Second Deficiency Appropriation Bill for 1949

Mr. GOODWIN. I am sorry. I thought I said $43,000 was the average

for last year.

Mr. TABER. Yes; I think you did tell us that was the average for last year, but that was not what you told us for this year.

Mr. GOODWIN. I am sorry I made a mistake on that.

Mr. RABAUT. Was the rate of pay the same last year, $2,740.
Mr. TABER. No; it was $2,478.

Mr. RABAUT. $2,478, and how many did you have, 43,000.

Mr. GOODWIN. Yes.

Mr. WIGGLESWORTH. I thought you said that with this deficiency appropriation you could have an average of 38,000 and without it it would be 35,000.

Mr. GOODWIN. That is right; for the balance of the

Mr. WIGGLESWORTH. No; for the year.

Mr. KEENAN. No; for the balance of the year.

year.

Mr. WIGGLESWORTH. Do you not have an over-all average for the year?

Mr. KEENAN. They started with about 43,000.

Mr. WIGGLESWORTH. That was the over-all average for 1948?

Mr. KEENAN. That is about what they started out with on July 1. They have been going down from 43,000 since July, to 37,500 by December, and now they are going to have to come down to 35,000 for the rest of the year.

Mr. WIGGLESWORTH. That is, if you do not get this $4,000,000? Mr. KEENAN. That is correct, sir.

Mr. WIGGLESWORTH. And if you get this $4,000,000, what is the picture?

Mr. KEENAN. From here on out they could average 38,000 employees for the rest of this fiscal year. Now, for the average for the year we would have to get the figures at the end of each month and divide by 12. Starting out with 43,000 July 1 and 37,500 by December, it would be around 39,000 or 40,000 average for the year. That will depend upon, as you said, whether or not the deficiency is approved.

NONPERSONAL SERVICES

Mr. GOODWIN. I did not give you the entire picture of the nonpersonal services there. I have just checked them over on the sheet. We had an expenditure of $9,072,170 on rents and almost $20,000,000 on other nonpersonal services, $19,996,983.

Mr. TABER. That was rents?

Mr. GOODWIN. No, that is other nonpersonal services, and the rents were carried as a separate item, and they are $9,072,170.

Mr. TABER. Give me the amount for rents again.

Mr. GOODWIN. For rents it was $9,072,170.

Mr. TABER. And how much were the other

expenses?

Mr. GOODWIN. The amount for other nonpersonal services was $19,996,983.

OVER-ALL EXPENDITURES FOR 1948

Mr. TABER. Now, the total of that with the $106,554,000, which is 43,000 times $2,478, would be $135,623,000, which is more than you had to spend, so there must be a screw loose somewhere there.

Mr. KEENAN. Your figure of $2,478 is the average pay times 43,000 employees for 1948 which comes to $106,000,000.

Mr. TABER. $106,554,000.

Mr. KEENAN. The $9,000,000 rents and $19,000,000 other expenses were 1949 estimates, and not the 1948 expenditures. He gave you the estimate figures on rents and other expenditures and not the 1948 expenditures. The 1948 expenditures were nearly that amount, but slightly under it.

DISTRIBUTION OF GRANTS BY STATES FOR 1949

Mr. TABER. Do you have a break-down of the picture by States as to what you propose and what they are getting?

Mr. GOODWIN. Of what they would get under the supplemental? Mr. TARER. No; what they are getting under the appropriation that exists?

Mr. GOODWIN. For 1949?

Mr. TABER. Yes; and what they would get under this supplemental? (Discussion off the record.)

Mr. TABER. The way this thing was originally set up I see that there were two set-ups: (1) The unemployment insurance operation, and (2) an employment office under the provisions of the WagnerPeyser Act. That has been consolidated and now is handled in one spot with one force in each of the States separately. The WagnerPeyser Act was operated in part by Federal appropriations and in part by State appropriations, but at the present time the whole thing is consolidated in one outfit under the State operation and the States no longer contribute in any way directly to the cost of that operation. It all comes out of this appropriation and the three-tenths of 1 percent tax that you have referred to which last year produced $200,000,000 goes into the General Treasury.

Mr. RABAUT. Is that right?

Mr. TABER. And this comes out of the General Treasury. I think we ought to have that statement in the record. That is correct, is it not?

Mr. GOODWIN. That is right. Now, on your previous question, I have here the way the money was distributed for 1949 by States, and the proposed distribution based on the $4,987,000, which is in this request. If there is information on any of the States you want, we have it here.

TAX COLLECTED IN EACH STATE

Mr. TABER. Do you show there the amount of the three-tenths of 1 percent tax collected in each State?

Mr. GOODWIN. No; I do not have it here. We can furnish information on how much was collected from the States.

Mr. KERR. Do you not think we ought to have that?

Mr. TABER. I think so.

Mr. KERR. I wish you would furnish that to the committee.

Mr. GOODWIN. It would have to be an estimated figure for 1949.

Mr. TABER. I was asking for the 1948 figure.

Mr. GOODWIN. We can get that.

(The matter referred to is on file with the committee.)

FORMULA FOR ALLOCATION OF FUNDS TO THE STATES

Mr. WIGGLESWORTH. Let me ask if there has been a change in the formula for the distribution of funds collected from all of the States and paid to the individual States, since the beginning of last summer? Mr. GOODWIN. No; there has been no change in the formula. We are studying that question with the States. The interstate conference has a grants committee and we had a series of meetings with them a month or 6 weeks ago which culminated in their recommendation that we not change the basis of allocating money to the States for the deficiency. They do feel that it might be possible to find an improved method for allocating the funds. We are working with them on that. If we can find a different method that is more satisfactory we will be glad to adopt it. So far we have not found it.

Mr. WIGGLESWORTH. I ask that question without going into detail because, as I think you know, in my State, anyway, there has been a very strong feeling that the formula used has worked inequitably and that those States that have tried to function on an economical basis have been penalized at the expense of those who have not been economically operated, as I understand it, the cut in this year's appropriation was made with a view to curing the situation in those States which have been overstaffed and uneconomically operated.

BREAK-DOWN OF ALLOCATIONS FOR EMPLOYMENT SERVICE AND
UNEMPLOYMENT INSURANCE

Now, can you tell me one other thing, and that is of the $130,000,000 made available, how much has been spent for counseling services, to which you have referred, and how much has been used for employment service, and how much has been used for unemployment compensation service?

Mr. GOODWIN. We would have to give the figures in a break-down of the employment service and the unemployment insurance. I do not have here a break-down in the counseling service. We did not break it up that way.

Mr. WIGGLESWORTH. Can't you give the over-all figure (a) for employment service and (b) for unemployment compensation service, first, for the fiscal year 1948 and second, for the fiscal year 1949?

Mr. GOODWIN. The way we distributed the money was approximately 50-50. We will get the figures here for you. Mr. Kinsinger has them.

While he is looking for that, I should say that last year on the appropriation Congress set it up so that the States had flexibility on this point. In other words, we allocated the money on a 50-50 basis for employment service and the insurance program, and the States were permitted to shift the funds from one program to the other.

Mr. WIGGLESWORTH. That is the figure I wanted to get. I wanted to see what the picture was in 1948, and what the comparative picture is in 1949 and which, if either, service is suffering and to what extent. Mr. GOODWIN. Well, the figures we have are the allocations we made to the States. We have some incomplete figures on how the States have spent that money. In general they have shifted employment service money over to the unemployment insurance program. We do not have an actual expenditure report on that.

Mr. WIGGLESWORTH. How can you figure how much a State is going to be hurt unless you know that? In other words, in these times, the unemployment compensation service is much more important than the employment function, is it not?

Mr. GOODWIN. I thing the employment service function is still very important because if you let it drop, and there are employment opportunities as there are now, you are going to be paying out of the trust fund when you would not need to be doing so if you had a service which was properly placing these people. However, it is important to remember that the States have been given flexibility, and if they need more for their unemployment insurance program or need it worse than they do for their employment service, they can make that shift. Mr. WIGGLESWORTH. I understand they can do so, and I understand they have, but what I would like to get would be a picture State by State. In other words, a table showing how much was allocated for employment service work and how much was allocated for unemployment service work and showing how that compares with the preceding year, and what, in fact, they have done in terms of expenditure in both years. Can you not give us that picture at least for the country as a whole?

Mr. GOODWIN. Yes; I can in this way, that for the two years we allocated that money about the same way on approximately a 50-50 basis.

Mr. WIGGLESWORTH. That would be $66,000,000 for one and $66,000,000 for the other, roughly, that was allocated?

Mr. GOODWIN. Approximately, that is right. Last year, in the fiscal year 1948, the States spent it about that way. They did not have these additional demands on their unemployment insurance and they spent the money about the way it was allocated.

For the fiscal year 1949, although we do not have the exact figures, we have reports from the States which indicate that they have shifted about 20 percent of their employment service money over to unemployment insurance.

Mr. WIGGLESWORTH. Well, if you allocated $65,000,000 for each purpose, as a guess would you say they spent $50,000,000 for employment service and $80,000,000 for unemployment compensation.

Mr. GOODWIN. I think that is about right.

Mr. WYNCOOP. $78,000,000 and $52,000,000 would be about right. Mr. GOODWIN. That is about right.

Mr. WIGGLESWORTH. Can you not also give us a break-down of the $130,000,000 in terms of expenditure by each State, A for employment service and B for unemployment service, and the same information with respect to the $130,000,000 for 1948?

Mr. GOODWIN. We could give you the exact figures for 1948. We do not have the exact figures for 1949.

Mr. WIGGLESWORTH. For how much of 1949 do you have the figures? Mr. GOODWIN. We could not give you anything more than an estimate now, Mr. Wigglesworth. In view of the flexibility that the States have in the expenditure of that money as between the two programs is it too important?

Mr. WIGGLESWORTH. There is a question as to the extent to which that flexibility had been used. Maybe if it had been further utilized you would not need so much deficiency appropriation at this time.

Fiscal year 1949 budget allotments

Expenditures for fiscal year 1948

Total....

Region I:

Connecticut..
Maine....