My bill, H.R. 5203, is a very simple bill. It would require the President to include in each budget he submits to the Congress an amount not less than 5 percent of the estimated budget receipts for the ensuing fiscal year for retirement of the public debt.

After July of each year, the Treasurer would be required to set aside the first amounts received until the 5 percent figure was obtained. That amount would then be applied on the debt.

In addition, the bill would prevent the President from recommending loans as a means of making up any estimated deficiency in the budget except in times of war.

This provision would require the President to recommend taxes or other appropriate action as a means of balancing the budget.

For example, if the receipts for fiscal year 1961 were estimated to be $80 billion, the President would include $4 billion as a budget item to be used solely for the retirement of the public debt. The President would be required to recommend additional taxes or other taxes, but he could not recommend loans as a means of making up the estimated deficiency.

Then, after the budget went into effect July 1, 1961, the first $4 billion received in the Treasury would be applied on the debt.

Several bills have been introduced which prescribe methods of retiring the public debt, but my bill is the only one setting forth the above method.

Any family or business may be faced with the necessity of borrowing money at times, but the prudent family or businessman will set aside a certain amount of money out of receipts to meet such obligation. If not, that family or businessman will soon face bankruptcy.

Is it not reasonable to say the same principle applies to the Federal Government? As a matter of fact, I am of the opinion the Government should be even more alert in employing sound methods in meeting its obligation, since the solvency of the Federal Government is a matter affecting the lives of each American citizen.

It is time for us to realize the true fact about the significance of this gigantic public debt. It is also important for Congress to recognize the danger inherent in our trend toward the form of government with bureaucracies and ever-increasing budgets.

In 1940, the national debt amounted to $42 billion-those are approximate figures, of course. As of June 1, 1960, the debt amounted to approximately $289.5 billion, and it is estimated that by the end of the next fiscal year the debt will be $290.1 billion.

In 20 short years the debt has increased over $247 billion. Those who think we can continue this trend are living in a dream world. By the end of 1960, the per capita debt will be about $1,600 per person, which means the share of the debt of the average family of four will be approximately $6,400.

When you compare that with the national per capita income, which was reported to be an average of $2,196 in 1959, you will realize we must wake up to the fact that some steps toward sound fiscal policies are absolutely necessary.

Now, Mr. Chairman, and members of the committee, I have searched the speeches and the platforms of both major parties in this Nation, and for the past 25 years or better every platform and every candidate who has aspired to the office of the Presidency has said that he ran on

the platform of reducing or wanting to reduce Federal expenditures and the national debt.

If you will recall, after the conference between the late distinguished Senator from Ohio, Senator Taft, and the present occupant of the White House in 1952 when he was running for that office, he told the American people, according to the newspapers:

If you elect me President of the United States, within 4 years I will reduce the expenditures of the Federal Government to $60 billion.

I want to call the attention to the committee that consistently, I think, the Congress over the past 7 years, at least, has reduced the requested amount of appropriations. I think I am certainly justified in saying that.

Now, since 1952 or 1953, the beginning of 1953, the national debt was $259 billion. Today and I will use just rough figures-this is as of June 1, 1960-the statement of the Treasury Department shows the national debt at $289 billion, an increase of approximately $30 billion over that time.

In the last 10 years, in 1952, or the last 8 years, from 1952 to 1960, the spending of the Federal Government in 1952 was $65 billion. Today it is approximately $80 billion, or an increase of $15 billion per year. That, of course, does not take into consideration the tremendous expenditure of tax money going out in trust funds, and so forth, like, for instance, the Federal highway program, and so forth.

Now many people say and we have heard much about this, this increase in expenditures has been occasioned by the tremendous increase in the cost of national defense. I want to call your attention, Mr. Chairman, to the fact that the national defense cost in 1952, and that was when we were supposed to be having a little police action that some people called war, and I think was a war, the Defense Department at that time was expending $44 billion fighting the war. Today, in 1960, the defense requirements are $45 billion, so when you take into consideration that the cost of government has increased $15 billion, only 1 billion of that, Mr. Chairman, has gone into the cost of the national defense.

The increase in cost of government is not in national defense expenditures; $14 billion of that is going into domestic production. Now, we shouldn't mislead the American people on this thing, and they are being misled.

Now, of course, if this bill could become law, they would be required to set aside $4 billion a year to be applied to the retirement of the national debt. I hear much complaint about the $9 billion of interest that we are paying in this country on the national debt. We have to borrow money just like you and I have to borrow it, and the Federal Government does. If this money were set aside and applied on the national debt, it would reduce the interest rate that we have to pay for every year approximately $200 million per year.

Here are some more figures that might be startling to you. The expenditures in 1958, which is only 2 years ago, were approximately $72 billion; today $83 billion-plus, or an increase in the last 2 years of approximately $11 billion.

Now, Mr. Chairman, we ought to realize that we are using up, day by day and month by month and year by year, the natural resources

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of our Nation. A prudent man, when he is using up the natural resources, sets aside something. We are not. We continue to not only consume the natural resources of this Nation, but we are continuing to build up a debt in addition to that, and there must be a point of no return insofar as the debt of this Nation is concerned, and I say this in all sincerity, Mr. Chairman and members of this committee, if any businessman in this Nation operated his business like we operate the Federal Government, he would be in the bankruptcy courts in less than 3 months. It alarms me because of this terrific national debt, in view of the international situation how could we finance the Nation through another critical period of war, if it comes.

The high spending of the Federal Government brings on a lot of things. It brings on inflation. I don't know where the thinking of this Congress, and I say this advisedly, I don't know where the thinking of this Congress got off on the road that all problems can be cured in this world by expenditures of American dollars, or Yankee dollars, as they are called in many parts of the world.

High spending also destroys, by continuing rising costs. It destroys the savings of people, and brings about less purchasing power for people who are on fixed incomes. It does not encourage saving by young people of this Nation, which has been the thing that has made us a great nation. It destroys, in the economy, you might say, in the beginning and in the end.

In other words, it takes away from the old people what they have saved to enjoy a few years in the twilight of their life, and it discourages the young couple from ever saving because they say "Look at ma and look at pa who worked all their life, and now the retirement they were supposed to live on happily is dissipated." So I say it is time, Mr. Chairman, and members of this committee, that the Members of the Congress begin to give serious consideration, not just by voice, but in voting and in enacting legislation, to stabilize the fiscal policy of this country and make some attempt to pay off this huge debt.

We are accumulating, laying on to the shoulders of our children and our children's children, a debt here that we know we can't pay now, and I say we have been not living up to the duties and the obligations of this generation whenever we say that we are going to pass on to these children this huge debt.

We ought, if necessary, to have the courage to go in and levy the taxes necessary in time of high prosperity. If you can't reduce your debt at that time, if you continue in the time of high prosperity to have deficit financing, then I say that we are absolutely going contrary to everything in the way of fiscal policy that has made us a great and a powerful and the wealthiest nation on the face of the earth.

Chairman DAWSON. Do you regard the present time as a time of high prosperity?

Mr. HALEY. I might say, Mr. Chairman, you and I may not think so, but I have heard much of the fact that we are living in the time of unprecedented prosperity. I have heard that, and I think you will hear it probably this fall when you get around to

Chairman DAWSON. I won't be at any of those meetings where they say that.

Mr. HALEY. Well, I might say that I agree with the chairman, he probably won't be, but you are going to hear much of that in the news

papers, and you are going to hear much of that in certain statements that are made.

In conclusion, Mr. Chairman and members of the committee, I realize that while the present administration has talked a great deal about reduction of the public debt, the administration has not done anything about a reduction.

Moreover, the reports from the Executive Office of the President, the Office of the Secretary of the Treasury, and the Office of the Comptroller General of the United States says that this bill would not in effect operate as a debt reduction measure.

I want to call your attention to the fact that the bill requires, except in time of war, that each budget submitted to the Congress be a balanced budget, and furthermore, that the budget could not be balanced by loans, so I would suggest to the departments submitting reports to do a little more of their homework.

If you pass this bill, and its provisions are carried out, the bill will force payment in substantial amounts to be made each year on the national debt. And I might say right here, until World War I such was the law of this land, a requirement that certain sums be paid on the national debt.

If you do not believe this bill would accomplish this, I sincerely hope the committee would amend this bill in such manner as it deems advisable to bring about fiscal responsibility, a subject about which we have heard much, but from which we apparently have done nothing, not only in this present administration, but probably some of the administrations in the past. And I submit, Mr. Chairman and members of the committee, that I think if this kind of a bill, or if this kind of proposition was submitted to the American people, I think that would be overwhelmingly adopted.

Thank you, Mr. Chairman. I am happy to be here with your fine committee, and I hope that you will give favorable consideration to this which I think is so important to this great Nation of ours. Chairman DAWSON. Mr. Fascell.

Mr. FASCELL. Thank you, Mr. Chairman.

I am very happy to have this opportunity to hear once again my distinguished colleague from Florida. I am pleased to compliment him on the thorough statement which he has made on the subject in which I know he has a very sincere belief and interest. I can recall-well, let's put it this way, Mr. Chairman. He is very sharp with a pencil and has always been. I remember very pleasantly our service in the Florida Legislature when I was still wet behind the ears following my distinguished

Chairman DAWSON. You are not now, though.

Mr. FASCELL. No; I am just wet all over, now.

Mr. HALEY. If I may interrupt, he wasn't then, he was a very smart young fellow, and the first man in 50 years as a first-termer in the Florida Legislature to sit on the powerful House Appropriations Committee where he did an excellent job.

Chairman DAWSON. We are glad to have that background.

Mr. FASCELL. Starting then, I have known of Congressman Haley's interest in budgetary matters and on expenditures, and he is not one who talks idly about his belief. An examination of his voting record dating back from the time he has been in politics will indicate that he

puts his money where his mouth is, he believes in voting his convictions with respect to the operations of government

I think that is a basic element in this whole problem. Nonetheless, I want to tell my colleague and others interested in this type of legislation, I am not necessarily automatically impressed with the argument of those who are opposed to this idea. I think it can be done. I don't know whether it takes legislation, particularly, of any specified type. I don't think there is any question about the fact that what Congressman Haley and the rest of you gentlemen seek to do can be done.

I want to ask this question. You quoted figures on the relationship between the total amount of the per capita national debt and the per capita national income.

Mr. HALEY. Yes.

Mr. FASCELL Now, that is a relationship which bears on this subject, but don't you agree that also in fairness you must make a comparison between the per capita national debt and the total Federal assets?

Mr. HALEY. Yes; I think that is a fair statement.

Mr. FASCELL. You know, of course, that this committee undertook to put together a complete Federal inventory, and that we stay current on it, we hope. We feel it is very important for many reasons, them being this very question.

one of In other words, you have to know what your assets are as well as your liabilities before you know how bad off you are.

Don't you also agree that one of the matters on which a comparison should be made, when you are talking about per capita national debt, is not only per capita income, and total Federal assets, but also the total productive potential of your Nation?

Mr. HALEY. Yes; to a certain extent I would say this: Of course, the income of your Nation-after all, it shouldn't be measured too much in dollars and cents, because it doesn't make a whole lot of difference to me whether I have $100 or $200, if the $100 will buy as much as the $200, I am in just as good shape as somebody earning $200. The thing is when it goes to $200 to purchase $100 worth of goods or services, you are destroying the people who have over a period of 25 or 30 or 35 years accumulated something.

Mr. FASCELL. The point is, as you have already caught, that if the relationship remains the same, then you don't destroy this value, that is the relationship of the debt to the total potential productivity of the Nation.

Mr. HALEY. That is correct.

Mr. FASCELL. So this is a very important factor in consideration of just exactly where you are.

I won't argue the fact that regardless of where you are, if you can get rid of your debt, it is a good thing to do it. I think it is economically good as a matter of basic principle, since you save the interest if you don't save anything else.

Mr. HALEY. If I may say this, too, here is another thing that this continuing inflation of the dollar is causing, and I am surprised that some of my friends haven't thought about it.

In certain respects we have absolutely priced ourselves out of the world market. If everything followed the dollar, it would be a different thing, but it doesn't, and what we are doing in many instances