the funds overall are sufficient so that those cities which have been doing as good a job as they possibly can will continue to be supported, and not just held harmless and beyond that, to be enabled to do much more than they have been able to undertake under the categorical programs, such as urban renewal, and so on.

But we have to remember that in the bill as it is drafted there are requirements for a plan and a program-there must be a demonstration of need on the part of every city that wants to participate, even those who may be latecomers, and if they are latecomers, but they have deep problems, well, welcome to the club, it is high time they came in and started tackling these problems. So I think we should authorize more funds, and at the same time accept the fact that other cities which have been neglecting their problems should now be coming in.

Mr. MOORHEAD. Mr. Chairman, I have two more questions for Professor Schussheim, but I would like permission to submit them in writing, in the interest of time.

Mr. BARRETT. That may be done without objection.

Mr. MOORHEAD. May I conclude by saying that I thank all of you very much. I enjoyed the testimony, of course, with the exception of Professor Sternlieb's dire predictions, which unfortunately I have to agree with.

(The following are written questions submitted by Mr. Moorhead to Dr. Schussheim, along with Dr. Schussheim's answers:)

Question 1. Dr. Schussheim, for the record I'd like to get one thing clear with respect to the community development block grant title. The title lists a number of eligible community development activities which are similar to those now carried out under existing categorical grant programs. The existing categorical programs would be phased out and I think it should be made clear that the narrow restrictions and limitations that apply to these programs would not apply to activities carried out under the new block grant program. For example, rehabilitation activities such as those now carried out under the section 312 rehabilitation loan program would be eligible for community development assistance. This does not mean, however, that a locality would be subject to the limitations that now apply to the 312 program. It could, for example, provide 1 percent rather than 3 percent loans or even interest subsidies if it believed this the best method to encourage rehabilitation. Does this conform to your understanding of the title?

Answer. I agree with your interpretation, Mr Moorhead. The specific requirements and limitations of existing aid programs would no longer pertain. But the purposes of these programs, such as housing rehabilitation under section 312, could be financed by community development block grants. Localities would be freed of existing restrictions in devising appropriate means of dealing with urban problems.

Question 2. Dr. Schussheim, our panel III report on the community development block grant proposal points out that in approving a community's three-year plan of proposed activities, the HUD Secretary should assure himself that the community's plan would not result in the city exceeding certain reasonable levels of services and facilities. For example, if a reasonable level of library services is estimated at one library per 10,000 residents, and the city's plan would result in a higher level of library service, the Secretary should disapprove that portion of the plan and ask the city to use its funds in some higher priority areas. Do you agree with this concept of reasonable levels of services? And do you think the setting of such levels by the Secretary would start us down the road to excessive administrative regulation?

Answer. Some reasonable standards must be set. Otherwise it would be possible for a locality to utilize the funds in very inequitable or unproductive ways: for example, we would not want to enable a locality to provide a tennis court for every three families in one affluent section when there is an absence of play grounds or baseball fields in poor neighborhoods. For many public services there are fairly objective measures of adequacy which the Secretary could refer to in reviewing

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a proposed local program. These tend to be generous since they are set by the professional librarians, recreation associations, public works associations, and other similar groups. The Secretary could announce these standards in advance so as to avoid excessive intervention by Federal officials in the design of community development programs.

Mr. BARRETT. Mr. Reuss.

Mr. REUSS. Thank you, Mr. Chairman.
And I will be very brief.

Mr. Smith, I was interested in your colloquy with Congressman Moorhead just now, and in your statement that in an ideal world the Treasury would itself borrow at a much lower rate, because it would just be issuing Treasury securities for all the Federal borrowing for these agencies, and it would save the taxpayers a lot of money in the bargain. I agree with you. I would have this question, however. You expressed some disquiet about the reported Treasury proposal to somehow coordinate and channel all present and future agency issues through the Treasury on the ground, I thought you were saying, that maybe you couldn't really trust the Secretary of the Treasury not to strangle and shortchange some of these programs. If you have that fear, why would not that fear apply equally to the ideal that you were talking about; namely, where the Treasury does all the borrowing? I should think it probably would. But the way to eliminate the fear would be to appoint a Secretary of the Treasury who is not a narrowminded ribbon clerk, but a man who is apprised of his total duties.

Dr. SMITH. I think that is right. The Treasury has historically been very concerned with debt management and the cost of the debt itself-indeed that has come to be a natural Treasury inclination. I do therefore think there is a danger, however you handle it-whether you coordinate it through a financing bank, whether you coordinate it by having the Treasury do all the borrowing, or whether you coordinate it by having the Treasury approve all the individual issuesthat program objectives will be submerged in the interest of financing the Treasury's own operations at minimal cost.

Mr. REUSS. But the very best solution would be, one, centralize all borrowing in the Treasury; and two, have as the Secretary of the Treasury a man dedicated not just to the narrow technocratic job of debt management, but to the whole vast field of Treasury supporting activities.

Dr. SMITH. I agree with that.

Mr. REUSS. Mr. Brady, we are most grateful to you for coming here, and also for the lessons you have taught us in connection with your metropolitan communities. I had the privilege of being on the delegation that went up to Toronto a couple of months ago. We were very impressed with what you are doing.

In your testimony you vigorously supported both title 5 of the bill, which would set up State or metropolitan housing agencies to allocate housing subsidies, and title 7 of the bill, which would set up State or metropolitan development agencies to act as the public developers of projects. I don't see any inconsistency between those two concepts, both of which are in this bill. Do you see any conflict of interest or inconsistency between them?

Mr. BRADY. Mr. Reuss, as between any Government agencies, from time to time there is bound to be an honest difference of opinion. But I think that if the gound rules are clearly established at the be

ginning as to their functional responsibilities, there should be no great difficulty in having two agencies exist side by side and carry out their own respective and clearly enunciated responsibilities. It is important at the beginning, however, that their responsibilities be clearly established. And once that is done, I can't see any real difficulty.

Mr. REUSS. Thank you. And I am going to take advantage of my privilege of asking written questions. But I will quit now. Mr. BARRETT. That may be done without objection.

Mr. Minish.

Mr. MINISH. Professor Sternlieb, did I hear you correctly when you said that only 43 housing units were built in Newark in the last 3 months or to what period of time did you have reference?

Dr. STERNLIEB. Thirteen months.

Mr. MINISH. In the last 13 months?

Dr. STERNLIEB. That was 13 months ending in June of this year. Mr. MINISH. And what were they, do you know?

Dr. STERNLIEB. I do have a list of these, and I would be delighted to send it to you separately, sir.

Mr. MINISH. I would think, if you are talking about the Central Ward more than half of those were built by the Mt. Carmel Guild. Dr. STERNLIEB. I don't recall the specifications. I have a complete list of the demolitions and the new construction.

Mr. MINISH. Have you had an opportunity to look into the model cities program?

Dr. STERNLIEB. Just from the outside.

Mr. MINISH. You haven't seen very much, then.

Dr. STERNLIEB. No.

Mr. MINISH. I would think that the model cities program up there is going rather slowly. I recall, I believe it was in 1967, when the Secretary designated Newark as a model city, one of the first, and here we are about 4 years later, and not much has been done. It would seem to me that housing should be the first priority. But as of now I don't know of any housing that they have built up there. Do you know of any?

Dr. STERNLIEB. No. I think that we have had a good deal more in the way of verbiage than we have had in the way of hardware. I would defer, however, to Secretary Weaver, who is here, or to Mr. Brownstein, for more in the way of analysis as to who was responsible for what in terms of housing versus the social infrastructure. If I recall correctly-and I am a complete amateur as compared with the experts that we have here the original concept of model cities was more in the nature of a software program rather than a housing program. Obviously the two had to develop in parallel. But the precise responsibility for model cities in housing was relatively small. If I may be forgiven, Dr. Weaver.

Dr. WEAVER. I think that the whole idea of model cities was obviously a first national attempt to coordinate the physical and the social development of designated areas. And of course this was dependent upon a plan which would be developed in that area primarily where there is statutory requirement of citizen participation is making that plan. Now, as to the mix between software and hardware, this was not specified either in the act or in the legislative history, as I recall them. And this was to be determined on a case-by-case basis.

I think most of us anticipated that the earlier activity would be in the software area as far as results were concerned. But I certainly think that both this committee and the Congress felt that there would be in that planning stage consideration for an involvement in the hardware as well as the software, but the timing of results would probably be with the software coming first.

Second, of course, the model cities program, depending as it does upon some of the categorical grant programs that predated it, would have assumed that they would have continued to be operative, and that they would have produced the hardware hopefully coordinated with the software and hopefully coordinated in a model cities program. So I don't think there was quite the dichotomy that, for instance, Professor Sternlieb has suggested. But I do think that if you look at the model cities-and I unfortunately have not looked at the data, and I do not think they have been released-that you will probably find that the software has preceded the hardware as far as the results are concerned.

Mr. MINISH. Thank you. That is all.

Mr. BARRETT. Thank you, Mr. Minish.

All time has expired. We are very grateful for this distinguished panel here this morning. It has been most edifying, I am sure, to even the panelists. We are grateful for having you.

And if we have any charisma or magnetism, Dr. Weaver, we are going to use it and bring you back again.

Thank you very much, gentlemen.

All time has expired.

(The following written question was submitted by Mrs. Heckler to Mr. Brownstein, along with Mr. Brownstein's answer:)

Question. Mr. Brownstein, we enact proposed grant programs that encourage giant headlines. If I understand you correctly we issue insurance for we have the management personnel to staff such projects. Can we conceivably staff the projects unless we proceed at a slower pace?

As to counseling are we at times attempting too much, and too varied counseling, would we not be better off to start with the basic knowledge needed to preserve the property and the comfort of the tenants, and then proceed to the finer points of citizenship?

You are talking about allowing people who work in an area to live there. What about the people that don't work there?

Answer. In view of the critical shortage of housing for low and moderate income families, it is difficult to accept the premise of proceeding at a slower pace. It is recognized that competent counseling skills are essential and there is a need for developing additional resources. However, there are a number of groups which now are capable of providing this service and adequate funding would assure additional ones being supplied. There also are limits to what counseling can provide. I do not believe anyone suggests it will assure success but it certainly will enhance the chances for success. As to providing work opportunities for those who live in the area, this is certainly a desirable objective. However, this cannot be done to the exclusion of others and if training programs are provided for area residents it would be quite appropriate to others that participate as well. (The following written question was submitted by Mrs. Heckler to Dr. Schussheim, along with Dr. Schussheim's answer:)

Question. Dr. Schussheim, you say that we use the block grant approach to provide increased funds in the specialized block grant area. They get these funds if they use these programs. Now, there is considerable complaint about the performance of these block grant programs. Suppose, the communities are dissatisfied with the results of the block grant approach. They say we have our own ideas, our own approach which are particularly suited to what we regard as our needs. Here they are, approve if you do and supply and support, or if you disapprove, withhold support, until we have worked out our needs and you have established that we do or do not have good ideas.

Answer. The intent of title VI in H.R. 9688 is to give the localities much more flexibility in devising ways of handling their problems of blight, bad housing, and inadequate municipal services. But a locality cannot expect to have absolute freedom in the use of Federal funds. The Congress has laid down certain broad national goals, and a locality should not be given Federal monies if it chooses to ignore these goals. Under this block grant proposal, the Secretary would pay more attention to the purposes and results of the local programs, and would allow the locality wide latitude in developing imaginative local responses to the priority areas recognized by the Congress. Most localities have accepted these same priorities, so there is little likelihood of take-it-or-leave situations.

(The following written question was submitted by Mrs. Heckler to Mr. Kummerfeld, along with Mr. Kummerfeld's answer:)

Question. Mr. Kummerfeld, the present subsidy for housing involves currently between one and two thousand dollars ($1,000 and $2,000) a year. Are you proposing an increase in the current subsidy? If so how much? Or are you proposing a shift in the way that subsidy is directed? If that is the case, could you elaborate?

Answer. Title V does not change the existing subsidy amounts for low and moderate income housing at all. Subsidies under public housing, rent supplements and sections 235 and 236 housing would be the same at present. What is added in Title V is not higher subsidies for tenants and homeowners but grants to the communities to help them pay for added public facilities and services (schools, police, fire, health, etc.) sometimes associated with low and moderate income families. This new subsidy cannot exceed $3,000 per unit in total nor $500 per year. Furthermore, it should not have to be paid for all subsidized units, since in many areas additional public service costs are minimal or can be met from increased tax revenues from the property.

In addition, Title V authorizes federal grants to state and metropolitan housing agencies to help pay initial operating expenses and give them a small amount of money for local experiments in low and moderate income housing. These are modest amounts and won't greatly increase total subsidy costs.

Mr. BARRETT. The subcommittee will stand in recess until 10 a.m.; Wednesday, September 8, 1971.

(Whereupon, at 12:40 p.m., the subcommittee adjourned, to reconvene at 10 a.m., Wednesday, September 8, 1971.)