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(4) Requests for regular, supplemental, or deficiency appropriations for the Commission (prepared by or under the Chairman in pursuance of section 214 of the Budget and Accounting Act, 1921, as amended (31 U.S.C. 22) and as affected by this reorganization plan) shall require the approval of the Commission prior to the submission of the requests to the Bureau of the Budget by the Chairman.

(b) The Chairman may from time to time make such provisions as he shall deem appropriate authorizing the performance by any officer, employee, or administrative unit under his jurisdiction of any function transferred to the Chairman by the provisions of this reorganization plan.

SENATE ('OMMITTEE ON GOVERNMENT OPERATIONS

Staff Memorandum No. 90-1-13.

APRIL 3, 1967. Subject: Reorganization Plan No. 2 of 1967, Concerning the United States Tariff

Commission and Ways To Promote Its More Efficient Operations. Reorganization Plan No. 2 of 1967 was submited by the President on March 9, 1967, and referred to the Subcommittee on Executive Reorganization on March 13. Hea rings on Plan No. 2 have been scheduled for May 3, 1967. Unless disapproved by a majority vote of either House of the Congress, it will become Pffective on May 19, 1967. The original effective date, May 9, was extended for an additional 10 days pursuant to the provisions of the Reorganization Act of 1949, as amended, which requires the exclusion of any period of adjournment of either House in excess of three days.

Hearings on Plan No. 2 were held on March 21, 1967 by the Subcommittee on Executive and Legislative Reorganization of the House Committee on Government Operations. H. Res. 405, to disapprove Reorganization Plan No. 2, was introdeed in the House of Representatives by Representative Erlenborn on the same day.

PURPOSE OF THE PLAN

The purpose of Reorganization Plan No. 2 of 19967 is to strengthen the operations of the Tariff Commission by transferring to its Chairman certain executive and administrative functions which are now shared jointly among its six commissioners. The functions which would be transferred are (1) appointing, directing and removing personnel : (2) distributing business among, and communicating Commission policies to, the staff; (3) overall management, functioning and organization of the Commission; (4) carrying out Commission functions under the Budgeting and Accounting Act; and (5) allocating, using and expending funds available to the Commission. Under the provisions of the Plan, the Chairman would be governed by the general policies of the Commission in the performance of these functions.

According to the President's message tarnsmitting Plan No. 2, it "* * * is a step toward fulfilling my pledge to the American people that government must be reshaped to meet the tasks of today. It underscores my conviction that progress can be achieved by building upon what is strong and enduring, but that we shall never hesitate to discard what is inefficient or outmoded.”

Continuing further, the President said that ** * * in taking this long overdue step. the plan adopts a proven concept of good management recommended by the first Hoover Commission: in the interests of efficiency purely administrative functions_budgeting, personnel supervision, and general management-should be rested in the chairman of a commission rather than diffused throughout the con mission."

After noting that this principle was followed by each of his predecessors in offire since President Harry S. Truman, and that it has been applied successfully to the Federal Trade Commission, the Securities and Exchange Commission, the U.S. ('ivil Service Commission and the Federal Home Loan Bank Board, the President summed up the role of the Tariff Commission as follows:

The Tariff Commission plays a key role in safeguarding the Nation's economic vitality. It reviews our commercial policies and studies how these policies affect competition between foreign and domestic products. Pe

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riodicaly, after public investigation, the Commission reports to Congress and the President concerning the effect of imports on our domestic industries and our workers.

The Commission's tasks are demanding and complex. They require skill and careful judgment. Often the Commissioners must work under intense

time pressure. In concluding his message, the President said:

This plan will allow the Nation's businessmen and workers—and indeed every citizen-to reap the benefits of modern and effective government.

As a result of this plan, the Tariff Commission will be managed more efficiently * * * .

PROVISIONS OF THE PLAY

Section 1 transfers, subject to the limitations contained in section 2(a) of the plan, the executive and administrative functions of the United States Tariff Commission to the Chairman of the Commission, including the following specitied functions:

(1) the appointment and removal of personnel employed under the Commission; (2) the distribution of business among such personnel and among administrative units of the Commission; (3) the direction of personnel who perform, or who supervise the performance of, any function of the Commission or of the Chairman or of any agency under the Commission; (4) the communication to personnel employed under the Commission of applicable Commission policies to be followed by such personnel in the performance of their work and the subsequent enforcement of such policies; (5) the overall management, functioning and organization of the Commission, including (i) the formulation and implementation of plans and policies designed to increase the effectiveness of the Commission in the administration of the laws it is charged with administering and the initiation of ways and means of correcting or preventing avoidable delays in the performance of any work or the disposition of any business before the Commission, and (ii) the development and improvement of staff support to carry out the functions of the Commission; (6) the functions of the Commission under the Budget and Accounting Act, 1921, as amended; (7) the allocation, use and expenditure of funds available to the Commission; and (8) the calling of the Commission into special session whenever any matter or business of the Commission so requires, but in any event for the consideration of any matter or business upon request of not less than two other members of the Commission.

Section 2(a) provides that (1) the Chairman shall be governed by general policies of the Commission, in carrying out any of his functions under the provisions of section 1 hereof; (2) the appointment by the Chairman of the heads of major administrative units under the Commission shall be subject to Commission approval; (3) personnel employed regularly and full time in the immediate offices of Commission members, other than the Chairman, shall not be affected by the provisions of this plan; and (4) requests for regular, supplemental or deficiency appropriations for the Commission (prepared by or under the Chairman pursuant to section 214 of the Budget and Accounting Act, 1921, as amended, and as affected by this reorganization plan) shall require approval of the Commission prior to the submission of the requests to the Bureau of the Budget by the Chairman.

Section 2(b) authorizes the Chairman to delegate, as he deems appropriate, any of the functions transferred to him by provisions of this plan.

PLAN NO. 2 AND RECOMMENDATIONS OF THE FIRST COMMISSION ON THE ORGANIZATION

OF THE EXECUTIVE BRANCH OF THE GOVERNMENT (HOOVER COMMISSION) In view of the reference by the President to the recommendations of the first Hoover Commission, in his message transmitting Plan No. 2, pertinent portions thereof are set forth below.

The first Hoover Commission in its report on Regulatory Commissions found that “* * * purely executive duties—those that can be performed far better by a single administrative official-have been imposed upon these commissions with the result that these duties have sometimes been performed badly. The necessity for performing them has interfered with the performance of the strictly regulatory functions of the commissions. * * * Administrative direction has not developed within the commissions. Their chairmen are too frequently merely pre. siding officers at commission meetings. No one has been responsible for planning and guiding the general progress of commission activity."

As a means of correcting this situation, the Hoover Commission recommended that ** * * all administrative responsibility be vested in the chairman of the commission." In support of this recommendation, it was stated that

* Administration by a plural executive is universally regarded as inefficient. This has proved true in connection with these commissions. Indeed, those cases where administration has been distinctly superior are cases where the administrative as distinguished from the regulatory duties have been vested in the chairman. There are many of these administrative duties. Their efficient handling will frequently make the difference between a com

mission's keeping abreast of its work or falling woefully behind. In further explanation of this recommendation, the Hoover Commission stated that it would be the chairman's responsibility

to deploy the work force most effectively in order to carry out the program developed by the commission as a whole. It would similarly be his responsibility to see that business is dispatched in an orderly manner.

* * * This recommendation does not derogate from the statutory responsibilities placed upon other members of the commission. They remain exactly as they are, and because of the better functioning of the organization the commission members will be enabled to discharge these responsibilities more effectively.

One consequence of this recommendation will be to center responsibility for the functioning of the commission. The chairman will be the commission's principal spokesman before the Congress as well as before the executive

branch. It may be noted that although the Tariff Commission is not a regulatory agency, Chairman Hoover, in a foot note to the Hoover ('ommission's report stated his belief that the concepts discussed above should apply as well to the Tariff Commission.

ORGANIZATION, PURPOSE AND ACTIVITIES OF THE U.S. TARIFF COMMISSION

Organization and purpose

The t'nited States Tariff (emission was created by the Act of September 8, 1916 (39 Stat. 79.5). The ('ommission's present powers and duties are provided for primarily in the Tariff Act of Jue 17, 1930 (Title III, part I, 46 Stat. 696; 19 U.S.C. 1330 et seq.); the Antidumping Act. 1921, as amended; the Agriculture Adjustment Act, amended : the Trade Expansion Act of 1962, as amended; and the Automotive Products Trade Act of 19.5.

The primary duty of the Commission is to investigate and report upon tariff and foreign trade matters, as required by statute. It makes such investigations and reports at the request of the President, either House of the Congress, the Honse Committee on Ways and Means, or the Senate Committee on Finance. Investigations into the effects on domestic industries, firms or groups of workers, of increased imports resulting from trade agreements concessions may be initiated by intereted parties. The Commission also makes studies, surveys, or investigations on its own initiative.

The Commission consists of six members, appointed by the President, subject to Senate confirmation, for terms of 6 years, one term expiring each year. Sot more than three commissioners may be of the same political party. The President is authorized to designate the (hairman and Vice (Chairman annually from the membership of the ('ommission. The Staff Coordinating ('ommittee, composed of senior officers of the ('ommision's staff and chaired by the Director of Investigation, plans and supervises the substantive work of the Commission. The operating divisions of the staff consist of the office of the General Counsel; the office of the Director of Investigations: the Economics Division; and, under the direction of the Chief, Technical Services, seven commodity divisions, the Accounting Division, the Statistical Division, and an Invoice Analysis Section. The Office of the Secretary acts as the secretariat for the Commission. It is charged with the conduct of relations with the public and other Government agencies, and issues, publications and notices. Personnel, budget activities and general administrative and auxiliary services are under the Director of Administration. drtirities

The Tariff Commission conducts a variety of public investigations which usually involve public notice, public hearing and a formal report. It also under

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takes research activities and studies relating to commercial and customs polics. In general, the major portion of the Commissions' activities relate to public investigations with respect to (1) the Trade Agreements program; (2) dumping; (3) import interference with agricultural programs; (4) specific requests from the President or the Congress; (5) tariff schedules and classification; (6) differences in costs of foreign and domestic production; and (7) unfair practices in import trade.

ELI E. YOBLEMAX,

Professional Staff Member. Approved :

JAMES R. CALLOWAY,

Chief Clerk and Staff Director, Senator RIBICOFF. The first witness this mornring is Phillip S. Hughes, Deputy Director, Bureau of the Budget, accompanied by Howard Schnoor, Assistant Chief, Office of Management and Organization, Bureau of the Budget.

STATEMENT OF PHILLIP S. HUGHES, DEPUTY DIRECTOR, BUREAU

OF THE BUDGET; ACCOMPANIED BY HOWARD SCHNOOR, ASSISTANT CHIEF, OFFICE OF MANAGEMENT AND ORGANIZATION

Mr. Hugues. Thank you, Mr. Chairman.

I would like to have with me Mr. Schnoor, Assistant Chief of Office of Management and Organization.

Senator RIBICOFF. Certainly.
You may proceed, sir.

Mr. Hugues. We are here, Mr. Chairman and members of the subcommittee, in support of Reorganization Plan No. 2 of 1967, which the President transmitted to the Congress on March 9, 1967.

In his message of transmittal, the President stated : The plan is a step toward fulfilling my pledge to the American people that government must be reshaped to meet the tasks of today. It underscores ms conviction that progress can be achieved by building upon what is strong and enduring, but that we shall never hesitate to discard what is inefficient or outmoded. This plan has a single, clear objective to strengthen the operations of the Tariff Commission by transferring to its Chairman certain routine executire and administrative functions now divided among its six Commissioners.

The principle which the reorganization plan applies to the Tariff Commission was enunciated by the first Hoover Commission in its 1919 Report on Regulatory Commissions. In that report it stated:

Purely executve duties—those that can be performed far better by a single administrative official-have been imposed upon these commissions. The necessity for performing them has interfered with the performance of the strictly regulatory functions of the commissions.

It added : There are many of these administrative duties. Their efficient handling frequently makes the difference between a commission's keeping abreast of its work or falling woefully behind.

The Hoover Commission concluded that all administrative responsibility should be vested in the chairman of a commission.

In the intervening vears, every President has endorsed the Hoover Commission's recommendation and transmitted to the Congress one or more reorganization plans applying the principle to multiheaded agencies. Plans have become effective for most of the regulatory commissions and for agencies such as the Civil Service Commission and the Federal IIome Loan Bank Board.

Reorganization Plan No. 2 of 1967 applies the principle to the Tariff (Commission. More specifically it transfers to the Chairman of the Commission the executive and administrative functions of:

Appointing, directing, and removing personnel;

Distributing business among, and communicating Commission policies to, the staff;

Overall management, functioning, and organization of the Commission;

Carrying out Commission functions under the Budget and Accounting Act; and

Allocating, using, and expending funds available to the Commission. Under the terms of the plan, the chairman will be governed by the general policies of the Commission in the performance of his functions. The plan does not disturb the substantive aspects of the Commission's work—the determination of policies, the formulation and issuance of rules and schedules, and the resolution of particular cases. All of these crucial functions remain vested in the Commission as a whole to be decided by a majority of the six Commissioners. Finally, the Commission as a whole will retain the right to approve major staff appointments, and each Commissioner will retain the responsibility for the staff of his immediate office.

The division of labor, exemplified by this plan and the others which have become effective over the years has been demonstrated by experience to provide a sound basis for the efficient operation of a multiheaded agency. We believe it is particularly important for the Tariff Commission, which by law, must decide matters within strict time limits. As the Commission's workload has grown in recent years through additional assignments under the Trade Expansion Act of 1962 and the Automotive Products Trade Act of 1965, the need for relieving the Commission of its purely administrative workload has become increasing clear.

The plan will strengthen the Tariff Commission in two ways: administrative functions will be performed with dispatch; and the Commission, relieved of the mass of detail by day-to-day management (approving travel requests, for example), will be able to deal more effectively with the substantive and policy matters before it. It will fix responsibility for executive action in a single individual accountable to the President and Congress and provide him with the necessary anthority to match that responsibility, and it will provide for improved direction of staff work and a clear channel of communication to the staff.

In summary, we believe that Reorganization Plan No. 2 would result in more efficient and economical management of the Commission, thereby strengthening the Commission's overall capacity for effective performance of its functions. We urge that Congress allow the reorganization plan to become efiective.

Senator RIBICOFF. If there is no objection from Senator Baker, I think what we might do before asking questions is allow the four witnesses to testify. Then they can all sit together and we can ask questions of them all.

Senator BAKER. I think that will be fine.

Senator RIBICOFF. Without objection, the next witness will be Mr. Paul Kaplowitz, Chairman of the Tariff Commission.

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