requires of top agency officials in working on, preparing, and giving testimony. Representative HALL. Yes. Mr. SCHULTZE. Really they are doing it before four committees instead of two each year. Representative HALL. This committee has ofttimes heard recommendations that committees sit in joint session if they must persist as separate authorizing, legislative committees and/or appropriation committees in the two bodies and this committee is going to have to face and wrestle with the problem, of course, which has been brought out here repeatedly, of whether the Constitution means what it says about whether the people's personally elected representatives will organize national taxes and tariffs and levies and so forth or whether the other body will approve or not, and if they are going to do both in both bodies, whether they can be in joint session in doing it. We are well aware of that and I think your suggestion is well founded there. I want to get back just a little bit more into the question of the Bureau of the Budget function as it relates to the policymaking function of the Congress, and I would like to set up just an example certainly you are both familiar with, and Mr. Staats and I have discussed in the Armed Services Committee before. Wherein does the Bureau of the Budget derive, for example, such power as to say, and again I am perhaps being the devil's advocate here, but if so it is for an ulterior point because we are coming down to the real nuts and bolts of this problem, the functions of the legislative branch vis-a-vis the executive branch, and my example would be this question of military hospital construction that the Bureau of the Budget has very definitely been in, I believe, to the point of establishing on your staff your own hospital administrators and sending out as members of teams with the Department of Defense. In fact you have had a very interesting exchange of letters and statement of agreement between yourself and the Secretary of Defense about who is going to do what to whom, leaving out almost altogether the Surgeons General, who are the technical advisers, at least, to the President or were in the original concept, and certainly assuming the prerogative of civilian medical care capability determination insofar as the question of the true and original Medicare Act of 1956 is concerned, which has to do with the provision of care of dependents of uniformed military personnel in hospitals. We have been all through this. I think the question has been pretty well settled. There is a Mexican standoff type of agreement between the two, but my question is, What is the source of authority for getting into a policymaking area like that of the Bureau of the Budget vis-a-vis the plain wording of the Constitution concerning the policymaking function of the Armed Forces of the Congress? Mr. SCHULTZE. It seems to me in this case in the area of hospitals, for example-it stems from the responsibilities of the Bureau in advising the President on the most efficient and economical means for carrying out his program, and this, in turn, includes the whole area, it seems to me, of hospital administration. Clearly, reasonable men can argue as to whether we spend too much time on this and not enough time on some other thing. But here is an area where we have developed within the Bureau some fairly pretty competent expertise in the area of hospitals as part of our function of advising the President on efficient and economical administration, construction, and operation of 178,000 hospital beds. Representative HALL. Well, I would disagree first that this is his function. I would say this is the function of the Congress. Because the Constitution plainly says that the Congress will develop the policy for the Armed Forces; it is separate for the Army, Navy, and Air Force and so forth. And secondly, as I believe I did when you had Mr. Staats appear before the committee in lieu of yourself, I would severely questionbut that wasn't the point I wanted to bring up here today-your relative expertise in this area to that of the Surgeons General of the three Armed Forces, for example. And even whether or not you could hire technical experts that qualify in this very complicated area or not. But what I want to know is simply the source of that authority which you presume in the first place to do this, right or wrong. The executive command decision. Mr. SCHULTZE. What I was saying, the point I wanted to make, Mr. Hall, is one can distinguish between policymaking, and administration and execution, and execution, it seems to me, does involve many questions relating to the specific nature of the hospitals to be built in terms of the most economical way of doing this, to get the most value per dollar. It seems to me this is a matter not primarily of policy but of efficient administration and execution. Representative HALL. Well, I think I see your point of view on that. Of course, that pretty well comes down to the question of whether we build more B-52 bombers or not even though after the Congress has said it will be our policy to have followons and so on. Whether you have obstetrical beds for training in keeping a rounded-out staff of administration capability for the hospital, if that is a policy set by the Congress, then as an executive matter when you refuse to implement it because you don't believe Army hospitals need that training or that kind of a staff or that expansion of bed capability, gets to be a pretty thin line of demarcation between legislative policy and executive implementation. Mr. SCHULTZE. I would agree that the line is difficult to draw in many cases. Representative HALL. Again I am not-I don't want to again bring up this old question. I am just using it as an example; I could use the B-52 bombers, with the RS-70, or 750-pound iron bombs vis-a-vis something else. Mr. STAATS. I think, Mr. Hall, the point I would like to emphasize here is that as a basis for submitting budget estimates, we try to develop this on a consistent approach among the various agencies in the hospital field. This year the Congress has stated its policy more sharply, more precisely, more clearly with respect to obstetrical beds than in previous years. Representative HALL. No question about that. I helped to write it but because it was after the fact and because the special subcommittee hearings and what had happened and had been done Mr. STAATS. Yes, but I was questioning really whether or not the Bureau's work in this field, which took place over the past several years and preceded the action of Congress this year-it would seem to me it was perhaps on a somewhat different basis than our future actions in the area. There is no effort here I am sure you didn't intend to apply this-to really negate a clearly stated policy of the Congress. Rather it has been the framework that Mr. Hechler and Mr. Brooks have pointed out before. We have several agencies in the hospital field. Obviously we need some basis on which to decide who is to do what and on what basis should we submit budget estimates. Representative HALL. I submit to you it is going to be a lot worse after the actions of the Congress this year going back to your point sometimes we authorize more things than we can accomplish. Mr. STAATS. Yes. We have to look at it, as these gentlemen pointed out to us a while ago, on what basis do we fund programs where you have several agencies who are in the business of providing the service. Representative HALL. It just seems to me that the statement you made the other day to the effect that the committees should concentrate on issues of a program choice rather than details of agency management without getting into the question of surveillance, oversight or review of appropriations or appropriations vis-a-vis authorizations, that there is another clean, clear area, and I think maybe your last statement, Mr. Staats, is right, and is good, which in sum would be that the executive prerogative had grown for lack of definition otherwise maybe like Topsy until a clear legislative policy was made, and then your mission does change. Mr. STAATS. I think that is correct. Representative HALL. That is a good statement and that satisfies me on that. I just have one other question that I think ought to be exercised a little more and, again, if you did it the other day in my absence and if it is in the record please don't repeat it. That is the question of the differentiation in the annual ceilings or the spending budget vis-a-vis the obligational budget. Did you and Mr. Curtis or some of the others Mr. SCHULTZE. Mr. Curtis and I talked about that at some length. You may have some specific questions on it. I will be glad to answer. Representative HALL. I think there is no use to go over that again. Again let me say thank you in appreciation for your being here. I want to leave with a restatement of the fact that in asking these questions and in punching deeply I have done it only for a basic underlying purpose as the devil's advocate and that has no reflection whatsoever on my appreciation of what you are doing and the enormousness of the task you accomplish annually as the staff coordinator or the good right arm of the President. Mr. SCHULTZE. I appreciate that. Thank you. Representative BROOKS. Mr. Chairman, I wonder, Mr. Director Schultze, what role do you envision for Congress in determining just what these Federal programs will be, what the Federal function will be in these broad areas? Mr. SCHULTZE. I guess my primary answer, Mr. Brooks, is the role of the Congress essentially will be what the role of Congress is now— two basic respects; first, in its legislative committee in authorizing the programs and, second, in its appropriations committee in funding them. You may have had something in mind I am missing. Representative BROOKS. That is close enough. I want to put in the record at this point a letter from Robert J. Mowitz, who is director of the Institute of Public Administration at the Pennsylvania State University, who has been reading and following our hearings very closely and he had a statement in it that I think would be heartening to you. He says: It is my understanding that the new budget approach now underway through BOB will incorporate the systems concept. The implications for Congress stemming from the systems approach to budgeting should be quite apparent. Once the entire Federal budget becomes oriented along systems lines, it will provide Congress with a better conceptual basis for evaluating any particular program within the context of the larger system of which it is a part. This, I thought, was a significant appreciation of the view that you have been expounding. Mr. SCHULTZE. I believe this will be one of the merits of what we are trying to do. In all honesty, I guess I would have to say this will take some time, and we are starting. Representative BROOKS. He added one other thing in his letter. He said: To take advantage, however, of the contemplated shift in the executive budgetary process, congressional organization itself will have to reflect the major systems into which the national budget will be divided. Which means that the joint committee may have some interesting discussions on jurisdiction and consideration of this new information. I think the letter will be helpful and it is an interesting view. I would submit it, Mr. Chairman. Representative HECHLER. Without objection. Mr. SCHULTZE. Let me make one point on that. I don't know whether I would want to leave you with the impression that all of a sudden there will spring from Zeus' brow some magic new format in which all problems will be easily answered. This is not going to be a system that is going to answer everybody's problems. I am sure you know. Representative BROOKS. I have a few you haven't answered. I will send some down there which have been there; there have been some there that have been there a good while. You haven't got that map problem solved yet. Mr. SCHULTZE. Yes. Representative HECHLER. Without objection the letter to which Congressman Brooks referred will be incorporated. (The letter referred to is as follows:) Dr. NICHOLAS A. MASTERS, THE PENNSYLVANIA STATE UNIVERSITY, Research Consultant, Joint Committee on the Organization of the Congress, DEAR NICK: This is in reply to your request for comments concerning the Defense Department's budgetary process as it relates to the joint committee's concern with the organization of Congress. The most significant management innovation introduced by Secretary of Defense Robert McNamara has been the program package approach to budgeting making use of cost effectiveness analysis as the basis for program decisions and employing systems analysis as the conceptual framework for approaching the total budget decisionmaking process. The individual primarily responsible for this innovation has been Assistant Secretary of Defense (Comptroller) Charles J. Hitch, and the individual responsible for directing the major cost effectiveness studies is Deputy Assistant Secretary (Systems Analysis) Alain C. Enthoven. These two individuals could provide the committee with the most detailed information concerning how the process functions with illustrations of its application during the past 6 years. Cost effectiveness studies have been applied to several defense programs during the past several years. Among the better known decisions based upon such analysis was the decision to discontinue the development of the Skybolt missile system. This was a medium range air-to-ground missile which flunked the cost effectiveness test when compared with other elements in the strategic weapons system. Abandonment of the B-70 program and the Dyna-Soar space glider are also conspicuous examples of the application of cost effectiveness analysis as a basis for program decisions. I am certain that Messrs. Hitch and Enthoven could supply the committee with detailed accounts of these as well as many other decisions which have resulted from the application of cost effectiveness studies. The most significant element in DOD's program package budgeting approach is the employment of systems analysis, which is a simple but, nevertheless, fundamental conceptual approach. It means that all of the relevant components of a system must be considered within the total system context when making decisions concerning the components. Thus, Army, Navy, and Air Force components of the strategic warfare system are thrown into the same decision hopper in making decisions about the strategic system. If the same logic were applied to the national transportation system, it would mean that the programs and decisions of the Interstate Commerce Commission, Maritime Commission, FAA, St. Lawrence Seaway Development Corporation, Federal Bureau of Roads, and programs of all other Federal agencies affecting transportation would be considered within a single systems context as it applied to the total national transportation system. The effectiveness of programs and decisions of the component agencies could be costed out in terms of their impact upon the total transportation system. This, of course, would provide the "cost effectiveness analysis." It can be readily seen that if this were to be done, it might reveal that there is no such thing as a national transportation policy but merely a collection of component policies which when added together create chaos in our national transportation system. The same chaos probably would be found to exist in our national health system, if we were to take all of the components now affecting health within the Federal Establishment and cost out their effectiveness in the total national health system. It is my understanding that the new budget approach now underway through BOB will incorporate the systems concept. The implications for Congress stemming from the systems approach to budgeting should be quite apparent. Once the entire Federal budget becomes oriented along systems lines, it will provide Congress with a better conceptual basis for evaluating any particular program within the context of the larger system of which it is a part. The current inability of Members of Congress to see both the parts and the whole of the governmental system simultaneously-or to put it in other words, to see the components within the context of the total system-is a persistent theme in the testimony that I have reviewed that has been presented to the committee. To take advantage, however, of the contemplated shift in the executive budgetary processes, congressional organization itself will have to reflect the major systems into which the national budget will be divided. This would require a change in the present standing committee structure to assure that the standing committees themselves deal with relevant systems. For example, standing committees on the national transportation system and national health system could review all relevant programs within those systems within their proper systems context and could make more rational decisions concerning competing demands for resources among the components. Ideally, adjustment of congressional organizational structure to accommodate to changes in executive agency decisionmaking processes should occur simultane |