dren. White children's poverty increased from 11.8 percent to 14.8 percent. Latino child poverty went from 28 percent to 36.2 percent. And black child poverty increased from 41.2 percent up to 43.7 per

cent.

While the budget cuts of the 1980's were literally forcing millions of Americans into poverty, there were other social and economic trends destroying inner cities communities at the same time.

I'm sure everyone in this room has read the results of the Federal Reserve Board's study on mortgage discrimination. Those results were well-publicized.

African Americans and Latinos are twice as likely as whites of the same income to be denied mortgages.

High-income blacks are more likely to be turned down for a mortgage than low-income whites.

These trends are true in all regions of the country and in every bank surveyed.

In Los Angeles, a group called the Greenlining Coalition did its own study of the Bank of America, the area's largest bank and primary financial institution in South-Central Los Angeles. As you know, the Fed recently approved a merger of Bank of America and Security Pacific, the largest bank merger in history.

One of the criteria for approval of that merger was the CRA rating of the Bank of America. Bank of America had earned an outstanding CRA rating. Despite this, the Greenlining Coalition's study revealed some startling figures.

Only 2 percent of all of B of A's loans were made to California's 2.5 million African Americans.

Of these, only a trivial number, 156 loans, were made to low-income African Americans. That comes to only one-fifth of 1 percent of all loans for low-income African Americans.

It is estimated that as little as $8 million was loaned to low income African Americans, or one-tenth of 1 percent of the $8 billion in home mortgages let by the Bank.

Only $20 million was loaned to low-income Latinos, or one-fourth of 1 percent. Only one-fourth of 1 percent of Bank of America's loans went to low-income Asian Americans.

In total, only 4 percent of all Bank of America's loans were made to low-income Californians.

This administration talks a lot about home ownership, and you'll hear more about it today. But I've not heard one word about how we can end mortgage discrimination.

We've heard a lot about Enterprise Zones, but nothing about lending discrimination against minority businesses. In fact, the only word to come from this administration with respect to minority owned businesses is that they might declare our hard earned programs unconstitutional.

We can talk about Enterprise Zones. I am not opposed to Enterprise Zone possibilities. I think you must tie the jobs and commercial opportunities to the legislation so that you don't get accelerated depreciation and other kinds of tax incentives to businesses locating in Enterprise Zones, without them actually providing the jobs and the opportunities.

In law enforcement, the problems are long standing, and well documented as well. In a system where judges and lawyers remain

overwhelmingly white, blacks account for a share of the prison population that far out strips their presence in the population as a whole. According to the Sentencing Project, black men make up 6 percent of the population, but 44 percent of all inmates.

A USA Today analysis of 1989 drug arrest statistics found that 41 percent of those arrested on drug charges were black, although blacks were estimated to be only 15 percent of the drug using population.

A San Jose Mercury News investigation last year of almost 700,000 criminal cases found that at virtually every stage of pretrial negotiation, whites are more successful than non-whites. Of the 71,000 adults with no prior criminal record, one-third of the whites had their charges reduced, compared to only one-fourth of blacks and Hispanics.

A Federal Judicial Center study this year of Federal sentences for drug trafficking and firearms offenses found that the average sentence for blacks was 49 percent higher than for whites in 1990, compared to 28 percent in 1984.

Is it any wonder our children have no hope?

The systems are failing us, gentlemen. I could go on and on. All we can hope for is that the President, his Cabinet and Congress understand what is happening. We simply cannot afford the continued terror and oppression of benign neglect, the type of inaction that has characterized the Federal Government's response to the cities since the 1970's.

In conclusion, I congratulate this committee for having this hearing. We are all working overtime trying to formulate a quick and effective response to the crisis that engulfs us.

With leadership and commitment, I hope we can succeed.

And I thank you very much for letting me share some of my thoughts with you.

In all of the programs and responses that are being fashioned, I would ask that the center piece of that be jobs and job training. These folks want to work.

I don't want you to confuse young people, as you know them, to many of the people who are on our streets today. Many of these black males 17 to 30 years old are fathers of 2 and 3 children now. These are not the nice kids necessarily who simply dropped out of school or couldn't find a job. These are not the kids that will be pacified or young people with jobs summer training program.

I think we can have some apprenticeship training programs, we can prepare them for construction jobs, we can get them involved in cleanup of the aftermath of this rebellion, we can get them ready for when the recession is over and the housing starts that perhaps will happen. Many of them love working in the construction industry. I think we have some opportunities to do that and to involve the private sector in directing us in apprenticeship programs.

But, gentlemen, I maintain that we must, in the way that we did with CETA, have a stipend or some kind of subsistence wage for people who are in training. It will not happen if you don't.

People who are hungry, who are homeless, will not sit in training programs when they don't know where the meal is going to come from.

We can get thousands of young men off the street with a program of job training apprenticeship programs and a stipend of some kind that will lead to a job.

I thank you very much. I have lots of other ideas, but I won't take up any more of the committee's time. I just thank you for allowing me to share these thoughts with you.

The CHAIRMAN. Well, those are very valuable thoughts, and we appreciate having them. And I want to see the other things that you've got in your prepared statement, which we'll make a part of the record.

I just want to put one question to both of you. And that is, I hear you saying much the same thing. That job creation, honest-to-goodness job creation that is authentic and real and that leads to something that's meaningful, is really the most essential part of solving this problem.

There are lots of other aspects. There's the racial discrimination aspect that's part of it, there's the problem of health care and housing and all the other things we're aware of.

But if we don't solve the fundamental absence of meaningful job opportunities and job training, we can't begin to make serious progress. I hear you both saying that.

So let me put the question this way. You've both been involved in this for a long time, and you're deeply committed to it. You were the Labor Secretary in the State of Pennsylvania, and so you've been dealing with it there, you've been dealing with it on the streets, and, as you say, you went out to California in the beginning to be involved in Community Development type activity.

What happens if we don't do this? If there's just a big flurry right now, and a few buzz words tossed out, and a few dollars trickled out here and there, and try to take and sort of calm this problem down for the time being. And we stay right basically on the same track we're on today.

We just approved, by the way, $44 billion the other day-talk about finding resources-to build another 20 B-2 bombers. All right. We just found $44 billion for that. Now that's stretched out over more than 1 year, but it's a huge sum of

money.

Now, we're talking here, for the whole urban program that's been mapped out, a pittance, by comparison, to the $44 billion. So it's obvious that if we see a threat, there is the money to respond to the threat.

I see a war going on in our own country, a war going on in our own cities, and it isn't just when the guns are fired; it's the war that comes from people having no practical way of being able to improve their lives or have a sense of hopefulness about the future.

I mean, that's as devastating, in its own way, as being hit by a bullet or having somebody come up and hit you over the head, if somebody steals your economic future and puts you in a box you can't get out of.

If we don't do this, if we don't find some major sustained national strategy that incorporates the general thinking that both of you have outlined, what is going to happen if we just fall back into the same old patterns, what's going to happen 6 months from now, a year from now, 2 years from now, 3 years from now. What will the

future be like if we fail to respond with a much bigger type of strategy than we've done so far.

Ms. WATERS. Well, if I may, let me just say that, yes, you're correct. That racism and other kinds of problems exacerbate the situation that we're confronted with today. But if you have a job and some money in your pocket, you can deal with those problems.

It is easier for you to be a part of society and fighting the inequities that exist now.

Last night, my daughter called me late at night. There were 200 young folks gathered on a corner, near where the rebellion first started, about four blocks from where I live, four blocks that Senator Cranston is familiar with, because he has spent time down in this community, he's visited.

They were gathered and they were angry. They were angry because we have a police chief who really doesn't understand what he's doing. He decided to put his uniform on and go out and arrest maybe some bad people. But then, in his own way, he taunted those down there who are supposedly gang members, and he's kind of putting the old chip on the shoulder, saying, I dare you to knock it off.

And let me tell you, we have all of these young people with no stake in our society, people who are almost anonymous, who don't show up in anybody's statistics.

They don't live anywhere. Often times, they live with a girlfriend, grandmother, mother. They kind of trade off where they live. They're not on the Housing Authority's records because, if they were, you'd have to pay more money. And once they get a certain age, their mothers say, no, you can't really stay here because we can't afford to have the rent increased. They're not in school. They don't show up in the unemployment statistics because many of them have never worked or just worked for a short period of time.

And I guarantee you they didn't fill out any census forms. They represent 200 of them that began together last night on Los Angeles streets just a block or two away from my home.

There are thousands of them with no stake. I don't like to sit here and predict for this country rebellions and riots and people acting out. It unnerves some people.

Some people say, by simply saying it, you cause it to happen. But let me tell you, we're in some very difficult and dangerous times. And despite the fact that there is calm in Los Angeles, bubbling beneath the surface is a kind of rage that I have not seen in my life time. A kind of defiance that frightens even me, and I know those streets very well. I know many of the young people who are out there. They don't like us very much, they don't think we really care about them, and they don't think that we can come up and fashion solutions. That's our challenge to do that, so that we can avoid the destruction that this situation portends.

Senator WOFFORD. Mr. Chairman, if you want the answer to that question, I suggest, go to Los Angeles, see the future and see that it doesn't work.

If we don't deal with the problem, the crisis of urban poverty and of our young in our great cities, we will be a society in our great cities in which the affluent minority is walled behind armed guards

and there will continue to be people with guns on street corners. The future doesn't work that way.

I suggest to you, take one of those B-2's, ground it, and invest that probably $2 billion before it comes, into some of the programs we've been talking about, including as a parting point, to you, the Youth Bill program that your colleague, Senator Kerry of Massachusetts, is championing that would engage young people to serve and not be served, and to help rebuild our cities, beginning in Los Angeles.

The CHAIRMAN. Let me say to the committee members, I know everybody here has questions, and I want to be accommodating.

We have the Secretary of Housing and Urban Development waiting to testify. We have Mr. Fletcher here waiting to testify.

And so anything that somebody wants to raise, I want to be able to allow, but I want to stay within a pretty tight time constraint here, so that we don't disadvantage the other witnesses that are coming.

So with that, having spoken myself, who on this side, Senator Domenici?

Senator DOMENICI. Mr. Chairman, might I just, for a moment, speak to the new Senator from Pennsylvania.

Thank you for your remarks.

You will help if you stay on the path of trying new things. I'm not going to burden this record with dollar numbers. But it is a fallacy to assume we are spending less today than 10 years ago on the problems you're talking about. We are not.

In only one area are we spending less, and that is comparing CETA with the New Jobs Partnership Act. And Representative Waters is probably right with reference to its ineffectiveness for the very poor who have never been employed.

But in every other area, we're spending more, not less. On means tested programs which are for the poor, means tested for them, we're spending substantially more, not less. I don't believe we're going to succeed if we talk about more of the same.

I believe there is, within the programs, room for dramatic improvement and change. And let me close by saying, nothing in my adult life hurt me more than to see tanks in Los Angeles. To see that happen diffused every notion I had that we were invincible. We didn't have an enemy, but we had American tanks in the streets of one of the formerly great great metropolitan areas. I honestly believe that jobs and education is our responsibility in terms of policy.

Now, the other issues of values, I don't know how that's all going to get fixed, but I want to close by telling you and everyone worried about our minorities and under privileged, it is education that puts people in affluence, good living; and lack of education puts them in poverty.

The statistics from the census are patent that if you don't get educated, you are most probably going to be poor. They are gigantic, I say to my friend from Pennsylvania, the census says, if you have a high school diploma, you get-those without it average $452 a month. And just jump up to a simple high school diploma, and you get $921 on average, and then just jump up to an associate degree you get $1500 a month on average in the country.