It may, however, be worth noting that the bill may be less important in terms of combinations which the Federal agencies themselves now see as feasible or possible than in connection with combinations that might be seen as desirable by State or local agencies. One of the advantages of the bill is that it should make it easier for State and local agencies to exercise influence on the ways in which Federal agencies view their own programs and the relationships among them. The Federal agencies, in short, may have as much to learn as to teach when it comes to the imaginative and effective use of their programs in dealing with the wide range of needs and problems which exist at the State and local level. To the extent that this is so, and to the extent that the bill contributes to the learning process, it ought to provide the Federal government with a good deal of information relevant to its own organization and coordination decisions. We would recommend two technical amendments to S. 2981. On page 7, line 24 of the bill, the word "upon" should be placed after "(1)". On page 2, line 19, the requirement might better be described by the word "action" instead of the word "order". We make this latter recommendation because there are circumstances in which a formal Agency order might not be necessary to effect a desirable result. We have been informed by the Bureau of the Budget that the enactment of this legislation would be in accord with the program of the President. Sincerely yours, ROBERT C. WEAVER. OFFICE OF THE DEPUTY ATTORNEY GENERAL, Hon. JOHN L. MOCLELLAN, DEAR SENATOR: This is in response to your request for the views of the Department of Justice on S. 2981, the "Joint Funding Simplification Act of 1968." The purpose of the bill is to enable states and public or private organizations and agencies to obtain more effectively and efficiently the use of resources available to them from more than one federal agency, and to combine state and federal resources in support of projects of common interest. To effect these purposes the bill would authorize agency heads to adopt uniform provisions respecting certain statutory requirements, to provide for the delegation of certain powers and responsibilities and to provide for the establishment of joint management funds under conditions prescribed. Federal agencies would be authorized to enter into agreements with states or state agencies as appropriate to extend the benefits of the act. The proposed bill is an important step in implementing the President's request, in his 1967 message on "The Quality of American Government", for a workable plan for grant simplification. The Department of Justice recommends enactment of S. 2981. The Bureau of the Budget has advised that there is no objection to the submission of this report from the standpoint of the Administration's program. DEAR SENATOR MCCLELLAN: The Atomic Energy Commission is pleased to reply to your letter of February 20, 1968, which asked for our views on S. 2951. "a Bill to provide temporary authority to expedite procedures for consideration and approval of projects drawing upon more than one Federal assistance program, to simplify requirements for the operation of those projects, and for other purposes." Except for two minor changes, S. 2981 appears to be identical with H.R. 12631 which was introduced in the House on August 28, 1967. *Section 3 (a) (page 2, lines 16-17) and Section 3(a) (4) (page 3, line 12). The proposed legislation is designed to help simplify and coordinate Federal assistance programs, jointly funded by two or more agencies, in support of projects conducted by local governments and other public or private organizations and agencies. For this purpose, Federal agencies would be authorized to take various appropriate measures through internal orders or interagency agreements. AEC has had considerable experience with jointly funded projects, a noteworthy example of which is our current joint program with the Office of Saline Water of the Department of Interior for participation in a large nucleardesalting project to be carried out by the Metropolitan Water District of Southern California and private and public utility entities in Southern California. To the full extent of applicable law, we have had occasion usefully to employ various measures similar to those provided for in S. 2981. Accordingly, the Commission is in favor of legislation such as S. 2981 which could serve to provide additional authority to facilitate useful joint measures to aid in the administration of jointly funded projects. The Bureau of the Budget has advised that there is no objection to the presentation of this report and that enactment of S. 2981 would be in accord with the President's program. Sincerely yours, Hon. JOHN L. MOCLELLAN, R. E. HOLLINGSWORTH, COMPTROLLER GENERAL OF THE UNITED STATES, Washington, D.C., May 4, 1968. Chairman, Committee on Government Operations, U.S. Senate, Washington, D.C. DEAR MR. CHAIRMAN: This is in reference to your request of February 19, 1968, for our views on S. 2981, the proposed "Joint Funding Simplification Act of 1968." We fully support the general objective of simplifying and improving the administration of related grant-in-aid programs. Today's large number of individual grant-in-aid programs, each with its own set of complex special requirements, separate authorizations and appropriations, cost sharing ratios, allocation formulas, and financial procedures, makes it increasingly difficult to manage and administer those programs in a comprehensive or efficient manner. It is our opinion that there is presently much, in the way of coordinating and standardizing current Federal grant-in-aid programs, which could be done on an administrative level without additional legislation. But, if administering grant programs on a consolidated basis is desirable, we believe that the real key to significantly improved administration lies in the legislative consolidation of programs into broader categories of assistance, and the placement of like programs in a single agency, rather than establishing an administrative apparatus to deal with continuing proliferation of single narrow purpose programs. The bill S. 2981, although limited to three years, would permit the inauguration of the program on a Government-wide basis without provision for going through an experimental and testing period. We would prefer first having a limited application to eliminate any problem areas prior to full-scale implementation. If legislation is enacted we believe that it should be carefully and gradually implemented under the required Presidential guidelines with provision for thorough evaluations of results achieved, and that a specific provision should be included in the legislation for limiting its application to geographical areas or perhaps to programs. Our concern is that there could exist pressures which might force too rapid an adoption of untested concepts and procedures, and make difficult the reversal of procedures found to be unworkable. We understand also that it is contemplated that further recommendations will be made by the Executive Branch with respect to the consolidation of existing categorical grants. A determination as to the extent to which this could be accomplished, with appropriate recommendations, should be made in advance of any extension of the legislation. We would indorse legislation limited in its application as indicated above. This would not only serve to more specifically delineate the advisability of full implementation of the proposals, but would also provide valuable information relating to programs which might be more efficiently administered if consolidated as contemplated by title VI of S. 698, title VI of H.R. 5770, title III of H.R. 8194, and similar bills now pending in the Congress. With respect to specific provisions of the bill, section 8 authorizes the establishment of joint management funds to account for projects financed from more than one Federal program or appropriation with any excess funds therein being returned to the participating Federal agencies in accordance with a formula mutually acceptable as providing an equitable distribution, and for effecting returns accordingly to the applicable appropriations. Consideration should be given to the extent to which this procedure might reduce congressional control over the appropriations for the individual programs. Also, section 9(a) would have the effect of permitting any appropriation that is available for training or technical assistance purposes to be used for any other Federal assistance program that becomes involved in joint funding, although the latter program may not have funds approved for training and technical assistance purposes. This could result in significant amounts of training and technical assistance funds being used for purposes beyond those for which they were originally authorized and appropriated. Sincerely yours, ELMER B. STAATS, Comptroller General of the United States. THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE, Washington, D.C., May 16, 1968. Hon. JOHN L. MCCLELLAN, DEAR MR. CHAIRMAN: This letter is in response to your request of February 20, 1968, for a report on S. 2981, a bill "To provide temporary authority to expedite procedures for consideration and approval of projects drawing upon more than one Federal assistance program, to simplify requirements for the operation of those projects, and for other purposes." The proposed joint funding simplification bill offers a basis for needed improvement in our methods of supporting activities which cut across program and agency lines. Our Department continues to strive toward improving and simplifying our support mechanisms. We believe that S. 2981 will make a significant contribution to our pursuit of this goal by permitting a simplified, better coordinated and more expeditious review, approval and post award administration of jointly funded projects. Specifically Section 6(b), provides an important new means by which Federal agency heads may arrange for joint review of proposals by a single panel, board, or committee in lieu of separate reviews. Moreover, Section 6(c) authorizes the waiver, in certain circumstances, of single state agency requirements, thereby permitting a more responsive and effective use of aid funds in meeting State, local, and other grantee needs and affording States needed flexibility in recognition of the comprehensive nature of some of our new programs. In authorizing the establishment of joint management funds, the accounting and administration will be streamlined and simplified both for recipient institutions and awarding agencies. In addition, the establishment of uniform administrative and technical requirements encouraged by Section 6(a) will go far in reducing the administrative complexities which often stand in the way of responsive program administration. In summary this Department strongly endorses the concepts of grant simplification reflected in the proposed bill, and we feel that the temporary authority requested in S. 2981 will permit an application of these concepts to help solve the mounting problems associated with the increasing complexity of Federal aid administration. We are advised by the Bureau of the Budget that there is no objection to the presentation of this report and that enactment of this legislative proposal would be in accord with the Administration's program. Sincerely, WILBUR J. COHEN, Secretary. VETERANS ADMINISTRATION, Hon. JOHN L. MCCLELLAN, DEAR MR. CHAIRMAN: This will respond to your request for a report from the Veterans Administration on S. 2981, 90th Congress, a bill "To provide temporary authority to expedite procedures for consideration and approval of projects drawing upon more than one Federal assistance program, to simplify requirements for the operation of those projects, and for other purposes." The purpose of this bill is to remove or simplify certain administrative and technical impediments which hamper or prevent the consideration, processing, approval, and administration of projects which draw upon resources available from more than one Federal agency, program, or appropriation. This would enable State and local governments and other public or private agencies to use Federal financial assistance under two or more programs in support or multipurpose projects. The impact of this legislation on Veterans Administration programs would appear to be slight. However, we believe that the bill would have a beneficial effect on the administration of grants-in-aid programs by other Federal agencies and would be of great assistance to State and local governments and other public and private agencies. For these reasons we would have no objection to the favorable consideration of S. 2981 by your Committee. We are advised by the Bureau of the Budget that there is no objection to the presentation of this report to your Committee, and that enactment of this legislation would be in accord with the program of the President. Sincerely, W. J. DRIVER, Administrator. Senator MUSKIE. Our witness this morning is Mr. Phillip S. Hughes, Deputy Director, Bureau of the Budget. Why don't you proceed? TESTIMONY OF PHILLIP S. HUGHES, DEPUTY DIRECTOR, BUREAU OF THE BUDGET; ACCOMPANIED BY JAMES M. FREY, DEPUTY DIRECTOR, OFFICE OF LEGISLATIVE REFERENCE Mr. HUGHES. Thank you, Mr. Chairman. We are very pleased to be here, and we share your hope that the people in the room, even though they may find the subject matter complex, will not find it too dry. We agree with you that it is the substance of governmental problems and of intergovernmental relations. Since these are complex, the legislation dealing with these problems is correspondingly complex. We hope, too, that our testimony is no more incomprehensible than complexity of the subject matter requires. We will try in the statement to deal with the substantive issues and essential questions and will be pleased to work with you and the staff on the "fine print" of amendments and of the details of changes or amendments which prove desirable. Senator MUSKIE. Thank you very much. and members of the committee, we are here to discuss S. 698, the Intergovernmental Cooperation Act, which was introduced by the chairman of the subcommittee, and other related measures which have as their purpose the enhancement of our system of federalism and the improvement of the quality of American Government. 95-626-68 -7 The purpose of S. 698 is to make more workable the machinery of our Government through achieving the fullest possible cooperation and coordination of activities at the Federal, State, and local levels in, as the bill phrases it, "an increasingly complex society." To achieve this purpose the bill as introduced is designed to: (a) improve the administration of grants-in-aid to the States, title II; (b) permit provision of reimbursable technical services by the Federal Government to State and local governments, title III; (c) establish coordinated intergovernmental policy and administration of grants and loans for urban development, title IV; (d) Title V, provide for periodic congressional review of grant-in-aid programs; (e) title VI, authorize the consolidation of certain grant programs; (f) title VII, provide for the acquisition, use, and disposition of land within urban areas by Federal agencies in conformity with local government programs; (g) title VIII, establish a uniform relocation assistance program, and (h) title IX, establish a uniform land acquisition policy for direct Federal and federally aided programs. Finally, the measure as recently amended by Senator Muskie would aim at improving the accounting, auditing, and financial reporting requirements associated with Federal assistance funds. The present legislation before this subcommittee is the direct lineal descendant of previous congressional consideration over the last several years of intergovernmental cooperation acts, all of which have been sponsored by the chairman of this subcommittee. Last year the Advisory Commission on Intergovernmental Relations requested our assistance in developing an intergovernmental cooperation act. After discussions with the various affected Federal agencies and with the Advisory Commission, agreement was reached on a measure transmitted by the ACIR containing five titles which are identical or substantially similar to corresponding titles of S. 698. My testimony today will also take into account this measure as it relates to the relevant titles of S. 698. Previous Bureau testimony in 1965 and 1966 emphasized the growing importance of cooperative federalism reflected in the significant enlargement of Federal aid to State and local governments to deal with problems of national concern. In the fiscal year 1969, the total of Federal grant programs dealing with national goals in a joint endeavor by Federal, State, and local units of government will exceed $20 billion. In that fiscal period, such Federal financial assistance to State and local governments under existing and proposed programs will total an estimated $20.3 billion, of which there will be net expenditures of $15.5 billion from regular budget accounts and $4.8 billion from the highway and unemployment trust funds. Senator MUSKIE. I would like to ask a question at this point, Mr. Hughes. Do you have any idea of the amount of State and local matching funds which are added to the $20 billion of Federal funds under these programs? Mr. HUGHES. We do have estimates, Mr. Chairman. We may have some fairly precise figures. I know we have data on this. I would be very happy to furnish it for the record. I don't believe we have data on the States' share with us. Senator MUSKIE. I think we have made some rather wild guesses |