EXPLANATION OF CHANGES The $1,255,000 request for supplemental funds represents the estimated financial requirements to cover the increased civil service pay and related costs resulting from Public Law 87-793, $738,000; salary increases of wage board employees, $373,000; and the increased cost of commissioned officers quarters allowance pursuant to Public Law 87-531, $144,000. Since the above costs are mandatory expenses and are uncontrollable, it is necessary to request supplemental funds to cover the above-mentioned items. Mr. THOMAS. You are asking for $1,255,000. There are three items involved here. Increased pay and related costs are $738,000. This is for general schedule employees. You have 6,968 civilian employees under civil service. The second item is wage board increases of $373,000. Then you have your increase quarters allowance the same as the military, this is the uniformed personnel of HEW, amounting to $144,000. Adding the three up, you have $1,255,000. that summarize it, gentlemen? Dr. MILLER. Yes, sir. Mr. THOMAS. How firm is your figure of $1,255,000? Dr. MILLER. It is firm, Mr. Chairman. PAY ACT COSTS Does Mr. THOMAS. For your number of civilian employees numbering about 7,000, what was your total Pay Act cost for the fiscal year 1963? Mr. JOEL. Pay and related costs, $738,000. Mr. THOMAS. For this particular division? Mr. JOEL. Yes, sir. COSTS ABSORBED OTHER THAN PAY INCREASES Mr. THOMAS. How much did you absorb? Mr. JOEL. We did not absorb this pay cost directly, but it was necessary for us to absorb up to $419,000 of other costs, so we could not devote any more absorption to this. We had unexpected increased salary rates of $219,000 and costs for supplies of $116,000 because our patient load was higher than had been expected. Mr. THOMAS. How many hospitals does this take care of? Mr. JOEL. Fifteen. Mr. THOMAS. Name them. Mr. JOEL. Boston, Carville, Detroit, San Francisco, Chicago, Staten Island, Baltimore Mr. THOMAS. List those with the number of employees in each. (The information to be supplied follows:) Mr. THOMAS. How many outpatient clinics do you have in addition to your hospitals? Mr. JOEL. Twenty-five, sir. Mr. THOMAS. List those with the number of employees. (The information to be supplied follows:) Mr. THOMAS. Your number of jobs is 6,968; is that right? TOTAL HEW PAY ACT COSTS AND ABSORPTION Mr. THOMAS. Your total Pay Act for the Department costs you how much? Mr. KELLY. The entire Department of Health, Education, and Welfare? Mr. THOMAS. Yes. Mr. KELLY. Pay Act, including related costs and Wage Board- costs. Mr. THOMAS. A round figure of Mr. KELLY. A total of $15,350,000. Mr. THOMAS. You are sure it is not $16 million? Mr. KELLY. It is $16 million when you include Wage Board items. Mr. THOMAS. How many employees does it cover? Mr. KELLY. This would be about 80,000. Mr. THOMAS. What is your turnover now from all causes-quits, hires, sickness? Mr. KELLY. It runs between 1 and 11⁄2 percent, per month. Mr. THOMAS. Between 16 and 18 percent annually? Mr. KELLY. Yes. Let me tell you what the Secretary did. Mr. THOMAS. Let me ask you this first, please. Out of that $15.5 million, what did you absorb, departmentwide? Mr. KELLY. We are absorbing a total of $6,530,000. Mr. THOMAS. Leaving a balance of $9.5 million you are seeking in this supplemental? Mr. KELLY. That is correct. Mr. THOMAS. We are requesting all our agencies, particularly the big ones like yourselves, to absorb 10 percent of that figure. Would it cripple you or hurt you to do that? You have 3 months to go. You have 80,000 jobs throughout your agency. Your turnover is about 16 or 18 percent on an annual basis. Can you absorb 10 percent of it without hurting you? That would be about $950,000. Mr. KELLY. I think it would be extremely difficult. When this pay bill was enacted, in order to get a maximum absorption, the Secretary requested, with certain selected exceptions such as patient care in hospitals, that 3 percent of positions be abolished. Mr. THOMAS. How much money in this entire budget is for HEW? Mr. KELLY. We have a total appropriation that would add up to about Mr. THOMAS. I mean Pay Act. Mr. KELLY. $241 million. Mr. THOMAS. Including pay and everything? Mr. KELLY. Yes, sir; $231 million represents program increases, and the remainder is related Mr. THOMAS. Does not the Secretary think enough of that $241 million to come over and speak his piece? Mr. KELLY. He was testifying. The Under Secretary is here, Mr. Chairman. The largest single item, of course, in this is public assistance grants which you will take up. Mr. THOMAS. Where is the Under Secretary? If you were to not fill 50 percent of your vacancies, you could absorb 10 percent standing on one foot. Mr. KELLY. What I wanted to make clear is that the Secretary already abolished a thousand positions in order to make possible this absorption of 40 percent of the pay increase. Mr. THOMAS. He did what? Mr. KELLY. Abolished a thousand positions. The Secretary abolished a thousand positions in order to make possible this 40-percent absorption. Mr. THOMAS. We are not asking him to abolish any positions. We are just asking him to slow down in filling vacancies for the next 90 days and absorb 10 percent of this supplemental item. Mr. KELLY. It seems to me you should take into considerationMr. THOMAS. What do you think about your agency absorbing about 10 percent of your pay rise throughout the Department? You have 80,000 employees. As you well know, your turnover is 16 to 18 percent annually. We do not want to hurt you. We want to cooperate with you. The taxpayers of the country are screaming for a tax cut and a reduction in spending. Can you absorb 10 percent? It will amount to about $950,000. You have 80,000 employees. Can you not do that standing on one foot without hurting you? Mr. NESTINGEN. We can absorb more than that if we have to absorb more than that in the judgment of the committee. Mr. THOMAS. We did not put it on that basis at all. We are asking you for your frank and candid and honest opinion. Can you do it without crippling your activities? Mr. NESTINGEN. In my judgment, it would hurt the operation. I would not feel that such an absorption should be done. Mr. THOMAS. Why would it hurt your operation? How many vacancies do you have as of March 1 out of your 80,000 employees for the fiscal year 1963? Mr. KELLY. I do not have a precise figure. My guess would be that it would run about 5 percent. This is the amount of lapse. Mr. THOMAS. 4,000? Mr. KELLY. That 4,000 is not provided for in pay scales. It is estimated that that number will be vacant at all times. Mr. THOMAS. Can you tell us that without an estimate? We are asking you a very practical question-how many vacant slots do you have as of March 1? Mr. KELLY. I would have to provide this. Mr. THOMAS. What is your horseback opinion? Is it 4,000? Mr. THOMAS. With that in mind, Mr. Secretary, why can you not do it? Mr. NESTINGEN. Our programs have been increasing, and the volume of work has been increasing from the standpoint of numbers of people. We have an extensive amount of work to do. Mr. THOMAS. You have extra money for your new programs. You are not absorbing that by any means. If you do, why come over with all these supplementals? Each has a salary tag attached. Mr. NESTINGEN. In my judgment, in the position I hold, it is an absorption the Department should not be asked to absorb. Mr. KELLY. I would like to point this out. We do operate a great number of appropriations with no transfer authority. Mr. THOMAS. Have you been reading the newspapers? Mr. NESTINGEN. Yes, sir; in part. Mr. THOMAS. Have you been reading that part where the taxpayers are screaming to high heaven for a tax cut and a slight reduction in Federal spending? But you Mr. NESTINGEN. I have seen some comments that way. know, as well as I do, Mr. Chairman, that if we are going to furnish the services in the Department demanded of us, we need personnel. Mr. THOMAS. You are putting words in my mouth. You certainly need personnel, but I certainly think you can stand an absorption. You do a magnificant job. We want to commend all of you for it. In fact, this is one of the great agencies of Government. I do not know of any agency of Government any more close to the people than your Department is. We will be the last ones on earth to try to hurt you. Mr. NESTINGEN. Secretary Celebrezze, as far as departmental operation is concerned, has instructed his agency heads on several occasions, and with followup on his part, to ascertain whether or not positions need to be filled, to ascertain whether or not current personnel is being utilized wisely and well. Mr. THOMAS. That is quite commendable. We appreciate it. Mr. NESTINGEN. I would like the record to show his interest in administration and handling of personnel has been very close. He has endeavored to take every step possible to curtail unnecessary employment or check on poor utilization of personnel. Mr. THOMAS. We appreciate it. Mr. NESTINGEN. We will maintain that attitude, but we do not like to absorb another $900,000. Mr. THOMAS. How much have you absorbed already? Mr. NESTINGEN. I do not have the figure. Mr. KELLY. About $7 million. Mr. THOMAS. By transfers or what? Mr. KELLY. No, sir. Mr. THOMAS. How did you absorb it? Mr. KELLY. The part I refer to as absorption has occurred by not carrying out the programs Mr. THOMAS. You absorbed $6-million-plus by transfer of other funds. Mr. KELLY. I am not treating that as an absorption. Mr. THOMAS. I am, though. You count that as part of your absorption. Mr. KELLY. No, sir; we do not. Mr. THOMAS. Get your sheet out. Mr. KELLY. Yes, sir. If I may, when I gave you the figureMr. THOMAS. Judge, you have been in here long enough to know you do not have to ask that question. You can do anything you want to in here. Mr. KELLY. When I indicated that the total cost was $15,787,000 and that we were absorbing $6,530,000 of it, this was an actual absorption. Mr. THOMAS. How much did you absorb by transfer of funds? Mr. KELLY. We are asking you to authorize us to use trust funds in the amount of $6,409,000, and we are asking you to appropriateMr. THOMAS. For what? Mr. KELLY. This is the administration of the Bureau of Old-Age and Survivors Insurance. Mr. THOMAS. What will you use them for? Mr. KELLY. To finance pay increases. Mr. THOMAS. You are absorbing $6.5 million by transfer of funds. It has not been a cut. You are going to take funds from one pocket, put it in another, and when you get through you say it is an absorption when it is not. Mr. KELLY. I did not treat it as an absorption. Mr. THOMAS. I repeat, I did, you did not. Are there any questions? Mr. Bow. I was interested in your statement of the number of jobs abolished. What was that figure, again? Mr. KELLY. About 1,000 positions. Mr. Bow. You have a thousand fewer positions today than you had in October of 1962? Mr. KELLY. No, sir; that would not be an appropriate method of saying it. It is 1,000 less positions than Congress authorized us to have June 30 of this year. Mr. Bow. That is right. You did not remove a thousand people, then. Mr. KELLY. As a matter of fact, there was no reduction in force. The Department has been expanding. ADDITIONAL POSITIONS REQUESTED IN THE SUPPLEMENTAL Mr. Bow. How many employees have you asked for in this supplemental? Mr. KELLY. I have such a figure here but I cannot put my finger on it. Mr. Bow. Take your time and find it. Add up everything in this supplemental. |