Part X- Administrative Issues

Jack's Management Philosophy

Q: Tell me about this document.

Futterman:

I wrote, "No job in SSA can really be done sensitively unless they have some understanding of the program's rationale." That was one reason John Trout, for instance, got into program planning, when his background was the District Office. I used to try to get everybody, who had not been exposed, a little bit of depth in program analysis. A little better understanding. And not be so easy to criticize the "stupid" people who wrote the law. But it usually went the other way; it gave them a much better understanding of how to do their work.

I tried to get them into the training programs, as well as organizing these development programs, which were essentially getting people out of their jobs so that they could put full attention on training. I think the regional programs were either six months or a year, weren't they? Do you recall? The Fellow programs were two years. It actually took those selected from the work they were doing and exposed them to substantial months of time to do actual work in different areas. And then they could go back to their own area as part of the 2-year plan. But there was always an effort to diversify their own backgrounds and experience. I just can't say much on this other than that. If you see any value in it put it in your notes. If you want to go back into it at some future date.

Q: I'll look through it. If there is something to talk about, we'll talk about it later.

Futterman:

Now this is kind of the key: Nobody can do a job, no matter how specialized it may be, especially if it's specialized, unless he has an understanding of the program in which they play a part. Do it with understanding; take a class on it if necessary.

Maybe you think you can take a position classification person in Personnel and move him from one Federal Personnel office to another, which is what they thought in those days. Maybe today, they may still think that way. Personnel thought it was a good idea.

Like in Charlie Wilson's time, when he was appointed Secretary of Defense, he was the head of General Motors. And I forget whether it was him or somebody at that time who said, "If you know how to run General Motors, you ought to know how to do anything." Or if you were a good executive in running one corporation and one company, you can run the other. Well, yes, there's a certain amount of skills that carry over that are useful, certainly. But if you want to be the best kind of executive that you can be for that particular organization, a deep understanding of the business is needed.

Like Bob Ball had the kind of background and the ability to become a great executive. If he had come with only an agricultural background and lacked his enormous personal background and knowledge in Social Security and in insurance, he could never have accomplished what he has. He could probe deeply. He could separate out from what experts told him the professional objective findings and advice from the subjective ones. Not that the latter had no weight, but rather where he himself was obligated to reflect his own values in the decisions to be made. Thus he used expert advice. He did not allow experts, except in areas of narrow focus to arrogate to themselves judgements which were his to make.

There were a few people, like George Friedman and others, three or four, who in the early days of health insurance, 1965, were the "experts" on certain things. For example, we needed regular updated lists of the hospitals that had met the requirements for certification, I'm talking about board-certified. Because if we didn't have them, the people in that region didn't have any health facilities to go to on the impending effective date of the Medicare program. And we needed to keep up with progress of hospital certification in the earliest days. So we said, "Well, how soon can you get us lists of which hospitals are certified now and which are not, so that we know the location we need to focus our effort?" "Well, maybe three weeks from now." "But we need it tomorrow." And you could have gotten that information from a Rolodex; assigning two people or three people to do it and you would have gotten it in a day and had it available and all that. But they were thinking in terms of writing the computer program and other technical in-house aspects--in this newly emerging field. So, if the "experts" judgements are not dissected and evaluated, we were really stuck there, because they said, "Well, we really can't do that in less than three weeks." And unless you can work with them and arrive at an acceptable solution you're stuck with their initial views.

Q: Okay.

Futterman:

And that was one of the things that was involved in the work of the job classifier. How could he describe allocating the right grade to a job?

Q: Unless he understood what that job really involved?

Futterman:

Yes. I mean, he looks at the overt actions the worker takes; he writes something, he reads something; he writes something. If he doesn't understand the difficulty of writing one piece as against another, he can't evaluate a program job, because he doesn't know. One has to have that kind of a base of knowledge to work with.

You'll also, if you examine some of these things, be able to extrapolate for yourself how I sometimes worked, particularly in making talks. Because I had three or four talks or basic speeches on a certain topic. I could always take a little from here and a little from there, like a Chinese meal, and be ready for a new kind of topic; using things over again which had application in a new area. You may see it in the way this was put together. And then again, you may not.

This memo is an intense situation that I was just describing when you're in the hands of a so-called "expert." Bill Hanna was our specialist on computer operations. And it's funny how the situation looks different from where you sit. When we hired him, I basically was responsible for that--it wasn't my greatest accomplishment. He talked very flexible; he became less flexible after he got the job. This is his memo to Bob Ball. And apparently, he was asked to supply an estimate to guide them in their talks with the Ways and Means Committee for a benefit increase. "It would be virtually impossible to guarantee that we could implement another benefit increase in June, to reflect in the July check." He's talking about a note of January 16 from Alvin David. And then Bob Ball wrote back, apparently to me and Alvin, on the 20th. And Bill Hanna is quite specific. He wanted to discuss the general increase in terms of activities which would have to be postponed or perhaps done less efficiently. "Looking at them in this light, that is, assuming the necessary adjustments in scheduled activity are authorized, we would, with some difficulty, be able to meet the July 3 date." And then the schedule is listed here, the schedule he proposed to follow. "And we need to know, as soon as possible, hopefully no later than March 1, so that we can implement the particular approach. We would like to know the percentage rate of the increase by April 15, to make it effective for the July 3 check."

That's not the way you tie up the people who were dealing with the Ways and Means Committee. Bill's approach was to build fences all around to protect themselves. Inevitably their position would hobble Bob Ball; by having Bob Ball tell the Congress . . .

Q: That we can't do it.

Futterman:

Not only that, but it makes him look terrible. "I can't do it because I'm advised by my so-and-so, I can't tell you exactly why." I don't remember what my reaction was. But Jerry Boyd was my staff member for this kind of thing. And he and I apparently had talked it over and had suggested an approach during our talks. And this is what Bob Ball followed in this case, whatever it was. I didn't document my answer to that.

Principles of Administration

Futterman:

I later concluded, like I later concluded in watercolors, contrary to what my teacher seemed to think, that learning the principles and the elements of watercolor painting, did not automatically make one an artist. The application of them did not automatically produce a masterpiece, because it was not a science. If it was a science, you could program it through the computers and the computers would generate an absolutely perfect masterpiece. And that was certainly not so. So it had to be that there was an art involved.

This is what I said later, when I wrote the Mexican papers, that often principles of administration go in opposite directions. And one needs to know how to blend these two and in what proportions, and it has to be relative to the time and the circumstances. It is an art. When somebody from the field would act like the Central Office was so stupid, couldn't make up its mind--one time it was asking for quality, and the next time it was asking for production. We were not stupid, he just simply did not understand the problem. In administration these changing goals were changes necessitated, not by the absolutes, but by relatives.

Well, in the art world, it's the same way, except your goals are different. You just don't use all the elements and all the principles; often they go in different directions. Like take unity in art. It's important. Your painting should have a certain unity about it; things go together; not being forced apart and harshly separated. Like color unity, they must have some common color element in it that ties it to a family. Or form, you can't have curved lines and boxes and circles; you need to have some dominance, something dominant, whether it's circles or squares or whatever. Or if it's a dominant green painting, every other color needs to be related to it in a certain way.

And so too with administration. If you say, well, the summum bonum is cost, you want to get the administrative cost down to the lowest possible, you're really in effect saying, "quality is a very subordinate thing." Like today, this is happening because of the so-called "economy in government." We are really cutting way, way down on the way the Government deals with the cases which are very difficult, like the homeless, and the poor and education and all that, when we cut funds for all these programs, we are really in effect saying by that, they are not important. And we are not cutting fraud and waste--that's an illusion. You can cut a certain amount of it, but you ought to cut that at any time, not just when there's a crunch. So when we reduce the money by seeking goals like the lowest cost government possible, or the lowest cost program possible, we are really setting that as the primary goal. In essence, you are letting other . . .

Q: We are treating it as an absolute.

Futterman:

That's right. And it has to be relative. And of course, there are times when you have no alternative. I mean, spending more money is out of the question. Then the whole question is, "How do we get the best quality out of what we spend?" But when both of these elements are flexible, there's no fixed relationship. You can't say, "This is absolutely all about quality." Or, you can't say, "This is absolutely all about money." But you want to know what is the best mix for your particular current situation. And it's an art that balances the relative weights of the different values that enables you to make that kind of a judgment. You have practical limits on both.

Jerry Boyd, a very able and creative person, was the head of long-range systems planning under me; he had been under Touchet and all that. He and his staff had an office, a big office where they put the long-range systems plan in diagrams around the wall. And after they had done that, I went down with Bob Ball and I said, "I was going to have a briefing by Jerry." And he did just that. It was a plan to "100 percent automate" the process. And he was my man; I was new to it. But I had to stop him; I said, "Stop right there. We're not going to attempt to automate the Social Security system 100 percent, because it's far beyond the cost that we ought to allow ourselves." The difference between 98 percent automated and 100 percent is inordinately large. Because the final 2 percent of automation would require an almost infinite amount of programming, to deal with cases you can't fully conceive; just to process automatically all kinds of possible cases that if one arises is much better done clerically, and much more cheaply. Inevitably you will have cases that can't be automated because they do not fit the models the system anticipated, in which case you can have a few clerks do them. We seek to automate as much as we feasibly can, but that goal needs to be balanced by cost and other relevant considerations like service to the public.

So complete quality, complete automation, complete this or that just are not the automatic answers; they are not, in most circumstances, wise goals, you have to make your choices in the way you balance the various values that apply.

Jack's Expertise in Administration

Futterman:

The whole area has improved, I'm talking now not about areas of administration where I supposedly had some expertise. I never claimed any expertise in administration. I'm not trained to be an administrator. The only thing I know is to logically look at the problem and I don't have any special techniques. In fact I have a mild bias that many who have been academically trained as a professional in fields like administration are often inhibited in their thinking by too quickly resorting to solutions that are in some book, rather than be uninhibited in the way they think the problem through and then creatively look for the best solution. I suppose one is taught as a profession if you are confronted with so and so, you have three routes, etc. Well I didn't know there were three.

Q: You found a fourth.

Futterman:

That's right, or a fifth. I would just logically breakdown what I thought were the possibilities, and then exclude what I thought to be not feasible, or not possible or whatever. But not within a prescribed framework, which would inhibit their full exploration. Creative solutions often emerge, I think, from that kind of an approach. Lacking academic experience in dealing with matters of administration I must rely on my ability to analyze a problem and come up with solutions. Having certain other skills helps.

If you're conditioned to think that when your problem is "A" your solutions are "B" "C" "D" or "E," you may not seriously think about all the possibilities. Doctor's automatically think if you have high blood pressure they put you on medication, but there are other possibilities. I'm not suggesting that doctors should not be prescribing medicine, but I am reiterating that if one follows too closely without thinking, you limit yourself. What I'm trying to say is don't get too automatic, too systematic, too unthinking, too complacent with the thought that the system is going furnish the answer.

Futterman's Views on Managing SSA

Futterman:

The way "esprit de corps" develops in an organization is by motivating people to work together to achieve the loftiest purposes of the organization. The ideal incentive to be sought to motivate the staff of an organization is that each member, whatever his or her assignment, plays an important role in a common effort to achieve a very worthwhile purpose.

I observed an example of this kind of motivation at the very beginning of my career with Social Security. I noticed, when I first came to Social Security and moved up to a position where several hundred people were under my supervision, I began to get requests from a lot of laborers to work for me. Blacks, in those days, were mostly in the laborer staff, this was a period when discrimination was rife. They asked to work for me, I think, because I was a Jew from New York City and this plus some conclusions they may have arrived at through their own observations and their own information network, they judged to mean I was more liberal then others in similar positions who came from other regions of the country in those days. But why did they want to work for Social Security? Well they wanted a job sure, they wanted a good job, any job with the Government in the late 1930's was a good job. Anybody who had a job, was well off, was happy. But they particularly wanted to work for Social Security. When I asked why most would say, "I want to work for social Security."

This kind of spirit was essential, and I alluded to it in something you've read. I said if one has to start a Social Security program, having to do so in the depths of a Depression as we did, had advantages, because highly qualified and highly motivated people were in great supply. People regarded the Social Security program as almost a religion. There was that kind of fervor to it. That kind of idealism. Wanting to do good. Wanting to make sure that old folks and children would be taken care of in their old age and not discarded before old age.

So that's my philosophy. You want to get the "troops" going in the right direction, set a good example. But also always make clear that what you are doing is not in the interest of any organization or any individual, but it is intended to advantage the well being of the people of the United State for whom that program is directed. I'd often say in training talks or discussions with interns or the like that I think that Social Security in motivating staff had a special advantage compared to other programs, to take the opposite pole, IRS, whose mission is to collect taxes. I'd often say to them, to the young interns, I think that if I was working for the IRS, I would regard my service to IRS with the same high idealism that I feel about working for Social Security. Why do I say that? I sincerely believe one can regard the function of collecting taxes as one of the highest functions of Government. Without taxes how can Government be expected to do any of the things that we all want the Government to do. To be entrusted with that job, and to do it well, is to really strengthen the sinews of the Government as a whole. One could say with conviction that about almost any program that is considered vital and necessary. The only worthy reason for a program to exist is that it serves a very worthwhile or necessary need. And such programs require money to achieve the high purposes they serve for the nation's people. And if it's a worthwhile need, and it is a government program, then it requires money. And IRS's mission of collecting taxes should be regarded as a very high, important, and essential function to make possible all that the nation's government does for its people.

Persons who seek and accept work with agencies of the Federal Government owe more than 40 hours of time in return for their employment: they owe a measure of loyalty to the agency's mission, appreciation of its significance and importance in servicing the people of the nation and so on. And the administrator's task is to help the employee to appreciate and embrace this kind of motivation in doing his or her work. If you think about it, if one is not convinced in his or her mind that the employing agency makes a worthwhile contribution, then maybe he or she ought to think about conferring the benefits of his or her services elsewhere.

Relationship Between SSA & The Department

Futterman:

Sometime we've got to talk about my impression, however unbalanced my impression might be viewed from where I sat, about the way that the Department, at least in financial affairs, dealt with us, and the relationship we had with them, keeping in mind that we were for many years from the establishment of FSA and then DHEW up until the old BOASI became SSA (sans the Children's Bureau, Public Assistance, Vocational Rehabilitation, etc.) two levels subordinate to the Department. The first level was the Social Security Board, which wasn't manned to do very much except to help the very small Bureaus and to "coordinate" the budget submissions of the individual Bureaus. Roy Wynkoop was an exceedingly able and dedicated staff man. The then SSA-level budget staff consisted solely of about 25% of Roy's time and at most half time of an analyst and secretary. Nonetheless, Roy could get in the way and often did at times. Wynkoop was a good friend of mine and I was a good friend of his. For the most part, after I established a good relationship with him, he did not raise a hell of a lot of problems, but he used to show his muscle every once in a while. Now, if you can balance it by the views of somebody on the other side.

Q: Okay, good.

Futterman:

It's subjective because I'm telling it to you and it's subjective because my observations came from Social Security. It's objective in that, even if I say it for myself, I've always tried to give a balanced view and to see how the other guy might look at it. And so I think it's not just pure partisanship. I recognized the functions they had. They performed their functions. They needed sometimes to cut us down to size a little. And they had their own personalities.

Jim Kelly, DHEW Budget Officer, was a very dominating kind of a character, he related to subordinates in that way. He was quite collegial with his peers. Maybe Social Security suffered a little bit because Jim Kelly did not feel completely comfortable with me. I think he saw me as a sort of a challenge in the area he expected and usually was unchallenged. In reality I could not be much of a challenge. Jim, when he dealt with the budget officials of subordinate echelons of the Department, as I saw it, discouraged discussion of his decisions, "rulings" or instructions. He had wide latitude of action. The Secretary gave him strong support. There was little I could do in resisting where I thought that Social Security was given the short end and on the rare occasions I did raise questions. The result was predictable since Jim was the judge and the jury. He did not have to worry about questions I might raise. I may not have understood all of Jim's problems, but I think maybe he did find it a little easier to accomplish two birds with one stone--assert his dominance and also benefit from a ruling adverse to SSA because DHEW staff from the time would express their opinions that SSA was favored by the Congress and fared far better appropriation-wise than other agencies of the Department.

Q: That you were favored in some way?

Futterman:

Because Social Security was the pampered child and things like that. Things came easily to us. Whereas on the Welfare side, not so much on the Public Health side, but other sides, they had to fight like hell to get adequate appropriations and this was especially true for the Office of the Secretary. Historically and customarily the offices of Commissioners and Secretaries are not all that popular in the Congress and in the committees.

Q: Now Jack, another thing about this while we're on the subject. There's this sort of view that has been there for a long, long time that SSA was more independent as an operating division of whatever department we were in than most other operating divisions, that we had an unusual degree of independence. I think that was true and I think you're alluding to that now. Has that been true all along, and how far back does that go?

Futterman:

All the way to the beginning. I don't know whether it's still true today or to what extent. I rather suspect that it isn't. I'll tell you a few isolated things.

First off, the Social Security Administration was a descendant of the Social Security Board, and it wasn't until 1939 that we became a part of the Federal Security Agency. Around Eisenhower's time in the 1950's, it became a part of the Department of HEW. Each of those steps put us lower. With the Federal Security Agency we had then to report, the Commissioner had to report, to the Administrator. Then when the Administrator was replaced by DHEW, there were more layers. Whereas, the Social Security Board itself had a very small administrative staff mostly for broad coordination of the Bureaus. DHEW had very substantial administrative staff that appeared to think their mission was to exercise considerable oversight and control over the work of lower echelons of the Department.

We fully accepted that DHEW staff had a legitimate job to do. We were not shy about letting them know when we thought they were far exceeding their roles as the Commissioner understood them to be. So that was one factor in why Social Security may have been regarded, was regarded, as independent. We, SSA, were accustomed to taking care of ourselves, and we had strong leadership in the beginning and stronger even in the era, I think, of Ball and Futterman. In respect, I'm putting my name amongst more August people, but when Ball became sort of dominant, I became in a lesser way the strong character amongst all the Public Health guys and the Food and Drug guy, who was Bruce Cardwell at one time, and the Welfare guy. They expected strong ideas, etc., and they got them from me. I think they were always sort of watching me from behind a tree, and they respected that ability, and that's what I'm trying to say. Then when Nixon got in, they really began to try to get rid of the key players and to put their own people in, and that culminated in Bob Ball leaving. I had already retired under no pressure, and I felt no pressure. I was a career person all the way. Some very high level very politically oriented people at the Department level, several of them, said to me: "Wish the hell we had guys on our side like you and Ball." They said it in an absolutely admiring way, regretting that their side lacked leaders of equal competence. They admired the staff, and this admiration was not just for the persona of Ball or Futterman, but it extended to the way SSA, as an organization, obtained quality results from that staff. So there was a general opinion that not only were we dominant, but if you got them to really talk about it and let their hair down and not try to be critical, they would say: "You know, you have very good leadership and your staff is better somehow." Its not exactly clear why they thought so, but I always had a fleeting thought they had a grudging admiration of the skill with which SSA dealt with the demands of agents of the change in administration.

Third, insofar as the budget was concerned, I think I told you this little incident. I was not there, but it was told to me and it always remained in my mind. As the authorization for financing the Social Security program was written, in the original law it was very different than that for other agencies. How was it different? It was different in this sense. As you well know, the procedure for setting up a new agency, by law, is first to pass legislation directing that an agency be established and delineating its responsibilities, authorities, powers, etc. Then the second part is the direction as to the financing. That funds may be appropriated out of such and such. That's the usual way. Almost all other agencies of government are financed that way or used to be. There may be some new ones these days that are different. We probably did set sort of a model for some, but we were set up for an automatic authorization. The law authorized such moneys from the Trust Fund as are needed to pay benefits and the expenses of administration. On the face of it, this kind of language does not require that Social Security seek an annual appropriation from the Congress.

Long before I worked in the budget area, Senator McKellar, Herman Downey's patron saint, headed the Senate Appropriations Committee. McKellar's reputation in history undoubtedly will be that there was no more patronage-oriented Senator. I think his first name was Kenneth. And indeed, Herman Downey came out of that bailiwick. Senator McKellar was known throughout in those times as one who used his power and who could be kind of mean and ruthless. Anyway, he used to make things difficult for Altmeyer. In those days Altmeyer's office budget was peanuts compared to us in BOASI.

Q: Compared to the Bureau, you mean?

Futterman:

Compared to all of the Social Security Bureaus except the Commissioner's office. And if Commissioner Altmeyer wanted budget for an extra secretary, he had to go to the House and then the Senate Appropriations Committee and justify his need for an extra secretary or an extra two people here or there, and they would sweat him out. McKellar would spend more time on the 50 people or whatever that were under the direct purview of the Commissioner. They were not just his office workers, but Research and Statistics, Actuaries, and all that. There might have been 200 people if I remember right. He'd sweat them.

Q: So you mean the administrative budget for the Commissioner's office was separate from the administrative budget for the agency?

Futterman:

Yes, in the late 1940's and early 1950's. We didn't include in our budget the needs of the Commissioner's office. They had to fend for themselves. Theirs was a separate item on the budget, and they had their own appropriation, and they couldn't dip into our funds. Our funds were for the workload-oriented purposes and the Bureau directors and operations.

Q: Let me see if I understand this. What we now call our LAE account, or Limitation on Administrative Expenses.

Futterman:

Yes.

Q: Which now today we have to go to the Hill every year and get an appropriation.

Futterman:

We removed the Commissioner's office as a special budget item. Remember in the '60's, the early '60's, this was when Bobby Byrd was very dominant on the Appropriations Committee. Senator Robert Byrd from West Virginia. Today he's benign, but in those days he was hell on wheels for anything on welfare. He was politicizing that. He was taking advantage of popular cynicism, etc., and he was promoting himself by being hard as nails on the District of Columbia welfare. They were a whipping boy in those days, as they are now, off and on. And Bobby Byrd was hell on wheels. When Bob Ball became Commissioner, Welfare was still under Commissioner Winston. I think she was in charge of Welfare at that time, and he was in charge of Social Security, I mean BOASI, and they were combined and they were one. He found himself on the Hill testifying 95 percent of the time defending Welfare. Now he was always very, very interested in welfare, but in those days, and I qualify that and say those days, his core interest was Social Security, the insurance program. Today I'm not in intimate daily contact with him. I can only judge the general appearance. I would say in the last 10 years or so I think he's become more centered on health, although he still retains his very high ranking as preeminent Social Security (Insurance) guru. I used that word just now; it came out of the blue. I don't hear anybody calling him the guru, but it does convey his top standing as an expert on Social Security today. He is getting long in the tooth in terms of the expanding group of specialists in the field, but he still retains that. More and more, he's also looked to as the guy on health programs, insurance.

But to the point, I still hadn't made it. That was McKellar. He was always picking on Altmeyer. That was my understanding, I was not there. Some of this I would get years later from Downey and some from Roy Wynkoop as we talked about things of the past. My impression was one time McKellar started out to make a mischievous point. He said: "Mr. Altmeyer, why do you bother to come before us? You don't have to come, the legislation does not specify it" And Mr. Altmeyer, I don't know what his motivation was, but he may probably have thought: "I don't have to come, but I'd better." It would be quite different if I asserted that he did not have to come, but that's my quick reading of that. "But sir," he said, "we feel that we must be accountable for our actions. We want to be held accountable, and therefore, we want to come to the Congress and have the Congress review us." So it was sort of a voluntary thing. I think I answered your point. I don't know how many people had knowledge of that, but it was always there. It probably conditioned people's attitudes even though they couldn't point to that as having any bearing on it. That's my quick reaction to your question.

SSA As Part of Government

Futterman:

As I indicated in other matters, my view of Social Security's function embraced not only focusing on the objectives with respect to the public, but also that we have a larger role; everybody in Government shares a mutual responsibility to help achieve the goals and objectives of other agencies of the Government to the extent they reasonably can without significant cost to the programs for which they work. If we, SSA, have unique resources we should make them available, whether it be income records, employment data, coded employee information or district offices that span the country and reach out to the people, if we can do so in ways not inconsistent with the interest the Agency. If it does not detract from the accomplishment of our own mission, we have an obligation to try to work out ways, consistent with restraints upon us, to enable other agencies to have use of such unique assets to facilitate the achievement of those agencies' governmental objectives. We are all parts of one and the same Government. We must cooperate with each other in all reasonable ways. And that includes sharing the expertise we have. If we, because we are a larger organization, or because we are more enterprising, have expertise in labor relations and equal employment, and there are small agencies, or other agencies who lack it, small agencies who did not have the kind of staffing that permit them to have it, we could help them out. We do not go out selling it. If we see a way we might be of some help we could, assuming always that it would not detract from our main function, providing assistance. We, of course, should retain and exercise the right to decide whether, how much, when, what kind, etc., of help will be provided. We must always keep in mind that our first and primary obligation is to the Social Security program.

Q: Can you think of other examples where we actually did that?

Futterman:

Well, I'm sure there are numerous examples. The examples when we worked with the Department of Agriculture so that we made available, subject to their consent, a selection of beneficiaries, that would enable them to do research about the diets of the aged, or about their needs. We geographically and industrially coded the employer's application Form SS-4. Those geographic and industrial codes were utilized in order to be able to classify by selected geographical units and industry the earnings data that employers regularly reported, so our researchers would know the extent of the distribution by industry and location of employment.

Q: And we used that for our internal research?

Futterman:

We used it for research and statistics and our legislative planning, the staffs did. But basically, it was decided from the beginning that it would be stupid for SSA to produce data without taking the extra steps so that the data could be very useful to other agencies and to business and industry.

Q: And I think it's true over the years that our data has been one of the most important sources for a lot of research.

Futterman:

That's right, oh absolutely. Marketing data, breakdowns of income by region and the like, were used. Our data indicated what level the income was reaching and it provided immeasurably important data for business people, marketers. And this was issued, we did this I'm sure, in conjunction with the Department of Labor, that particular kind of thing. But SSA operations, beneficiary rolls, earning and income data, even employees, often provided uniquely fertile possibilities for important research in medicine, aging, etc. I did it, for instance, on a much smaller scale, in the Woodlawn area. I'd let it be known that we would consider cooperating in health-related research, subject to the conditions that: (1) each individual potential participant would be able to decide whether or not he/she wanted to participate, and that decision would be with the benefit of their own physician's advice; and (2) that the project would be structured so that some medical goodies would go to the employees, e.g.-- a though examination by a cardiologist, screening tests for glaucoma, diabetes, etc.--it would not be just something that they volunteered for and got little personally in return. We wanted some benefit for each person who participated; namely, that in the screening for the study, participants would be able to learn about or check some aspect of their health. The project not infrequently uncovered poor health conditions previously not known to the participant, such as glaucoma, as my Executive Officer discovered, or serious heart disease as another good friend discovered, that neither was aware of.

I recall very clearly a study in the years when there was very little known about what kind of fats were causing cardiac problems. And I was told that there was only one laboratory in the country that could then reliably do the work that would identify what was the content of the blood fat in terms of lipids. Which was then beginning to be an area that medical research was beginning to look into. And they wanted to do a test with our kind of a population, which was fairly representative of the total population. Of course, the Baltimore employees were diverse, almost all ages, from 16, 18 and going up to retirement ages. And black, white, brown, whatever, including people who came to Baltimore from various parts of the country. It was a good cross section--better by far from most that the researchers could get any place else. What we, SSA, got out of it was that (1) the satisfaction in participating in a meaningful health research project; and (2) that every person who entered the study would get an examination by a cardiologist; a thorough examination by a cardiologist, knowing that some might discover they have a serious heart condition and (3) the final group participating in the actual research, who did so with the consent of their own physicians, could benefit from the research on several drugs.

Q: And so we pooled a sample of people from our earnings record data?

Futterman:

Not earnings data, no. This was of employees at Woodlawn.

Q: Oh, I'm sorry. Okay.

Futterman:

Because we had a population of 17,000, or whatever. We did a lot of things like that for the people at Woodlawn, and they loved it. I didn't mind that. But it was always with their consent; nobody said they had to participate or anything like that. And usually, like the one I'm just referring to, before they were enrolled in a group that took a certain kind of medicine and all that, it was with the consent of their own physicians. Otherwise, they would not be selected. So they had the benefit of contributing to the advancement of medicine. At the same time, they learned a lot about an aspect of health of special interest to them. In the process they also benefited from a free evaluation by a cardiologist.

There were variations of this around the country. And Social Security as a totality, the assets of our organization, the assets of our information that we possessed, the assets of our staffing, the expertise were made available in various ways. The point to draw from what I have said without wanting to overemphasize it, we did not participate in these efforts grudgingly but we were open and willing. Unless of course it was contra-indicated by our own needs to apply our energies someplace else, we were more than willing to cooperate.

Relationship Between Field & Central Office

Futterman:

One of the things that would happen, for good reasons, especially in a large agency with a big field organization, the head people seeking to build up the confidence, the sense of importance, of the field organization by warmly praising each contribution by field staff members participating in some meeting or conference at central office. Not infrequently the "praise" not only is given for the good and insightful contributions they are in a positions to make, but also to the routine and mediocre or even less. When this approach is not taken with due restraint, a downside results: an unreal and inflated value by some of their own perceptivity. This is the first time I have mentioned this. I'm sure, just as you're nodding your head, many observers would agree with what I'm saying. You may find an attitude developing in the field sometimes, not all over, not everyone, but enough to be palpable, to identify, and it's fashionable: "Those pinheads back in Central Office, they don't know what the hell they're doing." Well, as a pinhead who worked in Central Office, who knew far better many times after I got the information that what they were arguing against or what they thought was only a Central office thing, was far better thought-through and based on a lot more data, than they knew.

This was an indulgence that the Central Office indulged in. It was brought home to me on many occasions, very clearly when we had a big meeting in Baltimore of all the top regional people, a national conference in Baltimore. Oscar Pogge or Bob Ball, or whoever, would praise the importance of the regions and their contributions and what they did. It wasn't always justified. The natural result is when you do that, it cheapens the currency. When you give praise when it's not due, you cheapen the currency and you may reap unintended consequences. And I'm saying that executives often are aware of that, they try to control it; keep it within decent bounds. But sometimes a field person, and this goes all the way up to the regional heads, act like they are as important and knowledgeable as the head of the organization. And if you are mature, you should say, "Well, he's trying to be nice to us and all that; I'm not really that good, and I should be humble." But no, it sometimes goes the other way with some individuals.

Now, I was going to make a point. Take the situation where we have new legislation that suddenly makes 2,000,000 people eligible immediately on July 1st for benefits. We're not equipped to handle 2,000,000 people right away, are we? So we need to do several things. The first thing we need to do is review what we're doing. And if we were placing emphasis at a time we were not so busy on employees to improve the quality of our service to the public because the workload was down and time was available, we need to review whether the insistence on higher quality should continue with that kind of an emphasis when we're confronted with sudden backlogs of 2,000,000. We need to know how to shift gears. When we had more time than we needed to carry the load, we properly should make sure that the work we handled was the best quality we could produce, because we had time to do it. On the other hand, to deny the payment of benefits, to withhold it, longer than it was absolutely required, is to deprive people of the benefits they're due. And you might say, "Well, we can do it. What's the big deal, two months, three months?" The big deal is that a person who died within the month never got it while he was alive. We need to have a plan that we can defend against retreating somewhat from the emphasis on quality. And cutting a corner here or there and instituting rough things like, "all right, we accept an error of two percent in this category, because what we're going to do is pay 10 percent more people earlier than we would otherwise." So when you make the cost-benefit evaluation in general terms, you say, "Sure. I'd rather pay the 10 percent earlier than worry about a quantifiable error of a certain degree on two percent.

So, what's the point of this story? The point of this story is related to the general story that we were talking about the superficiality, sometimes, of field people, alleging ignorance on the part of Central Office is this: Sometimes when field staff are brought in for training, for maybe a change in emphasis of service or something like that, somebody from the field would say, "Well, why don't you guys make up your mind? In May you demand quality, and in July you ask us to cut some corners to increase production. Why are you so inconsistent? Just tell us what you want." Well, what we wanted in May was more of an emphasis on quality, and what we want now is more of an emphasis on quantity, and in each case the emphasis was appropriate for the particular situation at the time. That was arrogance on their part that they would not see this. They just assumed that these characters from Central Office were pinheads. I'm not trying to defend Central Office Staff of all parts of the organization, but they need to understand and respect one another's functions, limitations, strengths--and reinforce and compliment one another. By and large, Central Office people in Social Security have done a good job, as have the staff in the field. And people who come from the field to work in Central Office often remark that they begin to see the things that they didn't understand before.

Misc. Topics in Career Civil Service

Q: I do want to pick up where we left off, but there are a couple of things I want to talk about . . .

Futterman:

I don't know whether I showed you this, but it was a recent letter, from Ian Paris. You may know Ian Paris. Read it to yourself, it's just a short letter. And it was just a recent thing.

Q: You have several copies of this, can I take one?

Futterman:

Yes.

Ian didn't get a lot of my attention or anything like that. He was in one of the programs that I had set up, the 2-year college thing, postgraduate work. And after he finished that, I gave him an opportunity to work in my immediate office. I've had done that with people like John Trout, for instance. It was not an original idea with me, one of the Assistant Secretaries of HEW did that. He was an entirely different kind of a person than I am. But I offered it to John Trout, and I offered it to Ian, to be sort of a gopher and take on certain personal tasks that I wanted them to pursue personally until I could work through certain ideas and I could better define and shape a major project that I would then assign to a component in the Office of Administration. I assigned some projects to Ian. And I worked with him; it was a concept for an executive replacement program, pointing out the problems that we were going to have and proposing methods to overcome them. I remember something he said then. And he did not, as he indicates in this letter, have a reputation of "sucking up." I don't like anybody to "suck up" to me. But I remember he did say something like: The two months or so he spent with me, he learned as much here as he learned in the postgraduate two years. I don't say these things; I run across them. Bill Mitchell, went on the same thing.

Q: I should borrow this and make a copy of it for your files.

Futterman:

Did you read it?

Q: Yeah.

Futterman:

Bill Mitchell had every reason to not be very partial to me. Because it might have seemed to him that Bob Ball and me, were just not team players. We frequently pressed him to approve or reopen decisions that he, or others at higher levels had made, when we at BOASI thought that new considerations that arose provided good reason to reverse that decision. As a matter of fact, there was a saying, and I think it probably originated with Bob, but we would say, "Well, Bill Mitchell's going to turn this down. But that's not going to stop us." Mitchell's dead now so I don't mind saying this. He was, in my view, a man of great rectitude; he played by rules rigidly applied. Sometimes playing by "strict rules" forecloses matters prematurely that should be kept open. Now that didn't mean we went behind his back. It meant we kept returning to him, when we thought there was good reason to, to reopen the issue. And it was an expression of a very honorable philosophy. Because Bob and I were straight-arrows too.

And this involved a piece of operating wisdom that I had acquired way back: some people have reputations at work for being "operators," real operators, getting things done by bending and twisting the regulations or the rules. In my definition, they are not operators. In my definition, an operator is someone who knows how to use the rules and overcome the obstacles, that's an operator. Anybody could say, "Oh well, they won't catch me." They may catch you or they might not, but that's immaterial. To me, an operator meant somebody who sticks to the game within the "Marquis of Queensbury rules," and accomplished things, overcoming problems in ways that are legitimate.

Recovering Misc. Trust Fund Income

Q: All right Jack, we have talked a lot about your philosophy of management, and the principles of management. Can you give me some specific examples of issues you dealt with during this period?

Futterman:

I mention small things as well as big. Even today, at least when Bob Myers was still Actuary, the Trustees Report would always report, and I guess that they are still doing it today, on monies recovered by the Trust Funds from the sale of waste paper and things like that. Well that was Futterman's idea. I was in Fiscal at the time, new to Fiscal, and Wendell Bearden, who worked for me, kept talking about the "miscellaneous funds of the Treasury." And I asked what that is. And that was a fund to which any monies that we collected, or found on our property, would be accounted for and transferred to the Treasury's Miscellaneous Fund. Now what went in there? I had a list of things. All of the punch cards the Joe Fay and his crowd where producing and then throwing away after use in operations--because in the build-up process you kept the Master Card, but you had a lot of other cards, detail cards, that went into the building up of life-time earning records, and ledger sheets, and employer reports--we had all kinds and vast amounts of waste paper. We sold that paper for waste paper. High rag content paper. Now in terms of the total SSA expenses it was almost nothing. But we used to recover, as I recall, in the old days, a couple of hundred thousand dollars just from that one thing. We would collect money on telephones on our property, you know, public telephones and those things were historically deposited to the Treasury. We sold cabinets that we beat up and used up, or typewriters or whatever. Trust Fund money had paid for these items, but nonetheless the money, under the regulations, went to the Treasury and so on down the line.

So I thought in our role of protecting the Trust Funds, we should challenge this, and not be deterred by the fact that there were regulations going back to 1880 requiring us to do it. I was told, "Well you can't get it changed unless you go to the Comptroller General." And so I said, "Okay go to the Comptroller General's Office." They went up and down the Comptroller General's Office only to learn that the Comptroller General's staff were without power to make any change in the regulation. We finally were advised that the only way was to get the Comptroller General to render a "decision" reversing the regulation. I wrote a letter. I wrote several such letters in different connections. But in this connection I wrote a letter to the Comptroller General. I don't remember whether it went out under my signature or not, but I wrote it. And in effect it said, after listing each of the many sources of miscellaneous income, something like maybe a hundred and some odd individual items, "The regulation originating in the 1880s requires all monies, all such monies, to be deposited to the Treasury Miscellaneous Fund. Since Social Security was not enacted until 1935 this may account for the failure to recognize that the source of the assets was not the U.S. Treasury's General Fund, but the Social Security Trust Fund." And so I said, "Will you therefore, since all of these, and I described each of these, were bought by the Trust Fund, would you be constrained to object to the deposit of such recovered funds to the Trust Fund instead of the U.S. Treasury's Miscellaneous Funds?" And lo and behold, despite all the many unsuccessful attempts to work it out with the staff of the General Accounting Office and predictions of failure, the Comptroller said, "In respect to items such and so, I would not be constrained to object." So we were able to get almost all that money deposited into the Trust Fund.

Travel Procedures

Futterman:

A similar thing comes to mind as I am saying it, very early on in my tenure as a Financial Management Officer, ( I had come from the Division of Accounting Operations) and you know my background, I was a college graduate and all of that. I was a bright guy, but I didn't have any real background for this kind of work. I just applied common sense. I didn't just go along with the crowd or accept ways of handling matters because that's the way it always has been done.

My position required me to go to Washington a lot, by the B&O Railroad. They had little electric trains that we would take out of Camden Yards. And the way it worked in those days, was you went to the Travel Office and they issued a Travel Office authorization for each trip.

Q: For fifty cents or a dollar and a half or something.

Futterman:

Yes. Plus the process was expensive. You would go to the Travel Office and they would authorize you to go to Washington and return. And then you went down to the railroad station and there would be a line of government people each having to go through a tedious manual process with the B&O Ticket Agent to convert the form authorizing the RR ticket into an actual ticket from Baltimore to Washington and return. And I thought it was expensive in time and it was unnecessary. I can understand why the procedure was originally set up that way. You always have to think when you ask for a change, what were the original concept and reasons for the procedure, and then try to present the request for change in terms that you are not asking for change to the original purpose, but to retain the concept and apply it in a new way which has all of the safeguards that the procedure was originally designed to achieve. So I wrote another proposal, and my staff went up and down on that unsuccessfully trying to get the required process changed. This was when I was at a fairly low grade level. I was a GS-12 when I went into that job and my staff was even lower. But they were doing this kind of dealing all along. That is what happens a lot of times at staff levels lower down in the organization: it's often very difficult for staff at such levels be effective in persuading their bosses to change regulations that have been long followed and too often the result was, "No. General Accounting Office Regulations so and so requires us to do so and so." And they were unable to get the change.

So I wrote another letter to the Comptroller General. I didn't write all that many; but at that one stage being new to the job I focused on some of the things that I could grab a hold of. This was a relatively small branch, Financial Management Branch, although I also had Payroll Staff at that time under my wing, and the Travel Staff. And I said, in effect, "We would like to be able to buy blocks of tickets to Baltimore/Washington. We understand the desire to be sure that these tickets that we would buy in a block are not used without proper authorization and accounting. What we would propose instead, is to establish a register in which we would list each of the tickets in the block and account for each and every one of them." So if SSA staff needed a ticket they would go to the Travel Office to pick up a ticket, not an authorization form. In a matter of a moment, you know, and we would record their name, where they went etc. And make sure that they had proper authority. The Comptroller General said, "Yes." Permitting us to set up an approved method of handling travel arrangements despite existing regulations that in specific terms did not permit it. We in effect were getting the GAO to change without changing. A lot of times they did not change the regulation, they would let it stand as it was, but they would say that they would not be constrained to object to the alternative method we proposed.

Training Programs

Futterman:

Let me read this because it'll help me recall more of the details. This is about the training programs I implemented. This apparently sketches out what I undertook. It was fairly comprehensive. "SSA's system of programs of career development, geared to several levels of SSA needs. All the major parts of the system are now in operation, and it has reached the stage of maturity to which I can report on it as a well-integrated system."

We didn't have any significant training programs at Social Security when I started. I mean, each bureau zealously guarded its own training. At the SSA level we had inherited, from the very early days, a skeleton staff of trainers who really had lost their function. But they were still around in different places.

"The system is multifaceted. It's not a single mechanism or course of development for all employees. It's not geared to a narrow selection of employee types, nor is it designed to fit individuals into some predetermined molds."

Now that was something that I personally emphasized as important. I thought we should maximize the merit principal in our activities to the extent feasible: that SSA was/is a merit organization, that every job that opened up should be available, up for grabs to the best person at that time, whatever the reason, he was the best person. There was a train of thought in the bureau, McKenna was one that represented that, that you pick out very promising individuals and you train them with a guaranteed end-result to the employee. And as a matter of fact, he operated that way to a large extent, because in the absence of SSA-level training programs and policies he was free to follow his own views. Nor did I attempt to inhibit, within the framework of other things, his doing that. And of course, he did that before the SSA level programs were launched. And was able to continue to do so in training programs over which he continued to have authority. To his great credit, Hugh McKenna was a strong proponent of training and well-informed about developments in that field.

Why did I object to that particular approach? I thought that was sort of a "Prince of Wales" approach. It moved the incentive away from all others. The designated Prince of Wales does not have a particular incentive to give of his very best after he has been designated. He can relax because he's got an assured guaranteed contract, in effect. And that's not an incentive calculated to make him break his back. I was going to say something less, but since this is going to be possibly for history, you get that point. Now the other point is, it's a disincentive to all the large number of others who might have been strong candidates for this position in question but were not selected for the program. Unless you're on that designated highway that is going through with all the lights green in this direction, you may lay back; you may say, "what's the use? You know, I'm not one of the favorites who were picked out when they were younger, much younger, and then buzz through the middle of the organization."

Now we produced some pretty good people the Prince of Wales way. I'm not saying that it's not effective on occasion. But we don't have any measure of its ineffectiveness; how much of a damper did it put on everybody else? That was one reason why I did not like "Prince of Wales" programs which were very much in the vogue in the government as a whole, and in private industry, and by and large in Social Security. I chose to design the programs in a way that offered training opportunities to quality candidates without any guaranteed promotion at the end. I reasoned that if they started with outstanding potential, worked hard, and profited from their training opportunities, they would be outstanding candidates for promotion on merit and not merely by credentials. At the same time, this approach enabled all others to contend on their merits. The "door was open" until selection time and the choice would be on the realities at that time. I doubt if I had not included that kind of a thing in the SSA level training, and not discussed it with Bob Ball, he might not have seen anything wrong in the standard approach; it would have seemed very usual. But that was my thinking. It illustrates the strong views I have on some matters, like some of the things we discussed the other day: annual reporting and staggering the delivery of checks and things like that.

Q: Yeah, that's a good one; that's helpful.

Futterman:

"The (training) system is a multi-faceted one, not a single mechanism. The range is a wide range of programs: from broad-gauge developmental experience of the Executive Development Program to very specialized academic programs such as the Financial Management Intern Program. A second major emphasis is on work experience, rather than on classroom training. Classroom and academic training are, of course, an important part, but primarily as a supplement to on-the-job training. All of the major programs in SSA's career-development system such as, the Executive Development Program, the Management Intern Program, rely primarily on rotational work experience. Third, the system is very flexible, both in the programs it offers and the specific activities available for employees, both within the specific programs and those who occasionally attend training courses or even in college."

For instance, while he was in the Executive Development Program, one of Sid Leibovitz's assignments was in a BDOO Regional Office, where he evaluated a wide variety of managerial styles in district offices. Another fellow, Lew Dykes, he was a fellow at the top program, Lew Dykes started in one of the lowest jobs in the organization, a CAF-1, I think. He worked his way up as a supply person. And he got into printing because he ran the BOASI (SSA) mimeograph machine and the function grew and he grew along with it. He became a very able printing officer, and continued to grow with the organization. Academically, he was weak. But a bright young fellow, and he got along well with people. So his individualized training program took him outside of Social Security. He didn't have the need to be particularly knowledgeable of the substance of the Social Security program. His SSA job was to manage the printing of a large volume and a variety of documents or whatever. So many of his training assignments were with the Army Publications Division in the Office of the Adjutant General.

"In effect, a wide range of experience and training courses available make it possible for each participant in the program to have a development plan that is tailor-made for him. For the employees who are not in formal development programs, hundreds of courses, seminars, and other activities are available." (That's for other people within SSA; it's a short-term thing.) "Fourth, our career-development programs are not rigid, management-imposed packages of training. Each employee in the development program has a strong voice in planning his own development activity." A paper on the executive development program gives a little report on that. Placement orientation programs; the Management Intern Program; the different ones, and other opportunities. The most widely used of these courses was the Civil Service Commission's Executive Seminar at King's Point. And we also used to have staff training at Williamsburg; New York; Berkeley, California.

Q: Yes, that's a good document for me to have.