In order to come out on the program, is it necessary to have a $3 million leeway?

Mr. MILLER. That is about what we estimate, Mr. Chairman, to enable us to have elbowroom, to turn around, and to actually allocate the available funds.

Mr. JOHNSON. If we had not given you the $78 million, you could not have used the $74.5 million in fiscal 1959?

Mr. MILLER. That is about right.

Mr. Chairman, in conclusion, I would like to give you our reaction to the bills before this committee for your consideration.

We have pointed out the need for stabilizing the program. And I made the statement that we were not in favor of the adoption of a permanent type of program for those reasons.

We are happy that we have the improvement shown in the dairy situation, which I mentioned earlier in the prepared statement.

We are taking, as I said, less cheese, butter, and dry skim milk under the price support program, and we are selling more in the cash markets of that which we do take under the price supports. This is witnessed by the fact that we ran out, at least temporarily, of our skim milk for foreign donation programs in the fall and sold it for cash, instead of donating it. The situation is better.

We are not out of the woods so far as the dairy situation is concerned. We still have a long way to go.

We in the department feel that this school milk program should be continued at about the present level of per capita contribution we spoke about, the 4-cent and 3-cent level. Taking into consideration the increase in population, this $3 million figure, for the turnaround, that you just spoke of, we think that the figures contained in the bills, the majority of them, are about the figures that would be required to enable us to effectively distribute a sufficient amount of money to make that 4-cent and 3-cent reimbursement.

That is particularly true of this year. We will have an opportunity next year at this time to review the situation and reevaluate it again. Mr. JOHNSON. Will $3 million be sufficient for 1961? Most of the bills have $90 million in them for 1961. Will that be a sufficient figure?

Mr. MILLER. We do not know yet, Congressman Johnson. Let me say that we as of now feel that this is a sufficient figure for discussion purposes to operate about as we have this year. And we will have an opportunity to come in next year and evaluate our position then to see if that is sufficient, whether we want to stabilize it or what we want to do.

Mr. JOHNSON. I might say that as soon as I saw the notice that came out in November I called the department. And the figure that I received at that time led me to think that $90 million would be sufficient. But I understand you have made a survey since then of the schools participating as to what they feel they will need. I do not know whether those figures are available at this time or not, are they? Mr. MILLER. Mr. Lennartson says that we have only made firm figures for this year.

Again, we can progress for 1960-61 as we did in 1959-60 and see if that comes out.

I also have some tables that I would like to insert in the record, Mr. Chairman.

No. 1 is entitled, "Average Daily Expenditure of Federal Funds, September-November, Fiscal Year 1960 Compared With the Same Period in Fiscal Year 1959 by States."

I also have an analysis by months, a comparison of monthly expenditures for the fiscal year 1959 with estimates for fiscal year 1960, which I would like to offer for the record.

I have a third one which is entitled, "Special Milk Program, Federal Expenditures, Fiscal Year 1959," which I should like to offer for the record. It spells out our situation.

Mr. JOHNSON. They will be included as part of the record at this point.

(The three tables referred to are as follows:)

Special milk program: Average daily expenditure of Federal funds, SeptemberNovember, fiscal year 1960, compared with the same period in fiscal year 1959, by States

Fiscal year 1959

Month

Special milk program: Comparison of monthly expenditures, fiscal year 1959, with estimates for fiscal year 1960

[In thousands of dollars]

Special milk program: Federal expenditures, fiscal year 1959

Mr. JOHNSON. Are you through with your statement?

Mr. MILLER. Yes, sir; I am. That concludes our remarks.
Mr. JOHNSON. Mr. Quie.

Mr. QUIE. I notice on your chart entitled, "Special Milk Program, Average Daily Expenditure of Federal Funds," that it reads 22.3 percent increase for the State of New Jersey, and for the State of Utah 26.5 percent increase in 1960 over 1959. What was the reason for that large increase?

Mr. MILLER. Congressman Quie, could Mr. Davis cover that matter, having the figures at hand?

Mr. QUIE. Yes.

Mr. DAVIS. I think that your observation, Congressman Quie, bears out the statement that Mr. Miller made earlier that the increases in the States are uneven.

I think if you would look at this same table for several years ago you would have found that New Jersey, for example, was quite low. They did not progress as fast as some of the other States in the earlier years of the program. This last year they have put more emphasis on the program. They had more room for expansion due to the earlier low participation.

In the case of Utah which again demonstrates what can happen in this program, that increase is represented almost entirely by the entrance of Salt Lake City into the program this year for the first time. And that, together with the size of the population of the State, caused a very appreciable percentage increase to show up this year.

Mr. QUIE. Are there any other States that might make a sizable showing next year?

Mr. DAVIS. I am sure there very well may be. There are many factors that enter into what causes some of these expansions.

As Mr. Miller pointed out, we really have very little sound information on which to base any evidence of the increase for next year. I will say this, that this kind of spotty picture has occurred every year so far. Some States have shown marked increases.

Mr. QUIE. Mr. Miller, I gather from your testimony that you feel that this program should be considered a price support mechanism for milk?

Mr. MILLER. That is correct; yes, sir.

Mr. QUIE. Do you still feel that the Federal Government should remain in the program?

Mr. MILLER. We should phase out of the program. We think that as the program matures, as the population trend levels out, and as the dairy situation improves, that we should give serious consideration to that. We think that we should phase it out.

Mr. QUIE. Do you think that the schools will pick up the responsibility, then, or do you think that they will eliminate the program? Mr. MILLER. I think that the schools would assume the responsibility for it-that is, the States would assume that responsibility. Mr. JOHNSON. I may have missed this in your statement, but did you come out for increases in this program?

Mr. MILLER. Yes, sir. We think it advisable to maintain the present level this year, and we will take a look at it again next year. Mr. JOHNSON. Your idea is that after several more years to look at stabilizing it?

Mr. MILLER. I would not say several more years. As the situation improves-if the dairy price support program continues to show improvement, as it has in the past year or 2 years, that we ought to phase out, as it shows to continue to show improvement; yes, sir.

Mr. HAGEN. Am I correct in understanding that you support these bills, all of which are identical?

Mr. MILLER. Yes; we think it advisable to enact them.

Mr. HAGEN. For the record, this program is one of those so-called back-door approaches to the treasury, in other words, if we authorize a certain amount of money you are obliged to spend it; is that correct?

Mr. MILLER. It is permissible for us to do so, in order to accomplish the purposes of the legislation; yes, sir. That is right. We do not necessarily have to spend it. If we can effect the distribution for a less figure than that appropriated, why, we will do so. It is the 4-cent and 3-cent rate we are trying to maintain.

Mr. HAGEN. To maintain the current Federal contribution requires a larger authorization of CCC expenditures?

Mr. MILLER. Yes.

Mr. HAGEN. Would this program be more acceptable if the funds were provided through regular appropriation channels?

Mr. MILLER. This is for price support purposes. We ought to have money appropriated, or someone else could have the appropriation other than the Department of Agriculture, if it is going to be a permanent program for purposes of feeding the schoolchildren.

This is one of those things where we charge it up to the operation of the farm program. We should do so, so long as it is a price support

measure.

Mr. JOHNSON. I have just one comment. As a school milk program farmers are for it, and the people in the city benefit from it. You cannot call this just a price support program. You have to consider the health angle.

Mr. HAGEN. Farmers also get a benefit from it.

Mr. JOHNSON. Yes, they get the benefit from it. The people of New York City and of every other city.

Mr. MILLER. We are still considering it a price support mechanism, Congressman Johnson. And I think that when we get over into this other area, why, we had better start reanalyzing where we charge it and what it is for. And that we should take all of these factors into consideration.

Mr. COAD. Since this announcement in November, are there any schools that have indicated that they would pick up the balance, or that any States would take up the other half cent, so that it would be a statewide program, so far as the schools are concerned?

Mr. MILLER. I have not received any communication relative to the allocation of the funds, except some inquiries that have been directed to Members of Congress. Mr. Garber could, probably, comment on

that that.

Have you any indications as to what the States' attitude would be? Mr. GARBER. No, sir; we have not received any communications so far as the State governments picking up the difference is concerned. There might be instances where the parent-teachers associations or the civic clubs or someone of that nature might pick up the differ

ence.

Mr. COAD. The reason I asked the question was that Mr. Miller stated a while ago that you felt that as this program is phased out, if it is to be phased out, that the State-local governments would pick it up. I wanted to find out whether they would pick it up.

Mr. MILLER. I do not think that they will bother to do it, so long as there is a possibility of having it done under the price support mechanism. I do not think they will volunteer to do it.