ular purpose, but I think the Constitution gives Congress authority to decide whether they will spend that amount or some other amount or whether they are going to adopt some new program.

Mr. ASH. Yes, sir. I would offer two comments following that which you have said.

First, the particular examples quoted by the author dealt not with this year but earlier activities. This year the reasons are very compelling ones and different ones. The President, of course, has many laws that he has to live with simultaneously. The Antideficiency Act is one. The ceiling on the Federal debt is one. When these require him to engage in inconsistent actions, he then must choose according to his best judgment how he can conform to the laws that guide him and control him for that matter. Obviously, had he gone on and spent $261 billion, he would have certainly created-first he would have gone over the debt ceiling; second, he would have given rise to an absolute need for either new taxes or considerably higher prices through inflation, or if we had to look to monetary policy to deal with that amount of deficit, then it would be translated to higher interest and shortage of money, again an obligation of the President under the Full Employment Act.

So, with all of these acts bearing upon him, he applied his very best judgment as to how to deal with them and believed that that which best served all of the people was to reduce expenditures to 250 rather than 261.

Senator ERVIN. I would say all of that could have been avoided by the administration, by seeking the agreement of the House and Senate in saying he couldn't exceed $250 billion and that the President could cut all programs in equal proportions.

Also the President could have avoided some problems in his recommendations. For example, there was the recommendation that we authorize appropriation for $30-odd billion for revenue sharing. We didn't have any revenue sharing, and I voted against that. In other words, the President could have spent the highway funds, and spent them within the $250 billion ceiling, and he could have refrained from recommendations for appropriation of revenue-sharing things when there was no money to take care of them. Then there wouldn't have been any bumping against the ceiling.

Mr. Ash. I am certain, sir, that if each of us were given the problem. of which $11 billion to look for we would each have a different list or priorities. Yet at some point a list has to be selected of them all. We are not choosing between good programs and bad programs. In many cases we are forced to choose between good ones and better ones.

Senator ERVIN. We are choosing between programs which Congress likes, and programs which the President dislikes, and programs which the President likes and Congress dislikes. That is what it is.

Mr. ASH. Well, Congress, as you know, and again the President has strongly recommended right at the beginning of his budget message that the Congress find that mechanism to first deal with the overall total of expenditures and within that, then, to itself consider each of the individual programs. The issue this year has been that the individual programs were dealt with without the consideration of the total, leaving only the President as the final point of solving the country's problems, of holding down further inflation, making sure that

taxes didn't become more unbearable than they are or raising the prices of interest. Somebody had to do the job. He stepped up to the responsibility and did it but we would very much like to share that with the Congress.

Senator ERVIN. He would like to share the responsibility of holding down funds with the Congress, but not the devising of programs and choosing which programs ought to be implemented or funded.

Mr. Asu. Well, he has proposed in the 1974 budget the priorities he would offer. That doesn't necessarily mean each and every one will be accepted just as he offers them.

Senator ERVIN. By impounding the funds appropriated for the year beginning July 1, 1972, and ending June 30, 1973, he has taken priorities set up by him, and denied those Congress set up.

Mr. ASH. Certainly for the 1973 expenditures, there being no better alternative if we are not to create that head-on collision with the other train coming down the track, higher prices, higher taxes, higher in

terest rates.

Senator ERVIN. I am a very simple-minded man, and I can't understand the effect that impounding highway funds, which we have, and then on the contrary spending money we haven't got, has on inflation. Is that to say spending money you have got causes inflation, and spending money you haven't got doesn't cause inflation?

Mr. AsI. Now we are into the context of the full employment budget and I am not sure we want to go down that road.

Senator ERVIN. The full employment budget is another gimmick, sort of like a unified budget, to give some excuse for deficit financing. The administration says if we do this, maybe we will get a little more money. That is the theory the Federal Government has been operating on ever since I got to Congress 18 years ago.

Mr. Asн. One of the things I heard was that the Congress decided we should operate under a unified rather than Federal funds concept. There is a lot of history entering in this, I suspect.

Senator ERVIN. As a matter of fact, I think President Johnson came. up with the idea of a unified budget. Of course, they wouldn't want to deceive the people and make the people think they are spending less money than they are, but it is the mechanism by which that deception can be practiced.

Now, the President said something at a press conference yesterday that sort of hurt my feelings at first. He said Congress was financially irresponsible. Those are not his exact words. That is not the reason he has taken charge of the power of the purse, and that statement sort of hurt my feelings. I got to thinking, ever since I came to the Senate and before, Congress has been financially irresponsible, in my judgment, and every President that I have served with has been financially irresponsible. I have the conviction that except in times of extreme adversity, like it was in the Great Depression, or in times. of all-out war, that there is something fundamentally-I started to sav dishonest, but I say irresponsible instead-in a President recommending deficit financing, sending Congress a budget that requires deficit financing instead of recommending imposition of taxes. By the same token. I think there is something fundamentally irresponsible in the Congress appropriating and providing for the expenditure of funds which it knows have to be paid by deficit financing, and I would

testify from my observation of President Eisenhower, President Kennedy, President Johnson, and President Nixon that everyone has aided and abetted the Congress of the United States, since I have been here, in being financially irresponsible.

Mr. Asi. Sir, I think I will find one ray of hope in the budget this year. The 1974 budget for the first time projects ahead in considerable detail the 1975 plan of expenditures and of revenues. While, of course, it is not as formal and firm as is the budget, at least it shows the route to a balanced budget because the plan for the 1975 budget does move us all to the place we would like to be.

Senator ERVIN. Ever since I have been here, it has been said that if we have a little deficit financing now, a few years from now we will have a balanced budget. I have been hearing that for 181⁄2 years and the American people have been hearing it for almost 40 years and it has never materialized.

Mr. Ash. There is one very interesting aspect of that which was done in 1973. Had those programs been allowed to continue, their effect on the years 1974 and 1975 would not have been just the $11 billion in each of those years, but a total of $45 billion for the 3 years. Had we continued on the course we were on, for that year, we would have mortgaged our future in a way so as to completely remove the possibility of reaching the point of a balanced budget in 1975.

Senator ERVIN. One more observation about financial irresponsibility. I say this: I doubt that any President was a cent above the one presently in the White House who recommended appropriations and expenditures during the first 4 years of his administration which resulted in approximately $110 billion increase in the national debt

Mr. ASH. Here we are back to the discussion of the full employment budget again. I don't have along with me the charts that each of you have that went along with the budget. But those charts, under the economic theory of full employment, indicate that the main contribution to inflation was that that took place in the years 1965, 1966, 1967, and 1968 with a substantial full employment deficit that we had, but now we are on the issue of which economics do you buy.

Senator ERVIN. I am just sort of curious to determine how you promote full employment by impounding funds that are used to employ teachers and other people.

Mr. Ash. Well, as you know, through the aggregate of all economic, fiscal, monetary actions employment is going up and unemployment is going down, but at the same time there is a very precarious balance between that and prices, that is inflation and prices, and that $11 billion would have translated itself into substantially higher prices for everybody unless the alternatives were to choose taxes.

Senator ERVIN. I think it is pretty bad when Congress appropriates money to employ teachers to teach in schools at the request of the President, and the President signs that bill into law, and the administration urges that the States take advantage of that law, and then when the States take advantge of that and contract with the teachers, the administration cuts off the funds so they can't pay the teachers. I think that it is something-well, I won't say it, but it is pretty bad, I think.

Mr. Ash. My associate here has an observation to make much more wise than mine.

Mr. COIN. Senator Ervin, I would very much appreciate knowing the facts on what has happened. I don't recall when we have reserved or impounded money that the Congress enacted for paying teachers. Senator ERVIN. The Emergency School Act, the people who would have received the money, and the State officials who would have paid it to them and State officials were induced by the Government, and came to rely on the provisions of the act. People came up in multitudes to see me and other Members of Congress. I am sorry you didn't know it happened.

Mr. COHN. I am sorry, too, Senator. I may be wrong, but it seems to me that that appropriation was probably in the bill that was vetoed last year.

Senator ERVIN. Oh, no, no, no. It is the Emergency School Assistance Act.

Mr. CHILES. Signed into law.

Senator ERVIN. I voted against it because I knew we didn't have the money.

Mr. COHN. I know the Emergency School Assistance Act was signed into law, but I do not know when the appropriations were enacted. Senator ERVIN. Let me get your name and address and I will have

mv

Mr. COIN. Now that I know it is the Emergency Assistance Act I will look into it, Senator.

Thank you.

(The Office of Management and Budget subsequently supplied the following information for the record :)

ANSWER TO QUESTION CONCERNING IMPOUNDMENT OF EMERGENCY SCHOOL
ASSISTANCE ACT FUNDS

An appropriation of $270,640,000 for the Emergency School Assistance program was provided in the Supplemental Appropriation Act, 1973, that was signed by the President on October 31, 1972. These funds were apportioned in their entirety by the Office of Management and Budget, and there is no record of their being reserved or "impounded." The full amount $270,640,000, is expected to be obligated during the current fiscal year.

Mr. ASH. And I would say one further thing without knowing anything about that specific matter, that in this particular case of this year probably many of us can make a case for this program or that program or the other program. Many of them may have merit, the issue is more merit rather than less merit. Those are the tough decisions that have had to be made.

Senator ERVIN. Five hundred and thirty-five men who have been elected by the people of the United States, and thereby given constitutional power to make those decisions, have made those decisions they offered to comply with the President's idea of a viable ceiling on expenditures, but the President opposed it on the ground that he was the one that ought to pick out which programs take priority over others.

Now, you gave three provisions to the Constitution which you say give the President power to impound funds appropriated by the Congress for specific purposes.

Mr. Ash. I am not sure I gave three. One out of the Constitution is article II which requires the President to take care to see that the laws are faithfully executed. That is the one that is a very important one.

Senator ERVIN. Yes, it is; but it happens that the appropriation bill is law.

Mr. ASH. There are many other laws and the President is confronted with living with many simultaneously.

Senator ERVIN. I don't think the President has any more power to nullify an appropriation law than he has a law to make it a crime to break into a post office. I don't know if the administration agrees with me on that.

I think maybe you will agree with me on the proposition that the Constitution invests all of the legislative power in the Congress. Mr. ASH. I certainly do; yes.

Senator ERVIN. Section 9 of article 1 says: "No money shall be drawn from the Treasury, but in consequence of appropriations made by law." I take that as a recognition of the fact that the appropriation bill is law.

Mr. Asн. I agree with that and I believe it is a very wise part of the Constitution. No money is drawn from the Treasury that is not duly appropriated, but that does not say all money actually appropriated must be drawn from the Treasury.

Senator ERVIN. That is what I want to come to now. I do not want to detain you too long because others have some questions they want to ask.

I cannot see where the President draws any authority to impound funds by reason of the fact that the Constitution says he must take care that the laws are faithfully executed unless those laws give him the authority to impound funds.

Mr. ASH. Debt ceiling

Senator ERVIN. Yes.

Mr. AsH (continuing). Is clearly a law he is obligated to live with. What if we wrote a check and there were no funds, which is really the position

Senator ERVIN. Congress has passed a law that you cannot exceed the debt ceiling.

Mr. ASH. And he is living with that law.

Senator ERVIN. And my point is this: That this provision that the President be faithful to see that the law is executed does not give him any authority, in and of itself, to impound anything at all unless Congress authorizes it to do the impounding.

Mr. ASH. This is the only means at his command to take care to make sure that the laws are faithfully executed.

Senator ERVIN. But he has no authority in this field unless it is derived from the Constitution, or from the acts of Congress. That is the point I am making on this clause.

Mr. Asн. He is obligated to take care to see the laws are executed. The subsequent laws

Senator ERVIN. He is obligated to take care to execute the acts of The subsequent laws

Senator ERVIN. But he has no authority in this field unless it is Congress and nothing else.

Mr. ASH. One of those is the debt ceiling, another one the Full Employment Act, another one the Antideficiency Act. In attempting to live with all of those three he has no choice but impoundment.