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Senator THYE. Mr. Lawton, you said you prepare it for him. That was just exactly the point I was going to raise. When you said the "President's" budget, I was going to ask, What is the justification of your department, if the budget is submitted by the President, and Congress has to make the appropriation and each Department is responsible for how it expends the money? If all you do is to report that a department has created a deficit in its operations for the fiscal year, which is something we all know sooner or later, there would really be no justification for the continuance of your Department unless you had a specific function. You said the President was responsible for the budget.

Mr. LAWTON. No; I did not, Senator.. I said the estimates


Senator Thye (interposing). You started to, I believe. I want to call to your attention your own remark, and that was the reason I brought the thought up.

Mr. LAWTON. I was just followingSenator THYE (interposing). What I am trying to learn here is what is really the responsibility of your department. That has been the question in my mind all the way through. What is the responsibility?

Now, the Comptroller General's responsibility is to ascertain whether there are irregularities in any of the expenditures. That is a check upon Federal expenditures to determine whether they have complied with the law and if they are within the meaning and the intent of the legislation that created that type of an expenditure.

Yours is strictly the formation of the budget, and I think that I am gathering from your own testimony that you have no specific responsibility. It is a service to the President to submit to him the type of appropriation that might be needed for this or that department. All of it compiled makes up the general Budget estimate or the general Budget message of the President to Congress. But, once the Budget has been compiled and the appropriation made, your function no longer is a part of that department in its expenditure.

Am I right or wrong in arriving at that conclusion?

Mr. LAWTON. Well, we were discussing one phase of our activities when this question started. It was the question of apportionment of appropriations.

Perhaps it might be better if I just stated the functions of the Bureau first, and then explained the various steps. The Bureau has. the function, one, of preparing for the President the Budget of the United States Government, of preparing any supplemental and deficiency estimates of appropriations for his consideration and transmittal to Congress.

It has the function of studying and making recommendations to him, on changes in methods, on overlapping, duplication of functions, and things of that sort, for such action as he may care to take, either under the present Reorganization Act of transmittal to Congress of a reorganization plan or for recommendation to the Congress by some other method.

It bas the function of apportioning the funds of the departments for expenditure after Congress has appropriated those funds. It has the function of determining the numbers of personnel that are required for the proper and efficient performance of the functions of various agencies under the pay act.

It has the function of enforcing the Federal Reports Act which requires the submission of all questionnaires or statistical requests on any group of 10 or more individuals.

It has the function of passing on certain publications which are periodical in their nature.

Senator FERGUSON. You also have the function, do you not, to pass on all legislation?

Mr. LAWTON. At the President's direction all enrolled bills enacted by the Congress come to the Budget for report and for the securing of departmental reports on that for his consideration before acting. Prior to that, any report on a bill, either legislation proposed by the department or report requested by committee, is transmitted to the Bureau of the Budget for advice as to its relationship to the President's program. That advice

Senator FERGUSON (interposing). Is that the program or is that the budget?

Mr. LAWTON. That is the entire program. It is not limited to financial aspects.

Senator FERGUSON. Do you go in to see, then, how much it would cost to operate under that bill?

Mr. LAWTON. In most cases the agency is requested to indicate the cost of a bill. In all cases of enrolled bills we require it. In case of reports on legislation, we attempt to find the cost if it is possible to gage it at the time.

Senator FERGUSON. Well, your report was critical of this bill, was it not?

Mr. LAWTON. I would not say it was critical; no, Senator.

We made three statements in the report-or two statements with reference to the bill. The first statement was that the President would extend his full cooperation if the Congress decided on this method of attaining the objectives of reorganization. We stated, simply from a historical viewpoint, that similar methods had not proven very satisfactory.

Senator LODGE. May I ask a question?

Senator FERGUSON. Yes; I wish you would. Feel at liberty to ask anything you wish.

Senator LODGE. What is the basis for that statement?

Mr. LAWTON. The record of the President's commission, the Taft commission, appointed in 1910 to 1913, and the results and recommendations of that commission on which no action was taken.

The joint commission or joint committee of Congress to which was added an executive member in 1920, to which President Harding submitted recommendations and which, in turn presented its recommendations to the Congress, and on which again no action was taken.

The joint committee appointed by Congress which had the authority to make studies, but instead of making studies decided that the logical solution was to give the President the authority to propose to the Congress and the Congress to dispose, of or to act on reorganization plans if they disapproved.

We feel

Senator FERGUSON (interposing). We got a review of that this morning by Senator Robertson.

Senator LODGE. Two of your three instances were congressional committees, were they not?

Mr. LAWTON. One was a Presidential commission. One was a straight congressional joint committee. One was a combined congressional committee and one executive member who was the chairman.

Senator FERGUSON. What do you claim the remedy is? How are we going to get efficiency in government?

Mr. LAWTON. We do not make a claim that it is not possible. I stated here earlier, the past is not necessarily a gage of the future. We are just raising one point. We did not raise it as an objection.

Senator FERGUSON. Do you have a better way--& suggestion of a better way?

Mr. LAWTON. The only method by which reorganization proposals generally have been adopted and taken effect has been under the method now in effect, now in force, namely, a proposal made by the President and the requirement that Congress disapprove within 60 days.

That has been more successful than any other method. Senator FERGUSON. Have you seen the chart in the President's office on the wall?

Mr. LAWTON. Yes, sir.
Senator FERGUSON. Did you draft it in your office?
Mr. LAWTON. It was drafted in the Bureau of the Budget.

Senator FERGUSON. As I understand it, if the President saw all the people he is supposed to see for a period of 30 minutes, it would take him 3 months to complete the course of seeing these people.

Mr. LAWTON. If he saw all the people who are heads of agencies or members of commissions listed on that chart it would take him some time to see them.

Senator FERGUSON. That was the purpose of getting the chart up. Mr. LAWTON. But he would not necessarily have to see then all.

Senator Thye. Under the present system of government who would you answer to if you did not answer to the President?

Mr. LAWTON. You would answer to the President, but I mean you would not necessarily have to see him at a specific time or once every month or once every week, nor would every member of a commission of 10 or 12 people have to see him. The chairman might be the one to see him for or on behalf of the commission.

Senator THYE. Of whom?

Mr. LAWTON. The chairman of one of these commissions like the Interstate Commerce Commission, or the Federal Trade Commission.

Senator THYE. I think that is what we had in mind when we first referred to the chart, because these are individual and separate agencies, and all the questions I have asked here this morning or any statements I have made today have all been for the purpose of trying to arrive at responsibility. And, I am finding many loose agencies which are responsible to no one and have not been. That is the reason for the deficiencies and increased expenditures.

Mr. Lawton. They are responsible to the President in their operations.

Senator Thys. Now then, if the President heard every one of them, every single agency, and they are responsible only to him, it would take him 3 months, allowing 30 minutes each, or 10 minutes to a small agency and maybe an hour and a half to a big agency. That is what we are trying to get at.

In other words, you are the Assistant Director of the Budget Division, and, therefore, the budget question is your responsibility or your chief's. And yet, you have no responsibility except to compile information for the President which he submits as a recommendation for an over-all proposition, broken down into certain specific functions.

So, the question that comes to my mind is who is responsible to whom, and you have not cleared that question yet. If you can just answer that one question I would be quite happy about it, because I am trying to understand how this Government can function from a standpoint of efficiency, with knowledge of when appropriations are exceeded and when appropriations could be in some manner or other curtailed and still render the efficiency that the public is entitled to..

Mr. Lawton. Well, taking the first point, our responsibility as a part of the Executive Office is to the President; it is so stated in the Budget and Accounting Act. The responsibility of the head of each department and each independent establishment in the executive branch is likewise to the President.

Senator FERGUSON. Do I understand you make confidentiol reports to the President? I mean confidential reports which Congress cannot obtain? On efficiency and economy?

Mr. LAWTON. I do not know that that question has ever risen. I do not know of any.

Senator FERGUSON. I am asking it now. Is that true?
Mr. LAWTON. I do not know of any.

Senator FERGUSON. You do not know of any confidential reports of that character?

Mr. Lawton. We have made reports on other subjects that were confidential.

Senator FERGUSON. What subjects not on efficiency and economy? What subjects would you be involved in outside of efficiency and economy as a budget bureau?

Mr. Lawton. We have made reports on proposals of departments for transfers of functions of certain character.

Senator FERGUSON. Is that not efficiency or economy?
Mr. LAWTON. Well-
Senator FERGUSON. Is that not the purpose of giving such a report?
Mr. LAWTON. In the case I am thinking of it was not that sort of

It was a case of security. It was during the war. Senator FERGUSON. You have that one report that would be confidential?

Mr. LAWTON. The only one we have characterized as confidential and have declined to submit, I think, was to a committee considering the Federal Communications Commission.

Senator FERGUSON. And, you claimed that was solely on the ground of security to the agency?

Mr. LAWTON. That was the reason, Senator.

Senator FERGUSON. Then, this committee could get all your reports to the President on budget matters?

Mr. LAWTON. That is a matter which I would assume we would have to have the President's permission for. I do not know.

Senator FERGUSON. They are confidential then? Mr. LAWTON. Well, we Senator FERGUEON (interposing). I mean the Appropriations Committee nor this committee has a right to get any of the reports?


Mr. LAWTON. The reports that we make to the President on the question of the budget and the submission of estimates are printed documents. In the case of supplemental estimates they are printed in congressional documents.

Senator FERGUSON. Then they are not confidential?
Mr. LAWTON. Those are not confidential, Senator.

Senator FERGUSON. What are the reports that are confidential and for which we would have to get the President's consent?

Mr. Lawton. The only thing I can think of would be the set of figures that we would present to the President at the time we were preparing the budget, and they would be confidential up to the time the budget was released. We consider all of the actions on the budget up to the time the President submits it to Congress as confidential. Senator FERGUSON. Confidential? Mr. LAWTON. Up to that point. Senator FERGUSON. But afterwards they are all public?

Mr. LAWTON. They are incorporated in the Budget as a matter of fact.

Senator FERGUSON. That is what I mean.

What is the personnel of the Bureau of the Budget? How many people?

Mr. LAWTON. About 580.
Senator FERGUSON. How many are in Washington?
Mr. LAWTON. About 554.

Senator FERGUSON. Five hundred and eighty and 554? Where are the others located?

Mr. LAWTON. They are located in San Francisco, in Chicago, in Denver, and in Dallas.

Senator FERGUSON. You cannot do much survey work, then, with the few people that are out of Washington---some 30?

Mr. LAWTON. Only major items.
Senator FERGUSON. Now what would you call a major item?

Mr. LAWTON. Well, we have made a survey of veterans' hospital staffing. We have made a survey of hospital facilities on the west

We have made certain surveys of certain of the operations of the OPA in the field offices. We have made, in the past, a study of the relationships between OPA and ODT on gas rationing. We have made studies of public-debt operation in Chicago, which is a large field operation. We have made studies of the procurement operations, the space handling, certain surplus property functions, and other matters of that character.

I can provide a list for you, Senator, and put it in the record. Senator FERGUSON. I wish you would so we can put it in the record.


IN SELECTED AREAS OR CITIES Survey of meat-enforcement program. Office of Price Administration (consolidation of local boards, and enforcement

reporting and information program in OPA regional offices). Community facilities and services (a survey of the activities of the Federal Security Agency, War Manpower Commission, Federal Works Agency, and

War Production Board in this field). Bureau of Reclamation (the management and program of the Bureau of Reclama

tion in the field). National Housing Agency and constituent units (study of activities and trends

in the housing field).

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