PROBLEMS IN URBAN CENTERS-WASHINGTON, D.C., AND THE FEDERAL GOVERNMENT ROLE WEDNESDAY, JULY 30, 1980 HOUSE OF REPRESENTATIVES, COMMITTEE ON THE DISTRICT OF COLUMBIA, Washington, D.C. The committee met, pursuant to notice, at 9:40 a.m., in room 1310, Longworth House Office Building, Hon. Ronald V. Dellums (chairman of the committee) presiding. III. Members present: Representatives Dellums and William H. Gray Also present: Elizabeth D. Lunsford, general counsel; Donn G. Davis, Dietra L. Gerald, and Robert B. Brauer, staff assistants; James T. Clark, legislative counsel; Hugh Van A. Starkey, and Chris J. Daly, minority research analysts. The CHAIRMAN. The House Committee on the District will be in order for the continuation of hearings on the conditions of urban centers, including Washington, D.C., and the Federal Government's role in solving these problems. We are continuing the effort to enlarge our perception of urban problems by hearing from persons at both the local and national level who have devoted special attention to the problems most common to urban centers. I would like to welcome my friend and fellow Californian, Representative Augustus Hawkins, on behalf of myself and members of the staff and committee. We are deeply appreciative of your coming before the committee and welcome you. You may proceed in any fashion you choose. STATEMENT OF HON. AUGUSTUS F. HAWKINS, A U.S. Mr. HAWKINS. Thank you, Mr. Chairman. I have submitted a prepared statement to the committee which I will try to follow basically, but summarizing in some instances and elaborating in others. I appreciate this opportunity to appear before you, Mr. Chairman, because of your own career, I believe, which is certainly exemplary, and I certainly wish to commend you on conducting these hearings. Unfortunately, there is too much substance that seems to be in hearings of this nature, and we seem to be carried away, particularly the media, by that which is sensational, rather than the real substance in society, and it is for that reason I wish to commend you, because there is very little glory and honor and prestige in doing what you are doing, but I think it is a commendable thing to be doing, and certainly wish to support your efforts. The CHAIRMAN. Thank you. Mr. HAWKINS. In many months we have been groping, as you well know, for remedies to the serious economic problems facing us as individuals, families, minorities, in the major cities throughout America. It seems to me, however, that we have been applying bandages to conceal the wounds that have been deliberately inflicted. And without going too deeply into these bandaid programs, let me describe what I consider to be the more basic defects in current economic policies about which very little truth is being told. The fact of the matter is it seems to be that problems are not nearly as complex and difficult as we are being led to believe. In the past, we have met much more difficult problems and have done a much better job than we are now doing, and I refer specifically to the administrations of Franklin Delano Roosevelt, to the problems faced by Harry Truman, and certainly to the challenges faced by John F. Kennedy. In a sense, if we did nothing more than simply stop doing the things that are wrong, we would contribute a vast improvement, and it seems to me that this doesn't take a lot of creativity; it doesn't take courage; it really doesn't take a lot of rhetoric, but if we could just stop creating unemployment, increasing prices, handing out tax gifts, miseducating the disadvantaged, and cutting back on production, restricting the supply of goods and services, and failing to utilize our resources, both our human as well as our material resources. Some 14 million to 20 million Americans today are either unemployed or pathetically underemployed. We have less than an 80 percent plant utilization in America. At a time when we are talking about tax incentives to increase plants throughout the country, we are not fully utilizing those that are already in place. There are two things, it seems to me, that combine to make a situation of this nature possible. One, politics has been called the art of obfuscation, and equally in ill use, economics has been referred to as a dismal science, and it seems to me that these two defects have been crossbred in order to carry on what I think is both immoral and uneconomic and certainly, in many instances, an unlawful exercise of authority. Because from an economic point of view, it makes no possible sense not to fully utilize the resources at our command. To allow millions of individuals to be partners in our society who produce absolutely nothing, but who we attempt to maintain in income, is not supportable by any brand of economics, and certainly it seems to me it should not be supported politically. Recently we have committed two serious errors. We have covered up these political mistakes by trying to blame the failure on foreign competition, on OPEC, on the weather, and many times even on the unfortunate victims of these policies. Now, obviously all these factors have had some role to play, but we seem never to reflect on the very policies that create the problems for which those whom we elect to public office are responsible, and we don't hold accountable those who make these policies. But we have recently, as you well know, Mr. Chairman, indulged in a lot of rhetoric about balancing the budget, and in that way to somehow limit inflation. It was designed to remove the deficit, but it is now obvious that it has created a deficit larger than what might even have been anticipated, and yet there is very little explanation of it now. The approach failed, but do we go back and admit that it is a failure; do we go back and say, look, in restricting expenditures through the budget, were we wrong? No, we don't do that. We just take this failure, and then we are going to cover over that failure with another proposed failure, which is a tax reduction program, and so it just seems to me that we are really not facing the basic things that are wrong in the economy. HUMPHREY-HAWKINS FULL EMPLOYMENT BILL Now, we discussed for several years, Senator Humphrey and I, for at least 22 years with the administration, both when President Carter was a candidate, as well as after he became President, in 1977, we discussed the question of clarifying the overall economic policy, and we negotiated many differences; we made many changes. As a matter of fact, there were those who said that Senator Humphrey and I sold out; that we accepted too many amendments; that we reduced the Full Employment and Balanced Growth Act to almost a nonentity, but the fact remains that it did become law; the fact remains that the President did sign it; and the fact is that we therefore entered into an agreement as to a clearcut national economic policy that is on the statute books; that is not subject to changes from day to day; that is not subject to what happens between the White House and Camp David, or between the House and the Senate, but which has been agreed to. UNEMPLOYMENT AND INFLATION Now, I think it is important to understand what we agreed to. We agreed that the mandated goals of achieving 4 percent unemployment and 3 percent inflation, both by 1983, were achievable. We discussed this for a long time. There were those who said that we could not achieve 4 percent unemployment as an interim goal without inflating the economy, but we were able to convince the administration and the Congress that we had done so under the Truman administration, under more difficult situations when technology was not nearly as developed as it is now; that in 1961, under John F. Kennedy, that these goals, without being required by statute, were set as the objectives of his administration, and we achieved the results much better than even these which were inserted into the bill. And we debated about the time element. We started out with 18 months and to make adjustment to meet the President's desires, we made it 41⁄2 years, which would make it 1983. And what has happened? The President recently modified the timetables, unlawfully, because the act does not give him the authority to do so, only to recommend; and he is traveling in the opposite direction. It is the same as having possibly decided on a trip from Chicago to New York and you travel westward to Denver; it is just as silly as that. But you don't even travel in the right direction. We agreed to prohibit the tradeoff, to outright declare unlawful the use of the creation of unemployment in order to fight inflation, and yet this is a main weapon which has been used against inflation. AIMS FOR ECONOMIC GROWTH Third, we agreed to foster economic growth adequate to achieve the mandated goals. Now historically on a long-range basis and economic growth rate of somewhere between 4.4 and 5 percent has been accepted by practically every economist as being the minimum average which is necessary for the growth of a nation such as ours for population growth, alone as well as for technological improvements. But what has been the result? Under this administration we have had less than 1 percent growth on an annual average, and now have negative growth. As a matter of fact, during the second quarter of this year, it was down 9 percentage points. FEDERAL BUDGET AND MONETARY POLICY Fourth, we agreed to make the Federal budget and the Federal Reserve Board's monetary policy compatible with the act's objectives, that is, with achieving the goals that would be consistent with the policies and goals of the act. And what have been the results? We have had fiscal restraint, tight money policies and high interest rates. This has resulted from a Federal Reserve Board, a majority of the members, as well as the chairman, have been appointed by this administration, so we assume they were named to carry out the policy of this administration, but here is the Board which the President, himself, has obtained control over because of his appointments, and yet it has added to inflation; it has increased the deficit; and it has deprived us, including the cities, of much needed revenues. And, finally, we agreed if all of these policies which we had agreed to, if they were not fully implemented and in operation within 2 years after the signing of the act, which would be the end of this fiscal year, that the innocent and neediest in our society would not suffer in consequence of it. Now, why is it that we are not willing to say that if you give us the authority to make policy, and if you give to the private sector every type of assistance to do the job, and we do all of the things that are necessary, that within a period of 2 years, if we fail, why is it that some unfortunate individual who goes to the employment service looking for a job is told that there is no such job available; why is it that that individual, and millions such as that, must suffer as a result of those policies? STANDBY PROGRAMS In the act originally, Senator Humphrey and I had civil penalties in order to invoke in most instances where individuals responsible for the policies failed to perform in accordance with the act. The President objected to such mandates, and we said no, OK, then, in its place we will place these standby programs so that in the event the job is not done within a period of 2 years, that these victims will not be the ones to suffer, and that is exactly what we placed into the act. But what has happened? At the end of that 2-year period, the President has already recommended a reduction in these standby programs that are in the act so that, in effect, it is not only in violation of the act, but it is, it seems to me, one of the most immoral and irresponsible possible approaches to what we would think would be a very, very simple problem. NATIONAL ECONOMIC EMERGENCY Now, not content with this and in the consequence of such misguided experience, we are now faced with a national economic emergency, and we have to face, it seems to me, not as candidates, not as people outside talking about what those who are in are not doing. Most of us, including the President, are facing it as incumbents in the office, and it seems to me that we have to approach this national economic emergency in terms of leadership that can do something about it, and it seems to me it ill behooved us to be criticizing those who may be opposing us as to what is wrong with what they are advocating, if what we are doing is not obtaining results. ECONOMIC COMPARISONS, 1976 AND 1980 Now, what is the situation today, compared to what it was in the 1976 elections, and in 1977, when the current administration began, and when most of us also were in office. In 1976, under the previous administration, that is, of President Ford, the economic growth rate was 5.9 percent. Here it is we are in a campaign challenging President Ford, and I was among those, at a time when the growth rate of the country was 5.9 as compared with a negative growth today, and we were recovering from a deep recession in that year, as you will recall. In 1980, we have a negative growth rate. In 1976, the unemployment rate was 7.4 percent, and it was declining, and we were criticizing Mr. Ford because of the high unemployment rate. It is now 7.7 and the President projects the rate will rise to 9 percent and remain at 8.5 percent for another year. Now that is substantially higher than the current rate, and it certainly is more than 1 percent higher than under the previous administration that we said was failing us. These statistics do not adequately describe the human and emotional suffering that is caused by this lack of a healthy economy. Prof. Harvey Brenner, of Johns Hopkins University, has found that a 1-percent increase that is what we are talking about now, an added 1 percent, another 1 percent, and what it means-it means according to his studies, and these studies are backed up by the National Institute of Health, by studies in Cook County, Ill., and Ann Arbor, Mich., and others that time would not permit me to elaborate on, but they are substantially backed up, that a 1-percent increase in unemployment rate that we are now talking about will mean 20,210 deaths from cardiovascular disease, 495 deaths from sclerosis of the liver, 920 suicides, 647 homicides, 4,227 first-admissions to State hospitals, and 3,340 admissions to State prisons. |