Our Irresponsible Budget

May 23, 1949

In a series of five articles in Newsweek running from Jan. 10 through Feb. 7 Raymond Moley called attention to the “colossal failure” of our Presidential budget system. In line with the recommendations of the Hoover report, he suggested reforms of the Bureau of the Budget and the General Accounting Office to make these the real watchdogs they were originally intended to be when they were set up in 1921.

The budget reforms suggested by Moley seem to me to represent a minimum program. Even if they were adopted I fear that we would still be far from a really responsible budget. These reforms would help the President to watch and control the spending of his executive agencies. They would help Congress to watch and control the spending of the President. But who would watch and control the spending of Congress? And who would prevent the President, the House, and the Senate from trying to outbid each other in a three-sided competition to reach into the Treasury to spend the people’s money to curry favor with special group interests?

This problem has been with us since the birth of the nation. But it has now acquired unparalleled dimensions and gravity. For three years Congress has failed so ignominiously to abide by the self-imposed legislative budget requirements of its own Reorganization Act of 1946 that it is preparing to abandon them. And with shocking irresponsibility the House seems to be about to vote still another handout to veterans that would cost $9,000,000,000 at a “rough estimate.” This would be casually thrown on top of the most staggering peacetime expenditures ever made by this or any other government in the history of the world.

There can be no fiscal responsibility at Washington as long as Congress exercises the power to make appropriations not even asked for by the President. The British Parliament can make no expenditure that “the government” does not request. One result of this wholesome rule is that the Chancellor of the Exchequer is forced to present a responsible budget. When it accepts that budget, Parliament in effect authorizes all the proposed expenditures and proposed taxes at a single stroke. It is shown the budgetary situation as a whole. It acts simultaneously on both sides of it. Our own Federal “budget,” by comparison, is a meaningless bit of window dressing. Congress neither accepts nor rejects it. It plays by ear, making its real decisions on numberless individual and unrelated appropriation bills as it goes along. Appropriations and taxes are left to different committees not responsible to each other.

This chaos will never really be cured until the House and Senate themselves ask for a self-denying constitutional amendment under which, say, the House could not make any appropriation not requested by the President and the Senate could not increase any appropriation above that made by the House. Only this could end our three-sided spending competition. The House would still be free to cut the expenditures proposed by the President. The Senate would still be free to reduce the appropriations of the House. Unable to raise, they would at last exercise their power to reduce. As Henry Jones Ford pointed out: “There is no propensity of human nature more marked than jealousy of opportunities that one does not share.”

Historically, “the power of the purse” in the hands of the people’s representatives meant the power to withhold the purse from the sovereign executive. The House and Senate can never be expected properly to exercise the vital function of guardians of the public Treasury as long as they themselves are allowed to put their hands in the Treasury.

It may seem unrealistic to assume that either the House or Senate would ever approve such a self-denying amendment. Many may therefore dismiss this proposal as either academic or impossible. But until such a reform is made, we will continue to pay the enormous and perhaps finally unbearable costs of a budget out of control.