In 1967 and 1968 Kurzman was Deputy Director for Operations of the National Advisory Commission on Civil Disorders; in 1968 he served as consultant to the House of Representatives Republican Task Force on Urban Affairs; and in 1969 and 70, he was special counsel to the Urban Coalition Action Council concerning legislation on malnutrition and hunger.

In addition, Mr. Kurzman has been a lecturer at the George Washington University Law School, a consultant to the U.S. Administrative Conference, and a consultant to the 1970 White House Conference on Children and Youth.

Widely published, Kurzman has written for the U.C.L.A. Law Review, the American Bar Association Journal, The Washington Post, and the Administrative Law Review. He is also the reviser of the extensively-used Gordon's Modern Annotated Forms of Agreement.

Mr. FLOOD. Then we have Mr. James B. Cardwell, the Assistant Secretary, Comptroller, and Charles Miller, Deputy Assistant Secrctary for the Budget.

Yesterday Mr. Cardwell and Mr. Miller both appeared and presented a series of charts and statements. You couldn't have done better yourself. They were excellent and a lot of questions were asked by the committee, which is unusual for a chart presentation. It was a very fine afternoon. I think they were pleased as well. I know the committee was very pleased.

Mr. Secretary, I see you have a prepared statement. How do you wish to proceed?

Secretary RICHARDSON. Mr. Chairman, if it's agreeable to you and the committee, I would like to read this statement in full. I certainly would be glad to be interrupted. Since it presents as succinct an overview as we could manage. I think it would be useful if I could at least go through it.

Mr. FLOOD. Suppose you read it then. I think perhaps that would be better.

Before you do, is there anybody else you wish to introduce? Secretary RICHARDSON. They are all members of Charles Miller's

staff.

Mr. FLOOD. Mr. Cardwell, would you like to present them?

Mr. CARDWELL. Mr. Donald A. Melbye, Special Assistant for Congressional Liaison; John Seidl. Deputy Assistant Secretary for Programs Systems; Frederick F. Pfluger, Education Branch Chief. Division of Budget, Office of Assistant Secretary Comptroller; Wilford J. Forbush, Director of Budget Division, Office of Assistant Secretary Comptroller; Michael L. Sturman. Methods and Presentation Branch Chief, Office of Budget Division. Office of Assistant Secretary Comptroller; Ronald L. Davis, Branch Chief for Social Security Administration. Office of Budget; Earl Canfield, Jr.. Branch Chief. Social and Rehabilitation Services; Gerald Meyer, Health Branch Chief. Mr. FLOOD. Would you proceed, Mr. Secretary?

STATEMENT OF THE HONORABLE ELLIOT L. RICHARDSON

Secretary RICHARDSON. It is a pleasure to appear before you today to discuss the HEW budget request for fiscal year 1973. This is my second appearance before this committee, and I am particularly proud of the budget which the President is recommending for our Department. Each one seems to be better than the last.

I have always seen this committee as playing a particularly important role in the affairs of HEW. This committee is in a unique position to influence the character and quality of our Department-and

not just because of the appropriations process, as important as that is. Of all the committees of Congress that have any jurisdiction over HEW, the Committee on Appropriations is the only one that takes a look at the Department as a whole. Recognizing this, I would like to discuss with you more than just the details of our 1973 budget I would like to share with you my thoughts about the problems facing the Department, how we should go about our job, and where we should be headed in the future.

GROWTH IN EXPECTATIONS

In my view, we are standing at a unique juncture in the course of history. At no other time have we been so aware both of how breathtakingly close we have come to realizing the promise of America and of how painfully far we are from putting together all the resources that would fulfill that promise tomorrow.

The founders of this complex and diverse Nation, and each succeeding generation, set themselves truly awesome tasks to perform. For the most part, their aspirations and their capabilities have been within hailing distance of each other. In our own time, great though the growth in our resources, the growth in our expectations has been even greater. Today these expectations are like a giant helium-filled balloon cast loose from it moorings, sailing beyond sight. We must somehow bring our expectations back to earth; we must level with each other. For either we shall understand the reality of what can and cannot be done over time, or we shall condemn ourselves to failure, and failure again and again.

When we compare ourselves with those who preceded us, or with others in the world today, there is no denying that we are succeeding, that we are infact moving ever closer to the promise of this country. Our lives are longer and healthier. We are better educated. The number of people living in poverty is not only a relatively small proportion of the total population, but it is declining.

HUMAN RESOURCES INCREASES

We are also beginning to gird ourselves for new tasks in the temper of a changing time, and have begun to shift our priorities accordingly. Since the present administration took office, human resources expenditures have risen from 34 percent of the total Federal budget to 45 percent, while national security expenditures have declined from 44 percent to 32 percent. HEW's budget, meanwhile, has been rising at an annual rate of 14 percent-nearly twice the average rate of increase in the total Federal budget. In the next fiscal year Department outlays will approach $79 billion, roughly one-third of the Federal budget.

IMPACT OF TRUST FUNDS

Mr. FLOOD. Of course, that figure includes what you refer to often as trust funds.

Secretary RICHARDSON. Yes, it does.

Mr. FLOOD. Mr. Cardwell, so that the record is complete, could you tell us the difference between trust funds and other Federal funds.

Mr. CARDWELL. Trust funds being distinguished from direct appropriations made by Congress, they would in this case involve trust funds administered by the Social Security Administration made up of taxes collected from employers and employees under the social security system.

Mr. FLOOD. Mr. Miller or Mr. Cardwell, will you supply for the record, unless you have it right now, that part of the total figure which is trust funds as distinguished from the direct appropriations.

Mr. CARDWELL. Of the $79 billion figure referred to a moment ago by the Secretary, $55.2 billion involves social security trust funds. Mr. FLOOD. Thank you.

SOURCES OF PUBLIC FRUSTRATION

Secretary RICHARDSON. Yet, despite the gains that we can see and despite the change in national priorities, frustrations and disappointments abound, and alienation from our basic institution seems endemic. Why is this so?

One reason, it seems to me, stems from our very successes. It is not that we have come so far, but that we seem so near, so exasperatingly near, to realizing our national hopes, that some of us grow impatient and angry. What could be suffered silently or even cheerfully when there was no chance if improvement becomes intolerable as soon as it is learned that a cure is within our capability.

Another reason is that we are constantly setting ourselves ever more difficult goals to achieve. We may reach a goal today that appeared improbable or optimistic yesterday, but instead of finding in this success a source of satisfaction, we think about what is still to be done, Our success, paradoxically, becomes tinged with an appearance of failure.

There is, besides, much actual failure. Exaggerated promises, illconceived programs, over-advertised cures for intractable ailments. cynical exploitation of valid grievances, entrenched resistance to necessary change, the cold rigidity of centralized authority, and the inefficient use of scarce resources-all these add to frustration and foster disillusionment.

Population growth, technological change, mass communications. and big government, meanwhile, have been progressively submerging the individual's sense of personal significance in a gray, featureless sea of homogenized humanity. We yearn for a greater voice in—a greater impact on-the processes that affect our lives. We long to make a difference.

But the most profound and far-reaching source of our frustrations and disappointments to to be found in the expectations gap to which I alluded before. There is a fallacy abroad in the land-among the people and in the Congress-that passing legislation solves problems. There are, to be sure, many problems that cannot be solved without new legislation. But all too often-and increasingly so-new legislation merely publicizes a need without creating either the means or the resources for meeting it. If such legislation is implemented at all, it is at the cost of spreading resources still more thinly over existing programs. The child care bill, which the President rightly vetoed, is a good example of this kind of legislative overpromise.

Then, there's the nagging problem of inequity in helping those who need help. The Federal, State, and local cost, both public and private, of assisting individuals whose dependency might have been prevented is running at an average annual rate of about $19 billion. And yet the cost and quality of assistance to such individuals varies widely. If our assistance to all these people met the standards applicable to the most-favored one-third, the annual cost would be $7.5 billon more than it is now.

UNLIMITED DEMANDS FOR ADDITIONAL FUNDS

If, in addition to raising benefit standards for those now receiving assistance, we expanded our most important programs so that everyone in need received an adequate level of services, another enormous expenditure increase would be required.

Consider just the following list:

Fulfillment of the Right to Read objective.

Homemaker services, mental retardation services, and vocational rehabilitation services for all who need them.

Developmental day care services for needy children.

Good compensatory education for every disadvantaged child. To meet even these few goals, we could have to increase our spending by roughly $27 billion per year and the institutions we aid would have to recruit and train 6 million more professionals, paraprofessionals, and volunteers! This, coupled with the increases needed to assure equity in income assistance, would increase the HEW budget by nearly $35 billion!

When we begin to take into account other large claim-health care, higher education, urban redevelopment, transportation, and environmental protection, for instance-we rapidly enter a realm of almost unimaginable numbers. The needs are real, but we cannot conceivably meet them all comprehensively and all at the same time.

Glaring gaps between needs and their fulfillment are thus inevitable. That does not mean, of course, that we should not try to narrow them. On the contrary, it is the job of this Department and our sister agencies in the States and localities to fight as hard as we know how to do this. But a need is subjectively perceived, and this perception reflects the expected response. The more unrealistic, therefore, are the expectations of our fellow citizens, the more we who struggle to meet those expectations tend to be looked upon as failing.

A consequence is the erosion of confidence in government itself, especially as a means of bringing about desirable change.

We in HEW must, and we can, help to restore confidence in government. We can do so by making ourselves more responsible. We can do so by making ourselves more responsive.

BUDGETARY CONSTRAINTS

Today, I would like to tell you how we addressed this problem as we worked to put the 1973 budget together. I would like to outline for you the constraints we faced and how we devised a method for allocating the resources at our disposal in a rational way.

"UNCONTROLLABLE ITEMS

In the current fiscal year, 86 percent of HEW's budget is uncontrollable in the sense that neither the executive branch nor the appropriations committees of Congress have the power to add to or subtract from the amounts required to fulfill such binding statutory commitments as social security benefits and health services for the poor. Only changes in the basic law and implementing regulations affect the amount spent through these programs. Moreover, any changes which we propose must allow for leadtime before they have an impact on the outlay estimates.

Mr. FLOOD. That is what I referred to earlier as generally the socalled trust funds.

Mr. CARDWELL. In the case of the social security benefits, yes.

Mr. FLOOD. With reference to the term "uncontrollables," I think under the circumstances, since they compose such a high percentage of your budget, you or any of your staff might develop further what you mean by "uncontrollables," other than what you have described and other than the trust funds.

Secretary RICHARDSON. We would supply a tabulation at this point. in the record, Mr. Chairman, which summarizes the items from which we derived the 86-percent figure that I just gave you. It includes in the 1973 budget, for example, under "Public assistance," the various major headings of "Income Maintenance Assistance," "Medical Assistance," "Social Services," "State and Local Training," and an allowance for proposed legislation.

It does include the two major trust funds outlay totals for old age, survivors and disability insurance, and for medicare. It includes benefits for disabled coal miners and a small item covering various miscellaneous things, which price the total outlays for 1973 to $67.645 billion.

Mr. FLOOD. I wish you would do that. Would you insert at this point in the record a narrative, of whatever length you feel it would require, and then your table. It's very important, especially in view of the fact that so much is being made of the fact that HEW's budget is going to exceed the defense budget.

Secretary RICHARDSON. I think it would be useful, Mr. Chairman. (The information follows:)