General revenue sharing is not the wave of the future. Block grants are not the wave of the future as things stand now. The categorical dimension of the Federal aid package is obviously the continuing dominant technique by which the Federal Government and the Congress in particular seeks to deal with the domestic problems of this country.

Associated with this problem of numbers and reflected within it is the degree to which the numbers convey or should convey if one goes through the programs, an extraordinary picture of what I call hyperspecificity in their functional focus, it reflects the degree to which Congress has become extraordinarily specific in terms of categories of recipients, the activities that we take aided, the various sectors of the population to be reviewed.

Looking at highways, there are seven programs in the highway safety program, which at best is a sub-subfunction of highway overall, the programs range from seatbelts to bridges.

This kind of hyperspecificity, we believe, carries a high degree of inevitable intrusion into the decisionmaking processes of State and local governments.

It is from that angle that many of the accounts that you have heard earlier will continue to be heard until such time as the question of numbers and what they mean administratively and what they mean managerially and what they mean in legislative oversight and what they mean by way of feelings of being left out as in the case of small communities vis-a-vis the larger.

The measure before us is one that deals in a very balanced way with this proliferation of programs problem. It is not a parallel with the Executive Reorganization Act. It is something that_reflects a very different approach which we think is constitutional. It considers the sensitivity of the Congress, as well as giving the executive branch a certain level of encouragement which they need at this point in time in terms of their willingness to present any considerations of grant programs.

One more point and then I will turn to my colleague, Dr. Stenberg. Beneath this number are buried the problems of diverse program thrusts; extraordinary increases in the dollars for Federal grant programs, and the hyperspecificity issue. Yet, a basic dimension of this problem is the fact that proliferating numbers above all, perhaps, categoricals are peculiarly and especially a product of the way the Congress does business. They are very much a part of and very much reflective of congressional politics. They are very helpful in reelection periods. They are a key way to identify with very specific issues.

We have attempted to draft a bill, so we are not unfamiliar with the difficulties politically. When one attempts to merge programs as we did in the public health area-one encounters the many interests that make the task a politically difficult one-recipients and variations of matching and what not. It is no wonder the administration is hesitant about moving forward on this front.

On the other hand, it is no wonder that the Congress is hesitant to mount on its own a significant effort along this line. Hence our concern with this procedure. We think it is complementary to the Roth bill.

We commend you for this legislation. Our concern with title V in

this piece of legislation is complete, and we would provide any support you need by way of furthering and achieving its enactment.

Thank you.

Mr. STENBERG. Senator, over the last 15 years, in response to many of the problems that have accompanied the explosion of Federal aid, there have been efforts to try to deal with what some call the nonsystem. The problems include high administrative costs, confusion as to sources of funds, and inadequate oversight of existing programs that result from this rapid growth and narrow specificity of programs. Many of the remedial actions have basically taken the form of attempts to reduce redtape; to simplify various rules, regulations, or procedures; and other incremental steps which while important for the most part have not significantly reduced or eliminated the various problems associated with categorical grants.

The procedure contained in title V of the Small Communities Act is a refreshing contrast to many previous efforts. We feel it complements them though, but it is major surgery, it is not incremental reform.

Our commission feels that at this point in time, major surgery is absolutely necessary as far as the grant system is concerned, and particularly its categorical component.

Many people over the years have expressed support for the idea of consolidating functionally related categorical programs. Yet the record to date has on balance been disappointing, given the number of programs that still remain, many of which are closely related functionally and very narrowly defined in terms of their purpose.

For a brief period, some 8 years between 1966 and 1974, there were breakthroughs. Consolidations were achieved in the health area, in the community development area, and in the employment training area. There also were some minor consolidations in the library and innovative services fields. All in all, approximately 60 mergers occurred. This certainly is desirable, but not much has happened in the last 4 years.

The procedure outlined in title V would expedite and facilitate the consideration of categorical consolidation. The procedure in our judgment strikes a very reasonable balance between the prerogatives of Congress which respect to the structure of categorical programs, the identification of national purposes, and the designing of instruments to achieve them, and the need on the part of the President for flexibility in terms of the management and implementation of these programs.

The bill in our view provides the necessary assurances that executive consolidation actions would not occur without the affirmative vote by the Congress and that specific limits would be placed on the President's discretion in designing consolidation plans.

The Advisory Commission on Intergovernmental Relations, Senator, last May called upon Congress to reduce the number of categorical aids to State and local governments through consolidation and suggested an approach that is quite similar to the one contained in title V of your bill and, therefore, supports strongly the intent of this title of the legislation.

To help further serious debate on this issue, the Commission identified a list of some 172 programs which, based on a number of factors

such as their administering agency, their purpose, and their allocation formula, appeared to be closely enough related to warrant indepth examination as possible merger candidates. We have appended this list to our statement, and would urge the committee to review that list in the course of considering title V.

At this point, Senator, we will conclude our testimony and, of course, be willing to answer such questions as you may put to us. Thank you.

Senator DANFORTH. Do you have anything to add?

Mr. MITCHELL. No; I have nothing further to add, thank you.
Senator DANFORTH. There are now 481, is it?

Mr. WALKER. Yes, 481.

Senator DANFORTH. 481 different programs for the State and local governments.

Now, if you take a community of, say, 5.000 people, 10.000 people, would typically the amount available under any one of the grant programs, be quite small?

Mr. WALKER. In terms of the 481, approximately 82 of those are programs for which local governments are exclusively eligible or are eligible along with their States.

Now, of those 80-odd, we have no figures on the number of small communities that would be eligible per se. But the generalization I will make is still an accurate one. The bulk of the kinds of programs the small communities are eligible for are discretionary project grants and GRS. Few formula grants have a basis of allocation to such communities. Even if the funds were available, there still would be great difficulty in developing an allocational formula below the State level that would weigh the need factors. for such jurisdictions validly. To put it better, the data we need to develop a substitute allocation formula for these communities would probably not be valid, given the state of the art at the present time.

So, in the bulk of the cases. the small units have to come in and hustle in the old-style sense that the big cities did in the 1960's in attempting to compete successfully for discretionary project grant money. This leads to a situation of who's got the muscle, who knows how. who knows where, who knows what-the kind of business that we had throughout the mid-1960's and on into the early 1970's for the larger localities is now being replicated for the smaller communities. This flows from a situation where most moneys flow pursuant to the project grant applications, where you have to come in and compete with your fellows in that jurisdictional category.

That, to me, is the conundrum that HUD and the report made reference to before is trying to crack. It is a very complicated issue, we think.

Senator DANFORTH. Would it open the doors to the Treasury to move to a different system?

Mr. WALKER. If one were to try to put this entirely on a formula basis with halfway accurate proxies of need in the formula. Census would have real problems in concocting the figures and the total Federal appropriations inevitably would be much larger than they are now for the discretionary program funds.

I think that is inevitable. Whenever we have had a merger of grants, history usually indicates you have to have a larger fiscal pot at the end of the process.

Senator DANFORTH. Well, at a time when a lot of people are very concerned about the Federal budget, are we in the soup?

Mr. WALKER. Well, speaking personally, Senator, and partly institutionally, we believe as you believe, going back to the colloquy you had with a witness 3 weeks ago in this room, that the States have a role here, especially vis-a-vis the smaller communities and I would urge the committee to ponder this relationship.

We tried to make the case before the Banking and Currency Committee of the House when the renewal for community development came up, regarding the nonmetropolitan portion of CDBG and how it could be handled more expeditiously and sensitively. We urged at the time-not successfully, I might add, that the States be given the role of handling the 20 percent remainder for rural America rather than leaving it to HUD administrators, and we rated the difficulty of their being attuned to the differentiated interests of that wide range of smaller jurisdictions in nonmetropolitan America.

So, there are various ways of pondering this and it raises some big issues about the State role. We are under the impression that some small communities are at least as familiar with their State capital as they are with Washington-and they prefer it.

Senator DANFORTH. You said 481 programs now, how reasonably low could we reduce that figure if we were trying to do things the right way as opposed to the political way?

Mr. WALKER. Two or three of the most simple ways are most obvious. Yet these are not recognized by many. One way is to find out over a 2- or 3-year period all of the authorized programs that have not been funded. If this was systematically monitored by OMB or somebody else in the executive branch, or by the congressional budget committees, you would have almost prima facie evidence that there is a class of programs that could be deleted if over a particular time period no money had been allocated, even though they were still on the books, still technically organized, still in the catalog of domestic programs, and local and State officials still feel these programs were operational when in fact they were not.

That is one view.

Another is the way in which the appropriations committees and the authorizing committees are confronted by the packaging of budget submissions from the executive branch. You would have a clue immediately in the way in which these programs are presented, putting together a number of separately authorized programs into one package.

Perhaps a third approach is the focusing on the big dollar programs the 25, or 30, and it is no more than that, of the 481 grants-inaid to State and local governments that are the behemoths. They are particularly formula grants such as AFDC, highways, and medicaid. If you look at the pygmies in the wage of these 25 to 30, you'll find these relatively smaller one are causing the major administrative problems.

The 25 or 30 big money programs are administratively difficult, of course, and they should be because we are talking about billions of dollars there, half to two-thirds of the total amount of funds. But the bulk of the programs are really pygmies in the fiscal sense; but behemoths in the managerial nightmare sense, and that is where the focus should be.

Senator DANFORTH. Do you think we should reduce it from 481 to 25 or 30 without causing great damage?

Mr. WALKER. If the Congress in its wisdom were to feel this is an important national goal, but there is no sign of that as of the moment, in the aggregate, not individually.

Senator DANFORTH. Do you feel that-do you feel it should be?

Mr. WALKER. Yes; I think 25 is a little bit low, possibly, but were the spirit willing and were there the recognition in Congress there that the grant system administratively is out of hand and, that it is an impasse of more times than not, and that it is often counterproductive, not productive, then the number of grants could be reduced to at least a hundred or less.

The rest are insignificant programs in terms of people, significant for bureaucrats maybe, but not in terms of people. The people programs in effect are the big money programs. That is where the money is.

Senator DANFORTH. You say that it is not the trend now to move to revenue sharing and block grants, but I think that that is a correct analysis of the mood of Congress.

The mood that I described during hearings on S. 3207, a few weeks ago is that we just have the idea here that we know exactly what should be going on all over the country and the word that we use is targeting to describe that.

So we know how to run seatbelt programs or whatever kind of program and the way to do it is to have a very narrow grant program so that you get the money if you do things precisely our way. That is what the grant is for.

The great fear in the recent revenue sharing is really, I guess, losing popularity, is the fear that local governments will do something that we think is wrong. It made the front page of the Wall Street Journal when St. Louis County got the idea it wanted to use revenue-sharing money to build a golf course. They backed off that.

I think it was silly that a golf course was the decision of, at that time of the St. Louis County government. But the fact of the matter is that it was their decision and that there is no place in the governmental structure, on the governmental ladder at which decisions suddenly become sound and wise decisions.

There is no monopoly of wisdom in Washington. The people here are just no more attuned to anything than the people in Jefferson City or St. Louis County or whatever. But we have the idea that we are and, therefore, we try to target what we are after to our ideas of what should be going on all over the country. That is the reason for all these little programs. But you think that everything else we have talked about today is a footnote to that, that all of the paperwork, that all of the confusion, that all of the overlapping in relations and standards and what not, that these really flow from just the quantity of programs.

Mr. WALKER. It is the numbers, it is what they signify in terms of multiple and unbelievably detailed program thrusts. It is the pretentiousness that you described about what the National Government is doing in a number of areas which only a decade ago, everybody, regardless of political persuasion or idealogical bias, would concede to be State and local or private sector function. The Congress has played