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were too high and the programs involved were not all that important to them, and not because they were skeptical about whether the Federal Government would enter into long-term contracts.

Mr. Baker. It is true that the only major system recently approved is the one in San Francisco.

In that one case, which is exceptional, the electorate and the officials of the city became so concerned about the problem of urban transportation that they took the financial leap.

Mr. BOLAND. Many communities have been turning down bond issues for schools and education. I think that is closer to the minds and hearts of people than transportation.

Are there any questions on Mr. Prestemon's statement ?

CONSTRUCTION CUTBACKS

Mr. McFall. Didn't the President announce either yesterday or today some cutback in the construction of the highway program? Would you tell us something about this and how this will affect our deliberations in this budget?

Mr. Baker. I think it is correct that the newspapers reported a statement made by the Vice President yesterday at the Governor's Conference in Colorado to the effect that there would be cutbacks of perhaps 75 percent in federally supported construction programs.

However, I do not believe this was meant to be an official public pronouncement.

Mr. McFALL. Excuse me?

Mr. BAKER. The reason I phrased it that way is that I do not believe the newspaper accounts reflect a final decision. In fact, as we understand the situation, from several thousand miles away, the timing and amount of such curtailments have not been finally determined.

I am saying that we do not know what the President's final decision on this will be.

Mr. MINSHALL. Have you made any sounding as to when we will come up with a final decision?

Mr. BAKER. I think it would be surprising if we don't know this within a week or 10 days, something of this order.

I think it is equally clear-I am presumptuous to put in that waythat we would be very surprised if the Federal highway program, which is about two-thirds of our total outlays, were not significantly affected by any curtailment that the President decides to make in construction programs.

CLARIFICATION OF THE CONSTRUCTION CUTBACK

Subsequent clarification obtained by the Department indicates that only direct Federal construction programs are included in the present cutback. Grant construction programs such as the Federal-aid highway program are not included in the construction cutback at this time.

Mr. MINSHALL. In dollars, how much would the 75 percent affect your budget ?

Mr. PRESTEMON. The highway program, for example, is programed at a level of $1.2 billion in obligations per quarter. If a 75-percent cut is made, obligations—that is, project approvals

would be reduced to some $300 million per quarter.

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The actual impact on the estimates before you in fiscal year 1970, however

, would be relatively small. Your action is on the expenditure side, in appropriating liquidating cash. Even a major cutback in that order of magnitude, if that is finally decided upon, would reduce liquidating cash appropriation requirements for fiscal year 1970 by certainly no more than $180 to $200 million out of $4 billion.

Mr. McFall. This is not unusual. The previous administration

from time to time announced cutbacks in the highway program and issue it went up and down depending upon the administration's view of heart the necessity to control inflation. I presume this is what is going on

downtown now. I assume what the Vice President has said will come
to pass and we will have further information about it later.
First

, it would not have that significant an impact upon the budget
for this year. I would not think you will cut it back 75 percent or that
kind of reduction in the highway program. That kind of reduc-
tion would be almost unthinkable, so the total impact on our budget
this year would not be very great. Is that right?
Mr. BAKER. That is correct.
Mr. McFALL. And also we will know more about this later. Would
you just tell us when the time comes and we will be able to estimate
the

impact on the budget at that time after we have the proper figures? Mr. Baker. Yes. Even with a cut of the magnitude of 70 to 75 percent for a period of 60 days, which has been talked about, or even 90 days, the impact on appropriations for the highway program for fiscal 1970 would be on the order of $50 million to $100 million.

However, such a reduction would have an impact on the appropriations for fiscal 1971 perhaps on the order of $500 to $600 million.

What I am saying is that as far as the appropriations for 1970 are concerned, no matter what happens, this would have relatively little impact. Mr. McFALL 1971! Mr. Baker. Significantly more if this kind of cut was made. Mr. McFalu. You will inform the committee concerning the events as they transpire? Mr. Baker. Yes, sir.

OUTLAY REDUCTIONS Mr. McFall. With reference to the final decisions on the last page of Mr. Prestemon's statement, "Final decisions on what our Department's share of this cutback will be have not yet been made," when can we expect that they will be made and when will the committee be advised as to what these cutbacks are ? Mr. Prestemon. I think it really depends on when the final decisions are made on the construction cutbacks.

As Mr. Baker has said, I think those decisions, of necessity, will probably have to be made within 2 or 3 weeks. The longer any decision

is postponed, the smaller the budgetary impact in 1970 will be. The decision has to be made reasonably soon, and our information is Mr. McFall. So your cutbacks in controllable programs, if we want to describe it that way, would be affected by what your cutback would be in the highway program?

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that it will be.

Mr. PRESTEMON. It would be affected by any cutbacks in construction generally throughout the Government, whatever decision is made.

Mr. McFall. Not in construction of just the highway program? I understood it that way. You mean construction throughout the Government!

Mr. PRESTEMON. Yes, construction generally.

Mr. McFall. And what other programs besides the highway programs! Building programs?

Mr. PRESTEMON, Yes.

Mr. McFALL. How will this affect the Transportation Department! I am thinking of the effect upon your program.

Mr. PRESTEMON. It depends on how large the cuts are in the nonconstruction field. We have a number of construction programs besides the Federal-aid highway program. We have public lands highways, a good deal of construction under the mass transportation program, and some in FAA, as well. We have received no firm guidance on what those cuts will be.

From all we have been able to determine those decisions will simply be made a little later on, perhaps in 2 or 3 weeks,

Mr. McFALL. Off the record.
(Discussion held off the record.)

Àr. BOLAND. You said the Department would be prepared to give the committee the amounts of the reductions. We would like a little firmer information. We would like you to inform the committee precisely what the reductions will be across the board in the Department of Transportation, not alone in construction, but salaries and all other activities of the Department. We would like to know that both the Department and the committee are operating with the same set of figures rather than the committee operating on a set of figures which does not include revisions made as a result of the President's desire to keep within the expenditure figure cited.

Mr. PRESTEMON. We shall supply you with the information as soon as we have it.

Mr. MINSHALL. At the outset I would like to welcome Mr. Baker here. With his impressive background and the quality of his testimony, even though this morning it has been brief, I know it augurs well for this subcommittee. We welcome you.

Mr. BAKER. Thank you.
Mr. CONTE. I have no questions.

Mr. BOLAND. Thank you very much, Mr. Prestemon, and thank you, Secretary Baker.

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h the ment before us.

WEDNESDAY, SEPTEMBER 3, 1969.
U.S. COAST GUARD

WITNESSES
ADM. W. J. SMITH, COMMANDANT
VICE ADM. P. E. TRIMBLE, ASSISTANT COMMANDANT
REAR ADM. T. R. SARGENT III, CHIEF OF STAFF
REAR ADM. H. S. PEARSON, CHIEF, OFFICE OF ENGINEERING
CAPT. O. W. SILER, DEPUTY CHIEF OF STAFF
CAPT. F. D. HEYWARD, CHIEF, LAW ENFORCEMENT DIVISION
CAPT. W. KESLER, JR., CHIEF, LEGISLATIVE AFFAIRS DIVISION
COMDR. W. H. FITZGERALD, JR., CHIEF, BUDGET DIVISION
COMDR. J. S. GRACEY, CHIEF, PROGRAMS DIVISION
REAR ADM, J. D. McCUBBIN, CHIEF, OFFICE OF RESERVE
BEAR ADM. J. J. MCCLELLAND, CHIEF, OFFICE OF BOATING SAFETY
REAR ADM. C. A. RICHMOND, JR., CHIEF, OFFICE OF RESEARCH

AND DEVELOPMENT
CAPT. G. F. HEMPTON, CHIEF, COMMUNICATIONS STAFF
COMDR. V. W. RINEHART, DATA BUOY PROJECT MANAGER
CHARLES D. BAKER, DEPUTY UNDER SECRETARY, DEPARTMENT

OF TRANSPORTATION
ROBERT G. PRESTEMON, DIRECTOR OF BUDGET
Mr. BOLAND. We will turn to the budget of the U.S. Coast Guard.
We are delighted to have this very important agency of the Govern-

ment

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As has been said on many occasions, it is an organization which
does a very fine job in all the important activities assigned to it.

We therefore welcome the Commandant of the Coast Guard, Adm.
W.J. Smith, and the staff which accompanies him.
Admiral Smith, we will be pleased to hear you.

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GENERAL STATEMENT

Admiral Smith. Mr. Chairman and members of the committee, 1968, the Coast Guard's first full year as a part of the Department of Transportation, was a year which saw us become a complete partner in the challenging task of developing and sustaining the Federal Government's role on the transportation scene. For this reason, I think it would be well for me to review the "state of the Coast Guard" before launching into a discussion of our fiscal 1970 appropriations request now before you.

We are now in the mainstream of the objectives and purpose of the Department of Transportation where major goals are transportation safety and efficiency-areas in which we have been involved in one way or another for a number of years. The development of the Department of Transportation's objectives has underscored the importance of Coast Guard missions in transportation, and has strengthened greatly our multiple-mission role. Our programs and our budget relate most meaningfully to the Department's objectives. Thus, our programs are integral parts of the total efforts and services of the Government in the broad area that is transportation. The Coast Guard performs a multiplicity of tasks. Its emphasis on providing services to transportation is amplified to deal with related areas such as fishing and oceanography.

It should be stressed that our operating programs invariably emphasize maritime safety. We set safety standards for vessels and equipment, review ship designs, carry out inspections, and conduct enforcement proceedings. Moreover, we are engaged in making the water passage, both inland and offshore, safer and more efficient by providing and maintaining a variety of navigational aids ranging from simple, nonmechanical buoys to sophisticated long-range electronic navigation systems. If a mishap does occur, it is the Coast Guard which carries out or directs the necessary search and rescue operations.

Working within the Department of Transportation the Coast Guard has demonstrated that its basic transportation support mission is fully compatible with tasks and responsibilities in the related areas. To illustrate while providing the services needed to promote waterborne transportation safety and efficiency, we effectively patrol the Nation's fishing grounds to prevent incursions from foreign vessels; our normal aerial surveillance provides immediate intelligence of potentially disastrous offshore leakages; we provide the oceangoing platforms needed by oceanographers and other scientists for dedicated programs; we provide vital weather data; and we collect and transmit the information about ocean conditions needed by the maritime transportation industry, recreational boaters, sports fishermen, the commercial fishing industry, and others.

To place the Coast Guard in perspective, our fiscal year 1969 appropriations provided for about 38,000 military and 6,250 civilian positions. We operate worldwide 173 aircraft, 347 ships and about 1,300 shore units. In addition to active duty personnel, there are about 26,500 personnel in the Ready Reserve and 4,500 in the Standby Reserve.

PROBLEM AREAS-LEGISLATION

There are some areas which I mentioned last year in which specific problems were addressed. To date general progress has been satisfactory and it would be appropriate to report at this time. Departmental legislative proposals concerning bridge-to-bridge radio requirements and unified rules of the road are pending in our legislative committee. It is my understanding that these bills, along with a proposal concerning safety regulation of diesel towing vessels, will be considered as a total marine safety package in the near future. A boating safety program as well as safety regulation of nonmilitary submersibles are presently under administration review.

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