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new authority, the number of persons rehabilitated will increase from 135,000 in 1965 to 207,300 in 1967. To provide the skilled manpower needed to achieve our goals, our 1967 budget includes a higher level of support for the training program, particularly for long-term traineeships.

In a related development, the 1965 social security amendments for the first time provided for the payment from trust funds for vocational rehabilitation services to disability insurance beneficiaries. This program is also being administered by the Vocational Rehabilitation Administration.

SOCIAL SECURITY I have already mentioned the new health insurance and rehabilitation programs established in the 1965 social security amendments. The amendments also affected other parts of the social insurance programs. The new law provided the first general increase in social security cash benefits since 1958. The amendments also liberalized the definition of disability, and provided for the continuation of benefits to disabled workers children who attend school after reaching age 18. With the changes in the law, we estimate that in 1967 about 22.7 million persons will receive over $20.8 billion in old-age, survivors, and disability insurance benefits.

PUBLIC ASSISTANCE The 1965 Social Security Act Amendments also made significant improvements in Federal programs to provide money, payments to needy individuals and families and expanded authorizations for social welfare services needed by these persons as well as others in our society. These new and improved efforts enable us to build on the basic and important programs of public assistance and child welfare, recognizing them as central to the overall campaign to ameliorate and overcome the effects of poverty and to prevent dependency whenever possible.

Under the public assistance programs, part of the increased Federal requirements in fiscal year 1967 are related to newly authorized program changes designed to stimulate States and localities to make more adequate payments to needy recipients, to provide greater incentives to recipients who have the potential to seek employment and rehabilita tion opportunities, and to include new groups of needy persons not previously eligible under the federally assisted programs.

In addition to their medical assistance aspects, the public assistance programs as they have been modified and strengthened by Congress in recent years provide the chief means of aiding those who live below the poverty level. The Federal, State, and local funds that support these programs assist approximately 2.8 million needy aged, blind, and disabled persons each month, and they also assist about 3.5 million chil. dren and over 1 million adults in families caring for these dependent children. Social services without money payments reach several hundred thousand additional persons.

ADMINISTRATION ON AGING The Older Americans Act of 1965 established a new agency within our Department--the Administration on Aging. It also authorized a program of support for community planning, services, and training in the field of againg, and for contracts for research, demonstration, and training projects. The dimensions of the needs in these areas are reflected dramatically in the number of older Americans and the paucity of the resources now available to serve them. Prior to the Older Americans Act, only about 800 of some 18.000 communities in the United States had established groups planning coordinated programs for the elderly. By 1970, we estimate a need for 7.500 persons trained in the area of aging. Our 1967 budget requests increases in all programs under the act to begin to meet the identified need.

DEPARTMENTAL LEADERSHIP Mr. Chairman, as I hare already indicated, first among the things that we must do in 1967 is the task of insuring that these many neir programs and responsibilities get off to a good start and operate smoothly and effectively.

During the half dozen months that have passed since I became Secretary, I have devoted particular attention to the selection of key personnel to insure leadership and direction both at the departmental level and at the operating agency level. During this time, we have, with the support of the Congress, established additional Assistant Secretariesall of which have been filled—and we have also established and filled a number of other key positions in my own office, including a Special Assistant for Civil Rights—an area to which I plan to give a great deal of attention during the coming year. At the operating agency level, we have appointed a new Surgeon General, and new Commissioners of Education, Food and Drugs, and Aging. We still have before us the task of selecting a commissioner to head the newly organized Federal Water Pollution Control Administration and certain other key positions at the operating agency level. Our objective here is to bring the Department's activities closer together and to improve leadership at every level.

Although I am gratified by our accomplishments thus far, I nevertheless see a need to strengthen and improve our organizational structure and our ability to provide leadership and staff support throughout the Department. A number of proposals to this end are contained in the budgets of the operating agencies and the budget request for the Office of the Secretary. I submit these proposals to you and urge their adoption.

If I may insert one comment here, Mr. Chairman, I want to emphasize as strongly as I can the great need for effective management of these programs. It seems to me that nothing can thwart the intent of Congress more effectively than bad management. If someone is trying to thwart you deliberately, you have a chance to get at him, but if he is thwarting you because he is managing a program badly, there is little you can do. It seems to me anything I can do to get these programs off to an effective start to meet the intent of Congress will be to the benefit of all of us.

CONCLUSION That concludes my statement, Mr. Chairman. I strongly urge your approval of our 1967 budget, which will enable us to achieve sub

stantial progress in meeting identified needs in the areas of health, education, and welfare.

I shall be happy to try to answer any questions that the committee may wish to ask. However, before proceeding with the committee's questions, I would like, with your permission, to highlight the organizational arrangements and staff changes which we have made and the approach we are taking to strengthen mangement and coordination of the complex and interrelated programs of the Department.

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ORGANIZATIONAL ARRANGEMENTS WITHIN THE DEPARTMENT
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Mr. FOGARTY. Go right ahead.
(The chart referred to follows:)

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The Saschen

January 18, 1966

Secretary GARDNER. First of all, I want to say, as I said in my earlier testimony, that the point of this way of organizing the Department is to carry these programs out in accordance with the intent of ('ongress. The immediate Office of the Secretary and U'nder Secretary is a very closely operating unit. I intend to use Mr. Cohen as my deputy, my alter ego. He is in touch with me at all times. He knows everything I am doing, and he serves in my behalf when I am not around. There is no problem of enough for the Under Secretary to do. He is a very, very busy man. I am going to pass over the assistant secretaries for a moment and come down to the operating agencies, because to me this is the heart of what we are trying to do.

As you see, we now have nine operating agencies with some current discussion about the Federal Water Pollution Control Administration. We have nine operating heads and every one of those operating heads reports directly to me. There is no layering of these operating people. I do not believe in putting buffers between myself and the people runnning our major agencies. It is my concern to strengthen their position as much as I possibly can and to serve them as much as I can. I won't comment on these various boxes [indicating the operating agencies), since you know them very well.

Mr. FOGARTY. What are the stars for?

Secretary GARDNER. The stars represent either new jobs or new men in old jobs. The stars on the chart show you the scope of change in the management area. You can see at a glance how many new people we have brought in. The blue boxes represent posts that did not exist before.

Now let me talk about these people [indicating), the Assistant Secretaries. This is a staff level, and you have some classic and easily recognized staff functions, which I will, of course, depend on very heavily and particularly in terms of pulling the Department together. We have taken the budget function from the Assistant Secretary for Administration and upgraded the job; Jim Kelly, who handled it before, is handling it now. He has a very important role in the new setup. The job of the Assistant Secretary for Administration is more familiar. It involves personnel, general services, security, and a variety of other functions. The roles of the General ('ounsel and the Assistant Secretary for Legislation you are familiar with. The new Assistant Secretary for Program (oordination, William Gorham, has been brought over from the Pentagon. He will be in charge of program planning and evaluation of the sort that was developed over there. It is still in the experimental phase here.

Finally, there are four substantive Assistant Secretaries. Their functions concern many agencies. These four Assistant Secretaries have advisory and coordinating responsibilities concerning the subject matter identified with their title. Frank Keppel will concern himself with education programs wherever they occur in the Department and wherever they occur outside of the Department. He will serve, in his responsibilities outside of the Department, as Chairman of the InterAgency Council on Education, and in this role he will concern himself with relating our education programs to those of the National Science Foundation and other Federal agencies--and a great many Federal agencies have some involvement with education. Inside the Departnent, Mr. Keppel will concern himself with the education matters

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