Now, I don't want to get in an argument about whether it is 21 or 26; it is much more than 26. I don't know how much more. The shortage is much greater than that.

Senator PROXMIRE. I think the goals set by the Congress of the United States, signed by the Prseident, and enacted into law are goals that we should meet. We have kept our commitments in the highway building program and extremely well in space. Housing is more urgent, it seems to me, than either one of those areas.

Secretary ROMNEY. In both cases you made firm commitments of needed funds. You created a trust fund in the case of one which nobody can touch, and in the case of the other you put one man in charge. Senator PROXMIRE. It appears here you are cutting back the goals by 5 million.

Secretary ROMNEY. We don't intend it that way. We think mobile home production, which is way up, is properly a part of housing. But again, I think the 26 million understates the need rather than overstates it.

Senator PROXMIRE. As you know, the 10-year program called for 401,000 low- and moderate-income housing starts in fiscal year 1970 under all HUD programs. I understand you are now only forecasting 242,000 starts. I emphasize starts since the original plan projected starts, whereas this year's budget changes the terminology and only shows commitments. I would hope your future tables will continue to use starts since the lag between commitments can be quite long and starts are objective, whereas commitments are somewhat fuzzy and subject to manipulation.

In any event, why the shortfall in fiscal year 1970, your first full fiscal year in office. Why are you meeting only 60 percent of the goal? Secretary ROMNEY. It is true that the figures for the fiscal year are what you say, 242,000. But on a calendar year basis, last year there were 223,000 units produced by HUD and the Farmers Home Administration. For this calendar year, we expect to start over 450,000 units. That is more than double what we did last year.

What that really means is that for this half of the fiscal year we are already well above where we were during the first half of the fiscal year and we will be even further ahead in the latter half of this calendar year which is the first half of the next fiscal year.

Senator PROXMIRE. This is your first full fiscal year in office and you are only getting 60 percent of the goal during the first full fiscal year, so that is an enormous shortage.

Secretary ROMNEY. Senator, you did not even give me the money until well into this fiscal year for the last fiscal year. You only gave me $25 million on 231 and 236. I was up here for $50 million more on both of them. We did not get that $50 million extra that we needed for the last fiscal year until this fiscal year-until July of this fiscal year. Furthermore, we did not get the Housing Act for this fiscal year and the appropriations until well into the fiscal year-November 26. So if Congress wants us to reach these goals, why does not Congress do a little better job on its own work of getting appropriations bills out on time. We cannot do the job if we do not get the money on time. Senator PROXMIRE. I expected that answer, but let me further

say

Secretary ROMNEY. Furthermore, you cut us back.

Senator PROXMIRE. You do have $3.2 billion in unused GNMA and special assistance funds.

Secretary ROMNEY. That is not true.

Senator PROXMIRE. How much do you have?

Secretary ROMNEY. We have a billion two that we are using on the tandem plan and

Senator PROXMIRE. How much unused authority do you have? Secretary ROMNEY. Cooperative housing, there is earmarked $95 million. In total $2.1 billion of earmarked authority.

Senator PROXMIRE. How much of the Presidential authorization? Secretary ROMNEY. Of the $2 billion, a billion and a half of this is what we are talking about. We have it in the form where we cannot use it effectively anyway. The bulk of it is not in a usable form. The only Presidential funds we are not using-and those are the funds in a usable form by us-are about $10 million.

Senator PROXMIRE. You have $1.1 billion to be used by the President for any low- or moderate-income program, plus $1 billion designated by Congress as indicated.

Secretary ROMNEY. We are using the $1.2 billion for these tandem

programs.

Senator PROXMIRE. How about the $1.1 billion for Presidential authorizations?

Secretary ROMNEY. That is $1.1 million, not $1.1 billion.

Senator PROXMIRE. Wait a minute. This came from your office. It says in millions of dollars, it says $1,122.4. I am talking about Presidential authorization, status of available authority. The total for that first section is $1,122.4.

Secretary ROMNEY. That is all earmarked for the tandem plan. We are in the process of using it.

Senator PROXMIRE. It has not been used.

Secretary ROMNEY. We are using it as fast as it needs to be used. I secured Presidential authorization sometime ago to use $650 million of that for the 236 program and $500 million on the 235. We are using it as fast as we can. It is revolving money and we need more. That is where we need that billion and a half down below there. We want to be able to use that up in the tandem plan.

Senator PROXMIRE. If my memory serves me correctly, were you not trying to give us back $500 million last year?

Secretary ROMNEY. I was not. The Budget was. We changed their mind. That is the 235. There was $500 million at one point on which we were being good team players about contrary to our views. But that did not last very long, Senator.

Senator PROXMIRE. I am glad it did not last very long.

Secretary ROMNEY. We are using the $122.4 million that you see there for the tandem plan or miscellaneous other things as to the congressional authorizations we would like that billion and a half put up under Presidential so we can use it.

Senator PROXMIRE. I notice that on page 208 of the Special Analysis to the President's budget, there is a table showing budget outlays for housing. Actual outlays for all HUD programs were $876 million in fiscal year 1969; whereas in fiscal year 1970-your first full year in office-housing outlays by HUD actually decline slightly to $870 million.

By way of contrast, page 347 of the President's budget shows departmental administrative expenses of HUD sky-rocketing from $55 million in fiscal year 1969 to $72 million in fiscal year 1970, an increase of $17 million or nearly 25 percent.

In other words, production expenditures are down-while the cost of bureaucracy is us. Is this the way you managed American Motors? Secretary ROMNEY. Senator, now look, you are playing tricks with figures and that is not very fair and I want to tell you why.

Senator PROXMIRE. Well, I asked you that question so you could straighten it out.

Secretary ROMNEY. All right. I want to lay it on the line with you. I will tell you what you did. No. 1, you shifted FNMA out of our Department so instead of the FNMA's cost of operation, it is separate now. Instead of their borrowings being a part of our Department it is outside of our Department. You put it on a private basis.

You have been shifting our programs from direct loan programs to where the Government puts up the principal to interest subsidization programs. Of course, that reduces the amount of money spent by our Department. That is a sensible program, because instead of the Government having to put up the principal amount the Government puts up a certain percentage of the interest.

The facts are that we are doing a whale of a lot more work than we were doing before because our production is up and our results are up but to use these dollar figures when they are not comparable is to use them in a manner that just is not fair.

Senator PROXMIRE. Well, I used the President's budget figures.

Secretary ROMNEY. If you want to take a gross outlay basis, the figures go up, but again the points I made are the basic points. The gross outlay figures for 1969 were $1,020 million and for 1970 they are $175 million and for 1971 they will be $1,560 million.

But let me give you some appreciation of what the volume of these figures represent. When we get a dollar under the 236 or 235 program, $20 have to come from a private source to make that dollar usable. So when you appropriate $100 million for 236 interest subsidization, that means that the private market has to put up $2 billion. If you take a look at our programs that way, you get quite a different picture.

But again you have shifted us here as a result of the 1968 Housing Act from the direct loan program into the interest subsidization program.

Senator PROXMIRE. Senator Brooke?

Senator BROOKE. Mr. Secretary, we are not adversary parties, we are allies. When I say we I am speaking of the committee and I think even the Congress. You want to build more

Senator PROXMIRE. Include me in.

Secretary ROMNEY. Well, I have to keep up pretty fast with you. Senator BROOKE. You want to improve public housing and we want you to. Now, I do not want to dwell on this, but this rather limiting interpretation of your very distinguished counsel so far as 212 is concerned, I want to be assured it will not put us back a year insofar as improved operating and maintenance service in public housing. Am I assured of that?

Secretary ROMNEY. I cannot assure you of that. If you tell me when Congress is going to pass out some of the legislation I can assure

you and you will say to me I cannot tell you that until we get it. But in any event, it is covered in there and as far as we are concerned we do not want any gap.

Senator BROOKE. I am talking about between the time we passed the 1969 act and the 1970 act.

Mr. UNGER. I would be glad to give you my interpretation of the law on that, Senator.

Senator BROOKE. It is a very limiting interpretation.

Mr. UNGER. It is a very limiting conference report.

Senator BROOKE. It was certainly not the intent of the committee or the conferees, if you read the conference language. I am just wondering if we are going to be put back a year by that interpretation. It would seem to me you would be giving the most liberal interpretation if—what I said, we are allies rather than adversaries. We are both working toward the same goal, as I understand it.

Mr. UNGER. I agree with you, we are allies and not adversaries. My legal opinion was based on the conference report. Had the conference report been written differently, I could have given more liberal legal interpretation. I did not write the law, nor did I write the conference report. I interpreted it.

Senator BROOKE. Then your answer is that we are going to be the losers; we are going to lose about a year on this?

Mr. UNGER. No, sir. My answer is that we tried to clarify the law in our 1970 legislative package and I would presume that the time that may be consumed is now at the mercy of Congress.

Secretary ROMNEY. But if Congress acts within the time limits you normally act in, there should be no hiatus here between the two.

Senator BROOKE. I think there will be a hiatus. I don't see how we can avoid it.

Wouldn't you agree, Mr. Unger?

Mr. UNGER. I would hate to second guess Congress.

Senator BROOKE. I mean based on your interpretation.

Secretary ROMNEY. Senator, if we get the legislation next fall or in December, we should be able to use the funds within the fiscal year to meet the situation. If you don't get it in time so we can use the funds in the next fiscal year, we would have a gap between the two programs. We don't want that gap and we are hopeful that the 1970 legislation will come along in time.

Senator BROOKE. Well, funds are not easy to come by and we authorized the funds and all we are asking you to do is use those funds. There is one other way, of course. I don't know if I want to suggest that but there could be a reversal of that interpretation. Courts do reverse themselves, people do change and as the administrator I think you would certainly have it within your authority to do that.

Secretary ROMNEY. Based on our best judgment at this point, if we secure authorization to use the full $75 million, it will be used up this year. It won't serve the second year.

Senator BROOKE. No, it is contract authority which is continuing. We purposely wrote it that way. We didn't want you to go the appropriations route.

Secretary ROMNEY. You are right, it can be used again.

Senator BROOKE. That is the purpose for doing it the way we did it. It shows our good faith and eagerness in order to support you.

Frankly, it looks as though we are trying to support you and you don't want our support.

Secretary ROMNEY. We want your support and we are going to have to get up to that limit and we are going to have to have some help to get up to that limit.

Senator BROOKE. I ask you to review it again. I used to be an old attorney general myself and I know how lawyers do differ on statutory interpretations. As I say, I respect Mr. Unger very much but I was hoping, where there was a possibility of a different interpretation, that you would interpret it in a manner which would be more favorable to the goals which we all seek.

Well, I won't belabor that. I do trust you will consider it. I think to lose a year would be most unfortunate and certainly would not be in keeping with the intent of the committee and the Congress. Certainly of the proponent of the amendment.

How much authority do you want for 235 and 236? How much money do you really need for 235 and 236?

Secretary ROMNEY. I think we have undertaken a very sizable task in undertaking to move from the 223,000 level to around 600,000 units a year by the end of 1971. That is a large increase in output considering the way in which you have to achieve it.

As you know we have to work with nonprofit organizations and limited dividend organizations and State and local governments. Really this is a sizable undertaking we have specified.

With the $25 million additional we have asked for in these two programs this year and with what we have asked for in the budget. for 1971 and if we can get a continuation for the last half of 1971— the first part of the 1972 fiscal year-we should have this low and moderate income subsidized housing output up to the 600,000 level on an annual basis. Really that is a big undertaking.

Senator BROOKE. Well, my distinguished colleague from Illinois has come in and I am sure he has some questions. I merely want to thank the Secretary and the members of the staff for an excellent presentation and I assure them I will continue supporting him and again I state we will continue to be allies.

Thank you very much.

Senator CRANSTON. Another point, Governor, last fall the HUD Act of 1969 was amended to provide that lower income people residing in urban renewal areas should be given an opportunity to be employed in connection with projects underway. To what extent has this been implemented?

Secretary ROMNEY. We have been very active in this field, Assistant Secretary Simmons has made findings as a result of hearings held in Chicago and other activities. As a result of this some of these agreements have been entered into in such places as Chicago where the building trade unions have agreed to take additional minority group members into their training programs and apprenticeship programs. We continue to be aggressive in this field.

Mr. Simmons has been active in the Philadelphia plan efforts and in Detroit is undertaking to bring about an agreement there that would go beyond anything achieved so far.

So really we have been pushing hard in that area.