COMMITTEE ON APPROPRIATIONS

EDWARD T. TAYLOR, Colorado, Chairman

INDEPENDENT OFFICES APPROPRIATION BILL, 1941

HEARINGS CONDUCTED BY THE SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, HOUSE OF REPRESENTATIVES, IN CHARGE OF THE INDEPENDENT OFFICES APPROPRIATION BILL FOR THE FISCAL YEAR 1941, NAMELY: CLIFTON A. WOODRUM CHAIRMAN), JED JOHNSON, JAMES M. FITZPATRICK, JOHN M. HOUSTON, JOE STARNES, RICHARD B. WIGGLESWORTH, EVERETT M. DIRKSEN, AND FRANCIS H. CASE, ON THE DAYS FOLLOWING: TUESDAY, DECEMBER 19, 1939.

EXECUTIVE OFFICE OF THE PRESIDENT

BUREAU OF THE BUDGET

STATEMENTS OF HAROLD D. SMITH, DIRECTOR; JOHN B. BLANDFORD, JR., ASSISTANT DIRECTOR; STUART A. RICE, CHAIRMAN, CENTRAL STATISTICAL BOARD, AND FREDERICK J. LAWTON, ADMINISTRATIVE ASSISTANT

Mr. WOODRUM. All right, Mr. Smith, we will take up the appronition for the Bureau of the Budget, for which the following items pear in our bill:

ares and expenses: For every expenditure requisite for and incident to the of the Bureau of the Budget, including personal services in the District of a and elsewhere, contract stenographic reporting services, traveling , including expenses of attendance at meetings when necessary in furtherthe work of the Bureau of the Budget, streetcar fares, law books, books of ice, periodicals, newspapers and press clippings, purchase of office equipit and supplies, without regard to section 3709 of the Revised Statutes when amont involved in any case does not exceed $50, purchase (not to exceed maintenance, repair, and operation of passenger-carrying automobiles for ale, and not to exceed $50,000 for temporary employment of persons or lations by contract or otherwise without regard to section 3709 of the Statutes, or the civil-service laws, or the Classification Act of 1923, as $764,000 together with the unexpended balance of the appropriation this head for the fiscal year 1940.

for printing and binding, $44,000.

Now, would you like to make a general statement, Mr. Smith?

GENERAL STATEMENT

Mr. SMITH. I have a short statement which I would like to read: The estimates presented for the fiscal year 1941 reflect the changes h have taken place in the organization of the Bureau of the get due to reorganization plan No. I. Under this plan the eau of the Budget was transferred from the Treasury Departto the Executive Office of the President, the Central Statistical

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Board and its functions were transferred to the Bureau of the Budget, and the Central Statistical Committee was abolished and its functions transferred to the Director of the Bureau of the Budget.

Subsequent to the effective date of the reorganization plan the President issued Executive Order No. 8248 which took effect on September 11, 1939, prescribing the organization of the Executive Office of the President and setting forth the duties of the various divisions of that office. With respect to the Bureau of the Budget, the following functions and duties were defined:

(a) To assist the President in the preparation of the Budget and the formulation of the fiscal program of the Government.

(b) To supervise and control the administration of the Budget.

(c) To conduct research in the development of improved plans of administrative management, and to advise the executive departments and agencies of the Government with respect to improved administrative organization and practice. (d) To aid the President to bring about more efficient and economical conduct of Government service.

(e) To assist the President by clearing and coordinating departmental advice on proposed legislation and by making recommendations as to Presidential action on legislative enactments, in accordance with past practice.

(f) To assist in the consideration and clearance and, where necessary, in the preparation of proposed Executive orders and proclamations, in accordance with the provisions of Executive Order No. 7298 of February 18, 1936.

(g) To plan and promote the improvement, development, and coordination of Federal and other statistical services.

(h) To keep the President informed of the progress of activities by agencies of the Government with respect to work proposed, work actually initiated, and work completed, together with the relative timing of work between the several agencies of the Government; all to the end that the work programs of the several agencies of the executive branch of the Government may be coordinated and that the moneys appropriated by the Congress may be expended in the most economical manner possible with the least possible overlapping and duplication of effort.

The estimates before you permit a conservative expansion of the work of the Bureau of the Budget during the fiscal year 1941. This program of expansion was begun a year and a half ago with the approval of a supplemental estimate providing for an augmented staff on a 6-month basis during the fiscal year 1939. A further increase in the appropriation was made in the annual appropriation act for the fiscal year 1940. Additional funds were made available through the reappropriation of unexpended balances from the fiscal year 1939, subsequent to the passage of reorganization legislation. The present estimates provide for the consolidation of the appropriation for the Central Statistical Board with those of the Bureau of the Budget, and for an expansion of this work.

During the fiscal year 1939 the Bureau appropriation was $319,000. Subsequent legislation transferred $3,600 of this amount to the printing and binding appropriation for the same year, leaving a balance of $316,110 available for salaries and expenses. Due to the difficulties experienced in recruiting personnel, $78,590 of this amount remained unexpended on June 30, 1939, and was made available for 1940 in addition to the amount of $479,280 appropriated for that year. Thus the total funds available for the current fiscal year amount to $557,870, exclusive of Central Statistical Board appropriations.

Inasmuch as the Bureau of the Budget encountered difficulties in recruiting an experienced high-grade staff by transfer from other Federal services, the Civil Service Commission, in September, was requested to hold a special examination for higher-grade positions in

the Bureau. When this register is available sometime in January the recruitment of staff will proceed more rapidly. On account of the lag in the first half of the year in securing personnel, it is anticipated that there will be a balance of $62,995 remaining in the appropriation of salaries and expenses. In requesting an appropriation for 1941 of $764,000, it is proposed that the above balance be reappropriated. The total amount which will thus be made available for the needs of the Bureau of the Budget, including the functions transferred from the Central Statistical Board, will amount to $826,995.

The increase in the estimate is divided into three principal segments; first, for the better examination of departmental estimates; second, for studies of governmental organization, procedures and methods of operation; and third, for the improvement, coordination and review of the statistical services of the Government.

Considering the items in the order above, it has been apparent that the Bureau of the Budget must be in a position to give departmental estimates more study, both in Washington and in the field. In the past, because of an inadequate staff, estimates of appropriation have been considered largely through the process of hearings. Proposals in this estimate contemplate an actual examination of the needs on the ground. The number of employees in this division has been increased and the number of agencies assigned to the various examiners has been reduced in order that a more intensive consideration of departmental estimates may be given. Additional funds for travel Tenses have been requested in order that Budget examiners may be better informed concerning actual operating problems in the field. It is beyond argument that this increase in expense will be returned to the Government many times over through improved examination of departmental estimates.

The second phase of the increase requested, namely, studies of organization, procedure, and methods, opens a vast field which up to the current year has been left untouched by the Bureau of the Budget. The expansion of governmental activity during the last decade has naturally raised many problems of interrelationship of activities, overlapping jurisdiction and duplication of effort. While the original Budget and Accounting Act provided that studies of this character be made, they have never been actively undertaken by the Budget Bureau. Perhaps this was due to the fact that for a time the Bureau of Efficiency performed this function. Since that Bureau was abolished there has been no agency to advise and consult with the departments concerning adequacy of the administrative machinery to perform their functions.

With the introduction of reorganization legislation and the awakered interest in the problems of governmental organization and operating methods, it was inevitable that attention would be called to the need for an agency to study and coordinate efforts toward siplification of the administrative machinery, to survey the distributos of functions between agencies and to appraise the various types of procedures and methods in use. With the adoption of the reorganzaion plans there was the added necessity for an agency to assist in the effectuation of those plans so that the maximum benefits might be derived.

The staff requested for this purpose in the estimate is not large rough to examine into every governmental unit to detect organiza