Mark Twain once said, "Everyone talks about the weather, but nobody does anything about it." He could just as well have been talking about the national debt, because that is all we have heard here in the Halls of Congress for many years, that something ought to be done about it.

I want to again compliment the committee for setting this matter down for hearing, because I think the country is vitally concerned with this overall problem. Even though many congressional reports are full of statements regarding the national debt, positive action on the problem has been meager.

I think perhaps I can-if I may interpolate for a moment-give some of the background here, and will give the citations which were asked for a moment ago.

In 1862, Congress enacted legislation which in part made an appropriation for 1 percent of the entire debt to be set apart as a sinking fund for the payment of the national debt. This provision, restated in section 3689, Revised Statutes, remained on the books until the enactment of the Victory Liberty Loan Act of 1919, and this act superseded section 3689 of the Revised Statutes and repealed the 1862 law. It also provided for a sinking fund to which annual payments of 2% percent of the outstanding national debt as of July 1, 1920, should be made.

Section 767 of title 31 indicates this is still the law, and in fact on page 835 of the budget--which we all have in brief form, but in the big budget $633,349,085 is appropriated for this purpose. I do not fully understand this entry, nor the status of the fund. I don't think it has accomplished its purpose, however, since we still have a growing national debt.

Gentlemen, this staggering debt and interest can only perpetuate inflation and lead to more financial problems and an ultimate bankrupt economy. Let's face up to the fact that we owe the debt and pay on it. We can't continue to ignore it, it won't go away by itself. Let's not worry about why it is so large, what made it that way, or who is responsible, but simply how to reduce it. That is what we are faced with today.

One of the best selling current books by Parkinson has a law that can be summarized as "expenditures will always rise to meet income," which I think has been demonstrated in our Government. Since we can't apparently repeal Parkinson's law, I think we can accomplish the desired result by enacting a new law.

Mr. FASCELL. By repealing Parkinson.

Mr. DEVINE. Thank you very much, gentlemen. That concludes my statement.

Mr. FASCELL. I think there is a telling point made by my colleague on the question of payments. You might as well pay to reduce the debt as to pay the interest. I think it makes a lot more sense, particularly when the interest rate has doubled, and there is nothing in sight to indicate that it is going to go down, particularly if the theory is carried out of converting the so-called short-range debt to a long

term debt.

Well, anyway, the point here is that you require the President to submit a budget based on 90 percent of anticipated revenues. That leaves several loopholes, as I see it, that perhaps we should consider.

No. 1, Congress could appropriate more than the budget.
Mr. DEVINE. That is right; I touched on that, I believe.

Mr. FASCELL. Therefore, it would seem you need an additional requirement, not only the submission of the budget, but that the Executive could not expend beyond the budget.

Mr. DEVINE. I would have no objection to that. I might add that I would adopt the theory that Mr. Haley mentioned earlier that the budget must be on a firm ground, not anticipating further revenues from new sources.

Mr. FASCELL. You also have another problem with respect to the submission of a budget on the present obligational theory when actually what really counts is the rate of expenditures in a given fiscal year. Perhaps we should likewise consider not only placing a limitation on the executive on the total amount but within each agency and depart

ment.

Mr. DEVINE. It wouldn't be easy, but I can see the wisdom of it.

Mr. FASCELL. We also know, of course, the Executive now, through budgetary controls, regulates the flow of money to the departments after it has been appropriated.

Mr. DEVINE. That is right.

Mr. FASCELL. So that we also have to take into account, do we not, if we are talking about your proposal specifically, the fact that you now have the tremendous amount of carryover or existing appropriations from which the Executive can draw and expend. I think it was estimated at $144 billion in appropriations the Executive now has in addition to his new budget. So, if you put your proposal into effect now, you still don't control the $144 billion rate which is already in existence.

Mr. DEVINE. Already in the works.

Mr. FASCELL. That gives rise to the proposition that, if you really want to allocate, you might have to place a limitation on the rate of expenditure.

Mr. DEVINE. I would rely on the wisdom of this committee in following through on that. As I say, this is a simple bill which outlines a principle.

Mr. FASCELL. As far as you are concerned, you would be willing to take into consideration all of these factors in achieving your objective.

Mr. DEVINE. Absolutely.

Chairman DAWSON. Thank you very much, Congressman.

Mr. DEVINE. Thank you, Mr. Chairman.

Mr. RHODES. Mr. Chairman, I don't have any more time. I was told to be here at 10:30. I assumed I would be heard. May I submit my statement for the record?

Chairman DAWSON. Certainly. I am very sorry that you do have to go at this time, because we had looked forward with pleasure to hearing

you.

Mr. RHODES. Well, I had looked forward with pleasure to being heard, particularly on the political speeches the gentleman from Florida just made, particularly the way Mr. Haley and Mr. Fascell were patting each other on the back. I thought it was great, and I am sorry I can't be here to refute it, but I find myself with no time.

Chairman DAWSON. Mr. Rhodes.

STATEMENT OF HON. JOHN J. RHODES, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ARIZONA

Mr. RHODES. Mr. Chairman, I appreciate this opportunity to appear before your committee on behalf of my bill, H.R. 1337, to provide that the President shall include in the budget submitted to the Congress under section 201 of the Budget and Accounting Act, 1921, an item for not less than $2 billion to be applied toward reduction of the national debt.

This bill is similar to bills I have introduced in both the 84th and 85th Congresses.

I feel that the American public has become increasingly conscious of the fact that we must not only live within our means from year to year, but that we must start paying off the national debt. As you know, there is nothing in the law which requires the President to submit a balanced budget. This bill would not have that effect, but it would have the effect of throwing any budget out of balance which does not have in it an item of at least $2 billion for reduction of the national debt.

Recently I sent a questionnaire to 22,000 people in my district, and one of the questions I asked was: "Do you favor systematically reducing the national debt each year?" Eighty-eight percent of them answered affirmatively-the highest percentage on any question in the questionnaire. The mail I receive every day bears out with increasing certainty that this is the feeling of the people in my district. I believe it also is the feeling of most people throughout the Nation.

If I interpret the feeling of the Nation correctly, the moral force behind a balanced budget would cause each President to think several times before submitting one which is deliberately out of balance. My idea is that any budget to be balanced should include an item of at least this sum for the specific purpose of reducing the national debt. Mr. Chairman, I am firmly convinced that the time for legislation of this kind is now and that there is an urgency here which needs to be considered.

If we do not reduce the debt at times like the present, when the Nation is prosperous, it is difficult to see how we will reduce it at all. Because we have not had such a provision as my bill contains, we have not been reducing the debt. There is not the compelling force necessary to do it. We have put it off year after year until we may well ask ourselves if we intend ever to do it, or if it will be possible to do it. If we do not begin the systematic reduction of the national debt when it is economically possible, the task will simply be that much greater at a later date and our ability to undertake it will be correspondingly weaker.

From an economic point of view, the payment year after year of early $10 billion in interest on money we have borrowed and already have used is staggering. Borrowing is justified and paying interest is necessary to get the money to do things that have to be done, but simply to carry a debt like this indefinitely and add the interest costs to the heavy burden already imposed on the taxpayers is not in my opinion a responsible course of action. We talk about unnecessary spending and waste in terms of thousands and hundreds of thousands of dollars when it applies to other Government programs. Here is

one that costs more than any other program except defense, and what are we getting for it? We have already spent the principal; now we just go on paying interest for programs of previous years which have no direct benefit for taxpayers today.

Mr. Chairman, my bill contains no guarantee that we will actually reduce the national debt and reduce the amount of interest we are required to pay each year, but it is a step in that direction. As a step, as an encouragement, and as a gesture of intent at least, I urge this committee and Congress to give it their approval.

Mr. COLLIER. Mr. Chairman, if I may, I would like to make the same request, since we have a very important bill before our committee this morning, and in doing so, I reiterate the same sentiments as my good friend who just departed, temporarily, so if I may, I will submit my statement.

Chairman DAWSON. Very well.
Congressman Collier.

STATEMENT OF HON. HAROLD R. COLLIER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS

Mr. COLLIER. I appreciate the opportunity to make this statement before this distinguished subcommittee of the Committee on Government Operations in connection with the bill originally introduced by my colleague, Representative Devine of Ohio, to which I have joined as cosponsor. May I commend the committee for its consideration of this and other bills with the same general purpose of reducing the current national debt.

I am sure that my deep concern over this Nation's present indebtedness is shared by many of my colleagues and millions of Americans. The accumulation of this Nation's present indebtedness is, as we all know, due to many factors. Some were of emergency necessity. On the other hand, a great part of the Nation's deficit spending over the years were acts of fiscal irresponsibility. But there is no point in dwelling upon the cause of this indebtedness, for the issue is one of a controversial nature. The divergence of philosophy on the proper role of the Federal Government in so many areas of our national life will keep it so.

The fact remains that it is incumbent upon the Congress of the United States to face the seriousness of this problem realistically and with sincerity of purpose. It is further the responsibility of this Congress to take steps to alleviate the burden of this indebtedness upon the generations to follow us.

Cognizant as we all are of the world situation and the necessity for maintaining a strong national defense, we are also morally obligated to maintain the fiscal stability of this Nation.

The bills in which I am particularly interested, H.R. 10971 and my companion bill H.R. 12515, provide a direct approach and a longrange solution to the problem of retiring our national debt. They simply provide that the budget submitted to Congress for each fiscal year, beginning the date of enactment, may not provide for expenditures in excess of 90 percent of the estimated net budget receipts of this United States for each fiscal year until the public debt has been retired. They do, however, provide that this subsection shall not be applicable in time of war.

As has been pointed out this would place the initial burden on the executive branch of government and provide Congress with a guideline for systematic debt reduction. Since the House of Representatives is responsible for controlling the purse strings of the Nation, it must, in my opinion, assume responsibility for supporting such a pro

gram.

In closing, may I say that whether the bills to which I have directed my statement are adopted or not, I would feel that the Committee on Government Operations would be doing the people of this Nation a great service in reporting some legislation that would provide for the systematic reduction of our present astronomical national debt. Chairman DAWSON. Our next witness is Congressman Robert W. Hemphill, author of H.R. 7649. Mr. Hemphill.

STATEMENT OF HON. ROBERT W. HEMPHILL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF SOUTH CAROLINA

Mr. HEMPHILL. Mr. Chairman and members of the subcommittee, thank you for allowing me to come and make a statement in support of my bill, H.R. 7649 and others seeking the same goal, seeking some way to reduce this national debt which hangs over America like the sword of Damocles. Debt can cause the death of a nation as surely as war, as surely as immorality.

Speaking of immorality, I think it is immoral to burden future generations with our debts. One will say that by debt we are preserving our Nation, its freedom, for those who come after us. I say that we are preserving those things despite our increasing debt and our refusal to do something about it is wrong, it is just unpatriotic. I will not admit we cannot reduce this debt, and I am willing to legislate and I am willing to sacrifice to return to obvious and actual solvency. This is not the first time I have tried to get congressional sanction of this idea. In 1959, I appeared before the Ways and Means Committee in support of legislation to reduce the debt 1 percent each year.

It is amazing to me that a time when business is supposed to be booming that we cannot begin some effort to retire the national debt. How can we ever expect to retire the debt in hard times when money is scarce and the economy is at a low ebb? It does not make sense and it is not sense.

If we cannot handle our national debt in times of prosperity, we are certain to have no way to do so in hard times, and no surplus to apply to debt retirement.

Last year I voted against the increased debt limit. One of my friends asked me if I had any fiscal responsibilities. I told him I not only had fiscal responsibilities, but it was time somebody protested against the annual surrender to inflation. I consider raising the debt limit a surrender, and, like you, seek some alternative. The hypocrisy of the temporary increase each time the debt limit is raised is gradually being exposed.

My bill would do nothing to destroy flexible debt management by our Treasury Department. It says you must reduce this debt each year, and I tell you gentlemen, until we tell the Treasury Department it must, it can always say either (1) it has no clear mandate from Congress, or (2) it has no budgeted funds, or (3) it cannot afford, as a fiscal practice, to arbitrarily apply funds to debt reduction. I say