Part 3 (2/2)

Having with such aids made up his budget, the Chancellor goes before the Committee of Ways and Means prepared to give a clear history of the financial administration of the year just closed, and to submit definite plans for adjusting the taxation and providing for the expected outlays of the year just opening. The precedents of a wise policy of long standing forbid his proposing to raise any greater revenue than is absolutely necessary for the support of the government and the maintenance of the public credit. He therefore never asks the Committee to lay taxes which promise a considerable surplus. He seeks to obtain only such an over-plus of income as will secure the government against those slight errors of underestimation of probable expenses or of overestimation of probable revenue as the most prudent of administrations is liable to make. If the estimated revenue considerably exceed the estimated expenses, he proposes such remissions of taxation as will bring the balance as near equality as prudence will permit; if the antic.i.p.ated expenses run beyond the figure of the hoped-for revenue, he asks that certain new taxes be laid, or that certain existing taxes be increased; if the balance between the two sides of the forecast account shows a pretty near approach to equilibrium, so the scale of revenue be but a little the heavier of the two, he contents himself with suggesting such a readjustment of existing taxes as will be likely to distribute the burden of taxation more equitably amongst the tax-paying cla.s.ses, or facilitate hampered collections by simplifying the complex methods of a.s.sessment and imposition.

Such is the budget statement to which the House of Commons listens in Committee of Ways and Means. This Committee may deal with the proposals of the Chancellor of the Exchequer with somewhat freer hand than the Committee of Supply may use in pa.s.sing upon the estimates. The Ministry is not so stiffly insistent upon having its budget sanctioned as it is upon having its proposed expenditures approved. It is understood to pledge itself to ask for no more money than it honestly needs; but it simply advises with the House as to the best way of raising that money.

It is punctiliously particular about being supplied with the funds it asks for, but not quite so exacting as to the ways and means of supply.

Still, no Ministry can stand if the budget be rejected out of hand, or if its demands for the means of meeting a deficiency be met with a flat refusal, no alternative means being suggested by the Opposition. Such votes would be distinct declarations of a want of confidence in the Ministry, and would of course force them to resign.

The Committee of Ways and Means, then, carries out, under the guidance of the Chancellor of the Exchequer, the resolutions of the Committee of Supply. The votes of the latter Committee, authorizing the expenditures mapped out in the estimates, are embodied in ”a resolution proposed in Committee of Ways and Means for a general grant out of the Consolidated Fund 'towards making good the supply granted to Her Majesty;'” and that resolution, in order that it may be prepared for the consideration of the House of Lords and the Crown, is afterwards cast by the House into the form of a Bill, which pa.s.ses through the regular stages and in due course becomes law. The proposals of the Chancellor of the Exchequer with reference to changes in taxation are in like manner embodied in resolutions in Committee of Ways and Means, and subsequently, upon the report of the Committee, pa.s.sed by the House in the shape of Bills, ”Ways and Means Bills” generally pa.s.s the Lords without trouble. The absolute control of the Commons over the subjects of revenue and supply has been so long established that the upper House would not now dream of disputing it; and as the power of the Lords is simply a privilege to accept or reject a money bill as a whole, including no right to amend, the peers are wont to let such bills go through without much scrutiny.

But so far I have spoken only of that part of parliament's control of the finances which concerns the future. The ”Ways and Means Bills”

provide for coming expenses and a prospective revenue. Past expenses are supervised in a different way. There is a double process of audit by means of a special Audit Department of the Civil Service, which is, of course, a part of the permanent organization of the administration, having it in charge ”to examine the accounts and vouchers of the entire expenditure,” and a special committee nominated each year by the House ”to audit the Audit Department.” This committee is usually made up of the most experienced business men in the Commons, and before it ”all the accounts of the completed financial year are pa.s.sed in review.” ”Minute inquiries are occasionally made by it into the reasons why certain items of expenditure have occurred; it discusses claims for compensation, grants, and special disburs.e.m.e.nts, in addition to the ordinary outgoings of the department, mainly, to be sure, upon the information and advice of the departments themselves, but still with a certain independence of view and judgment which must be valuable.”

The strictness and explicitness with which the public accounts are kept of course greatly facilitate the process of audit. The balance which is struck on the thirty-first of every March is of the most definite sort.

It deals only with the actual receipts and disburs.e.m.e.nts of the completed fiscal year. At that date all unexpended credits lapse. If the expenditure of certain sums has been sanctioned by parliamentary vote, but some of the granted moneys remain undrawn when April comes in, they can be used only after a regrant by the Commons. There are, therefore, no unclosed accounts to obscure the view of the auditing authorities.

Taxes and credits have the same definite period, and there are no arrears or unexpended balances to confuse the book-keeping. The great advantages of such a system in the way of checking extravagances which would otherwise be possible, may be seen by comparing it with the system in vogue in France, in whose national balance-sheet ”arrears of taxes in one year overlap with those of other years,” and ”credits old jostle credits new,” so that it is said to be ”always three or four years before the nation can know what the definitive expenditure of a given year is.”

For the completion of this sketch of financial administration under the Commons it is of course necessary to add a very distinct statement of what I may call the _accessibility_ of the financial officers of the government. They are always present to be questioned. The Treasury department is, as becomes its importance, exceptionally well represented in the House. The Chancellor of the Exchequer, the working chief of the department, is invariably a member of the Commons, ”and can be called to account by interrogation or motion with respect to all matters of Treasury concern”--with respect, that is, to well-nigh ”the whole sphere of the discipline and economy of the Executive Government;”

for the Treasury has wide powers of supervision over the other departments in all matters which may in any way involve an outlay of public money. ”And not only does the invariable presence of the Chancellor of the Exchequer in the House of Commons make the representation of that department peculiarly direct, but, through the Secretary of the Treasury, and, with respect to certain departmental matters, through the Junior Lords, the House possesses peculiar facilities for ascertaining and expressing its opinion upon the details of Treasury administration.” It has its responsible servants always before it, and can obtain what glimpses it pleases into the inner workings of the departments which it wishes to control.

It is just at this point that our own system of financial administration differs most essentially from the systems of England, of the Continent, and of the British colonial possessions. Congress does not come into direct contact with the financial officers of the government. Executive and legislature are separated by a hard and fast line, which sets them apart in what was meant to be independence, but has come to amount to isolation. Correspondence between them is carried on by means of written communications, which, like all formal writings, are vague, or by means of private examinations of officials in committee-rooms to which the whole House cannot be audience. No one who has read official doc.u.ments needs to be told how easy it is to conceal the essential truth under the apparently candid and all-disclosing phrases of a voluminous and particularizing report; how different those answers are which are given with the pen from a private office from those which are given with the tongue when the speaker is looking an a.s.sembly in the face. It is sufficiently plain, too, that resolutions which call upon officials to give testimony before a committee are a much clumsier and less efficient means of eliciting information than is a running fire of questions addressed to ministers who are always in their places in the House to reply publicly to all interrogations. It is reasonable to conclude, therefore, that the House of Representatives is much less intimately acquainted with the details of federal Treasury airs than is such a body as the House of Commons, with the particulars of management in the Treasury which it oversees by direct and constant communication with the chief Treasury officials.

This is the greater drawback in our system, because, as a further result of its complete separation from the executive, Congress has to originate and perfect the budget for itself. It does not hear the estimates translated and expounded in condensed statements by skilled officials who have made it their business, because it is to their interest, to know thoroughly what they are talking about; nor does it have the benefit of the guidance of a trained, practical financier when it has to determine questions of revenue. The Treasury is not consulted with reference to problems of taxation, and motions of supply are disposed of with no suggestions from the departments beyond an itemized statement of the amounts needed to meet the regular expenses of an opening fiscal year.

In federal book-keeping the fiscal year closes on the thirtieth of June.

Several months before that year expires, however, the estimates for the twelve months which are to succeed are made ready for the use of Congress. In the autumn each department and bureau of the public service reckons its pecuniary needs for the fiscal year which is to begin on the following first of July (making explanatory notes, and here and there an interjected prayer for some unwonted expenditure, amongst the columns of figures), and sends the resulting doc.u.ment to the Secretary of the Treasury. These reports, including of course the estimates of the various bureaux of his own department, the Secretary has printed in a thin quarto volume of some three hundred and twenty-five pages, which for some reason or other, not quite apparent, is called a ”Letter from the Secretary of the Treasury transmitting estimates of appropriations required for the fiscal year ending June 30,” ... and which boasts a very distinct arrangement under the heads Civil Establishment, Military Establishment, Naval Establishment, Indian Affairs, Pensions, Public Works, Postal Service, etc., a convenient summary of the chief items, and a complete index.

In December this ”Letter” is sent, as a part of the Secretary of the Treasury's annual report to Congress, to the Speaker of the House of Representatives, immediately after the convening of that body, and is referred to the Standing Committee on Appropriations. The House itself does not hear the estimates read; it simply pa.s.ses the thin quartos over to the Committee; though, of course, copies of it may be procured and studied by any member who chooses to scrutinize the staring pages of columned figures with the dutiful purpose of keeping an eye upon the uses made of the public revenue. Taking these estimates into consideration, the Committee on Appropriations found upon them the ”general appropriation bills,” which the rules require them to report to the House ”within thirty days after their appointment, at every session of Congress, commencing on the first Monday in December,” unless they can give satisfactory reasons in writing for not doing so. The ”general appropriation bills” provide separately for legislative, executive, and judicial expenses; for sundry civil expenses; for consular and diplomatic expenses; for the Army; for the Navy; for the expenses of the Indian department; for the payment of invalid and other pensions; for the support of the Military Academy; for fortifications; for the service of the Post-Office department, and for mail transportation by ocean steamers.

It was only through the efforts of a later-day spirit of vigilant economy that this practice of making the appropriations for each of the several branches of the public service in a separate bill was established. During the early years of the Const.i.tution very loose methods of appropriation prevailed. All the moneys for the year were granted in a single bill, ent.i.tled ”An Act making Appropriations for the support of the Government;” and there was no attempt to specify the objects for which they were to be spent. The gross sum given could be applied at the discretion of the heads of the executive departments, and was always large enough to allow much freedom in the undertaking of new schemes of administration, and in the making of such additions to the clerical force of the different offices as might seem convenient to those in control. It was not until 1862 that the present practice of somewhat minutely specifying the uses to be made of the funds appropriated was reached, though Congress had for many years been by slow stages approaching such a policy. The history of appropriations shows that ”there has been an increasing tendency to limit the discretion of the executive departments, and bring the details of expenditure more immediately under the annual supervision of Congress;”

a tendency which has specially manifested itself since the close of the recent war between the States.[27] In this, as in other things, the appet.i.te for government on the part of Congress has grown with that perfection of organization which has rendered the gratification of its desire for power easily attainable. In this matter of appropriations, however, increased care has unquestionably resulted in a very decided curtailment of extravagance in departmental expenditure, though Congress has often shown a blind ardor for retrenchment which has fallen little short of parsimony, and which could not have found place in its legislation had it had such adequate means of confidential communication with the executive departments as would have enabled it to understand their real needs, and to discriminate between true economy and those scant allowances which only give birth to deficiencies, and which, even under the luckiest conditions, serve only for a very brief season to create the impression which they are usually meant to beget,--that the party in power is the party of thrift and honesty, seeing in former appropriations too much that was corrupt and spendthrift, and desiring to turn to the good ways of wisdom and frugality.

There are some portions of the public expenditure which do not depend upon the annual gifts of Congress, but which are provided for by statutes which run without limit of date. These are what are known as the ”permanent appropriations.” They cover, on the one hand, such indeterminate charges as the interest on the public debt, the amounts annually paid into the sinking fund, the outlays of refunding, the interest on the bonds issued to the Pacific Railways; and, on the other hand, such specific charges as the maintenance of the militia service, the costs of the collection of the customs revenue, and the interest on the bequest to the Smithsonian Inst.i.tution. Their aggregate sum const.i.tutes no insignificant part of the entire public expense. In 1880, in a total appropriation of about $307,000,000, the permanent appropriations fell short of the annual grant by only about sixteen and a half millions. In later years, however, the proportion has been smaller, one of the princ.i.p.al items, the interest on the public debt, becoming, of course, continually less as the debt is paid off, and other items reaching less amounts, at the same time that the figures of the annual grants have risen rather than fallen.

With these permanent grants the Committee on Appropriations has, of course, nothing to do, except that estimates of the moneys to be drawn under authority of such grants are submitted to its examination in the Secretary of the Treasury's ”Letter,” along with the estimates for which special appropriations are asked. Upon these latter estimates the general appropriations are based. The Committee may report its bills at any stage of the House's business, provided only that it does not interrupt a member who is speaking; and these bills when reported may at any time, by a majority vote, be made a special order of the day. Of course their consideration is the most imperative business of the session. They must be pa.s.sed before the end of June, else the departments will be left altogether without means of support. The chairman of the Committee on Appropriations is, consequently, a very masterful authority in the House. He can force it to a consideration of the business of his Committee at almost any time; and by withholding his reports until the session is well advanced can crowd all other topics from the docket. For much time is spent over each of the ”general appropriation bills.” The spending of money is one of the two things that Congress invariably stops to talk about; the other being the raising of money. The talk is made always in Committee of the Whole, into which the House at once resolves itself whenever appropriations are to be considered. While members of this, which may be called the House's Committee of Supply, representatives have the freest opportunity of the session for activity, for usefulness, or for meddling, outside the sphere of their own committee work. It is true that the ”five-minutes'

rule” gives each speaker in Committee of the Whole scant time for the expression of his views, and that the House can refuse to accord full freedom of debate to its other self, the Committee of the Whole, by limiting the time which it is to devote to the discussion of matters referred to it, or by providing for its discharge from the further consideration of any bill committed to it, after it shall have acted without debate on all amendments pending or that may be offered; but as a rule every member has a chance to offer what suggestions he pleases upon questions of appropriation, and many hours are spent in business-like debate and amendment of such bills, clause by clause and item by item. The House learns pretty thoroughly what is in each of its appropriation bills before it sends it to the Senate.

But, unfortunately, the dealings of the Senate with money bills generally render worthless the painstaking action of the House. The Senate has been established by precedent in the very freest possible privileges of amendment as regards these bills no less than as regards all others. The Const.i.tution is silent as to the origination of bills appropriating money. It says simply that ”all bills for _raising revenue_ shall originate in the House of Representatives,” and that in considering these ”the Senate may propose or concur with amendments as on other bills” (Art. I., Sec. VII.); but, ”by a practice as old as the Government itself, the const.i.tutional prerogative of the House has been held to apply to all the general appropriation bills,”[28] and the Senate's right to amend these has been allowed the widest conceivable scope. The upper house may add to them what it pleases; may go altogether outside of their original provisions and tack to them entirely new features of legislation, altering not only the amounts but even the objects of expenditure, and making out of the materials sent them by the popular chamber measures of an almost totally new character.

As pa.s.sed by the House of Representatives, appropriation bills generally provide for an expenditure considerably less than that called for by the estimates; as returned from the Senate, they usually propose grants of many additional millions, having been brought by that less sensitive body up almost, if not quite, to the figures of the estimates.

After pa.s.sing their ordeal of scrutiny and amendment in the Senate, the appropriation bills return with their new figures to the House. But when they return it is too late for the House to put them again into the crucible of Committee of the Whole. The session, it may be taken for granted, was well on towards its middle age before they were originally introduced by the House Committee on Appropriations; after they reached the Senate they were referred to its corresponding Committee; and the report of that Committee upon them was debated at the leisurely length characteristic of the weightier proceedings of the upper chamber; so that the last days of the session are fast approaching when they are sent down to the House with the work of the Senate's hand upon them. The House is naturally disinclined to consent to the radical alterations wrought by the Senate, but there is no time to quarrel with its colleague, unless it can make up its mind to sit through the heat of midsummer, or to throw out the bill and accept the discomforts of an extra session. If the session be the short one, which ends, by const.i.tutional requirement, on the 4th of March, the alternative is the still more distasteful one of leaving the appropriations to be made by the next House.

The usual practice, therefore, is to adjust such differences by means of a conference between the two Houses. The House rejects the Senate's amendments without hearing them read; the Senate stoutly refuses to yield; a conference ensues, conducted by a committee of three members from each chamber; and a compromise is effected, by such a compounding of disagreeing propositions as gives neither party to the quarrel the victory, and commonly leaves the grants not a little below the amounts asked for by the departments. As a rule, the Conference Committee consists, on the part of the House, of the chairman of its Committee on Appropriations, some other well-posted member of that Committee, and a representative of the minority. Its reports are matters of highest prerogative. They may be brought in even while a member is speaking. It is much better to silence a speaker than to delay for a single moment, at this stage of the session, the pressing, imperious question of the supplies for the support of the government. The report is, therefore, acted upon immediately and in a ma.s.s, and is generally adopted without debate. So great is the haste that the report is pa.s.sed upon before being printed, and without giving any one but the members of the Conference Committee time to understand what it really contains. There is no chance of remark or amendment. It receives at once sanction or rejection as a whole; and the chances are, of course, in favor of its being accepted, because to reject it would but force a new conference and bring fresh delays.

It is evident, therefore, that after all the careful and thorough-going debate and amendment of Committee of the Whole in the House, and all the grave deliberation of the Senate to which the general appropriations are subjected, they finally pa.s.s in a very chaotic state, full of provisions which neither the House nor the Senate likes, and utterly vague and unintelligible to every one save the members of the Conference Committee; so that it would seem almost as if the generous portions of time conscientiously given to their consideration in their earlier stages had been simply time thrown away.

The result of the under-appropriation to which Congress seems to have become addicted by long habit in dealing with the estimates, is, of course, the addition of another bill to the number of the regular annual grants. As regularly as the annual session opens there is a Deficiency Bill to be considered. Doubtless deficiencies frequently arise because of miscalculations or extravagance on the part of the departments; but the most serious deficiencies are those which result from the close-fistedness of the House Committee on Appropriations, and the compromise reductions which are wrung from the Senate by conference committees. Every December, consequently, along with the estimates for the next fiscal year, or at a later period of the session in special communications, come estimates of deficiencies in the appropriations for the current year, and the apparent economies of the grants of the preceding session have to be offset in the gifts of the inevitable Deficiency Bill. It is as if Congress had designedly established the plan of making semi-annual appropriations. At each session it grants part of the money to be spent after the first of July following, and such sums as are needed to supplement the expenditures previously authorized to be made after the first of July preceding. It doles out their allowances in installments to its wards, the departments.

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