the man who held that office. I want to make that clear to you, and I felt that it was perhaps as Senator Griffin suggested, maybe under the Constitution as read to you by Senator Ervin, that office that you hold is so important that it should be automatically a constitutional office without amendment to the law subject to confirmation.

Mr. Chairman, I want to put into the record a quotation from the Office of Management and Budget Manual, section 200, which outlines the responsibilities of the Office of Management and Budget.

Senator CHILES. Without objection, it will be included in the record. (The item referred to follows:)

APPENDIX II

SECTION 200-RESPONSIBILITIES OF THE OFFICE OF MANAGEMENT AND BUDGET 200-1. Establishment.

The Office of Management and Budget was established in the Executive Office of the President by Reorganization Plan No. 2 of 1970, 35 F.R. 7959, which became effective July 1, 1970. The Plan designated the Bureau of the Budget as the Office of Management and Budget and transferred to the President all functions vested by law in the Bureau of the Budget and Director of the Bureau of the Budget. By Executive Order No. 11541 of July 1, 1970, the functions thus vested in the President were delegated to the Director of the Office of Management and Budget. That Order also continued in effect all outstanding delegations, rules, regulations, and other forms of Executive or administrative action issued or taken by or relating to the Bureau of the Budget prior to the effective date of the Reorganization Plan.

200-2. Pertinent statutes.

The following statutory provisions pertain to the Office and its principal functions:

a. Reorganization Plan No. 2 of 1970, 35 F.R. 7959, which established the Office of Management and Budget in the Executive Office of the President.

b. Budget and Accounting Act, 1921 (31 U.S.C. 1-24), which provides for the preparation of the annual budget and any supplemental or deficiency estimates, and for the conduct of administrative studies to enable the President to achieve greater economy and efficiency in the executive branch.

c. Reorganization Plan I of 1939 (53 Stat. 1423), which made the Bureau of the Budget a part of the Executive Office of the President and transferred to it the functions of the Central Statistical Board and the Central Statistical Committee.

d. Government Corporation Control Act of 1945 (31 U.S.C. 847-849, 852), which extends the executive budgetary functions to wholly owned Government corporations.

e. Budget and Accounting Procedures Act of 1950 (64 Stat. 832), which amplifies the Budget and Accounting Act by clarifying responsibilities, especially in the fields of administrative analysis and integration of statistical work, and by providing for a continuous program for the improvement of accounting and financial reporting throughout the Government.

f. Section 3679 of the Revised Status, as amended (31 U.S.C. 665), which prescribes procedures by which the Director apportions appropriations, provides for agency systems of administrative control of funds to be approved by him, and authorizes him to establish reserves in appropriations and funds.

g. Act of August 1, 1956 (70 Stat. 782), which amended the Budget and Accounting Act and the Budget and Accounting Procedures Act, mainly to make further improvements in governmental budgeting and accounting methods and procedures.

h. Act of October 30, 1965 (40 U.S.C. 759), which deals with automatic data processing equipment, and under which guidelines and information are provided for the management of automatic data processing activities in the Federal Government.

i. Section 204 of the Demonstration Cities and Metropolitan Development Act of 1966 (42 U.S.C. 3334), under which rules and regulations are prescribed for the coordination of Federal aids in metropolitan areas.

j. Intergovernmental Cooperation Act of 1968 (42 U.S.C. 4201-4244), and the President's memorandum on November 8, 1968, delegating certain authority under that Act (33 F.R. 16487), which require the issuance of rules and regulations with regard to (1) improved administration of grants-in-aid to the States; (2) special or technical services to State and local units of government; and (3) the formulation, evaluation, and review of Federal programs and projects having a significant impact on area community development.

k. Section 102 of the District of Columbia Revenue Act of 1970 (P.L. 91-650) which requires the Office to examine and review District of Columbia appropriations to determine priorities of expenditures and where reductions can be made.

1. Section 3(c) of the Federal Pay Comparability Act of 1970 (P.L. 91-656), which designated the Director and the Chairman of the Civil Service Commission as the President's agents for the 1971 and 1972 adjustments under subchapter I of that Act.

m. Sections 201 and 202 of the Legislative Reorganization Act of 1970 (31 U.S.C. 1151-1153), which assigns to the OMB and others the responsibility for developing and maintaining a standardized information and data processing system for budgetary and fiscal data together with a set of standard classifications for Federal programs, activities, receipts, and expenditures that will serve both the Congress and the executive branch.

n. 5 U.S.C. 305, which requires the issuance and administration of regulations under which each agency makes systematic reviews of its operations on a continuing basis.

o. 5 U.S.C. 4112, which requires the issuance of regulations with regard to Government employee training programs, concerning the absorption of costs thereof.

p. 44 U.S.C. 1108, which requires approval of the use of appropriated funds for the printing of periodicals.

g. 44 U.S.C. 3501-3511 (the Federal Reports Act), which requires coordination of Federal reporting and statistical services in order to eliminate duplication, reduce costs, and minimize the burden on the public of furnishing information to Federal agencies.

200-3. General statement of primary functions.

The Office of Management and Budget is charged with a basic responsibility for assisting the President in the development and effective management of Federal programs. Within this framework, the primary functions of the Office of Management and Budget are as follows:

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 keep the President informed of the progress of activities in agencies of the Government with respect to programs proposed and undertaken.

d. To develop improved budgetary, accounting, and other financial management practices for the executive branch.

e. To develop more effective techniques for the evaluation of the impact of governmental programs and the adequacy of governmental services.

f. To devise programs for more effective development and utilization of career executive talent in the Federal service.

g. To formulate and coordinate programs for the improvement of the management and organization of the executive branch of the Government.

h. To plan and promote the improvement, development, and coordination of Federal statistical services and management information systems.

i. 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.

j. To aid the President in achievement of more efficient and economical conduct of governmental programs through identification of outmoded programs and reduction of duplicate effort.

k. To assist in the consideration and clearance and, where necessary, in the preparation of proposed Executive orders and proclamations.

200-4. Related Executive orders.

Principal Executive orders relating to the Office are:

a. Executive Order No. 8248 of September 8, 1939 (4 F.R. 3864), which specified the functions of the Bureau of the Budget in the Executive Office of the President (see Section 200-3).

b. Executive Order No. 9094 of March 10, 1942 (7 F.R. 1972), which provides for coordination and planning of Federal mapping and chart-making activities. c. Executive Order No. 93884 of October 4, 1943 (8 F.R. 13782), which provides for review of Federal public works and improvement projects.

d. Executive Order No. 10033 of February 8, 1949 (14 F.R. 561), which requires approval for responses by Federal agencies to statistical inquiries from inter-governmental organizations.

e. Executive Order No. 10253 of June 11, 1951 (16 F.R. 5605), which provides specific authority for development of programs and issuance of regulations for the improvement of Federal statistical activities.

f. Executive Order No. 10579 of November 30, 1954 (19 F.R. 7925), which provides for decisions on appeal by an agency from any determination by the Administrator of General Services with respect to the establishment of an interagency motor vehicle pool or system.

g. Executive Order No. 10900 of January 5, 1961 (26 F.R. 143), as amended by Executive Order No. 11036 of July 11, 1962 (27 F.R. 6653), which delegates a part of the President's authority to fix amounts of foreign currencies to be used for various purposes and to waive certain statutory requirements.

h. Executive Order No. 11030 of June 19, 1962 (27 F.R. 5847), as amended by Executive Order No. 11354 of July 1, 1967 (32 F.R. 7695), which provides for clearance for the President of Executive orders and proclamations (see Section 200-3k).

i. Executive Order No. 11060 of November 7, 1962 (27 F.R. 10925), which requires establishment of rates for hospital care and treatment furnished by the United States for use in connection with recovery from tortiously liable third persons.

j. Executive Order No. 11073 of January 2, 1963 (28 F.R. 203), which requires the Director and the Chairman of the Civil Service Commission to submit annually to the President certain reports relating to Federal pay rates pursuant to 5 U.S.C. 5302.

k. Executive Order No. 11466 of April 18, 1969 (34 F.R. 6727), which authorizes the designation of projects for joint funding under section 612 of the Economic Opportunity Act of 1964, as amended (42 U.S.C. 2962) and section 406 of the Juvenile Delinquency Prevention and Control Act of 1968 (42 U.S.C. 3886) and to designate or provide criteria for the designation of one Federal agency to act for all participating agencies in administering any such jointly funded projects. 1. Executive Order No. 11541 of July 1, 1970 (35 F.R. 10737), which delegates to the Director of the Office of Management and Budget the functions transferred to the President by Reorganization Plan No. 2 of 1970.

m. Executive Order No. 11592 of May 6, 1971 (36 F.R. 8855), which delegates to the Director the functions of granting certain approvals under provisions of the River and Harbor Act of 1970 and the Flood Control Act of 1970.

n. Executive Order N. 11609 of July 22, 1971 (36 F.R. 13747), which delegates to the Director of the Office of Management and Budget the exercise of statutory authorities of the President involving (1) regulatory functions with respect to quarters and facilities, (2) transfers of balances of appropriations, (3) interagency land transfers, land acquisitions, contracts for land acquisitions, and other lands transactions, and (4) allocation of funds for management improvement. 200-5. Organizations.

The Office consists of the Office of the Director and the following divisions, the organization and functions of which are set forth in subsequent Sections: a. Divisions

(1) Organization and Management Systems.

(2) Program Coordination.

(3) Executive Development and Labor Relations.

(4) Statistical Policy.

(5) Management Information and Computer Systems. (6) Legislative Reference.

(7) Budget Review.

(8) Evaluation.

(9) Economics, Science, and Technology Programs.

(10) General Government Programs.

(11) Human Resources Programs.

(12) International Programs.

(13) National Security Programs.

(14) Natural Resources Programs.

An organization chart is provided in Exhibit A.

Senator METCALF. Section 200-2 talks about the pertinent statutes that the Office of Management and Budget has to consider then it goes on into the Executive orders that are considered and so forth.

In my speech on the Senate floor, Mr. Director, I suggested that this whole question could be gone into and you were more than an adviser to the President and you did exercise statutory duties and advised him on legislative matters and so forth. So in view of the interrogation that Senator Percy made, I do want this in to clarify that issue.

Now, I know that you have only held this office, Mr. Ash, for a little while, but I am curious on this impoundment procedure. Sometimes you eliminate a whole program, the REA was one. I cited another example. Congress enacted a program for regulation of flammable fabrics. OMB impounded the funds for that program and eliminated that act of Congress. Other times OMB partially funded programs and other times funded programs in their entirety.

Now, do you have guidelines down there at the Office of Management and Budget to determine whether or not a program is going to be eliminated completely or funded partially or funded in its entirety? Mr. Asu. There are no predetermined calculations of guidelines. Each program is looked at individually in the light of many considerations that have to be brought to bear

Senator METCALF. What are those considerations?

Mr. Asн. They are the ones that are set forth as the reasons given for-and there are 13 such reasons given for the report submitted here on February 5, 13 different reasons that one or more of which was the basis for those reserves set forth in that report. So there were many different reasons.

Senator METCALF. I can't find anything in there that would say whether you were justified in eliminating the program or not, or are you justified in saying that because we want to carry out some of these authorities that you have, we will fund it in its entirety and eliminate another one.

Mr. Asн. Well, these reasons would pertain to each and every one of the items

Senator METCALF. That is the only criteria you have?

Mr. Asи. There are 13 very good and useful and valid criteria. Senator METCALF. That is your opinion. In my opinion they are not relevant at all to the question I am asking, which is, "What guidelines do you have that will eliminate REA?" Will you say that the Hill-Burton Act has done such a good job that we will eliminate it. but another program is so inefficient that we will eliminate it?

Mr. Asu. I think the considerations might be likened to those that the Congress gives to many matters before it. At some point it comes down to judgment. We each and all try to exercise our best possible judgment.

Senator METCALF. We exercise program judgment on establishment and creation of programs after the legislative committees have exercised their judgment that such programs should be included. And then the Appropriations Committee and the Congress exercised its judg ment and say so much money should be appropriated for this program, or in our opinion this is not in the best interests of the United States and, therefore, we will not develop a water resource program.

Another time we will only appropriate half as much money as reflected for some other program.

Mr. ASH. That is a very classic reason. In our opinion this is not in the best interest of the United States as supported by these 13 specific reasons why not?

Senator METCALF. Let me read from Mr. Butz' statement-"It is not easy for me."-that is Mr. Butz-"and it is not easy for the Department of Agriculture when the President decides we are going to hold the expenditures at $250 billion, at that point everybody goes to work and naturally there are some trade offs."

Now, what kind of trade offs? What is the basis for that trade off in the Department of Agriculture? He isn't in as good a trade off position as is the Secretary of Commerce, for example.

Mr. Asн. I think it is very simple to state here that because of the need to conform with the law not to spend $261 billion but $250 billion, choices had to be made between good programs and bad programs, in some cases between good ones and better ones.

What is in the best interests of the United States?

Senator METCALF. Very well. How do you determine what is in the best interests of the United States? Now, I have to answer to my constituents as to how I vote on the determination as to the best interests of the United States, and I tell them that I feel a medical program is in the best interests but a war in Vietnam is not in the best interests. That is how I have to go home and say these are decisions that I have made.

How do you make your decisions?

Mr. ASH. Somewhat similar to that.

Senator METCALF. You make these trade offs?

Mr. АSH. The President in addition to concerning himself with a particular State or even a district in it is judging the programs in terms of their overall best interest relative to other programs for their overall best interests.

Senator METCALF. No: let's not say overall, because you have got to have proportionate funds.

Mr. Ash. Let's take REA. As an example, REA was a program that served considerable good and valid and useful purposes in earlier years. At this time only 19 percent of the REA electrical hookups are for farms, 81 percent of the hookups under the REA program do not go more to farmers or rural areas, but instead go to nonfarm rural residents, sometimes even to industrial locations. The conclusion on that one was that the heavily subsidized loans that go out under REA were not serving the best interests of the United States in the aggregate. I am sure I could make a case and you could make a case where it is serving a particular purpose, but it will be hard to make a case for all of them.

Senator METCALF. You will have a hard time making a case for that farmer on REA out there waiting for a long time to get electricity. Two percent of the people don't have REA. And you don't think we should have this program and you arbitrarily say to those 2 percent who don't have inside funds, who don't have the benefits of the society. we will eliminate that program but continue a program in some other

areas.