To the Congress of the United States:
History will say this of America--that it established a community of freedom and order, preserved and perfected the concept of democracy, and enriched the lives of its citizens--all under a rule of law.
The law is our instrument for developing our society along that vision of government which was the dream of our fathers and is the hope of our sons.
It is only part of the total instrument, however. The rest of that instrument is the institutional machinery which enables law to work in response to the will of the Congress and the people. It is a condition of any law that its effectiveness must be judged by its administration.
The machinery of our Government has served us well. It has been the vehicle of the greatest progress and prosperity any nation has ever achieved.
But this record should give us no cause for complacency. For any realistic review today reveals that there are substantial improvements to be made.
--Further reorganization of the Executive Branch would make possible more effective government;
--Administration of programs which are the joint responsibility of Federal, State and local governments should be strengthened;
--At every level of government, steps must be taken to assure a steady flow of qualified and trained managers and administrators for the years ahead;
--We must pursue our efforts to expand the modern techniques which already are at work to reduce costs and improve the efficiency of government.
Government's relative simplicity did not demand many major reforms in administrative machinery until this century, with the great changes it brought to our society. Then Presidents beginning with Theodore Roosevelt began finding and reporting to the Congress obsolescence which hampered the efficient execution of the Nation's policies.
In 1937, Franklin Roosevelt and the 75th Congress were still harnessing the resources of government to continue the rout of the great depression which had threatened to overwhelm the country. President Roosevelt submitted to the Congress a recommendation for reorganization legislation with these words: "A government without good management is a house builded on sand."
Little more than a decade later, under President Truman's Administration, a distinguished Commission headed by former President Herbert Hoover looked deeply into the need for reorganization and sounded the same warning:
"... The highest aims and ideals of democracy can be thwarted through excessive administrative costs and through waste, disunity, irresponsibility, and other byproducts of inefficient government."
Since those words were spoken, the machinery of American government has undergone many changes.
Two major ones have been accomplished in this Administration:
--In 1965, the 89th Congress established the Department of Housing and Urban Development, which brought the hope of renewed life for our cities.
--In 1966, the same Congress provided the mechanism for straightening out our transportation lifeline by establishing the Department of Transportation.
In addition, in the same two-year period we have completed 10 additional reorganizations to consolidate programs and strengthen functions. I have submitted two new reorganization plans so far this year.
We have not reached the end of the reorganizations which are required if we are to adapt our government structure to the changes which have been taking place in our national life. Nor will we reach it soon.
Having undertaken major reorganizations in the fields of housing and community development, transportation, and water pollution, we must now carefully consider the question of how our government can better be organized to achieve its major economic objectives.
In my State of the Union Address, and later in my Budget and Economic Messages to the Congress, I proposed the creation of a new Department of Business and Labor.
For ten years, beginning in 1903, Labor and Commerce existed jointly as the 9th Cabinet office in the United States government.
Then in 1913, President William Howard Taft, on his last day in office, signed the Act which made them separate departments. The legislation which accomplished this was enacted in response to a growing belief that workers would be benefitted by a voice distinctly their own in the highest councils of government. Woodrow Wilson, the incoming President, expressed concisely the public's understanding of the action that had been taken. "The Department of Labor," he said, "was created in the interest of the wage earners of the United States."
The concept of two departments representing the separate--and sometimes diverse--voices of business and labor in the government family fitted the needs of the America of more than a half century ago, and in diminishing degree that of the decades which followed.
The years with their changing conditions brought an increasing alteration of that concept. In the America which exists today, the concept has, I believe, lost much of its force.
--Labor unions are no longer small and weak, struggling to achieve their legitimate aims. More than 18 million Americans are today members of organized labor groups.
--Business is no longer principally confined to local firms operating in local markets. The complex mix of regional, national, and international markets involves the interests of all industries.
--In a growing range of federal programs--particularly those which relate to manpower training, regional and area economic development, and international trade--business and labor have a common interest and a vast potential for cooperative action.
Except for their names, the Departments of Commerce and Labor are not the same departments as those which existed in the past. Both were once almost exclusively involved with statistical and information programs and regulatory activity.
Today a major part of the efforts of the Department of Commerce is directed toward economic development and the 'promotion of international trade.
Today a major part of the efforts of the Department of Labor is directed toward the training and development of manpower.
Conversely, there are many activities directly concerning industry and labor which are not in either Department.
My proposal for a new Department was designed not merely to merge the existing Departments of Commerce and Labor.
It envisioned the establishment of a single institution to unify the management of government programs which affect the economic health of the Nation.
Among its other functions it would be the federal agency responsible for:
--Manpower training and regional economic development;
--The promotion of international trade;
--The principal collection and analysis of economic data;
--Technological and science services; and
--A wide range of other services to both industry and labor.
An important further consideration is that the new Department would add a strong voice to the formulation of economic policy in government and would be the chief instrument for carrying out national policies affecting industry and labor. Its Secretary would be one of the primary Presidential advisers on matters affecting the entire range of national economic problems.
Finally, its unified system of field offices in local communities and cities across America would provide vital services to the worker, the businessman, and industry.
I strongly believe that, in the years ahead, the new Department will be a vital force for the prosperity and progress of a growing Nation.
Since I first suggested the desirability of creating a new Department, my advisers and I have consulted members of Congress and a wide cross-section of industry and labor representatives.
Many have expressed their belief that the new Department would be a distinct and necessary improvement over existing arrangements.
But others, agreeing that the new Department offered substantial advantages, have voiced the concern that abolition of the separate Departments of Commerce and Labor might inhibit the free flow of communication between government and the communities of business and labor. Separate departments with their well-established channels of communication, many believe, continue to offer the best assurance that business and labor leaders will be able to present to the federal government their views on matters vitally affecting their interests.
I remain convinced that the establishment of a new Department would in no way diminish the legitimate voice of business and labor in the councils of the Nation.
Neither of these groups today depends on a special department to make its voice heard. Indeed neither uses a single channel of communication. The interests of both interweave so thoroughly through the entire fabric of government that no single agency can adequately serve the interests of either. Nonetheless, I respect the considerations which lie behind those views to the contrary.
In our democratic society, those whose lives and interests are affected by government policy must be assured full participation in the processes which lead to executive decision.
That is why I believe that further active development of my proposal is necessary before it can be submitted to Congress.
The mechanism by which this can best be achieved is available to us. It is the President's Advisory Committee on Labor-Management Policy. The Committee is composed of the Nation's wisest and most outstanding businessmen, labor leaders and members of the public. When it was established by Executive Order in 1961, President Kennedy expressed this hope:
"... that the advice of this Committee will assist the Government, labor, management, and the general .public to achieve greater understanding of the problems which beset us in these troubled times and to find solutions consistent with our democratic traditions, our free enterprise economy, and our determination that this country shall move forward to a better life for all its people."
I am asking the President's Advisory Committee on Labor-Management Policy to consider the proposal in all its aspects, and particularly to develop means to assure that a free flow of communications will be maintained between the government and the business and labor communities, both through the new Department and other governmental channels.
No matter which has come before the Committee in the six years of its existence is more important than that now committed to it for consideration.
I shall await the advice of this Committee before taking further action.
EFFICIENCY IN GOVERNMENT
Every citizen has the right to expect full value for his tax dollar. This is a clear principle I set forth in my first days in office. It is a principle which I reaffirm today.
The management objectives of this Administration rest on a pursuit of this principle. In all of our programs, we endeavor to:
--Obtain the greatest benefit for each dollar spent.
--Operate at the minimum cost for every service rendered.
Economy in government does not mean ignoring new needs or old problems. When that occurs economy becomes stagnation. But economy becomes the companion of progress when we avoid overstaffing of government agencies, eliminate duplication and poor management, and discard what is obsolete and inefficient.
Seeking to improve the quality of American life, we are also improving the quality of government. We are now making the machinery of government more effective with two new management tools.
1. Planning-Programming-Budgeting System (PPBS)
More than a year and a half ago we began to apply a modern system of planning, programming, and budgeting throughout the federal government.
This system--which proved its worth many times over in the Defense Department--now brings to each department and agency the most advanced techniques of modern business management.
Analyzing other federal programs from child development to tax administration, this system is forcing us to ask the fundamental questions that illuminate our choices.
For example, how can we best help an underprivileged child break out of poverty and become a productive citizen? Should we concentrate on improving his education? Would it help more to spend the same funds for his food, or clothing, or medical care? Does the real answer lie in training his father for a job, or perhaps teaching his mother the principles of nutrition? Or is some combination of approaches most effective?
Under PPBS, each department must now:
--Develop its objectives and goals, precisely and carefully;
--Evaluate each of its programs to meet these objectives, weighing the benefits against the costs;
--Examine, in every case, alternative means of achieving these objectives;
--Shape its budget request on the basis of this analysis, and justify that request in the context of a long-range 'program and financial plan.
This new system cannot make decisions. But it improves the process of decision-making by revealing the alternatives--for decisions are only as good as the information on which they are based.
PPBS is not costly to operate, but the dividends it will yield for the people of America are large.
The system has taken root throughout the government, but it will not be able to function fully until more trained men and women, more data, better cost accounting and new methods of evaluation are available.
To continue this vital work I urge that Congress approve the funds for PPBS requested in the budgets of the various federal agencies.
2. Cost Reduction
As we take these steps to improve our programming and budgeting system, we also are continuing an unremitting drive to reduce the government's cost of doing business.
The cost reductions we are achieving are more than bookkeeping entries. To the taxpayer, they mean real savings, now running into the billions of dollars.
--The Defense Department saved $4.5 billion in fiscal 1966 as a result of actions taken over the past several years.
--The civilian agencies saved $1.2 billion from steps taken in fiscal 1966 alone, and hundreds of millions of additional dollars as a result of actions taken in prior years.
These economies were not easily achieved. They came from the efforts of men and women in all our agencies, who represent the real force of government. They are the consequence of a wide range of actions-the elimination of unnecessary paperwork, the improvement of purchasing methods, the closing of obsolete military bases. Some of these savings are small. Others run into the millions. All are important, for the saving of a single dollar is important. These are some recent examples:
--Engineers in the Commerce Department found ways to reduce by half the number of Tiros Weather Satellite launches, saving $15 million, without reducing program effectiveness.
--Contracting and management experts at the Post Office devised rigorous procurement procedures and consolidated a number of small post offices, saving almost $ 10 million.
--Medical specialists in the Department of Health, Education, and Welfare developed a technique to rotate inventories of perishable drugs, saving over $5 million.
--Scientists at a NASA test center developed a stainless steel rod that performed its mission more reliably than a more costly cadmium rod, saving $20,000.
To broaden and strengthen the federal government's drive for economy and efficiency in all its operations, I will issue an Executive Order establishing an Advisory Council on Cost Reduction.
The Secretary of Defense, the Chairman of the Civil Service Commission and the Administrator of General Services will serve on the Council. It will be chaired by the Director of the Bureau of the Budget. I will also appoint other members from the Executive Branch, from private industry and from the public.
This Council will review our cost reduction programs, explore the opportunities for increased savings, draw on wisdom and experience of business and labor leaders, and report periodically to me.
THE PUBLIC SERVICE
Government is personal.
It is as compassionate and vibrant--or as ineffectual and spiritless--as the men and women who shape the laws, who make the decisions, who translate programs into action.
Andrew Jackson once said that the duties of all public offices were "plain and simple." We have journeyed far since then.
Today's public servant--at all levels of government--is a servant of change. He works to make the American city a better place to live. He strives to increase the beauty of our land and end the poisoning of our rivers and the air we breathe. In these and countless other ways he seeks to enlarge the meaning of life and to raise the hopes and extend the horizons for all of us.
The work to be performed in the years ahead will summon trained and skilled manpower in quantities--and quality--we have never needed before.
Within the federal government, we are making careers more attractive. Since I became President, I have proposed and you in the Congress have approved pay increases in each of the past 3 years for federal workers, raising salary levels by an average of 12%. The new Executive Assignment System begun last year will re-shape the upper civil service so that talent is readily recognized and excellence is fully rewarded.
Later in this session of Congress, I shall submit additional proposals to enable the government to attract and retain the public servants it needs.
But nowhere is the magnitude of government manpower greater--and the accompanying challenge more critical--than at the State and local levels. Consider the following:
--Between 1955 and 1965 employment in State and local governments increased from 4.7 million to 7.7 million, or four times the rate of growth of employment in the economy as a whole.
--By 1975, State and local government employment will grow to more than 11 million.
--Each year, from now through 1975, State and local governments will have to recruit at least one quarter of a million new administrative, technical, and professional employees, not including teachers, to maintain and develop their programs.
--One out of every three of the Nation's municipal executives, and one out of every two municipal health directors will be eligible for retirement within the next 10 years.
--There will be 2 vacancies for each new graduate of a university program in city and regional planning.
These statistics show that State and local governments are flourishing as they never have before. But they also contain a clear signal that in the chain of Federal-State-local relationships, the weakest link is the emerging shortage of professional manpower.
We can strengthen that link, or later pay the price of weakness with inefficient government unable to cope with the problems of an expanding population.
I believe we should take positive action now.
I recommend two legislative proposals to improve the quality of government in the years ahead--the Public Service Education Act of 1967 and the Intergovernmental Man- power Act of 1967.
My fiscal 1968 budget includes $35 million for these proposals:
--$10 million for the Public Service Education Act, and
--$25 million for the Intergovernmental Manpower Act. These measures are demanding. They will require the support of Congress, the Executive Branch, State and local governments, our colleges and universities and private organizations.
They recognize that the key to effective action remains with the State and local governments.
1. The Public Service Education Act of 1967
This legislation has a single clear goal: to increase the number of qualified students who choose careers in government.
The measure would authorize the Secretary of Health, Education, and Welfare to provide fellowships for young men and women who want to embark on the adventure of government service.
It would provide support to universities seeking to enrich and strengthen their public service education programs.
This financial assistance can be used to support a broad range of activity including:
--Research into new methods of education for government service;
--Experimental programs, such as study combined with part-time public service;
--Plans to improve and expand programs for students preparing for government careers;
--Training faculties, establishing centers for study at the graduate or professional level, conducting institutes for advanced study in public affairs and administration.
2. The Intergovernmental Manpower Act of 1967
This legislation is designed specifically to deal with the varied manpower needs of State and local governments.
It would authorize the Civil Service Commission to:
--Provide fellowships to State and local government employees.
--Make grants of up to 75% to help State and local governments develop and carry out comprehensive training plans and strengthen their personnel administration systems.
It would allow federal agencies to admit State and local employees to federal training programs, and to provide additional assistance for those employees who administer federal grant-in-aid programs.
Across America, many men and women of skill and vision work in State houses and city halls.
Their knowledge and experience can help us. And we are prepared to bring the special experience of federal employees to the local level.
The Intergovernmental Manpower Act would allow federal workers to take assignments in State and local governments for periods up to 2 years, with full protection of job rights and benefits. In addition, the federal agencies would be able to accept State and local employees for assignments of equivalent periods.
This proposal, I believe, fills a vital need. The mutual interchange of ideas and perspectives will benefit all echelons of government.
THE FEDERAL SYSTEM
Shaped by our Founding Fathers, the federal system has withstood a test of time and experience they could never have foreseen.
It has been adapted to a complexity of government functions unknown and unanticipated in the simpler times of its creation.
Today the federal system rests on an interlocking network of new relationships and new partnerships among all levels of government.
That structure is elaborate. It consists of 50 States, over 3,000 counties, 18,000 municipalities, more than 17,000 townships, and almost 25,000 school districts, all of which employ more than 7 million people with a monthly payroll of nearly $5 billion.
Every American is served through these units of government.
In shaping programs to meet the needs of modern-day America, several factors have emerged which have important consequences for our Federal system:
First, many of the problems we are dealing with are national in scope, requiring national strategies to attack them. But these problems exist in communities and neighborhoods, so their solutions must be tailored to specific local needs.
Because broad national strategy must be fused with local knowledge and administration, the Executive Branch and Congress have chosen to operate through the mechanism of the grant-in-aid. The 1968 budget provides $17 billion in Federal grants-in-aid to State and local governments. These range from old age assistance to infant care, from housing development to highway construction.
During the past three years, we have returned to State and local governments about $40 billion in grants-in-aid. This year alone, some 70 percent of our Federal expenditures for domestic social programs will be distributed through the State and local governments. With Federal assistance, State and local governments by 1970 will be spending close to $110 billion annually. As I said in my 1967 State of the Union Message, "these enormous sums must be used wisely, honestly, and effectively."
Second, attacking the major ills of our society--poverty, crime, pollution, and decay-requires the interaction of many agencies working together at different levels of government. Coordinating and marshaling their efforts is a demanding challenge.
Third, many of the problems transcend established boundaries. Air and water pollution, for example, respect no State or municipal lines. Neither does mass transit--with commuters moving in and out of central cities and across different borders. Many of our programs, therefore, have resulted in new groupings and councils of old jurisdictions working together for the first time.
Careful study of these key factors reveals the need to strengthen the federal system through greater communication, consolidation, consistency, and coordination.
1. Better Lines of Communication
All levels of government must be able to communicate with each other more frequently and freely than they ever have before.
This does not require an Act of Congress. It simply requires an "open door" policy--a willingness by all who participate in the adventure of cooperative government to sit together to discuss their common problems.
The door of discussion will always be open in the federal government to the mayor of every city and the governor of every State.
I have invited and met with the Governors or substantial groups of them on at least seven separate occasions.
I have repeatedly assured each Governor that top officials of the Executive Branch stand ready to brief him and to visit his State Capital to discuss matters of mutual concern.
Over the past several weeks, a team of Government officials headed by Governor Farris Bryant, Director of the Office of Emergency Planning, has accepted the invitations extended by 16 Governors and visited their State Capitals, where full and frank discussions with the Governors on the problems of Federal-State relationships have been carried on. Additional visits are planned in the weeks ahead.
I have extended invitations to the Governors of every state to come to the Nation's Capital this Saturday to meet with me and members of my Cabinet for discussions and briefings, and to exchange ideas on how the ties between the Federal Government and State and local governments can be strengthened.
In addition, I have directed the heads of all departments and agencies to consult on a frequent and systematic basis with governors, and mayors, and other local officials in development and administration of federal programs.
I have requested the Vice President and Governor Farris Bryant, Director of the Office of Emergency Planning, to confer with State and local officials whenever problems of intergovernmental relations arise.
2. Consolidation of Grant-in-Aid Programs
There are today a very large number of individual grant-in-aid programs, each with its own set of special requirements, separate authorizations and appropriations, cost-sharing ratios, allocation formulas, administrative arrangements, and financial procedures. This proliferation increases red-tape and causes delay. It places extra burdens on State and local officials. It hinders their comprehensive planning. It diffuses the channels through which federal assistance to State and local governments can flow.
There are several steps we should take to help remedy this situation.
The first step is to simplify procedures for grant application, administration and financial accounting.
A local health program, for example, may draw upon separate federal grants-in-aid for child health, training of health personnel and mental health. Similarly a governor often wishes to focus several related federal grant programs upon a single complex problem.
At the present time it is usually necessary for the governor or mayor to submit separate applications and follow separate financial and administrative procedures for each such federal grant.
Initially, we should make it possible, through general legislation, for federal agencies to combine related grants into a single financial package thus simplifying the financial and administrative procedures--without disturbing, however, the separate authorizations, appropriations, and substantive requirements for each grant-in-aid program.
The development of a workable plan for grant simplification will demand careful preparation. The statutes involved are varied and complex.
I have instructed the Director of the Bureau of the Budget, in cooperation with the federal agencies concerned and representatives of the States and local governments to form a joint Task Force to develop such a plan. The Task Force will report to me within one month. I will then submit to the Congress the necessary legislation to simplify our grant-in-aid procedures.
Beyond administrative and financial consolidation, an even more fundamental restructuring of our grant-in-aid programs is essential.
Last year's "Partnership for Health" Act pointed the way. With that measure Congress combined into a single package a number of health grants. It established for these activities a single set of requirements, a single authorization and a single appropriation.
I have requested the Director of the Bureau of the Budget to review the range of federal grant-in-aid programs to determine other areas in which a basic consolidation of grant-in-aid authorizations, appropriations, and statutory requirements should be carried out.
As that review is completed, I will seek the necessary legislation to combine and modernize the grant-in-aid system, area by area.
3. Consistency and Coordination
Each major federal department and agency works through a series of regional or field offices. These offices are the vital links between Washington and people in States, cities and townships across America. Whether our programs are effective often depends on the quality of administration in these field offices.
Yet, for all their importance, there has been only infrequent critical analysis of their roles and performance.
The cause of intergovernmental cooperation is poorly served when these offices are out of touch with local needs, or when their geographic boundaries overlap or are inconsistent.
I have asked the Director of the Bureau of the Budget to undertake a comprehensive review of the federal field office structure and to develop a plan to assure the most effective use and location of these offices.
I have asked him to recommend a plan for the restructuring of these offices, and I hope to incorporate the first steps of this plan in my next budget message.
STATE AND LOCAL ACTION
Our federal system is strong. It is the best instrument we have--or any nation has ever had--for joint action.
If we observe strains in the workings of that system, they are natural consequences of the great stirring of governmental action at all levels to cope with acute problems. When governments do nothing, when they are oblivious to the needs of the times, there is an illusion of order. It is an illusion both costly and disastrous.
But to survive and serve the ends of a free society, our federal system must be strengthened-and not alone at the national level.
Some State and many local jurisdictions maintain planning, budgetary and statistical systems unchanged since the nineteenth century. Obsolete and arbitrary fiscal restraints increase pressures for federal action in areas where State and local communities themselves should assume responsibility.
I particularly urge governors and mayors to take advantage of the channels of communication which I mentioned previously. I urge the governors to utilize that provision of the Model Cities Act which encourages, and helps to finance, the establishment of State centers for information and technical assistance to medium-sized and smaller communities.
Two years ago, discussing the challenges which the improvement of our society poses, I said, "The solution to these problems does not rest on a massive program in Washington . . ." I repeat those words today, with an emphasis even stronger.
No nation so great as ours can develop the society its people need if the federal government evades its responsibility. This government has not and will not. But neither can such a nation hope to succeed on the strength of federal action alone.
We began as a nation of localities. And however changed in character those localities become, however urbanized we grow and however high we build, our destiny as a Nation will be determined there.
Just as the effectiveness of every law must be gauged by its administration, many programs must succeed--or fail--in the local health department or school board or urban renewal office or community action agency which turns it from plan to performance.
Because of the social and economic legislation passed by the 88th and 89th Congresses-legislation unmatched in all the annals of our history--this Nation now has programs which can lift the quality of American life higher than any before us have known.
What remains for us now is to improve the quality of government itself--its machinery, its manpower, its methods--so that those programs will touch and transform the lives of the people for whom they were intended.
The processes of government are vast, as is the Nation itself. But its vastness--and its strength as well-comes from the diversity of its many parts.
The partnership which links every level of our government is the genius of our system as that system took life under the Constitution.
We have never achieved perfection in that partnership any more than we have achieved perfection in the society it serves. But we have never stopped reaching for both, nor will we, even though the effort to improve each must now be accelerated in the intensity of change.
Only our traditions and our goals remain unchanged. So long as we are faithful to these, we must pursue and endeavor as best we can to perfect the partnership which enables government to work--the partnership between the Executive Branch and the Congress, between the federal government and the States, between both and the local communities.
It is in the interest of this continued partnership, and in the spirit of hope it generates, that I present this program to the Congress and the Nation today.
LYNDON B. JOHNSON
The White House
March 17, 1967