H.R. 4400 calls for 80 percent Federal grants-in-aid and is tailored to assist those communities that:

(1) Have a firm plan for a badly needed public facility; (2) Are able to finance the local share of construction; (3) Are ready to begin almost immediate construction, and (4) Can guarantee that a high percentage of the construction cost will be labor.

The goal of this legislation is to make local areas more attractive to industry by building such vitally needed environmental related facilities as sewer and water plants, and so forth, as well as municipal buildings without overburdening the local tax rate.

All of us are well aware of the financial plight of most every community in the Nation in these days of rising costs and unrelenting demands for public services.

In order to continue even the present services, let alone modernizing and improving them, the communities have been forced to increase their tax rates to the point of no return. In many cases, they have reached their legal-if not their practical-limits.

There is much discussion today of revenue sharing. The pending bill is the kind of revenue sharing which, it seems to me, makes sense. Here the Federal Government can assist on specific projects which meet reasonable criteria.

Furthermore, the provisions of the bill require that the community itself do its full share in helping itself in these trying times.

The proposal before the subcommittee is not new. It has had successful experience in the original law during the past decade and has proven its worth.

I join my many colleageus in urging the subcommittee to give favorable consideration to the pending bills because I believe earliest possible action is essential if we are to halt the unemployment trend and provide meaningful assistance to our hard-pressed communities. Thank you.

STATEMENT OF HON. JULIA BUTLER HANSEN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON

Mrs. HANSEN. Mr. Chairman, I wish to thank the Special Subcommittee on Economic Development Programs for allowing me to present testimony for today's hearing.

I am in full support of titles I and II of H.R. 5376 and H.R. 4400, bills to extend the Public Works Acceleration Act of 1965, the public works and economic development, and to make public works acceleration benefits available to high-unemployment areas.

I think our country faces two serious crises: One is the staggering rate of unemployment-which has doubled in the last 2 years nationally. In my own State it has reached nearly 12 percent, and insured unemployment in my district has gone as high as 22 percent this winter.

We know all too well of the burdens this lays upon millions of families as they struggle to exist without regular paychecks. It also puts severe strains on the treasuries of the Federal Government and State governments as the two levels try, together, to keep unemployed families alive.

The other crisis is the time-cost squeeze on vitally needed public facilities. At a time when the need for medical facilities, for example, is rapidly increasing, the cost of those facilities is also going up. Ths will in turn, push up the cost of medical treatment and hospitalization, if demands are left unfilled.

Similarly, we face time and costs losses as we delay the construction of the pollution control facilities we are concerned with. I read in one of my district newspapers the other day that the cost of a proposed sewage-treatment plant for Vancouver, Wash., has risen $1.5 million since 1969 when the original plans and estimate were drawn up. The city is not certain how it will finance this increase. Further delays could make the total cost of the plant and its services go higher. As time passes, the cost squeeze worsens, for this and other projects. This example is only one. The problem is nationwide.

There is a backlog of nearly 9,000 applications for Federal assistance to communities to build sewage-treatment plants, plus requests for help to build hospitals, nursing homes, and public health centers. Thees needs must be met.

By providing the assistance stipulated in these bills, we will not only build the facilities to meet these needs; we will do two other thingsprovide jobs and incomes to those who have skills and need work, and help in the long run, to keep the costs of the new facilities and related services under control. The economy is helped in three ways.

The bill to extend public works benefits to areas of high unemployment insures help to areas of greatest need.

If Congress cares about the state of our Nation's economy, passage of these measures is essential.

Thank you so much, Mr. Chairman, for allowing me to present testimony today.

STATEMENT OF HON. JOHN S. MONAGAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CONNECTICUT

Mr. MONAGAN. Mr. Chairman and members of the Public Works Committee, it is a pleasure to appear before you this morning to express my support for the accelerated public works bill. I am a cosponsor of this legislation in H.R. 4900 with Congressman McFall.

The Nation's current economic woes are the direct result of the administration's plan of fighting inflation with unemployment, and since this economic strategy has not worked, the Nation is forced to live with both.

Five and a half million unemployed are again looking to Congress for quick, effective action that will put them back to work, and this bill, with almost $1 billion in Federal funds, will do much to accomplish that objective in the areas of greatest need.

I can speak from personal experience about the value of this proposal. I supported enactment of President Kennedy's Public Works Acceleration Act of 1962 which proved to be a popular and effective mechanism to hasten economic recovery in areas hard hit by the 196061 recession, and several communities in Connecticuit's Fifth Congressional District which I represent benefited greatly from the programs under the act. I am confident that the $950 million authorized by this bill for worthwhile and permanent capital projects will also be well

spent in providing jobs and programs for economically depressed areas. As was the case in 1962, this legislation is intended to provide essential public works development and construction, as well as jobs. This bill calls for 80 percent grants-in-aid, and it is calculated to assist communities that: (a) have a firm plan for a badly needed permanent public facility, (b) are able to finance the local share of construction, (c) are ready to begin almost immediate construction, and (d) can guarantee that a high percentage of the construction cost will be labor. The intent of the bill is to provide funds for public facilities that will make an area more attractive to industry without overburdening the local tax rates.

One of the areas that will qualify for funds in this bill is the Waterbury labor market area in the Fifth Congressional District of Connecticut which I represent. The unemployment rate in the Waterbury area is now 9.7 percent of the labor force, the highest jobless level in 12 years. Because of the Waterbury area's persistently high unemployment rate, the Economic Development Administration designated the Waterbury labor market area a "redevelopment area" on January 27 under the Public Works and Economic Development Act of 1965, action which I recommended in August 1970.

The EDA designation makes the Waterbury labor market area and others in the State eligible for additional Federal assistance including business loans to establish new businesses or to expand existing firms, grants to municipalities to help provide public works and development facilities, loans to assist in financing public works, loans for industrial and commercial expansion, and guarantees of associated working capital loans. The designation further makes the area eligible for grants and loans to acquire and develop land and improvements for public works, and for technical assistance including evaluation and shaping of specific projects and programs in economic development.

This bill responds to the unemployment problem; it will put people back to work; it will provide permanent and needed capital improvements; and it deserves the support of every Member of Congress.

STATEMENT OF HON. JOHN SLACK, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WEST VIRGINIA

Mr. SLACK. I am pleased to have the opportunity to appear before the committee to express my strong support for H.R. 4400 and the other bills which would reinstitute the Public Works Acceleration Act program. I am equally pleased to consponsor legislation in this field because I was one of the first sponsors of the legislation which authorized the original accelerated public works program in 1962. During the life of the first program I had a great deal of experience with its operations, administration, and results. This experience convinced me that the principle underlying a program of this kind is valid. Prevailing domestic economic conditions indicate that a reconstitution of this program at this time is justified, even though it may be operational only for standby application in some areas.

We all know that unemployment, in varying degrees at different times, is probably unavoidable in a growth society. The effervescence of growth dictates changes in our production economy and this in turn causes a shifting of the areas of emphasis. Unavoidably there

will be persons unemployed in particular areas as a result of these changes even as persons are being newly employed in other areas at the same time. We have a range of programs which are designed to cushion the peak of short term unemployment and these programs to be generally effective.

However long-range unemployment is a different matter entirely. Our experience with economic cycles during the years since 1930 suggest to us that there is a point at which symptoms of economic stagnation become perceptible, and at this point is related to a steady increase in long-range or hard-core unemployment. This type of unemployment must be dealt with in an entirely different manner.

At the present time the employment picture in domestic economy bears an unhappy resemblance to the conditions which existed at the time when the first accelerated public works act was passed by the Congress. I recall very well that when we undertook to develop a public works program of this kind the statistics indicated that there were about 650,000 members of the work force who could be considered long-term unemployed in that they had been unemployed for 27 weeks or more and had for all practical purposes exhausted compensation payments. If they had no other resources, they would be in a position in which they must turn toward public welfare income sources. At that time many of us were greatly disturbed because the total number of unemployed in that category was increasing steadily. It became quite obvious that something in the nature of a surcharge of capital investment would be required to reverse this trend. It was out of this thinking that the first public works acceleration act developed.

Previously I stated that the condition existing in 1962 bore an unhappy resemblance to the condition we find today. I ask you to consider the figures as supplied by the Bureau of Labor Statistics.

In February 1970, there were 162,000 wage earners who had been unemployed for 27 weeks or more.

But in February 1971, we find that this total had more than doubled to reach 451,000 persons who could be considered very long-term unemployed.

To some families unemployment for 15 weeks consecutively brings very serious problems. In February 1970, there were 520,000 workers who had been unemployed for 15 weeks or more. We find this figure has also doubled during the following year because by February 1971, there were 1,179,000 workers unemployed 15 weeks or more.

The conditions, then, are very similar to those which existed when we considered this type of legislation originally. I feel very strongly therefore that we are justified in pressing for enactment of this legislation as soon as possible. There have been many statements to the effect that an upturn is in prospect and that we have passed the high point of unemployment. This may or may not be the case. If it is not the case, however, we would be well advised to have this program authorized and ready to be placed in operation.

If the total number of persons unemployed 27 weeks or more continues to grow for another 2 months, then it will be quite apparent we cannot correct this trend without the release of a volume of new economic energies not tied directly to capital investment. In considering the situation generally, I have had some questions in my own mind

as to just how contributory might be the decisions of the Office of Budget and Management. I am sure that all of the members have had experiences which parallel my own. One specific instance I believe is especially pertinent to the situation.

We are all familiar with the extraordinary emphasis which has been placed on efforts to protect and improve the environment. One aspect of that program and perhaps the most important aspect, must be the disposal of raw sewerage. The members of the committee will recall, I am sure, that there was much discussion of the need for additionaĺ public investment in sewerage disposal facilities and the equal need for the communities to be encouraged to initiate actions at the local level.

Speaking directly of this type of activity I ask you to recall that last year Congress appropriated $350 million to provide Federal matching funds under the water and sewer facilities grant program of the Department of Housing and Urban Development.

Throughout the country many communities and counties proceeded with planning activity and engineering preparational work, secure in the belief that they would receive approval of matching fund grant applications. But we now find that the Department of Housing and Urban Development will not have $350 million to apply to this very valuable program during the current fiscal year. The sum available for this purpose has been arbitrarily reduced by action of the Office of Budget and Management from the $350 million appropriated to only $140 million for the fiscal year, a cut of more than 50 percent.

In the case of my own congressional district, I can advise that one particular county has expended many thousands of dollars in planning and engineering work to the end that 11 projects have been developed with the HUD grants program in mind. They have just been advised that they will certainly not receive approval of the 11 projects and in fact may consider themselves lucky if they have even one of the projects approved this year. I am sure all of my colleagues have had similar experiences with this and other programs. I will not labor the point, but I feel very strongly that the "no new starts" and "freeze" principles of administering appropriated funds for ongoing and longestablished programs must be held accountable for some of the longterm unemployment statistics which have developed in recent months. It is true there is some changeover in industry as a result of a decline in defense and space spending, but one would believe that when this takes place there should be a special effort to fully implement the Federal programs for which money has been appropriated as an offset against the decline in employment caused by changes in some segments of our national economy. This has not been done and in fact quite the opposite tact has been taken. I am going into the matter at some length because I would hope the committee would cause to be included in the bill, if possible, some language which would again place emphasis on the full activation of those programs which we in the Congress tried to fully activate last year through appropriation of funds. Perhaps the communities which will not receive water and sewer grants from HUD could reach the same goal via the path of the Accelerated Public Works Act.