I have one on the second floor of an office building that has been there 100 years; is that the kind you mean?

Mr. MUIRHEAD. Yes.

Mr. FLOOD. You do not mean Wharton?

Mr. MUIRHEAD. That is already taken care of under the NDEA.

COST OF ADMINISTERING PROGRAMS

Mr. FOGARTY. What about the Medical Assistance Act loan program?

It seems to me it is going to cose more to administer this kind of a program than it would the other way. I do not know.

Mr. MUIRHEAD. It might be that when we come to discuss the higher education activities, which include the establishment of a guaranteed loan program to replace the NDEA, and which include also the establishment of a guaranteed program to include the Nursing Training and Medical Service Act, we might want to develop that point of view that you are asking about now.

EFFECT OF GUARANTEE LOANS ON APPROPRIATION REQUEST

Mr. FOGARTY. How much of a reduction in the appropriation request will this new way of handling these loans make, or show?

Mr. MUIRHEAD. Let me pick up part of the problem and explain it this way: If the question is addressed to the NDEA loans, for example, the authorization in the NDEA for next year is $190 million. If we assume that authorization becomes the budget request and the appropriation, then that figure would then be compared with the amount of money that is in the budget here for guaranteeing the loans.

You will note there is in the budget for fiscal year 1967 $10 million for a guarantee fund, and that there is also in the budget $33 million for the payment of interest, so that the comparison between the amount. of money that would be in the budget to continue the NDEA and the amount of money that is suggested in the budget to carry on these activities would be a comparison between $43 million and $190 million. Mr. FOGARTY. There would be a reduction of about $150 million? Mr. CARDWELL. That is correct.

EXPENSE OF GUARANTEE PROGRAM

On the issue of whether a federally guaranteed loan program is more expensive than a direct Federal loan program, you have to take into consideration the impact of the direct Federal loan program on the educational institutions themselves, because under that program they must put up 10 percent of every loan, ten cents on every dollar. Under the guaranteed loan program, the financial involvement would be between the individual student and the lending institution. Mr. FOGARTY. But if they cannot, the Government will loan them matching funds?

Mr. CARDWELL. No. Not under the NDEA program they will not. Mr. MUIRHEAD. The institution may borrow the 10 percent. Then they pay interest on it.

Mr. CARDWELL. It is still a debt. Out of their limited resources, they have to finance a share of the student loan activity.

Under the guaranteed program, they would not. The individual bank would bear the full burden of putting up the money with the Government guaranteeing payment of the loan and guaranteeing interest on the loan, and paying an interest subsidy on the loan.

Over the full life of the program, you may find that the total cost of the program is higher to the Federal Government because of the interest subsidy to assure that the individual student will be eligible for a loan at a favorable interest rate, a rate that he can afford.

ADMINISTRATIVE COSTS OF THE PROGRAM

Mr. FOGARTY. What about the administration of the program? Mr. CARDWELL. The administration of the program would be centered in the Office of Education.

Mr. FOGARTY. Would it cost more to administer it this new way? Mr. MUIRHEAD. It seems to me, Mr. Chairman, that the difference in cost of administration for the NDEA and for the guaranteed loan program would be rather de minimis. The cost of administration under the guaranteed loan program ultimately may be less than the NDEA because we are seeking to establish State-guaranteed programs in all the States, so the principal responsibility for carrying on the guaranteed loan program would reside with the States, whereas at the moment, under the NDEA, the principal responsibility for administering the program is in the Office of Education.

Mr. FLOOD. There is one thing that bothers me about this kind of program.

I come from the hard-coal fields of Pennsylvania. Do not let this mustache fool you. I am a coal miner. All my people are. I live in what, for want of a better term, has unfortunately been classified by these term makers down here, for the last number of years, as a distressed area. You know the story. It is the West Virginia story, but not as bad. We have a lot of hard coal, but we are making cuff links and earrings out of it. That is about all you can do with hard coal

any more.

The gas and oil people have put us out of business.

When I came here about 20 years ago, I had about 40,000 miners. This morning I have 4,000. That is hard to believe.

We have gone from 19.5 percent unemployment down to about 6, so we have it licked. We are over the hump.

For 20 years this has been a very urgent problem in our area. It is hard to get local school directors to buy this. It has taken 20 years to sell the school people on this school that we are going to break ground for in a couple of months.

You know the story-the local person on the corner running the grocery store is elected school director, and they play it pretty tight to their chest. The tax base is very limited, and it is a serious problem with a lot of unemployment.

Now, as I say, we are over the hump. We are spreading the tax base. We are getting diversified industries. We have it licked, but we are late.

VOCATIONAL EDUCATORS AS PROGRAM ADMINISTRATORS

Do you remember Clemenceau's remark about generals: "War is a much too important thing to leave to generals." What I am concerned about as I snoop about in connection with this program is that the administration of the program is much too important to leave to experts in vocational training. They are so close to the forest they cannot see the trees. They scratch each other's back, and they set up rigid conditions precedent to employment of personnel to run the show. You must have the following conditions: You must have been in vocational training for so many years. You must have taught this so many years, and so on. This is good. If we do not have those people, we have no program.

But now that we are at the present stage, I have the feeling that what we need in the program are professional manpower people, managers, and administrators, characters like you, not some guy that taught welding for 11 years at St. Mary's High School.

This worries me. All the vocational training people that I talk to at the Federal and State level get into a bind; they have a club, and there is no one in it unless you are an expert in vocational training. Now, we have gone beyond that. We have broken through the ceiling here and we are going to put this program in operation. I do not think these guys can run it.

Do you see what I mean? What about that?

Mr. Howe. I have many of the same reactions as you.

Mr. FLOOD. It is like the ladies, you cannot get along with them. and you cannot get along without them.

Mr. Howe. I would say, vocational education has been to a degree rigidified.

Mr. FLOOD. To a degree?

Mr. Howe. And that it has not experienced the same kind of innovative luck that other pieces of educational spectrum have. Perhaps some of the organizations and groups that are strong in the need to be encouraged to look around for constructive change in vocational education. I believe this process has started, too.

Mr. FLOOD. We started it with my school that I am talking about. We have taken a person to head up that school who is a professional school administrator. He had never seen a lathe until 3 months ago. I bet he is going to do a good job.

The No. 2 man is a real oldtime vocational guy. We are lucky. We have a great team.

DANGER OF TRAINING FOR OBSOLETE JOBS

Mr. Howe. My basic concern in this realm is vocational education can get into the box of training people for activities which very rapidly become obsolete.

We live in an economy in which the kind of things people do are going to change during their lives, and I do not think that vocational education as it has existed has taken that point into consideration. Mr. FLOOD. Right.

Mr. Howe. So we need to think more about-how does it harm people.

Mr. LAIRD. What State are you talking about? You are not talking about my State, because we have taken this into consideration in Wisconsin.

Mr. FLOOD. You are advanced as usual.

Mr. Howe. I am really talking from my insights which are not all over the United States at all.

I would look for the kind of change in vocational education which would place somewhat more emphasis than it typically has on the person's capacity to relearn as he goes along through his life.

So it does seem to me here we are talking in a more general and philosophical sense about it, that vocational education probably needs to touch in a little more with the sciences, and with mathematics than it has, but not in a way which forces the youngsters in vocational education into the old college entrance program.

Mr. FLOOD. You and I are not talking about the same thing.

I am talking about the day-by-day operation of this school.

Mr. Howe. Right.

Mr. FLOOD. It is too important to let a vocational training expert run it. He cannot run it.

Mr. Howe. I would hesitate to generalize about all vocational training people in this way.

Mr. FLOOD. I am concerned about administrators, and fellows like you running the thing, and letting Ludington here teach them what to do. That is something else. It is two different things.

GEARING TRAINING TO EMPLOYMENT NEEDS

Mr. LUDINGTON. Could we, on your point, call attention to a new element in the 1963 Vocational Education Act, which calls for agreements between the State boards for vocational education and the employment service in order to keep the program more nearly geared to the employment needs and opportunities?

Mr. FLOOD. That is something else.

Mr. LUDINGTON. Your point that the localization of programs, the local school board determining what courses should be offered, and maintaining those programs after that need has been met is, I think, being phased out of the picture.

We in our administration, working with the States, are requiring annual analyses of the manpower and employment situation in the States.

Mr. FLOOD. I am not talking about that. I agree that I am satisfied that everything is being done that can reasonably be expected to be done, and I am for it.

Mr. LUDINGTON. Yes.

Mr. FLOOD. You missed the point.

Mr. LUDINGTON. I want to make another point.

Mr. FLOOD. All right.

Mr. LUDINGTON. And that is, under the 4 (c) provision for research, development, and experimentation

Mr. FLOOD. You sound like a railroader with a rulebook in his pocket, or a post office employee.

Mr. LUDINGTON. We have to follow the rules.

We are encouraging through the use of those funds the involvement of many points of view in other disciplines than those which you are concerned about, in both the administration in the determination of content, in determining the kind of facilities we ought to have, what kinds of geographic areas ought to be served, and so on.

I would say the thrust of the 1963 Vocational Education Act is beginning to show the kinds of things that are offsetting these cliches and stereotypes that have prevailed all too long.

BUDGET REDUCTION

Mr. FLOOD. Who cut your budget $10,700,000?

If everything we are saying here is so, if everything everybody is saying is so, including the President, who in the world made that cut— the Bureau of the Budget?

They did. Well, I am going to try to put it back.

If everything that has been said here today, and has been testified to before Mr. Dent's subcommittee, and the whole spectrum of laws that we passed last year on education, if all of that is true, and what the President said is true, then it was dead wrong to make this cut. Let the jokers in the Budget Bureau have their $10.7 million. It is outrageous.

I am going to try to put it back in this subcommittee, if I am the only one who votes for it. If they want to cut your budget and strike at the program on the theory that it is not worth it, that is something else. I am willing to argue that with them. Then we have an argument.

But this chiseling, this picayune sniping at a program that everybody is running around saying hosanna about, from the school district to the White House-that shows the cut of the jib of these Budget people. They are chiselers.

Mr. CARDWELL. That reduction, $10.7 million, is net of increases of $12,350.000.

Mr. FLOOD. I understand that.

It is still chiseling or else the record is wrong from beginning to end, starting at the White House.

NATIONAL INDUSTRIAL EQUIPMENT RESERVE

Several years ago, I got hold of somebody from the Department of Defense a real good guy-and I told him about this vocational training school I have, Wyoming Valley Vocational Training School. I said "we do not have dough to buy all this fancy hardware and these precision tools and equipment. Where are we going to get stuff like that?"

"Oh," he said, "We have a lot in mothballs. You bring your people down here, I will meet them. We have warehouses full of this stuff in mothballs that we will let you have. We won't give you title, in case the lid goes off and we have to have it, we have to have it." That is 5 years ago.

It is the most beautiful stuff you can get. My kids have been using it for years and it is still there. We are going to get more. Is that still available, that kind of mothball Government hardware?

Mr. ARNOLD. Yes.

Mr. FLOOD. Thank goodness for that.