Study Committee presented conclusive evidence that backdoor spending is the practice which accounts for the fragmentation of the budget process and the inability of Congress to maintain effective control over spending. Backdoor practices means that rather than one set of committees with authority over appropriations, any committee can play the backdoor game. Backdoors come in a number of forms – contract authority, borrowing authority, mandatory spending – but their overall effect is to put certain categories of spending beyond the reach of Congress. It is now common to hear that 75 percent of the budget is uncontrollable. One of the main reasons why this percentage is so high is the upsurge in backdoor spending in recent years.
At the present time, more than $100 billion in spending does not go through the Appropriations committees. Most of this money is in the form of permanent appropriations, which doesn't go through any committee of Congress – it is appropriated automatically. As a matter of fact, we soon will reach the point where more spending – in the form of tax expenditures and direct expenditures – will go through the Ways and Means Committee than will go through Appropriations.
If the backdoor is again policed by Appropriations, it will be possible to control total spending in accord with economic policy and to balance the spending needs of all programs within the regular appropriations process.
5. Expand the initial overview hearings of the Appropriations Committee. Now the Committee hears only the Administration's witnesses: Treasury, OMB, etc. Expand hearings somewhat along the lines suggested by Comptroller General Staats by providing each department head – such as Defense, HEW, HUD – an opportunity to discuss major program developments and issues in their particular agencies. Presently the Appropriations Committee functions too exclusively on the subcommittee level. A two-week period of hearings on major developments in every policy field would give the Appropriations Committee members a better understanding of budget policy problems in areas other than their own subcommittee jurisdiction.
Also give the Joint Economic Committee and the Ways and Means Committee an opportunity in the same hearing, to respond to the major macro-economic policy judgments in the President's budget. This could provide an early Congressional response to the President's overall budget decisions by those best qualified to make that response without locking Congress into an early decision on those decisions.
That is important in this year's budget because early macro-economic decisions by Congress this year would not be worth a plugged nickel today because of the rapid changes in the economic situation (in the 4-month period between Feb. 1 and June 1 revenue estimates increased by $10 billion). Finally, the Committee would hear outside witnesses from national organizations which have made special studies of federal programs, expenditures and their impacts.
6. Give authorizing committees greater input into appropriations process. Have the Appropriations subcommittees proceed with hearings on submitted budgets just as they do now with one change. After the department secretaries present their policy statements to the appropriate Appropriations subcommittee, provide an opportunity for comment by the chairman and ranking minority members of each of the authorizing committees involved. This cooperative procedure should help to narrow the authorizations-appropriations gap which has proved so troublesome in recent years. The authorizing committees would have a direct channel of input into appropriations.
7. Individual appropriation bills. Allow the Appropriations Committee to bring each bill to the floor just as it now does. Allow the Committee of the Whole to work its will on each appropriations bill but in contrast to present procedure, when Committee of the Whole consideration is completed, instead of putting the bill to a final vote in the House, recommit it to the Appropriations Committee with instructions to report it back unchanged later in the session as part of an overall omnibus appropriations bill. (A possible variation would be to allow the House to complete action of each appropriation bill and send it to the Senate. After the Senate has acted, the subcommittees would go to conference and bring back the bills just as they do now. When the House finally acts on the conference report, refer that back to Appropriations for inclusion in the later omnibus bill. That would mean we would deal in the omnibus bill with the end product of the Congress rather than just the House. It would have the advantage of reducing the items in disagreement between each house in the final conference and it could vote the final conference faster and more manageably.)
8. After all 13 appropriation bills have been dealt with by the House, require the Appropriations Committee, acting in its budget control capacity, to bring back to the floor two measures:
(1) An omnibus appropriations bill representing the sum total of all the actions taken by the House on appropriations (including backdoor spending), and
(2) A substitute amendment representing its best judgment as to the reductions that are necessary in the light of fiscal and economic realities. Those recommendations would be made by Appropriations on the basis of prior recommendations to the House by the Joint Economic Committee on the preferable income, outgo, deficit or surplus given economic conditions at the time.
The final Appropriations Committee report on the omnibus bill could indicate the overall budget policy underlying its recommendations much the way the President provides such estimates associated with his recommendations for Congressional action on the budget.
This report could include:
A. The revenues estimated to be available given the current tax structure and the latest readings on the economy.
B. The estimated outlays associated with the committee recommendations on budget authority.
C. A statement of the estimated deficit or surplus, and the borrowing necessary to fund the spending plan.
D. A comprehensive listing of tax expenditures and the associated revenue losses.
This aspect of the report could be based on consultation between the Ways and Means Committee and Appropriations Committee, thereby providing the House with an up-to-date and comprehensive picture of the over-all budget at the time when final spending decisions are under consideration. This reporting procedure could be carried through the conference stage.
It could be possible to stage the process so that action on the individual appropriations measures is completed prior to the August recess – one month after the authorizations deadline, but two months before the new fiscal year starts. Congress would take up the omnibus measure upon its return in September.
With this improved timetable, we will be able to put an end to continuing resolutions or markedly shorten their duration.
9. Final action on appropriations. The House would then work its will on the recommendation of the Appropriations Committee. It could stick to its original action. It could accept Appropriations Committee recommendations, or it could modify them.
We believe this procedure would have a number of advantages.
1. It relies as much as possible on the current committee structures of the House; and
2. It is relatively simple and uncomplicated. It contains no reserve funds, no contingency funds as under the Joint Study Committee plan. It provides for no early straitjacket on the Congress.
And most importantly:
1. It does give the Congress an opportunity to deal with the crucial problem of priorities.
2. It does give the Congress an opportunity to confront and make decisions about overall economic and fiscal reality facing the country and the government.
It provides for consideration of both these questions at a time in which the maximum number of House members are informed to the greatest possible extent about individual programs, the content of individual budgets, and the economic problems of the country – at the end of this decision-making process – not at the beginning. It would parallel the construction of the President's budget which, after all, is the sum total of a great many individual decisions. It would be what it should be – an end product of the decisionmaking process, not an early stage, running, flying guess based on little specific information.
It also provides that macro-economic decisions will be made at a time which gives the Congress the best chance of actually guessing right. It gives Congress the opportunity to obtain the very latest economic news possible before making its economic decisions.
It also provides an opportunity for a greater degree of party accountability in the budget-making process by providing the leadership of each caucus an opportunity to help influence the outcome.
These procedures do not guarantee that Congress will make the right choices. But, they do guarantee that Congress will have the opportunity as it does not now have, to accomplish the two goals laid out in H.R. 7130:
1. To determine priorities among competing programs.
2. To face the economic and funding problems for the country, and decide clearly whether it will be responsible or not.
And it does it in a way which we believe is workable. It contains no magic procedural formula for guaranteeing that Congress will make the right decisions, but it does contain a practical way to make Congress face its choices clearly with knowledge and forewarning of the consequences of its acts. And in a legislative body of 435 people that is all you can ask. When we finish with budget action under this procedure, it will be clear who did what and the public will be able to hold us accountable.
We would like to file with the Committee later a bill which reflects in greater detail the recommendations which we are making now.