REORGANIZATION OF THE GOVERNMENT AGENCIES WEDNESDAY, AUGUST 4, 1937 SENATE SELECT COMMITTEE ON The committee met, Senator James F. Byrnes presiding. The CHAIRMAN. The committee will come to order. Dr. Merriam, will you take this chair over here, please? STATEMENT OF CHARLES E. MERRIAM, MEMBER PRESIDENT'S COMMITTEE ON ADMINISTRATIVE MANAGEMENT-Resumed Mr. MERRIAM. Do you want me to testify today, or do you want Dr. Gulick? The CHAIRMAN. Senator Byrd wants to ask you some questions with reference to a certain feature of the bill. Senator BYRD. Dr. Merriam, there are two features of this bill that have not been explained up to this time. One is the recommendation with respect to these quasi-judicial agencies, and the other is the recommendation regarding the National Resources Board and the Planning Board in the program as proposed. I was wondering whether you desired to discuss one or both of those features. Mr. MERRIAM. Well, I can do so, Senator, but that is in the pleasure of the committee. Senator BYRD. I mean, are you the proper member of the President's committee to discuss those two recommendations. Mr. MERRIAM. Well, either Dr. Gulick or I could discuss the independent commissions. I probably would be in better position to discuss the National Resources and the Planning Board than the other members. Senator BYRD. What I am attempting to do is, in an orderly way, to discuss each of the major recommendations that the President's committee has made. Now, civil service has not been discussed to any extent, neither has the recommendation with reference to the National Resources Board and the Planning Board. I do not want to burden you with it unless you are the proper member of the President's committee to explain it. Mr. MERRIAM. I would be glad to do that, but I have prepared no memorandum on it today. I would be glad to do that on any other occasion, but I would like to get my material together. Senator BYRD. As I understand then, Dr. Merriam, you are not prepared today to discuss the National Resources Board or the independent agencies? Mr. MERRIAM. On any other day, Senator, except today. I have made no preparation for it, I have made no notes on it, I have no memorandum here. The CHAIRMAN. Dr. Merriam, if it is agreeable to Senator Byrd, suppose you let Mr. Gulick make a statement this morning. I think that would be the better course, because he had anticipated doing so. We will call you at a later time. Mr. MERRIAM. On any other occasion I would be glad to discuss either of them, but I would like 1 day's notice in order to prepare my memorandum, Mr. Chairman. The CHAIRMAN. All right. Mr. Gulick. STATEMENT OF LUTHER GULICK, MEMBER PRESIDENT'S COMMITTEE ON ADMINISTRATIVE MANAGEMENT The CHAIRMAN. Mr. Gulick, a day or two ago Senator McNary asked that some member of the President's committee explain to this committee the differences between the recommendations of the President's committee and the bill as introduced by Senator Robinson. Have you had a chance to look at the bill of Senator Robinson? Will you kindly give the information that the Senator requested? Mr. GULICK. Mr. Chairman, that request was made the other day and we endeavored to examine the bill as best we could in the interim and present to you, in very brief fashion, the major points at which a comparison may be made between S. 2700 and the program as suggested by the President's committee. As was stated the other day, S. 2700 was at no time submitted to the President's committee during its preparation. We saw it only after it was published. That is very natural, because we were not asked by the President to consider in detail any question of legislation, draftsmanship, or form. As you know, the chairman of our committee, Mr. Brownlow, has been confined for the last 2 months, so it was hardly possible for us to proceed. I have endeavored, as the basis of discussion, to put in very simple form an outline of the recommendations made by the President's committee and to indicate thereon the sections of S. 2700 which pertain to the recommendation in question. This you will find on the first sheet of these 3 pages which I have just handed to you. We made five major recommendations. These you will find in the left-hand column, and you will find in the right-hand column the provision that was made under S. 2700 in connection therewith. First we suggested the expansion of the White House staff by the addition of six administrative assistants. This is provided in section 502 of S. 2700. Our second major recommendation had to do with the strengthening and the development of the managerial agencies of the Government, particularly those which have to do with budget, with efficiency research, with personnel, and with planning. No new legislation is needed under the first two headings, Budget and efficiency research. Senator McNARY. Pardon me. In the column where reference is made to S. 2700 you have "No new law needed." Does that mean it is not treated in S. 2700? Mr. GULICK. It is not treated in S. 2700. No new legislation is needed. Senator MCNARY. Is that your deduction, that there should be no new legislation, or do you mean simply by that that no reference is made to it in S. 2700? Mr. GULICK. Both, Senator. Senator MCNARY. Then it is your opinion, when you say that, that we should need no new legislation on the Budget? Mr. GULICK. That is correct. With reference to efficiency research to which we were referred in the report, the Budget and Accounting Act is adequate. There is a specific section in the Budget and Accounting Act providing for efficiency research. Now, while no new substantive legislation is needed we do point out that additional appropriations are needed to expand and fully equip both of those activities as satisfactory arms of management. The omission, therefore, of any reference in Senate 2700 to the subject of budget and efficiency research we regard as in no sense a failure to provide, by law, for recommendations which were contained in the program of the President's committee. The third element is personnel. From the standpoint of management the most essential element in the suggestion for reorganization of the civil service has to do with the change in the administration so that personnel administration can be an intimate part of the management of the Government. This brings me to the subject of civil service. Senator Byrd has suggested that this is one of the major topics which has not been discussed, and I will take it up at this time, but I do want to point out that in section 201 of Senate bill 2700 provision is made for a singleCivil Service Administrator. We suggested the strengthening of the planning work and the making of that permanent. That is done in section 403 of the Robinson bill, and will be discussed in further detail by Mr. Merriam, as has just been requested by the committee. The third recommendation of the committee has to do with civil service. We recommended, first, the extension of the merit system upward, outward, and downward. Second, the reorganization of the Civil Service Administration by setting up a single Administrator and by establishing a citizen Civil Service Board. Third, the increase of the key salaries. Senator MCNARY. Pardon me. That is omitted in S. 2700, is it not? Mr. GULICK. Yes, sir; I am coming to that second column in a moment. Third, we recommended the increase of the top salaries. I will speak on that later also. Fourth, we recommended the extension of the classification. Now, when you turn to S. 2700 you will find that there are provisions in part ambiguous and in part it seems to me contradictory with reference to the extension of the civil service. That I will discuss in detail further. Therefore, in sections 203 and 207 there is only a partial fulfillment of the program which was contained in the report of the President's committee. A single Civil Service Administrator is set up in section 201, but there is no statement in S. 2700 with regard to the creation of a citizens' Civil Service Board, as suggested by the President's committee. Our suggestion that salaries be increased in the top posts of the Government, both the Cabinet policy-determining posts and the posts at the top of the merit system, is omitted in Senator Robinson's bill. The extension of classification is carried out in sections 208 to 211. Our fourth major recommendation had to do with the reorganization of the Government. We suggested two new departments, the Department of Welfare and the Department of Public Works. In Senator Robinson's bill Welfare is provided for in section 401. There is no provision for the Department of Public Works. We suggested the change of the name of "Interior" to "Conservation", and that you will find in section 402 of Senate 2700. We suggested that the Congress place upon the Executive the duty to reorganize the departments, divisions and activities in accordance with specified limitations which are stated in the bill. You will find that that is carried out in sections 1 to 5 in S. 2700, with certain additional limitations which I will refer to in a moment. Then our fifth major recommendation, and the last recommendation, is the establishment of a stronger accountability of the Executive to the Congress through, first, the establishment of a genuine audit this you will find in sections 302 to 306 of S. 2700-and, second, the creation of a Joint Committee on Public Accounts to make this audit effective. This you will find in section 317. Finally, that the accounting activities and the internal fiscalcontrol activities be definitely placed in the executive branch. This you will find in section 301. There is a slight difference at this point, because we suggested placing that in the Treasury. As the result, no doubt, of further thought, and particularly as the result of questions raised by Senator Byrd, I note that S. 2700 places that not in the Treasury but in the Budget office, in order to bring about further protection of that office. Senator MCNARY. Do you think that is an improvement? Mr. GULICK. I think, under the conditions which you face, Senator, it may be an improvement. As you remember, we were very eager to see that office protected and given what we call a semiautonomous position in the Treasury. The Budget has that status already. The whole history under the Dockery Act indicates that there was no serious abuse in the Treasury, from pressure by the secretaries or by the President, upon the auditing and comptrolling officials, but, nonetheless, this additional protection which is afforded by this arrangement may be a very happy solution of that problem. In order that you may have a little further statement with reference to the topics on which there appears to be a difference of opinion I prepared this very brief statement and, Mr. Chairman, if I may I will read it, because it is only two pages long, and because there are many here today who would not be able to follow the discussion if I did not read it. This is a statement of major differences between S. 2700 and the program recommended by the President's Committee on Administrative Management. The following is a summary of the important differences on questions of policy. In the main, the broad provisions of S. 2700 and the draft bill prepared by the President's Committee are similar. The detailed provisions differ at a number of points, and there are a few important variations given below. TITLE I, REORGANIZATION In both bills the authority of the President to reorganize the independent regulatory commissions is limited. Under S. 2700 nine commissions are designated as "independent establishments", and the power of the President to make transfers involving these commissions is confined to their routine administrative and executive functions, which are common to other agencies of the Government, such as budgeting, personnel, material, and so forth. That is in section 2 (c). These nine agencies are as follows: United States Board of Tax Appeals, Federal Communications Commission, Federal Power Commission, Federal Trade Commission, Interstate Commerce Commission, National Bituminous Coal Commission, National Labor Relations Board, Securities and Exchange Commission, United States Maritime Commission. Under the draft bill of the President's committee the President is authorized to segregate the regulatory functions from the administrative and executive functions of any regulatory commission, but in case of any transfer affecting an independent regulatory commission, the regulatory functions "shall be exercised by a regulatory commission, the members of which shall be appointed, removed, and have a tenure of office, in the manner and for the term heretofore or hereafter provided by the Congress.' In both bills the authority of the President with respect to independent regulatory commissions is more restricted than in the previous reorganization bills. I am referring there to the Economy Acts of 1932, March 3, 1933; March 20, 1933; which are the previous general authorizations to the Chief Executive to consolidate activities and divisions of the Government. Then the second point I want to make with regard to reorganization is this: S. 2700 provides that an Executive order issued under the reorganization authority shall not become effective until it has lain. before Congress while in session for 60 days. That is the precise language of the bill of March 3, 1933. The committee draft did not contain such a provision. Senator BYRD. Assume, Mr. Gulick, that Congress was dissatisfied and desired to change by law an executive office, and the President would veto that law, it would take two-thirds of each branch of Congress, of course, to overcome the veto? Mr. GULICK. Yes; the same as in any law passed by Congress. Senator BYRD. In effect, then, this authority is continuous; it cannot be recovered by Congress except by a two-thirds vote, in the event the President vetoes the bill? Mr. GULICK. Exactly; as in the case of any legislation passed by Congress. Once the act has been passed it can only be changed by act of Congress, and under the Constitution, if that subsequent act is vetoed, it requires a two-thirds vote. Senator BYRD. The practical effect is that Congress surrenders control over the departments of the Government to the extent of the powers given to the President, and in order to recover that control it must do so by a two-thirds vote? Mr. GULICK. It is very necessary to define very closely the nature of the power that is being surrendered. It is not power over the department, it is not the control of the business affairs of the Government, because the power which is given to the President is the power to reshuffle. There is no power to start a new activity, to do a single new thing. It must be within the confines of law already established. Second, there is no power to go beyond appropriations which have been passed, and subsequent appropriations are required each year. Therefore, any reorganization which is carried out by the Executive can be held up by a simple majority vote in refusing appropriations. |