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LEGISLATIVE BRANCH
APPROPRIATION BILL FOR 1946

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HEARINGS

BEFORE A

SUBCOMMITTEE OF THE

COMMITTEE ON APPROPRIATIONS

UNITED STATES SENATE

SEVENTY-NINTH CONGRESS

FIRST SESSION

ON

H. R. 3109

A BILL MAKING APPROPRIATIONS FOR THE
LEGISLATIVE BRANCH FOR THE FISCAL
YEAR ENDING JUNE 30, 1946, AND

FOR OTHER PURPOSES

Printed for the use of the Committee on Appropriations

UNITED STATES
GOVERNMENT PRINTING OFFICE

WASHINGTON: 1945

JUN

11

1945

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS

MILLARD E. TYDINGS, Maryland, Chairman

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LEGISLATIVE BRANCH APPROPRIATION BILL, 1946

THURSDAY, MAY 17, 1945

UNITED STATES SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,
Washington, D. C.

The subcommittee met pursuant to call, in the Appropriations Committee room, Capitol, at 10:30 a. m., Senator John H. Overton (acting chairman of the subcommittee) presiding.

Present: Senators Overton (presiding), Green, Chavez, Maybank,
Murdock, Bridges, and Reed.

Also present: Senators Taft and O'Mahoney.
Senator OVERTON. Gentlemen, we will proceed.

STATEMENT OF HON. SHERIDAN DOWNEY, A UNITED STATES
SENATOR FROM CALIFORNIA

ASSISTANT CLERK TO CIVIL SERVICE COMMITTEE

Senator OVERTON. We are glad to have you proceed now, Senator Downey.

Senator DowNEY. Thank you.

Mr. Chairman, I am chairman of the Civil Service Committee. As you know, when a Senator is chairman of a committee, all of his clerks are carried as clerks of that committee. But I have no special clerk assigned to me because I am chairman of that committee. Mr. Thompson, our auditor, tells me that there is no other important committee or, at least, that there is no other chairman of an important committee or as important as the Civil Service Committee that does not have an extra clerk assigned to him by reason of his being chairman of that committee.

I have assigned one of the young women on my senatorial staff to do the work of the Civil Service Committee. It takes all her time. She writes probably 20 or 25 letters a day, answering inquiries and giving information, and she answers about the same number of telephone calls, attends to legislation, and, of course, attends the hearings of the committee. Sometimes I have to have additional assistance for her, out of my office.

The work in my office is very heavy. Although, of course, the larger States have some extra clerks, I find that the clerks that I can provide out of the allowance made to me as a Senator are not sufficient to do my work; and for many months I have been carrying either one or two girls out of my own pocket. At the present time I find it. necessary to employ a girl beyond what my senatorial allowance will provide, and I am paying her $225 a month.

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The young lady who is doing the Civil Service Committee work happens to be a graduate of the Law School of the University of California and has been admitted to the bar. I am paying her $3,180 a year.

In view of the fact that I am now carrying one clerk out of my own funds, and in view of the fact that every other committee, so I am advised by Mr. Thompson, does have a clerk, I am here earnestly beseeching that special allowance be made to me for a clerk at $3,180, which is the amount I am now paying the clerk in the Civil Service Committee.

Senator BRIDGES. I think something of that sort is in line with giving additional assistants to Congress to do the job, and I think the Senator is justified in what he asks.

Senator DowNEY. Thank you.

Senator Byrd, who is on my committee, told me he would support me in my request, because he knows the amount of work that is being done.

STATEMENT OF COLIN F. STAM, CHIEF OF STAFF, JOINT COMMITTEE ON INTERNAL REVENUE TAXATION

Senator OVERTON. Very well, Mr. Stam. Please state your full name and your present official position to the reporter.

Mr. STAM. Yes, sir. My name is Colin F. Stam. I am chief of staff of the Joint Committee on Internal Revenue Taxation.

Senator OVERTON. How long have you been engaged in the study of revenue and income-tax law?

Mr. STAM. I came with the committee about 1927. Before that I had some Government and private experience in taxation. But I have been up here on the Hill since 1927.

Senator OVERTON. Continuously?

Mr. STAM. Yes.

Senator OVERTON. All right. Do you have a statement to make?

EXPENSE ALLOWANCE TO MEMBERS OF CONGRESS

Mr. STAM. In response to the request of your committee, I have a short statement that rather summarizes the problem. First let me state the provision of the House bill, H. R. 3109, relating to the item of $2,500 for each Representative and Delegate. It reads as follows:

'There shall be paid to each Representative and Delegate, and to the Resident Commissioner from Puerto Rico, after January 2, 1945, an expense allowance of $2,500 per annum to assist in defraying expenses related to or resulting from the discharge of his official duties, to be paid in equal monthly installments.

The House report, which is in justification of this $2,500 item, contains the following statement:

The bill includes an expense allowance of $2,500 per annum per Member. For many years Members of the Congress have been subjected to a myriad of expenses incidental to the efficient conduct of their respective offices. During the emergency period immediately prior to the war period and during the war period sessions of Congress have been almost continuous, with demand for service mounting. As a result, Members have been compelled to go to excessive expense which, in any other department of the Government or in normal business administration, would be paid by the department or business which is beneficiary

of such service. The expense has during the period of high war costs caused a heavy drain on the Members' personal finances, for matters not personal but directly incidental to public office. The committee, therefore, recommends that a reasonable average allowance for such pertinent expenses be made. The committee knows such action to be consistent with departmental appropriations and believes it to be consistent with the public intent and welfare. Since this

amount is entirely for expenses incidental to office, it would not be income, therefore not taxable.

QUESTION WHETHER AMOUNT IS TAXABLE

The bill itself does not say anything about the expense money not being taxable; it is merely referred to in the report.

The problem which I think the committee will wish to consider is whether language of the bill would be sufficient, in itself, to exempt the $2,500 from the income tax, if it is desired to extend this $2,500 allowance to the Senate.

AUTHORITY IN INTERNAL REVENUE CODE FOR ALLOWING DEDUCTION OF EXPENSES

The Internal Revenue Code is the only authority for allowing the deduction of expenses. In the Internal Revenue Code we find these two provisions. First, section 48 (d) provides:

The term "trade or business" includes the performance of the functions of a public office.

That was put in prior to 1932, by Senator Reed, of Pennsylvania, who was interested in the question of whether a Senator could get expenses for his ordinary office expenses, and at that time there was some doubt arose even as to that.

Senator OVERTON. What part of the Internal Revenue Code is that?
Mr. STAM. That is section 48 (d) of the Internal Revenue Code.
Senator OVERTON. You have quoted it in full, have you?
Mr. STAM. That is right.

The section which allows expenses, under the Internal Revenue Code, reads as follows-it is section 23 (a) of the Internal Revenue Code, and it is the section which is the authority for allowing business expenses, and it is the only authority of that sort in the income-tax law:

All the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including a reasonable allowance for salaries or other personal services actually rendered; traveling expenses (including the entire amount expended for meals and lodging) while away from home in the pursuit of a trade or business.

Just a moment ago I quoted section 48 (d), which provides that "the term 'trade or business' includes the performance of the functions of a public office"-or, in other words, that the performance of the functions of a public office is a trade or business. So the authority for allowing these expenses, so far as Members of Congress are concerned, is derived from section 23 (a).

Senator OVERTON. You have not quoted all of that provision. Do you have the remainder of it? Or shall I supply it now, if you have not? I have it here, Mr. Stam.

Mr. STAM. Yes, if you care to do so. I have read just the pertinent part.

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