President Hoover, stated on behalf of the Commission as to its forthcoming recommendations for reorganization:

Many of the most important can probably be accomplished only if the Congress reenacts and broadens the power to initiate reorganization plans

HOW H. R. 1569 DIFFERS FROM THE 1945 ACT

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I would now like to discuss the principal respects in which this bill differs from the Reorganization Act of 1945. In the first place, the bill contains no termination date and, therefore, is permanent legislation. I believe I have already made clear the reasons why I consider this change desirable. Reorganization is a year-in, year-out problem of the executive branch. Even if a satisfactory, comprehensive reorganization could be achieved at any one time, it would be only a short while before revisions would be needed to keep pace with changing work requirements. An organization adapted to one set of conditions may not be satisfactory for another. A new national objective, such as social security, national defense, European recovery, or the stabilization of the domestic economy, produces new programs and new combinations of old programs and demands changes in organizational arrangements. Consequently, a practicable, expeditious method of reorganization is needed at all times.

A second change is the elimination of the provisions of section 5 of the 1945 act exempting various agencies and functions in whole or in part from the reorganization plan procedure. The utility of the 1939 and 1945 acts was considerably reduced by such limitations. The 1939 act exempted 21 agencies altogether. The 1945 act exempted 11 designated agencies in whole or in part as well as all other agencies, the status of which had been established by statute since January 1, 1945. In addition, it contained a provision with respect to the quasi-legislative and quasi-judicial functions of independent agencies which made it very difficult or impracticable to deal with many of these agencies by reorganization plan.

Both the President and the Commission on Organization of the Executive Branch of the Government in their communications to the Congress on reorganization legislation have stressed the importance of avoiding such restrictions and exemptions. The President pointed out that a limited exemption may render impractical a needed reorganization affecting numerous agencies or functions other than the one specifically exempted. The Commission indicated the undesirability of exempting regulatory commissions since certain of their functions are not regulatory in character and may be more effectively performed by other types of agencies. Both President Truman and the Commission stated that the proper protection against undesirable changes of organization lies in the power of the Congress to reject any reorganization plan by simple majority vote of the two Houses. Such restrictions and exemptions in effect prejudge organizational problems which often cannot be foreseen or fully appreciated when the legislation is adopted. They deprive the President and the Congress of the opportunity even to consider reorganization proposals which, if they could be examined on their individual merits, might be found to be very advantageous.

H. R. 1569 also differs from the 1945 act in that it somewhat broadens the types of changes that may be made by reorganization plan. The

1945 act authorized the transfer, consolidation, coordination, or abolition of agencies and functions. H. R. 1569 adds to these the authorization of any officer to delegate any of his functions. The purpose of this addition is to make it possible to include in reorganization plans provisions which will enable the President and other top-level officials to relieve themselves of many of the petty routine matters now requiring their personal action.

Obviously, the time of top officials should not be consumed by petty actions that could as well be taken by other officers under their supervision. Yet there are many such matters which have been vested by law in the President or department or agency heads in such a manner that the Comptroller General or the courts have held they cannot be delegated. For example, the decision of a Coast Guard retiring board for the retirement of any commissioned officer, warrant officer, or enlisted man of the Coast Guard requires the approval of the President. The statute books contain literally hundreds of provisions requiring the action of the President or of department and agency heads on matters of very limited consequence which properly should be finally disposed of by subordinate officers.

Another change eliminates the prohibition against the establishment of a new executive department by reorganization plan. No real purpose has been served by this limitation. Agencies have been created by reorganization plan which were departments in all but name. Undoubtedly the Federal Security Agency would have been set up as a department had it not been for this restriction.

The bill also extends the reorganization plan procedure to the government of the District of Columbia, except for its courts. This will permit improvements to be made in the cumbersome administrative structure of the District and also the working out of adjustments in the division of activities between District and Federal agencies.

The bill, however, retains the prohibitions of section 5 (a) of the old law against abolishing or transferring an executive department, continuing any agency or any function beyond the period authorized by law for its existence, or authorizing any agency to exercise any function not expressly authorized by law.

The reorganization-plan procedure provided by this bill affords a tested and proved method of improving the organization of the executive branch. The large number of changes effected under the 1939 and 1945 acts demonstrates that it works, and the importance of many of these changes proves the value of such legislation. Furthermore, the character of the plans submitted, the care with which they have been reviewed by the Congress, and the acceptance which their provisions have won should dispel any fears of possible misuse of the procedure. All this, I believe, clearly points to the desirability of legislation to make the reorganization-plan procedure continuously available for dealing with organizational problems throughout the executive branch. H. R. 1569 would do this and would represent a definite improvement over the 1945 act.

Finally, let me emphasize the importance of early enactment. The Commission on Organization of the Executive Branch of the Government will be presenting its recommendations within a few weeks. Undoubtedly, the reorganization-plan procedure provides the only feasible method of accomplishing many of the desirable changes which

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should flow from the Commission's work and from the President's studies of needed improvements in the organization of the executive branch. Since plans must lie before the Congress for 60 days of continuous session in order to become effective, and some time must be allowed for the preparation of plans, it will be impossible to utilize the reorganization-plan procedure this year unless the necessary enabling legislation is adopted early in the session.

The CHAIRMAN. On page 6 of the bill, Mr. Lawton, would you explain to us the purpose of a limitation relating to the government of the District of Columbia?

Mr. LAWTON. The government of the District of Columbia is not an agency of the executive branch, and we have included it in this bill as to the transfer of functions within the District of Columbia, or between the District and Federal agencies.

This limitation provides that the character of the municipal government cannot be changed. The whole municipal government cannot be transferred, nor its functions, but simply where there is a function in the Federal Government which had better be in the District, or one in the District that had better be in the Federal Government, those can be shifted.

Also, the internal structure of the District of Columbia could be modified, changed, or altered by reorganization plans with the exception of the courts.

The CHAIRMAN. On page 8 of the bill there is a reference to the General Accounting Office in section 7, meaning that the President may not propose a reorganization of that Office?

Mr. LAWTON. There is.

The CHAIRMAN. Under the definition of agencies?

Mr. LAWTON. It is excluded from the definition of agencies because the General Accounting Office was stated in the 1945 act to be an agency of the legislative branch, and this proposal deals with the executive branch.

Mr. HARDY. In that connection, may I ask a question?

What about the Interstate Commerce Commission? That has been eliminated from the exemptions in here. Is that considered an executive agency or an agency of the Congress?

Mr. LAWTON. It is considered an executive agency as far as this bill is concerned.

The CHAIRMAN. And is there any inconsistency between section 4, paragraph 4, providing for the transfer of unexpended balances and section 10, which provides that unexpended appropriations shall be impounded and returned to the Treasury?

Mr. LAWTON. Mr. Chairman, in the first instance when a transfer is made it will be necessary to transfer such funds as may be needed to operate that agency in its new location, or the function in its new location. Any savings over and above that amount would be impounded and returned to the Treasury under the provisions of section 10.

The CHAIRMAN. Did the Reorganization Act of 1939 contain the same rules of procedure as are contained in title II of this act?

Mr. LAWTON. Yes; the same rules of procedure were carried through the 1939 and 1945 acts.

The CHAIRMAN. What will be the effect of not exempting any executive agency from the operation of the act?

Mr. LAWTON. It will permit the President to propose to the Congress reorganization plans dealing with the entire executive branch. It will not restrict or prejudge organizational issues until the study of the President and his recommendations are laid before the Congress and the Congress has 60 days in which to consider them on their merits rather than to make an exemption at the time regardless of what justification or what need there may be for reorganization of any given agency of government.

Mr. HOFFMAN. On page 2 of your statement you say:

Government is a dynamic institution. Its administrative structure cannot be

static.

How about the principles back of it? Are they not, from a practical standpoint, static?

Mr. LAWTON. The principles back of government?

Mr. HOFFMAN. Yes; as distinguished from the administrative

structure.

Mr. LAWTON. Yes; the principles, or if you say the functions of government. The things that government does, are the things that Congress decides it should do. This plan here deals only with the location in which those things are done.

Mr. HOFFMAN. Is that true?

Mr. LAWTON. Yes. There is no provision in this bill at all to create any functions.

Mr. HOFFMAN. Now, down toward the bottom of the page, you say:

A whole new set of Federal problems and activities are presented. We have had practically those same problems before in every depression that we ever had, in 1873 and in 1893.

Mr. LAWTON. You did not have them to the same extent.

Mr. HOFFMAN. In principle we had the same things-we have always had them?

Mr. LAWTON. You have had depressions and panics before.

Mr. HOFFMAN. And the same problems were presented that came with this last war.

Mr. LAWTON. No; I do not quite agree with that.

Mr. HOFFMAN. In what way did they differ from those that came along after the War between the States?

Mr. LAWTON. I thought you meant during the war, sir.

In the last war we devoted a great deal more of our total productive capacity, our total manpower, to the winning of the war and to the conduct of the war. We had a great many more governmental controls and things of that sort.

Mr. HOFFMAN. That may be true, but what I mean is we had the same problems; they may have differed in degree, but in principle they were the same as those that came to us before and after other depressions and other wars.

Mr. LAWTON. Of the same general character, but different in degree. Mr. HOFFMAN. Over on page 4 of your statement you call attention to the fact that certain improvements have been made in organization in the executive departments by the Congress, but you urge against that method by the statement:

Few of the needed changes can command the popular interest and attention required to obtain enactment in competition with the hundreds of other matters before the Congress.

Assuming that statement to be true, what you propose is that the executive branch of the Government shall send these plans to the Congress and then within 60 days the Congress must take affirmative action if they disapprove of them.

Mr. LAWTON. Congress must act; yes.

Mr. HOFFMAN. Why would not the same reasons that you advance a lack of popular interest and attention-apply to the consideration of the reorganization plans if the change were suggested by the Congress itself?

Mr. LAWTON. Well, the reason is that if the change were suggested by the Congress itself and there was a lack of popular interest, you would not get any action at all.

Mr. HOFFMAN. Why do you think you would get more popular interest if it was suggested by the administration?

Mr. LAWTON. We do not claim that you would get more popular interest. We do claim you would get action regardless of the fact the material covered by the reorganization plan might not be of striking national interest, but simply a better method of administering certain functions of government within existing agencies.

Mr. HOFFMAN. A little further down on the same page, pointing to some of the benefits that were obtained out of the old Reorganization Act, you say:

During the 4 years that these measures were operative, more than 120 changes in organization were made under this procedure; 24 independent agencies were eliminated by transfer to an executive department or major agency or by abolition.

Now, as a matter of fact, the number of Federal employees increased, did it not, over that period of time?

Mr. LAWTON. The number of employees does not have so much to do with the number of agencies involved, or the organizational structure. It has to do with the functions performed.

The Post Office Department has doubled its employees over the past 10 years, but it is doing more than double the amount of business that it did at that time.

The Veterans' Administration is dealing with 15,000,000 veterans now, and they were dealing with 5,000,000 veterans before.

Mr. HOFFMAN. The fact still remains that in spite of all these changes, 120 in organization, the number of Federal employees has increased.

Mr. LAWTON. The number of Federal employees increased up to a peak during the war. It has decreased, of course, over 1,500,000 since that time.

Mr. HOFFMAN. But we still have more than we had in 1939.

Mr. LAWTON. Definitely.

Mr. HOFFMAN. And that, you say, is due to an increase in business. Mr. LAWTON. An increase in Government functions. The National Defense Establishment has 925,000 civilian employees; the Post Office Department nearly 500,000, and the Veterans' Administration over 200,000.

Seventy-five percent of the employees are in those three agencies. Mr. HOFFMAN. Over on page 7 of your statement you say:

H. R. 1569 adds to these the authorization of any officer to delegate any of his functions.