S. 2274. Two, or even three, years would be more appropriate. We believe it important that a terminal date be set for the study. As one of the programs for accomplishing the purposes of the bill, section 5, of the bill, as we understand it, would require that certain of AEC's prime contracts contain provisions obligating the contractor involved "to set up an industrial conversion committee." The function such a committee would be obligated to perform is "planning for conversion to civilian work arising from possible curtailment or termination" of the contract involved. Section 4(4) of the bill would authorize the proposed Conversion Commission to promulgate regulations which would specify the character and duties of the industrial conversion committees established pursuant to section 5 of the bill. The addition of contractual provisions in contracts, having a distinct and separate purpose, would not appear to be a desirable approach to assist in accomplishing the purposes of the bill. Section 5 appears to contemplate that the planning for conversion, which certain contractors would be required to perform would result in the development of a plan or a series of alternative plans for conversion. It is not clear what use is to be made of the plan or plans developed, and the relationship of such plans to the programs for economic conversion capability which, under section 4, would be developed and reported by the Conversion Commission. Development of plans by individual contractors should not be required by legislation, at least until after the Conversion Commission submits its report and recommendations to the President and to the Congress. In addition, the language of section 5 raises problems which could be serious. Although the term "defense contract or grant" is defined in section 5(b) of the bill, it is difficult to determine which, if any, of AEC's contracts are intended to be covered by the definition. For example, under one interpretation of the definition, AEC would not even have a "defense contract or grant" since no AEC contracts contain a provision requiring the contractor to devote any specified percentage of its total work force to the AEC contract work. Moreover, section 5 would include in the term "defense contract or grant” contracts for the operation of Government-owned facilities. Operation of major installations of the atomic energy program, Government-owned production plants and laboratories, is carried out by AEC prime contracts. The contracts for these various operations are the major instruments through which AEC carries out its operations and programs for advancing the science and technology of atomic energy. In such cases, if the conversion potentiality were to be analyzed, it should be the responsibility of AEC, and not that of the current, and perhaps temporary, operating contractor. Another ambiguity in section 5 concerns the function which the industrial conversion committees of our contractors would be required to perform. The language of the bill appears to provide that these committees would perform a planning function only. It is not clear, however, as to what lack of action on the part of the contractor might constitute a failure to perform the planning function and, thus, a breach of contract. It is equally unclear what action would be deemed to be performance. For example, is it contemplated that a developed plan would be put into effect in the event some contingency eventually occurs? Would there be a contractual requirement to put the plan into effect? The control to be exercised by the contracting agency over the magnitude and direction of effort of a contractor's conversion committee is not stated in the bill. Presumably, the broad provisions of section 5, which appear to be ambiguous now, would be clarified by the implementing regulations which the Conversion Commission is authorized to issue under section 4 of the bill. The terms of section 5 apparently will require such extensive regulatory implementation that the power vested in the National Economic Conversion Commission to issue regulations must necessarily be quite broad. This would seem to suggest a need for statutory clarifications, and the concommitant narrowing of the Conversion Commission's authority to issue regulations or, in the alternative, including in the bill procedural requirements which the Conversion Commission must follow in the exercise of its regulatory power. The enactment of S. 2274 would cause an immediate increase in AEC's contract costs. For example, fixed-price contractors would undoubtedly include contingencies in their price to cover whatever coversion-planning responsibilities may be applicable to them. No meaningful assessment of the amount of the increase is now available, since it is not known how many people of what level might be involved, and for what periods of time, in the conversion planning which might be required. Any meaningful estimates of cost would appear to depend on what provisions are in the implementing regulations published by the Conversion Commission, and these regulations would, of course, be published only after enactment of the act. The Bureau of the Budget has advised that there is no objection to the presentation of this report from the standpoint of the administration's program. Sincerely yours, DWIGHT A. INK, Assistant General Manager. EXECUTIVE OFFICE OF THE PRESIDENT, BUREAU OF THE BUDGET, Washington, D.C., March 4, 1964. Hon. WARREN G. MAGNUSON, Chairman, Committee on Commerce, DEAR MR. CHAIRMAN: We have received your letter of January 20, 1964, requesting the views of the Bureau of the Budget on S. 2274, a bill to establish a National Economic Conversion Commission, and for other purposes. Your committee is particularly interested in the relationship of the bill to the Committee on the Economic Impact of Defense and Disarmament recently established by the President. In summary the bill would establish a commission composed of the heads of nine departments and agencies to identify the impact of lessening defense expenditures upon the economy and to recommend appropriate measures for easing conversion from defense to civilian work. In addition, the bill requires that defense contractors establish committees to plan conversion to civilian work should their defense contracts be curtailed or terminated. Both the Department of Defense and the Atomic Energy Commission have submitted views to your committee on the contract administration provisions of the bill. The Bureau of the Budget is impressed with the cogency of those agencies' arguments in opposing requirements that defense contractors establish industrial conversion committees within their respective establishments. However, effective planning at the national level can serve to encourage and guide the planning efforts of the individual companies. Consequently, the Bureau of the Budget agrees with the objectives of the proposed commission, recognizing that it is desirable to avoid serious dislocations in our economy resulting from any future reduction of defense expenditures. The President's action of December 21, 1963, in establishing the Committee on the Economic Impact of Defense and Disarmament attests to the administration's concern with this matter. The committee is charged with evaluating and coordinating the various studies underway on the economic impact of defense programs and with recommending new studies when appropriate. The membership of the new committee largely conforms with the membership of the commission that would be established by S. 2274. The principal difference between the functions of the committee and those proposed for the commission is that the latter would have its own staff which might conduct certain studies. This would appear to be a difference of little consequence. The President's committee is expected to stimulate studies by the appropriate agencies, which in most cases possess a wealth of staff resources that could not possibly be matched by the necessarily small and temporary staff of a commission. The existence of the interagency committee in guiding such studies should assure adequate protection against agency parochialism which might otherwise develop. In view of the recent action of the President in establishing a committee with objectives and membership similar to those proposed for the proposed commission, the Bureau of the Budget recommends against enactment of S. 2274. In establishing the committee the President assured that, "As work in this area produces results of interest to the Congress and the general public, they should be made available in appropriate form." We would expect that upon future provision of such information the Congress will be better able to assess the need for legislation to facilitate economic conversion from defense to civilian work. Sincerely, PHILLIP S. HUGHES, Assistant Director for Legislative Reference. U.S. CIVIL SERVICE COMMISSION, Hon. WARREN G. MAGNUSON, Chairman, Committee on Commerce, U.S. Senate, New Senate Office Building. DEAR MR. CHAIRMAN: This is in further response to your request of November 1, 1963, for our views on S. 2274, a bill to establish a National Economic Conversion Commission, and for other purposes. Since the Civil Service Commission would not be administratively involved in the programs of this proposed Commission, our comments are limited to the personnel provisions in sections 3 and 6. Section 3 would establish in the Executive Office of the President a National Economic Conversion Commission. The Commission would be composed of the heads of nine Federal agencies specified in the bill. An executive secretary, to be appointed by the President, would receive a statutory salary but the amount is left blank. We find no compelling need for providing a special statutory salary for the executive secretary and accordingly recommend that this position be compensated under the Classification Act. For this purpose section 3 (c) should be amended by deleting that part which reads ", and who shall receive compensation at the rate of $ a year". Section 6(a) provides that other employees of the proposed commission shall be appointed and compensated in accordance with the civil service laws and the Classification Act of 1949, as amended. Experts and consultants, however, may be employed on a temporary or intermittent basis without regard to such 'aws to the same extent as in the general authority under section 15 of the act of August 2, 1946, but at rates not to exceed $50 per diem for individuals. We do not oppose the provisions in section 6(a). However, we would like to point out that the proposed $50 limitation for temporary and intermittent employees is less than the rate which could be paid if that limitation were not imposed. Under the provisions in section 15 of the act of August 2, 1946, as interpreted by the Comptroller General, agencies subject to the Classification Act are authorized to pay rates not in excess of the per diem equivalent of the maximum rate for GS-15 (now $68.96). The Bureau of the Budget advises that from the standpoint of the administration's program there is no objection to the submission of this report. By direction of the Commission: Sincerely yours, JOHN W. MACY, Jr., Chairman. THE CHAIRMAN OF THE COUNCIL OF ECONOMIC ADVISERS, Hon. WARREN G. MAGNUSON, DEAR SENATOR MAGNUSON: You have asked for our views on S. 2274, a bill to establish a National Economic Conversion Commission and for other purposes. We share the concern of the sponsors of this bill that the Federal Government properly fulfill its responsibilities in connection with changes in defense spending. In recognition of the importance of this subject President Johnson on December 21 appointed a Committee on the Economic Impact of Defense and Disarmament. The Committee is made up of the departments and agencies directly concerned with this subject and at the President's direction is chaired by the Council of Economic Advisers. We believe that this Committee will serve many of the functions which would be served by the proposed National Economic Conversion Commission. We, therefore, respectfully suggest that the Congress may wish to defer action on the proposed bill until this Committee has had an opportunity to explore these problems further, and to see what additional legislation may be called for to deal with them effectively. It may be that other mechanisms are necessary to enable the Government fully to meet its responsibilities. But we are not persuaded that enactment of S. 2274 would be an effective approach at this time. The Bureau of the Budget advises that, from the standpoint of the administration's program, there is no objection to the submission of this report. Sincerely, WALTER W. HELLER. on what provisions are in the implementing regulations published by the Conversion Commission, and these regulations would, of course, be published only after enactment of the act. The Bureau of the Budget has advised that there is no objection to the presentation of this report from the standpoint of the administration's program. Sincerely yours, DWIGHT A. INK, Assistant General Manager. EXECUTIVE OFFICE OF THE PRESIDENT, BUREAU OF THE BUDGET, Washington, D.C., March 4, 1964. Hon. WARREN G. MAGNUSON, Chairman, Committee on Commerce, DEAR MR. CHAIRMAN: We have received your letter of January 20, 1964, requesting the views of the Bureau of the Budget on S. 2274, a bill to establish a National Economic Conversion Commission, and for other purposes. Your committee is particularly interested in the relationship of the bill to the Committee on the Economic Impact of Defense and Disarmament recently established by the President. In summary the bill would establish a commission composed of the heads of nine departments and agencies to identify the impact of lessening defense expenditures upon the economy and to recommend appropriate measures for easing conversion from defense to civilian work. In addition, the bill requires that defense contractors establish committees to plan conversion to civilian work should their defense contracts be curtailed or terminated. Both the Department of Defense and the Atomic Energy Commission have submitted views to your committee on the contract administration provisions of the bill. The Bureau of the Budget is impressed with the cogency of those agencies' arguments in opposing requirements that defense contractors establish industrial conversion committees within their respective establishments. However, effective planning at the national level can serve to encourage and guide the planning efforts of the individual companies. Consequently, the Bureau of the Budget agrees with the objectives of the proposed commission, recognizing that it is desirable to avoid serious dislocations in our economy resulting from any future reduction of defense expenditures. The President's action of December 21, 1963, in establishing the Committee on the Economic Impact of Defense and Disarmament attests to the administration's concern with this matter. The committee is charged with evaluating and coordinating the various studies underway on the economic impact of defense programs and with recommending new studies when appropriate. The membership of the new committee largely conforms with the membership of the commission that would be established by S. 2274. The principal difference between the functions of the committee and those proposed for the commission is that the latter would have its own staff which might conduct certain studies. This would appear to be a difference of little consequence. The President's committee is expected to stimulate studies by the appropriate agencies, which in most cases possess a wealth of staff resources that could not possibly be matched by the necessarily small and temporary staff of a commission. The existence of the interagency committee in guiding such studies should assure adequate protection against agency parochialism which might otherwise develop. In view of the recent action of the President in establishing a committee with objectives and membership similar to those proposed for the proposed commission, the Bureau of the Budget recommends against enactment of S. 2274. In establishing the committee the President assured that, "As work in this area produces results of interest to the Congress and the general public, they should be made available in appropriate form." We would expect that upon future provision of such information the Congress will be better able to assess the need for legislation to facilitate economic conversion from defense to civilian work. Sincerely, PHILLIP S. HUGHES, Assistant Director for Legislative Reference. U.S. CIVIL SERVICE COMMISSION, Hon. WARREN G. MAGNUSON, Chairman, Committee on Commerce, U.S. Senate, New Senate Office Building. DEAR MR. CHAIRMAN: This is in further response to your request of November 1, 1963, for our views on S. 2274, a bill to establish a National Economic Conversion Commission, and for other purposes. Since the Civil Service Commission would not be administratively involved in the programs of this proposed Commission, our comments are limited to the personnel provisions in sections 3 and 6. Section 3 would establish in the Executive Office of the President a National Economic Conversion Commission. The Commission would be composed of the heads of nine Federal agencies specified in the bill. An executive secretary, to be appointed by the President, would receive a statutory salary but the amount is left blank. We find no compelling need for providing a special statutory salary for the executive secretary and accordingly recommend that this position be compensated under the Classification Act. For this purpose section 3(c) should be amended by deleting that part which reads ", and who shall receive compensation at the rate of $ a year". Section 6(a) provides that other employees of the proposed commission shall be appointed and compensated in accordance with the civil service laws and the Classification Act of 1949, as amended. Experts and consultants, however, may be employed on a temporary or intermittent basis without regard to such laws to the same extent as in the general authority under section 15 of the act of August 2, 1946, but at rates not to exceed $50 per diem for individuals. We do not oppose the provisions in section 6(a). However, we would like to point out that the proposed $50 limitation for temporary and intermittent employees is less than the rate which could be paid if that limitation were not imposed. Under the provisions in section 15 of the act of August 2, 1946, as interpreted by the Comptroller General, agencies subject to the Classification Act are authorized to pay rates not in excess of the per diem equivalent of the maximum rate for GS-15 (now $68.96). The Bureau of the Budget advises that from the standpoint of the administration's program there is no objection to the submission of this report. By direction of the Commission: Sincerely yours, JOHN W. MACY, Jr., Chairman. THE CHAIRMAN OF THE COUNCIL OF ECONOMIC ADVISERS, Hon. WARREN G. MAGNUSON, DEAR SENATOR MAGNUSON: You have asked for our views on S. 2274, a bill to establish a National Economic Conversion Commission and for other purposes. We share the concern of the sponsors of this bill that the Federal Government properly fulfill its responsibilities in connection with changes in defense spending. In recognition of the importance of this subject President Johnson on December 21 appointed a Committee on the Economic Impact of Defense and Disarmament. The Committee is made up of the departments and agencies directly concerned with this subject and at the President's direction is chaired by the Council of Economic Advisers. We believe that this Committee will serve many of the functions which would be served by the proposed National Economic Conversion Commission. We, therefore, respectfully suggest that the Congress may wish to defer action on the proposed bill until this Committee has had an opportunity to explore these problems further, and to see what additional legislation may be called for to deal with them effectively. It may be that other mechanisms are necessary to enable the Government fully to meet its responsibilities. But we are not persuaded that enactment of S. 2274 would be an effective approach at this time. The Bureau of the Budget advises that, from the standpoint of the administration's program, there is no objection to the submission of this report. Sincerely, WALTER W. HELLER. |