CAPITAL IMPROVEMENT ACCELERATION PERIODS

SEC. 3. (a) The President is authorized to proclaim capital improvement acceleration periods and exercise during such periods the powers conferred upon him by this Act. A capital improvement acceleration period may be proclaimed

(1) within sixty days after the date when data compiled and published by the Department of Labor reveal that the national unemployment rate adjusted for seasonal variations and stated to the nearest one-tenth of 1 per centum of the civilian labor force, (i) has risen in three of the four, or in four of the six, most recent consecutive months for which such data are available, and (ii) has risen by not less than 1 percentage point measured from the month immediately preceding such four- or six-month period to the last month of the period, and

(2) after the President has determined that existing employment and unemployment indicators and other available economic data clearly reveal that extraordinary action is needed to assure achievement of the objectives of the Employment Act of 1946.

A capital improvement acceleration period shall begin on the day specified in the President's proclamation hereunder and shall terminate whenever the President finds and declares that the need for the programs authorized by this Act no longer exists. Any capital improvement acceleration period proclaimed by the President shall automatically terminate twelve months after initiated unless extended by joint resolution of the Congress. No funds provided under section 9(b) shall be obligated after termination of such capital improvement acceleration period.

(b) No new capital improvement acceleration period shall be proclaimed within the six-month period immediately following the date of termination of a prior capital improvement acceleration period.

ACCELERATION OF FEDERAL PROJECTS

SEC. 4. In addition to the authority otherwise available to him, the President, during the existence of a capital improvement acceleration period, may, for the purpose of this Act, direct the departments and agencies of the executive branch, under such rules and regulations as he may prescribe, to accelerate existing Federal capital improvement projects and programs or to initiate new projects and programs already authorized by law. Any such department or agency may use for such projects and programs funds made available pursuant to section 9 of this Act, in amounts prescribed from time to time by the President: Provided, That the aggregate of all funds prescribed by the President for the purposes of this section shall not exceed the applicable limitation in section 9(b).

ACCELERATION OF EXISTING FEDERAL GRANT PROGRAMS

SEC. 5. During the existence of a capital improvement acceleration period, the President may direct the departments and agencies of the executive branch to make grants, upon application and under such rules and regulations as they may prescribe, to States, municipalities, local public bodies, and nonprofit organizations, to finance the initiation or acceleration of capital improvement projects and programs for which Federal grants to such bodies and organizations are authorized by the Congress and under the terms and conditions prescribed by the Congress: Provided, That no grant under this section shall be subject to any limitation in other laws with respect to the apportionment of funds, the time in which grants may be made, or the aggregate dollar amounts of grants for any prescribed purpose, project, or program: And provided further, That notwithstanding any limitation in other laws requiring a grant to be less than 50 per centum of the cost of undertaking or completing a project or program, grants may be made under the authority of this section which bring the total of Federal grants available for such projects or programs up to 50 per centum of the cost of undertaking or completing such project or program. Any department or agency may use for projects and programs authorized under this section funds made available pursuant to section 9 of this Act, in amounts prescribed from time to time by the President: And provided further, That the aggregate of all funds prescribed by the President for the purpose of this section shall not exceed the applicable limitation in section 9(b).

GRANTS FOR CAPITAL IMPROVEMENT PROJECTS NOT ELIGIBLE UNDER EXISTING PROGRAMS

SEC. 6. (a) During the existence of a capital improvement acceleration period, the Housing and Home Finance Administrator, or such agency or officer of the Federal Government as he may designate, is authorized, upon application and under such rules and regulations as he shall prescribe, to make grants to States, municipalities, and local public bodies to finance the initiation or acceleration of capital improvement projects and programs which are not eligible for grants under other Acts of Congress.

(b) The Administrator may use for grants authorized under this section funds made available pursuant to section 9 of this Act, in amounts prescribed from time to time by the President: Provided, That the aggregate of all funds prescribed by the President for the purposes of this section shall not exceed the applicable limitation in section 9 (b).

(c) The amount of any grant made under the authority of this section shall not exceed 50 per centum of the cost of undertaking and completing the project or program for which the grant is made.

FEDERAL LOANS

SEC. 7. (a) During the existence of a capital improvement acceleration period, the Housing and Home Finance Administrator, or such agency or officer of the Federal Government as he may designate, is authorized, upon application and under such rules and regulations as he shall prescribe, to purchase the securities and obligations of, or make loans to, States, municipalities, local public bodies, and nonprofit organizations which otherwise would be unable to meet their share of the cost of projects and programs for which grants have been authorized pursuant to sections 5 and 6 of this Act.

(b) All securities and obligations purchased and all loans made under this section shall be of such sound value or so secured as reasonably to assure retirement or repayment, and such loans may be made either directly or in cooperation with banks or other financial institutions through agreements to participate or by the purchase of participations or otherwise.

(c) No securities or obligations shall be purchased and no loans shall be made including renewals or extensions thereof which have maturity dates in excess of forty years.

(d) Financial assistance extended under this section shall bear interest at a rate determined by the Administrator which shall be not more than the higher of (A) 3 per centum per annum, or (B) the total of one-half of 1 per centum per annum added to the rate of interest required to be paid on funds obtained for the purposes of this section as determined by the Secretary of the Treasury as provided under subsection (e) of this section.

(e) The Administrator may use for loans authority under this section funds made available pursuant to section 9 of this Act, in amounts prescribed from time to time by the President: Provided, That the aggregate of all funds prescribed by the President for the purposes of this section shall not exceed the applicable limitation in section 9(b): And provided further, That funds obtained by the Administrator for the purposes of this section shall bear interest at a rate determined by the Secretary of the Treasury which shall be not more than the higher of (1) 21⁄2 per centum per annum, or (2) the average annual interest rate on all interest-bearing obligations of the United States then forming a part of the public debt as computed at the end of preceding fiscal year and adjusted to the nearest one-eighth of 1 per centum.

RESTRICTIONS AND LIMITATIONS

SEC. 8. The authority conferred by this Act shall be subject to the following restrictions and limitations:

(a) No financial assistance shall be made with respect to any project or program unless the project or segment of work, to be assisted under this Act(1) can be initiated or accelerated within a reasonable short period of time;

(2) will meet an essential public need:

(3) if initiated hereunder, can be completed within twelve months after initiation;

(4) will contribute significantly to the reduction of unemployment; and (5) is not inconsistent with locally approved comprehensive plans for the jurisdictions affected, wherever such plans exist.

(b) Not more than 121⁄2 per centum of the funds provided for in the form of grants pursuant to sections 5 and 6 of this Act shall be made available within any one State.

(c) Each department or agency administering financial assistance authorized by this Act shall adopt such rules, regulations, and procedures as will assure that no such assistance shall be made available to any State, municipality, local public body, or nonprofit organization unless such project or program for which the assistance is granted produces a net increase in the expenditures of the State, municipality, local public body, or nonprofit organization for capital improvement projects approximately equal to the non-Federal contribution to the project or program.

APPROPRIATIONS AND INTERIM FINANCING

SEC. 9. (a) There are hereby authorized to be appropriated such sums as may be necessary to carry out the provisions of this Act.

(b) In order to expedite financing activities under this Act, the President may, during the existence of any capital improvement acceleration period, cause the unobligated balances of appropriations, contract authorizations, revolving funds, and other authorizations to expend from public or corporate debt receipts available to the departments and agencies of the executive branch to be transferred to the appropriate accounts of such other departments and agencies in such amounts and at such times as he may deem appropriate and, notwithstanding the provisions of any other law, such transferred balances may be used for the purposes of this Act: Provided, That there are hereby authorized to be appropriated such amounts as may be required to restore such transferred balances not otherwise restored to the sources of funds from which they were derived: And provided further, That the aggregate amount of such unobligated balances transferred during any capital improvement period shall not exceed (i) $750,000,000 for the purpose of financing projects authorized to be assisted under section 4 of this Act, (ii) $750,000,000 for the purpose of financing projects authorized to be assisted under sections 5 and 6 of this Act, as allocated between said sections by the President, (iii) $250,000,000 for the purpose of financing projects authorized to be assisted under section 7 of this Act, and (iv) $250,000,000 to supplement funds available for sections 4, 5, 6, and 7 of this Act, as allocated among said sections by the President.

ADVANCES FOR PUBLIC WORKS PLANNING

SEC. 10. Section 702 of the Housing Act of 1954 is amended by striking out in subsection (e) "July 1, 1961;" and the remainder of the subsection, and inserting in lieu thereof, "July 1, 1961; and such additional sums which may be made available from year to year thereafter”.

LABOR STANDARDS

SEC. 11. All laborers and mechanics employed by contractors or subcontractors on projects and programs assisted under section 6 of this Act shall be paid wages at rates not less than those prevailing on similar construction in the locality as determined by the Secretary of Labor in accordance with the DavisBacon Act, as amended (40 U.S.C. 276a-276a-5), and every such employee shall receive compensation at a rate not less than one and one-half times his basic rate of pay for all hours worked in any workweek in excess of eight hours in any workday or forty hours in the workweek, as the case may be. No such project or program shall be approved without first obtaining adequate assurance that these labor standards will be maintained upon the construction work. The Secretary of Labor shall have, with respect to the labor standards specified in this provision, the authority and functions set forth in Reorganization Plan Numbered 14 of 1950 (15 F.R. 3176; 64 Stat. 1267; 5 U.S.C. 133z-15), and section 2 of the Act of June 13, 1934, as amended (48 Stat. 948, as amended; 40 U.S.C. 276c).

DELEGATION OF POWERS

SEC. 12. The President may exercise any functions conferred upon him by this Act through such agency or officer of the United States Government as he shall specify. The head of any such agency or such officer may from time to time promulgate such rules and regulations as may be necessary to carry out

such functions, and may delegate authority to perform any such functions, including, if he shall so specify, the authority successively to redelegate any of such functions. Nothing contained in this section shall authorize the President to delegate the power to proclaim or terminate a capital improvement acceleration period.

SEC. 13. As used in this Act

DEFINITIONS

(a) The term "State" means the several States, the District of Columbia, the Commonwealth of Puerto Rico, and the territories and possessions of the United States.

(b) The term "local public body" includes public corporate bodies or political subdivisions; public agencies or instrumentalities of one or more States, municipalities or political subdivisions of States; Indian tribes, and boards of commissions established under the laws of any State to finance specific capital improvement projects.

(c) The term "capital improvement" includes the construction, repair, and improvement of: Public streets, sidewalks, highways, parkways, bridges, parking lots, airports, and other public transportation facilities; public parks and other public recreational facilities; public hospitals, rehabilitation and health centers, and other public health facilities; public refuse and garbage disposal facilities, water, sewage, sanitary facilities, and other public utility facilities; civil defense facilities; public police and fire protection facilities; public educational facilities, libraries, museums, offices, laboratories, employee housing, and other public buildings; and public land, water, timber, fish and wildlife, and other conservation facilities and measures.

(d) The term "project" includes a separable, usable feature of a larger project or development.

(e) The term "segment of work" means a part of a program on which the work performed can be separately identified by location and will provide usable benefits or services.

Mr. FALLON. Are there any statements from the members at the opening of the meeting?

Mr. BLATNIK. Mr. Chairman.

Mr. FALLON. Mr. Blatnik.

Mr. BLATNIK. I do have a statement which I shall not read, but will merely state that one of the recurrent problems following a recession is that, in spite of the overall pickup in the national economy, the rate of improvement by areas and economic sectors is not a uniform one. In certain geographic areas and economic sectors involving millions of working men and women there usually is a substantial lag behind general recovery. In some so-called hardcore unemployment areas other factors such as technological change and transition, automation, and resource extraction intensify the grave economic problems which arise from recessions.

In addition to antirecession measures such as fiscal and monetary policies, and policies dealing with subjects such as taxation, depreciation, and credit allowances for industry, there are those of us in Congress who feel strongly that, while it is not the whole answer, a very significant role in reducing unemployment can be played by the utilization of public works on a joint and coordinated basis between Federal, State, and local governments if we concentrate on these particular areas.

Mr. Chairman, I ask unanimous consent that my introductory statement be placed in the record at this point.

Mr. FALLON. If there is no objection, it is so ordered. (The prepared statement of Mr. Blatnik is as follows:)

STATEMENT OF REPRESENTATIVE JOHN A. BLATNIK ON THE GROWING PROBLEM OF UNEMPLOYMENT

The most persistent and menacing domestic problem that has faced the Nation in the 1950's and early 1960's has been that of unemployment. To be sure we are far better off than we were in 1933, when one out of four members of the civilian labor force was unemployed. Nevertheless, the employment record of recent years has been a most unsatisfactory one. Only in 1 year since the end of World War II has unemployment fallen to less than 3 percent of the civilian labor force. During the 16-year period from 1946 through 1961 unemployment was between 3 and 4 percent in 5 of the years, between 4 and 5 percent in 3 of the years, between 5 and 6 percent in 5 of the years, and between 6 and 7 percent in 2 of the years and, as the years have gone by, the picture in a number of respects has become less and less favorable. For the 4-year period from 1958 through 1961, the annual average was 6.2 percent.

These rates are also high in comparison with the rates prevailing in many foreign countries, members of the free world community which we are to lead and to which we must give a good example by keeping our own house in order. In 1960, for example, when unemployment was 5.6 percent in the United States, the corresponding estimates for the United Kingdom, Sweden, Norway, the Netherlands, and Germany varied from 1.2 to 1.7 percent, and in Japan the rate was a flat 1 percent.

With each recurring recession in the postwar period, an ominous tendency has become noticeable. As a rule, each recession tends to start an unemployment trough that is higher than that of the preceding recession, while the peaks of unemployment are reaching gradually increasing heights. Thus, in the first two postwar business cycles unemployment had reached low points of less than 4 percent for 1948 and 1953, with peaks for 1949 and 1954 of less than 6 percent. During the last two postwar business cycles, on the other hand, the unemployment lows for 1956 and 1959 were above 4 percent and the peaks for 1958 and 1961 were well above 6 percent. Thus, taking 4 percent and 6 percent as reference points for trough and peak years, troughs and peaks of unemployment during the earlier two of the postwar business cycles were below these reference points. During the later two of the postwar business cycles the troughs and peaks were above these points.

Another alarming feature of the postwar recessions has been the slow rate at which unemployment falls after having reached the recession peak. During the first two postwar cycles the unemployment rate declined by more than 1 percentage point during the 8 months following its peak. During the third cycle it declined by exactly 1 percentage point. During the fourth cycle it did not decline at all, standing at 6.8 percent at the unemployment peak in February 1961 and also at 6.8 percent 8 months later in October 1961. These were the original estimates of the Bureau of Labor Statistics.

These observations indicate that recovery proceeds only very haltingly and that high rates of unemployment persist even during the recovery period of the business cycle, causing the next recession to set in at relatively high levels of unemployment. Recoveries do not become complete any more in the sense that unemployment falls to the minimum. Also, cycles tend to occur more frequently, and the span of time which separates one unemployment peak from the other becomes ever shorter. During the first postwar business cycle unemployment was at its height in 1949. The second peak occurred in 1954, the third in 1958, and the fourth in 1961, the distance in time between one peak year and the next falling always by 1 year.

There are some additional factors that are apt to throw light on our unemployment situation. As a rule, output recovers both earlier and more completely than does employment after a recession. This would seem to indicate a conspicuous upward drift in the productivity of labor and industry. In terms of production, recessions thus are much more mild than in terms of employment, and unemployment rather than deficient production emerges as the central problem of the business cycle.

Moreover, high as our unemployment rates are, it is doubtful whether they indicate the full severity of the problem. In many occupations the average workweek falls short of the standard of 40 hours. If part-time unemployment were converted into the equivalent amount of full-time unemployment, unemployment in January 1962, for example, would not have stood at 5.8 percent of the civilian labor force but at almost 7 percent since in addition to the unem