STATEMENT OF HON, HENRY M. JACKSON, A U.S. SENATOR FROM Senator JACKSON. Mr. Chairman, I will be very brief. First I want to associate myself with the remarks made by Senator Magnuson. We are both delighted to be here to present our Governor to the committee. He can relate firsthand the problems that are facing our State. Mr. Chairman, I want to express my appreciation to the chairman of your subcommittee, Senator Montoya, and the ranking Republican member of the committee, Senator Baker, for the excellent hearings they held in Seattle. The Governor testified at that hearing, and there is no need to duplicate his testimony. Members of the subcommittee are completely familiar with the employment and economic problems facing our State. Mr. Chairman, with the committee's permission I would like my entire statement to appear in the record together with an explanation of the bill, S. 1832, the Economic Disaster Area Relief Act of 1971, Senator Magnuson and I introduced yesterday. This bill was previously introduced as an amendment to the measure now in conference committee. It is of course, up to the committee to decide how to handle the substantive matters which are raised in connection with the Economic Disaster Area Relief Act of 1971. The sole purpose of the Economic Disaster Area Relief Act is to give to the President of the United States the necessary flexibility to, bring together all of the Federal agencies in a given region where there is an economic disaster and to utilize the resources there in the most advantageous way. In some areas certain agencies can play a greater role than others in relieving an economic disaster. Their efforts will be funded with a $2 billion authorization for Federal economic recovery assistance. This act is patterned after the Disaster Relief Act which has been in effect for many years. Certainly the human distress caused by economic disaster is equal to that resulting from natural disasters such as floods or fires. I think that the concept of economic disaster relief affords a unique opportunity to move with flexibility in those areas which have special problems. For example, some communities might want to take advantage of model cities programs or mass transit development-whatever will maximize the opportunity for employment and develop solutions for problems within that region. The President would begin utilization of an area by designating a regional coordinator for the area decreed to be a disaster area. Mr. Chairman, I ask permission that a summary of the bill in narrative form be included with my statement. Again I want to express our deep appreciation for your generosity and courtesy and the special effort that you made to bring your subcommittee to the Northwest and also for holding this hearing today. (The statement and summary follow :) STATEMENT OF HON. HENRY M. JACKSON, A U.S. SENATOR FROM THE STATE OF Mr. Chairman, I want to thank you and the members of the Public Works Committee for this opportunity to appear before the Committee. 64-349-71 -2 www As members of the Committee are aware, the senior Senator from Washington (Mr. Magnuson) and I have introduced a comprehensive and far-reaching "Economic Disaster Area Relief Act of 1971." This measure was introduced on May 5 as S. 1779 in the form of an amendment to the Economic Development Act of 1965. On May 11, the bill was reintroduced as a separate measure to establish a separate and distinct program of economic assistance. Both of these measures have been referred to this Committee. The purpose of the Economic Disaster Area Relief Act is to authorize the President of the United States to declare areas of the Nation which meet certain economic and employment criteria to be Economic Disaster Areas and to extend a meaningful program of Federal assistance to the people who live in these areas. Hundreds of regions of the country are currently experiencing critical economic downturns and millions of able-bodied American working men and women are out of work. They are the victims of a man-made disaster over which they had no control and which has had a more devastating economic impact on the people of this country than any natural disaster we have ever endured. Mr. Chairman, we are all familiar with the tragic statistics which document the rising unemployment and the spreading economic decline. The statistics bear grim testament to the need for prompt and bold action to get this Nation's economy moving again and to put people back to work. But the statistics and the impersonal story they tell do not convey the real price the country has paid for the economic policies of the past two years. The full story includes a lot of intangibles that never show up on the Department of Labor and Department of Commerce periodic releases. The full story is one of regional economic depression, of personal suffering, of loss of self-respect and dignity, of mortgage foreclosures, repossessions, eviction notices, and personal deprivation. The full story is that the standards and goals of social welfare, economic security, and full employment we have worked to achieve for the people of this country are being lowered. The full story is that an irreplaceable national resource in the form of trained engineers, scientists, and skilled blue collar workers lies idle and forgotten while the Nation's cities, transportation systems and natural environment continue to decline and degrade. My State, especially the Seattle metropolitan area, as members of this Committee are aware, has been severely hit by the economic downturn, by rising unemployment, by the lack of Federal programs designed to prevent local economic recessions from growing into major regional depressions, and by the failure of this administration to use the tools which are available. Mr. Chairman, I am hopeful that today's hearing will be followed by further in-depth hearings on legislative measures such as the proposal Senator Magnuson and I have introduced to establish a Federal program of Economic Disaster Area Assistance. While I am aware that one of the major purposes of today's hearing, is to develop a Senate position on the differing provisions of S. 575 now in Conference Committee, it is my view that because of parliamentary problems and because of the need for early action on S. 575, the provisions of the Economic Disaster Area Relief Act I have proposed should not be considered as an alternative to or a substitute for Title I, the "Public Works Acceleration Act" amendments of S. 575. There is a critical need for both programs. Both can contribute to national economic recovery and both can create jobs. In addition, the Economic Disaster Area Relief Act I have proposed could be made stronger and more directly responsive to dealing with regional economic and unemployment problems if Departmental views are requested and if full-scale hearings are held on the measure. Mr. Chairman, appended to my statement is a brief outline of the Economic Disaster Area Relief Act. I ask that it be made a part of the Committee's hearing record. SUMMARY OF THE MAJOR PROVISIONS OF THE ECONOMIC DISASTER AREA RELIEF ACT OF 1971 1. Establishes in the Executive Office of the President an "Office of Economic Aid to Depressed Areas." 1 .. 2. Sets forth procedures for Presidential designation of "Economic Disaster Areas" eligible for assistance under the Act. An area is eligible for a wide range of assistance under the Act when the President determines: (a). That the area is experiencing or is likely to experience unemployment rates in excess of 6 percent; (b). that unemployment has increased by 50 percent within a one year period; (c). that the area's economy is adversely affected by changes in Federal policies; or (d) that an area is experiencing critical economic conditions and would benefit from assistance under the Act. 3. Provides that a "federal coordinating officer" shall be designated to coordinate the administration of Federal grant-in-aid programs and the special economic recovery programs established by the Act. The Governor of the State in which the designated area is located is required to appoint a State coordinating officer to work with the Federal officer. 4. Mandates the assistance and cooperation of other Federal agencies in the development of a coordinated and tailor-made plan of assistance designed to target in on the achievement of economic and employment objectives. › 5. Authorizes the reprogramming of appropriated funds within an area to attain a better focus on economic revitalization. 6. Allows the modification and waiver of procedural and administrative requirements which impede the granting of timely assistance through existing grant-in-aid programs. 7. Establishes a $2,000,000,000 "Federal Economic Recovery Fund" to provide direct recovery assistance. The Fund is not categorical and revenues may be used for unrestricted grants to states and local government, to enlarge existing grant-in-aid programs, for loans to prevent mortgage foreclosure and repossession, for housing, relocation and unemployment assistance, and for such other forms of assistance which will best meet the needs of local residents. The Fund is designed to provide an immediately available, unrestricted source of revenue to be used to deal with pending or existing economic disasters in any region of the country. Maximum latitude is granted to the President and the Director of the Office of Economic Aid to Depressed Areas to establish priorities and develop assistance programs to rejuvenate local economics and to create new employment opportunities. 8. Requires each State to develop "Full Employment and Economic Recovery Plans" for guidance in dealing with future regional recessions and unemployment problems. Among other things, the State Plan must include an up-to-date continuing status report on all public works projects-planned and under construction-which could be accelerated by funds made available under the Act. 9. Provides for a gradual phasing out of assistance made available under the Act when the goals of economic recovery have been attained. 10. Prohibits discrimination in the allocation of benefits made available under the Act, and authorizes the Director of the Office to issue such regulations as are necessary to implement the Act. Senator MAGNUSON. And we thank you for your patience. Senator JACKSON. Mr. Chairman, I want to reiterate that how you handle the given substantive matter is for the committee to decide and I am not suggesting that the measure we propose be treated as a separate bill, nor am I suggesting that it be treated as an amendment to the measure now in conference. We have taken the liberty of presenting it in both forms so that you could go in either direction. Thank you, Mr. Chairman, and I regret that I am chairing another committee in 2 minutes and will not be able to continue, but we are delighted to have the Governor with us today to discuss the problem of economic revitalization in more detail. The CHAIRMAN. The material that you requested be made part of the record will be included. Before you leave, Senator Magnuson and Senator Jackson, I want the very able chairman of our Subcommittee on Economic Development to have the privilege, if he desires, to ask one or two questions. Senator Montoya. Senator MONTOYA. I would like to direct my question to the three witnesses, Senator Magnuson, Senator Jackson, and Governor Evans. Having heard the testimony in the Seattle area and knowing of the unemployment problems which exist there, I would like to ask this question. Would a simple extension of the accelerated public works version that we had in 1962 help the Seattle area? I think that is the main area of inquiry here today. Can you direct yourself to that? Senator JACKSON. I would respond by saying it would certainly help, but this additional tool, the Economic Disaster Area Relief Act, would greatly improve the opportunity of providing other operational solutions above and beyond the accelerated Public Works Act. That would be my response. Senator MAGNUSON. Well, it would help, Senator Montoya, but the traditional problem that we have with public works projects is finding ones that are planned and ready to go. The administration is still impounding public works funds. I think this committee should direct the President to spend this money if Congress enacts this bill. Senator MONTOYA. The point I wanted to make is that to me the House version of accelerated public works extension would only permit the communities in such as Seattle or the State of Washington for that matter and others similarly situated to go only a few miles whereas you have to travel more than that. Senator MAGNUSON. Yes. Senator MONTOYA. Now there is some thought being given to the idea of having grants or loans to nonprofit organizations, loan guarantees to private profitmaking organizations for job creation and holding major employers who would otherwise substantially reduce employment in the area and grants to States. That is another concept that is being thought about, grants to States of 80 percent to support programs giving assistance to unemployed individuals not eligible for any more unemployment compensation and income maintenance in the form of continued unemployment compensation as long as the area is designated as an area of unemployment or underemployment and many other things related to rehabilitating people that have lost their employment. Now what can you gentlemen tell us about these new concepts and whether or not they take care of the serious situation which exists in areas such as Seattle and some other communities in the State of Washington? The CHAIRMAN. Senator Montoya, I don't want to cause a conflict but I would like the Governor to make his statement at this point when the members can be here. I just want to accommodate the gentleman. Senator MAGNUSON. Any program will be helpful. Governor EVANS. I will touch upon exactly what you have asked us, Senator Montoya. I would be much blunter than my two colleagues. If the accelerated public works program is sufficient, my answer is "No." Senator JACKSON. I concur in that. I just want to make it clear, however, that we are not opposed to the acceleration of public works projects, but alone it is not a substitute for the Economic Disaster Relief Act. The CHAIRMAN. Thank you very much. Senator MAGNUSON. Thank you very much. The CHAIRMAN. Senator Spong, we are glad to welcome you back to the committee. The eight members of the Public Works Committee here today are intensely interested in your appraisal of the situation. I do want to thank all of the members who have come this morning. We hope others will come. STATEMENT OF HON. WILLIAM B. SPONG, JR., A U.S. SENATOR FROM THE STATE OF VIRGINIA Senator SPONG. I thank you very much, Mr. Chairman. Initially I would like to thank Governor Evans for his courtesy in yielding to me. I have only a very brief statement. I would like to commend this committe and the subcommittee for seeking an imaginative approach to a problem that, in part, may be of their own making. I asked for the privilege of testifying because of my special interest in the need to assist communities stricken by economic disasters. Mr. Chairman, my interest and concern was expressed in letters last January to you, to Chairman Montoya of the Economic Development Subcommittee, and to the membership of the subcommittee. Three Virginia areas are threatened by severe economic disruptions related to plant closings. Each of the communities is rural in nature. The economy of each is largely dependent upon the industrial plant that is to be shut down. The three operations in question are the American Cyanamid plant at Piney River in Nelson County; the soda ash operation of the Olin Corp. at Saltville, and the Foote Mineral Co. plant at Kimballton in Giles County. Each is a substantial employer. I will not go into the details of the closings but, generally speaking, the shutdowns are related to the imposition of pollution control standards. Saltville stands to be particularly hard hit. I have been informed that Olin's share of Smyth County's tax base is 10 percent. Its share of the Saltville tax base is an estimated 50 percent. Unemployment at Saltville is expected to exceed 11 percent when the soda ash operation is phased out. As you may recall, the plight of the Saltville community was the subject of a recent article in Life magazine. Mr. Chairman, I realize that these problems are prospective, and that economic difficulties in other cities and States are immediate and severe. However, as a matter of national policy, it is important that long-range solutions be developed as well as short-range ones. I have not reviewed as fully as I would have liked the provisions of the House version of S. 575 which would reactivate the Public Works Acceleration Act. The House Public Works Committee is to be commended for its efforts to relieve acute unemployment problems that exist now in many areas of the country. However, title I of the House measure, in my judgment, does not take into account long-range problems which can be anticipated with the implementation of our growing body of environmental control statutes. It is reasonable to anticipate an increasing number of plant closings as water quality requirements become tougher, and as the Clean Air Amendments of 1970 become fully operative in another 2 or 3 years. For these reasons, Mr. Chairman, I believe a broader based approach is preferable to the provisions of title I of the House version of S. 575. I realize that the Subcommittee on Air and Water Pollution has scheduled hearings for next week on the economic impact of Federal water pollution control laws. However, I would hope that the differences |