provides for approximately 50,000 jobs in areas where the unemployment rate is 6.5 percent or higher. Since January 1975 an additional 260,000 public service jobs have been funded under title VI as a temporary measure to help alleviate the effects of high unemployment.

As I indicated in my earlier statement, the $1,700 million supplemental for 1976 will continue nationally most of the 260,000 jobs through calendar year 1976, with a gradual 9-month phaseout beginning in January 1977. This phaseout proposal is consistent with the general expectations of the pace and direction of economic recovery and anticipates continuing improvement which will allow participants to obtain regular jobs in the private or public sector.

Most of this supplemental will be used in areas of high unemployment, that is, areas with an unemployment rate of at least 6.5 percent. Nearly all of the temporary public service jobs under the title VI program are in prime sponsor areas which include these high unemployment areas. Areas with lower unemployment rates will be phased out earlier as their ability to provide for these individuals is greater.

The $400 million requested for 1977 will provide for the continuation of the 50,000 jobs in the permanent title II program during fiscal year 1977.

About one-half of these public service jobs have been created in public works and transportation (22 percent), education (15 percent), and law enforcement (12 percent). The remaining jobs were distributed in such areas as health and hospitals, environmental quality, parks and recreation, etc.

NATIONAL PROGRAMS AND PROGRAM SUPPORT

The fiscal year 1977 request for national programs, the second budget activity in this request, is for $414,330,000 a net increase of $6 million over 1976. This total includes:

$175 million for the Jobs Corps,

$113,760,000 for Indian, migrant, and seasonal farmworker programs, $83,200,000 for other special target group programs, and

$42,370,000 for program support activities including research, demonstration, evaluation, labor market information, and training and technical assistance.

The net change of $6 million is for special target group programs.

The Job Corps will provide an estimated 20,500 years of training to enrollees at 60 Job Corps centers in 1976 and 1977.

Through the end of November, 145 designated Indian prime sponsors grants were awarded or renewed totaling $50,148,000. Over 50,000 Indian and other Native Americans are expected to be served by these grants.

A total of about 64 migrant and seasonal farmworker grants will be awarded or renewed starting in January 1976. It is anticipated that about 140,000 individals will be served by these grants.

Other special target group programs will provide additional employment and training services to special emphasis groups through activities such as minority group skill training, offender programs, SER, OIC, and trade adjustment assistance. The $6 million increase for special target group programs will provide for the continuation and expansion in 1977 of the pilot school-to-work programs for school-age youth initiated in 1976.

SUMMER YOUTH EMPLOYMENT PROGRAM

A program to provide jobs for economically disadvantaged youth aged 14 to 21 during the summer months is now included in this budget for 1976 and 1977. A preliminary estimate of $440,300,000 for the 1976 program will support approximately 740,000 9-week part-time summer jobs at the new minimum wage of $2.30 per hour. This proposed level is approximately equivalent to the level of effort provided in the summer of 1975, allowing for an improvement in the unemployment rate for youth. The preliminary estimate for the 1977 summer program is $400 million which would provide 672,000 jobs. This program provides part-time summer jobs in various organizations, including schools, hospitals, libraries, community service organizations, and private nonprofit agencies. Supplemental budget requests for the summer program will be formally transmitted to the Congress as soon as data on the projected level of youth unemployment and other relevant economic factors become available, which is usually early March of each year.

To conclude, I feel that our 1977 request for employment and training assistance in addition to the 1976 pending supplementals will provide sufficient resources at this time to meet our employment and training needs through the end of fiscal year 1977.

This concludes my statement, Mr. Chairman. My staff and I will be happy to answer any questions you may have.

CETA "WORK EXPERIENCE" PROGRAMS

Mr. FLOOD. Under title I of CETA, what is this "work experience"? How do you define that? Can you give us some specific examples?

Mr. HEWITT. Under preceding legislation, there were several categorical programs which were called work experience. The Neighborhood Youth Corps is probably the best example where young people, after school, or people out of school on a nearly full-time basis, were provided jobs at essentially the minimum wage, mostly on public account, but they weren't prevailing rate jobs like public service employment, so they could get some experience as well as guidance and counseling on the job, actually doing a piece of work.

Mr. FLOOD. Why are the prime sponsors spending almost $800 million a year on work experience programs?

Mr. HEWITT. The general explanation, sir, as nearly as we can supply it, is that they are leery of doing hard skill training during the recession and not having the available job to refer the individual to when they complete their training. It is a training activity that will sustain people and provide them with some developmental experience, but it wouldn't be like completing a course in welding for 20 weeks and then be on the street looking for a job.

Mr. FLOOD. Do people get any lasting benefits from participating in this work experience program, or is it just another form of income maintenance?

Mr. HEWITT. My area of responsibility includes program evaluation. It would be my judgment that the lasting benefit was marginal to the individual.

SKILL TRAINING

Mr. FLOOD. What efforts, if any, are you making to expand then the occupational and the skill-these skill training programs? What are you doing about that?

Mr. BURDETSKY. We are encouraging the prime sponsors to put more resources into skill training. Both institutional skill training and onthe-job training. As the economy comes back and the private sector gives evidence of needing workers, there is a placement potential that will be developing, and we are encouraging prime sponsors to move in that direction.

CLASSROOM TRAINING

Mr. FLOOD. What are the main kinds of classroom training programs that are being conducted under CETA?

Mr. JONES. There are probably two general categories. Some of them are what you would call firstline, secretarial, or clerical kinds of things and others are far more technical, such as welding, run by Vocational systems within the States.

Mr. FLOOD. Are these classroom training programs being coordinated with any degree of success with vocational education programs

being conducted all over the country? Are they coordinated with them?

Mr. JONES. The law requires such coordination, and some of these funds go directly through the vocational education system.

In our surveys of local prime sponsors' training, you will find almost without exception they are tied into the local school system and State vocational system, in determining what training is available, what are the needs, and in most cases they are the ones delivering and directing the program.

That is probably one of the more successful parts of the program, in that we are providing training in the skills that are needed in each particular area.

MISUSE OF CETA FUNDS

Mr. FLOOD. Has the misuse of any of the CETA funds for political purposes been a serious or a major problem so far?

Mr. BURDETSKY. There have been a few very highly publicized instances, one in my hometown of Philadelphia.

Mr. FLOOD. A significant problem?

Mr. BURDETSKY. I don't think it is significant. The few cases have gotten a lot of publicity, but overall it has not been a big problem. Mr. FLOOD. How do you oversee this CETA operation to make sure the funds are not misused?

Mr. BURDETSKY. There are a number of mechanisms. We have 10 regional offices where we have field representatives who work very closely with and observe and monitor and follow up the work and activities of the prime sponsors. They are right there on the scene. You also have a great public interest. You have planning councils composed of people representing the community at large, business, labor, education, who have a say-so in what is to be done and how it shall be done.

There is also a system of publishing in the newspapers program plans and program activities which the public has a right to see and observe and I think, too, the community groups that are very much concerned about how these programs are going are very much alert to the politicization in any aspect.

Mr. FLOOD. You have no widespread cases?

Mr. JONES. We have a few very specific instances but on a national basis you will find the incidents of the participants involved in that kind of activity is very insignificant.

CETA WAGE RATES

Mr. FLOOD. How much are title I enrollees paid for participating in training programs?

Mr. JONES. Those people who are in the training programs receive an allowance that is equitable to the minimum wage, depending upon the number of hours they are in training.

SUPPORTIVE SERVICES

Mr. FLOOD. What kind of supportive services do they also get in addition to basic pay?

Mr. JONES. They have complete flexibility at the local community. level to provide services. Day care, medical, health, transportation, counseling, or other services as necessary.

LENGTH OF TRAINING

Mr. FLOOD. How long does the average person remain enrolled in title I?

Mr. JONES. We haven't figures on the average length of stay. It is far too variable depending on the structured length of each case. Most of them have a specific time.

DEMAND FOR PEOPLE COMPLETING TRAINING

Mr. FLOOD. Are these people being provided with useful, salable skills? Is there a demand for them? Is there a demand for them when they complete that training?

Mr. JONES. The system set up with prime sponsors provides for two or three checks on that point. In the planning of the program they must undertake surveys of the community and create classroom training situations which relate to the industrial needs or the job availability in that area.

They work with the employment services and State vocational institutions to determine the needs and there is a direct relationship. As Mr. Burdetsky pointed out, the members in the business community are on the planning council and relate to the needs in those areas. Í think it is fair to say they are definitely in areas that provide them with a marketable skill when they come out of the training institution. Mr. FLOOD. Do you have any figures on the percentage placed in full-time, permanent jobs?

Mr. JONES. I believe we have some figures on that. I will point out at this time we have barely completed 1 year of program activity in title I, so it is really very early to tell.

Mr. FLOOD. Could you give me an educated guess and for the record nail it down?

Mr. WALKER. Approximately 63 percent of our people either are placed in a job or return to school or some other kind of what we call positive termination; 32 percent are actually placed in full-time jobs.

TITLE I REQUEST

Mr. FLOOD. You are asking for $1,580 million for title I. Now, by the way, that is the same amount that we appropriated last year. Now, when you allocate these funds for 1977, will there be a shifting of these funds among the prime sponsors?

Mr. HEWITT. As you know, Congressman, there is a formula in the statute and it provides for a 90-percent "hold harmless" of the prior year's allocation so it can't be more than a 10-percent reduction with the same appropriation level in any given prime sponsor's jurisdiction. There will be some shift as the full formula takes effect in 1977. That, combined with variations in the amount of unemployment that a prime sponsor has, compared to the country as a whole, and the amount of low-income adults that reside in that jurisdiction, those can introduce changes in the allocation from year to year among the prime sponsors, but they are muted by the 90-percent hold-harmless position.

TITLE II REQUEST

Mr. FLOOD. When do you intend to obligate the $400 million asked for under title II in 1977? By that I mean, at what point in the fiscal year?

Mr. JONES. We would do that based on these two points. It is based on allowing the prime sponsor enough time to plan his program and yet use the latest unemployment data available to us.

I would estimate that money probably will be allocated some time around June or July. Assuming funds were appropriated by October 1, we would expect to obligate them in early October.

Mr. FLOOD. How much of the $400 million will actually be expended in fiscal year 1977? I am talking about outlays now.

Mr. JONES. Virtually all of the $400 million.

Mr. FLOOD. Does the administration regard title II of the program as being more or less permanent? That is the phrase a lot of people use. I don't know how you can be more or less permanent.

Mr. BURDETSKY. It is the permanent part of the legislation

Mr. FLOOD. I borrowed that habit from you.

What did you say?

Mr. BURDETSKY. It is a permanent part of the CETA legislation.

TRANSITION TO PERMANENT JOBS

Mr. FLOOD. Now, what steps is the Labor Department taking to be sure that the title II enrollees are making a transition to regular, permanent employment? What has the Department done about that?

Mr. JONES. During this past year those efforts have not been a key focal point with unemployment rates being as high as they are, but as they are starting to come down now, a major part of our emphasis is being placed on transition. When the prime sponsors come in with their plans, we ask specifically in what number and where these people will be transitioned to.

Mr. FLOOD. I know the problem, but the situation being what it is, can we take for granted that you will pursue this?

Mr. BURDETSKY. Absolutely.

Mr. FLOOD. On the average, how long do people remain in these public service jobs? What has been your experience to date?

Mr. JONES. Our experience to date is it is a little difficult to deal with that in that we have only been there about a year and a half with those people and it is too early to predict a turnover rate and I wouldn't want to guess.

Mr. FLOOD. Not even an educated guess?

Mr. JONES. I would expect on an annual basis, looking to our past experience, that the figure probably will run something like 9 to 10 months out of the year, but that is purely my own guess. I think it will take another year before we have a sufficiently large basis upon which to predict that number.

MAINTENANCE OF EFFORT

Mr. FLOOD. What are you doing about the so-called maintenance of effort problem? How do you enforce that?

Mr. JONES. The maintenance of effort problem is probably the most difficult problem we have in administering the program. Essentially