Mr. BLUNT. If you would like me to supply for the record the fluctuation in GS-13's in 1971 and 1972, I would be more than happy to provide it. In fact, in all of the GS-levels in our agency there has been à consistent reduction. In 1972 it was no exception.

STAFF REDUCTIONS IN 1973

As a matter of fact, between 1972 and 1973 we went from 870 to 672. I don't know the proportionate reduction in GS-13's, but I am sure it is there.

Mr. SMITH. In terms of getting work done it seems to me this is not the usual schedule of grades and ranges we see coming through this committee from various other agencies.

Mr. BLUNT. I understand.

PEAK PROGRAM LEVELS

Mr. ANDREWS. I checked up on this program money. You testified that the highest funding year was $235 million. The clerk checked it. In 1972 you had $260.8 million. In 1973 you had $271.5 million.

Mr. BLUNT. You asked us when our manning level was the highest. We gave you the year, 1971.

Then you asked how much program funds we had in 1971. We told you $230.8 million.

Mr. ANDREWS Let me rephrase the question. In 1973, when you did a business of $271 million

Mr. BLUNT. Total in 1973 according to my information is $301.5 million.

Mr. ANDREWS. All right. At that point how many people did you have on board?

Mr. BLUNT. 672 at the end of the year.

Mr. ANDREWS. So for $301.5 million you got by with 672. Now to do $230 million worth of business, about two-thirds as much, you want an increase of 12 to 14 percent.

Mr. BLUNT. In 1973, the year in question, it was the year when we had expended in the neighborhood of $40 million of public works funds and some $10 million of technical assistance funds in response to Hurricane Agnes.

In addition to our permanent personnel, who were stretched very thin, and deserved every kind of commendation and worked oftentimes 15 to 16 hours a day during the course of this disaster, we had a large number of temporary personnel helping. We also had people assigned from other agencies.

Mr. ANDREWS. Then in that event, in 1972 what was your total program level?

Mr. BLUNT. $260.9 million.

Mr. ANDREWS. How many people did you have on board then?

Mr. BLUNT. 870 at the end of the year.

Mr. ANDREWS. In 1967 what was the total funding level, to get figures from another administration?

Mr. BLUNT. I will be happy to provide that for the record.

Mr. ANDREWS. I understand that was some $277 million. What was the number of permanent positions then?

Mr. BLUNT. I will have to supply it.

[The following information was provided:]

The actual employment on June 30, 1967 was 966.

Mr. ANDREWS. I would like that to be provided for the record so we will be able to evaluate the workload level.

I think it is also important to point out, because of the inflationary trend and all of the rest of it, that in the case of these permanent positions, not only is the number of positions increasing, but the pay per position is sharply up, so the total amount we are spending for processing is not directly related to the number of positions.

In the 1975 table 166 people were included, at $5,709,000, as against last year's 146 people at $4,521,000, so the pay per position is up sharply as well as the number of positions.

Mr. BLUNT. For what it is worth, the average grade over the last 3 years has been about the same. There have been a number of pay increases enacted by Congress, I guess recommended by the President as well, which have made the cost per person to all agencies as far as I know considerably higher. I cannot say I deplore it because I think they earned the money but that is something we have no control over. Mr. ANDREWS. The point I am drawing is that the ratio of dollars for staffing versus dollars for grants and loans is increasing at an even more pronounced level in the dollar versus dollar category than staff positions versus dollars.

Mr. BLUNT. Maybe what I should say is that the reason for the difference in relationship between the staffing level and the dollars to pay for the staff, putting aside their relationship to program dollars, one reason the dollars become higher is because of these increases.

GOVERNMENTWIDE REDUCTIONS

Mr. WYATT. I want to refer back to Congressman Smith's line of questioning. You are asking for an increase of about 25 percent in personnel for administration.

Mr. BLUNT. Yes, sir.

Mr. WYATT. Do I understand the substance of your testimony to be that this increase has been approved by the OMB during the time they were aware of the President's announced determination to reduce Federal employment by approximately 40,000 bodies?

Mr. BLUNT. The best way I can phrase that is this: The request, when and if it arrives, and I assume it will arrive soon, will have been approved by OMB at some time after the President made his announcement. However, I also assume that any manning level and any amount of money spent for operations or programing is subject to constant review by the President and by OMB and that if the Office of Management and Budget in relationship to the job which has to be done feels that people can be spared from this agency they will take them, and take them with my blessing. Therefore, I don't think any action you take here will foreclose a review in light of the inflation and also in light of the efficiency of the agency regarding the number of people on the working force.

Mr. WYATT. You can appreciate our situation. We want to cooperate with the President. What we do is in connection with his effort to control inflation. It is important that we know exactly whether this is in process so we can have some input regarding the end result. Mr. BLUNT. I understand perfectly.

Mr. SLACK. If there are no further questions, we thank you, gentlemen.

SUBCOMMITTEE ON DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES APPROPRIATIONS

JOHN J. McFALL, California, Chairman

EDWARD G. JORDAN, PRESIDENT

ALAN L. DEAN, VICE PRESIDENT FOR ADMINISTRATION

JAMES A. HAGEN, VICE PRESIDENT FOR OPERATIONS AND FACILITIES PLANNING

RICHARD C. SULLIVAN, VICE PRESIDENT FOR PUBLIC AND GOVERNMENTAL AFFAIRS

DOUGLAS L. SIEGEL, ACTING GENERAL COUNSEL

WILLIAM H. BOZMAN, COMPTROLLER

Mr. McFALL. The committee will come to order.

We will start our supplemental hearings with the United States Railway Association.

We have with us a number of witnesses headed by Mr. Jordan, president; along with our old friend Alan Dean, James Hagen, Richard Sullivan, Douglas Siegel, and William Bozman.

Do you have a statement, Mr. Jordan?

Mr. JORDAN. Yes, sir.

Mr. McFALL. It is a rather comprehensive statement. Could you summarize it for us, and then we will place your prepared statement in the record? Or, if you think it is necessary, you may read the entire statement.

Mr. JORDAN. If I may, I would like to read the entire statement on the presumption that this is perhaps the first time the committee has had an opportunity to hear from the association in its own behalf. Mr. McFALL. All right.

STATEMENT OF THE PRESIDENT OF THE UNITED STATES RAILWAY

ASSOCIATION

Mr. JORDAN. Mr. Chairman and members of the committee, I appreciate very much the opportunity to appear before you in support of a supplemental appropriation request from the United States Railway Association. The association has had $18 million made

available to it and our current request for an additional $8 million will give us a total of $26 million. This is the full amount of the administrative expense authorization for USRA in the Regional Rail Reorganization Act.

The association was created by Congress for the purpose of preparing and implementing plans for restructuring and rehabilitating the bankrupt railroads of the Northeast and Midwest. It came into being on February 1, 1974, as a nonprofit corporation under the laws of the District of Columbia. The Secretary of Transportation, the Secretary of the Treasury, and the Chairman of the Interstate Commerce Commission acted as incorporators and as the interim board of directors. I was named president of the association by the board of directors on March 18. The appointment of the non-Government members of our board took effect on July 11 and the chairman of the board, Arthur D. Lewis, took office on July 23. Biographical data on members of the board and all officers of the association are being submitted for your information and for the record.

The Regional Rail Reorganization Act was enacted because cessation or significant curtailment of essential rail services was threatened for a major section of the Nation. USRA's mission is covered. succinctly in the act which charges it with:

1. The identification of an adequate rail service system for the Northcast and Midwest; and

2. The reorganization of railroads in the region into an economically viable system.

The statutory mechanism for achieving these purposes is the development by USRA of a final system plan. In this connection, the act specifies a number of assignments for the association including:

1. A survey of existing rail services and patterns of traffic movement, including costs, revenues, plant, equipment, and facilities; 2. The study and analysis of present and future rail service needs, the nature and volume of rail traffic, the potential of alternate modes of transportation, the relative economic, social, and environmental costs for various modes;

3. A study of the scope and quality of rail passenger services in the region.

In carrying out these assignments, the act charges us to consider the views of all Government officials and other interested persons specifically those testifying before representatives of the ICC's Rail Services Planning Office. We are also to consider methods of achieving economies in the cost of rail system operations through such measures as joint use, consolidation or pooling of facilities and equipment; the rehabilitation and modernization of equipment and facilities; and the abandonment of lines. Finally, we are required to consider the effect of any restructuring on railroad employees. The end result of these extensive and complex surveys, studies, and analyses is to be the formulation of a final system plan for the creation of adequate and financially self-sustaining rail services in the region.

The Regional Rail Reorganization Act also provides for a Rail Services Planning Office as part of ICC and directs it to solicit, study, and evaluate the views of Governors, mayors, shippers, consumers, and all other interested parties concerning present and future rail service needs in the region.

The legislation gives authority to the Secretary of Transportation for certain types of financial assistance to railroads in reorganization. These include emergency assistance of up to $85 million to assure continued provision of essential rail services and up to $150 million to help these railroads acquire, maintain, or improve facilities and equipment expected to be part of the final system plan. USRA approval is required for the latter. The Secretary is also authorized to provide financial assistance to States in the region for the purpose of rail service continuation subsidies on a 70-percent Federal-30percent State matching basis. The sum of $180 million for a 2-year period is authorized for this purpose.

The association is directed to establish a for-profit, non-Government corporation which will acquire, operate, rehabilitate, and improve rail properties designated as part of the final system plan. The corporation, to be known as the Consolidated Rail Corp., or Conrail will issue common stock in exchange for the rail properties of railroads in reorganization.

In addition to the $26 million administrative expense authorization for the association, it is empowered to issue obligations guaranteed by the Secretary of Transportation of up to $1.5 billion. One billion dollars is authorized to be issued to Conrail, and half of this amount is available solely for modernization and rehabilitation of Conrail properties. The portion not issued to Conrail would be used for loans to Amtrak for improved high-speed rail passenger service, loans to Conrail or other railroads in the region to assist in implementing the final system plan, loans to State or local transportation authorities to maintain local service on uneconomic lines, or loans to any railroad which connects with a railroad in reorganization.

The act makes special provision for the protection of railroad employees affected by any restructuring or consolidation. The act authorizes appropriations of $250 million to cover the costs of the allowances and benefits that may be provided to displaced employees of railroads in reorganization. The administration of these employee protection provisions will be primarily a Conrail responsibility.

Returning now to the primary function of USRA, I would like to describe briefly the planning process and the timetable prescribed for it. The goals of the plan we are to develop are given in the act as: (1) The creation of a financially self-sustaining regional rail system.

(2) The maintenance of a rail system adequate for regional rail transportation needs:

(3) Improved high-speed rail passenger service over the Northeast corridor.

(4) The preservation of services for coal transport; and the use of transport modes that are most efficient in the use and transportation of energy resources.

(5) The promotion of rail and intermodal competition.

(6) The maintenance of desirable environmental standards.

(7) The efficient and safe movement by rail of passengers and freight.

(8) The minimization of job losses.

Obviously these goals are not capable of individual maximization. USRA's task will involve a reasonable balancing of priorities which