September 14, 1978
Page 29397
Mr. CHILES. Mr. President, I believe strongly that the Senate should pass this resolution instructing the conferees on the budget resolution to insist on not adding any additional spending authority to function 450. The Federal budget is already too large and the increases sought by the House of Representatives could cost $6 billion over the next 3 years. This would make it even more difficult to balance the budget by 1981 or 1982.
What is being proposed here is a classic example of how the Federal budget has gotten out of control by agencies being authorized to start new programs without a clear public understanding of the future costs. Last January, the President proposed spending $1 billion for so-called "soft public works" as part of his urban package. I opposed including money for this in the first budget resolution, because I believe it is a poorly designed program that duplicates existing programs run by other agencies. Events since last spring have made that spending even less attractive.
Most importantly, employment has improved more rapidly than economists were predicting and inflation has gotten worse. The President proposed that we cut $5 billion from the budget, but did not say where to do it. This new program had not generated much enthusiasm in the Senate, so the Senate Budget Committee agreed to cut out the entire $1 billion and the Senate passed the resolution as reported. There are two reasons why I think the Senate Budget Committee has made a wise decision to not provide funds for this new program.
The first is the simple economics of adding as much as $6 billion to the budget over the next 3 years. With construction booming and inflation on the rise, we do not need a program where 50 percent to 75 percent will go to currently employed persons. I believe the American people want to see us cut down on Federal spending, not increase it. Reducing inflation is the top public priority and that means cutting back on Federal spending.
The House Public Works Committee took the President's $1 billion proposal and added on a third round of the local public works funding which we provided at the depth of the recession. Their total package would be two-thirds regular public works and only one-third of the new "soft" or labor-intensive public works. We all saw the pressure before to have the Federal Government pick up the tab for local public works spending. There will not be any credibility for temporary deficit spending programs to aid employment in the future if we do not let the local public works program turn off on schedule as we see the economy improving.
There will still be about $2 billion in 1979 outlays occurring from the budget authority appropriated in 1977. If Congress drags the process on by putting out more budget authority for hard public works, it will come back to us as increased outlays of $2 or $3 billion a year by 1981 and 1982. It is just those years where we could reach a balanced budget if we exert a reasonable level of restraint on existing programs. The Senate has already gone on record for achieving a balanced budget by 1981. I am committed to balancing the budget at the earliest time it becomes economically feasible. Adding on $6 billion of new public works funding would seriously jeopardize our ability to reach that balance.
The second reason I oppose adding money to the budget for this program is that it would give the Department of Commerce money to do things we already authorize the Department of Labor to do in CETA. This would generate a whole new bureaucracy and a new constituency for continued Federal spending.
I said before that this is a classic example of how Federal spending has gotten out of control. When the urban package was put together, it was recognized that there were two particular areas where the current CETA program is deficient. First, there are limits on how much money can be spent for materials and equipment. Second, it has been difficult to involve private companies.
Rather than just suggesting minor modifications to CETA to meet these missions, the Department of Commerce decided it would like to get into the urban aid game, and have its own program to go along with the departments of HUD, Labor, and HEW.
The Senate has already taken care of most of the needed modifications to CETA by creating new methods of private sector involvement, and the Senate budget resolution includes money for that purpose. The tax cut bill will probably include a "targeted employment tax credit" which will provide almost $2 billion of subsidies for private companies to hire disadvantaged individuals. I think that is a more efficient way of achieving the objective of getting jobs for disadvantaged persons than a new grant program to local governments.
Mr. President, I think this is just the kind of situation that the congressional budget process was designed to prevent. In the past, we had new program authorizations brought to us one by one. Each one sounded pretty good by itself, and we had no way to see whether they duplicated existing programs or what they added up to. The intent of the budget act is to line up programs serving similar missions and decide which ones are most effective and how much we can afford.
There is a tendency to avoid the unpleasant reality that voting for new programs increases the Federal budget. Many Senators vote for an authorization and say "the appropriations committee will cut it down to size." You do not have to worry. This is just an authorizing bill.
The Appropriations Committee is then told that Congress passed the authorization and the budget resolution endorsed it, so they have to fund it. Only the budget resolution provides an opportunity to step in early in the process and say, "We cannot afford a new program."
The PRESIDING OFFICER. The Senator's time has expired.
Mr. CHILES. May I have 4 additional minutes?
Mr. MUSKIE. I yield 4 additional minutes to the Senator.
Mr. CHILES. Mr. President, I agree that providing jobs for economically disadvantaged persons is a top national priority, but I want to see it done most effectively. We are already providing over $11 billion in CETA, and I have been playing an active role in seeing that in future years most of this money gets targeted to the persons and areas who need it the most. CETA has an awful lot of problems, but we ought to either improve it or scrap it, but not start another similar program side by side in another department.
Another argument that has been made for this funding is that financially distressed cities need this money to renovate and maintain their public buildings. There are several reasons why I must reject that argument.
First, the action taken to date in the Public Works Committees on both Houses indicates that they are watering down the formulas to spread the goodies to as many cities as possible, rather than keep it targeted on the few places that are really hurting. Second, this seems like a clear case of the Federal Government stepping into what should be strictly local decisions on spending priorities. Maintenance of public buildings is a regular activity that most local governments do: Some need to do more, some do not. We have several major aid programs that would allow local governments to do this kind of activity without getting tied up in the red tape of Federal project grants. The budget resolution allows $5 billion for community development block grants, $6.9 billion for general revenue sharing, and $500 million to make a permanent replacement for the anti-recessionary fiscal assistance for these same distressed cities. That is exactly a general aid program to the same cities which would receive these categorical grants.
Mr. President, another perspective the congressional budget process gives us is an opportunity to add up the level of Federal aid to State and local Governments each year. The numbers are absolutely astounding. This budget resolution will provide over $82 billion of outlays in aid to State and local governments in 1979. That represents an increase of almost $6 billion, or 7.7 percent, over 1978. It is an increase of $14 billion, or 21 percent, since 1977. What is astounding is that while we pumped up this assistance in response to the recession, we have continued to increase it without phasing down more than a tiny piece of our temporary expenditures. The result is a total increase of $33 billion, or 66 percent, since the 1975 pre-recession level of $50 billion. Federal aid now accounts for 25 percent of State and local expenditures. While the people are demanding reduced budgets and smaller bureaucracy, Congress is raising taxes and pushing out more money to make up for people's unwillingness to pay more local taxes. Since inflation drives people up into higher Federal income tax brackets, Congress can achieve this by simply failing to cut taxes enough to offset inflation. That is just what the House budget conferees are proposing to do.
In conclusion, I urge my colleagues to vote for this resolution. It is not just a matter of dividing up numbers on a page between the House and Senate. It is a question of whether Congress can hold the line and resist the temptation to plunge ahead with another new spending program.
The PRESIDING OFFICER (Mr. BENTSEN). Who yields time?
Mr. MUSKIE. Mr. President, I yield 3 minutes to the Senator from Idaho, who was also a member of the conference.
Mr. McCLURE. I thank the Senator for yielding this time.
Mr. President, I wish to express my strong support for the position expressed by Senator MUSKIE and Senator BELLMON that the Senate insist upon its position and instruct its conferees to reject any additional budget authority at this time for a new program of local public works or labor intensive public works. The minority members of the Committee on Environment and Public Works, which has jurisdiction over these programs, believe unanimously that such a program should not be permitted under the budget resolution.
There are two basic reasons why such a program is not wise even at a level of $1 billion. First, the program would be clearly inflationary, and therefore not in the public interest.
Second, and as important, over $3 billion of past local public works appropriations have not yet been spent. Approximately $2 billion of this authority is scheduled to be spent in fiscal 1979.
Additional funding, sought by the House, is not in the public interest. I hope the Senate will strongly support its previous position rejecting at this time further commitment of large sums on this type of so-called jobs program.
It should be noted, Mr. President, that economic conditions are far different today from what they were when the local public works program was initiated in 1976:
Public construction is up about 15 percent in the past year.
Nonresidential construction is rising sharply.
Employment in contract construction work has risen close to 15 percent.
The economic recovery is now in its 13th quarter.
The municipal bond market is very strong with borrowing at record levels.
State and local governments, in the aggregate, have an operating surplus of $10 billion.
Construction unemployment has declined sharply in the last 2 years.
Mr. President, I believe these facts, taken in the context of the inflationary impact of additional Federal spending on local public works programs, indicate clearly the need for the Senate to support the resolution.
As a senior member of the Senate Committee on Environment and Public Works which has jurisdiction in this area, and as a member of the budget conference, I believe I understand the issues presented by the LIPW proposal and the arguments made for it. I commend Senator MUSKIE and Senator BELLMON for their active and forceful leadership on this very important and symbolic issue, and urge my colleagues to join in supporting that position.
I yield back to the Senator from Maine the remainder of my time.
Mr. MUSKIE. Mr. President, I yield 1 minute to the Senator from Florida.
Mr. STONE. I thank the distinguished floor manager.
Mr. President, I support the Muskie resolution. As a member of the save-our-bucks task force, I have joined in an effort to bring about a gradual reduction in Federal expenditures. Eliminating a duplicative program is an excellent opportunity to achieve a much-needed reduction in the Federal deficit, or at least we would not add to an already excessive deficit.
The Senate has sound reasons for opposing a new $2 billion program of mainly construction projects that may provide a few jobs for disadvantaged workers. Economic conditions in the nonresidential construction industry are such that increased activity in this area is likely to be inflationary.
As for employment assistance for the disadvantaged worker, we have recently approved a multibillion-dollar CETA program that is ample in its scope, and need not be duplicated.
Fiscal responsibility demands the response embodied in this resolution.
Mr. President, I ask unanimous consent to have printed in the RECORD a letter to me from the Governor of Florida supporting, in effect, the Muskie resolution.
There being no objection, the letter was ordered to be printed in the RECORD, as follows:
STATE OF FLORIDA, OFFICE OF GOVERNOR,
July 24,1978.
Hon. RICHARD B. STONE,
U.S. Senator,
Washington, D.C.
DEAR DICK: After reviewing House Resolution 12993, the Labor Intensive Public Works Act (LIPWA) which Congress is considering this session, I have concluded that I cannot support the bill. I am taking this opportunity to inform you of my objections to the Act and to suggest alternatives.
Rather than create a new and cumbersome tool such as LIPWA, employment among unskilled, unemployed persons could better be stimulated by authorizing a third round of the Emergency Public Works Act of 1977 (EPWA). By giving preference to renovation projects over new construction, this existing program could be made more labor intensive. It is my understanding that the Economic Development Subcommittee of the House Public Works and Transportation Committee is seriously considering such an option, which draws on our experience with the public works program.
I realize there could be problems in this approach. Additional construction pressure might create added inflation in Florida due to rising interest rates, a spurt in construction and the stabilizing of our unemployment rate. Therefore, Round III of EPWA should begin only when a certain level of unemployment has been reached at the state and national levels.
If Congress does support LIPWA, there are a number of amendments which I believe would improve its effectiveness. A primary flaw of the bill in its present form is its lack of coordination with the Comprehensive Employment and Training Act (CETA) administered by the Department of Labor. As you know, CETA is already recruiting, training and placing persons who would alsoqualify for assistance under LIPWA. While CETA provides public rather than private employment and has limited impact on construction, administration and planning for the employment of essentially the same group of people should be coordinated. The following recommendations would help to integrate the efforts of both LIPWA and CETA:
Require all projects to be planned through the Prime Sponsor Advisory Council established by CETA at the state and local levels;
Require all long-term unemployed participants in the public works projects to be certified and referred by either the local prime sponsor or the state employment service, thus providing one certification point;
Require public works grantees to use the training, education and other employment services available through the CETA prime sponsor to fulfill the training requirements of their projects;
Define long-term, low-income unemployed in the same way in LIPWA as in the reauthorized CETA, thus simplifying recruitment and reducing the frustration of applicants; and
Require the Departments of Labor and Commerce to develop common planning cycles and reporting requirements for LIPWA and the public service employment sections of CETA.
I have two further recommendations for amending the present bill. In order to maximize the employment impact of the funds to be granted under the Act, a cap of ten percent for administrative costs should be included in the bill. The proposed approval process could also be streamlined by requiring the Secretary of Commerce to approve only the action plan and not each project.
One provision of the present bill which I would like to see retained is that which allows portions of a jurisdiction with over ten thousand people meeting the unemployment test to qualify for public works dollars. This will permit the improvement of areas which typically lag behind in public investment and where the target employment group would probably reside.
My staff has prepared more detailed comments on the Labor Intensive Public Works proposal and an assessment of our experience with the Emergency Public Works Act for your consideration. These will be sent to you under separate cover.
Please do not hesitate to contact me if you wish to discuss this matter further. Your careful consideration of House Resolution 12993 will certainly be appreciated.
With kind regards,
Sincerely,
REUBIN O'D. ASKEW, Governor.
Mr. MUSKIE. Mr. President, I yield 10 minutes to the distinguished Senator from South Carolina.
Mr. HOLLINGS. I hope I can limit it to 10 minutes.
Mr. President, I go right to the Governor's letter. I obviously have not seen the Governor's letter, or the mayor's letter, but I know why.
If you are a mayor of a town, you can take CETA funds — we have found this in our Budget Committee hearings and otherwise — and employ additional firemen or additional policemen. A Governor can carry some additional personnel in his office — and there are other things — under administrative costs.
I have just come back from my home State. When Senator THURMOND was Governor, he had nine people in the Governor's office, and when I was Governor I had nine. Now there at least 400 in the Governor's office. So we know about that kind of growth and what is being nurtured.
However, herein we have an entirely different problem, and there is no better way to describe it than as the "New York problem." I did not vote for the financial restructuring or loan guarantees for the city of New York. There is no use going into the particular facets of it. Suffice it to say that what really occurred was that I just could not see that that was a winning proposition and that New York could work itself out.
I was put to the task of seeing how you take, say, a Federal disaster area — that is what the city of New York is — and get assistance to it that will work.
I believe that the soft public works program that is advocated here by the distinguished Senator from New York (Mr. MOYNIHAN) is the answer.
I did not realize it at the time, but the truth is that I berated our friend Robert Hall, the Director of
the Economic Development Administration, in our hearings before the Appropriations Committee.
I said:
Mr. Hall, that is the kind of program that you really need for the inner city. You can see the deterioration spreading like the plague through a particular area. Can't you go to the modular or peripheral areas before they, too, become slums?
We viewed President Carter looking at the city of New York last year.
I said, can you not move in there and refurbish and rebuild and stop that deterioration before it is too late?
I happened to believe that soft public works, as I view it — maybe I have the wrong concept, and I am willing to be corrected — was in essence what I saw in my own hometown.
There, earlier this year, the Economic Development Administration awarded a general grant, including five to seven projects, and I went with Mr. Hall to each one of them to see the labor-intensified nature of it and the rebuilding that was merged in. It was not hard public works where you come in and just clear the lot, get out bids on a high- or low-bid basis to some contractor and, bam, he builds another new building. It is not the mayor or the Governor approach to sending x dollars to the particular chief executive and letting him say, "I have 1,000 or 2,000 unemployed, and let me try to get them on some kind of a payroll, because I am eligible for this kind of money, either CETA or countercyclical or otherwise."
But it is a sort of merging, a productive merging, of the best elements of both.
We went to an old garage site where the garbage collectors, had no facilities whatever to use for eating in the inclement weather. It was cold at that particular time. When it rains they just stand out there in the rain.
Part of the program, was, then to clear this off and move to a better facility, releasing this particular area for public housing and bringing housing and jobs and, incidentally, that was almost totally black or minority employees there.
I went to another particular site which is an old theater in the inner city. They did not want to tear it down. But no one had the money to clean it up, and repaint it, and fix it. and make it useful. Well, we did just that. The contract was let under the provisions of EDA, and incidentally, a black contractor received it. And they did the job, and that theater was used by the Spoleto Festival of Charleston. It is getting constant use now from the community. But no one single agency could come in and take over and do the whole thing.
I went to the incinerator in the "little Mexico" section of my city. We have a landfill type burning of the garbage. That big old brick building was just an eyesore and all the windows had been broken out. It was crime and drug infested. Just like the highway patrolman has to inspect two cars per day, the incinerator is regularly raided. And any time they wanted to say "I am doing my job." They could go into that dump and pick up two or three marihuana users or some other kind of drug user. We are cleaning that up for a community building now and therein the people of the community voted for this particular renovation and rebuilding.
I could continue to go right down that list.
It was 44 percent minority-impacted upon employment — to relieve unemployment — I say to the Senator I saw it being rebuilt with my own eyes, and it is one of the best programs.
The mayors and others want to try to extend this one because it works. It is just what the mayors need. "We will not be charged with the debauchery of CETA, or with being spendthrift, or with padding public payrolls and everything else. This one is tailored," is what they are saying.
As a result, Mr. President, I supported this in the first concurrent resolution.
I think that the Senate should have emphasized this. Each Senator will never understand it because Senators are busy off somewhere else. But what we are coming back for are instructions to revoke, if you please, what the Senate has already agreed to and what is now the first concurrent resolution, the $1 billion figure. We were trying to negotiate in conference a $500 million figure. The Houseof Representatives would not accept it. But it appears to me that what we really are asking then and coming back for are these instructions, and I regret the procedure to bolster and say now we have been instructed. If I were on the other side I would say, "You were instructed under the first concurrent resolution to come to at least $1 billion. Why do you not carry out that instruction?"
That crowd is busy. They are all trying, as I am now, to mark up an appropriations bill and get ready for another Interior appropriations markup, and everything else.
They just say, "Go back for some more instructions."
Why should we come as if an emergency exists and there is a new program and all of a sudden we busted the entire national budget? I think that is highly misleading.
I look back at countercyclical, for example. That was put in without any authorization. That was a good idea of my distinguished chairman. We never argued about authorization. We never bothered about how far it was going to go and grow and how large it was going to become and whether it was going to bust the budget — because our distinguished chairman understood, appreciated, and sponsored the countercyclical approach.
As strongly as he felt about that so strongly do I feel now about soft public works, particularly for the inner cities — New York, Los Angeles, Detroit. That is the way I think we can stop the blight, rebuild, and employ — all three in one.
One final word about countercyclical. The danger they tell us is that this one is going to grow and grow and never end. The contrary was true. We could have said that about countercyclical. But I have just gotten the figures. We spent $3 billion in the last 2 years, with $1.699 billion, almost $1.7 billion, last fiscal year, followed by $1.329 billion this fiscal year. And here we come out now at a level at $500 million for this program.
Senators do not have to necessarily agree in their minds as politicians and public servants that all we are wrestling with is unemployment, urban blight, and minority employment, and try to bring up everything and say it can or cannot work. I do not think we are all right or we are all wrong. We are trying to do the best we can.
Our Public Works Committee is waiting the Budget Committee signal on this one. We had it in the first concurrent resolution I saw no reason and the other Senators there saw no reason why we could not go to the $1 billion figure.
Let me be absolutely fair to our distinguished chairman. No one worked harder and has done a more magnificent job to save our national budget. It is a thankless task. He is in there day in and day out and he is working hard around the clock night in and night out. So I respect him, and I suggested to Senator MUSKIE, "Mr. Chairman, vote me down. I have been in the minority before. But let us take a vote and move on."
But I think to come back to what we need instructions on is not to bust the budget. We have that instruction from proposition 13 from every taxpayer, and what have you.
I feel it. I have realized it. I did not wait for it. I happened to bring about a balanced budget as Governor of my State for the first time in its history, and I yield to no man in trying to cut unnecessary costs.
This particular second concurrent resolution represents a 2-percent cut. We took President Carter's budget, I say to the Senator from Wisconsin, and cut $10 billion off of that $60 billion deficit down to $50.1 billion. We are cutting now another $7.7 billion, almost $8 billion out of it. That represents a 2-percent cut. We are trying to cut, but what we see here is a group within the Budget Committee—
The PRESIDING OFFICER. The time of the Senator has expired.
Mr. HOLLINGS. Mr. President, will the Senator yield me an additional minute and then I will conclude in just a minute.
Mr. MUSKIE. Mr. President, I yield to the Senator 1 additional minute.
The PRESIDING OFFICER. The Senator is recognized for 1 additional minute.
Mr. HOLLINGS. All right. What we see here are good Senators, leading Senators within that Budget Committee who felt that the best way to strengthen their hand on their very genuine belief that this was a budget buster was to get instructions from the Senate, and I resisted. I think it is wrong. I think the program actually is what the doctor ordered for the inner city. I could not vote for loan guarantees, but I would support to the hilt a program that I have seen working with my own eyes, that I know can really take care of that urban blight in the inner cities. You cannot go down into downtown New York and start clearing off blocks. You cannot just herd up people and give them a payroll. You have to get the two together and give something meaningful to the taxpayer and to that worker for his dignity and his credibility and his belief in himself.
I think this does it, and it should not be painted now as a budget buster. I thank the distinguished Senator from Maine.
Mr. MUSKIE. Mr. President, I yield myself 2 minutes just for a brief response to the distinguished Senator from South Carolina.
First, our latest mandate from the Senate is not the first concurrent resolution but the second. The second concurrent resolution provided nothing for this purpose, and that was a very deliberate action taken in the Senate Budget Committee. Those who support this public works program considered making a floor amendment to increase the Senate resolution ceilings to accommodate the program. They considered such an amendment and backed off after sounding out opinion in the Senate. So our mandate in the second budget resolution is to provide no money for this proposal.
Second, no one is arguing that this so-called soft public work program will bust the budget this year. We are now about the task of trying to fashion a budget. Our task is to form a budget that responds to the economic conditions, that responds to the country's needs and that the Nation can live with. We are trying to make decisions while looking ahead to the future impact of what we do.
The outlays from this kind of a program will not impact this fiscal year very much, as the Senator knows. What we are learning in the Budget Committee is we have to be concerned about budget authority, which adds to deficits in future years. So new programs have to be considered in light of their future impacts.
The original "soft public works" proposal of the President was intended to be a new kind of program that would have limited inflationary impact. However, it is being converted in the House and Senate committees from this new program to just an extension of the old hard local public works program which was enacted to stimulate the construction industry during a very deep recession. And it is being proposed in a highly inflated construction environment.
I have been for the soft public works approach — but what the House Public Works Committee is putting together is not that, and it is clearly not that. If we were talking about the President's real urban initiative, as originally proposed, you know my comments and my position would be entirely different.
This House program is defended in the name of the President's proposal. He proposed $1 billion. The House is proposing $2 billion a year. He proposed a distinctively soft public works program. The House is coming up with another round of hard public works. So, what the House is asking us to endorse and what the House is insisting upon is twice what the President asked for, a program that is less than half as well-targeted on the central cities and on the disadvantaged, low-skilled unemployed. The House would budget for a program that is targeted instead on that sector of the economy — construction industry — which is experiencing record high levels of employment, very low levels of unemployment, material shortages, and escalating prices for materials. This is where the House wants to focus this money. That is a different proposition from what the President advanced to us.
I argued for the President's program in the first concurrent resolution and managed to persuade a bare majority of the Senate Budget Committee to support me. We came to the Senate floor with it and we got it, and I argued for it in the conference on the first concurrent resolution and it was supported.
Third, with respect to what has been offered in the conference. In the current conference, there has been no offer by either side in this field because we were so far apart we thought before we froze conferees on either side into a fixed position we would explore on an informal basis for a possible agreement.
I was able to persuade the Senate conferees — very reluctant Senate conferees, I may add — that if the House would accept the number that we offered the House, in the revenue function, and middle-income tuition assistance, together with other concessions in other functions that the Senate conferees could suggest as a possible basis for agreement an offer on either side as much as $500 million.
But the House rejected that and came back instead and insisted on the full amount that the President originally asked for, without yielding a penny on that. Then Senators who had been persuaded to consider my proposal backed off and said they were sorry that they had agreed to offer the $500 million.
So I was back at zero at that point with the Senate conferees, back at zero without any support for anything. That is why I finally decided that what divided the House and Senate conferees was not a question of dollars which, as the Senator knows, you can often just split down the middle, but what really separated us was a differing view as to the wisdom of embarking upon this new expansion of public works programs at this time, given the condition of the economy, given the problem of inflation, which is of particular concern in the construction industry. A clear majority of the Senate conferees believed deeply that the budget totals should not be increased for this activity, while the House conferees believed just as honestly, just as deeply, in their position. So I decided the way to handle the issue was to come back, let the Senate debate it, and then we would know what the Senate, as a whole, feels about this specific issue and see where that takes us.
That is all that is behind the strategy. Senator BELLMON and I and Senator MCCLURE, and I know the Senator from South Carolina, will accept the will of the Senate, whatever it may prove to be.
I had promised to yield to my good friend from Wisconsin who has been patiently waiting. Could we engage in whatever dialog the Senator from New York is interested in at a later time?
Mr. MOYNIHAN. Mr. President, I saw the Senator from Wisconsin rise, and I would be glad to yield to him.
Mr. PROXMIRE. This probably pursues the speech of the Senator from South Carolina.
The PRESIDING OFFICER. The Senator's time has expired. I take it he is speaking on his own time.
Mr. MUSKIE. I will be glad to yield 3 minutes to the distinguished Senator from New York.
Mr. MOYNIHAN. Mr. President, I rise, first, to thank the Senator from South Carolina for his eloquent and important statement in support of this proposal. He speaks with experience and with a shared concern that is beyond any regionalism or parochialism that might animate us.
I would like to say in public what I have said to my friends, the managers, in private — that if these are measures that are only appropriate in times of economic downturn, we are not far from needing such measures now, as we enter the 13th quarter of economic expansion as the dollar collapses further.
Finally, Mr. President, I ask unanimous consent to have printed in the RECORD a very carefully stated letter from our distinguished and much admired Secretary of Commerce, Dr. Juanita Kreps, explaining the President's proposal and asking that the measure of the Senator from Maine and the Senator from Oklahoma not be supported today.
There being no objection, the letter was ordered to be printed in the RECORD, as follows:
THE SECRETARY OF COMMERCE,
Washington, D.C.,
September 14, 1978.
DEAR SENATOR: The President's Labor Intensive Public Works (LIPW) legislation is a major part of the Administration's Urban Policy package. Cities and towns throughout the country continue to face serious problems in the deterioration of their public infrastructure. The demands for operating expenses on the municipal budgets have depleted resources necessary for the repair and renovation of public facilities. In addition, the problem of structural unemployment particularly among our youth and minorities in the country remains at unacceptably high levels despite the overall decline in the national unemployment rate.
The President's LIPW bill is directly targeted to provide private sector jobs to the long-term unemployed and will assist local governments to improve their deteriorating capital stock. The Administration supports $1 billion per year for two years. Enclosed is a fact sheet further explaining the provisions of this important legislation.
As you know, the House and Senate Budget conferees have been unable to reach an agreement on new spending for the President's Labor Intensive Public Works Program. The House Second Budget Resolution provides a total $2 billion for public works spending, of which $1 billion is earmarked for the President's LIPW. The Senate Resolution contains no funding for the President's LIPW Program, although the First Resolution contained the $1 billion requested by the President.
This afternoon, the Chairman of the Senate Budget Committee will offer a Resolution requesting the Senate to instruct the Senate conferees on new spending for the President's Labor Intensive Public Works Program. We urge you not to support S. Res. 562, which would insist on the Senate Budget Committee position opposing any funding for the LIPW Program. We believe it is appropriate for the House and Senate conferees to reach a compromise agreement to fund the President's LIPW Program and suggest the $1 billion authority for FY 1979.
Sincerely,
JUANITA M. KREPS.
EXPLANATION OF THE PROPOSED LABOR INTENSIVE PUBLIC WORKS PROGRAM
PURPOSE
The establishment of a labor intensive public works program is being proposed in order to meet two pressing needs faced by communities throughout the country. (1) Many cities and towns throughout the country have insufficient resources to repair their deteriorating public infrastructure. Such repairs are postponed to meet more immediate operating demands and further deterioration of the public facilities occurs. (2) The problem of structural unemployment persists even though the overall national unemployment rate is declining. The unemployment rate among the long-term disadvantaged unemployed, including many youths and minorities, remains high.
Public works programs have been successfully used to promote long-term economic development activities and to stimulate the economy in a recessionary period. A labor intensive program is being proposed to demonstrate that public works activities can be structured to provide private sector jobs for the long-term, disadvantaged unemployed as well as to assist communities in renovating their public facilities.
PROGRAM DESIGN
It is proposed that $1 billion be authorized for each of the two years. The program funds would be allocated first to States and then to those economically distressed areas within each State based on their relative unemployment problems. Funds will be available to finance projects of the State governments, counties, local governments, and school districts.
Public works projects will be funded, with 100 percent Federal financing, in each eligible area up to that area's allocation. The grant can be used to provide and rehabilitate a variety of public facilities including those which will conserve energy, increase accessibility to the physically handicapped, preserve historic structures, and enhance public services.
To assure that the long-term unemployed are assisted by the program, certain requirements will apply to the projects carried out by each area. The requirement for the first year of the program will be less stringent than those for the second to allow for an increase in the program's targeting capacity. Further, the requirements for rural areas will be less stringent than those for urban areas since the latter will have more existing systems available to meet the requirements. The major goals are (a) that there be a minimum average labor intensity for an area's projects to ensure that a significant number of jobs are created; (b) that a minimum average percentage of the jobs be filled by the long-term unemployed; and (c) that an appropriate portion of each area's funds be expended through minority business enterprises to foster minority-owned businesses.
Mr. MOYNIHAN. Once again, Mr. President, I thank the Senator from Maine for his courtesy and also the Senator from Oklahoma.