August 12, 1966
Page 19235
COLLEGE HOUSING ASSISTANCE
Mr. SIMPSON. Will the Senator explain something on his chart? There are a number of institutions left blank, which, I take it, have made no application.
Mr. JAVITS. I wish to explain to the Senator that they made no application as of January 31, 1966. When the boom was lowered on applications they did not take any. The agency tells me that if they had continued to take applications from January 31, 1966, they would be up to about 800 million now and the demand is about a million. I have this in writing, and I had it printed in the RECORD yesterday. The reason they have this amount is because this is when they stopped.
Mr. SIMPSON. Mr. President, will the Senator yield further?
The PRESIDING OFFICER (Mr. BYRD of Virginia in the chair). Does the Senator yield?
Mr. JAVITS. I yield to the Senator from Wyoming.
Mr. SIMPSON. The Senator made an eloquent appeal. I agree with him. I wonder if in some instances it can be because State laws prohibit the institutions from making applications?
Mr. JAVITS. That is true, but they have applications from 35 States.
Mr. SIMPSON. It covered public and private institutions?
Mr. JAVITS. In 26 instances they covered both public and private institutions.
Mr. SIMPSON. The ones with the historic position on public institutions.
Mr. JAVITS. The Senator is correct
Mr. SIMPSON. I thank the Senator.
Mr. JAVITS. Mr. President, I yield the floor.
Mr. MUSKIE. Mr. President, it seems to me that what we have here is a question of priorities, and second, the extent to which we should exercise restraint in our public spending in this period in our Nation's life, under the circumstances in which we find ourselves.
Certainly, I am not going to stand here and argue against the merits of the college housing program. I worked for the college housing program. When I was the Governor of my State I worked for the college housing program. I supported every college housing program that I had an opportunity to vote on in the Senate, as a member of the committee and as a Senator. I supported increases in college housing against the opposition of some Senators who voted against such increases.
The only issue before the committee and the Senate is not the merits of the college housing program, which has been proven beyond doubt, but whether or not we should lift the ceiling on present authorizations.
The current program of authorizations was established in the Housing and Urban Development Act of 1965. It is as recent as that. That legislation established a 4-year program at $300 million a year. We are in the second year of that 4-year program. There is available this year, and fiscal year 1968, and fiscal year 1969, another $300 million under that program.
It might be said that we did not authorize $600 million a year at that time. We did not because we had to set a limit somewhere, and in the context of the total housing bill of that year this seemed a reasonable figure.
Mr. JAVITS. Mr. President, will the Senator yield for a question of fact?
Mr. MUSKIE. I yield.
Mr. JAVITS. We should agree as to what the fiscal situation is in fiscal 1967. The Senator said $300 million was available in fiscal 1967. 1 would like to question the Senator on that point. My understanding is to the contrary. I wish to review the matter with the Senator.
Mr. MUSKIE. I wish to say at this point that I have just had a member of the staff check with the agency on that question to make sure we had the facts. I am assured through him that $300 million is programmed for this year.
Mr. JAVITS. Programmed, authorized, and available, are all different words. Perhaps we can agree on the facts.
As I understand the facts, they are that there was an authorization up to the time the Participation Sales Act was passed of $300 million for fiscal year 1967, but that in the Participation Sales Act and we have it here, and that is what it says -- the 1967 authorization was canceled. It was canceled for a good reason. It was canceled because they believed that they would sell participations and raise the $300 million, and perhaps more. The fact is they are not selling. They do not propose to sell them because the gap in interest is too great for the Government to absorb. For practical purposes, there is no money.
I am not arguing that they might not get it or that they might get it. For practical purposes, there is no money for college housing. That is the legal basis on which it is presented to the Senate. If we are wrong about the facts, we should know it.
I agree with the Senator that this is a question of priority and that that is the issue before the Senate.
I am only submitting from the Committee on Education this morning that the priority question deserves as much attention as the urban renewal program or seasonal housing program, or a number of other things. That is all. I do not think that we should differ on the facts.
Mr. MUSKIE. I say to the Senator only that the committee acted on the basis of its understanding that $300 million will be put into this program.
If the words are vague and not reassuring, we understood that $300 million was to be put in the program this year. I will be happy to check back with the agency in the light of the presentation which has just been made by the Senator, because I agree that we should clarify this point and know the basis of fact on which we are acting. I am not interested in confusing the RECORD.
Mr. JAVITS. No, I am sure the Senator is not. The Senator from Maine (Mr. MUSKIE] is one of the most reliable Members of this body and the last man who would want to confuse anybody.
However, I wish to suggest that the facts are not too clear. I understood that they had $300 million for the fiscal year 1966. That was the first year of the program. They borrowed that money from the Treasury at the 3-percent rate and loaned it out.
Now there comes 1967 when, because we had passed the Participation Sales Act of 1966, the authorization was canceled out with the full expectation that the paper would be sold and the money would go into the program. Now, things happen and that is not so.
Does the Senator want to let them go back to the basis that they did before, to the Treasury, where they are sure of getting the money, but for a higher rate of interest?
Mr. PASTORE. Mr. President, will the Senator yield?
Mr. JAVITS. I yield.
Mr. PASTORE. Does the amendment make that proviso, that in the event the Participation Sales Act does take effect and the paper can be sold, that would vitiate this new authorization?
Mr. JAVITS. I will be happy to do that.
The Senator is very astute. But I wish to make a point. I am representing to the Senate that the only thing that this vote will show is that we want $300 million in this program for 1967. When they work it out in conference there may be other ways in which they can work this out in detail. The only thing that the Senate would be doing is declaring itself on the principle of considering the priorities. The Senator is right. They want $300 million in the college housing program.
Then, I felt the conference would be seized of the program and do what the Senator suggests or something else. I do not have the intimate details. But this is not an "and/or" amendment. It is simply a matter of declaring the purpose.
Mr. PASTORE. I understand the Senator is not trying to raise the authorization to $600 million; all that the Senator is doing is insuring $300 million for 1967.
Mr. JAVITS. Otherwise, they are not going to get anything because the Federal Government does not want to appropriate it in 1972.
Mr. RIBICOFF. Mr. President, will the Senator yield?
Mr. JAVITS. I yield.
Mr. RIBICOFF. What proportion of this would go to public institutions and how much to private institutions?
Mr. JAVITS. I gather most is for private institutions. In a good many of the States public institutions are not included, but they are fully qualified to participate except where they are inhibited by State law. I gather that there are a few State laws which have provisions that might inhibit their participation.
Mr. RIBICOFF. I was wondering. I introduced a bill which would provide for tax exemptions in the matter of college education.
One of the great problems we have today is that many colleges would like to sell bonds for their building construction without government assistance, but find that competitively it is too restrictive. Since we are talking about raising Federal capital, if we allowed a tax exemption on college institution financing, we might be in a good position to have the private sector and private investors buying college bonds in order to allow the college to build its own institution instead of appropriating Federal funds. I wonder whether the Senator from New York would consider this as something worth while?
Mr. JAVITS. Let me say to the Senator from Connecticut that it would not have any effect, pro or con, on the amendment, because we have to take the situation as we find it. The Senator is a member of the Finance Committee and he knows the problems with the Treasury Department on the question of exemptions.
State institutions are now capable of raising money through their States. That was done in California recently on a tax-exempt basis. I am certainly sympathetic to the idea which the Senator mentions, because I think that institutions of higher learning qualify for this kind of national consideration, but I am sure the Senator will agree with me that even if we could do that, and it was the prevailing sentiment, it is unlikely to come along in time to help us with the present situation.
Mr. RIBICOFF. My feeling is that maybe we should still consider the advisability of using the tax exemption. Since colleges have such significance in our overall program, and since we are appropriating so much money for college housing and college buildings, we might use tax exemptions in order to accomplish the same result.
Mr. JAVITS. I thank the Senator very much for his intercession.
Mr. President, No. 1, the issue is priority. No. 2, 1 have no desire to put the committee on an "and/or" spot, because we have a record vote coming up. I understand clearly. I hope that every Member will understand that we are certainly relying upon them as to the means by which to attain it.
Mr. COOPER. Mr. President, will the Senator from New York yield?
Mr. JAVITS. I yield.
Mr. COOPER. In the event the $300 million is not approved, either by this amendment or, finally, in conference by other means, does the Senator have any estimate of the number of students in colleges that might not be able to find housing because a proper donor could not be found?
Mr. JAVITS. I would not consider my estimate to be reliable except to point out, from the information I have been able to obtain, that a material number of college students stand the likelihood of being denied admittance to college beginning in September 1967, because there will be no dormitory housing available for them. I think the experience of individual Members indicates that this is the case on many college campuses. I think it would be fair to say that this would involve many thousands of students as soon as the bulge starts, which will be in September 1967, because we are moving up at the rate of about a half a million students a year.
Mr. COOPER. That is the point I wanted to develop. I think we are all acquainted with this tremendous increase in the number of college students. If there should be a delay of 2 years or more in beginning to build housing, not only for the present but also for the future, it would have rather tragic consequences.
Mr. JAVITS. It certainly would. We must all remember, as the Senator from Texas [Mr. TOWER] has stated, that in spite of the approval, it still takes time to raise money, to raise endowment money for maintenance use which most colleges need to actually engage in this building to about that figure of less than a 2-year lag. Thus, it is by no means premature for the Senate to act on this matter now.
Mr. MORSE. Mr. President, will the Senator from New York yield?
Mr. JAVITS. I yield.
Mr. MORSE. I want to emphasize the point which the Senator from Kentucky [Mr. COOPER] just made concerning the shortage of dormitory space which will face all college students in September of 1967. Let me point out that if there is any further delay in providing adequate dormitory space, there are not many students who are going to be able to go to college even this fall, because the colleges cannot operate without dormitory space. We cannot do anything about it, but we can do something about what the Senator from New York is trying to do by helping out this afternoon with his amendment.
I came in after debate started and I think I understand the situation but I want to make certain that I do. The objective of the amendment I heartily support. I say to the Senate that without the assistance of the Senator from New York as the leader of the minority on my Subcommittee on Education, along with the Senator from Vermont [Mr. PROUTY] and the Senator from Colorado [Mr. DOMINICK], we would not have advanced as far as we have in regard to providing facilities for colleges. My understanding is as the Senator from Rhode Island [Mr. PASTORE] brought out, that we are not asking for $600 million but for an amendment that would leave no doubt by way of assurance that the $300 million will be made available.
Mr. JAVITS. That certainly would be enhanced.
Mr. MORSE. That is the important point and I think the position is unanswerable.
Mr. JAVITS. I thank the Senator from Oregon.
Mr. TOWER. According to the testimony given by David W. Mullins, president of the University of Arkansas
Mr. JAVITS. On what page is that, Senator?
Mr. TOWER. On page 279.
He was speaking for most of the major organizations and institutions of higher learning. He said in part:
Last year's freshmen class was 17.7 percent greater than the year before, and the freshman class in the fall of 1964 17 percent greater than that of 1963.
Thus, we can project what it is going to be this fall, what it is going to be next fall, and the fall after that. This is a tremendous growth rate in our college population.
Mr. JAVITS. If I may say so, interestingly enough, that particular page which the Senator has just picked out covers the key facts and figures as to precisely what happened. It is interesting that Dr. Mullins also stated there, in part:
New loans this year are being held at the $300,000,000 level under authorization by the Congress for this amount of new Treasury borrowing.
But they did not get the money, hence we have the proposed legislation. This is the $300 million. It is all approvable -- what they call approvable -- the application in the Department. But, there is no money. All I want to do is to say that there is money. Whether we get it with the sale of participation certificates -- which I agree with the Government seems impractical -- or we have to go to the Treasury Department for it, at the higher interest rate, it has got to be done. I do not like it, either. The fact is it is something that will happen.
Mr. TOWER. Of course, participation certificates have not sold.
Mr. JAVITS. That is right.
Mr. LAUSCHE. Does the Senator's amendment cover the period of 3 years at $300 million a year?
Mr. JAVITS. It recurs on its authorization. But, I say, I want to get this off the ground. I want the Senate to express itself. We have made it crystal clear, through the conferees, what we intend, and they will do it.
Mr. LAUSCHE. Is it the Senator's position that unless we do something of the nature suggested by him, if the Government finds itself unable to finance this program through participation sales, there will not be the money available which has been expected?
Mr. JAVITS. Not even to honor the applications made after January 31, 1966, which are all here. Nothing has been done about it.
Mr. CARLSON. Is it not a fact that even if the Senate and Congress approves this money, and the money is available at the higher interest rate, the colleges themselves would determine whether they want to take advantage of it?
Mr. JAVITS. The Senator is exactly right.
Mr. LAUSCHE. There is this added factor, is there not, that it looks like the interest rate, if this program is carried out, will be larger in return to the Government than the one which has existed under the previous program?
Mr. JAVITS. I thoroughly agree. It was impractical previously.
Mr. LAUSCHE. I think that is sound.
Mr. JAVITS. I do not think we can do anything else.
Mr. TOWER. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. MUSKIE. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MUSKIE. Mr. President, after discussing this procedure with the distinguished Senator from New York [Mr. JAVITS], I am going to do something a little unusual. I hesitate to do it, but I know Members of the Senate are anxious to get away.
The Senator from New York and I became involved earlier in a question of fact as to the current status of the program and the authorizations under the program.
I have obtained from the Director of the Bureau of the Budget some figures which he is in the process of checking. I am willing to use the rough figures I have, subject to later correction, and I do not think they will be too far off. I shall state these rough figures as to the current status of the program so Senators will have them as a fact basis on which they will be asked to vote this afternoon.
It is a fact act that under the Participation Sales Act which we enacted earlier this year there was canceled an authorization of $350 million. That is a rough figure. But it was for the purpose of establishing a solid basis for the enactment of that legislation which some Members thought stimulated too much Federal spending.
The Bureau of the Budget said it had ample authorization to move ahead with the program at the programmed levels notwithstanding the cancellation of the 1967 authorization. With that cancellation, this is the situation which the Director of the Budget has given me, subject to later correction in the RECORD.
First of all, he said he planned to sell $800 million in participations in college housing loans in fiscal 1967. Those proceeds will be used, first, to support the $300 million for this year that was already programmed at levels which are authorized in the 1965 act.
Of the balance of the $500 million, $350 million has been canceled, leaving $150 million that is "free" in the words of the Budget Director.
In addition, there is an unused amount estimated to be available on June 30, 1967, of $250 million.
Mr. FULBRIGHT. Is that 1967 or 1966?
Mr. MUSKIE. Fiscal 1967.
These figures are shown on the table on page 118 of the hearings.
This would give the administration $400 million over and above the $300 million that is programmed for 1967.
That could be used for this program. So that there is ample authorization under existing law not only for the $300 million programmed but for an additional $450 million, if the administration wishes to use it.
The administration does not plan to use it for the same reason that it is asking the private sector to restrain itself in capital expenditures and to hold down spending across the board.
That is the situation. It is the situation I tried to point out earlier this afternoon in trying to explain the view of the committee. Each of us has to establish his own order of priority.
There are many other programs in the housing field in which each of us, in good conscience, on the merits, could wish to expand or leave as they are.
Next week, I will be asked to manage the demonstration cities program, designed to assist cities to deal with causes of unrest across the land, which are visible in the headlines of our daily newspapers.
The administration proposal for that program was $2.3 billion. The committee cut it down to $900 million for the reason that it felt it had to exercise restraint in the field of spending.
There are those who, in good conscience, and with conviction, feel that we have exercised restraint enough in our spending programs in schools and for other worthwhile causes.
So the committee, considering the actions it had taken with respect to other housing legislation which it considered the same day, and which will be before the Senate next week -- demonstration cities, mass transportation, and so many others -- in line with that policy of restraint, voted to hold the college housing program at the level established in the 1965 Housing Act. It is as simple as that.
As I said earlier, I shall not argue the merits of this program. There is nothing I should like better than to feel that I could vote freely, not only for another $300 million a year for college housing, but for as much as can be justified by the meritorious applications which may be received in response to that kind of a statute.
Several Senators addressed the Chair.
Mr. MUSKIE. I yield to the Senator from Rhode Island.
Mr. PASTORE. Is the Senator saying, implicitly and explicitly, that there is existing authorization which will make available $300 million for fiscal 1967 for college housing, and that the department, after the Senator has conferred with it, is going to make sure that that money will be available?
Mr. MUSKIE. That is the assurance I have been given by the Director of the Bureau of the Budget.
Mr. PASTORE. And that the amendment of the Senator from New York is unnecessary under the circumstances?
Mr. MUSKIE. The Senator from New York can answer that better than I.. As I understand his amendment, he wanted to double the present size of the program.
Mr. MORSE. No, he does not.
Mr. PASTORE. He did not say that.
Mr. MUSKIE. Let me get the amendment.
Mr. JAVITS. Mr. President, if the Senator will yield, I think I can make very clear what I have in mind. I am restoring--
Mr. MUSKIE. May I read the amendment?
In addition to the total authorization provided by paragraph 1, the Secretary may issue and have outstanding at any one time notes or other obligations for purchase by the Secretary of the Treasury in an amount not to exceed $300,000,000, which amount shall be increased by $300,000,000 on July 1 in each of the years 1967 and 1968.
That is the language which I took to mean it was the intent to double the present size of the program. If I am mistaken, I should like to have the Senator from New York correct me.
Mr. JAVITS. Mr. President, if I may address myself to the Senator from Maine, what I had in mind and made very clear was that the reason I had to do it this way was that the authorization was knocked out for 1967; therefore, as far as 1967 is concerned, I am trying to re-create a situation in which they can go to the Treasury for this $300 million. That is why the Senator from Rhode Island quite properly said to me, "I am with you if you want only $300 million, provided you get it out of the participations and the Treasury."
I said, "Great."
The priority thing I do not argue. We must decide that we want college housing, to go ahead and spend $300 million in loans this year. But the weakness in the Senator's argument is that what he is saying to us is, "Sure, we intend to sell the participations, I don't know when or how soon. All I know right now--"
Mr. MUSKIE. Mr. President, will the Senator yield?
I said in the fiscal year 1967, so I do know when.
Mr. JAVITS. I understand. But in the meantime, all of this is bogged down. If we agree to my amendment, it will be loosened, because they can go to the Treasury until such time as they do sell participations. For that reason, I was willing to adopt the suggestion of the Senator from Rhode Island [Mr. PASTORE] -- though the conferees can very easily do it -- and write in here the fact that $300 million shall be available beginning now, either out of Treasury money or out of the sale of the participations.
Mr. PASTORE. Will the Senator yield?
Mr. MUSKIE. I yield.
Mr. PASTORE. Rather than an amendment, then, why does not the Senator from New York put in language that can be taken to conference, so that there will be no misunderstanding, and so that we will not run up against the possibility that, in the construction of this amendment, it may in effect double the amount?
Mr. JAVITS. Well, Mr. President, as far as the other 2 years are concerned, that is, 1968 and 1969, it would double the authorization. That is why I said to the Senator from Maine that it is my design and my desire -- and I think as the author of the amendment I have the right to give it that construction -- that the Senate having expressed itself, the intent is very clear. They will work it out in detail as to exactly what is to be done. The Senate will have expressed itself that it wants money to move into this program beginning with the enactment of the bill.
Mr. TOWER. Mr. President, will the Senator yield?
Mr. MUSKIE. Mr. President, I have the floor. I am happy to yield to the Senator from Texas.
Mr. TOWER. Mr. President, it seems to me that the Senator from Rhode Island has made an eminently reasonable suggestion, that we make this amendment so that there will be no confusion about it.
Mr. JAVITS. I am happy to do that, either to leave it to the conference or I will write it in. It makes no difference to me at all.
Mr. FULBRIGHT. Mr. President, will the Senator yield for clarification?
Mr. MUSKIE. I have the floor. I yield to the Senator from Arkansas.
Mr. FULBRIGHT. As I understand it, the participation sales program, for practical purposes, has repealed the old authorization, and the President now has the authority to raise loan funds by selling participations in the loan portfolio. He has been reluctant to use this authority.
The important thing here is the interest rate. The Javits amendment raises an interest rate problem, therefore, I see no value in the Javits amendment, because the interest rate is too high. The interest rate under the existing program, if the President would use his authority, is 3 percent. He has the authority for, as the Senator has said, $850 million.
I do not see any sense at all in passing the Javits amendment. A statement, as the Senator from Rhode Island has said, expressing the Senate's desire that the President use the authority he has, might be all right. It would be just as effective as the Javits amendment, because the Javits amendment is not self-executing. It will only be a repetition of an authority the President already has. I ask the Senator from Maine, is that not correct?
Mr. TOWER. The President does have that authority, but the participations have not been sold.
Mr. FULBRIGHT. But the President just does not wish to sell them. He has the authority, and does not wish to exercise it. All the Javits amendment would do is give him another authority. He is not going to use that, either; and that proposed authority is not satisfactory to me, nor I think to most Senators, because it contemplates a 4% percent interest rate. That is not satisfactory, because we can borrow money for that rate easily. Colleges in every State can borrow, on tax-exempt borrowing, for somewhere in the neighborhood of that interest rate.
Several Senators addressed the Chair.
Mr. MUSKIE. Mr. President, I think I have the floor. I am perfectly happy to yield, but I want to be sure the yielding goes through me, so that I do not lose my right to the floor.
The PRESIDING OFFICER. The Senator from Maine has the floor.
Mr. FULBRIGHT. Will the Senator answer my question?
Mr. MUSKIE. Yes, the Senator is correct, as I understand.
Mr. FULBRIGHT Then why do we have the Javits amendment?
Mr. MUSKIE. That is the point I have been trying to make.
Mr. FULBRIGHT. Does the Senator agree there is no use in the Javits amendment?
Mr. MUSKIE. They have the authorization now.
Mr. FULBRIGHT. They have the authorization now, at a lower interest rate, and the Javits amendment will not make the President perform. Nobody can make him perform if he does not wish to; is that not correct?
Mr. MUSKIE. That is correct.
Mr. FULBRIGHT. On this or any other matter, I might say.
Mr. MUSKIE. The Senator knows that better than I..
Mr. FULBRIGHT. So I do not see any point in quibbling about the Javits amendment. It will not accomplish anything more, and never would, and it provides for an interest rate that is entirely unacceptable.
Mr. JAVITS. Mr. President, will the Senator yield to me?
Mr. MUSKIE. If I may first
Mr. JAVITS. There are, of course, two sides to any argument. The Senator from Arkansas has stated his position so forcefully I think it should be answered right away.
Mr. MUSKIE. First I would like to put into the RECORD–
The PRESIDING OFFICER. The Senator from Maine has the floor.
Mr. MUSKIE. First, I wish to put into the RECORD the exact figures, to correct the rough figures I put into the RECORD earlier, so that we will not be confused too long. The figures -- and I am sure they are correct -- are these: There is now $205 million of available funds unused. It is anticipated that there will be sold $801 million in participation sales in this fiscal year.
That will make available $1,006 million during this fiscal year. There is $300 million programed for this fiscal year; so there is authority, over and above what is programed and what will be committed during this fiscal year, in the amount of $706 million.
Mr. FULBRIGHT. At what interest rate?
Mr. MUSKIE. At the interest rate now carried in the law, which is 3 percent.
Mr. JAVITS. Will the Senator answer some questions?
Mr. MUSKIE. If I can.
Mr. JAVITS. Is a single dollar, of all the figures the Senator stated, available for lending on any of the applications which are now on file?
Mr. MUSKIE. I understand that $205 million is available and unused.
Mr. JAVITS. Where is that $205 million? What is the $205 million?
Mr. MUSKIE. This has been described to me by the Director of the Bureau of the Budget -- and I received these figures as the result of a telephone conversation, in the course of which I did not cross- examine to obtain every detail behind them -- I am not an expert in this field, but I am trying to give the Senator the facts as I have them.
When the Director of the Bureau of the Budget says to me -- and I assume he is not trying to use pussyfooting words -- that he has $205 million that can be applied to this program, I assume he means that money is available to meet the applications that have been made. If he is pussyfooting with me, and using weasel words that would make me subject to the question which the Senator from New York has raised, then I shall go back to him and give him a little difficulty.
Mr. JAVITS. All right.
Mr. MUSKIE. But, because I told him I wanted to use these figures on the Senate floor, and that I wanted to know what is available this year, and what I could tell my fellow Senators is available to meet these applications to which the Senator has referred, I understandand I repeat, I understand -- that I have the assurance of the Director of the Budget that these are firm figures. I understand there is $205 million now available -- not in 1967, 1968, 1969, or 1970, but now, this fiscal year.
In addition, he will sell $801 million of participation sales. That is a total of $1,006 million. Of that amount, $300 million will be used for this year under the program level authorized in 1965.
That leaves $706 million of authority that he does not intend to use for this year, but which could be made available. Those are the facts. Where the money is, in what bank account or who would have to sign the authorization, I do not know.
Mr. JAVITS. Mr. President, suppose I were to say to the Senator that those were not the facts, would he then give me a chance to say why?
Mr. MUSKIE. Mr. President, I say to the Senator that my staff assistant has asked me to qualify what I have said in this sense, that all of this $300 million is not available at this moment. But $205 million is now available and the balance will be made available later in the fiscal year.
Mr. JAVITS. If they sell the certificates, and if the Bureau of the Budget releases any of the $205 million which they have now. They have now released $50 million, and they have no intention of releasing the other part.
Mr. MUSKIE. Mr. President, I fully informed the Director of the Budget as to what the Senator has been saying on the floor, that the Senator is raising a doubt as to whether this money is going to be, in fact, made available and as to whether, in fact, these participation sales are going to be made.
The Director of the Budget has personally assured me that these participation sales will be made and that this $300 million will be made available.
If the Senator is correct in what he has just said, then the Director of the Budget has not told me the truth.
Mr. JAVITS. I do not think that is so at all. I think the Director of the Budget has told the Senator the truth. The Director of the Budget is under a duty to serve the United States on the sales of the participation certificates to the best of his ability.
The Director of the Bureau of the Budget expects to sell the certificates, and I would be the first to condemn him it he sold them improvidently. Whatever he said, the fact is that he cannot guarantee it, no matter what the Senator says or no matter what I say.
What he might do, if he chose -- but he does not choose to do so -- would be to release some of the $205 million which results from repayments on the college loans. He has only chosen to release $50 million. He will determine to sell the participation certificates when, as, and if he thinks it is in the best interest of the country to sell them. However, there is nothing inconsistent between that proposition and the amendment, because the amendment is intended to make the money available when the law takes place.
The institutions could go to the banks and get the money at a higher interest rate, and I make this statement advisedly, but in my judgment it would be worth more to the institutions if they could get the money at a slightly higher rate than to have the 3 percent provision on the books when they cannot get the money.
Many of these private institutions -- and most of them are private -- cannot borrow the money. The only people who can borrow the money are the States, and some of the States are in pretty bad financial trouble.
California has just borrowed money, incidentally, at a higher interest rate than is provided for in my amendment. They borrowed money at the rate of 4.85 percent. However, other States are holding back.
My amendment is designed to find a way to actually get money flowing without in any way crossing up the Budget Bureau on the sale of participation certificates. I seek to get things going until such time as the other activities can take up the slack.
That is why I said to the committee that, when they get into conference, they may write such provision as will carry out the intention of the Senate.
Mr. MUSKIE. Mr. President, I yield to the Senator from Arkansas.
Mr. FULBRIGHT. Mr. President, I do not see how the Senator feels that his amendment could be any more persuasive on the Treasury to make them borrow this money and make it available than would be the existing law. This is what is completely baffling to me.
They already have this authority. No one can make them do it if they do not want to do it. The Senator said the Bureau of the Budget does not intend to release that money. If they do not intend to do so, they will not release it because of the amendment. The amendment does not give them a thing that they do not already have. It would raise the interest rate to 4⅝ percent. This may be acceptable to some people, but certainly not to people in my State, and I do not think the amendment ought to be agreed to.
Mr. MUSKIE. Mr. President, I thank the Senator from Arkansas. I think the facts are already in the record, and I see no point in prolonging the matter from my point of view.
The PRESIDING OFFICER. The question is on agreeing to the amendment of the Senator from New York. On this question, the yeas and nays have been ordered, and the clerk will call the roll.
The legislative clerk called the roll.
The result was announced -- yeas 35, nays 31, as follows:
[ROLL CALL VOTE LISTING OMITTED]
So Mr. JAVITs' amendment was agreed to.
Mr. MORSE. Mr. President, I move to reconsider the vote by which the amendment was agreed to.
Mr. KUCHEL. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. ALLOTT. Mr. President, yesterday the Senator from Colorado raised a question in the debate on the housing bill concerning section 502. The Senator from Maine [Mr. MUSKIE] who was managing the bill on the floor, did not have an answer immediately at hand and the matter was continued until today to allow time for him to get answers. The colloquy may be found in yesterday's RECORD at page 19068.
Basically, the question which I raised was that Secretary Weaver had told the Committee on Appropriations, in our hearings on the independent offices appropriations bill, that leasing of existing structures was much cheaper, particularly where they needed a large number of bedrooms in a unit, than was new construction: therefore, I wondered why the Department of Housing and Urban Development was asking authority in section 502 of the pending bill to lease or acquire new housing.
Overnight I have reexamined the testimony given in our appropriations hearings. I find, on page 741 of those hearings, the following exchange:
Senator ELLENDER. Do you find that this program [leasing of existing structures], as you now are administering it, will be as cheap to the Government as the public housing program?
Secretary WEAVER. I think that it will be cheaper, especially in certain types of housing. For example, where we have large families, the cost of building a five- or six-bedroom unit is extremely high in new construction. The economies are much greater in this program, because many of these are larger dwelling units. Or you can combine them in such a way as to effect economies.
And, on page 744, Dr. Weaver says:
The biggest headache that they have is where to relocate the large family. We cannot afford, within any limitation of reasonable cost, to construct new housing with four, five, and six bedrooms. The only way that we have found that this could be done at all reasonably is through this leasing program. We cannot do it under rent supplement programs either, because there you have got new construction as well, principally, and your costs are so high. So that this is an immediate problem that they face. This is why they have been so enthusiastic about it.
I have also examined the testimony given to the Housing Subcommittee of the Senate Banking and Currency Committee, commencing at page 41 of the printed hearings, as was suggested by the Senator from Maine [Mr. MUSKIE].
From my comparison of the two hearings, it would appear to me that Secretary Weaver has simply come to a realization that private industry can build much more cheaply than can the Government, and that this explains the apparent inconsistency. He was, as I recalled it, telling us in the Appropriations Committee that leasing of existing structures was cheaper than new construction, but I believe now that he was limiting, in his own mind, the comparison to new construction by a public housing authority.
Would the Senator from Maine agree with my conclusion? I understand that the committee staff has asked the Department of Housing and Urban Development for a clarifying statement in regard to yesterday's colloquy, and I inquire of the Senator whether that statement is in harmony with my present understanding?
Mr. MUSKIE. Mr. President, the point that the senior Senator from Colorado made yesterday involves the new leasing authority that the Public Housing Authority was given in the 1965 Housing Act. It is complicated by the fact that there were two separate provisions in that act involving public housing leasing, one provision limited the leasing authority to 3-year leases of existing housing, the other had no time limitation, and it was unclear whether the leasing authority referred to new housing or existing housing. This year, the administration came back to the Congress to get a clarification of the 1965 law to make it clear that the leasing authority under the latter of the above provisions was applicable to new construction as well as to existing structures. That is the purpose of section 502 of the committee bill -- S.3711.
The question raised by Senator ALLOTT referred to testimony by Secretary Weaver during appropriation hearings where, as I understand it, the Secretary was justifying the use of public housing leasing. He said it was cheaper for the Government to lease units particularly for large families; that new construction of such large units is extremely high. He said, further, that the public housing authorities cannot afford to construct new housing with 4, 5, and 6 bedrooms; that the only way it could be done at all reasonably was through the leasing program.
I believe that is clear what he had in mind. New construction of public housing in the traditional way is very expensive, particularly for large units satisfactory for large families. The only way it can be done is through leasing, either of existing housing or of newly constructed housing.
I agree with the conclusion of the senior Senator from Colorado -- private industry can build cheaper than can the Government in most cases. Our committee always encourages private industry to the maximum. In fact that was the basis for our approval of the rent supplement program. If public housing authorities have now developed a new program whereby private industry can build the housing, and public authorities can lease it or buy it for public housing purposes and thereby save taxpayers money, let us praise them.
A few years ago everyone was condemning public housing because it had not come up with any new ideas. Now they have come forward with new ideas and I think we should shout their praises and hope that the authorities throughout the Nation make maximum use of these new ideas for housing the Nation's poor.
Mr. ALLOTT. Mr. President , the Senator agrees with my conclusion, then, that Secretary Weaver's statement to our Appropriations Committee should be interpreted to mean "new construction by public housing authorities," and in effect what he is saying is that private industry can build more cheaply than can the Government. His statements certainly are not crystal clear to me, and it is something I will want to pursue with the Secretary at our Appropriations Committee hearings on these programs, when the opportunity next presents itself.
I thank the Senator, and I want to add that I would certainly agree that wherever and whenever we can, we should allow private industry to do a job rather than having the Government get involved.
Mr. President, I wanted also to call attention to the cost figures of the leasing program. Yesterday I quoted the figure which had been given to us in appropriations bearings; namely, that $1,743,750 had been budgeted for the leasing program in fiscal year 1966. In reviewing the printed record of hearings, I find that the Department inserted some further figures. It appears, although again it is not absolutely clear, that the Department actually spent in fiscal year 1966 $3,122,475. This figure appears in a table at pages 739 and 740.
Further, on page 746 of those hearings, the Department inserted a table showing that they have budgeted for the current fiscal year the sum of $6,150,000. That is an astounding increase in this program, and today we are asked to broaden the authority of the Department even further. As I said before, I will certainly want to explore this matter with the Secretary at the earliest opportunity in appropriations hearings.
Mr. President, I yield the floor.