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pro bono by over 300 companies, only 1 person is on the Government payroll.
Now, Mr. Chairman, we have been sensitive to the need for every member of the survey to observe all legal requirements relating to the disclosure of information and conflict of interest. Members of the Executive Committee have submitted the required information to the counsel to the President and to the various agency counsel who have cooperated in procedures to insure that every executive committee is properly cleared for participation in his or her assigned areas.
We have also complied with all legal safeguards required by the Commerce Department concerning task force and other staff members of the survey, including signing of nondisclosure agreements. In addition, we consider it important to adopt additional measures to guard against possible or even apparent conflicts of interest. This includes submission of additional personnel and financial information by each task force member which is being reviewed by the project managers and the survey's legal staff.
Mr. Chairman, I believe I have covered all the areas in your letter, and I hope I have covered the chronology and background and operation and organization and formation and population of the Private Sector Survey. Therefore, this concludes my statement. Thank you very much.
The CHAIRMAN. Thank you, Mr. Larkin.
The CHAIRMAN. The charter of the Executive Committee requires them to meet at least monthly. That is the language in the charter. Why have there not been any meetings?
Mr. LARKIN. I do not think that is quite accurate, sir. I think it says it expects that there would be monthly meetings of the committee. We have not reached a point of a final product or recommendations which we feel justifies a meeting, and therefore we have not held it as yet. In due course, and under the proper circumstances, we expect to hold meetings.
I might add that each or most of the Executive Committee members are engaged as cochairmen of individual task forces that are functioning. But there has not been an overall committee meeting as yet. As I say, there have not been any conclusions recommended as yet, so we do not feel there is a necessity for such a meeting at this point.
The CHAIRMAN. I am looking at the provisions of your charter. It says in paragraph D, section 4, “The committee or subcommittees thereof is expected to meet at least monthly before the final report and recommendations are submitted to the President." I do not think that means 1 month before they are submitted. I think that language tracks the Federal Advisory Committee Act, which was passed back in 1972, which dealt specifically with endeavors of this kind and sought to provide some guidelines, one of which is that there would be regular meetings by the group and that those meetings would be public meetings. I have no quarrel with that. I am just curious as to why that process is not yet in place.
Mr. LARKIN. We recognize the requirements of the Federal Advisory Act, that when there are meetings dealing with substance of one kind or another, they must be public meetings. The fact that the lawyers put in here that they "expect” them, it was not very practical, and we do not feel we have reached the progress where it justifies it. When we do, we will certainly have the meetings, and we will go through the proper procedures of a notice of public meeting and so on. The complexity of this whole enterprise and the nature of the public financing that we have had to do for this and our own private sector financing have consumed a great deal of time. The organizational effort has been prolonged, and we have found no way to shorten it. So while we are in this organizational stage, there was no product which we felt justified calling a meeting. That is the reason.
The CHAIR: N. You have accomplished a great deal already in putting together material and identifying your priorities for study. The Executive order did not come out until June of this year. Most of the work has been done within your company. One has to assume that you started that some time before the Executive order in June, or else you performed some sort of a miracle in the short period of time.
Mr. LARKIN. That is correct. We certainly did. We started early, before the Executive order was signed, and we did it as an effort to get a headstart when as and if it became official. It took a lot of time and a lot of people. We had some 36 analysts doing much of this work, poring over all these budget materials. So we regarded that as background information and research. It was all taken from public information, both the Federal budget as it has been published over these many years, the recommendations of the GAO, the OMB, all public, and we did it in an effort to streamline the consideration that was going to be taking place.
This work was done, by and large, before the Executive order was issued. If in fact the Executive order had not been issued, we would have probably thrown all the material away or maybe given it to somebody else.
The CHAIRMAN. If you will excuse me, apparently we are going to have at least one vote and possibly another 5-minute vote. We will return as quickly as we can. I hate to take your time. Mr. LARKIN. Very well, sir. We will await your return. (Recess taken.]
The CHAIRMAN. We are very sorry to have been caught with a series of 5-minute votes on the floor, but I would like to go ahead because this room is scheduled for another meeting of the committee at 1:30. I know that it is an imposition on the witnesses, but I know of no other way to be able to proceed without losing our available time to some time during the middle of the October rush which will set in around here.
The Executive Committee is broken up, if you will, into task forces with members of the executive committee serving as cochairmen of the task forces. They are broken out, 18 of them by departments, and the balance of them by governmentwide functions; is that roughly the way it is? Mr. LARKIN. That is right. Yes, sir.
The Executive Committee members, I think you can understand, function as members of the overall top Executive Committee, when, as, and if it will function. They specifically asked them to
ride herd on these different task forces, so we have the top talent directing them.
The CHAIRMAN. The employees of the task forces are actually employees of some of the cochairmen, through their corporations?
Mr. LARKIN. They are in some cases, yes. In some cases, they have been recruited by the cochairmen by other companies. So they are a mixture. But in any event, all of them are without cost to the Government. I must say, Mr. Chairman, I am really very gratified for the caliber of these people, to the extent I have talked to them and observed them. In the first place, we have the project manager who is really doing the detailed supervision, and then these other members of the task force. They are all mature, experienced people. They are giving their time. They are very dedicated. I did not think in the beginning that we would be able to secure as many good people as we have. But you are correct; they have been secured by the cochairmen, some from their own companies and others from different companies, and from management consulting firms, from accounting firms, from engineering firms, and so on. They represent a wide spectrum of talents.
The CHAIRMAN. The criteria you use for the recruiting, as I understand your statement, since you are interested in the operation of programs not the substance of programs, and examining the way in which the executive branch handles mandated responsibilities rather than the value or wisdom of the program itself, are that these people are assigned on the basis of their ability to examine management practices rather than the substance of the agency's work?
Mr. LARKIN. Yes, sir, that is correct.
The CHAIRMAN. So we would not expect that the people examining the activities of the Department of Energy, for example, would have any particular expertise in the petroleum industry or in energy production or in energy conservation or any of those fields?
Mr. LARKIN. That is right. We do not intend to address ourselves to whether there should be a subsidy for the tobacco industry or the dairy industry or anything else. What we are looking at is how well they are being operated, how efficient they are, or are there inefficiencies that we think might be corrected. So we do not regard it as our role to question the existence of a program or the size of a program. If the program is big or little, or whether it should exist or not, is in our view the role of the Congress and the administration, not ours.
The CHAIRMAN. I have before me a work plan for the task force on the Office of Personnel Management: This, of course, kindled my interest because it is an area where, as a matter of fact, we have been working. Looking at this work plan, I find no indication of their intention to check with this committee, for example, which has just spent close to $100,000 with a private corporation to examine the operation of the Federal employees health benefit program from a professional point of view. They've just, within months, issued a very voluminous and detailed critique of everything, including the actuarial techniques that are used over there.
To what extent are the task forces availing themselves of work that is ongoing or fairly recently completed by committees such as ours, which would overlap what you are trying to do here?
In other words, you have a list of all these executive examinations for years and years, but here is one where we went outside the Government and hired one of the outstanding firms in the insurance field that does this for General Motors and similar modest clients on the outside. We said, “Do for us what you would do for them, and tell us how this thing is operating, and whether it is operating well; and where it isn't, why, and what ought to be done about it.” Yet there is nothing I see linked in here that would make readily available to you, either with a connection between your employees and the agency or the agency itself, even knowledge that this kind of recently purchased study was available. How are you taking care of that?
Mr. LARKIN. Mr. Chairman, do I understand you to say that you have the work plan of the personnel task force?
The CHAIRMAN. Yes, I do. That is not unusual in this town.
It raises some other questions. You have titles like “Opportunity and Brief Background,” “Estimated Savings or Improvements," "Estimated Man-Weeks Required of Task Force To Reach Final Report and Recommendation.” The first item is “Civil Service Retirement Systems, Estimated Savings." The report suggests changes aggregating $23 billion, over the period 1983–87. No one seriously considers that you are looking at a more efficient checkwriting machine over there that is going to save $23 billion in Federal pensions from 1983 to 1987. And if all you are doing is examining the administration of programs and not the content of programs, how can you start out with that kind of a presumption this early in your studies, before you even have had a meeting of any committee?
Your work plan says that in 16 weeks, you will be able to finish over there. Then you go on and talk about the specific breakdown of where the concerns are, the level of costs, the exclusion from the Federal Pay Comparability Act, and departure from private sector policies and practices. Now, if private sector policies and practices are being examined with respect to how we administer this program as an employer-that is what I understand you to have described you are going to do. But if private sector policies are going to be examined to see whether the Federal pensions are better than or less generous than or whatever else you might do to compare them, then that it seems to me is outside what you have described to the committee you set out to do.
I do not raise that to quibble, because going through this entire outline, you go to the Federal Employees Health Benefits Planand that is the one that first caught my eye because we have just had Mercer & Co. study this for us—and you draw the conclusion, "Private sector experience indicates savings of between 15 to 30 percent not uncommon just from improved claim control procedures.” Now that is something that as a matter of fact was talked about in the report. There was a very detailed description of what is wrong with the way in which they do it now. You could answer that for yourself very quickly by your staff simply asking us if we have anything cooking.
Mr. LARKIN. In response to that, Mr. Chairman, let me say that I am happy I am not responsible for making available the work plan, because I do not know what my responsibilities or authority are. But beyond that, we have on many of the task forces, in addition to all the other research background materials, have secured studies that have been made by the congressional committees. We are delighted to have them, and if we have missed this one, I could very much appreciate it if we could secure it. I will see to it that it is incorporated in the-
The CHAIRMAN. That is not my problem. I am not endorsing the work of Mercer & Co. as the last word. I raise that as a question about what direction you are taking to try to get at it. You know, some of us have spent a good part of our lives trying to figure out how these things work in the bureaucracy, under various administrations. While Presidents come and go, there is a constant in the bureaucracy out there of some sort that becomes almost predictable after a period of time, and we have learned something about where to go to find inefficiency. For political reasons and other reasons, those inefficiencies are not always corrected, but they are, nevertheless, frequently identified.
Mr. LARKIN. I think we should all recognize that the problem is that these work plans are kind of fluctuating guidelines for planning and so forth. We have changed some of the items as we go. I have been very cynical about these raw estimated-in-advance savings, and I want to make certain that they are well documented. I would say in that regard, I would welcome an exchange with your committee and your staff. We do not pretend to know everything, and anything that you can help us with or educate us with would be most welcome. So if we can work out a liaison of that kind, I am sure our final product will be improved by what you can help give us.
The CHAIRMAN. I am looking at this work plan, and I see under the description of “Opportunities” you have several areas of concern. But let me read you what item D(2) is:
Social security coverage now includes nine out of ten American workers, including the self-employed, professional workers, members of the clergy, and some Government employees at Federal, State, and local levels. The exclusion of some 2.7 million Federal employees would appear to demand compelling reasons.
Would appear to whom to demand compelling reasons? This suggests that whoever wrote these directions for your people has reached the conclusion that everybody in the United States should be covered by social security, and if there are 2.7 million people who are not, there ought to be a reason why they are not. Now, the President of the United States has appointed a Commission which will report to him this winter, before the end of the year, on precisely that issue. Federal employees, as you well know, dealing with this committee, are more than slightly concerned about what conclusions that Commission is going to reach. You have prejudged the issue at this point, it seems to me, and I am curious about where the direction came from. Who puts this together to begin with? Who decides that this is the direction that the task force is to go in?
Mr. LARKIN. The task force members and the project members, after their discussions with the different agencies and studying all this background material, outline these things. They are not final, they are not conclusive, and before recommendations are adopted, they will have to be documented, and I think we will have to un
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