not included in the unemployment figures along with the farmworkers that do not have unemployment insurance.

I would like to point out to you the plight in one of my small cities of 14,000 people.

They are under a water pollution control order from the State to cease polluting. They have reached their bond limit and the facilities necessary to meet the requirements of the State of California will cost them some $16 million.

They can get help from other laws that we have passed; many of them will provide a health or water pollution control, but still the gap between their ability and those laws, and the health that those laws will provide, is significant and this kind of legislation will permit them an opportunity to meet this public works problem. That is only one of the very significant examples that I have in my district.

Now, I know that the Congressmen that come after me will have other examples to show you how widespread the problem is.

I would like also, Mr. Chairman, consent to include after my statement, a statement of the majority leader, Hale Boggs, who has presented long testimony in support of this legislation.

Thank you, Mr. Chairman.

The CHAIRMAN. Congressman, thank you for your statement, and again I would express our true appreciation, certainly the Chair's deep appreciation, for the excellent leadership you have given in spreading an awareness of this problem and localizing the bipartisan and nonpartisan support of this proposition.

Without objection, the statement will be following your statement. Mr. EDMONDSON. Mr. Chairman ?

The CHAIRMAN. Mr. Edmondson.

Mr. EDMONDSON. Mr. Chairman. I consider the gentleman from California, Mr. McFall, one of the outstanding Members of the House of Representatives. I would, at this time, salute him for his very important role in connection with this legislation; and also salute his fine. staff man. Lee Wilbur, for the excellent work he has done in preparing the material on this subject.

Mr. HAMMERSCHMIDT. Mr. Chairman?

The CHAIRMAN. Mr. Hammerschmidt.

Mr. HAMMERSCHMIDT. Mr. Chairman, I, too, would like to thank our distinguished colleague for his leadership, his hard work, and his sincerity toward helping to seek a solution to the severe unemployment problems in our country as we change from a wartime to a peacetime economy. I know of his great, dedicated effort in this direction. Thank you.

Mr. McFALL. Thank you.

Mr. CLAUSEN. Mr. Chairman?

The CHAIRMAN. Mr. Clausen.

Mr. CLAUSEN. I join my colleague, Mr. Hammerschmidt, and the other members of the committee who have expressed their appreciation to my good friend from California, Mr. McFall.

As you know, I cosponsored this legislation in the last session and have done so again in this session of the Congress; and from a reading of the testimony you have provided in depth-there is one point that you have raised here that in light of the previous colloquy be

tween myself and Mr. Meany-it seems to me that you and I are in pretty much agreement on what needs to be done and you tend to advocate the position taken by Arthur Burns, the Chairman of the Federal Reserve Board, and that you propose legislation to establish a temporary emergency guidance board to set up wage-price guidelines. Do you have enough time at this point to elaborate on this? Because I would like to discuss this in depth with you but, for purposes of the record, could you elaborate on your testimony?

Mr. McFALL. What we have in mind, this legislation has been introduced by John Monagan, of Connecticut, and myself, and perhaps several others.

We would provide a temporary wage-and-price guideline board that would provide a discipline, to use the term the administration uses, for the country showing just what needs to be done to keep inflation under control. It would not be the kind of legislation of compulsory controls, but it would show the kind of leadership that I think the Congress and the President need to show the country, what should be done.

What is the situation with respect to wages? Is the situation, as Mr. Meany says it is, and I think it is, in the building industry? It is not wages that have gone up that cause the increase in costs in construction.

What is the situation with reference to prices?

I believe, and I think my friend from California agrees with me, that the people of this country want to prevent inflation; they want to curb their requests for wage-and-price increases.

If they knew what is fair, what everyone could agree with as in the interest of the country.

I would like to see hearings before the Banking and Currency Committee, and perhaps before this committee, we can get the hearings quite quickly before Mr. Patman's committee, and I think that those hearings alone would show the situation.

Mr. Meany and his people could come in and show what they think ought to be done on wage and price guidelines in this country, why they think inflation, as you discussed with them, is going up. And perhaps you would join with me in introducing that legislation and we could get a little more pressure behind it.

Mr. CLAUSEN. It intrigues me a great deal because it tends to follow what has been previously announced by the administration in the form of an inflation alert, a kind of board that would focus attention on those areas that are the prime contributors to the inflationary trend. I think that this seems to follow the same pattern, and I believe it tends toward bipartisan effort as well as the executive legislative cooperation.

Mr. McFALL. This is what you might call the sophisticated holding with some kind of an understanding of what the standards of the job holding ought to be.

We could, both of us, probably make some partisan statements about what the administration is doing, and we might disagree as to what the administration is doing, and whether or not it is in the interest of the country, but I do not think that is what we need.

I think what the country needs is an examination of what would be helpful in holding down inflation and at the same time passing this

kind of legislation that would improve employment in this country. Mr. CLAUSEN. I think it would be very helpful.

I have before me in the most recent issue, of March 22, of the U.S. News & World Report, an item that suggested that there are big boosts ahead as a result of negotiations in the so-called construction of pay. They range all the way from a low of 11 percent on up to, I believe, a high of 28 percent; and so all of these things have to be taken into account and I think it has to be comprehensive enough so that the public or private sector-and this means management-labor and Government really has to adopt something in the line of ceiling, guidelines, so that we get rid of this partisan bickering on who is at fault.

Frankly, there is enough room for everyone to take a little blame. Mr. MCFALL. Well, that is true, a little credit, a little blame for everyone. And this particular legislation, we will find those who will oppose it because they say, as you intimated, that it is inflationary, perhaps, even though all of us can argue the other side, all of the good that will come out of it, if we had some kind of understanding in this country and this discipline that we talk about, as to what is good for the country, if we had an understanding, as pointed out by Mr. Meany-and I agree with him-but if we could agree as to whether or not what he said was true, that it is not wages in the construction industry that is causing the increase.

If the country could understand this, then perhaps it would be good for the country. Perhaps it is the other way.

I agree with Mr. Meany, but perhaps it is the other way. But this is the kind of understanding that the country needs. The people are waiting for this kind of understanding, and I believe they would be willing to go along with it.

Mr. CLAUSEN. Well, you have, of course, heard both in our mutual exchanges as well as my comments to Mr. Meany about this transitional inflation program.

For instance, Mr. Blatnik, who has an economically depressed area, just as you and I have, I think, really, we are all in the same boat and it has to be bipartisan, but the fact of the matter is this, Mr. Chairman; if you continue to pour money into those areas and, believe me, if we cannot in this computerized age determine those areas that are making the prime contribution to the inflationary situation, then there is something wrong with some of the people who I think are mathematically oriented.

Now, we can do this, and I think we can arrive at statistics both from labor and Congress and get to the meat of the coconut, and that is, dollars put into your district in Minnesota are not going to have the same multiplier effect that those you pour into New York City, and all you are doing is adding to the inmigration, adding to the problem, adding to the cost and the limited supply of dollars that we have, we are not going to get the job done.

We need to reverse the flow of those funds out of these areas, creating new economical centers, revitalizing those that are already depressed, and that is the reason this has to be separated into those two categories.

Would you agree with that statement?

Mr. MCFALL. That is what the purpose of this legislation is. We are only hitting 30 percent, I think, in this legislation. If you hit them all,

the amount of money that would be involved here would be billions more and when we discussed this back 8 years ago, the administration at that time did not want to admit-a different administration-did not want to admit, and the chairman will tell you, they wanted the legislation-they wanted it, but they did not want to come out as being in favor of it.

And I think it helps to do exactly the thing that you say is necessary; and I agree with you.

Mr. CLAUSEN. Actually, the Chair and I discussed, for instance, the concept of expanding EDA, too.

The CHAIRMAN. That is an excellent point. If we could just proceed on, we will certainly have to make a determination from the point you raise which I hope can be done in executive session or perhaps during the interrogation of witnesses. But we must proceed, as we have some very good friends who also are interesting witnesses and who have waited for too long.

Any questions of the Congressman to my right?

Mr. Anderson?

Mr. ANDERSON. I would like to commend Mr. Blatnik, chairman of the Public Works Committee and as chairman of this Special Subcommittee on Economic Development for calling hearings on accelerated public works legislation. It is certainly needed legislation of the highest priority. The Federal Government must act immediately in this area and the related bills we are considering at these hearings are a positive approach to a pressing problem.

I am proud to be a cosponsor of H.R. 4400, introduced by my able and distinguished colleague from California, Congressman John McFall. This bill seeks to amend the Public Works Acceleration Act to make its benefits available to certain areas of high unemplovment and to authorize additional funds for this act. I congratulate him for the leadership he has exhibited in proposing this timely legislation. He and the members of this distinguished committee can be assured of my support in bringing this needed legislation to enactment.

Mr. Chairman, the economic situation in recent years has represented an unusual challenge. The long boom during the sixties saw a remarkable increase in real output with unemployment decreasing to its lowest in 15 years. In 1968, GNP was increasing at a rate of 5.4 percent and, by early 1969, unemployment was reduced to 3.3 percent of the civilian labor force. However, this boom turned into accelerating inflation because of the large increase in Government expenditures, both domestic and in support of the Vietnam war, coupled with the tax cut of 1964. Consequently, the main economic problem today is to slow down the rate of inflation while keeping unemployment at a minimum. The Nixon administration's policy for this economic problem has commonly become known as the "game plan."

There has been more than sufficient time to test the administration's cherished "game plan" to control inflation and restore full employment and, in spite of all the optimistic pronouncements of the administration's spokesmen over the past year, it has been impossible to mask the sharp economic decline which this Nation experienced since January 1969. When this administration took office, unemployment stood at 3.3 percent or 2.6 million people. As of January 1971, according to Paul W. McCracken, Chairman of the Council of Economic

Advisers who testified at the Joint Congressional Economic Committee, the unemployment rate stands at 6 percent-the highest level in 9 years. This unemployment rate moved up from 3.5 percent a year ago to 5.8 percent last November. This rise affected almost all categories of workers: adult men and women; white collar and blue collar workers.

The Long Beach area of Los Angeles, is a good example of this steady unemployment rise. In August 1970, the rate was 6.5 percent; September 6.2 percent; October 6.2 percent; November 6.6 percent; December 6.9 percent; and January 7 percent. It is very disconcerting to compare these rates with the 1969 rate of 3.7 percent.

All of these statistics in human terms, mean that tens of thousands of more workers drew their last paychecks, that the already long lines at State employment service offices grew still longer, and that the word from employers was "no help wanted."

According to the preceding statistics, the No. 1 domestic problem facing this Nation is obviously to put people back to work. Every unemployed individual who is willing and able to work must be afforded that opportunity. The general expansionary budget is not adequate to cope with our present economic paradox of simultaneous inflation and recession. In other words, the general policy must be replaced by the more specific; the long-range cure must be replaced by one of limited duration, and the new concepts, must be replaced by a proven method of assistance if unemployment is to be decreased.

The Randolph-McFall bill embodies in fine form all three of these necessary changes.

First of all, the bill is not meant to be a cure-all solution for the entire inflation-unemployment problem. Instead, the accelerated public works bill is aimed specifically at the heart of the unemployed areas of the Nation. The bill is designed to assist economic development areas, major labor market areas, and "pockets of poverty" that have a history of persistent unemployment. It would provide quick, responsive aid to those target areas which may be best described as having a high, substantial and persistent rate of unemployment.

According to the Randolph-McFall legislation, 80 percent Federal grants-in-aid would be asked to assist such "eligible areas." For the purpose of this bill, "eligible areas" are basically those that (1) the Secretary of Commerce designates as "redevelopment areas" for the purpose of the Public Works and Economic Development Act in which the Secretary of Labor finds that the annual average rate of unemployment has been at least 150 percent above the national average for 1 of the 2 preceding years and (2) standard metropolitan statistical areas in which the Secretary of Labor finds that for at least 3 consecutive months the average unemployment rate has been 150 percent above the national average for the preceding year.

The Department of Labor's annual review listed 470 redevelopment areas, cities and counties as "eligible" for assistance under title IV of the Public Works and Economic Development Act of 1965. This number increased to 623 September 1, 1970, and as of February 24, 1971, to add to this already desperate situation, the Labor Department found a total of 679 areas experiencing "substantial" unemployment. "Substantial" unemployment means the area has a jobless rate of 6 percent