Evening star., 1939-02-10
D. 6. BUDGET Reform

The recommendation for divorc-
ing District estimates from Federal
Budget Bureau control as part of the
local reorganization program is one
of the most praiseworthy suggestions
in the Griffenhagen report.
In fact, the justification for it is
even stronger than the reasons given
in the report. The report suggests
that the Federal payment "be worked
out now according to whatever for
mula may seem fair-or even on a
basis of compromise-and an an
nual lump sum decided upon for a
period of (say) five years"
If this were done, the report sug-
gests, the reason for Federal budget
control based on the bearing of the
District item on the Federal financial
plan would be removed. The report
points out that reorganization of
District agencies as now proposed
would eliminate several other rea-
sons that may have existed in the
past for Federal control of local esti-
mates, and would make for simplicity
of procedure.
This is sound reasoning as far as
it goes, but it does not tell the whole
story of why there has been no justi-
fication for number of years for
interposing the Federal Budget Bu-
reau between the Commissioners and
Congress.
When the Federal bureau was Gre
ated by the Budget and Accounting
Act of 1921 the United States was
still meeting definite percentage
of the annual District appropriation
bill, as it had been doing for more
than forty years. This wise principle
OF definite proportionate payment
was source of protection to unrep-
resented WaShingtonians against
extravagant or unwise spending. 1t
meant that the Government paid a
fixed percentage of every dollar
added to the bill, and constituted a
legitimate reason why Uncle Sam
should have his national budget
officer pass on the local estimates.
1t is interesting here to recall that
when substitution of the lump sum
for the fixed ratio was proposed, one
of the arguments for the lump sum
was that Budget Bureau control of
local appropriations would be re-
moved. But when Congress, in 1924,
began departing from the fixed ratio
by making arbitrary lump sum Fed
eral payments, Budget Bureau con-
troll continued and the lump sum
decreased. Between 1924 and the
current fiscal year, the lump sum
practice was followed in violation of
the statutory fixed ratio provision,
which was not repealed until enact
ment Of the new tax bill for the
current fiscal year.
The Federal money involved in
meeting District expenses would seem
to be the only basis for Budget
Bureau scrutiny of local estimates.
Yet, by some strange paradox, the
Budget Bureau in almost every year
since 1925 has proposed changes in
every detail of the District budget
except the one item of direct concern
to the National Government-the
Federal payment.
A rare exception occurred in 1888,
when the new administration was
taking office amid wave of economy.
The local budget for 1884 was cut to
$33,000000, a reduction of more than
26 per cent below the previous years
appropriation, and the Budget Di-
rector applied that same percentage
of reduction to the Federal payment,
which brought it down from $7,775,-
600 to $5,700,000. It has since been
further reduced to $5,0OO,OOO at the
initiative of Congress. Budget Bu-
reau practice in the other years of
lump sum practice has been merely
to base each years local budget on
whatever lump sum Federal payment
Congress had fixed for the preced-
ing year. Thus, the bureau, in effect,
has been passing merely on how
much should be spent annually by
local taxpayers and how it should
be spent, leaving the one factor of
direct national interest to be deter
mined by Congress This control of
local tax expenditures by the Budget
Bureau has naturally carried with it
control over local governmental
policy, giving the Federal Budget
Bureau powerful voice in municipal
affairs never contemplated at the
time of its creation.