A Federal Case; 22

This is a federal case a weekly show that takes up an issue of government and takes a good look in Washington D.C. I am and still produce it for the national educational radio network. Are you the meanest man in town. I hope my wife doesn't seem to think so. I guess she's supposed to be the best judge. A great many people in Washington think Robert Mayo is the meanest man in town. He is director of the Bureau of the budget and his job is to make up the federal budget every year and to deal out the money during the year. Now if you go talk to people in the federal agencies like the Food and Drug Administration or Housing and Urban Development or the Office of Economic Opportunity or health education and welfare any of them. One of the first things you hear is how tight the money is on the Nixon administration that bureau of the budget they say is keeping us from doing our job. Now you're going to hear Robert Mayo talking about his job and he clearly does not think he's the meanest man in town and he doesn't think he's keeping the federal agencies from doing

their jobs. He's trying to get the best bang for the money as he puts it. His office is in that Roco building beside the White House which is called the Executive Office Building. Indeed the entire bureau of the budget is part of the executive branch of the government directly responsible to the president and directed to carry out his wishes. President Nixon is probably pleased with Robert Mayo. Mr. Mayo is not a flashy type. He has been in the government before working in the treasury for 19 years. He has also been a vice president of the Continental Illinois National Bank and Trust. So he knows about private industry too. He's a very reasonable person. He likes to use plain talk and to throw in plenty of homilies. Perhaps most of all he talks like his president does about money. He likes to mention things like a strong fiscal policy and he believes in getting private industry to do their part. First he explained some of what his bureau does.

The only thing I know about the Bureau of the budget. That I know for a fact is that they make up the budget every year. We must do a lot besides what else. All we do a lot of other things as you suggest we're the coordinating agency for the president within the executive office of the president on all sorts of things for instance all the statistics that you read that come out on employment and retail sales and all through the government where the coordinating agency to be sure that the standards are similar and that they they get reported as soon as they're done in the sort of thing. We have a responsibility for the president in the plans of all legislations of the Secretary of Agriculture doesn't find that the on a bill that he's interested in somehow the secretary of interior testified the other way Esther Day. We have a job to do for the president in improving the government or the organization of the federal government down and

obviously with two and a half million civilian employees there is quite a job of organization and there is quite a job of personnel coordination we get involved in that too. We also do program evaluation and various parts of the government that sound that sort of a fancy title for analysis as to whether money put into the Job Corps is giving us a better return for dollar invested than money put into some other kind of manpower training program. How many people work for the Bureau of the budget. Oh there are a few over 500. And that population hasnt changed much in years where the federal budget is more than double sometimes when youve got a one on one federally able agency or another they say well you know Im not supposed to say this but but we really don't have enough money and its all fall of the bureau the budget theyre not giving us enough. Where the president's complaint department down and down where. Very happy to to play that role it gives agencies an

opportunity to to get things off their chest that they would otherwise have to blame on the president himself and they're not going to blame things on their own boss. So we're we're handy that way. And it's true that the Congress on many occasions when they're dissatisfied that a given congressman doesn't get a damn on the local river and so forth and so on he doesn't really want to lose Bernie's brownie points so to speak by criticizing the president so he says that during the budget they held up that money it's all their fault. This is traditional Is it oh yes it's always been that way. Now agencies don't just think the bureau of the budget is the president's complaint department and they don't think it's just a matter of tradition. These critics say that other administrations have been more willing to spend money on our social ills. Now these same critics would say that what the budget director is going to talk about next

human resources is just talk nothing more. In your announcement of the budget for 1971 you say in a letter that you're going to budget this year is going to devote more money to human resources. What do you mean by humans by human resources we mean money going to the old folks in the country to the veterans to the recipients of Medicare and Medicaid to health programs to educational programs to manpower training to the OIO programs including some that we admit are controversial like community action programs. To a great many different time kinds of programs that have as their basic purpose to the improvement of the welfare of the well being the education and health of America.

Very recently you said that that there might conceivably be a deficit next year since since the surplus plan is only 1.3 billion. This is conceivable. We are fighting to maintain that surplus so thin that it is after all it's only a billion three hundred million in a budget that is 200 billion dollars in total. That doesn't mean we are planning on a deficit. We merely called to the attention of. The Great American public that unless Congress indeed follows the president's financial plan plan carefully and does at least as well as that plan we may end up with one. We feel this is part of the constraint of fiscal policy if I have me use highfalutin words that enables us to impress even more on the Congress the necessity of not spending money in excess of the president's budget.

If the worst situation came to pass then we really did entered a recession. Some major proportions. How would that your administer How would the Nixon administration respond. I mean would we see more government spending. Why would we see. Well in the first place let me reiterate that we do not expect a recession. That's item one which is very important. If however you twist my arm a little bit and ask me to respond more specifically I would say that indeed if the we were to have a recession in this country of course there would be some things that would happen more or less automatically in terms of larger expenditures for unemployment compensation. We probably would. Have some increases in manpower programs we

know that on the other side of the budget. Our tax receipts would fall off if people's incomes weren't quite so high especially if if a corporation had less income because we taxed that almost 50 percent on average so there would tend to be a. Tendency toward a deficit just by the natural evolution of laws that are already on the books. If we were to have a recession but in the same breath I must suggest that. The policies that we have adopted in this administration during the past year on a strong fiscal policy and combined with a strong monetary policy and on the part of the Federal Reserve we think these policies are indeed working and that we will not have a recession. And your projection 971 you talk about. Something like 69 percent of the money going out as it is not

really carefully controlled can't be carefully controlled at all it's already signed sealed and delivered so to speak. That doesn't mean that it's being wasted but it means that when a man is 65 years old he goes in to apply for his Social Security check. We don't say sorry Bob we've run out of money. He gets paid that check it has an automatic payment that is due him. It is his right under the law. We can't deny that. And when the intrastate comes around on federal lands that we sell we don't say to the man who bought those bonds. We just don't have the money around we pay the interest on the bonds we believe in our contractual obligations. If you had an opportunity to do it somewhat differently that would be better to have more government control every year. Would you like to see them. You mean more control of the spending. Well it becomes somewhat of an academic question because. Even if we were to have

more control seemingly of the Social Security benefits how could in fact in fact we have that control because we decide that we like the color of your eyes so you get a benefit in the next man doesn't even know you both qualify. It really makes it very difficult. And again a contract is a contract and we have to meet those obligations. But wouldn't the situation be where you had an ideal budget going out every year. What would it look like to you. Oh my this is there is no such animal. Just like. Naturally you probably believe that you have married the ideal man so he's an ideal husband. But when you get into budgets there's no such thing as an ideal. What is a suitable budget under some circumstances would not be another's And even if you thought it was pretty i close to ideal. They say the president of the United States thought it was close to ideal. Chances are a hundred

to one that the Congress would shoot so many holes in it. They have a different idea of what an ideal budget. But what are the major points in this budget that they're a concern to you that you really want to see get through the Congress. Well we want to be sure that we get the best bang for the buck. That's what it amounts to. In other words we want to go through these programs that. That we have studied so carefully and that indeed the Congress has studied carefully to make sure that the money is not wasted that when we say we're going to devote so many dollars to education we just don't throw money at a problem and hope that the problem will go away. We use that money judiciously just like you would do if you're going shopping for a dress you just don't go into a shop or worse yet call up on the phone I'd like address and hang up the phone. The chances of you getting the right size in a color that pleased you and so forth would be rather slim. So we have to be

careful in our shopping too. And some of the Democrats are predicting that they'll be a seven billion dollar deficit. Things like that. The 7 billion dollar figure is merely a translation of our 1.3 billion dollar surplus into an old concept of the budget which has not been used in a set year beating that they are taking the trust fund. Items and excluding them from the budget. The trust funds are running a surplus so as you can see if you take that so surplus away your small surplus becomes a significant deficit. We argue that it really doesn't make much difference to Mr John Q. Public. Supposing he's a veteran who is 70 years old he gets two checks he gets one. That happens to come out of a trust fund it's called his old age pension. He gets another that happens to come out of the general fund it's called his veteran's benefit check.

In terms of his income. It could he couldn't care less which fund it came out in terms of our look at the whole federal government we couldn't care less either. So the people who are saying that we must exclude these trust funds are in effect putting aside and important part of the economic what you would call a resource allocation in the federal budget in introducing this budget for 1971. Mr. Mayo called it anti-inflationary but he also declares that this budget represents the launching of a major effort to improve environmental quality. Once again the critics say the money the budget a lot is not enough. That 4 billion dollars over 10 years is a mere gesture. Furthermore in this field you can't just leave most of the work up to private industry. The word environment has been bandied about an incredible amount and i asked me once and. And in fact in your budget message you say that you are

allowing a considerable amount of money toward the environment which talk about Ackerman. Yes I did glad to. We feel very strongly that one of the neglected areas in modern American life especially as we get into the 70s is the area of the environment. The man is always taken for granted his ability to survive in the world and that to consider their own water and so forth we're pretty much free and there's no no problems associated with it. Now we've learned to know otherwise and I don't need to dwell on it. Sure if you live in. The Grand Tetons in Wyoming maybe are not concerned about air and water pollution. Here are three at the top end of the water stream and new and fresh air country. But if you live in New York or Los Angeles or even Minneapolis or New Orleans you indeed have some concern about this with a great many cars running around

with exhaust fumes with industrial waste polluting the rivers and so forth. So we think something should be done about this and we think also that something should be done about buying more parkland or open spaces if you please that will be useful to future generations of Americans and if we don't buy it now the prices are likely to go up so high that we'll find it more much more difficult to buy. What specifically I mean how much money you talking about. What specifically are you going to do. Water pollution and what for air pollution well for water pollution for instance. We have a 10 billion dollar program proposed in the Presidents environmental message four billion dollars of that would come directly out of the federal treasury over a period of five years this is a four billion this is a 10 billion dollar construction program a waste treatment facilities. Sewage treatment. Basically the other six billion in the

10 billion program would be provided at the local level the state and local governments would do the financing much of it through the municipal bond markets like they do now but in case any local governmental unit was unable to get money through the local bond market it could go to the federal. Financing Authority what we're going to call probably an environmental Financing Authority. We would do financing there and by the local government bonds and in effect the authority would issue its own bonds to the public and you could do much more financing that way than with a lot of little state and local issues running around trying to seek a marketed particulary at a time when the markets are congested as they are not about air pollution air pollution we're working with the auto companies to try to develop. Alternatives to the. Gas combustion engine for instance.

There are other things that I'm not a scientist. Then I could just describe glibly but it wouldn't mean anything in terms of hydrocarbons and so forth and so on. We were talking about industrial air pollution as well as. All the steel plants and so forth not just the automobile but the automobile is quite an important part of this. But I think some criticism is what will happen is that there isn't so much money being out late at the federal level that that the consumer won't end up paying for example maybe $50 more a car to take care of them and the pollution devices put on the car and ultimately the consumer will pay for it. I think the environment well how do you get around them and leave the consumer pays the taxes to do the federal part ory pays for it in buying a more expensive car. So I suppose when you get right down to it all Americans are consumers and we're not worried about anybody else except the consumer in the last analysis we want to

do it through the right channels we want of course have the industrial waste taken care of by the industries that are involved as much as possible. But we're not blind to the fact that this may result in the raising of prices. Whatever type of product is made in those plants they don't have a well in the backyard pump out money and if they can't squeeze it out of there. Their prices at existing levels they will find they'll have to raise prices. So them's overpays that sometimes you're called a Dr. No I guess because because you have to say no so often as so many things in the new budget you say you're trying to cut. Take care of inflation by. By keeping government spending then yes well. How can you be a doctor Yes ever. Well the fact that we're doing so much getting started on the

environment means that I'm also a doctor yes we had to be Dr. know just that much harder on certain other parts of what you what kinds of downs defense spending is down five point eight billion dollars in this new budget in a budget of 77 had defense budget of 77 billion. So that's a big achievement. It's a it's the reason we can say that we're spending. Less now for defense than we are for human resources. We've cut the space budget by a half billion. We're not throwing out manned space and there will still be manned going to the moon but in a more prudent way in terms of doing real scientific work over the next few years and not as quite as many trips we've discontinued the Saturn 5 production lines. That doesn't mean we're going to throw away all the equipment and the potential to make them later on but we've got enough Saturn 5s now to last us for for the forseeable future and

who knows we may find something better somewhere along the line who were supposed to be making progress every year in technical way. That was the grossest. Thing wrong with the Bureau the budget when you arrived. Do you think the grossest thing with the peril of the budget when I arrived. That's that's the toughest question you've asked me because I found that the bureau the budget was really in reasonably good shape it had an excellent staff as I well knew because I spent 19 years in Washington in the 40s in the 50s. And. I think the only thing I can say there is that. The very thing they are too busy and there is too much that we have to do for the number of people we have to do it with. Would you explain one thing to me that I don't understand very well. The Bureau of the budget periodically appropriates money as a writer how do you know the

Congress appropriate and not appropriate do I mean it when we apportion money within the appropriation So that how does your agency doesn't go out and spend all that money. It's just like your mother gives you an allowance and I'm. Supposed to last for a month and if she's smart she'll probably apportion it so you get so much a week because you might just go out and see and I have a very fine thing happen on the second of the month you'd be broke. And then you would just have to work on mother for the rest of the month to be sure you. Got whatever money you thought you needed and have. Having failed to do that the rest of one month that maybe you wouldn't buy that happen next time. So in a sense so without trying to be childish about it I suppose the same general principle applies to the way you must work with federal agencies. There are of course responsible I don't mean to suggest they're going to spend all their money the first week but a little bit of

overspending makes a great deal of trouble in this government a government where you're spending something like a half billion dollars every day and you challenge that. Yes we we take the congressional appropriations and we will divide them among the. The appropriations for a given function in a given agency and we'll spread it out according to what we think could be a logical pattern of spending during that year. It isn't just that we'd like to do this it's that the Congress expects us and in effect has told us to do it and if anybody runs over we put a little black less than they are supposed to report to the Congress. It isn't just for fun. This is an area where the bureau of the budget has been most harshly criticized this year. Now whether the president is behind the present apportioning system or Mr. Mayo is it something the budget director didn't go into.

What do you point to in the budget that is going to be primarily responsible you think for. For really reading this country even of inflation. The fact that the we've kept the total down to a level only one and a half percent bigger than it is this year in an environment where we know that prices are rising even with inflation controlled by more than one and a half percent so we have in effect a declining level slightly declining level of federal spending in real terms in terms of what those dollars will buy because we have the stain problem as you do when you go to the store you find the price of bread gone up we find the prices of. Procurement in the military has gone up for the price of doing something in atomic energy has gone up. They have to pay more wages we have to do all sorts of things that cost more money. Can you really go very far by AMP I mean analogies between federal government spending and then you know somebody with a budget that is

you can go quite a ways at it. You have one basic difference. The federal government is the sovereign and theoretically we can run a deficit longer than an individual can without catching up with us. Theoretically we can print money if we don't like to run deficit too and put you in jail if you print money but no one is suggesting in these modern times that we Council budget by printing money. The only trouble is that inflation itself becomes sort of a tax. Sort of a subtle and videos tax which can offset as many people realize all too well that when they get a pay raise it somehow kind of disappears fast because of inflation. When your budget was announced for 71 did you get any. Probably you naturally get criticism from. Democrats maybe. But how did you get any praise.

Oh yes we get some praise and we get criticism this is very bipartisan We get criticism from Republicans and Democrats alike. Naturally since it's a Republican administration I suppose the preponderance of criticism is as with the Democrats and yet I've had a great many complimentary remarks made to be by not only Democratic congressmen and senators but also by. My. Students and economists who are a Democrat of Democratic persuasion. Mr. Mayo seemed like a nice man and his budget for the next fiscal year was praised by a number of people in government. But those are observations which have nothing to do with how our country is run and how the money is really spent. The major criticisms of Mr. Mayos budget are that the human resources haven't really been emphasized enough and that the military budget hasn't been cut all that much and that not enough money has been designated to really improve the environment. Now you've just heard the

director of the Bureau of the budget and he argues differently the next year will tell. You. This has been a federal case. Your correspondent.

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