Page images
PDF
EPUB

in the province of the budget message and the Budget Bureau. I do not feel that the Council really has the competence to evaluate these in detail. We did have some

Senator PROXMIRE. You certainly have the only competence in Government as I see it, to evaluate the economic impact in detail, to tell us what defense spending is doing. For instance, yesterday we had testimony from Assistant Secretary Charles of the Defense Department, in which he conceded that there was extraordinary inflation in those industries in which we have a great deal of defense procurement, and I am convinced that the principal reason for this extraordinary inflation is because of the impact of our procurement policies and practices with the kinds of contracts we have, and so forth. This is something that seems to me in view of the problem of inflation that the Council of Economic Advisers should tell us about, explain to us, give us some recommendations on.

Mr. OKUN. We do call attention to that in chapter 3 of our Report.1 We speak of the importance of efficiency in procurement practices and talk about some of the reforms and improvements there. I call your attention to pages 113 and 114 of the Council's Report.

Senator PROXMIRE. But at no place do you as I understand it, or perhaps the Council has and I missed it, recommended fiscal restraints on the defense budget.

Mr. OKUN. We feel that the estimate of defense expenditures in the budget has been reviewed and is the administration's view on what a minimum necessary budget is for that purpose. Obviously, any program is subject to further refinement and greater efficiency and if that can be achieved, all to the better. But I think our job has to begin by taking the figure that my colleague and his staff and the people in the Defense Department develop, present to the President, get his approval on it, as the desirable minimum defense needs of the country. Senator PROXMIRE. Let me ask Mr. Zwick: the Subcommittee on Economy in Government has been holding hearings, Mr. Zwick, on military procurement, which is the largest single item, as you know, in the military budget. It is $40 or $43 billion, depending on precisely how you define it. Testimony has shown that there is widespread mismanagement and waste and inefficiency in defense purchasing. Mr. Charles, who some people feel wrote the book in the Air Force area on procurement, a very competent man, agreed yesterday with what Admiral Rickover had estimated-and others that when we procure on a noncompetitive basis, we pay 30 to 40 percent more than if we procure on a competitive basis and, of course, the overwhelming amount of our procurement is noncompetitive.

Furthermore, Admiral Rickover estimates that at least $2 billion per year is wasted exclusive of that from procurements because of high profits. So I would like to ask you this question: Does the Bureau of the Budget scrutinize the defense budget with the knowledge of the immense waste in this program? [Laughter.]

Mr. ZwICK. Let me comment several different ways. Let me first join with all in our interest in efficient government and efficient management. A major responsibility of the Bureau of the Budget is this

1 "Economic Report of the President, Transmitted to the Congress, January 1969, Together with the Annual Report of the Coucil of Economic Advisers," available from Superintendent of Documents, U.S. Government Printing Office, Washington, D.C.

area of management efficiency. Second, let me go directly to the general charges of waste. They are obviously easy to make. The Congressional Quarterly study in particular is one that both Secretary Clifford and I commented on last fall when you asked for our comments on them. I find a great number of items in which I certainly cannot concur. It is not only waste we are dealing with, but an issue of national security.

Senator PROXMIRE. That is why I asked Mr. Okun about the Congressional Quarterly. I would wholeheartedly agree that the Congressional Quarterly recommendations which I support are a matter of defense strategy in part, although they said that half of their recommendation was to reduce military personnel which they say was wasted so badly. They point out, for example, that we have 20 officers in Vietnam for every command post; that we have the greatest ratio of logistical supply to supply troops in the history of mankind by far in Vietnam. But I am asking you about whether or not the defense budget is scrutinized as carefully as, for example, dollar for dollar, as the OEO budget and HUD budget, and so forth.

Mr. ZwICK. This is a replay on our discussion last September. Defense is a big department. We obviously do not get into as great detail in that Department as we do in some other departments. This varies from department to department.

The analogy-the counterexample I gave you last September-was the Post Office. At that time the Postmaster General was about to close down certain fourth-class post offices because of the Revenue and Expenditure Control Act employment rollback_provision.

I do not try to second guess the Postmaster General as to how to reduce personnel. Similarly, I do not try to second guess the Joint Chiefs of Staff as to the need for support personnel in Vietnam. Obviously, that is related to providing essential equipment to the people in the field, and we have to think a little bit about effectiveness in support of our people.

I cannot say to you that we give equal, evenhanded treatment to all agencies. But I think it is a mistake to say that we treat Defense in one fashion and all other agencies in another fashion.

Senator PROXMIRE. I will be back. My time is up.

Chairman PATMAN. Mr. Rumsfeld?

Representative RUMSFELD. Mr. Zwick, I would like to turn the conversation from a discussion of simply the quantitative approach which seems to be the focus of much of the material before us, and ask some questions about the qualitative aspects of some of this.

I notice in one of your budget documents, the smaller one,1 on pages 66 and 67, that you have a budget outlay by function and subfunction. Mr. ZWICK. Yes.

Representative RUMSFELD. Now, obviously these subfunctions cut across different departments and agencies. Some programs that are tabulated there with dollar figures for fiscal years 1959 through 1970 are in one department, some in another, within the same function. Is that correct?

Mr. ZwICK. That is correct.

1 "The Budget in Brief, Fiscal Year 1970," available from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C.

Representative RUMSFELD. Now, to compile that information you use computers and feed in figures that have come from various agencies after you have decided which functional category you want to use. Then you ascertain which activities in each department or agency fit within that function or subfunction. Is that right?

Mr. ZwICK. Yes.

Representative RUMSFELD. So somewhere you have a list of all the programs by statute that comprise each one of the aggregate figures in each function and subfunction. Right?

Mr. Zwick. We have all the appropriation accounts classified by function and subfunction.

Representative RUMSFELD. Right. But I mean arranged by function and subfunction.

Mr. ZWICK. Yes.

Representative RUMSFELD. Comumnity development and housing; education and manpower is another function.

Mr. ZwICK. Yes.

Representative RUMSFELD. Commerce and transportation; natural resources; right?

Mr. ZwICK. Right.

Representative RUMSFELD. Now, if you have that material then you also have material that would indicate what the cost or funding for each one of those statutory programs might be, regardless of the department, arranged by function, and so forth.

Mr. ZwICK. Right; yes.

Representative RUMSFELD. Then, you also have information which would indicate the units of some kind of a benefit or goal. For example, if it is housing, the number of housing units. If it is training, the number of hours of training per person; right?

Mr. ZwICK. You are, of course, defining the planning, programing, and budgeting system.

Representative RUMSFELD. Right.

Mr. ZwICK. I will be happy either to interrupt at this point and say what we are doing

Representative RUMSFELD. You have that?

Mr. ZWICK. We have attempts at this type of information. Again, I think it would be unfair to leave the impression that we have somewhere down in the Executive Office nice, neat, benefit-to-cost ratios so that you can just array all programs and then slice the line at some point, and "above" they go in and "below" they go out. Let me give you an example.

Representative RUMSFELD. No. Let me go on a minute. I want to make sure I understand exactly what you do and do not have. You have had this information broken down roughly by the types of people that benefit, for example, by sex, by age group?

Mr. ZWICK. That is right; in some cases.

Representative RUMSFELD. By race, by the area they live in, urban, suburban, rural, that kind of information. You have all of that? Mr. ZwICK. No; I am sorry.

Representative RUMSFELD. You have part of it?

Mr. ZwICK. We are making attempts to gather that information. The certainty with which you are saying this is what is making me nervous. The concept

Representative RUMSFELD. The last thing I want to do is make you nervous at one of your last appearances.

Mr. Zwick. The concept is fine. The detail and accuracy I still question.

Representative RUMSFELD. You talked about all the money you are going to spend in crime, as I recall, when you were responding to one of the questions.

Mr. ZwICK. Right.

Representative RUMSFELD. Do you have a function on crime here? Mr. ZWICK. We have a new special analysis on crime reduction in the "Special Analysis" volume of the 1970 Budget. I think again, it is a very good example of the point you are making. We thought this was a very important new cross-cutting look which we ought to take at the budget.

Representative RUMSFELD. What is the name of that book?

Mr. ZwICK. "Special Analysis of the 1970 Budget" 1 We have for the first time an analysis of crime control programs in the Federal Government, across agencies and by activities within the agencies. Now, again, that is a preliminary first start. Hopefully, next year it will be better, and the year after that it will be still better. But certainly we agree in spirit, I think, with what you are saying.

Representative RUMSFELD. Well now, with regards to the kinds of data I have just described, what percentage of input into this system do you have? In other words, where are you, for example, in natural resources, commerce and transportation, by these broad functions? Do you have 50 percent of the data you need to present an intelligible analysis of what we are doing with the taxpayers' money or do you feel we are down around 30 percent total?

Mr. Zwick. The best way I can answer that question is to try to measure the progress we have made. I do not quite know what the base is but I know the progress we have made and I am

Representative RUMSFELD. We started from a very low base.

Mr. ZwICK. I am quite clear that we have made significant progress. I think over the last 32 years since the planning-programingbudgeting system has been put in, we have demonstrated to my satisfaction the applicability of this approach across the Government. In some areas we have better data; in other areas, poorer data. A composite index that says that it is 58 or 72, I just do not know how to construct that. You will also find, Mr. Rumsfeld, in this special analyses volume for the first time, we have a new analysis which lays out the analytical program structures of the PPB system, the first time you have it available to the Congress. This analysis shows, by agency, the program structure and requested appropriations and other budget authority. It is the very last analysis, starting on page 258, and you will note the first word is "selected," but I think that

1 Available from Superintendent of Documents, U.S. Government Printing Office, Washington, D.C.

"selected" covers roughly 95 percent of the budget authority, so that I think I can say we have made substantial progress. I would be less than candid if I did not say we have got a very, very long way to go in this area.

Representative RUMSFELD. OK.

Mr. ZwICK. But the dialog has been improved significantly.

Representative RUMSFELD. You have seen the data so you can make a judgment as to how far we have to go. I would be curious to know how far we have to go. You have just described the information that you have by function and subfunction and you have indicated you have some of the data, and you do not have some. Taking "natural resources" as a function, or even as one of these subfunctions, if I asked you for the kinds of information that you do have, how it affects people, areas, types of people, and costs and unit benefit, could you supply that information to this committee?

Mr. Zwick. We have worked with all committees. Again, what I would not like to provide you—let me tell you what I would not want to provide.

Representative RUMSFELD. Can you provide the data I just asked

for.

Mr. ZwICK. We would provide all useful data. There are some first runs on benefit-cost analysis which I do not believe answers all you want.

Representative RUMSFELD. I understand that.

Mr. ZWICK. All I am trying to say is what I think is the mostRepresentative RUMSFELD. What you think is reasonably accu

rate

Mr. ZWICK. Surely.

Representative RUMSFELD (continuing). You could supply it in the format that I described?

Mr. ZwICK. Yes. All agencies work with their appropriations committees now and given them that sort of information. So that I do not think there is any problem.

Again, I went through a similar dialog with Chairman Proxmire last September. I do not think the problem is information downtown compared with information uptown. I think the problem is intellectual. We do not understand some of these things. The problem is just plain hard work. We have got to collect data, clean up data, et cetera. Representative RUMSFELD. There is a great deal I do not understand. Mr. ZwICK. I think it is really a mistake to think the problem is what data one side of the Government has and the other side of the Government does not have. It is just that we have a long way to go in developing data.

Let me just give you one very specific example in the manpower

area.

Representative RUMSFELD. In a minute a piece of paper is going to be put in front of me saying my 10 minutes are up, and before that happens I would like to request that the chairman suggest that your Bureau, supply the committee with the data that you do have and that you say you would be happy to make available.

« PreviousContinue »