U.S. DEPARTMENT OF AGRICULTURE, SUMMARY OF 1973 FUNDS WITHHELD FROM USE Total, U.S. Department of Agriculture (excluding Forest Service).. 170,617,000 $5,000,000 36,000 900,000 $10,423 170, 617,000 4 885, 679,900 615,000 1,557,000 262,789,000 18, 557, 967 134, 326 505, 217, 620 1 No additional agreements will be entered into after Dec. 22, 1972. Amounts represent the current estimate of unused authorizations. 2 Amounts represent unused direct loan authorizations. However, $390,000,000 in electric and $89,000,000 in telephone loans have been authorized as insured or guaranteed loans under the Rural Development Act. 3 Emergency loan applications will not be accepted after Dec. 27 or 60 days after designation (whichever comes later) in secretarially designated disaster areas and will not be accepted after Jan. 15 or 60 days after designation (whichever comes later) in presidentially designated areas. Additional operating loan funds will be made available to eligible applicants after the application period for emergency loans has expired. 4 In addition a reduction of $10,000,000 in travel has been prorated to all programs of the Department of Agriculture. The CHAIRMAN. I hope that the Congress can find on what legal authority the administration has based its impoundment of these funds. I had felt that it would be more appropriate to direct many of these questions to the Director of the Office of Management and Budget, Mr. Roy L. Ash. However, Mr. Ash has declined to testify before the Committee on Agriculture and Forestry. Moreover, he states that the departments and agencies can speak for the administration with full knowledge and responsibility on the impoundment of funds. While I am not happy with Mr. Ash's reply, we can attempt to elicit from Secretary Butz the information that this committee needs. However, if we do not receive full and responsible answers to our questions, I believe that this committee should insist on the appearance of Mr. Ash. I am submitting for the hearing record the correspondence I have had with Mr. Ash on this subject, and I ask unanimous consent that they be entered in the record at this point. Without objection, it is so ordered. (The correspondence follows:) Hon. Roy L. ASH, Director, Office of Management and Budget, Executive Office Building, Washington, D.C. JANUARY 23, 1973. DEAR MR. ASH: The Committee on Agriculture and Forestry will hold hearings on the termination and reduction of farm and rural programs on February 1, 2, 5, and 6. Since I understand that the decision to reduce and eliminate many of these programs was made in the Office of Management and Budget, I am requesting that you appear before the Committee on February 1 to answer questions concerning these program curtailments. I hope that you can be present, for it will be impossible for the Committee to properly resolve all of the important questions involved in the reduction and termination of farm and rural programs without receiving testimony from the Office of Management and Budget. With every good wish, I am Sincerely, HERMAN E. TALMADGE, Chairman. THE WHITE HOUSE, Washington, January 19, 1973. Hon. HERMAN E. TALMADGE, U.S. Senate Washington, D.C. DEAR SENATOR TALMADGE: Your letter of January 23 requested that I appear before the Committee on Agriculture and Forestry on February 1 to answer questions concerning farm and rural program curtailments. I regret that I will be unable to accept your invitation due to previous priority commitments. I would note that the Director of the Office of Management and Budget traditionally has appeared before the Congress with respect to the budget as a whole, and I would expect to do likewise. On the other hand, the Director has not appeared before the Congress on particular elements of the budget. Such appearances in support of the President's detailed budget proposals have traditionally been made by the departmental and agency officials concerned. The departments and agencies participated in the formulation of the President's budget and can speak for the Administration with full knowledge and responsibility for the particular programs. I am sure that you recognize both the appropriateness of this practice and the impracticality of having the Director of the Office of Management and Budget appear before all committees on every separate item within the budget. The Secretary of Agriculture and his associates can and will provide full answers to your questions on actions and recommendations concerning the new budget before the Congress. Sincerely yours, ROY L. ASH, Assistant to the President. JANUARY 31, 1973. Hon. Roy L. ASH, Assistant to the President, The White House, Washington, D.C. DEAR MR. ASH: This is to acknowledge your letter of January 29 in response to my request that you testify before the Committee on Agriculture and Forestry on February 1 regarding the Administration's reduction and termination of significant rural programs. I am disappointed that you are unable to accept my invitation "due to previous priority commitments." I regret that your personal priorities do not permit you to appear before the Committee on Agriculture and Forestry to answer questions in regard to the elimination of programs which are vital to rural Americans. Apparently, rural people and rural programs were generally considered to have a low priority when the Administration made its decisions on reductions in Federal expenditures for fiscal 1973. Furthermore, the budget message received by the Congress on January 29 shows that rural programs will continue to receive low priority consideration in fiscal years 1974, 1975 and the years to come. I have noted your statement that the departments and agencies participated in the formulation of the President's budget and can speak for the Administration with full knowledge and responsibility. It was my impression that the decision to terminate vital rural programs was made, not by the departments and agencies. but by the Executive Office of the President. It was for this reason that I felt that the Committee needed to question you. However, it is not my desire to promote needless confrontation between the Legislative and Executive Branches of government. Therefore, the Committee on Agriculture and Forestry will proceed with its hearings and we will attempt to elicit from Secretary Butz the information that the Committee needs. We will attempt to find out who made the decision to terminate and reduce farm and rural programs, what facts were taken into consideration in making these decisions, and against what scale of values the slashed or terminated programs were measured. If we do not receive full and responsive answers to our questions, I believe that the Committee on Agriculture and Forestry will wish to insist upon your appearance before the Committee at a later date. With every good wish, I am Sincerely, HERMAN E. TALMADGE, Chairman. The CHAIRMAN. I hope that the hearing we begin today can serve two purposes: (1) To aid in the restoration of the rightful powers of this Congress, powers which are being dramatically usurped by the President; (2) To restore for the rural people of the Nation programs which are vital if we are to build a strong and prosperous rural America. In many parts of rural America there is little prosperity and little hope. Declining profits in agriculture and increased mechanization have driven thousands of rural people from the land. During the 92d Congress, the Committee on Agriculture and Forestry devoted considerable work and effort to rekindling hope in the future of rural America. In addition to our efforts to awaken people to the potential and promise of the countryside, we passed legislation, the Rural Development Act of 1972. This act will provide the Federal assistance that rural people need to provide increased job opportunities and an improved quality of life for themselves. Now the administration is using one good year in farm income as a basis for dismantling our farm commodity programs. It is using the Rural Development Act as an excuse for abolishing tried and proven rural development programs which have been on the books since the days of the New Deal-programs such as the REA loan program and the EDA program. While talking about the Rural Development Act of 1972, the administration is in fact cutting total Federal loan and grant funds available for rural areas almost in half. I hope that this committee and this Congress will not let the administration succeed. Now, we are delighted indeed to have Secretary Butz with us today, who came at the request of the committee, and if it meets with the committee's approval, here is the way I would suggest we conduct the hearing. First, Secretary Butz has a speaking engagement today at noon. I propose that he be excused at that time, and come back at 2 p.m. in order to let every member of the committee get in questions they desire. I would suggest that we limit our interrogation of the Secretary to 10 minutes on the first round, and then if anyone wants to interrogate on the second or third or fourth round, we will repeat that procedure until both members of the committee and the Secretary are exhausted. [Laughter.] At this point I will insert statements from members of the committee. Without objection, it is so ordered. (Statements for the record are as follows:) STATEMENT OF HON. WALTER D. HUDDLESTON, A U.S. SENATOR FROM THE STATE OF KENTUCKY Senator HUDDLESTON. Mr. Chairman, I will take only several minutes, but I do want to express my deep concern over the announced cutbacks in farm and rural programs. I am particularly disturbed by the discontinuation of two well-established programs: the rural environmental assistance program (REAP) and the low-interest Rural Electrification Administration (REA) loan program. These programs are particularly important to the small farmers in our Nation. We have seen the statistics which tell us that farm production is up and that farm income is up. I do not dispute those statistics. But, farm operation and production costs are also up, cutting into the profits which farmers are realizing. This is especially true in the case of smaller farmers. According to figures provided my office by the Department of Agriculture itself, over a million farmers in our Nation participated in the REAP program in 1972 and the average payment was about $200 per farmer. That is a seemingly meager sum, yet to the small farmer desirous of pursuing programs to improve and protect his lands, it is often the difference between undertaking a project and not undertaking one. It is often the difference between constructing a drainage system, spraying for brush, planting trees, and erecting the structures to keep his herds out of water resources-and not taking these actions. A recent annual ASCS report on farm programs from Grayson County, Ky., stated the significance of this program well: REAP "is the means through which all people share the cost of conserving our most essential natural resources soil, water and woodland. These practices reduce sedimentation, combat pollution, and conserve productive soil and clean water and air for future generations. . . . Each year we are losing thousands of productive acres to urban development, roads, airports, reservoirs, and so forth. There are no more frontiers. Therefore, as the population increases and productive acreage decreases, it is essential that we conserve and utilize our natural resources wisely. We believe that all people are dependent upon these resources and we also believe that it is the responsibility of all people to share the cost in implementing conservation practices for preservation of our soil and water." I agree with the annual report and I would hope that the Department would see fit to reinstate this important program-or at least not to thwart any expressed will of the Congress that may be forthcoming regarding the program. As a member of the Government Operations Committee as well as of this committee, I am very much aware of the controversy over administrative withholding of appropriated funds, or impoundment. I take a very dim view of the procedure. I realize as well as anyone that we must hold the line on expenditures, but I also believe that Congress, under the Constitution, has a responsibility to act on spending and spending reductions. And, I am skeptical of the termination of any program-in the midst of a fiscal year-by administrative decree without consultation with the legislative branch--when the Congress has indicated its support for that program and appropriated substantial sums for it. I would also suggest that the Department review its announced decision regarding the replacement of the 2-percent REA loans with 5-percent guaranteed loans. In actuality, few projects are now initiated under the 2-percent loans. Most projects depend upon several sources of financing which results in a higher overall interest rate than 2 percent. These REA low-interest loans have, however, over the years, provided seed money which allows the extension of electrification and telephone service into the less populated areas. In addition to bringing electricity and telephone service to many rural areas, these loans are the source of energy production which is a prerequisite to development. Without communications and energy sources, development does not take place. With the emphasis placed on rural development in recent times, it would appear worthwhile to continue these low-interest loans. I have questions regarding the advisability of discontinuing and reducing other programs, and I am anxious to hear the justifications for the actions, but the two programs I have mentioned are of particular importance to my State and I wanted to refer to them specifically. I hope your Department will reconsider the actions it has announced with regard to these. STATEMENT OF HON. DICK CLARK, A U.S. SENATOR FROM THE STATE OF IOWA Senator CLARK. Mr. Chairman, I also commend you for holding these hearings. As they are national in scope, I wish to take a brief moment to emphasize the severe repercussions felt in a major farm State such as Iowa. (1) Payments to farmers participating in the feed grain program have been reduced at least 50 percent from last year's level. (2) The abolition by executive fiat of the rural environmental assistance program now leaves Iowa farmers without a Federal program to assist with their conservation efforts, since REAP was the only Federal program providing financial assistance to farmers for conservation and pollution control. Our environmental protection officials tell us that 90 percent of Iowa's water pollution is caused by erosion of soil and the runoff of chemicals and fertilizers in the soil. (3) Housing projects for the elderly in 51 small Iowa towns are still on the drawing boards. They are without Farmers Home Administration (FHA) loans which would have allowed them to be completed. (4) Because of the President's unconstitutional use of impoundment procedures, water and sewage grants for dozens of Iowa communities presently polluting our streams have ended by Presidential decision. We are seriously affected by the administration's pronouncement that it had decided that Congress had acted unwisely in passing such a law and so, abolished the law which Congress had passed. (5) At least 10 rural electric cooperatives are without some $34 million in REA funds they were depending on to provide service this year in the rural areas of our State. This too, was done by the illegal usurpation of congressional authority. I believe the people of Iowa and the Nation deserve a better explanation of these cutbacks than they have been given. |