the ladder into regular jobs. We must continue to rely on the private sector as the backbone of our economy.

(3) PSE as part of other manpower programs

A key feature of S.3346, which the governors have endorsed, is that public service employment must be one of the "laundry list" of programs available to state and local sponsors. The particular sponsor must have complete discretion as to what part of available funds shall be spent for PSE and what part for other types of manpower programs. This is the flexibility, decategorization and decentralization that we really mean when we use these words. If we provide specific appropriations and requirements for PSE, we institute categorization and destroy the appropriate flexibility.

In some areas, particularly with high unemployment and few job opportunities, the state or local sponsor may determine that a high percentage of manpower money should go into public service Conversely, in a rapidly growing and expanding area,

employment.

it may be determined that public service employment should take a small part of the manpower budget. It must be remembered that to pay full salaries under PSE uses many more dollars per individual than the other job training or support programs. If other training or placement activities can be as effective as PSE in putting the clients into jobs, then obviously the better dollar value is to use these other methods.

Again, we must emphasize that the sponsor must have that discretion. S.3346 provides this. It is worthy of the committee's attention as a realistic and consistent approach to delivery of public service employment.

(4) Public service employment and the private sector

A major feature of S.3346, the NGC bill, is that it provides
flexibility for delivery of public service work by the private
and nonprofit sector in addition to government. This provision
differs from most other manpower bills before Congress and is
new thinking about the role and nature of PSE. I indicated above
some concern about continually increasing government payrolls with
the difficulty of later reducing them. We all recognize the
importance of and need for many public services. In many cases,
the local sponsor may be able to contract with the nonprofit and
private sector to deliver the public services. This will avoid
hiring people on government payrolls and can very likely provide
a better transition to regular, nonsubsidized jobs. Also, if new
innovative jobs can be developed to serve the public this should
be encouraged in the private sector and not left entirely to the

government.

The NGC bill provides adequate safeguards for contracting with the private sector, requiring: a finding of public need and benefit, bidding procedures and standards for profit and overhead (Sec. 406 (e)). We should not preclude the use of the private sector under adequate controls to deliver needed public services. It is consistent with the individual state and local sponsor having maximum flexibility and discretion to utilize his manpower funds in a manner that will accomplish the best results within his area.

Several examples of "private PSE" could be as follows: (a) Certain new efforts to control pollution are desired. The local sponsor could contract with a firm (possibly organized by unemployed engineers)

to handle this problem on behalf of the government with the condition that the people employed meet the qualifications for public service jobs set forth in the bill. This would be in lieu of all such people being hired by the county department of public works or other agency to do the same job.

(b) Park beautification: Under the "traditional" public service program, the additional people would be hired by the city parks department. After several years, funds may run out and there may be a problem keeping them on the job; in any event the public payrolls have been increased with all the other costs involved. As an alternative, the city could use the funds to contract with a private organization required to hire all people from the eligible group defined by the Act. The private company would have the management responsibility over the employees and, hopefully, would be in a position to bid on other projects. This approach would more likely result in permanent jobs for such employees.

Several weeks ago President Nixon proposed to Congress incentives to industry to develop new products and processes. The governors' proposal for a private involvement in public service employment, at the option of the state or local manpower sponsor, is along similar lines and can lead to far more innovative approaches to manpower.

V. MANPOWER AND WELFARE

Since a basic purpose of existing and proposed manpower legislation is to provide appropriate job placement, referral and training, there is a direct connection between welfare reform and manpower. Too often in the past we have relied on the categorical manpower

programs without ability to utilize the most appropriate program and without flexibility to try new approaches to assist welfare recipients to become employed.

One of the dangers of the categorical programs is reflected in the WIN Program. Many look at WIN as the sole approach for getting welfare recipients employed. In California and many states we have learned that you cannot concentrate on any single approach to deliver needed manpower training and placement activities to welfare recipients. WIN must be considered as one of many available tools. The NGC manpower bill would allow this kind of flexibility and better tie the WIN Program with all other manpower activities set forth in the bill.

S.3346, the NGC bill, exceeds all other bills in providing a bridge between welfare and manpower. As mentioned before, the NGC bill provides true decategorization and true decentralization of manpower programs. These two features are the most important steps to giving state and local governments the ability to effectively deliver manpower services for welfare recipients.

As an example of an innovative use of resources, in California we have implemented a successful "separation of employables" program utilizing welfare workers in conjunction with the ES (Human Resources Development) staff. They function under the single roof of the Employment Service to deliver combined employment and social services to recipients, with the emphasis that all such services be toward the single goal of getting the welfare recipient a job.

In addition, the NGC bill provides the state with adequate authority to develop standards for serving welfare recipients in his state (Sec. 115). The bill also specifically gives governors the option to operate manpower programs for welfare recipients (Sec. 112). Therefore, the governors can choose between a state or local delivery system for welfare recipients, whichever is best. This is a specific legislative recognition of the importance of coordinating manpower services to welfare recipients.

The NGC bill also authorizes, as one of the discretionary programs by a manpower sponsor, the use of funds for utilizing welfare recipients in projects of benefit to the community (Sec. 101(19)). This type of program, in conjunction with public service employment and other manpower programs, is an important concept. It enables a state to have a complete program, with all employable welfare recipients in a position to be placed in jobs, training or some useful work.

The committee must be aware of a basic philosophy of government
in manpower and how this differs from the centralized approach
suggested in HR 1 for welfare reform. Nearly all authors of
bills and all interest groups pressing for reform in manpower
stress the need for state and local control. They differ only
in the degree of state versus local control, the extent of the
role of the federal government as a funding and approval source,
the exact form of revenue sharing and the extent thereof, and
the extent of decategorization and decentralization.
that all bills do provide state and local control as the best
way to accomplish effective manpower reform. California, of
course, heartily endorses this concept.

But note