The evils which have resulted from the lack of centralized fiscal control and corresponding lack of responsibility have caused much demand for some change. These demands began to take definite form under the administration of President Taft. He was instrumental in securing from Congress an appropriation of $100,000 for the purpose of making investigations into the efficiency of the various executive departments. The investigations were made by ably trained men who composed the Commission on Economy and Efficiency. A part of their report attempted to show the need for a budget system, and suggested a remodeling of the fiscal program to conform to a real budget plan.

The President made an attempt to have our fiscal system remodeled, but at this time both the Senate and the House were antagonistic and the attempt failed. Much wholesome publicity had been gained, however, and demands for reform have continued from an ever increasing number of individuals and organizations. Each of the important political parties has declared in its platforms for fiscal reform, which has been unmistakable in the declaration for a businesslike budget. It has been, perhaps, only the more pressing problems brought on by the Great War which have delayed the expected changes. It is not too much to expect that, in the near future, the widespread demand for some system which will be more efficient and economical will bear fruit through some form of budgetary procedure.

1 Statement before a Select Committee on the Budget.

Suggestions for Reform. - Suggestions as to the exact form our budget should take have not always been the same, though all have sought to centralize responsibility. A satisfactory plan, however, should provide for the accomplishment of such features as the following. The preparation of estimates should be made by some responsible member of the executive department, perhaps the President, or Secretary of Treasury. The estimate should be considered by Congress, but not in a number of separate and independent committees. During the legislative consideration the executive responsible for the recommendations should be called upon to defend his proposals, and changes should be made only with his consent. The proposal should be made early in the legislative session, and general publicity facilitated in every possible way. After the budget has been voted upon by Congress it is incumbent upon the executive department to execute it properly. In the performance of this duty it should be held strictly accountable to the legislative department.

Such provisions as these have been embodied in a number of bills and resolutions which have been before Congress in recent sessions. It is evident that the proposals are gaining in favor on their own merits, as well as because of the pressure which is being brought by outside agencies, and it is not too much to expect that some form of budget procedure will be in operation in the not distant future. Congress, in 1920, passed a law which provided for rather extensive centralized budgeting machinery for Federal finances. This was vetoed, however, by President Wilson, because some of the details did not conform to his ideas of what a budget system should be.

Recent Legislation. - Budgetary legislation was one of the important matters acted upon by the Sixty-seventh Congress. Under the leadership of Senator McCormick a budget bill passed the Senate on April 26, 1921, and under the leadership of Representative Good a similar bill passed the House on May 5, 1921, One important difference was that the McCormick bill centered responsibility in the Treasury Department, while the Good bill centered it in the Executive Department. An immediate conference on the bills was arranged so that the new system could be put into operation at the beginning of the fiscal year, July 1, 1921. The conference report was adopted May 27, 1921.

The McCormick-Good budget bill provides that the President shall transmit a budget to Congress on the first day of each regular session. This is to contain estimates of expenditures and appropriations necessary, in his judgment, for the support of the government for the ensuing fiscal year. He is to send, as well, an estimate of the receipts under the existing laws and under the proposals made by him. A statement of expenditures and receipts for the previous year is also to be made. The condition of the Treasury for the last fiscal year, the year in progress, and for the ensuing year, should the budget be adopted, as well as all essential facts regarding indebtedness, are to be a part of the report. Any other data that will depict the financial conditions of the government may also be included. Provision is also made for the transmission of supplemental or deficiency budgets.

No estimate or request for an appropriation, and no request for an increase in any item of the estimate, and no recommendation as to how the revenue needs of the government shall be met are to be submitted to Congress or any congressional committee by any officer or employee of any department or establishment unless at the request of either house of Congress.

The plan adopted, however, is not so wholly an executive budget as the foregoing statements might indicate. Section 207 of the law creates in the Treasury Department the bureau of the budget. It is to consist of a director and an assistant director, appointed by the President, with salaries of $10,000 and $7,500, respectively. This bureau, under such regulations as the President may prescribe, is to prepare the budget for him, as well as any deficiency budgets that may be needed. It has the power, further, to assemble, correlate, revise, reduce, or increase the estimates of the several departments or establishments.

Modifications are also made in the accountancy work of the Treasury Department. The offices of Comptroller of the Treasury and Assistant Comptroller of the Treasury have been abolished, and in their place has been substituted a Comptroller-General and an Assistant Comptroller-General. A general accountancy office has been established which is independent of the executive departments, and is placed under the direction and control of the Comptroller-General. All books, accounts, etc., are to come to the general accountancy department.

Time will test the wisdom of some of the provisions of the law, such as the combination of the Executive with the Treasury Department. With Congress and the President so heartily in favor of budgetary procedure, there is every reason why a marked improvement will result. That President Harding was favorable toward budgetary legislation is indicated by the following quotation:

I need not emphasize to you, gentlemen, the anomalous situation of the government heretofore in having a great number of spending committees, apportioning moneys to various purposes, without any study of the relationship between these various purposes, and regardless of the relationship of these aggregated spendings to the revenue in sight. No business, no humblest household, could be thus conducted without leading into disaster. Establishment of a budget system is the foundation upon which reorganization must be based. It is hardly conceivable, indeed, that a proper budget system could be established and carried on for any considerable time without forcing attention to the evils and effecting the reform of many deficiencies in the present system.1