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We challenge this line of reasoning in its entirety.

In the first place, we submit that inflation is not the greatest danger—or even the most serious economic problem-confronting the United States. In our view the far greater threat to the welfare and security of the United States lies in the slowdown of economic growth and the underemployment of manpower and resources which persist in spite of the much celebrated recovery.

But even if inflation were as disastrous a danger as the administration would have us believe, we see little evidence that it is a present danger. On the contrary, with unemployment still abnormally high and a price level that has been almost stable for the past year, the prospect of inflation seems relatively remote.

Neither do we see convincing evidence that a deficit in the Federal budget of a size that might follow on the enactment of programs of Federal aid to education, housing, and other programs which we have advocated, would have a serious inflationary effect. In this very fiscal year the Government is incurring the largest peacetime deficit ever; and if an unbalanced budget alone would inflate prices, prices would be rising rapidly at this moment. But in general they are not. And where prices have risen in some of the basic industries, such as automobiles and steel, it has not been because of deficits in the budget or because of excess in demand, but because of the ability of a few very large corporations to control output and administer price increases even in the face of slack or declining demand. If rising prices are your concern, we think you will have to look elsewhere than the deficit for the causes.

We believe that vigorous programs of the kind we are advocating, by stimulating the expansion of the economy, will contribute both to price stability and to a balanced budget. We believe they will contribute to price stability by adding to the supply of goods and services which would result from a fully employed economy. And they will help balance the budget over a period of years by the expansion of Federal revenues that inevitably accompanies expansion of the economy. May I remind you, for example, that if the economy grows at the rate of 5 percent a year, it will add some $20 billion to the national output and consequently $4 or $5 billion to the Government's revenues. This way lies the answer to expanded Federal programs and a balanced budget.

I am bound to say, moreover, Mr. Chairman, that even if our estimate and analysis of the economic factors proved wrong—if the administration were right that inflation was both a serious and necessary consequence of enacting programs of aid to education—we would still advocate that you enact such programs ånd at the same time raise additional revenues to pay for them as you did in the highway program. This would not have to mean higher tax rates : simply by closing well-recognized loopholes and correcting inequities, revenues could be increased by several billion dollars.

In short, we urge that instead of treating education, housing, and such programs as stepchildren in our society, the Congress should establish a system of priorities to insure that they will receive the support they deserve and the country needs. If this unbalances the budget, and if the economy reaches a point where an unbalanced budget will create excessive demand and a genuine danger of inflation, then it would be far more rational and more in the country's interest to increase Federal revenues than to sacrifice these high priority needs.

It is incredible to us that anyone can suggest, as the administration has, that our continued well-being as a Nation can be assured by measures designed to inhibit productive capacity and stunt our ability to create and pay for essential goods and services. If this philosophy dominates the Congress, it will be a confession not of the inadequacy of our resources or of our economy but of the inadequacy of our national will and of Government in meeting its responsibility to take the minimal steps necessary to assure that our resources are used efficiently for purposes of highest national importance.

There are, of course, other familiar arguments against any program which would make a reasonable start toward reducing our educational deficiencies. We are told that the needs are not really so great, and that in any case the States and localities have the means to meet them. Frankly, I do not believe that these claims are made seriously. Those who proffer these arguments are attempting to avoid the real issues and their efforts reflect a lack of confidence in the strength of their case.

Except for a few people who never take off their blinders and who have no knowledge of our schools, we cannot see how anyone can really believe that we are not seriously behind in providing adequate classroom facilities and qualified teachers for our children. But there has been a real effort to understate the extent of the problem. For example, 3 years ago, a comprehensive survey, conducted by the Department of Health, Education, and Welfare and financed by a $3 million grant from Congress estimated the classroom shortage as of 1952 at 312,000. But in some mysterious way, the shortage had shrunk to 200,000 when the White House Conference on Education was held, and now the administration says it is 140,500.

We have not been favored with a reasoned explanation for the wholesale reduction in numbers, but the Department's own statistics demonstrate that it has not been accomplished by building schools. The rate of building in the past few years has been just about enough to keep pace with rising enrollments and abandonment of old buildings. Nor is it possible that facilities once correctly classified as firetraps, health hazards, obsolete, and unusable have suddenly become safe for the education of our children. It should not take another tragic fire to convince us that if we err in deciding which schools are fit for habitation, it should be on the side of protecting our children.

But even if we were to accept the minimal estimate of 140,500 classrooms as accurate, we know that at present construction rates of $40,000 per school room, it will require more than $512 billion just to erase the shortage.

The backlog of classrooms, of course, is only one aspect of the problem. The finest new facilities we can provide will not serve their purpose so long as there are not enough qualified teachers to man them. The statistics are familiar enough. It is necessary only to cite the national average of $4,800 per year for teachers' wages to know that it will require real initiative by the Federal Government simply to make a beginning toward bringing salaries up to a reasonable level, which in turn will help assure that teachers have the proper qualifications and help to reduce the shortage.

And, if we look at the dynamics of the situation, we can be sure that in the next few years, the problem will be magnified many times. Until now, the great postwar increase in the birth rate has affected only the elementary schools, and yet little progress has been made in reducing the backlog. Beginning this year, however, children born in the postwar years are entering the secondary schools, and by 1965 there will be 10.8 million children in public high schools, almost double the enrollment when the war ended. By then the dimensions of our school needs will be overwhelming.

COMMENTS ON PENDING BILLS

Examined in the light of our basic needs and aspirations, S. 1016 is no more than a token device designed to appease public demands for action. No juggling of statistics can make a workable piece of legislation out of a bill that just does not provide the funds because of a few misbegotten ideas about the budget. In deference to the budget, no funds at all will be allocated until 1961. When the program reaches high gear in 1965, total Federal expenditures will reach $85 million per year.

You have already heard testimony on the imposing problems of administration presented by S. 1016 and the doubts of securities experts about its effect on the market for public bonds, so I will not dwell on these points.

Even assuming these obstacles can be overcome, the program, when initiated, will be wholly inadequate. S. 1016 makes no provision at all for teachers' salaries and, in fact, by requiring matching grants from the States to support school construction bonds, may actually draw off money from salary-raising programs. According to Mr. Flemming's most optimistic estimates, Federal funds will be responsible for the construction of 37,500 classrooms by 1965. This will be the Federal contribution toward eliminating a backlog which the administration admits is 140,500 and which many people think is much larger. In fact, with the States exerting their greatest efforts just to keep up with present requirements and greatly increased enrollment expected in the next 5 years, the administration bill may leave us in 1965 just where we are right now.

We have been asked whether we would support S. 1016 if the alternative were no program at all. We hope not to be placed on the horns of this dilemma, but if compelled to make a choice, we would prefer to forego S. 1016 and renew the fight for meaningful legislation next year. A bill like S. 1016, which seeks to create the illusion that the Federal Government has assumed its responsibilities when this is not the case at all is, to our way of thinking, more futile than no legislation at all.

By contrast with the administration bill, S. 2 provides the means for making a realistic start toward eliminating our educational deficiencies. It recognizes both classroom and teachers' salary requirements and would authorize the expenditure of $1142 billion on a sliding scale, over a 4-year period. Wisely, we think, the bill is flexible enough to allow the States to apportion funds as they see fit between construction and salaries.

It should be noted, however, that S. 2 is a modest proposal, when regarded in the light of our needs. If one-third of the total authorization is devoted to the construction of classrooms (this is roughly the way States now apportion their own funds), it will be possible to build 95,000 classrooms. This would constitute merely a good beginning toward eliminating the backlog, even if it is not as great as the experts believe.

We would also take exception to the allocation formula contained in S. 2. With a mobile population, education is a national problem, and the failure of any one State to solve its problem adds to the burden of its sister States. For this reason, we believe that any formula for distributing funds should take into account need, in terms of per capita income, as well as school-age population. We realize that it is a factor in reallocating money under the school effort index and we think this formula is a good one, but we feel that need should be considered directly in original allocations.

On balance, however, we believe that S. 2 is the soundest proposal offered to meet our national needs. Its passage would perhaps signify the beginning of an era of responsible government and a realization that the dialogue of the past is useless in dealing with the problems of the 1950's.

We are dismayed by the failure of the leadership of both parties to give these education bills a high priority. Our complex civilization and our swiftly developing technology require that we strengthen our education system from kindergarten to graduate school, to provide the Nation with well-informed citizen-voters and a knowledgeable, well-trained working force.

We of ADA do not come before you advocating a high priority for education to emulate the Soviet Union. We say that the United States must have, and can afford, an education system that serves American purposes of democracy efficiently as the Russian education system seems to serve the Communist system of totalitarianism. As the Soviet school system emphasizes the service to the all. powerful state, ours must emphasize the social arts and the values of democracy. As the Manchester Guardian said: “The primary aim of educational advance is not the production of ballistic missiles or synthetic moons. These, however essential can only be byproducts. The central aim must remain the continued development of a healthy and purposeful society which, by the manner in which it manages its own affairs, provides a practical example of the value of freedom.”

I would like to say in the first place, Senator, that we appreciate very much what

you and other members of the subcommittee have done in sponsoring the bills that are now before you. All of us who are concerned with public education are particularly indebted to you, sir, for the bill which, in our view, comes nearer than any in meeting the need, and we are indebted to Senators McNamara, Case, and Javits for bills which recognize the Federal responsibility for public education, and recognize that to discharge this responsibility may require sizable sums of money. In this respect our testimony supports all of the bills sponsored by these Senators.

I would like to summarize very briefly, Senator, by saying that, in our view, the case for Federal legislation to aid local education does not rest on the pauperization of State and local governments. We believe that, even if the States and localities are able to squeeze out additional revenues from their hard-pressed tax resources, there are still compelling reasons why the Federal Government should aid local public education. We believe this is true in the first place because the Federal tax system is progressive, through the heavy reliance on income taxes, and that this is a better source of revenue for additional educational efforts than the sales and property taxes of the State and local governments which are already so hard pressed.

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We believe, in the second place, that the Federal revenues are more responsive to the rising national income, and therefore it will be fiscally more efficient to tap this rising income through the Federal tax system and by Federal grants to the States.

We believe, moreover, that it is demonstrated that public education is not strictly a local and State concern. The fabulous mobility of the American people means that the education of young people in one State is a matter of great concern to other States to which those people may later migrate as workers and as voters.

Finally, Mr. Chairman, we believe that there is a discouraging trend of interstate competition among the States to keep their taxes down by curtailing education and other public services. This is a trend that has led to bitter experience in those States which have dared to maintain and raise the standards of education only to find their industries threatening to move to States with lower standards of services and lower taxes.

You may have noticed that Governor Freeman, of Minnesota, recently demanded Federal action, as he said, "to end the colonialization of State governments by big business” which, he pointed out, is demanding either that State services be curtailed or that the costs of them be shifted through sales taxes and property taxes to the backs of those least able to pay.

Moreover, Mr. Chairman, we see ample evidence, as I am sure you do, that the State and local governments are already straining their revenue resources to meet the mounting needs for better education for an expanding school population. I will not cite you the statistics which are in my testimony for the record, of the extent to which State and local governments have increased their revenues, their expenditures for public education and, most spectacularly, their indebtedness in the past 10 years.

It is simply not correct to say that the States and local governments have not made adequate efforts to carry this increasing load of education.

I would like to point out, of course, also that the States vary a great deal in their capacity to raise additional revenue. There is a great gap, for example, between the 15 States with per capita personal income above $2,000 a year and the 9 States with per capita personal income below $1,500 a year. We believe that a system of Federal aid to education is necessary to provide some equalization which will make it more tolerable for the low-income States to carry the burden of educating their large school populations.

The other argument that is made against Federal aid to education is the familiar budget argument, the argument that the Federal budget cannot stand it, and that if the Federal budget is unbalanced we will be confronted by a serious inflation.

Of course, we would question in the first place, Mr. Chairman, that inflation at the moment is the most serious economic problem we face. We are among those who believe that the need for sustained economic growth and full employment of our economy is an overriding need, and that the slowdown in economic growth is a greater danger than inflation.

But, beyond this, we see no evidence that unbalancing the budget, in itself and alone, will lead to inflation. It is a familiar fact by

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now that the budget for the current fiscal year will be out of balance by a deficit of some $13 billion and that if this alone were enough to lead to rising prices, prices would be rising very rapidly now instead of having been relatively stable for the past year.

So we do not believe that there inheres in the programs of Federal aid. for education an inflationary danger such as the administration would have us believe. But I am bound to say, Mr. Chairman, that even if our estimate and our analysis of the economic factors proved wrong, even if the administration were right that inflation is both a serious and a necessary consequence of enacting programs of this kind, we would still advocate that you enact such programs and, at the same time, raise additional revenues to pay for them as you did in the highway program.

In short, we urge that, instead of treating education, housing, and such programs as stepchildren in our society, Congress should establish a system of priorities to insure that these programs will receive the support they deserve and that the country needs. If this unbalances the budget, and if the economy reaches the point where an unbalanced budget will create an excessive demand and a genuine danger of inflation, then it would be far more rational, in our opinion, and more in the country's interest to increase the Federal revenues than to sacrifice these high-priority needs.

You have heard, of course, much evidence of the needs of our públic school systems in all parts of the country, and I will not take time even to summarize them here, Mr. Chairman. They are presented in the testimony that I am placing in the record.

I would like to take just a few minutes, if you will permit me, to comment on two of the bills before you. We are particularly dismayed at the approach to this problem in S. 1016. That is the administration's bill. It seems to us it is no more than a token device designed to appease the public demand for action on education.

No juggling of statistics, we believe, can make a workable piece of legislation out of a bill that does not provide the necessary funds because of a few misbegotten ideas about the budget.

In deference to the budget, no funds at all would be allocated until 1961 under this bill, and when the program reaches high gear, if you can call it that, in 1965, the total Federal expenditures will reach $85 million per year, which is indeed and almost literally only a drop in this big bucket.

You have heard much testimony about the administrative difficulties that S. 1016 would present, constitutional difficulties in the States, and the doubt of securities experts about its effect on the market from school bonds. I think it is plain, Mr. Chairman, even from Mr. Flemming's testimony, that this bill is not a bill which will make any appreciable dent in the problem before us. At the very most, it would provide for a few pauperized school districts a way of financing their school construction needs over a long period of time and with a minimum of Federal help.

One point I would like to make: We have been asked on more than one occasion if it comes to this, would we support S. 1016 if the alternative were no program at all.

We would hope not to be placed on the horns of this dilemma. But, if we were compelled to make this choice, we would prefer to

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