Another instance of bureaucratic circumvention of Federal laws is evident in the rules developed for the Comprehensive Employment and Training Act. In 1974, Congress amended the Fair Labor Standards Act extending minimum wage coverage to public employees. This law provided that in 1976, the minimum wage for public employees would be $2.20 while the private sector rate would be $2.30 per hour.

Later in 1974, Congress enacted the Comprehensive Employment and Training Act which allocated funds to local governments to hire the unemployed for public service jobs. The Department of Labor, in making regulations for this program, declared that all employees in the program must be paid the private sector minimum wage rate. Clearly, this administrative rule conflicts with congressional intent of the Fair Labor Standards Act. The result has been that some smaller cities have regrettably laid off employees hired under this special program rather than increasing all regular employees wages by $.10 per hour.

So, because the Department of Labor bureaucrats chose to ignore the Federal minimum wage law, they are effectively undermining their own program designed to reduce unemployment.

I could give you many, many more of these examples. However, I hope these will suffice to impress upon you the extent to which local officials' hands are tied by bureaucratic redtape. There are many, many examples that I could give you, of horror stories, whatever you want to call them, as far as bureaucratic redtape in dealing with Federal agencies is concerned.

Let me say we have estimated, as a ballpark estimate, that Federal regulations are costing Georgia municipalities $100 million each year. Many laws are being enacted to force localities to meet certain standards and in some cases, funds are not appropriated for this. If the standards are met, it is up to the local government and the local taxpayer to finance these regulations. The recently enacted Safe Drinking Water Act may cost Georgia local governments $300 million --but not 1 penny has been appropriated to assist localities. If Washington is unwilling or unable to supply funds needed to finance the requirements it mandates upon local governments, then it should change these mandates or devise some alternate funding mechanism. Earlier, I stated that the two greatest problems we have with the Federal bureaucracy are the multitude of unmanageable categorical grants and excessive regulatory intervention in local affairs. Realizing that the solutions to these problems will not come easy, the Georgia Municipal Association recommends the following actions:

1. The enactment of Federal law requiring Congress to review and approve all rules and regulations promulgated by Federal administrative agencies.

I would like to add here that we feel this concept might possibly have to be broadened because a lot of the programs I am talking about do not have municipal sanction and yet the problems of bureaucratic abusc is evident and very severe.

Senator NUNN. We have two versions. One would include all and not just criminal sanctions. Mr. Levitas has more hearings than I have and he may want to comment on that.

Congressman LEVITAS. The legislation which will be reported out. of the House Committee will apply to all rules and regulations.

Senator NUNN. The Senate bill I have introduced does that also. It applies to all rules and regulations, not just to those carrying criminal penalties.

Mr. CALVIN. That is very good to hear. We are certainly very much encouraged. Let me conclude.

2. The increased utilization of block grant programs to implement specific national policies.

3. The increased utilization of general revenue sharing as a means of redistributing the Federal income tax; and

4. The reimbursement to municipalities for costs incurred in complying with Federal laws or in meeting administrative standards executed pursuant to Federal law.

Mr. Chairman and distinguished committee members, we respectfully contend that these measures would greatly alleviate our "bureaucratic nightmare.”

General revenue sharing is an excellent example of how Federal dollars can be instantly and effectively put to work without wasting valuable time and money on red tape. And block grants are certainly a step in the right direction.

Most importantly, however, we strongly feel that Congress must maintain control over bureaucratic discretion. We cannot afford to allow legislative authority to slip away to the executive branch of Government.

The bureaucrats, however well intentioned they may be, are not elected and they do not represent the view of any constituency. As such they will not be responsive to the needs and desires of local government officials and the citizens they represent.

We realize the solutions to these are certainly not simple and it is nothing that could be solved overnight but I would like to make the following regulations as above stated.

We appreciate very much your allowing us this opportunity to testify on behalf of the Georgia Municipal Association. We are very concerned about the problems of bureaucracy but we do think, because of your efforts, that there is a light at the end of the tunnel. We are not giving up hope. Thank you very much.

Senator NUNN. Thank you very much, Mr. Calvin.

Congressman LEVITAS. I have one question. There has not been much discussion this morning about the environmental impact statement problem and that does pertain primarily to governments, although in some areas, private business, but mainly to government and while I know Senator Nunn and I both have a great deal of interest in the environmental protection, I have heard some reports about the environmental impact statement as being a problem in itself.

What Senator Jackson originally conceived when he sponsored in EPA, the National Environmental Protection Act, as being a simple 1 page or 2 document, talks about the environmental impact before the project is put in, has now become a rather significant undertaking.

I have seen environmental impact statements, for example, for airports, that were taller, than the average person, when the paper

was standing up. I have also heard and I would like to find out if you have any information on this, that for the usual highway construction project, the environmental impact process statement may take as long as 2 years.

Let me rephrase that. Takes not less than 2 years to meet.

Do you have any information on that and what your experience has been for your municipalities for the time and preparation of the environmental impact statements?

Mr. CALVIN. Congressman, no, I do not have any information specifically on the highway project and I am not familiar with that estimate of a minimum of 2 years to meet the environmental impact statement but let me say that community development block grant does require environmental impact statement. It requires it if a local government wants to rehabilitate houses which, certainly, it seems to me, would have no adverse effect on the environment.

Now, from what I am told by most of our municipalities this is the major delay in community development block program and is the reason why they have to hire a consultant. It is too complex for most local governments to do it, they have to hire a consultant to fill out and evaluate this impact statement.

Now, HUD is saying that the cities which have not spent their money by, I believe February 13 or 14, sometime around now, if they have not spent 10 percent, excuse me, if they have not spent the average amount that all other cities have spent on their block grant programs, then they will be prohibited from participating in the program the second year.

Because of the environmental impact statement, most of the smaller communities have not spent this amount, so, again, it is a vicious circle. The red tape is not permitting the requirements to be met and therefore, these cities are being eliminated from the program.

Thank you.

Senator NUNN. Thank you.

Senator Talmadge has had a representative here all morning. He has indicated his keen interest and he indicates he wishes he could have been here. He worked very closely with me on this legislation and has indicated his full and total support for this kind of legislation. so I did want to make that plain for the record.

Does the association of mechanical contractors have someone here today? We would be pleased if they did. We do not have anyone else on the witness list.

If anyone has testimony they want to submit for the record, we will have the record open for at least 30 days, so that we can add to this testimony if anyone has any additional comments.

Any other people that have comments or any kind of written testimony?

Yes, sir.

TESTIMONY OF KEITH SKELLEY, SECURA INSURANCE CO.,

ATLANTA, GA.

Mr. SKELLEY. Senator, I am Keith Skelley. I received a personal letter from you, inviting me to attend the meeting and I have corresponded with you.

Senator NUNN. Yes, sir; we have.

Mr. SKELLEY. And with Congressman Levitas. After hearing all of these stories, I feel that I am not in as bad a shape as I thought I was. I would like for the record, just to give you a situation, where I am fighting an Agency of the Federal Government.

Senator NUNN. Mr. Skelley, give us your address.

Mr. SKELLEY. Keith Skelley, president of Secura Corp., here in Atlanta. The company is owned by 759 Georgians-principally savings and loan people-throughout the State. My problem is a very simple one. The Federal Home Loan Mortgage Corporation has imposed a regulation that a mortgage guaranty insurance company of our type must have $5 million of capital and surplus in order to operate under their rules. No State requires anything like this amount of capital and surplus. As a matter of fact, my company would be admitted in at least half the States of the United States, with its present capital and surplus, but they have imposed this regulation and it has automatically put us almost out of business. We can only do business with about 15 percent of the market in the 12 States where we are licensed to do business. If this were changed, I could now be employing three times the number of people I am now employing, and income to the State of Georgia would multiply 10 times. Just because some regulator up there decided that $5 million was a magic number, I am practically out of business and, of course, I have written both you gentlemen asking for help. I do not know how you beat those people in Washington. I do not know what to say to them to prove that there may be another way of solving the problem.

Senator NUNN. As a start, I will ask Bill Goodwin on my staff to get on the telephone. We will get you hooked up directly with one of the people over there and see if we can cut across some of the delay in correspondence. Many times correspondence just takes forever. We will be glad to do that.

Mr. SKELLEY. All right. As I say, after hearing all of the other things, I am not in bad shape at all. Some of the other problems are terrible. A final suggestion: Why don't you fellows cut the money off for those bureaucrats? Then we won't have these problems.

Senator NUNN. That is easier said than done. I am not sure that I represent the majority viewpoint in the Senate and House on this subject at all times. I know I am on the minority on many, many

occasions.

Mr. SKELLEY. I know the voters will be on your side.

Senator NUNN. I ask you to remain and give us your telephone number so we can get you some action beginning next week.

Yes. sir; please come up.

TESTIMONY OF H. DILLON WINSHIP, JR., PRESIDENT, GEORGIA HIGHWAY EXPRESS, INC., ATLANTA, GA.

Mr. WINSHIP. I am sitting here, listening like you have. and I want to commend both of you gentlemen for what you are doing. I am proud two Georgians are involved in this particular movement.

Nobody has brought up the subject of the Interstate Commerce Commission today. I am covered by the Department of Transportation, Interstate Commerce Commission and all of the other bureau

cracies we have been talking about today. I am not here to defend the Interstate Commerce Commission, but I am here to say one thing. There are certain regulations in this country that are vital to this country. The obligation to serve the entire community is brought about by this type of regulation. We, of course, get certificates to operate, and as a result of that, we have a responsibility to perform a service. Today, I could pick up in Atlanta, Ga., 80 percent of my revenue with 50 percent of my drivers. Under a deregulated economy, I would not have but 50 percent of my drivers out there, I would not have the necessary remaining drivers out there to serve every customer in the city of Atlanta. I certainly would not be serving Pine Mountain, Ga., if it was not for the responsibility the Interstate Commerce Commission lays on me to serve. I am not here to defend the ICC, but I am saying that with that ICC responsibility, the carriers are forced to serve every community in Georgia. If they are not served you will end up in an untenable position; the public will be irritated; and we will end up with a more stringent type of regulatory system than we have today. We have been living with these people for 40 years. They are built into our accounting system. I think everyone can stand one bureaucracy plus the IRS. The others have caused the grief. I hope you do not throw the baby out with the bath water.

Congressman LEVITAS. Mr. Chairman, we have talked about this problem previously and, of course, the legislation to which you refer is before one of our subcommittees and we probably will have a hearing on it in the next month or so. I am very cognizant of the problems to which you refer, but I wish you could get some of those high-priced public relations people or whoever you have got working for ATA or some of these other organizations, and see if you can come up with the term that is different from deregulation. Frankly, this is-they are two different types of things and most Americans today, businessmen in particular, would like to be deregulated a heck of a lot more than they have been and here we have a substantial segment of the American business community saying: For goodness, do not deregulate us. It is confusing to Members of the Congress-just the language of it and I know it is confusing to the public. Though this may sound trivial, I honestly recommend that you ought to come up with another way of explaining that program, instead of saying: Just do not deregulate us.

Mr. WINSHIP. We think there is a great deal that can be done with the ICC-a great deal has already been done-but we can have better regulations under the existing law, without throwing out all of the ICC.

Senator NUNN. Thank you. Our legislation does really not get into that. The Government Operations Committee, the full committee, is very much involved in the overall deregulations program, as you phrased it.

We appreciate your being here and appreciate your testimony.
Mr. WINSHIP. Thank you.

Senator NUNN. I want to thank, before we close: Rochelle Jones, professional staff member; Marrielou Howser, our chief clerk; Robin Ellis, the minority clerk, who works for Senator Javits, as ranking