3. Legal Services (Continued) he ADP and telecommunications areas and providing overall general legal ervices to all levels of the newly created Office of Automated Data Manageent Services, including the coordination of certain regional support in he ADP and telecommunications program areas. XPLANATION OF DISTRIBUTION BY OBJECTS (See Activity Data Sheet) Personnel Benefits. $227,000. Includes $190,000 for retirement contributions, $23,000 health benefits, and $14,000 group life insurance, as required by law in support of the above. Travel and Transportation of Persons. $43,000. Includes $40,000 for 1,143 travel days incident to appearances at hearings before State regulatory bodies in traffic and public utility cases, inspection of regional legal activities, and attendance at conferences and trials; and $3,000 for travel by motor pool. Transportation of Things. $2,000. Provides for transportation of equipment, records, and household goods in connection with transfers of personnel. Rents, Communications, and Utilities. $74,000. Provides $58,000 for intercity service, telephone and teletype service, and $16,000 for depreciation of administrative equipment. Printing and Reproduction. - $8,000 for printing, reproduction and issuance of procedures, manuals, revisions to Government-wide Federal Procurement Regulations, and other miscellaneous duplicating requirements. Other Services.- $26,000 for payment to GSP for repairs to equipment and furniture, reimbursement to Public Health Service for health room services, and other miscellaneous services. Supplies and Materials. - $43,000 for the purchase of law books required by the library and administrative office supplies and materials. EXPENSES FOR ECONOMIC OPPORTUNITY LIQUIDATING EXPENSES Mr. STEED. We turn now to expenses for Economic Opportunity Liquidating Expenses. The budget estimate for fiscal year 1974 is $33 million. This being a new item, do you have a statement on the matter? Mr. SAMPSON. I included in my original statement the reason for this liquidating of agencies thus far within GSA purview, and it is anticipated should the Congress approve the President's budget that we would need this $33 million to liquidate the rest of OEO. What will happen is that-let's assume for a moment it is not approved by June 30. On July 1 I would take over what remains of OEO operations. I would get about 834 employees and have to reduce that to about 296 by July 1, 1974. The 296 left then would complete the auditing and inventorying of all items left in OEO programs. We would phase out certain programs that would be eliminated, mainly the section 221 program, the Community Action programs in most of the cities. LEGAL STATUS OF LIQUIDATION PROPOSAL Mr. STEED. There was a lawsuit before Judge Oliver Gasch in which he rendered an opinion adverse to liquidating or dismantling OEO. What is the status of that opinion? Mr. SAMPSON. The opinion stands and is not being appealed by the administration. The opinion said that Congress had not acted, so the Executive could not proceed to liquidate OEO. Mr. STEED. Your position is then that only applies until there is a decision on whether it will or will not be liquidated by Congress? Mr. SAMPSON. The General Counsel is here, Mr. Casselman. Mr. CASSELMAN. Should, for example, there be zero appropriations for OEO programs, then OEO since it has no money would no longer stay in existence. Congress would have acted. We are asking for $33 million from you in the event the other committee does vote zero appropriations. Mr. STEED. The claim has been made-I don't know by whom-that if we in fact approve this $33 million, the administration position would then be we had superseded the order of the judge and the liquidation would be in order. Mr. SAMPSON. On the contrary, this particular $33 million is only important if indeed the zero appropriation of OEO is voted. That would be another subcommittee. Mr. STEED. Am I to assume in view of the judge's order no liquidating steps have been taken at all? Mr. SAMPSON. Mr. Phillips, running OEO, was told by the White House to stop liquidating OÊO at that point. Mr. STEED. It has stayed that way since? Mr. SAMPSON. Yes. Mr. STEED. You won't move into the matter until this decision by the Congress has been made? Mr. SAMPSON. All of the budget would have to be voted on by the various committees and by the Congress before we would do anything. Should the Congress decide to fund OEO as a full entity again, then we would not need this $33 million. In other words, if somebody else appropriated this money in some other budget, this we would turn back? 94-174 073 pt. 451 PROPOSED AMOUNT FOR LIQUIDATION Mr. STEED. Maybe you ought to give us a little more information as to why you need $33 million. That seems like a lot of money to go out of business. Mr. SAMPSON. $15.3 million of that is to phase out grants that were made and extend beyond the liquidating date. In other words, we still would be financing some grants that would be phased out during fiscal year 1974, and that is $15 million of the $33 million. Mr. ROBISON. Let me ask, would those be program moneys then? Mr. SAMPSON. Yes. Mr. ROBISON. For continuation of some of the CAP agency programs? Mr. SAMPSON. Yes. But it is for the administration of the last grants that are going to be given to those programs, and they can only be given up to June 30, 1973. Mr. ROBISON. But, to run beyond June 30, 1973, in numerous instances? Mr. SAMPSON. Right. And some of them can be more than a year. But those will probably be the last grants they get. There would be no more grants authorized after June 30, 1973. Mr. ROBISON. Mr. Chairman, the picture here is extremely confusing, not just from this witness, but from all sides. The reason I left early this morning was to attend a meeting of area CAP agency administrators who were in my office with a Dr. Kirk, I think, from OEO. Mr. SAMPSON. Yes, he is from Philadelphia. Mr. ROBISON. I confess I don't understand exactly what is going on downtown at OEO or what OMB's present position is on this. I understand your position, I think. But this item continues to give me a great deal of trouble and concern as to whether we should act on it before we give a chance to the HEW subcommittee of this Appropriations Committee to make a determination as to the continuation of OEO and/or the CAP program. Mr. ADDABBO. Will the gentleman yield? Mr. ROBISON. Yes. LEGISLATIVE AUTHORITY Mr. ADDABBO. What legislative authority do you have to administer OEO programs? Mr. CASSELMAN. GSA serves by law as the successor agency to agencies which are terminated. We did this, for example, with the Reconstruction Finance Corporation. We have done it with respect to other Governmental agencies. It is a general authority and precedent that we rely upon for taking over these phaseout functions. Mr. SAMPSON. As I understand it, what the administration did was to take all the programs they felt should be continued and transferred those to two major agencies, HEW and Labor. Some of the programs were increased in dollar amounts. They felt that the administrative portion of the OEO should be dismantled because it was too costly and the CAP program because it wasn't paying off. Mr. ROBISON. What we are talking about, basically and exclusively, is those grants under section 221 of the OEO Act which are called "local initiative grants," and there are about 931 individual community action agencies around the country and in Puerto Rico, and maybe elsewhere, involved. Mr. SAMPSON. So the administration has presented a budget to Congress which says: "Don't vote any more funds for that program, and give us just enough to phase out those that are in existence, phase out the administration of ÔEO, which has been too costly. Take the good programs, put them in HEW and Labor and let them administer them." Mr. ROBISON. I know that much, and that is understandable. But, since Judge Gasch's decision, there seems to have been some "fall back," on the part of at least the OEO and maybe, even the administration, with OMB somewhere in the middle, and so there are phaseout grants apparently being given on top of phaseout grants, some of which might actually run on into the first quarter of calendar year 1974. Mr. SAMPSON. Right, at least until June 30, 1974. Mr. ROBISON. Which is an extension beyond the December 31, 1973, date we earlier understood would be the termination date for all such grants. Mr. SAMPSON. We know that grants that are given, for example, in this half of calendar year 1973 could go to June 30, 1974. The $15 million we have in our budget is to phase them out. Mr. ROBISON. One of the problems involved here also, is it not, is the fact that OEO got its money for the current fiscal year by virtue of a continuing resolution rather than by a regular appropriation, and there are some questions, I think, even in the mind of the General Accounting Office as to the application of that money, and as to the intent of Congress in the last continuing resolution which gave OEO both money and authority? Mr. SAMPSON. I didn't know that. Mr. GARDNER. I know they started the fiscal year on a continuing basis. I thought there was a bill later. Mr. ROBISON. We have been running, during the whole fiscal year, under a continuing resolution for all of HEW including OEO. Mr. STEED. What I can't seem to understand, let's assume this plan is approved. You are transferring manpower training and several other functions of OEO to other agencies and the overhead will be picked up by them, and all you are getting is that for CAP. Why do you need all of that administrative overhead? What are these people going to be doing? It doesn't take that many people to run a small agency. Mr. GARDNER. That is true, but the 834 people that would come to GSA, if the plan is approved July 1 of this year, would cost in excess of $12 million in payroll to work them-work them down from 834 to 296 by June 30 of fiscal year 1974 would be in excess of $12 million. Mr. STEED. That is true if they are all kept. Why not lay them off too? Mr. GARDNER. Someone has to administer those grants that are now funded. They must be audited. There is $12 million in this estimate for audit services of grants in existence when GSA takes it over. |