(b) Make recommendations to him on when to invoke the standby acceleration authority and when to terminate it; and,

(c) Make recommendations on the volume and general types of public works to be undertaken or accelerated.

The Bureau of the Budget, as part of its normal responsibilities, would:

(a) Collect from all Federal agencies each year advance plans for the succeeding 5-year period, covering all Federal and federally aided public works, and prepare summaries of these plans; (b) Keep the Council of Economic Advisers and the President advised on the status of the inventory of eligible public works and the readiness of plans for public works construction authorized under the proposed standby bill;

(c) When either the immediate or the standby authority becomes effective, advise the President on the administration and financing of the programs.

The Housing and Home Finance Agency, in line with its statutory duty to provide Federal assistance both for comprehensive planning and for advances to finance preparation of plans for specific State and local projects, would:

pe

(a) Expand its advance planning assistance and conduct riodic surveys in order to make sure that an adequate backlog of eligible State and local public works is ready for use in event of a recession;

(b) When either the immediate or the standby authority becomes effective, make grants and loans for State and local public works directly or through other Federal agencies, to finance projects or programs not already eligible for Federal grants. Each Federal agency having direct responsibility for public works and for Federal aid to State and local construction would:

(a) Continue and, if necessary, accelerate preparation of advance plans so that new projects will be available for initiation when funds are made available under the standby authority;

(b) If now authorized to provide financial assistance to States and local governments, continue to encourage and assist them in advance planning and to obtain reports of the status of such advance plans;

(c) Submit information on Federal and federally aided public works to the Bureau of the Budget for central compilation and analysis;

(d) When either the immediate or the standby authority becomes effective, make recommendations for initiation or acceleration of eligible projects and programs, including grants, administered by it; and,

(e) When the funds have been allocated to the agencies, make the contracts, grants, et cetera, necessary to carry out the decisions.

Finally, it would be desirable, in our opinion, when either the legislation authorizing immediate acceleration of capital improvements becomes effective, or the President under the standby authority proclaims a capital improvements acceleration period, to supplement the existing administrative organization in one respect.

Mr. SCHERER. Would you read a little slower? It is awfully hard to digest this when you are reading rapidly.

Mr. BELL. I was reading rapidly because I assumed you are following the text, and I didn't want to bore you, sir. I apologize. Mr. SCHERER. It just does not sink in rapidly.

Mr. BELL. I was saying it would be desirable in our judgment when either the legislation authorizing immediate acceleration of capital improvements becomes effective, or the President under the standby authority proclaims a capital improvements acceleration period, to supplement the existing administrative organization in one respect. While existing agencies would continue to be responsible, as indicated above, for the planning and administration of the various programs, the President would wish to designate a single individual to assure prompt and effective execution of the total program. Under the President's present thinking, he would wish to assign this responsibility to a member of the Cabinet, but he has not yet finally decided the

matter.

3. ELIGIBLE PROJECTS

As Mr. Heller pointed out, under the President's proposals, the projects and programs to be undertaken would have to have been already authorized through normal legislative channels. Only in the case of State and local public works not now eligible for Federal grants would H.R. 10318 authorize grants to any new kinds of projects-and these would, of course, have to be undertaken by States and localities in accordance with their normal processes and procedures for review and authorization.

According to existing information, a very substantial inventory of eligible projects now exists, including construction and repair of public works and nonstructural natural resources developments which constitute capital improvements.

One important source of information is the agency reports of advance public works programs submitted annually to the Bureau of the Budget since 1943. These reports provide data on programs for Federal and federally aided projects for the budget year and generally for 5 succeeding years, covering both new starts and continuing work.

Summaries made last year from advance programs submitted on the basis of the 1962 budget, indicate that $1.1 billion of direct Federal construction on civil public works could be started within 1 to 6 months and completed within the following 12 months. For the most part this work was already authorized. The agencies listed below said at that time, about a year ago, they could start the following amounts of work within 1 to 6 months and complete the work within 12 months:

Mr. SCHERER. Why does the Tennessee Valley Authority need $321 million? Just last year we gave them a bond issuing authority.

Mr. BELL. This was in a compilation, sir, of the work which they were prepared to do, and had plans for accomplishing, but which were not included in the immediate budget which was then before the Congress on the grounds that it did not meet the full standards for immediate urgency which applied to the budget program. This is additional work which could be undertaken, useful work, which had not been included in the 1962 budget, and undoubtedly some of it is now in the 1963 buget, and other segments are contemplated for later years, but there will be a backlog of unfunded but planned public works which the Tennessee Valley can undertake if this kind of legislation becomes active.

Mr. SCHERER. Could not the Tennessee Valley Authority do that under their bond issuing authority which was granted?

Mr. BELL. Their bond issuing authority-I cannot say offhand I am fully familiar with the limitations of it-is principally for largescale power projects and, of course, those projects would not be relevant either to the President's immediate program, or to the standby authority, because they take several years to complete, and are not the kind of developmental activities which are covered by either of these proposals that are pending before us at the present time.

Mr. SCHERER. We were told when they asked for the bond issuing authority which, of course, some of us opposed, that they would not have to come to the Congress for additional funds.

Mr. BELL. They do come to the Congress, sir, each year, for funds for flood control, for example, for reforestation work, and for various other kinds of resource development activity which would fall within the purposes of this present draft bill that is before you. The bonding power is limited, I believe, to the revenue type of activity which the Tennessee Valley Authority undertakes, which is their power program. I will be glad to check this point, but I believe that is the way it is.

In addition to new starts, an estimated $8.7 billion of expenditures was reported to be necessary to complete civil public works put underway prior to 1962. Much of this work could be accelerated. Some of this work was scheduled for completion within a year, but other segments of it would provide employment for 2 to 4 years. Part of this work was fully financed; funds to accelerate projects not fully financed could be provided under either the President's standby proposal, or the proposed immediate expansion program.

Mr. KUNKEL. Mr. Chairman, could I ask a question? Why couldn't it be done under the present law if they are already started, authorized, and approved and ready to go?

Mr. BELL. Insofar as funds have been appropriated.

Mr. KUNKEL. Yes, but I mean all of the

Mr. BELL. Then the rate of spending of those funds, you are quite right, could be increased in some cases.

Mr. KUNKEL. And all you would need then would be to get an appropriation if you had to accelerate it.

Mr. BELL. Exactly, and that is precisely what is involved in the present legislation.

Analysis and summarization of the advance programs for 1963 have not yet been completed. However, preliminary information in

dicates that the current inventory is at least as large as the figures I have cited, which are a year old.

Advance programs are also obtained in summary form for the federally aided State and local public works programs. Approximately $2.9 billion of expenditures were made in fiscal 1961 on Federal grant programs, with over $3 billion estimated for 1962, and a similar amount for 1963. Most of these grant programs are authorized for some years in advance. Under State plans there are additional priority projects which could be started, indicating that the rate of expenditures on these programs could be increased if additional Federal funds were made available through the authority proposed in the legislation before the committee. These programs include, for example, grants for highways, airports, hospitals, and waste treatment works.

It is difficult to estimate the backlog of State and local public works projects not now eligible for Federal grants, but which might be undertaken by State and local governments under the proposed legislation. One significant source could be the shelf of public works plans financed by advances from the Housing and Home Finance Agency. At the end of January 1962, the estimated cost of construction, for which plans had been completed, totaled $2.5 billion. Almost twothirds of these projects had not yet been started. Over half of the plans were for sanitation and water facilities, most of which would be eligible under the time-for-completion requirement of the bill. Many other types of projects on the shelf would also qualify.

In addition to these public works, there are other types of capital improvements on which expenditures could be substantially increased, such as repairs and maintenance and nonstructural resource developments. These resource developments include timber stand improvement, reforestation, range improvement, fire hazard reduction, soil and moisture conservation, and insect and disease control in the national forests and on public domain and Indian lands; similar types of cooperative forestry improvements with the States; and aid to States for improvements of wildlife facilities and wildlife habitat and fish hatcheries. If additional Federal funds were provided, these programs could be expanded substantially above present levels.

The various agencies who will be testifying later will provide the committee with more detailed information on the amount and types of both Federal and federally aided projects and State and local projects not now eligible for Federal aid.

In summary, Mr. Chairman, we believe that our proposals for financing and administration of the proposed legislation, and the proposed arrangements for making use of projects and activities already authorized, will permit rapid, efficient, and effective execution of accelerated capital improvements programs.

Mr. FALLON. Thank you, Mr. Bell. Are there any questions?
Mr. Cook. Mr. Chairman.

Mr. FALLON. Mr. Cook.

Mr. Cook. I would like to direct a question to Mr. Bell. On page 8, sir, of your comments, you list the programs as I understand it that have already been authorized by the Congress that perhaps could be used in this program to make work for certain unemployed. My question is this: Has there been any study made that applies these

projects to the areas indicated by Dr. Heller in his remarks, where the greatest need for employment is at the present time?

Mr. BELL. We do not have an overall set of figures, in response to that question. The agencies which will be testifying later in the week will be able to give you some information relating to the programs for which they are responsible. All of the projects indicated here would, of course, be relevant to the standby bill, which does not have any geographical limitations. You are entirely correct that the President's recommendation transmitted this morning would be limited in its geographical coverage to the area redevelopment areas, plus the additional areas in the country in which there has been substantial unemployment, defined as over 6 percent for the past year. Those areas cover somewhat less than half of the population of the country; and I believe they also cover somewhat less than half of the geographical area of the country, and consequently it would be quite correct that only part of the projects which are indicated here would be eligible for use under the immediate program that the President has recommended this morning.

There are, however, many of these projects which plainly on their face would be applicable. For example, the bulk of the State of Kentucky, and the bulk of the State of West Virginia, as you undoubtedly know, are included in the Area Redevelopment Administration's areas; and all projects which relate to those areas those of the Tennessee Valley Authority and of the Forest Service, for example would be eligible under the immediate proposal that the President has made. Mr. Cook. Thank you.

Dr. HELLER. Mr. Cook and Mr. Chairman, may I add one note to Mr. Bell's answer that I think you may wish to pursue further with some of the later witnesses. In the first group of economic redevelopment plans that were received and classified by the Area Redevelopment Authority, they had 1,132 public works projects as part of those plans. For example, water supply and flood control, 260; tourism and recreation, 256; pollution control, 254; and so on. So it is clear that a good deal of information will exist, as Mr. Bell suggests, in the agencies that will be testifying here.

Mr. Cook. Dr. Heller, are these proposed new public works projects rather than already authorized public works projects, or is it a mixture

of the two?

Dr. HELLER. I think they are a mixture, but they are projects that these communities have worked up and presented to the Area Redevelopment Authority.

Mr. BALDWIN. Mr. Chairman.

Mr. FALLON. Mr. Baldwin.

Mr. BALDWIN. Mr. Bell, at the beginning of Congress this year, the President submitted a budget to us for the fiscal year 1963 which was rather narrowly in balance. Will you tell us what proposed expenditure of $600 million will do as far as whether or not the budget will be in balance?

Mr. BELL. Yes, sir. As you notice, the $600 million is the proposed appropriation or new obligational authority. It will not all be spent in the fiscal year 1963. The estimated expenditures are indicated in the President's letter. If Congress takes prompt action it is estimated that there will be $25 million in expenditures still in the fiscal year