Section 203 of the Plan provides that the Executive Director of the Domestic Council “shall perform such functions as the President may from time to time direct." Under 3 U.S.C. 301 the President is authorized to designate and empower heads of departments and officials confirmed by the Senate to perform statutory functions. During the hearings the representatives of the Bureau of the Budget and the Department of Justice stated that inasmuch as the Executive Director is not to be confirmed by the Senate, statutory powers lodged in the Bureau of the Budget "would not be able to be delegated to the Executive Director.” Specifically, the Department's witness expressed the view that 5 U.S.C. 907 precluded such a change in existing law. We agree that the Plan may not provide for the delegation of functions vested by law in a department or agency to the Executive Director, and base our conclusion not only on section 907, cited above, but also on section 905 of title 5.

With regard to your suggestion that section 203 could be construed as later legislation and therefore as superseding 3 U.S.C. 301 insofar as delegations to the Executive Director are concerned, while the matter is not entirely free from doubt we believe a reorganization plan not disapproved by the House or Senate is effective only insofar as it does not go beyond the provisions of chapter 9 of title 5 of the United States Code which provides in subsection 905(a):

"A reorganization plan may not provide for and a reorganization under this chapter may not have the effect of—

"(4) authorizing an agency to exercise a function which is not expressely authorized by law at the time the plan is transmitted to Congress."

Subsection 902 (1) (B) of title 5 defines the word "agency" as used in the Reorganization Act of 1949 to include "an officer or officer in the executive branch" and subsection 902 (3) provides that the word "'officer' is not limited by section 2104 of this title." Senate Report No. 482, 90th Congress, p. 31. states that the latter subsection was inserted to retain the meaning of the word "officer" as used in the Reorganization Act of 1949, "to include not only civil appointive officers, but uniformed officers, the President, and officers of the Government of the District of Columbia.' (underscoring supplied)

With the equation of the President to the term "an agency" in the abovequoted language of subsection 905(a) (4), any transfer by the President which prior to the submission of the Reorganization Plan he did not have authority to make is precluded. Therefore, inasmuch as 3 U.S.C. 301 only authorizes the President to designate and empower heads of departments and agencies and officials thereof who are required to be appointed by and with the advice and consent of the Senate to carry out statutory functions, the Plan cannot contain legally effective provisions which would enlarge on the transfer authority of the President under 3 U.S.C. 301 and consequently functions vested by law in the departments and agencies may not under the Plan be delegated to the Executive Director.

"III

"In his message transmitting the Plan, the President stated:

"The Office of Management and Budget will be charged with advising the President on the development of new programs to recruit, train, motivate, deploy, and evaluate the men and women who make up the top ranks of the civil service, in the broadest sense of that term.

“5 U.S.C. 905(a) (4) prohibits a reorganization under the Act from having the effect of authorizing an agency to exercise a function which is not expressly authorized by law at the time the Plan is transmitted to Congress.

"We do not find any law expressly authorizing the performance of the funetions described in the quotation from the President's message. However, it would appear that the Plan and Message, taken together, would authorize the new Office of Management and Budget to perform these functions and may in this respect be illegal. This could be particularly true in the light of the many provisions of Title 5 U.S. Code which specifically require the Civil Service Commission to perform almost the same functions, including providing assistance to the President (5 U.S.C. 1301).

"We would like your views on this aspect of the Plan."

The subject statement is only incorporated in the Message transmitting the Reorganization Plan, perhaps to illustrate the role of the proposed new Office of Management and Budget. However, the contemplated assignment of the described function, one not otherwise prescribed by statute, does not appear to

involve the Reorganization Act (5 U.S.C. Chap. 9), but rather appears to be predicated upon the powers of the President, particularly in the area of the merit system for Federal employees. See for example 5 U.S.C. 1301 and 1302. We therefore are of the view that the statement under consideration is not legally questionable.

Sincerely yours,

ELMER B. STAATS,

Comptroller General of the United States.

DEPARTMENT OF JUSTICE, Washington, D.C., April 29, 1970.

To: Dwight A. Ink, Assistant Director for Executive Management, Bureau of
the Budget.
From: Thomas E. Kauper, Deputy Assistant Attorney General, Office of Legal
Counsel.

Subject: Question raised at House Hearings on Reorganization Plan No. 2 of 1970 concerning certain officers affected by the plan.

It is understood that the legality of Plan No. 2 of 1970 relating to agencies in the Executive Office of the President, has been challenged on the ground that neither the Director of the Office of Management and Budget nor the Executive Director of the staff of the Domestic Council, provided for in sections 101 (b) and 203 respectively of the Plan, is subject to confirmation by the Senate, and no provision is made for these officials to be appointed to positions in the "competitive service" as required by 5 U.S.C. § 904 (2).

(1) The Office of Management and Budget is created in Plan No. 2 by redesignating thhe Bureau of the Budget as the "Office of Management and Budget". No change is made in the structure of the agency nor in the status of its existing statutory offices which are designated as offices in the redesignated agency. Thus, in section 102(b) the Director of the Bureau of the Budget is "designated Director of the Office of Management and Budget". The offices of Deputy and Assistant Directors are likewise designated offices in the re-designated agency.

The procedure followed constitutes merely a change of name. No new appointment authority for these officers is provided or is needed. They will be appointed, in the manner presently provided by 31 U.S.C. § 16 for appointment of the Director of the Bureau of the Budget, and subordinate officers of that agency. They will only have a new title. This procedure is authorized by the provisions of 5 U.S.C. 904(1), which states that a reorganization plan:

"May change, in such cases as the President considers necessary, the name of an agency affected by a reorganization and the title of its head ***"

In connection with the foregoing, reference is invited to Reorganization Plan No. 2 of 1950 section 3 of which changed the title of "the Assistant to the Attorney General" to "Deputy Attorney General".

(2) The Domestic Council is established by section 201 of Plan No. 2. Under § 203 of the plan duties of the Executive Director who is to be the head of the staff of the Council are to be carried out by an Assistant to the President designated by the President. In other words, an assistant who has been appointed by the President pursuant to 3 U.S.C. 106 to perform "such duties as the President may prescribe" will be designated by the President to include in his duties those of Executive Director. No appointment of an individual other than one who is an Assistant to the President is contemplated. He is not appointed pursuant to authority provided by the Reorganization Plan. As a consequence the provisions of 5 U.S.C. § 904 (2), which govern "the appointment and pay" of officers of an agency resulting from a reorganization, have no application to the Presidential assistant who will serve in the capacity of Executive Director of the staff of the Domestic Council.

OFFICE OF THE ATTORNEY GENERAL,
Washington, D.C., May 10, 1970.

Hon. JOHN A. BLATNIK, Chairman, Subcommittee on Executive and Legislative Reorganization Committee on Government Operations, House of Representatives, Washington, D.C. DEAR MR. BLATNIK: In a letter to you dated May 4, 1970, the Comptroller General has expressed the view that Section 203 of Reorganization Plan No. 2 of 1970, transmitted to the Senate and the House of Representatives by the Pres

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ident on March 12, 1970, does not comply with 5 U.S.C. 904(2), a provision of the Reorganization Act of 1949, as amended. I strongly disagree with this conclusion. Section 203 of the Plan provides:

"Sec. 203. Executive Director. The staff of the Council shall be headed by an Executive Director who shall be an assistant to the President designated by the President. The Executive Director shall perform such functions as the President may from time to time direct."

The Assistant to the President designated to head the staff of the Domestic Council will be an individual appointed under 3 U.S.C. 106, to "perform such duties as the President may prescribe." His compensation is determined in accord wth 3 U.S.C. 105. Appointments under 3 U.S.C. 106 are made by the President, without the advice and consent of the Senate, and are not in the competitive service.

Section 904 (2) of the Reorganization Act, 5 U.S.C. 904(2), provides that a plan may include provision "for the appointment and pay of the head and one or more officers of an agency" if certain findings are made. It further provides:

"In case of such an appointment, the term of office may not be fixed at more than 4 years, the pay may not be at a rate in excess of that found by the President to be applicable to comparable officers in the executive branch, and if the appointment is not to a position in the competitive service, it shall be by the President, by and with the advice and consent of the Senate, . . ." (emphasis supplied).

The Comptroller has stated that the Executive Director of the Domestic Council is a new office within the meaning of this provision, and that the plan is defective because the individual designated to perform the duties described in Section 203 of the Plan is neither appointed with advice and consent of the Senate nor in the competitive service. The Comptroller General offers no reasons for his conclusion, other than the statement that the Plan "does not comply with the plain words of 5 U.S.C. 904 (2) . . ." The plain language of the statute leads me to the opposite conclusion

Section 904(2) of the Reorganization Act authorizes the inclusion in a reorganization plan of provisions for "the appointment and pay of the head and one or more officers of an agency." Section 904(2) then further provides that in the case of "such an appointment", i.e., an appointment pursuant to such a provision in a plan, the term shall not exceed four years, the compensation shall not exceed a particular level, and the appointment, if not in the classified civil service, shall be by the President by and with the advice and consent of the Senate. Section 904 (2) thus has two distinct, albeit related parts: (1) an authorization for the inclusion of appointment and compensation provisions. and (2) limitations upon appointments made pursuant to such authorizations. But the limitations, including the limitations on methods of appointment relied upon by the Comptroller General, are applicable only to appointments and compensation under the authority of provisions in the reorganization plan. If the appointment is not dependent upon any authorization in the plan, and is not therefore dependent upon the authorization contained in Section 904(2), the limitations on "such an appointment" in that same section are inapplicable.

Section 203 of Reorganization Plan No. 2 of 1970 does not provide for either the appointment or compensation of any officer, nor need it do so. It provides only for the performance of specified duties by an individual appointed and compensated pursuant to existing authority (3 U.S.C. 105, 106). The duties specified in Section 203 of the Plan are within the authorization of 3 U.S.C. 106, which directs that administrative assistants "shall perform such duties as the President may prescribe." Because Section 203 of the Plan does not rest on any authorization contained in 5 U.S.C. 904(2), it is not subject to the limitations contained in the statute. The provision is lawful, even though the Executive Director is not in the competitive service and is not appointed by and with the advice and consent of the Senate because the statute authorizing the appointment and payment of compensation (3 U.S.C. 105, 106) contains no such requirements.

The conclusion that Section 904(2) of the Act is not applicable to Section 203 of the Plan follows also from the fact that Section 904(2) authorizes provision for "appointment and pay." The emphasis in Section 904(2) on “pay" is clear indication that it is designed to authorize the employment of individuals for whom the payment of compensation would not otherwise be authorized. This is consistent with the well-established doctrine that appointment to an "office" contemplates not only duties but the payment of compensation as well. Sec, e.g.,

United States v. Germaine, 99 U.S. 508, 511 (1878); United States v. Hartwell, 73 U.S. 385, 393 (1867); 42 Op. A.G. No. 11, p. 8 (1962). Section 203 of the Plan does not, and need not, provide for the compensation of the Executive Director of the Domestic Council, since the compensation and duties of administrative assistants to the President are expressly provided for in 3 U.S.C. 105, 106.

Two further arguments may be advanced to support the position taken by the Comptroller General. First, it may be argued that Section 203 of the Plan contemplates appointment to a new office, and not simply the assignment of duties to one holding an office under existing authorizations, because a new title "Executive Director"-is authorized. But such a designation is not a mater of substance. The Plan would be no different, as a practical matter, if it provided simply that "the staff shall be headed by an assistant to the President, designated by him."

Second, it may be contended that while the appointment of the Assistant to the President subsequently designated Executive Director of the Domestic Council is authorized by 3 U.S.C. 106, the designation of duties contained in the Plan requires that he in essence be "reappointed" in compliance with 5 U.S.C. 904(2), even though those duties are within those prescribed by 3 U.S.C. 106. Carried to its logical conclusion, this argument would require the "reappointment" in accord with 5 U.S.C. 904 (2) of any properly appointed officer given an additional title and duties by a reorganization plan. Such a requirement would be illogical, and inconsistent with several reorganization plans which have established commissions comprised of members to be appointed by and with the advice and consent of the Senate, have placed a number of duties in the "Chairman" of the Commission, and have authorized the President subsequently to designate the Chairman from among the members without further Senate consent. See, e.g., Reorganization Plan No. 1 of 1954, §1; Reorganization Plan No. 21 of 1950, § 102. Cf. Reorganization Plan No. 5 of 1949, §§ 1-2. If the Comptroller General is correct, the chairman of such a commission could be appointed only with Senate consent to his appointment to that position, contrary to what these plans provide.

In summary, under Section 203 of the Plan duties of the Executive Director who is to be the head of the staff of the Council are to be carried out by an Assistant to the President designated by the President. In other words, an assistant who has been appointed by the President pursuant to 3 U.S.C. 106 to perform "such duties as the President may prescribe" will be designated by the President to include in his duties those of Executive Director. No appointment of an individual other than one who is an Assistant to the President is contemplated. He is not appointed pursuant to authority provided by the Reorganization Plan. As a consequence the provisions of 5 U.S.C. 904(2), which govern "the appointment and pay" of officers of an agency resulting from a reorganization, have no application to the Presidential assistant who will serve in the capacity of Executive Director of the staff of the Domestic Council. Sincerely yours,

JOHN N. MITCHELL
Attorney General.

EXHIBIT 3

STATEMENT OF ROY L. ASH, CHAIRMAN OF THE PRESIDENT'S ADVISORY COUNCIL ON EXECUTIVE ORGANIZATION, ON REORGANIZATION PLAN NO. 2 OF 1970, ESTABLISHING AN OFFICE OF MANAGEMENT AND BUDGET AND A DOMESTIC COUNCIL IN THE EXECUTIVE OFFICE OF THE PRESIDENT

Mr. Chairman and Members of the Subcommittee: We welcome the opportunity to appear before your subcommittee in support of Reorganization Plan No. 2 of 1970. Before proceeding further, I would like to make it clear that I am speaking on behalf of all of the members of the President's Advisory Council on Executive Organization: Dr. George P. Baker, Honorable John B. Connally, Mr. Frederick R. Kappell, Mr. Richard M. Paget, and Mr. Walter N. Thayer. For your information, we have appended biographical data on each Council member. We unanimously support the President's Plan without reservation. We believe the Plan represents a significant opportunity for improving the functioning of not only the President's Office but that of the whole Executive Branch. Our strong support of Reorganization Plan No. 2 is based upon a study which our Council made last year. We thought it might be useful to outline how we went about our study and some of the conclusions we reached.

Last April the President created his Advisory Council on Executive Organization and gave it a broad charter to examine ways in which the Executive Branch could be better organized. The President, along with the Council, quickly concluded that the place to begin was in the Executive Office of the President itself. The Executive Office was created over thirty years ago and has grown without careful attention to its overall functions.

As a part of our study, extensive interviews were conducted with many past and present officials of the President's Office and other agencies of the Executive Branch, and with distinguished authorities outside of government. Studies over the past thirty years were analyzed along with a wide variety of other written material.

All of the Council members participated extensively and directly in shaping and writing the recommendations to the President. Our monthly two-day meetings were primarily devoted to this study for a period of some eight months. In addition, individual members of the Council spent time working with the staff on various issues.

We strongly feel that most of the management today within the Executive Branch can and should be performed by the agencies. Incidentally, by the term agencies we mean to include the Departments, agencies and other units of the Executive Branch outside the Executive Office of the President.

There are, however, aspects of the President's overall management responsibility which must be provided for organizationally in the Executive Office. These involve processes and mechanisms through which the President can:

(1) Determine what should be delegated and to whom ;

(2) Insure that delegated authority is being exercised properly;

(3) Exercise his own authority more effectively.

We isolated at least six major management processes which should be encompassed within the organization of the Executive Office and in which we found significant organizational inadequacies. These processes are:

(1) Development of policies and programs-the translation of national objectives into specific, workable, and consistent actions or recommendations to the Congress.

(2) Attention to the organizational and management implications of program decisions so that the means for implementing programs receives the same emphasis as their formulation, legislation and appropriations.

(3) Evaluation of programs-assessing program achievements in terms of performance objectives and cost.

(4) Creation of an information system-to systematically and continually inform the President and the agencies about the many things they must know. (5) Resolution of interagency problems of coordination as they arise in the field-when the operating agencies involved cannot reach agreement on a solution that best serves the public interest.

(6) Development of executive career personnel.

Having isolated these functions to be strengthened, our Council went about designing the best structure we could to enhance these functions. During our discussions, we selected certain key criteria on which we based our final organizational recommendations:

(1) No activity should be placed within the Executive Office of the President without compelling reasons. Activities which can be well handled elsewhere in the Executive Branch should not end up in the President's Office by default. (2) Insofar as possible, the powers of organizations lodged within the President's Office should be vested in the President.

(3) Operating activities or others involving large numbers of personnel are generally not suitable for placement in the Executive Office.

(4) The role of agency heads needs to be strengthened not further reduced. and means must be sought to ensure they remain responsive ot the Presidential needs.

(5) Legislative recommendations should not be overly detailed about the structure of new organizations. It is important to outline the major functions to be performed and their interrelationships. Detailed organization charts, job descriptions and the like are matters which should be left to the particular individuals heading the organizations and their key executives at any given time. We weighed many alternatives and carefully considered recommendations of previous study groups. In doing so, we found it quite difficult to think separately about the foregoing six management processes. In other words, we felt that any organizational suggestions have to carefully consider the way in which these various functions will work together to assist the President.