STATEMENT OF JAMES B. BURNS, NATIONAL PRESIDENT, AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, ACCOMPANIED BY CHARLES I. STENGLE, LEGISLATIVE REPRESENTATIVE, AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES

The CHAIRMAN. Mr. Burns, you may proceed.

Mr. BURNS. Mr. Chairman, I am James B. Burns, I am representing the American Federation of Government Employees, of which body I am the national president. With your permission, I would like to have Col. Charles I. Stengle sit beside me. He is our legal representative, and a former member of this body.

Mr. Chairman, I do not have a prepared statement, but I have some notes and I shall, with your indulgence, read from some excerpts from material which I have.

Mr. WHITTINGTON. Are you directing your remarks to all the plans? Mr. BURNS. I am in opposition to Reorganization Plan No. 2. Mr. WHITTINGTON. Do you object to the entire plan, or a part of it?

Mr. BURNS. Much of what I say, of course, may apply equally to plans 1 and 3, but I am simply referring to plan 2.

Mr. WHITTINGTON. What part of it?

Mr. BURNS. That portion which abolishes the Employees' Compensation Commission and transfers its functions to the Federal Security Agency.

May I ask you a question?

The CHAIRMAN. You may.

Mr. BURNS. Am I correct that there can be no amendment to the plan, that it must be voted up or down?

The CHAIRMAN. That is right.

Mr. BURNS. Therefore, my remarks must be direct in opposition

to plan No. 2.

Mr. RICH. What sections are you referring to?

The CHAIRMAN. It is page 7, section 3.

Mr. BURNS. As you gentlemen know, the United States Employees' Compensation Commission was created by statute in 1916 as a bypartisan independent Commission.

Mr. WHITTINGTON. What is the language in that regard?
Mr. BURNS. I will get it for you and hand it to you.

That does follow the pattern of similar legislation in many of the States.

Now the Commission exercises only one function, namely, the quasijudicial function of deciding workmen's compensation claims, and in 1927-that is 11 years after the act was passed which established the Commission-the Commission was given the administration of the Longshoreman's and Harbor Workers' Compensation Act. That act was later extended as the District of Columbia's workmen's compensation law in 1928, and in 1941 as the compensation law for employees of Government contractors who perform work outside of the United States.

The Commission administers workmen's compensation laws in two relatively broad classes of cases, one, where compensation is paid

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directly by the United States, as in the case of Federal employees, and two, where compensation is claimed by employees against their private employers or insurance carriers. In respect to the latter the Commission functions much like a judicial body. It is in effect a quasi-judicial body. Claims are filed within a certain time, notices thereof are given, and answers thereto filed by employers. In contested cases, issues must be framed, evidence taken at formal public hearings where counsel appear, following which decisions are written. in formal compensation orders which are appealable to the Federal courts. In the Federal employee cases the process is somewhat similar, the Commission determining, upon evidence, the substantive rights of claiming individuals, which involves receiving, weighing and resolving the evidence.

Now Plan No. 2, gentlemen, proposes to abolish this bipartisan Employees' Compensation Commission, which, as I state, was created 30

years ago.

Mr. WHITTINGTON. Who are the Republican and Democratic members of that Board?

Mr. BURNS. At the present time, Mrs. Jewell W. Swofford is the chairman.

Mr. WHITTINGTON. Is she a Republican or Democrat?

Mr. BURNS. She is a Democrat. Former Senator Hattie W. Caraway is another Democratic member, and Mr. Albert H. Ladner, of Philadelphia, is the Republican member.

Mr. HOFFMAN. Who runs the agency, the committee or the secretary?

Mr. BURNS. The committee runs the agency, sir.

Mr. HOFFMAN. The secretary does not run it?

Mr. BURNS. The Commission is the head of the agency.

Mr. HOFFMAN. Who does the business?

Mr. BURNS. Naturally, sir, the secretary must have a great deal to do with the business of a commission of that kind.

Mr. HOFFMAN. Who is that?

Mr. BURNS. Mr. William McCauley.

Now, gentlemen, Plan No. 2 states that it will accomplish_one_or more of the objectives specified in the law. It is true that the plan does not identify which objectives the plan will accomplish. However, so that you will have the objectives before you, I direct your attention to title I, section 2, of the Reorganization Act of 1945, which directs the President to determine what organizational changes are needed to accomplish certain specified objectives. Now first of all, the first objective is to facilitate orderly transition from war to peace Well, gentlemen, this Commission is not a wartime agency, it was established 30 years ago, and of course that objective could not pertain to the work of the Commission which has been carried on under a commission form of administration for 30 years.

The next objective is to reduce expenditures and promote economy. Now, personally, I personally, and our organization are steadfastly committed to the proposition that wherever it is possible economy should be promoted and expenditures reduced, but this plan makes no claim for, nor does it specify that there will be any reduction of expenditures or economy of operations. That is as far as I can determine from the reading of the plan, and in fact as I recall his testimony

given before you gentlemen a couple of days ago and given in answer to direct questions by members of this committee, the Director of the Bureau of the Budget would not, or at least did not, state a single instance with reference to Employees Compensation Commission where expenditures would be reduced or economy promoted in any way, shape, nor form.

Mr. WHITTINGTON. This proposal with respect to the Employees', Compensation Commission abolishes the Board, does it not? Mr. BURNS. It abolishes the Commission.

Mr. WHITTINGTON. It also abolishes the Social Security Board, does it not?

Mr. BURNS. Yes, sir.

Mr. WHITTINGTON. It authorized the appointment of three administrators who are virtually the people who do the work for this Board? Mr. BURNS. It authorizes the appointment of a board of appeals as far as the employees' function of the Employees' Compensation Commission is concerned, and a single Administrator to oversee the entire work of the Commission and also creates two additional employees in the $10,000 brackets in the Federal Security Agency. Mr. WHITTINGTON. I understood that, but my point is, these three Commissioners as authorized would have the same functions as the members of the Board at present? Is that true, or would they not? Mr. BURNS. I do not believe they would, sir.

Mr. WHITTINGTON. What functions would they not have?

Mr. BURNS. Under the plan, it is stated on page 4, "the abolition of Commission as an administrative body and the creation of an Appeals Board will provide the advantages of a single official in charge of operations." Then step over to page 7, section 3, "and shall be performed in such manner and under such rules and regulations as the Federal Security Administrator shall prescribe." That raises a very grave doubt as to whether the functions would be carried on. Mr. WHITTINGTON. Who would have the functions of the Board if these three do not have them?

Mr. BURNS. The Federal Security Administrator.

Mr. WHITTINGTON. What language would give it to them?

Mr. BURNS. Under the language which I have just read.
Mr. WHITTINGTON. I See "transferred to him.'

Mr. BURNS. Yes, sir. And under such rules and regulations as "he" would prescribe.

Mr. WHITTINGTON. This Board would be limited to the matter of appeals?

Mr. BURNS. That Appeals Board would be appointed by the Federal Security Administrator and could be without regard to any bipartisan aspect.

The CHAIRMAN. Have you had any of your attorneys in your organizations, Mr. Burns, to make a study of the legality of this abolition of the bipartisan Board?

Mr. BURNS. Mr. Chairman, I was going first to cover the objectives stated in the law, which were hoped to be accomplished, and then point out wherein they did not accomplish those objectives.

The CHAIRMAN. We wish you to put that legal opinion in the record. Mr. BURNS. We will be glad to do it and if I have time, I would like to read certain excerpts of it.

Mr. WHITTINGTON. Tell me about the bipartisan character of the Board, if you have that here. Do you have the act establishing the Board?

Mr. BURNS. I would say this to you: That first of all, a workmen's compensation law is a substituted statutory right of an employee against his employer for the older employees' liability laws, or the common-law actions, and it is substantial and fundamental as a right, and the processes for determining this right are quasi judicial. I will recite for you the case of Crowell v. Benson. You will find that in 285 United States, at page 75, where Justice Brandeis spoke of review of "quasi-judicial decisions" of the Federal tribunals, and he referred to the power entrusted to the Commission "to make initial determinations and matters within, and not outside, the ordinary judicial purview."

Similarly, in Paramino Lumber Co. v. Marshall (18 E., Supp. 645), the Court said that the Deputy Commissioner of the Commission "is a quasi-judicial officer having certain recognized jurisdictional and discretionary powers.'

The Reorganization Plan No. 2 would abolish this statutory quasijudicial and independent Commission, diffusing its functions into the Federal Security Agency, not as a separate workmen's compensation commission or board, but passing the functions to the Federal Security Agency to be performed "in such manner" as that Agency shall prescribe.

The CHAIRMAN. In other words, you think that that transfer violates section 5 subparagraph 6 and subsection a, reorganization act of 1945?

Mr. BURNS. Yes, sir, it does, and in our opinion because it is a limitation of authority which is imposed upon, and granted to the Commission under the law which created it.

Now the reorganization act, mind you, gentlemen, is not a law requiring administration which sets up standards for the President to apply, it contains, in our opinion, a delegation to the President of legislative authority, of the kind which is unconstitutional.

I will cite for you in that connection, Schechter Poultry Corp. v. United States (295 U. S. 495).

Now the Commission was created by statute, and it is our considered opinion that it can only be abolished by the Congress which created it. In my opinion, and in our opinion, it is beyond the power of Congress to hand over to the Executive any power to abolish these agencies of the Government which are so set up.

The CHAIRMAN. In other words, you think, Mr. Burns, that section 3 of the reorganization plan No. 2 violates section 5 of the reorganization act of 1945 in two respects, it limits the powers of the quasijudicial agency, in that the functions of the newly created agency, the newly created Appeal Board are subject to the rules and regulations of the Federal Security Administrator?

Mr. BURNS. That is exactly right in the first instance, sir.

The CHAIRMAN. It imposes restrictions that could not be imposed on the independent quasi-judicial agency created by the Workmen's Compensation Act?

Mr. BURNS. Exactly, Mr. Chairman.

Let me point out one other thing, and at your request, I will put this in the record; there have been a number of reorganization plans submitted in the past. Under previous plans, it has been clearly understood by Congress that the power to abolish necessarily lay in Congress and could not be delegated. I would like to make reference to that and refer you to House Report No. 1126, which was dated way back in April 1932. It accompanied H. R. 11597. "The power to abolish agencies of the Government created by statute cannot be delegated under the Constitution."

The CHAIRMAN. Of course, on that point, the reorganization plan itself does not abolish. They are abolished by the Reorganization Act of 1945. That is the way the Attorney General has ruled, I understand.

Mr. BURNS. Mr. Chairman, it is certainly an agency of the Government. The agency is abolished. That is the first thing which is prescribed, constitutionally. There cannot be, by this plan, authority granted which will abolish an agency which is created by statute.

The CHAIRMAN. I think the Attorney General determined that the reorganization plan itself, that the act, granting this authority, and the Congress has the veto power at the end of 60 days, and if that veto power is not exercised then, it goes into effect.

Mr. BURNS. There are certain restrictions upon what a plan may do, as you have just pointed out. It is still in violation of the authority granted under the law, too.

Mr. CHURCH. Have you any other opinions, say of the Attorney General, or of some one else?

Mr. BURNS. No sir.

Mr. CHURCH. Are you a lawyer yourself?

Mr. BURNS. I happen to be a lawyer; yes. I have a memorandum which I am placing in the record, Mr. Chairman, with certain cita

tions.

Now I will revert to the objectives which were hoped to be accomplished by reorganization.

The next one is to increase efficiency. Now, gentlemen, I earnestly and sincerely assert and submit that this plan, as far as the employees compensation commission is concerned, makes no claim for any increased efficiency in the functions of the Commission.

Mr. RICH. However, it says it lightens the burden to the President. Apparently that is the main thing and not to take extra care of the employees.

Mr. BURNS. As long as you mentioned that at that point, I have a little bit here later some information on that. On page 3 of the plan it says it eliminates a small agency and shall lighten the burden on the President. Frankly, that bears no relation to the purpose stated in the reorganization act and the employees compensation commission makes an annual report to the President of the United States, and he in turn transmits that to the Congress.

Now, we had not had an awful lot of time to do a great deal of research on this, but I have been informed-and the authority I have I believe I have the right to rely upon says-that in the past 30 years not more than five or six matters have arisen which were necessary to be called to the personal attention of the President by the Commission. Mr. JUDD. He can still go on the judgment of the Federal Security