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INDEPENDENT OFFICES APPROPRIATIONS FOR 1965

THURSDAY, APRIL 16, 1964

U.S. SENATE,
SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, D.C.
The subcommittee met at 8:30 a.m., pursuant to recess in room
S-128, U.S. Capitol Building, Hon. Warren G. Magnuson (chairman)
presiding.
Present: Senators Magnuson, Monroney, Saltonstall, and Allott.

U.S. CIVIL SERVICE COMMISSION STATEMENT OF JOHN W. MACY, JR., CHAIRMAN, ACCOMPANIED

BY L. J. ANDOLSEK, COMMISSIONER; WARREN B. IRONS, EXECUTIVE DIRECTOR; DAVID F. WILLIAMS, DIRECTOR, BUREAU OF MANAGEMENT SERVICES; W. B. UHLENHOP, CHIEF, BUDGET AND FINANCE DIVISION; AND JAMES A. HAMILL, CHIEF, BUDGET SECTION

BUDGET PRESENTATION Senator MAGNUSON. The committee will come to order. This morning we have the Civil Service Commission. Before proceeding I will place in the record at this point a summary of the justifications for the 1965 fiscal year estimates for the Commission compared with fiscal year 1964. SUMMARY OF ESTIMATES OF APPROPRIATIONS FOR FISCAL YEAR 1965

INTRODUCTION The Civil Service Commission submits herewith estimates of appropriations and fund requirements for fiscal year 1965 together with a comparative summary of amounts requested for fiscal year 1964:

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ployment by international organizations is up $34,000 over last year which is $634,000; and salaries and expenses has a $382,000 increase. That is the biggest item in your budget with the exception of the payments to civil service retirement.

All right, Mr. Macy. You have a statement. We will be glad to hear from you.

STATEMENT of THE CoMMIssion CHAIRMAN

Mr. MACY. Mr. Chairman and members of the committee, I would like at the outset to introduce my new colleague, Commissioner L. J. Andolsek who appears with me for the first time before your committee.

Senator MAGNUson. All right, we are very glad to have you, sir.

Mr. MACY. We appeared before the House Subcommittee on Independent Offices on }. 6, 1964, regarding our 1965 budget requests. The House committee has not yet issued a report. Therefore, my statement contains the same information as that furnished to the subcommittee of the House.

EMPLOYMENT LEVELS

With respect to employment in the executive branch, the President has established employment ceilings of 2,505,874 for June 30, 1964, and 2,503,935 for June 30, 1965. In establishing, these ceilings President Johnson made it clear that they constituted ceiling figures and not employment goals.

As he stated in his budget message, President Johnson has directed the heads of all departments and agencies to work toward reducing employment below these target figures. As a result, the Commission has an approved ceiling figure, as of June 30, 1964, of 4,125.

I have directed that the Commission's employment level be reduced to 4,079 by that date. This figure, 4,079, is the approved ceiling figure for June 30, 1965. It is expected that heads P. agencies and departments will take similar action in producing a decrease in the level of employment in the executive branch.

REDUCTION IN COSTS

During the past 2 years the Commission has achieved significant reductions in manpower, administrative, and operating costs. These economies, which I described to you last year, made it possible to assume new responsibilities and workloads without increased appro

riations and to absorb more than 40 percent of increased pay costs

in fiscal year 1963.

Although increased workloads in certain areas of the Commission's responsibilities are inevitable and beyond our control, we expect continued improvements and efficiencies to occur; and, in the spirit of President Johnson's desire to reduce Federal employment, we expect the overall employment of the Commission to decline.

I want to assure you that the Commission will continue to render essential services to the agencies and the public without impairment and will continue to seek ways to improve its operations.

I would like to highlight the o changes in the various appropriations and funds for which the Civil Service Commission has responsibility.

be paid from annual appropriations made for such purpose. Based on experience with those already enrolled and applying this to all retirement systems, it is estimated that the Government's contribution for fiscal year 1965 will amount to $14,853,000. Of this amount, $13,000 will be derived from unobligated balances carried forward from fiscal year 1964, resulting in a net fiscal year 1965 appropriation request of $14,840,000.

ADMINISTRATIVE EXPENSES, RETIRED EMPLOYEES HEALTH BENEFITS FUND

(EXPENSE LIMITATION) The Retired Federal Employees Health Benefits Act (5 U.S.C. 3053) provides that the retired employees health benefits fund shall be available without fiscal year limitation to pay for administrative expenses incurred by the Commission in an amount not to exceed 2 percent of the Government's contribution. However, the Independent Offices Appropriation Act of 1964 provided a dollar limitation on administrative expenses without regard to the 2-percent limitation as specified in the act.

For fiscal year 1965, the Commission estimates a total need of $348,000 in order to fulfill its responsibilities under this program, a decrease of $44,000 from the 1964 limitation authorized.

PAYMENT TO CIVIL SERVICE RETIREMENT AND DISABILITY FUND (APPROPRIATION)

Part III of Public Law 87–793, approved October 11, 1962, provides for adjustment of annuities including those already in payment as well as the majority to be awarded in the future, effective January 1, 1963. An appropriation of $62 million has been authorized to provide for these increased benefits in fiscal year 1964. The fiscal year 1965 request ($65 million) is for the same purpose. LIMITATION ON ADMINISTRATIVE EXPENSES, EMPLOYEES' LIFE INSURANCE FUND

(EXPENSE LIMITATION) The Federal Employees' Group Life Insurance Act (5 U.S.C. 2091-2103) as amended, provides that the employees' life insurance fund shall be available for any expenses incurred by the Commission in the administration of the act.

For fiscal year 1965, the Commission requests an expense limitation of $277,000, an increase of $7,000 over the 1964 authorized amount, to fulfill its responsibilities of (1) maintaining the regular insurance program and (2) servicing the full membership of the beneficial associations whose insurance agreements have been assumed by the fund.

FULL FIELD SECURITY INVESTIGATION PROGRAM Pursuant to title 22, U.S.C. 1661, other laws, and Executive orders, the Civil Service Commission conducts full field security investigations for various agencies of the Government. Since this work is done on a reimbursable basis, the Commission is not requesting funds for this purpose. A statement of the status of this program is contained in this document.

FISCAL YEAR 1964 APPROPRIATIONS AND REQUEST FOR FISCAL YEAR 1965

SENATOR MAGNUSON. Commissioner Macy and his staff are here. He has a short statement to read for the committee.

But for the purpose of the record, your total appropriations for 1964 were $110,505,000 and the budget this year is for $115,025,000, which is a plus of $4,520,000.

Now, the pluses are taken up with, one, the payment to the civil service retirement and disability fund which is up $3 million, the budget

Mr. Macy. Yes, it is up $3 million, from $62 to $65 million.

Senator MAGNUSON. The Government contribution for retired employees health benefit fund, you have budgeted that up by $40,000 and the Government payments for annuitants, the employee's health benefit fund is up $1,164,000; investigation of U.S. citizens for em

ployment by international organizations is up $34,000 over last year which is $634,000; and salaries and expenses has a $382,000 increase. That is the biggest item in your budget with the exception of the payments to civil service retirement.

All right, Mr. Macy. You have a statement. We will be glad to hear from you.

STATEMENT of THE CoMMIssion CHAIRMAN

Mr. MACY. Mr. Chairman and members of the committee, I would like at the outset to introduce my new colleague, Commissioner L. J. Andolsek who appears with me for the first time before your committee.

Senator MAGNUsoN. All right, we are very glad to have you, sir.

Mr. MACY. We appeared before the House Subcommittee on Independent Offices on }. 6, 1964, regarding our 1965 budget requests. The House committee has not yet issued a report. Therefore, my statement contains the same information as that furnished to the subcommittee of the House.

EMPLOYMENT LEVELS

With respect to employment in the executive branch, the President has established employment ceilings of 2,505,874 for June 30, 1964, and 2,503,935 for June 30, 1965. In establishing, these ceilings President Johnson made it clear that they constituted ceiling figures and not employment goals.

As he stated in his budget message, President Johnson has directed the heads of all departments and agencies to work toward reducing employment below these target figures. As a result, the Commission has an approved ceiling figure, as of June 30, 1964, of 4,125.

I have #. that the Commission's employment level be reduced to 4,079 by that date. This figure, 4,079, is the approved ceiling figure for June 30, 1965. It is expected that heads of other agencies and departments will take similar action in producing a decrease in the level of employment in the executive branch.

REDUCTION IN COSTS

During the past 2 years the Commission has achieved significant reductions in manpower, administrative, and operating costs. These economies, which I described to you last year, made it possible to assume new responsibilities and workloads without increased appropriations and to absorb more than 40 percent of increased pay costs in fiscal year 1963.

Although increased workloads in certain areas of the Commission's responsibilities are inevitable and beyond our control, we expect continued improvements and efficiencies to occur; and, in the spirit of President Johnson's desire to reduce Federal employment, we expect the overall employment of the Commission to decline.

I want to assure you that the Commission will continue to render essential services to the agencies and the public without impairment and will continue to seek ways to improve its operations.

I would like to highlight the principal changes in the various appropriations and funds for which the Civil Service Commission has responsibility.

COMMITTEE ATTITUDE ON PERSONNEL LEVELS

Senator MAGNUsoN. Before you go to that, Mr. Macy, let us take this whole employment situation which you referred to in a general

way. Mr. MACY. Yes, sir. Senator MAGNUson. Of course, this committee, as you know, for the past 2 years has, I think, taken some leadership in the agencies under our jurisdiction not only to keeping them at the same employment level but to reduce in some cases, and that is based on the theory that we think a lot of the rising cost of Government becomes due to employment increases which lend themselves to new programs because of the new employment that may not occur if employment is kept at the same level. Second, and I know that you people must run into the same thing, it seems like every time any of these agencies have a problem, whether it be the ICC, the FCC, or CAB, they cannot seem to handle or that they cannot handle as quickly as possible, but the only answer they seem to give us is, “We have got to have more people.” Now, that is not necessarily so. And then we are following Parkinson's law here— Mr. MACY. We are trying to repeal Parkinson's law. Senator MAGNUsoN. Yes. Mr. MACY. This is our objective. Senator MAGNUson. Yes. But I mean that we are taking heed of Parkinson's law. I know that you people in the Civil Service Commission must have the same problem when other agencies want you to encourage new employment, which they must get from you.

COVERAGE OF EMPLOYMENT FIGURES

Now, you say that the employment ceiling for June of this year is 2,505,000 and 2,503,935 for June 1965. Now, for the record, what employment does this include? Mr. MACY. This includes all employment in the executive branch of the Government. These are ceilings that have been set by President Johnson following an intensive review by him personally of the agencies' personnel requirements. Senator MAGNUson. There was a Committee on Manpower appointed, was there not, Mr. Macy? Mr. MACY. Yes, sir. Senator MAGNUson. An interagency committee? Mr. MACY. Yes. The new committee, established yesterday Senator MAGNUson. That is working now?

CONTINUING REVIEWS OF MAN POWER ESTIMATES

Mr. MACY. There has been a continual review of manpower estimates by the Budget Bureau for the President, he has requested that each department and agency head submit regular reports as to not only their ability to stay within the ceiling, but what further cuts they can make.

The figures that I cite on page 1 of my statement are figures that have been revised downward since the President submitted his budget message in January. This is as a result of further reviews that have taken place during the past 2 months.

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