instance, as I recall, the Congress put in a limitation that you had to counsel with the local officials as to placements. Under 235 and 236, where you have interest subsidy for single houses-but for multiple houses you do not-yet you have the authority to do this under the act. I can understand limitations might have to be placed for civil rights protection, but would this be the type of thing where you would go back to the local officials and you would anticipate a change in the approach of your Department?

Secretary ROMNEY. No, sir. As far as the housing programs are concerned, there is no change of the type you describe. The President is not proposing under his revenue-sharing proposals, either the general or the special revenue-sharing proposals, to make any changes in the housing program.

Now, we have as a Department recommended to the Congress a consolidation, a simplification of the programs. But that does not affect this question of the relationship between the Federal, State, and local officials with respect to housing.

Now, Senator, there is one of the housing subsidy programs that we have where such consultation is called for by statute and that is the rent supplement.

Senator BENTSEN. That is 221 as required under the appropriations. Secretary ROMNEY. I don't know what it is. It is in an appropriation but I don't know whether it is 221. There are 50 of these, as a matter of fact, of housing subsidy programs, and I would like to get them reduced and simplified.

Senator BENTSEN. Can you tell me the justification why in the one instance you would have to go to the local officials and in the other you would not?

Secretary ROMNEY. No, I can't see any justification for doing one and not the other.

As a matter of fact, Senator, what I really think we ought to have in the housing picture is a requirement that in the metropolitan areas there be an areawide program to meet the housing needs rather than this present situation where you have to deal with it on the basis of every little general purpose government that exists in the metropolitan area. This is one thing I would very much like to see. Senator BENTSEN. Thank you, Mr. Secretary. Thank you, Mr. Chairman.

Chairman PROXMIRE. Senator Sparkman.

Senator SPARKMAN. Mr. Secretary, although I got in a good part of your testimony, I missed part of it, but I shall read it later.

I want to ask you a few things with reference to the budget request for this year, that is for fiscal 1972. I am looking at a table that comes out of it, a "Review of the President's 1972 Budget in the Light of Urban Needs and National Priorities by the United States League of Mayors and the National League of Cities," and I note that in the community development area the appropriation for fiscal 1971 for all of those items, urban renewals, model cities, water and sewer grants, rehabilitation loans, community development grants, there is a total of $2,160 million.

I note the budget request, according to this, for fiscal 1972 on these same items comes to exactly, comes to $1,640 million. In other words, it is $520 million less than the appropriation that was made in fiscal 1971.

I don't understand this dropoff. I realize there is involved the new proposed community_development grant involved in the proposed revenue-sharing. But I wonder if you could comment on that?

Secretary ROMNEY. Yes, I am glad you asked the question because, as you know, and other Members of Congress know, you really have to take a look at not just appropriations but also program levels that are authorized and funded and also outlays to see really what the level of activity is going to be for the coming fiscal year.

Now, the figures you have cited are correct as far as appropriations are concerned. But if you take the program levels that we will undertake, as the result of funding and authorization to undertake-this year, our program level for the overall community development program is $1,604 million, whereas next year it will be $2,020 million, in other words $416 million more than in the current fiscal year. So in terms of the actual program level there will be a 20-percent increase. If you take outlays, and that is what we are going to actually make available to the cities, the money that they will get, the outlays for 1971 will be $1,649 million, for 1972 they will be $2,106 million, in other words about a $550-million increase over the current fiscal year.

So in putting the budget together it was obviously recognized that on the basis of previous actions of Congress both the program level and the outlay level were such that we wouldn't have to ask for a greater appropriation level in order to sustain both a program and payment level well in excess of the current fiscal year.

Senator SPARKMAN. Are you in effect saying that there is actually no decrease in the activity?

Secretary ROMNEY. That is correct.

Senator SPARKMAN. In community development?

Secretary ROMNEY. That is correct. I am saying the activity will be up and that the activity will be up between 20 and 25 percent. In actual payments made in the money that the cities will receive they will get 25 percent more money in the 1972 fiscal year than they will get in the 1971 fiscal year.

And, furthermore, Senator, on the basis of the proposals that are made, the special revenue-sharing proposal that the President has made, as this is applied if enacted, which I hope it will be inacted, as of January 1, 1972, it will be possible to make that billion dollars of money available to the cities much faster through the new special revenue-sharing program than it would be possible to make it available through our present categorical assistance programs because the bulk of that money under the proposals that will be submitted to Congress will flow automatically and you won't have a 15-month delay between the availability of the money and the receipt of it by the city. So obviously there is going to be a much greater increase as a result of the adoption of the special revenue-sharing program than I projected. Senator SPARKMAN. I wonder if, in connection with your statement there, and it is a very interesting statement, you could have prepared

something spelling out a little more in detail and put that in the record as a part of your answer?

Secretary ROMNEY. Yes, sir.

(The following information was subsequently supplied for the record:)

The table below shows program levels, appropriations, and outlays for Community Development Programs for fiscal years 1970, 1971, and 1972.

Since the date of the Secretary's remarks before the Joint Committee, there has been a reprogramming of requirements for Model Cities obligations. This resulted from the further development of policies subsequent to the publication of the 1972 Budget concerning the period of changeover from the categorical grant approach to special revenue sharing. The table below on Community Development Programs program levels, therefore, reflects the revised amounts for the Model Cities program.

Senator SPARKMAN. My time is up but I would be glad also if you could explain this, and that is, I am referring particularly to the 235 and 236 programs, there is authorized for 1972, $225 million in each one of the programs but no, I believe you are asking for that full

amount.

Secretary ROMNEY. No. In 1971, you have authorized $25 million more for each of those two programs than we have thus far requested, and you have authorized $75 million in the case of public housing that we have not yet requested. Now, I don't know whether we are going to request those amounts or not. The reason I don't is this: After all we have more than doubled housing production with almost the same number of people in our organization that we had when we were at a much lower level. Obviously we have problems that have arisen as a result of factors that are new and new programs, social problems as well as other problems. We don't think it is just a question of getting the volume of housing but it is also a question of making certain that these programs are properly administered.

So just what we will do in terms of asking for supplemental funds remains to be seen. Actually that authorization wasn't available until December 31, because our appropriation bill wasn't signed.

Senator SPARKMAN. Thank you very much.

Secretary ROMNEY. Let me just add one other thing because I know, Mr. Chairman, the committee is deeply concerned about meeting housing needs and meeting it on a sound basis. I think the Congress ought to begin to take a look at what the impact of the currently authorized subsidized program is going to be once we get to the point where we have 6 million subsidized units.

Now, when we get to the point where we have 6 million subsidized units in 1978 the budget is going to have to carry $6 billion to pay for that subsidization, $6 billion. It has been a pretty easy thing to get this built up but we are going to have to pay for the subsidization. I think it is time the Congress is going to have to ask itself about putting that money in and whether there will be further money for subsidization. In other words, how much more are you going to put in for housing subsidy. I think these are some of the questions we need to begin to address ourselves to and we are going to have to begin to outline some of these considerations in our goals reports because I really think we are at a point where we need to begin to decide whether we meet this housing need primarily through further subsidization and federalization of the housing industry or whether we meet it by confronting this cost situation which is completely out of hand.

I just want to add one other thing, in conclusion. I have been in the automobile business long enough to see America's superiority in automobile production disappear in terms of costs. If you want a good example of what is happening to this economy of ours take a look at the new cars introduced this year by the "Big Three," by the two "Big Three" companies. One is the Pinto, built with imported parts from Germany and England, except for the sheetmetal. The guts of the car, the engine, the transmission, the differential, the driveshaft, axels, the things that cost money in the car, those things are all imported.

Now, the Vega produced by General Motors with the latest technology, a much more automated plant than other plants, is also on the market, and there is a $200 price difference between the Pinto and the Vega, and the imports are increasing.

Now I was Governor of a State that saw its economic base eroded as a result of not facing economic realities. And my concern as an American is that the Nation is failing to face its economic realities, and, as a result, the economic base of this Nation is eroding.

We have a steel industry that is dependent upon voluntary quotas by Japan and Europe. You can produce aluminum a lot cheaper outside the United States than you can in the United States, and to build a plant in the United States costs two or three times as much as what it costs to produce, build it somplace else.

Chairman PROXMIRE. Well, that was a very interesting statement and excellent response. Unfortunately, I am sure all us would like to ask you additional questions, I would like to question you on title V of the Emergency Home Finance Act.

Secretary ROMNEY. You mean 243?

Chairman PROXMIRE. Also I think I can argue with you on the wagecost argument, the myth that wages are going up more rapidly in other countries than they are here, but that is something we can get. into at a later time.

We want to thank you very, very much, Secretary Romney. You have done an outstanding job, as you always do.

Secretary ROMNEY. Thank you, sir.

Chairman PROXMIRE. Our witness who has been most patient is the distinguished Secretary of Commerce and, I might say, Mr. Romney, we are going to, we would ask you to respond to questions that we would submit for the record if you would when you correct your remarks.

Secretary ROMNEY. Yes, sir.

(The following information was subsequently supplied for the record :)

Hon. GEORGE ROMNEY,

Secretary of Housing and Urban Development,
Washington, D.C.

MARCH 1, 1971.

DEAR MR. SECRETARY: The following question was submitted by one of the members of the Committee for transmittal to you with the request that you respond for the official record. The question is as follows:

"During your testimony before this Committee, you made reference to 'FHA wage data.' Could you please supply a brief description of this data, including the method of collection and the extent of coverage?

"Please supply also whatever information you have available on the following questions:

"What percentage of construction workers are unionized?

"What is the average hourly wage for all construction workers? The average annual income?

"What is the average hourly union wage? Non-union wage?"

Sincerely,

JOHN R. STARK, Executive Director.

RESPONSE OF HON. GEORGE ROMNEY TO ABOVE LETTER, DATED MARCH 1, 1971 Question 1. During your testimony before this Committee, you made reference to "FHA wage data". Could you please supply a brief description of this data, including the method of collection and the extent of coverage?

Answer. The "FHA wage data as referred to in the testimcny consisted of surveyed hourly wage rates for residential construction. The rates are obtained personally by FHA Personnel, from builders and contractors in the area where an FHA or Public Housing Project is to be built. This information is then forwarded to the Department of Labor for their use in establishing a prevailing wage determination typical of residential construction.