Secretary PIERCE. Well, I'd have to compute that and have to work it out. I don't know. I can't answer your question. May I put an answer in for the record?

Mr. MANTON. Yes, sir.

Secretary PIERCE. I'll put an answer in the record.

Mr. MANTON. I'll appreciate seeing that in the record.

Secretary PIERCE. OK.

[At the request of Congressman Manton, the following additional information was received for inclusion in the record by Secretary Pierce:]

RESPONSE RECEIVED FROM SECRETARY PIERCE

The funded HoDAG projects require an upfront subsidy of $76,000 to obtain one lower-income unit for 20 years. To allow a comparison with the upfront HoDAG subsidy, a voucher subsidy, involving an annual payment over a period of years, must be converted to a present discounted value measure. The present value of a series of annual voucher payments of $3,500 (paid monthly) over 20 years is $30,200, assuming a discount rate of 10 percent.

Therefore, the cost of a Housing Voucher unit, when calculated over twenty years to provide the comparison with HODAG, would be slightly more than $45,000 less than the cost of a HODAG lower-income unit.

Mr. MANTON. I don't know if I still have any time left, the chairman would remind me if I do, but I'd just like to talk about UDAG for a minute.

Chairman GONZALEZ. One more question.

Mr. MANTON. Thank you, Mr. Chairman. I'll be brief.

Although you said you are a teamplayer and the coach has set the game plan, I wonder if you'll agree with this, that reported unemployment in UDAG-eligible cities averaged 8.2 percent compared with the 5.5 percent in other communities. Also employment growth in eligible cities averaged only one-third the national rate and eligible cities averaged twice the tax burden of other communities.

What was the rationale, in view of these figures, for the coach and/or his other advisers deciding to cut UDAG?

Secretary PIERCE. I think the rationale was that all of the local economic development programs, UDAG and all the rest, should go out of existence, because the cities, local governments and States, could handle the situation now that the national economy has improved; and now that a lot of the States and cities have surpluses. The administration believes they can do it, and we need to get rid of these programs in order to help our budget situation.

Mr. MANTON. You heard the questions of Mr. Kanjorski relating to his specific region being severely impacted by the lack of economic progress.

Secretary PIERCE. You asked me what was the rationale. I gave it to you.

Mr. MANTON. So what you're saying is that the rationale was to eliminate all economic development programs, regardless of the merits of a particular program.

Secretary PIERCE. Local economic development programs were going to go and—

Mr. MANTON [continuing]. Local economic programs are per se not going to be handled by the Federal Government any more?

Secretary PIERCE. That's right. It is thought that the State and local governments handles what these programs currently do. Mr. MANTON. Thank you, Mr. Secretary. Thank you.

Chairman GONZALEZ. Mr. Carper.

Mr. CARPER. Thank you, Mr. Chairman.

I'd like to welcome the Secretary to our committee today and thank you for your testimony. I appreciate the difficulty of your job and your desire to remain a team player, but we've got a tough job here in trying to work in a cooperative spirit to begin reducing budget deficits.

I share your concern and that of this administration over what the failure to do so will likely do to our economy. And I'd like to try to work in a constructive way to reduce those deficits.

Secretary PIERCE. Fine.

Mr. CARPER. I appreciate specially your response to Mr. Lundine's questioning about your recognition that there is a need for housing for low-income people in this country.

On page 4 of your testimony, you note that the moneys in the pipeline will add about 207,000 new families to those who are now being assisted.

Can you give me some idea, just in real rough terms of what you perceive or what does your Department perceive to be the need at this time?

Secretary PIERCE. The need of people who could use housing?
Mr. CARPER. Uh-hum.

Secretary PIERCE. Well, the best we have is what we call a worstcase basis, which really was developed by Senator Garn's committee, and on the basis of a worst-case basis, there are 2.8 million families that need housing. So roughly we're talking about helping 2.8 million families above the number we are helping now.

Mr. CARPER. Roughly, 1 out of 10 families at worst-case?

Secretary PIERCE. Well, I don't know what 1 out of 10 is-2.8 million families.

Mr. CARPER. 1 out of 14.

Secretary PIERCE. I don't know that. I'll just give you the number, 2.8 million.

Mr. CARPER. All right. We will accept that as not an unreasonable number. I think there is an inclination, certainly on my part, and I think on the part of many of my colleagues

Secretary PIERCE. Incidentally, I might say that OMB gives a worst case basis at 600,000.

Mr. CARPER. All right. That's gives us-in any event, we know that the need is greater than what is being proposed for assistance here.

I think that the members of this committee are going to say that the need is somewhere between 600,000 and 2.8 million, and we want to do something to help them more than what is proposed in the adminstration's budget. Realizing your desire to be team player, we're still going to be obligated under our budget law to recommend to the Budget Committee what we think should be included in our budget resolution for housing programs. It won't beI can tell you right now, it won't be the roughly $1 billion or $2 billion that is proposed in new budget authority for fiscal year 1986. It may not be $18 billion or $19 billion either, as H.R. 1 would

propose, but it may be pretty close to what's in the budget for this year-an appropriation of about $11 billion or so.

What would be real helpful for me, perhaps for other members of the committee, is to get a sense from you on where we might put our priorities. And I know this may not be an easy question for you, but we're going to have to establish some priorities, and we're going to have to say where we're going to put the money and where we're not. I am prepared to just go down the list and maybe you can say, low, lower, or lowest, but I need some assistance there. Secretary PIERCE. You put me, indeed, on a spot, but if you're going to do something anyway on priorities, I would

Mr. CARPER. Yes, we're going to do something anyway, so you may as well

Secretary PIERCE [continuing]. I would like the vouchers to come back in, and that I think would be very helpful to a considerable number of people-if you're going to do something anyway.

Mr. CARPER. Again, we're going to probably be submitting something closer to what is appropriated this year. The voucher-as I recall, the voucher, currently, we're spending about $600 million, $700 million for vouchers. If we decided to come in and fund that at the same level again, that's still going to leave us about $10 billion that we're going to build into the budget. In terms of where we shouldn't spend the money, maybe that's a better way to ask the question, rather than say where should we spend it, where should we not spend it?

Secretary PIERCE. Well, I will get arguments on this too, but I would say things like the solar energy and the section 312 rehabilitation programs. I'd say areas like that. But again, everybody has their own way of approaching things and evaluating them, but that would be my thinking.

Mr. CARPER. OK. So you've mentioned solar. You don't believe the solar bank is a particularly good way to spend that appropriation.

Secretary PIERCE. Yeah, I think it should be out. I also think that the 312 Rehabilitation Loan Program should be out.

Mr. CARPER. All right. Can you point to some others where you think that we absolutely should not be spending the money?

Secretary PIERCE. Well, I'd rather not. I picked out a couple there, and where I thought-

Mr. CARPER. It would be real helpful, as we approach the time for actually constructing our legislation to have HUD's assistance. I don't know who is the person to give us the information, but if they can just wink and nod or give some kind of signal. It certainly would be helpful to not be building this budget without a bit more participation from you and your Department.

Secretary PIERCE. Well, I think, in time, if your committee and the Congress start to increase the budget, which apparently may happen, there will be a time, I think, for further discussions.

Mr. CARPER. Good. One last question before my time expires. On lead based paint, and this may be something that you're not intimately familiar with, perhaps someone who is with you is, but as I understand, last summer, your Department published some proposed rules regarding the elimination of lead paint from public housing. I suspect just about everybody on this committee has

people living in our jurisdiction where young children, generally under the ages of 6 have consumed lead paint, and as a result suffered brain damage, which they will carry with them for the rest of their lives. I understand that there are rules that exist today that require the removal of lead paint from buildings where children could be brain damaged by ingesting it. I understand that there are proposed rules to change that, so that instead, we wouldn't be required or the public housing authorities wouldn't be required to correct that situation until we had incidences of children showing up with levels, in some cases dangerous levels, of lead in their blood. And basically, waiting till after children have, I think, been brain damaged, before we move to correct the situation. That causes me a great deal of concern. And I'm hopeful that someone can tell me what the status is of that proposed, I guess it's a ruling or regulation, and how we plan to proceed.

Secretary PIERCE. We've been working with that for sometime. I'll let my general counsel speak to that.

Mr. KNAPP. What we published last summer, I believe, was not a proposed change. It was not a proposed rule. It was technically what we call an advance notice of proposed rulemaking. What it did was solicit comments in response to a number of questions about the current lead-based paint regulations, in terms of different directions in which changes might be proposed, but it did not at that time propose any changes to the rules, nor have we yet actually proposed any change to the current lead-based paint rules. Mr. CARPER. What do you plan to do next?

Mr. KNAPP. What we plan to do next is to evaluate the comments which we received, which were fairly extensive-a great deal of it was scientific data of the kind, frankly, that we have some difficulty in dealing with ourselves-and ultimately proposing some form of changes in the rules or modifications in the current lead-based paint rules, probably. Possibly staying with what we have. But at this time, we really haven't formulated any proposed changes.

Mr. CARPER. Well, I would hope you would lean towards staying with what you have, and I would ask, if you're inclined to do something different, if you would just give me the courtesy of a conversation, that we might further discuss it, I would appreciate that very, very much.

Mr. KNAPP. Certainly.

Mr. CARPER. Again, Mr. Secretary, thank you for your testimony today, and we'll look forward to trying to work in a cooperative spirit with you.

Thank you, Mr. Chairman.

Chairman GONZALEZ. Mr. Schumer.

Mr. SCHUMER. Thank you very much, Mr. Chairman, and thank you, Mr. Secretary. I am sure you look forward to these hearings every year, and I'm glad you waited around for me to――

Secretary PIERCE. Are you the last one? [Laughter.]

Mr. SCHUMER. They always save me for last. [Laughter.]

Secretary PIERCE. The clock says 12:30. I have got a bad cold. I hope we can get finished.

Mr. SCHUMER. I've got a bad cold, too, Mr. Secretary.

I want to try to keep my questions on a factual basis, with one exception, because I know you're a good teamplayer, but I just want to try to express to you and get your comments on how someone like me feels. We came here together, you as Secretary of HUD, and me as a freshman Congressman. And each year that you've testified before us, you've said, "Look, I'm a good team player. We have to reduce the deficit. And I want to do my share." And we've seen assisted housing go down from $30 billion to $6 billion, and indeed, it is the largest overall cut of the social programs in 4 years.

Well, I would feel some consolation, if the deficit were going down, and if all the other programs were being cut, even if not cut as much as HUD. But what happened is that the deficit went from $60 billion to $180 billion. It has not been reduced. Next year, whatever we do with HUD, the deficit's going up another, at best, $10 billion and much more likely $30 billion or $40 billion. And each year we cut, cut, cut, until we have almost no cutting left in housing, to reduce the deficit. I have got to think that what you're being part of, and I suppose indirectly in Congress what I'm being part of is not a real move to reduce the deficit, but simply a move to change the priorities in this country and get the Federal Government out of the housing business, regardless of the deficit. Because the deficit isn't going down. Caspar Weinberger yawns, and that makes up for all the cuts we've made in housing.

This year's President's budget is just like that. It cuts social and domestic programs by about the same amount as it increases defense and deficit reduction is not the rationale. So the question I have, do you really think when you follow your orders, which I respect, and the President makes his decisions, that it's done in the name of deficit reduction, after 4 years? The first year I believed it. And the second year I began to get skeptical, but by now-we're not reducing the deficit. You know it and I know it. We're increasing defense spending, reducing taxes as a percentage of GNP, and we're eliminating social programs from the map of America. Now that's some people's priority. It sure isn't mine, and I wonder if it's yours?

You don't have to comment, if you don't want to.
Secretary PIERCE. Well, I don't mind commenting.
Mr. SCHUMER. OK.

Secretary PIERCE. I do believe we're going to have to reduce our budget, we're going to have to fight the deficit problem. I do believe that. I believe that with all my heart. The question is, Where should the cuts be made? And that's, as I said, a call made by the President, in the last analysis, before the budget comes up here. The final call, of course, is made by Congress.

Mr. SCHUMER. Well, it's made in compromise, because the President can veto whatever we do. So it's really a give and take. Secretary PIERCE. You're right. And he will

Mr. SCHUMER. He does. He's not afraid of—

Secretary PIERCE. If it goes too far out of the way, he will veto it. Mr. SCHUMER. But all I'm saying is, the deficit has tripled in the 5 years you've been coming here. Your face, your expressions reveal and your tone reveals that you don't like these cuts, but you're being a good soldier and doing your share. But the deficit