REORGANIZATION PLAN No. 8 OF 1953 Budgeted positions related to the information functions to be transferred to the U. S. Information Agency [Based on positions in the IIA, GOA, and MSA fiscal year 1954 appropriation estimates now before the Congress] 1 The fiscal year 1954 positions shown are based on budget estimates on which final congressional action has not been taken. ADMINISTRATIVE SUPPORT POSITIONS A breakdown of IIA, GOA, and MSA figures on administrative support positions for all public affairs functions is not yet available; Mr. FINAN. Let me answer that question first with regard to Reorganization Plan No. 7 and then with regard to Reorganization Plan No. 8. First of all, I would like to call the committee's attention to sections 5 (a) (2) and (3) of the Reorganization Act which prohibit the inclusion in a reorganization plan of provisions which would continue an agency beyond the period authorized by law for its existence or beyond the time when it would have terminated if the reorganization plan had not been made, and also prohibiting continuing any function beyond the period authorized by law for its exercise or beyond the time when it would have terminated if the reorganization plan had not been made. In the light of that provision, the views of the Bureau of the Budget with respect to Reorganization Plan No. 7 are as follows: The various programs transferred to the Foreign Operations Administration by Reorganization Plan No. 7 are temporary. First, the functions under the Mutual Security Act of 1951, as amended, and the Mutual Defense Assistance Act of 1949 will expire not later than June 30, 1954. Under the provisions of the Senate bill, S. 2128, these functions would expire not later than June 30, 1956. Second, the functions under the Mutual Defense Assistance Control Act of 1951 are financed from funds made available for the Mutual Defense Assistance Act of 1949. These funds will not be available after the functions of the latter act expire June 30, 1954. Third, the function under section 6 of the Yugoslav Emergency Relief Assistance Act of 1950 involves merely the transmittal of quarterly reports to the Congress Fourth, the succession of the Institute of Inter-American Affairs will expire June 30, 1955. Accordingly, and without regard to legislation which may be enacted at future sessions of the Congress, it would be my view that the Foreign Operations Administration will, except for purposes of liquidation, become inoperative not later than June 30, 1956. Now, with respect to Reorganization Plan No. 8, it is our understanding that the Smith-Mundt Act, which includes the major functions which would be transferred by that reorganization plan to the United States Information Agency are permanent functions. Therefore, unless specific further action is taken by the Congress to abolish the United States Information Agency or to transfer its functions to some other agency of the Government, Reorganization Plan No. 8 would have the effect of creating what would be called a permanent agency. Mr. BROWNSON. However, that permanent agency was created by the basic legislation and Reorganization Plan No. 8 has no effect on the duration of the agency, as such. Mr. FINAN. That is correct. Mr. BROWNSON. The President has stated that certain long-range legislation based on further study is now in preparation in the field of reorganization and of course the House of Representatives recently acted to re-create the 1953 version of the Hoover Commission. Some of the witnesses that we have had in this committee have stressed the temporary or limited character of the reorganizations now proposed. If the Commission on Organization is established, it may recommend that overseas operating programs, not properly assignable to the regular departments, be administered under a reorganized Department of State. In your opinion, can we now be certain that we are moving in the right direction in taking programs now in the Department of State and putting them in Foreign Operations Administration, for example, when very possibly we should be moving in the other direction? In other words, will this reorganization, as accomplished under Reorganization Plans 7 and 8, fit in with the overall picture in such a manner that we will not have to back up next year? Mr. FINAN. Mr. Chairman, if you ask your question a little differently, would the taking effect of Reorganization Plans 7 and 8 bring about situation in which it would be more difficult and more complicated to consolidate these functions within the State Department than would be the case in the absence of those plans. Mr. BROWNSON. That is a fair statement of the question. What I am really driving at, Mr. Finan, is the point wouldn't it be better to continue with our present legislative framework until it can be determined definitely that all these proposed legislative changes are consistent with long-range operational requirements. Mr. FINAN. To that, Mr. Chairman, I would like to make several comments. First of all, the new Commission provided for in S. 106, to make a reexamination of the executive branch of the Government, is not scheduled to report under the pending legislation which would establish it until December 1955. Meanwhile, we have these extremely important and vital programs to administer. Secondly, there is no certainly that this new Commission, if it were established, would do more than approve the organization that these plans would create. Thirdly, there is the final possibility, of course, that the Commission could recommend some drastic changes but they would not be found acceptable by either the President or the Congress. However, assuming that a year from now or 2 years from now the President and the Congress decided that the situation that then existed called for the consolidation of the functions affected by Reorganization Plans 7 and 8 in a reconstituted Department of State, it is the opinion of the Bureau of the Budget that it would at that point be easier to assemble those functions in the State Department if Reorganization Plans 7 and 8 take effect than would otherwise be the case. My reason for that belief is that each of the agencies established by these two reorganization plans would contain a consistent group of functions which would lend themselves to ready transfer as integrated bureaus or major constituents of the Department of State. Secondly, Reorganization Plan No. 7 abolishes the Office of the Director for Mutual Security in the Executive Office of the President and establishes the Secretary of State and the Department of State in a position which would bring about a set of relationships between the State Department and the new agency created by Reorganization Plan 7 which is more nearly similar to the relationships that would exist if the new agency was brought into the Department than is presently the case. 35202-53-14 Mr. BROWNSON. Of course, to a certain extent, part of that program has been accomplished by the Executive order of the President. Mr. FINAN. That is true. As far as transferring functions out of the Department of State is concerned, Reorganization Plan No. 7 transfers out only some relatively minor functions, whereas the Executive order issued by the President on June 1, 1953, transferred out a very major function, namely, the responsibility under the Act for International Development. Mr. BROWNSON. Are there any questions of Mr. Finan by any members of the committee? I certainly want to thank you, Mr. Finan, for your testimony and for your help throughout these hearings. It has been very greatly appreciated by the chairman and by the committee. I also want to compliment the committee members on their attendance at these hearings. I also desire to express to the gentleman from Michigan, the distinguished chairman of our committee, my appreciation for extending me the opportunity to preside over these hearings. I would like to announce at this time that this is the conclusion of the public hearings on Reorganization Plans 7 and 8, there remaining only one additional executive session with Dr. Robert Johnson tomorrow afternoon to wind up the hearings completely. The public hearings on Reorganization Plans 7 and 8 are hereby adjourned. (Whereupon, at 4:51 p. m., the committee adjourned.) APPENDIX CONGRESS OF THE UNITED STATES, HOUSE OF REPRESENTATIVES, COMMITTEE ON GOVERNMENT OPERATIONS, The Honorable WALTER BEDELL SMITH, Department of State, Washington 25, D. C. DEAR MR. SECRETARY: I am submitting herewith the additional list of members' questions which time would not allow to be covered or which were not fully covered in the committee hearings this morning on Reorganization Plans 7 and 8. You kindly agreed to answer such questions on the basis of a written request. They relate particularly to plan No. 7, since plan No. 8 has not yet been discussed in detail. May I again express my appreciation and esteem for your thoughtful, candid, and careful testimony before the committee. House Committee on Government Operations. MY DEAR MR. BROWNSON: General Smith has asked me to reply to your letter of June 23, 1953, requesting answers to a number of questions concerning Reorganization Plans 7 and 8. I trust that the enclosed materials will be adequate for this purpose. Please let me know if there is anything further we can provide. Please let me express my appreciation for the very courteous and intelligent handling of the hearing at which I appeared and my desire to provide any further assistance you may require. Sincerely, Enclosure: DONOLD B. LOURIE, Under Secretary for Administration. Questions and Answers on Reorganization Plans 7 and 8. QUESTIONS AND ANSWERS Question la. Under Secretary of State Smith referred in his testimony to the great amount of study which had gone into the preparation of the President's proposals regarding the organization of the Government for foreign assistance programs and foreign operations and for foreign information programs. The Under Secretary further stated, in effect (in reply to Congressman Hoffman's question), that it was not now intended to submit further proposals within the next year and that it was not contemplated that plan No. 7 would be inconsistent with future organizational changes that might be recommended to the Congress. Who was consulted in the preparation of these plans and what supporting studies and reports are available? To what extent was data assembled on difficulties previously encountered in the separation of foreign policy responsibility from foreign operating responsibility? Answer la. Numerous officials of the Department of State, Defense, and the Treasury, the Mutual Security Agency, the Office of the Director for Mutual 207 |