STATEMENT OF HON. JOHN A. BLATNIK, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MINNESOTA

Mr. BLATNIK. Mr. Chairman, I thank the Chair and my very dear friend Judge Brown, from Georgia, for patiently staying here through another long morning after days of hearings on this legislation.

If I may have permission, Mr. Chairman, I have a prepared statement. I would like to have it filed in the proceedings of the hearings, and I will make a brief summary statement.

Mr. SPENCE. That may be done.

Mr. BLATNIK. At the outset, I am in wholehearted support of H.R. 5944, which was introduced by the chairman of this committee.

I do hope, however, that the areas of public facilities eligible for assistance under the bill can be broadened along the lines of S. 3497 which we lost on the floor of the House a year ago by a narrow margin of 12 or 14 votes.

I think the record will show how the people felt on this. There are few members who voted for this bill who were not reelected, and there are many who voted against this bill last year who were defeated-many of them veterans of the Congress.

Now, on the problem itself, Mr. Chairman. I just cannot understand why a society with the great political freedoms and the great economic productive capabilities that we have in this country, should somehow be seized by, or yield and submit to a self-induced paralysis, and assume that nothing can be done when a rather considerable segment of its population finds itself without employment.

The national unemployment average may not be too high, but you have got to look at the thing not as a national average, but at these pockets where unemployment does exist.

Such a situation exists in northern Minnesota, which produces more iron ore than any area in the world. This iron ore is the lifeblood of the steel industry, and steel is basic to the entire economy, both for defense needs as well as civilian and domestic needs. However, cutbacks in steel production last year and ever-increasing imports have reduced the demand for our iron ore. As a result, we have thousands upon thousands of men who have not worked a day in the past 16 or 17 months. Certainly they could be utilized to upgrade badly needed, thoroughly justifiable community facilities.

While I heartily endorse H.R. 5944, I feel we should not limit its provisions to the few types of projects although they may be the most important ones.

It may happen that a municipality has a good local hospital, and has just provided, perhaps, for good waterworks or sewage facilities. But they may badly need to revise their street structure and parking lots, and traffic congestion, as part of the problem of public transportation which is of a critical nature and of great importance to the economics of a community.

We ought to give a little more leeway to these municipalities who know their needs best, who suffer from inability to finance them, and also we ought to take into consideration that many of them suffer from a severe unemployment problem.

39807-59-13

This program would upgrade communities all over the country, and would generally improve communities throughout the country, rather than have them further run down through neglect, disuse, and obsolescence, while millions of unemployed men and women, eager to work, just can't find employment.

Mr. Chairman, that concludes my statement. I do hope that very soon we get a workable bill.

I would just like to make one comment, even though it may be construed political-be that as it may, I make it wherever I go.

I think that we in Congress, and that includes Members in both parties, ought to come out with the soundest bill possible, and present it to the administration, and; if the administration vetoed the bill, then the responsibilty lies on the steps of the White House. And after the veto, if it comes back, and we are compelled to take a watered-down bleached out, anemic program, guided largely by what we think the administration will accept, we will do that, too, and the people will know where we in Congress stand, and where the administration stands.

(The prepared statement of Mr. Blatnik is as follows:)

STATEMENT of CongressMAN JOHN A. BLATNIK

Mr. Chairman, I appreciate this opportunity to testify today in support of H.R. 5944 and other bills to expand the public facility loan program of the Community Facilities Administration. You are to be congratulated, Mr. Chairman, for again taking the lead in this all-important field.

Last year this committee favorably reported S. 3497, the Community Facilities Act of 1958. The "primary and urgent" purpose of the bill, according to the committee report, was to provide a "much needed stimulus to our lagging economy *** and to reduce the alarming ranks of the unemployed." The bill was considered an antirecession measure and part of the overall Democratic program in the 85th Congress designed to alleviate the effects of the 1958 recession. Its defeat on the floor of the House, due to overwhelming opposition from many of our colleagues who were later involuntarily retired by the voters in November, was a serious setback. As a result of your leadership, Mr. Chairman, we now have another opportunity to right that wrong.

Although the economy has certainly gained strength since last June, when this committee first reported a community facilities loan bill, the need still remains, in many areas of our country, for a bill of this type to "reduce the alarming ranks of the unemployed" who are becoming more and more concentrated in areas of pocket depression and chronic unemployment and underemployment. Apart from these economic considerations, however, the enactment of H.R. 5944 and similar legislation is warranted from a social and community standpoint. This type of program would assist the Nation's local communities which have been losing ground in their struggle to provide the community facilities and public works which our country desperately needs. As this committee pointed out in its excellent report last year. "Every structure, every facility produced under the proposed program will have lasting merit and utility and will contribute to our national stock of essential community facilities."

There can be no questioning the fact that the need for this type of program exists. In a 1957 report entitled "Planning for Public Works," prepared under the direction of the Special Assistant to the President for Public Works Planning, we find this language:

"Since few expected the past 10 years of growth, few prepared for it. Particularly in public works, preparation was inadequate. In almost every category of public works, severe shortages have arisen. Our highways, water, and antipollution facilities, hospitals, transit systems, school buildings, and others have fallen, on the average, below minimum acceptable requirements. For State and local governments alone, using 1954 data, conservative estimates reveal that these governments require $204 billion worth of public facilities in the succeeding 10 years. Even then, the Nation's public works program would not be completed; our population growth will continue; it will rise at least 38 percent between the

years 1955 and 1975 alone. We can be sure that the rate of public works construction should at least keep pace with this growth. It may even need to exceed it substantially."

Unfortunately, the President obtains his advice on public works from sources other than his public works advisers and so has advocated an across-the-board cutback in public works construction for the coming fiscal year. This should not however, deter us in Congress from recognizing the need and doing something about it. The following chart, which I request permission to include in the record at this point, shows graphically the extent of the problem and the need for action at the Federal level to encourage and stimulate local and State activity in the wide field of public works and public facilities construction.

Mr. Chairman, the principal of Federal assistance to the States and local communities for the development and construction of certain public facilities is well established. Highways, hospitals, airports, sewage-treatment plants, and many other local facilities today receive Federal assistance. Indeed we would not have come as far as we have without such assistance. The Community Facility Act of 1959, as embodied in H.R. 5944, introduced by Mr. Spence, recognizes that principal and extends it in the form of loans, not grants, to make possible the maximum State and local effort in the construction of needed public facilities.

I have introduced H.R. 5382 which is similar in many respects to H.R. 5944 and last year's bill S. 3497.

This bill would rewrite title II of the Housing Amendments of 1955, which authorized Federal loans for public facilities. The bill would make the following major changes in this loan program:

(1) The fund for community facilities and public-works loans would be increased to $2 billion, of which $400 million would constitute a revolving fund. (This is identical to S. 3497). According to the Committee on Banking and Currency the $2 billion fund is the "minimum amount required to meet the need for an expanded community facilities and public-works program." Proceeds of loans extended under the "old program" of the 1955 act will go into the $400 million revolving fund.

(2) The formula for computing the maximum interest rate to the borrower would be revised to produce a maximum rate, under present conditions, of 2% percent. (This is identical to S. 3497.)

(3) The maximum loan term would be raised from 40 years to 50 years. (This is identical to S. 3497).

(4) The existing program has been limited in practice ot communities of 50,000 population or less; the bill extends the program to all municipalities and other political subdivisions of States without regard to population. identical to S. 3497).

(This is

(5) No financial assistance shall be extended unless it is not otherwise available on equally favorable terms and conditions. (This is identical to S. 3497.) (6) The bill prohibits financial assistance for public facilities which would compete with existing public utilities which are privately owned and subject to State regulation, unless there is a need for an increase in the services involved in the area where the public utility is located and such need cannot be met by the public utility through its existing facilities or through an expansion which it is prepared to undertake. (This is identical to S. 3497.)

(7) Eligibility would be extended specifically to a wide range of facilities and projects, including the construction, repair, and improvement of public streets, sidewalks, highways, parkways, bridges, parking lots, airports, and other public transportation facilities; public parks and other public recreational facilities; public hospitals, rehabilitation and health centers, and public nursing homes and public convalescent homes; public refuse and garbage disposal facilities, water, sewage, and sanitary facilities, and other public utility facilities; defense facilities; public police and fire protection facilities; public wholesale farm produce markets; public schools, libraries, and offices, and other public buildings; and public land, water, and timber conservation facilities. (Except for schools, this is identical to S. 3497.) A first priority would be given to projects located in labor surplus areas which the administration determines could not be undertaken without the bill's assistance, and a second priority would be given to other projects which the administration determines could not be undertaken without the bill's assistance. S. 3497 contained only a priority for projects which could not have been undertaken with the assistance of this act. This bill provides for a "super" priority when such a project is located within a labor surplus area.

(8) Private nonprofit hospitals and public schools would be made eligible for loans under the bill. Schools were not eligible under S. 3497. With regard to public hospitals and sewage treatment works, the Surgeon General must certify that projects eligible for a loan under this bill are in conformity with applicable State plans approved under existing hospital construction and water pollution control acts before the loan can be approved. S. 3497 contained similar language with regard to hospitals. This bill adds a similar restriction with regard to sewage treatment plants.

(9) The amount of the authorization which could be used in any one State would be limited to 19 percent. (This is identical to S. 3497.)

(10) The prevailing wage and overtime requirements of the Davis-Bacon Act would apply to projects financed under the bill. (This is identical to S. 3497.) In addition, the bill would increase the authorization for Federal planning advances under section 702 of the Housing Act of 1954 from $48 million to $98 million. These interest-free Federal advances will provide a shelf of planned public works which might be placed under construction quickly should the economic situation make such action desirable. In addition, the bill directs the Housing and Home Finance Administrator to make a study to determine the extent to which additional funds are needed to finance public works and public facilities, and to report to the Congress within 90 days. (S. 3497 provided for increased advances but not for the 90-day study.)

In closing, Mr. Chairman, I urge the adoption of the type of program contained in H.R. 5944 and H.R. 5382. So many today are concerned over the debt we will leave to future generations. If we are really concerned with the future generations we can show it not by tearful hand-wringing speeches about the national debt but by firm, positive action which will enable those future generations to meet the problems of the future with assuredness and hope, not despair due to our neglect today.

Mr. SPENCE. We have limited the bill, in order that we might be insured of having a very good chance of having a law. And I think we have selected the greatest basic needs of the municipalities, which are adequate water supplies and adequate sewage-disposal facilities. I felt that it would jeopardize the bill to place in it all of the other community facilities that might be included.

I think water supply and sewage systems are better adapted to revenue bonds than any other community facilities. They are indestructible; their life is not for a few years, but for a century or more. And I thought most of the cities could resort to this method to obtain these much-needed facilities which mean so much to the health and happiness of the people of our country, and also to our industries. If this bill becomes law, it will be the means of furnishing adequate water supply for industry, which industry needs so much. That will also mean increased employment.

I thought it was a very good idea to so limit it that the bill might become law.

I understand, notwithstanding your views on the enlargement of the program, you are heartily in favor of this bill as it is?

Mr. BLATNIK. Yes, sir.

Mr. SPENCE. I knew you would be, because I have known of your activity in cleaning up the rivers and endeavoring to get a potable supply of water to the people of our communities.

If there are no further questions

Mr. BROWN. I just want to say that I consider the gentleman one of the most outstanding Members of Congress.

You realize that a certain amount of the funds are earmarked for smaller communities?

Mr. BLATNIK. Yes, sir.

Mr. BROWN. You are in favor of that, too?

Mr. BLATNIK. Yes, sir; I think it is very important.

Mr. SPENCE. Thank you, Mr. Blatnik.

Mr. BLATNIK. Thank you, Mr. Chairman.

Mr. SPENCE. The committee will be in recess, to reconvene Monday morning at 10 o'clock.

(Thereupon, at 12:17 p.m., the subcommittee was adjourned, to reconvene at 10 a.m. Monday, April 27, 1959.)