ment which affords the Appropriations Committees of the House and the Senate opportunity for an annual review when the hearings are held on the appropriation bills. The Treasury Department would be glad to give your committee any further assistance that it migh require. Sincerely yours, (Signed) E. H. FOLEY, Acting Secretary of the Treasury. EXCERPTS FROM GENERAL APPROPRIATIONS ACT, 1951 Page 87, Rural Electrification Administration: "To carry into effect the provisions of the Rural Electrification Act of 1936, as amended (7 U. S. C. 901-915), as follows: LOAN AUTHORIZATION "For loans in accordance with said Act, and for carrying out the provisions of section 7 thereof, to be borrowed from the Secretary of the Treasury in accordance with the provisions of section 3 (a) of said Act as follows: Rural electrification program, $350,000,000; and rural telephone program, $32,500,000; and additional amounts, not to exceed a total of $150,000,000 (including the uncommitted balance available as a carry-over from the fiscal year 1950), may be borrowed for the rural electrification program under the same terms and conditions if and to the extent that the Secretary of Agriculture shall certify, from time to time, to the Secretary of the Treasury that such additional amounts are required during the fiscal year 1951, under the then existing conditions, for the expeditious and orderly development of the program." Page 88, Farmers Home Administration: LOAN AUTHORIZATION "For loans (including payments in lieu of taxes and taxes under section 50 of the Bankhead-Jones Farm Tenant Act, as amended, and advances incident to the acquisition and preservation of security of obligations under the foregoing several authorities): Title I and section 43 of title IV of the BankheadJones Farm Tenant Act, as amended, and title V of the Housing Act of 1949 (except grants under 504 (a)) $65,000,000, of which not to exceed $3,500,000 of the amount available for the purposes of title I and section 43 of the BankheadJones Farm Tenant Act, as amended, may be distributed to States and Territories without regard to farm population and prevalence of tenancy, in addition to the amount otherwise distributed thereto, for loans in reclamation projects and to entrymen on unpatented public land (sums available for loans under title V of the Housing Act of 1949 to remain available until expended); title II of the Bankhead-Jones Farm Tenant Act, as amended, $85,000,000; the Act of August 28, 1937, as amended, $4,000,000: Provided, That not to exceed the foregoing several amounts shall be borrowed in one account from the Secretary of the Treasury on the request of the Secretary of Agriculture at such rate of interest as may be determined by the Secretary of the Treasury, but not in excess of 3 per centum per annum; and the Secretary of the Treasury is hereby authorized and directed to lend such sums to the Secretary upon the security of any obligations of borrowers from the Secretary under the provisions of said Acts: Provided further, That the Secretary may utilize proceeds from payments of principal and interest under such Acts to repay the Secretary of the Treasury the amounts borrowed therefrom for the purposes of such Acts: Provided further, That for the purposes of making loans pursuant to the foregoing authority, the Secretary of the Treasury is authorized to use as a public-debt transaction the proceeds from the sale of any securities issued under the Second Liberty Bond Act, as amended, and the purposes for which securities may be issued 57. U. S. C. 903 provides that for the purpose of making funds available to the Rural Electrification Administration for loans, the Secretary of the Treasury is authorized to use as a public debt transaction the proceeds from the sale of any securities issued under the Second Liberty Bond Act, as amended. under that Act are extended to include such loans to the Secretary: Provided further, That repayments to the Secretary of the Treasury on such loans shall be treated as a public-debt transaction." Authorizations to expend from public debt receipts, and advances for fiscal year 1950 and 7 months of 1951 1 Excess of repayments, deduct. 2 Amount authorized increases by $250,000,000 July 1, 1951. Represents borrowings transferred from Reconstruction Finance Corporation pursuant to Reorganization Plans Nos. 22 and 23. * Includes $1,147,947,137 borrowings by RFC transferred to Housing and Home Finance Agency. NOTE. The following authorizations, available indefinitely under existing legislation, are not included in the budget estimates for 1951 and 1952: Citation Amount authorized Secretary of the Army.. Federal Farm Mortgage Corporation.. 5 U.S. C. 234. 12 U. S. C. 1020c. $150, 000, 000 2, 000, 000, 000 3, 000, 000, 000 4, 125, 000, 000 Senator MONRONEY. May I have permission at the conclusion of the testimony today to insert some material from the staff regarding the United States Bureau of Efficiency that I asked some questions about yesterday? I think it will be helpful to have that in the record. Senator HOEY. That will be included at the close of the hearings today. (The material referred to appears as appendix B on p. 165.) We will now hear from Mr. Lindsay Warren. STATEMENT OF LINDSAY C. WARREN, COMPTROLLER GENERAL OF THE UNITED STATES; ACCOMPANIED BY FRANK L. YATES, ASSISTANT COMPTROLLER GENERAL; FRANK H. WEITZEL, ASSISTANT TO THE COMPTROLLER GENERAL; AND ROBERT F. KELLER, ASSISTANT TO THE COMPTROLLER GENERAL Senator HOEY. I see you have a prepared statement. Do you want to read that and answer questions at the conclusion of it? Mr. WARREN. Yes, sir. I can dispose of it in just a few minutes. Senator HOEY. Very well. Mr. WARREN. Mr. Chairman and gentlemen, I am Lindsay C. Warren, Comptroller General of the United States. I appreciate the invitation to appear before you to give you my views on S. 913, which would create in the Congress a Joint Committee on the Budget. Each and every one of you know of my steadfast support of economy in Government. In the General Accounting Office the number of personnel employed has been reduced well over 50 percent in the last 5 years. As for elsewhere in the Government, the efforts put forth by the General Accounting Office to achieve economy and proper accounting for public funds have been constant and in my opinion productive. Many of our accomplishments have been in the form of large slices at one time, but for the most part it is a day-by-day continuing attack upon the erroneous, illegal, or wasteful use of the taxpayers' money. Some of the questions we have raised with the other departments and agencies and even some situations I have brought to the attention of Congress may have seemed inconsequential, as compared with the billions that are being spent by our Government every year, but I learned many years ago that the forest cannot be felled with a single stroke of the ax. It must come down bush by bush and tree by tree. I know well the feeling of most of you toward the expenditures that are being made by our Government today. With a feeling of frustration, the answers are sought to the question, "When, where, and how can we cut Government expenditures on an informed and intelligent basis?" The answer is not easy. The bill before you today, which was introduced by your chairman, is a thoughtful effort to provide the machinery to furnish the answers to that question. S. 913 would establish in the Congress a Joint Committee on the Budget. The duties of the Joint Committee would be to inform itself on matters relating to the annual budget of the agencies of the Government, and to provide the Appropriations Committees with such information on items in the budget as may be necessary to enable those committees to give an adequate and thorough consideration to the budget request. In addition, the committee would consider all available information relating to estimated revenues, essential programs, and changing economic conditions and report to the Appropriations Committees findings relating to revisions in appropriations which may be required to hold expenditures to a minimum consistent with the requirements of Government operations and national security. Also, the joint committee would have the duty of recommending to appropriate standing committees of Congress such changes in existing law as may bring about greater economy and efficiency in Government and would make such reports and recommendations to any standing committee on certain matters relating to deviations from legislative authorizations as may be deemed necessary or advisable by the committee, or as may be requested by any standing committee. The desirability of this means of finding the answers to your question of where to cut Government expenditures is, of course, a policy question that the Congress itself is in the best position to decide. It is recognized that some of the work to be performed by the proposed joint committee would parallel the work presently being done by the Appropriations Committees, as well as some of the work being done by the Bureau of the Budget. On the other hand, the proposed committee would provide a medium for bringing together for the Congress the results of the work performed throughout the Government on budget and other financial matters, and for an independent examination and appraisal of such results by a joint committee of the Congress, as well as additional means of developing factual information for the Appropriations Committees on specific items in the budget. I have been informed that Mr. T. Coleman Andrews, president of the American Institute of Accountants, who appeared before your committee on last Tuesday, has oposed the approach to the problem as proposed by the bill under consideration, and has recommended that the General Accounting Office be given the job to do. I appreciate the confidence he has expressed in the General Accounting Office, but in connection with his proposal I wish to take this opportunity to give you a little background information. I am sure that many of you are familiar with section 206 of the Legislative Reorganization Act of 1946. Section 206 authorizes and directs the Comptroller General to make an expenditure analysis of each agency in the executive branch of the Government (including Government corporations) which, in the opinion of the Comptroller General, will enable Congress to determine whether public funds have been economically and efficiently administered and expended. I neither advocated nor opposed the inclusion of section 206 in the Legislative Reorganization Act, but as soon as it became law we in the General Accounting Office began to look for ways and means of carrying out the desires of the Congress. We made a detailed study of the section and decided that under the wording the sky was the limit. That was true then and is true now. In view of this, I felt that before taking any action I should first seek some guidance from the Congress or from the committees that we are required by law to serve, such as the Appropriations Committees and the Committees on Expenditures. I requested an informal meeting with representatives of those two committees, and I met on March 1, 1947, with approximately 25 Members of the House and Senate Committees on Appropriations and the Expenditures Committees of the two Houses. We laid our problem before those gentlemen and I think I am safe in saying that it was the unanimous thought at that time that we should make only a modest beginning. Based on that meeting, I included in the budget estimates for the operation of the General Accounting Office for the fiscal year 1948, the sum of $1,000,000 to begin the work required by section 206 of the Legislative Reorganization Act. However, when the appropriation bill was reported by the House committee, the sum requested was not included in the amounts recommended to the House. It was stated on the floor of the House by a member of the House Appropriations Committee in charge of the bill carrying funds for the General Accounting Office that with the assistance being furnished by the General Accounting Office in its regular reports and otherwise to Congress and to its committees and with the additional help available in the augmented committee staffs, no additional appropriations to carry out the duties under section 206 could then be justified. It was further stated that if such expenditure analysis were to be made on such a scale by a permanent staff, it should be done by the General Accounting Office. The member also said that he had discussed the matter with me and I did not object to the elimination of the item provided it was understood that the General Accounting Office could not begin work pursuant to this new function unless and until an appropriation was made for it at some later date. At the time of consideration of the independent offices appropriation bill for 1950, the Senate Appropriations Committee included the sum of $800,000 for the General Accounting Office to begin to carry out the duties under section 206. While this amount was included in the bill as passed by the Senate, it was eliminated in conference. In view of the position taken by the Congress, both in 1947 and again in 1949, the General Accounting Office has not set up any special activity to carry out the duties set forth in section 206 in the manner contemplated by the Legislative Reorganization Act. However, in connection with examination of expenditures, we frequently come across situations which indicate wasteful and extravagant practices in Government. When these cases are uncovered, the facts are reported to the heads of the agencies involved for corrective action, or to the Congress or its committees if deemed of sufficient importance to merit such action. I am sure that you understand that section 206 of the Legislative Reorganization Act differs from the proposals set forth in the present bill. The important distinction is that section 206 contemplates a post examination of the expenditures made by the executive agencies to determine whether the amounts appropriated have been economically and efficiently administered and spent. On the other hand, the proposal in the present bill contemplates an examination of the estimates and justifications submitted by the agencies in support of proposed appropriations. While the work of appraising the budget estimates and the work which would have to be done under section 206 are both mammoth jobs, if Congress should provide the necessary appropriations for the General Accounting Office to do either or both of the jobs, we will make every effort to do them. am But certain understandings would have to be reached. First, I sure you will understand that it would not be possible for us to cover all departments and agencies of the Government at the same time. The approach would have to be highly selective. |