collection will be reduced below the current level, with revenue losses exceeding many fold the budget cut savings. SECRET SERVICE For the Secret Service, the apparently very substantial increase requested for 1971-$12 million and 746 average positions of employment-is caused in large part by the need to fund for full-year operation of the Executive protective service. This service, thus far, has been funded only for the closing months of fiscal year 1970. The net increase required for this and to otherwise maintain 1970 levels of staffing and activity amounts to $6.4 million and 497 average positions of employment. Program increases of $5.6 million and 249 average positions of employment made the balance of the $12 million. The program increases would provide for strengthening the protective and investigative capability of the Service in the face of mounting work loads and social unrest. Additionally, it is essential to recruit and bring into training the second increment of 126 men who must protect the candidates and nominees in the 1972 presidential campaign. For the Secret Service and other agents assigned, the 1968 campaign was a nightmare of long hours and fatigue. Staff augmentation and training must be done before the campaign is underway. The House bill allows the funds to place the Executive protective service on a full-year basis and to maintain the current levels of employment and activity. However, it provides only $1 million and 53 positions for program increases. We will be unable to meet workload or to recruit and train the second increment for candidate protection unless the reduction is restored. OFFICE OF THE SECRETARY As the Secretary told you in his letter, we would like to forego appeal of the House reduction in the Office of the Secretary, but we cannot. The pressures on our staff for analysis and assistance in the many areas of tax and fiscal policy, domestic and international financial policy coordination, tax and other legislation, the equal employment opportunity program, and management of the Department make staff increases mandatory. We have transferred the administration of the Treasury Law Enforcement School to the new Consolidated Law Enforcement Training Center. The House committee has assessed a 10-percent cut against the operating funds of the new center. This is a small amount but important to the quality of training. We would appreciate its restora tion. The bureau witnesses concerned are prepared to testify on the need to amend certain appropriation language changes which were made by the House. These affected the Internal Revenue Service, the Bureau of Customs, and the Secret Service. They related to police-type vehicles in all three bureaus and to temporary employment in the IRS. This concludes my statement. We will be glad to answer any questions you may have. STATEMENT BEFORE HOUSE COMMITTEE Senator YARBOROUGH. Your prepared statement will be inserted in the record at this point. (The statement follows:) Prepared Statement Before House Committee Mr. Chairman and Members of the Subcommittee, I am pleased to appear before you for the second year to present the appropriation requests for the Department of the Treasury. These requests are the product of a thorough analysis of the estimates of the resource needs of the Treasury to carry out its missions effectively in fiscal 1971. They reflect the rising workloads and added responsibilities of the Department as well as the increasing personal service and other costs. They represent net cost increases since we have provided offsets for costs of the current year which will not recur in 1971 and for savings from our efforts to improve management. 1971 Requests Treasury budget requests for 1971 departmental operations total $1,252,551,000, an increase of $85,584,000 over the 1970 authorized level. Added workload accounts for $47 million of this increase; rental and purchase of capital and equipment items (and these are related to workload) require $15 million; expanded activities, principally in Customs' ADP Intelligence Network and automation of merchandise processing, require $2 million; maintenance of current staff levels requires $43 million and reductions and savings offset these increases by $21 million. A summary analysis of these increases appears on page 2 of the Departmental Summaries in the justifications before you and the items will be presented in detail as hearings proceed with the bureaus. The 1970 authorized level with which we compare the 1971 requests is the 1970 appropriation increased by proposed supplemental appropriations for pay and program requirements. I have for the record a table (page 9) showing the derivation of the "proposed authorized level for 1970." You will recall similar comparisons made over the past several years. Also, I have a table (page 10) which shows the 1971 request for each appropriation account compared with the 1970 authorized level, and a third table (page 11) which shows manpower requirements. Treasury Budget Reflects the President's Priorities This Treasury budget request reflects the priorities and objectives of the President's Budget Message. In outlining purposes to be accomplished, the President listed "Help restore economic stability by holding down spending to provide another budget surplus and to relieve pressure on prices and to achieve that surplus without income or excise tax increases." Treasury is cooperating, first, by limiting its own request for funds, and second, by applying 70 percent of its requested budget increases to meet the rising workload in tax and customs administration and to help improve the administration of revenue and customs laws. You will recall that last year I expressed to you the belief that we must give appropriate priority to the funding needed to keep our revenue collecting systems operating fairly and efficiently. I continue to hold to this view. I want to call your attention to the cumulative effects on Internal Revenue Service performance to which several years of employment and expenditure restrictions appear to have contributed. This year your help is requested to provide funds that will reverse the trend of deterioration in tax administration. The need for the increased staffing has been carefully reviewed by the Department and the President. Internal Revenue Service has demonstrated the ability to recruit, train and assimilate the number of new employees requested. The Service's job is tremendous. Ten years ago 94 million returns were filed and gross revenue collections were $91.8 billion. In 1970 we expect 113 million returns and $200 billion. Substantially larger revenues flow from better tax administration and all citizens benefit from the fairer sharing of the burden. The workload of processing cargoes entering the country continues to grow phenomenally. Although recent emphasis has been on Customs' activities against smuggling, attention must be given to this other basic area of activity cargo handling. The value of imports is rising at a rate of over 9 percent in fiscal year 1970. Customs collections were almost $3.3 billion in 1969 - 12 percent over 1968 and the rise is continuing. We are asking for additional funding to improve Customs processing of imports and collection of proper duties. The President has stated his purpose to "provide major advances in our programs to reduce crime." Here the Treasury has a major role, in close cooperation with the Department of Justice. The President's message spoke of increasing strike forces against organized crime to 20 in 1971. Treasury revenue agents, Customs and Secret Service agents, Alcohol, Tobacco and Firearms investigators are now and will be members of these strike forces. The President spoke of an enlarged and more vigorous effort to control the traffic in narcotics and dangerous drugs. The recently enacted 1970 supplemental appropriation strengthened the Bureau of Customs for antinarcotics smuggling enforcement by adding 915 positions and $8,750,000. This strengthened effort has been carried into the 1971 budget on a full-year basis. In addition, in his Budget Message the President alluded to the development and testing of more effective methods for controlling and preventing crime. In the area of Presidential and other executive protection, the Secret Service is advancing in the scientific classification and identi-fication of potential risks and in an extensive communications network linking headquarters and field offices and the offices of other enforcement agencies. The Bureau of Customs is developing an intelligence network to aid in identifying wanted persons. Much progress has been made in coordinating with state and Federal law enforcement agencies. The Department of the Treasury, as you know, has been assigned as lead agency for the interagency "Federal Law Enforcement Training Center" planned to provide law enforcement training for all agencies of the Federal Government, other than the FBI, and state and local agencies as the need arises. The 1971 budget moves from the Office of the Secretary to the new Center the training of Treasury agents. It also requests funds for the costs of the special training building to support the firing range, and the education building as the first phase of constructing and equipping the new Center. The Supplemental Appropriation for 1970 has funded the Secret Service for the maintenance of the new Executive Protective Service. In addition to the protective duties performed by the White House Police, the new |