I would amend the Joint Committee proposal along the following lines: 1. The Ways and Means Committee would report to the House Budget Committee before March 1 a list of any proposed tax legislation reducing revenues in the fiscal year under consideration.

2. This list, if approved by the Budget Committee, would appear in the first Concurrent Resolution as the amount of new tax expenditures allocated to the Ways and Means Committee for the coming fiscal year.

3. To allow members to equate tax expenditures with direct expenditures, this list would be broken down in the Concurrent Resolution into budget categories. This method is currently used by Treasury and the Ways and Means Committee in their annual report on tax expenditures and should present no problems. 4. The Congress would then review these new tax expenditures, just as they review new direct expenditures. The proposals would be subject to amendment, just like the rest of the Concurrent Resolution.

5. Once the Concurrent Resolution is passed, any bill providing for a tax expenditure must be accompanied by a statement from the Legislative Budget Director that the revenue foregone is the same as, or less or more than, the amount provided in the Concurrent Resolution.

6. The House may desire to exceed the "targets" for tax expenditures set in the Resolution and could do so. However, such excesses would have to be reconciled with other expenditudes in the second Concurrent Resolution unless Congress votes to increase the size of the desirable deficit.

This necessary and logical addition to the budget reform proposal should provide more thorough Congressional control over the budget and a more accurate assessment of overall spending priorities. Suggested language to accomplish this is contained in the Congressional Record citation above.

I applaud the sense of urgency which informs the Rules Committee deliberations on budget control. Let us move ahead carefully and speedily.

Mr. MARTIN. I have here Mr. Cederberg's statement, Mr. Chairman, and he asked that I ask unanimous consent to place it in the record. The CHAIRMAN. Without objection, it is so ordered. [The statement referred to follows:]

STATEMENT OF HON. ELFORD A. CEDERBERG, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN

Mr. Chairman, and Members of the Committee, I am grateful for the opportunity to present my views on H.R. 7130, the Budget Control Act of 1973. The fact that such complex legislation could even be drafted and introduced in a period of four months is a credit to the Members and staff of the Joint Committee, and to the outstanding leadership of Al Ullman and Jamie Whitten.

I support the budget control concepts embodied in H.R. 7130, particularly the Joint Committee's "rule of consistency", which requires that any proposal which would increase a limitation or target must also designate the source of financing: additional taxes, increased borrowing, or a reduction in other programs. This rule is consistent with the Joint Committee's general objective of defining procedures which would ensure that each spending action by the Congress also include—immediately, deliberately, and specifically-any necessary adjustment by the Congress in other priorities, and in budget totals for expenditures, revenue, and debt. This objective, and the corollary rule of consistency, are the most critical features of the Joint Committee's proposals, and they must be retained. I likewise support the recommendation of the Joint Committee for a modest Joint Staff for the budget committees which would be established in the House and in the Senate. Congress cannot and should not duplicate the staff or the process which produces the executive budget.

These objectives deserve the support of every Member of Congress.
The CHAIRMAN. Congressman Rees?

STATEMENT OF HON. THOMAS M. REES, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. REES. Members of the committee: I don't have a written statement, but I wanted to testify because I am very much interested in

H.R. 7130, especially those provisions dealing with the Joint Budget Committee.

My interest goes back to my service in the California Legislature which had a joint budget committee. We also had an office of the legislative analyst, the equivalent to the staff of the Legislative Budget Director which is established on page 39 of the bill.

When I was in the legislature, both in the State assembly and in the State senate, I was on both the taxation and the appropriation committees; and for most of the years that I was in the legislature I was a member of the joint budget committee. I also worked with the joint staff here when they were preparing this bill and gave them quite a bit of material concerning my own California experience.

I think it is absolutely necessary that we do have a joint budget committee.

In a State, of course, the situation is different because local jurisdictions have to have a balanced budget at the beginning of the fiscal year since they don't print their money or raise their debt ceiling the way we do.

In California the legislative analyst usually came out with a very comprehensive report of 600 or 700 pages about 2 or 3 weeks after the Governor submitted his budget.

The report of the legislative analyst was divided into several parts. One was a general overview of the State fiscal problems, a projection of tax revenues, a discussion of what the overall Governor's budget would mean, and any recommendations about new taxes or overall budget cuts.

The second part, which was the largest part of the report, then considered each and every department of State government, analyzed the budget of each agency, and made specific recommendations. Most of the recommendations were for cuts, but in some cases recommendations were made for increases.

This report was a book that all of us on the appropriations committee carried with us when we went to committee hearings. At our hearings on the budget we had present the legislative analyst-who represented our viewpoint in the broad sense, not the narrow sense-a member of the finance department of the State government, and then someone from the affected agency. We found that the legislative analyst's report served the purpose of advising us, he was the devil's advocate. We didn't have to agree with his report. We didn't have to agree with his recommendations. But in a way, the report of the legislative analyst was a rebuttable presumption. If he cut a program I liked, I would have to come up with enough good reasons to persuade my fellow Senators to perhaps increase the budget.

The legislative analyst's office was run by a joint committee on the budget which consisted of members of both the State assembly and the State senate. It was a bipartisan committee. The head of the legislative analyst's office, Allen Post, has survived through the administrations of a half a dozen Governors, from liberal to conservative. He has been damned by legislators, he has been damned by the Governor, every Governor, because they don't agree with him on his recommendations. But his integrity is such that no one has ever tried to get rid of him or adversely affect his department. This is what I think we need here.

I think one good parallel would be Larry Woodworth and the Joint Committee on Internal Revenue Taxation. I have never seen this committee act in any way as a partisan committee. Mr. Woodworth, I think, has the kind of reputation and integrity which is unmatched in Washington today.

I worked closely with Allen Post in California because I was very much interested in overall budgetary problems. I think that if we could establish this type of agency here it would be very good for our branch. Again, it would be a joint committee; it would service both the Senate and the House. It would also be responsible for the fiscal notice on any legislation which would appropriate money and would advise how much money is appropriated, how much something would cost.

In fact, we had an automatic procedure whereby any bill that had any impact at all on the budget of the State of California would automatically be referred from the policy committee to the appropriations committee. But by rule there had to be a fiscal note, a small report, attached to every bill which had any effect on the revenues in the State of California; this note analyzed what effect the bill would have, not just for the current fiscal year, but down the line.

This, of course, was of great help to a lot of us who preferred to have a balanced budget in the State of California.

I was rather disappointed when I came to Congress and discovered that there was really no overview of the budget, that the Senate had its version and the House had its version, and there was no staff concept of trying to pull the overall budget together. I was appalled to see that the budget was considered in driblets, and in some cases we didn't pass the final budget until 6 months after the fiscal year had started.

I think this is very wasteful. I am a businessman by profession, and I am used to projecting my business 1 or 2 years ahead. I can see where it is difficult under the present process to try to project the business of the Government in the United States.

The State budget in California was presented as one big package. We didn't come up with separate departmental recommendations. The subcommittee is backed by the full committee and when the full committee had reported the budget, it was debated in a 3- or 4-day period on the floor and had to be passed by the 30th of June. We didn't have any continuing resolution.

The legislative analyst's recommendations, though, were only recommendations, and nothing was binding. We could overturn the recommendations.

As I said, it was a presumption that we had to overcome.

The legislative analyst had a large staff, I would say about 60 or 70 members, all professionals. Every one of them was a professional. We couldn't get a political type on that staff if we stood on our heads. These professionals were assigned in teams to each department. I would say the budget for the State of California for the last fiscal year was $9.7 billion, so you can see for a State it is a rather large budget. The CHAIRMAN. Is California the only State that has this system? Mr. REES. Other States might be developing this system, Mr. Chairman, but I think California has the best-developed one. It was estab

lished during Governor Warren's administration right after World War II, so it has about 25 years of experience.

The analysts who work with the legislative analyst were assigned to a department. Let's say one was assigned to the department of motor vehicles. During the whole process of developing the budget for the department of motor vehicles this legislative analyst would be working along with the fiscal officers of the department of motor vehicles, so there would be a great deal of input from the legislative analyst's office into the budget even before the Governor approved that budget.

I found as chairman of the subcommittee that dealt with capital outlay

Mr. ANDERSON. Will you yield for a question because I really don't quite understand?

Mr. REES. Yes.

Mr. ANDERSON. Are you suggesting that this legislative analyst was in effect serving two masters?

Mr. REES. No.

Mr. ANDERSON. I thought you just said that even before the Governor submitted his budget to the legislature that this analyst would be making recommendations to the executive branch?

Mr. REES. The analyst would be engaged in an ongoing discussion with the budget officers of, for example, the department of motor vehicles. If the budget officer wanted to say, "I am not going to show you any of my cards until the budget goes all the way through the department of finance and is approved by the Governor for submission to the legislature," he could say that. But it was found over a period of time that sometimes the potential problems down the line could be worked out by some informal consultation between the legislative analyst and the department. But it was strictly up to the department and the budget officers of that department whether they would do it this way.

The capital outlay budget I dealt with always came last because of a lot of discussions of the various construction projects. I found that by the time the final capital outlay budget recommendations came to my subcommittee they had been pretty well worked out between the legislative analyst's office and the Governor's office.

So this staff work was going on at all times. If the department of motor vehicles, for example, disagreed with the legislative analyst and his representatives to that department, it could say, "We disagree. We will fight it out before the legislature."

I am trying to show you that there was an ongoing relationship between the office and the State. It wasn't a situation where the analvsts were sitting 5 miles away and would pounce on the Governor's budget once it came in. There was a continual working relationship going on 12 months a year.

After analyzing this bill that you have before you. I have several recommendations. What I will do is just leaf through the bill because I have marked it up. In the section calling for the Committee of the Budget and its 21 members, I feel there is too much emphasis placed on the Committee on Ways and Means, because I would say 80 to 90 percent of the work of this new committee would involve dealing

with the budget, the expenditures of the Federal Government, and that only about 10 to 20 percent would actually involve the problem of taxation.

Mr. QUILLEN. Will the gentleman yield?

Mr. REES. Yes.

Mr. QUILLEN. I understand the bill provides that new moneys are required to balance the budget, and the Ways and Means Committee would have to make an appropriate recommendation and therefore they are involved.

Mr. REES. I said that the Ways and Means Committee would be involved, but the great majority of the work is done by those whose outlook would be for Appropriations. When you compare the two, it is rather difficult. When you are talking about a $265 billion budget and analyzing it, there is a lot more work than in say, trying to project where you might raise the new taxes.

So my recommendation would be that 7 members be appointed from Appropriations, 3 from the Committee on Ways and Means, and 11 members be appointed at large from other committees, again emphasizing that most of the function here is a budget function, and analysis of the expenditures of the Government.

I would have them appointed by the Speaker, which would be the equivalent of what we do today, the Committee on Committees of each party makes its recommendations.

And the chairman of the Committee on the Budget, if he is a House. Member, would also be appointed by the Speaker of the House.

When we come to page 5-where the bill discusses rules of the House of Representatives, it says, "The establishment of an overall limitation."

All throughout this bill I have taken out the mandatory provision, so that when a joint resolution is passed, or finally approved, on May 1, it is merely a recommendation. It is not a mandatory ceiling. I think it could be a disaster to come in with a very tough bill that has not been tried before, come in with a mandatory ceiling, and then have a lot of problems between May 1 or whenever the final budget gets out.

I think that if your joint committee comes up with recommended ceilings, recommended levels of spending, recommended levels for each subcommittee of your Appropriations Committee, and then people want to increase this, the recommendation of the committee to a great extent will be heated because this is more or less a rebuttable presumption.

I think it would be very dangerous to have an absolute mandatory ceiling. I think the provision that when you go over this ceiling you have to come up with a predicted tax is rather ridiculous. I think it could jam the whole system and we might just blow the whole thing. Mr. MURPHY. What would happen to your rule of consistency which is one of the strong selling points of the Joint Committee study? Mr. REES. I did away with the rule on consistency.

Mr. MURPHY. I thank the gentleman.

Mr. REES. Someone said consistency is the opening of the small mind. If you come up with a recommendation that you have to come up with a tax when you come up with a new program, I think we could