Dr. SHEARON. The new administration is stuck with it. What are they going to do about it? Most of the expenditures are statutory under the welfare programs of social security. As I say, they cannot change it.

I had a letter from Congressman Velde the other day, and he said, "Well, we are stuck with it; we have got to put those appropriations through," and to a large extent that is true. But in addition

Senator DWORSHAK. That is only in the matter of matching funds with States.

Dr. SHEARON. That is mostly matching funds in the charity programs, but remember the Federal Government in matching grants is spending now more than it did in the depths of the depression, and we are supposed now "to never have had it so good," high employment, high wages, and yet we are spending more-$2.2 billion from the Federal Government-more than they spent in 1935 in the depth of the depression, with all the alphabet agencies. At that time, you remember, Harry Hopkins said in 1935 that the Federal Government was going to get out of this relief business, but it did not get out. Instead, it passed the Social Security Act, and it went in perpetuity into the relief business.

Senator DWORSHAK. Well, your remarks should be directed to the Congress.

Dr. SHEARON. To the Congress? I wish I had a chance to get on the floor, as a matter of fact.

But now, then, in addition to these expenditures for the FSA, from $743 million in 1946 to $2.2 billion in 1953, appropriated by Congress, Congress did not restrain the FSA either in the House or the Senate. Appropriations have trebled since 1946, 7 years only, and they are just getting their feel on the programs.

In addition to that, they have started from scratch with this oldage and survivors insurance trust fund, and they are now spending about $2 billion a year over the $2.2 billion appropriated by Congress, so that it is a very disturbing agency.

As a man from the Treasury said, "We are a collecting agency, and the FSA is a disbursing agency"; that is all it is, it is not welfare. They do not administer any of these programs at the Federal level except the old-age and survivors insurance, and that is only the giving out of checks; they are not administering a welfare program. All that is done at State and local levels. Why call it a welfare agency? Why not call it a Social Security Department?

Senator SMITH. May I include in the record at this time under section 7, Reorganization Plan No. 1, under "Administrative Services: Provided, That no professional or substantive function vested by law in any officer shall be removed from the jurisdiction of such ollicer under this section," which would mean that these things that you are fearing cannot be done because of any reorganization plan. It must be done by law; is that not true?

Dr. SHEARON. Yes. I am so glad you brought that up because that brings up this other very important point. The Federal Security Agency was created in 1939 without any statutory authority to administer anything, merely as a holding corporation over the Office of Education, Social Security, and the Public Health Service. Paul V. McNutt had almost no staff and almost no functions. FSA was

like an overall umbrella, and what has happened since that time? You know very well that the authority of the Commissioner for Social Security, who was a very important man and who had the control of this very large spending program, which now amounts to $4 billion a year-and that isn't hay, even in Washington-was taken away from him by statute and given to the Federal Security Administrator.

The substantive powers of his whole administrative program on the old-age insurance and all the charity programs, 80 percent of the Federal Security budget, were moved from Commissioner Altmeyer up to the Federal Security Administrator.

Of course, in some way Congress is going to find a way to get substantive control over education and health for the Welfare Secretary. They have gotten the big thing already-social security. It is the substantive powers that have been given to the FSA Administrator. I well remember when Oscar Ewing was called in to testify on compulsory health insurance, on the compulsory health insurance bill, and a Senator asked him, "Where is the final authority in this bill?" Oscar Ewing said, "The final authority is vested in me." That is my fear and the fear of many other people.

Senator DwORSHAK. He is not in office now.

Dr. SHEARON. It does not make any difference which transient politician is at the head. They come and go. There was McNutt, there was Miller, Oscar Ewing. He was hated, and I fought him a lot, but I do not think it was his fault; he was just getting stuff handed to him that he knew nothing about.

You talk about cleaning out the few administrators at the top. That does not do the job, because the people who write the legislation which is given to you all along the line in Congress, they are not in the policy jobs; they are down the line. They are the technical people who have written, for instance, all the compulsory health insurance bills; who even now are feeding to Representative Kean in the House, a Republican, the disability program that he is trying to put through, plus a program to take in 10 million more still-free Americans and force them into a compulsory Socialist social-security program-10 million persons now free.

Senator DwORSHAK. What has this to do with the reorganization plan?

Dr. SHEARON. It has everything to do with it because the people right there in the FSA down below the policy level will not be changed by changing the people at the top. The few people at the top-the policy people do not understand these things which are highly technical. The legislation is written, the research is written by people below the policy level. I should know.

I want to give this as an illustration. This book, Social Security Financing, is being sold now under this administration. It is a Truman document; it was written, prepared in 1951 and 1952. The foreword is dated in November 1952. You can now buy it at the Government Printing Office for $1. It is a dissertation on the beauties and the desirability of redistributing wealth and income in the United States via the Social Security Act. The man in whose bureau this work was done is still, right now in these first 60 days of a new administration, having his same secret meetings with the same people who have been

engineering these things all the time; yet he is not in the top policy position.

Senator DwORSHAK. What is his name?

Dr. SHEARON. Isidore Sidney Falk; his name is right here.

You just ought to read this book; it would really make your hair stand on end because this is being subsidized by the taxpayers of the country and printed by the Government Printing Office for $1 and is opposed to everything that the conservative Republican administration believes in, if I understand what they believe. I voted for Eisenhower in the belief that we ought to have all this business cleaned out, and your elevating the FSA Administrator to a Cabinet office is not going to help one little bit. As a matter of fact, you are going to make it a lot harder.

Senator SMITH. Did you identify the book for the record?

Dr. SHEARON. Yes; Social Security Financing, Bureau Report No. 17, on sale for $1 at the Government Printing Office. They expect to do a big rushing business because they offer you a hundred copies for $75, a 25 percent discount. They expect to influence the thinking of this country to get this out to insurance companies, money-minded people, and Members of Congress undoubtedly.

It is a Truman document and just as bad as Common Human Needs which said the public-assistance programs were to work up to the Socialist state. You just read page 135 here and see what they are working up to.

I wanted to bring up another aspect of all this. I do want you to understand that, if you have not been inside the FSA, you do not know what pressure it puts on the public-health people. They are an entirely different class of people from the social-security staffs.

The social-security people include actuaries, statisticians, welfare workers, research people, and so on. The Public Health Service-well, there is a different world. They are physicians, research people, biochemists, students in cancer, sanitarians, and so on; they are concerned with health and medical problems. The Public Health Service is a very, very fine organization.

They are afraid of this reorganization; they do not dare to say anything. They have got to go along with the FSA and with the administration, whichever it happens to be, and they are in a tough

spot.

There was Dr. Parran, a Democrat, appointed by Roosevelt and eased out under Truman because he dared to say he did not believe in compulsory health insurance. Isn't that a terrible thing to do?

Now, then, I want to point out that there is a total ignoring of the recommendations of the Hoover Commission. I have a very high regard for ex-President Hoover, but I am sure he is extremely remote from these things. He lends his name to things. I admire him greatly. He would lend his name to the Hoover Commission, but the work was done by the staff and the task force of the Commission. Hoover himself did not do it, and I would like to bet that Hoover did not have a chance to know the inside workings of Federal Security. Anyway, he may have known more than I thought he did, because the Hoover Commission made this recommendation for an independent medical agency. I really would like to have this—it is only two pages-if it is agreeable to you, Madam Chairman, put into the record at this point. It is a supplemental report on an independ-

ent medical agency. It was gotten out 3 months after their first report on the Federal medical services, and this little short one

-

Senator SMITH. It will be included in the record if it is germane. Dr. SHEARON. If I had the time, I would like to read it, but I am not going to. It has so much in a very short space, and they give just about six reasons why health would be submerged.

Senator SMITH. Without objection, it will go in the record. (The document referred to follows:)

TASK FORCE REPORT ON FEDERAL MEDICAL SERVICES

Supplement to Appendix O-prepared for the Commission on Organization of the executive branch of the Government, March 1949

LETTER OF TRANSMITTAL

WASHINGTON, D. C., March 5, 1949.

The honorable the PRESIDENT OF THE SENATE.

The honorable the SPEAKER OF THE HOUSE OF REPRESENTATIVES.

DEAR SIRS: In accordance with Public Law 162, approved July 7, 1947, the Commission on Organization of the executive branch of the Government submits to the Congress herewith a supplemental report on the medical services of the Federal Government.

The Commission's own report on Federal medical services is submitted to the Congress separately.

Faithfully,

HERBERT HOOVER, Chairman.

SUPPLEMENTAL REPORT ON AN INDEPENDENT MEDICAL AGENCY

Proposal to set up a United Medical Service Organization as an independent administration reporting to the President, instead of as a bureau of a department of health, education, and security

As our committee had been instructed to assume that any consolidated health organization would be a part of a new Cabinet-level department embracing health, education, and security, which the Commission would recommend, our main report contained on page I the following statement: "The above instructions excluded from our consideration the question as to whether a separate cabinet department would be established for health alone, as urged by professional groups. However, should this be done, the organization which we are proposing would be adapted to such plan with only a few changes in nomenclature."

Thus, we answer in the affirmative the question as to whether the organization, which we originally designated as the National Bureau of Health, could function as an independent department or agency.

It remains to consider whether such an alternative would be preferable. This question has been fully considered by our committee, and we have reached the conclusion that such an independent organization would be preferable to placing this function in a larger department, as the Commission originally proposed. In favoring this, we recognize that such an organization would create some additional problems. For example, the administration of health and welfare require close coordination in certain areas. Their separation would require an adjustment of the dual functions of the Children's Bureau and of the Office of Vocational Rehabilitation. These, however, can be solved without undue difficulty.

The advantages of an independent agency are:

(a) The health agency, if submerged within a multipurpose department, would be more likely to find its health functions impeded by collateral considerations pertaining to welfare and insurance.

(b) Appropriations for health should, if possible, be clearly identified as such and not confused with those for social security, welfare, or other social programs. (c) Other departments, such as the Armed Forces, using the medical service agency would be concerned only with its health functions as such and would thus be protected from any collateral and irrelevant considerations having to do with welfare, social security, etc.

(d) The special personnel policies which we have recommended in our main report (sec. XI) could be established with much greater freedom and better success for an independent agency than they could be for one of three bureaus standing side by side in a single department. The new plan would, therefore, greatly facilitate obtaining personnel of the highest quality for the key positions. Under the previous plan, this was a problem which occasioned serious concern in our minds because of the contrast between the great responsibilities of the director general and the heads of his three main divisions (especially the Medical Care Division) and the relatively limited governmental position and pay of the head of a bureau and the chiefs of its subordinate divisions. We believe, therefore, that the new proposal would go far to solve this problem which we regard as the most serious affecting the original plan.

(e) The head of such an independent agency should be assisted by an advisory committee, representing the several departments and agencies which would be the principal users of medical services, such as the Medical Departments of the Army, Navy, and Air Force, the new proposed Department of Welfare, and the Veterans' Administration. With the agency independent, it would be more flexible to adapt its services, with the assistance of such advisory committee, to the needs of the several interested departments and agencies in its medical-care facilities, in the training and staffing of professional and technical personnel, in its public-health functions, and in other ways.

In considering the establishment of such an independent health agency, our committee again calls attention to a most important consideration pointed out in chapter III (p. 26) of our main report. The agency should be headed by a professional career director general. Under the new plan he should report directly to the President, and should, in the nonmilitary Federal medical organization, be the highest ranking physician in the Government. The supreme medical importance of the position of the Director General should command, irrespective of all other considerations, the ablest medical and health administrator whose services can be obtained by the Government.

For these reasons, the committee views the present proposal for an independent organization as a significant improvement over the previously submitted plan. TRACY S. VOORHEES, Chairman (For the Medical Services Committee).

FEBRUARY 8, 1949.

Mrs. SHEARON. I will leave it with you. I would suggest putting in at least those paragraphs (a) through (e), and I am sure you will find them very good.

There is nothing personal in this. I do not know Mrs. Hobby. I have been down in Texas for a week, and that had nothing to do with her. The speeches were part of a tour planned last fall. I was in Houston and I learned a great deal. I think it would pay this. committee to send an investigator to Houston to find out some of the things that I found out. I am not putting them in the record. They would be secondhand for you, but I think it would pay you to do that.

Now, in addition to that, I do raise this question about competence. You take the Department of Agriculture. Your Secretary of Agriculture knows something about agriculture; your Attorney General in the Justice Department is a skilled lawyer; the Labor Department is headed by a representative of labor; but unfortunately when it comes to social security, health, and education, they apparently have been able to find no person with a common denominator of knowledge in these and diverse fields. Federal Security Administration comes up with someone who is not qualified in any of the programs, but is purely a political appointee. I think that is extremely bad, and I believe that is one reason why the Hoover Commission finally came up with a recommendation that all the health functions of the Government, which are so entirely separate from mere disbursing of money functions, should be in a separate medical agency, and that the social security should be in an agency by itself. There is great logic in that.