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time the Subcommittee Print is proposed, that is a couple of months old information.

Mr. BENJAMIN. You are talking to what the subcommittee may do through its staff. But in respect to your office, I would assume then you have gotten down to a unified system, and this is it.

Mr. LAWLER. Yes, sir.
Mr. BENJAMIN. Mr. Michel, any questions?
Mr. MICHEL. You go ahead.

5 PERCENT CUT ON 1979 APPROPRIATIONS
Mr. BENJAMIN. Last year, a 5 percent cut was applied to the
legislative branch appropriation bill. Tell us where the cut was
applied, and which accounts were affected, and by what amounts.

Mr. HENSHAW. Once again, Mr. Chairman, if it is all right, I am going to let Mr. Lawler go ahead and explain.

However, in my statement, Mr. Chairman, I had referred to section 311 of the Legislative Branch Appropriation Act of 1979, mandating that of the total budget authority provided in the act, for payments not required by law, 5 percent shall be withheld from obligation and expenditure .

We are pleased to report to the subcommittee that due to the voluntary fiscal restraints by the offices, we estimate that the House, including its share of Joint Items, will have slightly over 6 percent of the funds which were provided in the 1979 act unexpended. This estimate is based on the spending levels during the first quarter of fiscal 1979 and further adjusting for the expenditures through January 1979.

I think it would be best if I had Mr. Lawler go over these in detail as to where the schedule of estimated projected balances would be.

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PROJECTED 1979 BALANCES BEFORE SUPPLEMENTAL Mr. BENJAMIN. We would like a list of the savings that are projected; we would like you to use the format of the comparative statement table on page 2 of the subcommittee print, and ask you to put that in the record.

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1/ Projection based on "four month" spending history in FY '79.

PROJECTED SURPLUS ITEMIZED Mr. BENJAMIN. For now would you please give us the total amount and then itemize it?

Mr. LAWLER. Yes, sir, Mr. Chairman. We have an overview of that now provided by treasury accounts, which arrives at the approximately 6.1 percent projected surplus the Clerk just mentioned. Mr. BENJAMIN. The total appears to be $22,948,000.

Mr. LAWLER. Yes, sir. We might emphasize at this time that these are projected balances. No assurances can be given that the spending rate wouldn't change in the course of the fiscal year, but this data is based on a 4-month spending level and reviewed by our office.

Mr. BENJAMIN. Let me see if I understand you, then. What you are indicating is that past experience shows that these various treasury accounts will not utilize all of their money, but you have not given them specific guidelines that 5 percent of their funds allocated had to be withheld. Is that what you are telling us?

Mr. LAWLER. That is correct at this point, Mr. Chairman. Mr. BENJAMIN. So, consequently, if the House leadership offices utilize that $138,000, there is no control, and we would be in violation of the 1979 fiscal appropriation; is that correct?

Mr. LAWLER. All of the treasury accounts were reviewed to determine in what context-

Mr. BENJAMIN. You apparently reviewed them and based your projections of savings on past experience. Did you notify the leadership office that it would have $138,000 withheld from it?

Mr. LAWLER. At this point, our office has not, inasmuch as it appeared that an even greater percentage than the 5 percent, which was referred to in 311 of the last year's bill just through voluntary fiscal restraints may be withheld.

At such point if it would appear to us that the 5 percent compliance that 311 requires, would not be met, then we would be forced to withhold from expenditure that much from their appropriation.

INTENT OF SECTION 311 Mr. BENJAMIN. I don't think that was the intent of 311. I don't think the intent was to go to the end of the fiscal year and say all at once you have used all the money, and we should only use 95 percent of it, so consequently you are going to go back to this subcommittee and ask for an additional appropriation so you can pay our people for the month of September.

Mr. LAWLER. No, clearly we don't anticipate coming in in August or September and notifying the offices. We did think a proper spending pattern, or at least a more real spending pattern, would be established after two fiscal quarters. We anticipated at the close of the second fiscal quarter to review the accounts, and if the percentages still appeared that they were going to have surplus funds far in excess of the cuts required by the amendment last year, that no mandatory reduction would be made.

Mr. BENJAMIN. Well, let me get back to my question. If I took the Joint Committee on Taxation, where you have a projected balance of $200,000, they don't know at this point from the 1979

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appropriation they are going to spend $200,000 less; do I understand that?

Mr. LAWLER. No, we don't know what they may be anticipating in making any obligations, either. They are really the ones in the driver's seat who know what obligations are going to be made. We are actually on a cash basis. We review the expenses they have submitted to us. If for any reason certain contracts exist that we are not aware of, or bills not turned in, that would affect this particular forecast.

Mr. BENJAMIN. Mr. Clerk, if I understand section 311, it says that 5 percent should be withheld from obligations, and if I understand what the gentleman is telling me, there is nothing withheld from obligations, but there is hope that your 6 percent figure will materialize. Am I correct in saying that?

Mr. HENSHAW. We reviewed this in detail, Mr. Chairman, with your staff assistant, Ed Lombard, with the Senate; we have gone back into the Conference Report, and it was stated that there would be a withholding of 5 percent. I have had my legal staff looking at what was demanded under section 311 to try and come up with a hard judgment that we could come up with.

JUDGMENT FACTOR The judgment factor was, and I take full responsibility for it, that we would look at what we were doing in the first quarter to get information on if we were withholding the 5 percent. At the present time, it appears that we are, and I am ready at any time to send a letter out, saying we are not in full compliance if we do not keep on doing that. The way we read and interpret the wordage in the Conference Report was that there would be the total 5 percent savings, and this was the figure that we were aiming for.

In fact, this is one of the reasons I brought my counsel, Stan Brand, to maybe give an interpretation of how we rationalized this and reasoned this out. Mr. BENJAMIN. I would entertain his rationalization.

Mr. BRAND. Mr. Chairman, I would go back to Mr. Lawler's earlier statement, that at the point which there is sufficient history to judge that 5 percent will not be lived up to, at that point every office subject to that amendment will be notified accordingly. And, as I understood what he said, there is insufficient history at this point to determine whether or not any one office will come within that provision.

Mr. BENJAMIN. Mr. Brand, how fair would it be to the offices that are involved here on these projections if you wait until half the fiscal year is over and then say to them, you are going to be withheld a certain number of dollars on the basis of our projections, and they have already hired someone-

Mr. BRAND. Mr. Chairman, under the amendment, the amendment is not an account-by-account reduction. It says there shall be withheld 5 percent. It is conceivable that we would be able to meet that statutory requirement by taking that amount out of a single account, for instance-

ensent time, it appeif we were within doing in the fisibility for

Mr. BENJAMIN. From your interpretation it is conceivable we could take it from the Library of Congress, if they don't spend all their money.

Mr. BRAND. No, the Conference Report placed each office with the responsibility for the items that it disburses. We do not disburse the Library of Congress; therefore, it would not come within our bailiwick. That would be someone else's concern. What I was indicating is that we could take it out of, for instance, the franked mail account, and realize the total 5 percent out of a single account, without having to disrupt perhaps the normal flow of the offices of the House which are subject-

Mr. BENJAMIN. Let me read the Conference Report, and you can tell me how your rationale is involved: “The 5 percent withholding shall be applied to each of the following: combined appropriations of the House of Representatives, and joint items that are disbursed by the Clerk of the House.” Mr. BRAND. Yes, sir.

Mr. BENJAMIN. Okay, now how are you getting to your rationale from the direction of the Conference Report?

Mr. BRAND. That is essentially, I believe, what I was trying to say, is that the items that are disbursed by the Clerk would be subject and would conform to the amendment as those items are disbursed. Now, as I understood your original question, it was how do we proceed down the road and get to a point

Mr. BENJAMIN. My question is why wasn't the law and the Conference Report followed where it says, “shall be applied"? What you are doing is giving us projections on a hopeful basis. I don't think this committee is going to gamble with that.

Mr. BRAND. Well, Mr. Chairman, “the 5 percent withholding shall be applied to each of the following:"-I would not say at this point we are in noncompliance. We have not reached the point at which it has become necessary for us to tell each office subject to the cut that they are exceeding the appropriated amount. At that point, we will direct each office subject to the amendment to take whatever measures they need to realize the cut, and, in fact, as I indicated-I think Mr. Colley would help me with this, if he might—the total savings might be achieved in any one particular account.

Mr. COLLEY. The combined total we felt, Mr. Chairman, could be 5 percent.

SECTION 311 NOT APPLIED Mr. BENJAMIN. “The 5 percent withholding shall be applied to each of the following: the combined appropriation of the House of Representatives.” You have not yet applied it. If it doesn't work out, somebody is going to suffer. In other words, you have not applied it. Whether you did it all in one account or 5 percent in each account, you have not yet applied it. You are giving us a schedule of estimated projected 1979 balances.

Mr. BRAND. With respect to some of the accounts applied on a month-by-month basis, for instance, some of those savings have already been achieved, and in that sense it would have been applied.

Is that correct, John?

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