ing the NOAA Corp. and privatizing all nautical charting, I would urge someone to do a little cost-benefit analysis. The conventional wisdom is that it is always cheaper to contract work out. This is always the case.

To summarize: if the decision is made to abolish the Department of Commerce, NOAA, its largest single component should be transferred in-total to another department or agency, or made an independent agency. Breaking up NOAA is a terrible mistake. Once a decision is made as to where NOAA should go, Congress can decide what functions it wishes to strip from NOAA, and which functions, if any, it wishes to privatize. This bill, which breaks up NOAA and reorganizes the pieces, does a major disservice to a well-run, competent organization where the synergy of combining ocean and atmospheric functions is well recognized, and envied by our colleagues in much of the developed world.

Chairman ROTH. Thank you, Mr. Knauss. It is a pleasure to welcome you back, Mr. Comarow.

TESTIMONY OF MURRAY COMAROW, THE AMERICAN

UNIVERSITY

Mr. COMAROW. And thank you for asking me back, sir. I would like to apologize for a typographical error on the fourth line of my prepared statement. It should refer to a July 20 letter, rather than a July 29 letter. I make no claim for prescience in this connection. Mr. Chairman, I have taken the various questions that you put to me in that July 20 letter and reorganized and rephrased them slightly, so that I could respond to each one as best I could. Perhaps the most important question that you asked was "what principles of organization should be applied in organizing natural resources and environmental functions?"

Mr. Chairman, these principles are contained in one of the memoranda of the Ash Council to the president. That is the memorandum pertaining to environmental functions, oddly enough. In fact, in the memorandum to the president on organizing a Department of Natural Resources, the Council simply referred to the principles contained in the memorandum which recommended the Environmental Protection Agency.

Those principles are as follows: first, there is no perfect organization. No structural arrangement can reconcile all interests. Opposing interests should be drawn together at the right levels of Government, so that the vast majority of conflicts are resolved below the level of the executive office.

Listening to the previous panel, Mr. Chairman, I could not help but wonder why one organization dealing with different aspects of international trade would not be a good idea, in that it could make trade-offs that otherwise will have to be made at the level of the president.

The next principle: the objectives of an agency must be plainly set out and must respond to a distinct and enduring public need. The fourth, there must be some assurance that the functions to be housed in a single agency not only belong together, but that the package can be managed efficiently.

And finally, the executive branch should be so structured that a high order of public interest is served in making policy rather than a narrow advocacy position. Translation, client-centered departments, by and large, are not favorably viewed.

Mr. Chairman, in light of these principles, it might

Chairman ROTH. Let me ask a question there, because I think you make an important point. At the same time politically, as you

well know, whether it is labor or business or whatever group, feel they want to have some say in their Government. Normally, they think it is critically important that it be at the cabinet level.

If you go the direction you are talking about, how do you satisfy this political need that varying groups do have an opportunity to promote their interests and concerns?

Mr. COMAROW. Take the example that you suggested, Mr. Chairman. Labor certainly is entitled to representation. So is business. So are women. So are children. So are Hispanics. So are computer operators. Everybody is entitled to fair representation.

I am aware of no principle of governance, nor of any constitutional history, that suggests that a specific interest group is entitled to a specific department all its own. If you had a Department of Economic Affairs, which was one of the Council's recommendations, labor would certainly be entitled to a voice within that department and would have a part of that department looking at the interests of labor. But the same department would have other bureaus or offices interested in the values of business and in the general public interest.

And those trade-offs, it struck the Council-and to this day strike me as being a healthy way to look at Government.

Chairman ROTH. Please proceed.

Mr. COMAROW. Mr. Chairman, you asked about my thoughts on the organization, management, and performance of natural resource and environmental agencies. I would not dare to comment on the management or performance of these agencies. I have simply not had the duty of studying them for a very long time.

But as to organization, I think that a good deal could be done in the direction of forming a true department of natural resources. It still seems like a powerful and productive idea. I would not for a moment suggest that you simply take the Council's recommendations and forward them to the Congress. But they ought to be considered as an important part of history and as a sound analytic effort.

We had the advantage then of having access to every expert that we could find, not only in this country but everywhere. We sat with them, economists, political scientists, business executives, people of great experience and great wisdom for many weeks and months. We held group discussions, we held many one on one interviews. And we found an enormous interest in and advocacy of a more rational cabinet structure, including among other things-a Department of Natural Resources.

I have turned over to your staff, Mr. Chairman, copies of the original memoranda of the Council to the president which go into far more detail than the booklets which the Committee has at its disposal.

Mr. Chairman, I am very troubled by something which seems to be in the air, in the Congress, and the press. That is, it would be a great idea to eliminate the Department of Commerce, or eliminate some other cabinet department.

My statement makes clear that I did not regard the Department of Commerce as a true department 25 years ago and I do not regard it as a true department today. Indeed, it is a candidate for very careful examination. But the essence of the effort ought not

to be to eliminate a department. The essence of the effort ought to be that the specific functions within the Department of Commerce and other departments should be carefully examined one by one.

Decisions need to be made whether those functions belong in Government. If not, then they should not be in Government. If they do belong in Government, we go to the next step. Where in Government should they belong? Only then would I organize them in some such fashion as the Council has recommended, updated to take changes into account.

If, as a result of that analysis, the Department of Commerce is dismantled or downsized, that is fine. I have no doubt that a great deal can be done in that direction.

Exactly the same pressures to eliminate were felt by the Council. These were six conservative people who were very much interested in simplifying and down-sizing Government, although the word down-sizing had not become part of the jargon as it is today.

We were looking hard for opportunities to cut back on Government. Yet that same Council recommended the creation of a new Government agency, the Environmental Protection Agency. I still think that was a very good idea, because I do not believe that the environmental function within an existing agency can really work.

I see the red light is on, Mr. Chairman. Thank you very much for your attention. I will be glad to answer any questions you may have.

[The prepared statement of Mr. Comarow follows:]

PREPARED STATEMENT OF MURRAY COMAROW

When I testified before this Committee on May 18, 1995, I did not expect to be invited back so soon. If I may say so without seeming presumptuous, Mr. Chairman, I am extremely impressed with the pace and intensity of these hearings.

To respond fully to your July 29 letter would take weeks-perhaps months. Permit me, if you will, to carve out those areas where my views might be of some interest. The Committee's questions (paraphrased) are followed by my responses.

1. What principles of organization should be applied in organizing natural resources and environmental functions?

I have furnished the Committee staff with four memoranda to the President from the President's Advisory Council on Executive Organization ("Ash Council"). Totalling over 80 pages, their subjects and dates are:

• Oceanography and Atmospheric Programs Organization, dated January 16,

1970.

• Federal Organization for Environmental Protection, dated April 29, 1970.

• The Establishment of a Department of Natural Resources, two memos dated May 12, 1970.

Each memorandum discusses, in slightly different ways, the organizing principles which animated the Council's recommendations. They boil down to what may appear to be common sense observations, but in fact these principles are commonly overlooked, distorted, or misunderstood.

(1) No structural arrangement can reconcile all interests or resolve all conflicts; nevertheless, there is no substitute for logical assignment of functions and establishment of centers of accountability.

(2) Opposing interests should be drawn together at the right levels of government, so that the vast majority of conflicts are resolved below the level of the Executive Office.

(3) The objectives of an agency must be plainly set out, and must respond to a distinct and enduring public need.

(4) There must be some assurance that the functions to be housed in a single agency not only belong together, but that the package can be managed efficiently.

(5) The Executive branch should be so structured that a high order of public interest is served in making policy, rather than a narrower advocacy position. To these principles I would add a cautionary note. Even the best planned structural change disrupts an organization for a long time. The costs are high and they must be paid. Change agents should have strong reasons to act, compelling evidence that the game is worth the candle.

2. What are your views on the missions and functions of the Department of Commerce?

The Department of Commerce is not and never was a coherent organization. Its melange of functions defy organizing principles. To say this casts no aspersion whatsoever on its missions from international trade to weather forecasting to telecommunications-much less on the dedication of the Department's men and women. Moreover, the Department is largely client-centered, violating organizing principles (2) and (5). The same is true of Labor, Agriculture, Transportation, and Veterans Affairs. The Council would have dismantled all of these except Veterans Affairs, which it decided not to waste a spear upon. It recommended that most of the functions of Commerce, Labor, Agriculture and Transportation be combined in a Department of Economic Affairs, a proposal which may well warrant the Committee's attention.

If the Committee finds that Commerce should be disestablished, its work has only begun. Decisions as to where its components logically belong are complex, and should be made only after careful analysis. To substitute one ill-conceived structure for another would hardly constitute progress.

3. What are your thoughts on the organization, management and performance of natural resource and environmental agencies?

I have only a general impression of the way these agencies are managed and perform and would not presume to comment. As to organization, however, I believe it is plain that much could be done to conform the natural resources agencies to sound organizing concepts.

Much has happened in the quarter of a century since the Council was formed, but the notion of a true Department of Natural Resources (DNR) still seems a powerful and productive idea. The bureaus and functions which could make up such a Department are listed and described in detail in Appendix B of the Council's memorandum to the President of May 12, 1970.

They include, inter alia, most components of Interior (including the Power Administrations); Agriculture (e.g., Forest Service); the Civil Works of the Corps of Engineers; and other functions. These would be organized into five logical centers of responsibility

• Land and Recreation

• Water Resources

• Energy and Mineral Resources

• Marine Resources and Technology

Geophysical Science Services.

Appendix C of the same memorandum contains the Council's views on "Indian and Territorial Programs." These would remain in DNR, but in a significantly changed environment.

The Committee has undoubtedly noted that the DNR does not include responsibilities for overall regulation of the environment. The reasons for this may be of interest, since some argue for incorporating the Environmental Protection Agency into some kind of natural resources department.

Why did six conservative men, advisers to a conservative president, advocate creation of yet another federal agency, the EPA? The Council's staff was divided; the Secretaries of Interior, Health, Education and Welfare, Housing and Urban Development, and Transportation all lobbied the Council for the job. In the end-and somewhat to its own surprise-the Council voted unanimously for an independent agen

cy.

The detailed rationale is set forth in the April 29, 1970 memorandum to the President, but it comes to this:

• Each agency's view of the environment would be influenced by its primary mission.

• Environmental administration must reconcile divergent interests and deal with competing social and economic claims.

• The key standard-setting function should be performed outside the agencies whose interests affect those standards.

These considerations, Mr. Chairman, are still important. It would be a serious blunder to fold EPA into a larger department under the banner of "eliminating a government agency."

4. What is the proper federal role of the National Oceanic and Atmospheric Administration?

In 1969, the Stratton Commission recommended that a new agency, the National Oceanographic and Atmospheric Administration, be established. President Nixon requested the Council's views; the Council recommended against it.

In its January 16, 1970 memorandum, the Council pointed out that NOAA is “organized around means rather than purposes or objectives," and that the common medium of the sea does not call for an agency to deal with "food production, weather administration, pollution problems, and coastal management.

The Council suggested six alternatives to the President. The sixth was to place NOAA in Commerce. That is the genesis of Reorganization Plan No. 4 of 1970 (5 U.S.C. app.), which formed NOAA as a bureau in Commerce. While that presidential decision avoided creating NOAA as an independent agency, it did not address the more fundamental flaw in its design, i.e., that it is not organized around purpose. A number of agencies perform related functions-several Interior bureaus such as the U.S. Geological Survey and the Fish and Wildlife Service; the Environmental Protection Agency; and others. If NOAA were to be disbanded, extreme care should be taken to relocate NOAA's important functions in settings where they can contribute more directly to governmental objectives.

5. What opportunities exist to reduce costs and improve service through privatization?

As I suggested in May, Mr. Chairman, the Committee should be extremely short with any witness who advocates "privatization" without defining it. It has become a buzzword, an imprecise synonym for corporatization, deregulation, commercialization, contracting out, devolution, and other terms. I take privatization to mean turning the function over to the private sector, lock, stock and barrel. As I eyeball the missions of the Commerce Department, it is hard to assume that the market is likely to produce better fishing, navigation, long-range climate forecasts, and the like. A very difficult conclusion may be reached about contracting out, which seems to offer more realistic opportunities to exploit private sector skills and incentives while maintaining control over quintessentially government functions. My sense is that careful experimentation with contracting out selected functions is worth studying. Thank you for your invitation, Mr. Chairman. I would welcome the Committee's questions.

Chairman ROTH. Thank you. We will wait until we finish the panel. Mr. Smith, executive director, Commercial Weather Services Association.

TESTIMONY OF JEFFREY C. SMITH, EXECUTIVE DIRECTOR, COMMERCIAL WEATHER SERVICES ASSOCIATION

Mr. SMITH. Good afternoon, Mr. Chairman.

I am here to talk about the single largest part of Commerce, and that is NOAA. Just briefly, our point is that NOAA has some very valuable and important functions. To our industry, which represents private weather forecasters, companies that provide weather data and products to the public, to users, to the media. For example, all three television stations in Washington, both major newspapers, and most of the radio stations here in Washington are all provided services by our members or private forecasters.

We believe that NOAA has some important functions. We do believe that most of those functions can be privatized or streamlined. Just in the past 5 years, NOAA's budget has increased from $1.3 billion to $2 billion today. That is a significant increase and we think that really three steps could be taken to get NOAA's budget under control while the Commerce Department's future is considered, while at the same time increasing the efficiency and the important roles of NOAA.