Hon. JOHN A. BLATNIK, NATIONAL SOCIETY OF PROFESSIONAL ENGINEERS, U.S. House of Representatives, Washington, D.C. DEAR MR. BLATNIK: This will supplement our letter of March 15, 1962, in which we advised you that the appropriate committee of our society would shortly review the pending legislation on the Public Works Coordination and Acceleration Act (H.R. 10317). After careful review, it is our conclusion that while the society does have an interest in certain features of the pending legislation we are not in a position to express any opinion on the basic question posed in the legislation regarding the acceleration of public works to meet slumps in the economic position of the country. This is primarily a question, in our opinion, for consideration by those more experienced and competent in such fields as economics and national public policy. However, we would like to comment for the record on two aspects of the pending legislation as follows: (1) If there is to be an expansion of public works activity by the Federal Government, we believe it is of vital importance that there be a proper organization for coordination and supervision of these programs in the interest of keeping the President, Congress, and other interested persons informed. Therefore, we would recommend whatever steps may be required to provide that coordination and supervision, and would further recommend that the advice and counsel of qualified professional engineers be utilized in this function. This comment particularly is pertinent to your bill, H.R. 10113, which would establish the Office of Public Works Coordination and Acceleration to encourage the coordination of planning policies for the construction of public works in the United States. (2) We would recommend that the existing public works programs, or any additional public works programs which may be approved, have the benefit of qualified professional engineering skills necessary to accomplish the advance planning which would avoid crash programs resulting in wasteful expenditure of public funds. This comment is pertinent to section 13 of your bill amending the present advance planning law under the Housing Act of 1954 and section 10 of H.R. 10317, by Mr. Buckley, which would remove the present $58 million limitation on the total of advances of public works planning. We respectfully request that this letter be incorporated in the record of the hearings. If we may supply any additional comment or information to assist the committee, we would be pleased to be of service. Very truly yours, PAUL H. ROBBINS, P.E., STATEMENT OF DAVID J. McDONALD, PRESIDENT, UNITED STEELWORKERS OF AMERICA I would like to express my appreciation for the opportunity to present our views on this most important issue of emergency public works. It is our feeling that Presidential authority to act quickly and effectively in initiating and speeding up public works will make a significant contribution in aiding the Federal Government to live up to its moral, as well as legal obligations, to "promote maximum employment, production, and purchasing power." I would also like to add that it is particularly gratifying to appear before you on a measure such as this, for in public works we have a countercyclical device with an impact on jobs and purchasing power that does not wait for "filter up" or "filter down" economic effects. Public works does not treat just the symptoms of unemployment. It provides jobs as well as purchasing power and, as a very important coproduct, we get the improvements so badly needed in our Nation's stock of of public capital. Thus, we have here a measure that provides jobs, not doles. We have a measure that will provide much needed additions and improvements to community facilities-this is certainly not a makework, leaf-raking scheme. This legislation will not encroach upon States' "rights" for it is up to the State and local bodies to plan, schedule, and initiate their own programs-it provides assistance without infringing. We of the United Steelworkers of America are in the unenviable position of being able to attest first hand to the suffering and degradation brought about by unemployment. The Steelworkers, perhaps more than any other worker group in our country, have felt the traumas of economic recession. Whenever our economy softens we are among the first to feel it; a disproportionately large number of our workers are affected by it; and we are among the last to know that an upturn exists. Underlying all this we find that due to rapid technological change and its concomitant increased productivity, each economic downturn leaves us with a permanent scar since many of the temporarily laid-off find that their jobs have been permanently lost. I would like to submit the following table which I believe clearly illustrates this point, as well as our concern for appropriate measures. This table lists the turning point dates (both high and low) of each of our business cycles following the Korean war. For each of these dates we have shown the number of production workers employed in the basic steel industry. The difference between the number of jobs from high point of the cycle to the recession low indicate the number of jobs lost during the downswing. The decline in number of employees from cycle high to the next high shows the number of jobs permanently lost. Source: U.S. Department of Labor, Bureau of Labor Statistics. Summing up the table, we see that at the peak of the first post-Korean business cycle, average production worker employment in the basic steel industry was at 632,800. At the bottom of this cycle, only 535,100 jobs remained, representing a loss of 15 percent. During the ensuing pickup, of the 97,700 jobs lost, only 70,000 were picked up, resulting in a permanent loss of 27,700 jobs. The same was true in the last two cycles, only more so. And, over the entire period we in the industry experienced a permanent loss of 117,300 production worker jobs, or 18.5 percent of the 1953 work force. For all manufacturing, from July 1953 to January 1962, there was a permanent job loss of 1.97 million, or 14 percent, as compared to basic steel's 18.5 percent. During the 1960-61 downturn, total manufacturing production worker employment fell by 9 percent, as compared to the 23-percent drop experienced in basic steel. Thankfully, due to the economic policies of the present administration, the upturn from the 1960-61 recession is continuing and production and profits have reached new peaks. Unfortunately, although improving, the unemployment figures do not indicate a vigorous upturn. During the 1948-53 business cycle, unemployment averaged 4.1 percent of the labor force. It was 4.3 percent from 1953 to 1957 and grew to an average of 5.6 percent during the 1957-60 cycle. Thus, the postwar experience has shown a continually growing trend toward increased unemployment regardless of where we are in terms of production and profits. Although it is too early to tell what will happen when our current cycle peaks, indications are that this trend may not continue. However, most experts feel that unemployment will still not get below 5.5 percent for any significant period in the near future, let alone down to the 4-percent level that the administration considers as an appropriate target. We of the United Steelworkers, and I am sure that I can speak for the entire labor movement on this matter, have long emphasized the need for adequate measures to stem this tide, to generate the economic growth necessary for improved living standards and to compensate for the rapid increases we have been experiencing in our Nation's productivity and population growth. If the demand for our Nation's goods and services does not keep pace with our potential to produce, and it has not, the growing gap between output potential and consumer demand means more idle capacity, unemployment, and general economic waste. We have viewed with a great deal of satisfaction this administration's willingness to cope with the weaknesses it inherited in our economy from the previous administration. We have seen a broadening of minimum wage coverage for the first time since 1938; there has been a more enlightened approach to monetary policy and debt management; action has been taken in the fields of housing, urban renewal, and Government procurement; and we have also witnessed the passage of such forward-looking bills as the Area Redevelopment Act and manpower development and training. All these measures will serve to underpin our economy and contribute significantly to the growth that is so badly needed, thereby damping and hopefully reversing this trend to evergrowing levels of unemployment. But, as we all know, a problem still exists. At this time of unprecedented levels of production and profits, 4.5 million workers are still unemployed. Unfortunately, these workers are ill prepared to wait for trends and basic underpinnings to have their impact. They depend on each week's pay check for the necessities of life. They can boast little or no savings and they possess little in the way of valuable property which can assist them in time of need. The job before us is twofold. We must build into our economy the programs needed to create and sustain adequate economic growth through measures such as improved unemployment compensation, income tax reform, a dynamic Federal monetary and fiscal policy that encourages, rather than aborts, economic growth, and so forth. But, our present, and I repeat "present" economic conditions cry out for more. Our economy can now boast many built-in stabilizers that do much in the way of mitigating economic downturns. However, if we are to improve our tools for dealing with recessions, measures are also needed that can be effective immediately as conditions warrant, and curtailed when no longer necessary. Two such measures have been proposed by this administration. One would grant the President standby authority to temporarily reduce income taxes, and the second is the public works bills we are discussing today, H.R. 10318 and H.R. 10113. These public works bills would "enable the President to take quick and effective action to stimulate the economy * * *." Both, however, in the form in which they now appear are geared to fighting the next recession. We cannot deny the importance of this, and it is certainly practical to repair the roof while the sun is shining. Unfortunately, the cliche does not really apply since the sun is not shining for 4.5 million people. We do wish to go on record as being wholeheartedly in support of the basic principles incorporated in both these bills. It is, however, our profound hope that this committee will see fit to report out a bill that will do something about starting public works right away, to deal with present problems, as well as setting up the machinery for weathering the storms of future recessions. President Kennedy, in his letter of March 26 to both the Senate and House Public Works Committees, has recognized this current need by suggesting an amendment providing for a $600 million expenditure for public works over the next 2 years. Although we are gratified that the administration has so expressed its awareness to the problems of today, stretching such a limited amount of money over a 2-year period will not do enough to provide the stimulus the economy needs. In order to have maximum impact, we propose that this expenditure be made over a period not exceeding 12 months. But what of public works in themselves? Despite our country's ability to produce and its vast riches, we have not been meeting our human, public service needs. As a result of population growth, industrial expansion, and the continuous shift to city and suburban living, our public facilities have been pressed far beyond capacity. We have found, especially since the end of World War II, that our public service needs have grown at a much faster rate than our economy generally. One need only mention, in this connection, the growing problems of the Nation's urban areas including transportation, parking, slums, and school shortages. We are all aware of the congestion in our schools. By 1970 new enrollments in elementary and secondary schools are expected to be 25 percent greater than in 1960, almost double that of 1950. This is not to mention the need for facilities for higher education. Increased leisure time and higher living standards have created a pressing need for expanded recreational facilities. We are rapidly approaching serious problems in our Nation's water supply. Extensive urbanization has created a dire need for slum clearance and housing and our public health facilities must be expanded if we are to improve, as well as maintain, our Nation's health. The President's Council of Economic Advisers has reported that, despite the rapid growth of these needs, new nondefense public constructions, as a fraction of gross national product, was essentially unchanged in the 1950's from the levels of the 1920's. The 1961 Senate hearings on the Emergency Employment Acceleration Act (S. 986) brought to light an impressive amount of data vividly portraying our public service needs and the backlog that has been accumulated. Pere F. Seward of the Housing and Home Finance Agency, in testifying on this bill, concluded that State and local governments plan to borrow over $10 billion during the next 2 years for community facilities. He also presented data indicating that expenditures for State and local construction of public works would increase by $8.5 billion, or almost 40 percent in the 18-month period ended December 1961, if authority and funds were available. To conclude, the bills we are discussing today will contribute toward alleviating unemployment in the future and to providing urgently needed additions to our Nation's stock of public capital. We cannot dispute the importance of this, but the unemployment problems of today must also be met. It is our hope that this committee will recognize the importance of all these needs and see fit to report out a bill that also incorporates the amendments we have proposed. Mr. BLATNIK. If there are no further witnesses the public hearings are now concluded. We hope to have the printed copy of the hearings available for us. In the meantime, the Chair will consult the men or the leadership at the most convenient time for an executive session. It will certainly not be this coming week. There will be some time elapse. The hearings on this legislation are concluded. The meeting is adjourned. (Whereupon, at 12: 40 p.m., the hearing adjourned.) (The following was furnished for insertion:) Hon. CHARLES A. BUCKLEY, Chairman, Committee on Public Works, House of Representatives, Washington, D.O. U.S. SENATE, Washington, D.C., March 21, 1962. DEAR MR. CHAIRMAN: The standby Public Works Act of 1962 is presently pending before the House Committee on Public Works. It is my understanding that hearings on this bill will be held shortly. Many communities in the State of Michigan have expressed great interest in the enactment of this bill. Testimony as to the backlog of needed municipal public works and as to the assistance this legislation would give in alleviating unemployment has been fully documented by many Michigan communities. Last year when similar legislation was being considered, I undertook a survey of Michigan cities as to the public works projects which could be under construction within 90 days of the initiation of such a program-22 of the 35 cities replying indicated that public works projects amounting to over $94 million could be under construction within 90 days. Recovery from the current recession began last year and it was hoped it would be accompanied by a sharp decline in the unemployment rate. As you and the members of your committee know, this has not been the case. In Michigan, statewide unemployment in February stood at 9.2 percent. Some communities in our State had more than 20 percent of the labor force unemployed. In these areas more than "standby authority" is needed. Hopefully, your committee, in its consideration of this legislation, will be able to develop amendments which would make some of the grants for State and local public works immediately available. These should be available, I believe, to those communities where a substantial labor surplus continues and the present recovery has not brought about a significant drop in the unemployment rate. If a substantial improvement in the employment picture is not evident in the next few months, it is desirable that funds for areas of substantial labor surplus be available this spring. Such a plan would seem to me clearly consistent with President Kennedy's desire to have available public works authorizations to counteract a new recession. If a substantial drop in overall unemployment does not occur in the months immediately ahead, the danger signs are sufficient that Congress should ready now a public works program to alleviate what would then be an intolerably high level of joblessness. Thank you for your consideration of this proposal and every best wish, Sincerely, PHILIP A. HART. Mr. CHAIRMAN. We will next hear from Congressman Rains of Alabama. STATEMENT OF HON. ALBERT RAINS, OF ALABAMA, ON PUBLIC WORKS LEGISLATION Mr. RAINS. Mr. Chairman and members of the committee, I am very pleased to be here today to testify on the public works employment legislation you are now considering because this is a field in which I have long been interested and one in which I strongly believe we need prompt and vigorous action. Because of my deep concern for the persistent high level of unemployment which continues to be our most critical domestic problem, I introduced a bill earlier this session to authorize a new program of Federal grants for local community facilities much along the lines of the recent administration proposal for $600 million in public works grants to be available immediately. Let me say at the outset that I am in sympathy with the general objectives of the standby public works program proposed by the administration. Frankly, however, I am a great deal more interested in the provision for immediate assistance. I hope no one will let the standby proposal obscure the need for action here and now. Unemployment today is far too high, just as it has been continuously for the past 5 years. I believe the Congress has a responsibility to take immediate, forthright steps to attack the present problem of unemployment. The gains in economic activity over the past year have been encouraging but they are by no means enough to make us complacent. Unfortunately, all too many were misled by the recoveries from the 1953-54 recession and the severe 1957-58 recession. Both times the first signs of upturn were used to thwart efforts to promote full and lasting recovery and both times we were left with a level of unemployment which was ominously higher. The fact is that this Nation has not achieved anything approaching full production and employment for a number of years. We must not allow ourselves to be misled again by those who say it is too late to do anything. If we fall into this trap, I predict that the current recovery will again fall short of providing all the jobs we need to put the unemployed back to work, take care of the growth in the labor force, and offset the impact of automation. I do not want to overemphasize the dangers of the recent setbacks in business activity but, at the same time, no responsible person can ignore them. In the early months of this year we have seen a number of economic indicators slip backward. Perhaps the most striking decline has been in homebuilding activity, which has declined for |