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The record is abundantly clear as to how the heads of the agencies that would suffer from this consolidation feel about making NHA permanent. They have minced no words. The cold fact is that they are vigorously against it. One of them, Mr. Raymond M. Foley, commissioner of the FHA, said so when questioned on the point by a congressional committee. They have stated their views in private and in public. We feel their expert opinion merits consideration.
For all these reasons, the home builders of this country ask that this committee favorably report the resolution disapproving the Reorganization Plan No. 1.
STATEMENT OF THE NATIONAL ASSOCIATION OF MUTUAL CASUALTY COMPANIES ON
HOUSE CONCURRENT RESOLUTION 151 TO THE COMMITTEE ON EXPENDITURES IN THE EXECUTIVE DEPARTMENT
The National Association of Mutual Casualty Companies is an association of mutual casualty insurance companies. Many of its member companies write workmen's compensation insurance under the Longshoremen's and Harbor Workers' Compensation Act; the District of Columbia workmen's compensation law, and Public Law 784 of the Seventy-seventh Congress. All of these acts have been administered with efficiency and fairness by the United States Employees' Compensation Commission. The National Asoociation of Mutual Casualty Companies is, therefore, vitally interested in the President's Reorganization Plan No. 2, which would abolish the United States Employees' Compensation Commission and transfer its functions to the Federal Security Administrator.
We wish to indicate our support of House Concurrent Resolution No. 151, which wculd reject the President's Reorganization Plan No. 2, because we feel that the United States Employees' Compensation Commission should be continued as an independent agency and that the transfer of its functions to the Federal Security Administrator would not meet the requirements set up by the Reorganization Act of 1945. Our position is based upon the following considerations:
1. The Commission has had 30 years' experience in the administration of the various Federal workmen's-compensation acts. It has built up a seasoned organization of Deputy Commissioners for carrying out its quasi-judicial functions and has won an enviable reputation for fairness and efficiency. Its administration of the law has been satisfactory to employers, employees, and insurance carriers. To abolish it, especially during this critical reconversion period, and transfer its functions to the Federal Security Administrator, whose agency deals with unrelated problems, would substitute an untried, inexperienced method of administration for one of proven merit.
2. Promptness in deciding upon claims is essential in the efficient administration of workmen's compensation laws. The proposed change would, during the period of reorganization at least, result in delay in the consideration of and disposition of claims.
3. There is no reason to believe that the proposed transfer would meet any of the requirements of the Reorganization Act. No saving in administrative cost has been shown or is likely and there is no logical relationship between the quasi-judicial function of administering workmen's-compensation legislation and the other responsibilities of the Federal Security Administrator.
4. Under the act which created the Commission it is required to have a bipartisan membership. The proposed reorganization would destroy this safeguard to the public. Respectfully submitted.
NATIONAL ASSOCIATION OF
MEMORANDUM IN OPPOSITION TO REORGANIZATION PLAN No. 2 OF 1946, SUBMITTED
TO THE CONGRESS ON MAY 16, 1946, PURSUANT TO THE REORGANIZATION ACT OF 1945, BY FRANK W. GLENN, ON BEHALF OF THE INSURANCE COMMITTEE OF WASHINGTON BOARD OF TRADE
Reorganization Plan No. 2 transfers the present functions of the United States Employees' Compensation Commission, to the Federal Security Administrator and makes other changes in the powers and functions of the agency as well as the
abolishing of the Social Security Board and the transfer of its functions to the Federal Security Administrator.
The United States Employees' Compensation Commission through its Commissioners and Deputy Commissioners administers the Longshoremen's and Harbor Workers' Compensation Act, the District of Columbia Compensation Act, and the Compensation Act covering outlying defense bases. As part of its duties under these acts, it determines what employers shall be authorized to self-insure their compensation liability and what insurance companies shall be permitted to write insurance under these acts. It also administers the United States Employees' Compensation Act covering Government employees.
The plan makes no provision concerning the hearing of cases under the Longshore and Harbor Workers' Compensation Act and the District of Columbia Compensation Act and it is not clear as to whether the Deputy Commissioners and their staff will be retained to carry on their present duties.
The Reorganization Act of 1945 gave the President broad powers to reorganize the Government agencies. The purpose of the act was to increase efficiency, reduce expenditures, and avoid duplications of facilities in the reconversion to peacetime activities.
Point 1 Plan No. 2 fails to increase efficiency
The handling of compensation work is a highly specialized field and requires well-trained and experienced personnel to function properly. The present Commission with their Deputies have been doing a very creditable job for many years and to change this procedure and place it under the Federal Security Agency would create confusion and delay in the adjudication of claims arising under the respective Compensation Acts which would be detrimental to the interests of the injured employees, the employers, and the insurance carriers.
Prolonging the settlement of claims on Federal cost plus contracts would also tend to delay reconversion of war industries to peaceime production.
Plan No. 2 would not promote economy
In handling claims of Government employees the plan provides a more complicated procedure than the present method and would be less economical.
It is not likely that a new inexperienced agency could function as efficiently or as economically as the present Commission with its years of experience in handling compensation claims.
Plan No. 2 is a step in placing workmen's compensation within the Federal
Security System This plan would for the first time bring workmen's compensation within the scope of the Federal Security Agency. It would place within that agency authority over self-insured employers and insurance companies, since such agency would have the power to determine what employers are to be permitted to self-insure and what insurance companies would be permitted to write such workmen's compensation insurance. This agency up to the present has not exercised such supervision and is not fitted either through experience or organization to exercise it.
Plan No. 2 contravenes the provisions of the Reorganization Act of 1946
This plan contravenes subsection 6a of section 5 of the Reorganization Act of 1945. This subsection prohibits, in reorganization plans, any “greater limitation upon the exercise of independent judgment and discrimination, to the full extent authorized by law,” in carrying out quasi-judicial functions than that which existed with respect to the exercise of such functions by the agency in which it was vested prior to the reorganization.
The United States Employees' Compensation Commission is required by law to be a three member bipartisan body. The transfer of its functions to a single administrątor, head of the Federal Security Agency, constitutes a greater limitation on the exercise of independent judgment than is authorized under present law, since it would not represent bipartisan judgment.
With respect to claims by Government employees, the present Commission passes on the merits of individual original claims. Under the plan the independent judgment and discretion of the three members will be abolished and the judgment of a single hearing officer be substituted therefor, and this judgment would be further subject to the views of the three-man Appeal Board, which is not specified to be bipartisan and provision for which is not made in the law.
The plan does not specify who shall pass on claims under the Longshoremen's Act over which the Commission now has direct supervision, such as lump-sum settlements. However, the elimination of bipartisan judgment with respect thereto would seem, in itself, to constitute a greater limitation upon the exercise of independent judgment than is now provided by law.
It is respectfully submitted that for the foregoing reasons Reorganization Plan No. 2 of 1946 should be disapproved.
STATEMENT OF AMERICAN BANKERS ASSOCIATION ON REORGANIZATION PLAN No. 1
TO MAKE PERMANENT THE TEMPORARY WARTIME NATIONAL HOUSING AGE CY
The American Bankers Association is concerned over one phase of Reorganization Plan No. 1; that is, part V, which would make permanent the National Housing Agency. The association with its membership of over 15,000 commercial banks, savings banks, and trust companies, constituting over 97 percent of all the banking institutions in the country, all of which are extensively engaged in financing home construction, has had occasion previously to consider this proposal in connection with the Wagner-Ellender-Taft bill, S. 1592.
At hearings held by the Senate Banking and Currency Committee last December on that bill the association opposed the permanent consolidation of the Federal Housing Administration, Federal Home Loan Bank Administration, and Federal Public Housing Administration into a permanent National Housing Agency, and urged that the National Housing Agency be abolished and the constituent agencies be permitted to revert to their former status.
The National Housing Agency was established and the constitutent agencies consolidated therein by Executive Order No. 9070 of February 24, 1942, under the authority of the First War Powers Act. This act authorized the President to make such reorganizations of Government agencies as would promote the war effort and provided that the agencies which were consolidated under such reorganization should revert to their former status 6 months after the official termination of the war.
Congress clearly intended that such reorganizations should be undertaken only to meet the exigencies of wartime and should terminate within a reasonable time after the war was over.
The Federal Housing Administration's normal functions are the insurance of private financing institutions against loss on home-mortgage loans and on loans for modernization, repairs, and improvements on real property. The Federal Home Loan Bank Administration, which, prior to its consolidation into the National Housing Agency was the Federal Home Loan Bank Board, exercises supervisory functions over the Federal Home Loan Bank System, which is composed of the Federal home-loan banks, the Federal Savings and Loan Insurance Corporation, and the Federal savings and loans associations. This system is in many respects comparable to the Federal Reserve System and the Federal Deposit Insurance Corporation although its operations are confined to the home-financing field. It is essentially composed of private mortgage lending institutions operating under Government supervision.
The normal functions of the Federal Public Housing Authority, on the other hand, are the administration of the United States Housing Act under which the building and rental of public housing is subsidized by Federal grants to publichousing bodies. To bring together the agencies concerned with privately financed housing with the agency concerned with public housing under one administrator cannot help but lead to unfortunate results.
If these agencies, whose functions, purposes, and operations are so widely diverse, are brought together under a single administrator there would be the ever-present danger that he would be inclined to aggrandize the work and activities of the public housing authority to the deteriment of those agencies dealing with private financing institutions, while conversely he might be inclined