Authority, the accounting firm had to give it up and state that all they could do was to make a report of the delinquencies and deficiencies in the accounts.

Senator FERGUSON. Of course, this same Government that insists that everybody else have their books in shape to audit has grown to an extent that they can't audit their books. Isn't that about what has happened?

Mr. SMITH. That's right.

Senator FERGUSON. There, again, bigness comes in.

Mr. SMITH. If a private corporation presented to the Bureau of Internal Revenue a set of books which they said they could not balance "We don't know where a million dollars of these checks are”the Government would prosecute the company's officers within 24 hours for violating the securities law, the Internal Revenue Bureau law and everything else. Yet we have erected a colossus so big and so sprawling that it no longer can take care of the money placed in its care as a public trust. I think that indicates once again that Government is so big that the capacity to deal with the matters in its jurisdiction has gone beyond its control.

The same thing is true with the Interior Department as far as the Reclamation Bureau is concerned. They have no control over their funds. It is impossible to get an accounting of the details of their obligated, unobligated, carry-over, and all of the balances they try to carry at one time in their accounting sheets. Hearings have been going on now for months to determine these details and the picture is more confused than ever.

Congress will soon pass a civil service retirement bill-it is now reported from conference-which is an excellent bill. I helped and worked on this bill in an effort to bring it within the area of prudent cost of operation. My experience demonstrates beyond any question whatever that Congress does not have the slightest idea of what the bill is going to cost over the next 20 years. No statisticians, no actuaries, none of them can give any reliable facts at all on what the bill is really going to cost. They have guesses; they have estimates based on all sorts of flexible qualifications but if you said, "How much is this going to cost out of pocket for the next 10 years," they cannot tell you. Senator FERGUSON. Hasn't it finally become one of those mandatory items that Congress will not be able to help itself on? Isn't that true? Mr. SMITH. That will be another one of those inflexible items over the next score of years which you cannot change.

The CHAIRMAN. We have them now. You were saying Congress can exercise control over only one-third of our annual expenditures. I think that is a very high estimate. You realize there is an amount of several hundred million dollars a year in railroad retirement payments and social security payments, which are considered as Government expenditures. Refunds on taxes come each year. That is an inflexible amount. I think you will find you can reduce your onethird to no more than 20 percent over which Congress actually has much control, to the extent that it can vary those appropriations substantially up or down.

Mr. SMITH. That's right, sir.

The CHAIRMAN. I think it would be nearer 20 percent than 33 percent in the final analysis.

Mr. SMITH. Now, that is a dangerous position in which to place the Federal finances. Since these things are inflexible, since you cannot cut them very well, they must be financed in some way. If there should be the slightest drop in the national income, 10 or 15 percent in the national income, this burden of $40,000,000,000, two-thirds of which or more is inflexible, is likely to be a stone upon the neck of the Federal Government. The Government will have to go into deficit financing with a will and that will increase the Federal debt from $256,000,000,000 to well over three hundred-some-odd-billion. It will be necessary to borrow for day-to-day maintenance of Government. How long could that continue before the very fiscal solvency of the Government is in danger? It was President Roosevelt himself who said that more governments have foundered on the rocks of loose fiscal policies than have lost their powers in any other way. And here we are rapidly approaching the stage where Federal finances are beyond control.

May I conclude my statement by saying that notwithstanding the evidence that a law of diminishing returns is actively at work in the field of Federal Government, the pressure for Congress to extend itself further continues unabated. Not a session of Congress occurs but what hundreds of bills are filed to extend Federal activities and some of these bills are passed.

Summarizing the condition Congress faces, I would say first, there are unmistakable evidences that the work load of Members of Congress `has increased beyond the capacity to deal with it wisely and efficiently. The work load is beyond effective legislative control. Second, there are unmistakable evidences that the accumulation of Federal services and functions has increased beyond the capacity of the executive department to deal with the work load. The executive department is deteriorating in responsibility, efficiency and control. The two developments constitute a danger to the stability and welfare of the country.

This committee is definitely interested, in my mind, in good and efficient Government. I believe the committee is challenged to find ways and means not only of improving congressional machinery but also of reducing the magnitude of Federal operations.

To achieve an absolute reduction in the work load of Members of Congress, and at the same time to repair the deterioration in the responsibility and efficiency of the executive departments, simultaneous action may be taken along four lines.

1. Further improvement of Congress: Continue to improve congressional machinery and procedures as commenced with the Reorganization Act of 1946.

2. Eliminate or return functions now federalized: Commence a systematic series of studies on the services and functions undertaken by the Federal Government in the last 25 years to determine which of them can be eliminated, or returned to States, to localities and to private operations. (To what extent will the Hoover Commission on Organization of the Executive Department study this field?)

3. Develop new instruments of public administration: Commence another series of studies to explore the possibilities of developing new regional or functional instruments of public administration in fields not wholly Federal and yet not wholly State and local-instruments to be set up independent of Federal responsibility and thereby capable of removing part of the work load now on Members of Congress.

4. Advisory Council on Federal Legislation: Create a permanent Congressional Advisory Council on Federal Legislation to study and report on all bills which propose new Federal bureaus, agencies, services and functions. The Council may be composed of full-time experts in the field of agriculture, industry, labor, finance, natural resources, transportation, communications, education, veterans' services, public health and welfare. A staff member from each standing committee in House and Senate should be assigned to work with the Council. It should be the prime duty of the Council to screen Federal legislation which proposes new bureaus, agencies, services, and functions, and to recommend ways and means of dealing with the problems therein at regional, State, local and private levels.

I know Members of Congress work tremendously hard; you do miracles in the way of public business; and yet I think you will admit that a large number of these problems are getting beyond the attention that you would like to give to them.

Senator FERGUSON. Mr. Smith, would you say that the same thing is true in the international field? It seems to me some of the smaller nations must find it so difficult to provide personnel just to carry on their international obligations which we are also creating in a large volume. I think it is shown here on the record that we belong to 123 international organizations now. It is a problem to carry out those functions. Luxemburg may belong to the same number. We contribute to 44 of these international organizations. So we are not only increasing the size of Federal Government but of international government and we face all these problems from business to government to the international government of the question of bigness.

Mr. SMITH. Yes. I say that just as overextension in any other quarter will threaten a break-down, the overcentralization of Government can produce the same result for a whole country with an irreparable loss to the security and welfare of its people.

Senators, I have no more to offer this morning. You have been very kind to let me have as much time as I have had, and I thank the committee.

Senator FERGUSON. We appreciate greatly your contribution here this morning.

(Mr. Smith submitted the following paper:)

STATEMENT OF GEORGE H. E. SMITH, SECRETARY AND STAFF DIRECTOR, MAJORITY POLICY COMMITTEE, UNITED STATES SENATE, BEFORE THE COMMITTEE ON EXECUTIVE EXPENDITURES, UNITED STATES SENATE, FEBRUARY 18, 1948

I am pleased to appear here today at the request of the committee for the purpose of offering such observations as I may have on congressional performance under the Legislative Reorganization Act.

I hold the office of secretary and staff director of the Majority Policy Committee, but I speak solely in my individual capacity and not on behalf of the Majority Policy Committee nor for any of its members.

Since this is the first official appraisal of the Legislative Reorganization Act, I should like to make a few general comments and then proceed with observations on (1) policy making; (2) committee operations; (3) the legislative budget; and (4) the question of seniority.

GENERAL COMMENTS

1. The act was the most sweeping reorganization in congressional history. 2. The Republician minority in the Seventy-ninth Congress overwhelmingly supported the original bill.

3. Many desirable features approved by the Senate were stricken from the final bill by administration leadership in the House (Rayburn).

4. The 1946 election placed the responsibility for putting the law into operation on the Republican majority which acted with sincerity, efficiency, and good faith. 5. Representative Mike Monroney, who piloted the bill in the House, declared congressional reforms to be 50 percent effective. My own feeling is that the measure of success is considerably greater.

If the most sweeping reorganization in congressional history is 50 percent effective in one session of Congress, it is a remarkable achievement.

Congress is a complex institution in which all the deep forces of human relations are at work. It is also governed by rules and customs tested by years of experience. Any material change in a body so complicated must of necessity go through a period of transition while adjustment is made between the old and the new. In these circumstances, a 50-percent improvement in one session is a genuine record of achievement.

POLICY MAKING

One of the prime aims of those who sought to improve Congress was to provide machinery for determination of policy and for the formulation of a legislative program based on party responsibility.

The principal idea was to set up policy committees or a legislative cabinet in each house consisting of the majority leaders and the chairmen of committees. Liaison was to be effected between the policy committees of both houses and out of this leadership and procedure a clear legislative program was expected to emerge. Provisions along these lines were contained in the proposed bills for reorganization, but were stricken from the House bill, and finally failed of enactment in the Reorganization Act.

In a subsequent deficiency appropriation act, the Senate managed to include a provision for majority and minority policy committees with $30,000 annually for staff operations.

These Senate policy committees are now active. The House has continued its informal "steering" committees which are roughly comparable to the Senate policy committees. To provide staff assistance, the House provided for a "Coordinator of Information" with an appropriation of $60,000 annually.

The current situation on congressional policy making shapes up as follows: Majority and minority policy committees with adequate staffs are functioning satisfactorily in the Senate. They meet regularly each week. Any member of the Senate may appear before the committee to present his views. The policy committee coordinates its work with meetings of chairmen of standing committees and with party conferences. These meetings of chairmen of standing committees and of party caucuses or conferences are being held with increasing frequency. The Senate Majority Policy Committee has held meetings with the House Majority Steering Committee. Much progress has been made.

It is always easy to set up a perfect paper plan for congressional policy-making. It is quite another thing to make it work in practical conditions. I believe further advances in policy-making have to be left to time and informal experimentation. I would not at this time impede present progress by further legislation.

One thing in the Reorganization Act works against the principle of party responsibility and accountability for the legislative program. This is the situation relative to party ratios in committee memberships.

Committee membership before the Reorganization Act was sufficiently large to provide an adequate working margin for the party charged with responsibility for the legislative program.

The ratio of party representation (seven majority, six minority) under the Reorganization Act is too small to provide the control needed for party responsibility. The majority is held accountable for legislation which it does not have sufficient power in committee to develop.

To this extent present committee membership totals are not in accord with one of the principle aims of the Reorganization Act.

Committee total membership is also too small to provide working quorums. Yet the Reorganization Act prohibits proxies.

I do not know what the answer is to this problem. There is a meritorious conflict between the desirability of small committees and the need to fix responsibility for the legislative program. Present party ratios do reflect the total strength of each party in the Senate, yet the defection of a single member of the majority deprives the majority of its power to execute its policies.

I hope this committee will obtain other views on this problem. Certainly, it is one of the first requirements of good administration that those who are charged with responsibility for making a program should have the power to carry the program through the preliminary stages to the floor where it can be presented to the entire lawmaking body.

COMMITTEE OPERATIONS

I have very few comments to make on committee operations. I am sure this committee will hear in detail from committee chairmen on how the new committee system is working out.

Special committees

Except where clearly desired by the Senate itself, the policy of the Majority Policy Committee is to dispense with special committees in accordance with the Reorganization Act. This policy has been and is being carried out.

Space accommodations

One of the most annoying problems in committee operations is the lack of space for hearings. Everyone agrees that the Senate Office Building is bursting at its seams. The movement toward a new building has been started but progress will be dismally slow. Meanwhile, committee efficiency is hampered and tempers are constantly ruffled by the lack of space.

Pending a new building, much could be done to make the most of existing accommodations. There should certainly be a central clearinghouse (possibly in the custodian's office) for the daily use of committee rooms. With proper

scheduling, much of the present trouble over lack of space could be avoided. This is a problem I presume for the Rules Committee which has charge of room assignments, but indirectly the problem also affects committee staff morale and efficiency.

Joint hearings

In the field of committee operations I would urge this committee to make every effort to increase joint hearings by twin committees in House and Senate. The identity and integrity of committees of each House can be preserved while much of the time waste and annoyance in duplicate hearings could be avoided. Twin committees could simply meet together for the purpose of hearing the evidence once, and then study and report their conclusions separately to their own Houses. Uniform records and reports

I should like to see this committee design a few simple forms which would be used by all committee chief clerks to report committee business and activities. A master report form, like a daily log, would be of inestimable value in the appraisal of committee work loads and for the future improvement of committee efficiency.

Personnel adviser

In the interest of good staffing as well as sound personnel practices in professional and clerical help to Senators, I hope Congress will set up an office of personnel adviser.

This proposal was contained in the plans for reorganization, but was withdrawn in the face of small but spirited opposition. In my belief, the opposition was capricious and not well grounded.

There is a definite need for a skilled personnel adviser to build up a central reservoir of professional and clerical talent. His service would not go beyond the detailed administrative work necessary to find qualified persons, investigate their training and references, and make this information available to committee chairmen and other Members of Congress.

THE LEGISLATIVE BUDGET

The purpose of the legislative budget was to provide an over-all estimate of receipts and expenditures early in the session as a means of correlating the several appropriations measures and guiding the committees in their work.

While the majority will try a second time to comply with this provision of the act, the present form of the provision is unsatisfactory for these reasons:

(a) The time allowed for the job is too short. And yet if postponed too long, the purpose and usefulness of the legislative budget will be lost.