Irresponsible Budget

April 1, 1957

The buck-passing between Congress and the President as to which one’s duty it is to slash the $72 billion budget, and how and where, not only darkens the hope that much real reduction will finally be achieved, but emphasizes once more that we will never get real economy until we set up a genuinely responsible budget system. What we have today is mere window-dressing, a make-believe budget system.

Under such a mock budget it is impossible to fix responsibility. The House can plausibly pass a resolution, as it did, requesting the President to “indicate the places and amounts in his budget where he thinks substantial reductions may be best made.” It’s his budget. He and his executive departments and agencies put it together. His Budget Bureau approved it. He recommended it. He himself has admitted that “there are literally thousands and thousands” of individual items in the budget. It does seem grossly unfair to put the burden of passing upon each of them on a body of 531 men, each of whom must pass upon hundreds of other questions.

Yet the President could also plausibly dodge responsibility by replying, as he did, that it was up to Congress to say which program “they don’t want to carry out if they are going to make big savings.” And this retort was supported by Cabinet members who pointed out: “We usually get more than we ask for.”

A WHOLESOME RULE

Responsibility is still further befogged by the Congressional habit of making appropriations for years ahead. It is estimated, for example, that the Administration could spend at least $3 billion more on foreign aid even if Congress failed to appropriate another penny for it. Responsibility is also hopelessly confused within Congress itself by the Senatorial habit of raising the appropriations of the House, and forcing an upward compromise, and by the Congressional practice of assigning appropriations to entirely different committees from those that must raise the money.

All of this would be impossible under a really responsible budget system. In Great Britain the wholesome rule has been established for more than two centuries that Parliament may reduce but not increase any spending recommendation made by the executive government. Under such a system the responsibility for the amount of spending, for a budget balance, and for the kind, rates, and yields of taxes, can be inescapably pinned on the executive.

FOR AN ITEM VETO

Is it utopian to hope that such system could be established here The practice in many individual states, certainly, gives no reason for despair. In New York State the governor’s annual budget must not only give estimated expenditures and revenues for the next fiscal year, be must be accompanied by bills containing all the proposed appropriation and any proposed new taxes. The legislature (I quote the state constitution) “may not alter an appropriation bill submitted by the governor except to strike out or reduce items therein.” If the legislature wishes to increase or add any appropriation, it must be by separate items or bills “each for a single object or purpose which “shall be subject to the governor’s approval.”

In 39 states, in fact, the governor has the power to veto individual items in appropriation bills. Senator Byrd of Virginia two years ago proposed a constitutional amendment to authorize the President to veto any item in an appropriation bill. In 1937 a similar reform was urged by Republican Senator Vandenberg, and supported then by President Roosevelt. It is the very minimum step toward a responsible Federal budget.

It is not, of course, the only step. Hardly less important would be adoption of the recommendation of the Hoover commission that Congress stop appropriating enormous sums that may not be spent for several years, and appropriate money only for actual spending in a given year. A joint House-Senate budget committee, as recently recommended in the Senate, would also help. What is needed, in short, is a thorough reform in our fiscal procedures. Until we get such a reform, the outlook for real economy will not be promising.