Historically, greater activity is experienced in this program during the last half of each fiscal year. This buildup is expected to surge in the last 3 or 4 months of fiscal year 1962 and has been included in the development of this estimate.

Obligations by major categories, fiscal year 1962: Actual, 1st 5 months, and estimated, last 7 months

NOTE. The requirements for the remainder of the year have been determined on the basis of past experience with consideration given to the increased obligational rates which normally occur in the last few months of each fiscal year.

Honorable chairman and members of the committee, I appreciate this opportunity to discuss with you today our supplemental appropriation requirements for the current fiscal year.

COMPENSATION AND PENSIONS

We are requesting additional "Compensation and pensions" funds to meet increasing pension caseloads and payments. Our request of $21 million for this purpose was reduced to $15 million by the House. Since submission of our estimates, payments have been slightly less than expected, and we now feel that the additional $15 million recommended by the House will cover our needs for the balance of the fiscal year.

MEDICAL CARE

Additional funds are required for “Medical care" to pay the cost of wage rate increases not included in the regular appropriation. Our supplemental submission estimates these increases for fiscal year 1962 at $8,670,000, of which we plan to provide $3,310,000 from savings within the medical care appropriation. Our net supplemental request of $5,360,000 was reduced to $4 million by the House. Since submission of our request, wage rate costs have been slightly less than expected. The reduced amount to be made available by the House action will not cover the increased wage rate cost we will need to pay this year. However, by prudent management, we feel that we will be able to effect some further savings within available funds to apply against those costs not covered by the amount provided by the House without adverse effect on our medical care objectives. The House has approved our requested increase in travel limitation of $50,000 which does not require an additional appropriation.

I, and members of my staff here, will be pleased to furnish you with any further information you may desire in connection with these additional appropriation requirements.

RESTORATION NOT REQUESTED

Senator MAGNUSON. Will you tell us what you are suggesting to us here? Do you suggest that we consider a request to restore the $1,360,000?

Mr. GLEASON. We do not request you restore any of it, Mr. Chairman. We think we can make additional savings that will give us the $360,000 that we would be short.

Senator MAGNUSON. So it will remain at the $4 million?

Mr. GLEASON. Yes, sir.

Senator MAGNUSON. Do you have any other items here?

Mr. GLEASON. No, sir.

Senator MAGNUSON. The House allowed you $15 million of $21 million increase requested for compensations and pensions.

Mr. GLEASON. Which is adequate.

Senator MAGNUSON. That is adequate?

TRAVEL LIMITATION

Mr. GLEASON. Yes, sir. The only other thing is the travel limitation of $50,000 which the House allowed.

Senator MAGNUSON. That is the same reason we have been listening to all afternoon?

Mr. GLEASON. Yes, sir.

Senator MAGNUSON. We will put them all in the record in full, and we wish we could question you a little more, but we do not have anything to question you about.

Mr. GLEASON. Thank you, sir. It is a pleasure to have this opportunity.

(Whereupon, at 3:55 p.m., Wednesday, April 4, 1962, the subcommittee recessed, to reconvene at 10 a.m., April 5, 1962.)

The subcommittee met 10 a.m., pursuant to recess, in room F-37, the Capitol, Hon. Spessard L. Holland (chairman of the subcommittee) presiding.

Present: Senators Holland, Hayden, Hill, Pastore, Monroney, Young, Saltonstall, and Dworshak.

DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE PUBLIC HEALTH SERVICE

DIVISION OF INDIAN HEALTH

STATEMENT OF DR. JAMES R. SHAW, CHIEF; ACCOMPANIED BY DR. HUSTON K. SPANGLER, DEPUTY CHIEF; HENRY V. CHADWICK, ASSISTANT EXECUTIVE OFFICER; HENRY L. DORAN, CHIEF FINANCE OFFICER; AND JAMES F. KELLY, DEPARTMENT BUDGET OFFICER

INDIAN HEALTH ACTIVITIES

Senator HOLLAND. The subcommittee will please come to order. We are hearing Interior Department matters this morning. Senator Hayden, who handles that bill and who is chairman of the full committee is here and will handle the various Interior Department matters which come up on this supplemental bill. Senator Hayden, will you take over, please?

Senator HAYDEN. Our first concern is Indian health activities. To meet unbudgeted salary increases for wage board employees in connection with Indian Health activities, the Public Health Service asks $267,000 additional for fiscal year 1961. The justification will be printed in the record.

(The justification referred to follows:)

INDIAN HEALTH ACTIVITIES

The 1962 supplemental requested of $267,000 is for salary increases of wage board employees.

The cost for unbudgeted wage board increases for 1962 are expected to amount to $369,000. Through the application of anticipated savings of $102,000 during the year, it is necessary to request only $267,000 for this purpose.

PAYMENT OF WAGE BOARD INCREASES

Senator HAYDEN. You may proceed, sir.

Dr. SHAW. Mr. Chairman and members of the committee, this estimate of $267,000 will permit the payment of wage board increases which were not provided in the 1962 fiscal year appropriation.

The Classification Act of 1949, as amended, in addition to other categories, excludes salaries of skilled and unskilled maintenance, dietary, and laundry employees. Hourly pay rates for these employees are authorized by departmental wage boards and are based upon periodic wage surveys of comparable industrial-type operations in the immediate geographic area.

This flexible pay system allows the Government to authorize hourly wage scales comparable to private industry in the area. It would be extremely difficult for the Government to recruit and retain these types of employees without such a method of paying prevailing rates.