tion from annual appropriation control
The proposal would abolish the policy
established in 1916—thirty-nine years
ago—requiring slales to match federal
funds for roads.
The scheme was predicated upon
pledging federally imposed gasoline
taxes over a period of thirty years for
the repayment of thc bonds and the
The Comptroller General of the United
States, Mr. Joseph Campbell, recentl)
appointed b) Presidenl Eisenhower, said
of this proposal:
"We (The General Accounting Office)
feel that the proposed method of financing is objectionable because . . . the
borrowing woulel nol be included in the
public debt obligations of the I nileel
States. ... It is our opinion that the
government should not enter into financial arrangements which might have the
effect of obscuring financial facts of the
government's debl position. Comptroller General Campbell also questioned
the legality of the proposal.
We all wanl good roeuls. The people
ire- willing to pa) for good roads, but
il i- certainl) nol necessar) practically
to destro) the fiscal bookkeeping of our
country in order to finance <>ur roeul
These bonds would, ol course, be .1
general obligation of the government.
There is no banker in this country who
would bin bonds of such a eluinnn federal corporation without the guarantee
of the federal government.
Should the gasoline t;t\ be dedicated
thirty years in advance for the payment
of bomb issue-el to build roads, then, by
the same line of reasoning, other taxes
could be dedicated for other specific
purposes. II this were carried far enough
there woulel be no funds for the more
unglamoroiis but essentia] function-.
PROPOSED AID FOR SCHOOLS
The second of the three administration state-aid proposals involved about
$8 billion in direct appropriations and
contingent liabilities for payments,
grants, loans and guarantees to states fnr
school construction. The last bastion ol
-tales rights and individual libert) lies
in the education of our children.
Federal appropriations t" public
-chools followeel b\ the inevitable federal control will -Irikc a falal blow eil
the grass roots of our del :racy.
I do mil believe that there i- ei -t.it.
or locality in the Union thai cannol
provide lor lhe cost of its public school
system if there is the' will to iln bo.
FEDERAL HEALTH PROGRAM
It is impossible to estimate the cosl
of the President's third proposal, ll was
for a so-called federal health payment
program. If would be certain to cosl
millions of dollars annually and it could
easily be the beginning of socialized
NO SUCH THING AS A FEDERAL GRANT
ll is well for everyone to understand
that there is no such thing as a federal
grant. All of the money comes from citizens in lhe stales. The money goes In
W ashington and there it is subject to de-
ductions for federal administration. This
money then geies back te> the states less
deductions, and the federal government
tells us how to spend our own money.
Proposals have been advocated changing our budgetary system. The Secretary
of the Treasury has not approved these
proposals and I am certain he will not.
But there are two budgetary proposals
which recur with persistency, and I want
lo warn you of them.
First, there is the proposal for a
'cash budget. Those who advocate the
"cash" budget are suggesting that the
government pay its routine bills with savings of the citizens who have entrusted
protection of their old age and unemployment to tin- guardianship of the federal
government. 'These trust Funds were established from premiums paid by participants in Social Security, unemployment
insurance, bank deposit insurance programs, etc. \"t ei cent of these funds
belongs I" the government.
Second, some are advocating a "capital" budget which means that so-called
"capital" expenditures should not be
considered as current expenditures in
Those who advocate the so-called "capital" budget must start out wilh the fallacious assumption that llu- governmenl
is in business In make a profit on its citizens. To my knowledge the federal gov-
ernment has never made a bona fide
profit on any government operation.
Tlie\ must iissiiine thai debt contracted
b) a fe'.leral agency i- nol a debt of the
federal government and a burden on eill
of the taxpayers.
I am an old-lashioned person who be-
lievi's lhal a debl is a debt just a- much
in thc alomie age a- il was in lhe- horse
an.l bugg) elen-.
\ "capital budget must as-time theit
government manufacturing plants, such
as atomic energy installations, arc in
commercial production for a profit, eiml
that government stockpiles are long-time
investments tor profit instead of precau-
thins against emergencies when they
would hi' completely expendable with no
Likewise, il inii-t assume that the agriculture surplus program is primarily
I lung range investment deed instead of a
prop for annual farm income lei be- used
when needed on a year-by-year basis.
While lhe veislness and complexity of
ih.- Federal governmenl nf ihe I nited
Males necessarily makes budgeting difficult, the so-called "conventional budget
currently in use offers the best approach
to orderly financing with fullest disclosure.
What is needed for a better fiscal
system is fuller disclosure of federal ex-
penditures eunl responsibility for them
not less, as inevitably would be the case
with so-called "cash" and "capital
With full disclosure of the federal expenditure situation, the American people
then would have an opportunity to decide whether they wanted to recapture
e-eentrol and bring the rate of spending
into balance with the rate of taxing anil
thus reduce the tremendous federal debt
burden we are now hearing.
To capture control we must firsl re
eluee unexpended balances in appropriations already made and rescind those
which are nonessential. When we steirteel
this Fiscal year, unexpended balances in
appropriations alread) made totaled
aboul $100 billion, including $78 billion
in appropriations enacted in prior years,
eunl $20 billion in authority lo spend directly out of the public debt.
The situation is made even worse b)
the procedure under which Congress acts
on appropriation bills. Not only has Con-
gre-ss lee-i eonlrol eever the- annual rate
of expenditure, but once lhe President's
budgel is submitted in January, Congress-
never again sees it is a whole unit after
llie- appropriations arc enacted. The firsl
thing Congress does is to split the appropriation requests of the President into
a dozen or more bills. Then il proceeds
lo consider them separately over a period
eif six months or more. In lhe consideration of these bills attention is given onl)
to appropriations, and these may he
-pent over a period of years. An appropriation enacted in a year when revenue
is high may actually be spent in a year
when revenue is low. 'There is never an
opportunity in Congress, in action on appropriation bills, io consider them i"
terms of annual expenditures in view of
To correct such an intolerable situs
lion, along with 48 other Senators. I have
introduced Legislation providing for il
-ingle appropriation bill which would
set forth mil onl) requested appropriations for the fulure but also unexpended
balances available in prim appropriations. This resolution has three linn-
passed the Senate but has not yel been
acted on b\ the House.
It provides further thai Congress writ*
into the consolidated appropriation bill
limitations on expenditures in the ensuing year from each appropriation. An''
beyond this it provides theit in determining the expenditure Limitations, all proper consideration should be given thc an
ticipated revenue, the cash position
FACTS FORUM NEWS, September, 1955