economic resources in the national interest should an emergency arise. Thes funds will assist approximately one-half the States and a like amount requeste in fiscal year 1965 will assist the remaining States.

Telecommunications. In addition to emergency functions, OEP has been a signed peacetime functions in telecommunications. The authority to assign radi frequencies to Federal Government users has been delegated to OEP. The D rector of Telecommunications Management, an Assistant Director of OEP, also the principal adviser to the President on developing a National Communica tion System which integrates the various Federal systems into a unified syste meeting the requirements of command and control in peace or war.

Relation of fiscal year 1964 program to fiscal year 1965 program

$25,000,00

17,112.00

7,888,00

Mr. MCDERMOTT. That's right-pursuant to the instructions specifically of the House committee, and then, of course, funds were granted that permitted

Senator ALLOTT. The 300 is the result of congressional action.

Mr. MCDERMOTT. Yes, sir, and the maintenance of that substantially reduced ceiling for fiscal year 1965 is in accordance with President Johnson's instructions for this fiscal year.

Senator MAGNUSON. The President reaffirmed what we did in the two committees.

Mr. MCDERMOTT. Yes.

Senator MAGNUSON. All right, continue.

SALARIES AND EXPENSES

Mr. MCDERMOTT. The fiscal year 1965 budget request for salaries and expenses is $5,700,000. This amount includes $1,300,000 to resume our research program, most of which had been postponed to alleviate the severity of the recent reduction in force. This has been accomplished and we now propose to resume our contract research and development program in order to advance our knowledge, increase our efficiency and improve our preparedness.

The balance of $4,400,000 covering salaries and associated expenses for 300 personnel, is $185,000 below the amount programed in fiscal year 1964.

Senator MAGNUSON. Now, right there, for the record, in "Salaries and expenses" you have a plus $1,055,000.

Mr. MCDERMOTT. Yes.

Senator MAGNUSON. And you say you are keeping the same level of employment, namely, 300. So you might here explain what this $1,005,000 is.

Mr. MCDERMOTT. That is

Senator MAGNUSON. Or do you do that later on?

Mr. MCDERMOTT. I do that later on.

Senator MAGNUSON. All right, go ahead.

AMOUNT FOR STATE AND LOCAL PREPAREDNESS】

Mr. MCDERMOTT. We are requesting $1,500,000 for State and local preparedness to complete the program designed to prepare State governments to manage critical resources such as petroleum, food, transportation, and electric power following the nuclear emergency. As you know, Congress approved $1.5 million for this program in fiscal year 1964. We expect to finance approximately one-half the States from the fiscal year 1964 appropriation and to finish the job in the remaining States with the funds requested in fiscal year 1965.

EMERGENCY PREPAREDNESS FUNCTIONS, FEDERAL AGENCIES

We are also requesting $6,500,000 for emergency preparedness functions of Federal agencies. These funds are transferred to other agencies to perform preparedness functions assigned by the President which are substantially different from their statutory functions and which cannot be readily absorbed within available funds.

A major across-the-board effort will be made in most agencies to extend their preparedness program to the field where the most serious gap in our nonmilitary readiness exists.

DISASTER RELIEF FUNDS TO STATES

Finally, we are requesting $20 million in the President's disaster relief fund for assistance to the States in the alleviation of hardship and damage resulting from major disasters. These funds would be used primarily to meet disasters declared in fiscal year 1965, while the recently approved supplemental appropriation of $50 million would aid States declared as disaster areas in fiscal year 1964, including Alaska, California, and the Ohio Valley.

OEP ROLE IN DEFENSE AGAINST NUCLEAR ATTACK

Much of our nonmilitary defense program can be considered as insurance against the possibility of nuclear or conventional war. Like fire insurance on one's home, we trust that it will never be needed; however, our Nation has taken these hazards quite seriously as is demonstrated by the substantial premiums we are paying.

For example, last year the Department of Defense spent roughly $2 billion on continental air defense directed solely to defense against a nuclear attack.

By any measure, air and missile defense are important elements in our overall defense against nucealr attack. But, if an attack should come, active defense would not be enough. Even the best defense could not prevent widespread disruption of our highly complex economic and governmental system. Lives saved by other defense programs could later perish if we did not have the capacity to mobilize surviving resources to meet essential needs. Indeed, the question that we have all heard so often, "What will people do when they come out of their shelters?" is an extremely important one. This is the question for which adequate answers must be found. In short, unless we make adequate preparations to recover from a nuclear attack or to respond to lesser conflicts, the effectiveness of costly military systems will be diminished. An emergency preparedness capability built into our Government and economy is an indispensable element of our overall national defense program.

POSTATTACK RECOVERY CAPABILITY

The Office of Emergency Planning carries a heavy responsibility to develop a postattack recovery capability in this Nation. Let me admit at the outset that we do not have any master blueprint for recovery and I doubt we could ever produce a completely reliable one in advance of an attack.

We can, however, identify the likely problems and their probable dimensions and take certain practical steps to increase our ability to cope with a nuclear emergency or other emergencies short of nuclear war. I would like to summarize some of these major activities and indicate where we stand and what we propose to do in the coming fiscal year.

GOVERNMENT STOCKPILING Program

The Office of Emergency Planning develops the basic policies for the Government's stockpiling program as well as for those other programs designed to achieve and maintain a mobilization base responsive to the requirements of cold war and the threat of limited or

nuclear war. We are engaged in several major tasks in the stockpile

program:

STOCKPILING DISPOSALS

The development of a long-range program for the orderly disposal of excess stockpile materials within the framework of the recommendations of the Executive Stockpile Committee as approved by the President is now underway.

I have established an Interdepartmental Disposal Committee, chaired by the Office of Emergency Planning, to make preliminary investigations of all aspects of the proposed disposal of each of the more than 70 stockpile materials on a commodity-by-commodity basis and to recommend factors and criteria for the disposal of surplus materials, including consultation with the affected industries and foreign governments.

These disposals in the next decade are expected to increase the revenues of the Treasury Department by many millions of dollars. In addition, a yearly saving will be made in the costs of storing stockpiled materials.

The Disposal Committee, through a number of working groups, must resolve the many issues to be considered without undue effects upon various segments of the domestic economy and our international relations.

Obviously, a sudden release of substantial quantities of excess materials could damage our productive capacity and would be clearly self-defeating. Careful analyses of the potential impact of each disposal program is essential. Interested Federal agencies have cooperated fully in providing qualified individuals to participate in the studies undertaken by the working groups.

AMOUNT FROM SALES OF SURPLUS MATERIALS

As evidence of measurable progress in this area of our responsibility, during the 3-year period from January 1, 1961, through December 31, 1963, sales contracts of surplus materials from all Government inventories have amounted to $292 million in cash at sales value.

In addition, $128 million of surplus cotton was transferred to the Department of Agriculture. In some instances, deliveries of these materials to successful bidders will be made over a period of time to avoid market disruption.

Of the total sales, approximately $194 million was from the national stockpile, $87 million from the Defense Production Act inventory, and $10.6 million (tin) from the Federal Facilities Corporation inventory which is now closed out.

During fiscal year 1963, we authorized 18 disposal sales involving 12 materials of which 4 were national stockpile items and 8 were Defense Production Act inventory materials. So far, during fiscal year 1964, OEP has authorized 27 disposal sales involving 24 materials. We expect that the rate of disposal will increase substantially over the next few years.

As the economy responds to the tax cut and currently underutilized capacity is put to work, a greater demand will develop for most of the materials currently stockpiled. This might provide a more favor able climate for disposal of some of our surpluses.