REORGANIZATION PLAN NO. 2 OF 1946
Eff. July 16, 1946, 11 F.R. 7873, 60 Stat. 1095, by act Dec. 20, 1945, ch. 582, 59 Stat. 613, as amended Sept. 6, 1966, Pub. L. 89-554, §8(a), 80 Stat. 662
Prepared by the President and transmitted to the Senate and the House of Representatives in Congress assembled, May 16, 1946, pursuant to the provisions of the Reorganization Act of 1945, approved December 20, 1945.
FEDERAL SECURITY AGENCY AND DEPARTMENT OF LABOR
Section 1. Children's Bureau
Sec. 2. Vital Statistics
The functions of the Secretary of Commerce, the Bureau of the Census, and the Director of the Bureau of the Census with respect to vital statistics (including statistics on births, deaths, marriages, divorces, and annulments) are transferred to the Federal Security Administrator and shall be performed under his direction and control by the United States Public Health Service or by such officers and employees of the Federal Security Agency as the Administrator shall designate.
Sec. 3. United States Employees' Compensation Commission
[Repealed. Pub. L. 89-554, §8(a), Sept. 6, 1966, 80 Stat. 662. Section abolished the United States Employees' Compensation Commission and transferred its functions to the Federal Security Agency. See sections 8145 and 8149 of Title 5, Government Organization and Employees.]
Sec. 4. Social Security Board
The functions of the Social Security Board in the Federal Security Agency, together with the functions of its chairman, are transferred to the Federal Security Administrator and shall be performed by him or under his direction and control by such officers and employees of the Federal Security Agency as he shall designate. The Social Security Board is abolished.
Sec. 5. Assistant Heads of Federal Security Agency
In addition to the existing Assistant Federal Security Administrator, there shall be not to exceed two assistant heads of the Federal Security Agency, each of whom shall be appointed by the Federal Security Administrator under the classified civil service, receive a salary at the rate of $10,000 per annum, and perform such duties and head such constituent unit of the Federal Security Agency as the Administrator may provide.
Sec. 6. Functions Under Act of June 20, 1936, With Respect to the Blind
The functions of the Office of Education and of the Commissioner of Education under the act of June 20, 1936 (49 Stat. 1559 ch. 638) [ 20 U.S.C. 107 et seq.] are transferred to the Federal Security Administrator and shall be performed under his direction and control by such officers and employees of the Federal Security Agency as he shall designate.
Sec. 7. Assistant Commissioner of Education
The functions of the Assistant Commissioner of Education, created by the act of May 26, 1930 (46 Stat. 384 ch. 330) [former section 2a of Title 20] are transferred to the Office of Education to be performed under the direction and control of the Commissioner of Education by such officers or employees of the Office as he may designate with the approval of the Federal Security Administrator. The Office of Assistant Commissioner of Education is abolished.
Sec. 8. Federal Board for Vocational Education
The Federal Board for Vocational Education and its functions are abolished.
Sec. 9. Board of Visitors of St. Elizabeth's Hospital
The Board of Visitors of St. Elizabeth's Hospital and its functions are abolished.
Sec. 10. Coordination of Grant-in-Aid Programs
In order to coordinate more fully the administration of grant-in-aid programs by officers and constituent units of the Federal Security Agency, the Federal Security Administrator shall establish, insofar as practicable, (a) uniform standards and procedures relating to fiscal, personnel, and the other requirements common to two or more such programs, and (b) standards and procedures under which a State agency participating in more than one such program may submit a single plan of operation and be subject to a single Federal fiscal and administrative review of its operation.
Sec. 11. Winding Up of Affairs
Suitable measures shall be taken by the Federal Security Administrator to wind up those outstanding affairs of the agencies herein abolished which are not otherwise disposed of by this plan.
Sec. 12. Transfer of Personnel, Property, Records, and Funds
The personnel, property, records, and unexpended balances of appropriations, allocations, and other funds (available or to be made available), which the Director of the Bureau of the Budget shall determine to relate primarily to the functions transferred hereunder are transferred to the respective agencies concerned for use in the administration of the functions so transferred, except that all of the personnel, property, records, and funds of the Industrial Division of the Children's Bureau shall be transferred to such agency or agencies of the Department of Labor as the Secretary of Labor shall designate. Any of the personnel transferred under this plan which the transferee agency shall find to be in excess of the personnel necessary for the administration of the functions transferred to such agency shall be retransferred under existing law to other positions in the Government or separated from the service.
Message of the President
To the Congress of the United States:
The fundamental strength of a nation lies within its people. Military and industrial power are evidences, not the real source of strength. Over the years the prosperity of America and its place in the world will depend on the health, the education, the ingenuity, and the integrity of its people and on their ability to work together and with other nations.
The most basic and at the same time the most difficult task of any country is the conservation and development of its human resources. Under our system of government this is a joint responsibility of the Federal, State, and local governments, but in it the Federal Government has a large and vital role to play. Through its research, advice, stimulation, and financial aid, it contributes greatly to progress and to the equalization of standards in the fields of education, health, and welfare; and in the field of social insurance it also directly administers a major segment of the program.
To meet its full responsibilities in these fields, the Federal Government requires efficient machinery for the administration of its social programs. Until 1939 the agencies in charge of these activities were scattered in many parts of the Government. In that year President Roosevelt took the first great step toward effective organization in this area when he submitted Reorganization Plan 1, establishing the Federal Security Agency-
to promote social and economic security, educational opportunity, and the health of the citizens of the Nation.
The time has now come for further steps to strengthen the machinery of the Federal Government for leadership and service in dealing with the social problems of the country. Several programs closely bound up with the objectives of the Federal Security Agency are still scattered in other parts of the Government. As the next step, I consider it essential to transfer these programs to the Federal Security Agency and to strengthen its internal organization and management.
Broadly stated, the basic purpose of the Federal Security Agency is the conservation and development of the human resources of the Nation. Within that broad objective come the following principal functions: Child care and development, education, health, social insurance, welfare (in the sense of care of the needy and the defective), and recreation (apart from the operation of parks in the public domain).
These functions constitute a natural family of closely related services, interwoven at many points and in many ways. For example, the development of day-care centers for children has involved joint planning and service by specialists of the Children's Bureau, the Office of Education, the Public Health Service, and several other agencies. The schools are both a major consumer of public-health services and a leading vehicle for health education and for disseminating the results of research carried on by the Public Health Service. The promotion of social security involves a whole battery of activities, especially social insurance, public assistance, health, and child welfare.
In order to proceed as promptly as possible with the development of the Federal Security Agency to meet the postwar responsibilities of the Government within its field of activity, I am transmitting herewith Reorganization Plan No. 2, which I have prepared in accordance with the provisions of section 3 of the Reorganization Act of 1945 ( Public Law 263 79th Cong., 1st Sess.), approved December 20, 1945; and I declare that, with respect to each reorganization made in this plan, I have found that such reorganization is necessary to accomplish one or more of the purposes of section 2 (a) of the act-
The plan includes certain interagency transfers and several abolitions and changes in the internal organization of the Federal Security Agency.
The plan transfers to the Federal Security Administrator the functions of the Children's Bureau, except those relating to child labor under the Fair Labor Standards Act. These child-labor functions are transferred to the Secretary of Labor in order that they may be performed by, or in close relationship with, the Wage and Hour Division which administers the rest of the act. The plan continues the Children's Bureau within the Federal Security Agency to deal with problems of child life, but is flexible enough to enable the Administrator to gear in the Bureau's programs effectively with other activities of the Agency.
The child-labor program is the only permanent program of the Children's Bureau that is properly a labor function. The other four-child welfare, crippled children, child and maternal health, and research in problems of child life-all fall within the scope of the Federal Security Agency. The transfer of the Children's Bureau will not only close a serious gap in the work of the Agency, but it will strengthen the child-care programs by bringing them into closer association with the health, welfare, and educational activities with which they are inextricably bound up.
The promotion of the education, health, welfare, and social security of the Nation is a vast cooperative undertaking of the Federal, State, and local governments. It involves numerous grant-in-aid programs and complex intergovernmental relations. The transfer of the Children's Bureau will simplify these relations and make for better cooperation.
To illustrate, State welfare departments now depend on both the Bureau of Public Assistance in the Federal Security Agency and the Children's Bureau in the Labor Department for funds for child-care activities. Similarly, State health departments obtain grants from the Public Health Service for general public health work and from the Children's Bureau for child and maternal health activities. All of these grants involve the establishment of minimum standards and a measure of Federal supervision. The transfer of the Children's Bureau programs will make it possible to develop more consistent policies and procedures and to simplify dealings with the States. This will eliminate needless inconvenience for both parties and enable the State and Federal Governments to join more efficiently in their common objective of furthering the health and welfare of the American child.
Next, the plan transfers the vital statistics functions of the Census Bureau to the Federal Security Administrator, to be performed through the Public Health Service or other facilities of the Federal Security Agency. In every State but one the State health department is in charge of vital statistics. The work in the States is partially financed from public-health grants administered by the Public Health Service. This transfer will make the agency providing the grants also responsible for carrying on the Federal part of the vital statistics program. Furthermore, it will make for a better correlation of vital statistics with morbidity statistics, which are closely connected in nature and are already handled by the Public Health Service. In addition, the Federal Security Agency, more than any other Federal agency in peacetime, depends on vital statistics and vital records in the operation of its programs.
The plan transfers the functions of the United States Employees Compensation Commission to the Federal Security Administrator, and provides for a three-member board of appeals to hear and finally decide appeals on claims of Government employees. By abolishing the Commission, the plan eliminates a small agency and lightens the burden on the President. The Federal Security Administrator, as the head of the Federal agency with the greatest experience in insurance administration, is in the best position to guide and further the program of the Commission.
The abolition of the Commission as an administrative body and the creation of an appeals board will provide the advantages of a single official in charge of operations while affording claimants the protection of a three-member board for the final decision of appeals on claims. This arrangement has proved both administratively efficient and satisfactory to claimants in many similar programs. It is essentially the plan used in the administration of veterans' pensions and old-age and survivors insurance and employed by many States in their workmen's compensation programs. The board of appeals created by this plan will deal only with claims of Government employees since appeals on other types of claims under the jurisdiction of the Commission-(a) longshoremen and harbor workers and (b) private employees in the District of Columbia-are heard by the Federal district courts rather than the Commission.
The reorganization plan which created the Federal Security Agency in 1939 provided that the Federal Security Administrator should direct and supervise the Social Security Board, and that he might assign administrative duties to the Chairman of the Board, rather than to the Board as a whole. Thus, it took the first step toward establishing a definite line of responsibility for the administration of social security functions in the Agency. The plan I am now submitting further clarifies these lines of responsibility by providing for the normal type of internal organization used in Federal departments and agencies.
A full-time board in charge of a group of bureaus within an agency is at best an anomaly. The Social Security Board rendered an outstanding service in launching the social-security program, and its members deserve the thanks of the Nation for this achievement. That program, however, is now firmly established and its administration needs to be tied in more fully with other programs of the Federal Security Agency. The existence of a department within a department is a serious barrier to effective integration.
In order to obtain more expeditious and effective direction for the social-security program and to further the development of the Federal Security Agency, this plan transfers the functions of the Social Security Board to the Federal Security Administrator and provides for not more than two new assistant heads of the Agency for the administration of the program. Because of the additional functions transferred to the Administrator by this plan, I have found that these officers will be needed to assist him in the general management of the Agency and to head the constituent unit or units which the Administrator will have to establish for the conduct of social-security activities.
To permit a consolidation of work for the blind, the functions of the Office of Education as to the vending-stand program for the blind are transferred to the Federal Security Administrator, in whom are vested other vocational rehabilitation functions. This transfer will permit the program to be assigned to the Office of Vocational Rehabilitation, where other vocational rehabilitation activities for the blind are now concentrated.
The office of Assistant Commissioner of Education, established by the act of May 26, 1930, is abolished. A basic reorganization of the Office of Education within the past year has made this officer the head of one of the divisions of the Office. It is, therefore, administratively desirable to abolish the post of Assistant Commissioner in conformity with the present organization of the Office.
The plan also abolishes the Federal Board of Vocational Education and its functions. The Board, established by the act of February 23, 1917, as amended [ 20 U.S.C. 11 et seq.], formerly had charge of the administration of the vocational-education program. Section 15 of Executive Order 6166, of June 10, 1933, issued under authority of the act of June 30, 1932 (47 Stat. 413 ch. 314), as amended, transferred the administration of the program to the Office of Education and limited the Board to acting in an advisory capacity. The Advisory Committee on Education, on the basis of its study of the vocational-education system, found that the Board was no longer needed and recommended its abolition.
To avoid possible confusion and conflict of authority, the Board of Visitors of St. Elizabeths Hospital and its functions are abolished. The functions of the Board, as provided by section 4842 of the Revised Statutes include supervision of the institution and the adoption of its bylaws, in addition to visiting the institution and advising the superintendent. These functions overlap the responsibilities of the Federal Security Administrator for the general supervision and direction of the hospital.
In order to enable the Administrator more adequately to coordinate the administration of the grant-in-aid programs vested by statute in the constituent units of the Federal Security Agency, the plan provides that, insofar as practicable and consistent with the applicable legislation, he shall establish uniform standards and procedures for these programs and permit States to submit a single plan of operation for related grant-in-aid programs. Most of these programs involve the establishment of certain minimum standards on fiscal, personnel, and other aspects of administration in the States. In many cases the same State agency is operating under two or more grant-in-aid programs. Much needless inconvenience and confusion can be avoided for all concerned by unifying Federal standards and combining State plans for the operation of the programs in such cases.
After careful consideration of a number of other agencies and functions I have refrained from proposing in this plan their transfer to the Federal Security Agency. Most of these involve activities which, though related to the functions of the Federal Security Agency, are incidental to the purpose of other agencies or are connected so closely with such agencies as to make transfer undesirable. A few are activities which should probably be shifted in whole or in part to the Federal Security Agency, but I believe such shifts can best be accomplished by interagency agreement or action in connection with appropriations.
The reorganization plan here presented is a second important step in building a central agency for the administration of Federal activities primarily relating to the conservation and development of human resources; but, while this step is important in itself, I believe that a third step should soon be taken. The time is at hand when that agency should be converted into an executive department.
The size and scope of the Federal Security Agency and the importance of its functions clearly call for departmental status and a permanent place in the President's Cabinet. In number of personnel and volume of expenditures the Agency exceeds several of the existing departments. Much more important, the fundamental character of its functions-education, health, welfare, social insurance-and their significance for the future of the country demand for it the highest level of administrative leadership and a voice in the central councils of the executive branch.
Accordingly, I shall soon recommend to the Congress that legislation be promptly enacted making the Federal Security Agency an executive department, defining its basic purpose, and authorizing the President to transfer to it such units and activities as come within that definition.
The people expect the Federal Government to meet its full responsibilities for the conservation and development of the human resources of the Nation in the years that lie ahead. This reorganization plan and the legislation that I shall propose will provide the broad and firm foundation required for the accomplishment of that objective.
Harry S. Truman.
THE WHITE HOUSE, May 16, 1946.