the hari-kari at the Commission by getting rid of 200 or 300 people, coming up with a staffing level that we know we couldn't live with? What kind of criticism would I have had from all of you up here if I had gambled on that fact?

FISCAL YEAR 1985 BUDGET REQUEST

Senator ANDREWS. You are living in a very unreal world, Mr. Chairman. The original request was for $53,966,000. We went through this procedure. We have set the figure.

It was signed into law by the President. Now you come back and say you want $53,463,000. You are saying, oh, we can absorb a .009 reduction from the original request. You are living in some magic land.

Mr. TAYLOR. Mr. Chairman, the President approved our supplemental request. The OMB approved our supplemental request. They have known exactly what we have been doing and where we have been coming from.

Senator ANDREWS. Mr. Chairman, let me point out that under the Constitution the Congress still appropriates the funds that run this Government. Let me also point out that we could care less what the Office of Management and Budget said or did or intimated along the line. Your instructions were the instructions in the appropriations bill that was signed into law by the President 12 days after the beginning of the fiscal year and we still would like to know what you did to comply with the law of the land.

Mr. TAYLOR. I went through it. Do you want me to do it again? Senator ANDREWS. No; we heard. But it certainly doesn't look as though you were following even the President's request

Mr. TAYLOR. He asked for 949 people.

Senator CHILES. What you are saying, Mr. Chairman, is the appropriation wasn't right. It should have been more. You don't think it was right. And so, therefore, you are not going to go by what that says, you are going to go by what it should be, which was the figure you submitted.

Mr. TAYLOR. Senator, we are going by what you said. If you want us to stay at $48 million and you tell us we can't have any supplemental funds and you are going to deny our supplemental request, we are prepared to live with $48 million. We simply told you how we are going to do it.

In the process we have already lost a large, large number of people. Nobody is sitting here flaunting your authority, taking this committee for granted, accepting that you are just going to go along with this thing. You have the responsibility. It is entirely in your lap. If you want us to stay within the $48 million, tell us now.

Senator CHILES. I think we told you when we passed the bill. That is when we told you. And I think you did exactly what I said you did. You said, we will run the bluff. We will run it just like we had $53 million. We will run it to the wall just like we had $53 million. We will go up there, we will put in for the supplemental, and the blood will be on their hands as to whether they want to cause this to happen or not.

You got your bill 12 days late. I listened to the statement of yours and it sounds like you didn't get the message. You got it 12 days late.

Mr. TAYLOR. We have already saved $2.7 million through a belt tightening plan. I am prepared to go through with you everything the Commission has done to save money, and it is an enormous amount.

Senator CHILES. I see with your supplemental your request will be up to $53,463,000. Your original request is $53,966,000. Now, if that sounds like you have done a lot of belt tightening, that you have complied with the congressionally passed budget, which gives you $48 million, then I don't know

Mr. TAYLOR. There is a pay raise in there, too, Senator. The point is, where we are now is that we need $3.5 million or we get into a furloughing program. That is really where the ballgame is.

Senator CHILES. Let me tell you what I think the point is. I think the point is that the action now will have to be much more drastic than it would have to be had you started taking the action in October, had you started taking the action in December, had you taken some action in January, had you taken some action in February, had you taken some action in March, and had you taken some action in April.

You didn't do any of that. You sat back and you said, January, we held a meeting, said what we are going to do. We are now putting in our request. We have OMB to go along with that request. And now we have a plan, we got a plan that will save all this money.

If you fellows want to put the blood on your hands to go out there and make that drastic thing, again knowing that it doesn't affect you at all, it doesn't affect you at all, it just affects the employees.

BUDGET CONFERENCE

Senator ANDREWS. One of the interesting things is, I think they have been jerked back into complying to a certain extent with another law, the sunshine law that concerned both of us when they were here before.

And on October 25, they had a meeting on the budget. It makes very interesting reading because they had to have a transcript, a public meeting.

Mr. Foley, the managing director said:

I agree. And, frankly, maybe I was too candid in my memorandum. If this goes to the Hill, they are going to see my reaction there. If the Commission votes to go for the conference report level, in effect the Commission is saying the Congress knows better than the Commission does what the staffing requirements are to do its work. I wouldn't like to agree to that personally.

Chairman TAYLOR. The fact of the matter is, the Commission voted on 1,022 total staff-years to do the job. And to suddenly conclude now that we can do the same thing with 949, I think, if nothing else, raises a serious question of our credibility. Mr. FOLEY. I agree.

Commissioner GRADISON. I think the biggest problem is that this is what they have given us. And we have to make a choice as to whether or not we are going to be able to not do our jobs with the $48 million or whether we are going to go back in to Congress and say, Congress, we need this many people to do the job.

Senator ANDREWS [continuing]. Well, you know, if I have ever seen an example of a rogue commission, wandering around and saying Congress set this, they passed the law-I guess under the Constitution we have been doing it for some 200 years-but we don't really think that Congress knows what they are doing, therefore, we shall ignore the law and go about our way.

And I guess you concluded in your mind and it is not down on paper, Mr. Chairman, you concluded in your mind that if push comes to shove and we let this drift for 6 or 7 months, somehow or another somebody is going to patch it up so the lower level employees won't be hurt.

Let me also point out that in last year's testimony Mr. McFarland said:

the workload figures that are contained in the budget that were transmitted to this Committee were not workload figures provided by my office, they were adjusted after they left my office to reflect the decreased staffing levels that were given to me.

McFarland went on to say they were developed, according to tes-. timony presented on the House side, by members of the staff of the three Commissioners who voted the lower levels.

This whole thing, you know, is an interesting story, a chapter I think we ought to get behind us. Let me look at it in a slightly different way, Mr. Chairman. Even if the Commission ignored the conference report's funding cut and planned on the cut of 7.4 percent, the same as the personnel cut, you would have had a shortfall of only $2 millionaccording to our figure.

On that basis what is the $3.4 million supplemental request based on?

COSTING TECHNIQUES

Mr. TAYLOR. Well, your numbers aren't correct. I will ask Mr. Foley to respond to that.

Mr. FOLEY. Senator, the Commission's budget was prepared for fiscal year 1985 in 1983, based on four principal programs. We have been converted by congressional action on fiscal year 1985 to an office-by-office, line item budget.

Our costing techniques have improved and we have a much more accurate costing technique and procedure now to show average salary costs office-by-office, nonpersonnel cost office-by-office on an allocation basis which we didn't have available to us when the 1985 budget was put together in fiscal year 1983.

Therefore, it may appear that in some cases the Commission is asking for increased dollars in the supplemental when there is no staff increase in an office. The reason for that is simply that we have changed our budgeting and our allocating procedures. In addition, the effect of attrition and RIF's is to increase average salary costs on a continuing basis. Senator ANDREWS. Thank you very much. If I could for just a moment, we have a colleague, our good friend, the senior Senator of South Dakota who wishes to make a statement. Senator, we are delighted to have you here. We would be glad to hear from you, if you want to give your statement in its entirety for the record.

STATEMENT OF HON. LARRY PRESSLER, U.S. SENATOR FROM SOUTH DAKOTA

Senator PRESSLER. I want to thank you very much, Mr. Chairman, for allowing me to speak here and I also want to thank Senator Chiles very much. I won't interrupt your line of questioning.

I appear today to express my support for the administration's supplemental appropriation request and to urge this subcommittee to take swift action on this measure. I applaud the chairman's action in calling this hearing today.

I share many of his concerns and agree we have to take a close look and make certain this money is being spent in a manner that truly reflects congressional intent, especially in the deregulation areas.

Quite frankly, I too believe that the Commission has gone beyond its bounds in implementing deregulatory legislation and has more than blurred the line between implementing the laws we pass and, in effect, making its own through administrative fiat.

Rural States like South Dakota are the hardest hit by the push for blind deregulation. We are fortunate to have a spokesman like Senator Andrews to chair this important subcommittee. I enjoy working with him and support his efforts to have the Commission take a closer look at our legislation before going forward with wholesale deregulation, regardless of the consequences. Too much of that has happened in the past. It has got to change. If it does not, I could certainly envisage changing my position on Commission funding in the future.

However, I did have hope and have seen encouraging signs at the Commission. I am afraid that if we do not approve this supplemental, the resulting furlough will cause a mass exodus of the high quality staff and, in general, cause major morale problems.

But even more important from my point of view, I understand that under the present funding plan without the supplemental, ICC field operations will cease to function. This would present special problems for a State like mine.

For instance, 2 years ago South Dakota was threatened with a proposed abandonment of a 200-mile railroad, the only major line in the entire western half of the State. We were able to have an ICC administrative law judge come out to the State to conduct field hearings, and we were able to provide guidance to the local shippers through the ICC Office of Special Counsel.

We ultimately prevailed in our effort to save the line, but I have no doubt that it would have been impossible without these kinds of field operations. They are essential in running any effective enforcement agency.

I might just point out here that it is largely through the efforts of Senator Andrews and others that rural States like North and South Dakota still have available to them many of the services provided by the Office of Special Counsel, and he is to be commended for that.

My basic point today is simply that without this funding there is no hope for a truly effective ICC. Without it, we may as well take back the rest of the money and close its doors.

We do have to more closely scrutinize how this money is being spent, not only in this committee, but through the oversight function of the Commerce, Science and Transportation Committee on which I serve.

I look forward to working closely with the distinguished chairman and members of this subcommittee to do exactly that in the years ahead. But I do think it is absolutely vital that you go ahead now and approve these badly needed funds as soon as possible.

The loyal employees at the Commission deserve it and the policy concerns in States like South Dakota cannot be addressed without it.

I restate my thanks to the chairman for allowing me to appear today.

OFFICE OF THE SPECIAL COUNSEL

Senator ANDREWS. Thank you very much, Senator Pressler. We are glad to have you here with us. This again gets into the magic of the whole case before the ICC because Senator Pressler, as an active fighter for a better break for agricultural shippers, is here testifying mainly that he wants nothing to happen to the Office of Special Counsel.

He cites how helpful it has been to him in South Dakota and how he wants it continued. I understand, Senator, that is the gist of your remarks.

The interesting part of it, that ought to be pointed out, is that the ICC, now before you Senator, came up before us, a year ago, and in their request they wanted to eliminate the Office of Special Counsel. And it was only because this subcommittee directed them to maintain the Office of Special Counsel within the lower, overall figure, or it would be gone in total.

What we are talking about is an 11-percent cut in the overall total. Had they had their way, the Office of Special Counsel would have been eliminated. So who was it, the rabbit or Alice who says it gets curiouser and curiouser?

SUPPLEMENTAL REQUEST

Mr. Chairman, if the requested pay supplemental of $1 million is included, total resources requested would be $53,463,000. This is less than a l-percent reduction from the original request.

Given this committee's dissatisfaction with the way the Commission has done business in the recent past, why is there no recognition of congressional intent to reduce ICC salaries and expenses reflected in your request?

Mr. TAYLOR. Well, there is a certain amount of creep that comes. about, grade creep we call it, as you get rid of people. And that has happened. There is no question about it.

That is nothing that we are responsible for. We have had an enormous number of people leave the agency. And I say again, if you want us to stay at the $48 million level, we are prepared to do it. We could have RIF'd hundreds of people and had no agency left and done it last fall.

All we have tried to do is delay it 6 months, to see if we can't possibly have a hearing up here and get some help from Congress. But if