SEWER AND WATER FACILITIES

Mr. CEDERBERG. On sewer and water facilities in your program under EDA these projects will be used for long-term growth?

Mr. FOLEY. Yes.

Mr. CEDERBERG. And you are estimating how much of a backlog? Mr. FOLEY. It was estimated when the bill was going through Congress there is an $800 million backlog.

Mr. CEDERBERG. We have other agencies that finance sewer and water facilities. You will not be the only agency that finances sewer and water facilities?

Mr. FOLEY. That is correct. HEW finances sewer and water facilities and so does HHFA in a different type of program. Our program is designed for specific areas that need such a project for economic development and water and sewer projects are not the only projects.

Mr. CEDERBERG. I realize that but I am just picking out water and sewers. What would prevent a community from putting in an application with you, one with Health, Education, and Welfare, and one with HHFA, and if I understand this correctly, this may be done. In other words, you will have a Cabinet Officer for Urban Affairs. He will have jurisidiction over some of the projects you will have. It will involve coordination with the Secretary of Commerce, the Secretary of Health, Education, and Welfare, and the Secretary of Urban Affairs. They will all be involved.

Mr. FOLEY. This matter is already under consideration. If we did not recognize the problem you could have people taking advantage of the Federal Government. But we have a different focus. Take the Bureau of Public Roads. They are building roads in terms of the number of passenger miles. There are not many passenger miles over the hills of West Virginia or in Appalachia, so the Bureau of Public Roads does not build them. So we have a different focus than the Bureau of Public Roads and the same is true of Health, Education, and Welfare. Ours is purely economic development and we try to fill in the gaps. We feel through the public works program we have to provide these types of public facilities that are not available in order to make these areas economically viable.

Mr. CEDERBERG. The Bureau of Public Roads is involved in Appalachia?

Mr. FOLEY. Yes.

Mr. CEDERBERG. And you will be involved there too?

Mr. FOLEY. That is correct.

Mr. CEDERBERG. The Hill-Burton Act will be involved with hospitals in Appalachia and you will be involved with hospitals in Appalachia. I see a duplicative monstrosity building up here. Mr. FOLEY. I think we can handle this.

Mr. BALDWIN. Mr. Chairman, if I may, I think I can throw some light on this. Everything Mr. Foley has said is correct. However, before he arrived on the scene the Bureau of the Budget saw this problem and called a meeting of the agencies that were involved and I happened to attend for the Department of Commerce at that time. This problem was laid on the table and a task force was set up between Health, Education, and Welfare, and HHFA-now the Depart

ment of Urban Affairs-and the Department of Commerce to work up the guidelines.

Mr. CEDERBERG. Say that again? You say the Department of Urban Affairs?

Mr. BALDWIN. At that time it was HHFA. That was at the meeting. Probably this will flow into the Department of Urban Affairs. Mr. CEDERBERG. Did anyone think it would be better to put the whole thing under one secretary?

Mr. BALDWIN. If they did, it did not appear at that meeting.

Mr. FOLEY. I do not think you could, because they are different programs with different purposes.

Mr. WILLIAMS. If I may add, this was one of the alternatives given by the task force, a single agency. The task force has not made its report yet.

Mr. CEDERBERG. I will not prolong this discussion further but I can see difficulties.

Mr. ROONEY. You are making a good point, Mr. Cederberg.

In that connection, I would like to inquire whether these activities, take for instance the sewer business, whether the activities of the other agencies were taken into consideration in setting up this budget? Mr. WILLIAMS. Yes, sir; they were.

Mr. ROONEY. How many agencies are presently engaged in the activity of assistance for sewer construction? Are there any beyond the Housing and Home Finance Agency and HEW?

Mr. FOLEY. Yes, Agriculture.

Mr. ROONEY. Any others?

Mr. WILLIAMS. No, sir; and HEW only handles waste treatment.

Mr. ROONEY. I am interested in how many are in the business of aid for sewer construction. How many agencies of Government are engaged in that activity? I have three. Are there any more? Mr. FOLEY. No.

Mr. ROONEY. How much does the Housing and Home Finance Agency have in their budget for such purpose?

Mr. WILLIAMS. I do not know, sir.

Mr. ROONEY. How could you have taken this into consideration in setting up this budget, then?

Mr. FOLEY. Mr. Williams can answer because he worked on the budget, but I think it was done in terms of the volume of applications during the accelerated public works program and the volume we have

now.

Mr. ROONEY. How much does HEW have in their budget for the purpose of assistance in sewer construction?

Mr. WILLIAMS. Sir, HEW does not assist in sewer construction. The three agencies involved would be the Housing and Home Finance Agency, the Department of Commerce, and if the new bill is passed, the Department of Agriculture. HEW would handle only waste treatment systems.

Mr. ROONEY. Have you any idea how much is in the budget of any of these other agencies for the purpose of assistance in sewer construction?

Mr. LEWIS. HEW, in their 1966 budget request, had a request in for $100 million for waste treatment.

Mr. ROONEY. How much is in this budget for assistance in sewer construction?

Mr. WILLIAMS. Sir, we did not work this budget on the basis of a specific amount for particular types of projects such as sewer construction, hospitals, and so on.

Mr. ROONEY. Why not, particularly since these other agencies of Government are engaged in a similar activity?

Mr. WILLIAMS. Because the Congress authorized $500 million for grants. We looked at the backlog in HEW and we looked at what we knew the communities were talking about needing, and we estimated what would be available from other sources.

Mr. ROONEY. This would be in effect the gravy train approach rather than one with the taxpayer's interest in mind. Is that a fair statement?

Mr. WILLIAMS. Sir, I would hesitate to characterize anything you said as unfair, but I would like to point out each of these projects would be examined from a very close economic growth standpoint.

Mr. ROONEY. But would it not be better if you examined these before you recommended the appropriation of any of the taxpayer's money? That must be a fair statement, too, in view of what you previously said. Mr. WILLIAMS. Past programs of this type have always submitted their budget without providing individual projects in justification. Mr. ROONEY. To sum this up and get to another subject, you have in this item of "Development facilities grants" an amount of $254,500,000. You cannot tell us how much of that $254,500,000 is for assistance in sewer construction?

Mr. WILLIAMS. That is correct, sir.

PUBLIC AFFAIRS ADVISER

Mr. ROONEY. On this organizational chart which we find here, we find a setup for a Public Affairs Adviser. How many people are there in this area and at what cost?

Mr. FOLEY. There will be 11. The cost is $118,000 including "Other objects."

CONGRESSIONAL AFFAIRS ADVISER

Mr. ROONEY. Then we find a Congressional Affairs Adviser. How many people will be in that area and at what cost?

Mr. FOLEY. Four positions and the total cost would be $55,000. Mr. ROONEY. Including "Other objects"?

Mr. FOLEY. That is correct.

PERIOD COVERED BY BUDGET

Mr. ROONEY. On this overall budget how many months is it supposed to cover in fiscal year 1966 ?

Mr. FOLEY. It would cover the time from the passage of the budget and its enactment into law to the end of the fiscal year. In addition, it would cover applications pending for loans that were on file prior to the end of the fiscal year but which have not been financed prior to the end of the fiscal year.

Mr. ROONEY. When this budget was set up, which includes a request for these people and an administrative cost of $17,030,000, one would assume there must have been a period of time to be covered contemplated at the time of the setting up of the budget. Can you tell us that period of time?

Mr. FOLEY. Well, it is contemplated, Mr. Chairman, that this will be a continuing program and that the number of people you will need are in terms of 12-month cycle.

Mr. ROONEY. Well, if it is a continuing program I would expect it would be on the basis of annual appropriation and that these magic words "to remain available until expended" will not be needed. I am trying to find out the period for which this budget was set up in 1966.

Mr. WILLIAMS. The budget itself is set up to cover the period July 1, 1965, to June 30, 1966.

Mr. ROONEY. When was the budget set up?

Mr. WILLIAMS. Within the past month.
Mr. ROONEY. In what month, August?

Mr. WILLIAMS. Yes, sir.

Mr. ROONEY. And in August the budget was set up to cover from a month before that, to wit, July 1, was it?

Mr. WILLIAMS. Yes, sir."

Mr. ROONEY. This is something new in government too, is it not?

Mr. WILLIAMS. The Appropriations Committee, under a continuing resolution, provided for the continuation of activities in the Department of Commerce pending the new appropriation, so the new appropriation would have to take care of the activities which were continued under the continuing resolution. That is my understanding. Mr. ROONEY. What did that amount to as compared with this $393 million request?

Mr. LEWIS. Under the continuing resolution the operating costs obligated in July and August were approximately $2 million.

Mr. ROONEY. And now you are superimposing a $393 million budget in the month of August to cover beginning back on July 1? Do I understand this correctly?

Mr. LEWIS. The $393 million, of course, sir, is very heavily in the area of loans and grants for which there will be the staffing of an organization and the processing work for those programs. The area redevelopment activities were conducted in July and August until the new organization was established in September.

Mr. ROONEY. I take it you are not going in the business of making nunc pro tunc loans. Again I am asking, how many months of fiscal 1966 was this budget set up for? Was not some mention of this made yesterday in Mr. Foley's statement?

Mr. WILLIAMS. Yes, sir.

Mr. ROONEY. What was said?

Mr. WILLIAMS. I am unable to find anything in the statement, sir.

Mr. ROONEY. Well, perhaps it was off the record but I think mention was made here yesterday by somebody as to the number of months the budget was to cover.

Mr. WILLIAMS. Mr. Foley said in his prepared statement that the "amounts of funds requested have been determined after taking into

account the needs of the areas for assistance and the fact that the program will be in operation for less than a full year in this first fiscal year."

What I am sure we all intend to mean by that is the fact that the major portion of the program will be in operation less than a full year, but the budget does technically cover the full fiscal year. But the actual recruitment of new personnel

Mr. ROONEY. Leave out the word "technically" and tell us, when this budget was set up, what period it was to cover. You did not set up the budget until August and the new fiscal year had already proceeded a month or a month and a half.

Mr. LEWIS. There were 372 people on the rolls at the end of June. This budget assumes that these people will be carried forward in similar duties under the EDA appropriation. It also assumes that recruitment up to the full complement would begin around October 1 and it would peak up by about March 1.

Mr. ROONEY. Would it be fair to put it this way? You would be projecting at the rate of $1 million a month with the 300-plus people and then expand to the greater number of employees about October 1. Is that correct?

Mr. LEWIS. Yes.

Mr. ROONEY. What does this mean moneywise?

Mr. LEWIS. Moneywise it means the money included for salaries is lapsed somewhere around 40 percent from the annual salary rate that would have been in effect for the full year.

Mr. ROONEY. Give us that lapse in terms of dates.

Mr. LEWIS. The lapse in terms of dates assumes a continuation of the staff on board under the old ARA and that the recruiting for new positions would begin October 1 and complete itself by March 1 and that the new positions would be lapsed roughly 50 percent. I think the overall lapse in all appropriations is close to 40 percent.

Mr. ROONEY. What is today's date?
Mr. LEWIS. September 17.

Mr. ROONEY. What would be the figure as you not going to get into any figures for me? evaded that up to now, perhaps successfully. the figuring?

of November 1, or are You have successfully You will make us do

If you will not answer it, let us go back and ask what you base this figure of $1 million a month on for 2 months under ARA?

Mr. LEWIS. This is the cost of carrying on the continuation of the area redevelopment activities as provided in the continuing resolution. Mr. ROONEY. What are the exact figures and what are they for?

Mr. LEWIS. I will have to provide the exact figures. They include an amount of $725,000 for technical assistance and $1,253,000 under a previous activity "Operations." In addition, there are obligations under the previous area redevelopment fund-I am sorry, sir, I cannot find that figure at the moment. There is in total, including loans, total obligations for July and August of somewhere around $9 million in the area redevelopment fund.

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