I think that this can be handled in a far more effective way to let the local areas plan for themselves, and then if, and only if, an emergency exists, by some barometer of economics with which I am not familiar and probably you are, sir, the money can be spent wisely and not in spite of the local jurisdiction, but to benefit them. Mr. CRAMER. So your thought is that some agency, be it a separate coordinating office or it could be within the existing Housing and Home Finance Agency, they could have the function, and I think the President could instruct them, by Executive order, to work with communities in setting up, as you say, ordinary 5-year programs to be accelerated at such time as the President decided, and Congress agreed, and then take a look at it to decide how much money should be spent and in what areas. Mr. Moss. You have said it better than I did. Mr. CRAMER. There you have a well-planned, long-range program. It is not a leaf-raking program. It is not the WPA. It is not a political decision as to where the projects should go, but you have got a backlog inventory already existing on sound projects, considered on the merits and areas of need, and one that could be accelerated or implemented not only by action of the President, but by his triggering on the requests to Congress Mr. Moss. Right. Mr. CRAMER. To determine what areas of construction should be implemented and how much money is needed to do it. Mr. Moss. You have said it extremely well. I would hesitate to put any money into a project on a standby basis, because it does not stand by very long, as you know. There is too much political pressure to use it in other areas. Mr. CRAMER. Well, your thought then is one that goes beyond what I was thinking of, as a matter of fact. Because of the pressure in given areas on given projects it may be that the gun would be loaded and triggered before it was really needed because of political pressure for projects. Mr. Moss. Particularly if the money is already there, Congresman. Mr. CRAMER. That is what I am talking about. Well, it is there because all the President has to do is transfer it immediately from any funds that are unobligated and then Congress has got to replenish those funds. I mean, constitutionally, can you, as a citizen, stomach that approach of Congress giving to the President such budgetary authority without review by Congres initially? Mr. Moss. If I may, Mr. Chairman, I have my local problems. Mr. Cramer, I was the first Republican ever elected to the local governing body in Fairfax, Va., in 87 years, but this I am addressing myself to today is not only to the local problem at all, but to the general concept of how this can best be administered with the least amount of interference from the national level. Mr. CRAMER. I thank the gentleman. Mr. BLATNIK. There being no further questions, thank you, Mr. Moss. We appreciate your statement. The hearings for today are recessed or are adjourned until 10 o'clock tomorrow morning. (Whereupon, at 12:50 p.m., the hearing was adjourned until 10 2.m. Tuesday, April 3, 1962.) STANDBY CAPITAL IMPROVEMENTS ACT OF 1962 TUESDAY, APRIL 3, 1962 HOUSE OF REPRESENTATIVES, Washington, D.C. The committee met, pursuant to recess, at 10:15 a.m. in room 1302, New House Office Building, Hon. George H. Fallon presiding. Mr. FALLON. Ladies and gentlemen, the Committee on Public Works is meeting this morning in the continuation of hearings on H.R. 10113 and H.R. 10318, known as the Stand-By Capital Improvements Act of 1962. Our first witness this morning will be the Honorable Henry W. Maier, mayor of Milwaukee, Wis. Mr. Mayor, on behalf of the committee I would like to welcome you here this morning and thank you for coming down. STATEMENT OF HON. HENRY W. MAIER, MAYOR OF THE CITY OF MILWAUKEE, WIS. Mayor MAIER. Mr. Chairman and members of the committee, I am very happy to be here and to appear before you today as a representative of the United States Conference of Mayors and the city of Milwaukee to make this statement concerning bills H.R. 10113 and H.R. 10318. I can heartily endorse these measures to speed up public works expenditures and to reduce unemployment during recession periods. On behalf of the United States Conference of Mayors, Mr. Chairman, I have here the resolution of the conference which I would like to read on behalf of the conference. RESOLUTION ADOPTED BY THE 1961 ANNUAL CONFERENCE OF THE UNITED STATES CONFERENCE OF MAYORS, MAY 14, 1961 PUBLIC WORKS Whereas modern and efficient public works are essential to a prosperous economy with continued economic growth and desirable urban development and redevelopment; Whereas the current backlog of State and local public works needs is in excess of $50 billion; Whereas State and local governments have been unable to raise the revenues necessary to meet public works needs; and Whereas the problem here presented is one of great national importance: Now, therefore, be it Resolved by the United States Conference of Mayors, That the administration and the Congress be, and are hereby, urged to (1) initiate an immediate analysis of the Nation's State and local public works needs and determine the actual size of the backlog, the rate at which existing facilities are becoming obsolete, and the rate at which new construction must be undertaken to meet the 485 demands of new population growth, (2) formulate ways and means of attracting a larger share of available capital funds into the public works, (3) provide assistance to State and local governments so as to encourage long-range programs of capital improvements and to further provide such State and local governments with technical assistance so as to improve fiscal planning and financing techniques, (4) strengthen and expand those existing programs which are now effectively encouraging the advance planning of public works and which are encouraging needed public works construction, and (5) enact a program of public works aid which will serve to spur capital improvements construction activity over and above normal levels at times of economic slump so as to accelerate employment. Mr. Chairman, the intent of each of the bills is a sound one. Each would set up governmental machinery which would, under certain conditions, permit the President to employ the powerful economic forces involved in accelerated Federal, State, and local public works programs. Either bill would fill an important gap in the fiscal policy machinery of the Federal Government designed to offset the dips of the economic cycle. I refer to the gap created by the essential need for a combined approach on all levels of government-Federal, State, and local-if public works programs are to help curtail recessions rather than intensify them. For individual cities and States are somewhat in the same position as individual citizens during recession periods. Often they are pressured to cut spending and employment at the very time the economy requires the stimulation of increased public works expenditures. The Federal responsibility in this matter, it would seem to me, is rather apparent. Only the Federal Government has the necessary taxation and borrowing powers to bring about an effective antirecession program. Without Federal assistance and initiative State and local governments have neither the budgetary flexibility nor the financial basis to combat the effects of recession on their own. Local governments, depending as they do on property taxes to finance the major part of their activity, have difficulty in maintaining a constant level of public works and certainly could not finance additional public works in times of economic stress. The property tax is inflexible, unjust, and highly regressive. Unless localities have Federal assistance to finance public works during such periods, they simply cannot provide necessary public facilities, property taxes cannot be raised, and municipal borrowing becomes next to impossible. While I recognize that public works programs represent only one facet of the Federal Government's efforts to ward off recessions, they can play a major role in dealing with the threat of the more serious setbacks involving widespread unemployment. They can buoy up the economy by putting more money into circulation, directly increas ing employment and creating a market for raw materials and equip ment. They have the byproduct effect of increasing the usable public facilities and services of the Nation at every level, providing long-term as well as short-term benefits. And, finally, the sort of program which is projected in these two bills will improve the financial stability of State and local governments at a time when they are most in need of relief. I cannot stress too much the importance of State and local public works programs as key antirecession measures. The very size of local public works programs means that a slowdown in this area would mean an immediate increase in unemployment. In 1960, local governments alone spent 17 percent more than did the Federal Government in all areas, excluding national defense and foreign aid. Local governments spent four times and State governments three times as much for nondefense capital outlay expenditures as did the Federal Government. These statistics, I think, well demonstrate the need for local, State, and Federal fiscal operations to complement each other— particularly in public works activities-to compensate for the downward movement of the business cycle. The Nation can ill afford a cutback in local expenditures during a recession because even a small decrease in local and State public works spending would offset major increases in Federal programs. If a permanent antidepression policy were established by the Federal Government, through a program of public works incentive grants to State and local governments-as advocated in these bills-local governments would be eager and able to serve as effective partners of the Federal Government in an antirecession program. On the local level, governments could swing into action immediately. To cite my own city of Milwaukee as an example, a city with a quarter of a century of long-term capital budgeting behind it, we always have a pool of projects in our 6-year capital improvements program which would make excellent antirecession undertakings. Many of them require no land acquisition and could move quickly from the idea stage through planning to actual work underway. Some of these projects would employ large numbers of unskilled labor-one of the first groups to feel the effects of a recession. Others require substantial orders of electrical equipment, steel, concrete, and other items that would boost industrial activity. If cities across the country were given the means to step up the pace of such projects—a means I believe these bills would provide a significant lift could be given to the Nation's economy at the time it needed it most. Once such a standby program has been put into effect, cities will be on notice to move further ahead in their public works planning and land acquisition programs to increase the number of projects always on hand for antirecession use. In the case of Milwaukee, for instance, we could probably advance our detailed planning so that our shelf of plans for bid letting is always a year ahead of where it otherwise might be. From a municipal budgetary standpoint this would be highly desirable, since it would make more detailed costs available at the time our budget estimates are considered. Since there will be additional costs involved in developing plans so a public works program can move rapidly ahead in time of recession, public works planning advances should be made available for this purpose. Repayment of these loans could be waived for projects gotten underway during an acceleration period as described in these bills. If the municipality chose to finance the planning of such works from its own funds, then an appropriate credit should be given toward the local share of the costs of the projects. If credits were allowed, the municipalities which used local funds rather than Federal funds to finance advance planning would suffer no penalty for doing so. the same time, there would be an incentive for localities to do their planning early, since the costs involved would be included in the final At accounting should the project reach completion during the acceleration period as defined by the act. For these reasons, I believe that the provisions relating to public works planning advances should be more realistic and generous than those contained in the administration's bill, H.R. 10318. The provisions in bill 10113 relating to the amounts authorized for allocation are, I believe, much more flexible and more likely to produce State and local matching appropriations than those in bill 10318. Under the latter bill, only half as much money is allocated for grantin-aid programs, which, as I have pointed out, produce a greater volume of work than do direct Federal projects. To use such a large proportion of funds for exclusively Federal projects would be to dilute the intended effect of the bills by decreasing proportionately the cooperation of local agencies and the number of works they would undertake at the time most needed. Because under bill 10113 more Federal dollars would be matched by equivalent State and local appropriation, I think its manner of allocating funds is substantially superior to that spelled out in H.R. 10318. I also think that bill 10113 is superior to bill 10318 in the manner it proposes to administer the program. Bill 10113 establishes a separate Office of Public Works Coordination and Acceleration, directed by a Presidential appointee of sufficient standing and stature to coordinate the various other Government units involved, such as the Department of Commerce, the Housing and Home Finance Agency, and other branches concerned with grants-in-aid programs and Federal works programs. A separate coordinator, I think, is to be preferred to an administrator who might have a special interest in one of the branches involved and lack the overall view that would seem necessary if the program is to work effectively. In summary, gentlemen, I am in favor of either bill, although I feel that the version submitted by Mr. Blatnik, H.R. 10113, is superior in many respects to H.R. 10318. Let me add that now is the time for such legislation to be enacted. We should prepare in advance for an effective program of Federal, State, and local governmental machinery to combat recessions through a coordinated program of increased public works. Only in this manner can the activities of these combined units, working together on all levels, be harmonized into a single, effective force to combat recessions while accomplishing substantial steps for the long-term public welfare of the United States and its citizens. Mr. FALLON. Thank you, Mr. Mayor. Are there any questions? Mr. FALLON. Mr. Baldwin. Mr. BALDWIN. Mr. Mayor, is Milwaukee now classified as one of the areas eligible for area redevelopment program aid, or an area with substantial unemployment? Mayor MAIER. No. Mr. BALDWIN. Has it been at any time since the Area Redevelopment Act went into effect a year ago? Mayor MAIER. No. Mr. BALDWIN. Thank you. Mr. FALLON. Do you have any further statement to make, Mr. Mayor? Mayor MAIER. No, sir. |