2/26/62

Gentlemen:

For those of you who have had time to review the
hearings of our Committee, anc to those of you who
will read them in the nesr future, I say to you that
there are many statemonts made by members of the
Committee, particularly myself, and answers by the wit-
nesses, relative to the establishment of reserves by
the Director of the Bureau of the Budget. Unfortunately,
the law gives the Director that power, but let us
examine some of the facts of the situation.

The Bureau of the Budget was established by law and
was given the responsibility of preparing the budget
for the President, and the law further gives the Bureau
the power to revise, reduce, or increase the estimates
of the several Departments and Esteblishments. The
Bureau was also given the power to make detailed studies
of the Devartments and Establishments for the vurpose
of enabling the President to determine what chenges
should be made in: 1. The existing organization, activities,
and methods of conducting the business of such Departments

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or establishments; &. The anpropriations therefore; 3d.

 

The assignments of perticuler,to varticular services; and
1, The regrouving of services,y Reports of studies made

these activities are to be trensmitted to Congress
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by the President with his retommendations.

The Bureau was also empowered se-that-£6-ean

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disekarge with authority to require the Department

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and Establishments to furnish such information as it
may from time to time require. Its employees, when
duly authorized, shall also heve the power to
examine any books, documents, papers, or records, of
such Departments or Establishments.

In substance, the Bureau of the Budget was set up as an
arm of the Presidentsfor centralized fiscal menagementf.
Through its control over budgeting, the Bureau is in a
key position to detect weaknesses in the orgenization
and functioning of the various departments and egencies,

to make recommendations to the President, the

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and
Congress, and the Departments, in the interest of

economy and efficiency. A more detailed statement
concerning the overall responsbbilities and purrose of the
Bureau of the Budget can be found in a report prepared

by the Steff of the Committee on Government Operations

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United States Senate, and dated February 13, 1961. It
Bocument #11, 87th Congress.

This, gentlemen, gives us some idea as to the scope
and responsibilities of the Bureau of the Budget.

Another vertinent statement is found in a Report

to the President by the President's Advisory Committee

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on Manegement, made in December, 1952:

"Good meneagement requires a continuing
supoly of canable people and provision
for their training, development, and
advancement to positions of larger re-
sponsibility. It recuires ancorganigzetion
that allocates responsibilities clearly
anc that identifies and fosters major
curposes by appropriate linking of closely
releted ectivities necessary to their
accomplishment. It requires management as well
as progrem staff suprort for exectuvies
ene a readiness to invest money to that end
. what is too often a tar@et for
sconom! zers complaining of "unnecessary
overhead." It requires the conscious
attention of executives up anc down the
line, and sustained effort by their aides,
to Gevelop specific programs for management
improvement and a system of inspection end
review of results, and to reward procress
when it is made. It recuires a close integration
of program and housekeepins activities. It
requires a progressive spirit as well as
form and system; lip service is not enough.
fnergy by itself is no substitute for an
under s standing comprehension of problems to
be met, or for personal dedication to their
solution. Given all three, plus some skill
in organizing things and leading men, good

management is the result."

    

Keep in mind the tremendous responsibility that is

vested in this Bureau of the Budget; also keep in

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mind that even before Congress has completed its actions

on appropriations bills, this Bureau is beginning to

plan the placing of some of the moneys in reserve so that

they cannot be expended for the purposes for which we
in Gongeress think they should be. This past year,

millions of dollars authorized by Congress for health,
educational, and other types of humaniterian vrogrems,
were placed in reserve by the Bureau of the Budget.
OF course this Committee objects to such ection. The
Bureeau of the Budget does not hear from the leading
professional peoole in the several fields afféetbed
as we do in Congress. Our Committee hears testimony from
the leading authorities on heart, cancer, arthritis,
end other illnesses, for which there is no perfected
treatment. There ere meny mysteries yet to be solved
in the heslth field, and when you sit in hearings
for several weeks listening to these exverts testify
about the need for additionsl funds, and then have a
group of desk sergeants second-guess you, of course
we feel hurt, not only our price but we ere nurt because
it is devriving the Nation of needed resources.
Now, let me give you a little more of the seriousness
of tois anoraisal - this second-guessing appraisal by
he Bureau of the Budget. This Bureau nas become so
efficient that it hendled the Government Expenditures
Budget for the year 1952, totalling $65,300,000, with a

staff of 515 veople;: now, somes twelve yeers later, the

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estimated budget for 1963 is 92 and 1/2 million, and

guess wnat the staff is for the Bureau of the Budget
for that year - se total of 465, a reduction in manpower

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of some 52 jobs to hencle a budget of 27 more million
dollars, and of course you gentlemen know that this
budget total is not the final word because the back-
door budgeting has crept into the picture in 1965 to a

much greater extent than @misted in 1952.

Certainly the Bureau of the sustwe Budget is not

 

treating itself anywhere neer as well 28,8 number or
Federal agencies. But how can it carry out the
resvonsibilities I heve enumerated with the small staff

in 1966¢% How can it intelligently

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-ojected for
noreise anticipated appropriations for reserve
purposes? How can it carry out its responsibilities
for mating recommendations to the President, to the
Congress and the Departments, in the interest of economy
and efficiency? How can it appreise the techn¥logicel
changes and the use of electronic data computing
machines and all the mass of punch-cerd systems that
are being fostered on to the agencies of Government
by efficient salesmen of the companies concerned?
With all we heer about scientific processes being used

in connection with the formulation of the budget estimates
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I cannot hely feeling strongly that the rule of thumb

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technique clays a Beery part in the finel outcome.
I believe the Bureau of the Budget should discontinue

its practice of forcing the Executive branches to agr
to the establishment of reserves until they are adequately

equipped with steff and knowledge to superimpose their

    

  

    

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feeling “het @xists among our Committee members when the
action of Congress is supreme-courted by a group of
sk sergeants. It is my personal recommendation thet
the Bureau of the Budget submit to the Congress a budget
for its own needs which would enable it to assume the
juties which have been delegsted to it by the Conpress
and by the President of the United Statese Until this is
accomplished, that it refrain from itsarbitrary et te
establishine—of reserves depriving the Nstion of much-
needed resources whitch the Congress recognized a

definite need for.

In closings, I recommend thet the Bureau of the Budget
take a look at the President's Advisory Committee

Gommittee'!s Final Renort on Management, cated Dee. 1lv5e,

and make a self-appraisal as to how effectively they heave
earried out the recommendations contained therein. They

may come to the conclusion that so much time has passed

there is need for another revort: if so, let's have it

 

end let's get the Bureau of the
Total Government Expenditures

1952 65,303,000
53 74,120,000
54 67,537,000
55 64,389,000
56 66,224,000
57 68,966,000
58 71,369,000
59 80,342,000
60 76,539,006
61 81,515,000
62 89,075,000 est,

63 92,537,000 est.
1952
1953
1954
1955
1956
1957

1958

Total

Appropriation

3,362,000
3,461,200
3,412,000
3,382,500
3,349,000
3,935,000
4,205,000
&, 205,600
4,665,000
5,426,000
5,517,000

5,677,000

actual

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at

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estimated

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S15
485
44,6
432
422
456
451

433

464
463

463

actual

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estimated

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