National Aeronautics and Space Ad

ministration..........

1.9

Foreign assistance:

Military

Economic

Atomic Energy Commission__. All other--.

Total----

1.1 1.5 1.4 4.6

TABLE 3.—Major programs for which expenditures are relatively uncontrollable under existing law in 1964 (net of expenditures from prior year balances and permanent appropriations)

Veterans:

Compensation and pensions___. Readjustment benefits___

Billions

0.1

If we impose a debt ceiling which is unrealistically low in view of the appropriations which had been made in the past, what is the result? We force the Secretary of the Treasury into the use of a number of questionable debt management devices which not only may be bad policy for the country but also may actually in the long run have the effect of increasing Government expenditures. What are the actions that we could take?

Let me list them.

First. We could decrease the volume of Treasury bills outstanding by rolling over fewer of these bills as they come up for refunding. This will have the effect of decreasing the short-term interest rate. This, in turn, means that funds looking for short-term investments will flow abroad to obtain the higher interest rates available. As I have spelled out to you on previous occasions, this certainly would have an adverse effect upon our balance of payments.

Second. We could invest trust fund $3.9 receipts and issues already available in the market rather than in new special nonmarketable obligations which is the usual procedure. This would seriously disrupt the bond market since these purchases would be concentrated in longterm securities in order to obtain the interest rates necessary for the trust

funds.

Third. We could delay the investment of trust fund receipts. This would be a highly questionable practice since it forces the Secretary of the Treasury in effect to choose between his trusteeship for the funds and his more general stewardship for the financial affairs of the entire Government. In any event, this would deprive the trust funds of the interest income which they now receive and it would be necessary subsequently from the general funds to make up this loss of the trust funds.

Fourth. Another expedient would be to draw down the cash balance in the Treasury to a very low level concentrating this balance in deposits in a few large banks rather than spreading it large banks rather than spreading it among 11,578

commercial banks throughout the country. This could be expected to have a serious impact on the supply of credit in the areas in the country from which the accounts are withdrawn.

Fifth. We could have some of the Government corporations, such as FNMA, borrow directly from the public rather than through the Treasury, and thus with respect to a portion of the debt escape the statutory limitation. Bor

Seventh. We could delay the payment of contracts, Government salaries, benefits, grants to States, and so forth. In other words, as I suggested previously, we could just not pay our bills. This, of course, would represent a hardship to all of those involved and also seriously injure the confidence in the U.S. Govern

ment.

Eighth. If the debt ceiling reverts to the $285 billion level which it will this next December if this bill is not enacted, it would be necessary actually to retire trust fund obligations probably to the extent of $20 billion or more. This would

mean the loss of interest on these trust funds and place the present trusteeship arrangement under a cloud. Moreover, the interest lost to the trust funds as a result of such an action surely would have to be made up for out of general funds at a subsequent date.

What will be the consequences of not passing this bill? What would be the consequences if we get to the situation of having a debt limit of $285 billion? I can remember some years ago this very dark Friday in 1929 when the stock market crashed. I can also remember when the stock market broke a little over a year ago.

What would be the situation if the people of the United States suddenly awoke to the fact that the Federal Government was not in the business of paying its obligations; that payments due on every defense contract and every other Government contract would not be made because the Secretary of the Treasury did not have money coming in through taxes and had no authority to issue additional bonds? Let us think in terms of our responsibility, not only to ourselves and our own constituency at home, but also in terms of our responsibility as American citizens. Let us discharge that responsibility in a way that merits the confidence of those who have elected us.

Do you think they want us to bring chaos here in the United States? Do you feel that if you allow the ceiling to drop to $285 billion and nothing is done about it there will not be chaos? Do you think you are going to help solve the balance-of-payments problem if the Secretary of the Treasury suddenly has to discontinue the issuance of $2 billion of short-term bills each week? Where is that money going if it cannot be put in American securities? It is going abroad, is it not? All right: Do we want to make the imbalance of payments worse? Do we want to do that?

Do we want to create such economic uncertainty in this country that American business would not have any confidence in their investment of dollars that

they now have? I do not know what the result would be, but I want those of you who are willing to vote against an increase in the debt ceiling at this time, knowing as you do that it means that on November 30 it will drop to $285 billion, to figure out in your own mind how by that action do you serve the best interests of the American people?

Oh, you say, I am not responsible for this debt. No, many of you are not. It would have been a whole lot less if everybody in the Congress had voted, as some have voted, against this or that program. But the majority has spoken. The appropriations are a matter of fact and we are called upon to vote on this debt ceiling on the basis of the existing appropriations-not what we would have

preferred.

Now, let me ask you, my friends, who have opposed usurpation of legislative authority in the past by executive departments and the judiciary itself, do you want to put yourself in the position of encouraging the President of the United States to freeze funds and not spend what we have directed him to? Now, if we are going to do it, is it not fair that we give him the item veto which this Congress has never allowed any President of the United States? Maybe it would be well to have it but that is not the law today. So, what would you have him do when you give him a debt ceiling which is lower than the amount we have directed him to spend?

Mr. Chairman, if we want to set a debt ceiling on the basis of something less than what we have appropriated, let us not say to him, "We cannot do it, you do it."

Mr. Chairman, if we are not satisfied, let us go back to the authorizing committees and let us go back into the appropriation committee and take another look at those actions. But, for goodness sakes, let us not pass on to the executive department this right to determine what is to be spent and the sources from which we get our revenue.

Mr. Chairman, I do not want to go that road. I want us to permit these bills that are being created to be paid in an orderly manner. If you put too tight a pinch on the Secretary of the Treasury you are going to have a duplication of exactly what you had in 195758. I had the Secretary of the Treasury who occupied that seat then, within the last week, tell me that because he was in such a straitjacket with the ceiling, it cost the Federal Government many additional millions of dollars in the way of interest, in order to live within that ceiling. I am, of course, referring to the former very capable Secretary of the Treasury, Bob Anderson. We have recounted the details of this before.

Mr. Chairman, I do not believe that is the kind of economy we want to practice. I do not believe we want to pass on to some other branch of Government our authority to control the purse strings of our Nation.

Mr. Chairman, let us act in a responsible manner in the discharge of this constitutional authority which is reposed within us as Members of what I consider the greatest legislative body in the world.

Mr. JONES of Missouri. Mr. Chair- to Treasury borrowing if we want to save man, will the gentleman yield?

Mr. MILLS. I yield to the gentleman from Missouri.

Mr. JONES of Missouri. Mr. Chairman, the gentleman from Arkansas [Mr. MILLS] mentioned the psychological effects of this debt ceiling. Psychological effect on whom?

Mr. MILLS. On us; all of us. Would the gentleman from Missouri be in favor the gentleman from Missouri be in favor of taking it off? I would not.

money, because they are not going to borrow that money directly from the public as cheaply as they can get it from the Treasury.

Mr. PELLY. Would the gentleman also agree that we have agencies that can borrow from the Treasury, and without the specific approval of the Congress lend money out, such as the REA, for snow machines and for ski lifts, and that Congress has no authority over that spend

Mr. JONES of Missouri. That was ing at all? going to be my next question.

Mr. MILLS. I would not be in favor of taking it off. No; I think it does have a good psychological effect. It causes us to pause and look over our shoulder and perhaps become dissatisfied with what we have done in the past, and as a result of being dissatisfied with what we have done in the past, I think it will make us want to do better in the future.

Mr. JONES of Missouri. If the gentleman will yield further, the gentleman feels that by having a debt ceiling we are not going to spend or spend as much if we did not have a debt ceiling?

Mr. MILLS. I want to make my position perfectly clear.

Mr. JONES of Missouri. It is just a psychological effect, not a real effect? Mr. MILLS. The debt ceiling itself unless you fix it at a specific level and everyone agrees it will not be changed again-does not stop spending. That would be the situation we would be in on November 30 unless this bill passes. It is quite evident, whether you have one specific ceiling or another that this does not necessarily mean you are going to spend up to one ceiling or another. We demonstrated that in 1963. Actually we were told in 1963 that we needed a ceiling of $307 billion and we provided that because that was our best judgment. But the deficit was not $8 billion, it was $6 billion. As a result we could have gotten by with a lesser ceiling. But the gotten by with a lesser ceiling. But the ceiling itself did not bring about the reduction in the deficit.

Mr. JONES of Missouri. Can the gentleman fix or envision any particular amount that he feels we should adopt as a permanent debt ceiling?

Mr. MILLS. No, because I do not know what the Congress is going to appropriate in years in the future.

Mr. MILLS. We make what we call permanent appropriations. Those appropriations are for a time. They do not lapse at the end of the year. We make those kind of appropriations and the money is kept within the agency. If they are lending it out and it is paid back, the agencies may relend it. There are many agencies that enjoy these appropriations. This is one of the reasons why the figure of so-called uncontrolled expenditures is as high as it is. This is not just the REA, but a combination of various agencies.

Mr. COLLIER. Mr. Chairman, will the gentleman yield?

Mr. MILLS. I yield to the gentleman from Illinois.

Mr. COLLIER. I do not necessarily subscribe to the thought that we could establish a permanent debt ceiling. The gentleman in a reply to a query of the gentleman from Missouri said that we could not establish a permanent debt ceiling because we did not know what the Congress would appropriate.

Mr. MILLS. As I remember, he asked me what I thought a permanent ceiling should be and my answer was I could not tell him what I thought a permanent ceiling ought to be because I did not know what the appropriations of the Congress are going to be in the future, and I did not know what the revenues are going to be. At this particular time we could have a permanent debt ceiling of $315 billion and we would know that we could live this year within that ceiling. In fact we would not need it for all of the year. What would happen next year I do not know.

Mr. COLLIER. That is true, but if we did establish a limit on the debt ceiling for any given number of future years we might not know what Congress would intend to appropriate but we would cer

Mr. PELLY. Mr. Chairman, will the tainly know what Congress could not gentleman yield?

Mr. MILLS. I yield to the gentleman from Washington.

Mr. PELLY. Will the gentleman agree with me that there is something more than psychology about a debt ceiling? In other words, we have $20 billion of authority in various agencies of Government to borrow. The ceiling that existed has prevented agencies of Government from exercising that authority to borrow from the Treasury, which the Congress has granted in past years.

Mr. MILLS. I do not know that the ceiling has had any effect in this area. If the ceiling is too tight then you are going to have more and more of spending and borrowing by the back-door approach. I think we can all agree on that. The ceiling must be high enough to accommodate these agencies having access

spend.

Mr. MILLS. It would have that effect if we were sure we all stuck to it, and future Congresses would abide by it, but I am not sure that is the responsible thing to do.

Mr. DORN. Mr. Chairman, will the gentleman yield?

Mr. MILLS. I yield to the gentleman from South Carolina.

Mr. DORN. I should like to know if the distinguished chairman of the Committee on Ways and Means, who we all love and respect, would care to comment on the statement of the gentleman from Texas during debate on the rule that we have already paid $32 billion of this debt.

Mr. MILLS. I do not want to get into an argument with my friend from Texas, who is chairman of the Committee on Banking and Currency. However, I have

always considered the matter in a slightly different way from that which he has. It is true that on certain occasions the Federal Reserve may hold as much as $30 billion or more of Federal securities and it may be that they buy those securities through money that is printed. As I see the question we get back to the issue then of taking from the Federal Reserve the authority to regulate the supply of the supply of money. We would be doing it directly through the Treasury. People do classify such action in terms I will not use, but I would think if that is to be done it should be done within the gentleman's own committee through amendment of the Federal Reserve Act rather than to try to do it through amendment of the Liberty Loan Act, which is the legislation that the committee has before it at this time. I do not know whether the Federal Reserve ought to come to Congress for appropriations or not. If it should is a matter for the gentleman's committee to decide. I do not want to get into that. Mr. PUCINSKI. Mr. Chairman, will the gentleman yield?

Mr. MILLS. I yield to the gentleman from Illinois.

Mr. PUCINSKI. When the tax cut bill was here in the House the gentleman made a very impressive speech talking about reductions in expenditures. I think the Congress has done reasonably well in carrying out the chairman's ideas, since that speech. Do I understand the increase we are now discussing is to take care of previous needs?

Mr. MILLS. Absolutely, the gentleman is right; much of the spending in 1964 is attributable to prove appropriations.

Mr. Chairman, I urge passage of H.R. 8969 in the form in which it was reported.

Mr. BYRNES of Wisconsin. Mr. Chairman, I yield 15 minutes to the gentleman from Missouri [Mr. CURTIS]. Mr. CURTIS. Mr. Chairman, I would first like to get back to reality and away from the dire consequences the chairman has suggested if this House in its wisdom were to vote down this request to increase the debt ceiling. Of course these dire consequences forecast by the chairman would not result unless the administration desired them. The administration would be back here immediately, as indeed they should be, with the figures necessary for us to figure out just what the expenditures level for fiscal 1964 should be in light of our revenues. The administration presently bases this request for $315 billion on an expenditure level of $97.8 billion, which incidentally is $1 billion less than the figure they gave us this January of $98.8 billion. But note the freedom with which the executive branch, can change this figure without any reference to the Congress, from $98.8 to $97.8 billion.

The chairman of our committee has moved this debate forward by pointing out, which is very true, that the request for $108 billion that the administration made in its budget for fiscal year 1964 for new obligational authority is not planned to be spent in fiscal year 1964. About 40 to 50 percent will be spent in fiscal year 1964 and the balance of this

Now the question immediately comes to mind, under this legislative appropriation process, when this fiscal year began on July 1, what was the carryover authorization unspent from previous appropriation bills? It was carried at $87.2 billion in the budget of January of this year. That was the carryover. The expenditure rate for fiscal year 1963 declined from $94.3 billion to $92.6 billion, I am happy to report because we did use a debt ceiling, I might say as a device to control expenditure levels. So there is a carryover of another $1.7 billion. This adds up to an $89 billion carryover.

If the Congress gave the President the $108 billion that he is requesting, and I hope that the gentleman from Missouri, Chairman CANNON, is correct and that it will only be $1012 billion-but if it were $108 billion, there would be $108 billion plus $89 billion-$197 billion-of available spending authority from which the President can spend in the fiscal year 1964. It is only the President who sets the rate of that expenditure. Although these expenditure these expenditure authorizations are related to legislation to some degree, the rate of expenditure is largely in the hands of the executive. And rightly so in my judgment. After we have appropriated, some programs, because of a change in circumstances, require either speeding up or slowing down the rate of spending. Maybe a new technique in military science has been developed so that we can actually spend intelligently and contract intelligently in a period of 2 years instead of 4 years. Then there is a speed up. On the other hand, perhaps, something has become obsolete or there is no longer reason to spend. Every President of the United States-Eisenhower, Truman as well as President Kennedy-has frozen funds, and because of these factors they have accelerated programs or decelerated programs. In the budget and accounting act, we require the President each January not only to give us his budget for the coming fiscal year beginning on July 1 of that calendar year, but a reestimate of what his expenditure rate is going to be for the fiscal year we are just concluding-the final 6 months until July 1. The spending rates may vary. As the result of our action on the previous debt ceiling bills, where we did not give the President what he asked for, the effect was a saving in the debt, as for example, when the President authorized an increase in the $305 billion debt ceiling back in March and in the wisdom of the Committee on Ways and Means, we did not grant to him that authority.

Mr. Chairman, for the first time since I have been following these figures, we saw an April estimate of expenditures for that year below what it had been in January-yes. Before that, all the other estimates had been increases. The debt ceiling bill that comes up here periodically is not just an exercise any more nor is it just psychological. This debt ceiling legislation actually has become a legislative device where the Congress has an opportunity to exercise

I must disagree with the chairman of the Committee on Ways and Means when he talks about this giving away authority to the President that the Congress has over expenditures. Quite to the contrary, it is permitting the Congress for the first time to interject its viewpoint and its judgment on expenditure levels in a given fiscal year, what the expenditure level should be from this pool of $197 billion in relation to our anticipated revenues. The Committee on Ways and Means is in the business of trying to figure out what our revenue from taxes will be and we have to adjust those figures periodically every 3 months or every 6 months. Likewise, I think in this budget process, it is important to relate expenditure levels-the utilization of this authority to spend which the Congress has granted to these revenue estimates. Of course, the ultimate and basic control-how full you fill this pool of expenditure authority is the appropriation process. The rate of flow out of this pool which must be related to revenues is the budgetary process. Should the pool be filled to $197 billion or should it be cut back to $180 billion? Indeed, I suggest that it probably should be cut back to $180 billion, through the appropriation process. But the rate of flow out of the pool for a given year should relate to our revenues. Up until the past 2 years, when we developed this debt ceiling technique, Congress has never developed any mechanism nor any technique for exercising its judgment on the expenditure levels for specific fiscal years.

Now, the point is this, as I see it: The President said in January that this expenditure level for fiscal year 1964 was going to be $98.8 billion. In his testimony before the Committee on Ways and Means just a week ago the Secretary of the Treasury said the administration has revised those expenditure figures to a $97.8 billion figure.

I asked the Secretary of the Treasury this question and I ask this question on the floor: What has happened to the expenditure level of fiscal year 1964, which began on July 1 of this year, as a result of these continuing resolutions on appropriations? Those resolutions are cast in the words that the expenditure level must remain at the level of 1963. Right? We heard the chairman of the Committee on Appropriations, the gentleman from Missouri [Mr. CANNON] make that remark. I interrogated him a bit on the floor and asked what does that mean. Does it mean the executive departments and agencies cannot put on additional employees? Well, that is what thought it meant. According to the testimony before the Ways and Means Committee that is not what the executive department thinks these continuing resolutions mean. We should get into this in the Congress and clarify this matter.

he

It is certainly true that for 6 months now-July, August, September, October, and now November and probably December-for 6 months now the bulk of

Federal expenditures under these continuing resolutions should be at the level of fiscal year 1963, which is $92.6 billion and not $97.8 billion.

On page 39 of the hearings is the question I directed to the Director of the Budget. I asked him, Well, what about these continuing resolutions? How has that affected your estimated expenditure level of $97.8 billion? Read what he said. He did not have the figures. He said, "I will supply them for the RECORD.' I then asked him to supply for the RECORD what this effect would be. Read what has been supplied in the RECORD. They still do not have the figures or, at least, they say they have not. I guess we should take their word, although I can say this: If the Bureau of the Budget wanted to get those figures and send them in, it could so do. However, the final sentence of this prepared statement inserted in the hearings afterward says:

However, in response to the request the Bureau of the Budget is undertaking a special study of the matter to see what information can be obtained and will submit a report to the committee as soon as the results are available.

This report should show that the expenditure levels for the 4 months of fiscal 1964 which have already passed, and the fifth month that we are now going into, were closer to the $92.6 billion level of 1963, which they are supposed to relate to, than they are to the $97.8 billion which is the basis for this request of $315 billion. This is the reason why the Republicans do not have available an alternative figure for the consideration of the House. It is the basic reason why we do not have available for the consideration of the House a motion to recommit, saying "No. We should not have $315 billion, but we think what they can justify is $313 billion or $312 billion or $310 billion," because the data has not been given to us by the executive department. That data should be available.

If we vote down this bill now-and I hope we do you can bet your bottom dollar that the dire consequences forecast by the chairman of the Ways and Means Committee would not occur. The administration will be back in saying, "Gentlemen, here are our figures. Yes. You are right. We only need to spend $94 or $95 billion"-and I suspect $94 billion is about right-"We do not need $97.8 billion." So we could cut $4 billion at least off of this $315 billion.

What is the reason for talking about differences like $3 or $4 billion? Because it is exactly that which will require the executive department to cut the expenditure rate for fiscal 1964 down to these levels. Instead of financing $9 billion additional bonds, with the economic consequences of going to the marketplace, to market these bonds or selling these bonds through the Federal Reserve System and creating more money based upon them, we would have to market only $5 billion. The difference in marketing $5 billion, rather than $9 billion that the Secretary of the Treasury has told us we are going to have to market, would be the consequence of voting down this bill. I think it is important. I might say this: If we were

able to hold the expenditure level to $95 billion-I would say $94 billion-for this fiscal year and $95 billion for the fiscal year 1965 instead of about $105 billion, which I think the President has in mind, then indeed I could stand before you and say, Yes, we can have the tax cut; because I can then see the economic benefits which would result from the tax cut in increased revenues. in increased revenues. The result of freeing up the private economy might give us a balanced budget at the end of fiscal 1965. That is why this is significant and why it does relate to the tax bill.

I was just looking to see if our chairman was here; I do not see him. But I must make some remarks on one of the statements that he made. He talked about the fact that the Treasury Departabout the fact that the Treasury Department had said that there would be a $9 billion deficit and that he, as chairman billion deficit and that he, as chairman of the Committee on Ways and Means, felt that that deficit would be more like $7 billion. Here is the point specifically. I hope the chairman is right, that it is $7 billion. But the request for $315 billion by the Secretary is based on an assumption of a $9 billion deficit.

If the chairman of the Committee on Ways and Means is correct and it is $7 billion-and I would like to think that it will be $7 billion-then we can exercise this kind of control through a debt ceiling lower than $315 billion. The point is, of course, that the Secretary of the Treasury has said that he can get by with a $315 billion debt ceiling in the face of a $9 billion deficit. If the chairman of the Committee on Ways and Means is correct and the deficit is $7 billion we could get by with a $313 billion debt ceiling.

Mr. BYRNES of Wisconsin. Mr. Chairman, will the gentleman yield? Mr. CURTIS. I yield to the gentle

Mr. BYRNES of Wisconsin. That covers the point I wanted the gentleman to mention. The chairman, and their majority, even in their report, talk about this as though the deficit for the fiscal year 1964 will be about $7 billion. If that is the case, the figure of $315 billion in this bill is automatically $2 billion in excess of what they need.

Mr. CURTIS. Yes. Let me point this up further. The recommendations on this side of the aisle-and this is not to prove anything except that our judgto prove anything except that our judgment was not in error-when we recommended cutting it back $2 billion in one motion to recommit-actually as we look at it in retrospect we find that we could have lived within these lower figures.

Mr. JONES of Missouri. Mr. Chairman, will the gentleman yield? Mr. CURTIS. I yield.

Mr. JONES of Missouri. Mr. Chairman, as I understand, the gentleman says that he feels it would be a mistake to go back and leave this at $285 billion, to go back and leave this at $285 billion, but he thinks by recommitting it and reanalyzing it, we would come to some figure between $285 billion and $306 billion, is that correct?

Mr. CURTIS. Three hundred and fifteen billion dollars that they have got.

Mr. JONES of Missouri. The $309 billion, plus $6 billion?

Mr. CURTIS. This is a temporary on a temporary.

Mr. JONES of Missouri. Let us put it this way: In other words, you are for increasing the debt limit from $285 billion?

Mr. CURTIS. I would say this to the gentleman, that this is necessary. The debt is actually around $308 billion. This is already there.

Mr. JONES of Missouri. That is what I am trying to get at.

Mr. CURTIS. Yes; that is right. Mr. JONES of Missouri. If the gentleman will yield further, in other words, it is necessary that we do increase it?

Mr. CURTIS. Oh, there is no question about that. As a matter of fact we already have the bonds out.

Mr. BYRNES of Wisconsin. Mr. Chairman, will the gentleman yield?

Mr. CURTIS. I yield to the gentleman from Wisconsin.

Mr. BYRNES of Wisconsin. We tried in our motion to recommit, that was made last June when we were considering the debt limit at that time to bring the permanent debt ceiling up to a more responsible figure and at that time we said that the $285 billion was meaningless, and we acknowledged it. We suggested at that time that the permanent ceiling come up to $305 billion. Mr. CURTIS. Yes.

Mr. JONES of Missouri. Mr. Chairman, if the gentleman will yield further the thing that confuses me, and I think it confuses a lot of people, is this: Your committee has been discussing this for a long time, and you have all the figures, as I understand it, but you are making a straight motion to recommit rather than with instructions to bring it back with a certain amount. That is the thing which I cannot understand.

Mr. CURTIS. That is the thing I was trying to explain to the gentleman, because the Treasury Department did not give us these figures which we need about which we are talking. I asked them to supply for the record a detailed statement of what is the impact of the continuing resolutions which we are still operating under on the estimated level of expenditures in the budget for this year, for fiscal year 1964, at the level of fiscal year 1963, which is $92.6 billion. What is that effect on the $97.8 billion projected expenditure level of the administration? Our point is that we know very well that it must have been cut some, but we need to know those figures. The Treasury Department can give them to us, and if they give us these figures we can advise the House as to whether it should be $310 billion, $311 billion, or $312 billion.

Mr. JONES of Missouri. If the gentleman will yield further, I have the greatest respect for the gentleman speaking and for the other Members on the minority side. Does the gentleman mean to tell me you have asked for these figures and the Treasury Department will not give them to you?

Mr. CURTIS. See page 39 of the hearings. Do not take my word for it. Read it. I was shocked to see, even after I left the record open and said to the Director of the Budget that if you do not

have your figures yet supply them for the record. However, in response to the request they state that the Bureau of the Budget is undertaking a special study of the matter to see what information can be obtained and will submit a report to the committee as soon as the results are available. That was what was told us in the information which was furnished later for the record.

In other words, they came to us, before us, without having done their homework.

Mr. JONES of Missouri. Did he indicate when the results would be available?

Mr. CURTIS. No, sir. But let me say this. The figures are available, and if they do come back with them, which I suggested would occur, of course the expenditure levels for 1964 would show up to be lower.

The CHAIRMAN. The time of the gentleman from Missouri has again expired.

Mr. BYRNES of Wisconsin. Mr. Chairman, I yield the gentleman 5 additional minutes.

Mr. CURTIS. What I am saying is that the dire consequences, of course, will not occur. We do not want it. No We do not want it. No one wants that. What would happen is that the executive department would come back with these figures that they should have had in the first place. Incidentally, the Committee on Ways and Means learned of the figure of $315 billion just the very day that the Treasury Department came before us to testify. This was just a week ago. They have had these figures, some of them at least, the figures which they did not give to the committee.

So, a part of our problem is lack of information and the kind of information which is important in order to figure out just where the debt ceiling should be.

I might say to the chairman of the Committee on Ways and Means, the gentleman from Arkansas [Mr. MILLS], I hope the gentleman is right about the $7 billion deficit rather than $9 billion. The point I was talking about earlier when the chairman of the full committee had stepped off the floor is that the $315 billion is predicated upon the $9 billion. Mr. MILLS. Mr. Chairman, will the gentleman yield?

same figures, and the Treasury Department agrees, because they have agreed to the $315 billion

Mr. MILLS. If the gentleman will yield further, as we point out in the report, on page 6, the gentleman from Missouri will recall that the Secretary of the Treasury wanted $311 billion and we provided $309 billion.

Mr. CURTIS. I do not know what he might have had in mind. Of course, he is going to bargain, and I believe the Congress should get into this bargaining too. Sure, he cut from $11 to $9 billion, and we have come in with a $315 billion ceiling. I may say to the Chairman if we could use a $7 billion deficit instead of $9 billion the Treasury is using, it could be $313 billion.

Mr. MILLS. Whether the deficit is $9 or $7 billion at the end of the year, that is when the requirement for $315 billion would exist, as the gentleman knows. It is in the table in the RECORD.

Mr. CURTIS. The gentleman must realize this is predicated on an expenditure level of $97.8 billion. I am thinking with the expenditure level less it, should be and can be less, and the Congress should exercise its judgment over rate of expenditures. If it is less than the $313 billion is right, but the Treasury agreed on the $315 billion.

Mr. BYRNES of Wisconsin. Mr. Chairman, will the gentleman yield?

Mr. CURTIS. I yield to the gentleman from Wisconsin.

Mr. BYRNES of Wisconsin. Let us get the $309 billion straight. The only way you can tell what your deficit picture is in a year's time is to take your debt on June 30 of one year, subtract the cash on hand and you get your net situation. Then do the same thing the next June 30. Then do the same thing the next June 30. I think the chairman will agree the difference between those figures will give you the deficit that has been incurred; is that correct?

Mr. MILLS. That is correct.

Mr. BYRNES of Wisconsin. On June 30, 1963, we had a debt of $306 billion. 30, 1963, we had a debt of $306 billion. We had $11 billion in cash. So that the net situation was $295 billion as the net net situation was $295 billion as the net debt. Now, you add onto that $9 billion of additional deficits, what will your situation be then on June 30, 1964? It It will be a net debt of $304 billion. The will be a net debt of $304 billion. The chairman will also admit that what the Treasury has estimated in here is an $8

Mr. MILLS. No, it is not.

Mr. CURTIS. Yes, it is. The Treasury Department said they could live with it.

Mr. MILLS. If the gentleman will yield further, the $309 billion is the figure that is not predicated on a $9 billion deficit. That is predicated on a $7 billion deficit.

Mr. CURTIS. I do not happen to share the chairman's enthusiasm for his split of the $309 billion and the $6 billion on top of it. I regard this as the $315 billion debt ceiling. It is the $315 billion that the Treasury says they can live with. Yet, if there is a $7 billion deficit, as the gentleman suggests it might be, and I hope the gentleman is right, then it should be $313 billion. Based upon the

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figures are predicated on. You add that $5 billion to the $304 and you have $309 billion.

Mr. MILLS. The gentleman will recall a statement of the Secretary of the Treasury, at the end of the fiscal year on the basis of his projection with $7 billion of cash on hand, if that $7 bilbillion of cash on hand, if that $7 billion is added to the $304 billion-the Secretary said that before the committee-if you add that to the $304 billion you come to $311 billion. you come to $311 billion. He said he will have $7 billion on hand because we cannot retire more than a certain number of outstanding obligations. That will leave him with that much cash. So will leave him with that much cash. So that $7 billion is going to be there. So that $7 billion is going to be there. So if you take off that $309 billion you come if you take off that $309 billion you come out with a net debt of $302 billion which provides for a $7 billion deficit this year.

Mr. BYRNES of Wisconsin. I think we had better reexamine exactly what the Secretary did, and what the tables show as far as the cash balance that they used, what flexibility is needed and what the ultimate debt is.

Mr. CURTIS. The House is now listening to some of the matters and problems that go on in the consideration in the Ways and Means Committee. I happen to agree with the gentleman from Wisconsin [Mr. BYRNES] in his interpretation, but regardless of whether this is right or wrong, the fact remains that the debt ceiling requested is based upon the $97.8 billion expenditure level that the Treasury anticipates, and it comes back to what I have been trying to point out, that this level is what the Congress should exercise its judgment on, in light of our anticipated revenue and in light of the problems connected with marketing additional bonds. The fewer bonds we have to market the better the economic climate. I would also point out the fewer bonds we have to market the more a tax cut will be meaningful in helping the economy move forward.

I would like to develop one point, if I may, because there still in a way is a big loophole in this debt ceiling technique, and I think the attention of the House needs to be directed to it. It lies in one of the inadequacies of Federal budgeting and accounting procedures. Expenditures in the Federal accounting system is a single entry for what frequently should be a double entry. The entry should be, first, increased revenues, unrelated to expenditures, and second, increased true expenditures. For example, when the administration sells off Government assets, this does not go into the revenue side of the budget, it goes in to cut down the expenditure side of the budget. For example, in this year's budget there was, I forget the exact figures, but let us say a $6 billion request for new obligational authority to spend in agriculture, which was a decrease of $1 billion from the previous year. It looked like it was a decrease in expenditures. But that is single-entry bookkeeping. Actually there was an increase of about $1.5 billion in current expenditures in agriculture, but they have sold off $2.5 billion of Commodity Credit Corporation assets. So the single-entry process confuses the true picture.

When I was mentioning earlier in my remarks the fact that expenditures were cut as a result of the imposition of a lower debt ceiling than the administration desired earlier this year, to my regret it was not really a cut in current expenditures. The Government sold off about $1 billion more of assets than it had originally contemplated, and that is what the $1 billion in expenditure reduction really was.

marketable assets. On page 36 of the Frequently we have this kind of sale of committee hearing you will see the total of the assets we have available. It is a total of about $28 billion. These are not all marketable. There are only some of these that can be marketed.

But in a certain sense I happen to be perfectly at ease about this process of