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REORGANIZATION PLAN NO. 1 OF 1953

(H. J. Res. 223)

MONDAY, MARCH 16, 1953

HOUSE OF REPRESENTATIVES,
COMMITTEE ON GOVERNMENT OPERATIONS,

UNITED STATES SENATE,
SUBCOMMITTEE ON REORGANIZATION,
COMMITTEE ON GOVERNMENT OPERATIONS,

Washington, D. C. The joint committee met at 10 a. m., pursuant to call, in room 362, Caucus Room, Old House Office Building. Hon. Clare E. Hoffman, chairman of House committee, presiding.

The CHAIRMAN. The meeting will come to order, please.

The hearing is on House Joint Resolution 223 and on Reorganization Plan No. 1 of 1953, which outlines the President's message, all of which will be incorporated in the record.

(House Joint Resolution 223 and the Reorganization Plan No. 1 of 1953 follow :)

[H, J. Res. 223, 83d Cong., 1st sess.) JOINT RESOLUTION Providing that Reorganization Plan Numbered 1 of 1953 shall take

effect ten days after the date of the enactment of this joint resolution Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That the provisions of Reorganization Plan Numbered 1 of 1953, submitted to the Congress on March 12, 1953, shall take effect ten days after the date of the enactment of this joint resolution, notwithstanding the provisions of the Reorganization Act of 1949, as amended, except that section 9 of such Act shall apply to such reorganization plan and to the reorganization made thereby.

(H. Doc. No. 102, 83d Cong., 1st sess.] MESSAGE FROM THE PRESIDENT OF THE UNITED STATES TRANSMITTING REORGANI:

ZATION PLAN No. 1 OF 1953, PREPARED IN ACCORDANCE WITH THE PROVISIONS OF THE REORGANIZATION ACT OF 1949, AS AMENDED

To the Congress of the United States:

I transmit herewith Reorganization Plan No. 1 of 1953, prepared in accordance with the provisions of the Reorganization Act of 1949, as amended.

In my message of February 2, 1953, I stated that I would send to the Congress a reorganization plan defining a new administrative status for Federal activities in health, education, and social security. This plan carries out that intention by creating a Department of Health, Education, and Welfare as one of the executive departments of the Government and by transferring to it the various units of the Federal Security Agency. The Department will be headed by a Secretary of Health, Education, and Welfare, who will be assisted by an Under Secretary and two Assistant Secretaries.

The purpose of this plan is to improve the administration of the vital health, education and social-security functions now being carried on in the Federal Se

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curity Agency by giving them departmental rank. Such action is demanded by the importance and magnitude of these functions, which affect the well-being of millions of our citizens. The programs carried on by the Public Health Service include, for example, the conduct and promotion of research into the prevention and cure of such dangerous ailments as cancer and heart disease. The Public Health Service also administers payments to the States for the support of their health services and for urgently needed hospital construction. The Office of Education collects, analyzes, and distributes to school administrators throughout the country information relating to the organization and management of educational systems. Among its other functions is the provision of financial help to school districts burdened by activities of the United States Government. State assistance to the aged, the blind, the totally disabled, and dependent children is heavily supported by grants-in-aid administered through the Social Security Administration. The old-age and survivors insurance system and child develop ment and welfare programs are additional responsibilities of that Administration. Other offices of the Federal Security Agency are responsible for the conduct of Federal vocational rehabiltation programs and for the enforcement of food and drug laws.

There should be an unremitting effort to improve those health, education, and social-security programs which have proved their value. I have already recommended the expansion of the social-security system to cover persons not now protected, the continuation of assistance to school districts whose population has been greatly increased by the expansion of defense activities, and the strengthening of our food and drug laws.

But good intent and high purpose are not enough ; all such programs depend for their success upon efficient, responsible administration. I have recently taken action to assure that the Federal Security Administrator's views are given proper consideration in executive councils by inviting her to attend meetings of the Cabinet. Now the establishment of the new Department provided for in Re organization Plan No. 1 of 1953 will give the needed additional assurance that these matters will receive the full consideration they deserve in the whole operation of the Government.

This need has long been recognized. In 1923, President Harding proposed a Department of Education and Welfare, which was also to include health functions. In 1924, the Joint Committee on Reorganization recommended a new department similar to that suggested by President Harding. In 1932, one of President Hoover's reorganization proposals called for the concentration of health, education, and recreational activities in a single executive department. The President's Committee on Administrative Management in 1937 recommended the placing of health, education, and social-security functions in a Department of Social Welfare. This recommendation was partially implemented in 1939 by the creation of the Federal Security Agency-by which action the Congress indicated its approval of the grouping of these functions in a single agency. A new department could not be proposed at that time because the Reorganization Act of 1939 prohibited the creation of additional executive departments. In 1949, the Commission on Organization of the Executive Branch of the Government proposed the creation of a department for social security and education,

The present plan will make it possible to give the officials directing the Department titles indicative of their responsibilities and salaries comparable to those received by their counterparts in other executive departments. As the Under Secretary of an executive department, the Secretary's principal assistant will be better equipped to give leadership in the Department's organization and management activities, for which he will be primarily responsible. The plan opens the way to further administrative improvement by authorizing the Secretary to centralize services and activities common to the several agencies of the Department. It also establishes a uniform method of appointment for the heads of the three major constituent agencies. At present, the Surgeon General and the Commissioner of Education are appointed by the President and confirmed by the Senate, while the Commissioner for Social Security is appointed by the Federal Security Administrator. Hereafter, all three will be Presidential appointees subject to Senate confirmation.

I believe, and this plan reflects my conviction, that these several fields of Federal activity should continue within the framework of a single department. The plan at the same time assures that the Office of Education and the Public Health Service retain the professional and substantive responsibilities vested by law in those agencies or in their heads. The Surgeon General, the Com

missioner of Education, and the Commissioner of Social Security will all have direct access to the Secretary.

There should be in the Department an Advisory Committee on Education, made up of persons chosen by the Secretary from outside the Federal Government, which would advise the Secretary with respect to the eductional programs of the Department. I recommend the enactment of legislation authorizing the defrayal of the expenses of this Committee. The creation of such a Committee as an advisory body to the Secretary will help insure the maintenance of responsibility for the public educational system in State and local governments while preserving the national interest in education through appropriate Federal action.

After investigation I have found and hereby declare that each reorganization included in Reorganization Plan No. 1 of 1953 is necessary to accomplish one or more of the purposes set forth in section 2 (a) of the Reorganization Act of 1949, as amended. I have also found and hereby declare that by reason of these reorganizations, it is necessary to include in the reorganization plan provisions for the appointment and compensation of the new officers specified in sections 1, 2, 3, and 4 of the reorganization plan. The rates of compensation fixed for these officers are, respectively, those which I have found to prevail, in respect of comparable officers in the executive branch of the Government.

Although the effecting of the reorganizations provided for in the reorganization plan will not in itself result in immediate savings, the improveinent achieved in administration will in the future allow the performance of necessary services at greater savings than present operations would permit. An itemization of these savings in advance of actual experience is not practicable.

DWIGHT D. EISENHOWER. THE WHITE HOUSE, March 12, 1953.

REORGANIZATION PLAN No. 1 OF 1953 Prepared by the President and transmitted to the Senate and the House of Represent

atives in Congress assembled, March 12, 1953, pursuant to the provisions of the Reorganization Act of 1949, approved June 20, 1949, as amended

DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE

SECTION 1. Creation of Department; Secretary. There is hereby established an executive department, which shall be known as the Department of Health, Education, and Welfare (hereafter in this reorganization plan referred to as the Department). There shall be at the head of the Department a Secretary of Health, Education, and Welfare (hereafter in this reorganization plan referred to as the Secretary), who shall be appointed by the President by and with the advice and consent of the Senate, and who shall receive compensation at the rate now or hereafter prescribed by law for the heads of executive departments. The Department shall be administered under the supervision and direction of the Secretary.

SEC. 2. Under Secretary and Assistant Secretaries.—There shall be in the Department an Under Secretary of Health, Education, and Welfare, and two Assistant Secretaries of Health, Education, and Welfare, each of whom shall be appointed by the President by and with the advice and consent of the Senate, shall perform such functions as the Secretary may prescribe, and shall receive compensation at the rate now or hereafter provided by law for under secretaries and assistant secretaries, respectively, of executive departments. The Under Secretary (or, during the absence or disability of the Under Secretary or in the event of a vacancy in the office of Under Secretary, an Assistant Secretary determined according to such order as the Secretary shall prescribe) shall act as Secretary during the absence or disability of the Secretary or in the event of a vacancy in the office of Secretary.

SEC. 3. Special Assistant.There shall be in the Department a Special Assistant to the Secretary (Health and Medical Affairs) who shall be appointed by the President by and with the advice and consent of the Senate from among persons who are recognized leaders in the medical field with wide nongovernmental experience, shall review the health and medical programs of the Department and advise the Secretary with respect to the improvement of such programs and with respect to necessary legislation in the health and medical fields, and shall receive compensation at the rate now or hereafter provided by law for assistant secretaries of executive departments.

Sec. 4. Commissioner of Social Security. There shall be in the Department a Commissioner of Social Security who shall be appointed by the President by and with the advice and consent of the Senate, shall perform such functions concerning social security and public welfare as the Secretary may prescribe, and shall receive compensation at the rate now or hereafter fixed by law for grade GS-18 of the general schedule established by the Classification Act of 1949, as amended.

SEC. 5. Transfers to the Department.-All functions of the Federal Security Administrator are hereby transferred to the Secretary. All agencies of the Federal Security Agency, together with their respective functions, personnel, property, records, and unexpended balances of appropriations, allocations, and other funds (available or to be made available), and all other functions, personnel, property, records, and unexpended balances of appropriations, allocations, and other funds (available or to be made available) of the Federal Security Agency are hereby transferred to the Department.

SEC. 6. Performance of functions of the Secretary.The Secretary may from time to time make such provisions as the Secretary deems appropriate authorizing the performance of any of the functions of the Secretary by any other officer, or by any agency or employee, of the Department.

SEC. 7. Administrative services.-In the interest of economy and efficiency the Secretary may from time to time establish central administrative services in the fields of procurement, budgeting, accounting, personnel, library, legal, and other services and activities common to the several agencies of the Department; and the Secretary may effect such transfers within the Department of the personnel employed, the property and records used or held, and the funds available for use in connection with such administrative-service activities as the Secretary may deem necessary for the conduct of any services so established: Provided, That no professional or substantive function vested by law in any officer shall be removed from the jurisdiction of such officer under this section.

SEC. 8. Abolitions.—The Federal Security Agency (exclusive of the agencies thereof transferred by sec. 5 of this reorganization plan), the offices of Federal Security Administrator and Assistant Federal Security Administrator created by Reorganization Plan No. 1 (53 Stat. 1423), the two offices of assistant heads of the Federal Security Agency created by Reorganization Plan No. 2 of 1946 (60 Stat. 1095), and the office of Commissioner for Social Security created by section 701 of the Social Security Act, as amended (64 Stat. 558), are hereby abolished. The Secretary shall make such provisions as may be necessary in order to wind up any outstanding affairs of the Agency and offices abolished by this section which are not otherwise provided for in this reorganization plan.

SEC. 9. Interim provisions.The President may authorize the persons who immediately prior to the time this reorganization plan takes effect occupy the offices of Federal Security Administrator, Assistant Federal Security Administrator, assistant heads of the Federal Security Agency, and Commissioner for Social Security to act as Secretary, Under Secretary, and Assistant Secre taries of Health, Education, and Welfare and as Commissioner of Social Security, respectively, until those offices are filled by appointment in the manner provided by sections 1, 2, and 4 of this reorganization plan, but not for a period of more than 60 days. While so acting, such persons shall receive compensation at the rates provided by this reorganization plan for the offices the functions of which they perform.

The CHAIRMAN. I think the first witness the Department has is Mr. Dodge. Will you please take the witness stand!

Inasmuch as we have the committee from the Senate with us this morning, Mr. Dodge, we are going to turn the meeting over in the first instance to that committee.

Senator Smith, if you will proceed.
Senator SMITH of Maine. Mr. Chairman, thank you very much.

The Senate committee is very glad to come over here in this joint session, as it looks as though we might expedite action a little.

Mr. Dodge, will you give your name and the position you hold? STATEMENT OF JOSEPH M. DODGE, DIRECTOR, BUREAU OF THE

BUDGET; ACCOMPANIED BY WILLIAM F. FINAN, ASSISTANT DIRECTOR, BUREAU OF THE BUDGET

Mr. DODGE. It is Joseph M. Dodge, Director of the Bureau of the Budget.

Senator SMITH of Maine. The photographers are going to take pictures before the testimony begins, and then they won't come in again until the next witness comes on.

That is satisfactory to Mr. Dodge, is it not?
Mr. DODGE. Yes.

Senator SMITH of Maine. Before we begin, I would like to have read into the record a telegram from the former President, the Honorable Herbert Hoover. Without objection, it will become a part of the record, and I will read it at this time, if I may.

I have your telegram asking my views upon President Eisenhower's recommendation for the reorganization of the Social Security Agency. I wholeheartedly support his plan. It is a strong, constructive step in the consummation of the reorganization proposals of the Commission on Organization of the Executive Branch of the Government and is vitally necessary at the earliest moment.

At some future time there needs to be an exhaustive investigation of the Federal hospital and medical setup with a view to elimination of duplication and waste. Also there needs to be an exhaustive investigation of the whole method of aids to the aged, with view to simplification, elimination of waste, administrative overlaps with the States if we are to reduce expenditure and at the same time provide a better floor of support for those groups.

Such investigations would take time and should not delay approval of President Eisenhower's admirable and urgent plans.

I hope you will excuse my not appearing personally before the committee at this time. I could contribute no more than my full endorsement in any event.

Signed "Herbert Hoover.”

The CHAIRMAN. Senator, we have a similar wire from the ex-President.

Senator SMITH of Maine. It will be included in the record.
Without objection, it will be included at this moment.

We are going to consider House Joint Resolution 223 expressing
approval of Reorganization Plan No. 1 of 1953.
Mr. Dodge is ready to testify. Do you have a statement?
Mr. DODGE. I have.
Senator SMITH of Maine. Will you proceed?

Mr. DODGE. Mrs. Chairman and members of the committees, your, committees, as I understand it, have before them both Reorganization Plan No. 1 of 1953 and a joint resolution designed to place the reorganization plan into effect 10 days after the passage of the joint resolution. The essential effect of the joint resolution would be to advance the effective date of the reorganization plan. I consider the fixing of an early effective date extremely desirable.. In the absence of action to that end, however, and if no resolution of disapproval is passed by constitutional majority of either House of Congress in pursuance of the Reorganization Act of 1949, as amended, the plan will become effective as prescribed by section 6 (a) of that act, after being before the Congress for 60 days.

I will direct my remarks primarily to the reorganization plan. Reorganization Plan No. 1 of 1953 creates a new executive department to be known as the Department of Health, Education, and Welfare and transfers to it all the agencies of the Federal Security Agency, together with their respective functions. The Department

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