TESTIMONY OF HON. TED STEVENS, U.S. SENATOR FROM THE STATE OF ALASKA

Senator STEVENS. Mr. Chairman, I have a very short statement to make in support of Senate bill 1632.

Mr. Chairman, and members of the subcommittee, it is always a pleasure to appear before you, and for me today, it is a special pleasure because I have the opportunity to testify in favor of a bill I introduced.

I realize that the subcommittee's time is short and that you have many, many items to cover before tomorrow evening, so I will keep my remarks brief.

S. 1632 INTRODUCED IN 90TH CONGRESS AND PASSED SENATE

S. 1632 is identical to a bill that was introduced by Senator Ernest Gruening during the last Congress. It was cosponsored by the late Senator E. L. Bartlett, as well as many other distinguished Members of this body. It passed the Senate but subsequently failed to gain approval in the House.

I think that the urgency for a measure such as this one has increased rather than decreased with the passage of time.

Currently, this Nation finds itself in a difficult fiscal situation. At the same time, we are gripped by a dangerous inflationary cycle which must be broken. We are balanced between trying to achieve fiscal integrity for our economy and at the same time dealing with the tremendously complex and expensive problems that beset us.

AID HAS FIRST CRACK AT SURPLUS PROPERTY

As things stand now, the disposition of surplus property goes directly against our major national goals. If the Defense Department has a surplus bulldozer that has been purchased with American tax dollars, then AID gets first crack at that bulldozer. Not only do they have first pick over all surplus items, it is not even necessary that such items be immediately usable. AID can select surplus property and equipment and then stockpile it against possible future needs of other

nations.

If a State or local agency needs a bulldozer, the probability is that they will have to buy it new, get Federal aid to purchase it, or simply go without. Unfortunately, with the money squeeze now underway both in the public and private sector, it is usually the latter course of action that results.

EQUIPMENT NEEDED AT HOME

Mr. Chairman, it is inconceivable to me that, with the pressing problems confronting America at home today, we can consider even for a moment giving away overseas equipment and material that is so desperately needed here. I am not an isolationist, nor do I advocate eliminating our commitments abroad. However, in this time of fiscal crisis it seems totally irresponsible to permit foreign nations to obtain

items that are vitally needed in America. If we cannot afford to finance many programs here at home, then we certainly cannot afford to finance such programs abroad.

Two-thirds of the surplus equipment that becomes available under the surplus property program is here in the United States or immediately available. Only one-third is already overseas. Further, much of the surplus property that becomes available here in the United States is merely being warehoused for unspecified possible future use by unspecified foreign nations.

ALASKA NEEDS SURPLUS EQUIPMENT

I can tell you for a fact, Mr. Chairman, that the people of my State do not have to stockpile trucks and equipment against possible future need. We need all that we can get now-today, perhaps even yesterday, if that were possible.

By necessity, Federal spending is being limited. The Federal Government cannot afford to buy equipment twice; it can scarcely afford to buy it once. All of us in the Senate have been faced with the reality of informing the people at home about necessary cutbacks in programs and funds currently underway. If we modify the Federal Property and Administrative Services Act of 1942 as S. 1632 intends, we can help the situation,

PASSAGE OF S. 1632 URGENTLY NEEDED

It would mean more resources for our State and local organizations. We would get more mileage by far out of Federal dollars spent for material and equipment, because purchase of them would not have to be duplicated. It is obvious that S. 1632 will not solve all the problems that exist in America today. But if enacted, it will help.

We are asking Americans today to tighten their belts just a little. I think we owe it to them in return to do what we can to see that America's resources are utilized to the greatest extent. I hope the committee will act favorably on S. 1632, as it would certainly be a step in the right direction.

This bill as stated previously was introduced in the last Congress by Senator Gruening and cosponsored by my predecessor, Senator Bartlett. The bill did pass the Senate, but it did not gain approval in the House.

The urgency for the passage of this bill has increased since the last Congress.

As you know, the Nation finds itself in a difficult fiscal situation, and at the same time we are gripped by a dangerous inflationary cycle which must be broken. And what we are really dealing with here is the disposition of surplus property that presently, I think, is against our national goal. This bill would cover the situation where Federal property has been purchased with American tax dollars, and under the existing law AID, the Agency for International Development, would get first crack at that property before making it available to the State or local agencies.

STATE AND LOCAL AGENCIES SHOULD HAVE PRIORITY

We feel that the law should be amended to permit the State and local agencies to have an opportunity to have access to the surplus Federal property before it becomes available for programs overseas. Senator METCALF. Is this property located overseas, Senator?

Senator STEVENS. This would amend the law so that the property which is either here or overseas could be made available to the State and local governments before being made available to AID. Under the existing law AID gets the preference.

Senator METCALF. So that the States, and so forth, for property declared surplus overseas, would have to first clear priorities with the State and local agencies?

Senator STEVENS. Yes.

Senator METCALF. Yes. I see a good deal of merit in saying that the State and local agency should have the priority over AID for property located within the 50 States. But say it is located in India. Wouldn't that unduly complicate the process of distributing Federal property?

STATE AND LOCAL AGENCIES MUST PAY TRANSPORTATION COSTS

Senator STEVENS. Well, under the bill the State or local agency has to pay the cost of transportation. So that is a deterrent. But with all the property that is currently in South Vietnam, for instance, if that war should terminate, I should think that the State and local agency should have the option of bringing it back if they want to do it. This puts the burden on them to pay the transportation costs. And I don't think they are going to bring back a lot from overseas.

On the other hand, there is no reason for us to ship it out of the country under AID if they are prepared to pay the transportation costs. In a State like mine, which is really capital short and property short, this type of equipment can help a lot.

Senator METCALF. Your State is not unique.

Senator STEVENS. I do think the bill is a very good bill. And as I say, it was one of those that was urged by Senator Gruening. And I think it was a very good recommendation.

Senator METCALF. And it passed the Senate last year.

Senator STEVENS. Yes, it did pass the Senate last year.

I think they opposed it last year. I believe they are mistaken in terms of the objectives of the Federal program. I don't think that that Federal Property and Administrative Services Act ever intended that the foreign assistance programs would take precedence over local need, particularly for the property that is still here in this country. And the expansion of that AID program, I think, particularly as I said— I just returned from Vietnam, as you know, last week. And the equipment over there is fantastic, particularly in the area of roadbuilding. It is something that my State, and your State, too, very much needs, this type of equipment.

Thank you, Mr. Chairman.

I appreciate your courtesy. And I do hope that the committee will favorably consider S. 1632.

Senator ALLEN. Thank you, Senator Stevens.

Senator STEVENS. I would like to put in the record a statement I prepared on S. 406 which is also before your committee that I cosponsored, if I may, when you take up that bill.

Senator METCALF. That is Senator Proxmire's.
Senator STEVENS. Yes.

TESTIMONY ON S. 406

Mr. Chairman, thank you for allowing me to appear before this subcommittee today to add my full support to the passage of Senator Proxmire's bill, S. 406 which I have cosponsored.

The stockpile of medical materials for national emergencies is certainly critical in its need to issue adequate health care for our citizens in such emergencies. But included in this stockpiling are perishables such as antibiotics and delicate medical instruments which are subject to disintegration and loss of effectiveness.

While much progress in rotating such supplies to insure their full utilization has been made, it is estimated that deterioration losses will continue at the rate of about $4 to $5 million a year by the Public Health Service. This indicates the importance of this bill in setting a national policy to make it clear that these medical items can be transferred, donated, or sold before they can no longer be used. I am particularly pleased with the bill's provision for return of foreign excess property to the United States for further utilization and donation, in this country when this is deemed feasible, and the further provisions which would permit medical items located abroad to be donated to nonprofit medical or health organizations in foreign lands. I believe these alternatives are entirely reasonable and certainly preferable to allowing deterioration to occur in such stockpiled medical supplies. I would like to make a priority recommendation for the redistribution and use of these medicines that come off the stockpiles. I would hope, Mr. Chairman, that we can devise a system whereby the medical items concerned by S. 406 are made available through proper medical authorities to people and programs that do not have the easy general access to clinics and hospitals that most of us enjoy.

I have specifically in mind the approximately 170 villages that dot the farflung expanses of Alaska. As redistribution procedures are implemented for these medical supplies I urge that maximum consideration be given to their use for needy American citizens that do not possess the economic means to acquire medicines through the normal pharmaceutical channels and secondly, are situated too far away to participate in the conventional process of medical treatment.

In such cases an outright donation of these materials to the USPHS, BIA or other appropriate agency would be the preferred method for the most beneficial disposition of our medical stockpile.

I am pleased to note that the General Services Administration and the Department of Health, Education, and Welfare, both administra

tors of surplus property programs have expressed their approval of this legislation, as has the Bureau of the Budget.

I feel that the intent of this bill to forestall the destruction of stockpiled medical supplies due to their deterioration is indeed admirable, and, more than that, a very humane endeavor to insure that these critical supplies be utilized for the sick and injured of our land and other countries to the highest possible extent.

I am pleased to be a cosponsor, and urge the subcommittee take positive and immediate action on this legislation.

Senator ALLEN. Mr. Dwinell, please.

TESTIMONY OF LANE DWINELL, ASSISTANT ADMINISTRATOR FOR ADMINISTRATION, AGENCY FOR INTERNATIONAL DEVELOPMENT; ACCOMPANIED BY JAMES KEARNS, DEPUTY ASSISTANT

ADMINISTRATOR

Mr. DWINELL. Mr. Chairman, since I have been in my present position a matter of some 3 weeks, I thought it might be wise to be supported by the Deputy Assistant Administrator for Administration, Mr. James Kearns.

I have a statement for the committee which I will present.

Senator ALLEN. All right, would you like to read the statement at this time?

Mr. DWINELL. If I may.

Senator ALLEN. Go right ahead.

AID OPPOSED TO S. 1632

Mr. DWINELL. I appreciate this opportunity to give our views on S. 1632. S. 1632 is identical to several previous bills introduced in the Senate and also the House. The Agency for International Development indicated its opposition to the previous bills and is similarly opposed to the current bill.

The Foreign Assistance Act of 1961 expresses the intent of Congress that excess property be used wherever possible in implementing programs of economic assistance to the developing countries. Section 102 of this act provides that "to the maximum extent practicable, the furnishing of agricultural commodities, disposal of excess property, and U.S. payments to international lending institutions, undertaken pursuant to this or any other act, shall complement and be coordinated with assistance provided under this part." Also, section 608 of the act states that: "It is the sense of the Congress that in furnishing assistance under part I, excess personal property shall be utilized wherever practicable in lieu of the procurement of new items for U.S.assisted projects and programs."

To illustrate how AID carries out the provisions of the Foreign Assistance Act, I will briefly explain the various excess property programs we administer.