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will be headed by a Secretary to whom are transferred the functions. now vested in the Federal Security Administrator. The plan also provides for an Under Secretary and two Assistant Secretaries to aid in the management of the Department.

The broad objective of the contemplated reorganization has been stated by the President in his message transmitting Reorganization Plan No. 1 of 1953 to the Congress, as follows:

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 Security Agency by giving them departmental rank.

I believe the changes provided for in Reorganization Plan No. 1 will bring great advantages. The conferring of departmental status upon the agency administering the Government's responsibilities in the fields of health, education, and social security will improve the public standing of this important agency. The importance and character of the health, education, and social-security activities are such that departmental status for the agency administering them is eminently appropriate. Moreover, the provision in the plan for officers appropriate to a department will make it easier to attract the most highly qualified persons to fill the major administrative positions in the Department. This is particularly important because wherever you wish to improve the functioning and effectiveness of an organization, whether in business or in Government, the first step always is to strengthen the administrative and executive staff. It is through their direction and control that progress and accomplishment are effectuated.

The plan also encourages increased effectiveness in the administration of common services by authorizing the new Secretary to "establish central administrative services in the field of procurement, budgeting, accounting, personnel, library, legal, and other services and activities common to the several agencies of the Department." It is expected that the improved management of common services will be an important responsibility of the new Under Secretary provided for in the plan.

The plan establishes the office of Commissioner of Social Security on the same basis as the offices of Commissioner of Education and Surgeon General of the Public Health Service.

Finally, the plan makes possible the continuous provision of professional advice to the new Secretary by recognized leaders in the fields of medicine and education. The plan refers specifically to a Special Assistant to the Secretary for Health and Medical Affairs. It is expected that the new Secretary will appoint an Advisory Committee on Education, selected from outside the Federal Government, to advise the Department on the relationship between Federal, State, and local policies in education.

The plan does not disturb the present grouping of functions of the Federal Security Agency. That grouping conforms with one of the important recommendations of the Hoover Commission; namely, that

The numerous agencies of the executive branch must be grouped into departments as nearly as possible by major purposes in order to give a coherent mission to each Department.

The major purpose in this case is the protection of adequate physical and social standards-represented by the fields of health, education, and social security-for the American people. The importance and interrelationship of these fields can be seen from a very brief description of the functions involved: Stimulation of education and the provision of financial assistance for its development; study of childlife and the promotion of improvements in child care; research in problems of health and the development of public health activities; protection of consumers against impure foods and drugs; promotion of vocational rehabilitation; operation of a national system of oldage and survivors insurance; and the financing of public assistance activities.

Overwhelming testimony to the appropriateness of the present proposal is seen in the fact that full departmental status for the Government's health, education, and social-security activities has been strongly urged by Presidents of both parties for the past 30 years. The first specific step in this direction was the creation of the Federal Security Agency, including the Public Health Service, the Office of Education, and the Social Security Board, by Reorganization Plan No. 1 of 1939.

Under the terms of the Reorganization Act of 1939, the President could not give the agency departmental status.

Commenting upon this development in the light of 10 years of successful experience with this grouping, the Senate ExpendituresGovernment Operations-Committee stated in a report in 1949 : At least one agency-the Federal Security Agency-has been established by plan which obviously is of departmental magnitude and importance and should have been designated as an execụtive department.

The Commission on Organization of the Executive Branch of the Government, under the chairmanship of former President Herbert Hoover, studied this whole question intensively and recommended in 1949 that the Federal Security Agency be transformed into a Department of Social Security and Education. The Hoover Commission also proposed that the Bureau of Indian Affairs be added to this new Department and that the Public Health Service be separated out and made part of a new United Medical Administration; but because these latter two proposals deal with basically separate and highly controversial problems of organization, there has been a general belief that they should be left for separate consideration and that this should not delay the long-needed step presented in the present plan. The establishment of the Department as proposed in this plan will in no way interfere with such consideration or with such action on these proposals as the President and the Congress may deem desirable.

In addressing the Congress on February 2, 1953, the President pointed out that he would shortly transmit “a reorganization plan defining new administrative status for all Federal activities in health, education, and social security.” Reorganization Plan No. 1 of 1953 is the proposal to which the President referred. The plan is designed to provide for the Government's health, education, and welfare programs the type of organization and status in the executive branch which their size and importance clearly require.

Outside of my text I would like to add something further.

Mrs. Hobby appears here today to support the plan in her capacity as Administrator of the present Federal Security Agency: She is an extremely modest person and would not say what I am about to say. I believe it is well to make a matter of record the fact that she is not the originator of this project. She did not make it a condition of her appointment to her present position. She did not ask for it after her appointment.

The plan to do this existed in the present administration before her appointment. When she was appointed, she was invited to be a member of the President's Cabinet. Of course the possibility of having the plan depended in a large degree on the selection of an appropriate and outstanding individual to head the agency.

Thus, if you act favorably on this proposal, you can be assured the new status of Secretary in the Department will be carried on with leadership, ability, distinction, and grace.

I have with me Mr. William Finan, Assistant Director of the Bureau of the Budget, and Mr. Fred Levy, of his staff, who are available to provide you any technical or historical aspects of this proposal.

Senator Smith of Maine. Thank you, Mr. Dodge.

I understand that you believe the plan does not take away any of the statutory functions vested in the present Commissioner of Education or the Surgeon General. Could you point out exactly where this is covered in Plan No. 1 of 1953 ?

Mr. FINAN. Section 5 of the plan.

Senator Smith of Maine. Will you read the part of it that pertains to that particular function?

Mr. FINAN. Yes. Section 5 of Reorganization Plan No. 1 includes a provision to the effect—and I quote:

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.

The effect of that provision is to transfer the Public Health Service and the Office of Education intact to the new Department, in contrast, for example, to the transfer of the functions of those agencies to the Secretary of the new Department.

Senator Smith of Maine. Mr. Dodge, how many additional positions or top positions are created by this change over what we now have?

Mr. DODGE. There is only one addition in the form of the special assistant to the Secretary for Health and Medical Affairs.

Mr. HOLTZMAN. Mr. Chairman, over on this side of the table we are having great difficulty in hearing. I wonder if the witness and those who question the witness will speak just a little louder.

Mr. McDONOUGH. The same applies to this side of the table. We can't hear.

Mr. DODGE. The question was, I believe, What additions were provided to the official staff?

According to the schedule I have before me, there are the same number of positions with one addition, the special assistant to the Secretary for Health and Medical Affairs to be appointed by the President and confirmed by the Senate. Otherwise, in number they conform to the present offices of the Agency.

Senator SMITH of Maine. Mr. Dodge, to what extent will this plan eliminate overlapping and duplication? I ask this question particularly because we expected through the Unification Act in the Mili

tary Defense Deartment that we would not have any overlapping and duplication, and it hasn't seemed to bring too good results, and I wondered if you had worked that out.

Mr. DODGE. Well, the general approach is to strengthen the administrative staff of the Agency and provide the Administrator with the officials, make available to the Administrator officials with a standing in the Government which has been heretofore impossible, and therefore make it possible to acquire people of higher standing than we have had before for these positions.

The general results are in the improvement of administration and coordination within the Agency. We can delegate authority to a degree that did not exist under the prior system of organization.

The major functional agencies, however, are not altered in their relationship to the Agency itself or the Administrator.

Senator Smith of Maine. Have you made any estimate as to the financial saving that will come from the reorganization plan?

Mr. DODGE. It is impossible at this time to measure financial savings that will come from improved administration, particularly when it has not been put into effect.

Senator Smith of Maine. Mr. Chairman, we have here the subcommittee of the Senate, Government Reorganization. We have also the chairman of the full Committee on Government Operations, Senator McCarthy. If it meets with the approval of your committee, yourself and your committee, I would suggest that we alternate the questioning between the House and the Senate members rather than, as you so generously offered, permitting the Senate to ask questions first.

The CHAIRMAN. Very well.
Senator SMITH of Maine. Then will you take over from here?
I will have questions later on, perhaps.

The CHAIRMAN. Mr. Fountain, of North Carolina, have you questions?

Mr. FOUNTAIN. Yes, Mr. Chairman.

Mr. Dodge, what is the substantial difference, if any, between this plan now being submitted by the present administration and the plan which was submitted by the previous administration to give this Agency a departmental status?

Mr. FINAN. With your permission, Mr. Chairman, I would like to answer that question for Mr. Dodge.

The CHAIRMAN. Have you identified yourself?

Mr. DODGE. I identified him. Mr. Finan, Assistant Director of the Bureau of the Budget.

Mr. FINAN. There is, as I am sure you are all aware, a great deal of similarity between this organization plan and 2 reorganiz tion plans which have been submitted in past years, 1949 and 1950, to be exact, which, generally speaking, had the same or a very similar purpose, and both of which were defeated.

I can deal with this in a summary manner, and I think I can cover the major points that would be of interest to the committee.

The 1949 plan would have established a new department, as is the case with the plan before you today, and would have changed the name of the Federal Security Agency and constituted it an executive department.

The same is true of the 1950 plan, except that the name that would have been given the department was different from the 1949 plan, but almost identical to the plan you have before you today.

Another major point in connection with these plans is the effect of the reorganization plans on the functions of the proposed new department. In the case of the 1949 plan, it would have consolidated all functions in the Secretary with the power of delegation. In the case of the 1950 plan it would

have continued the same distribution of functions as obtained in the Federal Security Agency except for certain authority to centralize common services.

The plan before you today is very similar in that respect to the 1950 plan, but fundamentally different from the 1949 plan. All three of these plans would have created a Secretary and an Under Secretary. In the case of Assistant Secretaries, the 1949 plan would have created 3; the 1950 plan would have created 1; the plan before you today would create 2.

In the case of an Administrative Assistant Secretary, only the 1950 plan would have created such an office; neither the 1949 plan nor the plan before you today would do so.

In the case of the Surgeon General of the Public Health Service, neither the plan before you today nor the 1949 plan made any particular provision. The 1950 plan would have abolished the orice of Surgeon General and established a new office with the same title, would have permitted appointment of a person other than one from the commissioned corps of the Public Health Service, but having appropriate professional qualifications.

In the case of the Commissioner of Education, neither the 1949 plan nor the 1953 plan contain any specific provision on that point. The 1950 plan would have abolished the office of Commissioner of Education and established a new office with the same title, would have required the person to be appointed Commissioner to have appropriate professional qualifications.

In the case of the Commissioner for Social Security, there was no provision affecting that office in the 1949 plan. The plan before you today abolishes that office and creates a new office to be known as the Commissioner of Social Security and changes the method of appointment from appointment by the Federal Security Administrator to appointment by the President by and with the advice and consent of the Senate. In the case of the 1950 plan, provision was made for a Commissioner of Social Security appointed by the President and confirmed by the Senate from among persons with appropriate qualifications.

Today's plan contains a provision for a Special Assistant for Health and Medical Affairs; neither the 1949 plan nor the 1950 plan made any provision for such office.

Senator Smith of Maine. Mr. Chairman, will the gentleman yield for an insertion in the record? I have here, prepared by the staff of the Senate Committee on Government Operations, a comparison of these reorganization plans that I think might be well to include in the record for further study.

Mr. FOUNTAIN. That will be perfectly all right.
Senator SMITH of Maine. Yes; without objection.

(Comparison of reorganization plans by Senate Committee on Government Operations and exhibit B are as follows:)

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