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I think if the program is good, the parents have to put up some money themselves as well as making a commitment of time and energy for the development of their children.

As far as making lists for promises, I do not think that will be much of an advantage politically, because the Republican Party of Minnesota has been keeping a list for a long time on their junior Senator, former Senior Senator, former Vice President of the United States, of the times where he has been inconsistent, contradicting himself, but he keeps winning by bigger margins all the time.

I think this is sort of the nature of politics, where somebody else interprets what the person says contradictions can be made to appear.

It is hard enough to keep promises, but when you have somebody in the other party interpreting them, then it is more difficult.

I hope you can get on with your testimony, especially on revenue sharing, but I certainly do not want to keep listening to this administration being maligned for what I believe is a sincere effort to help the people.

Chairman PERKINS. Let me respond to my dear friend from Minnesota. In my judgment, if the President of the United States uses the argument that the States do not have the opportunity to play an active role in the administration of the Child Development Act, for veto purposes, that is just a smokescreen.

The States have a constructive role, a constructive partnership with the local governments and cities throughout the country.

We do give the local communities the same standing, which they should have, as the larger municipalities and the States if they are capable of producing a program of quality. The Secretary makes that judgment, and if the local community does not have the capability, then he lets the State administer that program, and puts 5 percent of the funds in the hands of the States for technical assistance, for the purpose of helping some of the communities. I regret to see the President of the United States, who has talked so much about the rural people of America, veto the economic opportunity amendments under the false pretense that the State does not have the opportunity to play an active part.

If he vetoes this bill on that ground, he is saying indirectly to the rural people of the country, we have no confidence in the rural people. We want the big cities to have the power; we want the States to have the power, we want to continue to exclude the rural people in America.

In reality, that is what the President is saying if he vetoes this bill on that flimsy ground, because the bill provides for a constructive partnership between the different levels of government, and the States can play a great role in that constructive partnership. If I were the Secretary of HEW, or the President of the United States I would not insinuate that these cities of 5,000 do not have the social services and the capability.

This is the greatest demographic issue that I have heard since I have been in the Congress.

Mr. RUTH. Will the chairman yield?

These gentlemen from the administration did not expect to come here and get this kind of treatment, but I would suggest, before we continue this, we let the gentlemen make their statements.

I would like to hear them before I go to the House floor.

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I can hear the chairman and my colleagues at anytime.
Chairman PEREINS. Thank you very much. Thank you very much.
Go ahead, Commissioner Marland, we will hear from you first.
Commissioner MARLAND. Thank you very much, Mr. Chairman.

We appreciate and respect your remarks, and I think some of the remarks have been addressed accidentally to me.

Secretary Richardson, as you probably know, could not be here, and he has delegated his role, and the leadership of this presentation, to his Assistant Secretary for Legislation, Stephen Kurzman.

I will be assisting the Assistant Secretary, and I believe the agenda would call for his testimony to be heard first.

Thank you very much.

STATEMENT OF HON. STEPHEN KURZMAN, ASSISTANT SECRETARY

FOR LEGISLATION OF THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, ACCOMPANIED BY CHRISTOPHER T. CROSS, DEPUTY ASSISTANT SECRETARY FOR LEGISLATION (EDUCATION)

Mr. KURZMAN. Thank you very much, Dr. Marland.

Mr. Chairman, members of the committee, the arrangement of our testimony will be my statement first followed by Dr. Marland. My prepared statement will deal with how the education special revenuesharing proposal, which is before the committee today, fits into the general program which President Nixon has proposed to the Congress for revenue sharing, and then Dr. Marland will have a statement of his own, to explain how this special revenue sharing bill will operate with regard to education specifically. That is why we have two separate statements, Mr. Chairman.

Also, addressing those remarks which opened this morning's session, let me explain too, as I think both our statements will make even clearer, that the special revenue-sharing proposal before the committee is not designed to deal with the fiscal problems of schools today. It is designed to make more effective those programs which are already on the lawbooks. We are of course considering very carefully at this time other proposals which deal with the fiscal problems, but we are not here to testify to those proposals. We are here to deal with education revenue sharing and the proposal which is basically designed to improve existing programs.

It is very much our pleasure to be here today, and we are most pleased and gratified that the chairman has called these hearings on H.R. 7796, the Education Revenue Sharing Act, which was introduced by Congressman Quie and eight cosponsors. Accompanying me is Dr. Sidney P. Marland, Jr., Commissioner of Education, Dr. Duane J. Mattheis, Deputy Commissioner for School Systems and Mr. Christopher T. Cross, Deputy Assistant Secretary for Legislation (Education).

At this first House hearing on the bill, I would like to note that it is a measure which is of major importance to elementary and secondary education, and of central concern to President Nixon in his efforts to reform and revitalize the structure of government in the United States.

THE PHILOSOPHY OF REVENUE SHARING

In his state of the Union message last January 22, the President declared:

The time has now come in America to reverse the flow of power and resources from the States and communities to Washington, and start power and resources flowing back from Washington to the States and communities and, more important, to the people all across America.

The time has come for a new partnership between the Federal Government and the States and localities—a partnership in which we entrust the States and localities with a larger share of the Nation's responsibilities, and in which we share our Federal revenues with them so that they can meet those responsibilities.

The concept of revenue sharing is not new: it was advocated by both Presidential candidates in 1964 and appeared in both major party platforms of 1968. What is new and revolutionary about the concept is that this administration has enunciated a two-part overall strategy-embracing general return of tax revenues to the States and special revenue sharing in six areas of special national concern: education, urban and rural development, manpower, transportation and law enforcement. In each of these proposals, we evoke the spirit and the substance of self-determination—to preserve it where it exists, to strengthen it where it is weak, and to create the conditions for its re-emergence where it has disappeared.

Self-determination is the hallmark of revenue sharing. The President has proposed general revenue sharing in order to correct the increasingly severe fiscal mismatch between the States and localities, faced with demands for services which are rapidly outpacing revenues, and the Federal Government which is equipped with a faster growing tax base. Recipient State and local governments would be free to apportion shared revenues among the uses they deemed to be of the highest priority for their citizens. They would no longer be caught in the Federal straightjacket which assumes that what is good for one State is equally beneficial to another.

Since approximately 40 percent of local and State revenues are now devoted to education, it is reasonable to expect that education will receive a substantial portion of general revenue income.

SPECIAL REVENUE SHARING

In addition to the general revenue-sharing bill, the President has proposed six special revenue-sharing bills, designed to correct the complex and often inefficient way Federal assistance is provided. These bills taken together would consolidate more than 100 existing categorical programs in all areas of government into six broad systems for sharing Federal revenues with States and localities.

But the goal is not the mere simplification of Federal organization charts. The goal is twofold. First, consolidation is critically needed to free the States and localities from strangulation by the bureaucratic redtape required by the scores of individual programs. In spite of similarities among related programs in goals, guarantees, and ultimate beneficiaries, each program has its own regulations, application forms, reporting requirements, and in many cases its own State plan.

Second, special revenue sharing will give the States and localities greater freedom than they now have to determine their own priorities within broad program areas and to decide how best to meet those priorities. In this respect, special revenue sharing will accomplish a dramatic reversal of the long-term trend toward an ever greater concentration of decisionmaking power in Washington.

Although most of the national debate so far has focused primarily on general revenue sharing, I believe that special revenue sharing will have an equally significant long-range impact on the Nation. While general revenue sharing offers the prospect of substantially reducing pressures on State and local tax bases, special revenue sharing offers a new mechanism for Federal-State collaboration in matters of mutual concern. Reform and revitalization of the Federal system will not be accomplished by money alone; the funds must also be accompanied by reform of the decisionmaking process to restore the authority of State and local governments—and this is precisely what special revenue sharing is designed to accomplish.

EDUCATION REVENUE SHARING

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H.R. 7796, the education revenue sharing bill before the committee today, exemplifies this strategy of governmental reform. It would redefine the Federal role in elementary and secondary education, a redefinition which has become more necessary with the passage of each new categorical program. By delineating broad areas of Federal concern, education revenue sharing would assure that national priorities continue to be met.

1. EXTRAORDINARY GROWTII OF CATEGORICAL PROGRAMS

Over the past half century there has been a growing trend toward ever-narrower categories of Federal assistance to elementary and secondary education. The categorical approach dates back to 1917 and the Smith-Hughes Act, the first vocational eduction legislation. In 1958, the National Defense Education Act continued and expanded this pattern for Federal aid. In response to national concern for strengthened curricula in science, mathematics, and foreign languages, the NDEA established a series of programs designed to encourage more young people to pursue studies and acquire skills in fields considered vital to the national defense. In subsequent years, a broader range of national educational needs was identified, and Congress passed in rapid succession a series of laws providing special help for the disadvantaged, for the handicapped, to train more teachers, to modernize vocational and technical education, and to provide more books, equipment, and technology.

Clearly, these programs have had a profound impact on America's educational system. But there is a serious question as to how many more categories can be added to the existing structure without swamping it completely. The Office of Education now administers more than 100 categorical programs. To complicate the picture even further, at least 26 Federal agencies also administer significant categorical programs affecting schools and colleges.

2. STATE AND LOCAL GOVERNMENTS' PROBLEMS UNDER THE

CATEGORICAL MAZE

Seen from ground level, the jungle of Federal guidelines, regulations, application forms, and evaluation requirements is almost impenetrable.

In order to mount a comprehensive program for disadvantaged children, for example, a local school superintendent finds himself facing the necessity of simultaneously seeking program funds under title of the Elementary and Secondary Education Act, books under title II, and counseling under title III. In addition, he may seek assistance through special programs under the Education for the Handicapped Act, or purchase equipment under title III of NDEA, or recruit staff under part B-2 of the Education Professions Development Act. Programs under the Vocational Education Act or an Adult Education program may complicate the picture still further.

In theory these laws offer the potential for significant support of the local superintendent's program. Unfortunately, however, each categorical program requires a separate application, often to separate divisions of the State educational agency. Some programs require matching funds; others do not. Some only require an acceptable project proposal; others fund projects on a higher competitive basis. And each categorical program has its own complicated set of regulations, guidelines, and reporting requirements.

These requirements make it difficult for even the most affluent and best staffed school district to put together a coherent package of Federal assistance. For smaller, poorer systems, the task is simply impossible. Just keeping informed of the array of programs available and how, when and where to apply for them has become a nearly impossible undertaking for any local school superintendent, unless he can afford professional assistance.

The demands of grantsmanship often tend to benefit the wealthier school districts and States by creating a regressive situation in which needy districts less readily apply for or receive aid. All districts are affected by the uncertainty, multiplied by the number of different grant applications each has filed, as to whether they will receive the funds requested. All are affected by having to rely for funding of individual grants on the level of appropriations for various particular categorical programs.

Problems with the categorical approach to Federal aid are also increasingly apparent at the State level

, where the paperwork required is staggering. A typical State plan for a single formula grant program is dozens of pages long and takes thousands of man-hours to prepare. States often establish separate units to do this work for programs and projects that are Federally funded, because of requirements for individual auditing and reporting. These units and their personnel are counterparts--reproductions on a smaller scale of the units that administer the programs in the Office of Education. State education officials frequently work more closely with various units of OE than with their own agencies, often managing their Federal funds in isolation from State resources available for the same purposes, and isoJated, too, from other Federally assisted State programs. Obviously this fragmentation severely diminishes the possibility of comprehensive, coordinated educational planning at the State level; to the con

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