$60,000 to restore field travel to more desirable level of activity in order to make more on-the-spot observations and consultations. $44,000 to meet increased costs of other services such as security investigations, training, and computer services.

$71,000 to cover increased costs of communication operations, printing by Government Printing Office, supplies, and congressional publications.

SUMMARY OF 1969 REQUEST

In summary, the Bureau's 1969 budget request originally provides

for:

An appropriation of $10,310,000, which is $935,000 more than is estimated to be available for 1968 after effecting reductions required under Public Law 90-218 and allowing for restoration of funds needed to meet part of the increased pay costs under Public Law 90-206. (As has been pointed out, the 1969 request is actually $810,000 over the original 1968 appropriation.)

Of this increase, $141,000 was requested to provide funds to work on resources planning and management information programs, $372,500 to permit full staffing under our currently approved authorization, and $421,500 to meet workload and nondiscretionary increases.

A staffing increase of nine positions made up of six professionals and three secretaries. It was intended that these nine positions would be assigned as working staff on two newly established units; namely, resources planning and management information.

MANPOWER ADJUSTMENT

Although the Bureau of the Budget is not appealing the reduction of $310,000 made by the House of Representatives, we shall make every effort to adjust our manpower so as to handle both new responsibilities and increasing regular workload. The Bureau will continue to discharge its responsibilities both to the President and the Congress to the maximum extent permitted by its limited staff resources.

QUESTIONABLE BUDGET REDUCTIONS

Senator MONRONEY. Thank you very much, Mr. Hughes, for a very clear and concise statement presenting a problem of great interest on how the economy is effected.

I, for one, am not too much in sympathy in making economies simply for the sake of showing savings. I am in favor of making economies to get results in greater savings. For that reason I am somewhat disturbed over the degree of broadside ax cuts made throughout the Government budget regardless of how important this or that function may be.

It is too bad to see this very vital control element of all Government expenditures, as well as the planning and operation and modernization of systems sometimes in need of tens or hundreds of millions or even billions of dollars, penalized in a way which would make it less effective. It is not wise to cut the controller of a business down and then spend more money on advertising or fancy wrapping paper, which often happens in Government departments.

I venture to say there are tens of millions of dollars of savings that could possibly be effected by the adequate staffing of the Bureau of the Budget-savings that will not be made. These frivolous expenditures won't be discovered. The Bureau of the Budget lends aid to the Congress in discovering places where costs are out of line or where services are necessary to determine cost effectiveness.

Well, they are discontinuing functions that maybe are no longer necessary in many places.

SHARING OF ECONOMIC BURDEN

Do you have any functions in the Bureau of the Budget you are going to willingly dispense with because of these cuts?

Mr. HUGHES. No, Mr. Chairman, I don't think that will be the consequence. We are, for all of the reasons you so succinctly outlined, endeavoring to increase our staff in a moderate fashion over present levels.

We will, as a consequence of the House action, be forced to spread the work around somewhat more heavily than would otherwise have been the case; but we feel a responsibility, in a sense, to bear our own share of the burden of the fiscal bind in the current situation.

We do not want to do this-obviously, we don't want to do it in a penny-wise-and-pound-foolish fashion. It is for this reason that we sought the level of appropriation and staffing requested in the President's 1969 budget.

It is my own view that the Bureau has, over the years, taken its share of responsibility perhaps somewhat too seriously. The most concise evidence of that is the fact that at the present time the Bureau is actually smaller today than it was when I joined it in 1949.

U.S. BUDGET, 1949

Senator MONRONEY. You mean it is smaller today in total staff than in 1949?

Mr. HUGHES. That is correct.

Senator MONRONEY. Do you remember what the budget was in 1949? Mr. HUGHES. No, sir; I do not offhand, but it was much smaller. Senator MONRONEY. Well, it was tremendously smaller. I am certain, if I remember correctly, it was probably around $40 billion.

Mr. HUGHES. That is correct. The budget expenditure in fiscal 1949 totaled $39.5 billion.

Senator MONRONEY. Today it is around $185 billion.

Mr. HUGHES. Roughly $186.1 billion on the more comprehensive basis used for fiscal year 1969.

BUREAU ROLE

Senator MONRONEY. This is the first item under consideration and, I think also, the key item as we go through all Government expenditures and we need to think about this. In other words, if the controller is not equipped to handle the controller's job, then every unit in the department store is going to be at loose ends. Your efficiency comes as you emphasize business control and make recommendations that can eliminate functions, activities, loose departments, and unnecessary, or obsolete workloads.

I don't think that, because you have to be the hatchetman to cut and trim the underbrush out of Government, we can do less. I mean it is just like trying to stop a crime wave by firing half of the policemen. You just don't reach it that way.

Mr. HUGHES. I certainly agree with that, Mr. Chairman. We will not leave the Bureau at loose ends at this budget level. We feel that this level is certainly a minimum, but will still permit us to augment our resources somewhat. We feel that this level is consistent with our request of you and consistent with the needs of the times.

Senator MONRONEY. You are not appealing the House cut imposed on this important controlling mechanism in the whole Federal Government. What you are saying is if you are cut back to a personnel level of 1947 that number cannot adequately examine a $180 billion budget as we have today, with all our complications of space and the military and other departments that come under your purview.

I just would hate to see a failure of management, and management is what the Bureau of the Budget is, at least on the fiscal side. Oftentimes the Congress calls on you for reports of the efficiency of programs and things of that kind. I am disturbed if you are going to be shorthanded and have to operate with a staff at the same level as in 1947-49.

EXPENDITURE REDUCTION, 1968

You took a cut, you say, of $277,000 under Public Law 90-218. That is a pretty husky cut for a small operating budget. That was the withholding of a certain percent of your funds; wasn't it?

Mr. HUGHES. That was the so-called 2/10 reduction.

Senator MONRONEY. That was a meat-ax cut; wasn't it? I don't want you to agree, but it was to me. We didn't single out an agency but sent a plague on all of your houses.

Mr. HUGHES. It was an across-the-board cut.

Senator MONRONEY. And without reference to duties or workload or anything else. The most wasteful agency got a 2-percent cut as well as the most frugal.

Mr. HUGHES. There were some exemptions, but it was across the board in most agencies.

Senator MONRONEY. The Bureau of the Budget was not exempted; was it?

Mr. HUGHES. It was not.

PAY LEGISLATION COSTS, 1967

Senator MONRONEY. When we had the pay increase, we told you to increase the pay of your employees and you were directed to absorb as much of that as possible.

Mr. HUGHES. Yes, sir. That was this situation.

Senator MONRONEY. What percentage did you have to absorb?

Mr. HUGHES. There was no stipulated percentage. The cost of the pay act for us was $271,000. We are asking for restoration of $152,000 of that amount, leaving us with a balance of $119,000 to be absorbed. Senator MONRONEY. That is $119,000 to be absorbed ?

Mr. HUGHES. Yes, sir.

Senator MONRONEY. Actually, that meant the same as a budget cut because you had the same number of bodies on the payroll. You

had to pay them all a 7-percent increase or so and that had to come out of your payrolls. So this means less manpower?

Mr. HUGHES. That is correct.

HOUSE REDUCTION

Senator MONRONEY. Then the House comes along in this year's budget, the fiscal 1969 budget, and cuts you $310,000 below the budget estimate?

Mr. HUGHES. We are seeking in this request, Mr. Chairman, the positions which we, in effect, lost because of those prior absorptions. We were contemplating, in our request to the House, a level of 555 positions and 542 man-years.

MAN-YEAR DESCRIPTION

Senator MONRONEY. What is the difference between man-years and positions? I wish you would get down to common numbers on these things. I am talking about bodies and you are talking about man-years.

Mr. HUGHES. Well, positions are, in effect, allocated slots in which we can place people. The man-years are essentially the average positions. The lapse, or the difference, reflects the positions not filled for a particular period of time because people leave and the positions are not filled immediately.

RECRUITMENT

Senator MONRONEY. You have a little harder time filling your vacancies than an agency looking for stenographers or blue-collar workers; don't you? You have to be a pretty good accountant to be considered.

Mr. HUGHES. We try to be pretty selective in our hiring. Our recruitment program is quite effective. We are having, I think, essentially a normal level of difficulty at the present time, no more or less; but we are selective in our hiring.

We visit about 20 graduate schools to recruit some of our staff.

NON APPEAL CONSIDERATIONS

Senator MONRONEY. Well, the point I am trying to get at is, cannot the Bureau of the Budget and the Congress save the taxpayers more money by our meeting your needs than by cutting you these numbers of slots that you must have?

You are not asking for restoration. I know that. I admire you for it. You are like the doctor who has to take his own castor oil, if he gives it to the patient; but we don't necessarily have to follow that route. Mr. HUGHES. It is a tough choice, Mr. Chairman, for you and certainly for us. It is difficult for me to say that I don't think the Bureau of the Budget could not save $310,000 somewhere in the Government with the House cut figures restored as part of our budget. On the other hand, we see around us other Government agencies confronted with similar situations. The Internal Revenue Service has strong feelings on what it could do with additional agents, and so it goes. Those are the considerations that enter into our decision not to appeal.

I would like to emphasize that we don't, in your terms, anticipate any breakdown in our functions because of the staffing levels which

will result from the reduced budget. Actually we can see some moderate strengthening of our capacity to do the jobs we are supposed to do, and like to do as far as the Congress is concerned.

AVERAGE EMPLOYMENT

Senator MONRONEY. Give us for the record your staffing levels. I presume it includes stenographers as well as technical people and accountants; does it not?

Mr. HUGHES. That is correct.

Senator MONRONEY. Let us go back to 1967. Do you have the 1967 employment figures?

Mr. HUGHES. Yes. Our average employment for 1967 was 495.
Senator MONRONEY. That is average employment.

Mr. HUGHES. Average.

Senator MONRONEY. This is because of the vacant slots you had and have not filled?

Mr. HUGHES. That is correct. We estimate average employment for the current year at 509. I think that figure is probably going to be a little bit high but it will approximate 509 for fiscal year 1968.

Senator MONRONEY. How many positions are requested for 1969? Mr. HUGHES. 1969, we were originally requesting average employment of 542. That would reflect 555 positions.

Senator MONRONEY. Well, is that average employment, or is it going to be decreased by the unfilled jobs?

Mr. HUGHES. We had hoped to achieve the 542 as an average employment for the year but with the reduction of $310,000 it will probably be necessary to reduce average employment to 522.

Senator MONRONEY. Average employment?

Mr. HUGHES. Yes. That will, as you can see, if we can achieve it and survive counterpart actions to the 2/10 amendment it would have permitted some increases in our staffing.

FUNDING OF MANAGEMENT IMPROVEMENT SURVEYS

Senator MONRONEY. Tell me, when you make careful surveys of the adequacy of surplus funding of other agencies of Government, are you reimbursed by the agencies or does the expense come out of your shop budget?

Mr. HUGHES. Basically, it come out of our budget. The President has the management improvement fund which can be used for contract surveys and special studies. Basically, though, the Bureau's appropriation is the source of our financial and staff resources.

NUMBER OF EMPLOYEES

Senator MONRONEY. The table from the Bureau of the Budget, the personnel summary table, shows the average number of all employees as follows: 551 for 1967, 561 for 1968, and 598 for 1969.

Mr. HUGHES. I was giving full-time permanent figures. Your figures include part-times and temporary summer workers, et cetera.

Senator MONRONEY. Your total number of permanent employees as shown are: 503 in 1967, in 1968 it is 544, and in 1969 it is 553.