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of our Nation's inner cities, are to be terminated at the end of the fiscal

year 1973.

In a related area, not dealing with housing programs as such, but having a major effect on the cost of housing, is the action cutting back on the funds available to the Forest Service. These funds cover such areas as timber resource management, forest land management, forest protection and utilization, forest fire control, insect and disease control, and construction of timber harvesting roads and trails. The impoundment and cutback orders for this year involve between $10 and $50 million.

Almost $2 million a week being denied for these essential uses.

Lumber is the single most important product in home building today. It is also the only self-renewing natural resource used in construction. The home building industry is currently faced with the highest lumber prices in its history with no immediate prospect of a decline. This reduction of funds available to increase the productivity of our national forests can only add to the upward pressures on lumber prices.

Our industry shares the national concern over inflation and any weakening of our fiscal stability. As much as any industry, we have suffered from the effects of inflation and its usual accompaniment, high mortgage interests rates and tight money. We, therefore, fully support the President's goal to control inflation, and believe that fiscal restraint is necessary. However, if the efforts to control inflation call for a reduction in Federal spending, then such a reduction should be fairly and evenly spread throughout the Federal budget. These reductions should take into consideration high national priorities and should be undertaken in consultation with the Congress.

Housing should not bear a disproportionate share of these impoundments and cutbacks. We feel that the current moratoria are inequitable. Low and moderate income families are the ones least able to sustain a reduction in economic assistance-yet they are being asked to bear a major brunt of the current efforts.

We urge the Congress to reassert its role as the enacter and funder of Federal programs. It should also make clear to the administration that programs involving Federal assistance in areas recognized as essential to the continued well-being of the Nation not to 'be subject to abrupt and arbitrary termination or suspension.

Mr. Chairman, thank you for the opportunity to appear before you.

Senator Chiles. We thank you very much for appearing before us today and giving us that statement.

Senator Ervin.

Senator Ervix. Of course, any particular further program to be continued beyond this expiration date, or whether it should be funded beyond the end of the fiscal year, is a question for Congress to determine, I think--not for the President.

Now, these funds which were appropriated by Congress for carrying out the housing program were frozen--were appropriated for this current fiscal year, and frozen after the current fiscal year was started, and after many of the projects that were funded by them were begun; is that not true?

Mr. CENKER. Yes, In addition to that, Senator, there is a pipeline quality—there is leadtime, preparation time—and we feel that these have not been given sufficient weight. A lot of homebuilders are well along in their work, and suddenly find that there is no purpose in their work.

It boils down to this: Secretary Romney came to the homebuilders convention in January and made the announcement there, that, on January 5, it was over with as to the programs he was talking about. But he said the Government is going to keep its contracts. To us it appears it is not a question of honoring the contracts, it is also a question of whether the Government is going to keep its promise, because the departments which administer these programs have officials in communities throughout the land in contact with builders urging them to do certain things because of the long leadtime involved. To get ready to provide this housing—the active preparation-is a commitment on the part of the builders, and it is the responsibility of the Government to keep its promise, in addition to keeping its contracts in this area, sir.

Senator ERVIN. An impoundment and freezing of funds has a very disruptive effect on housing programs for the reasons you stated; is that not true?

Mr. CENKER. Extremely so. I would like to take the liberty, since our chairman is from Florida, and I know Senator Chiles would be interested in this.

I have a letter which the State Director of the Farmers Home Administration mailed to one of the builders on July 10, 1972, announcing that they had just completed a most successful year in the rural housing program in Florida and recited a list of loans and went on to say that plans have been made to more than double the production this year and estimated numbers of loans to accomplish this have been given to each county supervisor. We need and solicit your active support and cooperation in expansion of our rural housing program, and I would submit that on the letterhead of the U.S. Department of Agriculture over the signature of the State director, as far as I am concerned, that constitutes promise by that Governor who enters into a contract for land and commits himself to buying materials and sets in motion the long and costly process of producing these things, and then to announce on January 5 that that is over, this constitutes a disservice to the Nation and particularly to the businessmen involved.

Senator CHILEs. And actually one of our problems has been, has it not, that there wasn't any money available for loans in rural housing; that is exactly why Congress was trying to set up these funds because conventional funds would go out of corporate limits, so your savings and loan, your banks and other private funds will not loan in these areas?

Mr. CENKER. That is quite right.

Senator CHILES. Or if they do loan they loan to someone who has an awful lot of money or property, but not to someone who is trying to build a single family dwelling, or someone of lower income or modest means.

Mr. CENKER. A great deal, if not majority, of substandard housing of America has been in rural areas. The Congress, I believe, made this program possible to solve that very problem.

I live and work in Atlanta, Ga., and I don't do any work in the rural areas, but I was president of the State association in Georgia and got acquainted with the fellows around the State, and I can tell you they have found the program to be the kind of thing to help solve that housing problem in the rural areas. Now, they will be laid by and damaged and the program won't come back.

Senator CHILEs. Do you have any further questions?
Senator ERVIN. No questions.

Senator CHILES. We want to thank you very much for coming and staying with us to this late hour.

Senator ERVIN. We are sorry we detained you so late.

Senator CHILES. We will now recess our hearings to reconvene on Tuesday, February the 6th at 10 a.m.

(Whereupon, at 5 p.m., the joint hearing was recessed until Tuesday, February 6, 1973, at 10 a.m.)








Washington, D.C. The subcommittee met, pursuant to recess, at 9:30 a.m., in room 3302, Dirksen Senate Office Building, Senator Lawton Chiles presiding.

Present: Senators Chiles, Ervin, Muskie, and Percy.

Also present: Robert B. Smith, Jr., chief counsel and staff director, Committee on Government Operations; Rufus L. Edmisten, chief counsel and staff director; Prof. Arthur S. Miller and Prof. Philip B. Kurland, staff consultants; and George Patten, legislative assistant to Senator Chiles, chairman of the Ad Hoc Subcommittee on Impoundment of Funds.

Senator CHILES. We will reconvene our hearings, and we are delighted to have as our first witness the Honorable Robert C. Byrd, the distinguished Senator from West Virginia, who has long been concerned about not only impoundment, but congressional powers.


STATE OF WEST VIRGINIA Senator BYRD. Mr. Chairman, I am pleased to appear today to join in support of S. 373, introduced by Chairman Ervin and cosponsored by almost one-half of the Senate, myself included. I wholeheartedly subscribe to the vital principle which this legislation seeks to restore and preserve; namely, the constitutional power and authority of the Congress to determine in what amounts, and the purposes for which, the Nation's revenues will be spent.

We have today been brought face to face with what recent newspaper editorials and network commentators have called the constitutional collision of our generation” and “the constitutional crisis of the century.” It is a crisis that has crystalized quite abruptly as a result of certain impoundments of budget authority by President Nixon during the past few months, but it is a process that has been going on for years under various Presidents representing both political parties.

The distinguishing feature of the recent impoundments is in the fact that while some impoundments are legal and appropriate-for example, the withholding of current funds to protect against future deficiencies in programs-many of the recent impoundments have not


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