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Senator METCALF. Mr. Elmer Staats, we welcome you to the committee. We are very pleased to have you before the committee again. You have a prepared statement. Go ahead.

TESTIMONY OF ELMER B. STAATS, COMPTROLLER GENERAL, ACCOMPANIED BY ROBERT F. KELLER, DEPUTY COMPTROLLER GENERAL; PAUL G. DEMBLING, GENERAL COUNSEL; AND THOMAS WILLIAMSON, SENIOR ATTORNEY, OGC

Mr. STAATS. Thank you very much, Mr.Chairman. We do appreciate your having us here this morning. I am sure that we share the same objective of doing what we can to strengthen the oversight capability of the Congress and the ability of the General Accounting Office to assist the Congress in that respect.

If I understood the plans correctly, Senator Chiles might be coming for the hearing. If so, I would be very happy to interrupt to hear his statement. Did I understand also, Mr. Chairman, that you would like to have our comments first on 2206?

Senator METCALF. Yes. That would be best.

Mr. STAATS. We have prepared, since these are somewhat discrete subjects, four statements instead of a single consolidated statement. But the substance will be the same either way.

Enactment of S. 2206 would, in our opinion, weaken rather than strengthen the General Accounting Office and its ability to serve the Congress.

While the bill would apply only to new appointees to the posts of Comptroller General and Deputy Comptroller General, I urge strongly against its enactment because I believe that it could have the most serious and far-reaching consequences and weaken the operations of the Office, an agency which has played an important role since 1921 in assisting the Congress and in bringing about increased economy, efficiency, and effectiveness with which Federal programs are carried out. S. 2206 would repeal present sections 302 and 303 of the Budget and Accounting Act of 1921, which provide for appointment of the Comptroller General and Deputy Comptroller General by the President,

with the advice and consent of the Senate, for 15-year terms, and authorize their removal by impeachment or joint resolution of the Congress, after notice and hearings, only for inefficiency, neglect of duty, malfeasance in office, or conduct involving moral turpitude.

Instead, S. 2206 would provide for appointment of the Comptroller General and Deputy Comptroller General by the Speaker of the House of Representatives and the President pro tempore of the Senate, after considering recommendations from the House and Senate Committees on Government Operations.

The bill would also fix the terms of office of the Comptroller General and Deputy Comptroller General at 7 years, and provide for their removal by either the Senate or House of Representatives by simple resolution.

There were cogent reasons why the appointment and removal authority were structured as they are when the Budget and Accounting Act was under consideration back in 1921.

The basic intent of the Congress in creating the General Accounting Office and the Comptroller General was to enhance congressional authority and involvement with respect to fiscal matters both by assuring independence in the performance of the functions previously vested in Treasury officials and by furthering its ability to receive candid information.

The legislative history of the 1921 act consistently stresses the importance of the Comptroller General exercising objectivity and independent judgment, unfettered by political influence from any source. This concern for independence was most succinctly stated by Representative Good, principal sponsor of the legislation, who stated that:

* It was the intention of the Committee that the Comptroller General should be something more than a bookkeeper or accountant; that he should be a real critic, and at all times should come to Congress, no matter what the political complexion of Congress or the Executive might be, and point out inefficiency, if he found that money was being misapplied-which is another term for inefficiency-that he would bring such facts to the notice of the committees having jurisidiction of appropriation * * *.

The Congress' concern was that the Comptroller General remain free from political influence from congressional sources, as well as from the executive branch-a point reiterated on several occasions during debate on the measure.

During one colloquy, Representative Good emphasized that the reason removal of the Comptroller General could be effected only upon specified grounds was to assure his complete objectivity in spite of possible political pressures from the Congress or elsewhere.

Although the functions of the GAO have expanded greatly since the enactment of the Budget and Accounting Act, the need for the Comptroller General's exercise of objective and independent judgment remains as important today as it was perceived to be in 1921, if not more so.

Historically, it has only been through scrupulous adherence to a nonpartisan objectivity that the Comptrollers General have been able to inspire confidence and credibility in their actions, and thereby serve effectively the needs of the Congress.

We are greatly concerned that these qualities could be quickly lost through the transfer of the appointment powers, reduction of tenure

and more seriously, provision for removal by simple resolution of either House, as proposed in S. 2206.

Present requirements for notice and hearings, and removal only by impeachment or for statutorily specified grounds by joint resolution which requires Presidential approval or a two-thirds vote in each House to override a Presidential veto, provide the independence vital to achievement of the Comptroller General's statutory mission.

An important element of the present requirements which deserves emphasis is that both Houses must support removal. This has provided a balancing factor, contributing to the Comptroller General's assistance to the whole Congress. It assures that future Comptrollers General will call them like they see them in rendering decisions or reports without fear of incurring the displeasure of a single House of Congress.

The danger is that future Comptrollers General might be reluctant to audit programs having high political sensitivity; they would be reluctant to recommend changes in legislation-that is, merely present the facts and become a research organization and avoid recommending changes in legislation or operating procedures especially if the subject were of a sensitive nature; and they would be reluctant to undertake work at the request of minority Members of the Congress.

At the present time, the 15-year appointment means that anyone qualified to hold the position is most likely accepting his terminal service and is expected to remove himself from politics and to make it clear to all concerned that his judgment and his willingness to undertake reviews of sensitive programs is in no sense politically motivated.

By providing the Comptroller General a 15-year, nonrenewable term and approximately the same retirement arrangements and similar method of removal as judges, the Congress wisely, in my opinion, made it clear to all concerned that the Comptroller General was expected to carry out his duties in the same spirit as individuals who hold positions on the Federal bench.

I believe that my predecessors have attempted to act in that spirit, and certainly it has been my objective as well.

With respect to the appointment provisions, there was another major concern reflected in the legislative history of the 1921 act related to the nature of the Comptroller General's Office.

Although the Office was established in furtherance of congressional prerogatives, at the same time it was clearly recognized that the Comptroller General would serve as more than a congressional operative. Rather, he was to be an "officer of the United States," subject to Presidential appointment under article II, section 2, of the Constitution.

The legislators concluded that the Comptroller General must be an "officer of the United States."

More fundamentally, however, it could well be argued that the Comptroller General's statutory functions are not exclusively "legislative" in nature.

As I indicated previously, establishment of the Comptroller General and the General Accounting Office enhanced the authority of the Congress in two complementary, but quite distinct. respects.

First. such functions as the settlement of claims and accounts were removed from executive branch control, thereby assuring that the per

formance of these functions would not favor executive interests over the interests of the Congress in strict objectivity, control, and adherence to congressional intent.

Similarly, the Comptroller General was given authority to prescribe accounting principles and standards, and approve accounting systems for the Federal Government-duties of the same general executive character as the function of settling claims and accounts.

In addition, the Congress obtained a source of forthright auditing, investigation, and reporting to be directly at its disposal.

With respect to the latter audit and reporting functions, and other direct assistance furnished to Congress, it is clear that the General Accounting Office serves as an agent of the Congress in every sense, although the need for independent judgment and objectivity remains vital.

In performing our accounts settlements and related activities, and in prescribing accounting principles and standards, our office is no less concerned with congressional prerogatives in terms of insuring objectivity, proper controls, and compliance with the will of Congress as expressed in statutes.

However, these were historically "executive" functions prior to the transfer accomplished in 1921, and arguably remain so.

The clearly "legislative" functions performed by the Comptroller General could be vested in an officer appointed by the Congress. On the other hand, it is questionable whether a Comptroller General appointed by the Congress, and therefore no longer an "officer of the United States," could continue to exercise settlement and related authorities as "chief accounting officer of the Government."

We therefore believe that the proposed change in the appointment authority could possibly threaten the legal basis of the Comptroller General's settlement powers, which is also the source of our responsibility to render legal opinions and to act on contract bid protests, and his powers relating to accounting standards and systems.

I wish to emphasize that my position on this bill is in no way meant to derogate from the purpose of strengthening the authority of the Congress.

Our Office continuously seeks to fulfill the needs and interests of the Congress in the performance of all our functions by strict compliance with the fundamental policies established in the 1921 act and reaffirmed in many subsequent statutes.

In fact, the work we do at the direct request of committees and Members of the Congress, or specific studies undertaken in response to legislative provisions, has increased very substantially in the past 10 years.

In 1966 when I became Comptroller General, this work represented less than 10 percent of the professional staff of approximately 2,400 whereas today, this work constitutes 34 percent of a professional staff of nearly 3,700.

In fiscal year 1972. GAO officials appeared at 38 congressional hearings. By fiscal year 1975, this had increased to 70 appearances; and during the first quarter of fiscal year 1976, there have been 22 appearances.

It has been my policy to respond to these requests for assistance to the extent practicable. In addition, we have established liaison ar

rangements to keep more closely in touch with the work of the various subcommittees so that we might adapt our program to meet the interests of the Congress and, at the same time, keep Congress advised as to ongoing work by the GAO which we believe would be of interest to it in considering appropriation requests and new legislation.

However, we earnestly believe that S. 2206 could seriously dilute the status and total objectivity of the General Accounting Office which formed the cornerstone of the original Budget and Accounting Act. As I have indicated, the current provisions of the Budget and Accounting Act relating to appointment, tenure, and removal of the Comptroller General, reflect extensive and deliberate consideration of the issues raised by S. 2206.

In our view, the delicately balanced formula arrived at in 1921 to resolve these issues has weathered well. Nor do there seem to be, to the best of my knowledge, any compelling reasons to make a change.

I can only assume that the bill originates because of the recent establishment of the Congressional Budget Office and the Office of Technology Assessment, the heads of which are congressional appointees.

However, I sincerely believe that the role of these offices is very substantially different from that of the General Accounting Office, for the reasons which I have previously outlined in this statement. Finally, it seems to me that the prospect of the appointment of a Comptroller General who would be nonacceptable to the Congress is quite remote.

As you know, the posts of Comptroller General and Deputy Comptroller General currently require Senate confirmation.

Moreover, I believe that any future President-like Presidents in the past—would be highly sensitive to the relationship of these positions to the work of the Congress, and it would seem highly unlikely that he would attempt to appoint someone who would not be acceptable.

The first three appointees to this office, beginning in 1921, were individuals who had either been Members of Congress or who had served in the legislative branch.

My immediate predecessor-the fourth-had served as a member of the Atomic Energy Commission and was appointed after a long and serious effort by the White House to reach agreement between the House and Senate on an individual who had served in the legislative branch.

In my own case, it was my understanding that one of President Johnson's considerations was the fact that I had worked closely with the Congress on many matters over a period of many years.

I mention this point by way of emphasizing my belief that under the present arrangement of Presidential appointments, there is only a remote chance that problems will arise in the future; certainly these chances are so remote as to cause me to conclude that the problems which would be generated by the proposed legislation far outweigh any advantages which I can foresee.

This concludes my statement on this bill.

Senator METCALF. Thank you very much for a splendid statement. How many employees did they originally have in the General Accounting Office in 1921?

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