14

1 State, and local taxation to the same extent according to its 2 value as other such property is taxed, and (2) any and all 3 obligations issued by the Bank shall be subject both as to 4 principal and interest to Federal, State, and local taxation to 5 the same extent as the obligations of private corporations 6 are taxed.

7

AUDIT BY GENERAL ACCOUNTING OFFICE

8 SEC. 22. The General Accounting Office shall audit the 9 financial transactions of the Bank, and for this purpose shall 10 have access to all its books, records, and accounts.

11

12

AUTHORIZATION OF APPROPRIATIONS

SEC. 23. (1) There is authorized to be appropriated,

13 without fiscal year limitation, the sum of $5,000,000,000, to 14 the Secretary of the Treasury to finance the purchase of 15 Bank stock.

16

(2) There are authorized to be appropriated, without 17 fiscal year limitation, such sums as may be necessary to pay 18 the difference, if any, between the interest paid by the Bank 19 on its obligations and interest received by the Bank on its 20 loans, and to reimburse the capital of the Bank to the extent 21 of any defaults, and such additional sums as may be neces22 sary to establish and operate the Bank and otherwise carry 23 out the purposes of this Act.

Chairman MINISH. Does the gentleman from New York, Mr. Green, wish to make a statement?

Mr. GREEN. Thank you very much, Mr. Chairman. I have a rather extensive statement on the infrastructure problem and some of the means that we have to deal with them, the National Development Bank proposals, the Economic Development Administration, and the community development block grant program. With your consent I would like simply to insert it in the record, because I know Mayor Koch has other business in this town, particularly as a result of some events in the other body earlier this week.

I do want to take the opportunity, though, to welcome my predecessor here in the House to these halls, and also to acknowledge the presence of Carol Bellamy, the president of the New York City Council, in the audience.

I am very much looking forward to Mayor Koch's testimony, because he is one who has had to fight to keep the Big Apple in working order, and his experiences in dealing with infrastructure problems will certainly be invaluable to us during these hearings. Thank you, Mr. Chairman.

[Congressman Green's statement follows:]

STATEMENT OF CONGRESSMAN BILL GREEN

BEFORE THE OVERSIGHT SUBCOMMITTEE

SEPTEMBER 10, 1980

MR. CHAIRMAN, THIS MORNING WE ARE HERE TO DISCUSS THE STATE OF
THOSE LIFELINES OF WATER MAINS,

DETERIORATION OF INFRASTRUCTURE

SEWERS, BRIDGES AND ROADS THAT FACILITATE THE EVERYDAY WORKINGS OF
OUR NATION'S CITIES AND CHAIRMAN MINISH'S PROPOSED NATIONAL DEVELOP-
MENT BANK BILL. I WANT TO WELCOME MY PREDECESSOR HERE IN THE HOUSE,
EDWARD I. KOCH, MAYOR OF NEW YORK, WHO HAS FOUGHT TO KEEP THE
"BIG APPLE" IN WORKING ORDER AND WHOSE EXPERIENCES IN DEALING WITH
INFRASTRUCTURE PROBLEMS WILL BE INVALUABLE TO US DURING THESE HEARINGS,
AND SHELDON RICHMAN FROM THE COUNCIL ON A COMPETITIVE ECONOMY.

THE PROBLEMS OF THE DECAY OF WATER SYSTEMS, ROADS, BRIDGES,
SEWERS AND SUBWAYS IN OUR NATION'S CITIES IS HARDLY A NEW ONE. YET
IT IS ONE WHOSE ANSWER HAS BEEN CONSISTENTLY POSTPONED. RISING CAPITAL
COSTS AND BUDGET PRESSURES HAVE FORCED CITIES TO OVERLOOK INFRASTRUCTURE
REPAIRS IN FAVOR OF MORE IMMEDIATE PROBLEMS. BUT THE NEED FOR IMMEDIATE
RENOVATION OF INFRASTRUCTURE CAN NO LONGER BE IGNORED: AS FALLING PIECES
FROM ROADWAYS AND RUSTING BRIDGES IN NEW YORK EXEMPLIFY, THE CHILD'S
VERSE, "LONDON BRIDGE IS FALLING DOWN" MAY ALSO BE A SADLY ACCURATE
REPRESENTATION OF THE STATE OF MANY AMERICAN CITIES.

THE NEED FOR REPAIR IN ALL CITIES IS A PRESSING ONE, BUT IT IS ESPECIALLY SERIOUS IN OUR LARGER AND OLDER CITIES. IT MUST BE REMEMBERED THAT A GOOD PART OF THE CAPITAL STRUCTURE IN THE NORTH WAS BUILT BETWEEN 1880 AND 1930; MANY OF NEW YORK CITY'S SEWERS ARE OF CIVIL WAR ORIGIN. THERE ARE NUMEROUS MAJOR BREAKDOWNS TO RECITE: IN CLEVELAND 44 OF 163 BRIDGES WERE DECLARED IN UNSATISFACTORY CONDITION; IN CHICAGO

THE SEWERS BACKED UP IN OF THE HOMES; IN BOSTON, OF THE WATER
FROM THE QUABBIN RESERVOIR DOESN'T MAKE IT THROUGH THE PIPE TO THE

WATER SYSTEM. MANY SMALLER AND LESS OBVIOUS BREAKDOWNS EXIST AS

LET ME CITE SEVERAL EXAMPLES OF INFRASTRUCTURE DETERIORATION IN

NEW YORK THAT ARE PERHAPS REPRESENTATIVE OF THE PROBLEMS THAT OTHER LARGE OLD AMERICAN CITIES MAY FACE.

MORE THAN ONE-THIRD OF THE CITY'S 6,000 MILES OF STREETS IS IN DISREPAIR, 312 MILES OF SEWERS MUST BE REPLACED. CLOSE TO 5,000 BUSES AND 205 SUBWAY CARS NEED TO BE PURCHASED. 420 OF THE CITY'S BRIDGES SHOULD BE REHABILITATED. THE TOTAL MERELY TO REPLACE AND RECONSTRUCT OUR WHOLE CAPITAL PLANT WOULD REQUIRE $40 BILLION DOLLARS WHICH IS EQUIVALENT TO THE PROJECTED DEFICIT FOR THE FEDERAL GOVERNMENT NEXT

YEAR.

ONE MAY ASK, WHEN FACED WITH THE OBVIOUSLY OVERWHELMING COSTS OF INFRASTRUCTURE RENOVATION, WHETHER THESE REPAIRS CANNOT CONTINUE TO BE POSTPONED. I CAN ONLY ANSWER THAT WE CANNOT MAKE OUR CITIES ECONOMICALLY SOUND UNTIL WE HAVE MADE THEM PHYSICALLY SOUND. WITHOUT BRIDGES, ROADS, SUBWAYS, SEWERS AND WATER MAINS, WE HAVE NO CITIES, NO CENTER FOR OUR CULTURE, NO HOME FOR OUR INDUSTRY, AND LITTLE PROSPECT FOR ECONOMIC GROWTH. WE MUST KEEP OUR CITIES ALIVE FOR THESE REASONS AND BECAUSE THEY ARE ENERGY EFFICIENT. AT A TIME WHEN OUR SCARCE AND EXPENSIVE ENERGY RESOURCES MUST BE CONSERVED, THE DENSE POPULATIONS AND POTENTIAL TRANSPORTATION EFFECIENCIES OF CITIES OFFER A LIFE-STYLE

OPPORTUNITY THAT MINIMIZES ENERGY USE.

HAVING IDENTIFIED THE NEED FOR REPAIRS, AND THE HIGH COST OF MAKING THOSE REPAIRS, THE OBVIOUS QUESTION IS WHERE IS THE MONEY TO COME FROM? THE FLIGHT OF OUR WORK FORCE FROM THE CITY TO THE TAX HAVENS OF

THE SUBURBS AND THE DECREASE IN JOBS HAS CRIPPLED OUR CITY BUDGETS.

BOND ISSUES ARE NOT IN FAVOR WITH VOTERS, THEIR INTEREST RATES HAVE REACHED

UNPRECEDENT HIGH LEVELS THIS YEAR, AND MOST CITIES CANNOT AFFORD THE BURDEN OF STILL MORE DEBT TO SERVICE. AS A CONSEQUENCE, CITIES HAVE COME TO RELY INCREASINGLY ON FEDERAL AID AS THE SOURCE OF FINANCING FOR INFRASTRUCTURE; CITIES WITH POPULATIONS OF OVER 25,000 WILL RELY ON FEDERAL AID FOR 40% OF THEIR CAPITAL BUDGETS IN 1980. YET EVEN THIS SOURCE OF REVENUE WILL BE DECLINING, GIVEN THE CURRENT CONSERVATIVE MOOD OF SPENDING IN WASHINGTON. OUR CITIES' OPTIONS APPEAR TO BE LIMITED. WITH THE TRADITIONAL MEANS OF FINANCING INFRASTRUCTURE REPAIRS DEFEATED, WE MUST LOOK TO NEW ALTERNATIVES OR LEARN TO IMPLEMENT

OUR OLD METHODS MORE EFFICIENTLY. CHAIRMAN MINISH'S PROPOSAL FOR A NATIONAL DEVELOPMENT BANK TO PROVIDE LOANS FOR THE RENOVATION OF PUBLIC FACILITIES, FOR THE CREATION OF BUSINESSES AND INDUSTRIES AND THE PROVISION OF JOBS, IS JUST SUCH AN ALTERNATIVE. A NATIONAL DEVELOPMENT BANK COULD PROVIDE LOANS AT REASONABLE INTEREST RATES FOR INFRASTRUCTURE REPAIRS. WILLIAM MOORHEAD, CHAIRMAN OF THE SUBCOMMITTEE ON ECONOMIC STABILIZATION HAS ALSO CALLED FOR THE CREATION OF A NATIONAL DEVELOPMENT

BANK.

YET THERE ALSO EXIST FEDERAL PROGRAMS WHICH COULD BE MORE EFFICIENTLY TARGETED TOWARDS INFRASTRUCTURE PROBLEMS. DUE TO THE CURRENT CONSERVATIVE MOOD OF FEDERAL SPENDING IN WASHINGTON, IMPLEMENTING EXISTING PROGRAMS RATHER THAT PROPOSING NEW ONES MIGHT BE A MORE EFFECTIVE STRATEGY TO ACHIEVE IMMEDIATE ACTION.

THE COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM, UNDER THE AUTHORITY OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD) IS ONE SUCH PROGRAM. THE CDBG PROGRAM HAS BEEN A SOURCE OF FUNDS THAT HAVE FREQUENTLY