Mr. MICHEL. Are the Civil Service regulations vigorously adhered to in hiring practices in your shop? MS. OLIVAREZ. Oh, yes, sir. In fact, the Civil Service Commission has been very helpful to us as we develop our reorganization plan because we want to be sure that we are not adversely affecting employees who are already there. 1979 BUDGET Mr. MICHEL. The Director of OMB told us a few days ago when we had these overall budget hearings, that the administration would fight hard to achieve adoption of its budget figures. Does this include you? MS. OLIVAREZ. Yes, sir. I consider myself part of the administration. Mr. MICHEL. Would you oppose vigorously any increases the Congress might award your shop? Ms. OLIVAREZ. It depends on the process. Mr. MICHEL. Why don't you supplement that answer, why you would support some increases, and maybe you would support some decreases. MS. OLIVAREZ. Fine. [The information referred to follows:] The question was whether our agency would oppose vigorously any increases the Congress might award our shop. The Community Services Administration has delivered its budget request and justification to the committee and we stand by it. After the Congress has passed an appropriation, the Administration will consider it for signature, veto or a combination under the Budget and Impoundment Act. If increases are awarded our agency through this process, we will accept them and utilize the funds according to the intent of Congress and the President. In the interim, I and the agency will oppose any changes in our budget request. Mr. MICHEL. I do find it a little amusing that in your statement you mention a commitment by the President to a vigorous new effort to combat poverty, and then state that the requested $538 million is the highest in six years, but in reality the President's budget calls for a 10-percent reduction in CSA expenditures, does it not? MS. OLIVAREZ. It is because we transferred the weatherization program, which was a large chunk of money, $55 million. Mr. MICHEL. That is what makes up the change? MS. OLIVAREZ. That is the principal component of the reduction. Mr. MICHEL. Then do I understand everything else has some measure of increase? MS. OLIVAREZ. With the exception of nutrition and economic development. The SEOO's were decreased. ECONOMIC DEVELOPMENT Mr. MICHEL. I want to have some good solid argument for reducing that economic development program by 50 percent. What is your argument for that? Ms. OLIVAREZ. As you know, the economic development program has had its ups and downs. It was very loosely administered in the Washington office. There were no standards of performance. The monitoring and the implementation of the rules and regulations was, again, sometimes strong and sometimes not. As of today, I understand that we have done away with a number of unsuccessful ventures, and we are in the process right now of strengthening the ones that we feel are really going to fly on their own. Because we found that the program had never received the kind of supervision and the kind of administrative support that it should have had, we felt that if we could take a year off to really assess what we had done and to find out what did work and what did not work, we would be able to then come back with a stronger program. At that time we would be willing to ask for enough funds to implement it. Mr. MICHEL. But there is still going to be a program per se? MS. OLIVAREZ. Yes, sir. Mr. MICHEL. You say the reason it was no good was because of bad management. Then we look at the figures with respect to staff, and the staff is down. I am going to be the last one from this side of the table who says: Hey, put on more people; that automatically gets you a better program. No. But the natural question that arises, well, if the program basically is good but lacks good supervision or monitoring, does it not follow, by gorry, you say, "I am going to put some good management people in the spots; we are going to increase the monitoring"-something of that degree Mr. ALLISON. Mr. Michel, I would like to say there are two elements we think are important here. One the Director has already commented on. That has to do with our own management capability, which we are obviously concerned about. But in a very large sense, the real test of the CDC's success or failure has to do with the management capabilities of the CDC's themselves. If you review the ones that have not done very well, in large measure it is a reflection of inability of those communities to attract the kind of people to run good solid programs. I have been looking at it myself very carefully. Notwithstanding whatever we do here, if we do not have the people in the field, we are not going to have the results. LOCAL INITIATIVE Mr. MICHEL. I see that your budget calls for a $12 million increase for local community action agencies, and I think that represents a 3-percent increase, which is well short of the increase in the cost of living. Why wouldn't the budget at least reflect the increase in the cost of living? Ms. OLIVAREZ. When you consider over the period of 1978-79 the increase in local initiative is $51 million, $39 million in 1978 and $12 million in 1979, I think $51 million over a 2-year period would give us enough flexibility to handle the cost of living increases. Mr. MICHEL. I won't argue with the figure as such, but I know that this committee and the Congress say: Hey, the cost of living has gone up 5 or 7 percent, and you do not even account for that just with a no-growth policy. That is the kind of argument we are going to be confronted with. That is why I raise the question. You may want to expand a little on your answer. [The information referred to follows:] An expansion of the previous answer could only relate the $51 million 2-year increase requested in this budget as a percentage of the $330 million level of funding in the previous 8 years. Constituting a 15-percent increase over the 1978-79 period, this request offers community action agencies the flexibility necessary to better meet local needs at the neighborhood level. On the other hand, community action agency employees begin as volunteers, are then paid part-time and then are hired full-time at the minimum wage. Increases in the minimum wage, social security, or other uncontrollable costs, such as energy, will remain a problem. Mr. MICHEL. Does this mean the CAAs, particularly the larger ones, may not receive any increase? MS. OLIVAREZ. No, sir. In 1979 it would, but it would not in 1978. ENERGY CONSERVATION Mr. MICHEL. The administration endorsed a $200 million supplemental to pay fuel bills for the poor this winter, but your budget does not contain any funds for this purpose next year. Why this year and not next year if it is that good a program? Ms. OLIVAREZ. We and the Department of Energy are doing the weatherization program. We feel if we do an adequate job of weatherization, that automatically would help reduce the fuel bills and the expenses for fuel bills. In addition to that, we are now engaged in additional experimentation with solar energy units, small units for low-income houses, that will supply up to 30 percent of the heat necessary in some of the low-income housing. The idea of no request for $200 million in 1979 is that it is hoped that we will be doing a good job of preventive work rather than remedial. Mr. ROLLIS. In addition, the President's- Mr. MICHEL. Isn't it really true all he is really doing is trying to improve his overall budget posture? The whole thing is just phony. You go before a press conference, tell them how lean everything is, and you leave out items like this that you believe are good programs and you want to continue, and they are not even in the budget. The two figures just don't square. Mr. ROLLIS. Except that HEW under Title IV is coming in for $150 million to do exactly that. So we took it out of CSA but it is back at HEW. Mr. MICHEL. All right. This, of course, is really the first time this whole subject of fuel subsidies has come before a hearing in the House. All we have had are amendments coming out of nowhere on the floor of the House and suddenly we have to appropriate $200 million because somebody has a problem paying their fuel bills. Mr. Chairman, I know we are under a limitation of time here. I want to ask a series of extensive questions in this subject area. I would be glad to yield at this point so when that line of questioning does come it is uninterrupted. Thank you, Mr. Chairman. Mr. FLOOD. Mr. Patten. Mr. PATTEN. If you are going to have $10 million for the weatherization- MS. OLIVAREZ. No, $10 million for energy-type activities within CSA. Mr. PATTEN. You say you reached 1 million people last year? Ms. OLIVAREZ. That was the special $200 million appropriation. Mr. PATTEN. You are not going to reach that amount of households with $10 million. That would be about $1.50 a house. MS. OLIVAREZ. But the major appropriation is in the Department of Energy. Mr. ROLLIS. The $200 million reached 1.06 million, and the $10 million that we have here would conduct a very much different effort. We actually spend about $50 per family but it would be much less extensive. The crisis intervention proposal the administration has is $150 million, and that would correspond to the special crisis intervention program of last year. That program we would continue in 1979 is family by family through the community action agencies rather than an entitlement program spread across the country. Mr. PATTEN. I know how that worked in my district. Will there be anything in the 1979 budget? Ms. OLIVAREZ. It is in 1978 but not in 1979. Mr. PATTEN. Coming back to 1978, I got lost as to how much money you have left. I think New Jersey spent it all, and Massachusetts. Mr. ALLISON. Most of the Northeastern States have done so. Mr. ROLLIS. There is an additional $200 million in the appropriation currently before the House and Senate that has been held up in conjunction with the B-1 bomber dispute. Mr. PATTEN. I saw the program work, but in a short time there were no more applications. That was very early before people were educated. We worked hard, we wrote to poor people that we knew, widows, we worked very hard on it because it was for real. They were broke, and their gas and electric was being shut off, but we were told early on there was no more money left. Ms. OLIVAREZ. The need was much, much greater than the appropriation. Mr. PATTEN. I have nothing further. Mr. FLOOD. Mr. Obey. Mr. OBEY. Thank you, Mr. Chairman. LOCAL INITIATIVE I have a series of questions. I would appreciate it if you could answer them as quickly as you can and then fill in for the record. Under the local initiative budget category, what percentage of the funds goes to employ workers in various service projects? Mr. ROLLIS. Community action agency projects? Mr. OBEY. Yes, and what percentage goes for administration. MS. OLIVAREZ. Let me start out by saying that local initiative money is responsible for the employment of 38,000 people around the country, paid for directly by local initiative money. Seven percent of their budget goes for administration. Of our money, 24 percent of the community action agency funds go to administer the various programs, especially those of other agencies. Mr. OBEY. So it is a very labor intensive operation? MS. OLIVAREZ. Yes. Mr. OBEY. How many jobs are there, did you say? MS. OLIVAREZ. Thirty-eight thousand that are funded directly with CSA funds. Now the money that is generated Mr. OBEY. That is all I am asking. Just that figure. Do you want to describe what types of jobs these are very briefly? MS. OLIVAREZ. We have outreach workers, although there are not enough. We have bookkeepers, accountants, receptionists, secretari 25-260 (Pt. 7) 0-78-3 al staff, managers, planners, social workers, and in some instances attorneys, community organizers. But the kinds of jobs that we have are principally outreach worker jobs that traditionally lowincome people can be brought in to take. Mr. OBEY. Do any of these people help with the delivering of food programs for elderly people? MS. OLIVAREZ. Yes. In fact, our SOS money hires elderly people to a large extent. Mr. OBEY. What percentage of those jobs are directly related to performing services for people as opposed to those that are basically administrative in nature? Mr. ROLLIS. The same percentage that we enumerated before, 7 percent administrative, 93 percent program. Mr. OBEY. What is the per unit cost of the jobs funded under local initiative? MS. OLIVAREZ. Approximately $7,100. Mr. OBEY. What is the salary for entry level positions? Mr. ROLLIS. Minimum wage. Mr. OBEY. What does that amount to on an annual salary basis? Just put that in the record. [The information referred to follows:] At 2,080 hours, the minimum wage in 1977 of $2.30 would amount to $4,784 in a year. The increased 1978 minimum of $2.65 would amount to $5,512. Mr. OBEY. What is the amount or percentage of administrative or overhead costs involved in the operation of Community Action Agency? Mr. ROLLIS. That was the 7 percent. Mr. OBEY. Would there be a need to increase administrative costs in order to increase the number of jobs within a local community action agency, assuming the jobs are entry level positions? Mr. ROLLIS. Not administrative costs. Mr. OBEY. Not at all? Mr. ROLLIS. It could be. Mr. OBEY. But it would be a small amount? Mr. ROLLIS. Yes, sir. Mr. OBEY. So it would still be possible to create additional community action agency jobs at a per unit cost of around $7,000 or a little above? MS. OLIVAREZ. Not in each state. With the increase in minimum wage, I would say what we saw last year at $7,100 would probably be $7,900, given the increase in minimum wage. With the increase in local initiative funding, by the way, Mr. Obey, we anticipate creating an additional 3,500 jobs as a result of the $39 million increase in local initiative funds. Mr. OBEY. How many new jobs-and I know this is tough to estimate do you think it will be possible for the community action agencies to create and absorb within existing programs or by expanding the programs? Mr. ROLLIS. I am not sure. Mr. ALLISON. Because of the nature-you have urban and rural community action agencies. Mr. OBEY. I understand. But could you give me an estimate? Would it be 5,000? 20,000? a million jobs? |