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BUDGET RESCISSION BILL

(H.R. 17505)

HEARINGS

BEFORE

SUBCOMMITTEES OF THE

COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES

NINETY-THIRD CONGRESS

SECOND SESSION

42-275 O

Printed for the use of the Committee on Appropriations

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON: 1974

GEORGE H. MAHON, Texas, Chairman

JAMIE L. WHITTEN, Mississippi
JOHN J. ROONEY, New York
ROBERT L. F. SIKES, Florida
OTTO E. PASSMAN, Louisiana
JOE L. EVINS, Tennessee

EDWARD P. BOLAND, Massachusetts
WILLIAM H. NATCHER, Kentucky
DANIEL J. FLOOD, Pennsylvania
TOM STEED, Oklahoma

GEORGE E. SHIPLEY, Illinois
JOHN M. SLACK, West Virginia
JOHN J. FLYNT, JR., Georgia
NEAL SMITH, Iowa

ROBERT N. GIAIMO, Connecticut
JULIA BUTLER HANSEN, Washington
JOSEPH P. ADDABBO, New York
JOHN J. MCFALL, California
EDWARD J. PATTEN, New Jersey
CLARENCE D. LONG, Maryland
SIDNEY R. YATES, Illinois
BOB CASEY, Texas

FRANK E. EVANS, Colorado
DAVID R. OBEY, Wisconsin

EDWARD R. ROYBAL, California

LOUIS STOKES, Ohio

J. EDWARD ROUSH, Indiana

GUNN MCKAY, Utah

TOM BEVILL, Alabama

EDITH GREEN, Oregon

ROBERT O. TIERNAN, Rhode Island

BILL CHAPPELL, Florida

BILL D. BURLISON, Missouri

GORDON E. CASEY

ELFORD A. CEDERBERG, Michigan
WILLIAM E. MINSHALL, Ohio
ROBERT H. MICHEL, Illinois
SILVIO O. CONTE, Massachusetts
GLENN R. DAVIS, Wisconsin
HOWARD W. ROBISON, New York
GARNER E. SHRIVER, Kansas
JOSEPH M. MCDADE, Pennsylvania
MARK ANDREWS, North Dakota
LOUIS C. WYMAN, New Hampshire
BURT L. TALCOTT, California
WENDELL WYATT, Oregon
JACK EDWARDS, Alabama
WILLIAM J. SCHERLE, Iowa
ROBERT C. MCEWEN, New York
JOHN T. MYERS, Indiana

J. KENNETH ROBINSON, Virginia
CLARENCE E. MILLER, Ohio
EARL B. RUTH, North Carolina
VICTOR V. VEYSEY, California
LAWRENCE COUGHLIN, Pennsylvania

C. W. BILL YOUNG, Florida

KEITH F. MAINLAND, Clerk and Staff Director

NICHOLAS G. CAVAROCCHI

GEORGE E. EVANS

ROBERT B. FOSTER

JOHN M. GARRITY
AUBREY A. GUNNELS
CHARLES G. HARDIN
F. MICHAEL HUGO
THOMAS J. KINGFIELD
ROBERT L. KNISELY
EDWARD E. LOMBARD
RICHARD N. MALOW
MILTON B. MEREDITH

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NOTE. This Surveys and Investigations supervisory staff is supplemented by selected personnel borrowed on a reimbursable basis for varying lengths of time from various agencies to staff up specific studies and investigations. The current average annual full-time personnel equivalent is approximately 42.

BARBARA L. CHAMBERS

GERARD J. CHOUINARD

PAUL V. FARMER
SANDRA A. GILBERT
EVA K. HARRIS

PATRICIA A. KEMP

VIRGINIA MAY KEYSER

ADMINISTRATIVE SUPPORT

MARCIA L. MATTS
FRANCES MAY
GENEVIEVE A. MEALY
JANE A. MEREDITH
LAWRENCE C. MILLER
DALE M. SHULAW
AUSTIN G. SMITH

CHRISTINE STOCKMAN
ANN M. STULL

BETTY LOU TAYLOR
RANDOLPH THOMAS
GEMMA M. WEIBLINGER

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G. Homer Skarin, Richard N. Malow, and Paul E. Thomson, Staff Assistants

TUESDAY, NOVEMBER 19, 1974.

DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT

RESCISSION AND DEFERRAL OF BUDGET AUTHORITY

WITNESSES

JAMES L. MITCHELL, UNDER SECRETARY

DAVID B. de WILDE, DEPUTY ASSISTANT SECRETARY FOR HOUSING PRODUCTION AND MORTGAGE CREDIT-FHA COMMISSIONER DAVID O. MEEKER, JR., ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND DEVELOPMENT

WILLIAM LILLEY, DEPUTY ASSISTANT SECRETARY FOR POLICY

DEVELOPMENT

IRVING MARGULIES, ASSOCIATE GENERAL COUNSEL, EQUAL OPPORTUNITY LITIGATION AND ADMINISTRATION DIVISION ALBERT J. KLIMAN, DEPUTY DEPARTMENTAL BUDGET OFFICER Mr. ROUSH. The committee will be in order.

Mr. Boland asked me to chair the committee this morning.

We have with us today Mr. James L. Mitchell, the Under Secretary, and I understand you are accompanied by Mr. de Wilde, Mr. Meeker, Mr. Lilley, Mr. Margulies, and Mr. Kliman. Anyone else, Mr. Secretary, that you have with you?

Mr. MITCHELL. No; they are the gentlemen at the table, Mr. Chairman.

Mr. ROUSH. Do you have a prepared statement?
Mr. MITCHELL. No, sir, we do not.

Mr. ROUSH. We want to welcome you to this first hearing of the subcommittee in connection with the new rescission and deferral authority contained in the Congressional Budget and Impoundment Control Act of 1974. The Department is requesting the Congress to

rescind the balance of contract authority available for the college housing program and to defer appropriations and contract authority available for a number of other programs, including $260 million of section 235 contract authority.

We will have a number of questions concerning these requests. Do you have justifications in any form?

Mr. MITCHELL. Yes, sir, we have submitted explanations to the committee.

JUSTIFICATION MATERIAL

Mr. ROUSH. Without objection we will place in the record at this point those portions of House Document No. 93-365 that pertain to the Department of Housing and Urban Development and the explanation material.

[The material follows:]

House Document No. 93-365

Rescission Proposal No.: R75-5

PROPOSED RESCISSION OF BUDGET AUTHORITY

REPORT PURSUANT TO SEC. 1012 OF PUBLIC LAW 93-344

Agency: Department of Housing and Urban Development.
Bureau: Housing Production and Mortgage Credit.

Appropriation title and symbol: College Housing-86X4058.

New budget authority (Public Law

Other budgetary resources (contract authority)

Amount proposed for rescission..

Description

$14,518, 000

14,518, 000

The College Housing program was authorized by Title IV of the Housing Act of 1950, as amended. It has provided financial assistance to colleges and eligible hospitals for the construction or acquisition of housing and related facilities through debt service grants which reduce the cost of borrowing on the private market.

No new approvals have been made under the program since January 8, 1973, on the basis that the program was an inefficient means of providing higher educational assistance for needy students. The College Housing program provided benefits to all residents regardless of income while doing little to reduce the financial barrier to higher education for low-income students. Unused contract authority in the amount of $14,518,000 is estimated to be available as of June 30, 1974. Title II of the recently enacted Housing and Community Development Act of 1974 could provide assisted housing for eligible lowincome students under a new Lower Income Housing Assistance Program. HUD is moving promptly to implement this program. In view of the availability of the revised leasing program, new debt service grant commitments are not warranted. Rescission of this contract authority is therefore requested under the provisions of the Antideficiency Act.

Estimated effects

Rescission of the amount shown above will not interfere with the Federal Government's ability to assist needy students either to attend college or find suitable housing.

Use of these funds would increase Federal outlays by an additional $15 million annually up to 40 years, beginning in FY 1977.

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, HOUSING PRODUCTION AND MORTGAGE CREDIT, COLLEGE HOUSING LOANS AND OTHER EXPENSES

The limitation otherwise applicable to the total payments that may be required in any fiscal year by all contracts entered into under Title IV of the Housing Act of 1950, as amended (12 U.S.C. 1749 et seq.), is hereby reduced by the uncommitted balances of authorizations heretofore provided for this purpose in Appropriations Acts.

The authority proposed for rescission is not needed to assist students to attend college or to obtain adequate housing. This proposed rescission reflects a move toward providing more equitable support for college students based on financial need. The Department of Health, Education and Welfare provides assistance to lower income students through the Basic Educational Opportunity Grant program and a guaranteed student loan program. The Department of Housing and Urban Development provides housing for low-income families under the Lower Income Housing Assistance program.

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