Mr. GARY. The committee will come to order. The chairman of the full committee has reorganized the subcommittees and abolished the Committee on Deficiencies and from now on all supplemental requests and requests for deficiencies will be referred to the respective subcommittees that handled the original appropria tions. It is the wish of the chairman that we consider deficiency appropriations at the present time, and leave the supplemental appropriations until the regular hearings. It is for that reason that I have called this hearing this morning to consider certain deficiencies in the Department of the Treasury. I believe one of these occurs in the Office of the Secretary. There, the appropriation for 1964 was $5 million, the deficiency request is for $29,000 as contained in House Document No. 203. We shall insert the justifications at this point in the record. (The justification follows:) TREASURY DEPARTMENT-OFFICE OF THE SECRETARY JUSTIFICATION FOR SUPPLEMENTAL APPROPRIATION FOR THE FISCAL YEAR 1964 A supplemental appropriation in the amount of $29,000 is requested for the Office of the Secretary for the fiscal year 1964 to finance wage board rate increases approved in the fiscal year 1963. Rate increases for the lithographic staff were approved in November of 1962, and for the crafts and custodial staffs in December of 1962. In addition, under the provisions of the Federal Salary Reform Act of 1962 (Public Law 87-793), the basic compensations of the craftsmen responsible for supervising employees were adjusted to rates above those received by their subordinates. These latter increases were approved in March of 1963. The amount requested for the wage board rate increases represents the actual cost after consideration was given to any savings which may be realized through normal turnover. It includes compensation and related personnel service benefits and is for the rate increases granted the following classes of employees: Lithographic_-_-. Crafts and custodial.. Total $2,300 21, 600 5, 100 29,000 The results of the annual review of the rates paid the lithographic and crafts groups were not announced in time for the additional cost to be included in the appropriation estimate requested for the fiscal year 1964. The Office of the Secretary is attempting to absorb part of the cost of the pay adjustments authorized for classified employees by Public Law 87-793; wage board rate increases in the amount of $12,000 approved in the fiscal year 1964; and other unanticipated miscellaneous operating expenses. Therefore, it cannot absorb the additional obligation for the wage board rate increases approved in the fiscal year 1963. CURRENT PAYROLL The amount of the payroll for the period December 22, 1963-January 4, 1964, is equivalent to $4,284,945 on an annual basis. It covered the salaries of 503 employees and included temporary and intermittent appointees as well as personnel performing services on a reimbursable basis. Inasmuch as the adjusted appropriation for the fiscal year 1964 did not provide funds for wage board rate increases approved in 1963, it will not finance the approximately 495 average positions authorized for the current fiscal year. In view of the need for all of the average positions authorized, it is urgently requested that the request for additional funds be approved. Mr. GARY. We have Mr. A. E. Weatherbee, the Administrative Assistant Secretary with us; also, Miss Cullen, the budget officer of the Office of the Secretary. We shall be very glad to hear from you at the present time, Mr. Weatherbee, on this request for a deficiency of $29,000 for the fiscal year 1964. Mr. WEATHERBEE. Mr. Chairman, we certainly appreciate very much the opportunity to come before our regular committee to discuss this supplemental requirement. I have no prepared statement, but we have submitted for the record a justification for this supplemental. As you know, the Bureau of the Budget Mr. GARY. If it is agreeable to the committee, this year, instead of enumerating the pages of justifications to be inserted in the record, we shall leave that to the clerk of the committee, Mr. Gunnels, so that after the hearings he can put in those pages necessary to justify the partciular items that are before us and leave out any extraneous matter. Mr. PILLION. That is perfectly agreeable to me, Mr. Chairman. Mr. GARY. He follows these proceedings very closely so we shall just leave that to him. You may proceed, Mr. Weatherbee, I am sorry for interrupting you. GENERAL STATEMENT Mr. WEATHERBEE. The Bureau of the Budget has certified to the Congress that they have reviewed our request and have included in House Document 203 this $29,000 item. We have been authorized to proceed to expend on a deficiency basis to this extent. Actually, we are considerably short of our requirements this year in addition to the $29,000. We are making every effort to handle the more urgent expenditures by not filling some of the positions during part of the year that we have been authorized by the Congress to fill. Unexpected expenditures we are required to finance but for which we did not receive appropriations are: pay adjustments, to the extent of nearly $20,000; and an increase of communications costs that were unexpected to an extent of almost $16,000. We have found it necessary, in support of the President's tax program, to have a great deal more material prepared for the information of the Congress and in response to public inquiries. This increased our communications costs and also shot up our use of computer time. We had programed activity over at the Bureau of Standards and used their computer, but it has cost us $12,000 to date which we think was well spent, but which we had to take out of something else, of course. Then we had some other minor expenditures that were not anticipated, so, all together it is running about $100,000. Inasmuch as 90 percent of our appropriation is for salaries and related expenses, such as retirement and other benefits, we had no alternative except to leave some positions unfilled to make up some $70,000 of these extra costs. We just do not see how we can make up the rest or the $29,000 for wage board rate increases and that is the reason for this request. We have asked the Congress to consider transfer of the money from the Office of the Treasurer rather than make a supplemental direct appropriation. This money is available from the Office of the Treasurer because of the change in handling of our currency. The Federal Reserve is now putting out Federal Reserve notes, the $1 issue in lieu of the silver certificates. Of course, before, the Office of the Treasurer used its appropriation to purchase these certificates from the Bureau of Engraving and Printing. PROBLEM OF WAGE BOARD INCREASES This problem on wage board increases is a continuing one, especially in agencies or bureaus that have small appropriations because they always are approved after the appropriation request has been filed with the Bureau of the Budget, and you're a year or year and a half or 2 years catching up. But we have absorbed some of the increases this year, of the wage board increases that have been granted this year, some $12,000. That amount is not included in this request here. Mr. GARY. Is this a wage board increase? Mr. WEATHERBEE. Yes. Mr. GARY. How much of this is wage board? Mr. WEATHERBEE. All of this is for wage board increases. Mr. GARY. And you have already absorbed some other deficiency items totaling approximately $75,000; is that my undestanding? Mr. WEATHERBEE. Right; yes, sir. Mr. GARY. Will you explain for the record the procedure followed in determining wage board increases for Government employees? Mr. WEATHERBEE. I will undertake it. In general, the Treasury follows the lead of the Army-Air Force wage board setting authority which covers a good many of the positions, especially here in the Washington area. We do not have a staff or the competence to make these surveys ourselves and I think many of the agencies in Government do this in order to be reasonably consistent in a given area. When they go into effect for the Army, Navy or Defense people, the other agencies try to make the increases effective at about the same time. It is in accord with the intent of the Congress, as I understand it, to have these increases put into effect, whether or not appropriations have been specifically authorized for that purpose at that time. The result is in many cases agencies have to come forward with this kind of a deficiency arrangement and sometimes make requests for supplemental appropriations. Mr. GARY. There is a law providing for these wage board determinations and it is mandatory upon you to follow them; is that right? Mr. BETTS. That is right. Mr. GARY. In addition, that is one exception to the antideficiency rule that where these increases have been determined you can exceed your appropriation by the amount of the wage board increases without violating the antideficiency law? Mr. BETTS. That is right. Mr. WEATHERBEE. That is right, Mr. Chairman. I wonder, since this problem will be the same as the one Bureau of the Customs will present following me, if I could insert for the record a brief paragraph which explains how the effective date of these wage adjustments is set? Mr. GARY. I wish you would. (The matter referred to follows:) EFFECTIVE DATE OF WAGE ADJUSTMENTS The effective dates of wage adjustments under this plan are subject to that part of 72 Stat. 1696 (Public Law 85-872, 85th Congress, approved September 2, 1958) which provides: "(2) if the wage survey is conducted by a department or agency (either alone or with one or more other departments or agencies) and is utilized by any department or agency which did not conduct such wage survey, such increase shall become effective, for the employees of the department or agency utilizing such wage survey, not later than the first day of the first pay period which begins on or after the twentieth day, excluding Saturdays and Sundays, following the date on which the department or agency utilizing such survey receives the data collected in such wage survey and necessary for the granting of such increase." For the jobs subject to this wage plan, the twentyday period prescribed by this law will begin on the earliest date of receipt of the appropriate wage schedule issued by the General Services Administration, by either the Office of Personnel, or by the Bureau concerned, or by the field office concerned; provided, that this rule will apply to Army-Air Force wage schedules for any locality where the General Services Administration does not issue a wage schedule. Mr. GARY. The other increases that you spoke of; are any of those increases due to the consideration of the tax bill? Mr. WEATHERBEE. Yes, but I would not put the burden on the tax bill. We try to make adjustments for any of these special emphasis programs as they come along. The main category of expenditure we have had a problem with this year has been in the paperwork area. There has been so much detail required to explain this, that, or the other clause in either an item that was being considered or proposed, or in preparing replies to those who raise questions about pending items being considered by one or the other of the committees. This has been reflected, of course, in our increase in communications and paperwork handling costs, but we are not making any request of the committee for any adjustment for these purposes. VACANCIES IN POSITIONS What we have done actually, sir, is to use the money that has become available by holding positions open for some time after they have been vacated. For instance, we now have one of the top positions in the Department vacant. Naturally we want to fill it as fast as we can get a qualified employee, but the fact that we have not been able to do that has actually helped us meet some of these costs. That is the position of Director of our Office of Financial Analysis, which you may recall the Secretary was interested in having established to look to as his counterpart of the President's Council of Economic Advisers. Another position that was vacated just this past week was the position of Deputy Assistant to the Secretary for Congressional Re |