We believe that is a very key provision.

There is a provision, also-section 102 of the bill-that allows the contracting-out by State and local sponsors to any public or private agency that they deem best able to deliver the services. Again, a key provision that is not in many.

Turning to public service employment:

I think most of the witnesses have covered the key points. One of the key points in the Governors'-sponsored bill is that it is essential that public service employment be an integral part of the total manpower reform, and not a separate categorical program. The local sponsor, or the State agent, should have the complete discretion to use whatever part of the funds he wants for public service employment. He might decide to use none. He might decide to use close to 100 percent-whatever best meets the needs of that area. But it should not be dictated that it be a separate categorical program.

As we have indicated in our testimony the Emergency Employment Act initiated public service employment. Obviously, Mr. Chairman, you played a major role in the Emergency Employment Act, as did Senator Cranston and others. The Talmadge amendments to WIN also mandate substantial use of funds for public service employment. Of course, PSE is a very important area, but it must be looked at carefully, we believe. It is still new under EEA. There has not been a great deal of opportunity to evaluate it.

We believe that USE, if included among the "laundry list" of programs over which the sponsor has complete discretion as to use, will work, and that this will be the best way.

Another element in the Governors' bill that is very important, we believe, is that there is an ability for the local sponsor, in its discretion, to use the private sector. We are all concerned, at all levels of government, at the great increases in the government payrolls. We believe that the ability, again, at the discretion of the local sponsor, to use the private sector, and the nonprofit sector to deliver public services, is a very important and key aspect. We must continue to rely on the private sector.

We believe and cite several examples on pages 14 and 15 of the testimony-that more innovative jobs can probably be created by the private sector. There is not the danger if and when funds run out, that people will be left high and dry on public payrolls. There is not the danger of greatly increasing public payrolls. We believe that this will, in fact, enable people to move on into the regular private sector as well as the regular public sector.

Briefly, to comment on the relationship of manpower and welfare, of course, it is critical that there be this interrelationship. Too often, the two are not considered together, and this creates problems.

I think the decategorization and decentralization points of S. 3346 best allow this bridge, because of the nature of the structure created, and this will do the most to create the bridge that we need.

In addition, because of the need to tie together WIN—particularly, the expanded WIN under the Talmadge amendment-with manpower reform, and the need for statewide uniformity, there is an option for the Governor, if he deems best, to have a statewide system to operate the manpower/welfare type programs.

Also, as we have noted, there is no one program in all parts of the country that can serve the welfare recipients. We need a toolbox of many programs. Again, this bill, we submit to the committee, does best allow the utilization of new and innovative programs to deal with the welfare recipients, in addition to the existing programs.

So we believe, Mr. Chairman, that this bill best represents a balance between State, Federal, and local governments, and is a significant matter for your consideration.

Thank you.

Senator NELSON. Thank you very much, Mr. Nelson.

(The prepared statement of Governor Reagan follows:)

I. INTRODUCTION

California appreciates this opportunity to present its views on manpower legislation. We join many other governors to bring to the committee's attention certain basic principles of manpower policy and a recommended manpower delivery system.

There is general agreement on the need to restructure our nation's manpower delivery system. Congress has been considering different bills during the past several years. Until recently the governors have not spoken on the manpower issue, and Congress has not had an opportunity to clearly understand their views on the subject. In recognition of this fact, the National Governors' Conference established a task force of manpower representatives from various states to review the pending manpower bills and to develop a draft bill that reflected a meaningful and effective manpower position from the point of view of the governors. This manpower task force had the participation of governors' representatives from 21 states, including California. Such states represent over 60 percent of the United States population; the group is bipartisan, with nine Republican and 12 Democratic governors.

Of course, this statement speaks only for California, but it is significant that many states concur in most of the views that we express in this testimony.

Manpower legislation encompasses many significant principles of government:

the concept of revenue sharing; the respective relationship of federal, state and local government; and the development of

II.

a workable delivery system that will avoid duplication and allow flexibility. We believe that S.3346, the bill sponsored by the Human Resources Committee of the National Governors' Conference

(hereafter for brevity

deals with these issues.

sharing that is workable.

"NGC bill" or "governors' bill"), best

First, it represents a form of revenue
Secondly, the thrust of the NGC bill

is, in fact, to move the decision-making responsibility on manpower from the federal government to the state and local governments. Third, many of the pending manpower bills, in attempting to get decision-making to the local levels, bypass the state governments. We believe that the governors' supported bill creates a proper balance between state and local government on one hand, and the federal government on the other.

There are key elements of all the pending manpower bills. These are the following: (1) decentralization, (2) decategorization, (3) public service employment, and (4) relationship of manpower to welfare reform.

DECENTRALIZATION

A governor, being in a central position to determine statewide manpower needs, has the responsibility of insuring that adequate manpower services are available in each and every area of the state. Concomitant with this responsibility, must be power to guarantee

that plans developed for the entire state will be carried out in a responsible manner.

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