To finance Bureau's share of working capital fund__ Revised 1957 base_-_ 1958 appropriation request_-_. Net change requested---. $5, 558, 000 48, 700 87, 100 -10,000 5,683, 800 6, 345, 500 +661, 700 1 These positions were financed in fiscal year 1957 by an allocation of funds from the Office of the Secretary. 2 Includes 14 positions in the older worker program which were financed in fiscal year 1957 by an allocation of funds from the Office of the Secretary. PREPARED STATEMENT Senator HILL. Mr. Goodwin, we will be glad to have you come around here, sir. I understand you have filed a statement with us. That will appear in the record in full, and we will now be glad to have you proceed in your own way and make any summarization you may see fit to make. Mr. GOODWIN. Yes, Mr. Chairman. SALARIES AND EXPENSES Mr. GOODWIN. Senator, we have five different appropriations. Mr. GOODWIN. Yes. The first one is on salaries and expenses. I would like to put a statement on that into the record and then make a brief statement here to point up the most important items as we see it. Senator HILL. Very well. The statement may appear in the record at this point, and you can just proceed, in your own way. (The statement referred to follows:) STATEMENT OF ROBERT C. GOODWIN, DIRECTOR, BUREAU OF EMPLOYMENT SECURITY DEPARTMENT OF LABOR, ON EFFECT OF HOUSE ACTION ON 1958 REQUEST FOR SALARIES AND EXPENSES, BUREAU OF EMPLOYMENT SECURITY Mr. Chairman, our adjusted salaries and expenses request for fiscal year 1958 is $6,345,500 and provides for a net increase of 48 positions over 1957. The Bureau has an urgent need for the full amount of this request and I should like to take a few minutes of the committee's time to explain the importance and urgency of this need. We definitely do not have an adequate staff to carry out the responsibilities which have been placed upon us. Our basic problem in the Bureau and our need for more staff arises from the fact that our responsibilities have been expanding, particularly since 1949, and we have not had a corresponding increase in our salaries and expenses appropriation. This problem is illustrated in a set of charts that have been given to you. Part of the expansion has been due to a 30 percent growth in the employment security system (covered workers have increased from 32,500,000 in 1949 to 43 million in 1957; covered employers have increased from 1,460,000 to 2 million in the same period) and part of it has been due to spcific acts of Congress which have added additional functions and responsibilities to the Bureau's basic job. For instance, as shown in the charts there have been 13 separate new laws since 1949 which have added responsibilities to the Bureau. During this same period there has been an overall reduction in the Bureau's staffing of 7 percent. Some of these new functions have not been large and the inclination has been to request the Bureau to absorb the cost. However, other functions have resulted in a big workload increase and the sum total accumulation of additional work has gone way beyond the point where it can be absorbed. Secretary Mitchell has recognized this fact and has been concerned with the inability of the Bureau to meet all of its responsibilities. He therefore asked the Bureau of the Budget for the largest single increase in the Department for this year. Likewise, the Bureau of the Budget approved the largest increase to the Bureau of Employment Security. In spite of this recognition by the Bureau of the Budget and the President, the House reduced the request by $800,000 to $5,558,000. This amount not only fails to provide for an increase, but it imposes on the Bureau the largest reduction in the Department of Labor. In our request for additional funds, we have 14 positions and $87,100 for the older worker program which was financed by an allocation from the Secretary's Office in 1957. These 14 positions are filled and this program is in operation. In addition our request includes funds for 48 positions to work in such areas as bringing our audits up to date and improving management and fiscal functions, correcting known deficiencies in tax operations, improving services to the physically handicapped and young people entering the labor market, preventing improper benefit payments, determining the actuarial adequacy of tax schedules, and improving employment opportunities in communities of chronic labor surplus. The House reduction to $5,558,000 would give us the same dollar amount as our appropriation in 1957. However, this would actually be a cut of $429.540 because we had to absorb retirement costs and other mandatory charges which we did not have in 1957. Only one other bureau in the Department of Labor 91359-57-11 would be required to absorb its retirement costs by the House action. Further, the 1957 appropriation did not include the 14 positions for the older worker program which were provided for in 1957 by an appropriation to the Office of the Secretary. In order to maintain the same staff which we had in 1957 and to pay for the $429,540 of items which must be paid but were not included in our 1957 budget, we would require a minimum of $5,987,540. The $5,558,000 allowed by the House will provide for 69 fewer positions than we had in 1957. During the debate in the House there appeared to be some confusion with regard to the relationship of positions which we could sustain with $5,558,000 in 1958 and the 731 salaries and expenses employees who were on the payroll on February 28, 1957. This confusion arises from the fact that appropriations never cover the full staffing pattern but only those positions that are expected to be filled on the average during the fiscal year. For fiscal year 1957 our staffing pattern provides for 768 positions but the appropriation enabled us to maintain an average number of employees of 737. On February 28 our payroll showed 731 or 6 less than this average. Although we have not had an opportunity to figure out just which persons would be affected in a reduction of 69 people, I am quite certain that it would be necessary for us to lay off people who have been with the Bureau of Employment Security for as long as 15 years. The reductions made by the House will require us to eliminate the intensive program we have been engaged in for 2 years to get more older workers placed in employment. This program is now in its operating stage and is beginning to pay off for the effort which has been put into it. Stopping it now will be wasteful in terms of efforts spent in the last 2 years. This reduction of 69 people in the Bureau's staff would also mean a drastic curtailment or complete abolition of many other going functions of the Bureau. Developmental work for assistance to hard to place groups, such as youth and the handicapped, would be greatly crippled in addition to our operations dealing with areas of substantial labor surplus. In addition, it will not be possible for us to carry out adequately our fiscal responsibilities which are vital in maintaining the integrity of the employment-security system. The salaries and expenses budget of the Bureau of Employment Security and the State grants budget are to finance the administrative structure of the employment-security system which involves the collection of $11 billion in taxes each year and the payment of $1,400 million in benefits a year, as well as the placement of people in more than 15 million jobs. This is a tremendous responsibility and requires efficient operation from an adequate staff. Much more money can be lost from a loose administration of our unemployment-insurance benefits and from failure to get people jobs as quickly as possible than would be saved by the cuts proposed by the House. REQUEST FOR ADDITIONAL POSITIONS Mr. GOODWIN. We had asked for $6,345,500, which would have given us an increase of 48 positions in 1958 over 1957. We felt we needed those very badly because we have been having functions added to the Bureau's work during the last 6 or 7 years, and during that same period there has been an actual decrease in the staff. Since 1949, for instance, we have had a 7-percent decrease in the size of the staff. We have some charts which illustrate this very clearly, and these have been distributed, as I understand, to the members of the committee. Senator HILL. We have them here. Mr. GOODWIN. I would just like to indicate very briefly the story that those charts tell. GROWTH IN NUMBER OF WORKERS COVERED The first one shows the growth in the program. There has been a growth in the covered workers in the program from 32,500,000 in |