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U.S. INTERNATIONAL TRADE COMMISSION

STATEMENT OF WILL E. LEONARD, CHAIRMAN

ACCOMPANIED BY:

DANIEL MINCHEW, VICE CHAIRMAN

EDWARD C. WALLINGTON, JR., CHIEF, FINANCIAL MANAGE-
MENT

BUDGET REQUEST

Senator PASTORE. The next witness is Mr. Will E. Leonard, Chairman of the U.S. International Trade Commission.

The House subcommittee, in its action on the International Trade Commission budget, provided $11,300,000, a reduction of $239,000 below the budget request.

It is my understanding that the House Appropriations Subcommittee made this reduction in order that the budget for the International Trade Commission would not exceed the amount authorized in the House version of the pending authorizing legislation.

It is also my understanding that the Senate version of the authorizing legislation contains a higher ceiling and would allow the appropriation of the full budget request.

You may proceed.

Mr. LEONARD. Thank you, Mr. Chairman. On my right is the Vice Chairman of the Commission, Mr. Daniel Minchew.

PREPARED STATEMENT

I would submit a statement for the record and then summarize it, with your permission, Mr. Chairman.

[The statement follows:]

(681)

The United States International Trade Commission hereby appeals for Senate restoration of the $239,000 House cut in the Commission's FY 77 budget, bringing the total back to the $11,539,000 originally requested by the Commission. As we pointed out in our letter of May 7, 1976, to this subcommittee, the Commission believes that the cut would be counterproductive in a period when the national attention to matters of international trade is increasing the demand for the Commission's services.

The impact of the proposed House cut is augmented by two factors mentioned in our appeal letter: First, the probable requirement to continue annual reports on synthetic organic chemicals, increasing FY 77 costs by about $61,000; second, unexpected increases of some $50,000 in miscellaneous FY 77 costs since the budget was submitted.

The Commis

sion is prepared to absorb these increased costs within the budget of $11,539,000 originally requested. However, the Commission believes that absorption of the House cut in addition to these added expenses would unduly restrict the Commission's ability to carry out its respon

sibilities.

Absorption of the House cut and the added expenses just mentioned would require a reduction of about 17 man-years of staff time, through elimination of planned positions and increases in previously planned rates of vacancies in authorized positions. This, added to the 5-man-year lapse rate already allowed in the Commission's budget estimate, would require the Commission to operate with an average of about 22 fewer fulltime permanent employees than would be available if the 426 requested positions were filled.

The Commission is, at present, reducing the number of vacant positions and actively recruiting in understaffed areas. The Commission expects to be near full strength by the start of FY 77, so that it can be more adequately equipped to assist the Nation's trade policymakers while completing those investigations requested in accordance with statutory requirements.

The Commission's original request for fiscal year 1977, which

requested fewer positions than are authorized for FY 76, did call for

an increase from the fiscal year 1976 dollar total. However, 93 percent of this increase results from built-in cost increases.

Only $75,000 of the budget increase was allowed for growth in program-support costs, and part of this cost growth results from inflationary forces rather than from a change in planned operating levels.

The Commissioners are deeply appreciative of the cooperation extended by the Congress and your committee in providing funds for the Commission in recent years. This cooperation has been an essential element in the Commission's efforts to meet the expanded responsibilities placed upon the Commission, culminating in the special demands included in the Trade

Act of 1974.

The justification we originally submitted to your committee provides, we believe, a full explanation of the Commission's activities and needs. We want to reemphasize to you that the demands for Commission services are, in fact, large and growing. In particular, great efforts will be required in the following areas: public investigations under the Trade Act of 1974; services to support U.S. representatives in the current round of international trade negotiations; the development of compatible statistical systems; and participation in the development of a basic commodity code for use in international trade.

In this period of intense national interest in matters of international economic policies and particularly of international trade, the Commission must provide timely and professional assistance to its primary customers, the Congress and the President, but it must also improve its services to its ultimate customer, the American people. You will note that the only two new employees requested in this budget will supply new expertise and emphasis on consumer interests affected by international trade matters. The Commission, reflecting its new name and the congressional intentions expressed in the Trade Act of 1974, will be attentive

to export issues and what is happening with respect to the trade of other countries, in addition to its traditional concern with matters pertaining to imports. We believe that the Commission's present efforts, such as its recent advice to the President on the probable effect of tariff concessions and the generalized system of preferences, its reports on East-West trade, its studies of international commodity agreements,

and its series on the competitiveness of the United States and other major trading countries are earning the Commission added respect throughout the international trade community.

The Commission intends to concentrate its fiscal year 1977 efforts not on expansion of its resources, which in large part means its personnel, but rather on improved utilization. We believe that through improved management we shall be able to finance effective fiscal year 1977 operations with the $11,539,000 originally requested. We request Senate approval of this FY 77 budget total.

I shall, of course, be pleased to supply any amplifying information which might be required.

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