For a Responsible Budget

May 1, 1949

The British Labor government is spending $3,248,000,000 a year on social services and food subsidies and only $2,186,000,000 on defense. Yet instead of reducing these “welfare” handouts to leave more to spend on armaments, the British bureaucrats think it is up to the American taxpayer to make good Britain’s defense deficiency. Other European bureaucrats think likewise. What they spend on collectivist experiments is none of our business. Our business is merely to make good the shortage this creates in other directions. Ours not to ask the whys, ours but to subsidize.

In fact, instead of continuing to discuss what is wrong about the British budget, it would be just as well if we drew a moral for ourselves from the one thing that is right about it. It is balanced. For the fiscal year ended March 31 it shows a surplus of $1,537,000,000. For the new year which began April 1 it plans a surplus of $1,240,000,000.

Contrast with this the officially estimated deficit in our own budget of $5,400,000,000 for the current fiscal year and $6,200,000,000 for the coming fiscal year. Congress’s own staff of fiscal experts thinks these will be closer to $6,700,000,000 and $7,300,000,000 respectively.

In all fairness we must not overlook the ironic fact that our own current deficits can be mainly accounted for by ERP and arms aid to Europe, and that the British surpluses can also be largely accounted for by this same ERP and arms aid. Still, it remains remarkable that hard-pressed socialist Britain shows a balanced budget, while rich “capitalist” America, at the peak of its biggest boom, cannot bring its expenditures within its revenues.

The basic explanation is simple. Britain has a responsible budget system. And we have not.

In Britain the executive branch is made completely responsible for the budget. Both sides of it. The Chancellor of the Exchequer not only submits all his proposed expenditures in detail but submits at the same time the detailed taxes and tax rates by which he proposes to raise the revenues.

Parliament cannot tinker with this budget. It cannot increase an expenditure here or reduce a tax there. It must accept or reject the budget as a unified whole. And upon its ability to submit a budget acceptable to Parliament the government stands or falls. Compared with this, our so-called American budget is meaningless make-believe. The President submits his guesses of what expenditures and revenues are going to be. This is not accompanied by any overall tax bill, or by any bill at all. Congress neither accepts nor rejects this “budget.” The President may later propose still more expenditures as an afterthought. Congress may vote still more expenditures on its own initiative or reduce some unpopular tax regardless of the effect in throwing the budget further out of balance. The President and Congress then blame each other, and both deny responsibility.

We shall never approach the fiscal responsibility of the British system until Congress submits a self-denying Constitutional amendment to deprive itself of the power to vote any expenditure not recommended by the President. It must of course retain the power to reduce proposed expenditures. Stripped, like the British Parliament, of the power to raise, it might at last exercise its power to cut. As Henry Jones Ford pointed out: “There is no propensity of human nature more marked than jealousy of opportunities that one does not share.”

Congress can never be expected properly to exercise the vital function of guardian of the people’s purse as long as it is permitted to stick its own hands in that purse. If the President did not fear to be outbid by Congress, he would propose smaller spending in the first place. But as long as three branches of government—President, House, and Senate—are all free to compete with each other in offering handouts to pressure groups with the taxpayer’s money, the taxpayer’s prospects are not bright. Somewhere there must be a restraining hand. And it is most likely to act as such when it has no other power than the power to restrain.