I need to be able to explain to the mayor of St. Marys, Ga., why there is no money to build a sewer system that will be a major boon to his town's economic growth. I have to explain why there is no money for St. Marys, but there is $12 million for Zambia.

I have to explain to the first district why there is no money for farm conservation and why the rural electric and rural telephone program must be cut back at the same time the Congress is about tobe asked to have the taxpayers pay to rebuild North Vietnam.

I have to be able to explain why all these programs must be eliminated or reduced at the same time that our Nation spent $9.6 billion for economic and military foreign aid in fiscal year 1972.

Mr. Chairman, I do not know how to explain these decisions. They were made behind the closed doors of the Office of Management and Budget.

They were made by men who wear the cloak of executive privilege. They do not have to answer to the Congress or the people.

I believe the American public has the right to have their budget priorities determined in the public view, in the committee rooms and Chambers of the House and Senate.

For the long range, I believe Congress should set a spending limit for each fiscal year and then live up to that limit when it appropriates funds. It would be an agonizing process, just as agonizing as it is for any American family to balance its own budget.

For the current fiscal year, because time is short, I would suggest that Congress set a percentage for an across-the-board reduction in spending in all departments of Government and let everyone beartheir share of the burden in bringing order back to Government spending.

Thank you, Mr. Chairman.

Senator TALMADGE. Thank you, Congressman Ginn, for a very excellent statement.

I agree with everything you have said. The programs are not only worth while, but it is the law of the land, which the President of the United States cannot abrogate by a unilateral decision of his own. Mr. GINN. Right.

Senator TALMADGE. And as you pointed out, most effectively we have been doing similar things in other areas and not nearly as worthy in virtually every country in the world with our foreign aid program. And our President recommended, as I understand, an increase in the foreign aid program, did he not?

Mr. GINN. Correct.

Senator TALMADGE. I don't believe we can explain to our constituents in Georgia why we ought to do more for foreigners than we do for ourselves, do you?

Mr. GINN. It is awfully difficult.

Senator TALMADGE. I agree.

Senator Curtis.

Senator CURTIS. I am sorry I wasn't here for the beginning of your statement. Thank you for appearing. We shall pursue it all. Mr. GINN. Thank you.

Senator BELLMON. Mr. Chairman, I would just like to congratulate Congressman Ginn on his statement and say I thoroughly agree with him, the way to go about the business of getting the budget back in line is to do it proportionally in each appropriation. I don't under

stand the system of totally wiping out some programs and not touch. ing the others.

Mr. GINN. I agree with the Senator. This is my thinking exactly. Senator BELLMON. I might mention, I put out a bill to this effect yesterday.

Senator TALMADGE. Senator Clark.

Senator CLARK. I would like to second what both the chairman and the Senator have said in terms of the conciseness of the statement, both a constitutional statement and the priority of budgetary considerations. The one question that I have is whether at this point you would have any particular suggestions on how some of these programs could be changed to be more effective, just in the broadest sense, either REAP or REA or any of the matters mentioned.

Mr. GINN. Yes, Senator. I think several of these programs we are considering can be improved, but I think it is the prerogative and the right of Congress to approve what we in fact have put into effect. This is my point. I think Congress should have time to look at the programs that we have enacted, or the previous Congress have enacted, rather than have the executive branch do so for us. This is my major point.

I am not saying that all of these programs are beyond reproach, I think some of them could be improved, but I think it is our right to do so.

Senator CLARK. I agree with you entirely. I guess what I am really asking is whether at this time you have any broad suggestions in terms of how these programs could be improved on REAP, or REA, or the disaster loan program. Would you be prepared at this time to make any broad statements on how we could change those programs to make them more effective?

Mr. GINN. Not specifically in my particular district, Senator. I think these programs are working and have worked well. I think the question is as to whether or not they should continue to be funded at the same level. Some of the programs, I think, are adequately funded at the moment; others, I believe perhaps could stand some reduction in the funding. But they are all good programs, they are all working, and my point is, sir, that I would like to see them continue until we can have a time to take a hard look at them and see if they can be improved. Thank you.

Senator TALMADGE. Thank you, Congressman Ginn. It is a pleasure to have you with us.

Senator Curtis.

Senator CURTIS. Mr. Chairman, today I have several conflicts, and I will not be able to be here for all of this testimony. I shall pursue it, however. I may not be able to be here when Mr. Thomas C. Kennedy of Newman Grove, Nebr., testifies. I would like to make about a 1-minute statement and have it appear just prior to his testimony.

Senator TALMADGE. Without objection, so ordered.

Senator CURTIS. Thank you. I may be able to get back, but it looks doubtful.

Senator TALMADGE. Thank you.

The next witness is Mr. Charles L. Frazier, director of the Washington staff of the National Farmers Organization. He is accompanied by Mr. Sam Clary from Jesup, Ga., a valued constituent and friend of mine.

STATEMENT OF CHARLES L. FRAZIER, DIRECTOR, WASHINGTON STAFF, NATIONAL FARMERS ORGANIZATION

Mr. FRAZIER. Thank you, Mr. Chairman.

My statement is rather short. With your approval, I would like to run through it briefly, and then call on Mr. Clary to offer some comments on the effects of these programs at the local level.

Senator TALMADGE. That would be fine. I know Mr. Sam is from a farm and will speak farm language. That is the kind of witness we enjoy having.

Mr. FRAZIER. That is right.

The National Farmers Organization appreciates this opportunity to review briefly the recent actions of the executive branch terminating or restricting the action programs in USDA that bear directly on the economic welfare of rural people. You are to be complimented for taking the initiative in an objective examination of the consequences of these actions.

Our national board of directors recently reviewed these announcements. A list of 18 decisions, cancellations or changes prepared by our staff is attached for your convenience. Following that review our concern was conveyed to the President and to the Secretary of Agriculture. They were specifically urged to reverse several of their decisions.

Unfortunately it now appears that the initiative for decisions on such programs as the rural environmental assistance program, REA loan funds, FHA emergency loans, a wholesale dumping of CCC grain stocks, the termination of assistance on low-cost housing, and the cutoff of funds for sewer/water developments in rural areas are actually being made by members of the executive branch that were not granted this authority by the Congress. In effect, we have a reorganization of Government along the lines proposed by the President in 1971 in defiance of the Congress who refused to authorize such a plan.

After the conclusions and recommendations of the USDA Young Executives Committee, chaired by the Under Secretary of Agriculture, became public knowledge in June of 1972, the Department vehemently denied that the report had any official status. Anyone who accepted at face value the numerous USDA statements insisting that the report did not represent official policy naturally expected that substantial changes in programs would be made in consultation with the Congress.

Now we discover that one of two courses must have been followed. Either executive branch personnel were preparing to abolish or reduce action programs even as they denied such a course of action or they had a remarkable change of heart between election day and Christmas. We support the concept of a joint resolution restricting the authority of the Executive to terminate programs and impound funds without the concurrence of the Congress. And although few of us may pretend to be authorities on constitutional law, we certainly want this major question of authority resolved. Otherwise, we will never again be able to rely on our traditional faith in the action of Congress to authorize and fund important domestic programs. However, resolution of that issue may take many months.

In the meantime, we urge that action be taken on S. 459 to reinstate the REAP program-and that similar actions be taken with respect to other vital programs in those instances where the intent of Ĉongress is being ignored or defied.

We are not unmindful of the urgency involved in combating inflation. Certainly, it is worthwhile to undertake to keep Government expenditures within reasonable bounds. However, our attitude may besummarized in this manner-any conclusive review of our national priorities and any resulting decisions to eliminate or reduce programs that are of importance to the people of this country must be the responsibility of the Congress.

Our concern is best demonstrated by pointing out that the recent economy announcements relating to agricultural programs were all couched in terms referring to the current increase in net farm income. At least $1 billion of the $3 billion increase in net income in 1972, so often mentioned by the Secretary of Agriculture, resulted from an increase in program expenditures in that calendar year. Current announcements for 1973 reduce program commitments by about $1 billion and USDA economists anticipate that net income will drop substantially this year.

Our growers are currently being encouraged to produce what may be a record crop of grains in 1973. What will happen to farm income and the rural communities of this country if we continue to withdraw programs contributing to a healthy, agricultural economy and then fail to sell additional large quantities of agricultural commodities abroad, comparable to the disposal sale to the Russians in 1972?

The American farmer will again suffer the consequences of responding to the policy guidance of this Government, accumulate surplus. stock for the benefit of the consuming public and he will be left with the consolation that he has enjoyed greater freedom to plant and more debts. He should not be asked to produce without adequate assurance that those who benefit from increased production will share in the risk involved.

Although we are not here today to talk about renewal of farm legislation, I suggest that the stage is being set for the decisions that must be made in that regard. The place to start is to reinstate the rural environmental assistance program, the necessary low-cost funds forthe REA cooperatives and a responsive FHA loan program. Then it will be in order to talk about a farm program. The Congress also can then proceed with reexamination of priorities in an orderely manner. Appropriations can be made properly to control levels of program activity that are in the best interests of all our people.

In the meantime, we have great confidence in this committee, Mr. Chairman, and we offer our assistance and support.

(The attachment to Mr. Frazier's statement is as follows:)

SLEDGE HAMMER BLOWS AT FARMERS; A LIST OF FARM PROGRAM ACTIONS Bombs have been falling on U.S. farm programs so fast since Christmas, the NFO REPORTER compiled the following list of program cancellations and changes recently. It's dated because the last item was a "Friday Special" which' came out just before press time and more may follow before this issue reaches our readers' mail boxes.

1. Reduces cotton allotment 1 million acres to drop total payments $100 million while eliminating control on total cotton acres planted.

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2. Opened up feed program acreage to reduce government payments $800 million but relax controls.

3. Increased tobacco acreage allotment 10% and eliminated tobacco export subsidy.

4. Dropped REA 2% loan program, funded at $545 million this fiscal year, in favor of making 5% Rural Development loans to REA.'s

5. Terminated the REAP (agricultural conservation practices) payments program for which Congress authorized $225 million.

6. Termiated FHA 1% Emergency (disaster) Loan program.

7. Terminated the Water Bank, funded at $10 million this year.

8. Opened up wheat acreage; no Set Aside required to qualify for payments; feed grains, soybeans can be planted on Set Aside under winter wheat program.

9. Terminated rural low cost housing subsidies.

10. Revised severely Farm Storage loan program.

11. Is dumping CCC feed grain holdings into market to depress prices.

12. Has announced sale of government bin storage capacity during 1973-74.

13. Opened Set-Aside acreage to livestock grazing.

14. Transferred final control of farm economic decisions out of the hands of the Department of Agriculture.

15. Is dismantling the Department of Agriculture through the President's new "Super Cabinet" arrangement.

16. Removed beef, mutton and lamb import quotas.

17. Raised non-fat dry milk import quota 750% to let in an extra 25 million lbs. by Feb. 15.

18. Raised interest on commodity price support loans from 32% to 5%.

(Compiled 1/14/73, NFO, Corning, Iowa)

Mr. FRAZIER. And may I add, I would like to compliment you on the statement you made in opening this hearing yesterday. We were very much impressed. We are pleased with your attitude.

Senator TALMADGE. Thank you.

Mr. Clary.

STATEMENT OF S. M. CLARY, MEMBER, BOARD OF DIRECTORS, NATIONAL FARMERS ORGANIZATION, JESUP, GA.

Mr. CLARY. Mr. Chairman, the farmers down in our area are quite aware of the Young Executives' report that received mention, and quite disturbed about it, to start with, and since they have seen the cuts that the executive branch has brought forth in this farm program, they are really disturbed about it.

I would like to speak as to what it means to us as farmers and start with our REA co-ops. I have talked with our people and the 2-percent loan is very important to them. In my own local area REA, we are 80percent funded by 2-percent money and you are aware, I am sure, that the balance of the formula funds they use come at higher rates.

They also tell us that 88, approximately 10 percent of the 1,000 REA co-ops, are totally dependent on the 2-percent loan and they tell me that they will not be able to survive without it, or something similar to it.

The 5 percent seems to be a disaster to them, and they say it is. Locally, in my home county, loss of the REAP program, is going to cost the local farmers $35 to $40 thousand and possibly even more. as was stated earlier, 78 percent of our local economy is based on nonfarm income-this is a real burden for the local farmers in one small county to bear. The feed grain program change alone in my home county will cost our local farmers approximately $100,000.

In looking to the pollution abatement control for ecology purposes last year was the first year of the program. We started off in my home