Secretary ROMNEY. What I said was we had not consolidated the water and sewer categorical program into the special revenue-sharing program. We left that as a separate categorical program, which would be administered separately. And there would be that additional source of funds just for water and sewer grants.

Senator MCINTYRE. So we are not talking about water and sewer here under the special revenue sharing in your bill.

Secretary ROMNEY. Not particularly. We haven't consolidated the present water and sewer categorical program into the bill.

But special revenue sharing, for community development purposes, would be defined broadly enough so that if a community wanted to use some of the money it got under special revenue sharing for water and sewer purposes, they could use it for that.

In addition, they might get a grant under the existing program. Senator MCINTYRE. Mr. Chairman, I don't want to take too much. time here now. I have a lot of questions that I would like to ask. I am going to go on until you stop me.

Here is a question, Mr. Secretary.

How can we assure under S. 1618 that our community development funds are spent for high-priority rather than low-priority projects? Should the Congress be concerned if a locality decides that a baseball stadium or a new city hall has a local priority of community development? Should we be concerned?

Secretary ROMNEY. Well, under special revenue sharing, we make the responsibility of establishing the level of priority a responsibility of the local officials. And we make it perfectly clear that they are the ones that are responsible for establishing those priorities.

Thus, we have put them in a position where the people can hold them accountable.

My experience is that unless you have clear-cut responsibility and clear-cut accountability, you can't expect the discipline that you need in connection with the establishment of priorities, or the carrying out of any other aspects of policymaking decisions.

So the priority levels would be established by the local officials.

Now, we believe, based on the experience we have had, that where they know that is their money, where they know that they are the ones that have got to decide how that money is going to be spent, that they will spend it much more wisely than if they feel that this is just kind of a windfall from the Federal Government.

I have seen public statements by Governors and mayors to the effect that when they reach the point in their budgetmaking that they are considering some Federal grant, that they aren't inclined to view the way in which that money is to be used as carefully as they view the use of money that they are completely responsible for.

Now, under special revenue sharing, they become completely responsible, because the Federal Government isn't going to say that you have got to spend it for this particular community development purpose. Now, the Federal Government establishes priorities on a broader basis. The Federal Government establishes its priortities by saying that the community development, special revenue sharing purposes shall be these. And the community must then use the funds within the definition of community development. That is how Congress establishes its priority with respect to community development.

Now, within that definition that Congress lays down, then the local officials are completely responsible for the use of the funds. Now, in the same way, the Congress establishes a priority by deciding that there should be a special revenue-sharing program for education, defining what areas of education it can be used for, special revenue-sharing program for transportation, and manpower training and development, and rural community development, and law enforcement-all of those being major high-priority national objectives. But having defined the areas to be dealt with, then the responsibility is that of the local or State officials involved.

Senator MCINTYRE. One of the decisions that I have to make, then, is, do I want to turn this thing around so that the mayor and the elected officials of a city, whatever agency it is-in New Hampshire, I think our housing agencies handled urban renewal-handles priority setting. Secretary ROMNEY. It could be. In many places they are consolidated. Senator MCINTYRE. But the boss would be the mayor and the council. Secretary ROMNEY. That is correct, except for the housing. As I pointed out, that doesn't change particularly.

Senator MCINTYRE. I got that out of my head. It appeals to me. I really think that is where it should be. But I know, and you know, that it is not going to be the great answer, bceause I can think of some instances where expertise may be lacking at the local level-but I agree with the President when he made that speech and said all the expertise is not right here in Washington either. A lot of it is back home with the city councils and the mayor.

Secretary ROMNEY. That is exactly right. And there are some in the Federal establishment that aren't.

But, in any event, what this does is to shift the decisionmaking from the Federal bureaucracy to the elected officials at this State and local level.

Now, that is the big thing that happens.

Now, the other thing that happens, Senator-and I think this is a very important thing-my experience is that when you are trying to run something, when you are responsible for something, if you try to bury yourself in too much detail, if the things you are dealing with are too complex to understand, why, you can't be very effective in giving them direction. So you have to identify the major things, the key things.

Now, in my opinion, Congress has been trying to deal with too many things. There have been so many categorical assistance programs created that Congress can't understand them. Those of us in the administration can't understand them. The people out in our field offices can't understand them. There are too many of them.

And what we are saying is, for goodness sake, let's simplify them and get them down so Congress can say, "Look, this is the amount of money we will make available for urban community development, defined this way. But, Mr. Governor and Mr. Mayor, here is the money, and you are responsible for how it is used. And you are going to be held accountable by the people"-instead of having some fellow down in our Department that they may or may not know decide how they are going to use that money.

Senator MCINTYRE. I have known some lulus in that department, and I have known some good men, too.

One last question, and I will yield.

Take a case in any one of the projects under the special revenue sharing. Let's say a city decides to take a $100,000 and put $50,000 of its own with it to do a project, but it doesn't have the $50,000. So it borrows it and bonds it.

The next year they get another $100,000.

Would they be allowed to take next year's money and pay off the debt of a previous year?

Secretary ROMNEY. Yes, as long as it is for the purpose defined by Congress and being embraced in the community revenue sharing.

Now, the way we defined it in the bill is that we have included all of the activities that could currently be undertaken by the programs being consolidated under community development, so the funds could be used just as broadly as funds can now be used for urban renewal and for model cities and for rehabilitation loans and neighborhood facilities. Now, if Congress wants to change that definition, that is up to Congress. But at least you control it by the definition, and you control it by the amount of money.

Senator MCINTYRE. So when we are going to get $100,000 every year, we want to build a new city hall, and when we are going to get it, we build a real monument. And then the next year we take the $100,000

Secretary ROMNEY. That happened under urban renewal.

Senator MCINTYRE. Some of those things scare me. I was out in California the other day. I understand they have got more real estate than they know what to do with.

Thank you, Mr. Chairman. I would yield now.

Secretary ROMNEY. Senator, look; when we took office, it took 36 months to process an urban renewal application-36 months.

Senator MCINTYRE. You said the one you looked at the other day was 21% feet high.

The CHAIRMAN. Senator Packwood?

Senator PACKWOOD. Mr. Secretary, I followed your answers to Senator McIntyre's questions, and I think I understand what you are saying.

If the State of New York wants to use part of their community development statewide money for those buildings in Albany that they are putting up, that is OK.

Secretary ROMNEY. The State doesn't get that. But if they want to use some of the general revenue sharing money, they could use it for that purpose, that is right.

Senator PACKWOOD. Or in this case, they have got the county, or the city of Albany, floating a fair-sized bond issue. They could use it for those buildings.

Secretary ROMNEY. That is correct.

Senator PACKWOOD. So as long as they account for the money and so long as they come within the broad definition of what community development is

Secretary ROMNEY. That is right.

Senator PACKWOOD. I agree with you. I want to make sure about this hold-harmless mechanism. This applies beyond just the first year in this general category?

Secretary ROMNEY. Yes. It carries on indefinitely.

Now, the reason for that is this: that based on the history of the appropriations for these activities, there unquestionably will be rather consistent increases in the amount of money made available for urban community development.

If you take a look at the history of the increases in appropriations for urban renewal, it has been moved up substantially in the 10-year period. It went up about seven or eight times in amount.

Now, eventually the amount made available through the automatic formula distribution will be more than equal to the hold harmless in all of these communities, so it washes out eventually. But in the meantime the communities get as much as they would be getting under the cate gorical programs.

Senator PACKWOOD. A quick question about low rent.

Secretary ROMNEY. And they are a lot better off under this holdharmless provision than they are under the present situation, because they have no assurance now that they will get what they have been getting.

As a matter of fact, those communities that have been gettingperhaps, doing a little better than they ought to, and they are the ones I think that would like to see kind of a block-grant approach on the basis of the past. They are less likely to get what they have been getting in the past, because they have been getting a little more than they were really entitled to in relationship to the whole national pic

ture.

Senator PACKWOOD. Under the low-rent, public-housing expenditures under the 1937 Housing Act, as best I can figure, we will still have about $210 million of unspent appropriations at the end of this fiscal

year.

Secretary ROMNEY. That is the Public Housing Act.

Senator PACKWOOD. Why?

Where is that table?

Secretary ROMNEY. Two reasons, basically.

Well, I have a table here which analyzes the contract authority that is available for the fiscal year 1972.

Senator PACKWOOD. Is that the one that had $417 million available at the beginning of the current fiscal year?

Secretary ROMNEY. Well, 412.

Do you have that table in front of you?

Senator PACKWOOD. I have 417. But I won't argue about the 5 million. I have a total authority of $207 million being used during fiscal year 1972.

Secretary ROMNEY. I don't have it that way.

Fiscal year 1972, yes, that is right, 207. That is correct-207. And there is a balance available June 3, 1972, of $205 million.

Senator PACKWOOD. Why haven't we spent that? We have applications far beyond that, apparently approved applications, for the use of this money.

Is this part of the administration's view on spending?

Secretary ROMNEY. Two reasons.

One is the feeling that we have a very balanced program in total. In recent years we have adopted the 236 program which provides housing units for low- and moderate-income families on a volum

Consequently, the output of subsidized housing for low- and moderate-income families has been greatly increased beyond what it was when we had public housing first. So the feeling within the administration has been that the volume of public housing we are proposing in relationship to the other subsidized programs is a pretty good

balance.

Now, to give you some feel of the relationship between what we are doing now and what we have been doing.

Between 1958 and 1968, in that 10-year period, the average number of public-housing units started was 35,000.

Senator PACKWOOD. Let's talk about

Secretary ROMNEY. Now, what we are proposing is 95,000 for 1972, which is almost three times what was being done during the 10-year period.

But, on top of that, we have got the 236 program.

Now, that is one reason. It is part of what we think is a balanced program, and we shouldn't be going heavier on the public housing side of it.

A second reason is this. We have got an organization that is absolutely stretched to the limit. We have got an organization that has undertaken to handle a volume that is way beyond anything we have had in the past, and handling a volume on the basis of programs that are more complex than anything we have had in the past. And we are having problems. There isn't any question about that.

I have been making it quite clear we are having problems. We are having problems because of the complexity of these programs, and we need them simplified. And I don't want to try and push up further without the personnel to do it.

Frankly, we are trying to add people and train people and get them qualified to handle programs that are, in my opinion, almost administratively impossible.

I have said that so many times in the last year and a half. I just hope that it will be recognized and that we get some simplification here before we get too many more problems.

Senator PACKWOOD. You gave me two reasons.

I understand the problems of the administration. They are a nightmare. And I sympathize with every word of your last answer. But, in addition, are you saying that given the streamlining, you are still satisfied that between 236 and the money under public housing you wouldn't need to spend this other money?

Secretary ROMNEY. I am saying, everything taken into consideration, I think we have got a pretty good balance, but you have to consider the complexity, because that is part of it.

Senator PACKWOOD. Under the general revenue sharing, or the pecial revenue sharing, would those funds be subject to the same lecision of the President to withhold expenditures that any number of programs are now?

Secretary ROMNEY. Well, I assume they would, if the President. inds himself confronted with the same basic situations he is con'ronted with now. What the President is confronted with basically

that congressional appropriations exceed the outlay ceiling. Conequently, he has to cut back on programs.

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