APRIL 7 (legislative day, MARCH 18). 1949.—Ordered to be printed Mr. MCCLELLAN, from the Committee on Expenditures in the Executive Departments, submitted the following REPORT [To accompany S. 526] The Committee on Expenditures in the Executive Departments, to whom was referred the bill (S. 526) to provide for the reorganization of Government agencies, and for other purposes, having considered the same, report favorably thereon, with amendments, and recommend that the bill do pass. PURPOSE This legislation is proposed in order to carry on an established policy of Congress, in delegating to the President authority to reorganize the executive branch of the Government. Such authorization was originally granted in the Economy Act of June 30, 1932. This act was amended and superseded by the act of March 3, 1933, as amended by the act of March 20, 1933, granting reorganization authority to the President for a period of 2 years. The Reorganization Act of 1939 was also approved for a 2-year period, and expired in January 1941. Temporary wartime authority for emergency reorganizations was delegated under title I of the First War Powers Act of December 18, 1941, for the duration of the war and 6 months. The Reorganization Act of 1945, which expired on April 1, 1948, continued the prewar policy after its utilization had clearly established its advantages and effectiveness over normal legislative processes in the expedition of action on reorganizations within the executive branch. President Hoover initiated 11 plans under the authority of the act of 1932, all of which were defeated through veto action in the House of Representatives, due to the impending change in administration. Under the 1933 act reorganizations were effected in agricultural credit, procurement, disbursement, national park, immigration, internal revenue, and various other functions. President Roosevelt submitted five plans under the act of 1939, involving the creation of the Federal Security Agency, the Federal Works Agency, and the Federal Loan Agency, all of which were permitted to become law. Under this act the Executive Office of the President was also established. Temporary changes effected under the War Powers Act, although extensive in some areas, were required to be made permanent under direct legislative action, or through permanent authority granted under the act of 1945. Under this latter act, President Truman submitted seven plans, three of which were disapproved by concurrent resolutions. of both Houses of Congress. Sections of these were approved by other plans submitted subsequently, to overcome objections raised under the original plans. The Congress, recognizing the urgent need for reorganization of the Federal Government, created a bipartisan Commission on Organization of the Executive Branch of the Government (Public Law 162, 80th Cong.) on July 7, 1947, composed of 12 members to be appointed from the Congress, from the executive branch of the Government, and from private life, to investigate and to report on the present organization and methods of operation of all executive departments and establishments, with recommendations for necessary reorganizations. The Commission was required to submit its report within 70 days after the convening of the Eighty-first Congress. Its work has now been completed and 18 separate reports have been submitted to the Congress, in conformity with this act, which reports are now pending before the Committee on Expenditures in the Executive Departments. NEED FOR REORGANIZATION LEGISLATION On January 13, 1949, the Honorable Herbert Hoover, Chairman of the Commission on Organization of the Executive Branch of the Government, submitted the following letter to the President pro Tempore of the Senate (H. Doc. 37): COMMISSION ON ORGANIZATION OF THE The Honorable KENNETH MCKELLAR, MY DEAR MR. PRESIDENT: The necessity for reorganization of the executive branch of the Government was clearly recognized by the Congress when it created this Commission in July 1947, with the full approval of the President. Congress assigned the Commission the duty of examination and recommendation under the following statement from the act creating the Commission: effi "It is hereby declared to be the policy of Congress to promote economy, ciency, and improved service in the transaction of the public business in the departments, bureaus, agencies, boards, commissions, offices, independent establishments, and instrumentalities of the executive branch of the Government by "(1) limiting expenditures to the lowest amount consistent with the efficient performance of essential services, activities, and functions; "(2) eliminating duplication and overlapping of services, activities, and functions; "(3) consolidating services, activities, and functions of a similar nature; "(4) abolishing services, activities, and functions not necessary to the efficient conduct of government; and "(5) defining and limiting executive functions, services, and activities." This concern of Congress for economy and efficiency reflects the overwhelming interest of every thoughtful citizen and taxpayer in the land. The writing and adoption of the Federal Constitution proved that a republic could deliberately analyze its political institutions and redesign its government to meet the demands of the future. The broad pattern that America then selected is sound. Today we must deal with the infinitely more complicated government of the twentieth century. In doing so, we must reorganize the executive branch to give it the simplicity of structure, the unity of purpose, and the clear line of executive authority that was originally intended under the Constitution. As a result of depression, war, new needs for defense, and our greater responsibilities in the foreign field, the Federal Government has become the most gigantic business on earth. In less than 20 years the number of its civil employees has risen from 570,000 to over 2,100,000. The number of bureaus, sections, services, and units has increased fourfold to over 1,800. Annual expenditures have increased from about $3,600,000,000 to over $42,000,000,000. The national debt per average family has increased from about $500 to about $7,500. Such rapid growth could not take place without causing serious problems. Organizational methods, effective 20 years ago, are no longer applicable. The growth of skills and methods in private organization has long since outmoded many of the methods of the Government. This Commission has found that the United States is paying heavily for a lack of order, a lack of clear lines of authority and responsibility, and a lack of effective organization in the executive branch. It has found that great improvements can be made in the effectiveness with which the Government can serve the people if its organization and administration is overhauled. This Commission has been engaged in its task for the last 16 months and is reaching its conclusions only after the most painstaking research. We decided at an early date that we must have the aid of leading and experienced citizens to assist us in making findings of fact and recommendation of remedies. The Commission, therefore, divided its work into functional and departmental segments; it created 24 "task forces" with authority to engage such research aid as they might require. About 300 outstanding men and women, expert and experienced in the fields to which they were assigned, have now submitted to us their findings and recommendations. Thanks are due them. They brought great talent and diligence to their work. Their findings will be found useful by the Congress and the executive branch in solution of the problems considered. Some of the recommendations contained in the volumes of our report which we plan to file from time to time between now and the expiration of the life of the Commission, can be put into effect only by legislation. Others can be accomplished by executive action. But many of the most important can probably be accomplished only if the Congress reenacts and broadens the power to initiate reorganization plans which it had previously granted to the President under an act which expired on March 31, 1948. The Commission recommends that such authority should be given to the President and that the power of the President to prepare and transmit plans of reorganization to the Congress should not be restricted by limitations or exemptions. Once the limiting and exempting process is begun it will end the possibility of achieving really substantial results. But, in saying this, the Commission should not be understood as giving sweeping endorsement to any and all reorganization plans. It does believe that the safeguard against unwise reorganization plans lies both in a sound exercise of the President's discretion and in the reserved power in the Congress by concurrent resolution to disapprove any proposed plan. Limitations or exemptions upon this power to reorganize should not be imposed other than that of congressional disapproval. They have arisen in the past chiefly in connection with the regulatory commissions. In one of its reports the Commission will discuss these regulatory commissions in detail. It will point out in each case those regulatory functions which it is believed should continue to be performed independently. The Commission will also point out certain other functions which are of a different nature and which can be more efficiently and economically performed by purely executive officials. The inclusion in a reorganization act of provisions exempting certain agencies from its terms would prevent changes which are in accord with established principles in this field and which in no way impair the maintenance of independence and impartiality in the exercise of the great regulatory functions. Similarly, the inclusion of general language, like that contained in section 5 (a) (6) of the Reorganization Act of 1945,1 intended to prevent the submission of any "SEC. 5. (a) No reorganization plan shall provide for, and no reorganization under this Act shall have the effect of(6) imposing, in connection with the exercise of any quasi-judicial or quasi-legislative function possessed by an independent agency, any greater limitation upon the exercise of independent judgment and discretion, to the full extent authorized by law, in the carrying out of such function, than existed with respect to the exercise of such function by the agency in which it was vested prior to the taking effect of such reorganization; except that this prohibition shall not prevent the abolition of any such fune tion; plan which imposes limitations upon the independent exercise of "quasi legislative" or "quasi judicial" functions, would, in the Commission's judgment, be unwise. The phrases are extremely vague and of uncertain meaning. Ingenious and plausible arguments can be made to apply them to a wide range of functions which should clearly be subject to reorganization procedure. Such arguments would not be matters of purely theoretical concern or legislative debates, for the validity of reorganization could be made the subject of protracted litigation by private interests resisting the acts of a reorganized agency on the ground that it was illegally constituted. It might take several years of litigation to lay down interpretations of these general phrases and even then, uncertainty would remain. The Commission, in accordance with the act of Congress creating it, as amended, will file its report in a series of parts or volumes, the last of which will be delivered within 70 days of the organization of the Eighty-first Congress. These reports will contain its findings and recommendations. They will begin with the top organization and structure of the executive branch and proceed through the services which are common to the whole executive branch to the reorganizations recommended for particular agencies and groups of agencies. Yours faithfully, HERBERT HOOVER, Chairman. On January 17, 1949, the President of the United States submitted the following message to the Congress (H. Doc. 42): To the Congress of the United States: In my recent messages to the Congress I have presented the program which I believe this Government should follow in the months ahead. The magnitude and importance of that program, both at home and abroad, require able leadership and sound management. The Government must have the most effective administrative machinery to carry out its vast responsibilities. The Congress has recognized these needs by the establishment of the Commission on the Organization of the Executive Branch of the Government. The recommendations of the Commission, which are soon to be reported to the Congress, may be expected to contribute significantly to our ability to meet the problem before us. To carry out those recommendations and to accomplish other improvements in the Government's complex operations will, however, require further and more detailed steps. Improving the management of the public's business calls for continuing efforts by the Congress, the President, and all agencies of Government. Throughout my administration I have taken action to effect improvements in the organization and operation of the Government. In 1945 I asked the Congress to enact legislation authorizing permanent changes in administrative structure by the reorganization plan procedure. Under the authority granted by the Reorganization Act of 1945, numerous reorganizations were made which contributed to the efficiency of the Government and its transition from war to peace. The establishment of the permanent Housing and Home Finance Agency was an outstanding example of the improvements thus achieved. I also recommended,, and the Congress enacted, a major improvement in the organization of our armed forces by the creation of the National Military Establishment. On matters not requiring legislation I have made program adjustments designed to increase the effectiveness of governmental operations. It is my firm intention to continue to require, throughout the executive branch, the highest degree of attention to this need for improved management. I expect each department and agency head to consider this a major part of his responsibility. It is essential that they be given the tools for effective management of their agencies. Further, I believe that every official and employee of the Government should feel a personal responsibility for improving the way in which his work is performed. Increased efficiency and economy in the Government's far-flung activities can be realized only if certain essentials of organization and operation are satisfied. These essentials are not confined to Government. They have proven their effectiveness in the successful operation of large-scale enterprise, both public and private. They are matters on which it is easy to agree in principle but which are often violated in practice. There must be, first of all, a clear definition of the objectives of public programs. Second, organizational arrangements must be established which are consistent with those objectives and designed to produce responsible and effective administration. Third, qualified personnel must be obtained to administer the programs. Fourth, the methods by which operations are conducted must be constantly reviewed and improved. Fifth, there must be provision for thoroughgoing review and evaluation of operations, by the President and the Congress, to assure that the objectives are being attained. These conditions can be achieved only through teamwork by the President and the Congress in carrying out their respective responsibilities under the Constitution for conducting the affairs of Government. I have already recommended to the Congress two measures which will help us obtain better government. The enactment of legislation to increase the compensation of the heads and assistant heads of departments and agencies and to revise the Classification Act will greatly assist the Government in securing and holding the services of the best-qualified men and women. The appropriation to the President of a special fund of $1,000,000 for management improvement will yield major contributions to the better operation of the Government. It will be used in part for the development and installation of recommendations coming from the Commission on Organization of the Executive Branch and, in part, for the preliminary expenses incident to the appraisal and trial of other suggested improvements. This fund will in no sense be a substitute for the present day-to-day efforts by all Government agencies to improve the conduct of their operations. In addition to these steps, I am now recommending that the Congress enact legislation to restore permanently the reorganiza.ion procedure temporarily provided by the Reorganization Acts of 1939 and 1945. This procedure is the method of executive-legislative cooperation whereby a reorganization plan submitted to the Congress by the President becomes effective in 60 days unless rejected by both Houses of Congress. In a letter to the President of the Senate and the Speaker of the House of Representatives, the Commission on the Organization of the Executive Branch of the Government has pointed out the need for such a method of reorganization in dealing with many of the changes which it will recommend. I fully agree with the Commission on the necessity of reviving the reorganization-plan procedure, which became inoperative on April 1, 1948. In recommending the enactment of a new reorganization measure, I wish to emphasize three things. First, the reorganization legislation should be permanent rather than temporary. While the work of the Commission on the Organization of the Executive Branch of the Government makes such legislation especially timely and essential, the improvement of the organization of the Government is a continuing and never-ending process. Government is a dynamic institution. Its administrative structure cannot be static. As new programs are established and old programs change in character and scope to meet the needs of the Nation, the organization of the executive branch must be adjusted to fit its changing tasks. The impracticability of solving many problems of organization by the regular legislative process has been frankly recognized for many years by congressional leaders. In many cases, changes which are essential cannot attract the necessary legislative attention in competition with the many other matters pressing for congressional action. On the other hand, the reorganization plan affords a method by which action can be initiated and the proposal considered with a minimum consumption of legislative time. The reorganization-plan procedure is a tested and proven means of dealing with organization problems. Twice within the last 10 years the Congress has authorized this method of reorganization for short periods. Under each of those authorizations many changes were made which added to the efficiency of the executive branch and tended to simplify its administration. The advances made during the brief life of the Reorganization Acts of 1939 and 1945 clearly indicate the desirability of permanent reorganization legislation. Second, the new reorganization act should be comprehensive in scope; no agency or function of the executive branch should be exempted from its operation. Such exemptions prevent the President and the Congress from deriving the full benefit of the reorganization-plan procedure, primarily by precluding action on major organizational problems. A seemingly limited exemption may in fact render an entire needed reorganization affecting numerous agencies and functions wholly impractical. The proper protection against the possibility of unwise reorganization lies, not in the statutory exemption from the reorganization-plan procedure, but in the authority of Congress to reject any such plan by simple majority vote of both Houses. Finally, let me urge early enactment. Under the reorganization procedure, reorganization plans must lie before the Congress for 60 calendar days of continuous session in order to become effective. Unless the necessary legislation is |