Secretary FINCH. At this point it would be premature for me to say. I do not see any immediate windfall in any area that would help us to try to solve this problem posed by these Court decisions. I think we are going to have to.

Mr. PEPPER. Some consideration has been given?

Secretary FINCH. Yes, sir. I think that is outside the limits of the President's budget.

Mr. MATSUNAGA. Mr. Chairman, may I ask a question?
The CHAIRMAN. Mr. Matsunaga.

Mr. MATSUNAGA. The Appropriations Committee has, as you know, come before the Rules Committee to have a waiver of points of order on two provisions of the bill, points of order which could be raised on the floor without a rule from this committee. One is with reference to the change in impact funds under title I. The other is section 411, the socalled Michel amendment.

You have stated here that section 411 as written in the bill is critical, substantively.

Secretary FINCH. Yes.

Mr. MATSUNAGA. What about the change of the impact funds? Do you consider that to be critical also?

Secretary FINCH. I do, and I would like Mr. Kelly to speak to that, if he would.

Mr. KELLY. Without the language, if only the $440 million were appropriated, it would have to be allocated among all of the school districts on a pro rata basis without regard to the urgency of their needs. With the language, you can better distribute the funds, recognizing a higher degree of urgency for those districts that depend on them; that is, for those cases where the parents both work and live on Federal property and lesser priority where the children live in the communities. It also provides an opportunity to take care of the most disadvantaged communities, those that use the most money as the result of not appropriating full entitlement. So that the $440 million, in the judgment of the administration, would not be nearly as well spent in the education of the Federal impact children without the language as with it.

Mr. MATSUNAGA. As I understand it, the authorizing measure which is to be talked about now before the Senate has no request for a similar change in category. I cannot seem to understand the inconsistency.

Mr. KELLY. We were awaiting the completion of the Batelle study, and the President, in his 1971 budget, indicated he would submit a new legislative proposal with respect to Federal impact areas. He requested no funds to carry out the present authorizing legislation for Federal impact, but he is requesting that the program be reconsidered by the Congress in the light of the study which is now being made.

Mr. MATSUNAGA. So there will be a request made based upon the study?

Mr. KELLY. That is correct.

Secretary FINCH. Yes, sir.

Mr. MATSUNAGA. As to section 411, the so-called Michel amendment. the Secretary stated it is substantively critical. Now, I assume that funds have been allocated in accordance with existing law. What I fail to understand is why it would make such a difference, there being only just one-third of the fiscal year left now, assuming that the ad

ministration has been properly allocating funds according to law, why it should be so critical that the President have this authority now in order to allocate funds as he seeks it.

Secretary FINCH. I will again let Mr. Kelly speak, because he has had to live with it so many years. But a big part of this goes to the nature in which these funds are dispersed. As long as we can obligate them, then they go out to the school districts. The school districts are usually about a year ahead, and they get the dollars and bank them, and they draw down on them, and that presents a different picture than we do in almost any other program.

You can add to that.

Mr. KELLY. Under the continuing resolution which authorizes us to spend funds in anticipation of the appropriation, we were originally authorized to spend at either the level that we spent last year or the level which the President recommended this year, whichever was the lower. Subsequently, that was modified to say that we could spend at the amount of the congressionally enacted bill. But because of the controversy surrounding this bill, the instructions that we have given to the operating agencies are to spend at the President's budget or the congressionally enacted bill, whichever is the lower. So that on those items that are the so-called nondiscretionary formulas, the formula grants, we are using the formula that would apply to the President's budget recommendation, pending a resolution of what final funds will be appropriated.

Mr. MATSUNAGA. Now, what is the amount? We tried to get a figure out this morning from the committee, but they were not able to provide it. What is the amount involved here?

Mr. KELLY. Well, the 1970 conference action, the vetoed bill, included $4.687 billion for formula grants. The administration's alternative, that is, the President's letter of February the 2d, contains a figure of $3.860 billion. The bill that is before you now has a figure in it of $4.282 billion. So that roughly speaking, the difference between the President's recommendations and the bill that is now before you on formula grants is $420 million.

Mr. MATSUNAGA. So that we are speaking only of $420 million here as to discretionary authority which the President is asking for here, is that it?

Secretary FINCH. That is substantially correct.

Mr. MATSUNAGA. No further questions.

Mr. SISK. Would the gentleman yield?

Mr. MATSUNAGA. Yes.

Mr. SISK. I got a little bit lost from the standpoint of your legal authority to spend. Now, in the continuing resolution-I am referring to the resolution which we passed as of November 1 in which we incorporated the so-called Joelson amendment in this King resolution. You are saying that that was not a directive to spend in accordance with that. It was my understanding that was Congress' intent. So I am questioning your legal position as to the intent of Congress as against that of the President in this case.

Mr. KELLY. I think that it is pretty clear that it was the intent of Congress that we use the funds. I think it is pretty clear that we have laid before the Congress the legal opinions to the effect that it's not discretionary with respect to these funds, that we have to allocate them.

So we were not trying to adopt a discretion which the law didn't give us, but rather to delay the date on which we exercise the mandatory nature of this until the controversy could be cleared up. It would be quite difficult to say that the veto of the bill which you sent to the President would be meaningless, because the administrative people, in carrying out the continuing resolution, had gone ahead and spent that money, anyhow.

So it was our view that all we were doing was delaying until this controversy could be resolved, and I think that was a sensible solution. Mr. SISK. Sometimes we get a little sensitive, and I can see what you executives have to do, say what the directives of Congress are vis-a-vis the Administrator is confronted with. That is the legal situation as to what his position is. There is some concern there, I know, about actually what the impact of the main resolution as revised by the Joelson amendment meant from the standpoint of the making of funds available.

Mr. ANDERSON of Tennessee. Mr. Chairman.

The CHAIRMAN. Mr. Anderson.

Mr. ANDERSON. I do want to thank the Secretary for a straightforward statement. I have no questions.

The CHAIRMAN. Mr. Secretary, the Chair would like to also thank you for appearing here this afternoon.

I have one more question and that is will busing a white child to a formerly all-black school help to improve the quality of the white child's education?

Secretary FINCH. You would have to have a lot more factors built into that. In many cases, as you know, Mr. Chairman, the black school in a formerly dual system was probably a newer school, it might even be a better facility. I can't give you a categorical answer. Hopefully, the board would make a decision and tell us what they wanted to do, and we would try to help them as best we could.

The CHAIRMAN. Thank you, Mr. Secretary, for your appearance. Mr. O'NEILL. I would like to ask one question.

The CHAIRMAN. Mr. O'Neill.

Mr. O'NEILL. In my area they have a NASA installation which they have just closed and in which the Government spent $67,000, and just as the building was completed they transferred NASA out of the Cambridge area, which was the electronics center. I have heard a lot of rumors in the last couple of days, and I have been trying to track them down, that Health, Education, and Welfare, Interior, Transportation, and other related departments, with regard to environmental studies are going to use the $13 million electronics laboratory, which is brand new. Is there anything that you can tell me as to whether Health, Education, and Welfare has any plans with regard to this?

Secretary FINCH. No, there isn't anything I can tell you, except that given the usual course of how surplus property is handled. It is something probably we would look into. But it hasn't reached my desk yet as a specific proposal. I have heard comments about it. Maybe Mr. Kelly has some additional information.

Mr. KELLY. (Shaking head negatively.)

The CHAIRMAN. Thank you again, Mr. Secretary.

Mr. PEPPER. Thank you. We have enjoyed having you. Come again. Mr. YOUNG. Thank you, Mr. Secretary.

The CHAIRMAN. Mr. Bow, the committee will be glad to hear from you.

STATEMENT OF HON. FRANK T. BOW, REPRESENTATIVE FROM THE 16TH DISTRICT, STATE OF OHIO

Mr. Bow. Thank you, Mr. Chairman. It is a little difficult to come into the act at this late hour and after you have had the main performer before the committee. But I think I can say something, Mr. Chairman, that I do not believe has been said here yet, and that is the kind of rule that we should have for this bill.

The Appropriations Committee yesterday, by resolution, directed that the chairman and ranking minority member seek an appropriate rule. Designating an appropriate rule is the question.

I will say, Mr. Chairman, that I believe we should have a rule waiving points of order on the provisions dealing with impacted aid and also on the discretionary language. I know and respect the chairman's views and the views of many of the other members on a so-called lineitem veto. I agree with these views and I am opposed to an item veto. But for a long time our committee and the Congress have been criticizing the agencies of our Government for waiting until the latter part of the fiscal year to spend their money. We have tried to stop this.

Now we find that Congress has placed the executive branch in the identical position we have been opposed to; that is, having to spend a lot of money with only about 4 months to go in the fiscal year. For this reason I believe we have an entirely different situation. It isn't possible to come to the end of a fiscal year and try to spend great sums of money judiciously.

Therefore, I think that in this bill-I am speaking only of this bill, Mr. Chairman-we should waive points of order. This will protect the schools by providing for the administration's "no hardship" clause and permit the President some measure of discretion in the spending of these funds.

The question of spending is critical, and I would say to you very frankly, Mr. Chairman, that if the discretionary language is stricken from this bill, I would recommend a veto to the President.

I believe the Secretary has also indicated that without this language the bill would probably be vetoed. If this happens, we will be back in the same situation we find ourselves in today-without a bill for these agencies.

And I might say further, Mr. Chairman, that I think it would be a mistake for us to continue to operate the Government, or any part of the Government, on continuing resolutions. I have been opposed to continuing resolutions for a long time, and I would certainly oppose any further continuing resolutions this year. I am also inclined to believe that the President might veto further continuing resolutions.

So, very strongly-and this is as short as I can make it, Mr. Chairman-I would urge this committee to pass a rule waiving points of order. This will permit us to bring the bill up tomorrow so we can send it to the Senate and hopefully avoid the problem of another continuing resolution.

The CHAIRMAN. Mr. Bolling?

Mr. BOLLING. I am in general accord with the gentleman from Ohio, as he well knows, about spending. The thing that disturbs me about this and I have tried to bring this out this morning-is that heretofore it has been my understanding of the law that the President did not have to spend all of the money, whether he were given this directive or not, or this discretion, rather. Would you care to comment on that briefly?

Mr. Bow. This is correct, and the President did withhold expenditures of about $7 billion this year until Congress acted on appropriation bills and reduced obligational authority. The President has the right not to spend. We provide him with obligational authority, but he does not have to spend the money. This has been the prerogative of the President for many years. However, in this particular case, involving certain formula grants to the States, the General Counsel of the Department of HEW and the Department of Justice have provided an opinion stating that it is necessary to spend. So you can see that this is an exception. It would mean that in these last 4 months of the fiscal year, unless the President is given some discretion, he would have to spend this money.

The CHAIRMAN. Any questions of Mr. Bow?

Mr. SMITH. No questions.

Mr. ANDERSON of Illinois. No questions.

Mr. O'NEILL. Is the Bow amendment in order?

Mr. Bow. It would be if you gave me a rule.

The CHAIRMAN. Thank you, Mr. Bow.

Mr. Bow. Thank you, Mr. Chairman.

The CHAIRMAN. Mr. Smith, can you make it short?

STATEMENT OF HON. NEAL SMITH, REPRESENTATIVE OF THE 5TH DISTRICT, STATE OF IOWA

Mr. SMITH. It will just take me about 1 minute to make about four quick observations.

One is that time is of the essence, and the reason is we have already received the 1971 budget. We would like to go to work on it. We would like to have it out and over within a couple of months. The leadership of the committee is committed to this, and in many cases these school districts need money now for next fall worse than they need more money. So this is very important to these local school districts.

The second point I want to make is that it is important to have a waiver of points of order on that matter on page 28 relative to the "no hardship" clause. That is the only part of that paragraph that is subject to points of order. But that is very important.

The CHAIRMAN. What is that?

Mr. SMITH. That is line 19 to line 24 on page 28, relative to the "no hardship" clause, in other words, so as not to result in more than 5-percent reduction in the local udget.

The third point I want to make is in answer to Mr. O'Neill's question, which I do not think was adequately answered. On July 31, we passed the bill which was vetoed. It was not acted on in the Senate for about 6 months.

Under these programs that are under that item that you are talking about, the State agency goes ahead and contracts. In the interim 5 or 6 months they found out that the matching funds that were to be put