lar that goes overseas further complicates our balance-of-payments problem. In order to encourage the dollars to be invested here instead of overseas, then, Treasury has had to attract this money by offering short-term obligations with a higher interest rate somewhat more nearly equaling the interest rate the investor could get if he sent his money overseas. Of course, a part of this increase in the interest on the debt has been because of the fact that the debt has been higher, but another part of the cost has been attributable to higher short-term rates in an effort to curb this dollar flow away from the United States.

Again, the debt is higher for the simple reason that even though our spending has been held consistently at a rate considerably below our appropriations, spending still has not been held as low as our income and that is the real reason we have a debt. This matter of balancing a budget in a business as big as the U.S. Government cannot possibly be accomplished overnight, as some people would like the American people to believe that it can be done.

This is a long range program and as long as we continue to appropriate more money than we take in, we are going to continue to have an unbalanced budget. This is so elementary that I am sure anyone can understand it. How else then, can we get a balanced budget except by reducing appropriations? Does anyone expect us to achieve a balanced budget by reneging on the obligations we have heretofore made? This appears to be the approach suggested by the minority in their separate views. Even if we were to hold down current appropriations to the level of our current income, which all of us recognize is not going to happen, we would still have to spend more money in this fiscal year and the next fiscal year than we take in for the simple reason that we have already charged at the store $87 billion worth of goods and services which we have not even taken delivery on yet, but when the the time comes for these packages to be delivered, they are going to be delivered c.o.d. and Uncle Sam is going to have to pay for them. Or as an alternative, say we do not have the money and renege.

We had some experience a few years ago in trying to operate within an unrealistic debt ceiling. Now, the minority seems to feel that if we clamp this ceiling down real tight, this will be the only way that Congress can effectively hold down spending. Well, will it?

In 1957 and 1958 we had an inadequate debt ceiling during the Eisenhower administration. The minority feels that while a tight ceiling might keep the Kennedy administration from spending money, they have to admit that it did not keep the Eisenhower administration from spending money. They engaged in a number of manipulations, such as borrowing money at higher interest rates on nonguaranteed obligations of FNMA outside of the debt limit, postponing payments to contractors and the like with the results that it cost the taxpayers at least $17 million more in interest than they would have had to pay if we had had an adequate ceiling at that time.

Was this sound debt management-and would it be today?

This $17 million extra burden on the taxpayers is bad enough, especially when it did not have to be spent, but the worst part of this type of operation is what it does to business, what it costs the Government by reason of the fact that you are simply going to have to pay more for goods and services if the contractor has reason to believe he is going to have to wait for a longer period of time for his money. This series of manipulations in 1957-58 has in some quarters at least been given as one of the principal reasons of the 1958 recession and if we cut the debt limit back to $285 billion, as the minority would have us do today, I shudder to think of the consequences. I certainly do not want to be a party to it.

The recession of 1958 and the consequent congressional action that was taken to try to ride over it resulted in a deficit of $12.4 billion in fiscal 1959. Of course, I do not say that all of this can be attributed to the fact that we did not have an adequate debt ceiling in 1957-58, but I do say that it did help set off a chain reaction and which is responsible for at least $12.4 billion of the debt we have today.

Does anyone seriously believe that the way to cut spending is to cut the debt limit back to $285 billion effective December 1? What would happen if this bill were recommitted? It would mean that we would have on December 1 a debt ceiling of only $285 billion. We would have outstanding on that date, if nothing was done in the meantime $308.8 billions of obligations-and to reduce this amount to $285 billion we would have to retire $23.8 billion worth of these obligations prior to December 1.

To retire $23.8 billion worth of these obligations we would have to substitute for them, nonguaranteed, outside the debt limit, securities which would cost us more money. Or we would have to call in some of the interest-bearing certificates that are now being held by the various trust funds for which the Government is the trustee, such as the social security funds, the railroad retirement fund or the civil service retirement fund and the like.

There are at this time some $57 billion in the various trust funds which are invested in these Government obligations. We could call $23.8 billion worth of them in and instead of paying interest as we are today in order to help the actuarial soundness of these funds, we would simply say to the various beneficiaries of the fund that you no longer have an interest-bearing certificate to show for this money-you now have a credit on the Treasury. Then when you come to the Treasury for your money, the Treasury would not have the cash with which to pay it, with the result that we would either have to at that time increase the debt ceiling to permit the Government to borrow the money to give them after having already done violence to the actuarial soundness of the various trust funds, or we would just have to say to the people who get the social security checks each month that we cannot pay you this month.

Does anyone here believe that this kind of manipulation is sound debt management? I urge upon you to look at this whole debt ceiling problem as it really is, and not as to the image that some people would like to create. How can a man who wants to hold down spending vote at this time to increase the debt limit? I say simply, how can he do otherwise if he believes in sound and economical debt management.

Mr. CURTIS. Mr. Chairman, would the gentleman yield?

Mr. HERLONG. I would be happy to yield to the gentleman from Missouri.

Mr. CURTIS. I think the analogy which the gentleman is using is the flaw in his argument. These actually have not been contracted for. Congress has simply given the Executive the authority to do the contracting, but the Executive has not spent it. That is the point. The Executive has control over whether he commits these funds with private concerns, and others. This is the key to the debate, as I see it.

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

Mr. HERLONG. I would be glad to yield to the gentleman from Arkansas.

Mr. MILLS. As I understand the gentleman from Florida, the gentleman is pointing to those orders which have been placed but on which delivery has not yet occurred, but for which there is a firm contract to make payment when delivery does occur; is that right?

Mr. HERLONG. Yes; including also the other moneys which have not all been obligated as far as contracts are concerned. I used the total $87 billion figure, which is the whole backlog of appropriated moneys that have not been spent.

Mr. CURTIS. If the gentleman will yield further, I agree with the gentleman from Arkansas. Of course, only $87 billion is under contract. But the total figure which the gentleman from Florida was using was the carryover balance.

Mr. HERLONG. I used the total carryover, a great portion of which has been obligated, as I am sure the gentle

Mr. CURTIS. That, I can go along with.

Mr. HERLONG. Mr. Chairman, it is being suggested that this bill should be recommitted to the committee. Then what happens? Then we have to come back again. Are they going to oppose again what would be suggested, or are they going to offer something else as an alternative at that time? I do not understand the thinking of those who suggest a recommittal, without suggesting an alternative.

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

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

Mr. COLLIER. I understood the gentleman to say earlier that we could not balance the budget overnight. Does the gentleman believe we can balance the fiscal 1965 budget and, if not, why not?

Mr. HERLONG. We cannot balance the budget overnight because we have a backlog of already appropriated money that is in excess of the revenues that are coming in. That is why we cannot do

it. That is an accomplished fact, and we cannot go back and turn history back again.

Mr. COLLIER. When the gentleman says "overnight" does the gentleman from Florida mean the next budget, since the current budget is already six months in operation?

Would he balance the fiscal 1965 budget?

Mr. HERLONG. If the next budget that is presented to the Congress shows requests for new appropriations no greater than the amount of revenue that is anticipated to come in, we would still have an unbalanced budget next year because the expenditures that have already been obligated over the past few years are going to be more than the amount we are going to appropriate for the next year.

Mr. COLLIER. I am sure the gentleman knows that in setting up the budget for the next fiscal year-I am not talking about the current fiscal yearyou merely have to take into consideration those obligations which are committed and submit a budget which could be balanced based on the anticipated revenue. The fact of the matter is if you get this tax reduction, which is a tax reduction on borrowed money, then you cannot possibly have a balanced budget.

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

Mr. HERLONG. I yield to the gentleman from Arkansas.

Mr. MILLS. The gentleman from Florida knows that the tax bill pasesd by the House is not the cause of any $7 or $9 billion deficit. The gentleman also knows that the tax bill which passed the House would reduce revenues in fiscal 1965 by approximately $3.5 billion; and in fiscal 1964 would reduce revenues by $1.8 billion; is that correct? Mr. HERLONG. That is correct. Mr. MILLS. What makes the deficit is not the passage of the tax bill, but the passage by the Congress of $101.5 billion of appropriations in the year 1963 and 1964, and if we do it in the year 1965 we will make a deficit again. That is what makes the budget deficit, and that is exactly why this bill is necessary.

Mr. COLLIER. That is not directly the reason, perhaps, but certainly no one can deny that a loss of revenue, as a result of enactment of the tax reduction bill if it becomes law, would contribute to a deficit. That is the thing we are talking about.

Mr. MILLS. If the deficit in 1964 is $9 billion, or $7 billion, as some of us think it may be, that is taking into consideration the effect upon revenues of the tax bill that passed the House, and it is far below what was initially suggested the deficit might be last January.

Mr. HERLONG. May I say to the gentleman we have many problems here in connection with the management of this debt. We have had experience in the past with an inadequate debt ceiling causing the manipulations that were engaged in, in 1958. There are those people who believe the recession of 1958 and the consequent congressional action that was taken to try to override that recession which resulted in a $12.4 billion

deficit in 1959 was at least partly attributable to the fact we had too tight a rein on the Secretary of the Treasury at that particular time.

when because there have been so many of these bills to increase the debt ceiling. But there is a law which provides the Treasury with a cushion of $5 bil

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

Mr. PELLY. Earlier in the gentleman's statement he referred to the fact that we have a permanent debt ceiling that is unrealistic. What I would like to know is, Why has the great Committee on Ways and Means continued to have a permanent debt ceiling that is not realistic and from time to time have to bring out these temporary debt ceiling recommendations?

Mr. HERLONG. I would like to see a more realistic ceiling myself, but this is a fact with which we are faced at this time.

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

Mr. HERLONG. I yield to the gentleman from Arkansas.

Mr. MILLS. As I recall, when we passed the debt ceiling bill last May, and then again 2 months later, on a temporary basis, we passed it by nine votes. I do not believe we would materially enhance the situation if we came forward today with a suggestion for a permanent debt ceiling of $315 or $320 billion.

Mr. HERLONG. I would like very much to see a more realistic debt ceiling but at the same time it is a fact with which we are faced at this time. Mr. JOHANSEN. Mr. Chairman, will the gentleman yield?

law?

Mr. MILLS. What law is the gentleman referring to-is he referring to cash balance?

Mr. GROSS. There is a law on the statute books which provides that the Government in time of financial stress and strain can issue $5 billion worth of Treasury certificates. It is the bill which the late and distinguished Senator Taft, of Ohio, called a "printing press money bill" when it passed the Congress.

Mr. MILLS. That is still an appropriate name for it in the opinion of many. That was enacted, as I recall, as the result of a Senate amendment to an agricultural bill in 1933 or 1934.

Mr. GROSS. It came a little later than that, I think.

Mr. MILLS. It was before the gentleman and I came to the Congress. But, I believe it was around that time anyway. That law has never been used. Would the gentleman from Iowa prefer that that process be used?

Mr. GROSS. I merely ask what use has been made of it.

Mr. MILLS. If we did not have authority to issue obligations under the Second Liberty Bond Act, it might have to be used sometime-I would hope it would not have to be.

Mr. GROSS. I would too because the Government could have at the expiration of this law-and it used to be extended every 2 years and now it has been

Mr. JOHANSEN. If I understand the gentleman's line of argument with regard to the process we are going through here today and have twice before, attempting to correct the matter of deficits and of excessive spending now is like trying to bring the patient back to life by an autopsy or a post mortem operation. If a patient dies from acute alcoholism the fact is disclosed by the post mortem. Is not that correct?

me correctly-the Government could have outstanding at the end of the life of this law $5 billion of printing press money, and the only way we could ever get that huge sum back would be to tax the people; tax those dollars out of circulation. The gentleman will agree with that; will he not?

Mr. MILLS. Yes, I would. It would be money in circulation through the printing press process.

Mr. HERLONG. I think there has I think there has been something learned and that we will learn some more. Certainly the spending this year is going to be less than they said it was at the beginning of the year. This is at least something. Some people say it is a token cut. Others say it is significant. It depends on which side of the aisle you sit. But I think it is significant myself.

Mr. BAKER. Mr. Chairman, I yield 5 minutes to the gentleman from Iowa [Mr. GROSS].

Mr. GROSS. Mr. Chairman, I would like first to ask the gentleman from Arkansas a question which I have asked him previously, but I cannot remember

in the not distant future to provide a pay increase for all employees of the Government including the Members of Congress-a $10,000-a-year pay increase bill. The argument will be made if and when the bill comes to the floor of the House that the Members of Congress are the directors of a corporation known as the Government. That bill is going to mean a minimum annual increase in salaries It will also mean total increases over the last 15 months, that is from last October to the first of next year if the bill is enacted, of $1,600 billion-plus in the payroll of the Federal Government, and it will bring the total yearly payroll up to approximately $16 billion. It will be argued, as I said, that Members of the Congress, as the directors of this corporation should each have a $10,000 salary increase to $32,500. So we will have, if that bill is voted, the unholy spectacle of the directors of this Government corporation, some of whom

came there when these governments were unable to sell their bonds. Then there was but one recourse, which was to start the printing presses rolling out paper money of which it required a handful just to buy a loaf of bread or a bottle of milk for the children.

A majority of the members of the House Appropriations Committee have struggled diligently for the past 21 years to my knowledge, in reducing budget requests. I know, for I have been a member of that committee for these 21 years.

Let me state facts and figures. For 20 of those years, and up to this session of Congress, had the House appropriations figures prevailed, the national debt would be over $60 billion less than it is today; and indications are that the House will reduce the President's 1964 fiscal year budget request by over $7 billion, and without hurting the administration of any Federal agency one iota.

But Mr. Chairman, my colleagues, and all Americans, I ask you just how much does that profit us, when our President sends to Congress a planned deficit of $12 billion for fiscal year 1964 which ends on June 30 next, and to make matters doubly worse, we are now asked to raise the national debt up to the staggering sum of $315 billion, which places a lien against every American family of about $7,000, all of which must be paid, somehow, someway, someday, or else.

Yes, Mr. and Mrs. American, all of you are feeling the effect of this reckless spending spree right today, not only in increased Federal income taxes, but also in the cost of living and on every commodity you buy for your own use and that of your family. And you have seen nothing yet, if the reckless spenders of your dollars have their way, or are not stopped in their tracks and soon, by the simple, American, lawful method of throwing them out of office at the first opportunity.

Let us not forget that great harm can be done to our economy, between now and January 1965, and will be done without a doubt, if Congress permits the national debt to be raised, as now requested, to $315 billion, for then, just as sure as the sun will set tonight, every Federal spending agency will feel that Congress wants them to continue spending as usual. Then, soon again Congress will be asked to raise the national debt ceiling to possibly $325 billion or more especially, if the tax cut the House passed is made law, then, I ask, what will the harvest be? Every American over 10 should know by now. Hence, I plead with you, my colleagues, to stop it now by voting "no" on this bill today.

Mr. MILLS. Mr. Chairman, I yield 5 minutes to the distinguished chairman of the Committee on Appropriations, the gentleman from Missouri [Mr. CANNON]. Mr. CANNON. Mr. Chairman, Thomas Jefferson said on one occasion: Let us, fellow citizens, unite. Every difference of opinion is not a difference of principle.

Mr. Chairman, in that spirit I am sorry to find myself in difference of opinion, but not in principle, with the great Committee on Ways and Means. I have the warmest regard and the highest ad

miration for each of the members of that committee personally, and I would much prefer to agree with them than to disagree. There is nothing personal or partisan whatever in my failure to go along with the recommendation of the committee in the adoption of the the adoption of the resolution.

Mr. Chairman, disagreement is not to be deprecated. It is a wholesome and necessary means of achieving acceptable composite legislation. It is the means used by any deliberative body in resolving its problems. It is essential in the enactment of permanent law.

I am old fashioned enough, Mr. Chairman, to believe that a man ought to pay his debts; that a nation ought to pay its debts, and that neither should contract obligations if they do not expect to pay them.

Congress is thoroughly familiar with the conditions which have brought about this situation. We have with open eyes voted deficit obligations session after voted deficit obligations session after session. We have year after year voted expenditures beyond our income. Now, a vote against this resolution will be inconsequential in its immediate effect, but it will register the opinion of many peoit will register the opinion of many people throughout the country that we should keep within our income, and we should not continue to increase the public debt without making provision to pay it.

For more than a third of a century, with one or two exceptions, we have continuously rated every year deficit appropriations. We have continuously inpropriations. We have continuously increased the national debt, without giving the slightest attention as to how it was to be paid or who was to pay it or when it was to be paid. What is our ultimate destination?

At this rate eventually the entire revenues of the Government will not pay the annual interest on the national debt. No one who has advocated this bill here today has given us the slightest idea about its repayment-and the cost of living of every family in America increases every day because we are not paying as we go.

So, Mr. Chairman, I shall vote against this bill for three reasons: First, because of opposition to the policy of the government in spending money we do not ernment in spending money we do not have for things we can get along without. It has not been the national defense expenditures that have created this deficit. It has been the nonessential expenditures voted by Congress which have carried us over the brink every year. I shall vote against it as a protest against continually increasing the burden of the national debt.

Second, I shall also vote against it because I am convinced we could weather this situation without raising the debt limit at this time. A study of the report indicates that if we really desire to get along without raising the debt limit we can do it.

And, third, Mr. Chairman, I shall vote against it because it would encourage larger expenditures for the remainder of the year. With the increased latitude of a debt capacity running up to $315 of a debt capacity running up to $315 billion it will be hard to restrain appropriations to take up the slack.

Certainly, if we can get along without this resolution-and we can-we ought to do it.

Mr. BYRNES of Wisconsin. Mr. Speaker, I ask unanimous consent that the gentleman from Michigan [Mr. HUTCHINSON] may extend his remarks at this point in the RECORD.

The SPEAKER. Is there objection to the request of the gentleman from Wisconsin?

There was no objection.

Mr. HUTCHINSON. Mr. Chairman, when we increase the national debt, we borrow from the future. We cast upon our children the burden of paying for our needs and desires as well as their own. In this we are unfair to them. Government debt is the measure of our failure in our generation to provide for ourselves, because practically all of the present debt was incurred by our generation.

The gentleman who now addresses you is well aware of the argument made by some economists that the national debt need never be paid. So long as we can refund it and pay the interest upon it, those economists argue, we are in good shape. Sometime, however, the debt will either have to be paid or repudiated.

I join with those who believe our better national course would be to balance our budgets and provide for an orderly reduction of the national debt.

Historically, our national debt has increased in wartime and has been reduced in time of peace. Following World War II, the historic pattern commenced to repeat but then came the Korean conflict, and the debt has been increasing ever since.

In 1951, 1956, and 1957, the debt was minutely reduced from the immediately preceding year-but its trend since 1948 has been ever upward. The high point of the debt created by World War II was $269 billion in 1946. By 1948, it had been reduced to $252 billion. We now propose to base a ceiling upon it of $315 billion. Some may say that we are not living in peace and so the wartime, rather than the peacetime pattern, should be our comparison. The truth of the matter is, however, that our economy is acting like a peacetime economy, with all of the supply of the country made available for consumer demand. These are the times when we should be reducing our national debt.

If the rule under which this bill is now before us permitted amendment, I would offer an amendment for such orderly reduction.

It is my belief, and I am confident the belief shared by millions of my countrymen, that a balanced budget and an orderly program of debt reduction can do more to spur the expansion of our economy than all of the palliatives of the pump-primers.

Mr. LANGEN. Mr. Chairman, I recall my statement before this assembly on August 8 of this year, the last time we gathered to consider raising the national debt limit to accommodate our spendthrift Government. I must have been indulging in wishful thinking because I said then that by the time we would be called upon to increase the debt limit

again in November we would know the fates of the tax reduction bills and the amounts approved in various appropriation bills so that we would know just how far in the hole this Government plans to go during this fiscal year.

Three months have now passed since that balmy August day and we now find ourselves in the chilled days of November. The only thing that has changed is the weather outside, since the balmy breezes seem to remain with us inside this Chamber. We know nothing more now than we did then, except that we are asked to raise the debt limit from $309 billion to $315 billion. We still do not know what the appropriations will be for this fiscal year, even though it is now in its fifth month. And the fate of the tax bill remains uncertain.

In reflecting over the past 10 months I cannot help but be somewhat amused over the ridiculous chain of events that have led us to this moment. It would be more humorous if this was just a game of nerves or some such thing that we have been playing. But it ceases to be funny when you consider we are playing with the future of this Republic and the lives of its people.

What has been our accomplishment? What can we point to with pride? What has been the big business of the session thus far? This is the third time this year we have met to raise the so-called "temporary" national debt limit, which is, I will admit, quite an accomplishment in itself. And we passed three continuing resolutions to keep the wheels of Government going while various committees continue to consider authorizing legislation for the appropriation bills. This is really our only accomplishment to date.

The departments and agencies are now working on their budget requests for the next fiscal year, but we have not seen fit to let them know how much they can spend this year, even though over 4 months have passed since the fiscal year began. It is a ludicrous situation that will not be tolerated forever by the American public.

To put it simply, we have not even appropriated the money that will be spent to create the deficit that forces us to raise the debt limit again today. It is a strange way to run a government, or anything else for that matter.

But, Mr. Speaker, perhaps all is not lost. Perhaps we are really going to settle down to some serious thinking about these problems and come up with some positive action in the interest of fiscal responsibility. So, what is the big talk around these Halls at the moment? Civil rights? appropriations bills? agricultural legislation? Hardly. All else apparently will have to wait until we have given proper consideration to a bill that would raise our own salaries. It will be a nice Christmas present if we get away with it. The only trouble is that our constituents may expect us to earn it. It is inconceivable that this Congress can even consider raising salaries without proving to the American people in advance that we are going to give them full measure on their tax dollars.

Of course, I understand why we are here today and the importance of providing the moneys that have been appropriated. But the situation today is a bit different. We are raising the debt limit to accommodate spending for which there has not even been an appropriation.

I am aware that the debt limit will probably be raised today, regardless of what I say. what I say. But we should rally to serve notice that this cannot go on forever. We must go on record by telling every segment of this Government, inevery segment of this Government, including ourselves who control the pursestrings, that this is as far as we are going to go, that we will not go a cent above the debt limit.

One of these days we are going to turn down one of these debt limit bills. It will create a moment of panic within this Government when it happens. But it could herald the beginning of a new era of fiscal responsibility.

Mr. ULLMAN. Mr. Chairman, President Eisenhower's last Budget Director, Maurice Stans, frequently described how the President's discretion in his budget recommendations is hemmed in by laws already on the books and spending commitments made in prior years. For example, on December 1, 1959, he said:

Even if the next session of the Congress doesn't add any new programs, the level of Federal spending is going to go up. The reason is that there are built-in increases in

existing programs which are now producing a continuing upcurve in expenditures. The catalog of built-in increases covers such programs as outer space, civil aviation, merchant shipping, urban renewal, science education, medical research, public assistance, loans to underdeveloped countries, and vetwill run higher, and the farm program will erans' pensions. Interest on the public debt

cost more and more until we get realistic legislation. Defense technology is putting increasing pressure on expenditures. Now, for 1961 alone, these built-in increases amount to between $2 and $21⁄2 billion.

Built-in increases, similar to those Mr. Stans mentioned, will also occur in fiscal year 1965.

Some of these increased expenditures will result from a rising level of obligations and commitments under appropriations granted by the Congress prior priations granted by the Congress prior to 1965. Examples include space exploration, waste treatment grants, and loan programs for housing and community development, economic development abroad, and rural electrification.

A number of clearly uncontrollable increases in obligations and expenditures will also be required in 1965 under present law. These include interest on a higher public debt, the full year effect of military and civilian pay increases which will be effective for only part of 1964, and public assistance grants to States and pensions and medical care for veterans to provide for a growing number of recipients.

In addition, increased spending for 1965 is committed for various other projects underway this year, including public works of the Corps of Engineers, public buildings, civil aviation facilities, science education, and health research. Our population and economy growing. By the end of the fiscal year 1964, there will be 10 million more Amer

are

icans than there were the day President Kennedy took office. This means that we will add to the United States in this short period a number of people which is half the population of Canada. Το keep Federal expenditures stable would mean a lower quality of service to each of our citizens.

While our economic performance in recent years has lagged behind its potential, the economy of our country is expanding and there is no doubt that we can afford the increased and improved public services our citizens need and have been demanding. Moreover-and this is the important point-we can provide these services without increasing the share of the Nation's total output going directly to the Federal Government.

From fiscal year 1953 to fiscal 1963, the gross national product rose from $360 to $568 billion, an increase of almost 60 percent. During this period, Federal administrative budget expenditures measured in the same current dollars as the gross national product rose from $74.1 to $92. 6 billion, an increase of 25 percent-much less of an increase than in the rate of growth of the gross national product. This trend is also illustrated by the fact that administrative budget expenditures as a percentage of gross national product declined from 20.6 percent in fiscal year 1953 to 16.3 percent in fiscal 1963. While Federal outlays have been rising fairly steadily over the post-Korean period, they have remained a relatively stable percentage of total output in the last 8 years-hovering around 16 percent.

Mr. Chairman, the legislation before this committee is very responsible and very necessary. I strongly urge its passage.

Mr. BURKE. Mr. Chairman, the ceiling was adopted as a substitute to approval by the Congress of each new issue of Government security. It has served this purpose admirably. To contend that it serves any other purpose is pure nonsense.

One often hears the ceiling likened to a line of credit like you or I have at a department store. When we hold this contention up to the light, we find that it is not the ceiling that has this likeness, rather it is the appropriations enacted by the Congress. It is by such action that approval is given to obligate the Government to pay for goods and services to be received in the future. many cases these goods and services are completely consumed before the vendor requests payment. How then can one contend that an unrealistic "ceiling" by the Government would save the Government money? In such cases it would only result in repudiating the faith and credit we have in our Government.

In

Specifically, what is the relationship between an inadequate debt ceiling and the Treasury's goal of maintaining a balanced debt structure?

Long-term issues, in particular, require a favorable market environment if they are to be successful. A too tight debt ceiling may prevent the Treasury from taking full advantage of favorable opportunities as they arise. It may cause