Mr. WOOLNER. I think if you consider the rate at which applications have been received over the last several years you will find some indication as to how this program is moving. For the fiscal year 1960, the agency received a total of 103 applications for $28,700,000. For fiscal year 1961, prior to the passage of the 1961 Housing Act, of course, we received 140 applications totaling $69,400,000. For the first 8 months of 1962 we received 196 applications for a total of $108 million. So that this year the applications received will be more than double those of the previous year.

Mr. CRAMER. In which program is that?

Mr. WOOLNER. This is in the public facilities loan program.

Mr. CRAMER. Are you doing anything to accelerate processing those? Mr. WOOLNER. Yes.

Mr. CRAMER. If there is such an unemployment problem, are you accelerating the processing of applications?

Mr. WOOLNER. Yes; we are. Let me give you the approval rates. For the same years, the fiscal year 1960, we approved 66 loans for a total of $21,400,000. For fiscal year 1961, 87 loans, for a total of $17,600,000. Through February of 1962, for the first 8 months of fiscal 1962, 115 loans for a total of $53,600,000. So that with twothirds of the year gone, we have tripled the dollar volume of 1961 and done approximately 50 percent more in terms of numbers of projects. Mr. CRAMER. And this should help the unemployment situation? Mr. WOOLNER. We believe so; yes.

Mr. CRAMER. And you still have $500 million not obigated in Housing. You have got $1.4 billion not obligated. So you have a total of nearly $2 billion in your agency alone that hasn't been obligated to be used to accelerate doing the job under title 7 of this bill. The thing I am concerned about under this legislation, is the proposal to give you a blank check without writing in any substantial criteria that relate to types of projects, as is written in the present legislation. Wouldn't it be a better approach, as it relates to your agency to consider amendments to the basic legislation to be triggered off by congressional action in case of unemployment?

Mr. CONWAY. Congressman, we explained in connection with the public facilities loan program that it is moving more rapidly but its initial slowness in responding was the fact that it is limited to small communities. This bill would in effect take the population ceiling off that program and would couple with it grants in combination with loans which would accelerate the program tremendously. There is no question about that.

As far as urban renewal programs are concerned, this is not a program that would fall in the category of a public works program. The leadtime on urban renewal projects is such that they exceed the 12month limitations that are in this bill. From the time of conception of an urban renewal project in a city of any size, big or small, it takes a certain amount of time to progress to the point where you have public hearings, where you can get the approval to proceed. You have to go through court condemnations. It is a leadtime problem that can range anywhere from 18 months to 3 or 4 years in some cases, So that increasing the tempo of the urban renewal program is not an answer to the immediate unemployment problem situation.

Mr. DOOLEY. Just a point of information. When a loan is made for urban renewal proposed projects and the project is turned down, is that interest-free loan repaid or is it a percentage that is repaid? Mr. WOOLNER. You are talking about the public facilities loan program, the advance planning?

Mr. DOOLEY. Right.

Mr WOOLNER. Well, in the advance planning program, Mr. Congressman, the advance is repayable to the Federal Government upon the start of construction.

Mr. DOOLEY. That comes right out of the grant, of the loan itself. But suppose the project is turned down. Is the money paid back? Mr. WOOLNER. Well, we made the advance on the reasonable assurance from the community that it has the financing available. Mr. DOOLEY. I see. Only then.

Mr. WOOLNER. Yes.

Mr. DOOLEY. I thought that the study made some time in advance of the final approval

Mr. WOOLNER. We don't advance money for feasibility studies, only for preliminary or final planning.

Mr. DOOLEY. I see. Thank you.

Mr. BLATNIK. Mr. Robinson?

Mr. ROBISON. In connection, Mr. Conway, with your answer to Mr. Cramer of Florida, I understood you to indicate that one of the reasons the community facilities loan program doesn't go as rapidly as it could is because of this limitation on community size. On the other hand, in your own statement it appears that because of the 12month limitation for completion of the construction, most of the facilities that would be built either under the $600 million or the $2 million standby authority would be pretty well limited to smaller, less costly construction projects.

Mr. CONWAY. No, sir. I'm sorry. If I gave that impression, I'm sorry. What I am saying is that the present program that we have is limited to communities of 50,000. There is a tendency for those communities to express an interest in the advance planning. There are many other communities of larger size who carry on their own planning on an ongoing basis, many municipalities, and they will be eligible under the administration bill here for grants and loans for the same kinds of things-water-sewage systems, and so on-without regard to population.

Mr. ROBISON. I thought we were talking about construction loans in connection with Mr. Cramer's questions; construction loans under the Public Facilities Act. This program didn't go as far as it might because of the limitation with respect to community size. Is that correct?

Mr. WOOLNER. Mr. Congressman, the limitation as to size of the community would not necessarily refer to size of the project. You could develop many projects within the 12-month limitation in larger communities.

Mr. ROBISON. Undoubtedly within certain areas, but in the area of waste treatment facilities, for instance, the 12-month limitation is going to rule out the larger communities there, is it not?

Mr. WOOLNER. If it involves a treatment plant, yes. If it involved development of laterals, possibly no.

Mr. ROBISON. If we are talking about the small libraries, firehouses, police stations, that is something else? Incidentally, one more question, Mr. Chairman.

I notice the definition of "capital improvement" in the bill includes civil defense facilities. You haven't mentioned that. I would assume that this would permit a grant to an eligible public body of 50 percent of the cost of a fallout shelter plus a loan to that public body if eligible, and also about a loan to a nonprofit organization such as a groups of neighbors who wish to construct a fallout shelter. Would this be true?

Mr. WOOLNER. I believe the grant section is limited only to public bodies.

Mr. ROBISON. Correct, but loans then to nonprofit organizations such as might be created by a group of neighbors that wanted to build a neighborhood-type fallout shelter.

Mr. CONWAY. I think the loans would be limited to those nonpublic bodies which are eligible for grants under other ongoing Federal programs.

Mr. ROBISON. In any event, the President has made a proposal to Congress in this area and this would permit, if this bill became law, at least something in the way of a start on his recommendations before Congress had actually considered the merits thereof, would that be true?

Mr. CONWAY. No. If that other proposal were passed by Congress and became an ongoing program, then conceivably

Mr. ROBISON. I understand that. So there could be a start on a fallout shelter program here. I asked that question because I have constituents who are very vocal in their opposition to a national fallout shelter program. Mr. Chairman, I suppose we all have. I don't take that position necessarily myself but I am aware that such opposition exists.

Mr. BLATNIK. Any further question?

We thank the witnesses. Thank you for your assistance, and you are dismissed.

The hearings-may I inquire first, we have got three more witnesses. Dr. Selke of Agriculture, would you be able to be here at 2 o'clock? Dr. SELKE. Yes, sir.

Mr. BLATNIK. And Mr. Stoddard, at 2 o'clock?

Mr. STODDARD. Yes.

Mr. BLATNIK. And is Mr. Alan Dean here?

He is not here.

The hearings are recessed until 2 o'clock this afternoon. (Whereupon, at 12 noon, the hearing was recessed, to reconvene at 2 p.m. on the same day.)

AFTERNOON SESSION

Mr. BLATNIK (presiding). The House Public Works Committee will come to order and resume its public hearings on the Public Works Stand-by Capital Improvements Act of 1962.

We will change the order of witnesses. Mr. Alan L. Dean, who is scheduled to be last, and who hoped to be on this afternoon, will be our next witness.

Mr. Dean, the Deputy Administrator for Administration, of the Federal Aviation Agency, is leaving town and is catching an airplane within an hour and a half. His testimony is not long.

So will Mr. Dean come forward first?

STATEMENT OF ALAN L. DEAN, DEPUTY ADMINISTRATOR FOR ADMINISTRATION; ACCOMPANIED BY DAGGETT H. HOWARD, GENERAL COUNSEL; AND CLARKE HARPER, DIRECTOR, OFFICE OF THE BUDGET, FEDERAL AVIATION AGENCY

Mr. DEAN. Mr. Chairman, I have with me, to my left, Mr. Clarke Harper, Director, Office of Budget, Federal Aviation Agency; and to my right, Mr. Daggett H. Howard, the General Counsel for the Federal Aviation Agency, who will be of assistance in the questions raised by the committee.

I have a short statement.

Mr. FALLON (presiding). Mr. Dean, I am sorry, but will you introduce the two gentlemen who accompany you today for the record? Mr. DEAN. I would be glad to do so.

Mr. Clarke Harper, to my left, is Director, Office of the Budget, of the Federal Aviation Agency; and Mr. Daggett H. Howard, to my right, is the General Counsel for the Federal Aviation Agency.

Mr. FALLON. May I, on behalf of the committee, welcome you gentlemen here this afternoon?

Mr. DEAN. Mr. Chairman, on behalf of the Administrator of the Federal Aviation Agency, it is a privilege to appear before this committee and to have an opportunity to present the views of our Agency. Our comments will relate to H.R. 10113 and H.R. 10318, similar proposals relating to the acceleration of capital expenditure programs. H.R. 10318 would provide standby authority to enable the President to take quick and effective action to stimulate the economy by inaugurating a program of needed capital improvements when unemployment indicators and other economic data clearly reveal that extraordinary action is needed to assure achievement of the objectives of the Employment Act of 1946. The proposal would also provide the President with authority immediately to increase expenditures of authorized Federal programs of capital improvements previously authorized by law, and to furnish an incentive to State and local bodies to accelerate their capital improvement programs.

The Federal Aviation Agency believes that it is highly desirable for the President to be supplied with standby authority to take quick and effective action to stimulate the economy when there is evidence of a recessionary trend. This authority should be in place so that action can be taken promptly to strengthen the economy when the need arises without the kind of delays required to secure new legislation or any additional appropriations.

As between the two bills, our major objection to H.R. 10113 is that it would create an additional Government agency. I don't, by such a statement, mean to imply that creation of additional Government agencies is necessarily, in itself, bad. However, we believe that additional Government agencies should be established only upon a finding

of clear and sufficient need. There does not appear to be a clear and sufficient need in this case.

H.R. 10318 would permit existing agencies to conduct all planning, administration, and coordination and thereby eliminate the need for a special public works coordinating agency. We believe that acceleration can best be carried out by those agencies which are presently engaged in coordinating public works and capital improvements and other programs on behalf of the President.

Most of the direct capital expenditures of the Federal Aviation Agency are for the procurement and installation of air traffic control and air navigation facilities required for safety and efficiency in the use of the Nation's airspace. It is now expected that as much as $1 billion could be advantageously used by the Agency over the next 5 years in the modernization of such facilities. Other direct capital expenditures will be made for improvements in and additions to our airports in the National Capital area and for the construction of laboratories and test facilities at our National Aviation Facilities Experimental Center at Atlantic City.

The Federal Aviation Agency's only grant-in-aid program assists State and local public authorities in the construction and improvement of airports. The Federal assistance level is now $75 million per year. Estimated national public airport requirements for the next 5 years total in excess of $1.1 billion.

However, both the direct construction and grant-in-aid programs of the Agency entail substantial advance planning and the procurement of highly specialized equipment. As a result, the FAA has only about $72 million in projects not presently funded which it could initiate and complete within the 1-year limitation set forth in H.R. 10318. We estimate that we could expand our program an additional $400 million within 90 days, but these projects could not be completed within 1 year. I have attached to this statement a breakdown of these projects.

The Agency also favors the authorization of the $600-million capital improvements program for areas of substantial unemployment recommended by the President.

If projects financed under this proposal must also be completed within 12 months after initiation, the total program which FAA could undertake would necessarily be limited to a fraction of the amounts which I have already cited. Our ability to concentrate capital improvements in economically depressed areas is, unfortunately, severely limited by the fact that air navigation facilities must be placed where they are capable of contributing to the national airways system. We will, however, use every possible leeway in giving priority attention to those needs of the Nation's air transportation system which can be met by capital improvements in depressed areas.

In summary, the Agency is eager to do all that it can to ward off recessions and to assist economically depressed areas. Funds made available under the capital improvements program would be used to finance carefully planned and urgently needed additions to our airways system.

This is our statement, Mr. Chairman. We would be pleased to answer any questions the committee might have.

(Attachment 1 referred to is as follows:)