Government Operations from the House of Representatives, to consider President Eisenhower's Reorganization Plan No. 1 to set up the Department of Health, Education, and Welfare. As the Director of the Federal Security Agency and the next Secretary of the Department of Health, Education, and Welfare, we are pleased to have you here. Do you have a statement you would like to make?

Mrs. HOBBY. No, Senator Smith, I do not have a prepared statement. Senator SMITH of Maine. Would you hold up for just a moment while the photographers take pictures?

The CHAIRMAN. They requested that they be permitted to take pictures for a few moments. It is up to you.

Mrs. HOBBY. It is up to you. You are the boss.

The CHAIRMAN. You are the boss on that question. Under our rules, the witness always determines that.

Mrs. HOBBY. I have no objection.

Senator SMITH of Maine. Mrs. Hobby has no objection. Will you proceed, Mrs. Hobby?

Mrs. HOBBY. Senator Smith, Mr. Hoffman, ladies and gentlemen of the committee, I have no prepared statement.

Mr. Dodge, the Director of the Budget, as you know, did have a prepared statement to which he has given great thought. He has stated the position of the Administration and covered it very well, and I am delighted to submit myself to any questions that you have that I may answer.

Senator SMITH of Maine. It is noted from the plan under consideration that the following offices will be established:

No. 1. Office of the Secretary.

No. 2. Office of the Under Secretary.

No. 3. Two Assistant Secretaries.

No. 4. Special assistant to the Secretary for Health and Medical Affairs.

No. 5. A Commissioner of Social Security.

I would appreciate it if you would explain what the duties and responsibilities of the Under Secretary will be under this plan, so far as your understanding of it goes.

Mrs. HOBBY. Senator Smith, largely the duties of any Under Secretary, is to act for the Secretary in her absence, or perform duties assigned by the Secretary with reference to administrative management. If I may use a business term with which I am more familiar, I would call it general manager.

Senator SMITH of Maine. It is noted that a special assistant to the Secretary for Health and Medical Affairs will be established under this plan. A Commissioner of Socal Security will be appointed to coordinate the activities of social security and welfare. However, no provision was made in this plan to provide similar liaison and coordination with respect to education.

Is it your plan to nominate one of the special assistants to the Secretary to coordinate educational activities between the local education groups and the Secretary of Health, Education, and Welfare?

Mrs. HOBBY. Senator Smith, we have not worked out a definitive organizational chart. I assume that we might be some time doing that because I hope to do rather complete assessment of the functions, not only by subject but by constituent. Before we work out an or

ganization chart, as you are aware and I know in the Hoover report, the Under Secretary and the Assistant Secretary were to have general backgrounds on the theory that if you were to again get specialists, so to speak, that you would have what some of the gentlemen on the committee have raised questions about this morning and this afternoon, another layer in between. I would hope that the Under Secretary and the two Assistant Secretaries could be very capable general administrators and that the Commissioner of Education, who is, after all, the professional person on education, or the Commissioner of Social Security, who is the technical and professional person on social security, the Commissioner of Vocational Rehabilitation, the Commissioner of Pure Food and Drugs and, as you notice from our organization chart, under the law St. Elizabeths Hospital has a direct line to the Federal Security Administrator.

You also know that we are charged with the presentation of the budget of the Columbia Institution for the Deaf, the American Printing House for the Blind, and for Howard University. So, in making the chart I wish to do quite extensive study. I am sure I am not telling the members of this committee something they don't already know when I tell you that the volume of paper work and the so-called nontechnical decisions which can be made by administrators is voluminous in the Federal Security Agency.

Senator SMITH of Maine. We have been hearing quite a bit about the difficulty with civil service, the freezing of high policy formulators, and the resulting inability of President Eisenhower to get his team on the field. Could you tell us how long after this plan goes through that you will be able to get your team on the field?

Mrs. HOBBY. Senator Smith, I understand there is a period of time waiting for the plan to be approved before the executive department would be set up. I am not sure what the legal limit is. I know there is a legal limit. We would hope to move very soon in some of the key policy-making positions.

Senator SMITH of Maine. Yes, this plan will go into effect in 60 days, not disapproved. Can you give us an idea when you think you might be getting the reorganization well on the way, after the 60 days? Do you have any idea whether it will take you 6 months or a year to get your Department going?

Mrs. HOBBY. I would like to be as frank and as conscientious with the members of this committee as I could be, and I hope I will never say anything that will disappoint you. I can only tell you that in my business, which is very much smaller than the Federal Security Agency, a reorganization took longer than 6 months.

Senator SMITH of Maine. Thank you very much for your frankness. That is greatly appreciated by all the committees.

What are your plans for general counsel, solicitor, or chief legal officer? Is it a plan that you set up yourself?

Mrs. HOBBY. Yes.

Senator SMITH of Maine. I notice there is no mention made of it. Mrs. HOBBY. Yes; it would be an appointment by the Administrator or by the Secretary.

Senator SMITH of Maine. Thank you very much, Mr. Hoffman. The CHAIRMAN. Mr. Dawson?

Mr. DAWSON of Illinois. How long have you been acting now, Mrs. Hobby, as head of the Agency?

Mrs. HOBBY. I believe since the 22d of January, Mr. Dawson.

Mr. DAWSON of Illinois. We are deeply appreciative of the magnitude of this undertaking and your work for the people of this country heretofore and we believe that in the light of your past service to this country that you will do an outstanding job. We wish you well. Mrs. HOBBY. Thank you.

The CHAIRMAN. Senator Dworshak?

Senator DwORSHAK. I have just one question of Mrs. Hobby. Do you believe this reorganization plan will enable you to effect economies and greater economies so that we can probably cut down on the personnel in this new department?

Mrs. HOBBY. Sir, a great expert in the field of business and economy has just preceded me on the stand. I would hestitate to say what I think can be done, but I would like to say this, that I do know sometimes that before you make your plan, you have to make small investments to be able to make good plans that can save money.

Senator DwORSHAK. I recall that recently you appeared before the Senate Committee on Appropriations and requested that proposed reductions in personnel not be made, at least at the present time. I am wondering if you do not agree with me that in reorganizing these agencies it should be possible to expand the service through additional work by existing personnel rather than continually asking for more employees.

Mrs. HOBBY. Well, I think I recall the instance that you are referring to before the Senate Finance Committee. It had to do with the load of cases on old-age and survivors' insurance.

The reason for giving that information to the Senate Finance Committee was on that day the backlog on claims that are filed in the Baltimore office and there is always a great backlog there they reported to me that if the cut in personnel were made it would take 6 months to process the claims, and I thought the committee was entitled to know what the past judgment was about claims being processed. That is more of an automatic operation, Senator, than any other thing we have in the agency because that is a production line IBM machine. Now, of course, the human element has come into a survivor's claim or any claim that is made, but I thought the Senate would never like me to be in a position of not telling them that we might get 72 days behind with claims if that were done.

Senator DWORSHAK. But you do make an urgent appeal to the personnel in various agencies for greater efficiency and cooperation enabling you to do a better job?

Mrs. HOBBY. That I have already done in the Washington area, with the exception of the old age and survivors' insurance in Baltimore, and I have had it on the schedule twice and have had to cancel it, and the National Institute of Health. Other than that agency, all the employees of the Federal Security Agency who are stationed in Washington, together with the Columbia Institute for the Deaf and the staff and faculty of Howard University are attempting to do just that thing.

Senator DwORSHAK. Thank you. That is all.

The CHAIRMAN. Mr. Riehlman?

Mr. RIEHLMAN. I have no questions.

The CHAIRMAN. Mrs. Harden?

Mrs. HARDEN. I have no questions.
The CHAIRMAN. Mr. Holifield?

Mr. HOLIFIELD. I would like to question you along the line that I questioned Mr. Dodge this morning. I repeat again the article that appeared in the Evening Star yesterday, in which Dr. Louis H. Bauer, president of the American Medical Association, said that this special assistant will have considerable power, more than has ever been offered the medical profession before. He said everything that affects the medical profession must be screened through this assistant before it reaches the Secretary. He will have something to say about things in social security and education which have any health aspects what

ever.

The question I wish to propound is this: has there been an agreement between any part of your administration, to your knowledge, and the American Medical Association, that this new assistant will be given the right to screen every proposal that comes before you in regard to public health?

Mrs. HOBBY. No. I know you have read the plan and the President's message, and it means exactly what it says, a special assistant in health and medical affairs. You do know, sir-I am sorry I cannot see you through these lights.

Mr. HOLIFIELD. I am sorry I cannot see you.

Mrs. HOBBY. We have various health and medical programs through the agency which now, under the law that sets up the Public Health Service and, as you know, operates under the Surgeon General of the Public Health Service, we have health and medical programs which now do not go through the Surgeon General. There is a very great need in that agency for a competent person to study all the health and medical programs in the Social Security Commission, in vocational rehabilitation, to correlate and come out with an overall plan, and that is what this man will do.

Mr. HOLIFIELD. He will be a special assistant, as I understand it, with medical experience, rather than a general administrator, is that right?

Mrs. HOBBY. That is true, sir.

Mr. HOLIFIELD. Do you feel then that a specialist who has had medical experience but has not had governmental experience would' be capable of deciding matters of policy which pertain to the whole health service of the Nation?

Mrs. HOBBY. Sir, he would not decide matters of policy. He has no line authority. He would be a staff adviser to the Secretary.

Mr. HOLIFIELD. He would be, you might say, special adviser to you?

Mrs. HOBBY. Yes, sir.

Mr. HOLIFIELD. And would not have the authority to override the Surgeon General?

Mrs. HOBBY. No; no line authority whatsoever.
Mr. HOLIFIELD. Thank you very much.

Senator SMITH of Maine. Senator Humphrey?

Senator HUMPHREY. I just noticed that former President Hoover commenting about this proposed reorganization plan, and of course supporting it, suggested that one of the needs of the Government was a full-scale survey of medical and hospital facilities and programs.

The former President has already helped as the Chairman of the Hoover Commission. Would you comment on the statement that such a survey would be proper under your special authority?

Mrs. HOBBY. If you will permit a vernacular expression, I am answering off the cuff, but I do not see how it could come under the Federal Security Agency. I do not believe, under the law, we have such authority.

Senator HUMPHREY. In other words, you do not believe that this Assistant Secretary charged with health and medical services would be permitted to initiate any such service?

Mrs. HOBBY. No, I would not think so. I do not think so.

Senator HUMPHREY. In other words, this would be over and aboveanything that we have in the reports.

Mrs. HOBBY. Yes, sir.

Senator HUMPHREY. Earlier in the day Senator McCarthy of Wisconsin, directing a question to Mr. Dodge, asked to whether or not the reorganization proposal before us would permit, and let me see if I have the quotation from the Associated Press:

McCarthy, Chairman of the Senate Committee, asked Dodge if "this plan does not give Mrs. Hobby all the power she will need if she is to do a thorough job," and asked whether further legislation wasn't needed for that.

That is correct, Senator, Dodge replied, because it cannot be given by a reorganization plan.

The plan would raise the Federal Security Agency to Cabinet rank with the title of Department of Health, Education, and Welfare.

The Senator was referring to the matter of appointments within the Department, the present personnel. As you see then, this reorganization plan does or does not provide you with the authority to make any personnel changes?

Mrs. HOBBY. Well, sir, you are familiar with what the plan does do. It gives an Under Secretary

Senator HUMPHREY. Other than that.

Mrs. HOBBY. Well, I would hope that civil service would grant my request to make some of these positions schedule A.

Senator HUMPHREY. The Senator went on to point out:

I'm not talking about the top jobs, but debris which Oscar Ewing accumulated over the years.

Would you like to make any comment as to whether or not there is debris in the personnel of the Federal Security Agency?

The CHAIRMAN. Dr. Judd called attention to the fact these lights are shining in the eyes of the witness.

Senator HUMPHREY. My question is to clarify this record.. I do not like reckless charges made about personnel in the governmental agencies, and I want to know whether or not the very able and competent Administrator of the Federal Security Agency felt that there was in her Agency debris which Oscar Ewing accumulated over the years. Mrs. HOBBY. First, I do not think I am competent to give you an answer on that, and usually it is a question of semantics. One person will use one word for something and another will use another, and in the length of time I have been there I haven't had a chance to meet 37,500 employees.

Senator HUMPHREY. Do you contemplate suggesting legislation that will reach down into what you may call the lower echelon of the civil service?