astoundingly, the united states had no federal budget -- 6/22/16

Today's selection -- from The William Howard Taft Presidency by Lewis Gould. In the early 1900s, the United States federal government still had no budgeting process, though President Will Taft tried to introduce one as he dealt with the budget deficit he inherited from his predecessor, Theodore Roosevelt. In fact, Congress actively resisted such a process:

"[President] Taft sought in a determined manner to trim federal spending throughout his term. During [Theodore] Roosevelt's last full year in office, the deficit reached $57 million. In 1909, the red ink totaled more than $89 million. With customs revenues down because of the Panic of 1907, Taft looked to the [new] Payne-Aldrich tariff to increase receipts. Once in office, the president pushed his budget-cutting agenda. In his first annual message, he wrote that 'perhaps the most important question presented to the Administra­tion is that of economy in expenditures and sufficiency of revenue.' He warned of a deficit in 1910 in excess of $73 million and recounted that he had 'directed the heads of Departments in their preparation of their estimates to make them as low as possible consistent with imperative government necessity.' In the case of the military services, Taft sought 'a reduction of ten millions in the Navy and as much more in the Army.' The cabinet, under the lead of the treasury secretary, went over appropria­tions requests in July 1909 and cut costs by $50 million. By the time the president sent his message to Capitol Hill, the amount of savings stood at nearly $43 million, with a budget surplus projected for 1911.

"Taft realized that the federal government had no budget mechanism to keep revenues and spending in balance. The executive branch did not have the means to decide what the government ought to spend each year and no weapons to compel Congress to go along. Clearly, the govern­ment needed a way to manage its finances, but there was strong resistance among lawmakers to any attempt to interfere with their historical control of the federal purse. ...

"The legislative branch did agree to allocate funds to the president for a survey on how government spending might be trimmed in the interest of 'greater efficiency and economy' ... [which resulted in] a five-member committee that was dubbed the Commission on Economy and Efficiency. ...

"The commission conducted an extensive inquiry into every phase of the workings of the executive departments. They recommended combining agencies for greater efficiency. Among the most controversial of their suggestions were consolidating agencies within the Treasury Department and the combining of the Navy and War Departments into a single Defense Department. Once the president had control over the budget and a workable bureaucratic structure for the executive, the White House could set policy and then carry it out in practice. The work of the commission led Taft to create a budget system of his own in 1911. He instructed agencies and departments to obey his instructions in framing their appropriation requests for the following year.

"Taft formally presented the case for a federal budget to Congress in June 1912 in a lengthy message transmitting the findings of the commission on that point. Lawmakers answered by amending the 1912 appropriations bill to forbid the president from taking the actions Taft had instituted and to instruct the executive agencies to oppose what the president had ordered. For their part, the cabinet secretaries exploited to the fullest the discretion that Taft gave them about running their departments. They responded slowly to presidential directives, and as the administration wound down in 1912, they tried to run out the clock with their agency's power undiminished. Although Taft claimed that it was 'entirely competent for the President to submit a budget,' he failed to persuade Congress of the wisdom of what he and the efficiency commission had sought to accomplish. The most he could do was to set precedents on which subsequent budget reformers would capitalize."


Lewis L. Gould


The William Howard Taft Presidency


University Press of Kansas


2009 by the University Press of Kansas


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