The bill before us, H. R. 7397, would provide for grants to achieve each of these objectives, within the framework of the unified publichealth-grant structure: support grants, extension and improvement grants, and special project grants. By redesigning the grant structure to accord squarely with our objectives, I think we can make a vast improvement in the present public-health-grant legislation.

The bill would, in brief, achieve greater simplicity and flexibility by unifying the six public-health grants, and would revise the legislative structure to identify and define the objectives of Federal grants.

I have not intended, by this brief introduction, to preempt any of the field which Mrs. Hobby will cover. However, I did feel that a summary of the bill's provisions would be appropriate at the outset.

Mrs. Hobby, if you are ready, we would be pleased to receive your testimony.

STATEMENTS OF MRS. OVETA CULP HOBBY, SECRETARY OF HEALTH, EDUCATION, AND WELFARE; NELSON ROCKEFELLER, UNDER SECRETARY OF HEALTH, EDUCATION, AND WELFARE; DR. LEONARD A. SCHEELE, SURGEON GENERAL OF THE PUBLIC HEALTH SERVICE, AND DR. JACK HALDEMAN AND SAM KIMBLE, PUBLIC HEALTH SERVICE, DEPARTMENT OF HEALTH, EDUCATION AND WELFARE

Secretary HOBBY. Thank you, sir.

Mr. Chairman and members of the committee, before proceeding with the prepared statement, I should like to indicate for the record that Mr. Nelson Rockefeller, Under Secretary of Health, Education, and Welfare will participate in the presentation of our testimony. Also present, to assist in answering technical questions, are Dr. Leonard A. Scheele, Surgeon General of the Public Health Service, and Dr. Jack Haldeman, and Mr. Sam Kimble, also from the Public Health Service.

Mr. Chairman, it is a privilege to appear before you again. One month ago I testified in favor of the bill to broaden the hospital survey and construction program. Today, I wish to testify on behalf of another bill introduced by your chairman, H. R. 7397. This bill is designed to simplify and improve the several grant-in-aid programs, other than the hospital survey and construction program, which are now administered pursuant to the provisions of the Public Health Service Act.

In combination with several related bills which will come before other committees of the Congress, H. R. 7397 represents a concerted effort to simplify and improve the structure and administration of 14 major grant-in-aid programs administered by the Department of Health, Education, and Welfare.

The first of these 14 programs to be established was a grant-in-aid for vocational education. It was instituted by the Congress in 1917 under the Smith-Hughes Act. In the succeeding 35 years Congress added the other programs to meet particular needs. Today the Public Health Service administers six different grant programs for the support of State and local health services. Eight other grant programs are administered by the Children's Bureau, the Office of Education, and the Office of Vocational Rehabilitation. While all of these programs

have some common features, each has its own variations with respect to State allotments, matching formulas, administrative procedures, and the like.

When we first examined the present grant structure, it became apparent that the number, the variation, and the complexity of existing authorizations and regulations were obstacles to effective administration-particularly State and local administration. Furthermore, it appeared that the pattern and structure of these grants did not provide the flexibility needed to meet the problems in the best possible way.

In recognition of the need for clarification, improvement and greater flexibility, we last year reviewed the history and operation of all these programs. The results of this review led to the recommendations embodied in H. R. 7397. In order that you may have a better picture of the findings which underlie the proposals, I should like at this time to ask Mr. Rockefeller to show you some charts which portray the grant-in-aid programs as they exist today. They will give you some idea of the variety, complexity, and rigidity of the present grant structure.

Mr. Rockefeller.

Mr. ROCKEFELLER. Mrs. Secretary, Mr. Chairman, and gentlemen of the committee, in many ways the problems up for discussion this morning are complex, but the basic principles involved are very simple.

First I should like to say what is included in the discussion and what is not.

The Hospital Survey and Construction Act, and the public assistance grants are not included for discussion.

The 14 grants-in-aid programs which are included are listed here [indicating on charts]:

Under public health, the general health grants, tuberculosis, venereal disease control, mental health, cancer control, heart disease control.

Under the Children's Bureau, maternal and child welfare, child health. Under vocational education, agricultural education, distributive education trades in industry, home economics, and under vocational rehabilitation, the vocational rehabilitation grants-in-aid program.

These 14 grants-in-aid programs are the ones the Secretary referred to and which have been under discussion.

However, I should like to point out that only the first six are included for consideration in H. R. 7397 and those are the ones we will be dealing with.

All of these have been reviewed and they represent the basic programs of the Department in these areas.

Now, the Secretary mentioned the studies which have been under way. These were carried out by task forces in these four areas.

The next item I would like to explain briefly is the formulas for these programs. I should like to explain how the formulas are worked out, how widely they differ, and what basic elements are included.

The left-hand column which you see here indicates the total appropriations under any one of these grants-in-aid programs-the Federal appropriation. This happens to be the tuberculosis allotment formula.

There are certain basic elements which are taken into consideration in the allotment of funds, as you gentlemen well know.

The green part [indicating on plat] represents the population and financial need factor, which is given consideration.

The brown part represents the problem need.

The gray, the basic grant or minimum allocation to each State. The funds are divided percentagewise between these different factors.

Then, the funds in each of these areas are divided among the States on the basis of a formula, the formula for the division of the funds allocated on the basis of population and financial need.

You have the State population times the inverse ratio of the per capita income of that State, divided into the total national population times the average national per capita income, multiplied on an inverse ratio. It is complicated when you look at it at first, but in essence it works out very simply.

You have 35 percent of the funds in this particular formula going for problem need, which is based on the State tuberculosis mortality divided into the United States tuberculosis mortality. You have 35.7 percent of funds allocated on a basis of an administrative evaluation. of the State's problems and needs, into the total United States problem needs. Then you have down here a little under 10 percent, which is the basic grant of $7,500 to each State.

That is the allotment for tuberculosis.

The matching requirements are shown in the lower right hand corner of the chart. In all public health grants, when the money has been divided among the States, the States have to match $2 of Federal money with $1 of State money.

In the next chart showing the general health grant-in-aid program, you will notice that 95 percent of the money is allocated on the basis of population and financial need and only a small proportion on the basis of problem needs.

In the heart program you have still another basis for the allocation53.5 percent of the money is allocated on the basis of population and financial needs and 46.5 percent is on the basis of the floor which has a formula of its own and the problem need is not brought into the picture.

In the cancer program, 60 percent is allocated on the basis of population and financial need and 35 percent on the basis of problem needs. Again, the formula varies somewhat, but there is a certain similarity. The matching as you know is the same in all of the public health grants. The mental health program has still another formula. The allocations are different and I will just run through these hurriedly.

Now, I am not going to go into detail on the other program formulas because they are not under consideration in this bill. I will mention 3 briefly to indicate the wide variation that exists in all 14 of these formulas. In the Children's Bureau program, there is a special project allotment which is a new factor that has come in. Perhaps the most complicated formulas of all are in the Office of Education, under two acts, the Smith-Hughes Act, and the George-Barden Act. And the vocational-rehabilitation formula is a relatively simple. formula, maintenance and improvement being the basic factors.

As you will note, these have entirely different matching provisions. Mr. PRIEST. Mr. Chairman.

The CHAIRMAN. Mr. Priest.

Mr. PRIEST. Mr. Rockefeller, in order to make the record clear, I would like to ask if these other programs are to be considered by other committees having jurisdiction over them?

Mr. ROCKEFELLER. The Children's Bureau program?

Mr. PRIEST. Yes.

Mr. ROCKEFELLER. The formulas for all of them are the same as recommended for Public Health. The Children's Bureau legislation is before the Ways and Means Committee. The vocational education and vocational rehabilitation go before the Education and Labor Committee.

Mr. PRIEST. Thank you.

Mr. ROCKEFELLER. I think there is one more chart here.

Now, going back, Mr. Chairman, to these six formulas and speaking about them in terms of the funds, both Federal and State, that are being expended in these areas, the black represents the Federal share of the expenditure and the white the States and local share.

You will note here in "general health," the matching represents $2 Federal money to $1 of State money, so that you can see the extent of overmatching in these programs as far as State and local funds are concerned.

Then you have here the grants. There are two different types of grants-in-aid programs. As the Secretary mentioned in her text, there is the general health grant-in-aid program which can be applied by the States to their whole range of health programs. It was the first public health grant-in-aid program and was adopted by the Congress in 1935.

Then, starting in 1938, and continuing through 1950, the five categorical grants-in-aid programs were established.

I think it would be interesting to see how these grants, both the general and categoricals, relate to the programs of the State and local communities.

This chart gives you the typical types of service which are rendered by the State and county health departments. They are divided into three areas: personal service, environmental service, and supporting

service.

Under the personal service we have dental health; venereal disease, which is one of the categorical grants programs there; and TBanother categorical grant program; other communicable diseases; hearing and vision; mental health, which is also a categorical grantsin-aid program; school health; hygiene of aging; occupational health; cancer, another categorical grant; diabetes; heart, a categorical grant; and other chronic diseases, and migratory labor.

Then under your environmental services are very important programs: Air- and water-pollution control, which is becoming more and more important all of the time; food and milk sanitation; vector control; water supply; sewage disposal; readilogical health; hygiene of housing; and home accident prevention.

And then you have the supporting services health education, laboratory, nursing, licensure, nutrition, training, vital statistics and medical school services.

I just want to point out one more thing, and that is that the general health grants can be used by the State and local communities for any and all of these programs.

With the categorical grants, the funds to the States and local communities can only be used for those categories.

That point needs to be stressed.

You have a system here in which each formula is different and all the formulas are complex, thus making it difficult for the States and the Federal administration to understand their detailed application. In addition, you have both the general type of grants, and the categorical grants.

I thank you, Mr. Chairman.

Mr. HESELTON. Mr. Chairman.

The CHAIRMAN. Mr. Heselton.

Mr. HESELTON. What is vector control?

Mr. ROCKEFELLER. I would like to ask Dr. Scheele to answer that question.

Dr. SCHEELE. Vector control is insect control. For example, in controlling certain mosquitoes, we control malaria.

Mr. O'HARA. Mr. Chairman.

The CHAIRMAN. Mr. O'Hara.

Mr. O'HARA. May I ask one question here of Mr. Rockefeller? On the chart on the right, the upper chart, the amount shown in millions. Is that the latest appropriation?

Mr. ROCKEFELLER. This is millions of dollars and represents the total expenditures, State and local, for 1952 in each of these areasfor general health $154 million for tuberculosis $25 million; venereal diseases, $25 million; mental health, $11 million; cancer control, $13 million, and heart diseases, $5 million. Those are the total expenditures, the black representing the Federal and the white the State and local share.

Mr. O'HARA. Will someone give the figures during the testimony as to what the Federal contribution is at the present time and what it is suggested to be under the new bill, what the new bill would do to it? I do not want it now, but I assume that that will be done. Mr. ROCKEFELLER. You mean the actual appropriations?

Mr. O'HARA. Yes.

Mr. ROCKEFELLER. The appropriations for grants to States for fiscal year 1954 are as follows:

General health.

Venereal disease

Tuberculosis__

$10, 135, 000| Mental health.

1, 976, 500 Cancer..

4, 275, 000 Heart__

$2, 325, 000 2,250,000 1, 125, 000

The CHAIRMAN. Are there any further questions? If not, Mrs. Hobby, you may proceed.

Secretary HOBBY. From our review of current grant authorizations and programs-which Mr. Rockefeller has just summarized-we reached the following conclusions:

That the 14 grant-in-aid formulas were unnecessarily varied and complex;

That the present grants based on disease categories resulted in unnecessary rigidity in State and local program operations;

That a redefinition of the objectives underlying the grant-in-aid program was desirable and that the grant structure should be revised to express these objectives.

To implement these conclusions, there are two basic proposals embodied in H. R. 7397.

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