very sizable funding programs. As I understand from your own studies, approximately 80 percent of it was non-Federal. I think when we look at other different Federal funding programs, we would be hard pressed to come up with other Federal programs that are able to generate that kind of support outside of Federal funding, which I think is an impressive factor.

Mr. ARNETT. Thank you.

The CHAIRMAN. Senator Taft.

Senator TAFT. Thank you very much, Mr. Chairman. Mr. Arnett, does the agency at the present time have any congressional strategy? Mr. ARNETT. You mean like it was supposed to have had back in November, or so; no.

Senator TAFT. Do you have an enemies list? I refer to an article in the Washington Post, February 17. I take it this memorandum is no longer operative, if it ever was operative?

Mr. ARNETT. I have never laid eyes on it. I would love to lay hands on it.

Senator TAFT. I think we might be able to help you.

Mr. ARNETT. Good.

Senator TAFT. What do you view as your role and the agency's role in determining what the future of OEO will be?

Mr. ARNETT. Well my own role for the moment, after having attempted to get it back on the road these 24 days, is to keep it on the road, while the debate on the future of OEO continues.

During that period of time the law that is on the books is the law that I will administer.

Senator TAFT. I understand that. That is really not the question I am asking. The question I am asking is: What do you see as your role and the role of the agency insofar as assisting the Congress and assisting the administration in determination of what the proper future of the agency should be?

Mr. ARNETT. I would see my role over the next weeks and months of being up here as much as possible to discuss with the Congress the future of OEO. I can tell you at this point in time, as I mentioned earlier, I have no personal agenda. There is a great deal of learning that I have to do.

I just hope that my learning curve is high enough so that those things which have occurred over the last 7 years I can absorb, so that I can intelligently come forward with some recommendations as to where we should go.

Senator TAFT. You have already indicated you feel that the agency should be agile, mobile, and hostile, and that the agency should be in effect an expeditor and advocate?

Mr. ARNETT. Yes.

Senator TAFT. I was on the Labor Committee in the House when the act of 1964 was passed. My recollection is that the purpose of the agency, when we set it up was to be an advocate for the poor in the country and a spokesman for the poor. A needler of other agencies and an expeditor of programs. I also think the agency was to be an experiment with differing concepts? The agency was to come up with the trial programs and breakthroughs that could be implemented to help alleviate poverty.

Do you see that role still as proper?

Mr. ARNETT. I see that as being the principal role.

Senator TAFT. How are you going to work toward that objective? Do you not need money for the agency to operate on?

Mr. ARNETT. With no money requested. I am banking on money. For instance, under the continuing resolution at this moment, we have R. & D. moneys, still at OEO. There is a very interesting provision in the act that allows OEO to cream off the top, as it were 20 percent of funding of programs delegated to other agencies.

Senator TAFT. You can pull back 20 percent of what is funded for Labor, if you wish to?

Mr. ARNETT. Yes. It is under 616 of the act.

Senator TAFT. Do you plan to do that?

Mr. ARNETT. I understand that will be very difficult to do, but I plan to try to do that.

Senator TAFT. Would it not be easier to try to obtain funding for the agency itself?

Mr. ARNETT. Yes, it would be much easier to have 232 R. & D. moneys. I would absolutely agree.

Senator TAFT. During the consideration of the legal services legislation in the House, there seemed to be some confusion as to exactly what the administration position was on the subject.

This committee and the Senate are expected to consider the legal services legislation in the near future, and I think it would be most helpful if you could tell us what the administration's position is on this matter at the present time.

Mr. ARNETT. Well the administration's bill is the bill which was submitted to the committee, not the bill which emerged from the floor. Beyond that, I am in no real position to comment, because my knowledge base on it is minimal at this moment.

Senator TAFT. You do not think the administration's position has changed?

Mr. ARNETT. It is my understanding that it has not.

Senator TAFT. Assuming that a legal services corporation is created in the near future, what are the plans for providing interim funding for existing OEO legal services programs?

Mr. ARNETT. Under the continuing resolution and until such time as the corporation is formed, legal services will remain at OEO. There is as a matter of fact in the House appropriation for 1974, for OEO, $71.5 million, so either under the continuing resolution or under the appropriations.

Senator TAFT. For legal services?

Mr. ARNETT. There is $71.5 for legal services in OEO.

Senator TAFT. Would you anticipate that there will be a lag period, before a legal services corporation can become operational and therefore it is necessary to provide interim funds?

Mr. ARNETT. Yes, I do.

Senator TAFT. On a similar point, what are the plans for interim funding for community action programs until special revenue sharing programs can be established?

Mr. ARNETT. As I indicated earlier, with moneys from 1973 that I had, to the extent possible, all of CAPS had been forward funded. About half of them forward funded through the first quarter, and the remainder forward funded through the second quarter.

The $185 million that has emerged from the House in that appropriation will be a sufficient amount coupled with that forward funding for CAPS to maintain their present funding level.

Senator TAFT. It has been somewhat difficult to obtain information from OEO, at least as far as my office is concerned. Maybe because I was on one of those lists. There has been a great deal of uncertainty on the Hill as to the status of many programs under OEO, to put it mildly. What steps do you plan to take to improve congressional relations and improve access to information for the Congress insofar as OEO is concerned?

Mr. ARNETT. Extreme steps. It has been difficult for me to obtain information. Every Senator that I have visited, every Congressman that I have visited, has told me the same tale of woe. I will devote attention to that, just as I must to personnel and reorganizational problems I face. Now that my fiscal year ended last night for the third time in 3 weeks, that is my next priority.

Senator TAFT. Mr. Arnett you are faced with a very difficult task. The problem as I see it has been that OEO has become a political football over the years. I do not think there is any exclusivity to the politicization of the operation on both sides of the fence. Do you think you can get this agency out of politics and back to the job of doing something for the poor?

Mr. ARNETT. Senator, all I can say in response to that is I will try. I know exactly what you are saying.

Senator TAFT. Let us be a little more specific about the most difficult part of it, however. That is, insofar as the community action agencies are concerned. One of the roles of the agency originally conceived, I think, was to try to create political awareness, so that the poor and community action groups could actively advocate positions for themselves, political and economic and otherwise.

How are you going to resolve these two goals? If you desire to take the agency out of politics and desire at the same time to try to create awareness of the community about the plight of many of the poor you seem to face two conflicting objectives.

Mr. ARNETT. I have no quick answer. It almost amounts to a conundrum. I really cannot say at this point. I have not had time to dwell on these things. I know the problem is very vivid.

Senator TAFT. Thank you very much, Mr. Chairman.

The CHAIRMAN. Senator Mondale.

Senator MONDALE. Thank you very much, Mr. Chairman.

I get the impression that the difference between you and Mr. Phillips is what kind of funeral director we want. Mr. Phillips was an overenthusiastic director, who not only wanted the funeral, but tried to kill the person so he could hurry it up.

On the other hand, you are a reluctant director, who would provide comforting music and a sense of regret and concern, but nevertheless advocate the funeral.

Would that be an accurate distinction?

Mr. ARNETT. No, it would not be.

Senator MONDALE. Would you tell me where I am wrong?

Mr. ARNETT. Well, in the first place I do not advocate the funeral. Senator MONDALE. You support the extension of OEO?

Mr. ARNETT. I support the extension of those programs in OEO that by law continue until the conclusion of EOA

Senator MONDALE. In other words your funeral would be in July 1974, that is what I said?

Mr. ARNETT. If you choose it to be.

Senator MONDALE. No, no. I am asking what you support.
Mr. ARNETT. No.

Senator MONDALE. Would you support a later funeral.

Mr. ARNETT. Not necessarily.

Senator MONDALE. That is an awful place to be a dying manMr. ARNETT. I think what I am really asking for is time to determine whether or not there is a necessity for a funeral.

Senator MONDALE. In other words, you are not sure whether the patient should die?

Mr. ARNETT. That is right.

Senator MONDALE. That is an improvement. I must say that I have been pleased by some of the actions that you have taken, and I think some of your rhetoric is certainly a vast improvement over what we heard from Mr. Phillips. But I was somewhat disturbed by a statement that was attributed to you in the Louisville Courier Journal, on February 25 this year, and I will quote: "I am convinced the poor have been taken for a ride. They have been used by one of the biggest collection of ripoff artists ever assembled. I am convinced what we are doing here is in the interest of the poor people of this country."

Is that an accurate statement? If so, who are the ripoff artists you refer to and what actions did you have in mind when you said you were acting in the interest of the poor?

Mr. ARNETT. OK

Senator MONDALE. Is the statement accurate?

Mr. ARNETT. It is accurate if I may construct the context.

Senator MONDALE. Some people who are sort of uninformed would take that as a criticism of OEO.

Mr. ARNETT. It is. It is meant to be a criticism of the way OEO has in the past spent enormous amounts of money for consultants principally for studies that are on the shelf gathering dust. It almost goes to the point that Senator Williams made in his letter to me on the 31st. I am convinced that there will be an inordinate amount of money that should have gone to poor people that simply has not.

Senator MONDALE. Are you proposing a reform of that process or a termination of it?

Mr. ARNETT. I would say a reform of it.

Senator MONDALE. When you asked for nothing, would you not say that is a termination?

Mr. ARNETT. In that context, yes.

Senator MONDALE. So that you speak reform, but you advocate destruction?

Mr. ARNETT. No, I do not.

Senator MONDALE. What is the distinction?

Mr. ARNETT. The reform, I think, comes in the context of the debate that occurs when the administrator asks for zero and the Congress responds with whatever. In that engagement there will be an OEO. This is where I find myself

Senator MONDALE. You keep describing the situation, and I want to know what you believe. You are up for confirmation. Now the first thing you said is there are too many consultants. They are ripoff artists. Are there any other ripoff artists? You said this is the biggest collection of ripoff artists ever assembled. That is in the superlative, I believe. You must have had more than just a few of the consultants that Mr. Phillips hired, you must have had some others in mind. Mr. ARNETT. His consultants?

Senator MONDALE. Were they all right?

Mr. ARNETT. We are now down to 16 of those.
Senator MONDALE. Were they ripoff artists?

Mr. ARNETT. Some may have been, I do not know.

Senator MONDALE. What other ripoff artists did you have in mind? Mr. ARNETT. The principal ripoff artists that I have in mind are the $1 million, $2 million, what have you, odd dollar studies and evaluations that have been performed over the last 7 years. Enormous amounts of money have gone into evaluations, studies, and research about poor people. I do not think that the product has warranted that enormous investment of money.

Senator MONDALE. Do you think the OEO should have a role in research and demonstration?

Mr. ARNETT. Absolutely, a central role in research and demonstration.

Senator MONDALE. With the zero budget, what kind of role will they be able to perform?

Mr. ARNETT. I was indicating to Senator Taft, that I am not assuming that there will be a zero appropriation. The request was a zero budget, but I am not assuming a zero appropriation. There will be research and development, moneys available to OEO.

Senator MONDALE. Have you asked for funding for 232?

Mr. ARNETT. No funding was asked for 232.

Senator MONDALE. Are you going to research with no money?

Mr. ARNETT. Senator, it is what we have been fencing about all morning. It is the budget request as opposed to what I assume to be an appropriation or continuing resolution.

Senator MONDALE. Would it be fair to say then that you would like to see the Congress prevail in the continuation of some of this funding so that you may carry out a role as an advocate of the poor in a long range of activities?

Mr. ARNETT. Yes.

Senator MONDALE. Terrific. Congratulations. That is wonderful.

I think it is fair to say you just advocated the extension of OEO. I would like to turn if I might-you did not?

Mr. ARNETT. I did not.

Senator MONDALE. I would like to know.

Mr. ARNETT. Yes. Somebody said I was standing for the crucifixion, I was just playing my part.

Senator MONDALE. You will find that if you take the position you just took and keep it, you will have a lot of friends here, a lot of them. Mr. ARNETT. I realize that.

Senator MONDALE. Could you tell us what your views are toward legal services?