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I may make this observation about this plan. After this Department is created by this plan, if it becomes effective, there are other reorganization powers conferred upon the President by the Reorganization Act under which he could immediately, by another reorganization plan submitted to the Congress, transfer the public health services or any other function or agency of this Department to some other department; or he could transfer any other function or agency into this Department. In other words, this, as I interpret it, serves as the base, creates the base; and thereafter it can be further studied, with the idea of possibly transferring out some agencies or transferring others in. But this creates a new department. After it is created, then further studies can be made with respect to what other agencies of functions of Government should be placed under this Department and what agencies and functions which it now has as an independent agency might be transferred to either some other department or some agency. I think that is correct.

We thank you very much for your testimony regarding plan No. 1. Mr. PACE. Thank you, Mr. Chairman.

The CHAIRMAN. Mr. Ewing, will you come around?

We have with us this morning Mr. Oscar Ewing, Administrator of the Federal Security Administration, who will testify as to plan No. 1 and also, later, as to plan No. 2. You may proceed, Mr. Ewing.

STATEMENT OF OSCAR R. EWING, FEDERAL SECURITY
ADMINISTRATOR, WASHINGTON, D. C.

Mr. EWING. Mr. Chairman and members of the committee, at the outset I wish to subscribe to everything Mr. Pace has said, but perhaps I can amplify his remarks and illustrate out of personal experience why I believe that Reorganization Plan No. 1 is an important step in the improvement of the structure of the executive branch of the Government.

I understand some of the opponents of Reorganization Plan No. 1 accuse me of being its author in order to blow up my own position. This, of course, is not the fact. The original suggestion that the welfare activities of the Government be given departmental status was made by President Harding, and President Truman had sent three messages to Congress urging that the Federal Security Agency be given departmental status before I ever became Administrator. During the recent Presidential campaign, Governor Dewey urged the establishment of a Department of Welfare and ex-President Hoover has already appeared before your committee and endorsed Reorganization Plan No. 1. I can assure you that I have in no way influenced the views of these gentlemen.

It is important at the outset to realize just what Reorganization Plan No. 1 does. There are two very simple results that the plan will accomplish;

1. It will convert the Federal Security Agency into a department known as the Department of Welfare; and

2. It will give the Department of Welfare an "integrated" type of organization as distinguished from the "holding-company" type of organization that still exists within the Federal Security Agency.

Reorganization Plan No. 1 merely gives departmental status to an existing Government agency. No new activities or functions are added or subtracted. The Department of Welfare will simply continue to carry on the identical activities now being conducted by the Federal Security Agency, except, of course, as they may be modified by plan No. 2 and other plans that may be subsequently submitted and allowed to go into effect.

So far as I am aware, no one questions the fact that the functions of the Federal Security Agency are important enough to warrant departmental status. I believe there is general agreement with the view expressed by this committee in its report to accompany the Reorganization Act of 1949, S. 526. In explaining its recommendation to permit the creation of departments by reorganization plan, the report stated that the Federal Security Agency when originally established by a reorganization plan was obviously

of departmental magnitude and importance and should have been designated as an executive department.

So far as I know, there are no serious objections to the establishment of a department to take over the activities of the Federal Security Agency. Such objections as have been made from time to time are not based on any doubt as to whether the Government's activities in health, education, and welfare fields warrant departmental status. Arguments have, however, sometimes been made to the effect that each of the functions of health, education, and security is so vital as to warrant separate departmental status with a doctor, educator, or social worker as secretary. These arguments stem almost invariably from a professional group interested in one or the other separate fields of activity. Such arguments ignore the fact that governmental programs must be administered to serve the citizen, not exalt the professional. It is the well-being of the individual, not control by doctors, educators, or social workers, with which the Government's health, educational, and social-security functions are primarily concerned.

It is also sometimes urged that the fields of health, education, and security are so different that they require different types of professional staff and that a combination of all of these activities in a single department would involve such a large grouping of functions as would necessarily result in ineffective administration. It is also argued that at the State level it is customary to establish separate departments of health, education, and welfare and that State and local activities could be better coordinated with similar Federal activities if the Fed'eral organizational structure followed that already established by local and State governments. One answer to this is, I think, that at the State and local levels the activities of health, education, and security are carried on by operating units, whereas in the Federal Government these activities mainly involve research, advisory services, and the administration of grants-in-aid.

But regardless of the merits or demerits of the "separatist" point of view, I do not think these objections can properly be made to the plan now under consideration. All this plan does is to give integrated departmental status to an existing governmental agency. The plan neither adds nor substracts any functions. So far as the plan is concerned, the new welfare department will merely carry on the identical functions now conducted by the Federal Security Agency and in no way commits the administration or the Congress as to what may hereafter be put into the Department or taken from it. One may argue, at the appropriate time, whether some of the functions now in the Federal Security Agency should be vested in an agency or department other than the proposed Department of Welfare, but nothing in this plan prejudges those issues. In this respect I call your particular attention to the name of the new Department. More than any single fact, the name "Welfare" emphasizes the fluidity of the new Department so far as the future is concerned.

In connection with the name of the new Department, I know that some question has been raised as to the desirability of the name that was chosen. I am inclined to think that "Department of Welfare" is the best of those names that have been proposed. Webster defines the word "welfare" as meaning:

State of faring, or being well; especially condition of health, prosperity, etc.; negatively, exemption from evil or calamity.

It is true that the word "welfare" has come to have a secondary meaning which is narrow, connoting, generally, the relief of the indigent. As used in plan No. 1, the word is intended to have its inherent broad meaning. In that sense the word is a full and accurate description of the functions with which the new Department will be vested. The very scope of these functions will underscore the fact that the word "welfare" is used in its basic and inclusive sense. Furthermore, "welfare" is the name given to the new Department in bills introduced by Senator McCarthy and Representative Hoffman, which, I understand, were drawn by consultants for the Hoover Commission.

It may be asked just why I consider it desirable for the Agency to be given departmental status-just what the organization or its head could do if it were a department rather than an agency. It is true that no new functions are added and no new substantive authority is conferred on the Department. I think, however, I can show the importance of departmental status by relating an experience of my own as Federal Security Administrator.

You will recall that the National Security Act of 1947 (Public Law 253, 80th Cong.) setting up the National Military Establishment, provided for a National Security Resources Board with broad over-all planning authority for mobilization in case of war of the Nation's military, industrial, and civilian resources. The act provides that the Board be composed of representatives of such executive departments and independent agencies as may be designated by the President.

Now, if any one agency in Government has primary responsibility for the human resources of the country in time of war, it is the Federal Security Agency. During World War II, the Agency undertook many important war programs in the education, health, and welfare fields. Thus, the Agency gave training to 7,500,000 enrollees in courses supplementary to employment in war-production industries or in course preparatory to such employment. This training program broke the industrial bottleneck of untrained and insufficiently trained personnel for war production and contributed mightily to our output of tanks and guns and planes and ships. During the war more than 1,500,000 men and women received special training for technical and scientific work in war industries in higher-education courses conducted under the sponsorship of the Federal Security Agency. More than 4,000,000 rural youths and adults were enrolled for the rural warproduction training program. In all these courses, more than 13,000,000 people were trained. Our Public Health Service was instrumental in providing health and sanitation services in the environs of military and industrial establishments, particularly in regard to control of venereal disease, malaria, and food sanitation. We carried on a cadetnurse program which increased the annual enrollment of sorely needed student nurses to more than 65,000. We did extensive medical research, particularly in tropical diseases, malaria, and so forth. The Children's Bureau administered the emergency maternal and infantcare program, giving care to 1,223,000 wives and their new-born babies and additional pediatric care to 231,000 babies of servicemen during the first year of life. The Food and Drug Administration materially assisted in the inspection of the food and drug supplies for our armed forces. We had responsibility for carrying out a temporary war civilian security program which included plans for the care and feeding of large numbers of persons in stricken areas and the mass evacuation and reception of individuals from areas affected by enemy action.

These things we did in World War II. How much greater would be our responsibilities should there be another war, with every probability that the civilian population would be directly under attack? Yet when the membership of the National Security Resources Board was designated, it was limited to Cabinet officers. The President had very good reason for making this decision. By limiting membership to the Cabinet, a line was established which made it possible to hold the size of the Board to workable proportions. If the President designated one agency outside the Cabinet, there were several that could make strong claims for membership. The fact remains, however, that in case of war, the human resources of this Nation are the primary concern of the Federal Security Agency and its head should be given such status as will permit him to particpate in original mobilization planning.

There is another example of the advantage that would come from Cabinet status. It may seem to be a small thing, but the mere ability to attend Cabinet meetings, to join with the President and the other department heads at the weekly Cabinet luncheons, to see the President informally twice a week, can contribute immeasurably to a department's efficiency and its capacity to do its job. It then becomes possible to discuss with the President so many matters that are not important enough to justify imposing on his time by asking for special appointments.

Reorganization Plan No. 1 will give the Department of Welfare an integrated type of organization.

When the Federal Security Agency was established in 1939, it was recognized that there was an interrelation among the various programs to be carried out but the organizational structure left the units intact and merely gave the Administrator supervision and direction of their activities. Thus the Agency was given a holding-company type of organization as distinguished from the integrated type of organization where the substantive responsibility for the performance of administrative activity is vested in the department head.

Experience has shown both the President and the Congress that the holding-company type of organization for the Agency was not

altogether satisfactory. The President, in Reorganization Plan No. 2 of 1946, vested in the Federal Security Administrator the functions of the Children's Bureau, the United States Employees' Compensation Commission, and the Social Security Board. This vested the substantive authority in the Administrator as the head of the Agency rather than in the constituent units. The supplemental Federal Security Appropriations Act for 1949 had the effect of transferring certain activities from the Commissioner of Social Security to the Office of the Federal Security Administrator. While neither of these actions resulted in any vital alteration in the identity of organizational units, nevertheless they indicated dissatisfaction with the previously existing holding-company type of organization which merely reserved to the Administrator the power of direction and supervision. Reorganization Plan No. 1 carries these tendencies to their logical conclusion and vests in the Secretary of Welfare all the functions of the Federal Security Administration and of all officers and constituent units of the Federal Security Agency, with authority in the Secretary to delegate such of his functions as he deems appropriate. By this means the new department will be an integrated department, which is recognized by both the President and Congress as the most efficient type of departmental organization. It gives the new Secretary authority to organize his department and it places him in control of its administration. It removes all barriers to making the Secretary fully responsible to the President and the Congress for the conduct of his department. It creates a clear line of authority reaching down through every step of the organization so that no subordinate has authority independent from that of the head of the department. It conforms exactly with recommendations No. 14 and 18 of the first report of the Commission on Organization of the Executive Branch.

So far as I know, there is no objection to giving the Department of Welfare an integrated type of organization.

As an example of the difficulties of operating under a holding-company type of organization, I would like to tell about the situation we ran into in connection with the resignation of John W. Studebaker as Commissioner of Education. Under the statute, the Commissioner of Education appoints the Deputy Commissioner who becomes the Acting Commissioner upon the resignation of the Commissioner. At the time Studebaker advised me that he intended to resign, there was a vacancy in the office of Deputy Commissioner and Studebaker proposed to name a man for that position whom I did not want to serve as Acting Commissioner. There was a serious question as to what I could do. Our lawyers finally came to the conclusion that I could refuse to approve the appointment of Studebaker's man as Deputy Commissioner but that there was no way in which I could compel Studebaker to appoint the man that I wanted to serve as Acting Commissioner after Studebaker's resignation. Finally, after some days of negotiation, Studebaker did name the Deputy Commissioner that I wanted. You can see, however, that a most embarrassing situation might have been created if I had been forced to accept an Acting Commissioner with whom I felt it would be difficult to work.

I am confident that an integrated type of organization will result in substantial savings. I do not want even to estimate the amount of such savings, but I can give you an example that will illustrate what can be done.

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