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Information on impoundmnts provided by officials of departments and agencies—
Continued Department of the Treasury :
Federal Law Enforcement Training Center, construction.-- 21, 517, 395 Bureau of the Mint, construction.------
2, 516, 802 Total, Department of the Treasury---------------
24, 034, 197
Atomic Energy Commission:
Thorium utilization -
Assistance payments to Richland, Wash-------
2,000,000 1,000,000 4, 000, 000 3, 200, 000
Total, Atomic Energy Commission.---
Department of Housing and Urban Development:
Rental and cooperative housing for lower income families
(sec. 236)---Nonprofit sponsor loan fund (sec. 106a), technical assistance
grants --Nonprofit housing sponsor loans (sec. 106b), planning projects
for low- and moderate-income families.----New community assistance, supplementary grants for public
facilities Rehabilitation loan fund_---Water and sewer facilities grants--
25,000,000 1,000,000 3, 600,000
7,500,000 86, 000, 000 400, 100, 000
Total, Department of Housing and Urban Development---
Federal-aid highways -----
50, 000, 000 20, 000, 000
General Service Administration : GSA indicated "nothing of sig
nificance" is impounded. List has not been made available at
this time to Congressman Evins. Veterans' Administration : Funds impounded by OMB:
Hospital construction, major construction ----
Hospital construction, minor construction..
60, 000, 000 5, 000, 000
2, 430, 000
Total, Veterans' Administration.
111, 786, 000 Information on impoundmnts provided by officials of departments and agencies,
1, 320, 000 Construction and rehabilitation -
3, 115, 000 Upper Colorado River storage project----
1, 170,000 Total, Bureau of Reclamation.
5, 605, 000
Other Interior programs: Department indicates only 2 small
items in reserve. Efforts to secure listing have not revealed
Appalachian Regional Commission:
Development highway program.-----
Total, Appalachian Regional Commission...
Department of State:
Foreign Buildings Office (not appropriated funds).
2, 125, 000 2, 950,000
Total, Department of State-----
Small Business Administration :
Direct and immediate participation loan funds -----------
55,000,000 2, 700,000
Total, Small Business Administration.
STATEMENT OF THE IDAHO BOARD OF HIGHWAY DIRECTORS, JANUARY 1973
The Idaho Board of Highway Directors and the Idaho Department of Highways appreciate this opportunity to comment. The purpose of this statement is to remark solely on the interrupted flow of Highway Trust Funds to the FederalAid Highway Program.
Since 1967, a widening gap has occurred between Trust Fund obligational authority and amounts appropriated by Congress for highway programs. In addition, for the period including fiscal years 1967 through 1973, total receipts to the Highway Trust Fund will have exceeded total obligational authority by almost $4.5 billion.
Such action has been defended as justifiable by the National Administration as being in accord with budgetary requirements and economic stabilization programs in effect since 1966. Ceiling limitations for the program are set by the Office of Management and Budget.
It is our contention that meeting the original goals of the legislation establishing the Highway Trust Fund is also an important "budgetary requirement" that has precedence over contemporary fiscal constraints.
Furthermore, Section 101 (c), Title 23, U.S. Code, provides for withholding of funds only if necessary to assure there are sufficient amounts to pay expenditures.
Impoundment action is totally unrealistic when related to the Trust Fund Revenue Structure and is all the more unreasonable since withholding continues even with full knowledge of the magnitude of the Nation's highway needs as reported by the Department of Transportation to Congress in January 1972.
Continuation of this action may be interpreted as insensitive to the requirements of the public for improved highway transportation as voiced by Congressional intent in highway legislation establishing the various Federal-aid highway programs and particularly the founding of the Highway Trust Fund itself.
The Board of Highway Directors and the Department of Highways also take issue with Federal dictation and rearrangement of priorities through unbalanced reductions in obligational authority for the various highway systems and programs.
Idaho has consistently been an enthusiastic and hard-working partner in the Federal-Aid Highway Program; and the State has always sought every available means to achieve a predictable and orderly program of project scheduling. However, the withholding of funds by the Administration without due cause, certainly does not measure up to the ethics inherent in the Federal-Aid Highway Program nor does it encourage an optimistic outlook for orderly project scheduling.
Therefore, Idaho supports the language and specifics of the proposed Bill. The requirement for a special message by the President regarding impounded funds to be printed in the Federal Register will hopefully promote more openness in the Administration's handling of such matters. However, most encouraging is the Bill's proposal that such impounding shall cease within 60 days unless the action shall have been ratified by the Congress.
Impoundment of designated funds from a Trust Fund which pays its own way is not in the best interests of trustworthy government and incurs an unfairly protracted time to provide needed highway improvements under programs established by the Congress for specific highway purposes. Respectfully submitted,
IDAHO BOARD OF HIGHWAY DIRECTORS,
State Lighway Engineer.
STATEMENT OF NATHANIEL KEITH, PRESIDENT OF THE NATIONAL HOUSING
CONFERENCE, FEBRUARY 9, 1973 As president of the National Housing Conference, I appreciate the opportunity to appear before this Committee. We support Senate Bill 373, the Impoundment Control Bill. The enactment of this Bill will better enable Congress to exercise its proper constitutional power and responsibility concerning legislation and appropriations.
The actions taken by the President do not involve merely a cut in the level of many programs, but a complete suspension or termination of them after designated dates—January 5, 1973 for some and June 30, 1973 for others. The net effect is equivalent to the repeal of many laws which were enacted by the Congress and signed by the President, some of which have been in effect as long as 35 years. As explained below, we believe that the President does not have the power unilaterally to repeal these laws, nor can be accomplish, by indirection, the same purpose through a unilateral suspension or termination of all future commitments under these laws.
Our testimony is concerned mainly with the housing and community development programs administered by the Department of Housing and Urban Development (HUD). We will cite all of these programs where funds and contract authority have been impounded and where the operation of Federal laws have been suspended or terminated ; also the great damage that will be caused as a result of this precipitous action of the President.
1. PRESIDENT'S IMPOUNDMENTS, SUSPENSIONS AND TERMINATIONS OF HUD PROGRAMS
In the Budget submitted to the Congress by the President, the following housing and community development programs were suspended or terminated by the President as of the following dates : Programs suspended :
Effective suspension date 1. Assisted housing including rent supplements, Sec. 235 and 236 and public housing----
--------- Jan. 5, 1973. 2. Nonprofit sponsor assistance--
Do. Programs terminated :
Effective termination date 1. College housing------
----- Jan. 5, 1973. 2. Community development programs:
(a) Open space land---
June 30, 1973. (e) Neighborhood facilities------
Do. (f) Urban renewal programs ---
(0) Rehabilitation loans.--------------------------3. Community planning and management programs:
(a) Community developmtnt training and fellowship
(6) Supplementary grants for new communities------ Do. Over $860 Million of funds and contract authority were impounded for the foregoing HUD programs which consist of $529 Million of appropriated funds and $331.1 Million of contract authority for Rent Supplements and Sections 235 and 236. In addition, there has been $712.882 Million of impoundments in the programs of the Farmers' Home Administration and the Rural Electrification Administration. These Presidential impoundments were part of a larger pattern of similar actions totalling $8.723 Billion in impoundments of appropriations for the Federal Government which does not include the additional amount (we do not have that total, except the housing figures stated above) covering suspensions or terminations of contract authority. A substantial part of these impoundments relate to social, housing, health and welfare programs, with particular deprivations among the underprivileged who most need help.
2. REDUCTION IN PRODUCTION OF HOUSING FOR LOW- AND MODERATE-INCOME GROUPS
As a result of the foregoing actions, during the fiscal years 1973 and 1974, there will be the following reductions in the program levels of housing for low- and moderate-income groups who cannot obtain decent housing without HUD assistance :
The total reduction in HUD-assisted housing production will be more than 50% in fiscal 1973 as a result of the Presidential suspension of these programs on January 5, 1973 and his impoundment of funds and contract authority. With the projected cuts in the President's Budget for fiscal 1974, the reduction in HUD-assisted housing production in that year will be 93%-in fact, the remaining 7% is a carry-over to fulfill commitments in the preceding year.
3. HUMAN IMPACT OF REDUCTIONS IN HUD-ASSISTED HOUSING PRODUCTION The human impact of these reductions is to deny fulfillment of the unmet needs for decent housing among people of low and moderate incomes. These are the groups who cannot afford decent housing without HUD assistance to reduce the housing charges to their financial reach. The budget cuts and impoundments were made without compassion for the poor or underprivileged who should have a priority in the allocation of Federal funds and resources.
By the end of fiscal 1974, only 1,680,000 units of assisted housing will have been built or started to meet the goal in the Housing and Urban Development Act of 1968. The ten year goal was to produce 6,000,000 units of housing for low and moderate income families. With four years remaining, it will be impossible to build the balance of 4,320,000 units. The stoppage of HUD-assisted housing has seriously jeopardized meeting that goal and fulfilling the commitment in the 1968 Act of a decent home and a suitable living environment for every American family.
With the reduction in the building of additional HUD-assisted housing, there will be a grossly inadequate supply of housing for those of low and moderate incomes. Since rent controls have been removed, the resulting scarcity will result in rent increases for existing unsubsidized housing. This will create serious hardships. It will contribute to inflation and an increase in the cost of living.
4. ECONOMIC IMPACT OF REDUCTIONS IN HUD-ASSISTED HOUSING The economic impact of the housing reductions is disastrous. On the cut in HUD-assisted housing commitments in fiscal 1974, they will result in total reductions in expenditures of over $18 Billion—as a result of the housing commitment cut of 422,000 units. This is the total of the following:
(a) direct expenditures for housing construction, land, and community facilities;
(b) indirect expenditures through the multiplier effect; and
(c) expenditures for related services such as taxes, interest, utilities, and operating expenses. There will be an estimated loss of over 2 million man years of employment.
As to the cut in housing commitments during fiscal 1973—which occurred with program suspensions in the middle of fiscal 1973—the economic impact will be $9 Billion in expenditures and 1 million man years in employment due to the housing commitment cut of 237,000 units. As to the cut of 659,000 units in HUDassisted housing commitments made during the 18-month period until June 30, 1974, the total economic impact will be $27 Billion in expenditures and 3 million man years in employment. These figures do not include the impact relating to the impoundments and budget cuts in the community development programs listed above.
The Administration claims that the economy is strong enough to withstand any adverse impact on it during the next 18 months. The Administration cites the figures on estimated starts on HUD-assisted housing and states that the level will be approximately the same for the fiscal years 1973 and 1974. The President's Budget contains the following comparison of HUD-assisted starts for fiscal years 1971 through 1974: Fiscal year 1971 (July 1, 1970 to June 30, 1971) actual.-------------- 388, 526 Fiscal year 1972 (July 1, 1971 to June 30, 1972) actual.-------Fiscal year 1973 (July 1, 1972 to June 30, 1973) estimate------
_ 275. 900 Fiscal year 1974 (July 1, 1973 to June 30, 1974) estimate------------- 239, 955
Housing starts in any fiscal year are different from the housing commitments made in that year. Thus, the housing commitments made in fiscal 1972 covered 452,922 units, but the starts were 338,526 units. The housing starts for fiscal 1973 will be 62,000 units less than in fiscal 1972 and 102.000 units less than in fiscal 1971. For fiscal 1974, the housing starts will be 98,000 less than fiscal 1972 and 148,000 less than fiscal 1971. This reduction in housing starts reflects the cut off in commitments due to the suspension of programs on January 7, 1973. This will have an adverse impact on the economy in fiscal 1973 and a more serious impact in fiscal 1974. In addition to the reductions in expenditures and employment due to the lower level of housing starts, there will be large reductions due to the stoppage of any project initiation, with all of the work and investments that would otherwise occur.