vigor, as is the entire program. I am confident that we are at last beginning to make progress in this vital field. The water pollution control construction grant program and the Hill-Burton hospital construction program are two major activities. in our Department which could be accelerated in times of economic decline. Other witnesses representing the administration have, I am sure, discussed in detail with you the specifics of the legislation under consideration. Therefore, I will concentrate in this statement on the role of our Department, the role it could play in any capital improvements acceleration program invoked by the President under the authority granted him in the legislation under consideration. In the first place, we will encourage and assist State and local governments in advance planning and receive reports of such plans. Second, we will continue to submit information on our programs for central compilation and analysis. Third, whenever the standby authority is invoked, we will submit recommendations for initiation or acceleration of eligible projects and programs, including grants, administered by us. Finally, when the funds have been allocated for our programs, we will proceed in accordance with the President's decisions. Mr. Chairman, there is no doubt but that the acceleration of Federal capital improvements programs will require a high degree of planning, priority establishment, and coordination among the various agencies responsible for construction programs. As a former Member of Congress and Governor, I have long been aware of the pressing problem of applying a limited amount of public funds to meet ever-increasing public needs, such as hospitals and antipollution facilities. Other facilities to serve community well-being also are deficient. In order to meet these needs with the limited public funds available and have the greatest possible impact on creating employment opportunities, careful planning must be provided. Priorities must be established. Mr. SCHERER. May I interrupt the Secretary at this point? You understand, Mr. Secretary, that if this law should pass and be invoked within, say, the next year, that in order to get that $2 billion, we would have to borrow $2 billion. There wouldn't be enough cash in the Treasury to pay for it. You said limited funds. are available. You pointed that out. Secretary RIBICOFF. That is right. I mean there are always limited funds available for what you want, but first, of course, there is the authority that the President would have to shift funds from one source to another, depending on where it would do the most good. Secondly, if money were needed to take care of our vital economy and employment, I believe under those circumstances borrowing would be justified. Obviously, incongruities such as the establishment of a public park or other recreational area along a polluted water body must be avoided. The pollution control activities must be timed to coincide with the recreational development. Coordination is essential in this vast field, and I am confident, Mr. Chairman, that this administration will approach capital improvements acceleration programs with this important concept in mind. ACCELERATION OF CAPITAL IMPROVEMENTS PROJECTS The antirecession objectives of the proposed legislation are well served by acceleration of hospitals and other health facilities and municipal waste-treatment plant construction. Past antirecession public works construction programs have been criticized because they would fail to produce the desired economic impact soon enough. The employment and purchasing-power effect of such programs were considered to take place too many months after a recession had been in evidence. Furthermore, the counteractive means were considered to continue in effect long after needed, even to the undesirable point of inflationary force. These probable results were considered to be inevitable because of administrative procedures, large-scale projects requiring much time in design and construction and slow payment schedules. H.R. 10318 overcomes these criticisms by requiring that only those projects which can be started within a reasonably short time and completed in 12 months be included. Also, the bill clearly establishes the criteria which indicate when a recession condition exists, eliminating dispute over this aspect. Furthermore, the bill provides safeguards so that the Federal financial assistance does not just replace State, local, or other expenditures. Thus, this bill is well adapted to meet the specific conditions associated with the downturn of the business cycle. In addition, the amendment to the bill proposed by the President today will make possible immediate acceleration of projects located in communities suffering from heavy unemployment at the present time. BACKLOG OF WASTE-TREATMENT PLANT NEEDS Since the inception of the waste-treatment plant grant program, construction has risen sharply. The total investment in these antipollution facilities today is 72 percent above previous years. Yet, a great backlog of need persists, especially in smaller communities. An accurate appraisal of existing municipal waste-treatment needs is necessary before future requirements can be estimated. In recognition of this fact, there was a comprehensive State-by-State survey of municipal waste-treatment needs made. Data forms were returned by all 50 States, the District of Columbia, Guam, Puerto Rico, and the Virgin Islands. These listed all communities requiring new sewagetreatment plants, expansion of existing plants, or additional treatment on January 1, 1962. The questionnaire included type of present treatment, population served, type of treatment required, and anticipated population. The Division of Water Supply and Pollution Control of the Public Health Service processed the data for the conference and assisted in the preparation of this report. All data were verified before final processing and analysis. The survey disclosed that 5.290 communities serving nearly 45 million people require new sewage-treatment plants, plant enlargements, or additional treatment. New plants serving approximately 24 million persons are needed in 4,244 communities. Additions to existing facilities are needed in 663 communities serving 14 million persons. Additional treatment is needed in 413 communities serving 6.5 million persons. The estimated cost of the backlog of municipal waste-treatment needs is $2 billion. Calculations by our department indicate that the elimination of this backlog in 10 years, together with need imposed by population growth and obsolescence, will require an average annual expenditure of $600 million. Over 2,000 applications for financial assistance under the terms of the Federal Water Pollution Control Act are already in process or preparation. These project needs exist nationwide. Furthermore, more than 90 percent of the projects are in communities of less than 50,000 population. The total cost of these projects is $1,191,087,093. The grants requested in the applications total $227,417,613. The budget request for fiscal year 1963 to meet these requests is the fully authorized $90 million. Obviously, additional funds can be put to immediate use throughout the country. Simply increasing a State's allotment will not solve the main problem facing many smaller communities, especially those in labor-surplus areas. In the waste-treatment plant construction program, for instance, the Federal share cannot exceed 30 percent of the cost of the project. The remaining 70 percent must be shouldered by the local community. The provisions in H.R. 10318 will entitle a financially hard-pressed community to a grant of 50 percent. In addition, the bill authorizes loans to help make up the local share. These two provisions will provide a great stimulus to construction of waste-treatment plants. In addition to the stimulation of demand manifested by increases in employment and production caused by the construction of these projects, there is another definite economic impetus provided. That is, the improvement in water quality resulting from sewage treatment often overcomes the handicap to economic development involved in polluted waters. The coexistence of bad pollution and severely depressed local economies is becoming more conspicuous. The handicap is evident in the restriction or prevention of industrial growth because of water so bad as to be unsuitable for manufacturing purposes, losses of water-related recreational opportunities, and the consequent decline in community attractiveness and well-being-qualities necessary to attain progress and prosperity. The removal of this pollution handicap, therefore, provides an impetus to local and regional economies and assures a protection for future generations. BACKLOG OF HOSPITAL AND HEALTH FACILITIES NEEDS The construction of hospitals and other medical facilities is another area covered by H.R. 10318 in which the Department of Health, Education, and Welfare has been active. Since 1946, over 6,000 projects have been approved under the Hill-Burton legislation, and the organizational framework and administrative machinery for operation of the program are readily adaptable to any program of accelerated construction in times of recession. Not only has the Public Health Service acquired and developed a highly trained staff which specializes in the work of planning and designing health facilities, but, in addition, the technical staff of each State agency is available for these purposes. The availability of this established Federal-State organi zational structure would simplify and expedite the administration of the health facility construction portion of this bill. A wealth of data and reports attests to the need for additional hospitals and health facilities throughout the country. The types, the areas, and the steps necessary to meet that need will be the subject of the special study of this program which the President requested in his recent health message. A summarization of the gross needs estimated by the States is prepared annually by the Public Health Service on the basis of information provided by State agencies. The report prepared for fiscal years 1963 and 1964 shows that 1,739 projects costing a total of more than $2.3 billion and using $987 million in Federal funds could be approved if there were no limitation on Federal assistance. For fiscal year 1963 alone, the report shows that 1,158 projects costing a total of $1.6 billion and using $597 million in Federal funds could be approved. In light of the Department's budget request of $170 million for health-facility construction, it is obvious that additional funds made available for hospital construction could, of course, be used advantageously to further build up the basic health-facility resources of this Nation. The construction of health facilities in a community not only stimulates employment during the construction period but, in addition, creates permanent employment opportunities. For example, we estimate that the health-facility projects approved under the Hill-Burton program, when completed, will provide job opportunities of various kinds for an estimated 220,000 individuals. CONCLUSION Mr. Chairman, it is essential that every possible precaution be taken to insure that prompt and effective action can be taken to head off recession and to alleviate the economic and human consequences of prolonged unemployment and lower economic activity generally. During periods of recession and high unemployment we know that programs to promote the Nation's health, education, and welfare often are the first to suffer cutbacks and restrictions. State and local revenues fall, making it difficult to finance public programs in these fields. At the same time, decreased employment places a greater burden on the agencies charged with administering public assistance programs. Lower earning power makes it more difficult, if not impossible, for workers to pay for medical services, to retain their hospitalization insurance, and to continue to support their children's education. And finally, prolonged depression has even greater effects on eroding away a man's dignity and his ability to meet his family's needs in the whole area of their health and well-being. We do believe this to be a most important bill and we trust that it will have the speedy approval of this committee of the Congress. Mr. FALLON. Thank you very much, Mr. Secretary. Are there any questions on my right? Mr. DAVIS. Mr. Chairman, it seems that we can't have any witness today talk over 5 minutes without talking about his pollution bill. That is the Blatnik bill. Mr. BLATNIK. No comments. Mr. Chairman, we are certainly glad to have the Secretary here. We welcome him and his aids. We appreciate your accommodating us on the time schedule. He came in from an out-of-town engagement to be here. I am very impressed with the statement the Secretary made in the field of water pollution facilities and hospital facilities. I commend you on your statement. Mr. FALLON. Any other questions on my right? Mr. CRAMER. Mr. Secretary, I have a couple of questions I would like to ask. Of course, many of us are concerned with the proper measures for meeting unemployment situations. I am very much. interested in your suggestion at the bottom of page 5, for instance, that the proposed $600 million amendment will make possible immediate acceleration of projects located in communities suffering from heavy unemployment at the present time. That leads, No. 1, to the conclusion, does it not, that the $2 billion set-aside program for public works is not channeled into and is not limited to unemployment areas, isn't that right? Secretary RIBICOFF. Well, my understanding is the $2 billion is available for a general nationwide situation that requires attention. The $600 million is available today to the some 900 communities that are pinpointed as communities which need help because of unemployment right now. Mr. CRAMER. But as to the $2 billion bill, no one should be fooled into believing that that accelerated public works program could be channeled according to the directions of Congress necessarily in unemployment areas. It could be sent into some of the least job problem areas. Secretary RIBICOFF. I doubt it. I think that you do have to give the administration some credit for commonsense, sir. And the priorities I am sure would definitely go to the areas that need it most. Mr. CRAMER. It doesn't say so in the bill. Secretary RIBICOFF. Well, then, if this is the case, it would be very simple for you to amend the legislation so to read, and I would approve that. It would take a simple wording Mr. CRAMER. If you are going to do that, there wouldn't be much use to have two bills, then, because the $600 million has as its purpose channeling projects into the depressed areas. Secretary RIBICOFF. That $600 million is for depressed areas, that we know now and can identify. The $2 billion is a bigger program that is triggered into being when the formula comes into effect and |