John D. Biggers, chairman, finance committee, Libbey-Owens-Ford Glass Co.

"In general, I believe that these important Government officials should receive salaries commensurate to those they could earn in private business or professions. These men in Government hold very important positions affecting the welfare of our Nation and the lives of its people. I do not think we should expect them to make serious financial sacrifices when asked to leave private life and accept Government service."

Roger M. Blough, chairman, United States Steel Corp.

"First-rate people do not accept public service exclusively for the pay it offers. Public service should be in part, but not in unreasonable part, its own reward. It would be a sad day for America if men and women were no longer willing to make some sacrifice in order to serve in high office of Government * * *. But we Americans, I am afraid, have been abusing a good thing. We have, for too long, been expecting too much for too little from members of the President's Cabinet, Members of the Senate and the House, and the members of the Supreme Court.*** Despite the pressures of inflation, the salaries of these officers have lagged far behind those of people in other walks of life * * *. So I believe that the increases recommended by the Advisory Panel on Federal Salary Systems should be enacted into law ***."

Harold Boeschenstein, chairman, Owens-Corning Fiberglas Corp.

"We cannot expect men of proven ability to uproot their lives and business or professional careers and to expose themselves to the pitiless glare of constant press and congressional scrutiny and, at the same time, also require a substantial reduction in their income. More and more, this will tend to concentrate available talent into two categories: those for whom even inadequate compensation is more than they can command in private life, and those of independent means for whom the amount of compensation is relatively immaterial. This is a great danger for the future of our democratic process."

Lucius D. Clay, senior partner, Lehman Bros.

"While the honor of serving in the Cabinet, in Congress, or in top Government posts should still be the principal incentive, salaries should be adequate and, in some degree, comparable with those paid in the business world, which they are not today ***. If we want sound government efficiently administered, if we want a Congress understanding of the complex society in which we live, we should be prepared to provide adequate compensation which, in the long run, will save far more than the extra cost."

John Cowles, president, the Minneapolis Star and Tribune

"It seems quite plain that compensation for top jobs in the Federal Government has got badly out of line with pay scales not only in private industry but in State and municipal governments, university and public school administration and faculties, and comparable activities ***. We are almost in the position of asking private individuals, when they are appointed to such high positions, financially to subsidize the Federal Government (through their acceptance of cutrate compensation) at the same time that they take on tremendous burdens of responsibility on the Nation's behalf. And in some cases, where individuals of outstanding talent lack private financial sources, we deprive the Nation of the services of the best men available for specific positions ***”

Henry Ford, chairman, Ford Motor Co.

"Many able citizens have made great personal sacrifices to answer the call to Government service. But the attrition has been great as these conscientious men and women have been forced to return to their businesses or professions to meet their personal and family obligations ***. Our need for excellence in Government must not be thwarted by salaries which are unrealistic. If it is essential that we obtain the best men in top echelons of government—and it is—it also is essential that we pay them adequately. To save money by paying them less is the greatest extravagance we could commit. I believe that the salaries recommended by the Advisory Panel on Federal Salary Systems represent the least we can afford to pay our top officials **

Clarence Francis, industrialist

"We have been blessed in the past by having excellent patriotic citizens answer the call, but I believe the time has come for upward adjustments in the salaries for top-ranking officers, I refer to the Cabinet members, our Senators, our Con

gressmen, our judiciary, and our top-ranking policymaking civil servants. Comu monsense indicates that we must attract capable men and hold them in service I am convinced that this can be accomplished only if the compensation is realistie I therefore strongly favor a revision of salaries in the top echelons of our aduluistration ***"

G. Keith Funston, president, New York Stock Exchange

"We cannot hope to solve the numerous complex problems facing our country today unless men and women of outstanding ability continue to be attracted to high-level positions in the Federal Government. Consequently, Government 241aries at top echelon levels must be sufficient to allow talented individuals to accept these positions without undue financial sacrifice on their part."

C. R. Smith, president, American Airlines

“It is unfair, both to the individuals concerned and to our country to repulce competent men and women to make substantial financial sacrifices in order to serve in our Government. Our country is neither poor nor niggardly. We can afford to pay for the reasonable worth of services given to the Government ali should do so, as a matter of basic and continuing policy. By doing this, we will make it easier for good citizens to serve and we will reasonably insure better government."

T.S. Petersen, director, Standard Oil Co. of California

“Increased salaries for Cabinet officers and Members of Congress are in orier Such action should be followed by increasing salarly levels for other appointive and executive positions so that they would be attractive to top-qualified men throughout the country. I believe it is false economy to continue these low salaries. Our Government needs top performance in the management of its affairs? Sidney J. Weinberg, partner, Goldman, Sachs & Co.

"Low pay in Federal Government service is a tremendous handicap in securing the right and best men for career service. I have learned, willie in Government. to have a profond respect for the civil servants in our buŸKELILELI. I wholeheartedly endine the Randall report on Federal coİLYALMANING. In order to raise the salaries to Federal workers it must trst start at the ty sud as for Cabinet members, Scators and Congresszer, and the Judhary. Tikk salaries are puttighete the higt responsibilities they carry

The CHARMAN. The next hearing will be Thursday at 4 didine. The hearing is recessed

Thursday, May

the bearing recessed to refolvere at 9 all,

FEDERAL PAY LEGISLATION

THURSDAY, MAY 7, 1964

U.S. SENATE,

COMMITTEE ON POST OFFICE AND CIVIL SERVICE,

Washington, D.C. The committee met at 9 a.m., pursuant to recess, in room 6206, New Senate Office Building, Senator Olin D. Johnston (chairman of the committee) presiding.

Present: Senators Johnston, Yarborough, Carlson, and Fong.

Also present: William P. Gulledge, staff director and counsel: Richard Fuller, professional staff member; David Minton, staff member: and Frank A. Paschal, minority clerk.

The CHAIRMAN. The committee will come to order.

This hearing is convened so that the committee may continue to hear testimony on Federal pay adjustment legislation.

Announcement of today's hearing was made Monday, May 4, of which this is a continuation. I appreciate our witnesses appearing at this somewhat early hour, which is made necessary by the present debate now going on in the Senate.

The date for further hearings on this legislation will be announced for next Monday at the same hour. 9 o'clock.

Our first witness today is the Honorable Elmer B. Staats. Deputy Director, Bureau of the Budget. And our second scheduled witness is the Honorable Richard J. Murphy, Assistant Postmaster General. Bureau of Personnel.

Will you proceed. Mr. Staats, as you see fit?

STATEMENT OF HON. ELMER B. STAATS, DEPUTY DIRECTOR, BUREAU OF THE BUDGET; ACCOMPANIED BY ROGER W. JONES, SPECIAL ASSISTANT TO THE DIRECTOR

Mr. STAATS. Thank you. Mr. Chairman. I have with me this morning Mr. Roger Jones, who is no stranger to this committee, who has been working very closely with Mr. Gordon and me and with Mr. Mary on this matter.

On behalf of the Bureau of the Budget. I thank the committee for giving me the opportunity to stress the President's view that enact – ment of pay legislation at this session of Congress--to use his words "reaches into the very essence of urgency if this Government means to retain excellence and quality." As he stated in a recent press COLference, it is one of five measures to which he attaches the nighest legislative priority for this session. On a separate occasion in エピー marks to the American Society of Newspaper Editors, the Presdent stated that ** * * this Governmen suffers the marsi, and ir

retrievable loss" when Government officials "* * * must quit to find higher incomes in private industry."

This position of the President is the backdrop against which I should like to present several important considerations in the case for substantial adjustments in Federal civilian pay.

First, in the Federal Salary Reform Act of 1962, the Congress and the executive branch committed themselves to the principle of maintaining career pay at levels comparable with pay received in private enterprise. President Kennedy recommended such action over a year ago, but the legislative schedule has not yet permitted final action to be taken. All of the facts which support the need for a prompt comparability adjustment are before the Congress, and these have been effectively summarized to this committee in testimony by the Chairman of the Civil Service Commission. Failure to take action will undercut the principle, and the promise, of maintaining comparability. It will also, unless action is taken soon, renew demand for flat percentage increases for postal and other career workers. We believe that the history of pay legislation between 1946 and 1960 demonstrated to the Congress and the executive branch the shortcomings of the old approach. It produced results that were more costly, less equitable, and less rational than action under the comparability approach.

Second, and perhaps even greater than the need for adjustment in career salaries, is the need for establishment of a rationalized salary structure in top positions in the executive branch, and the concurrent establishment of sound interrelationships among executive, legislative, and judicial pay schedules. Federal top salary rates have remained unchanged since 1955-56.

The President has made public several instances of the loss to the Government of highly capable officers because they no longer can afford to use up their personal savings to maintain themselves in Federal service. I should like to quote the report of the President's Advisory Panel on Federal Salary Systems on this point:

Giving up a high income to accept a lesser income in a Federal office has been a common experience in the history of our country. We believe, however, that such action should not require the individual to draw down his personal resources in large amounts in order to support himself and his family while in office. The sacrifice must be of an order which many, not just a few, are prepared to make, and it should be no greater in a Federal position than in any other form of public service. Furthermore, there are many able young men who have accumulated no reserves to help them maintain themselves in public office. It is particularly important that inadequate pay scales neither deny our country their services nor create the kind of economic pressure of family responsibility which cuts their service short when they do accept public office.

But the argument is not only an argument of need and the obvious. equity of paying executives of the Government salaries adequate to recruit and retain topflight men and women. More important is the fact that the loss of such people impedes efficient and economical management of the Government, and impairs efforts to strengthen professional, technical, and administrative leadership needed to step up the productivity of Federal workers everywhere. Furthermore, the present unduly low scale of executive pay depresses unreasonably the rates we can pay in the higher grade career positions, causing losses at those levels and creating a discouraging outlook to the young men and women we need to attract for careers in Federal service.