Hostname: page-component-848d4c4894-2pzkn Total loading time: 0 Render date: 2024-05-26T04:10:18.953Z Has data issue: false hasContentIssue false

Congress and the Establishment of a National Budget System in the United States during the Progressive Era

Published online by Cambridge University Press:  01 March 2023

JAMES V. SATURNO*
Affiliation:
Washington, DC

Abstract

In order to establish a new national budget system during the Progressive Era, Congress had to overcome an earlier convention in which it used detailed appropriations in an attempt to control the budgetary actions of federal agencies and the president served no formal role. Incremental changes to strengthen congressional budgetary controls proved inadequate but provided reformers with an opportunity to supplant the existing orthodoxy, resulting in the Budget and Accounting Act of 1921. Although most studies have focused on the Act in terms of its effects on presidential power and presidential/congressional relations, this study focuses on congressional actions and debates to show how reform was rooted in long-standing congressional concerns about the need to control agency budgetary actions and was understood at the time as a culmination of those efforts, not simply as a case of Congress enhancing presidential power at its own expense.

Type
Article
Copyright
© Donald Critchlow and Cambridge University Press, 2023

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

An earlier version of this paper was prepared for the 2019 meeting of the Southern Political Science Association. Mr. Saturno is employed as a Specialist on Congress and the Legislative Process at the Congressional Research Service. The views expressed in this paper are those of the author and are not presented as those of the Congressional Research Service or the Library of Congress. His affiliation with Congressional Research Service is noted here solely for purposes of identification.

References

Notes

1. Pious, Richard M., The American Presidency (New York: Basic Books, 1979), 256 Google Scholar.

2. Pub. L. No. 67-13, 42 Stat. 20.

3. Schickler, Eric, Disjointed Pluralism (Princeton, NJ: Princeton University Press, 2001), 5Google Scholar.

4. Skowronek, Stephen, Building a New American State (New York: Cambridge University Press, 1982), 4CrossRefGoogle Scholar.

5. Skowronek, Building a New American State, 186–209.

6. Kiewiet, D. Roderick and McCubbins, Mathew D., The Logic of Delegation: Congressional Parties and the Appropriations Process (Chicago: University of Chicago Press, 1991), 3 Google Scholar.

7. Dearborn, John A., “The “Proper Organs” for Presidential Representation: A Fresh Look at the Budget and Accounting Act of 1921,” Journal of Policy History 31, no. 1 (2019): 4 CrossRefGoogle Scholar.

8. Dearborn, The “Proper Organs,” 5.

9. As discussed in Sundquist, James L., The Decline and Resurgence of Congress (Washington, DC: The Brookings Institution, 1981), 3944 Google Scholar.

10. Dearborn, 5–6.

11. Kahn, Jonathan, Budgeting Democracy (Ithaca, NY: Cornell University Press, 1997), 7Google Scholar.

12. For general background on governance during this period, see Keller, Morton, Affairs of State (Cambridge: Belknap Press, 1977)CrossRefGoogle Scholar and White, Leonard D., The Republican Era: 1869-1901 (New York: Macmillan, 1958)Google Scholar.

13. Krause, George A. and Jin, Roger Qiyuan, “Organizational Design and Its Consequences for Administrative Reform: Historical Lessons from the U.S. Budget and Accounting Act of 1921,” Governance 33, no. 2 (2020): 365–84CrossRefGoogle Scholar.

14. Haber, Samuel, Efficiency and Uplift: Scientific Management in the Progressive Era, 1890-1920 (Chicago: University of Chicago Press, 1964), xi Google Scholar.

15. Cleveland, Frederick A. in Dartmouth College, Addresses and Discussion at the Conference on Scientific Management Held October 12, 13, 14, 1911 (Hanover: Dartmouth College, 1912) 314 Google Scholar, quoted in Haber, 113.

16. Fleischman, Richard K. and Marquette, R. Penny, “The Origins of Public Budgeting: Municipal Reformers during the Progressive Era,” Public Budgeting and Finance 6, no. 1 (Spring 1986): 7177 CrossRefGoogle Scholar.

17. Wander, W. Thomas, “Patterns of Change in the Congressional Budget Process, 1865-1974,” Congress and the Presidency 9, no. 2 (Autumn 1982): 23 Google Scholar.

18. Brady, David and Morgan, Mark A., “Reforming the Structure of the House Appropriations Process: The Effects of the 1885 and 1919-20 Reforms on Money Decisions,” in Congress: Structure and Policy, ed. McCubbins, Matthew D. and Sullivan, Terry (New York: Cambridge University Press, 1987) 207–34Google Scholar; Stewart, Charles H., Budget Reform Politics (New York: Cambridge University Press, 1989)CrossRefGoogle Scholar; Schickler, Eric and Sides, John, “Intergenerational Warfare: The Senate Decentralizes Appropriations,” Legislative Studies Quarterly 25, no. 4 (November 2000): 551–75CrossRefGoogle Scholar.

19. Gailmard, Sean and Patty, John W., Learning While Governing: Expertise and Accountability in the Executive Branch (Chicago: University of Chicago Press, 2013), 168 CrossRefGoogle Scholar.

20. Although the earliest congresses had appropriated in lump sums, Congress developed the practice of detailed appropriations “because it is the only practicable way that it has discovered by which it can exercise its function … of supervising and controlling the manner in which the executive performs its duties.” William F. Willoughby, “Allotment of Funds by Executive Officials: An Essential Feature of Any Correct Budgetary System,” The American Political Science Review, Supplement: Proceedings of the American Political Science Association, Ninth Annual Meeting (February 1913): 80.

21. Wilson, Woodrow, Congressional Government: A Study in American Politics (Boston: Houghton Mifflin, 1885, 1913), 180 Google Scholar.

22. Caiden, Naomi, “Paradox, Ambiguity, and Enigma: The Strange Case of the Executive Budget and the United States Constitution,” Public Administration Review 47, no. 1 (January/February 1987): 84 CrossRefGoogle Scholar.

23. The term “coercive” refers to agencies effectively “coercing” Congress into enacting additional appropriations to cover the deficiencies incurred. See Wilmerding, Lucius, The Spending Power: A History of the Efforts of Congress to Control Expenditures (New Haven, CT: Yale University Press, 1943), chap. 7, 137–53Google Scholar; Fisher, Louis, Presidential Spending Power (Princeton, NJ: Princeton University Press, 1975), 232 Google Scholar.

24. For examples, see Fitzpatrick, Edward A., Budget Making in a Democracy (New York: Macmillan, 1918)Google Scholar; Frank J. Goodnow, “The Limit of Budgetary Control,” The American Political Science Review, Supplement: Proceedings of the American Political Science Association, Ninth Annual Meeting (February 1913); Willoughby, William F., The Problem of a National Budget (New York: Appleton, 1918)Google Scholar.

25. Stewart, Budget Reform Politics, 168–71.

26. Collins, Charles Wallace, The National Budget System (New York: Macmillan, 1917), 3 Google Scholar.

27. Including efforts by Presidents John Quincy Adams, Van Buren, Tyler, Polk, Buchanan, Grant, and Cleveland described in Fisher, Presidential Spending Power, 10.

28. Budget of the United States, FY2023-Historical Tables, Table 1. 1: Summary of Receipts, Outlays, and Surpluses or deficits: 1789–2027, https://www.whitehouse.gov/omb/budget/historical-tables/.

29. Annual Report of the Secretary of the Treasury on the State of the Finances for the Fiscal Year Ended June 30, 1908 (Washington, DC: Government Printing Office, 1908), 86.

30. Annual Report of the Secretary of the Treasury on the State of the Finances for the Fiscal Year Ended June 30, 1909 (Washington, DC: Government Printing Office, 1909), 5.

31. Pub. L. No. 59-267, 34 Stat. 448.

32. Although antideficiency legislation dates back to 1870, the 1905 act (Pub. L. No. 58-217, 33 Stat. 1214, at 1257) established a clear mandate for agencies to apportion funds to prevent premature exhaustion of funds and a need for deficiency or supplemental appropriations. This requirement was supplemented in 1906 by further legislation to limit waivers and exceptions (Pub. L. No. 59-28, 34 Stat. 27, at 48). Fisher, Presidential Spending Power, 233–35.

33. Wilmerding, The Spending Power, 146.

34. Pub. L. No. 60-328, 35 Stat. 1027.

35. Adams, Henry, “Problems of Budgetary Reform,” Journal of Political Economy 27, no. 8 (October 1919): 637 CrossRefGoogle Scholar.

36. Kraines, Oscar, “The President versus Congress: The Keep Commission, 1905-1909,” Western Political Quarterly 23, no. 1 (March 1970): 554 Google Scholar; Moe, Ronald, Administrative Renewal, Reorganization Commissions in the 20th Century (Lanham, MD: University Press of America, 2003)Google Scholar.

37. Pub. L. No. 60-328, 35 Stat. 1027.

38. 45 Cong. Rec. 7656 (June 10, 1910) (statement of Sen. Hale).

39. 45 Cong. Rec. 7656 (June 10, 1910) (statement of Sen. Bristow).

40. 45 Cong. Rec. 7657 (June 10, 1910) (statement of Sen. Bristow).

41. 45 Cong. Rec. 7656 (June 10, 1910) (statement of Sen. Hale).

42. Pub. L. No. 61-266, 36 Stat. 703.

43. Moe, Administrative Renewal, 32.

44. Rubin, Irene S., “Who Invented Budgeting in the United States?Public Administration Review 53, no.5 (September/October 1993): 438–44CrossRefGoogle Scholar.

45. Jonathan Kahn, Budgeting Democracy, 152.

46. U.S. Commission on Economy and Efficiency, The Need for a National Budget, transmitted with presidential Message to Congress, H. Doc. 854, 62d Cong., 2d Sess. (June 27, 1912). The Commission also produced numerous other studies, the great majority of which was agency specific or addressed management process issues, such as personnel or financial practices. Moe, Administrative Renewal, 35

47. Moe, Administrative Renewal, 221.

48. Moe, Administrative Renewal, 10.

49. Moe, Administrative Renewal, 137.

50. Kahn, Budgeting Democracy, 162.

51. McCaffery, Jerry L., “The Development of Public Budgeting in the United States” in A Centennial History of the American Administrative State, ed. Chandler, Ralph Clark (New York: Free Press, 1987), 362 Google Scholar.

52. Caiden, “Paradox, Ambiguity, and Enigma,” 84.

53. Message of the President of the United States submitting for the consideration of the Congress, a budget with supporting memoranda and reports, S. Doc. 1113, 62d Cong., 3d Sess., February 26, 1913.

54. Pub. L. No. 62-299, 37 Stat. 415. Hostility towards the Commission can also be found in Hearings Before the Subcommittee of House Committee on Appropriations in Charge of Sundry Civil Appropriations Bill for 1914 relating to The President’s Commission on Economy and Efficiency, 62d Cong., 3d Sess. (January 13, 1913).

55. Buck, Arthur E., “The Development of the Budget Idea in the United States,” Annals of the American Academy of Political and Social Science 113 (May 1924): 332 Google Scholar.

56. The Committees on Agriculture, Foreign Affairs, Military Affairs, Naval Affairs, Post Offices and Post Roads, Rivers and Harbors, and Indian Affairs.

57. For a statement by Representative Sherley discussing his proposal in detail, see 49 Cong. Rec. 4349–55 (February 28, 1913) (statement of Rep. Sherley).

58. 49 Cong. Rec. 4351 (February 28, 1913) (statement of Rep. Sherley). Variations of Sherley’s proposal for a committee that would set a top line for appropriators would resurface on several occasions, most notably in the legislative budget provisions of the Legislative Reorganization Act of 1946 (Pub. L. No. 79-601, 60 Stat. 812) and the concurrent resolution on the budget in the Congressional Budget Act of 1974 (Pub. L. No. 93-344, 88 Stat 297).

59. Skowronek, Building a New American State, 194, citing Bess Gordon, “History of the Commission on Economy and Efficiency” (Paper presentation, National Archives Seminar, June 8, 1956, National Archives Catalogue, Washington, DC).

60. For example, see Cleveland, Frederick A., “Evolution of the Budget Idea in the United States,” Annals of the American Academy of Political and Social Science, 62 (November 1915): 1535 CrossRefGoogle Scholar.

61. For examples of Willoughby’s and Goodnow’s writing on budgeting issues, see Willoughby, William F., The Movement for Budgetary Reform in the United States (New York: Appleton, 1918)Google Scholar; Goodnow, Frank J., “The Limit of Budgetary Control,” The American Political Science Review, Supplement: Proceedings of the American Political Science Association, Ninth Annual Meeting (February 1913): 6877 Google Scholar.

62. Critchlow, Donald T., The Brookings Institution, 1916-1952 (DeKalb: Northern Illinois University Press, 1985), 2840 Google Scholar and Fred Dews, “Brookings’s Role in ‘The Greatest Reformation in Governmental Practices’—The 1921 Budget Reform,” Brookings Now, October 12, 2016, https://www.brookings.edu/blog/brookings-now/2016/10/12/brookings-role-in-1921-budget-reform/.

63. Johnson, Donald B., National Party Platforms (revised edition), Vol. 1, 1840-1956 (Urbana: University of Illinois Press, 1978), 206 Google Scholar.

64. Johnson, National Party Platforms, 199.

65. Cleveland, Frederick A. and Buck, Arthur E., The Budget and Responsible Government (New York: Macmillan, 1920), 363 Google Scholar.

66. Cleveland and Buck, The Budget and Responsible Government, 361.

67. FY1917 ended with expenditures of $1,954 million and a deficit of $853 million, FY1918 ended with $12,677 million in expenditures and a $9,032 million deficit, and FY1919 ended with $18,493 million in expenditures and a $13,363 deficit. Budget of the United States-Historical Tables.

68. Critchlow, The Brookings Institution, 37.

69. Wilmerding, The Spending Power, 155.

70. Wilmerding, The Spending Power, 164.

71. U.S. House of Representatives, Select Committee on the Budget, Hearings Before the Select Committee on the Budget on the Establishment of a National Budget System, 66th Cong., 1st Sess., 65 (September 22, 1919) (statement of William F. Willoughby).

72. Hearings on the Establishment of a National Budget System.

73. Hearings on the Establishment of a National Budget System, 474.

74. 58 Cong. Rec. 7083 (daily ed. Oct. 17, 1919) (statement of Rep. Good).

75. H. Rep. No. 66-362 (1919), at 5.

76. H. Rep. No. 66-362, at 6.

77. H. Rep. No. 66-362, at 9.

78. Cleveland and Buck, The Budget and Responsible Government, 375.

79. 58 Cong. Rec. 7084 (October 17, 1919) (statement of Rep. Good).

80. 58 Cong. Rec. 7086 (October 17, 1919) (statement of Rep. Byrns).

81. 58 Cong. Rec. 7101 (October 17, 1919) (statement of Rep. French).

82. 58 Cong. Rec. 7297 (October 21, 1919). Vote counts in this era often do not provide a true measure of total support and opposition to a question because they typically include a large number of Members (in both the House and Senate) identified in roll-call votes as “not voting.” This frequently was due to the practice of pairing. Although not common in current practice, a “live” pair involves an announcement of an agreement between one Member who is present and another on the opposite side of the question, who is absent, that neither of them is recorded for purposes of a specific roll-call vote. For a “dead” pair, neither Member is present, but they may have indicated their respective preference beforehand. For a “general” pair, Members are listed in the Congressional Record as not voting without an indication of their positions.

83. For example, McCormick had had Plan for a National Budget System by Charles W. Collins reprinted as a House document (H. Doc. 1006, 65th Cong., 2d Sess., Mar 27, 1918).

84. Clements, Kendrick A., “Woodrow Wilson and Administrative Reform,” Presidential Studies Quarterly 28, no. 2 (Spring 1998): 320–36Google Scholar.

85. Woodrow Wilson, “Seventh Annual Message,” in The American Presidency Project, ed. Gerhard Peters and John T. Woolley, https://www.presidency.ucsb.edu/node/207605.

86. U.S. Senate, Special Committee on the National Budget, Hearing Before the Committee on Consideration of a National Budget, 66th Cong., 2d Sess., 1920.

87. S. Rep. No. 66-524 (1920), at 1.

88. 59 Cong. Rec. 6395 (May 1, 1920).

89. S. Doc. 66-279 (1920)/H. Rep. 66-1044 (1920).

90. Cong. Rec. 7722 (May 27, 1920) and 59 Cong. Rec. 7956 (May 29, 1920), respectively.

91. 59 Cong. Rec. 8103 (June 1, 1920) (statement of Rep. Fess). See also H. Rep. 66-373 (Report of the Select Committee on the Budget).

92. Schickler, Disjointed Pluralism, 89–93.

93. 59 Cong. Rec. 8109 (June 1, 1920) (statement of Rep. Haugen).

94. 59 Cong. Rec. 8115 (June 1, 1920) (statement of Rep. Padgett).

95. 59 Cong. Rec. 8117 (June 1, 1920) (statement of Rep. Good).

96. 59 Cong. Rec. 8115 (June 1, 1920).

97. 59 Cong. Rec. 8120 (June 1, 1920).

98. 59 Cong. Rec. 8120 (June 1, 1920). The Senate did not address the recentralization issue until 1922. For a discussion of the Senate’s actions, see Schickler, Disjointed Pluralism, 93–98. Senate reconsolidation was further necessitated by House reorganization of appropriations bills (beginning with FY1923) along lines suggested by the Bureau of the Budget, which made Senate jurisdictional divisions under the old organization effectively unworkable. For more on the organization of appropriations bills and subcommittees, see James V. Saturno, Appropriations Subcommittee Structure: History of Changes from 1920 to 2021, Congressional Research Service Report RL31572, February 8, 2021.

99. Veto Message in 59 Cong. Rec. 8609 (June 4, 1920) and printed as H. Doc. 66-805.

100. 59 Cong. Rec. 8609–14 (June 4, 1920).

101. 59 Cong. Rec. 8657 (June 5, 1920).

102. Meeting of William F. Willoughby, with Harding mentioned in Report to the Trustees in Brookings Institution files, and cited in Critchlow, The Brookings Institution, 38. Although Critchlow dates the meeting as February 1920, Harding would have been President-elect in February 1921.

103. 61 Cong. Rec. 662 (April 26, 1921).

104. 61 Cong. Rec. 1092 (May 5, 1921). Although the House Select Committee on the Budget had reported H.R. 30, its own version of the budget reform bill (H. Rep. 67-14), the House took up the Senate version for consideration.

105. Correspondence of James W. Good to William H. Taft, May 19, 1921, obtained from the personal collection of James W. Good, Jr.

106. S. Doc. 67-15 /H. Rep. 67-96.

107. 61 Cong. Rec. 1783 (May 26, 1921), and 61 Cong. Rec. 1859 (May 27, 1921), respectively.

108. Krause, George A., “Solving Collective Action Problems under Separated and Shared Powers: The Benefits of Consolidating Executive Budgetary Powers, 1895-1940,” The Journal of Politics 84, no. 2 (April 2022): 753–66CrossRefGoogle Scholar.

109. Ma, Jun and Hou, Yilin, “Budgeting for Accountability: A Comparative Study of Budget Reforms in the United States during the Progressive Era and in Contemporary China,” Public Administration Review 69, Supplement (December 2009): S56 CrossRefGoogle Scholar.

110. George A. Krause and Roger Qiyuan Jin, “Organizational Design and Its Consequences for Administrative Reform: Historical Lessons from the U.S. Budget and Accounting Act of 1921.” The authors demonstrate that the new system was instrumental in improving budgetary outcomes in terms of control (reduced budget profligacy), stability (less budgetary volatility), and coherence (convergence between executive estimates and congressional appropriations). In particular, Herbert Lord, noted in the Second Annual Report of the Director of the Bureau of the Budget to the President of the United States (Washington, DC: Government Printing Office, 1923) that “The imposition of Executive pressure and more scientific estimating have practically eliminated the transmission of strictly deficiency estimates to Congress.”

111. Meyers, Roy T. and Rubin, Irene S., “The Executive Budget in the Federal Government: The First Century and Beyond,” Public Administration Review 71, no. 3 (May/June 2011): 335 CrossRefGoogle Scholar.