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Mr. CRUICKSHANK. You agree that a man should not be a train dispatcher in order to be president of a railroad?

Senator HUMPHREY. Neither should he have participated in the Franco-Prussian war in order to write a good history about it. The CHAIRMAN. Senator Schoeppel?

Senator SCHOEPPEL. Mr. Cruikshank, does your organization object, or would they object, to the Cabinet designation on the part of the health group in itself alone?

Mr. CRUIKSHANK. Under certain circumstances we have; yes, sir. We have opposed the specific legislation. We are on record as opposing specific legislation for it. However, that is not quite directed to the broader principle that your question is directed to.

Senator SCHOEPPEL. Yes, that is correct.

Mr. CRUIKSHANK. No, I do not suppose so. I do not recall that we ever took a specific action on that. We would feel that if you adopted that then there would be equal grounds for asking for an Office of Education at Cabinet level.

Senator SCHOEPPEL. That was to be my next question.

Mr. CRUIKSHANK. Yes. We feel that it is better to combine these things and to keep the Cabinet from becoming as large and unwieldy a body as it would be if all of these very, very important interests were represented at Cabinet level. It is a difficult question to answer because certainly these are most vital and important interests and a very valid argument can be made for each one of them. But when you get all of those arguments completed, if you would agree with the educators and appoint an education post and the health people and appoint a health post and you add them all up you have too big a Cabinet to be a good administrative body.

Senator SCHOEPPEL. That was the very point that I was sure you were considering as I know many of us have. We have so many various interests here who are apparently unwilling or who do not see the wisdom of combining these under one head so to speak under a Cabinet head. Now rather than to lose all of them because of these various and sundry differences of opinion, I was just curious to know whether we had better do some experimenting here some place down the line on some of these plans, or suggested new plans as they come down if this is not adopted, whereby we try individualizing some of these and maybe after they work a while and we see the weaknesses developing we can take constructive action. After all I do not see any serious objection to expanding the Cabinet of the United States. We are expanding a lot of things nowadays, Government is getting bigger, our Nation is getting greater, our degree of responsibility is getting greater all around the world. Maybe after we try it a while if we cannot get together on some common meeting ground I was curious to know how far your organization might go as well as the educational group, to try something else. That is a great American prerogative, you know, and maybe we can consolidate all their interests and beliefs. Certainly we are at variance here in our position, at least all we have to do is look at the hearings here last year and we can see that and it has had me a little confused.

Mr. CRUIKSHANK. Of course, Senator, I know you are anxious to adopt a plan that gives us the best in administrative ability. The problem is, in regard to the Cabinet, one of having so many men

report to the Chief Executive. Again we see the parallel here to the National Military Office, Establishment. We had to consolidate two Cabinet posts and make them one partly because of growing activity, technological changes and so forth and development of the Air Force, all of that coming newly into the picture, so we dropped one Cabinet post and made just one Cabinet post for three great branches of the Military Establishment. I think the parallel is very direct here. You have several claims, several agencies and interests, that have a legitimate claim to Cabinet status and we do not argue with the validity of that claim but we do argue that you can grant them all a top post and we argue that the pattern that the Congress set in establishing the three branches of the military with one Cabinet officer was a very good and sound step and it could be followed in what we have called here for purposes of illustration, a Department of Internal Defense. It is a direct parallel to that set-up that you have in the Military Establishment now where you do not have a Secretary of War and Secretary of Navy but one Secretary with three Secretaries reporting through him to the President.

Senator SCHOEPPEL. But is it not true that we did have to come up through the old trial and error method on that for a good many years before we arrived finally at that focal point? I am sure I share with you some of the alarm felt in certain quarters yet that it is not functioning like it should.

Mr. CRUIKSHANK. It is having growing pains, certainly.

The CHAIRMAN. Thank you very much.

Mr. CRUIKSHANK. Thank you, gentlemen.

The CHAIRMAN. Miss Marjorie Shearon?


The CHAIRMAN. Do you have a prepared statement?

Dr. SHEARON. I do.

The CHAIRMAN. Would you prefer to submit it for the record and 'just comment on it?

Dr. SHEARON. I should prefer to read it, sir.

The CHAIRMAN. I may have to leave shortly to go to an Appropriations Committee but I will be glad to hear you as far as I can. If I find it necessary to leave before you are through the other members of the committee will be present.

Senator HUMPHREY. I would like to have Dr. Shearon tell us whom she represents.

The CHAIRMAN. Give us your full name, Doctor, and state whether you are representing any organization.

Dr. SHEARON. I have it in the first paragraph. The full name is Marjorie Shearon, Ph. D.

Having spent nearly a decade in the Federal Security Agency, I believe my testimony may be of value to the committee. I served 5 years in the Social Security Administration and 4 years on the staff of former Surgeon General Thomas Parran of the United States Public Health Service. I resigned from the FSA because of administrative and political pressures imposed on professional staff. I then served as a Senate consultant for 3 years. Since 1947 I have been publishing my own weekly paper (Challenge to Socialism) dealing with Federal

legislation and administration. I am entirely independent and do not represent any organization. Only a person who has worked in the FSA can fully appreciate the tremendous pressure applied to health personnel by the staffs of FSA and the Social Security Administration. Welfare domination is not imaginary. It is very real.

Reasons for opposition to plan No. 27: I favor Senate Resolution 302 for the following reasons:

1. Elevation of FSA to departmental status would crystallize an administrative pattern which has already proved inimical to the public interest. We are here confronted with an agency which is spending over $2,000,000,000 a year. It is growing by leaps and bounds. Unrelated functions which had no common denominator were thrown together in 1939 presumably for the purpose of creating a big agency. This hodge-podge of semiautonomous bureaus has not been assimilated. The Social Security Administration, which spends one-half of all FSA funds, has grown in power until it is the controlling force in the Agency. Grave concern is felt over this centralization of fiscal and political power in FSA.

Valuable career employees, such as Surgeon General Parran, Commissioner of Education Studebaker and Deputy Commissioner Norton have resigned or been eased out. Many other career employees have resigned in protest because of maladministration and political pressures from within. If the heterogeneous FSA is given Cabinet status, the present unwieldy and unworkable organization will be frozen. The functions of health and education, already submerged by the powerful Social Security Administration, will be further weakened.

As Senator Douglas said yesterday, with respect to RFC and plan 24, what is needed "is not so much a transfer as a thorough housecleaning." If this committee votes to elevate FSA it will appear that one committee of Congress condones the maladministration and lobbying activities which have been condemned by other committees of Congress. Further, it is inconsistent to promote and reward_the FSA and its component agencies immediately after condemning them on the Senate floor, during the debate on H. R. 6000. The Senate has just voted authorization for the Senate Finance Committee to study and investigate the entire Social Security set-up. Surely that agency should not be elevated prior to investigation.

2. Creation of tripartite department would encourage expansion of functions and accelerate expenditure of Federal funds: The Reorganization Act of 1939 created the FSA in order to: "reduce expenditures, increase efficiency, consolidate agencies according to major purposes, reduce the number of agencies by consolidating those having similar functions and by abolishing such as may not be necessary, and to eliminate overlapping and duplication of efforts."

The Reorganization Act of 1946 had similar laudable purposes. The act changed the FSA from a holding corporation with a small staff and a small budget to an operating agency which has grown at a tremendous rate and has usurped technical fields with disastrous results. Whereas, prior to 1946 there existed three component bureaus-one each for health, education, and social security-each headed by professionally trained men, now there exists a single agency, the FSA, headed by a politician and assisted at the top policy level by men who are not physicians, educators, nor experts in social security.

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The FSA, created in 1939, was reorganized in 1946 for the purpose of saving public funds, reducing staff, and cutting overlapping bureaus. Have any of these desirable ends been achieved? In 1946, before the reorganization had been effected, FSA expenditures were $743,000,000. The next year they jumped to $928,000,000, and the following year to a billion dollars. There has been a steady and startling climb until now the agency will spend $2,000,000,000 in 1951. Within 5 years FSA doubled its expenditures; in 6 years it trebled them. No savings have yet appeared. In another 5 years, if contemplated legislation is passed, this agency may be expected to spend $15,000,000,000 and within 10 years the amount could easily be $20,000,000,000. By that time, the vested interests would be so great that the Congress would be unable or unwilling to resist the pressures for more appropriations and higher taxes. Indeed, we have had a recent illustration of the political power which forced H. R. 6000 through both Houses. The time is not far distant when the FSA, whether given Cabinet status of not, will exceed all other agencies of Government put together in fiscal strength and political power.

Expenditures of Federal Security Agency, 1946–51 1

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1 Source: The Budget of the United States Government for the Fiscal Year Ending June 30, 1950, Washington, 1949, p. 1386; ibid. for fiscal 1951, p. 207.

Without going into the details of the FSA budget, I wish to point out that before that agency was created in 1939, there were five top administrative jobs in the bureaus dealing with health, education, and social security. Those jobs paid in the neighborhood of $10,000 each and were held, respectively, by the Surgeon General of the Public Health Service, the Commissioner of Education, and the three members of the Social Security Board. After reorganization in the interests of economy and better administration, the number of top-flight jobs increased rapidly until in 1950 they included: an FSA Administrator at $12,000, three Assistant Administrators at $10,000 each, nine more officials at $10,000 each, four at over $9,900 each, and six at over $9,000 each, or a total of 23 positions at over $9,000 each. This, be it understood, is in the Office of the Administrator only. The Administrator's immediate entourage then consisted of 257 persons with a payroll of over a million and a quarter dollars. The Administrator's staff now includes 663 persons with a payroll of 4.5 million dollars. Some of these persons, it is true, have been transferred from subordinate agencies, but their salaries were increased, where possible, so that there was no saving. Many of the positions are new. An illustration of the way in which things were manipulated is to be found in the case of the Social Security Board. When the three-man Board was abolished and replaced by a Commissioner for Social Security, there was no real saving because the two displaced Board members were given positions in boxes especially created for them in the organization chart. FSA set up new functions instead of consolidating them. Its activities are now world-wide. The Administrator has spoken of

savings of $100,000; that represents five one-thousandths of 1 percent of the Agency's expenditures.

3. Study and investigation of FSA should precede elevation: Several committees of Congress have investigated the FSA and have reported maladministration, waste, overstaffing, and misuse of Federal funds. The Harness subcommittee of the House Expenditures Committee in 1947 named a large number of FSA officials as having been actively engaged in lobbying, House Report 786 of the Eightieth Congress, first session. The charges were investigated by the FBI and a report was made to the Department of Justice. Action has not yet been taken.

I wish to give you just for study, not to be included in my statement a chart which will show the relation between the lobby inside the Government and the lobby outside the Government.

The CHAIRMAN. You may submit it but let us not go into lobbying. Dr. SHEARON. It is a very important feature of the FSA.

The CHAIRMAN. It may be a very important activity of the Agency but we do not want to take in the Government as a whole this afternoon.

(The chart referred to is on file with the committee.)

Dr. SHEARON. On June 30, 1950, the House Committee on Post Office and Civil Service submitted House Report No. 2457 on employee utilization in the FSA. That report is such a strong indictment of the present administration of FSA that I do not see how this committee could think of elevating the Agency until there has been a complete overhauling and reorganization.

The House report calls attention to "Jurisdictional conflict, duplication of effort, empire building, unresolved disagreements, and a reluctance to exercise central authority." The House committee found there was overstaffing and that there was "no effective control over the personnel program in the Federal Security Agency." It found that in the decade from 1940 to 1950 the number of Agency personnel had increased 52.3 percent and the number of employees in personnel offices in the Agency had increased 181 percent. Certainly there is no sign of saving and of improved administration. The number of personnel engaged in fiscal management increased more than 12 times in the past decade. With respect to the consolidated library services, the committee remarked "Under this kind of administratio, the alleged economies are largely imaginary.” The committee concluded:

The above examples are cited to illustrate the extent to which administrative indecision, lack of fixed responsibility and authority, faulty budget structures, and uncontrolled personnel practices contribute to overstaffing and resulting inefficiencies in the Agency. There is no evidence to refute the implication that the same elements do not affect the program side of the Agency in the same manner-perhaps to an even greater degree.

The House Committee on Post Office and Civil Service has made a large number of recommendations regarding FSA. Furthermore, the Senate has just voted for a thorough study and investigation of the Social Security Administration. If such a study should lead to the conclusion that the costly wage records system in the Bureau of Old-Age and Survivors Insurance should be discarded, then thousands of employees could be dismissed and millions of dollars would be saved annually. In that event, the FSA would not be as important

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