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Senator Long. That is what I had in mind, which caused me to wonder whether it is actually necessary for Congress to act any further if the President sent down the proper reorganizational plans.
Mr. HOOVER. I have been advised by all of our legal friends, that it would be utterly impossible, for instance, to reorganize the Post Office or the Armed Services or to provide a new accounting or budgeting system and a new personnel system in the Government without special legislation by the Congress. The President's authority, I am advised, does not extend that far.
Senator Long. It just occurs to me that there might be some difficulty here in moving in two directions at the same time. Do you find any conflicts in the President's plans as submitted with the recommendations of the Commission that you headed?
Mr. HOOVER. No; there are no substantial conflicts. These are steps in the same direction.
Senator Long. Do you think we can actually get effective reorganization of these departments if we are at variance with the President's thinking in this matter? In other words, do you think it can be done without his full cooperation and help?
Mr. HOOVER. I would not want to say that. My conviction is that the President wishes to see the reorganizatiɔn carried through. Naturally, people will disagree on details while they may agree on broad proposals. On the fundamental question of reorganization I have no doubt you will find the President is most cooperative in the whole reorganization program..
Senator Long. What I had in mind, for example, is the difference in the proposals here on the organization of the Department of Welfare; that includes various agencies, I believe, that you had not recommended be included in one department. I understand, for example, you had not recommended that these other functions be included with the education and social-security functions.
Mr. HOOVER. We recommended that a new agency, for instance, be set up, to be called the United Medical Services, that would embrace the public health and hospital services of the country. That, I am advised, could not be done without a special act of Congress. Therefore, it is no criticism of the President's plan to point out that those bureaus cannot be transferred at the present moment.
Senator LONG. Do you think it would accomplish much if we attempted to pass some of these 19 bills that have been introduced, if they are actually at variance with the President's thinking on the subject?
Mr. HOOVER. I would hesitate to answer that question, because I have been the Chairman of the Commission that has made exhaustive studies, and where the majority and often the unanimous vote of that Commission has proposed definite forms of organization, I will stick to those forms in spite of anybody.
Senator Long. It is very obvious already that the President will follow a large number of recommendations of your Commission. However, it just occurs to me from the plans that have been sent down, we have indications that he will not follow all of them. He will follow some and possibly may disagree with some of them.
Mr. Hoover. I do not quite agree that there is such a differenca between the President and myself. The President has been most cooperative in the whole work.
Senator Long. I notice you stated here that a portion of the labor organizations have been transferred to the Labor Department. Do you have any others in mind that should be transferred under this: plan?
Mr. HOOVER. I mentioned this morning there were three others that we think should be transferred. They do not all come from the Federal Security Agency, which the President was dealing with. It may be that some future plan will cover those. I have no information on that.
We recommended that four different functions should be put in the Labor Department which are not yet there. The plan before you does not deal with the Labor Department. The plan before you is only incidental; certain bureaus are transferred from Federal Security to Labor.
Senator Long. Thank you very much.
Senator Ives. Mr. Chairman, I think what I should like to bring up at this time is a matter which is of paramount interest to Senator Humphrey as well as myself. So I would suggest that the two of us.
. collaborate in any questioning to bring out the high points of what we are trying to find out.
I am referring now to Reorganization Plan No. 2, which, as I understand, Mr. Hoover, you have approved insofar as it goes. Perchance you do not think it goes far enough, which thought I can understand.
In connection with the plan as proposed, it has been charged that the Department of Labor, by virtue of its major purpose of promoting the welfare of the wage earner, would be prejudiced in favor of the employee to the detriment of the employer, in operating the Bureau of Employment Security. Therefore, the proposed transfer would have a tendency to destroy confidence of the employer in the administration of the bureau. This was one of the chief issues at the time Reorganization Plan No. 1 of 1948 was rejected by the Congress.
In that connection I should like to ask you a few questions, if I may.
First, is it your opinion that transfer of the Employment Service to the Department of Labor would have an adverse effect upon the employer's confidence in the impartial operation of the Service, and upon his participation in it?
Mr. HOOVER. I do not think any reasonable employer would have prejudices on that account. In any event, I do not see any difference which will arise in the administration of a bureau wherever it is. I do not believe that an employer ought to have any less confidence in the objectivity of the Labor Department than the Federal Security Agency. If there is such criticism, the employer ought to realize that these bureaus placed in the Labor Department will be under the more vivid searchlight of public opinion, than if in the Federal Security Agency, whose major purposes are not related to the subject.
My own view is that both sides would be better protected. I also go a little further than that, Senator. The Congress set up here a great many years ago the Labor Department with the idea of developing certain agencies that would be helpful to the laboring classes in the United States. During the last few years there has been a steady denudation of functions from that Department. It has been reduced until it has a budget I think of about $11,000,000 a year, and has perhaps two or three thousand employees. Yet it has an overhead structure that is costing as much, and is as extensive as many agencies in the Government with 100 times the expenditure and 100 times the
number of employees. In other words, the Labor Department has been so denuded of its functions and so attenuated that we had better abolish it or set it up as an effective agency,
Senator Ives. I do want it understood, in the questions I raise, they are not raised in any spirit of criticism on my part. They are only for information; and that only.
I think you have largely answered my next question, but I pose it just the same. Do you believe that any employer then would have any justification for preferring administration of the Employment Service by a so-called neutral agency, which would have no inclination to be prejudiced in favor of either the employer or employee? For example, the Federal Security Agency in which the Service is presently located.' That happened to be, I might say, one of the major arguments or considerations at the time Reorganization Plan No. 1 of 1948 was before the Congress. They felt that the whole set-up then being in the Federal Security Agency it should remain there, rather than be placed one part in the Department of Labor and the other part left there, and they preferred to have it left there, because they thought there would be a more neutral approach by an agency of that character than by the Department of Labor, which they thought would be prejudiced. I think you have answered this in part, but not entirely.
Mr. HOOVER. I think that is probably true at the time that action was taken, and that that was the reason for the action. But I think it is no longer a reason. The Labor Department has many other functions in relation to labor. It has the cost-of-living services and several other services that bear directly or indirectly on the agencies we propose should be transferred. I do not believe that the Labor Department is a prejudiced Department advocating one aspect of American life any more than the Department of Commerce.
We have to believe that the departments of the Government are going to act on behalf of all of the citizens of the country, and that the searchlight of the public opinion and the action of Congress will keep them on that track. Certainly I do not like to see a poor administrative structure just because of prejudice.
Senator Ives. Mr. Hoover, there is one more thing I should like to ask here. I think you have pretty well covered the questions I had in mind, although I am sure that Senator Humphrey will have additional ones to ask.
In this connection, the President's reorganization plan does not itemize anticipated economies, but states, and I quote here, "It is probable a significant reduction in expenditures will result."
The Bureau of the Budget estimated in 1948 that consolidation of the Bureau of Employment Security into the Department of Labor would effectuate administrative savings of approximately $250,000; in the Federal Security Agency savings of approximately $246,000. But opponents of the transfer to the Department of Labor charged as much as $500,000 would be saved by eliminating the regional employment offices if the services were consolidated in the Federal Security Agency.
My questions are as follows:
First, in your opinion, would transfer of the Bureau of Employment Security to the Department of Labor effectuate any sizable economies, and if so, could you estimate the amount?
Mr. HOOVER. No; I could give you no estimation of the amount. I have the faith that this Bureau placed in the Department of Labor and associated with men who are familiar with the problems of labor, will get more economical handling than it will be as a sort of an orphan in the Social Security, where there are other and much more dominant activities.
Senator Ives. Then I should like to ask another question in that connection. Would it not be necessary for the Department of Labor either to establish additional regional offices or to greatly expand its existing regional offices to administer the employment and compensation services?
Mr. HOOVER. I do not think so.
Senator Ives. Then my third one is a natural follow-up. Would such action not duplicate the existing Federal Security Agency regional offices which administer the two services at present? Í think we may run into some questions there.
Mr. HOOVER. I think you will find that all of those offices are divided into two separate divisions, and it amounts to about the same thing one way or the other.
A much more constructive thing would be to bring a lot of Federal agencies into a given town under one hat, instead of having these two either separate or together. In one city there are 185 Government agencies, I think, in 85 different offices. It is much more important to solve the whole question of branch offices of the Government than to bother about questions as to whether these two are under the same roof.
Senator Ives. Thank you.
Senator HUMPHREY. Mr. Hoover, I shall continue in the same line of thought that Senator Ives has posed to you.
First of all, just this general observation. It has been generally accepted that the operation of the United States Employment Service and the operation of the Unemployment Compensation Service are closely related programs which should be administered by the same department of government at the Federal level, just as they are in the majority of the States. You have pointed out already with forceful argument, that the Employment Service is clearly a major function of the Department of Labor under the statutory purposes of the Department of Labor. On the other hand, it has been argued with effect too, that the Unemployment Compensation Service is a grant-in-aid program, closely related to some 15 other grant programs, such as the oldage insurance, public assistance, education, all operated under the Federal Security Agency.
Here is the question: Is it your opinion that the advantages to be gained by the transferring of the Employment Service, because of its functional relationship, to the Department of Labor would outweigh the disadvantages which might result from the transfer of the unemployment compensation grants program to the Department of Labor?
Mr. HOOVER. My recollection is that the Commission in its studies of that problem recommended that the Unemployment Compensation Service also be moved into the Department of Labor alongside of the Employment Services. I do not believe that the grants-in-aid feature of agencies creates special affinity on which to set up organization plans. I do not see any more reason why we should any more
confine the agency under discussion to the Federal Security Agency because it is a grant-in-aid than that we should put the highways in the Security Agency because they also are grants-in-aid. In other words, the theory that all the grants-in-aid programs ought to be brought together seems to me to be a feeble basis for administrative organization of the Government.
Senator HUMPHREY. The final question. In your recommendations this morning, and your analysis of the President's reorganization plans thus far, you pointed out that two bureaus or two functions had been transferred, the Bureau of Employment Security, and the functions of the Veterans' Placement Service. There were four more that you brought to our attention, and I just wanted to clear this up in my own thinking, since Senator Ives and myself have the responsibility for Reorganization Plan No. 2.
Are these other four, or could these other four be transferred without any further congressional action? Is that within the purview of the general Reorganization Act as passed?
Mr. HOOVER. I think three of them could. There is a question as to the fourth that I mentioned. That is, clarification of the responsibility in enforcement of labor standards in connection with Government contracts. That would require a little legal investigation as to whether or not it is within the President's powers under the Reorganization Act of 1949.
Senator HUMPHREI. The Selective Service Sys cm could be ready transferred.
Mr. HOOVER. Yes.
Senator HUMPHREY. I recall that also has a very heavy administrative overhead in terms of the number of people that are being recruited.
Mr. HOOVER. It has.
Senator HUMPHREY. Something like almost a thousand dollars a person when they got through with it.
Mr. Hoover. One difficulty is that although it involves civilians, and civilian interests, it is under military officers. It seemed to our Commission that it would be a better set-up to put it into a civilian department than to leave it out of control as an independent agency under military officers.
Senator HUMPHREY. I was thinking in terms of what you said about the high administrative overhead of the Labor Department. The Selective Service, if my memory serves me correctly, has had a terrific overhead in terms of the number of people who have been recruited. There might be a good saving, in that instance.
Mr. HOOVER. I think that is true. Senator HUMPHREY. Thank you. Senator MUNDT. Mr. Hoover, the particular reorganization plan with which I have been working is No. 3, dealing with the reorganization of the Post Office Department. One of the recommendations of the President of the Commission, was that the Postmaster General should not be an official of a political party. I was wondering how we could proceed to carry out that recommendation. What would the method be?
Mr. Hoover. I just don't know how that could be done. I suppose it could be fixed by law. The Commission's recommendations with regard to the Post Office were rather radical, but rather simple. They first proposed an overhead set-up very much as is provided in the