Under S. 1854, the agencies made specifically responsible for doing the necessary research and staff work for the National Development Priorities Council would be the Office of Area Development of the Deparment of Commerce and the "exist ing rural development program of the Department of Agriculture." In the case of the rural development program, there is no permanent staff available for the present program. Without funds, the work contemplated could not be undertaken except at the expense of current activities. The type of coordination planned under the bill is already a function of the Bureau of the Budget and the Council of Economic Advisers. To the extent that rural areas are involved, the Interagency Committee for Rural Development Program already provides much of the needed coordination. Valuable experience is now being gained in the pilot counties and areas where the rural development program is intensively underway. It is suggested that such experience and gradual extension of the development process are necessary to a successful program. Objectives similar to those of S. 1854 could be attained better through S. 1433, which provides for technical assistance grants and lending authority, and which the Department has previously recommended for passage. The Bureau of the Budget advises that there is no objection to the submission of this report. Sincerely yours, EARL L. BUTZ, Acting Secretary. UNITED STATES DEPARTMENT OF LABOR, Hon. J. W. FULBRIGHT, Chairman, Committee on Banking and Currency, DEAR SENATOR FULBRIGHT: This is in further reply to your request for my comments on S. 1854, a bill to amend the Employment Act of 1946, as amended, so as to establish a National Development Priorities Council. This bill would establish an interagency National Development Priorities Council whose duty it would be to determine and designate as "development priorities areas" those geographic areas in the United States which suffer substantial and persistent unemployment or underemployment. The Council could require that, to the greatest extent to which efficiency and economy permit, the operations and expenditures carried on by the various departments, agencies, and instrumentalities of the Government be carried on in these areas. A comprehensive program of assistance for areas of substantial and persistent unemployment and underemployment is embodied in S. 1433, the administration bill designed to assist these areas to develop and maintain stable and diversified economies. Enactment of S. 1433, which I strongly recommend. would adequately deal with the problem to which S. 1854 is addressed. The Bureau of the Budget advises that it has no objection to the submission of this report. Sincerely yours, JAMES T. O'CONNELL, Acting Secretary of Labor. Hon. J. W. FULBRIGHT, EXECUTIVE OFFICE OF THE PRESIDENT, BUREAU OF THE BUDGET, Washington, D. C., June 7, 1597. Chairman, Committee on Banking and Currency, United States Senate, Washington 25, D. C. MY DEAR MR. CHAIRMAN: This will acknowledge the receipt of your letter of April 16, 1957, requesting the views of the Bureau of the Budget with respect to S. 1854, a bill to amend the Employment Act of 1946, as amended, so as to establish a National Development Priorities Council. This bill would establish a National Development Priorities Council to desig nate, and determine the needs of, areas which require governmental assistance to meet problems arising from unemployment, low income, or disaster. Assist ance to such areas would be provided through the use of existing programs, personnel, and appropriations. The interested departments and agencies, in the reports they are making to your committee, and the Council of Economic Advisers, in its views expressed to this office (copy of which is enclosed), do not recommend enactment of the bill because: (1) It would be ineffective in meeting the basic problems of areas of substantial and persistent unemployment; (2) it would tend to detract from the primary objectives and reduce the efficiency of existing programs; and (3) it would establish unnecessary and unwise administrative procedures. The Bureau of the Budget particularly questions whether the procedures specified in S. 1854 are consistent with effective administration of the program. Specifically, it would appear more appropriate to give the National Development Priorities Council an advisory role such as that contemplated for the Area Assistance Advisory Board that would be created by S. 1433 and to center executive authority in one head. On the basis of experience, we would object to statutory assignment of functions to subordinate units of executive agencies, particularly to the Office of Management and Organization of this Bureau. For the foregoing reasons, the Bureau of the Budget recommends that S. 1854 not be enacted. In our opinion, the purposes of the bill would be served better by the administration's program for area assistance introduced as S. 1433, the enactment of which would be in accord with the program of the President. Sincerely yours, PERCY RAPPAPORT, Assistant Director. Enclosure: Copy of CEA letter to the Bureau, May 7, 1957. Mr. ROGER W. JONES, THE CHAIRMAN OF THE Assistant Director for Legislative Reference, Bureau of the Budget, Washington, D. C. DEAR MR. JONES: The Council has revised H. R. 6891 and S. 1854, identical bills that propose establishment of a National Development Priorities Council by amendment of the Employment Act of 1946, as amended. This entity would have have three permanent members-the Secretaries of Agriculture, Commerce, and Labor. Each Secretary would serve as chairman in turn, and other members might be added by the President. With the advice of the Council of Economic Advisers, the new entity would designate "development priorities areas" and provide criteria, priorities, and termination dates for assistance campaigns based on existing Government programs and funds. These "priorities areas" would include such places of substantial and persistent unemployment, of large concentrations of low-income families, and of disaster as may be unable to improve their status significantly without Federal aid. No additional funds are contemplated by the bills, the objectives of which would be “carried out through a more efficient utilization of existing personnel and appropriations." The Council disapproves of these bills in the belief that they would prove ineffectual and that they are less satisfactory than the administration-sponsored proposals for area assistance. The rest of this letter amplifies this statement. First, H. R. 6891 and S. 1854 are likely to fail of their intended objectives because 1. A rotating chairmanship diffuses authority. 2. The new entity would presumably have only advisory power. 3. Experience suggests that adequate aid for distress areas canont be provided merely through better coordination of present programs. 4. A determined use of existing programs for purposes of area assistance might distort their primary and equally important objectives (e. g., national defense). 5. The goal of the bills is vaguely defined. At what point may a "vital wasting of the Nation's human and economic resources" be said to "end" in any given area? 6. The bills provide for no evidence of self-help and State interest as prerequisites to intensive Federal aid. 7. The bills may be far from correct in their assumption that a "more efficient utilization of existing personnel and appropriations" could provide adequate resources for intensive help to distressed communities. Besides, such resources could not be transferred from one agency's jurisdiction to another's without congressional action. Second, H. R. 6891 and S. 1854 are less satisfactory than the administrationsponsored proposals for aid to areas of chronic unemployment in that the latter would center authority in one head, the Secretary of Commerce; provide for technical-assistance grants; provide for Federal participation loans; and require State and local interest in area improvement as a basis for loan aid. Finally, the council wishes to observe that the bills would add responsibilities which might not be in keeping with its legal role as economic adviser to the President and with the conception of the Council as a staff organziation. Sincerely yours, RAYMOND J. SAULNIER. Senator DOUGLAS. Senator Flanders and Congressman Hays, we are honored to have you here and would be glad to hear from you at this time. STATEMENTS OF HON. RALPH E. FLANDERS, A UNITED STATES SENATOR FROM THE STATE OF VERMONT; AND HON. BROOKS HAYS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ARKANSAS Senator FLANDERS. Mr. Chairman, Mr. Hays and I have collaborated for 6 or 8 years on this question of depressed areas, as it has come to be called. My own interest in it began with the series of hearings some years ago by the Joint Economic Committee, as it is now named, on the subject of the low-income groups. And from those hearings, I learned two things. One was that the greatest amount of the low-income groups was to be found in rural regions, and that those conditions were rather more difficult to handle than the recurring periods of low incomes in the cities, which often, by changes in the economic conditions, cured themselves, whereas the rural situations did not necessarily do so. The other thing that I gathered from those hearings was that while the situation was chronic and difficult, it did not seem to me to be hopeless. So that led toward a consideration of means of meeting it. Now, the bill which is before you has been worked out in consultation with my friend at the other end of the Arkansas-Vermont axis, which has been in existence for at least these 8 years. It amends the Employment Act of 1946. This bill of which I speak is S. 1854. I think it has been put into your hands. It sets up a National Development Priorities Council, composed of the Secretaries of Agriculture, Commerce, and Labor, and also presumably the Budget Director. The chairmanship rotates. There is a staff which would come from existing members of the staffs of Agriculture, Commerce, and Labor, which reports depressed areas and problems. These reports come primarily from the rural development program of the Agriculture Department and the Office of Area Development of the Commerce Department. The President's Council of Economic Advisors advises on the general approach. The Management and Organization Division of the Budget Bureau recommends priorities for programs and criteria for expenditures of those agencies which can help in the areas outlined. Now, I would like to say a word or two about the available assistance from programs already established and from budget provisions already made. If I should add these total budget appropriations up, they would amount to billions. Of course, there is not the slightest intention of devoting these billions in the aggregate to this problem of depressed areas. A small fraction of these billions from the appropriate agency is sufficient to take care of the problems that we are interested in. I will mention a few of these existing appropriations. You will find them listed in Federal Programs for Community Assistance, published by the Department of Commerce, revised as of January 1957. There is the Federal Extension Service of the Department of Agriculture, with its fifty-one-million-eight-hundred-thousand-odd dollar appropriation. Senator DOUGLAS. That is the county agent program. Senator FLANDERS. Yes, that is the county agent program, which, through its reporting activities, can indicate certain areas that need attention. And then there is the Forest Service, which can be useful in the location and the assistance of areas in which the forest resources are the principal item. They work with the States and private landowners in promotion of good timber management. There is the Soil Conservation Service and the Department of Commerce Office of Area Development, which, of course, is directly applicable to the situation. The Bureau of the Census can point out the uses of Census data at the local area level, indicating conditions which require attention. And then there is the Civil Aeronautics Administration, whose contacts are perhaps somewhat less direct, but which can have something to do with the development of given areas in planning and site selection for airports. The Department of the Interior gives technical advice and service to local communities, groups and individuals, through its regular program, developes new methods, techniques, and special equipment, conducts pilot plant operations. That is available wherever there appear to be evidences of undeveloped natural resources from the earth. The Department of Labor, of course, is directly involved. The Small Business Administration is directly involved and, so far as I know, has not ordinarily directed its efforts with reference to the general situations of a given area. It might well give specific attention to areas as well as to individual firms while there is any choice in the allocation of its assistance. And then there is the Agricultural Conservation Program Service in the Department of Agriculture, and the Farmers' Home Administration. The REA can have attention directed to areas without electric service where its introduction would be of great benefit. The Bureau of Public Roads, in planning roads systems, might well find areas in which the principal drawback or holdback was in transportation, communication over the highways. The Corps of Engineers might well have their attention directed again toward special situations, where flood control or navigation development might help a depressed area. And so on. One can go through this complete list of Federal agency programs and activities and see how present agencies, with available appropriations, might have their attention directed to specific depressed area situations. The National Development Priorities Council, set up in the bill, would make its recommendations and send them to the President for approval, and he would send these recommendations for better coordination, priorities of action, criteria for prorgams and so forth, to the various Government agencies. Reports and information can be required of any appropriate agency and returned if unsatisfactory to insure responsiveness. Now, a unique peculiarity of this bill is that it does not require an appropriation. I wonder if this has ever happened before in the his tory of the United States Congress. It may have, but if so it has not been within the 12 sessions of which I have been a member. May I close by saying that it is my feeling that the best assistance we can give to the areas of our country which permanently lack economic opportunity is through programs now in being, efficiently coordinated and focused, not by appropriating hundreds of millions of new funds for loans. Well, that is my story, Mr. Chairman, and I appreciate the opportunity of presenting it. Senator DOUGLAS. What would our colleague prefer? Would he prefer Congressman Hays to make his statement, and then have such questions as the committee may wish to ask to be addressed to both! Senator FLANDERS. This has been a cooperative undertaking, and it would please me if Congressman Hays would make his statement. Senator DOUGLAS. We are delighted to have you here. Mr. HAYS. Thank you, Mr. Chairman. I certainly appreciate the opportunity of supplementing what my good friend, Senator Flanders, has said. He has made reference to the Vermont-Arkansas axis, and I should repeat to you perhaps what I told him one time when we first began to work on the problem of the low-income rural population. I sug gested to him that since I represent the foothills of the Arkansas Ozarks, and some of my district even penetrates the high points of those mountains, and I have had the pleasure of seeing his Green Mountains in Vermont, that they really are the Ozarks-that they went underground and emerged east of the Hudson. They are the same mountains. I found in Vermont, when I was employed in the Department of Agriculture, before my election to Congress, many of the same problems with which this committee is dealing, as it studies the overall economic problem and finds the low spots, the islands of distress, in the economy of our Nation. I think I should let him know, too, that I have a secret weapon in Vermont. I did not realize it, but there is one Democratic family staked out up there. In a speech in the town of Randolph I told the audience about Uncle Billie Collins in Arkansas. I said, "Uncle Billie, how do you feel this morning?" And he said, "Have you got time to listen?" When the meeting was over, one of Senator Flanders' constituents came up to me and said, "I want you to know I lived next door to Billie Collins in Holla Bend Township in your county for 4 years." The family had moved up there, and it was a very congenial environment. Which again is a symbol of what is happening in America. People are on the go. There is a migration of people. Senator FLANDERS. Will the Congressman yield? I may say also a few years ago there was an interchange of visiting farm families hetween Arkansas and Vermont. Do you remember that? Mr. HAYS. Yes, I do. |