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Administrator; he will get somebody's opinion; it must go up on a final decision; he can call on the Federal Security Administrator with. out our giving that individual power to lay down the rules and regu. lations with no restraint whatsoever.
Mr. BURNS. Based upon the experience, Doctor, and the previous record, I would venture to suggest that there would be more burden placed upon the President from the standpoint of reporting to him and contacts with him than there are under the present set-up of the Commission.
Now, to increase the efficiency, as I started out to say, the plan makes no claim for increase in efficiency in the Government or the functions of the Commission.
Mr. CHURCH. Before you get into that, you mentioned you had little time for research. If you have a few days, can you furnish additional data that will bear out your contention?
Mr. Burns. Do you mean on the matter of reporting to the President?
Mr. CHURCH. Yes.
Mr. BURNS. Frankly, in making the statement that the plan makes no provision for any increase in efficiency, I have not heard all of the testimony introduced here, but I have heard considerable of it, and the witnesses called in to enlighten this committee as to what the plan proposed to do, do not say very much about wherein or in what respects, or to what extent any efficiency would be promoted particularly with reference to the functioning of the Employees Compensation Commission. I will say to you gentlemen, also, that in the records of the Congress, the Appropriations Committee is replete with instances where the Commission has been commended not only for its efficiency, for its economy in operating, in operating the agency and carrying out the work imposed upon them by the act which created it.
It seems to me that the plan as far as efficiency is concerned is intended more to strengthen the internal structure of the Federal Security Agency with which of course I have no quarrel. However, we must at all times bear in mind that the interests of the employees, the employers, and the insurance carriers affected by the Federal workmen's compensation laws, and their preferences in the method of administration have apparently been ignored, and in connection with the preferences of these people, they have been stated upon a number of occasions.
For instance, for the past. 10 years, the wishes of the employees have been demonstrated through action of the national conventions of the American Federation of Labor which has pointed out the necessity of maintaining this agency as an independent bipartisan body.
The next objective which is sought to be obtained is to group, coordinate, and consolidate agencies and functions of the Government, as nearly as may be, according to major purposes.
Now as I see it, gentlemen, again in all sincerity-it is my opinion that the major purpose of the Federal Security Agency concerns welfare and health. Workmen's Compensation laws are apart from that welfare and health idea. They confer statutory rights under a system
which is in effect, as I stated before, a substitute for common law rights. As I said also before, the administration of such an agency has been judicially recognized, and I have quoted Crowell v. Benson and Paranino Lumber Company v. Marshall, as a quasi-judicial function unrelated to the function of Federal Security Agency.
One of these, I said, one of the many functions is to act as a tribunal, hearing and deciding claims in which the parties are private employees and employees. No like functions as far as I am able to determine are exercised by the Federal Security Agency. Therefore it does not seem that this grouping or consolidation does any job as relates to putting them together in accordance with the functions which they are carrying out.
Now the next one: reduce the number of agencies by consolidating similar functions under a single head and abolishing unnecessary agencies and functions. Well of course I think you will take notice of the fact that the functions of this Commission are certainly anything but unnecessary. They are indeed vitally necessary. The functions of the Compensation Commission are not similar to those performed in any agency of the Federal Government. I know of no case wherein any other reorganization, functions which are the obligation of the Employees' Compensation Commission have ever been placed more or less indiscriminately under a department of public welfare. The functions of the Commission do not overlap those of any other Federal agency. There is no overlapping whatever and they are not elsewhere duplicated in the Government. That statement refers to the next objective which is sought to be attained, that it is to eliminate the overlapping and duplication of effort.
Now, those are the objectives which I refer to and the final objective is—and I believe that is contained in section 2 (c), I believe, of the Reorganization Act of 1945. It expresses as I think the chairman or somebody has said, the pious hope and expectation of Congress, that the changes made by any plan of reorganization, should accomplish an over-all reduction of 25 percent in the administrative cost of the agencies affected.
Well, of course, the reading of the plan will disclose that there is no claim or even hope expressed that there will be a savings. As I stated in answer to a question by Mr. Whittington, it provides for the creation of two new assistant heads of the Federal Security Agency at an annual salary of $10,000 each.
At this point again I refer to the absence of testimony from the Bureau of the Budget or anyone else which I heard which even suggests any reduction in administrative costs. Therefore, if it is proper, I ask you, wherein does plan 2 accomplish a single solitary one of the objectives which Congress had in mind when it passed the Reorganization Act? I submit that it does not do so.
Colonel Stengle calls my attention to the fact that at the present time the Commission is understaffed. They are working on a smaller force than the law allows.
Now regarding section 5 (a) again, I will revert to that, with your indulgence, and it provides that no reorganization shall have the effect of imposing in connection with the exercise of any quasi-judicial function possessed by an independent agency any greater limitation upon
the exercise of independent judgment and discretion to the full extent authorized by law, then present law authorizes. - It is my further considered, opinion that the plan violates this statutory provision. The abolition of a three-member bipartisan com: mission in favor of a single administrator with a separate board of appeals to hear and decide cases directly imposes a greater limitation on judgment than present law authorizes. Employees are entitled at the present time to two things, essentially, to bipartisan judgment, on their claims, and the judgment of a three-member body. That is what the law provides. - Now this, what you might call a safety device on judgment and discretion, is abolished and a single administrator, a single individual will control the results in deciding these claims... Now an appeals board would be created not authorized by law. This newly created body in my opinion. gentlemen, would exercise a superior function. Mr. JUDD. Mr. Burns, do you have an idea with regard to the appointment of this board, how long they will be in office and under what conditions they will be permitted to serve, and under what conditions they will be allowed to serve? Mr. BURNs. There is nothing to indicate anything of that kind. Mr. JUDD. In other words, the Federal Security Administrator not only makes the original decisions, he sets up the appeals board, he determines as far as he can see what the salaries are going to be, who can remove them and for what, and therefore makes them subject to his whim? Mr. BURNs. I agree with you thoroughly, Doctor. Mr. JUDD. You do not feel that would be to the protection of the employees? Mr. BURNs. I certainly do not. Mr. JUpd. Were you here yesterday when I asked the gentleman from the Justice Department whether, under this plan, it could happen that an employee would have to belong to the right party or vote the right way or support an established policy in order to get fair consideration? Mr. BURNs. I heard you asking that question and as I remember, he said it could happen. Mr. JUDD. Do you not think a plan ever should go through which would permit a case to be decided on any other consideration than its merits? Mr. BURNs. Exactly, sir. Also the lines of authority would also be confusing as I see it. Qf course the single administrator as you know would be none other than the Federal Security Administrator himself. He himself, at least theoretically would have to decide these cases, yet his action would be subject to an appeal to the board of his own choice. Mr. JUDP. If the board disapproved his decision, it would certainly mean the dog house for him, would it not? Mr. BURNs. I think that is a very pertinent contribution, sir. Now another point, and I refer to page of the plan, on top of the page, where its says: the Federal Security Administrator, as the head of the Federal Agency with
the greatest experience in insurance administration, is in the best position to guide and further the program of the Commission.
I submit that the Commission has no insurance program which necessitates guidance or furtherance. The Commission's function as I have stated upon two or three occasions in my testimony thus far is purely quasi judicial. Experience in insurance, in my humble judgment, is of little, if any, value in the highly specialized field of workmen's compensation. The experience which is valuable, however, is the adequate knowledge in claims, hearings, and adjudications involving workmen's compensation laws. It is a field of activity not within the experience of the Federal Security Agency. The Commission's functions as I see is more nearly akin to that of a court than that of an administrative agency.
Now, the statement is made in the plan, gentlemen, also on page 4, in about the middle of the second paragraph on that page: it is essentially the plan used in the administration of veterans' pensions and old-age and survivors' insurance and employed by many States in their workmen's. compensation program.
Now, there are 48 States in this Union. It is my view that this is definitely contrary, that this statement is contrary in fact. As far as I can find out, there are 47 States which have enacted workmen's-compensation laws. In 36 of those States, they are administered by independent commissions. The number is 36 out of 47. Three States have court administration and in only 8 is there a departmentalized administration, and in no State that I have been able to find out anything about, are the functions of commission similar to this diffused with an agency which is comparable to the Federal Security Agency.
Now, I have already covered the point that the functions of the Commission are to be carried unded a single official under such plans and regulations as he might devise.
Gentlemen, back in 1932 there was a plan proposed to merge the Employees' Compensation Commission with the Civil Service Commission. At that time, Mr. Green, president of the American Federation of Labor addressed a letter to Hon. Joseph Byrns, who was then the chairman of the Economy Committee of the House of Representatives in which he protested against transferring the United States Employees' Compensation Commission to the Civil Service Commission. I have his letter here and I am not going to take all your time to read it, although I think it should be included in the record.
The CHAIRMAN. Without objection the letter will be included in the record. (The letter is as follows:)
MARCH 17, 1932. William Green, President of the American Federation of Labor, sent the following letter to Representative Joseph W. Byrns, Chairman of the Economy Committee of the House of Representatives, in which he protested against transferring the United States Employees' Compensation Commission to the Civil Service Commission :
“In certain plans which are being considered providing for the reorganization and consolidation of certain Government departments and bureaus in order to bring about a reduction in taxation, it is proposed that the United States Employees' Compensation Commission shall be placed under the jurisdiction of the Civil Service Commission. Because I regard such a plan as against.public interest, I wish to emphatically protest against it. I consider it unwise, impractical, and unsound. This opinion is based upon the following reasons:
“When I was a member on the Ohio State Legislature during a 4-year period beginning in 1911 an opportunity was afforded me to participate in the enact
ment of a workmen's-compensation law. Because of this experience, I feel justified in asserting that I know something about accident compensation legislation. It has been a subject to which I have given very thoughtful consideration for more than 30 years.
"The success of this character for humane legislation depends upon prompt, efficient, and satisfactory administration. For this reason it has always been recognized as a matter of principle that the administration of a workmen's-compensation law be vested in an independent administrative body free from political influences and from the dominating control of a political agency. In the State of Ohio, as in practically every other State where compensation legislation has been enacted, this fundamental principle has been recognized and compensation laws are being administered reasonably satisfactorily by commissions clothed with quasi-judicial powers.
"The Federal Employees' Compensation Act is typical of workmen's-compensation laws passed in the different States, in the Canadian provinces and in most all civilized countries. Forty-two States have passed workmen's-compensation laws. The Federal act embodies within it the best features of State workmen'scompensation laws and represents in construction and character the highest and best experience gained through the consideration, the enactment, and the operation of State laws.
"The one difference is found in the fact that while the State workmen's-compensation laws apply to employees associated with private industry, the Federal act applies to those employed by the Federal Government. The employee's rights to receive compensation when he sustains an injury during the course of employ. ment is based upon an act of Congress authorizing the Government to pay a stipulated amount in case of an injury sustained during the course of employment.
"The sole purpose of the Government as reflected in the enactment of the Federal Employees' Compensation Act is to extend to Government employees the same measure of relief which is accorded to employees engaged in private industry. In order to achieve this purpose, commissions created for the purpose of administering workmen's compensation laws, including the Federal act, are clothed with quasi-judicial power in passing upon claims filed for injuries sustained during the course of employment.
“Under the State laws the right of appeal from the decisions of such administrative authority is usually denied except on questions of law. This authority is well supported and confirmed by decisions of the higher State courts. Massachusetts, Ohio, and New York may be cited as examples. In the administration of the Federal act, the Compensation Commission may review and revise its awards on appeal or on its own initiative, but there is no provision for appeal to a court or other authority.
“Because of the great responsibility and broad discretionary powers vested in such an administrative body, a special board or commission is usually created for the discharge of such functions. A board or commission is preferable to an individual administrator. At the present time 30 States out of 42 which have enacted workmen's-compensation laws have created boards or commissions clothed with the authority of administration. Those which do not, for the most part function in an elementary way, utilizing State courts and private insurance companies in the adjudication of claims.
"It is my firm opinion that.the existing independent status of the United States Employees' Compensation Commission should be maintained. The administration of compensation laws is within a specialized field. This character of work can best be performed by an agency created for the specific purpose of doing so. The Congress of the United States decided in favor of this plan in the year 1916 when the Federal Employees' Compensation Act was passed. The experience gained during the past 15 years has served to confirm the wisdom shown by Congress when it placed the authority to administer the law in an independent commission clothed with quasi-judicial powers.
"Each and every investigation which has been made of this subject tends to confirm the soundness of the original plan of placing the administration of the compensation legislation under the control of a separate commission. The joint congressional committee of the Sixty-eighth Congress which gave consideration to the reorganization of the Government departments recommended that the independent status of this Commission be maintained. Furthermore, the joint committee of Congress dealing with the subject of the reorganization of the executive department in its report submitted by Senator Smoot on June 3, 1924, and which was printed in the Congressional Record of that date, concluded its discussion of those Departments which ought to be independent with a statement that: "The