as not to come back to Congress. If you have a million dollars and you use it up in 6 months for a service that has to be done for the whole time if it was done accidentally, it is not the question-but if you do it knowing that you are going to come in saying "we will cut off mail service if you don't give us more money," I see nothing difficult in determining that question in terms of criminal proceedings.

Mr. MICHEL. Following that logic, through the years it has always been a matter of practice for the departments to come back and say, "Give us some more money."

Mr. PORTER. I haven't been here very long. Mr. Hébert and Mr. Gary and certainly Mr. Cannon have been here a long while, that is why I rely on their remarks here as far as past history goes. This may not be invoked sometimes, but to me it ought to be there when you have had an outstanding example of a willful flouting of what Congress has said. I think this instance is that kind of a case.

Mr. MICHEL. Of course that might be open to various interpretations if the Postmaster General feels that his obligation is to perform the services in keeping with what the Congress intended.

Mr. PORTER. The antideficiency law has provisions for that, where the volume of mail goes up. His own estimates about what the mail would be were there. He did not use the provisions of the law. He came in and pointed a gun at us and said "Give us the money or we will cut off service." He did not use the provisions that I am sure you are familiar with in the law.

Chairman DAWSON. Mr. Lipscomb?

Mr. LIPSCOMB. Mr. Chairman, Mr. Porter, how do you reconcile your thinking with the bill that was previously discussed, H. R. 11441, which directs the Bureau of the Budget to expend the moneys promptly?

Mr. PORTER. Promptly, I should suppose, would mean in accordance with the program they told Congress they were going to use. That is why these two bills are very much alike. I favor Mr. Hébert's bill and, as I see it, they want the money spent as Congress said it should be spent, not as the way the Bureau of the Budget thinks in terms of holding it back.

The purpose of making the criminal penalties apply to C-1, you do the same thing, spend money according to the program that Congress intended it should be spent. Do not spend it so you will have to come in and get more money.

It seems to me they are similar-promptly means in terms of the way Congress expected, had reason to believe it would be spent.

Mr. LIPSCOMB. But you are criticizing a postmaster for spending fourth quarter moneys in the second quarter?

Mr. PORTER. Yes. You mean he did it promptly; but he did it illegally because he has a method. The exceptions do provide that where services are greatly increased he can come in and ask for a supplemental where he sees he is going to be in trouble. He could come in and tell Congress if he saw his predictions were other than that at the time.

Mr. LIPSCOMB. Do you think the Bureau of the Budget was operating illegally if it held or impounded post office funds?

Mr. PORTER. For other quarters. When you figured out how you would need your money and you apportioned it over the four quarters, there is some leeway but not as much as you have here. If you take

money out of the fourth quarter and you know you are going to be in trouble, then I think that is illegal. There is a method. They can come in and ask for a supplemental appropriation right there and then.

Mr. LIPSCOMB. What you are saying is that the Bureau of the Budget should have fiscal responsibility and it should be flexible. But in my opinion, what H. R. 11441 says is that it should not be flexible.

Mr. PORTER. No; I am saying where they have a program whether it is by quarters or some other way, where it is designed to give the service that the money has been appropriated for, they should stick by that program and not spend ahead so they will come crying to Congress saying, "Give us the money or we will cut you off." That is what happened last year.

Mr. LIPSCOMB. My opinion is that there is some conflict of thinking between these two bills. The only conflict I could see was that Mr. Hébert's bill perhaps doesn't have a criminal penalty to it. It is more I think they are doing two different things.

Mr. PORTER. In one bill they tell them they should spend it promptly and you are saying they should allocate it out in four quarters.

Chairman DAWSON. Perhaps these two bills should not have been brought up for hearing at the same time because the same sections are not involved in the same bill.

Mr. LIPSCOMB. Mr. Chairman, if they got on the statute books, they would have to be administered together.

Chairman DAWSON. Yes; but in apportioning any appropriation reserves may be established to provide for contingencies and so forth; any appropriations subject to apportionment shall be distributed by months, calendar years, and so forth. Then it gives the Bureau of the Budget, by section 2, any appropriation available to an agency which is required to be apportioned as subsection (c) of this section, shall be apportioned or reapportioned in writing by the Bureau of the Budget.

In this case, he made his application to the Bureau of the Budget. They told him not to do this, to keep within that appropriation. He deliberately procured a violation of the act by the Bureau of the Budget so he could spend in excess anyway and then came up to the Congress and lay down his ultimatum.

Certainly we ought to be able to protect ourselves against that situation. Certainly he should not have been permitted to stay in that office when he took the attitude that he did and certainly Congress can do something about it and Congress should do something about it. But that does not apply, the same set of facts does not apply to the situation raised by the Hébert and Roosevelt bills and it is just in order that they might not be confused in the minds of the hearers that I take the liberty to say what I am saying.

It is an entirely different section and an entirely different situation and the two of them should not be compared in the way that we are comparing them.

Mr. LIPSCOMB. My thought was that the Hébert bill would come in conflict with the Antideficiency Act. At least it appears that way to

me.

Chairman DAWSON. Yes; you are right.

Mr. MICHEL. Mr. Chairman, concerning your specific incidents with the Postmaster General, who having run out of sufficient funds in the second quarter and wanting to draw upon the third and fourth; do you feel he should have come to Congress?

Mr. PORTER. This is not only my position, this is the law.

Chairman DAWSON. The Bureau of the Budget should have told him to stay within his appropriations. This was not done. He went into the fourth quarter and then laid down the ultimatum to the Congress, "I have to have more money or I will close down the service.' He should not have placed us in that position. We should protect ourselves to see that never happens again.

We first trusted to the man's judgment to do the right thing. It was demonstrated that he didn't do the right thing and no steps were taken against that man.

Now Mr. Porter comes in with a bill to make such an act by a public servant a crime. It was a criminal act when he purposely went out and did what was done under those circumstances.

Mr. MICHEL. Who would bring the action, the Attorney General? Mr. PORTER. There are certain practical difficulties, but let's get to those later.

Mr. MICHEL. I think they are very real.

Mr. PORTER. I am assuming good faith on the part of the Attorney General, as I assume you are, so we would not have those practical difficulties.

Mr. LIPSCOMB. You are not speaking politically anyway, are you? Mr. MICHEL. This is strictly nonpartisan.

Chairman DAWSON. Are there any other questions to be asked of this witness?

Mr. PORTER. I oppose Mr. Summerfield for a number of reasons, because I am on the Post Office and Civil Service Committee and I know something about that. I oppose him.

This rises above that. Congress should be able to protect itself from that kind of incident whoever is Postmaster General and whoever is in power.

Mr. HÉBERT. Mr. Chairman, to overcome Mr. Lipscomb's objection so there would be no conflict at all, I suggest that in the bill I and Mr. Roosevelt proposed, it read "any money appropriated by the Congress from being seasonably used" and take the word "promptly" out so there would be no conflict.

Chairman DAWSON. Will you prepare an amendment to that?

Mr. HÉBERT. Yes. How could you think in writing this bill I would expect them to take all the money in the Defense Department and spend it tomorrow morning?

Mr. LIPSCOMB. You have no doubt that that could not be done? Mr. HÉBERT. After seeing how they operate, nothing surprises I wanted to make that clear.

me.

I did not mean they should spend it overnight.

Mr. HENDERSON. Mr. Porter, are you familiar with the revision to the Antideficiency Act which was made in the Supplemental Appropriation Act for 1958? The Appropriations Committee included in there a revision which caused the department head or other office approving or requesting or recommending the apportionment to be subject to the same provisions of the law as the Director of the Bureau of the Budget. I understand-I have no official information

that the Appropriations Committee had the Postmaster General and the particular case that you referred to in mind when they made that recommendation which was later enacted by the Congress.

Mr. PORTER. Of course, that doesn't substitute for my bill. It merely enlarges it and addresses itself to the legal points raised in some of the reports.

Mr. HENDERSON. You do not feel that would be sufficient to meet the problem in general terms?

Mr. PORTER. No, because it does not C-1 is still just a pious statement of what we want them to do without any teeth in it. Mr. DAWSON. Thank you very much, Mr. Porter.

The next witness is Mr. Merriam for the Bureau of the Budget. Mr. Merriam.

DEPUTY

P.

STATEMENT OF ROBERT E. MERRIAM, DIRECTOR, BUREAU OF THE BUDGET; ACCOMPANIED BY JAMES BRADLEY, LEGAL ADVISOR TO THE DIRECTOR, BUREAU OF THE BUDGET

Mr. MERRIAM. Mr. Chairman, if I may preface my formal remarks on the lighter side, I am a little confused as to whether we are going to go to jail for spending money too fast or too slowly.

On the more serious side, I hope very deeply that no one is seriously suggesting that there is any deliberate usurpation of power on anyone's part because I can assure you that the Director of the Bureau of the Budget and all of his staff are very much devoted to the responsibilities which have been placed upon them.

There may have been differences of opinion as to how they should be carried out, but I can assure you that to the best of my knowledge every person in the organization is doing his best to assist in this great job of governing.

Mr. DAWSON. What do you think, Mr. Merriam, should have been done in the last case where the Postmaster General came to the Bureau of the Budget and was told more than once to stay within the apportionment for those quarters and failed to do that?

Mr. MERRIAM. On that particular case, Mr. Chairman, I think that there are several factors which have to be taken into account and this is one of the things which makes Congressman Porter's bill, it would seem to me, a little difficult to operate.

In the first place, the Congress did cut the proposals which were made by the President for the Post Office Department. I do not recall the exact figure, but it was a fairly substantial cut with no indication to the best of my memory that there should be any reduction in services or any specifications of where it should be, so the problem boiled down to a very honest difference of opinion as to whether the existing services which were being carried on could or could not be carried out with the reduced funds as allowed by the Congress.

Mr. PORTER. May I interrupt, Mr. Chairman?

Chairman DAWSON. With his permission. Will you permit the Congressman

Mr. MERRIAM. I would like to just present the case, if that is agreeable.

Chairman DAWSON. That is all right.

Mr. MERRIAM. When it became apparent to the Budget Director that the Department was not going to be able to live within the appropriation, it was at that time that the supplemental request was submitted.

Chairman DAWSON. Why would the Bureau of the Budget permit him to spend his fourth quarter money in the first and the second quarters?

Mr. MERRIAM. You mean in the reapportionment

Chairman DAWSON. No, it had been apportioned. It was given to him in four quarters.

Mr. MERRIAM. Let me ask Mr. Bradley to give you the details. Chairman DAWSON. Surely.

Mr. BRADLEY. To use the words of the Director as he testified on this subject before the House Appropriations Committee last year, he expressed it in this manner:

You must bear this in the context that I was under then. I had said no to everything on general principles because I was under instructions from the President to live within, substantially within the figure, so I was pretty ruthless about this thing.

He fully expected, as I read this testimony, to save the money involved and that the Post Office would be able to live

Chairman DAWSON. Is there no discipline within the Department? Would the Postmaster General do as he saw fit to do without regard to the President or the Bureau of the Budget?

Mr. MERRIAM. The answer there is that there was a difference of opinion or a difference of outlook as to whether in the third and fourth quarters they could get along with the reduced amounts of money that were available as a result of these actions. The point I wanted to make was that when in the jugment of the Budget Director it was apparent that they could not get along with the available money, he submitted the supplemental request.

One can argue about the timing of that, as to whether it should have been in March or in January, but it seems to me this becomes a matter of judgment, which is a most difficult thing to which one can apply a criminal statute.

If I may, I have a prepared statement, and I would like to give that. I appreciate very much, Mr. Chairman, the opportunity to present to this committee the views of the Bureau of the Budget on H. R. 11441, a bill to prohibit the withholding or impoundment of appropriations, and H. R. 7103, a bill to amend subsection (i) (1) of section 3679 of the Revised Statutes to extend the penalty provision of such subsection to violations of the requirement of apportionment of certain appropriations to avoid the necessity for deficiency or supplemental appropriations, and for other purposes.

In order to consider these bills in proper perspective, I believe it is necessary to discuss briefly our present budgetary cycle which begins many months before funds are appropriated. Agencies discuss their programs and budget plans in general terms with us more than a year before the start of a given budget year.

In the ensuing months, general budgetary guidelines or objectives are established with the agencies. In this context, the agencies prepare their budget proposals for submission to the Bureau of the Budget in the fall of the year preceding the next fiscal year.

As you know, in January, after weighing competing budgetary demands, probable available revenues, the international situation, and