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the new ones it seems reasonable that, Mr. Chairman, we demand that they prove their case to the Director of the Budget, or to some other official in the Government.

Mr. BRYLAWSKI. I certainly agree with that, Mr. Osmers.
Mr. OSMERS. I have nothing further.
The CHAIRMAN. That is all.
Mr. BRYLAWSKI. Thank you, sir.

Mr. WARD. Is there anyone else in the room who wants to make a statement?

(No response.) Mr. WARD. There are no other witnesses. The CHAIRMAN. We will adjourn until Monday morning at 10 a. m.

(Whereupon, at 11:20 a. m., the committee adjourned until 10 a. m., Monday, July 19, 1954, in room 1301, New House Office Building, the regular hearing room of the Committee on Banking and Currency of the House of Representatives.)

GOVERNMENT IN BUSINESS
(H. R. 8832, H. R. 9834, H. R. 9835, and H. R. 9890)

MONDAY, JULY 19, 1954

HOUSE OF REPRESENTATIVES,
COMMITTEE ON GOVERNMENT OPERATIONS,

Washington, D. C. The committee met at 10 o'clock a. m., Hon. Clare E. Hoffman (chairman) presiding.

The CHAIRMAN. The committee will come to order. Our first witness is Mr. Percival F. Brundage, Deputy Director of the Bureau of the Budget.

STATEMENT OF PERCIVAL F. BRUNDAGE, DEPUTY DIRECTOR,

BUREAU OF THE BUDGET Mr. BRUNDAGE. The four bills now before your committee, H. R. 8832, H. R. 9834, H. R. 9835, and H. R. 9890, all have the same general purpose: to terminate or limit those activities of the Federal Government which are conducted in competition with private enterprise. The Bureau of the Budget fully supports this objective.

President Eisenhower stated during the campaign: To bring Government closer to the people we will set up these principles and adhere to them: That no Federal project, large or small, will be undertaken which the people can effectively do or be helped to do for themselves; that no Federal project will be undertaken which private enterprise can effectively undertake ***

In accordance with the principles established by the President, the executive branch has already initiated a program to reduce or terminate, wherever compatible with the national interest, Government competition with private enterprise. The Business and Defense Seryices Administration of the Department of Commerce is examining specific complaints of Government competition, and, where the facts warrant it, discussing with the agency concerned the ways and means of eliminating or reducing such competition. The Department of Defense has issued a directive calling for an analysis and justification for the continuance of commercial-industrial facilities operated by the military establishments. Certain of these facilities have already been discontinued.

There is also a study underway by the Hoover Commission in this direction.

The Bureau of the Budget is presently planning to ask the other agencies to make a similar review of commercial-industrial type facilities and report as to the action taken.

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Something has already been accomplished by the Bureau of the Budget through its ordinary budgetary policies. The bills before your committee represent four somewhat different approaches to the problem of Government competition. H. R. 8832 provides for the creation of a new independent agency, an AntiGovernment Competition Board consisting of the Secretary of Commerce as Chairman, the Secretary of the Treasury, the Comptroller General, and the Director of the Bureau of the Budget, or their dul designated deputies. The Board would have authority to consult and cooperate with officers of the Government to determine the practicability of limiting or terminating competition, and to make recommendations to the President concerning any proposals to establish new Government enterprises which would compete with private industry. H. R. 9834 requires the Director of the Bureau of the Budget to submit to the Congress in January of each year a list of all activities of the Government which compete with unsubsidized private enterprises and which can be terminated without seriously impairing Government activities which do not compete with unsubsidized rivate enterprise. The bill also establishes procedure to be followed |. the Senate and the House of Representatives with respect to termination bills. H. R. 9835 provides that the President shall examine, and from time to time reexamine, all Federal activities which compete with private enterprise and determine what the effect, if any, would be on essential Federal programs of the discontinuance of these activities. The President is authorized to terminate any commercial activity which can be carried on by private enterprise without substantially impairing essential activities of the Federal Government. II. R. 98.90 provides that the President shall issue instructions and regulations for the termination, limitation, or establishment of business-type operations of the Federal Government which are competitive with private enterprise. The bill assigns to the Secretary of Commerce the duty of receiving and acting upon complaints of Government competition, and requires the Director of the Bureau of the Budget to make specific recommendations to the President concerning proposals to establish new Government business-type operations. H. R. 8832 would add a new independent agency to the already excessive number of agencies reporting directly to the President. The Anti-Government Competition Board created by the bill would, to a considerable extent, overlap and duplicate work now being performed elsewhere in the executive branch. We believe that the executive branch already possesses adequate machinery to perform the functions assigned to the Board, and that the establishment of a new agency is unnecessary and undesirable. Consequently, the Bureau of the Budget does not favor enactment of H. R. 8832. H. R. 9834 is largely concerned with rules of procedure in the Senate and the House of Representatives. Section 1 of the bill, however, would impose a very heavy workload on the Bureau of the Budget by requiring it to submit to the Congress each year a list of all activities which compete with private enterprise and which can be terminated. It is doubtful that the thorough study and analysis required for the preparation of such an exhaustive list could be accomplished with the Bureau's present staff resources, particularly at the time of the greatest demand for the budgetary program.

There would be no objection, however, to the enactment of H. R. 9834 if a provision similar to section 4 of H. R. 9835, which would permit greater flexibility in scheduling and conducting the examination of each commercial activity, were substituted for the present language of section 1.

Section 4 of H. R. 9835 reads as follows:

The President shall examine and from time to time reexamine each commercial activity engaged in by each department, agency, and independent establishment in the executive branch of the Government and shall determine what the effect, if any, on these central activities of the Federal Government would be on terminating such commercial activity. As to H. R. 9835 and H. R. 9890, we believe that substantial progress is being made, and can continue to be made, toward the reduction and termination of Government competition under existing statutory authority. If it is the view of the Congress, however, that a declaration of congressional policy and new legislation would support, and strengthen these efforts, the Bureau of the Budget favors the approach taken in those bills. The CHAIRMAN. Mr. Osmers. Mr. Os MERs. Mr. Brundage, I would just like to make a few remarks before I ask any questions. As a result of the work of the Harden committee, and preceding committees, and the public hearings that have been held by the full committee for the last 3 days, we seem to have come up with something of a unanimous opinion among the members of this committee that needless Government competition with private enterprise should be ended. There is, as there always will be, and probably should be, some difference of opinion as to the exact methods that should be followed in connection with this. As you probably know, I am the author of H. R. 8832, and when I discussed that particular bill with Mr. Hughes over in his office a couple of weeks ago, I must say that he made a very good case for the contention which you put in your statement that we need not establish a new board within the Government to report to the President and that probably a better way of approaching the problem of the businessman can be found. Nearly all of the witnesses who have cared to express an opinion on this subject have urged that we establish within the executive branch some place where they could place their case for a hearing, and where the appropriate Government officials may also make reply if they care to do so. It has been suggested, and it is embodied in H. R. 9890, that that official, or that place be in the Department of Commerce, or the person would be the Secretary of Commerce and he would report to the President and then the President once a year would make a report to the Congress on the progress that had been made and what the state of the Union was with respect to the competitive activities. We would also place within the executive department some authority to review the new competitive activities, which authorization is contained in H. R. 9890, and that authority would be given to the Bureau of the Budget. I find absolutely nothing to disagree with in H. R. 9835, which is Mr. Hoffman's bill. I have felt all along that it would be helpful to the cause all around if we could make a few

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further steps—have the report provision and the review provision and the appeal location in the executive department. I hope, even though time is running out on us very rapidly, that Congress will be able to enact legislation that would meet all of these requirements and yet not place a burdensome set of provisions upon the executive department. I also want to say what I have said on other occasions during the hearings, that the administration so far has done an excellent job in this field, and I think particularly in the Department of Defense. There has been there a general facing up to this problem and an awareness of it, and a desire to end every needless type of operation. However, personnel changes and things happen, and I feel somehow that legislation should be tied into this. I realize, because we have dealt with it now for several years—the Harden subcommittee members at least—that we cannot write a definition on Capitol Hill that would be so clever that it would apply to every possible situation that might occur, so we are trying to reach out through these bills that have been suggested here to correct the condition and yet not place the executive in a straitjacket that would make it impossible for them to operate in a practical day-to-day way. Now, do you not feel, Mr. Brundage, that it would be helpful to the businessman of the country and to the industry associations and the trade associations and so on; that it would be advantageous all around for them to have some orderly procedure, some place to go, to establish their claims and complaints against what they too to be the Government competition? Mr. BRUNDAGE. I do very definitely, Mr. Osmers. Mr. OsmERs. Do you feel that it would be an onerous requirement to say to the Executive that he be required to report to Congress and to the people annually on this subject? Mr. BRUNDAGF. On the general progress, no, I do not. I think to require a specific detailed account of each one, at a specific time, might be onerous. I think the other is desirable. The CHAIRMAN. With reference to what you just said, you did make that objection to the provision to ask the Bureau of the Budget to make a report, did you not? Mr. BRUNDAGE. No. What I said was that the report called for in H. R. 8832, or 9834, would be required at the time of greatest pressure, and it would be a detailed report. I think the report on the progress of the general program would be a general report in such detail as the executive branch might desire, and I think that is all right. Mr. Os MERs. My major objective at this time in the 83d Congress, and considering the possible adjournment date, is to get something started. I feel that section 6 of H. R. 9890, page 4, is a simple sentence It says: The President shall make an annual report to the Congress concerning operations under this Act, together with such information, comments, and recommendations as he may deem appropriate for furthering the policy declared in section 2 of this Act. I believe that language is broad enough to give the President the latitude that he needs in making up the type of report that he wants. After receiving 1 or 2 of those reports, the Congress, if it should feel the reports were not expository and sufficient, could enact further legislation specifying further details. If the President found this

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