Now, that is close to $1 billion that is being held back in areas that I think all of you agree are quite sensitive areas. They are areas with grave social consequences and they are going to be particularly grave this summer because of the economic recession that we have had in the country. They are consequences we are going to have to deal with this summer that we did not deal with last time.

Now, the Congress, after specific hearings, after specific complaints, after elaborate presentation, made a decision that we needed desperately to have those urban renewal funds in the cities. And it got up to a bureau in the Executive Department and it said, "We are not going to spend it."

I submit to you that that does present a grave constitutional question.

I said a while ago, just by way of example, suppose some future executive branch decided it did not like the course of decisions in the Federal courts. Could it simply hold back the moneys that are necessary for those courts to function adequately? Could it simply say we are not going to spend the additional money Congress said we need for the courts?

That is not an academic situation. I want to call your attention to a decision in the Supreme Court of Pennsylvania in early March of this year, in which 52 judges went to court and said that the mayor and the legislative branch of the city of Philadelphia were withholding vital funds that the courts desperately needed to function. They were funds for lawyers for defense purposes, where the supreme court had decreed that there had to be lawyers, for example, for juveniles. They were funds for probation officers; they were funds for vitally needed services in the court.

The Supreme Court of Pennsylvanis said if it is perfectly true that we are to have an independent judiciary, neither the mayor nor the legislative body can simply say we cannot give you the funds with which to operate.

So we are not talking about something academic in terms of the use of the budgetary powers for the purpose of actually controlling a third branch of government-in this case the indiciary.

Let me just say that the Congress gave us the additional moneythat is, $200 million for urban renewal, $192 million for public housing, $200 million for water and sewer construction and rehabilitation-because we pointed out the desperation we were involved in in these cities. It is no secret that a great number of eastern cities, for example, at the present time are closing down their police academies because they cannot afford to keep them open. One city with a recreation budget last year of $6 million is going to have a recreation budget of $900,000. It is going to close its playing fields, its parks, its swimming pools, the gymnasia.

The mayor of Newark is not sure he is going to have enough money to finish out the school term. We are having a desperate situation with respect to housing.

Congress makes a specific determination that we desperately need this money. Then as I say, it gets to the executive branch and somebody in OMB says, "We are not going to spend the money."

I think it is perfectly clear that it presents a constitutional question. Admittedly, there are different situations. Admittedly, there could be a situation where the Congress is, in fact, giving the administration a ceiling in an area where you cannot definitely say how much you are going to spend. That is one situation.

On the other hand, there can be an explicit situation. That is what I am talking about here: a situation on urban renewal, on public housing, where there is an element, not of urgency but an actual element of emergency, where the Congress can make a determination; for example, that if you cut off urban renewal funds and we have to go out to our communities in the various cities of this country and say to the community leaders, "We are now disbanding the entire group of Government workers who are developing urban renewal in particular territories," we say to them, "We are now disbanding this group because they will not give us the money." I think the consequences can be rather ominous.

For example, right now in San Francisco, in the normal course, we would have received $21 million to continue our urban renewal program between now and July 1. We were told last week that because of the holdback of funds, we are going to get 10 percent of that; namely, $2 million to $2.5 million instead of the $21 million we need between now and July. We are fighting to have that countermanded. If it is not countermanded, we are going out to these communities and literally fire whole groups of community leaders who have been working with us on this program and it happens to be one of the best urban renewal programs in the entire country.

If Congress makes a determination of such a serious nature now, it ought not to be willy-nilly countermanded by someone in the executive branch who says we are not going to spend the money. I think this is a specific case history which can indicate to the Congress how serious this matter has been.

I do not think it is any answer to say we have been doing this for 100 years. There are a lot of things that we have been doing for 100 years that the Supreme Court in recent years has said are unconstitutional. So the fact that a certain practice has built up beginning in the depression and accelerated during wartime for wartime reasons--and in wartime you do in effect give ceilings rather than specific appropriations-is no reason that it must continue today. The fact that this has continued for a long period of time is a reason to recognize that there is an acceleration to this tendency and that this tendency can erode the power of a separate branch of government and erode it as effectively as in the instance which I have given.

(Prepared statement of Mayor Alioto follows:)

TESTIMONY OF MAYOR JOSEPH ALIOTO, SAN FRANCISCO, CALIF., ON BEHALF OF THE NATIONAL LEAGUE OF CITIES AND THE U.S. CONFERENCE OF MAYORS Mr. Chairman, members of the Committee, I am Joseph Alioto, Mayor of San Francisco, California. I am glad to have this opportunity to appear before you on behalf of the National League of Cities and the United States Conference of Mayors.

Each time that we mayors come to Washington to testify before a Congressional Committee, our tale of woe seems to lengthen. The multi-layered crisis facing our nation's cities has very real dimensions for mayors who are

called upon to find solutions. A primary restraint upon our search for solutions is the limited fiscal resources available to most cities. It is for this reason, among many others, that the National League of Cities and the U.S. Conference of Mayors strongly supports the President's General Revenue Sharing proposal. Because some press accounts have misunderstood our concern with what the President has chosen to call special revenue sharing with our commitment to general revenue sharing, we want to take this opportunity to again assure the Congress that our support for general revenue sharing remains firm.

Even before the President revealed his budget for Fiscal Year 1972, we began to realize that the Administration was refusing to obligate all of the funds that are available for a number of vital urban-oriented programs. Cities deeply appreciate the support which they have received from this Committee and from the Congress as a whole in the authorization and appropriation of needed funds for such programs as urban renewal, model cities, public housing, Sections 235 and 236 housing assistance, waste and sewer grants and mass transit. We hope this support will continue and will grow. Now, however, the Administration has told the Congress and the cities that the funds which we all worked so hard to get are not going to be utilized according to the schedule intended by Congress. Instead, the Administration tells us that only a portion of the funds made available by the Congress will in fact be obligated during this current fiscal year 1971. All unobligated funds will be carried over into fiscal year 1972 where most-but not all-of them will be finally utilized. Since this holdback situation became known, both the National League of Cities and the U.S. Conference of Mayors have earnestly called for the release of this money. We urge this Committee and the Congress as a whole to join with us in seeking the release of these vital funds. What can the cities of this country do to get this money released? What can the Congress and, in particular, this Committee do? Each year, the representatives of the cities come before the Congress, along with the Administration, to debate the needs of our urban areas. First, we debate the size of the authorization requets. Then, we return again to the Hill to argue for full appropriations. Each time, the Administration presents its arguments, usually for lower levels of funding in the programs we are discussing today. In past years, with only occasional exception, the Administration has accepted the ultimate decision of the Congress, a decision which resulted from this national debate. Now, however, this Administration has seen fit to carry that debate one step further. Now apparently, we must return to the Congress once again to argue whether the monies, which have already been authorized and appropriated, will in fact be spent.

Mr. Chairman, your Committee is meeting this morning to highlight concern about the Administration's decision to hold back certain already appropriated monies for a number of important programs. In particular, we direct the Committee's attention to the President's budget which shows that out of the Fiscal Year 1971 funds already made available by Congress, the following program amounts have been frozen: $192 million in public housing contract authority, $200 million in urban renewal funds, and $200 million for water and sewer grants-a total of nearly $600 million in funds which could be utilized today. In addition, the Administration's original budget showed a very low level for obligations under the Model Cities program with no new appropriation request for FY 72. As we will indicate in a moment, we are able to report to this Committee that HUD has now agreed to amend its level of estimated Model Cities obligations to provide for the full funding of all contracts. Finally, we are disappointed in the Administration's apparent unwillingness to request the full amounts authorized for the Section 235 and 236 housing assistance programs.

Far and away, the program with the most critical need for these withheld funds is public housing. In 1968, the Congress established a ten year national goal of the construction or rehabilitation of 26 million units, of which 6 mil. lion must be for low and moderate income families. That means we must build or rehabilitate an average of 600,000 units of low and moderate income housing each year. As this Committee knows only too well, the Federal Government fell behind schedule in meeting that national goal almost as soon as it was set by the Congress.

The President's budget estimates that the Department of Housing and Urban Development will assist in the construction or rehabilitation of only 465,000 units during the current fiscal year. That is 135,000 less than our minimum annual goal. Nevertheless, the Administration has chosen for reasons of its own to freeze the $150 million in public housing contract authority which the Congress authorized in the Housing and Urban Development Act of 1970. Half of this amount-or $75 million-is available right now for new construction.

In fact, if we look at the figures for the total contract authority available and at the estimated obligations for FY 71, we find that approximately $83 million in funds for new development will go unused this year. These funds would account for an additional 50,000 units which added to the current estimate, would still place this country some 85,000 units short of its annual housing goal for federally-assisted housing. This trend in underfunding would apparently continue into the FY 72 budget where some $75 million more for new starts, accounting for about 47,000 units, would go unused. That is nearly 100,000 units in two years.

Mr. Chairman, the President eloquently expresses his concern for the dangerous economic situation facing this country today. Yet, he decides to withhold spending for these necessary urban programs, spending which would mean immediate jobs and stimulation to the lagging economy. Unemployment is now, not on July 1, 1971. We appeal to the President to release these funds now.

Also in the HUD Act of 1970, Congress increased from $75 million to $150 million the amount of contract authority to be available annually under the public housing program for operating deficits and maintenance expenses. It is imperative, Mr. Chairman, that the entire amount-$150 million-be obligated each year for this purpose. Throughout the country, many public housing authorities, both large and small, are facing massive deficits. Soaring operating and maintenance costs, coupled with reduced rental receipts, have created an intollerable fiscal situation. Each year, there is discussion about problems with the public housing program, and as mayors, we are quick to admit that the program could stand considerable improvement. However, the Federal Government cannot allow the existing inventory of units to disintegrate while we are having a national debate about the reform of our housing assistance programs.

One of the explanations which the mayors have received when they have inquired about this low level of obligations for the public housing program is that this Administration feels that the housing assistance programsSection 235 and 236-are better mechanisms. These programs provide homeownership and rental units to families of low and moderate incomes.

At least two points need to be made about this preference of the Administration's. First, the President's most welcome statements to the effect that local priorities. locally determined should be favored wherever possible, would lead one to logically conclude, for example, that the choice between public housing and Section 236 should be made by each applicant-community. Yet, by essentially selecting one program over another at the national level, the Administration renders meaningless its expressed commitment to abide by local priorities. It should be pointed out, for example, that to a significant extent, public housing serves a lower income clientel than either Section 235 or 236. In some communities, public housing is currently the only appropriate program designed to meet the needs of their low income citizens. Secondly, even if we were to accept for the moment that Sections 235 and 236 were to be favored, how then are we to understand the Administration's request for Fiscal Year 72 for these programs. Where Congress has authorized $200 million each for Sections 235 and 236, the President intends to ask for only $175 million. Moreover, there has been no supplemental request for funds to utilize the additional $25 million in FY 71 authority approved by the Congress in December for these two programs. To say that a level of 465,000 units of federally-assisted low and moderate income housing in enough during FY 71 or that just over 500,000 units for FY 72 is satisfactory is to ignore the Congressionally set national goal of at least 600,000 such units annually. We call upon the Administration to make full use of the funds that are available for these important housing programs and to seek a supplemental appropriations for Section 235 and 236 for the balance of this fiscal year.

The Administration's budget also short-changes the all important urban renewal program. You will recall, Mr. Chairman, that the Second Session of the 91st Congress originally appropriated $1.35 billion for the urban renewal program during Fiscal Year 71. This bill, which also included $500 million for the vital water and sewer grant program upon which so many of our counties and smaller communities rely, was vetoed by the President in August of 1970. The Congress then passed a new appropriation bill which called for a $1.2 billion for renewal and $350 million for water and sewer, amounts which constituted a compromise between the Administration's original request and the vetoed bill. The President signed that bill.

Now we find that the Administration intends to obligate only $1 billion for urban renewal, carrying over the balance of $200 million for use in Fiscal Year 1972. For water and sewer grants, the budget shows estimated obligations of only $150 million, with a balance of $200 million carried over.

We need not, I am sure, go deeply into the discussion of the demand for these urban renewal funds with this Committee. Well over a 1,000 communities in all 50 states have participated in the program since it began in 1949. Over half of these communities have populations below 25,000. The rate of return on this investment to these communities and to the Federal Government has been impressive. Over 2 million jobs will have been created and over 5,000 structures will have been built when present development has been completed. Over five dollars of local private and public investment has been generated for each federal urban renewal dollar spent. The assessed tax valuation of land and improvements has been increased an average of 240% in completed projects, thereby expanding the local tax base. Last summer when we mayors came in large numbers to the Capitol to stress our needs for increased urban renewal appropriations, we pointed out that where there were pending with HUD over $3 billion in project applications, only about $1 billion would be funded during fiscal year 71 under the Administration's request.

We have no reason to believe that this disparity between requests and available funds has lessened. If anything, the demand has continued to steadily increase. The urban renewal program continues to be the primary, physical development tool available to our cities. It must receive adequate funding from the Congress and those funds that must all be utilized by the Administration in order for the Cities to be able to make any headway in the seemingly endless struggle for urban rejuvenation. We ask this Committee and the Congress itself to assist the cities in having this vital money released.

We are happy to report that the crisis facing the Model Cities program under the Administration's budget as published has now eased. When the President announced his general plans for the consolidation of four HUD programs-urban renewal, model cities, water and sewer grants, and rehabilitation loans-into a community development grant program, he indicated that December 31, 1971 was the target date for the beginning of the new program. This, of course, assumed favorable Congressional approval prior to that date. In anticipation of this planned transition, HUD planned to notify the mayors of all cities involved in the Model Cities program that their program would be terminated on December 31, 1971 and that all future funds for these purposes were to be gotten out of the new consolidated grant program or from elsewhere in the Federal Government. In particular, this meant that the bulk of Model Cities activity-over 80% of the totalwhich has been non-physical development would have to be financed out of some other department's budget.

As soon as these plans became known to the mayors, they appealed the matter with the White House and the Office of Management and Budget through their Washington representatives, the National League of Cities and the U.S. Conference of Mayors. After several weeks of discussions, at various levels of the Government, and with the important help of the Vice President's office, we are now satisfied that we have a commitment from HUD to institute a different approach to the proposed transition of Model Cities. We have assurances from HUD that the Department will fully fund on an annual basis all Model Cities contracts which come up for renewal (or for initial funding) between now and the end of this calendar year. In order to be able to do this, HUD must-and we are told it hasrequest an amended budget from OMB which would raise the estimated