17.4

22.8 28.6

34.8

41.2

8.5

8.5

8.5

8.5

8.5

8.5 FEDERAL PAYMENT

Senator PROXMIRE. Of course that is not our function, but I would like to see it, because it gives us some idea of how realistic it may be. At least it gives us a chance to make a judgment on that. Then you have Federal payment proposed legislation, $30.6 million.

Mr. FLETCHER. Yes, sir. This is based on the 30 percent formula that we proposed last year and are proposing again this year, plus some broadening of the base on which 30 percent would be applied. Senator PROXMIRE. Last year that was proposed and it was not adopted.

Mr. FLETCHER. That is correct, sir.

Senator PROXMIRE. There will be a lot of resistance this year as I understand it in the Congress.

Mr. FLETCHER. I hope not.

Senator PROXMIRE. I do not indicate I have taken a position on this. I have not had a chance to really explore it but it is my understanding that that may be somewhat difficult, so you may have a problem in achieving your budget aims. I suppose you are familiar with that possibility?

Mr. FLETCHER. Yes, sir.

NONADOPTION OF PLANNING, PROGRAMING, BUDGETING SYSTEM

Senator PROXMIRE. Along that line, I would like to ask you particuarly about the failure of the District to adopt the planning, programing, budgeting system that was recommended by President Johnson in 1965 to all the major agencies, and all of them have it to some extent now, 25 of them have it. I have a letter indicating that the District is gradually, slowly beginning to move in this direction and is looking for more financing so it can do it. But it seems to me that it is very hard for this committee, if it agrees with your objectives in getting these additional funds, to make an effective fight in the Congress for them, if we cannot have the kind of analysis, backing up your plea for more money that other departments are now developing. No. 1, so you can identify the objectives that you seek to satisfy with funds, and a record. No. 2, that you have considered alternatives and present to us what these alternatives are. No. 3, so that you can indicate the basis for your choosing the alternative you did, and why this is the cheapest way to achieve the objective or the least expensive, and No. 4, that you have some kind of followup.

I have a study here that shows a number of cities that have adopted this very constructively.

They think it is a program that saves them a lot of money. These are just a few of the cities that have adopted it, some of the biggest and smallest States in the Union, and my State is included, have adopted this system.

Just yesterday the United Press had a story, "U.S. Budget Waste." Ten to thirty billion dollars a year, spending by a hunch, pork barrel and a prayer. Refers to the absence of the kind of analysis to which I refer. This is a controversial kind of an approach. Some economists do not like it, some do, but I think whatever its shortcomings, it is bound to improve our understanding of the choices made, and sharpen the basis for our selection, and it seems to me it saves some money.

FEDERAL PAYMENT

Senator PROXMIRE. Of course that is not our function, but I would like to see it, because it gives us some idea of how realistic it may be. At least it gives us a chance to make a judgment on that. Then you have Federal payment proposed legislation, $30.6 million.

Mr. FLETCHER. Yes, sir. This is based on the 30 percent formula that we proposed last year and are proposing again this year, plus some broadening of the base on which 30 percent would be applied. Senator PROXMIRE. Last year that was proposed and it was not adopted.

Mr. FLETCHER. That is correct, sir.

Senator PROXMIRE. There will be a lot of resistance this year as I understand it in the Congress.

Mr. FLETCHER. I hope not.

Senator PROXMIRE. I do not indicate I have taken a position on this. I have not had a chance to really explore it but it is my understanding that that may be somewhat difficult, so you may have a problem in achieving your budget aims. I suppose you are familiar with that possibility?

Mr. FLETCHER. Yes, sir.

NONADOPTION OF PLANNING, PROGRAMING, BUDGETING SYSTEM

Senator PROXMIRE. Along that line, I would like to ask you particuarly about the failure of the District to adopt the planning, programing, budgeting system that was recommended by President Johnson in 1965 to all the major agencies, and all of them have it to some extent now, 25 of them have it. I have a letter indicating that the District is gradually, slowly beginning to move in this direction and is looking for more financing so it can do it. But it seems to me that it is very hard for this committee, if it agrees with your objectives in getting these additional funds, to make an effective fight in the Congress for them, if we cannot have the kind of analysis, backing up your plea for more money that other departments are now developing. No. 1, so you can identify the objectives that you seek to satisfy with funds, and a record. No. 2, that you have considered alternatives and present to us what these alternatives are. No. 3, so that you can indicate the basis for your choosing the alternative you did, and why this is the cheapest way to achieve the objective or the least expensive, and No. 4, that you have some kind of followup.

I have a study here that shows a number of cities that have adopted this very constructively.

They think it is a program that saves them a lot of money. These are just a few of the cities that have adopted it, some of the biggest and smallest States in the Union, and my State is included, have adopted this system.

Just yesterday the United Press had a story, "U.S. Budget Waste." Ten to thirty billion dollars a year, spending by a hunch, pork barrel and a prayer. Refers to the absence of the kind of analysis to which I refer. This is a controversial kind of an approach. Some economists do not like it, some do, but I think whatever its shortcomings, it is bound to improve our understanding of the choices made, and sharpen the basis for our selection, and it seems to me it saves some money.

It does require, of course, a real appreciation of its limitations, and I would like to hear your response as to why the District has made to me such a feeble advance in this area compared with some other agencies.

DEVELOPMENT OF PROGRAM BUDGET FOR DISTRICT

Mr. FLETCHER. Yes, sir; I agree with you completely in terms of the need for program budgeting. You will recall the testimony I gave you last year. You raised that question with us last year. At that time I indicated to you, Mr. Sutton to my right had been loaned to us by the Bureau of the Budget. Mr. Sutton is now a full member of our staff. He is head of the Department of the Budget. To my left is Mr. Bob Rusin who has also been hired, who is specifically responsible for the programing budgets of the District of Columbia. We are moving very rapidly in developing a program budget for the District of Columbia. It should have been done years ago. I do not question that at all. We became quite aware of it, not only for your analysis where the Congress is concerned, but really more important for our own analysis in running a city of this type, and determining the needs and programs by which we can reach those needs. We are beginning this year for the first time to develop program budget concepts. I have no excuse for the fact that it has not been before, but I can indicate to you now we are moving very rapidly into the program budget concepts.

Senator PROXMIRE. I would like to say something which may or may not give you an incentive. I hope it does. I think Congress has been very remiss in not taking the material available and using it. As long as I am chairman of this subcommittee I intend to do that. I intend to get hold of these program memorandums, for example, the issue letters, the other documents and data, and use that as extensively as I can on the floor, as well as with other members of the committee. I think that you are going to greatly strengthen the case that can be made.

Would you gentlemen like to speak briefly on this, indicate what progress you feel you are making, and when program memorandums, for example, could be available to this committee?

Mr. SUTTON. I will be glad to, Senator. We are going to welcome your support in our efforts to achieve a program budget system for the District. As Mr. Fletcher indicates, I was borrowed from the Bureau of the Budget last year to help design a program.

WITNESS FORMER POSITION WITH BUDGET BUREAU

Senator PROXMIRE. What was your position in the Bureau of the Budget?

Mr. SUTTON. I had been with the Bureau of the Budget 26 years. Twenty years ago I was in charge of helping to implement the Hoover recommendations for performance budgets. I have been very closely associated with the PPB developments in about 15 or so Federal agencies when I was head of the divisions that handled a substantial part of the President's budget for a period of about 10 years.

As a matter of fact, 3 years ago President Johnson urged the District to develop a PPB program budget system, at about the time he