It has been the responsibility of the Bureau of the Budget to work closely on a day-to-day basis with President Johnson in his unremitting drive for greater efficiency, better productivity, and improved management in the executive branch. Efforts to reduce costs and increase efficiency will continue. We must rely heavily on top management to find the ways to make these savings. The recent hearings on manpower utilization by the House committee brought this out clearly. I know at firsthand the impressive management results which come from competent, enthusiastic, dedicated service at the executive levels of our Government, both by political officers and by top career people. Judged by the standards which prevail generally in the private economy and in an increasingly large number of State and local governments, these officers deserve higher pay. We do not seek now, nor do we ever expect, pay for the higher Federal levels which would equal pay for similar levels of responsibility in private enterprise. But we do believe that the Federal Government and the American taxpayers are the losers when our salary scales make it impossible for men and women to come into policy positions in Federal service, or to remain long when they do come. Similarly, we are concered when we lose our top career people because of an unrealistic ceiling on their pay. An investment of $5 or $6 million in pay adjustments for the top officers in executive agencies (the present House bill would cost about $3 million), and similar amounts to adjust pay for Members of Congress and the Judiciary, is a minutely small price to pay for the results which will come. The boost to morale and the incentive to achieve which will follow pay increases will be measured both in budgetary results and in improved program efficiency.

The Chairman of the Civil Service Commission, in his statements to the committee, outlines clearly the inequities and the chaos which our present salary structure continues to produce. I should like to underscore his testimony. The Bureau of the Budget is deeply concerned that there are at least 190 top executive positions (mostly Presidential appointees) whose pay is now the same as or lower than their subordinates in grades GS-18 or GS-17. We find equally regrettable similar anomalies between grade GS-15 and higher positions under the Classification Act structure.

I have stressed that we do not expect top salaries in the Federal Government to equal or even approach those paid in private enterprise. But we think they should not be out of line with pay in other kinds of public service. The comparison between Federal executive salaries and those now prevailing in our State and local governments, in the colleges and universities, and in other semipublic organizations such as nonprofit institutions shows how far behind the Federal Government has fallen.

The report of the President's Advisory Panel on Federal Salary Systems tabulates 902 positions in State and local governments for Governors, mayors, and city managers, administrative and professional personnel, officers of public corporations, and judges who receive salaries of $25,000 to $60,000 a year. Similarly, there are 23 local school superintendents and 89 officers of public universities who draw salaries of $25,000 or more, and over 500 principal officers in colleges and universities, public and private, who have salaries in excess of $20.000 a year. Finally, as mentioned by the Chairman of the

Civil Service Commission, the salary range for the principal full-time executives of the larger philanthropic foundations is substantially in excess of the salary scale at the top of the Federal Government.

The salary schedule to be adopted for top positions in all three branches of the Government is a matter for the Congress to decide. The administration gave full consideration to the rates recommended by Mr. Clarence B. Randall and his associates on the President's Advisory Panel on Federal Salary Systems. It was the judgment of the executive branch that the six-level structure recommended by the Panel was sound, but that the top level of $50,000 for members of the Cabinet was not required to establish a reasonable differential between the top of the career service and the successively higher executive levels.

Several proposals to reduce the scale were reviewed carefully. The Bureau of the Budget and the Civil Service Commission recommended a salary of $40,000 for level I, ranging down to $27,500 for level VI. This was the scale which the administration endorsed in testimony before the House committee. While scales as high as those proposed in the Randall Panel report can certainly be justified in terms of the duties and responsibilities of executive positions, the somewhat lower levels we supported would alleviate the financial hardships now imposed on the incumbents of those positions.

The scale which we recommended was reduced by the House committee in its consideration of H.R. 8986, to a range of $35,000 in level I and $26,500 in level VI. These figures have been still further reduced in H.R. 11049. In the most recent action by the House committee, level 1 is set at $32,500 and level VI falls to $26,000. While such adjustments would significantly improve the Government's competitive position for able men and women, they will not be as successful in solving our problem as more substantial increases. We believe that the salary for level I should be no less than $35,000.

Third, I wish to stress that we are not proposing adjustments in pay which fail to have broad public support. Some 400 leaders of business and industry were asked by the National Civil Service League for recommendations on the salary levels for the Cabinet and the Congress. They replied overwhelmingly in support of substantial mcreases Three hundred thirty-five suggested Cabinet salaries between $85,000 and $60,000. Only six suggested no change in Cabinet pay. Three hundred and five suggested congressional salaries beTween $60,000 and $10,000. Only 33 suggested no change in congresonal pay. The results of this poll have been made available to the

There has also been a revealing and important degree of editorial appece noc only from the major metropolitan newspapers such as de Yew York Pines, in its editorial on Thursday, April 30, but also Tour, le now quipers of our smaller cities across the country. Much pacte endorsement has been inserted in the Congotisce at Naval You'd like to quote one paragraph from the retv You Tork Times:

xed extravagance in Government spending argue Mes salaries would be unjustified and inequitable. waste, in Government or in private industry, is Vacion has been fortunate that so many skilled

people have been willing to accept the financial penalties involved in Government service. But with the pay scales and fringe benefits available to high caliber personnel in private industry constantly rising, the Government will find it increasingly difficult to attract and keep executives with the talent and the training required for formulating and carrying out policy.

We are confident that the American people will support action by the Congress now to adjust Federal salaries in such a way as once again to give top Federal officers and career employees pay scales much more closely related to the levels of duties required of them.

In closing, may I point out that the President's support for legislative action on pay adjustments for all three branches of the Government at this session of the Congress was firmly expressed in his budget for the fiscal year 1965. In that budget. $544 million is included for this purpose. H.R. 11049. reported from the House committee last week, is estimated to cost $533 million, taking into account the absorption of costs required by the bill's language. This will bring the net cost of the bill well within the budgeted amount.

The Bureau of the Budget and the Civil Service Commission stand ready to supply any additional factual information in our possession which the committee may wish to have.

Now, Mr. Chairman, since this statement was prepared, it occurred to me that it might be well to have in the record a listing of the President's approval in his recommendation of the executive pay scales for levels I, II and III. and with your permission. I would like to have that added as an attachment to my statement.

The CHAIRMAN. It is so ordered.

(The document referred to follows:)

LIST OF POSTUKINS APPROVED BY THE PRESIDENT FOR INCLUSION IN
EXECUTIVE PAY LEVELS I., II, AND III

Administrator, Agency for International Development.
Administrator. Housing and Home Finance Agency.

AdıÜLİSTPETor. National Aeronautics and Space Administration.
Director. Bureau of the Budget.

Chairman Counei of Economie Afvisers.

Director of Central Intelligence.

Director, Office of Science and TechnoloY.

Chairman Board of Governors, Federal Reserve System.

Chairman £Tomie Energy ComtoissiOL.

Director. Feder. Bureau of Investigation-so long as the position is helt ny the present incumbent.

Director. T.S. Arms Control and Disarmament Agency.

Director. T.& Information Agency,

Under Secretary of Commerce for Transportation.

Under Secretary of Health, Education, and Welfare.
Under Secretary of the Interior.

Under Secretary of Labor.

Under Secretary of State, Political Affairs.

Under Secretary of the Treasury.

Under Secretary of the Treasury for Monetary Affairs.

Secretary of the Air Force.

Secretary of the Army.

Secretary of the Navy.

Administrator of the Federal Aviation Agency.

Administrator of General Services.

Administrator of the Small Business Administration.

Administrator of Veterans' Affairs.

Deputy Administrator, Agency for International Development.

Chairman, Civil Aeronautics Board.

Chairman, U.S. Civil Service Commission.

Chairman, Federal Communications Commission.

Chairman, Board of Directors, Federal Deposit Insurance Corporation.

Chairman, Federal Home Loan Bank Board.

Chairman, Federal Power Commission.

Chairman, Federal Trade Commission.

Chairman, Interstate Commerce Commission.

Chairman, National Labor Relations Board.

Chairman, Securities and Exchange Commission.

Chairman, Board of Directors of the Tennessee Valley Authority.
Commissioner of Internal Revenue.

Comptroller of the Currency.

Deputy Administrator of the Housing and Home Finance Agency.

Deputy Administrator, National Aeronautics and Space Administration.

Deputy Director, Bureau of the Budget.

Deputy Director of Central Intelligence.

Associate Director, Federal Bureau of Investigation, so long as the position is held by the present incumbent.

Director of Defense Research and Engineering, Department of Defense.

Director, National Science Foundation.

Director, Office of Emergency Planning.

Director of the Peace Corps.

President, Export-Import Bank of Washington.

Mr. STAATS. That concludes my statement, Mr. Chairman.

Mr. Jones and I will be glad to attempt to answer any questions you may have,

The CHAIRMAN. Do you have any questions, Senator Fong?
Senator FONG. Yes.

Mr. Staats, you stated that under H.R. 8986-was that the bill that was defeated in the house?

Mr. STAATS, That is correct.

Senator FONG. You stated that the range was from $35,000 in level I and $26,500 in level VI, and that was far below the amount which your Budget Bureau recommended.

Mr. STAATS. We recommended initially $40,000 for the Cabinet pay scale and then subsequently we endorsed the $35,000 schedule which was in the House bill that was defeated.

Senator FONG. And the Randall Committee recommended $50,000; is that correct!

Mr. STAATS, That is correct.

Senator FONG. So the Randall Committee recommended $50,000, your budget recommended $40,000, and H.R. 8986 approved $35,000, but the present bill now approves $32,500?

Mr. STAATS. That is correct.

Senator FONG. Now, because of the amount of $32,500 which has been set here in level I, you stated that this depresses the wage scale which you are able to offer to the higher categories in executive positions.

Mr. STAATS. It not only has the effect of depressing the schedules and compressing intervals, among these six levels, but it also brings the lowest level of executive schedule down so close to the top of the career grade that it does not permit of very many future adjustments, until you have the same kind of overlap that has troubled the Congress and has troubled the President in the past.

So that you have all three effects from the change in the schedule in the House bill. In other words, you get a lower schedule at the top, you get a greater compression of the intervals between the six levels of executive scale, and you get a lower level in relation to the top of the career level.

So all three of these things happen when compression takes place. Senator FONG. According to H.R. 11049 as testified by Mr. Macy the other day, from GS-6 to GS-15, it has not followed the comparability principle as we find it when we look at the amount of pay given in private industry for 1963, do we?

In other words, as I understand it, GS-6 to GS-15 is only based on comparability for 1961; is that correct?

Mr. STAATS. That is correct.

Senator FONG. Whereas for GS-1 to GS-5, inclusive, we have the 1963 comparability figures.

Mr. STAATS. 1962.

Mr. JONES. It is 1963.

Mr. STAATS. I am sorry. It is 1963.

Senator FONG. So, from GS-1 to GS-5, inclusive, we follow comparability up to 1963, whereas when we take in GS-6 to GS-15, we are about 2 years behind in comparability.

Mr. JONES. Not quite, Senator Fong. The middle grades are roughly 1962 comparability, and the higher grades still are back at about the 1961 level.

Senator FONG. I see. Will you be able to furnish the committee with what the figures for GS-6 to GS-15 would be, if we followed the 1963 level?

Mr. STAATS. We can give that to you, approximately, yes. On the 1963 level?

Senator FONG. Yes.

Mr. STAATS. Through all grades?

Senator FONG. All grades. Have you got the figures with you?

Mr. JONES. I think I have, sir. They are on a rough worksheet, but I can give the 1963 comparability pay line. Do you want these figures from pay line at the fourth step or on the entrance step?

Senator FONG. You can give it to us on the salary cost.

Mr. JONES. What I have here are the figures which would relate to each one of the grades. The average salary in the grades now under the Classification Act is at the fourth step of the grade, and on this