Mr. BYRNES. I have taken more than 5 minutes, Mr. Chairman. I yield at this point, and will come back later.

The CHAIRMAN. Mr. Watts.

Mr. WATTS. I just want to welcome the Secretary here.

I have laryngitis, and will have to save my questions until we get into executive session. I know what your answers are going to be to all of them. I will see you then.

Secretary CONNALLY. Thank you, sir. Unfortunately, I have laryngitis, too, which I am afraid is all too apparent.

The CHAIRMAN. Mr. Burke.

Mr. BURKE. Mr. Secretary, I commend you on your general statement. It does not go deep enough into the specifics. I imagine we will get those answers later.

For my first question, I would like to ask you how many Federal programs are affected by the current freeze on funds for the States and cities.

Secretary CONNALLY. I do not know, sir.

Mr. BURKE. Well, is there somebody here who can answer that? Secretary CONNALLY. I doubt it. We can certainly get it.

Mr. BURKE. In my district alone, $12 million is being withheld in sewerage and water grants out of funds appropriated last year.

I would like to have you give us the total amount of money which is currently being withheld from the cities and States by the administration.

What concerns me here is that the administration makes these statements about their concern about the plight of the cities, towns, and States throughout the Nation, and yet they can withhold these funds that are greatly needed by those governments today.

I have communities in my district that are unable to deal with the sewerage problem which threatens the health of the communities. The money is already appropriated for these projects, but we are having a difficult time getting an answer on when they will receive it. Secretary CONNALLY. I understand, Mr. Burke.

Mr. BURKE. It almost seems that the administration is holding out revenue sharing as bait. The mayors and governors around the country are acting like the fox in the fable who saw the reflection of the grapes in the water. They see the illusion of revenue sharing and while they have some grants in their possession, right now, they are almost told, "Forget about those. You will get the other." It might be that they will not get either.

Secretary CONNALLY. I assure you that that is not so, that they are not being withheld for that reason. Most of them are being withheld, so far as I know, because of the spending ceiling limit and the debt limit, Mr. Burke. Those are the two principal reasons why they are being withheld, so far as I know.

The last figures we have available are figures for March 30, 1971, which I am sure you have. This shows the programs, and the accounts, and the amounts that are being withheld.

I am not sure these are valid, because these are March figures.

Mr. BURKE. We will expect a deficit, which will be helpful to the President's proposal. How much do you suppose we will have to raise the debt limit in 1972?

Secretary CONNALLY. I do not know. I have not made projections on it yet, Mr. Burke.

While we are on this withholding question, let me point out to you that this is not a new experience in Government.

I recognize that members of the committee are upset and more than upset, many are angry about it, because of projects in their respective districts.

I have no criticism of that, but I think in fairness I should point out that in June of 1959, 7.5 percent of the budget was being withheld, and this year it is about 6 percent. In 1960, it was 8.7 percent withheld. This year it is running about 6 percent.

In 1961 it was 7.8; in 1962, 6.1; in 1963, down to 4; and in 1964, to 3.5; in 1965, 4.7; in 1966, 6.5; in 1967, 6.7; in 1968, 5.5; in 1969, 5.2; and in 1970, 5.8; and now about 6 percent. So it is not new. It is not vastly different from what it has been over the past decade.

Mr. BURKE. What concerns me is that these programs are vitally necessary at the present time, and have more than proven their merit, and yet the administration has indicated to these local officials, "Forget about it. Wait until this revenue sharing comes along. This will be the big thing for you."

I don't want to be facetious, but you know about the postal corporate setup. I was wondering how we should have these checks delivered to the mayors around the country. Should we have the postal system do it, or should we get that fat, jolly little man in the red suit, and instead of putting them in their mail boxes, have him go down the chimney and put them in their stockings?

Secretary CONNALLY. I think that a delivery solution can probably be found quite readily, Mr. Burke, without too great difficulty.

Mr. BURKE. Do you know of any mayor or Governor in this country that would refuse a Federal check with no strings attached? Secretary CONNALLY. No, sir.

Mr. BURKE. That is all, Mr. Chairman.

The CHAIRMAN. Mr. Betts will inquire.

Mr. BETTS. I want to compliment you on your presentation this morning, Mr. Secretary.

Of course, I am aware of the fact that there are powerful and influential opponents of your proposal here, but I want to emphasize that to me it is a proposition that deserves some very serious and sympathetic consideration.

On this question of the spending, I think you brought out an important fact in answering a question Mr. Byrnes asked you. Actually, the Governors and mayors are going to be here anyway asking for money, regardless of what the program of distribution is. Is that not correct? Secretary CONNALLY. That is correct, and they have been to a substantial extent, Mr. Betts. May I point out, and you have seen these before, but here is the catalog of Federal aid programs, and then it got so big that we had to have a catalog of the catalogs. Nobody knows what we have.

Mr. BETTS. Not only that, but as I understand it, the mayors and Governors have lobbyists here to help them interpret what is in that catalog.

Secretary CONNALLY. They not only have their own State employees here lobbying, but are hiring consultants. Some of the consulting companies in the country have turned their efforts to showing local governments what is available to them on the Federal level.

Mr. BETTS. My own concern is, coming from a somewhat rural district, that the big cities are able to afford these lobbyists who can stay here and follow a program through the maze of bureaucracy, but the smaller communities are not able to do that. Is that correct?

Secretary CONNALLY. That is correct, sir.

Mr. BETTS. I do not know whether you could comment on this or not. I have not the opportunity in 5 minutes to really elaborate on it as I would like to.

But I have the feeling that one of the real dangers that is facing the American system of government is an expanding, expensive, timeconsuming, rulemaking bureaucracy.

You probably are not in a position to comment on that.
Secretary CONNALLY. Yes, sir. I will agree with you.

Mr. BETTS. I see Federal programs back in our district where the smaller communities have had to wait 5 or 6 years while the papers were shuttled between Washington and the regional office in Chicago, and the local communities, mayors of small communities, sometimes I assume at their own expense, have had to come down here and finally, after all of this delay and expense of all these administrators and about three different offices of the Federal Government, they finally arrive at a decision. These bureaucrats made all the decisions as to where the money is going to be spent, and how it is going to be spent back in the local communities.

Is not one of the real thrusts of your program to avoid all this unnecessary delay and expense?

Secretary CONNALLY. That is part of it, and, frankly, to provide assistance to State and local governments where they can make decisions on their own to solve some of their problems.

Mr. BETTS. Rather than have the decisions made by-and I hesitate to use the word, but use it because I cannot think of any other-bureaucrats who do not simply have the responsibility to the local government that the officials back home do. Is that correct?

Secretary CONNALLY. That is correct.

Mr. BETTS. I have nothing against bureaucrats or people in civil service, but it just seems to me that we are allowing to creep into our form of government a fourth branch which can make rules for local governments, local communities, which supersede every concept of our separation of powers and democratic responsibility. Is that correct? Secretary CONNALLY. That is correct.

Mr. VANIK. Mr. Chairman, would the gentleman yield?

Mr. BETTS. Yes.

Mr. VANIK. You are talking about lobbying. The National Citizens Committee for Revenue Sharing is the biggest lobbying committee I have seen.

Mr. BETTS. They almost have to, to compete with the lobbying that has sprung up in about half of the cities.

I am simply commenting that the bigger cities are able to afford the lobbies to come here, where the smaller cities are not.

I think my time is up, Mr. Secretary. I have simply this further observation: This committee by an overwhelming vote reported out a welfare bill which I think everybody agrees costs more than the present welfare program, but largely on the theory that the present welfare program was such a mess that anything, and this has been said in the press and by members of this committee, and is pretty well the byword in explaining that bill, that anything that will improve on the present welfare mess is worth taking a chance on.

It seems to me that in support of your position, I, at least, approach it with the thought that anything that can in a way supplant what I call this frightening expansion of an expensive and time-consuming bureaucracy is certainly worth the chance.

My leader and my friend John Byrnes mentioned the fact that he was old-fashioned enough to follow the Constitution. Of course, the Constitution was based on the concept of representative responsibility, not bureaucratic responsibility.

Mr. COLLIER. Would the gentleman yield at that point?
Mr. BETTS. I am going to have to yield completely.

I want to compliment you for taking this approach, Mr. Secretary, which I think is healthy and refreshing, and certainly has a lot of merit, a great deal of merit, when you consider the present system of what I call the most dangerous threat to our American system of government today, and that is this growing Federal bureaucracy. I want to thank you, Mr. Secretary.

Secretary CONNALLY. Thank you, Mr. Betts.

The CHAIRMAN. Mr. Secretary, prepare yourself. Mrs. Griffiths will inquire.

Mrs. GRIFFITHS. Thank you, Mr. Chairman.

Mr. Secretary, the thing that bothers me is the formula. Do you still expect, along with the President, that every town, every county, every city, every State will get money out of this program?

Secretary CONNALLY. Yes, ma'am.

Mrs. GRIFFITHS. Do you assume that the formula is going to be built in this committee that sends the money back to every town?

Secretary CONNALLY. Well, the bill that is now before the committee has a formula built into it that would do that.

Mrs. GRIFFITHS. All right; how many towns are there in this country with less than 1,500 people.

Secretary CONNALY. Well, you picked a figure that I cannot answer, of the approximately 35,123 cities and towns in the country, 27,605 were less than 2,500.

Mrs. GRIFFITHS. That is good enough. Of those 27,600 towns of less than 2,500 people, how many of them are in trouble?

Secretary CONNALLY. I think it depends on how you would define trouble. I think a great many are, because the base of the taxes in these small communities again is the property tax, and they have raised the property tax time and time and time again, to the point where people are now moving out of their cities out into the suburbs. They are losing their tax base, so that they cannot pay their policemen and firemen.

Mrs. GRIFFITHS. In a town of 2,500, Mr. Secretary, how many policemen are there?

Secretary CONNALLY. Well, quite a few. It depends on where they are, and what their particular situation is.

But these cities and towns of less than 2,500 obviously represent about 78.5 percent of all of the incorporated general purpose township and city governments in the United States. Yet they only actually raise about 2.7 percent of the general local government revenues.

So there is no question but what the smaller communities have the least impact, and most of the money that we are talking about is going not to these smaller communities at all, but going to the bigger cities, because of the formula that is devised in the bill.

Mrs. GRIFFITHS. My question is: if they are not really in troubleand, Mr. Secretary, I do not agree with you at all, because I think that most of those towns are paying their bills.

Secretary CONNALLY. I think they are paying their bills.

Mrs. GRIFFITHS. Why send them any money? What is the purpose of sending them any money?

Secretary CONNALLY. Let me read a letter from the town of Chadbourn, N.C. The mayor says he is a mayor of a town of approximately 2,200. He says:

I am in total agreement with you and your plan. The total tax rate, county and town, for Chadbourn is approximately $3.50 per hundred valuation. If property taxes continue to rise, people will build outside the towns, the present existing property will deteriorate and eventually lose its value. In my opinion, small towns will be unable to support their needs and will cease to exist as we now know them.

Most towns are probably in the same predicament as Chadbourn. The wages for the town employees are insufficient. Police are not paid enough to have a modern efficient department. The fire department needs new equipment. Street, water and sewer lines are in need of improvements. People cannot afford a property tax rate, paying both county and town taxes, in the amount needed to render these necessary services?

I live in a town of approximately 3,000 that is not in trouble as you think of a major city being in trouble. It is in trouble from the standpoint of providing essential services that the people are going to have if you expect people to stay in the smaller communities throughout the Nation.

This is one of the reasons for the coverage of this bill, that we want to try to provide some means by which cities of not only 2,500 but 25,000 and 50,000 can provide some of these essential services to prevent their citizens from moving to the big cities.

Mrs. GRIFFITHS. Mr. Secretary, let me say to you that people are not moving to the big cities because of the services provided. They are not leaving small towns to go to the big cities because of the services provided in those towns, in my judgment. That has nothing to do with it. How much of all of the money would go into towns of less than 2,500?

Secretary CONNALLY. Well, roughly 2.7 percent of the total local share, roughly the same percentage as their revenues.

Mrs. GRIFFITHS. And it would go there, really, whether they needed the money or were in debt or not. Is that true?

Secretary CONNALLY. That is basically correct, unless under the optional formula which the bill makes possible, if the communities,