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but the cost of administration is borne by Federal grants. In the case of the railroad workers the picture is again a different one. Both railroad retirement and railroad unemployment and disability benefits are federalized; administration of these programs is in the hands of the United States Railroad Retirement Board (table 1). Another major program in a somewhat related field—that of pensions and services for veterans-is also federalized, although some States have their own veteran programs and a few States pay bonuses or pensions to



Proposals for a Cabinet department for health, education, and social-welfare functions of the Federal Government antedate many of the now existing functions in these fields. An early proposal was made in the administration of President Harding, but Congress did not take action at that time. Subsequently, President Hoover sponsored a consolidation of certain Federal social activities into a major division of the Department of the Interior, under the supervision of an Assistant Secretary. Again Congress failed to act. With the advent of President Roosevelt's administration in 1933, Federal relief, health, educational and other welfare expenditures expanded rapidly. However, the pressure of the economic emergency was such as to push the Cabinet proposal into abeyance for the time being, while independent agencies were established to carry out welfare programs. The emergency relief and work relief agencies, of which the most important were Federal Emergency Relief Administration, Works Progress Administration, National Youth Administration, Civilian Conservation Corps, and Public Works Administration, have now been disbanded.

During the latter part of the thirties there began a process of consolidation of the remaining health, education, and welfare agencies, and under the Reorganization Act of 1939 the Federal Security Agency was created. Within the Federal Security Agency were grouped the Office of Education, the Public Health Service, the Social Security Board, the Food and Drug Administration, and the Office of Vocational Rehabilitation. Further additions followed the reorganization plan of 1946. The Social Security Board was reconstituted the Social Security Administration; most of the Children's Bureau was taken from the Department of Labor, and the vital statistics functions of the Census Bureau were added to the Federal Security Agency. Table 2 shows the present units, personnel, and expenditures by the Federal Security Agency.


In his message to Congress accompanying the reorganization plan of 1946, President Truman said:

66* * * The size and scope of the Federal Security Agency and the importance of its functions clearly call for departmental status and a permanent place in the President's Cabinet. In number of personnel and volume of expenditures the Agency exceeds several of the existing departments. Much more important, the fundamental character of its functions-education, health, welfare, social insurance and their significance for the future of the country demand for it the highest level of administrative leadership and a voice in the central councils of the executive branch.

"Accordingly, I shall soon recommend to the Congress that legislation be promptly enacted making the Federal Security Agency an executive department, defining its basic purpose, and authorizing the President to transfer to it such units and activities as come within that definition * * * ""

Subsequently, several bills were introduced in Congress to carry out the President's suggestions. Two alternative Senate bills, S. 140 (Fulbright-Taft bill) and S. 712 (Aiken bill), were the subject of hearings in February and March 1947, before the Senate Committee on Expenditures in the Executive Departments. After some amendment, S. 140 was reported out to the floor favorably by the committee. * In its report to the Senate, the committee said it "* * is of the opinion that under a departmental set-up the increasingly important functions of the various activities now incorporated in the Federal Security Agency can be brought into closer accountability to the President and to the Congress, and promote increased economy and efficiency in their operations. The bill is now ready for discussion and action by the Senate when Congress reconvenes for the second session.

* * *""

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TABLE 1.-Federal and State financing of social-security and public-assistance programs, fiscal year July 1, 1946, to June 30, 1947

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Public assistance payments are made by State and/or local welfare
agencies, from State and local funds, with the aid of Federal
grants. The programs are noncontributory; except in a few
States, there are no taxes specifically earmarked for this purpose
General-assistance payments are made by State and local welfare
agencies, from State and local funds. There is no Federal partici-
pation at the present time. The programs are noncontributory;
except in a few States, there are no taxes specifically earmarked
for this purpose.

No State participation. Financed by Federal insurance contribu-
tions tax, at present 1 percent of wages up to $3,000 per year on
both workers and employers in covered industries, or a total of 2
percent of taxable payroll
Financed by Federal payroll taxes on railroads and employees, on
wages up to $3,600 per year. Tax rate on each rose from 3.5 per-
cent to 5.75 percent in January 1947, or a total of 11.5 percent of
taxable payroll.

State, $1,001,504,000; Fed- 1,006,000 (weekly average)... $7,869, 044, 000 Financed by payroll taxes on employers only on wages up to eral, $184, 823,000.

Railroad retirement.

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34,000 (daily average).

859, 498,000

1 Administrative costs not yet available.

Withdrawn from trust funds.

Source: Social Security Bulletin, September 1947; U. S. Railroad Retirement Board.

$3,000 per year in covered industries. Federal tax is 0.3 percent
of taxable payroll; State taxes now average about 1.5 percent.
Administration costs are paid from Federal grants to States;
benefits are paid from State trust funds.

Financed by Federal payroll taxes on railroads of 3 percent of
wages up to $3,600 per year. No experience rating provisions.
This tax will also pay the costs of temporary disability compen-
sation starting July 1, 1947. No State participation.


3 Administration, 100; benefits, none.


The Fulbright-Taft bill, S. 140 (table 3) calls for a Federal Department of Health, Education, and Security, headed by a Secretary of Health, Education, and Security. There are to be three major divisions of the Department, each headed by an under secretary. The Under Secretary for Health is to supervise the Bureau of Health; the Under Secretary for Education, the Bureau of Education; and the Under Secretary for Public Welfare, the Bureau of Public Welfare. The bill gives the Department no additional functions or authority, but merely lists functions authorized by prior legislation.

Certain transfers are specifically provided. To the Bureau of Health will go the United States Public Health Service, the Food and Drug Administration, Freedmen's Hospital, and St. Elizabeths Hospital. To the Bureau of Education will go the United States Office of Education, Howard University, the American Printing House for the Blind, and the Columbia Institution for Deaf. To the Bureau of Public Welfare will go the Social Security Administration, which in volume of expenditures is by far the most important of the constituent units of the present Federal Security Agency.

The Department is given the following functions: (a) To promote, foster, and encourage the development throughout the Nation of services, facilities, and activities in the fields of health, education, public welfare, and related fields; (b) to collect and analyze statistics and make studies, investigations, and reports on conditions, problems, and needs in those fields in the United States and in other countries, and to disseminate and make available information in those fields; (c) to make reports and recommendations with respect to the most effective policies and methods for the promotion of health, education, public welfare, and related services, including recommendations with respect to legislation and matters of administrative policy; (d) to advise and cooperate with international organizations functioning in those fields; and (e) to administer such Federal programs, including grants-in-aid, and such powers, functions, and duties in those fields as are assigned to it or provided through this or subsequent legislative enactment.


Little opposition to the idea of a Cabinet Department of Health, Education, and Security came out at the hearings on bills S. 140 and S. 172. Representatives of special interests who testified confined their objections to the specific wording of the two Senate bills, S. 140 (Fulbright-Taft bill) and S. 712 (Aiken bill), and the only real opposition to this grouping of functions came from the members of the medical profession. Their opposition was related to having health grouped with education and security functions, in the fear that health interests would be subordinated to public welfare and social security. Organized medicine expressed itself in favor of a Department of Health or, failing that, an independent health agency. Other groups, such as consumer protection groups and proponents of child welfare, expressed fears that their interests might not be adequately represented in a new Department. However, aside from that of members of the medical profession, no testimony at the hearing expressed real opposition to Cabinet status for governmental functions in the fields of health, education, and security.


It would appear that while adoption of this bill would actually mean little change at present in activities covered by the three divisions of the Department (at operating levels it would probably be confined to a new letterhead on the stationery), potentially it may have great significance. In the immediate future the Secretary of Health, Education, and Security would sit in at Cabinet sessions and would have direct access to the President. Even now, without Cabinet status, the Administrator of the Federal Security Agency is in close contact with the President. Oscar Ross Ewing has recently been appointed to this post, and his views have not yet been made public. However, the previous Administrator and the President have both repeatedly stated their proposals for furthering the functions and activities of the Federal Security Agency in a variety of ways: nationalizing unemployment compensation and raising benefit levels; liberalizing coverage and benefit provisions of old-age and survivors insurance; increasing Federal grants for public assistance; extending public health services, and creating a major new function-an extended, comprehensive plan for compulsory Federal health insurance.

To date, Congress has been reluctant to adopt these proposals for greatly increasing Federal responsibilities and expenditures along such lines largely because of the heavy taxes which would be necessary to pay for them. A Cabinet Secretary of Health, Education, and Security may be more successful, for he would tend to have greater prestige with Congress.


A Cabinet department might be more efficient if it provided for a real consolidation of constituent units, elimination of duplication and overlapping and cutting down personnel requirements. It appears that on the whole the administration of the Federal Security Agency has been effective and efficient. However, the constituent units have functions which are not closely related. As a result, coordination among them has tended to be loose, an the separated branches within the agency have operated much as if they were independent of each other. It is possible that a drive for effective coordination and economy could readily be made under the existing set-up. Cabinet status would not be necessary for A Cabinet Secretary may be more interested in efforts toward further expansion of the functions of his department.


WOULD A CABINET DEPARTMENT BE MORE RESPONSIBLE TO CONGRESS? Here, again, it is doubtful whether Cabinet status per se would count for much. Both administrators of independent agencies and Cabinet Secretaries must go to Congress for legislative authority and for appropriations, and both have generally asked for constantly increased appropriations and expanding functions. There is no reason to believe that the situation would not be the same with a Cabinet Department of Health, Education, and Security, but there is some reason to expect that a Cabinet Secretary, enjoying greater prestige with the President and with Congress, may be more successful. Indeed, a Cabinet Secretary is primarily a political figure, whereas an independent career official may be first an administrator and only second a politician.


As clearly stated in the bill, one of the functions to be granted the new department is to make reports and recommendations on legislation and matters of administrative policy. Under a similar provision of the original Social Security Act, the Social Security Administration has been in the past and is now active in recommending legislation. Recommendations have generally taken the form of proposals for broadening coverage, increasing benefits and raising taxes under present social security programs and for including compulsory health insurance in social security. The Social Security Board, now the Social Security Administration, has liberally interpreted its function for recommending additional legislation. It is possible that its officials look forward to Cabinet status in the hope that their proposals will receive more favorable attention.



A section of S. 140 delegates to the Bureau of the Budget the task of studying functions now in other agencies and departments of the Federal Government with a view to possible inclusion in the proposed Department of Health, Education, and Security "* * in the interest of economy and simplicity of administration." Agencies which might thus be considered include the Bureau of Human Nutrition and Home Economics now in the Department of Agriculture, the Railroad Retirement Board, the Federal Public Housing Authority, the Office of Indian Affairs now in the Department of Interior, probation and parole work now in the Department of Justice, educational activities now in the Smithsonian Institution and the Veterans' Administration. All these agencies function in fields more or less related to health, education or public welfare, and there may be others. The Bureau of the Budget is directed to submit its recommendations to Congress in a designated period of time. The effect of their inclusion (which, however, would probably be opposed by those who have special interests in these agencies) would be to expand further the functions, personnel, and expenditures of the department.

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