Abstract
Modern American public welfare agencies are the results of the continual reorganization of multiple agencies, departments, and programs. I develop four themes about the micro-foundations of reorganization in this article to illustrate how politics intersect with agency structure and the reshaping of the national bureaucracy. The empirical part of this article examines President Dwight D. Eisenhower’s assembling of a national health, education, and public welfare agency. The creation of the Department of Health, Education, and Welfare (HEW) in 1953 represents a critical juncture in that evolutionary process.
In 1953, Dwight D. Eisenhower became President and promptly created a cabinet-level agency devoted to the “human side” of government. The Department of Health, Education, and Welfare (HEW) was the first department to be created at the cabinet level in 40 years, during the first Republican administration in over 20 years, and with Republican control of both chambers of Congress. It was the largest reorganization until the creation of the Department of Homeland Security (DHS). These events followed a fourfold increase in federal personnel and 16-fold increase in federal expenditures over the preceding two decades (Somers, 1954, p. 131). HEW’s creation followed debates over national health insurance, socialized medicine, and a proposed Department of Public Welfare. Also, it followed major wars, the suburbanization of America, and the creation of Social Security. It coincided with the beginnings of the Cold War, the push for civil rights, and the development of a modern health care and pharmaceutical infrastructure.
Over time, three prominent narratives emerged about reorganization. In the first line of research, reorganization can be a technical means to achieve effectiveness and efficiency, to attain an orthodox bureaucracy (e.g., Seidman, 1980). Second, reorganization is a mechanism for constitutional inter-branch conflict (e.g., Moe, 1989). Third, reorganization lets the president to de-emphasize parties generally, with the secondary effect of increasing inter-branch conflict (e.g., Milkis, 1993). In one way, reorganization is a path-dependent process (Sydow & Schreyögg, 2011), so choices dictate an evolutionary process that makes it hard to conceptualize of an “average” reorganization; each is a special case. Each is a mix of the three narratives.
I argue that presidents have been able to use reorganization to change the meaning of partisan labels, of partisan affiliations. In this sense, the president can use reorganization to shape public perceptions of the party itself. The mechanics here flow from the strategic manipulation of policy locations by partisan leaders (e.g., Miller & Schofield, 2003), but more generally this is practical heresthetics (Riker, 1986). Strategic opportunities often create unusual policy outcomes (e.g., Gilmour, 1995). This fourth narrative helps illuminate the tension between short-run motives and the long-run evolution of agencies. Short-run motives often lead to unexpected changes that perhaps are intended by none of the involved actors. Over the long run, though, early decisions can open gates of opportunity for following administrations.
Specifically, I center on the Eisenhower Administration’s creation of HEW in 1953 from numerous smaller, dispersed programs as a critical juncture in the process that produced the current U.S. health policy infrastructure. HEW formed the basis for the rapid growth of the federal health programs of the 1960s and 1970s. I focus on the process that elevated HEW to the cabinet level and its fit with these views of reorganization as a venue for political conflict and compromise. The first section of this article argues that HEW’s creation was part of a larger attempt by the Administration to manage the federal bureaucracy through organizational and management techniques from business and the military. Yet, Eisenhower succeeded where the Truman Administration failed in 1949 and 1950 to reorganize the Federal Security Agency (FSA) largely because of the political gains Eisenhower expected from HEW’s creation—mostly symbolic but also including interests like the American Medical Association (AMA), increased presidential control over the agency, and the creation of a venue for moderate solutions to social dilemmas. In this case, Eisenhower’s goal was to establish credentials and a competitive strategy on what he called the “human side” of government.
After that, I sketch the managerial performance of Oveta Culp Hobby, Eisenhower’s choice for Federal Security Administrator and first Secretary of HEW. Hobby was the second woman nominated as a departmental secretary; she managed over 37,500 employees, a budget of over US$4 billion, 67 active appropriations, and an agency composed of enormously disparate component programs. My central focus is on Hobby’s ability to exercise managerial control over the FSA and then HEW in terms of subordinate selection, delegation, and management of relations with Congress. I also consider Hobby’s standing and performance as a member of the cabinet. The long-term impact of HEW depended on Hobby’s managerial leadership.
This discussion illuminates four basic themes embedded in the design of national agencies by the use of political reorganization. First, HEW’s creation was driven partially by Eisenhower’s symbolic need to show concern for health care, but the agency, once formed, took on a life of its own. Second, HEW’s creation led to opportunities for later health reforms, even though arguments were made for the construction of HEW as a way of heading off momentum for national health insurance. Third, Eisenhower’s HEW Secretary appointee—Oveta Culp Hobby—compromised her own position by undercutting her Democratic base without building alliances with liberal Republicans in Congress and in the cabinet. Fourth, with Hobby’s help, Eisenhower positioned himself as a successor to the New Deal/Fair Deal legacy.
In The Hidden-Hand Presidency, his seminal book on Eisenhower, Greenstein (1982) argued that presidents use specific techniques as they operate in two roles (as symbolic head of government and also as effective head), including hidden bargaining, symbolic and instrumental communication, and constrained delegation to subordinates. This reorganization is consistent with Greenstein, but while individual reorganization attempts are determined by political actors’ near-term motivations, successful symbolic action (e.g., Cobb & Elder, 1973; Edelman, 1953) creates opportunities for future policy making. Eisenhower’s near-term desire for symbolic action created opportunities for later health reforms. This tension between near-term successes and long-term opportunities is embedded in all political attempts to reorganize the bureaucracy; it is the cumulative result of micro-institutional motivations for bureaucratic control and symbolic action. Moreover, it gives reason to focus on reorganization as a composite of micro-strategic processes. As such, the resulting agency is a kind of equilibrium institution (Riker, 1980; Shepsle, 1986), for which policy effectiveness will vary over time as the agency takes a life of its own.
Presidential Reorganization
The political reorganization of national agencies is a primary mechanism for shaping the state. Bureaus often are transmuted as they expand, which includes changes to their organizational structures, cultures, symbols, and rituals (e.g., Carpenter, 1998; Skocpol, 1979; Skowronek, 1982). States emerge as their agencies take on new roles and tasks, and become rationalized. Yet, we now recognize that presidents, legislatures, interest groups, and bureaucrats compete and cooperate when altering the organizational structure of bureaus. Actors bring specific motivations to reorganization, and the resulting bureau may look far different from what any one actor intends; the organization may be made ineffective through reorganization (Moe, 1989). Reorganization may shape and perfect agencies, but it is also political currency.
Contemporary research on the expansion of the state often limits its scope of inquiry to either programmatic development or macro-reorganization (e.g., Skowronek, 1993; Sparrow, 1996). Separate from both programmatic and macro-reorganizational perspectives is a focus on the underlying mechanics of agency construction, which is a form of Riker’s (1986) “heresthetics.” They result from how actors practice the “art of strategic manipulation.” All actors have interests to be pursued in any reorganization. As a consequence, what we get is what no one person intended; it is an amalgamation of the different actors’ views, their strategic initiatives, and how those strategies interact and fuse. Each actor is practicing strategic manipulation.
Reorganization is a basic tool in politics (March & Olson, 1983). In their seminal paper on this, March and Olson report that the 12 major American comprehensive reorganization attempts up to 1980 were only a small fraction of all efforts during that period, and that those efforts had little impact on the cost of government, efficiency, or the expansion of presidential control (e.g., the Brownlow Committee, the Hoover Commissions). However, reorganization is a persistent element of the American political system. March and Olson’s comprehensive and dynamic account leads to three primary observations. First, the short-term process governing any reorganization attempt depends on the availability of choice opportunities, problems, solutions, and participants. Second, the long-term development of public agencies depends more on incremental adaptation than intentional action. Third, reorganization is an interpretation of the currency of politics and administration, and an expression of competing and common symbols and their underlying values. Specifically, two competing rhetoric orthodoxies (one of administration, one of realpolitik) cycled throughout the 12 reorganization movements studied.
In the near term, reorganization is a basic tool because it sets the terms of political trade. Presidents may desire to extend their control but may be unwilling to use their authority when defeat is possible. Legislators may be equally concerned about the structure of the bureaucracy, but reorganization can threaten Congressional dominance as it provides a trading chip for presidents. Access by outside interests to the process is often difficult to govern, but historically, only a few agents have chosen to play in any one game. For presidents, active, comprehensive reorganization tends to consolidate opposition. Ultimately, almost all parties are dissatisfied with reorganization by the time any effort plays out. And success may be illusory—newly created departments are usually composed of old agencies with traditional missions and constituencies.
Much of the time we talk about this type of bureaucratic reorganization as a mostly technical enterprise, partly because the history of presidential reorganization authority largely dates to Herbert Hoover’s interest in scientific management (Fisher & Moe, 1981). The rhetoric of administration as a technical enterprise—a search for enhanced efficiency and effectiveness—permeated all of the major attempts to comprehensively reorganize the federal government (March & Olson, 1983). In this rhetoric, the rationale for reorganization and reform is that organizational change can lead to more effective, more efficient organizations, accordingly, as Hoover presidents have often relied on arguments about the technical or scientific merits of reorganization. “Explicit, comprehensive planning of administrative structures is possible and necessary,” in part because “piecemeal change creates chaos” (March & Olson, 1983, p. 282). The president’s evolving role as manager encouraged people to think of this as specifically functional (e.g., Arnold, 1976).
Over time, though, some scholars have come to see bureaucratic reorganization through the lens of a more general “politics of bureaucratic structure,” with administrative reform viewed as a largely political enterprise (Moe, 1989). For members of Congress, the reorganization of federal agencies may allow them to lock in their political gains now and mitigate the political uncertainty interest groups may face in future time periods. Yet, presidents carry significant managerial incentives and see reorganization as a technique for controlling the bureaucracy, perhaps as a way of fulfilling their function as chief executive. While presidents may seek to enhance leverage over the agency for control purposes, so far they have done so in a political context defined in part by our system of separated powers. This means that reorganization is realpolitik (March & Olson, 1983) in a system of warring institutions. Politics have only become more intrusive in complicated administrative arrangements over time (Kettl, 2006).
Still others have argued that presidents reorganize the bureaucracy (or at least reform the civil service) to reduce the power of the parties. During the 20th century, presidents legislated procedural reforms that increased the independence and capacity of the executive branch in making policy over that of the party, which is traditionally represented in legislatures and localities (Milkis, 1993). For example, Wilson used reorganization specifically to reduce the parties’ power to staff the government. The institutional reforms that followed in the Roosevelt era enabled the president to govern in the absence of strong party control of the government and its bureaucracy. Johnson later sought to mold the bureaucracy as a personal replacement for the party, even to the point of marginalizing the party itself as a national force. In each of these cases, the president’s problem was to shape the bureaucracy as a personal organization—perhaps even as a surrogate for their own party. In the long run, the effect of this was to shift conflict to the levers of administrative control, as Congress sought to balance a revitalized presidency.
Presidents are clearly more than just a manager who sees reorganization as a technical enterprise; however, reorganization does affect an agency’s effectiveness and the president holds specific managerial and institutional motivations, but the president remains an elected official—especially in the first term. These electoral motivations mean that presidents—because they are concerned with reelection, because they seek legislative majorities to increase their effectiveness, or even because they are the figureheads of their party—often seek to maximize votes, enlist disaffected voters, define the political space, and shape the political agenda.
Presidents can use their managerial powers to help solve their problems as party leaders. Specifically, at important junctures in time, presidents have used reorganization to change the public’s perception of his partisan affiliation—the meaning of his partisan label. Rather than change parties, the president can use reorganization to change the public’s perception of the party itself. Clearly, 20th-century presidents used reorganization to shape the role of the political parties. The president may use reorganization to help shape the policy location of the party itself, to alter its profile in the national political space. The president seeks this political reshaping of the party in part through the reorganization of the bureaucracy.
This motivation for presidents to reconstruct the party’s image has deep roots in the disjuncture that can occur between a party candidate and party activists when the candidate pursues outside voters that are disaffected and unrepresented. For example, Miller and Schofield (2003) argue that candidates undertake “flanking” moves to enlist outside voters at the risk of losing support among party activists and in so doing provide evidence for broad realignment of parties over the 20th century. The question arises, though, by what means do candidates make policy-based claims for those voters? Of course, candidates have a number of mechanisms at hand, including legislative proposals and credit-claiming. Miller and Schofield hint that the forcing constraint that operates on those claims is whether the candidate can make credible commitments to the policy path that the disaffected and unrepresented voters value. This is exactly why reorganization is a presidential mechanism for shifting the party’s location in political space: Agency structure is a credible commitment (Miller & Whitford, 2016).
Of course, the president cannot take unilateral action in most cases of reorganization; his power depends on the agreement of other institutions, as is shown in his changing role under the Reorganization Act for Congress in approving presidential plans (Fisher & Moe, 1981). He prefers to expand the types of reorganizations he can undertake and to limit those veto points.
At the same time, the president’s ability to reshape the political landscape by shaping the bureaucracy depends on technical aspects of reorganization such as the power of political appointees to achieve the goals of the president, and thus to make the linkages the president desires in shaping his party’s public profile. This is because to achieve that also depends on effective appointees matching the president’s wishes to the organization and policy outputs. Credible appointees reinforce the credible commitment.
This is one reason why reorganization is an attractive strategy for presidents seeking to change their party’s position. In times of unsettled coalitions, flanking moves allow elected officials to claim disaffected voters and form new and unique coalitions—but doing so requires credible commitments to the positions that are unfamiliar to the public and probably distasteful to policy-aware party activists. Credible commitment to a position through personnel change in the party engenders traditional concerns about the flexibility and fluidity of compositions of tastes and preferences. The “exit, voice, and loyalty” problem activists face when the president acts is balanced equally by the “tipping” problem the president faces when activists resist his overtures (Hirschman, 1970). If so, why would presidents seek reorganization?
Even if reorganization efforts do not change the cost of government or improve efficiency, they may yet expand presidential control as reorganization changes the slope and determines the long-run evolution of organizations. Reorganization is itself a way of expressing competing and common symbols and their underlying values (e.g., Cobb & Elder, 1973; Edelman, 1953)—even in the reform rhetoric of the early 20th century (the concentration on technical efficiency and neutral competence) because those benefited specific interest groups, legislators, and bureaucrats (Knott & Miller, 1987); the rhetoric of efficiency itself resonates in part because of this symbolic manipulation. If reorganization sets the terms of political trade, presidents seeking to extend their control, legislators seeking to thwart it, and outside interests seeking access will find their views in conflict (Moe, 1989). The consequence is that all parties almost always are dissatisfied by the time any effort plays out, and none “win” in the traditional sense. Through the process, along the path, because of heterogeneity in the evolutionary process, the agency becomes something unanticipated. Hardwiring is replaced by heresthetics. The new agency—even a department newly created from old agencies with traditional missions and constituencies—takes a life of its own.
Eisenhower Creates HEW
Eisenhower’s nomination and election in 1952 altered the electoral and administrative landscape. His popularity, standing as a political novice, and history as a neutral military official signaled potential change in the president’s role and status. Indeed, the future of the Republican Party and its conservative traditions were at stake (Reichard, 1975). Eisenhower sought to change the Republican Party’s profile in the American political landscape, and to construct an organizational face for his “Modern” or “New” Republicanism. One specific reason for this strategic choice was his perception that his party’s competitive standing was weak—a “liability in [his] own reelection campaign,” which “prompted unusual haste in his party building” (Galvin, 2009, p. 24). His “Mandate for Change” was not just a personal triumph but relied on a mixture of a negative campaign—against Korea, communism, and corruption—and recognition of the state of political change (Reichard, 1975). It is hard to understate the importance of this shift given the context of the United States and the evolution of the policy positions of its parties. As Stebenne (2006) puts it, Eisenhower-era Republicanism, as constructed in part with the help of Arthur Larson (its chief theoretician), provided the underlying philosophy and specific policy positions that gave a foundation for later variants like Bush-era “compassionate conservatism” (p. x).
But Eisenhower’s Administration also bridged periods of substantial change. In following the New Deal, Eisenhower was poised to act as a “postwar healer,” and in doing so he increased bipartisan acceptance of the modern presidency (Milkis & Nelson, 1999, p. 288). He accomplished this in part by recognizing that the Republican Party, embittered by its outsider status for 20 years, required modernization to preserve the two-party system (Handlin, 1963). He sought a party of “progressive moderates” not controlled by the extreme Right (Richardson, 1979, p. 59). He accepted the federal role in reducing poverty, supplying health and education, and supporting economic growth and markets (Eisenhower, 1958, pp. 1102–1103; see also Cotter, 1983, p. 257). Eisenhower was given this opportunity by winning the Republican nomination and the election, even given his lack of clear party affiliation. He took the nomination from Senator Robert Taft by assembling a coalition of anti-Taft supporters and marginal party loyalists, a fact that later caused Taft to question Eisenhower’s commitment to Republican principles (Cotter, 1983; Richardson, 1979, p. 12). Eisenhower himself had little good to say about Republican loyalists, and strongly argued for a party that could flank the Democrats by remaining fiscally conservative but liberal in its domestic policy (Adams, 1961, p. 28). This was in part due to social changes that marked the early 1950s, including general postwar affluence that reduced the desire for social reform but supported the size of the modern state. Truman had sought to expand on the New Deal and failed, and was limited to consolidating Roosevelt reforms. Because of this and his general approach to executive–legislative relations, party change through legislation was unlikely; the entire Eisenhower legislative agenda was marked by broad moderation.
Eisenhower recognized the difficulty he faced in shifting the party’s position in political space—even to the point of talking of forming a third party. At the same time, party loyalists, presented with unified control of the House, Senate, and presidency for the first time after the New Deal era, were left to decipher what this Administration meant for Republican gains on the domestic agenda. Eisenhower was a regime outsider and that meant a need to identify cleavages in the existing coalition that could be exploited (Skowronek, 1993, 2003). Eisenhower sought to shift the public perception of the party and that reorganization was one mechanism for doing so. It was not, however, the only mechanism. For example, Cotter (1983) details Eisenhower’s multiple attempts to reform the party by working at the national and local levels, changing its personnel and leadership. Two themes are clearly indicated though: that Eisenhower sought to move the party toward unrepresented and disaffected voters, often through “citizen’s groups” that included both new party members and intermittent supporters, and that the decentralized nature of party politics made it very difficult for even a strong executive to move its policy position. As Milkis (2003) notes, the cost of executive action to overcome decentralized politics is potentially to shatter party unity (p. 359).
Specifically, on one hand, he was bound by the fiscal conservatism of his party; on the other, he recognized the extent of public support for a positive role for government, saying, “should any party attempt to abolish social security and eliminate labor laws and farm programs, you should not hear of that party again in our political history” (quoted in Leuchtenburg, 1993, p. 49). Studies have documented the vast changes in American social practices and expectations about the “human side” of government that Eisenhower understood (e.g., Fox, 1986; Starr, 1982). There is debate about his effectiveness: Some say that his effects on partisan labels were mostly limited to topics like foreign affairs (Reichard, 1975), others point out that his strategies caused a backlash within his own party (Wagner, 2006), and still others argue that his actions caused substantial resentment (Andrew, 1997).
Reorganization is itself a political strategy in a game of Rikerian heresthetics—that reorganization is one tool in the attempt to shape public perceptions. It can be “effective” strategy in the senses that the president can set the agenda, that it fits with managerialism, and that structural manipulation is a credible commitment. Practically speaking, though, did Eisenhower carry enough weight to strategically manipulate the reorganization agenda?
Reorganization Mechanics
Central to these questions is Eisenhower’s approach to the campaign. Korea, Communism, and Corruption formed the basis for his agenda; by corruption Eisenhower meant the operation of the national bureaucracies. Eisenhower’s primary themes were efficiency and regeneration of the bureaucracy. The Administration pursued two means for establishing his credentials on corruption in government. First, very soon after the election in 1952, Eisenhower established the President’s Advisory Commission on Government Organization (PACGO), which lasted until 1961 as a tool for surveying and recommending proposals for the reorganization of the bureaucracy. As early as June 1952, Herbert Brownell, soon to be Eisenhower’s Attorney General, commissioned a study of policy positions on the executive branch (Somers, 1954). Eisenhower’s first Executive Order, signed January 29, 1953, established PACGO as his main mechanism for overhauling “the entire creaking federal establishment” (Eisenhower, 1963, p. 133). PACGO—chaired by Nelson A. Rockefeller and composed of Milton S. Eisenhower and Arthur S. Flemming—presented over 21 studies to the President within the next few months. These studies were not publicized and were personally submitted to Eisenhower. They were based on the 1953 Temple University Survey of Federal Reorganization, itself was founded on the first Hoover Commission reports.
Two PACGO proposals are important. First, PACGO proposed that Eisenhower include Dr. Philip Young (chair of the Civil Service Commission) as a continuing member of the cabinet. Eisenhower entered office determined to reduce the numbers of Democratic executives and reclassify Civil Service positions to appointed ones (Somers, 1954). Eisenhower’s election was referred to as “The Time of Jitters” by civil servants (Somers, 1954, p. 131) because it represented the first party change since the New Deal and the exponential growth of the government. There was also a common perception that Democrats had protected many senior executives in the Civil Service by shifting positions from appointed positions with patronage to the protected service. Eisenhower was “determined to strengthen the morale of the career” bureaucrats and considered the challenge important enough to include Young in the cabinet (Eisenhower, 1963, p. 120). More importantly, though, perceived “agency-packing” by earlier administrations caused new political appointees to distrust their inherited bureaucracies. This distrust drove some of the cabinet members toward each other, a “centripetal force” caused by living among “unfriendly natives” (Somers, 1954, p. 136). PACGO’s recommendations on the career service show Eisenhower’s concern with building credentials on corruption, extending control over the bureaucracy; they also show the difficulties new appointees faced in managing their respective agencies and the quality of the interactions—the necessity of those interactions—among cabinet appointees.
PACGO’s second proposal was the creation of HEW. Prior to 1953, some but not all health, education, and public welfare programs were in the holding FSA. FSA was established by Reorganization Plan No. 1 (1939) with responsibility for overseeing constituent units transferred from other agencies, including the Office of Education, the Public Health Service (PHS), the National Youth Administration (NYA), the Civilian Conservation Corps (CCC), the Social Security Board (SSB), and the U.S. Employment Service (USES). Reorganization Plan No. 2 (1939) and Reorganization Plan No. 4 (1940) added others, including the Food and Drug Administration (see Carpenter, 2010). The Brownlow Committee recommended the creation of a cabinet-level Department of Social Welfare, but the FSA came about due to a prohibition on new cabinet-level departments. “Security” was chosen over “welfare” because of the connection to economic security (Miles, 1974, p. 18). FSA Administrators were Paul V. McNutt (1939–1945), Watson B. Miller (1945–1947), and Oscar B. Ewing (1947–1953).
Reorganization Plan No. 1 (1953), effective April 11, 1953, abolished the FSA and transferred its functions to a new HEW. 1 Eisenhower succeeded where Truman failed: Truman twice proposed FSA to cabinet status (in 1949 and 1950); twice Congress rejected it. Truman’s failure affected Eisenhower’s later success.
Specifically, the Truman Administration had a running battle with Congress over national health insurance (see Berkowitz, 1995; Blumenthal & Morone, 2009; Chapin, 2015; Derthick, 1979; Funigiello, 2005). At Truman’s behest, FSA Administrator Oscar Ewing organized and advocated the Administration’s position on compulsory national health insurance throughout the late 1940s. As Poen (1979) reviews in great detail, Ewing organized this position but also may have led Truman by pressing the case for a national comprehensive plan. By April 1949, strong interest coalitions—led by the AMA, which had long blocked compulsory insurance—opposed Truman and Ewing. One element of the coalitions’ success was to associate compulsory health insurance with socialized medicine and also with Oscar Ewing and the FSA. In 1949, the Senate used its one-house veto to reject Truman’s Reorganization Plan No. 1. The FSA remained just an agency, and Ewing remained its Administrator. Poen reports that the vote was a referendum on health insurance, and that the core opposition came from conservative Southern Democrats.
This lack of reorganization during these years flew in the face of national trends in health, education, and welfare, as well as administrative recommendations. The first Hoover Commission explicitly proposed a “United Medical Administration” to account for the vast increase in expenditures, due in part to the Hill-Burton Hospital Construction Act. Truman’s Department of Welfare failed just as the country’s exposure to health and education concerns rose following World War II and coincided with the growth in the suburbs. However, the power of the AMA, combined with choices made by FSA and Oscar Ewing, doomed national health insurance and the expansion of the FSA’s capacity. Ewing later admitted that the AMA had been effective by telling “how much political influence the country doctor had with his patients.” 2
But Ewing also recognized that the constituent parts of the FSA made advocating the position no easier. The FSA was not an organic whole, as All of the various bureaus of the new agency had come from other departments of the Government, and the heads of those bureaus really didn’t like the idea of being under anybody’s supervision and direction and they more or less resented it.
This made the problem of health insurance particularly difficult, especially given the prominent role of Wilbur J. Cohen and Arthur J. Altmeyer from the Social Security Administration. In opposition, “the Public Health Service personnel were largely medical men, and they were a little reluctant to oppose their professional fellows and were on the whole neutral. There were a lot of them, though, that were enthusiastic for the program.”
Opposition to Reorganization Plan No. 1 was heated even in this Administration. Letters, phone calls, and telegrams flooded the White House; active grassroots campaigns helped support this counter-mobilization. 3 One widely disseminated editorial from Marjorie Shearon (titled the “Challenge to Socialism”) expressed specific concern about the SSB’s domination of FSA (and the PHS) and the ideological positions of lower ranking civil service officials there (including their loyalty) (March 8, 1953, Dwight D. Eisenhower Presidential Library [DDEL], White House Central Files [WHCF], General Files, Box 1286; generally, see Derickson, 1997). This opposition occurred even though Eisenhower had borrowed the AMA’s characterization of “socialized medicine” for his campaign (Sundquist, 1968, p. 290).
Debates About Managerial Control
Departmental status would give HEW’s central leadership the power to exercise managerial control over FSA’s constituent parts. On one hand, conservatives feared Ewing at the helm. On the other hand, a strong and trusted Secretary might quiet voices in the agency—predominantly residing in SSA—for expanded health insurance. This tension was illuminated in the main venue for debating HEW’s creation: the Joint Hearing before the Committees on Government Operations of the House and Senate on March 16, 1953. 4 Witnesses from the AMA and the American Pharmaceutical Association spoke, but FSA Administrator Oveta Culp Hobby was the main witness. 5 Director of the Bureau of the Budget Joseph M. Dodge was lead advocate. Yet, the real debates were about the prospects for two types of managerial control.
The first debate was about controlling the Secretary of HEW. Hobby was first commanding officer of the Women’s Army Corps (WACs), the Houston Post’s editor and publisher, and parliamentarian of the Texas House of Representatives (Treadwell & Morden, 1954). She worked for the first Hoover Commission and the Hoover citizens committee (Joint Hearing, March 16, 1953, p. 73). She was in the “Democrats for Eisenhower” movement (Brownell, 1993, p. 112).
Dodge’s testimony showed that Eisenhower’s signals to Congress and the AMA about HEW depended on his choice for Secretary. Hobby’s testimony was to assuage concerns in Congress of both historic supporters and recent FSA critics. This is important because with Hobby’s ascent to the FSA, the division between political appointees and civil service was stark. Some policy formulators in the civil service recognized this divide and chose to leave the FSA. Ewing later said Hobby declined his offer to help the transition. 6 Because the Reorganization Plan made the Commissioner of Social Security an appointee, Arthur Altmeyer (a primary designer of the U.S. system) eventually left government (Berkowitz, 1995, p. 81). As FSA Administrator, Hobby’s “Hobby lobby,” a U.S. Chamber of Commerce group advising a plan for social security, caused great concern among the FSA’s policy echelon and isolated Hobby (Berkowitz, 1995, p. 81; Derthick, 1979, p. 148).
Much effort was spent by both sides of the debate to assess Hobby’s views on HEW’s future policy direction. For instance, after Hobby noted that she had long supported elevation of the FSA to Cabinet status, Representative Jack B. Brooks asked, Do you still sincerely feel that this agency which is dealing particularly with human beings, that is, the aged and the needy, and with the education of our people, do you still feel that this plan will promote efficiency and economy in the operation of the Federal Security Agency? (p. 73)
Hobby responded that she believed so but she did not elaborate. Others tried to define whether Eisenhower could control HEW after creation. Representative Walter H. Judd argued that Cabinet status was an important check (because FSA was not in the Cabinet). Dodge agreed, saying that the Cabinet would help oversee the agency’s operations of the agency and that the Secretary would better understand the general attitudes of the members of the Cabinet on proposals (p. 52). Judd argued that cabinet status gives “more prestige and also subjects [HEW] to a little more control and influence from the whole team” (p. 54). I describe this mechanism in more detail in the next section.
The second debate was about Hobby’s capacity for controlling HEW. The central issue here was the managerial control of the Secretary and her agents over the agency. As Senator Margaret Chase Smith noted, along with a Secretary, an Under Secretary, and two Assistant Secretaries (including one for Administration), this proposal also included a Special Assistant Secretary for Health and Medical Affairs. Smith asked Hobby: We have been hearing quite a lot about the difficulty with civil service, the freezing of high policy formulators, and the resulting inability of President Eisenhower to get his team on the field. Could you tell us how long after this plan goes through that you will be able to get your team on the field?
Hobby responded, “in my business [journalism] . . . a reorganization took longer than 6 months” (p. 67).
Senator Joseph McCarthy brought the issue to a head by arguing that “Mrs. Hobby . . . does not have the power to really clear house” (p. 18) because of Civil Service protections—a view echoed by Senator Hubert Humphrey, that “the hands of the new Secretary are tied in regard to the elimination of personnel” (p. 29). When Humphrey asked whether she would have authority to change personnel, Hobby responded that she hoped to make some positions appointed (p. 70). For Humphrey, the question was really about whether she could reach down into the civil service’s lower echelon, but her response was limited to only certain upper-level positions.
Her questioners focused on whether she could control the agency. Judd asked, “Did I understand you correctly to say that of all the people in the agency or the Department there are only 5 or 6 or 7 that you would change?,” and regarding the others, “you cannot remove them at will even though they have positions for which you have total responsibility?” (p. 80). Hobby responded that she could not. Chairman Clare Hoffman followed up, asking, “Of the 37,000 employees in your Department today, under the present rules and regulations, how many have you had the privilege of selecting?” (p. 84). Hobby responded, “One.”
This shows the concerns voiced about her ability to exercise managerial control over HEW. Assurances were sought, if only because the symbolic and political importance of HEW’s creation was imminently clear. Judd made the point again when he called for Dodge to introduce legislation to enable Secretaries to remove policy formulators in the civil service, that This [reorganization] could not have been done in 1950 with the leadership the Agency had without it being understood and accepted by the country as giving the stamp of approval on the leadership of the Agency, the policies it was following, and the persons who were in charge, and therefore the fact that the words mean the same doesn’t mean that the two situations are the same. (p. 81)
A special part of this debate emerged because some representatives saw the prospect of socialized medicine: The Special Assistant Secretary was to have a medical background, which Humphrey saw as “sop in an effort to placate the bitter opposition of the American Medical Association to reorganization plans” (p. 22), although he “commend[ed] the administration for its political savvy in this instance” (p. 23). Some wanted a Special Assistant who could intervene; others wanted someone who could not. Representative Chet Holifield argued that “everything that affects the medical profession must be screened through this assistant before it reaches the Secretary” (p. 28).
But in this hearing, equal concern was voiced about whether policy formulators would have access to Hobby in the new HEW. Representative Chet Holifield pressed Hobby, asking, Has there been an agreement between any part of your administration, to your knowledge, and the American Medical Association, that this new assistant will be given the right to screen any proposal that comes before you in regard to public health? (p. 69)
Hobby’s response: “No. I know you have read the plan and the President’s message, and it means exactly what it says, a special assistant in health and medical affairs . . . He has no line authority” (p. 69).
This shows the interaction of the president’s staff, the members of Congress, and Hobby on reorganization. Eisenhower—through PACGO—offered a plan that gained AMA acceptance by including a high-level staffer for representing the interests of the medical profession. As these questions reveal, past supporters of departmental status distrusted this structural choice; it appealed to new supporters, especially those with AMA connections. Dodge and Hobby navigated a difficult path between a Special Assistant with strong and no supervisory powers. This issue was never fully determined prior to the plan becoming effective April 11, 1953. 7
Moreover, Congress questioned Hobby’s ability to direct (through threat of dismissal or coercion) lower level employees with direct policy formulation responsibilities. Past critics of reorganization feared heightening the profile of the agency’s policy initiatives. Dodge argued the fear was baseless because Hobby would be HEW Secretary, not Ewing. Critics also questioned her ability to control subordinates, partly based on fears about civil service protections. The offered solutions were the Special Assistant’s position (for greater monitoring of Hobby’s 37,000 subordinates) and altering the Social Security Commissioner’s position from the civil service. These just fed past proponents’ concerns that Hobby would engage in mass restructuring and shift the agency’s direction—just as it finally received Departmental status. Their consolation was the verbal commitment by Dodge, and to a lesser degree by Hobby, to not seek comprehensive legislation overhauling the civil service system. But, as noted above, Eisenhower had already enhanced his ability to intervene in the civil service system by making Young a part of the cabinet.
Finally, debates centered on the president’s ability to control Hobby herself. Hobby, like Eisenhower, was an unlikely Republican leader. Democrats—especially conservative ones—wanted to know whether Hobby might be co-opted by her own agency and then become a figurehead for the broad initiatives. Hobby’s own background, such as with the WACs and Texan heritage, might have limited those concerns. However, this questioning she underwent shows how politicians thought about the cabinet as forming and restricting the interests and discretion of departmental heads. Together, these debates helped define the job Hobby faced.
Hobby at HEW and in the Cabinet
Shortly after HEW’s creation, Hobby went on national television with Eisenhower to offer her vision for the agency: There are so many different activities in our department that touch people, young and old, in public health, in education, pure food and drugs, Social Security, and Children’s Bureau, and vocational rehabilitation, that it’s difficult, sometimes, to say which problems are the most urgent.
Eisenhower added, “You run the biggest insurance business and you run a medical research center, and everything between,” and “You have the department that sort of epitomizes or symbolizes the warm feeling of government for all our citizens.” 8
Her fellow nominees included HEW Under Secretary Nelson A. Rockefeller, Chairman of PACGO and Assistant Secretary Roswell B. Perkins, who became active in social security issues at HEW (Berkowitz, 1995, p. 91; Derthick, 1979, p. 146). They were joined by Assistant Secretary Russell R. Larmon and Special Assistant Secretary Dr. Chester S. Keefer, who headed military commissions on infectious diseases during World War II, managed the national penicillin stock in the 1940s (see Roberts, 1998), and later was President of the American College of Physicians.
The perception emerged that Hobby was an ineffective leader. Derthick (1979, p. 68) argues that she was not as liberal about HEW’s role as successors Marion B. Folsom (1955–1958) and Arthur S. Flemming (1958–1961). She was seen as distant and curt, perhaps unsure of herself in technical discussions (Derthick, 1979, p. 147). The “Hobby lobby” signaled a lack of interest in subordinates’ views (Berkowitz, 1995, p. 81). Yet, Hobby faced an unfavorable managerial environment. Rockefeller later noted, “There was no instrument or procedure to develop department-wide policy and coordinate administrative practices,” and “important to this relationship was the development of a means whereby the Secretary could disseminate the Administration’s policy as it was formulated by the President and the Cabinet to the constituents [HEW components].” 9
Three aspects frame her choices, their outcomes, and the effects of these choices on establishing HEW. First, Eisenhower was the first president elected to a first term following the 20th Amendment’s changes to the timetables of presidential succession, so the President only had 11 weeks for the transition (e.g., forming a budget message, economic report, and a State of the Union) and new appointees like Hobby did not have time to get to know their positions. This shortened time created pressure on Hobby to get to know her agency and manage the reorganization plan, in addition to other obligations. Moreover, Just after HEW’s creation, Congress slashed its budget requests (Hughes, 1963, p. 127); 67 appropriations bills meant contending requests for budget justifications.
Second, Hobby received little guidance. Hobby knew little about social insurance programs, as did Eisenhower (Derthick, 1979, p. 146). Eisenhower had emphasized the expansion of social programs but resisted the creation of new ones (Sundquist, 1968, p. 420). His policy goals were not concrete. Following the HEW’s creation, Eisenhower went on a national speaking tour to push for government to address the “human needs of human beings” (Eisenhower, 1963, p. 134), but he rarely remembered the agency’s name (Brendon, 1986, p. 232).
Third, Hobby found it hard to monitor and direct HEW, or intervene in policy formulation decisions made at lower levels. Berkowitz (1995) recounts Wilbur Cohen’s ability as a civil servant to pursue “his agency’s agenda rather than the president’s” in dealings with Congress (p. 83). Even when subordinates did not pursue their own goals, Hobby depended on the information they provided for her decisions. At a minimum, her concerns included both traditional differences between operating groups and novel concerns such as security and the national loyalty of her subordinates. For instance, Eisenhower required loyalty tests for HEW employees, partly because Hobby reported that over half of all security officers had a security check (Eisenhower, 1963, p. 309; see also Edsall, 1955).
In many ways, she faced several competing goals. Importantly, Eisenhower stressed decentralization to subordinates (Greenstein, 1982). In January 1953, Eisenhower said to his cabinet: “I believe in decentraliz[ation]—that’s why I took so much care in picking this gang” 10 ; in September 1953, Eisenhower sent this memorandum to agency heads: “I am sure we all understand that the marks of a good executive are courage in delegating work to subordinates, and his own skill in coordinating and directing their efforts.” 11 Because delegation was valued, Hobby formed a Departmental Council to coordinate HEW’s constituent units. 12 She pursued delegation and control simultaneously, yet some appointees were openly hostile toward HEW, such as a general counsel who voted to restrict Social Security coverage when in Congress (Somers, 1954). Hobby noted significant distress that her own immediate subordinates were under civil service (Somers, 1954, p. 141).
Yet, the compromises made in HEW bound her hands. Rufus E. Miles (1974) (Hobby’s Assistant Secretary for Administration) noted, She and Under Secretary Nelson Rockefeller looked with envy upon the staffs of the well-established departments. Unfortunately, it was part of the reorganization plan testimony that the new department would not require any substantial build-up in the Secretary’s staff. It was years before a reasonably adequate staff was authorized. (p. 28)
Commitments in the Joint Hearing helped produce HEW: Conservatives liked the economy and liberals liked the lack of sufficient executive staff. Yet, they only made her job harder.
Eisenhower quickly recognized that Hobby could not fully manage the job, naming Rockefeller as Under Secretary. This accelerated with the Eisenhower “reinsurance” initiative for reinsuring major insurance companies for losses that might come when extending medical insurance to the uninsured. This initiative represented a classic Eisenhower maneuver. 13 The AMA opposed it; Eisenhower responded that it would limit support for socialized medicine in the long run (Ambrose, 1984, p. 199). On July 13, 1954, Eisenhower responded to news that the House had defeated the reinsurance bill by declaring that he would not support for reelection any person voting against the bill. 14 For some, the bill signaled Hobby’s inability to manage Congress. 15 Yet, as Funigiello (2005) notes, “In truth, no one other than Secretary Hobby had been enthusiastic about the bill” (p. 92).
While this tested Hobby, HEW’s constituent parts meant that she had many different obligations that also tested her capacity as Secretary. For instance, in 1954, Eisenhower proposed and won the extension of the social security program to 10 million people not originally covered; Hobby called it a raid on the Trust Fund (Donovan, 1956). Later, the Department of Defense ordered the desegregation of military schools regardless of their location because Hobby, as Secretary of HEW, had argued for a “go slow” approach on desegregation—which caused more commotion in the White House than perhaps any other domestic event (Donovan, 1956, p. 156). 16 Hobby was seen as unable to function as a department-level agency head. She did not delegate (she handled HEW’s new crest and flag designs herself), which increased the number of choices with which she was actively associated. Eisenhower pushed Hobby to pace herself, 17 but Hobby resisted. 18 He even “expressed concern that she is nearing the end of her rope.” 19
Her end as HEW manager came in the form of mismanagement of a new vaccine. On April 12, 1955, Dr. Jonas Salk announced a vaccine for the prevention of infantile paralysis. On April 14, Eisenhower directed Hobby to find the best way to assure equitable distribution of the vaccine. On April 22, Hobby met with the six drug manufacturers to discuss the manufacture and distribution of the vaccine. The issues involved questions of nationalization of production, techniques for assuring the safety of enormous batches of vaccine produced in distributed facilities, perceptions of Black markets, and the speed of the HEW response. Due to potentially ineffective vaccine batches, distribution was halted on May 7 until the PHS—led by Surgeon General Leonard Scheele—could verify the quality of all batches. 20
But the damage was done. Hobby appeared before several Congressional hearings and was the subject of floor speeches, letters, and editorials. Yet, Hobby was on the ropes well before this event. The press excoriated Hobby for her alleged involvement in the military school desegregation incident in January 1955, 21 although Eisenhower backed her to stay “just as long as she possibly could” after another confrontation. 22 By June she was widely criticized in letters 23 and on the Senate floor. Eisenhower accepted Hobby’s resignation without question, 24 and while the common interpretation is that the Salk incident did her in, Eisenhower had questioned her ability in January and by February 1955, a transition was already planned.
However, the Salk incident shows how Cabinet members could be lightning rods for Eisenhower. The cabinet can act as a socialization mechanism to control the individual department heads, and Congressional attention had centered on the need to restrain the agency’s leader and how the cabinet could help. Yet, the tenure of cabinet members is short, and long service depends mostly on loyalty to the president and the administration’s success (Cohen, 1986), so secretaries are targets for blame apportionment. This is more likely for outer cabinet secretaries, and especially so for newer departments (Weisberg, 1987) if powerful constituent groups forge secretarial–presidential conflict (Cronin, 1980). Maybe the cabinet can influence the appointee, yet the cabinet has had only limited power (Warshaw, 1996). Anderson (1986) dismisses the power of cabinet members through ticket-balancing or coalition-building roles. Fenno (1959) says the cabinet is not valuable for settling interdepartmental disputes, perhaps because members seek less visible arenas.
In this era, Eisenhower’s use of his cabinet was composed of “usually group decisions, based on a vast flow of information, and synthesized by offices within the enterprise,” but it also had a political character (Chandler, 1973, p. 3). The cabinet is where leaders supported their department and position for presidential support. Hobby probably lost opposing social security expansion (and championing a plan to reduce benefits); she was blocked by people like Marion B. Folsom, Undersecretary of the Treasury and future HEW Secretary (Jacoby, 1993).
In Hobby, Eisenhower selected both an HEW Secretary and a cabinet member. Hobby fit categories of value to Eisenhower as a woman, a Democrat, a Texan, a journalist, and a former military commander. As Miles (1974) notes, People who had never paid any attention to the Federal Security Agency thought that this new Department had sprung from almost nothing and was accomplishing great things in a short time. Although no new powers had been added when HEW was created, the press, in both its news columns and its social columns, suddenly started to give much attention to the comings and goings of the new Secretary. The fact that Mrs. Hobby was the lone woman Cabinet member provided a glamour not shared by the other departments and undoubtedly contributed to the increased press coverage, but the fact provides only a partial explanation of the rising interest in the Department. Cabinet status is a matter of high importance to the American public, and persons who occupy positions involving vastly greater responsibility but lacking appointment as a Cabinet member are downgraded by the news media. (p. 29)
Yet, press coverage meant increased exposure for Hobby to opposition or disappointment from constituent groups. Hobby was regularly referred to as the “Secretary of Not-Too-Much Health, Education, and Welfare.” Miles notes, Cabinet officers must expect to take criticism for policies set by the President, but few in recent decades have had to bear as much heat as Mrs. Hobby. The popularity of President Eisenhower rendered him particularly immune to direct criticism, and the brunt fell on her. (p. 32)
25
Her position as a member of the outer circle and the head of the newest department placed her at a particular disadvantage. Eisenhower’s insistence of making HEW the first reorganization proposal only emphasized the commonly understood problems of delegation and control in his administration.
Discussion
Reorganizing national bureaucracies is a consequence of both administrative and political motivations, and has substantial political consequences. Reorganization is one way to change national bureaucracies. However, reorganization of bureaus is fundamentally a political exercise.
As such, reorganization offers presidents opportunities to make statements. While big reorganizations usually require Congressional approval, the president is widely seen as the primary “manager” of the large and complex bureaus that have evolved over the last hundred years. One ways presidents can exercise this power is in the service of reshaping views of the party they head.
Eisenhower’s Presidency led to the HEW’s creation as a cabinet-level agency devoted to the “human side” of government. Consider the coincidence of events that allowed this: the first Republican administration in over 20 years, Republican control of both chambers of Congress, and a president lacking established policy positions on public welfare. The bitter public debates during the Truman years over health insurance and the specter of socialized medicine only made it harder for some Republicans and Southern Democrats to watch this happen.
Two early choices by Eisenhower provided the foundation. First, Rockefeller’s service as head of PACGO and then Under Secretary allowed Eisenhower to claim economy and savings in reorganization—and allowed Rockefeller to see his own reorganization plan through. Second, Hobby’s selection as FSA Administrator, and her inclusion in the cabinet from January 1953 onward, established both her role as a member of team Eisenhower and Eisenhower’s vision of a health and public welfare department.
For the Eisenhower Administration, reorganization provided a basis—measured both in terms of managerial control and political prospects—for moving beyond the debilitating debates of the Truman years. Within the first 2 years, social security had been expanded, Hill-Burton revised, and new vocational rehabilitation programs instituted. Yet, Hobby lost over reinsurance. These gains occurred while Hobby attempted to manage a large, diverse bureaucracy with few formal tools for gaining control. The organizational commitments Eisenhower made to get Congress to approve the plan also bound Hobby’s hands in actual management. Those commitments also produced an agency with an incredibly broad portfolio of topics, expertise, obligations, and expectations—a point often missed when focusing narrowly on the H in HEW.
This article focuses on Hobby as the fulcrum in Eisenhower’s strategy because she served as a primary mechanism for Eisenhower to attain the managerial and political goals of this reorganization. In the end, her relative position in the cabinet also exposed her to greater levels of control and criticism but provided no help with her managerial problems. Cabinet inclusion may have hastened her departure from HEW and reduced her effectiveness. Yet, cabinet status probably elevated health and public welfare policy in the long run (Miles, 1974).
Eisenhower’s reorganization may have set the stage for future expansion of the state, but his main goal was to establish credentials on the “human side” of policy. Hobby helped established these credentials by navigating Congress and running HEW. Creating HEW as a department-level holding company, given the nature of its portfolio and unwieldy construction, served as a credible commitment in the policy flanking game.
While my overall focus here is on demonstrating the viability of reorganization for a way of reshaping views of presidential partisan affiliation, several points about this specific case warrant emphasis. First, Eisenhower’s symbolic need regarding policy bona fides drove HEW’s creation; yet, once formed, HEW took on a life of its own—perhaps in the same ways as the more recent creation of DHS. This illustrates the political nature of presidential management by reorganization: increased momentum for policy reforms—including in the area of health—as a result of shaping a party’s policy location. Eisenhower navigated a world inherited from Truman but bound by the constraints of “New Republicanism” (Skowronek, 1993).
Second, this mismatch was enhanced by Hobby’s unique role in HEW and the president’s cabinet. She lacked the support of her own Democratic base, of liberal Republicans in Congress, and within the cabinet. Her experiences in Texas politics and role in Eisenhower’s campaign failed her in Washington; in contrast, that worked wonderfully for Lyndon Johnson.
Third, Eisenhower positioned himself as a potential successor to the New Deal/Fair Deal legacy with HEW’s creation. Rather than holding clear and consistent preferences about the role of government—and its preferred shape—in health, welfare, and education, Eisenhower came to the presidency as a Republican having spent most of his adult life receiving government services for health, education, and his own and his family’s welfare. These experiences, coupled with his role as a master bureaucrat, helped make Eisenhower a constructor of the modern welfare state.
More broadly, this reorganization illuminates the value of a micro-approach to the study of reorganization. The mechanics of agency construction in “political time” reveal reorganization as a unique opportunity for presidents to set the terms of political trade. They do so with caution, for their choices set the stage for those who follow to expand or contract their advances.
This is particularly important for a theory of reorganization as a way to change the meaning of partisan labels, of partisan affiliations. Shaping public perceptions of the party itself reflect motives rooted in the manipulation of policy locations by partisan leaders, practical heresthetics, and strategic opportunities. Reorganization is a useful tool in this game because it represents a credible commitment—once created, it is hard to unwind an agency. This focus, though, illuminates the tension between short-run motives and the long-run evolution of agencies. In “political time,” short-run motives often lead to unexpected outcomes that perhaps are intended by none of the involved actors, although those early decisions also create opportunities for succeeding administrations.
Footnotes
Acknowledgements
I thank Dan Carpenter, Daniel Fox, Jim Morone, and Paul Quirk for insightful comments. I thank David Haight, Archivist at the Dwight D. Eisenhower Presidential Library, for his help in assembling the primary source material on which this article is based. I also thank other archivists and researchers there for their comments on this project.
Author’s Note
All remaining errors are the sole responsibility of the author.
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.
