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BOARD OF GOVERNORS
o r THE

FEDERAL RESERVE SYSTEM

Office
To

Correspondence

Mr* Cherry

From

pate
Subject;

January 30,1950

Comments on S. 2898

Mr* Noyes

While I have not had an opportunity to r e a l l y study the b i l l , I
did look through i t over the weekend, and I had several thoughts which i t
seemed to me might be worthwhile j o t t i n g down for our future reference.
I think the basic idea of the b i l l — t h a t of having a j o i n t committee on the budget—is an excellent one. I t i s p e r f e c t l y true t h a t the approp r i a t i o n s committees of the two houses are usually under great pressure and
are seldom able to analyze f u l l y the background of the various appropriation
requests.
There are several specific features of the b i l l which seem to me
to go too f a r .
( 2 ) ( g ) provides t h a t "employees of the j o i n t committee—shall
have the r i g h t to examine the books, documents—or other records of any
agency of the U. S. Government—.n While t h i s a u t h o r i t y i s l i m i t e d by a proviso with respect to information c l a s s i f i e d for security purposes, i t does
seem to me t h a t i t constitutes an encroachment by the l e g i s l a t i v e branch on
the authority of the executive and t h a t t h i s examining authority should be
l i m i t e d to matters d i r e c t l y r e l a t e d t o the determination of budget r e q u i r e ments.
Subsection ( j ) provides t h a t i t s h a l l be the duty of each agency
of the Government to supply the j o i n t committee duplicate copies of any budget
request submitted t o the Bureau of the Budget. While I am not an authority
i n any sense on budgetary procedure, i t would seem to me t h a t the administ r a t i o n should have some opportunity to review requests generated w i t h i n
the executive establishment before they are considered by any committee of
Congress—either formally or informally. I f we assume t h a t a specific r e quest by a p a r t i c u l a r department i s regarded as improper or excessive by the
Bureau of the Budget, i t seems t o me t h a t only duplication and confusion
would r e s u l t from having such a request on f i l e with a j o i n t committee of the
Congress.
I n other words, i t would appear altogether appropriate t h a t the
executive should have an opportunity to 11 put i t s house i n order" before presenting budgetary requests to the Congress. There may be compelling reasons
why the j o i n t committee should be aware of a l l requests made by the executive
agencies but I do not know what they would be. J^r personal experience i n
working with the budgets of the Department of State would indicate t h a t there
are many changes, not only i n the gross amount of the o r i g i n a l request but
i n the i n t e r n a l organization supporting the o r i g i n a l request, between the
time the preliminary sheets are submitted to the Bureau of the Budget and




Mr. Charry

-2-

the f i r s t formal hearings before the Bureau. I f a l l these changes and a d j u s t ments had to be reported and explained to a j o i n t committee of the Congress,
as w e l l as to the Bureau, i t would consume a great deal of time and e f f o r t .
There i s one other point which i s not completely clear to me, a i r
though a study of a l l of the r e l a t e d l e g i s l a t i o n might c l a r i f y i t .
Both of
the appropriations committees, but p a r t i c u l a r l y the appropriations committee
of the House, are equipped with f a i r l y large and quite competent s t a f f s . How
the work of these s t a f f sroups would be coordinated with t h a t of the s t a f f of
the j o i n t committee lqf9 as I have indicated, altogether clear to me. I note
t h a t professional employees of the j o i n t committee may be d e t a i l e d to advise
and assist the appropriations committees and subcommittees, but i t seems to
me that some overlapping and confusion i s a t least a p o s s i b i l i t y .
One other point—the b i l l does not mention anything about the r e l a t i o n between the proposed j o i n t committee and the two committees on expenditures i n the executive departments. Several of the functions of the j o i n t
committee set f o r t h i n the b i l l would seem to overlap those of the e x i s t i n g
expenditures committee. Personally, I regard the expenditures committed as
something of an anathema, and I think i t would be a very good thing i f they
were replaced by a j o i n t committee, such as the one herein proposed, but i t
does seem to me t h a t there i s some danger i n having both.