into the mold of purely service delivery rather than performing the broader resources mobilization mission that the Congress assigned to it.

So, while I would not say Community Action agencies in general have been ineffective-many of them have been very effective. Where they have been effective, it has been due principally to local leadership and in spite of, in my judgment, the fact that OEO is an independent

agency.

I think that is an example of an agency, albeit not a regulatory agency, where independence has handicapped the director in the performance of his mission.

Senator PERCY. Lest we have consternation and concern in all of our independent regulatory agencies now, on the basis of your testimony. I would like to have you amplify or possibly clarify your own attitude on the position that you feel should be taken here.

Have independent regulatory agencies proven, in your judgment, to be essentially a failure; and do you feel that in the future this failure could be remedied by incorporating these agencies into existing departments of government or are you saying the independent regulatory agency structure is really only good for certain specific purposes?

Mr. CARLUCCI. Well, as you may be aware, the Ash Council did recommend a form of consolidation of some of the regulatory agencies. We presently have that report under study in OMB, so I prefer not to comment on that at this point.

Senator PERCY. Is there any date by which you feel you may have such a study completed and would be able to discuss it?

Mr. CARLUCCI. I would like to check that. I have not been personally involved for a number of months, and I would have to see what the status of it is. (See exhibit 17, p. 351.)

To clarify my testimony, Mr. Chairman, I would not characterize regulatory agencies as failures by any means.

What I had intended to say-and perhaps my prepared text is not phrased as solicitously as it might be in this repect-is that in some cases they have been subject to pressure, constituent pressures. I think there have been a number of examples in the press of this. In some cases, they have lacked the visibility and the authority that they need to bring some of their constituencies in line, and in some cases-and we have to deal with this on a case-by-case basis-it might be better if they had access to a broaded power structure.

Specifically, with regard to FDA, we think that access to broader power structure has been beneficial and that it has, coincidentally, resulted in significantly larger financial resources for FDA in the process.

ACCESS TO THE PRESIDENT

Senator PERCY. I was very interested in your statement on page 4, Mr. Carlucci, on the access of cabinet secretaries to the President. I could not help but think of Walter Hickel's frequent comments and, really I might say, the personal complaints I have heard in unguarded moments from other members of the administration in this respect.

I would say this: It is no different, at a far lower level, than complaints that I have from members of my staff regarding their inability to get me to sit down and focus on a problem for long enough periods of time.

CONSUMER SAFETY ACT OF 1972

WEDNESDAY, MAY 3, 1972

U.S. SENATE,

SUBCOMMITTEE ON EXECUTIVE REORGANIZATION

AND GOVERNMENT RESEARCH,
COMMITTEE ON GOVERNMENT OPERATIONS,

Washington, D.C.

The subcommittee met, pursuant to recess, at 9:45 a.m., in room 3302, New Senate Office Building, Senator Charles H. Percy presiding. Present: Senator Percy.

Also present: Mark Greenwold, assistant general counsel; Gerry Simons, special counsel; Stuart Statler, minority counsel; and Pamela Gell, chief clerk.

HEARINGS RESUMED

Senator PERCY. The hearings will come to order.

Senator Ribicoff, regretfully, will not be able to be with us this morning.

We resume hearings on S. 3419 today in an attempt to gain further insight into the fundamental questions before us; namely, whether consumer safety regulation should be accorded independent agency status or be elevated within the Department of Health, Education, and Welfare to provide the visibility, independence, and access to the Secretary that this priority function requires.

We have discussed the safety issues at length; from an economic standpoint, I might add at this time that the Food and Drug Administration, as presently organized, is responsible for regulatory decisions which affect 38 cents of every consumer dollar.

In 1971, consumers spent $104 billion for food products regulated by FDA; $10 billion for drugs regulated by FDA; $8 billion for cosmetic products regulated by FDA, and some $145 billion for other household products subject to FDA jurisdiction.

The dollar amounts alone involving such regulation would seem to also provide a strong argument for greater attention to be accorded to this safety function.

We welcome our first witness today, Mr. Frank C. Carlucci of OMB. Mr. Carlucci, go right ahead with your statement.

day operating and more immediately related policy decisions that have to be made. You have to balance that off against the broader managerial authority necessary for the Secretary.

Senator PERCY. I think, in all of the questions and answers given by Secretary Richardson-and you heard them yesterday-he did try to strike the balance.

Would OMB support the positions he took yesterday in striking that balance in the authority to be given to the position of an Assistant Secretary if created within HEW?

Mr. CARLUCCI. Mr. Chairman, I think I had left by the time this part of the discussion took place, because I am not familiar with it. I would like to have a chance

Senator PERCY. Could you review the record? The staff would be happy to extract that for you.

Mr. CARLUCCI. I assume that took place after 11:30.

Senator PERCY. We will incorporate in the record the formal response as to whether OMB would support the position taken by Secretary Richardson yesterday.

(See exhibit 18, p. 352.)

FDA BUDGET

Senator PERCY. We talked about, and you did mention to us, the great increases that have been provided FDA in their budget.

Was there a difference between the budget level submitted by FDA and the proposed budget requested by FDA for fiscal year 1972 and fiscal year 1973?

Mr. CARLUCCI. Mr. Chairman, I do not have those figures with me. I would be glad to supply them for the record.

Senator PERCY. Also, if you can, whether there were increases or decreases, and if so, what the reasons for the increase or decrease were. (See exhibit 19, p. 352.)

Mr. CARLUCCI. Mr. Chairman, I might note that another aspect of this is the implication contained in section 112 of the proposed legislation that somehow in making these figures available means that FDA will have access, I presume, to greater financial resources. The history, brief history, of the FDA budget reveals that over the past 11year period, the Congress has cut FDA's Presidential budget four times, approved the same figure six times and raised them only once. So, you can see the budget that the President has presented for FDA has been generally, at least as generous and in some cases more generous than that voted by the Congress.

Our concern about the process that would be instituted by section 112 is that it seems to pit the commissioners against the Administrator and the Administrator and the commissioners against the President, and that we are seeking the views of individuals rather than trying as President, as executive branch and as the Congress to sit down in a dialog and determine what is the most effective expenditure of dollars. As you know, the President's budget comes up and, then, various people come up and testify on the subject and, then, make their views known, and a constructive dialog can be engaged in at that point.

for administration proposed legislation, is $192 million, which, if approved, would represent an approximate 145 percent increase over fiscal year 1970-far greater than increases experienced by any of the independent regulatories. The independent status of an agency also presumes that it reports to the President, and thus would have regular direct access to him.

Our experience shows that the Secretary of HEW, as a member of the President's Cabinet, would have far better opportunities to consult with the President and bring important issues to his attention than would the head of an independent agency.

Unfortunately, while S. 3419 offers us the problematic virtues of independent agency status, its proposed transfer of FDA and DBS from HEW would do real harm to the consumer oriented programs of that Department. FDA is now, and must continue to be, a vital resource in the spectrum of health programs of HEW. Instead of transferring FDA, it should be our goal to strengthen consumer health and safety protections as an integral part of our total health service to the country. Instead of severing the FDA relationships with the other people oriented programs of HEW, we should be building stronger relationships with such programs as health service, economic assistance, special programs of education, child care, and help for the aged. These goals are consistent with the intent of the Department of Human Resources, and would be pursued under the more stronger departmental leadership role and the more effective overall structures and management systems proposed for that department.

S. 3419, on the other hand, would, by pulling FDA and DBS out of their natural relationships in HEW, create more of the fragmentation and lack of cohesion which already plagues the Federal Establishment. We are already far beyond the point where we can accept the continued fragmentation, duplication, overlap, and confusion which the piecemeal approach to structuring Government inevitably produces.

S. 3419 poses one further issue on which it is important to comment. Section 112 calls for the submission by the Administrator of the agency of an annual report to the Congress and the President which would contain budget data and legislative recommendations. The language specifically states that the report would be submitted "without review by the Office of Management and Budget." While this provision deals essentially with disclosure of information, I am concerned that it reflects a misconception of the relationship between the Office of Management and Budget and the President, and the significance of that relationship to the Congress in its own oversight of the Federal budget.

ROLE OF OMB

The OMB works on behalf of the President to monitor the budget. requests of all Federal departments and agencies and the programs which they administer.

The President expects the Office of Management and Budget to coordinate the requests and to forward them to him with our advice and recommendations of other Executive Office and executive branch agencies that carry on related activities. We have to determine the specific

And assuming that the administration appropriation is passed, I have no reason to expect the funds would be withheld.

But one cannot foresee contingencies, so I, obviously, cannot give a categorical assurance.

Senator PERCY. You oppose section 112 on the grounds that OMB, as an arm of the President, should have a right to review legislative recommendations of Government agencies. By "review," just what do you mean?

Shouldn't the Congress be privy to the undiluted judgment of an agency on these issues?

OMB can, after all, always make clear its grounds for disagreement.

PRESIDENTIAL RESPONSIBILITY

Mr. CARLUCCI. Well, the Constitution, article II, holds the President basically responsible for giving the Congress information on the state of the Union and recommending for its consideration such measures as he shall judge as necessary and expedient.

And article I, section 7, provides that every bill which shall have passed the House and the Senate be presented to the President for his approval.

În addition, the Budget Accounting Act of 1921 provides the President may direct the Bureau of the Budget, now the Office of Management and Budget, to make studies of departments and establishments to enable him to determine what changes should be made in organizational activities and methods of business of the departments.

So, the Constitution and the Budget and Accounting Act pose a very serious responsibility on the President.

In addition, the President, of course, is the one figure in the executive branch that is held politically accountable.

So, he is basically responsible for presenting a program to the Congress.

It is therefore important, we think, that the program be consistent with the overall goals that the President has established.

Now, this does not mean that we will impose censorship or that we go around vetoing legislation. There are many, many instances where agencies oppose legislation that might already be covered by a piece of legislation that has been proposed by another agency or where it may conflict with a program being run by another agency. It would be inconsistent with some testimony that has been given by another agency. In these cases, we try to reconcile the views and pull together an administration position and make appropriate recommendations to the President.

So, the legislative review process is principally a coordinating process, one that does, however, insure that the legislative proposals are consistent with the overall goals laid down by the administration.

We do allow agencies to send up individual reports, and on those reports they indicate whether or not the Office of Management and Budget has approved the report. And, at times, we comment, ourselves, on legislation.

Senator PERCY. You mean, every organization needs some control unit for coordinating policy, and, in the U.S. Government, OMB is it. Mr. CARLUCCI. That is generally correct.