An example of this is, in our opinion, the situation which has resulted on the New Haven Railroad. The Federal Government guaranteed loans to assist this railroad over the last 10 years in an amount totaling over $50 million. During this period, about $25 million has had to be paid under this guarantee, while it is only recently that the localities and States have begun to come to grips with the urgent problems involved in the commuter operations of this railroad.

Our second reason is closely related to our first. Operating subsidies, and especially those continuing for more than a short emergency period, require very close involvement in the operating details and policies involved in commuter or other mass transportation service. This is particularly true with reference to the establishment of proper fare and wage levels. We consider this an area

in which the Federal Government should not become involved. Indeed, we doubt that the localities themselves would wish us to become involved even if they were to receive Federal funds in the process.

We would find certain provisions in S. 2804 particularly troublesome. The proposed 10- to 15-year subsidy period would in our opinion extend far beyond any "emergency" type assistance. Such long-term assistance would be particularly unjustified if conditioned, as S. 2804 proposes, only upon a "commuter service improvement plan" rather than on areawide comprehensive planning and programing requirements such as those applicable in our capital grant program. The "commuter service improvement plan" would apparently apply only to the particular company being assisted and would not assure proper coordination between it and other local mass transportation service. Neither would it assure that the localities involved were taking sufficient cognizance of the interrelationship between mass transportation service and other public facilities and policies.

Also, the assistance proposed in S. 2804 would not be limited to situations where there is an urgent threat of loss of commuter service. The bill would make subsidies available wherever there was an "annual net operating deficit" even for 1 year. It may well be that such losses could continue for several years before there was any immediate danger of abandonment of service.

We would also object to the provisions in S. 2804 to extend, through 1970, the mass transportation grant authorization in the 1964 act on the basis of separate annual authorizations. The urban development bill (S. 2977), introduced by Senator Sparkman as part of the administration program, proposes an additional authorization of $95 million for fiscal year 1968. This amount, together with the $55 million authorization carried over from previous years, would be sufficient to provide funding for the program in fiscal 1968 at the $150 million level recommended by the administration.

It is highly important that this program receive 1-year advance funding. This is necessary to permit and, indeed, to encourage long-term local capital investment planning. However, we do not consider it advisable, at this time, to provide funding for the program after fiscal 1968. The President, in his recent message on transportation, stated that he would ask the Secretaries of the Departments of Transportation and of Housing and Urban Development to recommend means and procedures for coordinating their interrelated programs. Such recommendations are needed before decisions on the future level and type of mass transportation aid can be made.

The Bureau of the Budget has advised that there is no objection to the presentation of this report from the standpoint of the administration's program.

Sincerely yours,

ROBERT C. WEAVER.

89TH CONGRESS 2D SESSION

S. 2842

IN THE SENATE OF THE UNITED STATES

JANUARY 27 (legislative day, JANUARY 26), 1966

Mr. DOUGLAS (for himself, Mr. BASS, Mr. BAYH, Mr. CLARK, Mr. Hart, Mr. HARTKE, Mr. INOUYE, Mr. JAVITS, Mr. KENNEDY of Massachusetts, Mr. KENNEDY of New York, Mr. MCCARTHY, Mr. MCNAMARA, Mr. MONDALE, Mr. RIBICOFF, Mr. TYDINGS, and Mr. YARBOROUGH) introduced the following bill; which was read twice and referred to the Committee on Banking and Currency

A BILL

To assist city demonstration programs for rebuilding slum and blighted areas and for providing the public facilities and services necessary to improve the general welfare of the people who live in these areas.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 That this Act may be cited as the "Demonstration Cities 4 Act of 1966".

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FINDINGS AND DECLARATION OF PURPOSE

SEC. 2. The Congress hereby finds and declares that

7 improving the quality of urban life is the most critical

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1 domestic problem facing the United States. The persistence 2 of widespread urban slums and blight, the concentration of 3 persons of low income in older urban areas, and the unmet 4 needs for additional housing and community facilities and 5 services arising from rapid expansion of our urban population 6 have resulted in a marked deterioration in the environment 7 of large numbers of our people while the Nation as a whole

9 The Congress further finds and declares that cities, both 10 large and small, do not have adequate resources to deal 11 effectively with the critical problems facing them, and that 12 additional Federal assistance is essential to enable cities 13 to plan, develop, and conduct programs to improve their 14 physical environment, increase their supply of adequate 15 housing for low- and moderate-income people, and provide 16 educational and social services vital to health and welfare. 17 It is the purpose of this Act to provide additional finan18 cial and technical assistance to enable cities, both large and 19 small, to plan, develop, and carry out programs to rebuild 20 or revitalize large slum and blighted areas and expand and 21 improve public programs and services available to the people

22 who live in such areas.

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It is further the purpose of this Act to provide the

additional financial aid needed to enable cities to participate

25 more effectively in existing Federal assistance programs.

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1 It is further the purpose of this Act to assist cities to 2 coordinate activities aided under existing Federal programs 3 with other public and private actions in order to provide 4 the most effective and economical concentration of Federal, 5 State, local, and private efforts to improve the quality of 6 urban life.

8 SEC. 3. The Secretary of Housing and Urban Develop9 ment (hereinafter referred to as the "Secretary") is au10 thorized to make grants and provide technical assistance, 11 as provided by this Act, to enable city demonstration agen12 cies (as herein defined) to plan, develop, and carry out 13 comprehensive city demonstration programs.

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COMPREHENSIVE CITY DEMONSTRATION PROGRAMS

SEC. 4. (a) A "comprehensive city demonstration pro16 gram" is a locally prepared and scheduled program for 17 rebuilding or restoring entire sections and neighborhoods 18 of slum and blighted areas through the concentrated and 19 coordinated use of all available Federal aids and local private 20 and governmental resources, including citywide aids and

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resources necessary to improve the general welfare of the

22 people living or working in the areas.

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(b) A comprehensive city demonstration program is

24 eligible for assistance under sections 6, 8, and 9 only if the 25 Secretary determines that—

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(1) the program is of sufficient magnitude in both physical and social dimensions (i) to remove or arrest blight and decay in entire sections or neighborhoods, (ii) to provide a substantial increase in the supply of standard housing of low and moderate cost, (iii) to make marked progress in serving the poor and disadvantaged people living in slum and blighted areas with a view to reducing educational disadvantages, disease, and enforced idleness, and (iv) to make a substantial impact on the sound development of the entire city;

(2) the rebuilding or restoration of sections of neighborhoods in accordance with the program will contribute to a well-balanced city with adequate public 14 facilities (including those needed for transportation, ed

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ucation, and recreation), commercial facilities adequate

to serve the residential areas, good access to industrial or other centers of employment, and housing for all income levels;

(3) the program provides for educational and social services necessary to serve the poor and disadvantaged

in the area, widespread citizen participation in the program, maximum opportunities for employing residents of the area in all phases of the program, and enlarged opportunity for work and training;