us to put greater emphasis on other mechanisms at the expense of research projects. Furthermore, the distribution of Institute funds is based on conscious decisions to maintain a balanced program of complementary research activities.

Question: To what "Payline" will you fund new and competing grants in fiscal 1981--and if you can estimate it--in FY 1982? What percentage of grants will you fund in both years?

Answer: In FY 1981 the NEI would fund approximately 53 percent of the new and competing grants eligible for award; the payline funded would be 220. We estimate that the payline funded in FY 1982 would be 210 and that the award rate would be approximately 47 percent.

WHERE TO CUT

Question: If faced with a major budget cutback, what are your priorities? Where could cuts be made without impairing essential research?

Answer: In making reductions from the budget submited to you in January we have attempted to develop a budget which maintains a viable research program for FY 1982 and strikes a balance among research grants, intramural activities and training. While these reductions will not impair essential research, further cuts may alter this balance as well as our research capability.

Question: How much can be saved through more efficient management, less official travel and fewer consultant contracts:

Answer: In 1981 cuts were made in travel, consultant services, procurement contracts, and personnel compensation because of the hiring freeze. Further reductions in consultant services were made in 1982. Additional cuts in these areas in FY 1982 could not be absorbed without affecting essential research activities.

NATIONAL INSTITUTE OF ENVIRONMENTAL HEALTH SCIENCES

STATEMENT OF DR. DAVID P. RALL, DIRECTOR

ACCOMPANIED BY:

DR. DONALD S. FREDRICKSON, DIRECTOR, NATIONAL INSTITUTES OF HEALTH

PAUL G. WAUGAMAN, EXECUTIVE OFFICER

ROBERT C. PATRICK, BUDGET OFFICER

NORMAN D. MANSFIELD, DIRECTOR, DIVISION OF FINANCIAL MAN AGEMENT, NATIONAL INSTITUTES OF HEALTH

ANTHONY L. ITTEILAG, ACTING DEPUTY ASSISTANT SECRETARY, BUDGET, DEPARTMENT OF HEALTH AND HUMAN SERVICES

PREPARED STATEMENT

Senator ANDREWS. Our next witness is Dr. David P. Rall, Director of the National Institute of Environmental Health Sciences. NIEHS was established in 1966 to deal with the growing seriousness and complexity of environmental health issues. The Institute is located in Research Triangle Park, N.C. You recall the suggestion of my colleague from Macon for 20 years to move some of this stuff a little further from Washington-the only Institute of NIH that is outside of the Washington area.

Dr. Rall, we welcome you to our hearings and ask that in the interest of time you briefly highlight your opening statement so that we may quickly move on to questions. And first, of course, I would like to have you introduce your associates and then proceed with your statement. Your complete statement will be placed in the record in full at this point.

[The statement follows:]

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STATEMENT OF DR. DAVID P. RALL

Mr. Chairman and Members of the Committee, it is a pleasure to be here today to discuss the role the National Institute of Environmental Health Sciences (NIEHS) and its research programs play in identifying and in resolving issues which affect the health of the American people.

Prior to the '60s, a few people understood the impact of environmental agents on human health. It was Rachel Carson's book, Silent Spring, published in 1962, that awakened us to the fact that many manmade chemicals are persistent in the environment. Because of their structure, they do not break down naturally in the water or air into harmless components. They accumulate in our tissues only to cause disease years after we are exposed.

We now know that even low-level exposure to some environmental agentssubstances in our air, water, food and drugs can cause cancer, heart and lung disease and birth defects. Some of these toxic agents have become so widespread that they touch us all. I would like to cite a few examples:

Both the Congressional Research Service and the House Government Operations Committee have recently documented repeated cases of contamination of our ground and surface water supplies by toxic chemicals. Many of our great rivers the Shenandoah, Susquehanna, Housatonic, Mobile, Tombigbee, and Hudson have been closed to fishing. The Great Lakes contain PCBs, Mirex, DDT, mercury and asbestos.

Increasingly, we are dependent on underground sources for water. Our use of this vital supply has increased by 170 percent between 1950 and 1975. And yet, well closings have been reported in New Jersey, Long Island (two million residents affected), Massachusetts (a third of the communities affected), and Michigan (268 sites identified as contaminated). In California, both the San Gabriel and the San Joaquin Valleys have lost vital water supplies to industrial chemicals.

Our food supplies have been repeatedly affected as well. In a wellknown 1973 incident in Michigan, cattle feed was contaminated by PBBS, a fire retardant chemical. As a result, virtually everyone in Michigan carries PBB residues in his or her body. And PCBs, used as transformer coolants, have caused major incidents in dozens of states including New York, Maine, Mississippi, and recently in Montana, where an accidental spill affected food supplies in 19 states.

The research conducted at and supported by the NIEHS is based upon the premise that by gaining new knowledge, prudent disease prevention strategies can be developed which will substantially reduce the burden of environmentally-induced diseases. NIEHS' goal is to identify toxic substances, learn their mode of action within the body, determine at what level they are toxic to humans, and make this information available to the public and other government agencies. The end product of this research is an enhanced quality of life for ourselves, our children, and our children's children.

I would like to touch on a few areas in which NIEHS has been particularly active recently.

Health problems associated with exposure to chemicals stored at hazardous waste sites such as the dramatic example of Love Canal may be the most important public health issue of the '80s. Some of the problems at these sites may arise from direct exposure to hazardous chemicals from waste dumps such as at the Love Canal which I discussed last year. A more serious consequence could be the effect of these chemicals percolating downward and contaminating our Nation's ground water sources. The House Government Operations Committee last year found that in 41 states hazardous waste sites are located within one mile of a major water supply.

Exposure to many chemicals are known to cause genetic changes in human cells. These changes can become manifest as cancer 20 to 40 years after exposure or as inherited traits, diseases or malformations, that may occur in the children or grandchildren of those exposed.

The need for better methods of assessing genetic effects of chemicals is a high priority at NIEHS. Scientists in the NIEHS intramural program are studying the mechanism whereby chemicals interact with the genetic composition of cells. Their goal is to devise a method to detect these changes before disease occurs. This would allow scientists to identify those at risk from exposure to certain chemicals and to devise techniques for preventing these diseases after exposure.

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The most effective public health program is prevention that controls human exposure to chemicals based on knowledge of potential adverse health effects. Since effects in humans may demonstrate a long latency period, 20 years or more for cancer, an effective predictive toxicology program must be based on information obtained from experimental models other than man.

Animal bioassays are currently the best surrogate for human studies. Given this, there is critical need to develop a reliable methodology that will allow us to extrapolate from the high dosage used to produce an effect in a very limited number of animals to the low dose normally experienced by humans in order to estimate risk to human health.

The NIEHS Biometry and Risk Assessment Program's basic research is aimed at developing risk assessment methodologies. Information in this form is needed by policy makers in developing prudent public health strategies and regulations effective for human populations.

Love Canal also poses the question of whether exposure to certain chemicals causes effects on the nervous system. Efforts to measure nerve conduction have been equivocal. Although behavioral changes are suspected, efforts to substantiate them so far have been complicated by numerous uncertainties.

Scientists in the NIEHS Laboratory of Behavioral and Neurological Toxicology have developed a battery of tests to assess subtle neurotoxicities using laboratory animals. These tests are now undergoing validation in comparative trials in other laboratories. Nine neurotoxins are under test in these trials.

As Love Canal occupied the headlines, another saga began unfolding, that of the possible adverse health effects on Vietnam veterans due to exposure to the herbicide Agent Orange. NIEHS has been conducting studies on the long-term health effects of Agent

Orange and other phenoxy herbicides and Dr. John A. Moore, Deputy Director of the National Toxicology Program (NTP), is chairing the Scientific Panel of the Interagency Work Group to Study the Possible Long-Term Health Effects of Phenoxy Herbicides and Their Contaminants.

Vietnam veterans are concerned about the risk of having children with birth defects even years after their exposure to Agent Orange. In order to assess adequately this effect, simulated Agent Orange was given to male laboratory animals. NIEHS scientists examined their sperm and their ability to fertilize untreated females and then examined their offspring to determine if there was any harmful effect.

This study was recently completed. It does not show any evidence of germ cell toxicity or adverse effects in the development or survival of offspring as a result of paternal exposure to simulated Agent Orange. That is good news for the veterans.

The veterans are also concerned about the increased risk of cancer from their exposure. According to a recent study by the National Toxicology Program and an earlier study conducted by the National Cancer Institute, the dioxin contaminant of Agent Orange is a potent carcinogen in rats. However, while these studies suggest an increased risk of cancer for humans, a quantitative risk of cancer to the veterans cannot be determined because it is difficult to make an exact prediction based upon the results in laboratory animals and because the exposure levels experienced in Vietnam are unknown.

Another area of concern is the emerging problem of indoor air quality. Two phenomena that are contributing to this increasing concern about air quality in the home and workplace are: first, the effort to tighten buildings in order to conserve fuel by reducing air exchanges; and second, the increasing use of products which emit chemicals.

One such problem chemical is formaldehyde. The United States produces seven billion pounds of this ubiquitous chemical each year. It is used in formaldehyde foam insulation and as adhesives used in wall board, kitchen cabinetry, some newer forms of furniture, and carpeting.

Formaldehyde is particularly irritating to the eyes, ears, nose and throat. Some people who have been exposed, particularly those living in the tight quarters of mobile homes, have found that it causes respiratory problems, nausea and dizziness which seem to increase with the duration of exposure.

Of even greater concern is the possibility that formaldehyde is carcinogenic. A recent study by the Chemical Industry Institute of Toxicology suggests that inhalation causes nasal tumors in mice and

rats.

Formaldehyde is currently being evaluated for mutagenic and teratogenic effects by the NTP.

Finally, I would like to say a word about the National Toxicology Program. I have touched somewhat on NTP efforts because many of the NIEHS efforts are integral to NTP.

Consider these facts: Since 1943, the production of synthetic organic chemicals has increased ten-fold, from 32 billion to 321