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cipation in the formulation of Treasury tax policies. It would include legal assistance in the preparation and execution of Treasury financial operations and of economic programs. This involves careful interpretation of the laws and regulations applicable to Government finance and public credit. We assist with problems having to do with gold and silver transactions, foreign aid programs, and prepare opinions on major questions for the guidance of administrative officers. We represent the Department in various of these diverse fields of Treasury activity, and also provide departmental representation on several interdepartmental committees and interagency groups.
Thirdly, with respect to legislation, the general counsel is responsible to the Secretary for all legislative matters affecting the Treasury Department. The office drafts or assists in the drafting of Treasury Department legislative proposals for submission to the Congress. It also gives technical drafting assistance to congressional committees, the Bureau of the Budget, and other executive agencies. It provides the Treasury Department laison for all legislative matters. This includes the receipt and handling of all congressional and Budget Bureau inquiries and requests for reports on proposed or pending legislation. The volume of this work has been increasing every year and reached a new peak in 1949. For the first session of the Eightyfirst Congress we have received 871 congressional requests for reports on legislation and 235 requests from the Bureau of the Budget. Replies to approximately one-half of these requests have been prepared in the office of the general counsel. The others were referred to particular bureaus and offices for the preparation of reports which are returned to the office for review and necessary clearance. Of the requests received, 368 related to bills in which the Treasury Department was interested primarily because of taxation provisions. The other 738 requests had to do with bills involving fiscal, monetary, banking customs, Coast Guard, narcotics, liquor, enforcement, claims, administrative, and other legislative subjects. Many legislative matters require considerable study and research, consultations both within and outside the Department, coordination, and the drafting of amendatory language. One bill frequently will affect the interests of a halfdozen Treasury bureaus, divisions, and offices. The office also has continuing responsibiltiy, of course, to keep the Secretary and other Treasury officers informed of legislative developments of interest to the Department.
In connection with our legislative activities, the attorneys in the office work closely with congressional committees, the House and the Senate Legislative Counsel, and the staff of the Joint Congressional Committee on Internal Revenue Taxation. They also work with private citizens and groups who wish to have the Treasury Department give consideration to their suggestions for legislation.
The Office has a substantial backlog of legislative projects to draft and bring to the attention of the Congress. Among other major legislative matters, substantial work is being done on technical amendments to the Internal Revenue Code, to prevent tax avoidance and alleviate inequities. Hundreds of changes in the code are being studied, including more than 25 major and 200 technical matters.
In regard to the fourth major category I have mentioned, the Office handles all the legal work for several of the operating bureaus and for certain Treasury offices. This in itself is a major undertaking. It
includes necessary legal work for the Fiscal Assistant Secretary and his immediate office, the Treasurer of the United States, the Bureau of Accounts, the Bureau of the Mint, the Secret Service, the Chief ('oordinator of Treasury Enforcement Agencies, the central personnel, budget, and administrative offices, and several other Treasury units. The legal work for these bureaus and offices is as diverse as the functions they perform and the problems they encounter. With respect to the Fiscal Service, for example, it has to do with the Treasury's vast financing, accounting, and disbursing functions; its public debt operations; the financing of Government corporations; and technical aspects of the receipt, custody, and distribution of public funds. Among other things, the office drafts orders, regulations, licenses, rulings, and interpretations relating to monetary, fiscal, and enforcement matters; examines indemnity and official surety bonds; and handles many legal problems which relate to the issuance, presentment, and payment of Government checks.
I should mention, in addition to the subjects I have already discussed, that the General Counsel's office will handle a number of miscellaneous legal matters on a regular basis. These include legal questions relating to the payment of Mexican and World War II claims awards; the enrollment and disbarment of customhouse brokers and of attorneys and agents authorized to represent claimants before the Department; pretrial work in certain types of litigation involving the Treasury Department or its officers; offers in compromise of general claims of the United States; Federal tort claims problems; and patent matters.
All in all, I assure you that the Office of the General Counsel has its hands exceedingly full. I should like to say, however, as one who has served as a Government attorney in several agencies for a period of 15 years, that the Treasury legal staff is an extremely competent one. It turns out a volume of highly efficient work which I think is out of all proportion to its size.
Analysis of appropriation base for fiscal year 1951
Total appropriation, 19:30..
services in excess of 52-week base------
opriation base for 1951-------------------------------Estimate of appropriation for fiscal year 1951.--
----- *328, 630
an 343,000 Yet increase from base for 1951..
14.350 Does not include anticipated deficiency for 1950 to cover cost of authorized pay
Comparison of estimate of appropriation for fiscal year 1951 with appropriation base
Mr. Gary. It appears that you requested $373,000 in 1950. The Congress appropriated $330,000. You are requesting $343,000 in 1951.
The appropriations for the Office of the General Counsel and the Tax Legislative Counsel were merged in the appropriation for the fiscal year 1948. They are still together, are they not?
Mr. Lynch. Oh, yes. The Office of the General Counsel includes the Tax Legislative Counsel. Mr. Gary. What is the reason for the increase of $12,000 over 1950)!
Mr. Lynch. Twelve thousand dollars is pay increases; $12.000 in the 1951 estimate.
NO PERSONNEL CHANGE
Mr. Lynch. No. The number of personnel is the same as for the fiscal year 1950. Pay increases, under Public Law 429, account for
$12,000. So the comparison, excluding that, is between $330,000 last year and $331,000 for fiscal 1951 to cover the same number of personnel.
Mr. CANFIELD). Mr. Lynch, you say it is a matter of deep concern to you that you are able to recruit and maintain the finest legal talent possible. I assume that the new pay scale is quite helpful in that respect, is it not?
Mr. Lynch. Yes, it is. And another factor is that right now, in contrast to the war years, we have excellent prospects coming in who are interested in joining the legal staffs of the Government. Of course, during the war periods, so much of the fine talent, as you would expect, was engaged in the military service; and then it took a little time after that for them to catch up and get through law school.
Mr. CANFIELD. You are not bothered or prejudiced by the rapid
Mr. Lynch. No, Mr. Canfield.
Mr. CANFIELD. You say that one of your legal duties is to assist with problems having to do with foreign-aid programs. Do you perchance directly aid any foreign goverrnments with respect to their monetary programs or policy?
Mr. LYNCH. No, sir. That is largely in relationship to the National Advisory Council, of which the Secretary is chairman, as you know. And that is a body to coordinate international fiscal, monetary, and lending policies.
Mr. CANFIELD. Your Office also drafts or assists in the drafting of Treasury Department legislative proposals for submission to the Congress. Can you tell us whether you are now preparing any draft for submission to the Congress of a bill to increase the statutory limitation on the public debt above $275,000,000,000 ?
Mr. Lynch. I know of none, Mr. Canfield.
AMENDMENTS TO INTERNAL REVENUE CODE
Mr. CANFIELD. Mr. Lynch, you testified that among other major legislative matters substantial work is being done on technical amendments to the Internal Revenue Code to prevent tax avoidance and alleviate inequities. You have in mind more than 25 major and 200 technical matters. Is this the proposal that the President has referred to?
Mr. Lynch. I would not say so. That is part of the continuing work that we have with respect to the more technical applications of the Internal Revenue Code. We have been hoping to have opportunity for the Congress to give attention to a number of those things, some of which are, I think, loopholes in the technical sense, while others are unnecessary irritants in particular situations. That is what we have reference to there principally.
Mr. Gary. Defects in the tax laws that have developed in the administration of the laws?
Mr. Lynch. That is right. We have a tax system that grew to such proportions during the wartime, and our experience with it has shown that on the technical side of its applications there are many places where there could be improvements that would help the administration of the tax laws and in many cases help the taxpayers as well.
That is not in reference to the major tax policies, as to which I would not feel it appropriate to speak.
Mr. CANFIELD. Then this approach may not be a part of what we might refer to as the President's recommendations which he has in mind making?
Mr. LYNCH. In that capacity, the function of the General Counsel's Office would be, as part of the staff of the Secretary, to give him such advice, assistance, and information as he wants. And by advice, I mean advice more along the lines of legal and technical matters.
Mr. Gary. The House passed a tax bill in 1948, a general revision bill, which did not pass until the last 2 or 3 days. It was not considered by the Senate. I assume that a great many of these technical changes were included in that, were they not?
Mr. LYNCH. That is right. Some of them were. And others were not given attention to; and then there were others that are more of an administrative character, Mr. Chairman.
Mr. GARY. And there has been some talk of the Ways and Means Committee considering another general revision bill in the near future?
Mr. LYNCH. That is correct. In addition to that, in this last session of the Congress there was passed an administrative tax bill which included seven or eight amendments, largely technical, for the purpose of easing administration. And that was just a culling of seven or eight proposals, out of a much more expansive list of changes of that character that we would like to have considered.
Mr. JOHNSON. Mr. Chairman, Mr. Carlock is present here, and he is prepared to discuss the item concerning damages. Mr. Gary. We are going back to that right now.
Obligations by objects Refunds, awards, and indemnities—1949, $68,893; 1950, $30,000; 1951, $30,000.
Mr. Gary. It appears that $30,000 was requested for this item for 1950, $30,000 was appropriated by the Congress, and $30,000 is requested for 1951.
Mr. GARY. Mr. Carlock, will you explain this item, please, sir? Mr. CARLOCK. This item is to pay damage claims under the Federal Tort Claims Act. That act was a part of the Legislative Reorganization Act of 1946 and gave the Government's consent to be sued for damages caused by the negligence of its employees, and also gave the departments authority to settle administratively claims of up to a thousand dollars.