sidered before such actions as that taken by the Federal Reserve Board on December 6 are put into effect. I think you will get a sympathetic ear from the President. And, if you think you need legislation in this area, I am sure that this committee will be sympathetic. I don't think anyone sitting on this committee wants to see housing programs, on which we spend many long hours, destroyed by the willful actions of a one-vote majority of the Federal Reserve Board.

Again, let me say that the bill before us is an imaginative and skillful answer to many of the problems of urban and suburban development. It deserves early consideration by the Congress. And I congratulate my colleague from Pennsylvania, Bill Barrett, for so promptly calling his subcommittee together to work on this legislation. Thank you, Chairman Barrett.

Mr. BARRETT. Thank you, Mr. Chairman.

Dr. Weaver, will you be kind enough now to introduce your associates for the benefit of the members of the subcommittee?

STATEMENT OF ROBERT C. WEAVER, SECRETARY OF HOUSING AND URBAN DEVELOPMENT; ACCOMPANIED BY ROBERT C. WOOD, UNDER SECRETARY; PHILIP N. BROWNSTEIN, ASSISTANT SECRETARY FOR MORTGAGE CREDIT; CHARLES M. HAAR, ASSISTANT SECRETARY FOR METROPOLITAN DEVELOPMENT; HOWARD WHARTON, DEPUTY URBAN RENEWAL COMMISSIONER; MRS. MARIE C. MCGUIRE, PUBLIC HOUSING COMMISSIONER; AND ASHLEY FOARD, ACTING GENERAL COUNSEL

Secretary WEAVER. Thank you, Mr. Chairman, and thank you, Chairman Patman.

I have with me this morning two gentlemen who have not appeared before this group before. The first is the Under Secretary, who comes first with the credential of being the Chairman of the task force which was appointed by the President in connection with this Department and its program. And he is, as you know, an authority on the matters of the governmental difficulties of our urban communities, particularly with the metropolitan governmental problems and the proliferation of governments which harass us in the urban field. He was formerly a professor of political science at MIT, and now is the Under Secretary. Mr. Wood.

Mr. Wood. Thank you, Mr. Chairman.

Secretary WEAVER. And the second gentleman that I introduce to you is the Assistant Secretary for Metropolitan Development. He is an authority in land use, and planning. He has been long active not only as a student in this field, but also as an operator, being used in a consultant capacity, being used in a program development capacity. He also served on the task force. And he brings to us some unique talents. And he is the Assistant Secretary, Mr. Charles Haar, formerly professor of law at Harvard University.

Secretary Haar.

Mr. HAAR. Thank you, Mr. Secretary.

Secretary WEAVER. We have some old friends, as you know, but I think we should have them identified for you again. Unfortunately Commissioner Slayton could not be here, but his deputy, Mr. Howard

Wharton is here representing the Commissioner of Urban Renewal. Mr. Wharton is on that end of the table. And sitting next to him is a lady that you all know who has been for 412 years the Commissioner of the Public Housing Administration, Mrs. Marie McGuire.

And sitting next to me on my left is the Acting General Counsel, Mr. Ashley Foard.

And now I have left one for the last, because he is in a unique position. He is both old and new. He retains an old title, which is that of Federal Housing Commissioner, but he has acquired a new title. And that is the Assistant Secretary for Mortgage Credit. Mr. Philip N. Brownstein on my extreme left.

And we are all delighted to be here. And we are all very pleased to have this opportunity to present the administration's program on housing and urban development as embraced in the legislation that is now before us.

With your permission

Mr. BARRETT. Mr. Widnall?

Mr. WIDNALL. Mr. Chairman, and Mr. Weaver, on behalf of the minority, I too want to welcome you here with your aids. We know how competent you are in the field, and the staff you have surrounding

you.

When we finished the last housing bill, the omnibus housing bill, I recall I was asked by some members of the press, do you think there will be any housing legislation next time. And at that time I said, well, there certainly should be time to digest some of the things and see whither we are going, but I expect there will be some. But I say now that with three bills before us, the Demonstration Cities Act of 1966, and the planned metropolitan development and HUD program amendments, we have a greater mass of proposals before us than at the time we enacted the last omnibus bill. I am pleased that we have started hearings. These are extremely important. And I do feel that they should be full and comprehensive. And as to some of the new ideas that are involved, we should take a good hard look at what you are trying to do in the urban field, though a demonstration bill, I think, is a very worthy approach. There are some parts I would like to inquire about. And I would appreciate some information

about it.

Secretary WEAVER. Thank you very much.

Mr. BARRETT. Thank you, Mr. Widnall.

Dr. Weaver, if I may, before you start your testimony, lay the ground rules for the benefit of our members. We are going to ask them to give you an opportunity to complete your testimony, and after the completion of your testimony, we are going to give each member 10 minutes in the first round to ask questions. So, Doctor, if you will now start your testimony, we will let you complete it.

Secretary WEAVER. With your permission Mr. Chairman, I shall discuss the objectives and principal provisions of the three bills proposed by the administration to carry out recommendations of the President in his message on city demonstration programs and to improve and extend housing and urban development legislation. These three bills are: the Demonstration Cities Act of 1966, the Urban Development Act, and the Housing and Urban Development Amendments of 1966 introduced by Congressman Patman-H.R. 12341, H.R.

12946, and H.R. 13064-and by Congressman Barrett-H.R. 12342, H.R. 12939, and H.R. 13065.

The demonstration cities bill is the most important proposal in the President's program for rebuilding America's cities.

In his message to the Congress recommending the demonstration cities bill, the President said:

From the experience of three decades, it is clear to me that American cities require a program that will—

Concentrate our available resources-in planning tools, in housing construction, in job training, in health facilities, in recreation, in welfare programs, in education-to improve the conditions of life in urban areas.

Join together all available talent and skills in a coordinated effort.

Mobilize local leadership and private initiative, so that local citizens will determine the shape of their new city * * *.

The demonstration cities bill will make it possible for cities of all sizes to undertake such a program.

This bill will help cities to plan, develop, and carry out comprehensive city demonstration programs. These are locally prepared programs for rebuilding or restoring entire sections and neighborhoods of slum and blighted areas. It will help cities to provide the public facilities and services, including citywide aids, needed to enable the poor and disadvantaged people who live in these areas to become useful, productive citizens citizens able to join in the general prosperity this Nation now enjoys.

This bill will make it possible to improve and substantially increase the supply of adequate low- and moderate-cost housing in the cities. It will make it possible for cities to concentrate their educational, health, and social services on the problems of the large numbers of poor and disadvantaged people who live in slum and blighted sections and neighborhoods. It will make it possible to treat the human needs of people in the slums at the same time physical rehabilitation is being carried out.

To qualify for assistance under this bill, a city must be prepared to plan and carry out a comprehensive city demonstration program. This will be a local program. It will be planned, developed, and carried out by local people. The character and content of the program will be based on local judgments as to the cities' needs.

This bill will provide Federal funds to cover up to 90 percent of the cost of planning and developing the comprehensive city demonstration program. It will provide special Federal grants-supplementing assistance available under existing grant-in-aid programs to help carry out all of the activities included as part of the demonstration program.

The amount of these special, supplemental grants, will be equal to 80 percent of the local or State share of the cost of all projects or activities which are a part of the demonstration program and financed under existing grant-in-aid programs. I will soon explain more fully the provisions of this bill relating to these supplemental grants.

But first, let me emphasize that it will not be easy to qualify for this assistance. This bill is designed to help cities willing to face up to their responsibilities-willing and able to bring together the public and private bodies whose joint action is necessary to solve their problems willing to commit fully their energies and resources-willing to

undertake actions which will have widespread and profound effects on the physical and social structure of the city.

To qualify for assistance under this bill, a city's demonstration program must meet the following general criteria:

First, it must be large enough-to remove or arrest blight and decay in whole sections or neighborhoods-to provide a substantial increase in the supply of adequate housing for low- and moderate-income people to make a significant contribution to the provision of additional social services for the poor and disadvantaged living in slum and blighted areas—and to make a substantial impact on the sound development of the entire city;

Second, the rebuilding or restoration of slum and blighted sections and neighborhoods must contribute to a well-balanced city with adequate public facilities;

Third, the program must provide for widespread citizen participation-and maximum opportunities for using residents of the areas being rebuilt in the work of rebuilding;

Fourth, adequate local resources must be available for carrying out the program;

Fifth, the local governing body must approve the program—and local agencies whose cooperation is necessary to carry out the program must be willing to furnish that cooperation;

Sixth, there must be a plan for relocating, and adequately compensating, individuals, families, and business concerns displaced by the program; and

Seventh, all citizens must have maximum opportunity in the choice of housing provided by the program.

Finally, the city's demonstration program must be more than a statement of goals, it must be a definite plan of action. Projects and activities to be undertaken must be scheduled and ready for initiation within a reasonably short period of time.

In addition, we will expect a city which undertakes a demonstration program to take advantage of modern cost-reducing technologies. We will expect a concern for good design and attention to man's need for open spaces and attractive landscaping.

A program meeting these criteria is not lightly undertaken. But nothing else will do.

A total commitment of the energies and resources that lie within the American city is necessary to stop the growing physical deterioration and the social alienation of disadvantaged groups concentrated in low-income ghettos.

Two types of Federal assistance are available to help finance the projects or activities which are undertaken as part of an approved comprehensive city demonstration program.

First, the complete array of all existing Federal grant and urban aid programs in the fields of housing, renewal, transportation, education, welfare, economic opportunity, and related programs would be available for the demonstration program.

This bill contemplates that existing Federal grant-in-aid programs-and funds now available for those programs-will be used in carrying out projects or activities which, though part of a comprehensive city demonstration program, are eligible for assistance under existing grant-in-aid programs.

The fact that a particular project, eligible for grants under an ea.. ing Federal progam, is undertaken as part of a demonstration program will in no way affect its eligibility under the existing program. The city will apply to the Federal agency which administers the existing program, and the application will be subject to all the existing rules, regulations, and priorities governing that program.

Second, there will be available special grants, supplementing the assistance under existing grant-in-aid programs. These supplemental grants will be provided under the demonstration cities bill to

(1) Assist cities to provide their required share of the cost of projects or activities which are part of the demonstration program and are funded under existing Federal grant-in-aid programs, and (2) Provide funds to carry out other, non-federally assisted projects or activities undertaken as part of the demonstration

program. The amount of this supplemental grant will be 80 percent of the total non-Federal contributions required to be made to all projects or activities assisted by existing Federal grant programs which are carried out as part of a comprehensive city demonstration program.

The supplemental grant funds authorized to be paid by the demonstration cities bill are not earmarked for any one part of the demonstration program. After the amount of this supplemental grant is established under the formula in the demonstration cities bill, the total amount is available to the city to be used at its discretion for any project or activity which is included as part of an approved city demonstration program.

The demonstration cities legislation calls for a newly concentrated and coordinated approach by the cities to their problems. It utilizes the full range of existing grant-in-aid programs for both physical and social development. The list of these programs is long. But there is a new and sharper focus of the activities assisted by these programs and far greater coordination in their use. This is a key goal of the demonstration cities legislation.

In addition, the supplemental Federal grant funds provided by this bill will enable the cities to participate more effectively in existing grant-in-aid programs and will permit cities to experiment with needed activities which are not now funded by these existing programs. The ultimate success of this new program rests upon the ability of local people to assess their own most pressing problems and devise their own solutions to those problems. And the cities themselves, by their actions, will determine which of them participate in this program. Those cities which can concentrate their resources, identify their problem areas, and develop sound imaginative solutions will be the first aboard.

But all cities will benefit from the solutions to urban problems developed through the demonstration cities approach. I am confident every city will ultimately use this "total attack" approach to solve its urban problems.

The assistance provided by this bill will be given to cities of all sizes and in all parts of the country. This will enable the program to demonstrate the wide range of methods available to deal with the diversity of problems that face cities of all sizes throughout the country.