168 Presidential politics
case, the felt need to coordinate government activities led to the creation of
further agencies, so aggravating the problem of coordination.
The Office of Management and Budget
The problem of financial control in the American system is a difficult one
indeed: Congress is jealous of its prerogatives, and the departments of the
administration use all their guile to retain the maximum possible financial
autonomy. The instrument that the president uses to maintain control over
the financial operations of the government is the Office of Management and
Budget. It is important to realise that the United States Treasury Depart-
ment is very different in function from the British Treasury or most other
European finance ministries. The US Treasury has never had the role of su-
pervising in detail the expenditures of government departments, or of re-
lating government expenditures in general to government revenues. Before
1921, indeed, there was no national executive budget (a term that is applied
to proposed expenditures, not to proposed taxation). Each department pre-
pared its estimates for submission to Congress, and the duty of the Secretary
of the Treasury was simply to compile them into a single book of estimates.
In 1921 the Budget and Accounting Act provided that the president should
submit an annual budget of the United States to Congress, and it established
the Bureau of the Budget to aid him. The Bureau was nominally established
in the Treasury Department, but the Act provided that the Director of the
Bureau should report directly to the president. This rather anomalous posi-
tion was ended in 1939 when the Bureau was transferred to the newly cre-
ated Executive Office of the President.
The Act of 1921 gave to the Bureau the authority ‘to assemble, correlate,
revise, reduce, or increase the requests for appropriations of the several de-
partments and establishments’. As a result of its strategic position in regard
to finance, and the fact that its functions involved it in the activities of all
the agencies of the executive branch, the Bureau was the natural instrument
for presidential attempts to coordinate the activities of the administration
and to promote administrative efficiency. So, in addition to its functions in
relation to the preparation and administration of the budget, the Bureau
was charged with the task of conducting research into better administra-
tive management and advising the departments upon better administrative
organisation and accounting practices, coordinating departmental advice
on proposed legislation, and coordinating and improving the government’s
statistical activities. In July 1970 the Bureau of the Budget was absorbed into
the newly established Office of Management and Budget in the Executive
Office of the President.
Potentially, the Office of Management and Budget is the most powerful
coordinating device available to the president. It has knowledge of, and ex-
tensive contacts with, every part of the administrative machine. Its power
to revise estimates is ultimately the power over policy. The Director of the
OMB has direct access to the president, and at the same time has the major