Chapter 515 of 943 · Business Tides: The Newsweek Era of Henry Hazlitt by Henry Hazlitt
If Congress Means It
May 6, 1957
Admittedly the President’s letter to Speaker Rayburn is in large part a political document, designed to pin responsibility on Congress rather than the President for the $72 billion budget. When Mr. Eisenhower declares, for example, that billions of dollars of proposed 1958 spending are “unavoidable” because they are “rigidly prescribed by law,” he forgets that such laws can be changed, and that he himself has already had four years in which to recommend changes.
Nor must some $45 billion of proposed 1958 expenditures be treated as sacrosanct merely because they ostensibly “will support programs related to the protection of our country.” Some of these programs—particularly those relating to foreign aid—may be wholly unjustified; others may conceal great wastes. In its duty to scrutinize and economize, Congress should not be too much intimidated by the President’s sweeping declaration that “a multibillion-dollar reduction in 1958 expenditures can be accomplished only at the expense of the national safety and interest.”
Yet the President’s letter to Speaker Rayburn includes some statesmanlike proposals of the first importance. Congress cannot ignore these without raising serious questions about its own sincerity or judgment.
THE FOURTH DIMENSION
Mr. Eisenhower, for example, begins by acknowledging frankly a fundamental truth that a few of his recent statements have seemed to overlook: “I am sure many members of the Congress are as gratified as I am to note the growing awareness of private citizens that the dollars spent by the Federal government are in fact their own dollars, and that Federal benefits are not free but must be paid for out of taxes collected from the people.” Amen. Federal funds do not come out of any Fourth Dimension. When the Federal government meets more “needs” through Federal spending, the individual taxpayer is able to meet fewer needs of his own out of his own earnings.
At the end of his letter, Mr. Eisenhower names ten “steps” that he strongly urges upon Congress. Although all these recommendations deserve consideration, some raise complicated issues. Limits of space oblige me to concentrate upon recommendations seven and ten. Step seven is of major importance: “Enact bills approved by the Administration to implement Hoover-commission recommendations, such as the authorization of appropriations on the basis of annual accrued expenditures,” etc.
But step ten goes even farther. If adopted, it might enable the President to put into effect most of the other nine. This is the request to “grant the President the power now held by many state governors to veto specific items in appropriations bills.”
THE ‘ITEM VETO’
This proposal, so far from being novel, has been raised in one form or another for nearly a century. It is a power already possessed by the governors of more than three-quarters of our states. It is essential to even minimal budgetary responsibility. It a would be desirable, in fact, to go much farther, as do many of our states (as well as foreign governments). Congress might voluntarily relinquish the power to increase expenditures recommended by the President while retaining the power to reduce them. Only such a system could eliminate “pork barrel” appropriations. As the late Senator Vandenberg put it: “Congress long since learned that if you put a little something for each of the 435 Congressional districts in one appropriation basket, pretty nearly everybody will help carry the basket.”
There is no danger that the “item veto” would give the President excessive budgetary power. Congress already has an absolute veto, when it chooses to exercise it, on any appropriation proposed by the President. The “item veto” would not even give the President equal power of absolute veto over any expenditure proposed by Congress; Congress could simply overrule his veto by a two-thirds vote.
In place of competition in spending, what is needed is a system in which both the President and Congress have power to restrain the spending of the other. Only such a system can protect the taxpayers.
Business Tides: The Newsweek Era of Henry Hazlitt
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