AUTHORIZATION OF APPROPRIATIONS; EFFECTIVE DATE

SEC. 608. (a) There is hereby authorized to be appropriated for the year ending June 30, 1974, and for each succeeding fiscal year, such sums as may be necessary to carry out the purposes of this title.

(b) The provisions of this title shall become effective upon the enactment thereof.

COORDINATION STUDY

SEC. 609. The Institute shall conduct a study of the utilization and interrelation of programs of manpower training with closely associated programs such as those conducted under the Wagner-Peyser Act, the Vocational Education Act of 1963, the work incentives program under part C of title IV of the Social Security Act, and others of similar nature, with a view to determining how they could be better coordinated and more effectively combined to serve individuals, particularly at the State and local levels, and shall make a report of their findings and recommendations to the Congress not later than January 31, 1975. Mr. DANIELS. The Select Subcommittee on Labor will come to order.

We are meeting today to hear testimony on H.R. 11010 and H.R. 11011, the Comprehensive Manpower Act of 1973.

It is worth while noting, in brief, the history of manpower legislation since the unfortunate veto of the Manpower Act of 1970 by President Nixon.

Since that time, many Members of Congress in both Houses and on both sides of the aisle have worked long and diligent hours to reach a reconciliation on the major issues of dispute in manpower policy.

The Select Subcommittee on Labor has conducted over 40 days of hearings in an attempt to reach compromise over the complex issues involved in manpower legislation.

There has been a legitimate bipartisan effort to reach and obtain the views of all segments of our society interested in manpower programs.

With the introduction of H.R. 11010 and H.R. 11011 by myself and my distinguished colleague and ranking minority member of this subcommittee, Mr. Esch, respectively, and the cosponsorship of Chairman Perkins and Mr. Quie, our efforts have achieved the desired end.

The bills introduced last Thursday provide for a decentralized and decategorized manpower program, coupled with the recognition that public service employment is an integral part of any comprehensive manpower policy.

The bills do not create manpower revenue sharing, but they do authorize the Federal Government to grant State and local governments the authority to conduct manpower programs while retaining for the National Government its responsibility to assure that Federal dollars are spent consistently with Federal manpower policy objectives.

While my colleagues and I have agreed on almost all provisions in H.R. 11010 and H.R. 11011, you will note that we are cosponsoring two bills.

These two bills have only one area of difference and that relates to the funds designated for public service employment.

H.R. 11010 provides a mandatory set-aside of $250 million for fiscal year 1974 and $500 million for fiscal year 1975 for public service employment.

This is the proposal which I prefer and which I hope this subcommittee, the full committee, and the House will approve.

H.R. 11011, on the other hand, merely authorizes $250 million for fiscal year 1974 and $500 million for fiscal year 1975 for public service employment.

Because of the efforts expended by Members of Congress in an attempt to draft comprehensive manpower legislation, my colleagues and I have agreed that this difference should not prevent the introduction, passage, or signing by the President of a bipartisan bill, and we have agreed further that, to this end, that this single difference will be decided by the democratic processes of the committee and the Congress.

With this purpose in mind, we have scheduled hearings for today and Monday, October 29, 1973, so that the various parties interested in this legislation can voice their opinions.

Our first witness today will be Hon. Steve Cappiello, mayor of the city of Hoboken, N.J., and Mr. John Gunther, executive director of the U.S. Conference of Mayors.

Please step forward to the witness table.

I thank both of you gentlemen for appearing here today to testify on this important legislation and we welcome your views.

STATEMENT OF HON. STEVE CAPPIELLO, MAYOR, HOBOKEN, N.J., ACCOMPANIED BY JOHN GUNTHER, EXECUTIVE DIRECTOR, U.S. CONFERENCE OF MAYORS

Mr. CAPPIELLO. Thank you, Congressman and gentlemen.

I am Steve Cappiello, mayor of the city of Hoboken, N.J., I am here today to reflect the viewpoint of the smaller cities of the Nation which have important concerns in the area of manpower.

John Gunther, executive director of the U.S. Conference of Mayors, has just indicated the general views of the cities with respect to the legislation under consideration here today.

My remarks will be directed at three aspects of this legislation which I believe need to be modified to protect the interests of small cities. First, the need for an adequate hold-harmless-not only for the large cities and for counties, but for smaller cities within counties, even though they are not prime sponsors.

Let me describe what has happened to Hudson County and Hoboken-a city within Hudson County-as a means of illustrating the need for adequate legislative guarantees for hold-harmless.

The Department of Labor announced this year that States and localities would be guaranteed an 85-percent hold-harmless for fiscal year 1974. The State of New Jersey, keeping within the letter of the Department of Labor guidelines, allocated Hudson County 85 percent of what they had been receiving in the previous year.

However, the big kicker in this hold-harmless was that it did not include several of the most important manpower programs within the hold-harmless guarantee: EEA was not included and Hudson County had been receiving $3.4 million a year.

Summer Neighborhood Youth Corps was not included, and the county had been received some $470,000 of these funds. There were several more programs not included, so that the actual dollar loss to the county for last year was well in excess of a 15-percent reduction.

I have submitted the attachment which illustrates this point.

Hoboken, a city of 45,000 within Hudson County, is a city with severe and chronic unemployment problems. We have an official unemployment rate of 13 percent-the actual rate is, of course, much higher, but very difficult to determine because of the way unemployment rates are projected from DOL data for each municipality.

I also have attached this information.

Hoboken has historically received a very large share of manpower moneys within the county because of the city's especially severe manpower problems.

When the county received these huge cutbacks under the DOL so-called "hold-harmless" provisions, the county, in turn, passed most of these cutbacks to the programs operated on behalf of Hoboken residents.

This system-by which counties and large cities received some minimum guarantees on funding cutbacks, but smaller cities received no similar protections has resulted in Hoboken's incurring roughly a 45-percent cutback in those programs which were covered by the DOL hold-harmless guarantees.

Most of this cut was absorbed in a CEP program which was cut by $400,000. In addition, the CEP has now served the entire county excluding Jersey City.

If the rationale for a hold-harmless is sound-and I believe it isthen there is no justification for protecting the program service levels for residents of large cities and not small.

There are a number of small severely impacted cities in this country which rightly have received large shares of manpower programs in the past.

If there is no guarantee that counties or States operating as prime sponsors on their behalf must allot those cities a comparable share of the moneys received under the new system, then I believe that you will see many instances of manpower money being spread around the counties to all of the communities on the basis of population instead of the basis of need.

I do not believe that this committee intends that to happen and I think that they should provide some guarantees so that it does not happen.

The next two points I wish to make relate to the matter of prime sponsorship for smaller cities. Your bill provides that the Secretary of Labor may permit small rural cities to become prime sponsors in certain circumstances.

I think that that language should be modified to permit the Secretary to designate smaller metropolitan cities to become prime sponsors when special and severe manpower problems exist in that city and the city has the demonstrated capacity to plan and operate manpower programs.

Again, let me offer Hoboken as an example of a city with the kinds of labor market conditions in which prime sponsorship might well be extended.

It is also a city with the planning and management capacity-due in large measure to the resources and experience it has gained from the Model Cities and CEP programs to plan and operate manpower programs specially tailored to local conditions.

Hoboken is a community with roughly 40 percent of its population of Puerto Rican origin. It is a working class city experiencing severe structural unemployment problems due to the decline in recent years of shipping and other major traditional industries in the city.

We have two very separate unemployment problems, one having to do with the problems of Spanish-speaking new arrivals from Puerto Rico who require extensive language training, and a host of other assistance in order to become economically self-supporting; and, a separate unemployment problem of long-time Hoboken residentsmany of them of middle age and well skilled-who are unemployed due to factory closings and so forth.

The city government of Hoboken takes pride in being a government responsive to the citizens of the city. Because we are small, our citizens expect and are entitled to services which are tailormade to their unique circumstances.

We believe that a manpower program operated by the city of Hoboken can treat the special problems and build on the special strengths of the city and its people in a way that a program operated by a larger unit of government-in this case, Hudson County

cannot.

In recognition of this, the county, the State, and the regional department of labor are giving us a kind of partial prime sponsorship status by transferring the concentrated employment program in Hoboken into the city government and making it a manpower office for the entire population of the city.

Pending approval by the Federal Regional Council and the DOL, we will be assuming sponsorship of CEP on January 1.

We are preparing the final administrative plans now for turning this CEP program into a comprehensive manpower program for all practical purposes.

Assuming that the same arrangements will be continued under this new legislation, we will be in a position to take care of our people in Hoboken.

However, other cities of similar size and circumstance will not be so fortunate. Under the procedures as you now have them in this bill, the opportunity for a small city to plan for and manage a comprehensive manpower service specially tailored for its residents will be lost.

It took Hoboken 9 months of intensive work in the face of stiff resistance from people all up and down the line-Federal, State, and area wide—to get the program we will be operating as of January 1.

Everyone said: "But under the new manpower guidelines you can't do that." I don't think that this legislation should arbitrarily exclude a city-of whatever size, which has the problems and has the capacity to meet those problems-from having an opportunity to manage those programs.

That doesn't mean that everyone should have automatic prime sponsorship. But I do think that there should be an opportunity for special circumstances to be recognized.

I think that language similar to that in the Senate-passed bill, section 104 (a) (4), which provides that cities of whatever size can be designated if the Secretary determines they have the capability and the special need to operate these programs, would meet this problem. The third concern I have relates to the consortium language you

have in this bill. There is presently no opportunity for small cities to get together and form a consortium to become prime sponsors.

Again, I can see no logic in requiring there to be one unit of over 100,000 population in a consortium. This puts a small city-concerned with protecting the interests of its citizens-at a very bad bargaining disadvantage with a large city.

The big city does not need them; however, small cities would find very strong mutually reinforcing reasons to band together in a

consortium.

This is exactly the circumstances we have in Hudson County. Jersey City is the large city of over 100,000 in the county.

There are a large number of smaller cities which make up the rest of the county yet five out of the nine freeholders in the county are from Jersey City.

So, Jersey City will have the majority vote in determining the control of manpower questions for the rest of the cities in the county. Mr. DANIELS. Mr. Mayor, may I stop you there.

Your statement is not exactly correct. The city of Hoboken as a small city with a population of 45,000 may join with the city of Jersey City which has a population of 265,000 and sponsor manpower programs or you may work in cooperation with the County of Hudson which has a population of over 600,000, so you have a choice to work with the city or the county.

You know the mayor of Jersey City and you can make an arrangement with him as you have done under EDA.

Mr. CAPIELLO. Yes.

Mr. DANIELS. Rather, your predecessor made that arrangement. By virtue of the cooperation of the city of Jersey City and the city of Hoboken, much was accomplished under EDA.

You may proceed.

Mr. CAPPIELLO. The only alternative allowed under this bill would be for a small city to aline itself directly with Jersey City-which is not really a clear-cut alternative.

How much better it would be if some or all of the small cities could band together for prime sponsorship and thus have an avenue for influencing the expenditure of manpower moneys in their communities.

In fact, in Hudson County, this is sort of what exists now. One of the conditions under which we were able to assume responsibility for the CEP program was that the program be extended to serve the other cities within the county-outside of Jersey City.

We are now working to implement a program to do that, and our only major hangup at this point is the lack of vehicles for transporting clients from other cities within the county to training and job sites.

Assuming we can overcome this transportation problem, the other cities in the county appear to be well satisfied to date with our plans for serving them out of our city-run CEP programs.

I believe this could become the basis for a consortium, should the legislation permit it.

I thank you for having the opportunity to address the distinguished subcommittee and to represent the National League of Cities and the U.S. Conference of Mayors and the interests of smaller cities of this Nation, on the very important matter of manpower reform legislation.