"Finally, the new Office will continue the Legislative Reference functions now performed by the Bureau of the Budget, drawing together agency reactions on all proposed legislation, and helping develop legislation to carry out the President's program. It also will continue the Bureau's work of improving and coordinating Federal statistical services."

Domestic Council

After noting that experience had demonstrated the great value of a Cabinetlevel council as a forum for discussion and action on policy matters which cut across departmental jurisdictions, and, following a review of the composition of the Council, the President stated that the Council will be supported by a staff under an Executive Director who will also be one of the President's assistants; and, like the National Security Council, this staff will work in close coordination with the President's personal staff, but will have its own institutional identity. Referring to the need for continuity, the President stated that its establishment on a permanent, institutional basis will enable the development and employment of the "institutional memory" which is so essential if continuity is to be maintained, and if experience is to play its proper role in the policy-making process. Referring to the need for the Council, the President said:

"There does not now exist an organized, institutionally-staffed group charged with advising the President on the total range of domestic policy. The Domestic Council will fill that need. Under the President's direction, it will also be charged with integrating the various aspects of domestic policy into a consistent whole.

"Among the specific policy functions in which I intend the Domestic Council to take the lead are these:

-Assessing national needs, collecting information and developing forecasts, for the purpose of defining national goals and objectives. -Identifying alternative ways of achieving these objectives, and recommending consistent, integrated sets of policy choices.

-Providing rapid response to Presidential needs for policy advice on pressing domestic issues.

-Coordinating the establishment of national priorities for the allocation of available resources.

-Maintaining a continuous review of the conduct of ongoing programs from a policy standpoint, and proposing reforms as needed.

"Much of the Council's work will be accomplished by temporary, ad hoc project committees. These might take a variety of forms, such as task forces, planning groups or advisory bodies. They can be established with varying degrees of formality, and can be set up to deal either with broad program areas or with specific problems. The committees will draw for staff support on Department and agency experts, supplemented by the Council's own staff and that of the Office of Management and Budget.

"Establishment of the Domestic Council draws on the experience gained during the past year with the Council for Urban Affairs, the Cabinet Committee on the Environment and the Council for Rural Affairs. The principal key to the operation of these Councils has been the effective functioning of their various subcommittees. The Councils themselves will be consolidated into the Domestic Council; Urban, Rural and Environment subcommittees of the Domestic Council will be strengthened, using access to the Domestic Council staff.

"Overall, the Domestic Council will provide the President with a streamlined, consolidated domestic policy arm, adequately staffed, and highly flexible in its operation. It also will provide a structure through which departmental initiatives can be more fully considered, and expert advice from the Departments and agencies more fully utilized."

SUMMARY AND STAFF COMMENTS

Although the President has stated, in his transmittal message, that Reorganization Plan No. 2 of 1970 will "provide the management tools and policy mechanisms needed for the 1970's, ***", the plan, itself, would do no more than change the name of the Bureau of the Budget to the Office of Management and Budget; (2) transfer all of the statutory functions of the Bureau of the Budget, and its Director, to the President who intends to redelegate them to the Director of the new Office under his general delegation authority (3 U.S.C. 301-302, McCormack Act); (3) redesignate the titles of the principal statutory officers of

the new Office to conform to the new name; (4) authorize six more Executive Schedule Level V positions to staff the new Office, in addition to those already available; and (5) create a new Cabinet-level Domestic Council, with a staff which would be headed by an Executive Director who would be an assistant to the President and whose appointment would not require Senate confirmation.

The functions to be performed by the Office of Management and Budget and the Domestic Council are to be those which the President may from time to time delegate or assign to these bodies. The President's message discusses at great length the various duties and responsibilities which they are expected to assume, but they are not contained or enumerated in the plan. Although it does not appear that the plan will make any material changes in the present organization and structure of the Bureau of the Budget, the Bureau advises that the Office of Management and Budget will require an estimated total of 655 slots for fiscal year 1972, representing an increase of 70 new positions over the 585 requested in the 1971 budget; and some 50 positions are expected to be required to staff the Domestic Council, of which 20 will be transferred from the existing White House staff. Since the 20 transferred positions are not expected to be replaced, an additional 30 new positions will be required to staff the Council.

A question may be raised as to why the various actions contemplated by the plan could not be effected by Presidential action. First, since the name of the Bureau of the Budget, as well as its major functions, are provided for by statute, either a reorganization plan or a statute is required to change the name or transfer the functions. Second, statutory authority is required to establish the 6 new Executive Schedule Level V positions provided for in the plan. Third, if the President were to establish the Domestic Council by Executive Order, it would be subject to the provisions of the Russell rider (31 U.S.C. 696) which prohibits the use of any appropriation to pay the expenses of any agency established by Executive Order, if the agency has been in existence for more than one year and the Congress has not specifically appropriated funds for such agency or authorized the expenditure of funds by it. Finally, it was felt that the establishment of a permanent agency should be subject to congressional approval and should have a statutory base.

In support of the proposed transfer of the functions of the Bureau of the Budget to the President, it is contended that it would be inappropriate for a Presidential staff agency to have any statutory authority, other than that of advising and assisting the President. While this is consistent with the recommendations of the First Hoover Commission and is recognized, in general, as a basic principle of effective administration and management, it raises important questions. First, it should be noted that the Bureau of the Budget presently is vested with some 60 statutory functions, many of which are of considerable importance. Will the public interest best be served by a blanket transfer of these functions to the President who, under the provisions of the reorganization plan, would be able to transfer them wherever he sees fit?

Another matter for consideration is the vagueness of the plan itself, Although the President's message contains numerous details relative to the functions which will be performed by the new Office and the Domestic Council, as noted earlier, the plan itself is silent with respect to specific functions and responsibilities. This appears to raise the question as to whether the Congress desires to confer upon the President such broad and extensive powers with no statutory guidelines or specific requirements.

Another matter for consideration is the relationship between the new Office of Management and Budget and the new Domestic Council, and the Congress. Experience has demonstrated that under present procedures, the Bureau of the Budget, and its Director, have functioned reasonably well in maintaining effective liaison with the Congress and its committees, particularly with respect to pending legislation. Since both the new Office and its Director, as well as the Executive Director of the proposed Domestic Council, will be exercising authority delegated by the President, a question may be raised as to whether the contemplated reorganization would have an adverse effect upon executive-legislative relations, and, more specifically, whether it would result in a dimunition of accessibility by the Congress to required information.

Finally, reference is made in the message to the role of the new Office in devising programs for the development of executive talent throughout the Government. This appears to raise a question as to the extent to which such authority will affect the existing role of the Civil Service Commission relative to such matters, if the role of the new Office will involve more than coordination with respect to executive manpower planning and personnel policies.

At the outset of this memorandum, reference was made to a bill (H.R. 17376), introduced by Representative Blatnik and Holified, which embodies the principal features of Plan No. 2 of 1970, with some significant changes. It would establish an Office of Management and Budget in the Executive Office of the President, but would not transfer the existing statutory functions of the Bureau of the Budget to the President. It would also establish a Domestic Council, including in its membership the Director of the Office of Management and Budget, the Chairman of the Council of Economic Advisers, the Director of the Office of Economic Advisers, the Director of the Office of Economic Opportunity and the Chairman of the Council on Environmental Quality, in addition to all of the members of the Cabinet, except the Postmaster General and the Secretaries of State and Defense, as provided for in the plan. The provision in the plan making the Executive Director of the Council an assistant to the President has been omitted, and his appointment is made subject to Senate confirmation. Finally, H.R. 17376 would establish the following policy functions for the Council, in addition to those assigned by the President: (1) assessing national needs, collecting information and developing forecasts, for the purpose of defining national goals and objectives; (2) identifying alternative ways of achieving these objectives, and recommending consistent, integrated sets of policy choices; (3) providing rapid response to Presidential needs for policy advice on pressing domestic issues; (4) coordinating the establishment of national priorities for the allocation of available resources; and (5) maintaining a continuous review of the conduct of on-going programs from a policy standpoint, and proposing reforms as needed.

Approved:

JAMES R. CALLOWAY,

Chief Counsel and Staff Director.

ELI E. NOBLEMAN, Professional Staff Member.

APPENDIX

MAJOR PROVISIONS OF PLAN No. 2 of 1970

PART I. OFFICE OF MANAGEMENT AND BUDGET

Section 101 would transfer to the President all of the functions now vested by law or reorganization plan in the Bureau of the Budget or its Director. Section 102 (a) would redesignate the Bureau of the Budget as the Office of Management and Budget.

Section 102(b) would redesignate the offices of Director, Deputy Director, and those offices of Assistant Directors which are established by statute, of the Bureau of the Budget, as Director, Deputy Director and Assistant Directors of the Office of Management and Budget.

Section 102(c) would authorize the appointment by the Director of the Office of Management and Budget, subject to Presidential approval, of no more than six additional officers under the classified civil service, who would have such title as the Director shall determine and who would be compensated at the rate prescribed for Level V of the Executive Schedule ($36,000).

Section 102(d) provides that the Office of Management and Budget, and its Director, shall perform such functions as the President may delegate or assign; and the Director would be required to supervise and direct the administration of the Office, under the direction of the President.

Section 102(e) provides that the Deputy Director, the Assistant Directors and the additional officers provided for in the plan would perform such functions as the Director may direct.

Section 102(f) provides that the Deputy Director (or during his absence or disability or in the event of a vacancy in that office, such other officials of the Office of Management and Budget in such order as the President designates) shall act as Director during his absence or disability or in the event of a vacancy in the office of Director.

Section 103 contains the usual provisions for the transfer of records, property, personnel and funds of the Bureau of the Budget to the Office of Management and Budget, following the effective date of the plan.

PART II. DOMESTIC COUNCIL

Section 201(a) would establish in the Executive Office of the President a Domestic Council.

Section 201(b) provides that the Council shall be composed of the President, the Vice President, the heads of each of the Executive Cabinet Departments, other than the Secretaries of State and Defense and the Postmaster General, and such other Executive Branch officers as the President may direct.

Section 201(c) provides that the President shall preside over meetings of the Council, unless, in the event of his absence, he designates a member of the Council to preside.

Section 202 provides that the Council shall perform such functions as the President may from time to time delegate or assign thereto.

Section 203 provides that the staff of the Council shall be headed by an Executive Director, who shall be an Assistant to the President, designated by him and who shall perform such functions as the President may direct. Section 301 provides that the plan shall take effect either on the date provided for by the Reorganization Statute (May 16, 1970), or on July 1, 1970, whichever is later.

Mr. RIBICOFF. Our first witness is Congressman Holifield.

I want to welcome Congressman Holifield, a former colleague of mine in the House and one of the most able and respected men in the House and very knowledgeable in this field.

We do appreciate your taking time to be with us today, Congressman Holifield.

STATEMENT OF HON. CHET HOLIFIELD, A U.S. REPRESENTATIVE IN CONGRESS FROM THE 19TH CONGRESSIONAL DISTRICT OF THE STATE OF CALIFORNIA; ACCOMPANIED BY JAMES A. LANIGAN, GENERAL COUNSEL, HOUSE GOVERNMENT OPERATIONS COMMITTEE; AND HERBERT ROBACK, STAFF ADMINISTRATOR, SUBCOMMITTEE ON MILITARY OPERATIONS, HOUSE GOVERNMENT OPERATIONS COMMITTEE

Mr. HOLIFIELD. Thank you, Senator.

I would just like to say before I start that in the 24 years that I have served on the Government Operations Committee, I have handled probably 60 reorganization plans in the committee and on the floor of the House, the bills that set up the FSA, HUD, and DOT, the two latter departments and the first an agency. So I have had some experience in this field.

Mr. Chairman, I do not know how much time I am allowed.

Senator RIBICOFF. Of course in the House, 3 minutes used to be the limit. But as far as I am concerned, you can take as much time as you want.

Mr. HOLIFIELD. I do not want to impose on the committee, but I will make a short statement. I have a 4-page statement. Then I will into detail, some detail, in a longer statement if the time permits. If it does not-I would say probably if I handled both of these, it will take 30 minutes. If I handle the one, I will take less.

go

RIBICOFF FAVORS PLAN NO. 2

Senator RIBICOFF. Your position becomes very important. Of course, if the House rejects the plan, there is not anything further to be done in the Senate. I am anxious to have your views, because, I will be candid with you, I am inclined to favor this plan. I am very anxious to know why you and the members of the committee feel so strongly against this plan. Maybe you and I can have a dialog. I hope this plan can be saved.

H.R. 17376 FAVORED BY HOLIFIELD

Mr. HOLIFIELD. I might say that I am in favor of most of the objectives of this plan. As evidence of my good faith along that line, Mr. Blatnik, who is in charge of the Reorganization Subcommittee at this time I am a member of it, and I have both introduced a bill—H.R. 17376—which, in our opinion, does give to the President the help that he needs and it gives it to him in a way that I think protects the Congress in its responsibilities and prerogatives.

Now, I will get into that as I go along.

I want to thank you for scheduling me on such short notice this morning. I know you are busy and have several witnesses to hear, so I will make a brief statement to begin with.

H.R. 960

On May 7, the Committee on Government Operations voted to report favorably House Resolution 960 which would disapprove Reorganization Plan No. 2 of 1970. We expect to have a vote on the resolution on the floor some time next week, probably Wednesday.

Before we acted, the Executive and Legislative Reorganization Subcommittee held 3 days of hearings, carried on considered correspondence and heard 17 witnesses. In other words, we gave the plan very careful study, and I might add-we also studied the President's message very carefully. We have two letters from the Attorney General and we have the letter from the Comptroller General, which we will refer to in our testimony, and which we will leave copies of if the committee does not have copies.

These two conflicting opinions on the legality on the plan, both from reputable agencies of government, create confusion in the minds of a number of the members. They also indicate ambiguity in the language of the plan and accent an unknown latitude for presidential interpretation and subsequent actions. Under these circumstances, a majority of the committee, not strictly on partly lines, has concluded that the best way to put this reorganization into effect is to enact legislation which preserves the good and eliminates the bad in the plan. The chairman of the subcommittee, Mr. Blatnik, and I have introduced H.R. 17376 to accomplish this purpose. Other members of the committee have asked to cosponsor the bill.

HOUSE ACTION

If the plan is rejected by the House, it is the intention of the subcommittee to hold hearings and to report out a bill promptly. We intend to ask for an open rule so that it can be amended on the floor if the House so wishes.

!