ago. The leading paper of our State, which is not his city, had a lengthy editorial the other day basically suggesting in the last paragraph that if the rest of the country and the rest of the cities and the state had Mayor Ganim, then we'd begin to start turning the corner.

So we're very, very proud of this mayor. He's a new, young mayor. But he's already taken on some very tough issues and worked on them aggressively.

Henry Gonzalez had a hearing in Bridgeport the other day, Mr. Chairman, on his field hearings, which attracted some attention and put some positive light on some things we're trying to do.

So I'm anxious to hear our witnesses this morning. Of course, Mayor Schmoke, you're well known to all of us, and as Senator Sarbanes has said, and said rightly, one of the great mayors of this country, and we're pleased to have you with us.

Mayor Rubach, we're pleased to have you with us as well. It's a good idea to get-this isn't just a Northeastern problem.

We have a tendency I think in this country to think of this as somehow an eastern phenomenon. But obviously, what's going on in cities in our part of the country, Senator Sarbanes and I, is certainly just as true-and clearly, the Chairman of the committee, the Ranking Minority Member I think would tell you the same.

This is a national problem in scope. I found it tragic. Other than the mandate issue which the President talked about the other night, and some urban commission, which I saw as sort of a sop, in a way, to sort of disregard almost entirely the problem of our urban areas in this country, is stunning.

And Senator Sarbanes, I'd say last, is just a 1000 percent correct. First of all, it's costing us. There's a cost associated because of what we're not doing. When you have a 60 to 65 percent drop-out rate of high school in your urban areas, and less than 1 percent of the jobs in this country are going to be available to people with less than a high school diploma, that isn't just costing cities; that's costing us all. That's going to cost every single one of us in this country.

Only 20 percent of the jobs in this country will be available to kids with just a high school diploma in the next 3 years.

So when people say that's their problem, not our problem, you've got to be kidding if you believe that. And you can talk about health and housing and unemployment rates and extended benefits and so forth, you've got to believe that this already is costing a great deal.

So I'm very hopeful that this year the President, albeit an election year and I know the Majority Leader and others are working on some ideas as well, as I said this morning when I proposed this Distressed Cities bill, there's no pride of authorship in this. It's an idea and we hope it generates some activity and interest among others to see if we can't come forward and play an intelligent, constructive role in trying to see to it that a major part of this country's economic wealth and well-being will be addressed as we talk about the agenda of this Nation for the rest of this decade and beyond.

Thank you, Mr. Chairman.

The CHAIRMAN. Thank you very much.
Senator Kerry?

OPENING STATEMENT OF SENATOR JOHN F. KERRY

Senator KERRY. Mr. Chairman, thank you.

I'd like to first of all join my colleagues in welcoming each of you mayors who are here and say that, Mr. Chairman and Senator Šarbanes, I congratulate you for putting the urban affairs part of this committee back at center stage.

We've been spending an extraordinary amount of time on the banking issues because we've had to. But I frankly believe there is no more important hearing taking place in Washington today and there isn't a more important hearing that could be taking place than this.

I regret that not more of our colleagues are here at this moment, though the schedule here is always tough and many may come yet. The reason I want to take a moment just to say a few words is that I don't want to leave a vacant chair and not have you believe that there is an understanding here of why you've come.

I, unfortunately, have legislation on the floor. Debate begins at 11:00, and so I have to not stay for the testimony.

But I'm going to read every word of it and I already have listened and read much of what is being said around the country, and I couldn't agree more with my colleagues.

We have been lucky to date, lucky that we haven't had explosions in many of the cities of this country. And that luck may not hold out for much longer with the job outlook what it is and the paucity of programs that exist, and the reductions that are on the table.

And frankly, it is because of the extraordinary effort of mayors like you and mayors like our mayor in Boston, Ray Flynn, and others that I know in Massachusetts and elsewhere, who spend an extraordinary amount of time going out in the streets, in touch with the neighborhoods, holding out goodwill and the promise of something to come as a means of dealing with the dashed aspirations that people are increasingly feeling.

I'll tell you, you can only hold out goodwill for so long.

I cut my teeth in politics in the 1960's and can remember well what it was like in a lot of the cities of this country. Fires burning, stores looted, people being killed, more so than even today for moments of that explosion.

There is no reason except for the good effort of people that that shouldn't find as much rationale to occur today as it did then.

I believe the cities of this country are a ticking time bomb because of the neglect of the Federal Government and the pressures that are being forced onto all of you as a consequence of State spending choices and the diminishing tax base in each and every one of those cities.

I think much of it has to do with unresolved issues of race in this country, something that politicians have a lot of difficulty dealing with on the table in a straight forward fashion.

If you're a young black in the United States of America, a young black man, you have a greater chance of being killed in the inner cities of America today than you did in any war the United States has ever fought.

That's a disgrace.

Pat Moynihan was villified 25 years ago for raising the issue of what was happening in the inner cities with the question of kids born to single parents. It was 25 percent then and Pat Moynihan dared to predict chaos.

It is 63 percent today. And there is chaos.

And it's no wonder that people stop and are suddenly concerned about prisons that are filled with people of color, and schools that aren't educating.

A couple of weeks ago, during the break, I went to the Jeremiah Year Burke School in Boston, an inner-city school, 750 kids, not a white face among them that I saw.

One guidance counselor for 750 kids, no librarian, 40 kids in the classes, not enough books to go around, and one reference encyclopedia with a 1978 date on it.

And we wonder why it is that we have a problem in this country. We've got 30,000 kids in gangs in Los Angeles. I don't know how many there are in New York or in Boston, but there are too many. And what do we do? We close the centers. We don't keep the kids' schools open in the evenings. We don't offer them outlets. We cut the boys and girls teen centers. We cut the sports programs. We're cutting our throats in the process.

This is the most ignorant, incredibly short-sighted, myopic, almost blind, governing process that I've ever seen, and I don't want to be part of it in that regard.

And it is time for this committee and for this Congress to face up to its responsibilities. Unless we invest in those cities, unless we provide the incentives for people to look-you know, all the years of the great growth of the 1980's, did any of it really transfer to the inner cities? No. It was sucked out of the inner cities. And all the programs that were there were sucked away.

So I'm not here to testify, but I'm just so frustrated and angry about the lack of response. Not one word in the President's State of the Union Message about poor people, except to villify those on welfare. The average dependency on welfare is 2 years, not a lifetime. But we're willing to scapegoat that, too.

Not a word about the cities in that speech. But a lot about the people who have got a piece of the chunk.

So we'd better get about the business here of doing what Senator Sarbanes has talked about, what Senator Dodd has talked about, and what I know Senator Riegle cares about. We've got to make choices.

And as Pete Peterson, a Republican, said in the Atlantic Monthly about 5 years ago, for the last 7 years, America has opted for or acquiesced in the greatest period of future averting choices in the history of this country, the full consequences of which we don't even know yet.

Well, I respectfully submit, we're inheriting those consequences right now, every day. And unless we get an urban policy back in place with the UDAG's and the CDAG's and the kinds of Federal partnership necessary, we will never address the issue of the diminishing tax base.

So I welcome your testimony today, Mr. Chairman, I welcome this hearing, and I hope, for one, that it's going to produce an effort to defuse that ticking time bomb.

The CHAIRMAN. Senator Kerry, let me just say, I've heard a lot of comments made in the 25 years I've served in the Congress. I've heard few as important and as powerful as the one you just made. I want to associate myself with it. I want to thank you for making it. And I want to just make a pledge to you from myself and on behalf of the committee that we're going to plow ahead in this area to lay out some designs and some ideas and a sense of direction for the country while we still have a chance to do it.

Mr. Schmoke, we're going to call on you first. You're here representing the U.S. Conference of Mayors, and serve, of course, as the mayor of the city of Baltimore.

As Senator Sarbanes has pointed out, you just were re-elected by a very substantial margin in that city. We'd be very pleased to hear from you now.

STATEMENT OF KURT SCHMOKE, MAYOR, BALTIMORE, MARYLAND REPRESENTING THE UNITED STATES CONFERENCE OF MAYORS

Mr. SCHMOKE. Thank you, Mr. Chairman.

Mr. Chairman, members of the committee, I want to thank you for inviting me to today's hearings.

I'm here to be partisan about only one thing-that's America's cities. As such, I am submitting for the record a statement of the U.S. Conference of Mayors that responds to the State of the Union Message President Bush gave Tuesday night.

I endorse the Conference statement and I hope that you will act quickly on the jobs and anti-recessionary initiatives it supports. Let me briefly summarize..

The conference has submitted and you have in your record a seven-point plan, an anti-recessionary plan that amounts to approximately $35 billion. The seven points are focused primarily on the word "jobs."

Our parents raised us not to use too many four-letter words, but this is one four-letter word that we want to emphasize over and over and over again-jobs.

The anti-recessionary package, as I said, contains seven points-a targeted fiscal assistance program which is essentially a successor to the revenue sharing program that we've heard you comment so favorably on.

A $5 billion public works program for urban and suburban projects that are ready to go. We've taken a survey of our cities and our metropolitan areas and know that we have a backlog of public works projects ready to go. We simply need the investment. An increase in the Community Development Block Grant program.

An increase in the transportation program, which I believe Mayor Rubach will comment on.

A Job Training Partnership Act increase.

Low interest small business loans.

And an extension of the Home Program and a waiver of the local match which Congress approved for this year.

We mayors have supported this unanimously, Republican and Democrat, and we urge action upon it.

In addition to the statement that I've submitted for the Conference of Mayors, I have a few additional remarks I'd like to make on behalf of millions of people living in the cities.

To paraphrase a well-known line from Shakespeare

I've not come to praise or bury the State of the Union speech, but to point out that it is simply not up to the task of turning around Baltimore or America's other major cities.

I'm not opposed to increased child exemptions or investment allowances for businesses or help for first time homebuyers. These will aid short- and long-term growth.

But in Baltimore, much of our population can't afford to buy a house or are too poor to pay taxes. So these measures will have little impact on them.

What will have an impact are jobs, houses and a sense of hope. And until these needs are met, the economic plight of cities which has reached Depression level proportions, will not change very much.

Now I know that some will respond with technical arguments about why cities are not in a depression. But I'm not here as an economist, with a lot of charts and graphs and a suitcase full of statistics.

I'm here to invite you to look with your own eyes at the condition of America's cities and to ask yourselves whether you've seen anything quite like this since the 1930's.

Millions of homeless people living in the shadows of vacant houses. Two straight years of record violence. Schools, as has been mentioned, that are so underfunded, that urban children receive a demonstrably inferior education.

Increased use of cocaine and heroin. Tens of thousands of workers laid off. Salaries frozen. Basic public services in jeopardy.

And perhaps the most telling sign of all-untold numbers of working people fearful of losing their jobs.

This may not be the state of the union, but it is the state of cities and it's undermining the union.

That's why I've said, and will say again, that investing in the cities is in the national security interest of the United States.

It's time, Mr. Chairman, for us to go back to the future and formulate domestic policies using principles that are now over 40 years old.

Remember, in the 1950's, an interstate highway system was viewed as a national defense network. President Eisenhower signed the National Defense Education Act to make sure that our young people were the best trained in the world.

Student loans and the GI Bill were similarly tied to economic and military preparedness.

We need to show the same kind of wisdom now. The biggest threat to America's security is not a foreign power, but the lack of a competitive work force. Hopelessness and economic desperation translate into violence.

Universities, transportation links, cultural institutions, communications systems, all predominate inner cities and all contribute significantly to our Nation's defense.