CONCLUSION

THE history of public finance reveals at least one certain fact: the ever-increasing amount of public expenditure.1

It is unfortunate, therefore, that much theoretical discussion of the budget and practically all political effort is directed to changing this adamantine fact of the history of public finance. Strenuous and persistent efforts are being made to reduce, in all political units, the amount of public expenditure. Public men elected on political platforms pledged to reduce the amount of public expenditure have come and have gone, but the tendency continues unabated. The whole cry of economy so far as it means merely less public expenditure is futile. Parsimony stalks about in the habiliments of true economy.

The fact of the ever-increasing amount of public expenditure may be viewed in this light: that people are increasingly paying from their social pocketbooks for services that they formerly paid for from their individual pocketbooks. The attempt in itself to reduce the amount of public expenditure may be regarded, therefore, as an effort to have people do things

1 One may increase taxes in proportion to the liberty of the subjects; and one is forced to moderate them pari passu with augmentation of servitude. This always has been the case and always will be. It is a law of nature which never varies.— Montesquieu.

individually rather than collectively, and to pay for these things personally rather than socially. The problem is, therefore, a fundamental social problem, if not the fundamental social problem.

This book frankly recognizes and accepts the fact of the ever-increasing amount of public expenditure. It concerns itself, however, with outlining a budget procedure that will make possible a hundred cents in service for each dollar of public funds expended, whatever the amount expended. It is clearly recognized, on the other hand, that this result is dependent upon other facts besides a good budget procedure, e. g., trained public servants. This explains the emphasis throughout the book on the administrative side of gov

ernment.

Our discussion of the budget was directed, not to a reduction of the amount of public expenditure, but to the wise determination of the amount of public funds to be expended. This principle was laid down as a

test:

Social energy as expressed in public funds must secure in terms of social welfare results greater than the same expenditure privately made.

The determination of the amount of public expenditure is not a financial problem at all but a political and social one. It finds its explanation not in terms of money but in terms of social conditions and of organized social effort to improve these conditions. Its most obvious phase on the political side is the expanding functions of government. As thus expressed, there is brought more sharply into relief the important political problem which the American democracy has

not yet solved: the budget problem. And until we change our point of view, we are not going to solve it at all.

As a nation, we must see that the budget is not merely a problem of finance, it is not merely a prob'lem of arithmetic, it is not merely a problem of accounting, though it has important financial and accounting aspects. We must see that the budget problem is primarily a politico-social problem going to the very essence of social well-being.

A budget system is proposed in keeping with the representative character of our democracy. A practical budget procedure is outlined within the present limits of our government and within its present character. The changes required by the proposed budget procedure may be accomplished almost entirely by administrative changes, though some legislative action will be required. There is no need for constitutional amendments. The so-called "executive budget” program proposes a shifting of the center of gravity of our government. Its tendency is toward autocratic executive power. It would achieve this change in government as a by-product to the budget scheme. far as the executive budget plan aims to secure or as it implies parliamentary government, the American people will want to decide that question as such, and not camouflaged under the name of "executive budget."

So

The budget procedure outlined in this book aims at a fuller recognition of the democratic features of our government, particularly of the legislature. It assigns to the legislature the duties in budget-making

which our public law declares belong to the legislature and not to the executive, it subordinates the administration to the legitimate control of the legislature but it frees the administration from improper control and permits it to develop the positive and constructive side of public service.

Briefly, then, the social implications of the budget must be paramount. The accounting and financial aspects of the budget must be recognized and utilized in conformity with the social purposes of the budget, but must be kept subordinate. The budget is the fundamental political problem and the procedure for budget-making must reënforce the democratic features of our government.

This conception can be carried into effect under present conditions without any serious changes in our political system by a budget procedure based on the. following principle:

That the function of the administration, including the executive, in budget-making is preliminary, preparatory, advisory, and the function of the legislature is determining and conclusive.

The budget procedure outlined in this book is in accord with this principle and is based on the social conception of the budget. This procedure may be briefly outlined as follows:

The whole governmental administrative machinery shall, in the first instance, be utilized in the preparation of the budget-proposals. Each subdivision of each of the departments shall organize its experience in terms of budget proposals for submission to the departmental heads. This is true in all governmental agencies.

The department heads review these bureau estimates in the light both of his experience and of his judgment and passes the result along.

In the executive departments these estimates go to the executive; in the judicial, they go to the highest court or to the Chief Justice; in the legislature, they go usually to the presiding officers of the legislative bodies. It is pointed out that the estimates for what are properly called administrative commissions, are not properly reviewable by the Executive, but that the recommendation by the commissioners should go to the legislature without review. The principal reason for this is that these administrative commissions because of their judicial functions should be treated as courts are, and because their functions are quasi-legislative, their natural relationship is with the legislature rather than with the executive.

The departmental estimates are reviewed, as noted, by the highest political officer of the department. He must express the sense of proportion, correct any bureaucratic tendency of the administration, supplement the narrowness of administrative experience by the public's point of view, and the social point of view, and determine what expansion of the work or organization of the public agency shall be recommended to the legislature.

For convenience, the estimate of the courts, the legislature and administrative commission are sent to the Executive to be transmitted with the estimates for executive departments. It would do no harm for the Executive to make memorandum comments and rec