PAGENO="0001" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 HEARINGS BEFORE THE COMMITTEE ON EDUCATION AND LABOR HOUSE OF REPRESENTATIVES NINETIETH CONGRESS FIRST SESSION <1 ~ ON (~. / / / H.R. 8311 AND VARIOUS BILLS TO PROVIDE AN IMPROVED CHARTER FOR ECONOMIC: OPPORTUNITY ACT PROGRAMS, TO AUTHOR- IZE FUNDS FOR THEIR CONTINUED OPERATION, TO EXPAND SUMMER CAMP OPPORTUNITIES FOR DISADVANTAGED CHIL- DREN, AND FOR OTHER PURPOSES PART 2 HEARINGS HELD IN WASHINGTON, D.C., JUNE 19, 20, 21, 22, 23, 26, 28; AND JULY 10, 1967 Printed for the use of the Committee on Education and Labor CARL D. PERKINS, Chairman U.S. GOVERNMENT PRINTING OFFICE 80-084 WASHINGTON :1967 ~i(_ /`7~ )~ PAGENO="0002" COMMITTEE ON EDLCATION AND LABOR CARL D. PERKINS, Kentucky, Chairman EDITH GREEN, Oregon FRANK THOMPSON, Ja., New Jersey. ELMER J. HOLLAND, Pennsylvania JOHN H. DENT, Pennsylvania ROMAN C. PUCINSKI, Illinois DOMINICK V. DANIELS, New Jersey JOHN BRADEMAS, Indiana JAMES G. O'HARA, Michigan HUGH L. CAREY, New York AUGUSTUS F. HAWKINS, California SAM GIBBONS, Florida WILLIAM D. FORD, Michigan WILLIAM D. HATHAWAY, Maine PATSY T. MINK, Hawaii JAMES H. SCHEUER, New York LLOYD MEEDS, Washington PHILLIP BURTON, California CARL ALBERT, Oklahoma II WILLIAM H. AYRES, Ohio ALBERT H. QUIE, Minnesota CHARLES E. GOODELL, New York JOHN M. ASHBROOK, Ohio ALPHONZO BELL, California OGDEN R. REID, New York EDWARD J. GURNEY, Florida JOHN N. ERLENBORN, Illinois WILLIAM J. SCHERLE, Iowa JOHN DELLENBACK, Oregon MARVIN L. ESCH, Michigan EDWIN D. ESHLEMAN, Pennsylvania JAMES C. GARDNER, North Carolina WILLIAM A. STEIGER, Wisconsin PAGENO="0003" CONTENTS Page Hearings held in Washington, D.C.: June 19, 1967 847 June 20, 1967 911 June 21, 1967 1097 June 22, 1967_ 1185 June 23, 1967 1285 June 26, 1967. 1383 June 28, 1967 1449 July 10, 1967 1489 Statement of- Berry, Theodore M., Director, Community Action Programs 1045 Boutin, Bernard L., Administrator, Small Business Administration. 13.56 Carter, Lisle C., Jr., Assistant Secretary for Individual and Family Services, HEW; accompanied by: Donald Slater, Mrs. Barbara Coughian, and Dr. Nolan Estes 1286 Freeman, Hon. Orville I., Secretary of Agriculture 1489 Johnson, Earl, Director, Legal Services Program 912 Marshall, Kenneth E., vice president, Metropolitan Applied Research Center, Inc., New York 1461 Moorhead, Hon. William S., a Representative in Congress from the State of Pennsylvania. 1454 Shriver, Sargent, Director; Bertrand M. Harding, Deputy Director; Donald M. Baker, General Counsel; Robert A. Levine, Assistant Director, Research, Plans, Programs and Evaluation; Theodore M. Berry, Director, Community Action Program; Joseph T. English, MD., Assistant Director. for Health Affairs, CAP; John Frankel, M.D., Director, Health Division, CAP;. Mrs. Lisbeth Bamberger Schorr, Director, Programing, Planning and Evalu- ation, for Health Affairs, and Jule Sugarmann, Associate Director, Head Start, Office of Economic Opportunity 847 Shriver, Sargent, Director, Office of Economic Opportunity; accom- panied by Bertrand M. Harding, Deputy Director; Donald M. Baker, General Counsel; Robert A. Levine, Assistant Director, Research, Plans, Programs, and Evaluation; Theodore M. Berry, Director, Community Action Program; and Earl Johnson, Director, Legal Services Program 911 Shriver, Sargent, Director, Office of Economic Opportunity; accom- panied by Bertrand M. Harding,. Deputy Director; Donald M. Baker, General Counsel; Robert A. Levine, Assistant Director Research, Plans, Programs and Evaluation; Theodore M. . Berry, Director, Community Action Program; and Richard T. Frost, Director, Upward Bound 1097 Shriver, Sargent, Director, Office of Economic Opportunity, accom- panied by Bertrand M. Harding, Deputy Director; James Heller, Assistant General Counsel; Donald M. Baker, General Counsel; Robert A. Levine, Assistant Director, Research, Plans, Programs and Evaluation; Theodore M. Berry, Director, Community Action Programs; Joseph T. English, Assistant Director for Health Affairs; Jules Sugarman, Associate Director, Head Start; Dr. Nolan Estes, Associate Commissioner for Elementary and Secondary Education; Dr. John Frankel, Director, Health Division; Mrs. Lisbeth Barn- berger Schorr, Director, Programs, Planning and Evaluation, Office for Health Affairs, the Office of Economic Opportunity 1383 Sugarman, Jule, Associate Director, Headstart, Office of Economic Opportunity 138t III PAGENO="0004" IV CONTENTS statement of-Continued Udall, Hon. Stewart L., Secretary of the Interior; accompanied by: Robert Bennett, Commissioner of Indian Affairs; and Barney Old Coyote, Supervisor, Job Corps Conservation Program, Department Page of the Interior 1549 Vanik, Hon. Charles A., a Representative in Congress from the State of Ohio 1449 Wirtz, Hon. W. Willard, Secretary of Labor; accompanied by R. Thayne Robson, Executive Secretary, President's Committee on Manpower; Stanley H. Ruttenberg, Assistant Secretary of Labor and 1\lanpower Administrator; Jack Howard, Administrator of Bureau of Work Programs; Dr. Curtis C. Aller, Associate Man- power Administrator; Samuel V. Merrick, Assistant to the Secretary for Legislative Affairs 1185 Statements, letters, supplemental material, etc.: Berry, Theodore M., Director, Community Action program: CAP criteria for evaluating space costs 1058 Highlight memorandum for the Consumer Action Program of Bedford-Stuyvesant, Inc 1051 North Carolina Fund (table) 1013 Besse, Ralph M., chairman of the board, the Cleveland Electric Illu- minating Co., letter to Chairman Perkins, dated June 22, 1967, enclosing resolution and list of attendees 1602 Boutiii, Bernard L., Administrator Small Business Administration: EOL history-44-community SBDC program (table) 1359 Nationwide SBA program 1360 Carter, Lisle C., Jr., Assistant Secretary for Individual and Family Services, HEW: Letter to Chairman Perkins, dated August 10, 1967, enclosing memorandum from Joseph H. Meyers on Interpretation of Section 503(b) of the Economic Opportunity Act 1329 Study of title V program-summary 1305 Table 1.-Work experience and training: Enrollee character- istics, December 1965-December 1966 1309 Table 2.-Work experience and training program, estimated average cost per trainee, fiscal years 1966, 1967, and 196& 1310 Table 3.-Selected data in title V terminees in Cleveland, eastern Kentucky, and St. Paul projects 1315 English, Joseph T., Acting Assistant Director of the Office for Health Affairs, OEO: Chart 1 854 Chart 2.-Health status of the poor 854 Chart 3.-Health status for the poor 854 Chart 4.-Chronic conditions per 1,000 population (table) 854 Chart 5.-Infant mortality rates per 1,000 live births (table)~_ 855 Chart 6.-Traditional health services for the poor 855 Chart 7.-Comprehensive health services program 855 Chart 8.-Neighborhood health centers (table) 855 Chart 9.-Health resources associated with NHC 855 Chart 10.-Community response (table) 855 Chart 11.-Projection for fiscal year 1968 (table) 855 Funds going into OEO-supported neighborhood health centers from sources other than OEO 907 Ford, William D., a Representative in Congress* from the State of Michigan: Memorandum to all staff employees from William Pursell, Executive Director, Operation Breakthrough 1025 Freeman, Hon. Orville L., Secretary of Agriculture: Economic Opportunity Loan to Charlie Hamlin, Fayette County, Miss 1507 Well balanced impacted program for rural areas 1539 Frost, Richard T., Director, Upward Bound, OEO, "Characterization of 1966 Summer Upward Bound Programs," pamphlet 1147 Gardner, James C., a Representative in Congress from the State of North Carolina, "Report Dated June 19, 1967, Made by John R. Buckley, Minority Chief Investigator, Education~ ~and.. Labor Committee, U.S. House of Representatives, Washington, D.C., of Operation Breakthrough, Durham, N.C., William R. Purcell, Executive Director," from the Congressional Record, June 22, 1967. 1028 PAGENO="0005" CONTENTS V Statements, letters, supplemental material-ContInued Gardner, Hon. John W., Secretary of Health, Education, and Welfare, Page letter to Chairman Perkins, dated July 3, 1967 1183 Gibbons, Sam, a Representative in Congress from the State of Florida, newspaper article 1139 Grosvenor, John H., Jr., stated clerk, the Presbytery of Washington City, letter to Chairman Perkins, dated June 15, 1967 1587 Johnson, Earl, director, Legal Services Program, Office of Economic Opportunity: "Connecticut Welfare Law Held Unconstitutional," article in the New York Times of June 20, 1967 916 Court opinion-Vivian Marie Thompson v. Bernard Shapiro, Commissioner of Welfare of the State of Connecticut 917 Eligibility standards in the legal services program 1002 Law schools offering law and poverty courses 1009 Legal assistance for the lower and lower-middle income classes - 1004 Lindsay, Hon. John V., mayor of the city of New York, prepared statement of 951 Mobilization for youth representation of demonstrators at St. Patrick's Cathedral 948 Representation of persons in riot protest situations by legal services agencies 942 WisconsinJudicare (table) 935 Lawson, Robert E., president, Sunnyvale Community Council, Sunnyvale, Calif., letter to Senator Joseph S. Clark, enclosing report 1588 Levine, Robert A., Assistant Director, Research Plans, Programs, and Evaluation, OEO: "Systems Analysis in the War on Poverty," speech at the 29th national meeting of the Operations Research Society of America 1431 Marshall, Kenneth E., vice president, Metropolitan Applied Research Center, Inc., New York, N.Y., prepared statementof 1463 Meeds, Hon. Lloyd, a Representative in Congress from the State of Washington, memorandum from Charles E. Ehlert, assistant direc- tor, Seattle-King County Legal Services Center 927 Quie, Hon. Albert I-I., a Representative in Congress from the State of Minnesota: Assistant Area Director, Minneapolis Area* Office, Bureau of Indian Affairs, letter to David W. Meade, principal, Red Wing Public Schools, Red Wing, Minn., dated May 16, 1966 1561 Meade, David W., principal, Red Wing Public Schools, Red Wing, Minn., letter to, dated June 30, 1967 1560 Mehlberg, Wallace, Unit Supervisor, Minnesota, Indiana, and Wisconsin, OEO, letter to Wallace G. Christensen, director, Goodhue-Rice-Wabasha Citizens' Action Council, Inc., Zum- brota, Minn., dated June 19, 1967 1561 Relationship between the Bureau of Indian Affairs, Office of Economic Opportunity, and the White Earth Tribal CounciL - 1562 "Were you given enough training, to get a job," from the Harris Survey 1523 Rosenbluth, Mrs. Arthur G., president, B'nai B'rith Women, letter to Chairman Perkins, dated June 30, 1967, enclosing a resolution - 1587 Scheuer, Hon. James H., a Representative in Congress from the State of New York, "Severe Hunger Found in Mississippi," newspaper article 1409 Shriver, Sargent, Director, Office of Opportunity: Article in New York Times by Nan Robertson entitled, "Severe Hunger Found in Mississippi" 857 Article in Science Magazine by Luther J. Carter entitled, "Rural Health: OEO Launches Bold Mississippi Project" 859 Benefits and costs in the Upward Bound program 1136 Excerpt from "Meet the Press," Sunday, June 18, 1967 890 PAGENO="0006" VI CONTENTS Statements, letters, supplemental material-Continued Shriver, Sargent-Continued Information survey on Community Action activities for Older Page Americans and voter registration 1019 "Involvement of the Poor in all OEO Programs," memorandum from the Director 886 Lawndale Urban Progress Center-annual costs (table) 1064 Lindsay, Hon. John V., Mayor, New York City, press release -- 875 "Lindsay Urges Bar War on Poverty," article from Harvard Law Record (enclosure) 877 Operation Breakthrough, OEO statement on 1028 Persons served in OEO-supported family planning programs - -- 864 Release at Upward Bound Press Conference, November 30, 1966: Majority of sample Upward Bound students improved atti- tute and motivation for college 1125 Profile of Upward Bound community advisory committees~ 1128 Profile of Upward Bound programs 1127 Profile of Upward Bound staffs 1128 Profile of 20,000 Upward Bound students 1126 Student data from Upward Bound 1127 Upward Bound students comment 1128 80 percent of first Upward Bound graduates continue educa- tion 1124 Statement by, before the Select Committee on Small Business, U.S. Senate, March 15, 1967 1378 Total population, number and percent of persons with last physi- cian visit within a year, by sex, family income, and age: United States, July 1963-June 1964 (table) 871 Steffens, Mrs. Dorothy, statement on behalf of the Women's Inter- national League for Peace and Freedom 1583 Sugarman, Jule, Associate Director, Headstart, OEO: Essential criteria for approval of local programs 1429 Paid and voluntary workers evaluation sheet 1419 Poor children in the United States in need of Headstart 1413 Research andEvaluation Centers 1402 Udall, Hon. Stewart L., Secretary, Department of the Interior: Cost ratio of grant to Job Corps in regard to the number of en- rollees 1575 OEO programs on Indian reservations 1570 Watts, Lowell, chairman, Extension Committee on Organization and Policy, statement before the Rural Development Subcommittee of the House Agriculture Committee, June 19, 1967 1526 Appendix A (charts): Figure 1.-Southern Colorado Economic Development District 1531 Figure 2.-Lazy 8 Community Resource Development Project 1532 Figure 3.-Colorado Economic Development Regions as established by the State Division of Commerce and De- velopment 1533 Figure 4.-Four Corners Economic Development Region - - 1534 Figure 5.-Federation of Rocky Mountain States 1535 Appendix B.-Development Program Coordination in Arkansas 1536 Appendix C.-Typical Rural Development Activities Conducted by Mississippi Cooperative Extension Service 1537 Wirtz, Hon. W. Willard, Secretary of Labor: An Analysis of the NYC Summer Program 1223 Appendix 1.-Project Sites Visited During Summer Evalua- tion July 1-September 2 1229 Appendix 11.-Enrollee Characteristics in the Sample Projects 1231 Appendix 111.-Distribution of Primary Work Assignments ofEnrolleesinSummerProjects (chart) 1232 Appendix J~: Table 1.-Statistical summary of results of summer programs 1233 Table 2.-Terminations from summerprojects 1233 PAGENO="0007" CONTENTS VII Statements, letters, supplemental material, etc.-Continued Wirtz, Hon. Willard-Continued Interaction Forms and Reward Systems: Towards a Partial Theory of Adolescent Work Experience, by Richard E. Sykes Page and Popie Mohring, University of Minnesota 1234 Nelsonprojects 1241 Proposed fiscal year 1968 evaluation research contracts 1256 Statement of 1186 Survey of Terminees from NYC Out-of-School Projects, brief summary 1220 Universe for In-School NYC Programs 1249 Women's International League for Peace and Freedom, resolution at annual meeting, Asilomar, Calif 1586 Young, Whitney M., Jr., executive director, National Urban League: Supplementary report 963 Testimony before the Senate Labor and Public Welfare Com- mittee, June 8, 1967 955 PAGENO="0008" PAGENO="0009" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 MONDAY, JUNE 19, 1967 HOUSE OF REPRESENTATIVES, COMMITI'EE ON EDUCATION AND LABOR, Washington, D.C. The committee met at 2:50 p.m., pursuant to recess, in room 2175, Rayburn House Office Building, Hon. Carl D. Perkins (chairman of the committee) presiding. Present: Representatives Perkins, Green, Dent, Pucinski, Gibbons, Ford, Hathaway, Quie, Goodell, Scherle, Dellenback, Gardner, and Steiger. Also present: H. D. Reed, Jr., general counsel; Robert E. McCord, senior specialist; Louise Maxienne Dargans, research assistant; Ben- jamin F. Reeves, editor of committee publications; Austin Sullivan, investigator; Marian Wyman, special assistant to the chairman; Charles TV. Radcliffe, minority counsel for education; John B. Buck- ley, chief minority investigator; Dixie Barger, research assistant; and W. Phillips Rockefeller, research specialist. Chairman PERKINS. The committee will come to order. I want to apologize for causing you and the other witnesses so much inconvenience in rescheduling your appearance this afternoon, due to our executive session this morning. If I understand correctly, we are going to commence today on title II of the Economic Opportunity Act. Will you proceed in any manner that you prefer, Sargent Shriver. STATEMENTS OF SARGENT SHRIVER, DIRECTOR; BERTRAND M. HARDING, DEPUTY DIRECTOR; DONALD M. BAKER, GENERAL COUNSEL; ROBERT A. LEVINE, ASSISTANT DIRECTOR, RESEARCH, PLANS, PROGRAMS, AND EVALUATION; THEODORE M. BERRY, DIRECTOR, COMMUNITY ACTION PROGRAM; JOSEPH~ T. ENGLISH, M.D., ACTING ASSISTANT DIRECTOR OP THE OFFICE FOR HEALTH AFFAIRS; J~OHN FRANKEL, D.D.S., DIRECTOR, HEALTH DIVISION, CAP; MRS. LISBETU BAMBERGER SCHORR, DIRECTOR, PROGRAM- ING PLANNING AND EVALUATION FOR HEALTH AFFAIRS; AND JULE SUGARMAN, ASSOCIATE DIRECTOR, HEADSTART, OFFICE OF ECONOMIC OPPORTUNITY Mr. SHRIvEn. Thank you very much, Mr. Chairman and members of the committee. We are very happy to begin the discussion of title TI for a number of reasons. First of all, title II is the recipient of the largest single sum of money under the Economic Opportunity Act 847 PAGENO="0010" 848 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 proposed authorization. Second, it is the part of our bill which has the greatest variety of programs involved and, third, I believe that it is the part of our total effort which has been most difficult for most people to understand easily. It was my thought, Mr. Chairman with your permission, that it would be helpful to the members of the committee to take up particu- lar part.s of community action in some detail so that they might have a better comprehension of what we mean by community action. Second, I thought it would be helpful because this committee has already es- tablished a milestone. as far as I am concerned last week when we had a chance to present testimony about the Job Corps in some depth fol- lowed by testimony on VISTA in some depth. It is the first time we have ever had that chance. Chairman PERKINS. I can assure you that you are going to have all the opportunity that you want before this committee. Mr. SHRIVER. OEO has been criticized from time to time for not providing information, but we also get criticized for providing too much information sometimes but the record, I think will show that we never had a chance, really, to go into detail about some of these programs before this committee. We welcome it and as a consequence we would like to start off today with some of the detailed programs which constitute in their entirety community action. We would like to start off with some of the programs specifically and move from the specifics to the general. Now, I have with me today on my left Theodore Berry, who is the Director of Community Action; on my right Bert Harding, whom you know as my Deputy Director; Bob Levine in charge of research and planning; Bob Baker, the Genera.l Counsel, and directly behind me the Deputy Director of Community Action, and other officials from community action. We discussed this at some length before we came over today and thought it would be interesting to start off with some of the programs that are not as well known to this committee, for example the health program under community action. Here today with me are Dr. Joseph English, who is the Deputy Director of the health program, Dr. John Frankel, Health Director within CAP, and Mrs. Lisbeth Schorr, who has been one of the people coimected with it from the very beginning. `With your permission, Mr. Chairman, we will a.sk those people to come up here and start to testify. May I present Dr. Joseph English, who is the Deputy Director of our Health Program Division and with him, as I said, we have Dr. Frankel and Mrs. Schorr who are in the community action indirectly. Dr. ENGLISH. Thank you, Mr. Shriver. Mr. Chairman, it is a great pleasure to have this opportunity to talk to you about. some of the problems of health that we are learning about through all of OEO's efforts, not only the problems of health of the poor, but some of the opportunities and the progress we have been able to make through the legislation that you have given us. A part of the reason we think this is important we have tried to summarize on this chart over here. It goes back a long way to some- thing that Aristotle said more than 2,000 years ago. I would like to quote him: PAGENO="0011" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 849 Health of mind and body is so fundamental to the good life that if we believe that men have any personal rights at all as human beings, then they have an absolute moral right to such a measure of good health as society and society alone is able to give them. Mr. DENT. Mr. Chairman, may I interrupt? Is there a printed copy of the statement? Dr. ENGLISh. It is just an oral presentation, sir. Mr. DENT. That is all right. Dr. ENGLISH. When the Declaration of Independence was framed and when there was language in there talking about the rights of life, it might have meant one thing back in the 17th and 18th century. Today we wonder, as far as the poor are concerned, if that statement doesn't have something to do with their right not to have their lives whittled away by illness. If we take the next page there you can see that at the present time 50 percent of poor children in this country still have not had adequate immunizations; that 64 percent of poor children have never seen a dentist in their lives; that 45 percent of all women who have babies in public hospitals in this country have had absolutely no prenatal care at all, that an infant born to poor parents in this country has twice the risk of dying before reaching his first birthday, and that the chance of dying before reaching the age of 35 is four times greater for someone in a poor family in this country. The next chart shows something of our standing in the world as revealed by the 1965 United Nations Demographic Year Book. It shows the United States among other nations of the world now rank- ing 14th in the infant mortality rates per 1,000 live births. It is the poor among our people that give usthat record, and when we look at this more closely we notice that poor families still have three times more disabling heart disease than other families in this country; seven times more visual impairment; five times more retardation and. mental disorder, according to the national. health survey and that the killer diseases of the poor are still tuberculosis, influenza, pneumonia,. diseases that the economically fortunate of us may not have suffered for a generation, and that among the poor who are employed one- third of them have such chronic illness that their capacity to work is severely limited. We illustrate that on the next page of showing you the difference in incidence of chronic conditions per 1,000 population between families with incomes under $2,700 a year, and others and you see in orthopedic, heart conditions, arthritis, mental and nervous disorder, the difference between the poor in our country aud the rest of us. I think that the questions we have asked ourselves as physicians in this program, Mr. Chairman, is, with the remarkable advances in modern medical tecirnology that have been made in this country over the last 20 to 25 years, why it is that the poor in this country still have such a record of illness. I would like to present to you, sir, the answer that was given by Dr. Alonzo Yerby, the former commissioner of hospitals of the city of New York, who is now a professor of preventive medicine at the Harvard School of Public Health. Speaking before the White House Conference on Healt.h a little more than ayear ago, he said: The pervasive stigma of charity permeates our arrangements for health care fore the poor and whether the program is based on the private practice of PAGENO="0012" 850 ECONOMIC OPPORTIJNITY ACT AMEND~1ENTS OF i9~ medicine or upon public or non-profit clinics and hospitals it tends to be piece- meal to be poorly supervised and uncoordiated. In most of your larger cities the hospital outpatient department together with the emergency room provides the basic sources of care for the poor. Today's outpatient departments still retain some of the attributes of their predecessors, the Eighteenth Century dispensaries. They are crowded, lacking in concern for human dignity, and to make it worse, no longer free. And Dr. Yerby continued: To these unhappy circumstances has been added a steady proliferation of specialty clinics so that it is not uncommon for the hospital to boast of 30 or more different clinics meeting at different hours five or six days a week. The chronically ill older patient who frequently suffers from several diseases condi- tions or poor families are seen in several clinics which frequently meet on differ- ent days and even if the clinical record is present and readily available it is difficult if not impossible for any one physician to know- the patient as a person and coordinate his care. He concluded that eloquent, address that moved every physician that was in the room at that time with a call for action which is really hard to ignore. He said that Americans must learn to organize their health system in such a way that all Americans, regardless of income, will have, and I quote him again: Equal access to health services as good as we can make them and that the poor will no longer be forced to barter their dignity for their health. George James, who was the Commissioner of Hospitals of the city of New York in 1964 said that sheer poverty is the third leading cause of death in most of our cities. He told the story of an old man. some 70 years of age and at the bottom of whose. medical chart was written the statement: "This is an uncooperative patient." Upon closer investigation he had 12 separate major pathological diseases en- tities for which he had had to be referred to 10 separate clinics, and as Dr. James tells the story, he was so sick that he couldn't make his way through this web of clinics that confronts the poor in the out- patient departments where they go to be served. Taking a look at the next chart we see something of what con- fronts a poor family right here in the District of Columbia. That chart sort of summarizes the things in Dr. Yerby's statement. But to look at it a little more concretely this next chart shows a page from the District of Columbia telephone book and all the kinds of places that a poor family living in this area of our country would have to go in order to organize comprehensive health care. If we move to the next chart you can see what some of those clinics are and some of the places a person would have to go in the area if they were to try to organize for themselves comprehensive care for all the members of the family. That. chart lists some of the separate clinics that are in existence in this area that a family would have to visit, all of them open at different hours, all of them with different eligibility standards, all of them taking one or another member of the family, practically none of them admitting all of the members of the family. Mr~. GIBBoNs. Will the gentleman yield at this point? Is that broad line in the middle of the chart the Potomac River? Dr. ENGLISH. Yes, sir. That is correct. That is an attempt to repre- sent the situation in Washington but it would really not be too differ- cut in almost any city where you tried to plot out the same kind of PAGENO="0013" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 851 thing. That `is why this legislation which you have given us as a part of the community action program has really given us an opportunity to take what we as physicians have learned over the last 20 years and to bring it to people that really have not yet benefitted from this knowledge. You have given us the opportunity to provide comprehensive health services to families in poor urban and rural areas of this country and I think the language of the legislation is interesting when it states that these services should be derived from the needs of the people to be served, not just what we as physicians think is right or what is con- venient for us but that in these programs a primary emphasis be the needs of the people to be served and that it be with their participation. This is part of the way that tile community action spirit is repre- sented in this program. I would like to tell you, sir, of what this means in one community that I have personally had a chance to visit. It is the community of `Watts in Los Angeles. It is a community where a~ member of this committee has helped us in getting underway the health program that is about to open there, Congressman Hawkins. As you know, sir, the `Watts area of Los Angeles contains 350,000 people living in a land area almost the size of the city of San Francisco and in that area there is not a single hospital. When you listen to people out there as we have had a chance to do, they have a saying and it is, "Are you $10 sick," because if you get sick in `Watts you are going to have to travel an `average `of 12 miles t.o get to the county hospital. There isn't very much public transportation. It seldom goes where you i~eed to go so that `it costs you about $3 by cab to get there if you are really sick, and it i~ going to cost you $7 on an average when you do. So that unless `you are $10 sick you don't go, and this is the experience that we as physicians have seen in hospitals all over the country that the poor are much sicker by tile time tlley overcome the barriers financial and otherwise to come for care. In that community under the leadership of Dean Roger Egeberg, the dean of the University of California' School of `Medicine, that has services at the Los Angeles County `Hospital, so far away from the peo- ipie living in Watts~ they are reaching `out into tile commumty and in the middle of this' are constructing at `this moment a neighborhood health center. In a few weeks there will `be 25 full-time `physicians serv- ing the poor-30,000 of the poor in that area of Los Angeles. Many of them will be from tile University of Southern California itself; many local doctors working part or full `time in the program and for tile local practitioners in Watts. This may reduce their aliena- tion from the mainstream in American medicine because they w'ill have an opportunity to become a part of the faculty of that medical school by tileir participatiOIl in the program and to have educational pro- grams there as a result of this partnership between the medical school and the community. Those physicians, sir, will be organized with the needs of the entire family in mind. They will be organized in family health teams with an internist available for the adults in the family, pediatricians to take care of the children and public health workers and social workers to help out. People from the neighborhood will be a part PAGENO="0014" 852 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 of that team and each time a family walks into that center the whole family will get all of the services, not only medical, but social serv- ices too, and will have the opportunity to see the same health team each time which will provide the kind of continuity and personalized ~care that we know is as necessary for the poor as for the rest of us. The quality of care given there will be first rate because it will be under the auspices of a medical school for the first time in that community. The services will be accessible and acceptable to the poor. They will be in the neighborhood where those people live, which over- comes part of the problem of transportation. And if it is true as in the other centers, the neighborhood people will ask for that center to be open until 10 o'clock at night and over the weekends. That is typical of what the neighborhoods have asked and they are open at those kinds of hours for the convenience of the people who live there. When a person requires more in the way of medical help, then that neighborhood center can provide transportation and appointment to a hospital bed at the Los Angeles County Hospital just as you or I would have. If the person~ needs more specialized outpatient services they can be provided but the person doesn't go to a web of 30 dif- ferent clinics, he goes to the one that his doctor in this neighborhood thinks that he ought to go to, and the doctor is able to follow his clini- cal course there because he is a member of the staff of the hospital as well as working in the neighborhood where the center is located. Mr. Chairman, If all we do in that center is provide high-quality health care of the kind the University of Southern California School of Medicine is going to make possible, I think and the physicians from the University of Southern California feel that we fall short because, sir, when you have been in that community for a while and have looked at it and listened to those people you realize that their problems and their desires are even more basic than health, that they are interested in jobs. Such a high percentage of the male members of that community are unemployed; and that is why at this center neighboorhood people will be employed. They will not only be employed as receptionists and clerks and working in the record room and pharmacy and other kinds of service, but the University of Southern California physicians are developing a system of tandem training whereby they will be trained for new health careers in the center from the day it opens, and it will mean that the health occupations will open up for the first time to some of the people living in that community and that notion of jobs is almost as important to them as the health services that will become available for the first time. Then, sir, over and above the issue of jobs is the participation of the community itself in the planning of the center, in their wish that it be there, in the help that they are giving to the physicians in the neighborhood health council made up of grassroots neighborhood peo- pie that are assisting the physicians. That to us is one of the most critical aspects of what is happening. I had an opportunity not too long ago to visit the neighborhood council in Watts and I don't think that I shall. ever forget what Mi'. Brown, who is a member of that neighborhood council, said. He talked about a visitor who had come out to Watts to see the new PAGENO="0015" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 853 health center and was disappointed when some of the neighborhood people took him down to the place where it was being constructed. There were only pipes coming up through the ground and there was nothing to see. The visitor left disappointed. Mr. Brown said, "You know, Dr. English, it shows you the difference between someone from the outside looks at those pipes coming up from the ground and the way we the people of Watts look at it. Let me tell you about those pipes. Those pipes are the promise to us, they are the promise of some- thing growing out there but it is growing inside us. For the first time the people m this community feel that they have their teeth into something. And-as I quote him-"We are going to stay kicking to keep it." I think that expains, Mr. Chairman, why if you walk down the streets in Watts where that center is going up you see the children not only looking through the fence every day and watching the pipes really turn into the center that will soon be open there, but you see them wearing the button that says, "Better health for Watts." This is the kind of thing that the neighborhood in its interest in the center is wearing to symbolize the way they feel it to be their own. So sir, although we hope to give high quality health services, part of the reason it is a community action is because there are other things about it that are as important in the terms of the participation of the people themselves. I would like to tell you about some of the things that we are learn- ing in communities where centers are already underway. For ex- ample, if you take the number of persons who have seen a physician at least once during the previous year in the TJnited States at large for families with incomes under $4,000 a year, you will find that less than 60 percent of those families would have seen a physician in the last year. But if you go to the city of Denver where that would have been true 2 years ago but where we now have one of these neighborhood health centers under operation, 85 percent of the people in that community have seen a physician now in the last year. If you go to Boston to Columbia Point where Tufts Medical School has done one of these centers, 92 percent of the people living in that community have now seen a physician for the first time in the last year. If you take the percentage of mothers receiving prenatal care in this country, and you recall that of the mothers of the babies, 50 to 55 percent never received any prenatal care, you will find that figure was true in Columbia Point before the Tufts Medical School started a center. In 1 year's time 97 percent of the mothers in Columbia Point, Boston, have received prenatal care. . In Denver where we are dealing with a larger population it is now between 85 and 95 percent of the mothers. Less than 11 percent of children from families with incomes under $4,000 a year saw a pedia- trician last year. But in Denver last year 85 to 95 percent of the children under 15 years of age saw a pediatrician; at Columbia Point it is already up to 95 percent. Sir, we have not yet had enough experience in these programs to be able to give you definitive statements about their results but I think these figures are some indication of what is being made available to PAGENO="0016" 854 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 communities of the poor for the first time through these centers. We hope with your help in the next year to make it available t.o many more. Thank you, sir. Chairman PERKINS. I think we will defer questioning until we get the complete picture from your health program witnesses. Mr. SHRIVER. Thank you, Mr. Chairman and Dr. English. I think that Dr. English and his colleagues, John Frankel and Mrs. Schorr would be happy to respond to questions about this particular part of the community action program, if there are any, Mr. Chairman. Chairman PERKINS. Yes. Mr. GIBBONS. Those charts were so good there. I wonder if you could include them in the record. I think they would be very helpful. I would ask unanimous consent that the charts used to illustrate Dr. English's talk be included at this point in the record. Chairman PERKINS. Is there objection? The Chair hears none. So ordered. (The charts follow:) OFFICE OF ECONOMIC OPPORTUNITY, HEALTH DIVISION CHART 1 "Health of mind and body is so fundamental to the good life that if we be- lieve that men have any personal rights at all as human beings, then they have an absolute moral right to such a measure of good health as society and so- ciety alone is able to give them." Aristotle, Politics. CHART 2.-HEALTH STATtTS OF THE POOR 50% of poor children have not had adequate immunization. 64% of poor children have never seen a dentist. 45% of all women who have babies in public hospitals have no prenatal care. An infant born to poor parents has twice the risk of dying before reaching his first birthday. The chance of dying before reaching the age of 35 is 4 times greater for the poor. CHART 3.-HEALTH STATTJS FOR THE POOR Poor families have: 3 times more disabling heart disease. 7 times more visual impairment. 5 times more mental illness, retardation, nervous disorders. Dreaded and often fatal diseases of the poor are tuberculosis, influenza, and pneumonia-diseases which the more economically fortunate have not suffered for a generation. Among the poor who are employed, 1/~ have chronic illness that severely limits their ability to work. CHART 4.-Chronic conditions jer 1,000 population-Poor' (under $2,700 annual income) -0th er Orthopedic Heart Arthritis- Mental- High blood impairments conditions rheumatism nervous pressure disorder Poor Other 32 15 30 12 27 8.7 19 4.2 17.3 4.2 I DHEW National Center for Health Statistics. PAGENO="0017" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 855 CHART 5.-INFANT MORTALITY RATES PER 1,000 Livz BIRTHS1 Sweden 12.4 Switzerland 19.0 Netherlands 14.4 United Kingdom 19. 0 Norway 16. 8 New Zealand 19. 5 Finland 17. 4 France 22. 0 Australia 18. 5 Belgium 24. 1 Japan 18. 5 Canada 24. 7 Denmark 18.7 UNITED STATES 24.7 1 The 1065 United Nations Demographic Yearbook. CHART 6.-TRADITIONAL HEALTH SERVICES FOR THE POOR Fragmented services; Inaccessible; Inconvenient hours; Impersonal; Dismal environment; Confusing eligibility standards; Discontinuous. CHART 7.-COMPREHENSIVE NEIGHBORHOOD HEALTH SERVICES PROGRAM Broad scope of services for the entire family. High quality of professional care. Acceptable and accessible to the poor. Simplified eligibility criteria. Integration with other health funds and services. Personalized care. Community participation. Utilization of Neighborhood people in paramedical and other roles. Training for new health careers. Neighborhood health council. Opportunity for innovation in delivery of health services. CHART 8.-NEIGHBORHOOD HEALTH CENTERS FY 1966: $9.8 million, 8 centers funded. FY 1967: $49 million, 13 new centers funded; 12-15 additional centers to be funded. Total (end Fiscal 1967) : Approximately 35 Neighborhood Health Centers. CHART 9.-HEALTH RESOURCES ASSOCIATED WITH NHC Public Health Departments; Medical & other health professional schools; Medical societies; Dental societies; Public & private hospitals; Voluntary health agencies; Community mental health & retardation centers; Group practice organizations; CHART 10.-Community response (June 5, 1967) Number Funds requested (millions) Letters of intent Preliminary proposals received Formal proposals received Total proposals, fiscal year 1967 39 20 69 $25. 0 110. 6 89 135. 6 CHART 11.-Projection for fiscal year 1968 Refunding: $40 to $45 million for 35 centers. New centers: $15 to $20 million for 10 to 15 centers. Total, $60 million for 45 to 50 centers. PERSONS SERVED IN OEO-SUPPORTED FAMILY PLANNING PROGRAMS (1) There are at present seventy-nine local initiative family planning pro- grams funded under Sections 205 and 207. These programs are providing family planning information and services for 80,000 persons. 80-084-67-pt. 2-2 PAGENO="0018" 856 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 (2) The 35 centers to be funded by the end of FY `67 are planned to serve 500,000 persons. Of this population, approximately 100,000 to 120,000 will be women of the child-bearing age. On the basis of the utilization of family plan- ning services when they have been made available elsewhere, 60,000 to 75,000 of these women can be expected to avail themselves of these services at the Neighborhood Health Centers. Chairman PERKINS. On the health aspects of community action pro- grams, I was certainly impressed when you stated that 50 percent of the poor were not receiving adequate immunization programs and 64 percent of the poor had never seen a dentist and that heart disease is three times more prevalent among the poor. I have before me a letter that I received from Dr. Russell L. Hall, M.D., of Prestonsburg, Ky., which I think points up the good work in the field of preventive and remedial health. I know in many poor counties, particularly throughout the mining area that I represent, the greatest need perhaps is adequate health service for people. When we enacted the Community Health Professions Act of 1961 it added on to the public health programs and the public health services that our people were receiving, especially children, but by and large so little has been done. In the Elementary and Secondary Education Act we were able to do a little more in meeting the very basic health needs of pupils which pose learning difficulties, but this doctor writing to me has been so criti- cal of the community action programs over the last 3 years that I thought this letter was most impressive. He writes this on June? and says that he is- * * * greatly pleased by our comprehensive health program for Floyd County. In my 8 years in public health, this is the soundest and best program we have ever had approved. If circumstances permit it to be funded for the full 5 years, the results will not only immensely upgrade the health environment for the young and elderly of Floyd County-it will have woven the pattern for other counties in other States. Then he goes ahead and discusses the good that is going to flow from this program. I am of the same opinion. We do not have comprehensive health centers under any programs that we have at the present time. Your efforts to provide programs of this kind mean so much more to the people who have been traditionally bypassed that are its bene- ficiaries. I am most hopeful myself that we can do more in the field of both rehabilitative and remedial health and personally want to compliment the Director, Sargent Shriver, himself, for these broad community action health centers that you have inaugurated. I think it speaks well of your program in this country. Thank you. Mr. BERRY. Mr. Chairman, you may be interested to know that of those that we have been able to fund with the amount of money appropriated for this fiscal year, probably one which bids fair to have the same productive quality as the one in Denver is in Louisville, Ky. This evidences both the coopera~tion and coordination of public and private funds both through the medical college, private foundations, as well as our funds. Also in Floyd, Ky.; and in Leslie, Ky., com- munity action health programs have recently been funded. One of the early things that we did with our limited funds was to give assistance both to t.he TJniversity of Kentucky and the complex of hospitals formerly established by the United Mine Workers,~ trans- PAGENO="0019" ECONOMIC OPPORTTJNITY ACT AMENDMENTS OF 1967 857 f erred to the Presbyterian Foundation or board. Giving assistance helped develop that complex of hospitals into a continuing health pro- gram on a regional basis in eastern Kentucky and West Virginia. Chairman PERKINS. How much money have you expended up to the present for these comprehensive health programs and just who is being served and just how much money would it take to fund pro- grams of this kind throughout the country? Mr. BERRY. Of the $49 million which was appropriated earmarked for health services, comprehensive health programs this year, we have up to last Friday funded by grants some $32 million, and there are programs or proposals that are pending totaling some $136 million. We expect to fund the balance of the $49 million before the end of the month. Dr. Frankel has the details on the proposals. The grants have been broadly distributed both in rural as well as urban areas. Demographi- cally they. are located in various sections of the country, by no means adequate to the need but an equitable distribution as far as we could ascertain in relation to the quality of the proposals that have come from the various communities. Chairman PERKINS. Do you have good cooperation between your neighborhood health centers and your local hospitals? Mr. BERRY. I would say in the great preponderance of the cases where grants have been made hospitals have been an integral part in developing them. Dr. ENGLISH. If I could elaborate in a rural area of great need in terms of the way we are trying to work with local hospitals I am sure that you, sir, and members of the committee may have seen the report in Saturday morning's New York Times that sort of dramatizes the terrible problems of health that affect people in rural parts of this country. I have a clipping from it that I would be glad to submit for the record if you wish, sir. Chairman PERKINS. Without objection, so ordered. (The clipping follows:) (Article in New York Times] SEVERE HUNGER FOUND IN MISSISSIPPI By Nan Robertson WAsHINGToN, June 16-A team of doctors who recently returned from Missis- sippi told Congress today that they had found hunger approaching starvation and serious untreated diseases among hundreds of Negro children there. The doctors met with members of Senator Joseph S. Clark's Subcommittee on Manpower, Employment and Poverty after a four-day inspection of conditions in Humphreys, Leflore, Clarke, Wayne, Neshoba and Greene Counties. In all, they saw and talked with 600 to 700 children, as well as extensively interviewing about two dozen families. They described the health of the poor children there as "pitiful," "alarming," "unbelievable" and "appalling," even though Mississippi has reached a higher percentage of its poor with food programs, using Federal antipoverty funds, than any state. FIELD FOUNDATION PAID The team, sent with money from the Field Foundation of New York, whose major interests are child welfare and intercultural and interracial relations was made up of the following doctors: Dr. Robert Coles, a child psychiatrist with the University Health Service, Harvard University, who is the author of "Children of Crisis"; Dr. Raymond PAGENO="0020" 858 ECONOMIC OPPORTLTNITY ACT AMENDMENTS OF 1967 Wheeler, an internist in private practice in Charlotte, N.C.; Dr. Alan Mermann, a pediatrician and assistant clinical professor at Yale Medical School, who made a medical survey in Lowndes County, Alabama, last year, and Dr. Joseph Bren- ner of the medical department of the Massachusetts Institute of Technology, who has made other medical inspections of the South and in Africa. Dr. Wheeler, who is executive committee chairman of the Southern Regional Council, a private group whose stated goal is equal opportunity for all South- erners, said he had been born and raised in the South but had not been prepared for what he saw in Mississippi. He stressed the "absence of compassion and concern" among health and wel- fare workers and described one child who came for treatment with a "nasty laceration." The nurse gave the child a tetanus shot, Dr. Wheeler said, but "didn't dress the wound." "She didn't even look at the wound," he said. In "child after child," the doctors said they had seen nutritional and medical conditions "we can only describe as shocking-even to a group of physicians whose work involves daily confrontation with disease and suffering." They said they had seen children afflicted with suppurating sores, severe anemia, ear, eye and bone diseases, heart and lung ailments that had gone un- diagnosed and untreated, chronic diarrhea, "appalling" tooth decay and, "in every county we visited, obvious evidence of severe malnutrition." AS BAD AS AFRICA The doctors' report continued: "We do not want to quibble over words, but `malnutrition' is not quite what we found; the boys and girls we saw were hungry-weak, in pain, sick; their lives are being shortened . . . They are suffering from hunger and disease and directly or indirectly they are dying from them-which is exactly what `starva- tion' means." The doctors made their disclosures in discussions with the Senate subcommit- tee at a lunch in the New Senate Office Building, and later at a news conference. Dr. Brenner, who had spent one year in East Africa, said he had found health conditions in the South among the poor as bad or worse than those among primi- tive tribal Africans in Kenya and Aden. "It is fantastic," he said, "that this should be so in the wealthiest nation in the world-the wealthiest nation that ever was." The team emphasized that the families they saw in Mississippi were totally isolated, unseen and outside the "American money economy." They described some who struggled to live on $15 a week, which they earned after working 55 hours, with children who ate biscuit for breakfast, boiled beans for lunch and bread and molasses for dinner. They saw women, they said, "who had not had money in their hands for weeks." Therefore, they said, the Government should change the food stamp program so that the rural poor could obtain food stamps free. The stamps now cost from a monthly minimum of $2 for each applicant to a maximum of $12 for large families. They can be used to buy quantities of food worth much more than those amounts. The doctors also met with Assistant Secretary of Agriculture George L. Mehren and his staff, and said they had found them honest and concerned. But the team was also "discouraged" by reports of Congressional opposition to the free distribution of stamps, even to penniless families whose fathers are de- clared "able-bodied" thus making them ineligible for welfare. Senator Clark is planning to hold public hearings on the doctors' survey next month. Dr. ENGLIsI-I. May I quote one paragraph: In "child after child," the doctors said they had seen nutritional and medical conditions "we can only describe as shocking-even to a group of physicians whose work involves daily confrontation with disease and suffering." They said they had seen children afflicted with suppurating sores, severe anemia, ear, eye and bone diseases, heart and lung ailments that had gone un- diagnosed and untreated, chronic diarrhea, "appalling" tooth decay and, "in every county we visited, obviously evidence of severe malnutrition." The doctors' report continued: "We do not want to quibble over words, but malnutrition is not quite what we found; the boys and girls we saw were PAGENO="0021" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 859 hungry-weak, in pain, sick; their lives are being shortened . . . They are suf- fering from hunger and disease and directly or indirectly they are dying from them-which is exactly what `starvation' means." Sir, that is a part of the country rural Mississippi where in partner- ship with the Tufts University School of Medicine the people of Bolivar, Miss., one of the poorest rural areas of the country, are about to start a rural neighborhood health center. Science magazine, which is probably one of the best-read scientific and medical publications- Chairman PERKINS. HOW significant is State participation of title XIX of the Social Security Amendments of 1965? Dr. ENGLISH. I think it is significant in two ways, Mr. Chairman. First., in many of the poorest areas in the country it make take a while before those States are able to implement title XIX so that our pro- gram together with other programs like the Public Health Service programs are able to work together to provide comprehensive care until title XIX is implemented. Then in a State where it is imple- mented our program is a sort of conduit sothat the money that becomes available through title XIX legislation will come out in comprehen- sive health care. Money is only part of the problem. When there are no doctors or hospitals and you have to travel 400 miles in some parts of the rural areas of this country you need more than just to break down the fi- nancial barrier. If I could I would like to submit the article from Science magazine. Chairman PERKINS. Without objection, so ordered. (The article follows:) [Article in Science Magazine] RURAL HEALTH: OEO LAUNCHES BOLD Mississt~~I PROJECT In the health field, medical research was the favorecl.child of previous admin- istrations and . research activities flourished. The Johnson administration, though by no means allowing the research establishment to suffer harsh depriva- tion, has been placing a new emphasis on the delivery of health services. Accordingly, the effort under the antipoverty program to provide comprehensive health care centers for the poor is, while still small, growing rapidly. The first "neighborhood health centers" were established in urban slums, but soon some centers will be springing up in rural America. There the problem is not so much that of reorganizing and supplementing available health resources- the great need in the cities-is that of creating resources where few now exist. By June 1, the Office of Economic Opportunity (OEO) had made grants totaling more than $30 million for a score of comprehensive health projects, including six rural projects approved within the last few months. Neighborhood health centers are operating in Denver (Soience, July 29, 198G), Boston, New York, and several other cities. Now Tufts University School of Medicine, which is operating the Columbia Point project in Boston, will undertake a similar venture in the Mississippi community of Mound Bayou, an all-Negro town in Bolivar County, at the heart of the cotton-growing delta region. The Mound Bayou center, the first and most ambitious of the comprehensive rural health projects OEO has approved, will open this August and begin serv- ing the poor of a 400-square-mile area with a population of about 14,000. The estimated cost of the project during its first 9 months is about $1 million, which will cover the purchase of medical equipment as well as operating expenses. Other rural or rural-and-small-town health-center projects approved by OEO include those planned for Monterey County, California, Bellaire, Ohio, and two counties in Appalachian Kentucky. A steady increase in the number of neighborhood health centers, urban and rural, is contemplated. President Johnson has endorsed an OEO goal of 50 PAGENO="0022" 860 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 centers in operation by July 1968. Besides being appreciated in their own right, the centers are regarded by some antipoverty strategists as an excellent enter- ing wedge for an extensive antipoverty effort. As one health project director put it, "even if you don't give a damn about dead babies, it's just not politic to say so." The Mound Bayou center, or "Delta Community Health Agency," represents an attempt to shape a winning strategy for aiding one of the nation's major poverty groups. Not only do the Negroes of the rural South constitute a large poverty group in their native region but they are the source of the great flow of migrants into the ghettoes of the cities of the North and West. The project at Mound Bayou will not be typical of others OEO may sponsor in the South. for it skirts certain racial and political problems. Ordinarily OEO expects local community action agencies (CAP's) to serve as project contractors. But the planning that has led to the Mound Bayou center was initiated by Tufts Medical School's department of preventive medicine as a research and demon- stration project. If the Bolivar County CAP had initiated the project-not a likely possibility-the difficulty of doing anything truly innovative in the face of opposition from the delta area's extremely conservative politicians and phy- sicians would have been enormous. Tufts, by selecting a Negro community as the site and by contributing its own professional resources to the center, seems to have largely avoided this problem. Nearly two-thirds of Bolivar County's 58,400 inhabitants are Negroes, and for 60 square miles or so around Mound Bayou, in the northern part of the county, almost all the land is Negro-owned. Mound Bayou traces its beginnings to the period following Reconstruction; it became an incorporated town in 1898 and now has a population of about 1300. The mayor and other local officials are Negroes. Although the Mound Bayou area has an unusual number of Negroes earning decent livings from their cotton farms and business enterprises, the popula- tion in general is poor and the pressures to migrate are heavy. From 1950 to 1960, in the county as a whole, the Negro population declined by more than 14 percent. A high infant mortality rate (56.2 per 1000 live births during 1064) indicates the deplorable health conditions under which most Bolivar Negroes live. And in Bolivar, as elsewhere, the companion of poverty and ill health is ignorance. At least half of the county's adult Negroes have less than a fifth- grade education. Left to itself, Bolivar would be a long time in bringing good health services to the Negro population. There are some 20 physicians, three of them Negroes, practicing in the county; only a few live in the area is which OEO health center is to provide intensive service. In this area there are two small, financially hard- pressed hopsitals founded by Negro fraternal orders; each is attended by a Negro physician who devotes some time to private practice. Bolivar's principal medical facility is the modern hospital at Cleveland, the county seat, where most of the 20 doctors practice. This hospital has been unwilling to comply with the Civil Rights Act of 1064, and unless it shows evidence of a change of policy its access to federal funds will be cut off this month. The Tufts staff found that many of Bolivar's. poor Negroes have no ready access to medical service. Bolivar has no public "charity" hospital, and a barrier to admission to the county hopsital is the frequent demand for a $50 cash pay- ment in advance. Negroes are often referred to the state charity hospital at Vicksburg, more than 100 miles away. Moving into this near-vacuum, the Mount Bayou center will provide free diag- nostic service and treatment for all the poor of its service area. An ambitious "outreach" program will be mounted to encourage families to use the center. When the center's staff attains top strength it will have a full range of health personnel and social workers. The director will be an M.D., H. Jack Geiger, professor of preventive medicine at Tufts. The associate director will be a Negro social worker from Boston. In addition to 12 physicians (pediatricians, internists, obstetrician-gynecologists, a psychiatrist, and a surgeon), the staff will include 11 registered nurses, two nurse midwives, three social workers, a nutritionist, and various laboratory technicians and other health workers. A large corps of nonprofessional workers will be recruited locally and trained for such tasks as health education, improving environmental sanitation, and organizing the community health associations which are expected eventually to take part in deciding center policies. Meaningful community participation in PAGENO="0023" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 861 policy-making, which has a high place in antipoverty-war doctrine, is expected to be much more difficult to achieve for Bolivar's widely dispersed rural population than it has been for the urban poor. A crucial question concerning OEO's neighborhood health centers is that of whether they will be able to maintain their initial quality and élan. The question will be even more pertinent in the case of a center started by a university team which eventually will depart. Geiger says the hope is that within 5 years the Mound Bayou center will be staffed and directed primariy by Mississippians. Four of the physicians on the original staff will come directly from Tufts (all staff physicians will hold faculty appointments). But Geiger has a stack of letters from Negro physicians, technicians, and nurses who were born in Mississippi and would like to return, provided good professional opportunities are available. All three of the Negro physicians Geiger has hired thus far for the center are natives of Mississippi, and two of them were recruited in the North. Tufts and OEO are seeking to strengthen the Mound Bayou hopsitals as a step toward enlarging the pool of technical and professional resources available to the health center. Most of the center's patients needing bed care will be referred to one of these institutions, and, as the hopsital staffs are expanded, joint ap- pointments to the hospitals and the center should be possible. The hospitals, which have been merged administratively, are expected to receive a federal grant for an expansion program planned for an expansion program planned with the as- sistance of Tufts and of Meharry Medical College, of Nashville, Tennessee, where about half of the nation's Negro physicians have been trained. The Mound Bayou center's long-run prospects for achieving a major degree of financial self-sufficiency depend, Geiger believes, on an improvement in the area's economic condition. Tufts, along with Atlanta University and several federal agencies, is assisting in the planning of a general upgrading of public facilities, and in efforts to bring in industry. The health center and the local hospitals would benefit financially from Medi- caid, but Mississippi has not yet elected to participate in this program of assist- ance to the medically indigent. However, the Mississippi State Medical Associa- tion, which views the Mound Bayou project with distaste, has been promoting the establishment of a Title 19 program. The comment has been made that, with- out Medicaid, other OEO health centers are likely to be established. "I'm de- lighted that the OEO program acts as that kind of a catalyst," says Geiger. Geiger adds, however, that he hopes his center will enjoy cooperative and non- competitive relations with the state and county health agencies and with white as well as Negro physicians. Even before Mound Bayou was chosen as the site, Geiger discussed the project with Archie L. Gray, the state health commissioner. He has since explained it to a number of other individuals and groups belonging to Mississippi's medical community. The response has not been encouraging. Gray appears to regard the center as a Trojan horse. "My feeling is that its purposes are other than as stated," he says cryptically. Such suspicions have not been lightened by the knowledge that during Mississippi's long, hot summer of 1964 Geiger served at Jackson with the Medical Committee for Human Rights, a group concerned with civil rights and health. The Delta Medical Society, to which Bolivar County's white physicians belong, has condemned the Mound Bayou project, reportedly by a vote of 30 to 1, with a few members abstaining. To many, the project smacks, no doubt, of socialized medicine. But the thing perhaps resented most of all is the fact that the project will be run by outsiders-by Tufts, a Yankee institution. Could the project's apparent isolation from Mississippi's white medical estab- lishment have been avoided? Might it have been possible, for instance, to have the University of Mississippi Medical Center, at Jackson, collaborate with Tufts in running the Delta Health Agency? No definite answer is possible, for, although the delta project has been discussed with the university, neither Tufts nor OEO has suggested or contemplated that the University Medical Center might share in the project management. Yet, although the Medical Center has had progres- sive leadership, it seems altogether unlikely that, whatever its inclinations, the center would have found it politically possible to take a major part in the project. The Tufts Medical School is planning a curriculum revision to reflect, among other things, a greater concern for the delivery of health services and for the social conditions contributing to ill-health. Its senior-year students as well as some of its faculty will be taking part in its health center projects. Each student will be assigned to a family health care group, an interdisciplinary team (a PAGENO="0024" 862 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 pediatrician, an internist, a social worker, and community health nurse) respon- sible for the care of certain families. The team will meet daily to pool informa- tion and make a diagnosis of fundamental family health problems. Tufts expects such innovations as the family health care groups and the exten- sive use of nurses and other health workers for all tasks not requiring a physi- cian's special skills to permit high quality of care at reasonable cost. "It's cheap- er." Geiger says, "for health workers to teach mothers how to avoid contamina- tion of water and food supplies than it is for a doctor to stay up all night giving intravenous fluids to a moribund infant with infectious diarrhea." Thus, a prospectus for a breakthrough in comprehensive health care for the rural poor of the Deep South has been drawn up. Variations of the Mound Bayou project, and probably some markedly different formulations, will have to be tested before OEO develops a health program flexible enough in concept and execution to succeed in a variety of rural situations. In some rural areas the force of habit and the influence of conservative local physicians will be such that attempts to launch even mildly innovative health programs will meet with difficulties. Indeed, a few years ago four counties in eastern Kentucky were excluded from a more or less conventional diagnostic screening program by the U.S. Public Health Service because of opposition or lack of cooperation from the local medical societies. The success of even the best-planned programs for delivery of health services in poor rural regions will depend partly on an infusion of federal funds to bring about stronger networks of regional hospitals and satellite facilities. The Appa- lachian Regional Commission is supporting a program in Kentucky and eight other states to provide comprehensive care by improving facilities and reorga- nizing services along lines of regional cooperation. Similar efforts are likely to be needed elsewhere. New Social Security and public-assistance programs, such as Medicare and Medicaid, should make it possible for doctors to practice in poor rural areas and still enjoy large incomes. For example, the lone private practitioner in the village of Hyclen, Kentucky, saw his taxable income increase from about S5000 in 1962 to ~35,OOO last year. His case is exceptional only in that most doctors of Appalachia were earning substantially more than he was in 1962 and many are earning more than he is today. Given the improved financial incentives and the growing federal efforts to overcome the national shortage of physicians, rural areas should soon be attracting and holding more doctors. But while new facilities and more physicians are vitally needed, the expe- rience of the cities has demonstrated that, unless the delivery of services is im- proved and made more responsive to the needs of patients, magnificent hospital buildings and well-trained staffs do surprisingly little good for large numbers of the poor. In its programs in Mississippi and other states, OEO is trying to show- that the health needs of poverty areas of rural as well as urban America can be met. LUTHER J. CARTER. Mr. Quir. Mr. Chairman. How many of the 35 health centers are rural and how many are urban? I am referring to the 35 that will be completed by the end of the fiscal year? Dr. ENGLISH. So far, of the 21 that have been funded this year, I believe six of these would be rural programs. We may still be able to fund a few additional rural programs this year. We hope to move into even more of an emphasis on the rural areas next year. Mr. Q.UIE. Are you talking about six out of the total of 35 or six out of the new ones funded this fiscal year? Dr. 1~NGLISH. Six out of the 21 that have been funded so far this year. Mr. QUIE. Does that include the eight that were funded last year? Dr. ENGLISH. Of the eight that were funded last year~ Mr. BERRY. Of the eight last year Tufts Medical College for Bohivar County was the one rural. I would think that the Red Lake tribal grant for medical services in Minnesota would be included as a rural one, too. Mr. QUIE. Will that be classed as a medical center when completed? PAGENO="0025" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 863 Mr. BERRY. Yes; it will. Mr. QUIE. What is the difficulty in the rural areas where 46 per- cent of the poverty exists? Has that figure changed? Mr. BERRY. Forty-five. Mr. QUIR. What is the difficulty in getting them started in the rural areas? Dr. ENGLISH. In a city there may be many hospitals and medical schools and societies that really just have to get together to organize their services in such a way that a neighborhood can receive compre- hensive health care. In the rural areas in this country there is the shortage of physicians and nurses and hospitals. It is much more diffi- cult, really, to try to bring about a program of comprehensive health care in a rural area. We find we have to give a great deal more com- prehensive assistance. It takes a little longer on the average than in an urban area to get one underway. Mr. Qur~. Are the rural centers connected with a medical school like the Red Lake Indian Reservation which has doctors from the University of Minnesota Medical School? Dr. ENGLISH. In every instance where we can make that link we try to do it. In Kentucky the University of Kentucky School of Medicine is being very helpful to us. In Mississippi the Tufts Medi- cal School is being very helpful to us. Mr. QUIE. You talked about Watts in Los Angeles. The community action agency covers a much larger area than Watts. How do you de- termine what a neighborhood is both in the rural and urban centers? Dr. ENGLISH. We have a great deal t.o learn there, Mr. Congress- man. In an urban area we attempt to serve a community of between 10,000 and 30,000 people. In a rural area the target population is somewhat smaller than that because of the geographic spread. That determination we leave to local people. Mr. QUIE. Who are these local people, the community action agency or the medical people? Dr. ENGLISH. In most cases it is the community action agency that finds and works with the medical school involved and then it is a co- operative thing. They work that out together and recommend it. to us. Mr. QmE. What do you do in the way of family planning in the neighborhood health centers? What I mean is, is it limited to mothers who are living with their husbands and is it just advice or do you distribute contraceptives as well? Dr. ENGLISH. The same criteria that are applied to family plan- rung programs anywhere would apply to the neighborhood health cen- ter as well. The neighborhood people working with the physicians as well as the physicians themselves have a great deal to say about what services they wish to have there to serve the community. If they wish to have educatiOn programs and family planning available we can support that.. We are able to support it. within the general guidelines of OEO community action for family planning. Mr. QUIE. You talk about services. I wondered if you mean contra- ceptives. Dr. ENGLISH. Yes, sir. . Mr. QtIE. How about the question of whether they should be mar- ried or not. Can nonmarried women who want help in both advice and contraceptives receive it from a neighborhood health center? PAGENO="0026" 864 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. SHRIVER. The answer is "Yes," under the law which was changed last year. Mr. BAKER. The standard must be determined locally according to the changes of last year. Mr. QUIE. You are using the language in the law which I thought was permissive. Mr. BAKER. It ispermissive. It has to be locally determined. We will not decide whether it be limited to married women or the age. It is up to them. Mr. Q.uIE. Will there be an individual who dethrmines it, or will there be a policy decision made at the neighborhood health center, and in this case is it the community action agency or the medical people who make this decision? Mr. BAKER. It would be the community action agency. Mr. Quin. The community action agency will decide this question themselves. How do they decide it? Mr. BAKER. It is decided at the time they apply. Mr. SHRIVER. This is Dr. John Frankel. He may have the actual record. Dr. FRANKEL. So far as I know, the plans for all the old centers and the newly funded ones, and those that we are contemplating funding, do call for a very broad scope of family planning activity, including the provision of devices and drugs for both married and unmarried women where appropriate. Mr. QmE. Do you have any information to provide for the record on the number of women who are receiving this help or don't you have this kind of detailed information Dr. FRANKEL. I think it would be most appropriate from our local incentive-supported programs but we can provide it for both 205 and for 211. I think we can provide that for the record. Mr. QUIE. I think this would be helpful. Mr. Chairman, even though my time is up, I want to say that I usually don't give any bouquets to the Office of Economic Opportunity, but I think that the neighborhood health centers have done a tremendous job. I just want to compliment the Director and those who are working with him. From the little I have been able to observe, I am pleased to see the movement into fam- ily planning. And I know it has not been publicized the way some things have been in the Office of Economic Opportunity. (The information requested follows:) PERSONS SEnvIn IN OEO-SUPPORTED FAMILY Pr~&NNING PROGRAMS (1) There are at present seventy-nine local initiative family planning pro- grams funded under Sections 205 and 207. These programs are providing family planning information and services for 80,000 persons. (2) The 35 Neighborhood Health Centers to be funded under Section 211-2 by the end of FY 1967 are planned to serve 500,000 persons. Of this population, approximately 100,000-120,000 will be women of the child-bearing age. On the basis of the utilization of family planning services when they have been made available elsewhere, 60,000-75000 of these women can be expected to avail them- selves of these services at the Neighborhood Health Centers. Mr. SHElVER. Mr. Chairman, could I add one point to what Dr. English has been saying about the local initiative? In every case so far, the local medical associations have supported the opening of these cen- ters and we have been particularly encouraged by the response from PAGENO="0027" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 865 the American Medical Association itself, not necessarily as an asso- ciation but from the leaders of it, like the current president, Dr. Charles Hudson, and from the Washington representatives of the AMA who have endorsed what we are doing, and actually said that they were warmly sympathetic to what we were undertaking. This has made our work with local medical societies much easier and has produced a good cooperation which Dr. English was describing earlier. Mrs. GREEN. I too want to comment on what I thought was a most eloquent and persuasive statement by Dr English Would you corn ment on your problems in regard to manpower needs if you have this many funded at the present time and contemplate the expansion of the program? Dr. ENGLISH. Yes, Mrs. Green, because I think that is one of the critical problems that you encounter when you move into either a poor urban or rural iieighborliood. One of the problems ma'am, is that a community like Watts has lost its attractiveness for physicians. There are relatively few physicians, if you compare other neighborhoods, that practice there any more. The physicians have been leaving both urban areas and rural areas where the poorest of the poor live. One of the things that we are doing is that, for example, when a medical school reaches out into such a neighborhood and makes possible not only the practice of high-quality medicine there which is important to a physician but reduces some of his frustration when he sees many more problems than medicine, per se, when there are other social serv- ices available, when there are jobs for people there, this becomes an attractive thing for a physician; and we are seeing the return of physi- cians who bad left because for the first time it is becoming attractive. One thing we are doing about the manpower problem at least in some of the area is to begin to work getting physicians back into the areas where they had left. Mrs. GREEN. Do you have sufficient personnel to carry on the pro- gram outlined? Dr. ENGLISH. Yes. As a matter of fact, we have been amazed at the number of physicians that have applied to work at these centers both part and full time, and I think the attractiveness of the quality of medicine that can be practiced there, and that it is often under a medical school's auspices, is what brings them to the center. If it is good medicine generally speaking, you can get good physicians to come. The second thing is that we are trying to extend the hands of the physician by training neighborhood people in the new health ca- reers to be neighborhood aides; to be dental assistants; family health counselors; for example, in the Watts program from the day that center opens the professors that will be there from the University of Southern California School of Medicine will start a system of tandem training where people from the neighborhood will be paired with the people from the medical school so that we hope to increase the value by capitalizing on the talents. It is interesting that if you listen to the neighborhood councils this is the thing they like. They would like to work there and see their children become doctors and dentists and we hope this will make it possible. Mrs. GREEN. Thank you. PAGENO="0028" 866 ECONOMIC OPPORTUNITY-ACT AMENDMENTS OF 1967 Besides your neighborhood centers, what are you doing in the way of health care and could you outline specifically the program? As I understand you are picking out a thousand families to give maximum health service to, is that correct? Dr. ENGLISH. Yes, rna'am. I think Portland, Oreg., is an interest- ing example of a program. As you know, the Kaiser health plan has been providing very high quality medicine there for a longtime. `What they have offered to do is to extend their health services to poor people and it is just question of our helping out financially, so that those peo- ple can have the same quality of health care. Mrs. GREEN. Would you go into the statistics? Is it true that you have 1,000 families for comprehensive health care? Dr. ENGLISH. Could I ask Dr. Frarikel to respond to that? I t.hink he knows that program. Dr. FRANKEL. You are correct, Congresswoman Green, that there are a thousand families initially to be selected, almost self-selection in this situation, who will be worked right into what would be the middle-class framework of a group practice under the Kaiser Founda- tion in Portland and we think that this is a particularly innovative and interesting thing to incorporate into a middle-class environment the opportunity for poor people to obtain the services. Mrs. GREEN. I was particularly anxious to know how the thousand families will be selected. You said that they willbe self-selected. What do you mean by that? And will you also outline the. extent of the health care to be provided? Does that include everything up to major surgery? Dr. FRANKEL. It will include everything this first. year that would normally be in a comprehensive health program except dentistry, be- cause Kaiser has not over the years developed dental programs within its prepayment system. However, we have been carrying on. It will in- clude mental health, for instance. A certain number of hours for this group have been set aside in the psychiatric clinics of Kaiser Portland for this purpose. It will certainly include all preventive services, all treatment serv- ices, and all rehabilitative services necessary for this group. The selec- tion will be through the community action agency, the local commu- nity outreach. Several people in the local community are being selected and will be trained for outreach and they will select from among the most needy families within the community somewhat self-selected, as I have said, because those who come forward will be given some pref- erence. However, they will all have to be among the most needy f am- ilies and the program is capable of enlargement after there has been some experience with this first thousand families. Mrs. GREEN. All right. If an announcement appears in a~ newspaper within a day or two that complete health services are available to 1,000 families in Portland. if you applied to the community action program. then what is the next step from there? Dr. FRANKEL. Well, in the first place we hope that we don't get 1,200 on the first day that the applications are opened up. However, what. will happen is t.hat the families will be screened and enrolled based upon their need. Mrs. G1~EN. What is the need? `What is your criterion for need? There are more than 1,000 families that could stand comprehensive health care in Portland. PAGENO="0029" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 867 Dr. FRANKEL. This determination will be made locally and not by us here and I am not sure just exactly~ what criteria will be used but definitely family size as against income will be One of the criteria. Actual health needs will be another, and desire for service will be still another, I am sure. The program as I have said is capable of enlargement so that this thousand is not a rigid figure that must be adhered to. Mrs. GREEN. What is the Federal appropriation for this? Dr. FRANKEL. Something over $800,000. Mr. BAKER. $813,058. Mrs. GREEN (presiding). How much will you expand it to? I am interested. Mr. BAKER. That depends on Congress. Mrs. GREEN. Is there going to be a controlled group so that you can measure the results here with another group of 1,000? Dr. FRANKEL. No, in that sense it is not a controlled program. How- ever, they will be compared very carefully. Kaiser has a public health service grant so that there will be comparison, Mrs. Green, with another at least thousand-I am not sure of the size of the sample- of the other recipients of Kaiser benefits not among the poor. Mrs. GREEN. I can't pursue this further because of time limitations. I am sorry. Mr. GOODELL. Thank you, Madam Chairman. Let me ask this: First of all, as I understand it, in the authoriza- tion this fiscal year we have earmarked $61 million for the health centers. Are you advocating a continuation of earmarking of this money? Mr. STIRIVER. It is not actually earmarked because it is just a lump sum which we think represents what the community demand will be. Mr. GOODELL. The law says $61 million is authorized. Mr. SHRIVER. That is for this fiscal year ending June 30. Mr. GOODELL. That is right. What are you advocating for the coming fIscal year? Mr. BERRY. $60 million. Mrs. GREEN. Will the gentleman yield? I suggest we recess for a few minutes and then come back. (Brief recess.) Chairman PERKINS. The committee will come to order. Mr. Steiger. Mr. STEIGER. Thank you, Mr. Chairman. I, too, want to join in commending Dr. English and members of his staff for the work that they are doing Do you know whether or not you have a request from Menominee County for a neighborhood health center, Menominee County, Wis. ? Dr. FRANKEL. I don't believe so, sir. I don't think we have a re- quest. I would have to check for sure but I don't believe so. Mr. STEIGER. Do you know whether you have any requests from Wisconsin under this program? Dr. FRANKEL. Yes, we have an indication of interest from both Madison and from Milwaukee. Mr. STEIGER. I yield to the gentleman from Oregon. Chairman PERKINS Mr Dellenback Mr. DELLENBACK. Thank you. Mr. Chairman. I did have one line of questioning, Dr. English, that I would like to ask. I am impressed by this testimony as to this type of medical PAGENO="0030" 868 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 attention, for example, that is going to be supplied in the Watts area. Dr. ENGLISH. Yes, sir. Mr. DELLENBACK. What level of medical attention do you feel we should be supplying from this type of program to the "poor"? Dr. ENGLISH. Yes, sir. Well, we would like to see the day come in this country and through this program that there would be one stand- ard of health care for all. In all of the programs that we have funded so far we have found that the neighborhood people are as interested in the highest quality of comprehensive care, that is, all the care given at the highest quality level for the entire family, as the doctors are. That is the interesting thing, and that is what we are trying to maintain. Mr. DELLENBACK. So your answer really is the highest quality of medical attention? Dr. ENGLISH. Yes, sir. Mr. DELLENBACK. `What effect does it have on that goal that those just above the "poor" level are not really able to afford the best of medical attention? Don't we by this type of program create an in- equity, if you will, a present-day inequity? I~.t's agree that ideally and ultimately every one in America will hopefully have available the highest degree of medical attention and the finest in terms of care, but I am thinking of right now when seem- ingly we have two levels of medical attention in the country. The very wealthy and the poor get the exceptional medical attention, those who are taken in as gratis patients and. the wealthy, whereas those in be- tween get a varying degree of medical attention ranging from pretty good down to the situation where if they are not the $10 poor they are the $12 or $15 poor, to follow your earlier example. What should we do at the present time with the level of attention that we are going to sup- ply gratis through the Government when we realize that some of those who are helping to can~y the load dollarwise through the taxes they pay are not getting that same level of care? Dr. ENGLISH. Yes, sir. I think that is a very good question and I think that people who are just above the poverty line in a community have often the same health needs and the same health problems. That is a question we have had a chance to raise with the people in these communities where there are neighborhood councils established. `We asked their advice on an issue like that and they tell us that it is the poorest of the poor where we see the farthest behind. Those statis- tics, those discrepancies between the poorest of the poor and the rest of us are really what perhaps is the greatest problem on our national conscience and the neighborhood people themselves will make a judg- ment that our first efforts ought to go for that particular constituency. Mr. DELLENBACK. Are we limited by dollars at the present time? Mr. SHItIVER. Yes. Dr. ENGLISH. Yes, sir. Mr. DELLENBACK. If we are then limited by dollars, should we use 2X dollars to supply the very highest of medical attention within those areas that we do supply, or should we use 1X dollars to supply a lower quality of care in twice as many places? Mr. SHElVER. That is not the limitation on dollars. The limitation on dollars to which I was referring at any rate is the interpretation PAGENO="0031" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 869 on dollars available to the poor. The limitation on dollars that you are referring to is the national limitation on dollars for all sources. Mr. DELLENBACK. I mean it to be applied to medical attention for the poor. I am thinking in terms of those figures we have had given to us. Mr. SHRIVER. Then the answer to the question remains yes. In other words, we believe and the doctors believe that we should provide high- quality medical care to those who get it and not have quality to twice as many people. Mr. DELLENBACK. And this would be your answer that., to juggle our formula, if X be highest quality medical attention you would rather supply X quality medical attention in A-number of cases than one-half X medical attention in 2A cases? Mr. SHRIVEn. That is correct. Dr. ENGLISH. Yes; and this is only what I think the doctors would say. It is the fact that we are able to provide high-quality medical care that brings the doctors back to the neighborhood and then the other thing we are learning, sir, is that it is not just the problem of dollars. Part of the aspect of this program is that Dr. Philip Lee, who is the Assistant Secretary of Health, Education, and Welfare for Health and Scientific Affairs, said that the single most critical problem that faces us in terms of health in this country is the delivery problem; in other words, how even with the money we have we can organize services in such a way that they better reach people, so that it is a question of learning how to do even more with the money that we now currently have. I think that what brings the neighborhood people to this program with such enthusiam and the physicians from medical schools and societies to it with such enthusiasm is that it is an attempt to. orgamze a new kind of delivery system that makes the same number of dollars go much further in terms of services. Mr. DELLENBACK. This is an almost impossible thing to measure but on the basis of what you have just said have you found any increased number of persons entering the medical professions as a result of this type thing? Mr. SHRIVER. Yes, sir. Go ahead. Mr. DELLENBACK. I have evidently fed a slow ball in to the batter. Mr. SHElVER. It is not a slow ball, it is really an interesting thing. Dr. ENGLISH. Itreally is. Mr. DELLENBACK. It is a question for which you were waiting. I have asked it. Please answer it. Dr. ENGLISH. I think you are quite right that we can't measure this yet as accurately as we would like because the program is so new. All we can tell you is what we hear from the neighborhood people when we visit these programs. For example, in Watts those neighborhood people tell us that what they looked for from the University of Southern California School of Medicine was not only the high quality of health services that are going to be provided there but the fact that teenage kids from that neighborhood will get to work with a doctor for the first time. They raised the questions with us of whether that may not mean that a boy or a girl from that neighborhood may have a better chance of getting into that medical school someday, that something will rub off. PAGENO="0032" 870 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. DELLENBACK. You are still speculating rather than seeing con- crete results yet? Dr. ENGLISH. I think, in terms of neighborhood people, it is still speculative but not so if you move to another group, medical students. Last summer we funded a program in California that brought 100 health graduate students, most of them medical, dental, and nursing students, to work for the summer. Instead of working in a clinical clerkship in a nice hospital they went out and worked with the mi- grants, worked with the urban poor, and the rural poor and this was largely at the initiative of the students themselves, because they said this they wanted to have as a part of their medical training-an op- portunity during the summer to see health problems from the stand- point of the patient to be served, by going into the family, by going into the communities to see this. This summer as the result of the experience last summer, more than ~00 health graduate students will be doing this with us not only in California but in New York and Chicago, and everyone of those stu- dents is going to take with them two or three neighborhood Youth Corps boys and girls because the health students feel that these kids want to become doctors and dentists, that work for the summer will show them how, and the way that the program has gone is very, good. Mr. DELLENBACK. The time is going fast. I yield to the gentleman from Wisconsin. Chairman PERKINS. The gentleman's time has expired. Mr. DELLENBACK. Both of ours? Chairman PERKINS. Mr. Gibbons. Mr. GIBBoNS. I will yield him a little of my time. Mr. DELLENBACK. Thank you. As a matter of fact, the gentleman from Wisconsin had just asked me to yield to him. Will you yield to the gentleman from Wisconsin? Mr. GIBBONS. I would be glad to. Mr. STErnER. I thank the gentleman. You gave some figures of the people who had not seen a physician for a year's period of time. Have you anything else on those with in- comes of less than $6,000 and those with incomes of less than $10,000 who had not seen a physician? Dr. ENGLISH. I don't have those figures with me. Mrs. Schorr, would you have those figures? Mrs. SCHORR. Yes. They are available approximately by the cate- gories that you mentioned, which I don't have with me. The one that I do have is a figure for all persons at all income levels in the United States. These all come from the national health survey and the figure for all persons is 66 percent.who have seen a physician during the pre- vious year. Now when you compare that to the poor population that we are talking about, one of the factors that has to be kept in mind is the difference in the health levels, that the poor population which is by and large sicker is much more in need of the physician than the gen- eral population of the country. Mr. STEIGER. But you don't have them for anything that breaks down close to $6,000 or $10,000?' Mrs. SCHORR. We would be glad to submit that for the record. Mr. STEIGER. Would you, please. (The data to be submitted follows:) PAGENO="0033" 02 CD CD ~ CD 0 ~ 00000O~C~ 02 CD ~D CDCDCDCDCDCDCD~~ CD ~ ~I CD 0 C H H CD CAD CA CA C CAD CAD ~~CP 1! ~~cAD~1 IA/A (CCC +(C (DCC ~CC) 000CC) C)~ `-1CC C.' AD CA.C CC) I CA C ~ `C "C CD, C - - CD CD ~-DC'D(+ ~ C CD CD DC C 0 CC DC CC COD' ~ C)$AD$))$050 ~ CC ~ ~ ~ DAD AD'CCCACC/ACADCC ~ ~ ~ 00 ~ ~ !~ C) ADD' CI AD ~ D-'CADCACA ~ © ~ ~ !_ t~ CACO COCA ~ ~CAo-'CA CA~'CA ~ )~ ~ ~ ! 0'CADCACC~© ~ ~ ~ CA ~ ~ CC I ~02 ~ ~ C `~ 0000CCCAC-CCCCCACAD 00 g~ ~CA00CCCACADCACA CA CACACACCICCACAQOCAD CC CCCACACACC'-ICACCCA CA CACCCCAD'CDCACACACD' CA I" CA CA CA CAD' CA 00 CA DCCC CA CA CA CCC' CC CA CA CA CA CA CA CA D' CA CA CA CC CA CA CA CC CA CC CA CC E - CAD' -CACACA ~ CACCCACA©CACACACA CA ~ 0 DCACA)D'CA ~ CA-CACCCCCD'CCCAC#CCC A/C ~ CA CACAC-' CCIC~ 000CACC'CACA-CCA CCI C-' CC CA0CAOCACCCACAO Co ~ CA C'-~~C/) CACACC©~00CACCC) CACO00CA0CDCD~CC CD' ~,DC CD I C 0'C ~ `*~ CD' CA CAD' CA 00 CA CA CC CA CC CAD CD' CC CA CA CC GO CA CA CA CA CC DCC CA CC" CA CC CC 00 DCC CA CA CC CA COCA CA CA COCA --C CA CA CA CA -`-1 CA C'~ ~ ~ CA CA CA CA CA CD' CA CA CD CC CA (CCC CA CA CC ~ 00 CA ~ CA CA CAD CA) CD CC CAD DCC CA CCC) CA CA CA CC ~ CC CC ~ L~j ~ 0o1 -z CDCD (D.C `-4,~ ~ C) 0 ~0CC ~ 0 ,~CD ~ C) E~ ..~ ~ C_C (~Q ~$ ~D. U ~ C~ ~ ~ -0 ~J (DC-i ~* 1-C ~0' j~ ~ CI ~-le C) -4 ~ CDI: ~` ~ -~ ~/~0 L~ CCCACACACACCCAcCC)D CC CA CACACA CACA CA CDCACA0CCCACCCACC CA 00CCCCCA~CACCCDCC ~ -CAD-' ~ CACACCCACACCCACD'CA CC o-'CACACADCACACAD ~ CA00CACDCA00~C00CC 0 ~-&C~ CACACACA ~ CCCA'-CCCCACDCACCCA c~ CA o'CAo-' ~ CA00CCCACC-ADCA~CA -AD ~ CC CDCA CA~CD~ 0~CACA~0CACACD CC ~ C COCA 00CC COCA 000 CA PAGENO="0034" 872 ECONOMIC OPPORTIJ~ITY ACT AMENDMENTS OF 1967 Total population, nvsnber and percent of persons with last physician visit wIthin a year, by set, family income, and age: United States, July 1963-June 196k-Continued [Data are based on household interviews of the civifian, noninstitutional population. The survey design, general qualifications, and information on the reliability of the estimates are given in app. I. Definitions of terms are given in app. II] Family Income and age * Both sexes Male Female AU persons With visit within a year * Num- Percent her All males With visit within a year Num- Percent her All females With visit within a year * Num- Percent ber Thou- sands $10,000 plus: All ages 28,825 Under 5 years 2, 196 5 to 14 years 6,222 lsto24years 4,039 25to34years 2,684 35 to 44 years 4,881 45 to 54 years 4, 616 55 to 64 years 2, 685 65 to 74 years 813 75 plus years 389 Thou- sands 20,991 72.8 Thon- sands 14,504 Thou- sands 10, 254 70.7 Than- sands 14,321 Then. sands 10,737 75. 0 1,943 4,741 2,802 2,015 3,473 3, 183 1,849 597 298 88.5 76.2 69.4 70.5 71.2 69. 0 68.9 73.4 76.6 1, 129 3, 213 2,004 1,430 2,327 2,344 1,490 400 166 1, 011 2,486 1,364 894 1,550 1, 533 1,014 275 127 89.5 77.4 68.1 62.5 66.6 65.4 68. 1 68.8 76.5 1,067 3, 008 2,034 1,554 2,554 2,272 1, 196 413 223 932 2, 255 1,438 1,211 1,923 1, 649 835 322 171 87.3 75. 0 70.7 77.9 75.3 72. 6 69.8 78. 0 76.7 1 Includes unknown income. NoTE-For official population estimates for more general use, see Bureau of the Census reports on the civilian population of the United States, in Current Population Reports: Series P-20, 2-25, and P-GO. Source: Department of Health, Education, and Welfare, Vital and Health Statistics, Data From the National Health Survey: Physician Visits. Washington, D.C.: National Center for Health Statistics, series 10, No. 19, 1965, pp. 25-26, table 11. Mr. STEIGER. Thank you, Mr. Gibbons. Mr. GIBBONS. I was wondering about the figure that you gave for the Oregon plan. You mentioned a thousand families and I think Mr. Berry gave a figure of $800,000, roughly $800,000. Dr. ENGLISH. We could give it more easily per patient. The cost. per family really is what you are thinking about, is that right, Mr. Gibbons? Mr. GIBBONS. Yes. Dr. FRANKEL. Now Mrs. Green is going to get her question an- swered because we have, in the budget, provision for more than 1,000 families and this is why the cost shows this high. We would rather not state the figure at this point for the very reason I think that Mrs. Green was concerned about, that if you open up the enrollment in a certain number and then have to close it off immediately it would be somewhat embarrassing to our grantee. There will be more than 1,000 in the plan. Kaiser has taken into account in assessing the premium that they are in effect charging a premiulfl for this program because of the tremendous health deficit of the poor population, and they are anticipating a higher utilization based on very real need than they would get in their middle-class clientele, and this is why the rela- tively higher cost figures. Mr. GIBBONS. YOU say they are taking into consideration the fact t.hat these lower income category people will have greater medical needs and therefore the cost is going to be greater. Dr. FRANKEL. Yes, sir. They are quoting a lower premium than they would to their labor union clientele. PAGENO="0035" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 873 Dr. ENGLISH. I think I have the figures here. It would ordinarily be $54 per year in the Kaiser plant. Mr. GIBBONS. Per person, we are talking about. Dr. ENGLISH. Yes, sir. In this instance for this. population where really the sickness is much greater it will be about $81 per year. Mr. GIBBONS. $54 to $81. Dr. ENGLISH. Yes, sir. Mr. GIBBONS. That is all. Chairman PERKINS. Mrs. Green. Mrs. GREEN. I wonder if I could pursue that a moment. You were asked a question if you had $~ would you use it for one person or divide it among two. How would, you answer a letter to a. person out there dying because he needs a dialysis machine and doesn't haye enough money to have the operation? He knows that we are supplying this medical care and he writes me a letter and says: While I don't qualify in the $3,000 poverty group-yet I have paid taxes all my life and supported a family and I may die in a few weeks because I can't afford medical care but you are giving elective surgery to the thousand families out there who could probably live even if they didn't have it. How would you people answer these letters which I suspect may come in in great numbers? Mr. ENGLISH. Yes, ma'am. I think that is a good example. The kinds of services that these centers will give will be basic family medicine, the kind of service that a family practitioner would give. When a family practitioner on his own in the community is presented with that situation the dialysis would sometimes be done in a sophisticated hospital. He would have difficulty getting a patient in because of the cost associated but in these programs, the center is under the auspices of a medical school or teaching hospital so that when someone in the neighborhood needs that service he. will be referred to a hospital where this service is available and his chances will be a lot greater of getting that help. It won't necessarily be our dollars that will pay for it because the hospital is getting support from other funds. We would hope that the hospitals will be able to give the serv- ice to more people. I think what will happen is, that the chance of someone in a poor neighborhood seeing a doctor who is able to get in where that machine is, will be much greater. Mr. SuRIvER. That makes the man whose family doctor doesn't get it for him even more irritated. That is your point; is it not? Mrs. GREEN. Yes. I would like to have massive health care for every- body but I am wondering how you are going to play God and select the t.housand and make a determination that this man lives and this man dies, or to this . family we give maximum health care and this family, who may not be in the thousand because their income is $6,000 a year or perhaps they didn't imow somebody, doesn't get any help. Mr. SHRIVEn. Isn't that what that committee does at the Portland Hospital? They had a committee of five doctors who have had to play God to determine who gets those kidney transplants. Mrs. GREEN. We can take any other of 50 ailments where there is help available if people had the money. I really wondered what demo- cratic process we are going to use in spending the $800,000 in tax- payers' money for certain people and deny any medical assistance to PAGENO="0036" 874 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF. .1967 others whose income may be just above that "poverty line"-but to whom medical help is just as important-and yet just as remote. Dr. ENGLISH. I will tell you what we are going to try to do. I think that particular problem reflects that we are trying to make it basically a local program, that the only people that know how to resolve an extremely difficult question like that are the people that live in that area and the doctors that live in that area. I think if we tried to do that in Washington it would be tough. I just don't think that we can. I think we can give guidelines to a community but in practice the way this is being resolved is by the people who live in the area where the center is going to be located and by their doctors. Watts is a big area and our center is only gOing to serve 30,000 people. The local people make the determination of where the first one is to be in coordination with the medical school. We are going to try to keep decisions like that as much a local issue as we possibly can. Chairman PERKINS. Mr. Goodell, do you have any further~ ques- tions? Mr. 000DELL. Yes, Mr. Chairman. I am not sure whether you put in the record your response to my question that was pending when we recessed. Mr. SHPJVER. No; we did not put it in. That is the $61 million question. Dr. ENGLISH. I would be happy to respond now. The $61 million figure is for fiscal 1967; $49 million of that was authorized by the Congress for the. comprehensive health services program. In fiscal 1968 the figure is $60 million for the comprehensive health services program. Mr. GOODELL. Are you advocating that this be earmarked for that purpose? Dr. ENGLISH. No, sir. Mr. GOODELL. You are still against earmarking? Dr. ENGLISH. Yes, sir. Mr. GOODELL. Once again you are in agreement with the Republican side. I think you are going to be a little embarrassed here soon. Mr. SHRIVER. I think it is the other way around. Mr. G00DELL. We have been opposed to earmarking, as you know, and last year opposed it. Mr. SHRIVER. We felt that way from the beginning. We were not sure that the Republicans had been supporting the whole program so well but I am delighted. Mr. GOODELL. That raises a question. Mr. Quie indicated that he and I and other Republicans for some time have supported the notion of community action. We certainly support health centers, where a local community action board gives priority to such a center and feels that it should be funded in their area. I was deeply troubled, therefore, to have called to my attention the other day a couple of articles quoting Mr. Shriver as accusing Republicans of being professional throat slitters and doing a professional hatcheting job. It doesn't seem to me that this accusation advances the cause very much. Are those ac- curate quotes of what you said about Mr. Quie and me and other Republicans? PAGENO="0037" ECONOMIC~ OPPORTUNITY ACT A~IENDMENTS OF 19 67 875 Mr SHRIVER Actually, I didn't say it about Republicans What I said was that a few Republicans had put these into the record last year-and I cited a few examples of them-of situations which did not involve us and which were alleged to have involved us. There was a systematic number of those that went in one after the other last year. I am very happy to say that it has stopped. It hasn't happened at all for a long time. I don't know what the titles were. I just remember the incidents and as I say, I am very happy that all of that seems to have stopped. Mr. GOODELL. I believe you were quoted as saying that a professional hatchet job has been done by the Republican Party. Mr. SunniER. Excuse me. If that is what it says 1 am afraid it is wrong. I have never said that, because right from the beginning we have had terrific support from a number of Republicans, distinguished by the mayor of New York on "Meet the Press." I happened to see him and he was extremely laudatory about the program and, as a matter of fact, I would be glad to have his remarks put into the record. This is not just true of a few, but of a large number of other Republicans and I have noted that on every occasion whenever I have had an op- portunity to say it because I am grateful for it. Chairman PERKINs. Without objection it may be inserted in the record. (The document follows:) PRESS RELEASE OF JOHN V. LINDSAY, MAYOR OF THE CITY OF NEW YORK Mayor John V. Lindsay and Robert J. Mangurn, Northeast Regional Director for the United States Office of Economic Opporunity (OEO), jointly announced today that New York City has received federal approval for a program to estab- lish neighborhood law offices in the city's poverty areas. The Mayor said the newly-designed program, which will provide free legal services for residents of 26 designated poverty areas in the five boroughs, is "a milestone in our efforts to make equal justice a reality for all the people of the city." The program, under state law, must now be approved by the Appellate Divi- sions of the State Supreme Court in the First and Second Departments. The program calls for the operation of 10 neighborhood law offices, with at least one in each borough, which will provide free legal services to the poor in all cases except those involving contingency. fees (that is, cases in which the loser pays the legal fees). . The program's full-time attorneys will also provide representation at police precincts in criminal cases and . may advise clients: before arraignment. The program will~ also pay court costs and other expenses involved in cases handled by its attorneys. Low-income New Yorkers who do not live in one of the 26 poverty areas will be able to get service at the law office nearest to them. When in full operation, the program will spend about $4 million-a-year, which will be provided by the Office of Economic Opportunity. Eligibility for the service will depend on the resources and income of a client. Except for hardship cases, an individual will qualify for services if he has an annual income of less than $3,000. An additional $500 will be allowed for each dependent. The Appellate Division turned down an earlier version of the program last November on the grounds that it was too complex for the Court to assure the maintenance of professional standards. In announcing the new program, Mayor Lindsay said: "The credit for this accomplishment goes to the Human Resources Adminis- tration, its Community Development Agency, the Office of Economic Opportunity and the City and County Bar Associations PAGENO="0038" 876 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 "They worked with dedication to fashion the new program. I want to pay particular tribute to Human Resources Administrator Mitchell Sviridoff and Commissioner George Nicolau and his legal counsel, William Fry, for their initiative and imagination. "In addition, the cooperation of William Greenawalt, Director of Legal Serv- ices for the Regional Office of OEO, was invaluable. I am also gratified that the Association of the Bar of the City of New York and the five County Bar Associa- tions have announced their intention to support the program. "I hope that the Appellate Divisions now will give prompt consideration to the program so that legal services can be made available to everyone in New York who needs them." The City and County Bar Associations have agreed to recommend to the Appellate Division that the new structure now be organized and authorized to practice law. Senators Jacob K. Javits and Robert F. Kennedy have also said, in a joint statement issued May 16, 1967, .that they "strongly endorse" the program. The City's new plan calls for a central coordinating agency, Community Acvtion for Legal Services, Inc. (GALS), and 10 operating corporations. The operating corporations will include the Legal Aid Society and Mobilization for Youth. which already are running legal services programs with funds from an OEO grant received last year. Harlem Assertion of Rights, Inc., the Bedford- Stuyvesant Legal Services Corporation and six additional corporations are to be established. These organizations will operate neighborhood law offices staffed by attorneys, law students working part-time and by investigators and other personnel recruited wherever possible from among the people to be served in the poverty areas. In addition to providing advice and representation for individuals and groups, the corporations will sponsor research, handle test cases, prepare and comment on legislation and educate the people of the community about their legal rights. GALS. as the coordinating agency, will train the lawyers who staff the local offices and will complement the work of the individual corporations in research and other functions. GALS will make subcontracts with the operating corpora- tions, will provide technical and administrative asistance to them and will super- vise and evaluate their programs and audit their records. The Board of Directors of GALS will include 20 lawyers and 10 representatives from communities to be served. These 10 are to be chosen by the 10 corporations. The 20 lawyers are to be chosen by the Association of the Bar of the City of New York, the County Bar Associations and the minority bar asociatioris. Of the 20 lawyer-members there will be two faculty members from law schools in the City and five attorneys chosen from the Bar at large. The two faculty members already have been named. They are Professor Willis L. M. Reese of Columbia and Associate Profesor Thomas M. Quinn of Fordham. The five attorneys-at-large are: Robert L. Carter, general counsel, National Asociation for the Advancement of COlored People (NAACP); Burke Marshall, vice president and general counsel, International Business Machines (IBM) Orrin G. Judd, partner, Goldstein, Judd & Gurfein; Edward V. Sparer, director, Center on Social Welfare Policy and Law, School of Social Work, Columbia University; and Theodore Pearson, partner, Kelley, Drye, Newhall, Maginnes & Warren. The employees of the program will be subject to the Federal Hatch Act's restrictions on political activity, and neighborhood law offices will not be per- mitted to represent political parties or factions. The City first obtained OEO aproval of a ~3.4 million Federal grant for legal services in June, 1966. When the Appellate Division, First Department, rejected the program last November, the Community Development Agency immediately undertook to revise it. The newly-funded program is the result of extensive nego- tiations with the City and County Bar Associations, the Federal Office of Economic Opportunity and local groups. Locations of the 10 neighborhood offices have not yet been designated. Follow- ing is list of the 26 designated poverty areas in the city: MANHATTAN Central Harlem Lower East Side East Harlem Mid-West Side Lower West Side Upper West Side PAGENO="0039" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 877 BROOKLYN Brownsville South Brooklyn East New York Bushwick Bedford-Stuyvesant Coney Island Fort Greene Sunset Park Williamsburgh Crown Heights QUEENS Long Island City Rockaway South Jamaica Corona BRONX Morrisania Morris Park South Bronx Tremont Hunts Point STATEN ISLAND Brighton Harbor Makeup of U.A.L.'s Board of Directors: 10 attorneys named by the City and County Bar Associations; 7 attorneys (including two law school faculty members) named in the proposal; 3 attorneys named by the Bedford-Stuyvesant Bar Association, the Harlem Lawyers Association and the Puerto Rican Bar Association; 10 representatives of the poor chosen by the representatives of the poor on the operating corporations. Makeup of Local Corporation, Boards: 4 laymen as representatives of the poor chosen by the Community Com- mittee from the poverty area served; 4 representatives chosen by: the New York City Bar Association (1), the local County Bar Association (2), and the Legal Aid Society (1); 4 attorneys chosen by the preceding eight from a panel nominated by the local Community Committee. [From Harvard Law Record] LINDSAY URGES B~x WAR ON POVERTY LAWYERS AND THE ANTI-POVERTY DRIVE (By John V. Lindsay) In the seven years I have been in Congress, I can recall few pieces of legis- lation that have caused as much discussion and controversy as P.L. 88-452, the Economic Opportunity Act of 1964. In our first deliberations about the bill in the early months of 1964, and again this year as we reviewed the first year of the antipoverty program, we have devoted a good deal of time to consider a broad range of issues growing out of the aims and the experience of implement- ing this Act. These deliberations, have been worthwhile. They have been crucial to the effec- tive continuation of the nation's war on poverty, for the great potential of this program demands that painstaking attention be paid to the successes and failures in our experience with its first year. One of the major conclusions emerging from our discussions and the record of the first year is that the role of the legal profession in the war on poverty w-ill be one of the key determinants of the ultimate success of the effort to "eliminate the paradox of* poverty in the midst of plenty," in the words of the Act's preamble. Repeatedly in my own examination of the provisions of the legislation and the programs which have begun `in New York City and across the nation during the antipoverty program's first year, I have been struck by the great potential for lawyers to play major roles in the war on poverty. In this article I would like to set forth some of the areas where I believe lawyers] can make a major con- PAGENO="0040" 878 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 tribution to this national effort. I hope to suggest some of the unique attributes of the legal profession which offer special promise for the success of the anti- poverty programs. In assessing the role of lawyer in the war on poverty, we must consider the historical context of the Economic Opportunity Act of 1964. Power of Ideas The background to President Johnson's legislative action in the United States, for the Act clearly grows out of the writings and critical perspectives of a group of visionary thinkers in the late 50's and early `60's. Michael Harrington's The Other America, the growing body of practical litera- ture of the civil rights movements, such as Charles Silberman's The Crisis in Black and White and Bayard Rustin's From Politics to Protest, and a number of sophisticated critiques of the existing welfare structure, combined to develop the consensus that eventually led to the passage of the Act. It had become apparent that the gap between our power to eliminate between our power to eliminate poverty and our programs designed to that end had grown too great. John Kennedy said in 1962 that "Man holds in his mortal hands the power to abolish all forms of human poverty and all forms of human life." In 1964 our determination in Congress was that strenthening our capacity to achieve the former required a new* and greater emphasis. Two areat Objectives The language of the Act is specific. It seeks the elimination of poverty in the United States, and establishes ten programs and an administrative structure to operate the war on poverty. But the two great objectives of the anti-poverty program are contained in its key section, Section 202, (a) describing "Community Action Programs." The first goal is the coordination of all programs which attempt to eliminate poverty in a community, and is emphasized by the phrase "which mobilizes and utilizes resources, public or private * * * in an attack on poverty." Role of the Poor The second aim is insuring that residents of the areas affected by the program will play key roles in policy-making regarding their area, and is emphasized in the language of 202(a) (1): "(A) community action program is a program) which is developed, conducted, and administered with the maximum feasible participation of residents of the areas and members of the groups involved. I strongly believe that the skills of the legal profession can aid greatly in achieving both of these interpendent objectives. In their excellent article in the Yale Law Journal of July 1964, Edgar and Jean Cahn point out the special advantages which a lawyer brings to any effort to improve the social and economic status of the poor. The lawyer, they note, is a respectable source of assistance and thus may receive many inquiries and complaints which ought to be referred to a social worker but end up on the lawyer's desk because he is viewed as a source of impartial assistance. In addition, the Calms stress the lawyer's role as an advocate as an asset which is denied other institutional representatives who see their task as one of mediating between social institutions and not one of continually seeking to defend the rights of the poor. Case Orientatio~ The Calms also point out that the lawyer is case oriented, enabling him to consider individuals, not generalized discontent, in a chaotic neighborhood. Finally, they stress the legal expertise of the lawyer as a special asset for the poor since so many of the problems of the poor have legal implications: eviction, welfare enforcement, police treatment, instalment-buying are but a few examples. In the effort to coordinate all resources which can be mobilized in the war on poverty, the lawyer's knowledge of legislation is a special attribute, for the Act provides tools for a comprehensive effort by local communities to seek funds from every available program of federal assistance to local communities which can be secured from the federal government. Under Section 611 of the Act, application for federal funds for programs such as school construction and hospital facilities in poor areas can receive preferential treatment if they are included as part of a total community action PAGENO="0041" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 879 program designed to eliminate poverty. Thus far, this "preferences section" has not been widely utilized. When it begins to play a greater role, however, the knowledge of federal legislation and application requirements which a lawyer can supply will play a significant role in broadening a community action program to include relevant federal programs. Similarly, the effort to coordinate all programs which can be set to the task of eliminating poverty is a task for which the legal profession bears special responsibility and qualifiactions. Several critics of the present anti-poverty pro- grams have discussed the feasibility of a master plan for social services which would be linked with the existing master plans for physical development of a city. Development and implementation of such a plan would be a challenge which the lawyer would be uniquely qualified to accept. I feel that coordination can also be greatly assisted by the lawyer in an equally important fashion in the long and at times bitter negotiations among the various armies united in the war on poverty. The city's departments and agencies coordinating organizations in City Hall, private welfare and community organizations, and neighborhood organizations formed and composed of the poor-these are social organizations which may seem at first to have little in common and whose interests often appear to be in conflict in the early stages of formation of a comprehensive community development program. The lawyer's objectivity, his skills at arbitration, and his respect in the community can make unique contributions to progress in bringing greater harmony and coordination among the growing number of groups seeking similar ends in the social services area. From my own observations, however, it is in the area of the second broad aim of the antipoverty programs-involvement of the poor-where the legal profession may be able to make its greatest contribution. The legislative mandate to broaden the planning, conduct, and administration of the anti-poverty programs to include the poor themselves must, I believe, be considered one of the most far-reaching legislative achievements of the twentieth century. We have recognized for the first time in national legislation that it is not enough to provide the resources for change, but that those who participate in social change often determine the effectiveness of change itself. We have learned that the root cause of poverty is often a fundamental feeling of powerlessness, to use Kenneth Clark's phrase in his monumental report on Harlem youth. And we have taken the first halting steps in the direction of enabling those whose destiny, after all, we are trying to shape, to have the power and the sense of efficacy to influence the future of themselves and their neighborhoods. Inclusion of representatives of the poor on the planning boards of the neighbor- hood and city-wide antipoverty policy-making councils employment of poor persons as sub- and non-professional employees of the community action programs, and the continuing effort to organize and solicit the reactions of the poor them- selves have become crucial strategies in our war on poverty.. I personally view this entire effort as an issue of due process. It seems clear that for too long the voice of those who are affected by federal, state, and mu- nicipal policy in the poor neighboihoocls of our nation has been stifled and ignored Those whose lives are dislocated by social change have been the last to. be heard from and the least to be heard from and the least likely to influence the final decisions of major import for the futureof our nation. . . . . .. . As a problem of due process, the effort to involve the poor in antipoverty pro- grams is one of great significance for the legal profession. Tradition roles of defending those accused of criminal acts are but one of the several ways in which a lawyer can contribute to the effort to insure that the rights of the poor are given equal priority with those of the rest of our society. Legal aid programs such as those now operating in Harlem, and on the Lower East Side in New York, as well as in Washington, D.C., and Oakland, California have been among the most effective of the many programs now becoming asso- elated with neighborhood service centers financed by the antipoverty programs. The Legal Aid Society and student legal aid groups have come to realize that the services of a lawyer are a precious resource and one that is rarely even considered by the poor to be available. Beyond these legal aid programs, there are several other ways in which the lawyer can contribute. Legal education is an activity which must be broadened PAGENO="0042" 880 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 in poor neighborhoods if those who are totally unaware of what a lawyer is and what he can do are to be helped. Mobilization for Youth in New York's Lower East Side has distributed wallet- size cards in Spanish which describe the rights of one accused of crime and how to reach a lawyer when one is needed. Handouts on one page have been distributed also. describing the rights of wel- fare recipients and persons buying goods on installment plans. These kinds of imaginative ways of communication offer a genuine challenge to the lawyer who is anxious that his services be relevant to more than a comfortable suburban clientele. All of these activities of the lawyer in the antipoverty program. however are in areas more or less associated with the present role of the lawyer as a private advocate and counsel. Indeed, a new concept of the legal profession may be needed. The greatest con- tributions which the lawyer can make may well be in areas where he can play a role only if he takes an interest as a citizen, and not primarily as a lawyer. I am thinking of activities such as representing a neighborhood association of the poor in negotiations with the city administration which is unwilling to live up to the spirit of the Economic Opportunity Act and has refused to share real policy- making power with the spokesman of the poor. I am thinking of the role which lawyers have played in the civil rights move- ment-as individuals deeply committed to social justice and possessing special skills of major relevance to the fight against discrimination-but as citizens, not lawyers under contract or obligation to serve a community. This kind of initiative seems to me the kind of demonstration of social concern on the part of the "outside" that residents of the ghetto and the bleak country- sides of America can take inspiration from. It is this kind of service-out of conviction, rather than contract-which truly taps the talents of the legal pro- fession in the neighborhoods where those talents are almost completely irrelevant today. In my observations of antipoverty programs throughout New York City and my discussions with directors and staff members of local community action pro- grams around the country. I have been most impressed by the caliber of individ- ual which a successful antipoverty program demands. As I talk with those who have run these programs. it seems to me that three strains are essential for the effective antipoverty warrior. These programs de- mand outstanding administrative skills, with acute awareness of the ins and outs of all pu,blic and private agencies in the city or area, plus the ability to per- suade and bargain with agencies to expand or significantly modify their opera- tions, using the prestige of the political leadership of the community, but re- maining free of it at all times. The personnel in antipoverty programs must also be politicians-politicians at least as effective as the best local politicians in this country, for the staff of siich an effort must be able to sense the power and the potential power of all local political groups, as well as what each group will and will not tolerate as public policy. Finally, the staff of an antipoverty program must be philosophers of a sort, able to keep sight of the sometimes incredible long run aim of eliminating poverty while dealing on a day-to-day basis with the thousand minor details that plague a program which seeks to do so much for so many. I can think of no group of men and women who combine these skills and values more successfully than the legal profession of the United States. Lawyers possess unique skills and a perspeetive on social change involved in eliminating poverty from the American experience. Abram Chayes, in his introduction to the Report to the National Conference on Law and Poverty in June of this year noted that the notion of due process for all citizens and the concept of law as "the dynamic of change" of our society are "impeccably conservative sentiments" which bear the potential for profound social change. The task before our nation's lawyers is the practical realization of social change in a context of social justice. Mr. Siiuivun. I said a hatchet job had been done by ii few. Mr. GODDELL. And pro~essiona1 throat slitters. Mr. SHRIVEn. I don't whether I said that. I might have been carried away, but I never would have applied that to you. You know that. PAGENO="0043" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 881 I have had good debates with you and never said anything like that, or even thought it. Mr. GODDELL. I appreciate that kindly reference. Mr. SHRIVEn. `Well, for example, I was upset last week when the Governor of New Mexico came to Washington and testified before another committee of the Congress and a newspaper the next day had a version of what he said. I called him up to find out what he actually had said, and like some of the rest of us he said, "Well, what I said and what appeared didn't bear much relationship." And he said, "As a matter of fact, I have already called a press conference in Albuquerque and I am going to straighten out the record and make it very clear what I believe." And he did that and was kind enough to send us a telegram about it. What I was referring `to were the cases that came up last summer but that is ancient history, I am happy to say. At least I `hope it will be. Mr. GOODELL. If you are referring' to the series of investigative re- ports we made last year, none of which were contradicted in their es- sential facts, then I think it is a very unfortunate reference. Glib terms like "throat slitting," "professional hatchet job," which don't advance the cause of good legislation at all. `We were very careful with those memos to s'tick to the facts as we were able to establish them with our professional investigators. It seemed to us that those facts should be brought out. Part of the problem with this is the so-called ballyhoo budget that you have at OEO. Is it true that you have $2.4 million allocated to public information and public relations at OEO? Mr. Si-ip~vr~. I don't know that specifically. Mr. GOODELL. You have 46 employees in your public information office and a $2.4 `million budget. This troubles a good many of us. Ac- cording to a recent AP story, $42 million is spent by the Federal executive agencies on self-pleadings, if you will, publicity or public relations. At OEO $2.4 million for a ballyhoo budget really does bother us. Is that much money really necessary? Mr. SHRIVER. I would be glad to compare our budget for publicity with any agency carrying on a comparable program under President Eisenhower. Mr. GOODELL. You have all sorts of reservations. Mr. SHRIVER. I will be happy to compare it to any program with the same amount of money. Mr. GOODELL. You don't think $2.4 million is too much? Mr. SHElVER. I don't know about the figure. All I know is that our Department of Public Information is working night and day trying to keep up with requests for information about the program. It is a small office for an agency of this size and compares very favorably with any agency that I know of, or any business concern of comparable magnitude. There are 47 people including all the secretaries that work in that division and they have an annual pay of $975,000 for them all. Now the ~i dditional money probably is to pay for printine~ of reports that are required here by the Congress and by others. We have to have i~~formation on hand about the. program. For exam Ic, when we launched Project Headstart we. had to put out five little pan~h1.ets, each one of which was essential for every community in the United PAGENO="0044" 882 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1 9~6 7 States to have. One was about nutrition, another about the kind of teaching equipment you needed, or materials in the headstart program. We had to pay for all of that out of our money. Mr. 000DELL. I understand that informational pamphlets have to go out but it seems to me that $2.4 million is an excessive amount of money for public relations for an agency that size. Mr. SHRIVER. We would be delighted to have the amount of money that we spend for that purpose up here for a complete analysis by this committee where the men in charge of it will show you everything that is being spent, who gets paid, and then I think you can compare that with the expenditures for any agency of the U.S. Government, any private business, or the Red Cross, or any other agency. Mr. GODDELL. May I have just 1 more minute, Mr. Chairman? Chairman Pra~xixs. Without objection so ordered. Mr. GOODELL. The reason for our concern about this is that many of us feel exaggerated statements of results accomplish nothing construc- tive at all. This concern has been shared by many conscientious ob- servers including Haynes Johnson of the Washington Star who wrote articles on the poverty program. He said: The program has suffered from too much and too effective salesmanship. As a consequence, it is, in part, a captive of its own promises. I could give you a number of quotes from other people who basically favor the war on poverty. In a war on poverty it seems to me it fur- thers no one's cause to exaggerate and go through a ballyhoo routine which points up and exaggerates alleged good features and leaves out the bad features. As a matter of fact, I have before me an article in which this problem is discussed and an OEO information staff mem- ber is quoted. Chairman PERKINS. Is there objection to the gentleman proceeding another 2 minutes? Mr. 000DELL. I only need 10 seconds, Mr. Chairman, unless he wants to answer. An OEO information staffer says that: "With Sarge when something goes wrong with the program you step up public relations." Unfortunately there are a good many times when legitimate, construc- tive criticism has been made and each time it does seem that the thin- skinned reaction is almost a flashback. OEO denies everything and then comes through with great exaggerated claims for what has been done. There have been a number of cases where the pOor themselves have risen up and objected to this kind of high promise which far exceeds performance. Mr. SHRIVER. I will just respond by saying that first of all we wel- come the criticism whenever it is constructive. Second, we have not exaggerated our claims for success but, in fact, have minimized it. With Project Headstart we have only reached 3'2 percent of the kids eligible. In other programs we are very, very low in terms of reaching the people who should be reached by the program, so that I would like to say for the record that we are interested in constructive criticism. We are not exaggerating what we have done. We do try to dramatize the needs and will continue to, because the needs of the poor are always overlooked and their needs need to be dramatized. That is where we are concentrating our effort. Mr~ GOODELL. We have heard these claims about 4 million of the poor touched or 8 million touched or affected by this program, technically PAGENO="0045" ECONOMIC ~.OPPORTIJN1TY ACT AMENDMENTS OF 1967 883 I guess you could say that is not an exaggeration. However, when you take an impressive figure like 4 million or 8 million people who have been touched and we don't know what the dickens "touched" means- it certainly doesn't mean meaningful impact-then your claim exag- gerates the real effects of the war on poverty. It seems to us that this doesn't serve a particularly good cause. Mr. SIIRIvER. Those figures are compiled by the research and plan- fling department. Sarge is not putting them out. They come from there. Mr. 000DELL. It is your agency. Mr. SHRIVER. They are the best figures it is possible for us to ob- tain. Everybody likes to know what the figures are, what are you doing? These are the best figures we could come up with. Suppose we had touched 6 million of 5 million or 7 million people. That still leaves five times as many people untouched and that is what we are talking about all the time. If there are 32 million people in the United States that are poor we are not touching even one out of four with 8 million. Mr. GOODELL. Reached, affected, served, touched, all of these words are misleading. I quote another outstanding authority who has made many of these studies and he said: Unsupported claims of achievements and exaggerated official promises for the Federal war on poverty regrettably have serious repercussions. Mr. LEVINE. On that 7 million or 9 million people, it should be clear that neither my Department nor Mr. Shriver has ever claimed anything for that figure aside from what you have said. There are people who have passed through that we don't know how we have affected. Mr. 000DELL. What does touched mean? Mr. LEVINE. It means perhaps they have been in a neighborhood center. In fact, Mr. Shriver never meant anything but that. Mr. GOODELL. Why take this great big figure and say that they have been touched by the war on poverty? It sounds like you have really made a major accomplishment. Mr. LEVINE. We haven't tried to make it sound like that. Chairman PERKINS. Mr. Pucinski. Mr. PtTCIN5KI. Mr. Shriver, I saw a report in one of the news- papers the other day that had a survey on the amount of time that youngsters, who have gone through the community action program and receive training stay on the job. It indicated that they stay about 90 days on the average before they move to some other job. These are youngsters who are properly trained, motivated or anything else. I was wondering if you have an explanation for the kind of mo- bility that this would reflect among the people in your programs. Mr. SHRIVEn. I don't know the precise program to which you refer. Mr. PuCINSKI. Job Corps program, young people who have been aided by the community action programs. I was impressed by the rather interesting figure that they only stay in one job for 90 days or less. Mr. SHRIVER. I think I would be better able to respond to the ques- tion if I had a chance to go into it. We would be glad to put it in the record. These youngsters particularly in this age group are ex- tremely volatile and mobile whether they are poor or rich kids. At PAGENO="0046" 884 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 the age of 16 and 18 years old they move around a great deal. I don't remember any 90-day figure. I don't say it is wrong but I don't happen to remember it. If a kid got a job for 90 days he may have gone on to a better job. He may have turned into a criminal but the mere fact that lie changed after 90 days or after 6 months would not bother me. It was what he would be doing later that would be an important question. I would be glad to get a response for the record if we can see what clipping you are referring to. Mr. Pucixsiii. In the Harris study I see. a. lot of figures, but would you call my attention to the figures that show the degree of success of the Job Corps program. Did I miss that? Perhaps I missed that testimony earlier. Mr. SHRIVER. You must have missed the ballyhoo budget because you haven't got the figures of success. Congressman, we submitted on the Job Corps last week two large volumes which attempted to put out what we thought the current conditions were about the Job Corps and I would be glad to get you a response on that for the record. I doii't happen to know which one you want. Mr. PUCINsKI. This is what you are talking about. I am inundated by statistics and facts by the OEO. Mr. SHElVER. The figure that was presented here I can't recall with precise accuracy, but if I remember correctly it was 70 percent. Mr. LEVINE. One thing is that 70 percent of the people who have been in Job Corps have either gotten jobs, gone back to school or gone into the military. Is that the point? Mr. P~CINsKI. I don't know. I am asking. Mr. LEVINE. That is one indication of success. Mr. PucINsKI.. I am asking for the measure of success in the program. Mr. LEVINE. That is an indication of success. It is not completely from the Harris survey but it is a figure put together from the Harris and the ,Job Corps internal data system. Mr. PUCIX5KI. If I read your figures correctly on the Job Corps, young people who attended Job Corps, 15 percent had trouble with the police before you took them .into the Job Corps. Am I reading this correctly? Mr. LEVINE. I don't have the figure in front of me. Mr. PucIN5KI. It is page 109 in volume 3. Mr. SHElVER. I wonder, Mr. Chairman, whether- Chairman PERKINS. Would you hold that question until the Job Corps people get back here tomorrow, and it will be appreciated. Mr. PucIxsKl. You want to save all this for tomorrow? Chairman PERKINS. Yes. Mr. Pt~cINSKI. Let's do that. Looking at this chart., I am just won- dering whether you people haven't become too obsessed with this whole subject. Looking at your most successful programs in the poverty program while I know that there is greater participation of the poor, I don't think there is necessarily greater planning by the poor. For instance, in Headstart which everybody holds out as the most successful program in the whole arsenal of the War ofl Poverty, and PAGENO="0047" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 885 I assume we can find this agreement on both sides of the aisle, as far as I know you don't require that you have 33 percent of the poor sitting in on the formulation of those programs. Do you? Mr. STIRIVER. Well, we do, yes. Mr. PUOINSKI. Do they sit in on the formulation of curricula and such things? Mr. SHElVER. No. That isn't what we talk about when we talk about involvement of the poor. I have tried on a number of occasions here to indicate that we think our program should involve the poor in a great many different ways. In Headstart we have a huge number of poor people serving on advisory committees to Headstart. We a large number of poor people employed not just doing menial work in Head- start but phrticipating in the classroom so that involvement of the poor is different. With respect to the formulation of what ought to go into Headstart, yes, we use the poor because the poor was one of the groups most vocal about participation. We had an idea that that was good but they are the ones who have been pushing the strongest so that their contribu- tion is excellent. Mr. PUCIN5KI. I commend you for the fact that you try to get poor people involved in programs. For instance, your insistence on bring- ing people from the communities into the Headstart program is com- mendable. The point I raise here is whether or not your agency hasn't become obsessed with the idea. The language that you have in the bill before us strongly recommends or suggests that. you are even thinking of having these people actually elected to. these positions, whatever democratic process means, and I take it to mean only one thing, elec- tions. The question is whether or not the whole program across the country has not been slowed down in many areas simply because of the insistence that these ratios be maintained in the basic planning. I would think that wherever the poor can make a substantial con- tribution they ought to be in on the planning and ought to be invited and ought to be part of the program. But I don't think the program should be held up until that criterion is met because I must tell you that I can't find any place in the. bill any language that justifies that guideline. = The only language that I canfindin the bill is "maximum feasible participation of residents of the area.". It does not say "poOr." Your agency in the last 3 years has taken that language to meai~ all sorts of things on which there isn't a word of testimony in all of the hearings. Mr. GOODELL. Do you want a defense, Mr. Shriver? I would be glad to volunteer. Mr. SHRIVER. Actually, the law says that one-third of the people of the local community action agency must be residents of the area and members of the groups to be served. Now, in applying from our point of view those two phrases it means they had to be persons who were being served by our programs and by definition are poor so that the slight-of-hand or the phraseology came in of the poor. Technically, we say all the time that it should be residents of the area; members of the groups to be served. That is all that we have done and the law says that. PAGENO="0048" 886 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. PUCINsKI. Mr. Chairman, may I proceed for a minute? Chairman PERKINs. Yes. Mr. Pu0INsKI. I have asked all the county administrators of the poverty program in my State to give me their views and their sug- gestions on how we can improve this program; how they are getting along with it. I might tell you I am very happy to know that one letter from Kane County says: It has also been suggested that in effect we abolish the Office of Economic Opportunity and transfer the programs to other departments. I would like to go on record as being totally against such a procedure. The Office of Economic Opportunity, with its short-lived existence to date, has proven beyond a doubt the necessity of this executive office and past experience has shown us the De- partment of Labor, Office of Education and others do not function effectively for the poor. This is understandable since their basic function is not to aid the "disenfranchized people" of this country but to the broader functions assigned to them. A case in point for this argument is in the field of education. I am, by pro- fession, a member of the education field and am very sorry to say that educators in general seem to regard the plight of the disadvantaged as a secondary problem. My feeling is that the problems of poverty are so basic that we need an execu- tive department to convey the needs of the poor to the President, Legislator, and to all of the people. And to this I say amen. I agree with this person. I think it would be a tragic mistake to try to do away with your Office. I think you have done a good job. The only question I raise here, Mr. Shriver, is that I wonder whether you haven't dissipated a great deal of your energy and effectiveness by insisting very hard on that particular criteria and dissipating a great deal of the cooperation that you could get from local groups in moving forward with the program. That is the question I raise. Mr. SHRIVER. Well, first of all, let me say that I don't think we have wasted a lot of time and energy. I think in the first year it was a novelty and did take a lot of constructive effort to get it going but the idea has caught hold, I believe, and the early labor pains, you might say, about that are past. If I might, I just happen to have with me a memorandum which I issued last September on the very subject of involvement of the poor in all of the OEO programs. If the chairman would permit me I would like very much to get this in the record because even today almost a year later it does, I believe, properly express our opinion about this. Chairman PERKINS. It will be inserted in the record. Mr. PucINsKI. Would you like to read it? Chairman PERKINS. It is too long to read it. (The document follows:) SEPTEMBER 9, 1966. MEMORANDUM FROM THE DIRECTOR Subject: Involvement of the Poor in all OEO Programs. Several recent developments prompt me to reaffirm for all in OEO and in OEO-related programs the necessity of including the poor in all our activities, including "national emphasis programs" like Head Start, Upward Bound, Legal Services, Health Centers, Foster Grandparents, etc. Notable among these developments is the recent speech by the President, ordering an expansion of legal programs and neighborhood multi-purpose centers. PAGENO="0049" ECONOMICOPPORTU~flTY ACT tAMENDMENTS OF 1967 887 The President said his goal was "in every ghetto of America a neighborhood center to service the people who live in that area" and he asked us "to increase the number of neighborhood legal centers to make a major effort to help every tenant secure his rights to safe and sanitary housing if he lives in the United States of America." Another important development is to be seen in the current Congressional consideration of our legislation. The Senate subcommittee handling our program has adopted an amendment authorizing OEO to expend $100 million for health centers like those already established in Denver, Boston, Chicago, Los Angeles, Mississippi and elsewhere. The subcommittee also indicated that Head Start might receive $200 million more than has been requested. A similar or larger amount may also be added for employment programs. At the same time, there is a determination by some members of Congress seriously to curtail the level of "unearmarked" community action funds for local discretion. As these national emphasis programs grow in size and diversity, they must not lose their inherent purposes as Uommnnity Action programs. Our insistence on participation of "the residents of the areas" has not been limited to, and will not be limited to, membership on CAP governing boards. That particular "bone of contention" is for the most part now behind us. I tried to explain the need for this greater concept of participation during my recent appearance at the Ribicoff hearings. I quoted the man from Watts who told me: "Sargent Shriver, you listen and listen good. I'll tell you exactly how it is. We want to run the jobs. We want to run the programs. It is our lives. It is our future." We have no intention, of course, of letting any one group, even the poor them- selves, "run the jobs" or "run the programs." That's not Community action. But it is crucial that all of us understand the intensity of poor people's determination to participate actively in programs designed specifically to help them help themselves. Our refusal to be bound by strict formulas or uniform applications of the principle of "maximum feasible participation" must not be interpreted as soft- ness on the principle itself. While we accept flexibility in the implementation of such participation, we are inflexible in our determination to achieve it as fully and as rapidly as possible. Involvement and active participation by the poor do not, it must be under- stood, rule out important roles for the other parts of the conirnunity. The very concept of community action means that the whole community is involved-public officials, private agencies, professional societies, industry, labor, church, and others. The poverty program will succeed only as all of these sectors of commu- nity life make their appropriate contributions. The new element in community affairs-involvement of the poor themselves- has not always been understood, and is still being resisted. This is the reason for this memorandum. I will not consider any program a true community action program which does not have maximum feasible participation by all segments of the community-and that must include the intended beneficiaries of that program. The Office of Economic Opportunity funds, delegates, administers or coordi- nates a vast array of programs. Every one of those programs can be perverted into a form of dole-paternalistic, unilateral, and degrading. It has become clearer than ever in the past months that the poverty program must stake its existence on that same ideal upon which our nation gambled from the outset: Democracy. Community action is a democratic antidote to the dole-an antidote which offers an opportunity for a voice for each and a role for all. From the outset, the poverty program has been embroiled in countless endeavors to give life and meaning to the words "maximum feasible participation." Such was our man- date, written and enacted by Congress, signed by the President of the United States, hallowed by historical precedent, and now reconfirmed by pragmatic experience. Now we enter into a new phase-one which can leave the form but bleed the substance from those achievements. First, national priority programs-Head Start, Upward Bound, Legal Serv- ices-tend to focus attention on the delivery of a certain kind of service, and the contribution it can make. Those programs are not exempt from the statutory mandate of maximum feasible participation. Those programs must not become SO-0S4-67-pt. 2-4 PAGENO="0050" 888 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 simply vehicles for the delivery of pre-packaged, pre-designed, and unilaterally imposed services-no matter how valuable those services may be in and of them- selves. Second, two factors-our anticipated rate of expansion and the earmarking of funds by Congress for specific purposes-can operate to circumscribe and reduce the opportunities for choice, for local determination and local decision. Past decisions may bind the future. And new funds may come designated for use in particular ways. This will reduce the room for democratic decision making among different program alternatives. But it must not be permitted to lessen democratic participation in determining and redetermining the content of any particular pro- gram. The diminution of one kind of choice must be at least equalled by com- pensatory steps to insure that the quantity and quality of meaningful participa- tion does not diminish simply because there are different issues for decision. The Houston Legal Service Program, the Watts medical center, New York's Institute for Developmental Studies, and our newly expanded Opportunities In- dustrialization Center job program provide illustrations of how democracy can operate within the context of a legal service program, a medical service pro- gram, a child development Head Start program, and a job training program. In Houston, each neighborhood law office is subject to the control of a neigh- borhood council composed entirely of representatives of the poor. That con- trol is not nominal. It extends even to the right to fire the lawyer for unsatis- factory or unresponsive performance (a right, incidentally, which every paying client has with his private attorney.) Furthermore, the overall direction of the program will be determined centrally by a committee composed of neighborhood council representatives and neighborhood lawyers (subject to neighborhood control) who will make the decisions on priorities, overall program direction, and allocation of resources among competing needs. Finnily, there is special pro- vision for an attorney whose sole job is to review the complaints of clients and prospective clients against the legal services program for refusing to take their case. His decision is final, and he cannot be penalized for siding with the client. That partnership between the poor and Justice is what the rule of law must come to mean in a democracy. In the heart of Watts, a neighborhood health center will open shortly-built in large part of the people of Watts, controlled significantly by the people of Watts. and largely staffed by the people of Watts. We are paying the additional cost of a new form of partnership-a system of "Tandem Training" where the technicians and professionals will be paired with local residents to equip them with the skills necessary to provide care and to qualify for the professional and semi-professional jobs in this clinic. The people of Watts-and increasingly, the poor across this nation-want no structure or service built and manned and controlled entirely by outsiders. In New York City, the Institute of Developmental Studies at New York Uni- versity has created positions-within the public school system-for community aides who are parents of impoverished children in Head Start and Kindergarten. They know at first hand the difficulties, the fears, and the hesitation of other parents. They act not just as intermediaries between the school and the com- munity-but as advocates for the child and the parent-to insure that parents with a question or a concern or a grievance are not intimidated by a cold recep- tion, long waits, and bureaucratic treatment. As insiders, knowing the system from within and being instantly on hand, they can see to it that the paper work concerns, the institutional concerns and the professional concerns of the princi- pal, and administration, and the teachers do not overwhelm demands which may seem trivial or bothersome but which to a child or a parent are likely to be of all consuming and urgent importance. OEO, along with the Department of Labor and the Department of Health, Education, and Welfare, has just announced an expansion to eight other cities of the successful Philadelphia job training program. Comprehensive manpower centers will be patterned after that city's Opportunities Industrialization Center (010) developed by Reverend Leon Sullivan. Operating with the motto "We Help Ourselves," the 010 program seeks to give men and women previously considered unemployable, frequently illiterate, too often dismissed as "unmotivated," an opportunity for total involvement and commitment to training and self-advancement "Self-help" is furthered by ex- ample and by success. Graduates of the program are given opportunities both for further personal advance and for contributions to the program itself. The en- PAGENO="0051" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 889 rollees are assured a significant role in the Board structure itself, in the actual operation, and in the relations with the rest of the community. By building within all these programs paid positions for poor persons to voice the concerns of the recipient-the pupil, the patient, the client-we are in effect enfranchising the poor, providing a role and a voice in affairs which shape their lives directly-but which never appear on any ballot at election time. These illustrations are representative of a total endeavor to make democracy work more effectively than ever. The word must go out-and it must go out unmistakably-that token participa- tion is unacceptable. In the process of tightening up procedures, of improving reporting systems, or tidying up administrative details, we must not lose sight of our overriding mission. If our program is to maintain its catalytic effect, if it is to continue to engender greater responsiveness to the needs of the poor throughout governmental and private agencies, then we must not permit our programs to suffer from hardening of the arteries. We cannot promise the poor wealth and opportunity today, tomorrow, or even the next day. But we can continue to develop new and promising ways for involv- ing the poor in all our programs. The four projects described above are merely illustrative of four new ways developed or promoted by OEO within the last six months. Let us continue to act in accordance with our mandate by devising new and effective ways for democracy to come alive in all our programs. Only thus can we maintain faith with our charter. SARGENT SHRIVEn, Director. Mr. SHRIvEn. It expresses why we think it is important and why it has been worth the effort to get the poor involved. a\lIr. PucINsKI. I would say though, that the most important func- tion, in my judgment, of the OEO-and you have done a good job in many aspects-is to make sure that at the end of the line there is some- thing waiting for this person, that you can help him. The only short- coming of the OEO program in my judgment is that in too many instances at the end of the line of whatever program we had when this individual was exposed to, when it is all over, this is not true. Many of your people have been engaged in trying to get this maxi- mum involvement of the poor in the planning rather than helping the poor themselves. That is my only objection to the program. Chairman PERKINs. Mr. Scherle. Mr. SHRIVEn. Mr. Chairman, could I make a comment relative to this? It was because of the fact that some people felt that there wasn't enough at the end of the line, as I think Congressman Pucinski just phrased it, that we were hoping that by going through these programs, program by program, the members of the committee could get a better idea,. and we also could get the benefit of your comments as to what is at the end of `the line. A health center is at the end of the line in Watts. It wasn't there a year ago. These are the things that are at the end of the line. I was hoping, Mr. Chairman, if you would permit us, to pro- ceed with `those integral parts of the program which constitute what is at the end of the line. Mr. SCHERLE. Mr. Chairman, we are all going to have to vote so that I will just take time for one question for Dr. English. Doctor, is it still the policy of the OEO to use Gestapo methods in bludgeoning members of the medical profession into participating in your program in your neighborhood health centers, as apparently has taken place in the legal services? Dr. ENGLIsH. Sir, I am not aware of that kind of tactic in any of our programs. I just might say this: that the president of the American PAGENO="0052" 890 ECO~OMIC OPPORTUNITY ACT AMENDMENTS' `OF 1967 Medical Association, I think, is one of the reasons why doctors are joining in our programs and medical societies, too. He is talking about the health of the poor all around the country. His encouragement is what is bringing it. Mr. SCHEBLE. My question is, Are you doing it or are you not, yes or no? Dr. ENGLISH. No, sir. Mr. SCHERLE. Not any more? Dr. ENGLISH. Ever, e-v-e-r. `Chairman PERKINS. Mr. Burton. Mr. BURTON. Sarge, I would like to speak for this one member of the committee. I think that you and your people have done a remarkable job with inadequate fiscal resources. You are to be highly commended for your creativity and daring. If you are only given a chance to continue I am sure that this program will not only work well in the years ahead, but you may actually get around to the position where we will win this war on poverty. I think you have done an outstanding job. I think your staff has and I intend to give this legislation whatever support I can. I don't `have any questions. Mr. SHRIVER. Thank you. Chairman PERKINS. The committee will recess. Mr. GIBBONS. Mr. Chairman, before we recess today, a little earlier someone mentioned that Mayor Lindsay had appeared on "Meet the Press" yesterday and had talked about this program. I have his state- ment here. It is a very short statement. I would like to have unanimous consent to enter it into the record at this point. Mr. QtTIE. Your statement or his statement.? Mr. GIBBONS. His statement. Chairman PERKINS. Without objection, so ordered. (The statement follows:) [Excerpt from "Meet the Press," Sunday, June 18, 196fl Questioi~ by David Broder The House Republicans are trying to completely revamp the poverty program and in the process abolish Sargent Shriver's poverty agency. Do you think it's a good idea? An.swer by Mayor Lindsay We have had good luck and success with Mr. Shriver's OEO office and we find that in New York, at least, that it is wise to have a single office with which to deal in this enormously compilcated program. It is a difficult program to ad- minister at both ends of the stick, both in a locality and in Washington, D.C. To dismember it and to put its various functions scattered about in five or six Federal agencies, I think would be a mistake. I fear that it would compound the problem of administration that not only exists in Washington but in all of the cities today. Mr. Q1JIE. Mr. Chairman. If I may say one thing-I can't let go by the comments-about the involvement of the poor. As I have observed the work of the Office of Economic Opportunity and this program, it seems to me t.hat the one new venture and the key to eventual elimination of the poor is in- volvement of the poor themselves. This is the way they are going to gain the dignity and respect and insight into themselves which is so necessary for the final solution. PAGENO="0053" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 891 We have made tremendous progress in the existing program with the existing agency. My only hope is that the involvement of the poor will spread and affect the other agencies of the Government just as we have done in the Office of Economic Opportunity. To me there is great hope that there will be some political pressure in communities when the poor gain their political voice. This is for their future just as it was for every foreign group who came to this cOuntry and finally gained a political voice. Mr. GIBBONS. And may I add this amendment was sponsored by Mr. Goodell and Mr. Quie and I hope they will come forward with many other constructive steps like this. I certainly join in that. Mr. PuCINSEI. I would be much more persuaded by what the gentle- man from Minnesota said if he and his party would put their votes where their voices are. They come in with all these amendments, but when the vote comes we have to squeeze it through by a small majority because we have to squeeze it through without their votes. Mr. QUIE. As soon as you adopt the opportunity crusade we will be glad to give you our votes. Chairman PERKINS. Let me say in response to the statement made by my friend from Illinois, Mr. Pucinski, that I have listened with considerable interest in the last 2 days to questioning of the minority and have been impressed by some of the questions such as those from Mr. Dellenback. I was impressed with the questions of Mr. Quie on health centers, Mr. Pucinski, and it seems that we are going at least to get some bipartisan support. Mr. PUCINSKI. You wouldn't want to make a bet, would you? Chairman PERKINS. I am sure that Sargent Shriver is going to do his best to see that we get more health centers in rural areas if the funds will permit it. Can we look forward in that direction, Mr. Sargent Shriver, if the programs are properly funded for rural areas, more health centers? Mr. SHRIVER. Neighborhood health centers. Chairman PERKINS. Yes. Mr. SHRIVER. Joe, would you like to respond to that? Dr. ENGLISH. Yes, sir. The need is so great there, Mr. Chairman, and the difficulties sometimes are greater, too, so that next year we hope to do even more in those areas of the country. Chairman PERKINS. Those are your plans to make a greater concen- trated effort intO th~ rural areas. I think that ought to bring us bi- partisan support. `` ` Mr. QulE. Mr. Chairman. May I ask one question about the chart over here. Is the family planning money additional to what we find in the neighborhood health, center? Mr. BERRY. Yes. Mr. SHRIVEn. That is the separate money from our bookkeeping ap- proach but you get the family planning on both places as a result. Mrs. GREEN. Mr. Chairman. Chairman PERKINS. Mrs. Green. Mrs. GREEN. This is off the community health centers subject, but does the Office of Economic Opportunity give any funds of any kind for any purposes to various foundations that channel them back to specific programs? PAGENO="0054" 892 ECONOMIC OPPORTUNITY ACT AMENDMENTS OP 1967 Mr. SHRIVER. Do we give money for any purpose to any founda- tions? There are some organizations known as foundations which I can recall we have funded, but I don't think they are foundations m the traditional sense of being grantmaking operations themselves. Mrs. GREEN. Such as? Please go ahead, such as? Mr. SHElVER. Ted reminds me that we gave one to the American Bar Association Foundation which has the purpose of legal education. Mr. SUGARMAN. It is a research program to determine the dimen- sions of the needs for legal services in the country and evaluate. Mrs. GREEN. You did not give money to a foundation which then channels money back, for example, to Headstart? Mr. BERRY. No grants to foundations that in turn fund programs, no. Mrs. GREEN. How do you finance your Headstart teachers in New York City, for example? How do you pay their salaries? Mr. SHElVER. How do we pay the salaries of Headstart teachers in New York? This is Jule Sugarman, the Director of Headstart. Mr. SUGARMAN. The grant to New York City has been to the New York City Community Action Agency which in turn snbcontracts to various delegate agencies. Some of these are settlement houses, some of them are community centers, and there is also a major contract with the Board of Education in New York City. Deutsch as part of New York University. That is a research demonstration and training contract. The contract there is with New York University. Mrs. GREEN. Could I ask you to check to see if foundations are given money and to what extent, and may I have a list of those, and do you have a list of the various groups that I asked for the other day and the amount of money that had been given to them in contracts? Mr. SHElVER. That has been submitted to the committee staff for the record. Mrs. GREEN. When we ask for this, Mr. Chairman, could we get them in our offices, because otherwise the staff doesn't share them with us. Mr. BERRY. This is in response to your request, Mrs. Green, of the organizations that have received money for various programs. * Mr SmavER. One does come to my mind. The Job Corps Center in Texas, Camp Gary, is run by something called the Texas Educational Foundation. That is what I meant when I said we have given grants to organizations that haYe the word "foundation" in the title. On the otherhand, that foundation is not a foundation like, say, the Ford Foundation, which is busy distributing assets or money. That was a special thing set up by the Governor of Texas. We funded that but it is not a foundation in the normal sense of the word. There are prob- ably other cases like that. Chairman PERKINS. The committee will recess for about 12 or 13 minutes to go over and answer the call and come back and run to about 5 :30. (Brief recess.) Chairman PERKINS. The committee will come to order. Mr. BERRY. Mr. Chairman, could I in part respond to Congress- woman Green's inquiry about foundations? Chairman PERKINS. Yes, sir. Mr. BERRY. I don't know exactly if she has any example in mind or any source of information we are not privy to, but there are two PAGENO="0055" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 893 instances in which we have in the past made grants. There was the Community Service Foundation in Florida in 1965 to which we made a grant for the conduct of a migrant program. They actually operated the program. This was later transferred into another community serv- ice action agency for the conduct of that program. Then we have had a relationship with the North Carolina fund which undertook to assist communities in North Carolina in establishing community action agencies to which we made grants once they were brought in existence. Those are the only instances that I am aware of. We could screen it further, but I am not aware of any grants to foundations which in turn used our funds to fund other agencies. That was the import of your question? Mrs. GREEN. Yes; it was. I will check the reports I have on that. Mr. BERRY. We will be glad to respond to it with information. Mr. SHRIVER. May I ask one question? Bert Harding, who is my deputy, used to be with the Internal Reve- nue Service, and he pointed out that for a foundation to be a founda- tion under the law it has to respond to a particular section under the Internal Revenue Code. There are many foundations which use the term "foundation," but they are not foundations in that sense, and there are some which are, in fact, qualified to do charitable work in the sense that most people use the word "foundation" but they do not use that word in their title. Would you please point out to us whether it is the so-called chari- table foundation with the tax-free exemption that you are interested in? Mrs. GREEN. I was interested to know if. you used any foundations to channel back funds. Mr. SHRIVER. When you say "broadest terms," you mean one that is a foundation? Mrs. GREEN. It could be either way. Chairman PERKINS. Mr. Sôherle. Mr. SCHERLE. The question that I asked previously was not as facetious as it might have appeared to be. With the bells, of course, I dic1n~t have time to finish my question. To complete that question, I meant to ask whether, if local involvement had not been forthcoming on a voluntary basis, the OEO would bring in Govermnent employees such as doctors or people in the field of medicine? Dr. ENGLISH. No, sir. I am not aware of any such threat. Mr. SOHERLE. At all? * Dr. ENGLISH. No, sir. Mr. SCHERLE. I will withhold my remaining time, Mr. Chairman, for later on. Chairman PERKINS. Mr. Gardner. Mr. GARDNER. Thank you, Mr. Chairman. I don't have any ques- tions. I would only like to compliment Dr. English on his very fine presentation. After listening to several days of testimony from several of your colleagues, I think it is quite refreshing to hear straight answers. It is also quite exciting to hear what you are doing in the field of neighborhood health centers. I commend you and hope your success will continue. I don't have any questions. Dr. ENGLISH. Thank you, sir. PAGENO="0056" 8~4 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 196 7~ Chairman PERKINs. Mr. Gibbons, do you have any further ques- tions? Mr. GIBBONS. No. Chairman PERKINs. Mr. Sclierle. Mr. SCHERLE. No more on health centers. Chairman PERKINS. Mrs. Green? Mrs. GREEN. I have no questions. Chairman PERKINS. Mr. Pucinski? Mr. PUCINSKI. Mr. Chairman, I think we could all agree that the health center is one of those parts of the poverty program that very seldom gets any publicity and yet they are doing a tremendous job in a quiet way to bring respect and dignity and help to people who need it most. I am delighted that we have had this opportunity to hear the testi- mony on this program because it does start giving us a picture of the total fabric of the war on poverty. It is so difficult at times for us to show people the totality of this effort and how the whole thing fits together in trying to help these people and give them the kind of help they need. I think the testimony here was most impressive. I want to con- gratulate the staff for the job they are doing. Chairman PERKINS. Mrs. Green. Mrs. GREEN. Mr. Chairman, I have just one other question. How many programs similar to the Portland one are you funding in the Tjnited States? Dr. ENGLISH. So far we have funded 21, ma'am, in this fiscal year. We hope by the end of the fiscal year to have a total of between 30 and 32. Mrs. GREEN. These would be in cities where you would pick out ap- proximately 1,000 families? Dr. ENGLISH. No. Mr. SHRIVER. That is the only one like that. Dr. ENGLISH. That is correct. Mr. BEREY.Portland-Kaiser is the only one of that kind. Dr. ENGLISH. What would be more typical would be the urban areas. Mrs. GREEN. Portland is the only one? I Dr. FRANKEL. There are two other group practices funded, but in each case they have selected target areas rather than a number of families to serve as the service basis of the program. Mrs. GREEN. Is it still on the same basis of maximum care for every- one in the family in the target area, and the only difference would be one would be a target area and the other a thousand families selected.. Dr. FRANKEL. That is correct. The others are King City, Monterey, Calif., and Bellaire, Ohio. Mrs. GREEN. Thank you. Dr. FRANKEL. Thank you. Chairman PERKINS. Mr. Scherle.? Mr. SCHERLE. Mr. Chairman, I do have one more cuestion for Dr. English. Is it true that 47 percent of Job Corps enrollees have failed the selective service induction exams? Dr. ENGLISH. Yes. PAGENO="0057" ECONOMIC OPPORTUNITY ACT AMENDMENTS' OF 1967 895 Mr. SCHERLE. Further, I understand that oniy 10 percent or so of the graduates enter military service. Mr. SHRIVER. I think it is 12, but I don't think it is only. I think it is very good. That is very high because, you see, a lot of our kids are too young to get in. They are 16, 17, and 18. They are not yet able to get in, and of course who want to get in, a large proportion of them do qualify after being in the Job Corps, so that the 12 percent is a high rather than a low figure. Mr. SCHERLE. This was my point then. The reason for more of the graduates not serving in the military is because of their age, not be- cause of their incapability or IQ? Mr. SHRIVER. If you would let me give you a tentative answer, I think that is correct, but I will cheek it. I don't think we are grad- uating any kids from the Job Corps who can't get into the Army or Navy for mental or physical reasons. I don't think so, but I will check that for the record. (The information to be supplied follows:) The percentages of Job Corps completers who do not qualify for military service are 27.8%, category 1Y, and 13.9%, category 4F. Chairman PERKINS. Mr. Dellenback. Mr. DELLENBACK. May I ask three brief questions? How many by this definition of poor are there in the United States who qualify as poor? Dr. ENGLISH. Yes, sir. If you think of clusters of poor people in concentrated areas of poverty we would estimate about 16 million. Mr. DELLENBACK. How many are now being served by these centers? Dr. ENGLISH. We would hope to bring these services within the range of about a half million people. Mr. DELLENBACK. On the basis of the present authorization? Dr. ENGLISH. Yes, sir. Mr. DELLENBACK. About half a million people? Dr. ENGLISH. Yes, sir. Mr. DELLENBACK. Have you projected how many dollars it would take to extend these services, to all of the poor in the United States? Mr. BERRY. We have a projection figure. Mr. DELLENBACK. It may already be in the record; If so, I apologize. Mr. SHElVER. This is Dr. Levine. That is his business in our place. Mr. LEVINE. The estimate, which is a rough estimate, is on the order of $500 million a year, assuming implementation of title XIX of the Social Security Act, and of similar programs which support health services for the poor. Mr. DELLENBACK. Thank you, Mr. Chairman. Chairman PERKINS. Mr. Gardner. Mr. GARDNER. I would like a clarification, Mr. Chairman. Will Mr. Shriver and his associates be back to continue our discussion on com- munity action programs tomorrow? Chairman PERKINS. Yes. Mr. GARDNER. I will hold my question until then. Chairman PERKINS. Mr. Steiger. Mr. STEIGER. If I may ask Mr. Shriver to get back to the question that I raised with you earlier on the distribution of urban versus rural community action funds, is it correct that under the proposed legisla- PAGENO="0058" 896 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 tion which we have under consideration you would be able to fund only 50 additional rural CAP programs? Is the 50 a correct figure? Mr. SHElVER. Yes, Congressman, that is a correct figure, but what we would be able to do in addition to 50 new ones is that we would be able to take about 130, I think it is, existing rural community action agencies which have only had a program development grant, take them from that stage to the point where they are actually executing programs. Do I make myself clear? Mr. STEIGER. Yes, you do. The reason I asked the question is because the Governor of Wisconsin, Governor Knowles, has written to the members of the Wisconsin delegation. Let me read what he says, and then I wish you would comment on this. As you will note from the map, we have at least nine community action agencies which have filed application for the program development grants which we cannot officially organize. Where do those stand in relation to what you have requested for community action in the fiscal year 1968 budget? Mr. SHRIVER. Well, our estimate is that we would try to open up 50 community action agencies like those, those 50 would cover about 300 coiufties because they are multicount.y. To come right back to Gov- ernor Knowles' letter, it would mean that nine of the 50 would have to be in Wisconsin in order for all nine of those to be funded under our present budgetary limitation. Mr. STEIGER. Now if I may ask, because the gentleman from Min- nesota touched on this, if it is correct that 45 or 46 percent of the poor in America are in rural areas, the figures which you gave in testimony last week indicated that you were programing for 36 per- cent of the .community action funds going to rural areas. Mr. BERRY. That is correct, from 32 to 36. Mr. SHRTVER. Thirty-two now and it would be 36 next year, so that the imbalance still exisits. Mr. BEimY. That is right. Mr. STEIGER. This does disturb me quite frankly. Mr. SHRIVER. It disturbs us all. Mr. GIBBONS. Will the gentleman yield right there? Mr. STEIGER. Yes, I yield. Mr. GIBBONS. It is very hard to make work in the rural area so that we have other programs for the rural poor like the loan programs, and the migrant education programs, and things of that sort. The problem is that the community action concept works better where you have people clustered together and the rural poor are so spread out that it is hard to make these programs work. If the gentleman has a suggestion as to how we can get more pro- grams to these people. I know we would certainly like to have them. That has been a. problem that has plagued us from the very beginning. It is very hard to get the people in the rural areas to meet together. A great deal of t.he VISTA work has been done in the rural areas and s~ery effective VISTA work has been done in the rural areas trying to ove~come this problem of communication and transportation. Mr. STEIGER. If I may, also, Mr. Chairman, can you. give for the record any kind of a breakdown as to how we are going to sta.nd as PAGENO="0059" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 897 you propose the fiscal 1968 budget. for OEO in terms of the versatile community action money versus the earmarked community action money? Mr. SHRIVER. Yes, we can give you that right now or give it to you for the record. Mr. STErnER. Will you give us that kind of breakdown? Mr. SHRIvER. Yes; we can. We have that. Versatile in the 1968- Mr. QuIE. That is a book we have. Mr. SIIRIVER. Yes, you have it, fortunately, for more than 72 hours. Under the tab that says "Community action program C-4," there is a table on that page and the fiscal 1968 estimate shows $329 million for local initiative programs. That compares to $86 million in 1966 and $247.3. That is actually going to work out to about $247.3. That is what happened to us last year when we had these cuts coupled with all the earmarking. It went down. Under the current authorization request it would go up to $329 which is that third coiunm there. Mr. QtTIE. Would the gentleman yield? Mr. STEIGER. Just one moment. So that in fiscal 1968 where you estimate local initiative programs as being $329 million, special emphasis or earmarked funds would be $614 million so that you are actually, again, in my judgment, contrnu- ing an imbalance between the earmarked funds versus the versatile funds. Mr. SnRIvrai. All we do is estimate what the communities are going to ask. So far as we are concerned, we would happily go back to the way the bill was when we started when there was nothing earmarked for anything. Let me just say for the record that one of the reasons that the Headstart program got so far so fast, and I think so effectively, was that we had the money at our disposal to exploit the opening when it occurred so that we went from a program of maybe $21/2 million to maybe $88 million without talking to anybody because we had money where we could respond to the local demand. But since that first time we have never had that kind of flexibility. We have always been bound. Some people would say hamstrung by regulations which prevent us from exploiting openings. A good example is the neighborhood health services or legal services programs or any of six others. If we had the money, we would go further in terms of what the people want, So that this column does not represent an arbitrary ruling from Washington. It represents what we think is going to happen nationally. Mr. STEIGER. The gentleman from Minnesota. Mr. QtrIE. Yes. I understand your answer to Congressman Goodell's question to be that you would prefer nothing earmarked. Mr. SHRIVER. That is right. When we started, we didn't have it. Mr. QiJIE. Then why do you request such a substantial increase in the earmarked programs when you could get along on the same amount of money by funding each of those programs you want to give a greater amount to with the versatile money? Mr. SHUIVER. We don't earmark this. What we are trying to do in this kind of table is to explain how we think it is going to end up in terms of the applications that will be coming in. PAGENO="0060" 898 ECONOMIC OPPORTTJNITY ACT AMENDMENTS OF 1967 ~If, for example, something happened and nobody wanted legal serv- ices, so far as we are concerned that could just disappear but not below the $22 million that you put up in the law. We have to use $22 million by law or give it back to the U.S. Treasury because ~ is earmarked for the purpose. Mr. QmE. I understand. Mr. SHRIVER. Otherwise we just come over here with a glob figure and then all of you, I think, would start to say to us, ~cWThat do you expect to spend here or there?" That is why we say "estimate," and on another chart you will see that that says "estimated community de- mand." That is our way of trying to explain that that is not some- thing that we require or that we enforce. It is what we think is going to come to us from across the country. Mr. STEIGER. In regard to that chart, I don't find anywhere listed, for example, the Foster Grandparents program. Mr. SHRIVER. That is one of those that would be. down under the fourth from the bottom line which says "Other programs." You will see 42.3. In there, for example, there are a number of programs like Foster Grandparents that are under "Other programs." We just ran out of space on the chart. There are lots of smaller programs. Mr. STEIGER. You have lumped those together in the "Other pro- grams" category? Mr. SHRIVER. Excuse me. I am sorry. I made a mistake. Foster Grandparents comes under the so-called Nelson amendment which we delegated to the Labor Department and therefore it doesn't appear under community action even though the money last year was under community action. Mr. STEIGER. In fiscal 1968 the moneys don't come from OEO? Mr. SHRIvER. They come to us under the bill, but we now call it na- tional manpower programs and we delegate the administration of those over to Labor. We get the money for them just as we do for the Job Corps, but then the Department of the Interior runs some Job Corps centers for us. Mr. STErnER. The testimony before the subcommittee that handled the Older Americans Act from the National Farmers Union indicated their support for transferring Foster Grandparents entirely out of OEO and putting it directly into the Commission on Aging. Mr. SHRIVER. They are over in Labor now. Mr. BEIIRT. We developed the Foster Grandparents program ifl concert with the Council on Aging and we funded those programs until Congress earmarked the Nelson-Scheuer funds. We delegated the program to the Labor Department. The Foster Grandparents will con- tinue to be a program generated by the Council on Aging, but they will receive their grant funds from the Department of Labor because of the delegation of all the Nelson-Scheuer programs to the Department of Labor. Does that confuse or clarify?. Mr. STEIGER. But the funds that you delegate to the Department of Labor actually are authorized and appropriated to the Office of Eco- nomic Opportunity? Mr. BERRY. That is correct. Mr. Smrn~. Could you frankly give me any indication why we should continue appropriating to one agency what you have delegated PAGENO="0061" ECONOMIC OPPORTUNITY ACT `AMENDMENTS `OF::'1967 899 to another when in fact we could do it more simply by going with an appropriation to the Department of Labor in this case? Mr. SHRIVER. The reason is complicated, but I think it is pretty im- portant. Congress apparently through in the beginning that the poor needed some agency that was watching out for their interests specifi- cally without having to be concerned about anything else. The money is appropriated to us and we watch it on behalf of the poor and also on behalf of the Congress. Let me say that I think it is easier for a Congressman to evaluate the effectiveness or lack of effectiveness of moneys `given to us in our helping the poor when they are in one place and you can analyze them in one job. Excuse me. Mr. STEIGER. Go ahead. I would respectfully disagree. I think here we have a case where we fudged a little bit. Foster Grandparents is not a program, it seems to me, which is designed `exclusively for the poor. It is one which ought to be open in the age range of Foster Grand- parents, so that the program is made available to anybody who can qualify and can handle what Foster Grandparents authorize. I would seriously object to that kind of a delineation on the basis of who is poor and who is not poor and one who would then be eligible to run a Foster Grandparents operation. It seems to me that it would make eminently good sense to avoid the sleight of hand that we can go through to run money through your agency when we can't watch it any more effectively than in the De- partment of Labor. We can watch it more effectively in the Depart- ment to which you have delegated it. Mr. SHRIVER. This is an extremely important point, Mr. Chairman. I think it is very important to understand that the `same line of thought which you are expressing could apply to anything that is done for the poor and many people think that. In other words, if we start neighbor- hood centers for the poor, some people think that that is giving an un- fair advantage and everybody ought to have that kind of service. If we start Headstart to try to help poor kids, in particular who have no start to try to get even, they say everybody ought to have that and the poor go back to where they were before. So it is inherent in this legislation which the Congress passed, that the poor get extra help in many different ways of which the Foster Grandparents program is just one. The reason these programs have come into existence is because a group of people were concentrating solely on the needs of this special group in our society-the poor. If the Congress on the other hand makes the decision which you seem to be indicating that once a program is good everybody ought to have it, then believe me, there isn't enough money and the poor don't get it any longer. That was the history. That is why this got started in the first instance and that is why I wanted to respond to your statement. Mr. STEIGER. Might I comment, Mr. Shriver, that I do not disagree with the need to concentrate on the needs of the disadvantaged and the poor in our society. That is, after all, exactly what the war on poverty `is intended to do, but it seems to me that there are programs, and I would point to Foster Grandparents as one, which are not necessarily nor should they be necessarily limited to just the poor. I would not PAGENO="0062" 900 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 make the same argument in terms of attempting to assess whether it is run by OEO or by HEW or Department of Labor because there are other programs which must of necessity concentrate on the poor. In Wisconsin where I think we have an imbalance in the amount of funds that we have gotten between Headstart and Nelson-Scheuer, we have gotten a tremendous amount of Nelson-Scheuer funds but that has as a result spread, I think, too thin the versatile funds for conmiunity action programs in Wisconsin which by local initiative could do things for the poor. I am not at all sure that I entirely agree with what you have just stated. There may be some programs, I think there are, that should con- centrate on the poor. I don't know that you should, therefore, say that everyone of the programs that are authorized and appropriated funds under this act or other acts are necessarily limited to that and I think what happens in Foster Grandparents because of the delegation au- thority is one of the reasons that I think we should take a long, hard look at OEO to determine whether there should be a spin off of cer- tain or all of the agencies that are now under your jurisdiction. Mr. SHRIVER. We did spin off a couple without any congressional action where we thought that they were not involving the poor adequately. In the case of the foster grandparents I am not absolutely sure why you think it isn't appropriate for the poor, when, in fact, it is the poor babies or poor children who are suffering from this lack of attention and there are plenty of elderly poor who need the jobs as a matter of income as well as a matter of psychological satisfaction. We have not been able to reach even those who are poor, the chil- dren or the elderly yet. Why is it that that program in your judgment is not one that should concentrate on the poor? I am just interested. Mr. STEIGER. If in fact our aim is to try a.nd help the poor grand- child in this instance, then it seems to me that this is the kind of pro- gram that you ought to open to as many as you possibly can and not limit it just to poor foster grandparents. Mr. SHIUvER. There are plenty of poor foster grandparents who are not included yet who need the work. Mr. STEIGER. I agree and they should be given- Mr. SHRIVER. We want to give it to them. Mr. Si~mo~n. But not to limit because then you deprive the child. Mr. GIBBONS. Will the gentleman yield? Mr. DELLENBACK. Mr. Chairman, may I just inquire whether it is possible to conclude this tomorrow. I recall that the Chair earlier indi- cated to the witness that as a special favor tonight we. would conclude at 1730. Chairman PERKINS. I tried to live up to the commitment a moment ago but Sargent Shriver attempted to answer further. Go ahead, Sam. Mr. GIBBONs. One of the problems we have in this thing is that I don't believe that all of us, and I include myself in this statement, really understand the dimension of poverty, how great it is in this country but if you took the $3,100 level as a level that people would automatic- ally step out of poverty and you took all the poor people in the United PAGENO="0063" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 901 States and took all the existing ongoing programs to move them out of poverty it would take in today's dollars about another $12 billion if we could by some magic formula get all this money to the people in the right place at the right time. If we expand these programs very much further we are going to find that we are really missmg the target by about 90 degrees when we fire at it. We are not coining anywhere near doing the jobs ahead of us. We have spent between $11/2 billion or $1,700 million and with all the other programs, the veterans' programs, aid to dependent children programs, aid to the blind, and aid to the dis- abled, it would take about another $12 billion a year to get these 32 million people up to just the bare bottom side poverty level. Mr. PUOIN5KI. Would you yield? Mr. GIBBONS. I would be glad to yield. Mr. PUOINSKI. I won't quarrel with the statement you are making but I think that the gentleman from Wisconsin raises a valid point. In my District I don't get a penny of antipoverty money. I don't think that we get one nickel in my whole congressional district and the gentleman is looking around to see if that is true. I have a book here for Cook County. I say that while my constituents have been very generous in their support of this program and I a~in sure will continue to be generous, they do ask `this question: "Where are we going to get some help?" My people would like to have their children go to Head- start and there is no magic line between the youngster that is in ex- treme poverty and the youngster not in extreme poverty. This is a problem that we have in delineating. Mr. GIBBONS. This is the only way I can answer. Your people are going to get an indirect or maybe a direct result because as people spin out of poverty hopefully. the real estate taxes that your people pay in `Cook County are going to help relieve their tax burden. They are going to get a diminution of crime and disease and the different other social problems we have and the people in the middle class like the ones you represent are going to have to understand and be patient. The poor just don't have a large enough constituency. Mr. Qmi~. I would like to ask a question of the witness, not have debate between our colleagues here. Mr. GIBBONS. I yield. Mr. QUT[E. Mr. Steiger was talking about delegated programs, and if I recall correctly, the tranfers of programs to the Department of Labor especially. I think the same it true in the Department of Edu- cation, where the money did not follow. The OEO had mortgaged the money and they did not get as much money as was expected on it before. This is the information I get from talking to people in other depart- ments. Mr. SHRIVEn. I don't think that is `accurate. What we had in the Foster Grandparent, and in a program called Green Thumb were e~istiug obligations for this fiscal year. When we transferred the funds we said to the Labor Department that they must fulfill the obligations already in existence for the Green Thumb program and for the Foster Grandparents program. If we had not said that, the Foster Grandparents, which we had a moral or if not a legal commit- ment to continue, might have been stopped altogether and the money used for alternative programs. When we made the delegation, there- PAGENO="0064" 902 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 19671 fore, we said that "Of the money we delegate you have to use a certain percent-it was $22 million-to keep alive the Foster Grandparents and Green Thumb programs which are in existence." That is what I think some of those people were referring to. Mr. Qurn. Will that mortgaging of the money continue or was that just in the first year? Mr. SHRIVER. That was a part of the transfer. Mr. QUIE. But after.the transfer are they able to make up their own minds or will OEO still ride herd on them? Mr. SHPJVER. They make up their minds on a grant-by-grant basis but we reserve the right to monitor the programs and make sure that they are, in fact, being operated and are beneficial to the poor. That is part of the job of this agency, to make sure that the standards of the programs are maintained and we do that not only on behalf of programs like that but let's say the Job Corps rural or conservation centers. We investigate them and work with the depar~ments involved to make sure that they are performing properly and there have not been any serious difference of opinion about that responsibility or the success of it. Could I say another thing on the foster grandparents? We have no objection to having, so to speak, rich grandparents in the program and under the VISTA associates program, where people volunteer, or want to volunteer we welcome them. The only place that we say the poor should receive priority is when we have to actually spend money. If we have to spend money to hire foster grandparents, the qualified poor elderly should get a shot at those jobs before a rich person gets it and if there are a lot of ba.bies not getting attention, we should give it to the poor ones. Our responsibility is to concentrate on the poor, not the others. That is our job. Chairman PERKINS. Following up that question on the programs that have been transferred, in your fiscal 1968 budget I would think notwithstanding the fact that this has been transferred to the Office of Education that it would be necessary in many community action programs throughout the country for your Office to expend more funds on adult basic education because I think the amount that is in the budget is only a drop in the bucket. Am I correct in that statement? I am talking about additional funds on your part. Mr. SHElVER. There is plenty of need for it, yes, sir. Mr. STErnER. Would the gentleman yield? Chairman PERKINS. I yield first to the gentleman from Illinois. Mr. PuGINsKI. How many agencies participate in this health center program? Mr. SHRIVER. How many agencies of the U.S. Government? Mr. PUcIN5KI. Yes. Mr. Su~IvER. Joe, do you want to talk about how many agencies participate? Dr. ENGLISH. I can think of two immediately; one, the Department of Health, Education, and Welfare who have been of great help to us. Our program is integrated totally with their health programs. Mr. Shriver and Secretary Gardner just signed an agreement that makes sure that there is not only programmatic integration but the moneys are integrated, too. PAGENO="0065" E~C0N0MIC OPPORTUNITY ACT AMENDMENTS OF 1967 903 Mr. SmuvER. What other? Dr. ENGLISH. HUD, for example. We are interested in a community where HTJD may be developing a neighborhood center. Mr. PtTCIN5KI. How about Public Health Service? Do they help? Dr. ENGLISH. Public Health Service has been very helpful, the Chil- dren's Bureau. Mr. PuCINSKI. We keep hearing discussions about phasing out OEO. We keep hearing discussions about the opportunity crusade. See if I am right. I think I am right using this example. This health center program is an excellent example of what we started out to do in 1964 when we created the Office of Economic Opportunity. Your function at that time primarily was to try and coordinate the exist- ing agencies into a more effective program and a more effective use of these agencies in a comprehensive plan for meeting the needs of the poor. If what you said is correct that you have HEW, you have HUD you have Public Service, and you have your own resources tying together all of these facilities to create a health center, then in- deed you are carrying out the very spirit behind the Office of Economic Opportunity. I do not see anything in the substitute legislation that would do that job. I wonder if you would like to comment on that, Mr. Shriver, so that we can get this record straight once and for all that what you are in fact doing is tying together various pro- grams for the most successful operation at the level where the poor people can get the greatest degree of help. Am I correct in that assumption? Mr. SHRIVER. That is correct, but there is an additional element that is essential which is the fact that we have the actual money to bring into existence the neighborhood health center. If we did not have the money and responsibility for bringing that concept and this center into existence, these other benefits would not flow into that area. You not only, therefore, have to have the power to coordinate, but you also have to have the money to make the coordination effective as well as the statutory authority. Mr. PuCIN5KI. All of these other agencies had existed for many generations previously, but there were not health centers because there was not an organization to draw them together known as the OEO where you now try to perform these services and bring together all these activities. Am I correct in that statement? Mr. SHRIVER. I think you are. Mr. QuIE. Would the gentleman yield? Mr. Pu0IN5KI. I yield. Mr. Quu~. How much money in the neighborhood health centers is coming from HEW? Mr. SHElVER. I would like Dr. English to respond. It will increase as we get more centers and as more money comes from medicare for the actual patient services. Dr. ENGLISH. I could, for example, submit for the record to you, Mr. Congressman, exactly what this integration of funds has meant in dollars and cents so far. Let me give you an example in a city of how it is working very well. In the city of Denver the first neighborhood health center there was funded a year ago. At the same time from working with health officials and neighborhood people in SO~-OS4-G7-pt. 2-5 PAGENO="0066" 904 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 that community we learned that the Children's Bureau was about to start a children's center for a poor community nearby. We got to- gether at the initiation of some of the local health authorities with the Children's Bureau authorities here in Washington and made this proposition. We said rather than have one center that serves the entire family and another center that concentrates on children, why don't we work together and make them both comprehensive centers where the Chil- dren's Bureau funds would pick up the cost of the children in our center and we would pick up the cost of the adults in another center. That was agreed to. It has been done. We now have two comprehensive neighborhood health centers and by the efficiency that was brought about by that coordination we have 11 other centers, and Denver is the first place where we will have citywide coverage for the poor. Mr. PUCINsKI. I am glad you brought that out because here is the real heart of the poverty program, the fact that you people were able to bring all of the resources of the country together and organize an effective program. I think that this is the point that is so often lost in discussion of the poverty program. Mr. QDIE. Will the gentleman yield? Mr. Pucixsu~. I yield. Mr. Quit. If community action was in the Department of Health, Education, and Welfare, what would have prevented you from doing the same thing? Dr. ENGLISH. Well, sir, that is a difficult question to answer. I think the Department of Health, Education, and Welfare has been doing all it can. I think what we are learning in the poverty program is that it hasn't been enough. I think this legislation permits us to do some new things to work with them. The one thing we are sure of is that we have a long way to go in meeting the health needs of the poor. Mr. QUIE. You haven't answered what would have prevented you, if community action were within Health, Education, and Welfare? Mr. SHElVER. The answer is like saying: "What if Edison didn't in- vent the electric light, or if he hadn't, would someone else have?" You can't say it would have worked someplace else. The point is that it is working where it is. Mr. PuCINsKI. Isn't it a fact, as was stated in the letter from Kane County, HEW has a very broad mission cutting across many func- tions. Your mission is a specific mission of bringing health to the 32 million people in poverty in this country. Mr. SHRIVER. That is correct. I have said that a number of times, including in my opening statement. We have, let's say, 2,500 people working at our place. If you could take 2,500 people out of HEW or Labor and say: Your only job is the poor, don't think about education of the rich, don't worry about health of the rich, don't worry about anything but the poor. They could do as well, maybe better. it is because we have a single objective which is the poor that there is at our place an atmosphere of concentration on that to the exclusion of conflicting loyalties to other PAGENO="0067" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 905 groups for competing jobs. So, I think, therefore, as I said the first day, that the more you can keep the poor and their interests under jurisdiction of one group, the better off you are going to be in helping the poor, whether it is us, or me, or somebody else. Mr. Quni. I would say that you have given the answer as to why I had recommended in the opportunity crusade that community action be in Health, Education, and Welfare is that that new agency would be admitted to the fore and as you said it can do as well or maybe better. That is what I expect it would. Mr. SHRIVEn. But that isn't what I said. Mr. QUIE. That is the way I heard it. Mr. SHRIVER. I want to make it clear that that is not what I said. I think that when you have a department which has interests which are very broad, some of which conflict with interests of the poor, you cannot help but pay some attention to your conflicting interest. It is like a conflict of interest if you are legislator or member of the executive branch. There is no conflict of interest in OEO because we have one interest, which is the poor. We are not concerned about the education of the rich. We are not concerned about the health of the rich. We are concentrating on one thing, which is that group which needs help most, and because of that we are able to give them better service, and I believe,, to come up with ideas which are fruitful for them. Mr. QUIE. We had the same situation when Health, Education, and `Welfare was not located together in one cabinet level department. Although there was a central interest in education in the Office. of Education, it was felt by the Members of Congress at that time t.hat giving it Cabinet level status certainly enhanced its opportunities to improve the education of the people of the country. Mr. SHRIVER. Let me say the OEO should have that status. Mr. PuOIN5KI. When the President first proposed this program, the very reason that this program was proposed was because we had an HEW, we had a Department of Labor-we had all these agencies-but the poor was not getting the kind of attention for a massive effort to help them that they deserved. So the President came to Congress with his proposal for the War on Poverty and the creation of the Office of Economic Opportunity whose sole responsibility wa.s to deal with this problem. This is the only bill in the history of this country where every single member of the cabinet, except the Secretary of State, testi- fied and they testified because they said that in order to really make this war against poverty effective, we had to have a single agency to coordinate all the activities and concentrate on this massive program in America. That is what you have been doing, isn't it? If the program was trans- ferred to HEW it would just get lost in the shuffle wouldn't it? Dr. ENGLISH. May I conunent, sir, on your point and quote a high official of HEW who just said this in a press conference recently con- cerning this program and use his words? I think this explains the great enthusiasm and the help we have received from that Department as well as other Departments. He said: This program, the Neighborhood Health Center program, has shown Us in terms of the Federal Government new ways of cooperation. I think that it is not PAGENO="0068" 906 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 enly the cooperation, but it is the stimulus that has come through a number of other government agencies from HEW to wake up to the problem of the poor and I think that in a sense there is a certain amount of competition involved which to my way of thinking is a singularly good thing. Mr~ SHRIVER. Who said that? Dr. ENGLISH. That was Dr. Phil Lee. Mr. STEIGER. I was asking you to yield for the purpose of finding out the answer to the question that you asked some time ago about the amount of funds which in this case HEW was supplying for neigh- borhood health centers. Dr. ENGLISH. Yes, sir. Let's give you some examples now. Mr. STEIGER. Can you give us the total? Dr. ENGLISH. The totals? Mr. BERRY. It varies from conmiuuit.y to cornrnunuity depending upon the components that are brought in. There are a number of services in HEW and HUD that make up the package and it varies from community to community. Dr. ENGLISH. For example, in New York City in one of our centers the total budget is $3 million; $1.3 million is the OEO share. The other fumds come from the department of hospitals, the mental health board, welfare, MFY grants, title XVIII, and title XIX. Mr. SHRIVER. May I just mention at this point that State moneys go into this, too, and so do private moneys. The one in Louisville, Ky., has $150,000 in private foundation money, so it isn't just one depart- ment of the Government versus another or in combination, but it is a whole host of combinations. Mr. STEIGER. Could you supply for the members of the committee- you have, as I recall, 21 neighborhood health centers. Dr. ENGLISH. Yes, sir. Mr. STEIGER. Now in operation. Dr. ENGLISH. That is correct. Mr. BEanY. They have been financed. They are in phases of opera- tion. Mr. STEIGER. Phases of operation. Mr. BERRY. Yes. Chairman PERKINS. At this point let me ask that when a member makes a request for material for the hearing and supplying of the in- formation to that particular member, how difficult would it be to sup- ply the remainder of the members the same information. Let the staff of the committee furnish the other members the same information. Could that be done, so that we will not lose track of what is in the record, for other members as we go along without too much difficulty? Mr. SHRIVER. Yes, sir; it certainly can be done. In fact, that is what we had been doing when Mrs. Green asked about her getting something directly; I answerçcl that we had given it to the committee so that everybody could get what everybody else gets, but we can do both.~ Chairman PERKINS. I am hopeful the committee staff will make that available. I know in instances I miss out on it. I know the other mem- bers do. `Mr. PucIxsKr. Mr. Chairman, may I make the suggestion that the response to all of these requests he filed through the chief clerk of our committee. He will then photostat them or get the necessary nmnber of copies from the agency and shoot them downrange, and you will have the record of the court reporter, so that the information will eventual- ly he incorporated in the record of the hearing. PAGENO="0069" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1067 907 Mr. QUIE. Let's find out what information we are going to receive. Are we going to receive the total amount of HEW money that goes into the 21 neighborhood health centers? Is that correct? Dr. ENGLISH. Yes. Mr. QUIE. If you break it down by each one perhaps it would give' us a better understanding because some have been in operation longer than others. We can get a better picture'of the extent to which they' may participate later on. Also are there any other departments of the Federal Government that contribute? If so, I think that information we ought to have also.. Dr. ENGLISH. Very good. (The information referred to follows:) FUNDS GOING INTO OE'O-STJPPoRTED NEIGHBORHOOD HEALTH CENTERS FROi~ SOURCES OTHER THAN OEO A. HEW PROJECT GRANTS NHC grantees may apply for and receive project grants covering part of their services from other government agencies. The extent of this kind of joint fund- ing is expected to increase, both in terms of the number of grantees receiving multiple support, and in terms of the proportion of total funds coming from sources other than OEO. Examples of this kind of coordinated funding already under way are the Denver Neighborhood Health Center, which has received a total of $2,119,209 from the Children's Bureau, under its project granting authority, in addition to the funds granted by OEO ($3,829,315 over a 2-year period) and to the funds made available by the city of Denver ($454,774) ; similar coordinated arrange- ments exist in the North Lawndale, Chicago, center, where the Children's Bureau supports 38% of the total budget for the pediatric portion of the portion. B. FUNDS FOB SPECIFIED SERVICES, OB FOB SERVICES TO SPECIFIED INDIVIDUALS Services to certain categories of individuals, and certain specified services are the responsibilities of other programs and agencies, OEO requires that its NHC grantees make provisions whereby funds to pay for such services flow into the center. OEO pays only for those services which cannot be paid for from other sources. Examples of these types of funds are those meant to finance certain services to persons aged 65 and over under Title 18 of Social Security Act (Medicare), and those funds available under State programs established under Title 19 of Social Security Act (Medicaid). If Title 19 is fully implemented, Federal-State Medicaid funds will, within several years, become the single greatest source of support of NHC operations. Arrangements for payments to NHC's under Title 18 and 19 and under Federal State vendor medical care programs to persons on categorical public assistance are currently in, various stages of completion. It is anticipated that this proc- ess-which takes place at the local level-will be encouraged and facilftated by the HEW-OEO agreement on coordinated funding of comprehensive health serv- ices, signed and issued by the Secretary of HEW and the Director of OEO on May 2, 1967. A copy is attached for the Committee's information. A JOINT STATEMENT OF THE DEPARTMENT OF HEALTH, EDUcATION AND WELFARE AND THE OFFICE OF ECONOMIC OPPORTUNITY Coordinated Funding of Healt1~ Services in Projects Receiving or Eligible for Assistance Under Programs of tlie Department of Health, Education and Welfare, and. the Office of Economic Opportunity It is the policy of both the Department of Health, Education, and Welfare,. and the Office of Economic Opportunity to encourage the delivery of eompre- PAGENO="0070" 908 ECONOMIC OPPORTUNITY ACT AMENDMEi~TS OF 1967 hensive and continuing health services. While there may be multiple and varied sources of support for the provision of health services, efforts should be made to coordinate public funding in such a way that when the services get to the ~eopie they are meant to reach, they are as comprehensive and as unfragmented as possible. Under the Economic Opportunity Amendments of 1966, the OEO is authorized to support programs of comprehensive health services in poor neighborhoods, patterned primarily on the neighborhood health centers previously funded under the Office of Economic Opportunity demonstration program. These programs are to be operated with maximum feasible utilization of existing agencies and re- sources. OEO is undertaking this program not to establish a new and separate set of institutional arrangements for the support of health services to the poor, but to make possible the pulling together of disparate sources of funds and serv- ices into a coherent whole, by (1) providing the needed "seed money," and (2) by paying directly for the services which cannot be supported by other sources, or services to poor persons who may not be eligible under other programs. Also, since the summer of 1965 OEO has sponsored Project Head Start; currently, 160,000 children are in full year programs and 550,000 will be served in next summer's programs. One of the key aspects of Head Start is the pro- vision of essential medical, dental, social and psychological services to dis- advantaged children who are in need of them. Head Start facilitates, coordi- nates, and fills the gaps in the delivery of medical care to assure that services actually reach the poor children in the program that need them. In doing so, it is intended that maximum use be made of existing respurces in each com- munity. The headquarters and regional staff of both HEW and OEO will encourage States and local communities to enter into coordinated funding arrangements and will assist local communities in working out the details of such arrangements. The following outline illustrates how coordinated funding arrangements may be made. * JOHN W. GARDNER, Secretary, Department of Health, Education., and Welfare. MAY 2, 1967. SARGENT Snnivu~, Director, Office of Economic Opportunity. MARCH 15, 1967. Mr. SHRIVER. Would it be agreeable to YOU if in those figures we make a projection of wha~t will be in some of these centers, because some of them are not operating yet. We can't tell you precisely, therefore, how much HUD money or how much State of Illinois or Massachusetts money will be in them. Chairman PERKINS. Mr. Shriver, I think as far as I know there are no other qusetions on the health centers. It seems that everybody has had an opportunity to go thoroughly into the subject matter. What. time can you appear before the committee in the morning with your associates? Mr. SHRIVER. Whenever you ask, whenever you say. Mr. DELLENBACK. What will be the next program? Chairman PERKINS. And at the same time tell us about the com- munity action programs. Mr. STIRIVER. We had planned to go next into legal services pro- grams and then go to Upward Bound, from that to the neighboorhood ~enters prograni which is estimated at $160 million from that into the Indian program and the migrant labor program. I think that would take care of tomorrow. * Copies of the extensive explanatory outline may be obtained from HEW or OE~). PAGENO="0071" EICONOMIC OPPORTTJNITY ACT AMENDMENTS OF 1967 909 Chairman PERItINS. Can you conveniently get here in the morning by about 9:30? Mr. STIRIVER. Yes, sir. Chairman PERKINS. We will try to get in a full day tomorrow then. Mr. SHRIVER. Thank you. Chairman PERKINS. The committee will recess until 9:30 tomorrow. (Whereupon, at 6:04 p.m., the committee recessed to reconvene at 9:30 am., Tuesday, June 20, 1967.) PAGENO="0072" PAGENO="0073" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 TUESDAY, JUNE 20, 1967 HOUSE OF REPRESENTATIVES, CoMMrrn~eE ON EDUCATION AND LABOR, Washington, D.C. The committee met at 9 :55 a.m., pursuant to recess, in room 2175, Rayburn House Office Building, Hon. Carl D. Perkins (chairman of the committee) presiding. Present: Representatives Perkins, Green, Dent, Pucinski, Daniels, Gibbons, Ford, Scheuer, Meeds, Burton, Ayres, Quie, Goodell, Ash- brook, Bell, Gurney, Erlënborn, Scherle, Dellenhack, Esch, Gardner, and Steiger. Also present: H. D. Reed, Jr., general counsel; Robert E. McCord, senior specialist: Louise Maxienne Dargans, research assistant; Ben- jamin F. Reeves, editor of committee publications; Austin Sullivan, investigator; Marian Wyman, special assistant to the chairman; Charles W. Radcliffe, minority counsel for education; John R. Buck- ley, chief minority investigator; Dixie Barger, minority research as- sistant; and IV. Phillips Rockefeller, minority research specialist. Chairman PERKINS. Let us come to order. A quorum is present. How do you desire to proceed this morning, Sargent Shriver? If I understood, after we completed the health segment of your presenta- tion yesterday, you were going into what phase now? Mr. STIRIVER. Well, with your permission, Mr. Chairman, we would start this morning with the legal services program report? Is that agreeable? Chairman PERKINS. Yes STATEMENT OP SARGENT SHElVER, DIRECTOR, O~TICE OP ECO- NOMIC OPPORTUNITY; ACCOMPANIED BY BERTRAND N. HARD- ING, DEPUTY DIRECTOR; DONALD N. BAKER, GENERAL COUNSEL; ROBERT A. LEVINE ASSISTANT DIRECTOR, RE- SEARCH, PLANS, PROGRAMS, AND EVALUTION; THEODORE N. BERRY, DIRECTOR, `COMMUNITY ACTION PROGRA1VE; AND EARL JOHNSON, DIRECTOR, LEGAL SERVICES PROGRAM Mr. SITRIVER. Then, may I introduce, Mr. Chairman, to you and the other members of the c'ommittee present here, Mr. Earl Johnson, Jr., who is the Director of the legal services program for OEO. He is seated here next to Mr. Berry, and he can start his presentation now, please. 911 PAGENO="0074" 912 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 STATEMENT OP EARL ~FOHNSON, DIRECTOR, LEGAL SERVICES PROGRAM Mr. JOHNSON. Thank you very much, Sarge. Mr. Chairman and members of the committee, yesterday you heard from Dr. English about a new and innovative program in the health field. It follows a tradition of Federal support of new and important programs in the health field. But until just 2 years ago the Federal Government had not been involved in any programs in the legal field. Yet, in 2 years some dramatic progress has been made. There are now legal services projects in 48 of the 51) States of the Union, in 45 of the 50 largest cities. There are, in just 2 years, 700 full-time law offices funded and 1,400 full-time attorneys. Now, this dramatic progress could not have been made without the wholehearted support of the legal profession. I would like to quote to you briefly from the joint statement of Orison Marden, the president of the American Bar Association; Revius Ortique, the president of the National Bar Association; Maynard Toll, the national leader of the National Legal Aid and Defender Associa- tion; in their testimony before the Senate subcommittee juSt about a week ago. As they said: During this year of phenomenal expansion, the American Bar Association and other bar organizations have greatly stepped up their assistance in the promotion of the Legal Services program. A major portion of the energies and finances of these organizations is now being expended in support of the pro- gram. The presidents, officers, and other members of these associations have traveled throughout the United States to speak to these groups and other groups in legal services. State and local bar associations with some rare exceptions have also given overwhelming support to legal services. Nearly all of the programs funded have been supported by the local bar association or legal aid society. State and local bar associations have likewise sponsored numerous educational pro- grams, institutes, and seminars informing lawyers and laymen about legal services. The support of the ABA has led to a dramatic improvement, in the legal services for the poor in this country and yet it is as yet still a drop in the bucket. ~efore the legal services program came into existence, only one- tenth of 1 percent of the total amom~t that is spent on lawyers in this country was being spent on lawyers for poor people-one-tenth of 1 percent-to bring justice to 20 percent or more of our population. The American Bar Foundation in their preliminary study of the dimensions of the need for legal services found that there is a mini- mum of 14 million legal problems a year that arise among the poor of this Nation and only a few thousand of those persons have the assistance of lawyers. The legal services progTaln has three major functions. One is the representation of individuals and groups of poor people; to protect their rights, to protect them against incursions by landlords or credit comnanies, or the Government. Tiie second major function is community education or preventive law, attempting to teach the poor about their legal rights and respon- sibilities so that they can avoid common legal pitfalls and avoid get- ting into legal trouble. PAGENO="0075" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 913 And third, to make the legal system itself fairer for poor people. The methods that have been used by our projects around the coun- try are generally of three types. In the urban areas it's the neighbor- hood law office, staffed by anywhere from one to four lawyers, sec- retarial help, and very critically and very important by investigative aides that are employed out of the poverty population. These in- vestigative aides are a human link between the law office and the poverty community, and they are very often able to come up with evidence and information that a trained investigator or an ex-poIice-~ man would not be able to come up with, because they are part of that community. The second type of program and one that is used in some rural areas and some suburban areas where the poverty is more spread out, is the circuit rider programs. This will be one lawyer servicing a number of substations. He may be at one small town on one day and another small town another day of the week, on a regular schedule. Then in some migrant areas and Indian reservations and sparsely settled rural areas we have used mobile law offices, so-called lawyer- mobiles. This is a van-type truck or a trailer equipped as a law office with a lawyer and a secretary, a little reception area, a library. They will go from one location to another, bringing ju~tice to the poor. No matter what the basic type of program involved, they have cer- tain common characteristics-all of them involve poor on the decision- making board-the one that sets the basic policy for the program. In fact, on the average there is 35 percent representation of the poor on the boards of legal services programs. Another common characteristic is that these programs do not take cases from which a lawyer could earn a fee. For instance, they would not take the case of someone-no matter how poor he was-if it was a fee-generating case, say, a personal injury case that any lawyer would be willing to take on a contingent-fee basis. Another common characteristic is that they take all or nearly all types of civil cases. And fourth, that they take steps to insure that the attorney-client relationship will be maintained throughout. We have received recently reports from our operating projects as to how things are going in the field, and I guess one could say they are going almost too well, in terms of volume. In the last 6 months of calendar 1966 our projects handled 92,000 families in legal difficulty. In the first 3 months of calendar 1967 they handled 93,000 families with legal difficulties. In other words, they handled more in the last 3 months than in the prior 6 months. The lawyers now are, on the average, handling 500 new cases per year. They are at an annual rate of 500 new cases per year, which is up from an annual rate of 300 new cases per year just 3 months ago. So the great need that the American Bar Foundation said existed is being proven by the experience of the projects. This is of some concern to us, because most experts in the field feel that 500 cases per year is the absolute maximum that can be handled with any kind of quality service by an individual lawyer. The types of cases that. have been handled? In the 3-month period end ing March 31, 1967, roughly 34 percent of the cases fell in the PAGENO="0076" 914 ECONOMIC OPPORTUNITY ACT AMENDMENTS OP 1967 general area of family law-this includes adoptions, paternity suits, and various domestic relations difficulties. The total is 15 percent for divorce out of that 34 percent-iS percent for divorce or annulment, but interestingly enough, only 2 percent ac- tually resulted in divorces being obtained. This indicates that the projects have been resolving through other means, reconciliation, and so forth, most of the domestic relations cases that have come to them. Almost 20 percent of the cases involve consumer problems-difficul- ties with credit companies or with sellers. Roughly 8 percent fell in the field of housing. Most of these were landlord-tenant cases. Approximately 7 percent fell in the administrative area. Most of these were welfare cases. And 33 percent fell in the area of juveniles, misdemeanor cases, and various other miscellaneous matters. To give you an idea of what kind of work the lawyers are doing on these problems, about 35 percent of the cases that came in required ad- vice only. Now, this may mean just one visit and 10 minutes' worth of advice. It may mean many prolonged visits and several hours of re- search prior to giving the advice. About 25 percent involved some drafting of documents, some prep- aration and some representation of the person outside of a courtroom, and almost 25 percent of the cases involve representation in litigation, either litigation before courts or litigation before administrative agencies. And about 11 percent of the cases were people who were in- eligible for the service because it was a fee-generating case or because they were making too much money and they were referred to private attorneys. The results have been quite good thus far. Over the 9-month period covered by the report the legal services attorneys have averted or stayed evictions in 80 percent of the eviction cases that have come to their attention. They have won over 77 percent of the administrative cases-this is cases involving an administrative agency on the other side. They haYe won almost three-quarters of the trials they have par- ticipated in; and 60 percent of the appeals. They have thus far been engaged in 16,000 trials around the country. Now, you will probably ask, how much is this service costing? We have done an analysis of the salaries being paid and the cost per case and I think it's very revealing. The attorneys in our programs are making anywhere from $6,000 to $15,000 a year. The average salary is $9,500 per year. Project di- rectors-that is, the directors of these programs, and the average pro- gram is about seven attorneys in size so this is an attorney supervising seven attorneys-are earning anywhere from $10,000 to $20,000 a year, and the average is $14,300. It is calculated that it costs approximately $21,000 for every attor- ney that we have in the field. This is his salary, his secretary's salary, investigator's salaries, paper, transportation, everything, is costing us about $21,000 per attorney. It works out to $48.39 per case handled. %~\Te did a comparison of this with what it would have cost to ren- der this service if private attorneys had been offering it at the mini- mum bar fee schedule and in every case charging only the minimum bar fee schedule. It worked out to $101.73 per case. PAGENO="0077" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 915 We also compared it with an experimental program we have found- ed in rural Wisconsin called Judicare, in which private counsel are compensated for the cases that they handle for the poor rather than having staff attorneys handle them. Under that plan it works out to an average of $139.01 per case, almost three times what it is costing us,. on a national average, with staff attorneys. Behind the statistics, of course, there are some stories that have come to us that I think really tell what legal services is all about. In rural California, a migrant camp was located near a city. The migrants came to our California rural assistance program and com- plained that their water was impure; contaminated. They also com- plained that their water bills seemed much higher than residents of the city. Some investigation turned up the fact that, No. 1, they were being charged more. This was primarily because the city was contracting with a private water company rather than rendering the service out of the public utility there. It also turned out that the water was con- taminated. Chemists analyzed it and found it was impure. California Rural Legal Assistance, our project there, filed suit be- fore the Public Utilities Commission in California and after prolonged negotiations the CRLA attorneys were able to get a settlement with the water company on behalf of several hundred migrants. No. 1, they purified the water, and No.2, they refunded almost $4,000 in past water payments, admitting that they had been overcharging. Another good example comes from New York City out of our project there represented a young man who was being expelled from school and established for the first time in New York City the right of a juvenile to have a hearing before he is suspended from school and before he becomes, in effect, a force dropout. In today's paper it is reported that our Hartford, Conn., program won a landmark case before a three-judge Federal court in which that three-judge Federal court held that the very common State law re~ quiring a year's residence before you are eligible for welfare is uncon- stitutional. Chairman PERKINS. Let me ask you a question at this point in the view of saving time. Do you have a breakdown of the type of cases that your neighbor- hood legal service has rendered to the poor throughout the country? Mr. JOHNSON. Yes, I had given a partial breakdown. As I indicated, roughly 34 percent of the cases have been in the general area of family law, and as a subdivision of that, 15 percent of the cases have involved people who were seeking divorce or annulment. Roughly 20 percent have involved consumer problems; roughly 8 percent have involved' housing problems; roughly 7 percent administrative problems with most of those being in the welfare area; and roughly 33 percent have involved juvenile problems, misdemeanor problems, and other miscel- laneous problems. Mr. GIBBONS. Let me ask a question, if I may, Mr. Chairman. Could you talk a little more about this welfare case? Did that involve the problems of these welfare programs under our Social Security Act, or was it the local welfare matter? Mr. JoHNsoN. This was aid to dependent children. And it was a case in Hartford, Conn. It was a three-judge Federal court ruling on the PAGENO="0078" 916 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 constitutionality of the State law which imposes a. year, a full 1-year residence requirement prior to being eligible for welfare. Mr. GIBBONS. When was that decision? Mr. JOHNSON. I guess it was yesterday. It was reported in this morn- ings Times. Mr. DENT. Will the gentleman yield ? Mr. GIBBONS. I will be glad to.~ Mr. DENT. Is that State funds or strictly Federal contributions? Did they rule that the State itself could .not establish guidelines on resi- dency or only upon tha.t part of the funds that were contributed by the Federal Government? Mr. JoHNsON. I have not read the full decision. All I have is the newspaper report and the newspaper report is not complete on that point. Mr. GIBBONS. That is going to have almost as much effect among States and States' problems as the juvenile delinquency decision the other day. Mr. JOHNSON. That's right. Mr. GIBBONS. It is going to involve a great change in State attitude. I wonder if we could put that news article in the record at this point. Chairman PERKINS. Without objection it is so ordered. (~ewspaper article follows:) {From the New York Times, June 20, 1967] CONNECTICUT WELFARE LAw HELD IJNCONSTITUTIONAL-ONE-YEAR RESIDENCY STATUTE OvERTURNED iN 13.5. C0URT-39 OTHER STATES AFFECTED (Special to the New York Times) HARTFORD, June 19.-A Federal court ruled today that a one-year residency requirement for payments under Connecticut's aid to dependent children law is unconstitutional. The majority opinion of the three-judge panel said the law was tinconstitu- tional because the requirement violated the right of interstate travel. The case arose after the Connecticut Welfare Commissioner, Bernard Shapiro, denied benefits to Vivian Marie Thompson last Nov. 1 because she bad not lived in this state far a year. Miss Thompson has two children. She had been receiving assistance in Massachusetts before moving here about a year ago. PURPOSE OF AID CITED In its 2-i decision, the court said "the intent of the law was to exclude from benefits those who came into the state for the primary purpose of seeking wel- fare assistance and it should be so construed and interpreted." The minority opinion was written by Judge T. Emmett Clarie. The majority opinion, written by Judges N. Joseph Blumenfeld and J. Joseph Smith said "the right of interstate travel also encompasses the right to be free of discouragement of interstate movement. Denying . . . even a gratuitous bene- fit because of her exercise of her constitutional right effectively impedes the exercise of that right," the majority opinion said. Judge Clarie, in his dissent, said that 40 states, including Connecticut, have one-year residency requirements in their welfare laws. $1-MILLION IN An) INVOLVED Francis McGregor, counsel for the State Welfare Department in the Thomp- son case, said be had not yet received a copy of the court's decision, but he believed that the welfare laws of the other 39 states would probably be affected by the decision. Ten states, including New York, New Jersey and Rhode Island, do not have residence requirements in their welfare laws, Mr. McGregor said. PAGENO="0079" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 917 Mr. McGregor, who is an assistant state attorney general, said that during the course of the trial Commissioner Shapiro testified that more than ~1-mil1ion in welfare funds in Connecticut would be affected by the court's decision. He said "it is possible" the state may appeal the ease to the United States Supreme Court. The welfare commissioner Shapiro is on vacation. The majority opinion held that "Connecticut states quite frankly" that the purpose of the law is to protect it from "those who come needing relief." Brian Hollander, Miss Thompson's lawyer, said that under the decision "no state would have a residence law in the area of welfare." Mr. GIBBONS. I wonder if you could give us a copy of that court opinion and we could put it in the record. Mr. JOHNSON. I will obtain it as soon as possible. (The court opinion referred to follows:) UNITED STATES DIsTRIcT COURT DISTRICT OF CONNECTICUT (Civil No. 11,821) MEMORANDUM OF DECISION VIVIAN MARIE THOMPSON v. BERNARD SHAPIRO, COMMISSIONER OF WELFARE OF THE STATE OF CONNECTICUT Before: Smith, Circuit Judge, Blumenfeld and Clarie, District Judges. SMiTH, Circuit Judge: This action was brought in the United States District Court for the District of Connecticut under Title 28 U.S. Code, §~2281 and 2284, seeking a declaration that Chapter 299, §17-2d of the Connecticut General Statutes is unlawful as in violation of the Constitution of the United States and seeking an injunction against its enforcement and payment of monies unconstitutionally withheld. A three-judge district court was convened pursuant to the statute, hearings were held, briefs were filed and arguments were made. Notification of pendency of the action was given to the United States because of possible effect on federal statutes, and the Solicitor General notified the court of his decision that the United States would not intervene in the case.' The court has considered the stipulations of facts, the testimony taken, the briefs and arguments of the par- ties, and finds the issues in favor of the plaintiff. In June of 1966 Vivian Marie Thompson, the plaintiff in this action, and a citizen of the United States, moved from Boston, Massachusetts, to Hartford, Connecticut. Plaintiff's purpose in moving was to live near her mother. Then the mother of one and now the mother of two, plaintiff had been receiving Aid to Dependent Children (ADC) from the City of Boston. Boston discontinued this aid in September because of plaintiff's change of residence. When she applied for similar assistance to Bernard Shapiro, Commissioner of Welfare of the State of Connecticut and the defendant in this proceeding, he denied ADO to her on No- vember 1 because plaintiff, although she was otherwise eligible, had not met the one year residence requirement of Conn. Gen. Stat. § 17-2d which provides as follows: "When any person comes into this state without visible means of support for the immediate future and applies for aid to dependent children under chapter 301 or general assistance under part I of chapter 308 within one year from his arrival, such person shall be eligible only for temporary aid or care until ar- rangements are made for his return, provided ineligibility for aid to dependent children shall not continue beyond the maximum federal residence requirements." As can be seen, it was to insure continuation of the state's right to receive the substantial payments which the federal government pays to the state for federally `The state moved to have the court apply the doctrine of equitable abstention. The court, however, declined to exercise Its discretionary equity powers because, "the state statute In question . . Is not fairly subject to an interpretation which will render unnecessary or substantially modify the federal constitutional question . . ." Herman v. Forssenias, 380 U.S. 528, 534-35 (1965). PAGENO="0080" 918 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 approved plans of state aid to needy families with children that §1T-2d is keyed to the federal limitation on residence requirements. At the present time, the Social Security Act, 49 Stat. 627 (1935), as amended, 42 U.S.C. §602(b) (1959), limits the length of the period of prior residence which a state can require as a conthtion of eligibility to one year in order to obtain such approval. Thus ADO programs are financed jointly by the state and federal governments and generally the responsibility is shared approximately equally. Some states, like Connecticut, impose the maximum residence requirement allowed by §602(b) ; others require a shorter period of residence, or none at all. The Catholic Family Services of Hartford have been supporting plaintiff pending the outcome of this action; these private payments, however, are below Connecticut's ADO level. See, Har- vith, The Constitutionality of Residence Tests for General and Categorical Assist- ance Programs, 54 Calif. L. Rev. 567, 569 n.28 (1966) which cites as its au- thority, NATIONAL TRAVELERS AID ASS'N, ONE MANNER OF LAW-A HANDBOOK ON RESIDENCE REQUIREMENTS IN PUBLIC ASSISTANCE 8-13( 1961). The Welfare Department of the State of Connecticut has promulgated regu- lations which construe in the following manner the words "without visible means of support for the immediate future" contained in § 1T-2d: 1. Persons or families who arrive in Connecticut without specific em- ployment. 2. Those arriving without regular income or resources sufficient to enable the family to be self-supporting in accordance with Standards of Public Assistance. 3. "Immediate future" means within three months after arriving in Con- necticut. Noru.-Support from relatives or friends, or from a public, private, or voluntary agency for three months after arrival will not satisfy the require- ments of the law, which relates to self-support rather than to dependency. Connecticut Welfare Manual, Vol. 1, Oh. II, § 219.1. In accord with the above, the regulations further provide: 1. If the application for assistance is filed within one year after arrival in Connecticut, the applicant must establish that he was self-suppOrting upon arrival and for the succeeding three months thereafter; or 2. If the application for assistance is filed within one year after arrival in Connecticut, the applicant must clearly establish that he came to Con- necticut with a bona fide job offer; or 3. If the application for assistance is filed within one year after arrival in Connecticut, the applicant must establish that he sought employment and bad sufficient resources to sustain his family for the period during which a person with his skill would normally be without employment while ac- tively seeking work. Personal resources to sustain his family for a period of three months is considered sufficient. Those who come to Connecticut for seasonal employment such as work in tobacco or short term farming are not deemed to have moved with the intent of establishing residence in Con- necticut. Connecticut Welfare Manual, Vol. 1, Ch. II, §219.2. Thus, Connecticut withholds ADO for one year to newly-arrived residents unless they come to Connecticut with substantial employment prospects or a certain cash stake. Plaintiff came to Connecticut with neither the prospect of employment nor the necessary cash stake. It is her contention in this action that Connecticut's denial of ADO results In an unlawful discrimination violative of her constitu- tional rights under the equal protection and privileges and immunities clauses of the Fourteeth Amendment and the privileges and immunities clause of Art. IV. §2. Plaintiff contends that Connecticut discriminates against her in favor of three classes of persons: newly-arrived residents with employment, newly-ar- rived residents with a stake and residents of one year's duration. At the outset, it will be helpful to highlight what is at issue here by exclud- ing what is not. Plaintiff does not argue that Connecticut cannot deny ADO to non-residents. Since plaintiff is a citizen of Connecticut, her reliance on the privileges and immunities clause of Art. IV. §2 is misplaced; that clause only outlaws discrimination by one state against citizens of another state. New York v. O'Neill, 359 U.S. 1, 6 (1959). We have no question of the state's power under the Tenth Amendment to provide for relief to the indigent, whether by state agencies, town agencies or otherwise. Nor is any claim made here of a PAGENO="0081" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1 9 6 7 919 local, state, or federal constitutional duty to provide aid at all, or any kind or amount of aid. What we do have is a claim that a state may not discriminate by arbitrarily classifying those who shall and those who shall not be provided with aid, because such discrimination violates rights guaranteed by the first sec- tion of the Fourteenth Amendment to the Constitution of the United States. "SECTIoN 1. All persons born or naturalized in the United States, and sub- ject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws." Plaintiff's argument based on privileges and immunities is premised primarily on the right of interstate travel. That right, so the argument goes, is abridged by Connecticut's practice of denying ADO to those in plaintiff's situation be- cause it chills their mobility. The existence, source and dimensions of the right to travel have been the subject of much constitutional debate. In Edwards v. California, 314 U.S. 160 (1941), the Court struck down a California statute which made it a misdemeanor to bring an indigent non-resident into the state. The rationale of the majority was that the statute violated the Commerce Clause.~ Mr. Justice Jackson, concurring, would have held that the statute abridged the state citizenship and privilege and immunities clauses of the Fourteenth Amend- ment. 314 U.S. at 181-86. Mr. Justice Douglas, joined by Justices Black and Murphy, would also have rested on the privileges and immunities clause. 314 U.S. at 177-81. In the passport cases, which deal with the right of foreign travel, the Court relied on Fifth Amendment notions of liberty. Zeimel v. Rusk, 381 U.S. 1, 14 (1965); Aptheker v. Secretary of State, 378 U.S. 500, 505-06 (1964); Kent v. Dulles, 357 U.S. 116, 126-27 (1958). Finally, in United States v. Guest, 383 U.S. 745, 759 (1966), the Court ruled that, "Although there have been re- curring differences in emphasis within the Court as to the source of the consti- tutional right of interstate travel, there is no need here to canvass those differ- ences further. All have agreed that the right exists." The Court thereby quieted any doubts that might have remained about the existence of the constitutional right of interstate travel but left unanswered questions regarding its source and dimensions. The defendant contends that the plaintiff is not deprived of the right to travel and to settle in Connecticut since she may do so freely so long as she does not seek welfare benefits until after she has resided here for a year. Whether or not the state citizenship clause and the privileges and immunities clause2 are the as yet unnamed source of the right of interstate travel, Mr. Justice Jackson's concurrence in Edwards, which as mentioned above was based on those clauses, delineates in timeless language the dimensions of the right. it is a privilege of citizenship of the United States, protected from state abridgment, to enter any state of the Union, either for temporary sojourn or for the establishment of permanent residence therein and for gaining resultant citizenship thereof. If national citizenship means less than this, it means nothing. 2 To abridge the privileges and immunities clause of the Fourteenth Amendment, the challenged state action must contravene a right inherent in national, as opposed to state, citizenship. Adamson v. California, 332 U.S. 46. 52-53 (1947). The Supreme Court has seldom defined a right of national citizenship. See, Colgate v. Harvey, 296 U.S. 404, 436 (1935) (Stone. 3., dissenting) overruled Madden v. Kentucky, 309 U.S. 83 (1940) ; Hague v. CIO, 307 U.S. 496, 520-21 n.1 (1939) (Stone, 3., concurring). According to Mr. Justice Douglas, "judicial reluctance to expand the content of national citizenship . . . has been due to a fear of creating constitutional refuges for a host of rights historically subject to regulation." Bell v. Maryland, 378 U.S. 226, 242, 250 (1964) (Douglas, J., concurring). Nevertheless, there is continuous and abundant judicial recognition that the privileges and immunities clause means something. See the cases cited supra in this footnote and, e.g., United ~8tates v. Guest, 383 U.S. 745. 762, 764-67 (1966) (Harlan, P. concurring and dissenting) ; New York v. O'Neill, 359 U.S. 1, 12, 13 (1959) (Douglas, 3., dissenting). See also, Oyama V. California, 332 U.S. 633, 640 (1948) which speaks of "privileges as an American citizen". An en bane decision of the Court of Appeals for the Second Circuit. ~9panos v. Skouras Theatres Corp., 364 F. 2d 161, 170 (2d Cir.), cert. denied, 385 U.S. 987 (1966), stated among other reasons for its decision, that "under the privileges and immu- nities clause of the Constitution no state can prohibit a citizen with a federal claim or defense from engaging an out-of-state lawyer to collaborate with an in-state lawyer and give legal advice concerning it within the state." As quoted in the text, in/re, "If national citizenship means less than" the right "to enter any State of the Union, either for tempo- rary sojourn or for the establishment of permanent residence therein and for gaining resultant citizenship thereof . . . it means nothing." Edwards v. California, 314 U.S. 160, 181, 183 (1941) (Jackson, 3., concurring). 80-084-67-pt. 2-6 PAGENO="0082" 920 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 `State citizenship is ephemeral. It results only from residence and is gained or lost therewith. That choice of residence was subject to local approval is contrary to the inescapable implications of the westward movement of our civilization. 314 U.S. at 183. "Any measure which would divide our citizenry on the basis of property into one class free to move from state to state and another class that is poverty-bound to the place where it has suffered misfortune is not only at war with the habit and custom by which our country has expanded, but is also a short-sighted blow at the security of property itself. Property can have no more dangerous, even if unwitting, enemy than one who would make its possession a pretext for unequal or exclusive civil rights. Where those rights are derived from national citizenship no state may impose such a test, and whether the Congress could do so we are not called upon to inquire." 314 U.S. at 185. In short, the right of interstate travel embodies not only the right to pass through a state but also the right to establish residence therein. While prior "right to travel cases" have been concerned with absolute pro- scriptions on movement, Guest may be read as proscribing the discouragement of interstate travel. The Court there upheld a paragraph of an indictment based on IS U.S.C. § 241 which outlaws conspiracy to interfere with rights or privileges secured by the Constitution. The paragraph charged interference with, "The right of travel freely to and from the State of Georgia and to use highway facilities and other instrumentalities of interstate commerce within the State of Georgia." 383 U.S. at 757. The Court went on to say that, "if the predominant purpose of the conspiracy is to impede or prevent the exercise of the right of in- terstate travel, or to oppress a person because of his exercise of that right, then, whether or not motivated by racial discrimination, the conspiracy becomes a proper object of the federal law under which the indictment in this case was brought." 383 U.S. at 760. By employing the words "impede" and "oppress", the Court must have contemplated that the discouragement of interstate travel is also forbidden. Further support for the proposition that the right of interstate travel also encompasses the right to be free of discouragement of interstate movement may be found by analogy to cases proscribing actions which have a chilling effect on First Amendment rights. See Dombroslri v. Pfister, 380 U.S. 479, 487 (1965); Wolff v. ~eiective service Local Board 1%To. 16, 372 F. 2d 817 (2d Cir. 1967). Finally, it should be underscored that the statute invalidated in Edwards penalized the sponsor of the indigent, not the indigent himself. In short, whatever its source, the right to travel exists and included within its di- niensions is the right to establish residence in Connecticut. Denying to the plain- tiff even a gratuitous benefit because of her exercise of her constitutional right effectively impedes the exercise of that right. See Sherbert v. Verner, 374 U.S. 398, 405-06 (1963). Because Conn. Gen. Stat. § 17-2d has a chilling effect on the right to travel, it is unconstitutional. Not only does § 17-2d abridge the right to travel and its concomitant right to establish residence, but it also denies plaintiff the equal protection of the laws. "Judicial inquiry under the Equal Protection Clause . . . does not end with a showing of equal application among the members of the class defined by the legislation. The courts must reach and determine the question whether the classi- fications drawn in a statute are reasonable in light of its purpose . . ." Mc- Lavghlin v. Florida, 379 U.S. 184, 191 (1964). Connecticut states quite frankly that the purpose of § 17-2d is to protect its fisc by discouraging entry of those who come needing relief.3 The state has not shown that any significant number come for that purpose, and the evidence indicates that most of the class dis- criminated against come for other purposes, such as, hope of employment, to be with relatives in time of need, as in the case of plaintiff, or to resume residence in Connecticut after a period of absence. Even a classification denying aid to those whose sole or principal purpose in entry is to seek aid, however, would The legislative history further demonstrates that this Is the purpose of § 17-2d. For example. Mr. Cohen, while recognizing that only a small proportion of new arrivals come to Connecticut to seek welfare, made the following argument in favor of § 17-25: "If we pass this Bill, the word could get around that we are not an easy state, and the rate of influx might relate more closely to the level of job opportunity. As responsible legis- lators we must, at some point, be interested in costs. I doubt that Connecticut can, or sho~ld. continue to allow unlimited migration into the State, on the basis of offering instant money anil permanent income to all who can make their way to the State. regardless of their ability to contribute to the economy." Connecticut General Assembly 1965. House of Representatives Proceedings, Vol. II Part 7, pp. 194-95 (Connecticut State Library). PAGENO="0083" E~CONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 921 not be sustainable. Anyway, the classification made here, based not on purpose in coming but solely on indigency, hits most heavily those with not even an argu- ably bad purpose in coming and may not be upheld. As detailed above, the purpose of § 17-2d, to discourage entry by those who come needing relief, abridges the right to travel and to establish residence. A similar purpose was behind the statute invalidated in Edwards. California in Edwards, like Connecticut here, tried to justify its statute under the police power.3~ Here, as there, the burden on the state treasury4 does not justify an enact- ment with an invalid purpose. The policy behind the equal protection clause has long been interpreted as that of preventing states from discriminating against particular classes of persons. E.g., Yick Wo v. Hopkins, 118 U.S. 356 (1886). Even if the purpose of :~ IT-2d were valid, which it is not, the classifications established by the statute and the regulations promulgated thereunder are not "reasonable in light of its purpose." Admittedly, the classifications are not drawn on the presumptively suspect lines of race, creed or color. Nor, at the time application for aid is made, can it be said that they are based on poverty; for, at that time, all bona fide applicants are indigent. Furthemore, no inquiry is made into the assets at any past point in time of those applicants who enter with a job or those who have one year's residence. But there is a classification based on wealth between those who enter with a cash stake and those like plaintiff who do not. This clas- sification is invalid because there is no showing that in the long run the applicant with the cash would be a lesser drain on the state treasury. Similarly, even though they are not based on wealth, the classifications of one year's residence or a job are not reasonable in light of the purpose of § 17-2d because again there is no showing that those applicants will be lesser burdens than applicants with- out jobs or one year's residence. Section 17-2d, in brief, violates the equal pro- tection clause because even if its purpose were valid, which it is clearly not, the classifications are unreasonable. Granted, the state may provide assistance in a limited form with restrictions, so long as the restrictions are not arbitrary; but, in any case where the govern- ment confers advantages on some, it must justify its denial to others by reference ~to a constitutionally recognized reason. See ~S~herbert v. Verner, supra; Speiser v. Ran~dail, 357 U.S. 513 (1958). In Uarrington v. Rash, 380 U.S. 89, 96 (1965), while striking down a Texas law which prevented servicemen from voting, the Court was careful to emphasize that, "Texas is free to take reasonable and ade- quate steps . . . to see that all applicants for the vote actually fulfill the require- merit of bona fide residence." For example, if there were here a time limit applied equally to all, for the purpose of prevention of fraud, investigation of indigency or other reasonable administrative need, it would undoubtedly be valid. Connec- ticut's Commissioner of Welfare frankly testified that no residence requirement is needed for any of these purposes. Judgment may enter in favor of the plaintiff declaring the residence re- quirement of § 17-2d of the Connecticut General Statutes invalid as applied to plaintiff, awarding plaintiff moneys unconstitutionally withheld,5 and enjoining defendant from denying plaintiff Aid to Dependent Children solely ~a "Their coming here has alarmingly increased our taxes and the costs of welfare out- lays, old age pensions, and the care of the criminal, the Indigent sick, the blind and the insane. "Should the States that have so long tolerated, and even fostered, the social conditions that have reduced these people to their state of poverty and wretchedness, be able to get rid of them by low relief and insignificant welfare allowances and drive them into Cali- fornia to become our public charges, upon our immeasurably higher standard of social services? Naturally, when these people can live on relief in California better than they can by working in Mississippi, Arkansas, Texas or Oklahoma~ they will continue to come to this State." 314 U.S. at 168. ~ Incidentally, a small part of Connecticut's ADC budget Is involved and the burden on the state treasury is not overwhelming. Connecticut estimates that the Indigent who would come In should plaintiff prevail would cost another 2% in ADC, that is, some $2,000,000 annually. Approximately half of this sum, of course, would be paid by federal appropriation through Congressional recognition of the national nature of the problem. That a state cannot be sued without its consent, Monaco v. Mississippi, 292 U.S. 313 (1934), is no barrier to awarding money damages here; for, in Er parte Young, 200 U.S. 123 (1908), the Court held that the Eleventh Amendment did not prevent a suit against a state official who was acting unconstitutionally. Consequently, this court can order Com- missioner Shapiro to tender moneys which he unconstitutionally withheld. See, Department of Employment v. United States, 385 U.S. 3155, 358 (1966) where the Court ordered refund of taxes unconstitutionally paid. See also, Slierbert V. Verner, 374 11.8. 398 (1963) (unem- ployment benefits). PAGENO="0084" 922 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 because of her failure to meet the one-year residence requirement. Form of de- cree, including computation of amount of damages due, may be submitted by counsel for plaintiff on notice to counsel for defendant. The above shall serve as the Findings of Fact and Conclusions of Law re- quired by Fed. H. Civ. P. 52(a). Dated at Hartford, Connecticut, this 19th day of June, 1967. J. JOSEPH SMITH, United States Circuit Judge. M. JOSEPH BLTJMENFELD, United States Circuit Judge. I dissent, with opinion. T. EMMET Cr~simi, United States Circuit Judge~ CJLARIE, District Judge, dissenting: I respectfully dissent and disagree with the majority opinion that §17-2d of the Connecticut General Statutes is unconstitutionaL The residence time qualifi- cation for welfare eligibility of non-residents coming into the State, as contained in the law, is a reasonable one directly related to the problem sought to be gov- erned. It is a valid legislative classification, which the State has the discretion and authority to enact. It is not within the province of the judiciary to determine whether the remedy chosen is a wise one, but only whether it is constitutional. Railway Ecspress v. New York, 336 U.S. 106, 109 (1949); Daniel v. Family Ins. Co., 336 U.S. 220, 224-25 (1949) ; Olsen v. Nebraska, 313 U.S. 236, 246-7 (1941). Forty other states of the United States, including Connecticut, have estab- lished a one-year residence requirement, as a condition of eligibility to quaIify~ f or aid to families with dependent children.1 Congress itself has sanctioned~ the laws of these forty states, by enacting 42 IJ.S.O.A. § 602(b), which provides: for a federal contribution to state administered programs, where the condition. of eligibility does not exceed a one-year prior residence. As a practical matter~ most states require a residence eligibility requirement or waiting period for~ all forms of welfare benefits.2 The majority opinion concedes that the purpose of § 17-2d is to protect the state's fiscal responsibilities by discouraging entry of those who come into the state seeking relief.3 It goes even further and asserts that a classification deny- ing aid to those whose sole or principal purpose in entering the state to seek aid would be unconstitutional. The principal basis for the majority position is that the law abridges the right of freedom to travel and to establish residence;- and that because such a statute as § 17-2d has a chilling effect on the right ta travel, it is therefore unconstitutional. The landmark case cited to support this. position is Edwards v. California, 314 U.S. 160 (1941). The latter case can be distinguished from the issue being litigated here. It involved a state statute, which made it a crime to transport across the state line into California, one who was an indigent. This statute was ruled unconstitu-. tional by the United States Supreme Court, because it not only restricted com- merce between the several states, but it also actually limited the right of citizens. to travel freely between the several states. On the contrary. the statute which is now in issue, does not prohibit travel between the states as such. What it does. do and is intended to do, is to deter those who would enter the state for the. primary or sole purpose of receiving welfare relief allotments. Connecticut is comparatively generous in welfare grants. The legislatnre provides an open-end budget in its biennial appropriations to the State Welfare- Department,4 so that no qualified applicant may be denied aid or caused per- sonal hardship by delay or the arbitrary limitation of budgetary appropriations.. 1 (a) Stioulation of the Parties, Pam. Cl. (b) States whIch do not have any waiting period are Alaska, Georgia, Hawaii, Ken-. tucky, Maine, North Dakota, South Dakota. New York, Rhode Island. and Vermont. Pocket Data Book USA., 1967, U.S. Dept. of Commerce, Statistical Reports DivisIon, 1db. Cong. Card No. A66-7638. 2 Some thirty-five (35) states require that an applicant must have resided within the- state five of the preceding nine years, including the immediate past year to be eligible.. to receive old age, deaf and blind benefits. Five (5) other states require simply a one- year residence to receive these benefits. See, Characteristics of State Public Assistance- Plans Under the Social Security Act, U.S. Gov. Print. Off. (1965). Also. sees 42 U.S.C.A. §~ 1202. 1352. Supra, note 1(b) at 182. `CONN. GEN. STAT. (Rev. 1958) ~ 4-95. PAGENO="0085" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 923 Connecticut ranks fourth among all the states, with monthly payments of $197.00 (46% contributed by the federal government) for a family of four, compared with the national average of $148.00. An extreme comparison is had by compar- lug the average monthly payments for a similar family unit in Mississippi of $33.00; in Alabama, $48.00; in Florida, $60.00, and in South Carolina, $64.00. In those latter states, the federal government contributes 83%, the state 17%.~ Thus by way of illustration and comparison, the State of Connecticut's monthly con- tribution is $109.00 compared with that of Mississippi's of $5.50. It should be noted that §17-2c1 applies both to the general assistance allotments under §17- 273, Part I, Chapter 308, for which no federal contribution is provided, as well as to Chapter 301, aid to dependent children. Uncontrolled demands upon Con- necticut's welfare program could effect an overall reduction of aid paid to eligi- Ne beneficiaries. It is a proper function of the legislature to enact such reason- able statutory controls, under the police powers reserved to the state in the Federal Constitution,6 that its obligations to aid the needy of the state may continue to be generously fulfilled. Missouri, Kansas c~ Te~eas Railway v. Haber, 169 U.S. 613, 629 (1898). The United States Supreme Court recognized the problem when it upheld the constitutionality of the Federal Social Security Act: "A system of old age pensions has special dangers of its own, if put in force in one state and rejected in another. The existence of such a system is a bait to the needy and dependent elsewhere, encouraging them to migrate and seek a haven of repose. - . ." Helvering v. Davis, 301 U.S. 619, 644 (1937). Connecticut has always freely exercised its sovereign right as a state, to legis- late and administer controls governing a myriad of comparable state services. A needy student, to be eligible for a scholarship loan, must have resided within the state for the twelve (12) months previous to his application ;7 to receive aid to send a blind child for instructions, both the child and one of his parents or guardians must have resided within the state for one (1) year preceding the application.8 To be an elector, one must have resided within the state for six months.9 To be eligible to hold a liquor permit one must first be an elector.10 With certain specified exceptions, a one year's residence is a prerequisite to applying for employment in the state merit system.11 A plaintiff in a divorce action must have resided in the state continuously for three (3) years prior to bringing an action, unless the cause arose subsequent to residence within the state.12 The cap- tains and members of the crew of oyster boats, in order to be licensed must have a one-year residence,13 as well as those who would take scallops from state waters ;14 and so on ad infinitum. Are these residence requirements established through several generations of orderly state growth, now to be struck down as constituting a constitutionally unlawful discrimination between the citizens who have just moved into the state and those who meet these reasonable statutory requisites? Such a decree by judicial fiat would go far toward completing the annihilation of the police powers, which were reserved to the several states and to the people under the tenth amendment to the Federal Constitution. It is not within the province of this Court to pass upon the state legislature's wisdom in causing the enactment of this law, but whether or not the law violates the constitutionally guaranteed rights of its citizens. As Mr. Justice Frankfurter said in Board of Education v. Barnette, 319 U.S. 624, 647 (1942) "It can never be emphasized too much that one's own opinion about the wis- dom or evil of a law should be excluded altogether when one is doing one's duty on the bench. The only opinion of our own even looking in that direction that is material is our opinion whether legislators could in reason have enacted such a law." An historical review of the legislative act which preceded § 17-2d illuminates and discloses the true purpose of this law. § 1, Public Act No. 501, 1963 Con- necticu:t General Assembly provided: 5 Stipulation of Parties, Para. 58, 59. 6 Art. X, Amendment to the Constitution of the United States. 7Conn. Gen. Stat. (Rev. 1958) § 10-116(c). `Conn. Gen. Stat. (Rev. 1958) § 10-295(b). Conn. Gen. Stat. (Rev. 1958) 9-12. ~° Conn. Gen. Stat. (Rev. 1958) 30-4S(3). 11 Conn. Gen. Stat. (Rev. 1958) § 5-39. 12Conn. Gen. Stat. (Rev. 1958) § 46-15. 13 Conn. Gen. Stat. (Rec. 1958) § 26-212. 14 Conn. Gen. Stat. (Rev. 1958) § 26-288. PAGENO="0086" 924 ECONOMIC `OPPORTUNITY ACT AMENDMENTS OF 1967 "When any person comes into this state without visible means of support for- the immediate future and applies for aid to dependent children under chapter 301 or general assistance under part I of chapter 308 of the general statutes within one month from his arrival, the welfare commissioner shall determine whether such person's remaining will serve the best interests of (a) the state, (b) the town to which the person has come and (c) such person. In making his determination,~ the commissioner shall consider (a) the circumstances involved in such person's coming to this state, (b) his situation now that he is here, (c) the circumstances involved if he remains, (d) whether he comes to this state able and willing to support himself or whether he came for the purpose of seeking welfare assistance and (e) whether he will need such assistance indefinitely." The 1965 Session then amended the law, § 17-2d, so as to change the phrase "one month from arrival" to "one year from arrival"; it eliminated the stat- utory restrictive standards for the guidance of the Commissioner's administra- tion of the act, and adopted the maximum federal residence requirement. 42 U.S.C.A. § 602b. The intent of the law was to exclude those from benefits, who came into the state for the primary purpose of seeking welfare assistance and it should be so construed and interpreted. It has always been a principle of con- stitutional interpretation that the Courts, if at all possible, should construe a. statute so as to bring it within the Constitution. Michaelson v. United States, 266 U.S. 42 (1924); United States v. Delaware c~ `Hudson Go., 213 U.S. 366 (1909). The Public Welfare Committee of the 1967 Legislature, just adjourned, con- sidered this residence issue in Substitute for Senate Bill No. 166; the bill was, defeated by recommitment to committee. The legislature so exercised its sovereign police power to classify equally all non-residents who came into Connecticut, who applied for welfare aid within a stated time period. The law affected all persons similarly situated in the class' described: "Class legislation, discrimination against some and favoring others, is pro- hibited, but legislation which, in carrying out a public purpose, is limited in its application, if within the sphere of its operation it affects alike all persons sim- ilarly situated, is not within the amendment." Barbier v. Gonnolly, 113 U.S. 27, 32 (1885). Without such a statutory deterrent, this state would be powerless to prevent its becoming a refuge for welfare recipients of other states; even those who' might be encouraged or even assisted to migrate from their settlement of origin. "Freedom of residence is restricted as to citizens only while on relief. No interference is had with the right of any citizen to choose and establish a home. What is controlled is the unrestricted imposition of indigent persons and families without settlement upon a community and State where they cannot es- tablish a home because of their indigent status. . . . Such conditions restrict individual rights and freedom in the interest of the right, security and freedom of the rest of the community of the State." Matter of Ultirillo, 283 N.Y. 417, 28 N.E. 2d 595 (dissenting opinion). I further dissent from the award of money damages to the plaintiff by the majority for the past aid alleged to have been unconstitutionally withheld. Connecticut has not consented to be sued for money damages in this class of action. Monaco v. Mississippi, 292 U.S. 313, 324 (1933) ; En Parte State of iYew York No. 1,256 U.S. 490. 497 (1920). Welfare aid, by its nature, does not create a vested right to back payments which have been denied. Public welfare is a current subsistence grant from public charity funds administered by statutory standards. This is confirmed by the philosophy behind the state welfare laws requiring reinbursement from paupers for support payments. § § 17-277, 17-298. This plaintiff has been living on monthly allotments from a private source, the Catholic Family Servicos of Hartford. A money judgment award, under the circumstances, would amount to a gratuitous windfall. Without such a right to reimbursement for past allotments, the case is now moot. The plaintiff moved to Hartford, Connecticut, in mid-June 196g. Her present residence eligibility under § 17-2d, having been satisfied, she now qualifies to apply for aid to dependent children under Chapter 301. The case should accordingly be dismissed. Daremus v. Board of Education, 342 U.S. 429 (1952). T. EMMET CLARIE, District J?UJ[1r. PAGENO="0087" ECONOMIC OPPORTUNITY ACT AMENDME~rS OF 1967 925 Chairman PERKINS. You have covered in general your general presentation, you are ready for questions? Mr. ~ioI-INsoN. Yes. Chairman PERKINS. Mr. Dent? Mr. DENT. I have no questions. If I remember correctly, when you were before us before there was a question left unresolved, and the gentleman on my left from New Jersey had asked a question dealing with activities of your legal service through your staff into the area called "other than acting as an advocate for the poor" and acting rather as an attorney at law in all phases of law, other legal services. I dropped the question at that point because I know that he is more informed on it than I am. What's happened on that? If I remember right, you were to give us some kind of a survey on whether or not that was happening in the Legal Services Branch of OEO. Mr. DANIELS. In other words, Mr. Johnson, the question presented to you at that time- Chairman PERKINS. The gentleman from Pennsylvania yields to the gentleman from New Jersey? Mr. DENT. Yes. Mr. DANIELS. The question was whether or not the Bureau of Legal Services of OEO would undertake to write wills for so-called indigent persons. Well now, I believe the end response was that at this informal luncheon meeting we had that you would write a will. I would like to have it stated for the record under what circumstances would your attorneys be authorized to draw up and execute a will for a person who comes to your department for legal assistance? Mr. Jol-INS0N. Only when the income and the other assets of the individual involved were so minute that a private attorney would not be interested in the case. There have been rare instances-I know of only two or three, for instance, out of some 20,000 cases that have been handled in the Washington project, that involve that. What they turned out to be were people who had some family heirloom of no value financially, but, you know, emotional value, sentimental value to the family, and they wanted to pass that on to a specific individual. They could not afford a private attorney to do it. There were no assets in the estate for a private attorney to earn any fee out of it,.. so they did undertake to write the will in those cases. Mr. DANIELS. Assuming that interrogation of the testator would disclose that he had substantial assets, be it either real or personal property, would your attorneys undertake to draw the will under those circumstances? Mr. JOHNSON. He would not, because a private attorney would be only too happy to do that. Mr. DANIELS. Tinder what circumstances does your department undertake to render assistance in divorce or separation proceedings? Mr. JOHNSoN. Our projects handle divorce and separation proceed- ings as they would any other legal matter, as is evidenced by the statistics. However, they have been able through the help of family service agencies and so forth to effect reconciliations, dispositions other than divorce or separation for the vast bulk-something like 80 percent of the divorce and annulment cases that come to their' attention. PAGENO="0088" 926 ECONOMIC OPPORTtINITY ACT AMENDMENTS OF 1967 Mr. DENT. If the gentleman ~v ill yield, I would like to ask the Chair to invite our colleague. Chairman PERKINS. Come on up Bill. He authored the act of 1965. Mr. DENT. I would like them to know that he is slowly ebbing away from here. Mr. JOHNSON. As I was pointing out, our projects would under- take to represent someone in a divorce, separation or annulment under the same circumstances they would in any other kind of case. But I also want to point out that the statistics reveal that in the vast majority of cases where people have come seeking divorce, separa- tion or annulment, the legal services program along with family help service agencies have been able to work out a different solution to the problem. Mr. DANIELS. Would you initiate a divorce proceeding or a separa- tion proceeding on behalf of a person? Mr. JOHNSON. Yes; we would, if that person was eligible financially for the services. Mr. DANIELS. What is the justification for such action on your part? How is it justified under this poverty program? Mr. JOHNSON. We feel that the major purpose of our program, as stated in the statute, is to promote justice among people living in poverty, and that this entails offering to them the same scope of legal services as is available t.o a rich man. If a State statute sets up a right to obtain a divorce if certain grounds are present, then the legal services program should afford an attorney to a poor man to obtain that divorce in the same sense that a rich man has that opportunity. Mr. MEEDS. Will the gentleman from New Jersey yield? Mr. DANIELS. I yield. Mr. MEEDS. Mr. Johnson, is it not true that in some instances that a divorce or a legal separation is the best instrument to keep a person from going into poverty or to enable a person to get out of poverty? Mr. JOHNSON. Yes; there is a very good example from southern Illinois, one of our projects there. A woman came to them who had for several years been beaten by her husband and he had not been sup- plying any support to her. She had someone else that she would have liked to have married, but she had not been able to afford a divorce. The legal services program obtained the divorce for her. She then married the second man, and not only did they benefit, but the society benefited because she had been on welfare before and now the second man was supporting her. Mr. MEEDS. Are you aware, Mr. Johnson, that the community prop- erty laws in some States-as for instance my own State of Washing- ton-provide, when a couple are separated, that the husband can incur obligations which the wife could be responsible for. In many in- stances that I have seen personally where a wife was trying to make a living for herself after being separated from her husband, but not legally, or divorced. Her wages were subject to garnishment for debts incurred by the husband because they were still a community and as such she lost her job. Mr. JOHNSON. There are scores of these instances from California, for instance. PAGENO="0089" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 927 Mr. MEEDS. And divorce or legal separation is the only thing that can prevent this, is that not correct? Mr. JohNsoN. That is correct. Mr. MEEDS. Would you say there is justification for a divorce then and for representation under those circumstances? Mr. JOHNSON. Yes; and there are also many cases where it's the only way of legitimitizing children and this has an economic impact on those children for the rest of their lives in terms of whether they will be entitled to social security benefits, whether they will be en- titled to inherit, and so forth. Mr. MEED5. Mr. Chairman, at this point in the record I would ask permission to insert a memorandum of actual cases handled by the Legal Services Bureau of King County, showing instances in which this very thing that I have just described occurred. Chairman PERKINS. Without objection it is so ordered. (The memorandum follows:) JuNE 5, 1967. Memorandum to: Congressman Lloyd Meeds. From: Charles El. Ehlert, assistant director, Seattle-King County Legal Serv- ices Center. Re Divorce litigation by OEO funded legal aid offices. The following are case summaries and observations of staff lawyers in our three neighborhood offices regarding divorce litigation for people with low incomes. 1. The plaintiff is an attractive, intelligent woman. She and the defendant were married in 1956 and have two children. The plaintiff has three other chil- dren by a former marriage, including teenage twins. The defendant deserted the family more than two years ago and since that time the plaintiff has not heard from him or been able to get any information as to his whereabouts, although she has attempted to locate him through his relatives out of this State. Rather than renting, the plaintiff is purchasing a small home in order to keep her family together and maintain a respectable standard of living, even though she is re- ceiving help from the Aid to Dependent Children program. She has never been able to afford a divorce action until the opening of the Legal Services office. It will mean a great deal to both the plaintiff and her children to be free from an unhappy marital situation wherein there is a husband and father, but no one knows where. This is especially important in this case~ because there are teenage children involved, who are old enough to know the facts surrounding their father and to be hurt by his neglect and lack of concern. 2. The plaintiff and defendant have been married for 10 years. They have three children ages 9, 6 and 3. From the beginning, the plaintiff has had trouble with the defendant's drinking and extreme physical cruelty. The defendant gambles and will go to almost any. length to obtain money for gambling. He takes things away from the family home, appliances, clothes, radios, in fact anything he can pawn or raise money on with which to drink and gamble. The plaintiff has often attempted to help the defendant and has tried to get him to seek help through the Alcoholics Anonymous, but the defendant will never co- operate. The plaintiff herself is able and willing to work and support the family, but every opportunity she has had has been lost as a result of garnishment or harrassment due to her husband's financial ~problems. The defendant has lost numerous jobs due to his drinking and the plaintiff has never had any money to start legal proceedings for a divorce. This family came to Washington to try to make a fresh start, about two years ago, but by now the plaintiff can see that there is no hope. After consulting with a Legal Service Center lawyer about the divorce action, the plaintiff was able to move into a public housing project with her three children, has found employment and hopes to make a new life for her- self and her boys. She is regretful about having to seek a divorce, but can see that there is no hope for the future of her children living in an atmosphere of fear and insecurity. 3. The plaintiff's husband left her about two years ago with two small children. The plaintiff has been in bad health for several years. She has no particular job PAGENO="0090" ~928 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 ;skills and little education. Nevertheless, with the babysitting assistance of some ~married friends, the plaintiff secured two low paying jobs to provide enough money to support herself and her family. Her husband had never provided her with any support and she did not want to be on the public assistance rolls. She consulted an attorney (private) about getting a divorce from her husband on :grounds of abandonment and non-support. The lawyer started an action for her, but would not complete it unless she came forward with $200.00 in cash. He would not even turn it over to another lawyer unless she came forward with $100.00 in cash. She did not have either sum. Meanwhile, during the two years since her husband left her, she had met another man and they wanted to get married. Since the plaintiff's bad health had forced her to give up one of her jobs, :she became economically eligible for legal assistance at the Legal Services Center. 4. The plantiff, a woman about 55 years old had been married to the defendant for 25 years. During this time the defendant had worked off and on. The parties had accumulated no property except a small piece of real estate with a small house on it in rural King County, worth about $2000 to $3,000. The parties had never had any children. One day, about a year and a half ago, the defendant left and has never come back. There had been no arguments, no fights and no discussion of separation. He just left. Having no other means of support, the plaintiff had applied for Public Assistance and was living on an allowance of about $80.00 per month. The Department of Public Assistance did, however, pro- vide for surgical and other medical care of the plantiff, which she needed during the year after her husband left. Eventually theplantiff decided that her husband was not coming back and came to the Legal Services Center to secure a divorce. At the hearing on her divorce, the Judge remarked in the plaintiff's presence and in open court that it seemed like she could pay for an attorney by selling her property. The property would be well within the Homestead exemption allowed by the laws of the State of Washington. 5. The plaintiff and defendant had been married for about 20 years. It then became necessary for the plaintiff to have a hysterectomy, which was performed. Very soon thereafter, the defendant abandoned the plaintiff and she has never seen him since then, a period of about two years. The plaintiff lives on small amount of support provided by a grown son, and upon a small amount of money that she makes through occasional work. She has no education and no job skills. She came to the Legal Services Center for a divorce, which service was provided for her. 6. The plaintiff was a young woman who married the defendant after know- ing him for a few months. The defendant had told her that he had been married before and divorced. After their marriage, the plaintiff learned that the de- fendant had not, in fact, been divorced and was still married to his first wife. The plaintiff also found that she was pregnant. The defendant also began mis- treating the plaintiff and inflicting physical pain on her. As a result of these things, the plaintiff left the defendant and, being pregnant, having no employ- ment and no income, came to the Legal Services Center to straighten out her marital affairs. A Legal Services attorney was able to document that the de- fendant had, in fact, been married before and was still married at the time of his presumed marriage to the plaintiff, and an action for annulment (Decree of Nullity) was instituted. 7. The plaintiff and defendant had been married for about six years and had three minor children. The defendant, for some period of time, had been given to violent bursts of temper and physical abuse of the plaintiff. In the past, he had frequently lost his temper, beaten up the plaintiff, broken up the house- hold things and left for a day or two. The last time this happened the plaintiff tried to get a private lawyer to begin a divorce action and obtain a restraining order for her, but was turned down because she did not have $100.00 in cash. She came to the Legal Services office and a divorce action was immediately in- stituted and restraining order obtained against her husband, barring him from entering the family premises, and requiring him to pay support, and separating him from the children temporarily. The defendant was able to appreciate the significance of the court order and obeyed it. In this somewhat more orderly and disciplined atmosphere the plaintiff and the defendant were able to discuss their marital problems and even though the defendant had in the past refused to seek nrof3ssional help awl marriage counseling, he did in this case agree to do so. After ~,everal months the plaintiff advised her Legal Services attorney that PAGENO="0091" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 929 they were getting professional marriage counseling and had worked out what appeared to be a durable reconciliation. S. The plaintiff and the defendant had several children. The defendant father abandoned the family. The plaintiff applied for and received Aid to Dependent Children. Having no funds to secure assistance of a private attorney, the plain- tiff came to the Legal Services Center to institute a divorce action. Her Legal Services attorney secured a support order against the defendant father, which he complied with, making support payments to the plaintiff. These payments were counted by the Department of Public Assistance as a family resource and reduced the amount of Public Assistance grants to the plaintiff's family. 9. The Seattle Housing Authority operates a public housing project for people with low incomes, computing its rent on an annual basis, according to income. If a husband and wife separate during the year, the rent com- putation is not changed, even though the income situation may be drastically altered as a result of the separation, unless a divorce action is filed. The plaintiff and her husband and children lived in a public housing project at the beginning of the year. During the year, the husband left the plaintiff, and did not provide her with support. The plaintiff came to the Legal Services Center to seek a divorce, which was instituted for her, resulting in a reduction of her rent. SUMMARY Several purposes are served by Legal Services attorneys handling divorce litigation, which would probably otherwise be neglected. 1. Handling divorces results in obtaining support orders, obtaining partial support and reducing Public Assistance grants; 2. Handling divorce litigation may result in freeing one spouse from a hopeless marital relationship, enabling her or him to remarry and try to establish a more stable family; 3. Handling divorce litigation may result in obtaining orders for the pro- tection of parties to the marriage from physical and mental abuse; 4. Handling domestic relationships may result in referrals to other social agencies, leading to a reconciliation; ~. Handling divorce litigation may result in rent reductions in public housing projects. Mr. DANIELS. What is the American Bar Association feeling toward this divorce and separation matter ~ Mr. JoHNsoN. Their position is the same position that we have taken, that. is; that the legal services program should render assistance in those kinds of problems. in fact, our national advisory committee spoke to this question at a recent meeting. The national advisory committee of the legal services program, which as you are probably aware, has the immediate past president of the ABA, the current president, the president-elect of the ABA, and many other ABA officials on it, passed this resolution irna~iimously. it is stated that: It is to be expected that as legal services programs get underway there will be a cycle of problems in the family law area. For those who have not bad legal services available to them, these are often the most immediate problems requiring attention. They will often arise out of long-standing situations for which there has previously been no redress. These problems should be handled by legal services programs and their relation to legal problems in other areas, such as housing or credit protection, fully explored. This was a unanimous resolution of the national advisory committee. Mr. MEED5. Mr. Chairman, may I ask one further question? Chairman PERKINS. Yes. Mr. MEEDS. Mr. Johnson. is it also not true that the legal services bureaus in most instances have very good working relationships with PAGENO="0092" 930 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 the family conseling and other services available in the cities and that they can work as a group toward solution of domestic problems? Mr. JOHNSON. Yes. Mr. M~ns. DOesn't this account for the fact in large degree that where you have 15 percent of your people seeking legal services for divorce, that only 2 percent actually end up in divorce? Mr. JOHNSON. That's absolutely correct, CongTessrnan. Mr. MEEDS. You are able to, in effect, offer to these people a much more elaborate and much more capable system of family counseling than the average independent lawyer to whom a client might, or from whom a client might, seek information about domestic problems? Mr. JOHNSON. Which also points up the advantage of having the law offices, as is true in over 50 percent of the cases located in multi- service centers, where the family services and other kinds of services that would help the family are ready at hand. Chairman PERKINS. Mr. Goodell. Mr. GOODELL. Mr. Johnson, you had earmarked $22 million for legal services program in the authorization bill last year. What are you recommending this year? Mr. JOHNSON. For fiscal 1968? Mr. GOODELL. Yes. Mr. JOHNSON. I believe that we are listed at $47 million. Mr. GOODELL. Are you recommending that it be earmarked? Mr. JOHNSON. No; we are not. Mr. GOODELL. Is it your position that you feel the legal services pro- gram could stand on its own feet in competing for community action funds from the local community action board? Mr. JOHNSON. I think it can. In many surveys run by community action agencies, the need for legal services has been one of these upper- most in the minds of the poor. Mr. GOODELL. Do you know if this is the position of the American Bar Association? Mr. JOHNSON. I do not know. I don't believe they have taken a posi- tion on the matter of earmarking; I do not know. Mr. GOODELL. What percentage of your cases involve a suit against an agency of the Federal Government? Mr. JOHNSON. I would have to give an estimate on that; roughly 7 percent of our cases are suits involving an administrative agency, either State, local, or Federal on the other side. Approximately half of those involve State and local welfare agencies- Mr. GOODELL. Half of those? Mr. JoHNSoN. Half of the 7 percent involves State and local welfare agencies, so it would be less than 3.5 percent of our total. But I would imagine more in the neighborhood of 1 to 2 percent. Mr. GOODELL. I think many of us who have great sympathy and understanding for the legal services program with reference to con- sumer problems, housing problems, and things of that nature, where the poor are being exploited, have some question in our mind about the propriety of providing counsel to sue agencies of the Federal Government. If there is an injustice done in the administration of a Federal law, it seems to me there should be some kind of procedure administratively PAGENO="0093" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 931 provided for appeal within that agency rather than get into a lawsuit as such. You cited the one case in Connecticut where you had the constitu- tional decision that was just handed down regarding the resident re- quirement. What kind of other cases do you have with reference to welfare? Mr. JoHNsoN. First, let me put the matter-the first part of your question in perspective. Mr. BURTON. Excuse me, at this moment will you yield? I am sure the gentleman from New York understands that a welfare program is not technically a suit against the Federal Government, but a local, because these programs are administered entirely through state agencies, so for purposes of classifying whether this is a suit against the Federal Government or not, I think it should be understood that this is not in any technical sense, certainly not in a substantive sense, a suit against the Federal Government, be it against a local agency of a Federal, State, or local program. Mr. GOODELL. There ~s a great deal of money involved in funding the agency, I agree with that. I am not distinguishing here a suit tech- nically against a State, local, or Federal Government. What I am interested in is a suit against a government where it is a program of aid or welfare for the individuals involved. Mr. JOHNSON. Most of the legal problems that involve either State or Federal agencies involve representation by a legal services lawyer in the administrative proceedings of that agency, not in a separate court suit brought against that agency. In other words, most of the State and local welfare cases are cases in which a legal services lawyer is representing a local recipient in a hearing conducted by the welfare agency, not in bringing some suit in Federal court or State court against that kind of agency. The Hartford kind of case is the exceptional case in the welfare area. Mr. GOODELL. First of all, do you have legal services boards in areas where you do not have a community action board? Mr. JOHNSON. We have a very few single-purpose legal service agencies. We, for instance, have a statewide program in Montana which is administered by the State Bar of Montana and which covers all of the cities and towns plus some of the rural areas of Montana, although there is coordination with the community action agencies in those cities in Montana which have them, it is basically a single- purpose agency. Mr. GOODELL. Where there is a community action board, I take it it's your procedure to have the legal services board created by the community action board and your funds come through the community action board? Mr. JOHNSON. Yes, almost without exception. I can think of only one place where there is a community action agency where a legal services program is funded separately and not through the community action agency. Mr. GOODELL. And you have the representation on the legal services board and, as I understand it, have developed in most instances a high degree of independence as to policymaking on the legal services board itself? PAGENO="0094" 932 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. JOHNSON. That is correct. In most instances the legal services program is a delegate agency of the community action agency, has its own board and it does have considerable independence. It was felt it had to have at least enough independence so that a legal services lawyer would be free to represent someone against the community action agency as well as against anyone else. Mr. GOODELL. I understand it's the lawyers' viewpoint and the bar associations, that this program should not be a social welfare type program, that it should be a professional program handled in a professional way, controlled by, or at least greatly influenced by, the local bar association with the representation of the poor also on the board. Are you in accord with that approach? Mr. JOHNSON. That's part of our guidelines, in effect, of our program~ Mr. GOODELL. You don't believe that there should be what they call-I dont know whether it is just a bogeyman or not., a social wel- fare approach as distinct from a professional legal approach? Mr. JOHNSON: In one sense the whole community action program in. OEO is against the traditional social welfare approach. The lega.l services program looks upon itself, the lawyers look upon themselves. as advocates, professional law advocates for the poor. Mr. GOODELL. Let me ask you with reference to this experiment of judicare in Wisconsin. Initial reports were that 84 percent of the cases. there were divorces. This was a situation, was it not, where you issued a "credit," card in effect, to poor who qualified a.nd they could go to any lawyer they wanted to, for any type of lega.l services? Mr. JOHNSON. Well, for any kind of civil case. Mr. G0ODELL. Any kind of civil case? Mr. JOHNSON. That's right.. Mr. GOODELL. Has the experience over a period of time reduced the percentage from the original 84 percent tha.t was reported in divorce cases? Mr. JOHNSON. In the Wisconsin judicare program? Mr. GOODELL. Yes. Mr. JOHNSON. As ~OU recall, tha.t was the first 2 months. It was based on a total of 85 cases. The percentage is now down even in that program to somewhere in the neighborhood of 50 percent. As I indi- cated, based on the first 200,000 cases we have had nationwide, the percentage of people we have had coming in seeking divorce and an- nulment is only 15 percent. Mr. G-OODELL. Legal care in England, as such, conforms to that pattern. When they started out, about. 80 percent of the cases were divorce cases. As I understand it., legal care has been in operation for about 17 years in England and the. rate is now down to about 40 percent. of the cases. Would your own experience adhere to that trend? Mr. JOHNSON. That is correct. There is another thing t.hat probably bears on thi.s area. The Amer- ican Bar Foundation, in connection with a survey it is running for us,. did a survey of the poor and what the poor perceive to be legal prob- lems in Peoria, Ill. One thing they found out, all the poor recognize domestic relations as something you went to a lawyer about. But only one recognized what PAGENO="0095" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 933; a lawyer or trained layman would recognize to be legal problems in the consumer area, the housing area, et cetera. Mr. GOODELL. I have one further question here, if the gentleman will indulge me. I take it by implication, that you gave the cost of $48.39 per case in your neighborhood legal services and $139.01 for' judicare. By implication you seem to be saying you prefer' the neigh- borhood approach to the judicare approach. Do you have any assessment of the comparative value of these two approaches? Mr. JOHNSON. Our preliminary conclusion is that certainly for ur- ban areas where neighborhood law offices manned by full-time staff attorneys are clearly feasible, that this is by far the preferable method. It means we can reach with the same amount of money almost three times as many people. We don't know all the answers on judicare yet, because' we don't know all of the answers as to the quality of service being performed and what the cost might be in a rural area like that with a staff-type' program. The American Bar Foundation is doing a comparison study for' us of judicare and staff-type programs in a rural context, and we are also going to have the University of New Mexico Sociology Depart- ment do an in-depth study and comparison of judicare and another' kind of program in a rural area. Chairman PERKINS. Mr. Ford? Mr. FORD. Thank you, Mr. Chairman. The record seems to be unduly burdened this n'iorning' with dis~ cussion of divorce. The implication here is that your program is blaz- ing a new trail in providing public money for the destruction of the institution of marriage. I would like to observe that in Wayne County, which includes the city of Detroit, and some 40 other communities' known as the Detroit metropolitan area, we have been using public money to pay for divorces, separations for at least since I began to practice law in January 1952, and I know it `had been going on for some many years before that. Mr. Meeds has touched upon a situation in his State which makes a divorce not only absolutely' desirable, but absolutely essential for a person who frequently finds himself in poverty. I would like to Sug- gest one we find frequently around the big industrial city. We have folks who come from other parts of the country with false hopes about how easy it is going to be to get a big-paying job in the automobile plant. A young man comes without much training and per- haps one or two small children. He discovers that the additional bur-' den of trying to compete in the much more difficult environment of an industrial city is just too much; so he has what the lawyers in our area refer to as "a poor man's divorce." He just gets on a bus or train and leaves. His young wife is left with one or two children. The first time she comes in contact with a social agency, a record is made of the marriage and where it occurred and so on, but she hasn't the slightest idea where her husband lives, or even if he is alive. She may ultimately get on ADO or some other program. Finally, if she's fortunate and starts to work her way out of it, she might find a job that will start to move her away from being dependent entirely on public welfare. PAGENO="0096" 934 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 She is still yo~rng enough and has an opportunity to make a new life for herself. She finds, howeYer. that every time she turns around, she is classified for all purposes as a. married person when, in fact, she no longer is enjoying any of the protection of her marriage state. So, in those cases where the husband cannot be found, she is in a state of legal limbo until an action can be brought for his desertion and the relationship severed. All too frequently this young woman seeks the protection afforded by living with another man without benefit of that divorce, and then starts to produce some children whose legitimacy is legally wrong from the beginning. Now we find that we have two generations of people being fouled up because of the presumptions that the law creates, and the only way to untangle this kind of mess is for a quick, clean, proper divorce proceeding. I would like to also suggest that it is not the function of either your program or this committee to decide upon the public policy of the law of divorce. It has already been decided by the superior wisdom of the legislatures of every one of our 50 States, that divorce is, in fact, a proper legal remedy to sever certain legal relationships be- tween people. I don't think that we should leave this record with the impression that this has become a primary function or a primary mission in any part of the program, and I hope before you finish that you will put enough statistical data in this record to show exactly where these cases fall, representing a portion of the total legal work done not just in terms of the number of people involved, but how much time is spent counseling people on their legal rights and responsibil- ities as distinguished from the actual time in preparing papers for a divorce. So, any legal stenographer in a law office who cannot prepare a divorce proceeding from the beginning to end is not much of a legal stenographer. I am sure my legal colleagues here would agree it is one of the less troublesome and taxing types of legal work to handle. I shouldn't want the impression to be that we are taking all of this high-powered legal talent and using it. that way, because most of these divorce cases are just a fifing-out-paper operation. Mr. JOHNSON. I think we can put it in perspective. Twice as many people are receiving representation in court in regard to consumer problems as are receiving representation in court with regard to divorce. More juveniles are being represented in juvenile court by our programs than spouses are in divorce court. That gives you some idea of the volumes of other kinds of cases in court as compared to divorce and annulment. Mr. Fo~n. Let me ask this. Suppose that an injured person comes in and the attorney in your neighborhood office determines that the per- son probably has a cause of action against someone that is of such a nature that many attorneys would accept that case on a contingent fee basis. Are those always referred out? Mr. JOHNSON. Those are always referred out and in the majority of instances, the vast majority of instances, there is a lawyer referral service run by the bar association in town and the referral is made through that lawyer referral service to private attorneys. Mr. FoRD. Now~ with regard to this judicare program in Wisconsin, as I understand it, the person was at complete liberty to go to any PAGENO="0097" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 ~935 lawyer, practicing in the community, that they selected for the pur- pose of consultation. Mr. JOHNSON. That is correct. Mr. Foiw. Did you make any breakdown to see if the same lawyers were handling all of the divorces or if they were spread around? Mr. JOHNSON. The statistical breakdown, I cannot recall the details, but we could furnish it to you. I do know that a good portion of the cases were being handled by a very few attorneys. (The information referred to follows:) WISCONSIN JUDICARE From 12-31-66 to 6-31-67 Wisconsin Judicare attorneys have handled a total of 732 family problems and rejected 10. They are broken down as follows: Accepted Nonaccepted (a) Divorce and annulment (b) Separation (c) Nonsupport (d) Custody and guardianship (e) Paternity (f) Adoption (q) Other 549 41 44 45 11 6 26 Mr. Foiu. I would be interested to know if the same attorney was handling all the divorce cases, because one of the dangers that I can see in what you are experimenting with, and I am glad to hear it was only a one-shot experiment, is that there are some attorneys who like this easy word. You know, this is shooting-ducks-in-the-barrel type of practice that, as I said, can be done mostly by a girl in the office, and I wouldn't like to see us financing a situation where the only lawyer in town who wanted to do this sort of thing was handling all of the divorce cases with this money and running up a pretty good score. That kind of a specialist is not generally looked upon in our court- house as the guy who is working hardest to take care of the American family. Mr. JOHNSON. That is correct. My recollection is that in one town where they had about 10 attor- neys, one of those attorneys had over half of the cases and most of those cases were divorce cases. So this kind of pattern may be emerging. Mr. FORD. I also recognize that it is the shame of our profession that we have many lawyers who are too busy to become involved with the dirty little problems of people like I described a few minutes ago with illegitimate children and problems of that kind, and no money in- volved to make the case interesting. So, even with the danger of this possible use in Wisconsin, you are dealing again, as in so many other phases of the poverty program, with cases that nthody else wants to handle. It is hard to evaluate what you are doing with the legal services program because for the first time I think you are heiping people with the kind of problem that the Legal Aid Service in my own area-where we thought we were fairly liberal and forward-looking-has just barely scratched the sur- face, if they have done anything at all. 0 1 6 2 1 0 0 80-084-67-pt. 2-7 PAGENO="0098" 936 ECONOMIC OPPORTUNITY ACT AMENDME~rS OF 1967 We have more attorneys in operation in the Detroit area than we have had cumulatively in the last 20 years. The program does seem to be working very well in our city. Mr. JOHNSON. Yes, almost half of the clients that do come to legal services programs have never seen a private attorney or a Legal Aid attorney or any other attorney before in their lives. Chairman PERKINS. Any further questions, Mr. Ford? Mr. FORD. No. Chairman PERKINS. Your time has expired. Mr. Bell? Mr. BELL. Thank you, Mr. Chairman. Mr. Shriver, 1 want to congratulate you for a very effective de- fense of a rather difficult program. I wanted to start out by saying that my criticism has never been of you as an administrator. I think you are doing an excellent, job. My criticism relates to the structure of OEO. I have just two or three quick questions that perhaps have been asked before. I have not. been able to attend all of the hearings. But I notice that in some cases you have not alway placed the Job Corps people where some people have, wanted them to be and I am wondering why that is. I know in some instances you have wanted to locate a Job Corps center in a place where the public, as far as I can tell, did not welcome it. Is this situation a policy you have been following or is this some- thing that has just happened? Mr. SmilvER. Well, Congressman Bell, I don't think that we have placed any Job Corps center, at least in the last year, or year and a half, or two years, in a place where the local people were opposed to having it. There was a. question that arose near your city there, one of the suburban places called Newhall, Saugus, I cannot remember. I think it was called Saugus-Newhall or Newhall-Saugus------ Mr. BURTON. I hope you can remember it. Mr. SHRIVER. I think it was a former veterans' hospital. There was another group that didn't want one there. Mr. BELL. My question was to clarify that. Was there a substantial number of the populace who wanted the Job Corps there? Mr. SHRIVER. Yes, sir. T.Jsually whenever there is an argument, there are two sides to it and there were two sides to it. Now, the issue there- that was not the principal issue on which the situation was resolved. It was resolved on the cost factor. We have very strict budget limita- tions on the Job Corps and it turned out that there was an alternative location in the State of Washington where we could accommodate just as many people with a much reduced cost of rehabilitation of the facilities. I think we saved something in the neighborhood of a half million dollars by going to an alternative location in Washington as compared to the one down there at Saugus-Newhall. However, there was nothing wrong, really, with the Saugus-Newhall place as a place, provided we had had unlimited funds. In fact, one could say if we had more funds, we would have more centers and that would be a place that we would give consideration to. PAGENO="0099" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 937 Mr. BELL. In other words, it was primarily for a monetary reason that you decided on Washington rather than going ahead at Saugus- Newhall? Mr. SHRIVER. That's right. Let's say there had been no controversy at all. We still would have gone to Washington for the savings to the taxpayers involved in going to Washington if there had been no controversy. Mr. BELL. The next question I have is relative to a small business development center which I believe had been. shut down. I assume the question has been asked, but there had been some indication that these small business centers had been quite successful. I wondered why you cut off the operating funds. Mr. SHRIVER. Well, there are a number of reasons involved. First of all, as you will remember, I guess, the Small Business Ad- mimstr'ition has taken over the job of p1 ocessing the actual loan papers which in the first year of the small business development centers was done by the small business development center, so that the small busi- ness development center has become ` a place where merely advice' and consultation is given rather than loans extended. It seemed to us that it would be better if the Small Business Ad- ministration official not only give loans in SBA offices, but moved out into the neighborhood centers, which we will talk about in a little while, because they would then be close to the people and they could give the advice as well as the loan in one place. As a result of that and for other reasons, we announced, oh, 5 or 6 months ago that we would phase out the small business development centers as of the 30th of June. ` Now, this is not because of any-disenchantment with the idea of trying to help small businessmen, but our studies revealed that very few of the very poor, which is our clientele, were actually getting serv- ices through small business development centers or really through SBA. Tme `answer to that is not too hard to see as being something maybe we should have anticipated at this. We thought it would be a great thing to get poor people into the free private enterprise system, but it turns out-I guess you might say obviously-that it takes more skill to run your own little business than it does to be an employee in somebody else's big business. If you are trying to run your own little business, you have to be a salesman and a manager and accountant; a fellow who can run a little real estate operation, you have to be a boss. If you have even two people working for you, you have to be able to direct their work, and it requires a spectrum of ability which the poor people don't have. Mr. BELL. Most of your clientele, as you say, wouldn't have the edu- cation to take care of this? Mr. Smuvra~. That's right. So it turned out that the SBDC's, al- though they were helpful to extremely small businesses, were not reaching the very poor, which is our clientele. So it was our decision, that it would be better for that to be handled by SBA and the Con- gress, as you remember last time, put that over into SBA, not because we were against it, but because in our judgment it wasn't reaching deep enough into poverty to be a legitimate concern of ours. We have been asked on the Senate side, in case you don't know it, by all of the Senators on the Education and Labor Committee over PAGENO="0100" 938 ECONOMIC OPPORTUNITY ACT AMENDME~S OF 1967 there, Mr. Chairman, to continue to finance the SBDC's, let's say, for 60 days after the 30th of June. Their request was based on studies maybe that you have seen, too, which indicate to them at any rate that it was a good program, and they didn't want to have us stop it and then have Congress say, start it up again 60 or 90 days later. So we do have an official request to continue it temporarily, pending congressional action. But the reason why we have done what we did was based on our evaluation studies by Dr. Levine's department, which show that that particular pro- gram was not being as helpful to the poor, the very poor, as we thought our program should be and, therefore, we were putting it over into another department where their interests were more compatible. Mr. BEU4. Mr. Chairman, one more question.. I know this is not your department, Mr. Shriver, but I note that you also tried to answer the question at one time, so I thought I would bring it up again, relative to this Project Alert. I know it's in Secre- tary Gardner's Department of Health, Education, and Welfare. How- ever, you did indicate that this had not been funded. I understand, though, that it has been funded to $59,000. I am wondering if you have any information that I don't have ~ Mr. SmuvER. The last that I saw was a letter from the Secretary ~f Health, Education, and Welfare to the people of Los Angeles, stat- ing that it was not going to be funded unless certain specific things were worked out with the Los Angeles police and with others in Los Angeles. Now, that letter went out, I would say, within certainly the last 2 weeks and maybe within the last week. Therefore, the funds as I understand it at this time are, you might say, suspended pending resolution of some technical questions with the Los Angeles Police Department and others in Los Angeles. Mr. BElL. Thank you, Mr. Chairman. Mr. SHRIVER. I might say in connection with that, if I might, Mr. Chairman- Chairman Pmurn~s. Go ahead. Mr. Sm~ivm~. It was interesting this morning on the TV on the To- day show to see the Governor of Florida decorating young people who were serving as a Community Alert patrol in the difficulties in Tampa recently. He was on there giving them some sort of a medal to the same kind of people in, Tampa which I think HEW was trying to mobilize in Los Angeles on the side of, let's say, the. police. So it is not just, I think, an open-and-shut case that this kind of thing is sort of a, you know, bad idea. Mr. BELL. It has proven to be a bad idea in Los Angeles, so far as the police are concerned. Mr. SIUUVER. I think the public sentiment is that way, but it hasn't, in fact, proved to be a bad thing, when you know, things get stirred up. Mr. BURTON. Will the gentleman.yield? Mr. BELL. Yes. Chairman PERKINS. Mr. Dent has the floor. Mr. DE~. No questions. Chairman `PERKINs. Mr. Pucmski ~ PAGENO="0101" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 939 Mr. PuCINSKI. I will yield to the gentleman from California, Mr. Burton. Mr. BURTON. I wanted to follow up. We had ad hoc set up in our Hunters Point area when we had a disturbance out there-something similar to Project Alert. These youngsters who in their own more ef- fective way, rather than adults, were able to enforce a little disciplme. This was a volunteer service performed by one of the groups that had been funded by the Neighborhood Youth Corps. But for their assist- ance during our Hunters Point disturbance the situation could have been very costly in terms of human suffering as well as material dam- age to the city. So, involving youngsters in some constructive relationship with the law can, during moments of crisis at least, be very useful in keeping the peace in an urban center. Mr. BELL. However, in Los Angeles, the police department and cer- tain departments of the local government were not in support of this project. Mr. PuCIN5EI. Mr. Shriver, I agree with your remarks about the Tampa situation and it seems to me that perhaps this is a field that some communities have been neglecting. There seems to be a belief that by getting these young people more directly involved in these prob- lems, they can be of greater service. I would like to take this opportunity to congratulate you and your Office for funding the first of the youth movements in this country right here in Washington. You took a long-shot chance and gave some seed money to the Rebels With a Cause, who have been very helpful in southeast Washington. They have done a good job and are highly. moti- vated. We are looking forward with great expectation to more of this kind of activity around the country as perhaps the antidote for the unrest that we find in the streets of America. I would also like to congratuate you and the program you are dis- cussing now-legal services. The OEO has a chance to come here and give us their analysis and submit to questioning on these various pro- grams. Both sides of the aisles can agree that most of the programs funded by the OEO are working very well around the country. Mr. Chairman, can we have some indication of the procedure here. I don't want to see the OEO's opportunity to tell the good things.about their work precluded. We are well aware of the good work this agency is doing, but there are some programs that have been subjected to severe criticism and I would like to have Mr. Shriver have an opportunity to address himself within the time that we have to these `controversial areas so he can set the record straight and so we can go to the floor with the information we need from the most authoritative source in the country. Would the chairman be good enough to advise how we are going to move along? Chairman PERKINS. Yesterday we decided we would start out with what we thought were the most important segments of the Community Action programs, which was health, then we would go with legal services. . . . . It would appear to me that legal' services would take' the remainder of the morning until 12 o'clock It may be that Sargent Shriver wants PAGENO="0102" ~94O ECONOMIC OPPORTUNITY ACT AMENDME~S OF 1967 :tO, from this point on, group the many segments of the community :actions together and discuss one at a time and just go all the waythrough them. I don't know. I think we ought to let the Office of Economic Opportunity present Its case in the way they feel it should be presented and then interrogate them. Can you see any way you can work with that procedure, Mr. Shriver? Mr. SHRIVER. First of all, our approach was that the Job Corps had been subjected to a lot of criticism, so we started with the one every- body claimed was the most criticized. The next was community action, so we put that on second, because it was supposed to be the second most criticized. So we have been attempting in the arrangement we make to put those who are the most objectionable first. Now, one of the problems about community action is that every- body objects to it, but when you get down to talking about what it adds up to, you get the sort of response that Congressman Pucinski is saying, well, who's objecting? Now, in fact, the legal services program caused a great deal of controversy last year, and I was just getting the statistics here on that point. For example, last year the North Carolina bar came out against the legal services programs in North Carolina, and it took us from this time last year, let's say midsummer last year until 3 weeks ago or 4 weeks ago to resolve that situation. Now the North Carolina bar supports what we are doing in North Carolina. The same thing happened out in California. We gave a grant in California. to migrant services and we were condemned by the board of regents, I guess it is, of the bar. It took a year for that ~situation to be st.raightened out and now the California bar supports ~the program. The same thing happened in Tennessee; the same thing happened in the city of Savannah, Ga., and in Tulsa, Okia. So it hasn't been totally-people have objected to it. Mr. PUCINSKI. Isn't that the whole story of OEO? At this really crucial point, where you are hitting your stride, where you have these things working, there are those who would like to do away with your office. However, this testimony, and I think that as we proceed I am willing to bet that in every one of the programs of the OEO, whether it's in Headstart or community action or Job Corps, when the full facts are known, the critics will have their answers. I think that the greatest problem that the OEO has is the com- munications gap of telling the dramatic story of this agency. So, Mr. Shriver, perhaps the best thing is let you proceed in your own way and tell your story and show how all these programs dovetail into a total war on the problem that affects some 32 million people in this country. All I can do is congratulate you for this particular aspect, because I think you are finally getting into an area that had been too long neglected. I think this legal services program does more to give people a feeling of dignity when they know their rights. Chairman PERKINS. Mr. Erlenborn? PAGENO="0103" ECONOMIC OPPORTUNITY ACT AMENDME~S OF 1967 941 Mr. ERLENBORN. No questions. Chairman PERKINS. Mr. Gurney? Mr. GURNEY. Thank you, Mr. Chairman. I want to thank Mr. Shriver for congratulating our Governor- Mr. SHRIVER. I praised him before at the White House in front of 59 other Governors-not that I approve of everything he does or he approves of everything I do. Mr. GURNEY. Incidentally, I did catch that on the "Today" program myself and I thought it was good and apparently those people have worked well in Tampa. While we are on that subject, since the 1967 riot business I guess has started, to the regret of all of us, let me ask Mr. Johnson, does your Legal Branch involve themselves in any of these riot matters? In other words, if some person gets involved with the law in these riots, do you help them? Mr. JOHNSON. We look upon our program, one of the major pur- poses of our program is to offer a viable alternative to violence in the streets, to offer justice in the courts as an alternative. I can think of an instance in Cleveland, Ohio, that happened re- cently in which a legal services program became involved in a poten- tial riot. This was a case where a policeman shot and killed a young Negro youth. It is one of those situations that has created riots many times, and it happened in the Hough area where there were riots last year. The legal services office in the Hough area had established so much rapport with the neighborhood, instead of rioting, about 20 of the youths who might have been leaders in this kind of thing came to the office and spent almost all night talking to the legal services officer, who convinced them there was legal recourse. If there is police brutality, there is something that can be done about it either in the courts or before police review boards and the proper course is not violence, not rioting, but to let the legal services work for you. That legal counsel is representing some of those youths who con- tended there was police brutality in that instance. Mr. GURNEY. I thought your department handled civil cases only. Djd I hear that correctly? Mr. JOHNSON. No; that is not correct. Mr. GURNEY. Criminal cases, also? Mr. JOHNSON. Misdemeanors and juvenile offender cases, but gener- ally not felony matters. Mr. GURNEY. Let's take a specific example then. Suppose you have a riot in X City and some people involved in the riot are arrested and thrown in jail. How does your agency work in such a matter, such an instance? Mr. JOHNSON. There are at least two ways a legal services project might get involved in such a situation. When the persons who had been arrested for rioting came to the court for arraignment, it is en- tirely possible that the court might appoint a legal services lawyer to represent the persons, assuming that the charge is a misdemeanor and not a felony. Mr. GURNEY. Has this been done before? PAGENO="0104" 942 ECONO~UC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. JoHNsoN. I believe that some legal ~rvices lawyers were ap- pointed to represent some people charged with rioting in Los Angeles about a year ago. But most of the people were represented by others. Mr. GuRNEY. If there are other instances, would you furnish those forthe record? Suppose the judge doesn't appoint a legal services officer. What other action might your agency take? Mr. JoHNsoN. First of all, it wouldn't be action by our agency. It would be what the local legal services project did and what the at- torney did in view of his duties as an attorney. If he was appointed to represent someone who was charged with a misdemeanor, whether it be out of a riot situation or otherwise, he would represent him and~ provide him all of the advice, counsel and representation that a lawyer would normally give. Mr. GURNEY. Your answer is that if he was appointed, and I pre- sume there you are talking about if the court appointed him? Mr. JOHNSON. That is correct. Mr. GURNEY. I am asking about other situations. Mr. JOHNSON. All right. There are two ways that a legal services lawyer could become involved. One, as I said, would be court appoint-, ment. The other would be if the family of, say, the person who had been arrested came to them and said, we would like you to represent our son in this particular matter. We do not have money to retain a lawyer. And if he was charged with a misdemeanor and if this was one of our legal services programs that does handle misdemeanors, they might very well take that case. Mr. GURNEY. And do you have instances where that has happened ?~ Mr. JOHNsoN. I can think of at least one instance offhand, but there may be others. In Cincinnati, Ohio, our legal services project was requested by~ families of some people who had been arrested was requested to repre-~ sent those people, and they did enter appearance to obtain bond and a continuance. Mr. GURNEY. This is recent? Mr. JOHNSON. Quite recently, I believe. Mr. GURNEY. If you have other illustrations, would you supply that? Mr. JOHNSON. I certainly would. (The information referred to follows:) REPRESENTATION OF PERSONS nc Riar OR PROTEST SITUATIONS BY LEGAL SERvicEs AGENCIES The OEO Legal Services Program has been able to identify the following cases in which legal services attorneys represented persons who had been alleged to have participated in riots or protest actions. 1. Northeast Region~-New York City Mobilization for Youth did handle eight or nine persons involved in the Viet Nam demonstration at St. Patrick's Cathedral. A description has been forwarded to Mr. Johnson. 2. Mid-Atlantic Region-Washington, D.C. Last summer a few days before the 15th of August, some teenagers described a~ negroes were aecu~ed of having assaulted a "white" near a tavern in the South. East section of Washington. The police had the name of one person allegedly PAGENO="0105" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 943 involved. During a me~ting on the 15th of August at the South-East House the police arrived and tried to~ arrest the named person. One of supervisors of the House attempted to intercede and was also arrested. Both were taken to the 11th precinct. Word of the arrests resulted in a general disorder consisting of picketing, rock throwing, and traffic stoppage in the area of the precinct house. * The director of the legal services agency and several staff members immediately consulted with the police in order to dispel the rioters and to obtain the release of the five or six persons who were being held. Release of the juveniles into the custody of their parents and bond for the others were obtained. A full-scale riot was averted. Several prosecutions did result from the incident. All were success- fully handled by the Legal Services Agency. The alleged assault which precipitated the incident was sent to the Grand Jury and was handled by private counseL S. Southeast Region~-Tajmpa, FZa~ There have been recent incidents in Tampa, Florida where the Legal Services may become involved, but to date they have not been requested to represent anyone. 4. Great Lakes Region-Chicago, Ill. The most effective work of the agency was to work with the West Side organi- zations (the looting area) and to talk with the people involved. Since the agency During the winter of 1967 a large scale snow storm immobilized the city of Chicago. At this time many incidents of looting took place. The legal services agency had eight offices operating with three newly opened and understaffed. release on bond pending a hearing of the persons charged, many of whom had been held from four to six weeks without bail bond or preliminary hearing. It handled twelve juvenile cases and four or five adult cases. The juvenile cases resulted in four being dismissed on the grounds that the charges were too vague, three being sent to the Illinois Youth Commission (similar to a finding of guilty), and five being placed on probation. The one adult felony resulting is still pending. knew that it could not handle all the cases due to insufficient personnel, it worked to make the Public Defender aware of the situation and to convince the area people to use the Public Defender. The agency was also instrumental in obtaining The result was that the agency's main involvement was in working with or- ganizations in the area, rather than active representation. 5~ Southwest Regi~on-Austin, Tea. No representation of this type reported. 6. North Central Region--Omaha, Nebr. On July 3, 1966 a general disturbance broke out In Omaha. Sporadic outbreaks continued for the next two days. `On the 5th of July the National Guard was called out and order was restored. Two weeks later and in August there were other outbreaks resulting in several arrests. During this two month period, a total of 127 arrests resulted. Charges included malicious destruction of property, loitering, resisting arrest, inciting to riot, breaking and entering, looting and theft, and receiving stolen property. Approximately one-half of these were dropped for insufficient evidence or other reasons. Nine adult defendants and juveniles were handled by the legal services agency. Four of these were charged with receiving stolen property, but were dismissed for insufficient evidence. Four others were charged with loitering or disturbing the peace, but several of these were also dismissed. One juvenile was charged with delinquency for theft of firearms. This allegataion was found to be true. 7. Western Regio~-San Francisco, Calif. Four to five months ago there were disturbances in the Oakland area (riot con- ditions) involving a school boycott and that sort of problem. The Legal Aid Society of Alameda County (Thomas Fike's outfit) was involved in two aspects of the situation. They represented from 30 to 40 juveniles who were rounded up *by the police. The juveniles were not charged with criminal behavior, but were arrested as part of the clean up by the police. Mr. SHRIVEn. Could I emphasize on a point he made in passing that it is a local decision whether the lawyers in Cincinnati, for ex~ ampie, `took that case. It was a decision made by the legal services pro- gram in Cincinnati. PAGENO="0106" 944 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 We are not issuing an edict from Washington that everybody has to do such and such under certain cii~ciirnstances. It is a decision, first of all, by the individual lawyer operating under a local board of di- rectors, which in the case. of Cincinnati are Cincinnati lawyers. They are not Washington lawyers. In fact, that board of directors isn't even composed of paid people. It; is a community-based group. of lawyers working in coordination with and with the approval of the Bar Asso- ciation of Cincinnati and the National Bar AssociatiOn group there, including some of the most distinguished lawyers in Cincinnati and the preexisting Legal Aid Association. So I want to make it clear that it is not his agency, as you say, what is your agency doing about it.? These are local programs under locaJ jurisdiction. Mr. GtmNrn~. Of course, they are funded by the Office of Economic Opportunity. Mr. Siimvr~. We fund them, that's right, but my point is Earl John- son would not be making a decision about whether or not to represent nor would anybody in Washington be making a decision about whether or not a particular person should get representation in Cin~ cinnati, Tampa, Tulsa, Chicago or any other place. That is done by the local group. Mr. GURNEY. Let me ask this, since we are pursuing that subject. Of course I am sure that a lot of the people involved in the riots are swept up in the emotion of the moment and to that extent you might say they were innocent, but I think there also is some evidence that there is sort of nationwide movement on foot spearheaded, I am sure, by some people to cause riots. As you well know, the Congress is quite concerned about that and will be holding hearings on an antiriot bill within a few days and probably report one out this year. Therefore, there are some irrespon- sible elemeuts, I believe, in this business, too. What precaution does your agency take or your legal appendages take, Mr. Johnson, in order to insure that you are not representing, shall we say, the irresponsible, as well as those who can be identified? Do you attempt to identify them? Do you attempt to single out those that perhaps shouldn't be defended and those that should? Mr. JoHNsoN. No, pursuant to the canons of our profession, which require that lawyers represent unpopular as well as popular causes, and represent the undeserving as w~lI as the deserving, the legal serv- ices programs would be violating the canons if they separated the ir- responsible from the responsible, the guilty from the innocent, the popular from the unpopular or the deserving from the undeserving. Mr. GURNEY. As a lawyer, I recognize this, too. Suppose the Con- gress does enact an antiriot bill. Is your agency going to defend peo- ple who are prosecuted under the antiriot bill? Mr. JOHNSON. If an antiriot bill was passed, it would then become- this is Federal legislation, I believe-it would become a Federal crime, it would go to the Federal courts, and lawyers compensated under the Criminal Justice Act would be providing t.he defense in those cases. Those would be public defenders in some cases; in some districts this is done through public defender and in other districts through PAGENO="0107" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 945 private counsel, but it would be paid for by the Administrative Office of the U.S. Courts and we would no longer be involved at all. Chairman PERKINS. Your time. is up, Mr. Gurney. Mrs. Green? Mrs. GREEN. Following up Mr. Gurney's question: Have any of these cases been before the Federal court? Mr. JoHNsoN. Any of the criminal cases- Mrs. GREEN. Any cases of riots and so on. Mr. JOHNSON. No, not to my knowledge, not in the Federal courts. Mrs. GREEN. If it did go to the Federal courts, would you still finance it? Would you pay for the lawyer for the defense? Mr. JOHNSON. If it was a Federal criminal case, then it would be handled under the Criminal Justice Act administered by the Adminis- trative Office of the Courts. We might be involved in some of the pre- liminary proceedings, but once it got to the Federal court, someone would be appointed under that act and we would not be involved any further. Mrs. GREEN. Would you have a case in which the Government was paying for both the prosecution and the defense? Mr. JOHNsoN. That is correct, as they do now under the Criminal Justice Act for the last-I guess it's year and a half or two years, the Federal Government has been paying for the defense of alleged crim- inals in Federal criminal cases, and in the District of Columbia this is handled through a. public defender, the Legal Aid agency; in a couple. of other district courts it is handled through a public defender, but in most districts it is handled through private counsel. That is not unique. The Federal Government has been doing this for a couple of years and State and local governments through public defenders have been doing it for decades. Mrs. GREEN. Let me turn to another subject, if I may, while Mr. Berry is here. Do you have a. contract with the National Education Association for some $415,000? Mr. BERRY. Will you state that again? Mrs. GREENE. Do you have a contract with the National Education Association? At. the top of the second page which you furnished me you have $5,800 listed. Don't you have a contract with them that is more than $400,000 in regard to teachers serving in a Job Corps? Mr. BERRY. That report purports to cover those contracts in which community action program was the contracting party. I do not have the information. I don't know whether Job Corps was separately un- dertaking to respond to your question to include those contracts on which they were the party. My report which was presented deals only with community action. Mr. Shriver's statement of last Monday referred to the YWCA. I am aware generally that the YWCA has a contract with Job Corps. Mrs. GREEN. I think information concerning the other contracts is being prepared; is that right, Mr. Shriver? Mr. SHRIVER. I think the answer to your question is, yes, the Job Corps does have a contract with the NEA for exchange of teachers. I am not certain about the size of it, but it probably would be several hundred thousand dollars. I was hoping I could get the figure. PAGENO="0108" 946 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 The Job Corps does have a contract with NEA. Mrs. GREEN. The Job Corps people are coming back, I believe, to discuss some of the other points. Mr. SHRIVER. Their report, the Job Corps report, like the one you have from community action, will be submitted to this committee to- day. Mrs. GREEN. Fine. The CAP made a grant to the Congress of Parents & Teachers for $51,000. Would you explain what that contract is for? What was the application sent in by the PTA? What was the PTA going to do? Mr. SHRIVER. Mr. Berry. Mr. BERRY. They were going to undertake, as I recall, the convening of a conference with representatives of poor families selected by vari- ous PTA's in the country to explore further means by which the PTA would involve poor parents, the residents in poor areas in more mean- ingful dialog in the developing of school and parent relationships. This was an undertaking with this national organization to focus attention upon a larger involvement of parents of poor children in re- lation to both the schools and the teachers. Mrs. GREEN. Was this to be a 2-day conference in Chicago at one of the hotels there? Mr. BERRY. I don't recall the locale in which the conference was to be expected to be held. It was to be expected to be centrally located. Mrs. GREEN. Was it to be a 2-day conference? Mr. BERRY. I think it was. Mrs. GREEN. And how many poor people were they to bring in for the 2-day conference? Mr. BERRY. I will have to review the highlight or summary of that particular contract. We will provide it for the record, Mrs. Green. Mrs. GREEN. As I recall, it was a 2-day conference and the PTA was bringing in 100 representatives of poor families to discuss how par- ents and teachers could work better together. I think that was essen- tially the situation. Mr. BERRY. Yes, this is, I think, the same subject. The exact number of conferees- Mrs. GREEN. Is it necessary to provide Federal funds to bring 100 poor people to Chicago for 2 days to discuss how parents and teachers can work better together? Mr. BERRY. We considered that this was a move in the right direc- tion in at least getting a broad cross section of parent involvement from various sections of the country rather than carrying the same subject to various sections of the country. Mrs. GREEN. Isn't it true that every State PTA has a State confer- ence every year and the national PTA has a national conference every year? Don't they get together? Mr. BERRY. That is correct, and it was considered a better way of involving all of the State associations or at least a representative number of them from various States at one meeting rather than hold- ing a series in the various States. We felt that in the end it would be more economical. Mrs. GREEN. Do you believe the travel to and from a central loca- tion, be it Chicago or some other place, and what cOuld be accom- plishe.d in 2 days, justify the expense? Do you believe this was some- PAGENO="0109" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 947 thing that PTA's could not do on their own, or indeed during the last hundred years have not done on their own? Mr. BEiu~Y. It is very difficult to make a judgment before the fact. We felt that in response to this offer of specific involvement of the clientele served by our agency that it was worth an investment in this effort to involving a nationally established as well as locally estab- lished organization to become actively involved in this effort. Mrs. GREEN. Do you say they have not been involved actively before this? Mr. BERRY. Well, not in-I would say it's sketchy and varied in the response that the PTA has given this subject in various communi- ties and this was in an effort to get a national thrust in this direction. Chairman PERKINS. Mr. Erlenborn? Mr. ERLENBORN. No, thank you, Mr. Chairman. Chairman PERKINS. Mr. Scherle? Mr. SCIIEUER. On that last question, did the idea come from the OEO or did it come from the indigenous PTA? Mr. BEm~Y. I think the idea came from the national PTA confer- ence as their offer of effort in the war on poverty and particularly in the areas of education. Mr. SCHEUER. So, it came from outside OEO? Mr. BERRY. It caine from outside of OEO, yes. Mr. SCHEUER. It seems to me that one of the great purposes- Chairman PERKINS. The Chair has recognized the gentleman from Iowa. I will recognize you next Mr. Scheuer. Mr. SOHEUER. I am sorry, Mr. Chairman. Mr. SOHERLE. Thank you, Mr. Chairman. Mr. Johnson, I would like to probe a question that particularly concerns me as to how the OEO obtained the voluntary cooperation from local attorneys to participate in the legal services? Did you do this by threatening to bring in Government lawyers if the State bar associations were dragging their feet? Mr. JOHNSON. No. We couldn't bring in Government lawyers. We work strictly, as everything in community action, via making grants to local community action agencies in locally sponsored and formed entities. Mr. SCHERLE. I noticed in a release I have here in front of me that on December 21 the Lower East Side Mobilization for Youth was setting out to find clients. Now, are these ambulance chasers that are assigned to this Mobiliza- tion for Youth-are they Government employees? Mr. BURTON. Will the gentleman yield? As a member of the bar, I would like you to find a more delicate way to describe my colleagues. [Laughter.] Mr. SCHERLE. Mr. Johnson, are these lawyers Government-paid or are they local attorneys in a vicinity where these legal services are located? Mr. JoHNsoN. Mobilization, for Youth is one of the local communi- ty action agencies in New York City that has a grant for a legal serv~ ices program. The i~wyers receive their pay and are supervised by the board of Mobilization for Youth. The Mobilization for Youth does receive funds from OEO to pay a portion of the salary of these lawyers, yes. PAGENO="0110" 948 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. So~nRI~n. Mr. Johnson- Mr. JOHNSON. Could I complete the answer to the last question? I wanted to go on further to point out that these were members of the New York bar, most of them were residents of New York City, and they were employed by a local board composed of primarily New York .~ lawyers. Mr. SCHERLE. How about those that are serving out in the suburban areas or in other States outside of New York? Are they permanently assigned as referrals in legal services, or are they just part time? Mr~ JOHNSON. Most of the attorneys employed in our programs are employed full time, but. they are employed, again, not by us, but by a local board. Mr. SOHERLE. Who is the local board? Mr. JOHNSON. The local boards are the local boards of the legal serv- ices agencies. Mr. SCHERLE. That are paid by the Government? Mr. JOHNSON. Oh, no; these are private attorneys, representatives of the poor, judges, law professors, and other representatives of the com- munity. Mr. SCHERLE. Does anybody from the CAP sit in on that as a board member? Mr. JOHNsoN. Pardon me, sir? Mr. SCHERLE. Does anyone from the CAP sit on this board as a board member? Mr. JOHNSON. In some of our programs there will he one or more representatives from the comnmnity action boards on the legal services board. Mr. SCHERLE. I have an article in front of me which indicates that Mobilization for Youth is defending 10 persons who staged a protest at St. Patrick's Cathedral against the war in Vietnam. Is this true? Mr. JOHNSON. I believe it is true. I think I have read the newspaper account. Mr. SCHERLE. Let me read this a little further. On January 22, police arrested 23 men and women for unfurling antiwar posters in St. Patrick's during a Sunday morning mass. Ten have applied to your agency for legal aid and the others are defended by a private attorney. Now, is this true? Mr. JOHNSON. I have to go by the newspaper account, the same as you. Mr. SCHERLE. I should think you would be familiar with what goes on under your jurisdiction. Mr. JOHNSON. There are 200,000 cases a year and I couldn't know what goes on in each one of them. I would be glad to obtain and supply the details of that particular case. Mr. SOIERLE. Fine. I would like to have that. (The information follows:) MOBrLIZATION FoR Yourn REPRESENTATION OF DEMONSTRATORS AT ST. PATRICK'S CATHEDRAL This is an answer to the inquiry regarding the role of an OEO funded Legal Services Program, Mobilization for Youth, in the representation of demon- strators at St. Patrick's Cathedral. PAGENO="0111" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 949 Mobilization for Youth is representing 11 of 23 defendants, none of whom are being charged with the commission of a felony. The breakdown of income is as follows: (a) housewife; combined income $50 per week; (b) $3Operweek; (c) $15-$3Operweek; (d) $50 per week; (e) $19 per week; (f) $20-$25 per week; (g) unemployed; (h) $60 per week; (i) $18 per week; (j) & (k) married couple, combined income of $80 per week but a very large medical debt. The newspaper reports which indicated Mobilization for Youth is representing students and the wife of a Brooklyn college professor whose earnings were approximately $25,000 per year is not true. They have private counsel. The trial is set for September 25. All parties before a court of law are entitled to an attorney no matter what the charge may be, if equal justice is to be meaningful. The Legal Services Pro- gram seeks to promote this concept by insuring that those people who cannot affOrd a private attorney are provided legal counsel. Since the above parties meet the indigent standard, Mobilization for Youth does not violate any of their contractual obligations under which .they received Federal funds. Mr. SCIIERLE. Another article I have here. MFY has instant law advice for unhip hoods. Mr. Si-nuvvn. For what? Mr. SCHERLE. TJ'nhip hoods. Mr. SHiuvnn. What does that mean? Mr. SCHERLE. Mr. Shriver. I should think you would know. Mr. SHRIVER. I don't-because I guess maybe I am an unhip hood. Mr. BURTON. You would never get by in my neighborhood with all of my hippies. [Laughter.] Mr. SCHERLE. My question is hoodlums and others who get in trou- ble with the law are being given around-the-clock legal advice from legal services, and they are supplied with cards stating "what are your legal rights?" Do you supply these cards? Mr. JOHNSON. We do not supply cards. Mr. ScIIERLE. They are funded and this is still under your juris- diction. Do you give cards to these people letting them know what their rights are. "You have the right to remain silent, you have the right to a lawyer; If you cannot afford a lawyer and you need legal advice, call Mobilization for Youth." Mr. JorrNsoN. That is correct. Mr. SCHERLE. What's the idea for these cards? Mr. JOHNSON. `Well, this is just one element of an entire community education program that is run by Mobilization for Youth. Community education programs are run by many of the legal services programs, advising not just what are your rights upon being arrested, but your rights as a consumer, your rights as a tenant, your rights in many other phases of life. Mr. BURTON. Will the gentleman from Iowa yield for a very brief question? Mr. SCHERLE. No, not at this time. I only have 5 minutes. Mr. BURTON. I am requesting you get another 10. Mr. ScIrai~LE. One more question. The Office of Economic Oppor- tunity has created the impression that a riot is necessary as a first step for pover~y-stricke.n areas to obtain Federal help. PAGENO="0112" 950 ECONO~C OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. BERRY. That is absolutely wrong. Mr. SOHERLE. Would you lik~ me to continue? Mr. BERRY. You may. Mr. SCHERLE. "Mr. Young said, most of the necessary legislative devices to fight poverty have~been established and the ba~ic need now was for providing money." Mr. MEEDS. Mr. Chairman, would the gentleman from Iowa supply the source of his information? Mr. SCHERLE. Yes. This is by-"A National Urban League said last Thursday"_-dated June 9, out of Washington, "Young decries"- Mr. MEEDS. Is it an article from some newspaper? Mr. SCHERLE. Do you want to pass it over to him before my time expires? Mr. BURTON. I object. I just think the gentleman from Washington would like you to cite the source, so as to be able to identify it as a whole, as part of the basic for your questions. Mr. SCHERLE. It is by the World-Herald, dated' June 9, 1967, and I want to ask a question. Mr. Shriver, can you tell me how many outhouses the OEO has counted in New Mexico? [Laughter.] Mr. SHRIVER. Could I respond not only to that, but the previous newspaper article quoting Whitney Young? On my time-not your time. Mr. SCHERLE. I thought you might give me a figure- Mr. BURTON. Mr. Chairman, I ask unanimous consent the gentleman from Iowa's time be extended another 3 minutes. These penetrating questions are most useful to us, I think. [Laughter and applause.] Mr. ScnEI~u~. I would like to know also how many OEO members are here this morning. Would you raise your hands? [Show of hands.] Mr. SCHERLE. Who's running the store? Proceed, Mr. Shriver, if you wish. Mr. SHRIVER. Thank you. In the first place, the quotation that Con- gressman Scherle is quoting from the newspaper came on page 22 of a 30-page statement that Whitney Young made before the Senate last week. It was in this statement that Whitney said that the OEO has been a. spectacular success, and after talking about that for 22 pages, he observed that in his judgment OEO had not been financed as much as it should be, the result of which was that in some cases in his judg- ment, that in some cases, because of lack of financing OEO had had to respond to riot situations or to emergency situations rather than being able to adequate finance programs in advance. Now, that was his own opinion. Let me say, as Ted Berry just said a minute ago, that we feel that is a mistaken judgment. Not a mistake necessarily that OEO has been adequately financed, but it was a mistaken judgment that OEO as a matter of policy responds just to a riot situation. For example, cities in which there have been no riots have gotten just as much money as cities in which there have been riots. Cities in which there have been riots got more money in many cases before the riot than they got after the riot. There is no cause a.nd effect relation- ship in terms of the money that OEO has expended for any of these purposes. PAGENO="0113" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 951 In any event, the illusion which was in the newspaper involved one paragraph on page 22 of a statement which was totally the opposite of that particular point. I just thought I would get that clear and we will be happy to supply the entire testimony so you can put it in the House side, if you would like. Chairman PERKINS. Mr. Scheuer, will you yield to Mr. Burton? Mr. SCHEIJER. Yes. V Mr. BURTON. Will you please supply in your response to the gentle- man from Iowa the response from the mayor of New York, which is one that he supports or opposes? Mr. JoHNsoN. I would be glad to do that, too. (Mayor Lindsay's prepared statement and Whitney M. Young's testimony follow:) PREPARED STATEMENT OF HON. JOHN V. LINDSAY, MAYOR OF THE CITY OF NEW YORK Mr. Chairman, members of the Committee, I welcome the Opportunity to talk with you about the most important problem facing our City: the plight of almost 2 million men, women and children locked in poverty. The scope of the problem can be spelled out in some figures. The number of poor people in this city is as large as the entire population of Philadelphia. New York City's anti- poverty programs operate out of more than 1,200 locations throughout the five boroughs. Close to 300 organizations and delegate agencies are involved in running these programs. New York City has as many school children as there are people in Baltimore. Half of these children, a number equal to the popula- tion of Cincinnati, need special programs and services. I hope that you will have the opportunity during the next two days to travel around the City to test for yourselves both the dimensions of the problem and our commitment to it~s solution. V As a Member of Congress I gave strong support to the 1984 anti-poverty legis- lation. Since becoming Mayor, my perspective on uitan legislation and urban policy has changed. However, my continued full support for the concepts and programs that were embodied in the legislation of 1964 has not changed. It has been confirmed. V V In those early days of the war against poverty, the strong support which the program had in Congress was not fully or enthusiastically shared in all cities and communities. Many city administrations were concerned that the com- munity action program might turn out to be a threat to the exercise of their traditional authority. Today in New York City and in several of the largest metropolitan centers in the country the situation is reversed. In 1967 mayors and urban administrators are among the program's most enthusiastic and knowledgeable supporters, while many in Congress seem to be losing some of their earlier faith in the principle of community action and local initiative. The conduct of the war against poverty has been dogged by undue expectation. Many people thought that success would come almost overnight, and were dis- appoimted when the quality of the slum neighborhoods did not change as fast as they expected. Clearly, we have had our frustrations. Some community organizations find it difficult to develop administrative skills which meet the exacting standards of inspectors and auditors. In many communities, misunderstandings about the nature and purpose of the program, as well as distrust of the intentions of estab- lished institutions, including City Hall, slow the pace of development. In addi- tVlOfl, the anti-poverty program-with its multiple funding and the major role assigned to delegate agencies in the community-poses unique administrative problems. Here in New York City, we are doing something about the obstacles that are hobbling performance. We have completely re-fashioned the administrative struc- ture of our antipoverty program. We have developed more effective procedures to streamline operations. Yet much remains to be done to ease the flow of paper and money from funding sources through the City's administrative and fiscal 80-084-67-pt. 2-8 PAGENO="0114" 952 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 system to the programs and the people who need it. But none of these problems has weakened my commitment to the philosophy underlying the 1964 legislation, nor for any and all efforts to widen the range of innovation and creativity that give it meaning and strength. Here in New York and in communities across the nation we have found the means embodied in the 1964 legislation to offer indispensable resources for our efforts to halt and reverse the process of decay. These resources include not only money but new and imaginative approaches to problems which do not yield to old and traditional patterns of service. It is all too easy for an administration to be so enmeshed in the tasks of daily. management that it is unaware of the rigidity or irrelevance of its services to its constituents. Innovation comes painfully to a bureaucracy. The war on poverty is a combination of catalyst, goad, and educator, moving inertia-bound bureauracies to change their established ways of doing business. As Mayor of this city, re- sponsible for an operating budget of over ~5 billion and for a payroll of 300,000 employees, I welcome the innovative force applied to the New York City govern- mental machinery by the anti-poverty prograim Among the most significant effects of community action programs have been the changes that they have sparked in many established institutions-in and outside government-changes that have given new meaning to the work of these agencies. Such changes have created new job titles, provided areas with services formerly unavailable, and altered the manner in which traditional services have been provided. For example, community pressure has lead to the creation of new career lines for para-professionals both in the health services, and as teacher assistants and guidance assistant in the educational system. A community group, after surveying the health needs of the Lower East Side, found no adequate services within a wide area and convinced the City's Health Services Administration, the New York LTniversity school of medicine, and the Dept. of Health, Education and Welfare to jointly develop and sponsor a neigh- borhood health center for the community. Certain community action programs across the City, working with the Vera Foundation and the Courts have had prisoners on bail released directly to them. In each of these instances the pressure of communities organized in the war against poverty led to the improvement in the services provided by municipal agencies. Such change in our way of doing things is vital, and the community action program must retain its vitality as a source of encouragement and support for innovation-the forward edge of a national drive to make our institutions conform to our aspirations. Such institutional change can only develop if maximum flexibility in the development of programs is preserved. The early planners recognized that there was little certainty about the kind of change that was needed. They responded by writing into the federal legislation aminimum of program restrictions, leaving it to the localities to experiment with the money available and to develop the responses most suitable to their particular needs. Present attempts to restrict the flexibility of the program by curtailing local option and substituting mandated top-down planning are, in our judgment, misdirected. It is unlikely that the experience of 26 months under one of the most am- bitious pieces of domestic legislation ever enacted can provide sufficient evi- dence to determine which segments of that legislation are most effective. We are learning much about the causes and effects of urban poverty, but we do not know enough to determine the ideal "mix" of different community action programs. It would be premature to assign specific priorities to programs within the community action framework. Moreover, there is a growing awareness in the nation of the wisdom of de- veloping greater decision-making to the localities as a means of developing new procedures. From city to city problems differ. The community action program stimulates each city in the nation to analyze the problems of its poverty popu- lation, to mobilize and choose among available resources and to mold the sepa- rate components into a comprehensive program suited to local needs and con- ditions. The fundamental responsibility for decision-making is local. Here in New York City, we are embarked on a wide-ranging program of decen- tralizing the decision-making process and widening the range of participation. We are doing it in the areas of public health, recreation and education. In the anti-poverty program, we are building community corporations in each of New PAGENO="0115" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 953 York's 27 designated poverty areas. These corporations will plan and coordi- nate community development programs for their respective areas. One of our aims is to build into the governmental process the constant pressure for change which arises from communities in the City dissatisfied with the level of services provided by municipal agencies. To curtain the options open to the localities is to deprive community participation in government of any practical ~signiflcance, thereby depriving the governmental process of this vital force for innovation and change. We strongly urge you to preserve the voice of the neighborhoods in the use of community action funds. Earmarking of funds for community action is doubly harmful. It not only inhibits further experimentation by freezing the present range of programs, but also discourages active participation of the community by limiting sharply the role that it can play. To enable the municipal government to respond most effectively to the demands generated in the neighborhoods, the City must mount a coordinated effort by all the agencies directly involved in the quest to provide full opporturnity to the poor. We have recognized this need by establishing the Human Resources Ad- ministration. It groups together the following agencies: The Welfare Department. The Youth Board. The Community Development Agency-responsible for administering anti- poverty programs under the policy guidance of the Council Against Poverty. The Manpower and Career Development Agency-responsible for all train- ing, job development and placement services. Arid the Office of Education Liaison-the link between the city administra- tion and the Board of Education. For the first time this structure will allow the City to develop and apply a city-wide strategy for human resource development. By placing the various departments and agencies under a single Administrator, we shall have a better chance to make program objectives prevail over bureaucratic divisions. But capability is more than program concepts and administrative blueprints. It is people who can translate good ideas into effectFs~e performance. New York City has been fortunate in attracting topflight talent from here and around the country to do the job. We could not have found a better man than Mike Sviridoff to run the Human Resources Administration. Coming out of the community action agency in New Haven, where be made a national reputation for himself, he in turn has brought in some of this city's and country's leading experts and administrators to fill the key positions in this new organization. Fred Hayes, our budget director, came to us from the federal government and is reshaping our budget system in terms of the problems and needs of today. An executive in one of the country's finest foundations, Carl McCall is a dynamic new personality who, as chairman of the new Council Against Poverty, has added a new dimension of leadership to this volunteer policymaking body. In the short span of eight months, this Council has become a powerful force in the building of an effective program of human resource development. The program priorities we have set ourselves are: jobs, education, with special emphasis on early childhood development; a social service system that supports these opportunity-focused programs; and maximum involvement of the com- munity in all human resource programming. Any effort to bring an end to poverty would be futile if it ignored the potential contributions of the education system. The pressures of community groups, many originally mobilized by the community action program, have led to general recognition of the need to decentralize the administrative structure of the Board of Education. Such decentralization will lead, we hope, to a closer mesh- ing of the needs of children with the content of their school programs. The distinguished President of the Ford Foundation, McGeorge Bundy, has agreed to serve as Chairman of the Panel, which will be advising me on a decentraliza- tion proposal plan which I must submit to the New York State Legislature in December of this year. But the central task of the city is to slow the climb of the welfare spiral by providing expanded and more effective job training and employment opportu- tunities. Almost 75% of the city's proposed Human Resources budget for 1967/ f18-$729 million-out of a total of $1 billion $15 million goes for Welfare. Even more significant is the cost to the City in lost taxes and income that would otherwise be generated if many of those on welfare were qualified for PAGENO="0116" 954 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 full employment. Only 6% of New York City welfare recipients are either unemployed or underemployed due to lack of skills. An additional 15% are aged, sick or disabled. The great majority of welfare recipients-almost 400,000 people-are mothers and children. This is not only the largest but the fastest growing segment of the welfare population. It is among the 98,000 mothers in this group that we believe we can achieve the most telling results with our strategy-if we can get the necessary resources for expanded day care and training programs. The trouble is that the resources available for opportunity programs are dis- proportionately small when compared to the cost of welfare. And because wel- fare payments are mandatory, budget cuts in the human resources area invariably and ironically hit the opportunity programs, which are the key to the reduction of the welfare rolls. V We simply must make more funds available for opportunity programs, or for- feit our chances of getting off dead center. The training of a welfare recipient in skills that can make him self-sustaining is an investment in the future, not a cost. To illustrate the effect of moving an individual from the welfare to the employ- ment rolls, we need only look at one fiscal fact: the tax yield to the city from the service and manufacturing industries for each employee is in excess of $300. Thus, if only 10,000 of New York's current welfare population of 600,000 were to become gainfully employed, it would mean an increase of $3 million in the city's tax returns-as well as a significant reduction in the welfare budget. There is no question that, given the opportunity to enter training, many of these women will be able to land jobs. We recently graduated a class of 108 Welfare women from a training course in basic office skills run by the Port of New York Authority. Within a few days of their graduation, 104 of these women had been offered jobs-more than 80 of them in major companies, among them the Chase Manhattan Bank, the Consolidated Edison Company and the Union Carbide Corporation. Before graduation these new office workers were receiving a total of $255.OOf) in public assistance each year. In some cases, the Welfare Department will have to provide continued assistance in order to budget for their work-incurred expenses. We estimate that this additional aid will cost no more than $50,000 a year. Thus the government may save $200,000 a year for a one-time invest- ment of $970 per person in training. This does not take into account the taxes that will be collected from these new wage earners: an estimated $30,000 a year directly, and some $70,000 indirectly as a result of their productive activity. This success was made possible by meshing the operations of the Welfare * Department and the Manpower Agency under the Human Resources Adminis- tration. To duplicate and expand on such results we need more resources. Mothers cannot acquire job skills, let alone go into full time employment, until they can be assured that their children are receiving proper attention. We must expand our day care program so that more mothers will be able to take advan- tage of job training programs. The City presently operates 93 Day Care Centers for about 7,000 children, many of whose mothers are employed, 6,000 children are on the waiting list. It is estimated that triple that number could use day care services if they were available. By increasing the day care program, obtaining federal approval of our proposed incentive programs, developing new techniques, and, most important, securing the necessary resources to invest in training, this success can be multiplied many times over. The key to the achievement of maximum effectiveness in equipping people with job skills through programs such as those discussed will be our ability to measure the impact of our programs with reasonable accuracy. This year. for the first time, New York City has a budget that will enable us to undertake a proper analysis of the cost effectiveness of various manpower training programs. This is vital, for our resources are sharply limited, and an effective community action program will greatly increase the number of poor that can be brought into the development process. and anxious to take advantage of training programs. We are working up a program budget for the manpower training system that will enable us to weigh the impact of various program "mixes" and begin to determine guidelines for the most effective and efficient use of resources. For example, we hope to be able to make informed decisions on the relative emphasis we should place in a given training program on such components as recruitment, basic education skills, special job-related skills, job placement, or counseling. PAGENO="0117" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 955 F'rom this budget analysis we seek to develop accurate estimates of the cost to train individuals for various skill levels. For each level of acquired skills we hope to be able to provide the cost necessary for the appropriate training. With these tools we* will be able to determine the cost of reducing the welfare rolls by any given figure. This budgetary system should also help us in dealing with the classical con- filet between short-term and long-term goals. Were our resources unlimited, this would be only a minor problem. But they are not, in the starkest terms, the issue is whether to center our efforts on educating the yonug for the future, or on training adults presently at an employable age. Because we can ignore neither group, and have no means now of making such a judgment, both groups receive partial and inadequate attention. An effective program budget may allow us to develop some idea as to the relative effectiveness of a dollar if spent on a child's education or on an adult's .training. Such management tools are essential as we seek to maximize our resources in the Cit~r's war on poverty. At present, the process is far from sophisticated. We have only a first approximation-but it is a start-a base from which we can begin. I hope and trust that what you see in New York as well as the evidence gathered elsewhere, will serve to demonstrate the essential soundness of the 1964 legislation. No doubt this law, like any other, is susceptible to refinement and improvements in the light of experience. But the range for local initiative must be rntaintained and the resources for locally developed programs increased. We have re-kindled the hopes of those who had given up hope. We have launched a program that can bring dignity and grace to the mean and beaten lives of millions. We are embarked on a war in which victory is as indispensable as on any battlefield. We must go forward. Thank you. TEsTIMONY OF WHITNEY M. YOUNG, JR., EXECUTIVE DIRECTOR, NATIONAL URBAN LEAGUE, BEFORE THE SUBCOMMITTEE ON EMPLOYMENT, MANPowER, AND POVERTY OF THE COMMITTEE ON LABOR AND PUBLIC WELFARE, U.S. SENATE, ON THE WAR ON POVERTY, WASHINGTON, D.C., JUNE 8, 1967 Mr. Chairman, members of the committee, my name is Whitney M. Young, Jr. I am the executive director of the National Urban League. The National Urban League is a non-profit, charitable and educational orga- nization founded in 1910 to secure equal opportunities for Negro citizens. It is non-partisan and interracial in its leadership and staff. The National Urban League has affiliates in 82 cities, ~in 33 States and the District of Columbia. It maintains national headquarters in New York City, regional offices in Akron, Atlanta, Los Angeles, New York and St. Louis, and a Washington Bureau. A professional staff of 800, trained in the techniques and disciplines of social work, conducts the day-to-day activities of the Urban League throughout the country, aided by more than 8,000 volunteers who bring expert knowledge and experience to racial matters. The National Urban League is deeply grateful for your invitation to appear before the Committee today in order to add to your body of knowledge the information and evidence we have accumulated over the years as experts in the area and on the subject now before you-the war on poverty. In addition to testifying today, I am happy to submit to the Committee, as per its request, a supplementary report prepared by the National Urban League reflecting the experiences and observations of the war on poverty of our affiliated local Urban Leagues throughout the country for inclusion in the record of these hearings as you see fit. I want to make it clear at the outset that as a principal spokesman for massive effort, which the Urban League called for in proposing a domestic Marshall Plan several years ago, I am strongly in support of the war on poverty and strongly opposed to any dismemberment of the Office of Economic Opportunity which will tend to weaken the massive effort. This does not mean that I have no criticism to voice, but that my criticism is directed, not to the structure of the Office of Economic Opportunity, but to the scale on which the war on poverty is being conducted, a scale still far too limited to do much more than act as a palliative. When the war on poverty was launched in 1964, it was estimated that there were some 32,000,000 poor people in this country in serious need of aid PAGENO="0118" ~56 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 if they were to break through the cycle of poverty. No one, today, has definitive figures on what the reduction in the total poor has been in the short span of two- and-a-half years, although it is estimated that the war on poverty has affected the lives of some 9 million people. William Pitt once said that "poverty is no disgrace, but it is damned annoying." This is no longer the case. Poverty is both a damned annoyance and a national disgrace Americans are no longer willing to ignore. It is intolerable to find a fifth or more of the nation's population living in poverty while the remainder What is clear is that in that short period of time, we have demonstrated that the job can be done; we have established the usefulness of a broad battery of innovative techniques for doing the job; and we have alerted the conscience of the richest country in the world to the flat and unalterable necessity to do the enjoy the highest standard of living in the world. It is this contrast-between the existence of widespread poverty in the midst of an affluent plenty-which job. This is no time to ponder the dismemberment of the Office of Economic Oppor- lunity, both the focus and the format of the effort. The OEO has, on the whole, done a spectacular job. There is no doubt in my mind it has a still more spectacu- lar job to do in the future. If there is anything wrong with the war on poverty it is that it has not yet reached enough people, has not reached all of those who, in the words of the President when he launched the war on poverty, "live on the outskirts of hope-some because of their poverty, and some because of their color, and all too many because of both." As a nation we have discarded once and for all the belief that poverty is an evil to be endured, one that has always been with us and always will be. We are bent not upon alieviating poverty, but on eliminating it and we must never lose sight of that goal. has spurred us, as a nation, into a concerted assault upon poverty as an institution. In achlition to the moral imperatives facing us, a real reduction in poverty would result in a tremendous growth in economic and personal output, an output far greater than any the world has ever seen. We have "a unique opportunity and ob- ligation to prove the success of our system; to disprove those cynics and critics at home and abroad who question our purpose and our competence." The United States is the only country in the world which can mobilize the financial and human resources which can truly eliminate poverty. But despite the readiness of the American people to pursue this struggle (a recent Harris poll demonstrates that 60 percent of the population is fully com- mitted to the effort) we appear to be suffering a loss of confidence. Cut-backs in the funding of present programs have been made, others threatened, and delays in the implementation of new programs have been recommended. Worst of all, it is being seriously proposed that the OEO itself be dismantled. It is ironic that at a time when the American people, for the first time in the history of this or any other nation, are fully prepared to undertake a total war on poverty that this trend to retrenchment should occur, that we should find our- selves fighting just to hold our ground. We are all impatient to see quick results. While it is commonplace in industry, when billions of dollars are spent on research, to accept a 10 percent return on the investment, yet in dealing with human beings, who are far more unpredict- able, we want 100 percent results and we want them immediately. We tend to forget that it is only a little more than two-and-a-half years since the Economic Opportunity Act was passed. It is important to consider in detail jus what has been accomplished in the administration of the OEO in that short span of time. At the very outset, the OEO was directed to come up with a complex series of new programs. It was directed to create, without delay, a nationwide network of Job Corps centers providing education and training for America's most dis- advantaged young people; a network of local community action agencies; a sys- tem of technical assistance to be transmitted via the States; a massive program of youth employment and work-study; programs for migrants in education, hous- ing and related areas; new kinds of loans to the smallest farm and business units in the country; a domestic equivalent of the Peace Corps; a work-experience program for welfare families that would get them off welfare; and a system of coordinating thepoverty-related actions of all Federal agencies. In the sheer scope of new program and the need to mobilize resources, no other legislation in recent memory begins to compare with the scope and range of the PAGENO="0119" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 957 economic opportunity programs. The initial challenge far outstripped any pre- vious legisla±ion in the fields of welfare, health or education. And the OIDO had to start from scratch. Ait the outset, there it was, a brand new agency, not even of Cabinet status, without an office, a staff, or even a system of traditional state and local institutions through which to operate. It was at work in an area where there was not even much formally known about the prob- lem it was to attack. In the succeeding two~and-a-half years, the OEO not only met the initial de- mand, but launched a broad range of additional programs. It conceived of and operated such pioneering programs las Head Start, legal services for the poor, neighborhood health centers, Upward Bound, Foster Grandparents and Medicare Alert. It was in a position to make its first multiple grants within two months after funding, which must surely have been a record for a program of such breadth and complexity. Within two years, OEO programs were in operation in more than 3,000 of the 3,132 counties of the United States. To date, it has made more than 10,000 community action grants to the 1100 Community Action agencies established in areas including more than 70 percent of the nation's poor. It is estimated that Head Start alone has reached 1.3 million young children; the Neighborhood Youth Corps, 900,000 young men and women. Neighborhood Centers have brought needed services to nearly 3 million poor. The Job Corps has provided vocational training for 60,000 of our most impoverished young men and women in 113 residential Job Corps centers. The Work Experience program has assisted nearly 150,000 adults, most of whom were on public assistance, by increasing their opportunities for future employment. Nearly 3,000 VISTA volunteers are in service in 48 States and the District of Columbia. 33,700 rural loans totaling more than $55 million have been made to the isolated rural poor. 224 institutions of higher learning have supported Upward Bound programs involving 22,400 students. And all of this has been accomplished with one of the lowest administrative costs of any Government agency now operating-about 3 percent-and with an administrative staff for both the headquarters in Washington and the seven regional offices of no more than 2600 people. The staff of OEO is approximately one-half that of the Small Business Ad- ministration. It operates with about the same number of people the Air Force needs to keep one single squadron of B-52's in the air. It is a staff 1/50 the size of NEW. Viewed objectively, no substantial apologies need be offered for results obtained within existing appropriations. The OEO has launched important programs with a speed unmatched by any Federal agency since the New Deal. What is needed is more, not less. Poverty is a cancer in our midst that costs $10 billion a year in cold cash In welfare expenses alone, plus $100 billion a year in lost opportunities, lost income and lost taxes. Under the impact of poverty in the ghettos, the tax-base of the cities is eroding and their fiscal management becomes increasingly difficult. According to estimates of the HHFA, the average cost per citizen for municipal services in a blighted area is $7 but the area pays back only $4.25; whereas in a good area, the average cost of essential services is $3.60 per citizen and the area pays back $11.30. Between 1953 and 1963, given the fiscal drain of low income areas and the in- creased demand for public services, State and local expenditures increased from $27.9 billion to $64.8 billion, an increase of 132.2 percent. At the same time, State and local government debt went from $33.8 billion to $87.5 billion and the fiscal pressures show no signs of easing. Any overall approach to the war on poverty must also include a soundly con- ceived and administered welfare system. The orthodox welfare system is sorely in need of overhauling. The humiliation and stigmatization engendered by stand- ard welfare procedures are bad enough. What is worse Is that the additional system of welfare payments condemns generation after generation to an un- broken cycle of poverty. Despite the 1962 amendments to the Social Security Act, less than half the States have enacted enabling legislation in conformity with them; the level of welfare payments from State to State varies radically; and most States fail to pay even the full amount specified by their own legislative mandates. As a result, in most States, any initiative in earnings is still taxed at a rate of 100 PAGENO="0120" 958 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 percent on the dollar; in many States, ADO regulations require a father to abandon his family in order to obtain necessary benefits for his children; and the overall level of maintenance is most frequently scarcely above subsistence so that all energies are absorbed in the simple act of staying alive. The basic solution lies in the adoption of an adequate plan for income main- tenance. This idea, considered radical before the advent of the war on poverty, is now being proposed by people as politically divergent as Leon Keyserling, former economic aide to President Truman, and Professor Milton Friedman, Barry Goldwater's economic advisor. It has also been endorsed by the President's Committee on Technology, Automation and Economic Progress, hardly a group of radicals. Given the diversity of plans under discussion, what they all have in common is the realization that a country as rich as the United States cannot tolerate the poverty that afflicts so many millions of people. Their advantages are obvious. No family would be deprived of the means for the basic essentials necessary to survival. By becoming a matter of right, like social security, a program of income maintenance would enhance the dignity of individuals and eliminate much of the stigma of welfare. By replacing the present welfare system, such a program, by transferring the responsibility of the Federal Government, would release millions of dollars of local funds to the cities for use in coping with the problems facing local governments. In the years of the farm crisis, the Federal Government did this for agriculture. In these years of urban crisis, we need a system that directs funds, not to the country at large, but to the points of greatest need, in short, to the large cities. The entire nation would benefit because the increased purchasing power available to the poor would be spent on goods and services, stimulating the economy and creating more jobs. With one exception, plans within the current welfare structure for turning welfare recipients into wage-earners are essentially fruitless. Current figures show that of the 7.3 million on the welfare rolls only about 50,000 fathers are potentially capable of supporting themselves and their families. The remainder are blind, aged, handicapped, children or mothers with young children. While some of the latter might become sources of family support, the questions remains whether they might not more usefully be encouraged to remain with their children. The only reasonable foci for substantial change within the overall group are -the 3.5 million dependent children of poverty-stricken parents. These are the ones who must, by every available device, be motivated and given the chance to break out of the cycle of poverty that has gripped their parents. They represent 4he only real possibility for substantially diminishing current welfare rolls under the present system. For the remainder, some system of income maintenance is essential to living in dignity and decency. But to return to the subject at hand. Quite aside from the moral considerations -that underlie the war on poverty, the eradication of poverty is essential to the welfare of the nation. J~obs are needed. Education is needed. Training and oppor- tunity are needed. Health care is needed. And every available means must be utilized in obtaining them. The OEO, in concept and form, is central to the effort. Those who oppose this year's amendments to the Economic Opportunity Act and, thereby to a continuation of the OEO in its present form are forced into a position where they must applaud the results while condemning the process. 1rhey would keep the programs, rename them, and obliterate the agency that conceived the programs and made them produce results. Opponents of the OEO tell us the war on poverty is in need of major redirection. Their proposal is to dismantle the agency by scattering its components all over Washington. In large part, they are the same people who in 1964 voted to kill the original Economic Opportunity Act by recommital, after first trying to crip- ple it with amendments; they are the same people who, in 1965, voted, to recom- mit the poverty amendments. Not only do they want to decapitate the OEO, but they also want to impose on the States half the cost of running such programs and the Neighborhood Youth Corps. Under 50-SO contributions which finally convinced us that Medicare was *an absolute necessity if everyone were to be protected. The important thing is to come up with a formula that works. Experience has taught us that 50-50 funding is not the solution. PAGENO="0121" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 959 If we believe the beginnings of the war on poverty have been auspicious, let us not dismember the program, but rather continue, enlarging it as need and demand dictate. As originally envisioned there was su.pposed to be a dramatic increase in funds for the war on poverty as programs mature. This was a rational approach based upon the recognition that it would take some cities and localities time' to gear up for action. Now there are nearly twice as many cities involved as at the outset, and given the slight increase in appropriations being sought this year, the net result represents an outright reduction in the level of funding per city. As a result we find ourselves in a position of having to run faster just to maintain our ground when the demands of the situation clearly dictate all-out effort. Opponents of the OEO would destroy the one Federal agency which serves as a spokesman for the poor. The alleged purpose of such reorganization is to promote efficiency by sorting out OEO functions among existing departments already dealing with similar problems-by putting all programs relating to education in HEW, for example, and all programs relating to manpower training in the Department of Labor, etc. Such a reorganization may be an attractive on an organizational chart, but not in practice. By dismembering the OEO, by lodging its programs in already high over- burdened bureaucracies, opponents of the war on poverty would reduce it to a series of minor, unrelated and ineffective skirmishes. One Washington wag has suggested that if dismembering an agency is the way to promote organizational efficiency, why limit the process to the Office of Economic Opportunity? Why not apply it to the most expensive operation in the entire Government, the Department of Defense? Since recruitment for the Armed Forces is basically a manpower problem, this line of reasoning goes, it should be turned over to the Department of Labor and the work of the Medical Corps should be turned over to the Public Health Service. The Continental Army Command should be transferred to the Depart- ment of the Interior; the fleet to the Maritime Administration; the food service to Howard Johnson's; the military airlift command to TWA; and the Signal Corps to A.T. & T. This is, of course, ridiculous but I hope it makes a point. It hardly seems that the best way to achieve results in the poverty program is to fragment program among existing bureaucracies which are already having difficulty administering the responsibilities they already have. This is not to say that there might not come a time in the future when some distribution of programs generated by the OEO among on-going departments might be indicated. Such considerations may well be appropriate at some future date-say, five or ten years after initial funding-or at a time when such program can be said to have been clearly established in practice and the public conscious- ness. But, again, it needs to be borne in mind that the OEO is just a bit more than two-and-a-half years old. It `is premature to consider reshuffling its obliga- tions and responsibiilties at this early and critical juncture. It should also be borne in mind that the OEO now administers only about 10 percent of all Federal program relating to poverty. In the view of the Urban League, to leave the OEO with less than a 10 percent responsibility for program in the war on poverty would be a grievous error. Destruction of the OEO would turn out to be the destruction of the most am- bitious, innovative and imaginative program the Nation has ever undertaken to help the poor become self-sufficient. Running such a program requires an organi- zation with the freedom to innovate and experiment in areas that cut across de- partmental lines. In any well-run program the ultimate authority must be vested in one individual. If the OEO were dismembered, who would supply the direction of the program? By killing the OEO, we would, for all intents and purposes, be turning our backs on the poor, sweeping the problems of the poor under the rug. We would kill the voice of the poor at the highest levels of gOvernment, and in so doing, regress to the administrative doldrums of earlier years when welfare was the: only way of life for those in poverty. The Office of Economic Opportunity is demonstrating that there are ways by which the poor can become self-sufficient, ways by which youngsters can be moved out of the poverty that has gripped their families. One of the major rea-~ sons for creation of the OEO, in the first place, with its community action compo- nent, was that the existing welfare bureaucracy, both governmental and private, PAGENO="0122" 960 ECONOMiC OPPORTUNITY ACT AMENDMENTS OF 1967 had for at least two decades been groping with the poverty problem with rather poor results. If anti-poverty funds were to be transferred into the machinery of the ortho- dox welfare system, it would be more difficult than ever to determine the suc- cesses and failures of the war on poverty. For whatever criticism one may have of the OEO, it cannot be said it doesn't have an open door for public examination, whether by Congress or the newspapers or the interested public. Part of the problem of the OEO results from the high visibility the OEO, itself, has given such problems as it has had. To turn anti-poverty funds back to the big departments might very well lessen the visibility of the poor. It would also ensure that we'd know less than we do not about the cost-effectiveness of the war on poverty. This might well ease the frustrations of some Congressmen and of that por- tion of the public which would prefer not to be reminded that poverty exists, but it certainly would not ease the frustrations of the poor themselves. We can- not pursue a policy of "out of sight, out of mind." Many of the economic opportunity programs are controversial, most particu- larly the community action programs. Much of the controversy arises from the fact that these programs are bringing people together, in communities across the country, who have never talked to each other before, people w-ho in many cases have never even been aware of each other's existence. This bringing together of community elements results in a catalytic action which inevitably produces some conflict and some turmoil, but the alternative to meeting at the neighborhood center is to meet in the neighborhood street where the action is more likely to be explosive than catalytic. The double value of the CAP program is that, on the one hand, it allo'v~'s for a level of experimentation which would be awkward, perhaps impossible, for established departments, and, on the other hand, it requires community involve- ment. It gives people a means of participation in the control of their own destinies through the historically established machinery for social change. To eliminate either aspects of the CAP program would be a serious matter. The established departments are unlikely experimenters and if people are not directly involved (despite whatever discomfort this may occassion.ally cause the politicians), their reactions will be manifest in more violent and non-traditional ways. It is better to have people petitioning through established channels than to have them throw- ing rocks at City Hall. Any long-range solution must continue to recognize the fact that there are two kinds of poverty to be attacked. There is the poverty of resources which we all recognize. And there is a poverty of culture which develops out of generations of neglect, of being beaten down and denied, not just things, but access to the knowledge of how to change things, how to make an impact on one's environ- ment, how to challenge the system, how to exercise an influence on the common course of communal affairs. Denied knowledge like this, people become overwhelmed by their own power- lessness and this gives rise to hopelessness, despair and apathy. As an ancient Greek philosopher once said, "the greatest crime against a man is not to deny him but to make him not even care." It was specifically to combat this poverty of culture that the community action programs were developed by OEO. Some of you may be familiar with Project ENABLE conducted by the National Urban League in cooperation with the Fam- ily Service Society and the Child Study Association and funded by the OEO. It was a great success. Perhaps its greatest achievement was in developing means and demonstrating ways to reach people afflicted by a poverty of culture. ENABLE dealt with groups of parents in 59 cities, parents who didn't under- stand the system, who didn't know how to petition in their own behalf or in behalf of their children, who before the advent of ENABLE were demoralized in the face of authority and incapable of pressing their own best interests with official- dom-incapable of speaking up at City Hall, or at the local welfare department or before the board of education. ENABLE demonstrated bow a community of parents can be mobilized when given an opportunity to exercise a real influence on matters affecting the welfare of their children. ENABLE explored many of the possibilities for traditional social welfare agencies to take effective action at the grass roots. It would be a disaster if such lessons were lost, such experiences denied those who need them. I hope that other agencies will study the ENABLE record and pick up on it and that, under no circumstances, will the ~Federal Government renege on its PAGENO="0123" ECONOMIC OPPORTTJNITY ACT AMENDMENTS OF 1967 961 commitment to programs of this kind. The community action program has proved that the concept of the participation of the people to be served is not only feasible, but a mw~t for effective government performance. The OEO has served as an unparalleled catalyst for the development of leader- ship among those who have been traditionally excluded from local decision- making. Because of the participation of the poor, hidden issues have been given high national visibility. The Administration, the Congress and the general public have yet to grasp the full potential of local community action. If we allow these programs to pass from the scene we shall have to invent something else to take their place. The current program is based upon local administration and initiative, certainly conservative ideas today. If we allow this kind of "1oca1i~m" to fail, what system will take its place? The OEO has been equally important in stimulating national discussion about more and more effective ways to combat poverty. It is only since the Economic Opportunity Act of 1964 that there has been serious, widespread discussion of such concepts as the negative income tax, the guaranteed annual wage and other plans of income maintenance as well as "community corporations" for low income areas. Much has been written, and still more has been said, about alleged admin- istrative failures in the OEO, and yet a careful examination of the record demonstrates a remarkable record of administrative success, obtained, more- over, in the face of unusual social and political pressures. Few pieces of legis- lation have involved such complicated administrative features. In no other program, Federal, State or local, has there ever been so much involvement of different public and private interests and resources at all levels. It could even be said that the manner in which the O'EO has brought the diverse resources and interests of a multitude of communities into focus upon the problems of poverty represents a high water mark in public administration. Few, if any, other programs in the field of public administration have re- ceived the volunteer and material contributions that have flowed so freely to the war on poverty. The administrative problem has been to find ways to effectively utilize this unprecedented wealth of volunteerism. As a partial accounting, 95,000 Americans have contributed volunteer services to Head Start, before long VISTA will have enlisted 30,000 Americans as part-time volunteers in their communities; tutorial programs have involved more than .30,000 volunteers, and volunteer membership on Community Action boards and councils numbers over 90,000. Local community action agencies have tended to have a consolidating effect on the hodgepodge of local jurisdictions. Statistics show that there are something over 91,000 separate units of government in `the United States today; whereas the 1100 community action agencies generally include not one but a group of local jurisdictions which produces a consolidating effect. From the perspective of the local level, the community action approach has made possible coordination of dozens of Federal program's where coordination counts the most. To mobilize the factual data necessary to fight the war on poverty, the OEO has collected and printed on a county-by-county `basis the information available on the economic and social characteristics of each of the more than 3000 counties in the Nation. Again, it has done all this at an administrative cost of no more than 3 percent and with a minimum of staff. In certain respects at least, administration of the OEO could be said to repre- ~sent an interesting study in the modern-day use of both old and new concepts in public administration. The record shows relatively few instances of misman- .agement or impropriety. Where such difficulties have arisen, Sargent Shriver, himself, has read the incidents into the public record with a candor few bureau- crats can be said to have matched. This is not `to say that the OE.O is beyond all criticism for it is not, but, by and large. its failures have been the result of the need to initiate program on too broad a scale in, perhaps, too much of a hurry. They are the faults of working with extremely limited resources in view of the problems the OEO is mandated to solve and `of laboring under the necessity to mobilize a major effort in an ex- ceedingly short period of time. The Economic Opportunity Amendments of 1967 are designed to tighten program control in a variety of ways to meet legitimate criticism without changing the fundamental character of existing program. These amendments PAGENO="0124" 962 ECONOMIC OPPORTIJNITI ACT AMENDMENTS OF 1967 would tighten administrative standards consistent with the needs of expanding programs; expand audit and fiscal responsibilities; would help in the elimina- tion of red tape and certain real barriers to efficient and cooperative efforts; and remove some of the maze of potentially inconsistent technical requirements with which local agencies are now sometimes saddled. Most importantly, the proposed amendments would seek a basis for expand- ing private participation, particularly in the area of job-creation. By and large, in the economy of this nation, people who ultimately escape poverty and again self-sufficiency will do so through employment which only the private sector can provide. My major overall criticism is that we, as a Nation, are, in effect, using a sling shot for a job that calls for nuclear weapons, applying band-aids in the curious expectaton of arresting an advanced cancer. Fundamentally, we have most of the necessary legislative devices available to use in the war on poverty. The basic need now is to apply these measures on a scale massis~e enough to actually solve the problems we're all concerned about. Two billion dollars per annum is not enough to do the job. Fifty billion dollars would be more like it. A further criticism i would like to place on the record is that all too often. given the limitations on funds, administrators of the war on poverty have been forced not to act, but to react. Too often, they have found themselves reacting to crisis, such as a riot in Watts, tending to convey the impression that rioting is a necessary prelude to eligibility for poverty war funds. It will be tragic if the impression is allowed to grow further that it is necessary to have a civil disturbance in order to get necessary attention to local problems and services, as so often seeems to have been the case. A further mistake, in the opinion of the Urban League, has been the almost consistent practice of channeling funds for programming purposes into entirely new local structures created for the purpose of receiving funds. These structures have most often been hastily conceived, hastily manned, and have generated great controversy over who was to make policy. I would hasten to add that many, perhaps most, of the established voluntary agencies needed challenging, needed to be forced to re-examine existing programs and to reconsider whether or not they were actually reaching the most disad- vantaged citizens, and whether or not their policy-making bodies were, in fact, sufficiently representative. But I am firmly convinced that it would have been better, rather than to have set up duplicating and competing new structures to carry out programs, to have established coordinating bodies which would have served as channels through which funds were advanced to existing agencies with their years of experience and know-how, providing only that they met necessary criteria as to program. clients served, and broad representation at policy levels as well as in personnel utilized. It is particularly interesting to note that the civil rights agencies, some of which have a half-century or more of experience in dealing with the problems the war on poverty is designed to attack, which have thoroughly representative boards, and the established confidence of the community, were given little, if any, of the poverty war funds at a time when, had they been, they would have been greatly reinforced in their positions through being able to implement some of the tangible programs sought within the ghettos. It would have served to increase their influence in channeling understandable anger and impatience which erupts in the ghettos into constructive rather than destructive directions. Paradoxically, as much as some of these agencies and organizations have been left out of the picture, they are still the first ones to whom the authorities turn when civil disorder threatens to replace realistic and orderly procedures, and the first ones upon whom extremists turn with the charge that they do not deliver on the meat, bread and potatoes issues fast enough. And yet there is no mistaking the expertise of such agencies. The Urban League's record, both in and out of the war on poverty as formally structured, is informative. On-the-job training prorrams conducted by Urban League affihi ~ttes in strategically located cities across the country, funded by the Department of Labor, have been a spectacular success. Iii 1966. some 4000 people received on-the-job training and subsequent place- ment through Urban League channels. In St. Louis a group of 350 trainees, the vast bulk of them "hardcore" unemployed before training, were earning $3000 PAGENO="0125" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 963 to $3500 per annum after training, and in New York City, total wages for a group of 172 trainees more than doubled after on-the-job training. Most of those receiving up-grading through such training represent departures from the welfare roles who have been made tax-producers in the process. In addition, routine day-in-and-day-out Urban League job placements, at no cost to the government, ran to about 40,000 people in 1966. At an average annual income of $4000 for such new jobs, this comes to $160 million annually in new and expanded national income. Our National Skills Bank, which opens up new jobs for Negroes and makes up-graded opportunities available to Negroes whose skills are being under- utilized-which is, again, operated without government funds of any kind- registered 39,698 people in 1966, made 28,506 referrals and 9,656 placements. Typical results include a young government worker who is now a $9,500-a-year nnalyst for a drug firm and an $85-per-week clerk who became a $120-a-week secretary; again, with an obvious rise in local tax payments. In one community alone, the earning power of the Negro community rose $2 million per year as a result of Urban League up-grading. In the summary, however, let it be, said that the immediate issue at hand in the war on poverty is clearly and simply the continued existence of the Office of Economic Opportunity as an independent agency. Those who would eliminate it would turn their backs on more than 30 million Americans who live in poverty and who look to the economic opportunity program as a way out of misery and human degradation for themselves and, most certainly, for their children. The Nation's promise to the poor as enunciated in 1964 is embodied in the OEO and to destroy the OEO would destroy that promise. In order to right the social wrongs of centuries, in order to lift the burden of poverty, we must now, in order to redress the balance of history, succumb to an excess of feeling, of courage, of caring and of decency. The time is ripe. The resources of a rich nation requires it. As a cause, the eradication of poverty has the sympathy and devoted attention of the American public. The future of a society that would call itself civilized is at stake. SUPPLEMENTARY REPOBT BY THE NATIONAL URBAN LEAGUE ON THE WAR ON Pov- ERTY PREPARED FOR SUBMIsSIoN TO THE SUBCOMMITTEE ON EMPLOYMENT, MAN- POwER, AND POVERTY OP THE COMMITTEE ON LABOR AND PUBLIC WELFARE, U.S. SENATE The National Urban League is pleased to make available to the Subcommittee on Employment, Manpower and Poverty of the Committee on Labor and Public Welfare, United States Senate, as per its request, the following report on the Urban League's nation-wide experience in, and observations of, the war on pov- erty for inclusion in the record of the Subcommittee's hearings as the Subcom- mittee sees fit. This report covers information supplied by 79 of the National Urban League's 82 local affiliates in cities1 in 33 States and the District of Columbia. The Na- tional Urban League also has regional offices in Akron, Atlanta, Los Angeles, New York and St. Louis serving all 50 States, the District of Columbia, Puerto Rico and the Virgin Islands, and a Washington Bureau. A total of 1,253 anti-poverty programs are reported in these 79 cities, of which 999 are funded by the Office of Economic Development, 253 by the Department of Labor, the Department of Health, Education and Welfare and the Depart- ment of Housing and Urban Development, and one by the Justice Department. For the purposes of this report, the National Urban League sees the war on poverty as including, not only programs funded by the OEO, but programs de- signed to alleviate poverty, funded by major Departments, as well. While we believe the material in this report to be of great interest it is not intended as exhaustive. Urban League executives reported on their communities in broad terms. In the field of education, programs covered in this report include: Head Start, Tutorial, Adult Basic Education, Upward Bound, Day Care, Work Study and miscellaneous other programs. With the exception of Upward Bound, some of these programs are funded by the OEO and some by HEW. Upward Bound is funded by the OEO only. 1 See Appendix I. PAGENO="0126" 964 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 In the field of employment, programs covered in this report include: Neighbor- hood Youth Corps, Job Corps, On-Job-Training, Manpower Development, Small Business Development and miscellaneous others. Small Business Development is funded exclusively by the OEO. Job Corps and On-Job-Training are funded in some instances by the OEO and in others by the Department of Labor. The Neighborhood Youth Corps, Manpower Development and some of the miscellane- ous employment programs are funded in some instances by the OEO, in some instances by the Department of Labor and in still others by HEW. In the field of family services, programs covered in this report include: Home- maker Service, Project ENABLE, Foster Grandparents, Family Planning and all other child and family services. Project ENABLE is funded by the OEO. The remainder are funded in some instances by the OEO and in others by HEW. In the field of health services, programs covered in this report include: Medi- care Alert and miscellaneous other health services, including pre-natal and infant care, reproduction and sex education, and community and school health services. Medicare Alert was funded by the OEO. Miscellaneous other health services re- ported were funded in some instances by the OEO and in others by HEW. In the field of housing, 16 cities report 29 programs funded by the OEO and ~ programs funded by the Department of Housing and Urban Development. A miscellaneous category covered in this report includes: Legal Services, CAP programs unspecified, City and Neighborhood Centers, Delinquency and Crime Control, Program Administration, Program Development, Migrants and mis- cellaneous other programs, variously funded. The 79 reporting Urban League cities reported on a total of 1,253 anti-poverty programs, all of which they were asked to rate as "poor," "fair," "good" or "excellent." Ratings were given on 815 programs, or 66 percent of the total.5 The nation-wide results were: Percent Poor Fair 19 Good 54 Excellent 22 Broken down by regions, the ratings were as follows: Region I ~ Total cities reporting programs Total programs reported Total programs as rated Poor Fair Good Excellent No rating Eastern 23 Southern 11 Mideastezu. 17 Midwestern 19 Western 9 Total 79 395 165 262 225 205 7 7 8 13 3 49 22 26 39 20 121 75 129 87 28 40 29 51 40 20 178 32 48 46 134 21,253 38 156J 440 181 438 I The eastern region includes Connecticut, the District of Columbia, Maine, Maryland, Massachusetts,. New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, the Virgin Islands, and Puerto Rico. The southern region includes Alabama, Arkansas, Florida, Georgia, Louisiana, Missis- sippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, and Virginia. The mideastern region includes Kentucky, Michigan, Ohio, and West Virginia. The midwestern region includes Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Nebraska, and Wisconsin. The western region includes Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, and Wyoming. 2 The total figures includes OJT program administered by the NUL, which is not and does not aPpear in the regional totals. The extent of programs under Urban League auspices, by region and by city. is contained in Appendix II. Table III, Appendix III, demonstrates the full extent of Urban League par- ticipation in anti-poverty programs which are not administered by the Urban League. Responses from the 79 cities show 321 instances of Urban League participa- tion on advisory committees and/or as consultants. Urban League executives serve as. members of CAP advisory committees in 28 cities and as CAP con- 2 A detailed discussion of the basis for ratings is included later In this report, beginning on page 6. A subsequent discussion of nine open-ended questions directed to local Urban League executives contains many insights into the determinants of effectiveness of given programs. PAGENO="0127" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 965 sultants in 25 additional cities, one as a paid consultant. Of the 321 instances of Urban League participation, 164 take the form of membership on advisory committees and 157 take the form of consultancies, of which 14 are paid con- sultancies. This pattern of participation represents a major volunteer contribution to the war on poverty. It also demonstrates the extent of Urban League interest and influence in the war on poverty outside of program directly administered by the Urban League. In addition, the breadth of participation of Urban League personnel demonstrates the unique vantage point the Urban League occupies on a nation-wide basis for observing anti-poverty program at close range in urban areas. Urban League local executives were asked to respond to a series of nine ques- tions3 relating to their experiences in, and observation~s of, the war on poverty. The following is a digest of their views and experiences as reported question by question. The first question dealt with the basis for rating poverty programs in Urban League cities, whether or not such programs were administered by the Urban League. Of the 1,253 anti-poverty programs reported from 79 reporting cities, no ratings were offered on 438 (or 34% of the total). In most instances, the failure to rate was due either to the fact that the Urban League executive felt the program had not been in operation long enough to warrant a judgment, or that there was insuilicient data available to permit a fair rating. Making ratings was further complicated by the fact that in some cities pro- grams have been in existence for only a short time because of delays in funding and because of various conflicts which prevented programs from getting under- way. Some such conflicts were among CAP board members, particularly in con- servative communities where there tends to be a resistance to accepting federal funds, federal direction or "handouts." Delays in funding are also traced to red- tape at County and Regional OEO levels, which frequently leave communities with a feeling they are being required to "hurry up and wait." In all, 815 programs were rated. It should be stressed again that Urban League executives were not asked to restrict themselves to OEO programs but to report on all anti-poverty programs funded by the Federal Government. Again, the na- tion-wire results were: Percent Poor Fair ~- 19 Good Excellent 22 Within each of the National Urban League's five geographical regions there is a range of ratings similar to the cumulative ratings above but there are some finer points that need to be mentioned. It is interesting to note that even such a widely acclaimed program as Head Start, heavily rated as "good" and "excellent," is occasionally rated "poor" or "fair," demonstrating that even the best of programs can falter in a given com- munity depending on local circumstances. In Marion, Indiana, for instance, where Head Start is rated as "fair" the problem cited is one of less than fully qualified staff, demonstrative that there is clearly a need for intensive staff training for even the most highly regarded of programs to be successful. The Marion Urban League further attributes the "fair" rating to a lack of professional workers and the inability of the workers involved in the program to develop meaningful relationships with minority groups, and a tendency for staff to be patronizing toward the poor. In Battle Creek, Michigan, there is a feeling that Head Start lacks sufficient parent participation and that the Neighborhood Youth Corps, which is generally rated "good" or "excellent" in Urban League cities, lacks sufficient funds and sufficiently creative and/or challenging work experience for young people. At the other end of the spectrum, Massillon, Ohio, reports that 75 percent of the children who were in Head Start are now achieving satisfactorily in Kinder- garten. Springfield, Ohio, reporting on Upward Bound describes it as excellently administered with 20 of 40 seniors planning to enroll in college and a local pro- gram underway to raise scholarship funds. Tulsa, Oklahoma. reporf~d all programs as "good" but added that a lack of funds and persoiinel limit the scope of programs there. Cincinnati, Ohio indicates ~ See Appencix IV. PAGENO="0128" ~66 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 that those programs which received "poor" and "fair" ratings did so because staff was poorly trained, supervised and directed. (This illustrates the need for professionally qualified supervision and a need for in-service training on an on- going basis.) The second question asked of Urban League executives was, "W1u~t results Itave been achieved in relieving poverty in your community?" It is fair to say that the overwhelming proportion of 39 Urban League cities reporting believe that anti-poverty programs, even where they are extremely effective, have only scratched the surface. At the outset of the anti-poverty pro- gram in 1964, it was estimated that there were 32,000,000 people in this country. No one has definitive figures today on what the reduction in total poor may have been but it is obvious to all observers that in two-and-a-half years while a pro- gram that has been begun demonstrates a viable format for ultimate success, it must be greatly expanded if it is to truly eradicate poverty in this land. This is the message from both large and small communities. For example: (1) In Omaha, Nebraska, the Neighborhood Youth corps is effective but 1t reaches only 500 out of 5000 eligible adolescents. (2) In Los Angeles, California, the Urban League executives reports that fighting the war on poverty gives one the feeling of "standing still while necomplishing something." In Los Angeles, the problem is greatly compli- cated by the constant influx of immigrants, so that while anti-poverty workers are aware of helping a significant number of individuals, the rate of increase in the total requiring help leaves them with the feeling of being 4'on a treadmill." (3) In Cleveland, Ohio, the Urban League executive reports that "pov- erty is more acute" now than it was in 1964, which, in this case, is to say that the gap between the "haves" and the "have-nots" is widening. The nverage annual income for families in the Hough section of Cleveland is not only relatively less than it was five years ago but is actually less. Need- less to say, the contrast between the circumstances of those living in Hough and those in surrounding communities is greater than ever in this affluent society. (4) In Phoenix, Arizona, it is reported that the war on poverty has had only a "trivial" impact on income. (5) San Francisco, California, reports only "minimal" results. (6) In both Birmingham, Alabama, and Memphis, Tennessee, a mood of "too little, too late," is reported in relation to the magnitude of the problem. Other cities report a feeling that the anti-poverty program is best summed up as demonstrating "more promise than performance." On the other hand, there is general satisfaction with MDTA and OJT programs, the latter of which rare funded in given instances by either OEO or the Department of Labor, be- cause they are seen as definitely relieving poverty. To a lesser degree, the em- ployment of sub-professional workers is considered to be having an impact on Income levels. Other cities report that results achieved by the war on poverty depend on the nature of the agencies involved in the CAP program. For example, if there is more concern with riot prevention than with solving the problems of the poor, little real gain is to be expected. One city reports that while the educa- -tion and manpower programs are very successful, the community organization effort has failed because of a riot-prevention approach. Some cities, notably Warren, Dayton, Springfield and Columbus, all in Ohio, veport an increase in employment and the impact of a variety of programs. By contrast, cities like Cleveland, as noted feel that poverty has become more acute. In the Mid-Eastern Region, which includes Ohio, 33 percent of the 17 cities reporting feel that there have been no significant results in the war on poverty or that the results have been limited. Another 33 percent of the same 17 cities feel that the results are meager compared to the immensity of the need. As noted above, both Birmingham and i~Iemphis reflect a mood of "too little" and "too late." In sum, the reports indicate that the results achieved in relieving poverty, while notable in many cases, constitute only a beginning. Unless this nation is committed to an all out effort over an extended period of ten to fifteen years, at minimum, with top priorities established for anti-poverty programs, the war on poverty will not succeed. In fact, the results may well be disastrous beyond our worst expectations. To arouse the hopes of the poor for an escape from poverty, to set in motion programs ostensibly designed to enhance their dignity, to create an experience PAGENO="0129" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1 9 6 7 ~ 967 whereby they begin to develop leadership capabilities, and ~ then to cut off, or refuse to expand, such programs and services ~ is a matter ~ of sheer cruelty. It can onlybe perceived as a punitive measure on the part of a nation turning its back on the sufferings of the poor and on their hopes for dignity and result in inevitable fury by those thus twice scorned. ~ ~ In a sense, we have encouraged the poor to become "middle-class," to assert themselves, to petition for redress along the historically established lines long known to the middle class, to mobilize to increase their voices within the cor- ridors of power. At the same time,. we become frightened when they become "militant" and we may even go so far as to misinterpret their every plea for dignity as a plot for our destruction. The thir4 question directed to Urban League executives was "What was the primary obstacles to greater achievement in the war on poverty? Lack of a com- munity concern? Lack of funds? Lack of Uoordi'mation?Inefftcient management? Other?" In the Eastern, Western and Southern Regions, the primary obstacle to greater achievement is seen as a lack of funds. In the Mid-Eastern and Mid-Western Re- gions, a lack of community concern is defined, as the primary obstacle. To a lesser degree,. in these latter two regions, lack of funds is also of major concern. For example; 67 percent of the 19 cities reporting in the Mid-Western Region define lack of community concern as the major obstacle to greater achievement. Most of these are the larger cities. Lack of community concern ismanifested in a varietyof ways: (1) Through lack of concern on the part of the power structure, often cited as including the Chamber of Commerce. (2) By. virtue of a conservative climate which rejects federal funding in principle (particularly In smaller cities). (3) Occasionally, the indifference of the mayor (primarily is smaller communities). This lack of community concern also is described as disinterest on the part of the "haves" and apathy on the part of the "have-nots." One wonders, at the same time, whether a failure to sell the program to the poor is interpreted as meaning "apathy" on the parts of the poor. It also must be stated that in many cities the lack of community concern waJs not spelled out, hence, to some extent the answev to this question remains unclear. In order to create viable communities, the individual must have a sense of participation in, and control over, the events that effect his life. Conservatives, in the power structure, are only too eager to accept this concept as it applies to themselves, but most often reject it as it applies to the poor. The conservative systematically maintains the status quo because he `recog- nizes, as Daniel Bell pointed out in a recent article, that. steady, dependable poverty is t~ie best guarantee of social conservatism: In short, if people have ho reason to expect or hope for more than they can achieve, they will be less discontented with what they have, or even grateful simply to be able to hold on to it. But if, on the other hand, they have been led to see, as a possible goal, the relative prosperity of the more fortunate in the community, they will remain discontented with their lot untll,they have succeeded in catching up. We as a nation cannot continue to ask the poor to bear the burden of social stability on these terms for the community at large~ To do so is an intolerable abridgement of human rights and human dignity. The attitude of the local CAP agency toward local existing agencies is. also a factor frequently cited by Urban League executives as an obstacle to greater achievement in the war on poverty~ CAP programs are very often seen as shut- ting out existing agencies and refusing to delegate program . .to'them. In some instances, CAP duplicates what existing agencies do, rather than buttressing independent, efforts. There isa feeling, particularly in smaller communities, that the CAP. program does. not encourage participationby other community agencies. It is particularly interesting, to note that. the cii~il rights agencies. some of which have a half-century or more of experience in dealing with problems the war on poverty attack, have been given little, if any, poverty war funds, wheli w oald h'ii e gieatlv reinforced their positions `it times of cn ii disorder hi I er mitting them to implement some of the . tangible programs sought within the ghettos. Paradoxically, as much as some of these agencies and organizations are left out of the picture, they are still the first ones to who the authorities turn when disorders threaten to replace realistic amid orderly procedures, as well as the first ones upon who the extremists turn because the civil rights agencies can- not deliver on the meat, 1)read and potatoes issues fast enough. SO-OS4-G7~--pt. 2-9 PAGENO="0130" ~68 E~CONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Problems relating to funding also create massive uncertainties, often leaving ha question even whether programs of great merit will continue to be funded. It is ecotremely important that the Federal Government face the reality that an- nual funding is a program-defeating process. Staff, community and recipients- are flately demoralized by funding uncertainties. Ways must be found to fund programs for consecutive two-, three-, four- and five-year periods if there is to be any sense of stability, flexibility and serious purpose to programs. It is a waste to operate a program for one year during which time both staff capability and the effectiveness of program usually increase, in many instances by an important process of trial and error, and then to dissipate these gains by abandoning the program. Uncertainty about refunding invariably results in staff's beginning to look for other employment as much as six months before the termination of a one-year program. Anxiety about the stability of program reaches the poor whom it is. supposed to be helping. And all of this sets in motion a program-defeating cycle which destroys all, or much, effectiveness. Under these circumstances, even if the program is ultimately refunded, valuable-ground is lost. In documented instances, programs have continued for as long as two months beyond the conclusion of the contract before being either refunded or terminated. It is inconceivable, regardless of the complexities of the funding process and the uncertainties of Congressional appropriations, that a way cannot be found to protect recipients, community and staff from such pressures and dislocations as these. The fourth question asked of Urban League executives was "What recom- mendations would you make for improving the overall anti-poverty program in terms of efficiency, coordination and scope? What features of the program should be kept and ecepanded and which should be scrapped? Several common factors can be seen in Urban League responses from all five- geographical regions in responseto this question. As noted previously, it is felt in all five regions that CAP should negotiate more contracts with existing agencies to perform program. In some instances, this concern is combined with a concern that CAP stop duplicating the services of voluntary agencies. In part, these concerns stem from the early development of OEO, wherein, at the outset, there was an almost total rejection of traditional social agencies on the grounds that they had previously failed to solve outstand- ing problems. It was not until after almost a year of operation that OEO officially began to invite the participation of the traditional agencies. There is a consensus among the 79 Urban League cities responding that, at the local CAP level, the initial policy is still deeply entrenched, particularly in small- er communities. It would seemlikely that leadership on this question will have to come in the form of guidelines from OEO in Washington, specifically instructing CAP to contract with existing agencies and institutions. At the same time, criteria need to be developed to define the commitments traditional agencies and institutions should be required to adopt in undertaking CAP contracts. For example, they must be prepared to accept and implement the philosophy of participtation by the poor in decision-making, planning and opera- tion of programs. They need to be forced to re-examine existing programs and to reconsider whether or not they are actually reaching the most disadvantaged citizens. They also need to determine whether, in fact, their policy-making bodies are sufficiently representative and, if not, adopt procedures that will guarantee that they are. Traditional family-service agencies will need to be creatIve in. devising new ways to involve people in solving their own problems. There are indications that there is a need for such formal agreement as seen in what is happening, for instance, in New Orleans. In that city, there is a con- flict of values between CAP program and the traditional social work organiza- tions involved in carrying our portions of the CAP program. The conflict seems to revolve around the CAP philosophy of employment of sub-professional aids versus the traditional agencies' orientation toward total professionalism. Another factor which emerges is the need, not only for involving more of the poor, but the need for leadership training of the poor within the frame- work of CAP program. In addition, there is a recurrent plea for better staff support of the poor on CAP boards, which is spelled out in more detail under question six of this report. In all five regions a strong need is seen for recognizing the individuality of cities. This is best seen in the broad range of recommendations from city to city as reflected by Urban League executives. PAGENO="0131" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1 9 6 7 969 In essence, the plea in all five regions is one for greater adaptability to local needs rather than rigidities which ear-mark funds for specific purposes while demonstrated needs go unmet. Most cities stress a need for continuing research both in the provision of current data and to develop standards of measurement. No program should be permitted to proceed beyond the six-month mark without providing a progress report. This progress report should document both successes and failures. There must be a willingness to le~arn from failures as a matter of administrative staff and program development. There must be a freeing of administration and staff of programs from chaotic anxiety over "blame" and "mistakes." There must be a willingness to involve recipients of service in the periodic evaluations of program. Only through an on-going gathering of facts, a documentation of successes and failures can the effectiveness of program truly be measured. It is not sufficient, for example, to state that 400 people were placed in jobs. It is essential that the individuals be followed up. How many are still working three weeks later, or three months later? Of those no longer working, how many were fired, how many resigned? What were the reasons for the firings, or the resignations? How many can be reached and helped to find other employment or strengthened in order to function more effectively once employed? These are only some of the complexities involved in providing quality services to the poor. We must never lose sight of the fact that the gravity of their circumstances and the cumulative cost to society demands that the quality of service be exceptional if the war on poverty is to be won. The next recommendation ramifies the need for reorganizing the individuality of cities and their programs. Most cities reflect a desire for expanded employ- ment, job-training and education programs with less emphasis on programs of importance, but less urgency, such as consumer education, home management, credit union projects, etc. To allude to an earlier recommendation, the great need is again stressed for adequate preparation and training of the poor for effective participation. This i.s particularly true in respect to their functioning on CAP boards, where, as a result of OEO guidelines, they now have 1/3 representation in most instances, At the same time, the quality of participation, in many instances remains open to question, or it is found that the views of the poor are ignored at the moment of decisionmaking by the "professionals." Memphis, Tennessee, cites an instance where no action could be taken in the course of six consecutive meetings of the CAP board because of the lack of a quorum. Procedures need to be developed to deal with such situations, through replacement of individual members, or otherwise. The specialized needs of individual cities is again emphasized by a variety of suggestions relative to CAP agencies. One most frequently expressed is that "delegate" agencies should be represented on CAP boards. Another is highlighted in Omaha, Nebraska, where, at one time, OEO regional officials communicated with the community only by telephone and it was not until they began to make personal visits to secure firsthand information that adequate understanding developed between regional OEO officials and local leadership. In the smaller cities, one finds a desire for the expansion of all program largely because only minimal program is in operation, reflecting the relatively limited impact which the anti-poverty program has had in such cities. The fifth question was "What have been the benefits of the OEO? How effec- tive is the OEO as an operating agency? Are there management deficiencies in the OBO?" In response, the OEO is seen as having awakened communities to the many problems confronting the poor. On the other hand, it is felt that the OEO needs to generate the effective political support of the poor and that the limited extent to which the poor have given the 01110 such support is indicative of the extent to which they have remained suspicious, unreached and, to some extent, dis- enchanted by the failure of the anti-poverty program to fulfill promises, to fulfill the belief that "something is being done for us." In sum, it is relatively simple to dismiss the poor as "apathetic," or to avoid facing the reality of the need for effective communication. Many cities report that the OEO has encouraged people to help themselves and has given many people hope that the problems of poverty can be solved. The OEO is credited, in some instances, with having removed health and welfare services from political control. There is abundant praise for the OEO for having encouraged programmatic experimentation. The OEO, nationally, is judged to be doing an efficient job in some commu- nities, though, in most instances, there were no comments concerning the 01110 PAGENO="0132" 970 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 on a national basis, which is not surprising in view of the preoccupation of local Urban League officials with their immediate situations. Throughout, in response to this question, the emphasis was upon local CAPs rather than the national administration of the OEO. With respect to local CAPs, it is felt that management deficiencies are caused largely by uncertainty of employment and the involvement of the poor, to some extent, in positions for which they have aspirations but not aptitude. This, again reflects the need `for more adequate funding arrangements and on-going staff development, professional and non-professional. It also underscores the need for a true marriage between the professional and non-professional in order for pro- grams to be more effective. Jt is widely felt that community attitudes hinder the effectiveness of the OEO, ~artieularly in smaller communities. Jacksonville, Florida, for example, reflects .a feeling that the anti-poverty program has to fight for everything it obtains. The :smaller communities also tend to complain about the morale of personnel, about ~bureaucratic administration, and charge that the OEO is a political football. In Fort Wayne, Indiana, it is noted that the CAP board is heavily weighted witb members of the United Community Services. These points again illustrate the need for guidelines spelling out the relation- ship betweQn a CAP agency and traditional community agencies. The si~tlt que8t~on was "To what e~tent have poor people been involved in the war on poverty in your community." As previously indicated, OEO guidelines have resulted in one-third repre- sentation of the poor on CAP boards in most instances. Prior to the guidelines, the poor were permitted very little participation. Even where the involvement of the poor is considered most successful, as in Washington, D.C., where 849 poor people were employed in CAP programs and 1,536 poor people serve on CAP advisory and policy-making bodies, it is pointed out that where the views of the poor conflict with those of the "professional," the poor tend to be ignored. In both the Mid-western and Mid-eastern regiOns, and in smaller cities throughout the nation, there is a feeling that there is still some resistence to the meaningful involvement of the poor on CAP boards. In the Mid-western region, the larger cities indicate that the involvement of the poor has been, for the most part, in the role of client. The exception is Kansas City where the poor demanded and got representation at the planning level, but, at the same time, even there, CAP is being watered down because it "rocks the boat of the establishment." Fort Wayne. Indiana, among other cities, cautions that in many instances involvement of the poor on CAP boards is a matter of tokenism. "They come to meetings, they are seen, they sit, they say nothing, and they return home, while a handful of other people usually make the decisions." An additional dimension to the problem of developing programs to, help the poor help themselves is the potential vulnerability of organizations without reliable, responsible profes5iOfla1/n0nprofessio~~l cooperation. Where the non- professional in combination with a relatively inexperienced administrator are burdened with the full responsibility for a program, they are potentially fair game for individuals and organizations who may exert destructive influences over the indigeflouSgroup. Such individuals and organizations may have agendas of their own which have little to do with the objectives of the program or the needs of the poor. In fact, they tend to specialize in leading rather than clevel- oping leadership ; they may even systematically work to bring about chaotic circumstances, resulting, in some instances, in violence and destruction. There are any number of variations on the theme of, the extent to which the poor have been involved, which again reflects the need to recognize the. indi- viduality of cities and their needs. In Jacksonvifie, Florida, Urban League `offi- cials consider the involvement of the poor the best in the Southeast, despite the fact that this city reports weak financial and community support for poverty programs. Another Southern city indicates that some of the poor regard negroes serving on the CAP board as "selectively safe." Atlanta, Georgia, like Kansas City, points out that participation by the poor on CAP boards and advisory com- mittees came about only after vigorous protest by the poor. In sum, there is substantial room for improvement in the quantity and quality of participation of the poor in the poverty program. The seventh question addressed to Urban League executives was "To what e~-etent has the Uommvnity Action Program been effective in achieving its objectivesr Again, reduction of funds from year to year and the unmet need for the expansion of program are identified as the key factors limiting the effectiveness of CAP. PAGENO="0133" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 971 In most of the cities of the Southern and Western regions, the feeling is that the CAP program is too young to evaluate its effectiveness in achieving objec- tives. The larger cities in these regions, on the other hand, generally seem to agree that CAP has had a certain effectiveness. In the Mid-western region, 71 percent of the 19 cities responding report that the effectiveness of CAP program has been limited or of a minimal nature. Much of this relates to lack of adequate funding for programs. In the Mid~eastern region, 00 percent of the 17 local affiliates reporting feel that while CAP has, in varying degrees, achieved success, it has not achieved its objectives. In the Eastern region, there is general agreement that CAP has the potential for being effective but that, for various reasons, it has not fully achieved its potential. The smaller cities in this region tend to less praise for CAP programs than the larger cities. In a few scattered cities across the country, there are expressions of substantial satisfaction with CAP performance, as for example, in Warren, Ohio; Pittsburgh, Pennsylvania and Portland, Oregon. In sum, it can be said that long-range, consistent and sufficient funding is the prime requisite for bringing about an effective assault in the war on poverty. Anything less than this results, instead, in a "war on the poor." It is a sad commentary that in many cities, it is felt that only a riot seems to bring about necessary (although usually temporary) funding. Temporary relief from the strain of poverty, once withdrawn, results in only greater bitterness among the poor. The eighth question was, "Are there self-del eating delays in getting programs underway because of `red-tape?' If so, characterize briefly." The general picture across the country is one of dissatisfaction and delay both in getting operations underway and in funding and re$unding programs. In addition, there is some dissatisfaction with delays in reimbursements. There are further major complaints about the technicalities involved in the re-submission of proposals as they relate to delays in starting programs. Canton, Ohio, points out that the complexity of guidelines and procedures for developing programs have hampered, or created obstacles which discourage, agencies from becoming involved in the war on poverty. The feeling of "hurry up and wait," as previously mentioned, is best described by an instance in which a six-month wait followed the submission of a proposal which was then followed~ by a three-day notice to re-submit. Some cities reflect the feeling that while red-tape is not of a self-defeating mag- nitude at the local level, it seems to be at the regional and Federal levels. Perhaps significantly, it is felt in Cincinnati that while the city, on the whole, has not suffered from delays in funding, it has been because of the skills of the local CAP staff and board, flanked by the services and consultants of the Com- munity Chest and Council. This is perhaps an illustration of the importance of greater cooperation between existing social welfare structures and CAP programs. Where such co- operation exists, a true community-wide effort is possible. Again, this seems to illustrate the possibility of, and need for, additional guidelines. In sum, the obvious pressures resulting from red-tape hinder program devel- opment, particularly in smaller communities, render acquiring competent staff difficult or impossible, seriously affecting the retention of staff and the con- tinuity of program. In general, there is relatively little attention being given to the elderly poor of this nation. The bulk of attention to them has consisted of the Medicare Alert Program, which was temporary in nature. The Foster Grandparents Program seems extremely effective where it exists, as. for example, in Racine, Wisconsin; Philadelphia, Pennsylvania; and Denver, Colorado. it might be noted that the Denver Urban League reports that while the Foster Grandparent Program there is effective, there is a problem in increas- ing the number of minority group participants. Other examples of on-going programs for the elderly poor include SCOPE, a community organization dedicated to senior citizens in Warren, Ohio; Neighbor- hood Centers in Columbus, Ohio; Senior Citizens Referral Center, in Peoria, Illinois; and Project Three Score in St. Paul, Minnesota. In sum, the efforts in behalf of our senior citizens who constitute 9.4 percent of the U.S. population are relatively, woefully weak. One wonders if perhaps this is because the aged do not, like the "squeaky wheel," require the most grease. Reports from the 79 Urban League cities reflect the fact that, with scattered exceptions, extremely little is being done in relation to the rural poor. There are examples, as in Warren, Ohio, where efforts to bring services to the rural poor PAGENO="0134" ~972 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 A l~rnn 5. t1,rnt~ Baltimore Boston Buffalo Canton. Chicago Cincinnati Cleveland - Columbus Dayton - Euglewood - Flint Gary - Grand Rapids Hartford Jacksonville_ - - Kansas City Lansing Los Angeles Louisville Memp1uis Milwaukee. Minneapolis Muskegon New Orleans Omaha Philadelphia Phoenix Pittsburgh Portland Richmond St. Louis San Bernardino-Riverside San Francisco Seattle Tulsa Warren Washington, D~C White Plains Total Initial project Renewal project Total $110,225 $110,225 289, 126 6259, 000 548, 126 155, 494 155,494 112,421 143,632 256,055 335,940 335,940 88,046 88,046 237,324 237,324 147,999 147,999 231,008 231,003 134,139 134,139 130,236 130,236 157, 546 . 157, 546 118,543 118,543 166, 900 . 166, 900 100,082 100,082 75,408 75,408 255, 775 255, 775 116.243 121,902 238,145 112, 117 112,117 251,826 601, 044 862, 870 110.358 110,358 276.004 276,004 120,576 120,576 80,336 80,336 129, 541 129,141 70,156 70,156 33, 702 33, 702 228, 102 184, 425 412, 527 107,372 107,372 212,605 173,807 386,412 126,818 126,818 58,000 58,000 203,089 203,089 225, 607 119.537 . 345,144 142,124 142,124 221, 514 668. 715 890,229 156, 173 108,632 264,805 117,331 117,331 20,658 20,654 243,000 75,000 318,000 176,008 -. . 176008 8,851,168 run into difficulties because transportation poses such a problem in~ rendering services. The need to develop and exploit the tie-in between efforts for the rural poor and the relief of urban poverty seem particularly important in relation to those rural poor who are, or will be, migrating to the cities. All in all, reports received do not reflect much activity in behalf of either the rural or elderly poor. The following extended examples of Urban League programs in the war on poverty cover selected materials on OTT project, Project ENABLE, a VISTA training program, Project ASSIST, a Human Resources program, Housing Infor- mation Centers and a ~eighborhood Development Center in Washington, D.C., variously funded by the OEO and major Executive Departments. Bwmmary of incorne-1966-67 operations of on-the-job training program I. Urban League affiliates: Program: OJT. Number leagues 41 Number reached (contracted) 15, 845 Total budget $8, 851, 168 IL National Urban League (administrative costs): 01T program $344, 020 Rent 5, 360 Telephone, postage, etc 12, 572 Equipment 6,059 Supporting services 3,221 Special funds total budget 371, 232 S1ummary of iswonie (by Urban League affUiate) Source Exclusl\ ely throu"li LI a Department of Labor Bureau of Apprenticeship and Trainmg PAGENO="0135" ECONOMIC OPPORTUNITY ACT. AMENDMENTS OF 1967 973 Submitted by: ~. . . PJ~OLPH HOLMES, Associate Director, Economic Development and Employment. ~MAY 5,. 1967 . . Los ANGELES URBAN LEAGUE REPORT (MDTA OJT Project Contract CA J 72 July 1 1965-September 30 1966) To keep in step with a community's problems and effect their solution is the real foundation for both healthy community development and good orientation of residents-old and new-to "A Better Way Of Life." (Dallas A Martin project director February 15 1967) OJT IN ACTION The Federal Government under the provisions of the Manpower Development and Training Act (MDTA) of 1962 offers help to employers in the development and cost of On-The-Job-Training Programs. The Act was created primarily to give job skills to the unemployed, the underemployed and those workers whose jobs are affected by a changing technology. Its method of providing training for a specific job under actual working conditions points up a very real advantage Most programs directed toward disadvantaged groups offer training in skills considered useful in obtaining employment but OJT is actually geared toward direct employment of such individuals It will result in not only a ti ained mdi- vi,dual but more important an employed tndmvmdual The Los Angeles Uiban League MDT-OJT Project of 1965-66 has been con sidered successful This is supported by the fact that it did exceed its goal of 400 training slots Even though this quantity can be considered minute when corn pared to the total unemployment pi oblem it was not achieved with ease and non cMlan~e On the contrary many obstacles were encountered in the developmental stage. Industry's understanding and acceptance of the program had to be assured and resistance to Federal involvement `overcome. It became apparent early that the careful selection of staff and a proper choice of the initial contact person would play an important role in our success. The former must through previous experience and/or specific training be so orien tated as to assure a good understanding of industry personnel problems. The lat- ter must be one in a policy making position with broad authority in employment, to assure in objective evaluation of the OJT Project Unless both factors are given proper priority, affirmative action will be seriously delayed and ofttimes never achieved. Since August 18, 1965, the Los Angeles Urban League has spent much effort `in overcoming various typed of, opposition, particularly that type conveniently identified as an OJT encroachment on company hiring policy. It is simple enough to point up what OJT will do for, the underprivileged person, but what it will do for the employer is also vital and must be effectively presented by the OJT Developer. In consideration of the aforementioned facts, the writer submits the follow- ing as points to be remembered when attempting to overcome certain natural or subtle employer resistance. Do limited categories actually eo-iist for employee on the ~ob training? Often the imtial company resistance lies in their tendency to suggest that this type training is applicable to a very limited number of job categories. However, experts agree that any type organization thrives on a good balance of trained individuals Therefore the need to provide for OJT type training in all occupa tional areas cannot be over-emphasized. It is extremely important that the OJT Developer explore the needs within each job category (maintenance, sales, pro- duction, accounting, clerical, etc.), and be ready to recommend the appropriate nffort. Once equipped with a broad prospective he will not become discouraged when faced with that problem real or constructed identified as occupational limitation. On the contrary, he is able, to pursue all areas of possibility and vlearly point out both the advantage and importance of OJT to a company's growth Can values under OJT be considered as twofold' Whenever and wherever new personnel is required, the emphasis is usually placed on careful selection, with provision that it be followed by appropriate PAGENO="0136" 974 ~coxo~iic OPPORTUNITY ACT AMENDMENTS OF 1967 training. When occupations are properly analyzed and standards devised, the company is provided with a basic guide for the choice of applicant. Certainly such careful screening deserves to be followed by a dynamic training process. It has often been stated that, "the authority to supervise includes the ability to teach." Because many supervisors are found to be deficient in teaching "know how," On-The-Job-Training Programs can do much to remedy this situation. Under such a program, the supervisor is provided `with a teaching responsibility and must proceed in,. some formalized fashion, if he is to achieve the desired result. Bearing this in mind, the OJT Developer is provided with a' tool which can adequately point up the value of OJT: to the employer, both in the existing supervision areas and new employee situations. . Can the employer afford ajiassive attitude toward OJT? The recruitment, selection and training of personnel at all levels of occupa- tion are vital factors in the good development of any organization. However, the training responsibility might be considered of greatest importance, as it will result in the type specialist required in today's highly functionalized indus- tries. Specialization of occupational tasks in industry have reduced consider- ably the scope of work, so that the latter embraces only a small phase of the entire work process. It follows, therefore, that the knowledge and ability required for satisfactory performance is reduced . and this gives persons having less academic training and no skill an~ opportunity to do work which formally demanded a higher grade of labor. It is extremely important that the OJT Developer be prepared to inform a company that it can readily fulfill its train- jug objectives through the use of OJT. Also, by participating in this Project, the employer is eligible to receive reimbursement money to cover a percentage of his training cost-a very real an4 praetical incentive. The foregoing is an attempt to give emphasis to certain of those underlying management reactions which, unless explored, prove to be formidable barriers to affirmative OJT action. Yet, when presented in. proper perspective they pro- vide a meaningful approach and will do much' to open the door of opportunity for the unemployed, underemployed and those whose jobs are affected by changing techinology. OJT RESULTS The statistics to follow do point to gratifying development underlying the Los Angeles Urban League MDTA-OJT Project. Although our efforts managed. to reach only a small segment of that group known as underqualified, the results show that important On-The-Job-Training objectives can be met. Also, those individuals reached, who are continually bypassed during all stages of economic progress. experienced within our prosperous society. Because these persons deserve and must be given the chance to enhance their opportunity to enter in and remain in so competitive a labor market, any meaningful training is a positive action. Persons whose formal education does not reach beyond the high school level `have the greatest difficulty qualifying for employment. This Is most certainly an acute problem when 1964 statistics reveal that the non-white unemployment rate for high school graduates stood at 21.1% and this is compared with 9.6% for whites. It will be noted that our Project did render a service to the group in question, as those with twelfth grade or less education comprised~ of 68.5% of the total trained. Refer "Project Characteristics" data. This Project also contributed to an improvement in income which is important, when realizing that income deficiency will always result in increased public assistance-a problem of great concern, to us all. In 1959, the median income for white workers in Los Angeles was $5,465 and for Negro' $3,599. It has been esti- mated that should we raise the Negro level to that of white, we could more than double the Los Angeles rate of economic growth. Certainly it is agreed, upon viewing "Income Patterns" data, that those served were at least provided with the opportunity to begin their rightful contribution to the Los Angeles economic and social well-being. A glance at "Occupational Patterns" data will show that there exists a notice- able lack of concentration in the low-skill job areas. Undoubtedly, the OJT Project did much to find those being served a place higher on the job ladder. This is important, as we must continue to strive for a more balanced pattern of occu- pational level between non-whites and whites. A 1960 study in Los Angeles re- vealed that among male professional, technical and kindred workers, whites aver- aged 15.4%, Negroes 4.9%. Whereas, among laborer groups, whites totaled 4.7% and Negroes 14.1%. An adjustment in' this pattern is necessary, if we ever expect PAGENO="0137" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 975 to overcome the more subtle discriminations prevalent at the time employee pro- motion is being considered. discrimina- In spite of the foregoing achievement, there still exists gross job the Los tion among the minority in Los Angeles. We must strive to assure level Angeles minority is given the opportunity to contribute at their optimum of ability. Unfortunately the disproportionate unemployment rate between minor- ity and white has not yet narrowed and a manpower report of 1966 predicts that the next five years will show an increase of non-whites entering the labor market. Unless, therefore, we continue with our effort to place the minority on an equal footing with white, the employment gap will become even wider. Project characteristics 1. Number interviewed for OJT 2, 000 2. Number enrolled in OJT 432 (a) Ethnic composition: (1) Nonwhites 310 (2) Whites 122 (b) Sex: (1) Male (2) Female (c) Age: (1) 16 to 21 154 (2) 22 to 39 264 (3) 40 and over 14 (d) Education: (1) 5 to 8 years (2) 9 to 12 years 290 (3) Over 12 years 135 (e) Head of household or family 331 266 Income patterns ~reekly earnings of applicants before OJT: Total Income: applicants Unemployed: None 266 $50 to$69 ] 1 114 ~ ~ Group average income per week, $26 Over $110 J 1 0 Weekly earning of applicants: start of OJT: Income: $50 to $69 1 f 136 $7Oto$89 I . I 201 $90 to $110 r Group average income per week, $76 ~ g5 Over $110 J 0 Weekly earnings of applicants, completion of OJT: Income: $60 to $79 1 133 $80 to $99 I 155 $100 `to $119 ~ Group `average income per week, $90 143 $120 to $140 1 1 Over $140 j 0 Occupational patterns Professional and managerial: Management trainee, escrow officer, pest control, etc. Clerical and sales: Secretary, stenographer, clerk-typist, receptionist, ticket agent, shipping clerk, countergirl, etc 67 skilled: Mechanic, field service representative, inspector, presser, arc, welder, etc. 103~ Semiskilled: Machine operator, assembler, shop helper, electroforming helper, etc. 244 Unskilled': Warehouseman, maintenance; nurses aid, service, ~station at- tendant, etc. 13 PAGENO="0138" 976 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Industry pa-rtico~patio'iv in MDTA-OJT, 1965-66, Los Angeles Urban Lcague Company name Number slots obtained * Slots filled Total trainees completed Aerospace Corp Aircraft Hydro-Forming AmericanAirlines American Bearing Metal Co Automation Industries Attorney George L. Vaughn, ~r Baker Oil & Tool Co California Decorated Glass Duncanilunter 13 14 5 1 18 1 25 2 7 2 25 42 7 30 1 1 5 3 20 10 - 177 1 2 32 4 3 13 14 5 1 18 1 3 2 3 2 6 25 2 7 2 25 ~ 5 20 1 1 5 3 20 10 155 1 2 32 4 2 13 14 5 1 15 0 2 0 ° 1 3 25 2 7 0 20 37 4 20 1 1 1 3 19 o 117 1 1 25 4 0 - East-West Extermination Electroforrns Industries Electro-Optical Systems, Inc Emergency Refrigeration Services Grant Industries Hogar Industries IiughesAircraftCo IBM Corp Litton Industries Lockheed-California Co Master Linen Maxon Industries Merchant Title Co Metal Improvement Co National Cash Register Co North American Aviation Northrop-Norair Nu-Hairof California Par-Craft Laminates, Inc Products Engineering Corp Superior Escrow Co Zeb's Quality Cleaners * Total 467 432 311 Program costs Bndget allowance Actual cost Wages and salaries 559,991 559,268 Employeebenefits 2,972 2,227 Transportation 3,513 2,213 Office equipment, rental and utilities (including telephone) 6,107 5,874 Office supplies 2,350 1,755 Trainingreimbursement 186,893 69,074 - - Total 261,826 140,411 Cost per trainee (including administration) $325 FUTURE OJT Because the Los Angeles Urban League is the one social service agency geared to give professional service to the employment problem of the Negro, any con- sideration which will provide for a total outreach of such a program must not be overlooked. Under the agreement summarized by this report (Contract No. CA-J-72), the Los Angeles Urban League was committed to establish OJT Programs which would provide 400 job opportunities for unskilled persons regardless of age. This commitment was fulfilled and its success engendered considerable optimism re- garding the future growth of such a program. The Urban League desires to take full advantage of local climate and industry reception to further the very basic and sound objectives underlying MDTA-OJT. Therefore, upon considering the great need which exists in and around Los Angeles county, the Los Angeles Urban League proposed to increase its effort and include in its outreach such areas as ~Pacoima, Santa Monica, Pasadena and Long Beach, together with central Los Angeles. This resulted in a request for funding to support 1,000 training slots. To assure effective coverage of the selected areas, additional staff had to be acquired so that important and workable area assignments could be made. By PAGENO="0139" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 977 deploying an OJT Developer to each area of concern, we can expect to localize sub-contracts and thereby provide opportunity to area constituents. The latter we will reach by maintaining active liaison with those community agencies hay- ing the preferred community outreach. The results of this experiment should provide a solid basis for pursuing the establishment of self-contained OJT Projects within those areas having a firmly established need. It is anticipated that all such outposts can be included under a single Urban League proposal, to as- sure that each will benefit from our agency's job development and employment know-how. Needless to say, the success of this effort will depend upon the co- ordinated thinking of all persons responsible for its successful completion. Accordingly a good analysis of each staff responsibility is necessary with as signments made so that each can function effectively. The objectives to follow are considered basic to any OJT Project desiring broad outreach and good continuity. We actually attribute our current success to their having been given proper priority in operational planning. 1. Develop and maintain industry information, which will lead to OJT placement in those occupations able to absorb both the unskilled and those considered underqualified. A very recent employment analysis indicates that three out of every five Negro males are considered unskilled or semi-skilled. In addition, more than 50% of the Negro males over 25 years of age have less than a high school education. It is no wonder that one out of every three Negro males has suffered from unemployment within the last three years. * 2. Establish and maintain a knowledgeable and effective referral service, thereby providing the applicant with an assist on as broad basis as possible. Referral should not only include vocational training, occupational therapy and vocational guidance, but also provide for inter-agency exchange of OJT opportunities. The latter could be made possible with the establishment of a central clearinghouse for all OJT Projects. Current employment statistics indicate that. non-white joblessness in- creased in July, 1966, at the same time national unemployment fell to 4.5%. Less than 4% of the white working force was jobless while non- white employment actually decreased. The non-white unemployment rate continues to be double that of white, and there is current speculation that it could become worse. We must, therefore, give good direction to all those deserving to attain their rightful place in our society. ~3. Maintain appropriate counseling and follow-up, offering encourage- ment to all trainees suggesting that they take full advantage of very op- portunity which could lead toward the development of their fullest potential. Almost any urban population statistics will point-up a ghetto situa- tion involving its minority constituents, and this forms the real basis for multi-frustration. With opportunities' grossly limited, there is the realization that they form the bottom of the economic ladder. By often receiving the least education due to inferior schools, motivation is further impaired and leads to a high `incidence of drop-out. We feel obliged, therefore, to assist and `direct. on an individual basis, in an effort to overcome' this deep-seated' discouragement. It is apparent from `the foregoing that counseling, as a staff function is needed and required in direct support of good job development. We should make certain, therefore, that all Urban League prime contacts include provision for this important function, as part of the staffing requirement. Agencies established. to serve a particular eom'nwnSty constituency, as ours, is must maintain a close continuity in agency/applicant relationship to assure effective matching of people and jobs~ ` , ` *` ` In addition, each of the a'bove objectives could be greatly enhanced through a subsidized program permitting our agency to couple certain types of institu- tional training with that of On-The-Job Training. When we are able to snpple- ment the employer's occupational training efforts with training in those basic educational skills reqnired on the job, additional and important OJT areas will open to us. It is our sincere wish `that the information in this report will serve to expedite the release Of future funds as needed to permit implementation of the Urban League `OJT Program. It is fortunate that the Urban League's years of sound program experience would permit its immediate implementation to the fullest extent Proposal cost therefore should be viewed in terms of both immediate and long range values and not be the sole factor to govern decision PAGENO="0140" 978 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 APRIL 25, 1967. Hon. W. WILLARD Winrz, Secretary of Labor, U.S. Department of Labor, Washington, D.C. Mr. FRANK NEHER, Regional Director, Bureau of Apprenticesl?ip and Training, U.S. Department of Labor, New York, N.Y. DEAR Sum: Since 1965, the Urban League of Westchester County, Inc. has been responsible for the development of the On-the-Job Training Program for the Westchester County area. The Urban League, because of its long history in the struggle for social, economic and educational equality, was considered the most logical organization to carry the concept of On-the-Job Training to the community. The report which follows shows the project's accomplishments and our goals for a future program. Sincerely, MONROE R. LAZERE, Chairman, Economic Development and Employment Department. INTRODUCTION On November 29. 1965, the Urban League of Westchester executed a contract with the United States Department of Labor, Bureau of Apprenticeship and Training, to conduct an On-The-Job-Training (OJT) Program for the county of Westchester. This program provided the vehicle through which a concerted effort was made for the development of job opportunities combined with skill improvement in actual work situations. The initial project called for the development of three hundred (300) trainee positions for semi-skilled, and underskilled job seekers, who were unemployed or underemployed. As of March 1, 1967, the Urban League of Westchester fulfilled its commitment under the initial contract and will propose a new and expanded On-The-Job-Training Program for Westchester County. ROLE OF THE URBAN LEAGUE OF WESTCHESTER Since its organization in 1918, the Urban League of Westchester has been involved in the struggle to end economic and social inequities which exist throughout Westchester County. The Westchester Urban League has concerned itself with some of the housing, economic, and educational inequities faced by minority people. During the past decade, the League has focused on the area of job develop- ment and employment. It has maintained a Job Development and Employment (JD&E) which interviews, screens, and refers job applicants to positions de- veloped by the League, within industry. In 1965, the Job Development and Employment Department of the League was involved in special projects aimed at orienting and preparing youngsters for entry into the job market. The League maintained its Volunteer Employ- ment Service which operates as part of the National Urban League's Skills Bank Program for direct job placement. Through the many activities of the Job Development and Employment De- partment, the League has seen the need for new and better ways of closing the gap between minority workers and job opportunities. The National Urban League's Skills Bank has pointed out that there are more jobs available than qualified persons to fill such jobs. On the national level this gap prompted legislation calling for job training and re-training programs to bring the utilization of minority manpower into line proportionately with that of the community at large. With this purpose in mind the Westchester Urban League developed, in conjunction with the National Urban League and the United States Department of Labor, an On-The-Job- Training Program under the Bureau of Apprenticeship and Training (BAT). PROGRAM NARRATIVE The purpose of the On-The-Job-Training Program was to develop training positions in industry for three hundred (300) marginally skilled minority job applicants who were unemployed or underemployed. The On-The-Job-Training Program offers the employer personnel recruitment PAGENO="0141" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 979 and screening services, and defrays a portion of the costs incidental to the train- ing of new personnel. The length of the training period and cost per trainee depends upon the nature and complexity of the occupation involved. The em-S ployer agrees to provide training, pay a regular salary, and have a permanent position available upon satisfactory completion of training. For the job applicant, the On-The-Job-Training Program offers the possibility of developing or improving skills in demand occupations and earning a decent wage at the same time. The On-The-Job-Training Program's major role is to bring the minority worker to industry, and to help open job opportunities that ordinarily would not exist. Operationally, the On-The-Job-Training staff developed the training pro- grams for periods ranging from four to twenty-six weeks in duration. The On-The-Job-Training staff did the initial screening of job applicants with the employers making the final selection of the trainee, hiring them at the prevailing rate for the training period. The employer received, at his option, reimburse- ment for his training costs up to $25.00 per week, per trainee for the duration of the contract. Besides OJT for entry level jobs, provisions were made for the re-training of persons who were displaced by automation and technological. changes in the Westchester County job market. A.; staffing the Project Under the contract between the Urban League of Westchester and the Bueethi of Apprenticeship and Training, United States Department of Labor, a Project Director, two Field Representatives, one Trainee Advisor, and two clerical posi- tions were allocated for the management and cultivation of the program. The primary responsibility of the director, a working supervisor, was to organize, supervise, and assist in the development of all staff activities under the overall administration and supervision of the Westchester Urban League. The field representative's responsibility was to develop trainee job openings and conduct visits to firms participating in the On-The-Job-Training Program to insure that project objectives are being fulfilled. This staff person maintains close relations with the New York State Employment Services, community organizations and other related groups. The maintenance of records and reports related to this position was the responsibility of the field personnel. The responsibility of the trainee advisor was to arrange formal pre-OJT orientation for trainees to fully acquaint them with. the world of work and to instill in them the proper attitudes toward employer-employee relationships. The advisor would also inculcate the responsibility of personal hygiene, sound grooming, and any other activity which affects one's employability. After place- ment, follow-up advisory sessions would be handled by all professional staff to insure the success of the program. The clerical personnel performed all clerical support functions needed for the efficient operation and maintenance of the project. B. Orientation AU persons hired for the On-The-Job-Training Program went through a period of job orientation, which was developed and operated by the Employment Division of the National Urban League. Specialists in the area of job development. place- ment techniques, and OJT coordination discussed the purpose, scope, and pro- gram implementation of an On-The-Job-Training Program. Work study grnups were formed to explore the differeilt aspects of manpower utilization~ All sub- sequent persons hired for the On-The-Job-Training Program went through a sim- ilar orientation program. C. Publicity and Comnutnity Relations During the On-The-Job-Training Program's embryonic period the Director and his staff personally visited more than one hundred companies in Westchester to establish communications and promote the concept of on-the-job~trajnjn~. Visits were also made to Chambers of Commerce, Community Action Programs, state and local agencies and other groups interested in the areas of émploymen~ and training. The first trainee placement was given newspaper coverage to further present the On-The-Job-Training Program to both business and job applicants. During July, 1~66, the OJT staff coordinated a special events program wi~hi time Mayor of White Plains, the Honorable Richard S. Hendey. This event proclaimed the week of July 11-15th at OJT Week, which was accompanied with broad pub- licity. The success of this type event led to the development of another procla inn- tion during September, by the Mayor of Yonkers, the Honorable John E. Flynn. PAGENO="0142" 980 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 On-The-Job-Training promotion was continued throughout the year with spot press releases and radio announcements. D. Conzmun~ity Action a~n~i On-the-Job Training The Urban League of Westchester's On-The-3ob-Trainlng Program worked closely with the many Community Action Programs existing throughout West- chester County. The OJT staff interviewed several hundred job. applicants, con- nected with these community programs, referring many to institutional training programs such as Manpower Development and Training Act (MDTA)., regular employment and OJT positions. The staff also helped local community groups develop program proposals for pre-vocational training. The Mount Vernon Beau- tification Project, funded under the Nelson Amendment for the Economic Oppor- tunity Act, is an example of such proposals. E. Performance At the completion of its initial On~The-Job-Training contract on December 23, 1960, the Urban League of Westchester submitted, and was granted a four month budget extension As of March 1 1967 the project had developed two hundred and fifty (250) OJT sub-contracts. Si~ty-nine (69) different classificatiOns were developed for three hundred and eighty-four (384) trainees, of which ninety-one (91) are still under contract. One hundred and fifty-eight (158) successfully completed training, of which one hundred and fifty-two (152) were employed after training. Although the final statistical analysis of the project is, at this date, incomplete, it can be .safely projected that better than ninety (90) percent of the persons completing training will be retained or employed in a related position. The project successfully placed eleven (11) handicapped persons in training positions, and maintains an average wage scale of $1.91 per hour. As a result of the On-The-Job-Training Program, the League's overall Employ- ment Program expanded its regular job placements, and~ developed many new employer contacts. TEE BUSINESS COMMUNITY AND OJTT The overall On-The-Job-Training PrOgram involved seventy (70) different employers, of ~vhich the large majority were medium and small in size. Very few large employers were interested in developing On-The-Job-Training Pro- grams. Most large businesses were reluctant to accept federal funds and felt that the operational levels of work performance would suffer if hiring standards were lowered. In one case, e.g. IB1\f, non-reimbursable agreements were developed, but the number of positions and agreements were smalL As a~ pilot program for Westchester County, the On-The-Job-Training Program had as one of its major aims, promoting the concept of on-the-job-training in preparation for a broader program that could be developed for helping the dis- advantaged wage earner. JOB APPLICANTS AND OJT The On-The-Job-Training staff has interviewed more than fourteëñ hundred (1,400) job applicants of which three hundred and eighty-four (384) were directly placed in OJT positions. Many job applicants, due to educational de- ficiencies, were counselled extensively and referred to other community pro- grams or training situations. On an average, the project registered approximately one hundred (100) per- Sons monthly. More than sixty percent of these persons registered for OJT were in need of some basic orientation educationally, and could not take immediate advantage of OJT. Many of these persons were referred to other agencies. Due to staff limitations no foliowup. could be made on these referrals. It is hoped that a new OJT contract will provide money for additional staff for follow up and pre job orientation including basic education Approximately thirty eight (38) to forty (40) percent of the applicants had the basic educational, requirements and, through the Urban League's OJT Program, the gap between applicant and jol) opportunity was bridged. CONCLUSION AND RECOMMENDATIONS * The League's pilot On-The-Job-Training Program has demonstrated the need ~for OJT and, more important, that such projects can work. The success of OJT is not necessarily told in the statistics, numbers placed, numbers completed, num- bers retained after completion of training. The real success lies in the under- PAGENO="0143" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 19~7' 981 standingthat there is pOtential in many untrained peOple and when an opportu. nity is given, talent can be developed. As a result of our experiences, we recognize the tremendous need and par- ticular value that on-the-job-training offers. OJT has a built-in mechanism for developing one's self-esteem. Under OJT, a person has a job first, which means a pay check and the satisfaction and dignity that goes with it. Specific recommendatiOns involve length of program contract and staff alloca- tion and salaries. This OJT contract should be funded for a minimum of two years with an option to renew at the completion of one year if the program is progressing satisfactorily. One of the most difficult tasks business consultants face is getting prospective businessmen to realize that many new businesses begin by losing money. So it is with many poverty programs, there is an initial period of limited productivity. Many programs have really begun to produce when their life is contractually ended. A longer contract will attract more staff persons and will provide for their more efficient use. We further recommend that equal emphasis be placed on the staff position of Trainee Advisor, allowing one Advisor per Field Representative. The success of the OJT trainee is directly related to the effective work of the Trainee Advisor. Present staff allocation limits the amount of follow-up deemed necessary. One major problem in administering the project has been staff turnover due to substandard salaries for professional and clerical persOnnel. These salaries cannot compete in the Westchester job market, government and private, because of the relative shortness of the contract and limited fringe benefits. This inability to recruit and to retain capable personnel results in a discontinuity to services rendered to individual communities The Westchester Urban League is aware of the growing need for effective means of solving the problems of unemployment. We have had the opportunity to demonstrate that the On-The-Job Training Program can be an effective ve- hicle for bridging the gap between industry and minority jOb seekers We feel a new and broader contract must be developed so that the community can begin to feel the impact of programs w hich have positive results Submitted by ALLAN A STEPHENSON Project Director MARCH 28 1967 OJT project characteristic data 1. Number of applicants registered for OJT 2 Number of OJT sub contracts 1,402 2~50 69 3. Types of OJT occupations developed 4. Average length of OJT Program (weeks) 10 5. Number of trainees placed (Mar. 1, 1967) - 384 O Number of trainees completing training 158 152 91 7 Number of trainees retained after completion of training 8 Number of persons presently in training (Mar 1 1967) Characteristics of trainees placed 259 125 127 235 32 Male Pemale Age: 16 to 21 22 to 39 40 and over Education 1 to 4 years 1 5 to 8 years 22 9 to 12 years 253 Over 12 yeirs 108 Head of household 186 Welfare recipients Unemployed 7 200 11 54 Handicapped workers gainfully employed Peicentage of trainee completions (percent) Pei cent~ge of trainees retained after completion of training 96.2 $1. 91 08.80 (percent) Average wage scale per trainee (per hour) On-the-job-training budget $176, 0 PAGENO="0144" 982 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Arlo Industries: Assembly mechanic; machine operator; welder's helper. Amalgamated Local #475 (I.U.E.) : Administrative assistant. Atlantic Carpet Company: Carpet and linoleum trainee. Bodnar Products, Inc.: Lighting technician; production control; tester controL Bonded Rebuilders, Inc.: Driver trainee; mechanic's helper; tank room disassem- bler; welder trainee. Bondfair Automotive Products, Inc.: Clerk; driver; machine assembler; me- chanic: mechanic's helper; machine assembler; stockroom assistant; welder. Given M. Britto Agency, Inc.: Insurance secretary. Mr. Burt of Eastchester: Clothes presser; shirt presser. Carvel: Refrigeration machinist. Capitol Temptrol: Machine assembler. Cernac Laboratory: Animal helper; animal keeper; animal supervisor; truck- driver. County Trust Company: Check sorter. Cross County Art Center: Stock clerk. De Camp Industries: Assembler. Delburn Electronics: Clerk. Egidi Motor Sales. Inc.: Assembler; machine assembler; machine operator. First Westchester National Bank: Bookeeper. Floor Shop, Inc.: Carpet and linoleum trainee. Forrest Engraving Company: Mechanical engraver. Thomas E. Hails: Accounting trainee. Haroutinian's: Furniture finisher. J. H. Harvey: Bookkeeping clerk. Operation Hope. Inc.: Assembler. Hydra-Power: Bench lathe trainee; drill press operator; electronic technician; expediting helper; grinding trainee; powder puff machine operator. Hygienol Company, Inc.: Weaver trainee. IBM: Key punch operator. Joe's Service Center: Automobile mechanic. Johnny-on-the-Sp0t Countergirl; shirt presser; dry cleaner-spotter. John's Auto Body Shop: Painter's helper. Kacy and Meyers, Inc.: Air conditioning installer. Edward H. Kahn: Stock clerk. King Fences: Fence instalier. Lem Products, Inc.: Arbor press operator. L & M Optical Company: Grinder trainee. Litton Precision Products. Inc., Potentiometer Division: Assembler trainee; in- spector trainee; line assembler; machine operator; shipping clerk; tester assembler. Main Tool and Die Corporation: Stock clerk. Main Tool Supply: Stock clerk. Mesifta of Yonkers: Cook; maintenance men; typist. Medelton Company, Inc.: Production worker. Millers Cleaners: Counter girl. Neptune World Wide Moving: Furniture finisher. New Rochelle Moving and Storage, Inc.: Furniture packer; rug cleaner; truck driver. New Rochelle Precision Grinding Corporation: Machine operator; maintenance man. Nathan Nirenberg: Clerk sales. O'Brien & Lutz Body Company: Automotive helper; automotive mechanic helper; automobile trimmer. P. J. lrerneuil: Driver; shipping clerk. Portman Instrument Company: Machinist. Precision Circuits, ftc: Plater; photographer, machine operator. Dorothy Robinson: Interior decorator. Rose Cleaners: Countergirl; presser. Rush Manufacturing Company: Milling machine operator; drill press operator. Saveway Drive-in Cleaners: Countergirl; presser. Saw Mill Auto Wreckers: Officeman; tow truck driver; yardman. Warren Schloat Productions Clerk. Schmuckler's Cleaners: Countergirl: presser. Dr. Leon Scott: Dental assistant. PAGENO="0145" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 983 Sealectro Corporation: Machine operator; plator; quality control trainee; receiving clerk; screw machinist; shipping clerk. Semi alloy: Die setter; inspector trainee; machine operator; shirt marker and cleaner. Trans-poly Corporation: Machine operator. Vernon Tool and Die Company: Tool and die maker. Vogue Offset Company: Offset pressman. Wechsler International: Purchasing and handling trainee. Westrex Communications: Cablemaker. White Plains Food Vending: Route serviceman. Yonkers HardwareCompany: Stock clerk. NATIONAL URBAN LEAGUE REPORT PROJECT ENABLE Nature and Objectives ENABLE was the first nationwide demonstration project sponsored by volun- tary social agencies to be funded by the U.S. Office of Economic Opportunity. The Project was sponsored jointly by the Family Service Association of America, the Child Study Association of America and the National Urban League. It was carried out locally in 59 communities through the affiliates of FSAA and NUL, and financed by funds provided by their local Community Action Agencies. The objectives of this Project was to help poor families break the cycle of poverty and apathy which accompanies the chronic poor. Parents were helped to recognize their individual strengths as parents and to use singly or col- lectively, available community agencies and services more effectively. General Operational Procedures In selected poverty neighborhoods (CAP target areas), project "teams" used an educational group discussion method to reach and serve parents. A team con- sisted of a group leader and a community organizer, assisted by social work aides (employed residents of the target areas). The neighborhood group was organized as a pivot for exchange of ideas, education and community action. The team acted as the group teacher, leader, supporter and broker to various community services identified by the groups themselves as necessary for in- dividual or institutional change. Cities where Operational Projects ENABLE were conducted in 59 communities throughout the country. In six cities the Urban League was the sole participant. These were: Yonkers, N.Y.; Providence, R.I.; East Orange, N.J.; Atlanta, Ga; Jacksonville, Fla.; and Fort Wayne, Indiana. (For additional data, see Appendix II.) E~rtent of Federal Funding The national demonstration grant made by OEO to FSAA, NUL and CSAA was approximately $900,000. Local CAP grants to local affiliates of FSAA and NUL amounted to approximately two million dollars. A total of 66 Family Service agencies and 34 Urban Leagues participated in this project in their respective communities. Results The research and evaluation is not completed. As of this date 6,458 question- naires on parents have been received. However, the following activities have been recorded: Projects report the initiation of hot-lunch programs, playgrounds, lights and running water in the rural areas. Improvement in tenant-housing management relations; police-community relations. Credit unions were orga- nized and so were day care centers. All in all an impressive record was achieved for a program of such a short duration. Assessment and Recommendations The executive directors of the three participating agencies made the following remarks: Clark W. Blackburn, General Director, FEAA : "The participation of FSAA in ENABLE is a remarkably successful demonstration that the family service move- 80-084-67-pt. 2-1O PAGENO="0146" 984 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 ment does rise to the challenge of our times. In its brief lifetime, ENABLE has demonstrated new and collaborative methods and techniques to' reach arid affect the lives of thousands of irnpoverished:persons. `There is no doubt that the multi- plier effect of ENABLE will influence the practices of many agencies in the years ahead. Meanwhile FSAA is fully committed to pursue vigorously an outreach pro- gram to families in greatest need." Alfred D. Buchmueller, Executive Director, CSAA: "The drastic reduction of funds for operation of Community Action Programs in the war against poverty which has necessitated curtailment of PrOject ENABLE is indeed a tragic occurrence in the lives of many families livingin poverty who had begun to'gain a new basis for hope for themselves and their children. As the training compo- nent in the tn-agency collaboration of ENABLE it was most gratifying to witness unique achievements in realization of goills~ originally projected and to observe the implementation of innovative concepts formulated. It is Our firm belief that the commitments embodied in ENABLE must be maintained in order to provide, skillfully and flexibly, greater opportunities for strengthening parent-child-com- munity relationships leading to constructive action." Whitney M. Young, Jr., Executive Director, NUL: "During the past fourteen months, the National Urban League has had the opportunity of participating in this Project through 34 of our local affiliates. It has been an illuminating and re- warding experience-illuminating from the staadpoint that this collaboration of three national agencies has demonstrated the feasibility of teamwork and a co- ordinated approach to attacking some of the debilitating results of poverty. "It has meant helping poor families to utilize their own strengths as well as community resources to bring about a better life for themselves. It has meant the provision of running water for some families, paved streets, credit unions, consumer education classes, a TB campaign, and employment for over 250 neighborhood workers. "The National Urban League, is proud to have participated in Project ENABLE." Submitted by: * ** ` ` , DUDLEY CAwr.x~, Field Representative, Eastern Regional Office. MAY 31, 1967. " , SOUTHERN REGIoN~&L OFFICE REPORT II. K. Jones VISTA Train~n~q Center: Initiated June 30, 1966. Funding Amount: $231,937.00, OEO. Operating in Atlanta, Georgia, and Liberty County (Georgia) under the aegis of the Southern Regional Office, National Urban League. BRIEF DESCRIPTION The program is concerned with generic training for potentiril VISTA volunteers who need to understand the dynamics and techniques of working with the poor, especially in the South~ , .*. Through structured classroom instruction and unstructured field experiences the VISTA trainee is given six weeks of intensive pre service training The program services VISTA. trainees, 18-SO years of age. `The program utilizes Emory University, Atlanta University and selected skills specialists for classroom experiences: 40% 43 community services agencies in Metropolitan Atlanta provide the field work component:60%. A rural assignment is included. ` ` The program operates in six-week cycles of approximately 50 trainees per' cycle. ` * ` ` ` ` The program was begun ~Tune 30,1966, and the, termination date is August, 1967. N0TE.-Currently at the VISTA Office' (Washington, D. C.)"is a request for a second VISTA Training Center, to be established in the Western Region. We also are discussing ways VISTA volunteers can be used as added man- power with local affiliates. ProJect AS'SIST-Initiated December 1, 1966 to extend through March 31, 1968. Funding Amount: $231,000.00, U. S. Department of Labor. Program funded for a 15 month period PAGENO="0147" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF. 1 967 985 Operating in six states: Alabama, Florida, Georgia, Mississippi, Tennessee, South Carolina. Program under the aegis of the Southern Regional Office, National Urban League. 0 0 0 BRIEF DESCRIPTION 0 Project ASSIST will serve m part to orient disadvantaged groups to the merit systems in the region and focus primarily on Negroes 16-35 who are high school graduates or college dropouts still unable to secure jobs in categories commen- surate with their interests and potentials. It is designed to investigate the many variables which stand between this group of workers and successful competition for entry level and more advanced jobs. 0 0 0 0 Once the variables are identified the Urban League creates and administers an educational and placement oriented program which makes use of existing and new techniques of communication and training; small group exposure, role playing, team teaching se1f~analysis. 0 0 0 0 0 0 00 0 0 HUMAN REso~cEs PaOGRAM 0 0 0 1. NATURE AND OBrEOTIVE5 OF PROGRAM 0 0 0 Program was concerned with identifying, recruiting and training out-of-work, out-of-school people 16 to 40 and offering them individualized service. Program was designed also to include remediation, basic education, re-training and refer- rals to Manpower Development programs. An effort was0 also. made to avoid du- plicating existing programs. 0 In Chicago, the program is designed to recruit, prepare and place people in apprenticeships, primarily in the building trades. 2 AMOUNT AND SOURCE OF FEDERAL FUNDING Personnel includes: Project Director, National Coordinator, Executive Secre- tary and Secretary. 0 00 Total budget: $56,617.68. 0 0 0 0 0* 0 0 Sourse: U. S. Department of LabQr. 0 0 Dates: March 1, 1966-April 15, 1967. Chicago TJrbaH League Personnel includes: Executive Director (1/3 time), Project Director, Coach Supervisor, ten (10) coaches, Administrative Clerk and Secretary. Total budget: $273,834. 0 0 0 0 0 Source: U.S. Department of Labor. 00 0 0 0 0; 0; Dates: January 1, 1966-June 30,1967. 0 0 0 00 000 0 0 3 CITIES IN WHICH OPERATIVE a National Urban League contract is based in New York City at National Lrban League Office It operates on a nationwide basis b Chicago Urban League contract operates in the city of Chicago 4 GENERAL OPERATIONAL PROCEDURE A. The National Urban League (NUL) cooperated with the U.S. Department of Labor in implementing the Labor Department's Human Resources Program in cities where there were local Urban Leagues. B. NUL functioned as one of the national coordinators in developing and initiating, in cooperation with local Urban Leagues, programmatic relationships with private and public agencies which would have some responsibility for im- plementing the program. C. NUL assisted the Department of Labor in analyzing pertinent data to determine potential cities, target populations and urban areas for concentration. D. NUL aided Urban League offici~Is .in the presentation of proposals for funding of local Human Resources Programs. E NUL coordinated the development of and provision for regular follow up reports;to.be. submitted to~the U~S. Department of Labor. 0 PAGENO="0148" 986 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 F. NUL provided consultation to local Urban Leagues on the organization, supervision, orientation, interpretation and development of local staff activities. G. NUL assembled, coordinated and disseminated information regarding the aproaches, developments and needs of the program and target areas. The initial target cities were: Chicago, Hartford, Houston, Los Angeles, Rochester, and St. Louis. Other cities scheduled for participation were: Balti- more, Boston, Buffalo, Cleveland, Cincinnati, Detroit, Gary, Memphis, Milwau- kee, Newark, New Orleans, New York City, Omaha, Philadelphia, Pittsburgh, San Diego, San Francisco and Washington, D.C. 5. RESULTS a. National Urban League Proposals were submitted in Boston, Gary, Houston, Los Angeles, Milwaukee, New York City, Pittsburgh and St. Louis. Proposals were prepared but not submitted in Atlanta, Omaha, San Diego and San Francisco, but not submitted as State Employment Services claimed no funds. In Boston, we were unable to complete a revision of the proposal due to the resignation of the local Urban League's executive director. Only Chicago was funded. The remaining cities went unfunded as the various State Employment Services declined to use their Human Resources funds in this way. b. Chicago Urban League Program provides pre-apprenticeship training, placement and supportive fol- low-up services. Placements primarily in the building trades. Eighty-five (85) have been indentured as apprentices; 7 have passed examinations and await placement; 163 await examinations; 92 are awaiting applications. 6. RECOMMENDATIONS AND/OR OBSERVATIONS a. National Urban League 1. Any effort similar to our experience in the Human Resources Program must have a base of funding for local Urban Leagues from the Federal level if it is to be implemented. 2. The possibility for funding such an effort by providing the National Urban League with funds to subcontract to local Leagues should also be considered~ This offers a number of advantages, including the potential for more effective staff training, coordination and accountability. b. Chicago Urban League 1. There should be continued communication with the Chicago Urban League re: their progress in the project so that the entire Urban League movement can benefit from the experience. This is especially important as new techniques of recruiting and servicing applicants are being developed, knowledge of which can benefit other lJrban League programs. In this regard, the possibility of the Na- tional Urban League's LEAP program buttressing the efforts of the Chicago Project and maintaining the necessary communication has been suggested. 2. The U.S. Department of Labor should be encouraged to continue to com- municate with the National Urban League, on an informal basis, their view-s regarding progress in the Chicago Project so that, when appropriate, construc- tive coordination can be implemented. 3. There are so many similarities in the experience of counselors, supervisors and directors of various projects that a sufficient body of knowledge probably exists from which a training manual should be developed. Submitted by: MANUEL ROMERO, 2~ational Coordinator, Human Re8onrces Program. MAY 31, 1961. MILWAUKEE URBAN LEAGUE REPORT HOUSING INFORMATION CENTER In June 1964, the Milwaukee Urban League was awarded a $103,300 grant from 1IHFA, now HUD, for a thirty-three (33) month demonstration program to es- PAGENO="0149" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 987 tablish five (5) Housing Information Centers in the "Central City" area of Milwaukee. The "Central City" area covers some five (`5) square miles and has a population of 88000 60% of whom are Negroes. The Milwaukee Urban League estimates that the project area contains 80% of the Negro population (66,000) in Milwaukee. More than a third (1/3) of the housing units are deteriorating or dilapidated, which is more than three (3) times the rate for `the city. Approximately ~ of the units are owner-occupies and % renter-occupied. Four-fifths (%) of `the area's housing supply consists of one- and two-family structures. The project provided counseling on housing problems to families in five (5) strategically located centers that were open evenings and Saturdays. Low-income families were offered advice and guidance in finding decent and adequate housing within their means. Tenants were offered advice in regard to their rights and responsibilities as tenants. Owners were counseled in regard to bringing their property up to code standards, finding reliable contractors and obtaining finan- cing. Prospective house buyers were aided in selecting good buys and counseled in avoiding overcharges, securing financing and other relevant matters. The demonstration program is currently being evaluated. A preliminary look :at the data indicates that 647 families were served, 67% of whom were tenants. Approximately 54 families sought advice in regard to buying homes, the re- mainder, some 160, were owner-occupants. The median incomes of tenants were $4,392 of owners, $5,520. Over half the families were paying $10 to $20 a month more than 1/4 of their income for housing. Of the families seeking help approxi- mately 26%, or some 171, could not be helped because there was a lack of stand- ard units in the housing supply. Another 15% could only be given partial help for similar reasons. The families serviced presented a constellation of problems. Some 545 groups ~of problems were identified or classified, of which approximately 52% stemmed largely from the poor physical condition of dwelling units and 48% stemmed largely from personal or family problems. Slightly more than ~ of the family constellation problems were related to finances. Submitted by: PAGEr ALvES, Associate Director, Housing. ~ 31, 1967. WASHINGTON URBAN LEAGUE REPORT NEIGHBORHOOD DEVELOPMENT CENTER The neighborhood development center program is designed to assist residents of a predominately low-income community in finding solutions to the problems which contribute to their continuing poverty and circumstances; and tO help establish and maintain a stable community and stable families in the face of four urban renewal projects, a freeway project, and a school site expansion. The target area for this program contains approximately 24,000 persons. In three of the four census tracts served, the median income is $3,600. The median income for the four tracts combined is $4,025. This community action program is administered by the Washington Urban League, a delegate agency for the United Planning Organization, Washington's `CAP agency. The Urban League directly administers the community organiza- tion program, including Neighborhood Development Youth Program, and a con- sumer action program. It also coordinates and loosely administers six other programs as component parts of the neighborhood center. These include a credit union, a group day care center, a manpower program, a family counseling unit, a housing improvement center, and a neighborhood legal services project. The Urban League-administered programs are developed and carried out by a multitude of citizens' groups, supported by a staff of approximately 32. This num- ber includes about 25 neighborhood residents. On the professional staff are com- munity organization specialists, a consumer specialist and a city planner, hired `as a housing adviser. ` ` The policy-making body for the Neighborhood Center is the Neighborhood Advisory Council, composed of representatives from the more than 25 block clubs organized by the Center, 12 citizens' committees, and other groups operating in the neighborhood. PAGENO="0150" 988 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 COMMUNITY ORGANIZATION In attempting to realize the goals established for this program, specific ob- jectives have been set in seven broad areas: housing, health, education, welfare, employment, youth opportunity and senior citizenship. By far, the greatest effort has been expended on the problems of housing. Informational programs about the urban renewal porcess citizen participation in planning, the selection of school sites and freeway routes have resulted in a growing body of residents knowledgeable about the basic questions involved in the implementation of these processes. The failure of the city to deal adequately with the problem of relocation housing and housing for low-income families provides citizens with a major area of concern and action. Major successes have included the rehabilitation of an apartment building to provide relocation housing for freeway area residents; an intensive maintenance program to repair homes (including abandoned and boarded-up units) in the redevelopment project area; and the development of an "air rights" demonstration housing project for the freeway area. The Neighborhood Council issued a report dealing with. relocation problems and including a . number of recommendation to improve and humanize the reloca- tion process, the majority of which have been adopted and effected. The im- mediate construction of public housing in the urban renewal area was an issue which was dramatized during a direct action campaign, resulting in the com- mitment of three government agencies to work speedily to assure that con- struction would begin within a three-month period. Citizens have been involved also in solving the health, education and welfare problems of the community. They have defined the community's health needs, and have established an informational program which has served two purposes: the education of the committee members, and the education of the community- at-large. The Welfare Committee appeared at Congressional hearings and wrote letters to . the President and . Congress to press for an increase in welfare pay- ments. Within the past~ year, the senior citizens, of the target area have been organized and have established a center for recreational activities, meetings and programs, and a thrift shop; and have lobbied for increased benefits. In the area of education, several successes have been realized, notably the reduction in the overcrowded conditions in several area schools, and obtaining a commit- ment from the school superintendent for ~anew school within the urban renewal area. One of the major concerns of the Emopleyinent Committee was the obtaining of jobs for persons with police records. This concern led to the establishment of an organization of 300 rehabilitated ex-convicts which has been able to make significant changes in the ability of ex-convicts to secure jobs. In addition, a special recruitment for the' custodial and maintenance civil service registers resulted in' numerous placements. Through recommendations of the Neighbor- hood Council1 civil service jobs (federal) were created ,for, the category of urban renewal aides, where are sub-professional jobs for community residents. Neighborhood Development Youth Programs. One of the earliest objectives set by the Neighborhood Advisory Council was to establish a youth program and to provide more neighborhood recreational facilities and youth centers. Through re-allocation of community organization funds, a summer program was provided in 1966 for youth, in which more than 300 youngsters were involved. A football team for' older youth (most of whom were high' `school dropouts) was' estab- lished, and several youth groups with a community action orientation were organized. The teens established an employment bureau called JOBS, and par- ticipated in a summer job orientation clinic which provided information about opportunities, interviews, civil service procedures, and testing procedures. `At the close of the summer, funds were made available for a year-round youth program based on a city-wide format. The' Neighborhood Council withheld its acóeptance of the program `until a successful effort had been made ,by the dele- gate agency to effect changes in the proposed program structure. These changes were in line with a comprehensive proposal which the Center had developed months earlier. By December, a youth staff had been hired to develop action programs in the areas of employment, recreation, police relations and educa- tion. `Clubs and communities have been formed among youths, ages 10 to 19; special events and programs have been carried out; a youth staff has been trained; and a central center has been established. PAGENO="0151" ECONOMIC OPPORTtTNITY. ACT AMENDMENTS' OF 1967 989 CONSUMER ACTION ``H The consumer action program has two major goals, to assist families in stretching dollars through a broad educational program and to assist families in understanding their responsibilities and protecting their rights as consumers The program has a policy-making body, the Consumer Action Committee, which is a committee of the Neighborhood Advisory Council. Informational groups in the program include the home buyers group and the library club, and special interest groups, including residents interested in family budgeting, home manage- ment, food and nutrition demonstration and credit buying education. Action groups, in addition to the Consumer Action Committee, include the Welfare Committee and the cooperative buying club. The buying club was one of the most; successful groups organized. Its back-to- school clothing project involved 40 families and its Christmas toys and cloth ing project involved 60 families who were able to purchase merchandise at a 28 percent savings. ` The objectives of changing abusive merchandising practices by neighborhood grocers and door-to-door salesmen had measurable success in one direct action campaign leveled at a corner grocer who signed an agreement with a committee representing five block clubs The agreement promised certain changes in his merchandising practices and customer relations. Consumer groups supported and participated in lobbying for legislative changes which would protect the consumer from fraud, deception and misrepresentation. Both the truth-in-packaging and truth-in-lending bills were supported through a letter writing campaign and through participation in visits to Congressmen and officials. Another advance toward the objective of a "money-wise community was the establishment of a consumer reading room, where free literature and circulating and non circulating materials are available Residents have participated with other groups in working for reforms in the food stamp program. Residents ~are interested in lowering the purchase, price of stamps and the amount of money families have to put-up as lump-sum payments; and permitting more families in debt to participate in the program. ` OBJECTIVES FOR THE OUREENT YEAR While the community has been able to cOtheto grips with many of its problems and to effect some significant changes, many more problems remain to be solved. In the area of housing nothing effective has been done about the whole question of evictions about need of reform in the landlord and tenant court about in creasing the welfare shelter allowance about providing more police protection for residents in the urban renewal area Nor were citizens about to come to grips with the problem of how to help low income families purchase homes how to close the gap between the low income housing rentals and moderate-income housing rentals how to change the rules which bar couples living in a non legal" marriage from eligibility for public and moderate income housing, or hOw to provide general information to individuals about the do $ and don ts in signing leases. In the area of employment, unrealized program objectives are many. They include reaching the hard core unemployed, those who have given up hope of finding satisfactory jobs and who are no longer counted in labor market statis- tics; attacking on a massive basis the' problem of functional illiteracy in the community; providing cheap transportation from the inner city to suburban job locations helping the under employed in achieving job up-grading reducing racial discrimination in employment and reducing job discrimination against mothers who have children born out of wedlock. Residents have been unsuccess- ful in arranging contracts, agreements, or working relationships with construc- tion companies which will be developing the urban renewal area, and in arrang- ing for help for the large number of alcoholics in the area. In the area of consuming, little has been done to stop unfair credit practices in neighborhood grOceries and other stores. Residents are still reluctant to stop patronizing a merchant in the area who will extend them credit. Other unmet objectives include these: developing more consumer education programs in the public schools and with youth groups; providing debt management `counseling to families with complex debt problems which can be' solved only through long- PAGENO="0152" 990 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 range planning; development of more consumer programs for block clubs; chang- ing current practices which require low-income families to deposit large sums for public utility services; and relating consumer problems and health problems. Submitted by: MAY 31, 1967. APPENDIX I DAvID RUSH, Program Director. REGION I: EASTERN Hartford, Connecticut New Haven, Connecticut Washington, D.C. Baltimore, Maryland Boston, Massachusetts Springfield, Massachusetts Elizabeth, New Jersey Englewood, New Jersey Morristown, New Jersey Newark, New Jersey New Brunswick, New Jersey Albany, New York Buffalo, New York New York, New York Rochester, New York Syracuse, New York White Plains, New York Lancaster, Pennsylvania Philadelphia, Pennsylvania Pittsburgh, Pennsylvania Providence, Rhode Island REGION 1I MIDEASTERN Louisville, Kentucky Battle Creek, Michigan Detroit, Michigan Flint, Michigan 4lrand Rapids, Michigan Lansing, Michigan )Iuskegon, Michigan Pontiac, Michigan Akron, Ohio Champaign, Illinois Chicago, Illinois Lake County, Illinois Peoria, Illinois Springfield, Illinois Anderson, Indiana Elkhart, Indiana Fort Wayne, Indiana 4lary, Indiana Indianapolis, Indiana Birmingham, Alabama Little Rock, Arkansas Jacksonville, Florida Miami, Florida Tampa, Florida Atlanta, Georgia New Orleans, Louisiana Phoenix, Arizona Inland Area, California Los Angeles, California San Diego, California San Francisco, California Canton, Ohio Cincinnati, Ohio Cleveland, Ohio Columbus, Ohio Dayton, Ohio Massillon, Ohio Springfield, Ohio Warren, Ohio Youngstown, Ohio REGION In: MIDWESTERN Marion, Indiana South Bend, Indiana Wichita, Kansas Minneapolis, Minnesota St. Paul, Minnesota Kansas City, Missouri St. Louis, Missouri Omaha, Nebraska Milwaukee, Wisconsin Racine, Wisconsin REGION Iv: SOUTHERN Jackson, Mississippi Winston-Salem, North Carol in a Oklahoma City, Oklahoma Tulsa, Oklahoma Columbia, South Carolina Memphis, Tennessee Richmond, Virginia REGION v: WESTERN Colorado Springs, Colorado Denver, Colorado Portland, Oregon Seattle, Washington PAGENO="0153" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 19.67 991 I. EASTERN REGION Baltimore, Md.: Project Enable 1 On-the-job training Bergen County, N.J.: Westwood Day Care Center On-the-3ob training Boston, Mass.: Project Enable On-the-job training Buffalo, N.Y.: On-the-job training East Orange, N.J.: Project Enable Elizabeth, NJ.: Project Enable Hartford, Conn.: On-the-job training Newark, NJ.: Project Enable New Brunswick, N.J.: Project Eilable New Haven, Conn.: On-the-job-training~~ - New York City: Project Enable Operation Open City Philadelphia, Pa.: Project Enable On-the-job-training Pittsburgh, Pa.: School-age pregnant girls Prejob interview Maternal and child care_ - - On-the-job-training Project Enable Providence, RI.: Project Enable Rochester, N.Y.: Project Uplift On-the-job training Washington, D.C.: Newcomers project Neighborhood centers, community or- ganized. Neighborhood centers, consumer action Neighborhood housing On-the-job training Westchester County, N.Y.: Neighborhood Youth Corps Project Enable On-the-job training National Urban League: National Urban League coordination office. National Urban League on-the-job training program in New York City. II. SOUTHERN REGION Atlanta, Ga.: Project Enable MDTA on-the-job training Jacksonville. Fla.: Project Enable On-the-job training Little Rock, Ark.: Consumer education Project Enable Memphis, Tenn.: On-the-job training Miami, Fla.: Project Enable New Orleans, La.: Child development On-the-job training Project Enable Oklahoma City, Okla.: Urban League job development and employment center. Project Enable Richmond, Va.: Project Enable On-the-job training Tampa, Fla.: Project Enable See footnotes at end of table, p. 993. OEO Labor OEO Labor OEO Labor OEO OEO OEO OEO Labor OEO $61,000 155,000 (2) 157, 546 73,000 256,000 335,940 31, 756 38,000 75,408 75,000 25,000 200,000 218,401 362,910 97,000 412,000 105,690 21, 690 71,428 386,412 17,000 21,000 40,000 203,000 Family service (except Yonkers). APPENDIX II Ewteivt anet evaZuatioH of an~tipoverty progranls u4uZer Urba4l Lea~gue auspiccs~ by region a41d city Programs under Urban League auspices Source of funds Amount of Federalfunds Joint auspices . OEO Labor OEO Labor OEO Labor do OEO OEO Labor OEO OEO Labor OEO OEO OEO Labor OEO OEO OEO Labor OEO OEO OEO Labor OEO OEO OEO OEO Labor OEO OEO Labor Family service. Do. Do. Do. Do. Do. Do. :~Do. Travelers aid. 40,114 (23) (24) 8,573 318,000 (2) 182,000 176,000 81,436 do 388,269 OEO OEO Labor OEO 35,477 548, 126 32, 530 255, 750 24,855 29, 766 276,004 52,000 139, 612 70,156 30,000 73, 772 40,230 26,000 58,000 30,831 Family service. Do. Do. Sunbeam Home and Family Center. Family service. Do. PAGENO="0154" 992 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 II. SOUTHERN REGION-continued Tulsa, Okia.: Summer Headstart 1965 lleadstart Follow Through 1965 Medicare Alert program Project Enable Summer Headstart 1966 Program development Program Development Supplement Program administration Jobs Unlimited project Jobs Unlimited Extension New day child development center On-the-job training m. MIDEASTERN REGION Akron, Ohio: Akron-Summit tutorial program - On-the-job training Project Enable Canton, Ohio: On-the-job training Cincinnati, Ohio: Lincoln Heights Social Work Project On-the-job training Cleveland, Ohio: Project Enable On-the-job-training Project Enable Columbus, Ohio: On-the-job training Dayton, Ohio: On-the-job training Flint, Mich.: On-the-job training Grand Rapids, Mich.: Pocket Parks On-the-job training Lansing, Mich: Project Enable On-the-job training-greater Lansing_... Louisville, Ky.: Neighborhood service Community organization program MDTA-On-the-job training Muskegon, Mich.: Neighborhood Youth Corps On-the-job training Springfield, Ohio: Project Enable Warren, Ohio: Project Enable On-the-job training IV. MIDWESTERN REGION Champaign County, IlL: Project Enahle~.. Chicago, Ill.: Education, human resources Project Enable On-the-job training Fort Wayne, md.: Project Enable Gary, md.: On-the-job training Kansas City, Mo: On-the-job training See footnotes at end of table p. 993. OEO - OEO - OEO - OEO - OEO - OEO - OEO - OEO - OEO OEO OEO Labor OEO Labor OEO Labor OEO Labor OEO Labor OEO Labor -do (2) Labor OEO Labor OEO - OEO Labor - do do OEO OEO Labor OEO Labor - OEO Labor OEO Labor do Eatent and evaluation of antipoverty programs under Urban League auspices, by region and city-Continued Programs under Urban League auspices Source of funds Amount of Federal funds Joint auspices $354, 957 67,351 22,178 19,693 406,525 67,351 10,236 92,718 30,997 30,141 220, 2G3 117,331 44, 517 110,225 47, 000 88,000 26,488 148,000 231,008 64,000 134,139 130,236 118,543 72,000 100.082 32,520 112, 117 245,435 130,679 262,616 115. 970 129,541 33,000 33,000 20,658 31,565 231,000 208,000 237,324 32,698 166,900 238,145 Family service. University of Akron. Family service. Hamilton County Board o Education. Family service. Grand Rapids Junior Chamber of Commerce. Family service. Settlement houses and community councils. BAT and national contracts. Family service. Do. Do. FSA. PAGENO="0155" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 993 IV. MIDWESTERN REGION-continued I~1ilwaukee, Wis.: Housing On-the-job training Minneapolis, Mlnn.: Project Enable On-the-job training `Omaha, Nebr.: Project Enable On-the-job training Peoria, Ill.: Neighborhood Youth Corps - -- -St. Louis, Mo.: Comprehensive manpower program Neighborhood action program On-the-job training St. Paul, Minti.: FrojectEnable V~ WESTERN REGION Colorado Springs; Cob.: Project Enable - -- Denver, Cob.: Project Enable Los Angeles, Calif.: Operation Headstart Nickerson Gardens project Operation Beacon Light On-the-job training Phoenix, Ariz.: MDTA * On-the-job training Portland, Oreg.: Job development On-the-job training Riverside, Calif.: Job counseling, development, and place- ment. On-the-job training San Diego, Calif.: Education San Francisco, Calif.: On-the-job training~ Seattle, Wash.: Central area motivation program 34,741 28,000 40,000 28,335 61,242 3,000,000 Familyand children services. Jewish family and children services. GOCA, family children serv- ices. Illinois Farmers Union. Human Development Corp., Jewish employment and vocational services work opportunity unlimited. Human Development Corp. Family service. California State Employ- ment Service. `Eivtent anZ evaluation of antipoverty programs nntler Urban League auspices, by region anti oity-Continued Programs under Urban League auspices Source of funds Amount of Federal funds Joint auspices $103,300 120,576 60,645 80,336 73,000 33,702 40,000 2,081,915 1, 573, 758 845, 144 64,018 HUD Labor OEO Labor OEO Labor do OEO OEO Labor OEO OEO OEO OEO OEO OEO Labor HEW, Labor Labor OEO Labor OEO Labor OEO OEO Labor OEO Labor CAP. Family service. 663, 721 107, 372 77,045 126,818 66,368 142, 123 70, 840 41,000 890,229 582, 562 .264,805 Family service. Seattle-King County action program. 1 Project Enable was conducted by the National Urban League in cooperation with Child Study Associa- tion of America and the Family Service Association of America and.funded by OEO. Figures cited in this table, are total figures for the Enable project in any given city, regardless of whether one or all of the 3 sponsoring agencies participated. . . Not available. Total of $1,770,558 Federal funds reported forwhat are apparently 10 programs, of which 1 is under aus- pices of WUL. . 4 Similarly, total of $186,885 reported for 8 programs, of which 1 isWUL. `Including Yonkers, Mount Vernon, and Portchester. PAGENO="0156" 994 ~ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 * APPENDIX III Urban League participation in non-Urban League antipoverty programs, by region asut city Non-Urban League antipoverty programs Manner of Urban League participation Advisory committee - Urban As consultant ~ Other : ~ Per- sonal League repre- Paid Unpaid senta- tive I. EASTERN REGION Albany, N.Y.: None reported Baltimore: (Consumer protection program X Sponsor. On-jobtrainingproject X Do. MDPA x x NYC Employed 2 youths. Project enable - ~ Sponsor. Work-experience program Referred applicants to jobs. Job Corps Referred applicants. WICS Do. Headstart *_~__ Information resource, parent referraL SninU Business Development Cen- X X tex~ Target city youth program X Street club workers project - Referred to jobs. VISTi X Training participation. Homemaker services Do. Emergency services Proposedprograminlg63. Baltimore Youth Opportunity Cen- X X Referred applicants to jobs. Neighborhood parent schools 7 Training participation. Community action agency X X Participated in organization. IBergen County, N.J.: Bergen County community action X X program. Westwood day care center x X Sponsor. Bis~alo, N.Y.: Opportunities Develop- X ment Corp. (ODC). Essex County, N.J. (Newark) Furnishes trainees. Hartford, Conn.: Comprehensive manpower x Project Concern x x Lancaster, Pa.: Prep MDTA ~- x CAP X X Enable X X Middlesex County, N.J.: Enable x x Legal Services Corp.~ x x Job Corps (Camp Kilmer) x x Morris County, N.J.: Neighborhood Youth Corps x X x OJT x Save CAP program x x x Headstart x x Westchester Co., N.Y.: None reported.. New Brunswick, N.J.: Legal Services Corp x x MCEOC (Poverty Corp.) x x Job Corps Community Relations Council X X MDTA Advisory Council x Human Resources Comm. (OEO)~ X Area board I (local poverty group)~ x NewYork City: Haryou-act x New York City Rent and Rehabili- tation Administration Operate 114th St. project. Two Bridges Neighborhood Council Coordinate efiort. Assist children on education. Central Brooklyn Coordinating X Active member. Council. PAGENO="0157" I. EASTERN REasoN-continued New York City-Continued Interracial Council for Business Opportunity. Jewish Family Service Neighborhood Youth Corps `United Neighborhood Houses Onondaga County, N.Y. (Syracuse): Adult basic education program Small Business Development Cen- ter Syracuse Manpower Coordinating Committee Philadelphia, Pa.: None reported Pittsburgh, Pa.: Project Enable Day care and child development~_ -- School volunteer association pro- gram Providence, R.I_ :Springfield, Mass.: None reported Washington metropolitan area: Metropolitan Citizeias Advisory Council Step-Tip (Operation Champ) - Medicare Alert Housing Development Corp Model School Division Neighborhood Development Center 1. Component services 2. Credit union 3. Neighborhood legal services~... 4. Neighborhood services 5. Group daycare 6. Neighborhood employment network. 7. Small business II. SOUTHERN RECION Atlanta: Economic Opportunity Atlanta, Inc Small Business Development Center Volunteers Task Force Project Hire_.. Golden Age Employment Service - - Summer recreation program - Foster grandparents demonstration project. Birmingham: No specific program par. ticipation to date. Jacksonville: Greater Jacksonville Economic Op- X portunity, Inc. MDTA program~ Organize agencies of council. Coordinate effort on Enable. Maintains 300 to 400 Neigh- borhood YOuth Corps students. In all programs in Provi- dence, executive director Is on executive committee and serves as secretary of board of directors. A staff member is paid consultant to a manpower training program. Supervised in ULNDC area. Volunteer recruitnient. Will direct contractor for- 1. Community organi- zation. 2. Consumer action. 3. Neighborhood devel- opment Youth Cen ter. 4. Neighborhood hous- ing. Center director provides general supervision and coordination of all com- ponent services. ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 995 Urban League participation in non-Urban League antipoverty programs~ ~ region an~I city-Continued Manner of Urban League participation Advisory As consultant committee Non-Urhan League antipoverty programs - Paid Unpaid Other Per- sonal Urban League repre- senta- tive x x x x x x x x x x x x x x x x x x x x x _ x x x x PAGENO="0158" 996 ECONOMIC OPPORTUNITY ACT AMENDME~S OF 1967 Non-Urban League antipoverty programs Per- sonal II. SOUTHERN REGION-continued Little Rock: Coordinated social services Day care Family planning Headstart Homemaker service Legal aid Neighborhood organization X Neighborhood Youth Corps Development and administratiom Opportunities industrial center X Medicare Alert X Memphis: Early childhood development Early childhood awareness MAP-South Community involvement planning Conduct and administration NYC out-of-school project Miami: Executive director serves on the technical advisory committee of the local CAP agency. The president of the board of directors of the Urban League serves on the policymaking body of the CAP as a representative of the league. New Orleans: TCA's OJT and NYC C.O.-Irish Channel Action Foun- dation. Neighborhood development centers_ Legal assistance program Oklahoma City: No specific participa- tion reported. Tampa, Fla.: Community Action Agency Neighborhood Service Agency Foster Grandparents ESEA Small Business Development Cen- torI Headstart/COPe Upward Bound Tulsa, Okia.: SuinmerHeadstart Medicare Alert Enable Program development Program administration Jobs unlimited New day child development centers On-the-job training - III. MID-EASTERN REGION x x x x x x x x x x x x x x x x x x x x x x x x x x x x x Akron, Ohio: None Canton, Ohio: Headstart - Medicare Alert MDTA x Cincinnati, Ohio: Lincoln Heights X X School social worker project. Cleveland, Ohio: AIM, jobs X X Opportunity 1060 X X Columbus, Ohio: Columbus Metro- politan Area Community Action Organization. Urban League participation in non-Urban League antipoverty prograrn~, by~ regi~on and city-Continued Manner of Urban League participation Advisory committee As consultant Other Urban League repre- senta- tive Paid Unpaid x x x x x x x x x x x x x x x V x x x x x x x x x x x x x x x x x Urban league executive served as acting director- of CAP until JunejlO6& Organized ~program. On board o directors, executive committee. PAGENO="0159" III. MID-EASTERN REGION-Continued Dayton, Ohio: Planned parenthood West Dayton self-help NYC (out of school) Title V Support. council on prevent. effort. - Latch Key TutoriaL Detroit, Mich.: Mayor's human re- sources development agency. Flint, Mich.: Summer Headstart Medical-dental care for preschooL - -- AD C mothers prevocational train- ing. Extended school year MDTA-Office machine repair Grand Rapids, Mich.: Community action program Medicare Alert tlpward Bound Headstart Legal services Neighborhood Youth Corps Lansing. Mich.: Capitol area economic opportunity comm. Youth opportunity center, ME SC.. Louisville, Ky.: Upward Bound Community action, adminiStration.. Headstart VISTA Community manpower survey NYC Adult basic education program High school equivalency MDTA-Institutional Apprenticeship training Program. Vocationairehabilitation Massillon, Ohio: Headstart NYC Muskegon, Mich.: Muskegon Area Skill Center Manpower development prOgram. - Community action against poverty~. NYC Pontiac, Mich.: Oakland County OEO Commission OEO Education Committee OEO Technical Committee Project 100, title I Springfield, Ohio: Citizens opportunity program. Warren, Ohio: Neighborhood center conference (Dec. 3, 1966). Neighborhood groups for commu- nity action. x x x x x x x x x x x x x x K x K x K K x x x x K K K x x x K X Also chairman, health sub- committee. Recruitment of teachers and students. Helped select employees. Assisted in training workers. Helped staff project. Worked with sponsors; place- ments. Recruitment. Recruitment of trainees. Leap. Supplied teachers and teacher aides. Group guidance counselor. Board of directors. Do. UL staff services. ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 997 Urban League participation in nosv~TJrban League antipoverty program$, by region and city-Continued Manner of Urban League participation Advisory As consultant committee Non-Urban League antipoverty programs Per- s~nal Urban League repre- senta- tive Paid Unpaid Other x x K K K x K K x x x K x x K x x K x x K K K K K x x PAGENO="0160" 998 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Urban Leagate participation; in n.on-Urbai~ League antipo~erty progi~am-s, by region an4 ctty-Continued Non-Urban League antipoverty programs Manner of Urban League participation Advisory I committee Urban As consultant Other Per- sonal League repre- Paid Unpaid senta- tive IV. MIDWESTERN RE(10N Anderson, md.: Headstart Community action council Homemakers service Job Corps recruitment Day care service Job counsel, referral, literacy Champaign County, Ill.: Headstart Technical advisory Neighborhood centers Upward Bound Elkhart, md.: Headstart Fort Wayne, lied.: None reported Gary, md.: Upward Bound MDTA Headstart Job Corps SBA NYC Indianapolis: Manpower development and train- ing Flanner House education and dem- onstration project Neighborhood Youth Corps Kansas City Mo.: Human ftesource Corp Planned parenthood MotivatiQn for teenage girls Consumer education Neighborhood center Neighborhood Job Corps Manpower development training - - - Apprenticeship information center~ - Marion, md.: No programs Minneapolis, Mien.: None reported Omaha, Nebr~: Greater Omaha Community Action, Inc. Small business development center~ Peoria, Ill.: Neighborhood Youth Corps Product~pp m~chine operator Racine, ~Wis.: None - St. Louis, Mo.: None reported * St. Paul, Minn.: North Central Voters League X Project Summer South Bend, md.: Comrniinityaotipnprogram -- SmaliBusipess Development Center~I Springfield, Ill.: NYC x Title I X Wichita, Kans: MDTA-KapSas State Employ- N ment Service: Headstart N Upward Bound N Family planning~ I x x N x- x N N x x x N x x x x N N N N N N x N N x N. N x N N N N N N N N N N x x Have CAP organization, but have not been able to get it funded. Placement. Member of charter advisory committee. Screened, recruited, and re- ferred. Interviews, referrals, and clerical assistance. Recommended program. Served through Enable. Board member. N - N Headstart N N N N x N x ix N PAGENO="0161" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 999 Urban League participation in non-Urban League antipoverty programs, by region and city-Continued Manner of Urban League participation Advisory As consultant Non-Urban League antipoverty programs committee Urban Per- League sonal repre- senta- tive Unpaid Other Paid v. WESTERN REGION Colorado Springs: Enable Study group, Peoples Methodist Church Denver: No specific participation re- ported. Los Angeles: Teen post program Oklahoma City: No specific participa- tion reported. Phoenix: Leap community service center Neighborhood Youth Corps Operation Leap (CAP) Job Corps MDTA-OJT Booker T. Washington Community Councils and Headstart and day car& center. Maricopa County Camps comm State camps committee skills bank - Operation Ser. Mexican-Americans.. Portland, Oreg.: Citizens antipoverty committee Albina Citizens Advisory Comm~ Headstart - State advisory comm., MDTA - City schools system Job Corps Riverside, Calif.: Economic opportunity board Dependency prevention committee. San Francisco: Program development Central administration Area development program Neighborhood legal services Bayview-Hunters point Housing Potrero Hill manpower project Horizons Unlimited Summer youth employment San Francisco Advisory Comm., MDTA. 9-county advisory comm., MDTA Community training program Community action training program Seattle: Seattle Opport. Indust. Center Central area motivation program... Justice court probations, parole x x Furnish group leader. x x x x x x x x x x x x x x x City: APPENDIX IV POVERTY PROGRAMS Answer on separate sheets according to your elvperience and observations. 1. Briefly explain ratings on page 1. 2. What results have been achieved in relieving poverty in your corn- xuunity? Operate 2 teen posts; lower level of involvement than delegate agency, with no financial accountability. x x x x x x x x x x x x x x x x x x x x x x x x x x x x 8O-084-----67-pt. 2-11 PAGENO="0162" 1000 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 3. What are the primary obstacles to greater achievement? Lack of com- munity concern? Lack of fund? Lack of coordination? Inefficient manage- ment? Other? 4. What recommendations would you make for improving the overall anti- poverty program in terms of efficiency, coordination and scope? What fea- tures of the program should be kept and expanded and which should be scrapped? 5. What have been the benefits of OEO? How effective is OEO as an oper- ating agency? Are there management deficiencies in OEO? 6. To what extent have poor people been involved in the War on Poverty in your community? 7. To what extent has the Community Action Program been effective in achieving its objectives? 8. Are there self-defeating delays in getting programs underway because of "red-tape?" If so, characterize briefly. 9. How much attention has been directed to the elderly and rural poor? Please return to: NATIONAL URBAN LEAGUE, 55 East 52nd Street, New York. N.Y. 10022. Deadline: May 5, 1967. Mr. S1-nnvER. I could now respond to the outhouse question. Mr. SCHEUER. I ask unanimous consent for Mr. Shriver to have 5 minutes to address himself to the outhouse question. Mr. SHRIVER. It won't take me that long. [Laughter.] First of all, we have not been doing any surveys of that kind. Those are surveys made by EDA. The paper got that confused, so we have not done any. Thank you. [Laughter.] Mr. SCHEUER. You mean you have neglected that whole area of poverty? [Laughter.] Mr. Shriver, I am very much intrigued by your remarks about the cause-effect factor in these urban disturbances. From your research can you give us your judgment as to what the causal stimuli are, what conclusions you have come to in the evaluation of your programs as to which of these programs or which other condi- tions in a community militate for or against the demonstrations? What are the causes that produce them? If it isn't the amount of expenditure, is it the number of programs? What is it? Mr. SiinIvER. Actually we are trying to address our research money and programs to the elimination of poverty. We have not gone into the business of analyzing riots, as if that were our responsibility. I do know, however, that a substantial number of mayors of cities where these disturbances have arisen have, in fact, publicly and privately, expressed their opinion that the community action aspect of our work has been extremely helpful to them not only in some cases postponing or eliminating a potential riot, but in minimizing these when they do arise for the simple reason that the neighborhood people who are par- ticipating in community action are a direct contact between city ad- ministration and the people in the riot-torn areas, as the phrase goes. So they have a means of communication which did not exist prior to having this community action device available to them to use in these difficult situations. Mr. SGHEUER. In other words, it provides a new leadership stemming right from the grassroots? Mr. SHRIVER. That's right, so it opens up the lines of communica- tion as well as, say, before the very poor in these areas and the estab- lished authorities, so that the community action program in many, PAGENO="0163" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1001 many cities has been extremely helpful, but I don't believe that we have to finance any large-scale research programs on riots. Needless to say, I was wrong, there is one. It was the study of the Watts riot by UCLA and it is not completed. Do you want to talk about that great study that is not completed? Mr. LEVINE. It is not completed, but we do have preliminary re- ports on it. It was a study obviously triggered by the riot but it was a study which we. thought would enable us to get an insight into the causes of the interconnection of riots with poverty. The study itself, I think, will be made available to the committee, but the kinds of conclusions that it came to are the ones which I think you would expect, Mr. Scheuer, that these causes are closely connected to poverty. This still doesn't mean that we are going to change our action in order to use our poverty program to prevent riots. it does mean that in looking for knowledge about the effectiveness of these programs, this does have some relevance. Mr. SCHEUER. I quite agree and I am sure we will all be interested in getting copies of that report. Mr. Shriver, in reading the transcripts of the most interesting testimony yesterday, I notice that most of the testimony on your family planning program, which I am most enthusiastic about, was directed to their activities in the community health centers which I am also very enthusiastic about, having seen three of them in Denver, Boston, and New York. I would very much like to get a further report, a comprehensive report, on your family planning program and I wonder if you could invite Dr. English back here again so that we can let him give us such a full report, and I would also like to ask you to have Dr. English and perhaps some of your other people address themselves to the problem that has been ventilated in the Senate on the question of severe health deficiencies in the South. I particularly refer to an article that absolutely horrified me in the June 17 issue of the New York Times by Robertson. The quotes from that article from specialists, nutritionists, doctors, are enough to shock the conscience of any American and I would like to know if the leadership of the poverty program had some answers to the desperate health and nutrition problems in America which were adverted to incidentally in the national advisory council under title I of the National Elementary and Secondary Education Act, many learning deficiencies were caused by extreme hunger in schools. They outlined the problem of kids half asleep in the morning because the kids hadn't had a square meal since the school lunch the noon before. I would be grateful if you would bring Dr. English back to us for a detailed consideration of the family planning program and the problem of health and nutrition. I would also like to ask unanimous consent for me to put some questions and answers in the area of new careers to Mr. Shriver in the record at an appropriate point. Chairman PERKINS. Without objection it is so ordered. Chairman PERKINS. Mr. Dellenback? Mr. DELLENBACK. Thank you, Mr. Chairman. . Mr. Johnson, how many lawyers do you have nationwide participat- ing in this program? PAGENO="0164" 1002 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. JOHNSON. You mean staff attorneys, employed personnel? Mr. DELLENBACK. Either full time or part time. Mr. JOHNSON. We have funded now approximately 1,400 full-time Httorneys. Mr. DELLENBAOK. How about part time? Mr. JOHNSON. Very few. I would say 25 or under. I don't have the exact figures on that. Mr. DELLENBACK. This covers all the various programs throughout the Nation? Mr. JOHNSON. That's right. Mr. DELLENBACK. We are not talking about staff counsel for OEO here in Washington? Mr. JOHNSON. No, we are talking strictly about full-time lawyers employed by legal services projects rendering services t.o indigents. Mr. DELLENBACK. What about the basic criteria that you establish for the minimum criteria for participants who want help of this nature? What are the basic criteria? Are they extensive or minimal for any program YOU approve? Mr. JOHNSON. Financial criteria? Mr. DELLENBACK. Yes. Mr. JOHNSON. This is something set not nationally, but locally. Mr. DELLENBACK. How much variation is there on all of this? Mr. JOHNSON. Let's take a single person. The median means test around the country is $2,200. It ranges from as low as $1,200 in some of the rural areas to as high as over $3,000 in some of the urban areas ; for a family of four, the average- Mr. DELLENBACK. May I do this, excuse my breaking in on you. But because time is short, would you supply this for the record, please? I would like very much to know how much variation we have. Mr. Chairman, may I have unanimous consent this be entered in the record? Chairman PERKINS. Without objection it will be printed in the record at this point. (Information follows:) ELIGIBILITY STANDARDS iN THE LEGAL SERVICES PROGRAM Each legal services project has an eligibility standard which it employs in determining whether to provide legal assistance to an applicant. There is no national standard. Each community establishes its own. The variation has been considerable among different communities. The average eligibility standard for a single person is $2,240, but the range varies from a low of $1,200 in some rural communities to a high of $3,380 in a few large cities. The average for a family of four is $3,610, but the range is from $2,500 to $5,200. These differing eligibility standards reflect differences among communities with regard to economic con~ ditionS, cost-of-living and the cost of private legal assistance. Mr. DELLENBACK. Mr. Johnson, tell me how many people are now being served on a nationwide basis with this type of help. Mr. JOHNSON. We have reached as of the last quarter what would be an annual rate of approximately 400,000 families per year receiving legal advice and representation. Mr. DELLENBACK. That's families, not individuals? Mr. JOHNSON. That's right. In most instances, you see, when you are helping an individual, you are really helping his whole family. If he PAGENO="0165" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1003 is going to be evicted from his home and you keep him in that home, you are keeping his whole family in the home. Mr. DELLENBACK. How many people would you consider that embraced? How many individuals? Mr. JOHNSON. I would imagine it would be safe to say a million and a half to 2 million individuals are being benefited. Mr. DELLENBACK. How many individuals- Mr. JoHNsON. In addition to those that are receiving individual legal advice and representation, however, we have already reached something like 2 million people with community education. Mr. DELLENBACK. Would you give us just a word on this. I will give you 16 seconds. Mr. JOHNSON. All right. Community education is, in many instances lawyers, volunteer private attorneys, giving lectures or making presentations of one kind or another to neighborhood groups and church groups. In other instances it's radio programs. In other instances it's little brochures. Mr. DELLENBACK. These are primarily volunteers? Mr. JOHNSON. I would say well over half of our community educa- tion effort is volunteers, and this is where some of the local share for our programs comes from. Mr. DELLENBAOK. The others is in part by these 1,400 full-time employees? Mr. JOHNSON. That's right. Mr. DELLENBACK. As far as legal services are directly concerned rather than education, you figure about 400,000 families per year or something like a million and half to 2 million persons? Mr. JOHNSON. That is at our present annual rate. But our rate dou- bled from last quarter to this quarter. Mr. DELLENBAOK. You anticipate reaching annually this many on present levels of service? Mr. JOHNSON. I would anticipate with the trend of growth that is going on now that our annual rate at the end of next quarter, June 30 of this year, in other words, a couple of weeks from now, would have reached closer to a half million to 600,000 families. Mr. DELLENBACK. Now, how many families or individuals, as you will, do you anticipate there are in the Nation that need this sort of help? Mr. JOHNSON. 32 million. Mr. DELLENBACK. Families or individuals? Mr. JOHNSON. Individuals, that is. Mr. DELLENBACK. Use whichever system of measurement you want; 82 million persons then? Mr. JOHNSON. Right. To get a more sophisticated answer, the Ameri- can Bar Foundation in their preliminary report, as I indicated, have estimated that a minimum of 14 million problems occur every year among the poor requiring the need of legal services. Mr. DELLENBACK. Time is rushing us. How many dollars do you anticipate it would take to extend these services to every person who needs it in view of your present $47 mil- lion a's projected in the 1968 fiscal year budget? Mr. JOHNSON. In excess of $250 million. PAGENO="0166" 1004 ECONOMIC OPPORTTTXITY ACT AMENDMENTS OF 1967 Mr. DELLENBACK. Per year? Mr. JOHNSON. Per year. Mr. DELLENBACK. Are full-time legal service lawyers generally local or are they brought in from the outside? Mr. JOHNSON. They are generally local. Mr. DELLENBACK. They will be within the State, qualified to practice within the State? Generally do you find them in the city in which you are looking for programs? Mr. JOHNSON. We will fund the local program. The local board will hire the attorneys. Generally they will be hiring attorneys from their locality first and if an unusually capable man from another vicinity wants to come- Mr. DELLENBACK. Generally you are employing local lawyers. Do you have any qualitative analysis which compares the type of legal service you give with judicare or private practice? Your dollar analysis is quantitative rather than qualitative. Mr. JOHNSON. That's right, and the qualitative analysis is not com- pleted. As I indicated, the American Bar Association is doing a qualitative kind of study of judicare and other programs, and the University of New Mexico Sociology Department is going to be doing the same. Mr. DELLENBACK. May I ask one more question, Mr. Chairman? Chairman PERKINS. The Chair hears no objection-proceed. Mr. DELLENBACK. I sought to get this question answered in another field yesterday and I ask you the same type of question, because we are talking about a different field. Part of my concern with many of these services lies in the statement that. was given to us on medical services and now given to us on legal services, that wha.t you are seek- ing to supply is a full range. of legal or medical services, the top quality. If you don't give it to us now, can you give us an answer to be put in the record as a comment. on the fadt. that many of our people who are at least in the lowest levels of the nonpoor don't have the same quality service. We find ourselves in a situation where the poor are getting this full range. of legal service. The. very wealthy can afford this s~me full range, and in between the average Joe Doak is not in a position to afford this, particularly those that come closest, to the poverty level. I don't ask you for a full explanation now, because neither of us has the time. I would welcome an ans~ver `on what you feel ought to be done in this area. (Information follows:) LEGAL ASSISTANCE FOR THE LOWER AND LOWER-MIDDLE CLASSES In recent weeks some question has been raised about the availability of legal assistance for middle class or lower middle class individuals who do not qualify for assistance from a legal aid or legal services office. Can this individual ~obtain legal counsel at a rate which he can afford, and does the legal assistance which he does receive compare favorably with that received by the very poor or the very rich. The first question can be answered in the affirmative: Legal assistance is zen- erallv available to all persons. First, the local legal services programs apply a flexible indigency standard which is devised to take account of the size of the family, outstanding debts such as recent medical expenses, and the recent em- PAGENO="0167" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1005 ployment history of the individual seeking assistance. The local legal services offices tend to reach more individuals than other kinds of programs which apply a flat gross or net income eligibility standard. Programs with rigid eligibility standards tend to exclude persons wh&, in fact, are unable to obtain similar services. The flexible standards applied by legal services programs reflect a policy developed over the past 40 years by legal aid societies and sanctioned by local bar associations. Second, the legal aid and legal services offices in the majority of locations work very closely with institutions known as lawyer referral services established by local bar associations. The lawyer referral service provides for the marginally indigent and the middle class persons the names of participating private prac- titioners who have agreed to give one-half hour consultation for a fixed fee. The fee is usually sufficiently low so that all persons who do not qualify for free legal assistance can afford to obtain initial guidance from the private practi- tioner. Third, the publicity and community education programs, undertaken by the legal services offices have had an impact on middle and lower middle class in- dividuals making them more aware of the advisability of seeking legal help. These persons often come to the legal services offices and are then referred to the lawyer referral service. Because of the legal services program, greater num- bers of persons are receiving legal assistance who had previously never con- sulted a lawyer either because they did not known a lawyer or feared that they could not afford to seek legal advice. The second question does not lend itself to a facile answer. The problem raised is extremely complex and there is little data available from which to make a determination of the quality of legal advice given the middle and lower middle classes. It has been suggested by some researchers that the best talent in the pro- fession is drawn either to the large law firm or very recently to the legal services program. Two gentlemen, Jerome Carlin and Jan Howard, did a socialogical study in 1965 of the qualifications of. those attorneys who handled cases for clients whose income fell below $5,000 per annum. (See: Jerome E. Carlin and Jan Howard, "Legal Representation and Class Justice," 12 UCLA Law Review 381; Jerome E. Carlin, Lawyers' Ethics: A ~8urvey of the New York City Bar, 1966.) Their study showed that these practictioners for the most part did not have outstanding academic credentials either at college or at law school and that they spent less time per case than did their colleagues who were employed by large firms While this data does indicate some disparity in the initial quahfica tions of lawyers who represent both groups, it is not conclusive proof that the attorneys serving the middle and lower middle classes are not perfectly qualified and competent to handle the kinds of problems brought to their attention. Most attorneys, even those in very small partnerships develop specializations and the, time factor may be attributable to their expertise and the comparatively un- complicated nature of the problems presented Chairman PERKINS. Mr. Meeds? Mr.. MEEDS. Thank you, Mr. Chairman. Sargent Shriver, Mr. Johnson, I would first like to extend to, you and to this entire program `my commendations and compliments. I think it is one of the finest, one of the most far-reaching, and success- ful programs that has been launched by the Office of Economic Up-: portunity. I would particularly like to compliment you on your efforts to ac- quire the support and the commendation and cooperation of local bar associations' and in acquiring the support of the American Bar Association and other bar associations and legal associations in the United States. ` I think that in meeting the problem or attempting to meet the prob- 1cm presented by the lack of legal services to the poor people of this Nation, you are reaching one of the very, very deep sores to be treated by the war again~t poverty. Too often the poor people of this country regard the law as an enemy and not an aid, and I am particularly impressed with your statement PAGENO="0168" 1006 ECONOMIC OPPORTUNITY ACT AMEND~NTS OF 1967 that you are providing an alternative to violence in the street by pro- viding justice in the courts and I think the poor people of this coun- try and the people who have not been able to afford this are, indeed, receiving a great benefit from this. Now, having said that, I would like to ask some questions about how you involve the local people. It is my understanding that you start your involvement with a community action program who works with the local bar association; is that correct? Mr. JOHNSON. Actually many of the programs have been initiated, so to speak, by a legal aid society or a local bar association. They have gone to a community action agency and said, we would like to have a legal services program. In other instances the community action agency has gone to the local bar or legal services and said, we would like to have a service in this community; would you put one together? Mr. MEEDS. Is it not true, that the legal aid society or the local bar association in the area to be served is consulted; in all regards the co- operation and coordination is as complete as can be under all the cir- cumstances? Mr. JOHNSON. That is correct. In fact, we require documentation of the fact that the local bar association has been consulted. Mr. MEEDS. Now, Mr. Joimson, in giving us the figures that you did some time ago, I think you indicated that for the first 3 months-it would be the first quarter in 1967, you had tripled-was it doubled or tripled, I have forgotten your figure. Mr. JoHNSON. We had doubled our annular rate from the 6-month period ending December 31, 1966. Mr. MEEDS. Now, if that were to continue, would the $47 million which you have requested for fiscal 1968 be adequate? Mr. JOHNSON. If you mean adequate in the sense of handling every legal problem in the country that the poor have, the answer is "No." If you are talking in terms of what the community demands are in relation to all the services and programs of OEO, I would say $47 million would be sufficient. Mr. MEEDS. And yet you said just a moment ago that there are in excess of a million cases per year which should be handled; is that correct? Mr. JOHNSON. More like 14 million. Mr. MELDS. Pardon me, 14 million. So your annual projected rate now of being able to handle at $47 million is what? Mr. JOHNSON. With $47 million we anticipate being able to handle in the neighborhood of a million cases a year. Mr. MELDS. So that we are actuaily, in terms of the broadest general problem, merely making a dent in it, are we not? Mr. JOHNSON. That is correct, in the same sense we are only making a dent in the health problem of the poor and education problems of the poor. Mr. MELDS. I think we are all aware that what we are doing is totally inadequate in terms of the total problem. I am particularly interested also in the establishment of local cri- teria. Isn't it true that, as you said initially, many of the programs which are now being fimded were existing as legal aid services or as legal aid programs operating prior to the institution of this program, PAGENO="0169" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1007 and that they had drawn up criteria as to whom they would represent and under what circumstances? Mr. JOHNSON. That is correct, almost half of our legal services grants have been made to existing legal aid societies to enable them to enlarge and improve their programs. - Mr. MEEDS. So that you have not imposed criteria upon local oper- ating units or ones that you have taken in? Mr. JOHNSON. Right, whether it is an existing Legal Aid Society or a brandnew entity, the local community develops the means test or financial criteria that are going to be used. Mr. MEED5. And in all instances these legal services programs are operated by the board of local practitioners, judges, and the people right in the community which it serves; is that correct? Mr. JOHNsoN. That is correct. Mr. MEED5. And you have no voice in the selection of these people? Mr. JOHNSON. That is correct. It's almost like a little community action agency and it's formed very much the same way and its board is constituted very much the same way, except that a legal services program will generally have a majority of lawyers on its board. Mr. MEEDS. Fine, thank you, Mr. Johnson. Chairman PERKINS. Mr. Esch? Mr. ESOH. Thank you, Mr. Chairman. Gentlemen, I think it is significant that we are faced with the prob- lem of separating those programs for which we have the greatest need -from those for which such a pressing need does not exist during the shortage of funds. In that light I would like to associate myself with those who favor much stronger support for the family planning programs. Testimony here and elsewhere indicates that we do need to move ahead with these programs rapidly. With that, let's turn to the legal services, if we might. Mr. Johnson, you stated we need approximately $250 million a year for a total program that would meet all of the needs of your area and this might involve 32 million people. Do you envision this as an ongoing program? Are we going to develop a permanent structure for legal aid services for the poor from now into the next century? Or do you look at this as a terminal program? Mr. JOHNSON. I feel that it is essential that we establish a program that would continue ad infinitum, because the poor are going to need justice ad intinitum. I would reserve the question as to whether or not there necessarily has to be a Federal program or that through the years there can be more and more State and local involvement, but I think it is essential that we get the program established and ongomg. Mr. ESCH. I share with you the concern of making sure that the poor do have legal services. What I am trying to determine' is whether these are short-range or long-range programs we are structuring. Now let's get into the other question, legal services. You suggest you are an advocate of the poor in terms of govern- mental relations. Do you envision your legal services group serving as a spokesman and advocate on some of the pressing social problems of the day, that PAGENO="0170" 1008 ECONOMIC OPPORTTJNITY ACT AMENDMENTS OF 1967 is, taking test cases, working in the area of not just the day-to-day legal services, but accepting the responsibility of moving ahead on trying to get landmark decisions and test cases? Mr. JoHNsoN. Yes, as I stated in my opening statement, one of the three major functions of the legal services program is to attempt to make the legal system fair for poor people, and our legal services pro- grams do take to the appellate level cases which have some potential for raising many times for the first time basic issues that affect the lives of the poor. Mr. ESCH. Then you envision this as a proper function of the services? 1~1Ir. JOHNSON. I think it is the proper function of a lawyer. In fact, it is almost the duty of a lawyer representing any client to attempt to make the legal system function better for his client and these as lawyers for the poor have the duty, I think, to attempt to make the legal system fair for their clients. Mr. ESCH. Right. This would all be on the basis of an individual * justice rather than in terms of moving ahead on the social problems? This is wha.t I am trying to determine. I accept the other responsibility of a lawyer to his client. Mr. JOHNSON. I don't know if you can separate. the individual client who shares the problems of the group, the economic group from which he comes. If you take a so-called test case, and change the law for that individual, you are necessarily changing the law and the system as it affects the group of which he is a member. Mr. ESCH. We will go on for just a moment more. Do you see any inherent danger in about one-sixth of the population or citizens of this country being dependent upon such a service pertaining to their legal rights? Mr. JOHNSON. I don't see any danger in it, no. I think that it's wholly appropriate, a fundamental role for Government, to attempt to seek justice and especially justice fOr poor people. Mr. ESCH. You think justice's role would be to relate to other Gov- ernment agencies, that is, would there be a Government role relating to other Government agencies, in this case representing a given eco- nomic group against a Government agency? Mr. JoHNSoN. No, I don't see any more danger in that than a State- funded public defender defending a defendant against charges being advanced by a publicly supported prosecutor. Mr. ESCH. This is an area in which I have not yet made a value judg- meñt. The public defender may be one thing, while the national pro- gram may be something else again. I share with you the concern in keeping the program at a local level. Mr. JOHNSON. I think that is one of the essential features of this. It is basically locally operated and that is true of all OEO. It is locally operated and merely receives the funds from the Federal Government. Mr. ESCH. Thank you very much. Chairman PERKINS. Mr. Burton? Mr. BURTON. Would you tell me if your program has had any ripple effect and has it had any impact on the curriculums being developed by the Nation's law schools? Mr. JoHNSoN. Yes, there has been almost a revolution, I guess. PAGENO="0171" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1009 Two years ago a poverty law was probably in the same status as labor law was 50 years ago. There were no courses in it, no one paid any attention to it, no research was being done on it, no journals were being written in the field. But something has happened in the last 2 years in the poverty law field similar to what has happened in the last 40 or 50 years in the labor field. Thirty-six law schools in the last 2 years have initiated courses in law on poverty; some of them have more than one course. There is now a Journal of Urban Law put out by a law school, which concen- trates on the legal problems of the poor. The Bureau of National Affairs, which puts out Law Week, is now talking about putting out the Poverty Law Reporter. There are scores of law review articles and scores of professors doing research in these fields. It is just a burgeoning area of the law. One of the things that has triggered this has been the interest among law students in this field. Some of the very finest law graduates in this country are going into the legal services field. We just gave a grant to the University of Pennsylvania Law School to recruit, train, and place in operating programs 50 young lawyers. Within a few weeks they had 300 appli- cants for those 50 positions. And they recently made their selections, including a man first in his class at the University of Chicago last year, who was clerking for a Federal judge; a man seventh in his class at Harvard; a man third in his class at Columbia. They are just the very top-ranking law graduates. In addition, five or six are coming out of Wall Street law firms to go with legal services projects. It has been a revolution in the legal field. (The iriforinatioii follows:) LAW SCHOOLS OFFERING LAw AND POVERTY COURSES University of Chicago Stanford University University of California (Berkley) University of North Carolina Harvard University Columbia University Yale University University of Michigan Ohio State University University of Mississippi Arizona So. Methodist Toledo Loyola of New Orleans Rutgers North Carolina College Utah wisconsin University of Detroit Texas Southern Albany Marquette University UCLA Notre Dame University of Pennsylvania University of Minnesota Boston University University of Maryland Tjniversity of Texas Georgetown Houston George washington University University of Kentucky Wayne State University New York Law School (not NYU) Catholic University Emory University LAW SCHOOLS AND LEGAL SlmvICEs Law schools have shown a greatly increased interest in the new field of poverty law in the past two years. At least 37 law schools have established new courses in law and poverty in the past two years. These schools include most of the leading law schools in the country. A list of the schools offering such courses is attached. PAGENO="0172" 1010 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Law schools and their students are participating more in legal services pro- grams. Some colleagues have set up their own neighborhood law offices and clinics, sometimes with OEO Legal Services research and demonstration and training funds, but in many other instances-without Federal funds. Among the law schools that have established neighborhood law offices with OEO spon- sorship are Harvard, the University of Detroit, Notre Dame University, Southern Methodist University, the University of Mississippi and Emory University in Atlanta. The University of Pennsylvania School of Law in Philadelphia is conducting a fellowship program whose purpose is to attract to the Legal Services field top quality young legal talent. Fifty outstanding young lawyers were chosen this year to receive Reginald Heber Smith Fellowships to receive special train- ing and serve for a year in the field with a Legal Services Program. They were chosen from among 300 applicants recruited from among major law firms, law schools, Federal judges, and state appellate courts. This first group of Smith Fellows had impressive credentials. Most had finished high in their class stand- ings at law schools. One was first in his class at the University of Chicago. Another was third in his class at Columbia. Another was 7th out of 500 at Harvard. Several came from Wall Street and other top law firms. Five had been serving as judges' law clerks. Many law schools are working in cooperation with Legal Services Programs in their communities. They provide training of staff attorneys for Legal Services Programs. They conduct research and help to draft pleadings and briefs. The nature of the changes underway in the law schools is well described by an article in the June 19 iYewsweek called "The New Law v. Tradition." It lists the War on Poverty as one of the factors that has helped to create a new atmosphere of social concern. The article follows: [From Newsweek, June 19] ADDITIONAL OEO-SPoNsoRxD PROGRAMS The lawyer's war on poverty requires the support of legal scholarship and pro- fessional education of the highest quality. American law schools have developed their curricular over the years to reflect the changes in society's needs and institutions. Today the War on Poverty and the nation's increased awareness of poverty in the midst of plenty have brought scholarly attention to the legal problems of the poor. This new awareness has helped to bring about curriculum revision, innovation, and experimentation by the law schools. The University of Detroit Law School, with OEO assistance, has revamped its curriculum and established an Urban Law Program whose major focus is poverty law. It has added new courses in poverty law and has incorporated new poverty law material into traditional courses. For example, administrative law courses will cover rulings affecting those on public welfare, as well as rulings affecting stock investors. Bankruptcy law courses, which traditionally have ex- amined "creditors rights" will cover the debtor's viewpoint. OEO Legal Services has encouraged scholarship that joins the law with other disciplines. The Indiana University School of Law and the University's School of Social Work have developed a program of research into the legal problems of the poor. A social worker will be assigned to Legal Services offices to supple- ment the usual referral service. The Columbia University School of Social Work is making a study of social welfare law. It is offering research assistance to any Legal Services Program in the country in the preparation of briefs and pleadings in welfare law cases. The Columbia Bureau of Applied Social Research is using OEO funds to conduct in- depth surveys of the impact on the poor of consumer credit systems and garnish- ment proceedings. OEO is promoting the growing efforts of law schools to involve their students in legal services. The Harvard Law School is conducting an experimental pro- gram which includes a model neighborhood law office in a racially mixed slum area of Cambridge. The office is staffed by full-time lawyers and Harvard law students. The Director is John Ferren, formerly a member of the largest law firm in Chicago, where he spent his evenings and weekends providing free legal assist- ance to poor people in church basements and schools. The purpose of the Harvard PAGENO="0173" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1011 project is to operate the law office on the same basis as a private law firm. Law- yers offer low income clients the same consideration and attention that private attorneys give to paying clients. Ferren, a 1962 graduate of the Harvard Law School, said the office uses "vigorous, imaginative, ethical tactics to protect its client's interests." He said an attempt for quick compromise settlements "rarely should be the attorney's only tactic or concern." Mr. SoinitmE. Will my colleague yield? Mr. BURTON. Yes. Mr. SCHEUER. In view of the scarcity of lawyers available to work on these counseling programs, has your experience given you any conviction that there is a role for a legal aid, a person perhaps out of a poverty community who does not have formal law school training, but who could function as an aid to a lawyer in counseling families? Mr. JOHNSON. Yes, sir; in fact, we have several hundred already funded in our programs. They perform several different roles. Inves- tigative aids are probably the most prevalent and most useful. Again, as I pointed out in my statement, they have a rapport with the neighborhood that allows them to get information that an cx- policeman, for example, probably couldn't get. They are used for messenger work, used for various routine kinds of repetitive tasks that you don't require a lawyer for, and we are studying to see if there might be some other roles that they might perform. Mr. SOHEiJER. Is there any role they can perform in the actual counseling with families under the supervision of a lawyer? Mr. JOHNSON. They have not counseled in the sense of giving legal advice, but some of them have worked as so-called community aids, working usually under the supervision not of a lawyer so much as of a social worker, counseling with persons with domestic relations problems, for instance. Mr. BuRTON. May I ask you if you will at the termination of those remarks of yours, that you be immediately responsive to my request to include the law schools that you made reference to? May I ask you further if you have considered, or have already im- plemented, the idea of permitting, let us say, secondary law school students on an internship kindof program during the summer months to participate in this program? Mr. JOHNSON. As a matter of fact, we have this summer employed several hundred law students, in legal services programs around the country, some between their first and second year, some between their second and third years. Mr. SOHEUER. I think Columbia Tiniversity Law School has sup- plied some of them. Mr. JOHNSON. That's right. We have several hundred employed in serving sort of an internship in the legal problems of the poor. Many of them we found have become interested in working as lawyers in the Legal Services field just with this second go-around. We had several hundred students last year. We find many of them have been employed as attorneys upon graduation. Mr. BURTON. One final question. In our city one of the most promis- ing men in our U.S. district attorney's office left that office to head up our legal services in San Francisco, and is this experience unique or what kind of men are you attracting? What quality of men are PAGENO="0174" 1012 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 being attracted into this field, as best you can make a qualitative judgment on this? Mr. JoHNsoN. Well, very high quality. I think some of the infor- mation I gave you about. the Reginald I[Ileber Smith Fellows gave you an insight into the level of quality. Let me t.ake one project I am familiar with, because I used to work with it, the Washington, D.C., project. Over half of those lawyers on that project are on law review in law school; one was second in his class at law school; another was fifth in his class at law school. Just very topnotch people, and yet not com- pletely inexperienced people. The average level of experience in the Washington, D.C. project when I was there at least, was 6 years of legal experience, and the average age was 34, so it was a happy mix- fure of experienced people with younger, very academically qualified people. Mr. BURTON. I yield back the balance of my time. Chairman PERKINS. Mr. Gardner? Mr. GARDNER. Thank you, Mr. Chairman. Mr. Johnson, I want to thank you for your excellent testimony. I think this along with Dr. English's testimony yesterday certainly has pointed out to the members of this committee the excellent job OEO is doing in many areas. I would like for one second to go back to Mr. Berry and ask several q~uestions of him concerning the North Carolina fund that you men- tioned yesterday. First of all, do you have the total amount of money that OEO has given to this North Carolina fund? What percentage of the overall funding of the program does it represent? Mr. BERRY. I will have to furnish that for the record. I don't have it at my tongue's end. Mr. GARDNER. Would you have any rough idea? Mr. BERRY. I would say generally that in the total grants of OEO funds, that is, CAP money, in North Carolina the great preponderance of it has been to the community action agencies which in many re~ spects, were generated, given technical assistance, and guidance in the formulating of their qualifying agencies to receive grants. The amount going to the North Carolina fund has been relatively small in the total aggregate of dollars funded in North Carolina. Mr. GARDNER. Would you furnish this data? Mr. BERRY. I will furnish you with the specific data. (Information follows:) PAGENO="0175" C) 0 0 C) 0 0 C) tTj 0 C) North Carolina fund Section of act Grant No. Date approved Federal share Type of program Comment Fiscal year 1965: 207 207 207 0431 9194 9195 Apr. 2, 1965 May 28, 1965 do $274,316 99, 209 360, 110 Utilizing college students as volunteers Analysis of the community action process Research survey on low-income families No tunds to GAAs but trainees go to GAAs after training. These are research projects. No funds go to GAAs but where applicable, data and findings are supplied to GAAs. Do. Subtotal 733,635 Fiscal year 1966: 207 207 207 0319 0319 9195 ~ Dec. 12, 1966 Mar. 28, 1966 June 13, 1966 109, 794 269, 255 58,960 Training project Technical training program Survey of low-income families in North Garolina No funds to GAAs but trainees go to GAAs after training. Do. These are research projects. No funds go to GAAs but where applic~ble, data and findings are supplied to GAAs. Subtotal 438,009 Fiscal year 1967: 205 2474 July 18,1966 376,426 Low-Income housing No funds to GAA's. Loan funds go through private, non- profit corporations and technical assistance is provided. 207 207 206 9194 8735 8995 Sept. 26, 1966 June 14, 1967 do 109, 969 1, 181, 187 104,997 Community analysis Demonstration manpower development Summer intern training program These are research projects. No funds go to GAA's but where applicable, data and findings are supplied to GAAs. No funds to GAAs, but GAA representatives make up'% of statewide manpower board. No funds to GAAs, but trainees go to GAAs after training. Subtotal 1, 772, 579 Grand total 2,944, 223 I, PAGENO="0176" 1014 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. GARDNER. Could I ask you also what restrictions or what require- ments OEO would place on a group like the North Carolina fund? Would they operate, for example, under OEO restrictions? Mr. BERRY. Yes, they operate under our guidelines and under our regulations, if they, in fact, conduct any programs. Their primary function was to serve, at the request of the Governor, in the absence of an established technical assistance agency at the be- gimiing of our program. They served as an effective liaison and catalyst for developing a community action agency enabling North Carolina to get off to a very fast start on the war on poverty in com- parison with other States which did not have that preexisting agency which was completely indigenous to North Carolina. Mr. GARDNER. May I say that I am, of course, very proud of the State of North Carolina and the fact we have looked into the area of poverty in our State and have been willing to meet the challenge. I would like to ask Mr. Shriver several questions. As you know, I am deeply concerned in the involvement of any OEO programs and any funding by OEO into the area of political activity. Do you have at your disposal any records so far as to the total number of registered voters OEO programs have been able to register during the last several years, or during 196G? For example, I think I remember 50,000 voters were registered in Houston, Tex. by an OEO program there. Mr. SHRIVER. I am almost certain that we don't have any such figures because we don't finance voter registration programs as an entity Iil~e, say, family planning or housing or adult education or manpower. Mr. GARDNER. Excuse me one second. Do you consider this a vital part of your war on poverty, the registration of voters? Mr. SHRIVER. I would not say that that by itself is; no. What we are trying to do with the poor is this: We are trying to make the poor full participants in all aspects of American life, get them to the point where they can buy goods that are produced by American industry, get them participating in the form of getting justice, getting them participating in terms of education, getting them participating in PTA's, as Mrs. Green was talking about a little while ago. Also getting them to participate in community and civic life, so we have programs which we call citizen education, and in citizen edu- cation people could be taught, as we teach kids in school, how to run a voting machine, for example. We try to encourage people to exercise their franchise. We try to get them to do it, but we are extremely sensitive to the political over- tones of those programs and we have very strict rules to make sure that whenever activity of that type takes place, that it is on a strictly nonpartisan basis, that it is not in favor of a particular candidate and so on. As I testified a day or so ago, in response to some questions from you, Mr. Congressman, many other Congressmen-as a matter of fact in the Senate and House-were both concerned about the same issue and they brought all of the programs and all of the personnel under the~ Hatch Act and we report regularly any instance~ that we find which are real or threatened invasions of the Hatch Act to the Civil Service Commission for followup. PAGENO="0177" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1015 We also follow them up ourselves. And I tried to point out to you that we have in three or four cases found-in fact, they are not voter registration drives, but in other places where there were improper political activities and we have stopped those across the country ever since we started. This doesn't mean there won't be something happen tomorrow or the next day or 6 months from now, but we have done our best to en- force the nonpartisan aspect of this program nationally. Mr. GARDNER. You seem to hang on the word "nonpartisan." As you know very well, I am interested in the Operation Breakthrough program in Durham, N.C. I think this is one example of what could be happening throughout the United States. Going back to your own figures in testifying before this committee, I think you said there were 1,050 community action programs involv- ing some 50,000 employees of these programs. Mr. SHRIVER. That's right. Mr. GARDNER. I see an inherent danger in the fact that it would seem to me it would be almost impossible as far as your agency is concerned to properly, for lack of a better word, leash the political activities of these employees and they can become-I ask unanimous consent for 3 additional minutes. Chairman PERKINS. Finish your question. Mr. GARDNER. I see a great danger in the political activities of the war on poverty. First of all, I see no place for politics in the war on poverty. I think it hurts the purpose of your program; it certainly brings a great amount of suspicion within, I would think, the Congress and certainly throughout the country. In the case of Durham, N.C., I believe this is a prime example of an overzealous attempt on the part of your em- ployees to participate in the political affairs of the community. Now, these employees in Durham, N.C., for example, three of your employees in the Operation Breakthrough experiment spent from early December until March 28, 5 days per week, copying the names of regis- tered voters off a voter registration list. What happened to them? What was the purpose in copying down the names of registered voters? How in any way, shape, or form, did this help the war on poverty in Durham, N.~3.? Mr. SHRIVER. First of all, let me just say at the beginning that we have kept politics out of this program to the absolute, and any place- Mr. GARDNER. You have been trying to keep politics out. Mr. SHRIVER. No, we kept it out. Mr. GARDNER. I would disagree with that. Mr. SHRIVER. Maybe you do disagree, but in any case where there is an allegation or the reality of it, those cases have been reported to the Civil Service Commission for the enforcement of the Hatch Act. You point out, as you said, that there are 50,000 employees. The Post Office Department has 450,000 employees. These are all covered by the Hatch Act. So are HEW's people covered by the Hatch Act. Mr. GARDNER. Could we just deal with OEO? 80-084----67----pt. 2-i2 PAGENO="0178" 1016 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. SHRIVER. I am pointing out the Civil Service Commission has the same responsibility. There is the same danger of other Federal employees of other agencies getting involved in political activities as there would be with us. In addition to that, you talk about the one Operation Breakthrough. They are not literally OEO employees. Mr. GARDNER. Do they operate imder your restrictions? Mr. Sm~ivr~. Excuse me, they are employees of Operation Break- through, but they are covered by the Hatch Act just as if they ~were Government employees, because Congress extended the restrictions of the Hatch Act to cover those people. Now, what I am trying to make is this very significant point: They work for North Carolinians, they are North Carolinians. They are supervised by a board of directors which is broadly representative of the community in which they work, and that means on that board there are businessmen, religious people, social welfare people, poor people, and so on. That board itself has got the capacity in these local situations, as thousands of people across the country, to make sure and to bring to light very rapidly any improper political activities. Why? Because there are people of different political persuasions on those boards, so there is not going to be something that somebody gets away with in a place. Even if they do it for a little while, they are not going to be doing it long. They are watched by newspapers, Congressmen, by the board that is nonpartisan. It is not just that we have the job of watching them, the community is watching them. That is one of the strengths of community action and why so little has gone wrong with it-because it is a community. Chairman PERKINS. Time is expired. Mr. Steiger? Mr. STEIGER. I yield to the gentleman from North Carolina. Mr. GAiwN~u. Would you, did this in any way, shape, or form help the war on poverty in Durham? Mr. SHRIVER. I don't know that it occurred. Mr. GARDNER. Let's use a test case. Suppose it happened in Durham, N.C. Do you think it would help the war on poverty? Mr. SHRIVEn. I wouldn't have any concept of why they would be doing it without knowing the full story. There may be some reasons I don't know about that was approved by the board of directors of Operation Breakthrough as being desirable or some reason I don't know about. If there is a political violation, we vigorously pursue those. In addi- tion to that, we would refer that to the Civil Service Commission. We have fired people, we have reprimanded people of my own party- that is the Democratic Party-for violations of the Hatch Act or of our own regulations which have been out ever since we started the program. Mr. GARDNER. Mr. Shriver, this all sounds very good and nob'e and I am certain that it has been the intention of your organization to try to police it to this extent. But I again say that I think it is a very dangerous trend. PAGENO="0179" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1017 For example, your organization through their political activities could have decided an election as close as the 1960 election. Mr. SHRIVER. We couldn't decide any election. Mr. GARDNER. For example, what happens to this registration list you use in a nonpartisan election that you seem to be hanging every- thing on? Mr. SHRIVER. I am not hanging everything on that. Our regulations specifically state- Mr. GARDNER. I have read your regulations. Mr. SHRIvER. Good. And Congress has passed a law which says that our employees and employees of delegate agencies cannot become in- volved in political activities. That's in the law. Mr. GARDNER. I am charging that in Durham, N.C., they are in- volved in it. Mr. SHRIVER. I wouldn't say, but there is an agency of the U.S. Government; namely, the Civil Service Commission,which has the job of carrying out the law. When you. submit your evidence there, others submit their evidence there, they have that job, and if they make such a decision, obviously that is correct. I am not saying that anybody is wrong. I am trying to say there is an established governmental machinery for making certain what you fear does not happen. People have feared what you fear for 150 years, ever since we started the country. That is why we have the Civil Serv- ice Commission and the Hatch Act. Mr. GARDNER. Don't you think we would have a better situation if we could go ahead and fight the war on poverty and remove any politi- cal activity whatever so there would be no shadow of doubt cast on your agency? Mr. SHRIVER. We agree there should be no political activity, but citi- zen education, teaching people how to vote or encouraging people how to vote, that is what we all say we want everybody in America to do- that is, to vote. Mr. GARDNER. Would you consider citizenship carrying voters to the polls on election day, furnishing them with marked ballots? Is this part of it? Mr. SmuvEn. No, I do not. Mr. GARDNER. That is going on in one of your programs. Mr. SHRIVER. Take it to the Civil Service `Commission and they will enforce it. Mrs. `GREEN. Did you say OEO funds, Federal funds, were used to hire people or to pay for the cars and. so on? Mr. GARDNER. In some cases, yes. The employees were of the `Opera- tion Breakthrough, which is an OEO-funded program. These em- ployees spent a period of 3 months-from early December to March 28-copying the registration books. They then went out and recruited students from nearby universities who were not even involved in the poverty program at all. Mrs. G~EN. Were they doing this on their own time or at a time they were being paid with Federal funds? PAGENO="0180" 1018 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. GARDNER. During the time they were being paid with Federal funds. Mr. SHRIVEn. Just a second. Let Mrs. Green speak. Mrs. GREEN. We don't furnish funds to post office employees to go out and work in a campaign. I would think that it is kind of sphttmg hairs whether it is a partisan or nonpartisan. We have a mayor's race in Portland. I would be pretty upset if OEO funds were used to sup- port one of the candidates. There, of course, we always try to elect a nonpartisan Democrat [laughter], but if OEO-financed workers were lined up with either candidate, it would seem to me to be a violation of the intent of the statute which we passed. Do I understand you correctly that YOU do not consider the addi- tional language we wrote into the war on poverty bill to be applicable and that you go by the Hatch Act? Is that what I understand you to say? Mr. SHRIVER. No, what I am trying to say is, if the things you are saying were being done, they would be in violation of our rules and regulations. Therefore, we would be objecting to them as strongly as anybody else, and we have a pretty good record on that for 2 years, not only of objecting but enforcing. In addition to that, what I am trying to say is that the facts are in dispute and the facts have been submitted to the Civil Service Com- mission, which is the agency of the U.S. Government which is sup- posed to render decisions when facts are in argument at any rate, so they have the job of determining what the true facts are on the basis of all the evidence. The Congressworna.n thinks certain facts are true; other people down there think that other facts are true. I am not saying she is wrong. All I am trying to say is we agree there should not be partisan politics. We do our best under our own rules to make sure that it doesn't happen. Mrs. GREEN. This is the point. Mr. SHRIVER. Political, leave "partisan" out of it, political activity. Mr. GARDNER. Will you yield for a minute? You seem to hang your whole argument on what I have brought out in Durham, N.C., and I may-may I say I think it is going on elsewhere in the United States, and I only point out Durham because I know something personally about it. You indicated in a letter to me and a conversation that we had that these activities that I have pointed out of copying registration lists and various other things were completely all right, because this was a nonpartisan election. Mr. SHRIVER. In the first place, I didn't say that in the letter. Mr. Esoii. Just for the record since the facts are in dispute, Mr. Shriver, I would like to request at this point tl~at you make a survey to determine (1) to what degree and (2) in what specific areas, voter registration activity has taken place in each of the CAP programs throughout the country. Mr. SHRIVER. Fine. I will be glad to do that. (The information requested follows:) PAGENO="0181" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1019 UNITED STATES GOVERNMENT Memorandum TO : All Community Action Agencies DATE: JUN 30 1967 FROM : ~ Theodore 14. Berry sUBJEcT: Information Survey on Cosmnztity Action Activities for Older Americans and Voter Registration It is important that we provide Congress with additional information about: (1) The extent that Cotranunity Action Programs are benefiting Older Americans (those 55 years of age or older), (2) The extent that Community Actiom agencies are involved in Voter Registration Programs. These are specific requests made by the Congressional Committees that review our program, and I need more information itrnnediately in order to respond to their demands. In order to aggregate these data nationally, I have attached a form f or you to complete in three copies one for your own records, one to be sent to the OEO Regional Office, and one to OEO Headquarters at the address listed below. It is important that this information be in the mail by no later than July 14. Thank you for your cooperation. If you do not have any programs to report under this questionnaire, please return the forms with the notation "Negative Report" completed on each page. Please return forms to: Lawrence S. Kowitch Chief, Program Information Branch Room: 533 1200 - 19th Street, N.W. Washington, D.C. 20506 Attachment: Buy U.S. Savings B~ds Regularly on t~ Payroll Savings Plan PAGENO="0182" a 0 a 0 0 H ci H H ~rj H 0 Cs PARt II: Voter Registration Activity: A. List by number the components for which you have been or are currently funded by OEO to support the specific objective of Voter Registration. In columns (5) and (6) indicate whether or not the program had the approval of both major political parties. (If only one, or no, party approved the program, answer NO in column (6).) Component - Number Period of Activity (Day/No/Yr.) Federal $ Approved No. of Persons Approval: Contacted ~ea (1) (2) (3) (4) (5) No (6) OTALS xxxxxxxxxxxxxxx B. If your Community Action Agency has been or now is engaged in Voter Registration Programs which were not funded by OEO as specific components complete the columnar data as appropriate. In column (3) give the name of the Agency which was(is) the principal official sponsor of the program. In columns (4) and (5) indicate whether or not the program had the approval of both major political parties. (If only one, or no, party. approved the program, answer NO in column (5).) eriod of Activity (Day/No./Yr.) (I) - No. of Persons Contacted (2) Sponsor (3) ~p~oval: Yes No (4) (5) OFAL xxxxx fl NEGATIVE REPORT CAP FORM 26 (Pag. 4 of 4) JUN 67 GPO 026.209 PAGENO="0183" C. List the total current employment of the Community Action Agency and Delegate Agencies, estimating the number of Older persons age 55 or over employed by each. Include here all staff positions in such progrwns as Read Start, NYC, etc. Agency (1) Prof. Non- Resident (2) Resident Non-Prof. (3) Prof. Non- Resident (4) Resident Non-Prof. - (5) CAA Staff Delegate Agency(s) Staff T~J]~ALS D. Senior Citizens Centers: As a result of the progrem activities listed in A, B and C above, have you established or are you providing the bulk of the funds for the operation of an older persons or "senior c~itizens" center or centers in your community? For the purposes of this survey a senior citizens center may be defined as a place designed exclusively or primarily as an older person service center where older persons may come for a variety of services including recreation, referral, skill training etc. Number of Centers Types of Activity Number of Beneficiaries (annual) ci 0 C 0 C C H H 0 H z I Total Older /1 NEGATIVE REPORT CAP FORM 26 (Pag. 3 of 4) JUN 67 PAGENO="0184" GRANT NUMEER _________ NAME OF AGENCY CITY AND STATE CAP Information Survey Community Action Programs For Older Persona fl&~dg~, B~~& N~. 116-S67023 Appp,.,~l ~pi~e~ i~1, 31. 1967 Part I: Programs and Employment for Older Persons (55 years or older) A. List all OEO funded program components approved since July 1, 1966 to date, that have been completed, are now being conducted, or are not yet in operation but with approved budgets which are specifically designed to employ or serve the needs of persons age 55 or older, and complete the columnar data as appropriate. In column (~) enter the actual number of older persons benefited by programs that have been completed. In column (5) enter the planned number of older persons to be benefited by programs now being conducted or not yet in operation. omponent No. (1) Purpose (2) Duration of Activity (3) No. of Beneficiaries Actual(4) Planned(S) Total Cost(Federal $) (6) TOFALS xxxxxxxxxxxx xxxxxxxxxxxx ~,j NEGATIVE REPOI~ 0 0 0 0 GAP FORM 26 (Faa. 1 of 4) JUN 17 PAGENO="0185" a 0 0 a 0 0 H H a H H CD C -4 B. List other OEO funded components (by type) currently being operated by your Community Action Agency or a delegate agency which benefit older persons even though the component is not designed as an exclusively older persons project. Complete the columnar data as required. In column (3), enter the total actual number of persons benefited since the beginning.of the program. If it is not possible to count the total participants in each component type without duplicate counting of individuals, enter the total number of individuals for all components in the Totals line in columns (3), (4), (5). Components by Type (1) Total Cost(Federal $) (2) Total Participants (3) Estimated Number Olde~ Participants (55+) (4) Estimated Cost of Program for Older Participants Only (5) Legal Health 1~ducation 1anpower Training & Placemt Title V Nelson-Scheuer & Other Work Progran Housing - All Other TOPALS ET NEGATIVE REPORT CAP FORM 26 (Page 2 of 4) JUN 67 PAGENO="0186" 1024 ECONOMIC OPPORTTJNITY ACT AMENDMENTS OF 1967 Mr. PuCIwsicI. Mr. Chairman, I ask that the gentleman be per- mitted to proceed for 3 more minutes. Chairman PERIUNs. The gentleman is recognized for 3 additional minutes. Mr. GARDNER. I quote from your letter: CAP memo 50-A specifically states in outlining the explicit instructions of political activity, certain nonpartisan political activities are permitted. These are activities in connection with campaign for office which are run on a non- partisan basis and are of a strictly local character, that is, completely unrelated with issues and candidates identified with a national political party. I think this goes back to the- Mr. SHRIVER. Let me say, does it go back to the- Mr. GARDNER. At the end of your letter- P.S. You incidentally seem to think I appear to deny the facts in your investi- gation. I say our investigation conducted did not show any violations of our act or regulations. Mr. SHRIVER. That is correct. Now let me explain- Mr. GARDNER. You said just a inmute ago-did I misunderstand him, Mrs. Green- Mr. SHRIvER. No, the difference is this. You just said that certain things were going on down there and that I justified those things on the basis that it was a nonpartisan election. That is not what I said. I wasn't even commenting upon the things that you talked about. Mr. FORD. Would the gentleman yield? Mr. SHRIVER. Those are some of the facts that are under contest, whether those things actually did or did not take place. The quotation in my letter has to do with the OEO regulations and with the Hatch Act regulations as interpreted by the Civil Service Commission, which if I am properly informed, do say exactly what we say in that letter. That is not my idea. That is the Civil Service Commission idea. Mr. FORD. Would the gentleman yield? Mr. GOODELL. Mr. Chairman, I would like to point out here we have a difference of opinion. Apparently you feel that registration drives as such are proper and that it's all right to fund this through the pov- erty program because it's an act of citizenship. The problem with that, Mr. Shriver, as you well know, is that both parties will engage in registration drives. It isn't very difficult for the Republican Party to pick out the section of town where they are going to get a three- or four-to-one vote. It is not very difficult for the Democratic Party to pick out the sections and the blocks where they will get a two- or three- or four- or five-to-one vote. Likewise, in a so-called nonpartisan election and not identified with a Republican or Democrat at a local level, it isn't very difficult to pick out the precincts or wards where a given candidate is going to get a sizable portion of the vote. It is my understanding that in the results of the election in Durham this point was directly affirmed. This is what happened. One of the candidates was clearly going to get a high proportion of the votes from two or three areas where the poverty workers spent their time. Mr. GARDNER. Ten or twenty to one. Mr. GOODELL. They spent their time for 2 or 3 months in the registra- tion office with the election clerk, who has affirmed this. These were PAGENO="0187" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1025 community action workers, full time, during working hours, spending their time copying the lists in these select areas. And then, of course, these were used in the election to get the voters out. The results very clearly showed an overwhelming vote for one of the candidates in those select areas. I think this illustrates the danger we are talking ~about, not only in terms of partisan or nonpartisan, but in terms of registration. Registration drives can be very partisan, and usually are, unless they are conducted by the League of Women Voters or some nonpar- tisan group. The potential is there for tremendous damage to the poverty pro- gram and damage to public officials. Mr. BURTON. Will the gentlemen yield? Mr. GARDNER. You brought out the League of Women Voters and I again quote from Mr. Shriver's letter: I am sure you know numerous civic organizations, including the League of Women Voters, long have been engaged in assuring that all eligible Americans are registered so they may be able to exercise their choice on election day. And I wholeheartedly support the activities of those involved doing it not at the expense of the American taxpayer. There is a difference. The League of Women Voters are not financed by the taxpayer, and I see a vast difference between .the two. I might also say for the record that you have said several times th~t the facts that I have brought out in the Durham, N.C., investigation are being disputed. These facts that I have mentioned have been ad- mitted in writing by the operation breakthrough employees- Chairman PERKINS. I will call for order. Mr. FORD. Mr. Chairman, I would like to ask unanimous consent to insert at the point in the record where Mr. Gardner was alluding to Durham, N.C., a copy of the Operation Breakthrough memorandum that went to the employees prior to the Saturday, May 13, election, to wit, on May 11, specifically admonishing them- Mr. PUCINSKI. I reserve the right to object until I have read the memorandum. Mr. GARDNER. May we insert the entire investigation that was done bythe minority investigator on the Durham, N.C., case, which includes this? Mr. PUCINSKI. I renew my reservation, Mr. Chairman. I would like the gentleman to read the letter. Mr. FORD. It is a memorandum on the letterhead of the operation breakthrough, William R. Pursell, executive director. (The memorandum referred to follows:) To: All Staff Members. From: William R. Pursell, executive director. Date: May 11, 1967. Subject: Use of Facilities and vehicles on Election Day, May 13, 1967. This is to officially inform you that no vehicles and/or facilities of opera- tion breakthrough are to be used in any way in support of any individual or slate of candidates in the General Election on May 13, 1967. This is to be interpreted as meaning that only normal Saturday program activities will be allowed on this day. It is also to be interpreted that no vehicles and/or offices can be used to get voters to the polls. It is further to be interpreted that no staff members will be reimbursed either in salary or compensatory time for election related activities on this day. PAGENO="0188" 1026 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Due to the fact that this is a non-partisan election and in compliance with OAP Memo 50-A, each staff member may, if he so desires, be involved as a private citizen according to the dictates of personal conscience. Attached to this when it was presented to me was an advertisement from the newspaper in Durham, N.C., addressed: "Attention Republicans, Democrats, and independents," signed by several people identified as the president of the Republican county organization, and Young Republican Club the President of the Re- publican women, which says: "This Saturday's municipal election is nonpartisan. Every registered citizen of Durham can vote regardless of party affiliation." And inviting them to participate. Chairman PERKINS. Is there an objection- Mr. GOODELL. Reserving the right to object and I only do so to make the comment in the context here of that going in the record, probably the reason that particular memorandum was put out was that last year we documented the fact that Operation Breakthrough cars were used in an election in Durham, and the Director of Operation Break- through specifically in this memorandum was informing people that they could not use the cars themselves and the equipment them- selves. But this memo is irrelevant to the facts concerning registration that have been alleged here which we are talking about with reference to the activities that did occur in Durham. Mr. GARDNER. Reserving the right to objection, may I make one com- ment, please? Chairman PERKINS. Go ahead. Mr. GARDNER. I think it's also quite interesting that these vehicles were used the three previous weeks on the days that the citizens went down to register and these employees did it at the time, at the expense of the taxpayers. I would like to also ask for unanimous consent to put in the entire investigation do'~e by Mr. Buckley in Durham, N.C.. in the record. Mr. BURTON. Reserving the right to object. Chairman PERKINS. Is there objection? Mr BURTON. Mr. Chairman, I am going to object. If we are going to have one side, we should have all sides in the matter. I would suggest that the gentleman from North Carolina bring this up when it is dis- posed of by the Civil Service Commission, so it can appear with all the relevant data. The gentleman has decried the use of taxpayers' money, some of the backward States like our own require that free copies of the regis- tration laws and all of the registered voters be available to candidates and political parties. And we, at taxpayers' expense, pay members of either party or any party, or no party to go out and register voters, because we believe the taxpayers have a stake in seeing to it that all American citizens are registered to vote and participate in the political processes. So our unenlightened State believes it is in its interest to spend its tax dollars in this effort. That is not necessarily relevant with the point made about Durham, but it is a reference to what is and is not a taxpayer responsibility. I would suspect even further that those jurisdictions that pay for the PAGENO="0189" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1027 costs of elections by paying precinct boards and printing of ballots and all the rest recognize at least to some extent, that taxpayers have a stake in the carrying on of elections, partisan or nonpartisan. Chairman Perkins. The objection is heard. The Chair will recognize the gentleman to respond, Sargent Shriver. Mr. G0ODELL. Mr. Chairman, I think it is unfortunate to require unanimous consent to put material in the record. It is a device we use in the committee and frequently people make a request of this nature to put material in the record that is normally one-sided. We all have this privilege and the gentleman from California has the privilege of ask- ing unanimous consent to put in material to counterbalance it, includ- ing a county report Mr. Shriver says he has in OEO investigating the Durham situation. I know no one would object to a request that that report be put in the record at that point side by side with the other one. That is a proper request.. I think the whole- Mr. BURTON. Is the gentleman from New York stating that the re- quest is amplified so it will include- Mr. GOODELL. Ask the gentleman from North Carolina who has put in the unanimous request. Mr. GARDNER. I would like very much for that to be done. Mr. BURTON. May I request, what is the date of the study made that the gentleman from North Carolina seeks to have placed in the record? Mr. GARDNER. June 2 and June 4. Mr. BURTON. Mr. Shriver, what is the date of your review of this matter? Mr. SHRIVEn. I don't happen to know the date. All I know, when we make inspections and if anything is shown, we turn them over to the Civil Service Commission as a regular procedure. There is nothing unusual about this, because we are making inspection reports all the time. People are frequently calling matters to our attention. We do make investigations and we do present the information to the Civil Service Commission. I don't know the date. Mr. . BURTON. So the gentleman from New York will understand the gentleman from California's position, and I have made an effort that I think should be discernible on a great number of matters pend- ing before this committee, I believe we should seek the facts and not in- dulge in trivial partisan differences. My concern is primarily that whatever goes into the record with reference to a specific matter that is in effect pending before a judicial or quasi-judicial body, that the record be complete and I cannot at this stage ascertain whether the record would be complete and equit- able in that regard. I would suggest as a solution to this matter, if the chairman of the full committee intends we meet this afternoon, that the gentleman from North Carolina renew his request at that time. That will give * us an opportunity to make some assessment as to whether the record of the' committee will be fair and equitable. It has been my view- Chairman `PERKINS. Will the gentleman yield, please? Mr. BURTON. Yes. Chairman PERKINS. If there is no objection to the request from the gentleman from North Carolina, and at the same time your suggestion PAGENO="0190" 1028 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 is implemented, that the Office of Economic Opportunity be permitted to file their response or any response that they so desire, side by side in the record, then there is no objection; is that correct? Mr. BURTON. That is correct. Chairman PERKINS. Agreed. (Information follows:) OEO STATEMENT ON OPERATION BREAKTHROTJGH CG-G6--478 Operation Breakthrough. Inc.. currently operates under an OEO grant author- ized by §~ 204-205 of the Economic Opportunity Act of 1964. as amended. It is a private non-profit agency instituted by the North Carolina Fund. By virtue of § 003 of the Economic Opportunity Act, as amended, Operation Breakthrough is subject to all the provisions of Section 1502(a) of Title 8 U.S. Code (sometimes called the Hatch Act). OEO has review-ed a report made by John R. Buckley, Minority Chief Investigator, House Education and Labor Committee, dated June 9, 1907. relating to certain incidents of alleged political activity on the part of Operation Break- through and its employees. The report is based upon reports furnished to Mr. Buckley, some of which are vague and contradictory. We have, however, con- sidered Mr. Buckley's report and found that, assuming the correctness of all of the information furnished to him and set forth in the report, it does not disclose any violations of federal law, Civil Service regulations or OEO regulations. OEO sent its own inspector to Durham, North Carolina, to investigate charges of illegal political involvement of employees of Operation Breakthrough. Our investigation also revealed that no federal law-, Civil Service regulations or OEO regulations appear to have been violated by Operation Breakthrough or any members of its staff. An independent investigation by the Civil Service Commission is now- in process. We have, of course, offered full cooperation to the Civil Service Com- mission. We do not at present know what its conclusions will be, but we have no present reason to expect any conclusions different from those already reached. We find the instructions issued by the Executive Director of Operation Break- through to his staff regarding non-involvement in prohibited political activities an accurate reflection of OEO policy and we have no information indicating that his instructions were violated. To date, there is no evidence that, while on the job, employees in any way violated their responsibility to be politically neutral. What evidence does exist of support for any individual candidates relates to off-duty participation in non-partisan political activities. The election took place on a Saturday when, with few exceptions, the employees were not on duty. To the extent that individual employees not on duty participated on that day in activities favoring particular candidates in an election officially classified as non-partisan, this involved no violation of the partisan political activities restrictions of the Hatch Act nor of OEO regulations, REPORT DATED JUNE 19, 1901. MADE BY JOHN II. BUCKLEY, MINORITy CHIEF IN- VESTIGATOR, EDUCATION AND LABOR COMMITTEE, U.S. HOUSE OF REPRESENTATIVES, WASHINGTON. D.C., OF OPERATION BREAKTHROUGH, DURHAM, N.C., WTILLIAM R. PURSELL, EXECUTIVE DTEECTOR SUMMARY On June 2, 1907, Operation Breakthrough employees advised that during the past year Operation Breakthrough has conducted a voter education community action program in Durham, North Carolina. In conjunction with this program, during the period January-March. Operation Breakthrough neighborhood w-ork- ers reviewed voter registration books in the office of the Durham Board of Elec- tions and copied registration lists. On April 1, April 8, and April 15, 1967. Opera- tion Breakthrough employees, using the agency's automobiles, transported sev- eral hundred Durham citizens to Durham polling places for the purpose of registration. On April 29, 1967, Operation Breakthrough employees, using person- PAGENO="0191" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1029 ally owned vehicles, transported Durham citizens to the polls during the municipal primary election. On May 13, 1967, Operation Breakthrough employees, using personally owned vehicles,, transported Durham citizens to the polls during the municipal general election. On June 3, 1967, Mr. J. F. Steele Jr., prominent Durham resident and unsuccessful candidate for U S Congress in 1966 furnished a signed statement alleging numerous Durham citizens had complained to him that employees of Operation Breakthrough bad engaged in wide-spread political activities during the Durham municipal general election the Durham primaiy election and the voter registration days prior to these elections. Mr. Steele's statement is set forth in details. On June 2, 1967, Mr. William R. Pursell, Execu- tive Director of Operation Breakthrough, stated Operation Breakthrough em- ployees participated in a voter registration drive early in 1967. According to Mr. Pursell, he issued specific instructions that Operation Breakthrough facilities and vehicles were not to be used during the primary~ and general municipal elec- tions. Mr. Pursell stated he had been in contact with OEO officials during the period of registration and election and that he was confident that activities of Operation Breakthrough employees were not improper and not in violation of either the Hatch Act or the Economic Opportunity Act. He explained that it is permissible to use community action facilities and vehicles in connection with voter registration drives and that it is not improper for employees to involve themselves in poltical activities in a non-partisan election. * According to Operation Breakthrough Council, Mr. Robinson Everett, the Civil Service Commission in 1955 ruled the Durham municipal elections were non- partisan and involvement by U.S. Government employees would not constitute a violation of the Hatch Act. Statements and photos obtained establishing Opera- tion Breakthrough employee and agency vehicle transported Durham residents during voter registration. Statement and photos obtained establishing Operation Breakthrough employees, including Mr. Lawrence Kelly, Administrative As- sistant to the Director, participated in transportation of Durham citizen to the polls during municipal general election. Mr. A. C. Sorrell, member, Operation Breakthrough Board of Directors, advised there is wide-spread concern in Dur- ham regarding Operation Breakthrough's political activity. On May 13, 1967, during the municipal general election, be interviewed a girl at a Durham polling place. She stated she was a student at the University of North Carolina and that numerous students at the University of North Carolina and Duke University had been recruited by Operation Breakthrough employees to transport voters to the polls. Results of voting in ten ` precincts researched by Operation Break- through employees reflects candidates recommended on Durham Committee on * Negro Affairs political brochure polled substantial margins. Mrs. Geoffrey Ham- ilton, Secretary to the Directors, `Operation Breakthrough, advised she had dis- tributed cards soliciting votes for candidate for Alderman, Mrs. R. 0. Everett, on May 13, 1961. The card illustration contained the following information: "THE DURHAM COMMITTEE ON NEGRO AFFAIRS RESPECTFULLY RECOMMENDs `rHE FOLLOWING: "FOR MAYOR "(Vote for One) "FOR ALDERMAN WARD 2 "(Vote for One) "FOR' ALDERMAN WARD 4 "(Vote for One) "FOR ALDERMAN WARD 6 "(Vote for One) "[No designation appears] "1A: R. W. Grabarek. "(x) 2A: Paul Hardin. "3A: Sidney Booth. "(x) 4A: Mrs. R. 0. Everett "5A: Walter A. Biggs. "(x) 6A: J. Tom Freeman. "(x) 7A: Vance E. Fisher. "8A: Ollen M. Lane. "9A: Luther H. Barbour. "(x) 1OA: C. E. Boulware. PAGENO="0192" 1030 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 "Campaign Headquarters: Carolina Times (682-2913), 436 Pettigrew Street. "May 13, 1967.)" On June 2, and June 3, 1967, Mr. G. F. Steele, Jr., 3928 Notteway Road, Dur- ham, North Carolina, was interviewed as a result of his complaint to members of the Education and Labor Committee, U.S. House of Representatives, that personnel of Operation Breakthrough bad engaged in improper political activity. during the 1967 Durham municipal elections. Mr. Steele's information was in- corporated in the following signed statement which he furnished on June 3, 1967: DURhAM, N.C., June 8, 1967. EDUCATION AND LABOR COMMITTEE, U.& House of Representatives, Was1z~ington, D.C. GENTLEMEN: I respectfully call to your attention improper political activities of certain personnel of Operation Breakthrough and the North Carolina Fund, both of which are OEO-sponsored agencies. I make reference to activities surrounding the municipal general election in Durham, N.C. on May 13, 1967, the primary election on April 29, 1967, voter registration days on April 1, 8 and 15, 1967, and certain other activities of approximately two months' duration preceding April 1, 1967. During the month of March, 1967, several local citizens advised me that per- sons known to be staff members of Operation Breakthrough were then engaged in a program of copying names of registered voters from the voter registration books at the office of the Durham County Board of Elections. The people who called this activity to my attention stated that their concern was based on the fact that Operation Breakthrough personnel were copying names of voters from the negro areas only, and the negro citizens of Durham traditionally "bloc vote." On April 1, 1967, which was the first day that the registration books were open for new voter registration prior to the municipal election, I received calls from a number of local citizens advising me that Operation Breakthrough personnel were engaged in an apparently organized drive to register negro voters. After receiving several calls of this nature, I personally visited a number of precincts and observed several people involved in what did in fact appear to be an organized registration effort. These activities apparently were organized in the following manner: (1) one or more persons were stationed at each of the various polling places with a list of names; (2) a number of people were driving automobiles and transporting prospective voters to be registered at the polling places, and (3) each prospective voter thus brought in to register first would check in with the person or persons stationed at the polling places as specified above. It should be noted that this activity included only negro voters, although some of the precincts involved are of a racially mixed population. During the following week, I visited the office of Operation Breakthrough and discussed this matter with the Executive Director, Mr. William R. Pursell. I pointed out to Mr. Pursell my concern over the unhealthy atmosphere created by this activity, and the resultant effect of causing a "Black-White" vote on election day. I also expressed my concern over any activity which might be inter- preted as political in nature, and asked for his cooperation in seeing that his employees took no further action that might be considered as politically motivated. Following the two final registration days of April 8 and April 15, I received additional complaints of a similar nature and was, further, informed that photo- graphs had been taken of these activities. On April 29, the primary election day, and on days following, I received additional complaints of political activities of certain people described as em- ployees of Operation Breakthrough and the North Carolina Fund. Again, these activities involved only negro voters. The specific complaints alleged that these employees were engaged in activities similar to those observed during the voter registration period; that is, some persons being stationed at the polling places with what appeared to be lists of voters, and some individuals driving voters to the polls. It was observed that voters thus transported were checked off the lists handled by those persons at the polling places. Furthermore, said voters were seen to have in their possession slips of paper which have been identified as a list of recommended candidates. PAGENO="0193" ECONOMIC bPPORTTJNITY ACT AMENDMENTS OF 1967 1031 Similar activities were observed on the general election day, May 13, 1967. It should be noted at this point that the lists which were used at some of the. polling places to check off the names of those who had voted were printed by some type of electronic machine The election day activities observed are described as follows: at all precincts that are predominantly negro or racially mixed, people were stationed with "check-off" voter lists. Drivers would bring voters to the polling places in vehicles displaying signs reading "Vote today-use this car." The, voters would leave the cars and confer with the people who had the "check-off" list. The voters would then enter the polling places. After voting, they would be driven away in the same cars. These cars were observed following the same procedure throughout the day. Printed lists of recommended candidates were seen in the vehicles and also were seen in the hands of voters as they entered the polling places. Some of the drivers of the described cars were identified as staff mem- bers of Operation Breakthrough. Others were identified as students at nearby iiniversities. Some of the students stated that they were driving at the . request of Operation Breakthrough staff members. The activities described above involved only negro voters. It is my opinion that these activities are outside the realm of programs envisioned by members of Congress when they passed the Equal Opportunity Act of 1964. I believe that this fact is borne out by the actiOn taken by Con- gress in amending this act in 1966 after there was an indication of political activities in OEO-sponsored agencies. I further believe that no public funds should be furnished to any organization that is politically involved or whose employees are actively involved in politics. It is the expressed opinion of many local business and civic leaders that Operation Breakthrough has become ineffective, largely because of political involvement in this and in past elections in Durham County. I therefore respect- fully request that the Education and Labor Committee follow whatever course of action deemed necessary in order to assure the people of Durham that any Federal funds allotted to Durham will be handled only through organizations whose staff memers are totally dedicated to helping our poor, and that under no circumstances will any tax money be spent that in any way could build or aid in the building of a political machine. Very truly yours, C. FRED STEELE, Jr. On June 2, 1967, Mr. A. C. Sorrell, 323 Foster Street, Durham, North Carolina, a member of the Board of Directors, Operation Breakthrough, advised be has been concerned over the political involvement of Operation Breakthrough em- ployees during the past six months He stated his concern is shared by numerous businessmen and community leaders in Durham Mr Sorrell complained to the Executive Director of Operation Breakthrough in a letter dated May 15, 1967. A copy of this letter and replies from Operation Breakthrough dated May 17 and May 19 1967 follow MAr15, 1967. Mr WILLIAM R PURSELL Director-Operation Breakthroiigh, Durham NC DEAR BILL I would like to restate my displeasure with the political activities of Operation Breakthrough. As a member of your Board, I am requesting that a written report be furnished me as to the activity of all personnel in the e1ec tion Saturday I am referring to their time both on and off the ]ob Please give this matter your prompt attention Very truly yours A C SORRELL Vice Pres~ dent DURHAM, N.C., May 17, 1967. Mr. A. 0. SOERELL, CZark c~ S'orrefl, Inc., Durham, N.C. DEAn Mn SORRELL This is to acknowledge receipt of your letter of May 15 1967, in which you requested information regarding the activities of our staff members on May 13, 1967. I have given this request serious consideration and have decided that, because the information requested regards personnel matters, and because of my respon- 80-084-67-pt. 2-13 PAGENO="0194" 1032 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 sibility to keep the Executive Committee and Board of Directors fully informed on all matters relating to our organization and further upon the advise of the President of the Board of Directors, Dr. Charles Watts, your request should prop- erly be referred to the Executive Committee at its next meeting scheduled for May 18, 1967. Dr. Watts has agreed to make this matter a part of the agenda for the meeting. I shall inform you of the decision of the Executive Committee regarding your request. Sincerely yours, OPERATION BREAKTHROUGH, INC., WII.LIAM R. PURSELL, E~vecutive Director. OPERATIONAL BREAKTHROUGH, Durham, N.C., May 19, 1967. Mr. A. C. SORRELL. Clark & Sorrehl, Durham, N.C. DEAR MR. SORRELL: In reply to your letter of the 15th and pursuant tc my communication of the 17th, I would like to inform you that the Executive Com- mittee of Operation Breakthrough met in regular session on May 18 and declared itself to be in substantial agreement with my opinion and that of the President, Dr. Charles Watts, regarding the proper disposition of your request. As requested we are making available to you a list of Operation Breakthrough employees who were engaged in agency activities ~)fl election Saturday, May 13, 1967. The employees, with their job titles, and the nature of their activities are: Mrs. Marla Hamilton: AdmInistrative Secretary. Activity relating to the Op- eration Breakthrough exhibit for the Allied Art's Spring Festival of the Arts at Y.W.C.A. Miss Edna Cole; Driver. Regularly scheduled N.Y.C. enrollee pick-up and delivery. Mr. Richard Wescott; N.Y.C. Work Supervisor. N.Y.C. Work supervision at Children's Museum. This list is. of course. the product of a preliminary investigation and is only as complete as the limitations of such a survey allow. A final record ~lil he compiled from data made available through our regular monthly payroll a~connt- ing procedures. This can be forwarded to you. upon request at any time after June 7, 1967. You may rest assured. however, that it will contain no authoriza- tion for the expenditure of Operation Breakthrough funds for any e1eeC~n-re- lated activities which may have occurred on the Saturday in question. Community Action Program Memorandum No. 50-A (December 1, 1966) sets forth a summary description of the restrictions on political activity applicable to the personnel employed by Operation Breakthrough. As you will no doubt recall, paragraph 3 on page 4 of that document is particularly germane to the situation presented by Saturday's municipal elections. It reads: "Certain non-partisan activities are permitted. These are activities in con- nection with campaigns for office which are run on a non~partisan basis and are of a strictly local character-that is, completely unrelated to issues and candidates identified with national and state political parties. For instance, elections for local school boards and other local offices are frequently run on a local non-partisan basis. If a state election law provides for a non-partisan ballot for a particular local office or class of local offices, or provides that the local office is considered non-partisan, the campaign for that office or class of offices qualifies for the exception. Local agencies and their employees should note, how- ever, that if a particular candidate or slate in a non-partisan election actively seeks partisan support or identification, the campaign of that candidate or slate will be considered to have become a partisan campaign." In light of this unequivocal exemption from restriction I felt at the time of the election that I could not in justice interfere with the dictates of individual conscience. The Executive Committee has made it clear that they feel any in- vestigation into the private citizenship activities of the 190. Operation Break- through employees would he a tedious, time consuming wo~te of Oneration Breakthrough funds and an unwarranted invasion of personal privacy. PAGENO="0195" ECONOMIC OPPORTUNiTY ACT AME~N DMENTS OF 1967 1033 Any specific charges which may be brought against any individuals in our employ will be courteously received and thoroughly investigated, but I must, on the instructions of the Executive Committee, decline to honor your request for a written report of personnel activities off the job Very truly yours, OPEEATION BRaAMTHROUGH, INC.~ WILLIAM R. PURSELL, FJceecutivc Director. Mr. Sorrell advised that on May 13, 1967, he visited a Durham polling place during the municipal general election. While there he engaged a young lady in conversation. On. the seat of her car were a number of political brochures cap- tioned "The Durham Committee on Negro Affairs respectfully recommends the following :" (Copy of the brochure attached to this report). According to Mr. Sorrell, the young lady told him that she was a student at the University of North Carolina and that students from that University and Duke University had been recruited by Operation Breakthrough, employees to transport Durham residents to the polls On June 2 1967 Mr E B Orauford Jr 312 Watts Street Durham i\orth Carolina, was interviewed and he furnished the following signed statement: To whom it map concern: "I have furnished the following information to John R. Buckley, who id~fl±!~ fled himself to me as an Investigator, Education and Labor Committee, LT.S. House of Representatives. No promises or inducements were made to me and `I will be willing to testify at any type hearing or proceeding regarding the infor- mation furnished On Saturday May 13 1967 the day of the Durham Noi th Carolina munici pa] elections I made observations at se~ eral polling places in Durham I\ orth Carolina, between the approximate hours 7:45 a.m.-4 :30 p.m. Included, were the Whitted School, the Bragtown School, the Forest Hills Club House and the Lakewood School. "During the day I took several pictures of activities in the vicinity of the polling place. I have identified, marked, and furnished eight photos to Mr. Buck- ley. In these photos are vehicles and drivers that I observed on several occasions transporting different groups of people to the polls. "I have marked a yellow political brochure, size approximately 3" x 10" captioned `The Durham Committee on Negro Affairs respectfttlly recommends the following.' This brochure illustrated the voting lever in the vote position for candidates for Mayor and City Aldermen. Of the people transported in the vehicles in the photos mentioned above I observed that approximately fifty per cent carried yellow slips of paper approximately 3" x 10" when they left the cars. These slips resembled the political brochure I have described. "I certify the above is a true and accurate statement to the best of my knowl- edge and recollection. "E. B. CRANFORD, Jr., "Durham, iV.U. "Witnessed: John R. Buckley, Minority Chief Investigator, Education and Labor Committee, U.S~ House of Representatives." On June 2 1967 Mr Joseph Bernard High 219 North Dillard Street Durh'tm North Carolina advised that on April 1 8 and 15 1967 he served as an obser~ er at Durham polling places during voter registration activity. He furnished the affidavit which had been prepared previously: AFFIDA~ IT "Durham County, N.C. "Joseph High, being duly sworn, deposes and says: `That he is a resident of Durham County ]\orth Carolina that during the month of April, 1967, he personally observed a 1965 Ford bearing North Carolina license number ET-4280 transporting Negro citizens of Durham County to the voting polls, for the purpose of registration as a voter in Durham County and the City of Durham. JOSEPH HIGH Affian~ PAGENO="0196" 1034 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 "Subscribed and sworn to before me, this 11th day of May, 1967. "CHABLES N. SHIM0N, Notary Public. "My commission expires: January 22, 1968." On June 3, 1967, Mr. William R. Pursell, Executive Director, Operation Break- through, advised that a 1965 Ford bearing 1967 North Carolina license ET-4280 was an Operation Breakthrough vehicle. On June 3, 1967, Mr. Sigmund Meyer, Chairman, Durham County Board of Elections, Wachovia Building, Durham,. North Carolina, advised that early in December, 1966, three individuals came to the office of the Board of Elections and requested books containing names and addresses of registered voters. These books are broken down by precincts. According to Mr. Meyer, these persons re- turned on a regular, almost daily basis, until late in January. At that time, Mr.. Meyer advised, them that due to space limitations in the office he requested that only one of the three come to the office. On the following day, Mr. John Edwards, Operation Breakthrough employee, came to Mr. Meyer's office and complained about the reduction of from three to one having access to the registration books. Mr. Meyer told Mr. Edwards that, if he could make arrangements for space on the same flOor for the reviewers, he would make the registration books available to them. Mr. Meyer stated that during conversations with the individuals he learned that they were Operation Breakthrough employees. He explained that it was the policy of the Board of Elections not to require identification to any legiti-. mate inquiry concerning registrations. Mr. Meyer stated the Operation Breakthrough personnel appeared at his office on a regular, continuous basis during the period December, 1966, to March 28, 1967, from Monday through Friday. On some days during December and Jan- uary he made entries in a notebook concerning their appearance. He said it was his practice, but not a rule, to keep such notes. He discontinued this in February, 1967. Mr. Meyer advised that he observed that Operation Breakthrough personnel conducted quite extensive research, copying names and addresses from the registration books. He recalled that during their visits he made available reg- istration books of the following City of Durham precincts: 6, 8, 9, 10, 11, 12, 13, 17, 18 and 22. On June 5, 1967, Mr. Meyer furnished the following results of the Durham general elections Results of Durhani general elections, May 13,1967 Precinct No. ~ ~ For mayor - Gra- Har- barek din For alderman, ward 2 Booth Ever- ett For alderman, ward 4 Biggs Free- man For alderman, wardS For alderman at large' Fisher Lane Bar- hour Boul- ware 6 655 8 261 529 10 106 11 130 12 . 69 13 81 17 . 127 18 392 22 369 531 288 152 675 1,156 471 722 228 407 268 483 .193 431 35 40 26 32 64 334 315 655 306 221 656 `1,118' 475 749 275 420 299 628 229 508 63 64 34 . 43 .92 304 272 492 282 148 . 634 1,085 473 . 715 223 452 342 710. 371 477~ 601 1;o35. 407 . 690 235 499 417 253 75 80 57 52 19 50 .. 59 122 72 603 172 276 82 75 31 52 .~ 87 195 197 361 316 `169 839 1 295 558 ,` 400 250 480 249 I Furnished by G. F. Steele, Jr., June 5, 1967. Mr. Meyer furnished the following schedule pertaining to the City ofDurham's 1967 municipal elections "CITY OF DURHAM 1967 MUNICIPAL PRIMARY AND MUNICIPAL GENERAL ELECTIONS -"Durham County Board of Elections: Sigmund Meyer, Chairman; J. V. Ingram, Secretary; Charles N. Fuller, 320 Wachovia Bank Building, Durham, N.C., Telephone: 682-4747. PAGENO="0197" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1035 "To the Registrars of City Precincts of Durham: "The `following is a calendar of the `dates to be observed by you in the coming Municipal Primary and Municipal General Elections: "March 29: The Registrars will meet at the City Hall (Council Meeting Room) at 10 :00 o'clock A.M., Morris Street, 2nd Floor, for instructions and afterwards pick up registration books, etc. "April 1: The Registrars will remain at the polling places from 9 :00 o'clock A.M. until sunset for additional registration of voters. ,Sunset 6:37 o'clock P.M. "April 8: The Registrars will remain at the polling places from 9 :00 o'clock A.M~ until sunset for additional registration of voters. Sunset 6 :43 o'clock P.M. "April 15: The Registrars will remain at the polling places from 9 :00 o'clock AM. until sunset for additional registration of voters. This is the last day for registration of ,voters for the coming Municipal General Election. Sunset 6 :48 o'clock P.M. "April 22: Challenge Day for the Municipal Primary Election. On this date the Registrars will remain at the polling places from 9:00 o'clock A.M. until 3 :00 o'clock P.M. "April 26: At 10:00 o'clock A.M. the Registrars will meet at the City Hall, 2nd Floor, for instructions and pick up poll books, etc. "April 29: Municipal `Primary Election. The polls will be open from 6:30 o'clock A.M. until 6:30 o'clock P.M. After taking the prescribed oath, open the polls and conduct the election. After 6 :30 o'clock P.M. tally the ballots, make duplicate returns, mailing duplicate copy that night to the Chairman of the Board of Elections at 320 Wachovia Bank Building. Immediately after tallying the ballots t'elephone the results to 682-4747 or 688-4205, or 682-2621, or 688-8181. "May 1, Monday: The Municipal Primary Election returns will be canvassed at the City Hall (Council Meeting Room, 2nd Floor) at 10 :00 o'clock, AM. Reg- istrars will deliver the Original set of returns' brought with' them, as well as the registration, poll books and miscellaneous supplies. Statement of account, ori- ginal return and voting machine keys should be brought to the City Hall. Everything else should be delivered to the Board of Elections office. "May 10: The RegIstrars will meet at the City Hall (Council Meeting Room), Morris Street, 2nd Floor, at 10 :00 o'clock AM., for instructions and afterwards pick up registration books, poll books, etc., for Municipal General Election. "May 13: Municipal General Election. The polls will be open from 6 :30 o'clock A.M. until 6:30 o'clock P.M., for the General Election. After 6 :30 o'clock P.M. tally the ballots, make duplicate returns, mailing duplicate copy that night to the office of the Board Of Eections, 320 Wachovia Bank Building. Immedilately after tallying the ballots telephone the results to 682-4747, 688-4205, 682-2621, or 688-8181. "May 15:' Monday The Municipal General Election returns will be canvassed at the City Hall (Council Meeting Room, 2nd Floor) at 10 :00 o'clock A.M. Regis- trars will deliver the original set of returns brought with them,' as well as the registr,ation books, poll books and miscellaneous supplies. Statement of account, original return and voting machine keys should be brought to the City Hall. Everything else should be delivered to the Board of Elections' office, 320 Wachovia Bank Building, Durham, N.C., Phone 682-4747. "DURHAM COUNTY BOARD OF ELECTIONS, "By: SIGMUND MEYER, Chairman. J. V. INGRAM, secretary. CHARLES N. FULLER, Member. "Note: Keep this calendar of dates for future information and reference, also all Notices, Letters, etc., you receive at any time from the Durham County Board of Elections. "It may be possible that it will not be necessary to have a City Primary Elec- tion, this will depend upon the number of candidates filing notices. If there is no Municipal Primary Election you will be advised about it sometime after 6:00 o'clock P.M., Friday, April 14, 1967, which is the final filing date and hour for candidates. "There is to be no further registration of electors between the Municipal Pri- mary and the Municipal General Election. "Please note: AU meetings for this election are at the City Hall 2nd Floor, Morris $treet, City. "For voting machine service call office of Durham County Board of Elections 682-4747" PAGENO="0198" 1036 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 On June 2, 1967, Miss Charsie Hedgepeth, Program Coordinator and Miss Joan Burton, Community Worker, Target Area A, were interviewed in the offices of Operation Breakthrough. Miss Hedgepeth acted as spokeswoman with an occa- sional comment from Miss Burton. Miss Hedgepeth advised that during the past year Operation Breakthrough has conducted a `Voter Education Program involving an effort to contact a maximum number of Durham's poor. The program was designed to explain to the poor the importance of registering and voting. According to Miss Hedgepeth, early in 1967 Operation Breakthrough began reviewing registration books in the office of the Board of Elections. These books were available daily, Monday through Friday. Lists of registered voters were compiled. Using the voting lists and tax maps, door-to-door canvassing in the target areas was commenced and several hundred of the poor were registered on three successive Saturdays in April, 1967. Miss Hedgepeth estimated that ap- proximately 500 were registered in Target Area A. Miss Hedgepeth said Operation Breakthrough automobiles were used to trans- port the Durham citizens to the polling places for the purpose of registering on April 1, April 8, and April 15, 1967, and this effort was considered the end product of the one year `Voter Education Program. Miss Hedgepeth explained that Operation Breakthrough community workers are assigned to specific geographic areas in what are considered target areas in Durham. On the days of the municipal primary and general elections (April 29 and May 13, 1967) Operation Breakthrough employees, on a voluntary basis and using personally owned cars, transported numbers of the poor to the polling places to vote. Miss Hedgepeth and Miss Burton were shown photos taken in the vicinity of the polling places on May 13, 1967. Miss Hedgepeth stated she recognized Opera- tion Breakthrough employees, but declined to identify them, other than a photo of herself where she appears on the passenger side of a two-door Volkswagen. Miss Hedgepeth and Miss Burton were shown a political brochure captioned "The Durham Committee on Negro Affairs respectfully recommends the follow- ing (candidates for Mayor and Aldermen) ." When asked if these brochures were distributed to the people transported to the polls, Miss Hedgepeth replied, "No, it was'nt necessary, they knew who they were going to vote for." On June 2, and June 3, 1967, the investigator met with the following officials of Operation Breakthrough: Dr. Charles W. Watts, President, Board of Directors, and Chairman of the Executive Committee. Mr. Robinson Everett, Attorney for Operation Breakthrough. Mr. William R. Pursell, Executive Director. Mr. Scott Puckett, Assistant Director. Mr. Lawrence Kelly, Administrative Assistant to the Executive Director. Mr. Aden Field. Dr. Watts expressed concern over the public charges made by Fred Steele * (G. F. Steele, Jr.) that Operation Breakthrough employees were engaged in im- proper political activity. He stated that the anti-poverty program in Durham suffers from this adverse publicity and that to his knowledge there have been no violations of existing laws or OEO regulations. He indicated Operational Break- through members and staff feel they have complied with regulations pertaining to political activity and, if there has been noncompliance, they want to be ap- prised of the specifies in order that necessary steps can be taken to correct the situation. Oi~ June 2, Dr. Watts requested that Operation Breakthrough be advised of the specific allegations or charges which have been made by Fred Steele regarding improper activity of Operation Breakthrough employees. The investigator ad- visei that if the complainant, Fred Steele, had no objections, a list of specifics world be furnished the following day. (On June 3, 1967, Mr. Fred Steele furnished the following statement in re- sponse to the request of Dr. Watts: "During the Durham, North Carolina, Mu- nicipal elections of 1967, and for the period preceding the elections, including Registration of voters and the primary elections, employees of Operation Break- through were engaged in political activity in an effort to elect a slate of candi- dates." Mr. Steele declined to furnish Operation Breakthrough with specific evi- dence or charges because he felt the evidence should first be reviewed and evaluated by members of the House Education and Labor Committee and the Office of Economic Opportunity or the U.S. Civil Service Commission.) PAGENO="0199" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1037 Dr. Watts furnished the following signed statement reflecting his views con- cerning the Congressional inquiry and the matter of charges that Operation Breakthrough was involved in improper political activity. JUNE 3, 1967. STATEMENT OF DR. CHARLES WATTS, PRESIDENT, BOARD oF DIREcToRs, OPERATION BREAKTHROUGH Along with some of the staff members, I have conferred with Mr. John Buckley, minority counsel to the House Committee on Education and Labor. We have generally discussed the functions and purpose of Operation Breakthrough and the laws, regulations, and directives that apply to it. 1 have explained to Mr. Buckley that under our interpretation of the applicable laws, which was checked with officials of the Office of Economic Opportunity, the Durham municipal elec- tion is a local non-partisan election and not subject to the restrictions that apply to partisan poiiticar activity. Moreover, I have emphasized that Operation Break- through had repeatedly apprised its personnel that no support by the organiza- tion should be given to any candidate in the municipal election, and that, al- though each staff member retained his private rights as a citizen in such an elect~on, he was not to use the organization's funds or equipment, nor his com- pensated official tune, to participate in political activity. Mr. Pursell and I have furnished Mr. Buckley with prior statements by us and with other documents which amplify our position. Mr. Buckley has informed us that, despite our request to be allowed the op- portunity to learn of and refute any specific allegations w-hich either have been made, or may be made by Mr. Fred Steele, or anyone else, no such opportunity can be provided us at this time. He explained further that these allegations could only be made known to us with the consent of Mr. Steele, which Mr. Steele has refused to grant up to this point. Accordingly, any further comment by us should await the moment when we know what are the specific charges against our organization. Anyone is entitled to know the accusations against him and to confront his accuser. We trust that this right will be fully recognized by any Committee or other group that may receive charges against Operation Breakthrough. Of course, when and if specific charges of improper action are brought against Operation Breakthrough by Mr. Steele or any other citizen, I shall be glad to answer those charges and to call for appropriate action from the Executive Director of Operation Breakthrough. OPERATION BREAKTHROUGH, INC., Dr. CHARLES WATTS, President. Photos taken by B. B. Cranford, Jr., on May 13, 1967, in the vicinity of Durham polling places were shown to Operation Breakthrough officials present at the conference. Mr. Lawrence Kelly, Administrative Assistant to the Executive Director, ac- knowledged that he appeared in one of the photos. He advised that on May 13, 1967, he transported voters to the polls in the Durham municipal general election. He said he did so at the request of the Neighborhood Council and that he felt this activity was proper inasmuch as the election was non-partisan. Mr. Robinson Everett, attorney for Operation Breakthrough, advised it was his opinion Operation Breakthrough has been in compliance with OEO regulations and directives. He said that in 1955. or 1956 the U.S. Civil Service Commission had ruled that the Durham municipal elections were non-partisan and not cov- ered by the Hatch Act. Mr. William R. Pursell, Executive Director, furnished the following material pertaining to the Operation Breakthrough controversy: OPERATION BREAKTHROUGH, DURHAM, NC. Memorandum to: All staff members. From: William H. Pursell, Executive Director. Date: May11, 1967. Subject: Use of facilities and vehicles on election day May 13, 1967. This is to officially inform you that no vehicles and/or facilities of Operation Breakthrough are to be used in any way in support of any individual or slate of candidates in the General Election on May 13, 1967. This is to be Interpreted as meaning that only normal Saturday program activities will be allowed on this PAGENO="0200" 1038 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 day. It is also to be interpreted that no vehicles and/or offices can be used to get voters to the polls. It is farther to be interpreted that no staff members will be reimbursed either in salary or compensatory time for election related activities on this day. Due to the fact that this is a non-partisan election and in compliance with CAP Memo 50-A, each staff member may, if he so desires, be involved as a private citizen according to the dictates of personal conscience. WRP. STATEMENT IssTEn BY DR. CHARLES WATTS. PRESIDENT, BOARD OF DIRECTORS, AND MR. WILLIAM PURsEIL, ERECUI'IvE DIRECTOR Mr. Fred Steele's allegations against Operation Breakthrough at his press con- ference Tuesday morning were sensational and without foundation. It was ex- tremely disappointing that Mr. Steele found it expedient to use Operation Break- through as a political football again. It is surprising that Mr. Steele can align himself with those who fear registration and voting by the poor of Durham, and who would raise a false racial issue in a matter is both non-partisan and non- racial. Mr. Steele's allegation that Operation Breakthrough sought to register only Negro voters in its ongoing citizen education program is false. The white voters registered through our efforts will take issue with Mr. Steele on this matter. It is obvious for anyone to see that the limited resources and staff of Operation Break- through cannot be spread over the entire county. The citizen education efforts were concentrated within defined target areas, where extensive poverty and Negro population are unfortunately combined. These are the same target areas where Operation Breakthrough has been working all along. Any "unhealthy division" among the city electorate is more properly laid to the inflammatory statement of Mr. Steele than to the work of Operation Break- through. Mr. Steele's further allegation that Operation Breakthrough made improper use of its staff is also false. Staff members of Operation Breakthrough are author- ized and encouraged by Federal regulation to be active as individual citizens in local, nonpartisan elections. Those who are so active receive no pay or compensa- tion for these activities. On April 28, the Executive Director of Operation Breakthrough issued an order, in line with OEO directives, prohibiting the expenditure of any Operation Breakthrough funds in support of activities on election day, and forbidding the use of agency vehicles in support of such activity. A prompt investigation of vehicle schedules and reports by drivers and super- visors substantiated the fact that none were used. Operation breakthrough invites Mr. Steele to make his alleged "evidence" public so that the charges maybe fairly judged by all. Mr. Pursell: stated, "If the existence of accurate information which has not yet come to my attention can be fairly established, I am willing to consider it and take appropriate actions." The Director strongly stated however that private non-paid individual partici- pation in nonpartisan election activities is a citizen's right and privilege. The intent of Congress as expressed in the Economic Opportunity Act of 1964 has been clear from the beginning. "Maximum feasible participation" of the poor in the workings of our society surely includes the proper exercise of a citizen's right to register and vote. Attacking the encouragement and support of citizens who are poor and who seek to express their concerns through voting is hardly in keeping with the established concept of American Democracy. SUPPLEMENTAL STATEMENT REGARDING OPERATION BREAKTHROUGH Now-IxvoLv- MENT IN PROHIBITED POLITICAL ACTIVITIES, WILLL~M R. PURSELL, ExECuTIvE DIRECTOR, OPERATION BREAKTHROUGH, MAY 28, 1967 In a 19~36 amendment to the Economic Opportunity Act of 1964 Congress ex- tended the limitations on political activities contained in the Hatch Act to include the employees of Community Action Agencies. Under the Hatch Act is a specific provision in 5 U.S.C. Section 1503 permitting nonpartisan activity. It reads: PAGENO="0201" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1039 "Section 1502(a) (3) of this title does not prohibit political activity in connec- tion with- "(1) an election and the preceding campaign if none of the candidates is to be nominated or elected at that election as representing a party any of whose candidates for presidential elector r~ceived votes in the last preceding elec- tion at which presidential electors were selected; or "(2) a question which is not specifically identified with a National or State political party. "For the purpose of this section, questions relating to constitutional amend- ments, referendums, approval of municipal ordinances, and others of a similar character, are deemed not specifically identified with a National or State politi- cal party." In addition to the restrictions of the* Hatch Act, the 1966 amendments pre- clude the use of program funds, the provision of service and the employment or assignment of personnel in a manner supporting or resulting in identification of a Community Action Program with any particular political activity or any activity designed to further the election or defeat of any candidate for public office. On December 1, 1966, the Office of Economic Opportunity issued a memoran- dum (Memorandum 50-A) which explained these limitations in detail. It pointed out the restrictions are imposed by the United States Civil Service Commission and that in addition to the Hatch Act requirements, applicable to Federal agencies generally, Community Action Programs were subject to stature based requirements relating to political activity. In brief, these preclude: employees from identification even on their own time with the activity of any recognized political party; use of local agency equipment for political activity; and the conduct of political activity as part of official personnel employment or assign- ment. It is my understanding as a Durham resident that municipal elections such as those taking place on April 29 and May 13 are non-partisan political elec- tions. When I voted on those days, I saw no label or designation indicating a candidate as a Democrat, Republican or the representative of a third party. I noted that the newspapers consistently referred to the election as non- partisan. But to make doubly certain that this was indeed true, I specifically checked on April 25 with both the Durham County Board of Elections and the League of Women Voters. One candidate for the City Council in the fourth ward had been active in Republican politics last fall but I am sure that he was not in any way identified on the ballot as a Republican candidate. No one has in fact provided any evidence that either of these elections could be con- strued as a partisan election within the meaning of the Hatch Act as it has been consistently interpreted by the Civil Service Commission, the agency which Congress directed to interpret the Hatch Act, or by the Office of Economic Opportunity. I checked personally by telephone with the regional analyst of the Office of Economic Opportunity and with the office of the Inspector General Of OEO; and they confirmed my interpretations of the statute. In repeated inquiries directed to these persons and to other qualified interpreters, I have always received the same positive confirmation. In addition to these precautions, on May 11th, prior to the May 13th run-off, I issued the following memorandum to all staff members: "This is to officially inform you that no vehicles and/or facilities of Operation Breakthrough are to be used in any way in support of any individual or slate of candidates in the General ElectiOn on May 13, 1967. This is to be interpreted as meaning that only normal Saturday program activities will be allowed on this day. It is also to be interpreted that no vehicles and/or offices can be used to get voters to the polls. It is further to be interpreted that no staff members will be reimbursed either in salary or compensatory time for election related activities on this day. "Due to the fact that this is a non-partisan election and in compliance with CAP Memo 50-A, each staff member may, if he so desires, be involved as a private citizen according to the dictates of personal conscience." In a further effort to avoid any misunderstanding I directed that the various offices of Operation Breakthrough, which frequently are kept open on Saturday, be closed on May 13, 1967, and I personally inspected them to insure that they weie in fact closed Furthermore in accord with my instructions only one of PAGENO="0202" 1040 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 the eleven vehicles operated by Operation Breakthrough was in use at all on Saturday, May 13, 1967; and it was used solely to transport N.Y.C. enrollees to the John lJmstead Hospital and back. No staff member of Operation Break- through performed any official duty in connection with the May 13, 1967, elec- tion. Only a supervisor at the Children's Museum, another supervisor on duty at John Umstead Hospital and one bus driver engaged in transporting N.Y.C. enrollees can be ascertained to have performed official duties on that date. To a limited extent I was myself on duty but only to assure that my earlier instruc- tions were being complied with. All the requirements or laws and regulations have been honestly complied with to the fullest extent of my knowledge and ability~ As Executive Director I have vested in me only such authority over the private lives and activities of Operation Breakthrough employees as Congress has authorized. It is my belief that any unwarranted attempt to extend this authority would raise the serious question of constitutional infringement. CAP EMPLOYEE INVOLVEMENT IN NONPARTISAN ELECTION ACTIVITIES The Executive Director of Operation Breakthrough is guided in the formula- tion of policy concerning employee political activities by national OEO regula- tions and by the policy decisions of the OBT Board of Directors. OEO permits certain non-partisan political activities "in connection with cam- paigns which are run on a non-partisan basis and are of a strictly local char- acter. .. ." (see CAP Memo 50-A, page 4, pam. 3). The Executive Director documented the non-partisan character of the May 13 election: 1) By a phone call to Mrs. Ann Hunt of the Durham League of Women Voters, placed by Mr. Ben Ruffin, Area C Coordinator, at the Director's request on the morning of April 25th. 2) By phone calls to the Durham Board of Elections, placed by Aden Field, Administrative Assistant, and Lawrence Kelly, Senior Administrative Assistant, at the Director's request on the same morning. 3) For further documentation, a clipping from the April 26th issue of the Durham Sun, and a pamphlet from the League of Women Voters are included. The Executive Director placed a call to Dr. Charles Watts, President of the OBT Board of Directors, at approximately 12:45 p.m., April 25th, and secured his opinion as President that it was the intent of the OBT Executive Committee, in its only relevant action in May of 1966, only to bring OBT policy on election activity into consistence with that of OEO; and that this action does not pre- clude the activity of OBP employees in the upcoming non-partisan election. EXECUTIVE COMMITTEE MEETING, OPERATION BREAKTHROUGE, INC., MAY 18, 1967 The following members of the Executive Committee were present: Dr. Charles Watts. Mr. David Currie. Mr. William D. Higgs. Mr. Julius Corpening. Mrs. Christine Strudwick. Miss Delois Vines. The following members of the staff of Operation Breakthrough were present: Mr. William Pursell. Mr. Gerald Underwood. Mr. Scott Puckett. Mrs. Louise Crosby. Mr. Lawrence Kelly. Mr. Ed Stewart. Mr. James Pilgrim. Mrs. Maria Hamilton. 1. Approval of the inmates of the Executive Committee meeting of Aprfl 20, 1967: Mr. Currie moved that the minutes abovementioi~ed be ap)roved a~ written. This motion was seconded by Mr. Higgs ind i~nanimous~y voted. 2. Board Retreat: Mr. Pursell stated that the answers from the questionnaires that were distributed to the Board members at the last meeting indicated the PAGENO="0203" ECONOMIC OPPORTTJNIT~ ACT AMEI~DMENTS OF 1 967 1041 same response as the previous questionnaires : although the Board had officially approved retreat in principle, an insufficient number of members were actually able to attend. Reviewing the correlation of the answers, he stated that no more than ten members would be able to attend a retreat at any given date. Mr. Currie moved that the Board rescind its approval of a retreat. However, there was no sec- ond to this motion. Mr. Corpening then suggested the possibility of an informal meeting in a comfortable setting in Durham to discuss the report. Dr. Watts pointed out that Operation Breakthrough had a responsibility to act in terms of the North Carolina Fund Report. Mr. Corpening asked whether it would not be valuable to divide the report up into sections and assign these sections to a sub- divided Board. Mr. Currie stated that there would be some virtue in the Operation Breakthrough staff's reporting to the Board what actions had already been taken as a result of the report. Mrs. Crosby asked whether it would be helpful for the staff to make a report of the main features of what action had already been taken by Operation Breakthrough and then let the Board deal with the remaining por- tions. Mr. Corpening then suggested that a subcommittee composed of members of the Executive Committee and the staff of Operation Breakthrough intensively review the report in the light of what has already been done and what ought to be done. Dr. Watts stated that he thought that this was a workable plan. Mr. Purseli added that he thought that it would be excellent for such a subcommitee to take an evening and come to grips with the report pulling out the features that have been hnplemented and then presenting the full Board with a complete report. Mr. Corpening moved that the Ewecutive Committee approve the formation o~ an ad hoc subcommittee of several members of the Executive Committee and Operation Breakthrough staff tO study the North Carolina Fund Report. T1~'is motion was seconde4 by Mr. Higgs and unanimously approved. First asking for any volunteers for this subcommittee, Dr. Watts appointed the following: Mr. David Ourrie, Chairman, Miss Delois Vines, Mr. Victor Bryant, and Mrs. M. H. Thompson. Mr. Pursell asked that the appointment of the staff members be withheld until he had made an evaluation of the responsibilities being created by individual staff members. Mr. Higgs suggested that he employ the talents of Mrs. Crosby before she left Operation Breakthrough at the end of May. 3. Summer Head Start: Mr. Pursell stated that for four weeks the Office of Economic Opportunity had been promising that any day the approval of the Summer Head Start Proposal would be signed. Despite daily contact with Wash- ington, this apprOval has not yet come. However, they have given Operation Breakthrough their assurance that the grant would be signed minus only $3,000 from the proposed plan. This $3,000 is the result of the deletion of the positions of medical-social coordinators. Unfortunately, the Office of Economic Oppor- tunity often does not look at proposals from a local viewpoint and cuts positions which appear from their point of view to be low priority. These positions may be reinstated, however, by the additional use of volunteer services from the school systems in place of other funded positions. Mr. Pursell, stating that May 1 had been the school's deadline, emplasized his concern that if the proposal is not signed by Friday, May 19, 1967, the school systems will not be able to function responsibly. Mr. Corpening asked if Mr. Sanchez was aware of this problem. Mr. Pursell answered that he had told Mr. Sanchez this and had told him of the County School system's being asked to operate a Follow Through program which might be hamstrung by long delays in approval. The Office of Economic Op- portunity did give Operation Breakthrough the staffing patterns for the program and this relieved the situation somewhat; however, they neglected to snecifv the money, allotted to each position. Apparently, he pointed out,' the proposal is in the typing pool of tlTe Office of Economic Opportunity and cannot be signed until it is completed. Mr. Purs.ell stated that he had offered the use of his sec- retary hut they had stated that this was not necessary. 4. Letter from Mr. A. C. Sorrell: Mr. Pursell read both the letter he had received from Mr. A. C. Sorrell, requesting information about the activities of Operation Breakthrough's employees both on and off the job on Saturday, May 13, 1967, and his response to Mr. Sorrell. This stated that he would bring Mr. Sorreil's recuest to the attention of the Executive Committee Reviewing the situa- tion which culminated in Mr. Sorrell's request. Mr. Pursell stated that uñ- doubteclly the members of the Executive Committee had read of the accusations thrown at Oper'ition Breal through for its `ictivitv in political affairs Reorling from CAP Memorandum 50-A, which dealt with the restrictions on CAP agencies of their political activities, Mr. Pursell called the Executive Committee's atten- PAGENO="0204" 1042 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 tion to page 4 which ~pecifica11y exempts individuals employed by a CAP agency from regulation of their activities as private citizens in "non-partisan" elections. However, no grant funds can be used to influence the outcome of any campaign, non-partisan or partisan. This paragraph precluded Operation Breakthrough from participating in Saturday's election; it did not preclude individuals from participating in the officially non-partisan election if they desired to do so. Mr. Pursell stated that he had checked with the Office of Economic Opportunity prior to the election to see if his interpretation was in compliance with theirs. OEO had reported that any individual employed by a CAP agency could participate in a non-partisan election only if he were doing so on .a non-working day with no compensatory time afforded him. On April 25, Mr. Pursell added, he checked with the local board to make sure that this election was in fact a non-partisan elec- tion. Many of the staff members were involved in both the primary and the elec- tion; no vehicles, however, were used in any way relating to these elections. After the primary, when Mr. Fred Steele accused Operation Breakthrough of using Federal funds in the activities relating to the primary election, Mr. Pursell made an intensive check tO see if any vehicles had been used, even though he `had issued memorandums stating `this was specifically prohibited. His check proved that no vehicles had been used in any way except in previously programmed activities. On Saturday, May 13th, the Operation Breakthrough offices were locked so that no one could `accuse Operation Breakthrough of carrying on political activities. In his letter to Mr. Sorrell Mr. Pursell expressed his reservations as to both the propriety and practicality of investigating 190 employees on a non-working day. He pointed out that no evidence had been given that any person had violated any guideline, but Mr. Sorrell had requested an investigation of all staff members. Dr. Watts added that Mr. Victor Bryant, who was unable to attend the meeting, had called him to express his feelings that Operation Breakthrough should not sup- press information in answering Mr. Sorrell's letter. Dr. Watts stated that he had asked Mr. Bryant to get in touch with Mr. Sorrell to invite him to come to the Executive Committee meeting so that he could present his views. Mr. Currie asked how many members of the staff would normally work on Saturday. Mr. Pursell stated that normally very few were required to work on Saturday. No one is scheduled to work except some of the Neighborhood Youth Corps enrollees and the' drivers who are expected to drive the enrollees to their jobs. Mrs. Crosby pointed out that at the end of each working month every employee turns in a time sheet which lists not only actual required hours of work but all hours that were spent on the job. These time `sheets are approved by the immediate supervisor of each employee and. checked by the Business Office. Mr. Higgs asked if it would be possible to get these sheets now in the middle of the month to check to see who had worked on Saturday. He stated that he felt that perhaps the. appropriate way of handling Mr. Sorrell's request would be to direct him to the pertinent sections of CAP Memo 50-A, giving him ,the names of these individuals that were on the job but stating that the affairs of the employees off the job were not in this instance a proper concern. Mr. Pursell pointed out that after a preliminary investigation he had only found two people who had worked on Saturday, .Edna Cole, a driver, and Dick Wescott, a N.Y.C. Supervisor at Children's Museum. He also pointed out that Mr. Sorrell had already received a copy of CAP Memo. 50-A. Dr. Watts stated that he felt that there must first be specific allegations before an intensive investigation can be held or it becomes a witch-hunt. Mr. Sorrell should make specific charges before Operation Breakthrough could make a blanket investigation of all its employees. Mrs. Crosby suggested that any information regarding employees' on the job activities should be withheld until the official time sheets bad been turned in at the end of the month, so that in the event of an honest mistake Mr. Pursell would not be unfairly held officially responsible for his initial figure of how many people had actually worked on Saturday. Mr. Higgs suggested that any initial report to Mr. Sorrell could be defined as being merely a preliminary investi- gation. Mr. Currie stated that off-the-job activities of Operation Breakthrough employees were a concern of the Board's. Dr. Watts stated that while it was a concern of the Board, it was, nevertheless, the prerogative of each individual. Mr. Puckett pointed out that although such individual action was allowed in non-partisan elections, it was not allowed' in partisan elections. In no way, can a CAP employee participate in any `political activity, even, for instance, in holding an office in an organization like the Young Democrats. Mr. Corpening suggested that a general statement about what work was done on Saturday would be a PAGENO="0205" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1 9 6 7 1043 sufficient answer to Mr. Sorreil. Mrs. Crosby pointed out that Mr. Sorrell also requested information concerning the off-the-job activities of employees. M. Higgs stated that he did not think that they could make such information available. Dr. Watts emphasized that such activities were at the discretion of the inthvid- nal and that to investigate these activities and make the information available to Mr. Sorrell would be a breach of responsibility by Operation Breakthrough. Mr. Underwood added that while it was the Board's responsibility to protect the organization it was also its responsibility to protect the employees by afford- ing them security in their jobs. Dr. Watts stated that it would not be their posi- tion to hide the activities of anyone, but this type of investigation could not be undertaken as it would be a disservice to subject all the employees to a blanket inquisition without any specific charges. Mr. Corpening stated that Dr. Watts should relay the message to Mr. Sorrell that the Executive Committee would be glad to discuss its position with Mr. Sorrell at any mutually convenient time. Dr. Watts then stated that from this discussion he and 1~ir. Pursell would write a letter to Mr. Sorrell indicating the Executive Committee's consensus. 5. Progress Report on the Proposal: Calling the Executive Committee's atten- tion to the July 1st deadline, Mr. Pursell stated that already the staff of Opera- tion Breakthrough had spent many hours discussing and planning the type of programs that will be needed for next year. These plans have been discussed with the North Carolina Fund, with the United Organization for Community Improve- ment, and with Leonard Slaughter, who came down from the Office of Economic Opportunity in Washington. Operation Breakthrough has two years of experi- ence and knowledge in back of it; what is needed now is a creative and viable plan. In some areas, such as health and social work, unless Operation Break- through comes up with a creative plan, it is very likely to lose whole programs entirely, as OEO has placed these programs, without sufficient regard for local content standards, on the bottom of its priority list. Mr. Higgs then asked what had happened to the budget revisions sent into the North Carolina Fund. Mrs. Crosby and Mr. Pursell explained that they had been approved in essence for two months, which effectively barred any use of them. Mr. Pursell then introduced Mr. Scott Puckett. Describing the Community Development Component, Mr. Puckett stated that as it is set up now the program activities were distinctly divided between service delivery and community organ- ization which doesn't deal with the problem itself but helps organize a com- munity to solve their own problems. There are many reasons why this component needs to be reorganized. First of all, Operation Breakthrough, unless it comes up with a newly descriptive but similar program, will lose many of the service- oriented programs, such as health, social work and home economics since these programs as now described are in disfavor with OEO. Secondly, efforts to deal with specific problems have not been as significant as they could have been due to Operation Breakthrough's lack of knowledge concerning the various organiza- tions that constantly must be dealt with, in areas such as housing, welfare, health, etc. Another problem is that the demand for community development is greater than Operation Breakthrough's supply. Flexibility is greatly needed; an approach that will span all kinds of problems and areas is crucial. Operation Breakthrough envisions a reorganization of its Community Develop- ment Component that will divide it into two sections: a geographic section and a problem area section. Two administrators will be responsible for the overall direction of the program, a director and an assistant director. The geographic section will be composed of four teams serving the area that is presently being served. Operation Breakthrough has cOmmitments in these areas that it must honor. Two field supervisors will correlate the geographic sections of the com- ponent. A reserve geographic team is also envisioned both as a temporary source of additional manpower and as a training ground for new staff members. The problem area section will also be divided into four teams, each team studying a particular problem and the local solutions available, such as in housing, educa- tion, welfare and health. All the teams will spend 50 per cent of their time in what can be termed regular operations, 25 per cent of their time in training and 25 per cent of their time in planning. This is an important breakdown of time which will allow this component to function at maximum capacity both in long- range and short range perspectives. The teams in both areas will be organized ac- cording to a ladder of ability structure affording vertical job mobility. After a further discussion of the reorganization of this component, the meet- ing was adjourned until the following Thursday. PAGENO="0206" 1044 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 ADDENDUM On June 16, 1967, Mr. L. G. Holleman, Rosebriar Community, Durham, North Carolina, advised that he was a supervisor for an on-the-job training program administered by Operation Breakthrough. Mr. Holleman related that on May 12, 1961, at approximately 4:45 p.m. he was approached in his office by Mr. Aden Field, an Operation Breakthrough supervisor. According to Mr. Holleman, Mr. Field requested Mr. Holleman and two staff members to "help us out in the elec- tions tomorrow." Mr. Field further requested that Mr. Holleman and his staff members bring their persOnal vehicles. Mr. Holleman said that he would agree to this provided Operation Breakthrough's Director "put it in writing." Mr. Holleman said, subsequently, he received a telephone call from William R. Pursell, Operation Breakthrough's Director, and Mr. Pursell told him to "forget On June 17, 1967, Mrs. Geoffrey Hamilton, 862 Louise Circle, Durham, North `Carolina, advised the staff investigator that she was the secretary to the Direc- ~tor of Operation Breakthrough. In the presence of Operation Breakthrough's ~ounse1, Mr. Robinson Everett, Mrs. Hamilton stated that on May 13, 1967, during the Durham municipal elections and from 7:30 a.m. to 9:30 a.m. she handed out cards requestion prospective voters to vote for Mrs. R. 0. Everett (Alderman, Ward 2). According to Mrs. Hamilton, she handed out these political cards at the West Durham Community Center polling place. Mrs. R. 0. Everett, successful candidate for Alderman, is the mother of Mr. Robinson Everett, Counsel for Operation Breakthrough. Mr. 000DELL. Mr. Chairman? Chairman PERKINS. Yes, Sargent Shriver, do you want to say any- thing further before we recess? Mr. 000DELL. Let. me, Mr. Chairman, if I may, make one comment. 1 agree with the gentleman from California's comment about trivial partisan differences. I think it should be clarified that the Durham case involved candidates not ruiining Republican or Democratic. Both of the candidates had the word "Democrats" as such, and the gentle- man from North Carolina raises it not in a partisan sense, but because it does illustrate, I think, the very serious danger that can affect all of us. It can affect you and the gentleman from Chicago and the gentle- lady from Portland and all the rest of us if community action workers get involved in this kind of a primary contest or something of this nature. It is a dangerous situation. Mr. BURTON. I understand the gentleman's point and I understand also if there is any area sensitive with an elected official, it is the mat- ter of new people being put on the rolls to participate in an election. Obviously this could affect the future of anybody currently holding officeS I can assert for myself, I prefer that everybody is eligible and registered and vote. I am not concerned about everybody being put on the rolls. I am certain no one here on this committee or inthe Congress is concerned that everybody be eligible to register. They just are concerned about the method by which they become eligible. Mr. G-OODELL. I agree. It would have been a different situation also, and I wouldn't particularly favor getting involved this way. It wouki have been fairer if they made a grant to the two candidates for get- ting out the re~istr'ition, `is you illustrated in Californ a Mr. PUCINSKI. They don't qualify. Chairman PERKINS. The statement has been made here several times about the complaint of the gentleman from North Carolina and this is PAGENO="0207" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1045 no place to try it. 1 think we have been reasonable and I think we should-unless we have some additional statements that would bear upon the provisions of the act, that we refrain from calling it up any more and using the committee as a forum. But be that as it. may, we are going to recess until 1 :45, and I have agreed with Mr. Quie that we would not call up Headstart or Follow- up because he is attending his son's graduation at College Park and will not get back until 4:30. In the interim could we take up some other segments of our program? Mr~ SHRIVER. You are going to miss some very good sections. (Whereupon, at 12 :45 p.m. the committee recessed, to reconvene at 1 :45 p.m., the same day.) AFTER RECESS (The committee reconvened at 2:10 p.m., Hon. Carl P. Perkins, chairman of the committee, presiding.) Chairman PERKINS. The committee will come to order. A quorum is present. In the absence of Mr. Quie what is your purpose, to go to neighborhood centers at this time? Mr. SHRIVER. Yes, sir. Chairman PERKINS. Go ahead. Mr. SHRIVER. Mr. Chairman, we talked about a number of corn- munity action programs, discrete programs. We have tried to em- phasize that each one of them in the neighborhood health center or legal services or others, that the, community action aspect of each one of those programs in' the entire Community Action picture there isn't anything more significant in our judgment than the function `that is fulfilled on behalf of community act'ion by the neighborhood, the system of neighborhood centers, not just physical building, for example, but the variety of programs that go on in that program or `the way in which' the people connected with the center reach out into the community effectively on behalf of the poor. I would like, since this is such an essential element in the total Community Action picture, to ask Ted Berry, Director of Community Action for the Nation, to read to you a statement about the way we see the sigmficance of the neighborhood centers STATEMEI~T OP THEODORE M. BERRY, DIRECTOR FOR COMMUNITY ACTION PROGRAMS `Mr. BERRY. Mr. Chairman, thus far we have presented to you two programs which may be characterized as national emphasis programs which we at OEO and the coimnunity action programs conceived as areas of help to communities in meeting some of the needs of the poor. . neighborhood center concept may be characterized as being most indigenous, having been generated, conceived and formulated `by local communities as one of the tools or weapons which has been most effective in ~`both developing the involvement of the poor and generating the services that the poor need. The community ~tction programs have identified common problems of the poor ~t the neighborhood level. These problems include lack PAGENO="0208" 1046 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 of awareness of available services and services that are too distant involving difficulties of transportation. Programs and services are all too frequently fragmented and dispersed. Programs are inadequate or of low quality in the particular area of greatest need. And in many instances the poor receive a second-class treatment. The answer we have developed in cooperation with local com- munities in response to these problems has been the neighborhood center. It is, in a very real sense, a development of an intricate system which both serves as well as stimulates the poor. There are some common characteristics of. this new approach. It is not entirely new because it is an extension and an enlargement and an improvement of what generally may be known as the settlement house concept. First there is the simple fact of their existence as a local neighbor- hood enterprise in which the residents of the areas have a very close involvement. The Neighborhood Center serves a definite geographic target in which there is a relatively high degree of poverty. The center is generally, if not always, located where the poor can have convenient access to it and its operating hours are tailored to meet the needs of people it serves rather than the people who provide the service. Third, the center takes on a variety of forms, sizes, programs and so forth. Some centers are comprehensive, one-stop type service points. Some centers merely provide intake and referral to locations of services which may be available. Some centers are store fronts while others may be on wheels, particularly in rural areas. Some centers' operations have a central facility and numerous satellite outstations in order to bring the intake or contact point closest to the poverty community if this community is widely distributed or dispersed. In all, however~ there are currently some ~T00 centers today existent in some 300 com- munities, urban and rural. Each of them is tailored to the peculiar en- vironmental situation and needs of that neighborhood or that community. Fourth, the center has regular rather than incidental functions,. including the basic elements of an outreach service. This involves the employment of residents of the area who, after training, reach the people who have been aware of the existence of these services. Who also,. by constant contact, generate a climate of interest and lay the ground- work for involvement of the people in a more meaningful way. This is a basic part of the concept of self help. The intake function for the processing of people who are brought to the center, performs a diagnostic service in terms of the needs of the particular individual or family in need of services. A function of referral because it is impossible to bring into a par- ticular center all of the services that may be needed. The establish- ment of the inventory of available resources of a social, economic, and welfare nature which are existent in the community is required for referral of the persons according to their need. Then consider the function of followup where outreach workers as well as the institutions and organizations are involved with a family or individual. A system of followup is required to at least establish the basis for recording the results or the end product of thiS process PAGENO="0209" ECONOMIC OPPORTTJNITY ACT AMENDMENTS OF 1967 1047 of involvement. Usually each center has an information service. And then finally, the very important ingredient or function of training, both inservice training of personnel as well as the development of specific training programs that might be needed by those who are seek- ing the services of the center. These we call core services. These are funded as a basic part of any neighborhood center for which funding may be sought. In addition, the center usually provides a comprehensive range of component services to residents. Many of the services are provided through referral to existing services. Where these services do not exist in a community, particularly in a rural or small urban area, where these services do not exist or are not presently available, the center it- self provides the services. These may include manpower training services, legal services, health services, a variety, of social services, housing, homemaking services, and consumer counseling services. Consumer counseling service pro- vide the poor with an awareness .and understanding of how their dol- lars may be stretched and how they may protect themselves against unfair consumer sales practices or consumer debtor practices. Adult literacy and child development services may also be provided. In many centers these services are either housed in a facility or under the direction of the center maybe outstationed in an ancillary facility in close proximity to the center itself. And if there is a legitimate need, that need is met by the center and not postponed, delayed, or excused if it all can be provided. The center's role is to relate to a person's total needs at one place or at least at places which are in convenient proximity to the point of intake and referral. The center is to bring to bear a coordinated sys- tem of high-quality human development services for the whole person or family in the same manner that the Department of Defense uses a weapons system approach to its problems. Another salient feature of the centers is the opportunity for neigh- borhood residents to work together as a community to identify and act on common problems and needs. In an earlier presentation we pointed out one of the areas that the poor or their representatives are involved in is the resident advisory council. This is their first point of volunteer, noncompensated par- tici~ation in community development. Some 30,000 are serving' on advisory boards throughout the community action agencies and many of them in connection with the neighborhood cent'er programs that have been generated in'their communities. The residents are encouraged to participate in the development and `operation of the neighborhood center system through a board repre- senting the residents in the neighborhood area. Through such participation the poor develop competence as a com- munity and also assure that' the neighborhood center program is relevant to their needs. The last, but probably `the' most significant, characteristic of the center is its capacity to serve'as a center for self-help. Centers train and employ the poor from the neighborhood to carry out the functions of the center program. We are learning that for many the center pro- vides a takeoff point in thatit provides first-time employment in career development under professional guidance.' 80-084-67-pt. 2-14 PAGENO="0210" ~~1O48 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 As soon as the residents of the. area have been trained and have had experience they are in increasing demand for other employment in social service fields. It has been through the neighborhood center concept that we have -developed the career areas of teachers aids, health aids, aids to nursing associations, as well as instructors and tutors in a variety of services which have heretofore been neglected and not utilized when this reservoir of potential manpower and service is resident within the -target areas. In summary, neighborhood centers and the system of which it is -the core, have become the focal point for Community Action, com- -munity involvement and community self-help. The center becomes the people's program. It belongs to the people of the community and -we are gathering increasing evidence of the extensive use to which they are using it to help them with their own problems. In statistical terms, in the first year of our operation, we funded C-some $77 million in neighborhood center programs in response to coin- ~rnunit-y demand. This years, this sum, within the limitations and avail- ability of the local initiative funds that were available, we are fund- Ing $110 million in neighborhood centers with a total of 700 of which -630 of them are in urban areas and 70 of them in rural communities. Some of the demands which we have included in the presentation here indicate that the level of demands for neighborhood centers, with "heavy emphasis in the rural areas, will be some $160 million for this coming fiscal year given the requested appropriation and the fiexi- -bility of local initiative funding. We -b~lieve, as -we have indicated, that this becomes time heart of Community Action because within it, as we have already indicated, `legal - services are frequently, housed, certain components of health -ser~ices -(as distinguished from the comprehensive health program which usually requires its own physical facility). This, Mr. Chairman, is a further illustration of the comprehensive- ness of Comrnunity Action Programs. While we have encouraged and responded to the development of the neighborhood center, it may be of interest to the committee to learn that the variety of programs meeting the individual needs of communities, have been developed and, up to the present time in our whole funding process to Commun- ity Action agencies, we have expended from appropriations made :~vailable to -us. -$1,200,000 since the beginning of our agency. The number of components of programs in the various categories `of services total over 15,000 different types or different components - -of programs. `Within many Of these communities these component - programs ~become the matrix on which the neighborhood center has developed as the system for delivering these services to the corn- - rn-unties in which-they are established. So, without suggesting that any funds be earmarked precisely for - it. we wanted the committee to know that this has become and is emerging as a very essential element of the community action program `in responding to `local community assessment, identification of the method by which they will deliver these programs to the people who --need them. Chairman PERKINS. Mr. Gibbons, do you have any questions on this phaseøf community action? PAGENO="0211" ECONOMIC OPPORTIJN1TI ACT AMENDME~TS OF 1967 1049 Mr GIBBOIN S No questions, Mr Chairrn~n Chairman PERKINS. Mr. Scherle. Mr SCIIERLE Thank you, Mr Chairman In May 1966, Secretary ~Wirtz stated that there were 1 2 million youths from 16 through 21 who needed part-time work to stay in school or return to school. Would you tell me how one makes that judgment? Mr. BERRY. Of course, your question is based on that program which :1~ funded under title I, Neighborhood Youth Corps. The judgment, .1 think, is based on statistics, derived from the number of youth, high school youth, that have dropped out of school through economic need ~as well as lack of motivation as well as the number of youth that are in school that are in need of financial assistance. Mr. SCHERLE. Actually, now do you go about finding these young- stei s for the reasons of their being in school or returning to school ~ Flow do y ou arrive at this figure ~ Mr BERRY Mr Levme, who is our researchman, c'tn probably give us the statistics or the mechanism by which these statisics are gathered Mr LEVINE In the course of its regular sample surveys each year, sir, the Census Bureau takes a look at incomes of people in the various age categories and :it has come up with an estimate of 1.2 million voi ths who ~tre in school who `ire below the poverty line based on the simple suriey Mr SCRERI E When were these surveys taken ~ On the Fist census ~survey? Mr. LEVINE. No, sir; these are sample surveys. Actually, these sur- veys are taken monthly to provide unemployment statistics The par ticular ones from which the statistics you used were obtained are derived each March Mr SCHTPLE What position do you take in regard to whether they should be in school or returned to school ~ Mr LEVINE We think that if we are to get rid of poveity in general `my kid of school age who is in school ought to stay in school and if lie is poor he probably needs some financial help to stay in school We would hope that the kids out of school in this age group would i ~turn ~o school That is one of the objectr~ es of both the Job Corps and thu out of school Neighborhood Youth Corps Mr SCHERLE Is the OEO diverting funds from the regular in and out of school Neighborhood Youth Corps program in order to pump moi e money into keeping these kids off the street this summer ~ Mi LEVINE The `tns~ er is "No" There are as part of our regular ~tppropriations summer programs which primarily continue the school yeai time programs As you know, OEO received $75 million additional appropriations, supplemental for th'it recently, for summer programs I think about 47 some odd million doll'trs was for the Neighborhood Youth Corps Mr SCTIERLF You will not take any money out of the regular OEO to pump into this thing to keep the kids off the street ~ Mr LFVINF Our objective is not to keep kids off the street Our ob jective is the general antipoverty objective, to cover the summer for pooi kids who `ire helped one W'Ly or another by the program during the school year. PAGENO="0212" 1050 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. SCHERLE. Keeping them off the street would keep them out of trouble, don't you think? Mr. LEVINE. I have no objection to keeping them off the streets.. The point I make is the one Mr. Shriver has made frequently, that the objective of the OEO is not to avoid trouble in the streets. The objec- tive of OEO is to get rid of poverty. Mr. SCHERLE. Doctor, I can tell you one thing here and now, that. neither you nor I nor anyone else will, ever eliminate poverty corn- pletely. My next question: How many total Neighborhood Youth Corps. graduates have you had? Mr. LEVINE. About 900,000 young people through the Neighborhood. Youth Corps. Mr. SHmvER. The Secretary of Labor will be here to testify. Chairman PERKINS. Why doesn't the gentleman wait until the wit- nesses who are experts on this program are here? Mr. SCHERLE. Mr. Chairman, whom do you have here? Mr. SrnnvRR. The idea, Congressman, is that today we would take up in order some of these programs like the one we are talking about, the neighborhood center program. The Secretary of Labor and Di- rector of the Neighborhood Youth Corps will be here to testify about the Neighborhood YOuth Corps. What we were hoping to do is cover the community action things at this time. Mr. SCHERLE. You have so many different programs I hope you will: pardon us because it is hard t.o keep up with what you really have. In fact, I think you have more than we really know about. I have been told that there is an OEO program in New York which consists of the formation of a groëery co-op under the direction of OEO personnel. Is this true? If so, how can you justify taking x dollars to put the poor and any factor of Government in direct com- petition with neighborhood grocery stores? Mr. BERRY. Your information is incorrect. We have funded a pro- gram in New York, in Brooklyn, a consumer action program, which was jointly developed by the community and the small businessmen iii that neighborhood for developing an intelligent program of consumer education, buying information, price information, and the develop- ment of credit unions that would enable the community to more actively and effectively use the dollars within that community so that both business as well as the people will be benefited by. it. It is not a program that is putting the community action agency into business. Mr. SCHERLE. How big is this warehouse or general store, whatever you call it? Mr. BERRY. It is not a general store, and I did not use the term "gen- eral store." Mr. SCHERLE. I did. Mr., BERRY. It is not a warehouse either. It is being developed in. connection with a neighborhood service center. Mr. SCHERLE. Certainly you must have a lot of merchandise on the shelves. Mr. BERRY. No, sir. Mr. SCHERLE. And a lot of people employed. PAGENO="0213" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1051 Mr. BERRY. No, sir; they have not purchased any merchandise. Mr. SCHERLE. Then will you explain to me exactly what this is? Mr. BERRY. I will give you a full digest from the highlight of the program and for the áommittee as a whole. I don't have it here avail- able but I will fuinish it Chairman PERKINS. The time of the gentleman has expired. Mr. Dellenback. Mr. DELLENBACK. Mr. Chairman, may I reserve my questions and let Mr. Gardner go forward. Chairman PERKINS. Mr. Gardner. Mr. GARDNER. Mr. Berry, has the, neighborhood center program been successful thus far? Mr.' BERRY. We think it is being marked by substantial evidence of success. 1~fr. GARDNER. I understand you had a report compiled. I think it was done by the Kirschner Associates out of, New Mexico. Mr. BERRY. Yes. Mr. GARDNER. In 1966. They have certain phases of it that they were very critical of. Has anything' been done to try to strengthen these particular areas they pointed out, or did you place any reliance in the report? Mr. BERRY. Yes, we did place reliance in the report. I would like Mr. Hess, who is my chief of program planning, to make some coniments on the implementation of. the findings of the Kirschner report. We have certainly taken them into consideration. We felt it was consistent to have an objective evaluation. Mr. GARDNER. Could we have a copy of this report? Is it available? Mr. BERRY. Yes, we can make it available., (The information requested follows:) Subject: Highlight Memorandum for the Consumer Action Program of Bedford- Stuyvesant, Inc. (CABS). I GRANT SUMMARY (a) Grantee: The Consumer Action Program of Bedford-Stuyvesant, Inc. (CABS), 247 Tompkins Avenue, Brooklyn, New York 11216. Region:. Northeast. (b) Cost: $380 320 380, 320 Total cost Non-F~th~ra1 Federal (c) Grant #CG-67-8445. (d) Title: CABS, Inc. (e) Section 207 Demonstration.. (f) Length of Grant: April 1, 1967-March 31, 1908. II. PROJECT SUMMARY (a) (1) Previous Grant None (2) This Grant $380 320 one year (3) Future Grant (estimate) : $577,000,* one year. Total, $957,320, two years. (b) Results to date: Pre-planning has resulted in the organization of 64 target area blocks and consumer councils, the training of 70-80 aides, contact estab- lished with 64 small local business firms, and the organization' of over 7000 persons preparatory to the organization of a community credit union. *Increase for the second year is based on `the estimated' need for additional personnel and program expansion to other project areas in the neighborhood. PAGENO="0214" 1052 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 III. WHAT IS TO BE DEMONSTRATED This indigenously designed proposal will demonstrate- 1) that consumer/distribution problems of the low income resident a?u1 tile low income entrepreneur can be met through an integrated community consumer action organization. 2) that such an organization can offer dual services, one level tailored to the needs of low income consumers, and the other tailored to the problems of the indigenous merchant, and that by so doing, both groups can provide them- selves with the technical and institutional capabilities to solve their consumer related problems. 3) thn~t such a program, uooperatively run, will measurably increase eon- sumer sophistication, enhance the quality of goods and merchandising tech- niques for the small neighborhood merchant, and create for both the means to influence the present "ghetto marketing system" by providing alternatives to that system. IV. WHY THIS DEMONSTRATION IS IMPORTANT This proposal is important because: (1) It combines consumer and retail interests in a common effort rather than treating them as natural antagonists. (2) It utilizes a community owned structure which; by example and the creation of new economic alternatives, is designed to negotiate changes in the presently exploitative ghetto marketing system. (3) It will materially strengthen both the consumer-reshlent and the small merchants-resident by introducing variations of free enterprise en~ tirely new to the community. (4) It broadens both the base and function of the credit union in a low income community. By introducing the assets of local small enterprises into the credit union structure, the pace of capital growth and therefore the' ability to become self sustaining will be acelerated. It will raise tl~elevel of all the participants. not only in dealing with their own consumer-related problems, and in handling problems as a comnnoiity. It will provide a model, if successful, clearly adaptable to every urban area similarly distressed. It is entirely consistent with the 207 Demonstration Plan and it clearly attacks one of the most important aspects in the cycle of poverty. V. SUMMARY OF THE WORK PROGRAM This program is divided into three phases. The First Phase will see appoint- ment of the Project Director, selection of operational site, and organization of office procedures and staff. The Second Phase will consist of activation of the presently organized sixty- four Block Consumer Committees resulting in neighborhood election for enlarg- ing tl~e present CABS Inc. Board. In addition. a credit union will be organized, staffed, and a board elected by the membership. All staff training is to be con- tracted from OTJNA and the State League. The Third Phase wifi begin with the chartering of the credit union. Special- ized credit union services will be inaugurated (described below) and the com- munity-wide consumer education program will begin (described below). Special committees will be organized by the Block Councils to organize buying clubs, to recruit credit union membership, and to effect liaison with other consumer pro- grams in the New York area. The CABS Inc. Consumer Organization will contain the following elements (1) A Credit Union. (2) Line of Credit Service. (3) Legal Advisory Service. (4) Financial Planning Counseling. (5) Debt Consolidation Clinic. (6) Consumer Education Program. The organization will include both residents and neighborhood merchants. Each service offered will be dual in design. one level tailored to the specific problems of low-income consumers, the other tailored to the specific problems of the low-income neighborhood ~percbant. PAGENO="0215" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1053 The credit-union serves as the financial nucleus of the organization, offering in addition to its normal functions of a. saving and lending institution, a line of credit system which means that- (a) for the member-consumer, it will be possible to establish a line of credit through the credit union in order to charge purchase with par~ ticipating merchants. The credit union reimburses the merchant, debit- ing the member-consumer's account. In effect this reduces the con-. sumer-merchant relationship to a cash basis, relieving the merchant of the cost and anxiety of a store-operated credit system. (b) for the member-merchant, the same relationship is set up between wholesalers and other creditors and the merchant. By putting the small merchant of a "cash" basis, his costs are lowered, his credit and bargaining: power with the distributors is strengthened. The other services work in a similar manner: The legal advisory element, acting as educator, will train individual consumers in preventive action, alerting them about their rights as consumers, and w-bere legal redress or protection can be sought. The neighborhood merchant, frequently ignorant of his rights as an entrepreneur in the free enterprise system, needs guidance and counseling on the many laws and resources designed for protection and promotion of small. business. The presently organized consumer block councils will be enlarged by adding those merchants who are participants in the program and will be known as Consumer-Merchant Block Councils. The CABS consumer action and education program will be initiated and guided by the Project Director through the Consumer-Merchant Block Councils. The Councils will sponsor training and education programs for residents and members of the program. Included in the curriculum will, be- (1) Orientation on CABS program and services. (2) The Credit Union and its services. (3) Buying Clubs, their organization and value. (4) the marketing problems of Bedford-Stuyvesant. (5) the wise use of credit; techniques of saving. (6) Consumer-Merchant problems. (7) Economic Cycles and their meaning; problems of supply and demand; impact of economic forces on consumer and merchant. (8) Techniques of comparative shOpping. (9) Legislation for consumers; legislation for merchants. (10) Bookkeeping and accounting; wholesale buying techniques; tax cor~ portation and bankruptcy problems (for the small merchant). Iii addition to the training program, the Councils will set up subcommittees, the purpose of which will be .to effect liaison with other programs and resources~ in the' general area, to organize buying clubs for individual consumers, to orga-~ nize buying clubs or buying cooperatives for resident merchants. The Block Councils will also serve as local consumer information centers, and. as referral points to the CABS Consumer Aëtion/Oredit Union Center. VI. PROJECT PERSONNEL AND ORGANIZATION The Project Director will be Mrs. Gladys R. Aponte. Mrs. Aponte received.. her B.A. in Political Science (1958), MA. in Public Administration (1959'), and. LL.B. in Corporation Law (1962), all from The University of Puerto Rico. From 1962-63 she was a Contract Compliance Officer for the New York City' Comm.ission on Human Rights; from 1963-65 she acted a.s Program Developer' in Consumer Education, again with the `Human Rights Commission. From 1965 to `the present she has been the director of the Consumer Education Program of Youth in Action, Inc. As Consumer education Director for YIA. she has developed a nucleus of highly trained neighborhood aides (over 40), organized 64 blocks of YIA's Area II into consumer block councils, each having its own elected chairman. A substantial number of residents have become well-educated in consumer problems as a result o'f the block organization and training accomplished by the Project Director over the past year. The proposal is the result of considerable planning and discussion by the residents who have been involved in the program thus far. Evidence of involvement and resident participation is witnessed by the peti- tion of over 7,000 persons who pledge support for a neighborhood credit union. PAGENO="0216" 1054 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Sixty-five small businessmen have been interviewed and have responded affirma- tively to the organization of, and their participation in, the credit union. Approximately 25,000 persons have been involved in some phase of the con- sumer program, either by interview, personal contact, assistance, referral, or participation in a consumer activity. The present CABS Board of Directors are all residents of long standing. All but one are poor, all have been well-trained in consumer affairs. They have been the key leaders in organizing the Block Councils, covering the entire target area. One of the first acts by the present CABS Inc. Board (and a special condition of this grant) will be the holding of elections to form a new and permanent board, representative of the entire area to be served. They plan to have the Block Council, now numbering 64, to elect one representative for every 2 blocks. This will fill out the Board to a total of 32. Elections will be in conformity with OEO guidelines. Present interim members may also stand for election since they are residents of the same areas. However, present membership will not continue unless ratified by elections as described above. The organization work thus far done, the spirit and support of the com- munity evident to all who have studied this community, is high recommendation for their will and competence to carry out this program which they have designed. VII. RESULTS EXPECTED The achievable goals anticipated by the end of the first year of this project are- (1) An indigenously operated neighborhood organization of low-income consumers and low-income merchants now capable of modifying the pres- ently exploitative ghetto marketing system. (2) New and practical variation of the free enterprise system, e.g. a community-controlled low cost credit system and a series of cooperative associations designed to serve with the consumer and the independent merchant. (3) A credit union with a membership in excess of 10,000, assets of between $200,000 and $250,000, and an operating central charge system involving at least ~34 merchants and representing 20 categories of service (grocery, furniture, hardware, appliances, funeral, insurance, etc.). (4) Active consumer programs, the effect of which will be seen in the increased shopping sophistication of the consumer, better run stores, and a wider range of economic alternatives for both. (5) Active liaison with all other consumer programs in the Greater New York Area. (6) An evaluation report documenting the number of persons materially assisted by this program, the type of assistance, and, if possible, financial benefits to both consumer and merchant VIII. EVALUATION PHASES There are three planned approaches for evaluating this program. (a) Internal: constant records will be kept on a case by case basis. This will supply the sponsoring board (CABS Inc.) with material indicating change in thrust, techniques, or direction of the program. (b) OEO will arrange a third party evaluation team, drawn from inde- pendent sources to be contracted within 90 days of the onset of the program. (c) Periodic evaluations will be made by CLTNA International staff in col- laboration with the New York State Credit Union League. Such evaluation reports will be submitted to CAP/Community Services of OEO for review and consultation. IX. POSSIBLE POLICY OR OTHER PROBLEMS This demonstration is initially limited to area II of the Bedford-Stuyvesant ~community. As it expands, particularly in the credit union operation, the problem of an expanded field of membership undoubtedly will require negotia- tion with the State League and the Bureau of Federal Credit Unions. In addition, the overall programming contemplated for the Bedford-Stuyvesant area is presently not clear. The future role of Youth In Action (the CAA), PAGENO="0217" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1055 the proposed community corporations sponsored by the Human Resources Com- mission and the Kennedy-Javits program have not been settled. Therefore, relating to and coordination (as necessary) with future community inputs may present problems. Although these future issues cannot be predicted, the proposal is written so that any coordination necessary can be effected. Steps have been taken by the CAPS Inc. in this direction and conferences have recently taken place between the present Board and staff of Senator Robert Kennedy's New York office. (See attached letter.)* X. COMMENTS The regional comments, dated December 27, 1966 reflect the judgment made prior to the final draft. Conferences were held with Mr. Saal Lesser, District Supervisor of the Northeast Region to clarify the points raised in the Regional memorandum. As recently as March 7, 1967, Mr. Lesser reaffirmed his approval and support of the CABS Inc. program by telephone to the Headquarters analyst and sanc- tioned the use of the December 27 memorandum for the revised program now presently for OEO's approval. The other letter from the New York Office of Senator Kennedy is the result of interviews and observations of the CABS Inc. activity in Bedford-Stuyvesant over the past year and one-half. Mr. HESS. What we have done about the comments of that report are primarily the provision of additional guidance in those areas of weak- nesses that were illustrated. Second, we have provided an increased training program to com- munity action agencies and encouraged community action agencies to take on additional training of the staffs for neighborhood centers. Third, we are continuing to do additional studies and in this particu- lar case OEO is doing some on its own and we are also joining with four or five other agencies of the Federal Government and partici- pating in a joint study. In terms of the organization for neighborhood centers and how it is best organized to carry out and provide the services in a compre- hensive way- Mr. GARDNER. May I interrupt you for 1 second, because we are limited in time I would like to go back to refei to the Kirschner re- port, and ask you several questions they brought up Onpage 21, they say It might also be noted here that our field researchers report almost unani- mously that the participation of the poor in program and policy decision is very ineffectual, both at the Center level and CA Board level. Have you found this to be true, and if so, what have you found as an alternative to improve it ~ Mr. HESS. One of the factors that mitigates against the most effective participation from those who are involved as board members on coun cils is the fact that they are inarticul'lte and they are inexperienced Mr. GARDNER. How are your boards determined? Mr. HESS. The boards at the community level, neighborhood level, for the neighborhood centers, are poor people chosen by the people in that neighborhood to represent them. Mr. GARDNER. Do you have a vote on it? How many do you have' on a local board? Mr. BERRY. They vary. ` Mr Hi~ss Each community and each neighborhood sets its own rules as to what the composition of the board should be. PAGENO="0218" 1056 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. GARDNER. OEO has no basic guideline which they go by on a maximum Or minimum of board members, or any criteria, they have to follow? Mr. HEss. The criteria that is followed is primarily that t.hat is stated in the legislation, one-third representation of the poor. But at the neighborhood level you find, I think we can make a generalization, that more than half. are the poor people themselves, because the neighborhood center is in the neighborhood and the neighborhoods are generally predominantly populated by poor people. Mr. GARDNER. I would like to go back again to the Kirschner report. They say this is not working. Are you planning t.o continue along the same lines of having one-third or one-half of your local boards made up of poor people despit.e the report that I believe OEO has done which says they are ineffectual? Mr. HEss. There are a few things that we are doing. That. is, No. 1, providing them with some basic education, some fundamentals as t.o .how to be effective participants on a board. No. 2, we are trying to give them some general orientation as to the problems that they ought to be dealing with and how they might be dealt with. I think in part some of the criticism that is mentioned here is the `fact that in' many cases there is a domination of the Community Action Agency, its board and its directors, over the neighborhood center, itself, the neighborhood center director and the neighborhood center council. We are attempting now through a research and demonstration pro- gram, to learn whether there are more effective ways in which a neighborhood center can be effectively structured in its relationship to the CA. Mr. GARDNER. May I quote one more section from the report. I am sure it must be discouraging to you. It says: When asked what the centers had done for them and their families, between one-fourth and one-third of the clients report nothing. This is interesting because most of these clients were contacted either at the center or through center records which indicated they had received attention through center personnel. Do you find this is just because of a lack of time in the program? Do you feel this will be overcome in time or is this an endless battle with your clients? Mr. BlEss. I don't know that it is an endless battle, but statistics are continuing to be improved. I think another statistic revealed in that report is one which says that a very large percentage of them feel that a neighborhood center just by its presence in the community and knowing that it is there and they can go there for services and the people reach out to them to help them, I think 90 percent thought this was a good feature of the neighborhood center. But we are trying to improve our intake and outreach procedures so that the people in the community are more aware of what the serv- ices are and they are brought to them. Chairman PERKINS. Mr. Dellenbach. Mr. DELLENBACIL Thank you. Mr. Chairman. I apologize for having missed the first part of your testimony. I will be sure to read the transcript on this. PAGENO="0219" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1057 Is there a community contribution to the operation of these centers in dollars? Mr. BERRY. Ten percent up until this year. It is now 20 percent. All local 205 funding to local communities must be matched with non- Federal shares of 20 percent. Mr. DELLENBACK. These contributions can take the form of other than money, I assume? Mr. BERRY. Yes, they may. Mr DELLENBACK Who is it that establishes the value of the com munity's contribution, whatever it may be? Who determines this? Mr. BERRY. We make the determination in approving the budget for funding based on the information gathered by our analyst. The Community Action Agency may set a value on it but we review it and evaluate it and make the final decisions. Mr. DELLENBACK. Do you find as a general thing these values tend to be high and do you keep any sort of damper on them? Mr. BERRY. No, I think our experience has been that the community approaches it from a realistic, fair value The one difference that we have had is in the evaluation of volunteer services of professionals. There is, of course, the effort to put as high a value on volunteer serv- ices as possible. We have had to establish a sort of fixed level of valuing volunteer services. Mr. DELLENBACK. Do you have a similar type of fix that you use in connection with sp~tce rentals ~ 1~1i BET r'i Yes, we take into consideration the valuation per square foot prevailing in that particul'ir imirket area Mr. DELLENBACK. Do you check each one of these centers before it is established so that this vari'ition in space rental in the middle of Manhattan would be different than it would be in some small com- munity in Oregon? Mr. BERRY. Yes. Mi DELLENBACK You do have an evalu'ition, for a room 6 by 6 down town ind in `i sm'dl community would sumlai space be the same amount per square foot? Mr. BERRY. The square foot value is based on location of the facility, the prevailing market in the area and the nature of the facility itself Mi DELLENB ~CK Is there anything published in the way of stand ard criteria that you use which you could insert in the record and which I could have a chance to see? Mr. BERRY. We have not published anything, but I think we can gathei the information according to certain areas `tnd give you the sc'ile of rentals Mr DELLENBACK I am particularly interested in the Oregon values as contrasted with say a downtown urban area m a large city We don't need this at the moment but I would welcome something on it Mr BERRY We will furnish you with the mstructions to analysts as to the factors to be taken into consideration. We will attempt to assemble some examples of square foot values that are recognized in various sections. (The information follows ) PAGENO="0220" 1058 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 CAP CRITERIA FOR EVALUATING SPACE COSTS Non-Federal Space Costs I. QUALITY CONTROL GUIDELINES 2.le. The value placed on a local share item must be no greaterthan the cost allowed if the same item were acquired with Federal funds. B. 4. space Costs: a. Justification must be present for all space costs claimed in items of com- inunity rates, building value, etc. The location of the space to be utilized shouldbe included. Where space costs appear high (exceeding $3.~O to $4.00 per square foot), utilities and custodial costs should be included. b. Space in a Federal building and any other item constituting expendi- tures by OEO or another Federal source, cannot be credited as a contribu- tion toward non-Federal share. c. Local housing authorities may contribute the use of space and facilities if the contribution is genuinely "non-Federal" in character. U. ANALYSTS NOTEBOOK NO. 67, MARCH 25, 1966 A.3. The grantee must be required to submit sufficient data to enable the ana- lyst to determine the basis and the reasonableness of the valuation of non- Federal share. B.4.O School space costs in excess of 20 cents a square foot a month, inclusive of custodial and maintenance costs, and classroom furniture, must be justified. Mr. DELLENBACK. I don't mean for you to go into minutiae but I would be interested in the major thrust at this time. As to the number of centers, you said there are 630 urban and 70 rural as of this time, $160 million would add how many centers? Mr. BERRY. A total of 300 additional. That raises it to approxi- mately 1,000 of which the major portion is intended to be in the rural areas, raising the total in rural areas to approximately 300. Mr. DELLENBACK. So almost 230 of these 300 would tend to be in the rural area? Mr. BERRY. Yes. * Mr. DELLENBAOK. So this year you will be thrusting with this addi- tional increment in the direction of bringing the rural up.? Mr. BERRY. Serving needs that have not yet been served. Mr. DELLENBACK. I was wondering about your priority between rural and urban. I recognize that sometimes it is easier to begin in an urban area than in a rural area. Mr. Gibbons made comment on this in one of our prior days of testimony. But you are attempting to thrust beyond the more easily developed centers into some of the more dif- ficult ones; namely, the rural?. Mr. BERRY. Yes. Mr. DELLENBACK. Is there any greater emphasis on any group or any subgrouping within the "poor" than there is on any other? Don't you find that when you use an arbitrary qualification such as $2,700 or $3.000 or whatever it may be, that there are those who are just within it and those. who are just groveling in complete poverty? Do you have any information that you can give us as to how effective you have been in reaching the upper stratum of the poor as opposed to the lowest stratum of tile poor? Have you tended to have more co- operation from the upper stratum than the lower and to reach them first instead of the lower? Mr. BERRY. In an operating program we have not been able to draw~ those narrow lines of distinction between the clientele. Some of our PAGENO="0221" ECONOMIC OPPORTuNITY ACT AMENDMENTS OF 1967 1059, iesearch studies which geneiated m Mr Levine's office may be iden- tifying targets of inquiry to identify this, but as an operational pro- gram we have not begun to identify this variation of distmction Mr DELLENBACK Have you attempted in setting your targets with in this broad classification of. the poor, to zero in on the middle. stratum, the lowest stratum, the upper stratum, or anything of this nature? Mr. BERRY. No, only to the degree to which our regulations and funding up to 100 percent we have made a classification of the poorest counties in the Nation for instance as being eligible for 100 percent funding But in a target area of the poor, in an urban community, it is identified both by its population and its economic level and it is intended whatever programs ar,e there to meet all of those within that economic group without any variations or distinctions. Mr. DELLENBACK. I keep waiting to hear the crack of the gavel over my shoulder. May I ask one more question? Mr. LEVINE. May I. add to that, Mr. Chairman? There are two things: One is in terms of targets. Implicit in Mr. Berry's statement is th'tt we go to the neighborhoods of the poor and not all the poor in the `United States by. any means are in poor neigh- borhoods. Half of the poor of the `United States are in the worst parts of the cities and in the poorest rural areas. This does not mean that community actions confine themselves to these. It means that they con- centrate more heavily on this. We have some research questions that it is easier to reach the better off poor. They are all pretty poor under our poverty lines. In terms of attempt to target, community action does not attempt to target the better off poor. . Mr. DELLENBACK. May I ask one more question, if I may?. What do you see as the total number. of centers which you would like to see established in the `United States and how many dollars would this call for on an annual basis of expenditures if we were to reach them all? . . . J~ Mr. Shriver available to answer that? Mr. SHElVER. While they are getting `that figure, somebody can do it and without taking up any of your time I was wondering whether we might call your attention, Congressman, to this pamphlet which is a community action pamphlet of the type on the neighborhood center. There are a number of these publications. Chairman PERKINS How many pages is the publication ~ Mr SHElVER It is2O some pages I would not suggest putting them in the record. We have these. We have given them to commtinity ac- tion agencies so they can see what the idea is. Mr DELLENBACK We are here dealing with one of the major com ponents of the cOmmunity action program. Mr SHRIVER That is right It is very important There are other pamphlets about different programs within community action so that a local group can get a pamphlet like that and understand what we are talking about. Mr. DELLENBACK. I will appreciate, and I am sure all members of the committee will appreciate, your being selective in your suggestions of what we read because, like you, we also have a vast volume PAGENO="0222" 1060 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 `Mr. BERRY. We will get you a whole set, Mr. Dellenback. We put out a series of eight. Mr. DELLENBACK. I was asking for you to be my editor. Mr. Snmviiai. On the back page it shows the names of the others in case you want to order. Mr. BERRY. I have the answer to your last question of what would be the estimated need. Approximately 1,800 centers. Chairman PERKINs. How many do we have funded at. the present time? Mr. BERRY. 700. Chairman PERKINs. How many of the 700 did we fund the past fiscal year? . . Mr. BERRY. Since the beginnmg? Approximately 100 additional to those that we initially funded in the first year of our effort in .1966. Chairman PERKINS. In other words, about 600? , Mr. BERRY. 600 the first year. Chairman PERKINS. What are your plans this year?. Mr. BERRY. 300 more to 1,000. Mr. DELLENBACK. To get to the 1,800 which you anticipate is the optimum, what is the annual cost? Mr. BERRY. It would be $400 million the first year with $600 million as a continuing supporting budget. Mr. DELLENBACK. Thank you, Mr. Chairman. Chairman PERKINS. How much for the next fiscal year for neigh-~ borhood centers? Mr. BERRY. $160 million. Chairman PERKINS. Go ahead, Mr. Shriver. Mr. SHRIVER. We are just responding to questions. Chairman PERKiNS. Mr. Gibbons? Mr. GIBBONS. I just want to say while I agree that the neighbor- hood centers weren't designed to prevent unpleasantness such as I' have had in my district in the last week, I would like to say, and I want the record to clearly reflect, all the reports that I have received from the Tampa area showed first of all that when daylight came the neighborhood service center ~workers volunteered and were the first ones in the area when the riots were going on, a biracial basis, really taking their lives in their own hands; that nearly all the people~ who were actively involved in bringing the situation under control were actively identified with the economic opportunity program. I think they performed in an exemplary way. Mr. BERRY. Mr. Chairman, I would like to comment. The experi- ence, in Congressman Gibbons' district was borne out also in Cleve- land last year. The neighborhood center that we had funded for the Hough area had only recently been opened a matter of approximate- ly a month to 6 weeks before the Hough incident in Cleveland. But the neighborhood center remaining open 24. hours of the day became virtually a `lighthouse in the storm in terms of rallying the people and establishing a focal point of some responsible leadership in a torn area. , This has been borne out in other communities likewise. The neigh- l.)OlllOod center has become a sort of social anchor in an area of con- siderable confusion and distress. PAGENO="0223" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1061 Mr. GIBBONS. May I comment a' little further there? I agree that the purpose of establishing the centers should never be one of trying to cool off a long hot summer. I think that is a per- version of the thrust of the program. I certainly don't encourage that. I have peih'tps been in 40 or 50 neighborhood service centers around the United States. I really think it is a great idea. They are doing a fine job every place I have been, particularly where they involve strong programs of job development, and on-the-job train- ing. These seem to be most effective every place as being areas of hope. I hope we will be able to fund all the rest of these centers because they really are effective tools in getting the job done. Mr. SHElVER. There is a chart there I notice on the floor showing what a center in Chicago looked like, in the Lawndale area of Chi- cago. I think last' summer there were disturbances in Lawndale. It shows in a pictorial sort of department store setup how one of those centers operates. YOU can see they have Headstart classes, they have tutoring for youth, teenage kids. They have a program out there of rat eradication. They call it rodent and vermin control which is operated out of these centers. They have building code violations where the people who work out of the center, the poor people look over the buildings, assisting the building department in the city that way. They have initial interview- ing for Job Corps candidates. They have small business loan pro- grams. They have recreational cultural enrichment summer programs, manpower programs, Neighborhood. Youth Corps, Legal Aid and, in one case in Chicago particularly they have about eight or nine of these; they have Upward Bound clubs in these centers for the kids who are upward bound in the college. They have an ongoing program the year around that operates a center like this. So you can see it is `i place which bungs together `t whole spectrum of seivices and `tctivities To the extent that it is something like this in the bigger city it becomes, as Ted just said, a soci'tl `inchor, it is a soci'il centei-I will not call it a progress center, which is extremely valuable in the neighborhood the year around, not just a riot gun. I was in one in Princeton, Mo., lastweek that was in a small frame- house that belonged to a private citizen there who gave it to the Com- munity Action Agency as a center. In that center they had lleadstart classes. They also had something I have never seen before. They had a whole ioom full of clothes, children's, women's, and men's clothes which had been donated by the people of the town, very small town, 1,400 people. The poorest people of the town could come to that center and get these clothes. The whole thing was very inexpensive because the house had been given by a locally independent citizen It was staffed I think by just one person, but it was serving for what, that community apparently needed for the `poor and for outreach `to the poor. So they go all the way from a rather elaborate multistory thing like that to~ a private home in a town where you could not possibly know that it was an urban progress center or neighborhood center. it is just another house on the street., Mr. GIBBONS. The charts that have been prepared by OEO for this presentation. at' this time are so outstaiiding 1 would ask unanimous PAGENO="0224" 1062 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 consent that our staff director be directed to work with OEO and in- clude these charts in our hearings at the proper place. I don't want to have to get unanimous consent every time we have one of these but they are helpful in understanding the program. Mr. SCHERLE. Mr. Shriver, or one of you gentlemen at the table, does self-help come under this neighborhood service system? Mr. BERRY. Yes, sir. Mr. SCHERLE. We have a project done by OEO in a locality where it takes a certain group of women, 1 think perhaps in a low-income bracket, maybe $2,000 or $2,300, and they have these women go out and solicit old clothing. They bring this old clothing back into the center and they have them sew patches on the clothing. They are paid for' their labor in monopoly money. Mr. SHRIVER. You mean the game called monopoly? Mr. SCHERLE. They are paid in sort of script like monopoly money at the rate of $1.25 an hour. They then are allowed to purchase `back this clothing that they have repaired with the same type of money that they have been paid in. Now, I can't, for the life of me, see how this can raise the dignity of the individual to the extent that down in my general locality we have no area whatsoever whOre if they were taught to sew, and of course this is what it means ~more or less, it is to try to' raise their present economic position, where they can ever utilize this. ,But the most disgraceful thing is to pay these people for those services in play money. Now the other project we have going down there, the'se same women are sentout to pick out old hens at 8 cents apiece. Mr. SHElVER. Old what? Hens? Mr. Scm~r~. Hens. Mr. SHRIVER. Chickens? Mr. SCHERLE. Bight, at 8 cents apiece and they are brought in and they are taught to be chicken pickers. Now I have proof for this. If you ask for it, I have it. It is a so-called self-help. Mr. SHRIVER. Could you tell us where this is? Mr. SCHERLE. Yes. It is' in Red Oak, Iowa, Montgomery County. Mr.' SHRIVER. Yes. Mr. SoIIERr~E. What more do you want? Mr. SHRIVER. I thought you were going to say something more.' If you don't want to say anything more, I will say something. Mr.' SCHERLE. I' will go back to this~ We don't have any chicken pick- ing businesses in our locality.' It irritates me to think that this money is being spent to try to raise the level of these people and `all you are doing is humiliating these people to "the extent you are not `giving them anything. I think "both these `programs are completely out- rageous. This is one of the reasonsw hy' you' have fewer friends on this side of the aisle, as you perhaps' know. ` So far as I am concerned personally, I think this OEO program needs a real readjustment. Many other people throughout the United States agree with me. Mr. BERRY. If the Bed Oak program is that demeaning, the re- sponsibility for its low quality rests Upon the people in the local com- munity. Mr. SCHERLE. You know, this is a good question. I am glad you PAGENO="0225" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1063 brought that out. I have sat here completely confused as to how many programs you do have or where the buck stops. Mr. BERRY. We have as many programs as the bucks will permit, not that we think of, but, as I pointed out earlier, the programs that have been funded that have come from local communities re- questing the funding of programs which they assessed as being mean- ingful to the people in their area, over 15,000 different components. Mr. SCHERLE. I can tell you with the high literacy that we claim to have, and we do have, in the State of Iowa, this is demeaning to the intelligence of my State. Whether this is run on a local basis or not, I am not sure; but if you are trying to think of programs, you have two beauts here. Mr. BERRY. We did not think up that chickenpicking program that you are talking about. Mr. SOHERLE. It is a cottonpicking, chickenpicking program, if you tell me. Mr. GARDNER. Will you yield to me? I would like to get away from chickenpicking for a second. Did I understand you correctly to say, Mr. Shriver, that you need more funds today to be able to properly carry out your program? Mr. SHRIvER. In the authorization request we are asking for 25 percent more money than last year, that is correct. Mr. GARDNER. I wish to go back and refer to an article in the Los Angeles Times of December 26, 1966, in which Secretary of Labor Wirtz, referring to the anti-poverty programs, said that you were re- ceiving all the Government financing that the administrators could possibly use. "The povery program does not need more money," Wirtz said, "but more and better administrators." I don't want to get you involved with Mr. Wirtz. Mr SHRIVER No, I am delighted to be involved with him I am all the time. Mr. GARDNER. I realize that. Mr. SHRIVER. He was not opposing the President's budget request, there is no question about that I think he will be here on Wednesday or Thursday and testify in favor of the request for 25 percent more for this program. Second, he was not talking about our programs at all; he was talking about the local MDTA program run by the Labor De- partment, and not ours. Mr. GARDNER. They are not connected with OEO? Mr. SHRIVER. The only one connected with us is the Neighborhood Youth Corps. Mr. GARDNER. You think you could use 25 percent more in funding and be able to handle it without any problem ~ Mr. SHElVER. Yes, sir. Mr. GARDNER. The chart that you showed, which is a very excellent chart, what would be the cost of a program-I forget the name of it, in Lawndale----what would be the cost of a program like this in 1 year? Mr SHRrSTER We can get that for you, but my associate here says that a center like that costs approximately $1 million per annum. Mr. GARDNER. This would include building, facilities? Mr. SHRIVER. Everything. Mr. GARDNER. What percentage of that would be in salaries on a 1-year basis? 80-084-67-pt. 2-15 PAGENO="0226" 1064 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 19 67 Mr. SHRIVER. I don't know offhand, but a large Ipercentage of the work done would be salaried work by poor people. That is where you see that figure 22,540' poor people employed in these centers. That is a substantial portion. Mr. GARDNER. For my own information, could you take this one project and break it down for salaries? Mr. SmIlvEn. Yes. Mr. GARDNER. Thank you. (The information requested follows:) LAWNDALE URBAN PROORESS CENTER, ANNUAL COSTS Following are the approximate costs estimated necessary to operate the Lawn- dale Urban Progress Center, one of seven Urban Progress Centers of the Chicago Committee on Urban Opportunity, during this calendar year 1967. Estimated costs of operating all seven Centers during, calender year 1967 are $8,881,000. Total annual costs: Lawndale Urban Progress Center $1, 268, 714 (14.3 percent of $8,881,000) Personnel salaries $992, 208 (78.2 percent of total annual costs) Nonprofessional salaries $635, 352 (04.1 percent of total personnel costs) (50.1 percent of total annual costs) 141 positions filled by residents formerly unemployed or underemployed: 65 community representatives $293, 280 9 information attendants 40, 608 4 stenographers 18, 048 8 senior clerks 36, 096 3 senior typists 13, 536 2 typists 8, 184 50 program representatives 225, 000 By category of activity: Environmental and health services aids ` 0 Education service aids 4 Manpower services aids 4 Social welfare service aids 17 Recreation culture services aids 13 Center office services aids 6 50 professional positions $356, 856 Fringe benefits (4 percent of salaries) 39, 688 All other costs (consultants, travel, space costs, consumable supplies, equipment purchase or rental, and other costs) 236, 818 1 Five major categories of activity in each center Include the following types of programs: Environmental and health services: Housing relOcation, building inspection, code en- forcement, rodent control, tenant education, housekeeping and homemaking instruction, health education, lead poisoning prevention, family health centers, mental health and child evaluation (retarded children). Education services: Head Start child development; tutoring, NYC and adult remedial education, Upward bound club. Manpower services: Employment counselors and services, youth opportunity center (YOC), adult opportunity center (AOC), small business opportunity corp. (SBOC), school dropout counseling and guidance, CHIP (a pilot program Identifying under or unemployed persons and' providing follow-up counseling, education and placement). Social welfare services: Legal services and education, homemakers and housekeepers emergency services, consumer education, senior center, public assistance liaison, STREETS (sponsored by Boys' Club, YMCA, et al). Recreation and culture services: Cultural enrichment and exchange, arts and crafts, drama. PAGENO="0227" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1065 Chairman PERKINS. Go ahead, Mr. Shriver. Mr SHRI%ER Are there any other questions about this part of the program, the neighborhood.centers? Mr. BERRY. As a couple of examples of self-help, though that may be supplementary, I wanted to bring to the attention of the committee and I apologize if one of these examples happens to be in the district. of the chairman, but down in Big Sandy Community Action Agency the people wanted a neighborhood . center and there was no physical facility in which to house it. They, on their own initiative, conducted bake sales and handicraft sales to raise the money to purchase the land and the materials, and with their own hands developed a center which would house a program which we funded. In Raleigh County, W. Va., the people did the same thing. In Rosenwald, Ky., a building which was occupied by the Com- munity Action Agency for reasons which we do not know was dyna- mited. The local people raised the money to reconstruct a facility in which the program could be carried on. These are some examples that can be multiplied over and over again relating local community planning and desire to our willingness and ability to help them to carry on for themselves. Mr. DELLENBACK. Mr. Chairman, may I ask a question as to procedure? Chairman PERKINS. Yes. Mr. DELLENBACK. Do I understand that before we proceed to the educational phase which is to be next that we are waiting for Mr. Quie to return? Mr. SHRIVER. We would like to go after this is over to the migrant labor program, and then to the Indian program. Would you like us do that? Chairman PERKINS. Yes. Mr. SHRIVER. Fine. Thank you very much, Don. May I present to you, Mr. Chairman and members of the committee, Mr. Klores, who has been the director of our program for Indians and for migrants since we started our aotivities. We will start with the Indians. Mr. BERRY. Parenthetically, I would like to explain to the commit- tee the Indian programs are funded out of that portion of the money made available for 205 programs. They are funded as Community Action Agencies. The migrant programs are funded out of title III.. So they are separate programs.. They are. under, the operational and administrative direction of Mr. Kiores. Mr. KLORES. Thank you, Mr. Chairman. Unfortunately, I have to sit. here today and tell this committee.that the first Americans, the Ameri- can Indians, are today the poorest Americans. Seventy-five percent of all Indians on reservations are below the poverty level. Seventy-five percent of all Indian housing is inadequate, is not decent, is not safe, is not sanitary. These are the Americans that we have put on reserva- tions over a hundred years ago. Nearly 450,000 living in approxi- mately 25 States. When we started this program, we went out to see what was the real problem that these Indians faced, why with the expenditure of funds had not anything really been done to lift them out of poverty. I think PAGENO="0228" 1066 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 `we have here an example of where community action and self-help. was made a difference, because the American Indian was given every- think but did nothing for himself. His tribal council was an elected body that had no function. The Indian could not sell his own land, could not do. anything. He was considered in legal language incom- petent. Yet there are 450,000 living in the United States who do not consider themselves to be incompetent. When we asked them: What do you want? What do you see coming out of the poverty program? Their first reaction was one of distrust that we were coming to provide them with more services, we were going to tell them where .to go, and we were going to move them to Detroit, to Chicago, and move them off reservations, take t.heir lands and put them in big cities where they would be poor and without friends. We finally convinced them that this program was different, that this was their program to tell us what they were going to do and what they wanted to be done. `We had to do much convincing and many funny stories ensued; stories such as their going to superintendents and saying, "We have passed a resolution that we are in favor of Shriver and the poverty program. Get us the money." After turning down these types of reso- lutions and asking what they wanted, we found they wanted two things: they wanted the ability to tell us what kind of programs they thought made the most sense, and to run t.hem. They also wanted to deal directly with Washington a.nd not to be dealing with local offices and State offices and regional offices, and up a.nd down the line. We granted those two requests. It is the opinion of many people, both Indian and non-Indian, that a dent has been made and a start has been made by community action on the reservation. Previously we have community action programs on several Indian reservations that comprise 80 percent of all American Indians living on reservations. We have gotten them to do something that they have not been able to do themselves, we have gotten them to do many things. First, we have gotten them to put together a viable group which they call the community action agency, which provides local government to a reservation. Heretofore, if you wanted to locate an industrial facility on a reservation there was no one you could go to, because there was no administrative experience, there were no people who really had the background of what it takes to put together a going organization. The community action agency today can provide this. I met in my office about a month ago a gentleman from a large mis- sile company and he said- I understand the Federal Governmellt has all kinds of programs, `all kinds of ways of helping industry locate on Indian reservations. I said- That is true. He said- I can't go to the Department of Labor and I can't go to HEW. I can't go to BIA, I can't go all over Washington just to put a plant on the reservation. He said- I am a businessman. I have to put a plant there that is going to make money. That is how I get my promotions. PAGENO="0229" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1067 I said- I understand exactly what you mean. We don't want you to put a plant on the c'~eservation because of social conscience because w e recognize your problem but if you go to the community action agency director, a man paid out of OEO funds, on that reservation, he will have a list of all the benefits that any industry can get by going on a reservatiOn, all the various programs such as on-the-job training by the Department of Labor, that can benefit your industry. He said that was the first time in his history of dealing with the Midwestern Indians `that he ever had the ability to go to one person for all the information. I cite this as an example of what the community action agency can do. We have had other examples in which OEO as a new agency, with- out prior concern of ways of doing business, have been able to pull together other Federal agencies. rfhere is an interesting program of homebuilding. I mentioned be- fore that 75 percent of all houses on reservations are not decent, safe, or sanitary. Seventy-five percent of the people are poor. ,How do you put this together? We have had programs on reservations in which OEO funded the administrative component, funded a few people to bring the program together. The Department of Labor provided man- power funds to train people into being carpenters, homebuilders, brick masons. These funds were used to provide expert training by union craftsmen. The Department of Housing and Urban Development, under their housing and assistance agency, provided the money for brick and mortar and lumber to put these buildings u~p. We have the Bureau of Indian Affairs providing heavy equipment. We have the Department of Health, Education, and Welf are, Public Health Serv- ice, providing sewerage. When it is all finished, we have Indians who build houses, Indians who live in those houses, and unions who give a job ticket or apprenticeship or master's license to the Indian who has finished a house, so that he can get out and get a job. These are the types of programs that we find to be, as someone said some years ago, more bang for the buck than we have seen,because they can pull together various facets, they can bring industry on reserva- tions, and they can help the Indians. These are some of the programs. I would like to conclude the Indian portion by reading a very short statement out of the testimony of Mr. Wendell China, who was presi- dent of the National Congress of American Indians and president of the Mescalero Apache Tribe in New Mexico. This statement was made on April 4 before the' Clark subcommittee investigating the war on poverty. Community action programs have given the Indian tribes a tool with which they can begin to identify, attack and solve their own problems in their own way. They have provided a training ground for future Indian executives, work on problem areas not being adequately met by others. Their ability to communi- cate with Washington has made action timely and effective. They have acquired flexibility to meet many of their problems which others have not been able to solve. *There are many other statements. There are so many that I would be embarrassed to read then-i all. I would hope that this committee could invite some Indians during their public participation. Chairman PERKINS. Let me take this opportunity to compliment you on your statement and the great work that you have done on behalf PAGENO="0230" 1068 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 of the Indians in the community action program. I am most impressed with your testimony. We have tried to give increased educational op- portunities for Indian children in the Elementary and Secondary Edu- cation Act and I believe we are meeting with considerable success. The fact is that you have reached so many and you have operated in an ef- fective but different manner from the way governmental agencies normally operate in trying to reach the Indian, if I understood you correctly. How much money have you expended on the Indian programs in the last fiscal year? Mr. KLORES. In the past fiscal year, Mr. Chairman, we have spent $11i/2 million in what is known as local initiative or versatile funds, and $~~/2 million in Headstart, for a total of $19 million. Chairman PERKINS. A total of $19 million? Did you work on and off reservations everywhere? Mr. IKILoi~s. Just on the reservation. Chairman PERKINS. On the reservation only? Mr. KLonI~s. Only. Chairman PERKINS. How many homes were you able to build? Mr. KLORES. We; constructed in this fiscal year 90 homes with the one program I mentioned. In addition, on the Navajo Reservation we have brought up to the decent, safe, and sanitary level 1,000 existing homes. Chairman PERKINS. How much money did it take to renovate those existing homes, and from whom did you get those funds? Mr. 1kLORES. Those funds were local-initiative funds out of the com- munity action program title hA. That program is tied into a training program, so that the Indians may also learn a skill, a skill in the handling of tools. Chairman PERKINS. Did you work with HTJD or under some other program? Mr. KLORES. We worked with them on the construction of the new homes-the 60 that I mentioned-and we are moving forward under a subcommittee set up under the Economic Opportunity Council to expand this program to other reservations. OEO was prepa.red to move on to every reservation with this pro- gram. What is holding us up are funds from other agencies. Chairman PERKINS. You constructed new homes and renovated sev- eral hundred? Mr. KLORES. That is right, Mr. Chairman. Chairman PERKINS. `What is your program for the next fiscal year? Mr. KLORES. In the next fiscal year we. are asking for $25 million. We expect to reach more Indians. We would like to go to the 100- percent mark. The problem is like in so many programs the last few are always the hardest because they are strting out. An example is in California where they have maybe 10, 20, or 30 Indians living on what is called a rancherio. Chairman PERKINS. What other Government agencies do you ex- pect to assist you in connection with your housing program? Mr. KLoI~s. We expect the Department of Housing and Urban Development. . . Chairman PERKINS. For funding? PAGENO="0231" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1069 Mr. KLoms. We expect them to join us in what we call a joint pro- gram, not to give us money. They have not given us any of this money. They provide this money to the tribe and we set up the program. We have our meeting here in Washington. We make our announcements and grants at the same time so that the tribe can get started. Chairman PERKINS. They furnish water and sanitation and things of ~that sort? Mr. KLORES. The Department of HEW under Public Health pro- vides the sanitation on all Federal reservations, and the Bureau of Indian Affairs provides the heavy equipment which they have on the spot, and land. Chairman PERKINS. I am hoping that in some of the cOmmunity action programs the directors in other parts of the country will take a leaf out of your book. Several years ago we had some programs where persons on the public assistance were able to get a loan or small grant from the Farmers Home Administration and do some renovating of the homes and in providing basic modern conveniences in the homes of some of the mining communities, but we were unable to get that program fully funded and have been unable to get it funded at all for the past 3 or 4 years. Your program is most interesting. It is a great credit to do something the way you have. Mr. KLoro~s. Thank you, Mr. Chairman. Chairman PERKINS. Mr. Scherle. Mr. SOHERLE. I don't have any questions, but I certainly hope that everybody in this room had the opportunity to listen to your descrip- tion of the plight of the American Indian here in America because this is a perfect example of what happens to people when they rely solely on the Federal Government. Chairman PERKINS. Mrs. Green? Mrs. GREEN. No, Mr. Chairman. Chairman PERKINS. Mr. Dellenback? Mr. DELLENBACK. If I may, Mr. Chairman. Again the type of ques- tion I have asked before: How many more establishments do you feel that you need to reach all of the Indian areas that you feel are in need of this type of help? Mr. KLORES. I am sorry. How many more establishments? Mr. DELLENBACK. Call them what you will, programs on individual reservations. Mr. KLORES. We would have to go to about 150 reservations. I would say that in order to cover every reservation we would probably have to approach $50 million. Mr. DELLENBACK. $50 million annually? Mr. KLORES. That is correct. Mr. DELLENBACK. Now, you will be in about half of that at this level if you are funded where you would like to be this year, $25 million, and thinking in terms of that and also thinking in terms of what is in existence at the present time, how do you really measure the effective- ness of what you have done in reaching all of those who are in need of help? Are the programs which you have in existence now effective, and if you answer yes, what are the criteria by which you measure that effectiveness? Mr. Ki~oi~s. The answer is "Yes," and the criteria we use are what h'~s happened now that was not here before we started We think that PAGENO="0232" 1070 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 an agency on the reservation that can go beyond Government pro- grams and help itself is an accomplishment. We are starting with a group of people that have been outside the mainstream of American life. They don't want tO move. They don't want to be moved. They want their community to be as good as your community and my community. Now they are doing that. The exam- ples are numerous. An example in Arizona. The Pima Indians who decided that they were too close to Phoenix not to participate in the growth of the Great- er Phoenix area and they just sat down and drew up a plan which they called by an Indian name. It means do or die, and their plan was to have 1,000 new jobs in 2 years. They now have created 500 jobs aftei~ lyear. Mr. DELLENBAGK. So that they are on schedule. Mr. KLORES. Yes. They wanted 170 new homes. They have 85. They are on schedule again. They have brought in electronic concerns. They have brought in clothing manufacturing. As you can see, they have brought in industry that requires people with patience, people with dexterity, who are willing to work long hours at sedentary work. Mr. DELLENBACK. You realize that underlying really our analyses of our working with you lies the question of how do you make the dollars that are limited do the most, optimumly, hopefully, of everything that we want to have done. Now in these 500 new jobs, for example, have these people become self-supporting? Mr. KLORES. Yes. Mr. DELLENBACK. These 500 jobs have made them self-supporting so that we have 500 families or at least individuals who were not self- supporting before who have been made self-supporting by this pro- gram? Mr. KL0RES. That is correct. Mr. DELLENBACK. And these 85 homes are not just minimal homes, they are adequate homes ? They are all that we might expect to have? Mr. KLORES. That is correct. Mr. DELLENBACK. When we talk in terms of a $50 million budget, are you talking about a $50 million budget that will make all of the Indians self-supporting? Mr. KL0RES. No, when I talk about $50 million, I mean reaching every reservation and establishing a community action agency and some service. The first thing you have to have is an organization, to do anything. That is the prime objective. Then you have to have this organization provide some service or the people look upon it as a do-nothing organ- ization, and that is what I mean by $50 million. There is a multiplier effect that anybody interested in economy should be concerned with, and I, for one, am; and that is that the Federal Government spends through the Bureau of Indian Affairs approximately $250 million a year to take care of Federal Indian reservations. It is our hope that some day in the future these Indians will be so self-sufficient that they will say, "We don't need your help. We want to do it ourselves." Mr. DELLENBACK. Are we able for many of the programs that CAP has introduced on many of the reservations so far to show any sav- ings in this $250 million Bureau of Indian Affairs expenditure level? PAGENO="0233" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1071 Mr. KLORES. I would say no, you couldn't, because the Bureau of Indian Affairs provide services such as schools. They provide services such as a police force and everything that.a community provides itself. First, you have to make the Indians self-sufficient so that they can tax themselves to provide these services. Mr. DELLENBACK. Do you really see that as a goal out there? Do I read you correctly ~ Mr. KLORES. I see that as a distant goal, yes, sir. Mr. DELLENBACK. Where, if we stay with the $250 million annual expenditure by the Bureau, that could be eliminated and we would make the Indians so self-sufficient that out of their own tax revenues they would take care of their schools, their police and fire, and so on? Mr. KLORES. Yes, sir. That is what they want. They don't want to be moved, as some programs have tried to, into Chicago or Detroit or in any big city. They want to stay there and to move industry and everything there that makes that a community. Mr. DELLENBAcK. But so far you are not able to put a dollar value in the way of reduction of these other Bureau expenditures? Mr. KLORES. No. I would say that you have to reach a point where they can start to tax themselves before you can start to move away. You can't take a police force away until they can provide a police force. Chairman PERKINS. Mr. Pucinski. Mr. PUCINSKI. Mr. Shriver, have you had an opportunity to look over H.R. 10682, the opportunity crusade? Mr. SERIVER. We have glanced at it, yes, sir. I wouldn't say that I made an exhaustive analysis of it. Mr. PUCINSKI. Would you or any member of your staff be in a posi- tion to tell us whether or not the. programs that they are carrying on now in these Indian reservations would be possible under the provi sions of the proposed substitute? Mr. SHRIVER. Mr. Berry. Mr. BERRY. As I have read it, it. does not make the provision that is presently in the act or charge the community action program with the responsibility of carrying on an Indian program. Mr. PUcINsKI. In your own bill, H.R. 8411, at page 39, part A, the community action agency's programs in part C, you say that the com- munity in which the community action is established and carry on a community `iction may be'i county, city, multicounty area, `md so on What is the difference in this proposed legislation from existing l'iw dealing with these Indian reservations? Mr. BERRY. No difference except that it highlighted the language and made it very clear what we have been doing `is an administratis e procedure Mr 1~oRRs If I may, Congressman, that phrase "Indian reserv'm tion" was always in our community action program guideline. It was not in the legislation and the attempt is to make sure that the Congress realizes exactly what we are doing. Mr PUCINSKI That is an interesting observation It v~ asn t in the legislation. How did it get in the guidelines.? Mr. KL0RES. The legislation. stated that there would be a community action program, and we h'id to define wh'mt `i community w'ms in our regulation. PAGENO="0234" 1072 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. PUCINsKI. Wait a minute. Do I understand that you went ahead and set up certain programs and now you are coming to Congress and asking us to write into the books, legislation that will help you or make it possible for you to run the programs? Mr. KLOIIES. No, sir. Mr. PucINsKI. Clear the record quickly. Mr. Ki~ou~s. It is my understanding of the legislative process that Congress legislates in broad terms. Mr. PUOINSKI. Too broad. Mr. KLou~s. And within these terms the agency must set up regula- tions. When Congress said you will carry out a community action program, and I don't have the legislation in front of me, it was up to us to define what a community was; was it a city, a State, a county, or a multicounty, or a Federal Indian reservation; and that is where the regulations came in. Back in 1964 we sat down and said it could be a city, it could be a multicounty unit; it could be a county; and so on. Mr. PUCINSKI. Forgive my failure to understand this, but in sec- tion 210 of the title that we are now discussing, regarding Indian reservations, it says: The director shall encourage communities to establish public or private non- profit agencies to be known as Community Action Agencies. The Community Action Agency shall be responsible for and be capable of planning, coordinating, evaluating and administering a program known as a Community Action Pro- gram. The Community Action Program is a community action based and operated program. And so on. How does, this language in this bill before us now, and applied to Indian reservations as part C of this, differ from what is in the law now, because I am trying to understand what is the change that you are proposing in H.R. 8311? Mr. SHRIVEn. I think you had probably better wait for an analysis of that until the general counsel returns, but substantively there will be no difference in the operation so far as the Indian programs are concerned if the new bill is passed than has been the actual circum- stance under the old bill. Mr. PUCINsKI. Do I understand then-and again I hope that we can use this testimony for that purpose to clear up any misunder- standing that may be here-that under this provision if there is now a community action board operating on an Indian reservation and doing a job, that under the proposed change to section 210, conceiv- ably a private not-for-profit agency could substitute for this board? Mr. SHElVER. No If there is a community action agency in existence now it has to be on a reservation, it has to be either a public or a pri- vate not-for-profit agency because that language was in the statute to begin with. Mr. PUGINSKI. That is in the statute now? Mr. SHElVER. That was in the statute from the very beginning. Therefore, any existing community action agency on an Indian reser- vation has to be one or the other. It has to have already received ap- proval, and therefore would not be subject to change unless there was some great inefficiency or ineffectiveness in the program which urged. PAGENO="0235" ECONOMIC OPPORTUNiTY ACT AMENDMENTS OF 1967 1073 or suggested it ought to be changed and we don't have any like that that I know of on the reservations now. Mr. PuCINSKI. Does the present legislation, the bill on the books now, provide that the director shall encourage communities to estab- lish private not-for-profit agencies to be known as community action agencies? Mr. SHRIVER. The language which you read at the beginning is the language that is in the bill now, public or private not for profit; yes. Mr. PUCINSKI. Do we have any private not-for-profit agencies run- ning community action programs anywhere in this country? Mr. SHRIVER. Yes, we have a large number. Mr. PUCINSKI. What has been your experience with them? Mr. SHRIVER. Well, it has been good and bad with them just as it has been good and bad with the others. The actual format is not the proof that one is going to be successful or unsuccessful. Right now for ex- ample the city of Philadelphia is changing from a quasi-public or half public operation to a private not-for-profit one. Mr. PUcTNSKI. On these Indian reservations, have they been public or private? Mr. KLORES. The vast majority have been public. They have been the tribal council themselves. We could count the tribal councils on the fingers of one hand that have decided that they would prefer another group to handle it. Mr. PUCINSKI. I was very much impressed with the testimony of your agency in this field, and I agree with the previous statement by members that certainly these people need a great deal of help. I couldn't help but wonder as you recited all of your achievements and accomplishments, what has the Department of the Interior been doing about this problem all this time? Mr. KLoni~s. I am afraid I prefer that they answer those questions. I don't feel competent to go through all the things that they have done. Mr. PUCINSKI. Let's rephrase it. Have they been doing anything? Mr. KLORES. Yes, they have. They have been providing services such as schools, police protection. They have lost the program for hos- pitals. That is now under Public Health Service. They provide sewer- age, roads, the management of Indian lands, wills, deeds, everything that your community and mine provides through its local government. Mr. PuCIN5KI. Do they work closely with your agency in coordinat- ing these activities? Mr. KLORES. We work with them, but theirs is such a mammoth program that they don't ask us where shall they put a school system. Yet we will take programs and try to dovetail them in some that they are providing. We will not duplicate their programs. There has been cooperation and that is one of the advantages. The Indians always said that if you wanted anything done, you had to go to Washington. This is true. This is where the decisions are made. We, being here,' can call up the Bureau of Indian Affairs and say, "We would like' to use a school on a particular reservation. Can you get us the approval ?" And we get the approval very quickly, usually on the phone, and then a telegram goes down telling the superintendent we will be using the school It is much faster than having the Indian leader go to the agency superintendent who then goes to his area office and so on. Mr. PuCINsKI. Thank you very much. PAGENO="0236" 1074 ECONOMIC OPPORTTJNITY ACT AMENDMENTS OF 1967 Mr. SHElVER. I think one of the things is that when people talk about the Indian and community action, it shouldn't be forgotten that the Indians have treaty relations with the U.S. Government. They are not States. They are independent nations, as they call themselves, within this Nation. The Navajo Reservation, for example, is bigger than West Virginia and goes across three States so that when you are dealing with the Navajos, you are dealing with a semi-independent group of people living within the territories of States. Mr. PUCINSKI. Why don't you then put all these appropriations in a foreign aid program? Mr. SHRIVER. That is not so funny, really, as it sounds because the conditions on Indian reservations are very similar to conditions that one would run into with the Indians in Latin America, in Peru, or other places. In fact, many people who have served in Latin America work- ing with Indians are now up here working with American Indians, and vice versa. The Peace Corps is recruiting Indians from this Nation to work with Indians in South America. The Navajo language is very close to the language which the Indians in the mountains of Peru speak. Mr. PUCINSKI. We ought to put this in foreign aid so that we will have an easier time to get this legislation passed. Mr. SHElVER. Do you think you will? Chairman PERKINS. Mr. Dellenback. Mr. DELLENBACK. I certainly don't wish to take the time of the gen- tleman from North Carolina, and I don't want to engage in a debate on the differences between the opportunity crusade and present OEO, but in view of what the gentleman from Illinois said and in view of the absence of Mr. Quie and Mr. Goodell, I would like to ask this question: You have indicated that you read the opportunity crusade and see i~o language dealing with the Indians, is this correct? Mr. BERRY. In my first reading. Mr. DELLENBACK. The testimony that has just been given us has indicated that, shy the amendments that are proposed in this legisla- tion before us now, do you find any language relative to Indians? Mr~ BERRY. Iii the current bill? Mr. DELLENBACK. That is correct. Mr. BERRY. Not the bill, but the law or the proposed amendments. Mr. DELLENBACK. In the law that is on the books at the present time, not the proposed amendments? Mr. BERRY. The language in the existing law did not describe a community action agency. It merely defined the areas in which a com- munity action program could be developed. Mr. DELLENBACK. Right. Yet under the present language you are able to so define community action programs and commimities that you are able to go onto reservations without express authority to go onto reservations except t.hat which was implied in dea.ling with com- munities, is this correct? Mr. BERRY. That is correct. Mr. DELLENBACK. Does the opportunity crusade deal in terms of community action programs? Mr. BERRY. It dea1s~ it defines, as I recall the community action pro- grams, in rural and urban areas. PAGENO="0237" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1075 Mr. DELLENBACK. Do you feel that under the definition that.appears in the opportunity crusade, it would be necessary that you terminate your programs on reservations or that whoever was in charge of com- munity action programs would find it necessary to terminate these programs? Mr. BERRY. I think we could probably bring it within rural. Mr. DELLENBACK. You are not implying then that under the op- portunity crusade there would not be just as much opportunity to deal with these programs on reservations as is permissible under the present law? Mr. BERRY. I think, Mr. Chairman, my response to. that is that the element injected in the crusade bill providing for State plans for the development of community action programs i%ithin a St.ate effectively would create a means of obstructing and carrying on programs with Indian reservations because in many States the State takes an ad- versary position vis-a-vis the reservation within their territorial limits. Mr. DELLENBACK. You then feel that moving forward under the op- portunity crusade as written in the bill which the committee is study- ing, would terminate these. programs? Mr. BERRY. It would constitute a deterrent and we would probably have to seek further clarification of congressional intent. Mr. DELLENBACK. Fine. If there is such a gap that is present, we appreciate your calling this to. Our attention in this regard, ~1r. Pucin- ski, because this certainly was not my understanding of what Mr. Quie and Mr. Goodell had intended. Mr. PUCINSKI. I think as my colleague proceeds in these hearings and continues . to compare the opportunity crusade with the existing law, he will find that, we are going to have to have more and more amendments to the opportunity crusade. When we are all through,. we will find that the opportunity crusade is similar to what we are doing now. Mr. DELLENBACK. Mr. Chairman, again let me repeat what I said in the beginning. It is my understanding that the purpose of these hearings is to listen to the witnesses and not engage in intracommittee discussion. If what we are doing is engaging in intracommitte de- bate, let's understand the ground rules and go. forward on that basis. Chairman PERKINS. The gentleman from North Carolina. Mr. PUCINSKI. Would the chairman yield on that statement? We have gone this route before, and I think my colleague ought to know that the only reason I asked the questions about the op- portunity crusade is that I don't want, when we go to the floor, someone to say that we have never discussed the opportunity crusade. I think that we will make great. progress here if as we go along we will ask questions about H.R. 8311 and H.R.. 10682, and I reserve my right to continue doing that. I don't consider this any intracom- mittee discussion. I think it is a perfectly legitimate role of prob- ing to see where are the best formulas for making this program work. Mr. DELLENBACK. Let the record be clear that counsel has just in- formed me that there is no State plan' except for the bonus section involved in the community action program, under the opportunity crusade, and I think we ought to check this to be sure that the present authority, which is evidently that under which the community action PAGENO="0238" 1076 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 has developed a very desirable movement to go forward on Indian reservations, is possible under the opportunity crusade to the same degree that is present at the present time. Chairman PERKINS. The gentleman from North Carolina. Mr. GARDNER. Mr. Kiores, could you give us any idea of the total amount of money that is being funded from various Government agencies including OEO on Indian projects now? I total about $269 million between the Bureau of Indian Affairs and OEO. Mr. KLORES. I am sorry. I couldn't give the full amount. I could provide it for the record. I would have to contact the other agencies. The other big spenders are the Public Health Service, which pro- vides all~ the hospital and medical facilities on reservations, and In- dians also participate in all other Federal programs to some degree, MDTA, Neighborhood Youth Corps, and so on. (The information follows:) The Bureau of Indian Affairs estimates that $400 million is being spent on Indian projects by various Government agencies including OEO. Mr. GARDNER. Can I refer to a survey or study made by the Human Sciences Research Institute, a corporation, for OEO concerning In- dian projects? Could I have a copy of this report? Is it available? Mr. KLORES. Yes; it is. I think that was submitted already, wasn't it, the HSR report on Indians? Mr. GARDNER. I will ask you the same question I asked Mr. Berry previously. The report was critical in certain areas of the work that had been done in the reservation. Have you taken this report and now tried to pinpoint these areas to improve the situation m order that we may get the maximum amount for the funds spent? * Mr. KLORES. We considered that report and tried to implement those that we thought were worth while. That report went to great detail as you know about what the Indians thought they might get and how great their disappointments were when they found that OEO would not go along with just anything, that we protected the taxpayers' money and felt that there were certain programs that would not get them out of poverty. So in those areas where HSR felt that the Indians' spirit had been dampened somewhat, we looked to our bosses sitting here and said that the legislation and good coip- mon business sense means that perhaps we have to dampen a few spirits, but we have tried to implement those areas that we agreed with. Mr. GARDNER. I wonder if you might go back and read it for me, be- cause I think I was out of the room when you went into it. What is being done to try to provide long-term job opportunities for the Indians on the reservation. And again, I go back to the report which was most critical in this area, that nothing had been done to provide an economic base to reduce the poverty by putting these people to work. Mr. KLORES. Yes; that was covered. I will be glad to cover it again for you. The community action agency has for the first time provided a staff of trained administrators who spend full time trying to bring industry into reservations, who try and pull together programs; and stop me if you have heard this example of a missile manufacturer that came to see me and wanted to locate a fabricating facility on a PAGENO="0239" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1077 reservation to employ 250 people full time, and. when you are talking about 75 percent unemployment, 250 full-time people is a goodly number. Up until the poverty program, he had to go to every Federal agency in town to find out who would provide the job training because he was a businessman and he was not going to move onto that reserva- tion for any social conscience. He was going to move onto that reserva- tion because he could show a nice profit to his stockholders. And for the first time he could go to a CAP director, and this CAP director would tell him exactly what he could get, how much he could get from EPA, and MDTA; that EPA would build the facility, that MDTA would provide the job training. Mr. GARDNER. You are now coordinating this? Mr. KLORES. Through a community action agency; yes, sir. Mr. GARDNER. And you have found it to be successful? Mr. KLoiws. Yes, sir. Mr. GARDNER. I yield back the floor to my colleague. Chairman PERKINS. Mr. Steiger. Mr. STEIGER. Thank you, Mr. Chairman. May I first inquire from the Chair, will we go from Indians into migrants for the next presentation? Chairman PERKINS. That is the plan. Mr. STEIGER. I wonder, Mr. Klores, if you would be willing to give the committee any idea, first of all, as to whether you have inspected the Fond du Lac community action program in Minnesota and what the problems are. From what I know about it, there have been some problems, and I wonder if you can give the committee any information on what the problems are and what action the agency has taken in over- coming them. Mr. KLORES. As soon as we heard that there were certain problems with the executive director, the board, and the people working for the agency, not seeing eye to eye, with charges being leveled and so forth. We hear this by phone and this is what Mr. Shriver mentioned before, that when you talk about a community action agency getting away with something, it is virtually nonexistent. Every eye in the commu- nity is on it. People on the board all have different feelings and the phones in my office started ringing from all sides. Everybody has ac- cusing everybody else, and the first thing I did was to pick up the phone and talk to our inspection division, and they had a man there. Essentially what the problem was was a bitter disagreement of the board and the executive director. It seems the board was split with some people on the board who are from off the reservation who were non-Indians, and the executive director wanted to do things one way and they wanted to do it another way. The tribal chairman was a strong-willed man, and what we have done is to insist that the board change itself, that the board put. new people on, that they work out the problems, and we are watching it. We are watching it to see whether the new board still representa- tive of the groups in the areas to be served will be running the pro- gram properly. . .. Mr. STEIGER. Do you have a report from your investigator on what was found? . PAGENO="0240" 1078 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. KL0REs. We have an inspection report; yes. Mr. STEIGER. Can that be made available? Mr. SHElvER. Those are tile only reports where, since they do con- tam a lot of confidential information and also sometimes, frequently, just gossip and tile kmd of a quibbling material that you pick up in a fast evaluation, we feel that. those are tile kinds that we should not make public because they involve personalities and reputations, and so on. They are used usually only for our own personnel or management guidance. All the other reports of tile agency are available. Mr. STEIGER. Basically what. you are saying is that you cannot make it available? Mr. SHRIVER. Yes. Excuse me. I thought I said t.hat. That is cor- rect. Those reports in this agency and in other executive branch agen- cies they call inspection reports, and they are not generally availa~ble anywhere even to other branches in tile executive branch. Mr. STEIGER. Does this follow Ramsey Clark's new memorandum on the freedom of information? Mr. SHRIVER. That is correct. Mr. STEIGER. It dOes? Mr. SHElVER. I think you will find this agency has greater freedom of information than any agency. Mr. STEIGER. As I understand the situation in that area of Minnesota. isn't one of the problems that there are fewer poor Indians than there are non-Indians? Mr. KLORES. I think that. what you are saying is that there may be fewer poor Indians on tile reservation than non-Indians. Mr. STEIGER. Correct. Mr. KLORES. That. may be true. However, I should mention at this time that when we fund a Federal Indian reservation, we fund a piece of geography and all tile poor on that reservation. be they Indian, Caucasian, Negro, Mexican American, are serve.d and must be rep- resented. Mr. STEIGER. Tha.t was my next question. You do, then, serve not. only the Indians but the non-Indians? Mr. KLORES. That is correct, absolutely. Mr. STEIGER. Do you use the services or have you used tile services of the YMCA in any of the Indian reservations on which you are now operating? Mr. KLORES. We don't use any services. WTe fund the Community Ac- tion Agency, and they may hire or delegate other groups to perform for t.hat. I don't know of any Indian reservation that has gone and delegated their program to a YMCA or used the YMCA. Mr. SHElVER. The Menominees were using them, but then they stopped being a reservation. Weren't they using t.he Y when they were a reservation? Mr. KLol~s. I don't know. Mr. STErnER. Did you give the number of reservations which you are now serving as compared to the figure on the board of 105 that you propose to serve in fiscal 1968? Mr. KLORES. Yes, we are serving Indians on about 100 reservations now. PAGENO="0241" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1079 Mr. STEIGER. You are serving Indians on 100 reservations now with a budget of $19 million, and you propose to serve 105 reservations with a budget of $25 million. Mr. KLOREs. That is right. One of the problems, Mr. Congressman, in funding any group, and I am sure you have heard this in other pro- grams, is that you have to start tile program. On many of these reser- vations they have jut had what we call a program development grant this fiscal year. That means they have been able to hire the. staff di- rector and perhaps a part-time secretary to start the program moving. In addition, when you start going toward the reservations we haven't reached, your cost is much higher. You reach the reservations which are accesible first and this is natural in any program. Then you reach those that are in the outlands, those that have few in num- ber. The cost is more to reach a distant reservation as you go down the program line. Mr. SCHERLE. Mr. Chairman, may I ask one question? Chairman PERKINS. Yes. I am going to recognize Mr. Meeds. 1-Je has been over there. Mr. MEEDS. I will yield to tile gentleman from Iowa for a question. Mr. SCHERLE. I have always had a great appreciation for the crafts- manship by the Hopi, the Navajo and the Zuni Indians, in fact, particularly in their silverwork and. turquoise. Can. you tell me why the OEO is giving a gran't to the Zuni. Indians and mechanizing their craftsmanship that has been so valuable through tile years which will ruin tile very .thing that has. made them pretty famous? Mr. KLORES. I will be glad to. You and I share the same apprecia- tion for Zuni craftsmanship. I have spent some time on tile reserva- tion and the only problem I have, on it is that my wife insists that I buy her jewelry when I go there, so I don't go very often, but we gave a grant of $250,000 to. the Zunis to increase their ability to make hand- made jewelry. There is no mechanization involved now that was not involved in the past. The only mechanization involved is tile use of what you call a buffing tool t.hat they have always used. It is nothing more than a drill with a buffing head on it to polish stone. These people asked for the program. The Zunis wanted the pro- gram because the very fact that they are Zunis doesn't make them an expert silversmith any more than someone who is Italian is an opera singer. Mr. SCHERLE. Your wife will disagree with you. Mr. KLORES. I don't think she will. She had better not. They wanted this program so that they could . take . their~ ordinary craftsmen who don't get very much for their jewelry when they go into town to make them expert craftsmen and Zunis are employing their own people to teach those in the journeyman level to become experts so that they can receive the same price for their jewelry because it will be expert jewelry. It will be a perfect product when it is finished. An awful lot of it as the Navajos call it junk jewelry. Mr. SOHERLE. You mean the Navajos call the Zunis' junk jewelry? Mr. KLORES. Exactly. . Mr. SCHERLE. That is not fair competition. What did you say the grant amounted to? Mr. KLORES. $250,000. 8O-084---67-pt 2-16 PAGENO="0242" 1080 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. ScIiEiu~E. That would buy a lot of buffers, wouldn't it? Mr. 1cLoni~s. It provides training an expert craftsman and also a marketing outlet so that Zunis people can set up a market outlet to market their jewelry. Mr. SCHERLE. These three craftsmen are all different, the Navajos, Hopis, and Zunis? Mr. KLORES. That is correct. Mr. SCHERLE. Are you going to provide the same grant for the Navaj os and Hopis to make this thing entirely competitive if they so desire? Mr. KLORES. The Hopis and Navajos have not asked for that and I don't believe they are competitive. They sell in different areas. Mr. MEEDS. Are you going to ask the Navajos and the other tribe to secure a grant to do that? Mr. KLORES. Congressman, I have found that the Moccasin Grape- vine means that I don't have to communicate to anyone, that as soon as a grant is funded, I have people on the telephone asking what about theirs. Mr. MEEDS. In other words, you are going to wait and let them initiate the type of program they want initiated? Mr. KLORES. That is right. We publish a list of our grants. It is in the newspapers and a part of the local initiative of community action is that they should decide themselves. ~Mr. MEnDS. That gets us into the question of how these decisions are made and what kind of program is going to be instituted on an Indian reservation. Do you tell them what they should do? Mr. KLORES. Absolutely not. The tribal council meets or the~Com- munity Action Agency, and tries to outline what the problems are on the particular reservation. Mr. MEEDS. Who composes this? How is this community action agency or this tribal council composed? Mr. KLORES. If the tribal council runs the program, the members of the tribal council are democratically elected. Mr. MEEDS. By the people they represent? Mr. KLORES. By the Indians themselves. Mr. MEEDS. Are there Federal employees on that board? Mr. Ki~onns No, there are not. At times they may ask the Bureau of Indian Affairs man to sit on the board as an ex officio member, but the employees of that board are not Federal officials. Mr. MEEDS. They are 994~~~ local people, are they not? Mr. KLORES. I would say 100 percent. Mr. MEEDS. And of the people who run the Indian programs, where a community action program is running, if a local comnnrnity action agency is running the program on the Indian reservation, it is also composed of local people, is it not? Mr. KLORES. That is right. Mr. MEEDS. So that these decisions are made at the local level? Mr. KLORES. Yes. Mr. MEEDS. What, Mr. Klores, is the difference-and this is a very broad, general question. You can certainly take a lot of latitude in answering it. What is the broad general difference between the Office of Economic Opportunity programs for Indians or with Indians and the traditional Federal programs for and with Indians? PAGENO="0243" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1081 I notice a big difference and I want to find out if your observations are the same as mine. Mr. KLORES. I think the main difference is that we go and fund a tribal council directly. We started out with faith in the Indian people that they can manage their funds as well as any American people could manage their funds, and I think our faith has proven justifiable. \Ve fund the tribe directly. Y~Te don't put Federal officials on a reser- vation to do this for Indians. They do it themselves. Also, we have set up a group here in Washington to handle the Indian program. We have not delegated it to our regional offices. That is another difference. We have staffed this group with people who have lived on reservations. The whole Indian division here at OEO is com- prised of either Indians or people who have spent more than 10 years living on reservations. I might add that I have several requests from other Federal agencies who are trying to emulate this new approach and are setting up this same type of centralized Indian program here in Washington. Mr. MEED5. I have six Indian reservations in my congressional dis- trict, four of which have community action programs. For your in- formation, and for the information of this committee and all the people in this room, this message is getting through to the Indians in my area, believe me. They like this program, `and they like it because it is their program and they are running it, and they are free from historical paternalism, and I think that is precisely what this pro- gram is. These are programs that they are initiating, programs that they are carrying out with their people, programs that they are making work, and they are also taking the blame for it if they fail. I have heard nothing but praise and acclaim for the OEO. On the Indian reservations in my district, the big reason for it is because they have been allowed to do these things themselves and, as you said, you have started from the premise that they can do them, instead of the necessity of our reaching down from Washington, D.C., and telling them what to do. These people are getting that message and they are the better for it. It seems to me that we have sat here in Washington, D.C., and bemoaned the Indian problem for years and years and years and everyone agrees that the Federal Government ought not to be telling the Indians what to do, but ought to be letting them do things on their own to free themselves of this paternalism, and yet this is the first program that has come down the pike that has really done that. I want to congratulate you. I think you have done a good job. Mr. KLORES. Thank you, Mr. Meeds. Mr. MEEDS. Thank you, Mr. Chairman. Chairman PERKINS. Are there any further questions? Mr. DELLENBACK. I was just going to ask whether the fact that housing was in larger letters than health on that chart meant that you pay more attention to housing than health? Mr. SHRIVER. No; that was a matter of space. Chairman PERKINS. Go ahead, Sargent Shriver. Mr. SHRIVER. Yes. Mr. Kiores is just shifting his books. Mr. KLORES. Ever since we started this migrant program people have asked me what are some good books to read about what is the PAGENO="0244" 1082 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 problem with migrants and what they can learn about them, and I always tell them to read Steinbeck's Grapes of Wrath, and they say, "That was written in the thirties," and I say, "Fine, because nothing has changed." I think that is true. Nothing has changed. The United States spent more on migratory birds than on migratory workers before the OEO Act. The average migrant family earns about $100 a year and when you do surveys to find what is happening and who is being employed you find that 364,000 children under 13 are working in the fields doing stoop labor. You find that children under 9 are doing stoop labor. You find that people are living in conditions which it is hard to believe in 1967 in this country, and you can look at all the pictures that you want to look at and yet until you go out to one of these camps you don't appreciate it because you can't smell them and you can't feel the flies and that is the big difference. I don't see any reason to introduce this to the record, but I have coupons which people are paid to use in the company stores. They are not paid in cash. They are paid in script, and this is prevalent in many parts of our country. I am not here to tell about the deplorable conditions of the migra- tory workers because we are not looking upon legislation to ameliorate these conditions. We don't really have to worry too much about ameliorating conditions because the migrant will not be with us too long. Every statistic put out by the Farm Labor Service, by the Department of Labor, shows that the need for stoop labor is gradually decreasing in this country. Ten years ago today no one would have believed that you could pick tomatoes by machine. Yet today we have 70 percent of all California tomatoes being harvested by machine; in 1964 when this act came into existence only 4 percent. In 3 short years we have gone from 4 percent to 70 percent. 1 am told by people in the farm machinery business that there isn't a crop today that can't be picked by machine when the price is right. The machinery is already on the drawing boards and I am sure Con- gressman Gibbons will attest to the fact that 25 percent of all Florida oranges are being picked by machine today. So the migrants are being driven out of their stoop labor. It is not a pleasant picture to be a migrant and many people have come to us with studies. They want to know why do migrants migrate, and we have not funded any of those studies because we know why they migrate. They migrate because there are no jobs. They are not like the Lapps in Scandinavia or other roving bands. The problem that we have to face is that as automation comes in and the need for stoop labor decreases these people are going to go on welfare and they are going to gravitate toward the big cities and become problems all through America, and that is what we are trying to do. We are trying to be one step ahead of them so that we will make them taxpayers rather than tax eaters, that they can go to the cities or the rural areas and find employment because they have education, they have some way of being gainfully employed. The average stoop laborer can neither read nor write. He does not spend much time in a place to vote, to collect welfare, and these are the people that we are trying to reach. PAGENO="0245" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1083 The migrant stream is actually three separate streams. There is one that starts in Florida and works its, way up the east coast as t.he crops ripen. It starts and it goes up to as far as Massachusetts and then comes back to Florida. There is one that starts in Texas and branches out through the west coast of the United States up through' California and Oregon. And the.re is one that starts in Texas and goes up through the Middle West. When we talk about migrancy, when. we talk about children, we don't talk about the family farm. There is nothing wrong with a youngster on a family farm working to help his parents, working with his neighbors to.harvest a crop and sitting down to. three square meals `i day I ~ ant to repeat that we `ire talking about those groups ~ ho move on looking from place to place for a harvest and quite often' get there and there is no harvest. We have tried to fund these programs through a combination of agencies. Using the flexibility that this agency has we' have tried to go to whatever public or private group could do' the most for migrants. As an example of our bipartisan sup- port we have funded the Governor's office' of New Jersey, Texas, anct `California to run the migrant' programs because we thought they could do thebest job.' . ` In addition, we have funded private nonprofit groups in just about every State to do the same thing. We are presently operating in 36 States and have our public and private groups just about split as far as dollars are concerned. One of our big programs, and our biggest, is the education program. We feel that if a man can't read or write in 1967 or 1970 h~ really can't work and we have tried to educate migrants starting from the lowest possible level and move them into training programs and here is where we try and tie in with the manpower training program of the Department of Labor so that they graduate from our program w ith some basic education and litericy and then move into further training programs run by the Department of Labor. We have two types of educ'itional programs One is `t full time pro gram in which people go to school 8 hours a day 5 days a week. Recognizing that these poor people cannot go to school 5 days a week 8 hours a day unless there is some form of bread on the table, we have provided a stipend. This stipend,'in keeping with our economy drive, is alw'iys less than the stipend provided by the manpower ti airnng programs, not much less but somewhat less, so that we provide just the bare necessities. We have 10,155 people who have gr'aduated from those programs as of the end of the last fiscal year. Of~that number 4,552 have found jobs paying more than what they received as migrant workers, 1,392 have gone into training programs such as MDTA or foundation train- ing programs and 433 have passed high'school equivalency tests so that they have a high school diploma and can walk up to an employer and say "I am a high school graduate" A total of 6,377 The rest have had then education improved so that they can at least read, they can write As people have told me in Mississippi, they can know the difference between DDT and other insecticides. Instead of'being the stoop la- borer they can be the fellow who weighs it and writes down what the `iinount is on the job ticket PAGENO="0246" 1084 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 We also provide day care programs for the children. One of the biggest problems in migrancy is what do you do with a 2- and 3-year- old when the family is out in the field doing stoop labor? The tend- ency had been to do one of two things, either to leave it in an auto- mobile locked so it could not get out, which provided many, many gruesome details of children suffocating to death in the blazing sun, or to have an older child stay home away from school or out of the field and watch the younger child. We have provided day care cen- ters for 13,000 children which do provide some amount of care, of cleanliness, of food so that these children are adequately taken care of while their parents are working. In the field of housing we have as a demonstration put up 1,600 temporary units in the State of California, where they can be used all through the year by being moved from place to place. where nec- essary to provide shelter. These are in public land and we provided those in fiscal year 1965 and 1966 for a total of 1,600 of those. We still maintain those. In addition, we have run self-help housing programs, and these are the programs that the chairman alluded to a few moments ago that he was trying to get for his constituency. These are programs where farm famii~s, farmworkers, can go to the Farmers' Home Adminis- tration and receive a loan to provide and build a home of their own. We provide up to $25 in administrative cost, which means setting up a group that will teach them to be carpenters, how to build a house, how to apply for a loan, how to get an architect, all the various serv- ices including some of what we would call master tradesmen services that they can't do themselves. Most cities have ordinances in which only a licensed plumber can bring the line up to a house. An unlicensed person camiot work in the street.. This is what our $2,500 does. Then they use the Farmers' Home Administration 40-year loans to buy the brick and mortar to build their homes. We have had situations in which a person took $2,500 and borrowed $7,000 and came out with a home that was worth $12,000 or $13,000. We have had people in various parts of the country, espe- cially tax assessors. who found this program to be wonderful because before they lived in a shack which was assessed at about $1,100 and now they live in a house assessed at about $12,000. This is the self-help program that ha~ been run for migrants. The total this year was $33 million. Next year we are asking for $27 million. It is not a decrease. The youth education which totaled $9 million this year will be picked up by the Elementary and Secon- dary Education Act There are many stories of success but there is one that I find most interesting and that is a small program run by the Valley Migrant League in Oregon in which sixpeople were taught to weld in an eve- ning program and the cost of teaching them to weld was a little over a thousand dollars. Inside of 7 weeks these six people had more de- ducted in the form of taxes from their $3.79-an-hour jobs than the total cost of the entire program. These are the kinds of programs that we are looking for and these are the kinds that we want to go forward with. Thank you. Chairman PE1u~Iws. Mr. Meeds. PAGENO="0247" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1085 Mr. MEEDS. Thank you, Mr. Chairman. Mr. Kiores, I was interested in your observation that there is a decrease of from $2 million to $27 million this year in your budget request and you say this will be picked up in the budget of the Ele- mentary and Secondary Education Act. Are you aware of whether or not this has been picked up? Mr. KLORES. There are funds in the Elementary and Secondary Education Act to provide services for migrant children. Mr. MEEDS. There was about $10 million in the authorization last year and the appropriation caine out at about one-tenth that. Mr. KLORES. There are, I am told, $32 million in the authorization this year. Excuse me. May I correct myself. There is $32 million that they have asked for in the President's budget and I don't know at this point what the state of their bill is. Mr. MEEDS. The Office of Education is asking $32 million for miT grant education? Mr. KLOm~s. Migrant child education, that is correct. Mr. MEEDS. And I hope we get it,:but I just point this out or I am just asking you this. This is probably familiar to you. I am reading from a letter that was addressed to you by a group of people who established a migrant program and who are presently operating it very successfully, thanks to your help and the help of the Office of Economic Opportunity in an area which had never previously had a migrant program, even though they are the second largest migrant population area in the entire State of Washington. They never pre- viously had a migrant program until this year. This letter says, just* quoting a part of. it: There are many faults with the angle of baby sitting of which you are no doubt well aware which are simply a continuation of the status quo. \~Te know that these children are losing precious time in which they can be gathering pre- school and remedial education. I am concerned that when you talk about day care with migrant children that are of an age sufficient to assimilate education, and that is pretty young, that educational programs will not be available to them unless you have this program, unless you have the money for education also. Would you like to comment on that? I hate to put you on the spot. Mr. Ki~oiu~s. We hope that the Office of Education will cooperate- I see no reason why they should not-and will provide through the school systems this kind of education when the child is ready for it. Mr. LEVINE. Mr. Meeds, if I might add something to that, Head- start is continuing to fund migrant programs I understand. That is not cut off. Mr. MEEDS. I know that. Do you have any concern or I should say * do you feel personally that the educational systems of. the various States mcluding my own have adequately met this migrant problem in the past? Mr. KLORES. Well, I wouldn't like to comment upon it in your State, Congressman, but just generally most State educational agencies have naturally looked after the taxpayers and this is the problem we face with this whole program. When we were ready for the first round of funds at OEO in 1964 whereas every other community action program PAGENO="0248" 1086 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF `1967 was deluged with applications we were out. trying to find somebody to run programs for us. We were talking to many people. We get a lot of the same response late inthe evening after people are relaxed and that was: "1 ou know if we fund them and run these programs maybe the migrants will think that life is kind of good in thistown and State and maybe we don't want that" and this is the problem we faced. Mr. MEEDS. The fact is they are going to stay, are they not,. and are staying in large numbers right now? Mr. KLORES. They are staying and people just. are not going back to Texas because there is nothing doing in Texas as I said in winter and if we don't find something for them to do and educate them to a pomt. where we can have them as contributing members of American society they are going to be on welfare rolls. Mr. MEnDS. WThat was the basis of the decision, if you know, to trans- fer this money or the request for money from. OEO to the Office of Education? Mr. KLORES. I don't know. Mr. MEEDS. Sargent Shriver, do you know? Was it an administra- tive decision ? Mr. SHR1VER. I think that is all it was. Mr. MEEDS. Had you had any complaint or disagreement with the manner in which the educational programs were being operated under OEO? Mr. SHRIVER. No, sir. Mr. MEEDS. As a matter of fact, it has been my observation that these OEO-sponsored programs were largely responsible for providing some impetus for the local education agencies to get off the dime and do some of this themselves. Mr. SHElVER. That is right. Mr. MEDDs. Do you thiii~k that time has arrived at which we can step back row and say: "We have provided enough impetus. Let them go beyond it." Mr. SHElvER. No, I don't. . Mr. MEEDS. Then might it not be a. good idea to amend this act to provide for at least as much funds as we have been previously using in the educational field for these programs which would be used pri- marily in the day care centers where these two aspects can be com- bined. As this lady Points out in her letter: "You have a perfect. op- portunity here with the day centers to provide aneducational experi- ence at the same time and for probably not too much more money." Mr. SHElVER. it certainly would be. money that was not. wasted in my judgment.. Mr. KLORES. I don't think it would be wasted either. I think' that there are people who look over the entire administration of this Gov- ernment and are perhaps better able to make these decisions than we' who are partisans are. Naturally everyone who is worth his salary feels that he can do a good job and I join them. Mr. MEEDS. That is all I have, Mr.Chairman. Mr. DELLENBACK. Mr. Chairman, as a preliminary, and in view of the comment that the gentleman from Illinois made earlier, perhaps we ought to have something spread on the record so far as the migrant and seasonal worker program is concerned that is now being run by PAGENO="0249" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1087 OEO The opportunity crusade in its title VIII provides similar authority in the Community Action Division of HEW, and the authorization that it calls for in this particular same general area is some $27 million which is exactly the authorization ~hich is ie quested in the present bill, the amendments that we are dealing with so far as the amenthnents to OEO are concerned. I say that not in the way of argumentation, good of bad. I say it because I feel that this ought to go in the record to show that the opportunity crusade does look on this program that you have been talking about and recog- mzes that it has great value Mr KLORES Are you asking for comments or may I comment ~ Mr. DELLENBACK. We are putting that in the record. You are cer- tainly free to comment Mr. KLORES. Thank you. I think that the Department of HEW has done a wonderful job and other departments have done a. wonderful job but I think anyone has to keep in mind that the Office of Eco nomic Opportunity is really not tied to any pattern I think if you look to the point that Congressman Meeds raised about the educa- tion money for migrants you will find that it goes through the State school systems. I am not opposed to that. However, OEO is not in its present legislation or in its history an agency forced to go through a school system. We question if it is the most desirable approach but where a State school system may be not interested in doing anything for migrant children we can go to private nonprofit groups. I agree with you that this hearing is riot the time to raise a debate on the opportunity crusade I want to point out that this is my third agency. I have spent 9 years in the Government since I go~ out of school and I have never experienced an agency which has so much ability to move from one thing to another unfettered by redtape which would have to take 3 years to change and that it what I think the glory of this agency is. Mr.. DELLENBACK. Do you imply, Mr. Klores, that if this change were to be made with HEW that they would find themselves fettered and not able to deal.with this problem? Mr. KLORES. I would say that the HEW has traditions. They have regulation. I don't know how they would react to this program but this OEO was set up to deal with the poor and to move across any line necessary to help the poor and to be concerned only with the poor, and I think one thing this agency has dealt with is providing for the poor. Mr. DELLENBACK. If Sargent Shriver and you and the others were to sit down and testify before us and be anything but advoc'ites of your programs I would be deeply disappointed in you all but you put the finger on it yourself a moment ago when you talked about educa- tion and the debate was whether or not this ought to be moved out or left alone and you said those most deeply involved are not able to judge the activity. You were talking about one small phase of the program. and the point that you made, however, is an extremely valid one. It may also be that you are lacking the objectivity to determine whether there ought to be another aspect as well. I do have just a couple of short questions on this one, Mr. Chairman. You touch on the possibility of this ultimately phasing out, Mr Klores, PAGENO="0250" 1088 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 or at least you indicate that the day of the migrant is passing, and I looked at the chart for fiscal 1967 versus fiscal 1968 and for a moment I really thought I saw that rare phenomenon in the budget, a phasing out. And then you corrected my misunderstanding in this regard by pointing out that it really involves an increase from $33 million to $36 million if we total the other. Do you visualize at any time in the near future this phasing out with the decreasing number of migrant workers? Mr. KLoiu~s. Yes. I think somebody said that we can, if we had the funds, get rid of poverty by 1976. I think the migrant and seasonal farmer are one of the poorest of the poor and I would like to phase them out economically and see them no longer needing our program. I don't see it in the immediate future. Mr. DELLENBACK. Let's assume there were no rapid decline in the number but thinking in terms of the numbers that exist at the present time what budget would you see as the budget that would be necessary really to face the problem for the migrant and fund it in full on an annual basis. Mr. KLORES. Bob, I think we talked about $250 million at one time. Mr. LEVINE. At one time we were that high. That I think was, con- sidered soberly, a little higher than we should have thought. Mr. DELLENBACK. You are not implying that it was not done soberly in the first instance? Never mind. Mr. LEvUcE. It was the first time we ever tried this sort of thing. Mr. DELLENBACK. What figure would you set, Mr. Klores? Mr. KLORES. Well, I felt that that figure was kind of sober. It is so far from where we are when we are talking from $27 million to $130, or $200, or $250 million that I am afraid the figure is as good as any. Mr. LEVINE. The budget officer always stand between a program op- erator and a Congressman. Mr. DELLENBACK. Both Congressman Meeds and I are from areas where a migrant worker is a real fact and not just someone we read about, so that I recognize some real needs in this area. The figure that you would set idealistically and hopefully would be $250 million on an annual basis. Mr. KLon~s. I would say that if the resources of this Nation could be allocated to eradicate poverty that is the figure; yes. Mr. DELLENBACK. That means that in the area of the migrant al- though you indicate that this is one of the poorest of the poor, actually we are doing 10 percent of what we would like to do at the present time as opposed to a considerably higher percent of the other pro- grams on which we had testimony; is that correct? We are just barely scratching the surface in this area of the migrant worker and doing a little more than scratching it in some of these other budgetary items. Mr. SmavER. That is correct, and we have testified on that subject in other programs last year. The reason among other reasons is that, for example, a program like Headstart is larger, reaching 32 percent and migrants reaching 10, is, first of all, as he explained a little while ago that it was very different to start migrant programs because there was not anybody who wanted to work with migrants so that a lot of new organization had to be brought into being to handle the problem. In the case of Headstart we were very fortunate in the first PAGENO="0251" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1089 year that we had a lot of what we now call unearmarked money so that when the community demand arose for *Headstart we were able to meet it. Just by way of an illustration we originally projected about $10 million for a Headstart program. In the summer of 1965, because we had the flexibility given to us by Congress we were able to take that program to an $89 million Federal contribution that when cou- pled with the State or local contributions brought a $100 million pro- gram into existence in less than 8 months. That was possible because we were able to exploit the openings. A lot of these other programs would be substantially larger than they are if Congress had given us the money to exploit the openings but instead when you make a breakthrough and strike out to be able to go get it we had to sit back and hold backbecause we don't have the flexibility any more to exploit it, that has been taken away from us. That is why these programs are not as big as they could be or should be. Mr. KLORES. In 1966 this. was dramatized in the migratory program. The authorization was $20 million and the statute permitted a 10- percent increase in any title because of the flexible funding. Mr. Shriver added $51/2 million to title II for all migrants so that our program went from $20 million to $25i1~ million, and then provided $10 million from discretionary funds, so the $20 million could be increased to $35 million because there was discretion and we struck oil and found people who were ready to do it and suddenly the applica- tions started to come in. Mr. DELLENBACK. Thank you. Chairman PERKINS. Mr. Pucinski. Mr. PUCINsKI. Mr. Shriver, to refer to the statement made earlier comparing the provisions in the opportunity crusade and existing law. As I read the program which you are carrying out now you had con- siderable expertise in reaching these migrants. As you said, you devel- oped this and it took you some time to set the right pace but you are now reaching these people and reaching them effectively, is that correct? Mr. SHRIVER. Yes; it is. We are just not reaching enough of them. Mr. PUCINSKI. It would seem to me that under the proposed sub- stitute this whole activity would be turned over to the Secretary of Health, Education, and Welfare and we would be, in effect starting de novo on this whole thing, wouldn't we? Mr. SHRIVER. I am not an expert on how they would think it ought to be run in the other programs. I suppose maybe Congressman Dellen- back could tell you what they would do. Mr. PUCINSKI. The reason I asked this is because in the bill before us, the administration bill, we improve and perfect your own operation but in the proposed substitute by the gentleman from Minnesota this whole program would be put it into HEW. I am hoping that some- where along the line we are going to find out from the authors why HEW. But the fact of the matter is that. because of the expert experi- ence that you have gained in developing this, what I think is one of the most successful aspects of the poverty program, would be lost by transferring it to HEW. Would any of your witnesses care to corn- me.nt on that? . PAGENO="0252" 1090 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. BERRY. It is my impression as I read it that it would change somewhat the thrust of our efforts to get local community support for these programs because as the language seems to imply, HEW would condtict the programs, make grants for special programs that would operate on a mobile basis, in other words, create an instrument that would move with the stream. It would be a federally operated pro- gram rather than a locally generated operation and provide transpor- tation to return them to their locality. The greatest loss it would seem would be the loss of momentum be- cause it would be, in effect, dismanteling a match or system that is now proving effective and moving it into a very tightly structured bureau operation. As Mr. Klores has mentioned, the established agencies of tradi- tional patterns, the echelons of operation that reduce this flexibility and mobility to aim in and zero in on the targets of need, more ad- dressed to the lines of command and the generation of programs which takes much longer than exist in our agency. Mr. PUCINSKI. Mr. Shriver, as to the additional language that you are seeking in the legislation dealing with migrant workers, could you tell us just briefly what this new language would do, how it would strengthen your program? Mr. SHRIVER. I would like Mr. Kiores to answer that, please. Mr. KLORES. The present language of the statute talks about four areas: day care, sanitation, housing. and education. That was put in because, if memory serves me correctly, Senator Williams in 1964 had four pieces of separate legislation in the hopper and he tied them all together and the four of them were the ones I had mentioned. We have found that even though the areas are good we are precluded as an example in the strict constructon of the statute from providing health to people in an educational program. We cannot give them physical examinations. Everyone knows that if you are going to put children or adults into an educational program someone shsould examine them. It is difficult to learn if you can't read because you don't have eye- glasses. These are the restrictions we a.re operating under especially in the health area of providing some of the small health benefits that would make the program a. success. Right now we have to try and find other ways t.o take care of it.. We are not always successful. We have had people in programs in Missis- sippi and Alabama who could not read without corrective lenses and did not have those corrective lenses. We could not give them the ex- amination under this statute even though they may have been able to buy the glasses if they knew what their problem was. So it is a minor change permitting us to run the same. kind of program for migrants that we would run under a community action agency. Mr. PUCINSKI. Do we have any statistics on what. has been the experience with children of migrant workers since they have been receiving help under this program? Mr. KL0REs. No, I don't think we have any statistics on what has happened . to the children except. that they have been able to go to school, which is something they had not. been able to do in the past. We have taken a program such as the one in New `York State in which we opened the schools in the summer when the migrants are there. That is when the kids need the schooling. In the summertime when PAGENO="0253" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1091 they are up in New York State naturally the~ schools are closed. We are running the program. t.here. We have had programs for children in various other States. So that the success I think is that the children are going to school for the first time in their lives. Mr. PU0IN5KI. One final question: Could you tell us briefly what has been your experience with the day care centers? You provide day care for children. How do you do this? Mr. KLORE5. We provide a system in which a family on their way to the fields may leave their child in the center and the center can be anything from a church, a schoolroom, a~ donated facility, or a mobile unit and the children are taken care of from usually 5 and 6 in the morning until 7 or 8 at night because that is when migrants work. We don't provide a service from 9 to 5 or 8 to 4 which is of no use to them. The child is taken in. He is bathed. He is cleaned. He is fed. If he is an infant he is given a cot and then they move to the regular Headstart type of programs if they are old enough. This is what we are doing for the children. Mr. PuCIN5KI. Thank you. Chairman PERKINS. Mr. Gardner. Mr. GARDNER. Mr. Chairman, first of all I would like to ask for a clarification from the Chair. Is it my understanding that we finally agreed after our discussion this morning that OEO would submit a copy of their report concerning Operation Breakthrough. Chairman PERKINS. It was the statement of the Chair that OEO would insert that in the record; that along with the investigation that you had made that OEO would have that opportunity. Mr. GARDNER. Could I ask Mr. Shriver if this is his plan to intro- duce this report? Chairman PERKINS. That is not pertinent. The Chair rules that that is not pertinent. He may want to respond to it and he may not want to respond to it. Mr. GARDNER. Let me ask him another question going back a little bit, since we have had such a peaceful afternoon. Mr. Shriver, I have been told or have heard from various sources that your employees at OEO are required to sign a statement that they will not in any way discuss any OEO matters until 6 months after they have terminated their employment with OEO. Is this true? Mr. SHRIVEn. I don't know of any statement that anybody signed. Maybe they are and I don't know it. I never signed one. Mr. GARDNER. So it is not true. Mr. SHRIVER. I don't know anything about it. Mr. LEVINE. I have never seen one. Mr. GARDNER. All I am asking is is it true or not? Mr. BERRY. I think this is a misconstruction. There is no such requirement of any employee. I think if the General Counsel were here he would explain that in connection with research studies that are performed under contract for OEO they may not publish them sooner than 6 months. Mr. LEVINE. Sixty days. Mr. BERRY. Sixty days. There is a restriction on the right to publish and use materials that are produced with our funds until after a certain period of time. Mr. GARDNER. Thank you. PAGENO="0254" 1092 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. BERRY. But there is no such rule as carries the import of your question. Mr. GARDNER. I yield the balance of my time. Chairman PERKINS. Mr. Steiger. Mr. STEIGER. Mr. Chairman, thank you. The needs of the migrant worker without question are critical. I don't think any of us would argue with that underlying premise. I would have several questions, Mr. Kiores, some of which involve my State and some of which involve other States. I saw the report in the Washington Post on May 30 in which it was reported by the Associated Press that the General Accounting Office said yesterday it has found fairly extensive evidence that Federal antipoverty funds were used in efforts to union- ize farmworkers in Florida last year. Mr. Chairman, if I may, I would like to ask unanimous consent that the report of the General Accounting Office on the situation in Florida made at the request of Representative Paul Rogers of Florida, be inserted into the record. Chairman PERKINS. Is there objection? Mr. PUCINSKI. I object. Mr. Chairman, would not it be wiser to put that in the appendix of the record? Mr. SHRIVER. That is already a public document in case nobody knows it. Mr. STEIGER. I would have no objection to putting it into the appendix; no, sir. Mr. PUC*INSKI. I withdraw my objection. Mr. STEIGER. There were a couple of things uncovered as I under- stand it from the GAO report. It was suggested that OEO recover the funds financed by OEO for the reimbursement for travel expenses that were used during these efforts. Has any effort been made to re- cover those funds pursuant to the GAO investigation? Mr. KLORES. I am very happy that you have included the entire re- port in the record and not just the news articles because. the Comp- troller General in his cover letter in the report to Mr. Rogers states that it appears that certain employees of the grantee engaged in what may be considered political and ~union a~tivities. And Federal funds were used to reimburse some of these employees for certain expenses incurred while carrying out these activities. He says also as will be noted in the bottom of the letter there are certain inconsistencies in the information obtained. That is why I am pleased that the entire report was put in the record and not just the news article which I think was a little distorted. We have sent these reports to the Amer- ican Friends Service Committee and to the community action fund for their comments and that is the first step in what we do in any re- port. Those reports were given to Congressman Rogers first. They were never officially sent to us. We have just gotten our official copy and those reports went out and we asked for a reply in 30 days and we will take whatever action is warranted. We do not in these grants sanction union organizing activity. We feel that the American labor movement is sufficiently strong to unionize people if they so need it and that it is not our function to provide Federal funds in these grants to unionize farm laborers into a labor union. PAGENO="0255" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1093 Mr. STEIGER. I appreciate your response very much and the fact that the full report will go in so that we will have the benefit of it. If I understood what you said correctly, and if I did not please correct the record, your own, modus operandi is to send it to the `CAP agency and to the American Friends Service Committee for their comments so that at this time no action has been taken on the question of trying to recover any funds. Mr. SHRIVER. That is the first step in recovering funds. That is the way you recover funds. In other words, they have the right to respond from their point of view to whatever is revealed in an audit or a gen- eral accounting office audit. In other words, they have the right to ob- ject before you so to speak to get something. That is the first step. I might just mention in connection with it that our chief auditor, Mr. Cutler, who is here, pointed out to me that that investigation con~ sumed the time of as many as six auditors at regional and headquar- ters levels for approximately 41/2 months, and the estimated maximum amount that is involved may be approximately $00. Mr. STEIGER. Mr. Kiores, I wonder in terms of the answer that you gave on unionizing activities, are there any specific safeguards which OEO writes into grant awards on union organizing activity? Mr. KLORES. We have no standard policies for or against union or- ganizing activity. However, every grant, every application for a grant is very carefully lo6ked at including the work program. We are not just interested in money. We are interested in what they are going to do for the money and when we read a program and we approve it, there can be no change in that work program without, our consent. To this date we have not approved any work program that involved the organizing of migrants into a labor union. Mr. PUCINSKI. Mr. Chairman. Mr. STEIGER. May I, Mr. Chairman, ask unanimous consent to con- tinue for just a few minutes. I didn't get to Wisconsin yet. Is the United Migrant Opportunity Service of Waukesha the only agency in Wisconsin with which you fund for work with migrant workers? .` , , Mr. KLORES. At the present time it is the only agency we have funded. That doesn't, mean that if additional funds were provided we would say that everybody has to go. through one agency. We at one time funded a small grant of some $2,800 to Door County in Wisconsin to provide library services for migrant children and migrants. Mr. STEIGER. Do you, at the present time, because of the fact you have listed a wide variety of groups involved such as State agencies, do any funding with local school districts and/or State educational agen- cies for the purpose of opening up schools during the summer for migrant children specifically? Mr. KLORES. Yes, we do. As I mentioned, we fund one in New York that comes to mind right away in which we open schools. We fund programs in the State of California through Governor Reagan's office to provide education for migrant children. We fund a program through Governor Connally's office in Texas to open school districts not during the summer there because that is when the migrants leave, but to provide a special 6-month program for migrant children so that they may get in 6 months what the average child gets in 9or 10 because they leave at the end of 6 months. Mr. STEIGER. One of the criticisms that has been raised against the United Migrant Opportunity Service, called UMOS- PAGENO="0256" * 1094 ECONOMIC OPPORTIJYITY ACT AMENDMENTS OF 1967 Mr. SHRIVER. I thought you were talking about my wife for a moment. Mr. STEIGER. One of the complaints is the charge against it that it has tended to serve the purposes of trying to get the migrant worker out of the plant or field in which he may be employed for the pur- pose of putting him into school. I have had some correspondence with your office on that very point. In fact, the Icrier Preserving Co. of Belgium refused to go with lIMOS this year because they put down arbitrary guidelines on the participation of parents in schooling as a prerequisite for the children that were going to be served under this program run in Belgium. Wis. These people have since gone partially to title I funding, partially with the Department of Agriculture sur- plus food program, rather than TJMOS because there was far more flexibility and because there was no requirement for parent partici- pation. I don't ask this really in terms of having you know how lIMOS operates except to make the record and make the point that if we are going to work toward serving the migrant children, then you have to do that. effectively and not necessarily always involve the require- ment that the parents participate to the same extent. Mr. KL0RE5. May I answer that question or that statement? The Tinited.Migrant Opportunity Service program, as well as all our pro- grams, operates under the restriction of my office that no full-time adult education program be conducted during a harvest season because w-e recognize that agriculture in America needs hand labor today. My statements are about what is happening and we recognize that there is a need for hand labor today. We do not compete for hand labor. I don't say this is true of the company you mention, but there are many companies which refuse to have their employees engage in any pro- gram off or on hours. Once again I am not saying this is true of the company in Wisconsin. Mr. STEIGER. It is not. They did use lIMOS last year, as a matter of fact. Mr. KLORES. Many companies don't want children engaged in any programs because children can be used in the fields, and the only program that is being run by lIMOS for children is a day-care pro- gram in which we like to have parents participate, but it is not for drawing them out of the factory. Mr. STEIGER. Thank you. I appreciate that. Thank you, Mr. Chairman. Chairman PERKINS. I am going to let the gentleman from Illinois ask a final question. Mr. PUCINSKI. I listened to your colloquy on organizing labor with interest. I agree with the position you have taken. If some of these people want to ask questions about the labor movement as part of their good-citizenship training, would you not preclude your people from giving them, answers on that subject? Mr. KL0RE5. No, we would not preclude those questions. Mr. PuCINSKI. The other question I have here is that it seems to me that this migrant program means just what it says, a migratory pro- gram. This is why you have made a success where others have failed. Wouldn't the programs become ineffective if you were to turn them PAGENO="0257" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1095 over to the States to operate because of the fact that these are people who move in and out of the State during the harvest season? For that reason I was wondering if we are not much better off to leave it the way it is than to try to think of the proposal made in op- portunity crusade. Isn't the migration of these people one of the sound- est reasons for leaving it in your hands? : Mr. KLORES. You are correët, Congressman, the migration is the im- portant thing. This is the reason we have seen fit not even to have this program delegated to a regional office because these people mOve throughout States, throughout regions. They start out in Florida, they wind up in Massachusetts. They start out in Texas and they wind up in Michigan. Chairman PERKINs. Mr. Meecis. Mr. MEEDS. Reading, Mr. Kiores, from page 95 of the so-called opportunity crusade on line 20, "The Secretary is authorized to give grants under this part to encourage them to develop a program co- ordinated through regional arrangements or State compacts to pro- vide minimum standards of housing, sanitation, education, transpor- tation, and other environmental conditions." I ask you if the Skagit County Migrant Facilities Group which is this year educating for the first time in the summer 350 young mi- grants who had never had this opportunity before in Skagit County, could have been funded if this language were in the present? Mr. KLORES. I guess not. Mr. MEEDS. If the people in Washington did not see fit to do it they woulc~ not do it, would they? The money would go to the State of Washington and you would have no authority to deal directly and immediately with the Skagit County Migrant Facilities Group? Mr. KLORES. That is the way I read line 20. Mr. Mi~i~s. I would like the record to show that there has never been a program authorized for Skagit County by the State of Wash- ington before. Mr. STEIGER. Would the gentleman yield? Mr. MELDS. Yes; I will yield. Mr. STEIGER. I would hate to have the record go as muddy as it may have just been made. I think that the witness ought to refer to section 821 (A), "authorize the development and implement programs, guar- antees, grants, to assist State and local agencies, profit and nonprofit institutions, and cooperatives." Without knowing fully what the particular county program is in Washington, this would serve, I think, certainly the need that exists in Wisconsin. Mr. MEEIS. I will just ask the gentleman if in section 821 he sees the word "education" any place? Mr. STEIGER. I would not think it is necessary always to lay out specifically each and every program since I don't necessarily find the word narcotics listed on that chart and yet narcotics was a program authorized by the Congress under OEO. Mr. MEE~s. I will ask the gentleman further if the word "educa- tion" is not used in the present act in that enabling legislation? Mr. STEIGER. I don't have the present act before me. Mr. MELDS. If you will look at it you will find it. 80-084-67-pt. 2-17 PAGENO="0258" 1096 ECONOMIC OPPORTLTNITY ACT AMENDMENTS OF 1967 Chairman PERKINS. I wonder if you can come back in the morning, Sargent Shriver? We will move along with the education aspect of the program. There will be a lot of questions on the Job Corps. We will do our best to complete your testimony tomorrow. Mr. SmuvEll. Thank you very much, gentlemen. Chairman PERKINS. The committee will recess until 9:30 in the morning. (`Whereupon, at 5:10 p.m., the committee recessed, to reconvene at 9:30 a.m., Wednesday, June 21,1967.) PAGENO="0259" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 WEDNESDAY, JUNE 21, 1967 HOUSE OF REPRESENTATIVES, COMMIrPEE ON EDUCATION AND LABOR, TVashington D.C., The committee met at 9 :50 a.m., pursuant to recess, in room 2175, Rayburn House Office Building, 1-Ion. Carl D. Perkins (chairman of the committee) presiding. Present: Representatives Perkins, Green, Dent, Pucinski, Daniels, Hawkins, Gibbons, Scheuer, Meeds, Ayres, Quie, Goodeli, Bell, Gur- ney, Scherle, Dellenback, Esch, Gardner, and Steiger, Also present: H. D Reed, Jr., general counsel; Robert E. McCord, senior specialists; Louise Maxienne Dargans, research assistant; Ben- jamin F. Reeves, editor of committee publications; Austin Sullivan, iiwestigator; Marian Wyman, special assistamit to the chairman; Charles `W. Radcliffe, minority counsel for education; John H. Buck- ley, chief minority investigator; Dixie Barger, minority research as- sistant; and W. Phillips Rockefeller, research specialist. Chairman PERKINS. The committee will come to order. A quorum is present. `When we recessed last evening, we delayed the educational aspects of the community action program at the request of Congressman Quie. I presume he will be in right away. But we will be delighted to hear you this morning on 1-Ieadstart, Upward Bound, Follow Through. If there is any other phase of the commui~ity action section you would want to cover this morning, you go ahead in your own way. I presume the members will wish to interrogate you and your entire corps of assistants on all titles of the bill. I know they will have ques- tions on the Job Corps. Maybe it will be better for you to present the remainder of your presentation before we commence the questions. However, we want you to work in your own way. You know how to present it better than we do. FURTHER STATEMENT OF HON. SARGENT SHRIVER~, DIRECTOR~ OFFICE OF ECONOMIC OPPORTUNITY; ACCOMPANIED BY BER- TRAND M. HARDING, DEPUTY DIRECTOR; DONALD M. BAKER, GENERAL COUNSEL; ROBERT A. LEVINE, ASSISTANT DIRECTOR, RESEARCH, PLANS, PROGRAMS, AND EVALUATION; THEODORE M. BERRY DIRECTOR, COMMUNITY ACTION PROGRAM; AND RICHARD T. FROST, DIRECTOR, UPWARD BOUND Mr SHElVER Thank ~ ou, Mr Chairman If it is agreeable with you, we would like to start with Dr. Frost, who is at the end of the table here, who is the Director of the Upward Bound program, and has been since the beginning. 1097 PAGENO="0260" 1098 ECONOMIC OPPORTTNITY ACT AMENDMENTS OF 1967 I thought following him we could either turn to the questions that people had last night about the health program-there were some questions about that-and then move from that to the Headstart program. I am personally of the opinion that that will probably take up most of the morning. If it does not work out that way, we will be happy .to go, after Headst.art, to questions abOut the Job Corps or to questions about another item on community action, Mr. Chairman, called Train- ing, Research and Development, and Tecimical Assistance, which you see there at. $79 million. I think . it. would be inadvisable not to discuss a monetary item as large as that one in the Heacistart. presentation because I think mern- hers of the committee later on, on the floor, might be asked questions about a sum of. money of that size. If tile record disclosed no discus- sion of an item .of that size it might be a. little faulty; the record will be faulty. Chairman PERKINS. The committee will have difficulty sitting this afternoon, but we will do the best we can. Go ahead. .Mr. SHRIVER. With your permission, Mr. Chairman and members of the committee, ~I would like to introduce Dr. Richard Frost, Direc- tor of. TJpward Bound. Before cOming to Cpward Bound, he was president of Reed College in Oregon. He has a distinguished record there. Mr. PFcTxsKI. Mindful of what the chairman just said about our having difficulty to get permission to sit this afternoon, because of the limited time, I wonder if we might ask Mr. Shriver and his associates to confine themselves this morning to those areas of the program that have been most frequently criticized so that we can hear their rebuttal to some of the criticism which I lmow, in many instances, is unfounded. I know it will save time and we will be able t.o make a. better record here. Mr. SHRIVER. Could I make a comment about that? You take [pward Bound and Headsta.rt. They don't get criticized at all. The only suggestioii about them is that they be taken away from OEO. Legal services gets very little criticism. The neighborhood health centers get very little criticism. It is only community action that gets criticized-what, we do is great. It is just us. I think the thing to do is to get on with TJpwarcl BouncL Why don't yOu go ahead, Dick? Mr. DELLENBACK. Mr. Chairman, before t.his next witness actually commences, may I, since he is a citizen of my State and a very re- spected citizen of my State, have a chance to say for the record t.hat we from Oregon who are interested in education are very proud of Dr. Richard Frost. He is an outstanding educator and very fine. cit.izen of wha.t we consider a ver fine State. We are glad to have loaned him for a period of time to what is an impOrtant enterprise. We are delighted with the understanding that he is going to be ret.urning to education in the State of Oregon. We are delighted to have you with us this morning, Dr. Frost. Mr. FROST. Thank you, sir. Mr. Chairman, I have the unpleasant duty to report to you that poverty high school students in the United States go. to college at PAGENO="0261" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1099 oniy one-seventh the rate at which all high school students continue their education. There are about 1,400,000 poverty high school stu- dents in the United States, youngsters who live in poverty families or in no families at all. They go to college at the rate of about 8 percent. The genei al college going population, general college going r ~te among high school graduates is between 50 and 60 percent. This is the gap that OEO's Upward Bound community action program is trying to narrow. Upward Bound, as you know, Slr, is the precollege preparatory program wherein we make graiits to univer- sities and colleges to recruit high school youngsters, usually about the 10th grade, and to stay with them in summers on the college campuses and tutor them duung their ~tc'tdemic ye'ns until they get to the college gate. Mr. Shriver has called this program on one occasion or another a Headstart for teenagers. The purpose of it is to remedy poor academic preparation and poor personal motivation in secondary school and, thus, increase a younger's chance for acceptance and success in a college environment. Webegan the program in 1965 with 18 pilot programs. They were, in our judgment, quite successful. Eighty percent of the high school graduates in those programs went on to college. Then we blew it up in full hi 1966 and at the present time there are 220 colleges in the program and there aie 20,000 poverty high school youngsteis These programs exist in 47 States, the Viigrn Isl'mnds, Puerto Rico, `tnd Guam In `dmost eveiy ctse, this is `t college t'iking high school kids on the campus in the summer for a 6- to 8-week intensive beef-up academic program, and during the aba.demic year the Upward Bound institution continues to meet these students, returning them to the campus Saturdays, sending their own undergraduates out to tutor them, and through pei iodic cultui al enrichment pi ogr'~ms In 1965, as I said, we h'td 18 pilot piograins w ith 2,000 students, spending $21/2 million. In fiscal 1966, $25 million with 20,000 students. We are just through a funding period to begin new piogrcms this summei We h'tve spent $28 million and will h'ive on bo'ud this sum mer 22,000 youngsters in every State `rnd `ibout 250 colleges p'n ticipating. The program foi fisc'tl 1968 is on the ch'nt, su We except `tbout 30,000 students in a minimum of 280 colleges at a cost of $35 million, as this chart over here shows. 1 want to tell you for a moment, Mr. Chairman, something about these youngsters Their `~vei age age is `ibout 16 w lien they start in the progi~m They usually h'ive finished the 10th gi'~de They qie divided about 50-SO boys and girls. The ethnic pattern that the colleges have recruited around the country is as follows 51 percent Negro, 33 percent Caucasion, 7 per cent Spanish-speaking; and 4 percent American Indian; and another category, 3 percent of "other," which is frequently ouental youn~teis on the west coast An important feituie `ibout these youngsteis is th'~t less thin h'iif of them live with both p'~i ents They come om family incomes that are below even OEO's poverty line, and their average grade when PAGENO="0262" 1100 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 they entered the program as high `school students was "C." Three- quarters of them had averages of "C" or worse. Clearly, Mr. Chairman, this is not the college-going population. Now, when you bring such youngsters onto college campuses and work with them very intensively, the colleagues have apparently been very successful with them. As I say, in the summer of 1965 they had about 1,000 high school graduates in this program and 80 percent of them went on to college. In the summer of 1966, about 76 percent of their high school graduates went on to college, and this year we have the first big bulk coming around the track. There. are about 6,000 seniors in Upward Bound coming around the track this June to graduate, to stay in Upward Bound this summer and, hopefully, to go to college in the fall. We know that as of May 10, 57 percent of them were accepted already in college and 23 percent had applications still pending. This is to be contrasted, Mr. Chairman, with the 8 percent of the non-TJpwarcl Bound poverty high school youngsters who normally go to college. Now, one of the most important features of this program is, of course, to try to develop some effect on the colleges and how they might respond to youngsters of this kind. Unless the colleges can respond successfully to youngsters of this kind, the program would be a failure. The new-s so far, Mr. Chairman, even if spotty, is very good. I would like to report that Western Michigan University in Kalamazoo has already. admitted 18 of their Upward Bound students with full finan- cial aid. The University of Massachusetts at Boston has promised to accept all their students at the university. The president of Boston College has announced that Boston College * will accept all their Upward Bound students. Loyola, in Chicago, will admit unconditionally any student who completes their Upward Bound program. Similarly, Xavier, in New Orleans, Southwest Texas State in San Marcos, Texas College of Arts and Industries, `Western Washington State College, the State University of New York at Buffalo. The list is very long, including the University of South Florida, Morehead State. University in Chicago. And, good news, just yester- day, that the University of Minnesota will accept its Upward Bound students in its general education program. This has been, for us, the real test as to whether these youngsters would finally get into good colleges. Apparently they can. They can with this kind of help. Now, Upward Bound, as you know, sir, is in the community action package, and in our judgment it is crucial that it be there because it partakes of the very special advantages that community action can provide. First, w-e found that the local CAA was often the catalyst which induced a college to apply. Second, we found that the CAA has a number of resources that are very important to Upward Bound and to the college, such as health care for these Upward Bound students. CAA's were very helpful in recruiting so that the college need not depend solely on high school counselors. The CAA was often very helpful in the development of PAGENO="0263" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1101 our local public advisory committee. Every Upward Bound college has a local public advisory committee on which sit representatives of the CAA, usually of the local school districts with which the program is related, and in every case one-third of the membership of that com- mittee are people who are OEO poor. This committee has related a great many colleges to their own poverty neighbors for the very first time. The poor, I think, have much to say to higher education because higher education-and I want to confess this as a member of it-has historically maintained its reputation by rejecting people, and the poor have much to learn from the college about the long-range value of continued education. Lastly, frequently Upward Bound is the poverty family's first contact with the war on poverty. They have a teenager; they are in- tensely interested in his problems and success. When they get him into Upward Bound, the CAA. then has this family surfaced and can look a.t some of its other problems for which they may have and fre- quently do have a number of resources with which they can respond. Mr. Chairman, I don't want to take any more of your time in open presentation. We think so far the program has been a success. We will be glad to answer questions about it. Thank you. Chairman PERKINS. First, let me compliment you on an outstanding presentation. I am personally most deeply impressed with your testi- mony, especially when you state that three-fourths of the students who come from the 10th grade are disadvantaged because they are "C" stu- dents or less. You did further state that it was crucial that this program be in the Office of Economic Opportunity. My question is: Can you now reach this type of youngster that you have described, 1,400,000 poverty high school students in the United States, of which only about 8 per- cent go to college, if this program were transferred to the Office of Education? I would like to hear your views on that. Why will it work better where it presently is rather than in the Office of Education? Mr. FROST. Mr. Chairman, I believe at this time it is in the right place for the reasons I have stated: that the community action agency has particular and, in our judgment, indispensable resources to bring to the program, and community action is in OEO. Second, the classic reason of OEO's single-minded concern for the poor. The U.S. Office of Education is a great agency with a variety of mandates, only one of which is to do something about poor youngsters. This program in the agency is exclusively concerned with poor young- sters. Our own opinion is that when you mix this kind of non-performing, at present poor youngster, with a lot of other programs, he is the one that is going to be forgotten the soonest. Lastly, because it is in community action the program has had flexi- bility in financing. I recall that in 1966 the agency estimated the de- mand at $20 million. That was the budget, in quotes, that we worked with. It turned out a vast number of applications came in from col- leges and Mr. Shriver could flexibly get another $5 million into it and it became $25 million. PAGENO="0264" 1102 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Chairman PERKINS. You are telling the committee that with the program as presently constituted in OEO, you are in a better posi- tion to concentrate and zero in on this highly disadvantaged youngster who has never been reached before and to improve immensely his op- portunities of going on to college, and you are in a better position than is the Office of Education because they have so many programs that they cannot as expeditiously reach this type of youngster? Is that a correct summation of your statement? Mr. FROST. Yes, Mr. Chairman. I believe that the mixture of flexibil- ity of OEO and its single-minded purpose on the Poor make it pref- erable to have it in OEO. Chairman PERKINS. Are you in a better position to reach this so- called poor, disadvantaged youngster than the Office of Education? Are you closer to him? Mr. FROST. Our community action agencies, I believe, are much closer to him. They are a great help in recruiting. High schools have enor- mous problems and work under great odds. The CAA's exclusive con- cern for the poor makes it, I think, more facile to recruit youngsters for this program without going ~just to high school counselors and ask- ing them who they are. Those people are. greatly overworked, as you know. The CAA can take a variety of sources to recruit youngsters, VISTA people, neighborhood groups, police courts, a vast variety of sources. The CAA knows those people. Chairman PERKINS. The CAA workers are in close contact with the school superintendents and the various supervisors in these areas all the time, where the Office of Education does not have local representa- tives in this area. Am I correct in that? Mr. FROST. That is true, Mr. Chairman. Chairman PERKINS. Do you have any further supplemental state- ments you care to make as to why this should be in the Office of Eco- noinic Opportunity? Mr. FROST. No, sir. I have stated three reasons. The purpose of OEO, the flexibility that OEO has, and the particular advantages that com- munity action presents to the program would sum up my reasons for the hope that it stay in OEO. Chairman PERKINS. Mr. Quie? Mr. QUIE. Following this, it is hard for me to believe that the com- munity action agencies of OEO are closer to the. young people than are the teachers in the. high school. They surely know who the young people are who have dropped out or are about tO drop out. Who is closer to these people than the faculty in the high schools? Mr. FROST. Mr. Q,uie, I don't know who is closer. I think a neighbor- hood group may be closer to a youngster who has dropped out of high school than the high school principal or counselor's office would he. Mr. Qura. What percentage of the children in the neighborhood or neighborhood group are close to him? Mr. FROST. I don't know the answer to that.. We recruit through athletic groups, through a great variety of indigenous neighborhood groups, whereas the Office of Education, I think, would be just more likely, more likely to recruit through the regular establishment that PAGENO="0265" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1103 they have worked with for a number of years, including the high school counselors. We do not ignore them in any way. They are always consulted, and must be. Mr. QUIE. Is it better that we change the operation of the Federal Government so that every Federal agency will be operated by a sin- gle-minded individual, a one-track mind? Is that another way of put- tingit? Mr FROST I did not underst'tnd your question, sir Mr. QrnE. You said one of the reasons `why OEO ought to handle this program, i ather than the Office of Educ'ition, is because they `ire single minded about the problem of po~ erty Do you think every `igency of the Government ought to be oper ated by a single-minded individual? I asked also does it tend toward a one-track mind ~ Mr. FROST. I think OEO's Overwhelming concern for the part of the population which has been ignored so long augurs well for now to get some effective response from that part of the population; yes. Mi QUIE Have you compared the success of Upward Bound with the Office of Education's piogiam, Talent Se'nch ~ Mr. FROST. No, sir.' You can't compare apples and pears. The Talent Search in the Office of Education has no academic training at all, as I understand it. The proposals that I have read as to Talent Search from the colleges indicate it is a recruiting program. It is a good one, a recruiting program. It informs a' vast variety of high school youngsters as to the avail- ability of grants and loans, and so forth. But Talent Search has no' academic training component as Upward Bound does. Mr. QUIE. They both have the same purpose, however; to get the young people to college. Mr. FROST. Yes. Mr. QtTIE. Is there any coordination between the two? Mr. FROST. I personally believe that the clientele that each is serv- ing may be quite different. I think the Talent Search is reaching for that obviously better performing high school youngster who is eco- noirncally poor and could not go to college unless he got some sub- stantial financial aid. Upward Bound, obviously, the Upward Bound colleges, have reached for the youngster that was, apparently less obviously bright and able to negotiate entranc.e to colleges, as the record shows. Three- quarters of the Upward Bound student.s have a high school grade average, when they get into Upward Bound, of "C" or worse, and that is not the college population of America, rich or poor. Mr. Quri~. The answer is that you are not coordinated with that program because you feel you are dealing with a different clientele. Mr. FROST. I think it is a different clientele. The programs comple- inent each other well. We have always had representatives from our office sitting on the Talent Search panels that review proposals for Talent Search. We know which colleges in America have Talent Search grants and that have Upward Bound programs, and there is great interplay among them. Mr. QmE.' How poor does a family have to be in order to get into Upward Bound? ` PAGENO="0266" 1104 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. FROST. The conventional OEO standard for- Chairman PERKINS. Will the gentleman yield to me at this point? Mr. Q,UIE. Yes. Chairman PERKINS. I think it is most important to point out that there is no overlapping of agencies in OEO at present. Mr. QuiE. The Office of Education is trying to coordinate these programs. But I would like to find out, do you base this on the income of the families rather than property holdings of the family? Mr. SHRIVER. Could Dr. Levine speak to that? Mr. LEVINE. Our poverty lines are based on the income of the families. I think in the application of that, clearly we are not going to take anybody rich-if we have a very rich person who has a nega- tive income one year he does not get in a poverty program, which I think is the thrust of your question. What we look at, statistically, is the income, but somebody who accidentally for 1 year fits under the income line is not going to get into our program, because it is an accident. There is some judgment used, in other words. Mr. QUTE. What do you do in Upward Bound if it becomes known that a child conies from a family who happens to have for a year or two a low income but the property holdings of the family are quite high? Do you still continue to serve them? Mr. LEVINE. You are sort of talking about the choice of particular youngsters in Upward Bound. I think you would go in Upward Bound, as in all our programs of this nature, for poor children in poor areas, income poor children in slums. You don't find people in slums, Mr. Quie, who have low income and high property holdings. Mr. Q.rnE. We don't have slums in my congressional district and there are a large number of congressional districts who don't either. Yet Upwa.rd Bound programs operate there. and the young people come from the rural area. In rural America there are some poor people and the parents have very little. There are others who have low income for some years but they have high holdings. There are rural equivalent slums perhaps in the Southeastern United States and there are a few places in northern Minnesota but in my congressional district the people do not live in slums, rural or urban. Mr. SHRIVER. Congressman Q,uie, I think that we rely not only on the numerical dollar income of people but also we place some reliance on the colleges that are operating these programs to t.he extent that if a youngster gets in, let us say, b mistake, and say his family has a $10,000 farm or a. Cadillac or two Cadillacs, that type of thing becomes fairly well known pretty quickly in the community. Usually it becomes knOwn so quickly that we get a blast in Wash- ington for having permitted into the poverty program somebody who is not qualified financially. Mr. QUJE. What happens when they are in the Upward Bound program and the blast conies to Washington? Mr. SHElvER. The interesting thing is that so fa.r as I know, there probably are some cases, I don't know of any cases that have come up like that. There may be. a ha.lf dozen or a dozen. Mr. FROST. We have had a half dozen cases like that. I called the attention of the college to it a.nd t.he college looked further into the PAGENO="0267" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1105, youngsters' families' assets. They did not throw the youngster out of the program but usually used its own money or some local contribu- tions to support him. Chairman PERKINS. Mrs. Green, Mrs. GREEN. Thank you, Mr. Chairman. I don't have any questions. I do think there ought to be greater coordination between the Talent Search in the Office of Education and Upward Bound and the iii- dividual programs that have the same golden objectives that are car- ried on by individual cOlleges. It seems to me that at some time, maybe' not this year, although I think we ought to look at it this year, these programs ought to be coordinated. I think that, in fact I know that in previous hearings in the Special Subcommittee on Education, people from the Office of Education have said that these should become one program at some time in the near future. I would think that we would get better results for the dollars spent if we looked and studied this possible coordination of the programs I think there is overlapping and duplication and I think the goals are pretty much the same. I have no questions, Mr. Chairman. Chairman PERKINS. Mr. Goodell. Mr. SHRIVER. Could Dr. Frost comment? Chairman PERKINS. Dr. Frost. Mr. FROST. Mr. Chairman, I believe that the clientele so far is dif- ferent enough to suggest tha.t maybe they ought not to be amalgamated yet. Talent Search ha.s no academic beefup or remedial work in it to' my knowledge anywhere in America. These youngsters were not only not headed for college but probably headed .for poverty. They will never make it in college unless they have this kind of major academic heefup. ` Therefore, in my view Upward Bound has reached a somewhat dif- ferent cut of American youngsters than Talent `Search reaches. Mrs. GREEN. .1 think there would be a difference of opinion on that.' WThen we drafted `the legislation, I think the gentleman from Min~ nesota will agree, that the purpose was the same, to identify the youngster of exceptional ability who did not~ have the money to go to college. ` ` Mr. FROST. I believe we are in an important semantic difference here. The Talent Search statute, as I recall it, says demonstrated aptitude, and use the words "qualified youth." Most Upward Bound students in conventional terms would not have met either of those standards when they were first recruited. ` Mr. GOODELL. How much community action money is going into TJpward Bound? ` Mr. FROST. In fiscal 1967, $28 million and projected for fiscal 1968, $35 million. Mr. GOCDELL. Is this entirely at the option of the Community Action' Board to set priority in that area? Mr. FROST. No, sir. The university may apply to us directly or the, CAA may apply to us directly. Mr. GOODELL. Money out of Community Action title II funds. Mr. FROST. I did nOt understand. PAGENO="0268" 1106 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. GOODELL. Money coming out of title II, Community Action funds. Mr. FROST. Yes. Mr. GOODELL. I think the record indicates our basic agreement with the objective of Upward Bound. I think there is a legitimate question as to the best way to accomplish this, particularly coordinating it. You may be right on the technical language of the statute setting up Talent Search. There is a very real question, however, whether we should have two or three programs at the Federal level operating in generally the same area. As Mrs. Green indicated, the last 5 or 6 years on our Higher Edu- cation Subcommittee wehave been very much concerned about finding the youngsters who have a potential to go further in their schooling and college or other postsecondary education. A great many of the programs we have designed have been to find these youngsters and help them. It is not necessarily an argument for a separate program; the program objective itself isgood. Generally it would seem we would be better off with a well-coordi- nated program handled in one place, whether it is handled through the poverty office of OEO or through the Office of Education. Chairman PERKINS. Before you came in, Dr. Frost made it very clear that there was perfect cooperation with the Office of Education and there was no duplication, that they were in a better position to zero in on the "C" youngster in the disadvantaged areas of the colmtry. The so-called Talent Search program did not in any way conflict with this program even though it had in one sense the same goals. There is no doubt in my mind that in the long run this program will be transferred to the Office of Education. But I personally think that until we get this program off the ground and continue to zero in and improve the college attendance of the disadvantaged youngster with a concreted effort and in coordination and harmony with other poverty programs they are in a better position to do the job than the Office of Education and with the perfect cooperation existing with Talent Search it would be better to let both programs continue. Mr. GOODELL. Mr. Chairman, I have yet to witness an occasion where an administrator from a. Federal agency did come up here and say they never had perfect cooperation with other Federal programs. We have seen this in every area. Apparently in lleadstart they think they have perfect cooperation in their preschool programs. Some of us know this is not actually the case when you get down to the administrative level. I think the question is a very significant one here. If we concede that. this program should eventually be a part of a coordinated pro- gram operated by the Office of Education, why should it not be now? There is an interesting myth that is constantly proclaimed in recent years, that the only place you can start.a new program, the only place you can make a new approach, is in the Office of Economic Oppor- tunity, that somehow this is a greenhouse. Little seeds grow in the Office of Economic Opportunity. When you get the plants large enough so that they can survive, then we can transplant them to other agencies. PAGENO="0269" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF. 1967 1107 For some number of years prior to the creation of the Office of Eco- nomic Opportunity there had been innovation through other agencies of the Government. `We have seen some spectacular and rather sensa- tional and inspiring new programs started i~i these other agencies. I don't accept the immediate assumption that seems to be underlying everything that we talk about in the poverty program: that if we want a new approach it must come from the Office of Economic Opportunity. Mr. SIiRIvrR., I want to say that we don't claim that we have per- fect coordination in everything. So, since that has never happened before, I want to be the first to do it. Mr. GOODELL. You do claim perfect coordination, between Upward Bound and Talent Search. Mr. SHRIv1~1~. I wanted to cite one example where we did not claim perfect coordination but when it was not working we got rid of pro- grams without pressure from anybody. Title I-C we transferred out of our agency because we felt the coordination could be effected better over in the Office of Education. `We transferred that. Nobody forced us to do it. `\\Te did the same thing with the Small Business Administration loans. `We propose to do it with th~ Small Business Development Cen- ter. We did it with nobody forcing us to do it. Mr. GOODELL. There have been a number of examples in OEO where the evidence of lack of coordination has been so overwhelming that you came forward and admitted it. Mr. SHRIVEn. `We did come forward and admit it. We took the initia- tive of saying that somebody else should do it. Mr. GOODELL. You claim to have perfect coordination, so far as Up- ward Bound is concerned, with other Federal programs. Mr. SHRIvEn. Let me repeat what Dr. Frost said, I think before you came in; namely, it was like comparing apples and oranges at `this stage. Upward Bound is working with different clientele. He has ef- fected in addition to that, I believe, pretty good coordination with the Office of Education. But there is not a great need at this stage for elaboi ate coordin'~tion because the group he has been working with has been so untouched and nobody working in there at all that there, is no overlap now. Maybe there will be sometime in the future, but as of now there is not Isn't that right, Dick ~ If it is wrong, say it is wrong Mr.. FROST. That is right except in this one instance. Every Upward Bound graduate or alumnus will, of course, need financial aid. The Fed- eral financial aid programs are, of course, in the Office of Education. `We are working just this month' and next month very closely with those people, I must s~y very easily. There are very good' people over there. I find them very .easy to work with. We are putting the actual name' of such a youngster who graduated from an Upward Bound program at such an such' a place and has applied at such a.nd such a college and while he has been accepted he does not have enough aid or something. David Johnson from EOG in the Office of Education moves right then and there on that youngster's problem. Mr. GARDNER. I still don't seem to understand the answer to Mr. Goodell's question. . PAGENO="0270" 1108 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. 000DELL. Mr. Chairman, I will ask unanimous consent to proceed for 1 additional minute. Chairman PERKINS. Go ahead. Mr. GARDNER. I don't understand the answer you gave to Mr. Goodell's question. Could you possibly give a yes-or-no answer? Do you have excellent and perfect cooperation between the two de- partments? Mr. FROST. Depending on which adjective is going to be used- Mr. GARDNER. How about a simple yes or no? Mr. FROST. Is there good cooperation, sir? Mr. GARDNER. Yes. Mr. FROST. Yes. Mr. GARDNER. Is it perfect? Mr. FROST. No, it is a 60-cent cab ride over there to their building. So it is not perfect. Chairman PERKINS. Sargent Shriver, do you agree that you are in a better position to mount a massive attack on this youngster that you are presently reaching in the Office of Education and do you feel that until you get this program off the ground, it will take several years, just like we enacted the category approach under the NDEA bill several years ago and this year we have, abandoned the category approach altogether, as I understand. We will continue to concentrate until we bridge this gap where only 8 percent go to college of these "C" youngsters, or worse~ that you ai~e reaching at the present time in this great number of 1,400,000 poverty high school students. The Office of Education had never made any effort to reach t:his group prior to your Upward Bound program and were not success- ful in reaching this group, am I correct in'that? Mr. Srnrtv~. I don't know enough about the history of the Office of Education to be able to substantiate the last part of your statenient, Mr. Chairman. Many people on this committee know more about that than Ido. Chairman PERKINS. They have made on effort but never rnade a massive effort. `` . . . * Mr. SHElVER. So far as I know a. massive effort was not made. That is why we tried to inaugurate an effort, too, to reach these youngsters. I think the issue really is `as to whether substantial savings,, for example, to the taxpayer might be accomplished by such a transfer, whether substantial improvements in the program-maybe somebody should be running it better than Dr. Frost-I don't think so, myself, but I am happy to hear Congressman Dellenback speak so favorably about Dr. Frost. Dr. Frost has a man with him now, who is from western WTashington State University who has run a very successful program in Upward Bound. I think the leadership, the staff, the costs, the success, let me say the results, of the program are extremely encouraging. As a matter of fact, I would say they are verging on being ex- tremely successful. I don't see what is gained at this stage by a transfer because these fellows are. working on the poor and I think doing an exceptionally good job. Chairman PERKINS. You have perfect cooperation with the `col- leges and universities. PAGENO="0271" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1109 Mr. SHRIVER. S~ far as I know, for example-I don't know, maybe Dr. Frost can tell what the attitude of the colleges has been about the operation of the program here. Maybe they are complaining, I don't know. I haven't seen the complaints. Maybe they don't like the way we are doing it. Maybe they want to get out. I don't know. Chairman PERKINS. Do you want to comment on that, Dr. Frost? Mr. FROST. Not only do they not want to get out but the number ~ ho wish to apply rapidly increases I had the good fortune of having been a college official, myself, prior to coming here and having to put up with a fantastic, at least it looked to us, a fantastic array of prob- lems from Federal agencies. We have in this agency, with the strong support of Mr. Shriver, kept this a fairly simple business. We have very few complaints from the colleges and no college in Upward Bound has ever asked us to look into the college question of moving the program to any other agency. Chairman PERKINS. Mrs. Green. Mrs. GREEN. Let me follow through on something you said a moment ago, Dr. Frost. In regard to the financial assistance for the graduates from Upward Bound, what is the procedure you follow? You said you went over to the Office of Education. Will yOu take it from there? Mr. FROST. Yes, Mrs. Green. The youngster with the~ help of his local Upward Bound project director applies to colleges, usually nearby because it is costly to go elsewhere. Where they are applying we get reports. Where we notice a youngster who has been accepted, let us say, at Los Angeles State, but Los Angeles State has run out of its EOG money, we call David Johnson immediately, give Dave the name of the youngster and he, I understand, gets in touch with the `tdmimstration people there and the financial aid people there What we have not done, and I would appreciate your advice on this, what we have not done, either of us, is earmark any EOG money or loans or any Office of Education money specifically for Upward Bound youngsters. Mrs GREEN You gave me the example that they run out of EOG money You call Dave Johnson Dave Johnson does what ~ Mr FROST He apparently gets them some more EOG money that he has because of some unused money in California or unused money in other states He has flexibility to transfer unused money around Mrs GREEN You aie saying th'tt these youngsters, because of your progr'trn, have top prioi ity for work study funds `md EOG funds Mr. FROST. I would like to think he would respond the same way to a call from a financial aid officer of any college in the State. He and I have agreed to not try to earmark and thus give the top priority to a lot of Upward Bound youngsters. There are a lot of poor in America and only a few are Upward Bound. Mr. GIBBONS. Is it not more like following up an investment you have already made. You have made an investment of time and money in this youngster. it is not like there are surplus funds in one area and you transfer to another. It makes a good business sense to not let your investment fly out of the window because you have gone this far with it. That is about all that it really amounts to. Mr. FROST. That is because we are .talking about the youngster who has already been accepted and thus the investment is a sure thing if we can get him in. PAGENO="0272" 1110 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mrs. GREEN. Isn't that equally true with any youngsters in college? Isn't there an equal investment in a kid who is academically inclined and wants to work and has a; chance to graduate, whether he. comes from Upward Bound or works on his own, with his efforts and will- power without help from anybody. I am really interested, if I understand what you are saying, that the Office of Economic Opportunity does enter in and asks for con- sideration for Upward Bound. `We have an allocation of funds under EOG. We have an allocation under work study. Then we have the situation in which a Federal agency can call up a university and say, "We think special consideration should be given to this youngster." If that is the way we are going to operate the program it seems to me there are some real pitfalls because some other kids maybe deserve the same kind of break. Maybe they deserve, to have the same kind of person make a. call for them and ask special representation for them. I think it should be done by the university on the basis of what it. considers good for the kids. Mr. FROST. My guess is that the amount of money that Mr. Johnson moves around the universities for EOG's that go to Upward Bound students would be very small. Mrs. GREEN. My understanding of the legislation is that we never intended to have any surplus funds for anybody to move around at his discretion. But I will look at the legislation again. Mr. FROST. I would have to look at it again. My understanding is that if the University of Illinois does not use $100,000 of EOG it can be moved around. Chairman PERKINS. The usual provision of reallocation. Mr. SHRIVER. Could I make a comment, Mr. Chairman? Chairman PERKINS. Yes. Mr. SHRIVER. I would like to say from my point of view I agree with Mrs. Green. I do not think that a special office like Upward Bound or officials, down in `Washington or someplace else should be making a special plea on behalf of a special group. I think the college should make the grants as Mrs. Green said. I do think however with respect, to the kids in this income group today it appears from the statistics that Dr. Frost has that about 8 percent of such kids go to college now. Upward Bound is apparently increasing the total number of such kids at that income level by a guantum jump. It seems to me therefore that it might be advisable for this committee to consider whether or not there should not be more money available through this committee to Mr. Johnson over there for this k.ind of kid whether he has been in Upward Bound or not. I am not trying to get a special break, I think you are right, there should not be a special category. But when you have a big quantum jump apparently about to come into being, then maybe a larger amount of money is needed in Mr. Johnson's office to take care of this large number of poor kids who are competing for money. But I agree, I want to make it very clear at least I agree, that Upward Bound kids as compared to other poor kids should not get a special break. Mr. GOODELL. Who is the applicant for this money? PAGENO="0273" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1.967 1111 Mr. FROST. For the EOG money? Mr.GOODELL. No, the Upward Bound programs. Mr. FROST. Usually the colleges, either through a CAA delegate or straight to us. Mr. 000DELL. The college makes the application? Mr. FROST. Yes, sir. Mr. GOODELL. The grant is made to whom? Mr. FROST. Usually straight to the university where it was a d~le- gate to the CAA. Mr. 000DELL. Under our Opportunity Crusade concept of commu- nity action you would continue to have complete freedom in the com- munity action agency to allocate funds tO such projects as Upward Bound. But our special concern is the recruiting; the finding of these youngsters, and the special aid for these youngsters. Perhaps these are a legitimate responsibility of the community action agency. But when you give grants to colleges for programs of this nature, you then are involved with coordination of all your student aid type programs which today are handled by the Office of Education. It raises the serious question as to whether the best place of coordination is the Office of Education. Mr. DELLENBACK. Mr. Chairman, may I make a brief comment in view of the remarks that the chair made a few minutes ago before we get too far away from this inthe record? I would like to makea point that I don't think it is fair argumenta- tion, on this bill or other Federal programs, to continually say that because something has been done in recent years, and it was never done before then, that it is therefore automatically certain that, if we were to change the program now to a department that had not done it before, that program ~yould not be carried out effectively in that department. There has been a fundamental difference made by the recent massive infusion of Federal moneys I don't think it is a fair aigumentation to indicate `that OEO has done something in recent years with Fed- eral moneys that were not available before then and to state or imply that if :there were to be a transfer of this program to another Federal agency, because that agency did not carry out that program 10 years ago when this money was not present, it would not do it now. Our question is what programs need to be carried out and in the light of 1967, and 1968, and 1969 what agency of Government can best perform that task. I don't seek to push it any further at this point except to make that point. Chairman PERKINS. Mr. Hawkins. Mr. HAWKINS. Mr. Chairman, I think it is a very excellent program, but I think there are a couple of things wrong with it. One, the money is much too inadequate. Last week I had to go out to Los Angeles because I had received 300 letters from one school in my district which is engaged in an Upward Bound proje~t sponsored by the University of California at Los Angeles. There are 40 students in this program. I received about 300 letters from other students at this school complaining they were not being given the opportunity that the underprivileged kids were being given. It is a. very difficult. thing to go before a group like this and try to explain to them just what is happening. SO-084----67-pt. 2-1S PAGENO="0274" 1112 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Of course I had to indicate that I thought the Republicans should be persuaded, not this Congressman, but the Republicans should be persuaded, and also some Democrats to support the program and to put up more money. It. seems to me also the coordination is wrong in some of the areas. Of the three high schools in my district, only one is really participat- ing in the program. The other two are participating only inade- quately. It is very difficult to explain again to kids in one high school how they are getting all the breaks and the kids in another are not getting the breaks. There should be some type of distribution of money to the various high schools that are actually in the poverty areas. Then there is a third problem which I think is a much more difficult one. If eight out of 10 kids are not going to college, that some encour- agement should be given these young people to get them into vocational education or some other program. This. it seems to me, is the respon- sibility of the local community action agency to plan the. various pro- grams to meet the problem of the kid who becomes excited and thrilled at the chance to participate in a program to send him to college when lie probably should go into vocational education. Because he sees another kid obtaining the benefit of a program, lie wants what seems to be to him available. I think that sometimes we are making a mistake in trying to per- suade some of these people, some of these kids, to go into college who probably would be much better off to go into vocational education. This is a very pathetic thing, that merely because of the lack of co- ordination and the type of counseling that is being provided, and this I think is the problem of the local administration of the program, we are suddenly giving a lot Of kids the expectation that everybody is going to be college bound. Everyone wants it in a particular high school when probably this is not the best thing for that particular kid. I think that there should be another thought given to the way the program is being administered in some places, in certain parts of the country, and the lack of coordi- nation by the local community action agency in that the various Fed- eral programs that are available are not known by the various youñg~ sters in these schools and merely because one program seems to be dramatic and most exciting, every kid in the high school wants to get into that particular program and not into a program~ which is per- haps better suited for that particular kid. Chairman PERKINS. I agree with the gentleman that any lack of coordination of counseling or lack of complete counseling of students would be disappointing. But I would think if counselors are available that that examination must be made in the school system before the school system can make the recommendation to the college about admitting them. If not, they certainly would be derelict in their responsibility. I can see the gentleman's point. Mr. HAwKINs. I agree with the chairman. I also know that counsel- ing is not available to most of these kids. Most of them have not been counseled. Or if they have been counseled they have been counseled so inadequately by the counselor, who himself is so desperate to get kids PAGENO="0275" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1113 iii the various programs, he does not perhaps make every youngster aware of the very programs that are actually available. I think that should be the reason for the existence of the community action agency, to provide some kind of coordinated approach to the various problems from which youngsters suffer. If they are going to try to put the pressure on a Congressman merely to get every kid in a particular program without at the same time tak- ing into consideration that there are other Federal programs that also should be utilized, that they should make these youngsters aware of, then I think certainly this would affect the program. I don't want my remarks to be considered as criticism of the LTp~ ward Bound program. It is an excellent program. But the point is that not every kid is upward bound. Every kid is not college material. To put him into college when he should be put into some other program is not fair to the youngster. Every system that works that way certainly is defective. In this particular instance the Jordan High School that I visited in my district is sponsored by the University of California at Los Angeles. Obviously this institution is oniy interested in the college bound student. I am not criticizing the university but I am criticizing the sys- tem under which this result is achieved in that the high school in- volved should have sufficient counseling service or certainly the pro- gram should be better coordinated by the local community action agency so that all programs, andnot just one of the Federal programs, would be made available to the youngsters. Chairman PERKINS. Does the gentleman agree that over a period of years the educational agencies and colleges and universities through- out America and all the foundations throughout America have con- centrated on the cream of the crop for college training and that this is the first massive attack to do something about the million and a half poverty high school students where only 8 percent of them go to col- lege, and for that reason this program should remain in the Office of Economic Opportunity. Mr. HAWKINS. Yes, I think it should. I think there is a very good reason for it. That is that there are certainly many youngsters who should go to college. That 8 percent is certainly inadequate. There are many others. I am all for increasing that number in those poverty areas going on to college, those who are college material. But at the same time it seems to me that the "C" student who is really a "C" student who is thinking about getting into UCLA, for example, and making a success out of it and he is really a "C" student, and the better students have not been screened out, that we have done a disservice to this "C" student. He is not going to be able even to pass the entrance examination. He is going to flunk until he is put into what we call dumbbell English and he will be stigmatized. Mr. SHElVER. First of all, I would agree tremendously, overwhel- mingly with his statement that more high school counselors are needed, not only in those schools but in all schools. There has been a great drive on to do it but still there is not enough money at the local level. Secondly, I think there is the need for high school counselors to have a better understanding of the opportunities for poor kids and the places where poor kids should go, so inservice training in that re- spect is greatly needed. PAGENO="0276" 1114 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 19 G 7 However, the high school counselor job, as the Congressman knows, is not our job. There is a division 1 think in the Office of Education which is supposed to be doing precisely that. I would like to underscore what he also said, that his criticism is not directed at the Upward Bound program or OEO. The failure is that of the high school counselor to give good coun- seling which is not our job. The final point I would like to make is on this community action program budget, Congressman Hawkins'- Mr. HAWKINS. Before you continue with your statement, you stated this is not your job. I did not say it was. But it seems to me it is the job of the local community action agency. If, for example, counseling service is not provided which would in a sense separate the kids so that the kids who should really go to college is the one selected and the kid who should not is at least made aware of some other program whichi s more suited to him and therefore make this spot available to some other kid, maybe in the same high school to go to college, this certainly seems to me to be the type of coordination which is required at the local level by community action agencies. In other words, I think they need to be the ones to discover these little problems of administration and suggest ways of changing them. But if they sit by and see these things happening, that all these slots are being used for kids merely because this program is available, they are not trying to suggest what should be done for this high school student, then there it certainly seems to me a fault of the local com- munity action agency. I know that in this instance we are 3,000 miles away from Wash- ington and I am not trying tO blame on OEO but I am saying that the local community action is so busy playing politics and political in- trigue that they are not doing the simple job that it seems to me is re- quired, to go to a school like this and point out that your counseling is weak and something should be done about it. Maybe this is not the role of the community action agency. If not I would like t.o have a. comment from you. Mr. S~IvER. That is the point I was trying to comment about.. On that chart you will see about three-quarters of the way down where it says local planning and coordination $18 million, we are trymg to respond to your comment by pointing out that we are trying to beef up local planning and coordination of a local community action agency. That is why that figure is in there. Let me add one other point.. We have had unfavorable, so to speak, reaction when comimmity action people go to local school boards and start telling local school boards wha.t is the matter with the schools or counseling system. In fact they don't like us telling them that, at all. When a local com- munity action agency arrives at Watts and starts lecturmg the high school on what a rotten job the counselors are doing, it is not received with great praise and hurrahs by the high schools. Mr. HAWKINS. That is perhaps why some of the rest of us are doing it, because we can do it. Chairman PEiiXINS. Mr. Pucinski. Mr. PucIxsKI. If this Upward Bound program. as many of the other cornnmnity action programs, were transferred to other agencies, could this activity be conducted, in your judgment, with the same de- gree of the high ~ucee~~ you haie had? PAGENO="0277" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1115 Mr FROST May we let the lawyers speak to th'~t Mr. SHRIVER. We have proposed how we think it could be best done. We are here in suppoit of the administration bill De~ iations from it with respect to this do not have our support. We have done the best we can~ to write the kind of. `bill we think would operate the program the best. That is why it is the way it is. Mr. PUCINSKI. The reason I ask that is that there'would be a greater contribution of funds from local communities. The pie can be cut in only so many pieces and excellent programs like this would suffer. Mr. `SHRIVER. From my' own point of view I think it is a serious drawback of the program if I understand correctly, Opportunity Cru- sade proposes that the local share again has `to be substantially in- creased under that bill.'' ` ` `" ` ` I say that because most local jurisdictions and Los Angeles I think would be one, feel' that local taxes are as high as they possibly can be, especially the local property taxes. ` ` I struggled with that for 5 years when I was on the Board of Edu- cation of Chicago. It was my belief we ought to be' spending a great deal more money on education in Chicago then and it probably still is true but the local tax base can't take it. Or at least they claim they can't take it. Therefore if you raise the burden on State and local government for programs like Upward Bound by raising local contributions I personally think it will hurt the programs. Mr. PuoINsKI. Thank you very much. Chairman PERKINS. Mr. Gurney. Mr. GURNEY. Thank you, Mr. Chairman. I am interested in this 8-percent figure that we have been talking about a good deal. As I understand the testimony, 8 percent now of the children from poverty income families go to college, is that right? Mr. FROST. Yes, sir. Mr. GURNEY. While that is a small percentage unfortunately it does amount to a rather sizable figure. If you multiply this by your figures of 1,400,000 as a matter of fact, it is 112,000 students who apparently are going to~ college this year from this group. Obviously they are getting money from other resources than their own. I suppose a great part of the money also comes from the Federal Government, the Federal education programs, and again, I suppose, from the Office of Education. Now you have made a heavy argument here that this particular program is better handled by your agency because you know the problems better. Let us admit for the purpose of argument that that is true. Why should not all of the moneys that are now handled by the Office of Education to help out these 112,000 students, or a great per- cent of that number, be transferred to the OEO program? Would you advocate that? Mr. SHRIVER. No, we don't. As a matter of fact, 2 years ago we trans- ferred money~ Mr. GURNEY. Why wouldn't you, if you can handle it better? Mr. SHRIVER. We don't handle the money. That is not what this program is. PAGENO="0278" 1116 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. GURNEY. Don't you handle Federal funds ? Mr. SHRIVUR. What you are talking about is the financial aid money after the youngster has been accepted into a college, who should handle that. I said a little while ago that we think the college should handle that. Upward Bound is not in the business of trying to finance the freshman year or sophomore year. `What we are in the business of is finding poor kids who are pet- forming badly, academically speaking, changing their motiviation and getting them into college. Mr. GURNEY. If your thesis is true that you can handle these pro- grams better because you are better acquainted with the poverty group, and let us admit that for purpose of argument, I don't see why it does not follow that all college, programs for students of the poverty group that are financed with Federa.l funds should be. handled by the war on povert.y program and not by the Office of Education. Does the child's personality change when he gets Out of high school and goes on to college, having come from a poverty group? Mr. SHRIVER. Did you say, does it change? Mr. GURNEY. It must be changed if it is handled from some other office t.han yours. Mr. SHRIVER. As a matter of fact it does change. Mr. GURNEY. In other words, there is a great cleavage and great change from high school tO college and therefore you should handle the high school programs but the Office of Education should handle the college programs. Mr. SHRIVER. I thought you said the student personality and moti- vation. Is that what you said? Mr. GURNEY. The whole point here is if your agency should handle it, it is because it has a better expertise, it can do it better than the Office of Education because it is more acquainted with the special problems of the poverty group. I say if the argument is true and I am not saying it is nOt, I am admitting for the purpose of argument it. is true, it seems to me there should be a.carry through by the Office. of Economic Opportunity too to handle this special poverty class group that. is going on to college. Mr. FROST. Sir, I think we are saying that this particular kind of poverty high school student is more reachable by the machinery that OEO has. That does not mean all poverty students. Mr. GURNEY. Let us pursue that because that is the next thing I am coming to. I think every man on this committee, Republican. Demo- crat, conservative and liberal, agrees with you that we want. to help these people. `What we are not convinced about is that they are in a special cate- gory that only yOU can do the job and somebody else can't. Where are the differences in the students who are handled in Upward Bound and go on to college and those of this 112,000 that go on to college from the same income group? Mr. SnRIv1~R. `We ought to clear up that 112,000 figure. for just a second, please. Mr. GURNEY. Isn't that accurate? Mr. LEVINE. I don't know where you got the figures. Mr. GURNEY. That was testified to earlier this morning by Mr. Frost.. PAGENO="0279" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1117 Mr. LEVINE. 112,000 poor kids? Mr. GURNEY. No. That is my figure. And 8 percent of 1,400,000. Mr. LEVINE. There are about 500,000 poor kids each year, in that general age range. Eight percent of 500,000 is 40,000. I don't know the source of the 112,000. Mr. GURNEY. It is your figure, 1,400,000 in this group. What does the figure mean? Mr. LEVINE. We may have had a figure in the college age group. There are about 500,000 in each year's age group. Eight percent of 500,000 is about. 40,000. I am trying to figure out-I don't know where the other 112,000 came from. Mr. GURNEY. The figure of 112,000 is 8 percent of 1,400,000 which is the figure you furnished or Dr. Frost did earlier in the testimony. Mr. SHRIVER. That figure has not been furnished with respect to Upward Bound. Mr. GURNEY. This is the whole poverty group in the country. Mr. SHRIVER. The only time that a figure like that- Mr. GURNEY. Excuse me, go ahead. Dr. FROST. Sir, I would like to answer your original question if I may because it is a very important question. I would like to get the distinction clear. The non-Upward Bound youngsters who are eco- nomically poor, who go on to college, in my judgment would be high- performing youngsters so good that colleges would give their own re- sources and scholarships and so forth to them. The Upward Bound youngsters on the other hand, three-quarters of them have C averages or worse. in high school. This is not. the conven- tional college going population. I think OEO can reach that strata somewhat more effectively. That is all I think I have said here. Chairman PERKTh s The gentleman fi om WT'tslnng~on, Mi Meeds Mr. MEEDS. Thank you, Mr. Chairman. Fiist, may I compliment Di Fiost on his piesentation of testimony and the operation of an excellent program. I also would like to com- pliment you on your choice of colleges. For the record, Mr. Thomas Billings, who has become Deputy Director of Upward Bound, is a very esteemed member of the academic community in Western Washington College in Bellingham, Wash., where he has operated for over 2 years now an excellent Upward Bound program that has achieved phenomenal results in our area. The first year, of the 50 people that they took from the local area in the group of people we are talking about, 45 of 50 returned and in the second year 49 of the 50 returned. I am very much interested to see that this program is continued and would like to point out or rather ask in this instance i~ there is not a considerably higher demand or request for funds than we have been able to meet so far. Is that not correct,Dr. Frost ~ Dr. FROST. Yes, sir. Mr. MEEDS. The figures I have are that there are 248 programs operated currently and that in this fiscal year you had to turn down 125 colleges or universities iequesting funds for programs bec'muse you did not have them. Dr. FROST. Yes, sir. PAGENO="0280" 1118 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. MEEDS. So there is a vast area of need here. Is that right? Dr. FROST. Demonstrated need, yes. Mr. MEEDS. I would like to go back into the mechanics of this program a little bit. to see if we can clarify some of the problems we seem to be getting into, such as whether the Upward Bound program ought to be operated by the Office of Education or the Office of Eco~ nornic Opportunity. First of all it is my understanding that there are two ways that these plo2ilms `ne irnti~tted One, bs the loc'd college oi iirn~ersit'~ who submits an application; is that right? Dr. FROST. Yes, sir. Mi MEEDS Oi two from a loc'il community `i~ctiou bo'nd working through a local college or university? Dr. FROST. That is right. Mr. MEEDS. There are any other ways? Dr. FROST. No. Mr. MEEDS. So that in contrast to Talent Search which is a program operated from the Office of Education we have an additional local factor here which . is not present in the Talent Search, it seems to me. You can correct me if I am wrong. It seems to me that in this pro- gram you should have a working relationship between the local com- munity action program and the local college or university. Is that right? Dr. FROST. That is right. Mr. MEEDS. Is that such a working relationship available under Talent Search, do you know? Dr. FROST. I do not know. My understanding is that a college ap- plies to Talent Search directly without reference to the local CAA. Mr. MEEDS. As a matter of fact, it is generally and perhaps in all instances, I don't know, a contract between the college or university aiid the Office of Education? Dr. FROST. That is right.. Mr. MEEDS. Not involving the local community? Dr. FROST. That is my understanding. Mr. MEEDS. So from this standpoint the program we are talking about, Upward Bound is more local in nature than is Talent Search, isitnot? Dr. FROST. On the surface the Upward Bound program clearly and formally involves more local resources. Mr. MEEDS. Aside from the differences in the program that you described as apples and pears, to be consistent~ those people who are asking for local control and local autonomy, it wOuld seem to me~ should be more in favor of Upward Bound types of programs than in favor of Talent Search programs, where there is more local control, more local working between the community action board and local groups and college or universities. Am I being inconsistent here? Dr. FROST. No, sir. I could not compare these programs because I can't compare apples and pears and still can't. I think these are differ- emit programs. One is a kind of broadcasting program. It is very important that poverty high school youngsters under- PAGENO="0281" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1.9 67 1119 stand that there are Federal scholarships. It is very important. Talent Search does that and in my views does a good job at that. But Talent Search does not beef up any youngster who is not going to make it in college at the rate he is going. Mr. MELDS. It does notdo anything more than provide him with the inforthation and the counseling and pointing him toward this without involving him in the actual program. Dr. FRosT. That is right. Mr. MELDS. Do you have any idea of how many or what percentage of your programs invOlved in Upward Bound are over $100,000 and what percent are under? Dr. FROST. I would have to guess. The average is about 88,000, or 90,000 this year. .But there~ must be a goodly number that are over 100,000. Mr. MEEDS. Would you say 25 or 30 percent are over Dr. FROST. At least. Mr.. MELDS. Are you aware that under the Office of Education the Higher Education Act from which Talent Search is presently funded there is a limitation of $100,000 on any program under Talent Search authority, sir'? . . . . . . . Dr. FROST. Yes, I am. . .` Mr. MELDS. So if we were to transfer this program without. making any further provision for the amount tha.t .a sponsor could spend, you would rim into a limitation that would eliminate at least part of- 25 or 30 percent of the programs? Dr. FROST. It. would be a severe limitation in maiiy cases. Mr. MELDS. Thank you, Mr. Chairman. Chairman PERKINS. Mr. Scherle. . ` . Mr. SOHERLE. Dr~ Frost, can you tell me how many branches and twigs funnel out from the trunk of this one single program? Dr. FROST. How many bra.nches and twigs that funnel out from one trunk' of this program? I don't quite understand the question. Mr. SOJIERLE. It is very simple. We are in this jigsaw beginning with Upward Bound, now how many other programs subservient to this but affiliated with yours do you control? Dr. FROST. We don't control a.ny programs. We make grants to uni- versities and universities may have any number of complementary activities. I don't know about that. Mr. SOHERLE.. `You mean there' are no other programs affiliated with this Upward Bound except Upward Bound itself? There are no subprograms of any kind? Dr. FROST. No sir. . Mr. SOHERLE. Is this affilated with the CAP~ program then, the community action program'? ` ` ` Dr. FROST. Very much so. . ` Mr. SCHERLE. But it is not a separate entity? ` Dr. FROST. Well, it is one `of `the national emphasis programs of the agency and it is related to the CAP's at the local level. `Mr. SCHERLE. How many various programs, and I mean overall in the OEO, are financed, handled, controlled by this program? I am talking about all those. you have listed' and many more that you probably don't have listed. PAGENO="0282" 1120 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 iDr. FROST. lou mean by community action? Mr. ScHERLE. I am again talking about everything. Can you just give me a figure ? Mr. BERRY. You mean the figure in dollars'? Mr. SCHERLE. No, I want to know the number of programs that you are involved in, in welfare, in school, in Upward Bound, in com- munity action, and you name it. Mr. BERRY. In response to community planning and programing we fund, as national em~hasis programs, Headstart, Upward Bound, Comprehensive Health services, Legal Services. Those are the four major emphasis programs. Mr. SCHERLE. This is a question that I asked Dr. Frost. How many bramiches from those four do you have? Now you have the MFY, which is one and you have a multitude of others that are individual programs and under one unit. How many of those in total do you have? Mr. BA~nY. We fund 1,050 community action agencies throughout the country for a variety of programs with categories of service-as I said yesterday the total aggregate of variation of programs in the area of adults, young people, old people, families totaling some 15,000 different components of programs which local communities con- ceive as having a meaningful attack upon conditions of poverty. They are funded through funds made available by Congress under title IL the community action program. Mr. SCHERLE.. My next question is, how many high school students have participated in the Upward Bound program so far? Dr. FROST. There are currently 20,000 in the program, sir. There will be 22,000 this summer. There have been in 1965, 2,000. Mr. SCHERLE. How many are presently enrolled in institutions of higher learning? * Dr. FROST. In the 1965 group a thousand have graduated, 800 went on to college. In the 1966 group, the high school graduates in that group were about another thousand and 760 of them went on to college. Mi~1 SCHERLE. What is the percent of dropouts?. Dr. FROST. Dropouts have been 4 percent; Mr. SCHERLE. Mr. Chairman, without utilizing any more of my allotted 5 minutes- Chairman PERKINS. Your 5 minutes have expired. Mr. SCHERLE. Then I have a point of inquiry. Mr. Chairman, could you let us know what procedure will be used for the rest of the morn- ing so that I can try to put my questions to fit into this jigsaw puzzle? Chairman PERKINS. We will complete the interrogation of the wit- ness and then follow through with Headsta.rt. Mr. BERRY. Mr. Chairman, I wonder if I could get on the record a clarification of the question asked by Congressman Gurney about the number of poor involved in the universe of poverty. Chairman PERKINS. Without objection go ahead, before Mr. Gib- 1)flP~ commences. Mr. BERRY. The 1.400.000 or whatever figure you quoted is the fig- ure of to+nl high school students that are within the category of poverty. That. is from grades 9 to 12. The clientele to be served by PAGENO="0283" ECONOMIC OPPORTUNITY ACT AMENDMENTS~ OF 1967 1121 Upward Bound are t.ho~e students within the grades, usually the junior and senior grades, so that they would be subtracted from the 1,400,000. `We estim'ite that there aie of the high school gr `iduates ~ ho ~ ould he going on to college and would be on an annual basis involved as the target area for Upward Bound, 870,000. The 8 percent therefore would be applied to the 870,000 or there would be a universe of 104,000 who might be going on to college, that 8 percent. Mr. GURNEY. Thank you, Mr. Chairman, if I can comment, that is exactly what I understood the figures to mean. This is the point I was trying to make.. There were a very considerable number of poverty war students going on to college by the very definition of witness Frost today. These scholarships or grants are being handled by the Office of Edii cation. The argument makes no sense to inc that poverty war progranis can handle this Upward Bound better than the Office of Education. rfhe argument defeats itself. Either it ought to be in the Office 01 Education or the programs in .the Office of Education dealing with students that. go on to college from this group ought to be in the poverty war program. I don't think the argument is a sound one. May I ask one more question,. Mr. Chairman, that I think has some rele~ `tncy in `iiew of some of the `tnswers Chairman PERKINS. Is there objection? The Chalr hears none. Mi GURNEI One thing did evolse at the end of our colloquy, Di Frost ~`i lien you i eplied to my question of wh'it w as the difference between the kind of students that you are handling and the other kind of students that go on to college from the poverty war, class. You said your . students were in the lower grades, I think grade C you stated. Then if I understood you correctly you stated that this other segment of the 104,000 that went on to college v~ `is a difference between kmd of student md if you did not s'iy exceptional students I understood that would. be duplication. Is that. right? Di FROST This is my impression `is `i college official `md college te'mchei `Well when the pooi go to college and get financi'ml `mid it is bec'muse they `a e demonstrably good students Mr GUR~FY Then I am simply going to `msk-'mnd I am sure th'tt is your honest. impression-then I am going t.o ask where did you get this figure and is this impression based on fact? I recall from my own college experience many of the boys and girls attending college when I was going certainly from the poverty class and they were not necessarily Phi Beta Kappa, A or B students. I don't. think the statement is a correct one and I wish you would furnish for the record in what college level group, the percentage there in that class, A or B or otherwise, these other poverty stricken children are. Dr. FROST. We will do that. Chairman PERKINS. It may be submitted for the record. (The document referred to follows:) After an extensive search for statistical data which would' respond to Con- gressman Gurney's question, we must report that such `data ar,e not now available. We were unable' to find any national studies of `the college grade records of poor yOungsters. Individual colleges were unable to furnish anything beyond "impres- sions," since they do not typically keep records, of correlation between college PAGENO="0284" 1122 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 19 67 grades and poverty. The comments of College Admissions officers and registra- tions reveal: a. most poverty youngsters who are admitted to college have records of high academic achievement in high school, and b. that such youngsters continue this achievement once they are admitted to college. However, these are merely "impressions," registered by a sample of College Admissions officers and registrations. They fall short of hard data and conclusive evidence. Similarly, the Office of Education has rio such data. A survey of research abstracts in the Encyclopedia of Educational Research failed to provide any substantial data on the college grades of poor students. That such data are not now available does not mean that it could not be developed, but such development would require a carefully developed research design, financing, and time. Chairman PERKINS. Mr. Gibbons. Mr. GIBBONS. Dr. Frost, what grade level do you think is the best grade level to pick up the so-called Upward Bound students? Dr. FROST. Our experience, sir, as you know, is brief but our judg- ment is that about the 10th grade is the best age level to pick Up- ward Bound students. We have found with one or two groups, partic- ularly American Indian youngsters, that you probably have to start earlier than that. They have staggering dropout rates that begin very e'irlv in high school. Mr. GIBBONS. Actually you feel for most students you need them for at least 2. or 3 years in order to give them additional education and additional motivation, is that right? Dr. FROST. That, is right. Mr. GIBBONS. As I. understand the characteristic that you are :look ing for in an Upward Bound student, first of all this student is fiom an economically disadvantaged family and secondly he is from some background, while we know all poor people are not unsuccessful, he is from an unsuccessful family as well as a poOr family. Is that right? Dr. FROST. That is right. The description of the target is a student who has potential for success in college but whose present level of achievement and motivation would seem to preclude his going. Mr. GIBBONS. These are students who would have been making low academic marks and probably would have scored pretty low on the SAT and SCAT tests, or things of that sort. Is t.hat right? Dr. FROST. No doubt about it. Mr. GIBBONS. They would generally be overlooked in the hustle and bustle to get the children off to college, isn't that right? Dr. FROST. That is true., Mr. GIBBONS. The ingredient you seek to add is I think something that Mr. Quie touched on here. I know in my own area the high schools are large, they are rather impersonal, the schoolteachers really have little opportunity to get to know the family background, the economic background of the student because they see so many students every day, they are teaching perhaps a student for maybe 5 days a week, 1 hour a day, in' a class of 30 to sometimes ~ in my own area, and they really don't know the students as well as they perhaps do in a smaller area like Mr. Quie's high schools are. W1iatyou are seeking to add, as I understand it., is a' personal touch through your community agencies, through yOur outreach work. You are trying to tie together n'ot only economic poverty, the social poverty from an unsuccessful family, but you are trying to get the PAGENO="0285" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1123 pci son'd touch of kno'~i ing th'tt this child has perhaps the unrecog nized potential of succeeding. Am I correct in that? Di FROST Sir, for most of these youngstei s college has not re'dly been in their universe Their paIents did not go Their older siblings did not go. It was not part of their expectations. For the first time then it becomes.a part of their expectations. Now they ha~'e a ~eiy diffeient target to shoot for Mr. GIBBONS. Mr. Shriver spoke earlier about the quantum jump that we are making in the category area that is going to require addi- I ion'il infusion of economic opportumt~ gi ants Could you give this comimttee any ideas as to what you think this qu'tntum `ump may be, tue size of the quantum jump ~ Dr FROST We have now 6,000 Upw trd Bound seniors coming `iround the track Next yeai it w ill be 10,000 coming around the track The pool th'tt is out there in m~ judgment is big and could be reached I have enormous confidence that the American higher education system if supported could reach this pooL Mr. GIBBONS. You ~re talking about a jump of 700 to 1,000 up to 6,000, up to 10,000 and that type of progression? Dr. FROST. That is right. Mr. GIBBONS. Those are all the questions I have. Chmm'in PERKINS Mi Dellenback Mr. DELLENBACK. Mr. Chairman, thank you. Time runs. So let me try to make these short questions, Dr. Frost. I hope I will get short answers to them. Do you have, a figure as to the average per dollar student investment? Dr. FROST. Yes, the Federal per-student cost per year is'$1,250 this year. An estimated $1,150 next year. Mr. DELLENBACK. So to take a student through Upward Bound* from beginning to end, how much would you spend in 2 years? Dr. FROST. Two years and a summer. So two times $1,250 plus about $800. Mr. DELLENBACK. That is about $3,300. Dr. FROST. About $3,300. Mr. DELLENBACK. Do you have any studies that have been giving you information as to where you get any given percentages of your enrollees, that is, from high school counselors, from community action programs, or anywhere else? It has been indicated that one of the values to being under CAP was that this is the, source of contact with the students. Are actual selections made by colleges or universities? Dr. FROST. That is right. Mr. DELLENBACK. Do you have any background studies as to where they got their contacts? Dr. FROST. We have a sample from 1966. It is a questionnaire that every Upward Bound student is answering this month as to where he first heard about it. Mr DELLENBACK When that is forthcoming will you see that we have it for the record please ~ Dr FROST We will be glad to do that (The information requested follows:) ~ear1y four out of fi\ e Lpward Bound students fist heard about the program through school contacts: 47% from a school counselor, 16% from a teacher. 10% from a principal and 8% from a school friend. PAGENO="0286" 1124 E~ONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Although most of their parents looked favorably upon their being enrolled in the special academic program (80% according to the students), their neighbor- hood friends were muich more skeptical (only 43% were reported to favor stu- dents' ~oiuing the program.) Source: Questionnaire distributed by OEO to Upward Bound Project Directors, combined with data from the Syracuse University Youth Development Center. Mr. DELLENBACK. Do you have any record at the moment as to the college performance of the Upward Bound students through the first year? I recognize we can't talk about postcollege bnt do you have any sound figures as to what has happened with this first group? Dr. FROST. I have it in the 1965 group. Mr. DELLENBACK. May we do this in order to conserve time? May we have that for the record so that we can study it? Dr. FROST. Yes. (The document referred to follows:) -. [Release at lpward Bound press conference, Nov. 30, 1966] 80 PERCENT OF FIRST UPWARD BOUND GRADUATES CONTINUE EDUCATION Early indications of Upward Bound's success in reaching and motivating impoverished high school youngsters are that they respond as if the flood gates to knowledge had just opened, but the scars of povert~' will not be quickly erased. Dr. Richard T. Frost, OEO director of Upward Bound, projects that the several hundred thousand high school youngsters from impoverished back- grounds who now go to college at a rate of 8% could be motivated through Upward Bound to go at a rate of over 50%-higher than the college rate for all Americans, rich or poor. Data from six of the first 18 Upward Bound demonstration projects show that 80% of the students continued their education, with 18% going on to college. Only 12 I)erce1~t of these Upward Bound alunmi dropped out during their freshman year of college, less than half the customary dropout rate for such students. (Previous studies put the dropout rate in predominantly Negro col- leges at one-third the freshman class.) Although they were having a tough time competing academically, those students from the lowest economic status were those who most often improved their grade level in the second semester. Also, 20% of the Upward Bound students in college improved their academic standing in the second semester over the first semester. Psychological testing of a representative sample of the 20000 current Upward Bound enrollees shows a definite improvement in self-esteem and self-evaluation of ability, motivation for college, self-responsibility and interpersonal under- standing. But attempts to measure a change in the student's alienation from society and positive plans for the future showed no significant change after a summer Upw-ard Bound experience. Student ratings of the Upward Bound programs indicate that low- maturity students need structured educational settings; whereas high maturity students perform best in a more flexible classroom environment. The teaching techniques that appear to produce the best results are: small classes and discussion groups where individual attention can be given and all students can be stimulated to participate; teachers who like and respect students who present a challenge and thus instill a sense of striving among students; almost full-flme engagement in the academic process, with informal discussions, movies, cultural activities, individual tutorial sessions with college undergraduates, and evening session, all geared to stimulate the intellect; broad academic and personal freedom. with the student society imposing the rules; and use of teaching materials that are relevant to the type of student in the class- room. "These techniques have been part of the national rhetoric among educators for a decade or more, but have been rarely practiced, as a package, anywhere," said Dr. Frost. PAGENO="0287" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1125 "Why not," asks Dr. Frost, "teach probability theory in mathematics via poker odds; and why not explore the fascinating process of genetics in a biology class by asking, the question: . `What color would the American people be if Negroes and,whites intermarried at random'?" "We are not discovering spectacular `new' techniques in Upward Bound," says~ Dr. Frost, "be we are proving that a lot of lip-serviced teaching principles really do work when put into operation." .. . . `VI &JORTT'I OF SAMPLF UPWARD Boi "~ D STUDE"~ TS I'\IPROVFD ATTITUDE A~ B MoTIvATION FOR COLLEGE & 10% repiesentatn e sample of Upw ard Bound students tested at the be ginning and end of the'summer phase of the on-campus program showed signifi- cant improvement in six psychological measurements: 1. Motivation for college; 2.' `Possibility of graduating from. college; 3 Self e~ aluation of intelligence 4 Self responsibility 5. Interpersonal understanding; 6. Self-esteem. The students, in 21 of the total 220 programs, were selected to, represent all urban and rural, small and large Upward Bound projects, and all racial and ethnic background~. `The 21 , programs were chosen as a representative sample to evaluate the initial effect of the Upward `Bound experience on the attitudes and motivation of the high school students enrolled in the pre-college program last summer (1966). The study was performed by Syracuse University's Youth Development Center under contract to the Office o'f Economic Opportunity. Dr. David E. Hunt is director of the Youth Development Center's continuing evaluation of Upward Bound students. Because the student's attitude toward college was so important, this factor was measured both directly and indirectly. The direct score, "Possibility of graduating from college," was based on the student's rating of this possibility on a scale ranging from "not possible" to "extremely possible." The students' own estimation of ability to graduate from college increased in 16 of the 21 programs. The indirect score, "Motivation for college," was based on the number of students who mentioned college when constructing a story about future plans from scratch. The number who did mention college increased in 20 of the 21 programs between the beginning and end of the summer Upward Bound pro- grams. Students' self-evaluation of intelligence, based on a rating of "Myself" on a scale ranging from "dumb" to "smart", increased in 18 of the 21 programs. Self-responsibility (or internal control) scores, which were based on a scale of items such as "Becoming a success is a matter of hard work; luck has little or nothing to do with it," increased in 20 of the 21 programs. Interpersonal understanding scores, which were based on a scale of items such as "The' best way to understand a person is to put yourself into his shoes to see how he looks at things," increased in 17 of the 21 programs. Self-esteem scores, which were based on items such as "I `feel that I have a number of good qualities," increased in 16 of the 21 programs. Scores on an alienation measure, using questions as "These days a person doesn't know who he can count on" show-ed no significant change. (It w-as ex- pected that Upward Bound would cause a decrease in alienation.) An attempt to measure the students' planning for the future, through such questions as "People should just live for today and let tomorrow take care of itself" also showed no significant change. Apparently, it takes longer than one summer to make significant inroads into these attitudes. UPWARD BOUND PROGRAMS RATED BY STUDENTS Highly structured versus flexible programs were measured for effectiveness in a questionnaire answered anonymously by students at the end of the summer PAGENO="0288" 1126 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 phase. The attempt was not to measure which programs are "best," but rather "which programs are more effective with certain kinds of students?' This test, plus previous research, strongly indicates that low maturity stu- dents, need structured educational settings; whereas high maturity students perform best in a more flexible classroom environment. Thus, the greatest increase in positive attitudes about Upward Bound oc- curred in structured programs with predominantly low maturity students, and in flexible programs with predominantly high maturity students. Program flexibility was measured in the target programs by students' re- sponses to questions such as: "When the students make suggestions, the pro- gram is changed; yes or no ?" To investigate the differential in program effectiveness, the 21 target pro- grams were classified according to: (1) predominant type of student (low ver- sus high interpersonal maturity); and (2) type of program approach (struc- tured versus flexible). Students in "matched" programs (structured/low maturity and flexible/high maturity) also showed the highest increase m five of the six student measure ments motivation for college possibility of graduating from college self evaluation of intelligence self responsibility and inter personal understand ing. Self-esteem was the only measurement that did not appear to have a cas- ual relationship. In the five student measurements of attitude and motivation where differen- tial effectiveness was present, neither flexible nor structured approaches, show any general superiority. It is only when the degree of "matching" student and program is pinpointed that program effectiveness can be determined. With this kiml of information on each program, .OEO can advise Upward Bound projects on ehanges iseeced to better reach their particular student body. Source: Syracuse University Youth Development Center. PROFILE OF 20,000 UPWARD BOUND STUDENTS A. large percentage of the 20.000 high school students enrolled in Upward Bound in the summer of 1966 come from families below OEO's minimum poverty level; and are severely handicapped culturally when compared with the U.S. high school population. Indications of the level of deprivation of the more than 20,000 students en- rolled in Upward Bound in the summer of 1966 are- Mean family income: 83.501.S6 (OEO considers $4,000 a poverty level for family of 6). Size `of family: 53% have 6 or more members in a family. Parental guidance: 55% of `students were living with only one parent (30% living with mother) or with no parent. Comparison with a national high school sample graphically points up the deprivation of Upward Bound students: [In percent] Upward bound U.S. high ` school students 6 toS members in family - 9 or snore members in family Living with both parents Living with mother only Education of parents: High school graduate: ` ` Father Mother Post high school education: Father Mother 33 20 ` 30 ` 31 43 ` 12 14 25 5 82 8 ` 48 25 23 PAGENO="0289" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1127 Older siblings of Upward Bound students have a high secondary school drop- out rate and extremely, low college attendance record. Only 5% of older siblings are college graduates, while 30% of the older brothers, and 26% of the older sisters have already dropped out of school without a high school diploma. STUDENT DATA FROM UPWARD BOUND 1. Total number applying to the 224 Upward Bound project schools: 34,529. 2. Total number enrolled: 20,139. 3. Mean age: 16.1 years old. 4. Sex distribution: Percent (a) Male 48.6 (b) Female 51.3 5. Ethnic composition: (a) Caucasian 33.0 (b) Negro 51. 9 (c) American Indian 4.1 (d) Spanish American 7.3 (e) Other (e.g., oriental) 3.4 6. Grade level completed upon entry to program: Mean grade level completed, grade 10. 7. High School grade point average upon entry to program: Mean Grade Point Average 2.46 (C) (73% C or lower). Only 43% were in an academic course in high school. 8. Total number who had "dropped out of high school": 370. 9. Total number entering from Job Oorps Centers: 114. Upward Bound students were drawn from the largest metropolitan areas (40% lived in cities of over 100,000 population;) and the most isolated rural regions (25% lived in communities with less than 2,500 population.) Most at- tended densely populated high schools, with 55% reporting their high school en- rollment in excess of 1,000 students. Eight percent attended schools with fewer than 300 students. Nearly four out of five Upward Bound students first heard about the program through school contacts: 47% from a school counselor, 16%, from a teacher, 10 from a principal and 8% from a school friend. Although most of their parents looked favorably upon their being enrolled in the special academic program (80% according to the students), their neigh- borhood friends were much more skeptical (only 43% were reported to favor students' joining the program.) Source: Questionnaire distributed by OEO to Upward Bound Project Directors, combined with data from the Syracuse University Youth Development Center. PROFILE OF UPWARD BOUND PROGRAMS 1. Total number of Upward Bound projects 220 2. Total number of students 20,139 3. Total community action 205 funds in fiscal 1966 $25, 949,165 4. Federal cost per program $117, 096 5. Federal cost per student funded $1, 243. 06 * 6~ Range of Federal grants: (a) Smallest (Princeton) $14, 550 (b) Largest (Texas SOuthern) $410,872 7. Average enrollment per program (students) 88.22 8 Range of enrollment (a) Smallest (Princeton had 60-we financed 12) 12 * (b) Largest (Texas Southern) .337 9. Location of programs: (a) In public institutions of higher education 114 (b) In private institutions of higher education 96 (c) In public secondary schools (BIA school in Alaska) 1 (d) In private secondary schools 9 80-084 0-67-pt. 2-19 PAGENO="0290" 1128 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 PROFILE OF UPWARD BOUND STAFFS 1. Total number of teaching staff_ 2,803 (a) Colleg-level teachers 1, 101 (b) Secondary-school teachers 1,484 (c) Teachers from other sources 218 2. Total number of professional staff other than teachers 999 3. Total number of nonprofessional staff other than tutors 634 4. Total number of tutors 2,748 (a) Mean age of tutors: 20.8 years old (b) Median grade level completed: 15th grade (college junior) (c) Sex distribution: Percent - (1) Male 50. 3 (2) Female 49.6 (d) Ethnic composition: (1) Caucasian 64.5 (2) Negro 30. 9 (3) American Indian . 7 (4) Spanish American 2.8 (5) Other 1.0 5. Ethnic composition of total Upward Bound staff: (a) Caucasian 67. 5 (b) Negro 27. 8 (c) American Indian . 5 (d) Spanish American 2.4 (e) Other 1. 6 6. Instructional ratios: (a) Teacher: Student ratio (not figured in "full-time equiv- alent") 1:7 (b) Tutor: Student ratio (accurate) 1: 7 PROFILE OF UPWARD BOUND COMMUNITY ADVISORY COMMITTEES. I. Total number serving on advisory committees 3,451 2. Ethnic composition of committee members: - Percent (a) Caucasian 61.4 (b) Negro 31.1 (c) American Indian 2.3 (d) Spanish-American -~. 4.0 (e) Other 9 3. Percent of committee members who meet OEO poverty Criteria 33.2 4. Sex distribution: (a) Male 67.8 (b) Female 32. 1 Source: Questionnaire distributed by OEO to- Upward Bound project directors. UPWARD BOUND STUDENTS COMMENT I m Thrilling Proud to be an American A student, whose father is disabled and whose mother received practical nurse training through Federal aid to support the family, writes: "All this could only happen in America. I'm thrilling prOud to be an American." A student from Webster College writes Ill have to condition myself for school in September. - I've gotten in the habit of asking questions and the teacher I'm getting will give me an `F' if I ask a question." : One Upward Bound student wrote in an essay:- "This program has presented without any beating around the bush the facts of life. -It doesn't try to scare you, nor make life seem like peaches and cream. It confronts you with every- thing, and how important our education is. Since I've been here I've realized what life is, and how much work you do there can be just that much fun." PAGENO="0291" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1129 A youngster who had lived in several foster homes and says she knows "how a pup feels that has been dropped out on the highway in strange unfamiliar surroundings," wrote to Sargent Shriver: "We suddenly realized we were important, that we were not just those poor kids from poor homes but actually we were people. Someone cared, someone thinks we are worth working with and most -of all, we found out we, too, are citizens. Citizens of the greatest country on earth, with a government that takes time to think of the needs of each individual and make sure he has his right to be a citizen and an individual. I would like to thank you, the President and the United States of America for my experiences with Upward Bound. Upward Bound not only taught me and the others the values of higher education, but also a love, respect and tolerance of our fellow man." A student from Chicago, Illinois, writes: "Up until my first week in Upward Bound I didn't care anything about school and very little about other things. Upward Bound has introduced me to a whole new life. For the first time I really care, I'm interested and I want to make a place for myself in the world. And this change is because of all the wonderful people in Upward Bound ...*. We learned more, much more than the people who started Upward Bound ever bar- gained for. We learned we are people who can really succeed but only if we want to and that a major key to that success is education." Another Upward Bound student told her counselor: "We have always been poor and people have looked down on us. I had planned to quit school next year if it gets as dull as it was last year. Everyone expects me to. None of my family have ever graduated. I had never thought I wanted to go to college cause it was completely beyond my imagination. I have changed my mind since I came here. I would do anything-just anything to get to go. Everyone here treats me as' if I really do belong. I am going back to my high school and really work now.. it is not hard to get school work when there is a good reason for it." Mr~ DELLENBACK. What do you consider the optimum goal of this program both in numbers of students `and in dollars in the fiscal years in the future? Dr. -FROST. The program, if it works well, has a ripple effect, a demonstration value. Mr. DELLENBACK. You are one question ahead of me~ I was going to askyou about the ripple. Dr. FROST. One has to ask whether you need to reach the whole number of high school students~ I think 200,000 t 300,000 of high school youngsters should be reached. Mr. DELLENBACK. Do you have expectations of what th'e budget wouldbe? Dr. FROST. Currently you multiply that figure by $1,150 per student. Mr. DELLENBACK. Do you estimate it will remain then at that level? How much in the future would that dollar figure rise per student? Dr. FROST. I don't think it `will rise. I think it will stay about the same. Mr. LEVINE. As we start decreasing the number of poor people I think the figure will drop. `The total number of eligibles will drop, smce poverty is one of the standards of eligibility. Mr. DELLENBACK. For the foreseeable future this would be your expectation as to numbers and as to dollars? Dr. FROST. I believe so. Mr. DELLENBACK. Where do you feel this program should eventually go? Twice in the earlier testimony you indicated, as I read you, Dr. Frost, that for the present this should be under OEO. Is there implicit in this statement that at x period in the future, then, it should move into some other department? Dr. FROST. My own view is that our long-range goal is to get rid PAGENO="0292" 1130 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 of this program. The American high school and American college should be able to do this job. They have enormous things to do and this should be a high priority one of them. They have not been able to do so. Mr. DELLENBACK. You do not anticipate for the immediate future, however, that there would be any elimination of the need for Federal funds? Dr. FROST. No, there would not. Mr. DELLENBACK. Where then should eventually that funding be handled? I may be reading more into your earlier remarks than you meant. In two instances when you were asked whether it should be under OEO or not you stated, I believe, that for the present, as of now, it should remain under OEO. Dr. FROST. I think it is a young program that is working in the "poverty patch," if you will, where education at all levels, and I want to confess as an educator, has never done a good job. It is working well where it is. The clients don't object to its location, nor do any of the colleges. I would like to think it could stay up undisturbed in this new busi- ness it is in until somebody feels it could be easily transferred and without any difficulty for it. Mr. DELLENBACK. You did not mean to imply at some time in the future you expected or would hope that it would go somewhere else? Dr. FROST. I don't have any thinking about that. I don't think it should be disturbed at the moment. I think it is too young for that. Mr. DELLENBACK. You indicated earlier that there were 125 appli- cations for this type program this year that you are unable to support? Dr. FROST. That is right. Mr. DELLENBACK. How many of these would have been adequate programs? Dr. FROST. Our panels judged 70 of them to be good proposals. Our 1968 projection would accommodate those 70. Mr. DELLENBACK. The other and last question I would ask under the time limit is to comment on this ripple effect. You indicate that sometime between 200,000 and 300,000 students would be covered by this program. You mentioned a statistic earlier about 500,000 students a year com- ing into the overall group. I suppose there would be a million students potentially eligible under present levels of poverty, which would mean that you would seek a progrem handling only 22 percent of these. Would you expect the ripple effect to take care of the rest? Dr. FROST. I think the ripple effect of this will be surprising, par- ticularly at the higher education level. The signals we are getting from admission officers, faculty committees, on admissions is that they are willing to take these kids who normally they would not have risked, and see what they can do with them. I can assure you, having taught such youngsters, they are going to have fun. Mr. DELLENBACK. Would this ripple effect be in interesting these youngsters who would not otherwise have thought about this and also in making funds available from other sources. Dr. FROST. I am sure it will. Where an older brother goes to college in a family where no one has ever gone, they will go to college. PAGENO="0293" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1131 Mr. DELLENBACK. You see the ripple effect as taking effect both with increasing interest where interest did not exist before and also in making funds available from other sources, whether that be from other levels of government or from private sources. Dr. FROST. That is true. Chairman PERKINS. Mr. Dent. Mr. DENT. No questions. Chairman PERKINS. Mr. Daniels. Mr. DANIELS. No questions. Chairman PERKINS. Mr. Steiger. Mr. STEIGER. First of all, Dr. Frost, I want to make sure that we are not going to leave the record somewhat unclear. Nowhere in the Opportunity Crusade do I find a $100,000 hypothetical limitation on Upward Bound which was suggested by the gentleman from Washington, Mr. Meeds. His question to you was about the Talent Search limitation of that figure. Do you have any basis for making a statement that there would be a severe limitation if the transfer were made from OEO toOE? Dr. FROST. Sir, I thought I was responding to his quoting of the present law, the higher education bill. Mr. STEIGER. On Talent Search? Dr. FROST. On Talent Search. Mr. STEIGER. Not on Upward Bound as it is proposed in the Oppor- tunity Crusade? Dr. FROST. I did not recall his saying that. Mr. MEEDS My question was on the basis of the present law in the Higher Education Act which is what Talent Search is under now. Mr. STEIGER. You directed the question in such a way as to make it appear that Upward Bound would be limited by that same figure. That is not correct.. Mr. MEEDS. No. Upward Bound is not limited by that figure. I am sorry if the question had that connotation. Mr. QUIE. Would the gentleman yield? Mr. STEIGER. Yes. Mr. Qun~. I have an excerpt from the testimony on the Talent Search program and he says it is supported by ~n appropriition of $4 million Mr. S~rIaoEii. I thank the gentleman from Minnesota. You have a benefit-cost-ratio of 1.7 to 1 to 2.8 to 1 range. On what basis do you make that r'itio ~ Dr FROST I will let the economists answer that Mr LEVINE The basis of the estimate is known data on the ad vantages in lifetime earnings of somebody who goes to college over somebody who does not The reason for the range is that obviously the program is so young we don't know yet how long the kid will stay in college Mr STEIGIR In other words, that figure does not represent a true cost benefit ratio study ~ Mr LEVINE It is a true benefit cost study, yes, sir I have a piece of paper on it that I will be glad to submit to you and your committee or whoever wants it Mr STErnER I would appreciate your submitting it for the record I would make the point th'tt if it is not done in `is det'uled and as PAGENO="0294" 1132 EeCONOMIC OPPORTUNITY ACT AMENDMENTS OF. 1967. complete a basis on the Job Corps cost~benefit study by Dr. Cain it tends then to be frankly very hypothetical. I would for one have some serious questions about the benefits of trying to "snow" the committee or the public or anybody else. on the basis of putting it on a chart. .` I Mr. LEVINE. We are not trying to snow the committee, Mr.. Steiger. We have done a study using the methodology which Mr. Cain corn- menc,ed for our program on benefits and costs. For Upward Bound, it has been done more recently. I have a short piece of paper. Alonger piece of paper is being worked up. It is done in the same kind of de- tail and essentially with the same kind of data with this difference, that on Job Corps we have people who have gone through Job Corps and we know what, has happened to them.' ` ` ` On Upward Bound we have people who have gone through Upward Bound but no people who have gone through enough college tb know what is gomg to happen to them The first mdic'ltor of the benefits of Upward Bound are not complete yet because the time has not ~elapsed. Mr. STErnER. If it is true that the benefits are not yet complete, you are really making a very hypothetical study. I still wOuld say that then the figures that are on this board are not reasonable. Mr. LEVINE. It is hypothetical; 1.7 to one is at the lower end of the range. If the thing does' not work out as well~ as it might, 2.8 is the upper end of the range. Even the lower end of the hypothetical possible ra.nge looks pretty good. Mr. GUENEY. Would you please advise us on the committee where the benefit figures come from? How do you calculate it if you haven't `had any graduates yet who have earned any money? . Mr. LEVINE. We do know the benefits of keeping a kid from drop- ping out of high school, which some of these kids were kept.from by this study. We do know the benefit of 1 to 3 years' college attendance. We do know the benefits of completion of college. Mr. GURNEY. You say from 1 to 3 years. You mean that you have records of people who have gone to college for 3 years. and then ob- tainedajob? ` , , Mr LEVINE There h'ive been national studies on this over a long period of time, yes, su Mr GURNEY But not in this program ~ Mr LEVINE No Not in this progr'tm We `ire using data on the ef fects of college on a college student s earnings Mr GURNEY That is the information I was trying to elicit Mr STEIGER May I have 2 additional minutes ~ Chairman PERKINS Without objection, it is so ordered Mr SHRIVER Congiessman, I will not take any of your 2 minutes I lust want to s'iy this Many Congressmen on this committee have asked us 1 epeatedly to present thit evidence which it is possible now to have, especially cost benefit evidence This agency is the first agency in the social agency of governmental programs to have cost benefit studies at all Now since we are the first to be doing it, the evidence is not going to be perfect, since we are first Since the programs hive not been m existence long they cin't be conclusive or provible in `i final sense PAGENO="0295" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1133 But just as you feel perhaps that evidence which is available should not be submitted, other Congressmen on this committee have asked us specifically and repeatedly to present that evidence. So we are not trying to snow you. What we are trying to do is respond to a request from your colleagues that what is available be made available to the Congress. Mr. STEIGER. I would never argue that the information is not avail- able. I am delighted Dr. Levine will make available to the committee the basis of the figures on this chart so that we will have an oppor- tunity to study it. I do want to try to clear up the number of children that we are talking: about. In your presentation on page C27' you use the figure 760,000. Dr. Levine uses the figure 87,000. May I inquire as to which one is correct. Mr. LEvINE. I did a back-of-an-envelope calculation to help answer the previous question. The figure Mr. Berry used is correct, except that it is the figure for 2 years. I believe Mr. Berry can answer that. Mr. GIBBONS. Mr. Chairman, this is just for a unanimous-consent request. I ask unanimous consent that we may insert at this point in the record a document thathas just been handed to me, benefit-cost of the Upward Bound program, furiiished to me by .OEO so that the record will properly reflect the details of the cost benefit ratio studies Mr. QiJIE. Reserving the right to object may I ask the question, is this information gleaned from a number of evaluation studies of Upward Bound or is this an evaluation study of somebody whom you have contracted with ~ Mr. LEVINE. This information is gleaned from some of the data Mr. Frost has cited about the percentage of youngsters that. went to college and the dropout rate and so forth, applied to the national statistics I referred to in answering Mr. Steiger, concerning the effects of college on future earnings of these youngsters. Mr. Qtm~...Has there been any evaluation study made or contracted with any one for evaluation of Upward Bound? Mr. FROST. Yes, we have two. One, we are tracking the graduates from the original 1965 group. Secondly, a much bigger one to make an elaborate analysis of the ongoing Upward Bound program and the youngsters that are in it with Syracuse University. Mr. QUIE. Are either of those two reports ready? Mr. FROST. A good interim report on the first one is ready. Last year's report is ready and we will furnish either or both. Mr. QIJIE. I would ask that this be made available to the members of this committee. I withdraw my objection. Mr. STEIGER. Reserving the right to object, on this cost-benefit pre- hrnmary examination study was any attempt made to do any other kind of studies of other programs so that we can have an accurate cost-benefit ratio study of whether or not the money is as effectively spent in one area versus another? Mr. LEVINE. You can have other accurate cost-benefit studies. You have one on Job Corps I have given you one on Upward Bound I have another one on family planning. . . Mr GURNEY Mr Chairman, reserving the right to obiect, as I understand the data we have here is based upon the average d'tta taken PAGENO="0296" 1134 E'CONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 for all college students in the United States that go 1, 2, 3 years and then leave college and obtain employment. Is that correct? Mr. LEVINE. Yes, sir. Mr. GURNEY. In any of these studies that you say you are doing, are you making any studies that are confined to the poverty-class group of students that we talked about earlier in the neighborhood as I understand it, somewhere upward of 100,000 a year who go to college? Mr. LEVINE. Yes, sir. The data that go into these studies about what a program is doing are confined to the poverty-class students that are in the program. Mr. FROST. We are building a control group of just such youngsters and we will be able to have that although we won't have it for many months. Mr. GURNEY. This is all college students. Mr. FROST. I was talking about all poverty high school youngsters some of which will be in Upward Bound and some of which will not be. I~t us see what happens to both. Mr. GURNEY. Not in your program but all poverty students in col- lege whether they are in your program or some other prOgram or in any program, is data being obtained covering all the students in èol- lege as classified in the poverty class? Chairman PERKINS. Does the gentleman still object? Mr. GURNEY. I think it is important to get an answer to this. Mr. GIBBONS. If, Mr. .Chairman, there is going to be objection to putting this little four-page report in, I will withdraw my request. I don't know, maybe I will try to put it in the Congressiona.l Record, something like that. I don't think it is worth arguing over. This is something that Mr. Scheuer has continually asked the Office of Eco- nomic Opportunity to develop. If there is that much objection I will withdraw my request. Mr. Chairman, I have another unanimous-consent request that is a little controversial and I want to make it. I ask recognition to make a unanimous-consent request- Chairman PERKINS. Go ahead. Mr. GIBBONS. I make a unanimous-consent request to put in the record a UP story- Mr. QmE. I object. Mr. GIBBONS. I don't blame you. Mr. DENT. Mr. Chairman, the gentleman should be permitted to explain. Mr. GIBBONS. This is a UP story. Maybe it lacks credibility or some- thing, but this is a story involving an interreligious committee against poverty, sort of an ecumenical group, I guess, that had some~ observa- tions about the opportunity crusade. I would ask unanimous consent to put it in the record. It is from ~a pretty reasonable group of Protestants and Jews and Catholics. It is very short. Chairman PERKINS. Sargent Shriver~ told me that he had a dinner engagement today at 12 o'clock. I thought by agreement of the com- mittee that we should run along here until 1 and perhaps let Sar- gent Shriver introduce his associate to make a brief statement on either Headstart or Follow Through. Had you rather that we just recessed and come back here at 1 o'clock or do you want to be here all during the testimony? PAGENO="0297" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1135 Mr. SHRIVER. I want to be available at the committee's request or the committee's pleasure. This is not an appointment at 12 o'clock of my making as you know, Mr. Chairman. It is another appointment where I am trying to accommodate a colleague of yours, of all of you, who has a guest here he asked me yesterday to have lunch with him. Chairman PERKINS. Is there any objection to going along without Mr. Shriver present? Mr. QtJIE. The only thing I have to say is that I have some more questions to ask about Upward Bound. I want them to be in context in the record. If he is going to make a presentation of individuals in OEO who are going to give testimony on Headstart and Follow Through, may that appear after the questions are completed? Mr. SHRIVER. Mr. Chairman, we could continue without my being here on the Upward Bound and Congressman Quie could get his ques- tions asked first. I will leave if that is agreeable to the committee. Chairman PERKINS. The only thing is that we will finish Upward Bound in about 10 minutes and we will not utilize the time between now and 1 o'clock. Mr. GIBBONS. Mr. Chairman, at such time when the House convenes I want to make a point of order that the House is in session. Mr. PtTOINSKI. Mr. Chairman, I move that a document entitled "Benefits and Costs of the Upward Bound Program Prepared by the OEO, Describing a Preliminary Examination of the Upward Bound Program Yields the Following Benefit-Cost Ratios," be placed in the record at this time. Mr. QUIE. Do we have a quorum? Mrs. GREEN. I don't have any objection to this but if this is going to be done then I will ask that some other material be placed in the record immediately following. Mr. PuCINSKI. Reserving the right to object, Mr. Chairman, I have no objection to the lady putting it in the record. But there is a motion before the committee. Chairman PERKINS. We are sitting here as an ad hoc committee. Two members under the rules will make a quorum for the purpose 0± taking evidence. It ~would be my interpretation of the rules that the majority present, we have now more than two members, could make a determination of that kind. I would hate to think that we are going to continue to object to matters that any member should have the privilege of submitting. Mr. QUIE. Will you yield? The way this all arose, the gentleman from North Carolina, Mr. Gardner, wanted to submit for the record the report of the investigation of the minority counsel on the registra tion of elections held there. Refusal to put in the record yesterday what he asked for I think would bring out the same kind of objections to other material Chairman PERKINS I think yesterd'ty when the gentleman from North Carolina made that request th'tt I suggested that the othei group be permitted to respond, the Office of Economic Oppoitunity be permitted to respond The gentleman from North Carolina was per mitted, maybe in your absence, Mr Quie, to insert in the record the investigation that was made in Durh'i~m, N C, `tnd the Office of Eco nomie Opportunity was permitted to respond PAGENO="0298" 1136 E~CONOMIC OPPORTUNITY ACT AMENDME~TS OF 1967 So I don't think we have any difference. Mr. PUCIN5KI. I will withdraw my motion and ask unanimOus con- sent that this document be placed in the record at this time. Chairman PERKINS. Is there objection? The Chair hears none. It is so ordered. (The document referred to follows:) Bm~arivs AND COSTS IN THE UPWARD BOUND PROGRAM (By Judith A. Segal) Upward Bound presents to underachieving high school students from poor families the opportunity to reorient their goals toward a college educatiOn~ The program attempts to broaden the horizons of these students who have poor school records, but intellectual potential, by giving them special counseling and tutoring to improve their school work and by sending them each year they are in Upward Bound to a summer (8-week) residential program on a èollége Or university campus. The participants in this program would ordinarily have a double strike against them as far as obtaining a college education is con- cerned: they are too poor to pay for college themselves; their grades are too low to gain acceptance to most schools or to provide a basis for outside financial help. The educational institutions operating Upward Bound programs assist each participant in getting financial assistance to attend college. Upward Bound began in 19(35 as a small pilot program. In l96~, it funded a program for almost 20,000 students and in 1967, one for almost 22,000. The program has picked up a small number of its participants in the 9th and 10th grades, but most of its participants are in the 11th and 12th grades, or have just graduated high school. It is the policy of the program to keep a student in the Upward Bound program from the time he enters until he has Completed the 8-week residence program in the summer following his graduation from high schooL The experience of the program thus far has demonstrated that although a one year stay in the program can change students' attitudes toward their own future, a longer stay in the program is probably necessary to convince these students that it really is possible for them to participate in the benefits of a higher education. The program in the future is going to be oriented toward picking students up earlier in their high school career. The Upward Bound program is based on the simple assumption that poor persons or those from poverty-stricken families can get out and stay out of poverty if they obtain the marketable skills that post-secondariy education can give them. It should be noted that the program has the potential to keep many of its participants, who would otherwise drop out of high school, in schoOl until graduation, which in itself is an effective step toward moving them permanently out of poverty. BENEFIT-COST RATIOS A preliminary examination of the Upward Bound program yields the following benefit cost ratios: Benefit-cost ratios High school gradu- ate over high school dropout * 1 to 3 years of col- lege attendance over high school graduation Coflege graduate over high school graduate * 3 5 5,881 3, 776 2,319 2,319 2.54 1.63 3 ~5: 7, 570 4,204 4,580 4,495 1.65 .94 3 5 12, 050 7,359 4,345 4, 234 2.77 1.74 TABLE I Percent Benefits Costs Benefit-cost ratio PAGENO="0299" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1137 The benefit-cost ratio of one is a convenient benchmark for determining whether the program is preferable on efficiency grounds to the simplest alternative of a transfer payment. The ratios for all three types of "success" situations examined are over one when discounted at 3 percent. When they are discounted at 5 per- cent, the ratio for college attendance over high school graduation is slightly under one. If 5 percent is accepted as the conventional discount factor, then a 2 percent growth rate in earnings over the future working careers of Upward Bound participants justifies the use of a 3 percent rate. The difficulty of quantifying all the costs and benefits of a program and the precedence of equity over efficiency issues may restrict the applicability of this type of approach~ A program to provide an "equal opportunity" to education is by definition one which will put equity considerations first. Nevertheless, even where equity ts a primary consideration, it is useful to have a method of evalu- ating efficiency in .order to compare `alternative "equity" programs or to find the cheapest way to achieve a certain "equity" goal. The significance of a cost-benefit analysis lies in the way in which costs and benefits are measured. The conceptual framework of this measuring process may be the individual participating in the program, the agency administering the pro- gram or society as a whole. For this analysis of the Upward Bound program, the measurement of costs and benefits is from the point of view of society. Transfer expenditures (transactions which are made simply to transfer. the cost from one individual or institution to another within thesociciy) are neutralized, and edu- cation expenditures are not limited to tuition. In addition, since Upward Bound has had little time to establish any empirical success rates or "average" partici- pant characteristics, success rates have been hypothesized, and the grade, sex, race, and geographical distributions upon which the calaculations of costs and benefits are made are based on the characteristics of the 1966 and 1967 Upward Bound programs. The following discussion indicates some of the restricting assumptions of tins analysis. Table II shows the individual cost and benefit items which have been included in the above benefit-cost ratios. TABLE II High school grad- 1 to 3 years of College graduate uate over high college attendance over high school school dropout over high school graduate (22 per- (88 percent of graduation (44 per- cent of participants) participants) cent of participants) 3 5 3 5 3 5 5,083 2,978 6,772 3,406 ii, 252 6,561 798 798 798 798 798 798 Percent Benefits: Increase in lifetime earnings Stipend, room and board while in U.B.program Total Costs: OEOgrant~ Wagas foregone while attending sum- mer program College costs 5, 88i 3,776 7,570 4,204 i2, 050 7,359 1,919 400 1,919 400 1,919 400 2,261 1,919 400 2,176 1,919 400 2,026 i,919 400 1,9i5 Total 2,319 2, 319 4,580 4,495 4,345 4,234 BENEFITS The benefits of a continued education are difficult to measure The kinds of satisfactions obtained from a fuller participation in the productive and pleasura ble activities of society cannot be measured quantitatively but should not be overlooked. It is conceivable that for many people these satisfactions are as important as those benefits which can be measured The most obvious measurable benefit of further education is increased earning power. The bulk of the benefits in this study consist of an estimate of the future net earnings that could be obtained by an individual on the basis of a marginal increase in his education. These potential earnings are based on data on earnings of males only. Com- parable data for females are unavailable Since approximately half of the Upward PAGENO="0300" 1138 EICONOMIC OPPORTUNITY ACT AMENDMENTS OP 1967 Bound participants are females, it is important to recognize that the application of these benefit-cost ratios to the total population of Upward Bound is possible only when some assumptions are made about the relevance of the earnings benefits to female participants. Significant differences in earnings occur according to racial and geographic differences. The earnings in this analysis are weighted by the white-nonwhite, North-South distribution of the program's participants. As higher levels of "success" are reached by the participants in this program, the benefits accrue to fewer and fewer of the original Upward Bound partici- pants. The benefits of a high school graduate over a high school dropout accrue to 88 percent of the participants. The benefits of college attendance accrue to 44 percent of the participants, half of these who graduate high school. The benefits of college graduation, under our assumptions, can be expected to go to 22 percent of the original participants, that is, to half of those who start college. The bene- fit in each of these cases is the marginal increase in earnings gained by a marginal increase in education. The benefits of the high school graduate are compared to those of the high school dropout, and the benefits of those who attend or graduate college are compared with those of high school graduates. In estimating the benefits of the increased number of high school graduates which Upward Bound could produce, it is assumed that the program can reduce the high school dropout rate of its participants from 38 percent to 10 percent (with an additional 2 percent dropout rate for the program itself). Experience of the 1966 program indicates that about 80 percent of the pro- gram's participants will probably be accepted by a college or university. In light of the difficulties involved in obtaining financing for these students, this analysis has assumed that slightly more than half of them will attend college for at least 1-3 years. This is close to the average rate of college attendance for high school graduates in general, a reasonable assumption in light of the fact that whereas these students do face more obstacles to college attendance than the average high school graduate, Upward Bound is designed to overcome these obstacles and give the program's participant the same opportunity as the average student to attend college. The average college dropout rate of 50 percent (half of these dropouts oc- curring the first year) is used to estimate the benefits available to individuals who become college graduates as a result of the Upward Bound program, but who would probably have not graduated college otherwise. Twenty-two percent of the original Upward Bound participants are assumed in this analysis to graduate college. Other benefits of the program include a small stipend paid to participants and their room and board during the summer residence program. These are transfer payments and are included in the benefits to balance their inclusion in the grant costs. cosTs The costs w-hich have been measured in this analysis are the OEO grant, the wages foregone by Upward Bound participants while they are attending the summer programs, and the costs of a college education for those who attend college. Although OEO provides only the first of these funds, other costs must be invested to produce the various benefits that can be expected to arise from the program. The OEO grant cost per participant is based on the 1967 funding operations. The 1967 per capita grant is the highest thus far as a result of the two previous years' experience which demonstrated that additional costs would have to be covered. The grant is weighted by the proportion of participants in each grade. Eighty-one percent of the participants are in the 12th grade or have completed the 12th grade. As the number of participants in the early grades rises, the longer stay in the program will increase grant costs. It is likely that it will also mean that a higher percentage of participants reach college and college graduation. The present analysis includes higher success factors for students picked up by the program early in their high school career than for those picked up later. Foregone wages are calculated for participants during attendance at summer programs. There is no restriction on students working during the regular school year. Hypothetical wage rates of $1.25 for Northern students and $1 for South- ern students are used, and differential unemployment rates are used for white and nonwhite students. Wages foregone while participants are attending high school or college have been figured into the net life-time earnings benefits. PAGENO="0301" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1139 College costs are based on the total use of resources required for attendance at an institution of higher learning, including room and board. The method used to calculate these institutional costs overstates them. However, the ignoring of incidental costs of a college education which do not show up in academic institutional costs, from which these costs were calculated, probably serves to prOvide some balance for this overstatement. Mrs. GREEN. May I ask permission to introduce similar material along the same lines? Chairman PERKINS. It is so ordered. Mr. DENT. I want to reply to the gentleman from Minnesota that this article Mr. Gibbons wants to put in in my 5 minutes I will read into the record. Will you recognize me for 5 minutes? Mr. QUIE. I don't think it will be necessary. If the information that the gentleman from North Carolina wanted in the record 1S placed in the record I have no objection to the gentleman from Florida plac- ing in the record anything that a bipartisan or bireligious group wants to put in the record. Mr. GIBBONS. I renew my unanimous consent request that the TJPI article be put in the record. Chairman PERKINS. Mr. Quie is recognized. Mr. QUIE. I have no objection. Mr. GIBBONS. Will you yield to me? I ask unanimous consent that this little old short UPI statement that I have here be placed in the record at this point. Chairman PERKINS. It is so ordered. (The information referred to follows:) WAsHINGToN-Protestant, Catholic, and Jewish religious leaders today voiced strenuous opposition to a move by Republicans in Congress to dismantle the Office of Economic Opportunity (OEO) and distribute poverty-fighting among regular Government agencies. A strong stand in favor of maintaining the OEO, and expanding its appropria- tions was taken by the Interreligious Committee against Poverty (ICAP) at a meeting here. The committee is a joint agency of the National Council of Churches, the Na- tional Conference of Catholic Bishops, and leading Jewish organizations. Its presiding cochairmen, Catholic Bishop Raymond J. Gallagher of Lafayette, Ind., told a news conference the interfaith group also opposed proposals in Congress to increase the amount of matching funds which must be put up by local groups receiving a Federal antipoverty grant. He said the leaders also expressed concern about "apathy in our own religious communities about the war on poverty and agreed to work more effectively with our own constituencies to continue active and aggressive support of anti- poverty efforts He said ICAP agreed to conduct a thorough investigation of reports made pub- lie last week by a team of New York doctors, of widespread hunger verging on starvation among poverty groups in Mississippi and some other areas of the rural South Bishop Gallagher said that the religious leaders did not feel that the OEO and its programs are perfect in all respeCts, but he said "the most glaring trouble with them is grossly inadequate funds Mr QUIE When Mrs Green's subcommittee held hearings on the Higher Education Act the question of Upward Bound and Talent Search came before it Mr Muirhead of the Office of Education w'is testifying Commissioner Howe stated So far as the cooperation is concerned we work rather closely as you would expect with the Upward Bound program in the Office of Education, hopefully leading to the sort of continuous program of assistance to those youngsters first PAGENO="0302" 1140 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 of all their identification and encouragement, and through the Upward rBOund program providing them with some sort of remedial program if such a program is needed So that they can cross the threshold of college entrance. He gave the impression by that statement that they are working hard to coordinate these two programs but with different clientele. Also Mrs Green asked Mr Muirhead Let me ask you, under the law do you have authority to do everything that is being done under the Upward Bound program?~ Mr. MUIRHEAD. We do not. Mrs. Gxnun. What do you not havethe authority to do? I Mr MUIRHEAD We do not have the authority for example to run a summer in stitute program to held a group of young people who have not had mathematIcs instruction in secondary schools where the Upward Bound program could do just that I think we should not be condemning an agency of Goveirnrnent, namely the Office of Education, for not doing the job when they have not been given legislative authority to do it. The legislative authority was so broad in the Economic Opportunity Act that under title II you were permitted to do it. I commend you for utilizing that authori- ty for an Upward Bound program. I very strongly support the idea of helping people who have the innate ability to go on to higher edu- cation but who had an inadequate secondary education and are unable to qualify. The question is whether this could be done by the Office of Educa~ tion rather than limiting Upward Bound to the Office of Economic Opportunity. Mr. FROST. I think it is unfortunate to characterize our view of Talent Search as condemning the Office of Education. I don't think any of us here had intended to do that. They are operating what I think is `t very important broadcasting program so that the poor in much larger numbers than Upward Bound will know of the `~vaila bility of financial aids. It is a good prOgram. It is a good comple- mentary program. Mr. QUIE. The other question I had-~was it through Upward Bound that a contract was made with Howard Jones in Northfield, Mass., head of a private secondary school, on a demonstration project to utilize a private secondary school ~ Mr. FROST. Yes, sir. It was through the earliest Upward Bound pilot ideas in 1965 I could elabor'tte on this if you would like Mr Quiu I would like to know why it was not continued as a dem onstration progr'im, and how would it fit in to utilize private secon `iry schools~ Mr Jones indic'ited `i desire to participate in this program It was `i grant from OEO-207 to a galaxy of independent prep schools, some 104 of them c'illed independent schools Talent Search, of which Howard Jones, I believe, is the president It financed full year scholar- ships for poverty youngsters to go to prep schools It st'irted them typically as nmth griders So we hid ninth, tenth, 11th, and 12th grade The cost of it, in the judgment of OEO, is about $10,000 a youngster to get him to the college door We think we can do pretty well the same thing through Upward Bound at about $3,300 `t youngster So we are phasing out that dem onstration PAGENO="0303" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1141 The second and probably better reason is that as a demonstration it has demonstrated that you can take a youngster from poverty into a first-rate prep school and full-time work the year around and get him into college. A very high pecentage of those kids have gone on to college. So the demonstration has~ been concluded in our view. Now we do not wish to cut off our support for youngsters currently in that, some- where in the pipeline. So, our grant this week or next will be to continue only those OEO- supported youngsters who are already in the program. The political problem in a sense has been why don't we add lots of new youngsters. We continue to support the old but not adding any new. The reasons are two. The demonstrations are clear and secondly it is a very expensive program. Thank you. One last comment. Going back to the question of whether the Upward Bound and Talent Search programs should be together, I would like to read into the record another answer to a question put by Mrs. Green and answered by Mr. Muirhead. She said: Why not follow thrOugh on the Education Act by bringing some coordination on this level and have Upward Bound program do just that. Mr. MUIRHEAD. It seems to me that is a logical step to take. I am of the opinion Upward Bound has done a fine job where it is and has started a ferment where it is needed. But we do work closely with them. I. think ultimately that the three particular programs I am suggesting counseling Upward Bound program financial aid program should be together some place I share the views of Mr Muirhead that this ought to be done Chairman PERKINS. Mrs. Green. Mrs~ GREEN. I would like to `go over some of the figures you have given us. What do they represent? What is the 8 percent of? Mr. FROST. Eight percent of the poverty youngsters who graduate from high school and go on to college. Mrs. GREEN. What percent of the total high school graduates go on to college? Mr. FROST. Anywhere from 50, to 60 percent, depending on how you define college, Mrs. Green. Mrs. GREEN~ Would you define it the same way as the 8 percent? Mr. FROST. The 8 percent one we defined as a 4-year institution or ac- creditOd institution. Mrs. GREEN. Nationwide how many go to college? Mr. FROST. About 55 percent. Mrs. GREEN. In your testimony before the committee you gave it `as 65 percent. The Office of Education in its study of youngsters who are starting the fifth grade and the ones who would enter college, gives the percent as about 38. Mr. FROST. Thirty-eight percent of the fifth graders will one day go to college ~ Mrs. `Gm~EN. Of the youngsters who start out in the fifth grade, 38 percënt~will enter college. ` Mr. FROST. Of all fifth graders one day enter college? MrS.GREEN. Yes. Mr FROST I am not surprised to heir that Mrs GREEN And only 19 percent then complete college PAGENO="0304" 1142 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. FROST. Of those fifth graders? Mrs. GREEN. Yes. Mr. FROST. I am not surprised to hear that, either. Mrs. GREEN. Of the Upward Bound youths, your 76 percent is a part of the 8 percent., if I understand the chart. Mr. FROST. No, it is beyond the 8 percent. Mrs. GREEN. You take 20,000 kids out of the 8 percent. Mr. FROST. No. The 8 percent go now. We get another to go? Mrs. GREEN. And then of your 20,000, 76 percent are accepted in college. Mr. FROST. Right. Mrs. GREEN. I am curious as to how you can make any judgment on the cost-benefit ratio when the program is only 2 years old and you don't irnow how many are going to go on and finish college. Mr. LEVINE. That is the reason for the range, rather than the single number, Mrs. Green. The 1.7 is the number for the benefits for those kids who just get into collegeand stay 1 to 3 years. The variation from 1 to 3 years is not very much. Subsequent variations come as they graduate. We say if they get into college and don't graduate, then the number is 1.7. Were they to graduate, the number would go up sharply. Mrs. GREEN. Is the benefit the same for any youngsters that go to college? Mr. LEVINE. The benefit estimate is the same as it would be for any of our youngsters. Mrs. GREEN. Would you explain that? Mr. LEVINE. The estimate of the benefit to a youngster from going to college is the same for one of these youngsters or for another young- ster. But to get a benefit-cost ratio, we have to divide that benefit by a cost.. What we divide it by is based on t.he Upward Bound program cost. Mrs. GREEN. Is the percent of the youngsters who stay in college who have been Upward Bound, about the same as other students who haveneverbeen inUpward Bound? Mr. LEVINE. That is Mr. Frost's testimony. Mr. FROST. Staying power? Is that what we are talking about? Mrs. GREEN. Yes. Mr. FROST. Of the group that went in in 1965, 53 percent of them are back for their sophomore year, which they are now finishing up~ I will know shortly how many survived that sophomore year. Mrs. GREEN. It looks as though they are going to stay in college at about the same rate as the other students that go to college. Mr. FROST. At the kind of colleges they went to; yes. Mrs. GREEN. Did you take that into consideration in giving the cost-benefit ratio? Mr. LEVINE. That will help determine the figure between 1.7 and 2.8; 1.7 assumes they get.in. We could have a 100-percent dropout rate~soon after getting in, but the youngsters who get into college, and last a year, have substantially increased earnings over those who don't get into college. . If you ask about the subsequent dropout rate before graduatiOn, the smaller the percentage that drops out, the larger percentage that PAGENO="0305" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1143 stays in, the closer that number will get to 2.8. It is still within the 1.7 to 2.8 range, whatever the Upward Bound experience of keeping the kids in college to graduation. Mrs. GREEN. You are figuring on $3,300 cost as part of this. Mr. LEVINE. Actually, we are figuring somewhat more. In order to do this kind of calculation, we figure the cost to the economy and the college as well. The Upward Bound cost is $3,300. Mrs. GREEN. I was. interested in the logic. If I understand it cor- rectly, the benefit-to-cost ratio for youngsters who have never gone to Upward Bound and who go to college will be higher than the benefit-to-cost ratio for Upward Bound students. Mr. LEVINE. That is right, because they would not include the cost of Upward Bound, so, therefore, would be divided by the lower number. Therefore, the ratio would be higher. Mrs. GREEN. The cost-benefit ratio is so good for Upward Bound, that when you take any kid who does not get to Upward Bound, the cost-benefit ratio would be very high. Mr. LEVINE. The point is that the benefit for these kids, these young- sters, they would not have gone to college at all. Therefore, the benefit for- Mrs. GREEN. How do you know that? Mr. LEVINE. By the data. I am sorry. Well, 8 percent of the kids in this general income age group go to college. In fact, this 8 percent is primarily the really top achievers among the high school youth; whereas, Upward Bound takes, as Mr. Frost testified, much lower achievers. I won't say none of these* kids would have gone to college, but a very small number would have gone to college. You take a youngster in this program, of the huge preponderance that would not have gone to college and otherwise, the benefit to the economy of his lifetime production, given that he went to Upward Bound, is roughly this much higher than his production would be had he not gone to Upward Bound. Mrs. GREEN. This would be true among the five other million that do not go to college. I am not quarreling with the objective of the pro- gram. I think we ought to identify these poverty kids and I think we ought to make college available to them. Mr. LEVINE. Mrs. Gre,en, I am not trying to put a benefit-cost analysis as a "snow job," or as being the be-all or "end-all of evalua- tion." What it is is an indication to us that in fact in economic terms the program is a good investment. This is not the only justification for a program. I don't think I would say this, therefore, proves the case for all time. Mr. SOHEUER. If there is any burden of guilt there, I ought to bear it because I have been perhaps the one member who has been insist- ently pressing and urging OEO to develop these cost benefit figures May I ask a question as to why you say the benefit to society is equal as between the low high school achiever whom you `ire helping with Upward Bound and the normal high school kid that goes to college? It seems to me if none of them went to college the high school chap would have an earning experience far superior to the low achiever, and you are not lifting them from an equal level to an 80-084 O-67--pt. 2-20 PAGENO="0306" 1144 ECONOMIC OPPORTUNITY ACT AMENDMENTS OP 1967 equal level. You are lifting the low achiever who goes into Upward Bound from what would have been a far lower base. It seems to me that as yOur costs are greater, so are your benefits correspondingly greater. You are picking him up from what would have been a far lower level of achievement simply because he is an underachiever in high school. Mr. LEVINE. You are right. Chairman PERKINS. Mrs. Green has one question. Mrs. GREEN. For the record, it has been my impression that under the Talent Search, under* the higher education bill, they have made grants for the identical purpose for which you made grants. I have talked to Dr. Muirhead. He does confirm that they have made grants to colleges and universities for aca.demic~ work in terms of tutorial services, remedial work, and so on. So far as I can see, the program which you have is identical to the program that is in the Higher Education Act, that they not only give the grants for the early identification of the very bright college students, but they also provide the money to give them academictrain- ing so that they will be better equipped to go to college. Mr. FROST. Mrs. Green, it is the same Mr. Muirhead with whom OEO agreed that he would operate through Talent Search an impor- tant broadcasting program without academic summer components and Upward Bound would operate the ones with summer component academic training. Mrs. GREEN. I do not intend to argue the point.. I think the record ought to show that Talent Search is doing the same things as Upward. They have made grants although I thought you to say, if I understood you a while ago, that they did not, because this was the purpose of the legislation when we passed it. It is an important point. If there is duplication, then I think the committee should consider whether this program should be coordinated and whether we could get more kids helped. Chairman PERKINS. Mr. Scheuer? Mr. SOITEItTER. May I ask, Mr. Levine, have you applied this cost- benefit analysis to any of the other on-going programs in poverty legislation? Mr. LEVTh~E. Yes, sir.We applied it to the Job Corps. We applied it to Family Planning and the study is available, if the committee wants it. Beacuse we tried to do it conservatively, and we tried not to do a "snow job" on it, these are the ones where we have benefits that we can estimate to do an honest study of this sort. Mr. SOHE1IER. Do you think you have enough information to do it on the Hea.dstart program? Mr. LEVINE. I think probably not. Mr. Scn~uER. How about on just health and nutrition programs? I am gomg to advert to the perfectly fantastic and horrifymg article in last Saturday s New York Times by Nan Roberts discussing the hearings on the Senate side, of severe hunger and a continual slow rate of starvation, and total absence of medical care in Mississippi. - I wonder whether, as a background for this, you might 1~ave any idea of the cost-benefit implications of giving health and nutrition care to kids to determine how they function in school? PAGENO="0307" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1145 Mr LEVINE In order to do the studies, we need data On nutrition, where I would love to have a study of the type you mentioned, for the reasons you mentioned, we all are pretty sure of this point: that malnutrition, both prenatal and child nutrition, has substantial effect on future performance. The data measuring this are not available. We are sponsoring a study with Temple University to do a measurement of this sort. You have to have a measurement before you can do a cost study On health we don't have that either, because the programs are t.oo new. We have done something which is a lot less meaningful on health programs. We have computed what we call an opportunity value cost ratiO,' the opportunity value being the value of the same package of services on the open market compared to our health centers. As I say, I don't want to put that up as a benefit cost ratio It is something much simpler Mr. DELLENBACK. May I be sure that I understand these various studies? The study that was made on the Job Corps was made out- sideof the Department? Mr. LEVINE. No, sir. I don't know if we gave that impression. The study made on the Job Corps was done by an economist on my staff who is on a year's leave from the University of Wisconsin. Mr~ DELLENBACK. He was an employee of your staff? Mr. LEVINE. Yes, sir. Mr. DELLENBACK. This study which, at Mr. Gibbons' request, was introduced earlier today, the cost of the Upward Bound program, was also made by a member of your staff? Mr. LEVINE. That was made by a member of my staff. Mr. DELLENBACK. The third study, Family Plaiining, was a1~o made by your staff? Mr LEVINE Yes, sir Mr. DELLENBACK. I think that is one of the relevant, factors. The idea of entering these in the record is an excellent idea so long as it is clearly understood by whom they were made, as well as the other qualifying remarks you have made. Mr~ LEVINE. .1 can only profess the. honesty of myself and the staff. Mr DELLENBACK I am not quarreling with that I am saying it is important that we not only enter the study in the record, but we under stand clearly by whom it was made and under whose auspices I do not mean to impugn anything so far as the studies are concerned Mr LEVINE I would be glad to bring in the staff members to talk to the committee Mr DELLENBACK Do you have any studies made outside the staff, made by outside universities ~ You indicated earher you ~re having `t study made by Temple Mr LEVINE We htve lots of studies that are being made this way They are not cost benefit studies at this stage Mr DELLENBACK The study that Dr Frost referred to earlier th'tt is going to be made as to the performance of the students is being made by an outside organization, Dr Frost ~ Mr FROST Syracuse University Youth Development Center Mr DELLENBACK I asked Dr Frost to make it available Could I have unanimous consent to have it made part of the record when we receive it ~ PAGENO="0308" 1146 ECONOMIC OPPORTUNITY ACT AMENDMEN7r.S OF 1967 Mr. Chairman, when Dr. Frost supplies us with the study being made in conjunction with Syracuse University relative to the college records, success or failure of the Upward Bound students, may we have unanimous consent to have that entered into the record? Chairman PERKINS. Without objection, that will be done. Mr. BAKER. This study is now going on. Ithink we would earnestly hope that the hearings are completed before it is done. It may be a matter of months. Chairman P~xINs. In that case, the Chair will rule against the request. Mr. DELLENBACK. It will be made available to us as soon as it is available? Mr. BAKER. Yes. Chairman PERKINS. Unless there is an interim report that is avail- able. Do you have an interim report? Mr. FROST. Yes, sir. That is what I agreed to put in the record. Chairman PERKINS. Without objection, that will be done. (The report referred to follows:) PAGENO="0309" CHARACTERIZATION OF 1966 SUt~i~ UPWARD BOUND PROGRAMS January 1967 Characterization of Upward Bound Project Project Director: David E. Hunt Assistant Project Director: Robert H. Harc3t Syracuse University Youth Development Center Syracuse, New York 1147 PAGENO="0310" 1148 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Characterization of Students, Programs, and Impact in 1966 Summer Upward Bound Programs I. Objectives of Sunsner Characterization Project The objectives of the Summer Characterization Project were derived from the purpose of the program as stated in the Upward Bound Guidelines for 1966: `Project UPWARD BOURD is designed to give more youngsters from low-income families an opportunity for post-high school education. It should remedy poor prepara- tion and motivation in secondary school, and thus increase a youngster's promise for acceptance and success in a college environment. In brief, it is a pre- college preparatory program designed to generate the skills and motivation necessary for college success among young people from low-income backgrounds and inadequate secondary school preparation." A. Overview of Programs Following the 1965 pilot experience in which 18 pre-college Upward Bound programs enrolled 2,061 students, the Office of Economic Opportunity approved grants for 215 programs in 1966 which enrolled 18,958 students in the summer programs. Upward Bound programs typically begin by enrolling students for an eight-week intensive educational effort conducted on college campuses during the summer. After the completion of this phase,. academic year fellow-up programs are conducted in coope:ation with the student's high school to assist the student to maintain the momentum gained during the aummer~ Programs were conducted in all but three of the fifty states, usually on a college campus, although in a few cases the locale was a private preparatory school. In order to facilitate the "follow-up" phase students usually came from a geographical area within 50 miles of their program. In several of the programs which enrolled students who were high school graduates, the summer phase was designed asa "bridge" linking the student's high school experience and fall enrollment as a freshman in the college conducting the orogram. This report deals specifically with the PAGENO="0311" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1149 summer programs, the students enrolled in these programs,. and the impact of the programs upon the students. B. Specific Objectives 1. To characterize the students enrolled in the Summer Upward Bound programs in order to understand what kind of students were selected and, wherever possible, how they compared with high school students in general. 2. To characterize the Summer Upward Bound programs in order to under- stand what kind of programs were run, and to provide the basis for studying differential program effectiveness. 3. To characterize the impact of summer programs upon the attitudes and motivation in areas related to college success both in terms of the general effects produced during the summer and the differential effects produced by certain kinds of programs which enrolled different kinds of students. It was assumed in developing these objectives that the effect of programs on students' academic accomplishment would be evaluated during the academic year phase. II. Method A. Overview of Strategy In~some cases the measures were based on the total population of either summer students or sumsier programs. In other cases,~ the measures ware administered only to those students enrolled in 21 target programs selected to represent the total population of 2l]~ programs. * Student characteristics were based on: (1) responses of all suimner Upward Bound students to a Biographical Qhestionnaire, and. (2) responses of students enrolled in the 21 target programs to the Pre-Program Student PAGENO="0312" 1150 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Questionnaire. Program characteristics were based on (1) ratings made by site visitors at a majority of summer programs and (2) responses of students in target programs to the Program Climate Questionnaire. Program impact was based on the change in scores between Post-program Student Questionnaire and Pre-progran Student Questionnaire responses of students enrolled in the 21 target programs. B. Selection of Target Programs In order to obtain a ten per cent representative sample, 21 target programs were selected from a pool of ~ randomly selected, but regionally representative, programs. The 21 programs finally selected for the target sample were initially representative of the total population on a number of characteristics as indicated in the following tables. (Students in target programs were also similar to total students as indicated by response to Biographical Questionnaire as shown in Appendix 10) The number of total programs in the tables is 2l1~ since one of the 215 programs was an academic year only program enrolling students who had earlier been enrolled in six different sunnier programs. Table 1 Regional Distribution of All Programs end Target Programs Region AU Programs Target Programs I 1~8 II 38 5 III 22 2 Iv 38 3~ V 23 3 VI 21 2 VII 21~ 2 Total 2114 21 PAGENO="0313" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1151 Table 2 Sex of Students in All Programs and in Target Programs Sex All Programs Target Programs Boys only 16 2 Girls only 7 1 Both 191 18 Total 211# 21 Table 3 Number of Students Authorized in All Programs and in Target Programs Number of Students All Programs Target Programs Less than 50 29 2 50-fl 68 6 75-99 61 6 100-up 56 7 Total 2l1~ 21 Table ~ Residential-Commuter Status of All Programs and Target Programs Residential -Co Status amuter All Programs Target Programs Residential 201k 18 Commuter 9 3 Mixed 1 0 * Total 2114 21 * PAGENO="0314" 1152 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Table5 Source of Application in All Programs and Target Programs Source of Application All Programs Target Programs Delegate Agency 28 4 College or School 186 17 Total 214 21 Table 6 Number of Total Programs and Target Programs idiich had Upward Bound Program in Previous Summer Last Year Status All Programs Target Programs No Program Last Year 203 20 - Program Last Year 11 1 Total 214 21 Table 7 Number of All Programs and Target Programs in Negro Colleges of School All Programs Target Programs Non-Negro School 181 18 Negro School 33 3 Total 214 21 PAGENO="0315" ECONOMIC OPPORTUNITY ACT AMENDMENTS. OF 196.7 1153 C. Measures Biographical Questionnaire. (See Appendix 1). A four-page question- naire consisting of approximately 110 items' was developed to provide basic information on educational and family background as well as some indication of educational aspirations for each Upward Bound student. 2 Pre program Student Questionnaire (See Appendix 2) This question- naire was a coarposité 32-page paper-and-pencil test which consisted *of measures relevant to the purposes of Upward Bound. The measures maybe considered in three categories: Dispositional_measures indexing fairly stable characteristics which were not expected t~ change, Primary change measures. of attitude and motivation expected to change If program is effective, and Secondary change measure~,, either `because the measure was in an exploratory stage or because the measure was less central to the goals of .the program. Dispositional neaaures a. Paragraph Corpp~etion Test (Appendix 2,, pp. 1-6) to provide an index of Conceptual ` Level (CL) or interpersonal maturity (Hunt, 1966). A major reason for including this measure was that Cl has been found to be related to students diffe ential responses to different educational environments (Hunt, 1966) This test consisted of six topics, e.g. What I think about rules...', to which the student was instructed to write three or four sentences during a three-minute time period b Sub I scale (Appendix 2, pp ll~_l6) which measures the degree to which the person is functioning at a very low CL, or low level of interpersonal maturity (Hunt and Dopyera 1965) High scores on this scale are associated with delinquency (Hunt and Hardt, 1965) PAGENO="0316" 1154 ECONOMIC OPPORTUNITY ACT AMEND~[EN7I'S OF 1967 and poor school performance. This test consisted of an Li- item forced choice scale on which the responses were made in relation to a line drawing in ~hicb one person was making a statement, e.g. "You are doing poorly" and the student selected between two alternatives, "What would you think? (a) He should say what he thinks or (b) He should mind his own business." Primary change measures a. Story completion test (Appendix 2, pp. 7-8) was included to provide an indirect measure of motivation for college in a similar fashion to that used by French (1958). This test consisted of the student's responding to the introductory part of a story, e.g. "Joe (Jane) is having a cup of coffee in a restaurant. He (she) is thinking of the time to cone when..." by writing a completion to the story in four minutes. The student also esti- mated the length of time taken up by the story. b. Importance and possibility of college graduation (Appendix 2, p. 13) was included as a direct measure of motivation for college. The student rated both the importance and the likelihood of college graduation on a five-point scale. c. Semantic differential (Appendix 2, pp. 18-23) uaa included to assess student attitude using those ratings scales which had been previously found useful (osgood, Tannenbaum, and Suci, 1957) with * some additions. The students expressed his attitude toward relevant concepts, e.g. "College" by rating it on several dimeri- sions, e.g. "good-bad", "dumb-smart". d. Interpersonal flexibility, or interpersonal understanding (Appendix 2, pp. 27-28 items 28-1~8) was included to measure the interpersonal aspect of Conceptual Level, or the capacity to look at others with PAGENO="0317" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1155 different perspectives (Hunt, 1964). This measure consisted of 21 items, e.g. "The best way to understand a person is first to put yourself into his shoes to see how he looks at things," to which the student responded on a 4-point agree-disagree scale. e. Self-esteem (Appendix 2, pp. 25-27 items 2, 14~ 8, 11, 14, 16, 18, 21, 24, 27) indexes the person's present level of self- adequacy (Hosenberg, 1965), and consisted of ten items, e.g. "1 feel that I have a number of good qualities." f. Internal control, or self-responsibility, (Appendix 2, pp. 30-31 excluding items 4 and 15) is defined as the degree to which a person sees himself controlling the outcome of his experience (Rotter, 1966), arid is measured by an abbreviated 13-item scale, e.g. selecting the alternative "Becoming a success is a matter of hard work, luck has little or nothing to do with it" rather than "getting a good job depends mainly on being in the right place at the right time." g. Future orientation (Appendix 3, pp. 25-27 items 5, 7, 10, 12, 15, 17, 19, 25) or one aspect of achievement motivation, is a measure of the degree to which a person is willing to postpone immediate gratification for future reward (Strod.tbeck, 1958) measured by a 9-item scale, e.g. disagreeing with the item "People should just live for today and let tomorrow take care of itself." h. Alienation (Appendix 2, pp. 25-27 items 1, 4, 9, 13, 20, 22, 23, 26) measures the degree of a person's distrust and dis- engagement from others,. as measured by an 8-item scale, e.g. "These days a person doesn't know who he can depend on." The five-item anomie scale (Srole, 1956) combined the three items PAGENO="0318" 1156 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 from the `Faith in people" scale (Rosenberg, 1965) because they were very highly correlated. In contrast to all other measures, alienation, as an index of program effectiveness, was expected to decrease. Secondary change measures a. Occupational aspiration (Appendix 2, P. 10). Each student wrote four occupations he would like to be working at if things went well and four which he would settle for three to five years after high school graduation. b. Self-anchored ratings (Appendix 2, pp. 10-11). Each student rated (1) himself three to five years after high school graduation, (2) the average person in his school after the same period of time, and (3) going to college, each on a 15-point "ladder" scale: (Cantril, 1965). c. Plans (Appendix 2, p. 12) Each student wrote in a few sentences the way he planned to reach his occupational goals. d. Activity and occupational p~ferences (Appendix 2, p. 2~ and p. 29). Each student selected the two most important and the two least important of a list of eight activities and eight characteristics of jobs. 3. Program Rating Scales. Site visitors made ratings on five components (Program Organization, Program Control, Program Warmth, Program~ Flexi- bility, and Program Corrsnitnent) which ware described in a manual (see Appendix 3). Ratings were made on a 5-point scale. ~. Program Climate Questionnaire (PCQ) was a specially developed 11-page instrument (Appendix l~) to measure characteristics of Summer Upward Bound programs. Students responded anonymously to 86 statements e.g. `When the students make suggestions, the program is changed" on a PAGENO="0319" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1157 four-point, scale ranging from "Definitely true' to "~finitely false'. PCQ items were classified and scored in eight program component scales: Flexibility, Autonon~r, Ind.ividuation, Student Evaluation, Warmth, Supportiveness, Group Harmony, and Staff Harmony (Appendix 5). PCQ also included the student's free response about which features of the program were most valuable and suggestions' for changes, as well as ratings of students in program and specific program characteristics. 5. Post-program Student Questionnaire was a shortened (22-page) version of the Pre-program Questionnaire which omitted certain measures not expected to reflect change, e.g. Sub I scale. A 20-item vocabulary test was also included. D. Procedure in Administering Measures. 1. Biographical Questionnaire was. administered during the first week in 213 of the 2l~4 programs by a member of the local staff, and required approximately 30 minutes. . 2. Pre-program Student Questionnaire was administered to students in each of the 21 target. programs during the first week of the program. Questionnaires were administered to groups no larger than 50 students by a member of the Characterization Project staff in a two-hour period. Students were told that their responses would be treeted confidentially and would not be seen by anyone on the local staff. 3., Program Rating Scales were completed by site visitors at the time of, or immediately following, the two-day site visit. Rating scales were available for 161 of the 2ll~ programs. Program Climate Questionnaire (PCQ) was administered by a Characterization Project staff member during the last week of the sunnier program to students im the 21 target programs who completed it anonymously in about 30 minutes PAGENO="0320" 1158 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 5. Post-program Student Questionnaire was completed immediately following the PCQ, and required about 90 minutes. E. Procedure for Scoring Measures. 1. Biographical Measure. flesponses were coded, punched, and analyzed by proportions of students in program. Proportion of response to each item were recorded not only for each of the separate programs, but also by each of the seven regions, for a ten percent random sample, and for the total target sample. 2. Pre-program Student Questionnaire Scoring Dispositional Measures a. Paragraph Completion Test. Each of the six responses was scored on a scale from 0 to ~ using a revised version of the manual of Hunt and Halverson (l96I~). Conceptual Level (CL) score was obtained for each student by calculating the mean of the highest three scores (Schroder, Driver & Streufert, 1967). Inter-rater reliability among raters ranged from .66 to .81~. Scores of the more experienced rater were used in calculating CL. To classify individuals as low, intermediate and high CL, the following procedure (similar to that employed earlier by Hunt, 1966) was used. CL Score Per cent of Students Low 1.3 or less 32.0 Intermediate ~ - 2.0 37.2 High 2.1 and more 30.8 The proportion of high CL students was later used to classify programs according to predominant type of student. b. Sub-I Scale was scored on a scale from 0 to II (See Appendix 6). - The median Kuder-Riohardson coefficient for Sub-I Scale was .73. PAGENO="0321" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1159 Scoring Primary Change Measures a. Story completion test. Each of the two stories was scored for whether the student mentioned college in the story. Inter-rater agreement was 94 per cent. b. Importance and possibility of college graduation. The imoortance and possibility scores were obtained directly from the students' response: "If graduation from college is: Extremely important, give 5 points Very important, give 4 points Fairly important, give 3 points Slightly important, give 2 points Of no importance, give 1 point The possibility scale was as follows: If graduation from college is: Extremely possible, give 5 points Very possible, give 4 points Fairly possible, give 3 points Slightly possible, give 2 points Not possible, give 1 point Thus, each student obtained both an importance and a possibility score. c. Semantic differential. On the basis of intercorrelations, four dimensions (pleasant, nice, polite, and good) were combined into an evalt~tive index for each of the six concepts (See Appendix 7 for interäorrelations). The evaluative index was computed by assigning a value from 1 (bad) to 7 (good) to each of the student's four responses so that the range was from 4 to 28. Kuder- Richardson coefficients of the evaluative index for the six concepts 80-084 O-67-pt. 2-21 PAGENO="0322" 1160 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 ranged from .71 to .90 with a median of .86. In order to obtain a measure of self-evaluation of intelligence the student's rating of ~rself on the `dumb-smart" scale was recorded (range 1-7). d. Interpersonalfiexibility was scored using thekey in Appendix 6. Since each item was scored from 1 to L~, the possible range was from 21 to 8L~. The median Kuder-Richardson coefficients was .56. e. Self-Esteem was scored using key in Appendix 6. Possible range of scores was from 1~ to 14Q, and median Kuder-Richardson coefficient was .67. f. Internal control was scored according to the key in Appendix 6. Scores ranged from 0 to 13, and the median Kuder-Richardson coefficient was .50. g. Future orientation was coded for disagreement with all nine items: 3, 5, 7, 10, 12, 15, 17, 19, and 25 (Appendix 2, pp. 25-27). Total scores ranged from 9 to 36, and the median Kuder-Richardson coefficient was .72. h. Alienation was scored for seven items (1, 9, 13, 20, 22, 23, and 26 on pp. 25-27, Appendix 2) on a four-point scale coded for agreement in all seven cases and on one item (I~ on p. 30, Appendix 2) coded for alternative b. Therefore, total scale scores ranged from 8 to 30, and the median Kuder-Richardson coefficient was .58. Secondary Change Measures a. Occupational aspirations. EdOh of the occupations was coded according to three scales: Education required (from 1 to 8), Mental Skill required (from I to 9), and Status (from 1 to 7). These three scales ware sunned to obtain an overall aspiration index (ranging from 3 to 21k) for each occupation, e.g. aspiration PAGENO="0323" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1161 * - index for architect = 22, r~or aut mechanic 13. A mean score or the indices for the four high occupations and for the four that the student would settle for were both calculated. * Self-anchored ratings for self, other, and college was the score (from 1 to 15) at which the student rated each of these concepts ~on the ladder. Plans. The studentts statement of plans was scored for the degree of integration from a score of 1 (totally unrelated to stated goal) to 7 (maximum integration of mean toward goal attainment). Plans were also scored on a 3-point scale for the degree to which college was included. d. Activity and occupational preferences. Each item was scored by subtracting the frequency of "least important" mentions from the most important mentions. Program Rating Scales. Five ratings as made by site visitors on a five- point scale were used. Program Climate Questionnaire. The items on PCQ were scored accordin~c to eight subscales (seeAppendix 5)~ Number of items and Kuder- Richardson coefficients follow: PCQ was developed especially for characterizing Summer Upward Bound urograms, and the a priori scales were based on pilot work in five nearby orograms; current results are being analyzed to increase the homogeneity end discriminative precision of the scales. PAGENO="0324" 1162 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Scale Number of items K-R Flexibility 10 .614 Autonomy 15 .66 Individuation 13 .72 - Student evaluation 10 .80 Warmth 11# .614 Supportiveness .724 0 Group harmony 13 .8o Staff harmony 5 .65 5. Post-program Student Questionnaire. These measures were scored in the same way as the Pre-program Questionnaire. III. Results A. Student Characteristics 1. Biographical Questionnaire. Results of responses of all students to each question are contained in Appendix 8, and the National Profile is presented in Appendix 9. Responses of students in the target programs were similar to the total population (ten per cent random sample) as indicated in Appendix 10. 2. Dispositional Measures. a. Conceptual level. The results for Conceptual Level (CL) are presented in Table 8 by target programs and by total group. The overall CL mean of 1.90 is significantly lower ( < .01) than that of 2.02 obtained in a sample of boys attending a suburban high high school indicating that the Upward Bound student is somewhat lower in interpersonal maturity than a middle-class sample. (Hunt and ~pyera, 1966) PAGENO="0325" Table 8 CONCEPTUAL r~viso (INTERPERSONAL MATURITY) SCORES Program and Total Mean Proportions and Scores CL Score Proportion of CL Low Maturity Score (Sub I) Lo Medium Iii - 1.82 35.7 36.8 27.7 3.81 Target Program Number 11 12 13 15 21 22 23 25 27 31 32 41 42 43 51 53 54 61 62 71 73 TOTAL 2.18 2.03 2.06 2 * 12 1.80 1.74 2.17 1.90 1.57 1.82 1.88 2.04 2.07 1.83 i.8~ 1.78 1.83 1.60 1.69 2.07 1 .90 12.8 19.5 20.0 8.1 25.1 46.8 12.1 33.5 49.3 38.8 34.3 23.8 24.1 42.4 27.7 41.7 29.4 50.5 42.3 12.6 32.0 30.7 39.6 27.3 4o.8 62.5 28.7 40.4 33.5 33.3 25.2 35.8 38~l 35.2 27.3 50.8 38~9 48,4 31.0 37.6 44.8 37.3 56,3 41.1 52.8 51.0 12.5 24.6 47.5 33.5 17.3 35.9 30;O 38.1 40.8 30.3 21.6 19.4 22.2 18.3 20.3 42.5 30.8 1.74 2.18 2.51 2.24 2.84 2.28 2.05 2.34 2.22 i .6s 2.20 4.71 1.72 2.11 2.86 3.07 2.24 2.48 2.37 2.03 2.46 0 0 0 0 ci H C) I PAGENO="0326" 1164 ECONOMIC OPPORTuNITY ACT AMENDMENTS OF 1967 b. Self-Esteem. The pre-prograia mean on self-esteem for the sttfdents in the target sample was 27.914 which was significantly lower <.001) than the score of 29.21 reported by Rosenberg (1965) for 1678 New York State high school students indicating that the typical Upward Bound student is initially lover than a random sample of high school students in self-esteem. - C. Internal control. The mean score of the Upward Bound group on Pre-program Internal Control was 9.29 (on a 13-point scale) which was unexpectedly higher ((.001) than that reported for a national sample of 1000 high school students in the Purdue Opinion Poll sample whose mean was 8 57 (Franklin, 1963) B. Program Characteristics 1. Program Rating Scales were available for 161 programs. Table 9 presents the correlations between the program scales. Table 9 Intercorrelation of Program Scale Ratings 1. Organization .20 .145 .147 .57 2. Control .17 .(~6 -.02 3. Warmth .61 .614 14. Flexibility .78 5. Coasnitment With the exception of Program Control, the dimensions show a fairly high interrelationship which probably indicates a general evaluative factor. Program Control ratings should probably be PAGENO="0327" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1165 interpreted with some caution because some site visitors experienced difficulty in rating this dimension. In some cases, it was not completely clear that a low rating simply meant, as the manual suggested if the program permits the students to determine their schedules and activities entirely or allows the students to be com- pletely on their own which~ was intended to be descriptive and might occur in a variety of patterns, i.e. democratic-reflective, unstructured- - permission, etc. However, generally the ratings appear to provide a reasonably accurate profile of each program rated along these dimensions. 2. Program Climate Questionnaire. The correlations between the eight scales are presented in Table 10. Responses to PCQ will be further analyzed for possible future use, but for present purposes, it is noteworthy that flexibility and autonomy are highly related, and these scores will be used in a later section as a major program characteristic. The correlation between site visitor ratings and PCQ for flexibi- lity was ~ and for warmth, .1~3. Means and standard deviations for 21 target programs are in Appendix U. PAGENO="0328" I. C) 0 0 Table 10 C) INTERCOREELATIONS OF GROUP CLIMATE QUESTIONNAIRE 0 2 3 5 1 FLEXIBILITY 80 76 56 68 2 AUTONOMY 87 56 83 3 INDIVIDUATION 56 83 ~ EVALUATIO~? 5 WARMTH 6 SUPPORTIVENESS 7 GROUP HARMONY 8 STAFF HARMONY N = 335 7 8 68 56 1~6 78 56 71 80 67 63 82 76 71 91 77 77 87 83 614 PAGENO="0329" ECONOMIC OPPORTuNITY ACT AMENDMENTS OF 1967 1167 C. General Impact of Summer Programs Impact of summer programs was measured by comparing the mean score on the Post-program Student Questionnaire with the mean score on the Pre-program Student Questionnaire based on those students for whom both measures were available. For most cases, the number of students was 1622. In all instances except alienation, it was expected that an increase in score would indicate positive program impact. Note was also taken of the number of 21 target programs which showed an increase on each change measure. Primary Change Measure Results (See Table 11) 1. Motivation for college. This index increased from 22.2 per cent to 33.1 per cent, an increase of 10.9 per cent which is significant (.01). Motivation for college increased in 20 of the 21 target programs (See Appendix 12 for mean scores by target program). 2. Importance and possibility of college graduation. Importance of graduation from college score did not increese significantly primarily. because the pre-program mean score was very high (4.53 on a 5-point scale). The possibility of college graduation increased from 3.11 to 3.90, an increase that was significant ( <.01), and was observed in 11 of the 21 target programs. 3. Attitude measures. The pre- and post- scores on the semantic differential evaluative index are summarized in Table 12. In all cases, there was a slight decrease in the score. The most likely explanation for this otherwise puzzling trend is that since the pre- program measure was actually administered during the first week of the program, these very high initial scores probably reflect the students' initial enthusiasm to the program. This initial very high level (e.g. 25.88 on a scale ranging from 7 to 28) made it almost PAGENO="0330" Table 11 Change in Total Mean Scores of Primary Change Measures * = Chi Square ** = Scores are expected to decrease N = 1622 0 PTJ CC C) Pre-program Mean Post-program Mean Significance No. of Programs Differences t Level with Positive Change Measure I. Motivation for college 22.2% 33.1% +10.9% 50.65* <.01 20 2. Importance of college graduation 1~.53 1~.58 + .05 1.72 not significant 12 3. Possibility of college graduation 3.73 3.92 . + .19 5.58 <.01 17 4~ Self-evaluation of intelligence 5.12 5.29 + .17 1~.29 <.01 18 5. Interpersonal flexibility 57.61~ 58.31 + .67 3.5l~ <.01 17 6. Self-esteem 27.91k 28.30 + .36 2.67 (.01 16 7. Internal control 9.29 9.67 + .38 5.13 <.01 20 8. Future orientation 26.6l~ 26.60 - .014 -- not significant 10 9. Alienation 18.77 18.914 + .l7~-* -- not significant l2** LTI 0 0 C) 0 0 ci C) PAGENO="0331" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF :1967 1169 impossible for the scores to increase at the post-program administration. Therefore, the most reasonable conclusion would seem to be that the program sustained the high level of attitude which was initially produced. PAGENO="0332" 1170 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Table 12 Mean Attitude Scores Pre-program - Score Post -program Score 1. Attitude to suamer program 25.88 24.96 2. Attitude to college 24.34 23.96 3. Attitude to teachers 25.36 24.98 4. ~ttitude to i~rse1f 23.02 22.83 5. Attitude to kids in program 23.39 22.59 6. Attitude to kids back home 20.90 20.60 4. Self-evaluation of intelligence. The nean score for self-rated intelligence increased from 5.12 to 5.29, an increase of +.17 which was significant ( <.01), and occurred in 18 of the 21 target programs. 5. Interpersonal flexibility. The interpersonal flexibility scores increased from 57.64 to 58.31, an increase of ÷.67 which was signifi- cant ( < .01), and occurred in 17 of the 21 programs. 6. Self-esteem. This measure increased from 27.94 to 28.30, an increase of -f-.36 which was significant ( <.01), and occurred in 16 of the 21 programs. 7. Internal control. These scores increased from 9.29 to 9.67, an increase of +.38 which was significant ( <.01), and occurred in 20 of the 21 programs. 8. Tature orientation. The post-test mean scores of future orientation of 26.60 was almost identical to the pre-test mean of 26.64, so that no chance was evident; increases were observed in approximately half, i.e. 10, of the 21 programs. PAGENO="0333" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1171 9. Alienation. Alienation scores were expected to decrease in successful programs but there was no significant change. The pre-test rcc~r.n var 18.77 and the post-test mean was l8.91~, with decreases occurring in only 9 of the 21 programs. 10. Proportion of students changing on primary measures. In addition to considering change in terms of total group and by programs, the occurrence of change was also considered by calculating for those primary measures which showed significant change the proportion of students (out of the total 1622) who increased, stayed the same, or decreased on the measure. Those results are summarized in Table 13. Table 13 Primary Change Measure 1. Motivation for college 2. Possibility, of college graduation 3. Self-evaluation of intelligence ~. Interpersonal flexibility 5. Self -esteem 6. Internal control Secondary Change Measure Results 1. Occupational aspirations. The occupational aspiration index for those jobs a student would like if things go well for him did not change significantly, nor did the occupational aspiration index for the joh3 hu i~ou1d setcic for, . . Proportion of students who: Net Ti~creaaed Stayed Same Decreased Incrense 20.6 69.9 9.5 11.1 32.5 47.J4 20.1 32.2 21i~ 10.8 50.7 io.6 38.8 , 11.9 46.3 15.1 38.7 , 7.6 : `47.2 22.1 30.7 16.5 ` PAGENO="0334" 1172 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF `1:967 2. Self-anchored ratings. The rating of oneself in three to five~years after high school (as indicated on the 15-point ladder) increased from 10.12 to 10.71, an increase of +.59 which was signfficant~( <.01), and the increase occurred in i8 of the 21 programs. However, the ratings of the average person in high school also increased fron~7.l~2 to 8.29 (<.01) which occurred in 19 of the 21 programs. The rating of college on the 15-point scale increased slightly from ll.63to U.77, but this was not significant. 3. Plans. Neither the index for degree of integration in planning nor the college index showed significant increases, the former increaaing+.03 and the latter remaining the same. ~ Preference for activities, occupational characteristics and suamer goals. Students were asked to select the types of program activities they felt would be most useful in helping them to achieve their goals. - ~Frbm the eight item list students initially placed highest priority on `studying and serious reading," `lectures and classes~ and "informal talks with staff." ~hile at the end of the program these ectivities~ were still the most highly valued, some interesting shifts had occurred. `Informal talks with staff," `field trips," and "bull sessions with students' were all given higher valuations at the end of the program: than they received originally. Thus, over the course of the sumser; students discovered that the informal aspects of the program had greater benefits than they had originally anticipated. Early in the program, students were asked to select the main goals which they wished to realize during the suimner. They assigned high priority to "improving study habits, " "learning how to apply to college," and "meeting newand interesting people." At the end of the program, students were asked to report which goals they felt had been realized. They indicated that they were most sure they had achieved those goals they valued most highly. PAGENO="0335" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1173 D. Differential Impact of Summer Programs. ~ An observer of different Upward Bound programs is quickly struck by the variety and approach among programs. However, it is not simply a question of which kind of program among these different approaches is better.than others, since the effectiveness of a particular approach will dependupon the kind of students in the program. Evaluation procedures frequently attempt to identify the "best programs without considering the variety of students in these programs. In the present view, the issue is not "Whichprogrsm is best?, but rather Which. programs are more effective with certain kinds of students?" Some earlier work investigating the differential effectiveness of educational environments upon culturally disadvantaged students found that a highly structured class- room environment was most effective for students of low Conceptual Level while .a more flexible classroom environment was most effective for students of high Conceptual Level (Hunt, 1966). In order to investigate such differential program effectiveness, there- fore, the 21 target programs were classified according to (1) predominant type of. student (low vs. high Conceptual Level or interpersonal maturity), and.(2) type of program approach (structured vs. flexible). The use of the structure-flexible dimension as the major program characteristic was justified not only by the theoretical basis.of its earlier iraportence (Hunt, 1966), but also because program flexibility--autonomy was found to be one of the most important dimensions along which the 21 programs varied. Because of the high relationship between flexibility and. autonomy (r = .60), these two dimensions were combined to provide an index of program flexibility. . Programs were divided by splitting them into a low group with scores averaging 50 or below - (bottom 11 programs) and a high group with flexibility--autonomy scores greater . than 50 (top 10 programs). Next, the programs were independently PAGENO="0336" 1174 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 classified according to the proportion of high CL students in the program (See Table 8) by splitting them into a low group where less than 30% of the students were high in CL or intcrpersonej. maturity (9 bottom programs) and a high group with 30% or more of the students high in CL or interpersonal maturity (top 12 programs). Each program was then considered as being either structured or flexible and as enrolling predominantly low or pre- dominantly high CL students. According to this classification, there were programs in the Structured-Low CL category; 7 programs in the Structured- High CL category; 5 programs in the Flexibility-Low CL category; and 5 programs in the Flexibility-High CL category, It should be emphasized that this use of a median split classification was very general and therefore, the descriptions of structured-flexibility and low-high CL should be accordingly regarded as general, and relative to the present sample of 21 programs. (See Appendix 13) On the basis of a conceptual systems change model (Hunt, 1966), greater effectiveness was expected for structured approaches in the programs. with predominantly low CL students and for flo::i~lo aporoaches in programs with predominantly high conceptual level students since both these combinations are considered to be matched'. Low CL students, because of their relatively concrete orientation, should function best and be more likely to change when the program approach is clearly structured, well organized, and the students know what to expect. By contrast, high CL students who are more inquiring and more independent, should function best and be more likely to change in a reflective environment which is more flexibly attuned to their independent orientation. Therefore, the Structured-Low CL group and the Flexible- High CL group were generally considered to be "matched" while the other two groups were considered to be "mismatched". PAGENO="0337" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1175 In order to investigate the occurrence of differential program effecti- veness, seven change scores were considered. Change in attitude to the summer program and those six change measures which increased significantly (Table 11) were analyzed in this fashion. Results are summarized in Table ~ Analysis of variance was employed in order to determine whether the positive changes brought about were attributable to (1) program structure alone, (2) student CL alone, and (3) match between program structure and student CL (interaction). Table lL~ presents the mean scores of the 1~ combinations and the mean scores for programs classified according to program structure, student CL and matching. When change in attitude to summer program is considered, the change is greater for students in `matched programs than in "mismatched" programs, confirming the assumption of matching. Put most simply, students like a matched program better than a mismatched program. The differential results of the six primary change measures which shoved a significant overall change, reflected considerable evidence for differential effectiveness. In the case of three measures (motivation for college, possibility of college graduation, and interpersonal flexibility), the "matched" programs show significantly greater change ( (.05) than the "mismatched" programs. In the case of measures (self-evaluation of~ intelligence, internal control) there is a atrong tendency ( ( .10) for the matched programs to produce greater change than mismatched programs. For these five measures in which differential effectiveness was observed, only one instance of a main effect produced by program approach or type of student was observed (effect of program structure upon possibility of college graduation). In the other four measures it is only when one considers the degree of matching of student and program that one is able to pinpoint what determines for effectiveness. By contrast, change in self esteem apparently 80-084 0-67-pt. 2-22 PAGENO="0338" Table 114 Effect of Student Conceptual Level and Program Structure on Primary Change Measures Change in Change in Change in Change in Change in Change in Change it attitude to motivation possibility of self -evaluation interpersonal self- internal Program Grouping summer program for college college graduation of intelligence flexibility esteem 1. Low CL - Structured + .30 .17 .99 .23 .57 1.00 * 314 .09 .70 .19 12.02 2. Low CL - Flexible -1.07 11.36 3. High CL - Structured - .91 6. ~l 14. High CL - Flexible - .30 11.52 Total Low CL programs - .146 11.65 (1+2). Total High CL programs - .66 8.142 (3+14) Total Structured programs - .147 8.32 (1+3). Total Flexible programs - .68 11.1414 (2+14) Total Matched programs - .03 11.714 (1+14) Total Mismatched programs - .98 8.36 (2+3) F `F Effect of CL . . , 1.114 >.lO Effect of progrem structure - Effect of matching ~.145 3.19 H (interaction) (.05 (.05. .25 .20 - .01 .30 .22 .12 .08 .25 .28 .08 F 1.37 3.63, (.05 6.96 <.025 .114 .014 .30 .15 .15 .09 .22 214 .oO F 1.08 >.l0. 1.73 (.10 control .26 .50 .141 b.36 a .35 .141 .51 .28 (12 0 -~1 2.75 (.10 .57 .20 .75 .149 .72 .57 .61 .114 .99 .214 .143 , .1414 F F 1.18 -- , 3.30 3.16. -- (.05 PAGENO="0339" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1177 is more likely to occur in structured programs generally than in flexible programs ( `(.05) with no evidence for differential effectiveness as a result of matching. IV Summary and Conclusions A. Student Characteristids The typical Upward Bound student was sixteen years of age, in the tenth grade, and came from a family whose average income was $3,31~1. Compared with the national average, the Upward Bound students were less likely to be living with both parents and the father was less likely to I~ave received anypost- high school education In terms of academic accomplishment, there was great variation between programs but the general trend seemed to indicate that the typical student was slightly below average in academic achievement. Compared to a sample of suburban high school boys, the Upward Bound students were lower in Conceptual Level Compared with a large sample of New York State high school students, the Upward Bound students were lower in self-esteem However, compared to a national sample of teen-eger they were higher in self-responsibility. Whether or not this rather surprising finding reflects some special characteristic of the internal control scale will require further investigation B. Program Characteristics The enormous variation in summer Upward Bound programs was in part captured by the results of the Program Climate Questionnaire. A major source of variation was ti e degree of flexibility provided for the students in the program. Although some revisions may be made in the instrument based on factor analysis and site visitor reports, the results from the PCQ seem to be sufficiently encouraging to warrant recommending its use in all summer 1961 programs The feedback of such results to project directors should be valuable in helping theta to appraise the strengths andweaknesses of their particular programs PAGENO="0340" 1178 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 C. General Impact The summer Upward Bound programs produced significant increases in (1) motivation for college, (2) importance of possibility of college gradua- tion, (3) self-evaluation of intelligence, (14) interpersonal flexibility, (5) self-esteem, and (6) internal control or self-responsibility. Whether or not these increases in academically relevant areas will be sustained and transformed into increases in academic accomplishment remains to be seen, but they give considerable encouragement in terms of the effects produced by a relatively short term program. No significant increases were noted on the measures of (1) importance of college graduation, (2) future orientation, and (3) alienation. D. Differential Impact of Sumner Programs The increases described above were generally more likely to occur when the program approach was geared to the predominant type of student in the program. Students preferred a matched program and in the case of five of the six primary change measures which increased, these changes were more likely to occur in matched programs (i.e * a structured approach for pre - dominantly low CL students and a flexible approach for predominantly high CL students. The implications of these differential findings require considerable caution, but there would seem to be a possibility for making suggestions to directors planning subsequent programs to increase effectiveness if information is available regarding the Conceptual Level of the students in the program. E. Suggestions for the Future Obviously, it will be important to index the impact of the summer programs upon the students' academic achievement, and such work is now under way. In subsequent projects aimed to characterize summer Upward Bound programs, it would seen valuable to include in the evaluation procedures some "in depth" interviews and/or observations of specific students to accompany and amplify results from the more objective approaches. PAGENO="0341" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1179 References Cantril, H. The pattern of human concern. New Brunswick, N.J. Rutgers University Press, 1965. Franklin, R.D. Youth's expectancies about internal versus external control of reinforcement related to N variables. Unpublished doctorsl dissertation, Purdue University, 1963. French, Elizabeth. Development of a measure of complex motivation. In J,W. Atkinson, Mot~vesir~fantscy actio~, r-id society. New York: Van Nostrand, 19587 pp. ~2..25 Hunt, 0.E. Personality patterns of adolescent boys. NI~i Progress Report, 19613. Hunt, D.E, A conceptual systems cha~ige model and its application to education. In O.T. Har--ey, ~ I~ew York: Springer, 1966, pp. 2(73Ci2. Hunt, D.E. and Dopyera, J. Personality variation in lower-class children. Journal of p~9holo~, 1966, 62, 47-513. Hunt, D.E. and Halverso~i, C.F. Manual for scoring sentence completion responses for adolescents. Unpublished ms., Syracuse University, 1964. Hunt, D.E. and Has~t, R~H. Developmental stage, delinquency and differential treats~rnt. ournai of research in erie aaddelia~uency~ 1965, 1, 20-31. Osgood, C.E.,Suci, G.J., and Tannenbaum, P.S. The measurement of meaning. Urbana, fllir.ois: University of Illinois Press, 1957. Rosenberg, H. OccupatLnns and values. Glencoe, Illinois: Free Press, 1957. Rosenberg, M. Soc~ta~d the adolescent self-image. Princeton: Princeton University Press, 196~ Rotter, J.B. Generalized expectancies for internal versus external control of reinforcement. Psychological monographs. 1966, 80, No. 1 (whole No. 609). Schroder, H.M., Driver, M., and Streufert, S. Human information processing. New York: Holt, Rinehart, and Winston,' l9~ Srole, L. Integration and certain corollaries. American sociological review. 1956, 21, 709-716. Strodtbeck, F.L. Family interaction, values and achievement. In McClelland, D.C., at. al. Talent and society. New York: Van Nostrand, 1958, pp. 135-194. PAGENO="0342" 1180 ECONOMIC OPPORTUNITY ACT AMENDMENTS OP 1967 Mr DELLENBACK May I ask one more question of Dr Frost2 Chairman PERKINS. Yes. Mr. DELLENBACK; You earlier gave us some data as to the percent- ages of race and origin of young people involved in the program. As I recall, it was 51 percent for Negro and 30 percent of Caucasian, `tnd then Spanish American and Indi'~n, and so on Is any attempt made in administering the program to fix.theseper- centages in advance? Is that a~ random chance result or is there sOme- thing other than that mvolved mit2 Mr FROST It is purely random We make the grants to the colleges Our guidelines suggest that the colleges ought to. develop Upward Bound classes that are roughly consonant with the poverty population they are serving. So if it is largely Negro, it will end up that way. If it is largely Indian, it will end up that w'Ly Mr. DELLENBACK. Do you know whether these percentages roughly correlate to the overall origin percentage of the "poor" throughout the United States? Mr. FROST. No, I do not. I have the impression that they :do,'but I don't know Do you kn2 Mr LEvn~ie I am sorry Mr FROST Of the 1,400,000 poor m America, 50 percent are Negro Mr. Li~vn~. Thirty percent are Negro. Mr. FROST. Of the poor in this age group, could 50 percent. be Negro2 Mr DELLENBACK You have answered the first question by saying you have not deliberately sought to achieve any percentage bythe way you award grants You have given general guidelines to the college or university where the grants are awarded It is roughly random or chance sampling that comes out of it It correlates to the overall percentage Mr FROST That is right Mr DELLENBACK Ag'un, we don't need it at this particular moment, but I would like to have that particular statistic Mr QUItE Will the gentleman yield2 Isn't it true that in Mississippi and Alabama only Negroes partici pate in the Upward Bound program because there has not been the cooneration for white people to participate2 Mr FROST That is true in Mississippi, sir The only grant we have made in M1ssissipni, the only applic'int we ever got from Mississippi, was Tougaloo College They tried to get white youngsters in and could not get them In Alabama we h'td the same case in 1986 This year Sprmghill College in Mobile came in and it will take a regular, integrated program Mr. LEvItNB. About 38 percent of the poor youngsters in this age group are nonwhite, to answer the previous question Mr. DELLENBACK. So we have~an overall statistic of about 38epercent nonwhite but the participants in the program are about 51 percent Mr FROST Are Indrins in nonwhite2 Mr LEvmn~ Indians are in nonwhite The Spanish speaking are counted as white Mr DELLENBACK Then we roughly have 38 percent versus 5 percent Chairman PERKINS. Are there further questions? PAGENO="0343" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1181 Mr. Meeds. Mr. MEEDS. Thank you, Mr. Chairman, I would just like in regard to this cost-benefit analysis thing, to point out that the Congress, vari- ous committees of the Congress, have for a number of years, and I speak. of, the Public Works Committee, the Armed Services Commit- tee, and almost all of the committees dealing with material things, have been operating on cost-benefit ratios for a number of years. A. cost-benefit ratio analysis presupposes the question of: Does the investment of this amount of money return a benefit. It is not a ques- tion of..whether it is done or not, as the gentlewoman from Oregon implied. It is a question of if we understand that this thing does show abenefit. I would. like to compliment::you people for bringing this type of analysis into the social field I think it is an excellent tool I agree with the gentleman from Oregon that there it certainly is rio answer to everything but it is a valuable piece of evidence as to whether the investment in terms of dollars and in a material sense is going to return a profit. I also would like to point out that there seems to be some con- fusion, at least I am a little confused at this point, as to whether the advocates of the Opportunity Crusade are saying that this should be put into the Office of Education at the same time they are proclaim- ing, that, it can be part of a community action program. I am con- fused as to how these two things can be done. Mr. QuJE. Under the Opportunity Crusade community action would be in HEW and the Office of Education handling of any programs woulc1~be through community action agencies as well. Mr.~ MEEDS. So this would be a further splinter from .HEW to the Officeof Education. Mr. QUIE. Under the Opportunity Crusade there is no proposal that Upward Bound be a part of the Office of Education. Upward Bound could be financed by the community action agencies under the versa tile program just as they have been heretofore Mr MEEDS `Would it then be under the Office of Education ~ Mr QUIE It would be under HEW with that plan The other sug gestion was made by Mrs Green in the higher education bill hearings that the Office of Education coordinate and administer not only Tal ent Search but also Upward Bound Mr MEEDS Would it put it under the Commission of Edu it ion not under HEW ~ ~M:r QmE And this is the testimony by Mr Muirhead I read into the record frOm our hearings at that time. Mr MEEDS Thank you for the clarification Chairman PERKINS Mr Gibbons ~ Mr. GIBBONS. No questions. Chairman PERKINS Are there further questions from anybody ~ Mr Steiger ~ Mr STEIGER The one statistic that again we can get back to, did I understand you correctly, Dr Frost, that the 8 percent non Upward Bound poor youth that you estimate now go to college are defined only as those who attend `i four year college or university ~ Dr FROST We use the Office of Education book on this and it is accredited or institutions that had `some kind Of general curriculum PAGENO="0344" 1182 FICONOMIC OPPORTUNITY ACT AMENDMEN'rS OF 1967 in contrast to the youngster who goes to a very specific technical night school or something to that effect. Mr. STEIGER. You stated though that this related only to 4-year colleges and universities? Dr. FROST. Typically institutions with general curriculum or 4-year institutions but there are a great many, and many more recently, as you know, junior colleges that have it. Mr. STEIGER. Are these included? Dr. FROST. Yes, sir. Mr. STEIGER. I think it is important that this be clarified because if it were only 4-year colleges or universities frankly I think the figure might be somewhat higher. There would be a larger percentage of poor youngsters capable of college who would attend a. junior college or a community college. Dr. FROST. We all have a great deal of difficulty with the definitions of these things. Something caJled post-secondary education might be a flying school or hair dresser school. It could be a great many things. I think you may recall that the GI bill people had a very difficult time with that fact some years ago. Mr. STEIGER. Do you have any information at all on the figures on the poor youth in this country who attend a 2-year technical school, for example? Dr. FROST. I do not. We could try to develop that information. Mr. STEIGER. I think, Mr. Chairman, it might be of some value frankly for all of us to have that information. Chairman PERKINS. If the gentleman has any information of that kind I know he will cooperate with you. Mr. GIBBONS. Included in that 8 percent figure are accredited junior colleges, is that right? Dr. FROST. Yes, sir. Mr. GIBBONS. And 4-year institutions? Dr. FROST. Yes, sir. Mr. GIBBONS. But they must be accredited, is that right? Dr. FROST. That is the list we were working on, yes. Mr. GIBBONS. Thank you. Chairman PERKINS. Mr. Dellenback. Mr. DELLENBAGK. Mr. Chairman, can you give us an indication of what the program is relative to this afternoon in relationship to the House? Chairman PERKINS. This afternoon we will complete I hope the other educa~ion aspects of the community action program, Follow-up and Headstart. If we do there will be general questions. Tomorrow we will hear from the Labor Department. Monday if we don't complete with Sar- gent Shriver, today, on Job Corps we will have the Job Corps people back on Monday. We are trying to give the Office of Economic Opportunity every opportunity to make a complete presentation of their program. Mr. DELLENBACK. I have some personal concern. The debates are taking place on the floor relative to raising the ceiling on the debt limit. Chairman PERKINS. We will adjourn as soon as the debate com- mences. PAGENO="0345" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1183 Mr. QUJE. In the Upward Bound program, both the faculty mem- bers of~ the college and students at the college worked with the Up- ward Bound youth, is that right? Dr. FROST. Yes, sir. Mr. QUIE. To what extent is the work study program utilized to fund the college students who work with the Upward Bound youth? Dr. FROST. I would guess t.hat about one-half of the 2,700 college tutors working in Upward Bound are paid from work study. Mr. QUJE. Does OEO take the entire salary of the faculty that work with them or are there other sources for these payments as well? Dr. FROST. OEO pays for the portion of time that the college faculty members actually spends on Upward Bound, yes. Mr. QUIE. But there is no other source. Or are they expected to secure a percentage from some other place? Dr. FROST. Typically a college would put a person on in Upward Bound maybe 60 percent of the time and also have him teaching in the regular institution 40 percent of the time and paid out of their funds. Mr. QUIE. Are they required to put in any time on their own on a matching basis? Dr. FROST. Are you asking about the non-Federal share? Mr. QUIE. Yes. Dr. FROST. It is 90-10 this year and goes to 80-20 next year. Mr. QUIE. Do they utilize services of their professors for the non- Federal share? Dr. FROST. They do on occasion, yes. Mr. Qtml. Are those then the only two sources for either the college faculty or college students who work with the Upward Bound, either the work study program or OEO for the Federal share? Dr. FROST. Yes. There have been very few little pieces of research done on Upward Bound kids funded by OEO but it has been very small. Mr. QUIE. Thank you. Chairman PE1u~iNs. The committee will now recess until 1:45 p.m. (Whereupon, at 12:40 p.m., the committee recessed, to reconvene subject to call of the Chair.) (The following letter was submitted for the record:) THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE, Washington, DXL, July 3, 1961. Hon. CARL D. PERKINS, Chairman, House Education and Labor Committee, House of Representatives, Washington,D.C. DEAR MR. CHAIRMAN: In reading the transcript of the June 21 hearings on the Economic Opportunity Act Amendments, we noticed that some concern was ex- pressed about the relationship between Upward Bound and Palent Search. Since we are responsible for the administration of the Talent Search program, we thought that our view of the differences between them would be helpful to you. The differences are these: 1. Mission: Upward Bound's mission is to prepare under-achievers for college. As OEO's statements put it, "students selected for Upward Bound shall be those who have potential for success in college or other post-secondary educa- tion, but whose present level of achievement and/or motivation would seem to preclude their acceptance in a college, university, or other post-secondary in- stitution." So far as we understand the program, this is an accurate description. PAGENO="0346" 1184 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 On the other hand, Talent Search's mission is not a preparatory program but, as stated in the Higher Education Act of 1965, one of identification and eizcour- ~gement of "qualified youth" to complete secondary school and undertake post- secondary education, and encouragement of secondary school or college dropouts to reenter educational programs. While there is some small overlap with the Up- ward Bound target youth, "qualified youth" under Talent Search are limited to those with good high school records, good enough to qualify them for college entrance. Upward Bound serves the harder core youth with a poor high school record, who require major remedial programs. Upward Bound serves "poor youth with undemonstrated aptitude" who might, if given intensive academic remediation and enrichment, be prepared for post- secondary education. Essentially this means that Upward Bound works primarily with under-motivated youth. Talent Search, on the other hand, generally serves poor youth "with demonstrated aptitude" providing college admission and fi- nancial aids counseling for such youtb~ 2. Program: Upward Bound provides to poverty youngsters, at no cost to them, the full range of academic pre-college courses in residential summer schools and by tutoring and special classes during the school year. Medical and dental care is provided as well as a weekly stipend of up to $10 per week per student while on campus. Talent Search, on the other hand, counsels qualified youth about college careers and publicizes college admissions and financial aids data. Any remedial or com- pensatory work would be incidental. Subsistence, medical and dental care, and stipends are not provided. 3. Financial Status: Upward Bound is currently serving 22,000 poor youth in 250 projects at a Federal cost of approximately $1,250 per student. The faculty! student ratio is 1 :7. Talent Search currently serves 250,000 to 500,000 students in 57 projects at a Federal cost of $5 to $10 per student. The counselor/student ratio is 1 to 1100-i to 2200. 4. Community Involvement: Upward Bound projects operate in conjunc- tion with Community Action Agencies and the universities and colleges to pro- vide counseling, remedial, and supporting services and to identify youth. Talent Search, on the other hand, relies mainly on college and high school per~ sonnel for its counseling and publicizing projects, and the extent of community involvement varies from project toproject. The programs are presently quite distinct in their specific objectives and op- erations. Much of what is learned through Upward Bound, however, has been and will continue to be useful to us in the administration of the Talent Search program. We feel that it is essential to continue to support Upward Bound and the im- provements it is bringing about in dealing with the problem of reclaiming tal- ents that would otherwise be lost. A change at this time would, we believe, im- peril the substantial progress which is being made in helping disadvantaged youngsters develop their talents to the full reach of their potential. Sincerely, JOHN W. GARDNER, Secretary. PAGENO="0347" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 THURSDAY, IUNE 22, 1967 HOUSE OF REPRESENTATIVES, COMMITTEE ON EDUCATION AND LABOR, TVasliington, D C The committee met at 10 05 a m, pursuant to call, in room 2175, Rayburn House Office Building, Hon Carl D Perkins (chairman of the committee) presiding Present Representatives Perkins, Green, Dent, Br'tdemas, Scheuer, Meeds, Ayres, Quie, Goodell, Reid, Scherle, Dellenback, Eshleman, and Steiger Also present: H. D. Reed, Jr., general counsel; Robert E. McCord, senior specialist, Louise Maxienne Dargans, research assistant, Ben iamin F Reeves, editor of committee publications, Austin Sullivan, investigator; Marian Wyman, special assistant tO the chairman; Charles W~ Radcliffe, minority counsel for education; John R. Buck- ley, chief nunority in~ estigator, Dixie Barger, minority research spe cialist, and W Phillips Rockefeller, minority research specialist Chairman PERKINS The committee will come to order There is a quorum present I understand that the Secretary has had `~ bit of bad luck and that you are fortunate to be here, Mr Secretary I under stand that you may have had some STATEMENTS OF HON W WILLARD WIRTZ, SECRETARY OP LABOR, ACCOMPANIED BY R TIIAYNE ROBSON, EXECUTIVE SECRETARY, PRESIDENT'S COMMITTEE ON MANPOWER, STAN LEY H RUTTENBERG, ASSISTANT SECRETARY OP LABOR AND MANPOWER ADMINISTRATOR, JACK HOWARD, ADMINISTRATOR OP BUREAU OP WORK PROGRAMS, D CURTIS C ALLER, ASSOCI ATE MANPOWER ADMINISTRATOR, SAMUEL V MERRICK, AS SISTANT TO THE SECRETARY FOR LEGISLATIVE AYFAIRS Secretary WIRTZ I am very sorry It is just a matter of getting stuck in an elevator between two floors I can only apologize, without any explanation other than that. Chairman PERKINS Let me welcome you here, Mr Secretary We are delighted that you are here The Department of Labor is respon sible for some programs that are most important to the war on poverty under delegated authority, for example, the Neighborhood Youth Corps. ~We are all most anxious to hear from you. Your department has done a wonderful job in connection with the administration of these programs. You may proceed. 1185 PAGENO="0348" 1186 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Secretary WIRTZ. Thank you, Mr. Chairman. Chairman PERKINS. Without objection, your statement will be in- serted in the record. I would like to hear you summarize your state- ment, with particular emphasis on how much money you could effi- ciently utilize in expanding manpower programs under the Economic Opportunities Act. (The statement referred to follows:) STATEMENT OF W. WILLARD WIRTz, SECRETARY OF LABOR Mr. Chairman, members of the committee, my testimony is, in summary: I That the human redevelopment program initiated in the past three years by President Johnson, constructed largely by the 89th Congress, and admin- istered in an occasionally awkward but in general extremely effeetive way by a comparatively small group of dedicated public servants, represents one of the bold, grand chapters in American history; That the enactment and administration of the Economic Opportunity Act * of 1964 has been one of the central elements in this development-along with the enactment and administration of the Civil Rights Act, the Education Bills, the new urban development program, and the amended Manpower Development and Training Act; and That H.R. 8311 represents a responsible and wise writing of the instruction * of three years' experience into the Economic Opportunity Act. Recognizing that this may seem almost a belligerent assertion of the positive, I confess to being tired of hearing so much about the negative. It isn't going to hurt the country to recognize what it's doing right as well as what is going wrong; and if what is good doesn't make as interesting pictures for the television cameras or as exciting copy for the newspapers as what is bad, all the more reason for speaking up-before current history gets a bad ease of hypochondria. Any suggestion that the war on poverty has been won, or that anybody thinks it has been won, would be dead wrong. So, I think, are the suggestions that it will help to redeploy enough forces to permit taking out a partisan patent on another "crusade" instead of getting on with a hi-partisan war. Nor will the members of this Committee, veterans in the war against poverty, be content with any suggestion that all that is needed now is a massive transfu- sion of Federal funds; or, in the alternative, with any political shell game of charging that the war in Viet Nam is being financed out of the war on poverty and then protesting piously that the anti-poverty budget is too high. Neither will there be any sympathy here for those who riot or burn buildings in protest that this war is not already won-not realizing that a riot now is as wrong as a march on Selma or Washington was right, that the riot is against those who did nothing for a hundred years, but that it hurts bady the efforts of those who are now deeply committed to remedy this situation with almost desperate speed. I testify, conscious of the issue of "credibility" that has been raised, in terms of pride in an Administration and a Congress that has in these three years, and for the first time in history, told the truth about the slums, told the truth about the inequality of education-until that truth has hurt-and now helps. I testify from as deep a concern as anyone can have about such statistics as those of battlefront casualties, as rising crime rates, but in the belief that the Nation should know, too That between 1~4 and 2 million people in this country are in school or in training or in jobs today who would be down and out if this human redevel- opment program had not been undertaken. That the number of hard-core unemployed (those out of work 15 weeks or more) has been cut in these three years by more than half-57%-from 1,084,000 in May, 1964, to 464,000 in May 1967. I testify to the questions of ways and means, and unfinished business, on to- day's agenda. I respectfully urge, at the same time, that these agenda items be PAGENO="0349" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1187 taken up with due attention to the underlying facts: that what is happening to- day is that democracy's authentic tradition is being. purged of the fallacy that some people have to fail so that others can succeed, and that being created equal is enough; that every established institution is being put to the test, particularly under youth's stern questioning and through such instruments as the Community Action Program in OEO, of how fully and directly it serves the individual- instead of the other way around; and that a great deal of today's proper self- criticism results from the new realization of man's own competence to perfect the human condition for all who enter it, and from his consequent substitution of the human potential for human experience as the measure of social achieve- ment. Mr. Chairman, I hope greatly that these hearings will be the occasion for strengthening this nation's human redevelopment program, and that I can in this connection meet your inquiries fully with respect particularly to the manpower aspects of this program. It is .by no means perfect, or complete. I hope no less greatly that this will also be an opportunity for recognition that greater progress is being made right now in the improvement of the human condition in this country-for all who share it-than ever before in history. II Now about H.R. 8311 itself. * My testimony relates particularly to those parts of this Bill which relate to functions being exercised, under the present Act, by the Department of Labor. This includes four work-training or work-experience programs which are pro- vided for now in separate parts of the Act and which would all be covered, with some modifications, in a new title I-B of H.R. 8311: The Neighborhood Youth Corps, now under title I-B; Operation Maintream, the community improvement program added by the 1965 amendments as section 205(d); The New Careers Program for adult work experience sponsored by Con- gressman Scheuer and added by the 1966 amendments as section 205 (e) ; and The Special Urban Impact program added by the 1966 amendments, now under title I-D. The major improvements made by the proposed modifications in the authority for these programs will: Allow local communities increased flexibility in designing projects which will be most responsive to local needs and problems. Provide a basis on which these programs can be combined in new ways to deal more effectively with the ëomplex problems of unemployment and under- employment in slum areas. Require community employment and training programs under section 122 to include, where necessary, related supportive services such as basic edu- cation, occupational training, health services and special counseling. Authorize section 122 programs to include projects involving both adults and youth age sixteen or over. At present youth age sixteen through twenty- one years may be enrolled in only those adult work programs which are funded through the special impact programs of present title I-D. Open section 122 programs to unemployed, underemployed or low-income persons, thus broadening the present eligibility requirements of some of the programs which are now open only to unemployed persons or chronologi- cally unemployed persons. Broaden and increase the flexibility of programs in special impact areas through authority to initiate or expand with special impact funds any type of work and training program authorized under the new part B of title I and to expand any other type of program under other Acts related to im- proving or restoring the employability of individuals. More clearly incorporate the concept that individuals must be assured "careers" rather than just "jobs", by making sure that the road to self- sufficiency is not blocked by unrealistic and outmoded job requirements. Make it very clear that the goal of the manpower programs should be and is self-sufficiency for the people who are crippled by poverty. We cannot accept and do not want to operate programs that stop short of this goal. We do not want hand-out programs, "keep them off the streets" programs, tern- porary palliatives of any kind. H.R. 8311 not only gives a clearer and more sharply defined direction to the anti-poverty strategy, but also it provides the legislative basis for the operation of programs to accomplish the objective. PAGENO="0350" 1188 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 The language in this bill, more clearly spelling out the purpose and design of the Special Urban Unemployment Impact Program, represents President John- sOn's determination to get help to the hardest cases. In his message on Urban and Rural POverty to Congress last March, the President described this program as one providing concentrated `assistance, both public and private, to those with the greatest need. By increasing the size and scope of the present Special Im- pact program this will give substance to that promise. A special survey conducted last fall disclosed an unemployment rate in slum areas about three times the average for the rest of the country; 10% compared to 3.8%. A "subemployment index," which gives a more accurate picture of the slum employment situation, indicates that one out of every three residents (34%) in the slum has a serious employment problem. To meet the needs of these people, the concentrated employment program was launched in the slum areas of several cities and rural communities in March. The basic concept of the concentrated employment program is to provide in a single contract with a single sponsor, in a well defined area, whatever is necessary to enable a man or woman or boy or girl to find and hold a decent job at a decent wage. It takes the "hard cases" first-and takes no other cases. It recognizes their unemployment as a personal rather than a general economic problem. And it draws directly on the resources and cooperation of employers in the community. The initial development phase of the program, presently being carried out in 21 areas (19 urban and 2 rural), is now complete. Proposals have been developed and reviewed for each of these areas. Approximately $100 million from FY `67 manpower program resources has been allocated to this program and will have been obligated by June 30. Approximately 40,000 job opportunities-20,000 in the work experience programs (NYC, Nelson-Scheuer, Special Impact) and 20,000 in the private sector-will have been provided. Up to 25,000 training slots under MDTA will be provided. By mid-summer, 20,000 people will be involved in one way or another in the program. Local business and industrial leadership, and the leadership of organized labor, is backing this program. In some cities involvement is through business organizations such as the Business and Industrial Coordinating Council in Newark, and the Board of Trade in Washington; in others the involvement is direct and personal. Top corporate officials are serving on the boards of the nonprofit agencies set up to administer these programs. In Cleveland, several companies are providing expert staff on a lend-lease basis to assure top quality management capability to the program. In Boston, the General Dynamics Corporation has offered to equip one of the program orientation centers and provide instructors and instruction at no cost to the project. In St. Louis, local businessmen have formed a non-profit group; Work Op- portunities Unlimited, to develop on-the-job training projects and find jobs for the disadvantaged. Another encouraging aspect of the program is the healthy cooperation which is developing between the State Employment Service agencies and the local Community Action agencies. In San Antonio, for example, not only will the Texas Employment Commission and Community Action agency personnel be working side by side, but in the same centers orientation programs will be run by SER, the organization devoted to helping the~ Spanish-American poor, and a Negro civil rights group called FREE. We expect, to extend this concentrated employment program next year to from 25 to 50 additional areas. I report next on* the conduct of the four EOA work-training and work-experi- ence programs for which responsibility has been delegated by the OEO to the Department of Labor. The Neighborhood Youth Corps, in the last two and a half years, has provided work opportunities for more than 900,000 young men and women in over 1,200 communities, in every state, the Virgin Islands, Guam and Puerto Rico. The young people enrolled in the NYC come from families with a poverty income and a poverty of expectation. They need jobs, and a variety of supportive services NYC is the story of hope for those who bad no option but despair: 45% of the enrollees have come from non-white groups. 57% of the enrollees are young men from low income families; 43% women. PAGENO="0351" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1189 It is the story of dropouts returning to school or entering training, or securing jobs. A recent study of out-of-school enrollees, interviewed three to twelve months after completion of their NYC enrollment, showed that nearly 35% were working in full-time jobs, 9% had returned to school, 4% were in vocational training, 5% were working part time and going to school part time, and 6% were in military service. Since none were employed or in school when they started NYC, this 59% represents a significant and heart- ening gain. It is the story of the urban ghetto and the isolated rural area. From the beginning the NYC has been as concerned with hidden rural poverty as with' the more visible suffering in our cities. Through March 31 of this year, 531 of the NYC projects have been in rural areas; 36% of the job opportunities and 33% of the total funds have been used in rural areas. It is thestory of service to communities. 32% of the out-of-school enrollees have been serving their communities as education and clerical aides, filling sub-professional roles. In the case in-school enrollees the percentages are higher. 19% in clerical work, 20% in education, 7% in library service. 8% of the out-of-school enrollees have been working in health occupations, helping to expand health services in their communities. Another 22% of them have been working to increase recreational facilities and conserve our natural resources. It is the story of 589 000 boys and girls who were able to continue their edu cation through 2 550 in school projects In January 1966, 34% of the sponsors of the out-of-school projects provided remedial education. By December 1966, 50% were providing remedial education. The investment made in these young people is small in terms of dollars. It is estimated that in fiscal year 1967 the average cost per enrollee will be $2,930 in out-of-school projects. $650 in in-school projects, and $520 for summer projects. The out-of-school costs is higher, of course, because these enrollees needs more intensive supportive services such as counseling, and remedial education. The return goes beyond dollar measurement, both in terms of human lives saved and community benefits. However, we are beginning to get, in addition, a dollar return as well. On March 15, for example, Mayor Cavanaugh of Detroit told the Senate Labor and Public Welfare Committee that 9,500 young people have been enrolled in NYC in Detroit. The cost to date, he said, was $5.4 million. Today, he added, NYC alumni earn $10.5 million a year and are returning tax money at a rate of $175 million a year Amendments to the Economic Opportunity Act both in 1965 and 1966 added new. work experience programs for adults. These programs, found in Title ID and sections 205 (d) and (e) were very recently delegated to the Department of Labor, and are being administered through the Manpower Administration by the new Bureau of Work Programs which also administers the Neighborhood Youth Corps The adult work program added in 1965 section 205(d)-the community im provement program-is intended to provide work experience to unemployed adults particular y the older workers who find themselves with outmoded skills and rural workers who cannot compete in the labor market today. This work experience is to provide necessary improvements to the community and at the same time give these unemployed adults experience and training that will help them qualify and hold permanent employment. The "Green Thumb" prOjects in operation in several States are examples of this program We have named the program "Operation Mains~reanv"-a name that is intended to convey the pro- gram's purpose, that is, bringing the unemployed older worker back into the mainstream of American economic life The New Careers program-section 205 (e) -was added to the Economic Op portunitv Act last year It is one of the most innovative of the manpower pro grams This program is also designed for adults but is not limited to those who are chronically unemployed. Under the present Act it is designed to reach adults 22 and over in all areas of the country but because of the kind of job opportuni ties it provides, it is implemented more easily in the cities than in the rural areas. The New Careers program provides unemployed adults with work experience in social service occupations on the condition that their work experience will count PAGENO="0352" 1190 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 toward fulfillment of entry level requirements for permanent employment. An agency benefiting from government subsidy of work experience and training must rearrange its job structure so that the individual who enters at the lowest sub- professional level can look forward to an orderly progression to increasingly re- sponsible jobs. Increased flexibility will be given to both the New Careers and Mainstream programs under the proposed legislation by combining them into one program (the Community Employment and Training Program under section #122), by lowering the age eligibility from 22 to 16 years, by provision for on-the-job train- ing in private industry, and by opening the program to all unemployed, under- employed, or low income persons. The Special Impact program, also authorized in the amendments of last year, made it possible to put all of these programs together. In fact the development of the concentrated employment program is in response to the need to put these pieces together in a cohesive and concentrated entity. I should report, too, that we have been able to effectively merge the man- power resources of the Department of Labor with those in HEW in the title V program as this Committee recommended and the Congress passed last year. It was a wise step and we will have in the coming year a title V program that seems certain to provide more effective rehabilitation of welfare clients. But of more significance than the operation of single programs is the fact that all of them can now be put together. They are being put together in a way that makes it possible to give each individual whatever manpower services he needs to take him all the way from unemployability and dependence to a permanent job and independence. III Several more general matters, relating to the manpower aspects of the broad human development program, arise in connection with other provisions of H.R. 8311 or in connection with various other proposals which have been made. "Coordination" has been a point of continuing consideration and criticism. It has also been a focal point of constructive action. So far as the manpower program is concerned, there is today effective coordi- nation at the national level. There is a rapidly improving situation, subject to some exceptions, at the State and local level. I shall be glad to report to the Committee on both of these situations in whatever detail is desired. As an example of the improvement, the Federal-State Employment Service system, working with, business, civic and social organizations and with Com- munity Action agencies, is now deeply involved in finding the hard cases, in providing counseling and coaching, in job development, in providing for basic education, employability training and vocational training and in making sure that persons who need supportive services can get them. The provision in Title VI, Part B, of H.R. 8311 for the exercise of broader and more specific functions by the Economic Opportunity Council will meet effectively the need for relating the manpower to other aspects of this program. The suggestions which have been made for statutory redistribution of various OEO programs among other agencies and departments, and for dismantling the OEO, have-in my judgment-no basis in operating reality. They come down to a worse than pointless kind of gerrymandering, and a strange inversion of the strategy of "divide and conquer." There is historical irony in the reminder that earlier "crusades" were in the main frustrated because responsibility for their conduct was divided up between too many kings and princes. Poverty didn't develop in this country because anybody wanted it. It developed because the poor are the least represented group in the society, and because there was no organization, until three years ago, of the national concern `about it. The time to end the present separate identification of a responsibility for eliminating poverty as such-and there will be such a time-will be when there are other institutional forms of effectively expressing their interests. The suggestion that the time has already come to turn programs developed by OEO in these three years over to the established agencies and departments doesn't answer the question of how it can be properly assumed that these agen- cies and departments will continue to do aggressively what they didn't do at all for so long. The hard-headed, tough-minded considerations involved here aren't personal. They are institutional. It would be a mistake to assume that the inertial forces within the established agencies and departments which led them PAGENO="0353" J~CONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1191 to let the Economic Opportunity Act-and the OEO-become necessary have already been permanently dissipated. They have not been. A final point: To the extent that various counterproposals to H.R. 8311 sug- gest, with respect to the manpower and related programs, that there should be an increasing shift in these programs toward reliance on private resources which are available, I agree completely. But the rest of this point is that this shift is already being made-to an extent and in a variety of forms which I shall be glad to report in detail to the Committee. HR. 8311, taken with the present form of the Manpower Development and Training Act, permits the fullest possible and practicable effectuation of this purpose. I commend to the Committee its prompt and favorable support of this Bill. Secretary Wiwrz. Thank you, Mr. Chairman. A very brief summary of my testimony, which I understand will be made a part of the record, is of a general character because I as- sume that the committee's interest will be largely in the questions you will want to put to us. In that connection, I will identify the people at the table with me, all of whom I think are known to this committee. Mr. Stanley Ruttenberg, Assistant Secretary of Labor for Man- power, who is here; Mr. Thayne Robson, who has worked with Mr. Ruttenberg and who has worked particularly with the problem of coordinating the various manpower activities. He has done an extra- ordinary job in that connection. Jack Howard, to my left, as you know, is Administrator of the Neighborhood Youth Corps and now the Bureau of Work Programs, which includes the Youth Corps; and Curt Aller, whom you know from previous associations with this committee, is Director of our Of- fice of Manpower Policy, Evaluation and Research. Sam Merrick, my legislative assistant, you know personally. I testify, Mr. Chairman, from a very real pride in the program of which it has been our privilege to participate. I think of it as a human redevelopment program which was initiated 3 years ago by the Presi- dent, developed very largely by the 89th Congress, with a very sig- nificant contribution by this committee. I think of it, too, if you will, as a program which has been ad- ministered sometimes awkwardly but overall effectively by as dedicated a group of public servants as it has ever been my privilege to deal with. I think of this as one of the grand, bold chapters in American his- tory. Surely a central part of it has been the operation of the Office of Economic Opportunity under the Economic Opportunity Act. 1 think of this program as a key factor along with.the Civil Rights Act., the education bills, urban redevelopment program, and the amended Manpower Development and Training Act. I come in that connection to H.R. 8311 which I t.hink of as a proposal to write into t.he law the experience of these past 3 years. I know that sounds almost belligerently positive. I am tired of hearing so much about the negative. I don't think, it will hurt this country a bit, along with realizing the things that are going wrong, to realize the things that are going right. If the good t.hings don't make as good television copy as the bad things, I think it is all the more reason to speak about it before we get a case of hypochondria. Any suggestion that the War on Poverty has been won or that anybody thinks it has been won would be dead wrong. Any suggestion that it could be won by a simple redeployment of forces which is now called another "crusade" would be equally wrong. 80-084-67-pt. 2-23 PAGENO="0354" 1192 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Any suggestion that all you need is a massive transfusion or infu- sion of Federal funds into this program denies the experience of every member of this committee, for you are the veterans of the war against poverty and you know that a lot tougher matter is involved here. Any suggestion that this war is going to be won by riots is dead wrong, and wrongest of all. I guess it is not realized that the riots are really against those people who did nothing for a century but they discredit the operations of those of us-and I mean this committee and the Congress and the President, and those of us in the administra- tion of this program-who are now trying so hard now to provide cures-~ Chairman PERKINS. Under the urban impact aid funds, do you feel you have been able to prevent riots in certain metropolitan areas? Secretary WIRTZ. No, I don't Mr. Chairman. I can make a more reserved statement. I take great pride, so does Jack Howard, so do all of us at this table, that 51 of those Negro boys who put on white helmets a.nd put out the fire of riot in Tampa, Fla., were alumni of the Neighborhood Youth Corps. It pays off that way. These young men are part of that group of 136 boys who have been cited for their responsibility in meeting that situation when it developed in Tampa. Surely, out of the 136 to know that almost half of them have been boys that have been in the Neighborhood Youth Corps gives us satis- faction. But the program is not directed at stopping riots. It does not pretend it can. Chairman PERKINS. I thought there may be a flexibility where, if certain conditions existed, you might arrest a situation in a metro- politan area. Secretary WIRTz. No. Chairman PERKINs. That has not occurred? Secretary WIRTZ. Mr. Chairman, those fires have been lighted over a hundred years. They cannot be put out just this way. It would be a great mistake for us to direct our programs toward the riots or to pretend that they will meet them. Chairman PERKINS. I am delighted with your testimony, myself. I am asking the question to get the information for the record. Secretary WIRTZ. When people who riot realize that their actions are as wrong as the marches on Selma and Washington were right, then we can get on with the important work before us. Right now, the rioters have just hurt us. I wish there was some way of saying to those people that they are getting in the way of the first honest effort ever to stop the age old fires. And they were moving, not with all deliberate speed, but with almost desperate speed to meet in this honest effort. I wish rioters would not complicate it the way they do. I am not going to give you a lot of statistics. I am including very few in my statement. We used to compare what we are doing with what we used to do. We don't any more. If we did, it would be easy. We can take enough pride in the fact there are between a million and a half and 2 million people in this country in school, in training or at work today who would be down and out if it had not been for what we have done together in the last 3 years. I am not talking about the effects of the upward movement of the economy, but the OEO program, the education bills, Manpower PAGENO="0355" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1193 Development and Training Act. A million and a half to ~ million people who have really had life brought back to them in a i~ealistic sense in this period. I would like to match those statistics along with some other mean- ingful figures. It is just statistics, but it is true and significant that we have cut in half-by we, I mean this country and this economy, this Congress, this administration, these programs-have cut in half in the last 3 years, the, hard core unemployment situation, we have cut by.57 percent. Three years ago in May there were 1,084,000 people who had been out of work 5 years or more. Three years ago it was 1,084,000. Today it is 464,000. It has been more than cut in half. That is not the most important thing that has gone on. When I think of the Economic Opportunity Act and the Office of Economic Oppor- tunity and the Redevelopment Program we are talking about, I think of it in terms of a reflection of the basic things going on in this country today. So we don't measure what we do a.ny longer by what we did before. We measure it by our potential. This is what is making things diffi- cult in the measurement. We are also undergoing at the urging and insistence of American youth and through the Office of Economic Opportunity, a complete stern reevaluation of t.he relationship of individuals to institutions. We don't accept institutions today unless they serve the individual. Chairman PERKINS. Are you endorsing the Office of Economic Opportunity as presently constituted? Secretary WIRTZ. I think they have done more-and by' "they," I mean we, the Congress, the administration,, the people through that Office-to insist upon a reevaluation of all the institutions in this whole area-Federal, State, and local. They have done more to make new attempts at direct service' of the individual rather than just the institution than any other group or through any other experiment in history that I can think about. They have shaken us up, Mr. Chairman, the whole bunch of us, the whole country. They have said people are poor not because anybody in this country wants poverty, but because it happens because the poor people aren't represented, haven't been represented. And we are going to see that there is something done about it. They have put a hair shirt on all of us, the other agencies of government, and on t'he country. They have told us the truth about. poverty, and it hurts. Now it helps. They have shaken us up. Chairman PERKINS. The Office is in the process of concentrating on the disadvantaged areas throughout the country, the people who really need aSsistance. Would it be a mistake to s'hift it somewhere else? * Secretary WIrmTz. I mention that in my testimony, and I simply summarize my view here. I think it would be a terrible mistake at this' point, just a terrible mistake. I know the argument that some of these programs are now at a point that we should shift them someplace else. I am in a pretty good position to say to you, Mr. Chairman, that it takes more than 3 years' to upset the inertial forces that character- ized some of the established departments of Government, including the Department of Labor. Three years is not enough to serve as a basis for any assumption that the established departments are now going to do right what they didn't PAGENO="0356" 1194 E~CONOM1C OPPORTUNITY ACT AMENDMENTS OF 1967 do at all before. I would urge very, very strongly the continued devel- opment of this program for the time being through somebody whose job and whose sole job is to recognize the effects of poverty and to `develop those institutions and procedures which will meet that prob- lem. There will be a time for turning it over, but it is not now. Chairman PERKINS. Go ahead. Secretary WniTz. With respect to the statement which I am sum- marizing, the rest of it quite briefly includes, ~11 particular, a discus- sion of those programs which we are administering in the Department of Labor. Those started with the Neighborhood Youth Corps. They include now three other: the Work Experience-Working Training Programs, the New Ca.reers Program for which Congressman Scheuer is so largely responsible. the Operation Mainstream and special urban impact. program. My report, Mr. Chairman and members of the committee, upon the operations of those programs is set out in the statement. It is a record of, I think, very real accomplishment. it is a record which also shows the need for some improvement in the statutory basis on which this program is conducted. Those changes are made in title I, part B, of H.R. 8311. Their particular relevance to these programs which we ad- minister is set out on pages 5, 6, and 7. They permit these provisions in title I, part B. Mr. DENT (presiding). I would suggest that perhaps you take a. little more time now and give more detail and, if you want, refer more often to your printed script, so that we can follow you more closely. Time pressure is over now. The chairman is away, and we will take it easy. Secretary WTniTz. Thank you very much. I would think the point to start, on that basis, would be at the bottom of page 4 and top of page 5, in which there is reference to the present development or the past development in this program. You will recall that shortly after the enactment of the Economic Opportunity Act, and the establishment of the Office of Economic Opportunity, there was delegated to the De- partment of Labor the Neighborhood Youth Corps. You will probably note, too, that within the last several months there has been added the delegation of the Nelson program, the Scheuer program-Operation Mainstream, we call it-then the new careers program for which Mr. Scheuer is so largely responsible, and the urban impact program. Those are administered by time Department of Labor, on delegation from the OEO. Mr. DENT. How would you say that they are going, Mr. Secretary ? Secretary WIRTz. My report. can be quite full with respect to the Neighborhood Youth Corps. The statistical summary of that pro- gram and its accomplishments are set out on pages 10, 11, 12 of my statement. Let me give you just the outlines of it. There are three Neighbor- hood Youth Corps programs. One of them is an in-school progra.m. The. next one is an out-of-school program, and the third is a summer program. Jack Howard is here, who has administered that program so effectively and so well. You may have questions about it. The chair- man's question included the matter of whether we have used all the funds which were available, amid we have on this program. We are PAGENO="0357" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1195 committed right up to the hilt of the appropriation. It has been a program which has worked very effectively. The number of Neighborhood Youth people who ha~ire had Neigh- borhood Youth Corps training is just over 900,000. That is about 21/2 years. We think of that as a very substantial program. There aic hundreds of thousands of boys and girls who are at work or in school in this country today because of that program. It has been admin- istered with careful attention to the concentration of the poverty problem, the unemployment problem among low-income families, among Negro families, among other minority group families. It has been carefully administered with attention to the problems of boys and girls. We will be glad to go into what questions you have. It is working exceedingly well. With respect to the other three: the Scheuer program, the Nelson program, and t:he special impact program were authorized by amend- mnent to the law last year. The administration of these three was dele- gated by OEO to the Department of Labor in March. There have been few concrete developments so far.' All of the money will have been obligated by June 30, so that the programs are fully on-going. Mr. DENT. Mr. `Secretary, I note on page 12-this is oi~e of the areas in `which we at this time are most interested because of the criticism `that we receive on the whole program. It appears that one of the most often repeated criticisms has to do with t'he so-called per pupil, per enrollee, and per person cost. I note that you have the average cost of the enrollee in out-of-school project at $2,930 per enrollee. How much does that brreak down? Flow much of it is a direct payment to the enrollee in cost of living stipend, and how much of it is pro- rated to the cost of operating `the program, and so forth? This is the kind of criticism that this committee has to face when we get to the floor, with this legislation. Secretary WIRTZ. I can answer in general, Mr. Chairman- Mr. DENT. `Call upon anybody that you have. Secretary WIRTz. Yes; I would like Mr. Howard to speak specifi- cally to that. That is a problem which we have faced on a broader front. As far as the whole manpower program is concerned now, we have: the overhead `operating cost down to about 6 or 7 percent as of the last reading. Now I am talking about not the Employment Service, but about the MDTA and the OEO programs. We are down now to about B or 7 percent operating overhead. The rest of it is fairly evenly divided between training costs and actual payment to the individuals involved. I. am talking about the training allowance under MDTA and the di- rect payment cost in the Neighborhood Youth Corps. As far as MDTA is concerned, it is about 5 or 6 percent overhead and a fairly equal division between training expenses and payments directly to the beneficiaries. As far as the Youth Corps is concerned, the payments to the individuals are a substantially larger part. I will ask Mr. Howard to reply directly to your question on the $2,930 figure. Mr. DENT. I would like to get the answer. I will ask a further ques- tion. In this particular type of program, the out-of-school neighbor- hood youth program where you are sponsoring training specifically in PAGENO="0358" 1196 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 an attempt to increase the person's skill, do you work with a local in- dustry sponsored project? Do you put the Neighborhood Youth Corps in factory B sponsored by the factory itself, and do you then pay part of the wage? Secretary WIRTZ. The Neighborhood Youth Corps, Mr. Chairman? Mr. DENT. I am asking if you do the same with the Neighborhood Youth Corps as you do with the Mr. HowAiu. Amendments to the act last year first permitted the piacmg of enrollees in private-for-profit organizations. We have pro- ceeded very carefully on this because of the wish to avoid any duplica- tion with 1\IDTA. We have recently executed four agreements and have about 10 more that will probably be executed this week in which * enrollees will be placed in private-for-profit business experience. Some of them can be in factories, as you suggested. Others might be in pri- vate offices. At any rate, in private-for-profit industrial and business exposure we will pay training costs, butnot wages. The act provides that wages must be paid by the employer in the private-for-profit situation. WTe, however, through our local agree- ments and our local sponsor, will pay the cost of training the youth until the youth is a full employee and is fully on the payroll. That is specifically what we are doing in the private sector. Reverting to your earlier question on what was the unit cost and the breakdown with regard to the out-of-school program, I can give you the record through March 31 of this fiscal year. I will be glad to sub- mit now the following data. The remuneration to enrollees covers 79.2 percent of the cost of providing a training opportunity for an out-of-school youth. The counseling is 3.7. The basic education is a 0.5 percent directly to our project, with most of the basic education being provided at no cost to the project by the sponsor of the local school system and other re- sources community action agency. Supportive services, including re- cruitment or job development or health examinations, and so forth, is 1.3 percent. Supervision on the job, a very important part of our out- of-school program, is 3.8 percent. Mr. DENT. These percentages relate to the $2,930 figure? Mr. HOWARD. That is correct, sir. The project administration, which includes the staff, fringe benefits for the staff, any travel, equipment, rent, insurance, bonding, all these sort of factors, 9.3 percent of the unit cost. Then the other direct costs, which will be enrollee transpor- tation, any tools or expendable equipment, 2.1 percent. This, then, is the `breakdown. Roughly 80 percent into the compen- sation for `the enroTlees, roughly' 10 percent for the project adminis- tration, and then the balance of 10 percent for various supportive equipment, counseling, and remedial education charges. I might point out again that this unit cost is a job opportunity for 12 months for the period of agreement. It is possible that as many as two youths or three may go through that opportunity. Mr. GOODELL. What is the unit cost you gave? Mr. HOWARD. The unit cost for 1967 is planned unit cost of Federal charge~$2,930. :, `: * * * Mr.G00DELL.$2,930'? ,* ` * `` Mr. HOWARD. $2,930. Th~tis the Federal share per work opportunity. PAGENO="0359" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1197 Secretary WIRTZ. On the out-of-school program. Mr. HOWARD. When we fund a program, we fund a work oppor- tunity. As the enrollees are improved or better able to move or go into MDTA training, or something of that sort, they will then move on and another will be recruited to have the work opportunity. There- fore, we fund a continuing training and work opportunity for a period of time. This is the cost of that period of time. Mr. 000DELL. Mr. Chairman, if I may pursue this point, the Chair asked you if you are able to pay these enrollees in private, profit- making enterprises. I think the record should be clear that you do not have the au-. thority to do that and are not doing that. The law permitted you last year for the first time to take development jobs in private-for-profit enterprises, but not to pay any portion of the wage. I take it when you do that you are trying to coordinate it with your on-the-job train- ing under the Manpower Development and Training Act. Mr. HOWARD. That is correct. We have first of all worked out a very tight cooperative relationship so that we go into the private sector only after exhausting the potential for MDTA agreements. We re- quire that the Bureau of Apprenticeship and Training representative work with us in the locality before we go into the private sector. We are just as concerned as the private sector is about multiple approach- es for job development and training situations. Mr. 000DELL. Last year didn't you have full authority to do what you are talking about now in the on-the-job training program? Mr. HOWARD. We think that much of it could be done in those cases where there is a large enough and available OJT situation susceptible to MDTA agreement and negotiation. What has occurred is that we have been able to supplement that in the fringe areas where the train- ing is perhaps not susceptibhe of negotiating an MDTA master agree- ment. Therefore, we have been able in effect to supplement the job station opportunities, not only in the public sector under the past law. Mr. GOODELL. What is the difference? You are doing it with smaller concerns where you don't have as broad an arrangement as you do under OJT. Why could you not proceed under your OJT with flexibility? Mr. HOWARD. One of the differences, of course, as you have cor- rectly cited, is that there is a limited OJT authority for the work training program inasmuch as there cannot be any payment of wages or reimbursement for wage costs, whereas this is not specifically cited under MDTA. As I read the intent, it is designed to supplement the main push of the work training program, which is in the public sector. it is designed to add the private sector, where appropriate and as appropriate, as a supplement. It. was estimated that not more than 10 percent of out-of-school work stations could be developed in the private sector. MDTA is conducted through the privath sector. Mr. GOODELL. I will come back to this; but I will just make a corn- ment that I think the addition we -made in the law last year essen- tially overlaps the fiscal authority under the Manpower Development and Training Act. We would have done better, if we had wanted to expand the authority somewhat, to do so in the on-the-job training portion of the Manpower and Training Development Act. PAGENO="0360" 1198 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Let me ask you one other question for clarification, and then you may continue with your general statement. How many enrollees or work opportunities, as you call them, do you have in private profit- making enterprises? Mr. HowAim. Let me search for that and get it for you right away. Mr. DENT. For the benefit of the committee, I want to say that we will run more or less on an informal basis, because I think at the par- ticular moment the Secretary is giving us certain specific testimony. If you have a question you want to address, if you will address the Chair, I will see that you get an opportunity to ask it. Mr. SCHEUER. Mr. Chairman. Mr. DENT. Mr. Scheuer. Mr. SCHEUER. Mr. Howard, you mentioned you don't want to get into multiple programs in the private sector and therefore you have uot been approaching the private sector where you still have unfilled MDTA slots. Do I understand you correctly? Mr. HOWARD. Perhaps I should clarify that, Congressman Scheuer. ~\That I meant by "multiple" was that we didn't want to get into du- plicative or overlapping. So, if a sponsor evinced interest in a private sector experience for his enrollee, what we insisted on first was that lie explore immediately whether there were OJT slots available al- ready in the community that should be utilized. If not, then whether his interest and the contacts he made were susceptible of development as an OJT agreement. under MDTA, in which case that would be done. If those failed, then we would start with our own extension of authority. The purpose was among other things to reduce the numbers of in- dividuals knocking on doors of employers, so that there is not a con- stant stream of a dozen different, agencies trying to develop the same kind of job. We want to avoid any duplication and therefore we work closely with the alternatives already present. Mr. SOHEUER. I am very much impressed with what you have ac- complished in your "Jobs Now" program. Isn't there a. difference be- tween approaching an employer for a modest number of OJT spon- sbrèd jobs and giving the employer the initiative for developing a program, as I understand they do? It seems to me that, while I agree wholeheartedly with what I know is your view and the view of the Secretary as expressed in his testimony, we should be reaching more and more into the private sector, giving the private business com- mnunity more of the responsibility fOr reaching out in the developiug, teaching and learning programs in which they are becoming pretty expert. I see no particular problem in having a multiplicity of approaches. Maybe from a little competition and the stimulus of a heterogeneous approach we may develop deeper insight as to which is the best ap- proach. The idea of having a multiplicity of approaches like New York and Chicago and other major urban centers does not shock me. I am not even more sure it will result in overlapping or duplication. It seems to me you could have multiplicity without overlapping or duplication. I would hate to see the "Jobs Now" concept which you cited-where industry undertakes on their initiative major responsibilities for PAGENO="0361" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1199 creating and developing programs-I would hate to see that down- graded on your priorities. It seems to me we should be carrying on a full-fledged program as well as the MDTA program. I defer to your expertise. Secretary WIRTZ. There is a possible misunderstanding here, be- cause Mr. I-Toward's replies to Mr. Goodell were in terms of the Neigh- borhood Youth Corps. I should only like to say that, as far as the manpower program as a whole is concerned, it is moving at a very rapid pace in the direction to which you refer; namely, toward not only a reliance upon the resources of private industry on the training program, but reliance on their initiative in developing it. It is a rec- ord which starts with the shifting of the manpower development and training program itself from an institutional training program em- phasis to an on-the-job training program emphasis. But it has not stopped there. So that right now there is a whole series of developments which are part of the very active program of trying to elicit not only the assist- ance but initiative of private enterprise. We are talking with the em- ployer groups in some 21 areas now about programs which we call "concentrated employment," which are like the "Jobs Now" concept. We are moving along lines which are perhaps illustrated by the fact that in Cleveland the companies, the large corporations in Cleveland, recognizing, our problem on personnel, have loaned us six or seven people with top quality management capability for several months to get the concentrated employment program started. * There is a wide variety of efforts. Taking the manpower program as a whole, it is moving very strongly in the direction to which you refer and should, in my judgment, move further in that direction. Mr. SCHEIJER. Do you think you have all the legislative authority you need? Secretary WIRTz. We feel we will have with H.R. 8311. Now with re- spect to the Manpower Program, it is not that ll.IR. 8311 marks out broad new areas of authorization. The pieces of authority exist, but they are scattered in various places in the present statute. The amend- ment which carries your name is in one place. Then these other amend- ments are in various other places. By bringing those together in title I, part B, and by making one provision or another with respect to flexi- bility, with respect to requiring more supportive services, with chang- ing the definition of unemployment eligibility so that we can provide assistance to a broader range of individuals-with those changes, my answer to your question is yes. I want the pattern of my answer to be clear. When you say, "Do we have legislative authority?" the Department of Labor has it by delega- tion under present law, and would have authority by delegation under i{.IR. 8311. My answer to your question is, with the enactment of ET.R. 8311 there is, taking the Economic Opportunity Act along with the Manpower Development and Training Act, ample opportunity for flexibility and coordinated flexible administration of the Manpower Program. And this is the first time I have ever said that to this committee. Mr. SCHEUER. We are very happy to hear it. Mr. DENT. Mr. Ayres. PAGENO="0362" 1200 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. Ariu~s. Mr. Secretary, first I want to command you and coin- pliment you on the cooperation that you always show to Members of Congress regarding the Department of Labor problems which they have in their particular districts. My question is, What is being done to get people trained to qualify for jobs so that general contractors throughout the country can abide by Federal regulations as to the ratio of Negroes to whites on the jobs? I Imow that many Members of Congress are concerned about situa- tions where the contractor was doing his very best to abide by the Federal regulations but construction was held up in the granting of funds because, due to the situation in the particular locality, it was impossible to get Negroes on the job. Is there some coordination be- tween the jobs that are in short supply and what we are trying to do under your manpower and training and under the Job Corps and the Neighborhood Youth Corps to direct these enrollees into schools or operations whereby this shortage can be alleviated and these con- tractors can go forward ? Mr. WIRTZ. Yes, there is. Instead of answering in general terms it is probably more helpful to refer to specific things that are going on. The one to which we attach the largest significance at the moment- and I say "at the moment" because we are still looking for the com- plete answers to that question-the approach that seems to offer the best promise at the moment is one that involves the participation of the Workers Defense League. We have worked out with them and with the building trades unions a program, first in New York, now being extended to New York City and Westchester County, now being extended to Buffalo, to Cleveland, to a whole series of cities: Buffalo, Cleveland, Baltimore, Detroit, St. Louis, Atlanta, Chicago, and Portland. This is a well worked out program which has the complete coopera- tion of minority groups and building trades, and which is designed to find those boys in the community who want to do this kind of work, and to make arrangements for their qualification for apprentice- ship. in these building trades programs. This approach also recognizes that in a good many cases there has to be a preliminary basis laid in terms of more general qualifications. That program is now actively underway. There are a number of manpower development and training programs, in further answer to your question, which lie in the same area. I want to make it quite clear, because there has been a misunderstanding about it, that we are not proposing to move in on an MDTA basis and qualify a man for a skilled occupation in disregard of the very sound practices which have developed as far as the apprenticeship program is concerned. They talk about our diluting the trade. We are not doing that. We are de- veloping programs, essentially with respect to some of those fairly broad general education programs. We are developing programs which qualify them to move into the apprenticeship program. My answer to your question is that our awareness of the problem is along exactly the lines you have stated it. There are specific programs now devised to meet exactly that problem. Mr. DENT. This poses a very serious question on that very same subject matter. Is this Neighborhood Youth Corps program in any PAGENO="0363" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1201 way commingled with the drive being put on by the civil rights demonstration under title 7 for a certain percentage of employment? Secretary WIRTZ. No, sir. Mr. DENT. .1 notice you said you have some kind of agreement on work in New YOrk where you have a certain percentage of appren- ticeships being made available for youth, both under this and the Manpower Training Act. But isn't there another program coming along at the same time paralleling the same drive that you are making where they are told that unless they hire a certain number of appren- ticeship employees- Secretary WIRTZ. Negroes? Mr. DENT. Apprenticeship employees first from the minority groups, especially the Negrogroups, that their project can be held up if they don't employ them? Secretary WIRTZ. The answer is no, Mr. Chairman. There is no such rule and there won't be as long as I have anything to do with it. Mr. DENT. The reason I am asking is because I got a call yesterday afternoon about a project that is being held up because there are not Negroes within the entire trading area of this contract and they have to go into the city of Pittsburgh to pick up a certain number of Negroes and lay off a certain number of their people to do the job. Secretary WIRTZ. It is an outrageous rule. Mr. DENT. For this reason only. He said: "We bid these jobs. If we know that we are not going to be allowed to use our experienced help, it will make a difference in the contract price. I don't care if I hire all Negroes if I have them. We only have 1.7 percent Negroes in the area." Now he is cooperating with your program. Secretary WIRTZ. Not when he makes that kmd of report, he is not cooperating with our program. When he makes that kind of report, he can't be coop'3rating with our program, because that is a dangerous poison to spread around. That kind of thing would be just as wrong. Mr. DENT. It is not poison. It is not propaganda. it is a fact that I can't understand. Secretary WIRTZ. We recognize the fact that there is somebody who is making a mistake in the administration of this program. First, ref- erence to ratios is likely to get us into trouble here. I have mentioned and Mr~ Howard has mentioned the fact that we are concentrating in the Neighborhood Youth Corps and in the other training programs on increasing the number of minority group members in those train- ing programs. That I support, and I am sure we all do. Where there has been disadvantage in the past, it should be rectified by an over- emphasis on that group in the future. That is clear. But then the word "ratio" came into the conversation. As far as I am concerned, there is no justification any place any time for a ratio. I learned it the hard way, because I had in my profes- sional capacity the integrated housing case in Deerfield, the first sub- urban integrated housing case in the Chicago area. I think we lost that case, which we were trying to defend, because of our own mis- take of letting a ratio concept come in there. I am against it. Then I come next and finally, just to complete this, to the proposi- tion to which you refer. I don't think there is any justification for PAGENO="0364" 1202 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 holding up any contract or any project on the basis of whether there is or is not a person of a particular race on that job. That part is clear. I think there is equal justification for being sure that everything is done to see that with respect to the manning of any job there is no discrimination. And in addition, there is an affirmative effort made to make it clear to everybody that the mores 5 years ago are not the mores today. These points must be clear. But if there is any Point where somebody says a project will not go ahead just because of who is or is not on it, it is wrong. Mr. GOODELL. Mr. Chairman, I would like to follow up on one point that was previously raised in this hearing. We have a variety of dif- ferent programs for manpower training. Most of them are centered in the Labor Department. There is overlapping jurisdictions between groups who are trying to coordinate the programs. The import of my original comment was not that it was a good thing to expand the on-the-job training program. It seems to me totally unnecessary to have a separate enactment of a separate law of somewhat different standing. We should fund it in the ongoing on-the-job training program. If we want to expand that and try to focus it on the MDTA training program, the way to do it is to amend MDTA and give you the authority to proceed. I don't believe it makes any sense at all to add an additional pro- vision of the law. In a recent hearing you are quoted as saying there are 15 to 30 separate manpow-er programs administered by public and private agencies-all supported by Federal funds-in each major U.S. metropolitan area. I am a little concerned that we are prolifer- ating programs in different laws to be administered by different local agencies where there is obviously a problem of coordination. Do you have any general comment or recognition in this field? Secretary WIRTZ. The 1530 reference was to which area, Mr. Goodell? Did you not say 1530? Mr. GOODELL. Fifteen to thirty separate manpower programs ad- ministered by public and private agencies-all supported by Federal funds-in each major U.S. metropolitan area. That was in your testi- mony before the Subcommittee on Inter-governmental Relations of the Senate Committee on Government Operations last fall. Secretary WIRTZ. I don't remember the exact context, nor is the statement one that is presently clear or time figure one that is presently clear in my mind, but will be supplied. (The information referred to follows:) The statement was that "there are 15 to 30 separate manpower programs administered by public and private agencies, all supported by Federal funds, in each major U.S. metropolitan area." 1 This was one of the coordination problems which came into focus from the work of the three-man teams. Mr. GOODELL. Let me ask you directly now. Have you read the proposals for the Industry Youth Corps? Secretary WIRTZ. Yes. Mr. GOODELL. It is clear from the testimony of Mr. Howard and from your testimony that you do not have authority today to extend your training efforts of the school dropout by paying a port.ion of the 1 HearIngs before the Senate Subcommittee on Intergovernmental RelatIons, Nov. i6, 17, iS, and 2i, i966, p. 24S. PAGENO="0365" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1203 wage of such an individual in circumstances where there is hope for long-term employment, so that we may induce a private-for-profit enterprise to provide on-the-job training for such an individual. We have suggested this now for several years. `We have solicited your comments. I believe last year in testimony you said you were very appreciative of this approach and that you were studying it. It seems to me that we have reached .a stage where this kind of approach would be very appropriate, that we should at least be experimenting with this kind of approach to induce employers in profit enterprises to take these youngsters under circumstances where a portion of their wage will be paid by the Government for limited periods of time. This approach is the basis of our Industry Youth Corps proposal in the Opportunity Crusade. Do you have some comment on this? Secretary WIRTZ. Yes. You do not include in your question the tax credit and similar so called "incentives" `which are all part of the same picture. I will limit my comment to your particular point. I assume you are talking about the out-of-school program, aren't you? Mr. 000DELL. That is correct. Secretary WIRTZ. If you are talking about the in-school program I think probably it would be a mistake to go further. As far as the out of school, for those whom we have called the "dropout.," is con- cerned, there is a question as to the extent to which we should put him into private employment and work out an arrangement for it. We have two or three experimental programs under MDTA now in that very area under title I. So since we have last talked, we have followed up that discussion by experiments with this same kind of thing. Mr. GOODELL. Paying part of the wage? Secretary `WIRTZ. That is right. But we do not pay part of w-ages in a regular OJT project, although some construe an appropriate allowance for waste and spoilage as such. Admittedly, the line be- tween an on-the-job training program where we pay for training costs, and paying part of the wages sometimes gets very fine. Just to illustrate: In an OJT contract in San Diego we pay $4 a week for each person hired and in training by restaurant and hotel operators. We pay on the basis that that is the amount of the cost .of the. dishes that will be broken during that period. In answer to your question, Mr. Goodell, I think there is an area there in which we are probing experimentally. I would not be pre- pared. at this point to recommend a broad expansion of the Neighbor- hood Youth Corps out-of-school program to permit that. I am in favor of proceeding with these experiment's to see' how much can be done with it. ` ` Mr. GooDEJ~L. Mr. `Wirtz, you describe a very urgent. situation, and I agree v ith your ch'tr'tcteriz'ttion of the sitn'thon w e f'~ce `We h'ive roughly a. million youngsters dropping out of school every year. They are lost in the job underworld to a large degree and increasingly will be. This is a bipartisan approach. `We have tried to do something about. this situation in the manpower field over the `last 4 years. I think it. PAGENO="0366" 1204 ECONOMIC OPPORTTJNITY ACT AMENDMENTS OF 1967 has been very effective in many ways, but we have an urgent situation now before us. We have been proposing in the Opportunity Crusade that we move in with a major new weapon. Through industry, we pro- pose trying to get these youngsters not dead-end jobs, not just public employment for a short period of time, but a job in private enterprise where there is hope for long-term productive employment of a mean- ingful nature, where these young men and women have hope that they can advance. This is what they want. One continued criticism I hear of the existing program is that it largely lacks a means for permanent improvement whereby they can move forward with hope of advancement in a job with dignity in private enterprise. Mr. DENT. Would the gentleman yield? Mr. GOODELL. Yes. Mr. DENT. This is a. very worthwhile discussion because I know the Secretary's feeling on that matter. But we have tied his hands pretty effectively by not allowing him to have the freedom to make contracts. Is there any estimate of what will be needed in the way of additional funds under this particular program if we go into the expanded pro- gram of paying part of the wage? Industry is not going to give you an opportunity to come in on their training programs under public sponsorship unless there is some- thing paid toward the expense of the payroll because, as you know, especially in the machinists trades they throw away three out of every four collars they run. These are the permanent-type jobs that Mr. Goodell is interested in, I am interested in, and I know you are interested in. Make an esti- mate, not at the moment but give us some figure before we finish as to what type of participation you think you can get from industry and what it wilicost us. Secretary WIETZ. We have done that, Mr. Chairman. You add the reference to my interest. We are talking just exactly of what Mr. Scheuer has emphasized most strongly in his amendment which was adopted last year-the new careers. We call it the ladder approach. I don't think there is a difference in terminology among us on this. Let me mention just three respects in which we are following out under the present law exactly the approach you take. One is the pro- grams which we identify as the New Careers programs, Mr. Scheuer's nmendment in which that is the whole point of it. He has asked us to tell him what the steps are in these ladders and we are prepared to do so. We don't put a cent into that program until we see it all the way on up. Point No. 2, you talk about the Neighborhood Youth Corps. We are trying very hard now and with increasing success to move people from the Neighborhood Youth Corps program directly into on-the-job training programs. Point No. 3, in these concentrated employment programs which we are now mounting, we are talking with the business people in each community and talking with them as recently as yesterday afternoon with the Washington and District of Columbia employers saying these jobs that you have to put at our disposal for these people can- be dead end jobs, they won't take them and they should not. PAGENO="0367" ECONOMIC OPPORTUNITY ACT AMEN~MENTS `OF 1967 1205 So the emphasis you are talking about I think we agree with com- pletely. May I add, in answer to the chairman's question, that `the `budget which has already been presented, `identifies with respect to these various programs sums for that. The sum, as far as the New Careers Program is concerned, is again the same-or is it not on a line base? It is $98 million divided between the New Careers Program and what we call the Operation Mainstream Program. It is an addition to $135 million on this concentrated, employment program. So we have that thought, Mr. Chairman. Mr. GOODELL. I think it is important, Mr. Secretary, to clarify that what you are doing now or what you have authority to do now with the New Careers program, is not the same as what we are talking about. You are talking about a new careers program which is a program to help get people into social service types of occupations. The only similarity between the two things we are talking about is that we want meaningful, productive jobs for the long run. You can of course, find many of those in the social service field `as Mr. Scheuer proposed. I am talking about meaningful, productive jobs in the private en- terprise field. We don't do that today. We do not subsidize wages in this area to move youngsters in that direction. We can and should open the door to private enterprise efforts in this area. Mr. Dent and I worked with others on the minimum wage law which goes to $1.60 an hour on February 1. This is going to be an in- creasing problem. I favor the minimum wage law. I think workmen should have a wage' on which they can live. We have made our esti- mates and the Industry Youth Corps Program we offer would provide an opportunity for 93,500 youngsters in private employment. We divert some of the money now used for your Neighborhood Youth Corps into this Industry Youth Corps. But putting $70 million into this program you would get employers to contribute three times that much because we are only paying one-quarter of the wage of the individual. The employer pays three-quarters. So that the $70 million invest- ment ends up with four times that amount going to wages paid these yOungsters and gives them on-the-job training. Now, this is the proposal that we made last year and that we are again making now. It seems to me with the urgency of the problem that you described, with which I agree, we should not be hearing from you some talk about two or three experimental programs under MDTA. We don't really have adequate authority to move full scale. We should be moving right now in a major way in this area. Mr. MEEDS. Mr. Chairman, will the gentleman yield? Mr. GOODELL. I would like the Secretary to answer. I don't want to get into a debate. Secretary WIRTZ. It is what you are proposing. It is what we are doing. The fact that you have described it differently does not change that fact one bit. ` Mr. GOODELL. Let us not fuzz the record. You mentioned three experimental programs you are doing with MDTA along these lines~ I asked the question how many you had in your other program in PAGENO="0368" 1206 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 private employment. I would like to ask how many people you have employed now under these three experimental programs where you are paying part of the wage? Secretary WIRTZ. There is another question that is relevant, and that is, how large an area can we cover with the on-the-job training programs in the MDTA? My objection, Mr. Goodell, is against singling out the Neighborhood Youth Corps Program and asking about the on-the-job opportunities there, without regard to the fact-let me see, it is $400 million roughly Manpower and Development Training Act which we are administer- ing along withthat. So the situation is that we are now in a position to provide on-the-job training opportunity and are moving very rapidly in that direction. Mr. 000DELL. Paying part of the wage for private enterprise? Secretary WIRTZ. Not in that form. Mr. DENT. In the first place, we know that the legislative amend- ment practically tied the hand of the administrator to the point where if he is paying any part cf the wage, he is paying through subterfuge by picking up a greater part of the training cost. Mr. 000DELL. The legislative change would not only give you authority but require you to move in this direction. Mr. DENT. Then I think the proper question is, Mr. Secretary, would you favor a proposal that would give you direct authority to do this? Then we will talk about the money. Mr. GOODELL. I think he went around the barn on that, but I will be glad to have you repeat it directly in that way. Mr. DENT. I thought I understood the Secretary to say that he would welcome an opportunity to deal directly with the problem with- out having to use a subterfuge or paying a large part of the training cost in lieu of a wage part. I may be wrong. Secretary WIRTZ. You can't take one part of this picture. You are talking about a bill, Mr. Goodell, which also goes on to provide for a tax credit for this same kind of thing. You can't separate these things out. Mr. GOODELL. Tax credit is a separate proposal which does not come before the jurisdiction of this committee. Secretary WIRTZ. Respectfully, I think it is not. The basic question is how far should you go in actually putting the money into the hands of the employers by sudsidy or by any of these other devices. You are talking here about what is in another committee's jurisdiction. Let us recognize it is also part of a problem which you have in an- other committee in an answer in terms of tax credit. We want to be sure that the right people, and by that I mean the hard core, unem- ployed are those who get the benefits of whatever money the public wants to put in this program. That is the basic point. Mr. GOODELL. Let us put it this way~ Secretary WIRTZ. I `get only half way around the barn. Mr. 000DELL. I am sorry. Did you have more to your answer? Secretary WIRTZ. Yes, just to point out, in response to the chairman's point, too, it is not an easy question. It is a hard one. It is one in which I think we all recognize it is the `desirability of private employers' to do all the' training that can possibly be done and our shifting as rapidly as we can in that direction. PAGENO="0369" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1207 I would like to insist that there is also the desirability of maintain- ing those programs which make whatever we do here part of a pro- gram to get the hard core unemployed into a better position. Mr. GOODELL. I agree with you. Secretary WIRTZ. It is a fine balance of the extent to which one should pay institutional training, on-the-job training, payment of part of the salary or tax credit. That is a kind of spectra. Mr. GOODELL. The tax credit proposal is not going to be enacted in this Congress. We are talking now about an Industry Youth Corps proposal for giving some kind of assistance to pay wages to these poor people who are defined in the Opportunity Crusade as those having low skills and low income, to try to get them jobs in private enterprise. The question is directly there. It does not have to be fogged up with any discussion of tax credit because that is not in the books so far as Congress is concerned this year or probably next. We are talking about a very urgent problem, and you have characterized it very very affectively. We are not going to have tax credit for 2 or 3 years any- way. Should we not move in this direction with a rather big problem? Secretary WIRTZ. No. Mr. GOODELL. You are opposed to the Industry Youth Corps? Secretary WniTz. Yes, I am. My answer may put me at a disadvan- tage, and I appreciate this fact. I am not, at this point., however, pre- pared to say that I think the right answer is for the American tax payer to subsidize American employers in terms of direct wage pay- ment. My answer to that is "No." I am strongly in favor of a control of a program along the lines of the on-the-job training program. Mr. GOODELL. You already, in effect, have said that you are doing that in three experimental programs by t.his fine line that is drawn for giving them enough money for equipment and personnel. You ap- parently don't think it is wrong to subsidize the employers indirectly where you don't have the authority to do it directly. I think you would be better off to have proper standards to effec- tively administer such a program whereby this can be done directly and openly. Mr. DENT. It could be done by broadening the powers of the Secre- tary so that he may, without being tied to a specific program or amount to be spent in that area, where he can, through the administra- tion of this act, using the discretion he has, the discretion that he can sue in the matter, select certain training programs where he can pay, we give him the right without stipulating amounts, without. telling him rules and regulations as to how it should be done, but I believe he has to have a year or so experience in starting this type of program be- cause eventually, we have to come to it. Secretary WIRTZ. You know, we are so close together that to suggest a basic difference would be a very great mistake. I don't want to sug- gest t.hat. I just want to add one other thing along the lines of what you have just. said, Mr. Chairman. One of these types of experimental programs or perhaps two-I am not sure which one comes closest to~ what Mr. Goodeil is talking about-which were proposed and which we had explored, carried imong othe thrngs `~ ten ibly hu~h price tag, `Wout $8,000 or $9 000 per person. I am talking about those programs that. go the furt.hest in the direction you are talking about and which we had considered experimenting with. Now that is too high. 80-084-67-Pt. 2-24 PAGENO="0370" 1208 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. GOODELL. That is an entirely different kind of program. Secretary WIRTZ. No; it is not. Mr. GOODELL. What we are talking about is a program involving individuals at the entrance level of income, normally a large number at the minimum wage level, which is $1.40 now and soon it will be $1.60. The employer, himself, with the Industry Youth Corps, will bear a large share of the responsibility for on-the-job training. If you are telling me that it would cost that amount of money to get farmers and small businessmen to hire these youngsters with a jirect subsidy for part of their wages and provide the kind of on-the- job training that they need, I think we are talking about an entirely different thing. Secretary WIP~TZ. We sure are. You are talking about those who are ready to work. I am talking about those who need help very much. Mr. DENT. Mr. Meeds. . Mr. MEEDS. It seems to me that we are oversimplifying this thing at this point. It ought to be brought out, for instance, that we should be dealing primarily with the hardcore, unemployed person in this area. To simply lift the hard core, unemployed person off the street and place him or her in an on-the-job training program may or may not and probably will not, at that point, be sufficient. There is a tremendous need for a lot of supporting service. Now, how far is industry willing to go in this field? Do we know? Have we tried these things? I don't think that we can just wholesale say that 25 percent of the wage be applied by industry to make up for this supporting service that must be furnished from the other 75 percent. I think it should be pointed out that we are trying now, but with a 25-percent figure we have our feet set in concrete, so to speak. We are tied to something that must be done on a certain ratio. You can't judge these things in these terms. Mr. 000DELL. Will you yield? Mr. MEEDS. Yes. Mr. G-OODELL. A Federal payment of 25 percent is not an un- changeable figure. I might add that our proposal looks to the em- ployer to pay 75 percent of the wage, not the Government, as you sug- gested a moment ago. It may turn out, in a bipartisan fashion, we can give a range of flexibility to the Secretary. So far, in inquiring and talking to various people who are concerned about youngsters at the minimum wage level, it has been indicated that 25 percent would prob- ably be enough to induce them to move in this area. That is why we chose the figure. If you feel that we find from the testimony that it should be 33 or 40 percent, why we could consider that. Mr. MEEDS. Mr. Chairamn, I agree that certainly this ought to be tried but not as a national program before we have some idea of what is going to happen. Mr. GOODELL. You people don't seem to believe that this is an urgent situation we face in this country. I am surprised and disturbed by it. Mr. MEErs. Mr. Chairman, may I pursue my course of questioning? Mr. DENT. Yes. Mr. MEEDS. I would like, Mr. Secretary, to have you give us some idea of what is being done by your office in cooperation with the Office PAGENO="0371" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1209 of Economic Opportunity and other departments of this Qovermnent with regard to the question of the hard-core unemployed. One, find him; two, recruit him; three, train him; and four, place him. It seems to me this is a very important area. We have before us a wonderful opportunity now to begin to do something about this. I would like to know what is being done about it? Secretary WIRTZ. Thank you, Mr. Meeds. Now we are on a tough point. This other was easy. We don't know exactly how many but we probably are talking about 2 million and a million and a half remain- ing hard-core problems in this country. You ask what we are doing about it. The first thing we did about it, at the President's instruction last fall, was to find out where they are. They are not scattered all over the country. The first thing we have done is to send people into the slums and ghetto areas and to find out where they are concentrated and start planning our program on that. This is a first and important step. Mr. Mi~rs. May I interrupt? Do these people just come out and place an ad in the paper? Secretary WIRTZ. No, they do not. Mr. MEEDS. How do you find them? Secretary WIRTZ. I will tell you how hard it is. When we instituted the concentrated employment program here in the District of Colum- bia area, I went to a group of Negro leaders one night. They said to me exactly what you are saying now. "Nothing you have done so far will even get in touch with these people. You don't talk their lan- guage. They don't like your institutions, any of them. You have to get through to them to find where they are." Your question suggests the heart of the problem. What we are doing on that point in the concentrated employment program is to line up a group of people, whom we are calling coaches. These coaches go out into the community, and find out by name and by individual who these people are. The people enter in a 2-week entry program of one kind or another. The heart of our present answer to the question you raise is that we are now working with that group on a ratio of no more than 20 to 1, so that we are going to identify one person to work with finding 20, and bringing them through this entry program. We are getting them into a training program and staying with them on a person-to-person basis, getting them jobs and staying with them even after they get the jobs. Mr. ME1~s. Do you find, Mr. Secretary, that the type we are talk- ing about now is generally ready for on-the-job training? Secretary WIRTZ. No, sir; in most cases not. Mr. MEEDS. Why not? Secretary WIRTZ. There are three answers. One, he probably dropped out of school before he had any kind of sufficient basic edu- cation. Two, there is probably a factor of very real alienation at this point. Call it lack of motivation, I wish we had some shorter words for it. As a nuttter of developed skill and as a matter of attitude he is just not yet a good risk as far as even an on-the-job program is concerned. We have to meet that problem. Mr. MEEDS. At that point you find a real reluctance on the part of industry, and understandably so, to accept this person in an on-the-job training position. PAGENO="0372" 1210 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Am I correct? Secretary WTIRTZ Yes; in an established program we are now finding an increasing willingness on the part of employers to share with us that risk, to waive some of their requirements and so forth. The answer to your question is, yes. So far as any traditional program of the kind Mr. Goodell is talking about is concerned, the answer is, yes. Mr. MEED5. So that something else has to take place between this finding, recruiting, a.nd placing? Secretary WIRTZ. Yes. Mr. MEEDS. What is that something, if you know? Secretary WIRTZ. I don't think we know all about it yet. We can do the training, the answers are comparatively easy there. But in meeting this problem which we call motivation or alienation or what- ever it is, I certainly don't pretend that we understand the answers to that ~ret but that is tl1e toughest problem of all. Mr. MEEDS. Would you not say from what we know now it will take a combination of things, certain basic education, drawingtliese people into the mainstream of society, and a whole host of supporting services that must be furnished? Secretary WIRTZ. That is correct.. Mr. GOODELL. Mr. Chairman, will the gentleman yield? Mr. MEEDS. Yes, I will yield. Mr. GOODELL. I don't think that the increasing willingness of private employers to take risks in training of employees has to be documented. Their willingness may give one more weapon to this whole approach. I don't wish to belabor this, but you are overly defensive in considering our Industry Youth Corps proposal. It seems to me this is basically what is happening here: You are saying in effect that our Industry Youth Corps won't solve all the problems and is therefore of no value. No one is claiming that it will solve all the problems. It will be one more weapon in the arsenal that will move us in a direction that will be extremely helpful. To say that we need the other weapons also to reach certain types of hard-core youngsters does not mean that this weapon would not be helpful in the arsenal. I am amazed to hear you say after 3 years of the War on Poverty and the Manpower ProgTam and all the surveys that we have been taking that we still have not found these youngsters. I am sure there are a lot of them that we have not found. But I can tell you right now we have found plenty of them that need help and aren't getting help. I wouldn't say our first priority is finding them. I think you go out and talk to some of these people around the neighborhoods, they can provide you with plenty of them. They are there. Finding them? It just amazes me after 3 years of the War on Poverty and our Manpower Program and the rest that you can say that it is such a high priority. Help those that we have found. Secretary WIRTZ. Mr. Goodell. your weapon is a popgun or water gun. You want to pick it up in an effort to lay down some other weap- ons that have real, live amimmition. The suggestion that a 25-percent subsidy on a wage rate to American ein~loyers w-ithout any connec- tion with the supportive services and all the things that need to be done to take care of the hard core employees is not a suggestion for anot.her meaningful we~Ipon. PAGENO="0373" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1211 Mr. GOODELL. Mr. Wirtz, I suggest that you withhold any further comment because I find you are digging yourself deeper and deeper in this thing in opposition. You started out with an open mind. Now you are ending up by saying you are opposed to it completely. We are going to move in this direction in the next 3 or 4 years if we are going to solve this problem. I would hate to have you on public record so vehemently opposed to it. There are many experts in this field very much intrigued by this proposal Sand who feel it has great potential. I think you ought to think a bit before you get yourself too far in opposition. Secretary WIRTZ. Okay. Mr. DENT. As I understand it, the Secretary has made this whole testimony open for questioning. Secretary WIRTZ. That is right. Mr. DELLENBACK. I have listened with interest to this general col- loquy but I would like to be sure that I understand what the Secretary is saying. May I ask a few questions along this line? Mr. BRADEMAS. Mr. Chairman, will you recognize members on both sides of the aisle? Mr., DENT. Oh yes. We have been working in an informal manner. All will be recognized. Mr. DELLENBACK. Mr. Secretary, how many unemployed are there in the Nation at the present time? Secretary WIRTZ. May I give you two answers? I can answer pre- cisely in terms of the traditional definition of unemployment. That answer is as a working figure in the neighborhood of 3 million peo- ple. For an unemployment rate that is 3 million people at any par- ticular time, it fluctuates. The monthly report which you see in terms of percentages and which is presently 3.8 percent translates into about 3 million persons. As far as the problem that we are concerned about in connection with Economic Opportunity Act, that figure really, Mr. Dellenback, is not very relevant, for this reason. It includes only those who are actively looking for work and are unable to find it. A good deal of the poverty problem involves those people who have given up for one reason or another even looking for work. There is another difficulty. The national figure is an average. It averages the suburbs and the slums. T here are two answers to your question. The~ first is the 3.8-percent figure, meaning 3 million people. A much more meaningful figure is that in the slum and ghetto areas in this country, even by that tradi- tional measure the figure is 10 percent. If you add those who are not even looking for work, those who are left out in the count because they just don't show up, those who are working so little that it doesn't add up .to much of anything, it is 34 percent~ in these areas. Mr. DELLENBACK. You are talking about the slum areas in your testimony? Secretary WIRTZ. Yes. Mr. DELLENBACK. Of this 3 million you would characterize as hard- core unemployed 1½ to 2 million? PAGENO="0374" 1212 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Secretary WIRTZ. That would not be a comparable figure. I am talk- ing about that group which we are interested in here this morning. I am including those who are not even looking for work, who are stand- ing on street corners, who have just given up. Mr. DELLENBACK. Some of those would be in addition to the 3 million? Secretary WIRTZ. That is right. I would guess, and I think this is only a guess, that of that 3 million figure something in the neighbor- hood of half a million would probably be included in this group. I am thinking particularly of the hard-core unemployed. I mean those who have been unemployed for more than 15 weeks probably present a serious problem. That is probably 464,000. Mr. DELLENBACK. On a comparable base against the 3 million you would say a half million? Secretary Win'rz. About a fifth of it. You see, a lot of it is seasonal unemployment. A lot of the 3 mil- lion figure is because of seasonal unemployment. Mr. DELLENBACK. Recognizing that we are striving to reach the problem of the unemployed- Secretary WIRTZ. So that the record is clear, I meant frictional un- employment, people moving from one job to another. The seasonal unemployment is also a large factor. Mr. DELLENBACK. Recognizing that you are concerned as we are con- cerned with the question of unemployment and not the semantics of whether we call it hard-core or soft-core, or whatever we may be deal- ing with, is there not a significant group in this country, perhaps with particular heavy emphasis on certain minorities, who really are capable of holding jobs without this complete social reeducation to which the gentleman from Washington was alluding earlier, who just aren't able to get employment? Secreta.ry WIRTZ. Because of a lack of job availability? Mr. DELLENBACK. Perhaps a lack of sufficient skill on the part of the person involved to fill the job availability that is open. `Secretary WIRTZ. That would be correct. Mr. DELLENBACK. If we deal with this on a graduated scale, surely at one end we have those who are completely unemployable, we have to almost start to reeducate and socialize them, to bring them to any sort of level. As we ~tart moving up this line we hit persons who start to have employable skills or almost employable skills, if we do something marginal to get them over the line to a job. `Secretary WIRTZ. That is right. Mr. DELLENBACK. On these experimental programs, when we are willing to have on-the-job training and we have Federal funds to help with certain types of training aids, we are dealing with this group and you are doing experimental work in this `area. Is this correct? Secretary WIRTZ. That is correct. `Mr. DELLENBACK. It seems to me that whether you have to shift a little bit down and continue it a little bit further ~or whether you are still talking sitbstantially about this group, that we do have ~ sub- stantial number of people in this country who, with some additional marginal help could `be `brought into self-sufficiency and could be PAGENO="0375" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1213 brought into a situation of employability. Through your testimony runs such phrases, with which I am in complete agreement, as we are doing "what is necessary :to enable a man to find and hold a decent job at a decent `wage." For some of these people this is marginal as to what we need to do, instead of basic and fundamental. Am I correct? Secretary WIRTZ. Yes, sir. Mr. IDELLENBACK. It seems to me that if this has been the case, `isn't `there here a potentially `substantial group which would `be benefited materially if we were `to have a program that would induce private enterprise to bring these people `into employment? They have an almost employable skill. Particularly with rising wage rates, private enterprise says we can't take them on at $1.60, $1.75 and still get a profit initially, but we can take them on, `perhaps, at $1.20, `because this is a marginal breakpoint for us as `to what we can or cannot do. Is that. right? * Secretary WIRTZ. There is that group. I `am not sure that is the right answer' to it. I would like to `reserve comment at this point. Mr. DELLENBACK. I am not trying to lead you up a `blind alley. I am with you as I am thinking o'f this problem. Secretary WIRTZ. I ~am with you all the way. I `think there is this one alternative. The line of your thinking is exactly the line along which we are proceeding in the concentrated employment program. We are bringing in 200 hard-core cases each 2 weeks in each of the cities in which we are working. In terms of your distinction, the distinction you made between those who are almost ready and those who require all of the sup- portive service, we are doing all of our planning on the assumption that out of the 200 we bring in each week, as we are here in Wash- ington this week, and in Cleveland, and so on, 100 of those probably require a lot of additional attention and about 100 of them are just about ready to move on into the private employment area. We are meeting the problem to which you refer by going to the employers in the community and saying, "Here are these kids." I will give you a typical example. A boy with a police record who has the stuff may be disqualified from employment under the present established practice, because somebody does not want him and legitimately doesn't want to take a chance because of his police record. That is the typical person to whom you refer, or one of them. We are going to the employer and saying: "Will you take this boy on? He has what it takes. He has a blur or a scar on his record. We recognize that, and' so does he. We are `telling you about it. What we are doing is putting one of these coaches'with this boy to work with him, stay with him all the way on through. Will you give this fellow a job?" The answer is "Yes." We are getting this answer. My point is that I think this situation- and I will go back to the point of the kind of person to whom Mr. Goodell referred-is one in which the employers will be more interested in taking that boy with the addition of the kind Of help we are talking about than they will by paying him 25 percent of his wage rate. ` PAGENO="0376" 1214 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. DELLENBACK. I don't see that the boy you are referring to is going to be helped by 25 or 40 or 50 percent of his wages. Isn't there another major group where the need is not the sociological need, not this type of supportive work? It seems to me what you have talked to is a kind of supportive help. But isn't there a rather considerable group who do not quite have the skills? They have the aptitude, given 6 months of training either in school off the job or, better yet, on the job, and they can be turned into an efficient producer that employers would be glad to have on the payroll. Isn't there a. substantial group in this area? Secretary WIRTz. Yes; there is. Mr. DELLENBACK. It seems to me what I read in this program that Mr. Goodell is talking to is, in part, some method of enlisting the sup- port of private enterprise in reaching this particular group. I don't read the program as being all inclusive as I listen to Mr. Goodell and others supporting it. I do not think it will do everything. I do not think anybody is saying it will do everything. It seems to me that before we wash this program out, it is a tool that potentially has great value in enlisting private enterprise together with Government in saying: "Here is an almost efficient producer. Pri- vate enterprise, join with us in getting him to be an efficient producer." Doesn't this program have promise viewed in this perspective? Secretary WTIRTZ. Yes; it does. If I follow you, what. you have described is very close to what we think of as the typical on-the-job training situation. My regret about the appearance before of great difficulty when we are really very close involves only, as I see it, the matter of whether we should move more rapidly past and through the on-the-job training, which is our present answer to this, to one in which we just say: "Pay 25 percent of his wage. Don't specify whether it is to be training or not, but the Govern- mnent pays 25 percent of his wage." I believe in that enough to give it very thorough experimentation at that point, but I don't believe it offers an advantage so far as the hard-core case is concerned, the kind to which you refer. Mr. DELLENBACK. Let us wash the hard-core case out, the one that needs great. supportive assistance. If we talk in terms, though, of saying there is this substantial group that needs help, how would you suggest that we enlist this tremendous power of private enterprise to assist with this problem of supplying employment to these people in a way that will be superior to this particular proposal? Too often either the Government is going to try to do it alone-and it is trying to in some instances-or we say this is no problem for the Government, that private enterprise should do it alone. In that case it often does not get done unless we say together that we want this done. What help do we need to give to private enterprise to induce it to come in at this stage of the game to help with these almost employable people that would be superior to this sort of program? Secretary WIRTZ. If we pay 25 percent of the wage? Mr. DELLENBACK. I don't care what the percentage is, or if it is any PAGENO="0377" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1215 percentage. You are almost there when you say: "We will supply you training aids, but not pay any wage." They may say: "We don't need training aids on this job. What he needs is somebody standing at his elbow and talking to him occasion- ally. He is not worth $1.75 to us initially, but he is worth $1.20. We will take him on for 6 months, but at a minimum wage." Secretary WIRTZ. Let me ask one question, which I expect is the heart of the difference between us. Are we talking about paying that to an individual selected by the Employment Service or by the training agencies, or are we talking about paying somebody selected by the employer? I think that will smoke out the differences there. Mr. DELLENBACK. Is this a major distinction? Secretary WIRTz. I think it is. Mr. DELLENBACK. Where should it be? Secretary WIRTZ. If there is any other basic difference between us here, I am not sure I recognize it. For the time being, as long as that number of people is as high as it is, I think it has to be with those agencies which are in a position to pick out the hard-core case on which I think almost all of us would agree we ought to concentrate our efforts. I believe, Mr. Dellenback, that is about the only difference. If you remove that difference, then it would be very hard even for Mr. Goodell and me to have an argument. Mr. GOODELL. Will you yield so that I can clarify this point? Mr. DELLENBACK. Yes. Mr. GOODELL. I think, Mr. Secretary, that in the proposal on the Industry Youth Corps, the selection of the individual is made by the Community Action agencies locally. If there is one agency that knows where these are, I presume it would be the Community Action agency. Secondly, to characterize the Industry Youth Corps as simply pay- ing 25 percent of the man's wages, and that is all, puts it totally out of perspective. You can continue, you have all the other programs available, on-the- job training, all the supportive service can be folded into this. This is an additional weapon. I don't believe for 1 minute this would just reach the marginal group that is ready to go over the line. It has the potential to reach many hard-core youngsters, because all your other supportive services and programs are available as a part of this. And I think that should be clear in the record. Mr. DENT. I think you have made your point. Mr. Scheuer has been waiting because he is the father of some of this particular legislation we are discussing. I would like to have his reaction. Mr. SCHEUER. I would like to say, Mr. Secretary, that I wish I could say at this point that I had a fistful of clippings in my hand or that I had an unanswered pile of letters and telegrams, so that I could wield a finely honed surgeon's scalpel and maybe make the headlines tomorrow. But I don't have anything of that kind to say. I have been working with you and with your associates at that table for the last several years. I can only say that all of these men PAGENO="0378" 1216 ECONOMIC OPPORTIJNITY ACT AMENDMENTS OF 1967 have shown not only high professionalism and expertise and com- petence out of long experience, but also a zest and enthusiam for their jobs, for finding new approaches, new techniques, a willingness to change established ways of doing business, that I think has resulted in a veritable explosion of progress in the last year or year and a half, not only in getting the unemployed in some kind of public-service jobs as aids, which I have been concerned with, but perhaps even more important in experimenting with means of involving our private sector in programs for the so-called structurally unemployed. I think this is important. I lmow you are concerned with that, too. I think we all must be sure that~ in these early beginnings of the program we don't make ourselves vulnerable to the charges of boondoggling, of an unjustified subsidy to the private sector that isn't explained in terms of real service to the particular people who need it. I ask that we look back at some of the instances where we have broken the minimum wage structure and permitted industry to em- ploy handicapped people-the blind, the disabled-where we have found cases of exploitation. That is part of our history that we can not be proud of. We have learned a great deal about how to provide employment creatively and productively with guidelines of estab- lished goals and standards. I am sure that is the direction in which you are aiming. Secretary WniTz. Mr. Scheuer, when you develop a program of the kind you did, then when you write us a letter of the kind you did last week, to ask just what is going on about these various programs, I want to say to you that you do more to help our end of the job than anything could be. You put, in testing it, an intensive 48-hour review in the Depart- ment of Labor to point out just how much is being done. I would like to express in return my gratitude for that kind of government leader- ship. It would be inappropriate for me to say more but indecent for me to say less. Mr. SoiiEu~R. May I ask unanimous consent at this time for the questions and answers we have developed on various technical aspects of the programs be placed in the record following the colloquy with the Secretary? I don't think much of it is of general interest, but I think it would be helpful to have it in the record. Mr. BRADEMAS. I would like to ask a couple of questions of the Secretary. Mr. Secretary, to what extent can you give us specific information on the employability status of these enrollees before and after their training? Secretary WIRTz. In the Manpower Development and Training Act? Mr. BRADEMAS. I am speaking of the Neighborhood Youth Corps. Secretary WIRTZ. There is a brief summary in my statement, but I wiTi ask Mr. Howard to give it in more detail. It appears on page 11. Mr. HOWARD. On page 11 of the Secretary's statement, Mr. Chair- man, is a condensation of a recent evaluation study that we have re- ceived. Basically, we start from the fact of the out-of-school program, and we start with the fact of unemployed disadvantaged. We do not have PAGENO="0379" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1217 any significant portion of employed persons going into the out-of- school program. The thrust is unemployed disadvantaged. Last year the kind of young people we were reaching has indicated a a increasing effectiveness with regard to the disadvantaged. This study was a scientifically conducted sampling, based on a number of projects, urban and rural, in a number of States. With field visits by an independent professional contractor-it was not performed by our organization-it was indicated that 59 percent-of those who have left the out-of-school program entered positive activi- ties, such as occupations, schools, and so forth, in the 3 to 12 months after completion. Further, it indicates that 35 percent were in full-time jobs~ This is now 3 to 12 months after they had completed the program. These are all dropouts. None completed high school. All were un- employed, all disadvantaged. Nine percent have returned to school. This could be back to school to get a high school diploma. It could be back to night school or in an adult-education school. Four percent were in vocational training. This could be MDTA or a local vocational school, one of those alternatives. Five percent were working part-time and going to school part- time. This is a typical combination of the older dropout whose does not want to go back to the regular classroom. It might be a night school, an adult school, or a vocational school. Six percent went into military service. We believe that from where we started, which was around zero, we have here about 60 percent movement. I might point out this is competitive. When we talk about full-time jobs, we are not talking about con- tiiiued, Government-subsidized jobs. We are talking about competi- tive jobs, 100 percent paid by the employer. We are not continuing the subsidy. This, I believe, is a measure of what is being achieved with the work experience program with a difficult group of young people Mr. BRADEMAS. Do you find any relationship betwen the period of training that a group has and the wages that they are able to com- mand? Mr. HOWARD. Mr. Chairman, we have a number of correlations di- rectly related to the length of time of the program. First of all, the longer in the program, the more stability, the higher percentage of jobs, the better jobs. The study that is referred to in the Secretary's testimony indicates that the average wages were about $1.57 per hour; in the $1.60 area for those who had gone into full-time employment after the Neighbor- hood Youth Corps out of school program Based on the length of the time of the program the percentage of those who leave the program directly into jobs reaches a very high proportion after about 5 or 6 or 7 months. That is the more exposure to work experience, the more exposure to the remedial education and supportive service, the more ready these young people are to do a job which will give them employment and continuous employment.' We find that those who' stay in `longer don't turn over. A higher percentage of these have had just one job during the 3 to 12 months they were out of the program. ` ` ` ` ` ` ` ` *"* PAGENO="0380" 1218 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. BRADEMAS. Mr. Secretary, can you give me any comment on the nature of your efforts and whatever results you have been able to ob- tain in developing jobs? How effective do you find this aspect of the operation? Secretary WIRTZ. Do you mean the Neighborhood Youth Corps? Mr. BRADEMAS. Yes; my question is directed to the ~eighborhood Youth Corps. Mr. HOWARD. First of all, we request our sponsors to contact the Employment Service in the community, in fact, before the beginning of the project. The employment service is expected to work with our sponsors on recruiting, testing, and referral of those who are ready for the MDTA Program, for available jobs, and to refer to our spon- sors those who require our work experience programs. There is continuous contact between the sponsors, who are largely Community Action agencies, and employment service during the life of the program. At the time the youth is judged by his counselors to be a person who is ready for a regular job, there is contact with employers through the employment service a.s well as through the resource of the Community Action agency, of the Government agency that happens to be respon- sible. In many cases the youth will go into competitive employment or full-time employment in the agency in which his work experience has occurred. The employment service has place a large number of youths into jobs. Interestingly enough, our studies have shown that the youths will often go out and locate their own jobs after this exposure to work experience. In addition, our sponsors have done job development work. As we point out here, though, the record of getting jobs and holding them is a pretty encouraging one, given the material to start with. Mr. BRADEMAS. I want to say that we have some Neighborhood Youth Corps programs in my own district in South Bend. They have proved to be one of the most popular and effective programs of this kind that we have had in our community. I want to congratulate you, Mr. Howard, on doing the first-class job you are doing in administration of the Neighborhood Youth Corps program. Mr. DENT. With the cooperation of the minority we will continue until we hear from the floor as to whether or not. we have an oppor- tunity to sit this afternoon. Mr. Quie wishes to ask some questions; Mr. GOODELL. Before Mr. Quie, do you have a figure on the number of contracts in private employment? Mr. HOWARD. The total of the enrollments already executed as of Monday is 164 in the private sector. These are in Evansville, md., Dallas, Tex., Jersey City, N.J., and Bridgeport, Conn. Mr. GOODELIJ. Are these ones you have contracted for, or are they now employed? Mr. HOWARD. We have executed the contracts and made the funds available for these enrollments. These were executed in the last several weeks. Mr. GOODELL. How many do you have, the total, in the Neighborhood Youth Corps today? Mr. HOWARD. In the out-of-school program? PAGENO="0381" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1219 Mr. 000DELL. Yes. Mr. HOWARD. Approximately 60,000. Mr. GOODELL. 164 are in private employment? Mr HOWARD. That is right. Mr: QIJIE. Mr. Secretary, before I ask you any questions about the programs in OEO which you are administering, I would like to ask you about new regulations you are developing in occupations in agri- culture which are particularly hazardous to children below the ages of 18. I understand you are still in the process of taking hearings or receiv- ing information on that. . Mr. DENT. I don't like to object to this, but we had to stop Mr. Scherle, who was going into another area of legislation. I will respectfully ask that the committee try to stay within the province of the problem before us, the OEO legislation. That question, I think, you can ask the Secretary afterwards. Secretary WIRTz. I will, as I did in theother case, get in touch with Mr. Quie regarding this matter. Mr. QUJE. What evaluations have you conducted now of the pro- grams which have been delegated to you, such as the Neighborhood Youth Corps? I guess you now call the Nelson program Operation Mainstream. Is that correct? Secretary WIRTZ. That is correct. Mr. QUIR. That is the Green Thumb, Foster Grandparents? Secretary WIRTz. That is right. Did you say "Foster Grandparents?" Mr. QUIR. Would Foster Grandparents be a part? Secretary WIRTZ. It is not. Mr. QUIE. The New Careers Program? Secretary WIRTZ. I will make that clear. The money comes from that same program, but the delegation of authority to the Department of Labor does not include that. It is my impression it wasdelegated to HEW. Mr. QUIE. The New Careers Program, the Special Urban-Impact Program, and the other two are the four that you have jurisdiction over at the present time? Secretary WIRTZ. That is correct. Mr. QUIR. Of those four, what kind of evaluations have been com- pleted to date? Secretary WIRTZ. The evaluation with respect to the Neighborhood Youth Corps, the tra.nsfer of the other program was in March of this year. Mr. QUIR. How many evaluations of contracts in the Neighborhood Youth Corps have been completed, and how many have not been completed? Secretary WIRTZ. Evaluations of the results of the program? Mr. QUIR. The results and the operation. Secretary WIRTZ. I can give you our own report on the scope of the operations, the character of them, and so on, and so forth. I am not sure whether your question is different from that that Mr. Scheuer has put in terms of the results as far as the graduates are concerned. Mr. QUIE. It would not be limited to just the graduates of the Neighborhood Youth Corps but to the operations of the program. Has anybody studied the way it has been administered and the work which has been done? PAGENO="0382" 1220 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. HowARD. I assume the question was both outside as well as inside study evaluations of the program? Mr. QUIB. That is right. Mr. HOWARD. First of all, with regard to contracted outside studies of tile Neighborhood Youth Corps program, for the previous authori- zation hearing a year a.go, we produced for the committee the results from a contracted evaluation of the effectiveness of the program in terms of placement, in terms of jobs, and in terms of activities. We just alluded in the Secretary's testimony to the summary of a recent followup study by an outside firm. It was a followup of Neigh- borhood Youth Corps terminees in terms of jobs, in terms of back- to-school, in terms of effective employment, in terms of employability as represented by their participation in the Neighborhood Youth Corps. In addition, we have under contract now a study of the inschool program, again by private contractor. A study of the effectiveness of inschool projects, by the same private contractors, was made in 1966. This study, which involves the very early days of the Neighborhood Youth Corps, points out that further research was needed to establish the program's effectiveness in reaching its goals. The inschool study, now in process, is in response to that recommendation. I should point out that we have also contracted for evaluations of the new programs; that is, the "Mainstream," the "New Careers," and "Special Impact" programs. We are contracting for independent evaluations of those as they develop. In effect, the programs are brand new. The Division of Analysis and Evaluation in cooperation with OMPER has recently completed negotiations with several research organizations for evaluation of new programs operated by BWP. As a result of this effort, we expect to contract for five evaluative research project.s to study various aspects of the New Careers, Opera- tion Mainstream, concentrated employment, and Special Impact programs. These studies will be conducted with funds available for 1967 research activities at an estimated total cost of $300,000. Mr. QrnE. When will the ones done by outside contract be com- pleted? Mr. HOWARD. For the new programs? Mr. QUIE. No; the old programs. Mr. HOWARD. The current one on the out-of-school is now com- pleted. Just a brief summary of the findings is reflected in the Secre- tary's testimony. Mr. QUIE. Could we then have a copy of that? Mr. HOWARD. Sure. We are getting extra copies. We are supposed to get them today or tomorrow from the contractor. He provided just two. He gave one to OEO. (The summary referred to follows:) SURVEY OF TERMINEES FxoM NYC OUT-OF-SCHOOL PRO~rECTS BY DUNLAP & ASSOCIATES, INC. INTRODUCTION This study was conducted to determine the educational and work experience of enrollees who terminated from NYC out-of-school projects from January 1, 1966 through September 30, 1966. Approximately 2,000 youth from 50 out-of- PAGENO="0383" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1221 school projects, including both rural and urban sites, were randomly selected to participate in the survey. Over 70 percent of the terminees were personally interviewed. REVIEW OF MAJOR ITEMS Summary of Major Experiences Since NYU Nearly 60 percent of the 2,000 terminees in the survey had been employed for some period of time since their termination from NYC. (The next largest involvement in activity was that of "looking for work," in which nearly 39 per- cent of all terminees were reportedly engaged. Other activities in which 10 per- cent or more of the terminees had been involved included: "not working-not looking"-20 percent; part-time work-18 percent; full-time school-15 percent;. and housewife or pregnancy-15 percent.) Employment and Training Experiences Over 70 percent of the terminees sampled were involved in one or more of the following work-related activities since their termination from the program: full-time work, part-time work, Armed Forces, Job Corps, MDTA institutional training, MDTA on-the-job training, registered apprenticeship programs, and Community Action Agency training programs (See Table 1). Two-thirds of the terminees who had been employed worked for 50 percent or more of the time since leaving NYC. Of those who worked, 70 percent of the males and 60 percent of the females were employed for more than 50 percent of the time since termination. The investment that NYC has made in these youth is already reaping a finan- cial return: Nearly three-fifths of those who worked since termination have re- mained in only one job. In addition, 27 percent have held only two jobs. The average length of time in present occupations is almost six months. For those who have held more than one job, the average length of time the job was held was three months, and the main reason for leaving was that the job was limited or temporary. School Experiences Nearly 25 percent of all terminees have had some schooling since leaving NYC (See Table 3). The frequency was one and one-half times greater for urban (26 percent) than for rural youth (17 percent). About 60 percent of the youth involved in school activities spent more than half the time since termination in these activities. Three-fifths of the youth who had taken educational courses since termination were still in school at the time of interview, and another 16 percent had com- pleted their courses. About half of these terminees were taking high school trade/ technical courses or courses for a high school diploma. Others were involved in elementary/secondary school courses, business courses, nursing courses, and college courses. Opinions About Present Employment Eighty percent of the terminees reported that they liked the type of work they were doing ,at the time of interview. With regard to pay, approximately two-thirds of the terminees reported being satisfied. The average hourly rate for all primary interviewees was $1.55; it was $1.54 for white males and females, $1.48 for non-white females, and $1.65 for non-white males in their present jobs (the average for the non-whites was $1.57 per hour). Primary interviewees aver- aged 38 hours of work per, week. Approximately three-fifths of the terminees felt that `they have a chance for advancement in their present jobs, and 70 percent thought that they were learning useful skills in their present occupa- tions. Opinions About NYU Experience For the entire sample, about 90 percent of the youth expressed satisfaction with their work experience in NYC. Satisfaction was somewhat greater for females than for males, and for urban terminees than for their rural counter- parts. Differences between white and non-white respondents were insignificant. Over three-fourths of all terminees felt that their NYC work experience had "helped a lot" or "helped some" their chances for employment. More of the females (35 percent) than the males (23 percent), answered "helped a lot." Differences between rural and urban groups and whites and non-whites were only slight. PAGENO="0384" H ~ II Ii g?_~ ~. ~ ~. (_~. ~ ~ ~ ~ H ~ ~ 0 0 ~ ~ ~ 0 ~ C) H ~ -1 ci) 0 C) PAGENO="0385" ECONOMIC OPPORTUNiTY ACT AMENDMENTS OF 1967 1223 TABLE 4.-Percentage of terminees who have had schooling since leaving NYC, and the percentage of time out spent in school (activities included are: Full-time schOol and part-time school) Percent of response~-Rate White Nonwhite Other No answer Total N Percent of time in school since termination from NYC: 1to24 25 to 49 5Oto 74 75 to 100 No schooling since NYC 579 1,110 66 233 1,988 4.49 3.10 3.62 7.59 81.17 4.95 4.77 4.14 11.08 75.04 4.54 3.03 3.03 89.39 9.44 5.57 4.29 8.15 72.53 5.33 4.32 3.97 9.35 77.01 Mr. HOWARD. We will also have a summary, because it is rather de- fective in terms of clarity, very frankly, in its present form. We will have both of those available for the committee. In addition, with regard to the inschool program, we expect a progress report in April and June of next year, since this is a two- cycle analysis. In addition to these outside contracted evaluations and the one I mentioned on the new programs, we have done evaluations with our own staff, and evaluations have been performed by the Manpower Administr~ttion evaluation staff We have, for example, conducted, last summer, an evalu~.tion of the effectiveness of the summer program to ascertain whether enough attention was paid to the supportive counseling and the kinds of activi- ties, or whether it was perceived of in the niinds of local sponsors as just a paid work experience. (The evaluation referred to follows:) MARCH 21, 1967. To: NYC field staff. - From: Jack Howard. Subject: An analysis of the NYC summer program. During the summer of 1966, the NYC evaluation staff made a number of on- site reviews of selected summer projects throughout the country. The results of their observations and findings are attached. The analysis should be of value now as wegive thought to planning summer components for 1967. On balance, it appears that most sponsors were successful in providing many hard-core disadvantaged students with adequate work assign- ments during the summer. The quality of supervision, the imprtct of the NYC summer projects on the local community, and public relations in general, all showed marked improvement over the previous summer program. Unfortunately, the picture was not all bright. Counseling and remedial educa- tion were largely ineffectual or non-existent in many projects visited. This survey also suggests that the NYC summer program still is not an effective vehicle for attracting young dropouts back to school. Moreover, seasonal factors had an adverse effect on some sponsors' ability to maintain their authorized participa- tion rate. In general, utilization of and coordination with Other community resources and organizations could have been improved. The attached should be read in light of your current plans to mount summer projects in the next few months so that our new summer projeëts can demonstrate a significant increase in the quality of services offered INTRODUCTION AND HIGHLIGHTS The Neighborhood Youth Corps authorized a national program of work ex- perience and occupational training this past summer directed toward helping the disadvantaged youth continue his, schooling and develop to the fullest his 80-084----67-pt. 2-25 PAGENO="0386" 1224 ECONOMIC OPPORTUNITY ACT AMENDkEENTS OF 1967 skills and potentials in order to aid him in eventually finding his place as a con- tributor to the economy. This summer program demonstrated it was an effective instrument in providing underprivileged youth with the opportunity to earn money through significant work experience. About one out of ten of the 1.8 million 16 to 21 year-old Americans needs some kind of special work opportunity during school vacation in order that they gain sufficient financial assistance to aid them in returning to school. Many of these youth were the target of the Neighborhood Youth Corps Summer Pro- gram, Operation Champ, Upward Bound, the President's Youth Opportunity Campaign, and other similar programs conducted during the past summer. Of course, the needs of all these underprivileged youth could only be met in a limited way by the Neighborhood Youth Corps, but available evidence indicates significant impact was made by NYC in meeting these needs this past summer. Briefly, during the summer of 1966 the Neighborhood Youth Corps achieved the following results: Enrolled over 150,000 disadvantaged students during summer vacation. Funded 906 summer projects in urban and rural communities throughout the country. Assisted an overwhelming majority of those enrolled in summer projects to return to school in the fall. Made significant contributions to local beautification projects. Helped to improve the maintenance and operation of school plants, parks and recreation facilities, Head Start projects, private non-profit agencies, governmental agencies and community organizations. Reduced juvenile delinquency and other socially disruptive acts on the part of teen-agers through well-defined programs of counseling, guidance and meaningful work-training. Helped to meet local needs by providing an additional 100,000 jobs in recreation and recreationally-related activities through Operation Champ. Despite the progress in 1966, there is still much that remains to be done. For example, there is an obvious need to test and explore new approaches for deal- ing with school dropouts in summer programs. More needs to be done to first, enroll each youth, and secondly, convince him to resume his education. The accomplishments, the problems, and the challenges encompassing the sum- mer program comprise the substance of the report that follows. PART 1.-BACKGROUND The Neighborhood Youth Corps' Summer Program Nine hundred and six summer projects were approved for in-school enrollees during the summer of 1966. The total authorized enrollment was 209,315. In actuality, enrollment as of July 31, 1966 stood at 192,650 (107,691 males and 84,959 females). The average duration for projects was ten weeks, although the variation extended to some running as little as six weeks and others for as long as 14 weeks. Costs of the approved summer projects were in excess of the expendi- ture for summer projects during the summer of 1965. All regions, states and localities were represented geographically, although project costs varied from state to state in excess of what normally would be expected. For instance Ken- tucky, West Virginia and Washington, D.C. mounted programs in excess of what might be expected because of compelling reasons of limited local employment opportunities, volatile social and racial situations, high dropout rates, etc. The purpose of the survey conducted during July-August by the Division of Program Review and Analysis was to make quick on-site evaluations of 51 projects in all regions, with special emphasis on the value of the summer pro- gram in helping youth to resume or continue their education. In addition, data was sought in relation to the following questions: 1. How severe were local poverty conditions? 2. Who was served by the program? 3. What impact did the program have on the local community; economically, socially and educationally? 4. What wa~ the involvement of the local CAA with the NYC program? 5. Did the program increase the participants' employability or otherwise help him overcome the handicaps of poverty? 6. What would enrollees have done without the program? 7. How best could the NYO summer program operate next year? PAGENO="0387" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1225 Because of the fragmentary nature of much of the data collected, program- wide findings and conclusions concerning some of the above were not feasible or were of limited import. Only a selection of the more viable were suggested in this report. B. The $`urvey Method Five Manpower Development Specialists from the Division of Program Review and Analysis visited a selected number of projects in each region. The total "sample" consisted of 51 projects with 7.134 enrollees, or about 3.7 percent of the entire summer enrollment. Projects were selected on the basis of the region, population size, urban-rural mix, and time and logistic requirements of the evalu- ation team. In all projects visited, the sources of data were NYC files and documents, inter- views and conversations with local. NYC staff, enrollees, supervisors and other project officials at every level. In addition, contact was established with `local community leaders, schoolofficials, CAA staff and State employment service per- sonnel; in certain selected localities, additional contacts were made with local indigenous citizens, civil rights groups, law enforcement officials and youth who did not want to, or were not able to, participate in the program. A list of the projects visited during the evaluations is attached to the report as Appendix I. PART II. ENROLLEE-CENTERED CONCLUSIONS AND FINDINGS This survey was carried out within the framework of a primary conception that the NYC summer program was primarily an instrument to aid youth to remain in school or resume schooling. In addition, the effectiveness of subsidiary objectives was also to be judged in terms of NYC's utility as a factor in the War on Poverty. Did the summer work-training experience have any effect on the participants' ability to overcome the handicaps of poverty? This view of the survey attempted to ascertain whether the total NYC experience helped to `overcome economical disadvantage, employability handicaps, verbal deficiencies, attitudinal and moti- vational shortcomings and personality, defects. Enrollee experiences varied widely in the different areas. Some received sig- nificant benefits, while others did not have an opportunity to develop to their maximum potential. Many distadvantaged youth found useful employment dur- ing the summer months, while a few realized little or no benefits. The great majority of enrollees continued their full-time enrollment during the summer months-few dropped out. Some of the more important conclusions and findings that appeared to emerge from the total picture are summarized as follows: 1. The summer program was markedly successful in influencing youth to return to school An overwhelming majority of the enrollees continued their education after the summer work experience. Those few who failed to return to school seemed to have found useful employment in many instances. 2. Enrollees' reactions to their summer ea'perience were generally positive Interviews revealed that (1) most were `satisfied with their pay, supervision and working conditions; (2) some did criticize their work assignments as being too tedious, boring or dull; (3) the average workweek of 20-25 hours pleased many since they could pursue other "vacation-type" recreational activities and still have spending money; and (4) most had plans to continue school in the fall, although a few were undecided because of a desire for a permanent job (more money), marriage, or poor scholastic achievement. 3. Most projects were successful in eni~olling the poorest of the poor in local communities It is clear that sponsors devoted themselves to reaching the hard-core, poverty- handicapped youth. Although there were observable differences in the average levels of poverty among communities in various regions, sponsors seemed to have generally selected the hardest cases relative to the available clientele in their communities 4. ~S1ponsors were not successful in reaching the unemployed, unafJlliated, school dropout ` It appears that only a very small number of school dropouts were enrolled in the summer programs.' One problem seemed to be that school-sponsored projects were not structured or inclined to establish contact with the dropout PAGENO="0388" 1226 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 who was unamliated with any agency, institution or program in the local com- munity. Since most initial recruitment for summer projects took place during the waning days of the regular school term, the dropout was in a poor com- petitive position for many available job slots. Moreover, the local employment services seemed to have played a minor role in recruiting dropouts for summer programs. 5. Youth employment prospects differed from region to region The job markets in three regions were excellent, causing some sponsors prob- lems in recruitment. Youths in Regions I, II and VII had access to very attrac- tive jobs, while many in other regions were unable to find temporary summer employment of any type and thus were unemployed throughout the summer. 6. Generally, youth employment prospects in rural areas were better than those in urban centers In most areas, but especially in Regions IV and VII, rural sponsors found themselves in direct recruitment competition with local farm industry. Farm labor usually offered lower wages, but longer hours, and many eligibles hoped for the chance to make more money by working longer workweeks~ Sponsors were not always as vigorous in their recruitment methods as they might have been because of loyalty to an important community industry, sympathetic regard for local needs, and a fear of antagonizing their farmer-neighbors. As a result, NYC did not, in every case, attract the most needy youth in the community, but those who were perhaps affluent enough to afford lower pay and shorter workweeks. NYC sponsors felt working for NYC would have benefited the youth more in the long run, but could not reconcile this with their desire to see the youth earn as much money as possible. PART III. PROGRAM AND FINDINGS-CENTERED CONCLUSIONS I. Types of Program Emphasis The 51 summer projects surveyed fell into two categories, according to their dominant program emphasis. School-Centered Emphasis, concerned with work- training related to a school institution, was predominant in 33 projects. Corn- munity-Agency Emphasis, where the work-training related to the community-at- large, was prevalent in the 18 remaining projects. The relative merits of the different approaches resist general conclusions because outstanding accomplishments as well as program weaknesses were found among both types. Generally, it can be said that school-centered projects tended to be poor in the quality of job assignments and administration and the com- munity-related projects were usually rated high on job assignments, supportIve services and supervision. At the same time, community-related projects tended to have administrative and managerial problems of one kind or another. No general conclusions can be reached regarding other program elements, such as counseling and remedial education, because weaknesses and strengths were observed in both types of projects. II. Pi~ogram Content A. Project Administration This component was rated high by evaluators in the majority of cases. School sponsors received some negative assessment regarding the quality of their record- keeping function, i.e., the absence of individual folders, incomplete information on Form NYC-16, and poor information on supervisory evaluation. B. Recruitment and Selection Urban projects usually did a better job in recruIting than did rural. However, rural projects, while not always operating at full strength, invariably enrolled the hardest cases of deprived youth. As would be expected, rural projects had recruitment problems because of ljmited recruitment apparatus, probeims of mobility and accessibillty, and competition from farm labor. C. Work Assignments Appendix III is a graphical representation of the distribution of primary work assignments of enrollees in summer projects. Generally, enrollees, during PAGENO="0389" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1227 the summer, worked in similar capacities as those in year-round programs, and in about the same proportions. The job assignments in urban centers tended to be more varied and have larger dimensions than those in rural areas D. CAA-NYU Relations In those cases where sponsors enjoyed a good relationship with the local CAA, they found the cooperative arrangement helpful and essential. Where the relationship was marked by differences and strife, the contrary was true. In too many cases, however, sponsors had no formal contacts with CAA's, and both seemed to have been content to go their separate ways. Sixty percent of the projects surveyed indicated they had little or no contact with the CAA. Thirty percent reported they enjoyed excellent support and mutual cooperation with CAA, and ten percent expressed serious concern about their present relationship. This latter group saw an increasing likelihood of irreconcilable differences with the CAA. Looking at it positively, the indications are that in those cases where there is a possibility of the cooperative arrangement being stabilized, there is justi- fication for the NYC sponsor to seek assistance from the CAA. Sponsors with good experiences said that the CAA's services had become an integral part of their operations. For instance, a Tacoma, Washington sponsor found CAA very useful in referring hard-core youth from its neighborhood centers. A Warwick, Rhode Island sponsor got major assistance from CAA in supportive services such as, medical and dental exams, legal aid and family counseling. The NYC sponsor in Phillipsburg, Montana found the CAA indispensable when they first phased in their operations; assistance was given in writing the proposal, hiring staff, lending personnel and facilities, etc. Those sponsors with unpleasant experiences generally felt they were threatened by loss of their independence, had fear of political embarrassment, and believed they would be stigmatized by too close an identification with the CAA. The ac- celerating pace of funding more CAA's will probably lead to more problems, at least in the initial stages, until experience and education bring about more clearly defined roles for each agency. E Counseling and Remedial Education Ninety percent of the sample of projects reported that some form of counsel- ing was provided enrollees. Less than half reported the availability of remedial education during the summer. Evaluators rated the quality of counseling in most cases mediocre to fair with only a few bright exceptions Sponsors in Toledo, Ohio and Butte, Montana were re~jorted to have excellent counseling components, with several unique features. The Toledo sponsor employed enrollee- counselor assistants to keep in touch with other enrollees who had difficulties It is reported that this technique was extremely productive in terms of solving enrollee problems. A Butte, Montana sponsor offers ten hours of counseling per week. This might seem an inordinate amount, until it is considered that 15 percent of the enrollees had prior police records. The success in working with these youth is impressive. Sixteen enrollees were sent to the reformatory in 1965 and none in 1966. Juvenile delinquency and youth offenses were down 50 percent over a similar period last year. NYC staff supplied most of the counseling during the summer months, and in those cases where school resources were relied upon, the counseling usually suffered because of vacationing counselors. Very little emphasis was placed on vocational counseling; the main thrust seems to have been towards guidance of a more personal nature, family problems, job-related problems, etc. F Supportive Services About half of the project sponsors reported giving no supportive services of any type. The remainder reported that they provided services of one kind or another, the most common being medical examinations. The. overwhelming ma- jority of the rural project sponsors were not able to provide supportive services because of limitations on local resources. G. Eqiwl Opportunity Of the 51 projects surveyed, evaluators found only three sponsors with prob- lems relating to racial balance and equal opportunity. One supervisor in the Sac- ramento, California project was found to be placing discriminatory job orders for PAGENO="0390" 1228 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 enrollees. This supervisor was not given any more enrollees. There was some local resentment in Great Falls, Montana against emphasis placed on enrolling Ameri- can-Indians, but this was found to be unjustified. Evaluators requested that the Decatur, Georgia project be monitored by Regional representatives for irregulari- ties in enrollee assignments and the imbalance in overall racial composition. In the overwhelming number of cases, the indications were that NYC was making impressive progress in integration of work-sites, but making less progress in maintaing racial balances in some projects. Uniracial projects were usually dictated by local sentiment and resistance to integration rather than by any failure on the part of sponsors to vigorously promote equal opportunity. PART IV. POST-ENROLLMENT EXPERIENCE The ultimate aim of the summer program was to influence enrollees to return to school, through the financial assistance, counseling and guidance they would be exposed to during the work-training period. Therefore, the value of the sum- mer program must be judged in light of their successes in achieving this end. In view of that criteria, just how successful was the summer program? The summer program was successful in influencing enrollees to continue their education. However, most of the projects were not successful in attracting drop* outs, and only moderately successful in stimulating those enrolled to resume their education. Appendix IV gives complete termination data which contains some implications for NYC. These findings are discussed below. Sponsors' ability to attract dropouts appears to have been a failure. Less than two percent of those sampled were former dropouts. There are a number of rea- sons for this lack of participation, but the most important is the fact that most of the sponsors were Boards of Education who either through inability, design or oversight, failed to concentrate their efforts on recruiting dropouts. Moreover, the results suggest that sponsors in some regions gave little or no emphasis to this particular pursuit. Two regions enrolled four percent enrollee-dropouts each, one region enrolled ten percent and the others enrolled absolutely none. Such dis- parity suggests a failure of communications, rather than a failure in recruitment efforts. Since the preponderance of sponsors were schools, not traditionally skilled in outreach methods, it is reasonable to assume that many did not make a con- certed effort in this direction in the absence of very strong encouragement from NYC). What about the dropouts enrolled in the program? As mentioned, only about two percent of the sample were former dropouts and the great majority left the program before its completion. For the small number who remained until the . end, the evidence is that a large majority returned to school. The obvious implication is that the, longer NYC has to work with dropouts, and treat the particular problems which initially causes them to abandon school, the greater the chances of success. It is also possible to conclude that in-school projects are not capable of retaining dropouts, even without the attendant discipline and regimentation (which many dropouts view negatively) of formal classroom study. The variables are so numerous, that conclusions are difficult to draw as to why this is so. However, some thought should be given to re-structuring and strengthening summer programs if they are to serve as vehicles to encourage dropouts to. return to school. The sample evidence shows that an almost identical number of students return to. school whether they complete the summer program ornot. PART v SOME RECOMMENDATIONS 1. The summer program was and is presently oriented towards the in-school enrollees which is as it should be, since the emphasis is on continuing the enrollees' education. Nonetheless, if the purpose is also to persuade the dropout to resume his' education, greater stress must be laid' to seeking him out and exposing him to program elements suitable for this type of youth. The indica- tions are `that schoOls tend to remain isolated from YOC, NYC out-of-school projects, community organizations, etc., where there is reasonable expectation the dropout can be found. There seems to be an obvious need for clearer guide- lines, predetermined allocations of job slots for dropouts, and established recruit- ment objectives regarding the enrollment of dropouts. * 2. Supervisory, administrative and program resources, are limited in many schools during the' summer. Vacations and limited work assignments of staff all PAGENO="0391" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1229 contribute to programming flaws which tend to vitiate the positive effects of the work-training experience. Recognition of this fact suggests the need for better selection of staff and perhaps an increased expenditure of money and resources by NYC to supplement these temporarily impaired services. 3. Although the data are fragmentary concerning retention of dropouts in summer projects, NYC's apparent lack of success demonstrates the need for increased and perhaps re-directed counseling components in many projects, which will emphasize treatment of problems which caused the youth to withdraw from school initially. 4. It seems that the pooi of eligible NYC applicants is circumscribed by local conditions of poverty. Allocation of job slots during the summer should bear a more direct relationship to the severity of these poverty conditions, minority representation, youth employment prospects, etc. APPENDIX I Project sites visited during summer evaluation, July 1-Sept. 2 REGION I Project Evaluation dates Somerville Opportunities Commission, Inc., City Hall, Somer- Aug. 11. ville, Mass. (U) R1-6376-23. Cambridge Economic Opportunity Commission, Inc., 678 Massa- Aug. 15. ~husetts Ave., Room 703, Cambridge, Mass. (U) R1-6436--23. City of Warwick, City Hall, Warwick, R.I. (U) R1-6414-42. Aug. 12. West Warwick School Department, Junior High Building, West Aug. 16. `Warwick, R.I. (U) R1-6417-42. Coventry School Department, Knotty Oak School, Coventry, R.I. Do. (U). New Britain Board of Education, Post Office Box 1311, New Brit- ain, Conn. (U) R1-6239-07. July 29. Council of Economic Opportunity, City Hall, Meriden, Conn. (U) July 28. S1-6043-07. Olean Board of Education, Post Office Box 578, Olean, N.Y. (R) R1-6265-34. July 25-26. Chautauqua Opportunities, Inc., Box 122, Mayville, N.Y. (U) Aug. 17. R1-6333-34. Board of Education, Post Office Box 270, Niagara Falls, N.Y. (II) Aug. 18. R1-6335---34. North Tonawanda Board of Education, North Tonawanda, N.Y. Aug. 1. (U) R1-6335-34. Union School District No. 1, Kenmore, N.Y. (U) R1-6259--34. Aug. 2. REGION II Recreation Council of the Memorial, Recreation Forest, Inc., War- Sept. 1-2. renton, N.C. Williamsport Area SchOol District, 845 Park Ave., Williamsport, Aug. 8. Pa. (U) R2-6213-40. Montgomery, Floyd, `Craig, Radford Community Action, Chris- July. tiansburg, Va. (R) T2-6379--49. Floyd County School Board, Floyd, Va. (R) R2-6276--49. July 7. REGION III Walker County Board of Education, Library Building, `Jasper, Aug. 24. Ala. (R) R3-6201-01. Dekàlb County Board of Education,' Dekaib Bldg., Decatur, Ga. Aug. 26 (U) R3-6254-11. Altamaha Area Community Action Authority, Inc., Post Office Aug. 29. Box 126, Reidsville, Ga. (R) R3-6276-11. Charleston County Economic Opportunity CommissIon, 208 Aug. 30-31. County Center, Charleston, S.C. (U) R3-6296-43. PAGENO="0392" 1230 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 REGION IV Economic Opportunity Planning Association of Greater Toledo, July 11-14. 828 Edison Bldg., Toledo, Ohio (U) R4-6219--37. Union School District, 290 West Michigan Ave., Jackson, Mich. July 14-15. (U) R4-6217-24. Muskegon Area Intermediate School District, County Bldg., July 15-18. Muskegon, Mich. (U) R4-6219-24. Wisconsin Conservation Department, Box 450, Madison, Wis. July 18-20. (R) R4-6318-53. REGION V The Cherokee Tribe of Oklahoma, Muskogee, Okia. (R) S5~-6061- Aug. 18. 38. Board of Education, District 19, Box 1709, Ardmore, Okia. (U) Aug. 17. R5-6272-38. Hunt County School Board, Greenville, Tex. (U) R5-2639-46. Aug. 16. Northern Pueblos CAP-NYC, Route 1, Box~ 71, Santa Fe, N. Mex. Aug. 4. (R) R5-6486-33. Albuquerque, N. Mex., Post Office Box 1719, Albuquerque, N. Mex. Aug. 3. (U) R5-6301-33. West Las Vegas Public Schools, District 1, Post Office Drawer J, Aug. 5. Las Vegas, N. Mex. (U) R5-6314-33~ Las Vegas CityScbools, School District No. 2, S.N. Co., 917 Doug- Do. las Ave., Las Vegas, N. Mex., (U) R5-6292-33. Laredo Public Schools, 1701 Victoria, Laredo, Tex. (U) R5- Aug. 11-13. 6243-46. Corpus Christi Independent School District, Corpus Christi, Tex. Aug.. 10-li. (U) R5-6227-46. Goliad Independent School District, Post Office Box 830, Gollad, Aug. 8. Tex. (R) R5~-6232-46. REGION VI School District No. 1, Cheyenne, Wyo. (U) T6-6542-54. Aug. 5. Natrona County High School District, 8th at Elm, Casper, Wyo. Aug. 4. (U) T6-6555-54. Fort Hall Business Council, Fort Hall, Idaho (U) T6-6503-14. Aug. 3. School District No. 58; Post Office Box 610, Aberdeen, Idaho (R) T6-6533-14. Do. City of Butte, Butte, Mont. (U) T6-6452-28. Aug. 1-2. Mount Powell Economic Council and City Hill, Phillipsburg, Mont. July 28. (U) T6-6429-28. Opportunities, Inc., Post Office Box 2532, Great Falls, Mont. (U) July 27. T6-6524--28. North Dakota State Soil Conservation Commission, Bismarck July 25-26. N. Dak. (R) T6-6500-36. REGION VII Sacramento City Unified School District, 1619 N St., Sacramento, Aug. 2. Calif. (U) R7-0245-05. School District No. 1, 631 North East Clackamas St., Portland, Aug. 11. Oreg. (U) R7-6205-39. Union High School, District No. 5, 2202 South EastWillard St., Aug. 9. Milwaukie, Oreg. (U) R7-6208-39. Tigard U.H. District 2 Joint, 13137 South West Pacific Highway, Aug. 8. Tigard, Oreg. (U) R7-6271-39. District No. U.H. 2, Canby Union High School, Box610, 721 South Aug. 12. West Fourth St., Canby, Oreg. (U) R7-6273-39. Seattle Public School, District No. 1, 815 Fourth Ave. North, Aug. 18-19. Seattle, Wash. (U) R7-6210-51. City of Seattle, Municipal Building, Seattle, Wash. (U) R7-6365- Aug. 18. 51. Kent School District No. 415, 508 North Central, Kent, Wash. (U) Aug. 17. R7-6201-51. Tacoma School District No. 10, Post Office Box 1357, Tacoma, Aug. 15-16. Wash. (U) R7-6254-51. PAGENO="0393" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1231 APPENDIX II ENROLLEE CHARACTERISTICS IN THE SAMPLE PROJECTS 1. Annual Family Income Sixty-four percent Of all enrollee's families had incomes of $3,000 or less. This compares with the 68 percent falling below the poverty criteria in regular in- school programs. Similarly, 72 percent came from homes with five or more mem- bers. Regions III and V showed the highest levels of families with annual incomes of less than $3,000 (79 percent and 81 percent, respectively). These regions also showed the highest levels of adult and youth unemployment and the highest con- centration of minority representation in the sample. 2. Race, Ethnic Group and ~eco Negroes represented 36 percent of the enrollment of NYC on-going projects. In the sample, they represented 32 percent. However, Mexican-Americans and American-Indians reflected a higher representation that that found in the na- tional totals. The sample included 17 percent and 7 percent respectively of these minority groups. These differences are accounted for by the fact that Region V had the largest number of enrollees sampled and this region has a heavy con- centration of such minority groups. Based on the sample evidence, racial balance seemS to have been difficult to obtain in a number of projects. For example, of the 12 projects surveyed in Region I, one-third were all-white and over half were almost all-white. Out of 5 projects surveyed in Region III, two had over 95 percent Negro representation. Region V had one all Mexican and one an all-Indian project. Region VI had one all-Indian and one all-white project. In Region VII, a third of the projects sur- veyed were all-white. No doubt community sentiment and sponsor apathy created some barriers to full integration, but by and large, evaluators found lack of racial balance usually was caused by the absence of multi-racial eligibles in many communities. Male-female ratios were 57 percent and 43 percent respectively. This is in line with the national figures of 54 percent and 46 percent. S. Age and ~chooZ Grades The sample contained an equally divided group of 16 and 17 year-olds. Both groups represented 41 percent of the total sample. The median school grade was the 10th. In this respect, the sample differed approximately 12 percent from na- tional norms. 4. Other Handicaps of Poverty There is evidence that enrollees came from environments reflectirfg severe handicaps of poverty. The total of those sampled coming from families on wel- fare was approximately 22 percent; those residing in public housing were almost 8 percent; about 32 percent were from broken homes; three percent had prior police records; two percent were mentally retarded; and two percent were physically disabled. Some individual projects were extremely successful in en- rolling youth with severe social, emotional and* economic problems. A few out- standing examples are: Meriden, Conn.-39 percent on welfare, 3.6 percent residing in public housing, 69 percent from broken homes, 26 percent mentally retarded and 15 percent with prior police records. Mayville, N.Y.-45 percent from welfare families and 11 percent high school dropouts. Reading, Pa.-37 percent on welfare, 17 percent residing in public housing and 58 percent from broken homes. Seattle, Wash.-50 percent with prior police records and 60 percent from broken homes. Charleston, S.C.-23 percent physically disabled and 46 percent from broken homes. Great Falls, Mont.-39 percent former high school dropouts and 48 percent from families on welfare. These individual examples of project successes in capturing hard-core cases are not in themselves conclusive; however, they do point out that many sponsors PAGENO="0394" 1232 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 were devoted to seeking the most disadvantaged youth in their particular localities. Prior Work E~vperience Approximately 32 percent of the enrollees sampled participated in the regular in-school program prior to the summer project. Another 31 percent had held some sort of job prior to their NYC experience. It would seem then that only about a third of the summer enrollment were initiated into the world of work by the summer work exposure. There were more than twice as many enrollees in Regions IV and VI reporting prior work experience than enrollees in the rest of the country. This is probably explained by the fact that farm industries, predominant in those areas, offer youths an opportunity for employment at a relatively early age, more so than occasioned by other industries in urban centers. APPENDDC III DISTRIBUTION OF PRIMARY WORK ASSIGNNENTS OF ENROLLEES IN SUTOIER PROJECTS PAGENO="0395" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1233 APPENDIX IV TABLE 1 .-Statist'ical summary of results of summer program 1 A.. Youth enrolleduntilend of project: Total 1, 513 1, 261 In school prior Returned to school Did not return Permanent jobs Armed services Job Corps MDTA Undecided Unknown School dropouts Returned to school Did not return Permanent jobs - Armed services Job Corps - MDTA - Undecided - Unknown - B. Youth terminated before end of project: Total Returned to school Did not return Permanent jobs Armed services Job Corps MDTA Undecided Unknown School dropouts Returned to school Did not return Permanent jobs Armed services Job Corps MDTA Undecided Unknown 1,505 8 8 3 2 2 In school, prior Dropouts All enrollees ~ Returned to school 4,876 61 15 7 2 46 56 26 23 2 1 0 11 57 4,902 84 17 8 2 57 113 Permanent jobs Armed services Job Corps MDTA Undecided Unknown Total 5,063 120 5,183 1 46 projects reporting. TABLE 2.-Terminations from summer projects 1 White Negro M/A A/I Other Total 659 251 1~7 3;8l1 1,253 656 249 125 3,788 1,453 52 1,211 42 642 14. 241 8 105 20 3,652 136 19 12 7 4 4 46 5 . 5 3 1 1 15 4 1 5 4 14 1 19 20 10 4 3 14 51 23 3 5~ 4 4 2 .1 2 2 13. .10 2 2 1 1 3 .1 3 2 5 577 420 214 117 44 1,372 551 382 192 107 43 1,275 533 18 366 16 182 10 100 7 41 2 1,224 51 5 5 5 15 - 11 2 - 9 2 . . 2 3 -__-__- 2 5 2 2 27 5 26~ 38 22 10 1 97 5. 21 4 34 3 19 1 9 1 13 84 1 46 projects reporting. 4 6 5 4 1 20 2 2 1 1 5 4 9 17 21 9 5 52 PAGENO="0396" 1234 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. How~. On the basis of that evaluation we believe we are going to effect substantial strengthening of our summer program this year in terms of components. We have also done evaluations of ongoing Nelson or "Operation Mainstream" programs, those already in existence and then delegated to the Labor Department. This was done in order to see what we had. We wanted to know what were the components that needed attention as we moved into administration of the program. With regard to the older youth program, Neighborhood Youth Corps, we have run staff evaluations of remedial education compo- nents, for example, in which we analyze a half dozen or dozen remedial education components in various projects. We will find out the admin- istration of them, how effective they are, what kinds of tests are given, that kind of probing. This is done to get information useful to us in improving financial direction, as well as to share information, through publications and manuals, that is useful to other sponsors. (A sample of research follows:) INTERACTION FoaMs AND REWARD SYsTE~rs: TOWARDS A PARTIAL THEORY OF ADOLESCENT WORK EXPERIENCE1 (By Richard E. Sykes and Popie Mohring, University of Minnesota) Governmental work programs for youth have been a part of the American scene since the days of the New Deal. The Economic Opportunity Act of 1964 gave new impetus to these programs when it created the Job Corps and the Neighborhood Youth Corps. The purpose of Job Corps is to prepare young men and women between the ages of sixteen and twenty-one "for the responsibilities of citizenship and to increase (their) employability." This is to be done through vocational and citizenship training at both rural and urban residential centers. The purpose of the Neighborhood Youth Corps is "to provide useful work ex- perience opportunities for unemployed young men and women, through partici- pation in State and community work-training programs, so that their employ- ability may be increased or their education resumed or continued." Enrollees in the NYC work in their own communities within a variety of public or non-profit agencies twelve to fifteen hours a week if in-school, and up to thirty-two hours a week if out-of-school. Where possible, supplemental remedial education and vocational counseling are provided. The circumstances of the thirties are not those of the sixties, however. In the era of the depression masses of the population of all ages were without work. Programs such as Civilian Conservation Corps (CCC) helped provide economic relief for youth through conservation work. CCCers worked in large crews and lived together in camps. Presumably work experience of an unskilled kind was still useful in terms of the job openings present in the national labor market. In the sixties such jobs are already scarce, and becoming scarcer. The needs of those sectors of the population for whom the Economic Opportunity Act was intended are not just for temporary economic help during a national emergency, but for basic socialization into the general and special norms of the world of work. Because of the rapidly rising level of skill requirements in the labor market, these sectors of the population which are "deprived" are faced not only with the problem of socialization into general work norms, but with the acquisition of relatively high level skills. The old gang work crews of the thirties do not provide such socialization, and thus the entire concept of work experience has to be reassessed. This reassessment has been taking place since 1964, for the most part in the absence of either adequate empirical data on improving employability, or a theory of either what "employability" is, or what factors contribute to its increase. Here we hope to contribute to this 1 The research on which this paper is based was made possible through a contract between the Ijniversity of Minnesota and the Neighborhood Youth Corps-ITS. Department of Labor. The title of the study Is "An Observational Study of the Relevance of T\YC Work Exners- ence. Especially of Enrollee-Supervisor Interaction, to Improved Employability or In-School Performance' PAGENO="0397" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1235 reassessment using data gathered in a preliminary evaluation study `of the con- tribution of Neighborhood Youth Corps to increased employability of sixteen to eighteen-year-old youth in Minnesota during programs conducted during 1966 and l967~ The subjects of the study were youth enrolled in both in-school and out-of- school, rural and urban programs in Minnesota. Since the purpose of, the study was exploration which would lead to preliminary hypotheses suitable for later testing, no attempt was made to guarantee represen'tativeness of the sample,, or to measure change in a strictly quantitative and reliable fashion. Littl& theory was available `to begin with, and we were faced with the necessity of' creating our own on a tentative basis. The methods used in the study were participant-as-observer observation, the un'structured interview, and nonpartici- pant observation together with the gathering of information on enrollees from~ official records of public schools and NYC contractors. Our interests included. psychological and behavioral characteristics of enrollees, changes in employabil- ity as a result of work experience, and the influence of supervisor, work group, job, and employing organization on changes in employability. Our original theo- retical framework utilized concepts of sentiments, activities and interactions, a la Homans, et al. The scope of s'tudy included the en'tire state, comprising about thirty Sponsors who could enroll up to approximately 3,000 youth including up to 1,000 high school "dropouts." From this preliminary evaluation a great many "leads" and tentative hypotheses have been developed only a few of which will be discussed here. A very carefully controlled empirical test of certain of these hypotheses will be conducted during the coming year. In the meantime certain of our "guesses" may be of use to others concerned with `the same range of problems. Both in-school and out-of-school NYC enrollees are employed at a wide variety of worksites. In rural areas these worksites are located either within the public schools, or else at conservation sites. In urban areas hospitals, neigh- borhood houses, zoos, nurseries, parks, and government offices are frequent lo- cations. During the autumn of 1966, for instance, the researchers spent much time in a county hospital where about sixty in-school enrollees worked within about fifteen departments, including medical records, radiology, main labora- tory, the storeroom, central supply, the personnel office, buildings and grounds, ambulance garage, and several wards. Jobs varied from janitors aide to labora- tory assistant to file clerk to food service worker. In only a few cases were there more than `two enrollees within any one adult work group. On the other hand within the various' rural conservation programs enrollees work within work crews consisting entirely of youth except for the adult foreman. Whereas the researchers had started their research with the assumption that enrollees would be found almost entirely in such youth work crews, and that interaction could be studied among their members, as in Street Corner Society, it soon be- became apparent that such youth groups were only one of several forms of groups that existed, most of the others constituted of a mixture of youth and adult interaction within a variety of types of organizations and their subsys- tems. The enrollee work role expectations in terms of social role also varied a great deal especially in terms of structure and specificity. Role precedents of youth crews were lacking. On the other hand, in established departments of existing organizations enrollee work roles had to be integrated with an already existing role system. In such circumstances job descriptions were necessary. On the other hand, in neighborhood houses, for instance, while youth work crews did not exist, in many cases neither did other work roles, and thus roll preced- ents were frequently as undefined as in the conservation crews. The researchers initial task was to develop a set of concepts at a somewhat higher level of abstraction which ordered the data derived from the chaos of specific worksites. It was soon apparent that one way to do this was through the' concept of interaction form. The place of the enrollee work role within the work group could be analyzed in terms of one of five `forms. The forms grew from analysis of the empirical reality and were not derived logically.~ It is not our intent to suggest that there are only five forms. Nevertheless the five forms appear to exhaust the universe of. work groups which we have observed. Fur- thermore each form implies certain status-role relationships which may be rele- vant to the greater or lesser value of work experience and increased employ- ability. `Adequately descriptive labelling of such generalizations is always a problem, but we have decided upon teen form, team form, multiple supervisor form, teen-adult form, and adult form. PAGENO="0398" 1236 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 The teen form is that found conventionally in youth work experience pro- grams. Analytically there are only two roles, the enrollee work role, performed by several enrollees, and the supervisory work role, usually performed by. one adult. Teen forms are found in conservation work crews, and frequently in small towns and villages in the summer where enrollees perform clean-up, construction and repair, and park maintenance tasks. In Minnesota supervisors are frequently older adults with a low civil service classification, and paid by the hour. Infre- quently do they have either training or experience working with youth. Tasks supervised are almost always unskilled manual labor such as brushing, cleaning. and digging. Typically teen forms are expedient and ad hoc. Furthermore they are peripheral to the permanent work subsystems of the organization of which they are a part. Consequently there is no previously existing structure which the enrollee enters. The structure is a result of the interaction which takes place when several new enrollees enter the work role under a supervisor who is also new to the task and a temporary employee. Teen forms are therefore inherently un- stable since they are highly dependent on the character and skill of the super- visor, as well as on the habits and attitudes which the enrollees as a group bring with them. While on the one hand a skilled supervisor may structure the roles and role interaction so as to produce a high degree of morale and task perform- ance, on the other hand an unskilled supervisor, or a mix of enrollees with pre- dominantly negative orientations or socialization into deviant subcultures may effect the group in such a way that conflict, inefficient task performance and predominant disorganization result. FIGURE 1. The Team Form.1 The team form is made up of one enrollee work role and one supervisory role. It is frequently found in rural schools where a student NYC enrollee is assigned to the janitor or to the school secretary, a teacher or librarian. Neither the enrollee nor the supervisor is part of a larger work group with similar tasks. at least within the same physical location. The resulting interaction, while frequently more frequent and intimate than is larger groups, is also more highly dependent on idiosyncratic characteristics of the persons involved. Since the 1 S=Supervisor, $=dc facto Supervisor, A=Adult Worker, E=Enrollee. I' `I `I I. / I PAGENO="0399" ECONOMIC OPPORTUNiTY ACT AMENDMENTS OF 1967 1237 supervisor of the enrollee normally, supervises no one else in the normal per- formance of his work role, he often is unused to giving orders, and to planning work for others. On the other hand a supervisor in such a form has the oppor- tunity, if motivated, to supervise the enrollee more closely and provide him with personal attention and advice. This form is also inherently unstable, how- ever, because of the idiosyncratic nature of the interaction, the frequent lack of supervisory experience of the supervisor, and the indefinite prior expectations of the enrollee work role. U FIGURn 2. The Team Form. The multiple supervisor form consists of one enrollee work role (sometimes two) and two or more supervisors of equal adult work role status. Usually one of the adults is the officially designated supervisor, but in practice other adults also supervise the enrollee and are thus de facto supervisors. This form is espe- cially common in offices where enrollees do clerical and filing tasks. Frequently one clerk is official supervisor of the enrollee, but other clerks also assist in the supervision. Theoretically this form locates the enrollee in a position where he might receive conflicting instructions from his supervisors. Actually no such cases have come to our attention. Usually adult work roles in this form are highly structured, since such structuring is necessary for two or more adults of the same status-role to work together in the same situation. This structuring carries over into the enrollee work role. One of the reasons for the multiple supervisory situation, as a matter of fact, is the necessity of integrating the enrollee work role into the previously existing structure. This is done informally through private interaction among the supervisors, and between them and the enrollee. The multiple supervisory relationship also lessens the idiosyncratic factors which are involved in the team form. PAGENO="0400" 1238 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 FIGuRE 3. The Multiple Supervisor Form. The teen-adult form involves two age-graded interaction systems of work roles. In addition to a supervisor, there is a set of two or more adult work roles present of lower status than the supervisor, and two or more enrollee work roles. Adults interact more frequently with other adults in the work group, and enrollees interact more frequently with other enrollees. Usually the adult work group was present before NYC enrollees were placed in it, and thus a relatively stable adult interaction pattern already exists. The enrollee pattern gradually stabilizes over a period of time. Thus the two groups work side by side, per- forming the same tasks, or contributing to the same goal, but with identifiably separate informal interaction systems. While tension may exist between the two groups, this form also has certain advantages. Because of the previously existing adult interaction system, it has a stability and structure which teen groups frequently lack. The presence of adult workers also provides models for work behavior. Since at least in some cases the adults are performing activities similar to the enrollees, they may instruct (not supervise) the enrollees. The enrollee also has the sense of doing an adult job, rather than performing some- thing defined as a special youth role. We would speculate that problems and tensions arise only when youth enter the work group in such large numbers as to threaten the previously existing adult system. FIGuRE 4. The Teen-Adult Form. The adult form involves an adult supervisory role, and one or more non- supervisory adult work roles. It is essentially an adult work group in which one (no more than two) enrollee is placed. Thus no teen i~nteraction patterns emerge within the work group. The group is dominated by adult interaction. The en- rollee's supervisor is also the supervisor of other adults. The enrollee may per- form a role essentially special, or else one similar to that of one of the non- supervisory adults. In either case, because of the division of labor that exists within the group, the enrollee work role necessarily becomes carefully structured. The pressure to conform to adult work norms is also greater. While adult work groups may be somewhat rigid in their response to a new enrollee, such groups probably also provide the enrollee with the greatest opportunity to learn adult PAGENO="0401" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1239 work norms and acquire skills. Both instruction and models of worker behavior are present. Since there are adults present with non-supervisory status, the enrollee sees the authority structure involving others besides himself. He soon understands that relationships of authority exist outside the public school and are common to all structured adult work groups. Membership in the adult work groups may also provide opportunity for identification with adult roles rather than with the special world of the adolescent. FIGURE 5. The Adult Form Obviously the actual interaction patterns of each of these forms is highly dependent upon factors other than the form itself, including idiographic charac- teristics of supervisors, adult workers and enrollees. Nevertheless each form has certain likely structural limits. Teen and team forms would appear to be in- herently the most unstable. Adult and multiple supervisor forms would appear to be the most stable. Teen forms almost always involve unskilled labor. The other forms usually involve semi-skilled enrollee work roles and more opportunity for experience with the adult world of work. These forms have implications for social learning, and thus for increased em- ployability. If we assume that work habits are the result of a conditioning process involving rewards for correct behavior while incorrect behavior is either ignored * or else punished, and if we also assume that the frequency of correct behavior will increase as it is rewarded, then it is possible to look on interaction forms as the moderating social Structures for such reward systems.' Work experience presumable possesses no intrinsic characteristics which by themselves lead to increased employability. Work experience will lead to increased employability only as correct work behaviors are rewarded, and thus the frequency of appropri- ate work habits will increase, and many may be generalized to other situations. The question is whether certain interaction forms possess a structured reward system for appropriate work habits more effective and generalized than other interaction forms. We would hypothesize, other things being equal, that multiple 1 Our point of view here involves an integration of interaction theory with learning theory, and in regard to the latter is similar to that of Albert Bandura and Richard H. Walters, Social Learning and Personality Development (New York, 1963). 80-084-67-Pt. 2-26 PAGENO="0402" 1240 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967, supervisor, teen-adult, and adult interaction forms are more likely to possess structured reward systems, and thus that increased employability as a result of work experience wifi be greater for enrollees within such forms than within teen or team forms. Teen forms where the interaction is almost entirely among adolescents seem to us most unlikely to possess such structured reward patterns, especially when, as is often the case, they are composed of out-of-school young- sters many of whom lack any work norm socialization, and who are in mai~y cases otherwise seriously disturbed. In such cases it seems highly likely that in- appropriate rather than appropriate behavior will be rewarded. In the team form while appropriate behavior may be rewarded, the reward system may be highly idiosyncratic. Furthermore in such forms the highly intricate division of labor and authority present in most work situations today is not likely to, be present, and thus the enrollee has no conditioning into the work system which he is most likely to confront as a working adult. While we believe many other factors are involved, including factors in the enrollee's own background, factors in the enrollee work role, and in the supervisory role, it would appear that work crew ideas dating from the thirties should be discarded in favor of work ex- perience in adult work groups where reward systems leading to adult work behavior are present. Mr. HowAiu. I might point out one more thing, if I may. We are using observational analysts, which I think is an interesting tech- nique. The tecimique is to retain a professional-usually from a 11111- * versity or college-and put him on as a part-time or temporary em- ployee. We will place him in the location of the project, with com- plete access to the records, to data, to enrollees, and so forth. Thus, we will have a direct professional analysis report come in to us as an outside, fresh professional look. One example of this is that a sociologist, or an anthropologist, will take up residence on the Navajo Reservation and analyze our massive program there in terms of its usefulness, its impact, and what it needs to be more effective. We have these analysts going on a number of projects in Atlanta, Los Angeles, and Minnesota. Mr. QUIE. Do you have interim reports on some of these studies which you have indicated will not be completed until next year? If so, are any available to us so that we will be able to make a judgment of the program? Mr. HowARn. We expect an interim report from our new inschool study in October. Any others we have and this one we will be glad to make available to the committee. Mr. Qun~. If you will do that, we will appreciate it. I understand on the Nelson program that you have one completed which was an outside contracted one. Isn't that right? Isn't there an outside contract completed on the Nelson program? Mr. HowAiw. It might have been done by OEO prior to the deliga- tion. To my knowledge we have not received it. We have contracted under our new delegated authority for an outside evaluation of a Nelson program, but we have not received anything. Mr. QUJE. Will you check with OEO and see if there is one avail- able? Lastly, have you done a study of the title V programs which have been operated by the Welfare Department now. Under the amend- ment last year you were given jurisdiction for the section of man- power development and training. I am under the impression that the title V program in St. Paul is an excellent one, with a good training component in it. PAGENO="0403" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1241 Secretary WIRTZ. We are just in the process of completing that transfer. But, I understand from OEO that it has not undertaken a comprehensive evaluation of Nelson projects. (The following material was submitted for the record:) NELSON PROJECTS TExAs (WEBB COUNTY) V-330.A-67 This project operates in Laredo, Texas. The manpower problems in this area are typical of those found in any border town. `Enrollees to date come primarily from the Latin-American segment of the population. Over one-half of the trainees enrolled to date have had less than a fifth grade education. The primary weak- nesses in the program to date have been the lack of adequate work experience sites, duplication of training which could be offered through other manpower programs and the absence of vocational counseling. The following changes were made in the project renewal as a result of full Labor Department participation: 1. Four full-time vocational counselors will be outstationed in the project. 2. The work experience component will be broadened to provide a wide variety of work experiences for the Title V enrollees. 3. There will be a substantial increase in the adult basic education and institutional vocational instruction components. 4. The adult basic education resources of the adult migrant worker pro- gram will be made available to the Title V project. 5. The Labor mobility component has been added to the project. VIRGINIA (CASWELL COUNTY) V~39i This project operates in an area where employment has been reduced by some 50 percent in the last 10 years, largely due to mechanization of coal milling and agriculture. Of the trainees enrolled to date, the great majority have beea male heads of households with little formal education. Almost one-half of them have been forty years of age or over. To date this project has operated primarily as a w-ork relief program with little or no vocational instruction offered. The following changes were made in the project renewal as a result of Employment Service participation: 1. P\vo full-time vocational counselors will be outstationed in the project. 2. Work experience will be used for purposes of occupational exploration as well as skill training. 3. There will be a substantial increase in the adult basic education and institutional vocational instruction components. 4. A labor mobility component has been `added to the project. ARKANSAS (PULASKI COUNTY) 11-150 Originally the project covered only Lonoke and Prairie Counties. Pulaski County was added in fiscal 1966 and the present project covers only `Pulaski County, the other tWo counties being dropped at the State's request. The trainees enrolled to date have been primarily female heads of household with little formal education. Almost one-third of the funds `approved in fiscal ye'ar 1966 were unexpended due primarily `to difficulties in enrolling the projected number of participants. With the pan~ticipation of `the Employment Service in this year's project, it is hoped that `the proportion of male heads of household enrolled in the project w-ill be increased and that project enrollment figures will be reached. The pro- posed level of operations for the year beginning July 1, 1967 `is 140 persons at any one time, for whom 60% will be actual welfare recipients (group I) and 40% other needy persons (group II). The basic weaknesses of this project have been the limited number of occupa- tions offered in work experience, the lack of vocational counseling, and the lack of coordination with other manpower programs operating in the area. The following changes were made in the project renewal as a result of full Labor Department participation: 1. Two full-time vocational counselors will be outstationed in the project. 2. The work experience component will be broadened to provide a wider variety of work experiences for the `Title V enrollees and will include all of the job sites now being utilized in other Labor Department programs. PAGENO="0404" 1242 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 `3. There will be a substantial increase in the adult basic education and institutional vocational instruction components. 4. A labor mobility component has been added to the project. MIsSISSIPPI (NEWTON COUNTY) V-325.A--67 The Newton County Project proposal calls for training of 90 needy persons who require supportive social services, basic education, constructive work experi- ence and vocational instruction in order to secure and hold regular employment in a competitive labor market. The Employment Service is expected to plan and execute the manpower aspects of the training program and a request for relo- cation assistance for those who cannot be expected to secure full-time employ- ment locally is anticipated. Enrollees in this project to date have been among the most severely dilsad- vantaged found in any Title V project. Over 60 percent of the trainees enrolled have less than a fifth grade education. Services offered to the enrollees have consisted of three hours of basic edu- cation per week with almost all of the skill training being in the form of work experience. Coordination with other manpower programs in the area while at- tempted has not succeeded when measured in terms of enrollment of Title V trainees in other programs. The individual employability plans have not reflected an assessment of the individual's occupational capabilities. While there was a cooperative agree- ment with the local employment service to provide some vocational counseling and testing services, the degree to which these services are required could not be met, it was found without out-stationing ES personnel at the project site. This could not be done without additional financing. The following changes were made in the project renewal as a result of employ- ment service participation. 1. One full- time vocational counselor will be out-stationed in the project. 2. Work experience will be used for purposes of occupational exploration as well as skill training. 3. There will be a substantial increase in the adult basic education and institutional vocational instruction components. 4. Provision will be made to provide labor mobility services to this project. MASSACHUSETTS (CITY OF BOSTON) V-432.A This proposal was designed to involve in work experience, training and educa- tion over a one-year period 2,200 adults between 22 and 64 years of age. These persons, more than 80% of whom are family heads, will be helped through voca- tional training, education and work experience to upgrade skills for employment, to conserve their work habits and skills and to attain or retain capability for self-support and personal independence. The Department of Labor agreed that this project should be renewed by the Department of HEWT beginning July 1, 1967 without specific Department of Labor inputs of manpower activities. This action was taken because of insufficient time to carry out a joint evaluation that could be the basis for determining DOL inputs. However, such a joint evaluation by Department of Labor and Welfare Administration staff will be conducted in the near future to determine the pos- Sibility for improving the manpower components of the project. CALIFORNIA (SAN JOAQUIN COUNTY) V-148 This proposal was developed to train a total of 280 AFDC mothers and AFDc-TJ fathers. At least 50% of the participants are expected to be unemployed fathers. Training methodS will include one or a combination of the following: work experience in public agencies, adult basic education courses, vocational instruc- *tion in public and private schools, and specialized individual and group counseling. The Department of Labor concurred that this project should be renewed by the Department of Health, Education, and Welfare beginning July 1, 1967 with- out any specific involvement of Department of Labor activities. A review of the project proposal and supplemental information relating thereto indicated `that this project was operating satisfactorily. PAGENO="0405" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1243 Dr. ALLER. After Thanksgiving, we began a series of joint Labor- HEW visits to determine how the Department of Labor resources could merge most effectively with welfare capability. On projects to be funded out of the fiscal year 1967 appropriations, under the provisions of the 1966 amendments, we have been working closely with the welfare administration, both in Washington and in the field, to determine which projects would have Manpower Admin- istration involvement. We will furnish you information on how we arrived at these deci- sions and some specific examples of Department of Labor inputs into ~)rojects. Mr. QuIE. I visited that one, and I have seen the operation. I am also interested in receiving from you the results of the evaluation you began at Thanksgiving, so that we can make our judgment. Mr. MEEDS. If you will yield, I would like to point out that a title V program, which I also visited, in Bellingham, Wash., has been con- ducted by the county people and has been a tremendous success. I would ask unanimous consent to put in the record, right after what you have asked for, the results of their findings on this program. Mr. DENT. I understand, then, you will make available all of the reports of your analyses that you have made of various projects for the benefit of the committee? Secretary WIRTZ. Of course, we will. I assume the best procedure will be to work with the representatives of the committee and find out just exactly what it is you want in this area. It will, of course, all be made available. Mr. QUJE. That is satisf actory with me. Secretary WIRTZ. I don't know what shape that title V report is in. Mr. DENT. At this time the Chair would like to announce that we have permission to sit this afternoon. I would like to recess until 1 :30, if it is convenient for the Secretary. Secretary WIRTz. Sure. Mr. DENT. We stand in recess until 1 :30. (Whereupon, at 12:15 p.m. the subcommittee recessed, to reconvene at 1 :30 p.m. that same day.) AFTERNOON SESSION Chairman PERKINS. The committee will come to order. A quorum is present. Mr. Qoodell? Mr. Q0ODELL. First of all, Mr. Wirtz, what study is it that you are referring to on page 11 of your statement? You say, "A recent study of our school enrollees," and so forth. Secretary WIRTZ. Mr. Howard will be back in a minute. He spoke to this matter this morning. It is a recently conducted, independent, privately contracted study, and the complete study will be made available to the committee. Chairman PERKINS. What towns does it cover? What areas of the country? I Secretary WIRTZ. I will ask Mr. Howard as to that. Mr. HOWARD. Mr. Chairman, I will have to get for the record the complete list. PAGENO="0406" 1244 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 It was a scientifically designed cross section of our urban-rural, about 26 to 35 projects, and 30 different projects with selected sample, interviews, followup, and urban-rural mix, and a mix of I believe a half dozen or so different States. But I will get it for the record, and we will submit, if the committee desires, the study itself, which will show precisely the locations and the interviews and everything else. Chairman PERKINS. I want to take this opportunity to compliment you and the Secretary. I am mighty proud personally of the NYC, its present operation, and the very effective way it has assisted youngsters throughout the country. I know it has been really effective in. the area that I represent, and I just wish that we had had more money for that particular program, because in my area alone 1 know that we could well utilize and ef- ficiently utilize three times the present funding. So I do know that you are doing tremendous good throughout the Appalachian area, and 1 think throughout the Nation, and I do Imow, without any other studies being made, in my particular area, hundreds of youngsters are being held in school that otherwise would have dropped out. It is a terrific program. I want to congratulate you gentlemen for the way jn which this has been conducted. Mr. GOODELIJ. Mr. Secretary, you refer to the combined total of work training or work experience programs that you are administering at this point, as referred to on page 5 of your statement. When did you delegate authority for each of these programs from the OEO? Secretary WIRTz. The Neighborhood Youth Corps in late 1964, and it was in effect January 1, 1965. With respect to the other three programs, the consideration of the delegation, in a very meaningful sense, started about November of 1966. There were a series of discussions about that. The delegation in- cluded the issuance of the regulations. It was completed in mid-March of this year. Mr. G00DEIL. Each of these programs had funds earmarked for them. Could you tell me how much was earmarked for each of the programs, and how much of that which was earmarked you actually received in the Department of Labor? Secretary WIRTZ. The Nelson program was $36,500,000. The Scheuer program was $36,500,000. The special impact program was $25 mil- lion, I think. The total, $98 million. At the time of the transfer, commitments had been made against the total of $98 million. Commitments had been made in the amount of $33 million. - Mr. GOODELL. In other words, it was $98 million that was authorized. Do you know how much of that was appropriated? Secretary WIRTZ. All of it. Mr. GOODELL. All of it. Of that $98 million, you have only had-. what did you say-$36 million? Secretary WIRTZ. It comes to $65 million; $98 million authorized, $98 million appropriated. During the period that OEO was adminis- tering it, there were undertakings which amounted to $33 million, so PAGENO="0407" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1245 that the total of our authorization fOr this period and appropriation has been $65 million since the transfer. Mr. GOODELL. It appears you were given responsibility for these programs without being given all the money thatwe had in mind for it. Secretary WIRTZ. One correction. The $25 million appropriation on the special impact program was against an authorization of $75 mil- lion, so I should correct my previous statement there. On your point about being given the responsibility without the whole of the funds, I don't conceive of it that way, but rather as the steps which had already been taken by OEO at the time that transfer was completed. Mr. GOODELL. Let me, if I may, for a moment, discuss your concen- trated employment program. . I have before me a table which outlines the various programs, the titles and sections of various programs, that apparently have been com- bined, in funding the concentrated employment program, and I would like to determine if it is an accurate summation of what you have done. IRunning down the list for fiscal 1967, the amount o~ moneys from each of these programs that have now beeu combined: title V, $20 million. Secretary WIRTZ. I don't believe that is right. That is not included in this program at all. I can give you that breakdown, if you want it. Mr. GOODELL. All right. Secretary WIRTZ. That program has been made up in present form in such a manner that it totals, or will by the end of June-not all of the allocations have been made, but we are working with $103 million there, of which we are using $48 million of MDTA money, $23 million of Nelson-Scheuer moneys, $14 million for the Neighborhood Youth Coups, and $18 million Special Impact. Mr. GOODELL. Mr. Shriver apparently gave this information out some time ago to a third party, and I merely wish to confirm it. Per- haps it is just a definition of terms, but what he gave out shows a total of $603 million being drawn from various categories and listed pro- grams. It included a rundown of title V, Neighborhood Youth Corps, which he marked $143 million plus for this program, Project Head- start, basic education, title I of the Education Act, title III, Work- Study, MDTA; $50 million, MDGA program, $35 million, and so on. Does that sound at all familiar to you? Secretary WIRTZ. We have been trying to check, and I am not sure, but I believe a figure of about that amount has been identified in con- nection with the special summer programs for this year, which is a quite different thing. I will check that for the record, but that is the only figure I can identify it with at the moment, and prefer Mr. Shriver provide the reply. Mr GOODELL I think that might be right, because the memo that I have, also refers to summer programs and erroneously, I believe, refers as well to CEP. From the reports which have reached us, then, in reference to the summer programs, we understand that the Labor Department is taking a major responsibility m studying these programs. PAGENO="0408" 1246 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Secretary WIRTZ. The answer is "yes." In terms~ of its being a large responsibility, I want to be sure again ubout our keeping a distinction in mind between two things. There are two parts to the summer program. A very major part of the summer program is the encouragement of private employers to employ people whom they might not otherwise employ. This is an informal function, which is being exercised by the Department of Labor, but probably more significantly by the Department of Com- merce, for example, which is working with the employers on that. It is simply an encouragement of private employment. In addition to that, there is another significant factor in the summer employment program, which includes a variety of things, all of them Government employment of one kind or another. It includes a Neighborhood Youth Corps component with-about `275,000 boys and girls who will be employed this summer or in work training programs. Mr. GOODELL. That is in addition to your regular Neighborhood Youth Corps employment? This is an increment for summer? Secretary WIRTZ. No, the Neighborhood Youth Corps program is broken down into three parts, the in-school program, the out-of-school program, which is a continuing year-round type of thing, and then a series of just summer employment programs. Mr. G00DELI2. I understand that. Secretary WIRTZ. Now, the 275,000 covers them all. Mr. Howard advises me it is 275,000 for the summer, in addition to the regular out-of-school program, which keeps on. So it is definitely just a summer program. Now, in addition to that, there is also employment of boys and girls during the summer by the Government, as employer, just as other pri- vate employers are involved. So that in answer to your question, as to the Department of Labor's participation in it, if you take just the employment part of it-and it includes a good deal more-then we work with the Department of Labor, and through the Vice President's office, with the mayors and the Governors of the States, to try to stimulate private employment. Mr. G00DELL. I recognize, Mr. Secretary, that in the early stages of the program we had to throw together some crash programs and try to meet a crisis. It has troubled a great many of us, however, that people who are obviously completely sympathetic to the war on poverty have been so critical of the manner in which the summer pro- grams are being thrown together for the summer of 1967. I would like your comments, after I give you two or three quotes, and identify the individual involved, because after almost 3 years since we started the war on poverty, it does not seem to me that this kind of situation should continue. James Banks, former TJPO Director here in Wa.shington, says that the Government's whole method of approaching summer "is a crazy, illogical, emotional response to a problem that deserves more serious consideration. There is something rather immoral about it." Secretary WIRTZ. Immoral? Mr. G00DELL. Immoral. PAGENO="0409" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1247 The Government's response is, "Let's keep down riots and violence," rather than,"Let's eliminate the causes of riots and violence." It is a hell of a way to run a public program. It is unhealthly. What it does is inform people that the way to get some money is to have a riot or threaten one. I notice in a story out of Los Angeles, Urban Matsye, of the County Federation of Labor, on the intercounty agency program there, crit- icized the summer crash program on the whole on the basis that many ~people will be trained for work in connection with the already high unemployment level. Then there is a quote attributed to him: I think the whole thing is going to be a failure. All we are doing is spending ~8 million to put poor people in competition with other people already out of jobs. Dr. Frank Reisman of NYC, professor of educational psychology and coauthor of "New Careers for the Poor," warns of a poverty war switch in emphasis. He says: It creates an enormous danger that we will have just another make-work,. antiriot, keep-summer-cool program. Given these, and I have other quotes here from people who not only are outstanding authorities and not only are very sympathetic to the, whole poverty program, but who are in the frontlines of the war on poverty--I am concerned. I understand from your initial statements your basic philosophy. You do not approve of programs that are simply antiriot programs. You made that very clear in your initial statement. And I think we are in complete agreement that what must be done is attack the causes, and not just try to respond to the symptoms and maybe `cool it off through the summer.' As a' matter of fact, you can be quoted, and I like `this quote very' much I quote you The summer patriots in'the war against poverty turn away from the inevitable winter campaign in any war that is worth fighting I hope that is an accurate quote It i~ attributed to you in this paper. My concern is that we hear these comments from very well in- formed, sympathetic people at this point, who say it is ,a crash pro- gram thrown together without very much planning, and is going `to fail, and attributing to it the character of being more antiriot and panicky than well constructed and aimed at the causes. Chairman PERKINS. Will the gentleman yield? I think the gentleman's question is too general. Why don't you narrow it to something specific? ` Mr. GOODELL. Mr. Chairman, these are some very specific comments that I have quoted. I will quote them again, if you like. I would like to have his defense on this. Chairman PERKINS. The program is what I think these should be directed to. Mr. GOODELL. I am sorry, Mr. Chairman, but if you don't think it is a proper question to ask Mr. Wirtz to respond to a charge that we have a crazy, illogical, emotional setup on summer programs, and that it is a hell of a way to run a public program, then there is something wrong. PAGENO="0410" 1248 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Chairman PERKINS. I just think the question ought to be directed to the programs that are being administered by the witness. Mr. GOODELIJ. I prefaced the question by asking him if he does not run some of the summer programs, and he said yes. Secretary WIRTZ. No, let me explain. Mr. 000DELL. Then if that is part of your answer, I would be glad to hear it. Secretary WIRTZ. There are several elements. First I want to straighten the record out, as I am sure it should be, that your inquiry started from the concentrated program, but we have recognized that we are not talking about that at all. Is that right? Mr. GOODELL. You are absolutely right. I am talking about the summer program, although it is my understanding there has been some serious criticism of the way the concentrated employment pro- gram is being rushed to try to get it underway prior to the summer. It is not a summer program, and I understand that. Secretary WIRTZ. I would be delighted to talk about that separately. It has no relationship to the summer. There are several elements with respect to the rest of your statement. Out of context, those statements are hogwash. I think the record should, Mr. Chairman, be completed. We will find the context as to what those statements are, because I know Jim Banks and his associates. I know the dedication of their purpose in this. So that is out of context. Beyond that, Mr. Goodell, I agree with you completely, and what- ever implication there is in those statements about doing anything in order to stop a summer riot-and I agree with you completely in your suggestion, which I would paraphrase in my own words, that the worst mistake is to think that the slum is a cause, or the ghetto is a cause, or the riots are a cause. We have to go clear behind them. I have no sympathy at all for any program that really demeans the person who lives in a ghetto or slum by suggesting that what has been burning up inside of him through 10 generations can be put out with a single dose of summer medicine. I would resent that, if I lived in a slum. I would just resent it all the way through. There is no justification for any statements with these implications. Now, you come to the matter of crash- `Chairman PERKINS. I regret to interrupt you, but we are going to recess for about 12 minutes in answer to a quorum call. (Short recess.) Chairman PERKINS. The committee will come to order. Mr. Scherle? Mr. Scmuii~. Thank you, Mr. Chairman. Mr. Wirtz, in May 1966, you stated there were 1.2 million youths from 16 to 21 who needed part-time work "to stay in school or to return to school." Now, could you tell me how this judgment is made, or was made? Secretary Win~z. No. I will have to check it, Mr. Scherle. I don't remember the particular statement, and I don't remember the work- sheet background on the statement. PAGENO="0411" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1249 The statement is about right, from my judgment, but I would be glad to supplement the record with a backup on that particular state- ment. What we are talking about is roughly this: We have made deter- minations of the number of people who drop out of school at various points along the line, and then have made studies of the extent to which that is an economic difficulty, and from what you say of that figure, I expect it comes from those calculations. There would be about that many million, about that many boys and girls, who are in school, in high school, and hanging on by the skin of their teeth, economically. Mr. SCHERLE. But you will furnish the record with this information? Secretary WIRTZ. Yes. That was May of 1966. (Information to be furnished follows:) UNIvERsE von IN-ScHooL NYC PROGRAMS Last year in May 1966, the potential universe for the NYC in-school program included high school students aged 16-21, from low income families. At that time there were an estimated 3 million poor youth, of whom 1.2 were in school. These figures were developed by the Office of Economic Opportunity in conjunc- tion with HEW. The amendment to the EOA last year extending the eligibility for the in-school program to those in grades 9 through 12 had the effect of adding poor youth aged 14 and 15 to the total universe. For FY 1968, it is estimated that there will be about 2.6 million poor youth,' 14-21 years of age enrolled In school. Some 1.2 million are 14-15 years old and 1.4 million, 16 to 21 years old. Not all of the 16 to 21 year old poor youths will be in high~ school-some will be in college. No estimates are available for the proportion of poor 16-21 year olds who are in college. Of all youths in this age group in October 1965, 36.7 percent were in college.2 This would be the outside limit since college opportunities are more limited for poor youth. We then esti- mate that 500,000 will be in college. This results in a potential universe for NYC in-school programs of 2.1 million youth. Mr. ScHERu~. My other question is: Is the OEO diverting funds from the regular in and out of school Neighborhood Youth Corps programs in order to pump more money into keeping these~kids ofF the street this summer? Secretary WIRTZ. No. That is not being done. Not at all. Mr. SCHERLE. Is this an appropriation for a particular allotment to allow for these programs? Secretary WIriTz. I am grateful for this opportunity to complete my response both to this question and to Mr. Goodell's, because there is one other very important element in this situation. That was an additional $75 million which was made available by appropriation only very recently. The background of that is this: The authorization for OEO pro- grams was only partly appropriated. Several weeks ago, on May 2, 1967, the President sent up a supple- mental appropriation request for another $75 million of that an thorized but unappropriated amount, and the Congress acted on that at this point. 1 Report of the Inter-Agency Task Force on determination of the Universe of need for Manpower Development program. Nov. 29, 1966-O.M.P.E.R. `Bureau of the Census, Current Population Reports, Series P-20, No. 162, Mar. 24, 1967. PAGENO="0412" 1250 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 And so that additional funds,~ Neighborhood Youth Corps funds, which have been available for summer programs at this late date, are in the amount of $47 million, and they come out of that additional $75 million of appropriation. Mr. SCHERLE. But none of this money is diverted from the regular OEO in and out of school Neighborhood Youth Corps programs? Secretary V\TIRTZ. It is not. That is correct; Mr. SCHERLE. How many Youth Corps graduates have you had? Secretary WIRTz. The total participating is 900,000, and I will insert in the record a statement on the graduates. (The statement referred to follows:) The graduate concept is not applicable to the Neighborhood Youth Corps because there is no fixed period of time for an individual to remain in the pro- gram. There are fixed upper limits for enrollment. A person may remain in an in-school project until graduation from high school. A person may remain in an out-of-school project for two years. But within these fixed limits, individuals move on for a variety of reasons that do not correspond to the usual interpreta- tion of the word "graduate." Up to June 1967, approximately 450,000 enrollees have moved out of the in- school program. Some of these left because their economic status changed and they were no longer eligible for enrollment. Some left for health reasons or be- cause they could not successfully combine work activities with school respon- sibilities. Many left because they graduated from high school. Of the out-of-school enrollees 250,000 have moved on for a variety of reasons. The latest study of NYC enrollees interviewed 3 to 12 months after completing NYO enrollment shows that 35% were in full-time jobs; 9% had returned to school; 4% in vocational training; 5% in school part time and working part time and 6% in military service. Within the two-year limit on enrollment in out- of-school projects, there is no fixed term of enrollment or concept of graduation. The plan is to provide enrollees with work experience, counseling and training that will enable them to move on as they are ready. Mr. SCHERLE. My other question along that same line is: What is the total percent of these young people who now hold down nongov- ernment jobs and/or seath in the classroom? Secretary WIRTz. Thirty-five percent of the graduates have gotten full-time jobs. Nine percent of them have gone back to school. I guess the answer to your question is the 35 percent full time. Now, there are other routes where some of them have gone, into other training programs, into the military, and so forth. The next answer is that 59 percent of them are what Mr. Howard calls positively accounted for. We recognize that it means another 41 percent who have not met with success yet, and I point out, as he did, that we start~ in this case with a very particular group, and we are not proud of the 59 percent recovery rate, but we take some satisfaction in it. Mr. SOHERLE. What efforts are being made to develop a set of statis- tics on the participants of this program, so that we can better evaluate its success? Secretary WIRTZ. Mr. Howard has developed quite an extent-I answer only because he could only answer with a certain amount of modesty. There has been with respect to the Neighborhood Youth Corps pro- gram a quite intensive evaluation program put into effect, and the record also contains a reference to that in answer to some similar ques- tions early in the history. PAGENO="0413" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1251 We are supplying the committee with a quite comprehensive set of evaluations of the Neighborhood Youth Corps that do include both in-house and independent evaluations. Mr. SCHEELE. That will cover this question, too? Secretary WIIITZ. Yes, sir; and will go into such detail, and I mean specific detail, about who they are, and where they are coming from, what is happening to them, where they are going, how many have sup- portive services now-a much higher number than before-how many of the military rejectees we are picking up-a larger number than before. It is a detailing. Mr. SCHERLE. Do you feel the OEO is better qualified to handle this portion of the War on Poverty-talking of the in-school portion, now-than the Office of Education? Secretary WIRTZ. I speak in complete support of the present pro- gram, which does make it part of the OEO, which does provide for its delegation to the Department of Labor. And that is the basis on which it is presently done. Your question is in terms of a comparison with HEW's operation of it. I would speak, rather, not to the Department of Labor as against the Department of HEW, but to the desirability of keeping all of these programs for the time being tied together by somebody whose respon- sibility is poverty and the elimination of poverty as such. I have said in my statement, and would want to reaffirm it, that you have got to answer the question of why the established agencies, in- eluding the Department of Labor, did not do these things before. We should never have let it be necessary that this be done. There are institutional forces at work which explain that. I don't think that the 3-year program so far has in any way dissi- pated those forces, so I am strongly in favor of keeping a central re- sponsibility in the Office of Economic Opportunity, delegating the operating program to whatever extent appears appropriate, but not breakincr it up. Mr. ~`CHERLE. Doesn't it seem reasonable, :though, that programs dealing in the field of education should be the responsibility of those that are trained in this field? Secretary WIRTZ. I couldn't argue with that general proposition, and I would think of it a little in the terms of the parable of the elephant. We are talking about the same individual, but just as the three seers touched different parts of the elephant and repOrted it differently, I suppose when I look at an individual, I say, "He is unemployed," and when Secretary Gardner looks at the individual, he says, "He is unedu- cated." When Mr. Shriver looks at the individual, the same individual, he says, "He is poOr." And then someone else, in the Equal Oppor- tunities Commission or somewhere, will look at the individual and say, "He is a Negro." My answer to your question is that in the long rim there can only be one answer to that, and that is the education ought to be done through the established agencies. It isn't just the HEW. It is the State boards of education. I think we have a time question, Mr. Scherle, and my point would be that as of now it is still very important to keep that pressure on the elimination of the situation of poverty. PAGENO="0414" 1252 ECONOMIC OPPORTuNITY ACT AMENDMENTS OF 1967 Mr. SCHERLE. Well, now, you have brought up a question that was real interesting, where you said that you and perhaps Mr. Shriver and somebody else would look upon an individual as being deprived in different areas, even culturally deprived, such as race. Who is to sit in final judgment as to what action should be taken to proceed in the right area, if all three of you decide he is deprived for different reasons? Secretary WIRTZ. It is a key provision in H.R. 8311, contained in title VI, part B, that there be a much stronger function exercised by the Economic Opportunity Council. It is a council made up of the Director of OEO, as chairman, with other agency heads as members, a.nd I think that the genesis, the his- tory of title VI, part B, recognizes that there must be a rerouting of things, a growth factor, and my answer would be that that is the place that that should be done. Mr. SCHERLE. Is each one of these applicants screened individually, then, to take the proper perspective and hope the end result will be correct with respect to the channel into which you direct this person? Secretary WIRTZ. We have been doing it on a screening basis so that in the Neighborhood Youth Corps one of our problems, and one of Mr. Howard's problems, has been that we have taken even a tighter, hard-core standard than even some of the State and local Youth Corps sponsors recommend. But we are moving on beyond that now, because a large group of those who are left are those who do not fall through any screen that you can design. At this point, with respect to the remaining hard core, it is not a matter of screening them to see whether one thing works, or another. It is a matter of taking them as individuals and staying with them until they get routed into the most suitable program, or into a. job. So I would say yes, that screening has been a careful principle of the program so far, that as of now we have moved on to the person-to- person. Mr. SCHERLE. Can you distinguish for me the Job Corps and the Neighborhood Youth Corps? Secretary WIRTZ. Yes, sir. The basic distinction is that the Job Corps is a program which is conducted at a separate camp. Or it may be urban. It is more typically in the country, or in the parks, or in the forests. One of the key differ- ences is that the individual involved, the trainee, lives at that camp. Under the Neighborhood Youth Corps program, the enrollee lives at home. Now there are other differences. The Job Corps includes a much more fully developed program of various supportive service. The Neighborhood Youth Corps program has to be divided into two parts. The in-school Neighborhood Youth Corps program involves an individual in school, living at home, working part time, primarily or at least in part staying in school. The out-of-school Neighborhood Youth Corps program, which is for the dropout, usually, is more like the Job Corps program, and the principal difference there is that the Job Corps trainees live at the camp; the Neighborhood Youth Corps out-of-school trainees live at. home. PAGENO="0415" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1253 Mr. SCHERLE. Have you made any comparisons between the success of those that live at the Job Corps centers and those that live at home? Secretary WIRTZ. We can now put side by side the evaluations which have been made of the Job Corps experience alumni and the. Neighborhood Youth Corps out-of-school alumni. My impression is that those figures probably statistically come out in the same pattern now. So that if statistics were any guide, my impression is that the Job. Corps results parallel those to which I referred earlier. But I should go on to say that I don't have confidence in the statis- tics available yet on a comparative basis between these two, for this reason, Mr. Scherle: There is no question about the fact that the Job Corps took right from the beginning the very hardest cases that there were to take, and the figures on their accomplishments are therefore going to be in some ways more discouraging than ours. Of course, if you take the in-school Neighborhood Youth Corps,. the number of in-the-neighborhood youths who have stayed in school is very high. But that is not a fair comparison. On the out of school and the Job Corps, I think the recovery rate is probably somewhat higher for the Neighborhood Youth Corps,. but I don't think those figures permit a comparison. Mr. SOHERLE. Would you feel tha.t the dropout rate would be about the same in both the Job Corps and the Neighborhood Youth Corps? Secretary WIRTZ. I don't know, on that. I just don't know. Mr. SCHERLE. Let me ask you this then: Do you feel maybe in another year you will be in a better position to make this comparable appraisal of dropouts? Secretary WIRTZ. I am quite clear at this. point, Mr. Scherle, that both programs are essential, and that there are young people in the country with respect to whom we can do more good with their living at home, and there are those others with respect to whom we can do more good if they are taken out of that environment and put at camp... Mr. SCHERLE. Can you tell me why 45 percent of those in the Job~ Corps are military rejects? Secretary WIRTZ. Well, it is really the part I referred to before.. The military rejection results showed up, I believe, more graphically than any other figures the failure in this country with respect to that group. That is the hardest-what we have called the hard-core group. And. the Job Corps did right from the .beginning take that hard-.. core group. Mr. SCHERLE. If my memory serves me correctly, even~ after JobS Corps training this has only been heightened by about 10 percent. Secretary WIRTZ. Their. employability? Mr. SCHERLE. No; their acceptance in the military service. Secretary WIRTZ. Oh, their return and acceptance? I don't know. I don't have that figure. We have conducted several programs designed either directly or indirectly for exactly that group. I should interrupt to say that we measure one of the gains, one of the improvements in our program, in terms of the number of those boys we pick up, because I think we all have the. feeling that that is a. very PAGENO="0416" 1254 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 bad situation, and that we should try to salvage as much as that group as possible. The latest study on enrollee characteristics shows that more than half of the enrollees m out-of-school projects were military rejects. Of the out-of-school youths enrolled in the Neighborhood Youth Corps during the period of September 1966 through February 1967, 53.3 percent were classified either 4-F or 1-Y. This represents an increase over the period from September 1965 through August 1966 when 45.3 percent of the out-of-school enrollees had draft classifications of 4-F or 1-Y at the time they were enrolled. This increase represents NYC's increased capability in reaching the youths most in need of the kind of services offered by the Neighborhood Youth Corps. The Department's pilot program for military rejectees was reported on page 66 of the Manpower Report of the President transmitted to Congress April 1967. Here we reported that a followup study shows that 20 percent of them subsequently qualified for military service. Mr. SCHERLE. My other question, Secretary Wirtz- Secretary WIRTZ. I should add to that one other thing. Some of those rejection situations are for medical reasons, and that is a separate problem. Mr. SCHERLE. When they made application-when they do make ap- plication and are accepted, do they automatically have military deferments? Secretary WIRTZ. No; they do not. Not at all. Mr. SCHERLE. Mr. Secretary, I have one question left here, and, of course, not knowing in depth-and I don't know whether I will ever have the time to find out all that is involved in the OEO-so much of our information has to be gleaned from newspapers, and, of course, when we run across these different things, we clip them out and bring them to someone's attention to try to find out the basic foundation in the various instances. Now, my question is: I have seen in the paper where there is an OEO program in New York which consists of the formation of a grocery co-op under the direction of OEO personnel. Now, if this be true, can you justify using taxpayers' dollars to put the Government in direct competition with the neighborhood grocery stores or supermarkets? Secretary WIRTZ. I am not familiar with the program. I will be glad to inquire of the OEO people. It is not a program with which we have any connection. Mr. Berry of OEO testified on this subject before the committee on June 20, 1967. Mr. SCHERLE. The reason I have asked you this question is because I think the other day when I tried to approach it, it was hard for me, and the members of this committee, to sift the various questions and fit them into their proper category, because we don't really know how many programs you have. About the only way we could do this would be to take our questions, give them to Mr. Shriver, have him assign these questions to different committees, and then give them back to us and say, "This one belongs here," and "This one belongs there." It is unfortunate, because I am sure there are many questions we would like to ask the heads of your various departments, where we are not sure exactly where your Department responsibility stops, and PAGENO="0417" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1255 you have got us just a little confused, maybe more. so than some of the Department heads. I don't know. Secretary WIRTZ. I appreciate that point. It is at this point com- paratively easy to identify the Department of Labor responsibility. It includes now, except for the Job Corps; all those programs which involve employment, work training, work experience, any kind of em- ployment or training in connection with employment. Mr. SCHERLE. .1 thank you, Mr. Secretary. And, Mr. Chairman, thank you, too. Mr. 000DELL. Mr. Secretary, the quotations that I gave you I will not pursue further, except to say what is quoted in the Chicago Sun- Times was part of a series of articles that were very understanding and I think quite constructive in their approach to these problems of pov- erty, some of the programs that are doing well, and some that are not,. and I would not have expected them to quote from out of context. With that, I will give you the references to the quotations and.have you check it out for these people. Secretary WIRTZ. I have checked it out. I have in the interim checked~ it out. I would be glad to add to the record. I would be very grateful if Mr. Sviridoff, Mr. Banks, Mr. Riessman-if arrangements could be made to have their full position added to this record, either by their own tes- timony or anybody else's; because I know what it is. I don't think there is any point in exchanging quotations. That just does not give a fair picture, Mr. Goodell, of their views. (The letter referring to quotations appear in hearings of June 12, 1967.) Mr. GOODELL. We obviously would be delighted to have their posi- tions on the matter. It would appear that unless they are inaccurate quotations, there at least is some unhappiness and disgruntledness at what has been set. up. You were quoted, Mr. Secretary, last night, on making the state- ment, "We are spending money in the war on poverty as rapidly as it can be responsibly spent." Is that statement in context with our present considerations? Secretary WIRTZ. It is. May I modify it only to the extent-you will think this is co- incidence, and I suppose it has elements of coincidence in it, but it has more than that. The new budget is up from $1,600 million, to $2,06 billion, and I think probably that change is just about in line with the increased competence that comes with that much more experience, because my statement in December was that it just takes increasing know-how to do this job right. . . . So I would stand with that statement, subject only to change in the budget. Mr. 000DELL.. In other words, you are basically in accord with the budget figures on this point; $2.06 is about the right figure now- Secretary WIRTZ. Surely, with no pretense of being able to reduce it to a particular dollar, but on the general reaction of knowing how much we have in these particular programs, knowing how hard we are pressed to do the right thing with that much money. ~O-OS4-G7----pt. 2-27 PAGENO="0418" 1256 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 I have the feeling we are about at the right pace. Mr. GOODELL. I am not trying to pin you to specific amounts, but I take it that it is a fair statement that you are not among those. who think that we should double the amount of money, from $2 to $4 billion, or something like that, in the war on poverty. Secretary Wnri~. No, sir; I am not. Mr. GOODELL. You also were quoted: If I were to make a choice, I would rather have 50 to 100 more administrators, competent administrators, in the War on Poverty than another $100 million for it. Is that an accurate quote? Secretary WIRTZ. It is still accurate. Mr. GOODELL. I take it this refers to the latter part of your comment, on the difficulties of administration and the need to work out better ways of doing what we all want to accomplish. Secretary WIRTZ. Difficulties, yes, in the sense that we are trying, Mr. Goodell, a great many things. Some of them work, and some of them don't, and there is a certain amount of that that is inevitable. There just is a point of usefulness, a ratio of usefulness, and I think we have just about reached it. There is no question in anybody's mind but that we could usefully spend more money on the Neighborhood Youth Corps, because that one has worked out well, and yet you raised this morning some aspects of that program with respect to which we still think there is more reason to investigate. . . * The whole area of supportive services needs more experimentation. I don't mean to embroider the answer. That is my judgment of the comparative values at this point in connection with the antipoverty program and the whole manpower program. Mr. GOODELL. I would be interested in how many programs you have underway now, and what your plans are to evaluate the results of the Neighborhood Youth Corps in a qualitative sense, and perhaps a longer term sense. Secretary WIRTZ. Do you want Mr. Howard's answer on that? Mr. HOWARD. I outlined earlier a list of the various evaluation studies and contracts that we have undertaken. I will submit our proposed fiscal year 1968 evaluation research contracts. (The information referred to follows:) PROPOSED FISCAL YEAR 1968 EVALUATION RESEARCH CONTRACTS-SUBJECT T& APPROVAL 1. Proposed Study: Follow-up Survey of NYC Out-of-School Terminees. Objectives of Study: To determine the effect of program completion on suc- cessful adjustment to post-enrollment experiences; to determine the relationship between NYC service and post-enrollment experiences; and to develop guidelines and recommendations regarding the length of service eligibility requirements on NYC enrollees. Cost: $260,000. 2. Proposed Study: Follow-up Survey of Nelson Project Terminees. Objectives of Study: Determine the post-enrollment experience of a repre- sentative sampling of 1,000 Nelson terminees; critically analyze the capability of Nelson programs to improve the employability of older unemployed workers; and develop guidelines for improving job development and placement components of Nelson projects. Cost: $130,000. * * 3. Proposed Study: Follow-up Survey of Special Impact (CEP) Terminees. PAGENO="0419" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1257 Objectives of Study: To determine the post-enrollment experience of 200 SI terminees; and measure the effectiveness of job placement machinery. Cost: $26,000. 4. Proposed Study: Follow-up Survey of BWP On-the-Job Terminees. Objectives of Study: To determine the post-enrollment experience of 150 NYC Work-Training in Industry terminees; to assess the correlation of ultimate job placement with WTI graduation; and to develop specific guidelines and recom- mendations regarding the Work-Training in Industry Program. Cost: $25,000. 5. Proposed Study: Follow-up Survey of BWP Title V Terminees. Objectives of Study: To determine the post-enrollment experiences of 1,000 Title V terminees; to comparatively analyze and evaluate the pre- and post- enrollment experiences to measure the effectiveness of Title V program partici- pation examining such factors as welfare status, employment status, educational accreditation, etc. Cost: $130,000. 6. Proposed Study: Additional Follow-up Survey of Scbeuer Terminees. Objectives of Study: To determine the post-enrollment status of 800 Scheuer terminees; to critically analyze the job ingredients of a selected number of terminees in specific semi-professional categories. Cost: $95,000. 7. Proposed Study: Additional Follow-up Survey of NYC In-School Perminees. Objectives of Study: To continue to assess and measure the impact of NYC program participation on 1,000 NYC in-school terminees; to correlate the ex- perience of an additional 200 control group never enrolled in NYC. Cost: $130,000. 8. Proposed Study: Additional Nelson/Scheuer Program Evaluation Design. Objectives of Study: To formulate, develop and test effective evaluative tools and instruments designed to assess Nelson/Scheuer programs and to evaluate a representative sampling of Nelson/Scheuer projects. Cost: $130,000. 9. Proposed Study: Evaluative Design for NYC Out-of-School Programs, Con- centrated Employment Programs and Title V Programs. Objectives of Study: To determine the interrelationship between the above three programs in selected metropolitan areas; to develop an evaluation design which can be used effectively to evaluate the three programs. Cost: $95,000. 10. Proposed Study: Survey of Title V On-Going Programs. Objectives of Study: To determine the effectiveness of Title V programs on unemployed welfare recipients in both rural and urban areas; to assess and evaluate the effectiveness of program linkages and niutual cooperation existing between Title V programs and other manpower work experience and training programs in the same area. Cost: $95,000. 11. Proposed Study: Evaluation Design for BWP Programs in Metropolitan Areas. Objectives of Study: To determine those problems in metropolitan areas which are common `to all cities as `they relate to the operation of BWP programs; to evaluate a sample selection of BWP programs in metropolitan areas; and on the basis of these findings develop an evaluation design which can be effectively used by BWP personnel in the evaluation of programs operating in metropolitan areas. Cost: $30,000. 12. Proposed Study: Survey of `the Participation and Involvement of Minority Groups in BWP Programs. Objectives of Study: To determine the impact BW'P programs have on reduc- ing the effects of poverty-impacted, high density, minority areas; to evaluate the reactions and attitudes of the community at large towards BWP programs primarily serving minority groups. Cost: $220,000. 13. Proposed Study: Evaluation Design for BWP Programs in Rural Areas. Objectives of Study: To determine common characteristics in rural areas as they relate ~to the operation of BWP programs; evaluate a sample selection of BWP programs in rural areas; and on the basis of these findings develop an evaluation design which will permit an assessment of the effectiveness of rural programs by BWP personnel. Cost: $30,000. PAGENO="0420" 1258 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. GO~DELL. Will you put that in the record? Mr. HowARD. Right. I would be glad to add to that, or repeat it, if you would like. Basically, we used both in-house evaluations, within the Bureau, as web as the Manpower Administration, which looks at interbureau eva.luat~ons. We also contract out to independent organizations to look at. var- ious aspects. With regard to the Neighborhood Youth Corps, we have had several levels of contracted evaluations the most recent of which is reflected in the Secretary's testimony, and a copy of which will be provided. We have also under contract an in-school study, and we have just recently let. contracts for outside evaluations of the new programs that have been delegated. In addition, then, a. small staff will look at the remedial education components, will look at summer programs, and will investigate on a staff basis and evaluate these kinds of concerns.. Mr. GOODELL. My concerns arise from the articles and comments of some of our outstanding manpower experts with reference to the Neighborhood Youth Corps program and other programs. It says here that, "Little is known about the effectiveness of dealing with employees." It raises the questions that from experts' viewpoints we are having difficulty in getting data tha.t should be produced, then to evaluate, and for us to evaluate, the general popularity of the Neighborhood Youth Corps. Amazement has been expressed t.hat it has such general popularity without more data on its long-term effect as to employ- ability. Mr. HOWARD. The long-term effect, of course, is a little difficult to ascertain at this stage of the game. We are talking about the effect over afewyears. I think that the study that has been just completed, which measured t.he activity a.nd achievement of youth who had been out of the Neigh- borhood Youth Program at least 3 to 12 months, shows the kind of hard data that can be useful t.o any serious student. In addit.ion to that, we are goh~g int.o a cost-benefit analysis. The reports on placements, the reports on the reasons for terminating t.he program, the followup studies done by individual projects-I feel confident that. there is an increasing body of data, and I believe that we have provided a great quantity to the person you quoted, and I am a little surj~rised that he finds there are not hard data, because we have been providing these data to various committees. Mr. G00DELL.I just want to point out that I have before me, and I don't want to quote out of context, a good many comments. From OEO 1243, the National Analyst, Inc., the report of Neigh- boi'hood Youth Corps and non-Neighborhood Youth Corps youth. it is the tentative view that imless the boys participating in the Neiahhorhood Youth Corps had what they call emergent attitudes- that does not read very well, the last sentence in this particular evalua- tion section-it does not elicit any notable capacity to bring out upward striving behavior. The tentative conclusion drawn was that if they have emergent attitudes, if they are prepared to strive and to succeed, the Neighbor- PAGENO="0421" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1259 hood Youth Corps can give them an assist that is very meaningful, but if they don't have it, the Neighborhood Youth Corps does not exhibit any noticeable capacity to create it. I think it is this kind of a study whereby we see what kind of a function the Neighborhood Youth Corps has, and what adjuncts w~ may need. Mr. HowAiw. Certainly we sh~trc with you the concern that the pro- gram deal not only with those who have emergent capabilities, but those who don't display them, and hence more work has to be done with them. One of the factors which will assist the Neighborhood Youth Corps in doing a better job is the kind of measurements that was provided last year, and which is already going into effect: more supportive ~erv-* ices, greater exposure to work and training and counseling and reme- dial education, and the opportunities to develop, on a carefully selected basis,. the private sector exposure. We have already seen in our program a greater participation rate. Our movement out of the program on the part of the out-of-school projects is slowing down. The youngsters are staying in longer. Hence they are exposed more to the kind of supporting services. As the pro- gram matures, I believe that its capability and its impact on the youth whom you describe will grow. But certainly I think it is quite fair to say that a program that is not fully developed will not give as much help as is needed by a youth who is really in trouble. I would point out, too, the fact, as cited by the Secretary, of this Tampa situation where the youths themselves provided a sense of order in the city. The fact that NYC, both former and present enrollees formed more than half of that group, I think makes some comment on the kinds of attitudes and the kinds of activities that can result in NYC exposure. Mr. GOODELL. I have another question. lVe are having a little difficulty with this quorum call, for which we all apologize. But a question in line with what you have just indicated. Last year in the hearings it was indicated that the Out-of-school Neighborhood Youth Corps program was providing training for 10 percent of the enrollees. Do you have a figure as to that for this past year, and what it is at the moment? Mr. HOWARD. I believe we were talking about remedial education. Mr. G0ODELL. Last year in the report that was given it was stated that only 10 percent received any remedial education or training. Mr. HOWARD. By December of 1966, 50 percent of our out-of-school projects were providing remedial education. The last figure we had was December. Mr. GOODELL. Fifty percent of the projects-I don't know how many of the enrollees. Mr. HOWARD. In the out-of-school projects, 50 percentof the projects were providing remedial training and education, and 30 percent of all out-of-school enrollees were receiving remedial education. This compares to the 9.5 in January, which was part of the 10 per- cent that you were referring to. So that we. have a tripling.. PAGENO="0422" 1260 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. GOODELL. Your last figure, then, is 30 percent? Mr. HowAiir. Thirty percent. That is correct. Mr. GOODELL. That are receiving any training or education? Mr. HOWARD. Remedial education. And I should point out that this is oniy the portion provided by project-sponsored staff, the part that we are paying for. That is, it is the part that shows up on our budget figures. In addition-and this area is a little more difficult to get reporting on, but we are improving that-in addition, we have many community action agencies using other funds or school systems coming in on their own, to provide these kinds of services. Mr. 000DELL. Unless you have some hard data on that, I know that this does occur at times, but the Secretary last year expressed very honestly his concern that it was only 10 percent, and it was felt it should be higher. Mr. HowAiw. It is now 30 percent. Mr. 000DELL. The figure of 30 percent is a great deal better than last year, but I think all of us are concerned that it is only 30 percent, be- cause one of the standards by which you judge whether a program is offering some kind of long-term assistance is whether they are getting some basic education to meet the hard-core problem that it presents. This would, for instance, offhand, on a rule of thumb, mean that 70 percent are not getting the kind of help they will need for programs that have a long-term effect. Secretary W~pz. May I interrupt to say that we~ interpret H.R. 8311, title I, part B, as requiring us to do more on that than we have been doing. Mr. G00DELL. That is the way it was intended. You have interpreted it correctly. We did intend that. I will yield for the moment. Chairman PERIcINs. The committee will recess for 10 minutes. (A short recess was taken.) Chairman PERKINs. The committee will come to order. A quorum is present. Mr. SCHEUER. Mr. Secretary, we have heard this morning quite an interesting discussion about subsidy of private industry and reaching out to treat these structurally unemployed youth. What has been the experience, would you say, with incentives in general to stimulate private industry to come into this business of training youths, giving them the special attention and the supporting services that Congressman Meeds discussed. How do you think we can structure these incentives so that we won't he subsidizing business that should be doing the things anyway and training workers they would normally be training, how can we structure these incentives so that. we are shooting with a high-powered rifle and not a shotgun and design these programs so that the opera- tions are encouraged to reach out specifically to this group we all want to aim at? How do we design these incentive programs to work? Secretary WIRTZ. I am grateful to you for coming back, Mr. Scheuer, because f~llowirig the discussion this morning with Mr. Goodell I made a special effort to check particularly on the proposal that is made in the alternative in H.R. 10682. PAGENO="0423" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1261 I think there are two or three things without developing the point in detail and recognizing that it needs further consideration: I want to make part of this record your question is more specifically in terms of what we can do to attract further participation by industry and to attract it on a basis which will mean that it is directed at the hardest case. I would have these specific comments to make. I do not think it was done at all sufficiently in the first stages of the Manpower Develop- ment and Training Act when we were on an institutional basis. That we are all quite clear about. I think there has been a very, very substantial gain in the development of on-the-job training program. I don't means just a little. You know this year we have moved almost half of our program into that area. That has evoked a much larger participation by employers. The current stage goes beyond that. The current stage is to a considerable extent an experimental stage. It- includes actual experiments with a very substantial degree of subsidization. But on a very restricted basis and not with our fingers crossed but with our guard up about that. Now, I think it could be done on a very limited basis on just a case by case basis of that kind without danger of the kind that your ques- tion also implies. I am not at all satisfied yet that it can go beyond that on a subsidy basis without running into a risk which was implicit in the discussion this morning although it did not come out clearly. If there is to be in effect a dilution of the minimum wage law and that is the danger we are talking about here, we had better face up to that possibility very squarely because that will mean that this pro- gram will run into a rock or a fort. It has run into plenty of pebbles, but we have been able to take care of it. If the price of the development of a training program is the dilution of a minimum wage law then we have a major issue on our hands and I hope that is not what is involved. I had thought in the discussion this morning that the alternative proposal in H.R. 10682 was for a 25 percent, although I respect Mr. Goodell's suggestion that we would not be bound to that figure, I *thought it was payment of a 25 percent on a subsidy basis on the theory that that would in some way meet roughly the training ex- penses that are involved here. On rereading that proposal I am under the impression, but subject to correction, that it means 25 percent plus the payment of an on-the- job-training. If that is it, Mr. Scheuer, then that proposal simply brings us up to the question of doing the training that is necessary, plus adding a subsidy element, which, to the best of my knowledge and experience, could have no significant effect except to dilute the minimum wage law. In trying to tie together the answer to your question, we have taken -a very large step in the on-the-job training program. We are presently taking a variety of steps which include very active participation with employers in a community saying, "Here is our problem, here are these boys and girls who are not good community risks at this point, they are potential customers, they are potential employees, you have as large a -stake in them as anybody else and larger; will you work with us in mak- ing jobs available for them." PAGENO="0424" 1262 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 And the answer has been, "Yes," in a very encouraging way. We assume that there is still more that we can do by way of experimenta- tion in picking up the submarginal economic cost of that training. That I think we can do. I would like to express very strongly the view at this point that to go beyond that would be to invite real problems. Mr. SCHEUER. Problems of both evading the minimum wage struc- ture and also of simply wastage of money? Secretary WIRTZ. Of spending Government money for training which ought to be done by the employer anyway. That training ought to be paid for by the company as is customary rather than the tax- payer. Mr. Scm~uEn. On this side of the aisle you know we are very econ- omy minded. We like to see a big bang for a buck where Federal moneys are spent. We are concerned with the cost-benefit aspects of the training programs and we are eager to achieve maximum economy and maximum effectiveness in all of these manpower programs. It seems to me that anything that would largely dilute the cost- benefit ratios and give us far less direct results per dollar of Federal money spent would offend our very highly developed sense of econ- omy, thrift, and cost-effectiveness. Secretary WIRTZ. It would mine. Mr. SCHE1IER. A few months ago, earlier this year, through a process of default and attrition I occupied the chair of the meeting of the Joint Economic Committee at the time you were testifying. You gave us some remarkable figures on cost-benefit results at least to that point for on-the-job training programs. You stated, and placed some material in the record to the effect that the cost to the Govern- ment of these on-the-job training programs was returned in about 2 years from savings in welfare expenditures. Secretary WIRTZ. That is true and in actual taxes paid. Mr. Scrm~uER. The Federal investment was returned again in the first 4 years from the additional tax that these folks paid. In other words, you got them off welfare. That saved the cost of the program in 2 years, and then as taxpayers, they returned the Federal invest- ment in their training out of their taxes alone, during their first 4 years of employment. Have you had any recent experience that would change this for better or worse? Secretary WIRTZ. No, but it continues so that there is subsequent confirmation of this fact. There is no subsequent study but I appre- ciate your referring to and I emphasize it again. It means that these on-the-job training programs cost no more, probably less than, a welfare payment which would be substituted for it, which would have to be, and then after that the whole thing comes back in tax money. That is the on-the-job training cost. When you come to the mstitu- tional training programs and the other it takes a longer period. I have nothing to add to that. Mr. SCHEURE. You mentioned this morning that the cost of the "Jobs Now" program, of training the worker, was approximately $9,000. PAGENO="0425" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1263 Secretary WIRTZ. No, I was not referring to "Jobs Now," which costs are well under $1,000. There were some proposals which we did not accept because even after discussions to reduce the costs, there still would have been a bill of $8,000 to $9,000 per trainee, which is beyond the level which we can undertake on any extensive basis. Mr. SOHEUER. What is the possible cost of a 1-year Job Corps ex- perience? How would you rate that in terms of cost-benefit compara- bility? Secretary WIRTZ. I have some sensitivity on that point because it is a program we don't administer. Not only sensitivity as such, but I have limited information about it. I should point out again that the Job Corps is taking the hard cases. It has taken them from the beginning. It is taking those cases in which it is almost essential to get the boy or girl out of the home environment or lack of home environment and into a camp environment or training center environment, where he lives there. I don't know whether or not $8,000 or $9,000 on those terms is too high. I would not be prepared to say it was. There is a large capital investment however there. If I knew that the $8,000 or $9,000 which a private company says it needs to hire this individual was going to be productive for that in- dividual, I would not count it a loss because we are talking about youths who may otherwise need public assistance for the rest of their lives. So it would be a pretty good investment. I am pretty sure, as far as the Job Corps is concerned, that you get value received for the amount of money spent. I don't have any basis for believing the $9,000 subsidy to an em- ployer would produce that same result. Mr. SCHEUER. If it were a large corporation that had a well-designed training program it might be justifiable but I would be a little bit dubious if this kind of subsidy were given to small corporations which don't have the capability of operating these programs, even if they wanted to. Secretary WIRTz. That is the real problem. If we knew in this coun- try that we could cure every human fault, counting an individual fault in this situation, at $9,000 apiece we would snap it up in a minute. So it is not a question of the cost in absolute figures. It is a question of whether that cost will do the job. Mr. SCHEUER. Right. Also at that time you testified that in your opinion the present limiting factors on the scope and extent that we could expand these training programs-the New Careers programs, the on-the-job training programs-the limiting factors were two. First, experience, which approach would really do the job, and sec- ond, manpower, personnel to run the programs. I suppose in the last 6 months there has not been a great deal of additional experience. Do you have any suggestions. as to how we can fill the manpower gap? How do we train the trainers? Do you have the present organiza- tion to do so or do you need additional legislation to set up programs to train the trainers assuming in the next year or two experience will prove that we are on the right track and that our underlying assump- ti ons and the basic validity of our rationale is sound ~ PAGENO="0426" 1264 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Secretary WIRTZ. No, sir. If your question had been about the other hnntrng factors, I would have replied optimistically. I think that the projects that Dr. Aller and his people are doing, the experimental and demonstration projects, projects of a comparable kind that are con- ducted by OEO and other agencies are giving us that know-how pretty rapidly so that we know that this kind of thing is likely to work and this kmd of thing isn't. But on the personnel we still face an exceedingly difficult problem of getting competent people to do the kind of job which is involved here. It is so difficult, Mr. Scheuer, that my own thinking is moving more and more in the direction of finding those ways of tapping the private community and the volunteer instinct in this country to do a large part of that job. I am not talking about fuzzy, would it not be nice kind of thing.. I am talking about this is being an additional reason for drafting the corporate interest and the employer interest, into this thing. We are going to announce on Monday a new set of experiments along the lines of some previous experiencein the Job Corps and other places. Under the Manpower Development and Training Act, we are making contracts with private companies to do on a limited, very carefully controlled basis, some of this job. Part of the reason is that we may be able to find some of the answers to the problems you are talking about. We are not sure that it will work but we are doing what we can on it. Now, I should point out the fact that H.R. 8311 in section 128 does have a provision for the fur- ther development of a training program, training of the manpower,. not just the manpower but the people involved in this whole effort. We are doing that. We are also trying to work out a program through the employment service in the form of a proposed new act which would provide for various new training activities also at the State level because our problem at the Federal level is almost as noth- ing compared with the problem of getting competent people at the State or local level. My answer on this one has to be that I don't know the answer on this much better than 6 months ago in spite of a very diligent effort. Mr. Scin~m~n. You would not have additional suggestions here for programs for training the trainers, for creating this cadre of per- sonnel? Secretary WIRTZ. None; except it is reflected in that provision in H.R. 8311 for additional training program and except for the further exploration of the possibility of getting private help. Mr. SCHEUER. Let me ask just one last question. We have had some experience with these new career jobs in public service. We have about 125,000 education aids who are employed under the Elementary and Secondary Education Act. I might say that this New Careers Program has developed completely on a nonpartisan basis. We have had complete cooperation from my Republican colleagues ; one of whom-Congressman Steiger-introduced very constructive amendments to the Elementary and Secondary Education Act which implemented the New Careers concept there. There are about 125,000 school aids financed by ESEA~ And another 25,000 school aids are financed under the poverty program. But in other areas of public service there hasn't been much of a dent. They have more or less been frozen into the rigidities of the past, in PAGENO="0427" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1265 entry level and in the very large gaps between the steps on the ladder which makes the actuality of upward mobility on the job very difficult. Can you think of any programs or any legislation that would solve the problem of the scarcity of public service talent in our Federal civil service and in our State civil service systems? At the present time, as I understand it, we have about 500,000 public service jobs at State, county, and municipal levels which have `been budgeted for and which haven't been filled. At the same time we have the paradox that it is very difficult for a low-income person to break into the civil service. To be a charwoman you have to fill out a form 57 and list your graduate degrees, your European travel, your published papers and whatnot. The civil service agencies, Federal, State, and local, have not come of age, have not opened up their ranks, have not opened up the entry level at a point that would be meaningful. Do you have any ideas how we can move these institutions to accommodate themselves to the realities of today's labor market, and in particular to gear their entry requirements and their promotion and advancement practices to the special needs of the structurally unemployed poor? Secretary WIRTZ. I would be grateful for an opportunity to `supple- ment the `record on this point, Mr. Chairman, because my answer to the question right now will give you bits and pieces. They will include what I know to be the Civil Service Commission's efforts along this line. They will include our efforts, for example, in the concentrated, `employment program, to find in the indigenous group qualities of this kind which I don't. think have been thoroughly explored. My answer would include a. reference to what we have in mind as far as this provision of H.R. 8311 is concerned. They would include a reference to the employment service bill and they would include, and this would be my point in asking for an opportunity to develop it more fully, this use of volunteer interests that are available in this country. And it would include finally, Mr. Scheuer, despite what seems to be a pessimistic inventory, an optimistic note, because if I understand the youth in this country today, they are just waiting for an oppor- tunity to do exactly the kind of thing we are talking about. They are willing to serve and they want to serve in those capacities in which there is an opportunity to be where the action is and they are talk- ing about social action. So that although I have responded in terms of not having worked this out yet, my understanding of these youths is that this is exactly the kind of thing they want to do and I think they can be tapped. So, if I may supplement the record on that `point, Mr. Chairman, I would be grateful. Chairman PERKINS. Yes; without objection it is so ordered. Mr. Scm~uI~R. I certainly appreciate your testimony very much, Mr. Secretary. I think we are all optimistic up here, mostly because of the thrust and leadership that you and your professional aids have given this program. It is said that optimism is to a politician what courage is to a gen- eral. Maybe we have to be optimistic to survive. But I think from what we have learned in working with you and your staff people we have great reason to be optimistic. ` PAGENO="0428" 1266 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Secretary WIRTZ. Thank you. Mr. SOHEUER. I can oniy add in closing that if I could feel the kind of outreach, and inventiveness, and resourcefulness, and capacity for change which we have seen in you and your colleagues over the years were matched in other executive agencies and other branches of the Government I would not be so reluctant in seeing this withering away of the OEO take place. I wouldn't be so opposed to seeing these in- ventive new programs transferred from the OEO to the established departments of Government. I hope that some of this will rub off on other agencies of govern- ment at all levels, Federal, State and local. But until it does I cannot help but agree with you that we need the Office of Economic Oppor- tunity as a goad, a stimulus, as a change agent and when the time comes that other agencies are playing those roles just as effectively as your agency has then I think we will listen to the blandishments of the minority. Until then, I congratulate you on what you are doing and look for- ward to working with you in the days ahead. Chairman PERKINS. Mr. Quie. Mr. QrnE. Mr. Secretary, in answer to Mr. Scheuer, you say that the Industry Youth Corps, the way you read it now would only dilute the minimum wage law? Is that what I understand you to say? Secretary WIRTZ. No; it would not only do that, I think it would present that very real danger. Mr. QUIs. First, why would it dilute the minimum wage law when each of the young people would receive the minimum wage similar to what they receive, as I understand, now m the Neighborhood Youth Corps from public and nonprivate agencies. There the Federal Government pays 90 percent of the cost and it does not dilute it. Why would the Industry Youth Corps dilute the minimum wage if it paid 25 percent to industry? Secretary WIRTZ. With the possible exception of experimental efforts, it does not, in any case I know about, pay 90 percent of any- body's wages where that individual is engaged in private employment. Mr. QtJIE. I said in public and private nonprofit agencies in the NeighbOrhood Youth Corps. Secretary WIRTZ. My answer would be that the minimum wage law does apply to those operations for profit and the proposal would seem to go into that area~ Mr. QuIE. If 90 percent is not diluting it in private, nonprofit, and public agencies, and if they are paid the minimum wage, why would paying the 25 percent dilute itin the private agency? Secretary WIRTZ. I don't know where we stop along this line, but, of course, a person in schoOl is paid, where it is public education. We always recognize in this cquntry the distinction between the use of public funds for educational and training purposes on the one hand, where I think therehas been no question, and on the other hand, private enterprise where we have felt that the minimum wage was applicable if T understand your question, it seems to me to involve what I should think of as a confusion or interlocking of two different things PAGENO="0429" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1267 Putting it again, I don't believe the minimum wage law has ever been considered applicable to the payments for education in training. Mr. QUIL. Not for education in training but in the Neighborhood Youth Corps the minimum wage does apply whether it is an in-school or out-of-school program. Secretary WIRTZ. Taking that fact, that is right. I interpose no objection. In fact, to the contrary, as far as on-the-job training is con- cerned, where it is private employment, I think that is a good thing. My concern is not about picking up the tab. The public is picking up the tab as far as the training, the educational factor, is concerned. I think it should. I am very much disturbed by the proposal that the public pick up that tab and also an additional 25 percent if I read that proposal cor- rectly. I am not sure that I do. Mr. `QiJIE. What is the difference if the Government picks up a por- tion of the tab of a private profitmaking organization or a private nonprofit. Secretary WIRTZ. It would make no difference in support of the on-the-job training program. I feel it should be expanded and extended. It is when you go beyond that point that I raise the question. I do suggest if you go beyond that point then it does present a prob-. lem of relationship to the minimum wage law. Mr. QnIE. Haven't we already gone beyond that point in the Neigh- borhood Youth Corps in public and private nonprofit employment? Secretary WIRTZ. Oniy with respect to payments for an educational or training element. On that it seems to me that we are over on the side where the case becomes clear it is not in the whole educational program. I think this problem arises only when there are payments to em- ployers for profit which are not identifiable with education or training. Mr. QUIE. What about the youths I saw in a park in `Chicago digging around some trees, raking some leaves and doing other work whièh I understand they do over and over again? Is all of that training a train-. ing component? Secretary WIRTZ. No; the point is very well taken. In fact it would seem to me that your point requires an amendment of my statement. If we come to a conclusion in which there is a situation, in commonter- minology, there has to be an employer of last resort, particularly the Government, on a public works program then it seems to me we are in in a third area. In that area it has been recognized that full Government payment is appropriate. I dislike that area as much as I think all the members of the committee do and want to limit it as .far as possible. May I just add this. It has been very `carefully provided in every' one of those public works laws that money shall not be paid under any circumstances which results in private employment being reduced iii what would otherwise be private employment. Mr. Qurn. Do you feel that a public agency should be the only one that should be an employer of last resort, or do you think that private nonprofit agencies ought to be able to engage in this? Secretary WIRTZ. I have such a complete lack of satisfaction with any public employment or not-for-profit kind of employment that I have to answer only having identified that position first and having PAGENO="0430" 1268 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 identified that position first my answer to you is that I see no difference between the two. Mr. QmE. I find myself coming to the point that if there is no differ- ence between private nonprofit organizations, then I don't see that the private profitmaking organization makes that much difference. Sometimes the difference between private nonprofit and private profitmaking determines whether you are paying it to patrons or to employees rather than to the stockholders. Secretary WIRTZ. I would have no difficulty at all and don't have any difficulty at all with that in terms of logic. Let us take a specific case. Suppose there is an individual that is worth 50 cents an hour to an employer. The minimum wage is $1.40 an hour. And the training which he gets will cost another, let us say, 50 cents an hour. It would make more sense theoretically to have the employer hire that man, and we help pay wages as well as training costs. That would be a better bargain than keeping that person on relief or it would be a better bargain than our picking up the whole of the training cost because it would be 50 cents an hour. Theoretically, I don't think there is a thing wrong with that. If I could see a law, and I suppose that is what we are looking for in the tentative probing we are doing, if I could see a law limiting that gen- eral situation I would subscribe to it. But I know of no law that would cover that situation without cover- ing a lot of other situations, including particularly the situation in which the employer would traditionally have absorbed that x factor until this individual became a fully worthwhile employee. I am afraid that the proposal which has been made would cover cases of that kind. Mr. QLJIE. I see that the philosophy and logic of the Secretary and myself are not very far apart. The question would be in the field of the industry youth corps and whether we have gone beyond what the Secretary- Secretary WIRTZ. No, the closest piece of experience is our learner certificates under the minimum wage law as applied to handicapped people. We have spent a lot of time with the sheltered workshop kind of situation. In theory that ought to be right. We know that in prac- tice it has led to some very, very unfortunate results. Exploitation is not too kind a word for some of what has been done there. That is not the worst of it. It has meant that those people physically handicapped are today, by virtue of the exemptions we grant, doing terrible kinds of work. They are doing a repetitive, monotonous sort of thing that yields them about 25 cents an hour in some cases and can't help their ego, id, or whatever it is. What we are talking about is another kind of disadvantaged person here. I am afraid it would lead to those same results. Mr. QuTE. Let me get onto another area where I want to ask ques- tions. That is the relationship of the Department of Labor with the Office of Economic Opportunity. Now, the way this new bill is going to be written, title I, part B will incorporate, as I understand it, all the programs that will be delegated to the Department of Labor. Secretary WniTz. All that have been and I assume that in the fu- ture, but there is nothing that they will be required to be delegated to the Department of Labor. The answer is "Yes." PAGENO="0431" ECONOMIC OPPORTTJNITY ACT AMENDMENTS OF 1967 1269 Mr. Q1IIE. All of part B will not be dealt with by the Department of Labor? There will be some programs that will be operated under part B of title I which will not be delegated. Secretary WIRTZ. I will check that out. The only thing that I can think of at the moment would be the foster grandparents program. Mr. QUIE. That is the only one I can think of. Secretary WIRTZ. That is all. We have talked about that. The OEO people's logic is that it should come to the Department of Labor but in any sense of reality it is pretty clear it is not a good place for it. Mr. QUIE. Because of the people they are working with. Secretary WIRTZ Sure. Mr. QUIE. What is the relationship and what will be the relation- ship between OEO and the Department of Labor in administering these programs. How do they look over your shoulder? What kind of conferences do you have? Why do you need them? Secretary WIRTZ. I was thinking of that in connection with Mr. Goodell's question awhile ago about supportive services. That is a good illustration, supportive services in connection with the OEO. OEO has pressed us in the last few years to add more supportive services to the Neighborhood Youth Corps program. I think that has been all to the good. I think that kind of emphasis is illustrative of what we need. Now, the answer to your question "Is this in operating effect," there are effective today delegation of authority and assignment of responsibility from OEO to the Depart- ment of Labor to administer these programs. For the delegation of the special impact, Nelson, Scheuer programs, Mr. Ruttenberg, Mr. Howard, Mr. Hardy, and others from the Office of Economic Oppor- tunity sat down and worked through with sometimes painful detail what ought to be regulations, and they govern, among other things, the delegation. That was a fairly arduous process. You would not want to go through it very often. They would not have to under this arrange- ment. But in answer to your question it does contemplate establish- ment of rules and regulations. It does contemplate continued pressure in connection with something like the need for increased supportive services. They may feel, from the standpoint of somebody whose whole job is to take poor people and pull them up permanently, that our program may be going too fast or too slow. I think it is a good function. Mr. QrnE. If this is a good function then would it be wise to add this component to other manpOwer programs as you have in order that the outside force of people would also be made to bear on them? Secretary WIRTZ. That is a very good question, if I may say so, and one that puts me very much to the test of the philosophy I am suggesting. I would mention two things in connection with it and neither of them will be completely illogical because your question in this context presents exactly that possibility. The two points I mention are (1), title VI, part B. In supporting title VI, part B, I recognize that it pre- sents exactly the possibility that you are raising with respect to the programs under the Manpower Development and Training Act. I do go along with it, in fact, because I think there is enough justi.. fication in an affirmative answer to your question to warrant the kind of coordination required by title VI, part B. PAGENO="0432" 1270 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 The other point to which I refer is this, Mr. Quie. You recognize that in connection with the administration of the manpower program `we deal with the Federal-State employment security system all over the country. We deal in a very meaningful way with a structure which is over 30 years old. It has played a very large part in the administration of the Man- power Development and Training Act, together with the State voca- tional education system through which HEW works in administering the institutional training programs under the act. I would be opposed to bringing that whole program into the kind of regulatory arrangement which I recognize as good sense with re- spect to these new programs. 1 would be opposed to that. I would be in favor of bringing it in to the extent that it is contemplated by title VI, part B. So I make a pragmatic distinction between those two, and find the rationalization in the fact that one is for new programs, the other is for old programs. Mr. QUIE. Would you expect as time goes on and the new programs can no longer be called new, that you would shift then? Eventually you would see a phasing out of OEO's activities in supervising the problem? Secretary WIRTZ. I see a phasing out of poverty in this country in the sense that we have it today. I don't think it is as faraway as a lot of people believe or some people believe. So, my answer would necessarily be "Yes, sir." I do `see a future in which it is no longer necessary to set up a separate representation or institutional provision for the poor. I surely do see that. Mr. QUIE. I hope that is right because if we' continue on the' road we are now, I think we will find a; group of people segregated because of their economic level. This would be as degrading as the segregation of race that we have had for years and years in this country. Secretary WIRTZ. May I say I think there is a pretty clear-cut' time factor here. There is a slimmer possibility of clearing up poverty completely among those who are already through their education. I am quite sanguine about making the educational system work so that this will be a tapering problem from now on. I don't believe there will be many more poverty eligibles coming along in the country. To put it affirmatively, I think the education system is at this point picking up so rapidly with respect to this problem that it is going to take care of most of the future. Mr. Qum. Let me ask you, then, about the Community Action agen- cies as an effective program. Let us take the Nelson program in par- ticular which was funded under title II. When it was first financed I was under the impression that this would be an opportunity for local Community Action agencies to fimd before an earmaTking of the funds. Now, the shift is out of title II to title I. To what extent will com- munity action agencies relate to all the programs you will be operating and administering under title I, part B? Secretary WIRTz. To a considerable extent. In working practice, both with respect to OEO programs and with respect to an increas- ing number of MDTA programs, our operating rule is that if there is PAGENO="0433" ECONOMIC OPPORTUNITY ACT AMENDMENTS OP 1967 1271 an established Community Action agency we will do business with them as the contracting agency to the extent possible. We have gone quite far in that direction. The same question comes. up specifically today in connection with two programs: The neigh-. borhood centers which are being established by HTJD, and also under the Model Cities Act, the question which you raise will be very acute. With respect to the non-OEO, and specifically with respect to. MDTA programs, we are saying we want to work with their commu- nity action agency or whatever it may be, if there is a practical pos-. sibility of doing that, and usually there is. There are some situations we feel, as a matter of practical common understanding, we are going. to use some of the other agencies which are involved, too, and not shut them off. Very frequency part of the program will go through the commu- nity action agency but that should not be fuzzy. An available clear- cut answer to your question is that in all of the OEO cases we write in a provision that all of the programs worked out are to be funded with and through the community action agency if at all possible. My answer goes beyond that. With respect to other programs we want to use them. Mr. QuIE. In other words, the neighborhood youth corps program could be funded one of two ways. Either you go to the local com- munity action agencies and receive the money from the versatile funds, or you would take the money directly delegated to you, along with the authority from OEO, and apply to the youth corps; is that correct? Secretary WIRTZ. I am not sure we are talking about exactly the same thing. With respect to the neighborhood youth corps, 73.5 per- cent of all fiscal year 1967' projects are related to Community Action agencies. Mr QUIE Arid the proposed change, putting all these programs under part B, title I, will not change. Secretary WIRTZ. No. On the contrary, the pattern is spelled out in, the delegation even more specifically than it was before. Mr. QUIE. Does the Community Action agency in any way- Secretary WIRTZ. The record should be straight. It is spelled out in the proposed legislation to the same degree that it was before. Mr. `QUIE. Do the Community Action agencies have any voice-I know they wouldn't have directly, but indirectly in the activities of the local employment security offices? Secretary WIRTZ. Yes. The words of your question are not just right, hut, let me say this-there is developing an increasingly close working relationship between the Community Action agencies and the employ- ment service. I don't mean that in overly general terms. Let me be specific about it. In this concentrated employment program specifi-~ cally-and I mention that because it has been so much on our minds recently-I'll take the San Antonio situation. We are working out a concentrated employment program in San Antonio and the moving local agencies are the, Community Action agencies there, the local em- ployment service, SER, which is a group representing particularly the Latin American communities and FREE, which is a group represent~ ing the Negro minority groups. 80-084-67-pt. 2-28 PAGENO="0434" 1272 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 In every one of these programs there is an increasing attempt to get the Community Action agencies and the employment services working together. You have before you, too, you have had before you, too, another illustration of the same thing, the President's proposal for amend- ment to the Vocational Education Act this year include a provision for the development of, through the vocational agencies, programs like these work training programs in the neighborhood youth corps, with a specific provision that there be a working relationship develop between the vocational education and the employment service people. We are trying very hard to make these programs an agency for developing coordination at the local level as well as national level. Mr. QUIE. You object to having written into the legislation affecting the local office of employment security or MDTA, the requirement that. money be allocated through local community action agencies so that you would have to have the same responsibility to work with them as you presently do with OEO programs? Secretary WIRTZ. You ask, would I object. I would counsel very strongly against it. Because, among other things, that would put this whole thing in the cast of an antipoverty program. Now a good deal of the employment service program and a great deal of the Manpower Development and Training Program is directed at other needs than poverty needs. We have talked about those here. To be illustrative, there is a short- age of nurses in this country right now. There are a number of Man- power Development and Training Act programs which we are work- ing out with HEW to meet that problem. It has nothing to do with poverty. You would also run into some exceedingly serious pragmatic practical problems in connection with employment service. You would have a political revolution on your hands if you tried that in connection with efriployment service. I would counsel very strongly against it. Mr. QmE. Even though it has nothing to do with poverty, the coIn- munity action agencies have this possible aspect that it brings about an involvement in the plan of the people who have to be helped. These happen to be poverty individuals, but the concept of a greater role played by the people to be helped seems to me a wise one and may be the key to the poverty program. It is one that I want to make cer- tain remains intact. It is one that we call involvement of the poor. Secretary WIRTZ. I agree with the fact of involvement completely. However, in effect, focus all these programs or to bring about the fur- ther development Of all of these programs in terms of meeting poverty, which we just agreed a. few minutes ago ought to be on its way out, seems to me to be an organizational mistake. Mr. QuIE. I question whether Community Action agencies ought to go out with poverty. V Secretary WIRTZ. The concept surely should not. Mr QuIB. I should expect that they ought to continue. Secretary WIRTZ. There is another point of relevance. If the point is the broad one you now make about the participation, the involve- ment of as many people as possible through, among other things, some Government agency which takes them into account, Vsmall "g" Govern- ment agency, I am a hundred percent for that. V PAGENO="0435" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1273 I don't think there has been mentioned here a program which has recently been developed in the coordination area, we call the CAMPS, Cooperative Area of Manpower Planning System. I am against per- sonally any agency which has an acronym. There has been reference to the concentrated employment program, Mr. Chairman. I am going to request that the record put that always in lower case because it is not another project and I am tired frankly of acronyms and this is one of mine. (Brief discussion off the record.) Secretary WIRTZ. This organization to which I referred is a reflec- tion of exactly what you are talking about. It is a program in which there is cooperation by all the Federal agencies involved and there is the development at the local area of an interagency, including both Federal and the State agencies, and including clearly the community action agencies as one of the key factors to develop these various programs. If your question is whether I think the whole of the employment area, the Manpower Development and Training Act, ought to be tied in with some local coordination program of that kind, it is very strongly affirmative. If it were possible to coordinate the State boards of education, State vocational education agencies, employment service, those State services, I would be all for that, too, and would think that the employ- ment area would be all part of that. Mr. QuIB. Do you have something written up about what you call CAMPS? Secretary WIRTZ. Yes. It is a very formal agreement. I would be glad to make the agreement between the agencies part of the record. it mvolves chairmanships and all that sort of thing. Mr. QUTIE. Will you send me a copy? Secretary WIRTZ. Yes. Chairman PERKINS. If you send one member a copy, let the other members likewise have a copy. Secretary WIRTZ. Yes. Mr. Qun~. Thirty-three. Chairman PERKINS. Mr. Meeds. Mr. MEEDS. No questions. Chairman PERKINS. Mr. Goodell. Mr. GOODELL. Mr. Secretary, what action have you taken in the De- partment of Labor to implement the directive issued in 1965, that each department undertake the planning and programing and budget sys- tem, "PPBS"~ Secretary WIRTZ. We have taken a great deal, Mr. Goodell. The Sec- retary of Defense won't mind my saying, I think, that although in much of the publicity that system has been identified with the Depart- ment of Defense, the system was developed not before but almost to an equal activity in the Department of Labor by our Office of Admin- istrative Management, under the direction of Assistant Secretary Wertz, so that we have a development of that kind. We had a roadblock thrown up by an appropriation committee a few weeks ago with denial of 10 jobs in that. But we have a thor- oughly developed PPBS system. PAGENO="0436" 1274 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. GOODELL. Is it producing data to give us cost figures and results? Secretary WIRTZ. It varies from program to program. My answer to you would be quite specific and affirmative. If you ask me about the wage and hour program, it is the kind of program where it has been very easy to apply the PPBS approach. It has been hardest to apply it in an area like the Bureau of Labor Standards. It is being applied to the manpower program to an extent that sometimes upsets the Assistant Secretary for Manpower. It is hard to apply the PPBS system, say, to an experimental de.- velopmental program. Now, we do apply it, but Dr. Aller protests pretty vigorously that it is very hard to apply that kind of approach to an experimental and developmental program. As we learn more about the techniques, and as we build the necessary data reporting into the programs, it is being applied with increasing effectiveness. (The following statement was submitted by Secretary Wirtz :) The output of our PPBS work consists of two kinds of documents: First, the annual program memorandum, which lays out the program budget for five years in advance, and its follow-up documents, the quarterly reviews and analyses. The latter represent our quarterly assessments of our activities, in terms of those we had planned, and also provide the opportunity for us to set forth program modifications and alternatives. These are the basic internal management documents. Second, the analytic studies underlying the program proposals. These include, but are not limited to, the cost-effectiveness studies which have become very fashionable, and which in truth provide the foundations for the PPB system~ We are developing a whole series of such studies within the Manpower Admin.- istration. Some of these are what are called simulation models. In these, particularly- applicable to new or experimental projects for which no data are available,. we say, in effect, if the costs are such-and-such, and if the benefits are such-~ and-such, then the program will pay off, in terms of benefits to the economy, more (or less) than it costs. The hypothetical costs and benefits plugged into these studies are those that are reasonable (based on other information), but are not data actually reported on the program. The Employment Service has carried out a series of such studies: (1) Cost-benefit analysis of relocation assistance to unemployed workers. (2) Cost-benefit analysis of youth placements made by the Employment Serv1ce~ (3) Cost-benefit analysis of services to older workers. The other kind of cost-effectiveness study is based on data derived from the programs in question, and is designed to explore either alternative programs or alternative mixes of services within a program. We have a series of such studies under way, all of them of larger scope than the ones already mentioned,. and all of them suffering from lack of data adequate for this kind of analysis. They include: (1) A comparison of on-the-job and institutional training. (2) A study of the mix of services provided by the Employment Service. (3) An evaluation of unemployment insurance as a counter-cyclical device. (4) A study of the mix of services in an Employment Service experimental. project which provides special intensive service units for older workers. (5) Development of a model to relate the value of training from birth, to life- time earnings, by race, sex, and major occupational category. (6) Cost-benefit analysis of a pilot project for training of prison inmates. (7) Cost-benefit study of services to slum populations. (8) The amount of money the government is "justified", on purely economic- grounds, in investing in the training of a single individual. In addition, there are some studies being carried out by State employment services, particularly New York, Nevada and California, as well as cost-benefit studies being carried on by university research units under contract with the~ Department PAGENO="0437" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1275 Mr. SCI1EUER. Will you yield for a brief question? Mr. GOODELL. I am also interested in anything you have been able to develop with reference to the Neighborhood Youth Corps or any program we have been talking about here. Yes, I will yield. Mr. SCHEtTER. Do you have any plans for running an on-going course of economic analyses for manpower programs? Secretary WIRTZ. Yes, we do. We can tell you how many people are currently programed; we have never tried to give firm figures on future programs, since these are largely dependent upon budget and appropriation decisions. We have told you how many people were be- ing trained in a particular time. That we can give you. We can also give you figures about the number who are employed after training. But as I have indicated, when it comes to solid cost benefit analysis it would give a false impression to suggest that the data available for manpower programs are yet sufficient. I hope in the future, and in the not too far distant future, we can tell you, because we are working on it, whether a dollar going in here will produce more than a dollar going in someplace else. We cannot do that yet with any assurance. I would only like to add, Mr. Scheuer, that in full recognition of the desirability of cost-effectiveness analysis, when we are working with human development programs there is a large part of the bene- tb-s which are going to be very hard ever to get out of a computer. As long as the manpower program is geared to meeting the needs of a system, namely employment, earnings, and the economic system as a whole, we think we can come up with quantifiable answers. But to the extent a human redevelopment program ought to be measured in terms of the utilization of the capacity which is in each individual, or his psychic satisfaction in a jo!b, that is gong to be hard, thank heavens, for a computer to measure. On the other hand, if the program * pays off in quantifiable benefits, we may be sure that it will more than pay off when the non~quantifiable and unmeasureable human values are also added in. Mr. SCJIEUER. I agree with that. In terms of your suggestion that it might cost `ts much as $9,000 to do the full iob for one of these * chaps, we might find, and I think we probably would find, that in terms of the decre~tse in welfare cost of th'~t rndividu'd to society, coupled with an increase in taxes, earning power, contribution to society as a citizen, I think it would be a lot easier to convince Mem- bers of Congress on both sides of the aisle as well as the American public that these programs can meet every test of a hard-nosed ac- countant. They meet the test of the balance sheet, the bookkeeping statement It is lust darn good economics `tp'~rt fiom the obvious humanit~rian implications of the programs Secretary WIRTz Mr Ruttenberg reminded me that one of our contrtct consultants is m~king a comparative study of the benefits of on-the-job training and the institutional training ~rograms. This is one of the studies I have already mentioned. * I should also like to answer an earlier question of Mr. Goodell's, in which he asked about studies of the Neighborhood Youth Corps or PAGENO="0438" 1276 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 other similar programs. We are undertaking to develop in the corn- ing year (fiscal year 1968) an ongoing evaluation system, including cost-effectiveness analysis, of all the programs of the Bureau of Work programs. Mr. SOHEUER. Of course, the second great advantage is that per- haps a year or 2 years hence we will look at the whole smorgasbord of programs and begin zeroing in on the programs which show a ter- rific return and drop some of the programs that have been marginal. I think that is something the Members of Congress, from all points of view, would like to do. We need hard data in order to do that. Secretary WIRTZ. I referred earlier in general terms, because the announcement does not come until Monday, to a series of 10 contracts that we are making with private organizations to do some of this training. We are starting right from the start on that, on a complete evaluation of the effects of these 10 different programs and we set them up on the basis of a different mix of various components largely so that we can find out what makes sense and what does not. Mr. SOHEUER. That will be valuable to us a year hence. Mr. GOODELL. Lnfortunately, unless we in the Congress agree to do. this, so long as the Secretary feels as he does at present, we won't be able to evaluate the idea of subsidizing wages in private employment with this kind of assessment very effectively. The figure of $9,000 I must say in all respects I regard as a scare figure in terms of the cost of this type of approach. But even if it turns out to be that, your second point was that, if you were sure it would pay off, you would say it was worth even that price. When we tried to devise the language in our Industry Youth Corps proposal to accomplish it- Secretary 1~TIRTz (interrupting). On an experimental basis? Mr. 000DELL. Well, as far as we are concerned, when we talk about setting it up with 85,000 or so participants, it is not exactly an experi- mental program but posed in terms of a total need of a million drop~ outs a year, it is a small group. Perhaps we should start at a slower pace than that. But your exist- ing programs for on-the-job training are now paying this kind of cost for the most difficult hard-core person. You would continue under our proposal exactly the same standards that you apply now in those areas. You just have the additional incentive of paying a quarter of the wage to the employer. You say it would dilute the minimum wage. I don't think it serves much purpose for us to quarrel about whether it dilutes it or not. It certainly does not dilute it from the point of the individual who re- ceives the wages. In a sense, the Industry Youth Corps proposal is designed to help ease the transition to employment to the degree that the minimum wage makes it more difficult to get youngsters started in productive employment. We build a bridge for the transition here. They receive the minimum wage and I believe they should. I believe the principle could well be extended beyond that. I did not mean by saying we did not want to belabor it to preclude your making any response, if you have one. PAGENO="0439" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1277 Secretary WIRTZ. I don't think there is much to add except two things. First, that we are talking about experimentation in this area. We are 100 percent for it. As a matter of fact, you should know that in the budget that we submitted this year for fiscal 1968 we included an identification in the E. & D. program, experimental and demonstra- tion program, of an item for an expanded experimentation. We would be in favor of the experimentation on it. There is no question about that. I would add only this: Regardless of what I may have said, if there is any situation in which an individual can be salvaged, recovered, redeveloped, at equal expense, (a) publicly, (b) privately, we will subscribe to the private doing it. Mr. GOODELL. Of course, that assumes all the points about which we might differ. We are quarreling only about whether the programs as designed and proposed would accomplish certain agreed-upon objectives. Secretary WIRTZ. Yes; that is right. Mr. GOODELL. Have you had an opportunity to look over our sug- gestions contained in the opportunity crusade-title X of H.R. 10682- with reference to the beginning move toward quantifying job op- portunity? As you well know, since the original bipartisan days of the Manpower Development and Training Act expansion, it is an area in which I have had great interest. I must say I am very discouraged over the lack of funding by Congress, or action by the Labor Depart- ment along this line. I recognize many of the hurdles we face. None- theless it seems to me we are still too far away from knowing the facts about skill requirements, occupational outlook, job opportunities, labor supply in various skills, and employment trends at the National, State, or local level, all of which, it seems to me, we are now develop- ing the tools to obtain. I would like your general comments about this. Perhaps we won't do this as part of the poverty legislation. We could put this directly under the Secretary of Labor, since it is a logical part of the manpower program. As you know, we wrote such provisions in the Manpower Act but they have not been fully implemented. Secretary WIRTZ. We are not at all far apart on this one. You asked for my comment in general. Then I think it is of enough importance that some supplementation by Mr. Ruttenberg would be helpful. I am all in favor of getting more job availability data of one kind or another. I am all in favor of putting the matching of that data on jobs and training opportunities with the individual available data on the most efficient basis possible. I call attention to the fact that there was a recommendation along these lines by the National Commission on Technology, Automation, and Economic Progress, headed up by Dr. Howard Bowen. I went out of my way in Japan last year to make as careful study and review as I could of what they had done there as far as this kind of proposal is concerned. They say that they have it on this basis. They have put their information onto a telecommunication basis as far as the various parts of the country are concerned but it still falls short of this. There is a very high price tag on it. We are talking about, if you go all the way, if you computerized and put it on an PAGENO="0440" 1278 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 electronic communications basis all of the job, all of the employee availability, and job availability data we are talking about, a bill of $200 million, for the whole job. I would like, if I may, to have this general statement supplemented by Mr. Ruttenberg's reference to some efforts we are already making in this direction. Mr. GOODELL. May I ask, with reference to the $200 million figure that you mentioned, is that an initial cost figure? Are you talking about a total figure? Would there be an annual maintenance figure of less than that? Secretary WIRTZ. That is the figure that the President's commission came up with as the annual cost of a computerized telecommunica- tions employment and job vacancy service. You may remember that they also proposed that it be on a private- not-for-profit basis. So they worked out in quite specific detail. My recollection, subject to correction, is that that is the annual cost. It is a large bill. Mr. SCHEUER. Will my colleague yield for a question on this point. Mr. GOODELL. Surely. Mr. SCHEUER. Has any cost-benefit analysis been done of this pro- posal, the $200 million? It seems tome that in terms of lost manpower days, years, months, that we have been recouping, it might be a tre- mendously attractive investment. Secretary WIRTZ. I know Mr. Ruttenberg's knowledge of this will give you more detail than I. Mr. RUTrENBERG. We had, about 9 months or more ago, entered into a contract with a private corporation called the Auerbach Corp. and the Bureau of Employment Security specifically to look at the prob- lem of how we might put all of the labor area information on an elec- tronic data processing system, exchange it within and between States, and between the States and the Federal Government. The Auerbach Corp. has come up with its first report. We have now contracted with them for a $2½ million contract to help us install, on an experimental basis, a program in three States. In addition, the program provides for the- development of an area manpower system in the New York metropolitan area which includes parts of Connecticut and New Jersey. It includes provisions for devel- oping a working relationship with State and local agencies engaged in manpower development and assistance functions. This effort in- creased the contract costs of $31/4 million. - We will phase out over a period of time the development of moving to other States as these programs develop. We are engaged in the matching of jobs with men, for example. We are engaged specifically in this contract with the Auerbach Corp. of- developing a - computable occupational descriptor vocabulary, which is really one of the very difficult problems, of how do you identify the man and his skill and the job and the employer and his requirement, how do you match those with the vocabulary that the- computer can use and be consistent between all areas? - - - - - - - This is one of the things that the Auerbach Corp: is helpmg us develop. While that - is being developed simultaneously we-are going to mo'~ e in three States with "n expenment'd electronic data processing PAGENO="0441" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1279 system that will begin to experiment with what limited information we have on occupational descriptor vocabulary now. For example, we have had a program underway for some time called LINCS- (Labor Inventory Communications System) -out in. the State of California which has just dealt with professional people. It has developed a vocabulary of its own. We are going to move this along so that the proposal which is contained in your bill is some- thing, which for now at least, for the last 9 to 10 months we have been moving quite vigorously with. Mr. GOODELL. As you know the original mandate for something com- parable to this is the Manpower Development and Training Act. We have strengthened and changed somewhat the focus in the opportunity crusade proposal we are making now. Out of what program did you fund this $21/2 million? Mr. RUTTENBERG. We are funding this program out of the grants to States for unemployment compensation and employment service administration. in other words, we will identify out of the next year's budget suffi- cient money in the grants program to handle this in three States. Mr. GOODELL. I take it from what you have said generally we have no disagreement about the objective. You are in a better position to know what additional observation and money, obligation, or power you may need. I think we would appreciate it if you would provide for us any information along those lines, any suggestions you may have for implementing this basic idea that we have put into the Oppor- tunity Crusade. The committee might well, for instance, determine that we would like to move somewhat faster here and provide you the authority and the money in certain categories. I doubt very much if we will be inter- ested in giving you $200 million of this in fiscal 1968. We might be interested in a significant fund. Most of us feel it will be a long term investment which will come back many times. Secretary WIRTZ. There is no question about authority. There is no question about objective. I think there is simply a question on money. Mr. GOODELL. The thing that concerns me here is this: As you know, sometimes you get buried digging through the center of the line but you can have an end run or a pass play which will bring you some results. Many of us are more than a little frustrated by the fact that we have felt you had the authority to do the job but the job has not been underway. Maybe we can help in some way. I am aware of some of the reasons, not under your control why it h'ts not been done I respect your srncerity in this matter to see it done Since we h'ive a meeting of the minds on this particular pomt, maybe we can devise a w'ty to get it undevway-eet it really working Secretary WIRTZ. In answer to your question whether there has been any cost-benefit analysis~ that is part of the problem, I think the honest answer is "No" We have to face up to the ouestion of whether under all the present circumst'tnces this amount of money PAGENO="0442" 1280 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 or larger amount of money ought to go into a computerization of the system or into some of these concentrated hard-core problems. Mr. SO~UER. Those are exactly the kinds of decisions for which cost-benefit analyses are indispensable for making an intelligent answer. Mr. G00DELL. Mr. Wirtz, you earlier affirmed your statement about spending money on war on poverty as rapidly as it can be responsibly spent, the billion and a half dollars in the OEO funded program at the time you made the statement and now you generally place it at the $2 billion level that we budgeted for this year. I am referring to the OEO poverty funds. Secretary WIRTz. I want to be sure there is not confution. In the $½ billion figure, are you referring to the previous Poverty Economic Opportunity Act program? The reason for my questioning is this. The $2.06 billion does not include the manpower development and training and it does not include the Federal-State employment service. Mr. GOODELL. You were not referring to the manpower program as such. You were referring to the poverty programs that are funded through OEO? Secretary WIRTZ. Yes. That is right. And I do so with that reserva- tion which is necessary, because my part in this program is a limited part. Mr~ GOODELL. I think you were questioned when I was out on a point which the staff says to them is not too clear. On page 11 you cite the fact that nearly 35 percent of your out-of-school neighborhood youth corps is working in full-time jobs. What proportion of that 35 per- cent is working in private profitma.king enterprises? Secretary WIRTZ. I will have to give you that for the record. We don't have it here. My understanding is that it is almost all of it. Mr. GOODELL. I would be interested in how many of those 35 per- cent according to your data are working for private profitmaking enterprises and how many are working for public and how many are working for private nonprofit. Have you have it broken down that way? Secretary WIRTZ. All right. (The information referred to follows:) The study which provides the 35% figure does not show how many are work- ing for private profit making enterprises and how many found jobs in the public sector. However, from data available on individual projects, discussions with sponsors and with our own field staff, we have estimated that approximately 28% are in private employment and 7% in public employment. Mr. GOODELL. Thank you, Mr. Chairman. Secretary WIRTZ. You will understand my not wanting to leave this part of the record unclear with respect to another point. That is simply that I don't want the record to show an implication, which is certainly not in your question, that that means that 65 percent aren't working because there is another group of 25 percent here whom we consider to be moving along. Mr. GOODELL. Yes, I note that you have 9 percent in school, 4 percent in training, et cetera. Secretary WIRTZ. That is correct. That is the study referred to in my prepared statement, which is inserted in the record. PAGENO="0443" ECONOMIC OPPORTIJNITY ACT AMENDMENTS OF 1967 1281 Chairman PERKINS. Do you have any questions, Mr. Quie? Mr. Qui~. I have one question. On April 14 Sargent Shriver wrote me and told me he was going to give the information. One of the things he said was, "Your request re- lating to the Neighborhood Youth Programs A, B, C, D, in Boston. New Jersey, Rhode Island, Cleveland Neighborhood Youth Corps I referred to Jack lEloward who will respond to your inquiry." As I recall you were going to send this to me but I don't recall ever receiving it. Secretary Wn~~z. Do you have Jack Howard's letter of May 18? Mr. QmE. Is that the one where he said he was going to make it available to me? Secretary WIRTZ. I believe so. Mr. Qtm~. Let me look this over. If there is anything additional I will come back to Mr. Howard. Chairman PERKINS. Mr. Secretary, all the members appreciate your coming. We feel that you have done an outstanding job. I think I am speaking for my minority colleagues trying to let them develop all the points in connection with the programs that they wanted to develop. We have a lot of new members. They want to probe into the various programs and it has taken a lot of time. Mr. 000DELL. Mr. Chairman, there is one point that I did not finish. I think we would like to have the record clarified as to the funding of the summer program. You said the $603 million total that I was talk- `ing about of the various combinations of programs sounded like the summer program. The breakdown I have shows in 1966 summer, a total of $599 million in these various programs, and for this coming summer, 1967, a total of $603 million. And then an additional $75 mil- lion was authorized for appropriations by Congress this spring for this summer. Is this an accurate figure? Secretary WIRTZ. I would have to check that figure. I just don't know. It is a figure with which I am only vaguely familiar. It includes a good deal which is outside the responsibility of the Department. Mr. GOODELL. Perhaps it would be more pertinent to ask Mr. Shriver that since it is all within his jurisdiction. Secretary WIRTZ. I think all of it is. A good deal of that is being handled through the Vice President's office. I don't know that figure well enough, Mr. Goodell, to be helpful whether it is all OEO or not. Mr. GOODELL. I think the significant point, from our viewpoint, is that if these figures are correct we have $79 million more money avail- able for this summer, 1967, than we had available for the summer of 1966. I think all of us would be interested in knowing if that is accurate. Secretary WIRTZ. I will arrange to have added at this point a state- ment with respect to those summer figures for both 1966 and 1967 indicating precisely that here. Would that be helpful? Mr. GOODELL. Yes. Thank you, Mr. Secretary. (The information requested follows:) PAGENO="0444" 1282 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 (Dollars to nearest million] 1967 1964 1965 1966 1967 (supple- mental) OEO: Adult worktraining Neighborhood Youth Corps Headstart 0 0 0 0 $73 85 0 $118 111 $20 143 110 $47 Upward Bound 0 3 25 27 CAP-Recreation, etc 0 2 20 20 28 Department of HEW: Title I, ESEA Title III, ESEA College work study Department of Labor-MDTA Federal employment Total - 0 0 (1) 0 (1) 0 0 19 22 236 2 25 30 32 157 9 32 50 35 0 204 599 603 75 Total, summer 1966 599 Total, summer 1967 Summer 1967, net increase 678 79 I Not available. Mr. QUIR. Mr. Chairman, on the ABCD Program in Boston you say the internal audit report at present is being reviewed and evalu- ated. Have you completed your review and evaluation of it? Mr. HOWARD. No, sir. Basically what we do is that we get a prehmi- nary or interim report on it. We take it back to the sponsors. Here are the suggestions. Just find out what can be done. This sponsor comes back with improvements, procedures, or adjustments. We then run the final audit and close the situation. We are in the' process now of backing and forwarding with ABOD to try to find out whether the preliminary comments are in fact valid. It is sort of like the first rough investigation. So, we do not have the final audit yet. I know our office in Boston has almost daily conversations. As you know there were general problems both in community action and with our programs in Boston. The fact remains as was stated in the letter of May 18 with regard to Boston. Mr. QurE. In other words, you would want to wait until the final aud~t was completed before we get any more detail on it. Secretary WIRTZ. I would be in favor I think of putting into the record at this point a full statement of that situation as of now, recognizing that it is incomplete. We know it has been one of our problems. We know there has been a complete change in leadership of it. I think the committee ought to have a statement of everything we know of as of now which we will be glad to give you. It has not been one of our happiest hours. Mr. Quul. As I said before I will talk to you about it because I don't want to put anything in the record that will be embarrassing but I would like to see what happened there. Secretary WIRTZ. We will arrange to have somebody come and talk to you about it and we will make a report to the chairman as to what seems advisable to put in the record. Mr. QmE. Thank you. Chairman PEI~INs. Mr. Secretary, I have a couple of questions. PAGENO="0445" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1283 First, let me compliment you on your patience and vigor, your endurance and your helpful contributions which you have made to this committee is work by your testimony. I am quite mindful of all the programs and the good work that is flowing from all the programs under the Economic Opportunity Act, but I am still concerned about a group of individuals that prefer not to be on relief, chiefly in mining communities. They do not want to go back on relief. There is nothing in many of these communities for these families. I am speaking about the hard core 45 years of age that because of age discrimination and so forth no employer is readily willing to hire. I am wondering if you planned under the Nelson. and Scheuer pro- grams to pick up this type of individual that has really been over- looked until this poverty program came along. We haye not gotten all of them that should be receiving some kind of training. Even though they are not likely to be gainfully employed by a private employer I am wondering if your planning takes into consideration programs to give this type of individual a program that will let him work instead of being on relief. Do we have sufficient funds t.o do that under the programs that are now in existence or is it going to take further expansion? 1 secretary WIRTZ. I think it will eventually be a larger program. I don't know how much larger. I think we are improving our under- standing of that situation. I find the situation this year much better than it was a year ago. I know the need is not yet fully met. I know that there are additional programs to be developed, additional under- standing to be gained. I have to say to you that I think at the present point there is provision in terms of dollars about the maximum useful- ness that we can put iton an assured responsibility basis. I know that if we had more money we would spend it but I can't say to you how wisely or well we can spend it beyond the present rate. We know the situation you are talking about. We have been greatly helped by your advice from time to time about the section of the country which presents this problem in perhaps its most acute form. it is in our thinking all the time. I think we are reasonably well equipped to meet it. I can't say more than that. Chairman PERKINS. I certainly am wholeheartedly in support of all your training programs because you are doing a great job, even in my area. We have so many applicants that should be gainfully em- ployed but the -funds are not available under all these programs to reach them. I would like to see further expansion personally in that area. I know we are handicapped about funds. I know you are doing a great job; doing more than any other Secretary in the history of the country in my judgment, about getting people employed throughout the Nation. I certainly want to cooperate as much as I can to see that we do something about this hard core because it is a problem that gives me great anxiety. I think you have strengthened the case. I have given our oppor- tunity crusade members all the opportunity that they needed today to interrogate the witness and I will continue to do that. I think we are PAGENO="0446" 1284 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 building a stronger case as we go along that this program, the Eco- nomic Opportunity Act, should be kept as is. I thank you again for your appearance. If it is necessary to call you back, I know you will be ready. Secretary WIRTZ. I could improve on what you said to this extent. You have been more than gracious in your comments on the Depart- ment's administration of this program. You will know that there are at this table, in this room, back at the office, people who have done a good deal more on it than I have. If it is all right with you, I would like to add my expression of appreciation to yours. Chairman PERKINS. I want to add my expression of appreciation to all themembers around the table. I know the great work and great contributions they have made. I would commend Jack Howard for an outstanding job of administration. We all know that the Director has zeroed in on certain target areas in this country and is doing a great job. I would like to see us go further with this program and not tear it down. Secretary WIRTZ. Thank you very much, Mr. Chairman. (Whereupon, at 4:50 p.m. the committee recessed to reconvene at 9:45 a.m., Friday, June 23, 1967.) PAGENO="0447" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 FRIDAY, JUNE 23, 1967 HOUSE OF REPRESENTATIVES, COMMITTEE ON EDUCATION AND LABOR, Washington, D.C. The committee met at 10:25 a.m., pursuant to recess, in room 2175,. Rayburn House Office Building, Hon. Carl D. Perkins (chairman of' the committee) presiding. Present: Representatives Perkins, Quie, Goodell, and Dellenback. Also present: H. D. Reed, Jr., general counsel; Robert E. McCord, senior specialist; Louise Maxienne Dargans, research assistant; Ben- jamin F. Reeves, editor of committee publications; Austin Sullivan,, investigator; Marian Wyman, special assistant to the chairman; Charles WI. Radcliffe, minority counsel for education; John R. Buck- ley, chief minority investigator, and W. Phillips Rockefeller, minority' research specialist. Chairman PERKINS. The committee will come to order. A quorum is present. Before we get started this morning, I have a letter before me from the Secretary of Health, Education, and Welfare, the Honorable John W. Gardner, which I will read into the record at this time. DEAR Mn. CHAIRMAN: I am sorry that my absence from Washington Prevents. me from testifying before your Committee on the Economic Opportunity Amend-.. ments. Mr. Lisle C. Carter, Jr., Assistant Secretary for Individual and Family' Services, will speak for the Department, but I would like to add my personal word of strong support for the Administration bill (H.R. 8311'). Though they began only a few years ago, the programs in the war on poverty have become .an indispensable part of our nation's efforts to break the cycle of poverty and to reduce dependence. Without the leadership of the Office of Eco- nomic Opportunity, these programs would not be the strong force for social' progress that they are today. This leadership must continue if we are to concen- trate our efforts on the poor as the Congress has intended and as we have done in the past.' The Economic Opportunity Amendments of 1967 represent a series of carefully conceived proposals aimed at strengthening the programs under the Economic Opportunity Act. I strongly urge your support for the amendments. Sincerely, JOHN W. GARDNER, 1S~ecretary. We have with us this morning Mr. Lisle C. `Carter, Jr., Assistant. Secretary for Individual and Family Services, who will represent the Secretary. He is accompanied by Mr. Donald Slater, Deputy Assistant Secretary for Community Development; Mrs. Barbara Coughian, Act- ing Assistant Commissioner for Social Services and Financial Assist- ance; and Dr. Nolan Estes, Associate Commissioner of Elementary' and Secondary Education. 1285 PAGENO="0448" 1286 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 l~\Te welcome all of you this morning. I presume that Mr. Carter will prefer to read his statement. Do you prefer to read your statement? STATEMENT OF HON. LISLE C. CARTER, 3R., ASSISTANT SECRE- TARY FOR INDIVIDUAL AND FAMILY SERVICES, U.S. DEPART- MENT OP HEALTH, EDUCATION, AN]) WELFARE, ACCOMPANIED BY DONALD SLATER, DEPUTY ASSISTANT SECRETARY FOR COM- MUNITY DEVELOPMENT; MRS. BARBARA COUGHLAN, ACTING ASSISTANT COMMISSIONER FOR SOCIAL SERVICES AND FINAN- CIAL ASSISTANCE; AND DR. NOLAN ESTES, ASSOCIATE COMMIS- SIONER OF ELEMENTARY AND SECONDARY EDUCATION; AND ANDREW TRUELSON Mr. CARTER. Yes, sir. Chairman PERKINS. Go ahead, Mr. Carter. Mr. CARTER. Mr. Chairman and members of the committee, I am pleased to appear before your committee to discuss H.R. 8311, the Economic Opportunity Amendments of 1967. The Economic Opportunity Program stands out as one of the major achievements of this administration. In three brief years, with a con- gressional mandate, the Office of Economic Opportunity has compiled a record of significant achievement on behalf of people and comnnrni- ties who do not share in the Nation's general affluence. This committee has been instrumental in shaping its capabilities and accomplishments during this time and can fully appreciate its contributions, both with respect to expanded resources and newly developed techniques in do- mestic programs. The Office of Economic Opportunity has initiated and stimulated action on social problems and issues in communities across the country. I think it is abundantly clear that support of such innovations as com- munity action agencies, neighborhood centers for health and social services, Headstart programs, the Neighborhood Youth Corps, VISTA, and the like have dramatically improved the quality and character of community life. These are new and invaluable tools that we could not depend upon in the past simply because they did not exist. Some of these measures are especially significant for their contribu- tion to educating people as to their rights and responsibilities. VIISTA, for example. has demonstrated what dedicated volunteers can do in such diverse settings as isolated migrant camps and inner- city slums. Volunteers show people how to take advantage of new or newly discovered opportunities. Aside from the poor-the most im- portant beneficiaries of VISTA-many programs in social services, education, employment, and health have also been enriched by the competence and dedication of volunteers' work. OEO is also responsible for the spread of legal services for the poor, services they badly need and cannot ordinarily afford. These services have helped poor people deal with public agencies and the society around them with new knowledge, confidence, and dignity. The poverty program has helped to shape the course this Nation has chosen to follow in dealing with some of our toughest problems- PAGENO="0449" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1287 in education, in training for work, in urban and rural areas. The purpose and direction it provides to communities and individuals is inspiring in them hope and confidence in their ability to achieve the best this society has to offer. The Department of Health, Education, and Welfare is deeply interested in this legislation. Not only have we been delegated respon- sibility for carrying out certain aspects, of the legislation, our ongoing programs and activities have benefited from the innovations developed under OEO's leadership. For, while the primary purpose of the Office of Economic Opportunity is to improve service and programs for the poor and to provide a clear focus on their particular needs, much of what the poverty program has learned with respect to delivering services and involving people to act in their own interest, for example, has broad application for the enrichment of the rest of our society as well. It is essential that the Office of Economic Opportunity maintain its integrity and identity if the problems of poverty-which are still very much with us-are to receive the undivided attention they require. While a variety of agencies deal with the subject matter of many OEO programs, particularly the Department of Health, Edu- cation, and `Welfare, none focuses so directly on the needs of the poor and none has OEO's unique experience as a testing ground for new and imaginative concepts to serve individuals and groups of citizens. Both of these functions are of great importance if Government is to deal successfully with poverty and to test out concepts that may make sigrnficant progress toward meeting our social needs in a wide number of areas. I want to express, therefore, HEW's strong support of Mr. Shriver's statement before this committee. Now, I would like to discuss briefly, specific responsibilities that the Department of Health, Education, and Welf are has undertaken either by delegation from or other arrangements with OEO. Title V-the work experience and training program of title V of the Economic Opportunity Act was delegated by the Office of Eco- nomic Opportunity to the Department of Health, Education, and Welfare. Through this program operated by the Welfare Administrá- tion, funds are provided for projects designed to enhance the employ- ability of needy persons who otherwise would not have the opportunity for constructive work experience and other needed training. Work experience and training is combined with the provision of social serv- ices. Most of those in the program are, in addition to being under- educated, often functionally illiterate, with few, if any, marketable skills, are also heads of needy families with a range of problems asso- ciated with the extremes of economic, social, and educational deprivation. Social services, including family support, medical care, child care, homemaker services, and counseling, are made available to assist such persons in overcoming serious and longstanding personal and family problems that interfere with their efforts to become self-supporting and independent. To date, about 160,000 persons have participated in the program; of these, a conservatively estimated 52 percent has met the program's SO-0S4-GT-pt. 2-29 PAGENO="0450" 1288 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 objective of improved employability, as exhibited by their move on to jobs or more advanced training. Considering the handicaps and limi- tations of. the group involved, we regard this record as one of more than passing marks. The program has been quite successful in reaching its target group of nonaged, adult poor who are heads of families. It is worth noting that approximately 38 percent of the 66,000 enrollees in December 1966 were nonwhite; and that in keeping with the urban-rural distri- bution of the poor population, some 60 percent of all funded training spaces are in urban areas and 40 percent in rural areas. Between December 1964 and October 1966, more than $41 million in title V funds went into projects in the 182 poorest counties of the Nation. The 1966 Economic Opportunity Amendments provide for trans- ferring substantial responsibility for the administration of title V to the Department of Labor, particularly in the areas of testing, employ- ment and counseling services, work experience, on-the-job training, job development, and, where necessary, relocation assistance. Projects that come up for renewal will be jointly reviewed by HEW and Labor; those that are operating efficiently and economically will con- tinue to be operated on the present basis through HEW. Specific re- sponsibility for income maintenance and other supportive services to trainees will continue to rest with HEW. Based on our experience with the variety of individual needs that directly affect a person's ability to become employable, title V funds for the coming fiscal year have been allocated as follows: 50 percent for income maintenance; 30 percent for work experience and voca- tional instruction; and 20 percent for work-connected expenses, basic education, child care and medical and social services. To implement the 1966 amendments, representatives from HEW and Labor have been meeting regularly to develop policies a.nd pro- cedüres in the areas of policy and program development, project re- view; and project organization, staffing, and financing. The mutual understandings reached at these meetings will be used in preparing the "interim" Federal policies to be issued this month. The valuable lessons learned from the Work Experience and Train- ing program will be built into the Community Work and Training program. The administartion has proposed amendments to the Social Security Act which would develop the Community Work and Train- ing program along the lines of the Work Experience and Training pro- gram and permit a gradual phasing out of the title V program. Chairman PERKiNS. Before you leave the matter of the Work Ex- perience and Training program, the last statement that you made, "The administration has proposed amendments to the Social Security Act which would develop the Community Work and Training pro- gram along the lines of the Work Experience and Training program and permit a gradual phasing out of the title V program," do you mean that you are going to transfer for all intents and purposes the title V operations as they are presently operated to social security under the name of Community Work Training programs? And will that program be administered by HEW? Mr. CARTER. Yes, sir; it will be basically the same kind of rdation- ship with the Department of Labor with respect to the provision of work experience and training. PAGENO="0451" ECONOMIC OPPORTUNITy ACT AMENDMENTS OF 1967 1289 Chairman. PERKINS. How long do you contemplate that is going to take place, over what period of time do you think you will phase out title V as presently administered and put it under Community Work and Training program under the Social Security Act? Will it take a few years to phase it out? Mr. CARTER. It may take a few years. Chairman PERKINS. It is not going to be as abrupt thing? Mr. CARTER. We do not contemplate it as an immediate thing, neces- sarily, because there are some problems where States have differential policies with respect particularly to the Unemployed Parent program. Chairman PERKINS. It will not be an abrupt change in administra- tion? It will remain and be administered; even though the amendment is agreed to and approved by the House Committee on Ways and Means and the Congress, there will be no abrupt change in adminis- tration? Mr. CARTER. There will not be an immediate èhange. I think we have to consider each case in the overall situation and proposing how to move forward from that. We would want to look toward the phas- ing out of title V as the Community Work and Training is. able to build up. Chairman PERKINS. Do you have any supplemental statement on that, Mrs. Coughlan? Mrs. COUGHLAN. No. * Chairman PERKINS. Mr. Quie? Mr. QUIE. Last year you know there were su~i~tantial amendments to title V of the Economic Opportunity Act. As far as I know, the De- partment of Labor has not implemented the transfer, authority that Was incorporated in those amendments. There has been a great deal of di'tlog with you, but it has not actually been implemented, ~s to their iehtions ~nd how they will function in their new iole `ts the amendments provide. Is that right? Mi CARTER As I said in my statement, we are on the veige of issu ing policies jointly agieed to, b'ised on discussions The piogram is supposed to go into effect. on the 1st. of July. Any actiOii on projects after the 1st of July would be under the new program. What they h'~ve been doing jointly with the Welfai e Adrnmisti `i tion is re'.iew of existing piojects to determine how they will be c'u- ned on. Some will continue to be run altogether by HEW, some will be run by HE~iV with some supplementation by Labor, and some will go fully effective with the Labor taking over the kinds of component activities that I have described in my statement. Mr. QUIB. Will there be any change in the role of Labor in the new amendments proposed by the administration for the phase out of title V as compared to the language adopted in last year's act? Mr. CARTER. The role is fundamentally the same. Mr. QUIE. Do we have a copy of the proposed change in title V? Chairman Prniciws. We do not. All I have is a statement that is made here. You and I know that the language was in time confereuce report last year. But I am uncertain at this point to know whether any agreements have been reached that would have the effect of cut- ting off people tha.t are working under the Work Experience and Training program under title V and would interfere-in other words, would cut them off. PAGENO="0452" 1290 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Have any agreements been made along that line by HEW with Labor that would deprive the people under title V of continuing to work after July 1, the commencement of the new fiscal year? Mr. CARTER. No, sir; no agreements have been reached to change the program in that respect. The point I want to make is that we have $70 million in the program. Chairman PERKINS. Are there any changes in the program contem- plated that are on the way, would they displace workers now involved under title V of the Work Experience and Training program coin- mencing July 1? Mr. CARTER. I will let Mrs. Coughian supplement my answer. The only thing that is playing is that we have $70 million in the budget this year as opposed to in the neighborhood of a hundred million dol- lars last year. So, some projects will be phased out this year. We are in the process of identifying which projects they will be. I will ask Mrs. Coughlan to supplement it. Chairman PERKINS. Mrs. Coughlan? `Mrs. COUGHTJAN. I think, Mr. Chairman, maybe you are referring to the possibility that the criteria for selection of participants in the program might be changed after July 1. Because there was mention in the 1966 amendments that projects with high training potential would have priority. We have reached agreement with the Department of Labor that substantially the same group of participants will be servedafter July 1 as have been in the past. This is in accordance with the intent of the committee, as we readthe report. The way of interpretation of a high training potential has been made is that this is the way a project should be structured in order to permit upward mobility in training for participants, but not to keep out those who perhaps in the begining appear not to be employable. Chairman PERKINS. Now we have so many in my area that it is very evident to me that they are not considered employable by most employers because of age and because of their lack of basic education and training. As you know, many of them were automated out of their jobs in the coal mines and that is all those people knew-how to mine coal. These people prefer to work and try to obtain some useful work and training, even though the employers don't want them. Ford Motor Co., as you know, came into the area and recruiting and screening persons for employment and placed maybe 200 or 300, but they took mostly young people. In other words, they took the easiest to train. Even though there were many elderly people who would have liked to go with Ford, because of their age and educational background they were not wanted. Now I am talking about this particular group, the hard core, whether useful work experience and training programs, whether it be a cleanup job or beautifying the area, or any of those programs- it is not just leaf raking-where the Government can wisely expend funds and they will he expended for good purposes-has training of this type and programs of this type been thought out and planned by HEW for this type of individual? Will you address yourself to that point? Mrs. C0UGHLAN. It is definitely' the intent to continue to serve that group after ~July 1. There is not to be any change in the criteria for selection of trainees after July 1. PAGENO="0453" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967. 1291 I think that it should be pointed out that despite the characteristics you pointed out of the people in eastern Kentucky, under the title V project that some 32 percent of those who have terminated have gone into employment, and a number of them were placed with private employers for on-the-job training and' they result in employment. And we also have a labor mobility demonstration project there where the people are being moved from the eastern Kentucky ~unties into other part.s of Kentucky and nearby States, and finding employment at very good wages. Chairman PERKINs. Now there is another question that I have on the way you can judge a program aside from your, own personal investigation. Since there have been a lot of transfers to the Nelson- Scheuer type of program, from MDTA, from work and experience, is it contemplated . that these people will receive food stamps-I am talking about the real hard core-and medical.services? Who makes that determination? Mrs. COIJOHLAN. That determination is made, by the State depart- ment of economic security. It is' my understanding that the title V trainees who were transferred to Nelson-Scheuer will receive food stamps. I believe there is some discussion about their eligibility for the medical benefits under title 19. But if it would seem that they are still unemployed parents, that they would remain eligible for medical benefits. Chairman PERKINS. Would that be left up to the State departments to make that determination for medical services under title 19? Mrs. COUGIiLAN. Yes; it would be made by them, although some interpretation of the nature of the Nelson-Scheuer program might be made to definitely establish that these men are not employed but in training just as they were under the title V program, and therefore you would assume that their eligibility would continue for medical services. Chairman PERKINS. Do you have any further questions at this point? Mr. QUIE. Yes, I would like to ask this question. On page 7 you mention 50 percent of the money will go for main- tenance, which will be your responsibility, Welfare's responsibility. Mr. CARTER. Yes. . ,` Mr. QtTIE. Thirty percent will be work experience and vocational training, which will be all Labor's responsibility, is that right? Mr. CARTER. Yes. ` Mr. QUIE. And 20 percent for work-connected expense, basic edu- cation, child care, medical, and social services. I mean the child care medical and social services will be your responsibility. Whose respoii- sibility will be basic education and work-connected expenses? Mr. CARTER. I will ask Mrs. Coughlan to supplement this, but I want to make clear that the category of income'maintenance, of course, is being provided by the Welfare Administration. As I attempted to outline in an earlier answer to the chairman, some of the work expe- iience and instruction will be continued to be c'~rried on `i ioi~tly determined basis between Labor and HEW, some of those' pi~ojects. So that will mean that some of the 20 percent for work-conn~cted expenses will fall in that category. . PAGENO="0454" 1292 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Do you want to supplement this? Mrs. COUGHLAN. Adult basic and child care would remain with HEW. Mr. QtTIE. What about the so-called work-connected expenses? Are they the ones that Labor would undoubtedly pickup? Mr. COtTGHLAN. No, they would not. That is connected to the main- tenance payment primarily. There is an increase to the payment for work-connected expenses. Mr. CARTER. Travel and work clothes, and the like. Chairman PERKINS. It includes schools and things of that nature? Mr. COUGHLAN. Yes. The tools might be provided through the project, itself, or tools might be made available to the individual trainee; yes. Mr. QUIE. Under the amendments proposed this year, will the basic responsibility for work experience that had been the title V program be with Welfare rather than the Department of Labor, or will the basic responsibility be with Labor? Mr. CARTER. The basic responsibility remains with the Welfare Administration by delegation from the Office of Economic Oppor- tunity. Mr. QUTE. Will the 30 percent of the money for work experience be Labor's money, or will it be your money which will be delegated, the responsibility delegated? Mr. CARTER. I want to reemphasize, Mr. Quie, that only part of the 30 percent will be utilized by Labor. It will depend on a project-by- project basis where the Labor Department is providing the work ex- perience and training. That money, based on estimates, will be trans- ferred from time to time to the Department of Labor in the advances of other forms of transfer. Chairman PERKINS. If that be the case, you are not going to have the $70 million to spend. If you are going to transfer part of this $70 million to Labor under the work experience and training program, you are going to have considerably less than $70 million to spend, if that is the case, if you are going to transfer part of that to Labor. Mr. CARTER. But that transfer is being made to carry out functions which have heretofore been carried out by HEW. So, it is just a question of who is spending the money on any given project. It does not lessen the amount of money that is available for that project. Mr. GOODELL. Will thegentleman yield on that point? Chairman PERKINS. Yes. Mr. GOODELL. Are you talking about your agreement with the Labor Department under present law, or are you talking about the proposal that is pending now in the Ways and Means Committee as a part of the social security bill? Mr. CARTER. The testimony relates to the relation between HEW and Labor under title V of the Economic Opportunity Act. Mr. GOODELL. The present law? Mr. CARTER. Yes. Mr. GOODELL. And the agreement that you negotiated with the Labor Department? Mr. CARTER. That is right. Mr. GOODELL. I think Mr. Quie was referring to the proposal of the administration that is now pending as part of the social security PAGENO="0455" ECONOMIC OPPORTUNiTY ACT AMENDMENTS OF* 1967 1293 law to transfer work experience into the social security law. Is it not part of the proposal, to transfer responsibility to the Labor Depart- ment under this program? Mr. CARTER. No. There are people here from the Welfare Adminis- tration that can explain this more clearly than I, but this is still money that is appropriated to HEW in the public assistance program and transfers are- Mr. GOODELL. What would the proposal now pending in the social security bill before the Ways and Means Committee do to the present situation? Chairman PERKINS. Mr. Truelson, can you answer that question? Mr. TRUELSON. H.R. 5710, which is in the Ways and Means Com- mittee, proposes that the community work and training program will be modified to authorize the Secretary of Labor to provide work and training programs for individuals over the age of 16 who are receiv- ing AFDC, will provide programs to be operated by the States, if the Secretary of Labor did not operate a program, found it impracticable to do so throughout a State. Project grants will be available to persons, in need who do not meet other State requirements for AFDC. Par- ticipation will be available for cost and supervision. Training centers limited to $20 per week paid by the Secretary of Labor could be provided and disregarded in determining the amount of assistance payable to a family. Plans for aid to dependent children would have to include provisions for referal for all appropriate in- dividuals who have attained age 16 the programs existing areas in which such individuals live. There is a provision that the Department of Health, Education, and Welfare transfer funds tO the Secretary of Labor' to meet the cost of programs authorized by him or his delegate. This is section 204 of H.R. 5710 in the Ways and Means Committee. Mr. GOODELL. I interpret the Administration's proposal as. an at- tempt to take jurisdiction of the work experience program, title V, away from this committee. That was not included, as I understand, as ~part of the poverty bill this year; it was put in as part of `the social security bill and therefore is pending in Ways and Means. Is this not correct? Mr. CARTER. May I speak to that, please? Mr. GOODELL. Yes. Mr. CARTER. There has always been, since 1962, in fact, a provision for community work and training in the Social Security Act. This antedated the povery program that was enacted in 1964. This is an optional program with the States. It had certain disabilities in that it did not pay for supervision costs, did not authorize matching certain costs and provision of materials, and the like. Only a limited number of States found it profitable to embark on that~ program. This was passed at the same time when the unemployed parent authorization was passed, which offered the State that opportunity as well. In 1964 one of the parts of the Economic Opportunity Act, so- called title V, was enacted under authority from this committee, but the committee amended the Social Security Act in effect in order to permit the title V type of program to be carried on. And specifically amended the demonstration part of the act to allow for flexibility in PAGENO="0456" 1294 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 trying out new ways of making public assistance persons self-depend- ent. That is what has been going on for the last few years. Now what the administration is trying to do, sir, is to take the best that they have learned under title V and build it in, which was a demonstration by definition, and build it into the ongoing social se- curity public assistance program. Mr. GOODELL. Then the answer to my question is yes? Mr. CARTER. The question, as I understood it, sir, was that we were attemptmg in some fashion to oust this committee from jurisdiction with respect to this matter. I was trying to explain what in fact was being undertaken. Mr. GOODELL. Whether you say "oust"-you are being overly defen- sive about it-what I want to know is whether you have anything in this bill with reference to the extension of title V work and experience program? Mr. CARTER. The answer is "Yes," there is an extension in the pend- ing 8311 for extension of title V. Mr. GOODELL. So, you are not proposing full transfer of title V over into the Ways and Means under the social security bill? Mr. CARTER. No. In my testimony I said we looked forward to the phasing out of the title V program as the program was built up. Mr. GOODELL. Where in the bill do you propose the extension? Will somebody check it out? Mr. TRUELSON. There is an authorization for $70 million for title V. Chairman PERKINS. Where is that in the bill? I want to raise the same question, because I have been through the bill and I have over- looked it if it is in there. Mr. CARTER. We will attempt to identify it. Mr. QUIE. While you are looking for it, you talk in you testimony about the cooperation between HEW and Labor, but you don't men- tion anything about OEO. What relation does OEO have with you in the operation of your title V program? Mr. CARTER. OEO, to begin with, approves all of the overall guide- lines-this operates as a delegated program. OEO approves all of the regulations and guidelines that are put into effect under this delegated program as any other. It controls the budget of the program, pays over the money, authorizes paying over money from time to time. It. evaluates the project and makes recommendations on the basis of that. We work with OEO to see the extent to which our activities can be coordinated with other local antipoverty programs. Referring under authorization of appropriation, on page 2 of the bill. 8311, line 7. Mr. QUIE. In other wOrds, the authorization for title V to be carried on except for the money, so we have money in this bill? Mr. CARTER. As I understand it, Mr. Congressman, there are a group of amendments. The only thing it was felt necessary to spell out were those parts of the Economic Opportunity Aèt which you propose to amend substantively. Otherwise, all that. was required for title V wa~ an extension of authorization. Mr. GoonEr;r~. Just to clarify that point, the only reference to title V in the bill, I understand, is on page 2, line 7. in which we authorize the ~70 million for the purpose of carrying out title V. Mr. CARTER. That is correct. PAGENO="0457" ECONOMIC OPPORTTJN1TY ACT AMENDMENTS OF 1967 1295 Mr. GOODELL. But in the bill that is pending, the social security bill before Ways and Means, there are specific provisions for changing the title V program? Mr. CARTER. There are no provisions in the social security bill for changing title V. There are provisions in the social security bill for changing section 409 of the Social Security Act, which is the com- munity work and training program. Mr. 000DELL. We are going to have to get this clarified because it was advertised that you were transferring the title V program over into the social security law and that you were going to transfer jurisdiction of this program completely to the Labor Department. From what you say, you do not believe this is true. Mr. CARTER. I will be delighted to clarify it if I understand the issues that are troubling you, Mr. Congressman. I will do my best either in person or in writing to clarify it. Mr. 000DELL. It is that simple. You are transferring title V pro- grams into the social security law and transferring the jurisdiction over to the Department of Labor. Mr. CARTER. All I can say is that that is not what either title V provides or section 409 as the proposed amendment provides. Mr. Truelson has read to you from the fact sheet which in effect states what we propose in the social security amendment. We will be happy to supply the section of our amendments, the section-by-section analy- sis. and any other information you want for the committee. Mr. QtnE. Mr. Carter, I think part of this can be cleaned up by the language in section 504, title V, Economic Opportunity Act, where it says "The Director shall carry out the programs provided in this title during the fiscal year ending June 30, 1967, and the 3 succeeding fiscal years. For each such fiscal year only such sums may be appropriated as the Congress may authorize by law." As I understand, H.R. 8311 authorizes the money for the program that has already been authorized for not only the year ending June 30, 1968, which is ahead of us, but for 2 more fiscal years beyond that. And, therefore, that is all the language that is necessary in 8311 to get the job done. Mr. CARTER. That is correct. Mr. QUTE. But title V will remain in the Economic Opportunity Act for some time. You are asking for $70 million for title V. How much money will be asked for in section 409 of H.R. 5710? Mr. CARTER. My recollection is that there is approximately $30 mil- lion in the budget. Mi TRUELSON $20 million Mr. QrriE. We are talking then about a $90 million program either in title V or comparable to it, in section 409. Now how long a period of time do you plan to take to phase from title V into section 409? Mr. CARTER. I think it is difficult to answer that question until we can begin to identify the capacity of the States to pick up the program under section 409 as amended, assuming that the Congress enacts such amendments. Mr. QUIE. But you must have some idea. Mr. CARTER. We would certainly think that we could do it within the period authorized, of the present authorization. PAGENO="0458" 1296 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. QUIE. So that by June 30, 1970, title V will be completely phased out and there is no necessity to extend it? Mr. CARTER. That is the present judgment. That is the best I can say. Mr. QUIE. Then you would no longer need OEO to look over your shoulder as you have evidently needed it today? Mr. CARTER. I would certainly hope that the Office of Economic Opportunity would continue to exercise the same kind of interest in the title V or community work and training program that it does in the delegated programs. The Office of Economic Opportunity attempts to look at the whole range of poverty and not simply the programs that happen to be in its administration. As they are able to build them successfully into administration by other ongoing programs, this does not in any way detract from the importance that OEO has and the responsibility to report to the President, the Congress, and also to use its various au- thorities under the act to make sure that the funds that are being spent for poverty are- Mr. QUIE. The $70 million, OEO does have some leverage or muscle because it delegates the money to you. Mr. CARTER. Right. Mr. QUIE. If you don't. operate the way it sees fit, you don't get the money. Isn't it that simple, in title V? Mr. CARTER. I think that is stating it rather broad, but there is no question that the money flows through OEO and they do have budge- tary control. Mr. Qum. The $40 million in section 409, the OEO has no juris- diction, and if there is disagreement in the way the money is spent, it will have no voice? Mr. CARTER. I would not say it has no voice. I have tried to indicate that OEO has a. role that goes beyond the program. Mr~ Quin. If you agree with the role? Mr. CARTER. Well, it has a role within the administration. We are all responsible to the President of the United States, as far as the ad- ministration of the executive branch. Mr. Quu~. That is kind of far-fetched, though. In every program run by HEW, the President has the responsibility. But what other programs in HEW does OEO actually exercise the same kind of~ responsibility and jurisdiction that it does through its delegated programs? Mr. CARTER. I am not suggesting it is the same kind. I am trying to make clear it is a different relationship. OEO has the responsibility to look at the whole range of poverty in the United States and what is being done through existing Federal programs, as well as other pro- grams, to bring about the elimination of that poverty. That is the kind of role that we need for an agency in the administration to play. Mr. QULE. How did you play that. role in other activities in title IT? Mr. CARTER. I would say, for example, that one of the things I will be coming to testify about in the field of neighborhood health centers. here is an effort to- `Mr. Qura. Neighborhood health centers are Community Action pro- grams run by OEO. Mr. CARTER. I am attempting to answer your question. PAGENO="0459" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1297 Mr. QUIE. I was asking a question about programs that were not funded or delegated by OEO. Mr. CARTER. I am giving you an example. I will get to that, if you will give me an opportunity. Mr. Quin. All right. Mr. CARTER. The neighborhood health center is fundamentally a mechanism for the delivery of health services. Now we have a number of programs in HEW which provide support for health services. We have crippled children's programs, maternity infant care, youth proj- ect, title 19, and so on and on. The ithportant thing though is to see that these programs get to the people for whom they are intended and somebody concentrates on that problem, of how do we get the services to the people who need them most. Now OEO has come to HEW and we have worked out with them an agreement between the Secretary of HEW and the Director of the Office of Economic Opportunity, which provides for our making a maximum effort to help put our money and program, integrate them with the health services in the center. They are playing a definite role there in terms of delivering services to the poor and assuring that the poor get the kind of help they need even though they have no control over the programs I have mentioned. Mr. QtJIE. They do have control over the neighborhood health centers. Mr. CARTER. They have control over neighborhood health centers, but we are talking about providing the kind of health support for a comprehensive health program. They would not be able with the funds available from the neighborhood health center to support it by them- selves, in addition to which it is obviously most desirable to get all of the various kinds of programs into this kind of mechanism that it is possible. Mr. Quii~. Do you feel that all of. the programs that HEW is in- volved in to help people come out of poverty are more extensive than OEO is involved in and amount of money?. Mr. CARTER. So far as the amount of money. Mr. QUJE. Do you feel that OEO ought to move in and give that same kind, assume the primary responsibility over those programs? Mr. CARTER. I interpret this, anything I have said as far as the kind of relationship between OEO and HEW on health services, as assum- ing the primary responsibility. What they are assuming the primary responsibility for is identifying the particular problems we have in meeting the needs of the poor and. then trying to devise the mecha- nisms through which those needs can be better met, and then seeking the participation of other Federal programs in meeting those needs.' I think in the regard I have mentioned they have played this role adequately; I think they need to continue to play it. Mr. QuiR. Does Welfare have other responsibilities than helping the poor? Mr. `CARTER. When you say "Welfare," do you mean the Welfare Administration? * Mr. QUIB. Yes, that is right. * * Mr. `CARTER. Yes, they do. Mr. QUTE. What is the other role it plays than helping the poor? PAGENO="0460" 1298 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. CARTER. I will be glad to let Mrs. Coughian talk to that, but the Children's Bureau is not solely just for the poor, for example. This is certainly an important part of the Welfare Administration. Chairman PERKINS. Go ahead, Mrs. Coughian. Mrs. COUGHLAN. Certainly child welfare services are available with- out regard to any financial eligibility. I think that is perhaps the major function that we carry. Mr. QUIE. You mean that is the only program for the nonpoor? Mrs. C0UGHLAN. No. There are a number of other services in the area of community organization, community planning, neighborhood service centers that we are involved in now, where we feel that public welfare takes the leadership in developing new resources and services in the community to meet needs beyond those of the actual poor. There is a preventive role actually in the Welfare Administration's program. dllairn]an PERKINS. Does Public Health Service want t.o address itself to this point ? Mr. QUJE. I know that the Public Health Service has a role outside of poverty, but it is surely news to me that the welfare department operates not primarily for the help of the poor but for the rest of the people. As I understand, at least if there is any agency in the Federal Gov- eminent, other than OEO, who has primary responsibility for the poor, it is being helped by the welfare agency; their purpose is to help the poor, I understand. Mr. CARTER. Let me say, I was trying to be responsive when you asked did they have any other responsibility. There is no question that the primary role of the welfare program is to help the poor, but this is overwhelmingly in the income maintenance field. The bulk of the money, as you know, a very large Federal contribution, goes to income maintenance. That is, goes to the public assistance programs in the categories in which we support health. Of course, we have additional funds that go to the medical assistance to the medically indigent, as well, who are not always-depending on the way the State determines it-those people are not necessarily poor, by the way, the medically indigent are not necessarily poor. Mr. QUIE. The medically indigent are not necessarily poor? They are not necessarily poor based on old-age assistance? Mr. CARTER. They are poor based on the base line we are talking of roughly $3,000 for a family of four. They are not necessarily in- digent. I am only trying to point out. Chairman PERKINS. I think at that point you ought to make clear that the indigent receive medical assistance. They are certainly in a different category from the social security retired, regardless of their income. who are eligible for medical assistance. Mr. CARTER. That is true. I was only talking about the programs run by the Welf are Administration. I agree with you. Mr. QUIE. The word "indigent" is synonymous with poverty. Let us get on to another question. Since the primary responsibility of both OEO and the welfare agency is to people in poverty, why is it that you need OEO to look over your shoulder to see that you do an adequate job? As I understand your plea here, it is to continue OEO. PAGENO="0461" ECONOMIC OPPORTIJNITY ACT AMENDMENTS OF 1967 1299 Mr. CART1~n. That is right. The OEO~, 1. want to repeat the princi- pal role of the Welfai e Admimstra~ ion is in the provis on of funds for people who are financially really at the lowest economic rung. Of the 30 million~odd that are identified as poor, only 8 million people are supported; under the public assistance programs. In addition, there are many people who are working every day, a very significant pro- portion of the poor, who are poor, are working every day, but simply cannot earn enough money to live, nonetheless. And this i~ `~ condition th~~t h'is existed foi years This is nothing new. Now OEO was called into existence because we recognized that we have this problem despite our growing prosperity, in spite of our failing unemployment rate we have this continuing problem of pov- erty. We need to seek new answers and find new ways of addressing it. There are many programs that make a contribution to doing some- thing about poverty. But we need an agency that has the flexibility and the mandate to test out and search for new ways of getting at the problem, not that it is going to run everything itself. That would be like saying that because there are education programs that are conducted in many agencies around the Government, they ought to be all in the Office of Education. `We don't take that position. The same thing can be said of health. `We are saying that what we have here is an agency whose mandate and charge is to find new ways and then try to get the existing agen- cies and organizations to adopt those new ways and to build them into their ongoing programs. rfliat is the role and function of OEO, as I see it. Mr. Quir. If this function were given to you, would you be capable of administering it? Mr. CARTER. I think that that is a question that portrays a depar- ture oii the basic assumption. I don't see any reason to speculate on that. `We have an agency that is doing a fine job. Why would we even think about just turning that over to somebody else? `We have some- l)Ody that is ongoing, it is making a contribution, it works. Why should we even get into the speculation about whether X agency or Y agency can do the job? Mr. QrnE. You are proposing a gradual phasing out of title V, which assumes that you will at least have the role of any flexibility and innovation iii the title V type programs in the future. If you can do it there, why can't you do it in other areas of helping the poor as well? Mr. CARTER. What we have said, I think in the administration pro- posal is that we undertook a demonstration in 1964 with respect to title V primarily through, in fact virtually exclusively through, ex- isting organizations. We have tested this out. We have found some things that are valuable. We are building it into an ongoing mecha- nism which exists. We are not taking something which exists and creating an altogether new mechanism to deal with it. This is a program, we are trying to search out new ways to deal with this problem in relation to an existing mechanism for public welfare assistance. We have found, we think, ways in which that can be made effective. We are trying to build those ways into the existing section 409. PAGENO="0462" 1300 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. QUID. How many people are no longer on welfare roles now? When were they taken off the welfare roles through the title V program? Mr. CARTER. I will let Mrs. Coughian answer that, because there is a little complication in the sense that we have some people who are involved in the project who would be eligible for welfare if the State had all of the authorities which are provided for under Federal law. Mrs. COUGHLAN. We have 100,000 persons who are no longer in the program, out of the 161,100 that have been or were enrolled at the begmning. Of the 100,000 who left, 35,700 have obtained jobs. Of those who are employed there are some 17 percent that are still receiving public assistance because their earnings are insufficient. For example: in the case of a mother who, because of a child, is limited to only taking part-time employment, there is need to con- tinue public assistance in those cases. Another 4,600 persons have left to enter advanced training. Of that number, approximately a third are still receiving public assistance because the training allowance is not sufficient to provide their sup- port or, in some instances, there isn't a training allowance available. Mr. GOODELL. Will you yield for clarification? Mr. Qtrn~. Yes, sir. Mr. GOODELL. You said that out of the 161,000, 100,000 have left. How would you characterize the other 61,000? Are these individuals mainly income maintenance cases who will not leave? Mrs. COUGHLAN. The 61,000 I referred to are currently assigned to projects. Mr. QUID. That is, the 61,000 who have not left are assigned to projects. But 35,000 are presently on jobs. Then there is another 65,000 that have left, but are not on jobs. Mr. GOODELL. Are all of them assigned to projects? Mrs. COUGIJLAN. Pardon? Mr. GOODELL. Are all recipients of aid in this program assigned to projects? Mrs. COUGHLAN. Yes. Mr. G-O0DELL. You talk about your division, 50 percent being for in- come maintenance.~ As Mr. Perkins referred to it earlier, there are a great many individuals who cannot make a transition to jobs. Is that group in the 61,000? Mrs. COUäHLAN. The 61,000 currently assigned; yes. This~ includes some individuals who have not moved into employment. Is that your question? Mr. GOODELL. It is a little hard to make it clear. Basically, we recog- nize you are dealing here, as we want you to, with a hard-core group. This means that a good many of them probably cannot qualify to go out and support themselves with work. Theyare, in effect, participat- ing in the income maintenance program at this stage, with perhaps some supporting service assistance to the family. What you are doing now for the family or the children may not make any impact until the i~ext generation. I am interested in how many and what proportion of the 61,000 figure. represent a hard-core, unemployed category. Mrs. COUGHLAN. Let me give you the list of the categories. Of those who have left the project, some 12,000 have completed their training hut were not immediately employed. PAGENO="0463" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1301 Mr. CARTER. If I may try to respond, I think, as I understand the question, you are referring to the characteristics of the 61,000 who will remain in training. Mr. GOODELL. Yes; the character. Mr. CARTER. I think that the thing about title V is that it is a tailor- made, individual case-by-case program based on analysis of the needs of the individual and his or her prospects. There isn't any one answer that can cut right across the board. Some people can be brough to employability in a very short time. Chairman PERKINS. Let me interrupt you. We are talking about a hard-core group here that in all probability will not be employed in the future. How many do we have in that cate- gory who are presently taking advantage of the program under title Mr. CARTER. Of the 61,000, do we have any measure of the ones that we don't think- Mrs. COUGHLAN. Actually there has to be some eventual objective of employment before anyone is on title V. It is true that due to the prevailing labor market condition in certain areas, like Appalachia, that the prospects of employment are not too good locally. Chairman PERKINS. Do you have estimates of the number involved in those areas? Mrs. COUGITLAN. We can give you in terms of the characteristics this kind of figure. Forty percent of the trainees have eighth-grade education or less. One-third of the title V trainees have never worked 6 consecutive months in their lives before coming into the program. But, as you know, it depends on the general economy. If the economy becomes very good, all of those people become employable. It is very difficult to tell you flatly that a certain percentage are not employable. Mr. GOODELL. Let me clarify that. We are having difficulty with terms here. Out of 161,000 total, 100,000 have passed through, as you put it- as I put it, they are no longer in the program-and 35,000 have jobs. Is that right? Mrs. COUGHLAN. Yes. Mr. 000DELL. Some of the 35,000 are still getting supportive help of some nature. You mentioned the two categories, the 17 percent of the 35,000 employed whOse earnings are inadequate, and then the balance of the 65,000 that went back on public welfare or are not working? Mrs. COUGHLAN. Some of them went back onpublic welfare. In other instances these people were not on a public-assistance program, be- cause they didn't have, for example, the problem of unemployed parents. Mr. GOODELL. Let me put it this way. Do you have information as to the other 65,000, what they are doing, if they are going to school or doing other things. Mrs. COUGHLAN. We have those that have entered advanced voca- tional training as 4,600. Again, of this group about a third are still receiving public assistance. Mr. GOODELL. That is in addition to the 35,000? Mrs. COUGHLAN. In addition; right. PAGENO="0464" 1302 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. GOODELL. Then you have in round numbers about 40,000 and 100,000 that are either working or getting advanced training? Mrs. COUGHLAN. Right. Mr. GOODELL. Is there another category? Mr. TRUELSON. There is a group of about 16 percent, Mr. Congress- man, where the educational level, the educational skill, has been in- creased. Their chances of getting jobs are much better. But we do not include these persons in this group. So you can add that 16 percent to your 40 percent. This is in terms of improving the employability. Mr. GOODELL. Is that 16 percent of the 60,000? Mr. TRIJEL5ON. ~ies. Mr. GOODELL. Just to sum it up, the 100,000 that have gone through includes 35,000 that have jobs and another 4,600 that are in advanced trammg of some kind. You have in round numbers 40,000 who either have jobs or are getting additional training and 60,000 who have not gotten jobs and who are. not in any kind of further training program. Of that 60,000, 16 percent by your evaluation procedure have im- proved their skills enough so that there is much greater hope that they will get jobs. Is that right? Mr. TRUELSOX. I think that is a fair approximation of the situation. Mr. GOODELL. Thank you. Mr. QUJE. Those 60,000, except perhaps the ones that have improved their skills, includes how many who were in a work experience pro- gram but had no training component. when they were under title V, that is, the existing title V? This seems to be the criticism of the Department of Labor. So many of the title V programs had no training component. Mr. TRUELSON. About 39 percent. of the trainees are engaged in adult basic education. It varies considerably from project to project. The national average is about 39 percent. In Kentucky it is 85 percent. We endeavor to link with the adult basic education experience. Now, where we have been lacking in some projects, not having enough vocational instruction, this again varies from project to proj- ect. This is an area in which we have been endeavoring to improve title V. I am sure that in working with the Department of Labor we will be able to build in more vocational instruction. Mr. QuIE. You don't know, of that 60,000, who neither have jobs or completed the program, whether t.here was a training component involved in their activities under title V or not? Mr. TRUELSON. There is only one project that I recall that we now have work experience combined. It is in Holmes County, Miss. The project is being phased out because we do not have work experience combined with the adult basic education. Mr. QmE. I had gained .the impression from the Department of Labor that you could count at least on two hands the ones that did have-maybe *they were talking about the quality of it. Mr. TRUELSON. We place special emphasis on the importance of work experience in developing good work habits. Mr. QmE. That is the greatest emphasis, rather than work training? Mr. TRUELSON. Yes. PAGENO="0465" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1303 Mr. GOODELL. Will the gentleman yield? Mr. QmE. Yes. Mr. GOODELL. Do you have a category which you might call "em- ployable recipients in public assistance"? Mrs. COUGULAN. Yes. That is the so-called "unemployed parent" segment of the aid to families with dependent children program, where the family is in need because of. the unemployment of a parent. Mr. GOODELL. I mention this because criticism has been made that we must put the 35 percent who get jobs, after going through work experience, into perspective and realize that a significant percentage of these people probably would have gotten jobs anyway. I am trying to get a little perspective on the significance of that 35 percent. For instance, the staten'ient has been made that in the category of employable recipients of public assistance-now, we all know there are unemployable categories, the elderly, the sick, and the children, and so forth-that the average time on relief rolls is less than 9 months. If that is a true statistic, you could expect over a period of 9 months that virtually all of that group would be getting a job- Mrs. COTJGHLAN. Not with an average- Mr. GOODELL (continuing). With or without work experience. Mrs. COUGHLAN. Not with an average of 9 months. You know that takes in those who are on for a very long, time as well as some very short-time cases. For example, as a result of seasonal employment- Mr. GOODELL. Is that an accurate statement, that employable recip- ients of public assistance remain on the relief rolls for an average of less than 9 months? Mrs. COUGHLAN. Yes, it is. Mr. GOODELL. Then the only point I am making is that we must try to get into perspective here what 35 percent getting jobs means. A cer- tain number of those, it is hard to say how many, would have gotten jobs without any program. Mrs. COUGHLAN. Title V is not strictly comparable with this under the employed-parent program, because in title V we have taken a good many of the AFDC mothers, who do not come into the unemployed- parent part of the program, as well as another small percentage of the other needy persons that are not, in other words, unemployed parents. Therefore, it is not strictly comparable to the unemployed-parent program. Mr. 000DELL. I understand that. Whatever the figure is, a certain percentage of this 35,000 would doubtless have gotten jobs over a period of 6 to 9 months without any aid at all. We just don't know how many. Mrs. COUGHLAN. That is true. We do have a comparison that you might be interested in, with the Department of Labor, which is a re- port on MDTA training of public assistance recipients. Mr. CARTER. May I make one or two additional points on this? Chairman PERKINS. Before you leave this point, I think we ought to make it clear that when we wrote the Economic Opportunity Act and title V in 1964, just a few of the States had taken advantage of the, jobless-parent category in the Social Security Act. For example, I know that Kentucky had not, taken advantage of that category. For that reason it was necessary to have a program of this type. There is no duplication here anywhere involved. Am I correct? 80-084-67-pt. 2-SO PAGENO="0466" 1304 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mrs. COUGHLAN. There is no duplication, no. If the State does have the unemployed-parent program, they are required to continue their public assistance payments and services. Title V only will supplement and add to what they already get under their regular program. Chairman PERKINS. In the Appalachia area, some States took ad- vantage of the additional category of jobless parents under the Social Security Act before the enactment of title V. Mrs. C0IIGHLAN. There is a total of 22 States in the United States and in Appalachia West Virginia is the only one. Chairman PERKINS. Title V came along, and West Virginia aban- doned that category or approach, if I recall correctly. Is that correct? Mrs. COIIGHLAN. No, they didn't abandon it. They used title V to enrich, really, the community work and training program by providing for supervision and vocational instruction and adult basic education, as well as a number of services that they had not provided under the community work training program. Chairman PERKINS. Of all the figures that have been quoted here, we have about 11,000, to the best of your judgment, or about 17 per- cent of the 60,000 that are presently taking advantage of the work experience and training program that you feel will be unemployable in the future? Mr. GOODELL. No, that was not it. Chairman PERKINS. How many thousand? Mrs. COUGITLAN. I don't understand the question. Chairman PERKINS. How many of this hard-core do you feel will be unemployable after they take the work experience and training and stay for the length of time permitted under the act? Mrs. COUGHLAN. Again, I think this is really determined by the `abor market condition in those localities where they live. Mr. QrnE. Would you say, ethically, that all of them are employ- able by the mere fact they are under title V? Mrs. COUGHLAN. Yes, if there is a tight labor market-for example, in St. Paul, Minn., we have a group of unemployed fathers where the placement rate is 70 percent. In eastern Kentucky, with a compara- ble group of unemployed fathers, the placement rate is 32 percent. Now, approximately the same services are given to those two groups. But because of the difference in labor market conditions you don't get the same success rate. If the labor market is tight enough, you can get a much higher placement rate. Chairman PERKINS. Getting back to~ the criticism of your adminis- tration because of the lack of supervision and adequate training coin- ponents, I think I understood you to tell Mr. Quie that you only had one project where you did not have some work experience or training component. Is that correct? Mr. TRUELSON. That is correct. Mr. GOODELL. Mr~ Chairman, I think we ought to clarify the figure. You used the figure "17 percent" again. I would like to have it straight. In talking about 100~000 who have gone through~ there was a total of 40,000 who were either working or pursuing additional training. Then you had 17 percent of the additional 60,000 that you said h~d shown marked signs of improvement in terms of job skills, which, by figuring 17 percent of the 60,000, would be another .10,000.~ PAGENO="0467" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1305 So, in round numbers, of the 100,000 you have 50,000 who have gone through and have shown no marked increase in their potential for getting jobs or have not gotten jobs. Therefore, 50,000 who have gotten jobs have gone on to increased training or have shown marked im- provement. Is that an accurate statement? Mr. TRUELSON. I would say it is. From the inception of the program in December 1964 to April 30- Mr. GOODELL. I want to clarify one thing. The tenor of my questions might indicate a critical viewpoint. I recognize we are dealing here with these very hard-core people. These are very hard-core problems. I think it is a program that is at least attempting to focus on the difficulty, in contrast to our manpower development and training pro- grams which tend to take marginal people who are ready to move Most of the people you are dealing with are not in that category. They need more than a little boost. The figures you recite may be a little discouraging, but you can look at it the other way. Fifty percent is a pretty good success rate among this kind of hard-core people. I think also, though, we have to keep in mind that the 35,000 is really not a firm, hard figure of success in the sense that many of them might have gotten jobs without any program. So, maybe the 50 percent is a little high in terms of the success rate. I won't pursue it here, but I would like to pursue later my concern that perhaps we are not setting up the evaluation procedures, or getting full data on how they are responding to these programs and the success of them that we should have. I have read a number of comments from manpower experts who are critical of the work experience program along these lines. Mr. CARTER. May I make a comment? I don't want to get back into figures again, but I do want to say, first, that we do have a study, which was made by our Office of Program Coordination, which is run by the Assistant Secretary engaged in program analysis and planning, and we would like to submit that for the record. This is a study of the title V program. Chairman PERKINS. Without objection, it will be received. Mr. GOcDELL. Do you have copies of it? Mr. CARTER. We have copies here. Mr. GOODELL. If you could give us copies here, that would be helpful. (The document referred to follows:) STUDY OF TITLE V PROGRAM-SUMMARY I. To be successful, Title V must overcome a number of barriers to improved earning power. Among these are: The maldistribution of workers in relation to jobs. Lack of occupational skills and job experience. Lack of basic education and requirements for jobs. Poor attitudes toward self and work. Health and medical problems. Lack of child care services. Police and bad debt records. Lack of income. II. In response to the variety of individual needs, in FY 1968 the distribution of Title V funds has been prOgrammed as follows: 50 percent for income maintenance. 16 percent for work experience. 14 percent for vocational instruction. PAGENO="0468" 1306 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 7 percent for work connected expenses. 4 percent for child care. 4 percent for other social services. 2 percent for adult basic education. 1 percent for medical care. III. The primary objective of Title V has been to increase the employability and earning power of the hard-core poverty population not to produce highly skilled production workers and technicians. In particular, the Program has been focused primarily on heads of families who are unemployed, and actual or potential recipients of public assistance. In 1965, this group numbered approximately 1.3 million poor households. IV. Evaluations of Title V have been hampered by the lack of baseline data with which Program performance can be cOmpared. For this reason, aggregative measures of "success" such as placenient rates are practically meaningless for evaluative purposes. V. Aggregative analyses also overlook the wide variations in the effectiveness of individual projects. Approximately 50 percent of this variations is attributable to differences in prevailing economic conditions, and social and demographic characteristics of participants. These factors operate independently of any particular administering agency. VI. Progress is being made to raise the average level of Program effectiveness through A project rating system which w-ill identify the most successful of projects faced with essentially the same exogenous factors and the ingredients of success which can be duplicated in similar projects. Expanded opportunities for training and vocational instruction made pos- sible by the 1906 Amendments to the Economic Opportunity Act. Implementation of the Cooperative Area Manpower Planning System (CAMPS) to improve Program coordination and close gaps in present job and skill training programs. WORK EXPERIENCE AND TRAINING PROGRAM Introd~ction The conventional wisdom regarding the solution to poverty among the adult non-aged groups in the population is a variation of what Secretary Gardner has termed the vending machine concept of social change. You simply put a nickel in the training machine and out comes the production worker, neatly cleaned and pressed and self-supporting. Economists and other practical men are the most notoriously strong adherents of this view. One is not entirely unsympathetic with the approach; there is a certain tidiness in the logic which observes that skilled workers are not poor, the poor are not skilled; ergo, enrolling the poor in MDTA programs will solve the poverty problem. One must hasten to add that this view is not entirely attributable to the training program syndrome; it is also related to the desire to declare an enterprise a success or failure on the basis of the number of nickels returned for each nickel deposited in the machine. The intelligence reports which have been received from the War on Poverty indicate, however, that the problem is much more complex than those who offer training as a panacea would have us believe. It is simply not a straight forw-ard uncomplicated job to alter the effects of a lifetime of deprivation and discrimina- tion, of little success and frequent failure, of little education, lack of skill, and ill health, and the attitudes which such conditions foster. At present, the con- census seems to be that poverty will probably yield to treatment for some who are poor. Success, if it comes, will hinge on our ability to stage a comprehensive and coordinated set of programs which are designed to overcome a combination of impediments. The most important barriers to improved earning power are described below. Barriers to improved earning power In most cases, poverty is the result of a geographic mismatch between labor supply and labor demand. Situations of this sort arise because the primary em- ployer in an area moves out, suffers a severe and sustained reduction in the demand for his product, or adapts a method of production which uses relatively more machines than men. The Appalachian Region is a prime example of this sort of phenomenon. The economic status of those who live in this Region de- PAGENO="0469" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1 9 6 7 1307 pended primarily on the demand for coal and the primacy of the coal miner as the principal instrument of production. Increasing production costs, the competi- tive situation, and technological change in the mining industry combined to force many men out of the mines. The new equipment made it possible to mine coal more cheaply with less labor and the demand for coal and other products pro- duced in that Region did not expand sufficiently to absorb the men who were displaced. Superficially, the solution to such a problem within the market economy seems simple. You attempt to locate new or growing industry in such areas, or you attempt to move workers to areas where labor is scarce. Since programs to moti- vate private employers to locate in geographically depressed areas are not under the purview of DHEW, we will duck discussing the problems involved in that approach. Moving workers from areas of labor surplus to areas of labor scarcity is beset with difficulties which stein from strong ties to present locations, however, bad they may be, and the uncertainty surrounding the kind of life which is possible in a new location. The problem is rather accurately defined by the old political adage, "A known devil is better than an unknown one." Second, individuals may be barred from jobs available within a community because they lack the occupational skills required for satisfactory job perform- ance. Often times, this difficulty is compounded by a lack of basic reading, writ- ing, ,and computational skills which are necessary to profit from training pro- grains designed to up-grade unskilled workers. For example, in the Eastern Kentucky Title V Program, 86 percent of all trainees are enrolled in Adult Basic 1~ducation classes because of the high illiteracy rate among participants. More- over, some individuals are unable to obtain even very low-level jobs because they have had no previous employment experience. In a situation where there are few low-level jobs and many people who qualify for and seek such jobs, those who have worked before are likely to receive preference over, those who have not. It is important to note in this respect that over one-third of all Title V trainees have had less than six months work experience prior to enrollment. Third, alleviating poverty via the investment approach is often complicated by the presence of more subtle factors having a direct bearing on the employ- ability and productivity of the poor. Often times, good work habits have been lost over long periods of unemployment. In comparison to past jobs, working conditions in the available jobs may require a dramatic adjustment on the part of workers in terms of routine, hours of employment, regular working days, strict adherence to reporting on time, etc. In addition, some individuals have poor attitudes towards work and towards themselves. They, may have had a long history of failures in school or in the labor market and may lack the con- lidence that they can get and hold decent jobs. For some, living on welfare may have become a way of life, and given the wages in the jobs available to them there may be no incentive to seek work as a solution to economic problems. Poor health and uncorrected disabilities also frequently complicate the problem. For example, in the Cleveland Title V project, a medical program started in May 1066 revealed that approximately 40 percent of those examined bad health prob- lems that needed attention before work training could be started. Fourth, one of the most serious impediments to improved income and employ- ment for female headed families is the availability of adequate child care fa- cilities. In the Title V Program for example, an estimated 5to 10 percent of the female trainees fail to finish their assignments because of the lack of day care services. In the April 1967 Manpower Report of the President, it was reported that "almost one out of every five of the slum residents who were not in the labor force but wanted a regular job gave inability to arrange for child care as the principal reason for not looking for work." According to a national survey spon- sored jointly by the Children's Bureau of the Department of Health, Education, and Welfare and the Department of Labor, 20 percent of working mothers from families with incomes of less than $3,000 were combining work with looking after their children. The great scarcity of day care centers was also evident from the survey. It showed that only 3 percent of the working mothers were using group care arrangements for their children. Moreover, these mothers were mostly from the middle income brackets because the cost of such care (estimated by the Children's Bureau at about $1,000. a year per child) is prohibitively high for poor families. . PAGENO="0470" 1308 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Fifth, police and bad debt records frequently constitute a serious barrier to employment and better earnings for those who are genuinely motivated to im- prove their capabilities for self-support. According to a special analysis made by the Employment Service in late 1966, records of arrests, garnishments or similar troubles were identified as the major barrier to employment for about one out of every ten unemployed job applicants in slum areas. Finally, the system in which programs are to be carried out may be imperfect. The criteria by which the performance of those who are actually carrying out programs is judged, may be quite different than that which should be used to judge the success or failure of a program. Misinformed though it is, the image which most people have of public welfare recipients, particularly the non-aged, is indolence, lack of energy and ambition, in general, good-for-nothings and ne'er-do-wells feeding at the public trough. In the welfare area, as in others, program decisions may be made which are inconsistent with a successful pro- gram because administrators and staff genuinely share this public sentiment. One sometimes encounters sincere expressions of disbelief that anything really can be accomplished with "those people." It should be noted that no single agency has a monopoly on such sentiments. From this brief review, it is clear that improving the earning power of the poor is a tough, complex problem. Training is one input in the process of re- habilitation and upgrading but it is not obviously the most important one. How- ever, the basic point is that the population at risk suffers multiple handicaps and that overcoming these requires a combination of services tailored to in- dividual needs. These problems will not change with an interdepartmental shift in the locus of a program like Work Experience and Training. The success of this and similar programs depends on bringing together a variety of services to serve those in need. The substantive issue in any jurisdictional issue is whether an adminis- trative transfer of ultimate responsibility will enhance the chance of accom- plishing this goal. Making a judgment on such a question requires a knowledge of the programs which are focused on the poverty group and its problems, an evaluation of how successful these programs are under existing and alternative administrative ar- rangements in achieving program potential and a decision as to who among the poor shall be served since with limited resources, not all can be. Poverty, welfare, and title V priorities The target group of the Work Experience and Training Program is the adult non-aged poor. Their number bulks large among those who are poor. As a group, there were, in 1965, 11.5 million households accounting for 32.7 million persons in poverty. Of these: 4.2 million households, accounting for 5.4 million persons, were aged; 7.3 mifflon households, accounting for 27.3 million persons, were non-aged. It is this group of 7.3 million poor households accounting for 27.3 million per- Sons which is the prime target group of the Title V Program. Of the non-aged households: 5.1 million households, accounting for 25.2 million persons were family units; 2.2 million households, accounting for 2.2 million persons were unrelated individuals. Of the 5.1 million non-aged family units: 3.6 million households, accounting for 18.5 million persons were in male headed families; 1.5 million poor households, accounting for 6.8 million persons were headed by females. In view of the extremely limited resources available through Title V to serve the population of non-aged, adult poor persons, it is necessary to establish some priorities for deciding who will be served. The underlying criteria which have been used in the Title V Program are family responsibilities and employment status. Priority has been given to the heads of families over those who are living alone with no family responsibilities and those who are unemployed over those who are employed. Such a system of priorities narrows the target group considerably. In 1965, only 500 thousand of the 3.6 million male heads of families and 800 thousand of the 1.5 million female heads of families did not work. It is essentially from this group PAGENO="0471" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1309 of 1.3 million, persons that the participants of Title V have been selected. It is safe to say that nearly all such persons are actual or potential recipients of Federally aided public assistance. If the Title V Program had been confined exclusively to public assistance recipients, the large proportion of participants would have been females. It was extended beyond this group to include potentialrecipients-primarily unemployed fathers in States which had not yet adopted the unemployed parents segment of AFDC-in accordance with Congressional intent. The scope of the Program was further broadened to include a limited number of unrelated individuals and the necessity for doing so has been demonstrated by ,the disturbances in Watts and other places. This carefully reasoned set of priorities is, of course, reflected in the com- position of Title V participants that are actually in the Program. There is heavy emphasis on heads of families, on females as well as males, on those who are dependent wholly or in part on public assistance for support and who are unem- ployed (see Table 1). In contrast to some programs, there is little doubt of the success of Title V in reaching the target group it was intended to serve. TABLE 1.-Work eaperience and training: Enrollee characteristics, December 1965-December 1966 Characteristics December 1965 June 1966 December 1966 Total Heads of household (percent) Dependent children per trainee Percent males I 51,017 57, 549 66,893 91.6 3. 4 61. 1 91. 0 3.4 54. 2 91.8 3.2 47. 6 Percent Negro 1 Median age (all trainees) Age distribution, males (percent): 20 years and under 35. 0 35.8 2.1 35.6 3.5.8 2. 4 37. 5 34. 0 3. 0 21 to39 52.0 52.3 58.0 40 to 49 26.4 26.1 23.9 50 to 64 19.2 18.9 14.8 S5andover .3 .3 Age distribution, females (percent) 20 years and under.. 21 to39 4.7 67.3 5.2 66.5 4.6 70.1 40 to 49 20.6 20.7 19.3 50to64 7.3 7.5 6.0 65 and ocer Educational attainment (percent): Total: .1 .1 8 years or less 56.4 51.3 40.7 Otoll 28.7 28.6 38.4 12 13.2 13.3 18.6 Over 12 White: 8 years or less 9toll 1.7 62.3 23.8 1.8 61 4 24.6 2.3 44. 5 34.3 12 12.1 12.3 18.9 Over 12 1.8 1.7 2.3 Negro: 8 years or less 9to 11 35. 7 43.6 35. 2 43.5 34. 7 43.8 12 18. 8 19.2 19.2 Overl2 6 months of continuous work experience 1.9 71.3 2.1 69.7 2.3 66.8 I Excludes Puerto Rico and Virgin Islands. Source: Based on data prepared by the Welfare Administration, Department of I{ealth, Education, and Welfare. It is worth noting that: The Program has been successful in reaching minority groups-approxi- mately 38 percent of the 66,000 enrollees on board in December 1966, were non-white.. . The Program is reaching the urban as well as the rural poor-some 60 percent of all funded training spaces are in urban areas and 40 percent in rural areas; this conforms almost exactly to the estimated urban/rural distribution of the poor population. PAGENO="0472" 1310 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 The Program is reaching the hard-core poverty areas-between the incep- tion of the Program in December 1964 and October 1966, more than $41 million in Title V funds went into projects in the 182 poorest counties of the Nation; i.e., those with an average per capita income below $800. Although other programs under other titles of the Economic Opportunity Act have larger budgets, the Title V Program has invested more funds in these counties than any other Economic Opportunity program. Services for the poor: The title V program The vast majority of services which must be brought together under Title V if a solution to poverty among this group is to be found, have been provided at the Federal level by the Department of Health, Education, and Welfare. For example, in the 1968 President's budget, it is estimated that more than two-thirds of all the Federal funds for programs assisting the poor are funnelled through the Department of Health, Education, and Welfare. A significant proportion of these funds are for the adult poor and their families. What are the required services? First, Title V trainees, being among the poorest of the poor, require income support. This item generally bulks largest in most Federally supported programs aimed at improving the self-sufficiency of the poor. Title V is little different than other such programs in this respect. In FY 1968, 50 percent of total funds are programmed for income maintenance (see Table 2). This compares favorably with MDTA programs which serve a less disadvantaged population where the figure is 70 percent. These payments are made through the Federal-State system of public assistance and are set at 100 percent of what each State defines as "need." TABLE 2.-Worh experience and training program, estimated average cost per trainee, fiscal years 1966, 1967, and 1968 Estimated average cost per trainee I Expenditure item Fiscal year 1966 Fiscal year 1967 Fiscal year 1968 Dollars Percent Dollars Percent Dollars Percent Total costs 1. 100 100 1.225 100 1,390 100 Cash payments: Maintenance (average) 676 Group I (32P Group II (1, 403) Work-connected ecpenses (average)_ -- 108 Group I (110) Group II (90) Total services cost 200 Adult basic education 20 Vocational instruction 21 Child care 40 Medical 10 Work exnerience 150 Other social services 45 Agency administration 30 61 9 26 683 (329) (1,510) 104 (110) (90) 406 56 8 33 690 (332) (1, 527) 104 (110) (90) 563 50 7 41 2 2 4 1 14 4 25 112 50 12 160 47 2 9 4 1 13 4 25 196 50 14 228 50 2 14 4 1 16 4 3 32 3 33 I Does not include services provided without charge from other sources; e.g., adult basic, vocational instruction, public assistance already paid. Fiscal year 1936 based on 9 months per trainee, fiscal years1967 and 1968 on 7 months. 2 Group I trainees receive only supplementary assistance payments from title V funds; group II receive total payments from title V. NoTE-Totals may not add because of rounding. Source: Based on data prepared by the Welfare Administration, Department of Health, Edo catior., and Welfare. Where a State meets 100 percent of "need," no additional Federal funds are expended for the income support of Title V trainees. For participants in those States meeting less than 100 percent of need or who are ineligible for public assistance (chiefly male heads of families residing in States which have not 2 PAGENO="0473" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1311 adopted the AFDC-UP Program), the Federal Government makes up the difference. Second, many trainees require basic education or literacy training. Since its inception, 60,700, or 39 percent, of all participants have been enrolled in Adult Basic Education. In some areas, Eastern Kentucky for example, the percentage of trainees enrolled in Adult Basic Education exceeds 85 percent. In FY 1968, nearly 5 percent of Title V funds exclusive of cash payments and agency administration, are programmed for Adult Basic Education (see Table 2). But this understates the total effort being made to overcome the educational deficiency of Title V participants. It is estimated that in 1966, funds made available under Title II.B. of the Economic Opportunity Act on the initiative of Title V directors (now transferred to the Department of Health, Education, and Welfare) added $2.7 million of additional resources for basic educational instruction. Third, the provision of child care services is, for all practical purposes, a necessary condition of Title V participation for most female headed faniilies. It is estimated, for example, that during FY 1967, over 42,000 female trainees on Title V need day care facilities during their assignment. These women, on the average, have three children, at least one of which requires child or day care facilities. At any one time, approximately 24,500 of these women will be assigned, and thus child care facilities for approximately 24,500 children are needed. In FY 1968, 9 percent of total services costs (see Table 2) are pro- grammed for child care. It should be recognized, however, that funds can only be used to purchase day care services when they are available. The shortage of such facilities is endemic to nearly all Title V projects and is one of the principal reasons for the voluntary termination of female participants. For example, during FY 1967, an estimated 2,700 women will have to drop out of ti `uning due to inability to find day care services * In addition to Title V funds, some Title V directors have had considerable success in drawing on existing community resources and developing new re- sources for child care. In Cleveland, for example, seven churches in the areas of greatest need have donated their facilities for use as in-and-out day care centers for young school age children of parents enrolled in the Title V Program. Fourth, many trainees require a wide range of pre-conditioning activities for improving self-image and acquiring self-confidence. These activities may involve group sessions in such areas as grooming, consumer education, home management, child care, acculturation, use of community resources and public transportation services, as well as individual counselling and casework to help overcome serious and longstanding personal and family problems that interfere with efforts to become self-supporting. In FY 1968, more than 9 percent of total service costs are programmed for such social services. Fifth, medical examinations, referral, treatment, and rehabilitation are in- tegral parts of the total package of services provided to those who are selected for Title V participation. About 3 percent of Title V funds are programmed in FY 1968 for this purpose. These funds are supplemented by outside resources as well. It was estimated that in 1966 about $436,000 in medical care and voca- tional rehabilitation services was made available to Work Experience and Train- in~ nroiects which was not charged to Title V funds. Finally, Title V trainees require vocational instruction and work experience. These two components account respectively for about 35 percent and 41 percent of total funds programed for services in FY 1968. Additional resources are also made available to title TV in these areas. Excluding the contributions made by sponsors, it was estimated that in FY 1966 nearly $3 million of vocational in- struction was provided to Work Experience and Training projects but not charged to Title V funds. In addition, nearly three-quarters of a million dollars worth of services for counselling, testing, and guidance were also provided free to the Program. primarily by the Bureau of Employment Security. All levels of Government and private sponsors contribute to the Title V Pro- gram. The success or failure of each individual project denends on how effec- tively the great diversity of programs and sources of funds are brought at to bear on the problems of the poor. In the health field. cooperation has been enlisted from many sources including three Federal agencies: the Division of Hospitals and the Division of Indian Health in the Public Health Service, and the Veterans' Administration. For ex- PAGENO="0474" 1312 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 ample, the Title V Program in health occupations provided through the Detroit Public Health Service hospital has been highly successful and demonstrates the accomplishments possible with full cooperation of a well qualified public hospital. The hospital has trained 32 Title V participants in 10 different health service occupations, 31 of whom have already secured employment with an average weekly income of $85.00. Thirty-two are currently in training in 21 different occupations. In the education and welfare areas, the Program has also drawn on a variety of resources in developing work experience and training opportunities. For ex- ample, the Program is conducting 35 projects in 29 States for teachers' aides, five projects in one State for nursery school aides, 19 projects in 11 States for home- maker aides, 14 projects in seven States for recreational aides, three projects in three States for neighborhood aides, 19 projects in 13 States for child and day care aides, and four projects in four States for social work case aides. In some cases, the need to develop meaningful work experience and training opportunities has also led to programs which help to overcome critical shortages of services essential to a successful Title V project. For example, policy has recently been approved by the Welfare Administration which has the two-fold purpose of providing employment for AFDC and other low-income groups as neighborhood family day care mothers and at the same time opening up new resources for the day care of children whose mothers receive social services and job training from public welfare agencies or are former recipients who are employed. These day care services will be provided in private homes located in low-income neighborhoods for the most part, that will be furnished, equipped, supplied, and supervised by local public welfare agencies to meet licensing standards. While Title V has made maximum use of public resources available through its inter-relationships with many other Department of Health, Education, and Welfare programs. It has not overlooked the private sector. Use of private em- ployers as sponsors to provide a wide variety of kinds of training in a real work environment has offered a very constructive resource to trainees in most com- munities. The results of such placements have been most successful in terms of job placements. A recent informal survey indicates that over 4,500 trainees have been or are currently assigned to private employers. Of these, 1,103 trainees have completed their assignments with 644 trainees obtaining employment with their sponsors and 459 obtaining other employment as a result of this experience. Placement with private employers for on-the-job training has served as a "door opener" as it were for welfare recipients since many of these employers would not have considered welfare recipients for employment except as a "civic duty" to try them out without cost and without obligations. Program effectiveness Before launching into the complex subject of TitleV effectiveness, some under- taking of the precise mission of the Program is indispensible. When the Economic Opportunity Act was passed in 1964, the express pur- pose of Title V was "to expand the opportunities for constructive work experi- ence and other needed training available to persons who are unable to support or care for themselves or their families, so as to stimulate the adoption of pro- grams designed to help unemployed fathers and other needy persons to secure and retain employment or to attain capability for self-support or personal in- dependence Thus, as originally conceived by Congress, the purpose of Title V was to stimulate the adoption of programs leading not only to employment, but also leading to the attainment or retention of capability for self-support or personal independence. However, because funds were limited in relation to the potential target group, it was administratively determined that the thrust of the Program be directed toward the goal of employment rather than personal independence. Later in 1966, the reference to "self-support and personal inde- pendence" was dropped from the law. The initial administrative decision concerning employability versus self-sup- port and personal independence as well as the subsequent change in legislative intent is extremely important. If the stress had been put on personal independ- ence, the Program would have been focused primarily on those who had the greatest potential for achieving self-sufficiency in the shortest period of time. Instead, the policy decisions went against "creaming" the target group. An PAGENO="0475" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1313 understanding of this emphasis is crucial in judging how well the Program has succeeded. Evaluating the effectiveness of the Work Experience and Training Program has been seriously hampered by the almost complete lack of any baseline or nor- mative data with which actual Title V results can be compared. In essence, we have very little information on which to base an estimate of how participants in the Program would have fared in its absence. As a result, claims of success or failure based on the same facts have been rampant. The truth of the matter is that no one knows whether an overall placement rate of 50 percent is good or bad. On an absolute scale, it does not, perhaps, look good. But that standard is clearly not the relevant one. What is required is an estimate of how the lives of participants have been changed by the Title V Program. Unfortunately, we have, at present, partial data on only one side of this cal- culation; that is, we have some knowledge about what happened to participants after completing the Program, but we are quite ignorant of what would have been the experience of the group of participants as a whole had they not been in Work Experience and Training. As a result, any aggregative analysis, such as how many participants are employed or unemployed, is practically meaning- less for evaluative purposes. It is for this reason that so-called anecdotal or individual case records have frequently been used in demonstrating Program success. The main advantage of such examples is that they give a subjective notion of what the future for an individual could reasonably be expected to have been if the opportunity to participate in Title V had not been available and how this future has been changed by the fact of participation. Individual case histories tell a dramatic story and it is safe to say that such examples of success can be found in every project throughout the country. We will cite only one. The following is the statement of Mrs. Virginia Mix who participated in a Title V project in Arkansas during 196G. The statement was written in its entirety by Mrs. Mix without any assistance from the Title V staff or facility and she has given her consent to having it reproduced here: "When I was sixteen I married; therefore, my school days were over. During my thirteen years of marriage, homemaking, and raising my three children was a full time job until my husband and I separated. What I was trained to do was of no use to me in trying to earn a living. Waitress work at $26 a week or clerk in a five-and-dime was all I could ever hope to get; wherever I looked for work, the first question ended the interview. `Have you had any experience?' The more I searched, the more hopeless and defeated I felt. "How could I ever hope to make enough money to support myself and three children? My parents were wonderful. They were willing to help all they could, but they were in no position financially to help for any extended length of time. "I was working as a waitress and one of my customers told me she was going to schooL She told me about the work program, where I could go to inquire about it. The whole thing sounded too good to be true. There had to be a catch to it somewhere. People just don't get something worthwhile for nothing. My next day off I went to our local welfare office. I was excited and full of plans, but the man soon burst my bubble of happiness. They could not pay me any- thing because we lived with my parents, and my divorce wasn't final. After my divorce was final, I went for my second interview with a less optimistic view than I had on my first visit. The man told me I had come on a good day. The Supervisor of the program was in the office. He talked with me and took me com- pletely by surprise by asking me if I could begin school in two days. My answers to his questions were very satisfactory, I am sure. When he asked me what course I wanted to take, I was at a loss. What did I want to do? I did not have the faintest idea what a job in public was like. In fact, the whole idea was terrifying. I shuddered at the idea of having the responsibility of making adecision on my own. How had I ever gone through with my divorce? Really, 1 wasso unsure of myself, no wonder no one had considered me as an employee. Could I be an asset to any company? "My first two months of school I was a complete wreck, physically and mentally. My mother talked with me, tried to calm and console me, finally resorting to threats. She told me if I did not stop worrying so about it I wouldn't be able to attend school. So I had a heart-to-heart talk with myself. Surely they did not PAGENO="0476" 1314 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 expect me to know all they were trying to cram into me. After all, I wouldn't be going to school if I had known all the answers already. So I made up my mind to learn all I could. To do my best was all they could expect of me. I began to relax and really enjoy learning. The more I learned, the more I wanted to learn. But as the time drew near for me to graduate, once again the old fears began to gnaw at me. What if I hadn't really learned all that I needed to know? What if the confidence I had felt was just false security? But the training I had received saw me through. I could look and sound confident, even though I was scared stiff. "This schooling gave me an opportunity I never dreamed I would have. In my job I have to make decisions on my own. No one does it for me, and you know what? I can do it! "My training has offered many open doors before me. All I have to do is walk through. The going was rough. My parents, my children, and myself sacrificed many things for me to be able to continue; but it was worth it all. Even to being forced, because of finances, to live away from my children will be rewarding. Since last November they have lived with my folks, and I have lived here-45 miles away, five days a week. But now, I have a good job with a good company, and when the school years ends my children will join me here. We will make Texarkana home-a far cry from our position 18 months ago." In addition to the lack of baseline data for measuring program achievements, aggregative analyses of the Title V Program frequently ignore what might be called secondary gains. For example, the beneficial effect on school attendance of children of Title V trainees has been widely noted. This is particularly notice- able in areas like Eastern Kentucky where the parents themselves are attending classes and gaining, perhaps for the first time in their lives, an appreciation of the benefits of education. A related objective is the strengthening of family relationships as a result of the children seeing the father as an employed person working to improve the family's standard of living. Educational objectives are supported by the Title V projects in tangible ways such as the building of bridges so that children can get to school, repair of dilapidated classrooms and renovation of school ground play areas. Title V projects have contributed substantially to community development and improvement on Indian reservations and other economically depressed areas. For example, in Wolfe County, Kentucky, rated the second poorest county in the United States, some 150 unemployed fathers in the Title V Program have con- structed an estimated $1 million worth of flood control work in the Red River Valley. Trainees in Wolfe County also constructed a public garbage dump (on land donated by a private citizen), the first such facility to be established in the township. This resulted in the community designating April 13, 1967, as "Clean-Up Day" with Title V trainees manning borrowed trucks to pick up the trash collected by the local residents. The Title V project played a major role in the economic development of at least one Indian reservation-the Rosebud Reservation in South Dakota. The project, in cooperation with a private computer manufacturer, conducted an ex- periment to see if Indians could perform acceptable job functions in this type of industry. Previous attempts by influential Indian Tribal leaders and Bureau of Indian Affairs officials to obtain necessary support and funds to conduct such an experiment had failed. The evaluation of the results of this experiment showed that the attention span of the Rosebud trainees was far superior to that of the average trainee or worker in the Fabritek industry. In comparison to the 30 minute attention span of the average trainee in building core memory stacks. that of the Rosebud trainee was two hours. It was also determined that the quality of work was comparably equal orsuperior. As a consequence of this experiment, the company is moving ahead to build a plant on the Reservation. The third major defect in an aggregative evaluation of the Title V Program is that it disregards the extremely wide variation in the effectiveness of individual projects. For example, taking the percent of project terminees employed as a criterion, Table 3 shows for three of the more than 250 Title V projects the fol- lowing results: [Percent of Terminees ernployedl Eastern Kentucky 33 Cleveland. Ohio 45 St. Paul, Minn 70 PAGENO="0477" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1315 TABLE 3.-Selected data on title V terminees in Cleveland, eastern Kentucky, and St. Paul projects Cleveland Eastern St. Paul Kentucky Total terminations to September 1968 Employment: Total terminees employed Percent employed Loca labor market conditions: Unemployment rate (percent)~_ Partileipant characteristics: Percent male 1, 613 734 45.5 2 2.8-3.5 71. 6 1,936 640 33. 1 2 7.2-31.4 100.0 1 471 330 70. 1 2 100. 0 Percent white 20.0 99.5 87.9 Average age (median): Male. `36 39 35 Female Services: `31 Percent in adult basic education .. 22. 5 86.0 13. 5 Percent in high school equivalency Percent in vocational instruction 12. 5 25. 5 8.0 2. 5 33. 0 63. 5 Average health expenditures per case month Total day care expenditures $10. 46 $70, 537 $7. 17 0 $6. 18 0 I Group II male trainees only for period Oct. 1, 1965, to Oct. 31, 1966. 2 Range from low of 2.8 percent unemployment rate in April 1965 to high of 3.5 percent in July 1966. 3 1966 annual average unemployment rates for 19 eastern Kentucky counties: Bell 15.5 Letcher 11.4 Martin 20.4 Breathitt 31.3 Knott 18.3 Morgan 8.0 Clay 15.6 Harlan 12.6 Owsley 31.4 Floyd 14.2 Knox 20.7 Perry 18.3 Elliott Magoltln 23.9 Pike 14.5 Jackson 7.2 Manifer 7.5 Wolfe 18.3 Leslie 29. 4 4 Data on participant characteristics and services derived on basis of average number enrolled: (1) in Cleveland project from Mar. 1, 1965, to Aug. 31, 1966; (2) in eastern Kentucky project from July 1, 1966, to Dee. 31, 1966; (3) in St. Paul project from Oct. 1, 1965, to Oct. 31, 1966. `Mean age in years. Source: Based on data prepared by the Welfare Admini~tration, Department of Health, Education, and Welfare. Percent employed is a relatively narrow criterion because some proportion of terminees go on to other training at the time of Title V termination and others, who may not be empl6yed immediately, have typically upgraded their education level and job skills and hence their capability. Analyses over the past year have shown that nearly 50 percent of the variation in project effectiveness from place to place, when measured in terms of the proportion of terminees employed, can be explained by differences in the pre- vailing economic conditions and characteristics of the group served in terms of age, educational level, sex, race, previous work experience, and so on. Assum- ing that the target population is not to be "creamed" and that high, as well as low, unemployment areas are to be served, these factors are beyond the control of the particular agency responsible for program administration and content. The importance of these factors, which operate independently of Program management, is illustrated in Table 3 which shows a comparison between one of the largest rural projects (19 counties in Eastern Kentucky) and one of the largest urban projects (Cleveland, Cuyahoga County, Ohio). Also included are data on 471 Group II males terminated from the Ramsey County (St. Paul), Minnesota, project from November 1965 through October 1966. These afforded comparisons of an all-male group in an urban area with a low unemployment rate and the Eastern Kentucky all-male group located in a rural economically de- pressed area. The men in both localities are unemployed heads of families not receiving assistance under the AFDC Program (Group II cases). Other things equal, projects operating in areas of high unemployment would be expected to be less successful than those operating in areas of high labor demand. Similarly, projects in which participants have a higher proportion of females, a lower average level of educational attainment, a higher proportion of non-whites, and a higher average age will probably be less successful in ultimately achieving the objectives of greater earnings of its trainees. We know this a priori from studies of the labor force participation, employment, and earnings history of females in relation to males, whites in relation to non-whites. PAGENO="0478" 1316 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 the more highly educated in relation to the lower educated, and the older persons in relation to those who are younger. These assumptions are borne out by the facts. As Table 3 shows, local labor market conditions, as measured by the area unemployment rate, range from a high of 31.4 percent in Owsley County, Kentucky, to a low of 2 percent in Ramsey County (St. Paul), Minnesota. The average age is highest in Eastern Kentucky standing at 39 years and lowest (for males) in St. Paul. Relatively, the Cleve- land project has a high proportion of women and also a higher proportion of non-white participants. An image of the differences in average education level becomes clear by comparing enrollments in Adult Basic Education: 86 percent in Eastern Kentucky, 23 percent in Cleveland, and 17 percent in St. Paul. These facts make the wide variation in the effectiveness of these three projects understandable. Nevertheless, some projects are still more "successful" than others, although they are faced with essentially the same labor market conditions and type of trainees. The central issue which emerges, therefore, is what can be done to raise the average level of Program performance? Improving program effectiveness There are three major areas in which the Department is actively engaged which promise real improvements in Program effectiveness. These are: the de- velopment of a system for rating the effectiveness of Title V projects; the en- richment of the present Program with greater resources for vocational training and instruction; and the launching of the Cooperative Area Manpower Planning System (GAMPS) for insuring that coordination and cooperation among the many programs and resources necessary for effective earning power programs is more reality than myth. Title V rating system.-At the present time, the Department of Health, Edu- cation, and Welfare and the Office of Economic Opportunity are jointly devel- oping a system for rating individual Title V projects which will take into account the many complex factors discussed above. Projects will first be classified ac- cording to labor market area, characteristic of trainees, and other relevant fac- tors effecting the success of Title V projects but operating independently of Pro- gram management. All projects falling within a given classification will be ranked according to various measures of success such as proportion employed, propor- tion going on to advanced training, proportion receiving high school equivalency diplomas, etc. In effect, each project will be scored in relation to all others, and on the basis of the ranking which these scores yield, the factors which are asso- ciated with the operation of successful projects will be identified and incorpo- rated in those which are less successful but face essentially the same set of out- side conditions. This system will become part of the regular reporting system, and as. such will permit a routine and rapid assessment of the status of individual projects once a month. The specifications for this system are now being devel- oped in the Department of Health, Education, and Welfare and within the next month a sample of 25 projects will be selected for a trial run. Enriching Title V.-The 1966 Amendments to Title V of the Economic Oppor- tunity Act and Title II. of the Manpow-er Development and Training Act provide the vehicle for closer coordination between the Department of Health, Education, and Welfare and the Department of Labor. The purpose of this legislation was to open up greater opportunities for training and vocational instruction for Title V trainees. This will be accomplished after July 1, 1967, by the joint evaluation and approval of the training and work experience aspects of each Title V project. The Amendments include provision for reimbursing the Department of Labor for testing. counselling services, work experience, on-the-job training, classroom in- struction, job development, and, where necessary, relocation assistance. Respon- sibility for providing basic maintenance, pre-training services, personal coun- selling, health, family, and day care services, and other necessary supportive services will continue to rest with the Department of Health, Education, and Welfare. To implement the new Amendments, a task force composed of representatives from the Department of Health, Education, and Welfare and the Department of Labor has been meeting regularly to develop policies and procedures for Program development, project review, project organization, staffing, and financing. The task force recently met with an advisory group consisting of State and local wel- fare officials and State and local officials representing the Department of Labor. Area JJanpowcr Planning Sy$tenl.-The Title V Program is participating in a PAGENO="0479" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1317 five-department effort to coordinate various Federal manpower programs that are the responsibility of Health, Education, and Welfare, Labor, Office of Eco- nomic Opportunity, Housing and Urban Development,, and Commerce. This effort (CAMPS) is the Cooperative Area Manpower Planning System. CAMPS is in- tended to improve coordination and close gaps in existing job and skill-training programs. Certain cities and depressed areas have been designated as targets for the first organization of coordinating committees. Surveys are made of local needs in the field of manpower training and coordinated plans developed to make the most effective utilization of available resources. State coordinating committees are responsible for review and approval of the plans and for insuring that there is State-wide planning in addition to that for the target areas. Each region will review, the CAMPS State plans and provide technical assistance. A national com- mittee is responsible for development of overall Program goals, guidelines, link- ages, and general leadership. Since the system is just beginning (the first State plans become effective July 1, 1967), its effectiveness cannot yet be measured. However, such simple, yet significant, benefits as the sharing of Program information of the various agen- cies, have already been obtained and the system seems to hold out the prospect for a more efficient deployment of resources. Mr. QmE. Could I also ask whether somebody in your office can go through the testimony this morning where we have cited figures again and again and do a recap, because it will be difficult to read the whole record? Mr. CARTER. We will try to set it out in one table. Most of it appears in this study. Chairman PERKINS. Have you had a chance to read the study that has been made in the upper Kentucky River counties of the work experience and training program? Mr. CARTER. I have nOt looked at that personally, but I know Mrs. Coughlan and Mr. Bateman are here from the Office of Program Co- ordination. Chairman PERKINS. I glanced at the. report briefly last night. I have some doubt about how thorough and accurate the report may be. `Would you care to comment on that, Mrs. Coughlan? Mi GooDrr L Whichi epoi t `tre you t Llklng about ~ Chairm'i-n PERKn~S It is a iepoit that Senatoi Chrk ordered in con nection with the work experience and training program in the upper Kentucky River counties. Mr. QUIE. Do we have access to it? Chairman PERKINS I doubt it It w `is just dehveied to me yesterday I feel we should go into the training components of title V programs and see what type of programs they have been operating. Perhaps you, Mrs. Coughlan, and Mr. Truelson may want to coin- ment on this ieport this moinmg Mrs. COUGHLAN. We would be very interested in seeing the report. `We have not seen it. I might state that with regard to supervision we are requiring the State, we have given them until the end of Septem- ber to meet a standard of having one work experienced training spe- cialist for each 60 trainees. At present they only have one such staff person for each hundred trainees. We do not feel that is adequate. Chairman PERKINS. I wish you would secure a copy of the report and let me have your detailed comments on it. Mr. QUIE. Could we get a copy of the report and the rebuttal, if you want to call it that, that they will prepare? Chairman PERKINs. Yes, I will see that you get a~ copy of this report. PAGENO="0480" 1318 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. QUIE. Now we are talking about something that nobody else has read but you. It sounds interesting. Mrs. COUGHLAN. I would like to read into the record the actual situation with regard to the 100,000 persons who have left the projects. Mr. QUIE. Is that in here ? Can we follow what you are going to read out of this document? Mrs. COUGHLAN. No. This particular table is not in there. We got up to about 52,400, as you recall. The 35,700 went to jobs, 4,600 went into advanced training, 12,100 completed their assignment but did not immediately fine employment, and this totals 52,400. Now, of the remaining 47,700, approximately 17,363 left for what would be classified as "good cause." They were disabled or medically unqualified for the program. Some 10,000 fell into that category. Also, 3,721 had to leave the project because of child care problems; 1,900 became ineligible, technically ineligible, because they had increased resources or some other reason that they were no longer in need. Also, 190 left because of hours of work that were impossible for them to meet, 1,000 left because of transportation problems, 525 left because of educational limitations. In other words, these were people who were not able to benefit. They lacked the capacity to benefit from any type of education. Now, that leaves those who left for what would be called not good cause. Before I leave the others, there are 2,814 trainees who were ter- minated because the projects in which they were enrolled were phased out. This leaves about 15,400 who were what you might call dropouts, who left for "not good cause." One of the reasons was poor attendance. They were dropped from the project, some 8,825, since they were absent too much. Also, 3,339 were dissatisfied with the assignment, 1,955 did not make any progress and were dropped by the project, 906 were dropped for misconduct, and 382 refused to take an assignment. Mr. QUIE. May I ask one question on that? Would an alcoholic who was one of the 17,000 who left for "good cause" be in the category of one who left for medical reasons or dropped because he did not show up on a job? Mrs. COUGIILAN. That would really depend on the circumstances. I think the project I know has worked with alcoholics, particularly in St. Paul, do give them every opportunity. But probably after, you know, a reasonable period of time, he could be dropped. It would depend, I guess, on how the project classified, whether this was for medical reasons or whether this was due to absenteeism. Mr. QtTIE. Because alcoholism is a pretty serious disease. Chairman PERKINS. Is your agency making plans to keep this 40,000 or 50,000, whatever the number may be, that in all probability will not obtain jobs in the foreseeable future, to keep this hard-core group in employment by what you feel is some useful work and train- ing experience without shoving them back in relief? Are you making plans to carry on this program even though it is phased out and taken over under section 409 of the Social Security Act? Mrs. C0UGHLAN. Actually, the responsibility for this will rest with PAGENO="0481" ECONOMIC OPPORTuNITY ACT AMENDMENTS OF 1967 1319 the States, as you know.. All we can do is lend them' encouragement and offer leadership in trying to make appropriate plans. Chairman PERKINS. You are planning, though, through 1970? Mrs. CouGnr~N. Right. Mr. QuIE. Mr. Chairman, could I finish with this last question here? I understand in talking about St. Paul that they are dealing with a much more hard-core group than they expected to be working with in 1964. Because of the increase in demand for labor they were able to secure jobs for part of this group that needed help in title V. Do you find this to be the case around the country, or is it more the case in an area where the jobs are available? In. Kentucky it would not be as much a figure, where 30 percent might find jobs? Mrs. COUGHLAN. In the majority of the communities where the economy is good, we find that we are getting the really more disad~ vantaged people, because the others have been able to get into jobs. Mr. Quin. Also, I gain the impression: that in title V in St. Paul they would probably work themselves out of a job out there in 2 years if it were not for the fact that the people come in. If this is successful, why is it that the people on AFDC have in- creased by 14 percent between 1964 and 1967? Mrs. COUGHLAN. Do you want to answer that, Elmer? The major reason for the increase in AFDC there is legislation that has broadened the program coverage. Another thing is that the mothers on AFDC, the characteristics of the group on AFDC, are such that they are not affected, you know, by the economic condition. In other words, you might have a very prosperous economy, but these women cannot work because they have to take care of their children. Mr. QUIE. Do you break down this information on the 50,000, who either drop out or have left `for good cause, on whether. they are male or female? Mrs. COUGHLAN. We don't have that breakdown. I think we might be able to get it. Mr. QuIE. I think that would be interesting to have, if you would provide it for the record. Mr. G00DELL. Will the gentleman yield? Mr. QuIE. Yes. Mr. GOODELL. Mrs. Coughlan, 3 years ago, Secretary Celebrezze testified before our committee. At that time, recalling the figures, I think it was estimated that we were spending around $32 billion of Federal money for what lie termed "poverty-oriented" programs. I believe he included social security in that,' all your old-age assist- ance, aid to dependent children, and a variety of others. Do you have a total figure comparable to the one Mr. Celebrezze gave us 3 years ago that applies today? Mr. CARTER. I am not familiar with that figure or what went into it. The best estimate that we have of funds for programs that' are directly assisting the poor, in one way or another, is roughly $26 billion. Mr. GOODELL. Obviously they are using a little different category. I will check the hearings in 1964, because I think I asked the Sec- retary to put in a breakdown of categories he was talking about. What is included in your $26 billion? 80-084-67-pt. 2-31 PAGENO="0482" 1320 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. CARTER. For example, if yOU take a heavy component like social security, we attempted to identify that portion which goes to actually keeping people out of poverty or helping people who are otherwise in poverty. That comes to around, for example, $8.5 billion. Mr. GOODELL. From a total of what in social security benefits? Mr. CARTER. The estimate I have been given- and I would like to check this to be sure-is in the neighborhood of $30 billion. Mr. GOODELL. 8.4 you say? Mr. CARTER. 8.5. Mr. GOODELL. 8.5 billion of the $30 billion social security benefits a year goes to keep families out of poverty? Mr. CARTER. That would be the estimate that we have. I am not sure of. that overall figure, because I am not sure whether that is both a combination of collections and disbursements, or simply disburse- ments. That is why I said I want to check that. Mr. 000DELL. Since the social security law, it self, freezes most people into poverty while they receive benefits from social security in terms of any earning supplemental, it seems low. It is possible for most people who are living on social security to earn enough money to get above the $3,000 poverty level without losing all their social security benefits on a dollar-for-dollar basis. Mr. CARTER. I am not sure that is true of most people on social security. Mr. 000DELL. Of course, there are a lot of people in social security who have saving$, who have investments, other types of income, which is not counted, not deducted while they get their social security benefits. I am talking about people who pride themselves on relying on their earning power plus social security benefits to sustain themselves. As the law is written now, it deprives them of all social security benefits on the average before they can get above $3,000 total benefits and earnings. Mr. CARTER. As you know, the administration has recommended some increase in the amount of money that may be earned. In addition, we estimate that if the present social security amend- ments that are pending are passed, this will take 2 million people out of poverty. If the benefit increases that the administration has pro- posed are passed, this will take 2 million people out. Mr. GOODELL. Of course, if we keep our poverty level at $3,000, this becomes less and less meaningful. I recognize that this is a mini- mum increase you are talking about, a percentage increase. Many of us find it contradictory, however. While we talk about the poverty level of $3,000, we deny an indi- vidual the opportunity to get above the $3,000 income level while he receives any social security benefits. Mr. CARTER. As I say, that is one of the reasons that I think we are attempting to increase that dollar amount. Mr. GOODELL. I would appreciate it if you would check the basis for the figure on "poverty-oriented" Federal spending. As I say, my memory is that it is $32 billion that Secretary Celebrezze testified to 3 years ago. Check what was involved, what he was including in that PAGENO="0483" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1321 $32 billion, and give me a comparable figure now for what we are spending in 1967 of Federal moneys that are poverty oriented. Then, if you agree to refine these figures to arrive at the $26 billion which you estimate now goes to poverty-oriented programs, please give us a breakdown for the record of the amount for each program that adds up to $26 billion. Will you do that? Mr. CARTER. We will attempt to comply with that insofar as we can for the record. Mr. GOODELL. I believe I now have here the estimate Secretary Celebrezze gave, which appears to be a total of $44 billion. Mr. CARTER. I can only assume he included a much higher percent- age of the social security payments than we have included, because that is the only way that amount of money could come from. Mr. GOODELL. If you would check it out, I would be interested in having it. Mr. CARTER. Yes. Mr. GOODELL. I have one other general question, and then perhaps we will give you a chance to finish your statement. Of the estimated 32.7 million persons in poverty in the United States, by the present arbitrary standard of measurement, it is my understanding that 27.3 million are in the nonaged category, 27.3 of 32.17 million. Given this situation we are talking about, 27.3 million people who are not aged, I presume within that 27.3 million people there are categories of people who will be extremely difficult, if not impossible, to reach because of health problems, disability, handicaps. What is your general estimate, Mr. Carter, of the number or per- centage of these people who can be reached and made self-sustaining through a program such as work experience or other programs? Mr. CARTER. I don't pretend that I can answer that, but I would point out that a very significant portion of those who are poor are children, and they are children of either a mother who is taking care of them or, in a smaller number of cases, fathers who are unable to work, for one reason or another. Mr. GooDm~L. For the record the figures I have show that 6.8 mil- lion of those in poverty are family households headed by females. That is 6.8 of the 27.3. Mr. CARTER. I point out that a substantial number of the figure which runs, probably half of the amount are children, that .is, who are in poverty. Then we have a significant portion who are people who are work- ing every day and who have children as well, but are poor because they can't earn enough money. Mr. GOODELL. Right. Let me ask you a question. You are not saying that this significant portion, perhaps running up to half, who are children, cannot be helped, are you? Mr. CARTER. On the contrary, I am trying to suggest- Mr. GOODELL. You would reach, presumably, all of them if you reached the head of the household and got him a job where he could support his household, couldn't you? Mr. CARTER. Yes, plus helping them to get the kind of education PAGENO="0484" 1322 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 and skills and cultural opportunities themselves. This will mean that they can move out of poverty, certainly, within their generation. Mr. 000DELL. I take it from what you say that children are half of this total number of 27 million in the nonaged poor category. A more significant number would be the number of children who are in fami- lies where the head of the household is unreachable because of handi- caps beyond our capability to overcome. Mr. CARTER. What I am' trymg to indicate is that there are a num- ber, as you say, of cluldren who can be helped if their parents can be helped. A number of the parents are persons who are employed either every clay or a significant part of the week but still cannot earn enough money, particularly with larger families, to get out of poverty. Then there are mäthers who in many cases could be employable, par- ticularly after the children grow beyond the very young period of their life. Therefore, a combination of jobs and better income support for peo- ple who need income support, plus the other kind of programs which provide the education, the new opportunities, and so forth, stimulated by OEO-the combination of those things-would go a long way to- ward cutting very deeply in that poverty number. Mr. GOODELL. I did not mean to ask you in~ an unfair way to give me a precise figure. I take it from your general answers that your are optimistic that we can reach a significant number in this group Mr. CARTER. lam optimistic that we can if we are willing to put the resources into it, that we can. remove a lot of people, an awful high percentage `of those we now classify as "poor," from poverty, yes. Mr. GOODELL. Of course, removing poverty would mean a variety of ways, including just plain income maintenance. Mr. CARTER. I included that as one of the tools. As you yourself said, there may be some people in this group who, because they are physically handicapped-we have already taken the aged out-or are mentally handicapped, or becatise in some transitional period they are poor, simply cannot- Mr. GOODELL. Recognizing that the only point I am making is that I take it that you are optimistic that we can reach a significant number of this 27.3 million of nonaged poor and make them self-sustaining--- Mr. CARTER. The answer to that- Chairman PE~INs. I am going to interrupt the colloquy, as valu- able as it is, because' Mr. Dellenback is going to leave, and I will ask you to yield to Mr. Dellenback for a few moments. Mr. GOODELL. I understand. I think we have come to a' very good interruption point, and I will yield. Chairman PERKINS. Go ahead, Mr. Dellenback. Mr. DELLENBACK.. I apologize for having missed a portion of this while I was out. `I have read the statement, and I caught the first part of what you gave. I have read your complete statement.,~ Mr. Carter. There are a couple of general questions that I am concerned about `that don't become clear to me as I read the Secretary's or your con- stant backing of OEO. Now~ you favor the purposes and the programs that OEO is ad- ministering ~ PAGENO="0485" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1323 Mr. CARTER. Yes, sir. S Mr. DELLENBACK. You indicate also in your statement that you favor their administration. As I read your full statement, we find constant evidence of the strong interrelationship that exists between. HEW and OEO now. Has this worked smoothly in your relationships with OEO? Have you been able to administer your joint programs effectively and well without friction? Mr. CARTER. I would say we have developed very excellent working relationships with OEO. S Mr. DELLENBACK. You indicate, for example, that in child-parent centers, in Foilowthrough as you pick up what happened in. Headstart and go beyond that, that there is more of what OEO has been doing shifting over to HEW. There are programs that you are5 picking up that either OEO has administered before or hasn't done before, and you are going to pick them up. Do you anticipate any difficulty in continued strong, close associa~ tion between HEW and OEO in these areas? Mr. CARTER. No. I want to make clear that we have no problem. We are working these things through OEO. We are trying to affect institutions simply, not what we are doing here in Washington. `We are also trying to effect institutional changes in the community. I am not saying, by any means, that there are not problems that have to be worked through. Mr. DELLENBACK. You are going to be primarily responsible for Foilowthrough? Mr. CARTER. True. S Mr. DELLENBACK. Initially, I gather from your statement, OFO and HE'W will check out the project. Then, as soon as it gets past the initial stage, HEW will be responsible for it. Is that correct ? Mr. CARTEL Primarily. S Mr. DELLENBACK. `Would you feel that you could go further in this direction and, in the years that lie ahead, take over greater portions of what is involved either in Foilowthrough or in Headstart ? Mr. CARTER. I have to answer that by saying that as far as the future is concerned, we have to see what kind of progress we make in bring- ing about significant changes in the major institutions that have to adapt, such as the health institutions and the like. S What I am trying to say is that the thrust of our statement is that, right now and for the foreseeable future, w~ see a. very desirable role for OEO to play of good in stimulating and innovating, and so forth. As we find areas, we work together and find areas where that kind of adaptation has gone on in the principal organization or institution at the community level that can take over in responsibility.. S S There has been consideration of giving more and more responsibility in that area to our administration and to the institutions which we support Mr. DELLENBACK. Mr. Carter. I don't anticipate for 10 seconds that you would sit there and, in view of the administration position, say to us that you think OEO ought. to be abolished or a. . great many more projects ought to be shifted to HEW. . 5 . 5 5 5 I recognize your position. I don't accuse you of, in any wise, not stating that which `you believe But on the other h'u~d I do not expect you to say anything else along this particular line. . ... .. 5 5 PAGENO="0486" 1324 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Let me ask you this question. What if the Congress were to deter- mine that the Community Action Program should be placed in the hands of HE'W, would you have the capacity to administer this program? Mr. CARTER. Of course, that is an assumption. I would extremely regret it if the Congress made that decision, because I think it is a wrong decision. Mr. DELLENBACK. Because of your incapacity to do the job? Mr. CARTER. Because I think the best place to do the job is in OEO. Mr. DELLENBACK. HEW would not have the capacity to do the job effectively and well? Mr. CARTER. I think, sir, I would like to reiterate what I have said. The best place to do it-that is, stating the universe, including HEW-is in OEO. Mr. DELLENBAOK. Regardless of your opinion and evaluation as to where it could best be done, in your opinion, if the Community Action programs were to be placed in HEW, could you handle them effective- ly and well? Could you administer these programs in HEW effectively and well? I don't ask for a comparative evaluation of whether you think some- body else can do the job better. Let me ask you whether you feel HEW could handle these programs effectively and well. Mr. CARTER. I think that would present a very serious question. We have a major department administering many, many programs. We are engaged in our own efforts to bring our programs under the best possible administration. Secretary Gardner is devoting an awful lot of attention to that, in- cluding the organization of the Department. I think, leaving aside the issue, I think it would be really question- able whether the Congress in this present posture in time should under- take to transfer a major program, such as the Community Action jprogram, to HEW. Mr. DELLENBACK. Your answer is not responsive. Chairman PERKINS. He is trying to answer it the best he can. Mr. DELLENBACK. I recognize the difficulty of Mr. Carter's posi- tion. I stated that initially. He keeps giving me a comparative evalua- tion of whether or not he feels it could better be done- Mr. CARTER. No, sir; I think my last answer was not comparative. I did not mention OEO in my last answer. I attempted to be respon- sive to your question. I said it would raise a serious question. We have not considered this kind of possibility. You are asking me today-I am telling you one of the serious ques- tions that would occur to us is if Congress were to transfer these programs. I cannot conceive that Congress would transfer these programs. You are asking me an iffy, hypothetical question, and I am trying my best to respond. Mr. DELLENBACK. Do you have in HEW and in other programs- and I don't need specific answers as to where, but in any of the pro- grams that you are administering-the personnel and capacity to in- novate and experiment? Mr. GARTER. Certainly we have the capacity. We do it in a number of different areas. PAGENO="0487" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1325 Mr. DELLENBACK. Do you feel that in other branches of the depart- ment which are within your jurisdiction you then are able to do crea- tive, forward-looking thinking instead of merely administering pro- grams which have been created by others? Mr. CARTER. Yes. I think, though, that what ought to be made clear is that we are talking about innovations. We fund and have funded a number of demonstration programs, as well as other programs which are insured of their value and are quite important. We will be doing more and more of this, I think. But our main mission has been to support the principal institutions in the society that provide education and health and welfare, all such institutions. This is not any criticism of us or any criticism of the educational community. All institutions have a tendency to be concerned primarily with those issues and those programs, that whole structure, which they have to construct in order to carry out their mission. It is extremely dif- ficult to bring about change in those institutions from within. This is not a new thought. This is something that sociologists and others who have observed political institutions have said for 50 years or more. What OEO has contributed, and it seems to us has a real necessity for it to continue to contribute, is this kind of large-scale innovation, stimulation, focusing on needs of poor people. I think this is the distinction between what we may be doing, innovating in any par- ticular kind of program area. And this is a very broad focusing, when we try to identify the needs of the whole population group in our society and try to see what is necessary to better their condition. Mr. DELLENBACK. Do you really mean that HEW in its relatively short existence has already hardened so much bureaucratically that it cannot strike out into new fields effectively, that it has become so much a part of the establishment that it is locked into that it needs some outside stirnulus-~------- Mr. CARTER. I am saying that the major institutions which we sup- port-and I am talking about the institutions of education, health, and the like-are concerned primarily with the development of programs in their area and with the broad-scale development of those programs. We are talking about a population which has not been served well by any of our programs. I am not simply talking about the programs in HEW. We are talking about a focus on doing something about their problems and a continuing attention to that, not simply atten- tion among a number of other things which the people in education 1~ave to attend to, or the people in health have to attend to, and so forth. I mean the production of more doctors or other professionals, and all the other considerations that they have to look for in the whole field of health and research, and on and on. We are talking about the focusing on the needs of poor people in this country who, by and large, have been shut out of the advancing of this society. Mr. DELLENBACK. Are there other major groups like this that you feel ought to be also concentrated on by some other new branch of Government in order to give the proper emphasis to such groups existing in society at the present time? PAGENO="0488" 1326 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. CARTER. I think this is the most critical problem that we face. There are other population groups that have problems, but we are talking about one that touches perhaps every other group. This is the most difficult problem, as the statistics that we have gone through around the work experience program, and the like, have shown. We are dealing with an extremely difficult problem, a very complex problem involving many kinds of programs, many services. It is extremely difficult to point to any other single issue where the need is as critical as it is here, except perhaps in the field of civil rights. Mr. DELLENBACK. Do you feel that we ought to establish a new department of some sort in order to take the pressing problems in the field of civil rights and to innovate and experiment where HEW, Justice, and other departments are not doing that job? Mr. CARTER. We have something like that. Congress established the Civil Rights Commission in 1957, and they have been going ever since. They established the Equal Opportunity Commission. I think this does not mean for a moment that HEW does not have to discharge its responsibility under civil rights, and it does not mean that HEW does not have to discharge its responsibility in poverty. But it also means that there needs to be somebody there who is con- cerned about these problems every day and is focusing on them and is trying to find the best way of doing something about them. Mr. DELLENBACK. Do you mean that there are other branches or aspects with which HEW deals in its multitudinous subdivisions that it is not able to concentrate on effectively because they are lost in the general heterogeneity of what is involved in HEW? Mr. OARTER. I am back to the comparative. I am talking about the best solution for one of our most pressing problems of the day. That is the problem of poverty in the United States. Mr. DELLENBACK. We are being hypothetical, I recognize, and any- thing which presupposes a change in that which is must, to a de- gree, be hypothetical. What if there had never been an OEO, would HEW be hesitant? Had Congress faced these responsibilities and decided initially to hand to you and your people in HEW the responsibility for innovat- ing these programs and pushing them forward, would you have said you could not do it? Mr. OARi~I~. It is quite clear that we always in the end undertake to do whatever the Congress asks us to do. But I am trying to say to you that I think Congress made the best decision when they put it in OEO. Mr. DELLENBACK. You have cooperated with the Department of Labor in certain programs in the past, and at present you are still doing so, is that not right? Mr. OARTER. Yes. Mr. DELLENBACK. Is there any great friction in the cooperation? Mr. CARTER. Like between all human institutions, we have our problems, but, by and large, we work well together. Mr. DELLENBACK. Would you anticipate increased difficulty or major difficulty if a phase of the work which OEO is doing were to be placed in the Department of Labor so that some of your dealings would be directly with them, rather than, with OEO? `Would you anticipate PAGENO="0489" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1327 more friction in dealing with the Department of Labor than with OEO? Mr. CARTER. That question is so hypothetical, I really don't follow that question. It seems to me that the issue is not whether there is more friction one place or another, but whether just out of some notion of movrng everything together, or whatever the rationale is, we should just dis- band something that is ongoing and working, and working well, and move it somewhere else. To that, I have to say resoundingly, no, we ought not to do that. Mr. DELLENBACK. That which is, is best? Mr. CARTER. No. In this particular case, OEO, which has been in existence and has been in operation since roughly the beginning of 1965, I think, as the testimony we have tried to give here and the testimony which has been given by Secretary Wirtz and others shows, has made an enor- mous impact on the institutions of this society. It just seems inconceivable to me that it should be said that we ought to abandon that today. Mr. DELLENBACK. Why should we put Followthrough in the hands of HEW instead of placing Followthrough completely in the hands of OEO, because that is dealing with the same group? Mr. CARTER. Let me say from the beginning OEO has delegated pro- grams. The Congress is not putting Followthrough in the hands of HEW. The Congress is putting Followthrough in the hands of OEO. The Director of OEO is saying candidly to you how he expects to administer that program. He says he expects to administer it by dele- gating it to the Secretary of Health, Education, and Welfare. Mr. DELLENBACK. I am aware of this technical point you make. Mr. CARTER. I think it is more than technical. Mr. DELLENBACK. I am interested in your prior statements where you say you feel the value lies in an organization which can cOncen- trate essentially in this instance on the problems of the poor. That it can deliberately decide that a phase of its problem, a phase of its task and responsibility-instead of administering it directly itself-will be subcontracted out to HEW. Now, if the value* really lies in this complete concentration on this group, would it not be better to keep it within its own aegis rather than to pass it along to HEW?. Mr. CARTER. No. I say from the outset of the Economic Opportunity Act there have been delegations of programs. I am trying to explain the rationale for that as I understand~ it. And I think I have some knowledge because I, in a general sense, was responsible for these, some of these delegations in the early days of OEO. The rationale is that there are certain kinds of programs that could be best administered on a day-to-day basis by agencies within the Fed- eral Government that have the contact with the institutions through which these programs.will be run primarily. . . .. . ,. However, there is need for OEO to maintain a supervisory role with respect to policy, a control over the budget,~evaiuation of the program- ing, and a constant capability of taking theprograming'back if it does PAGENO="0490" 1328 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 not work out in the way that they assume that it will at the time of delegation. Mr. DELLENBACK. And you find on the basis of the criteria that you have just. now expounded for us a major distinction between Head-~ start and Followt.hrough? Mr. CARTER. Yes, sir. Mr. DELLENBACK. That in the one instance- Chairman PERKINS. Will the gentlemen yield to me at this point? Mr. DELLENBACK. Yes, Mr. Chairman. Chairman PERKINS. I think it should be pointed out that we have so many Headstart programs that are not connected with the school system, but Followthrough is altogether within the school system~ the public school systems. Go ahead. Mr. CARTER. Public or whatever it may be, it is within the school system. Mr. DELLENBACK. You had another criterion, as I read it. Mr. Chairman, I appreciate very much this chance to question. As I indicated to the chairman, I am already overdue at another meeting. I welcome this chance to deal with Mr. Carter, who performs ably and well. Thank you. Chairman PERKINS. We are going to recess and come back at 1:30. If you want to come back this afternoon, you will have an opportunity to follow up with your questioning. Thank you very much. (Whereupon, at 12:30 p.m. the committee recessed, to reconvene at 1 :30 p.m. that same day.) AFTER RECESS (The committee reconvened at 1:30 p.m., Representative Carl D. Perkins, chairman of the committee, presiding.) Chairman PERKINS. The committee willcome to order. Go ahead, Dr. Carter. Mr. QrnE. Have you gone through foster grandparents? Mr. CARTER. We are starting on foster grandparents. Chairman PERKINS. But before we leave this: I just wonder if it is the intent-I think we ought to get it clearly in the record of ther administration-to cut off what is involved within title V within a period of 36 months. `When we are dealing with this h~rd core, just what construction do we place on this? If we place a 36-month cutoff, if you interpret it that the individual has been on the work experience and training program 36 months and is automatically cut of, I think we should do something about it. I would like to have an explanation in that connection. Mr. CARTER. I would like to turn now to the foster grandparent program. This unique program recruits, trains, and employs men and women, over age 60, whose incomes are below the poverty index to bring personal care to children in institutional settings who have been deprived of the attention of an interested adult. Mr. QUIR. Would you supply that for the record? PAGENO="0491" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1329 Mr. CARTER. I am sorry. Did you ask us for an answer? I regret- We will supply an answer for the record on the issue with respect to the link that people we have not been able to place in programs ran in the program. Do I state the issue? On the 36-month provision in the present title V? Chairman PERKINS. In the areas of the country where you have not been able to place them in employment. Go ahead. Mr. CARTER. We will supply a statement for the record. (The material referred to follows:) ATJGTJST 10, 1967. Hon. CARL P. PERKINS, House of Representatives, Washington, D.C. DEAR Mn. PERKINS: At the time I appeared before the House Education and Labor Committee on June 23, 1967 in connection with the authorization hearings for the Economic Opportunity Act, requests were made for the following: (1) a breakdown by sex for Title V trainees who left projects for reasons other than employment, entered advanced training and completed assign- ment. This information is contained in the enclosed table providing data for the period December 1964 through April 1967. (2) an interpretation of Section 503(b) of the Economic Opportunity Act regarding the 36-month limitation on an individual's participation in a Title V project. Enclosed is a copy of a memorandum dated July 11, 1967 from Mr. Joseph H. Myers, Acting Commissioner of Welfare, which incor- porates the construction of this section by the Office of General Counsel of the Department of Health, Education, and Welfare. (3) a "rebuttal" of the Community Associates, Inc. "Case Study of Leslie, Knott, Latcher, Perry (LKLP) Community Action Council, Eastern Ken- tucky prepared for U.S. Senate Committee on Employment, Manpower and Poverty." Enclosed are comments, as requested, from the viewpoint of the Title V, Work Experience and Training Program. (4) comments on the staff paper entitled "Work Experience and Train- ing" prepared by Dr. Sar Levitan for the Sub-Committee on Employment, Manpower and Poverty of the Senate Committee on Labor and Public Welfare. Enclosed is a general statement regarding Dr. Levitan's paper and specific comments on a number of items in the paper. Sincerely yours, LISLE 0. CARTER, Jr., Assistant Secretary for Individval and Family Services. MEMORANDUM DATE: JULY 11, 1967 To: Mr. Lisle C. Carter, Jr., Assistant Secretary for Individual and Family Services. From: Joseph H Meyers, Acting Commissioner of Welfare. Subject: Interpretation of Section 503(b) of the Economic Opportunity Act. I understand that when you testified before the House Education and Labor Committee in connection with authorizations under the Economic Opportunity Act, the Chairman, Congressman Carl D. Perkins, requested a construction of the 36-month limitation on participation in Title V projects. The following reply has been received from the Office of General Counsel: "This is in response to your request for an interpretation of section 503(b) of the Economic Opportunity Act of 1964, as amended. Section 503(b) reads as follows: "`Work experience and training programs shall be so designed that participa- tion of individuals in such programs will not ordinarily exceed 36 months, except that nothing in this subsection shall prevent the provision of necessary and appropriate follow-up services for a reasonable period after an individual has completed work experience and training.' PAGENO="0492" 1330 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 "The provision in the House bill was identical to the one enacted except that the limit was 24 months. The House report, H. Rep. No. 1568, 89th Cong., 2d Sess., p. 22, contains the following statement: "`No individuals can participate in these programs for over 24 months, al- though followup services can be extended for a reasonable period after the eoinpletion of work experience and training.' `The Conference Report, H. Rep. 2298, 89th Cong.. 2d Sess.. p. 35, states: "The conference substitute differed from the House provision by extending the limit on the duration of work experience and training progrems from 24 to 36 months.' "It seems clear from the language of section 503(b) that the 36 months' limitation applies to individual participation in work experience and training programs and not to the programs or projects themselves. This is reinforced by the House Committee report. The language in the Conference Report sug- gests the contrary, but is directed to the length of the period rather than its effect, and in any event would not, in our opinion, override the clear langtiage of the statute. Thus, it would be permissible to extend or review a project which has been in operation for three years or more. "Although the 36 months' limitation is imposed on individual participation, the statute directs that it be achieved through project design. Accordingly, in the formulation and approval of projects-and especially in connection with grants for periods approaching or extending beyond the project's third birthday, as well as for periods thereafter-particular attention must be given to compli- ance with the statutory limitation. "Section 503(b) allows some flexibility in directing that projects be designed so that individual participation will not ordinarily exceed 36 months. There is implicit recognition that, while participation in a work experience and training program for three years or less may be sufficient for most individuals, there may be some few (perhaps especially disadvantaged) individuals for whom a longer period is necessary. "Also, in the carrying out of a project, there may be specific cases where an individual has been ill or for other good reason prevented from. following his employment plans or training schedule, so that his participation in the program beyond 36 months would be warranted. Similarly, if a participant has fallen behind and can complete his schedule within a few weeks, an extension might be granted. These are only examples, and we do not attempt here to envisage all of the situations that would justify an extension. "The House Committee report states that no individuals can participate in the programs for more than the specified limit. We do not view this statement as superseding the language of the statute, but it does indicate the Committee's intention with respect to section 503(b), and it suggests the need for restraint in allowing individuals to participate in projects beyond 36 months." Mr. CARTER. The fOster grandparent program is operated by the Department's Administration on Aging under contract with the Office of Economic Opportunity. The Administration on Aging ordinarily deals with the range of problems confronting the elderly, regardless of economic and social condition. However, the combination of intimate lmbwledge of the problems of old age with a focus on poverty as it affects the aged, makes for an especially fruitful partnership between OEO and the Admmistration on Aging in the foster grandparent program. At the present tlme, we ha~ e funded 48 projects with opportunities ~orover 3,000 foster grandparents. They serve in 108 institutions in 33 States and Puerto Rico. By the end of June, we anticipate 60 projects ~with 4,000 foster `grandparents to serve 9,000 children. The amiual cost of these projects will be about $10 million. Over 100 other commurnties, mstitutions, and organizations have expressed ~n mterest m startmg local foster grandparent programs PAGENO="0493" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1331 The foster~ grandparents work in many different settings suëh as foundling hospitals, pediatric wards of general hospitals, institutions for retarded children, facilities for the physically handicapped, and in institutions for the emotionally disturbed. Experimental programs are also under way in special classes for the retarded, day care centers, and in correctional institutions. The benefits are clearly manifest. The grandparents have almost unanimously reported that the program has added new dimensions and purpose to their lives. Over 70 percent of the children served have im- proved in social and emOtional behavior or in health and physical conditions Interest on the part of older people is high It has been estimated that there have been at least eight applicants for each position open. Many institutions report that the absentee rate for grandparents is lower than for regular employees. This program has had a deep impact on the, grandparents and chil- dren served~ It is providing resources in `child care and is giving us new knowledge about services to children. It is an opportunity pro- gram that is benefical physically and mentally as well as economically to foster grandparents, children, and the total community. I have touched on the health program relationships in colloquy this morning and I will pass over that to re'id the part of the statement dealing with Headstart and Followthrough Mr. QUI1~. Mr. . Chairman, could I ask one question on foster grandparents? When you talk about correctional institutions, are these correctional institutions wherever young children. are incarcerated? Mr CARTER Yes These would be Mr. QUIR. How young would they be?. Mr CARTER Mr Nash is here from the Deputy Commissioner of Aging Mr NASH (Robert Nash, Chief, Office of Equal Health Opportum ties). The foster grandparents are `serving in. two correctional institu- tions at the present time, in a demonstration sense, to determine whether or not the older person can, in fact, supply the same kind of needs for these youngsters and assist them in overcoming the problems that they have that led to their being in the institution This would be anyone up to 16 years of age Mr QUIR Do you try and find a fostei grandparent who has `t record for himself or herself, so that they can talk from firsthand experi~iice? Mr. NASH.. No, sir; that has not been among the criteria. The em- phasis is upon the ability of the person to give himself and to accept the kind of behavior that the youngster is displaying, so that a rela- tionship can be formed and eventually the child can learn that this is the way they should behave themselves Mr. CARTER. Going ~now to page 12, as to Headstart and Follow- through. As a result of the Headstart experience, it has become evi- dent that the handicaps of poverty can be measurably reduced if well planned, comprehensive programs are made available to poor children. ; . . Chairman PERKINS. Before you get into the Headstart program, I would like to ask one question on the health activities in connection with the activities of the Office of Economic Opportumty.'' . PAGENO="0494" 1332 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 How many States have now taken advantage of title XXIV of the Social Security Act? All the States will provide additional health services to the poor? Do you know? Mr. CARTER. We have it here, Mr. Chairman. Twenty-eight States. Chairman PERKINS. Twenty-eight States. I know my State of Ken- tucky has taken advantage, but still, even in the States where they take advantage of title XXIV, they take advantage of the community health services in addition to that, made available in 1961 by an act of Congress. There is still a gap, and it is only through OEO that you are able to bridge this additional gap at the present time, through the Office of Economic Opportunity. Am I correct in that statement? Mr. CARTER. I would say that the gap that OEO fills is the gap of delivery of services. Chairman PERKINS. Through a community actions program. Mr. CARTER. Yes, exactly. Through the comprehensive neighbor- l'iood health center. Chairman PERKINS. Yes. Mr. CARTER. This brings the serviceS to where they can be made as- sessable and available to the people and provide the very important nucleus for sort of a conduit for title XXIV or other kinds of health programs to get to the people who need them most. And that is one of the chief functions that the neighborhood health center does. It makes quality medical care available so that poor people can take advantage of it. And this is very important .m rural areas as well as in the urban ghetto. Because in the rural areas, you know, there are many places where they just have not been able to get quality medical care, and it is through the exploration of this kind of device that the most hope is held out for that. And it is in closing that gap between the availability of service from a financial point of view and the actual delivery of service to the per- son who needs the service, that the OEO health center plays a crucial role. Chairman PERKINS. Go ahead. Mr. CARTER. I was pointing out that Headstart has proved itself in a variety of settings, not only in schools but through other public agen- cies, in churches, and through nonprofit organizations as well. If this year's budget request is met, nearly 750,000 poor children could benefit from Headstart. This is an outstanding goal. Headstart has made very important contributions to the present well-being and future prospects of young children in poverty. Its pro- grams have opened a new universe of experience that lie outside of the boundaries of poverty and its ghettoes. The Headstart experience has revealed to the community and its institutions that they can deal with the needs and problems of young children and their families with gratifying results. The program has been a pioneer in early childhood development, and it continues to move into new areas. In this coming year for ex- ample, it is increasing the number of 3-year-old participants and ex- ploring the effectiveness for even younger children. Headstart has had profound impact on communities in their provi- sion of child development services. It is influencing communities to PAGENO="0495" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1333 give support to a comprehensive range of services that can benefit young children and their families. OEO is particularly suited for this trailblazing role because of its mandate for innovation and experimentation with new ideas and new combinations of resources to serve the poor. The Nation will be best served by maintaining and developing Headstart under the aegis of OEO. If there has been one generally recognized problem rising out of the Headstart experience, it has been that some of the gains made by poor children as a result of this enterprise are lost once the children are absorbed into the school systems of disadvantaged communities. In a further step to assure that the gains many young children make under Headstart are not reduced when formal schooling begins, $120 million of the Headstart budget for next year will be used for the new Followthrough program. This program, to be delegated to HEW by OEO and to be operated by the Office of Education, will focus on a wide range of remedial services to disadvantaged children in places where there is a high pro- portion of children who have been through the preschool programs of Headstart and title I. The means that have made Headstart successful-specialized and remedial teachers and aids, individualized attention, medical and den- tal services-will be utilized in the early elementary grades to insure that the momentum gained in preschool programs is maintained. Parents of educationally disadvantaged children will be involved in their children's early elementary education, for an informed and co- operating home can greatly facilitate a child's development. Initially, Followthrough will concentrate on programs in kindergarten and first grade; ultimately, Followthrough will extend through the early grades. The $120 million would enable 190,000 children to participate in the program when it is fully operational. These projects will be jointly reviewed and approved by both OEO and HEW in the initial phase ; thereafter,, we will approve the pro- jects in accordance with mutually agreed upon guidelines. Both of these programs-Headstart and Followthrough-are com- plemented by activities under title I of the Elementary and Secretary Education Act. Title I has strengthened school programs for deprived children, some of whom have benefited from Headstart. The Office of Education, of course, is intimately involved with the antipoverty effort. Title I of the Elementary and Secondary Educa- tion Act was formulated in the conviction that educational depriva- tion is ineluctably allied with economic deprivation and that concerted activities of offset that deprivation are an essential part of antipoverty activity. Title I has encouraged school systems to consider support of pre- school~programs to augment Headstart. The Office of Education and OEO have developed procedures for program coordination at the local level between education agencies and community action agencies. These procedures prevent duplication of projects and assure coop- erative support of antipoverty activities for preschool children. PAGENO="0496" 1334 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 CHILD AND PARENTS CENTERS A few months ago, the President in his message on children and youth stated that there was a critical need for services to very young disadvantaged children. OEO will have the responsibility for organizing centers for chil- dren and parents to bring together existing services and offer new ones for this group. HEW has a variety of resources that can be brought to bear in this venture. We are already engaged in work with OEO in this new undertaking. As this review of activities indicates, the Department's participa- tion with OEO in the war on poverty is extensive, diverse, and valuable. In closing, I want to reiterate our strong support of the work of the Office of Economic Opportunity. We look forward to further joint undertakings to achieve our common objectives of eliminating poverty from. this Nation. Mr. Chairman, that concludes my testimony. As I have already indicated, I will be happy to answer any questions. Chairman PERKINS. Let me first compliment you, Dr. Carter, and your associates who appeared here today with you. All have made an excellent presentation, a;nd I think the committee will benefit tre- mendously from your presentation. You will be subjected to further questioning. Mr. Quie has many questions on Headstart and Followthrough. At this time I will call on Mr. Quie. Mr. QuiB. Thank you, Mr. Chairman. First I want to express the keen interest that I have had for a long time in Headstart and the idea of giving additional assistance to young people before they reach the first grade, or kindergarten, beginning at age 3. I have long been a strong supporter of this and have felt that the Congress should establish and commit itself to a. policy, which hasn't been done. And I recognize that the Congress has not done this, but OEO has done it, and has provided a Headstart program, which has been necessary. And proof that it is well accepted is the fact that in the first year in the summertime, as I recall, they were planning on a program of about 100,000 children, and it ended up with something. over 500,000, to show the keen interest among the parents and the community itself. So we have a program here that is well accepted. The responsibility of the Federal Government in this area, and the community that it be done is clear, although there has been some foot dragging in some communities. . I noted that the Economic Opportunity Act had no mention of Headstart to begin with. However, the act now carries a brief section on Headstart, on section 211-1. Now you are going to add a Followthrough program, which I think has proven, in the Headstart program, that you need to carry on with these services in the first grade and beyond, because many of the children that did get a headsta.rt regressed again after they had reached the full school system. PAGENO="0497" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1335 Because we didn't know how to bring them along to make the most of their opportunities. It is extremely unfortunate when young people who innately have the ability to progress and develop as other children do, are as retarded as mentally retarded children, when they don't have this chance. As for the mentally retarded, it is unfortunate, but they were not endowed with capacity; these people were. As I understand it, Followthrough is presently in the law, where the word "Followthrough" shows. Is that correct? And there is nothing in 83-11 which carries through with "Followthrough." Mr CARTER I would assume that is correct Mr. Qtm~. So we then have the legal authority established for this program. Now, I would like to find out how Followthrough would operate. I understand that it will be funded through this authority with OEO. But immediately, it will be delegated to HEW to run the program. And I would like to know how this actually will be functioning. I don't know if Dr. Estes is going to be handling this. Mr. CARTER. I will make the comment: Dr. Estes should answer any questions of that nature. We view this-and I want to make this clear-as OEO's program, and one which they propose to delegate to us, and one on which we have been having of course extensive discussions and negotiations and working through of various policy issues. Fundamentally, the policies therefore are the policies which OEO wants considered in the program taken against what the Office of Education representing HEW raises as far as their operation of the program is concerned. So we are at somewhat of a disadvantage in testifying on this before OEO They have testified on really what is fundamentally their pro gram Within limitations we will try to go as far as we think we sensibly can. Mr. QUIE. It is no more their program than title V was their pro- gram, was it? Mr CARTER Well, it is their program in the same sense, but we ai e talking about something where the policies have not finally been absolutely approved by all parties, all the necessary parties, and have not been issued or promulgated. So, in that sense it is still something which we were talking about m a sort of conceptual way, without being absolutely firm about every aspect of it necessarily. And I know that Mr. Estes planned to be back here Monday to testify with OEO on the legislation as far as it involves Followthrough. And for that reason, I am just saying that it seemed to me that would be a more orderly way of presenting it. We don't want to get into too much detail. We are here at your pleasure, and don't want to preclude you from anything. I just wanted to explain our posture here. Mr. QuIE. Let's get a clear picture today of how HEW is going to handle Followthrough. Because I imagine all of these discussions have already been conducted between OEO and HEW, and at least we have a clear picture as to how it will be conducted, though all the guidelines may not have been completely written. 80-084----67-pt. 2-32 PAGENO="0498" 1336 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. CARTER. WTe certainly will be pleased to discuss that. But I just want to indicate that we cannot speak with absolute authority with respect to a program that has not yet been delegated to us. That is the only point I am making. Chairman PERKINS. Dr. Carter, what you are telling the committee is that the Director, Sargent Shriver, will be the true administrator. I am using the word "true." The true administrator of Follow- through; except as he delegates it to the Office of Education; but that he will be on top with the program at all times, and maybe at. times there may be further understanding or further delegation of authority. But the point is at this time, as I see it, that at this time there is no variance in opinion between Sargent Shriver and the Office of Educa- tion or HEW on how Followthrough will operate. It is agreed that Sargent Shriver will be the Director, and you people will cooperate under delegated authority. That is what you are doing. Mr. CARTER. That is exactly right. And I was saying, moreover, Mr. Chairman, that the delegation has not yet been made, and to that extent this is still even more limited, in the sense that we don't have the program at this time. Chairman PERKINS. And you are professing, or you are making a confession, that since the delegation of authority has not actually taken place, the true administrator is Sargent Shriver at the present time. Mr. CARTER. That is right. Chairman PERKINs. Any more details along that line will have to come from Sargent Shriver, when he comes here on Monday to make the explanation. Mr. CARTER. It just seems to me that would be the most appropriate way for the testimony to be presented. Mr. Qure. Well, confession is good for the soul, I guess. But it seems to me that you know pretty well how a program is going to be func- tioning. It will be delegated as completely as title V, in my under- standing. If we passed 8311, the Congress won't have any additional voice in Followthrough at all, as we could in our Opportunity Crusade. There are only two or three words in the existing act under which it could have been done before. And yet we see thick documents on other parts of the legislation where the Congress effectively establishes policy. So Sargent Shriver is not only going to be the true administrator who will act like other administrators have done in the past, and delegate his responsibility to somebody else. He is also going to be the Congress, establishing broad Federal policy for Followthrough. Now. I think we ought to find out today how some of that is going to function, just to the extent of who is going to handle it once it gets to the Office of Education. The Office of Education traditionally has either dealt directly with local school districts or institutions of higher learning, or else they have dealt through State departments of educa- tion, who in turn deal with the local school boards, who are the govern- ing authority. The Headstart program has functioned through community action agencies or else directly with agencies when no community action PAGENO="0499" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1337 agency existed, in some case, even was the forerunner of the community action agency. This has the effect of reaching children faster than if we had done it through the traditional method of going through the local school board, and brought in other groups than public schools to .a great extent. In faèt, I understand that less than half-what is it, 35 percent-of the Headstart nowis administered through public schools, for instance, and other groups, private groups. I would like to find out how this is going to be done with the Follow- through program. Mr. CARTER. I am going to let Mr. Estes speak to that in a moment. The point I was trying to make: I want to reiterate it, because I think it is important, and I am just hoping we can set some boundaries to the inquiry today, since on Monday we are hearing this very person who will be responsible to the Congress for the administration of the program, since the delegation has not yet been signed, and since Dr. TEstes is going to come back here on Monday to jointly appear with Office of Economic Opportunity representatives to describe to the Congress how the program will be operated. So even though there may be only a few words in the act as to the Followthrough, there will be a complete and ample record, which will provide a legislative history with respect to how this program should be operated. While, in the broad outline, there wouldn't seem any possible objec- tion to Dr. Estes giving his understandings as to how the program is going to operate, I would really hope that you could forebear from pursuing this in detail this afternoon. That is the only issue that I am raising with you. Mr. QUJE. We will forebear pursuing it, unless necessity entails. Mr. EsTEs. I would be hesitant to talk at length on the memorandum and the delegation of authority, inasmuch as they are still undergo- ing revision at this time. Mr. QUIE. Between now and Monday? Mr. ESTES. Yes. In fact, there are sessions going on this afternoon. We hope by Monday we will be prepared to talk about some of the details that you discussed. Mr. QUJE. And OEO has already made its presentation in the Senate. Is that not correct? Mr. ESTES. I am going to appear with them in the Senate. Mr. QUJE. Then they ask questions in the Senate prior to their actually getting on that subject. Mr. ESTES. I will say that our working relationship with OEO has been most cooperative and effective so far as we are concerned, and we look forward to working with them. But Mr. Carter, I believe at this particular time it would be most inappropriate to talk about some of the details in this memorandum of understanding without the Office of Economic Opportunity being here to join with us in this discussion. Mr. QUIE. I know the Russians don't like to be around talking with- out somebody else next to them, but I think in this country you ought to be able to give your expression without OEO judging everything you say. PAGENO="0500" 1338 ECONOMIC O?PORTUNITY ACT AMENDMENTS OP 1967 Mr. CARTER. It isn't a question of OEO judging. Obviously, when the guidelines, the policies, for the program are finally determined, and all the necessary signatories to the delegation have affixed their signatures, this is a matter absolutely available to all concerned, unless there is some decision about doing it at all, before this committee is finished its work on this legislation. That is just my judgment. I. shouldn't say "certainly." My judgment is that. Mr. QuIE. Are you going to sign by Monday? Mr. CARTER. The point I am going to make is that on Monday it seemed appropriate to have the agency that is proposing to delegate- we have no authority with respect to this. This is an act. It is OEO's: bill, to be considered by the Congress. The Congress is given authority to OEO to do something. OEO should explain how it is going to spend the money. We have been in negotiation with them about part of this that they want to administer. But this is their legislation that is involved here, and it seems appropriate for them to testify as to what they plan to do, and then Mr. Estes will be here to respond as to how he sees that, in view of his responsibilities in running the major part of the Office. of Education. Mr. QtTIE. Did you come up here this morning intending not to: answer any questions about Headstart and FollOwthrough, or is this~ something that happened over the noon hour? Mr. CARTER. I think that what we are attempting to respond to is any issues or relationships, and so forth. But as far as the questions. and the detail, I am only trying to put forward what I consider to be,, respectfully, a sensible way of proceeding, in view of the situation as it developed in the testimony. Mr. QuIE. Iyield. Mr. GOODELL. Is there a bill to provide for Followthrough to im- plement the recommendation. Mr. CARTER. I think Mr. Quie pointed to some words that occur In the discussion of Headstart in the act, in the legislation, in referring- to Followthrough activity. Mr. GOODELL. There was a separate message, as I understand or- recollect, from the President, that there was going to be-what is. it-$150 million allocated for Followthrough? Mr. CARTER. $120 million. Mr. GOODELL. I am interested in knowing whether this is coming up as separate legislation and you expect this to be authorized as part of the poverty program? Mr. CARTER. My understanding is that the authority for carrying- this on rests within the authority which the Office of Economic Op- portunity has with respect to Headstart. Mr. GCODELL. In other words, you expect this is going to be a dele-. gation to the Office of Education from OEO? Mr. CARTER. Yes. That is our expectation. Mr. QuIR. Let me ask a few questions, anyway, so that we might. get some understanding before Monday. I am getting more and more curious, you know, about this program. I have been wondering since it was first discussed. I thought then it was a great idea, and still think it is. Mr. CARTER. So do we. PAGENO="0501" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1339 Mr. QmE. I `don't think it should be so dangerous to speak about it. There must be some areas on which you have made some agree- ment. You don't have to feel that you are end'angering a compact between the two agencies if you speak out here on the record, or that it would bind somebody and you might have to renege on what you have said. Is the Office of Education going to administer it, or will it be some- body in HEW or `another agency? Mr. ESTES. It is our understand'ing th'at the Office of Education will administer this program, and it will be the Bureau of Elemen- `tary and `Secondary Education. Mr. QUtIE. And will community action agencies be able to request a grant for Followthrough? Mr. ESTES. This is under consideration at the present time, and I hope by Monday we will be aible to give you more details. Mr. QUIE. That is one of `those certain areas. Will there be an allocation by State? Mr. Esi~s. I am not sure how the formula works with regard to allocation of OEO funds. Mr. CARTER. No. I assume the allocation that applies here will be the allocation that would apply to this general title of the act in which the funds are found. I understand there is an allocation for- mula there. Chairman PERKINS. You mean the general allocation fund as to `Community Action? Mr. CARTER. Yes, sir. Mr. Q[rIE. The $120 million, here, would have to, in some way or the other, be fairly distributed around the country. Will only those who have been in the Headstart program be able to take part in the Followthrough program, or will the Followthrough program be able to be used for any child as he starts off in kinder- garten and first grade who needs additional help that would be' made available in these types of Followthrough projects?~ Mr. ESTES. We would anticipate that the Followthrough program would serve children who had had Headstart experience or other pre- ~school or `kindergarten schooling of high quality. ~That is, we would propose that there be a `concentration of children who had been through, who are "graduates `of," the Headstart pro- gram Or other programs of high quality. Mr. Quji. Have there been any Followthrough programs funded with title I money, which could be considered FollowthrOtigh pro- grams? I know preschool programs have been funded which have been identical to Headstart, because some of them have been partially fund- ed with Headstart money and partially funded with' title I money. `Therefore you could call them identica:l moneys since the money came from both places. ` ` `Of course, I think title I always gives ~them money first, and you have, to wait for `OEO. That `is to the' credit of you people sitting in front of us. ```: ` `* ,`` `` ~` ` Mr ESTES Sixty five percent of our funds m title I went to kinder garten and through six grade. There was a major focus. In fact, we ~re continuing to empMsize element'try `tnd secondary education We PAGENO="0502" 1340 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 have no program, to my knowledge, that concentrates in a comprehen- sive fashion, in a manner that we are proposing under the Follow- through prOgram. The average expenditures range from $25 to some $250 in our title I program. Mr. QmE. I didn't get this last. Mr. Esi~s. $25 to $250 in title I. This is the average expenditure per pupil. You see, as you well know, title I focuses on educational, depriva- tion, and it is my understanding that Headstart focuses on all areas of cultural deprivation. So it is a. much more comprehensive approach that we are attempting to capitalize on in the early years. Mr. Quin. But title I has not been limited entirely to educational programs only? Mr. Esi'~s. No. That is right. We spent 2 percent of our funds, 2.3 percent of our funds, on health services; 2.2 percent on nutritional services. But this is a small percentage when you compare it to what Headstart programs have done. Mr. Qure. Now, what percentage of the money has gone for pro- grams prekindergart.en? Mr. E5TEs. Prekindergarten? Mr. QuiD. Prekindergarten. Mr. Es~res. We have served about 85,000 children in preschool proW grams. I would not have the exact figure. Do you? Mr. HUGHES (John F. Hughes, Director, Division of Program Oper- ations). The figures given were pupil participation, not dollar partici- pation. In other words, 75 percent were prekindergarten through grade six. We assume the dollars followed the same pattern. Mr. QUIE. I wouldn't say necessarily it would be, because it is more expensive to work with educationally deprived children after the sixth grade than before the sixth grade. So I would think the money would~ go to more pupils, the earlier you reach them. Mr. HUGHES. Relatively speaking that is true. Mr. GOODELL. What percentage? Mr. HUGHES. 4.6 percent were for kindergarten; 1.2 percent pre- kindergarten; so a combination of 5.8 percent, almost 6 percent, were either kindergarten or prekindergarten. Mr. QUIE. How do you account for such a low percentage of title I money being used for kindergarten? Don't the public schools recognize the need in the ghett.o of receiving these children? Mr. E5TE5. At the local school level, we always have difficulty trying to establish priorities with the resources that are available to us. Most of the time, our funds that we have for our regular school program, that is, first grade through the 12th-our funds are limited. And it is difficult to find resources to add additional responsibilities to this already over burdened program. Therefore, local school districts find it very difficult, in light of the needs of the existing on-going program, to reserve a portion of these funds for prekindergarten, kindergarten, if they don't already have it, or for postschool activities. There is just not enough money to go around. The local school board has to make a decision with regard to how it is going to use these funds. PAGENO="0503" ECONOMIC OPPORTuNITY ACT AMENDMENTS OF 1967 1341 And for the most part, they feel-I have always felt-that `you need to concentrate on what you have got with the limited resources available. Mr. QUIE. And of course the decision here is up to the local school board plus the State Departments of Education. Mr. ESTES. That is right. These are projects that are developed by local school districts and approved by the State Department of Education. Mr. QUIE. Now, in IHeadstart, a number of these children would go to a private school, rather than to a public school. Because they are in poverty, doesn't mean they all go to public schools. For example, in New York City, a substantial number of children in the ghetto go to the parochial school, because the parochial schools want to serve some people of the community rather than just people from the suburbs driving back and forth to the parochial school, be- cause they are located in the center city. Have you determined how these children will be served with Fol- lowthrough? Mr. ESTES. We want to make sure that these children have equal opportunities and equal services under this program. The details as to how these will be provided are still in the negotiating stage. Mr. QUIE. Now, you will make grants to public schools. There isn't any problem there. Mr. ESTES. We assume that for the most part we will make grants to local eductional agencies. Mr. QUIE. For the most part. Does that mean that you would make some grants to private educational agencies? Mr. ESTES. This is yet to be determined, and we hope that on Monday we will be able to go into detail with.you on this. Chairman PERKINS. Make grants to Community Action. Mr. ESTES. It is entirely possible, so that grants can be made to Com- munity Action, or Headstart agencies, for the conduct of these pro- grams, where a local educational agency is unable, for some reason, to provide these. Mr. ~QuIE. It is a good thing we didn't hold the hearings in the earlier years, isn't it? I feel kind of stymied here. I have some good questions but I guess I will wait, Mr. Chairman, and let the gentleman from New York and the gentleman from Kentucky ask the questions. Chairman PERKINS. Mr. Goodell. Mr. GOODELL. Mr. Carter, will you submit for the record a list of the programs presently administered by HEW that you recommend be' transferred to OEO, so that we can get some innovation into them? Mr. CARTER. I think that the point that we have been trying to make all day is not that the programs have to be shifted from OEO to HEW or HEW to OEO or any other agency. The point we have been trying to make is that OEO is playing a particular kind of role with respect t& focusing on poverty and providing an innovation about poverty and having an impact on the other major institutions that are engaged in one way or another, either directly, peripherally, or in some measure,~ with the problems of the poor. It is not so much one program or another, as it is that kind of focus.. And the ability to stimulate these new programs and to make ~udg- PAGENO="0504" 1342 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 ments about the circumstances and the timing in which they can be built on, built into, the major institutions of our society. Mr. GOODELL. Title I of the Elementary and Secondary Education Act is aimed toward the youngster. Why shouldn't this be adminis- tered through OEO, so that they can give you that focus and that coordination? Mr. CARTER. Title I is a program that deals with one of our prin- cipal institutions in our society, in our community. That is the edu- cational community. Mr. GOODELL. }Ieadstart doesn't? And Followthrough doesn't? Mr. CARTER. Just a moment, if I may. This is a program that goes on a very broad basis, with wide distribution, right across the board, touching the overwhelming majority of school districts in the coun- try, in some measure. And that is a different program altogether from a program like OEO, which attempts to start some new pro- grams that might have and do have implications for education, for example. But they are not developed in a way that says that is going to run through every school district that meet certain criteria. Mr. GOODELL. Headstart and Followthrough? You do not conceive that is the way they will be operating? Mr. CARTER. That is not the way they are operating today. Mr. GO0DELL. You do not have Headstart generally across the coun- try in every community that sees the need? Mr. CARTER. Pretty far from 27,000 school districts, I believe. I am not sure, hut I doubt it is even a quarter of that, in terms of num- ber of projects. Mr. GOODELL. So your criterion is the proportion of school systems that are affected? Mr. CARTER. I am just trying to make what I consider to be a major distinction between the broad support of educational insti- tutions or health institutions or welfare institutions and the kind of targeted innovative thrust that is the responsibility and focus of OEO in dealing with poor people. Mr. GOODELL. I understand the discipline you are under. You must support whatever the administration proposal is. But it is kind of sad to a number of us to see you submitting to intellectual emasculation, which in effect you do, by coming up here saying the only way these things can be coordinated is to have this separate agency, OEO. And I happen to believe there are a great many fine administrators in HEW who have a great deal of background and wisdom and experi- ence in these fields. They don't need to have somebody looking over their shoulder every minute to tell them how to make some new ap- proaches and advance in this area. Mr. CARTER. If you gathered that to be the burden of my testimony, I regret it. Because I don't think I have said that. I have merely tried to point out some of the important contributions that OEO has made and say that I think it is the best way of administeringthese programs. The word "only" is a different universe. My universe was within the framework of "best." Mr. GOODELL. All right. Given the fact that you think it is best that OEO now administers these areas, presumably that philosophy, that concept, would carry through in other are'ts You must be spending PAGENO="0505" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1343 more, for instance, than any other agency of Government in the field of health care, are you not? Mr. CARTER. I would presume that is true. Mr. GOODELL. Do you feel you are incapable of setting up health centers across the country that can meet the needs of the Corps? Mr. CARTER. As I attempted, in answering similar questions from Mr. Dellenback earlier, sir, I tried to point out the difference between a mission which is oriented toward supporting the broad health in- stitutions of this country, towards developing our hospital system, building up our medical profession, toward carrying on medical re- search and all the other things that go into the provision and devel- opment of methods for health care, and a focused day in day out con- centration on the problems of the Corps, and finding ways of getting the benefits of these very programs and services administered in HEW to the poor. Mr. G00DELL. You are writing off your responsibility for finding ways of making programs to help the poor more effectively and focus- ing on the needs of the poor? Mr. CARTER. No, I don't agree with that. Mr. GOODELL. That was the criterion I thought you just expressed. Mr. CARTER. No. I said there is a distinction between having that re- sponsibility along with several responsibilities, and having an agency that has this responsibility day in day out, and that can raise to us and to other agencies of the Government and to nongovernmental agencies the problems and needs, and suggest and try out some new techniques for moving our programs and services, and so forth, to poor people wherever they are, and so that they can take advantage of them to their ultimate benefit and to the benefit of the whole society. Mr. GOODELL. You can't do that in HEW? Mr. CARTER. The best way to do it is the way that we are proposing to do it and have done it in the past 21/2 years, under the leadership of the Office of Economic Opportunity. Mr. GooDEri~. It is better than to have you do it? Mr. CARTER. Yes sir; it is better. Mr. GOODELL. OEO can give more leadership and focus to these pro- grams than HEW can. Mr. CARTER. On the question of focusing on the problems of the poor. That is the mission of OEO. You are extending this to talk about the missions of all these other programs. That is why I have tried to indicate there are many Other missions these programs have. Mr. GOODELL. Isn't one of the missions of the program, that of a large number of agencies, to focus on the needs of the poor? Mr. CARTER. No question about it. Many institutions in our society. But the point is, as I have tried to indicate before in my testimony,. that we have institutions that are carrying on and providing programs and meeting theneeds of people. And as the population changes, what do we find? We found that these programs were serving the needs of the majority of the people very well. But there was a very signifi- cant proportion that were not being. well served; whether it be in education or health or what have you. And that is why Congress, I assume, passed, in 1964, a law which cieated an agency that was going to target in on this group that PAGENO="0506" 1344 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 somehow was shut out of our society and not able to take advantage of the opportunities extended by its institutions, be they public, pri- vate, profitmaking, or nonprofit. Mr. GOODELL. It is your opinion, then, that OEO can better admin- ister a Headstart program than HEW? Mr. CAirr~. That is correct. I think that is the best place for Head- start at this time. Mr. GOODELL. It is your position that OEO can better administer Job Corps than HEW? Mr. CARTER. Better administer Job Corps, you say? Yes. The point I want to make about Job Corps is that here is an effort that has just been started, is beginning to work out the problems and find new approaches to dealing with the very difficult, needs of these youngsters between 16 and 21. And it seems to me that it would be a complete waste to say that we are now going to do something else with that, even before we have had an opportunity to get the full benefits from this particular program. Mr. GOODELL. Have you read the Residential Skill Center section in the Opportunity Crusade? Mr. CARTER. I have read it, sir. Mr. GOODELL. You know we are not just saying we are going to `stop the Job Corps camps. But apparently you oppose a phasing over of the job of administration of the Job Corps to HEW. Mr. CARTER. What I oppose is the radically altering a program that is just beginning to show its impact, and before we can get the real benefits from this program. Mr. GOODELL. Do you define phasing the Job Corps camps over to administration by vocation education as "radically altering?" Mr. CARTER. I think I do. For example, you eliminate completely the experimentations being carried on with the various corporations and others. Mr. GOODELL. Not at all. You haven't read it carefully enough. You are about the umpteenth spokesman for the administration who reads into our program only what you want to find. Would you want to continue to have this program administered under contract with private corporations? Mr. CARTER. As far as the administration in Washington, I don't read it that way. Mr. GOODELL. It is very clear~ in our proposal that they could con- tinue in this way if they wished. This would be a decision to be made by the vocational education people in your department, in cooperation with the State vocational education people in the phase-out period. They will continue to have full authority to fund 100 percent of the cost of the Job Corps centers under vocational education for the next 3 years. They are not put under the requirement of matching funds that is contained in most of the vocational education programs. Recognized here is the need for a special focus-federally 100 per- cent funded-to be coordinated with your other training facilities which are run by vocational men. Let me ask you another question. Did you want to comment? Excuse me. Mr. CARTER. I just wanted to make clear I may have misread that part of your draft. I just didn't see that in there. But I wanted to make PAGENO="0507" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1345 dear it would not make any fundamental difference in my position, be- cause the position I am trying to put forward is that this kind of dem- onstration and undertaking which the Job Corps is, trying out new ways of providing the kind of training which is really going to pull these youngsters through a large number, and compress into just a short time, the educational and other deprivations-I think that the Job Corps in the present setting, the way it is operating, is the best way to undertake that. Mr. GOODELL. And you are saying the vocational educators can't do it as well or better? Mr. CARTER. I can only say I think this is the best way. I can only say that I don't know on any large-scale undertaking that vocational education has undertaken this. Why are we going off into another un- tried effort when we have something that is working. Mr. GOODELL. There is a question of the degree to which it is work- ing. But you are saying: If it is best to administer it under OEO, then apparently they can administer it better than the vocational adminis- trators could. Mr. CARTER. We know this is working. We certainly don't have any significant experience that I am aware of which shows vocational education doing this kind of job. And I realize I am here to answer and not to ask, but I certainly don't see why we should therefore dis- rupt this program in order to shift it over to some other untried means. Mr. GOODELL. There is one very good answer in simple terms, namely, that there are a good many people, including experts in the field, who question whether the Job Corps is working, and how effectively i~ is working. Look at the results that we have-and we have to look at results based upon a polling service, because that is the kind of follow- through they have had with their graduates. They have to hire a polling service to go out and find out what the results have been with these graduates. Go out to community after community and see the way the Job Corps graduates have been dumped at the end of the line. Discover the failure to get them tied into work for which they have been presumably trained in the Job Corps camps, learn about the cost per enrollee. Take note of the fact that you are stigmatizing them and separating them as rejects, rather than integrating them into a facility for all types. All of these things are deeply questioned, you must know, by educators who are thinking on these problems down the line. It is very easy to come forward and say, "This is the best; it is work- ing great." We have spent a large amount of money on the Job Corps camps, `$400 million plus. True, it has helped some youngsters. I am basically very much in agreement with the concept of residential skill centers for people of this nature. That isn't the question. The question is: Is it helping them as effec- tively as we could help them? Isn't there a better way? And I happen to believe very deeply in the experience of the vocational educators who have shown us a better way. . We have had statements made here which seem to indicate you want to come to the aid of unemployed, undereducated youngsters. We have PAGENO="0508" 1346 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 had statements made that vocational educators have been ignoring this need; that all they are doing is meeting the needs of the skilled people, the potentially skilled people. I don't believe that for a. minute. Do you? Mr. CARTER. The vocational educators, it seems to me, by and large have programs focused in the way that they have devel~ped in the schools. And by and large they are not for youngsters who are at the eighth grade of education. They are for youngsters who at least have moved to a level within high school where they can be reached by the kind of comprehensive skilled training over a long period of time which vocational training offers. Moreover, vocational education is giving even greater emphasis to post high school education and to technical school education, and this is all extremely important. It' is what we need in this Nation, in terms of developing the kinds of skill we need. But there is a need to deal with these youngsters who have left school in the eighth grade at the age of 16, or who have left school even after the eighth grade but are functionally below an eighth grade level. And by and large that has not been defined as the role of vocational educators. I am not blaming vocational educators. That has not been defined as their role. I think it is absolutely wrong to expect that the vocational education should become a dumping ground, as you would say, . in a different context, for people who have failed academically. That should not be the role of vocational education. These youngsters need additional help. Mr. GOODELL. You people are the ones who used the term "dumping ground." I never would use that term. Mr. CARTER. You were suggesting that about the Job Corps, and I was just translating it over to vocational education. Mr. GOODELL. I was saying that the approach we have taken in the Job Corps is to say we need a special facility for rejects who have failed where we can put them all together. I have suggested rather that we should integrate them into a community facility where we give special attention to those who have failed, along with the atten- tion we are giving to others. Now, you have used some very adroit phrases, that by and large vocational education has been directed at those who have skill potential and are above the eighth grade. No dispute exists that voca- tional education has other functions such as post high school train- ing; no question about that. But the key point is: Haven't vocational educators been for years focusing on the programs of those who are at below eighth grade level who particularly need this special help, and who are poor?' And are they not capable now of running a program based upon the experience they had for years and years in this field, as, well as or' better.than OEO? Chairman PERKINS. Would the gentleman yield to me? Mr. 000DELL. I would like an answer. Then I will yield. Mr. CARTER. I would like to say that I do not feel that what you have defined in your last sentence is defined by vocational educators as their primary mission. Mr. 000DELL. Primary mission? PAGENO="0509" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1347 Mr. CARTER. Well, I think' that is a very important consideration here. That is what we are talking about. That is what this whole hearing is about today. Mr. GO0DELL. You don't think it is' a significant part of their mission? Mr. CARTER. I would not say it is. Mr. GOODELL. A significant part of the mission of vocational edu- cators- Mr. CARTER. Is to do what? Mr. GOODELL. To reach these people who need help,, that we are talkmg about at the Job Corps level. Mr. CARTER. I would say that the vocational education program, if you take it on a dollar for dollar basis,~ is not significant. I would not say there were not vocational educators who do not think this is a very important part of their mission. But I am trying to say that 1 do not look on that as the primary part or significant part, in the sense of a dollar-for-dollar investment, because the schools all the way along the line have failed these youngsters. Now, why should the vocational educator be called upon to undo all the damage that has been done to these youngsters over the term? These youngsters need an additional special kind of help. Mr. GooDErL. No question. Nobody disputes that. Mr. CARTER. And the vocational administrators have the primary mission of providing our skilled worker force of this country. And what the Job Corps is trying to do is to find a way. , I am not saying the Job Corps is perfect~ I am `not saying the Job Corps is at 100 percent or anything approaching it. I am saying they are engaged on an important undertaking here. They have made mis- takes, like everybody else makes mistakes. ` ` ` But on the other hand, to say that we ought to abandon this where we are beginning to learn something and to try to develop- Mr. GOODELL. Why use the word "abandon" ? Mr. CARTER. I am talking' about the Job Corps. You are turning it over into a different kind of operation. ,` Mr. 000DELL. We are going to phase it over `so that the people who have been working in this field for years and years, given the tools, given the money that we have put into the Job Corps, can do' a better job of it. There are many of us not quite as complacent as you are ,about the inadequacy of the job the Job Corps has done. And we think that there are many vocational ~schools across, the country doing a better job today. And they can help two' or `three youngsters for the same price the Job' Corps is paying to help one. And they are getting better jobs for their trainees at the end of the line, productive and meaningful jobs, with dignity. ` We are not disputing the objective. `We are not disputing the fact that many of these people need this extra effort. The question is: Who can do it best? Mr. CARTER. There is no question that you can point to cases that are excellent in terms of what vocational education is `doing in this field. I am only attempting, sir-and I am sure other people would point to cases where that is not the case, where many people graduating PAGENO="0510" 1348 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 from vocational education schools are in the same plight as you de- scribe for people graduating from the Job Corps. But it seems to me that isn't the issue here. It seems to me the vocational educators are doing a tremendous job with what they have in providing the skilled manpower for this country. That is their primary mission. The primary mission of OEO is to do something about those who. are most depressed and deprived in our society. Mr. GOODELL. The implication of what you say is that the Job Corps enrollee cannot be trained to provide the skilled manpower of this country. Mr. CARTER. No, I didn't say that.. Mr. GOODELL. You said that they provide skilled manpower I con- sider this one of the missions of the Job Corps. Mr. CARTER. It is. Mr. GOODELL. It is one of the missions of the Job Corps. Mr. CARTER. We have a chain there. I am trying to emphasize what I have been saying, that we have been repeatedly talking about the question of priority and focus and emphasis. And priority and focus and emphasis say to us that, given the variety of responsibilities which various institutions have, whether it is in education or health or wherever it is, manpower or health or whatever, we need an agency like OEO to focus on this particular segment of our population, to keep us all reminded of it, to influence our programs and institutions with regard to this segment, to increase their opportunities, to participate in the full life of this society. And that is really the basic difference between us. It is not a ques- tion of one program or another. Chairman PERKINS. Will the gentleman yield to me? I can cer- tainly appreciate that the witness is answering forthrightly. We have run, here, as long as anybody wants to remain. But the gentleman from New York will have all the time he wants. It might be from 6 to 8 or 9. But I don't want him to argue with the witness. I am more or less objecting to his arguing with the witness. Mr. GOODELL. Mr. Chairman, I am sorry. I thought that was more or less the purpose of the hearing, to bring out the points of view and facts of witnesses. Chairman PERKINS. Go ahead. All your questions are very pertinent, but it seems to me- Mr. GOODELL. Let me draw you an analogy, Mr. Carter. If you had a choice, would you prefer that a Job Corps enrollee be offered an opportunity to get the special kind of help he needs in a facility such as the Job Corps today, where all enrollees are in the same status as the individuals that we are talking about. Or would you prefer to see the enrollee placed in a facility that combined other types of training, other types of individual-people who had higher educational levels and skills-an integrated community training facility? Which would you prefer? Mr. CARTER. I think that when you pose hypothetical questions, they sound very reasonable in tone. But I think what we are dealing with, Mr. Goodell, is reality. And reality says that the poor don't get that kind of opportunity that you are talking about. They don't get into PAGENO="0511" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1349 high quality programs integrated with other youngsters of our com- munity by and large. They get educated in schools that are in the ghetto, where for a variety of reasons less money is spent on their education. Mr. GO0DELL. I agree completely with what you are saying, but it is irrelevant to the point I am making. Mr. CARTER. You are posing a hypothetical question, and I am only saying when you are talking hypothetically it sounds fine, but- Mr. GO0DELL. It is not hypothetical. I am asking you what kind of a program can best serve the needs of these youngsters. I don't think it is hypothetical at all. I think it is a very key question. We are spending a lot of money to set up facilities for these youngsters. It isn't hypothetical money. And they aren't hypothetical Job Corps centers. And what we enact in this bill isn't going to be hypothetical. We have a choice here. We can choose to set up facilities that are fully integrated with area residential vocational skill centers that provide the special prograim for the youngster out of the ghetto-along with the provision of serv- ices for a variety of others-in an area skill training center. Or we can continue along the route that. we are on now, to have' special facilities for the rejects. And I am asking you which you would prefer. Mr. CARTER. I can only talk on the basis of experience. I can't talk about what might be proposed by somebody, because I don't `know where that has worked. Mr. GOODELL. Since 1961 I have recognized and a lot of us have' recognized that the schools aren't meeting this problem and we need something special. But we didn't propose the Job `Corps, where you take just poor youth and isolate them and stigmatize them. The re- sult is they have the mark of failure on them. We said: Let's' set up residential centers for those who have to change their residence and their environment in order' to respond. And let's at the same time combine these centers with community skill cen- ters for the others, so that the poor youngster can mix with the others~ and they can graduate from an institution that has some prestige and stature; and so that if they advance a little bit faster than the next guy down the line, they can get into another course provided for those' who come with greater skill from the community. Now, don't you think this is a preferable way to do it? Mr. CARTER. Well, first let me say this. I am going to come to your question directly but first let me say this. I want to make it clear I don't agree with your characterization of the Job Corps, and that is part of the assumption with which we are working. Secondly, I want to say that we are still talking about something as far as I know has not been demonstrated to work. Mr. GOODELL. I will come back to that, because there are a number of facilities like this being run very successfully across the country. I am sorry to hear you don't know about them. But they are the ex- amples by which we set up our proposal. There are many vocational educational schools and technical in- stitutes doing precisely what I described, very successfully. But go ahead. Excuse me. PAGENO="0512" 1350 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. CARTER. I thought you were talking about a residential program. Mr. 000DELL. Residential schools combining those youth at a Job Corps level of performance and attitudes with those at higher levels. Mr. CARTER. I am trying to say, and I am trying to emphasize only this point, that the youngster who is in a kind of academic, cultural, and so forth background, needs special attention, and while you may be able to point to individual cases where this has been obtained, by and large that is not what happens in those settings. Mr. GOODELL. Mr. Carter, may I just at this point emphasize to you that they are going to get the special attention under the approach I am talking about and have been talking about since 1961? In addition, it is 100 percent federally funded, as contrasted with your other vocational education programs. The requirement is: We will give you the money. You set up this special program as a part of your area residential school, of your residential skill center, of your community training center, and we are going to see that there is special emphasis for these youngsters by the very fact That we have put the money in this-100 percent Federal money-for construction and for equipment and for taking care of these youngsters, which we don't do for the other "voc ed" programs. So there is no quarrel about the fact that you need some special emphasis. That will happen under our program. The question is, Do they need the special emphasis in an integrated atmosphere, a skill- integrated atmosphere, to define it even more closely, where they are mixing with those of higher potential and higher development, based upon their background? Or do you want them all together, in Job Corps camps? I don't care that you accept my characterization of Job Corps camps. The question is, Should they all be together in Job Corps camps, or should they be part of a skill integrated center, ideally? Mr. CARTER. You are pursuing this. You have given it a good deal of study and thought. And you are really pursuing it beyond areas of my particular competence. And I don't see what more I can contribute to the remarks I have made. Mr. GOODELL. Well, let me give you a little example of the type of thing, aside from the evidence, which I won't again discuss with you here, as to the problems of the Job Corps. We have done that with Mr. Shriver, and that is his primary respon- sibility rather than yours. I have seen the articles by Mr. Raspberry locally here, the problem of Job Corps kids coming back and not get- ting jobs. Here is a quote from an article m the Washington Star appearing the weekend of June 9. One of the Job Corps enrollees: "You go to some places, and they laugh when you pull out a Job Corps certificate." That comes from a young man of 18, a graduate of a Job Corps camp. We can cite instances for almost anything. But this is an example of a very predominant sentiment. It is a very real problem, not a hypo- thetical problem, for these Job Corps camps. The youngsters at the Job Corps enrollee level who have been able to go to integrated facilities, skill-integrated facilities, run by "voc ed" people, don't have that problem. PAGENO="0513" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1351 They graduate from an institution that has a name, that has some stature and prestige. They have been able to advance as fast as their capabilities permit them to advance. They have been able to take other courses not open to the Job Corps enrollee, when they advance rapidly in a particular area. And they come out with a potential for a job much greater than if they are all stuck in a single facility, all of the same category. This is a very real question. I think that almost unanimously your vocational education people will disagree with what, you say here. They feel that they have been moving in this direction, have been doing a great deal in these areas though nowhere near enough, and given the tools they could do a great deal more, and would like to. And I have yet to talk to anybody in vocational education who doesn't feel they could do a much better job than they are doing in. the Job Corps.: Mr. CARTER. I will only comment on that by saying I am sure the vocational education people can do more, and I am sure they will do more. And the. whole purpose of the various undertakings as far as I have understood them, was the Office of Economic Opportunity, iS to move toward a time when the agencies and the institutions that have primary responsibilities for providing various services can undertake and will undertake to provide the same, to meet the needs of the poor people in the same way that they have met the needs of those who are. not poor. . Mr. GOODELL. You know, I must use the analogy. What you are say- ing to me is comparable to someone saying that you dOn't .need to have the schools and the community on a pattern of mixing those from the poverty areas and those from the better areas. You; don't need to in- tegrate them, don't have to worry about them at all, but just carry on with your present pattern of education. I know you don't mean. it that way, and I know you wouldn't take that vi~w of the matter. It rings very much like the approach that so many have in trying to change our urban school systems today. It seems to me what we need, here, is a new and imaginative ap- proach that will offer vistas unlimited to these youngsters, will offer them the kind of opportunity they can get only if they go to an institu- tion that is designed to take care of the broad spectrum of needs of the community, and not just the needs of a reject. Mr. CARTER. I suppose what I am saying, and I thought I had made it clear from my formal testimony all through the answers I have given to an overwhelming number of questions here- Chairman PERKINS. Will the gentleman yield to me? Mr. 000DELL. Let the gentleman complete his sentence, and then I will be. glad to yield. . Chairman PERKINS. I want to make a comment, The witness~ has been most forthright. He has responded, to my way .of thinking, to the point. There is contrariety of opinion between the witness and the gentleman from New York, Mr. Goodell. And the witness has, to my way of thinking, put in an excellent response, here. I certainly want to compliment him for his forthrightness. He has just stated that he. believesthe Job Corps has a certain purpose and that it needs a Direc- tor and that it takes care of a group of youngsters unskilled, and con- 80-084---67-pt. 2-33 PAGENO="0514" i~52 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 stituting a large segment of the hard-core unemployed, t:he youngster that has been overlooked in the past. And his testimony is so clear along that line that I feel that he has made an excellent contribution here to this committee. Mr. GOODELL. Mr Chairman, I would be the last one to be critical of the witness. I think he has done a superb job, given the disabilities of his assignment here. I kind of have the feeling that if he and I could sit down over a cup of coffee, we wouldn't have any difference of opinion. If he has to express the erroneous view of the administration, he has done a very good job, and I respect him for it. I don't think any- body could have done a better job. But nonetheless, I will say to the gentleman that I very, very strongly disagree with the view that he has expressed. I wifi yield to my colleagues for any questions they have. Mr. QurE~. On Headstart: Do you have evaluation studies now of Headstart that have been completed? I know Dr. Meredith Wilson's National Advisory Committee on Exceptional Children did some looking into Headstart, and I imagine that some of the work the staff has now completed would be valuable to us. There have been studies, I know, of the summer program. Some have been very critical of them, especially when the parents were not involved sufficiently, looking at it as merely a babysitter service. I was wondering what evaluation studies now have been completed and on what ones reports have been received. *Mr. Esa~es. I have not received any of these materials. I am sure some have been completed, at least interim reports. Mr. Qtm~. You haven't seen any of the studies? Mr. Es~es. With regard to your Headstart evaluation programs? Mr. Qtrre. That is so peculiar, that the Office of Education surely should have the interest, the development, of these young people, so that they can adequately pursue a course of study. Or do you have to go to the library of OEO? Mr. Esms. Not at all. Mr. Qtni. You do not get the same treatment that Members of Congress did prior to this hearing. It makes me wonder, since you have not seen any of the evaluation studies yet. Mr. Esms. Let me call on Mr. Hughes. I am sure he might be aware of some of these reports. Mr. HUGHES. Yes, we have received some, including the one done by Mr. Max Wilson of New York City, who entered into the New York City programs-the kindergarten programs; However, I want to make clear that I don't feel the National Ad- visory Council on Disadvantaged Children under Mr. Meridith Wil- son has made any specific studies in evaluations of Headstart projects. They have done such reviews of title I, but they have not looked at Headstart programs, to the best of my knowledge, at least. Mr. QuiB. They have looked at Headstart. Whether the report has found its way into print so that any of us can see it is another question. But could you provide first a listing of some of these? I haven't seen them, but I would like to see some of those reports and I would like PAGENO="0515" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1353 to have Monday, when you come back again, with the information that you will be able to divulge at that time. Mr. ESTES. Yes. Let me say this: We do have a number of evalua- tion reports with regard to several of the early childhood programs. But so far as I know, we do not have the one from the Meridith Wilson committee. Mr. Qmi. Can you submit to the committee some of the studies that you do have? Mr. ESTES. We will be glad to do so. Chairman PERKINS. Getting back to the work experience `and tram- ing program, as I understand the program as presently constituted, you have about 70 percent on public assistance and residuals and 30 percent that are nonpublic assistance recipients. Now, in States like Kentucky, where we do not have the program of aid to dependent children with unemployed parents, and assuming that the bill pending before the House Committee on Ways and Means was approved; that is, H.R. 5710, under section 204 of H.R. 5710, Ken- tucky, for instance, would only be able to have a program like title V by establishing an AFDCTJP program. It would take the General Assembly of Kentucky to do that. And it is doubtful, to my way of thinking, that this would be done in Ken- tucky, because of the lack of resources. Assuming this to be true, `then, in order for the needy people to benefit, since we have, under title V, a definition that includes other needy people in addition to the public assistance categories, then it would be necessary to have a title V program in the poverty bill in the future, if those States that did not have the categorical programs take advantage of it. Am I correct? Mrs. COUGIILAN. You are correct. My understanding of the 5710 provision is that States are expected to move toward the adoption of AFDCUP. And the only reason that the persOns not on public assist- ance were helped under title V is that it was a time-limited experi- mental demonstration program. Now, as part of the transition, there is provision under H.R. 5710 for the Secretary ~to make grants in order to stimulate the adoption of programs designed to help unemployed parents and related mem- bers of the same household. But, as was mentioned this morning, the total amount available in the next fiscal year is estimated at around $20 million. So this wouldn't be a very substantial program. Chairman PERKINS. It is contemplated at the present time, assuming that the bill before the Ways and Means Committee is approved, and this program-title V-is phased out by 1969, that `the States that did not enact an AFDCTJP program-and Kentucky does not have one at the present time-all needy people would be excluded and could not participate in programs similar to title V at the present time. Am I correct in that statement? Mrs. C0UGHLAN. That is correct,' except for these very small projects that might be continued. Chairman PERKINS. Then it is necessary, if you are going to look after the 30 percent that are not on public assistance-the real needy people in the country, at the poverty level, and the real hard core- PAGENO="0516" 1354 ECONOMIC OPPORTUNITY ACT AMENDME~TS OF 1967 that we have a program similar to what we have at the present time under title V. Is that correct? Mrs. COUGHLAN.. That is correct. Of course, there is the position of the States that have moved to adopt the unemployed parents segment of the AFDCTJP program where they are putting up State and local financial, participation, and I think that there is a question of equity that comes mto this, if we continue indefinitely the funding at 100- percent Federal funds under a program like title V. Mr. CARTER. I think, Mr. Chairman, that I will have to say that the administration's position on this, as I understand it-and it should be clear-is the one that Mrs. Coughlan touched on originally, and that is that title V was fundamentally a demonstration and experi- mental program, not a permanent program. Now, Congress is being asked to provide, under AFDCTJP, an opportunity for the States to come into that program, and to the extent they would do that they would be able to use the new community work and training programs to take up the population where title V has demonstrated its effectiveness. Now, I would admit that if a State does not choose or is unable to come into the A.FDCUP program, this poses a problem. But the permanent program- Chairman PEIu~INs. And at that point, we would be discriminating in the instances where we ouly require 90-10. The 10 percent may be put up in kind. And you have a group of people, here, that acquire a stage of an active program before these poor people could take ad- vantage, and had to~ put up 30 or 40 percent in some States. I don't feel that we could afford to leave this gap unbridged. I think we have to do something about that in the interest of the community. Mr. CARTER. In the wisdom of Congress, you would have, of course, to take such action as you see fit. But this title V is a program related to the social security amendments. And it would seem incongruous to continue that at the same time that we are developing a permanent program. Chairman PERKINS. I agree. We put as much as $50 million in it in .1 year, even though it was supposedly a demonstration project. But after we found out the value of it, and then were trying to phase it out and not make any arrangements for the poor that are not for- tunate enough to be in States where they do come along and adopt the AFDCTJP legislation, we should not blame that poor person. It is the duty of this committee to act and do something. And that is my point of view on this problem. Mr. CARTER. I understand that. Chairman PERKINS. There is one further question. You have been interrogated here considerably, Dr. Carter. But isn't it the crux of what you have been saying in all these questions about the Job Corps, Headstart, and so forth, t~iat the basic educational and other institu- tions in our society function just as we expect them to: to serve the large majority of people; and if the social and political forces operate as we expect them to, these institutions would continue to do that, and not focus specifically on the needs of the poor. That is just about what you say; is it not? Mr. CARTER. Yes; I have said the equivalent of that on several oc- casions. PAGENO="0517" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1355 Mr. QUIR. In H.R. 5710, section 410, the community work and train- mg programs by the Secretary of Labor: Does this take any respon- sibility away from the Secretary of Health, Education, and Welfare that he presently has, or is this only additional authority? Mr. CARTER. Well, it is a little bit of both. Community work and training as it presently stands is a program administered entirely by welfare departments. It does not contain, in present law, without amendment, many of the kinds of support for activities that we pay for in title V, say, in the work and training area. What this act would be, would be to provide that the Secretary of Labor should have the primary responsibility fOr providing all of the things that are presently done under community work and training as far as work experience and the like, plus those additional things that we are building in from title V in this general field. Primary responsibility: If he does not exercise that responsibility, then this may be done directly by the welfare agencies in the State. Mr. QUIR. It was my understanding earlier that the new language in the Social Security Act would give the responsibility to the Sec- retary of HEW so that he could delegate a portion of that responsibil- ity to the Secretary of Labor, which fits into the work training aspect. But as I read it, it also gives the responsibility directly to the Sec- retary of Labor, under section 410. Mr. CARTER. The authority is given initially to the Secretary of Labor, although the appropriation is made to the Secretary of HEW. Mr. Qun~. All the appropriations for the operation of section 410 would have to come through HEW. Mr CARTER Yes Chairman PERKINS. Section 204 makes it very clear that States that do not take advantage of the AFDCTJP would have no assistance whatsoever for the 30 percent of the people who are now on the work experience and training program in that hard core group, and those States that do would have to at least put up one third of the funding And I personally feel that the committee somewhere along the line will make a correction and not relinquish control Over title V. We can put something in this bill that will beof benefit to the 30 percent.that are going to be ignored under section 204 of 5710, in the States that have not and may not take advantage of the AFDCTJP programs on or before 1967, where 5710 proposes to phase out title V Would you or Dr Carter care to offer this committee some language along that line that could give some assistance to the people in these States that fail to take advantage of the AFDCTJP, so that the 30 percent that are presently at work in the experience and training program-if we can put something about that group of people, and if you could see the people coming up with some new language for this bill- Mr. CARTER. I can only say that obviously we are supportive of the administration's position. We are certainly always glad to provide what technical assistance we can to the committee. And I am sure we would be glad to work with the committee in carrying out its wishes. But it is difficult for me to. offer language to the committee with respect to any amendment. Chairman PERKINS. This called-for language is for the committee, PAGENO="0518" 1356 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967, Could you come up with some language? Would you suggest that we continue this program beyond 1970? Mr. C~mTR. Do I understand that you are asking us for technical assistance in this regard, Mr. Chairman? Chairman PEmUNS. Yes. Language to leave it in the Economic Op~. portunities Act making it applicable in those States that have not taken advantage of the AFDCUP field. Mr. CAIrn~R. We wifi attempt to get together with your staff to see exactly what you have in mind in an effort to be responsive to that. But as I say, it is difficult for us to formulate policy for the committee in the amendment of the act. Chairman PERKINS. I want to thank Dr. Carter and the others for coming here to appear before the committee today. Mr. CAmmn. Thank you, Mr. Chairman. Chairman PERKINS. Come around, Mr. Boutin, please. We have copies of your statement, I believe. Chairman PERKINS. We have with us the Honorable Bernard L. Boutin, Administrator of the Small Business Administration, who has been before this committee several times. Again let me welcome you here. Do you want to read your state- ment or insert it in the record at this point? Mr. BoUTIN. With the permission of the chairman and the members of the committee, I would like to read the statement at this time, and would be glad to have you interrupt at any time. Chairman PERKINS. You go ahead. STATEMENT OP BERNARD L. BOUTIN, ADMINISTRATOR, SMALL BUSII~ESS ADMINISTRATION Mr. BOUTIN. Mr. Chairman, I very much appreciate the opportunity to appear before you this afternoon to discuss title IV as amen4ed of the Economic Opportunity Act-the economic opportunity loan pro- gram. This, I believe, is a program which has the ingredients to make a substantial contribution to what President Johnson has called an America in which every citizen shares all the opportunities of his so- ciety, in which every man has a chance to advance his welfare to the limit of his capabilities. * We, as a nation, have always proudly identified small business as the backbone of our free enterprise system. It has been characteristic of America that the little man with an idea, or a talent, or an ambition, could enter the stream of small business and, by his talent and his am- bition, grow and prosper. Unfortunately, Mr. Chairman, this opportunity has not always been uniformly open to all of our citizens. Opportunity in the business world has been denied, for example, to some because of race or environment, or poverty, or physical handicap. This unfortunate condition title IV of the Economic `Opportunity Act seeks to overcome. The EOL program was not new to me when I assumed my duties as Administrator of SBA 13 months ago. As you know, I previously served as Deputy Director of the Office of Economic Opportunity and during that time I became thoroughly familiar with this program. All the members of this committee appreciate this was an experi- mental program, with no precedent to follow. PAGENO="0519" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1,9 67 1357 The loan approval portion of the program was delegated to SBA by the Director of OEO, while the Office of Economic Opportunity re- tained the responsibility for the part of the program dealing with Small Business Development Centers. These nonprofit organizations, most of which were funded by OEO, were intended to assist the Fed- eral Government to carry out the mandate of title IV of the act. When I assumed my duties as Administrator of SBA, in the spring of 1966, I initiated a thorough review of the program. Although OEO, SBA, and EDA, were making conscientious efforts to make the pro- gram work, there were several inherent problems which, in my opinion, mdicated a need for certain basic changes in both the substance and administration of the EOL program. First and perhaps foremost, as the committee knows, the program was available in only the 44 communities where Small Business Devel- opment Centers were authorized and operating. Thus, we had the paradox of a program that was aimed at ending discrimination in small business, yet its benefits were available in portions of only 24 States. For example, the constituents of more than two-thirds of the mem- bers of this committee were denied the opportunity to apply for EOL assistance. Literally thousands of additional communities were left out of the program. Many Members of Congress were rightfully asking why it was not available to their constituents. And yet, according to the best information available to us, for fiscal year 1966 the funding for administrative expenses for 37 SBDC's amounted to $3,404,474. It was obvious that it would take many mil- lions of additional dollars to make the program available nationwide, using the SBDC format. Also it became evident that the eligibility criteria, based solely on an applicant's family income, was still shutting out many existing and potential entrepreneurs whose incomes were just above the poverty level, but who still suffered economic and social barriers. Moreover, there were certain administrative difficulties. SBA, m the person of the Administrator, bears full responsibility for all Govern- ment funds that are made available in the form of loans through all of our loan programs, including title IV. However, SBDC employees who were processing our anplications were under the authority of OEO. This division of management control resulted sometimes in delays in the processing of applications. Frequently our professional loan specialists were forced to do extra work due to the inexperience of some SBDC employees. In short, Mr. Chairman, the old system was expensive, and it was limited in scope. Last October, the Congress amended title IV of the Economic Op- portunity Act to give SBA authority over the entire loan function of this program. Just 1 month later, in November, based upon our thorough review, I announced a new concept for the economic opportunity loan pro- gram. First, it was to be immediately available nationwide. I instructed each.of our 81 field offices that this program was to receive high priori- ty. New directives were issued; allocations for loans were increased, and the program was divided into two sections. PAGENO="0520" 1358 ECONOMIC .OPPORflJNITY ACT AMENDMENTS OF 1967, The first of these is the EOL I, with loans up to $15,000 and a term of up to 15 years, under which we provide assistance to those with marginal and submarginal incomes who need our help to expand or strengthen established businesses and those who have the necessary talent, motivation, and hopefully, experience to establish new busi- nesses. The second, the EOL II program, with loans up to $25,000 and a term of up to 15 years, is designed to assist those who, although hav- ing incomes which may be above the marginal level, are unable to qualify under our regular loan programs, have been disadvantaged by factors beyond their control and have been denied the opportunity to compete in business on equal terms. In other words, we have substantially expanded our role and the Government effort to implement title IV. We are, in fact, pushing harder than ever to help the disadvantaged through both loans and counseling. We are attempting, in addition, to stimulate the growth of busi- nesses which will have a beneficial economic impact on the communi- ties in which they have established. Hopefully, these businesses will help not only the disadvantaged person who has an existing or new enterprise but will also help to raise the entire level of living within a given poverty area. In this vein, I would like to stress that in SBA we do not accept the idea that a man in a given neighborhood, or a merchant of a given minority, is confined to doing business with people of his own kind. Wherever possible, we want to help struggling merchants break down such arbitrary barriers and expand their markets. SBA also quickly saw that our, program could never succeed if our employees sat behind their desks and waited for the people who needed help to come to them. Two things were obvious: first, we had to go out in the field and identify these people. Second, we had to do a lot more than just make loans; we had to make the full range of our services available. Today, Mr. Chairman, we are pursuing what we call an outreach program. We are trying to meet the needs of people in the large metropolitan areas, the ghettos that are all too prevalent in Our large urban areas; we, are getting out into the smaller cities and towns; we are reaching into the baèkwoods and truly rural areas where some of the Nation's most severe pOverty conditions exist; we are attempting to help all those who we can identify as needing help. Our outreach program, Mr. Chairman, has shown substantial early success. In New York State, for example, we were able, for the first time, to carry the program to the people in the upstate areas. As a result of our initial contacts, we now have regularly scheduled circuit riders from our Syracuse office visiting Rochester, Binghampton, Elmire, Utica, Ameterdam, Batavia, and Jamestown. In the last 6 months we processed 43 EOL loans and approved 37 for a total of $500,000 in this area alone. At the same time we have established regular visits from our New York City office to Newburgh, Poughkeepsie, Kingston, Ellenville, Albany, Queensbury, and Staten Island, while maintaining 11 full- PAGENO="0521" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1359. time EOL loan specialists in New York City proper to care for the needs of the urban area. ~` Before November, in the eight-State SBA Rocky Mountain area with a population of nearly 9 million people, only `7,752 people in a limited area of only 1 State could participate in the EOL program. There was only one SBDC, on an Indian reservation in South Da- kota. Now our program is available in all eight States and we have, approved 109 EOL loans thus far this fiscal year. The Orlando, Fla., Negro Chamber of Commerce provided SBA with office space so that our representative could bring the program to the needy in that city. Mr. Z. L. Riley, executive secretary-manager of the Chamber, wrote us: "We shall, continue to boost the work and get more prospects as time goes by." Puerto Rico did not have an SBDC. As our new program went into effect, the regional director and State; director of the Farmers Home' Administration joined forces to identify those needing assistance and by May SBA had approved 90 loans. I could. cite many other examples. These simply typify the' pattern. We are making similar headway in other States. In November of last year, Mr. Chairman, we approved 113 EOL loans. Since that time the number of loans approved has increased each month. In May of this year we approved 338 EOL loans. During the first 6 months of the new program, we have approved 1,946 loans- compared with the slightly more than 2,500 loans `in. the. whole previ- ous history of the program, covering a period of 23 months. I am including month-by-month loan statistics,' which graphically portray the trend toward a program of. larger and wider scope. (The table follows:) . ., EOL history-44-community',SBDC program Month . , Number of applications , Number of loans approved value of loans approved January 1965 .. February March ` Anril May June July August September October November December Total Monthly average January 1966 February March April May June July August September October November Total Monthly average 4 17 39 51 69 120 178 ` 196 244 198 178 180 4 2 13 34 31 68 65 150 134 65 174 123 $25,000 14,000 149,000 345,000 343,000 819,000 990,000 2,028,000 1,730,000 662,000 2,085,000 1,337,000 10,527,000, 877,300 1,474 123 863 72 80 180 195 296 280 312 266 246 240 296 281 111 117 149 157 210 234 139 160 ` 148 177 113 1, 125,000 1,038,000 1,339,000 3,359,000 1,828,000 2,104,000 1,393,000 1,529,000 1,271,000 1,653,000 1,018,000 2,672 243 1, 715 156 15, 657, 000 1,423,000 PAGENO="0522" 1360 ECONOMIC OPPORTUNITY ACT AMENDME:NTS OF 1967 Nationwide SBA program Month Number of applications Number of loans approved Value of loans approved December1966 January1967 623 531 540 453 557 507 285 298 297 328 400 338 $2,856,000 3,218,000 3,281,009 3,015,000 4,523,000 3,621,000 February March April May Total Monthlyaverage 3,211 535 1,946 324 21,114,000 3,519,000 Mr. BOUTIN. These figures show that-for the first 6 monthsour new EOL program has been in operation-we are, on a monthly average, processing and approving over twice as many loans, and the dollar volume of these loans is 147 percent greater than it was last year. We have a network of 81 offices throughout the country and every one of SBA's employees has been instilled with the importance and ur- gency of doing the job the Congress wants and the Nation's economi- cally disadvantaged deserve. The full force of our trained professional staff is being brought to bear. Our financial experts are at work and, perhaps more importantly, our trained professional management counseling team is lending its support to the program. We have a responsibility to the applicants, many of whom have little management skill or training, to see to it that they have every oppor- tunity to secure guidance that they need in managing their businesses. By providing management training we can, in many instances, up- grade the ability of a unqualified applicant to a point where he can qualify for a loan. Today, every Economic Opportunity loan application accepted by SBA is examined by a management assistance officer, as well as a fi- nancial specialist. The management assistance officer: (1) Determines whether or not the applicant has a sufficient manage- ment capability to operate profitably the business he presently owns or wants to establish-and thus be able to repay his loan. (2) Determines if a course in management training would qualify an otherwise ineligible candidate for a loan, and (3) Determines what management counseling steps should be taken after a loan has been granted, including periodic reviews of progress and special guidance services through SCORE (Service Corps of Re- tired Executives). The average EOL applicant needs this special help, and we are de- termined to provide it. But it is obvious that we cannot do the job that Congress has en- trustecj to us to do with our staff alone. I would like to cite to the committee what we are doing to carry out the responsibilities Congress gave us in the fall of 1966 through the amendments to the act. We have enlisted the help of literally thousands of people. Whereas a year ago, we were able to help people in only 44 cities in 24 States, we now have contacts in 3,000 counties-nearly every county in the PAGENO="0523" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1361 Nation-through assistance of members of the technical action panels of the Farmers Home Administration. We are working with the Bureau of Indian Affairs of the Depart- ment of Interior and its representatives to help us identify those who need our help in areas in which they have major responsibility. We are working with the Vocational Rehabilitation Administra- tion, and only recently concluded an agreement which makes our eco- nomic opportunity loan program more readily available to the handicapped. We are anxious to work with any group that will help us, whether it be other government agencies at any level, the urban league, cham- bers of commerce, neighborhood service centers, or any other com- munity-based organization. We work closely with community action agencies and we will continue to work with SBDC's wherever they are authorized and funded by OEO or any other agency. In addition to our staff of 4,200 employees, we are utilizing the serv- ices of our 3,000-member Service Corps of Retired Executives. We plan to expand SCORE to 5,000 members in fiscal year 1968. Just last week I sent a letter to each one of our more than 1,600 advisory coun- cil members soliciting their assistance in identifying people who need help and asking the council members to help us expand our Outreach efforts. We also are looking to the future, Mr. Chairman. We are currently engaged in intensive studies and evaluations which we believe will increase the effectivenessof the program. Among these are studies (1) evaluating results of the EOL program to date and seeking ways to improve its operation with particular emphasis on the effectiveness of management training efforts, and (2) examining the socioeconomic conditions in declining neighborhoods in our metro- politan areas. In this second study, we are looking for ways in which SBA's programs can contribute to a reversal of the decline in many neighborhoods in metropolitan areas. As President Johnson counseled me when I took the oath of the office, "Let's tell the cOuntry that the Small Business Administration has reopened doors that were closed too long." In immediate context, his words referred to lifting the moratorium on loans. But in the broader view, I saw in them a directive that the agency get down to the business of reopening still more economic doors: doors that the trends of the last few decades-the urbanization, the automation, the explosions in population and knowledge-have tended to close to many ambitious but less fortunate citizens. Certainly this stands high among the domestic challenges of our time, and we at SBA are proud to have a central role in meeting it. Thanks specifically to the improvements voted by the Congress last October to title IV, I believe SBA has the tools needed `to meet the challenge. I believe the gains we have made since November show we are making strong progress in that direction. Further, the adminis- tration and the Congress have joined together to provide a larger EOL loan program for SBA to administer in fiscal year 1968. The planned $60 million program next year will allow the agency to fur-. ther extend the coverage of this essential program. Mr. Chairman, I, of course, endorse the content of H.R. `8311 and I PAGENO="0524" 1362 ECONOMIC OPPORT1Th~'1TY ACT AMENDMENTS OF 1967 stand ready to ahswer any questions that you or the committee want to direct. Chairman PERKINS. You have given the committee a very forth- right statement. I do have a few questions, Mr. Boutin. You think this program in~ the next fiscal year will be operated independently. Is that correct? Mr. BOrJTIN. As I understand it, Mr. Chairman, since the. amend- ments voted last October by the Congress the loan function itself is performed exclusively by SBA. The question of the SBDC's remains a function of OEO. As I look at H.R. 8311 there are no proposed amendments which would transfer that function, nor would I recom- mend to the committee that these functions be transferred. I think they should remain the function of OEO. We have gotten along ex- tremely well with OEO, or EDA, for that matter, on performing the program with the amendments of last October. Chairman P~KINs. Do you cooperate on making a loan with EDA on the same loan occasionally? Mr. BoUTIN. We have and we can, Mr. Chairman. EDA's program of course is substantially different than ours. Chairman PERKINS. Just how is it substantially different? Mr. BotrnN. They can only operate in certain designated areas where there is substantial unemployment that have been designated as redevelopment areas. We call them EDA areas, as a matter of fact. We can operate nationwide. They have a grant program as well as a loan program while our program is strictly loans. We are confined to small businesses. They can make loans to larger businesses than we can. Chairman PERKINS. How many loans to small business enterprises have you made in Kentucky and particularly in eastern Kentucky during the past year? Mr. B0uTIN. During the past year, Mr. Chairman? Chairman PERKINS. Yes. Compare that with the previous year. Mr. BOUTIN. I do not have the comparison with the previous years, Mr. Chairman, but I can tell you what the total is. Thus far, for this fiscal year we have made a total of 29 loans in Kentucky for the first 11 months of this fiscal year, for a total of $1,288,000. Chairman PEmUN5. As I understand, you have an office in Louis- ville. Is that right? Mr. B0UTIN. Yes, sir. Chairman PERKINs. Do you have a breakdown there as to how many loans were made in Pike County, Ky., during the past year? Mr. BotrrlN. I would have to supply that for the record. I have the loan record for each regional office for this fiscal year but that would cover an entire State or less than a State where there is more than one regional office. Chairman PERKINS. Are you concentrating in the disadvantaged areas from the standpoint of service to small businesses? Mr. BOUTIN. We concentrate, Mr. Chairman~ on every community. There use to he that SBA operated much like a bank and people had to come to SBA for consideration. We have established this out- reach program as of last September where now we are in fact duty stationing people in neighborhood service centers. We have circuit PAGENO="0525" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1363 riders out visiting all the small communities, small counties, working with the chambers of commerce, working with community action agencies. I think the best rule~~ of thumb Ican give you is prior to the amendment by Congress last October almost a hundred percent of the EOL loans were made in large communities in urban centers. Since the ch'rnge in the program, 52 percent of our loans have been in mi al areas. Chairman PERKINS. .1 èertainly want to compliment you on your administration. I think anybody: that looks at the record would have to compliment you as being. a great administrator. Mr. BOUTIN. Thank you, sir. Chairman PERKINS.,TO my way of thinking, you are the best admin- istrator we have ever had of SBA'because you know what is going on and are trying to give this program not only better stability but where the program is weak to give it strength in those areas of the country where it was just about nil, doing nothing. I know the pro- gram has been tremendously strengthened in eastern Kentucky during the past year or sO. What was the figure that you gave us on the increased loans during the past fiscal year? Mr. BOTITIN. Just in the EOL program alone, Mr. Chairman, I think that I could state it another way that wOuld be very' clear to the committee, up until the first of December we made a total of 734 loans covering the entire country under the EOL program. Since the new program went into effect, which is only a 6-month period we have m'tde 1946 loans So, the productivity has increased to a marked degree. Chairman PERKINS. Mr. Quie. Mr. QUIR. Thank you, Mr. `Chairman. I note you say at the end of your statement, "Thanks, specifically, to the improvements voted by the Congress last October in title IV." I wish OEO had been as cognizant of how the changes would actually improve the EOL. As I recall, they ,were strongly, opposed `to the changes I was happy when Congressman Dingell, if my memory serves me correctly, offered the amendment on the floor to transfer this operation over to the Small Business Administration, and that the employees working under' it would actually be responsible to you. It has greatly strengthened and improved the program I have a feeling, if we can be successful in making similar changes in other parts of the programs, we will find the Commissioner of Education and Secretary of L'tbor coming in and saying the s'ime thin~ ~ ye'n from now, "Thanks for the changes you made in the amendment `to the act" Mr BourIN Could I just make `i correction, Congressm'in ~ Mr. QUIE. We made some positive steps last year to give SBA a greater responsibility in operating this program so that it could func tion better. ` ` ` Mr. B0uTIN. I appreciate that very much, but Iwould like tomake one correction. The supervision and `control of `the' employees of SBDC's of course remain with OEO. But the loan function itself- the processing of applications, the approval and the servicing of appli- cations-is within the province, solely, of SBA But we did not get any more control over the SBDC's or their employees,.nor am I sug- gesting it, please, than we had befOre. ` ` " PAGENO="0526" 1364 ECONOMIC OPPORTUNITY ACT AMENDMENTS OP 1967 Mr. GOODELL. Would the gentleman yield? Mr. QuIE. Yes, sir. Mr. GOODELL. It is true, however, though, Mr. Boutin, is it not, that the amendments that you praise in your testimony today were resisted by OEO last year? Mr. BOUTIN. Congressman, I was wracking my brain if that state- ment was made, and I frankly don't remember. I say that very hon- estly. While we did not, shall I say, sponsor the amendment, never- theless we were very pleased with it because it gave us the tools we needed to administer the program properly. Mr. 000DELL. I hope and expect that with some of the amendments that we are proposing, if they are enacted-clearly you haven't spon- sored them-you may be as pleased in the years ahead. Chairman PERKINS. Go ahead, Mr. Quie. Mr~ QuIE. Mr. Boutin, are you familiar with the Krishner Associ- ates evaluation report? Mr. BOUTIN. Yes, I am. Mr. Qtm~. What is your reaction to their suggestion as to OEO pro- gram changes? Mr. BOUTIN. I agree, Congressman, with the statement that they have made that the SBDC's, as presently constituted, are not fulfilling the expectations of the Congress, or the mandate of the law. It just has not been as productive as was anticipated. I think that the way it is being handled now is better. I had taken it-from examining the President's budget and also from statements made by Sargent Shriver-that OEO, and EDA for that matter, were in all likelihood not going to continue to refund SBDC's, nor do I find any request for funds to finance SBDC's. So, as far as the Krishner suggestiou that the SBDC's be abolished, I don't quarrel with that at all. As far as the rather informal type of ar- rangement to assist SBA in our reach, and in providing of manage- ment counseling, I think that that is being done extremely well now. by our Service Corps of Retired Executives, and I take it the Krishner people were not familar with this program-because it was not men- tioned, at least that I could find, and also by the Community Action people. We are getting good cooperation from them. Then, as I men- tioned in my statement, the Department of Agriculture, Farmers Home Administration people, Bureau of Indian Affairs of the Depart- ment of the Interior, many other Government agencies, are assisting us in expanding this program and bringing it to the grassroots. Mr. QurE. Last year we had a little discussion and disagreement on the Charleston, West Va., Women's Job Corps Center. Mr. BotvnN. I remember that very well, Congressman. Mr. QuiE. I was wondering if you read the final report that the minority put in the record. Mr. BOtTTIN. Jam sorry to say I did not. Mr. Qun~. You did not? Mr. B0UTIN. I did not. I take it, it was uneomplementary. Mr. Qum. To set the record straight, I would suggest you look back into it and see how far off the information you presented to us really was at that time. Mr. BoUTIN. This came out at the time I transferred to SBA and, therefore, it did not come to my attention. I heard about it, but I did PAGENO="0527" ECONOMIC OPPORTUNITY ACT AMENDMENTS OP 1967 1365 not get a chance to see it. I can only tell the congressman that I gave him the best information that I had available. ` Mr. QUIE. I hope that the information that is available to you in SBA is better than what was made available to you by OEO. Mr. BOUTIN. I will swear to the information by SBA, because I am directly responsible for its being good. Mr. Qtms. Thank you. Chairman PERKINS. Mr. Goodell. Mr. GOODELL. How much money are you spending on the prOgram you outlined here designed to help the poor and the marginal grOup m the second category ~ Mr. BOUTIN. We have right now for this current fiscal year, fiscal 1967, setaside $50 million for'loan funds. Mr. GOODELL. This comes out of the regular- Mr. BOUTIN. This comes out of our revolving fund, right; but we have to go to our Appropriation Committees and report to them our plans for the ensuing fiscal year so there is congressional control here to an extent. But we set aside $50 million. We are going to use, about $32.5 million this fiscal year. Based, however, upon our projections of the productivity- Mr. GOODELL. Fiscal 1968? Mr. BorTTIN. Fiscal 1967. For fiscal 1968 we have set aside $60 imi- lion, which we think is about right in terms of the productivity under the new program. Mr. GOODELL. I will not take very long, Mr. BOutin. I favor the concept of small business loans in this area. I think the way you have outlined the present program is reasonable and realistic. I would only say, however, that the way you are now operating it is essentially the way we recommended that it be set up in the begin- ning. It seems to me it does present a little example, in capsule, of the value of utilizing existing agencies with existing experience in these areas rather than having a so-called central organization such as OEO just come in with overall authority and delegating it down to the existing agencies. Your testimony on page 4 is a rather eloquent indictment of the way we started the program. It clearly points up that we could have avoided a great many of the administrative problems that occurred in this pro- gram `had we initially recognized that SBA was interested in giving loans to small businessmen; that its administrators would have been delighted to have the opportunity and the authority to make loans to marginal small businessmen and poor small businessmen, but basically the standards of authority under which they were operating did not permit them to do so at the time that the poverty proposals were made. I am quoting from your statements: Moreover, there were certain administrative difficulties. SBA, In the person of the Administrator, bears full responsibility for all Government funds that are made available in the form of loans through all of our loan programs, including title IV. However, SBDC employees who were processing our applications were under the authority of OEO. This division of management control resulted sometimes in delays in the proc- essing of applications. Frequently our professional loan specialists were forced to do extra work due to the inexperience of some SBDO emplOyees. I will cite the apparent recommendation of the administration to `abandon the SBDC's and to move in the direction of having the pro- PAGENO="0528" 1366 ECONOMIC OPPORTUNITY ACT AMENDME~TS OF 1967 gram run through SBA as a special portion of their overall program to help small business. This `I approve very strongly. I think it is unfortunate that 5we did not start that way. Chairman PERJnNS. Before the gentleman continues, I think it should be made perfectly clear, just as you made perfectly clear in response to my question a few moments ago, that, poverty or no poverty, you, operate throughout the country to serve all the people which your program ~as set up for. But ]iere the gentleman from New York overlooks one most pertinent fact in my judgment. The Office of Economic Opportunity was set up to concentrate on the poor and in that type of administration I think, Mr~ Boutin, you will agree, with me that if we were concentrating on the poor alone; that you will agree that the Office of Economic Opportunity could perhaps do a better job than you would do in concentrating to see that loans were put to the disadvantaged only. Mr. BotrnN. I not only agree with the chairman, but. I would like to point out that we still work very closely with OEO. We have mem- bership on the Economic Opportunity Council. We meet with OEO and other agencies at least once a month to look at the total impact of all Government programs on poverty, special problems of poverty. We maintain an excellent liaison with the OEO and with Shriver's office. It just seems to me, Mr. Chairman, that the whole point that I have been trying to make is that here we had a case where OEO did not have the loan, another agency had the loan out, and yet we had a duplication of control over that. And that with the amendment that the Congress voted it straightened out what potentially was untenable without in any way doing disservice to the Office of Economic Op- portunity or the War on Poverty. Mr. GOODELL. Mr. Boutin, nobody is recommending that you not have liaison meetings and try to coordinate with existing agencies. Nobody is advocating that you have open hostility. Obviously those things occur with the existing agencies today and should occur. You are not, however, recommending to us that we transfer this program to OEO so that they can have a specific amount of money, $62 million, that they can delegate to you for the small business program, are you? Mr. B0UTIN. I am recommending to the Congress that they leave *titl~ IV just exactly the w~ty it is. As an example, in H.R. 10682 we would be in a worse situation than we were before the Congress made their amendments because then we would be subject to standanls es- tablished by HEW. You talk about an impossibility of administra- tion. That would typify it. S Mr. GOODELL. Which are you referring to now, 10682? Mr. B0UTIN. Yes. Mr. GOODELL. How do you read that? Mr. B0uTIN. SBA, under the provisions of this bill in making `its loans would be subject to standards that would be determined by HEW. Mr. GOODELL. Where do you get that? Chairman PERKINS. That would absolutely bring about chaotic ad- ministration? Mr. B0uTIN; I would be in an impossible position as far as trying to administer the program. Now I can set the standards as an adminis- PAGENO="0529" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1367 tratoi I think we h~ve worked out woikable standards that OEO has approved and others have approved As an eximple, Berkeley Bui rell for years and years has talked about that are't where no one got any help, that gray area between the poverty level and those eligible for regultr SBA loans Under the new progr'~m th'~t void is filled Mr 000DELL Mr Boutin, let me pursue that point If such a pro vision inadvertently in the drafting slipped in, it certainly was not the intention of Mr Quie or me I don't see it Perhaps you can point it out It is our intention under our proposal to transfer the entire program to SBA to be operated in veiy much the manner you now say you are now operating the program. Do you read our proposal in Opportunity Crusade as giving HEW the power to set standards ~ Mr BOUTIN Yes, I do, Congressman Section 901 says, "Who qual ify under poverty standards set by the Secretary of Health, Educa tion, and Welfare, and to assist in the establishment or expansion of small business concerns which by the nature of their business have substantial and continuing promise of. employing susbtantial numbers of individuals who, with inadequate background . of educational ex- perience skills"-which is still another problem That would limit the program, as a matter of fact, to only those businesses promising to employ people lacking ordinary skills. With the limit of $25,000 they are not going to employ very many people and I frankly could not administer the program Mr G00DEU4 You are somewhat confused They proposed loan authority is twofold. First, you may make loans to assist b.usinesses owned by persons who fall under the poverty criteria set by HEW and applied by you Second, you are granted authority to determine eligibility for loans for expansion of small business, concerns which by their nature hold substantial, continuing promise of employment for individuals of inadequate background or skill These basic provisions derive from the original act Certainly I think you misread the language If necessary we will clarify it and see to it that the only power granted in this instance to the becretary, HEW, is the power generated now under the poverty act, directing OEO to set up stand'irds as to what poverty is That is the intention, to give them the flexibility here to define whom we are talking about in this special program Mr BOUTIN I `im sure the Congressm'tn will recognize that I can only go on what I see on the printed page on both H R 8311, H R 10682 Further complication, exactly what I think would be wrong with SBA, we have no grant programs at all It contains a grant pro vision where we would be given the responsibility of making the judg ments on continuation of SBDC's or funding other profit or nonprofit groups I do not mean to pick a fight with any member of this committee I am only here to testify responsibly as to. what tools I need to admin- ister the program I would like to see title IV left just exactly as it is Mr. GOODELIA. The HEW poverty standards simply provide a means to determine eligibility,for the SBA loans. The grant-making author- ity is identical to the provisions of title IV under which you now operate. 80-084-67-pt. 2-34 PAGENO="0530" 1368 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 We welcome the fact that you are pleased with the amendments in the law that we have been proposing for 2 years, and which you and OEO resisted. Certamly the last thing we want to do at this stage, now that we have accomplished finally what we wanted, giving you full authority to administer this program as we think should happen in a number of other programs, is to move backward and take that authority away from you. If it is a problem of language it will be straightened out and we will be glad to include the changes we made in thelawlast year. Chairman PERKINS. Mr. Boutin, before you make any further com- ment, I want to point out that you have just pointed up one of the great weaknesses in H.R. 10682, commonly referred to as an "Opportunity Crusade." Now you are an administrator with considerable experience in the operation of our Government. You have firsthand knowledge of the operation of the Economic Opportunity Act at the present time. What is your evaluation of the Office of Economic Opportunity as presently constituted in the administration of the poverty program such as we have set forth in ELR. 8311 in comparison with H.R. 10682, the so-called Opportunity Crusade? Mr. Bou?rn~. Mr. Chairman, before I answer that question I would just like to make sure the record is straight, that I did not personally ever oppose the amendments to the OEO of last October, October 1966. Chairman PERKINS. That is my recollection. Mr. BOUTIN. OEO may have but I personally did not, either as Administrator of SBA or individually. As far as the provisions of H.R 8311,1 think, this is good legislation. I said earlier that I most certainly endorse it, not only as a member of the Administration but because I think it is right. I think some necessary changes are being made-I have long felt that we need it-to bring the municipal gov- ernment and State govermnent into the program a lot more than we have in the past. This provides for that. I think a number of other refinements-and I am not totally familiar with all the provisions of the bill but I have read it-are going to meet the needs of the times and therefore I am in favor of it. Chairman PERKINS. Isn't it your idea that the present poverty pro- gram under the Office of Economic Opportunity is getting off the ground and commencing to reach the people that we are striving to reach, the poor? Mr. BOUTIN. I don't think there is any question about that, Mr. Chairman. One of the most glowing statements about the war on poverty that I have heard recently by certainly a very objective and very learned man, I had the pleasure of attending a luncheon given for the purpose of introducing the chairman of the board of the Gen- eral Electric Co., and he spoke of their experience in Job Corps as an example and what it is doing and what an eye opener it had been for him and his colleagues in General Electric, certainly a great and very large company. I think the program definitely has done an immense amount of good. It has a long way to go and it is going to take the patience of the Congress and the public to get there. Chairman PERKINS. I agree with, you it has done a tremendous amount of good. Would it be a mistake in your judgment, to throw PAGENO="0531" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1369 away the experience that has been gained by transferring these opera- tions from the Office of Economic Opportunity to the Department of HEW? Mr. BOUTIN. One of the best statements I have seen in this regard for a long time is the statement made by Secretary Wirtz yesterday before this committee, and I would stand side by side with him in his statement to that effect. Chairman PERKINS. You believe then that we would be more or less derelict in our responsibility if we threw overboard a program that is working in an area of the greatest need? Mr. BOUTIN. I think the concept of OEO, Mr. Chairman, as con- .stituted is a sound concept, and therefore, 1 would not recommend to the Congress that it be dismembered, spun off, at least at this time. Later on perhaps certain components might be spun off. But these programs are still in their infancy. One of the finest things the Fed- eral Government has ever done is this program Upward Bound. Dick Frost, in my mind, is one of the top educators in this country. To put that in an atmosphere which is rather staid in its approach to things-I don't mean this hypercritically, certainly, of the Depart- ment of HEW-I think would be a mistake. I think OEO is an in- novative type of entity coming up with new ideas, trying new meth- ods, having its share of failures but certainly its. successes as well, has been a noble experiment and one I hope will be continued. Mr. GOODELL. Mr. Chairman. Chairman PERKINS. Mr. Goodell. Mr. GOODELL. I will not try to answer. I will simply say that the comment of the gentleman does not come as a great surprise to any of us familiar with his overall view. I recognize it is a sincerely held view. The gentleman started with OEO, was there throughout our hearings last year defending OEO. You may not have personally been one of those who spoke on the subject and resisted the transfer. But last year every amendment that was offered to spin off any por- tion of the OEO package was labeled an attempt to kill off the pro- gram. On it was said, you are not going to have the coordination you need, you need somebody to look over your shoulder to give you a new approach. SBA was among those being criticized as staid, as an agency which could not give the attention to the poor that was necessary without OEO's presence,. driving them to it. Your testimony today with reference to the SBA and the loan pro- gram designed to help the poor and the marginally poor is in very strong support for your view that the existing agencies, given the tools and the authority, can be just as innovative and just as idealistic and just as effective as OEO. And you can eliminate a great many of th~e administrative problems and chaotic situations that result from the structure you have now with OEO looking over your shoulder. I thank the gentleman for his testimony. I recognize that there is sincerity in his opinion here. . Chairman PERKINS. I think you ought to comment on the response by Mr. Goodell. . . . . . Mr. BOUTIN. I would just like to say in response, Mr. Chairman, that I was at OEO for 7½ months. I was here during the hearings of last spring. I testified one day. If memory serves me correctly, most of PAGENO="0532" 1370 ECONOMIC OPPORTUNITY ACT AMENDME~TS OF 1967, th'~t testimony concerned a hotel and adjacent lands over m Charles ton, W. Va., over which there is evidently still a difference of opinion. I do not remember testifying at all on spinoff of functions of OEO, at least personally testifying, last year or any other time. Of coursel had. my beginning in Govermnent with 4 years as Administratorof General Services. Mr. 000DELL. Understandably we could not expect you to speak. up when Mr. Shriver was opposing the spinoff. Chairman PERKINs. Mr. Dellenback. Mr. DELLENBACK. Would you give me one piece of general back- ground information on the SBA? Are all of the OE loans fully Gov- ernment funded? Mr. B0UTIN. No, they are not. As a matter of fact, I can give you the breakdown on that, Congressman, because we can under the law guarantee up to a hundred percent. So let me give you the most recent statistics. There has been a little bank participation in the EO program while there has been a great deal in our regular program. But of EOL 1 loans approved thus far this fiscal year the total of the loans has been $15.7 million, SEA's share $15.6 million. So the banks have put up a hundred thousand dollars. On EOL 2; the total loan money has been $12.2 milliOn. Our share has been $11.4 million. So the banks have put up $800,000 there. So they put up about a mfflion dollars. Mr. DELLENBAOK. Do you anticipate the non-Government share will continue to increase? Mr. Boul'IN. I am sure of it, Congressman. Mr. DELLENBACK. As the program goes along you expect this will be supplemented more and more? Mr. BourIN. Yes. We have a great many of the banks, in fact the first, the First of Philadelphia, is a very good example; they have designated one of their top people to work just in this program in cooperation with the SEA. There are a number of other banks that have shown a like interest~ So I anticipate that there is going to be a very healthy change in this regard. Mr. DELLENBACK. What has been the reaction of any private lending institutions to this advance in SBAloans, EOL 1 andEOL 2, particu- larly 2? Have you had any resistance from them at all? Mr. B0UTIN. Not at all. We have, Congressman, as a matter of fact, just an excellent relationship with both the American Bankers Asso- ciation and the Independent Bankers Association. I think the best illustration I can give the Congress, and this com- mittee, for the first 10 years of this program bank participation-this is total SBA-was running somewhere in the vicinity of 6 or 7 percent. Right now their participation with us on total financing is running about 58 percent, even in a time of tight money. So, things have changed considerably. We have an excellent relationship. Mr. DELLENBACK. I suppose, percentagewise, it is not a major share but you do notice that as time goes along, particularly during this last year, that the commercial lending institutions have tended to reach in and support your work then with EOL 1 and EOL 2? Mr. B0uTIN. Yes, sir. Mr. DELLENBACK. To a greater degree that was true before this last year? PAGENO="0533" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1371 Mr. B0UTIN. I don't have statistics on that so I would be hestitant to answer. My inclination is a definite yes, but `I couldn't document it. Mr. DELLENBACK. How large is the staff of SBA now? Mr. BOTJTIN. Our total staff right now, Congressman, is roughly 4,168. Mr. DELLENBACK. What number of that is in Washington? Mr. BOUTIN. 954,1 believe. Mr. DELLENBACK. How many of your staff do you have with you here today? Mr. BOUTIN. Five, I think I have, including congressional liaison people. Mr. DELLENBACK. I say this not in any way of criticism; as a matter of fact, I rather commend you. I notice how much lower the number of persons in attendance this afternoon is compared to certain other times. I am glad most of your staff is still back in the shop.' Mr. BOUTIN. Thank you, sir. Mr. DELLENBACK. Assuming, as we must, and you recognize this, having had experience in Government, that money resources are limit- ed, which do you tend to prefer? Using what funds are available for intensive coverage, say SBDC's, or the coverage which is afforded under the new program? Do you feel that the limited dollars are going further now than they were a year ago? Mr. BOUTIN. Absolutely. I think under the new program we have absorbed this in reality, Congressman. We have put on hardly any additional people. In other words, we have increased the workload, increased the productivity of our people. `This year our productivity factor has increased 25 percent. With another 5 percent forecast for fiscal 1968. So, the additional costs have been minimal, largely in traveling for this outreach, getting out into the rural areas, doing the circuit riding. `The SBDC program Of course involves paid jobs, non- Government, only quasi-government, at the local level. It would be certainly my thinking that we would be just as well off if minimal funds were utilized for that purpose Mr DELLENBACK Do you feel that so Ftr as the service in p~rticular under the EOL 1 loans is concerned that the people in this grouping are being better served with loans now than they were back a year ago? Mr. BOUTIN. I don't think there ~is any question about it, Congress- man. Mr. DELLENBACK. You feel so far as those in the EOL 1 group par- ticularly are concerned, that they are being better serviced now than was the case in effect when they were being treated as a separate group themselves? Mr. Bom~IN. Yes, I do. Mr. DELLENBACK. I am not seeking to lead you into a blind alley on this. I recognize, as Mr. Goodell pointed out, to a degree your answers are predictable~ and must be. Let us put aside any attempt to lead you in a certain direction, and your predisposition to answer a certain way, and let me tell you what I am reaching for. I am interested in your comments as objectively as we can get them from you. An opinion has run through the last week of testi- mony on the question of whether or not it is better in treating this PAGENO="0534" 1372 ECONOMIC OPPORTtJNITY ACT AMENDMENTS OF 1967 group that we classify as poor, to separate them out and treat theni separately for whatever the program may happen to be, all the com- munity action programs, for example, or whether we can serve them better if we do not pull them out that way but have them as part of the total overall picture. Part of what I hear you saying as I have listened to you this afternoon is in this one narrow area that SBA deals with, really this group is better served by being part of the total picture than they were in this one narrow area of SBA whem we did separate them out. Do you hav~ a general comment on that? Mr. BOUTIN. Yes, Congressman, I do. I think to draw a compre- hensive conclusion from the SBA experience on the administration of *the war on poverty would be a mistake, because ours is a highly specialized program. Making loans, as any banker knows, or as any bank cashier or bank teller or bank president knows, is a complicated business. To offer management counseling is even more oomplicated and more difficult. That is why our Service Corps of Retired Execu- tives-those people who have been vice president of Chrysler, vice president of General Motors, Philco, and all these concerns, plus the owner of a local grocery store-perhaps, have proven so valuable. Mr. DELLENBACK. Excuse me. Are those people purely volunteers? Mr. BOUTIN. Purely volunteers. Mr. DELLENBACK. Not paid-or paid on a minimal basis? Mr. B0uTIN. They are not paid anything at all. We have legislation pending in the Congress so that we can reimburse them under the Administrative Act for their out-of-pocket expenses. Mr. DELLENBACK. Excuse my breaking in. Go ahead. Mr. BOUTIN. I think it would be difficult to try to equate the SBA program as an example with Job Corps, or with Community Action, or with Upward Bound, or Headstart, or one of the others. What I am trying to say to the Congressman, and to this committee, is that while we have separated ourselves from OEO in terms of loan approvals, where instead of the loan applications being processed by people at the SBDC's-not at OEO, but at the SBDC's, so that they come to us directly, which prevents all of this duplication and time consump- tion-nevertheless, we continue to treat them as a part of the war on poverty. We are looking for the disadvantaged; the person who is handicapped because of race or because of geographical location. He may be in western Tennessee or eastern Kentucky or the southern part of West Virginia. Or it may, because of the nature of bankmg in his community; it could be any one of these reasons. Nevertheless, we treat it as a separate entity, altogether, from our regular loan program. We have a separate director of the program- Mr. Philbin-who is here. He has a very small staff of about five peo- pie and they direct the field, loan specialists, our management coun- selors in the exercise of these responsibilities. Mr. DELLENBACK. I recognize the danger of generalizing on the specific-that is taking SBA's experience and* applying it blindly across the board-but I don't think that that danger completely wipes out or nullifies the fact of what you testified. Let me ask you this along this line: Does the fact that SBA has dealt with many nonpoor. i~ you will, mean that you are unable to serve the "poor" ably and effectively? PAGENO="0535" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1373 Mr. BOtTT[N. I would have to say this, Congressman; in order to do it, we have had to triple the training program's internal agency so that these people would understand what the problems are-and what the goal and the intent of the program is-so that, in fact, they can carry it out. Mr. DELLENBACK. We concede this is a particularly difficult group to deal with, and whether they were being dealt with within SBA or outside SBA, the person doing this would need this intensified train- ing. Is this not so? Because you said, yourself, that you use a special department. You don't think your average loan man who would sit in judgment on a loan- Mr. BOUTIN. Oh, yes. Mr. DELLENBACK (continuing). And say, as part of what you do, you will also do this, just intermingled with all the others? Mr. BOUTIN. Exactly. Our people in the field double with all of these loan programs. Our loan offices can handle, side by side, EOL appli- cants, a 502 applicant, a 7(2) applicant, these various SBA programs, related and nonrelated, to the poverty area. Mr. DELLENBACK. What is the function of the special department? Mr. BOUTIN. The special department of five or six people we have in Washington is in fact to develop ~tatistics, develop overview, develop policy recommendations for the Administrator. This is a very small component. Mr. DELLENBACK. Then your people in the field serve, and this word "poor" is a shorthand word-we both understand this is the group* we are striving to reach with all the concomitant criteria-your people in the field serve both the poor and the nonpoor? Mr. BOUTIN. Exactly. Mr. DELLENBACK. Does the fact that these people serve the nonpoor, in one sense, enable them to do a better job of serving the poor? Mr. B0UTIN. Not necessarily. I think this was an accident of the staff. Mr. DELLENBACK. Why don't you strip out those who serve the poor-if they can do a better job-and let them serve the poor? Mr. B0UTIN. Strictly because I am trying to get maximum produc- tivity for the limited staff that I have, Congressman. Mr. DELLENBACK. So you do find they serve more efficiently by serv- ing the poor and the nonpoor? Mr. BOUTIN. I think they serve most efficiently by having expertise in all of our programs. Mr. DELLENBACK. So their very breadth of expertise in the poor area and nonpoor area makes them better able to do the job in the poor area then? Mr. BOUTIN. It is like an automobile mechanic who can work on a Chrysler with equal ease as he can work on an F-85 Oldsmobile. Our people are expected-and are trained-to deal with all of our programs. Mr. DELLENBACK. I. am not trying to lead you into a blind alley, I am telegraphing my punch. I am striving to get an unqualified answer. It seems to me, what you have said to me is: by having broad expertise; they are able to do a superior job for the poor, a better job than if they were trained, assigned the responsibility for working only with the poor. PAGENO="0536" 1374 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Am I reading you correctly? Mr. BOUTIN. If I had unlimited staff, if the Congress gave me a blank check, I think probably I would want to have some people who were doing nothing but, particularly in the large urban areas, doing nothing but working on EOL applications, but Congress has not done that. Mr. DELLENBACK. You and I both know- in whatever, branch of Government we are confining our work-the Federal Governmentjust does not have unlimited money. Mr. Bou'rIN. Exactly. Mr. DELLENBACK. So all the way through we have to have the dollars do the maximum job. Granted that as a criterion, what you are saying is that within your staff, within the area that is your responsibility as director of SBA, you find the dollars go further by not separating out those who deal just with the poor, but taking your well-qualified people and having them deal with the poor and the nonpoor; am I correct? Mr. BoTmN. Congressman, let me answer that by saying if I have any expertise at all, it is in the field of efficiency and economy. I have tried to organize SBA in that fashion. But to draw broad conclusions from that- Mr. DELLENBACK. I am not asking you to generalize beyond SBA. We are talking strictly about SBA but my questions are directed to you within the role that is your responsibility, and I gather from some of the gentlemen here who have had the opportunity to deal with you in the past they think highly of the job which you have done. I haven't had a chance to observe it yet, myself. But within this area that is your responsibility you do say that you, concerned with handling across the board, find that handling the poor and the no~i- poor does not make you do a poorer job with the poor or a less good job. If anything, you do a better job because part of your responsibility reaches beyond them. And when you assign your own personnel in this area, forget about all the rest of the war on poverty, in this area, you feel you do a superior job by having your people not isolated out to deal just with the poor but to deal across the board, you do a more efficient job. Am I correct? Mr. BooTIN. I do what I do as a matter of necessity because I dpn't have people that I can assign otherwise. I think the only exception, Congressman, in the whole country is that perhaps we have a dozen people who because of workloads, simply workloads dealing with strictly EOL programs-in New York the 11 specialists that I cited, these people are largely duty stationed at neighborhood service cen- ters. They are up in Harlem, they are over in the Bronx, they are in Queens. They deal essentially just with the EOL program but there is sufficient workload to justify it. If you get out in a community like Evansville. as an example. God knows what you are going to find. You have no idea what the mix of apnlica.tions is going to be. In summary, I think I can say as far as I am concerned there is no substitute for ability. You get a real bright man or woman with some PAGENO="0537" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1375 expertise and you can train them to do just about anything you want them to do. Mr. DELLENBACK. Let me come back again to one question that it seems to me is significant. I intend to go back and read the record carefully on this but I think I recall your saying that you find that these bright, well-qualified, well-trained people are able to do at least as well and in some instances a better job in dealing with the poor because a part of their responsibility is dealing with the nonpoor. Those weren't your words but this is the paraphrase of what I think the testimony will indicate you said. Is this what you meant? Mr. BOUTIN. No, I think what the testimony will indicate on review, Congressman, what I said was wishing to achieve maximum produc- tivity from our people and with limited dollar available for adminis- trative expense that we have crosstrained our people in these various programs so that they can in fact service all kinds of loans. This is an accident of our own operation, the type of mix that we have to deal with in terms of applications, requests for management counseling. I don't think that it makes a man or a woman on SBA's staff as a loan officer, a better, more effective loan officer doing a better job because he does it on a comprehensive basis or on a limited basis. My own concept of management is that it is better to have generalists with broad knowledge than specialists with limited knowledge. Mr. DELLENEACK'. I like your way of saying it better than my own. Mr. BOUTIN. Thank you, sir. Mr. DELLENBACK. So far as SBA is concerned in setting the terms in dealing with the EOL 1 and 2 loans, do you set different terms? Are you more lenient in allowing delays in repayment or in forgive- ness or terms of this nature? Mr. BourIN. Our regular loan program has' a maximum term of :10 years wherethe EOL 1 and'2 program has a maximum term of 15 years. The regular has a maximum limitation by statute of $350,000 versus the $25,000 `by statute. We have administratively lowered that for EOL 1 to $15,000. It is on an ad hoc basis that we make these determinations. The terms for qualifications under EOL 1 and 2 obviously are nowhere near as stringent as they are under the regular loan program. We do not require the same degree of collateral. We place greater emphasis upon the motivation, `the ability of. the mdi.- vidual applicant without requiring the input of money. Obviously `they have very little or none in most cases. We evaluate very carefully `what they want to do. As an example, in a Negro ghetto area let us say if the tradition has been that they are in the beauty parlor busi- ness, or in the shoeshine business `or some of these limited fields, and have been precluded from getting into the more lucrative and actually *the more important to the local community types of businesses, then we try to concentrate our efforts in broadening the scope of services that are available by the local residents. Mr. DELLENBACK. Do you feel that it would help or hurt the loan process to have OEO personnel involved in the approval or dis- approval of loans? ` ` Mr. BorrrrN. I think it would be a mistake. Mr. DELLENBACK. We are better off to leave it the way we are? Mr. BOUTIN. Yes, sir. PAGENO="0538" 1376 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. DELLENBACK. Really, what YOU do say to me if I read you cor- rectly, is that-and I don't mean to be using judgment words or OEO as being bad or good or anything else-but what you are saying is that you operate more efficiently with the OEO not involved in your admin- istrative process than was the case when they were involved? Mr. BOUTIN. Well, they never were involved. It was the SBDC's who were involved. They have now been taken out of the loan process- ing business entirely by the act of Congress of 1966. So that as far as loan approvals we have exclusive authority. This does not divorce us either from OEO nor from SBDC's because where SBDC's are au- thorized and funded we still work closely with them in terms of Out- reach, identification of loan applicants, the people who need our services and also in counseling. Mr. DELLENBACK. When the OEO and the SBDC's were involved were there more or fewer persons involved in what is now being done by the SBA alone than was the case then? Has this resulted, if I may rephrase my question, in an overall efficiency as far as personnel is concerned, a greater efficiency now than when the SBDC's were involved? Mr. BOUTIN. I am not sure what the difference is between the former employment and present employment within the SBDO's themselves. The impact on employment in SBA has been almost nil. Mr. DELLENBACK. Did the SBDC's provide any management training? Mr. I~ou~rIN. Yes, they did. Mr. DELLENBACK. How does it compare with the training program under SBA? Mr. BoimN. I think we are doing more now than was done before by all agencies combined, largely through utilization of people from community action agencies and our Service Corps of Retired Executives. Mr. DETJLENI3AOK. So in this one regard you are doing a better job now than was being done before? Mr. Boiirr&. I think across the board a better job is being done now than was before. Mr. DELLENBACK. What would you consider the optimum annual budget again, were funds available without restriction, to do the job that needs to be done in the EOL 1 and 2 areas? Mr. BoirrIN. I would not ask, Congressman, for additional funds over and above what we have already asked the Congress for for authorization to use for our revolving fund. I think if we want to go about this in a prudent fashion which we are trying to do, the projec- tion of $60 million with concentration on making good productive loans I think makes a lot of sense. I neither request a decrease nor an * mcrease. I would like to see it left just like title IV alone. Mr. DELTiENBACK. You are talking about fiscal 1968? Mr. Botrim. Yes, sir. Mr. DELLENBACK. I am talking about 1969, 1970, 1971, 1972, what- ever the year may be. Visualizing the needs of America in this area that are served with EOL 1 and 2, while I again commend you, frankly, for this desire to move into size a step at a time and not suddenly wake up full blown, if we are to serve adequately through PAGENO="0539" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1377 SBA all of the "poor," how many dollars annually would we have to appropriate? Mr. BoiniN. I would hesitate to give the Congressman or this com- mittee any kind of projection because it would be strictly guesstimate and it would not be worth the paper it is written on. Bight now we are developing a program memorandum on the EOL program with some help from some people on the outside to determine exactly what the Congressman is requesting. It probably will be 9 months from now, Congressman, before we could give any kind of prudent answer to that, largely because there has never been identification. You now talk about a businessman who has marginal or submar- ginal income and that is only part of the story. How about the people who have the right motivations, the ability, the ingenuity, maybe even the idea for a new product, who wants to go into business? We don't have any idea who he is. They come to us literally out of the wood- work. We go in and publicize our programs and they come to us. You stop to realize that this year in the EOL program, one-third of all the financing we have made available is for new businesses, brand new. They weren't in existence before at all. Mr. DELLENBACK. I see, frankly, a seri~ of things about this that I think are advantageous. Particularly, like the Citizens Corps and VISTA, the involvement of your volunteers has great ripple effect be- yond dollars. This is a fine concept, very beneficial. I can see also if you are able to place these loans effectively and well, which means good management decision in the first place and follow through; you get help way beyond the one persOn to whom you give direct aid. With dollars limited, part of our concern must be to make those dollars go as far as possible. Any time we can get into a multiplier con- cept where the dollars in turn create more and so on, obviously this is beneficial for all of us instead of being a direct benefit and stopping at that particular point. I can see in the work of SBA a great deal of this potential ripple or multiplier effect. Let me ask you just two more questions, if I may. You indicated in your testimony at some point that later on you felt that some of the programs involved in the OEO should be spun off. Which ones and when? Mr. BOtTTIN. I would like to correct, Congressman. I said maybe some time in the future some of these programs can be spun off with- out detriment. I added the words "without detriment" now, not then. I don't know which of the programs or when. I personally don't think that now is the opportune time when the program is only 2 years old. Mr. DELLENBACK. At this time you don't want to identify which ones might underlay your concept or maybe we could without detriment? Mr. BourrIN. I do not have the expertise because I have nOt been over to OEO now for over a year. It would be presumptuous on my part to even attempt to do that with the limited knowledge that I have available. Mr. DELIJENBACK. I will throw one soft one up then and see if you want to hit it. Are there any changes in the present law that from the standpoint of SBA you feel would be desirable to improve the operation of SBA? PAGENO="0540" 1378 ECONO~IIC OPPORTUNITY ACT AMENDME~TS OF 1967 Mr. BOUTIN. Yes. We have a bill before the Congress right now. We have actually two bills. One on the Senate side before the Com- mittee on Finance dealing largely with the small business investment company program and taxation relative to that program, and before the Banking and Currency Committee for amendments to our act, none of which apply to the EOL program. On the House side one of the bills, the tax bill before Ways and Means, and the rest of the bill basic legislation, before Mr. Patman's Banking and Currency Committee. Mr. DEIJLENBACK. Thank you very much. Thank you, Mr. Chairman. Chairman PERKINs. Thank you, Mr. Boutin. You have been very helpful to the committee. Your unequivocal statement, to sum up your testimony, is that none of these programs should be spun off at the present time because we would lose the power that now exists to zero in on the disadvantaged group in America. Am I correct? Mr. DELLENBACK. If I may, I did not read the witness' testimony as saying that. He sa.id the other side of it, that he is not prepared at this moment, since he has been away from OEO now for a period of time, to state whether or not any of these programs should be spun off. Chairman PERKINS. You asked him when they could be spun off,. if he could make a projection in the future. The way I summarized: his testimony was entirely different. Mr. DELLENBACK. As far as the witness' qualifications in this regard, Mr. Chairman, he has already indicated he has been away from OEO for some length of time. Chairman PERKINS. That is correct. But he is qualified to answer thequestion I put to him. Go ahead and answer. Mr. BoUT[N. To answer the question, and I try to be exactly on the same wavelength on the three questions that have been directed to me, one by Congressman Goodell, one by Congressman Dellenback and one by the chairman, I said that it is my view that to spinoff func- tions of OEO at this time would be a mistake. Perhaps in the time future, in answer to Congressman Delleriback's direct question on this, I cannot identify which and when. But sometime in the future per- haps some of these can be spunoff, and added the words "without detriment to the program," but I would not recommend it at this time~ Chairman PERKINS. Thank you very much, Mr. Boutin. You have bean very helpful to the committee. Without objection, a statement that Sargent Shriver made before the Select Committee on Small Business of the Sena.te on March 15, 1967. will be inserted in the record. (The statement follows:) STATEMENT BY HON. SARGENT SHElVER, DIRECTOR, OFFICE OF EcoNoMIc OPPORTU- NITY, BERoRE THE SELECT COMMITTEE ON SMALL BUsINEss, U.S. SENATE, MAIWH 15, 1967 MTr. Chairman and members of the committee, thank you for inviting me to testify before your committee. The relationship between small business and the poverty program is a subject that has occupied much of our attention since passage of the Economic Oppor- tunity Act in August of 1964. As you know, that Act put the Office of Economic Opportunity into small busi- ness loan programs in two areas. PAGENO="0541" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1379 First, under Title Ill-A, loans were authorized to low-income individuals liv- ing in rural areas. Loans under this program that are non-agricultural are de- signed to help the poor supplement their income through some form of small business enterprise. This program was delegated by OEO to the Department of Agriculture for administration where it was, in turn, made a responsibility of the Farmers Home Administration. The major small business loan program under our Act was in Title IV. This established the Economic Opportunity Loan program which we delegated to the Small Business Administration. SBA made the loans through Small Business Development Centers funded by OEO in a number of cities and rural areas. Before I describe these programs in more detail and give you their current status, I would like to comment on the general philosophy of our efforts to eliminate poverty. The end goal of much of our activity is employment. There are two main ways in which someone in poverty but who is in the gen- erally "employable" span of years of, say, between 18 and 55, can get his subsistence. He can get it through welfare, or he can get it through employment. Our emphasis, naturally, is on helping him, earn his living through employ- ment, providing him an opportunity to become a productive member of society and to enable him to support himself and his family in dignity and some security. But not just any job. Often, we hear from the employer .who claims there can't be many unem- ployed people who really want to work, because he hasn't been able to hire a floor sweeper, or a dishwasher, or someone to perform some other menial task. Those jobs don't really take a person out of poverty. They simply permit him to live a little closer to the outskirts of it. The future is almost nil, and he is the first to go at the slightest downturn in the economy. But there is more to it than that. First, almost half of the persons classified as poor are unable to work. Many are too young or in school. Some have family responsibilities that keep them home caring for children. Some are permanently or temporarily disabled and unable to perform work of any kind. Probably around 15 million of the poor are in these categories. Second, most of the remaining poor who can work-and most of them do- cannot get jobs at which they can earn a decent income for various reasons. They lack education in basic and vocational skills; often they cannot read or write or understand instructions. We should bear in mind that although statistics show that it is not uncommon for a poor person to have an 8th grade education, his actual intellectual capabili- ties are more realistically indicated by his reading level. Tests have frequently shown this to be far below the formal grade achievement. In addition, many of these people cannot get jobs because they have a police record. Or there is no transportation between their home and potential em- ployment locations. Repeated rejections by employers have destroyed the motiva- tion of many of the unemployed to look for work. These are the hard-core un- employed and underemployed, and they constitute about 15 million persons. This second group includes a small portion of the poor in urban areas who might have the qualifications necessary to become a successful small business- man-the skills, experience, and determination that can only be obtained through education and some steady, disciplined participatiOn in the world of .work. I think we can say that it is precisely because most of the poor have not had the, opportunity to obtain these attributes and attitudes that they are poor and will continue to be unless we can find a way to help them. These are the people that the programs of OEO and other Federal agencies concerned with poverty are seeking to help. The Job Corps, Neighborhood Youth Corps, Work-Experience, and the Nelson-Scbeuer programs all are directed to- ward the goal of employment training. We are in the process of developing new comprehensive manpower programs with the Labor Department that will reach into the ghetto to the hard-core unemployed, the same areas that have generally been the tarket of the Title IV loan program. ` Our Community Action Programs, health and legal services, neighborhood service centers, adult education-and even Head Start-all seek to supply some of the advantages to the very poor that most of us take for granted. PAGENO="0542" 1380 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967. What I have discussed serves as a backdrop to the area of your primary inter- est, which is small business. Given our strong interest in the goal of employment, it was our hope that the Title IV loan program would make a significant contri- bution to this end. We must admit, however, that the relationship of the loan program to getting people out of poverty has been of considerable concern to us in OEO. We have sought for 2~y~ years to establish whether the needs of small business are con- sistent with the focus of OEO programs on the very poor which I have described. I would like to say, first, that we are fully aware of the financial needs of small business. The inability of some potential or present small businessmen to get credit through regular commercial sources is a very real problem, particularly in the' ghettos. Negro and other minority businessmen, unfortunately, have, been especially vulnerable to what amounts to discrimination in the `money market. It is said that the only color business recognizes is green, but many a Negro businessman will tell you that even having a going concern isn't enough to get a loan. This has led to a sort of no-man's land in the loan field for a good many smalL businessmen. They may earn too much to be eligible for the~ OEO-SBA loan program but not enough for the regular SBA loans, and yet still are unable to get funds from' the commercial market. * Add to these problems an argument over the whole concept of small businesa in poverty areas and you can begin to see the kinds of difficulties we encountered. On the one hand, there is the argument that small business provides stability to such an area, that it provides some employment, that it is a symbol of "sue- cess" to those who would strive for it and that it can fulfill the American dream. of being your own boss. On the other hand, some economists will argue that assisting one small busi- ness to start simply drives another out, that in such a highly-competitive fight for a small market the untrained poor simply cannot survive as small business- men, and that the simple economics and insecurity of many small businesses. make a salaried position increasingly attractive. Despite this dichotomy of philosophies, OEO and SBA sought to effectively implement the Title IV economic loan program. First, there was the problem of how to administer the program, and to make sure that it was available to the poor. For this purpose, we established the Small Business Development Centers in about 50 selected urban and rural areas. Thirty- eight of these were funded by OEO; the others were funded by the Economic Development Administration or were staffed by volunteers. These centers usually were closely related to Community Action Agencies and thus had access to the principal poverty areas. The staff of these centers did the outreach, processed the loan applications and sought to provide management training and counseling for the applicant. SBA. of course, actually made the loans and reserved the right to approve or disap- prove the applications processed through the SBDO. Since applications were restricted to areas served by an SBDC, the loan pro- gram was not available on a national basis. OEO funds were insufficient to sup~ port more than a handful of SBDCs. The next problem was to establish criteria for participation in the loan* program. Initially, the criteria set by OEO and SBA envisaged making loans to the very' poor, or to those businesses which would hire the poor and thus create jobs. Experience during the early months of program operation showed that while loans were being made upon the basis of employment of the poor, the evidence available did not indicate that any significant job creation was resulting. Further, requiring loan recipients to `hire the poor could simply burden an already-faltering business that much more. Finally, loans at this stage were averaging close to the maximum of $25,000, and SBA funds for Title IV were being depleted rapidly. Consequently, in November 1965, the criteria were changed so that specific income limits were prescribed for eligibility. For example, an applicant with a family of four could earn up to $4,630 and be eligible for consideration. Thin figure, I should point out, is $1,500 over the income line we use to define poverty. The change had the effect of changing the emphasis from job creation to pro- viding business opportunities to the poor. Unfortunately, even then the program did not seem to be making a significant impact, and it came almost to a halt when the SBDCs could not find reasonably sound risks within such a stringent income limit. PAGENO="0543" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1381 Then, in March 1966, the criteria were liberalized even further so that the head of a family of four could earn up to $5,630 and be eligible for loan consideration~ While this improved participation in the program, our concern was that it was continuing to draw even farther away from 01110's real "constituents" in poverty. The eligibility figure I cited, for example, now was $2,500 above the poverty level definition. In fact, reports indicated that SBDOs were stressing the theme that the pro-. gram was for existing small businessmen who were unable to obtain assistance from other sources. There was less emphasis on assisting the man with a poverty level income to enter business. I do not want to imply that the program was a failure. On the contrary, by the end of 1966, there had been 2,752 loans made under the Title IV program with a total value of $27,555,695. The average amount of an individual loan was $10,000. As a result, there are many small businesses existing today that would not have started, or would have failed, had it not been for this program. But the question we faced in OEO, as it became more and more clear that the need for loan assistance was concentrated primarily with those who could not be classified as poverty-stricken, was whether our agency should continue with responsibility for a major small loan program. Given the limited amount of funds at our disposal to help people out of poverty, we felt our directly-related programs probably should take precedence, with loan programs and their improvements to reach the more disadvantaged being left to. other agencies with this broad responsibility. We were considering last year whether to ask Congress to relieve us of the pro- gram in our FY 1968 legislation when Congress took care of the matter in its own way in the FY 1967 bill. As an amendment to our authorization legislation which became law last November, Congress transferred the full responsibility for the Title IV loans. from OEO to SBA. At the same time, however, under a newly-amended Section 402 ( b), OEO was left with an assignment to provide "screening, counseling, management guidance, or similar assistance" to small businesses assisted by Title IV loans.. This created some difficulties for us. As you know, SBA immediately inaugu- rated a new program of economic loans which were to be available nationwide,, and not solely through SBDCs as had been the practice. Further, SBA informed us that it wished to process loans entirely with its own personnel, and that this would no longer be done through SBDCs. This effectively removed a principal reason for the existence of SBDCs, and removed as well the control over the guidance and counseling function that tbe~ SBDCs had been able to exercise previously with applicants. Additionally, SBA created a wholly new class of Title IV eligibles:, Those who earned above the already-liberalized income levels but who still were not qualified for other SBA loan programs or could not get private financing. Faced with this, as well as with the Congressional intent that guidance and counseling functions be continued by OEO, we determined to continue to fund our'present SBDCs through June 30, 1967. At present, 36 SBDCs are in operation~ At the same `time, we worked out with SBA the most effective use possible- for the SBDCs during this remaining period. SBA, for'example, will utilize the training, counseling and outreach capabili-. ties of the SBDCs where they now exist, and it will station regular SBA em- ployees from time to time in OEO-Community Action Agency neighborhood cen- ters. We have developed joint guidelines to instruct SBDCs on their new role.. Because of these circum~tances, and the severe shortage of funds to carry' on all our programs to reach `the poor, we have decided not to request funds to continue the guidance and counseling functions in our proposed legislation which will be coming to Congress shortly. `This decision is based on the fact that the total dollars that will be made available for the war on poverty will, of necessity, be restricted. We have, however, urged our Community Action Agencies to establish, or- continue, counseling and guidance services on a voluntary basis wherever feas- ible We will certainly continue to cooperate with SBA in every way possible to make its new loan program effective. Let me mention briefly the Rural Loan program under Title Ill-A. From January 1, 1965, to December 31, 1966, a total of 13,381 non-agricultural loans were made with a total value of $23,902,820. PAGENO="0544" 1382 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 These loans have gone for a variety of service establishments, retail stores, repair shops, truck hauling, and the like. The rural loan program is quite different in operation from the Title IV pro- gram as jointly operated by OEO and SBA, however, and it has not been beset with the same problems that faced us in Title IV. In the first place, it is administered by the Farmers Home Administration employees directly and there is no SBDC intermediary. And, as you know, these employees serve all the rural counties in the Nation, giving the rural loan pro- gram an outreach capability that SBA cannot match. Follow-through and moni- toring of the loan also is much more simple than in urban areas because these FHA employees actually live in the rural communities. Eligibility criteria are not rigidly formalized, and determinations of the applicant's eligibility and prospects are made by the FHA supervisor and his county committee. Further, it should be noted that the average size of the non-agricultural rural loan is only $1,786, as compared with the $10,000 loan of the Title IV program. Lastly, administrative funds were provided to FHA to deal specifically with the rural loan program. This was not the case with SBA, and all administrative funds for SBDCs came from OEO. We feel the Rural Loan program continues to serve a poverty need in rural America and we expect it to continue as part of our Act. In closing, Mr. Chairman, I am not sure whether I have raised more questions than I have been able to answer. I have discussed the problems we faced in attempting to relate a major small business loan program to the basic needs of those in true poverty. I do not want to leave the impression, however, that we in OEO consider small businesses in the ghetto and poverty areas as a thing apart from our own mission. This is not true. The poor, as consumers, frequently find their problems magnified even beyond the basic shortage of funds. Quite often, the poor do not get, dollar for dollar, the same quality or quantity of food or goods that the more affluent person who has the time and the means to shop can achieve. They can become "captive" patrons of unscrupulous merchandisers or credit vultures. And quite often, also, the stores, or services that the poor need simply are not located in the ghetto areas, requiring hours of travel on public trans- portation if goods are to be obtained. Certainly, good, necessary businesses can offer much to any area, particularly where the poor live. Through our Community Action Agencies, neighborhood centers and any other means at our disposal, we will cooperate with SBA to help carry its new pro- gram to the disadvantaged. In short, I can assure you that we in OEO will continue to do everything we can to encourage the establishment of such businesses so that those we seek to help will have as many advantages as possible in their fight to move out of poverty. Mr. DELLENBACK. Mr. Chairman, may I ask the witness-certainly I recognize it will be far too late to be of help to us at this time, but the other study that you mentioned a moment ago that may be 9 months in the offing, if and when it is prepared, you will make it avail- able to this committee? Because our responsibility will continue in the future. Mr. BOUTIN. I will be very happy to do that. Mr. DELLENBACK. Thank you. Chairman PERKINS. Thank you very much. Mr. BOUTIN. Thank you, Mr. Chairman. Chairman PERKINS. The committee will recess until 9:30 Monday morning. (Whereupon, at 4:45 p.m. the committee was recessed, to be recon- vened at 9:30 a.m. Monday, June 26, 1967.) PAGENO="0545" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 MONDAY, JUNE 26, 1967 HoUsE or REPRESENTATIVES, COMMITrEE ON EDUCATION AND LABOR, TVa8hzngton, D C The committee met `tt 9 30 a m, pursuant to iecess, in room 2175, Rayburn House Office Building, Hon Carl ID Perkins (chairman of the committee) presiding. Present: Representatives Perkins, Daniels, Scheuer; Burton, Quie, Dellenback, and Steiger. ~Also present: H. ID. Reed, Jr., general counsel; Robert E. MeCord, senior specialist;; Louise Maxienne Dargans, research assistant; Ben- 1 `imin F Reeves, editor of committee publications, Austin Sullivin, in'~ estigator, John H Buckley, chief minoi ity investigator, Dixie Bargei minority research specialist, and Phil Rockefeller, profes sional staff member. Chairman PERKINS. The committee will come to order. A quorum is present At the beginning, Sargent Shriver, let me welcome you back here. I hope for all intents and purposes we may be able to complete your testimony today. It might be necessary to call you back. We have a busy day on the floor. In fact the committee has on the floor today the extension of title V of the Higher Education Act of 1965, containing the Teachers Corps and the Te'tching Professions Development Act I presume we can run until about perhaps 12 30 and recess until tomOrrow. I hope we may be able to complete your statement by 12: 30. The only part of your general testimony that is lacking to my way of thinking is a very popul'ir program, Headstart Go ahead STATEMENT OP SARGENT SHElVER, DIRECTOR, OFFICE OP ECO NOMIC OPPORTUNITY, A~CO]VIPANIED BY BERTRAND M HARDING, DEPUTY DIRECTOR, JAi~IES HELLER, ASSISTANT GENERAL COUNSEL; DONALD M. BAKER, GE~ERAL COUNSEL; ROBERT A LEVINE, ASSISTANT DIRECTOR, RESEARCH PLANS, PROGRAMS, AND EVALUATION, THEODORE H BERRY, DIREC TOR, COMMUNITY ACTION PROGRAMS, JOSEPH T ~NGLISH, ASSISTANT DIRECTOR FOR HEALTH AFFAIRS, lULL SUGAR MAN, ASSOCIATE DIRECTOR, HEABSTART; DR. NOLAN ESTES, ASSOCIATE COMMISSIONER FOR ELEMENTARY AND SEOONDARY LDUCATICN, DR TOHN PRANKEL, DIRECTOR, HEALTH DIVISiON, MItE LISBETH BAMBLRGLR SC1IOPR, DIRECTOR, rROGRAMS, PLA~ThTG, AITD EVALUATION, OFFICE FOR HEALTH AFFAIRS, TIEA OFFICE OF LCO~MIC OPPORTUFITY 1383 80-084-67-p 2-3o PAGENO="0546" 1384 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967. Mr. SHRIVER. Thank you, Mr. Chairman, and members of the com- mittee. I am happy to be here again this morning and to start the presentation of our agency with respect to Headstart. On my left is Jule Sugarman, who has been the Associate Director of Headstart since Headstart started. STATE)~ENT OF fILE SUGARMAN, ASSOCIATE DIRECTOR, HEADSTART, OFFICE OF ECONOMIC OPPORTUNITY Mr. SUGARMAN. Thank you, Mr. Chairman and members of the com- mittee. Today I would like to talk about three general topics-first, the status of Headstart after 28 months of operation; second, what we have learned about the value of Headstart through our evaluation systems and finally, two new complimentary programs: The Centers for Children and Parents, and Followthrough. The Headstart programs are presently being conducted under sec- tions 204 and 205 of the Economic Opportunity Act and the fund authorized under section 211 (1) (a.). Under the new legislation. Head- start and its complementary programs, Followthrough and the Cen- ters for Children and Parents will be conducted as community action special emphasis programs under section 222. The new language in the new act provides essentially the same authority as exists in the present act. Last year this committee and Congress as a whole recommended that OEO spend $352 million for the Headstart program. OEO has followed that recommendation and during the course of this fiscal year we expect to spend approximately $119 million for summer Headstart programs, serving approximately 520,000 children, and $211 million for full year Headstart programs which will serve approxi- mately 193,000 children. I might note parenthetically that we see an increasing trend of interest on the part of local communities in longer term Headstart programs for children of younger age and for longer periods of the day. There have been a. number of communities which have been interested in and we have permitted them to shift funds from summer pro- grams into full-year programs. Also a number of comimmities have lengthened the time of the program from a part-day program to a full-day program in order that they may meet some of the day-care needs in that community. In addition to the money which is spent on direct operating grants we have spent approximately $16 million for training and technical assistance and we have provided training this year to over 45,000 people who are employed on the local staffs of community action agencies and other Headstart grantees. There is also now a corps of approximately 500 experts who are available to help local communities in improving their programs and I think that this has been one of the most salutary features of the whole program. . . We also are spending approximately $6 million for evaluation and research of which approximately $11/2 million will be devoted to evaluations and the remainder to research and various kinds of demonstration programs. PAGENO="0547" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1385 This level of funds permits OEO to establish both summer and full year programs in every State in the Nation and in every territory. I am very happy to say. that this year we will be adding the Mariannas to the Headstart program which is the furthest west extension of our program, matching Puerto Rico on the eastern side I am also very happy to be able to say that 38 percent of our pro- grams are in rural areas and that we are coming very close to achieving the distribution between urban and rural areas which corresponds to the incidence of poverty. The committee has already expressed an interest in who are operat- ing Headstart programs and I think that it is important to note that the picture differs significantly between summer programs and full year programs. In the summer programs approximately two-thirds of them are *operated by public school systems, about 10 percent by private school systems, and the remainder by private nonprofit agencies, including community action agencies. On the other hand, in the case of the full year programs only one- third are operated by public school systems, 10 percent by private schools, 29 percent by community action agencies, and 25 percent by private nonprofit agencies, such as settlement houses and special purpose Headstart groups. Approximately 60 percent of the children served by Headstart are white children and approximately 40 percent. Negro. Of the white children nearly one-third come from Spanish speaking families. In addition to Spanish we have children from Portuguese, French, Eskimo, Indian, and a number of other language backgrounds and we have had to devote a good deal of attention to language :development techniques Most of the children in the summer programs, nearly 80 percent, are over 5 years old, but in the full year programs only about 40 percent are 5 years of age, most of them being 4 years of age or younger. I think last year in testifying before this committee we explained th'it w hen Headstart began we decided that i~ e would abandon the normal standards of quality in programs and we wOuld put programs where they were needed This often meant taking a program or approving, a Headstart pro- gram in a community which really lacked the resources and the talent to do `t topnotch quality job But once having made that commitment to start those programs in the areas which really needed~ them the most we then thought it was necessary to exert a `tremendous effort to upgrade the quality of those programs. ` . We tried to do this primarily through the vehicles of training and technical assistance I think that overall nearly 10 percent of all Head start funds are being put into training. We have a wide variety of activities for both professional and nonprofessional staff. We have a wide variety of techniques including such things as ordinary inservice training programs operated and organized by the local group with the assistance of a series of regional training officers which we have funded at universities. We now have 42 regional `training officers at various universities whose primary job is to work directly with local grantees in helping them to improve the quality of their programs. , . PAGENO="0548" 1386 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 We have also funded summer 5-day institutes for nearly 40,000 people who will be working in the summer programs. And we have funded for over 2,800 pec~ple am 8-week training course, again at various universities throughout the country. I might just note in passing that the cooperation which we have had :from the colleges and universities of this country in terms of support of the Headstart programs has been truly phenomenal and it is one of the things that in my. judgment has really made it possible for this program to reach the momentum which it has achieved. The universities have worked under very tight deadlines, under extraordinary demands, but they have never failed to deliver the things which were necessary in support of the program. I think the committee might be interested in the costs which are associated with the operating pha.ses of the program. On a national average basis the costs for a summer program are $200 per child, and a full year program $1,100 per child. We estimate that because of the change to 20 percent non-Federal share the full year cost will drop to $1,050, in fiscal year 1968. Now the cost ranges quite widely from full year. programs which can get by for as little as $700 to $800 a year to full day care programs in a com- munity like Boston where the cost may be. as high as $1,700 or $1,800 a year. The largest single part of the cost of course is that connected with the staff in the classrooms. And in terms of the full year program this represents about 65 percent of the total cost.. The other essential ingredients are the nutrition costs which in a full year program represent about 14 percent of the cost, health services which represents about 6 percent, parent services which represents about 6 percent, training which represents about 4 percent, and overall administration, which we have consciously striven to hold down, about ~ percent. The figures are somewhat different for the summer because of the heavier proportion of health costs relative to the total. It is our belief that after 28 months most programs are now being funded to include all appropriate services. There are a few cases in which psychological services or certain kinds of medical and dental services are still not available because the resources simply do not exist in the community. In those. caseswe strive constantly to find new and ingenious ways to get those services into the community, and in working with both State and local agencies we have had I think a considerable degree of success. No discussion of costs would be complete without reference to the enormous contribution being made by volunteers. It is our belief that for every hour of paid time in the Headstart program there has been an equivalent hour of volunteer time. We had anticipated that there might be some fall off in the level of volunteer effort, but that has not proved to be the case and communitiescontinue to report great success in attracting volunteers to their program and in fact some difficulty in utilizing all of the volunteers that they would like to have. Durino~ the first year of our program our primary emphasis was on the establishment of new programs. Subsequently, we put a good deal of quality emphasis on the improveme1~t of the health program. It is gratifying to be able to tell this committee that the proportion of children receiving treatment for medical and dental problems has PAGENO="0549" ECONOMIC OPPORTTJNITY ACT AMENDMENTS OF 1 9 6 7 1387 jumped from 20 percent the first ve'ir to &i percent in the second ye'n and we are very hopeful that in this third summer of Headstart that the proportionwill reaëh as high as 90 percent. We have h'td complete cooperation with HEW in support of the health effoits and I want to cite p'irticuiarly the woik of the Public He'dth Service Dental Dn ision which pi ovides consult'ttion on dental programs to all of our grantees It has done an absolutely f'tbulous oh on that We `ire nov~ nego ti'tting `in `igreement with the American Academy of Pedi'itrics w hich will provide similar kinds of consultation in pediatric medical areas to all of our grantees. This year we also spent a gooth deal of time on improving parent participation. I think this has become one of the really strong points of the entire Headstart program. We have now a cadre of part-tme parent experts who can work with communities in improving that part of their program Last month the much respected Child Study Associ'ition winch iS a national oiganization devoted to rese'irch on children's pi ogi `ims, beg'in to train st'iff in parent progr'ims under conti'tct with us We have prepared now a total of six films which are being used in parent activities and by and large I am very encouraged with the way the parent program is going. I am happy to say that the Headstart's interests in parents par- ticipation is having a significant impact on school programs as well and several school programs have adopted one or more of the Head- start's key elements of parent participation. I think it might be interesting to the committee to just list those key elements because I think too often that the words "parent par- ticipation" are interpreted in a single fashion rather than the multiple phases which are really involved. The first of these is the consultation between the staff and the direc- tors of agencies and the parent on what the program should be like and how it should be operated. The second is participation of parents in the Classroom as either employees or volunteers, and. I might note that there have been a very substantial number of parent volunteers as well as paid employees, paid parents, in the classrooms. The third phase is the teacher `md other s~'iff visits to the home to w oik with the family and to help them to understand ~ h'it c'in he done in the home in support of what goes on in the cl'm~sroom Finally the fourth phase, those educational ~ctivities which are con- ducted specific'iuly foi p'irents to meet their expressed deRnes for self-improvement and there has been a tremendous amount of that going on. I expect that duiing the coming year we `ire going to soend `icon siderable amount of time `md emph'tsize questions invob ing wh'mt goes on in the classroom, itself. As the commitee may well be aware, there is a good deal of ferment in the thinking `ibout w h'tt constitutes good child development pi `uctice fom this "ge child 9nd we li'm~e people `C both ends of the spectrum rangin2 from highly stiuctured progr'i ns to totally unstructured programs. OEO and Jieadstart, in particular, hau e `ilways t'tken the position th'tt there is no single kind of piogium which is good for young children PAGENO="0550" 1388 ECONO~'1IC OPPORTUNITY ACT AMENDMENTS OF 1967 Rather what we want communities to do is to search out the knowl- edge abOut programs and to select for themselves that particular kind of program which makes the best sense for their community. We do stand ready to provide tecimical assistance and consultation in this matter, but essentially' the decision needs to be a local com- munity decision. It seems to me that in a country as heterogeneous and individualistic as the United States that this is the only proper, and equally important, the only productive approach to good programs. Let me turn now to what we have learned about Headstart during the last ~8 months. We have invested something over $4 million in efforts to evaluate the Headstart programs. We have learned a great deal from these `efforts, I think, although much remains to be learned in order to make conclusive judgments. Let me just summarize for you some of `the general findings which come out of Headstart studies. No. 1, children who enter into Headstart programs have significantly lower scores than the normal child, usually in the general range of 80 to 85on a scale of 100. You have to understand that there are many different kinds of tests with different scales associated with them. When the children have been in a Hea.dstart program at the end of that program. they have made significant advances, in the range of five to 10 points, so that their test scores are somewhere around 90 to 95 at that point. They are still below the norm, but substantially better than when they entered the program. These gains tend to be much greater for the children who were on the lowest end of the scale in the original testing and interestingly `enough and I guess one might `expect this from gen- eral development, much greater for boys than for girls. Boys also' test considerably lower than girls when they initially enter the program. Once the children leave the Heaclst.art program they tend to lose approximately five points of the gain during the first year after they have been in the program. So that they are generally better off than when they came into Headstart, but not as well off as they were when they left Headstart. Here again the persistence of the `gain is greater for the children who were the worst off to start, and particularly greater for boys. Teachers generally rate children who have had Headstart as more competent and productive in their first year of school than those who have not had Headstart. Parents are overwhelmingly enthusiastic about what happened to improve the abilities of their children in Headstart. Teachers rate parent participation in the kindergarten or first year of school as much higher for Headstart parents than for the parents of children who have not been in Headstart. And we have numerous examples of communities that have never had successful PTA's now beginning to have a much more effective kind of parent teacher activity program because of participation in Headstart. Sixth, there are notable health deficits in Headstart children, many of which if left untreated will cause significant problems for the chil- dren in the future. The most outstanding of these are in the dental area where the amount of dental problems is truly astronomic. PAGENO="0551" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1389 In gener'ii the health problems of children in disadvantaged families are slightly higher than the children from more advantaged families, but the big difference is that in the more advantaged families those health problems are under treatment and under care~ whereas in the disadvantaged families they are not. There are certain kinds of things, and these tend to be a little bit regional, in which Headstart children clearly have substantially greater problems, particularly in the anemic categories and in certain types of parasitic infections. Nutritional deficiencies which do appear in Headstart children are pretty clearly being demonstrated as directly related to their rate of development, and I think this is something that is merging as a stronger and stronger factor within the Headstart programs. Now I have made rather strong statements here about what Head- start research shows. Having made those statements let me hasten to add that the technology of evaluation is in my judgment not yet ade- quate to give us sound and clear-cut answers. Many of the research findings are contradictory to one another, although the points which I have made above are representative of the general research findings. Part of the contradiction comes from the real difficulty of using any single form of evaluation to determine the work of a program which is nationwide in application and extremely heterogeneous in approach. At the simplest level there are considerable technological difficulties in determining whether a particular kind' of program is having a par- ticular kind of result with a particular child. Yet this is exactly what we need to determine if we are to have any truly useful evaluation of the Headstart prOgram. We have had some real growing pains in the evaluation and research effort and I will not clutter the record with all the problems that we have had. Let me simply say that we have now evolved to the point where we have funded 13 university-based Research and Evaluation Centers. We see these as long rim investments producing a constant flow of information and data which will be useful to us grantees and which will add a stability to our research program that it has lacked in the past. First reports of these evaluation and research centers should become available this fall and thereafter there `will be a rather steady flow of material coming out of them. `One of the real problems in the research program is the question of development and utilization of appropriate instrumentation. The fact i's that when Headstart began there was very little in the way of testing materials that had been specifically designed for disadvan- taged children of this age group so we pretty much had to develop it as we want along. I am sure you are aware, then it takes a considerable amount of time to validate, standardize and otherwise assess test in- struments to find out if they really show you what you think they. show you. We are going through that process and in a period of time we should be in pretty good shape on that. ` We also use the Bure'iu of the Census extensively to gather informa tion for us. Here agam another government agency has been extremely helpful in gomg out of their way to provide the kind of data that we need.' ` PAGENO="0552" 1390 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Finally, we use our group of expert consultant~ for evaluations with the objective of having those experts visit each of the full year programs at least twice a year and a iepiesentative sample of tIre summer programs. They have a dual objective, first of all, telling us what problems, they see and what strengths they see in the local programs, but even more importantly, helping the local community to solve the problems that they see. Before leaving the subject of evaluation let me emphasize th.e OEO has a real commitment to this process. We have tired to fund a wide variety of activities which would give us as much information and judgment on~ the subject as possible. While there are formidable tech- nical problems involved here which must of necessity affect the initial results, we do believe that we are beginning to accumulate a very sub- stantial body of useful information. Let me turn now to the new and complimentary programs which are proposed this year by the President for inclusion as a part of the Headstart program. Both of these were mentioned in the President's message on children and youth which was sent to the CongTess. The first of them is called the Center for Children and Parents. 1 believe that Assistant Secretary Carter described this program briefly to the committee last Friday, but for those of you who may not have been present, let me say that this is intended to serve children under 3 years of age, or really families with children under 3 years of ageS in a way that will provide complete and comprehensive services for that entire family. It will be a very small program this s-ear because we feel we have a good deal of learning t.o do as to just how one develops this kind of program. In total it will probably involve not more than 2,500 com- munities. This program is being developed in real partnership with HEW, the Labor Department, and IHJD, and at every step of the process we have been consulting very closely with them. Members of their staffs are chairing certain of the subcommittees which have developed pro- grams and we have found this to be a very rewarding and useful experience. One of the really rewarding results from a financial point of view part of this is that we think that a good deal of money which is avail- able to those agencies can be used to complement the money which OEO has and provide a more effective total product. The other new program this year is the followthrough program. This is a more substantial program. Chairman PERKINS. You are going to address yourself to that right n*ow? Mr SUGARMAN. If it pleases you, yes. Chairman PERKINS. Go ahead. Mr. SUoAR~L&N. The Follo~vthrough program is being developed jointly by OEO and the HEW. specifically the Office of Education The President's proposal includes S120 million to* support this pro- gram. The basic purpose of the Followthrough program is to take those children who have been in Headst.art programs or similar title II or State-financed programs and continue on into their first and PAGENO="0553" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1391 subsequent years of school, probably as far as the third grade, the kind of special remedial noncurricular services which seem to make such a difference in the Headstart program The program is viewed as being operated in conjunction with title I programs and with State and local funding so that by putting together three different sources of funding, plus such things `is title XIX medi caid support and other Federal support that may be available in a par- ticular community, we are able to achieve a very high level of program, a very high level of quality. Of the $120 million which is proposed for the Followthrough pro- gram approximately $100 million of that will be used directly for direct grants to communities, about $12 million for grants to State education `igencies to help them to improve their assistance to local communities, technic'il `issistance and training programs for local communities, and about $8 million for administration evaluation, and research costs. We estimate that the funds available fOr the direct operating grants will involve about $525 per pupil on the average and therefore that we will be able to reach about 190,000 pupils in total. The procedures which have been developed for the Followthrough program involve an apphc'ttion by the local education agency w ith the active investment and cooperation of th~ community action agency. This proposal will be recen ed by the U S Office of Education Corn ments from St'ite educ'thon `igencies w ill `dso be a part of the record `md the grants will be rn'ide by the Office of Education directly to the lu~'d education agency The piograrn is intended to provide sei vices to children in puvate `is w dl `is public schools and `t number of arr~ ngernents have been devel oped to see to it th'tt the `~`trne 1~inds of services `md same kinds of sup poit are pio~ ided for children in pri z'mte schools as those provided children in Dublic schools. We have begun this year and wjll announce very shortly the funding of `mnumbei of pilot piogr'ims Jf is our expectation `md hope that out of these approximately 30 pilot programs we will learn a good deal that will help us and help other communjties to plan broader scale pro- grams th'mt will be possible next fall We have made a decision that the hulk of the funds which are in the 1 equest this ~ ear should be for programs th'tt will be oper'mted in the school year 19G8-69, rather than 1967-68. We have done this in recog- nition of the problem which this conimittee has so clearly identified in its report on the complications of delaye4 fundings. It seems to us that it would be more appropriate and more useful to have a funding schedule which gave communities real time to recnnt, plan, tram, and oig'mnize their services While this means a year's loss in time in terms of reaching children who. really should have this kind of program this fall, we think the overall result will be better We hope the Congress will support our ~itdgment that the sound use of funds and good programs will be improved by delaymg the total implementation for a year The Followthrough program is being developed in very close coop- eration between the Office of Education and the Office of Economic Opportimity We have been in daily contact with one another in the development of guidelmes for the pilot programs. The same kind of cooperation will occur as the program moves on into its fuller phases. PAGENO="0554" 1392 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 The Office of Education has appointed an outside planning com- mittee which has been helpful to them in developing standards and we have been very active in the deliberations of that committee. WTe really *are very much encouraged by the progress on the Follow- through program and very much encouraged by the receptivity which it has received on the part of the local educational agencies. Almost all of them tell us that this is just specialized kind of assist- ance that they feel is necessary to round out the package of assistance which is now available to them. Those proposals which were sub- mitted in the pilot phase I think were replete with imaginative use of funds and new combinations of programs which auger very well for the future. This, Mr. Chairman, completes my general statement on the status of the Headstart and FOllowthrough programs and I would be happy to answer any questions. Chairman PElixINs. We will take a few moments to interrogate you under the 5-minute rule. Sargent Shriver, what difficulties do you see should Headstart be abruptly transferred by the Congress to the Office of Education and just how would it affect the ongoing program? Mr. SHRIVER. Mr. Chairman, I think that it would be well to have the testimOny of the Secretary of Health; Education, and Welfare on that subject and my own belief is best expressed I think by saying that Headstart in my~ judgment has been as well run, as well managed, as well administered from the point of view of cost as any program in our agency and I think it has been as well run as any program of this type in the Federal Government. Chairman PERKINS. I agree with you, but do you see where many youngsters will not be able to take advantage of the program if it was transferred to the Office of Education? I would like to have your comment on that. Mr. SHElVER. The answer to that would have to depend in my judg- ment upon the basis on which it were transferred, if it were trans- ferred and the complications that might arise under any sort of a transfer document or under legislation. It would really be difficult, at least for me, to express specific com- ments on that issue when we don't have anything specifically before us. Maybe, Jule, would youlike to comment? Chairman PERKP~ s I would like to have, your assistant likewise comment on those questions. `Mr. SU~ARMAN, I think, Mr. Chairman, as Mr. Shriver has in- dIcated, the basic question is under what conditions a transfer were to l~e made. he normal practice of course of the Office of Education is to makegrants almost totally to local education agencies, public schOol systems. Chairman PERKINS. Let me preface my statement by stating that the Office of Education has already stated that, in their judgment, the program would operate better right where it is at the present time. Go ahead. Mr. SUGARMAN. Thank you. In the ca~e of full year Headstart, over 65 percent of the programs are not operated by public school s~ stems, so that there would be PAGENO="0555" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1393 an immediate problem of whether those many, fine, existing programs could continue to operate if the Office of Education were making the grants. Secondly, the Office of Economic Opportunity, I think, has been in the position, through the authorizations of this committee and the Congress, to provide a good deal of direct assistance and to be directly influential on the way in which programs are operated to a degree which is not customary in the Office of Education. We have been able to target funds specifically into areas which appear to have the greatest need, to provide specialized assistance to those communities which needed assistance to get off the ground. It is a question of whether the Office of Education would be in a position to do the same thing. In the case of the private schools, as my earlier remarks indicated, there are about 10 percent of the programs that are now operated by private or parochial schools, and there is, of course, a question as to whether and under what conditions it would be possible for those schools to continue their operation. I think the Office of Education in its testimony last Friday made it rather clear why they thought it was important that this program remain in the Office of Economic Opportunity. Chairman PERKINS. There has been close coordination and coopera- tion between your Headstart program and the funds that have been expended by the Office of Education for a similar purpose, the present school program. Mr. SUGARMAN. That is correct, Mr. Ohairman. In fact, there are a number of situations in which parts of the funds are provided under title I, and parts of the funds are provided by Headstart. We have a number of joint publications. People involved in title I programs have taken advantage of the Headstart training programs, and our regional training officers also conduct training for title I programs whenever they are asked to do so. Chairman PERKINS. Mr.Quie. Mr. SHRIVER. May I make a further comment there? Chairman PERKINS. Yes; go ahead. Mr. SIIRIVER. Mr. Chairman, a few days ago I tried to point out quickly here, in response to a question similar to the one you asked, why it is that we have thought of Headstart as being a community action program. Perhaps it would be well for the record at this point to reitera't.e some of those factors, because, regardless of where Head- start goes, in my judgment it ought to be part of community action rather than part~ let's say, of a health service or the education service or some other specialized service. I say that because Headstart has been one of the most effective community action weapons or devices that we have had. In fact, today, right now, there probably are as many as 100 community action agencies ss hich still have only Headst'irt as their program. Letme go back ~ step in the history of Headstart and point out how we got it going. First of all, it was not undertaken as an educational program exclusively; never* was. The objective of Hleadstart was to, first of all, prepare the child, but in reaching the child to do something about the f'imily and to do something about ti e culturtl conditions in which that child grows up. PAGENO="0556" 1394 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Every day we get more and more testimony about the fact that poverty is caused as much by the total environment as it is by one specific disability; let's say bad health or poor education or malnutri- tion; that you cannot attack these things unilaterally, that they must be attacked as a package, and community action is that packaging method. It is the method of treating a human being, of working with a human being as a totality rather than as a sick body or a sick mind or some other singular aspect of the person. In addition to that, we have overwhelming evidence over and over again not only in this country but in the Commonwealth of Puerto Rico, through anthropological studies and research of all of the dif- i~rent types, that unless the people do these things for themselves, the end result is not. very effective; that a paternalistic approach, where the Federal Government or State government does things to people or for people, does not produce a permanent result within the people. That is an intrinsic, part of community action, namely, that the people are doing these things for themselves, that it is not going through a regular channel you might say, a traditional, at any rate, channel of government. Community action is a device which frees the peo~le to do something about their own problems. Headstart is an intrinsic part of that process. Let me go back another step. In the State of West Virginia and in the State of Arkansas, the State of Mississippi, for example, in the first year and a half of this program there probably wouldn't have bee.n but a handful of community action agencies if it were not for Headstart. Hea.dstart was the inducement, if you will; it was the, at- traction which brought people together who had never talked to each other before, not only across racial divisions but across religious di- visions and across economic divisions. People in small towns, the counties, and even in some larger places were brought together in conversation and in joint action because of Headstart. Having gotten the experience, of working together on Headstart, they began subse- quently to branch out into other areas, including legal service areas, job training programs, job finding programs, et cetera. Many community action agencies are still at this first stage, and my own belief is that they are going to proceed from that first stage to the second and third stage quite slowly because we are dealing with deeply ingrained cultural habits in many parts of the United States. Therefore, I am going to come back to the original point I made a minute ago. Headstart is fundamentally a community action thing. I think it ought to stay in CAP, that it shouldn't be out of CAP and in the Office of Education or out of CAP in the Public Health Service, or out of CAP in some other, place. It is in ~AP now. It has been well run in CAP. I don't see `that we would save any money for the tax- payer or improve the administration of it one iota by taking it out `of CAP. And I see a great many weaknesses which Mr. Sugarmari has already described if it is removed from CAP. Chairman PERKINS. Briefly, Mr. Scheuer. Mr. SOIIEUER. One brief question. Hasn't there also been some experience that the very existence of lleadstart outside of the established education institutions locally has PAGENO="0557" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1 9 6 7 1395 been a goad or a~ competitive stimulus to induce the local education establishment to get into the kinds of programs which historically they have been somewhat reluctant,to involve themselves in-programs such as participating activities, programs such as medical and health care, programs involving supporting social services? I don't want to put words in your mouth, Dr. .Sugarman, but wouldn't the transfer of Headstart to the established education insti- tution programs result in a diminution of the thrust and the enthu- si'~ srn with which some of those local education agencies are beginning to concern themselves because of the fact that I-Ieadstart has worked, because of the fact that nothing succeeds like success, and they have seen it work outside, of the education establishment and they want a hunk of the `iction ~ Mr SnOARMAN I think you aie cle'irlv correct, Mi Congressm'm In addition to the changes which you have already indicated, 1 think one of the more sigrnficant changes has been the now gi owing enthusiasm of school systems for `the use of nonprofessionals in `their programs. Any `number of school systems which once used aides only for essentially menial kinds of, duties are now beginning to find that the~ c'tn phy `t veiy pioductive p'Lrt in the progr'Lm I also, think, looking somewhat further ahead, that t'h~ existence of the Headstart program is posing a lot of questions for school s~ stems about the total organization of programs and the total involvement of the community in all phases of the program I foresee a shift towai ds `ibody of thmkmg and a body of programs which involves children from birth through `age 8, for example, but not necessarily as a part of the stand'trdized school system, but, r'ithei, `is `in `imalgarn'ttion of many kinds of efforts by many kinds of groups in support of these efforts CIi'u~m'in P~RKINS Mr Quie Mr Quin Dr Sug'trman, where is the authority for the Follow through piogram~ Mr. SIJGARMAN. ,T'he Followthrough program authority at the mo- ment exists in section 211 of the existing `ict, which specifically men tions the word "Followthrough" In the new act it will be in section 222 (a) which deals with special programs of nationwide impact Theie is no language th~t specifically says "Followthrough" but it is the kind of general language which will' be, used to handle this and other programs as they are developed Mr Quir As for the Congress establishing `my national policy for Followthrough the bill removes the three words th'it attested in the present act to Followthrough activity, and leaves no specific langu'ige in the new bill about Followthrough ~ Mr. SUGARMAN. It is correct that there is no specific language for Followthrough, but there are many provisions in section 222 wInch will have a significant impact on how that program is `tdministered Mr QtrIE What sections are you referring to now, subsections in section 222 which would have an impact on Followthrough ~ Mr StTGARMAN Section 222 (a) If we look at line 13 we see that these must be activities which can be incorporated into or be closely coordinated with community action programs; that it must involve new kinds of resources or new, innovative approaches, and that they be structured in a way that will most fully and effectively promote the purpose of this title PAGENO="0558" 1396 ECONOMIC OPPORTTJ~1TY ACT AMENDMENTS OF 1967. Mr. QuIE. That is pretty broad language. Mr.'SCHEuER. Will my colleague yield for a point of information on that subject Mr. QmE. If we are going to operate under `the 5-minute rule- Mr. SCHEUER. Out of my future time. Mr. QuIR. OK. Mr. SOHEUER. Congress has expressed itself pretty clearly on~ the need for Followthrough. Last September, when the Elementary and Secondary Education Act was on the floor of the House, Congress passed an amendment that I proposed, making available as a subject. of research under title 5-J, theY question of why the Headstart kids, when they came into the local school systems inthe first three grades lost the ground they had gained, and making money available to pro- duce the kind of Followthrough program that we are talking about now. Mr. QurE. I know that there is an interest in the Congress in it, and the Congress would not refuse to write language specifically addressing itself to either Headstart or Followthrough, but I find it quite interest- ing that the Congress has never set national policy in either of these two, a.nd when Hea.dstart began with OEW there `was no specific language for Headstart, either. , Mr. SUGARMAN. This is correct, Congressman. Mr. QUIE. And, to show the interest in the program, we' found the first year when it was intended to be for 100,000 young people or chil- dren, it ended up being about the same size as you are talking about now in fiscal 1968. , So, locally there is a demand and I don't think' the Congress is un- willing to write national policy where there is such a tremendous local demand as this. Mr. SUGARMAN. I think, Mr. Quie, that it was a useful experience in the Headstart program to be able to start from a very broad legislative framework and to work out the nature of the program within that framework before the Congress became more specific in its legislation. This has been true not only of Headstart but programs like legal services and health services, foster grandparents and many others. It permits the Congress to have a `good' `deal more information at hand about the specific problems involved in the' program before it attempts to write definitive legislation. Mr. QuTE. I feel that the ,Congress has also neglected its duty, however, in not engaging in writing national policy. I would hope we could do this in the future. ` ` Let me ask you about how you plan on operating the Followthrough program. Are you going to delegate this to the U.S. Office of Educa- tion? ` Mr. SUGARMAN. Yes, sir; it will be delegatoci to HEW. I wonder if it might be appropriate, Mr. Chairman, to ask Asso- ciate Commissioner Nolan and Dr. Estes to `join us at the table now from the Office of Education to discuss this.'' Mr QuIB Did you meet o~ er the weekend so you could work out all the difficulties that he ran into last Friday, so he could answer questions on it? ` ,~ Chairman PERKINS. Let me mterrupt my `colleague and state there' were no ~difficulties `last week at all. ` PAGENO="0559" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1397 Mr. QUIE.He just refused to answer. He hadn't signed the.deal yet.. Mr SrJGARMAN I think we i~re in complete agieement, Mr Quie Mr Quin Mr Estes c'in answer the question now Mr. ESTES. Believe it or not, we have been in several sessions over the weekend and are, I think, in appropriate posture to answer any questions that you might want to pose Mr QuIE Very good Chairman PERKINS. I don't think the gentleman from Minnesota wants to let there be any insinuation in the record that there was any disagreement, because t.hat was not the case. Mr. Quin. It is pretty hard to have disagreement when they won't answer questions. Chairman PERKINS. He just told you he would answer your questions specifically. Mr. QUIE. He didn't answer the questions. Chairman PERKINS. That an agreement had not been signed. That was the only question. Mr. Qun~. Now with the recent agreement, whether it has been signed or not, perhaps we can find out how the Followthrough will operate. How will the U.S. Office of Education make the money available in the States? Mr. Es~ri~s. We will make the money available for the most part to local educational agencies. Mr. Qur~. Is this defined as public educational agencies? Mr. ESTES. No. This is a local educational agency similar . to the method in which we handle funds under title I. However, when we provide funds to a local educational agency- Mr. QuIE. I wonder if you would define locaFeducation agencies for me so we know what we are talking about here. . Mr. ESTES. This is usually an elected board of education responsible under State statute for administering the public schools in . a loôal school district or county or subdivision of the State as established by the State legislature. Mr. QuiE. Very good. And you say most of the money will be allo- c~ted to such a lloc'il educational agency ~ Mr ESTES We anticipate that a large `imount of the funds will be `illocated in this manner The local education'd agency will be respon sible for planning, for administering, for the supervision of the pro gram Howe'~ er, there will be cases where, for one reason or `mother, a local educational agency is unable to prol ide these ser~ ices In these inst'inces the Office of Education will contract ~With a Community Action agency or a Headstart agency to provide these services, the followthrough services, to Headstart children Mr. Qmn. Would this be in the form of a bypass? Mr. EsTE5. I don't understand the term "bypass." Mr QuIR Well, the bypass which I referred to is if the local agency was prohibited by statute or by constitution from performing services for certain individuals because they were connected with a private or p'mrochial school Mr. EsTEs. We .would operate this similar to the way.we handle title TI of the Elementary and Secondary Education Act as provided b~ the Congress Where we find a State that is un'mble, for one re'ison or another, to administer title II funds, then there are provisions for the Commissioner to make these funds available so that title II services PAGENO="0560" 1398 ECONOMIC OPPORTUNITY ACT AMENDME-~TS OF 1967 can be provided to children in private and parochial schools. Likewise, under this delegation of authority, we would have the authority to make grants directly to a community action agency or a Headstart agency. Mr. Qnu~. Even if there was no constitutional or statutory prohi- bition against the local public school, you can still go to the community action agency or to a Headstart agency? Is that right? Mr. Esi~s. That is right. Mr. SUGARMAN. The process gives a priority to the local education agency as the applicant. I want to emphasize again, if I may, Mr. Quie, the essential com- munity action nature of this Followthrough prograrnand the fact that, while the local education agency is the grantee and the applicant, it is not a-n agency operating in isolation from the rest of the community. Rather, the community action agencies themselves must be totally in- volved in the process. The appropriate State agencies must be involved in the process, complete use must be made of available funds, parents must be involved in the development and activation of the program. Mr Qu~ This is similar to the same iequ'iernent in title I of ti e Elementary and Secondary School Act where the comiramity action agencies are required to coordinate and cooperate with the program -? Mr. SuGAn~rAN. The process is somewhat stronger here. - Mr. Qu~. It was once feared that the community action agencies could veto a title I project. However, I understand this has been worked out now~ Could they veto a followthrough project? - Mr. S~GARMAN. They may not veto a Followthrough program proj- ect, but their views certainly would be given thorough consideration. Mr. - Qtrrs. Under what set of conditions would you contract wit-h a conununity action agency rather than a local public school? Mr. SUGARMAN. Two classes of conditions: one, where -the local education is unable, and the other where it is unwilling to operate a program. I can think of a number of communities where the local education agencies may simply be unwilling to undertake programs consistent with Federal legislation, and, therefore, some alternative vehicle is necessary -in order to provide services to the children. This has been, of course, our experience in Headstart as well. Mr. Quin. Do you find the program is such that their inability may be caused by a lack of facilities? - - Mr. SUGARMAN. That is a possibility although I think that is a less serious problem in Foll-owthrough, in that it tends to complement the basic ongoing school system program. Mr. QUIE. Now, the Headstart agencies that you speak of would - be delegated a.gencies of the local community action agency? Would this be right? Mr. SUGARMAN. I-n a number of cases there are independent Head- start agencies where programs exist in an area where there is no community act-ion agency. As you know, there a-re many, many coin- * munities where a CAA has not yet been established. Mr. QuiR. Especially in Southern States? - - Mr. SUGARMAN. That is correct, but more general than that. ~- Mr. QurE. What. about the Community Action agency which has delegated its Headsta-rt program, let's say, to a church or other non- profit group other than the public school? Would they be eligible directly, the delegate agency? Or, in those cases where you do not PAGENO="0561" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1399 deal with the locil public school, would you always deal with the umbrella `igency, the Community Action agency ~ Mr. SUGARMAN. That is the preferred vehicle, yes. Mr. QUIE. Prefèrred~ Would it be the only way? Mr. ESTES. This would be the only way where we have a Community Action agency or a Headstart agency. I would not see any reason why i~ e would work in any other m'inner Mr. QUIE. How would the children that have gone through Head- start and are in a parochial school benefit from a program operated by a public school? And if the local public school did not permit them to benefit equitably in the FollowthrOugh program, would the loc'~l public school be denied funds foi the Followthrough and be given to someone else? Do you understand my question? Mr Esi~ns We v~ ould require th'~t the children attending puv'ite and parochial schools participate in the program and services be pro- ~ ided in propoitioi~ to the number of childien who h'id been enrolled in Headstart programs in these schools. We would work with the local education'd agency to insure that these seruces weie pros ided, that pai ticipation w'ts m'ide on an equitable basis Chairman Prni~ r'~ s Mi Daniels Mr DANIELS Di Sug'iuin~n, I belie'~ e ~ on testified e'ulier that the Headstart program has now been incorporated or started in all States of the Union, mclud ng some of oui possessions This piogram is a developing one. You have not any definite conclusions. So, in the experimentation with this program will you find any new tech- niques developing and, if so, what aie they2 Mr SUGAPMAN I think, Congressman Daniels, that there have been many intei esting new techniques come into existence First of all, I think we had a lot more attention paid to some of the things that weie known about e'trly childhood de~'elopment but "iot piacticed in the public school systems And particularly I refer here to the systems which adapt the program to the needs of the child rather than `idopting the child to the program, trying to find those paiticulai kinds of things which ai e going to be a success with that child and create for that child opportunities for success, just basically the notion of giving every child an individualized curriculum, if you will. Secondly, I think the idea of bringing together the resources of the physician, the soci'tl worker, the community aide, the nurse, the te'~cher, the classroom aide and the parent as a te'im working together to help the child is something that is evolving out of the Headstart program Then, thirdly, I thmk that there is a great deal more being done in these programs to expose children to the whole wide world rather than to the things that you can do just in a classroom under a very specific set of conditions Mr DANIELS For the reasons you have given, therefore, would it not be better for this program to remain with OEO which could do a more effecti\ e job, rather than turn it over to the Office of 2 Mr SUGARMAN I think that we h'~ve built up an expertise, `in organization, if you will, which is capable of working with commum ties in solving these problems, and I think we are best equipped to proceed with that 80-084-67-pt 2-36 PAGENO="0562" * 1400 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. DANnn~s. If }Ileadstart were to be run exclusively by public schools do you anticipate any problems finding staffs for the year- round program that you referred to? Mr. SUGARMAN. I think that if the public schools were to take over the program at this point in time and to use the public school per- sonnel systems, that there would be some very substantial difficulties. This is one of the things that Dr. Lumley of the National Education Association testified about before this committee, in opposition to the transfer of Headstart to the Office of Education. What he said in testi- fying before this committee was that the public schools were more con- cerned about things like personnel systems than they were about some of the program elements of Headstart. And he thought, in his judgment and in NEA's judgment, that there would be a tremendous loss of program effectiveness if the schools were to move into this at this time. Mr. QUIR. Would the gentleman yield? Mr. DANIELS. I would be glad to yield. Mr. QuIE. I was wondering who is recommending that Headstart be administered only by the public schools, or that contracts only be through them. Is anybody recommending that? Mr. DANIELS. No one that I know of. I am anticipating that this might be the thought of some people, perhaps some members of this coiinnittee. Mr. QUIE. It might be. I haven't heard of that. Mr. DANIELS. Are there any parts of the country where public schools have shown no interest in the program of Headstart? Mr. SUGARMAN. I think there are, sir. Unfortunately, in some of the Southeastern States, there is practically no participation on the part of the public schools. I suppose the most outstanding example of this is the State of Mississippi where we have some 30,000 children participating in Headstai't, and less than 500 of those are in public school programs. Mr. DANIELS. Has there been any criticism of the progrnm concern- ing the incorporation of i~oor people in the proposal so far as you are concerned? Mr. SUGARMAN. Yes, there have been a number of communities, and p'trticu' `tr1~ school systems which h'tve raised ~ ery serious questions and have been quite re~istant to using poor people as either volunteers or staff members in the program. I think that picture has improved óonsiderably in the lastyear, and in even the most recalcitrant school systems there is now a greater willingness to try to work with non- professionals. But it has taken a constant effort on our part and on the part of State and local assistance agencies and our regional offices * to open the door to the employment of nonprofessionals. Mr. SHRIVER. May I comment on that just briefly? Mr. DANIELS. Surely, Mr. Shriver. Mr. SHRIVnn. I was on the Chicago Board of Education for about 5 years, and I know everybody on the board, I think, and a number of the administrators. I suppose I had a year's worth of correspondence with some of the officials there and some board members about the use of volunteers in the public schools, particularly with respect to Head- start. This came to a climax about 3 weeks ago when, in fact, it was decided at the very highest levels in the Chicago board that they would PAGENO="0563" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1401 go along with the idea of having volunteers and poor people actually in the classrooms. Since I am quite familiar with that situation, it interested me a great deal that even at this late date it was necessary for me and the general superintendent of schools and one of your colleagues here on the committee, Congressman Pucinsky, to be involved in a discussion trying to get across the idea that having parents of the children in the classroom is a desirable thing, and having volunteers who are from the neighborhood in the classroom is a desirable thing. Yesterday's New York Times had a very interesting article in it about a school principal out there named Shapiro who has been trying to get some of these things going in the New York public school system for a long time. He was the principal of a school up in Harlem, known as P.S. 119. He has been sort of a gadfly, I gather, up there in New York, a kind of fellow who within the existing hierarchy was pressing for a number of these innovations. I agree with Mr. Sugarman that progress has been made, but I also think that it is still a very sticky wicket. It is a slow process. You don't make these changes overnight `because there are an awful lot of professional people who feel that you better keep the amateurs out of the act, because all they do is mess it up. It reminds me of the Peace Corps. There were an awful lot of pro- fessional diplomats who really weren't very keen on having amateurs known as Peace Corps people messing around in "diplomacy." Mr. DANIELS. Having had this program for the past 28 months, do you find any duplication of the activities of Headstart and follow- through with any other programs sponsored by any other agencies of the Government~ Mr. SUGARMAN. I do not, Mr. Congressman. In fact, foliowthrough cannot operate in competition. It has to operate in cooperation. That is one of our reasons for wanting to involve the Office of Education so deeply in this program, so that there will be coordination between title I Sta'te and local groups the Followthrough funds. Mr. DANIELS. What is your office doing with respect to evaluating the programs which have already been instituted throughout the vari- ous States and possessions, and in the dissemination of that knowl- edge to the various agencies that are operating the program? Mr. SUGARMAN. We are doing a good deal, Mr. Congressman. I think our most important effort is in terms of 13 regional rsearch and evalu- ation centers which we have established throughout the country to survey, analyze, and evaluate representative Headstart programs. The results of their findings will be publicly available, as are all research and evaluation studies made of Headstart, and they will be dissemi- nated through the training programs that we finance, and also by direct mailings to the local community. Mr. DANIELS. Thank you. Mr. QuIE. Will the gentleman yield? Mr. DANIELS. Yes, I yield. Mr. QuIR. Could we have Dr. Sugarman place in the record the location of these 13 regional evaluation centers? Mr. SUGARMAN. Be happy to. (The information follows:) PAGENO="0564" C tTj 0 0 0 0 Research and Evaluation Centers E & R Center Director and location Regional respon ibihty ]Jcglonal offices as oci ated Temple University, 215, 787-8066/8067 (8+215 +597-3311). University of Kansas 913 864 3081/842-2362 (8+316+267-6311). Dr. Theron Alexander, Philadelphia, Pa . ~ Dr Trances Jiorowute L uwrenco K ins Urban Philadelphia, central and eastern I'ennsylvania, West Virginia, eastern Kentucky, and Tennessee (i.e., Appa- lachia). Kane us Nebraska western Missouri Colorado Wyoming, Montana, North and South 1)uukota. II, Washington; III, Atlanta. ~ . VI Kansas City ~ Bank Street College of Education, 212, 243-4903x14 (8+0+212+number). ~ University of HawaIi, 808, 944-8477/8901 (call long-. distance operator). Syracuse University 31) 4i6 541x0298 (8 315 +4733350). University of Chicago 312 643 1111/1044 (floss) (81312+353-4400). Mithukcn `~tato Univirsily H7 33 7999 (84 17 +372-1910). Dr. herbert Zimiles, New York City Dr. Dorothy Adkins, Honolulu, HawaiL - Dr William Moyer S~racu o N Y ~ ~ 1)r Robert Hm ss and 3 )r V s Shipunan Chicago, Ill. I)r Such Jiervey I ast I ansnig Mich New York City (overlaps with Teachers College) Maryland, Delaware, New Jersey, l)istrict of Columbia. Hawaii, (main, Sauuoa, Alaska, Washing- tous, Oregon. N(w hork btato (exelu un 7a mule ruhiu, of New York City), western Peniusyl- vania, and eastern Ohio, Puerto Rico, Virgin islands. Illinois in han i w s rn Kentucky md avesterus Tennessee. \\ uuouusin (txn lt ( Inc igo suburbs) Michigan, Minnesota, western Ohio, and Iowa. I, New York; H, Washington. VII, San Francisco; special projects. I Ncw Yo k IV Chicago spechul projects, H, Washington. . H \VuiShlnukton III All nit m 1V Chicago. IV Chic-u o VI K-sits us City University of Texas 512 471 1361/1362 (8 f-d2-l 476-6411). Boston University, 617, 262-4300 x169 (8+617+223- 2100). Teachers College, 212, 870-4149 (8+0+212+num- ber). University of California at Los Angeles ~l3 272-8911 x4026 (8+213+888-2000). Dr John 1 icrce Jones Austin `fix Dr. Frank Garfunkcl, Boston, Mass Dr. Robert Thorndilce, New York, N.Y - - ~ Dr Carolyn Stern Los Angeles Calif `fixes New Musico Ar sotu Okl thorns Utah. Massachusetts, Vermont, New hampshire, Maine, Rhode Island, Connecticut. New York City plus 75-mile radius (over- laps Bank St. which is responsible for north Jersey suburbs of New York City). C hfornua (all) Nes ada . V Austin VI Kansas City VIE San Francisco. I, New You-k. 1)o. VII San Pr anci co University of South CarolIna, 803, 705-8100 (8+803+253-8371). Southern/Tulane Universities, 504, 775-6300x340 (8+504+348-7181)-Baton Rouge 504, 885-7711x393 (8+504+527-2611)-New Orleans. Dr. Myles Friedman, Columbia, S.C ~ Dr. Edward E. Johnson (Southern) ,Baton Rouge, La. Dr. Melvin Oruwell (Tulane), New Or- leans, La. South and North Carolina, Virginia, Georgia, Florida. Louisiauua, Alabanue, Mississippi, Arkan- s-ms. ~ H, Washington; III, Atlanta. . III, Atlanta; V, Austin. ~ PAGENO="0565" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1403 Chairman PERKINS The time of the gentleman has expired The gentleman from New York has 10 minutes Mr Gooddell Mr GOODDELL Thank you, Mr Chairman First, for the record, I think something should be clarified Mr Quie asked a question which partially clarified it I here `ippears some effort to set up a strawman to knock down in teims of what all the proposals h'ive been for Headstart today To my knowledge, nobody has proposed that we transfer Headstart sim- ply into the public school system, period. I agree completely, as I did 3 years ago, and Mr Quie did, w ith the b'isic philosophy expressed b~ Mr Shi iver a few minutes ago, that we must have involvement of people themselves. You don't do things to people, you do it with them, md that is the ~m `ty you get effective ness And y our proposal simply would begin to provide some coordin'i tion in these programs We beIie~ e that there is no iustification foi h'mving two sources of Federal funds running par'tllel in many in stances, overlapping in their authorizations for what they can do. So we now h'tve the Office of Education under title I in present school progr'mrns, `ind the Office of Economic Opportunity with Headst'irt Not oni that, your very propos'd for Followthrough, your discus s on of the need to coordinate or going to coordm'ite through the Office of Education by delegating programs to the Office Of Education, ap- pears to be vemy good lustification for the h'indling of coordin'ttion under the }Ieadst'trt exactly the same wa~ All the `ii guments you made for coordinating Follow through through the Office of Education `ipply to He'tdst'trt Our pioposal in simple terms is to have one source of Federal funds in the Office of Education which would, in turn, channel money through a new State `igency th'it involved private `ind public school offici~ls, community ~etion hoaid members, ch'irit'tble gioups and soci'il welf'tre, and so forth that can't go through the State educational system. They, in tuin, would make grants to Community Action boards at the local lem el ~ ho w ould contract for He'idst'trt `ind for Follow through with tl e most `ippropriate agency, public, priv'ite, nonprofit All the things you s'url appe'tr to he criticizing propos'mls that `ire not applic'ible to wh'it we are proposing and I know of no one th'tt is proposing th~t we elirnin'ite community action in this whole oper'i tion, thmt it all be done by the public school system, I know, `is `t m'itter of f'ict, of nothing in our proposal that would prevent the pu i `ite school from particip'iting under contract with the community `iction boards as they do now Occ'tsion'mllv the implication creeps in th~~t OEO can do thmn~s constitutionally that the Office of Education cannot do constitution `thy Of course we will know that is ridiculous I would like to ask a question in another sphere You touched on come likely ev'iluation procedure We have seen some evaluation studies that `ire beginning to question the long term impact of He'tdstart, `mud I mean by long term 8 or 9 months after they h'tve had a He'md st'ut expenence, un1e~s it is followed through Many of us raised this question at the very outset. We felt that there had to be a continuing lrocess as between the school systems PAGENO="0566" 1404 ECONOMIC~OPP0RTUNITY ACT AMENDMENTS OF 1967 Again, this is part of the reason why we want to get the schools themselves involved. Recently the Government Operations Committee of the House of Representatives issued a very voluminous four-volume document on the various evaluations and research projects funded by the Federal~ Government. They indicated that $380 million is ear- marked each year for Federal social research;. $380 million. Among other agencies they cited the Office of Economic Oppor- tunity as having spent $~`0.7 for Federal social research in the past 3 years, $70.7 obligated. It is my understanding that you are request- ing $35 million, for fiscal .1968. I would just like to cite a few of the comments, completely non- partisan, from experts who are trying to utilize this research and then have your comment as to how you are going to handle this. "* * * the ones that are critical of the Administration usually are quietly suppressed to protect the personal `interests of the bureaucrats. But generally these studies avoid criticism. They are most often self-serving instruments of the sponsoring agency. Another comment, by the research director for the committee: Does the Government really want the whole truth and nothing but the truth, or only comforting truths-only those truths which can be widely publicized because they are politically palatable? He went on to say that' many Government agencies have either "buried, forgotten, modified, or only partially disclosed" what they called inconvenient truths. Another expert made the comment that the Office of Economic Opportunity interprets its statistics in the most favorable light pos- sible. Dr. Winifred Bell, who recently resigned as Chief of the Demon- stration Projects Group, the Bureau of Family Services of the Wel- fare Administration: The need to justify new programs, to report success stories, to gain Congres- sional appropriations, and to compete with each other is too great at present to generate the quality of research or reporting needed to appraise these programs. Dr. Orlans of the committee research staff made this point:' * * * private scholars tend to be used not as independent students of the truth, who may introduce fresh ideas into stale programs, but to `buttress existing programs. With specific reference to the Office of Economic Opportunity, the subcoiumitte found that these `comments were especially true with the Office of Economic Opportunity. The antipoverty agency spends plenty on evaluations. Some are good. But according to an academic authority as Oscar A. Ornati of New York University, "New knowl- edge and new policy are * * * almost entii~ely unrelated." "The effectiveness of these evaluations is minor," Dr. Ornati said. "There is little systematic analysis of the reports and no routirnzed way for findings to be distributed * ~ . . On this latter comment "no routine way for the findings to be dis- tributed," for the past 2½ years I have been very interested in what research was going on' and what evaluation. Until very `recently. I found great difficulty even getting copies of recent evaluation studies that had been done by OEO with the taxpayers'.. money. Certainly these ought to be available to Members of Congress.. PAGENO="0567" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1405 In the last few months we have been told that if a Member of Con- gress wants to go down to your library, there* is one copy available that we can look at down there of the research study Scholars would have a tremendous problem with this and a great deal has been writ- ten about the unavailability of studies. I am sure that part of these criticisms that I quoted derive from the fact that they found it so frustrating to get ahold of studies done with the taxpayers' money supposedly. to evaluate what we have been doing, so that we can make improvements. I think if we are going to spend $70 million over a period of 3 years in Federal social research out of the poverty money, that it would be a small further expenditure to have those studies mimeographed in ample quantity so that they are available to scholars and to Members of Congress to evaluate what we are doing. I would be glad to have your comments. Mr. SUGARMAN. Let me speak to the Headstart portion of that discussion and then perhaps Dr. Levine would like to speak to a more general question. Let me simply say that the facts in Headstart are not as suggested in that article, which if I remember correctly appeared in the Christian Science Monitor. First of all, every Headstart evaluation study is available and has been available to anyone who wanted to see it. The press has made frequent visits to our office. There is a problem in providing enough copies of these documents to give one to everybody that would like to have on.e. Mr. GOODELL. Let me ask you this. How many copies do you have done? We have been told that one copy is available, that is all. That is what everybody is told that goes in. You may "making enough copies." Mr. SUGARMAN. Ordinarily we require submission of 50 or 100 copies. Mr. GOODELL. In most instances these would be ample? Mr. SUGARMAN. That is correct and wherever a specific report is sufficiently popular, speaking of Headstart now, we provide enough copies. Some of these studies are several hundred pages long. They are available and have been rather thoroughly analyzed. We have not repressed or withheld any of the findings, even those which appear to be contradictory. I won't say that we have solved the dis- semination problem. We have done some things. For example, let me cite the research funded * with Dr. Martin Deutsch, of New York University, and Dr. Susan Gray, of Peabody College. In each case with the research we have funded a training pro~ gram as well, so that the knowledge gained could be immediately dis- seminated to the people who need to have it. We have more to do, I will acknowledge. Mr. GOODELL. I would like some assurence and I think all the mem- bers of the cOmmittee would like assurance that whatever the present policy may have been, that in the future there are going to be enough copies run of all of these research studies that we have paid for so that when a member of this committee or a scholar contacts you, they may be able to get a copy I wrote and Mr. Quie wrote and we have not received copies and I recently received a reply that three of them are not available. Our PAGENO="0568" 1406 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 research people were told when they went there that this one is out somewhere else. This is, of course, a frustrating business when you are trying to look at the studies that are done by independent scholars and evaluate what we are doing. May I ha~ve a reply from Mr. Shriver on the question. Chairman PERKINs. Surely. Mr. SHRIvER. I think it is a fact that 90, if not. 100, percent of the ad- yerse comment in the press on Headstart is based on Headstart studies made by OEO and supplied to newspaper people. So far as I know, there has been no study of Headstart by anybody outside of those that we financed ourselves, which has been derogatory about Headstart. In other words, all of the derogatory information about Headstart has been supplied to anybody that wants it and that is what you `are reading from and that is what the people you have read of based their comments on. ~o I agree with Mr. Sugarman that so far as your comments are directed to I-Ieadstart, Congressman, so far as I know, they are not correct. I would like to ask Dr. Levine, who is in charge of research and e~mluat.ion, to comment about the generality of your comments. Mr. GOODuLL. Before you pass it to Dr. Levine, it is a fairly simple question. I would like a expression from you that whatever previous policy has been~ that you are going to see to it that. of the money that is spent for research proects, a small amount will be set aside so that there are ample copies of those evaluation and research studies avail- able to the. Members of Congress and to scholars in the future. Mr. Smiivre. Of course~ that has always been true and we will con- t.mue to keep it so. Mr. GOODELL. If you say it. has always been true, that is a false state- ment. Mr. SHElVER. I don't think it. is a false statement. Mi GOODELL If ~ on will s'r~ that ~ on ~re going ~o see tb `it it is ti ue in the future, I would be relieved. Mr. SHElVER. I am glad to relieve you. All I am trying to say is that it has been true., that such studies as we make under Dr. Levine's di- rectiOn are available. Mr. GOODELL. Are available? Mr. SHElVER. No studies have been held back at all. I might point out, for example, that the University of WTisconsin does studies with our money which are available and I never heard anybody comment about them. They are, however, extremely good studies. Mr. 000DELL. I am aware of and have looked at the University of Wisconsin study and copies were made available to us; $70 million has been spent in this research, and when we request copies, we frequently find great difficulty and even our staff, conforming to your previous policy of going and looking at one copy in the library, frequently found it unavailable. Mr. SHElVER. I might add that the figure of $70 million for research is wrong. The $70 million includes all of the demonstrations, many of which are not research. I would like the record straight, so that we are not spending that money for research alone. PAGENO="0569" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1407 Mi GOODELL Mr Ch'urrn~in, just to ~nswei that pathcul'~r point, may I read ft om the Con mittee on Go~ ernment Operations staff study and their quote and they are the ones that are the source of my figure, and they say: Research does not mclu le piograms of demonstration train rg or eauc'ition ioutine data collection the construction of build ngs and facilities or the development of equipment, materials, devices systems, methods, prototypes, and pi oces~es Wh'~ you s~y is in cli~ect conti `idiction to the da~'~ dei eloped b~ the Government Operations `Ccñimittee under its very able chairman, Mr Rei~ss Mr LEIINE My data show in fl~c'tl 1956 `ind 1957 $21 million sp~nt on iece~trch os si~ch Tins nv'~ be `t definition'il question Mr G00DLLI Will this cited $9 7 million `rnd in 1966- Chairman PERKn~ s The gentleman ft om New York Mr BURTON The point I would like to m'ike is that I think the othei side should h'ive a full opportunity to explore these m'itters, but I think the time should come from the other side until the rest of us living with the 5-minute rule have an opportunity to ask questions. I suggest that until we catch up with the time utilized on the other side. Mr. GooDEJ~L. What you are doing is cutting off your only people from answering. Mr LEVINE Mr Chairman, I want to e~pl'iin one thing Mr Shriver is rioht that ~ e ha~ e made these things mulable I thrik Mr Goodell is iight th'tt the~ have not been ea~v iO get at `ind I w'tnt to accept personal responsibility for that fact which has been a mistake on my parL Chairman PEIuUNS. The Chair recognizes the gentleman from New York, Mr Scheuer Mr LEVThE I would like to explim once and for all th'it `i policy of complete openness was adopted by this agency some 8 months ago so far as making these documents avail'tbie At that time in my n'uvete I thought that we could make these things available in our library and heve scholars `tnd congressional staff come in I was plain wiong In `inswer to Mr GoodeU's q~iestio we `tie hiking steps ~o coriect that both on the b'tch stuff, to g'~t the b'ck m'i' ci VII copied `tnd the forward stuff to write into our contracts from now on, provision for eiiough copies so th'tt they will be ~vailabJe I `~m perfectl~ w Ping to `ic~ mt that `~ri 01 Ho~ ever Mi Shu~ ei is absolutely correct th'it in tei ins of e~ `ulibility openness of i.esults, th~se have been available. They have been tough to get at because I didn't re'ihze tI 9t it would be necess'~ry to ieprodiice them in the quantities to (ret them to the Congress end others Chairm'tn PErwIi\ s Mr Scheuev Mr SCHLULF I think that w~s `t ~ eiy helpful clarification I `irn ~i~d to yield a moment of my time to get it in the record I would like to ~a'\ th'it having woiked closely in the Headstart proe'ram in my district `ird having woiked closely with Headstqrt ofPcmls in \\T'ishiiigton, I think it is `t maivelous progr'tm I think the adminis ti'ition h'is been `ibsolutely ~rst class It h'ts been innovative PAGENO="0570" 1408 ECONOMIC OPPOR'TLTNITY ACT AMENDMENTS OF 1967 I don't believe that there has been any attempt to buttress existing programs. On the contrary, there has been a very creative and forth- right attempt to improve and mold these programs as experience developed. I have only one complaint at all with Headstart. That is, it hasn't been doing enough for enough kids. I wish the OEO had come in and asked for a vastly larger appropriation so that Headstart, a full year's Headstart, would be made available for each one of the roughly 2,700,000 or 2,800,000 kids that need Headstart. I think we have had far more than enough research to indicate the soundness and the right- ness of the basic thrust of the Headstart program. I see Nolan Estes nooding his head, and I think it appropriate to point out here that Nolan Estes and Jack Hughes in their own work in the magnificent report of the Advisory Colmeil with title I have emphasized the necessity of exactly the Hea.clStart thrust in the ele- mentary and secondary education years. They indicate the necessity for exactly the totalit~y of programs that you have developed: for the parent outreach, for the smaller class sizes, the supporting social serv- ices, the medical and health and nutrition care. Am I right, Dr. Estes? Mr. Es~rrs. That is right. Mr. SCHEUER. If anything, in the Office of Education itself we have had a tremendous thrust for change, and contrary to the statement that they or Headstart have been attempting to buttress the existing pro- grams the report of the Advisory Council on title I stemming from the Office of Education has made it transcendentally clear that what we must have is exactly that thrust for change in the existing educa- tional establishments. I wish to second the remarks wherein I indicated the value of having this competitive thrust from Headst.art. There. was an indication that there wasn't a thrust from the Office of Education; but there has been, and it has been exciting to see. As far as the local education agencies throughout the country, Headstart has buttressed the thrust that is coming from the Office of Education. It has changed the ways of doing business of the local education agencies because they have but a com- petitive good to provide new services embodied in the Headstart concept. Can I ask you, Mr. Shriver, have you done any cost-benefit analysis of Headstart? I think we all across party lines here have the feeling that the Hea.dstart program is right as rain. Certainly there has been no comparable program in the whole concentration of your projects that has received such enthusiastic public reception and has had so little criticism.' As I say, the only criticism I have is that there isn't a great deal more of it. Can you tell us from any studies that you havedone, do you feel that this is the area we ought to concentrate recourses in? Is a dollar spent on a Headstart program a sounder dollar with a bigger cost-benefit return than a comparable dollar spent on the Job Corps or Neighbor- hood Youth Corps or other of your programs? Mr. SnulvEn. May I ask Dr. Levine to answer that. In one sentence, we have not come up with a cost-benefit ratio on Headstart, nor do we have a comparison such as you and we would like to see. I think our people can explain why it is so difficult to get to that point. PAGENO="0571" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1409 Mr LEVINE If you remember, Mr Scheuer, when we were discussing cost-benefit analysis a couple of days ago, I said I had presented to the committee oniy the ones we have been able to do. We have not been able to do one on Headstart. There are several reasons' a couple of which Mr. Sugarman alluded to in discussing the difficulties of evaluation as such. I repeat that you can't do cost-benefit analysis until you have data to work with. You have to get decent measurements before you do the analysis. There is another point, which is that I-Ieadstart is a program which, if it works-if it is to be amenable to cost~benefit analysis-a-if it works in adding to the ultimate earnings for the poor, which is our objective measurement, has got tO work with a lot of programs subsequent to Headstart, starting with Followthrough. And that is why we are in the Followthrough business. It must continue into other in-school pro- grams under Elementary and Secondary School Act auspices and private auspices. These children are just getting into other programs, and Headstart cannot be evaluated by itself and it will be 10 or 12 years until these kids are getting out of the Headstart program. This is different from Job Corps and Upward Bound. Mr. SCHEUER. May I ask one more question, because my time is almost up. One of the interesting things that came out of the report of the National Advisory Council is that in many areas of the country, particularly in the rural South, much of, if not all of, the title I funds were spent for health and nutrition, for taking care of kids who came to school in the morning sick and half asleep with hunger. We have an article from; the New York Times, a week ago Saturday, that I would like unanimous consent to insert in the record at this point. Chairman PERKINS. Without objection, so ordered. (The document follows:) [From the New York Times, ~une 17, 1967] SEVERE HUNGER FOUND IN Mississrrri By Nan Robertson WASHINGTON, June 16.-A team of doctors who recently returned from Miss- issippi told Congress today that they had found hunger approaching starvation and serious untreated diseases among hundreds of Negro children there. The doctors met with members of Senator Joseph S. Clark's Subcommittee on Manpower, Employment and Poverty after a four day inspection of conditions in Humphreys, Leflore, Clarke, Wayne, Nesboba and Greene Counties. In all, they saw and talked with ~.to 700 children, as well as extensively interviewing about two dozen families. They described the health of the poor children there as "pitiful," "alarming," "un,believable" and "appalling," even though Mississippi has reached a higher percentage of its poor with food programs, using Federal antipoverty funds, than any state. FIELD FOUNDATION PAID The team, sent with money from the Field Foundation of New York, whose major interests are child welfare and intercultural and interracial relations was made up of the following doctors: Dr. Robert Coles, a child psychiatrist with the University Health Service, Harvard University, who is the author of "Children of Crisis"; Dr. Raymond Wheeler, an internist in private practice in Oharlotte, N.O.; Dr. Alan Mermann, a pediatrician and assistant clinical professor at Yale Medical School ~ ho made PAGENO="0572" .1410 ECONOMIC OPPORTUNITY ACT . AMENDMENTS OF 1967 a medical survey in Lowndes County, Alabama. last year, and Dr. Joseph Bren- ner of the medical department of the Massachusetts Institute of Technology. who has made other medical inspe~tions of the South and in Africa. Dr. Wheeler, who is executive committee chairman of the Southern Regional Council, a private group whose stated goal is equal opportunity for all South- ernners, said he had been born and raised in the South but had not.been prepared for what he saw in Mississippi. He stressed the "absence of compassion and concern" among health and wel- fare workers and described one child who came for treatment with a "nasty laceration." The nurse gave the child a tetanus shot, Dr. Wheeler said, but "didn't dress the wound." "She didn't even look at the wound," he said. In child after cluld the doctors said they had seen nu ritional and medical conditions "we can only describe as shocking-even to a group of physicians whose work involves daily confrontation with disease and suffering." They said they had seen children afflicted with suppurating sores, severe anemia, ear, eye and bone diseases, heart and lung ailments that had gene undiagnosed `nd untreated chronic diarrhea appalling tooth ~ecav and i~ii every county we visited obvious evidence of severe mah'u~ution AS BAD AS AFRICA £he docto~'s report continued "We do nOt want to quibble over words. but `malnutrition' is not quite what we found; the boys and girls we saw were hungry-weak in pa in, sick; their lives are being shortened . . . They are suffering from hunger and disease and directly or indirectly they are dying from them-which is exactly what `starva- tion' means." The doctors made their disclosures in discussions with the Senate subcom- mittee at a lunch in the New Senate Office Building, and later at a new-s con- ference. Dr. Brenner, who had spent one year in East Africa, said he had found health conditions in the South among the poor as bad or worse than those among primi- tive tribal Africans in Kenra and Aden. "It is fantastic," he said, "that this should be so in the wealthiest nation in the world-the wealthiest nation that ever was." The team emphasized that the families they saw in Mississippi were totally isolated, unseen and outside the "American money economy." They described some who struggled to live on $15 a week, which they earned after working 55 hours, with children who ate biscuit for breakfast, boiled beans for lunch and bread and molasses for dinner. They saw women, they said, "who had not had money in their hands for weeks." Therefore, they said, the Government should change the food stamp program so that the rural poor could obtain food stamps free. The stamps now cost from a monthly minimum of $2 for each applicant to a maximum of $12 for large families. They can be used to buy quantities of food worth much more than those amounts. The doctors also met with Assistant Secretary of Agriculture George L. Mehren and his staff, and said they had found them honest and concerned, But the team was also "discouraged" by reports of Congressional opposition to the free distribution of stamps . even to penniless families whose fathers are declared "able-bodied." thus making them ineligible for welfare. Senator Clark is planning to hold public hearings on the doctors' survey next month. Mr. SOHEUER. It describes the severe hunger among the kids in Mis- sissippi. The doctors referred to it. as pitiful. apnalling tooth decay and "in every county we visited," the doctors continued, "obvious evidence of severe malnutrition." The doctors' report continued: "We. do not want to quibble over words, but `malnutrition' is not quite what we found; the boys and girls we s'iw wer~ hungry-weak, iii n'un sick ti eir in es are berrg short ened ~. They are suffering from hunger and disease and directh. or indirectly they are dying from them-which is exactly what `starvation' means." PAGENO="0573" ECOI~OMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1411 My question is this : We have had abundant evidence that the educa- non programs themselves can't succeed when kids come to school half starved with hunger in our affluent society I would like to ask what program the OEO is developing and perhaps Dr Joe Erghsh might w ant to say somethings here, to bi ing the basic elements of health nutri tion to every American child so that they have half a chance to make a go at their school lives. Mr. SUGARMAN. Let me use Mississippi as an example, Congressman, where we now have, as I indicated earlier, some 30,000 children in full- year Headstart programs. In each of those programs, the children who are in Headstart are getting, first of all, at least one and usually two meals a day. Mr SCIIEUER My time is youis I know the great job you are doing, and I know that those 30,000 kids are being taken care of but there must be millions of kids in other parts of the South, and in the North ~s well, including my congressional district, who come to school in the morning not having had a square meal since the school lunch the day before. Has the poverty program developed a thrust to reach the kid who can't succeed in school because of extreme hunger no matter what the Office of Education does to develop innovative educational programs because these kids are sick with hunger? Mr. SHRIVER. Could I say that three things have happened. One is that under Headst'irt, kids get not only breakfast but lunch in your district and every place else In the Neighborhood Health Center program, we are attempting to deal with the things described there. Mr. SCHEUER. It is a great program. I hope Dr. English will have a chance to describe itin detail Mr. SHElVER. The third thing is that OEO is not the food-feeding agency of the U.S. Government. However, we have initiated a project called Health in Mississippi and we have given money for the pur- chase of food stamps so that a poor person gets them for nothing in 22 counties where these conditions are alleged tobe the worst. Don't misunderst'ind me I am not trying to say that we ha~ e done as much as we should knve But the fact is that we are not the feeding `igency and that every dollar ~e spend in that way does t'ike away from dollars that we can spend in ways that would perhaps get some body out of poverty rather than just out of hunger Don't misunderst'ind that statement We agree that it ought to be done and we ha~ e done what we can do, but we would need a lot more money and a specific authorization if we are to get into the feeding business Mr SCHEUri It seems to me clear from the evidence that if you want to get into the "getting out of poverty" business and the educa tion business, you ha~ e to get into feeding `md nutrition and medical health services business Our whole established systems of di~tributing nutrition and distributing medical help for the kids in America is desperately deficient I hope that you people who `tre the ninovatoi s will at least come up with `i. program that Congiess will consider to bring adequate mediccml and dental and health and nutrition care to every Americ'in kid that needs it Di F1~GLTSH Mi Congie~srnan, I think you `ire describing i situa tion that we hear from the doctors th'tt `ire down there working in the first neighborhood health center, starting in Bohvar County, Miss They told us th'mt the best meal provided for the children is the one PAGENO="0574" 1412 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 that the Headstart kids get at breakfast and lunch, and now the prob- lem in funds in extending that. They feel that the conditions are so terrible for these~children, that they are going to be prescribing food as medicine by prescriptions be- cause it dosen't help to help the children with other kinds of medicine unless food can be available, and in some ways this is the only way that food will be available. Mr. SGHEUER. Are you doing that in your community health centers in New York and Boston and Denver? Dr. ENGLISH. So far we haven't heard from that, from some. of the other centers. As they get underway, we may find similar conditions there, too. We have heard this mostly from the doctors that have be- gun to work in Mississippi. Mr. SCHEUER. I want to say as a northerner that this problem of hungry kids going to school is not a regional problem. It may be dra- matic, at its worst, in the South, but I am sure you would find the same thing in the Bronx and other areas of the urban North. I want to make it clear that this is an American problem and not a North-South problem. I hope that with your sensitivity to this problem, that all of you at this table, including the Office of Education people, will give us some kind of design for a program that, after all of these generations and decades in a society that is more affluent than the mind of man has ever imagined that we could ever achieve, that we will finally bring basic, minimum, human standards of health and medical and nutrition care to these kids. We look to you for that kind of imagination and insight. Mr. SHRIVER. Could I point out in passing that a number of exist- ing school districts, boards of education actually do provide break- fast with local funds today. Mr. SoHEu~R. Would it be a fair statement that a good deal of that has been stimulated by the kind of programs that youhave been carry- ing on that schools have adopt.ed, showing that it has worked and is popular? Would that be a fair statement? Mr. SHRIVER. I don't know. I know that before we started Head- start, as a matter of fact when I was on the board of education in Chi- cago, we fed about 20,000 kids for breakfast in Chicago who caine to school so hungry that they couldn't study. I am sure that if we were reaching 20,000, there were probably 40,- 000 that needed it. I am guessing. I don't know how many other school districts do the same thing, but there is a substantial amount of local money spent for that purpose in the United States. Perhaps it ought to be greater. Chairman PERKINS. Mr. Dellenba.ck. Mr. DELLENBAOK. Thank you, Mr. Chairman. Dr. Sugarman, pick- ing up in part where Mr. Seheuer was talking in terms of numbers, how many young people are being covered by Headstart at the present time? Mr. SUGARMAN. About 700,000, Mr. Dellenback. Mr. DELLENBACK. On annual basis? Mr. SUGARMAN. Of which 500,000 are oniy in summer programs and 200,00 in full-year programs. Mr. D1n~LENBAOK. What is it that is anticipated for fiscal 1968 in the way of numbers of young people? PAGENO="0575" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 .1413 Mr. SUGARMAN. Approximately the same number with a slightly, about 20,000 more in the full-year programs. Mr. DELLENBACK. Is that' in addition to the 190,000 that you antici- pate covering with Followthrough? Mr. SUGARMAN. Yes, it is. Mr. DELLENBACK. So Headstart will deal with about 700,000 and Followthrough with about 200,000? Mr. SUGARMAN. Right. Mr. DELLENBAOK. How many young people are there in the United States as you see it at the present time who are in need of Headstart? Mr. SUGARMAN. Mr. Ohairman, there are about 1 million poor chil- dren in each age category. Last year we submitted to this committee a rather comprehensive report on this subject which has all the sta- tistics on the numbers of children that need service and the cost and activities required to provide that service to the children. Mr. DELLENBACK. May I ask, Mr. Chairman, that in view of the time shortage, rather than to go over them all at this time, that rele- vant portions of those statistics be included in the record? Chairman PERKINS. Without objection, so ordered. (The statistics to be furnished follow ) POOR CHILDREN IN THE UNITED STATES IN NEED OF HEADSTART To millions of Americans, Project Head Start is a notable achievement of the antipoverty program. Their enthusiasm for the program, their willingness ~to work with it `and their confidence in its success have created a great demand for Head Start Programs. This year 500,000 children will benefit from sumnier Head Start programs and 150,000 from full-year programs. At the request of the House Education and Labor Committee the Office of Economic Opportunity has prepared this informational report on expanding Head Start. It describes the potential problems, methods and costs of providing FULL-YEAR programs for all poor 3, 4 and 5' year old's who would benefit from Head Start or equivalent programs. I't should be noted that much of the material in the report is based on the limited data which could be obtained in a two-week study. Additional studies would certainly alter and improve this data. The report results from the Committee's specific request for data on FULL- YEAR programs for 3, 4 and 5 year olds. In evaluating this information the Committee will no doubt want to consider the relative costs, advantages and disadvantages of summer program's as well as the priorities of attemition for various age groups. It will also want to weigh the needs in this area as against the many other needs of the children and adults who are in poverty. The report includes no recommendations by the Office of Economic Opportunity beyond those included in' the President's 1967 Budget request. `The very sub- stantial costs of a complete program would create formidable budgetary problems. SUMMARY 1. This report contains an analysis of the numbers of children who could be served by FULL-YEAR Head Start programs and the funds, staff and facilities which, in our judgment, would be required to create programs for them. Each of these elements has been analyzed in terms of what would need to be done and `how it might be accomplished. The report~ should be read in the light of judg- ments on- The relative importance of Summer and Full-Year programs. `The' ages of children to be served. The impact whinh any program expansion would have on the Federal budget. The speed with which a program could proceed without disrupting other important health, social service and educational activities. The demands which it will create for improvement of elementary school programs. PAGENO="0576" 1414 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 2. Head Start is a highly- successful and significant child development program for disadvantaged young children and their families. There are now approxi- mately 3,000,000 children ages 3-5 who come from poor families. Of these ap- proximately 500,000 are presently enrolled in publicly supported programs (exclu- sive of Head Start). Many current public programs, particularly kindergartens, provide a considerably smaller range of services than Head Start. 3. There are, then, approximately 2,500,000 children not presently served by public programs. Since the program is not compulsory, it is likely that because of geographic dispersion, lack of public interest, or inability of specific children to participate no more than 80% could ever be brought into Head Start or equivalent programs. This suggests a potential of 2 million poor children. Since OEO per- mits 10% of enrolled children to come from families above the poverty line the maximum potential would be 2.2 million. Of this total: 470,000 would be 5 years old. 850,000 would be 4 years old. 880,000 would be 3 years old. 4. Supplemental funding for programs administered by the Office of Educa- tion (Title I-Elementary and Secondary Education Act), Bureau of Family Services (Social Security Act)-Chilclren'S Bureau, (Special Project Grants) and the Public Health Service, as well as the Office of Economic Opportunity could improve existing programs for 400,000 children in kindergarten. 5. With adequate funding it should be possible to expand Head Start at a maximum annual rate of 600,000-800,000 children. It is our judgment that it would be technically feasible to provide adequate personnel, training and facili- ties and to maintain reasonable quality standards while these resources are being developed. In reaching a 2,200,000 level for Full-Year children, construction and training would have to be carefully phased so that both facilities and staff are ready before children are actually enrolled. Lead times between approval of programs and their opening may range up to a year. Thus the absolute minimum time required for full enrollment would be four years. 6. To reach an operating level of 2,200,000 children it would be necessary to provide short-term training for 147,000 teachers and 290,000 non-professionals and 39,000 other professionals. While it is probably feasible to recruit the number of people, it would create serious competition with other important public pro- grams, particularly in education. Facilities would need to be renovated for 350,- 000 children and constructed for 1,650,000. 7. The estimated costs of providing for this expansion are: Annual operating costs: $0.9 billion for 800.000 children. $1.5 billion for 1,400,000 children. $2.4 billion for 2,200,000 children. Training Costs: $64 million for 800,000 children. $112 million for 1,400,000 children. $182 million for 2.200,000 children. Renovation, construction and equipment costs: $1.0 billion for 800,000 children. $2.0 billion for 1,400,000 children. - $3.6 billion for 2,200,000 children. Annual research, evaluation and administration costs: $16 million for 800,000 children. $100 million for 1,400,000 children. $138 million for 2,200,000 children. Kindergarten Enrichment program costs: $160 million for 400,000 children. The actual costs to the Federal Government, and the appropriations required, would depend primarIly on the timing of an expansion program and the methods selected for financing of construction. The latter could involve various combina- tions of Federal, State, local and private funds. If expansion were to occur at the maximum possible rate to reach an enrollment of 800,000. the first year Federal obligations would be $1.1 billion plus whatever portion of $850 million in con- struction costs would be federally supported. Parts of these costs could be borne by agencies other than OBO. S. OBO's present legislative authority is adequate to undertake any proposed level of expansion with two exceptions PAGENO="0577" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1415 (a) If Federal assistance is to be provided for construction, the legisla- tion would have to be amended. (b) The level of OE0 appropriation authorizations would have to be in- creased to take care of any amount above the President's budget request of $310 million for Head Start. Mr. DELLENBACK. I assume it is your eventual goal hopefully to cover this entire group with Headstart. Mr. SUGARMAN. That is correct. Mr. DELLENBACK. What would you anticipate the annual budget requirements would be to cover this number that you have set forth there? Mr. SUGARMAN. In terms of providing service to children 3 years of age and older, we said in this report last year that the annual operating costs would be approximately $2.4 billion once the programs were established. Mr. DELLENBACK. $2.4 billion. Mr. SUGARMAN. Right. Mr. DELLENBACK. That is just for Headstart? Mr. SUGARMAN. That is just for Headstart and does not include Followthrough. *Mr. DELLENBACK. What about Followthrough? How far would you anticipate ultimately taking Followthrough and how many dollars more would this run? Mr. SUGARMAN. I think our Followthrough planning is based at the moment on going through the third grade but with a diminishing nmnber of children requiring the service as they reach the higher grade levels. Mr. DELLENBACK. Let me ask `a question on that. You have indi- cated in this initial inception that Followthrough would reach through the third grade. Does your longrun planning call for you to take a further program beyond the Followthrough, beyond the third grade? Mr. SUGARMAN. The planning in this year's budget is only to reach the first grade after Headstart. Our long-range plaiming probably goes as far as the third grade but not necessarily for all of the chil- dren to get the services in the first grade. We haven't gone beyond the third grade in our thinking. Mr. DELLENBACK. Do I understand correctly that the Follow- through classes and the help would be above and beyond the regular classroom? Mr. SUGARMAN. That is correct. Mr. DELLENBACK. Breaking to. another point, how many volunteers are involved in Headstart at the present `time? Mr. SUGARMAN. We figure, estimate tha4 there are about 125,000 volunteers involved. Mr. DELLENBACK. How many paid personnel? Mr. SUGARMAN. A total number of paid personnel of approximately 50,000. Mr. DELLENBACK. But you anticipate that the hours, then, are about 3 to 1? Mr. SUGARMAN. Yes. . . 80-084-67-pt. 2-37 PAGENO="0578" 1416 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. DELLENBACK. As you have testified earlier, the hours involved, volunteer versus paid, are about equal? Mr. SuGAR~IAN. That is correct. Mr. DELLENBACK. You made one comment earlier which seems to me to have profound longrun. potential. You said something to the effect of your eventual goal being to deal with children from birth to 8 years of age? Did I listen to you correctly? Mr. SUGARMAN. I said that I t.hought that this was an evolution in thinking that was taking place, that people interested in the devel- opment of children were beginning to think in that block. That does not necessarily mean the same kinds of programs for all children. In fact, I would see quite different kinds of programs, depending on the baèkground of the particular children involved. Mr DELLENBACK. Do you niean literally to be reaching all children with one program or another from time of birth on? Mr. SUGARMAN. I think not, Mr. Deflenback. I think there are very substantial numbers of childre.n where no outside-of-the-home pro- gram is necessary. I also think it is important. to note that this is not necessarily a Federal responsibility to assume the responsibility for all of these programs. Mr. DELLENBACK. I am relieved and delighted to hear that. Mr. SHRw~. I might just underscore that, that all of those pro- grams that we have initiated have been local programs and one of the major thrusts of Headst.art is to increase t.he family's capacity to take care of its own children on the theory that. the family has this responsibility in the first instance and it is only when the family is incapable of doing it that we or any other agency gets involved; so when he is talking about the theories of child-development experts, it is the scientist's approach as to what children actually need. When they can get it through their families, we are that much better off. There is no desire on his or anybody else's part to inject the Federal Government into that or any other program except where needed. Mr. DELLENBACK. Do I read you correctly, Mr. Shriver, in your comment on Dr. Suga.rma.n's remark, that when you talk about this need for dealing with children from time of birth until 7 or 8 or whatever year you have in mind, that you are commenting that this is what somebody else has said ra.ther than this being t.he plan of OEO? Mr. SIIRIVER. That is correct; yes. lYe haven't made any such plan. Let me go back one step. I think that in families that have financial resources and the sense of parental responsibility, that the kind of planning which is done for children in those families is what child-. development experts are saying should be done for all children. That is all. In a good family setting, the mother gets the kind of prenatal advice and assista.nce and postnatal care a.nd so do the children get good attention of pediatricians; but the fact is that in thousa.nds of families in the United States, the mothers get no pre- or post-natal care and the children get no pediatrician care, and doctors are saying that without that kind of assistance, those children cannot fulfill their innate qualities. PAGENO="0579" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1417 Mr. DELLENBACK. May I ask a philosophical question along this general line? Do you feel it should be the ultimate responsibility of the Federal Government to see that all persons in the United States get the full range of potentia.l help and care available in thernedical, education, and other fields, or do you feel that it should be the re- sponsibility of the Federal Government to see that all persons rn the United States get certain minimal help in these fields~ and leave it to them to go beyond this? Mr. SHRIVER. I don't see it either way. I--- Mr. DELLENBACK. Would you tell us what you do think on this? Mr. SHRIVER. First of all, I don't think that the question should start off involving the Federal Government as distinct from State or municipal government or private social agency. Wha.t I am trying to say is that I think that society, our whole country, all of us together do have a responsibility to make sure that each individual in this society does have an adequate chance at a full life in terms of medi- cine, education, housing, et cetera; because our job is with respect to the poor, and the poor suffer from the lack of precisely those things.. Mr. DELLENBACK. But you have added a couple of words here, Mr. Shriver, which I wish there were time to go on with. this colloquy, be- cause when you say that it is the responsibility of society, with em- phasis on government., whatever its level, to supply an adequate chance for this, you are saying something quite different from saying it is the responsibility of Government to supply these things. Mr. SHRIVER. WTell, you see, Government doesn't get into these things, as a rule, at all until society as a whole has failed miserably, and we see that in what Congressman Scheuer just put in the record a few minutes ago. There would be no necessity for us to even be discussing this situation alleged to exist in Mississippi in the Congress of the United State today if the situation didn't exist as a result of some- body else's failure. This is not caused by the Federal Government. . The Federal Gov- ernment gets involved in these and State and municipal governments get involved in them simply because somebody else has dropped the ball. What I am saying is that society as a whole has a responsibility, when situations are that bad, to do something. Mr. DELLENBACK. Realizing that I am oversimplifying the question and maybe, in so doing, asking an unfair question, can you tell me in~ this context of what we have been talking about, do you feel it is the responsibility of society or government, whatever level it be, to supply this alternative A, or to supply a chance for the alternative B? Can you answer as between those two just on alternative A or B, either Dr. Sugarman or Mr. Shriver? Mr. SUGARMAN. I think there may be two questions. Mr. SHElVER. If you mean compulsion, I don't believe in that. Mr. DELLENBACK. I don't mean compulsion. I mean to submit an opportunity for them to search it out and obtain it for themselves. Mr. SHElVER. In a way in which it is reachable like the neighborhood health center actually gets the health service to the place where the person can practically get it. PAGENO="0580" 1418 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. DELLENBACK. Let me ask, on the second level, do you feel that that which should be supplied is the full range or a minimum beyond which they would be required to go for themselves, a minimum which would supply the adequate necessities? Mr. SHRIVER. As somebody said in the health field, half health care is no bargain. In fact unless you get at least adequate if not "full range," whatever you mean by that, unless you get at least adequate- quality care, you are getting short-range and as a matter of fact maybe worse. I think the problem really arises between what you call "full range" and what you are also defining as, let's say, being minimal or adequate. Mr. DELLENBACK. I suspect we have definitional difficulties. "Full range" was actually a phrase used by one of your witnesses last week. Mr. SHRIvER. If you mean by "full range" that you get the whole spectrum of medical service, yes, we do believe that the full range should be available to the family. In other words, you shouldn't have just an obstetrician and gynecologist one place and a pediatrician one place; that is a full range. If you say that you ought to have up to $10,000 a year in medical service, that is another matter. Mr. DELLENBACK. Let me ask one final question. You indicated earlier that your goals include reaching families and not just individuals and then you talked in terms of success in dealing with the individual children in large part being indicated by statistics of 5- to 10-percent increase in certain scores achieved on tests. That testing of success goes only to the individual involved, to the child. If the goal is to reach the family, how are you attempting, through Headstart or OEO, to measure success? Mr. SUGARMAN. I think there are a number of answers to that ques- tion, Congressman. No. 1 is the degree of participation of the parent; how often does he physically take part in the school's activities or in the center's activities; how often does he cooperate with the staff in doing things at home that might be helpful to the child; what advan- tages does he take; what programs does he take advantage of himself in terms of things that might help him as a parent or head of the family? Mr. DELLENBACK. Do you have any studies that measure this? Mr. SUGARMAN. Yes, very brief. As I indicated before, I think that the participation in PTA is substantially higher on the part of parents of children who have been in Headstart. Mr. DELLENBAOK. Do you have quantitative measurements? Mr. SiJGARMAN. Yes; but very sparse. Mr. Simivni~. It is also true, I think, that parents who have been in the Headstart classrooms with their kids have a greater tendency to go into adult education than those who have not. In other words, they create some familiarity with the system. Mr. SUGARMAN. We have had any number of cases where parents have returned to high school themselves. Mr. DELLENBACK. Let me: close by saying, would you make avail- able to the committee whatever you have in this particular field? Mr. SUGARMAN. We would be happy to. (The information referred to follows:) PAGENO="0581" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1419 ~~~~-.---c------- -j or tc~ or ico ~ Ic 0 ~ TU C I ( ~S S PROISCT i~E/U ST/IT CliSt T~1&S 20/ J j1?C/BL/' 01 F'J~.!0 A~0 Y0LU~iTAg~( 0022E~'S EVALU\TiOi1 n22T NO 220201). $001/SIc LDEltuIOlC/.TiOl - - [ C \ T~° u SIC 1St LY -I-T~r 1T1 L~Tfl1~ Ts~iT~ - Ic Pcrccict. of all L 12_i 12_I L~ I [SI lGlrltl Ih~ 721\7t 2.Subtyoryow~uilyschedu!e ~. ~ ~ 39 8 2. . 40 4 0.1 \ / LI . 36 12 3 40_ j 4 43 11 2 A 45 13 3 / \ I 2 I \ ~ L 12. 3 \ 1_ ~ 37 9 - -. 35 7 2 F \~ ~ 1~i ~ii~7 39. 19 is__j__~, / ~ 13 . 5 I 3. mhc~ Of %%Iu!.CrS to cocry out goals of I'o~ o~;rac 91~ 52 4.ilr!cvcncy of tho curriculum to the child ~ g~°°i~ with which yvu morhod C27~ 56 fror:r~.c parents. 6. Facilities (H4ti~g, space. water, sloramc, buthcaaws. 01c.) of thy gresehool woo 93~ 49 7. Au ot of avoilaWy s~ru cmtccicis 89/c 42 8. Qrality of avaiinbic pitty anterials .5. :\~uooacy of lIt ph~uical nraiotcnauce of thu pres~hool area 97f 69% 43 . 39 1OQsa~tyol'.~cteoehio5sopercisios 11. Usefulness oi the childeens' psechelopical oecsotes ourl ratings to your tcocbcrg * 57% 31 12. :~d~srracy of ho trospnrt;rtiou nrra:r°coicots. where nce!vd fur chli!rcc md fy~ccjS . * SGja 52 13. Au i;:iOISV of rrc(fcccl at:d/or dcjntcl sees-ices 56 1±~~~L ~_- 15. .kcailebilty of ps~cha!nyical acd4or psychiatric sees-ices 14~%_ .~. 29 seesice agencies .- r~ 17. Aderuocs- of the amuent of time set for . poreat.(eghec corwues ~_ ~ ..\ \ I hh 1 attitude with ren~cct to the physical and tss-eho!ooicat honlth of the CliL' 015 edrcationol de'nriop:ano°t. Lj LI L~ L_j Li. V.ey r * Ocase. 1 Sasto~ ol - No u-oritcctctio ,o-lrshitr oo.thuhity lime :s~iroa5le I I t -___________ [ g~ - ~L IS. exumicatioc . - so 29. Ogyaetccitv tooteod school at earle ~su 9~% 74 is 23 2._ ~ 3 j o.s c.t 1 2!. Iosracscd_espucicucu usith a saeiet~ of toys an~ games 53 27 22. teucred u.soceiecec with varietY of hoofs. 01oriys, . Cu! nook . [~_~ 76 20 . 1 -- 21. Ti5~ eta the coermurite Ti9I-~ 24. isdividgI Otteotioc gives to each child by teashee - aerlaidas * , 92% 53 -- 89 77 4 0.2- 1 / ~___1_ - . `-0.1 16 . 2 25. Or'oe:ccitcto t.ar:ici?aee a `roep activities with I viler chi!J:uo . . ~ 61 18 1 -________ coy .- 0-.: c a 5 /0 PAGENO="0582" 1420 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 C b1~ck tTe co!~flrn ~.bkb. in 5nnnrn! nd:cn~cs Iron' t: c!J~i~c:r tc,Crfl~ tb~, p~O~ni~ni Sflcflfl ~fic,.tc~ L~~r LU: 12H LU. L~ L~J I 40 In stnn:c S5~I 31 mId 2.Ic!c:cntco in flfl:( 1:030 5~ ~.Cnnin~on'~Soc.n 43 3~. Cloncen or 0~Cr~O.:Cc or l0S~ grn!0 Ici.~ 63 L Sow too poiCotfi. of C.iidccOlfii In pflO5rfl:n fl ccc lImb OfICCIOd by tS~t0 CO~IOCL tutu p:C;nzr0. 0:0:0 -- I-.] ~ 57 1 6 bc~ 4 0.1 63 5 0.1 ~--~ ~\ -- 1/ \J - 50 4 40 2 54 3 3? 0.7 ~ No °° :o;e 0.4 -- L ~ 0.1 - -- --. V -~ ~ - -~ limoS Not Loss ~L. SL~_ ~tiii~ 30.Comcrro nkc.o otnc C7pnflflmnCC I74~-L_27 51. 22 0.2 0.1. 37. Puutticinnt:cm cc conwrn:Iy ncticitics - l72~-f 22 57 21. 0.4 0.1 1 \/ 3AwnrCCfcfl:;tcnmdC11d~Cnmrfl0g ~ J /\ 20 c~ ~c o~ 01. dO.2oowIcdycm.iC CImUt ccnflnUflity rcccn:mcS 73~[~ 61) 12 0.2 ()~i. / \ iI~iii~iII~yh1pmr_yd /1. 1 mm buon;Icl;col!c mSron: trocking children ci this c~c 33 Si. 33 1 \/i ~2. I C\flO!C of tIC CuuCnr:,nt tIme c5114:cu ecpcnuc:cc~32 6! 33 5 i \ / 415 cdt ~ -~ u~4. I Cifi 500W!CCICCIIC oboct mod boor the obilIty to den! P ~ `~ ~ 2 L3 .2 10 1 ~5.Honnc:1 3-~ etfon )Onr loties scith thu p-nn?'00 5 ~ ) ~ ~ ~ ~I~L E~ DcI~pnw~rroflr~nc.c3.m. -~ .~- 1.-.__. - - - d7. Add ho:e coy coetnonts you would like ~o emIt. - Tho ~c1)orfl34 rote is Judged to co eIe~i.. 77d- Soooli3gvoriobiit;r c03t210Ut03 0. strtr for ~04tt-3!CS 01) OL]. 03305 ISartging fret 2 porcontIce 2oirrts for a vo~o of 50~ drr-r. to 0.7 mnrcer~13go roittts - for__fl~~~00 or PAGENO="0583" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1421 1035 (ri 1). ~ oluoloon. 1550: hnei~e~a to each ltemodd to bOO c.xcoct. ftc- rcomJi:-~. B 103 c.e.o-os the itero ~wcente0es eve -booed c-i all 535,120 co:o-iotrcn.; Po-c 2 ~ i~ c--~e~ ~c- ~t'c- ~roocnteo;vn are inset cc a Fec-op coonci sirr~ 7O~ of all eLi idree, do. floe (ollociiog çneoric.eo ore oboe! of! the peopic a;:!: oo!oem th~ child be the PacE Stool ochool uouo!Iy liven. I.eower li:om by ~c-riiE9 rn "X" in the correct boo or cntocirj o oonobe; In the npoor provided. LISTOF PEOPLE FIUIBEP.AND/0GESOF PEOPLE 1. Is l'orroo (other, ~t~~-Io;loer, , 0(050CC ~0ooc o-oe~ toil .00 clot -* ~ IJL°° .1Q~ :~ 1cs-..~--__> 0 1 1 PA la Flow old is Toe? ~ .. c-- -. 2 Less than 21 years old .3 55-64 years bc 21-54 years 1 65 or older . HA . 2. Is there o teether, strp-rooroer, or looter taeiloorlioto2 with t!:o Old 1O c0~-~------'- ~ 1~i . - .a0 .0. 00/0 0 5 000 -* ~ - .~. .:, - 2 Less than 21 years old 1 -55-64.yoaro 06 21 Sly IF THESE 15 NO FATHER OR JSOTLIR AT NO/IC: 3. `Rho is the clotH's 50~0dt0o (the S 14 - , B 1055; * B -~°- 1 /o- brother, uncle, 3o. flow old is hoe ~oordion? th ~ 1 2 1L ss of n 1 y a oN rclative->- 5/21-51 ycar«= 2 do sister, coot, ~ooed:aarher, c- 30 ~sS.&~i years other female .12 65 or older L. ~ -_> 1 ~. loizoted_.____-__e - A woman - net - S - ~ - ~PLI B lEO Under 6 years old? .30 29 22 13 .5 1 92 ~es B 1CC &~l5 yearz? 33 17 16. 13 10 ii 7 ISo B o 1CC 16-20 ycemo? 82 - 10: 5 2 -- - ---NA BiCO220ecc-i cv older? 97. ~ ~- - - 1 ~ tI ~D o t brother or s(otrr wOo is eating tdt cEil.I'a gord1e~.) 5. Are here cry other ofntivos (ouch ~ to il:a-chtld? (Do eat COunt: dId ~ £. ito hi'.0rr coy oIl-re yrcyle who live in too once boo.o Sot ore )07 gelntcd to tIe child (roe - t'-- `H' `- `, - ~~iOO~ Em. Boo: cony of thom arot IS B s B - iooF d a 6 yem.r lit 76 iSo B ~5j5 csc~ - 6 to- B.~ lC01loe2iy_s~ 7 B,s° ICO22-54 yearn? B'~ ICC 55-6-1 yoero? B 1CO'GS years or older? 0100, 8-s. P5ne omzr~ 90~910 live in - o~- `c-so-on ~ ~ ~ - en lirE er1'o~ro- to. ilso dEll? 91 No - - - - 6 ISA B"1CC~: S 97 Co " 57 57 * 2 2 9 1 3 1 2. 3. 1 ~ -_ ~ ~ S 1 1 1 1 - --- .- ~. - - 1' -~ - - - - . - S - 97 - Jft' ` I or hp ? I! Ill ç t t th 11 sh~eh::! is NOT leio~ sitE ;ero000, the foiioooin9 çoenPoeo ore cIt on? lobe c-roe/ben. 7. ?i~noe earS on "N" toe tSr box wlRth shosoS tIre !oi~h-rst 5rodo o( school the parcels or 7uordieo cdoopi:bed. - .S'o-: tCOO~ B 75t - 100 °` 1Cc' B EG/' .O~ ~ 3 2 Ito sebtel, ~ 9 to It yearn 1 1 tIn school 35~h3 9 to II years [~ 7~S1 1:T~78J ~21 ~ C5'$S P050 50 05-50455 PAGENO="0584" 1422 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 sJ;~2~~I 1966 lu vrvui occojstkn of tIc duds p at Cr or ~? (Fo: cxc~plr, c~'pcufcr~,lulorer3,Ctc.2 F-~.t}ier cr maTc~urrdrra orlrr or kr,rr!c Iu~dir.1 crucntaJ.Shcc~, ilDp~CmCflLaLSflZr~t 9~Arcyrrcrnplc~_ Than.,,. ~c&6 ~ ~ ~-~- 69 65 1~ow cn~1oyc'l : 25 25 Thi cu~p1oye~ 10 12 Xer n.n~1Ieyc1 60 70 6ioyIr~ h~o ~uzoopln~ ~nuao 051-) at. o . . . 6 5 14. . . .r Host mussy months dd th:y work siss~ po~tyocr?(J~t `L ~ J.~d~L__. ~ * **Ththrr . I 53 65 12~f~~ .; i~ 13 12~un.~ ~9 11 1.0 cr LI months .~ .3 3 10 or Ii. months 9 11 7-to 9 months 5 5 7 to 9 months 5 6 2 to 6 months Ii. U 2 to 6 month.a 1 month or less 2 2 1 month or less 4 4 Dld.asohmork 47 47 ~DI~notvor-z - 21 3 30. -. 19 18 ht ~ . - ... . - * .. I TI 111 ~ç t ti I I I ri g 11. f°!rcsse t-srjl on "X" in tire br which tells wlrerc lb bonus is ic.:c:ccf. -~~.1c~7L 13 ~ irs the country. but not hn a fawn ~ ira city or town, - 32 in the suhmb or on thu outokirts of a citj town - 12. hoot many rcoms in tIn boone or cp~rterent c-re ru~o!o:!y used fo~ sirrpir.l? *~_I.1~ ~ -s~r of roars - - 4 5 6 7 8h& 2 33.41 14 .5.- 2 .1 4. `1 13. is ti-ore r..oZog nuclei inside tire house? , 162 ~es -. 1 ~ The Tol!oo'iag e~un: ore clout the child wI; cow in the heed Sic:! achoe!cnd clout cnycthcechita'~en you listed in çuoutions 4 a: 5. *1 14. hIctibe b!id wire lo now in tith Flood Stdri i~hool burn Zn ~ dead St~rt, birdorçartcn, or ~urner~1is; Info::? a 3TE'- to a Head Start class ~ i~ -~ Tath 2 EJ Yes - in ki-rderZar000 or nursery cIass~ crly 12 - 3in11.hu.r 71 1 15. Hoee cry of tico ctlsn~ diciidrcn been Z a Heed Stdrt, hiodrr2nr?cn, or nursery class? ~ a FIend Start class o~l~ 1Z'~ Eath 2 ~J Yes - in kindwtn:tun or nursery class COly l0J ~ ~ o Ho 3ssiths: 63 `Xl- I Finn., cnn 50cc ~ nO PAGENO="0585" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1423 SiJWI!~1t 19~ S ~ Id I ci 51 1 b~ 1 ci ci Sc yiSI ,, I ci b the r~ot1ccr wUls hint or icr? ~9 Yes S Plot nxamined ~ iwo .~ 1.2Dou't knave .1_la ._1r. If ~or.tct jwos lotted wrrna, dir! Ice cicI!Jçet teeatcneot'Ior It? C6~Yes 24 Un ;..9:Don't know' c. ~`2core woe lreetrcct,t 3:'P~ (`Oinwca a~p'hin~ tren.tccucct) 57 1 ctccr's or dentists cfflcc ~ 7 HospItal ;2çjClInIc Jr 6 OtIccr(3~1rccifr)~ - `~ .60th The following çcieeeions ore olcaot lire toncilywltir cehora the child is hying. They ~a not apply to any people ~OJ l~ssed in 9creslion ~. 12'. DoesI'uo Inertly racelve coy plicvolfoto? ~,2O'jYes `19 PIn 19. In which of tho~ollewln~ t~reocoo greupe n;su~d the child's foreily be? ~ (C : f Hf lyec rch 1 l I 1' £ ~ ii t erA oft ) -11 ~Less than $1,000 a year. `-121$S,000to $5999 a year `$~L~ ~14 ~2I,OO0 to $1,999 a year *:~ ~ cn$7,999 a year 3,4C0 1.17 !52000 to $2999 a year ~ $9,000 to $9~999a year ~c16~S3,C2O Cc 93,999 a year .2 $IO,OQO or wore a year 1.15 94,000 to 9-1,999 a year 2.203. PT r XItb Thh tI tfnlhth I c. A cur or tceck. B = io~ l c~ iies' `20 Plo `1.2 003. - I. A recite 1Ct~ 00 fres ._ tin 2 -203. c. A televteiou set B.' 1CC55 99 Yes 6 Un 4 201. I.Ato1ephone,.~ B - 1C)C~', 53~Yes ~ :~. 15' ltd. 2).. Is thcre onyone in~e fencily who asvoi1y arts a hewspnper? ~ I67iYes 3iJHo .2 203. if "Yes" to queseicu 20 - I-low often? 69 Banry ray 2-3 Ab lcsst cacu S Less tOo_n once e -- -- ic0~.b ~u~e.-y e,uch, for your cuapeeotuu. Pi.cose use this space if you would like Co soy sonrethio~ chant tOte Uend Steel school p;0100cr that ocay old rho OIlier Of Eceneccie Opporl'ooity in providir.~ bettor pruarnes Itt tire future. For exorcrple: the need far trnenpaetution, different hours, Icrc~rr pro9roms, ate. PAGENO="0586" 1424 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 XtcnS 1 ijonol Oc~upnlion ?~c1c Fat.he~rz Fonale i~o~.hnro * : oni~ ~ ic*c~ p=9C~ hefcnolo!al, t~chnica] 2 in~rcd & fnr~ nn~erz 1~anzCero, orf~ciale 2 propr!nlor~ Clerical .2 kin~ireS Sales vor2ors Craftsven, forcer.nn & k!n~1r52 Cpsrativcs & hirc.lrcS ?iivate hounehold ~:keuo &or~lce ~o~~uors Fare Faberees &forercn lolorcrs1 except £croi & ritno Oupoiton not reported Fo ouch person in cateCory 2 3 4 1 2 2 3 1, 1 12 16 17 21 4 5 .2 3 20 24 14 20 21 .1. 1. 3 3 5 5. 1; 4 6 C 1, 1 2 : 2 59 59 1. 15 .2 PAGENO="0587" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1425 I.,. JC-CC04; A; cost ico 0~oE 51. 1907 Fe,,5 OFFICE OF ECOI1Cv9C OFI'OlTUivIT'( PROJECT HEAl) START S~( w.s.t 1000 ii0000, ~ !w,c ~ or~ D;~eith- -____________________________ Geeot No. C~eier No. Stuff morEs; Check ccc rcspoeee box for ccl qu ociion 001090 oI5erwi~e ndice!ed. 1. AGE - B1GC7~ - 6 Under 6 10 3 - 35 3 ;Ovc 69 24 6-21 18 ~ - ~ 6 20 22- 30 18 ~ - ~ 0. 7. RESIDENCE -- Dc' you too in oci~I;borhood nose center? 63 Yes 37 lAo 0.6 Et -- 8. Are yo;; u~ pord or s'e,uoteee worker et the center? E_etJ~.I~u . 84 PAid 14 V~l~nttt~ 1 NA -- 9. Vihut is your' er;neai (emily income? ~ 8 U 51 000 12 3 5 005- 5 999 7 SI 000- SI 999 1 13 60 0.. 999 9 2.002- 2.999 ~ 8.000- 9.999 - 9 3.005-. 3999 14. .10000 and oucr ` 12 4,000-. 4.909 8 011, ~ 2. a. RACE - (Chock nor) 3~LCGlu 53 o:c'jt~ 0.5 Orinotni 32 Aemo Cortinuod Colour Othcr * CDL IU4AL E C G'IUU\D - (CE k 1 4 Ic I 0 1 E It 3 tlcoion'o 2 Othor 1 Puarto ~ `017. ~O0O~ 12 IiI 82 F 1 6 A ---------- 4. E.cs.t'.. A,. I - a. Yenro coru7lr'ted Is. Hirhest level completed (ChcoEenr)3~j.~ (Check onr)3.EJ..G~9~ 0.2 Hove . 1 I-4yeurs 101cm. SlEler000lu(j `10 *5-8~~~ Jso'ocol 42 High school 10 ~-IOy }910h 2a0 6 I 12 I -2y 07 to 27 3-dyeurs ~CoIIe~e' 224A. 12 Sorerorepours 0.9 0. Nov.' much experiecce have you hod with pre-schoolers? B EDIT', - 39 lAnce `35 1-3 peers 20 OnorSpeoro 0.6 `240. . 11 HI ~ d'-r0r 5 U ~ 4-Op 29:1-3 years 22. Onac S )`o~r5 0.80:0. 12. Ana: an~uu~es (o0tor than Eo~lrsot do = . 700 5702< uI000tI7? (8) S~.cjeN (aiT)~~v~ 05 Eeoc 3 Other osl~ foreigu 4 3'rrtxcle only fore!6rn ~ Other (v.11) ~4)Freach (all) I 2 or 75-c.. xc f `o.k , 5. POSITION AT TN IS CENTER - 3 IOCT ~. Is. ~-p~f~s~o93i (Cook. o-oiotorunce) . Op t~~'_ 2 01cm, 0.4 , Php~i~Icn 0.5 Ptyohulogist I oa 20 Tcuoher 2 `S 0 h I Speuify -. 1 6. a. Nut-IF-ES CF CENTERS YOU SERVE -3°IcO° 95 Dee 0.1 27, 5 Mar-s tOte coo - L,~e en the 5500050 5id, A Is~ ye - ly mbL~ 13. Shut languages (other than Eogiisl) ore escO. wah the childrer'r in the 500'090? 24_a fL~ 00 T~rre Uo)suo,ou'a (oil) 0.4 J'r~~ch cut-- fnrelrrc I Oohvr colt fereiw ~ o~ ( i) (2'O ( ) 12 S;anisn crslT fordiEw 1. 2 or mere 14. Have you attended Any ca!uir~g coveeccod 50111! ch,id deoeloyr'xer:? 3 O-c,ra~ unions- 15 In-serci on ` 557 r~nsnwJ Vanre~., - ( ) fr) ~ c3i ~-i o~ ~OT I `Soc rusoavee rote is ~`c.dred On `he ab~oul 7'?'t. Rrxnoliro oo..rivb jIlt-: c.~rtOrl'hrcte~ n. (fur p-;s-cuvobn~rrs `hosed nrc nil co-nec) rooofL::f 7rcweiao0. 2 oe:coota-w0 `sal-sIn for a `isle-' of dccc to 00 :erc.;rLrcgc ~nioOs for soLve: 0 PAGENO="0588" 1426 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Chairman PERKINS. Mr. Burton. Mr. BURTON. May I have a few minutes, Mr. Chairman? Chairman PERKINS. If you want it. Mr. BURTON. I might suggest, for the orderly proceeding of the com- mittee, that if we have got a time limit, we ought to have all of us restricted to it. I don't mind the gentleman on the other side receiving an education in social and economic philosophy on their time. Is the Virgin Islands included in this Headstart program? Mr. SUGARMAN. Yes, it is. Mr. BURTON. Guam and American Samoa? Mr. SUGARMAN. Yes, sir. Mr. BURTON. Are they involved in Operation Followthrough? Mr. SUGARMAN. I pressume they will be when that program becomes operational. Mr. BURTON. What mix do you anticipate in these 30 pilot pro- grams for Operation Followthrough? Mr. SUGARMAN. Well, the selection of those 30 pilot programs was made with an eye toward getting a variety of kinds of communities involved in the program so that we would have the large cities, the small cities, strictly rural areas, communities with highly sophisti- cated educational systems and communities with less-sophisticated educational systems, so that I think that within the limits of the over- all number of 30, we are going to have a pretty good representation of education as it stands in America today. Mr. BURTON. What portion of the amount authorized by the Con- gress last year has been appropriated or requested for the coming fiscal year? This is }ieadstart now. Mr. SUGARMAN. For the coming fiscal year, the amount requested is the same as was appropriated last fiscal year. Mr. BURTON. What was that figure? Mr. SUGARMAN. $352 million. Mr. BURTON. What was the amount authorized? Mr. SUGARMAN. If my memory is correct, Congressman, the Con- gress did not specify a specific authorization sum for Head~tart in the legislation itself. Mr. Smavi~R. Excuse me. I am sorry, Jule; it did. The amount that we appropriated is the amount that was authorized. It is the same figure. We used the whole authorization; the Appropriations Commit- tee gave us the whole appropriation for that particular program. Mr. BURTON. I have no further questions, Mr. Chairman. Chairman PERKINS. Mr. Steiger? Mr. STEIGER. Thank you, Mr. Chairman. Dr. Sugarman, is it possible that at this point the guidelines for delegation between OEO and the Office of Education for the Follow- through have been developed? Mr. SUGARMAN. Yes, sir. There have been guidelines developed under the requirements of the Economic Opportunity Act. These re- quire action by the President and the delegation itself is now in the process of being presented .to the President for his approval. Mr. STErnER. That has not been finalized yet? Mr. SUGARMAN. That last step has not been completed. There is complete agreement among the agencies involved. PAGENO="0589" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1427 Mr. STEIGER. Can you supply to the committee anything at this point as to what has been arranged between OEO and the Office of Education on Followthrough or is that premature? Mr. SUGARMAN. I think, Congressman, the general nature of what has been agreed to has been described in our testimony this morning, both by Dr. Estes and myself. Mr. STEIGER. Would you think it would be appropriate in the pend- ing legislation to more clearly delineate the Followthrough project rather than the rather broad, vague language under which you now have assumed the authority for Followthrough? Mr. SUGARMAN. Well, Mr. Steiger, as I indicated earlier, my feeling is that it is beneficial to the program and beneficial to the Congress to have the opportunity to develop this kind of activity without undue legislative specificity. This was the experience in Headstart. It was the experience in Upward Bound, legal services and a number of other programs. I think that on the basis of the experience which one gains this way, the Con- gress is then in a position to legislate. more specific descriptors and to arrive at a better product. That would just be my feeling about it. We can tell you better a year from now what you ought to say in legislation about Followthrough than we can tell you at this moment, not that we can't tell you some things now. Mr. SHRIVER. Could I inject a thought, recalling when Congressman Goodell about a year and a half ago was commenting on the fact that Headstart got started. Since he is he.re now, he can verify whether this is correct. I think he said something to the effect that he thought it was ex- ceilent that OEO had started lleadstart, that he had tried for a num- ber of years to get something like Headstart started, but I think he went on to say that he felt that if we had waited for Congress to approve in advance, that we might never have started Headstart. I do believe that there is a great deal of merit in what I think Congressman Goodell said a year and a half ago, that when a program is trying or an agency is trying to break new ground, that it is very helpful if the agency ask the Congress for sufficient flexibility so that programs like Followthrough or the neighborhood health centers or legal services can get going and on the basis of pragmatic experience, practical experience, operating experience, develop in a way that may make them most effective on a practical basis rather than on a theo- retical one with a lot of discussion befOre they actually get underway.. I don't mean to be misquoting Congressman Goodell, but I do be- lieve that that was the general tenor of what he said about a year and a half ago. Mr. G00DELL. Will the gentleman yield? Mr. STEIGi~n. Yes, I yield. Mr. GOODELL. Just for clarification, most of what you said I did say with one major point of difference, that this would not have been started if Congress had had to authorize it. I certainly didn't mean to imply when the poverty program was first before~ our committee, Mr. Quie and I both raised-Mr. Quie particularly-the question as to whether Headstart would be eligible. PAGENO="0590" 1428 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 lit wasn't cafled lleadstart, but preschool and early school programs would be eligible for funds under Community Action. We attempted to write in the specific provision that it would be-that there would be funds there. WTe even wanted to write in a specific amount, because we wanted to have a priority given to preschool and early school training. We were unable to get that amount added to the poverty law then, but we did get the assurance of the then-chairman, Mr. Powell, on the record that a substantial portion of the Community Action money would be used this way, the way it was intended for. Fortunately it was such a good basic idea, an approach, that it took off. I think you will agree we were overwhelmed with the applications for money after we got an understanding of the program. But I certainly think that our committee and Congress looked at it. If our committee and Congress had looked at it a little more closely, we would have been able to have had a special appropriation for such a program then and perhaps avoided everything, a program with a single agency for all programs. Mr. SHRIVER. I think the same thing could be said for these pro- grams like TJpwand Bound and the rest of them, that the only reason they are not larger in terms of dollars is simply because the money isn't available. If we hadn't had the flexibility to. go with money behind Headstart, Headstart would still be a.s little as Upward Bound. The neighborhood health centers would be bigger. It isn't because of lack of success or lack of belief or adequate experienc.e. It is just lack of money that has prevented them from being bigger. I hope I am not taking up any of Congressman Steiger's time. Excuse me. Mr. STEIGER. I appreciate your concern. Dr. Sugarman, I appre- ciate your comments about the interagency agreement between OEO and OE, which is now pending before the Presideilt. I would, however, also be interested in what particular guidelines or criteria OEO is drafting for its Followthrough program. What are we trying to do?. What are the objectives of Follow- through? What is the relationship between two local educational agen- cies, the Community Action Agency, the State education agency and what are t.he roles of the public and private schools? You have made comment on all of these things. I recognize that you have done that in your testimony, but I wonder whether you have taken this further in attempting to give-or can you give to the Con- gress some idea of just what you think we are trying to do or what should be done with Followthrough? And before you answer that, us far as I am concerne.d, quite obviously the biggest difficulty with Headstart is the fact that we have lost, whether it is five or 10 points or whatever, some of the effectiveness of that program, so that the Followthrou~h conceivably because of Headstart can be the sta.rt of a very real revolution in education in this country. Now.~if it is, in fact, aimed at attempting to revolutionize what we do in behalf of disadvantaged children, that touches every local educa- cational agency in this Nation. It is my concern that if we are going to undertake a~revolutiofl, that.we ought to know where we are going. We ought to know what kind of a revolution we are undertaking and we ought to Imow why and what impact it has. This is the reason PAGENO="0591" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1429 that I ask what kind of information you can supply to us as to what you think as to where we are going with Followthrough. Mr. SUGARMAN. I would be happy to, Congressman Steiger. We did develop in connection with the pilot programs a list of what we called essential criteria for approval of local programs. Let me make it clear that that applied only to the development of the pilot programs and we see those as tests of whether these, in fact, are sound principles. There are 13 of these and in the interest of time it might be helpful for me to submit them for the record. Chairman PERKINS. Without objection they will be submitted for the record. (Information follows:) ESSENTIAL CRITERIA FOR APPROVAL OF LOCAL PROGRAMS Pilot projects for Follow-Through are required to meet the following criteria: 1. a program reflecting significant designs for effective approaches to cognitive, affective, and total personality development; 2. provision for comprehensive mental and physical health and nutritional services including diagnostic, preventive, curative, and rehabilitative aspects; 3. provision for comprehensive psychological, social and other pupil per- sonnel services available not only for referral but also completely integrated with classroom activities; 4. maximum use of school, neighborhood and other resources (including welfare, recreational, social and cultural facilities) tO meet the individual needs of children over a varied schedule-this could mean an extended school day and an extended school year program; 5. a program that guarantees the individualization of instruction through the use of effective practices and/or auxiliary personnel. This might include the use of small teacher-pupil ratios, aides, older children, and adult models. 6. responsibility for promoting meaningful parent participation in the total development of their children, for encouraging a rapproachement between parents and their schools for providing social and educational resources to strengthen family life and maximize opportunities for parents as well as children; 7. pre-service and continuing seaff development as an integral part of the regular work assignment for all staff members involved in the program ; 8. coordination and effective integration of all ancillary and instructional activities by a designated administrator in the school; 9. rather than isolated Follow-Through classes, projects should be inte- grated into the entire school program so that children served by Follow- Through will be located in groups that reflect the fullest possible social, racial and economic integration; 10. continuity with Head Start including transmission of records and con- tinuing opportunities for Head Start arid Follow-Through staff to exchange effective techniques and approaches and information and experience concern- ing individual children; 11. provision for program evaluation as an integral part of the total project to provide internal feed-back for program improvement; 12. provision of an uninterrupted experience designed to build upon the successes of Head Start and other similar programs for those children who participated in this type of educational activity during the previous year. `13. Provision for the development of an advisory council composed of representatives of community action agencies, persons from the neighbor- hood, and other appropriate community leaders to assist in the planning, implementation and opOration of the program. ` Mr. STEIGER. Mr. Chairman, could that also be made available to members of the committee? Mr. SUGARIVIAN. Surely. These are criterla which were furnished to the loc'il and Stite educational agencies Mr. STEIGER. I appreciate that. `` PAGENO="0592" 1430 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Let me also get into another area that you touched on. You made mention of the deficiencies of testing as it relates to especially dis- advantaged children. Judge Wright in his decision on the District of Columbia schools also touched on the fact that tests today for most schoolchildren are aimed at the middle class, that it is very difficult for disadvantaged children to be able to effectively answer that kind of a test if their backgrounds are not in the areas that are covered by these tests. You also indicated that you are now developing tests in this area. I wonder two things: No.1, what tests have been used in Headstart, what specific tests are you using and, secondly, where are you going in the development of new tests, which I assume then you are going to be using two kinds of tests, one for the standard normal child and we are going to be using another service of tests for the disadvantaged child? Mr. STJGARMAN. To answer your question, Congressman Steiger, the most used tests at the moment in Headstart are the Binet-Stan- ford-Binet and the Peabody picture vocabulary tests, both of which have been in existence for a number of years and both of which have to some degree been standardized on disadvantaged children, although not perfectly by any means. The two tests that we have developed and used most generally in addition to those are the Zigler behavior inventory and the Caidwell preschool inventory-Dr. Caldwell at Syracuse University and Dr. Zigler at Yale University. Both of these were developed specifically to meet the needs of children from disadvantaged homes who may not have had the same kind of experience that children in advantaged homes have had. We are now trying to see whether, in fact, these do more accurately assess the child's state of development than do the original tests. In addition to that, we are supporting development of a number of tests of language development, a number of tests of behavior, self-image, and other facets of total child development. Mr. S1~IGER. Mr. Shriver, let me just ask you, if I can, a couple of questions relating to program budgeting. It is my understanding that the Office of Economic Opportunity has been active in the development of following the Presidential guide- lines laid down, first, in October of 1965 and then again, as I recall, in 1966. Have you or can you make available to the committee the results of your program, PBSB studies on the OEO? Mr. SmUVER. First of all, you are correct in that OEO has been par- ticipating in that program. In fact, I think ours was the first agency in the domestic area of the U.S. Government to make a PPBS study, even before the President's memorandum to which you refer. These documents, however, are submitted by us to the Bureau of the Budget. They are executive department documents and we do not have the authority unilaterally to release those documents to anybody. They are, you might say, the property of the Bureau once the Bureau has them. Dr. Levine is in charge of that part o± our work and I would like him to add any comments or make any corrections to what I said that he might wish to make. PAGENO="0593" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1431 Mr. LEVINE. I guess the only addition is that, as you probably know, Senator Clark has asked us to talk to the Bureau about it. Anything the Bureau releases~ that we give to Senator Clark, I am sure, we will give to this committee. I also have a speech that I gave to the Senate committee, but I don't think you want to hear it. Can I provide it for the record ~ Mr. STEIGER. I might be interested in reading it. I would ask you to provide it at least for the members of the committee. May I join with Senator Clark in asking that you do try and get the Bureau of the Budget to release this kind of information. I am frankly dismayed that that kind of material on PPBS is not available to the Congress, because I don't quite follow how it is possible for us to make the kinds of judgments necessary about programs that are being drawn if we cannot have that kind of data available to us, so that we can make some legitimate judgments based on the kind of experience that PPBS can give to us. (Mr. Levine's speech follows:) SYSTEMS ANALYSIS IN THE WAR ON POVERTY Last sumnier the Office of Research, Plans, Programs and Evaluation of the Office of Economic Opportunity put together an anti-poverty plan and a four-year program based on that plan, for OEO and for the total War on Poverty of which OEO-funded programs are a part. OEO was probably the first civilian agency to do this. It was done hurriedly with the due date of Labor Day and with a planning staff that did not come on board until the first of July. I want to share some experiences of this planning process. Although planning of this type was first done by the U.S. Government in 1961. in the Department of Defense, our problems as a civilian agency are quite different from those of Defense. 1. Welfare is easier to define than national security. That is, we know what we mean and can measure what we mean in terms of improvement of people as. defined by income and other variables. Deterrence is much more difficult to measure. 2. We had a lot of data to begin with-more than defense. Good economic data have been gathered and tabulated in this country for 30 years or more, and for the 20 years since the Employment Act of 1946 created the Presi- dent's Council of Economic Advisers, the data have been quite good. T5nfor- tunately, as most users will testify, these data are almost always out of phase with operational needs. There are problems such as the need for series on time and geographical bases different from the bases on w-hich the data are gathered. 3. Unlike the Defense Department, we play a game against nature which makes our task considerably easier. We do not have to contend with a malev- olent enemy. These first three make our job easier than Defense; the next makes it more difficult, however. 4. Unlike many of the Defense programs, our results are testable. They have net really been tested yet, although, when the 1965 Current Population Survey reported a drop of one million in the number of poor people from 1963 to 1964, a copy of the release was sent to OEO by a White House staffer who had written across it "nice going Sarge." Unfortunately, the change had taken place before OEO had really gotten into the business. In any case, the results of our activities are testable and are being tested and that means that our concepts will come into direct contact with what one of my colleagues calls the "real world out there." Thus far, deterrence theory has made no such contact. 5. Perhaps our greatest difficulty compared to the Department of Defense is that we started with no long history of accumulated systematic analysis in the field of poverty and social welfare. There had been, of course, much writing by economists and sociologists on related topics, but remarkably little 80-084--67-pt. 2-38 PAGENO="0594" 1432 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 of it systematically related costs and benefits of suggested policies or made systematic comparison of alternatives. The Department of Defense in 1961 had a huge backlog of accumulated analyses and policy recommendations from organizations like RAND, and much of what was done in 1961 and 1962 resulted directly from the intellectual investments started in 1951 and 1952. I think we in OEO did a good quick planning job in this first year but it was narrow and shallow because of the time constraints. It was narrow in. that we did not consider as many alternatives as we should have; it was shallow because analysis did not go as deep as it should have. But, at least we know where the bodies are buried-we know what shortcuts we took and what simpilfications we made. What I would like to do today is to describe what we did and to draw some con- clusions, but first, I want to expose a prejudice. We have done a set of system analyses of which we are pretty proud and I think that systems analysis properly clone is bound to improve government planning and operations. Nonetheless, I am a bit skeptical of some of the uses made of systems analysis. For one thing the numbers used in systems analysis are always imperfect and to make decisions on the basis of small quantitative differences derived from very fuzzy inputs is wrong and is dangerous. If differences are small, then an entirely different basis for decision should be arrived at. Indeed, if quantitative results do :not accord with one's intuition, one had better check his numbers very carefully, because by and large intuition is the better guide. A similar danger is that too much concentration on quantity, as is sometimes the case with systems analysis and systems analysts, can lead to asking the wrong questions. It is all too easy to substitute the concrete for the important, and it is frequently done. I know some pretty horrrible examples of misuse of analysis from my time at Rand and in the Defense establishments, but these are classified Secret, so I will give two other examples of systems analysis badly used. The first comes from the cost-benefit analysis of water resource projects. (Incidentally, cost-benefit analysis and systems analysis are not identical. Cost- benefits analysis can be an important part of systems analysis but it is not the whole. The imposition of non-quantitative systems on decision making-the construction of qualitative alternatives, for example, can be just as important.) In any case, some work on water resource projects goes into an immense amount of intricate detail to try to establish the interest rate which should be used to discount future benefits from the water in order to match them against cur- rent costs of the project. Should it be the interest rate the government must pay for its borrowed funds, (should it be the opportunity cost of using the same funds for private capital projects, or what should it be? To me, this whole debate is meaningless when estimates of proper interest rates are very imprecise and the final choice of an interest is arbitrary. If a Go-no-Go decision were made on the basis of such an arbitrary choice of interest rate it would be the wrong decision half the time. Fortunately, the study I have in mind came out with the answer that at any interest rate the particular project under consideration was uneconomical. The costs, no matter how defined. w-ere substantially greater than the benefits. The water system proposed would have provided a major subsidy to agricultural pro- grams which would otherwise have been ulleconomic. Now, this is the best use of highly legitimate cost-benefit analysis: the analytically discovery of large quantitative difference on the basis of simple generally acceptable ceteris paribus assumptions. The project was clearly unjustified. And to end the story, the uneconomical project was adopted with great popu- lar and political fanfare which shows another sort of limit on the application of cost-benefit analysis. The second example of the dangers of systems analysis comes from some of our own work in the War on Poverty. Again it is a question of the use of cost- benefit analysis. It illustrates the possible use of quantity to narrow the focus down to the w-rong questions. We of course avoided the error, but we could have made it. In our OEO programs we do much training. For the evaluation, of training programs, a frequently used method is that of matching the cost of the program against estimated increases in lifetime earnings derived from the training. If lifetime earnings, discounted properly, are greater than the cost then the train- PAGENO="0595" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1 9 6 7 1433 ing is justified. But for the purposes of War on Poverty training, in order to bring 1)011ev logic to this sort of comput'ition it must be assumed that if a training project is uneconomical-that is, if discounted earnings are less than cost-a preferable alternative would be to provide transfer payments for the less expen- sive direct support of those who would otherwise have been trained more expen- sively. But our objective, as stated by our legislation, is not just removal of people from poverty by simple devices such as transfer payments. We operate under the Economic Opportunity Act and our primary mandate is to provide the oppor- tunity for people to get themselves and their families out of poverty. In this case, therefore, the rationale of transfer payments as an equal-value alternative to training, is incorrect. Even if discounted earnings were less than cost we might want to do the training anyhow because of the social value placed on end- ing poverty through personal opportunity. All this, I think, demonstrates some skepticism about classical (10-15 years old) systems analysis as a solution to all problems. Nonetheless, a standard caveat of systems analysis is that one should not look for perfect optimum but rather for any available improvement. Let me look now-under this caveat about systems analysis being imperfect and sometimes dangerous-to all we did to try to improve policy-making through the use of such an analysis. My last point about the training programs provide a start. To my mind the most im- portaiit contribution of systems analysis is to demand a definition of objectives, and to make that definition operational. I have already pointed out that in the hierarchy of our objectives, opportunity comes above the direct cure of income- defined poverty as such. But that initial definition of objectives does not end our problems; it begins them. How do we define the objectives of providing opportunity and reducing poverty? WTe decided that our major measure would be the nurn~er of people moved past a family-income benchmark we call the poverty line. To move people past an arbi- trary line is not our objective but it is. a measure which can be applied `to our ieal objectives. It is a necessary compromise in the name of systematic decision making. So we try to move people by a line. What line? We decided to use an annual income measure. This is not completely satisfactory-it ignores assets for example, and thus it includes as poor some people that may ~e really rich. Similarly, by selecting annual income, it ignores those who may have an income in one year that may be atypically low and who may not really be poor at all. We have been struggling with refinements of the definition, but in the meantime, in order to get something done we have made, compromises in the name of system and have used annual income. Having decided on income as a measure, we made one immediate advance; we changed from the simple poverty line adopted some years ago by the Council of Economic Advisers of $3,000 for a family and $1,500 for an individual to a more detailed, more variable line. Our current line, adapted from the work .of Mollie Orshansky of the Social Security Administration, varies according to family size and according to farm versus non-farm residence. For `a non-farm unrelated individual, the poverty line is $1,540, for a four-person fam- ily, it is $3,130, and it varies between `these nun~bers and above them up to much larger families (which are too typical among the p.oor). Farm families are set at 70% of the non-farm level. Still more advance is necessary. We are `working `on regional variations, and in addition there is a question as to whether the poverty line should change over time as it has done in the past. But again in order to get going with our planning, we made the necessary compromise in the name of system. Another definitional question still bothers us, and this one is also connected with our objectives. An individual and family line is certainly proper for the measurement of those dimension of the poverty problem which can properly be called individual and family problems. But is such a line relevant to the com- munity problems which Community Action programs (half the OEO total budget in fiscal 1966) are designed to attack? Even in the. worst urban slums more than half the residents are above the individual-family poverty lines. `Should we not extend our programs to them because of this fact? I doubt it; I feel we may need a different sort of standard to operate on and measure the progress against the problem of the community Foi the moment however we are still using a single standard, another compromise among detail, system, and the need to get on with the job PAGENO="0596" 1434 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Getting on with the job, the necessary step was to divide this defined poor population into subgroups. Here, one's first intuition about the groups to use is wrong. It's very tempting to use age groups-that is apparently the first impulse of anyone starting into the question. But age groups are not completely workable in terms of the above kinds of problems, and the kinds of programs with which we are trying to attack these problems. Youth-say ages 16-21-is a usable age group, because youth have separately definable problems and we have separately definable programs for these youth. The aged provide another quite distinct and separable group whose needs-primarily for money alone- are distinct from those of the rest of the poor population. Children provide a less tractable group. In part there are separable children's programs, in the education field and elsewhere, but difficulties arise because programs to approach children as children are not the only ones. Operationally, a major way to reach a poor child is through his family. And most families understandably have people in a variety of age groups. So families provide another category we must Iook at and one which is not neatly parallel to the others. And families ought to be further divided between those whose heads are in or should be in the labor force and those who are out or should be out; the problems and programs are quite different for the two categories. So we end up with a complex and overlapping set of categories-youth, aged, children, labor-force families, non- labor-force families. One really cannot divide the problems of poverty without looking at the programs designed to attack these problems, and we end up with a cross-classified matrix with objective groups on one axis and programs on the other. Turning to our treatment of programs, what our summer analysis first did was to look at the whole range of existing government programs which might, with- out too much stretch of the imagination be called poverty programs. We estimated that the Federal Government was spending about $20 billion in this, with state and local governments spending about $10 billion more. The scope of OEO in the overall War on Poverty is indicated in part by the fact that this fiscal year we are disposing of only a billion and a half dollars. In any case `what we should have done last summer was to attempt to re-allocate the entire $20 billion of Federal expenditures for greatest effectiveness against poverty. The charge of our legislation is that the Director of OEO should coordinate all anti-poverty programs. Last summer, however, we did not attempt this overall re-allocation because we did not have time. Rather we tried to allocate our own OEO pro- grams and suggested major a(tdiUOar to other anti-poverty programs, but made no recommendations for internal re-allocation. Ourrently, in our second planning cycle we are attempting the larger job. To get a handle on programs then, we divided these programs into three func- tional groups according to the particular portion of the poverty problem that they were designed to attack. This division, a `qualitative one, is the guts of our systems analysis. The three functional groups were jobs, social programs and transfer payment programs. These are three reinforcing categories-three legs on a stool-rather than being alternatives. The importance of jobs is demonstrated definitionally. If opportunity is our primary objective then,' in the American economy and American society as they exist, jobs are the name of the game. Opportunity means opportunity for self- support which in turn means the opportunity to work in a useful and gainful job at non-poverty wages. If there are not enough jobs (and there were not at the time this analysis was made, last summer, although this has drastically changed since) we need programs to correct this deficiency. Job programs are important both because they provide immediate concrete and symbolic results from the War on Poverty, but they are also vital to the long-run effectiveness of our remedies. Second in order, although not particularly second in importance, come social programs. These are programs for basic individual and environmental change. We must realize that many of the poor do not have decent jobs because they are not capable of taking and holding decent jobs. Their individual education and' training may be too low; their health may be too bad; family situations such as a large family headed by a female may make work difficult; families may be too large even for acceptable work to bring them above the poverty line; people cannot get jobs because of racial discrhnination. Therefore in order to make job programs successful we must change the personal, family and environmental factors which make people and families unable to take jobs. These PAGENO="0597" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1 9 6 7 1435 social programs thus reinforce the job programs but the job programs also rein- force the social programs. The worst thing that could happen would be for us to educate and to train people, to change their environments to raise their hopes and then not to fulfill their hopes because there are not enough jobs in the economy. The third leg is transfer payments-pure money payments for no services rendered. Transfer payment programs are not primarily opportunity. They are recognition that some people cannot use work or training opportunities. The aged can make little fruitful use of such opportunities and the same can be said for many female family heads Transfer payments also provide interim money for those who are waiting for opportunity programs to pick them up. But in one major way transfer payment programs `also do provide opportunity. Money means ability to choose. A man with a family to support may, if given money, have the choice of taking training for. a, decent job instead of having to grab the first available job of' `any type in order to feed his family. This is the structure of our analytical system and note that I have described it without mentioning cost-effectiveness or cost-benefit once. `Nonetheless it is systems analysis made systematic by organizing problems `and programs into a structure where it becomes possible to examine alternatives and magnitudes in relationship to one another. Of course that is not all of it. Let me give some further examples of the kinds of `analysis we did internally within this structure. 1. I have already mentioned the crucial nature of the definition of objectives with Opportunity in the top position, and the quantitative measurement of these objectives, even though this measurement must, be over-simplified. 2. We used quantitative analysis to confirm intuitions. Our intuitions told us, for example, that family planning would be a highly cost-effective program. We looked at family planning and discovered that this was indeed the case. Program costs were estimated to be low and effectiveness was estimated to be high. Our estimate is that, had family planning, programs for the poor been started a generation ago, there would be about 41/2 million fewer poor people in the country today. This is highly cost-effective, aithoug hnot quite as good as sug- gested by the summer interne who burst in and told us that a particular family planning program had proved effective after only six mon'ths of operation. In any case the family planning case also provides a good example of the political con- straints on the uses of analysis. We are pushing ahead with family planning programs, but cautiously. 3. We also used quantity to make at least one discovery we did not expect, although please note that it is a large rather than a small quantitative difference. In the Job category of programs, we started out with the aggregate demand hypothesis that tight overall employment would take care of almost all the job problems of the poor. We made estimates however, of the size and projected changes of unemployment in various categories of the poor and discovered that it just ain't so. Our estimates have since been confirmed by the fact that even at the lowest unemployment rate in 13 years, the poor still do not have enough jobs. On the basis of these estimates we recommended substantial job creation pro- grams, although with unen1ploylfleflt at current levels (much lower than the time we made our proposals) job creation is no longer our major emphasis. 4. We made numerical evaluations of alternative programs. Looking again at the job category, we looked in last summer's context of over four percent un- employment, at job training, aggregate demand programs and housing con- struction programs and estimated that none of these would provide enough job's for the poor. We therefore became qui'te interested in community employment programs to take poor people into useful public service jobs such as teachers' aides, health aides, other subprofessional categories and maintenance jobs a's well. This seemed the most cost-effective m'Gde of creating jobs and at the same time it would help fill the vast need in this country for an increase, in public services. 5. Our definition of objectives implies that what we are out to ~do is cure rather than ameliorate poverty and thus in looking for effectiveness, we looked for the causal relationships between various problems and poverty and we looked for fundamental rather than ameliorative programs. Because we bad ques- tions about whether things such as poor housmg and bad health care caused poverty rather than being spectacular symptoms of poverty, we gave programs in these areas relatively low priority relative to jobs and education-whose causal connection to poverty is clear. PAGENO="0598" 1436 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 6. We looked for the universes within which our programs could be most effective. The Job Corps technique of intensive training in a residential program is hoped to be succesSful for a wide variety of youths. Relative to cheaper al- ternatives, however, we believe its differential effectiveness is likely to be high- est for hard core, hard-to-reach youth who simply cannot be reached any other way. And we recommend Job Corps concentration on these. For easier youths, cheaper programs are are likely to be more cost-effective. Similarly Community Action can be a useful technique almost anywhere. But it is more likely to be more useful where the poor live among the poor urban slums and rural de- pressed areas. In these environments where facilities, surroundings, and neigh- bors are all likely to be poor, the expenditure of Community Action dollars is likely to be most effective, because there is far more to be done-we are not working at a sparse margin. Because these dollars are limited, we recommend they be confined primarily to such areas of "concentrated" poverty even though they would not be ineffective elsewhere. 7. My last example describes a technique for getting the total budget down to a prescribed level. We used it not necessarily because it was the best tecimique hut because in the short time available to us it seemed the only technique. In retrospect, it may. be the best anyhow. Rather than trying to add up programs to reach a certain specified budget level, we started out with what we called an unconstrained budget-unconstrained by fund availability. That is, we estimated how large our programs could be. sublected only to constraints other than dollars, constraints such as the number of doctors available for medical programs. This added up to a sum higher than there was any likelihood of our obtaining. We then cut programs back by priority, cutting out the least cost effective first. We started with programs universes which included all the 34 million poor. then in order to get our budgets down we cut back for example to the hard-core universe of greatest need I have described for Job Corps and the universe of concentrated poverty which is in greatest need of Community Action. for example. We have not considered the general applicability of this sort of method compared to other modes of budget analysis for other programs but it did work well for us. Let me conclude with two points. First, what I have been talking about is planning analysis and should be carefully distinguished from operations. For example, in talking about concentrated poverty, we defined this poverty to be that which existed in the lowest 25 percent of urban census tracts and the lowest 40 percent of rural counties. This was based on the greatest-need rationale described above, but what we were aiming at was a definition which would enable us statistically to measure the slums and rural denressed areas. For onerational purposes, it is necessary to look directly for areas describable as slum or depressed areas, rather than arbitrarily decide on the particular tracts and counties we used for statistical purposes. Census tracts and counties are arhitarary definitions, and the only data currently available for these definitions are from the 1960 Census and are now six years old. The rationale of concentrated poverty by which we arrived at these definitions was not arbitrary, but it is the rationale rather than the superannuated statistics which must be used to apply programs to these areas. For statistical and budgeting purposes, the Law of Large Numbers implies that we are likely to be okay but the Law of Large Numbers cannot be applied to detailed local operations. More generally, plan- ning does not control operations and one problem we have not yet solved is how to control operations to meet the plan. Finally let me mention evaluation. The plan I have described is hosed on theory. For better or for worse. OEO very rapidly built ~in spending commitments for aver one billion dollars which preceded the conclusion of the planning proc- esses described. The planning. however, preceded the first results of the programs so that we planned and allocated on the basis of how these programs ongli t to have worked. This year it is different. We are beginning to get evaluative results on how our programs are working. What w-e can do now and are beginning to do is much closer to true cost effectiveness `malvsis-matehing ~etuil efrec tiveness against actual costs. My skepticism about the over-use of such analysis still applies Decisions should still be made only on the basis of b g qhantltatlve differences and the right questions should he asked whether or not the answer is quantifiable. Now, however, the quantities we are working with are real numbers and not hypotheses. which is a very substantial change. As I have said at the outset. our results are testable. ThCy are being tested. and next year, I may speak with less confidence. PAGENO="0599" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1 437 Mr. LEVINE. This becomes a constitutional issue and I am not a cOnstitutional lawyer, Mr. Steiger, so that I will drop out. Chairman PERKINS. The gentleman has consumed 15 minutes. We will operate under the 5-minute rule of going around the second time until the bell rings. Sargent Shriver, the so-called Opportunity Crusade proposes to turn the Job Corps over to the vocational and educational systems. Is the Job Corps more than an ordinary Vocational system or are the vocational educators geared to operate the Job Corps? What obstacles do you see in the way, that i~, from the standpoint of reaching im- i~overished youngsters if the Job Corps were transferred? Mr. SHRIVER. First of all, Mr. Chairman, I would like to observe that I think that the Department of Health, Education, and Welfare, the Division of Vocational Education, certainly should testify about that question as well as OEO. Certainly as well as I. Chairman PERKINS. They have testified about this, against it. Go ahead. Mr. SHRIVER. I didn't know. Chairman PERKINS. Unequivocally. Mr. SHRIVER. My experience with vocational education, at least in Chicago in the public schools, was that it was reaching a higher cut, a higher slice of people than what we are attempting to reach and are reaching with the Job Corps. In fact, we had eight vocational high schools in Chicago when I was there and in the first 2 years of high school the program for all the students in the vocational school was exactly the same as in the general high schools, except for foreign language requirements. It was only after sophomore year that boys and/or girls in the vo- cational~ schools of the city were introduced into the vocational track, which they used to call them. I am not against that at all. As a mat- ter of fact, that kind of vocational education expanded tremendously- I would say fourfold-while I. was on the board. I always looked at it as more technical education than: what the Job Corps is trying to do. The Job Corps deals with the kind of kid who up to recently hasn't been able to get into a vocational school. We used to have ele- mentary vocational education in Chicago called prevocational and that existed in other schools, but basically the Job Corps kind of kid could not get into it. The Job Corps was started because of the failmes of us all not iust the vocational education, to reach these youngsters and the Job Corps has developed in what I think is a unique program, a unique program in that it makes a new effort and a different effort to reach these young- sters, and the great things about it is, I believe, that it appears to be doing so well. Prior to Job Corps most efforts to reach these kids were abysmaL 90- to 100-percent-failure programs. In fact, when we first testified on behalf of the Job Corps, there was evidence'broiight here in the State of New Jersey and State of California, to mention just two, which showed that their efforts had been a total failure. In other words, they h~d nearly 100 percent dropouts in programs ~tttempting to reach these same kids. PAGENO="0600" 1438 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 I think of the Job Corps as having broken new ground in the area of training people for work, especially this type of kid. It couldn't have been done, in my judgment, unless we had enlisted in it the national sororities, the universities, the industrial commercial companies of the United States. They have broken some new ground. It is not like the traditional vocational education. David Lottlieb' who is in the education field, is here in the room somewhere and with your permission I would like him to make additions or corrections to what I have already said. Chairman PERKINS. First, let me state that I agree wholeheartedly with that statement and I notice that the Opportunity Crusade pro- vides $190 million. What figure do you estimate for operating the Job Corps as being necessary for the next fiscal year? Mr. SHRIVER. $295 million. With your permission, I would like to make two commeilts about that. Chairman PERKINS. Go ahead. Mr. SmIlvEn. In the first year we spent over $300 million getting the Job Corps started, which went largely to capital expenditures. It went to $211 million the second year. In the first year we got the plant into being. In the second year we didn't have it completed so that you couldn't take a large number of kids through it, but it was in the process of being prepared. In this congressional year the figures goes to $295 million because the plant exists, the spaces are there, and with the financing on an annual basis with the people who will now begin to profit from the program, you hai~e to go up to $295 million. Right today, for example, Job Corps is within 500 of its estimated June 30 strength of 41,000. In other words, it is 40,500. We now have got the capacity to operate on an annua~I basis with 41,000 openings and~ to process through those openings somewhere between 80,000 and 100,000 youiigsters. If you cut back on money now for Job Corps' what you are doing is actually cutting people out, stopping the entry of youngsters ~who want to get in. You are nt cutting down on capital expenditures. In other words. you are cutting individual human beings out of that chance. Chairman PERKINS. Mr. Quie? Mr. Q.m~. Let's get back to Headstart. We will go tb work on Job Corps later on. I would like to finish out the subject before us. Let's get a picture now of the children in the Headstart. How many or what percentage of the summer programs and how many or what percentage of the full-year-round programs of Head- start are funded through Community Action agencies and how rnaiiy are separately or independently funded? Mr. SUGARMAN. In terms of the organization to which the grant is made. I would estimate that about 90 percent of the summer programs and about 90 percent of the full-year programs are funded through community action agencies. Mr. Qun~. About 90 percent? Mr. SUGARMAN. Yes. In terms of who operates the programs, you understand there is a difference? Mr. QUIB. Yes. That 10 percent, then, that are funded through other agencies and community action agencies, how would they break PAGENO="0601" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1439 down as to type of organization ~ Would it be public schools or private schools or nonprofit organizations? Mr. SUGARMAN. I think the majority of them and probably the over- whehmng majority would be private nonprofit organizations rather than school systems. Mr. QUIE. And of the 90 percent that are funded through commu- nity. action agencies, what percentage are public schools.? Mr. SUGARMAN. In the case of the full-year programs, 35 percent- and in the case of summer programs, 67 percent. Mr. QUIE. What is the percentage for private or parochial schools? Mr. SUGARMAN. 10 percent in both cases. Mr. QUIE. Now, in the full-year program which makes the 45 per- cent either in the public school or private or parochial school, what percentage is conducted by the Community Action agencies themselves? Mr. SUGARMAN. In the case of full-year, 29 percent are conducted by the Community Action agencies. I think the figure is 26 percent for other private nonprofit agencies. Mr. QUIE. Who are the remaining group, then? Mr. SUGARMAN. Usually independent Headstart agencies that have been created specifically for the purpose of runnmg a He'~dstart pi o gram where there is no Community Action agency. Mr. QUIE. So it is private nonprofit agencies created by the Coin- munity Action agency and then delegated? Mr. SUGARMAN. No; the group I was speaking of is in the situation where there is no Community Action agency. Mr. QuIE. We have about 75 percent of the full-year programs which is either by the public school, private or parochial school or the Community Action agency. Mr. SIJOARMAN. The remainingamount is a private nonprofit agency as a delegate of the community action agency Mr. QUIE. What type of organization does, that have? Mr. SUGARMAN. It may be a settlement house. It may be an organi- zation that was created as a }Ieadstart organization, as in Indianap- olis or Newark, where special private nonprofit agencies were set up, to deal with Headstart programs as delegates of Community Action agencies Mr. QUIE. If a delegate agency of the Community Action agency happens to be a church, but it doesn't run a parochial school, would it be considered as a parochial school or considered as a private nonprofit organization? Mr. SUGARMAN. We could count on the basis of the nature of the organization and you may find and will find a number of programs which are operated by public schools, using private school facilities and a number of .cases where private schools are operating programs not in their own facilities. Mr. SHRIVER. Sometimes in public schools, aren't they? Mr. SUGARMAN. I can't recall a specific case of a private school op- erating in a public school. Mr. SHRIVER. I thought San Antonio. Mr SUGARMAN No, there they were operating in a church of an other denomination. * Mr. SCHEUER. It is pretty clear that there was an ecumenical feeling. PAGENO="0602" 1440 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967. Mr. QUIE. Suppose a local Baptist church, which has no parochial school, is running a }-Ieadstart program. This would not be a parochial school. Mr. SUGARMAN. This would be a private church group, church af- filiated group, which is the term we use technically. Mr. Q.UIE. Let's go to Followthrough. The primary group we will fund the program with here is the public school rather than the Com- munity Action agency, making it different than Headstart.: Mr. SUGAR3IAN. That is correct, except that the Community Action agency is very much a part of the process. The grant technically will flow to the local education agency. Mr. QUTE. By being part of the process as long as there. is a corn- thumt.y action agency serving that area, they would have to be consulted? Mr. SUGARMAN. That's right, yes. Mr. QUTE. Now, I understand from Dr. Estes that there would be a. bypass, however, in the event the public school is prohibited by law, like in Nebraska or Oklahoma, where they have the greatest difficulty with the private/parochial school, but in the bypass the Office of Edu- cation can make the textbooks and library resources available but the t.itle must remain in some public agency. What. about. the private and parochial schools when you aren't. deal- ing with terms but programs and services here? . Would the grant money be made directly to the private or parochial school? Mr. Esms. Not at all. The gra.mt would be made to the Community Action agency or the Headstart agency and they would be responsible for adhering and supervising the program. Mr. QUIE. What if there is no Headstart or Community Action agency through which you could do it? Mr. SUGAR3IAN. There may. be a few instances across the Nation where this would exist. WTe would anticipate that we would consult with the director of OEO and that perhaps we could establish a Head- start-type, agency that could administer these grants. Since this is a Followthrough- Mr. QUIE. Let me finish this out, Mr. Chairman. Since in Headstart it is possible and OEO is making a grant' to a private church-related school-isn't this right., Dr. Sugarman? Mr. SUGARMAN. That. headstart is making such grants. Mr. QUIE. Yes. Mr. SUGARMAN. Yes; in the preschool area. Mr. QIJIE. Should not the Office of `Education do likewise? Mr. Esms. It has been our posture to make grants oniy, `especially in the Office of Education, to local educational agencies and in. the case where. a local school agency is not ab'e or willing to provide these services or provide participation then we would `make them to `the not-for-profit private agency, the Community Action group or the HeadstarL ` ` ` ` Mr. Q.mE. In no instance would you make the money available to the church-related school, when you get right down to it? `Mr. Es~s. I wouldn't say that. at `this point. I foresee no instance where we would be required to do this. ` ` Mr. Qvu. Would there be any way where that could be done by PAGENO="0603" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1441 the Office of Economic Opportunity for you since they are already doing it in Headstart? Mr. SUGARMAN. We retain concurrent authority, Congressman, but I think the situation which you pose is probably unrealistic in the sense that this is a Followthrough program on children who have been in Hea.dstart or similar kinds of programs, so that we almost certainly are going to have an organizational vehicle existing that we can use for this purpose. Mr. QUIE. But if your organization vehicle in the Headstart pro- gram is a church-related organization, then I can't see why the Office of Education can't also use that same organization vehicle to conduct Followthrough. Mr. StJGARMAN. In the absence of a Community Action agency? Mr. QUIE. That's right. Mr. SUGARMAN. This may be the most appropriate vehicle to use. Mr. QIJIE. In the event that you do assist the private school children, you have a different relationship in Followthrough than you do have in 1-Iea.dstart, because in Headstart you really don't know if those children are private school children or not, because they haven't at- tended the school. You knOw that their parents may have that religious persuasion, but will there be any requirements on the school to admit people of all faiths, all religions, all of the other requirements that you now have of public agencies? Mr. SUGARMAN. As I see this feature of the program working, Congressman, the existing Headstart policies required that records be transmitted to the school system to which a child is going, so that there in some form of continuity. This will provide the basis for determining * the share of Headstart èhildren that are going into private schools versus public schools, respectively. While there may be errors as people change their minds, we will at least have the general dimensions. Then the private schOols and the loc'il education agency ~s ill work togethei to develop a progr'tm for servrng children in the private schools. It is that program that will be submitted by the local educational agency for review by the Office of Education Mr. Qum. How soon will we be able to see the guidelines? You said to Mi Steiger that the President has to appiove them as yet Mr. SUGARMAN. What I have provided Mr. Steiger with a few minutes ago and will provide more copies as soon as we can get them reproduced is the 13 principles which we give to local com- mumties, which are, in effect, tentative guidelines on the programs developed. Those are immediately available as soon as wecan make copies. Mr QUIE Mi Chairman, should I continue questioning ~ Chairman Pp~njuws. Mr. Scheuer. Mr. SCHEUER. I take it on the question of the, administration of the Followthrough program where it is contemplated to give aid to kids who happen to be attending a parochial school of any persuasion that the conventional mandate that was clear in the Elementary and Secondary Education Act against aid * to parochial schOol, but for `ud to kids in parochial schools would be followed PAGENO="0604" 1442 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. SUGARMAN. That is correct. Our act has two such provisions which govern this and limit our assistance to special remedial non- curricular services to the children. Mr. SoJ~uuER. And the conventional intent express need the debate on the Elementary and Secondary Education Act would be the standard? Mr. SUGARMAN. Yes. Mr. SoiiEU~R. I would like to ask your opinion on the centers for children and parents program, which, to me, is an existing program, because it constitutes the full variety and scope of all the services you talked about in these kids making available according to the recommendations of the National Advisory Council on title I the full breadth of innovation and change which they felt necessary and an increased emphasis on the family over that in Headstart and an increased emphasis on working with the parents. As you envisage the CCP program with centers for children and parents, would these services include some kind of a day care service where mothers with several children would come? Mr. SUGARMAN. I think, in many cases, they will, but again, as Mr. Shriver has indicated earlier, our preference is to keep children in their homes and strengthen families whenever possible. But there are many situations where that IS: not possible. Mr. ScnwER. In the explanation of your program you said you wished to emphasize families where there was more than one child. Mr. SUGARMAN. Right. Mr. Sc.heuer. If there are other children in the home, how are you going to make contact with that mother if you don't provide some way of taking care of the other kids? Mr. SUGARMAN. Let's take a case of the family that has a 2-year-old, a 4-year-old, and 6-year-old. If the mother were not in position to take care of the child during the day, the mother or father or some other member of the family, the 2-year-old would be in a Child and Parent Center, the 4-year-old in Headstart, and the 6-year-old in a school but can go to the COP for day-care service~s a.t the center after school. Mr. SCHEtrER. As is frequently the case in these impoverished com- munities where they have children of 1, 2, 3, 4, or 5, where they have a family that produces a child every year, and they would have a number of children in that preschool agency, are you going to have some way of taking care of all these kids so that the mother can be involved~? Mr. SUGARMAN. The intention is that, once the family is enrolled in the program, every member of the family will be serviced. Mr. SCHEUER. Are you going to have comprehensive family health care and nutrition care? Mr. SUGARMAN. Yes. Mr. SCHEUER. Will the nutrition involve three squares a day? Mr. Sua~n~i~u~. Yes, and may even involve services to the family. Mr. SCuEuER. And it will involve opportunities for the parents to receive not only counseling of all kinds, but also some kind of job training? Mr. SUGARMAN. Yes. I might observe that they are trying to link the centers with the neighborhood centers, so that the actual range of service will be available without additional cost to this program. PAGENO="0605" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1443 Mr. SCI-IEUER. Do you believe that you have enough authority now or do you anticipate any questions might come from this committee next year as to what the technical authorization might be so that it might be beneficial to have this spelled out more fully in this year's poverty legislation? Mr. SUGARMAN. Our General Counsel and I feel that the authority is clearly within section 222 and it is just this kind of thing that section 222 is designed to handle. Mr. SOHEUER. Do you consider this a research and development program? Mr. SUGARMAN. Not in the sense of the legislative language which pertains to research and development. Mr. SCHEUER. Let me ask another point. Do you think you have any more need for experimentation as to the validity of the principles in- volved here spelled out by the National Advisory Council report on title I? Mr. SUGARMAN. No; I think the evidence already exists. Mr. SCHEUER. I agree with you wholeheatedly. How many kids do yOu contemplate caring for in your CCP program? Mr. SUGARMAN. We are not quite sure, Congressman, but the antici- pation is somewhere in the neighborhood of 2,500 children. Mr. SUHEUER. 2,500 nationally? Mr. SUGARMAN. Families, I should say. Mr. SOIIEUER. That may be 10,000 or more children? Mr. SUGARMAN. Yes. Mr. SCHEUER. My question to you is this. I think you are absolutely on the right track. I think the development of the COP centers is an elaboration and extension of the Headstart concept as it has been validized and not only the Headstart experience but vehemently validated in title I experience. Then, since we admittedly are beyond the research and experiment stage and are operating with program elements which have proven program to everybody's satisfaction, why haven't you come in with a program 100 times this size? I think you are on the right track, but ~tgain I feel the sense of frustration that you are right, the validity of these assumptions has been proven over and over again by a multi- plicity of Government agencies, and why haven't you come in with an operating program that really makes sense and begins to meet the need? Mr. SUGARMAN. I think there are two parts to the answer. First, while the research has been done, I think the facts established have largely come from what I would call a hothouse setting of a univer- sity with a highly trained and organized staff of very qualified pro- fessionals. We now need to turn this into operational experience, and that is why I think it is critically important that we start small in terms of acquiring that experience. The other is what the President said in submitting the budget, that the country simply cannot do this year all the things that it would like to do. Mr. SCHEUER. There are those of us on this side of the rostrum who don't agree with that, who feel that a sufficiently high priority has not been given to these programs, and again I wish to restate my feeling PAGENO="0606" 1444 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 of frustration that you don't apparently have the sense of the rightness of your own program that many of us on this side feel that you should have. * I think your programs, particularly in the preschoolcliild-develop- ment area have been-and I use the words advisedly-marvelously effective in their impact, in their proliferating effect and in the ventila- tion that they have given the whole educational establishment, and I can only wish that you had the confidence and sureness that you were on the right track that would stimulate you to ask for a budget and a scale of operations that would be meaningful. I think this goes to a lot of proverty programs. When all the dust settles and the smoke clears, sure, it is possible to nit-pick on many of these programs, and I will be in the forefront of the nit-pickers be- cause we are all eager to improve, but basically taking an amount-of- interest point of view, your programs have been right. This goes to the p~eschoolchild-development programs, the Neigh- borhood Youth Corps, the Job Corps, and all the rest. I wish you were meeting a vastly increased bite of your total constituency and I hope that some day soon you will get out of the research and experimenta- tion and pilot frame of mind and come up to the Hill with operating programs that really meet full-fledged the challenge of poverty, the dimensions of the poverty group, and show us how we can get. on with doing the job we want to do. Do you wish to respond to that, Mr. Shriver? Mr. SHElVER. My reaction is that I think you might say everybody in the executive branch feels the same way. I think the President has sent over a budget that is a 25-percent increase in dollars over last year. Many people here take the attitude that an increase of those dimensions is financially impossible for the United States. I personally believe that if we can get the budget that we asked for, that it will be a great step forward for the programs that we are attempting t.o proliferate, and secondly, I think tha.t it will be a tre- mendous step in the right direction by the Congress. Mr. SCHEUER. We have some education to .do in the Congress. There is no question about it.. I hope instead of a 25-percent increase, you will be talking about a.dding some zeros to your program and I am talk- ing about more than one zero. Mr. SHElvER. As I have said, the Congress has the purse strings, that is correct, the House does. and I think the President deserves credit for coming here with an increase suggested for this agency for the year, particularly in view of the widespread statements by Con- gressmen and others that that kind of money is not available for these programs. The.ref ore, I think that the budget we have asked for and the Presi- dent has set up here is a significant budget and that it would be fine if the Congress would adopt that budget. Mr. SCHEHER. I want to congratulate you. I feel the entire poverty program has worked very well with all of the mistakes I feel that have been perhaps overemphasized on both sides of the isle and have been blown up in the press. Surely your efforts in the preschool area have been monumentally significant and I look forward to where we can really get on with the job. Chairman PERKINS. Mr. Goodell. PAGENO="0607" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1445 Mr. SHRIvr~n. Thank you. Mr. 000DELL. Your testimony today particularly with reference to J-Ieadstart and the response to Mr. Scheuer's question indicates that. you think you can use considerably more money in the war on poverty. Is that your view ? Mr. Si-IRIvER. What I have said is that many Members of the. Con- gress believe that. I think that many of the programs could be larger, but 1 have also said that if we could get the budget that we have asked for; I think it would be a great step in the right direction by the Congress. We have asked, as you know, for authorization of $2,060 million. There are those in the Congress who say that an increase of that size at this time is out of line with the fiscal reality. I disagree with that and I believe that if the Congress would adopt the budget that we sent over here, that it would be a significant. step by the Congress in support of our overall efforts. Mr. GOODELL. Those are very carefully chosen words. Secretary Wirtz is quoted as saying we are spending money in the war on poverty as rapidly as it can be responsibly spent. Do you agree with that statement? Mr. SHElVER. I think that the capacity for spending it responsibly increases every day and every week because people in the local coin- munity action agencies, people who are running Headstart programs, every month get better at the operation of them. That is one of the reasons why there is a- large training component in the Headst.art pro- gram, so that we- do increase the capacity for utilizing Federal funds more effectively all the time. Mr. GOODELL. Could we responsibly spend more money now? Mr. SmuvEn. Yes; we could spend 25 percent more money responsi- bly now. But the problem is to get Congress to bring it out. Mr. GOODELL. Could we responsibly spend more money than the $2,060 million that you are requesting? Mr. SHRIVEn. I am here testifying on behalf of that budget and there- fore' it represents my opinion as to what Congress should. appropriate and what we can use responsibly. Mr. GOODELL. But you do not think we could responsibly spend more than $2,060 million? Mr. SHRIVEn. It isn't what I think. It is what Congress thinks that I think you are trying -to get at. Mr. GOODELL. We are interested in your opinion. Mr. S.rni'v~n. I testified that I am here testifying on behalf of that budget and I think we could spend that responsibly, very effectively, without any overlapping or any kind of hideous things. Mr. GOODELL. You have heard Mr. Scheuer's comment and there are. others who believe that. He may well offer an amendment to raise that figure $500 million or something of that nature, and we would like your guidance. Can you responsibly spend more than $2.06 billion? Mr. Scheuer. If I submitted an amendment, I would not be such a piker. as to add only $500 million. Mr. GOODELL. He may want to double it. We want your guidance. Mr. SHElVER. I have never irresponsibly spent anything. Mr. GOODELL. You are not giving an answer. You are very effectively avoiding answering. PAGENO="0608" 1446 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. SHElVER. Not at all. Whatever money we get we will spend responsibly. There is no irresponsible activity in this agency, nor will there be. no matter what Congress appropriates. Mr. GOODELL. Mr. Wirtz has said that you cannot spend in the war on poverty any more than $2.06 billion responsibly. Mr. SHElVER. When did he say that? Mr. GOODELL. Page 833 of the record on Friday, when he testified. I quoted this to him and he affirmed the statement and said at that point he would make it clear that he made the statement in December and he was referring to $1i~ billion and today he is referring to $2.06 billion which is a budgeted amount. That is in 833 and 834, and there- after the question was pursued. I would like to know if Mr. Shriver agrees with this. Mr. SHElVER. I have already said that I think that is correct that we can spend that amount of money. Mr. GOODELL. You are saying you can spend responsibly $2.06 bil- lion. The question is, can you spend more than $2.06 billion in the war on poverty? Mr. SHRIVER. That would depend on what Congress wants to have done. I am not going to answer questions in a vacuum. Mr. GO0DELL. This is hypothetical. We have a great routine here. Mr. SHRIVEn. We have great routines in the other direction about the fact that "what we have already spent has not been spent properly." Mr. GOODELL. Mr. Scheuer has indicated that it would take $2.06 billion to fund }Ieadstart, and we have the same amount in as last year. The question is direct and simple. Can you spend more than $2.06 billion in the war on poverty in 1968? Mr. Wirtz says no, but you don't want to give an answer. Mr. SHRIVER. I want to give you the answer I have been giving you, which is the accurate answer. You say, could you spend more? Whether one could spend more depends on personnel ceilings, a whole host of matters such as programs it would be appropriated for, et cetera, so that it is impossible to answer such a question "yes" or "no." What I have said over and over again is that we are here testify- ing for the particular budget which we can expend responsibly. that we have not irresponsibly spent anything, and that we would be delighted if you would join those who are in favor of that budget rather than, for example, cutting that budget. Mr. G-OODELL. You know that our Opportunity Crusade involves an increase in the amount of money for }Ieadstart. This is very correct. There may well be proposals in this committee to ~tdd to the $352 million. We would like your guidance. Can you spend more than that on Headstart responsibly in the fiscal year 1968? Mr. SHElvER. We would have to make a study of that with re- spect to }Ieadstart. What I am trying to say is that when people want to increase one, they also at the same time want to decrease others, and what we are arguing for is a balanced program for $2.06 billion. We can't seem to get that simple point through. What I want to know is, will Congress support that? Mr. GOODELL. You want to change the discussion and not answer the question. So you are going to leave everything else at the same level. Do you want an increase and can you responsibly spend more PAGENO="0609" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1447 money in Headstart for fiscal 1968, leaving everything else at the level you recommend? Mr. SHRIVER. Our position is that all of these programs are neces- sary. Take the health program. It would be a tragedy to cut it back in order to increase another one such as, let's say, Headstart. What we are proposing is a balanced program and that it what we want from Congress because we don't want to shortchange the legal services program or the Neighborhood centers or the Neighborhood Health. What happens is that people always want to expand one that they happen to like and cut back one that they are not interested in. Mr. GOODELL. My question is: If everything is kept at the same level, can you responsibly spend more money for Headstart? I don't have to repeat the question. Mr. SHRIVER. But you can't do that within the budget figures that you propose. Mr. GOODELL. I am not proposing. I am asking you: Can you spend more than $2billion 60 million? Mr. SHRIvEn. Not responsibly across these programs. Within that limit of $2.60 billion, within your limit of $1.7 billion, it is even more irresponsible because you have to cut something back. Mr. GOODELL. I am asking: Can you spend more than $2.60 billion in the war on poverty in fiscal 1966? As a matter of fact, Mr. Wirtz made that statement. I didn't agree with that statement. He made it flatly, that we couldn't responsibly spend more than $2.60 billion at the moment in `this program. There are many others who disagree. Mr. Scheuer disagrees with it. I disagree in `certain segments, and I would like your opinion and I think the committee would like it. Mr. SHRIVER. I would be glad to discuss it segment by segment. What I am anxious for-and most people say you can't get even $2 billion- Mr. GOODELL. You are not going to get it with the kind of answer you are giving me. If we keep this money, all the other programs, right where it is, no sacrifice of any other program, can you spend more money responsibly on Headstart? Mr. SCHEUER. Mr. Chairman, I think he has answered. Mr. GOODELL. Can you spend more money? Mr. SHRIVEn. Mr. Chairman, I have `answered the question six or seven times. Mr. GOODELL. I think the record will show that you have effectively avoided it. Mr. SHRIVER. You may think so, but I dOn't think so. Ch'airman PERKINS. I hate to cut off the hearings for today, but let me again compliment you and all your associates for your appear- ance here. I think you personally put in an outstanding appearance and well presented your case. We will have you and your associates back at an early date. We will continue on tomorrow and Wednesday and Thursday with, the regular schedule. Mr. SHRIVER. Thank you, Mr. Chairman and the other members of the committee for the `attention you have given to our presentation. Thank you. (Whereupon, at 12:50 p.m. the hearing was recessed, subject to call.) 80-084-67--pt. 2-39 PAGENO="0610" PAGENO="0611" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 WEDNESDAY, JUNE 28, 1967 HOUSE OF REPRESENTATIVES, POVERTY TASK FORCE OF THE COMMITmE ON EDUCATION AND LABOR, Washington, D.O. The task force met at 9:45 a.m., pursuant to call, in room 2175, Ray- burn House Office Building, Hon. Carl D. Perkins (chairman of the committee) presiding. Present: Representatives Perkins, Green, Pucinski, Daniels, Gib- bons, Quie, Goodeil, and Dellenback. Also present: H. D. Reed, Jr., general counsel; Robert E. McCord, senior specialist; Louise Maxienne Dargans, research assistant; Ben-~ jamin Reeves, editor of committee publications; Austin Sullivan, in- vestigator; Marian Wyman, special assistant; Charles W. Radcliffe, minority counsel for education; John Buckley, minority investigator; Dixie Barger, minority research assistant; and W. Phillips Rocke- feller, minority research specialist. Chairman PERKINS. The committee will come to order. A quorum is present. We have with us this morning two of our colleagues, Congressman Charles A. Vanik of Ohio and Congressman William S. Moorhead of Pennsylvania. You are the first Members to appear. All of the mem- bership has been invited. We are delighted to welcome you here. We are interested in hearing your testimony, and you may proceed in any manner you care to. STATEMENT OP HON. CHARLES A. VANIK, A REPRESENTATIVE IN CONGRESS PROM THE STATE OP OHIO Mr. VANIK. Mr. Chairman, I appreciate the opportunity to testify before you on this measure. I want to commend you for the success of the higher education bill. It gave me a source of great pride to see it come through intact. It was a great achievement. Mr. Chairman, as you are undoubtedly well aware, I am sure, I rep-. resent an area within the boundaries of the city of Cleveland in which there are over 144,000 people classified at or below the poverty level. The Hough community, which has, for negative reasons, become na- tionally known, is within my congressional district. For these reasons and many others, I come before this committee in hearty support of the proposals presented within H.R. 8311, the Economic Opportunity Amendments of 1967.. 1449 PAGENO="0612" 1450 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 As I indicated in a recent House speech in support of the debt ceil- ing increase, those of us Members of Congress representing urban areas with high levels of need cannot countenance any further dilution of the vital programs currently being carried on through the Office of Economic Opportunity. While each Member of Congress serves a varied community with distinct and different needs, it is inconceivable to me that the House of Representatives should overlook the national Droblem of poverty. It is no longer feasible or rational to demand the disbanding and destruction of an important agency which serves to coordinate and to assist on a unifying basis those thousands in my district and millions throughout the country submerged in the mire of poverty and despair. This program of economic opportunity has already demonstrated through employment and community participation in health program- ing, and in' neighborhood renewal and rehabilitation, that the worth of this effort is vital and must be continued. I do not dismiss lightly, Mr. Chairman, the mistakes which I know have occurred. I would only ask a degree of understanding which must flow from the enormity of this program. The magnitude of such an effort does not come prepackaged and fully guaranteed with a double-our-money return if not satisfied. This program has been truthfully packaged. It has not been mis- represented in any way, and it has, in my judgment, surpassed the hopes of' many of us in beginning this immense task of helping the poor help themselves. But., Mr. Chairman, this is obviously only a `beginning and `a small one when compared to the size of the problem of poverty which con- fronts our country. I would specifically wish to endorse two proposals which are new to the OEO effort. One relates to the availability of neighborhood-youth--corps-type funding for on-the-job training for out-of-schoOl youth in private industry, section 102, known as "Work and Training for Youth and Adults." It has been my feeling over the existence of this program that private employers must be brought more closely in touch with the national effort to develop employability among our inner city an'd rural dis- advantaged youth. I would like to point out at this pomt, Mr. Chairman, that we have had a parallel experience as the one experienced in Washington in the summer jobs program. `In Washington the papers have carried full and complete stories. In my community the Federal Government, through its participa- tion, has been involved in the creation of 6,000 opportunities. The private sector came up with 250, and I think they were stretching in the calculation. This indicates the great `problem `we have in the private `sector. There were some 15,000 to 20,000 summer jobs created, but they fol- lowed the pattern of nepotism PAGENO="0613" ECONOMIC OPPORTtNITY ACT AMENDMENTS OF 1967 1451 We also have union contracts in my community which provide that summer jobs are a frequent benefit to the children of the employed worker. So we do have other problems that relate to this whole matter. And if we, have a calm summer, as I hope we will, the lion's share of the credit is the credit of the Federal. Government in undertaking this tremendous program when related to the contribution of the private sector. We here from our businessmen that the Government is doing too much and that it is developing in areas where it should not. Here we have a concrete example of the failure of the private sector to even recognize the scope of the problem. I feel very strongly that such employment efforts should not be left to the public sector alone. The burden should be more equitably dis- tributed in both the private and the public sectors. If we expect long-term gainful employment among these disad- vantaged youth, they must be provided with realistic, in-service private employment opportunities to know accurately the demands and re- quirements expected from an employer in a private sector. On-the-job training efforts of the sort suggested in this bill will undoubtedly succeed in the same effective manner as have already been tried and tested in the adult on-the-job training program. Mr. Chairman, I feel without doubt that no sector of our economy or Nation can or should be immune to seeking solutions to the great problem of employability which now confronts us. This proposed plan of action for youth on-the-job training in the private sector will go a long way in that direction. I might also say that I am disturbed to note continually that youngsters whose families make $100 or $200 more than the poverty maximum allowable income of $3,200 are precluded from participat- in~ in these job efforts. It is my hope, therefore, that the committee can consider changes which would increase this $3,200 maximum income figure, which is almost $1,800 out of line in a densely populated urban area. Five thousand dollars per annum in my community of Cleveland is a pov- erty level for a family of four. I think the legislation ought to con- sider the differentiaL Yet the children from these families are in another world, unable to benefit from these vital employment efforts, like the Neighborhood Youth Corps, and are unable as well to benefit from any other means of gainful employment.. These young people are left Out with no re- course but to deal with the problem of having too much time on their hands. I wish to insert in the record at this point statistics which will indi- cate the lai ge number of young people who are in this terrible bind of being $200, $300, or $400 above that maximum income level. In the Hough community and similar poverty areas in Cleveland, they make up over 50 percent of the population of young people. I would like to submit these statistical tables as exhibit No. 1. (The table,s referred to follow ) PAGENO="0614" 1452 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Median income Negro median income Negro unemployment rate 1964 1959 1964 1959 Male Female 1965 1960 1965 1960 Cleveland, totaL Neighborhoods, total Glenville Rough Westcentral Eastcentral Kinsman Goodrich Mount Pleasant Remainder of Cleveland S6, 895 5, 259 6, 156 4,050 3,000 3,857 4,164 5,883 6, 504 7, 642 $5, 935 4. 937 5, 593 4,598 2.977 4,015 4,365 5,402 5,850 6, 558 $5, 489 5,085 6, 117 3,966 2,984 3,887 3,729 4,327 6. 513 7, 285 64, 743 4, 648 5,456 4,440 3,012 3,956 4.078 4,450 5, 830 5, 797 so; 7 11. 2 7. 2 14.3 20.4 15.7 12.4 41.9 6. 8 8. 1 12. 8 13.0 11. 2 15.7 18.3. 13.6 12.8 26.3 7. 7 10. 2 12. 8 14. 5 12. 5 19.1 26.4 14.2 17.8 (1) 8.4 3. 8 12. 0 12. 3 10. 4 16.0 15.9 11.2 15.6 (1) 9.3 9. 0 1 Insufficient data. Percent of total popula- tion under 25 Percent of 14- to 19-year olds in labor force Median years educa- tion, 1965 Percent of all per- sons below poverty level 1965 1960 Percent of family heads under 25 below poverty level, 1964 Percent of family heads under 25 below poverty level, 1959 Cleveland, total 44.0 Neighborhood, tota1~~ 48. 6 Glenvelle 50.7 Hough 53.4 Westcentral 49.5 East central 42.1 Kinsman 53.4 Goodrich - 39.9 Mount Pleasant 43.9 Remainder of Cleveland 42. 0 34.6 29. 8 25. 6 36. 0 22.6 32.1 23.7 36.2 28.2 37. 8 10.3 9.8 10.6 9.7 9.2 9.3 9.0 8.8 10.5 10.7 15 30 23 39 49 36 35 21 1. 9 18.0 28. 0 19.0 31. 0 51.0 36.0 32.0 23.0 15.0 10.4 17 47 55 66 57 64 55 29 27 5 23.0 39. 0 27. 5 46. 4 70.5 56.9 46.0 25.0 20.5 11. 0 Mr. VANIK. This census data reveals the commonly known discrep- ancies ill median income and unemployment levels between the city of Cleveland and its six major poverty areas. The data on the second chart, however, clearly reveals the crisis fac- ing the young in Cleveland~s ghettoes. Column 1 of the second table shows that most of the poverty neighborhoods have a higher percent- age of their population under the age of 25 than does the rest of the city. Column 3 shows that the children and youth of the seven major poverty areas have a "median school years completed" of 9.8 years- almost a full year less than the rest of the city. Despite t.his fact, only 29.8 percent of. the poverty areas' 14- to 19- year-olds are in the labor force, as compared to 37.8 percent for the rest of Cleveland's 14- to 19-year-olds. Obviously, a large number of poverty area teenagers are unem- ployed, subemployed; or have been turned down so often that they are no longer even in the labor market. A special Department of Labor re- port on employment in Cleveland's slums indicates that 58 percent of the area's out-of-school youth were unemployed in 1965. A further proof of the poverty and jobless future facing Cleveland's youth can be seen in columns 4 to 7. In 1965, 30 percent of the residents of the seven areas had income below the poverty level of $3,200 for a family of four. But 47 percent of the heads of households under the age of 25 fell into this poverty level, while only 5 percent of such young family heads in the rest of Cleveland fell into the poverty level. PAGENO="0615" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1453 The latest unemployment rate for the poverty areas of Cleveland is 15.5 percent. Many of these unemployed are the youngsters in families who scrape by on $3,500 per year. These unemployable young people are a grievous burden on their families. They want to work but cannot. One major reason why they are left out is the ridiculously low level of maximum allowable income of $3,200 for urban families of four, two or three of whom can be unemployed at a time. The extent of the problem of unemployment is so grave as to war- rant every possible consideration for solution. The increase in the in- come level by these family groups would improve chances of employ- ment of many thousands of these young people. I have determined that over 500 youth were turned away during the application week for Neighborhood Youth Corps inschool program solely because their families were several hundred dollars over the maximum poverty income level. What are these young people to do? In addition, Mr. Chairman, I wish to comment upon the proposal known as the Summer Camp Act of 1967. Through my office, 1 at- tempted to obtain the U.S. Army's Raveima Arsenal site and/or Camp Perry for use as a summer camp. I took this action independent of any knowledge that such a proposal had become a part of the economic op- portunity amendments. My own reason for. attempting to obtain this land for summer camp purposes was based upon the fact that so many young people under 15 years of age currently have no employment activities available to them. The disturbances that have occurred this year in my city involved many young people below 15 years of age who were deeply involved because they had nothing to do. As a result, I requested Secretary McNamara to release the Army- owned property of the Ravenna site, south of Cleveland, or the Camp Perry site, which is Army leased to conduct the National Rifle Asso- ciation national pistol and rifle matches in the months of August and September. The Federal Government currently subsidizes the sharpshooting matches to the tune of $2.7 million in funds that we can determine. As some of you are aware, I am sure, I attempted to have deleted from the defense budget the subsidy of this event, as well as other civilian marksman activities in which travel, weapons, and billeting are now subsidized by the Federal Government. These issues aside, it. is imperative that additional fresh-air recre- ation facilities be developed to~ serve youngsters from our urban areas. The environment which now exists in most urban areas in which there is overpopulation and lack of recreation facilities is intolerable. The Federal Government, with its resources in land and, in some instances, housing and feeding, must be brought to. bear in. seeking adequate solutions to the problem of the inner-city youngsters. I am proud to note, notwithstanding the critical squeeze which now exists in existing camping facilities in and around the Cleveland area, that officials of Cleveland camps have already agree to and have implemented a program to add 1,500 youngsters to.. their existing facilities. . These youngsters are from the inner city and will receive, free of PAGENO="0616" 1454 ECONOMIC OPPORTTJNITY ACT AMENDMENTS OF 1967 charge, an opportunity to participate in day or resident camping throughout the summer. This program was financed through a grant from the Office of Economic Opportunity and, hopefully, will be subsidized further through private contributions from the Cleveland area. The Board of Education of `Cleveland is also assisting financially to support this program. Camping officials in my area expanded their already hard-pressed facilities to accommodate new groups. The proposal for the Summer Camp Act, if passed, will add immeasurably in providing thousands more *from my area alone with much needed fresh-air, outdoor programing. I heartily support this proposal. In conclusion, Mr. Chairman and members of the committee, I wish to thank you for your patience, and I wish to emphasize again that we must meet with every resource the huge responsibilities with which the problems of our iimer city now challenge us. Thank you. I would like to point out this additional fact before I close. In my community we have been suffering a decrease of central city population, over 100,000 people having left the central city. Chairman PERKINS. Let me thank you, Congressman Vanik, for mak- ing an outstanding statement. You raised many questions which I feel are a great contribution to this committee in connection with con- sidering the legislation in which we will interrogate you in a few minutes. I understand that we have with us a summer sociology seminar of the National Cathedral for Girls, Washington, D.C. There are 28 girls from every part. of the United States and Puerto Rico. We are glad to welcome you here. This is one of our open hearings in considering the extension of the Economic Opportunities Act that we enacted in 1964. We are glad to welcome you here. Before we commence the questioning of you, we will hear from Congressman Moorhead. STATEMENT OP HON. `WILLIAM S. MOORHEAD, A REPRESENTATIVE IN CONGRESS PROM THE STATE OP PENNSYLVANIA Mr. MOORHEAD. Thank you, Mr. Chairman, and members of~ the committee. It is a great pleasure to be here this morning as a congressional wit- ness.' My purpose in appearing here is twofold: First, to speak on be- half of the Economic Opportunity Amendments of 1967 and second, to urge that the Office of Economic Opportunity be retained as the central administrative and coordinating agency for the programs that constitute the war on poverty. The bill before you strengthens, continues and in some cases expands a complex of programs that has been of incalculable benefit to the people of my city of Pittsburgh. Just as importantly, it retains the administrative and coordinating framework without which the Pittsburgh program could not have succeeded to the extent it. has. Pittsburgh's program is a success because the city was ready with PAGENO="0617" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1455 appropriate plans and proper leadership a year before the passage of the Economic Opportunity Act of 1964. The city was able to mobilize quickly for its war on poverty because the pattern of cooperation between the city government and the com- munity's social, religious, and civic organizations was well established Pittsburgh's antipoverty administrative agency is the Mayor's Com- mittee on Human Resources, Inc. Both ends of its name are significant. The mayor of Pittsburgh, Hon. Joseph M. Barr, set up the committee, is its chairman, and appoints a majority of the members. Yet the committee is an incorporated private organization, not a city agency or a public body, with a membership representing many important elements in the community-business, labor, government, housing and social service agencies, the clergy, educators, civil rights groups, and the poor themselves. The committee combines the variety of skills, powers, and interests essential for a concentrated attack on poverty. Pittsburgh's war on poverty has been a team effort from the first. Existing community services and agencies have been coordinated with each other and the city government in a way never before attempted; lines of communi- cation are now open between the poor and the city; the poor have been gi~ en `r ~ oice in planning ~ ays out of their poverty, and all efforts have been focused on specific target areas. I might add here that Sargent Shriver, the very able Director of OEO, has frequently singled out the Pittsburgh antipoverty program as a "model for the Nation." As of yesterday, it is estimated that since early 1965 the lives of more than 120,000 disadvantaged Pittsburghers have been affected for the better by one or. more of the 29 programs in the city's war on pov- erty. Here are some specific examples: In education, 54,000 children from preschool to high school age have participated. in special compensatory programs ranging from head- start to reading clinics to tutoring, cultural, recreational, counseling, and mental health programs. Employment centers in Pittsburgh's eight target neighborhoods have found jobs for 3,000 16- to 21-year-olds in Pittsburgh's Youth Corps, nearly 300 16- to 21-year-olds in Job Corps camps all over tire United States, 450 adults in subprofessional posts in antipoverty pro- grams in their own neighborhoods, and 590 adults in new positions in the private employment market. Some 28,000 persons have received health services ranging from pre and postnatal care, child medical and dental care, home visits from health teams, immunization clinics, and most recently, a neighborhood health center to be set up under a $1.7 million OEO grant. Social services have been brought to more than 27,000 persons. These ser \ ices include family counseling, homemaker truning, and ~ elfare consultation. ice legal services from l'~w yers in the eight target neighborhoods have been rendered to 3,800 clients. These lawyers also conduct con- sumer education classes. Other programs include housing repair and maintenance classes for 6,000 students and special activities for 2,800 of the city's aged. But while the city, its public and private agencies, and its citizens deserve substantial credit for combining their skills, powers, and in- PAGENO="0618" 1456 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 terests in a concentrated effort that necessarily involves all of them, so, too, does the Office of Economic Opportunity. In my estimation, OEO, the machinery that Congress created to administer the war on poverty, was well conceived, and should not be dismantled, as some have suggested, merely because it has shown some imperfections. Our nearly 3 years' experience with OEO are reflected in the stream- lining and strengthening provisions of the bill before you. It is my firm belief that a majority of the flaws that have shown up in the administration of certain aspects of the war on poverty-most notably the community action programs-are not inherent in the struc- ture of OEO but rather are a reflection of the fact that some American cities were not as well prepared for the demands of the war on poverty as was Pittsburgh. Our Pittsburgh program shows that by combining the resources and talents available in any American community the war on poverty can be won. But it is essential to have at the Federal level one independent agency, OEO, capable of concentrating skills and resources in the manner the local programs do. Mr. Chairman, I have noticed that many of those who are quick to denounce the War on Poverty are equally quick to defend its specific component programs, such as Project Headstart and the Neigh- borhood Youth Corps. These people seem to feel that by removing the specific programs from the jurisdiction of OEO criticism of the antipoverty program will end. To me, this is specious logic. First, we have seen over the years how difficult it is to assure inter- departmental cooperation on any project, and there is little reason to believe that this situation would improve if the various antipoverty programs were parceled out among the various departments. Furthermore, the basic concept of the war on poverty-a total, con- centrated attack on the complex of social, physical, and economic ills that afflict our poor-would be subverted by fragmenting programs that OEO has thus far carefully coordinated among departments al- ready overburdened by the demands of their own programs. Third, abandonment of OEO as proposed in the opportunity cru- sade would forfeit nearly 3 years of experience and know-how ac- cumulated by that agency in the administration of the war on poverty. In many respects, the war would have to begin again from where it started in 1964. Therefore, Mr. Chairman, I urge the Committee to retain the Office of Economic Opportunity and to strengthen and streamline its opera- tions by adopting the amendments in the bill now before you. Thank you for allowing me to appear here today. Chairman PERKINS. Do you feel we would be defeating our efforts to do something for the people with the greatest need throughout America if we abolished the Office of Economic Opportunity or transferred it to another department of the Government? Mr. MOORHEAD. I do. I believe you need a united effort at the local level and a united effort at the Federal level. Chairman PEn~INs. Do you feel we would have lost the experience gained in trying to serve the poor people of the Nation if we did that? Mr. MOOREHEAD. I am convinced we would do so. PAGENO="0619" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1457 Chairman PERKINS. Whatis your comment, Mr. Vanik? Mr. VANIK. I would like to acid to my colleague's statement by say- ing that 1 feel the centralized responsibility for this program has been perhaps the greatest factor contributing to its success and simply by dispersing the sources of help in this program would involve tying all of us up in the bureaucratic details that we have sort of brought together in the OEO program. I think we have been afforded through the OEO program an op- portunity to focalize and to direct our appeals to a central place and that was the whole idea of it. I think this is the proven success of the program. Chairman PERKINS. Do you feel, Mr. Vanik, from your statement, that so many youngsters in the city of Cleveland are being deprived of taking advantage of the present programs because of the present income levels? Mr. VANIK. $3,200 is unrealistic for a family of four. It may be different in rural areas but in my city that income is far below what it takes to support and keep a family decently. Chairman PERKINS. I want to compliment both of you gentlemen. I think I stated at the outset that you were the first members who had come before the committee. We hope many other members will come before the committee in the future. Mr. Quie? Mr. QTJIE. Do either of you support the movement of the delegation of programs of the Office of Economic Opportunity to existing agen~ cies? Mr. VANIK. Do you mean the Neighborhood Youth Corps and so on? Mr. QUIE. Yes. Mr. MOORHEAD. I think there has to be a coordinating agency, Mr. Quie. The war on poverty crosses so many jurisdictional lines. If there are poor in the rural areas, the Department of Agriculture may be involved; the Department of Housing may be involved in curing slum conditions; and the Department of Labor may be involved in the man- power and training. The Department of Health, Education, and Wel- fare might be involved in other programs. The only way this program can be made rational is to have all of this within an agency with central authority. In my own city we had to bring in people from the board of educa- tion, from the Catholic Diocese, from labor and business, from the city government, from the county, all working together, cutting across normal bureaucratic jurisdictional lines. I think this group at the local level must have one agency to deal with at the Federal level rather than five or six~ I don't believe it would be workable otherwise. Mr. VANIK. I would supplement t.hat answer by stating in my opinion the real enemies of the OEO have been the dismal bureau- crats who resented the prodding and the pushing and the shoving which the program has brought about. I think this is one of the purposes of the OEO to give us an inde- pendent arm, a free arm toward the approach of poverty utilizing all resources of the Government but being self-reliant in developing its own policy. PAGENO="0620" 1458 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 I think that is what has given strength to the program. Look at the things that have developed such as neighborhood legal committee, for example, just a few weeks ago in my Hough area. We bad a near disturbance which could have developed into a riot. How- ever, a riot was averted because of a legal office which was on hand that worked throughout the night to satisfy the people. A Negro boy was shot while perpetrating a crime. The needs of the community were going to be adequately covered and cleared by this grievance committee which worked throughout. the night and into the next. day to solve this problem. This is something which could never come about-except through the Department of Justice-excepting for the availability of the service that was created to file a need that was recognized by the Office of Eco- nomic Opportunity. I think one of the great benefits of this program is its scientific ap- proach in developing new answers and new approaches to the problems of our city blight. Mr. Q~IE. Have you contacted OEO and objected to them delegating certain of their responsibilities to existing agencies like the Neighbor- hood Youth Corp, Nelson-Seheuer, and Kennedy-Javits programs to the La.bor Department. Mr. \!AXIK. I have not protested what they have done and I think the Office of Economic Opportunity has been very cooperative in work- ing out these details. I think that these things have worked out. This w-as the mandate of Congress and the administration complied with that mandate, but. I think the fact that the OEO was a separate entity gave it great strength in implementing the public service. Today we have complaints in our community. The employment serv- ice complains about all of the other agencies that are out finding jobs for people. The result of that is our employment service has been made better because of the stimulation of OEO and its competitive services. This has been a good thing. It has made existing bureaucracy work better because it was able. to check and work and provide some com- parison and some analysis to the bureaucratic approach to the problem. Mr. Qrir. Did you support the amendments of last year which trans- ferred to the Small Business Administration, authority on title IV loans? Mr. VANIK. This was one the Small Business loans~ and there is one in Philadelphia, one in Pittsburgh, and one in Cleveland. I don't re- member what my position was on that. I have always felt that lending authorities generally should be consolidated in financial committees and put under the jurisdiction of the Banking Committee. I would see no objection with that loan program being reviewed and beirei a part of a small business activity. Mr. QUTE. Now, do you think we ought to look over other aspects of the war on poverty and see. if they would more properly fit under exist.- ing agencies? Would you likely have supported the SBA handling their small business loan program? Chairman PERKINS. I think it should be pointed out that the Office of Economic Opportunity recommended that the SBA do this, and it was done by agreement. Mr. QrnE. An amendment. was offered by CongTessman Thngell on PAGENO="0621" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 19 67 1459 the floor last year. Such a motion was turned down by this committee prior to that, but the House decided to support it. Mr. MOORHEAD. If I may comment on that, Mr. Quie, I think maybe there should be a distinction between the regular SBA progra.m where they are expected to keep their losses to a minimum and what you might call a softer. window where it is part of the war on poverty. I am not so sure that it isn't better at least to have a separate account for SBA where they take smaller loans but more risky loans. I would be inclined to think that OEO should be overlooking, but let's face it, I think SBA is better qualified to pass upon the risks tl1an OEO is. Maybe there should be a soft OEO window at SBA. Mr. QUIR. I have a feeling that the Office of Education and the Department of Labor and other agencies being more equipped. Mrs. GREEN. I would like to compliment both of you on the excel- lent statements you have made. I found myself very much in agree- ment with your statements. Under the New York City program, any youngster who comes from a family which is at these certain income levels is not eligible to participate in some of these programs. However, there can be extenuating circumstances such as a cata- strophic illness that wipes out the income of the family or other kinds of burdens. So I would hope this could be changed so the adminis- trator of the NYC program at the local level would have the flexibility to make the program work. I am glad you made that particular point in your statement. I would like to go to this other matter of having everything cen- tralized in OEO. I notice, Mr. Vanik, you said it was very desirable to have a centralized responsibility for the program. Mr. Moorhead, I believe you said it essential the local group have one group to deal with at the Federal level. I find myself in agreement with both of these statements. I have two examples on which I would like you to comment. Headsta.rt meets with the approval of most people and is an excel- lent program. The details which I am going into describe in this one school system could probably be duplicated a thousand times through- out the country. Headstart in this one local school district hires a teacher a.t a higher salary than the local kindergarten teacher. The Headstart teacher ha.s 20 youngsters during the day and the help of two aides. The kindergarten teacher, paid with local funds and not with pov- erty funds, has 30 youngsters in the morning and 30 youngsters in the afternoon and receives a lower salary than the Headstart teacher Now this is in a school district that does not have exactly the situa- tion both of you have said. Mr. Vanik, it does not have, a centralized responsibility for the program. It has two, because it must deal with the OE~O when the child is 4 years of age and it must deal with the Office of Education on education matters when the child is 5 years old. It does not ha've a local group as you suggest, Mr. Moorhead, which coordinates with an agency at the Federal level. Does it make sense to have this kind of arrangement? We are talking about youngsters in the same school and from~ the same socioeconomic group. How can this Congress plan a program that would really look at the total educa- tion of a child from the time he is 4 until perhaps graduation? PAGENO="0622" 1460 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Would it be well to have it so divided or would it be better to devise some other kind of system whereby one agency would be dealt with at the local level and you would have a centralized responsibility? This would be the first example. The second example would be a college or university which is work- ing to identify very brilliant youngsters who might not otherwise go to college except for this program. In the higher education bill, we have a section for a talent search under the Office of Education, providing for the early identification of this very able youth and giving him some very special academic help so he can compete successfully with others. In the war on poverty, we have the upward bound program which is for the same purpose to identify these youngsters early enough and gi~e them some academic training. Would it not make more sense to somehow dovetail these two pro- grams and have, as you suggest, a centralized responsibility for the same program and indeed one agency with which the local college or university could work? Could I have your comments on these two examples? I am sure they could be duplicated a few thousand times. Mr. VANIK. I would say my quick response is, Mrs. Green, if our work is done well in the Headstart program, and I feel that it is, we are certainly making it easier for the subsequent teachers to handle that child. So there is that advantage. Another point is that in the Headstart program we are doing many things. We are correcting some environmental problems with which the child had to cope. We are dealing with health problems, we are covering the whole spectrum of the child's education that lies ahead. I think this requires considerably more skill and if work is done as it should be done in Headstart, it will certainly reduce the work- load and the talent strain on the child that has been the beneficiary of the preliminary }Ieadsta.rt work. We must also bear this in mind, that getting to a Headstart pro- gram and evolving it is somewhat removed from the basic question of education because it has all of these other factors relating to the hu- man environment that are interwoven a.nd to toss this program into the whole educational spectre is not quite proper. We have to look to the entire environment in which that child is found in the Headstart program. In Headstart we are preparing the child for education which is separate and distinct from actually de- veloping and going through with an educational procedure later. Mrs. GREEN. Do you think that the programs and the goals for the child when he is 4 years of age in the Headstart program are that different from the goals and work that must be done with a child when he is 5 in kindergarten? Aren't you concerned about the whole child in both cases? Mr. \`ANIK. Education is only part of the whole child. I would say yes, they are different because in Headstart the child is probably first coming into a real contact with discipline which is almost the more difficult problem in education. The child is guided in~ habit patterns which will enrich the child's ~1ife throughout his entire lifetime. It is something separate and dif- ferent from actual education. I think there is a distinction. PAGENO="0623" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1461 Mr. MOORHEAD. Mrs. Green, may I just say how I think this sort of thing would be handled in our Pittsburgh experience. Any pro- gram would have to go through the central group we have, the mayor's committee on human resources. On that board would be representatives of the board of education and the Diocese and educational system. If they believed that the extra pay and the extra aides to a Headstart teacher would be disruptive of the morale of teachers in kindergarten, they would at least have the opportunity to say so. If, on the other hand, they believed that because the children in the Headstart program were picked from particularly difficult environ- ments and difficult family backgrounds, then they have to have a particularly talented teacher with more assistants, then I think they would approve of this action. I think the important thing is to have the local bodies also central- ized so the left hand knows what the right hand is doing, which is what I think is concerning you. Mr. VANIK. In many cases the local school board has not been will- ing to meet up to its real responsibilities and it has been considerably prodded on by the development of the Headstart program which pre- sented a new challenge and made the local boards recognize new areas of responsibility. In my area, for example, we have the NYC school children working in the school cafeterias for $1.25 an hour and along, side of them were regular employees working for the $0.85. The wrong was in the $0.88 an hour paid to the other workers and they quickly corrected that and brought both levels of work up to the same level. This is a case in point which I think is illustrative of the failure of local boards to be responsive. Chairman PERKINS. Mr. Goodell? Mr. GOODELL. I just welcome our colleagues. I think we can debate this on the floor rather than here. I do not think it would serve any purpose. Mr. DANIELS. I want to compliment both of my colleagues for their excellent statements. Mr. GIBBONS. I join Mr. Daniels in that statement. Chairman PERKIN. Thank you very much for coming. Chairman PERKINS. I understand the next witness this morning is Kenneth E. Marshall. I presume you have a prepared statement to make. You may insert~ it in the record and summarize it, inasmuch as the House will soon be convening, or you can read it or proceed in any manner you .wish. STATEMENT OP KENNETH E. MARSHALL, VICE PRESIDENT, METROPOLITAN APPLIED RESEARCH CENTERS INC., NEW YORK CITY, N.Y. . . . . Mr. MARSHALL. I welcome wholeheartedly the opportunity to appear before your committee. My statement is to be found in a journal known as the New Generation. You will note, sir, that a distinguished colleague of yours, Representative Charles Goodell, also has a state- ment appearing in this journal regarding OEO. PAGENO="0624" 1462 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 My point can be made very briefly. I believe there. is presently a need for change of focus in the three- tionof the war on poverty and it can be summarized by saying, I think, the change should be away from the cluster of welfare and social services, as important as they are to true economic development pro- grams and projects, economic opportunities in the areas of jobs. and the very vital and important development, of the ghettoized areas in many of our cities. I think there has been an imnecessarily large focus on individual pathology and individualistic approach to the problems of the poor and not a sufficiently broad approach to the communities in which the poor persons arere.siding. The kinds of programs that I am advocating would be those. that go more to the large-scale development of the conimirnities less emphasis on individualized services but a byproduct, I believe, of the kinds of programs that should be stressed. A byproduct would be individual advancement.. I think one. of the mistakes we have made is that when we come to dealing with the poor that we are too prone to seek to treat with them almost. in a. clinical manner. I sa.y that the same way we subsidize and affect the affluent of our society, there are programs that could be in a. sense a kind of a way of subsidizing the poor of otir society without stigmatizing them in welfare services. Even though I myself am a social worker and benefit directly from administering services of these kinds, I think many of them, first, are extremely difficult to evaluate. They are very dubious in their con- tent and their effect and very often the only beneficiaries or the maj or beneficiaries are those persons who are fortunate enough to obtain jobs. There is nothing particularly wrong with this. However, if these are the only opportunities a.round, naturally, t.here is a kind of dis- tortion because very often on the community level persons who should not be employed for one reason or another in these kinds of situations are employed because it is making jobs. Now what I am saying is that if we do not address ourselves to some of the more fundamental issues, and I think you have probably heard a great deal about the unemployment rate in our slum districts, par- ticularly in our nonwhite ghettoized district. We know the unemployment rate among youth is as high as 27 to 33 percent. It strikes me as being rather futile to be involved in a number of job training and retraining programs if in effect certain fundamental decisions as to the employment rate of this economy have already been made. We see the utter futility of putting youth through these procedures and then really at t.he end-of-the-line job. What I am advocating-and I ca.n get quickly to the end of my state- ment since the rest of it will go into the record- Chairman PERKINS. Without objection, your statement will go into the record. (Statement follows:) PAGENO="0625" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF I 9 67 1463 PREPARED STATEMENT OF KENNETH E. MARSHALL, VICE PRESIDENT, METROPOLITAN ~ APPLIED RESEARCH CENTER, INC., NEW YORK, N.Y. To criticize OEO and to recommend a number of changes in the programs and. policies of this agency is by no means to deny the very substantial accomplish- ments of the Office of Economic Opportuiiitv Perhaps most significant among its achievements has been its sponsorship of several hundred Community Action agencies, some of which have* provided exciting and real opportunities for poor persons and their selected representatives to participate in a variety of com- munity programs including Neighborhood Action Councils, Neighborhood Serv- ice Centers, Credit Unions, Headstart and Day Care Centers, etc. There is no question that the Community Action Program authorized under Title II of the Economic Opportunity Act of 1964, provided the impetus for significant positive changes in the nature of these services, their location, and the types of persons involved in the dispensing of same. Thus, for example, these programs have sought to decentralize and more effectively coordinate social welfare services. They have been in the vanguard of the movement to develop a wide variety of non-professional job opportunities as Headstart Aides, Public Health Aides, Neighborhood Aides, etc. Despite these very real accomplishments, the Economic Opportunity Act is a misnomer, and the agency established to wage the massive "War Against Poverty" declared by the President in 19434, has been prevented from the begin- ning from seriously carrying out this mission. Rather than authorizing direct ways of improving the economic status of poor persons through jobs, better housing, and economic support programs such as family allowances, the OEO Act primarily offers a cluster of welfare, training, and educational services. Although Title II permitted sponsorship of income and job producing Neighbor- hood Economic Development Corporations, few such enterprises have been launched with OEQ funds. The small business program authorized under Title IV of the Act is a notable casualty. This program was crippled by means tests restrictions which virtually ensured its failure. After the widely broadcasted promises of a WTar Against Poverty, the failure of local Community Action Programs to provide jobs, improved housing, and tangible economic opportunities has sometimes led to a kind of contamination and distortion of the programs and services which were provided. Often, as a consequence of the scarcity of new opportunities, the most vocal and active members of the Poverty Communities have sought and found jobs with Com- munity Action Agency itself. As Headstart Aides, or as Public Health Aides this did not matter. But, when these persons were sent forth as Community organi- zers, Community stimulators, etc., seeking to build Neighborhood Boards and stimulate "Community Action," the response of many of their neighbors not so fortunate to have had their economic circumstances so immediately and strik- ingly improved by the poverty program, has ranged from apathy to cynicism. In the absence of large scale programs providing substantial investment for the development of jobs, new housing, and other tangible community improvements, a selfish scramble of the new available new jobs is to be expected. However, this fact hardly creates the climate out of which efforts to organize volunteer groups of the indigenous poor for altruistic community action can develop. The amount of money made available for locally designed and sponsored pro- grams has been substantially reduced to provide funds for pre-packaged pro- grams directly administered by OEO. Some of these such as Headstart, have proven popular if but tenuously connected to any realistic and tangible concept of economic opportunity, while others such as the Job Corps, can be proven to be almost completely irrelevant to the needs of the persons for whom they are in- tended. As one observer has commented, "The Job Corps may be a good market for industry, but it is not working very well for the youngsters who are barely getting into the army" (after a course of training in a Job Corps Camp). Esti- mates of per capita cost of the Job Corps program have ranged as high as $11,000. It would have been interesting to see what an enterprising street youth with vol- unteer guidance from a mature businessman could have done with that amount of money in setting up a neighborhood business venture. Conceivably, several of them could have pooled their $10,000 economic development grants to establish a youth canteen, street academy, day care center, or family camp which would have not only provided the type of training opportunity available at Job Corps Camps, but could have also become the foci for community development efforts. 80-084-07-pt. 2-40 PAGENO="0626" 1464 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 In directly sponsoring a number of social services, educational, and remedial programs, and in restricting the Community Action groups almost exclusively to similar programs on the local level, the Office of Economic Opportunity has prob- ably il1advertently fallen into the trap of seeking the elimination of poverty, primarily through a cluster of services and programs that impute to the poor, either diretcly or indirectly, the major blame of their impoverished condition. The major immediate beneficiaries of these programs have been non-poor persons who have been afforded the opportunity of executive, technical, and professional positions in the program. While there is certainly nothing wrong with this, per se, the almost exclusive reliance on the services approach has seriously compro- mised the Office of Economic Opportunity. In~ actual fact, there was no need in 1964 to enact an "Economic Opportunity Act." Legislation already existed which could have served to bring about all mapor improvements in the lot of the poor. One need only recall the Declaration of Policy in Section I of the Housing Act of 1937 which read as f~,l1ows: It is hereby declared to be the policy of the United States to promote the gen- eral welfare of the Nation by employing its funds and credit, as provided in this Act, to assist the several States and their political subdivisions to alleviate prés- ent and recurring unemployment and to remedy the unsafe and instanitary hous- ing conditions and the acute shortage of low income, in urban and rural nonfarm areas, that are injurious to the health, safety, and moral of the citizens of the Nation. In 1964, the same year that the Economic Opportunity Act was passed, another important decision with direct relevance to the question of poverty in the United States of America was made, namely, the decision to reduce federal taxes by twelve billion dollars. Some of the participants in the discussion that led up to this decision had vigorously argued that the government "surplus" share of the rapidly expanding gross national product should be used in ways to improve the social as well as the private economy. These voices did not prevail, with the con- sequence, as one commentator noted, that "a major government measure (an in- come tax cut) that cost twelve billion in terms of lost revenue channelled not a cent to those most in need of additional funds." Instead, "the tax cut, in addi- tion to intensifying inequalities in income, resulted in a relative reduction of the means potentially available for the elimination of poverty and deprivation." The first two years of the OEO program has produced a number of modest suc- cesses: in the expansion of social services, the creation of "new careers" for the poor. and in the increased involvement of the poor in community action plan- ning and in policy. However, while these new innovations are important and efforts in these areas need to be expanded, these achievements represent only one aspect and perhaps not the major one, of a real war on poverty. None of these programmatic approaches, of themselves, substantially move the im- poverished into the main stream of the American economic system. By and large, the poor are still circumscribed within certain limited labor force cate- gories and even when employed are either underemployed or in dead-end jobs. Unquestionably, there is a need for a major reorganization of the Office of Economic Opportunity and for substantial changes in its policies and program focus. Such changes. of whatever form, must be designed to enable the Office of Economic Opportunity to address itself to the following fundamental issues that are at the basis of the development of genuine economic opportunities for the poor. (1) Substantial reduction of the unemployment rate among the poor. Any realistic and serious program for the eradication of poverty must have at its heart a plan for the achievement of at least the same rate of employment of the poor as that of the more affluent members of the society. What some econo- mists have been labeling a full or high employment economy during the last several years has been an economy in which the poor, and particularly the non- white poor, have actually remained unemployed at rates approaching the depression level. Manpower training and re-training programs are futile in an economic situation in which no provisions are being made at the federal level to reduce the unemployment rate below the current four percent. (2) This sponsorship and development of locally based, independent, com- mercial and community services enterprises can maximize the impact of federal moneys expended in anti-poverty, model cities and federally supported local projects. (3) Non-stigmatizing income maintenance programs for persons incapable of work. PAGENO="0627" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1465 In summary, what is being recommended as the new prime focus of the Office of Economic Opportunity, is a systematic application of profit and non-profit corporate concepts to the development of social and community services and the expansion of economic opportunities in our impoverished communities. This will call for, among other things: (a) the development of strategies that link non-profit organizations ad- ministering anti-poverty with profit making organizations. (b) The redirection of a portion of governmental credit and purchasing power into businesses and other enterprises owned and operated by people in poverty communities. These changes would bring about a substantial shift in emphasis away from welfare services and toward economic development. The aim would be to achieve a multiple pay-off of the poverty dollar whereby it not only pays for services rendered but also stimulates the economic development of the poor. Two recent OEO grants in the area of ghetto and rural economic development give an indication of an exciting new direction that should be taken on a larger scale by OEO. These are the Southwest Alabama Farmers Cooperative (approved over the veto of the Governor) and the Harlem Economic Development Corporation. This promising plan for the economic development of Harlem stipulates that four things will be required to improve the income and economic situation of Harlem's residents, namely: (1) A source of venture, capital such as a Small Business Investment Cor- poration capitalized jointly by community investors and the Department of Commerce, and controlled by the local small investors. (2) A sophisticated research program which will identify feasible indus- trial and commercial enterprises which can operate profitably while providing jobs for Harlem residents. (3) A non-profit management consulting and managerial skills training program for community residents recruited to operate these enterprises. (4) A network of new community services corporation, e.g., day camps, career clinics, etc., which will dispense needed services while providing jobs for Harlem residents. Under this plan, control of the business enterprises and of the profits would remain in the hands of the SBIC. A portion of the profits would be reinvested to achieve the expansion and diversification of the enterprises~ and the remaining portion would be. used for the establishment of the non-profit community services corporations. If the OEO could shift from its present programmatic emphasis to that rec- ommended here, there is no question that it would gain increased relevance and would be the vital arm of the war against poverty. Failing that, there appears to be no significant purpose that could be served by this organization in a' true war against poverty. Mr. MARSHALL. I am advocating a major reorganization of the Office of Economic Opportunity to allow for substantial changes in its programs and program focus. Such changes of whatever form must be designed to enable the Office of Economic Opportunity to address itself to the following fundamental issues that are at the basis of the development of a genuine set of economic opportunities for the poor: 1. Substantial reducton of. the unemployment rate among the poor. Any realistic and serious program for the eradication of poverty must have at its heart a plan for the achievement of at least the same rate of employment of the poor as that of the more affluent members of the society. What some economists have been labeling a full or high employ- ment economy during the last several years has been an economy in which the poor, and particularly the nonwhite poor, have actually remained unemployed at rates approaching the depression level. Manpower training and retraining programs are futile in an eco- nomic situation in which no provisions are being made at the Federal level to reduce the unemployment rate below the current 4 percent. PAGENO="0628" 1466 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Sir, I would like to refer you to a statement I found in doing re- search for this ~paper in the declaration of policy in section 1 of the Housing Act of 1931 which reads as follows, and' I think this is a most significant statement in pointing tl1e way to what I would call real economic development programs for the poor. The statement reads as follows: It is hereby declared to be the policy of the United States to promote the general welfare of the Nation by employing its funds and credit, as provided in this act, to assist the several States and their political subdivisions to alleviate the present and recurring unemployment and to remedy the unsafe and un- sanitary housing conditions and the acute shortage of low income, in urban and rural nonfarm areas. that are injurious to the health, safety, and morals of the citizens of the Nation. My contention is, sir, that simply to begin implementing on a~ large scale the provision of that act of 1931 could have a substantial impact on tile conditions of the poor in our society. I think that too often we evolve these programs, some of which are good, some of which are not good, when there are ~lready in the legislative acts of Congress which if only used fully could reduce the rates of the poor of poverty that we find in our society. 2. I am advocating the sponsorship and development of locally based, independent, commercial, and community services enterprises can maximize the impact on Federal moneys expended in antipoverty, model cities, and federally supported local projects. 3. Nonstigmatizing income maintenance programs for persons in- capable of work. In summary, what is being recommended as the new prime focus of the Office of Economic Opportunity, is a systematic application of profit and nonprofit corporate concepts to the development of social and community services and the expansion of economic opportunities in our impoverished communities. This will call for, among other things: (a) The development of strategies that link nonprofit organiza- tions administering antipoverty with profitmaking organizations. (b) The redirection of a portion of governmental credit and pur- chasing power into businesses and other enterprises owned and oper- ated by people in poverty communities. These changes, would bring about a substantial shift in emphasis away from welfare services and toward economic development. The aim would be to achieve a multiple payoff of the poverty dollar whereby it not oniy pays for services rendered but also stimulates the economic development of the poor. Two recent OEO grants in the area of ghetto and rural economic development give an indication of an exciting new direction that should be taken on a larger scale by OEO. These are the Southwest Alabama Farmers Cooperative-approved by over the veto of the Governor-and the Harlem Economic Develop- ment Corporation. This promising plan for the economic development of Harlem stipulates that four things will be required to improve the income and economic situation of Harlem's residents, namely: 1. A source of venture capital such as a small business invest- ment corporation capitalized jointly by community investors and PAGENO="0629" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1467 the Department of Commerce, and controlled by the local small investors. 2. A sophisticated research program which will identify feasible industrial and commercial enterprises which can operate profit- ably while providing jobs for Harlem residents. 3. A nonprofit management consulting and managerial skills training program for community residents recruited to operate these enterprises. 4. A network of new community services corporations, for examplo, day camps, career clinics, et cetera, which will dispense needed services while providing jobs for Harlem residents. Under this plan, control of the business enterprises and of the profits would remain in the hands of the SBIC. A portion of the profits would be reinvested to achieve the expansion and diversification of the enter- prises and the remaining portion would be used for the establishment of the nonprofit community services corporations. It is in this kind of a dynamic way that I think that we can begin to break the cycle of poverty so that people who are in the impov- erished conditions are not merely receiving handouts but are begin- mug to acquire equity and therefore are able to fend for themselves. You might fully agree that is within the American tradition. I think if the OEO programing and policy emphasis should be shifted here, there is no question but tha.t it would gain in increased revelance and would be a vital arm in the war on poverty. Failing that it seems to me no purpose could be served by this Agency in a true war on poverty. Chairman PERKINS. What caused you to leave your post as Director of I-Iaryou? Did you feel you were not accomplishing what you should be accomplishing in the }-Iarlern area? Mr. MARSHALL. That, too, sir, but more importantly I had the op- poitunity to become a Dirctor of the poverty program and in the Haryou program I was the third man down. Chairman PERKINS. You were satisfied with your accomplishments at Haryou? Mr. MARSHALL. I think what happened at Haryou was again that theme were not sufficient inputs. What I mean by that, and I dOn't want to overstress this point, but if you have a program which is offering mainly jobs in the service sector and if you have many, many people seeking work, naturally, there is going to be a kind of dis- tortion here because since many peopieneed jobs, the question becomes one of hiring people and not necessarily concerning themselves with whether or not they are sentimentally equipped and otherwise to do community service work. Chairman PERKINS. Were you satisfied with the results obtained with that type of program in Paterson, N.J.? Mr. MARSHALL. No, sir, I was not and for the reason that the main thing the poor people in Paterson needed could not be provided by any stretch of the imagination by the poverty program that we got funded in Paterson. Paterson, as you may know, is a very old city with ~ erv deteimorated `tnd dilapidated housmo in the poverty disti icts `md there was nothing at all that was available through the Economic Opportunity Act programs that could address that problem and this was a very big problem of the poor people. PAGENO="0630" 1468 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Paterson, again as you may know, is a low-wage area, many sweat- shop-type enterprises- Chairman Priuiixs. I agree with your philosophies that the prob- lem is much larger and greater than is being undertaken by the OEO but considering the budget limitations in times likes these today, would you then recommend dismantling OEO? Mr. MARSHALL. What I am recommending is a kind of tooling up program. I believe there is going to be and there have to be after this war is over and the Congress can begin to appropriate the kinds of money that should be going into model cities and other types of programs, a massive redevelopment of the ghetto areas. I believe there should be a very key role played in this development by residents of these ghettoized communities which would then indi- cate that certain efforts should now begin with moneys presently avail- able which would begin to equip these people to participate more effec- tively in the redevelopment and rebuilding of their communities. I submit to you, sir, that these are not mainly efforts in the social welfare area although certainly I am saying there is a need for social welfare services but more in the economic development area that I have tried to sketch out here today and that probably is best illus- trated by the recently funded program in the Bedford-Stuyvesant district. Chairman PERKINS. You are simply stating we need a massive attack on the roots of the poverty from the standpoint of an adequate hous- ing program in the slums and in the rural areas of the country, a massive education attack to provide good educational opportunities and better teaching personnel and a~ massive community facilities at- tack, better comnmnity facilities of all types, water and sanitation, expansion of community recreati on. That is the program that you are talking about and you are wonder- ing whether the Office of Economic Opportunity is planning with other governmental agencies in that direction so that if world condi- tions improve we could make that massive attack promptly. Do I understand your statement to he along those lines? Mr. MARSHALL. That is correct, and I would only add that I see certain opportunities to begin if some of these limited funds are made available, but some of them are not being as wisely spent as they could be. The money that goes into the Job Corps program, I think, could be more effectively spent to provide, incidentally, the same kind of train- ing opportunities for young people. I recognize t.here is a limited amount of money and we know the job is much bigger than the presently available funds can do but there is certainly the opportunity to use what is now available in ways that can begin this massive job, and this was the point I was making. Mr. GOODELL. I appreciate your excellent statement and let me state for the record it was a very stimulating and provocative experience participating on a panel with you in a discussion of the new generation. I should give credit on this public record that the Council of Eco- nomic Opportunity Advisers as we call it, derived from a suggestion made by you in that panel discussion. You pointed out the need for PAGENO="0631" ECONOMIC OPPORTTJNITY ACT AMENDMENTS OF 1967 1469 a high level agency that would chart; the course in the war on poverty and would coordinate a variety of programs that exist in the Govern- ment today and which would also point out the need for other pro- grams in areas where we are not really reaching the poor and the needs of the poor. You in your discussion called it the Council on Poverty. The name was rather irrelevant and you said that you thought it ought to have the stature of the Council of Economic Advisers. I appreciate very much the contribution you have made here today. Let me ask you a couple of questions with reference to your view of the Office of Economic Opportunity today. I notice that you state on page 15 reference to OEO, that most of the programs it now adminis- ters could be run as poorly by traditional agencies. Is it your feeling that there would be any particular damage done to programs such as .Headstart and the other programmatic aspect of OEO's operations, if they were transferred to existing agencies? Mr. MARSHALL. No, I do not, Mr. Goodell. I think once well estab- lished I see no advantage to keeping this in an innovative agency such asOEO. Chairman PERKINS. You are saying it should be transferred? Mr. MARSHALL.. I would say once the program has been stabilized and becomes more or less a traditional program which I believe Head- start is, there is no especial benefit to keeping it in what should be au innovative agency. I think that creates distractions. It turns the main attention from what should be the main job-innovation. Chairman PERKINS. Do you agree that OEO is an innovative agency in getting Headstart off the ground? Mr. MARSHALL. There is no question about that. Chairman PERKINS. It is difficult for me to understand when we aic in the process of getting it off the ground in some areas throughout the Nation, in some other areas they do not have it off the ground yet. If it is innovative and if it is successfully getting off the ground, should we risk program interruption and expansion by transferring it at this time? Mr. Q1TIE. I would say to the chairman, if the Congress had followed the recommendations of Congressman Goodell and me, Congress would have established a preschool program. We wanted to put $300 million into it. If this.had been done, we would have zeroed in on the areas of the country that needed it. I think we could have accomplished it without OEO but because the Congress did not support a policy in favor of OEO preschool program, both Congressman Goodell and I commended OEO for getting it started. This is the only way it could be done. Now we come to the. Follow- through program, in which there is no Federal or congressional policy being established. Again, they will attempt to establish it in an inova- tive way by themselves. We believe the Congress should now move ahead in both the pre- school and Followthrough or as we call it the early years program, and set the policy and make this an established program. I think that we will accomplish a great deal more in this way. I commend you `for your articulate way in expressing yourself, both PAGENO="0632" 1470 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 in this booklet here which carries your remarks at the time you met with Congressman Goodell and in your statement of this morning. Mr. 000DELL. Do you hold the view, Mr. Marshall, that innova- tion is difficult or impossible out of the existing agency? Mr. MARSHALL. No, I do not; because I see some of the same guys in OEO in some of these existing agencies and I think it depends on the imtiative of the top people. If the Director is a good man, I should think his agency will reflect this. Mr. 000DELL. You have been active in the poverty programs and in the frontlines of the war in communities as a community action director. You also are very active in social sciences and now are associ- ated with the newly created Metropolitan Applied Research Center. I would like to ask your opinion thus with reference to the Job Corps. Mr. MARSHALL. My feelings about the Job Corps are based on the research I did when I was I was in the research center at the Colum- bia School of Social `Work. Then we were conducting studies of young- sters from poor neighborhoods in institutional settings. These were so-called training schools. One of the things that became pretty clear to us, whatever school we looked at and whatever the treatment and training procedures were, inevitably because of the question of maintaining order, they developed something we label "a delinquent subculture" with certain youngsters having delegated to them, in effect, the role of running and controlling the effect. Mr. GOODELL. You are referring to putting them all together? Mr. MARSHALL. Yes. I don't think this is good. I think the bulk of the studies of institutionalized situations demonstrates that you create an artificial environment and very often an environment with detri- mental attributes to it and, therefore, you have to be more concerned with some of the detrimental aspects than with some of the positive goals and aspects of the program. I think a disproportionate amount of the energy and time and attention of the administrators of these kinds of organizations have to go into these questions of order and discipline and I think this is completely unnecessary because the same objectives of trainmg or rehabilitating could be obtained in situations, probably smaller situations and probably more familiar situations than the home com- munity where you do not create these additional problems which stein from setting up an artificial and large institution in an unfamiliar setting to the voimg people. Mr. GOODELL. Do you think it would be preferable to have an inte- grated-type center in a community itself? Mr. MARSHALL. Yes; I always looked for a multiple payoff in pro- grams. If you have one particular emphasis which the Job Corps would be to train these young people for good jobs, you can also with the same program have other impacts. For example, if these kinds of centers were set up in communities like Harlem, immediately you begin to build up in these places community institutions of a kind that serve to stabilize and give a life and vitality to the community. It strikes me that this could be a kind of multiple payoff of a pro- gram that could have a primary aim of training young people but PAGENO="0633" ECONOMIC ,OPPORTUNITY ACT AMENDMENTS OF 1967 1471 it would have many other ramifying effects if it were placed in the home community, I believe. Mr. GOODELL. The suggestions you make in your presentation, I think, are extremely to the point. You arc suggesting, in effect-if I understand you correctly-that if all OEO is going to do is what it now has under its administration, you could eliminate OEO and there would be nO great loss. You are suggesting that OEO should take on these new assign- ments that you are advancing and then it might have a valuable function. Is that a fair summary? Mr. MARSHALL. Yes. Mr. GOODELL. The existing programs that OEO is administering, you feel, could be transferred without damage to programs in the existing agencies? Mr. MARSHALL. Those that are already stabilized; yes, sir. I believe there is a great vital role in the innovative programs and nurturing them until such time as they become traditional and stabilized pro- grams. Mr. GOODELL. Since you were the originator of the idea originally, could you give your views as to why you feel something similar to the Council of Economic Advisers should be set up in this area, such as a Council of Economic Opportunity Advisers? Mr. MARSHALL. Some $30-odd billion touches upon the lives of the poor and are in some way related to this poverty problem. There is. a need for a high-level council that would be directly talking to and advising with the President-a high-level council of persons who had power to clout who could look at all of these programs which are here, there, and everywhere, from the point of view of the total impact and the coordination to bring about a greater impact to make for a more effective and efficient use of~these dollars which are presum- ably and allegedly affecting the lives of the poor. Mr. GOODELL. You are not suggesting anything like an advisory committee or some of these large groups we now have? Mr. MARSHALL. No, this would be a small and tough one and I would say one with power. Without the power from the President it would be a futile body, but it would be a small and very toughrninded group of persons with a very efficient staff who could look at all of these programs and specify from the point of view how they are or are not affecting the lives of the poor people. Mr. G0ODELL. This would be a full-time council something like the three-man Council of Economic Advisers with a full staff of top pro- fessionals who, in effect, would be looking at all of the Federal pro- grams, to eliminate poverty, in this county; how we can improve and innovate with new programs and eliminate some which are not working. Is that what you are saying ~ Mr. MARSHALL. Precisely. . Chairman PERIcINS. Before the second bell rings, I want to get back on Headstart. . You mentioned getting Headstart off the ground was innovative. I am sure the witness realizes there are certain areas-for instance, in Mississippi-where we would not have Headstart programs but ~hrough OEO. PAGENO="0634" 1472 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Would you still suggest. in the circumstances that Headst.art be transferred to the Office of Economic Opportunity in certain areas where you say we want innovation, deprive the people of that inno- vative type of service? Mr. QUIE. That is an "Are you still beating your wife" type of question. Mr. MARSHALL. I would say, sir, that the Headstart programs and in those kinds of problematical areas would be an innovative type of program and, therefore, conceivably a part of the agency which would be putting in Headstart programs in areas like this area.. Chairman PERKINS. Is it not your best judgment that the OEO should remain independent presently in order to handle programs like Headst.art more effectively and so all the youngsters throughout. the country could take advantage of them? Am I st.at.ing your position there? You have me puzzled a little. Just how innovative is it? Mr. MARSHALL. I said in most areas of the country that I know of now this is a. fully a.ccepted program. There is no political pressure t.o eliminate it, in most areas. Chairman PERKINS. There are areas where it is not. Mr. MARSHALL. What I am saying is- Chairman PERKINS. It is entirely dependent upon OEO. In those areas where it is entirely dependent upon OEO, do you still feel that we should tra.nsfer it to the Office of Education? Mr. QuIR. Are you assuming the Office of Education is in league with the rednecks in Mississippi? Chairman PERKINS. That was not my question. Mr. GOODELL. You a.re setting up a st.ra.wman. Chairman PERKINS. I just want to know to what extent the gentle- man believes this innovative thrust is important to its success. He says the OEO was an innovative agency that got Headstart off the ground and there are still certa.in a.reas in this country where we would not have a Headstart program. Mr. GIBBoNS. Would the gentleman yield? Chairman PERKINS. Yes; I yield. Mr. GinBoxs. To show how innovative it is, the first eight programs were vetoed by a. Republican Governor of the State of FloricTa. Mr. QuiR. You don't think he could veto one from the State of Florida? Mr. GOODELL. In permitting a Governor to veto, you can permit him to veto from the Office of Economic Opportunity as well as you could from the Office of Education. The assumption in t.he chairman's question is unfair. Chairman P~KIxs. Until the program of Headstart is off the ground a.nd becomes a.ccepted through the country-I am talking about all areas of the country and all sections-you would recommend that it remain in OEO? Mr. 000DELL. He did not say that. Mr. MARSHALL. Hea.dstart is a particularly confusing example, sir, because already the Office of Education ~s conducting Headstart-type programs out of the- Chairman PERKINS. But you still give OEO credit for inauguratmg the program? PAGENO="0635" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1473 Mr. MARSHALL. No question about that. I think it should be stres- sed, I am by no means criticizing the OE'O totally. They have done many exciting things and as recently as 2 weeks ago when they an- nounced this Harlem economic development thing that I participated in and I was present when Mr. Shriver announced this program. Here, again, is a case in point of trying to move into vital and im- portant areas. Chairman PERKINS. Let me ask these gentlemen, Mr. Quie and Mr. Goodell, do you want to have the witness come back immediately after the quorum call? If not, we will finish with the witness. Mr. QUIE. I have further questions. Chairman PERKINS. We will recess for 20 minutes. Mr. Gibbons, I understod you were willing to come back and re- main as long as Mr. Quie and Mr. Goodell want to question the witness. We will recess for 20 minutes. (A 20-minutes recess was held for purposes of quorum call.) Mr. `GIBBONS. We will resume wit.h your testimony, Mr. Marshall. Mr. QuIR. Mr. Marshall, in this little booklet `~`New Generation" it says that you are the vice president for community affairs of the recently created Metropolitan Applied Research Center, Inc. Would you tell me a little bit of what `this organization is and what your work entails? Mr. MARSHALL. Yes. The Metropolitan Applied Research Center is a recently created organization. It is headed by Dr. Kenneth B. Clark. Some of you may know him. `He is an outstanding psychologist. He was quoted at length in the Brown decision-1954 decision against segregated schools-and has been active in a number of programs, I believe, of interest and relevance to this committee. He was the architect and I was fortunate enough to work with him in the design of the Ha.ryou program which was written up in the document known as "Youth and the Ghetto," a study of the lawlessness of intolerance. The center `has been established, to use Dr. Clark's phrase, as sort of the Rand C'orp. of the poor. We are conce.rned for the fact that on the one side many of the social researches that goes on' are what you might call shelf stu'dies. They are very good studies but they `don't see the light of day in terms of implications, in terms of being used. On the other hand, many of the so-called action programs do not really have the `benefit of sophisticated and searching research and study. So, it is action for its own sake. So, I would say community action is action of this willynilly nature. At the research center, we hope to get a closer contact with the social science field and particularly we are having reference here to urban studies and urban problems and the programs that are going forward at the local community level as wefl as at other levels so we begin to have a kind of approach where there is a direct `hookup and tie-in between really searching research and effective action programs. We are located in New York and our primary emphasis is on the metropolitan area of New York, `but we hope that we can begin to demonstrate that many of the techniques that have worked so effec- PAGENO="0636" 1474 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 tively in developing the war machine, if you will, by Rand and other such organizations, can with equal effectiveness be used in addressing problems of the cities, ghettoes, the poor, and the like. Mr. QmE. When did the center begin operation? Mr. MARSHALL. We really got going around the first of the year, although it was chartered some few weeks before the first of the year. Mr. QIJIE. When do you expect reports to be finished so recommenda- tions of the center will be available to people outside in order to know what we really ought to do in solving some of these problems of the inner city? Mr. MARSHALL. Dr. Clark is going to have a book published soon on the community operation programs. 1-lie studied a. number of them before the center got going and he testified before a Senate committee on his finding. I understand this book is going to be published in the next several weeks or months. Mr. QmE. Do your views and Dr. Clark's views coincide quite closely? Mr. MARSHALL. I don't know if I can say that. He is somewhat of a mentor of mine. I met him some 20 years ago when I was a student in his class at Hunter College. I was influenced by his work. I think, however, there are some areas where we do not see eye to eye, but in the main, I would say we do see eye to eye. Mr. QuIR. Who funds the center? Mr. MARSHALL. The Ford Foundation funds the fellowship and internship program. This program brings in people from two basic areas, from the universities, men on subbatical or short leaves and also from the civil rights organizations. They can come in and work alongside the other people on staff or develop special projects or simply have an opportunity to rest. and reflect. Then the Field Foundation funds, what we call the core research operation, and this is part of the operation that brings in specialists in areas like education, housing, manpower, and so forth, and they conduct a variety of studies which we hope are not, as I say, studies for their own sake but have fairly immediate action implications which can be transmitted to community groups, to local legislatures and gov- ernmental bodies, and hopefully can bring about needed changes. Mr. Q;uIE. How long were you Executive Director of the Patterson community action agency? Mr. MARSHALL. I started there in March of 196~ and remained until the end of 1966 when I left to go to MARC. Mr. QUIE. How long were you with Haryou? Mr. MARSHALL. Late fall of 1963 to 1965. Mr. .QmE. You were with Ha.ryou before it was funded? Mr. MARSHALL. Yes; when it was a creafture of the President's Coin- mission on Juvenile Delinquency and Crime. Mr. QUTE. I think your experience in the field establishes your ability to speak out. on programs that you have observed very closely as much as anyone who has come before this committee. Looking at the cornimmity action agencies, I assume that you have a feeling that community action agencies as such ought to continue. PAGENO="0637" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1475 I notice in this article you said that the failure of all community action agencies to provide jobs, group housing, and tangible economic op- portunities has led to a contamination and distortion of the services provided. If my assumption is correct, even though this has happened to the action programs, you still support the idea. I would like to have you then explain how a community action agency ought to function and perhaps you could do this in ~two areas, one in the huge metropolitan center like New York where you are very familiar and, secondly, in some of the smaller cities which you must have observed. Mr. MABSHALL. Yes, I would say although the model is not an exact fit, I would say that we should treat with the ghettoized areas, and I am mainly concerned with the cities-I don't know anything about rural poverty-but we shOuld treat the ghettoized areas as we treat undeveloped countries. I think this is a useful model to look at a' place like 1-larlemn or a place like the Hough district in Cleveland or the Watts district in Los Angeles as if, in effect, it was an underdeveloped kind of colonial situation and being to conceive of the kinds of programs that we would, in effect, mount if we were trying to develop this area. This is why I put a particular stress on what I call eèonomic de- velopment. I was very excited by the concept of economic opportunity. This *was before I learned of the service emphasis that was rarely there, because I am convinced that the conditions of people in this impoverished area cannot be substantially altered by social services most of which focus on the individual, either the individual person or the individual family. I believe that if we focus on the community as a whole, and I know that is a kind of global concept, but I think that we c'in spell it out a little bit If we focus on the community ~ts a whole, some things w e are seeking directly in the service-type programs can be accomplished in kind of an indirect way. One of the unfortunate consequences of the service approach is that many people in these areas just like other people do not like to be looked upon as `Cases, as a need of specialized sheltered-workshop- type programs and other nianifestations that they are being stig- matized or set apart from the restof us. Mr GIBBONS I think I underst'tnd what y ou do not like and I ~ ould like to get to what you think specifically would work. You described a program in Alabama that I am only vaguely famil- iar with from newspaper reports. Could you describe: why you think this is a good program and why you think it will work and then let's go to Harlen and let's talk about what you think would actually work from a constructive point of view in Harlem. Mr. MARSHALL. First of all, you are not talking about handouts to these people Mr. GIBBONS. Would you give a little ba~kgroimd about the Ala- bama program and then explain how you think' it `will work. Mr. `MARSHALL. I have not seen the work program itself. I have seen only the newspaper reports of the program. As I understand it, it is going to allow the local farmers there to set u~ a variety of cooperative enterprises, income-producing enterprises which they, themselves, will run and' manage. ` ` PAGENO="0638" 1476 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 These programs will allow them to join cooperatively together to sell and to raise and sell their products and to earn conceivably-of course, we know this is not always the outcome-but conceivably to run a profltmakmg operation in which they would have acquired equity and which will afford them an opportunity to manage, to run the operation themselves. Now, I think this is very important. Mr. GIBBONS. I assume when you talk aboutthis in Alabama you are talking about Negro farmers who probably could have, at least it is theoretically possible, under existing laws they could have formed co- operatives to do these things. Is there anything new there? Are we furnishing any funds? What specifically are we doing? Mr. MARSHALL. Again, I feel a little leery about talking specifics here because I hwve not seen the work program but I would imagine what is being supplied here which is not ordinarily supplied is. an amount of venture captial, some managerial assistance in terms of skills, training and, consultation services, technical consultation and perhaps a kind of support in terms of markets and what-not that would not ordinarily be available. I don't know specifically, though. Mr. GIBBONS. Let's go to Harlem specifically. You said that. you did not like the service type of programs and frankly I have reservations about them, too. I have said in the past that the equity-producing types of businesses and things of that sort were the kinds of things that people needed to escape from poverty, to build businesses, to escape that way, rather thami being told and counseled and further, educated. But would you be specific how we could do something like that in Harlem? What could we do there? Mr. MARSHALL. I would go back to the Haryou document, where we spelled out in quite great detail some programmatic approaches. By no means would I saythis would be the total answer, but one of the things we were talking abuot, because we had a concept of what we called cultural building, we said when you look at these disasters, ghetto areas, you found a dearth, other than perhaps the church insti- tutions, of locally controlled community institutions. One of the consequences of this is the feeling of powerlessness that we found so pervasive in Harlem and the apathy and despair which are byproducts of this. We felt there should be. developed a kind of seed capital that would be provided to the various groups. Then, of course, we were talking about youth programs because our emphasis was then on the youth. Developed would be youth enterprises that could be service agencies at the same time they were affording opportunities for young people to develop managerial skills and at the same time they were providing an income and conceivably coming up with a profit which, could then be turned into other programs which are not income-producing pro- grams. . Mr. GIBBONS. Are you talking about running, for instance, a depart- ment store? Is t.hat what you are talking about? . . . I~fr. MARSHALL. Yes, but we are saying in this kind of situation it would be of limited benefit to set up an entrepreneur who would be a PAGENO="0639" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1477 private investor deriving a private profit and even though black he would probably be taking it outside of the Harlem community be- cause he ~ ould not be li~ ing thei e We are saying if this same enterprise were hooked in, it would be run as the usual commercial enterprise with all of the business proce- dures, but then the earnings, the profit, if you will, could then be turned into developing other local community enterprises, for example, day care centers, which are very greatly needed in this community. Mr. GIBBONS. What you are talking about, then, is a closed corpora- tion that would be controlled by the residents of the area that would take its profits and reinvest it in community services that were needed there? Mr. MARSHALL. That is exactly it. The reason I say this is a tooling up for the big push ahead, I do believe that there is going to be massive rebuilding of these ghetto areas if only to keep the economy viable after the war spending ends. Mr. GIBBONS. Do you believe fundamentally these ghettos in them- selves are desirable? Should we move in America to make it possible to unghettoize people or should we attempt to keep them ghettoized? Mr. MARSHALL. I would say without question we should move toward the breaking up of ghettos and work for the development of an open and free society. I would add this is not going to happen simply because we wish it. I would add, also, that certain of the ghetto areas of our cities are very desirable areas in terms of their geography and other attributes and therefore we are not talking about the total dispersal of persons who are flow ghettoized there. This is a little subtle perhaps and I might be misunderstood, but I think there is a need for what you might call the internal develop- ment of the people in these ghettoized areas which probably can take place most effectively-I would insist on that-at the beginning if it were a kind of support itself, self-help operation. I think a lot of the despair and powerlessness that people feel in these areas can best be assuaged if they have the opportunity to run their own affairs and really substantial and vital affairs. I am not talking about sitting on community action boards. I am talking about running these enterprises, community service enterprises, local small foundations and the like. The importance of this, I think, stems from a danger of what I call the possibility of the new colonialism, and that is conceivably t.hat these massive new programs could come in, city rebuilding, and all kinds of new organizations from research and development corpora- tions all the way down to management corporations that would run the new housing and what not and still the poor and the ghettoized could be excluded from parts of participation here. So, although they would be getting the benefits of the new housing or might have some jobs at lower levels, they would still not be vitally participating in what I call the real American economy which is an equity economy where you have a feeling of participating by owning, by controlling, by sharing, in the goods and resources of your coin- murn'ty. What I am saying right now is what we `should be doing with the limited amount of money available is to begin to give people-and we PAGENO="0640" 1478 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 are doing this on a small scale and I am just advocating it on a much larger scale-to begin to give these people that are in these conditions the opportunity to learn how to manage business' to learn how to put together various kinds of corporate enterprises, to learn the taxing sys- tem and other ways that they can maximize the impact of their dollars. Mr. Q.UIE. I think you have put your finger on the key to the success of getting the people who are now in the ghetto to at least come out of * their helplessness and have a chance to move or make that geographical area into a viable, important part. of the city. You mentioned colonialism and this brings to mind what a friend complained to me about the three colonial systems which were operated in the world by Beigimn, France and Britain, and what they did. I am not saying this for the benefit of our British friends who are here but my friend compared it. with the Belgians who would move in and provide the services for the people. The people were never consid- ered as having the ability at all to take care Of their own interests and the Belgians did it for them. The French picked out certain individuals of capability, indigenous People whoni they would move into the government and worked with them. The British system was to educate all the people and turn the government over to them so that they could operate their own country as soon as the British moved out. Whether this is an accurate description of these three systems, I don't know. I don'L want to get into any diplomatic problems, but this is the comparison he used in relation to U.S. responsibilities now with the people in the ghettos mainly because of the difficult time the people have had in securing education. They are better educated than most people in colonial countries, and they surely should be able to assume the responsibility themselves. I think they have demonstrated they can do it when given a chance. But now we have the difficult task of relating community action to this move. You mentioned the Harlem Economic Development Corp. At least we have set up a structure where these people can express their ~Toices. We have demanded that they have only one-third representation on those boards. Whether that is a sufficient nuniber or not, it is hard to tell, but I personally have the feeling that their representation ought to be greater than one-third. In the rural areas we gave cooperative extension boards and soil conservation boards or the supervisors or ASCA boards 100 percent representation and looked upon them as having the ability to operate them and select them and hire profes- sionals to work with them who had studied and prepared themselves in the field. I still have a little question in my mind. I think it is extremely help- ful what Congressman Gibbons asked you about in an effort to bring into context the picture of the community you would like to see. How do you enable a community action agency really to be viable in the areas or "economic development," and "economic opportunity," as you would put it? Could you tell me how yoti could make the community action agencies that viable organization? Mr. MARSHALL. One of the things I would begin doing is unearmark a lot of the dollars that are now presently earmarked which could then PAGENO="0641" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967. 1479 release use at the local level by the community agency money which now can come in only as a legal service or some other categorical-type program. Then I would say in Harlem where we are going to have this work done it would be controlle4 by Columbia University workshop de- velopment and another workshop at the new school for social research. There will have to come in guys who are pretty expert, guys who are economists, who are industrialists who can do a real search of the real economic possibilities of the local area. We are not talking about sheltered, protected enterprises although we could conceive of a time at the beginning, since there is a kind of subsidy or since some of the people working in i~he program might be supported out of funds of the Department of Labor, in effect this is a kind of subsidy of a budding, commercial enterprise, but after a sys- tematic look at the local economy, some of the deficiencies, for example, in Harlem, we know even though most of the people are poor there, there is coming into Harlem in terms of income something in excess of $350 million a year. We know that because there is a great shortage of retail outlets in Harlem that most of this money goes out of the community almost im- mediately, Of coui~se, people will continue to shop at places that are downtown but this is not to say if you did notldevelop in the local com- munity other smaller retail places that a good amount of that moi~ey would remain to be circulated mOre than once in the local situation there and creating jobs and so forth, training opportunities and so forth. Now, that is one phase of it. .. The commercial is dnly one phase and we are certainly not talking about self-contained economy. This is ridiculous, of course, but we are talking abOut more of the dollars. which get spent outside of that area now being spent and circulated once or twice or three times before it goes outside. Then, if these commercial and business enterprises are organized on a community corporate basis, rather than a private entrepreneur basis, then some of the profits if any, and at the beginning, of course, we would not look for large profits out of these, but then some of the profits could begin to go into community~ service enterprise services of various, kinds and, of course, the most obvious would be a day care corporation which~ would have a number of these places, qualify- ing, incidentally, for public funds at the local level. We know, for example, that one of the deficiencies of people in the ghettoized areas is that they do not have the kind of private service institutions, they don't control, the kind of private welfare and. healthY service institutions which can qualify for public money. A great bulk of the private agencies' in New York City are sup- ported almost 100 percent by public funds cOming from the. city and the State So, what we are saying is: that there are people who conceivably could be organizing these agencies, supported in part by the earnings from the commercial enterprises they. control, but also then' having agencies which could qualify for, funds which' would come out of the. public sector. .`` . . , 80-084-67-pt. 2-4i PAGENO="0642" 1480 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 In other words, I am saying ways of organizing in corporate ways the way you set up institutions with contracts and control and manipulate and use dollars. Of course, here we are talking about the good of the community, but I believe the principles are the same. Mr. Qun~. You speak of versatile funds enabling the community action agencies to be more effective. What about the Federal money that is available through HTJD and other loan money? Do you think it would be wise to channel some of that money through community action agencies so they actually would have an effect on their community? For instance, I am thinking of housing money. If the people in the community action agency had a voice in this area rather than the city fathers, perhaps it would be used in a way to really benefit these people rather than as happens so often forcing the Negroes out while they prepare the area for the middle or upper income level. Mr. MARSHALL. I agree with you on that 100 percent. Mr. Qtm~. How do you identify a community in which there is only one ghetto? I think we can understand it there. There is the community in New York, and we could say the same thing of Los Angeles. Mr. MARSHALL. In New York, I think, they are isolated and when I say "them", I am talking about the city human resources agency, the city agency running the poverty programs. They have about 26 poverty areas, the best known of which, of course, is Harlem, Bedford- Stuyvesant, South Jamaica, and so forth. These are areas where you can demonstrate that the bulk of the people are receiving incomes at or below the poverty level. The indexes of social pathology are very high-juvenile delinquency, infant mor- tality, and so on. There will be some overlap but in most cities with which I am familiar, those areas can be sharply delineated. Mr. Qum. In those areas, who would select the imbrella for the community action agency? Mr. MARSHALL. We are having growing pains and we have to have action at that level. I do not say we could have come to where we. are now without the problems we are seeing. I think it is a natural growth and development process. For a while some of these agencies will be dominated by special forces, you might say, `but this is only for a while. I think as people get the opportunity-this is why I am insisting on `the development of a number, not just one community agency, but a number of subagencies, corporate structures that would be having their own board of directors that might feed into an interlocking directorate at the feed. Mr. QuIR. Not an independent agency? Mr. MARSHALL. Would you have people interested in a particular piece of the action, knowing more about that and getting greater con- fidence and if they can learn about this, they can take' off a little time and learn about something else. I think it is a natural development `that is somewhat chaotic and sloppy but I don't see how you can avoid it. Mr. QrnE. If this position evolves, do you anticipate. all the people PAGENO="0643" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1481 on the community action agency would be i epi esentati~ e of subagencies or at least selected by the people f. that designated community ? Mr. MARSHALL. I think the poor recognize certain deficiencies which would have to `be made up by people who are not poor. Mr. QuIR. I think we ought to first understand what I am talkmg about. When I say representatives for them, I don't necessarily mean the poor people are the representatives of the poor but I understand they would select them. Mr. . MARSHALL. Yes; I would agree to that. Mr. Qun~. You think they should be selected by and from within the community area? Mr. MARSHALL. They might not necessarily live within the area. I know some very good and effective people on the board of the Harlem agency who are not Harlem residents but~ are doing very effective work. Mr. QUIE. Who $elects them at the present time? Mr. MARSHALL. There is a change coming about. Before it was a closed corporation and, in effect, they selected themselves but in the future there will be what they will call a community corporation. These people will have to be elected by the community at large. Mr. Q1I[E. I would like to move on, if I may, to the Job Corps. Again, going back to this book the "New Generation," some of us have very deep concerns about the Job Corps. In fact, I was kind of upset about the pattern that was used; namely, the old CCC camps, which supposedly were successful. I remember I took a look into the CCC camp because I only had my memories as a youth abou.t them. They never had any: great reputation where I came from, and I noticed from the last study on.them, two groups I have in mind thought they should be continued. Those organizations are the Daughters of the American Revolution and the National Association of Manufacturers. I noticed what you said about it here in the debate, in the discussion, and in the meeting you had. You say: The bind has been that the OEO, to demonstrate some quick impact, has itself gotten involved in programmaties. If you analyze a lot of these programs, they're nothing new. Some of them are really reactionary, like the Job Corps-that's just a throwback to the COC's of the 1930's. And, if you really look at the end results, there's nothing significant to point to as an outcome. Those are pretty strong statements. I noticed earlier that you said: I would advocate that the Office of Economic Opportunity-and I insist on stressing those last two words-be rid of all these distracting, programmatic involvements it now has. OEO latched onto Job Corps against the advice of many serious thinkers in the field. All of the research that had been done for decades before would have indi- cated the irrationality of segregating the disadvantaged youth and putting them into an institutional situation where you have. auomatically created a delinquent subculture. And yet you're desperately holding onto this lousy, terrible program because you already have a vested interest in it. Mr. MARSHALL. That was under the heat of discussion, I don't usually use that type of language. Mr. GIBBoNs. Would the gentleman yield at that point? Mr. QmE. Yes; I yield. PAGENO="0644" 1482 ECONOMIC. OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. GIBBONS. The gentleman raised a very interesting question. There was mention of this dissolution of the ghetto and you come right back and what we really have to do is strengthen the viability of the ghetto. It seems to me it is conflicting. Maybe I don't thoroughly. understand it. You say strengthen the institutions of the ghetto to make the ghetto hold together more and yet you have the subculture aspect. Would you explain that a little bit? Mr. MARSHALL. The guy who would run one of these organizations would not do so indefinitely. He may qualify more to run into a mid- dle management job for General Motors or one of the other ordinary business organizations at which point more likely than not he would elect to move out of Harlem and could afford to move into nonsegre- gated suburban areas. As I see it, we are not now offering effective opportunities to enable people to move out of the ghettos, to develop the skills on the large scale; of course, there is always a trickle of persons like myself who were fortunate to get a good education and can move out. I think that is probably oniy about 10 percent. I am thinking of new areas where it would make it possible for a great number of people. There are almost 500,000 blacks in Harlem. Harlem is one of the best areas in terms of the topography. It is the only area where the granite goes down several hundred yards and so forth. It is really the best area in the city left for development. What I am saying is that even if we wanted to, we are not going to disperse all of the blacks out of Harlem. I think there is a vital role now for the people in Harlem to begin this process, which is not locking them in but giving a substantial number of them skills which are marketable not only in the local com- munity enterprises but in the largest society. So, in that sense, this approach is not locking people into the ghetto but in effect making the ghetto more desirable as an area conceivably so that others might desire to move in and also at the same time devel- oping skills for people that makes it possible for them if they wanted to leave the ghettoized Harlem area. I live in Harlem and have no intention of leaving but some people may want to leave. Mr. GIBBONS. You are talking about starting work with people who already have some pretty good skills and backgrounds and education. You are talking about making managers and middle managers. You are talking about somebody who already has something to sell, are you not? For instance, you are not really talking about a person who has attained a 6th grade or 4th grade performance. You are probably talking about somebody who has already gradu- ated from high school. Mr. MARSHALL. We are definitely talking about them, sir, but I would add another category and I base this from my experience on the so- called fighting gangs in New York back in the 1950's. When I worked for the New. York City Youth Board at that time there was a problem with these bopping or fighting gangs. The last time I testified before a congressional committee it was before the Senate Juvenile Delinquency Committee. PAGENO="0645" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967' 1483 The thing that impressed me about these youngsters and `they were presumably the wildest and most delinquent kids in the city is when you get to know these youngsters, and the majority of them were `drop- outs, when you `got to know them you immediately saw the futility of trying to measure their intelligence by the usual methods. They would have 67- and 80-type IQ's on paper, the moron type, but up here they had it and just the way they were able to organize these large gangs and deploy their forces so that many of them were excellent administrators, managers, and so forth.' What I am saying is that a lot of these people could not go to the Harvard School of Business but in effect a lot of the things going on would be the same thing. They are concrete minded. They want to deal with something that is real, not abstract and conceptual, and I think it could be quickly demonstrated that you could pass or go below the first type you are talking about and these are the underemployed people, like the post office people, who should `be managing the shop. Yes, we would perhaps start with them, but I can see going pretty far below that level in terms of people who don't have high school diplomas and the like. They still have certain basic abilities and `skills which are hard to see right now. Mr. QrTIE. Next year they are asking for $295 million for the Job Corps. I know we have about $150 million put `into improving the capital assets of these Job' Corps centers. People `don't like to close up a bunch of camps after putting that kind of money into them. But how do you think this group of young people, the highest' per- centage of them being young men even though there are some women's jobs, could most wisely use that $250 million `to have the. greatest im- pact on the real tough cases? Mr. MARshALL. I would use it at the local community level and I would organize training centers. I would hook some of the kids into the kind of enterprises I am talking about as trainees. In effect, then, you see you `are subsidizing the enterprise because you are paying the kids so the salaries `don't have to `come out' of yOur `earnings.: It is that kind of interlocking thing that I see makes for a bigger payoff of the Federal poverty dollar. If you put' these capitMi assets out of `the woods, it certainly is not improving the conditions of Harlem. ` ` ` ` Then when you look at the dropout rates of `the Job Corps, you wonder what it is doing for the kids involved, too. At least at the local situation you are putting in certain kinds of investments, just brick and mortar types of things which would make it a better community in which to live.. Mr. QmE. Do you think that these young people could live right in their `own environment and there would be no need for movmg them into a different type of residential area? ` ` Mr. MARSHALL. I don't see the need for it. Mr. QUIE. If a change were necessary, don't you think it would be better if they lived in `a residential type of training center close to their environment rather than shipping them `across the country, out to the woods, or to a strange city where they. are isolated from the type `of environment in which t'hey `have to live afterward? ` PAGENO="0646" 1484 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. MARSHALL. I would say there `might be a small residue of chil- dren who liked that kind of life and wanted to train to be forest rangers `and that type of thing and I would have a small part of the program for that type of work but I would also see it at the local level where it could have more of a payoff. Mr. QrnE. Have you `been able to observe some of the Headstart pro- grams in operation? I guess one of the resourcers who first started talking about the need to reach children at an early age was Dr. Deutsch. He suggested 3 years of age as a starting point and now he suggests earlier than that. Do you think this program is a viable one and should be expanded and strengthened? Mr. MARSHALL. Yes, I think there is no question but that the Head- start program is a successful one. I think everybody now is aware of the fact that the benefits of the Headstart program are rather quickly dissipated if the kids then go into the traditional kinds of ghetto schools. Professor Max Wolfe, I believe, in a small study demonstrated after a year or so it is hard to tell the difference between the children who went through Headstart and those who did not. In fact, some of the kinds that went through Headstart who expected a written educational experience were performing more poorly than the kids who did not have this advantage. So, Headstart must be built upon. There is no question about that and I see now where they are having follow-on~ programs to build on the Headstart experience. Mr. QmE. Even though health components and other types of ex- perience components are more important to the total as "amount of money spent on education do you not feel that the end goal to be gained from the Headstart program is to assimilate the instruction available to them in the schools' even though it may mean a change in the schools? That is the end goal that you want anyway, is it not? `Mr. MARSHALL. Yes, the end product is demonstrable ability to read and write many of the other things you are able to do `after you go to school. Mr. QuIB. Did you grow u~ in Harlem? * Mr. MARSHALL. No, in Bedford-Stuyvesant. Mr. QtrIE. You have made some pretty tremendous progress your- self. How did this come about? Were you endowed with `a silver spoon in your mouth? Mr. MARSHALL. No, at the time I did not think it was an advantage. I came from a rather strict fundamentalist religious family. My father is a minister and we had to do homework and go to bed early and all that sort of thing, which I hated at the time but there was a payoff. Mr. GIBBONS. I wish my children were here. You talk about building on these programs. I think many of these programs do have to be built upon or there will be no advantage derived from them. `Could you tell me in terms of dollars perhaps what you think would be necessary for the size of the annual investment that the United States would have to make to really have an impact? PAGENO="0647" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1485 Mr. MARSHALL. I am persuaded by figures of the order of the so- called freedom budget. I don't know if you have heard of the A. Philip Randolph budget, but we are talking about the expenditure of many billions of dollars per year-exactly how many I couldn't say, but I would say a lot of money. Mr. QtTIE. Not only for welfare and health centers, but also for doles. Mr. MARSHALL. I think we should look ways that the dollar will have the multiple payoff value and the service way is probably the least efficient way of achieving that multiple purpose. Mr. GIBBONS. There are some things on which you and I agree. One thing I have observed, for instance, in your urban renewal, it is not the poor people who gets jobs. It is normally some out-of-town con- tractor who brings along many of his own people or hires from the skilled craft trades the people who do the work. About the only thing that the poor get out of it is the fact that they have maybe $100 additional allowance or something of that sort. Now, how would your program differ from that? Mr. MARSHALL. What I am talking about, for example, is this: Our program would move to organize, for example, the local small con- tractors into a larger contracting firm so they would qualify. For instance, now there is a project going up in Harlem where the contract for the painting alone and this is not an extra skilled craft, but the painting alone is in excess of $2 million. Now, there is no local firm that could handle that type of thing, so naturally, the contract went outside the community and the people who are painting these projects are mainly workers who reside outside the home area. The only benefit of that is that they will be in these apartments when they are finished So here you begin to learn and build the skills to estimate the costs of jobs and the type of skills these people do not now have. Certainly, they can paint, but you begin to get together and support the~ technical assistance so these firms could qualify to bid on and acquire these jobs You are talking about these dollars going around a little longer in Harlem before they get out of Harlem and benefiting more people. Mr. 000DELL. In this panel session, Mr. Richard Boone made a com- ment and I would like your conunent on the comment of Mr. Boone. He warned of the possibility of OEO's developing such a vested interest in perpetuating and expanding its own programs that voices proposing new programs and strategies changes are muted by the agencies' bureaucratic and political investments. Then he went, on to say that he doubted whether the Office of Eco- noimc Opportunity can remain responsive to its policies, goals, and new operational strategies while continuing to expand its direct opera- tional responsibilities. Do you have any comment on that? Do you agree with it? Mr. MARSHALL. .Yes; I agree with it. This is why I say noninnovative programs and after 3 to 5 years if a program is stabilized I would not continue to call it innovative or a new program. PAGENO="0648" 1486 EcONOMIC~ OPPORTUNITY ACT AMENDMENTS op ~i ~ 67 I would say it should be sent off, to the relevant Federal agency to run from that point on because actually what you are doing, you are dealing with two different types of people in the same agencies-the kind of bureaucrats needed to administer large institutionalized pro- grams are not usually the people you need to create and prod and develop new things. You are really talking about two different kinds of people. Mr. GOODELL. Some `of us have the feeling that we can infuse ai~ innovative spirit through the involvement in the poverty program into some of these other agencies. How do you feel about that and do you think it is a worthy objective? Mr. MARSHALL. Yes, but I would say, Mr. Goodell, that top level' council we are talking about would be of key importance here because the natural tendency would be toward interia and business as usual and there would have to be this high level prodding eonstantly going on to assure innovative and creative thinking. Mr. GOODELL. In our proposal for Headstart, we transfer it not only to the,school system but we transfer it to be administered by local com- `munity action boards. The idea there is to keep the involvement, people to be served and the community action board, itself, would in effect control the distribution of Headstart funds. Does this sound like a workable and acceptable way of doing it? Mr. MARSHALL. That would seem to me to be a very important way of doing it. , Mr. GOODELL. Perhaps you might have clarified this for the record when I stepped out, but so there woulthi't `be any misrepresentation f your position, you would see no' harm in effect of transferring all of the programmatic programs of OEO to the existing agencies, but you are nottestifying in opposition to what OEO has done in the past and you arenOt trying to kill it but in effect you are saying if they can take on these new challenges, fine, keep OEO; but you wouldn't do any harm to the existing programs if you transferred them to another agency? ,~ ` ` ` ` Mr. MARsI''L. I would say that that section is the key type of thing that should be expanded and the Headstart and the Job Corps and all that at this point it seems to me could go to traditional agencies. Mr. G000ELL. YOu would feel that a substantial part of this would `be performed by a Council of Economic Opportunity Advisers? I think the Council of Economic Advisers nOw operates with about a $750,000 budget, three people ata very high salary,' professional people, the `right to contr~tct for research, evaluation studies, the power to hire people themselves, the budget to do this and they have a functioning office whose sole responsibility would be to develop data, the coordi- nating of the program', the charting of `the basic courSe that the Fed- eral Government should take with reference to the elimination of poverty. That is the concept that you have in mind, as I understand it, and that I have in mind; is that correct? Mr. MARSHALL. Yes; although it seems to me it would cost more than that amount. Mr. GOODELL. The amcinut we put in was $500,000 to get it started and that is flexible, and that would be the staff and the' rest of it, but in PAGENO="0649" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1487 terms of the research you are talking about, presumably, they would have the authority to make contracts for much larger sums. Mr. Marshall, I think your testimony has been very very helpful to us, and we appreciate your coming down and we are hopeful that we can incorporate some of your ideas into our bill. Mr. QuIE. I want to add to Congressman Goodell's comments that I think this has been one of the most stimulating mornings we have had and we greatly appreciate your interesting testimony, Mr. Marshall. Mr. GOODELL. We are adj ourned~ (Whereupon, at 12:55 p.m. the committee was adjourned, subject to call.) PAGENO="0650" PAGENO="0651" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 MONDAY, JULY 10, 1967 HOUSE OP REPRESENTATIVES, COMMIrrEE ON EDUCATION AND LABOR, Washington, D.C. The committee met at 10 n.m., pursuant to recess, in room 2175, Rayburn House Office Building, Hon. Carl D. Perkins (chairman of the committee) presiding. Present: Representatives Perkins, Green, Thompson, Hawkins, Quie, Goodell, Reid, Scherle, Dellenback, and Steiger. ~AJso present: H. P. Reed2 general counsel; Robert E. McCord, senior specialist; Louise Maxienne Dargans, research assistant; Ben- jamin F Reeves, editor of committee publications, Austm Sullivan, investigator; John R. Buckley, chief minority investigator; Dixie Barger, minority research specialist; and W. Phillips Rockefeller, minority research specialist. Chairman PERKINS. The committee wifi come to order. A quorum is present. We are delighted, Secretary Freeman, to welcome you to the committee today. You have been before this committee on numerous occasions and have made a constructive and helpful contribution to the committee's legislative efforts. I feel this is a most important occasion for `another uppearance on your part. I notice you have a prepared statement. You may proceed from the prepared statement or put it in the record or proceed in any manner you prefer, Mr. Secretary. STATEMENT OF RON. ORVILLE L. FREEMAN, SECRETARY OF AGRICULTURE Secretary FREEMAN. Thank you very much, Mr. Chairman. First let me say that I deeply appreciate your courtesy in reschedul- ing my appearance before you at this more convenient time. Some of you may recall that when .1 testified before this committee 3 years ago, I described the plight of Charlie Hamhn and his faimly Mr. Hamlin was a poor Negro farmer in Mississippi. He was trying to feed, clothe, shelter and educate eight children on a small cotton farm that brought, him only $365 a year-a dollar a day. Tins, plus $500 or $600 he and his family earned doing odd jobs in the com- munity, was the total income of the Hamlin family. Mr. Hamlin needed help. He needed counseling in farm management practices. He needed money to develop his meager farming resources. He had obtained' a small loan from the Department of Agriculture for sub-, sistence and day to day operating expenses. But be could not qualify for a larger loan-a loan that would have enabled him substantially to `improve hi's farm and his income. 1489 PAGENO="0652" 1490 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 I cited this case 3 years ago to illustrate the need for a new type of program, a program tailored to the circumstances of thousands of Charlie Hamlins throughout rural America. The Economic Opportu- nity Act of 1964 authorized such a program under title 111(A): Charlie Hamlin got his EO loan in May 1965. It enabled him to buy six head of beef cattle-arid to clear eight acres of land, put on fertilizer, seed for perma- nent pasture, and build fences to control grazing. This was precisely what he needed to get a toe hold on the economic ladder. That toe hold has since made it possible for Farmers Home Administration to give him a regular farm operating loan to buy more cattle. Mr. Hamlin now has 16 head of livestock and 18 acres of good quality pasture. The total family income this year, including earnings off a farm work, is expected to be $3,000-not very much, it is true, but triple what it used to be. In less than three years Charlie Hamlin's net worth has been doubled. He is slowly making progress. 1 cite: this case today to illustrate how the economic opportunity program is opening doors for low-income people all over America. Just this one phase of the act has already proved itself in terms of "opportunity" for more than 40,000 families and individuals in rural America It illustrates what Robert Browning wrote a century ago Oh the little more and how much it is And the little less, and what worlds away.~ The little more that the war on povery offers our low-income people makes a world of difference m their lives, their futures and their con tributions to society. : My testimony has three major purposes. First, I am here to support as strongly as possible your efforts to intensify and make more effective the Nation's war on poverty. To that end, I recommend urgently the extension of the Economic Oppor- tunity Act as strengthened on the basis of our 3 years' experience with it. Second; I wish to offer some suggestions on filling the gaps in exist- ing operations in the war on poverty and to support strongly the amendments proposed by the administration. Third, I want to sketch for you briefly some of the many effective ways in which the USDA is working with OEO and other agencies, public and private, in this war. I am sure that everyone in this room would agree that there is no valid excuse for continued widespread poverty in the midst of man- kind's greatest abundance. Nor is there any morally acceptable ra- tionale to justify continued widespread lack of opportunity in an economy that is the mOSt productive in history. Poverty and lack of opportunity are two sides of the same coin. They must be fought and vanquished together-largely with the same weapons. There is no point in developing job opportunities unless we also train people to fill them. There is little point in providing loans for the poor unless growing economic opportunity makes it possible to repay them. In the past~ few years the Congress has enacted many far-reaching laws and created imaginative new programs and services to ease the pressures of poverty and expand economic opportunity. I count it a real privilege to have a part in carrying out these pro- PAGENO="0653" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1491 grams under the dedicated, imaginative, and enthusiastic leadership given to this cause by Sargent Shriver. I am convinced that by any reasonable assessment the scene rn rural, America tod'Ly indicates that very significant foiward strides have been made. Two weeks ago I spent 4 clays examining rural development and poverty programs in Iowa, Mississippi, Alabama, and Indiana, seeing for myself some of the items we will discuss today. Along on the tour were officials. from HUD, HEW, OEO, Labor, Commerce, and. the Bureau of the Budget, as well as local USDA personnel. We wanted to see how our Federal programs are doing in rural America. We wanted to talk firsthand with the local, people who administer the programs. We. especially wanted . to. talk. with. the people the programs are designed to'help. We visited 18 different projects and developments and 11 individual. farms. We talked with 4-year-old children in Headstart. We talked with a 67-year-old senior citizen who works on a Nelson amendment project in Indiana-for the first time in his life he had a bank account. There was not time enough to see everything. But what we did see was impressive in scope, variety, and results. It ranged from a $7 million fiakeboard plant now being built at Oxford, Miss., to a small welding shop on a farm in Indiana, made possible through a $2,500 OEO training loan. . . . . .. . W1~at we saw was a start, a beginning-and a strong beginning, wit.h a growing momentum. It is indicative of what is taking place throughout rural America.. Today people in most of the Nation's counties have formed com- mittees to come to grips with local problems . of economic, social, and cultural stagnation. Scattered across this country, more than 3,150. community resources development committees and 562 .multicounty. committees.are working tod'~y on job development and training, housing, health, educ'Ltion, recreation, and other seri ices `md f'tcilities benefici'tl to rur'ml communities. , .. . , .. . : `. ` Thousands of young Americans are. finding new . opportunities through Headstart, Upward Bound, the Neighborhood Youth Corps, and the Job Corps. They are getting medical, and dental èare that many of them never had before. Millions of older peoplehave been helped to sign up for social se- curity and medicare. Many of them are finding an end `to loneliness in. centers for our senior citizens. Back of these accomplishments is a well-planned effort, spark~ plugged and coordinated by OEO. . OEO"s community action programs and the USDA's technical ac- tion panels are working together to help create a new dimension in rural life. ` The Community, Action Programs or CAP's, as you know, are proj- ect grants made, directly to public and private nonprofit groups in American communities. About,$253 million in CAP grants went t& rural communities in fiscal 1967. In fiscal 1968 this total is expected to rise to $402 million. PAGENO="0654" 1492 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Of the current total of 1,050 Community Action agencies more than 700 are in rural areas. They are making it possible for rural people to share in the benefits of many Federal programs which formerly were out of reach because the people did not know they existed or lacked the knowhow to take advantage of them. They are reaching and stirring hope in the poor who otherwise were hopeless and forsaken. The technical action panels, or TAP's, are an integral part of this effort. Many Federal agencies with programs intended for all the people lack the organization to reach rural America. Small communities lack the staffs of planners, engineers, lawyers, and others needed to take advantage of Federal services. The Department of Agriculture has at least four programs in every rural county, operated by the Soil Conservation Service, the Farmers Home Administration, the Agricultural Stabilization, and Conserva- tion Service and Extension Service. These agencies have joined to- gether to form county and State technical action panels. Other Fed- eral departments and State and local leaders have been invited to participate. The TAP's have the machinery to answer any inquiry in the field of rural areas seeking development. This means that any rural indi- vidual, family, or community seeking access to antipoverty or de- velopment services can get one stop service at the country level. In many counties the TAP's and CAP's, work in double harness. They me~t together, plan together, and pool resources. In this way they can reach the poor and the poorest of the poor. They are getting results. Planning and action programs are going forward not Ofli~ in individual counties but on a multi-county or regional basis as well. In the Elk River Valley in Tennessee, for example, 32 communities action centers are bringing health, employment, and education services to a 10-county area where ahnost half the families have incomes below $3,000. The Nei~hborhood Youth Corps, Headstart, and Upward Bound, are openmg doors of opportunity. Ninety-one persons, for- merly unemployed are now working and contributing members of the community-thanks to a manpower training program. The Community Action agencies, the State extension service, and TVA have assisted low income farmers to get into a fertilizer pro- gram-which helped boost farm income in the area by $1 million a year for the past 2 years. Programs of livestock improvement and forestry management are also underway. In the Upper Peninsula of Michigan, six multicounty community action agencies are using an umbrella agency, UPCAP, to provide expert assistance in administration and planning. UPOAP was formed with the help of the extension service in 1961. It was reor- ganized in 1965 to bring to the area the advantages of the Economic Opportunity ActS the Elementary and Secondary Education Act and other new antipoverty measures. UPOAP has fostered economic development, small business devel- opments loans, on the job training, NYC, legal services, and HTJD ginnts. Thirty-one neighborhood centers are providing counseling and referral services. Other available programs include Headstart, dental care, a workshop for the handicapped and a high school di~ PAGENO="0655" ECONOMIC OPPORT1JNITY ACT AMENDMENTS OF 1967 1493 ploma program, homemaker services program, a preschool program for. Indian children, and centers for senior citizens. Besides the people directly served by these programs, local schools, government, and industry are all involved in this community action. The rural loans program for individual and cooperatives author- ized by the Economic Opportunity Act and administered by USDA's Farmers Home Administration is proving particularly successful. This is the program which is helping Charlie Hamlin, whom I men- tioned earlier. Individual loans up to a maximum of $3,500 are made to finance small businesses and services and to improve low income farms. Be- tween January 1965 and June 30 of this year, 45,000 loans were made to low income rural families and individuals and to 854 cooperatives serving low income rural families. Almost $83.4 million has been advanced under both .credit pro- grams. Slightly over 10 percent went to cooperatives. Of the loans to individuals, a little over half financed investments in farming. The remainder provided capital for some 350 different types of nonfarm enterprises-including commercial fishing, small re- tail stores and service outlets in rural communities,, handling and hauling timber and farm machinery repair, and production of handi- crafts. Of the 854 cooperatives, four out of five are made up of small farmers who have joined together to purchase machinery, such as a cotton picker or combine that they could not afford individually. Rural loans are concentrated heavily in the Southern States and in Puerto Rico. In the South, 44 percent of the borrowers are Negroes. Nationwide, 5 percent are Indians Four of every five borrowers had family living incomes of less than $3,000 before they received their loans. When family size as well as income is considered, 90 percent of the borrowers again had incomes at or below the poverty level. The average borrower family spent only $1,700 a year on living ex- penses. Slightly over 11 percent of borrower families were receiving public assistance when they obtained a loan. Less than one-third of the borrowers had gone to high school. `These loans are an important weapon in the war on poverty. In a Mississippi rural community 2 weeks ago I talked with a Negro mechanic. He had been supporting his family by repairing cars and farm machinery under a shade tree in his backyard, using poor, worn out equipment and tools. No one would lend him `the money to set up a real garage. In F~bru- ary 1966 he was given an EO loan of $1,850 and in March 1966 a sub- sequent loan of $650. He used the money to build a farm machinery re- pair shop and buy a lift, generators, testing devices, and other tools. His payments on interest and principal total $190 a year. Last year his net income increased by $1,295. The repayment record of borrowers, both individuals and coopera- tives, is remarkable in `the light of their of their extreme low income situation. In the individual program, at the close of 1966, 82 percent of principal due had been paid.' Some borrowers were paying ahead of schedule-advance payments totaled $1.4 million. PAGENO="0656" 1494 ECONOMIC OPPORTUNITY AC1~ A N1)MENTS OF~ 1967 Total payments made, including prepayments and refunds, amounted to 99 percent of the principal amount due. Cooperative borrowers have a similar record. In another highly successful operation OEO had delegated to our Forest Service authority for operating 47 rural job corps conserva- tiÔn centers to makeyoung Americans more employablethrough edu- cation and vocational training. There are approximately 8,000 male youth 16 to 21 years of age in these centers. The young men are proud of not only what they have accomplished, but also of the skills they have obtained in carpentry, masonry, heavy equipment, operation, and landscaping. Such skills will help them to break the bonds of poverty and be- come fuily self-supporting members of society. To date, the young Americans in the Job Corps have been very predominantly urban. Through the TAP's we are making a strong effort to recruit more rural youth. For boxed in men who are older and therefore ineligible for the Job~ Corps' Operation Mainstream, Nelson amendment, projects are providing both jobs and training in new skills. Funding is by the l)epartrnent of Labor through community action agencies. Projects presently operating are providing conservation and development work and training for 150 men in the Jefferson National Forest of Vir- ginia-48 men in buy Springs National Forest in Mississippi-84 men in the Kisatchie National Forest, La.-and 30 men in the Pisgah National Forest of North Carolina. Negotiations are underway for projects in National Forests in Kentucky and New Mexico and an additional project in Louisiana. All in all, the record of progress in rural America is good. That needs to be recognized. But we must also recognize that the job ahead, if we are to meet the problems of rural America, will be difficult and long. No one agency can solve these problems. They can oniy be solved intimately by local people with the help of Federal and State re- sources They require a coordinated attack Rural America needs the joint effort and experience that OEO is providing. We in USDA look forward to even closer and more fruitful cooperation with OEO in 1 evitalizing rur'tl America For example, one of the joint programs we are contemplating is a two pronged reclamation project-reclamation of land and reclama- tion of people. The specific area is 6,000 acres of land in Mississippi seriously damaged by sediment eroded from surrounding hillsides. Much of this acreage belongs to low-income farmers. This is a part of the Southeast delta resources conseri ation and de~ elopment project which was authorized last September. Flood-prevention dams and other sediment-control structures have already been built, the hill- sides h'~~ e been revegetated, and the erosion is largely stopped Now the problem is to make the land fully usable again. The plan is to spread the sediment evenly and then by deep plowing to incorporate it into the soil. Technical and cost-sharing assistance will be p~o~ ided b~ USDA conseii ~ttion `igencies `md OEO will assist in funding the project. PAGENO="0657" ECONOMIC ,OPPQRTIJNITY ACT AMENDMENTS OF 1967 1495 OEO rural loans and USDA credit facilities will be available. Training and education programs will prepare the people of this area to take `idvantage of developing economic opportunities As the damaged land owned by these small farmers becomes produc- tive, the earning value of these farms will increase We see this as a 10~year project with an:added income potential of at least half a n'iil- lion dollars and .a job potential about 36,000 man-days. As: I look at our present progress and at the challenge ahead, I can only say that it would be most impossible for me to overstate our intrest in the continuation of the community action. program. and the other OEO activities in rural areas. . . . It is imperative that they be contmued The Nation cannot afford to discard the experience and the spirit of OEO at this crucial time. The American . people. cannot. afford to disrupt the programs that are already making inroads on rural poverty. We must now not slow down community action, or turn it over .to new management. So with. the utmost sincerity, I urge this committee to continue and expand OEO programs throughout rural America. This is not to say that there are no gaps in our efforts to combat rural poverty Of course there: are. This is inevitable in~ any new . program. The experi- ence of the past 3 years points to many needed improvements. I am confident that the improvements will be made-that the gaps will be filled. . . .. . . For example, the . comprehensive planning aid for rural America that we have recommended as an amendment to section 701 of the Housing Act of 1954 .is vital. This legislation is urgently needed to overcome the disadvantages of small, scattered population and lack of pl'inning expertise in rural areas, by pooling resources in logical multicounty groupmgs Innovative financmg arrangements must be developed to meet the housing needs of the rural poor. Currently about 5 million, or one- third, of all occupied rural homes need either major repairs or com- plete replacement The 1960 census revealed that 35 percent of farm homes and 30 percent of the rural nonfarm homes lacked this convenience. . ~. . , " , . They did not have hot and cold running water. Qnly 5 percent of urban homes lacked this convenience fhe problem of rural housing requires massive inputs both of funds and of technical assistance if millions of rural people are `to be decently housed. Self help housing and housing grants are impoitant devices We have a small' self-help housing program, and FHA also has authority to make grants up Ito $1,000. for home repair. However, the Congress has restrained us from exercising tins authority smce the summer of 1964. . . ` , . . . . . ` It has been estimated that `underemployment in rural America is equal to about :2% million man-years of unemployment. Obviously, training for off-the-farm jobs is of. key importance. We need to expand work and training programs. There, are jobs to `be had but going begging, so ,to speak, because qualified people are not available. This reinforces the thought I ex- pressed earlier that economic development and antipoverty are two sides of the same coin. There is no point in developing rural job oppor- 80-084-67-pt. 2-42 PAGENO="0658" 1496 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 tunities if we do not also train rural low-income people to take advan- tage of them. Some of these gaps would be bridged by amendments to the Eco- nomic Opportunity Act now being considered by this committee. Thus the proposal on community employment and training would extend to rural areas some of the benefits of job programs now avail- able to urban centers where low incomes and unemployment have be- come crucial. `Where large numbers of rural families live in abject poverty, as in Appalachia or the Mississippi Delta, special, impact- type assistance is urgent. We fully support this amendment. We favor the general expansion of community action programs in rural areas. We approve also the proposal that OEO develop simplified forms and guidelines for use in rural areas. We support the development of cooperative projects between rural and urban areas to help migrants from the country make a better adjustment to the city environment. Millions of the rural poor have flocked to the cities in search of opportunity. Few of them have had adequate guidance in making the adjustment. We also believe that a start should be made on a joint funding and administration by two or more Federal agencies of local antipoverty projects. As I mentioned earlier, about 11 percent of all rural loan borrowers under title III are receiving some type of public assistance when they obtain their loans. It is proposed that they be eligible to earn additional income from their loans without having an equivalent amount deduct- ed from their assistance payment. There would be some reduction in payment, but not on a dollar-for-dollar basis. Finally, we completely support the proposal to establish a new posi- tion of OEO Assistant Director for Rural Programs. * This would be a major stride toward full participation by the rural poor in the Nation's antipoverty programs. Judging by some stories in the press, there appears to be a consider- able misunderstanding about USDA's role-and performance in the war on poverty. I am sure the members of this committee understand my personal unhappiness when some of the news media reports that it is a tragedy that USDA's $5 billion budget earmarks only $450,000 for rural community development and assigns only 26 of its 100,000 employees to this work. To keep the record straight, let me present a few facts. The reference to $450,000 and 26 employees applies only to our Rural Community Development Service which coordinates and expedites rural programs at the Washington level. This is an extremely important operation- but it is simpiy ridiculous to imply that this is our total antipoverty effort. Our Farmers Home Administration is advancing more than $1 bil- lion a year in loans to rural Americans, many of them at the poverty level. About three-fourths of our farm loans for fertilizer, equipment, and land purchase and development ~o to families living on $3,000 a year or less. Most of our rural housing loans go to low- and moderate- income families. Seventy percent of FHA funds advanced for rural PAGENO="0659" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1497 water and sewer systems go to the 16 States with the largest number of low-income rural residents. We are making special efforts to reach minority groups who are locked out both by poverty and by discrimination. In the past fiscal year more than 104,000 rural Negroes received 20,800 FHA loans to- taling over $50 million. This was a 30-percent increase over 1965 and a 146-percent increase over 1960. Our agricultural conservation program helps low-income farmers develop and improve their soil, water, woodland, and recreational re- sources. Since 1964, for example, a total of 170 projects to modernize family owned community water systems in a seven-county area of north central New Mexico have been carried out with special ACP cost share assistance. The systems serve 6,049 farms. Most of these families are Mexican and Spanish-American or American Indian. Farmers in Taos County, N. Mex., are putting in water conserva- tion measures year by year with Federal and State help. In 1964 they completed 4,000 feet of concrete lined ditch at a cost of $15,000 with cost share help from ACP and the State of New Mexico. In 1965, work was started on a diversion dam and pipeline. In 1966 another pipeline, a flume across a river and 2,000 feet of concrete ditch lining were installed, plus facilities for efficient han- dling of water on individual farms. Assured of water, these small farmers are raising more. stock and growing more crops. They will have better incomes, better homes, bet- ter living. Our Farmer Cooperative Service also reaches out to low-income farmers. In Mississippi I talked with the Negro president of a farm co-op composed of 155 low-income growers of cçtton,, soybeans, and other crops. Previously, they lacked harvesting machinery and their crops were often impaired and even ruined by bad weather. With FCS help they formed a co-op, obtained an EO loan of $113,- 000 from FHA and now own three cottonpickers, three combines, six trailers, four trucks, and a sprayer. Their increased efficiency will boost their income. Our Cooperative Extension `Service devotes two-fifths of its time to working with low-income farmers, families and youth. Since 1960 more than 3,500 new business enterprises employing nearly 48,000 rural people have been established as a result of con- servation work carried out with technical and financial help of the Soil Conservation Service. The timber harvest from the national forests annually creates 300,- 000 man-years of rural employment. Another 20,000 seasonai employ- ees, mostly rural residents, work in the national forests each year. Rural Electrification Administration borrowers last year helped set up about 450 projects to establish new, small industries, new commu- nity facilities, and new tourist attractions. This created an estimated 31,000 jobs. Our Consumer and Marketing Service here through the food stamp, direct food distribution, school lunch, milk, and child nutrition pro- grams is doing a great deal to improve the diets of low-income people, PAGENO="0660" 1498 ECoNoMIC. OPPORTUNITY ACT AMENDMENTS OF 1967 especially children. Of the Nation's 100 poorest counties, all but 15 have food assistance programs. On the other hand, more than one- fourth of the 1,200 counties in the poverty stricken category, are still without food assistance programs. Only six States, one of them Mississippi, have food assistance pro- grams in all their counties. in Alabama, next door to Mississippi, only half the counties provide food assistance. These programs are extremely valuable. More than 3.4 `thillion per- Sons are now taking part in the direct food distribution program. From the food provided they can get over half of their daily calorie require- ments, about 90 percent of the protein, 60 percent of the iron, and more than enough calcium, thiamine, and riboflavin. An additional 1.7 million persons are participating in the food stamp program. Their diets, too, are vastlyimproved. OEO is financing the administrative costs of direct foOd distribution in a number of counties in Mississippi and other States. But OEO has indicated it would be unable to continue this assistance beyond this year. To assure the continuance of the programs in these counties and also *that we reach needy families in the 331 lOw-income counties where no program is now available, USDA will provide financial aid. I have directed our TAP's to work with State and local officials to encourage and help these counties set up food assistance programs. We are also reducing the cost of food stamps for the very lowest in- come families. This committee fully understands that rural poverty is a chull~nge not only.torural America but to all of America. Rural poverty too long neglected is at the root of much of our urban poverty. The rural poor of yesterday have become many of the city's poor of today and if we do not succeed in revitalizing rural America, the rural poor of today will become many of the urban poor of tomorrow. Space-starved cities and job-starved rural areas are not two isolated phenomena. They are twins. The human alienation and physical dis- solution so prevalent in our greatest cities are closely linked to the depopulation and civic hopelessness that have plagued our small cities andrural areas.: .` It is time that the Nation as a whole recognized this fact' and acted on `it. It is time that the Nation as a whole faced up to the basic questions. For example~: Is there a desirable maximum size for any one metropolitan area- ifso,whatisit? ` What are the real economic and social costs of continued depopu- lation of rural areas and of increased crowding in urban areas ~ How much longer can we afford to pay these costs? I have referred again and again to wh'at I saw on my recent trip to poverty areas. I have done so because I was so deeply moved-moved by the plight of the poor and their need-and moved by the extent' of our opportunity. One cannot see the way these people live-one cannot talk with them about their problems and what they want out of life-without PAGENO="0661" ECONOMIC OPPORTuNITY' ACT AMENDMENTS OP 1967 1499 realizing that the worst thing about poverty is not that it deprives the poor of physical needs. Far worse than this is the fact that social, edu- cational, and cultural deprivation too long continued can produce a terrible poverty of the mind-a poverty of the soul. I thought of the profound statement in the "Book of Proverbs": "The destruction of the poor is their poverty." Just a little bit more money, education, and training can make such a world of difference. Among those who are being reached by OEO type programs-like Charlie }Iamlin-I found a new spirit-a spirit of pride in doing for themselves and of hope for the future. It is summed up,I think, in what a local banker in Centerville, Iowa, said. He remarked that the people were angry when Centerville was labeled a depressed area but it got them working to get rid of the label. With the new spark of communtiy spirit and the Federal and State help, he said, Centerville progressed from an attitude of gloom and doom to one of zoom and boom. Spurred by this new spirit, rural America is changing. True, there are still to many young people leaving in search of city jobs; there is too little business opportunity in the towns and villages; and there are still too many of our farms that are underdeveloped and unprofitable; there are still too few local processing plants for farm products; there is still too much rural unemployme~it and underemployment; there are still insufficient opportunities for vocational training; there is still need for more recreational facilities; there is still inadequate sanita- tion, water supply, and disposal facilities and there are still hungry people. But the poverty straitjacket is loosening. And if we continue to wage our war on poverty and wage it ever more effectively the time will come-perhaps sooner than we now have grounds for hope-when the bonds will burst and the prisoners of poverty will be released. Part of American is affluent-part is impoverished. But a new note is now emerging. Once ag~ain the voice of hope is being heard in rural America. It is in our hands to help that voice be heard at full cry. Chairman PERKINS; Mr. Secretary, first ii wish to compimient you on what I feel is an excellent statement. I. personally agree with you that we have neglected rural poverty too long. You suggested in your statement a special impact program for the rural areas. Do you feel that that type of program to arrest certain situations that we have in rural communities today could better be under the direction of the Office of Economic Opportunity than under your own direction? Secretary FREEMAN. Yes, I think it could better be under the Office of Economic Opportunity. Chairman PERKINS. I mean more effective direction. Secretary FREEMAN. Through the medium of the machinery already established and moving ahead it can coordinate then across the entire Government and focus on specific targets in a fashion that it is difficult to do by trying to loosely coordinate between different departments of the Government. Chairman PERKINS. If programs were removed from the Office of Economic Opportunity, would they get lost with the other established PAGENO="0662" 1500 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 programs resulting in less concentration and less impact on the root causes of poverty? Secretary FREEMAN. I think there would be less concentration and less effective mobilization of resources in the absence of one named agency with sharp and clearly defined responsibility to do the job. Chairman PimKINs. I hope to see some time in the future a program where we can do more about the rural housing. Do you feel that the Farmers Home Administration now has ample authority assuming that the appropriations committee made funds available for small grants, for instance, of $500 or $1,000 to people living in real poverty in isolated rural areas could put plumbing into their small home, or put a roof over their heads. Secretary FREEMAN. Funding of the current authority for grants for poverty housing would be a tremendous assist in meeting the prob- lem. We did have some funding a few years back. I think it was effectively used and made a real contribution in some desperate circumstances. * We have not had funds for that purpose now for several years and they are very much needed. Chairman PERKINS. In those instances where those grants are des- pérately needed, would you feel that under the Office of Economic Opportunity that you could better proceed toward making inroads on the individual communities through your own agency in coopera- tion with the Office of Economic Opporthnity than under the De- partment alone? Secretary FREEMAN. In this particular instance the main thing is that we have additional authority, I think, in funding this could be in the OEO `and part of its program, in the case of housing where there is no repayment ability that is visible at the time. Chairman PERKINS. You mentioned the fact that the loans were made to the real poor people to purchase fertilizer and purchase supplies for their small farm operations. Has this been more effective under the overall coordination given the Office of Economic Opportunity? Secretary FREEMAN. Yes, I think it has. It has made possible, better coordination by one particular agency, in this case the OEO, than would have been if it had been directly assigned to the FHA by the Congress. `Chairman PERKINS. I personally feel that putting these youngsters in the conservation camps is not the practice of a lost art, as been charged by some. I think they gain invaluable experience. I do not feel that the training that you are giving these youngsters is outmoded. I feel it is very constructive. What is the average per enrollee cost? Secretary FREEMAN. I have forgotten the precise figure. It is coming down. 1 think it is around $6,400. May I put that in the record? Chairman PERKINS. Of course, without objection such information shall be supplied for the record at this point. (The information referred to follows:) The exact figure is $6410, which includes center operations, plus program overhead, building amortization and corpsmen allowances. PAGENO="0663" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1501 Chairman PERKINS. Do you have presently available facilities that will accommodate more than the 8,000 mentioned? Secretary FREEMAN. We have indeed endless amounts of conserva- tion work that could and should be done that would be very useful in the Nation's interest. Chairman PERKINS. Before you leave that point, do you feel this job would be done more effectively under the Office of Economic Op- portunity than if you presently had control, lock, stock, and barrel along with all of the other duties you have in the Department? Secretary FREEMAN. I think there is a good balance between the delegation to use the skill, know-how, and resources that are available in the Forest Service, at the same time coordinating the end product which coordinates the men who leave the camp. As such, this can be more effectively done under one centralized point than it could be if the centralizing and coordinating machinery were not set up in OEO. Chairman PERKINS. What would be the effect on rural CAP's' if the non-Federal share were increased from 10 to 20 percent at-as it is in 11.11. 8311? Secretary FREEMAN. I think it would have a negative effect certainly because it places the load where the rural CAP's are most needed and it places where they have the most limited resources. The 10 percent is sufficient to insure local concern and careful review in the sense of participation. I think the increase involved here would have a negative effect in blocking projects. that otherwise would be carried forward. `Chairman PERKINS. I think `OEO spent about 32 percent of its community action funds in the rural areas during fiscal year 1967 and they plan to spend 3 percent in fiscal 1968. Do you feel this is sufficient emphasis on rural poverty? Secretary FREEMAN. I would like to see more emphasis on rural poverty and more resoui ces there, but I think that probably is at the level that can be effectively used. I think it is difficult to be specific about this There has been a real improvement. Generally speaking our rural program's `are expanding `and strengthening and we are reachingout into areas where previously there was `not any machinery, but I would `hesitate to say I think a percentage is enough because `the need is so great. I am encouraged at the progress that has been made. `Chairman PERKINS. Would you have any suggestions to offer for OEO along the lines of avoiding or overcoming problems of confusion or duplication? ` Secretary FREEMAN. I am increasingly convinced one of the answers to the problem of confusion and overlapping is adequate professional planning. By the same token, I think it is very important `that resources be combined in areas on a multicommunity basis `where those areas are tied together anyhow by the physical fact of' transportation `and communications We have only begun to do real multicounty planning and a `bill now before the Congress would provide matching funds for such planning provided local people wished to carry it forward. Chairman PERKn~s. Do you support a program for veterans? PAGENO="0664" 1502 ECONO~C OPPORTUNITY ACT AMENDMENTS OF 1967 Secretary FREEMAN. I strongly endorse that program. I think it would be well to have someone at high level or echelon tO supervise that responsibility. Chairman PRExIN5. In what particular area or field would you say the Department of Agriculture specializes? Secretary FREEMAN. It is difficult to generalize about that because every rural area in this country is different from every other one, but I think the main focus, and the one I think I came back feeling very impressed with, is the importance of technical training in these rural areas. Everywhere I went there were job opportunities all right for trained peOple but almost no job opportunities for untrained people. This repeated itself. At some of the schools I visited, they were unabl~ to fill the requests. For example at Ottumwa, Iowa where they had a vocational and tech- nical school they were training 17 cooks and they had requests for 80 cooks in that area. I found every school I went to had requests for machinists, for mechanics, for welders, and I could go on. But where you came down to the unskilled common labor, it was itinerant, limited, low paid and with very real communications problems. So I think an impact program needs to concentrat~ itself, first of all on a very effective, strongly carried forward placement tied into edu- cateon, professional and technical training courses. Chairman PREKIN5. Mr. Goodell. Mr. 000DELL. Mr. Secretary, I appreciate your appearance here this morning and your, testimony. Before I ask a question, I wish to state that I understand the general tenor of your testimony `and the fact that this is a good program and needs to be expanded and' things are going well but we ought to do more. My own personal view of the poverty program as it operates in the rural areas is that it is generally unimaginative, short sighted, waste- ful, and in some instances self-defeating and in most rural areas non- existent. But there can be sincere differences of opinion as to how we can make it more effective. You indicated $253 of the-$253 million of the community `action `program money was going to rural communities and that `this figure will rise in the coming budget. You also contrast this with the fact that one-half of the poor are in the rural areas. What is the proportion of the community action money that is represented by the $253 million, do you know? Secretary FREEMAN. I think that is roughly, a third. Mr. GOODELL. A third of the community action money is going to the poor in the rural areas? Secretary FREEMAN. That is right. Mr. GOODELL. You also indicate the Job Corps `centers run by the Forest `Service are populated predominantly by urban youngsters. Do you know the proportion of them that are from urban areas? Secretary FREEMAN. Frankly, I don't but I will be happy to get tha't number for the record. (The information referred to follows:) Approximately 70 percent of the Job Corps enrollees in centers run by the Forest Service are from urban areas. PAGENO="0665" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1503 Mr. GOODELL. Is the funding you mention on page 15 part of the administration proposal to amend the social security law where it is proposed that they be permitted to earn additional income without deductions from their public assistance programs? Secretary FREEMAN. `I am informed this is in the bill pending before this committee. Mr. GOODELL. I ask our counsel if that is correct? I have not seen it. Do you have counsel here who could refer to that specific point?' Secretary FREEMAN. No,. sir, 1 do not. Mr~ GOODELL. You indicated Ii percent of all rural nonborrowers under title III are receiving some type of public assistance and then you say it is proposed that they be eligible to earn additional income. I am interested whether your proposal would let only rural bor- rowers be permitted to earn additional income or is there going to be some extension of this to the urban individuals receiving welfare assistance? ` Secretary FREEMAN. In this instance, my comment is directed toward the title III loans that are loans made to rural people by the Farmers Home Administration. In connection with loan programs in urban areas, I have not made any recommendation but J; would be prepared to recommend that it would make good sense `to me that it should be done in both places. When some of these people begin to have very modest' earnings, I think the incentive of not requiring the deduction' of those earnings from their very limited assist'~nce payments makes good sense `Mr. G000ELL.' `You are indicating that the broad end authority to receive income while still receiving welfare assistance should be both rural ahd urban in:those instances where there are loans made, or `are you ektending' it `beyOnd'that ? Secretary FREEMAN I don't know in the first instance of any com parable loan program in urban areas to the title III FHA loans that `are made, so I would' hesitate to make a-~" Mr GOODELL Of course we had extensive testimony from the Small Business Administration' about. their special pro~'ram for the small business op'erations'which need assistance and much `of that is in urban aieas You apparently feel we should experiment and it sounds like a good idea to permit people who are now on welfare to earn some additional money without losing welfare payments.. Secretary FREEMAN. That is right. Mr GOODELL Would you limit this to those individuals who are receivmg direct Fedei~al money-ldan assistance of some type-or are you saying we ought to extend it beyond `that? Secretary FREEMAN. I said in my testimony I think this would be a sensible and practical' thing to do `in the case of title III EO loans made by FHA. ` I am not privy to some of the problems that might exist in connec- tion with the urban areas ~or the Small Business Administration. However, it would appear to me `from `what I know this would make good sense, too. But I would have to speak with some reservation be- cause I am not informed in depth on this. Mr. GOODELL. Your recommendation is restricted to loans to those receiving welfare assistance? PAGENO="0666" 1504 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Secretary FREEMAN. Not necessarily. Their earnings should not be deducted. dollar for dollar from any assistance payments they might be receiving. Mr. GOODELL. In other words, if you receive a loan under the pov- erty program, the FHA, then you would be eligible to earn somewhat more without losing welfare payments? Secretary FREEMAN. That is right. Mr. G00DELL. Would you limit it to those who do receive the loans? Secretary FREEMAN. No, not necessarily. Mr. GOODELL. Whom else would you include? Secretary FREEMAN. You asked earlier about social security in gen- eral. I would certainly be in support of the principle that certain earnings should be permitted and not be automatically deducted from any social security assistance payments. Mr. GOODELL. Are you going beyond the recommendations that have been made by the Congress to raise the amounts you can earn under social security? Secretary FREEMAN. No, because to be perfectly honest with you, I am not informed at this moment precisely what they are nor am I prepared to testify on social security. I am merely saying then in this instance as a matter of principle I would certainly support moving in the direction of not automatically deducting from assistance payments made particularly to older people to have a little additional earnings. Mr. GOODELL. Of course I agree with you and have agreed for some time that it is a little contradictory of the Social Security and Welfare law that places people into poverty. If they are going to continue to receive social security benefits, they must not earn enough to get above the $3,000 average. If they are under the $3,000 level they are eligible for direct grants from a num- ber of poverty programs and we tell them you can't go out and earn any money or you will lose dollar for dollar. your social security benefits. This does seem to be a little contradictory and it has seemed so for some time. I think there are some aspects of our public assistance which are contradictory and they discourage people from going out and earning on their own. Chairman PERKINS. Would the gentleman yield at that point? Mr. 000DELL. I would be pleased to yield. Chairman PERKINS. Of course we have written into the law a pro- vision permitting earnings without cutting people off. I think it is mostly with the State administration where their regulations and acts do not even permit earnings but perhaps we should write something in. Mr. GOODELL. Unfortunately, this committee does not have jurisdic- tion over the Old-Age Assistance and the Social Security program. Chairman PERKINs. We have jurisdiction over certain welfare pro- grams. Mr. 000DELL. Welfare assistance is based upon the theory if you start earning money then you start losing your public assistance. There has been a great deal of discussion about this in recent months that it does discourage an individual from going out and supporting himself. This is an interesting suggestion you make with reference to at least PAGENO="0667" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1505 those who are receiving money-loans. It does seem logical that those who are receiving loans from the Federal Government in order to earn money should not be discouraged from trying to earn a little private income without losing this same amount they earn in their welfare assistance. You indicate, Mr. Freeman, at page 14 of your testimony that you are recommending OEO develop some simplified forms of guidelines for use in rural areas. The implication of that is it may have been too complicated and difficult in many instances for the rural areas to comply with. Is that right? Secretary FREEMAN. We think some of these could be improved and simplified. We are pleased to.~ see the reference made to it. I know that the efforts that have been made to clarify and simplify forms and guidelines will continue. Mr. GOODELL. You feel in many instances they are too complicated and difficult for the people to buy them? Secretary FREEMAN. I feel they can be improved. Mrs. GREEN. First, may I say I think that is a very impressive ac- complishment; it moves at least in the right direction to do something about poverty in the rural areas. I wish we could do something about increasing the amount a person could earn without being penalized through either social security or welfare reductions. I do think this committee should explore it. I would think the goal ought to be to encourage people to earn as much as they can rather than discouraging them and inviting laziness and other things. I have a couple of questions in regard to the programs. You spoke of the Farmers Home Administration loans and the rate of repay- ment. I am told in the last few days that there has been a new policy in FHA with regard to delayed payments. In the Farmers Home Administration is there any change in policy or any more to become more lenient and to overlook these late repayments? Secretary FREEMAN. We are trying to administer these programs in such fashion as to give every possible encouragement to the recipient so that he will be able to get on his feet. I think it is not as much a matter of clear-cut change in policy as it is a matter of iearning from the experience we have had so far and generally being more liberal in terms of giving more attention and more individual help to those who tend to lag a bit in their repayments. I know offhand of no new regulation to that effort. But, the policy in carrying this foi ward has been movmg steadily in that direction Mrs. GREEN. Have there been directives sent out to the various re- gional offices in regard to this? Secretary FREEMAN. In general terms, by way of giving more super- vised attention and being less rigid in terms of the repayment sched- ules, but again no directive that would change the repayment sched- ule but rather one that would- Mrs. GREEN. Would you furnish the committee with copies of those directives which have gone out? You spoke of loans to individual cooperatives. This is a program which I think has held great promise, and it has undoubtedly opened PAGENO="0668" 1506 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 doors to low income people.. In the press over the weekend, one of the so-called civil rights leaders has recommended that the poor file for bankruptcy. May I ask first, what your own personal reaction to this kind of nationwide drive might be. if it were successful in any way; and second, what do you think the reaction of the administration would be to such programs if this kind of a drive caught on or were even endorsed by others? I must say if this report is accurate I was greatly dismayed to find that support for the bankruptcy movement has been received by about 3,900 members of a local of the American Federation of State, County, and Municipal Employees. Third, would you comment-or hazard any comment-about the increased problems this program might encounter in the Congress, in the authorization committees and in the appropriation committees, if we found this kind of a proceeding recommended and followed by others? Secretary FREEMAN. As to No. 1, I do think the co-op loans have been extremely useful. They have permitted more encouragement for the pooling of resOurces and equipment. We have only begun to scratch the surface, but I think this will prove to be a very, very important step forward. Second, I `did ~ot see this reference and I do not know what it means. On the one hand if it meant the poor like the rich ought to know about the laws on bankruptcy and be `able to use them like anyone else, I would say that would be only common justice. On the other hand. if it is meant. there is to be a program to encourage people to file bankruptcy proceedings I would think that would be very bad, public, private, and national practice. I always hesitate to vouchsafe an opinion as to what the Congress would do, whether it be on authorization or appropriation but it would b'e my guess any real such program to in effect abuse the bank- ruptcy `laws or to encourage their use would have an adverse effect in this legislation before the Congress. Tha't would be my horseback opinion. Mrs.' GREEN~ If the quote is accurate, this civil rights figure has said that he regards his bankruptcy campaign as a possible threat to the entire credit system. Leaving out what Congress might do, what do you think the ad- ministration might do in making loans? Woud i~ change your attitude toward making loans? Secretary FREEMAN. Again, .1 am not quite sure what this means but we have certain laws on bankruptcy on the books. They have been `passed by the Congress and they are the law of the land. Under certain conditions an American citizen can proceed under those laws. Mrs. GREEN. We are well aware of that, Mr. Secretary. Secretary FREEMAN. I see no threat in that. In the other instance if what is proposed here is t.o encourage people to file for bankruptcy every time they can instead of trying to pay off their bills, that is a bad thing. Mrs. GREEN. I interpret the article as exactly that, `to encourage people to file for bankruptcy, not to make them aware o'f the bank- PAGENO="0669" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1507 ruptcy laws the same as other people are aware of them, but to en- courage their use Secretary FimrMAN I thrnk that would be very bad practice, and I think if such kind of encouragement were part of a national program rather than encouraging people to pay their bills, it would have an adverse effect upon our loan programs Chairman Puiu~iws Mr Quie Mr. QtTIE. Mr. Secretary, it is good to have you with us and it kind of reminds me of my service on another committee of the Congress to see you sitting here. I would like to ask you a little bit more about Charlie Hamlrn As I recall your explanation of his need in previous testimony, you say he has 16 head of livestock and 18 acres of quality pasture and his total family income this year including earnings from the farm is expected to be $3,000. How much of that $3,000 is earned off the farm and how much is net earnings now from his operations on the farm? Secretary FREEMAN. I don't have those figures with me. Might I sub- mit them for the record? Mr QUIE I think it would be good I don t have any ob~jection to lending the mOney to Charlie Hamlin thit I think it does give an im- pression that he is having a greater net earning from the farm than must be the case. Sixteen head of livestock, assuming they are beef cows, and .18 acres of pasture really won't give a person a very high net. He may not be able to save anything for his family for a long time. If there are substantial earnings off the farm this is evidently new and I wouldexpect it would have nothing to do with this loan. If it did have something to do with the loan it would be interesting to know how it did and it would be interesting to know how. the earn- ings off the farm improved and what specifically caused these earnmgs to increase I find it intere.sting to follow a particular individual as you have in your testimony and if you could provide this information for us I would appreciate it. Secretary FREEMAN I would be glad to do that (The document referred to follows:) ECONOMIC OPPORTUNITY LOAN TO CHARLIE HAMLIN, FAYETTE COUNTY, Mississn'~i An initial EO loan fOr $2,200 was made in May 1965 to Mr. Hamlin. At the time he owned and operated a small farm in a remote section of Fayette County, Mississippi. His farming operation consisted of a few acres of cotton and corn plus some production of garden produce for home use. In 1963 he also worked four days a week in a box factory. However, hewas laid off during the year and received unemployment compensation until September 1963, at which time this source of off-farm incomO stopped. His yearly income from farming was $365, including home use . of garden produce. Mr. liamlin's family Includes himself, wife, and 9 daughters aged six months to 21 years. Several of his children did not have their own shoes. In February, 1964 be received a small operating loan from the Farmers Home Administration for two cows to supply milk for his children and to pay pressing living and farming expenses. However, his farm and financial, condition ruled out a larger operating loan for the basic farm improvements required to reorga- nize his resources and enable him to get maximum returns from his farm. The EO loan program did make this `possible. Mr. Hamlin received a loan in May 1964 in the amount of $2,200 to buy beef cattle, develop pasture through land clearing, fertilizing, and seeding and to buy materials to repair his farm build- ings. This has resulted in a definite improvement in his farming operations and PAGENO="0670" 1508 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 an increase in net farm income. In February 1966, he received a subsequent Economic Opportunity loan for $300. At that time he had five beef cows with calves and a registered bull. He had cleared 8 acres, and fertilized and seeded the land for pasture and had cross-fenced the area to control grazing. Later in 1966 he obtained a regular FHA operating loan for $1,000 for 6 more cows with calves. This gave him a total of 15 cows and the registered bull. He then had 18 acres of permanent pasture crossfenced with access to water in each pasture. His herd this year produced 11 calves, the gross return from which was $985. In addition, he placed his cotton and corn acreage in the cropland diversion program. As a result, he receives $200 in payments yearly. His family also has developed their potential for producing vegetables and small fruits for home use to the extent that the garden they have now returns the equivalent of $300 a year in produce. The following is a comparison of Mr. Hamlin's yearly farm returns before and after he received the loan assistance: BEFORE Net income from row crops $365 Estimated value of produce for family use 50 Total - - AFTER Net income from calf crop Estimated value of produce for family use Cropland diversion payments Total Mr. Hamlin's conversion to a beef cattle enterprise although requiring con- siderable initial work to clear land and seed, fertilize, and fence pasture now enables him to work more time at off-the-farm jobs. As a result in 1966 he earned approximately $2,000 from work in a cotton gin and as a farm laborer. In analyzing the impact of the EO loan on this borrower, two points are notable: (1) The loan enabled him to tripe his net income from his farm by reorganiz- ing his resources and converting from an extremely marginal row corp opera- tion to livestock production, which is more suitable to his situation and re- sources. Although his income from farming remains very low and will prob- ably never be sufficient to support his family, his farm serves both as a "home- place" stabilizing family living and as the source of an important proportion of his total income. (2) It was not possible for the Farmers Home Administration to supply all of the required financial assistance in this case without the EO loan program, since an adequate farm improvement and development plan, including the prospect of enough income to pay living expenses and meet debt payments, could not be worked out under the regular FHA operating and ownership loan program terms and conditions. Mr. Quin. To go to another subject, you mention on the bottom of page 5: Scattered across this country more than 3,150 community resource develop- ment committees and 562 multicommittees are working today on job develop- ment and training, housing, health, education, recreation, and other services and facilities beneficial to rural communities. Is this all inclusive, or are these USDA programs which you are speaking of here? Secretary FREEMAN. These are lay programs in which USDA has played a part and participated, many of which were begun by the initial rural area development drive that we started in 1961. Many had their derivation from other beginnings and out of this has come a great many different kinds of citizen groups and committees working in a number of different areas. $800 300 200 1,300 PAGENO="0671" ECONOMIC OPPORTUJNITY ACT AMENDMENTS OF 1967 1509 This would be the total figures as we have amassed them from vari- ous rural counties with the Orientation as I have set it out. Mr. Qurs. Would a third of those be community action agencies? Secretary FREEMAN. No. The last information I had was there were about 700 CAP's, although none of these were CAP organizations. If I might volunteer a statement in that connection, to me it is an encouraging thing that there has been across the country over a period * of time, of course, that preceded this act increasing concern on a corn- munitywide, countywide, and beginning on a multicounty basis a variety of kinds ofor~anizations to meet the needs of the community. Now, the opportunity is to bring them together to develop long- range programs that will combine resources and set targets that are meaningful. Mr. QuIE. Would cooperative extension committees on a county basis be considered one of the resources development committees? Secretary FREEMAN. The county extension may be a participant in these committees and in many cases they were the prime movers in organizing them. Their own advisory groups related to their own spe- cial mission as such would not be included. Mr. QuIE. The cooperative extension county committees have always been engaged in programs to assist people and the poor. Would that not be true? Secretary FREEMAN. Yes. Mr. QuIE. One feature which I have long believed in, and was happy that my amendment was incorporated last year, was that there would be one-third participation of the poor made a part of the community action agencies and rural programs. Would you not say that ever since they were inItiated the people to b& helped have participated in the program, using, for example, the co- operative extension conimittees made up of farmers and as cities moved out some of the city people were placed on the board. Soil conservation boards are made up of farmers who are being helped by conservation programs. The ASOS committeesare made up. by county committees. Would I be correct in assuming that Federal programs in agriculture have always been operated on the local level by the people who actually participate in the program? Secretary FREEMAN. Yes, you would be, but I think you started your question and statement in terms of the participation of the poor. I would tend to say that those that the poverty program reaches were not generally a part of this committee structure. It was those who were in a little economically improved status. You could not say someone who was in the poverty level was never elected to an ASCS committee. The same thing is true for the extension service Usually, these are community leaders. One of the things that is use- ful and encouraging is a product of the poverty program and there being a centralized place to really reach out and to get some of the very poor people participating in these committees which I don't think was the ca.se before in the main. Mr. QuJE. There was no particular effort made to bring in the poor people previous to that? Secretary FREEMAN. That is correct, and usually they were. not in a:. position of giving any direction of forming policy. PAGENO="0672" 1510 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. Quii~. My observation of some of the first rural action agencies in operation was that the case was the same there. There were nonpoor and special effort had to be made. I also know from my own experience of living close to some of these people and getting to know their in- comes that they could be classed as poor individuals when they firSt got started in some of these programs. Also, as I recall while the REA was lending money to people, many of the recipients were poor mdi- viduals who were helped through the years. Secretary FREEMAN. Approximately 75 percent of our FHA farm ownership and operating loans in the normal course of business go to people with incomes of $3,000 or less a year to live on which means that in fiscal year 1967, 60,000 families in this category would be reached by these farm programs. Mr. Qmn. You mention in your testimony and the press reports that a small amount of $5 billion of the budget of USDA is misleading because there are a number of projects that do help the poor. In the President's budget, he estimated about $25.5 billion goes to help the poor. Are those programs listed in the $5 billion budget that you list? Secretary FREEMAN. I would have to check. I think that ran more to programs that were more directly related to some type of welfare or special poverty kind of project. The agriculture programs are not by and large especially tailored as such. They are available to everyone but their wide sweep means they do reach a very substantial number that are below the $3,000 a year income level. As a matter of fact, there are more people on the farms that can qualify on that level than there are in the urban areas as you are well aware. Mr. Qu~. Who provides the initiative in the technical action~ panels? Secretary FREEMAN. The initiative comeS from the Farmers Home Administration who on a State and county basis and if there should not be a Farmers Home Administration in a given county office, if there is a multicounty administrative arrangement, it would then be the Soil Conservation Service and then it would be the ASCS. Mr. QmE. Do you have any problem finding individuals in either the Farmers Home Administration or the SOil Conservation Service to provide this kind of initiative? Secretary FREEMAN. I have no trouble suggesting to them that they do it. I sometimes have trouble seeing to it that they do it effectively. Mr. QmE. Do you think you need OEO to help you tell them? Secretary FREEMAN. Yes; I think this is a very real help. OEO reaches people in the rural areas and poverty programs of the kind that these programs have not reached. Mr. QmE. You need OEO for help now to provide the initiative for the TAP's? Secretary FREEMAN. Not for the TAP's as such. They work very closely with the OEO committees on a joint basis because there is much to be done. However, even if you assumed the maximum effective oper- ation to reach the poor through the technical action panels, there are many additional things that need to be done. There are a whole host of programs that you could perhaps call "people" programs that reach into a number of fields where our programs would not normally reach. PAGENO="0673" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1511 Mr. QUIR. So you don't need OEO to step in and help you with the programs you are presently operating but you need them to fill in the gaps? Secretary FREEMAN. To fill in the gaps in some programs we operate. OEO would not be particularly helpful in the soil conservation pro- gram or in the ASCS commodity-operated program. We would like help from OEO in housing where we don't have funding for grants in poor areas. Certainly, the OEO program delegation for loans has been ex- tremely helpful and important and the general contribution in mobi- lizing the community in helping to organize the community and to bring new people and new and creative ideas into it have been ex- tremely helpful. Mr. QUJE. May I ask one last question, Mr. Chairman? Do you need help from OEO in the feeding program? I would like to have you comment on why so many people seem to be starving in Mississippi according to the press reports we are receiving, when the Department of Agriculture has a direct distribution program and the Food Stamp program. Secretary FREEMAN. The food programs are not adequate. There are malnourished people in this country and there is no question about it. We have been in the process of expanding these programs as rapidly as we could. The feeding programs are not only a matter of making food available. They are equally a matter of making it possible for this food to be used in the most effective manner. So, in terms of getting information to people about the programs, in terms of getting people to sign up in the program, in terms of get- ting people to participate in the program, in terms of getting people to have adequate education to use the resources, in these areas we do need and welcome OEO help. Mr. QUIR. Why hasn't the Extension Service been educating these people with respect to these programs? That is their main purpose. Secretary FREEMAN. You are right, but they have not reached out to really .get to the poor people on the basis they should. It has been partly a matter of inadequate funding, of personnel, and I think I must say quite honestly, it has been a matter of not zeroing in on this problem as the Extension Service should have done. Mr. ThoMPsoN. Mr. Secretary, I think your statement is unusually good. I have just some general comments. First of all, I am impressed much by the breadth of your work and by the obvious effort that you have made to coordinate those programs available to you with the programs of OEO. I agree quite thoroughly with Mrs. Green and the others who have stated that perhaps we ought to investigate thoroughly to see if pos- sibly we can put a more realistic ceiling on the amount the poor can earn. At best, even those who own their own homes and have paid off their mortgages and are relying on social security and perhaps even a modest pension from another source have a terrible time getting along. If this committee has jurisdiction or could do it, I would think it would be ~n extremely wise thing for us to study the feasibility of 80-084-67-pt. 2-43 PAGENO="0674" 1512 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 increasing the ceiling so that these people can make considerably more than they make now because the ceilings are completely unrealistic. I find the new congressional district which I have, to be largely rural. One of the problems is with respect to people leaving the farms and the lack of counseling in the various school systems. The type of counseling that the youngsters are getting orients them to an education or some training other than agriculture in an area where, for the most part, the farmer is better off certainly on the national average. Most of them are doing quite well. It is not your fault that the dairy farmers are not doing very well. It is the courts' fault in the Blair case. I do think with respect to counseling at the elementary-secondary level, more emphasis could be given to agricultural pursuits. In three counties there is just one elementary level counselor and at the secondary level there are a totally inadequate number whose training is somewhat lacking. I have no other comment except to commend you for your efforts and to say that I think you have made some very fine and constructive suggestions. I yield back my time. Chairman PERKINS. Mr. Scherle? Mr. SCHERLE. Mr. Secretary, as an Iowa farmer I realize what poverty means, particularly in rural America. We appreciate the consideration that the OEO and the Department of Agriculture is giving our occupation. I feel quite differently than you, in that farm- ers do not want handouts. Agriculture is not a welfare program. If we were allowed to make the kind of money that free enterprise is entitled to without the Govern- ment forcing second-hand citizenship upon us, I don't think there would be any need for OEO programs or any other consideration in the field of poverty for rural America. I attended a meeting not too long ago at the White House and Gardner Ackley made the statement that the farmer is better off today than he has ever been in the history of America. He must. be using the same graphs and documents that McNamara is using because they are both completely unrealistic. I am sure you are aware of the fact that agriculture now is 72 per- cent of parity, about as low as it has been since the depressed thirties. I think the prices we receive for our products today are quite reminiscent of those we received back in 1940. If you stop to consider the cost of production today, you will see that farm prices are nowhere near in line with these increased costs. We have been told many times that as soon as the surplus is gone we would see higher grain prices in America. Well, from all outward appearances the surplus is gone unless it has been re-stored in Texas. Sometimes it appears maybe the administration is hoping that the war will bail out you people in the administration with regard to the farm problems. Secretary FREEMAN. Is that a question, Congressman? Can I answer now? Chairman PERKINS. Let the Secretary respond. Mr. SCHERLE. If you wish. Secretary FREEMAN. You come from Iowa, Congressman. I think you know the net income per farm in Iowa is nearly $4,000 higher than it was in 1960, that the price of corn is significantly higher even at this PAGENO="0675" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1513 time of the year than the average it was in 1960, that the correct fig- ures on parity are not 72. Parity income when Federal payments are included is nearly 80 percent. I must say for the record you are totally misinformed. Mr. SCHERLE. For your information, Mr. Secretary, I think you are way off base in regard to farm figures. I have known it' to be the case in the past that you do make mistakes. For example, consider the cattle estimate you made this past spring. You were off about 4 million head. Do you realize what this mistake will cost the cattle feeder? Now, my question is :- Chairman PERKINS. Do you want him to respond to the war situa- tion? Mr. SCHERLE. I do not think the chairman has to coax the witness to respond. Secretary FREEMAN. The statement made in connection with the war and its effect I think quite demeans your own personal stature. Mr. SCHERLE. Mr. Secretary, it was not a statement. I said it "appears." Secretary FREEMAN. It is a little bit disgraceful. You should be ashamed of yourself. Mr. SCHERLE. Mr. Secretary, I am not, in light of your testimony. Secretary FREEMAN. Then you don't have enough sense to be ashamed of yourself. Mr. SCHERLE. I question that statement, particularly coming from you, Mr. Freeman. Perhaps the lack of sense is on your side of the table. Now, Mr. Secretary, I have heard that it is the objective under Man- power grant to Iowa to replace the rural extension director for an urban director; is this true? Secretary FREEMAN. No. Mr. SCHERLE. It is not? Secretary FREEMAN. No, not to my knowledge. Mr. SCHERLE. Can you tell me what percentage of the people in the State of Iowa are now in the poverty group under the $3,000 limit? Secretary FREEMAN. No, I don't have that number in mind. Mr. SCHERLE. What percentage of today's farmers throughout the Nation are now in the poverty group? Secretary FREEMAN. The definition of $3,000 net income-there would be, I expect, close to one-half of the farmers across the country who would be making less than $3,000 net income, mostly the smaller farmers. Mr. SCHERLE. But you have no idea how many are in this category in the State of Iowa? Secretary FREEMAN. I do not have that number at hand. I would be glad to submit it for the record.' (The figure referred to follows:) The 1960 census indicates that approximately 44 percent of the farmers in Iowa earned less than $3,000 net income per year. Because of increases in farm income in Iowa since 1960 it is believed that this percentage has been reduced considerably. Mr. SCHERLE. Was there any force put upon the Extension Direc- tors to organize under OEO? Secretary FREEMAN. There was no force. The Extension Directors were told to cooperate long before the establishment of local and edu- cational groups. PAGENO="0676" 1514 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 They have been doing that for a very long time. Mr. SCHERLE. It is my understanding that none of these county poverty programs were initiated until the Extension Directors in the various counties were instructed to set these up and got the ball rolling. Is this true? Secretary FREEMAN. No, I don't think it is true. There were many committees organized in which the Extension Service did not neces- sarily play a part. I think it is true when we began organizing rural development area committees back in 1961 that the focal point on that organizational effort was the Extension Service. Mr. SCIrERLE. You made. the statement, I think it was last spring, that you were happy that farm prices were going down. Secretary FREEMAN. I never made any such statement at any time and you are totally misinformed once again. Mr. SCHERLE. Mr Secretary, the information that I have and, of course, I can't be at all sure of these things personally but I do read a lot and I am certain in every case the press is not always wrong and you have not been misquoted every time you have made a statement. Secretary FREEMAN. I have been misquoted a very liberal amount when I have made statements. Mr. SOHERLE. I have much more faith in the accuracy of the press than you do, then, Mr. Secretary. I read in the paper that you made the statement that you were happy that prices were going down. I realize that we in agriculture only number 6 percent of the total population and 1 know this small number does not constitute a huge "vote bloc." Now, my question is in response to the statement you made at that time. Prices have been going down consistently. I read in the paper this morning where livestock prices now are higher than they have been perhaps in the last year or so. I sold prime fat cattle last spring at $25 a hundred and lost money. I saw in the paper last week where you and the President jointly submitted a resolution to withhold the flow of dairy imports into this country. You restricted them by, what, about half? Is this true? Secretary FREEMAN. You asked a few questions a moment ago. Let me clear the record here. At no time did the Secretary of Agriculture say he would like to see farm prices go dowi~. You made reference to cat.tle and hogs. Hogs were selling in Iowa for about $15 when I be- came Secretary of Agriculture. Last year they were up as high as $30. They are right now selling for $22.50 and there has been a substantial increase in hog prices. Where cattle is concerned the same is true. They have not gone up as high but they have been substantially strenghtened over what they were back in 1960. I have already made allusions to soybeans, to corn, and to net farm income in Iowa which under the feed-grain program has been a very sharp upward movement and, as I say, .the highest net farm income per farm in Iowa m history. Now, the question in connection with the dairy imports, the Presi- dent, by Executive order, pursuant to law, cut back the dairy imports about 3 million pounds a year and the action was taken 10 days ago. Mr. SCHERLE. You used existing law to accomplish this under the Agricultural Adjustment Act? PAGENO="0677" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1515 Secretary FREEMAN. That is correct. Mr. SCHERLE. Why was this not done sooner? Secretary FREEMAN. If it had been done sooner, it would have hurt the farmers of this country by adversely affecting our position in the Kennedy round negotiations which ended very advantageously to the grain farmers of Iowa. Mr. SCHERLE. I think first of all we are going to find out in a very short period of time that agriculture did not come out very well in the tariff negotiations in the Kennedy round. Second, I think we ha.ve caused a great hardship to the farmer by not instituting dairy import restrictions earlier when the very Congress- man from your State and the rest of the States asked you and the President to t.ake immediate action. My next question is why not use the same existing. law and restrict meat imports? We have asked you this question ever since the session began. Secretary FREEMAN. The Congress of the United States in 1964 in cooperation with and inconcurreñce with the meat industry both pro- ducers and processors, reached an agreement in connection with a level of meat imports which it was felt that this country could and perhaps should accept and which would not adversely affect cattle prices. That level has not been reached and that point in terms of quotas has not been triggered and as such the law that the cattle.industry recom- mended in 1964 is still on the books and is still being administered. `Mr. SCIIERLE. Isn't it true that this is the only thing they could get through at that time? If this bill were in effect for a hundred years with the loopholes that are now in it, it would never be triggered. Secretary FREEMAN. No; that is not true. Mr. HAWKINS. Mr. Secretary, I would. also like to commend you on a very excellent statement. I think perhaps you have been too good to Iowa and not as good as you should have been to Los Angeles. I do have one or two serious questions. I perceived from the record that rural loan title 3-A loans gradually have decreased. from fiscal year 1966, which was $35 billion, to $24 mil- lion in 1967, and currently the fiscal year 1968 to $20 million. Does this represent an absolute increase or is this a revolving fund that is being used over and consequently this apparent decrease is not one actually? Secretary FREEMAN. It represents a revolving fund. Repayments have been good and that money is being loaned out and the program level has not been reduced. ~{r. HAWKINS. With respect to Community Action agencies in the rural areas, it would appear to me from the testimony that you have given there is perhaps a much more essential function .that they serve in the rural areas than that which they serve in urban areas. In other words, would it be possible if the program were fragmented for you to deal with multicounty organizations as one agency and ac- tually render another type of service that you are now rendering in a coordinated way through a CAP agency that involved other Federal agencies? Secret.ary FREEMAN. I am not quite sure how to answer that question. PAGENO="0678" 1516 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. HAwKINS. Perhaps I can rephrase it a little better. It would seem to me that people living in rural areas are much more isolated than those who live in urban areas and, consequently, for any single Federal agency to render a service on its own would involve an ad- ministrative expense first of all which would necessarily be duplicated by every other Federal agency. Consequently, it would seem to me in the case of the rural CAP that would involve not one but many, many counties, and that because of this it would be almost impossible to try to fragment the service and render the type of service that you are now rendering through a coordinated agency. Secretary FREEMAN. I would certainly agree. We could not pos- sibly have an office for every Federal department for every county in the United States. Mr. HAWKINS. But you can find it economical to share in the cost, let's say, along with other Federal agencies. Secretary FREEMAN. That is correct, and the whole concept of the CAP agency. and the TAP groups within the Department of Agricul- ture is to have this outreach so that you can use people presently on the spot to provide a conduit and in many cases provide actual staff help for departments and programs that are not staffed in that locality. Mr. HAWKINS. With respect to the situation referred to in Missis- sippi, the implication was left that because of certain sensational stories about people starving that pressure was put on the OEO and the OEO in turn had to somehow put the pressure on you. If I can recall, was it not a request of a cooperative relationship that existed between the Department of Agriculture and OEO that brought what little relief was brought tothese people? Secretary FREEMAN. Yes, it was. We have been expanding the food program and the food stamp program for the last 6 years until now it reaches every county. That is not to say it reaches everyone in the county. There have been some counties that did not put a program into effect because they said they didn't have any money and could not afford to pay the administra- tive costs. In those cases we approached OEO who came in and picked Ü~ tile tab for some of the administrative costs in those counties. Conversely, when we have had some question in terms of the proper level of the food stamp program in regard to the amount of money people were spending for food and certain people with intermittent or very low incomes did not have funds available, OEO came in and made arrangements for a loan to these people so they could qualify under this program, so it is a very good example of cooperation. I want to hasten to say that this program has not reached everyone. It is going to require more funding, it is going to require more re- sources, it is going to require more emphasis and it is going to require more coordination to ~eachi the essential diet, which had been gradual. Up to 6 years ago we didn't have a food program and now we have 1,600,000 people on the food stamp program. Six years ago we didn't have anyone working on this program. Now we have 700 throughout the United States. I am not satisfied but I think we have made some progress and if PAGENO="0679" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1517 we can keep it running, we should be able to reach everybody we want to reach. Mr. H~v1uNs. `What is your opinion with respect to the amount of money being spent on rural poverty? Would you say not enough money was being spent? We were perhaps left with the impression that you were in agreement with the amount now being spent. Are you in agreement that enough is being spent or that more could not be effectively spent if made available? Secretary FREEMAN. No, sir; I did not mean to leave that nnpres- sion at all. I think we are now in a position and have progressed or- ganizationally enough that we would effectively and efficiently spend more funds to carry these programs forward more rapidly. Mr. HAWKINS. Thank you. Chairman PERKINS. Mr. Steiger? Mr. S~nuGER. Thank you, Mr. Chairmaii, and good morning Mr. Secretary. One of the problems that has disturbed me-and I touched on it with Mr. Shriver and others in their testimony-has been what I would judge to be a failure in OEO to adequately cope with rural poverty. According to the figures that Mr. Shriver gave us, some 32 percent of the community action agency funds for fiscal year 1967 went to rural areas. This will be increased to 36 percent in fiscal year 1968. I know that you are deeply concerned about this particular prob- lem and discuss this in your testimony. I wonder whether or nOt you have any thinking for this committee in terms of the fact that so much of the Community Action program funds are earmarked and not versatile? Has this problem come to your attention and the fact that this makes it more difficult for a rural CAP agency to effectively meet the needs of their area? Secretary FREEMAN. Frankly, I don't think it is earmarked very much. It is one of the programs in which there has been rather wide discretion as to how CAP is going to spend it's money locally. There has been a good deal of flexibility and I think that is very important and as a result there are a whole~ variety of different CAP programs which are developed to local indigenous needs and it is a niatter of local resources to have more CAP's and have more money for those that are operating satisfactorily. Mr. STEIGER. Let's take Wisconsin. Only 28 percent of the funds in Wisconsin are versatile and the balance is earmarked for specific programs and specifically in my State for the Headstart and Nelson programs but this has created some very real problems for the local CAP agency. Secretary FREEMAN. The local CAP agency needs more resources I would certainly agree. I don't think that the programs that are pending-you mentioned two-that the Job Corps program or the National Youth Corps or the Nelson program-these, I think, are very meritorious as well. I believe within the resources that the distribution of funds is about as equitable and wise as could be made. PAGENO="0680" 1518 ECONOMIC OPPORTTJNITY ACT AMENDMENTS OF 1967 Mr. STEIGER. Wouldn't you think we ought to go to a greater degree of versatility and less earmarking to allow the CAP agency to have the greatest flexibility to meet its own needs? Secretary FREEMAN. I think the CAP agency has wide discretion. The problem is they don't have enough money. I really don't think it is a limitation on their discretion. It is a limitation on their resources. Mr. STEIGER. What kind of work are you doing with the Depart.- ment of Agriculture or with OEO to try to alleviate the problem of the older farmer who no longer is capable of farming but who is still employable if we can provide a skill to make the kind of transition necessary from agriculture to some kind of a job opportunity so that. he can maintain his self-respect? Secretary FREEMAN. No. 1, I think the OEO loans proper have been very helpful in trying to develop some supplemental source of income. We had a demonstration over in the patio of the Department of Agriculture about a month back with an elderly gentleman doing a little part-time farming who got such a loan, and he was a very skill- ful woodworker and he got a lathe and woodworking equipment. He is now selling items he makes successfully. We have had a program with local people to try to stimulate industry and bring new jobs to communities so this kind of a person could have-and many of them are women-full or part-time jobs to supplement that income. The program of loans under the FHA for recreation has resulted in many cases where men who felt they could not farm actively but could convert some of their lands into recreation facilities like camp- ing, picnicking areas, sometimes fishing, sometimes hunting-a good bit of this has taken place. Many of these people have wanted to and have successfully worked on the Nelson Act projects-various kinds of conservation and envi~ ronmental improvement programs. There are a good many different things that are taking place along these lines. Mr. STEIGER. In view of the fact that some 46 percent of our Nation's poor live in rural areas, are you satisfied that at the level of 36 percent which is estimated for the fiscal year 1968 we are doing enough for our poor? Secretary FREEMAN. No, I am not satisfied but I approve of t.he direction in which they are moving which is more. In other words, the percentage we have put in the rural areas after a rather small start initially has been steadily growing. It is true that 45 to 50 percent of the poverty is in rural America with roughly 30 percent of the people there. But I don't think it necessarily follows that you should say 50 per- cent of the resources should be going for poverty or whether it should be 60 or 40. It started out with a rather small percentage going to the countryside because the cities were, by and large, able to organize, apply, get funded, and get moving more quickly and there are very special problems in getting these programs moving in the rural areas. We have recognized this and we are beginning to move, I think, very aggressively in that direction. I am not satisfied rural areas are getting all we can get but I am pleased that we are making strides toward the goal. PAGENO="0681" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1519 Mr. STEIGER. OEO has funds for only 50. new rural CAP agencies in fiscal year 1968. Do you think there should be more? Secretary FREEMAN. I think there should be many more. Mr. STEIGER. Do you think it is possible to effectively spend more than the President requested in the OEO budget? Secretary FREEMAN. Yes, I think we could spend more money re- sponsibly and effectively. I think we could spent a lot more money on other things that the Department of Agriculture would respon- sibly like to do. I would like to spend more money on soil conservation, watersheds, and in a number of other places which I could mention. Mr. STEIGER. Could you guess how much more money OEO could effectively spend? Secretary FREEMAN. No, I would hesitate to put a dollar sign on that. I am sure that in these CAPS they could use a good deal more. Mr. STEIGER. Have you worked with OEO to encourage them to spend a greater share of their funds in rural areas? Secretary FREEMAN. Very much so. We work very closely with them in that respect and have suggested from time to time that a little more emphasis in rural America might be in order. Mr. STEIGER. I will yield the balance of my time to Mr. Quie. Mr. QUIE. Following along the line of Mr. Steiger, you mentioned you wished you had some more money to use in the Forest Service and the Job Corps program operates 42 or 47 percent. You also mentioned one of those two figures in your testimony. What kind of work are these young men doing in the Forest Service which is fulfilling a need that had gone wanting for some time? I am not talking about the help this program gives to the young men, but I am talking about the help they give to the Forest Service in try- ing to accomplish some of the work it is trying to do. Secretary FREEMAN. Building trails, building camping and picnic areas, building recreation areas, doing tree planting `and tree thinning where needed, fighting fires. Mr. QUIE. Could you put a dollar figure on that, the value to the Forest Service, assuming the Forest Service was going to go out and hire this work done to accomplish its purpose? Secretary FREEMAN. I don't have that figure, but I could get it and submit it for the record. (Figure follows:) We estimate the dollar value to the Forest Service from these services to be $16,890,000. Secretary FREEMAN. Incidentally, I saw it down in Indiana, at a place called Saddle Lake 10 days ago where the Forest Service built in conjunction with the Public Law 566 watershed recreational facili- ties for changing clothes, picnicking, camping, and necessary reten- tion walls. They brought in sand and developed a really very, very attractive and very desperately needed swimming and boating and recreation area which would serve a lot of people and bring some money into that community. Now, the difference between what it would have cost to contract that out than to have the boys do it I don't know, but I do know the project was extremely worth while from the standpoint of the end product. Mr. Qun~. When the picnic tables are built, and the trails put in and so on within the area of the Job Corps camp, do you expect to be PAGENO="0682" 1520 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 moving the camp later on? Is that the plail or do you expect to trans- port the boys over longer distances? Secretary FREEMAN. I expect it will very obviously be from area to area, but in most of these areas there is more than enough work to be done for the number of people in the camps. I don't think that faces us with a very serious logistical problem. In terms of planning and thinning trails and roads-we are so desper- ately short of those and need that kind of work that there is just a great deal of conservation work that needs to be done without having to travel very far to do it. Mr. QUIE. If you are using it primarily for conservation work, thin- ning, working with the trees, that would be one thing, but I would imagine you would run out of picnic tables to build and trails to build. Secretary FREEMAN. Maybe picnic tables, but ive use a lot of them in other work, too. I can assure you that they are easily transported to the work areas or vicinities. I don't think there is much danger of run- ning out of work on the camps. Mr. QUIE. If you were given additional money could you place a substantially increased number of young men to work in the Forest Service? Secretary FREEMAN. Yes. Mr. Qun. How many do you think you could assimilate in this coming year if such were the case? Secretary FREEMAN. Of course, you would have to build the physical structures, but let me give you by way of an example: when the ac- celerated Public Works program went into effect in 1962 we put 10,000 people in the woods in 2 weeks. Mr. QUIE. Could you duplicate that? Secretary FREEMAN. You couldn't quite duplicate that because of the mechanics of getting these boys and the recruiting and the medical care and clothes to stock the camps in which they could be placed, but given the necessary leadtirne to take care of the logistics we certainly could use 10,000 more to good advantage. Mr. QuiE. You undoubtedly have an interest in building the picnic tables, thinning the trees, building the trails, and so on, but what kind of interest does the Department of Agriculture have in time boys them- selves or is this the responsibility of OEO? Secretary FREEMAN. Legally, the responsibility runs to OEO. We have been learning on the job so to speak as to how you mesh the rela- tionship and the operation so the education, the discipline problems, the effort to stimulate and inculate good citizenship now is being dele- gated by OEO to the Conservation corps director, except broad stand- ards and policy direction which is established nationwide and which draws then upon the best talent and understanding and most recent information in that connection. So, I would say there is an increasing delegation of day-to-day operation responsibility including the handling of the young men as well as t.he physical work that is done. Mr. QmE. How many of these young men have been hired in the Forest Service after they completed their training in time Job Corps? Secretary FREEMAN. The other day when I spoke at the graduation ceremony out in Indiana, I recruited one personally and took him PAGENO="0683" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1521 aboard. There are quite a few, as a matter of fact. I don't have the exact number. Mr. QUIE. Would you please provide that information for the record. Secretary FREEMAN. I would be happy to. (The information requested follows:) The Forest Service states that approximately 150 corpsmen have been em- ployed in full time jobs. Mr. QUIE. Do you have information as to the number of boys who have gone into conservation-type work as a result of their training in the Job Corps centers, not hired necessarily by the Job Corps center? Secretary FREEMA~N Let me check thit, too, for the iecord `md submit it. . (The infoimation requested follows ) Approximately 640 have been placed in consei~ ation and conser~ ation related jobs including farming, fishing and forestry. Mr. QUIE. Would you also provide information on the number of young men who have completed their training who have gone into the work in the area in which they are trained. I understand not all of them have been trained for conservation work. Some have been taught to run heavy equipment and so on. Secretary FREEMAN. They very often go from the basic Job Corps training camps to another center where they get advanced training in connection with whatever skill they are. going to follow. I take it that that would be included in your question, those that went on for advanced training? Mr. QUIE. You could add that to it, those who have graduated and gone on to advanced training and to urban ce.nters. I understand the number is small for those who made the transfer, but I think plans are to increase this in the future. (Information requested follows:) . - From the beginning of the program until February 20, 1967, 6,470 that have graduated have been placed in jobs or gone on to advanced training or urban centers. On page 14 at the bottom of the page, these are the recommendations and improvements in the changes that should be n-ia.de, and you say: We also believe that a start should be made on joint funding and acTministra- tion by two or more Federal agencies of local anti-poverty projects. Could you elaborate on that? Secretary FREEMAN. One example would be what I described a moment ago under the fod programs where OEO picked up the local administrative costs and where the Federal GOvernment made the food available and paid the transportation costs to get it there under the Food Stamp plan where they are making certain loans ill order to qualify under the Food Stamp program. This is a jointly funded type of operation. I think there are endless kinds of combinations that might be made. For example, joint pro- grams on hotising. If grants could be made under~ OEO and loans could be made under FT-IA and then training programs leading to jobs again under the Labor Department., you have a joint program in son'ie respects-i guess we can call it impac:t programs in certain places. As I read it this is more or less a general statement which encourages PAGENO="0684" 1522 ECONONIC OPPORTUNITY ACT AMENDMENTS OF 1967 the combination of different kinds of programs with joint funding to reach a common goal. Mr. QuIE. Isn't this being accomplished now? How is that different? Secretary FREEMAN. I don't think it is much different. I t.hink it is mainly encouragement to do more and coordinate better and combine funds more effectively. Mr. Qum. We get the impression from your statement that we should start to do this. Your statement also gives the impression that none of this was done before. Secretary FREEMAN. Then I think the statement should be corrected and I stand corrected because it has been going on. I think specifying it in the law merely means validating it and specifying more. Chairman PERKINS. I took it from Mr. Quie's question that he was implying nothing more than a leaf-raking operation had taken place. Mr. QUIE. I don't know what you were listening to, Mr. Chairman. Chairman PERKINS. I thought you wanted to know what else was being done? Mr. Qun~. Of those in the training corps work, I wanted to know how many had jobs since I said I understood they were trained in other fields such as the heavy equipment operation and I wanted to know how many got jobs in this field and the Secretary mentioned that some were even transferred to an urban training center. He suggested he would put in information concerning that training. But I didn't get the impression that I was asking questions with the implication that there was only leaf raking operations at least in the woods there would be enough leaves to rake so you would not have to move them more than once. Chairman PERKINS. You certainly train those youngsters in ma- sonry, carpentry, even before they are transferred to the urban cen- ters and sawmill in many instances do their own construction work and different types of construction. Am I correct that is before they are transferred to urban centers, that is the ones that are transferred to a more comprehensive program? Secretary FREr~rAN. There is a good deal of that. If you will par- don the personal reference, just the one I was in a week ago, they had grouped certain kinds of directions in which the boys might want to move. One might be heavy machine operations in trucks and they started and got very basic beginning training and then used these machines themselves. Another was in the carpentry and woodworking area with a course in tools, how to take care of tools, and so on, and that goes on to using other skills. Another might be in the cooking area, where some might be inter- ested in food and cookery. I think another one was directed toward office work, machines and that type of thing. So, there was, of course, the basic education training. One of the boys that graduated at the ceremony I was privileged to participate in had been a high school dropout. He was only 16 years of age. He had done poorly generally in high school. He had gotten to that camp. He had done so well on general PAGENO="0685" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1523. educational development tests that he had already gotten a high school diploma and lie was going to enter a university in New York this fall at 16 years of age. It was a striking and exciting example of really just finding some- one with exceptional talents and getting him moving. Mr. QUIB. From the Harris Survey, I note that only 2~ percent of those who graduated from the conservation training said they were given enough training. This seems to be quite low and when you look at the others. Also in the Harris Survey where they gave the percent- age of people in the occupation of what they are trained for, conserva- tion was not included. Yet 3 percent received training in conservation. farming and went into it. I would ask, Mr. Chairman, that these two tables from the Harris Survey, be placed in the record. One is on page 50 and the other is on page 76 of the Harris Survey No. 3. Chairman PERKINS. Without objection, it will be placed in the record. (Tables will follow:) Were you given enough training to get job Given enough traininfj (%) 2G 43. 44 40' 50~ 29 17 16. 18. 10 17 25 29 21 39, 27 24.: 10' 22 52 34 35 32' 25 18 28 2G [Base: Total] Total Negro White Urban Conservation Dropouts Negro White Urban Conservation Discharges Sex/type of center: Men Urban Conservation Women Race: Negro White Length of time in Job Corps:.~ . . Less than 3 months 3 to 0 months More than 0 months Type trained for- Professional and technical Clerical and sales Service Farmers, fishing Machine trades Bench work work PAGENO="0686" 1524 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Type of job now by Job Corps training [Base: Working now equals 57 percent] [In percent] Present occupation Trained for in Jobs Corps: -~_______ Profes- sional, technical Clerical, sales Farming, Service fish Machine Bench- trade work Struc- tural work Professional, technical 34 Clerical, sales 15 Service 23 Farming.fish Processing 8 Machine trades 4 Benchwork 4 Structural work 4 Miscellaneous 8 10 36 19 4 2 8 2 19 3 8 38 3 13 3 5 27 8 38 3 8 13 8 11 11 3 5 7 5 6 20 6 10 28 28 3 21 14 10 10 14 4 3 22 4 11 4 11 16 25 Secreary FREEMAN. I think we will have more in soil conservation and forestry but most of tile permanent employment in those agencies are at a professional level. I think we are finding a number of boys that want to go on and would like to become a forester or soil conservationist but they would not have had time to complete that. Let me check that out for you. I have checked this out and find that tile 3-percent figure referred to by Congressman Quie includes farming, fishing, and forestry. re- lated work. We have found the emphases to be on the forestry related work. Further I have verified my statement that most of tile corpsmen require further training in order to be foresters or soil conservationists but the program has notrun long ellough to complete. Mr. QUIE. I think a lot of the information being furnished is useful. The idea of men beingernpl6yed in the Forest Service has been pro- moted for a long period of time, long before the Job Corps came in existence. This was also long before it was even advocated in the early 1960's. Let me finish by asking some questions on the versatile program. I was surprised in your answer to Mr. Steiger that you did not appear in favor of eliminating the earmarking of the funds. You merely answered that the community action agency programs are versatile now and if there is more money there would be a substantial amount of money available for them. There is a tendency for earmarking programs, providing money for areas in which Congress has the greatest interest. These tend to be programs mostly for the large urban areas with the exception of the ~elson program which is primarily for the rural areas. As we move into earmarking programs, and if it continues to operate as unwisely as it did in the last Congress, I believe it tends to take money from versatile programs and puts it into earmarking programs which had. been funded. by versatile programs before. If we continue to do that don't you believe this will actually short the versatile programs for the rural area? Secretary FREEMAN. I don't want to be misunderstood on this. What II meant to say was simply this: There are some of tile programs which have been delineated like tile National Youth Corps, the Job Corps PAGENO="0687" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1525 camp, the OEO loans, and we could go on-the Headstart program, too. Mr. QUIE. Perhaps there was a misunderstanding. From the be- ginning the Job Corps was separate and the Neighborhood Youth was separate, and so on. But at its inception, programs for narcotics, for Headstart, for Nelson programs, for legal services and adult education, were all versatile programs. That is,. adult education was earmarked as part of the cormnunity action programs and all versatile programs were to be funded by the local community action program as they felt the need. These are the earmarked funds Mr. Steiger was talking about where there was a shift from the versatile to the earmarks, but not the Orig- inally earmarked programs. Could I have your comments on this? Secretary FREEMAN. You are asking within the funds that go to the local community action program is the tendency sound to earmark those funds and set down what they should be spent for as distin- guished from naming them in general and leaving them up to the local community action. I have mixed emotions about that, to be quite honest. I am sure the Coiigress would want and as Administrator, myself, at times I would want to give priority to certain programs that I think ought to have some emphasis. On the other hand, you would not want to foreclose unduly the discretion of the local people in the program who after all are very close to it and who ought to have as much flexibility as possible, so I would be pulled both ways. I would say I would tend to feel there should be a maximum of flexibility, but I would not myself want to be so handcuffed if I were administering this if I believed a program for what I felt to be a good reason should have top priority that I would not be in a position to do something about it. Mr. QUIE. As I understand, the Administrator could have full au- thority to do what he wanted about this. As to whether the Con- gress should strap the Administrator and the community action agencies by putting in earmarked programs-I would say to you, Mr. Secretary, if the Congress does move in the direction of earmarked ~Jrograms, and I don't believe they should, that you should start dreaming up some for the rural earmarked programs because 36 per- cent of nothing is not very much. Most of the earmarked programs go to urban areas and there only remains a small amount for versatile programs, 36 percent of that isn't going to be very much for the rural. So, if the urban areas are out getting their earmarked programs, the rural areas had better go out and try to get their programs, too. For instance in the narcotic programs, we don't have much in the rural area- .... Secretary FREEMAN. ilea dstart and training programs, however, are helpful to the rural areas. Mr. QUIE. Rural services are not as much help to the rural areas as~ the urban area. This is my concern. I think the Congress in its trial run on earmarking programs last year made a mistake I think we ought to leave it at vers'thle programs because what fits a community PAGENO="0688" 1526 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 in my congressional district surely would be different from that of a rural community in Mississippi or Alabama. Thatis all I have, Mr. Chairman. ML GOODELL. Mr. Secretary, I have had the opportunity to review some hearing which occurred in another committee of Congress, before Mr. Resnick's subcommittee, and I notice that in a number of places during the course of the hearing he was very unhappy with the lack of emphasis on aid to rural areas. He went so far at one point to say, "I know again in my own State of New York the priority goes to the city and the rural area gets what is left." Mr. Lowel H. Watts, answering questions before that~ committee, who, I believe, is the director for extension of university services, Co- operative Extension Service of Colorado, made this statement. (Mr. Watt's statement follows:) TESTIMONY OF THE EXTENSION COMMITTEE oc ORGANIzATIoN AND POLICY (ECOP) * May I first of all thank your Committee for the opportunity to present testimony as part of your analysis of development programs in rural America. My name is Lowell Watts. I am Chairman of the Extension Committee on Or- ganization and Policy, more commonly referred to as ECOP. With me today are Dr. G. W. Schneider, Associate Director of the Cooperative Extension Service in Kentucky and Chairman of the ECOP Subcommittee on Community and Resource Development, and W. M. Bost, Director of the Cooperative Extension Service in the State of Mississippi and a member of ECOP. We represent the State Coopera- tive Extension Services of the fifty states and Puerto Rico. As you know, the Cooperative Extension Service was authorized in 1914 under the provisions of the Smith-Lever Act. The growth of Cooperative Extension edu- cational programs across the country has resulted in the gradual development of a unique educational system which focuses upon the use of new technology and information to solve everyday problems of people at the local level. The involve- ment of our extension agents and our staff specialists has brought the Extension program into an extremely close relationship to the people whom we serve. THE FUNCTIONS OF COOPERATIVE EXTENSION Functioning as an educational arm of the Department of Agriculture and as a grass roots problem solving extension of our land-grant universities, we share with this Committee a concern for the welfare of rural America. Our close and continuing contact with people in their local environment has also brought to our attention certain types of problems and concerns which we feel are of rele- vance to your Committee in its review of federal assistance in the development process. Extension's early activities might best be described as that part of an educa- tional process aimed at promoting and encouraging change in individuals. The sum total of these changes has made and is continuing to make possible the highly efficient commercial agriculture which provides the American consumer with the world's best food supply at less than twenty percent of disposable income. Unfortunately, the past concentration on agricultural production largely ignored the more complicated inter-relationships of individuals and families with their communities and ignored almost entirely community inter-relation- ships within the broad economic and social framework of the nation. As we look at the role of Cooperative Extension today we recognize that in addition to individual learning, the processes of planning and development also require the stimulation of group decision making as basic to development. Said *Presented by Lowell H. Watts, Director for Extension and University Services and Director of Cooperative Extension Service, Colorado State University and Chairman of ECOP; 0. W. Schneider, Associate Director of Cooperative Extension Service, University of Kentucky, and Chairman. ECOP Subcommittee on Community and Resource Develop- ment; and W. M. Bost. Director of Cooperative Extension Service, Mississippi State Uni- versity and a member of ECOP. PAGENO="0689" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1527 another way, the initial purpose of Extension is to enhance individual decision making and the second purpose is to enhance group decision making. Development in a nation such as ours requires recognition of the community as a fundamental unit involved in structural change. Structural changes affect- ing the community will not take place until and unless there is sufficient under- standing, information, and motivation by decision-makers to make such changes both possible and palatable at the community level. NEED FOR RURAL DEVELOPMENT Hural communities lag behind the rest of the Nation in many aspects vital to the social and economic development of our country. Chief among these are inadequate education, family income, job training, employment opportunities, health, housing, and community institutions and facilities that make for a viable society. Moreover, rural areas do not have the organizations, agencies, and profes- sional personnel common to large metropolitan areas which provide leadership and technical assistance for coordinated development of all aspects of their community. The large metropolitan areas have planning commissions and plan- ning authorities and many subdivisions of government to carry out specific programs of transportation, urban renewal, housing, health, water and sewer development, job training and similar aspects of human, natural, and economic development. These planning commissions and governmental subdivisions usually have full-time technical staffs which make studies, forecast needs, and prepare proposals for use of government grant and loan programs. Consequently, the urban areas get the lion's share of government assistance. The fact that half of this nation's poverty exists in rural areas but that a majority of funds now go to metropolitan areas illustrates this impact. PROBLEMS IMPOSED BY RAPID PROGRAM IMPLEMENTATION Those who live in rural areas are often viewed as ultra-conservative and as slow in adapting to new ideas. The very fact that our agricultural industry has moved forward rapidly during the past two decades indicates that this is not necessarily true. Rural Americans will change and will innovate providing they have a fall andcrstanding and appreciation of the reason for change and are convinced the changes can be beneficial for them. If we review the history of agricultural development we recall the early difficult days of the county agent whose first job was to win the friendship and confidence of the farmer whom he sought to serve. Only after this confidence was achieved was the agent able to provide the innovktive stimulation which resulted in prog- ress in agricultural production techniques. As we turn to the present day, it would appear that some parallels can be drawn. The types of problems faced in rural America are many and they are highly com- plex. They involve communities, regions, and trade areas which often transcend not only county but state lines. The concern regarding local problems is relatively high. The factors that are forcing changes upon rural America are much less well understood. Local resi- dents should not be expected to apply corrective innovations until the agencies assisting them win confidence and trunt. The rapid evolution of many different programs in a short span of time has, however, tended to confuse the small town resident and has resulted in suspicion of intent and outright opposition in some cases. Testimony already presented to this Oonimittee has indicated some disenchant- ment at the local level with many federal development programs. Secretary Freeman in appearing before this Committee on June 6 acknowledged. that, ". . . some local communities are prejudiced against federal assistance." He then emphasized the serious efforts being made within the executive branch of government to coordinate development programs and to develop model applica- tions to cut down on duplication of effort and complexity of filing for federal assistance. PROLIFERATION OF GOVERNMENT PROGRAMS The proliferation of government assistance programs and the lack of technical assistance for dealing with them in a meaningful manner has caused confusion and frustration in rural areas. The latest Catalog of Federal Assistance Pro- 80-084-67-pt. 2-44 PAGENO="0690" 1528 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 grams, published by the Office of Economic Opportunity on June 1, 1967, lists 459 different "domestic programs to assist the American people in furthering their social and economic progress." With such a vast array of programs and the complicated and variable pro- cedures and requirements for obtaining assistance under theni, it is no wonder that rural communities not only lag behind but also suffer untold frustration in trying to take advantage of these programs. In my own state of Colorado one of the few successful rural community proposals has been the direct result of one individual who was willing to work almost full-time in studying various programs and in seeking guidance in proposal development. This individual has suggested that programs provide staff assistance to rural communities to assist local leadership in understanding required procedures and proposal requirements. PROGRAM OVERLAP The charts attached as Appendix A are illustrative of another type of prob- lem-program overlap. Figure 1 shows Colorado counties involved in the South- ern Colorado Economic Development District. Two of the same counties have been designated as redevelopment counties. Figure 2 outlines the area served by an OEO sponsored development project. Figure 3 shows area Economic Devel- opment Regions established by a division of state government. The counties previously shown are included. These regions have now been consolidated into a statewide group for compliance with statewide planning under the Federal Planning Assistance Program. Figure 4 indicates counties in the Four Corners Economic Development Region for assistance under the Public Works and Eco- nomic Development Act of 1965. And finally we note the same rural counties embraced within a newly designated Federation of Rocky Mountain States under a Department of Commerce grant. It is small wonder that local residents are confused-and these are only selected illustrations, certainly not a complete roster of available programs. NEED FOR COORDINATED DEVELOPMENT OF ALL RESOURCES As important as federal assistance programs are, they are but a resource and not the total answer to the problems of rural areas. Until local people are with, the limitations of these resources, and how they can best develop them, rural development fostered by government assistance programs will at best be only on a piece-meal basis and at worst will build antagonism between the federal agencies and local governments. Local people must know the causes as well as the cures for their own unique situation. This requires knowledge and understanding of social and economic forces, knowledge of the close association between. educational levels and eco- nomic well-being, knowledge of structural imbalances within their area, knowl- edge of the human~ economic, and natural resources of their area, and-most of all-it requires the will and ability to do something about their situation. Once the ~eaders of rural areas are motivated and trained to carefully analyze their situation, they are then-and only then-in position to study the various. alternatives for development including the use of government assistance pro- grams. We spoke earlier of the need for educational programs if development efforts are to be successful. As I personally see it, there has been heavy emphasis on action phases of a myriad of new programs, but too little thought and almost no financial support to educational efforts to make the action phases fully effective. Cooperative Extension has attempted to modify its programs to assist. A few examples may illustrate. In Teviewing them, plea~se keep in mind the fact that only 8700,000 has been appropriated nationally to support state programs of Corn- mirnity and Resource Development in the last several years. ROLE OF THE COOPERATIVE EXTENSION SERVICE IN RURAL DEVELOPMENT Extension resource development work is directed at developing and marshal- ing the leadership of rural communities in a concerted development effort. Through systematic analysis of needs and opportunities, community leaders are PAGENO="0691" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1529 assisted in planning and developing a wide range of projects for improving human economic, and natural resources. Such work has many facets. It most gen~erally starts with the identification and solution of a pressing problem or opportunity. However, once people are involved in study, analysis, and action they soon see there are many other opportunities which can he `developed. One accomplishment fosters confidence and leads to the determination `to take on more complex problems. Whole communities and re- gions have been revitalized through this approach. Two specific examples of how this process has worked in Arkansas are attached as Appendix B. Cooperative Extension is currently working with more than 31o0 county development groups and 565 area development councils involving more than 100,000 people. In addition, it is working with more than 2300 chambers of corn- merce, 1100 industrial development corporations, and 3600 units of local government. Latest reports on the number of new economic development projects which Extension workers helped to initiate during the last six months of 1966 show: Agricultural marketing and processing 2, 135 Nonagricultural business and ii1dustry 1, 488 Recreation and tourist businesses 1, 644 Other economic development projects 358 Extension workers estimate that some 55,176 new jobs were created during the past year through economic development, projects in which they, provided as- sistance, not to speak of added income and expansion of local business activity. This same report shows that Extension workers assisted in the planning and development of the following number of new community services and facilites during the past six months: Water and/or sewer projects 1, 495 Schools and education programs 1. 443 Recreation projects 1, 517 Health facilities and services 755 Other public facilities and services 508 In the area of human development, Extension assisted community groups' in planning and developing more than 941 job training programs involving 28,500 persons during the last six months of 19~6. Extension has helped more than 700 communities organize OEO community action agencies and has assisted these agencies develop more than 1,700 programs. Extension is currently supervising 4,057 professional and subprofessional workers assigned th OEO and related low- income projects. Appendix 0 lists typical work by Extension in support of agency programs in the. State of Mississippi. ` These results are encouraging but represent only a fraction `of the program effort needed. It must be admitted, however,' that these results have been achieved primarily `by staff overload and program reorientation. Extension's edu- cational efforts to support expanded development programs of other agencies have `been supported by almost no increase in staff or operating `budgets.. It is not reasonable to expect this imbalance `to continue if development efforts are to achieve their maximum potential. THE "NEW AGENCY" PHILOSOPHY I would be less than candid with this Committee if I failed to express to you a concern that has permeated the discuOsion of develoment program.s and inter- agency coordilnation in many Extension~ Directors' `meetings. I am speaking simply, of the philosophy that, all "new" programs designed to `serve rural America `or to serve the development process generally must be conducted `by com- pletely new agencies in order to protect the legislative .inten.t and administrative philOsophy behind the new `program `that mi'ght,be involved. ` .. PAGENO="0692" 1530 ECONOMIC OPPORTtINITY ACT AMENDMENTS OF 1967 As a public administrator `I will readily admit that established organizations are continually plagued by the problem of updating their programs, their organiza- tions, and their activities to meet urgent current needs. Nevertheless, I feel quite strongly that in processes as complicated as development programs, which require public confidence and involvement, it is not always desirable to have entirely new agency leadership involved. It may ie entirely appropriate that a new agency be organized for some new programs in order to maintain the focus of activity intended. In this process, however, it appears that particularly in rural America, established organizations which have the confidence of local people must not and should not be bypassed or acceptance of the new program is lessened. We have found that the extension agents cannot over-identify with some programs and maintain a position of objective leadership. But the agent can greatly assist local people to understand and use programs if given the time and staff support necessary to obtain public understanding of the primary issues, program ob- jectives, or benefits. MULTIPLICITY OF PLANNING BODIES The multiplicity of organizations seeking to provide assistance in rural America has already been commented upon. One factor which should be stressed involves the planning arrangements and involvement of local leadership in program de- velopment and activity. Many of the older organizations, and this is espec-ially true of Cooperative Ex- tension, have for years utilized local leadership on advisory committees in order to develop programs which are of greatest effectiveness for local people. As new programs have been conceived in recent years, local leadership has also ieen sought in one mechanism or another to assist the program. All too often agencies ignore the fact that the same people who are considered leaders for one program will also be used as leaders for another. When develop- ment programs involving different procedures and similar objectives involve the same people in different programs, local leadership becomes overburdened with detail, confused by differences in procedures, and disenchanted with `all of the activities as `a final result of the experience. The disenchantment of overworked and scarce lay leadership is resulting in more vocal ci~iticism of `the multiplicity of planning bodies and the variance in procedures required to obtain assistance under different programs. Until or unless this can be corrected, it may be expected that serious criticism will `be received from local areas. RECOMMENDATIONS It is not our purpose today to critiëize any agency or activity. We would hope, however, that a review of problems a't the local level would a'ssist your Com- mittee in evaluating the following recommendations: 1. Reduced Muitipliolty of Planning Bodies.-TJnless the federal govern- ment can provide Some leadership in standardizing `the planning `procedures and in using an over-all planning group, the proliferation of planning groups and resultant disenchantment at the local' level will continue. Any `steps that could be taken to standardize procedures for receiving grants and to reduce planning `to a `single or at' least a limited number of planning groups for all programs would materially increase effectiveness and reduce criticism. 2. Establ~sl& an Educational Base for Action Programs.-Action pro- grams implemented without the understanding of local communities are seldom fully effective. An educational base for action programs will result in an informed public which can more effectively infuse existing local needs into programs. A continuing education-information capability to in- volve local leadership and inform local citizens of program concepts, pur- poses, and activities should be provided. Initially this function should be given far greater priority in establishing new programs. 3. E~peeiflc Earmarking of Funds far Rural Areas.-Rural communities do not have a professional talent to enable them to compete effectively with metropolitan regions for federal assistance. Specific earmarking of funds to be used in rural areas would protect the interests of rural Americans and equalize federal assistance. PAGENO="0693" a 0 0 a 0 0 ci a H APPENDIX A COLORADO FIGuRE 1.-Southern Colorado Economic Development District. PAGENO="0694" t~j CD 0 CD 0 0 H ci H CD H C 0 L 0 R A DO 1~IGUuJ~ 2.-Lazy S Coniiiiuui~y' Resource Development Project. PAGENO="0695" CO L 0 R ADO*~ 0 0 C-) 0 0 H H C) H L~~1 H CD 0 C) C.~i FIGUUE 3-Colorado Economic Development Regions as established by the State Division of Commerce and Development. PAGENO="0696" 1534 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF. 1967 ECONOMIC DEVELOPMENT REGION L AR~Z3NA ty Se reS~'y k'nT. Ccnn~~ e~5S s~urre~e sS t'~e SStee. ~ ~t?~e'P~hCW5r~.5 an45ccC~rtA~Sc5 c~5sPi59-536). FIGun1~ 4.-Four Corners Economic Development Region. PAGENO="0697" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1535 FIGURE5 * op ~O~I~J/I~, ST~7ES EconO,ni~ Development Region PAGENO="0698" 1536 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 APPENDIX B-DEVELOPMENT PROGRAM CooRDINATION IN ARKANSAS The Western Arkansas Economic Development was designated in February 6. 1967 and funded in March of 1967. The counties involved were Crawford, Sebas- tian, Franklin. Logan, Scott. and Polk. It was necessary that each county update its Overall Economic Development Plan and submit an annual progress report so that an Area OEDP could be developed for counties that were in compliance with EPA. County Agents in the six county area were requested by the State EDA Field Coordinator to assume the leadership in organizing county leadership to meet with the county requirements prior to development of an Area OEDP. County Development Councils previously organized for Overall Economic Development were mutually agreed upon as the organized group to update the OEDP's. Once this was com- pleted, public hearings in each county were held by the Director of the Economic Development District, to provide further evidence of immediate and long range needs for economic development. Again the county agents working in connection with the Resource Development Agent assumed the responsibilities of selecting county-wide leadership for the public meetings and to provide current data on agriculture development. When this phase was completed work was begun on a preliminary Area OEDP. A request was again made from the director of the district to the Area Resource Development Agent for an identification of specific problems and opportunities for agriculture business oriented industries. Each county through the County Agent presented economic data to support leadership thinking that there were further opportunities in certain areas for further agriculture business develop- ment. The Resource Development Agent then prepared this on an area basis and submitted this to the director for use in developing an area OEDP. Four special- ists on a state basis, The Extension Poultryman, Extension Vegetable Marketing Specialist. Extension Livestock Marketing Specialist and Extension Forest Prod- ucts Marketing Specialist, also contributed to the area OEDP by making available to the Area Resource Development Agent, economic data on the six county area to use in projections for the OEDP. Cooperation with the Director of the Western Arkansas Development District has been excellent in every w-ay. Office conferences are set up periodically to discuss activities where there is mutual concern. Some examples are working with county and city leadership on industrial development, commercial recrea- tion. educational facilities, OEO and municipal water systems for industrial development. E~rten.sion's chief contribution is in working with local leadership to the point where they can use specialized services in planning, financing, and action. With the enactment of the Economic Development Act of 1965, Franklin County w-as designated as a re-development area eligible for 80% grants with EDA for assistance in Economic Development. As soon as interpretations of the act were printed the Franklin County Ex- tension Agent met with the Ozark Chamber of Commerce Industrial Committee and explained the features of the act and gave examples of how the area could make use of these funds in economic development. Shortly thereafter a large in- dustry wanted to locate in the area but could locate only if certain facilities were provided including additional industrial water, an additional sewer, an in- dustrial street. an airport, rail barge facilities across the Arkansas River, an industrial site and evidence of an adequate labor supply. From the previous discussion of the Economic Development Act of 1965, lead- ership recognized that it was possible to enter negotiations with the industry to try to work out plans for locating in the area. The County Development Council, the County Extension Agent, Job Develop- ment Coordinator with the community action program. Chamber of Commerce, and State Employment Security Division of the Department of Labor, coordi- nated efforts to conduct a detailed labor survey through the smaller communities program. This was used to prove to the industry that an adequate supply of labor existed. The Chamber of Commerce Industry Committee (of which the County Agent is a member) established contact with the State Field Coordina- tor for EPA to plan the facilities needed and start an application for EPA grants. In the meantime the Western Arkansas Economic Development District was funded and the Director assumed the application work and coordination with the EDA. The application has been presented to EDA. A plan for county PAGENO="0699" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1537 financing has been developed. An option has been executed for the purchase of industrial land. The project is awaiting approval by EDA. The County Agent and the Area Resource Development Agent have assumed important roles in bringing this about. In addition to securing resource people at critical times they have gathered economic data necessary for applications, met with indus- try representatives, with leaders, have attended discussion meetings with financing organizations and have explained the industrial program to county wide groups and organizations. APPENDIX C-TYPICAL RUEAL DEVELOPMENT ACTIVITIES CONDUCTED BY MIS- SISSIPPI COOPERATIVE EXTENSION SERVICE A. Public Housing: Individual arid group contact has been made with public housing tenants. Educational programs with both adults and youth are con- ducted in subject matter areas such as (1) FoodS and Nutrition, (2) Health and Sanitation, (3) Good Housekeeping Practices, (4) Family Living, (5) Care and Maintenance of Household Furnishings, and (6)' Clothing. The state and regional administrative staffs of the Public I-lousing Authority have requested Extension increase this educational program. Only a token amount of this is being done because of limited staff and funds. Every housing authority in Missis- sippi can be serviced by Extension provided adequate funds can be niade avail- able. B~ Operation HELP, Mississippi Department of Public `Welfare: Extension Home. Economists in 82 (all) counties served on advisory committees, prepared and ga~ e demonstiations on use of donated foods wrote newsletters compiled recipes, and presented radio and television programs. Overall, ill Extension workers devoted 7,575 hours to this program. . C. Economic Opportunity Act, Title III, (Loans): The provisions of the Eco- noinic Opportunity Act, Title III, were explained to low-income people in 66 of 82 Mississippi counties. Extension and FHA representatives contacted 2,521 people. During and after this work, `the number of OEO loans rose from lOS in January to 241 in February and to 490 in March 1966. D. Rural Community Water Associations: One hundred thirteen rural commu- nities were assisted with organization of community water associations in co- operation with Farmers Home Administration loans. Establishment of community water systems will mean as much to rural residents as rural electrification did during the 1930's. E. Homemakers: Direct and specific assistance has been beamed to the low- income homemaker audiences in Mississippi. These efforts have been extended to individuals and groups. One state specialist has been devoting the majority of her time toward reaching rural homemakers who are not in organized groups. She provides two weeks of classes in areas such as money management, foods and nutrition, clothing, gardening, and family living. In the last six months she has been in eleven (11) counties and will visit fifteen (15) others by June 1968. P. County Home Economists have been active in reaching similar homemakers. A special study in one Extension `district (20 counties) showed that' indigent' and deprived families have been effectively reached by. the Extension Home Econo- mists as follows: 1. The Home Economists have served in advisory capacities in each of the counties to various poverty programs. Many of them have regularly served On county-wide committees with other organizations and agencies in plan- ning, developing, and implementing "education'for action" programs. 2. The Extension Home Economists have utilized the experience they had ~previously acquired in. `training volunteer leaders of adult and 4-H Home Economics groups, for the teaching `of paid indigenous non-professionals who are assisting with anti-poverty programs. They have also prevailed upon' `the volunteer leaders, whom they had previously trained `through Extension Homemaker groups, to receive additional training for teaching the deprived individuals and families. 3. The Home Economists have trained and advised with poverty program instructors to present specific demonstrations or in-depth programs (as in management, sewing, child care, foods and nutrition). 4. A vast amount of Extension information (i.e. bulletins, pamphlets, leaflets and publications) have been and are still being given to individuals, welfare employees and other agencies, and to all of `the anti-poverty program PAGENO="0700" 1538 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 groups who request help. Countless mimeographed recipes, menus, and con- sumer helps are prepared in the Extension Home Economists' offices also and are made available to low-income families, Such bulletins and leaflets have been distributed in all twenty counties: at public meetings (as community meetings, through PTA groups, etc.). through schools and churches. at demonstrations, and special workshops. at commodity distribution centers. through grocery stores and super markets. home visits. given to the Welfare Department and various anti-poverty groups. mailed out from the Home Economists' offices. announced through the newspaper and over radio. G. Umtnty Planning: In 1962 the MCES assumed responsibility for organizing and providing educational background materials to County Development or- ganizations on the development, editing, and printing of comprehensive Overall Economic Development Plans (OEDP's). The county development organization consists of a broadly based citizen leadership group. Attention is given to planning for low-income groups as a part of these overall plans. Mr. GOODELL. My own reaction from studying many of the programs in great detail, administered through the Department of Agriculture, is a comparable uneasiness, the ready acceptance of that feeling that the only place you can get mnovative programs is from some new agency or separate agency. Without asking you tO repeat the description of your existing pro- grams, I think that you believe that you do have many innovative programs and many new approaches to rural development that are originating in the Department of Agriculture today. Secretary FREEMAN. That is correct. Mr. GOODETJL. You believe the Department of Agriculture is capable of more innovation and new approaches to rural development? Chairman PERKINS. Would the gentleman yield to me? Mr. GOODELL. I would like to get his answer. Secretary FREEMAN. Yes. Mr. GOODELL. As you come up here bearing the banner of the ad- ministration advocating the continuation of OEO you are not com- pletely denigrating the ability of your own Department to administer these programs with some degree of innovation. Secretary FREEMAN. I thought I was up here with flags flying for the U.S. Department of Agriculture. Don't misunderstand me. Mr. G00DELL. It is that other little flag labeled OEO that keeps bothering me. Secretary FREEMAN. There is problem enough, room enough, and need enough for both to be at full speed ahead. Mr. GOODELL. I don't know where we start to cope with proliferation of a new agency. One can always say the problems are so immense that before long you could have one, two, five, seven, even 15 agencies oper- ating all in one area. Unfortunately, I think we have done too much of that in the past. Perhaps~ we had better start writing some innovation authority into the law for existing agencies rather than setting up a new agency that overlaps. I yield, Mr. Chairman. Chairman PERKINS. I was hoping the witness could come up with the more comprehensive statement and unless there is objection as to the statement being inserted in the record at this point, I would like to ask PAGENO="0701" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1539 permission as to just what you think will constitute a well-balanced impact program for the rural areas. Would you compile that statement and submit it to the record for us, Mr. Secretary? Secretary FREEMAN. Yes; I would be very happy to do that. Chairman PERKINS. The statement will be inserted in the record at this point. (Statement referred to follows:) WELL BALANCED IMPACTED PROGRAM FOR RURAL AREAS The USDA visualizes and is pursuing a tliree~pronged approach to the problem of impacted poverty in rural areas. Impacted poverty are those families often referred to as "boxed in." These are poor people who for the need of an oppor- tunity have not been able to share in the general rise in our nation's standard of living. Examples are older persons who lack proper skills to obtain a job or minority groups that have heretofore been the victims of discrimination. Among this group are the current "unemployables" who through one or more programs may be elevated out of poverty. The first prong of this approach is that of using every opportunity we have in our existing programs to help those on the threshold of the impacted group from falling into it. Our regular operating program of FHA is helping many of these rural people. For example, about three-fourths of FHA farm loans for fertilizer, equipment, land purchases and development go to families living on $3,000 a year or less. Then too, these programs may be used by the impacted once they have climbed the ladder part way from the poverty pit. For example, a work experience program may make it possible for a poor person to get a job and with care this person could save enough to participate in a self-help housing program. The second prong of this approach is in our recent effort under Executive Order 11307 to provide outreach to rural areas to see that all rural people benefit from the existing poverty programs now available from other agencies. This, of course, requires the cooperation of all agencies of the Federal Govern- ment. Innovations of existing programs and special type projects from versatile Community Action Program funds to provide training and employment and income potential in such areas as crafts, beautification, library work, child care for working mothers, sewing, and subprofessional aides to ongoing pro- grams of this and ether departments. The third prong of this approach will be to continually work on new proto- types that are directed at these impacted poor which have still not been helped. These prototypes might include: (1) Transitional housing for the homeless with concurrent training, work experience, family uplifting, and opportunity to become more self-sufficient. (2) Career development through development of aide positions. These heads of households would be placed in a program that would match their increasing skills to the various levels of aide positions. This might take the form of a Rural Community Development Aide Corps which would establish a series of rural agri-business occupations that initially might support USDA programs in reaching the poor but lead to these persons' employment in private industry. (3) Establishment of worker-type cooperatives capable of performing community service and home service jobs. In this connection Dr. Weitner, working with Atlanta University has developed a plan for a type of "Fix it" shops which could easily be perpetuated in any given community on a cooperative basis. We feel the framework has been established. In order to provide the program, it will require substantial resources, particularly for rural community action in OEO, if the poorest of the poor are to be effectively reached. Mr. GOODELL. No objection, I think it would be very helpful. You listed certain programs under your jurisdiction. I will quote you exactly: . . . "Our Farmers Home Administration advanced more than a billion PAGENO="0702" 1540 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 dollars a year in loans to rural America, many of them at. the poverty level." Can you give us an idea how many recipients under the FHA pro- gram are at the poverty level? Secret.ary FREEMAN. I would say as a. rule, of thumb that 75 percent of the loans that were made under the overall FHA program, cer- tainly t.hat are made to individuals, are to those who do not have a net income of $3,000 or more. Mr. GOODELL. Using the standard of ~3,000 for two people, a couple? Secretary FREEMAN. Yes. Mr. GOODELL. Do you utilize upward standards for increased mem- bers and family-in other words, if there are four members in the family, the scale goes up? Is that your standard of poverty? Secretary FREEMAN. The accepted standard that has been used, I be- lieve, is $3,000 for a family of four. Mr. G00DELL. There have been several standards- Secretary FREEMAN. I am not being meticulously- Mr. GOODELL. There has been a good deal more sophistication be- tween what makes the difference between rural and urban family poverty and what adds an increment for each dependent. Secretary FREEMAN. I would not try to be too precise-just t.o say that FHA loans reach many, many, many people in the poverty group-and I would say roughly t.hose for a family of four with $3,000 a year or less-farm ownership loans, farm operating loans, recreation loans, housing loans, and then the loans for water and sewers which affect many, many people in these areas. Mr. GOODELL. Can you define the difference between your regular FHA loan programs as it a.ffects the poor and the FHA program that you operate under delegation from OEO? Secretary FREEMAN. First, the EO loan program is not limited to farm people. Loans can be made for nonfarm enterprises. We would not have authority to make such loans for otherwise. No. 2, the terms and conditions are more liberal than under coin- parable FHA loans. Mr. GOODELL. What are the distinctions between the recipients? Secretary FREEMAN. The EO loans go to people who are by and large in the poverty group. Mr. GOODELL. You have indicated in your estimate that about. 70 per- cent of the money ~rnder the regular FHA program goes also to these people. Is it not true, also, that under the delegated OEO program you reach a hard core poor? Secretary FREEMAN. Yes. Mr. GOODELL. You reach people who cannot qualify under your regu- la.r FHA program? Secretary FREEMAN. That. is correct. Mr. GOODELL. How do you administer this so there is not an over- lap? Do you have an arbitrary standard? Secretary FREEMAN. No, these a.re different kinds of loans. Let's take, for example, loans tha.t are for non-farm enterprises. That is a different kind of loan. Mr. GOODELL. What about your repayment schedule? Secretary FREEMAN. We are held to more stringent terms and con- PAGENO="0703" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1541 ditions under the normal operating farm loans than under an OEO loan. Mr. GOODELL. In other words, you can have more liberal terms for the repayment of the loan under the OEO program? Secretary FREEMAN. That is right. Mr. G-OODELL. When you are administering this program, I presume you do it through your local FHA committees, the poverty loans as well as the regular FHA loans? Secretary FREEMAN. That is correct. Mr. GOODELL. What guidelines do you give to your local committee? Do you tell them that for poverty loans you must only consider those who are ineligible for the regular FHA loan program? Secretary FREEMAN. In effect, yes. In the first place, as you know, no one can qualify for an FHA loan if lie can get any other kind of outside financing. Then he would come in and ask for an operating loan. The standards for repayment he might not be able to meet. If he couldn't meet them the question of whether lie might meet the same repayment standards under the OEO loan would come into play. On that basis, a loan would be made to a man who otherwise would not qualify under our normal FHA operating standards. Mr. GOODELL. If we gave the PITA the authority directly to make poverty type loans as distinct from their regular PITA program, they probably could administer the program effectively without the involve- ment of OEO. We did not give PITA the authority to move in and focus on the hard core rural poor in the basic law setting up PITA. We did give such authority to OEO by delegation to the Department of Agriculture. Secretary FREEMAN. That is correct. Mr. 000DELL. It seems to me your FITA people are just as capable of administering this program without OEO looking over their shoulders. Secretary FREEMAN. In this case the FHA-OEO relationship has actually worked extremely well, and it does have the very desirable purpose, again, of tying the entire poverty program together consistent with the principle you enunciated a moment ago-the problem of co- ordinating and integrating the program closely so there can be a maxi- mum impact from the combination. It has really worked very very well but the mere fact that here- and you could say the same thing in a sense on the Job Corps con- servation camps-the fact that this does now run through one place, even though it is substantially delegated out has, I think a very bene- ficial effect in maintaining the strong focus of emphasis on the poor and on the reaching of the very poor. Mr. GOODELL. Excuse me. Did you finish your statement? Secretary FREEMAN. I was just going to say I really think we get a better return through this system for the amount invested in terms of reaching the poor and particularly the very poor, than we would get on just a direct delegation at least at this time. Mr. GOODELL. You indicated under regular FT-TA programs you are limited to making loans to farmers for farm operations; is that correct ? Secretary FREEMAN. Yes. + PAGENO="0704" 1542 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. GOODELL. Have you authority to broaden this loan authority in the FHA program? Secretary FImE~rAN. May I take back the answer in a sense and say we received authority in 1962 to make loans for recreation purposes but not for other nonf arm purposes. I had a farmer give me a haircut 2 weeks ago down in Mississippi. He got an OEO loan to put a barber- shop in along with his farm operation, he had 80 acres of land and he was netting about $1,200 a year on the barbershop. I got a free haircut. In this instance we could not have loaned him money to have a barbershop on his farm. WTe could lend him money under the FHA program to build a house so that he could move out of the shack he was living in. In this case a family living in an incredible shack before is now living in a decent home, has a side business, and their prospects are much improved. Mr. GOODELL. I would like to give you an opportunity on the record, Mr. Secretary, to reply to some comments and statements that I have before me. One of them is part of a resolution that was passed by the rural community action director with reference to the Department of Agriculture. Here is a specific quote. The resolution, I believe, passed in Febru- ary of this year in the rural community action: It has become evident that the programs that the USDA and other Federal departments do not really reach the lowest income chronically disadvantaged people in the rural areas. Then from Mr. George Esser, Jr., executive director of the North Carolina fund: It is our observation and experience that agencies of the Department of Agri- culture are failing to make the impact that they have the ability to make be- cause they are not reaching out. By and large the U.S. Department of Agriculture bureaucracy does not be- lieve rural poor can help themselves, those who do believe it cannot communi- cate effectively with the poor. It is the experience of most persons who have worked with the rural poor that neither the Extension Service nor the Home Demonstration Agency really reach the rural poor. Both Farmers Home Administration and ASCS county committees are com- posed by and large by middle-class farmers who share the view of the U.S. Department of Agriculture bureaucracy. We have seen, for example, loan committees applying stricter standards to small farmers, many of them Negro than they do to middle-class farmers. Some of what you testified to today would appear to corroborate the basic view of the resolution and Mr. Esser of the North Carolina fund. I take it you don't entirely agree with him. I take it you would like to answer for the record. Secretary FREEMAN. I think this is a very legitimate question and it is not a very easy one to answer. Let me say first of all that the emphasis in those statements seems to be on what. might be described as the very poor-iS children in a shack living in two rooms with $250 a year income. I must say in all honesty that our programs by and large don't reach those kinds of people. They should reach them more. We reach some of them in education and nutrition, we reach them in food. We have not reached them previously in terms of improving their overall economic situation in the way that we should because our FHA programs do require some repayment capacity for housing, recreation PAGENO="0705" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1543 loans, farm operating loans, for farm ownership loans. These loans benefit thousands of extremely low income families. However we don't have the legal authority to reach, or didn't have to reach all of the very poor. No. 2, the second statement I would comment there is a tendency, and I have said this earlier, traditionally to be more oriented toward the lower middle class to the poor but not the very poor. Those that, have an oppothmity with help and `supervision and. attention' `to suc- ceed and, a reasonable prospect of repayment. For these poor bor- rowers we do a very great deal. However, when you get down to those real, bedrock very, very poor in either housing or farm operating loans or any other outside `loans, neither legally or organizationally have we been set up to do very much about them. So, .1 think that that criticism has much too broad a sweep. It ignores the many things for the poor that we really do. It does have a certain legitimacy in that we have not had the tools, that we lack disposition ,or willingness. I would remind this committee that the FHA is the successor to the Farm' Security Administration. This was one of the great innovative, creative organizations in terms of meet- ing `the problems of the depression-but all of the resources and the full legal capacity have not been available since. So I would have to say there is an element of truth in the statement where the extremely poor are concerned but the statement in its im- pact is not accurate in that it fails to recognize the very real contribu- tion being made to all `but the very, very poor. Mr. GOODELL. Are you saying you have been unable to reach the veiy, very poor in the past because you did not have the legal author ity from the Congress under the law to reach them? Secretary FREEMAN. That is exactly what I am saying. Mr. GOODELL. Have you sought, or are you now seeking in areas not covered by the OEO, the legal authority to move in this area to meet the needs of the very, very poor in the rural areas? Secretary FREEMAN. I think the authority is now available to reach the very poor in conjunction with the OEO programs In combina tion we now do have tools `to reach the very poor. Mr GOODELL In other words, to the extent you have the legal au thority now, it is through OEO to reach the very, very poor? Secretary FREEMAN. Yes. ` ". `Mr. GOODELL. You are not seeking, in any other areas not covered today by' OEO, the"authority to set `up your own programs in the Department of Agriculture to reach the very, very poor ~ Secretary FREEMAN No, because I think the programs now, at least to the extent that' the Congress is likely to pass them, are before the Congress and are. incorporated in the current programs with the amendments now before this committee. ` Mr. GOODELL. My own'feeling is that yOu are absolutely right, that you have not had the legal `authority in the past. What goes far in trying to reach the very, `very poor of the `farm areas is that you do now have the authority delegated from OEO. ` " " It ,would seem to me, `however, that `this `is `a primary area of responsibility of the Department of Agriculture~ The Department of Agriculture `is talking more and `more these days about trying to~ co- ordmate rural development 80-084-67-pt 2-45 ` ` PAGENO="0706" 1544 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF `1 967 I think it was before the Senate subcommittee where you said the Senate has assigned the responsibility for agricultural rural develop- ment within the Federal Establishment to the Secretary of Agricul- ture with a view toward better coordination and elimination of duplication. It would seem tO me: the logiáal and efficient way to have a rural development prOgram'is to put it under the jurisdiction of the Depart-. ment of Agriculture with the authority, legal authority and the obli- gation imposed by Congress that they move in this area to meet the needs of the very poor. For one thing, we certainly' don't want to be setting up farmers to produce `commodit;ies' of which w~ alreadyhave a surplus. We want to be sure there is a coordination of overall commodity needs and long- term commodity needs for some future type of operation we are setting up here. Do you have any comment on this? * Secretary F~MAx. These programs both from the standpoint of what the Federal `Government has to offer and the departments that are administering the varipus `ones and the local organizations don't lend themselves certainly at the `outset to any simple, easy,'Or standard organizational pattern. As you `well know, there'are infinite varieties placed on the `tradition and history of the various localities around the country. As such, I have not felt that we ought to try to fOrce any kind of particular administrative organizational arrangement on local communities~ Therefore, the fact that `there is some duplication on occasion and sOme overlapping is not necessarily `bad as it' has `tended to stimulate a lot more attention `and participation, a `lot' more resources' `and a lot more action where action is needed. I think `these things are' going to' work themselves out and on a pragmatic basis after a while. 1~he ne thing"ihave concluded is the' most important is nmlticdunty~planning.. ,~ *: ` I `think one' of the reasons `why `there is need for so much' planning is'because localities and local groups tend to come in and ask'for things they should not be asking for because they have not had enough assist- ance and1 help and professional guidance `and they don't have a balanced plan or program. The net result `is they will come in with a little piece of a program restricted to too `small' a'geographical area. "By the time it gets, to Washington, and there is~behind it a community `and'maybe a Governor and then a Congressman and perhaps a Senator, there are not very many people downhere that want to say no. I. don't believe that is good. "On' the other hand, if `there had been logical multicounty. careful forward planning with a balanced program and plan where the pieces do fit together then when decisions are made with regard to the kind of programs to be installed,' they would' `then receive a much more effective reception. * ` ` ` * What I am~ really saying"here is that we are `learning what kind of programs we ought to have.' Fundamentally, we make two `approaches: One is economic opportunity in the sense of developing resources, providing jobs, atfracting industry, `building a community base. That `is one part'of~t, so there will.be. jobs, opportunities, and serv- ices. `Closely related to that `but in a sense. at least in the initial stages, a special kind of problem is that of the poor `and the, very poor. PAGENO="0707" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1 9 6 7 1545 OEO has concentrated and necessarily so and importantly so on reaching a group of poor that legally, and as a matter of tradition, and practice, `tnd resources, have not been reached What we really need to do now is mesh both of these kinds of pro grain efloits into a common approach so that you will have an alle viation on these miserably poOr conditions with food if that is what is called for, opportunity for training and education and some progress and the jobs that make it possible for people to use the training. This in turn requires resource development, protection of watei, the de velopment of the public services, health, education, recreation, high- ways, `tnd the whole thing Now, to put a program together that is compi ehensive and basic, reaching in effect from the very, very poor to the overall community woiking to develop resources and provide jobs, is obviously a mam moth operation It is not gomg to lend itself to any clear and dogmatic oigamza tional plan all over the country but is going to come about from a whole host of diverse and varying influences coming to bear upon ~ll the different things that need to be done Mr GOODELL Many of us are deeply concerned thit the war on pov erty has not directed enough attention to the problems of the rural poor In the first place, the community action programs were designed with the guidelines and standards for urban situations These did not automatically or easily fit into the unique problems of the rural area are concerned about it because it is the rural areas that ire one of the primary sources of the urban problems Secretary FRLEMAN That is correct Mr G00DIJLL I refer to the migration of the very poor from the rural are'is into the urban areas There is a very ste'~dy and increasing migi ation going on that causes the tremendous problems in the urban When they get to the urban aieas it is much more expensive and much more difficult in m'iny inst~nces to reach them `tnd help them than it would have been with an imaginative rural development pro- gram which kept them in an area where they h'~d some opportunity and where many of them would have preferred to stay generally I take it you generally agree with that? Secret~ ry FREEM &i~ I do generally agree with that, yes Mr GOODELL I w'ts wondering if you ever responded to the Presi dent's National Advisory Commission on Rural Poverty that there be established in the Depirtment of Agriculture an Assistant Secretary who would be solely and exclusively concerned with rural development Secretaiy Fr~rn'r ~ I was not particularly impressed with that recommendation because in effect we h~ve that now The Assistant Secretary for Conservation and Ruial Development, Mr John Baker, is focusing constan~ly on precisely this So, for `ill prictical purposes, we do have such a concentration at this time Mr GOODELL Did you respond to Mr Resnick and indicate to hun it w as your viewpoint ~ hen he made that suggestion ~ Secretary FREEMAN No Mr GOODELL Apparently after he ch'u~ed the hearings on this whole question and had given some thought to it, he felt your present PAGENO="0708" 1546 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 administrative structure did not give enough emphasis to the whole broad area of rural development. Secretary FREEMAN. I have not had occasion to discuss that with them. I always welcome constructive suggestions but I do think this is an area where we have reorganized the department with this target in mind and where the highest attention is being focused on it on my part and at an assistant secretaryship level right now. In addition we have a program here in Washington to maintain close relationships with the other departments of Government and to carry forward our"Outreach" program. So, I would be of the opinion, not wanting to be dogmatic about. it, that we are pretty well organized with this goal in mind. Mr. GOODELL. Thank you, Mr. Secretary. chairman PERKINS. Mr. Scherle, further questions? Mr. SCHERLE. Mr. Secretary, I am sure I speak for many thousands of farmers throughout the. united States, being one myself, I think so much of this so-called prosperity that we hear about from you and the President is all on paper-something like bank notes. ~Agriculture in itself is very unhappy for the simple reason that they can look around and see that in other related industties *the economy has advanced quite rapidly. The majority of farmers in America today feel cheated, they feel resentful because they only have 65 percent of the purchasing power that other people enjoy in related industry. Secretary FREEMAN. Might I point out to you that. is 15 percent more than they had when I became Secretary of Agriculture? Mr. SCHERLE. Mr. Freeman, I know what they have today and I saw an article not too long ago and I don't know whether this was your recommendation or President Joimson's that there are in excess in America today 11/2 million too many farmers. Now, was thisstatement yours or was this a misquote? Secretary FREEMAN. That statement was not made by me at any time and it was not made by the President at any time. That is a totally fictitious statement that has been dreamed out of the air someplace as a number of your statements so obviously have. Mr. SCHERLE. I must be reading strange newspapers. Secretary FREEMAN. I agree with you. Mr. SCHERLE. We take 135 newspapers from our~ district. I can't see where they are all wrong. Secretary FREEMAN. You read 135 a week and do all those news- papers agree? Mr~ SCHERLE. With the exception of your quotes. Secretary FREEMAN~ You must have remarkable newspapers inIowa if you have 135 agreeing with each other and you read them all week. You are a pretty learned man. Mr. SCHERLE. They are all in agreement as to what you have said. I find there are more and more people leaving the farms. But those farmers staying on the farm are going deeper and deeper in debt. My question at this time is: Do yo~i or do you not believe in farm unionization? Do you think that the farmworkers should be unionized? Secretary FREEMAN. I am not quite sure what you mean. What do you mean by "unionized"? Do you mean should farmers have the right to join a union if they want to? PAGENO="0709" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1547 Mr. SCHERLE. Do you believe that farmworkers should be union- ized? Secretary FREEMAN. I don't have an opinion on that one way or the other. That is up to the farmers. Mr. SCHERLE. Do you believe as do some members of your Cabinet that they should be unionized? Let's take the migrant worker Secretary FREEMAN. I think they should have the right to jom a union just like anybody else has the right to join a union. I don't believe m discriminatmg against farmers Mr. SOHERLE. Do you think unionizing the farmers ivould enhance the economy of the farm operators? Secretary FREEMAN. In some cases it would and in some individual cases it might not Mr SCHERLE Would you explain what you mean by "it would and it would not"? Secretary FREEMAN I think in some cases an individual farm oper- ator, if he were dealing with a group that had seen fit to come together and organize, might be able to get more skilled labor and would have a more efficient operation. In some places that might not be the case. Mr. SCHERLE. You don't have any reference to harvesttime do you? Secretary FREEMAN I ha~ e no reference to hai vesttime Mr SCHERLE This is the only tune that they would h~ve supreme bargaining powei-at hark esttime-is it not? Secretary FREEMAN. I don't know. Mr. SCHERLE. You are the Secretary of Agriculture and you are a farmer-I know you come from a farm State, yet. you say you do not know the answer to that question. Secretary FREEMAN. You are answering your own question so I don't have to answer it. Mr. SCHERLE. I have no intention of arguing that point, Mr. Secre- tary. I will let the record speak for itself. May I now ask what you mean by depressed areas in rural America? Secretary FREEMAN I don't have any such defimtion before me and that phrase has not been used before today. Mr. SCHERLE. Again, may I respectfully refer you to the record, Mr. Secretary, which speaks for itself. Let us test depressed or dis- tressed areas. What is your definition of these words? What do they mean to you ~ Secretary FREEMAN. I don't have any particular definition for that term, either Mr. SCHERLE. I have an article here that concerns your visit to southeast Iowa, I believe last week, when you were there to find new ideas to implement a program that might be beneficial in raising the economy of rural America. I read here a remark, and it was in your testimony-you read it here this morning-you iemarked th'it the people weie `mgry when Centre- ville was labeled a depressed area. It is on page 20 of your statement. Secretary FREEMAN This referred to the period back in 1962 under tle ABA program where certain areas that had a given number of PAGENO="0710" 1548 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF .1967 unemployed and a given level of income came under, that act and, therefore, were entitled to certain loans and assistance. I think that-. . . Mr Scnriu~ You were Seci etary of Agricultui e at that time ~ Secretary FREEMAN Yes Mr SCHERLE Did you develop this term or did it ]ust come out of the present predicament you arein or why was it used? Secretary FREEMAN I ha~ e forgotten whether the term was actu'~lly used in the law passed by the Congress The chairman might remember Did ABA come before this committee, Mr Chairman ~ Chairman PERKINS No, it came before the Bankmg and Currency Committee Secretary FREEMAN Whether that phrase was used in the law or not, I don't remember, but it got to be used in common parlance. Those areas around the Nation, which because of their limited economic base could qualify for loans under ABA, were `generally described as dis- tressed counties. ` . . . . , That is what Mr Wilson the local banker thei e i eferred to in that case Mr SCHERLE I have one other example here I would like to refer to at this time We were talking about helping those in depressed ,o''r distressed areas, poverty areas, with $3,000 mcome or less It is my understanding this progiam was mnovated under OEO to help raise these people' up from their level of poverty. Do you think training chicken pickers in southwestern Iowa in ~n aiea where there is no demaiid for them, a waste of money? . Secretary FREEMAN. No, I don't think so. . Mr SCHERLE What would you do with them aftei you trained them? ` ` ` ` ` . Secretary FREEMAN. You would help them find a job. Mr. SdHERLE. `Doing what? .` ` ` Secretary FREEMAN. Working' in the local poultry processing plant. Mr. SCHERLE. Mr. Secretary, you appear `to be a little backward since these plants are at the present time `completely automated. There is very little hand chicken-picking going on anywhere to my knowl- edge beyond,.perhaps, individual farms. ` , `Secretary FREEMAN. I must' say `I am. not very' expert on chicken picking Mr. SCHERLE. Apparently none of the OEO people are. `The othe~' thing that I have here is that'the OEO hires people in the poverty group to come in and work at the rate of $1.25 an hour and pay'them `in script similar to Monopoly-typemoney. , ` Would you say this was degrading? ` Secretary' FREEMAN. I have never `heard of any such instance and know nothing whatsoever about it. ` . . Mr. SCHERLE.. We have one of these projects operating in `my, dis- trict. This is the type of thing I have been making reference to today. Why do you have a project like the illustration I have outlined? Secretary FREEMAN. What do you have reference to?. I can't understand your question.' It does nof make any sense., Mr. SCHERLE. I don't think that the hiring of chicken pluckers and paying the poor with "play" money makes any sense either. It is a shameful waste of taxpayers' money. Secretary FRE1~i~N. Your question does not make sense. Mr. SCHERLE. I have been citing a particular example-a statement PAGENO="0711" ECONOMIC OPPORTUNITY ACT ~ AMENDMENTS OF ~ I 9 6 7 1549 of f'~ct My question to you was Why do you have such projects in existence ? Do you have any facts you can cite to refute my statement? Secretary FREEMAN I thought you were questioning me Mr SOHERLE The record would seem to indicate, Mr Secretary, that you do not know what this is all about SecrBt~ry FRrLMAN If you want me to sit here and listen to you make st'itements I will sit and relax and listen to you Mr. SOHERLE. With all due respect to the position you hold, Mr. Sec- retary, from some of the evasive responses or answers I get from you, perhaps it would be better if you would listen to me, a respect, I might add, thit you fail to show Members of Congress at times I yield back the balance of my time. Chairman PERKINS. I thank you for your appearance here, Mr. Secretary. In my opinion you have made an excellent statement. I personally feel that we need more concentration in the rural areas. Your point of ~ iew th'it it is more effective to coordinate all of our efforts through the Office of Economic Opportunity at present than to utilize independently your department on rural poverty problems has been most helpful to the committee. Again, thank you very much. At this time the committee will recess until 2p m (Whereupon, at 1 p.m. the hearing was recessed to reconvene at 2 p m the same day) AFTER RECESS (The committee reconvened at 2 10 p m, Hon Carl D Perkins, chairman of the committee, presiding) Chairman PERKINS The committee will come to order I w'int to take this opportunity to welcome Secretary Stewart Udall back before this committee I personally feel that the Secretary of Interior is one of our great Ameiicans I had mixed emotions when he left the committee to assume his Cabinet post I hated to see us lose his intelligent and effective hand on legislative matters but was de lighted that the affairs of the Department of Interior would be in able leadership He has been before this committee so many times, we more or less feel that he still belongs, is still part and parcel of this corn mittee It is a real pleasure for me to welcome you here, Mr. Secretary, and we ~re delighted to hear your viewpoint As you know, we are having a debate in the Congress whether to keep the present Economic Opportunity Act under the Office of Eco nornic Opportunity or transfer the functions to the various Federal agencies We are delighted to have you here with us today STATEMENT OP HON STEWART L UDALL, SECRETARY OP THE INTERIOR, ACCOMPANIED BY ROBERT BENNETT, COMMIS- SIONER OP INDIAN AFFAIRS, AND BARNEY OLD COYOTE~, SUPERVISOR, JOB CORPS CONSERVATION PROGRAM, DEPART MENT OP THE INTERIOR Secretary UDALL Thank you very much, Mr Chairm'tn It is a real ple'~sure to be back before my old committee in these imposing surroundings and, also, a~ I look at the nameplates, to realize hOw nearthe throne I wOuld have been had 1 stayed. PAGENO="0712" 1550 ECONOMIC OPPORTtTNITY ACT AMENDMENTS OF 1967 Mr. Chairman, I am surrounded here by some of my best Indians. I would like to introduce them, if I may. Commissioner Bob Bennett, who is the Commissioner of Indian Affairs, a.nd Mr. Barney Old Coyote, who supervises the Department's Job Corps conservation program. I have a prepared statement. I would like to file it with the com- mittee, and I will read most of it., and summarize some of the high- lights, if I may, Mr. Chairman. Chairman PERKINS. Go ahead. Proceed in any manner you prefer, Mr. Secretary. Secretary TJDALL. I am grateful for this opportunity to make a state- ment regarding the proposed 1987 amendments to the Economic Op- port.uñity Act. We approach this meeting today with a special in- terest because we now have the experience of 21/2 years with anti- poverty programs. We view the proposed amendments to the anti- pOverty program for 1967 with particular interest because we can now measure some of the effects of the war on poverty and more clearly see its potential . for the future. As we review the antipoverty pro- gram, it is clear that the effort to help the poor through the Office of Economic Opportunity needs to be continued. The Economic Opportunity Act initiated a strong, effective, and coordinated effort to wage the war on poverty. The act further pro- vided means through which the needs of the underprivileged could be more clearly identified. In this connection, I am mindful that not all `agencies-Federal, State, and local-have been or are now in a position to share a broad perspective of the needs of our citizens. It is the Office of Economic Opportunity and the Economic Op- portunity Council, which I serve on, whOse sole concern is the Nation's poOr, that enable us to focus more clearly upon the needs of the underprivileged. This is leading to a more effective application of the Nation's resources in order that the poor' can share more fully in the promise and opportunity of the American system. In discussing the Economic Opportunity Amendments for 1967 and the n'ttional antipoverty effort I would like to direct my remarks to two basic areas of particular interest to me: (a) The continuation of special efforts to assist the American Indian; and (b) the Job Corps conservation center program as it is administered in the Department of the Interior.' ,. . It seems tq me that we have learned more about poverty and the people in poverty, than we had anticipated because of the Office of Economic Opportunity, a vital force that has already improved the * lives of the poor. and renewed hope for many. We now have a real opportunity to build upon our experience with the war on poverty to strengthen and improve its programs and to continue the develop- ment of new and better techniques. I, therefore, urge the continuation of the Office of Economic. Op- portunity and the adoption of the administration's proposed amend- ments to improve the correlation of our efforts and not lose sight of t.he major objectives in the war on poverty. EFFECT OF ANTIPOVERTY ON INDIANS The Economic Opportunity Act program is directly aiding In- dians as never before-through the application of greater resources, new techniquE.~, and a concentration of effort. It is complementing PAGENO="0713" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1551 previous and continuing efforts to lift the Indian out of deprivation. The American Indian people have had a long history of poverty. We know, for example, that unemployment is running at a much higher rate on some Indian reservations than even in the most im- poverished counties of this country. Unemployment among Indians is 10 times that of the national average. Moreover, there i~ inadequate housing, inadequate roads, inadequate water supply, and an atmos- phere of economic depression rarely found anywhere else The Bureau of Indian Affairs has historically been the Federal agency primarily responsible for the economic, social, and political development of the Indian people for whom the United States has a special trust responsibility. Over a long period, significant advances have been made, but it has become evident that if Indian people are to achieve economic and social equality with other American citizens, additional resources must be brought to bear on their problems. The Office of Economic Opportunity has already been instrumental in renewing efforts to help Indians and broadening resources avail- able to them. Indians are doing more to help themselVes and Indian tribes are becoming increasingly aware of the many additional and new programs avail'tble to them They are being encour'iged more than ever to de'tl with all agencies-Federal, State, `tnd private-that can provide resources and assistance to help them solve their own problems. The Office of Economic Opportunity, this Department and its Bureau of Indian Affairs, together with other ~gencies, are working hard to see that Indian people benefit from `ill relevant Feder'tl pro grams. An Indian task force of the Economic OppOrtunity Council was formed last year to strengthen such interagency cooperation, at my recommendation. There is no quick solution of the complex problems of the Indian people and their resources. The Indian people know this and I com- pliment them and their tribal leaders for their effOrts to help them- selves. The impoverished Indian has benefited in many ways through the Economic Opportunity Act and the coordination~ of efforts made pos- sible through the Economic Opportunity CounciL The overall impact of the program is impressive. There are Job Corps conservation centers on eight reservations; 6,500 in the Neigh- borhood Youth Corps; community action programs on 105 reserva- tions including such components as Headstart, Upward Bound, `in~' legal services; 300 VISTA's assigned to reservations; more than 1,000 small business loans, totaling $22 million, additional job training for unemployed Indians under work experience programs. I would like to give you two specific examples, Mr. Chairman, in order to get down to cases, of Indian benefits under Economic Oppor tunity Act programs. OEO spearheaded a pilot program to help solve inadequate housing and lack of job training on the Red Lake Reservation in northern Minnesota. Both of these have been continuing problems for Indians on all reservations. Through OEO funding, the reservation community action agency provided tra1nrng for 30 Indian men in the home-building trades. The PAGENO="0714" 1552 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Department of Housing and Urban Development provided funds for the necessary materials. The Labor Department supplemented OEO training with an MDTA program. The Bureau of Indian Affairs prOvided house designs and specifications and, the use of heavy equip- ment. Public Health Service provided water and sewer facilities. Ten new homes constructed during the training~ are now providing low- rent housing. But this just dramatizes how many different agencies and depart- ments are needed to put together a large program. All 30 trainees were successful in obtaining, employment follow- ing their training. Seven of the men were accepted into full member- ship in the carpenter's union, 15 found employment in various trades as apprentices and helpers, and 8 were employed in laborer and cleri- cal positions. The success of the pilot program at Red Lake has led to jointly funded home builder training programs on 10 other reservations where over 500 additional Indian homes will be built. In other words, we used invaluable experience to introduce other programs that were similar. Another example is the Rough Rock Demonstration School project on the Navajo Reservation in Arizona which for the first time enabled the Indian people to run their own school. The Bureau of Indian Affa.irs turned over to the tribe the com- plete facilities of a new $3.5 million boarding school it had built for 210 Navajo children and the funds for 1 year of operation. Through an OEO demonstration grant, the tribe provided special enrichment features in the curriculum. The school is operated by .a Navajo Indian corporation organized by their tribal council. With the help of an increased staff and VISTA assigned to the school, education. has become a. blend of new techniques and tribal culture. With the interest, of this committee~ i~ education, you. see immediately what.. opportunity is afforded here. New methods of teaching English as a second language are being tried. Since many children come from non-English-speaking homes, some classes are taught in. the Navajo language. Tribal craftsmen are employed as part-time faculty t.o teach children their traditional. skills.. . . . . . . . Adults, too, have become involved in their children's education, many for the first time.. Parents sit on the local school board and are encouraged to attend classes . and visit, dormitories. Teachers and counselors make reguhr home visits to better understand the chil- dren and their parents. , . ., . . The Rough Rock school doubles .a~ a" focal pOint; for community activities in an. effort to integrate education and community develop- ment Community action programs foi the area make full use of the school facilities for the many OEO-funded adult education and com- munity. development activities. . SuMM~uY OF A~crn?ovERTY BE~rITs TO Ii~ DIANS Economic Opportunity programs are enabling. Indian groups to more quickly identify and resolve their own problems These pro- grams are an `important' force in motivating the existing desire in PAGENO="0715" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1 967 1553 Indian people to improve their capabilities, both as individuals and as groups. The resources of the Office of Economic Opportunity are bad needly for adult educition, preschool and remedial education, for job training, work experience programs, senior citizen projects and many other programs that the Indian people have identified and requested We support the continuation and strengthening of the Office of Economic Opportunity We are anxious to continue to work closely with the Office of Economic Opportunity, as we do with other Federal agencies, to provide maximum benefits from these combined resources There is a continuing need for the broad innovation made possible through antipoverty programs. I would stress this as one of its most important aspects. Innovative manpower, housing, health, education, and other programs can be accomplished through the responsible agencies with coordination by the Office of Economic Opportumty This approach takes advantage of the best available experience and knowledge * The second area I would like to coimnent on in detail is the Job Corps conservation program. *This is anpther program that should be continued under ,OEO in order that it remains the vital and healthy program that it:has been to date. This program helps underprivileged youngsters to become better citizens and improve their employability. It defies comparison with other methods that most of us have had experience with-colleges, high schools, public and private schools. Job Corps enrollees are constantly being exposed to dedicated and successful men and women who share with them those traits, characteristics, and attitudes necessary to get `tnd hold a job It is made clear to them that it is not enough to be a good mechanic, a good typist, or a good carpenter They are helped to understand that they need to communicate effectively with pros- pective employers and coworkers, able `to read manuals and instruc- tions and able to put in a day's work and get in the habit of doing a iob well-particularly in knowing that they are improving them selve.s and doing work that will, strengthen, beautify, and' improve the Nation The testimony of the Office of Economic Opportunity has covered this comprehensively and has pi ovided you with extensive materials and statistics th'it answer many of the questions that have been directed at this program in the past My purpose, therefore, is to highlight for you that portion of the Job Corps program that I am most familiar with and have `tclminis- trative i esponsibihty for the Conservation Center program, as distinct from the TJrb'rn and Women's Training Centers Because OEO has been successful with the Job Corps program, the goals of the Economic Opportunity Act have been met As with many other OEO programs the Job Corps combines many resources toward making better lives for young people In conservation centers, the resources of the OEO, the Dep irtment, the private sector and par ticularly the commufilties v-here the c'irnps iie betted, are brought to bear upon the task of impro~ ing the lives of the Corpsmen on a day- to day basis In these centers, the primary purpose of the Job Corps is being met when youngsters are `extended opportunities to strengthen the country by becoming better and more productive citizens. PAGENO="0716" 1554 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 - it is in this sense that the Job Corps Conservation Center program is providing an opportunity for these youngsters to strengthen and~ * beautify their country while they are helping themselves to become I more productive members of our society. The Departments of the Interior and Agriculture are assigned cer- fain responsibilities by the Office of Economic Opportunity in admin- istering the Job Corps Conservation Center portion of the antipoverty program, utilizing funds transferred from OEO. Five bureaus of this ]Jepartment are involved-Bureau of Reclamation, Bureau of Land ~fanagement, National Park Service, Bureau of Sport Fisheries and Wildlife, and the Bureau of Indian Affairs. The Office Of Economic Opportunity has responsibility for program and policy formulation, recruitment of Job Corps enrollees and for their placement on completion of the program. This division of labor has, I would say~ worked out quite well. The Department of the Interior and Agriculture administer the centers which include work with education and other enrollee pro- grams. The Department of the Interior is currently operating 38 Job Corps Conservation Centers involving 6,764 enrollees. Already the Job Corps has contributed to theY improvement of the public domain under the jurisdiction of the Department of the Inte- rior. The estimated appraised value of the conservation work per- formed by Job Corps enrollees has already been represented to this committee by the Office of Economic Opportunity, and was sum- marized as follows: Total estimated value to May 1, 1967, $26,067,234. (Of this total over $12 million was in the Department of the Interior.) 73 miles of firebreaks and fire suppression facilities built and maintained. 66 miles of fishing streams developed and maintained. 15,000 acres of fish and wildlife habitat improvement. 2,300 miles of roads built and maintained. 7,936 acres of timber stand improved and reforested. 404 acres of watersheds restored. 10,251 units of picnic tables, fireplaces, cabins, built. 13,081 acres of treOs and shrubs, planted, areas landscaped in beautification project. This represents conservation work which the present skill level of the Job Corps enrollees enables them to perform. It is work for which the bureaus have not received funds in their regular programs but it is preserving and protecting our national heritage. Job Corps enrollees have contributed to the welfare of the commu- nities where they are stntioned. When areas of southern Oregon, north- ern California, and Denver, Cob., were flooded, enrollees performed flood relief work until the residents could return to their homes and businesses. When a crop harvest crisis occurred in Grand Junction, Cob., corpsmen assisted in the orderly salvage of crops essential to the economy of the community. In some centers there are select fire- fighting crews and corpsmen have fought forest and range fires. Dis- aster and emergency rescue work of Job Corps enrollees is another part of the benefits that the program is bringing to the country. The conservation and recreation work is being done in a manner somewhat similar to the CCC programs of the 1930's and early 1940's. Corpsmen are dividing their available time between an education pro- PAGENO="0717" ECONOMIC. OPPORTUNITY ACT AMENDMENTS OF 1967 1555 gram and a work program. The work program is consistent with the individual missions of the Bureau of Beclamation, Bureau of Land Management, National Park Service, Bureau of Sport Fisheries and Wildlife, and the Bureau of Indian Affairs. As the CCC enrollees left behind a wealth of conservation work and recreation facilities as testi- mony to their contribution to the natioxial estate-so the Job Corps enrollees of the past 2 years are beginning to complete significant work projects. The CC:C's contributed significantly to leadership roles for its "grad- uates" in World War II and in public and private service since. The Job Corps enrollees, although it was not specifically intended this way, are finding their way into military service, where many of them qualify as not before, while others are becoming involved in public or private service much as the CCC enrollees did some 30 years ago. We are wit- nessing now the rehabilitation of Job Corps enrollees who someday will hold significant jobs in this country just as we have witnessed former CCC enrollees occupying many responsible jobs and positions today. It, therefore, seems to me that any program which combines many resources to extend opportunity to our Nation's youth and.adds to our national estate should be continued and strengthened. This should be done by continuing the Office of Economic Opportunity with its re- sponsibility for the Job Corps program. As you consider the Economic Opportunity Act, I urge that you provide for the continuation of the Office of Economic Opportunity and the Economic Opportunity Council to- Enlarge upon our experiences, in strengthening and continuing the antipoverty effort, Continue and broaden the effort to help the American Indian through the entire range of programs of the Economic Opportu- nity Act, and Continue the essential and proven programs such as the Job Corps, including the conservation centers, which are benefiting underprivileged youth and enhancing the national estate. Mr. Chairman and distinguished members of the committee, I sin- cerely appreciate this opportunity to discuss the proposed amendments with you, and I would be delighted to answer any questions the committee might have at this time Chairman PERKINS Mr Secretary, you have given, in my judgment, what has been an excellent statement. You stated that we should keep them programs coordinated under the Office of Economic Opportunity, in order to take advantage of the experience and knowledge gained~ durmg the past 2 years Do you feel that we can more effectively d& the job by keeping these programs under the Office of Economio~ Opportunity, and why? Secretary TJDALL Mr Chairman, I would say it has been my experi ence, and I think most of my people would bear me out on this, in the last two and a half years, that the Office of Economic Opportunity the people that they have had directing that program, the new funds th'tt they have infused, has quickened action all along the line Although at times I know there are probably people in my Department that regard the OEO people as a g'idfiy, and I think we have needed a PAGENO="0718" 1556 EC0N0~UC OPPORTUNITY ACT AMENDMENTS OF "1967 gadfly organization, and although like with any new effort, there has been trial and error, and usually errors get wide public attention. Nevertheless, overall, I think-and I am speaking flow particularly of the American Indian-that there has been a lot of new initiative, there have been a lot of new innovations that have been tested, there has been an element of competition, too, between the OEO people and the Bureau of Indian Affairs but I think this is goock It may create a little strife sometimes, but I think it is a very good thing oierall and I c'in sa~ ~ eiy honesth for all of us th~.t we feel the program has been so' successful, and that it has worked so well that we think it is eminently in the national interest to continue it Chairman PE1iKTh~S Let's be a little moie specific Take, for instance, t;he Job Corps. Do you feel that the Office of Economic Opportunity c~n do a better job making the selections of enrollees and do a better job in ti arnrng than some other governmental agencies, if we decided to take it away from the Office' of Economic Opportunity? Do you feel there would be disadvantages there? Secretary TJDALL Well Mr Chairman, we have had a clear cut division of labor between OEO and our Department and the Job Corps Conservation Centers In fact, we had some ii iction and some argu- ments initially about where the line should be drawn. and who should do what. I think after we got started, and down the road, that this has worked out' quite well. I think that the way the program is working now, with the Office of Economic Opportunity having important responsibili- ties, but with us having the responsibilities for' the work programs, and the responsibilities at the local level, we select the people that run the programs, is one of the things that I insisted upon. I think this was a wise step, because I think if you are ~oing to have a conservation camp, you need conservation-minded people running these piograms people thil `ire not only c~p'ihle o± ~iett'ng along with and directing young men, but who know how to infuse them with the idea of the impoitance of conserv'ition projects and the importance or work of this kind, md I think that it h'is on the whole worked out very well and thit is the reison I think a ontmuitmon of the present pattern would be the wise decision at this pOint. Chairman PERKINS. You set forth the results here of the conserva- tion work that has been pem foi med b'~ the beb Cm ps Would this work ha"~ e been performed but foi the Job Co1 pS, in your opinion? And part 2 of the question What ivailable fmcthties do ~s ou ham e in the Land Management and other agencies of your Department where you could utilize more Job Corps enrollees now, or `are you utilizing all your facilities at the p1 esent time? Secretary TJDALL. Mr. Chairinan~ there is in the whole field' of natural resources management a tremendous backlog of work to be done. If I were to be told suddenly by the Director of the Bureau of Budget or the President I could have all the money `that I wanted for conservation work, I would assure you it would increase manyfold, and when we `tried `to locate these~ camps, the' conservation centers, we deliberately chose those sites picked by the agencies One of the first things we did in this program 21/2 years ago was to get suggestions from all of the different bureaus in my Department. PAGENO="0719" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF I 9 6 7 1557 We ended up with five that have land management and conservation responsibilities. They compiled a big long list of possible areas where these centers could be lOcated, and this was narrowed down to the ones wheie we felt we had good facilities, we had a good workload, a good work progr~ña to be carried out, and this is the way that the initial decision was made. 0 The `cs ork programs-and I h'ive personally seen many of these-I think `tre comparable to the best work that was done in the CCC period, because of the f'ict th'tt this program is half education and half work, as against the old CCC program, which w'ts entirely a work progr'tm The work that we do is not `ts large in scope, and is not as impressn e as under the CCC program, bec'iuse this is an education `tnd work progr'tm, with actual cla ssroom work `tnd insti uction, mo~'e convevmg a skill to the young man, rather than m'tking the work program the be all and the end all, but I think this, ag'trn, is `t good balance, and I think th'tt it has worked out \ ery w ell in pr'tctice Ch'urman PERKINS There ha~c e been some suggestion to the effect that many of these youngsters h'u~ o not been `tble to obtain employ- ment and that the Job Corps centers have not been able to give as sistance to these enrollees obtaining employment, when they complete their course Have you been `ible to follow through9 Do von feel that you have sufficient experience to rn'tke an observation along that line9 Secretary TJDALL Mr Chairman, what happens to the young men after their courses aic completed and their placement is the respon sibility of the Office of Economic Opportunity, and I know they have commented on it I don't think I could throw much light on it that would add to their own observations, because we are not responsible for placement of corpsman We are responsible for the work, for the training, but not for what happens afterward, and they ha~ e the st'itistics, so I am afraid I couldr't help you much on that Chairman PERKINS But it is youi judgment that greater educa tional values are being derived from the fact that the Job Corps, for instance, is coordinated with the Office of Economic Opportunity ~ Secretary TIDALL From the c'tmps whei e I have been, the young men that I have talked to, the camp directors that I have talked to, I have always gotten a response that the work programs, the skills obtained, that this was functioning very well, and that we were having very good experionce with the graduates, so to speak, in getting them jobs and having them keep the jobs, and having the whole thing turn out to be a big plus in terms of the individual, and in terms of the country Chairm'tn PERKINS Mr Quie ~ Mr QtTIE Mr Seci etary, it was interesting to hear your comments of the good working rel'ttionship between OEO and the Department of the Interior But some of the problems we ha~ e in this good rela tionship have come to my attention Mr Me'tde, principal of a high school in Red Wing, Mrnn, has had the responsibility of transporting Indi'in children ft om the reserva PAGENO="0720" 1558 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 tion to the local school. They also had special transportation for them so they could attend some speciaJ classes and athletic events as well. Now for 2 years, the Bureau of Indian Affairs funded this transpor- tation project, but last August the Bureau of Indian Affairs informed them that they were no longer going to do it. They said: While we heartily endorse this transportation project which was instituted prior to the passage of recent federal school legislation, it does not appear pos- sible that the Bureau will be able to participate beyond the current school year because projects of this type are eligible for funding under the Elementary and Secondary Education Act or as a component of the Community Action Program. Well, they have a pretty good Community Action Agency in the three-county area where this Indian reservation is located, but Mr. Meade now tells me via a letter he wrote June 30, that they received no written word from OEO until June 19 on the application made last August, August of 1966, right after they found out the funding wouldn't be done by the Bureau of Indian Affairs. They were always under the impression that assurances of funding had been given to them orally, but then later, orally, the Chicago office claims that the project never would be funded. The reason for this was that the Office of Economic Opportunity said they aren't going to fund it, because school activities, including transportation, are eligible for funding under the Elementary and Secondary Act, or by the Bureau of Indian Affairs. So, they aren't going to do it. I understand since then, when the project was requested under 89-10, the Elementary and Secondary School Act, transportation was being provided by the Bureau of Indian Affairs, and therefore, they did not make a request under 89-10. It seemed like there should be one source under OEO, and they again have been negligent in processing these kinds of projects. Now it seems to me there ought to have been some responsibility on the part of the Bureau of Indian Affairs in seeing to it that the pro- gram would continue. Now: the local schoOl has carried it along them- selves with their other programs, but there is no money in their budget to fund it. They tried to get some money from OEO for the past year, but they say the~rnaintenance of effort required now indicates that the local school carry it on as it had before * This situation doesn't seem to be a very good working relationship between OEO and the Bureau of Indian Affairs. * `Secretary UDALL. Oongressman, Commissioner Bennett may want to comment on this specifically I am not aware of this particular situ- ation. But I would say from other things that have come to my atten- tion that this is not an extraordinary or an uncommon situation Where you have new programs-of course, 89-10 is a new program, and I am delighted that this committee and the Congress chose to in- clude the Indian students under ;the program, and where OEO has money for special educational projects, too-you sometimes do get a buckpassmg g'ime going, or s'tying, "Who should do it" And it takes time to get things sorted out If the * program is truly worthwhile, I find usually a solution is worked out, and it may be that this is one where somebody failed to do their job, and as a result, a good program was not continued, but the PAGENO="0721" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1559 thing that interests me most of all is as a result of these new programs, of OEO and ~f 89-10 and others, that they have got so many really fine new things going that we didn't have 3 years ago. Mr. BENNETT. The Bureau of Indian Affairs has cooperated with the activation of many new programs by providing pilot or temporary assistance from our resources. I believe that we would be happy to submit more details for the record, but this case was another situation where in the past in other programs, getting started, we have made a contribution of some kind in order to get the project off the ground, so to speak, in the hopes that as the project moves along, they will get their funding from the primary responsible agencies, whatever they might be. So we, in order to get programs off the ground in which Indian people have been interested, we have helped finance certain parts of the program on a temporary basis, with the idea being that these projects would be financed through Public Law 89-10, OEO, or some other Federal program. Mr. Quii. Well, I would ~say most of the criticism in this case ought to go to OEO, rather than to the Bureau of Indian Affairs, who did notify the school people. In fact, the letter of the Bureau of Indian Affairs was dated May 16,1966 and the project was requested of OEO in August of 1966 So the only criticism I would have is that there might have been some help from the Bureau of Indian Affairs in seeing to it that the project was contmued, since you recognized that it was `L~ good program, and did it on a pilot basis for 2 years. But it seems to me that this happens so often. Programs are pro- posed by OEO on a year-round basis, applications are made in August, and some time after the first of the ye'~r, the applicants start hearing from OEO. Then finally, later on in the year, they either get funded or turned down If you ian your business like th'i~t, I thmk you would have a lot of upset people in your clientele The other question I would have about the operation is in the White Earth Indian Reservation in Minnesota I understand that is one area where the Community Action Agency is totally made up of Indians, and it seems to me they have had nothing but trouble getting their programs in operation `md finding out what the local people really.wantto do. What has prevented this in the past, and why can't the tribal coun- cil actually act now as a Community Action Agency, and not. go through OEO's type of operation. That way they could get the funding f or their type of program themselves. It would seem to me you would have one less office to go through in that case Secretary TJDALL Congressman, with regard to the rel'itionship of the Indian people to OEO, of necessity, the Bureau of Indian Affairs, in my department, deals with the tribal councils, because under the laws passed by the Congress, these are set up as governmental entities, and they have to be the fulcrum, so to speak, as far as the activities of the Federal Government and the Indians are concerned I think one thing that has injected a new note, and provided new initiative, and has stirred things up, is the fact that OEO doesn't alw'iys work with the tribal councils 80-084-67-pt 2-46 PAGENO="0722" 1560 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 In some instances, it does, and they are treated as a community ac- tion organization. In other instances, not. But when OEO does not, a local agency is formed. After all, there are many large Indian tribes that encompass many communities. It is nOt always a coherent, small group of people, and this enables people to organize and to get things going in a particular community that maybe the tribal council can't finance, maybe there hasn't been sufficient initiative taken at tribal council level, and this really is thinking out a new element of leader- ship `tmong the Indian people, `md I think this is a good thing, so that I don't see for a moment that it has always worked harmoniously, Or that there have not been difficulties such as you describe, because we. are going through the process of developing new centers of leader- ship among the Indians; as it were, of initiating new action programs, ~and I think in this initial period, it was inevitable that there would be-some friction and some sort of pulling and hauling when it cameto getting the new programs going. So I wouldn't deny that there haven't been areas where maybe sOme- one has dropped the bali, or where the coordination hisn't been too good, but I think that is much outweighed by the good things that have been launched Mr. Qmn. Mr. Secretary, would you provide for the record the rela- tionship now? I know there have been problems with the WhiteEarth Thdia.n Reservation in the past, but I would like to know how it stands right now between the Bureau of Indian Affairs and the OEO and the tribal council? * Secretary IJDALL. Yes. You mean in this particular instance? * Mr. Qimi. Yes, in that particular instance. Secretary UDALL I would be glad to * Mr. QUIE.' A~id, Mr. Chairman, I would ask unanimous consent that the letter fromMr. Meade which I quoted from and the letterfrom the Office of Economic Opportunity, `mnd the letter from the Depirtment Of Interior,~bë made a part of the recOrd. Chairman PERKINS. Without objection, sO ordered, and the response of the Interior Department will likewise be inserted in the record at the same point. (The information referred to follows:) RED WING PuBLIc ScHOOLS Red Wing, Minn., June 30,1967. Hon. ALBERT QuIn, If ouse of Representatives, Washington, D.C. * (Attention of Mrs. Maloney). .. DEAR Mn. QuIE: I am enclosing a copy of the application to O.E.O. tbat we made last August for funding for; our Indian Activities bus, and also a copy of the only. written notification that we have received regarding the disposal of our application. This project was originally requested to continue an Indian Activities bus to Prairie Island after school so that our Indian students could take part in school activities. We know from past experience that this bus has been a prime factor in keeping these youngsters in school. This buswas financed for two years by the Bureau of Indian Affairs, and we were told in July of 1966, that they would no longer be able to finance this bus because a good portion of their budget had been assigned to the poverty program. A letter of verification from the Bureau of Indian Affairs is included in Section 2 of the application to O.EO. This application was received in the Chicago office of O;EO. on August 17. 1.966. Before the end of August, we had received verbal assurances from both the local Community Action office and from the area supervisor that the project PAGENO="0723" ECONOi'~IIC OPPORTUNITY ACT AMENDMENTS OF 1967 1561 -would be funded and that we could proceed. No word was beard until in Janu- ar'y I inquired of the office in Zumbrota, and they again assured me verbally that the project would be funded. rfhey told me that the Chicago office had in- :formed them that the funding date would be effective March 1. I did not return to the matter until about a month ago as I just assumed that this project bad been funded. You will note that the date of the letter from Chi- * cago to Mr. Christensen stating that the project is ineligible is June 19. This. is approximately two weeks after my first contact with Mrs. Maloney on the second round and was written after she had called the Chicago office. I suspect that we never would have received this notification if Mrs. Maloney l~ad not contacted the Chicago office. The net result of this situation is that we are now sitting with a bill for $1,600 that is illegal to pay out of regular school funds and for which no Title I funds are available under Public Law 89-40. If this situation had been taken care of in a business-like manner by the Chicago office, we should have known the dis- position of this application by at least the end of September. I believe that O.E.O. should fund this project for the year just completed, in- asmuch as the bill would not have been incurred if they had handled this mat- *ter properly. Whether or not they would fund it for coming years is now no ilonger an issueS I appreciate all the help you and your office have given me on this matter and certainly hope that you will be able to carry this through to a successful con- -elusion for us. . - Sincerely yours, . . S DAVID W. MEADE, S Principal. U.S. DEPARTMENT OF THE INTERIOR, BUREAU OF INDIAN AFFAIRS, S MINNEAPOLIS AREA OFFICE, S . Minneapolis, M-tnn., Man 16, 1966. Mr. DAVID W. MEADE, .. . S Principal, Red Wing Public ~chool-~, Red Wing, Minn., DEAR MR. MEADE: Our Area Education Specialist Mr. Frank Brady has talked -with me about your recent meeting with him and has described your splendid - educational program that is proving so successful in meeting -the needs of local Indian students. . S We recognize that the pilot transportation project involving the Bureau and the Goodhue County Welfare Department has been of help in reducing drop-out tendencies and in strengthening the participation of Indian students in co- curricular activities of the total school program; While we heartily endorse this transportation project which wa~ instituted prior to passage of recent federal school legislation, it does not appear possible that the Bureau will be able to participate beyond this current school year 7because projects of this type are eligible for funding under the Elementary and Secondary Education Act (Public Law 89-10) or as a~ component of thern Corn- munity Action Program (Economic Opportunity Act). We wish to offer our help as a justification resource to you as you seek alternate funding for this most worthwhile project. S Sincerely yours, S Assistant Area Director. OFFICE OF ECoNoMIC OPPORPUNITY, GREAT LAKES REGIONAL OFFICE, Chicago, Ill., June 19, 1967. Mr. WALLACE G. CHRISTENSEN, S Director, Goo4hve-Rice-Wabasha Citizens' Action Council, Inc., - Zurnbrota, Minn. . S DEAR Mn. CHRISTENSEN: We are returning under separate cover your applica- tions for Project Friendship, Component 7-4, and School Activities Transporta- ;tion, Component 7-6. PAGENO="0724" 1562 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 As was stated at the meeting of the Community Action Program Directors in Minneapolis on May 4, 1967, these programs are not fundable by. the Office of Economic Opportunity. Project Friendship was in operation between January and June of 1966 and therefore does not meet the maintenance of effort require meat of the Economic Opportunity Act which states that expenditures from non- Federal sources shall be at least at the same level as were made prior to the application for Federal funds; Federal assistance is intended to supplement, not to replace local efforts against poverty. School Activities Transportation is eligible for funding under the Elementary and Secondary Education Act (Public Law 89-10) by the Board of Directors, Red Wing Public Schools, Red Wing, Minnesota, or by the Bureau of Indian Affairs, Department of The Interior, Washington, D.C. Sincerely, WALLACE MEHLBERG, Unit Supervisor, Minnesota~ Indians~, and Wisoon8in. RELATIONSHIP BETWEEN THE BUREAU or INDIAN AFFAIRS, OFFICE OF EcoNoMIc OPPORTUNITy, AND THE WHITE EARTH TRIBAL COUNCIL The Bureau of Indian Affairs has no formal role in the operation of Com~ mimity Action Programs. At the White Earth Reservation, community action programs are proposed and sponsored by the tribal business committee. A person- nel board, appointed by the business committee, has authority for all personnel actions in connection with community action program employment. Program funding and direction are handled directly between OEO and these tribal groups. The Bureau cooperates with the business committee in the operation of Eco- nomic Opportunity Act programs, providing assistance and the use of facilities as requested and available. We believe the White Earth Comipunity Action Program is a good one and that the relationships between Bureau personnel, the tribal business committee and the local CAP Director are excellent. We are aware of no significant problems in the program. Chairman PERKINS. Mrs. Green. Mrs. GREEN. First of all, Mr~ Secretary, may I say that since you were a former member of this committee, it is always a pleasure to see you back in the room, and to have a chance to talk with you about matters of mutual interest and concern. Have you had a chance to personally look at the surveys that were made by the Harris group in regard to the Job Corps in conservation camps ~ Secretary UDALrJ No, I have not Mrs GREEN Is there someone in your Department who has been charged with this responsibility, and is there a memorandum by the interior Department which would answer or ~t least respond to some of the charges that have been made in the Harris study in regard to the cost, the effectiveness of the training, and the placement of the graduates or the dropouts after they have completed their Job Corps work? Secretary TJDALL. Well, Mr. Old Coyote, who is with me, is my top person, and I am sure he is familiar with it, and I am familiar with the tenor of the report. I haven't gone into it in detail, and I am sure that we do have a response of our own, and that we can provide you with it, if you would like to see it. Mrs. GREEN. Yes, may I have that? I am not going to ask that it be made a part of the record at this time, but if I mighthave any com- ments that you would have PAGENO="0725" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1563 Mr OLD COYOTE I must revert back to what the Secretary said previously about this being a particular responsibility of the Office of Economic Opportunity. The placement of corpsmen after they have completed their training at Job Corps camp, including conserva- tion centers, even though we do have knowledge of the Harris sur~ ey and the Harris poii, we have not analyzed it, within a particular coi~text of your question, but if this would be of help to you, we would be happy to furnish such material, although we don't have it at this moment. Mrs. GREEN. Haveyou personally read the Harris survey? Mr. `OLD COYOTE. `I have not read it extensively. I have seen it, I know what it says, and I have a general idea of what its contents are, but in detail, no. Mrs. GREEN. You stated that the five' bureaus in the Department are responsible for administering the Job Corps conservation camps. Do you subcontract any of that out? Secretary IJDALL. I will let him answer specifically, but as far as the leadership, the top people, are concerned, for example, let's say there is a Job Corps conservation camp in a national, park, on an Indian reservation, we have very carefully selected national park people. These are usually younger men, coming up through the ranks, who are particularly gifted in working with young `people and who are' knowledgeable on conservation work, and we carefully screened ~nd selected these people to head the camps, and of course, we furnish the main staffing at the top on this, and I think the contracting out that we do is relatively minimal. Mr. OLD CoYo~r1~. Yes, it would depend largely upon what this con- tracting out would mean. I would say very simply that those `centers, those camps, that were announced as a particular location, remained the total responsibility of the Department. None `of this responsibility is subcontracted; the total operation is the responsibility of the De- partment. However, there are activities of those camps, for example, there may be a need for a particular skill in constructing a particular utility, or a particular conservation practice, and this then may be considered as being subcontracted out, but the total responsibility remains with the Department. Mrs. GREEN. Could you give me' examples of subcontracting? Do you subcontract, for instance, to some of the big corporations? Mr. OLD COYOTE. No, we don't. Mrs. GREEN. To whom did you subcontract? Mr. OLD CoYOTE. This would be on a purely local basis. For example, if they were installing, say, a particular visitors' center, at a national park service-I use this only as an example-that maybe portions' of that particular project that the corpsmen will be doing would be subcontracted out, to provide the finished product so that it comes up to the specifications of the Park Service. For example, roofing, `masonry work, this type of thing. Mrs. GREEN. Now is all of the education work in the centers, includ- ing vocational training, done by the one of the five departments? None of that is subcontracted? Mr. OLD CoTorE. No, this, again, is the total responsibility of the agencies,. and- " ` . PAGENO="0726" 1564 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 19 67 Mrs. Giu~r~. You do not subcontract it? Mr. Ou) CoYo'EE. Here again, I should condition my remarks in V terms of what is now in operation. That is to say, there are some facets of the Job Corps program that have been contracted out, say, for ex- ample, with the National Education Association. There are contracts. for V teachers to come into theseV centers, and they come into these * centers as if they were any other Job Corps V employee, V that these people, then, become a part of the installation. V V V V Mrs. GREEN. Yes, but that is on OEO contract. V V V V V Mr. 0n COYOTE. This is the point I was leading up VtO~ V Mrs. GREEN. In the conservation camps that YOU run, do you V sub-~ contract out to any other group? V V Mr. 0u CoYoTE. Not in the sense that OEO does, no. V Chairman PERKINS. Would the gentlelady yield to me? V V Mrs. GREEN. Yes. VVV V V V ~ V V Chairman PEIUcINS. If I correctly analyze your testimony you ar~ stating that the conservation work, that you select your OWn. V per- sonnel, but insofar as the educational work is concerned, that is the' responsibility of. the Office Of V Economic Opportunity, and you are V unaware of V what the Office of Economic Opportunity does in all situa- tions, and there may be instances where they subcontract. Is that cor~V V V rect? IS that the point of your statement? V V V Mr. Ou CoYoTE. No, as the Secretary stated, we select V people to work with these youngsters that are placed in Job Corps Consen a tion Centers. We are aware of the educational arrangements that Var~ made through the Office of Economic Opportunity. If it is an NEA contract, we know about this. We also appointed educators V and coun- selors. that come into these centers, SOV that,, we do know that they are coming, we :dO know that here is a particular teacher, hereVVis a partic- V V ular V counselor, V and this was even under the V previous arrangement,. which was replaced by an agreement between the Secretary and the' Director of OEO, begimiing July 1, where the total responsibility for recruiting and selecting and: appointing the total staffis now V within the Department, but even in the previous arrangement, Vther~ was consultation across agency lines, so we did know who *as being' appointed. V V V *~ V V Secretary TJDALL. I think the real answer that the question Mrs. V Green.. has, do we do this kind of large-sc~iie contracting for operating such as OEO does with the other centers, the answer is, "No." V Mrs. GREEN. You rim your own educational programs ?V: V Secretary TJDALL. That is right. V V V V :~ , V Mrs. GREEN~ VWeITV, this was my impression. Then 1 do not Vlmder- stand why you say, after the person~has graduated, that you don't have' any* responsibility to see whether he is placed in* a:job or whether he st*ays in V a job, this goes back to OEO. I would think that the results V ~would have a decided impact 011 the: kind of, training you have. If you don't. know what happens to the kids afterwaMs, `then how do you know whether the tviini~o th'~t you `ire ~-1vin~ in the con'zerv'ition camps is `iccomphsi irg the purpose or is `my goed9 V ~ `~wrnild think they would have to hO under the same agency, and closely tied together. V `* :. ` `V V V : * * V V SecretaryT.JDALL.Unde.r the divisionof labor thatwas agreed .upon~ V the OEO recruits, they select the young men that go into the conser- PAGENO="0727" ECONOMIC OPPORTuNITY ACT AMENDMENTS OF 1 9 6 7 1 565 vation centers They place them when they are thi ough, and I cer tainly would agree with you that there has to be a coordination oi you will not do the follo~s through that is necess'~ry, nor will you get the results that you want, but they have had the primary responsibility for the placement, for the keeping of the st.atistic~, and so on. .1 am not saying that there isn't a direct and careful coordination between the. two as to how the work program is going, because they do oversee that, in a total sense. They do oversee the training in terms of .~hat kind of skills we are producing, and whether these are marketable in. terms, of the market, but we don't have the statistics This is the main thing that I am trying to say. ` `: Mrs GREFN I think all the surveys show that the OEO places hardly any. There has been very little followthrough, very little at- tempt to follow through, so ~ e really don't have any idea what has happened to these kids; we don't know whether they have been trained' to ho~d jobs. . ` . ` , . Let me turn to one other thing, if I may. With bot.h,you and the Com- missioner here, I will take advantage of that opportunity. In Oregon, all,the schools are run through the State. department of education. In how many. States is this true, where you. don't have segregated schools? ` ` . Mr. BENNETT. Outside of the one which is anonreservation board- ing school, all the education plans in Oregon are run by the State, and also the State of Washington, also in the `State of Montana except one, which is on the Northern Cheyenne Reservation. Mrs. GR~N. Are you saying that Oregon and Washington and Montana are the only three States? .` ` Mr BENNETT No, in the State of Mmnesot'~ and the States of Wisconsm, Michigan, and Idaho and Colorado, except in Colorado we do run a dormitory, but we do not run the school Mrs GrEEN Then in about 40 States, the Bureau of Indian Affairs runs the school, and in about 10 States or less, they are run by the St'ite department of education Mr BENNETT Except that we do not have Indians in `dl these other States, so I would say that it would be in the neighborhood of .about L5 or 16 States th'it we operate schools, and in about 10, where we have `in appreciable number of Indian students where the schools `ire run by the State Secretary UDALL The situation is more complicated than this~ though, and I want to be sure that the Congresswoman underst'inds The policy of the Department of the Bure'iu ~f Indian Aff'urs h'Ls been, over a period of several years, to wherever possible get Indi'in children in the public schools, and therefore, the answer is that in every State there `ire children in public schools The remaining Bu reau of Indi'in Affairs schools, where you have Indian children in schools that are run by the Bureau of Indian Affairs, or I think I can say to you almost exclusively in areas where there `ue no public schools neaiby, and where because of iemoteness, or because of the fact that Indian reservations are located in are'is that are not adiacent to other communities, that these are the remaining Bureau of Indian Affairs schools, and this means in a State like my own of Arizona, with a large Navajo Indian Reservation, for example, of Alaska with the native villages, these are the main areas where most of the Indian childreii tody are still in Bureau of Indian Affairs schools. PAGENO="0728" 1566 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 196 7" Mrs. GREEN. Will you refresh my memory as to the provisions in the Civil Rights Act which makes this kind of an arrangement possible, and not a violation of civil rights? Secretary UDALL. I don't think that the Civil Rights Act as such really touches Indian school situations beca.use it is not a matter of seg- regation by isolation, rather than the segregation of people being physically located where it would be possible to have some kind of school integration. The policy has been in a very studied and sys- tematic way, of contracting with the public schools, and of getting Indian children in public schoo1s. Everyone has agreed that this is the best end result, and this has been a very major change in Indian education over the last 6 or 8 years. Mrs. GREEN. This has implications both in the education program `and in the Office of Economic Opportunity. Are you saying that, for instanèe, in the provision in the Civil Rights Act that requires the Department to cut off the funds, if there is segregation, that there is iio special provision that would allow the Indian schools to continue, ~on the segregated basis, except in cases of isolation? Secretary UDALL. Well, I don't, because the Indian schools were never segregated in the sense that we have thought of segregation, where the school was set up as a separate school, with certain people ~being excluded, or certain children being excluded, `and that they were set up in almost all instances because there were no other schools ~nearby. Mrs. GREEN. Well, now, let's take a~ Secretary TJDALL. And that in order to have a~ school, you had to set It up as a Federal school. The interesting thing about Indian educa- tion today, the remaining schools that are run by the Bureau of Indian Affairs, is that this is the only truly Federal school system, unless you `look at the military schools abroad, that `is run by the Federal Govern- ment, and it is only' that today, not because we would like to `have it. We would prefer to have all of the Indian children in public schools, `but t;hese are in almost all instances remote areas, areas that are not, you know, even within busing distance of public schools. Mrs. GREEN. Well, I am really trying to find out why there isn't as much concern here as there `is in other areas. We `hear so much discus- sion that you must have people together, or they are not going to be able to learn. Now you state that it is a matter of isolation. In Oregon, at Chemaw'a~ on the northern edge of `Salem, a large city. there are schools close by: and yet. you have an entirely segregated school. Now what is there in the Civil Rights Act that allows this to `continue, and the funds to continue to pour into it. and nothing to be said about it? There isn~t the problem of busing. There isn't any other problem. We simply as a matter of policy are segregating and saying, "This is an Indian schoolS" and is this good in terms of education? `I feel quite the contrary. I feel the procedure in `Oregon~~ where the schools are not run by the Bureau of Indian Affairs, but where they are run `by the State department. and they have the same kind of programs that all other youngsters have, was far preferable, as far as bringing these people into the mainstream of society. Secretary UDALL. I would agree with you that is far preferable, and that has b~n our policy. I am not familiar with this particular PAGENO="0729" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1567 locality, this particular situation. Commissioner Bennett can comment on it. Mrs. GREEN. I am sure there must be a hundred of those across the country. Secretary TJDALL. But I don't think that the Civil Rights Act, any Civil Rights Act that I am familiar with, as drawn, really reaches or is intended to reach this situation of isolated schools that are main- tained not deliberately to have been any segregation, as a matter of policy. Mrs. GluiN. Well, that Chemawa School- Secretary UDALL. As far as Indian schools are concerned. As a matter of fact, just the contrary, but there has been the segregation that is inevitable when you have remoteness and, isolation, since there are oniy certain people that are there, and there is no opportunity to weave them into any other school system, which is obviously the trouble. Mrs. GEERN. I think I have taken more than my time. But let me prepare a list, I think I can, of at least a hundred schools that are not isolated, and they are segregated, and that are not isolated but that are of Indians only, and I think this is a violation of the Civil Rights Act. Secretary UDALL. I would like to have you look into the problem, too, because if there is a very long list, the Commissioner's education people aren't doing their job right, because it is our policy to get them into public schools, wherever possible. Mrs. GREEN. Well, let me just pinpoint one. How about Chemawa? Here it is, near the heart of an urban center, and it is entirely seg- regated. Mr. BENNETT. Chemawa houses most of the students from Alaska, who do not have educational opportunities. I think about 80 percent or more of the student body is made up of students from Alaska. We do have the problems of out-of-State children coming into another State, and out-of-district children coming into the certain school dis- tricts. We do have the problem, also, of the availability of existing school districts to absorb large numbers of students, because the need for Chemawa was a facility for the Alaska students will be no longer needed when we get school facilities built for them in Alaska, and we do have many, many situations. We do have situations where non- Indians do attend Bureau schools, we have situations where we have dormitories that are built by the Bureau of Indian Affairs for students to have accessibility to public schools, some of which are also operated by the State under a contract with the Bur~au of Indian Affairs, and so we in carrying out our responsibility, it is, in the direction of public schools, and integrated schools, and we `are moving in this direction as fast as we can. I think thc Mrs. GREEN. Is this with all deliberate speed? Mr. BENNErr. Ma'am? Mrs. GREEN. Is this with all deliberate speed? Mr. BENNETT. Well- ` Secretary UDALL. It had better be. `Mr. BENNETr. We have, again, the problem of housing the children `in the public schools, but at least two-thirds of all Indian children and youth of school age now attend public and mission schools. PAGENO="0730" 1568 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 19 67 Mrs. GREEN. Let me ask one more question: Isn't it true that you do have elementary schools that are within a block or two blocks of another public school, where the one school is for Indian children? Mr. BENNETT. Yes, we do have those situations, and we are working with them on the integration- of the t~-o schools, but in many of those situations we were there. first, and the public school came later, to take care of. the public school responsibility, and.they were not built to take care of the Indian children.. So now we are in the position of having to work up an integrated construction program to take care of both. Mrs. GREEN. - But under the Federal impact law, you had a public school, and you have gone in afterward, also, and built an Indian school, right close by. ... . Mr. BENNETT. Well, we had this situation, where .the public school has used up their eligibility, and still has students. out of school. We have had. to come in with Bureau schools in order to house the students. Chairman PERKINS. I think, Mrs. Green. that there was an amend- ,ment to the impact law that provides, that those schools be integrated. Mrs. `GREEN. The whole direction of my questioning.has been,, why doesn't the civil rights law apply, why doesn't title VI apply? - Chairman PERKINS. Mr. Reid. Mr. REm. Mr. Secretary, Commissioner Bennett, an,d Mr. . Old Coyote, I would like to welcome you, all here this afternoon,.and I ap- preciate your thoughtful testimony. Mr. Secretary, if I could ask you to.turn to pa-ge 3 of your testimony, where you say in the first paragraph at the top of the page that un- employment among Indians is .10 times that of the national average. In `broad strokes, could you tell us a little bit how you are progress- ing, whether you feel that we are making any measurable impact into actual and lasting employment, and what some of the special problems might be? Is this legislation directed to meeting those~ particular problems?.. . .- :. ` ` . Secretary TJDALL. Well, I would like the Commissioner to give you some quick statistics on this I thrnk that we have been making a sigmf icant impact in the last 2 or 3 years. I ,think'.one of the programs on employment that has helped most is the,EDA program, which earlier was called area redevelopment. We `have a piece of legislation pendimr before Congress now that I am going to testify on later this week, and ,that I hope you have a chance to vote for. It is keyed to Indian re- sources development, and would give the Indians for the first time the. `opportunity to go into the money markets, to go to the banks, to mort- - gage property,' ~o conduct their economic affairs the way the rest of us do. It would open up further. opportunities. - * `I am not even halfway satisfied that we, are doing enough. I think we might do much more, but Commissioner, - would you just give .me some quick figures on' this? . `- -. -. Mr. BENNETT. In the past 3 years 67 plants have b~en established, largely from capital commitments.of private.enterprise, a-nd 4,700'new jobs have been committed by these plants, when they become fully operational. Out of the total employment of 2,458, their were 15 In- dians. as reported .on.December 31, 1966, and $6.5 million has -already been p'iid, new plant to Indian wage earners who will earn an addi- tional $4 million at the annually computed rate PAGENO="0731" ECONOMIC. OPPORTUNITY ACT AMENDMENTS OF 196.7 1569 Mr. REID. Commissioner Bennett, could I ask you, just to put it in perspective, what is the total now of the American Indian work force, and what percentage are unemployed? Mr. BENNETT. The percentage that are~unemployed is in the neigh- borhood of 40 percent of the work force. Mr. REID. And that is out of a total of. hOw many, approximately?, Mr. BENNETT. The totaj Indian population on or near the reserva- `tion is in the neighborhood of 400,000, and we have the total work Iorce here, 130,895. Mr. REID. That is the work force? Mr. BENNETT. Yes, male and female. Mr. REID. And of that, 40 percent are unemployed? Mr. BENNETT. Yes. ` ` Mr. REID. What are the skills that would appear to be most needed, and most related to lasting job opportunities? Mr. BENNETT. Well, it relates to th~ir overall social and skill de- velopment, because the Indian labor force, for many years, depended upon their jobs in industry, migrant, work, around an'd close to reservations, so between, this' kind of work and other opportunities available, they more or less had a relatively stabilized economy. With the mechanization of agriculture, we had the deepest inroad upon the employment of Indian people, an'd in order to qualify them i~or skills, we have the'~ adult vocational `training program, and the relocation program, ~which involves employment, relocation for em- ployment opportunities, but more irnportant"than that, we have started a new program which `takes into consideration the training of the whole family, where the wage earner is given training to----as a matter of fact, it is prevocational training, so that after this training period, they can be trained for'a skilled job, and the, wife is trained in home management, and budgeting,'and also as' a secondary wage earner in tl~e family. The children are trained in thei,r public schools that are available, `and we' have preschool training, `and it is entire family training of the pilot program. `Mr. REID. Now `how does the Office of Economic Opportunity relate most explicitly to results in this area? Mr. BENNETT. Well,, the Office of Economic Opportunity has been ~working with us in the training opportunities' which we' developed on the reservation, but what I was `talking about is in the ~training program off the reservation. " ` ` ` , ` Mr. REID. Training off the,reservation. Mr. BENNETT. And on the reservation, we `have cooperative pro- grams in housing, for instance, ~where the Office of Economic Op- portunity contributes to the program to provide training for people who are* engaged in buildipg homes on the. reservation, and as has been pointed out in the testimony, we have a commitment ~for the engineering and the preparation of the site, in matters of this kind, and there are other agencies `invoisted, too, `but `here `is their greatest contribution as far as the Bureau, is concerned, in training opportuni- ties on the reservation. ` Mr. REID. Do' you have a correlation; Mr. CommissiOner, between unemployment ahd school dropouts? In other words, does the, basic educatiOn p~rt of what Mrs. Green was talking about earlier directly relate to these figures? PAGENO="0732" 1570 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. BENNErF. Well, I do think that the lack of education con- tributes to unemployment, but for the present wage earners, it may not be able to correlate it to school dropouts, because at some point in time, particularly the Navajo Reservation, when the people who are in the wage-earning age group now did not have schools to attend, so there is-it is directly related to lack of education but' the lack of education may be based upon other factors than just school dropouts. Mr. REID. Thank you, Mr. Commissioner. Could I ask you, Mr. Secretary, to give us a brief r~sum~ of this for the record? I would like one personally, if I may, and any figures that you might have that particularly relate the OEO programs to the problem and to the need, and to the other programs that you men- tioned that are going to be introduced. I think it would be helpful to see the whole thrust of what the Gov- ernment is trying to do in this area, and wherever you can, where effective steps have been taken. I happen to be a believer in the anti- poverty program, but I have long felt that much needs to be done to clarify both results and pinpoint areas where improvement could be made, and I think some successes in this area as well as perspective on the problem will be very useful. (The information follows:) OEO PROGRAMS ON INDIAN RESERVATIONS Indian unemployment (and underemployment) is estimated to be approximately 40 percent of the labor force. A number of factors serve to contribute to this high percentage. The average number of school grades completed by the Indian labor force Is estimated to be 8.4 as compared with 10.6 for the U.S. labor force. Although we dO not have data to show the correlation between educational deficiencies and unemployment, it Is undoubtedly a significant contributing factor. The educa- tional requirements for jobs is steadily increasing. In addition, Indian popula- tions are more often than not located in extremely rural areas, that lack em- ployment opportunities. Problems of motivation further contribute to Indian unemployment. Programs are needed that provide intensive and extensive counseling for the whole family. The wife as well as the breadwinner must become convinced that full-time par- ticipation in the world of work is a satisfying experience that will contribute to family solidarity and social betterment. A great many Indians lack salable vocational skills. Most public and private schools that offer programs of vocational training require a tenth grade or better education. Programs in basic education are needed to enable the unemployed to mee these minimum educational levels. There have been a variety of OEO programs that have provided benefits to Indian people in preparation for employment. Head Start programs, which pro- vided pre-school experience for 7,500 Indian children in fiscal year 1967, offers a step toward a long range solution of Indian education problems. OEO programs have also contributed to the enrichment of elmeentary and secondary education for Indian children. The Rough Rock School project on the Navajo Reservation is one example. A number of the 300 VISTA assigned to reservations have assisted in school programs. They have also conducted adult education programs on reservations. There have been several vocational training components approved In Indian Community Action programs. The home builders training program at the `Red Lake Indian Reservation, which trained 30 Indian men all of whom subsequently found employment, has already been mentioned in the testimony. OEO plans to extend this training in the construction of 500 additiOnal Indian homes In fiscal year 1968. We have been unable to obtain from OEO figures on actual Indian participation In various Community Action vocational training programs. Two additional OEO programs contribute to increasing employability of Indian people. The Neighborhood Youth Corps, administered by the Department PAGENO="0733" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1571 of Labor under the Economic Opportunity Act, provided employment and work experience for 6 544 Indian youth last year Some 2980 Indian adults participated in work experience programs administered by the Department of Health Educa- tion and Welfare under Title V of the Econoic Opportunity Act Secretary TJDALL. Well, of course, if I may comment generally, because I think I see and agree with the main point that you ai e making here and it has seemed to me that when I look at the past history of our Indian people, that one of the main reasons for failure is that everybody in the Federal Government, as well as the people in the States and all of us said, "Well, the Indian people are the problem of the Bureau of Indian Affairs," and you could never get everyone involved, and that is the reason, ovei a year ago, with the ~IEconomic Opportunity Council, which works under the Vice Presi dent, and Sargent Shriver, I tabled this as a major item of business, making the point that what we really need to do is to marshal the resources of the Federal Government to help the Indian people. They are not a problem of the Indian Bureau, and the Office of Education, for example-I am still not convinced they aie doing nearly enough Here is a group of people that aie entirely a iesponsibihty, many of them, of the Federal Government. Many of their schools are the only Federal schools, so why shouldn't we use them and get a lot of our money for experimental programs, because they not only are ideally situated, but certainly ~i e should begin by helping them The s'~me ~ ay with the manpowei training pi ograms, the Depart ment of Labor, with the economic development loans If we can reach out and bring all of the resources of the Federal Government to bear on the problem, as we are mci easingly doing, then we should make some headway; but as long as we sat back and treated the Indian people as a problem that the Indian Bureau ~ `is dealing with, you are just going to hobble along at not really m-iking the big strides that you can make if you get a big input from everyone con- cerned Mr. REID. Well, I think that makes mñch sense, and my final ques- lion, Mr. Chairman, would merely be; Do you have the mechanics through the Vice President's Council of Coordin'ttion so that you can marshal the full resources of the Federal Government, or do you need some additional help to strengthen ~ our pace, to act effectively itnd to encourage coordinated action across the board, including the Office of Education, OEO, the Department of the Interior, and wher- ever else it may be indicated and useful? Mr BENNETT Well, out of this one meeting of the Council where we discussed Indians came a committee that has been set up, and which is functioning, and I can say to you th'tt I know from several instances that they are getting results I think there has been significant mm provement Mr. BEID.Thank you. Chairman PERKINS. Mr. Thompson. Mr. THOMPSON. Mr. Secretary, it is wonderful to see you here as an old friend and seatmate for a number of years I would like to commend you on your statement I gather from your response to the questions by the chairman, that you are, notwithstanding that there have been wrinkles to be ironed out, satisfied with the relationship between your Department and OEO Is that a correct interpretation? :~ PAGENO="0734" 1572 ECONOMIC OPPORTUNITY ACT AMENDMENTS `OF 1967 Secretary UDALL. Yes, I think that our working relationships are very good I think the total effort is productive, `rnd I think the fric tion and the conflicts that we did have in the initial stages, I think w~re inevitable. You can't introduce a new program that has the broad scope and thrust that OEO had and not have conflicts and contro- versy, but I think we worked most of our problems out, and in my view, the thing that we would like to see h'ippen is to have the pro gram continued, and strengthened I think this is our basic reaction at this point. Mr. THOMPSON. Well, 3 years ago when this program was put to- gether, I don't think as one who was extremely: active, and was a member of the selec~ committee which shall we say, devised it, any of us knew with any degree of detail precisely in what exact direction any of the programs would go. It was innovative. It was sort of a bouillabaisse, all put together, and like a good bouillabaisse, it has been most s'ttisfactory One might s'~y there are too many mussels in it, 01 not enough shrimp, or something like that Nevertheless, I think that the experience has.been good. I think we are at the point now where some of us, with particular interest in certain sections, are sort of m `L nunc pro tune fashion asking for results which we couldn't reasonably have expected 3 years ago I. note with interest that you say that your two major interests are of the continuation of special efforts to assistthe American Indian. I know from haying been a next-door neighbor of. yours for 6 years that you did have this interest, and you have continued it, and ~ ou said that you want the Job Corps conservation center as it is admims tered to continue. . With respect to the school situation, it is a bit difficult, admittedly, for one from a State like New Jersey, which was inhabited principally by the Delawares and the Leni Lenapes, who have disappeared. long since to understand Indian problems. Our nearest Indian neigh- bors, as I understand it, are the Senecas and Mohawks in New York~ We see them only when and where there is steel construction. My understanding from what little I know about Indians, with res pect' to their schools especially, is that any segregation involved has been a .de facto segregation, one of geography. I have been to your State. .1 can't conceive of many. of the Indian children b.eing t.rans~ ported or being integrated into~ other school systems without a great inconvenience. As a matter .of.. fact, in . Montana in~ particular, the. weather conditions would almost prohibit it. I am somewhat startled to know that there are Indian schools in white school districts, in habited solely by Indians, but you do state it is a matter of policy that they be integrated wherever possible. Is that my understanding.? Secretary TJDALL. It is only a matter of policy, but this changed t.he. whole picture and I will say it worked very well.. The Indian child, has some very serious handicaps; he is very dis- advantaged, more handicapped than most. He has a language barrier. He has normally a home in which in the past. there has been largely a degree of illiteracy. He has a cultural barrier he has to get across, aswell. . . ~., This means that .the more school integration, there is, the. bette.r~ and this is the reason some years ago the Department made this as a: PAGENO="0735" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1 9 6 7 1573 major decision, to get the children m public schools I think we should do this everywhere possible T~iere are these situations that you are faniiliai with where i emote necessity prevents this The question there, it seems to me, is providing superior schools It may be that special efforts of the type that we are not doing now are going to be needed to bridge the gap for these children that have such sei ious handicaps Mr. THoMPsoN. In an aside at one point during a colloquy, Mr~ Hawkins suggested that it might possibly be that you have difficulties arisingout of treaties with tribal councils. Is that a factor in the school situation? Secretary 1IJDALL. Congressman, the whole Indian problem relates back to the fact that as a matter of high national policy we chose to make treaties with Indian tribes to give them a piece of land, large or small, worthless or having some worth, and to put them on it, to deliberately separate them from society and say, "You stay there and leave us alone and we will leave you alone." Quite frankly, this was our policy a hundred years ago. We pro- vided veiy minimal support in terms of economic development in those early stages This is the reason that we today are left with so many serious problems that aren't easily resolved, that these people `Lre physically segregated and you do have a de facto segregation. It is not merely in terms of schools, they are out of the mainstream in terms of highways, in terms of economics This is one of the reasons for the Indian economic development legislation that we presented this year We would like to get them into the economic mainstre'tm They can't go to the banks and borrow money Although they are Indian communities, they can't float municipal bonds I can go right down the list It is no wonder they have made so little progress because they are not in the m'iinstream of America Mr TnoiwI?soN Do you find to any extent there are tribal councils or groups of Indians who resist integration because of their culture, because of their beliefs ~ Secretary UDALIJ Many of them resist integration for cultural rea sons, yes Many of them because of their own cultui al b~ckground are not particularly attracted to some facets of ourS society; and~ I think for good re'tsons Bridging this cultural gap of educating them, of giving them opportunity so that they can decide how they want to adapt to our society, this is another very special problem we have The idea of a competitive society just as we have runs frequently across the grain with them Yet this competitiveness is one of the main elements, one of the m'nn strands of our society Mr THoMPsoN There are no Indians on this committee, I can as sure you of that I note one particular thing that interests me, that 300 VISTA vohmteers h'ive been assigned to reservations Have they worked out well ~ Mr BENN1~r'r Yes, they have In order to cooperate with them, we, as a Bureau have made available to them facilities that we have In other words, if we have a school that has a room that is not used, that is available for the purposes of the VISTA program, equipment, PAGENO="0736" 1574 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 housing, we have as a Bureau facilitated their program. They have made a real contribution to the program and we have cooperated with them to the full extent possible. Mr. THOMPSON. I am glad that they have worked out well. The VISTA section of the act is of particular interest to me be- cause I was the original sponsor of what was called the Domestic Peace Corps. This met great resistance, very likely because of its name. So, one day, under a rather odd set of circumstances, sitting around in my office with another fellow, this whole program came up. We invented the name' VISTA, Volunteers In Service To America. Isaid: How can anyone object to this? It sounds like good people coming around to pick up your used clothing and taking it to some needy neighbor, or some person who rings a bell on a cold December day asking for money for the poor. Actually, in its active form it is in better shape than was the original proposal. It has been highly successful. .1 think, though, I use this example to say, that we are sitting, some members of this committee and myself, in judgment of a three-year-old program innovated by us, without a chart, wilth nothing more than a compass. .1 think in the circumstances, and in that context it has been remark- ably and spectacularly successful. It is easy, I think, to introduce one or a series of letters showing disappointment with respect to one program or showing how red tape has caused some frustration. But I note with some interest that those applications or the ap- plications for OEO programs, no matter where they are administered, by whom, or how, are coming in from all over the United States and are being advocated by those who would turn the whole program back to the States or turn it all off or fragment it. I think it is too early; my view is that it is much too early to even consider, with any degree of seriousness or responsibility, fragmentation, spinning off, because then I think the whole program would lose its inventiveness. Now, you have had problems, Mr. Secretary, which you have al- luded to with respect to coordination and so on, but some of your re- marks are that you have been able to work them out and that you are satisfied that they are working out, and I am very glad to hear this. Secretary UDArJL. Congressman, I would be less than candid, and I know my own committee expects candor, to say that we didn't have some serious, problems in the early stages. I' had a tug of war with Sargent Shriver over several matters where the question of who should do what and how a program should be carried out. I think almost all of those disputes have been solved. Most of. the friction has been eliminated. I won't say tha.t all of it has. I think the fact that OEO has been in the picture, that they have `a mission, they have a mission that none of the rest of us have, they are a command post in terms of the impoverished people `of the country; they think about this every day when they get up; this has enabled them to be a spur and to be a gadfly and to propose new ideas and to stir things up. I think to the older agencies, although we might resent some things, this has been a good' `thing. I think .the programs have `worked out and have been very effective in most instances so far as we are con- cerned. ` PAGENO="0737" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1575 Mr. THOMPSON. I agree with you. I will conclude by saying this, and I say not on a personal basis, but on an objective basis, with respect to you and your incun~bency as the Secretary of the Interior, I thmk that you can be enormously proud of your achievements and of the achievements of your Department. Although I am not a historian, I venture to say that many, many years after both you and I are gone your name will be in the books as one of the truly greatest, if not the greatest, Secretaries of the Interior. Secretary UDALIJ. Thank you. Chairman PERKINS. I concur in that statement, Mr. Secretary. Mr. Scherle. Mr. SOHERLE. Mr. Secretary, there appears to be mutual apprecia- tion here this afternoon. Mr. Secretary, I have always had a great respect and fondness for the Department of the Interior. I have never ceased to be amazed at the protection you give to our natural resources and heritage. As an outdoor man myself, I am greatly appreciative of this. I have just a few questions, Mr Secretary. How many projects are there now as a part of the OEO that fall* under your jurisdiction? Secretary UDALL I don't know that any of us here at the table could give you a `specific answer `because proba~bly the answer today is differ- ent from a week ago. ` " ` ` ` You know, some are phased out and there are new ones that come on the line I would be delighted to furnish' to you and the committee what the total number of projects were as of, say, the end of the fiscal year end- ing July 1, but I don't have it at my fingertips Mr. SOHERLE.' Now; these individual' projects' we have reference to `ire all separate grants, are they not ~ Secretary UDALL. in most instances, 3708.' ` ` ` ` ` `Mr. SCHERLE. Like the Job Corps, andso on? `` :`` ` Secretary TJDALL. Yes. `Mr. :SCHERLE. Would you give me or submit' for "the `record' a cost i atm of the grant m regai d to the number of enrollees and the amount of mostinvolved? ` `` ` ` ` " ` ` ` ` `Secretary TJDALL. Yes';'we'can dO that, also. ` ` ``~ ` Mr. SOHERLE. Fine. :, , , , ` ` ` ` (The information follows:) ` COST RATIO OF GRANT vo Jon CORPS IN REGARD TO THE NUMBER OF ENROLLEES The Job Corps Conservation Center program is the only program through which there is an identifiable `direct transfer of funds to the Department of the `Interior from OEO All other OEO grant programs are funded and administered directly by the receiving organization, other than Interior,, i.e., Labor for `Neighborhood Youth Corps, etc. ` `` ` ` ` ` Dui ing the period July 1 1966 to May 1 1967 Job Corps centers operated by the Department reflected a total of 4,525 cOrpsmen man-years with `an operating cost of $24 222 000 This Indicates an operating cost per enrollee man-year ratio of $5,352. The figure does not include amortization capital costs agency direction or other costs funded by OEO. (Ref: "Job Corps Reports",' `June 1967, Office of'Economic Opportunity, pages 62 through 69.) ` ` SO-084-----67---pt. 2-47 PAGENO="0738" 1576 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF .1 967 Mr. SCHERLE. Now, under the Department of the Interior, who has rèspónsibility if anything goes wrong under this program? Is it your responsibility astlie Department head or is it your subordinates. or ar~ they subservient to the OEO? Secretary TJDALL. No. The way my Department is setup, the buck goes to my desk. So I will have to say. I am responsible, Congressman.. I do have with m~today the two people who are the ones that I would. look:to primarily to make decisions, to alert me to the decisions that I have to make, Mr. Bennett, the Indian Commissioner for the Indian. program, and Mr. Old Coyote, who handles the Job Corps. program.. Mr. . SCHERLE. Since OEO has come into existence, it has always. been a concern of mine as to how this came to be a part of your De- partment. Were you obligated to take them or did you ask for them~ or just how did they come to be your responsibility? Secretary TJDALL. Congressman, there are two answers~ Of course,. OEO was given the broad responsibility it had toward poverty. We~ were aware all along, in fact we testified and it. was our view, that the Indian people, because they are the most impoverished group,. should participate in as many of the programs as possible. So, they were blanketed in in terms of the way the legislation was written generally. Generally, so far as the Job Corps centers are concerned, I. go back to my days of Congressman, to something like the old CCC. Those of us who pushed this idea for several years were very pleased when the: Job Corps, as it came to be known, was included as part of the total poverty program. Now there are two agencies that have large outdoor areas, the Department of Agriculture and the Forest: Service, and my own Department with all the outdOor areas, and the question carrie up as to how should this be divided up between Interior and:Agriculture~ This was a problem. That was quite a tug of war. Then we had the problem with us and OEO as to what theyshould do and what we should do. We wrestled around with this for several months. We finally came to a settlement and as I say, I t.hink it worked out quite well. Mr. ScHEnr~E. Mr. Secretary, as long as there still appears to be a problem of wrestling with the question as to who has responsibility~ don't you think it would be a good idea if the responsibilities that you. now have over certain segments of the OEO which have been assigned to you, if you just took them over completely and abolished the OEO to that extent? . Secretary UDALL. No; I really can't agree at all conscientiously on that. Let us take, for example, the Indian programs because both in terms of budget, in terms of people, in terms of drive, this has intro- duced a new element into the Indian picture. This has introduced an element that is competitive in the very best sense with the Bureau of Indian Affairs which, of course, has had the responsibility for over a. century. If you simply say, "Well, we will give you. that portion of the budget, of the OEO budget that is now going to Indians and you get so much more money," I don't think this would be nearly as effective as having the focus that you have, the leadership, the drive you have in the Office of Economic Opportunity, itself. PAGENO="0739" ECONOMIC OPPORTUNITY ACT `AMENDMENTS OF 1967 1577 For many reasons, I would like to see it remain as it is rather than to change it at this point. Mr. SOHERLE. Mr. Secretary, from what I have seen within the con- lines of your Department, I would say that your people are very, well qualified to lead, particularly in the various elements of national concern. If you have to bring in and train new people to run and guide those under your very concern,, it wOuld appear to me0 it would be easier if you could do it. As long as `you have the `title, maybe you should have . the responsibility. 0 Secretary IJDALL. I think, as I said before, when you get to the In- dian people and their problems, we need the Department of Labor with their manpower training, we need the Commerce Department with. their economic development loans, we need the Office of Educa- tion doing as much as they can to help strengthen Indian education. I don't think that it would really be best to center everything that concerns Indians in my Department because, having these other pro- grams I think adds an extra element that gets more action and more progress. Mr. SCHERLE. Then in your own mind you do not feel that there is duplication and overlapping and a lot of wasted effort? . ` Secretary TJDALL. I don't see any `waste in the program in terms of either wasted manpower or effort. In fact, I think the extra leadership and extra drive, the innova'tive effect is the thing most worthwhile. Mr.'~ SCHERLE. Mr. Secretary, I think there was a grant `made to the Zuni Indians not too long ago somewhere in the vicinity of $200,000 to $250,000; I am not sure of the figure. I have always been a great ad- mirer of Indian craftsmanship, particularly of the .Hopis, the Navajos, and the Zuni Indians. In fact, my wife is quite fond of `this merchan- dise Will this grant that is being given to them detract from the creative a~biliity that these people have and merchandise the end product to the extent that a sort of "Made in Japan" type of stigma may attach to their craftsmanship? . Secretary UDALL. No; quite the contrary, because the Indian Bureau and our Indian arts and crafts people, the very thing we have tried to do' is to encourage the development of skills `of the native crafts. I think I can speak for both Commissioner Bennett and me when I say that if the time comes when the American people, themselves turn to using machines for turning out what I would consider fake Indian jewelry and Indian artifacts, I think this will be a very sad day if it comes. 0 0 T 0 There is no way we can prevent Japanese imitations or imitations from other people, but as long as `the Indian feels so strongly about his culture `that he wants to develop his own art, I think we should encour- age it in every way we can. O Mr. THOMPSON. Would the gentleman yield? :Mr. Scm~ia~E. Yes. . ` . `0 Mr. THOMPSON. I share your admiration for this work. I can't help wondering, despite its' beauty and their great skill and their a~bility to market it, why they are still among the most impoverished people on earth It might be that to educate more of them to do this magnificent han'dwork themselves would help them more than any danger that their work would be duplicated by someone else. Would you `not agree? Mr. SCHERLE. Mr. Thompson, I did not mean that to be the context of my question. If I left that impression, I am wrong. PAGENO="0740" 1578 ECONOMIC OPPORTUNITY ACT AMENDMENTSOF 19&7 The thing 1 was c neerned about was, what is the $250,000 to do in this regard? Is it to manufacture this merchandise on a quantity basis? Is it to train additional people so they can also participate in this? In other words, what is the money for? Secretary LDALL. As I recall the program, it is training, marketing, encouraging a better organization. The Indian too often in the past, with this very careful and beautiful handwork, has produced the prod~ uct but somebody else makes the profit. WTe both need to have more skilled young people who can develop these skills as well as marketing programs that serve the Indian. The Indian people, themselves, with their own marketing progranis, have often been highly successful. This is the thing we have been en- couraging more and more with some of the tribes that you mentioned earlier. Mr. SCHERLE. Under the present system of developing this craft and sales, would anyone of you know what the average income would be for those who are involved in working silver turquois? Secretary UDALL. I could make a guess. We might furnish you figure on that. I think the best artisans and craftsmen in some of these southwestern Indians do quite well and increasingly well. Mr. SCHERLE. I have seen a published statement on one as high as $30,000. Secretary UDALL. Like you, I have purchased some-my wife is equally fond of them-for various gifts. It pleases me to see them get such handsome figures. I wish they all would get it for that kind of work. Mr. SCHERLE. Thank you. Chairman PERKINS. Mr. Hawkins. Mr. HAWKINS. Mr. Secretary, I join in welcoming you to this com- mittee and commend you on a very excellent presentation. Those of us on the committee perhaps who had less seniority than you had are pleased that you have gone on to better things. = Secretary T.JDALL. There are days when I wonder. Mr~ HAwKIxs. At least, it gave us more seniority, anyway. With resp~ct to the school problem, so that we don't leave that on a negative note, I woud like to indicate that on another committee we~ are studying the questionof bilingual education. We have looked with great admiration on the project known as Rough Rock demonstration. To me, this certainly is. a most inspiring example of new techniques being employed. I certainly want to say that if in cooperation with OEO you have. been ableto initiate this demonstration of a school project, certainly I think it goes a long way to justify the cooperative relationship which has been worked out because this, I believe, has been an excellent example. I am hopeful it will serve to show us what should be done among the Spanish-speakii~g people and other non-English speaking people of our country. I have several rather simple questions to ask you. One pertains to the service on the Economic Opportunity Council since we have had so little testimony about this. Does the Council meet regularly and, if so, what are its functions? In what way has the Council contributed to the cooperative relationship that exists between your agency and other Federal agencies ~ PAGENO="0741" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1579 * Secretary TJDALL. Director Shriver has been very systematic with the Economic Opportunity Council. They have met every month. I am not able to attend all of them. I attend as many as I can. Of course, the fact that the Vice President, himself, was directed to serve as Coehairma.n is also very important. He takes a lively in- terest in it. The agenda of these meetings normally is directed toward the big problems, the problems that cut across the different departments and. also the troublesome issues. It is a trouble-shooting entity. Why aren't we doing a better job? Why aren't we moving faster in this area? This is the reason why I told Sargent Shriver that I wanted to have a meeting of the Council on Indians, I wanted to indoctrinate all these other people or get them to see the Indian problem that I saw, to enlist their interests, to enable us to do what we could to establish a sort of permanent subcommittee of the Council that would talk about; improving the overall effort in terms of Indians. I would say the Council to me has been a very positive force and it makes a very good place to discuss the broader issues. Mr. HAWKINS. But it is not a Council in name only; it is a workiiig Council which does meet regularly and it does have specific functions? Secretary TJDALL. Yes; indeed. Mr. HAWKINS. 1,Vith respect to the placement data which I think you discussed with the gentle lady from Oregon, these statistics that were compiled by the Office of Economic Opportunity, I would merely, Mr. Chairman, at this point like to indicate that heretofore this report has been furnished to this committee. I just noticed that it does furnish specific statistics on verified place- ment in jobs in school or in the military. It is based on data including 2,381 Conservation Corpsmen as well as 4,068 in the training centers. I think the data included 52,985 youths that had entered jobs in the military or schools, of which 76 percent had gone into jobs. I think to leave any inference that we have not had placement success, the data furnished to this committee is perhaps slightly erroneous, and if any further data is needed certainly we should join in requesting the information, but I think it should be known that perhaps so much has been furnished to us that some of us really haven't had time to read it. This next question is one which has reference to the Indian task force. You indicated this was a task force which was suggested by the Council that we today do have such a task force in operation? Secretary TJDALL. This was a subcommittee of the task force; you can call it whatever you want. This grew out of the meeting that the Economic Opportunity Council had to discuss the Indian problem and the feeling that there was a need for a coordinating committee to assure that a maximum effort was made on behalf of the Indian problem. I must hay in the last year or last 18 months I think we have. gotten some results and very concrete ones. Mr. HAWKINS. Does this consist of Indians, themselves? Secretary TJDALL. No. I am talking now about the Economic Oppor- tunity. Council, itself, that consists in the case of my Department-a stibcommittee of theCouncil. .. * * ** * PAGENO="0742" 1580 ECONOMiC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. HAWKINS. In the CAP agencies that operate on the reservations, are Indians integrated throughout these agencies and, if so, how are they selected? Secretary TJDALL. The Indians are integrated wherever there are Job Corps camps on Indian reservations. These are not, however, camps that are just Indian youths. They are camps like the others, generafly. Of course, the Indian youth participate where they are accepted in the Job Corps where they undertake the same responsiblities that other corpsmen do. I am told, just to give you a statistic, there are about 450 Indian youngsters in the Job Corps today. Mr. HAwKINs. These are all the reservations? Secretary TJDALL. No. Mr. HAWKINS. These are Conservation Corps? Secretary TJDALL. That is right. Mr. HAwKINS. In addition to that, I assume there are youngsters somewhere else, are there not? Secretary TJDALL. There are Indian youngsters- Mr. HAwKINs. Those who leave the reservation I assume are lost in the total population. Secretary TJDALL. That is right. Chairman PERKINS. Mr. Steiger. Mr. S'rmGER. Mr. Chairman, thank you. I want to join in welcoming the Secretary and in paying particular tribute to Commissioner Bennett from the State of `Wisconsin. It is a great pleasure for me and an honor for our State to have him as the Commissioner of Indian Affairs. In your testimony on page 7 you say: There is a continuing need for the broad innovation made possible through anti-poverty programs. Innovative manpower, housing. health, education and other programs can be accomplished through the responsible agencies with co- ordination by the Office of Economic Opportunity. I am somewhat surprised, Mr. Secretary, that as I read that state- ment, what I end up with is a somewhat different change than I would have expected. It seems to me that coordination might better come from the Bureau of Indian Affairs rather than from the Office of Economic Opportunity. Secretary TJDALL. Well, I wouldn't want to mislead you because in terms of the total effort being made today, so far as the Indian people are cOncerned I think that the organization that has and must have the paramount responsibility is the Buerau of Indian Affairs. I think that with the large and broad responsibilities that it has we did not anticipate, nor has OEO displaced the Bureau of Indian Affairs in terms of its paramount responsibility. But as far as the Indian people as part of the poverty group in the country and how they and their problems and the total national effort fit together, OEO, I think, has an oversight function, a coordinating function. I think I should clarify it for you. So far as the Indian programs or Indian advancement, Indian de- i-eloprnent is concerned, the Indian Bureau and my Department has to 1~ave the dominant role. As far as the poverty people of the country, I think that OEO quite properly is the agency, as I indicated earlier in PAGENO="0743" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1581 my testimony, that has to give thought to their problems day by day and hour by hour in a way that we do not. Mr. STEIGER. In your testimony, also on page 7, you said that "eco- `nornic opportunity programs are enabling Indian groups tO more quickly identify and resolve their own problems." The Bureau of IndianAffairs has had the responsibility for Indians for, as you indicated, over a century. Now, what is it that OEO has done that BIA could not do and did not do and why didyou not re- quest from the Congress the kind of authority necessary to more quickly identify and resolve the problems of Indians through BIA? Secretary 1JDALL. Let me give you one very good example from a per- sonal experience which will show you what I mean in this regard. The OEO, in one of the major grants they have made to the largest Indian tribe, which occupies the largest land area which is as large as West Virginia, incidentally, the Navajos, made a legal grant that set up a legal aid program. This is really much more than what we normally think of, people just getting advice, because you are dealing with people who have every little awareness of our legal system as well as their own legal system that they are trying to develop. Now, this is something that, if you had `left it up to the Bureau of Indian Affairs to initiate, I doubt that it would have been initiated at this point. It was badly needed; it was very important to carry it out. It has been very well funded; it is now in its `second year; and I think it is going to be a highly successful program. Since legal aid has been one of the major innovative things that OEO has tried out in poverty areas generally, they said logically are there Indian areas where we should try out this idea to see what we can do in terms of educating people as to their rights and helping them to protect their rights. This is where OEO provided an innovative thrust that I don't think the Bureau of Indian Affairs would have under normal circumstances, and to the benefit of the Indians. Mr. STErnER. You indicated, if I can just clarify one little bit fur- ther, in your statemeiit, on pages 7 and 8, "With the coordination of the ,Office of. Economic Opportunity." That is not really quite what you mean, if I Understand the answer you gave; it is `still BIA that `must have the greatest share of the effort to `help the Indians in con- junction with OEO. Is that correct? Secretary UDALL. `So far as the Indians are concerned, the Indian people, their future, their problems, I think that the Indian Bureau of necessity has to have the paramount role and OEO is providing a new thrust and is entering int'o the picture. But certainly they are not coordinating Indian affairs. This is the job of the Indian Com- missioner. But they are coordinators of the overall poverty progrnm. To come back to the example I used a moment ago, if they are going to do sothething about aiding the impoverished people of the country, getting better protection of their legal rights, understanding their legal rights, they have the paramount responsibility in this field, they do the coordination. They, in thi's instance, decided really what should be done in this limited area so `far as the Indian people are' concerned'. The answer is a little bit complicated, but my answer is yes and no PAGENO="0744" 1582 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Mr. Si~mGER. You mentioned the $780,000 services grant from OEO to the Navajos. Prior to that grant, didn't the Navajos have a contract with BIA and, if they did, is that not a duplication of effort between the BIA Indian counsel and the Indian legal service staff? Secretary TJDALL. I happen to be very familiar with this because of the long lawsuit I had, but the Navajo Tribe had their own lawyers representing them generally as far as .their legal affairs were con- cerned. They also had a. small section-as I recall it, of one or two lawyers, that either spent part time or full time advising individual Navajos, a hundred thousand of them, you see, spread over an enor- mous area. What the OEO grant did was to enlarge the thing-and this did not come from Federal funds; financed this program themselves. They could not afford to enlarge it, and in this instance I believe the tribal council felt it was a very useful program. They presented it to OEO; OEO decided to fund it and you had a full-blown program rather than what was a very modest beginning of a program. Mr. SmIGER. You may be familiar with the comprehensive evalua- tion of the OEO Community Action programs on six selected Indian reservations, done in September 1966 by Human Science Research, Inc., of McLean, Va. I was interested in looking through the study and let me quote two criticisms that were made of CAP components. No.1: Indians find two chief problems in connection with preemployment CAP com- ponents. Primarily they are disturbed because there is so little orientation toward the. employment of family heads. Most components deal with children or adoles- cents. The intent behind this approach of preparing the next generation for the future does not impress many Indians * * The other quote: The other objection rests upon widely held feeling that many CAP jobs are "make work" operations and contribute nothing that the reservation can use, except the wages of those employed, which funds immediately flow out of the reservation to surrounding white communities where stores and services patron- ized by Indians are largely found. This means that should CAP operations cease the reservations population would be just as poor as before. . . more immediate practicable modification of this approach may be to train Indians for and help establish services, trades, and small stores (perhaps cooperatives) on the reserva- tions, themselves. . Could we have from you for this committee any comment on these two? Secretary UDALL. I think this is a very good point. This is a sound analysis. .. . One of the reasOns that we are attempting not only to get the type of economic development where you locate a factory or a plant on an Indian reservation but we then must see to it that the Indians, them- selves, capitalize on this by building the community facilities, either themselves, or encouraging others to do it by leases, so that the money stays in the Indian community and turns over. I think Commissioner Bennett gave me the figure that if you get a new industry to establish itself and if you want to get the full benefit of it, that for every 100 jobs that you get on an industrial payroll, if you can also keep the money in the community you get 60 more jobs from service industries and other industries. This is oftentimes lost PAGENO="0745" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1583 under what I hope we can regard as the old way of* doing things on Indian reservations You have to have the total approach In other words, I think this is sound economically, what you have read. Mr. STEIGER. This was a report done a little less than a year ago. Has there been any attempt or any effort made to redirect the CAP components on the reservations to avoid these things? Secretary TIDALL. This has been a problem I am afraid I discussed with my Indian Commissioner long before the report came out. We have been aware of it. We have been concentratmg on it. We have had some success in some areas. It is the problem of economic viability. This is the big and total problem. Indian communities are not unlike newly developing countries in the sense that you have to develop the total economic approach. Tin- less you do, you have all of these handicaps such as you were describing a moment ago. Mr. STEIGER. One of the other statements made in the study is as follows The BIA was almost wholly ignored in the first year ofoperation-not because, in general, the BIA was unwilling to help and not wholly because the Indians perceived the BIA as unable to help. Indians wanted this program. for themselves and they wanted it badly enough to turn their backs on their traditional external sources of help Is that a valid criticism? Secretary TIDALL. I don't know that from what you read I can get the context that you have in mind. I would say On the whole, I used the word before, I think OEO with their new ideas and their new programs have provided innovative influence in Indian affairs. They challenge the Bureau of Indian Affairs in some ways; because they h'tve h'td extra money, they have done things that the Bureau of Indian Affairs~ couldn't do. Most of these things have been very constructive. My feeling is that the problems are so serious that we confront so far as Indian people, that having new ideas and new people and a new thrust has been a good thing rather than a bad thing. Mr. STEIGER. That is all, Mr. Chairman. Chairman PERKINS Are there any further questions ~ Mr HAWKINS I have none Chairman PERKINS. Thank you very much, Mr. Secretary. You have been here now almost two hours and a half. We thank you for your presentation. You have been most helpful to our committee. Secretary TJDALL Thank you, sir (Whereupon, at 4:15 p.m., the subcommittee recessed, to reconvene at 10 a.m., Wednesday, July 12, 196'T.) (The following was subsequently submitted for the record) STATEMENT OF Mns. DOROTHY STEFFENS ON BEHALF OF THE WOMEN'S INTERNATIONAL LEAGUE FOR PEACE AND FREEDOM I am Dorothy Steffens appearing on behalf of the Women's International League for Peace and Freedom. I am an educator by profession but have worked in the planning and coordination of programs for underprivileged youth of Washington, D.C. Because my special knowledge of the war on poverty has principally been concerned with the D.C. area, I shall base my testimony on my work with the poverty programs in Washington. PAGENO="0746" 184 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Since its founding by Jane Addams lii 1915, the League has been deepl~ con- cerned with the conditions under which people live and work, and with the de- velopment of human potential. It is not only women, however, who are aware that a whole community is impoverished when a large number of its members fail, because of lack of opportunity, to achieve their fullest potential. No Amer- ican can remain untouched by the menacing consequences of poverty, the spread of slums, the decay of social services and the human waste which leads to vio- lence, crime, and chaos. The 1960's saw the long-overdue beginning of a coordinated national effort tO rehabilitate America's urban and rural poor. The Executive and Legislative branches of our national government are to be commended. However, it has not been without its trials and trauma. To use the words of the President in his March 14, 1967 l~Iessage on Urban and Rural Poverty, "Few undertakings in our time have generated as much hope, produced as many immediate and beneficial results, or excited as much controversy as the anti-poverty program As a professionally interested observer, and then evaluator, of one com- munity's participation in this "war on poverty", I have personally seen and ex-' perienced the hope, the beneficial results, and the controversy which character- ized the first stage of this national undertaking. Last June, exactly one year ago, I was called from my work as a suburban educator to set up a program which would allow the public and private agencies administering anti-poverty programs to evaluate their efforts with those people they were trying to reach, the under privileged youth of Washington, D.C. The result was last October's Conference on Planning for Washington's Children and Youth, the full report of which was published under the title, "The Day After Summer" and is appended hereto. Washington, D.C. is not a typical city. However, there are several funda- mental and unusual implications of last summer's Washington, D.C. experience which are applicable to communities throughout the nation and which are directly related to the total concept of the "war" which we are fighting. This is the war to raise human hopes and aspirations, to bring a large group of excluded Americans into the mainstream of an affluent society, to change society's "burdens" into, producers and contributors; in short, to promote the fullest measure of human potential. Some of the provisions which have allowed the Office of Economic Opportunity to promote this struggle for self-realization `of the underprivileged are today under attack and could be greatly affected by the proposed amendments to the Economic Opportunity Act. I would like, there- .fore, to address myself to the `desirabilIty of retaining these provisions. INCENTIVES TO COOPERATIVE EFFORTS The availability of OEO funds for special programs for youth led to one of the first efforts in Washington to coordinate programs among a wide variety of public and private agencies. As any day's City Life Section of the Washing- ton Post illustrates, there has been repetition, overlapping and enormous gaps in essential `services to citizens. `Even more than most cities. Washington has been plagued by what one critic called "non-self government" which has, produced a monumental failure on the part of the service-providing civic agencies to `act cooperatively or even knowledgably in relation to one another. However, as a result of OEO funding, last summer saw the beginning of machinery which would allow for communication and exch'ange of information between agency heads, their staffs, and citizen representatives in the develop- ment and implementing of local poverty programs. The thirteen members of the Summer Planning Committee under which last summer's youth programs were planned and operated, included representatives from religious and voluntary groups such as the Archbishop's Committee on Community Relations. The Council of Churches, the Health and Welfare Council and the Urban Service Corps. Local D.C. government agencies included the Departments of Welfare, Recreation, and Public Schools , and the Office of Pro- gram Coordination of the D.C. Government which, incidentally, took a leader- ship role in the Committee. Poverty program representatives came from the Metropolitan Citizens Advisory Council and the United Planning Organization, `which provided staff and funds and office space from its budget. While differences `in basic orientation `and customary practice between these groups made fOr pro- longed and sometimes acrimonious discussion, they learn to control' individual PAGENO="0747" ECONOMIC OPPORTUNITY ACT. AMENDMENTS OF 1967 1585 biases in a common concern for the needs of D.C. children and youth. They also received considerable support from Vice President Hubert H. Humphrey and from the Presidential Advisor for National Capital Area Affairs, Mr. ~ Charles A. Horsky. However, one cannot ignore the fact that the initial catalyst was the avail- ability of new sources of income for innovative anti-poverty programs. While the overall record for creative innovation in the District of Columbia is far from good, the pattern for cooperation has been established and provides a model for other communities. This year, 1967, the planning in D.C. began "much earlier, has included many more than the original thirteen agencies, and has been formalized by the D.C. Commissioners in an Inter-Agency Committee. This Committee is composed of the representatives of all local agencies and groups involved in direct service to D.C. residents of Washington's neighborhoods. This promises to have far-reaching efforts on patterns of communication within this federal city and alone would justify the OEO approach to funding special innovative anti-poverty programs. COMMUNICATION BY AND WITH THE POOR A lesson which emerged with startling clarity at last Octobers evaluative conference, and has been confirmed in the months since, is that there is no ieal dichotomy of mteiests or inability to communicate betw een low income youth and the rest of society. The 600 twelve to twenty-five year-olc1s who repre- sented~ neighborhood youth at the Conference sessions communicated clearly and productivity with the 600 social workers, teachers, recreation workers, volunteers and local and federal administrators who symbolize the more affluent world. The result of the setting up of machinery for communication between the neighborhoods and agencies has been the remarkable accomplishment of the pla~nning and funding of programs for twenty different neighborhoods in D.C. The success of this continuing dialogue serves to confirm the findings of Dr. Hylan Le\s-is' excellent studies `of Washington's urban poor, Cr088-Tell; and to demolish outmoded concepts of a radically different "culture of poverty" whose members are locked into a tight world from w-hich they are unable to touch or be touched by the rest of society. Where we are dealing' with comnion human concerns-jobs, housing, recreation, schools, welfare, etc.-poor people and the affluent world can communicate very well indeed. The great need now- is to continue to use local and federal anti~poverty programs to provide channels of mobility between the low and middle income groups. By providing alternatives. we obviate the need for demonstrations, riots, crime-acts which are the ultimate protest of a frustrated and desparate people. OEO programs such as the Job Corps, Neighborhood Youth Corps, Legal' Serv-' ices, Upward Bound, Community Advisory Councils, and' a host of others such as the last summer's planning effort of Washington, D.C. have narrowed the gap between the poor and the rest of society. Removing these prograin~s to established federal agencies at this particular time would inevitable result in decreased com- munication. The reason for this is that in the old-time agencies; programs are fitted into agency molds and become services for the' people rather than services u ith the people More than any other piogiam or service pros ided by the go~ em ment, the poverty programs demand and, in fact, cannot' really succeed without the direct' participation and involvement of those who these programs are to benefit. *` DEMOCP &CY A~ D INVOT VEME~ T Basic to our system of government is the concept of participatory democracy-- that individual citizens have the right and the ability to take part in finding solutions to their own problems. Perhaps the deepest tragedy of the "self-perpetu- ating cycle of poverty" and the one with the most serious ëonsequences' for our form, of government has been the hopeless acceptance of their `inevitable fate by the more than 30' millions of Americans who live below and outside o'f our economic structure. The emphasis" w-hich `the OEO has placed on' involving these people as particmants in local rogrqins thiough represent `itives omi policy making and advisory boards has provided a living lesson in democracy. I have personally Witnessed the startling metaniorphosms of ~ oung persons and adults after several weeks or months of membership on boards or committees where' they are listened to with respect and acceptance. Young "dropouts", kids who' have been "busted" PAGENO="0748" 1586 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 (paled) at some time in their past, former addicts, toil-worn grandmothers, aspiri,ng students, have grown into effective articulate leaders of their peers able to exercise a common sense and wisdom and reasonableness which bodes well for the future of the nation. We must be willing to encourage and develop the participation of these people in the planning for their own lives. Traditional programs promote dependency. The OEO programs promote leader- ship development. This is probably the single most significant contribution of the anti-poverty program to date. In Washington, we now have 20 Neighborhood Planning Councils in which youth, parents, professionals and government staff representatives contribute to the setting of priorities and the determination of programs for their own neighborhoods. These Councils have actually set the pro- gram and the budget for this year's youth programs. In Washington, therefore, as in communities throughout the nation, OEO has been the catalyst for developing leadership among those who have been tradi- tionally excluded from local decision making. It has provided the opportunity for an emerging group of capable and knowledgeable "indigenous" persons who are a continuing network for reaching into the slums, and who serve as living proof that there is indeed hope within "the system." Just as parents are ambivalent about the developing and competing powers of their own adolescents, so too are existing governmental and private agencies taken back by the vigor and imagination of this developing segment of our society. And just as we must expect to see adolescents make some errors of youthful enthusiasm and excess, so too, will there be errors and problems as this hitherto undevelOped and neglected group of Americans emerges into full citizenship. My overall concern in this testimony is to urge that OEO be permitted to con- tinue to function without crippling amendments; that the Community Action Programs be funded at increased strength as probably the most fundamental and promising aspect of this "war"; that Job Corps. Neighborhood Youth Corps, `VISTA, and other OEO programs remain under OEO direction; that involvement of youth and parents be increased and their role strengthened by providing leader- ship training resources for them; and that the Office of Economic Opportunity remain the central agency for planning, coordinating and evaluating programs already begun. RESOLUTION ON SocIAL WELFARE BY WoMEN's INTERNATIONAL LEAGUE FOR PEACE AND FREEDoM-U.S. SECTION (RESOLUTIONS AT ANNUAL MEED~ING, ASILOMAB (PACIFIC GROVE), CALIFORNIA, JUNE 19-24, 1967) To: The President of the United States. Senator Lister Hill, Chairman, Senate Committee on Labor and Public Welfare. Representative Carl D. Perkins, Chairman, House Committee on Education and Labor. Mr. John W. Gardner, Secretary of Health, Education, and Welfare. Mr. W. Willard Wirtz, Secretary of Labor. Mrs. l~lsther Peterson, Assistant Secretary of Labor. A. Philip Randolph Institute. The Women's International League for Peace and Freedom, at its Annual Meet- ing at Asilomar, June 19-24, 1967, recognizes the need of the United States gov- ernment and its citizens to take measures to correct the malfunctioning of an eco- nomy which has a growth rate of 5.5% a year, a gross national product of $750 billion (1966) while allowing 33,OO0.~J0 of its citizens to exist in utter depriva- tion. No American can remain untouched by the menacing consequences of pov- erty-the undermining of faith in political and civil rights, the mass frustration produced when legitimate hop~s are unfulfilled and the decay of social services whidh leads to violence, crime and chaos. All America is involved in the plight of the migrant workers, the deprived American Indians, the Spanish Americans in the New Mexican hills, the habitants of the tent cities of Mississippi, the dis- placed miners of Appalachia, the rumbling masses of the urban ghettos and the young lives on tl~e streets of eiti~s everywhere. There is little evidence that current programs designed to eradicate poverty have made significant progress or that they can do so in the future. We urge PAGENO="0749" ECONOMIC OPPORTTJNITy' ACT AMENDMENTS OF 1967 1587 that greater support and funding be given to the programs administered through the Office of Economic `Opportunity and that intensive research be undertaken with the purpose of revamping our welfare ~ystems. Noting the careful and definitive planning that ha's gone into the A. Philip Randolph Institute's proposal, "A `Freedoui Budget' for All Americans", we urge, furthermore, that this stUdy he considered in designing legislation which would ea~ark a substantial percentage of our future economic growth for the eradica- tion of poverty. Tuu PRESBYTEBY OF WASHINGTON CITY, THE UNImn PRESBYTERIAN CHURCH IN THE UNITED STAVES OF AMERICA, Washington D.C., June 15,1967. Hon. CARL D. PERKINS, Rayburn House Office Bailding, Washington, D.C. DEAR CONGRESSMAN PERKINS: The General Council of the Presbytery of Wash- ington City at its meeting June 12, 1967 passed the following resolution which is sent to you for the consideration of yourself and your committee: "The General Council of the Presbytery of Washington City favors the con- tinuation of the Office of Economic Opportunity as the Agency for the coordina- tion of the war on poverty, with substantial increase `in appropriations for its programs." Faithfully yours, JOHN H. GROSVENOR, Jr., IS'tated Clerk. B'NAI B'RITH WOMEN, Washington, D.C., June 30, 1967. Hon. C~&aL D. PERKINS , Chairman, Committee on Education and Labor, House Office Building, Washington, D.C. DEAn CONGRESSMAN PERKINS: B'nai B'rith Women wishes to express' its continuing support for our country's War on Poverty. Therefore we support the continuation of a central agency (such `as the Office of Economic Oppor- tunity) to concentrate on the problems of the poor. We believe it is too soon to end this experiment or to weaken the effectiveness of the agency. A central agency is needed for the development of many facets of a program which is designed specifically to meet the needs of poor people and `to coordinate the many poverty-related programs of all Federal agencies. The enclosed resolution concerning the Anti-Poverty Program was approved at a recent meeting of the Executive Board `of B'nai B'rith Women representing 135,000 members, in Session at Washington, D.C. We will appreciate it if you will include this in the House record of the hearings. Sincerely, Wallye Rosenbiuth MRS. ARTHUR G. ROSENBLUPH, President. ANTI-POVERTY PROGRAM Whereas, the various Anti-Poverty programs have as their major goal the elimination of poverty for all Americans, and Whereas, one purpose of these programs is to enable deprived groups to live in dignity, and Whereas, an additional purpose is to provide opportunities to increase self- respect, and Whereas, the Anti-Po!verty programa are designed to `assist deprived groups to develop constructive community channels for self-help, and Whereas, the Anti-Poverty Program also seeks realistic Solutions to these problems originating initially from those immediately affected, Therefore, be it, resolved, That B'nai B'rith Women continue its Support of programs designed to raise the economic level of the disadvantaged, be actively involved in community action projects which support the Anti-Poverty programs, and PAGENO="0750" 1588 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Be it further resolved, That B'nai B'rith Women intensify educational efforts among its members and the communities in which it has chapters to establish a climate favorable to these programs and encourage community participation in seeking and implementing solutions to meet individual community needs. SUNNYVALE COMMUNITY COUNCIL. Sunnyvale, Calf f., May 10, 1967. Hon. JOSEPH S. CLARK, U.S. Senate, Washington, D.C. DEAR SENATOR CLARK: The Sunnyvale Community Council has had the unique experience Cf working in many capacities with our local War on Poverty agency. We were active in establishing the Economic Opportunity Commission of Santa Clara County, Inc. Also one of its Area Service Centers. We have had a com- ponent contract with both the County EOC and neighborhood Area Service Center (the latter unilaterally cancelled due to budget "oversight"). We share board members with our local ASO Board. We are supervising semi-professional workers who are on the NOC payroll. We have recently completed an overview of what is being accomplished in the City of Sunnyvale by the EOO Delegate Agency staff. (See attached program outline.) The Sunnyvale Community Council undertook this evaluation of local pro- grams when the Central EOC, at the urging of Area Service Center Directors, set aside evaluation of the year's work. The Directors' stated. "It is too soon to evaluate." Yet this Community Council feels that the trend toward establishing parallel services with already existing agencies is one that needs evaluation. It seems there is not enough money in Poverty funds to recapitulate services exclusively for the "poor." Rather we would encourage local War on Poverty programs to Cooperate with on-going volunteer and civic groups. Evaluation is the tool of assessment vitally n,eeded by such a massive, loosely organized program. The guideline for yearly `evaluation should not be discre- tionary on the part of local poverty groups; ,(It should be noted here that the Research and Evaluation Department of the County EOC has never been ade- quately used and recently was eliminated from the budget.) `AccOunting procedures of the EOC also have been a concern of the Sunnyvale Community Council. In doing a superficial check of budget items and `Sin kind" contributions, `we~ have found a few discrepancies between the Area Service Center's statements and apparent facts. We must rely on the `federal auditors and accountants to maintain the established guidelines for accuracy in reporting budget items. We call upon the Congress to tighten ~the OEO guideline for local accountability in' fund dispersaL ` ` ` The Economic Opportunity~Act described a grand plan for breaking the chain reactions ~ poverty. Its one failure lies in the'hands of the men who have' begun to implement the plan." More careful selection of qualified staff; greater training for professionals as well as the poor; a longer look at needs, problems, possible solutions and goals before acting (in other words-good social planning;) are first steps in the process of retooling ~society for greater participation by the "lower fifth." `In addition, tighter fiscal' accountability, independent evaluation of programs and coordination with existing community services are needed be- fore Community support will be forthcoming. We look to Congress to reorient this massive program so it will achieve its laudable'gOals. ` ` ` Sincerely, ROBERT E. LAWSON, President. F~RUARY 24, 19fi7. On December 10th of last year, the Economic Opportunity Commission of Santa Clara County Inc gave priority to manpower development with special emphasis on coordination of' community resources" as' the prime goal of the War on Poverty in this county. (pg. 67-Budget Proposals) , To this broad goal of making changes in the social fabric `Of our county, the EOO has dethied and added the following definition of the role the Area Service Center'will play in pursuing the goal: PAGENO="0751" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1589 ASC will: 1. Provide a new, expanded and coordinated social treatment service pro- gram located in an area where the clients live. 2. Focus existing and new facilities and resources toward a compr~hen- sive solution of individual, family, community and area problems. 3. Extend and make possible realistic coordination; cooperative team work; integration of agencies, citizens and available service workers serving the neighborhoods and area. 4. Develop and expand the utilization of residents as paid ~emi-profes- sionals, work-study, and VISTA programs, etc., to provide needed service in the area. 5. Encourage local residents to seek solutions to their own problems through participation in planning and the operation of ASCs. 6. Develop program proposals to meet the problems and needs within their 1 tspective areas following the study and identification of the social, cultural physical and economic problems of the area. (pg. 84-Budget Proposal) The following report, taken directly from the 1967-68 Budget Proposals of the EOC, written by the Directors of the various areas) has been. compiled by this office in order for us to look at the EOO program as it is implemented in Sunny- vale. It includes the complete Budget Proposal, outline of 1066-67 programs, pro- posed programs for the coming year, justifications of budget increases, numbers served, enumeration of "in-kind" contributions to Area #7. Also included is a synopsis of other area programs so you may have a basis for comparison. (We. ask that you consider this a working copy since our typing puts it in the "worked- over' category.) It is our interest and concern for the War on Poverty which prompts this report. We w-ant to see it change society through opening doors for low income citizens and through training the. unskilled so they can open. their own dOors. In order to do this', the cooperation and confidence of the whole community is necessary. Constant evaluation of programs, expenditures, policy decisions is needed in order for the public to. have that confidence. It is our money and our `War"! If we think it is accomplishing something, we should offer our time and money to assist. If we think it i~ not accomplishing the goal, we should say so. This is citizen participation program and afl economic groups areinciuded. Mrs. RUTH ANDERSEN, Ewecu.tive Director, sunnyvale Comniunity Council. By action of February 13 1967 Comparative data on area service centers in Santa Clara County Budget . Central ~ ASC No. 1 ASC No. 3 ASC No. 5 ASC No. 8 ASC No. 7 ASC No. 9 Personnel Consultant/contract expires... - - Travel Spacecosts Consumable supplies Equipment Other $212, 286 24, 500 3, 600 5,550 7,880 7,062 19, 200 $57, 139 . . 0 2,918 4,320 2, 736 1,282 5, 011 $73, 765 . 0 . 2, 100 9,255 1, 375 800 3, 538 $75, 953 0 2, 520 4,200 2 035 2,000 . 2, 520 $52, 858 1, 500 2,400 ` 6,980 2,450 2,373 2, 373 $56,451 0 11, 648 `: 4;620 750 1,800 2, 875 $64, 642 571 1,960 ` 4,050 . . 1,000 700 2, 000 . . BOC executive director - ASC No. 1 director ASC No. 2 director ASC No. 3 director ASC No. 4 director AS C No. 5 director - ASC No. 6 director ASC No. 7 director ASC No. 8 director ASC No. 9 director . Director's salary $15, 000 12, 144 11,748 12,336 10,439 11, 058. 11,564 10, 614 11, 196 10,152 . Number of specialists . *.. (1) . 2 1 3 . 2 . - 3 2 . 2 2 2 . Clerical . (1) 1 junior stenographer. 1 senior stenographer. . Do. ... . . Do. ... 1: secretary. 1 stenographer-typist-clerk. 13/s clerk-typist. 1 stenographer. Do. .. - I Not listed. PAGENO="0752" 1590 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Number in program Area service center No. 1: 30 1,200 15 225 10 13 familieS 764 contacted, 661 served 300 referralS 15 families 314 12 Area service center No. 3: 1,416 1,000 (approXimatelY)---- 60 200 120 per month 150 per month 50 to 60 per month U - Area service center No. 4 (program started In October): 57 - 110 400 105 intervieWs 38 placementS 37 31 65 13 56 300 Preschool comp. education Summer Headstart Out-of-school NYC Fix-it, fix-up projects Nelson amendment Self-help housing CSO credit union California Rural Legal Assistance- Home economics class Day care center Familylifeeducation Information and referral Community groups Welfare rightc Neighborhood councils Transportation Social activities Redevelopment of Mayfair Direct services/I & R Job development program Welfare rights Community mental health program_ Placement referrals for San Jose City housing. County housing authority 4 neighborhood councils Self-help workshop Nelson amendment Leadership in establishing child care centers. Several study halls Several work study students Informal program to combat teenage illegitimacy. Consumer education: Buyers' club Credit union - Classes - Housing Direct services Telephone referrals Job Interviews Clothing and food Home furnishing. Referred to PREP Nelson amendment Interpreters Christmas Gilroy Schools. Do. NYC. Santa Clara County. CSO. Legal aid. VISTA. City of San Jose and Santa Clara County. Schools in area. Central EOC. County welfare department. California Mental Health Associa- tion. San Jose Housing Authority. Other county groups. Santa Clara County. Central BOC. Schools and churches. San Jose State. 080. 050. PREP. Santa Clara County. Area ~ Total budget Local share Federal share Central administration VISTA Program development Manpower develoPment~- ASCN0.1 ASCN0.3 ASCNo.4 ASC No.5 ASC No.6 ASC No.7 ASCN0.8 ASCN0.9 New careers Citizenshiptraifliflg andnaturaUzatlon service $263 278 13,224 32 959 20, 962 73,406 67,888 90, 833 80,487 89,228 75,961 78, 144 71, 521 74,923 284, 549 42,437 $231,072 12 401 15,003 17, 790 13,800 17,709 24,380 18,486 24,401 19,375 36, 500 8,280 $221 935 13,224 32,959 20,962 61,005 52,885 73,043 69, 687 71,519 51, 581 59, 658 47,120 55, 548 248,049 34,157 Comparative program data and people served in other service centers [Taken from budget proposals for 1967-68j Program In cooperation with- PAGENO="0753" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1591 Area service center No. 5: 450 to 500 500 70 120 50 75 1,000 30 per month 200 250 to 300 per month 50 75 350 to 400 per month Planned Area service center No. 8: l5perweek - 320 - l6perweek - 37 asked 21 referred 14 dropouts 29 in school 5 - 200 per day Planned Area service center No. 9: 2,478 314 53 237 46 85 96 Planned Farm-labor placement Summer trips Day care center English classes Driver's education Sewing classes Self-help tool project Rent subsidy program referrals Thrift shop Library Home economics classes VISTA - NYC Tutoring Headstart Information and referral Welding and job training Medical clinic_~ - Operation Community Concern - -- Library study center Women's club Health clinic survey Information and referral Job development NYC - Nelson amendment Summer recreation Demonstration cities program Self-help housing Child care center Election of poverty representatives~ Job development Legal aid (intake-ref) 1. & R. and transporting Preschool - Rehire retired resources 2 volunteer exchange programs Tutoring Co-op housing 2 more volunteer exchanges_ Volunteer community organizers Church groups to assist elderly Public relations and public informa- tion. Teaching English to Spanish speak- ing. Farm labor bureau. San Jose Recreation Department. Viking Sewing Center. San Jose Housing Authority. Bellarmine College. San Jose City College. City of Santa Clara. EXHIBIT A The major goals of the program have~ been to fulfill priority needs of low- income residents Of the Sunnyval&Santa Clara area, or Area 7 of the Santa Clara E~C operation, which is composed of 20 census tracts. Its boundaries are Bayshore Freeway to the north, Fremont and Stevens Freeway to the south, Highway 17 to the east, and Stevens freeway to the west Ethnic Composition: There is a total of 115,273 in this area,. with 13,411 or 11.6% being of Spanish Surname and 2,562 or 2.3% being non-white. Income: A `total of 29,079 families reside in the area, and Of these 3,426 or 11.7% had an income of $4,000 or less. Age Distribution: Of the total population, 47,631 or 41.3 percent were 18 years of age and under, and 4,838 or 4.1% were 65 years of age and over. Employment: The total Male Labor Force is 28,280 with 1131 or 3.9% unem- ployed. Of the 27,149 employed 7,710 or 28.3% are unskilled. The total Female Labor Force is 4,184 with 1,219 or 8.5% unemployed. Of the 12,950 employed, 4,184 or 32.3% are unskilled. Education Attainment: Of the 57,709 persons who are 25years of age and over, 13,883 or 24.0% have completed 8 years of schooling or less. Of the persons who are of Spanish surname and 25 years of age and over (5,583), 3,171 or 56.1% have completed 8 years of schooling or less. 80-084-67-pt. 2-48 Comparative program data and people served in other service centers-Continued Number in program Program In cooperation v~ ith- NYC. Santa Clara County. U.S. Government. Palo Alto schools. PAGENO="0754" 1592 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 Housing: There are 33,984 housing units in this area, and of these 1,~O3 or 4.7% are classified as deteriorated or dilapidated. Headquarters for the Area Service Center 7 is currently located at 2470 El Camino Real, Santa Clara in a location nearest the Sunnyvale-Santa Clara border and in the center or middle line of both cities, thus easily accessible to both areas. The building houses all staff and personnel, plus an extra office for publication of all office memos and duplications. In addition, we're now using a building donated by the Santa Clara Chamber of Commerce for use as a training center at 1425 Lafayette St., Santa Clara. It is in an easy-to-reach location, but somewhat difficult for those in Sunnyvale with-out transportation. Both buildings are equipped with phones-the main office haviiig three lines for in-coming and out-going calls. The following material describes the program which are already incorporated, endorsed and approved by the Area Board and the Economic Opportunity Com- mission to meet some of the needs of the low-income residents of Area 7. SECRETARIAL TRAINING Class seeks to train or equip women with the skills necessary to obtain jobs as secretaries or office aids and clerks. Since this is a wide open field with an unend- ing demand, and many women are aware of this fact, but financially unable to at- tend the various Secretarial Schools, we have tried to duplicate the training, but without cost. With the help of experienced volunteers, the class teaches grooming habits, poise, personality, mechanics of office work-proper work attitude, handling peo- ple who enter the office in various situations, proper telephone usage, filing sys- tems, typing, proper English usage, spelling, Business English terminology, and business forms. Termination of program depends on student's own rate of progress, efficiency and readiness. Thus the student is not compelled to learn everything or nothing in six weeks or less. Upon termination, or that time. which we felt students were ready for employment, we would place themin the ASO office to work one week doing work as it would be performed in an actual paying situation. Meanwhile, every attempt would be made to place them on a job. The center is currently renting typewriters from Santa Clara County. Business Schools as well as one of our area high schools have donated manuals to assist instructors with the classes. Response has not been as favorable as expected, mainly because relatively few people know of its availability, due to its newness. Nonetheless, eight students havO already begun classes on a regular basis, and report enthusastic participation and added knowledge. The center feels that it is a very worthwhile. program and with adequate pro- motion may become exceedingly successful. SEWING CLASSES FOR woMEN Classes designed to be a source of dun-due to the relaxing recreational nature of the. activity. Secondly, asa source of pride-the feeling acquired from having accomplished something by one's own initative, ability and efforts. Thirdly, and probably most important to many of the women involved, the necessity of a mother with several children to be economical in the selection and purchasing of wearing apparel for her family. . .` . ;. . . Several sewing machines were obtained from private residents as well as from one of the local SOwing Centers. Several manufacturers or companies have do~ nated short ends of material for practice work in the class~ Classes, under the supervision of three volunteer teachers, are now offered at three. separate. times during the week. and 25 women of low-income families arO presently. enrolled, with an expected increaseafter the first of the year. . . . . Favorable response and continuous attendance by . the same women indicate that they are satisfied and in need Of the program, and thus, we feel, it has been quite successfuL . In the coming year, we hope to be able to open a childcar center, so that more women will be liberated to attend classes. . . PAGENO="0755" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1593 TUTORING PROGRAM To help an adult to improve his English so that he can find a job; to encourage a child to practice his school lessons so that he will finish high school. There are many adult men in Santa Clara County who are skilled enough to work but do not speak English well enough to be hired. There are a surpri~ing1y large nume~br of jobs waiting to `be filled by qualified men in this area, but they require English-speaking men. One goal of the `tutorial is to help a man to improve his poor mastery of English, or to help a child tO want to do his work, to encourage him and to show him the horizons that ~ ill open to him if he tries * No knowledge of Spanish is necessary. In fact, volunteers who can converse in SVanish may do their students a disservice by not forcing them to use English. Students are given individual assistance and currently fifteen are receiving benefits from such aid Se~ eral mdthers have signed their children up and anxi ously. await the flr~t tutoring session. Grades of the children involved are re- portedly improving and show signs of increased interest in the classroom. MEDI CHECK To diagnose disease and refer to pradticing doctors. Because poverty in thi's county is ndt localized but ~s spread widely, it is not possible to bring doctors to the poor; the poor must go `to the doctors. But on their own they do not go, whether from `fear or ignorance. If encouraged and told `the significance of disease and made to understand that their cost will be small if any and further convi'iced that they won t be hurt they 11 go Medi-Oheck employs medical students who will give an hour or two a week in poor neighborhoods and labor camps, talking to the parents and children `and recommending further care by a physician when appropriate. Several recipients have profited from this program a't t'he rate of' four per week. Thus it is one we hope to expand in the next fiscal year. Addltionkl funds are needed to offer transportation to those who need `it to get to the clinic doctoi s office oi hospital DRIVERS EDUCATION This program was primarily aimed at the large segment Of women who could obtain employment if they, had access ` to transportation, ie, many had trans- portatioa available, but did not know how to drive themselves, and thus still had `a problem. The training i's done by volunteers, bkt insurance difficulties as well as the lack of a car for training, in some in~tances, have lowered the actual participation number. However, five are n'ow being given private instruction, with a waiting list of thirty~seven. AUTO MECHANIC SHOP A session designed to equip the untrained and unskilled man with the art of automobile repair, so that he can do mechanic's work, for which there is a demand, as well as keep his own car in operation, and thus' be' able to maintain a job. The program has enrolled sixteen regular students with many more waiting to sign up. Several have been placed as Service Station Attendents as a result of the training. Although the class is being taught by volunteers, we're having a very hard time getting volunteers and instructors who have on-the-job experience. We have gone through four instructors in six or seven weeks'. We aLso desperately need facilities to teach the courses in, such as, abandoned service stations. We are able to place any men we can train. But without funding to pay instructors and obtaining adequate facilities, we cannot get adequate training to the class. EMPLOYMENT This is still the majOr problem encountered in the Area 7 office, since the large majority comes for reasons that pertain to jobs. We have thus sponsored job counseling which aids on the average of fifty people or more per month. In PAGENO="0756" 1594 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 addition, fifteen or more per month are placed on jobs within the area. We've also succeeded in placing approximately seven per month in On-the-Job-Training. The large flow increases and it will definitely be necessary to continue the pro- grain into the next year. BUTCHERING COOPERATIVE This program is operated primarily out of the migrant labor camps located in our area where the residents have a real need for meat during the winter rains when there are no crops to pick. Members of the cooperative pool their money together and then board the Service Center bus for a trip to the livestock auction in Hayward, California. The participants are then taught how to bid on livestock. Once purchased, the livestock is placed on the bus and brought to a ranch in San Jose where it is slaughtered by the participants of the Coop with guidance provided by a pro- fessional butcher who volunteers his time. The meat is then inspected by a licensed government meat inspector and placed in freezers donated by the Sunnyvale Freezer Company to be drawn out during the coming weeks by the Coop members. In later trips the Coop participants must do their own bidding and the only assistance provided by the Service Center is transporting the larger animals and providing what technical assistance is needed in the slaughtering. RECREATION PROGRAM Our recreation program involves nearly 500 children living in Sunnyvale and Santa Clara. It is operated entirely by volunteers and the parents of the chil- dren involved in the program. Through the help of all involved, the children are able to raise enough money to purchase an old school bus in which they take many trips to places that they have never seen before. Their mothers help prepare lunches and snacks and often both mothers and fathers accompany their cliii- dren on the longer outings. The Recreation Program has a goal of helping each child learn what he can accomplish on his own if he will try. The children also learn what they can accomplish as a group working together such as selling old clothes they have collected at a flea market to earn enough money to buy a can of anti-freeze for the bus and tire chains so that they can go through the snow. In this program we have gained the greatest community support as is evidenced by many of the exhibits in our packet such as food from local businessmen, swim- ming facilities and volunteers who serve as recreation leaders. PAGENO="0757" ECONOMIC OPPORTuNITY ACT AMENDMENTS OF 1967 1595 Office of Economic Opp0110nity FOlIO APPOOVEO. APPLICATION FOR COMMUNITY ACTION PROGRAM ~ QUREAU 010. 110-ROll CAP 7. COMPONENT PROJECTs CONDUCT AND ADMINISTRATION T/uo loom is to b~ cord to opply foo o ~en4syi o~d Admj,sjo104Iio?I ooes soda Spa/c,, 205 of T/tip 11-4 Ecceomo OppeoIA?IiIy Aol of 1061. `OCOFOPPLICAGTAGENCY Economic OpporEunlt~CooP~kNT PROJECT NO. 00007 FILL IN (1o,Admisi.potiot 1/,.) Co'~iiss1c,ri of Santa Clara County, Inc. 7. 1G S~r.tci Clara-Sunnyvale Area Service Center 117 Xulti-purpoae service center located cit the grass roots level to work together with the low income persons to meet the needs of the poor. ~/~eoeePo0GnAu Auco/s0 do~ccpI1o. of 01. mA pon~oon 10, tIle cnolpcn,.Spoc/eco, follo.cogol. ~ fco.soI. * co,k p,ngonos A, CAP GUIDE. 000 050 TYPE 00000lOM 0. lecnl&e,, Ic/IS/s, 0, Pooc'oonoy cfs0. poop1, Sc bo ,pm,d dluooiy by s/si, oonpn.pns pm/oct ceA 0. typ. of pn516o1.cn to be eosN,d (p,e-:olInnl, og,d. fANili,o cit/s chilèps,, tsr.) Santa Clara-Sunnyvale, migrant farm workers, urban unskilled & semi~skil1ed, preschool, aged, teenagers, low-income families, children, in-school & out of school youth. 7.l.SPOPLILOTI001 TO RE SERVED Ho, nosy p.opl, dli 0. ,,pc,d dioocoly by iSIs oocpcn.no pmjeu? Hoc I~ny of s/sn,, os, pcool - 115,273 3,580 families Th0 follcolng iofoonottien Is cOo pmoidod If ooy post of A/s oonpcn,,,o p~oja~ is sob. oon'i,d cs~ by en og,ooy TYPE OF AGENCY I. 1, d,I.00I, oop,uy o (dod, sop): ci PUBLIC AGENCY i:i PRIVATE NONPROFIT ORGANIZATION jJ INSTITUTION lF lIONEl EDUCATION :JoTIIER(Spoo~fy) 7.2.. SCOPE OF DELEGATIoN A,,40I, .totnopst dpoop/bing: T1~ dngopo of seopnnssblissy slot 1., d,Ipgot, ogp~cy so/il loop Is ooosying psi tIp oomponpn, pmJeot. U. TIp qcoIIfIoosIc,. of s/so d,lpgos, ogpnoy Sc cndps,U, sod 0000PIPI. lIP POR~ON,Nt pPEjodt. TA7 OO~ IN cOscA oh, eppl/po~s eg000y to/li osppso/o, nod/o~ poemI/no~, i/so oct/o/s/st cf/so d,l,gn~, ogsocy. 7.2.2 ASSURANCE OF COMPLIANCE ON CIVIL RIGOTS .Ao~oyh * folly .oootopd sopy oft/so Cj0il R/g/si, .4:.opoepe Fop,,, foy ,oc/s d,Ipgoa.g,Npy. Ho, ISIs OONpIlltOntpln/o05, 55 5000105lIolly Itt poonot /OON, oa' I nto the RU/sItES ofo p,sosco. oppl/ootlp* Joy F,S,ptl finosciiS .s,/ss,so,? EJYES 000 liEs:", 00000ss,oploNotopy,o5s,,,,,,o. 7.0 GU000T COST CATEGORY I. PERSONNEL ESTIMATED COOT $ 56,451. 7.4.1 lODGE? DETAIL Aio~p1 OI0100I.Nt p/eMg 1, boo/s fop 500I",sIiSIg tAP poet ~ CU/DC. P/soon Pe3R,RiP~t, 5/st Pest tool. Oct10, ,Ao,ld be s/snot o~ CAP Fo~e 23 (U.d,.t fop Coop.,.,, Poe/to:). 2. CONSULTANTs AND CONTRACT SERVICES - 3. TRAVEL. A, SPACE COSTS AND RENTALS ? 4,620. N. CONSUMABLE SUPPLIeS 750, . N. RENTAL. LEASE, OR PURCOASE OF EQUIPMEN'r 1 ,800. 7.4.2 PERIOD OF ORANT Hco loop c//l s/si, :°~;:~~ ~ May 1, 1967 - April 30, 1968 N. 071IERCOSTS TOTAL ESTIMATED COST OP PROJECT 78 144. NOR-FEDERAL COP4TRIDUTIOR 18 486. ROUSER OF MONTRO 12 FEDERAL GRAOITREQUEDTEDIJNDE* TITLE l.A 59,658. CAP FORM 7 JAN CD PAGENO="0758" 1596 ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 or'~cL or cCo~ soc oee0000vTy (FOR OFO USE) CGMM'JPIITY ACTION PROGRAM *p~ c so uoso~~~~1 ILIJRO 6~'~ RQ. 116(519.2 C3MPO~1ENT BUDGET App~mml 9~PI'9~ /U~( ST 1967 OFARANTEE Economic Opportunity P~j,u,., ~ 00651 00. ~6OURUM TEaR ACT. SO. Commission of Santa Clara County, Inc. CG- of Economic Opportunity Area Service Center #7 (FOR APPLICANT USE) (FOR OEO USE) COST CATEGORY PRETIORSLY*P.J EXPENIICO.. REQUEST 161$ APPROVtO $1 TOTAl. ,E6_l.~OSTH~Ll..YR.6ñ ACTION ~ L PRPYR:EvO~ RS050EI. 9 37,477 6 6,397 S 56,451. S S COlTflACT~ERV~CES .f5. 300 -0- 3.1061(1. 1,000 440 11,648 RENTALS 3,000 764' 4,620 5.COSS0068LE SUPPLIES 1,375 528 750 PonCHO SE OF EOUIPMRRT 800 `232 1 ,800 I 7. OTCEE COSTS 1,500 250 2,875 TOTAI.COSTOFCOc.'ONEP4T 45,152 8,911 78,144 FEDERAL SHARE 2,682 -- 18,486 FEDERAL SHARA 42,470 8,911 C1.ROR.. in 61. ~ bo~5.' RR~ b~ `..d. ~OIy IR.000IdRR,. nlth A. np, 59,658 ol,I.~. p~..I,I,n. .6k. CAP GUIDE. This component exceeds non-federal shore, limits of 20Z. PAGENO="0759" ECONOMIC OPPORTUNITY ACT AMENDMENTS OF 1967 1597 Of fit, of E oeomic Opptonity APPLICATION FOR COMMUNITY ACTION PROGRAM BUDGET FOR COMPONENT PROJECT Ti0., (II 0 e~eopsoy posh ceespooeos pee/pot fm-o (CAP 6, CAP 7, es C4P 8)i~ epplyiog fel geoos oodoe Secsle,se 204 205, 206 of Tsgls 11.4, Eeeoomte Oppeessotszy Aet of 1964. Appl1ee0te ooe,sestp qoieed to see this feees .- they mop tstbstitote a typed bstdget o'hie~ he iofetsIIOIIO,, is the coop cede, as so the foos. 8001 01 APPLICANT DO NOT FILL IN; (Fee Ad~j,i,p,~sj0, U,,) Economic Opportunity Commission of Santa Clara Courcy, Inc. Area Service Center 117 7-1-C 8.1.0 PERSONNEL 8.1.1 PERSONNEL EMPLOYED BY APPLICANT AGENCY PERSONS POSITION OH TITLE MONTH PR~ECT EMPLOYED COST I_ ~i~ç~py_ I j7jrc.ctor_ ~ ~ ~8(L6__. 11 1 1 6~6s_ " ` " " 1 .._....i. 69~ ~ 6~4_ L~1I 667 L [ I Community Aides 408L f. ~i~B2~ 12 COST OF FRINGE BENEFITS (b,dipst, M,it fee ttIie,sIpJ SUB.TOTAL' PERSONNEL EMPLOYED BY APPLICANT AGENCY 5 8.1.2 PERSONNEL EMPLOYED ST DELEGATE AGENCYOES) ~F PERSONS POSITION OR TITLE ~EN MONTH OF TIME. PROJECT TA ME EMPLOYED COST COST OP PRINCE BENEFITS (lediesgp basis foe esIileIo1e) 580.TOTAL, PERSONNEL EMPLOYED BY DELEGATE AGENCY(IES) S TOTAL, PERSOI