The Commission I am proposing would make findings and recommendations. Whether those recommendations were accepted and implemented would remain solely within the powers of the President and Congress. But both the Council of Economic Advisers and the Bureau of the Budget would be specifically required to consult with the Commission during the course of their functioning and in the preparation of the Economic Report and the annual budget. The Commission's report would be printed as a separate part of the Economic Report and would be considered by the Joint Economic Committee of the Congress, which is presently required to hold hearings on the Economic Report.

In previous Congresses I have introduced measures to create a somewhat analogous National Productivity Council, which would have acted through local and regional labor-management productivity councils. Several parts of that proposal have now been written into law: the National Commission on Technology, Automation, and Economic Progress, and the local and regional LaborManagement Advisory Committees under the Manpower Development and Training Act, as well as the President's Advisory Committee on Labor-Management Policy, which was created by Executive order. What remains to be done is to afford the Government and the public the benefit of a high level, independent overview of economic and fiscal issues, and this is what is incorporated in my present bill.

The members of the proposed Commission would be appointed by the President, by and with the advice and consent of the Senate, and thus would be of high rank. The Commission's independence would be guaranteed by the requirement that its members would be appointed for terms of 6 years from nominees named by various well-recognized private national groups, with the additional requirement that the two appointees from each category must be from different political parties. Two members would be selected by the President from each of six categories of nominees:

First. Two from nominees named by organizations representative of business and finance;

Second. Two from nominees named by national labor organizations;

Third. Two from nominees named by organizations representative of agriculture;

Fourth. Two from nominees named by professional associations of economists; Fifth. Two from nominees named by organizations representative of colleges and universities; and

Sixth. Two who are representative of the general public as determined by the President.

In this way it is expected that the best national cross-section of expertise could be assembled. In addition, the Commission would also be required to consult from time to time with leaders from the various fields of private endeavor.

The ability of the Commission to carry out its assignment would be assured by a specific provision-which was used, for example, in the Automation Commission legislation authorizing the Commission to secure any information it deems necessary directly from executive departments and agencies.

The Commissioners themselves would not be full-time Government employees. But they would be required to meet no less than four times a year and would be paid their expenses on a per diem basis.

At a time of continued high unemployment and an international monetary crisis, I believe a Commission on National Economic Goals would add to the existing policymaking machinery a highly valuable balancing voice, equal in prestige and competence to existing sources of economic advice but free from special pleading and bureaucratic pressures.

I believe it will be extremely valuable to include the bill in the hearings, scheduled by the Employment and Manpower Subcommittee of the Committee on Labor and Public Welfare, on improving the Employment Act of 1946 so as to make it a more effective planning mechanism. The proposed Commission on National Economic Goals, based upon the Goals Commission created by the Eisenhower administration for temporary purposes, represents a proper Republican alternative to proposals to inject the Government into a greater measure of economic planning. The proposed Commission is the way in which we can best carry out the modern need of governments, including our own, for charting the economic future of the Nation beyond a 1-year term, which is essentially the function of the existing mechanisms of the Council of Economic Advisers, the Bureau of the Budget, and the executive departments.

Mr. President, I ask unamimous consent that the bill be printed in the Record as part of my remarks.

(There being no objection, the bill was ordered to be printed in the Record, as follows:)

S. 2632

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Employment Act of 1946 (15 U.S.C. 10211024) is amended by adding at the end thereof a new section as follows:

"COMMISSION ON NATIONAL ECONOMIC GOALS

"SEC. 6. (a) The Congress finds and declares that there exists a need to strengthen the Nation's economic policy making machinery by providing (1) for objective and independent analysis and evaluation of the Nation's long-term domestic and foreign economic goals and of existing programs designed to realize those goals, and (2) for the formulation of revised economic goals, and priorities among such goals, whenever it is deemed necessary, on the basis of such analysis and evaluation, in order to meet the continuing responsibilities of the United States for the development of its own economic strength and that of the free world. It is the purpose of this section to provide for such analysis, evaluation, and formulation on a continuing basis by a permament high-level body composed of eminently qualified persons from various fields of private endeavor.

"(b) To meet this need, there is established a Commission on National Economic Goals (hereinafter referred to as the 'Commission') which shall be composed of twelve members to be appointed by the President, by and with the advice and consent of the Senate, as follows:

"(1) Two from nominees named by organizations representative of business and finance;

"(2) Two from nominees named by national labor organizations;

"(3) Two from nominees named by organizations representative of agriculture; "(4) Two from nominees named by professional associations of economists; "(5) Two from nominees named by organizations representative of colleges and universities; and

"(6) Two who are representative of the general public as determined by the President.

The persons appointed from each category referred to in clauses (1) through (6) shall be from different political parties. Each member of the Commission shall serve for a term of six years. Any vacancy in the Commission shall not affect its power, but shall be filled in the same manner in which the original appointment was made. The Commission shall select its chairman and shall meet, in no event less than four times a year, on the call of the chairman. At any meeting of the Commission, seven members shall constitute a quorum for the purpose of transacting business.

"(c) (1) The Commission shall make a continuing study in furtherance of the objectives set forth in subsection (a), and shall make an annual report of its findings and recommendations to the President. Such report shall be made prior to January 20 of each year, and shall be printed as a part of the Economic Report. "(2) The Commission shall in carrying out its functions under this section consult from time to time with leaders from the various fields of private endeavor, including but not limited to business and finance, labor, agriculture, and the professional and academic fields.

"(3) The Council of Economic Advisers and the Bureau of the Budget shall from time to time consult with the Commission in the exercise of their functions. In advising and assisting the President in the preparation of the Economic Report, and in the preparation of the annual budget of the United States, the Council of Economic Advisers and the Bureau of the Budget shall respectively consider the recommendations of the Commission.

"(4) The Joint Economic Committee shall, in connection with its consideration of matters set forth in the Economic Report, hold hearings with respect to that part of such report which comprises the report of the Commission, and shall include in its annual report its findings and recommendations with respect thereto. "(d) Members of the Commission shall each receive $100 per diem when engaged in the actual performance of the duties of the Commission. Each member of the Commission shall also be reimbursed for travel, subsistence, and other necessary expenses incurred by him in the performance of such duties.

"(e) The Commission shall appoint an Executive Director who shall be the principal executive officer of the Commission and shall be paid compensation at the rate of $20,000 per annum. The Commission shall appoint, in accordance

with the civil service laws and Classification Act of 1949, such other employees as may be necessary. In addition, the Commission may procure temporary and intermittent services to the same extent as is authorized for the departments by section 15 of the Act of August 2, 1946 (60 Stat. 810), but at rates not to exceed $75 per diem for individuals.

"(f) The Commission, or on the authorization of the Commission, any subcommittee or member thereof, may, for the purpose of carrying out this section, hold such hearings, take such testimony, and sit and act at such times and places as the Commission deems advisable.

"(g) The Commission may secure directly from any department, agency, or instrumentality of the executive branch of the Government any information it deems necessary to carry out its functions, and each such department, agency, or instrumentality shall cooperate with the Commission and, to the extent permitted by law, furnish such information to the Commission upon request made by the chairman.

"(h) Such sums as may be necessary to carry out this section are hereby authorized to be appropriated."

Mr. Dirksen subsequently said: Mr. President, I ask unanimous consent that the bill introduced today by the senior Senator from New York [Mr. Javits] to establish a Commission on National Economic Goals be referred to the Committee on Labor and Public Welfare.

The PRESIDING OFFICER. Without objection, it is so ordered.

Senator CLARK [reading]:

The choices presented in amending the Employment Act could have a profound effect upon our economy and society and deserve the most thoughtful analysis and study. We must balance our desire to achieve maximum employment with the dangers of rigidity and centralization which might result from increased governmental planning. Yet we must find a way to chart our economic goals over a longer period of time and with a greater degree of participation by the private enterprise sector of the economy than is now the case. I look forward to the testimony of our expert witnesses in these hearings as the base on which to build an effective restructuring of the Employment Act.

I will introduce at this point in the record a document entitled "Some Issues Presented by S. 1630 and Amendments to the Employment Act of 1946."

Those questions are equally pertinent to S. 2632. (The document referred to follows:)

SOME ISSUES PRESENTED BY S. 1630, AMENDMENTS TO THE EMPLOYMENT Act of

1946

1. What is the meaning and intent of the Employment Act of 1946?

(a) To what extent have the goals defined in the act been fulfilled in its

20 years of operation?

2. What is and should be the meaning of—

(a) Maximum employment?

(b) Maximum production?

(c) Maximum purchasing power?

(d) Reasonable price stability?

3. How do you define and measure "full employment"?

(a) What level of unemployment would you consider commensurate with full employment?

4. What are the reasons why we have not achieved full employment?

5. Given the policies and programs of your choice, at what point in the future is it feasible to achieve full employment?

(a) What are the obstacles to achieving the full employment goals and policies recommended for its achievement?

6. What is the relative effectiveness of tax reductions and expenditure increases in achieving full employment, and what mixture of tax reduction and expenditure increases would you recommend for that purpose?

7. To what extent and in what detail is long-range planning necessary for the achievement and maintenance of full employment?

8. What is and should be the role of the Council of Economic Advisers and the Joint Economic Committee in achieving the purposes of the Employment Act of 1946?

(a) In your view, how effective have these two bodies been?

9. Is there a need for an additional planning or advisory body composed of representatives of the public to aid in achieving the goal of full employment? 10. Given prospective rates of labor force growth and productivity increase, what levels of economic growth will be necessary to maintain full employment in the American economy?

11. What problems do you see in the achievement and maintenance of these growth rates?

12. Have changes of a structural nature occurred since the enactment of the Employment Act of 1946 that make it possible to achieve lower rates of enemployment without encountering serious inflation?

13. To what extent are the problems of (a) balance of payments, (b) international liquidity, and (c) the changing structure of world competition obstacles to the achievement of full employment in the United States?

How can they be overcome?

14. To what extent is the short supply of skilled manpower, in both the private and public sectors of the economy, obstacles to the achievement of full employment?

Senator CLARK. I would hope out of these deliberations and the comparable studies of the Joint Economic Committee there will emerge the outlines for more comprehensive and effective national policy with regard to full employment.

Our first witness this morning is Dr. Gerhard Colm, an old friend whom we are happy to welcome back before the subcommittee.

Dr. Colm, the chief economist of the National Planning Association of Washington, D.C., appears by invitation of the subcommittee in his personal capacity and not as a representative of the National Planning Association.

Dr. Colm, I have had the opportunity to read your most interesting and helpful paper. I think instead of asking you to read it, I would like, if agreeable to you, to have a bit of colloquy or discussion about some of the major problems which confront us in attempting to update the Employment Act of 1946 or to persuade the administration to do by administrative action what I fear will not be done except under the threat of legislation.

(The prepared statement of Dr. Colm follows :)

PREPARED STATEMENT OF DR. GERHARD COLM, CHIEF ECONOMIST, NATIONAL PLANNING ASSOCIATION

It is now 20 years since the great debate in this country and especially in the Halls of Congress which resulted in the adoption of the Employment Act of 1946. The legislation which was hammered out in that debate and the institutions created under it have stood the test of time. The act as adopted was more general than the original full employment bill of 1945. It was "watered down," said some; it did not "freeze into premature legislation untried methods of policy formulation," said others. But the fact is, we have now had considerable experience with various instruments and institutions of policy formulation. Thus, it is welcome that Senator Clark has taken the initiative in looking anew at the Employment Act and proposing amendments which are formulated on the basis of deficiencies which have been detected and of possibilities which have been tested during this period.

To present my conclusion first, I believe the proposed amendments pending before this subcommittee incorporate very valuable suggestions for clarification of the objectives, for policies to be pursued, information needed, and the improvement of institutional arrangements under the Employment Act. Most if not all proposals incorporated in the amendments could be achieved by appropriate interpretation of the Employment Act in its present form and could be implemented by the legislative and executive branches. I can see reasons why a legislative amendment is regarded as a vehicle to give an existing general piece of legislation an interpretation intended by Congress. I can, however, also see reasons why amending basic legislation may be regarded as undesirable as long as the same purpose can be achieved without amendment. In a few cases the

attempt to enforce by legislation what could be obtained by voluntarily adopted practice may have undesirable effects. I will elaborate this point later.

In any case, having the legislative proposals debated will in my opinion further the objectives Senator Clark has in mind, irrespective of whether or not the amendment will be actually adopted.

I will now proceed by offering some comments using the list of "Some Issues Presented by S. 1630" as my guide.

1. What is the meaning and intent of the Employment Act of 19467

The basic intent of the Employment Act was, in my opinion, to establish the Government's obligation to do everything in its power to prevent and if necessary counteract mass unemployment, as it had been experienced during the depression of the 1930's, and to promote continuing conditions of full employment, as they had been experienced during the war years.

The first, the negative, goal has certainly been fulfilled. With respect to the second, the positive, goal, some progress has been made in recent years, but it has not been accomplished.

2. What is and should be the meaning of—

(a) Maximum employment?

(b) Maximum production?

(c) Maximum purchasing power?

(d) Reasonable price stability?

I interpret "maximum" employment, production, and purchasing power as the highest level of employment, production, and purchasing power which is compatible with the "needs and obligations and other essential considerations of national policy" to which the act refers. "Reasonable price stability" excludes conditions under which consumers, business, and labor anticipate a steady price rise. However, "reasonable" price rise in contrast with "maximum" employment suggests to me that the legislator would not wish the Government to pursue absolutely rigid price stability if it could be obtained only at the cost of substantial unemployment. However, I would also conclude that the legislator would not wish the Government to pursue a "forced" increase in production if it could be obtained only at the cost of continuing price rise and subsequent adoption of price controls.

3. How do you define and measure "Full employment"?

(a) What level of unemployment would you consider commensurate with full employment?

"Full employment" is a situation in which a person mentally and physically able and desiring to work can, with a reasonable effort on his part, find a job opportunity. The term "reasonable effort" is used here, because workers are expected to make an effort on their side to find opportunities, aided by public or private employment agencies. Also, in a dynamic economy a worker may not always find an opportunity for a job exactly in line with his experience or at his salary or wage level; some workers may not find an opportunity for a job in the location where he happens to be.

"Reasonable efforts" may include some retraining, some adjustment in wage or salary level, also in some cases a willingness to change residence. Because there always will be people who are not willing to make such "reasonable efforts" there could be even under conditions of "full employment," as defined above, some unemployment.

With respect to the measurement of "full employment" I have no quarrel with the definition in the proposed amendments that "maximum employment" means a level of unemployment in the civilian labor force not to exceed 4 percent of the labor force as an interim target and 3 percent thereafter. This is, however, one of the aspects where I agree with the policy intent of the proposal but where I would have serious doubts that this should be put into legislation. My reasoning is that what should be regarded as a reasonable target depends on circusmtances which cannot always be foreseen. I agree that the President should always state in the Economic Report what his employment target is and what rate of residual unemployment would remain if the employment target is reached. If Members of Congress are dissatisfied with these targets and think they are either overambitious or too complacent, then it is up to the Joint Economic Committee to express these views. However, putting such specific quantitative targets into the legislation might necessitate repeated future amendments, which I think is not desirable with such a piece of basic legislation.

4. What are the reasons why we have not achieved full employment?

We have not achieved full employment for the following reasons. (a) We had an extraordinary influx of young people into the labor force in recent years,