To Restore Budget Control

May 4, 1953

Congress has allowed its Constitutional power of the purse to slip through its fingers. As Roswell Magill, former Under Secretary of the Treasury, recently testified: “Congress has lost annual control of expenditures.” He pointed out that $53,000,000,000 of the $78,600,000,000 expenditures proposed for the fiscal year 1954 is “not subject to control or review” by Congress this year. “Even if Congress failed to appropriate a dime during this session, the agencies and departments of the Federal government would have available for expenditures on June 30, 1953, more than $100,000,000,000 of unexpended balances from previous authorizations.”

As a first step to cure this situation, and to stop the deficits that the Federal government has incurred in twenty out of the last 23 years, Representative Coudert of New York has introduced a bill (H.R. 2) to provide that Federal expenditures shall not exceed revenues except in time of war or grave national emergency.

The bill provides, in other words, that there shall be no more deficit financing and no more resort to printing-press money, except upon at least a two-thirds vote of each house and a resolution declaring a national emergency. Such a measure would put a statutory limit on spending. It would tie spending directly to tax revenues. It would enable Congress to reassert its power of the purse and regain annual fiscal control.

The Coudert bill has the support of several governors and of the Conference of State Taxpayer Executives representing 38 state taxpayer associations. One of the witnesses in its favor was Governor Herter of Massachusetts. “Ten years spent here in Congress,” he said, “taught me one lesson so well, and gave me one warning so imperatively, that I shall not forget either. The lesson was that unless Congress maintains rigid control over the spending agencies of the Federal government we may one day find ourselves facing a national crisis of the first magnitude; and the warning was that Congress has lost such control. I believe that nothing more important can be done at this session than to regain it and thus establish national solvency.”

Governor Herter also reminded Congress that the procedure prescribed by the Coudert bill is essentially no different from the one which already exists in many states, including his own. “As governor, it is my Constitutional duty to submit [an annual] budget . . . and at the same time to submit a schedule of revenues to balance what I propose to spend. . . . The legislature may thereafter increase appropriations beyond my recommendations, but it may not be adjourned until it has provided the revenues to pay for what it appropriates.”

I am sorry to report that the new Secretary of the Treasury and the new Director of the Budget, while endorsing the aims of the Coudert bill, opposed the procedure it prescribed as too “inflexible.” This objection is without substance. The most flexible spending control that Congress can exercise (without actually abdicating its Constitutional responsibilities) is to set an overall ceiling on expenditures and allow the executive branch a very wide latitude in proposing whatever budgetary allocation of detailed expenditures it deems wise within that overall total. This is the way every individual business firm and every individual household is compelled to operate. Its total expenditures must be kept within its total income. If this is a “strait jacket,” it is a desperately needed one.

Nothing, certainly, could be more unrealistic than the procedure so often recommended—that “Congress should vigorously pare down spending, bill by bill and item by item.” A Federal budget of $78,000,000,000 is made up not merely of thousands, but of hundreds of thousands of individual items. No assembly of 531 men can possibly have the time and the knowledge to consider the merits of each item. But it can and does know that a chronically unbalanced budget and an intolerable burden of taxation can lead us to disaster.