Congressional government

by Woodrow Wilson

It is principally in connection with appropriations that what has come to be known in our political slang as "log-rolling" takes place. Of course the chief scene of this sport is the private room of the Committee on Rivers and Harbors, and the season of its highest excitement, the hours spent in the passage of the River and Harbor Bill. "Log-rolling" is an exchange of favors. Representative A. is very anxious to secure a grant for the clearing of a small water-course in his district, and representative B. is equally solicitous about his plans for bringing money into the hands of the contractors of his own constituency, whilst representative C. comes from a sea-port town whose modest harbor is neglected because of the treacherous bar across its mouth, and representative D. has been blamed for not bestirring himself more in the interest of schemes of improvement afoot amongst the enterprising citizens of his native place; so it is perfectly feasible for these gentlemen to put their heads together and confirm a mutual understanding; that each will vote in Committee of the Whole for the grants desired by the others, in consideration of the promise that they will cry "aye" when his item comes on to be considered. It is not out of the question to gain the favoring ear of the reporting Committee, and a great deal of tinkering can be done with the bill after it has come into the hands of the House. Lobbying and log-rolling go hand in hand.

So much for estimates and appropriations. All questions of revenue are in their first stages in the hands of the House Committee of Ways and Means, and in their last, in charge of the Senate Committee on Finance. The name of the House Committee is evidently borrowed from the language of the British Parliament; the English Committee of Ways and Means is, however, the Commons itself sitting in Committee of the Whole to consider the statement and proposals of the Chancellor of the Exchequer, whilst ours is a Standing Committee of the House composed of eleven members, and charged with the preparation of all legislation relating to the raising of the revenue and to providing ways and means for the support of the government. We have, in English parliamentary phrase, put our Chancellorship of the Exchequer into commission. The chairman of the Committee figures as our minister of finance, but he really, of course, only represents the commission of eleven over which he presides.

All reports of the Treasury department are referred to this Committee of Ways and Means, which also, like the Committee on Appropriations, from time to time holds other more direct communications with the officers of revenue bureaux. The annual reports of the Secretary of the Treasury are generally quite full of minute information upon the points most immediately connected with the proper duties of the Committee. They are explicit with regard to the collection and disbursement of the revenues, with regard to the condition of the public debt, and with regard to the operation of all laws governing the financial policy of the departments. They are, in one aspect, the great yearly balance sheets, exhibiting the receipts and expenditures of the government, its liabilities and its credits; and, in another aspect, general views of the state of industry and of the financial machinery of the country, summarizing the information compiled by the bureau of statistics with reference to the condition of the manufactures and of domestic trade, as well as with regard to the plight of the currency and of the national banks. They are, of course, quite distinct from the "Letters" of the Secretary of the Treasury, which contain the estimates, and go, not to the Committee of Ways and Means, but to the Committee on Appropriations.

Though the duties of the Committee of Ways and Means in supervising the management of the revenues of the country are quite closely analogous to those of the British Chancellor of the Exchequer, the lines of policy in which they walk are very widely separated from those which he feels bound to follow. As I have said, the object which he holds constantly in view is to keep the annual balances as nearly as possible at an equilibrium. He plans to raise only just enough revenue to satisfy the grants made in Committee of Supply, and leave a modest surplus to cover possible errors in the estimates and probable fluctuations in the returns from taxation. Our Committee of Ways and Means, on the other hand, follow a very different policy. The revenues which they control are raised for a double object. They represent not only the income of the government, but also a carefully erected commercial policy to which the income of the government has for many years been incidental. They are intended to foster the manufactures of the country as well as to defray the expenses of federal administration. Were the maintenance of the government and the support of the public credit the chief objects of our national policy of taxation, it would undoubtedly be cast in a very different pattern. During a greater part of the lifetime of the present government, the principal feature of that policy has been a complex system of duties on imports, troublesome and expensive of collection, but nevertheless yielding, together with the license taxes of the internal revenue which later years have seen added to it, immense surpluses which no extravagances of the spending committees could exhaust. Duties few, small, and comparatively inexpensive of collection would afford abundant revenues for the efficient conduct of the government, besides comporting much more evidently with economy in financial administration. Of course, if vast revenues pour in over the barriers of an exacting and exorbitant tariff, amply sufficient revenues would flow in through the easy conduits of moderate and simple duties. The object of our financial policy, however, has not been to equalize receipts and expenditures, but to foster the industries of the country. The Committee of Ways and Means, therefore, do not concern themselves directly with regulating the income of the government—they know that that, in every probable event, will be more than sufficient—but with protecting the interests of the manufacturers as affected by the regulation of the tariff. The resources of the government are made incidental to the industrial investments of private citizens.

This evidently constitutes a very capital difference between the functions of the Chancellor of the Exchequer and those of our Committee of Ways and Means. In the policy of the former the support of the government is everything; with the latter the care of the industries of the country is the beginning and the end of duty. In the eyes of parliament enormous balances represent ignorant or improper management on the part of the ministers, and a succession of them is sure to cast a cabinet from office, to the lasting disgrace of the Chancellor of the Exchequer; but to the mind of Congress vast surpluses are indicative of nothing in particular. They indicate of course abundant returns from the duties, but the chief concern is, not whether the duties are fruitful, but whether they render the trades prosperous. Commercial interests are the essential consideration; excess of income is a matter of comparative indifference. The points of view characteristic of the two systems are thus quite opposite: the Committee of Ways and Means subordinates its housekeeping duties to its much wider extra-governmental business; the Chancellor of the Exchequer subordinates everything to economical administration.

This is evidently the meaning of the easy sovereignty, in the practice of the House, of questions of supply over questions of revenue. It is imperative to grant money for the support of the government, but questions of revenue revision may be postponed without inconvenience. The two things do not necessarily go hand in hand, as they do in the Commons. The reports of the Committee of Ways and Means are matters of quite as high privilege as the reports of the Committee on Appropriations, but they by no means stand an equal chance of gaining the consideration of the House and reaching a passage. They have no inseparable connection with the annual grants; the needed supplies will be forthcoming without any readjustments of taxation to meet the anticipated demands, because the taxes are not laid in the first instance with reference to the expenses which are to be paid out of their proceeds. If it were the function of the Committee of Ways and Means, as it is of the Chancellor of the Exchequer, to adjust the revenue to the expenditures, their reports would be as essential a part of the business of each session as are the reports of the Committee on Appropriations; but their proposals, occupying, as they do, a very different place in legislation, may go to the wall just as the proposals of the other Committees do at the demand of the chairman of the great spending Committee. The figures of the annual grants do not run near enough to the sum of the annual receipts to make them at all dependent on bills which concern the latter.

It would seem that the supervision exercised by Congress over expenditures is more thorough than that which is exercised by the Commons in England. In 1814 the House created a Standing Committee on Public Expenditures whose duty it should be "to examine into the state of the several public departments, and particularly into laws making appropriations of money, and to report whether the moneys have been disbursed conformably with such laws; and also to report from time to time such provisions and arrangements as may be necessary to add to the economy of the departments and the accountability of their officers;" but this Committee stood as the only committee of audit for but two years. It was not then abolished, but its jurisdiction was divided amongst six other Committees on Expenditures in the several departments, to which was added in 1860 a seventh, and in 1874 an eighth. There is thus a separate Committee for the audit of the accounts of each of the executive departments, beside which the original single Committee on Public Expenditures stands charged with such duties as may have been left it in the general distribution.[31] The duties of these eight Committees are specified with great minuteness in the rules. They are "to examine into the state of the accounts and expenditures respectively submitted to them, and to inquire and report particularly," whether the expenditures of the respective departments are warranted by law; "whether the claims from time to time satisfied and discharged by the respective departments are supported by sufficient vouchers, establishing their justness both as to their character and amount; whether such claims have been discharged out of funds appropriated therefor, and whether all moneys have been disbursed in conformity with appropriation laws; and whether any, or what, provisions are necessary to be adopted, to provide more perfectly for the proper application of the public moneys, and to secure the government from demands unjust in their character or extravagant in their amount." Besides exercising these functions of careful audit, they are, moreover, required to "report from time to time" any plans for retrenchment that may appear advisable in the interests of economy, or any measures that may be necessary to secure greater efficiency or to insure stricter accountability to Congress in the management of the departments; to ferret out all abuses that may make their appearance; and to see to it that no department has useless offices in its bureaux, or over or under-paid officers on its rolls.

But, though these Committees are so many and so completely armed with powers, indications are not wanting that more abuses run at large in the departments than they, with all their eyes, are able to detect. The Senate, though it has no similar permanent committees, has sometimes discovered dishonest dealings that had altogether escaped the vigilance of the eight House Committees; and even these eight occasionally, by a special effort, bring to light transactions which would never have been unearthed in the ordinary routine course of their usual procedure. It was a select committee of the Senate which, during the sessions of the Forty-seventh Congress, discovered that the "contingent fund" of the Treasury department had been spent in repairs on the Secretary's private residence, for expensive suppers spread before the Secretary's political friends, for lemonade for the delectation of the Secretary's private palate, for bouquets for the gratification of the Secretary's busiest allies, for carpets never delivered, "ice" never used, and services never rendered;[32] although these were secrets of which the honest faces of the vouchers submitted with the accounts gave not a hint.

It is hard to see how there could have been anything satisfactory or conclusive in the annual supervision of the public accounts during any but the latest years of this system of committee audit. Before 1870 our national book-keeping was much like that still in vogue in France. Credits once granted ran on without period until they were exhausted. There were always unexpended balances to confuse the accounts; and when the figures of the original grants had been on a too generous scale, as was often the case, these balances accumulated from year to year in immense surpluses, sometimes of many millions, of whose use no account was given, and which consequently afforded means for all sorts of extravagance and peculation. In 1870 this abuse was partially corrected by a law which limited such accumulations to a period of two years, and laid hands, on behalf of the Treasury, on the $174,000,000 of unexpended balances which had by that time been amassed in the several departments; but it was not till 1874 that such a rule of expenditure and accounting was established as would make intelligent audit by the Committees possible, by a proper circumscription of the time during which credits could be drawn upon without a regrant.[33]

Such is a general view, in brief and without technical detail, of the chief features of our financial system, of the dealings of Congress with the questions of revenue, expenditure, and supply. The contrast which this system offers to the old-world systems, of which the British is the most advanced type, is obviously a very striking one. The one is the very opposite of the others. On the one hand is a financial policy regulated by a compact, coöperative ministry under the direction of a representative chamber, and on the other hand a financial policy directed by the representative body itself, with only clerical aid from the executive. In our practice, in other words, the Committees are the ministers, and the titular ministers only confidential clerks. There is no concurrence, not even a nominal alliance, between the several sections of this committee-ministry, though their several duties are clearly very nearly akin and as clearly mutually dependent. This feature of disintegration in leadership runs, as I have already pointed out, through all our legislation; but it is manifestly of much more serious consequence in financial administration than in the direction of other concerns of government. There can be no doubt that, if it were not for the fact that our revenues are not regulated with any immediate reference to the expenditures of the government, this method of spending according to the suggestions of one body, and taxing in obedience to the suggestions of another entirely distinct, would very quickly bring us into distress; it would unquestionably break down under any attempt to treat revenue and expenditure as mutually adjustable parts of a single, uniform, self-consistent system. They can be so treated only when they are under the management of a single body; only when all financial arrangements are based upon schemes prepared by a few men of trained minds and accordant principles, who can act with easy agreement and with perfect confidence in each other. When taxation is regarded only as a source of revenue and the chief object of financial management is the graduation of outlays by income, the credit and debit sides of the account must come under a single eye to be properly balanced; or, at the least, those officers who raise the money must see and be guided by the books of those who spend it.