through dealing with impoundments and what I concede and consider to be the more responsible approach by the Congress of having its own budget take into account the effect of spending and taxing on the economy generally.

I would like to ask you some specific questions about some sacrosanct areas. Does the Office of Management and Budget consider the statutory debt limit a useful tool?

Mr. Asн. Yes, sir.

Mr. BOLLING. You favor a statutory debt limit on a rigid basis, you favor a situation where the President must come to the Congress periodically and go through the process of asking for an increase in the debt limit to manage expenditures that are already for all practical purposes committed?

Mr. ASH. I haven't been here when that process has been going on, but as I have read about it, maybe it could be dealt with in a little more constructive way than it has been. As I read it, some of it is more pro forma than it is substantive. But I believe the substantive parts that are involved in establishing debt limits are ones that I would favor continuing.

Mr. BOLLING. I would commend it to your study because it seems to me that rather than being a useful management tool it is a pernicious fraud, speaking of frauds, because it doesn't have any real effect.

We constantly pretend that we are going to go back to, I forget the figure now-that we are going to go back to a permanent ceiling that we have which is without relationship to any reality. We have, for some polite reason, a temporary but very substantial increase that again has no meaning.

It seems to me if we are going to get to the goal that I think we must achieve, which is a responsible approach by the Congress to the whole problem of the budget, we are going to have to start being a little bit more realistic about some of the more obvious, not frauds exactly, but meaningless from a management point of view procedures that we go through on a rather regular basis.

I suspect it is more for political purposes than anything else. Mr. Asн. I had in mind when I said to separate the substantive from the pro forma, something of what you are here suggesting. The substantive need for a debt ceiling I think we would all agree with. Maybe we can deal with it in ways that have less of the pro forma posturing that is also a part of what goes on these days.

Mr. BOLLING. If it meant anything and controlled anything I think I might agree with you. The question is does it today mean anything? Mr. Asн. We certainly view it as meaning something. It is a law that we cannot violate. When that debt ceiling says that we shall incur debts no greater than a particular amount, I think we all feel obliged to live with that law.

Mr. BOLLING. I go back to my original question. Does it serve any useful management function? I think it is a matter that ought to be looked at very seriously.

I don't know how much time I have and I don't want to go beyond it because I expect to be here when it comes back around to me. I don't know whether you would agree with any of this but it seems to me that this whole confusion today, and again I don't want to play

the numbers game, is between the administration and the Congress as to who is responsible for the economic condition in which we find ourselves and the budgetary situation in which we find ourselves. I thing that it is a useless exercise although politically it is bound to be played a good deal. Would you agree that you repeat what has come from the administration frequently, which is the implied threat that unless we manage to restrain our spending to the level selected by the President this year, that we have only two alternatives?

I note that your words are more careful than many spokesmen of the administration. You speak only of a tax increase or more inflation. The implication from many is that the only alternative is a general tax increase or more inflation.

I wonder if you would agree that there could be a particular tax increase as opposed to a general tax increase that might provide substantial funds also.

Mr. Asн. Of course, the Congress, as you know, considers many particular tax increases and has the prerogative of determining what particular tax increases it should adopt. Of course, the President has his own rights to determine whether to find acceptable or veto any such bill the Congress would submit.

But the references that have been made to the necessity of increasing taxes if we are not to avoid inflation to cover increased expenditures have been put in proportion by relating them to the level that they would be if they were applied, say, to personal income taxes. A 15 percent surtax on personal income taxes would be a measure of the amount of tax increase necessary to cover what expenditure levels would be were not these restraints applied.

Obviously, it is up to the Congress and up to all the legislative and executive processes to determine what final package comes out.

Mr. BOLLING. What you are saying is that there is another way to get a tax increase other than a general across-the-board 15 percent increase.

Mr. Ash. If accomplished in the proper legislative way and subject to Presidential approval.

The CHAIRMAN. Mr. Anderson.

Mr. ANDERSON. You have placed us under some restraint in asking us not to be repetitious.

I do think, Mr. Ash, you have made an excellent statement and performed an excellent service in putting the whole impoundment question in a better perspective. I congratulate you on your statement.

I think, referring to the statement, on page 8, where you suggest "The fundamental aspect of controlling of the budget process is that we must judge each program in its relation to the total resources available," that you are getting to the heart of the problem that does plague the Congress today.

In that regard, I am the author of House Concurrent Resolution 165 on which I testified before this committee yesterday. I think I am privileged, at this point, to indicate that my friend and colleague on the committee, Senator Pepper, has joined me in sponsoring that legislation which seeks to put some restraints on impoundment but do it in the context of also mandating a complete and comprehensive reform of the budgetary process and also mandating the Congress to establish an enforceable spending ceiling.

If we can wrap this all up in one package, and I admit it is a tall order, but if my friends on the committee and elsewhere who say this is a constitutional crisis join me, I think we ought to react as if it is a crisis by moving more speedily than we sometimes are wont to do. Even conceding that to reform the budget process is a very tall order, I am suggesting in my resolution that we ought to do that and we ought to do it under a very definite time limit. We ought to, in the same legislation, impose an enforceable spending ceiling and then consider the subject of restraints on the Presidential impoundment power.

You have mentioned on page 3 of your statement that it is an old tradition and you cited specifically actions by Presidents Truman, Eisenhower, Kennedy, and Johnson. I was not here under the first two Presidents. I was under Kennedy and Johnson.

If I recall correctly, I spoke out against some of those impoundment actions. Therefore, if consistency is a virtue, and you sometimes wonder around here whether it is, I have to be a little bit consistent and say I am not overly happy about the necessity of a President impounding congressional appropriations. But I think in view of the inflationary threat, in view of the overall economic situation, there was some necessity for the President exerting some fiscal restraints.

I am not attacking him for doing that, but I would suggest that if we can do the other two things I have spoken of, then I would hope to put into proper language some restraints on presidential impounding power with the hope that the other steps that I have mentioned would perhaps obviate any future necessity for a President doing that, save under perhaps the apportionment procedures of the Anti-Deficiency Act.

I wonder if I can have your reaction to the approach I am trying to take in the resolution I referred to.

Mr. Asи. Yes, sir; I think the particular virtue of that approach is that it emphasizes the need for reform of the budgetary process in the first place, the authorizations and appropriations that give rise to the whole flow of expenditures that then ensues.

I think that is where the emphasis not only must be given, and you are giving it there, but that is where the job can be done and effectively done, and that is where, what we call today, the constitutional crisis will disappear. If that does the job, and I truly believe it does, and I think most of the Members of Congress could well join in that belief, then I see no need to go from there to any particular form of impoundment legislation. The job will have been done.

Then we would need to look at particular impoundment techniques that would be proposed. I would assume they may well have some of the same problems in themselves as this bill has, and I think they would not even be needed, given a good and effective reformation of the budget process. That is the instrument that I would propose.

I commend you for effecting that change of emphasis, a change of emphasis to the real problem, the one that I have identified and you have.

Mr. ANDERSON. Mr. Ash, of course you are a member of the executive branch and I am a member of the legislative branch. Perhaps it is more apparent to me than it is to someone in your situation that to recruit the kind of support that we need to get a bill through Congress

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we sometimes have to take into account the fact that there are people who are concerned about impoundment as being something that does affect the rights and prerogatives of the Congress.

I am not wholly dismissing those fears. As I say, when it involves a fundamental policy objective that has been laid down by the Congress, then I too, believe that there is some danger in permitting arbitrary executive action. I am not suggesting that that has happened under President Nixon. But I am thinking of this in terms of prospective legislation that would, of course, govern the future.

If I have 1 minute, Mr. Chairman, I have only one other question. Since you are here before us this morning, Mr. Ash, in your capacity of Director of the Budget, we very often hear this phrase about the President's budget and the requests that the President makes in the form of a budget that comes to us in January of each year. It almost sounds as if this is his entire program. Is it not a fact that if 70 percent, I believe that was the figure that you used, of the budget is uncontrollable, isn't it a fact, then, that there may be many budget requests in this overall budget, many programs that are included within that Presidential budget that he may oppose in fact, but they have been mandated by previous action of the Congress and, therefore, they are built into the budgetary framework.

So it really, in total, is not the President's budget.

Mr. Asн. Yes, sir. That is a very important observation in the context of this discussion. Over 70 percent, up to 75 percent this year, of the budget constitutes relatively uncontrollable items, that is, those that really have derived out of earlier years actions.

The level of discretionary spending, if you would call it that, is getting smaller and smaller year by year. So what a President is more and more submitting is merely the cumulative effect of all past decisions and to a great extent even of decisions that he himself had no part in.

Mr. ANDERSON. Thank you, Mr. Chairman.

The CHAIRMAN. Mr. Sisk.

Mr. SISK. Thank you, Mr. Chairman.

Mr. Ash, by what authority does the President impound funds in your judgment?

Mr. ASH. There are a number of authorities by which he does so. The first one starts with article II of the Constitution. Article II requires him to faithfully execute the laws.

Mr. SISK. I am familiar with that. So move ahead.

Mr. ASH. And the laws that he is faithfully executing deal with the Anti-Deficiency Act in particular, deal with the debt ceiling also, and in conformity with those laws he is taking those actions that are required of him.

Mr. SISK. Actually, then, what you are saying, as I understand it, and I am not trying to put words in your mouth, is that you are leaning on the Anti-Deficiency Act and the debt ceiling. Basically, as we all understand the Constitution, it requires the President to faithfully execute the laws of the land, correct?

Mr. Asн. Yes, sir.

Mr. SISK. I think, of course, this is where we may split the blanket to some considerable extent. I think that is the problem. I do not necessarily call it a constitutional crisis we are confronted with. I think

it is a question of whether the President in fact is living up to the Constitution.

I join with my friend Mr. Anderson in having criticized previous Presidents in connection with this kind of situation. However, I will say that in my opinion this President has gone much farther in this area. Let me ask you: Who, in your opinion, among the three branches of Government, actually makes policy under the Constitution? What is the policymaking body under the Constitution?

Does the President make policy or does the Congress make policy? Mr. Asн. There are many levels of policy, of course, and certainly the Congress is a major body in the process of making and developing policy. The President recommends a considerable amount of policy to the Congress which sometimes is adopted and which sometimes is not. The President also makes policy within the congressional legislation. So there are a number of different kinds, classes, and levels of policy that each part of the Government is responsible for.

Mr. SISK. I recognize that in the area of foreign concern and so on, the powers of the President are considerable under the Constitution. I am discussing basic domestic policy. As I read the Constitution the President can recommend, yes, but in the final analysis the Congress makes domestic policy under the Constitution and the President is to execute the policy.

Isn't that basically correct as you read the Constitution?

Mr. ASH. That is right.

Mr. SISK. Let me get to specifics. I think here is where very many of us are concerned. I recognize the powers of the President under the Anti-Deficiency Act, a law passed by the Congress and which, therefore, should be abided by.

I refer specifically to a number, in fact quite a large number, within the recent few weeks, going back to December-from shortly after the election-we found not only cutbacks in funds or impoundments of parts of funds, but we found the cancellation of programs.

This is where I find a real difficulty in seeing any authority under the Anti-Deficiency Act or under the provisions of the Constitution. In fact, I think the President is in violation of the requirement to faithfully execute the laws when he takes it on himself to literally cancel out a program in total.

Yet, in order to conform to the debt ceiling and in order to conform to the Anti-Deficiency Act, it may be necessary to cut back on a program. It may be necessary to cut back on several programs. But do you feel that the President is not taking over the basic powers of the Congress when he actually stops a program simply because he does not like the program or for whatever reasons he may have?

This is, I think, the gut issue that Congress is concerned about, Mr. Ash.

Mr. Asн. I don't believe the issue is whether he likes programs or not. The issue is that the President was confronted with the necessity of reducing the total amounts of outlays, a substantial amount from that level to which they were heading. In the process, he looked over all programs. In his judgment, and you may have questions about individual items, in viewing each program, he determined what he thought were the best programs to continue and to continue at different