College housing terminated by January 5, 1973.

Nonprofit special sponsored assistance suspended by January 5, 1973. Public housing modernization suspended by June 30, 1973. Model cities, neighborhood facilities, open space land, water and sewer facilities, urban renewal programs, rehabilitation loans, community development and training and fellowship programs, supplementary grants for new communities, all terminated by June 30, 1973.

The suspension and termination of new commitments for HUD assisted housing and related programs housing a loan results in $431 million of authority approved by the Congress which will not be used. If it were released this would produce or rehabilitate over half a million housing units for low and moderate income families. The following programs are involved and here I list several programs and their impact.

The total economic impact of this withholding is about $19 million in the GNP and almost two and a quarter million man-years' loss. Now these programs either early or lately enacted are the embodiments of this Nation's commitment to serve the peoples' housing needs. On the basis of these commitments people have acted, committed, committed their organizations, they have planned, cities and States have acted and committed and planned the level of expectations of many individuals seeking to improve their living environment and now are all caught in the midst of conflicts of national policies. It is clear that the Congress has acted, it is clear that the funds are available, it is clear that the private and public sectors are acting or are prepared to act to use these programs to serve the Nation's housing needs, but now they are being clearly cut back, suspended or terminated. We wonder who sets national policies? We wonder who establishes national priorities? In whom is this power vested?

In a government where powers are balanced between three branches and three levels, there is a long and complex array of people's interests, governments and authorities embodied in the development of setting and development of national policies and priorities but that, of course, is why these hearings are being held and that is why we are here. This coalition is a case in point. There are groups within this coalition who question the level of public involvement in housing. There are those within this coalition who question the private sector's capacity alone to deal with the Nation's housing needs but within the coalition all are committed to the goal of housing. For years members of this coalition from their respective prospectives have worked with one another or against one another, have worked with property owners, neighborhood groups, planning commissions, city councils, mayors, State governments, Governors, Congressmen, the President, and yet we have to work through the courts to gradually build the set of programs at all levels of government aimed at meeting the Nation's housing needs. In this process these groups and interests have geared their capacity and actions to use these programs and now those programs are suspended or terminated.

By what authority? We can understand cutbacks to deal with the insidious and persuasive influences of inflation but it has not been made clear why the cutbacks need be made in housing.

We can understand that some programs might even be suspended when no public need is to be served. President Jefferson took such

action on a gunboat fleet on the Mississippi, when it was no longer foreign territory. He impounded there.

We cannot understand how after this long process of arriving at public programs and public priorities a singular decision can suddenly terminate.

These actions, it appears to us, do not reflect the processes of our Government nor recognize the diversity of interests and needs that are to be served in this broad country. The energies, long-term commitments, and resources of such a diverse group as this coalition, are frustrated and dissipated by a single act.

But the problem goes farther.

Let us take the issue of priorities. There is a long standing threat of conflict there. Government closest to the people is best able to make decisions of what the public should do. Let me give you a specific example of how this has changed.

Several years ago the Congress enacted a direct loan program for property rehabilitation under section 312 of the National Housing Act. This program was a loan program directly from the Federal Government to property owners. The loan was to be used in neighborhoods that were declining and where the public and private sectors and machinery were improving these properties and were helping where inadequate. The loans were designed to help people to improve their property to help those who are able to and willing and help themselves to conserve our housing resources. Hundreds of cities across this country and some States have used this program. They have relied upon it to help their citizens improve their property. Now, as recently as this past month communities and property owners who have relied on this resource are being told that would no longer be available, that it is being terminated. Communities are being told if they want to honor their promises to their citizens they must find other resources to do the job. We ask them who is setting priorities for local government and local resources?

Mr. Chairman, let me conclude by making the general observation about an often cited attitude prevailing in the land. It is asserted that the American people have lost confidence in their Government. Is it because the Government is not responsive? Is it because the Government fails to recognize public needs? The answer is yes; but only partially yes. It may also be because America is changing and programs designed to serve public purposes are being asked to do things other than they were designed to do. It may be because the labor spent by such groups as the representatives in this coalition are frustrated by a change in policy or the willfulness of a single act.

It may be because the processes of Government aren't working as we have become accustomed to them working.

Americans find it hard to believe that a budget prepared in late 1972 for fiscal 1974 which shows a planned suspension or termination of enacted social programs doesn't also contain funds for a planned rehabilitation of Vietnam when the negotiated settlement that would lead to that rehabilitation was also contemplated in late 1972.

The integrity of Government is being tested. The credibility of leadership is in doubt. We ask you again who sets national policy, who does establish national priorities and in whom is this power vested? Thank you.

Senator CHILES. Thank you for your statement. Can you give me your opinion or any of your group as to how you view the particular trade-offs in regard to the special revenue programs that the President is now talking about and which is tied to some of the phaseouts or some of the cutbacks, the reason for some of the cutbacks?

Mr. MAFFIN. In the first place, Mr. Chairman, the proposed special revenue sharing which is referred to in several instances in the departmental budget for HUD indicates that fiscal 1974 will in effect see no special revenue sharing program and that the announcements of around January 8 indicated that many of these programs would be terminated as of June 30, so there is a period of hiatus there of 1 year. Now it is being asserted that some of these programs contain ongoing available authority and obligational levels which would permit operating at a somewhat considerably lower level than we have been accustomed or need, but we question whether that will provide anything like a need to meet the national level, to meet the national needs. If experience with general revenue sharing can be shown as any parallel, the mayors and governors and lots of groups were promised, I suppose is a good word, promised that general revenue sharing would not be used to supplant categorical grant programs and yet in dealing with Federal agencies and offices the membership of various organizations in this coalition have come to expect that those offices of the Federal Government will suggest to local government and to private agencies that general revenue sharing money can now be used for these purposes.

What I am saying to you is that at least from the experience of general revenue sharing so far the trade offs would seem to those at State and local levels and to private groups relying on those programs that they are losing more than they might get by a substantial amount and promises have in fact been broken.

Senator CHILES. I see.

Mr. EDMISTEN. Have any of you gentlemen ever consulted with anybody at OMB about this? If so, what has been their response?

Mr. MAFFIN. I personally have not consulted with OMB directly. I know in the case of operating subsidies, for example, for lowincome housing, that the general response has been that we must find a way to close off open ended obligational authority and moreover that these programs in our opinion have been poorly administered and in many cases ill conceived. We need time frankly to reexamine those programs and come up with alternatives.

Now those of us in this coalition are probably as acutely aware as anyone in this country of whatever shortcomings there may be in some of the programs Congress has enacted. These shortcomings have in part become more prominent because the programs are now being asked to do things they were never designed to do.

But we are also mindful of the fact that 4 years may well not be time enough to devise alternatives and other than the consolidating and codifying of housing programs there have been no alternatives proposed.

Senator CHILES. Thank you very much, we appreciate your testimony and your appearance.

Mr. MAFFIN. Thank you, sir.

(Statements of Robert W. Maffin and Rev. Robert E. Johnson follow :)

PREPARED STATEMENT BY ROBERT W. MAFFIN, CHAIRMAN OF THE NATIONAL AD Hoc HOUSING COALITION

Mr. Chairman and distinguished members of the Separation of Powers Subcommittee, my name is Robert W. Maffin, and I am Chairman of the National Ad Hoc Housing Coalition and Executive Director of the National Association of Housing and Redevelopment Officials (NAHRO). Accompanying me today are James P. Twomey, Vice Chairman of the national coalition and Executive Vice President of the Nonprofit Housing Center, Inc.; James H. Harvey, SecretaryTreasurer of the national coalition and Chairman of the Housing Task Force, of the Leadership Conference on Civil Rights; John Evans, Director of the Department of Urban Affairs, of the AFL-CIO; the Reverend Robert E. Johnson, Chairman of the Interreligious Coalition for Housing; John Thompson representing the National Association of Real Estate Brokers, Inc.; and Timothy D. Naegele, General Counsel of the national coalition.

We appreciate this opportunity to testify in support of Senate Bill 373, the Impoundment Control Bill, which was introduced on January 16, 1973 by Chairman Ervin and forty-four other Senators to insure the separation of federal powers. It is our understanding that the sponsors of this legislation now number fifty-one and we hope this list will grow even more in the weeks to come.

THE COALITION

The National Ad Hoc Housing Coalition was formed earlier this year by some 70 organizations (see Attachment 1) representing the elderly, organized labor, banking and financial interests, churches, middle-income families, poor people, tenants, landlords, minority groups, public officials, rural interests, and others— all committed to honoring this nation's federal commitment to a decent home and a suitable living environment for every American family. Our immediate goals are to achieve a roll-back of the moratorium on new federal housing commitments which began on January 5, 1973, and to obtain the release of authorized and approved funds to meet pressing housing needs. Our long-term aims include the refinement of existing programs where such refinements are necessary; the fashioning of workable alternatives, where such alternatives are justified to fulfill this nation's federal commitment to housing; and the restatement of federal responsibilities in this area of domestic concern, to insure that urgent needs are adequately addressed. In all cases, we intend to work closely with the committees of Congress which are responsible for this legislation, and provide whatever assistance may be necessary.

In addition to the groups previously enumerated, we also speak on behalf of local coalitions which are springing up all over this country, patterned after the national coalition, in such states as California, Illinois, Massachusetts, Michigan, New Jersey, New York, Ohio, Pennsylvania, Utah and West Virginia. We are here today because of our concerns over what has taken place in recent months, not only in the field of housing but in other important areas, as well. We want to point out the problems which have been created in the process and describe what we feel will happen unless present trends are reversed.

EFFECTS OF MORATORIUM

On January 5, 1973, the Administration took decisive action to terminate the following programs: college housing, model cities, neighborhood facilities, open space land, water and sewer facilities, urban renewal, rehabilitation loans, public facility loans, community development training and fellowships, and supplementary grants for new communities. In addition, it suspended the assisted housing programs which include rent supplements, the Section 235 and Section 236 programs, and public housing; the housing programs of the Farmers Home Administration; nonprofit sponsor assistance; and the public housing modernization program.

These drastic measures, in the face of unmet demands for decent, low-cost housing-in urban and rural areas alike-evidence a lack of concern and understanding on the part of administration officials which has broad implications for

other vital national programs, as well. In essence, the administration has rejected congressionally enacted housing programs and has said that all new housing activity will be halted, while a "period of searching evaluation" is completed and a nation's housing needs go unmet.

Impounded funds in the fields of housing and community development, during fiscal year (FY) 1973, will amount to $991 million and constitute approximately 16 percent of the Department of Housing and Urban Development's total available budget authority. In FY 1974, impoundments will exceed $1 billion and rise to at least 21 percent of total HUD funds available for new commitments. Almost $400 million of the total monies which will be impounded in FY 1974— involving some 450,500 housing units for lower income families- relates to the Section 235 home ownership program, and the Section 236 rental assistance program.

It has been estimated that the economic impact of impounding funds for these two programs alone will exceed $19 billion and result in an estimated loss of 2.2 million man-years of employment (See Attachment 2). These figures are staggering; however, it must be realized that they do not include an assessment of the economic or employment impact relating to the impoundment of funds for rent supplements, water and sewer facilities, rehabilitation loans, college housing, nonprofit sponsor assistance, public housing modernization, model cities, neighborhood facilities, urban renewal, community development training and fellowships, supplementary grants for new communities, open space land, or public facility loans. The impoundment of funds in the latter areas of activity far exceeds the level for the two programs mentioned above; and therefore the moratorium's total impact on our economy in terms of dollars and jobs lost will be multiples of the $19 billion cost figure and the 2.2 million job figure.

The recent housing moratorium's consequences become even more apparent when one realizes that the level of new commitments for HUD-assisted housing programs will drop from 426,924 units in the FY 1972 to 29,800 units in FY 1974 a reduction of 93 percent in new activity. At the same time, requested appropriations for the Department of Housing and Urban Development will drop from $4,291,508,000 in FY 1973 to an estimated $2,684,303,000 in FY 1974. Rural America's potential loss in dollars over the next 18 months is equally staggering: nearly $1.6 billion. But, dollars tell only part of the story; potential employment losses are estimated at 133,120 man-years.

It is also important to note that by the end of FY 1974, the January 5th moratorium on new commitments (when coupled with an already diminished pace of new activity) will place HUD-assisted housing programs 45 per cent behind goals set forth in the Housing and Urban Development Act of 1968 (See Attachment 3). Thus, by the end of that fiscal year-the sixth year of the ten year period during which six million new or rehabilitated units were to have been produced for low and moderate income families-slightly over half of the three million units anticipated will actually be ready. The most serious gaps exist in the public housing program where existing activity will lag 55 per cent behind projected goals; and the rent supplement program where the lag approaches 72 per cent. Both of these programs, interestingly enough, were designed to serve the lowest income families. It must also be emphasized that only four years remain to make up these deficits, if this nation sincerely hopes to honor its commitment to a decent home and a suitable living environment for every American family.

As a result of the moratorium, builders, lenders and others who have cooperated in producing housing under these programs will turn their efforts and investments in other directions. Substantial numbers of workmen and contractors, many of them members of minority groups, will be forced to seek other employment. Vast public and private resources and skills will be lost and cannot be replaced easily in the event that new housing programs are initiated at some future date.

In addition, housing costs will be left almost exclusively in the control of a very imperfect market. Average costs for both single-family and multifamily units inay rise; and the impact produced by the absence of lower priced housing will remain with the nation for many years. Rents on conventional apartments may also rise faster than if they had been constrained by the competitive effects of