Senator CLARK. Senator Murphy? Senator CLARK. Senator Kennedy? Senator KENNEDY of Massachusetts. I have no further questions. Senator CLARK. I have no further questions, Senator Javits do you want a second turn? Senator JAVITS. No, thank you. Senator CLARK. Mr. Secretary, thank you very much for your most helpful appearance here. I appreciate not only the help you have given us this morning, but the help you have promised us for the future. I must admit being a little bit surprised by your answer to my question. You didn't think the program could usefully spend any more money than the President recommended, particularly in light of the fact that you are supporting an increase in the part of the program which you administer. The House gave you these funds at the expense of cutting back some of the other programs. I wanted to give you another chance to see whether you would like to modify your answer in any way. Secretary WIRTZ. My position would be, again, that if we are describing a national need, there is no question about the various unmet needs which we have identified, as yesterday the Director of the OEO identified the need for Headstart on a much larger basis than what we are presently anticipating. I would again identify the target areas and I do in my testimony for the Neighborhood Youth Corps in terms of the number of boys and girls in this area whose needs are not yet met. You move from that to the question of comparison of these needs, balancing within any particular budget. Well, I would like to be a real good tackle on this team and it should not have two quarterbacks; and on the question of allocation, that is a matter which it seems to me should be dealt with in overall terms as in priorities between the programs, and I have not meant by my reference to H.R. 15111 to refer to the allocation question, but specifically to the program provisions which are there. Now you come to what is in my judgment the hard question which you have put, Mr. Chairman, and that is whether at this stage in the development of the welfare of this country there should be a different allocation from the one submitted in the President's budget to the poverty program, and on this-and this is the point that you raisedI feel very genuinely that the economy developing at the rate it is, and the economy is the best philanthropist and reform agency we have in this country, with the economy developing at the rate it is, with our moving in on a mobilization of Federal, State, and local public and private, paid professional and volunteer forces on what we have called this poverty problem, at the pace we have in the last 2 years, there is a very, very real question in my mind whether we could more efficiently and effectively do this problem with more money next year, a very real question, and so it is not a matter whether the need is such that in the long run it will require this. It is, it seems to me, the more sophisticated administrative question of whether this is the right pace moving in. And, Mr. Chairman, if I thought we were holding up the war against poverty $1 or 1 minute because of trouble anyplace else in the world you know I would be the first to say just exactly that. I do not think we are. Senator CLARK. Let me say in response, Mr. Secretary, that I appreciate your loyalty to the administration. I will not pursue the argument any further. Secretary WIRTZ. Thank you very much, Mr. Chairman. Our next witness is Mr. Mitchell Sviridoff, president of the National Association for Community Development, and presently Director of the Community Progress, Inc., in New Haven, Conn., and also currently on leave to direct the Human Resource Survey in New York City. Mr. Sviridoff, thank you very much for submitting your statement in advance, which has given members of the subcommittee an opportunity to read and give some consideration to it. With your permission, we will have the entire statement printed in full in the record at this point. (The prepared statement of Mr. Sviridoff follows:) PREPARED STAtement of MITCHELL SVIRIDOff, President, NATIONAL ASSOCIATION FOR COMMUNITY DEVELOPMENT My name is Mitchell Sviridoff. I am director of Community Progress, Inc., in New Haven, Conn., currently on leave to direct the Human Resource Survey being conducted in New York City. I am grateful for the opportunity to appear before you today to discuss some extremely important implications of this legislation. I appear today as President of the National Association for Community Development, a relatively new organization which numbers among its membership approximately 370 community action directors, staff and others interested in the success of the economic opportunity program. Drawn from virtually every major community action agency, this number includes, as well, a broad cross section of state OEO directors, representatives of rural programs and organizations interested in the broad objectives of the act. National Association for Community Development, through its conferences and publications, provides a bridge between community action programs through which ideas, assistance, and methods can flow. I am accompanied today by John C. Bullitt, Director of the State of New Jersey's Office of Economic Opportunity, who is a member of the Board of Directors of NACD and Chairman of its Program Committee. The Economic Opportunity Act of 1964 is meant to be far more than an additional source of Federal funds aimed at the alleviation of poverty. Explicit in the act were three concepts of overriding importance. First and foremost, the act represented a new approach to the problems of poverty. It promised a comprehensive attack on its roots-one which focused on self-help rather than welfare paternalism. Second, the act emphasizes local action. It recognizes that while Federal resources and leadership are essential there must also be a maximum of planning and discretion on the local level. Thirdly, the act calls for the vitally important concept of "the maximum feasible participation of residents of the areas and members of the groups served." In the 20 months in which we have operated under this act, there has been significant activity in the United States and far more success than we could have hoped for. There have also been mistakes. Of course, we must anticipate mistakes in such a massive new undertaking which calls for a change in direction and a change in thinking for a very large segment of American society. We strongly endorse the Senate bill being considered today. I am afraid, however, that in reacting to these mistakes or frustrations of the first year, as evidenced by H.R. 15111, we may eliminate or hamper those things in the act which have the greatest potential for a lasting, effective impact on the disadvantaged of our country. The Economic Opportunity Act funds in and of themselves represent only a small proportion of what the Federal Government already spends on what may fairly be described as anti-poverty programs. Manpower, education, welfare, health, Economic Development Act, social security and unemployment insurance programs represent only a few of the most significant Federal programs. All of these programs, in one way or another, make a major contribution to eliminating some of the roots of poverty that plague a disadvantaged family. Yet we know that in the midst of prosperity and rising income for 80 percent of America, some 20 percent of our population has not shared in this economic growth-in fact, the economic gap between the poor and the rest of society has grown rather than diminished. Congress, in drafting and enacting the Economic Opportunity Act, recognized that well-conceived, well-carried-out government and private programs were not meeting this poverty gap head on. Welfare, for example, might maintain a family at a minimum level of exist ence, but it provided no incentive or tools to move from that existence to a selfsufficient life. The Manpower Act might provide vital skills training in an area where jobs were available, but it might not be geared up to admit to that training people with a fourth-grade education or less-precisely those who needed it most. The same might hold true of State vocational facilities. In one area, health facilities might be quite adequate for children in the poverty family, but be unavailable for adult members of that family and certainly powerless to effect more healthful living conditions which might be the prime contributing factor to ill health. In short, we have developed good, well-operated programs reaching some people, not always the right people and almost never in a concerted way. The Economic Opportunity Act in its most important policy statement recognizes this and attempts to remedy the lack of coordination and innovation which has hampered a comprehensive attack on the roots of poverty at the Federal, State and local level. That vital ultimate goal which the Economic Opportunity Act recognizes and which community action programs lead to is human resource coordination. Almost 20 years ago in the Housing Act of 1949, Congress introduced to the communities of this country on a general basis the idea of physical resource planning. Today almost every community accepts the fact that healthy growth demands master plans, zoning, coordination of physical resources, basic information and projections on community growth-all methods for making orderly decisions. Local planning agencies are accepted and evidence has shown abundantly that they were introduced to American communities not a moment too soon. The ultimate achievement of the Economic Opportunity Act could be to accomplish this same end in the human resource field. It is meant to provide at the Federal level and at the community level a method of relating the independent goals of education, health, housing, welfare and manpower training, among others, to one another so that they may be mutually effective. It is significant that to mount this attack, Congress chose not to delegate to one agency or another this all-important function, but to put it in the Executive Office of the President at the Federal level in a unit with broad coordinating authority. At the local level, Congress chose a new unit as well-the community action agency-which it insisted must be representative of all of the elements of a community including other Federal and State-supported local agencies, such as the Employment Service, the Welfare Board, the Board of Education. It chose these new units wisely, I think, because it wished to emphasize the coordinating and planning aspects-because it did not wish the ideas and programs of the Economic Opportunity Act to become identified as the particular province of any one agency at any level of government. This is of profound significance, yet in the past 20 months, this ultimately most important goal has frequently been misunderstood. The Office of Economic Opportunity has come to be looked upon as a competitor at the Federal level, and the community action agency at the local level has come to be looked upon as simply the mechanism through which Economic Opportunity funds are channeled. This view sees the local community action agency, in effect, as OEO's actor on the local stage, while the Employment Service remains the Labor Department's actor, the Welfare Department remains HEW's actor, the Board of Education has its own channel, and a whole host of local agencies 65-922-66 -11 play supporting roles. This tendency, if it is allowed to continue, may, without us ever clearly realizing it, significantly frustrate the purpose of the act and the ultimate good which can come out of it. I believe that Congress in creating the Office of Economic Opportunity and the local community action agency sought to create mechanisms through which Federal agencies, State agencies and local agencies could unite their vital interests into creative, working relationships. If this is to be meaningful, people will have to stop thinking of the community action agency as the creature of a new unit of Federal Government and think of it rather as a broad, local agency created by government at its highest level to relate in a comprehensive way the activities which affect the poor. We are not talking that way today. The stage is not being set for establishment of strong human resource coordinating agencies at the local level. If this remains a goal-I urge this committee to take note of it and to look at the projected economic opportunity legislation from this perspective. H.R. 15111, the bill reported by the House Committee on Education and Labor, fails to recognize this end. In fact, it would seriously hamper efforts to achieve it because: 1. It weakens coordination at the Federal level at a time when we should be strengthening it. 2. It severely limits local initative and clearly detracts from the stature and ability of community action agencies to become a vital force. 3. It limits the possibility for innovation at a time when we are praising the innovation which has already been brought about. A. Coordination at the Federal level If the Community Action Agency is to become the local human resource coordinating agency, there must be here in Washington an umbrella agency, not viewed by other Federal units as a competitor, but as primarily responsible for coordinating Federal programs for the disadvantaged which feed into States and communities. This I think was the intent of Congress in placing OEO in the Executive Office of the President and in giving its Director broad authority to delegate and set up preference and coordinating procedures. There was a conscious attempt to utilize not duplicate existing Federal expertise. It is no secret that these preference provisions have not to this point been very useful, although we understand several inter-agency agreements are about to be implemented. But this only indicates that the preference provisions should be strengthened and not eliminated. The proposed House Committee amendments instead of strengthening the preference provisions weaken them by deleting section 211 of the present act and sap further the vitality of the OEO coordinating function by adding section 1001 which amends the MDTA to read : "Whenever appropriate, the Secretary of Labor shall coordinate and provide for combinations of programs, to be pursued concurrently or sequentially, under this act with programs under other Federal acts, where the purposes of this act should be accomplished thereby.” This would apparently provide the Secretary of Labor sole authority for coordinating manpower programs of every nature whether under the Manpower Act or otherwise. This would probably be carried on locally by the Employment Service as is indicated by section 603, which amends EOA section 611 to require the Director and the Secretary of Labor to provide for coordination at the local level of EOA programs with public employment offices. It is not necessary for OEO to coordinate the Labor Department. It is necessary for Community Action Agencies which should represent not OEO, but the total community intereststo coordinate manpower and other social programs locally. Recognition of this necessity would go a long way towards making these programs more effective and reducing business resistance bred from confusion toward such programs. Recognizing that the efficient and effective conduct of Federal programs at the local level to insure the minimum of overlapping and competition is a major challenge to today's government administrators, the striking of an important preference clause and the weakening of OEO's role as coordinator of human resources for the disadvantaged, would appear to be moving in precisely the wrong direc tion. It will make innovation difficult if not impossible and ironically it will frustrate the very coordination which House report recognizes as essential. For example, that report, in calling for an expanded Neighborhood Youth Corps clearly recognizes that it must be enriched with services primarily the responsibility of other Federal agencies. It says on page 6: "The Neighborhood Youth Corps work experience must be combined with educational and other training assistances, such as occupational skill training and basic literacy training. In directing the Neighborhood Youth Corps to enrich the content of the out-of-school program, the committee is aware the effect may also reduce the number of people who can be served. The committee is convinced this added emphasis on quality in the Neighborhood Youth Corps out-ofschool program is essential to its continued success." The committee has taken an extremely important step in the right direction, one which will make the Neighborhood Youth Corps an even more useful manpower tool for making productive wage-earners out of school drop outs. But the committee does not seem to recognize that if successful multiservice functions are to be carried out by N.Y.C., or under section II-B, providing adult literacy programs, or under title V for welfare recipients, there must be agencies at the Federal and the local level whose most important responsibility is to see that concerted common efforts take place. We would, therefore, ask this committee not only to consider restoring the prime coordinating role to OEO, but to strengthening it. B. Effective local action First, we support strongly the proposed Senate legislation which would maintain the existing 90%-10% matching formula beyond July 1, 1967. Experience clearly shows that one of the reasons our communities, and particularly our rural areas, have not been able to fight poverty effectively is the lack of adequate resources. Those programs which require substantial non-Federal contributions are the least widespread. The Manpower Act has pointed in a different direction. If we are to reach the hard core of poverty in the United States, we are talking about those communities whose tax base is least able to produce the revenues necessary to meet local share requirements. A handful of States have taken the initiative to assist communities to meet their local share. But the question that is most often raised when a prospective local agency is asked to join in a community action program is, where will funds come from next year? The most frequently-voiced apprehension on the part of school administrators about participating in Head Start last year was the fear that the Federal share would decline. With most school districts having great difficulty with their budgets, this kind of provision would severely restrict the number of communities able to mount such programs. The concept of the community action agency as a resource planning and coordinating agency must have more time to grow if skeptical local groups in areas of greatest need are to have confidence in our commitment to it. We recommend strongly that the present 90 percent Federal formula be retained. S. 3164 authorizes appropriations of $944,000,000 to carry out programs under title II of the act. This amount constitutes the Administration's request for these programs, and reflects the exceedingly tight budget restraints placed on domestic programs this year. Discussions with officials of OEO during recent months convince us that this expenditure level will effect a significant slow-down in many community action programs and a loss of momentum in many of the nation's communities. But the nation's rural areas and smaller communities will feel the impact of these fund restrictions most acutely. In many rural areas the mobilization of community resources which is a necessary prelude to the operation of action programs has only just been completed. Funding limitations mean that many such areas will be unable to undertake an action program commensurate with their program development goals, and some may be required to remain at a funding level appropriate for planning, not action. Seen from this perspective, the amounts allocated to title II in the bill reported by the House committee are disastrously inadequate and would result in the dismantling of a substantial part of the programs and services painstakingly created over the past year and a half, and decrease substantially their impact on the nation's poverty areas. Nor do we urge that juggling of funds within an overall budget limitation be undertaken. The House bill, for instance, increases Neighborhood Youth Corps funds by almost $200 million, an amount which, in our judgment, is more responsive to the needs of the nation's disadvantaged youth than the Administration's budget request. Another aspect of the proposed House legislation which would severely weaken the effectiveness of community action organizations is the provision which reserves at least 20 percent of community action funds for independent agencies. If the purpose of this provision is to make sure that community action agencies do not act in an arbitrary manner, we wholeheartedly concur with that purpose, but this provision is in no sense an appropriate response to that possibility. According to the latest OEO figures, of the 2,697 agencies which have directly received funds to administer anti-poverty projects under title II-A and title |