of what is going on, and he is head, as I believe, of the Civilian Commission. Is that not right? Mr. BIFFLE. No, General North is secretary. I am just a member. Senator ROBERTSON. Anyway, he is very familiar with what is involved, and his words carry great weight with our colleagues of the Senate. I think he should say just a word to us about this need as an essential for the recognition of men who, as Pericles said, "gave their bodies to the commonwealth." Senator MAYBANK. I might say Mr. Biffle has been to all these cemeteries. Mr. BIFFLE. Yes; I have been to the cemeteries. I made one trip at the expense of the Commission, and this last trip I made was at my own expense. So I am very interested in the cemeteries. I don't want to criticize the work of the House, but I do know that we must have additional funds to carry on the work. Thank you, Mr. Chairman. EXECUTIVE OFFICE OF THE PRESIDENT COUNCIL OF ECONOMIC ADVISERS STATEMENTS OF LEON H. KEYSERLING, CHAIRMAN, JOHN D. CLARK, ROY BLOUGH, MEMBERS, AND ROBERT GARLOCK, ADMINISTRATIVE OFFICER, COUNCIL OF ECONOMIC ADVISERS Senator MAYBANK. Mr. Keyserling, will you come up, sir? I want to place in the record the letter you wrote me under date of the 21st of March, in which you went into the cuts that the Subcommittee in the House made on your agency. (The letter referred to follows:) EXECUTIVE OFFICE OF THE PRESIDENT, COUNCIL OF ECONOMIC ADVISERS, Hon. BURNET R. MAYBANK, United States Senate, Washington, D. C. DEAR SENATOR MAYBANK: This is in response to your letter of March 18, regarding the appropriation for the Council of Economic Advisers as contained in the Independent Offices Appropriation bill for the fiscal year 1953. The House Appropriations Committee recommended $308,900 for the Council of Economic Advisers, which was about $40,000 less than requested in the budget. The Council was not disposed to ask for an opportunity to be heard in connection with this cut, since we recognize the economy considerations contained in your letter of March 18. However, on the floor of the House yesterday, and without adequate debate or consideration, an amendment was adopted reducing the funds for the Council from $308,900 recommended by the House Appropriations Committee to $208,900-a reduction of $100,000, or about 33 percent below the level recommended by the House committee, and about 40 percent below the level recommended in the budget. A cut of this magnitude and proportion, in view of the extremely small size of the total Council staff, and in view of the economy which I believe you know we have always practiced, would be absolutely crippling in character and in fact, would amount to a legislative determination to interrupt our necessary functions rather than merely a determination toward economy in appropriations. Consequently, the Council requests an opportunity to be heard before your committee on this matter when the bill as passed by the House comes before you, and in advance of such hearings we will submit to you a factual summary of our position. Very sincerely yours, LEON H. KEYSERLING, Chairman. 1953 BUDGET REQUEST Senator MAYBANK. I would appreciate it if you would let us know how much the budget gave you, how much the House cut you from the budget, in that order, and then discuss your views as to the needed additions. Mr. KEYSERLING. Well, Mr. Chairman, and members of the committee, I will first summarize the facts and then answer your questions on the significance of them. The budget request for our agency for fiscal 1953 was $349,000. That would have permitted us to retain a staff of 36 members, aside from the 3 members of the Council. It would not have provided an increase in staff, although our workload has been progressively heavier as the economic problems of the Government have mounted. Senator MAYBANK. They have amounted to a great deal more since you left the House hearings; have they not? Mr. KEYSERLING. Well, I will be glad to answer questions on that, Senator, when we come to it. They have. HOUSE CUT The House committee cut us from $349,000 to $308,900. That was an 11-percent cut. That cut would have necessitated a reduction in our staff by about 16 percent, because, as a small organization, we have certain fixed administrative expenses; the salaries of the members of the Council; an inescapable minimum of statutory reports; and certain fixed obligations, like printing, office supplies, telephone services, and so forth, that couldn't be contracted much in our organization. So the effect of the House Appropriations Committee cut would have been to reduce our staff by about 16 percent, or one-sixth, or from 36 to about 30. I want to testify also at this point that the Council staff is made up of about half professional and half clerical personnel, so that the consequences of this 16 percent cut would have been a reduction in our professional staff, which is what we do our work with, from about 18 to 15. Now, that was the House committee. Senator MAYBANK. How much in dollars was that? Mr. KEYSERLING. That was a cut from $349,000 to $308,900, or about $40,000. Then we went before the House, and in the morning hours of House debate an amendment was introduced and passed-I don't know what the record on it was, because there was no record-which cut us from the $308,900 made available by the House committee, to $208,900. Senator MAYBANK. In other words, the House cut the committee's recommendations? Mr. KEYSERLING. The House cut the committee's recommendations. The committee's recommendations cut us 11 percent below the budget. The House action cut us 40 percent below the budget. Senator ROBERTSON. That was, in your opinion, cutting below the belt? Mr. KEYSERLING. Yes sir, cutting below the belt. PERSONNEL CUT Allowing again for a certain irreducible minimum of fixed expenses and a very small organization, the effect of the cut on the House floor would be to reduce our staff by approximately 50 percent. In other words, it would cut our personnel from 36 to about 18. It would cut our professional staff, which usually runs between 16 and 18, to about 8 to 10 people. I might say just a little bit about the basis given for the cut on the House floor. Without making any criticism at all of the right of the House to take any action it sees fit, when the cut was proposed there were two specific points made. One point made was that we had set up meetings all over the country and were spending extravagantly for travel to go to those meetings. TRAVEL EXPENSES The fact is that our travel budget as it was reported before the House was $2,200, or about two-thirds of 1 percent of our budget request, which is one of the lowest figures if not the lowest figure proportionately of any agency of the Government. Although I think one of our most useful functions is to go and talk with these private farm, business, and industrial groups that ask us to. The way we have done this is that in almost all cases we make these groups pay our expenses rather than pay them out of the Government's budget. In this manner we have been able to reduce our traveling expenses from $9,000 in fiscal 1948 to a figure of $2,200 recommended for fiscal year 1953. Senator MAYBANK. In other words, for the meetings which you refer to the expenses were paid by those who asked for your services? Mr. KEYSERLING. Not in all cases, but in most cases. However, I cite these figures, Senator, not because of their size, but because it evidences two things-first, our efforts toward economy, which we believe are important, and second, that the basis on which the House cut was made didn't seem to bear any reflection of a studious examination of the work that we were doing. COST OF PUBLICATIONS The other basis on which the cut was made was a statement that there wasn't any interest in our reports anyway. And I will just cite for the record that our semiannual printed reports started off with a subscription through the Government Printing Office of 8,000 copies per report, rose shortly thereafter to 16,000, and has remained at about that level. Now, they are sold through the Government Printing Office, and we don't get the money. It is covered into the Treasury. Senator ROBERTSON. But the Government makes a profit on it? Senator O'MAHONEY. So that the sale of the report and the willingness of business groups and economic groups to pay the expenses of representatives of the council to attend their hearings is an indication of the widespread interest in the work? Mr. KEYSERLING. It is, Senator; 16,000 copies doesn't sound like a large distribution. It wouldn't be for a popular report or a one-time report. But for a report that comes out regularly twice a year, it is. This is our eleventh report of this kind. ATTENDANCE AT VARIOUS MEETINGS Senator O'MAHONEY. May I ask to what extent business organizations ask for your attendance at various meetings? Mr. KEYSERLING. That is very extensive. There is hardly an important Nation-wide business organization in the country that hasn't asked us to come and meet with them. It isn't so much in the nature of talks, although we sometimes make talks. It is more in the nature of round-table conferences, where we exchange views. Now, of the 16,000 distribution-this will interest you-13 percent of that distribution is governmental, and the remaining 87 percent goes to business groups, economists, farm and labor organizations, and so forth. I cite that because those were two of the points made in the House debate. NUMBER OF EMPLOYEES CUT Coming to the substance of it, a cut of 50 percent in the size of our staff, which is what this cut would entail, would reduce us to a professional staff of between 8 and 10 people, as against the 16 to 18 at which we have been operating. I might say also, Senator Maybank, quite aside from your reference to the past few months, it is true that going back to 1946, when we were established, the activities with which we have to deal are manifestly more comprehensive and more difficult, because it is of the very nature of the defense emergency that the Government assumes more economic functions. Yet, without making any comparison with other agencies, we are operating and have been operating during the past 2 years with a smaller staff than in our first full year of operations. In 1948, we had a staff of 44, including the three members of the Council, and last year we had 39, including the three members; a reduction from 44 to 39, which is 5, or about 12 percent. And it is that lower level of operations that the House action would cut by about 50 percent. Senator O'MAHONEY. The budget estimate, as a matter of fact, this year, was less than the appropriation you had when you first started. Mr. KEYSERLING. It was less than we had when we started, and as a matter of fact allowing for increased costs it was less than last year. In other words, last year we had $341,800 available for obligation. The budget estimate of $349,000 this year is a differential of 8,000, and that is less than our increased costs. In other words, we have to absorb part of the cost of pay increases, and so forth. Senator MAYBANK. How much pay increase do you have to absorb between the $341,800 and what the budget recommended. Mr. KEYSERLING. I will get that for you, Senator. Senator MAYBANK. I thought it would be good to have that for the record. (The information referred to follows:) The budget request for fiscal year 1953 absorbs $1,200 of the increased pay costs extended from fiscal 1952 (request, third supplemental, increased pay costs Council of Economic Advisers) into fiscal 1953. In addition, the 1953 request absorbs $1,000 for increased salary expenditures resulting from the proposed allocation of supergrades, $1,000 resulting from increased printing charges, and a small amount, about $500, from increased operating services costs. PAY INCREASE COSTS Senator O'MAHONEY. Table 6 of your presentation here shows the cost of pay raises. Mr. KEYSERLING. Yes. Mr. GARLOCK. $19,000 for fiscal 1952. Mr. KEYSERLING. From 1952 to 1953? Mr. GARLOCK. It's the same. The recent pay increase that was just enacted for fiscal 1952 amounted to $19,000. And, of course, that is extended into 1953. Mr. KEYSERLING. I believe that this answers the last question. I was starting to say. Senator, that although the cut made by the House committee, of about 11 percent, which would be about 16 percent as applied to our staff, and which would cut our professional staff, a small staff, by about one-sixth-while we could make a very strong case that measured against what was happening in the Government generally, or our workload, that was not an economical cut, and it would cost others more to perform the services we are performing for them, nonetheless, our inclination had been to bow to the inevitable and to say that the Congress is in a worthy process of achieving economies. But when on top of that, we got the cut on the House floor on an unconsidered basis, which would slash our staff by 50 percent, then we felt we were obligated to come before you and let you have the picture. DEFENSE ACTIVITIES Senator O'MAHONEY. What has been the effect upon your operations, of the legislation in the Defense Production Act and others of the kind, which has expanded the operations of the Government with respect to the preparedness program? Mr. KEYSERLING. Well, it has affected our workload greatly, although, as I said, our staff has shrunk. We haven't expanded our staff as our workload has expanded. Senator O'MAHONEY. How has it affected it? Mr. KEYSERLING. First of all, we are a reporting agency on economic trends and the economic outlook. Originally, we started off with the statutory requirements for one report a year. That very soon became two published reports a year. Then as the defense emergency made it necessary for the various agencies of Government to be more abreast of very current economic developments and as the situation was changing faster, we made quarterly reports, and now we also make monthly reports and we also make weekly reports. And our quarterly reports and our monthly reports and our weekly reports, although not published, are furnished as a service not only to the President but also |