taking time from her work managing the city to be with us this afternoon.

Mr. Chairman, it is a tragedy that it has taken the deaths of 58 Americans in the streets of Los Angeles to restore the plight of our cities to its rightful place at the top of our Nation's agenda. For the past decade, attempts have been made to sweep our urban areas under the carpet. Regrettably, we are now paying the price for that neglect.

Our cities have become veritable prisons for the millions of Americans who live in them. They are trapped. Trapped by crime. Trapped by drugs. Trapped by poverty and hopelessness. And until we empower their residents, our cities will remain tinderboxes, liable to be set aflame with a single spark.

Clearly, we must do more than just pass a package of small business loans and FEMA disaster relief, because the problems of cities are not short-term problems. They are lasting, and tough, and unyielding.

We need a comprehensive strategy that includes job creation through Enterprise Zones. We need to empower families by expanding child care, overhauling our welfare system, and our health care system, and enacting stern measures against crime. We need to improve our system of education, and bolster job training efforts. None of that is possible, however, without a firm commitment on the part of both the President and Congress to address the problems in our Nation's cities.

Even as we speak, the Senate Foreign Relations Committee is holding a markup on a foreign aid package for the Commonwealth of Independent States. That package amounts to $5 billion, and it is a piece of legislation the President is anxious to see approved. I think we must help the former Soviet States move toward democracy and free markets. But something is dreadfully wrong with our priorities when empowerment of the Russian people has long been a paramount administration objective, while empowerment of Americans in our cities has sat on the back burner until Los Angeles burned.

Last year, I held a series of hearings in Connecticut on the problems of cities. I listened to experts and average citizens talk about the challenges faced by urban areas, and I examined the root causes of the decline.

As a result of that, on January 30, I introduced a distressed cities bill, S. 2170, which I hoped would serve as one key component of a broader effort to address the problems of our Nation's cities.

My bill would expand the Community Development Block Grant Program and target the additional aid to distressed urban areas, which could use it for a variety of community development efforts. In addition, it would put Congress on record that the cost of Federal mandates on cities should be borne by the Federal Government.

I hope that community development and Federal mandates are issues that we can address in the course of today's hearing. I also look forward to working with my colleagues on both sides of the aisle to pass needed legislation to deal with the problems of cities.

I know this effort will benefit from the comments of our distinguished panel, and I look forward to their insight and counsel.

Thank you.

The CHAIRMAN. Anyone else want to take a minute, before I call on Mayor Dinkins?

OPENING STATEMENT OF SENATOR ALAN CRANSTON Senator CRANSTON. I'd like to just speak very briefly, if I may, Don.

First a comment on the exchange between you and Senator Garn about military spending.

Whatever the virtues may have been of military spending that was very high in the 1980's, we plainly face a different situation now with a far lesser threat to our country, and yet we're continuing to expend huge sums, and that appears to be now in good part, not because of a military threat, but because of jobs. Because jobs will be lost if some program is cut, jobs will be kept or gotten if some program keeps going.

There are better ways to create jobs than by military spending. There are things that we can build that will be constructive in our cities and in our country, other than for purposes of military use. Let me simply also say, just very briefly, and I'd ask that my prepared remarks appear in the record.

The CHAIRMAN. Without objection.

Senator CRANSTON. We have a great opportunity in this committee. We need guidance from you mayors on how to proceed.

We're working right now on a housing bill, a new authorization of housing programs. I had a very good talk with Secretary Kemp yesterday, and I'm confident that we will have the cooperation of Secretary Kemp and, I trust, of the administration as a whole, in coming forward with a program that will deal with the tremendous housing needs of our cities and our people.

Your guidance on what you would like to see us do on that front would be very helpful to us. And thank you very much for your presence.

PREPARED STATEMENT OF SENATOR ALAN CRANSTON

Mr. Chairman, I commend you for holding these 2 days of hearings on the state of urban America in the aftermath of the Los Angeles riots.

Two months ago, Jim Rouse made the following statement to this committee:

Millions of Americans are being left behind, forgotten in the persistent spread of poverty and the physical and social deterioration that is moving through our cities and threatening our stability as a Nation.

These are the breeding grounds for a new America that we do not want to facean impoverished, suffering, hopeless, hostile people living in violence and in fear.

I have thought a lot about Jim's statement since the incidents in Los Angeles and about how long our Nation and its political leadership has neglected the pain and the suffering that has grown-almost exponentially-in our cities during the past decade.

We cannot say that the warning signals-particularly for the city of Los Angeles-were absent.

Four years ago Mayor Bradley appointed a Blue Ribbon Committee for Affordable Housing. The committee found that in L.A. alone: 35,000 persons are homeless on any given night, 30 percent of them families with children; 42,000 families live in garages; and more than 150,000 households pay over 50 percent of their income for rent-one paycheck away from homelessness.

Last September, the Fair Housing Congress of Southern California issued a jarring report entitled "Taking It To The Bank: Poverty, Race and Credit in Los Angeles." The conclusions were stark: About 94 percent of L.A.'s banks do not allow non-depositors to cash Government benefits checks; fewer than 50 percent offer low-cost checking accounts to the nonelderly poor; and banks and thrifts alike make fewer loans in African-American and Latino neighborhoods than in white neighborhoods in which residents have comparable incomes.

Simply put, financial institutions in L.A. do not provide adequate banking services, economic development lending or affordable housing financing for lower income and minority communities.

And, last, the 1990 census data shows the lack of educational and employment opportunities in the inner city. 40,000 teenagers in Los Angeles-20 percent of the city's 16- to 19-year-olds-are both out of school and unemployed.

There can be no doubt that the warning signals-unaffordable housing, homelessness, unemployment, pervasive discrimination and indifference-have been there in ample quantity.

Our response has been partial but inadequate. Two years ago, for example, Congress and the administration cooperated on major housing legislation that relies on community based initiatives rather than Federal bureaucrats to decide how to develop and preserve housing and rebuild neighborhoods. These initiatives make a difference. They are examples not of "failed policies" but of the best that Government and the private sector can do. Yet the programs in that bill-both administration and Congressional initiativeshave been woefully underfunded. And the President has called for further cuts.

That is why I am both dismayed and encouraged by what I have heard so far from the administration. I am concerned because we all know that, added together, the President's proposals on tenant ownership and Enterprise Zones do not constitute an urban agenda and, even if fully implemented, would not have prevented the L.A. situation. Los Angeles tried the home ownership experiment during the mid-1980's; they sold nine public housing units-only nineafter 4 years of efforts.

I am concerned because the President has ignored so much of our Federal efforts that more directly address the social and economic conditions fueling the anger and frustration in L.A..

Yet I am encouraged that at least some ameliorative actions are being considered and proposed. Yesterday, I had a very productive conversation with Housing Secretary Jack Kemp. He committed to working closely with the Banking Committee to markup a housing reauthorization bill by the deadline that I have established-next Thursday, May 21.

This bill will reauthorize and revise existing programs like HOME and HOPE and CDBG and will also add some exciting new initiatives to expand the supply of housing that is affordable to low-income Americans, increase enforcement of the Nation's fair

housing and fair lending laws and use housing development in our cities to generate jobs for low-income youth.

We, of course, must do more than just provide the framework for urban revitalization-we must increase Federal spending on those programs with proven track records that make a difference in communities. That will be the true measure of Federal will-whether the urban crisis is treated with the same degree of urgency and concern that has characterized other foreign and domestic crises in the past decade.

We have before us a distinguished group of mayors whose combined expertise in urban affairs and policies is unequaled. I hope to tap that expertise this afternoon to help us assess the President's proposals as well as other legislative initiatives now before the Congress. I look forward to all your testimony.

The CHAIRMAN. Thank you.

Any other Senator? Yes?

Senator KASSEBAUM. Mr. Chairman, I'd just say, I'm yielding my time, because I did come to hear the mayors.

The CHAIRMAN. Very good.

Senator Sarbanes?

OPENING STATEMENT OF SENATOR PAUL S. SARBANES Senator SARBANES. Mr. Chairman, I want to join you in welcoming this distinguished group of mayors. They're on the frontline, and we appreciate what they confront every day.

I simply want to say to them, as I think they well know, I've been with them in this effort from the very beginning.

On the first days of January of this year, Senator Sasser and I put forward a proposal that included, amongst other things—I'm just going to quote it very quickly because these things have a way of either they wear well or they don't, and I think this one is wearing well, frankly, in terms of addressing the needs.

A substantial emergency anti-recession package to State and local governments, designed to keep and create jobs and to prevent the destructive cuts in education, infrastructure, and public safety programs.

This package is needed more now than it was 4 or 5 months ago, and I think the events that have transpired in the interim have demonstrated the need.

The other is shifting substantial resources from the military budget to fund a Marshall Plan for America. This public investment would be directed at programs that expand our country's capacity to produce and compete in the future, including infrastructure, education, research and development, and worker training.

To accomplish this shift, we need to bring down the Budget Enforcement Act's walls which now protect defense spending and impede domestic investment. These walls stifle debate on new national priorities at a time when the international scene has been dramatically transformed, and a change of course in economic policy here at home is urgently needed.

The priorities encompassed within the walls were set 2 years ago. They were set in the fall of 1990, when the international environment was entirely different than it is today. And it just defies common sense not to revisit those priorities in the light of subsequent developments, to see in fact whether it isn't appropriate, de

sirable, necessary to do a reordering of our priorities to address some of the problems which I know the mayors are going to talk about here today, in light of the changed nature of our international security obligations.

The CHAIRMAN. Mayor Dinkins, thank you for being here today and representing America's largest city. We would like to hear from you now. Pull the mike nice and close so we can hear you.

STATEMENT OF DAVID DINKINS, MAYOR OF NEW YORK, NY Mayor DINKINS. Thank you, Mr. Chairman. I use the title both in reference to the Senate Banking Committee and the Senate Task Force on Community Revitalization which you chair. And I am privileged to be one of the members of the advisory group.

Senator Kassebaum, thank you for giving us more time. You are very kind.

My Senator, Al D'Amato, thank you for your support over time. I know that you recognize the importance of these issues.

Senator Cranston, it is always a pleasure, sir. It is good to be with you.

And Senator Sarbanes, as I recall very well, you and Senator Sasser, and $55 billion, as I recall, was the number. And I think you found unanimous reception among the mayors for what you had to say.

I thank you, sir, Mr. Chairman, for holding this hearing on urban America today and allowing me the opportunity to testify.

We as a Nation seem to focus on urban America only in times of sorrow. By now we have all seen two video tapes depicting crimes against the dignity of human beings, one of white police officers beating an African-American man; the other of African-American men beating a white truck driver.

On the one hand, we must not withdraw our respect and support from all police because of the misdeeds of a few.

In my own city, through community policing, our women and men in blue have made great strides. We have established ties to the community and built solid relationships with those they protect and serve, and I take great pride in the fact that they and all New Yorkers kept our community relatively peaceful during the recent disturbance.

I might add that part of the reason that we were successful is we have more police officers. I don't mean the capacity to put more out at a time of crisis, but we just had more around ordinarily. We did this by a $1.6 billion tax package over 6 years. It cost us, obviously.

If you take tax monies and divert it and segregate it in that fashion, those tax monies are not therefore available for some other human services things. But our priorities were fiscal stability first and public safety second.

So we have not simply wrung our hands and said to the Federal Government, please help us; we have done it ourselves.

It is also important to recognize the frustrations of those law abiding citizens who struggle to live decent lives in some of our less affluent communities. They, too, deserve our respect and support. On the other hand, those opportunists and criminals who stole property or committed violent acts must be brought to justice. But