If the 1970 legislative package is introduced and passed in the form in which we have it presently drafted, the limitation to present existing deficits will be eliminated.

Senator BROOKE. Well, we haven't seen the proposal as yet. I expect we will very shortly, but that will enable you to provide for future deficits as well, is that correct?

Mr. UNGER. That is correct.

Senator BROOKE. What about the second purpose; namely, the opcrating and maintenance costs?

Mr. UNGER. I have not ruled any limitation on that at the moment. The limitation I have cited is limited to existing deficits.

Secretary ROMNEY. In other words, this is an administrative decision by Mr. Cox at this point rather than a legal opinion by the General Counsel's Office. Let me say this to you, Senator. I understand Mr. Cox has ready at this point the implementation guidelines under this section.

The Under Secretary is looking at it this morning and I am going to be looking at it and hopefully we will have an opportunity to cover these points. I have not had an opportunity to look at them in the final form.

Senator BROOKE. I am pleased to hear that. In addition to the 25 percent, I want to be sure there is adequate money for maintenance and operating costs that would improve the quality of housing in public housing projects as well. Because I think if we limit it to the 25-percent rule, that does not mean there will be any improvement in the quality of living.

Secretary ROMNEY. As far as we are concerned, it applies to maintenance and reserves. There is no legal prohibition in that connection. Senator BROOKE. Yes. Section 213 (a) of the 1969 Housing Act places a ceiling on public housing rental equal to 25 percent of the man's income. The act went on to vest authority in the Secretary of Housing and Urban Development to determine what constitutes a family's income. At the present time, the U.S. Housing Act vests maximum responsibility in the administration of low-rent housing programs in local housing authorities. Now, I have been informed by local housing authorities that any attempt to establish new income requirements will create havoc with local authorities and tenant organizations.

I also have been informed that continuation of policies that vest maximum responsibility in the authority and permits them to establish income criteria subject to HUD's grouping will produce the optimum results.

Is HUD going to permit local authorities to retain existing income criteria or are new standards going to be levied upon them?

Secretary ROMNEY. We are undertaking to develop a greater degree of standardization and equity in these levels and that will be covered in the 1970 legislation. Obviously, you are going to have an opportunity to take a look at it and see whether you think this improves the situation or doesn't. We happen to think it will improve the situation and consequently we will make recommendations that will apply in those areas.

Senator PROXMIRE. Senator Cranston?

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Senator CRANSTON. There has been a great deal of controversy over de facto school segregation in the North, East, and West. It is my feeling if we are ever to break down de facto segregation, we necessarily have to tackle the problem of residential segregation.

It is presently true, is it now, that a great number of the all-white neighborhoods that surround our metropolitan areas were assisted and are now assisted by the Federal Government through housing programs?

Secretary ROMNEY. Correct.

Senator CRANSTON. Apart from the Civil Rights Act of 1968, what is your Department doing in light of the recent controversy over the de facto school segregation issue to break down the pattern of racial discrimination in housing which is either directly financed or guaranteed by the Federal Government?

Secretary ROMNEY. We have been doing a great deal in that area and we expect to be doing more. What we have been working on is a set of recommendations that would reflect the urgency of developing, as I indicated in my testimony, a truly open community situation on a metropolitan area basis.

I think it is absolutely essential that we eliminate these zone and other restrictions preventing American citizens from being able to find housing throughout the metropolitan area. Particularly in relationship to their jobs and their daily activities.

The hard facts are that this explosive pattern that we now have of the poor and minority groups living largely in the central core city and the middle income and the more affluent families in the surrounding communities have been promoted by some past policies. The FHA was a racist program up to World War II and subsequently it helped middle income and affluent families to move out of the central core city.

In the city of Detroit, between urban renewal and the freeway program, the congestion in the riot area, where the riot started, was increased from 16,000 families in 1957, to 34,000 families in 1967 when the riot broke out. The freeway programs have also made it possible for industry and business to move out of the central city and move out beyond the reach of the lower income families that really need that sort of employment.

Consequently, it is urgent that we break down these barriers and it is urgent that we get low and moderate income family housing scattered throughout the metropolitan area.

Now, as I say, we have been pushing in that direction with our present program. I am personally of the opinion, to be really fully effective, it is going to be necessary to withhold Fedreal funds from communities that don't make it possible for low and moderate income family housing to be located in their areas.

I think the Massachusetts Legislature and Governor have taken the right track in empowering the State to insist that at least 10 percent of the housing in every community be low and moderate income housing.

I think we need to do a good deal more in that area. We have been working on this problem intensively because this goes right to the heart of the problem we are dealing with. I think a lot of people in this country think that the problem we have now with black people is

something fundamentally new and different. Well, it has its unique aspects but basically it isn't any different than the experience throughout history with minority groups. Wherever you have a minority group concentrated, even though the minority group might be of the same genetic backgroup, you have tension and explosive situations. We have had it with the Irish, with the Germans, with religious groups and other groups. Where you get a concentration of minority groups, you have an explosive situation until those minority members become an integrated part of the society.

So, I think this is a very urgent problem and the housing aspect of it is fundamental to the solution of the educational and other aspects of it. It is the most fundamental aspect, that and jobs.

Senator CRANSTON. I agree. Would you suggest that perhaps funds be withheld, would you support legislation that would withhold funds from those communities that would not go along with this program? Secretary ROMNEY. Yes, sir. As a matter of fact, I haven't touched on another aspect of it, we have devoted a good deal of attention to the job part, too.

Senator CRANSTON. Do you feel that HUD should work with HEW and with Justice in programs that would have the effect of eliminating segregation in neighborhoods?

Secretary ROMNEY. Sure. We met with Justice yesterday on one aspect of this. I do not think HUD has been sufficiently recognized for the powers of its responsibilities in this area and I have undertaken to correct that internally because I think when you get right down to the solution is in the field of jobs and houses.

If you followed what I said, I said our policy is to make it possible for every American family to have the opportunity to live within a reasonable distance of their job and daily activities. If you bring that about, then children are going to be living within a reasonable distance of their schools and adults of all income levels and racial and other backgrounds will be living together. That has to come about or we are going to continue to have trouble in this country.

Senator CRANSTON. I am glad you met with the Attorney Gen

eral

Secretary ROMNEY. I did not say I was with the Attorney General. The Justice Department.

Senator CRANSTON. Do you have any plans to meet with the Attorney General and the Secretary of HEW?

Secretary ROMNEY. I was not appointed to this committee under the chairmanship of the Vice President of the United States and I asked to participate in the meetings of that committee because I pointed out if they were going to solve the problems they are talking about that housing would have to play a big part, and I have been told that I would be invited to the subsequent meetings of the committee. Senator CRANSTON. I think you are quite right in that position and I am glad you have done that. I would think that quite possibly direct meetings between you and Mr. Finch and Attorney General Mitchell, who have really the primary responsibilities in the most significant areas. would be very productive.

Secretary ROMNEY. This is a relatively new department and they have not quite visualized the relationship, I guess, between the housing situation and the education situation in the terms you and I have.

I hope as a result of what I have already taken steps to secure, that this will become more apparent to them as well as to others.

I might add it has taken a lot of effort in the past year to get all of the departments and agencies concerned with economic and fiscal and monetary policy to recognize the interest our Department has in these policies as they relate to housing. We have a good working relationship with these agencies now and I hope it will develop in the field we are talking about also.

Senator BROOKE. Will the Senator yield on that?

Senator CRANSTON. Yes.

Senator BROOKE. I was very disappointed when you were not appointed to the Agnew Committee. I did not know whether it was an oversight or a lack of recognition of HUD's role in the whole area. I am happy to hear that you will be given a voice if not a vote in that. I would like the President to reconsider and give you a vote. I think housing is so important to this subject that they are studying that it must have been an oversight or, as I said, a lack of recognition not to have appointed you in the first instance.

Secretary ROMNEY. I do not know what the factors were.

Senator PROXMIRE. I would like to join in that; housing is the most sensitive.

Secretary ROMNEY. Sure. It is the key. I do not know what the appointments were based on. I did not want to propose myself as a member but I thought I should point out that housing was a fundamental aspect to what they were dealing with and we could make some contribution. I thought I was more likely to get a positive result if I asked to participate.

Senator CRANSTON. You spoke about HUD being the relevant Cabinet Department. Of course, ĤEW is, also.

Secretary ROMNEY. HEW has a $60 billion budget and we are one of the small departments with huge responsibility. We have 500 people less in our Department than the Bureau of Indian Affairs.

Senator PROXMIRE. I must say you do a better job than the Bureau of Indian Affairs.

Secretary ROMNEY. I hope so.

Senator PROXMIRE. Which leads me to the point I want to make. I went through the seven points and, frankly, they really don't amount to very much.

Secretary ROMNEY. I fundamentally disagree with you, but when I tell you we are going to move starts from where they are to 1.4 million for the year, and when I tell you we are going to have subsidized starts up some 100 percent, I am setting some pretty good goals to reach.

Senator PROXMIRE. The reaction I get is that it is not a Romneytype action, knowing the job you did at American Motors and as Governor of Michigan.

Secretary ROMNEY. I never doubled Rambler production in 1 year. Senator PROXMIRE. I think there are some good points; I think the best evidence is where you do project your starts, nonmobile home starts, 1.3 million for fiscal 1970, housing goals call for 2 million

Secretary ROMNEY. That is not the Romney program, 85 percent of that is the committee program. The program of those people who have other responsibilities that they properly view as their primary responsibilities. What I have been pointing out to you is that in the

bulk of the housing program in this Nation you have a committee in charge.

Senator PROXMIRE. Are you going to ask us to provide for a new organization so that we can have one man in charge of housing instead of a committee?

Secretary ROMNEY. I am too modest for that at this point.

Senator PROXMIRE. I hope you are serious, because if you are not going to ask for it you are not going to get it. You are in a position now to ask.

Secretary ROMNEY. I find more concern on the part of housing by mayors than any other single problem.

Senator PROXMIRE. I think there is more concern in the Congress right now. The time is now to ask for this reorganization-you say you are hog-tied by a committee and can't act as you like to—I think the Congress will give it to you.

Secretary ROMNEY. Let me complete the picture a little bit. I pointed out to the heads of the other departments that I had to confer with on these policies the other day, that I only had direct control of the subsidized housing part and they all said we look to you for the whole thing.

So at this point with the increasing urgency of the situation there is a recognition on their part that hasn't existed until recently. But you do have the situation that I described from an organizational standpoint. Our Department has direct responsibility only for the subsidized program and there we are getting it up.

Senator PROXMIRE. As I say, the monkey is squarely on the back of the administration to come up and ask for a reorganization so we can have one man in charge and get something done.

Now, title XVI of the 1968 Housing Act requires a report on housing goals to be submitted to Congress by February 15. This is March 3, why is the administration not complying with the law?

Secretary ROMNEY. We talked to the chairman about that and submitted an interim report. The facts are that the budget was delayed somewhat this year as a result of our taking a somewhat lead position in undertaking to get a tight, firm budget and we are

Senator PROXMIRE. Can you tell us when we will get that report? Secretary ROMNEY. Yes; you will have it by the 15th of this month. Senator PROXMIRE. The 10-year program submitted by President Johnson last year calls for building 26 million units of conventional housing. I notice on table II of your statement that you have apparently reduced this goal to only 21 million, but that you are also projecting 4 million mobile home units from fiscal year 1969 through 1978.

Am I correct in assuming you have cut the 26 million back to 21 million and, if so, why?

Secretary ROMNEY. We have included the mobile homes because they are supplying housing units for people.

Senator PROXMIRE. We knew that when we set the goals. I knew that and so did the committee and the Congress.

Secretary ROMNEY. They were not in the past caculations and we think they properly constitute a part of the housing production. They are much improved units and both low-income families and well-to-do families are turning to them as a source of housing.