COMMITTEE ON APPROPRIATIONS CLARENCE CANNON, Missouri, Chairman

KENNETH SPRANKLE, Clerk and Staff Director

SECOND SUPPLEMENTAL APPROPRIATION BILL FOR

1958

SUBCOMMITTEE ON DEPARTMENTS OF LABOR, AND HEALTH, EDUCATION, AND WELFARE, APPROPRIATIONS

JOHN E. FOGARTY, Rhode Island, Chairman

WINFIELD K. DENTON, Indiana
FRED MARSHALL, Minnesota

JOHN TABER, New York

MELVIN R. LAIRD, Wisconsin

THURSDAY, JANUARY 23, 1958.

DEPARTMENT OF HEALTH,

EDUCATION, AND WELFARE

Mr. FOGARTY. The committee will come to order.

SUPPLEMENTAL ESTIMATES FOR 1958

We will now take up the items in House Document No. 313 which apply to the Department of Health, Education, and Welfare, I will ask the clerk to have the pertinent portion of the document placed in the record at this point.

(The matter referred to is as follows:)

DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE
OFFICE OF EDUCATION

ASSISTANCE FOR SCHOOL CONSTRUCTION

"For an additional amount for 'Assistance for school construction', $57,000,000; and the limitation under said head in the Department of Health, Education, and Welfare Appropriation Act, 1958, on the amount available for necessary expenses of technical services rendered by other agencies is increased from ‘$700,000' to '$800,000': Provided, That the amounts heretofore appropriated under this head shall be merged with this appropriation and shall remain available until expended: Provided further, That payments from such merged appropriation may be made with respect to applications under title III of the Act of September 23; 1950, as amended, filed on or before November 18, 1957, prior to any subsequent cut-off date established under such title III, and without including such applications in an order of priority with those filed after November 18, 1957."

This proposed supplemental appropriation is to meet the cost of Public Law 85-267, approved September 2, 1957. This act extended for an additional year assistance for the construction of school facilities in areas experiencing substantial increases in school enrollment prior to June 30, 1959, as a result of Federal activities, such as the construction of military housing under title VIII of the National Housing Act. The proposed increase in limitation is to permit an additional $100,000 to be transferred to the Housing and Home Finance Agency for technical services in connection with the review of construction financed under this program. The recommended language provisions would eliminate delay in processing and payments on eligible applications now on hand, and would also merge all funds provided for this purpose.

OFFICE OF VOCATIONAL REHABILITATION

GRANTS TO STATES AND OTHER AGENCIES

"For an additional amount for 'Grants to States and other agencies', for vocational rehabilitation services under section 2 of the Vocational Rehabilitation Act, as amended, $1,400,000."

The 1958 appropriation for "Grants to States and other agencies" provided $40,000,000 for grants to States for vocational rehabilitation services under sec

(1)

tion 2 of the Vocational Rehabilitation Act, and, at the same time, authorized allotments for that purpose on the basis of $53,000,000. Current estimates indicate that a supplemental appropriation of $1,400,00 will be required to provide sufficient Federal funds under allotments made pursuant to section 2 to match all State funds expected to be made available.

SOCIAL SECURITY ADMINISTRATION

LIMITATION ON SALARIES AND EXPENSES, BUREAU OF OLD-AGE AND SURVIVORS

INSURANCE

"The amount authorized by the Department of Health, Education, and Welfare Appropriation Act, 1958, to be expended from the Federal old-age and survivors insurance trust fund for Salaries and expenses, Bureau of Old-Age and Survivors Insurance', is increased from $130,000,000 to $138,690,000'."

This proposed increase of $8,690,000 is due to an increase in the volume of claims that must be processed in order to determine the entitlement of individuals to benefits under the old-age and survivors insurance program. The existing limitation provides funds to process 2,141,000 claims applications. Based on experience during the first half of this fiscal year, it is now estimated that 2,555,000 applications will have to be processed.

On August 26, 1957, this appropriation was reapportioned, pursuant to section 3679 of the Revised Statutes, as amended, on a basis which indicated the necessity for a supplemental estimate. This action was reported to the Congress by the Director of the Bureau of the Budget on that date.

GRANTS TO STATES FOR PUBLIC ASSISTANCE

"For an additional amount for 'Grants to States for public assistance', $170,600,000."

For the fiscal year 1958, the Congress approved an appropriation of $1,600,000,000 for grants to States for old-age assistance, aid to dependent children, aid to the blind, and aid to the permanently and totally disabled under titles I, IV, X, and XIV, respectively, of the Social Security Act. To meet requirements of States for this purpose it is estimated that a supplemental appropriation of $170,600,000 will be needed. Current program trends, estimates of the number of recipients, the average monthly payment per recipient, and the amount for State and local administration are all now higher than the estimates on which the appropriation was based.

On August 2, 1957, this appropriation was apportioned, pursuant to section 3679 of the Revised Statutes, as amended, on a basis which indicated a necessity for a supplemental estimate. This action was reported to the Congress by the Director of the Bureau of the Budget on that date.

OFFICE OF EDUCATION

WITNESSES

DR. RALL I. GRIGSBY, ASSISTANT COMMISSIONER FOR SCHOOL ASSISTANCE IN FEDERALLY AFFECTED AREAS

JOHN F. HUGHES, ACTING EXECUTIVE OFFICER

MISS MARIE E. SCHUTT, BUDGET AND FISCAL OFFICER

PERE SEWARD, DEPUTY COMMISSIONER, COMMUNITY FACILITIES ADMINISTRATION, HOUSING AND HOME FINANCE AGENCY CHARLES A. KLESIUS, DIRECTOR, SCHOOL CONSTRUCTION BRANCH, HHFA

NATHANIEL J. EISEMAN, PRINCIPAL BUDGET ANALYST, HHFA JAMES F. KELLY, DEPARTMENTAL BUDGET OFFICER

ASSISTANCE FOR SCHOOL CONSTRUCTION

Mr. FOGARTY. We are very pleased to have you with us, Mr. Grigsby. I am not going to go into the pending legislation today; but I and

other members of the subcommittee are quite interested in it and will have quite a few questions to ask the Commissioner when he appears before us in a few weeks in connection with the budget for

1959.

GENERAL STATEMENT

Do you have a statement to make?
Mr. GRIGSBY. Yes, I do.

Mr. FOGARTY. Go right ahead.

Mr. GRIGSBY. The 85th Congress, 1st session, by Public Law 85-267, extended the program of financial assistance for school construction in federally affected areas through fiscal year 1959. This extension became law September 2, 1957, too late in the session for the appropriation requirements to receive consideration. Under this latest extension of the law, school districts may request assistance to help build additional classroom facilities needed to accommodate federally connected enrollment increases which will occur through June of 1959. The Office of Education estimates that the cost of this latest 1-year extension of the school-construction program will amount to $57 million. This sum is intended to complete the program as now authorized. However, in the event it becomes evident at a later date that additional funds are required, a request will be submitted for these supplemental requirements in fiscal year 1959.

The authorizations contained in the legislation extending Public Law 815, as amended, permit the establishment of cutoff dates for receipt of applications up through June 30, 1959. However, past experience indicates that 90 percent or more of the application requirements have been submitted by the first cutoff date (in this case November 18, 1957) and that the applications submitted on subsequent cutoff dates will represent only a small fraction of the total require

ments.

The rate at which applications and construction projects can be approved and the funds obligated will depend to a considerable extent upon the rate at which contracts are let for the construction of familyhousing units for military personnel. The availability of the $57 million requested in the supplemental for fiscal year 1958 will expedite the approval of projects by assuring that there will be sufficient funds on hand to approve all eligible projects without possibility of any delay in waiting for subsequent appropriations.

Authority is included in the proposed appropriation language to permit approval of pending projects without delay, to merge appropriation accounts for this program, and to provide additional funds for technical services to be rendered by the Housing and Home Finance Agency.

That completes the statement and I would be glad to answer any questions.

STATUS OF 1958 APPROPRIATION

Mr. FOGARTY. We did not appropriate any funds last session for the construction of schools under this extension. What was appropriated last year?

Mr. KELLY. You appropriated $41 million for the last year of a 2-year period that expired on June 30, 1958. Then the law was extended for the period through June 30, 1959, which you have not yet considered.

Mr. FOGARTY. Just so the record will be clear, will you explain why this appropriation cannot wait for the 1959 bill, since appropriations for 1958 have already been made under authority of Public Law 815 prior to the last extension?

NUMBER OF REQUESTS AND SCREENING PROCEDURES

Mr. GRIGSBY. Mr. Fogarty, as of the first cutoff date established under the extension of the law on November 18, 1957, we received 342 applications from school districts under section 305 requesting funds for some 400 projects. When these applications are received they are given a preliminary screening and total claims set forth in the applications are added up. They came to $126,708,035. They were based upon an estimated increase in the number of children of parents who both live and work on Federal property, of some 34,105 pupils, an estimated increase in the category of children whose parents either live or are employed on tax-exempt Federal property of 120,653 pupils and an estimated increase, or claimed increase, in the category of children whose parents have moved into a community to accept employment in plants having a Federal defense contract of 15,816 pupils.

Taking the average cost per pupil and the percentages set forth in the law as the Federal share of the cost per pupil for these three categories of children, and applying it to the estimated number of children, we come up with a total of $126,708,035.

Then we have applied, on the basis of our previous experience in the processing of applications, between the time they are received and the claims set forth in the application, and the time they are actually approved after we have had a field report from our field representative verifying the housing on the basis of which the estimates are computed, verifying the Federal connection of the children in terms of the claimed properties or Federal defense contract plants, and we have applied a shrinkage factor based upon that experience.

EXPLANATION OF SCREENING

In the last 2-year period we have had a shrinkage between the totals claimed and the actual, final approvals given of 58 percent.

Let me put it more accurately. The firmed-up estimates were 58 percent of the original claims of the applicants. This time we have based this estimate on a 55 percent item. That is to say, we are estimating that 55 percent of the claims set forth in these applications overall will be required to complete the program.

Then to go back to your question, if I may, a little more directly, when these applications come in and we have given them the first screening or processing, we then give them tentative priority indexes based upon relative urgency of need as the law requires. Those priority indexes are assigned and on this basis prior to the firmed-up data, before the field report, we are estimating that the balances available from previous appropriations will permit approval of about onefourth of the applications in hand at the present time.

That means that the other three-fourths of these applications, about 300 projects, cannot be approved and funds obligated until after a supplemental is received.