2. United States will pay additional period of 13 weeks beyond State benefit payments. Surplus food Commodity Credit Corporation to distribute processed food to homes and institutions. Hon. LISTER HILL, DEPARTMENT OF AGRICULTURE, Washington, D. C., January 23, 1956. United States Senate. Chairman, Committee on Labor and Public Welfare, DEAR SENATOR HILL: In accordance with your request we have reviewed S. 2663, a bill to establish an effective program to alleviate conditions of excessive unemployment in certain economically depressed areas. This bill proposes to establish a program to alleviate conditions of excessive unemployment in certain economically depressed areas by setting up a Depressed Areas Administration which shall make loans to assist in financing the construction of industrial plants, commercial facilities, or public facilities, to the extent of $200 million. Federal agencies are to procure supplies or services from contractors in depressed areas to the maximum practicable extent. Technical information, market research, etc., from Federal agencies shall be furnished to depressed areas by the Administrator. Special provisions are made for tax relief, vocational training, unemployment compensation, and surplus food supplies in depressed areas. Section 17 of the bill relates to the distribution of surplus commodities and would provide authority to the Commodity Credit Corporation to underwrite the cost of processing price support food commodities into a form suitable for home and institutional use. With such authority, CCC inventories of wheat and corn could be processed into flour and meal, respectively, for distribution under the authority of sections 407 and 416 of the Agricultural Act of 1949, as amended. This bill aims at special industrial development programs to alleviate unemployment problems in depressed industrial areas. Depressed areas are defined in terms of the percentage of the labor force that is (totally) unemployed. In general, this would not cover areas of low farm income and rural underemployment where the problem is great and for which the Department has recommended a rural development program. Since this bill deals primarily with urban problems and has no explicit provisions for any rural development program, the programs proposed are in the field of responsibilities of agencies other than the Department of Agriculture. However, efforts to reduce unemployment in depressed industrial areas and to prevent the spreading of unemployment to still other areas are bound to have a supporting effect on consumer demand for food and other farm products. The Department of Agriculture supports the objectives of this bill, but has no comment on the specific measures proposed to handle problems of industrial unemployment. It is suggested that the area development program recommended by the President, although partially covered by S. 2663, would be more adequately met by enactment of S. 2892. With respect to the provision relating to surplus food supplies, Public Law 311, 84th Congress, approved August 9, 1955, provides for the use of section 32 funds to make wheat flour and cornmeal available to needy persons, upon the request of the governor of any State, through the period June 30, 1957. Therefore, this Department does not believe any further legislation on this matter is needed until such time as experience with the program under Public Law 311 indicates that change in the maximum amount or the program duration authorized by that law is warranted. The Bureau of the Budget advises that there is no objection to the submission of this report. Sincerely yours, TRUE D. MORSE, Hon. LISTER HILL, ATOMIC ENERGY COMMISSION, Washington, D. C., February 1, 1956. Chairman, Committee on Labor and Public Welfare, United States Senate. DEAR SENATOR HILL: This is in response to your request for our comments on S. 2663, a bill to establish an effective program to alleviate conditions of excessive unemployment in certain economically depressed areas. The proposed bill provides that the Congress finds and declares that the present existence of excessive unemployment in certain areas of the Nation is jeopardizing the health, standard of living, and general welfare of the Nation. The purpose of the bill is to provide assistance to communities, industries, enterprises, and individuals of depressed areas defined as areas where there has existed unemployment of not less than 9 percent of the labor force for 18 months or 6 percent of the labor force for 3 years. The bill would create a Depressed Areas Administration under the direction and control of an administrator, who, in carrying out his duties under the bill, would consult with an advisory committee composed of designated representatives of other Government agencies including the Chairman of the Atomic Energy Commission. The Administrator is authorized to make loans to assist in financing construction of industrial and commercial facilities in depressed areas. He is also authorized to construct or make grants or loans to assist in the construction of public facilities which he finds will result in the most effective and efficient alleviation of unemployment within depressed areas. The bill provides additional relief to depressed areas by (a) requiring Government agencies, to the maximum extent practicable, to procure supplies and services in depressed areas; (b) making information, market research, and other advice obtainable from Government agencies available to depressed areas; (c) providing tax relief under section 168 (e) (1) of the Internal Revenue Code of 1954 to facilities constructed to relieve unemployment; (d) providing vocational training to residents of depressed areas and increased unemployment compensation to such vocational trainees; and (e) making surplus food supplies more readily available in depressed areas. The Administrator is authorized to obtain from any agency information, estimates, and statistics needed to carry out his duties. As the Commission is not specially qualified to ascertain the extent of unemployment or to evaluate the effect of present unemployment on the general welfare or the need for the proposed legislation, our comments will be confined to the impact of enactment of the proposed bill on the Atomic Energy Commission. Under section 5 of the bill, the Administrator, in carrying out his duties under the bill, is required to consult with the advisory committee of which the Chairman of this Commission would be a member. This would seem to require the Chairman of this Commission to participate in (a) determinations of those areas qualifying as depressed areas under the bill; (b) disposition of loan applications for construction of industrial and commercial facilities; and (c) determination of needed public facilities in depressed areas. The responsibilities of the Chairman of the Commission under the Atomic Energy Act of 1954 are so extensive as to make it unlikely that he could find time to make a valuable contribution to the Depressed Areas Administration. Of course, even if the Chairman was not a member of the advisory committee, the Commission, on request of the Administrator, would provide such technical and other information in accordance with the terms of the Atomic Energy Act as the Administrator might consider desirable. In view of the availability of this information to the Administrator, it would seem unnecessary to designate the Chairman of the Commission as a member of the advisory committee. While section 9 authorizes the Administrator to select public facilities for construction in depressed areas and authorizizes him to construct or make grants or loans for such construction, we assume that with respect to projects involving the application of atomic energy the Administrator's authority would not supersede the Commission's responsibilities under the Atomic Energy Act including its responsibility to protect public health and safety, license construction and operation of facilities and the use of special nuclear material, and safeguard restricted data. In view of the foregoing, we consider the designation of the Chairman of the Atomic Energy Commission as a member of the advisory committee unnecessary. For the reasons indicated, we are unable to express a view as to the desirability of the proposed legislation. The Bureau of the Budget has advised us that the President has recommended an area development program which, although partially covered by the provisions of S. 2663, would be more adequately met by S. 2892. The Bureau of the Budget has also advised us that it has no objection to the submission of these views. Sincerely yours, Hon. LISTER HILL, W. F. LIBBY (For Chairman). EXECUTIVE OFFICE OF THE PRESIDENT, BUREAU OF THE BUDGET, Washington 25, D. C., January 16, 1956. Chairman, Committee on Labor and Public Welfare, United States Senate, Washington 25, D. C. MY DEAR MR. CHAIRMAN: This will acknowledge your request of July 30, 1955, for the views of the Bureau of the Budget on S. 2663, a bill to establish an effective program to alleviate conditions of excessive unemployment in certain economically depressed areas. The President has recommended an area redevelopment program which, although partially covered by the provisions of S. 2663, would be more adequately met by S. 2892. Accordingly, the Bureau recommends enactment of that bill in lieu of S. 2663. Sincerely yours, DEAR MR. CHAIRMAN: Reference is made to your request to the Secretary of Defense with respect to S. 2663, 84th Congress, a bill to establish an effective program to alleviate conditions of excessive unemployment in certain economically depressed areas. The Secretary of Defense has delegated to the Department of the Army the responsibility for expressing the views of the Department of Defense thereon. The Department of the Army, on behalf of the Department of Defense, has considered the above mentioned bill, the purpose of which is to provide assistance to communities, industries, enterprises and individuals of depressed areas to enable them to so adjust their productive activity as to effectively alleviate excessive unemployment within such areas. The bill defines as "depressed areas" those sections of the United States where there has been unemployment of not less than (1) 9 percent of the labor force for at least 18 months or (2) 6 percent of the labor force for at least 3 years. The bill also provides in section 11 (a) that all Government departments and agencies in the procurement of supplies and services shall, "to the maximum practicable extent, procure such supplies and services from contractors in depressed areas or from contractors who in furnishing the same will undertake to provide for the employment of additional individuals in depressed areas." Sections 4 and 5 provide for an administration and advisory committee to implement the act. Section 15 of the bill authorizes the Secretary of Labor to utilize and extend Federal Government facilities for the training of unemployed individuals from depressed areas. The Department of the Army, on behalf of the Department of Defense, has only an indirect interest in the bill, other than the above quoted provision of section 11 (a) and the provisions of section 15. It considers, however, that it must object to those sections for the following reasons: (a) Section 11 (a) provides no criteria or guidance as to the intent of the Congress. There should be a clear indication as to whether price differentials or set asides are intended, and if so, the authority of procurement officers in regard thereto. (b) If the requirement of section 11 (a) be superimposed on the Small Business Act and Administration, some conflict and confusion is to be anticipated. The intent of Congress in this regard should be stated. (c) The rule, regulation, and procedure powers of the Administrator as set forth in section 13 (d) of the bill is not clear as to his authority to regulate procurement officers as to compliance with section 11 (a). The intent of the Congress as to the Administrator's authority in this regard should also be clearly stated. (d) With reference to section 15, relating to the utilization and extension of Federal Government facilities for the training of unemployed individuals, there is little doubt that the bill contemplates cooperation in this regard so that only those facilities susceptible to such training are used. However, this section should be amended to provide that the Secretary of Labor could utilize the facilities of another department or agency only with the consent of the department or agency concerned The Department of the Army, on behalf of the Department of Defense, submits that the Department of Defense is quite willing to carry out the intent and purpose of the Congress in the maintenance of the national economy and the provisions of assistance to depressed areas and small business. However, to do so it is highly essential that the intent of the Congress be clearly defined with respect to the utilization of defense facilities and to the end that the Defense Establishment, in its procurement activity, be clearly aware of the requirements of the bill, and the authority of its procurment officers thereunder, so that effective procurement instructions and regulations may be implemented. The Department of the Army, on behalf of the Department of Defense, therefore, does not recommend enactment of such legislation as presently drafted. In view of the broad rule, regulation and procedure authority of the Administrator as set forth in section 13 (d), the Department of the Army, on behalf of the Department of Defense, is unable to state whether the enactment of the bill would increase the budgetary requirements of the Department of Defense. As proposed, the bill conceivably could effect a significant increase in the costs of the procurement activity. This report has been coordinated within the Department of Defense in accordance with procedures prescribed by the Secretary of Defense. The Bureau of the Budget has advised that, while there is no objection to the submission of this report to the committee, the area redevelopment program recommended by the President, although partially covered by the provisions of S. 2663, would be more adequately met by enactment of S. 2892, 84th Congress. Sincerely yours, Hon. LISTER HILL, WILBER M. BRUCKER, THE SECRETARY OF COMMERCE, Chairman, Committee on Labor and Public Welfare, United States Senate, Washington, D. C., DEAR MR. CHAIRMAN: This letter is in reply to your request for the views of the Department of Commerce with respect to S. 2663, a bill to establish an effective program to alleviate conditions of excessive unemployment in certain economically depressed areas. The Department of Commerce recommends that S. 2663 not be enacted, but rather that favorable consideration be given by the Congress to S. 2892, a bill for the same general purpose which was submitted by this Department and which reflects the recommendations made by the President in his message on the state of the Union sent to the Congress on January 5, 1956. S. 2663 would establish an independent agency to administer a program for the benefit of areas designated as "depressed areas" wherein unemployment has exceeded a specified percentage of labor force of the area. The program would include a $100 million loan program for industrial facilities; a $100 million "grant or loan" program for public facilities; authority for the purpose of directing Federal procurement to such areas; authority for informational activities; and use of accelerated tax-amortization certificates to benefit these areas. The Secretary of Labor would be directed to provide directly or otherwise vocational training for individuals in depressed areas, and, under agreements with States, to make supplementary unemployment compensation payments to individuals being so trained. Provision would be made to facilitate the availability of surplus food to depressed areas. The establishment of an independent agency to perform the activities assigned to it by S. 2663 is not warranted by the general economic condition of our Nation. 73437-56-pt. 1-2 The Nation as a whole is prosperous although some of our communities are faced with problems of substantial and persistent unemployment. This spotty unemployment results in hardships to many individuals and their families and has some impact on the national welfare because of the nonuse of vital human resources. From the scope of the problem, however, it appears that a program fashioned to meet the problem could and should be administered by an existing executive department or agency. Neither the program of loans for industrial development, nor the "grant or loan" program for public facilities has, in the opinion of the Department of Commerce, adequate standards to govern its administration. A Federal program of loans specifically addressed to the problem of helping such areas help themselves is important, but it appears to the Department that the program proposed by S. 2892 is better fashioned to the problem here faced. Because of the absence of standards, the proposed program of "grants or loans" for public facilities does not appear to be tailored to provide the sort of assistance which is apt, in the long run, to contribute materially to the economic stability of the areas. Unilateral action by the Federal Government seems to be invited by section 9 (c) authorizing the initiation of programs of construction of public facilities without awaiting proposals from States, subdivisions thereof, or private organizations associated with the affected areas. This is contrary to the principle which should, in our opinion, pervade the program-to help the areas help themselves. In summary, therefore, it is urged that, although legislation for the general purpose of S. 2663 should be enacted, favorable action on S. 2892 should be taken by the Congress since the latter bill encompasses a program better fashioned to effect a long-term solution to the problem of substantial and persistent unemployment in the so-called depressed areas than is the program described by S. 2663. The Bureau of the Budget has advised that it would interpose no objection to the submission of this report. DEAR SENATOR HILL: This is in reply to your letter of July 30, 1955, in which you request a report of this agency on S. 2663, a bill to establish an effective program to alleviate conditions of excessive unemployment in certain economically depressed areas. There can be little question that the avoidance of excessive unemployment is in the best interests of the United States or of the advantages of Federal assistance in areas of the country in which such a condition exists. As you are probably aware, some steps have already been taken in that direction in order to meet objectives of the present mobilization program. Preference in Government procurement for contractors in labor surplus areas is now being extended in appropriate cases and additional percentages of new capital investment are being certified for purposes of tax amortization to firms building or expanding defense facilities in such areas. We do believe, however, that programs for unemployment assistance should be kept separate from those devoted to defense mobilization, both in authorization and in administration. In this connection, we would be opposed to section 14 of S. 2663 which would amend section 168 of the Internal Revenue Code by making relief of depressed areas a basis for granting tax amortization certificates. While we would not object to use of the tax amortization device to accomplish the objectives of the bill, we believe that if it is to be made available for that purpose it should be authorized by a separate section of the code and should be administered by the Depressed Areas Administrator. |