building, or any of these agencies, to get anywhere with their administration, their hope of administration, if that is what your Department has advised in the preparing of its plan?

Mr. WASHINGTON. I would add this: That it would no doubt be incumbent upon the new Agency, the National Housing Agency, to endeavor in its operations to carry out the expectations of Congress.

Mr. CHURCH. Always pointing back to the testimony you are now giving, that paragraph C of section 2, that it was not expected, even though in the law it says that it is expected.

Mr. WASHINGTON. Section 2c is a statement of policy which should be carried out. I have no doubt that it will be carried out. But we cannot say that any particular plan is illegal, by reason of the fact that immediate savings of 25 percent are not shown.

Mr. CHURCH. That is not the question, and you know it. I have read it:

an over-all reduction of at least 25 percent in the administrative costs of the agency or agencies affected

We are going to get rid of some of them, but there is a failure here to live up to that section, to the effect that abolitions under this act shall accomplish an over-all reduction of at least 25 percent in the administrative costs of the agency or agencies so affected.

Mr. WASHINGTON. It is my recollection, Mr. Congressman, that at one stage in the consideration of this bill there was discussed a proposal to make it a legal requirement that each plan provide for a definite saving. Instead, we have a provision here which must be interpreted as allowing the President a field of discretion, so that he would not be required to establish that each of these plans would, within the sphere that they covered, accomplish a 25 percent reduction. I think that the legislative history will bear me out on that.

Mr. CHURCH. You are satisfied, then, that the way these three plans are prepared, that they do meet the requirements of your testimony here that it will not save 25 percent as expected, and that they do not have to. As attorneys, you have taken care of words to that affect in these three plans, and you have not in any way, definitely, by word at least, made certain that section 2c would be complied with. That is the substance of my conclusion of your testimony and of the testimony yesterday, and I am ready as one member to move that unless and until we receive that kind of testimony that substantiates and carries out section 2c, that we be able to pass these three resolutions, H. R. 151, 154, and 155, so that you will, as a legal department, have a chance to bring to us your legal opinion that section 2c is complied with.

Mr. WASHINGTON. May I point out this fact, also; the objectives of the Reorganization Act of 1945 are not limited to the obtaining of a reduction in expenditures. There are many other objectives.

Mr. CHURCH. We know that. That is very evident and we know that, but the other is there, is it not? That is a requirement, is it not? Mr. WASHINGTON. That is an expectation which the entire program should accomplish. However, Congress has not put it in terms of legality, though Congress could.

Mr. CHURCH. That is the opinion that you have given, and we get these three plans as the result of it apparently. Now let me ask you this, as a lawyer: If these other three documents, H. R. 151, 154, and

155, if they are passed by the House and Senate and become law, and become effective, there is nothing to prevent the President from, with your collaboration, presenting to the Congress another plan that will more nearly fit with the law, Public Law 263, and this requirement section 2c? He can submit plan after plan, and the Congress must act within 60 days, otherwise the plan becomes effective. Do you understand that as the law?

Mr. WASHINGTON. I think that is true, that if a plan is rejected, the President may offer another plan which he deems will meet the objections made to the first plan.

Mr. CHURCH. Then the 60 days begins to run again?

Mr. WASHINGTON. I believe so.

Mr. CHURCH. It is 60 days in which Congress must act. I presume you know that Congress has in mind recessing somewhere between July 1 and August 15, you have heard that, have you not?

Mr. WASHINGTON. Yes, sir.

Mr. CHURCH. Have you an opinion to express to the committee at this time as to whether or not, in order to comply with section 2c, House Joint Resolutions 151, 154, and 155 should pass, so as to enable us to get the kind of plan that the President might suggest that would come within the provisions of section 2c?

Mr. WASHINGTON. I think that these plans are entirely legal. As far as questions of policy are concerned, they are for the Congress and the President to decide. I have no doubt that Congress can, in various ways, require economy. It has a most potent weapon in that respect, and that is its power to appropriate. Congress can always review the expenditures in the executive agencies.

Mr. CHURCH. Were you the senior officer of the Department that appeared in all these conferences that you mentioned with the Bureau of the Budget? You mentioned the Attorney General had conferences. Did he have them?

Mr. WASHINGTON. He, of course, discussed the general subject of reorganization with me on a number of occasions, and also with Mr. Smith, of the Bureau of the Budget.

Mr. CHURCH. Now will you refresh your recollection, can you recall any changes that you suggested after the plan was submitted to you by the Bureau of the Budget? I realize you have sat in on all these conferences and yet you testified awhile ago, you suggested changes to comply with the law. I would like to have you tell us of any of those changes you suggested anywhere along the line. Mr. WASHINGTON. I would put it this way, Mr. Congressman, that at various times, ever since the Reorganization Act was passed, it has been discussed by us with the Bureau of the Budget. This act has been our Bible in this field, and every section has been thoroughly discussed.

Mr. CHURCH. Do you mean that you follow this Public Law 263 as a Bible, and then you disregard section 2c in that fashion?

Mr. WASHINGTON. Mr. Congressman, I would not agree that we had disregarded the paragraph. I would say rather that we thought (and I still think we were right) that Congress was not imposing an iron limitation on these plans, that each of them should accomplish a 25 percent reduction. We felt that Congress had wisely stated that as an expectation, rather than an absolute requirement,

and that that expectation must be looked at after the entire program in the reorganization field has been brought before Congress, Mr. CHURCH. Where would you say the word "expectations" falls here, as regards amount-5 percent, 15 percent, 20 percent, or 25 percent in the administrative cost saving?

Mr. WASHINGTON. Congress has said: "at least 25 percent." Mr. CHURCH. Well, then, the Bible says things. Do you follow the Bible, or is it a case of good expectations?

Mr. BENDER. The Bible is subject to interpretation. Do you know that, Mr. Church?

Mr. CHURCH. You say the Attorney General had conferences. Do you think he would be able to recall any references to this section 2c? Mr. WASHINGTON. I would not know.

Mr. CHURCH. You would not?

Mr. WASHINGTON. I would not know, because, as I say, the Attorney General had a number of conferences with Mr. Smith at which I was not present.

Mr. CHURCH. Who else besides the Attorney General, yourself and these men you have named; I wish you would put their full names in the record back there where it was referred to: who else was helpful at these conferences in the preparation of these three plans?

Mr. WASHINGTON. There were a number of people from the Bureau of the Budget; Mr. Edward G. Kemp, the General Counsel of the Bureau of the Budget; Mr. Fred E. Levi of the Bureau of the Budget; and from time to time Mr. F. J. Bailey of the Bureau of the Budget was consulted by telephone.

Mr. CHURCH. Mr. Levi is with what Department?

Mr. WASHINGTON. He is with the Bureau of the Budget, I think Mr. Paul H. Appleby, the Assistant Director of the Bureau of the Budget, was also consulted. We have talked to him on the phone, I know.

Mr. CHURCH. So far, you are naming people in the Bureau of the Budget and the Attorney General's department?

Mr. WASHINGTON. That is right.

Mr. CHURCH. All right, now who else was in those conferences? Mr. WASHINGTON. Mr. Atkinson of the Bureau of the Budget. I would have to refresh my recollection on that.

Mr. CHURCH. When was the first conference?

Mr. WASHINGTON. I think that shortly after the passage of the Act we started our discussions with the Bureau of the Budget as to the meaning of the various provisions of the act, and in general terms how the plans should be framed as to form.

Mr. CHURCH. You framed them, all right. Did your early conferences ever cover this section 2c with reference to the saving of this 25 percent?

Mr. WASHINGTON. I can only repeat that we read through the act numerous times. During that time, we must have considered section 2c.

Mr. BENDER. Is it not a fact, Mr. Washington, that Mr. Paul Appleby wrote these plans?

Mr. WASHINGTON. Frankly, I would not know who in any particular plan was the draftsman. It always came to us as something that the

Bureau of the Budget had before it for consideration, and our opinion was asked.

Mr. BENDER. Just one more thing, Mr. Chairman, I would like to insert in the record, the communication from the President of the United States to the Congress on April 4, 1946, in which the Federal Securities Agency requested additional appropriations on page 153 of the Budget, column 2, increase the amount of the estimate for salaries and miscellaneous expenses from $2,225,000 to $2,509,200.

The increase recommended is to provide for increased expenses due to additional patients, increased cost of food, increased equipment requirements; and to take care of errors and omissions in the 1947 annual estimates as submitted by Public Health Service.

On p. 151 of the Budget, col. 2, increase the amount of the estimate for "Commissioned officers, pay, and so forth" from "$5,267,300" to "$5,318,400" - (increase) -- $51, 100

On February 4, 1946, a table of allowances for foreign service for commisssioned officers was approved, pursuant to the Public Health Service Act and Executive Order 9655. This estimate is to cover costs of such allowances.

On p. 153 of the Budget, col. 2, increase the amount of the estimate for "Salaries and miscellaneous expenses" from "$2,225,000" to "$2,509,200"_ (increase) -- $284, 200 The increase recommended includes $90,000 to provide a staff for study and administrative planning in relation to the President's health program, $21,476 for added costs of reoccupancy of the headquarters building, and $172,724 for meeting work loads in central administrative services which were not fully developed in the 1947 annual estimates as submitted by the Agency.

Even before this work is transferred to them, they are asking for more money for administrative costs and plans in relation to study, and so forth. I just wanted the record to show that before these plans were prepared and presented to us, the Federal Securities Agency had already asked for more money.

The CHAIRMAN. Without objection the document will be included in the record.

(The document is as follows:)

[H. Doc. No. 525, 79th Cong., 2d sess.]

COMMUNICATION FROM THE PRESIDENT OF THE UNITED STATES TRANSMITTING SUPPLEMENTAL ESTIMATES OF APPROPRIATION FOR THE FISCAL YEAR 1947 IN THE AMOUNT OF $4,179,600 FOR THE FEDERAL SECURITY AGENCY

THE WHITE HOUSE, Washington, April 4, 1946.

The SPEAKER OF THE HOUSE OF REPRESENTATIVES. SIR: I have the honor to transmit herewith for the consideration of Congress supplemental estimates of appropriation for the fiscal year 1947 in the amount of $4,179,600 for the Federal Security Agency, in the form of amendments to the Budget for said fiscal year.

The details of these estimates, the necessity therefor, and the reasons for their submission at this time are set forth in the letter of the Director of the Bureau of the Budget, transmitted herewith, in whose comments and observations thereon I concur.

Respectfully yours,

HARRY S. TRUMAN.

The PRESIDENT,

The White House.

EXECUTIVE OFFICE OF THE PRESIDENT,

BUREAU OF THE BUDGET, Washington, D. C., April 3, 1946.

SIR: I have the honor to submit herewith for your consideration supplemental estimates of appropriation for the fiscal year 1947 in the amount of $4,179,600 for the Federal Security Agency, in the form of amendments to the Budget for said fiscal year, as follows:

FEDERAL SERURITY AGENCY

PUBLIC HEALTH SERVICE

On page 147 of the Budget, column 2, increase the amount of the estimate for "Hospitals and medical care, Public Health Service" from "$19,185,900" to "$20,354,900"

(increase) - $1, 169, 000

-

The increase recommended is to provide for increased expenses due to additional patients, increased cost of food, increased equipment requirements; and to take care of errors and omissions in the 1947 annual estimates as submitted by Public Health Service.

On page 151 of the Budget, column 2, increase the amount of the estimate for "Commissioned officers, pay, and so forth" from "$5,267,300" to "$5,318,400"

(increase) $51, 100

On February 4, 1946, a table of allowances for foreign service for commissioned officers was approved, pursuant to the Public Health Service Act and Executive Order 9655. This estimate is to cover costs of such allowances.

On page 153 of the Budget, column 2, increase the amount of the estimate for "Salaries and miscellaneous expenses" from "$2,225,000" to "$2,509,200"

-(increase) - $284, 200

The increase recommended includes $90,000 to provide a staff for study and administrative planning in relation to the President's health program, $21,476 for added costs of reoccupancy of the headquarters building, and $172,724 for meeting work loads in central administrative services which have arisen in connection with the expanded agency activities and which were not fully developed in the 1947 annual estimates as submitted by the Agency.

SAINT ELIZABETHS HOSPITAL

On page 161 of the Budget, column 1, under the head "Saint Elizabeths Hospital, Federal Security Agency," line 28, after the words "medical library;" insert "not exceeding $75,000 for transfer to the Federal Works Agency for expenses incident to a survey of the buildings and grounds of the hospital;" and increase the amount of the estimate from "$2,592,000" to "$2,667,000"(increase) - $75,000

The additional amount is to permit a complete survey of existing facilities by the Public Buildings Administration, including a study of the requirements with a report giving recommendations for demolition, renovation, and new construction with a schedule suggesting a construction program.

SOCIAL SECURITY BOARD

On page 165 of the Budget, column 1, increase the amount of the estimate for "Salaries, Bureau of Old-Age and Survivors Insurance" from "$21,039,000" to "$22,987,000"

- (increase) - $1,948, 000

This amount is to meet increased calculated costs by reasons of the reduction in the workweek, to process backlogs to be carried over from the fiscal year 1946, to provide the amount necessary to carry on an annual basis in fiscal year 1947 statutory promotions granted in fiscal year 1946 to military and war service employees who have returned, and to provide for a limited number of field offices required by space limitations and substantial load increases.