Years ago, in one of the hospitals in Saginaw, there was a child born. And in one of these terrible, terrible accidents of fate, as this infant baby, just a few minutes' old, 2 or 3 minutes' old, went through the process of going through the initial care that's given to an infant right after it's delivered, they at that time put silver nitrate in their eyes to clean out their eyes to protect them from infection.

In that situation, a terrible error was made and somebody got the wrong medicine and they put something in the eyes of that child that blinded that child right then for life.

So here's this tiny infant in this delivery room that has this terrible act of fate happen right then, blinding this child, with no prospect of ever being able to see. And you'd look at that and you'd say, now what chance will this child have, starting out in this circumstance?

The child in question turns out to be someone who, as life went along, has probably become maybe the single most creative and brilliant creator of music in both songs and the lyrics and so forth, known as Stevie Wonder.

This is a tremendous accomplishment-I mean, it's now appreciated world-wide in scope. It's obviously an accomplishment in the field that he's chosen. But it's brilliant by any sort of measurement at a standard that puts him on a high level with probably any creative genius that we know about in the world today in the area of music and the arts.

Here was this infant child, starting out as he did all those years ago, with this terrific set-back, right literally at the moment of birth, but had the capacity and the potential not only to overcome that and to excel, but to excel to a level of excellence and brilliance almost beyond our ability to conceive it.

I ask myself the question, now he had to overcome other difficulties, too. He had to overcome the racial prejudice that's so predominant in our country and so forth.

But I ask myself the question, how many youngsters do we have like that out there right now being born into situations where it may not be that disability that happens to them, but equivalent factors applying, such as you've described here today, but yet, still have within them the capacity not just to do well in life, but to do brilliant things, things that lift our spirts and lift our souls.

We've just got to decide, I think, anew as a Nation, whether our relationship, one to the other, and our social contract as such, that we care enough about each other, whether we know each other or not, whether we're on the other side of town or in a different town or in a different State, to see to it that we're providing the kind of chance in life that lets every single one of our people have an opportunity to come forward and to make the most out of this wonderful gift of life which is, of course, God-given to all of us.

I think today in our society, that there are people out there every day in Stevie Wonder-type equivalent situations who need our help, and we need them. We need what they can do and what they will do if they're given any kind of a decent chance.

That's what we're talking about today. We're just talking about a decent chance. We're not talking about guaranteeing outcomes for anybody.

But I don't want the outcome guaranteed the other way, either. And that's where we are today. We're locking the door and bolting it on so many people in such an adverse way, that they'll never get out, they'll never make it through.

That's not America. That's not why we started this country and that's not how we're going to succeed and flourish.

And so, we've got to open those doors up. We've got to take that Berlin Wall down and you've given us some ideas today as to how to do that. This can be a time of great chance and great promise if we can understand the need to change our direction and to concentrate again on our people, invest in our people, which you've asked us to do today. And I want to work with you to accomplish that, and I'll be in touch with you to follow up on the ideas that we've talked about today.

Thank you all very much.

The committee stands in recess.

[Whereupon, at 12:45 p.m., the committee was recessed.]

[Prepared statements of the witnesses and additional material supplied for the record follow:]

1

TESTIMONY OF PETER C. GOLDMARK, JR.

Mr. Chairman, members of the Committee, my name is Peter Goldmark. I welcome and thank you for this opportunity to speak with you about our cities and the millions of Americans like myself and my family who live in our nation's urban centers.

I am here at your invitation as president of the Rockefeller Foundation. I draw upon my experience in that post, which I have held for the past four years, and also upon my earlier experiences as chief of staff in the mayor's office in New York City, as the first secretary of human services of Massachusetts, as budget director of New York State, and as executive director of the Port Authority of New York and New Jersey. My remarks today represent my own, personal views and are not made on behalf of the Rockefeller Foundation or any other organization or institution.

In considering the topic of these hearings, "Long-term Federal Urban Revitalization Strategies," it seems to me that a national policy for our cities must meet five broad criteria.

First, it must be consistent with the general directions required for the economy as a whole, such as:

emphasizing more investment and savings, less consumption; focusing on human capital;

relying on market forces and relationships to the degree feasible; addressing the growing inequality in skills and income.

Our national policy should also be consistent with an overall policy framework which seeks to impart a strong, sustained impetus to economic growth and productivity while gradually reducing the federal deficit.

Second, a national policy must seek to align federal, state and local policy and spending toward common objectives. In the present pattern federal policy often neutralizes or counteracts state and/or local action, as when one level's funding is used to substitute for another's cutbacks. And it must be informed by an acute sense of what each of the three levels-federal, state, local-in our federal system is capable and not capable of doing.

Third, as a national policy, it must be national in scope. Few federal programs which have required the federal government to select among localities have worked. Where a policy or program can apply to rural and suburban areas as well as to urban areas, so much the better.

Fourth, it must try to do one or two important things well, so as to encourage confidence that we can actually improve our situation. And finally, a national policy for our cities must be organized around values and principles which can be easily grasped and fairly applied. The most important of these is that everyone who can is expected to work; and there will be work for those who can work. The three most critical areas to be addressed in policy are jobs, crime and education. I will outline an approach towards each, and describe a structure of federal institutional support and incentives to back it up (see Attachment).

JOBS

Only the federal government can make a real difference on the job front, and it can only do so if it acts on a national basis. A serious jobs program would have the following initial elements:

1. An expansion of Job Corps to a level of 500,000 youth per year, and eventually to a level which could absorb every youth who wanted to sign up. The expanded Job Corps would enroll: high school dropouts; those who applied to the military but could not pass the entrance exams; and, in a special series of centers, those with criminal convictions (this point later is explicated further under "Crime").

Job Corps is expensive, but it works; there is a well-defined core program model and an agency with staff and experience on which to build. The Job Corps itself would be an excellent employment opportunity for non-commissioned officers leaving the armed forces. Job Corps could also be easily adapted to perform national servicetype functions in localities that wanted it; this could be an attractive local option. It is important that Job Corps be structured to pay more attention to imparting mid- and high-level skills wherever possible, and introduce a forced savings plan for every participant.

2. A pilot program of Neighborhood Reconstruction Corporations in all 50 states. Bloc grants would be given to states, and through them to localities and public authorities, to hire the unemployed and hard-to-employ to perform national service-type functions, such as park maintenance, light infrastructure repair, highway beautification, environmental conservation, and waterfront cleanup.

These programs would be let out for competitive bids to private Neighborhood Reconstruction Corporations which would have to meet specific minimum standards, such as health care for employees, acceptable salary ranges and promotion schedules, a forced savings program for new employees-e.g., $1,000 of first sixmonths salary withheld and placed in an interest-bearing bond— and this last item needs careful examination-day-care for certain types of employees. All the employees of NRCS would pay taxes. The federal role would be funding, policing of State administration, and enforcement of minimum standards.

A reasonable pilot level to get the bugs out and give the states and the federal government experience with the approach might be as low as $10 billion per year. This initial level would enroll up to 400,000 individuals. If it works, its "franchise" characteristics should allow it to expand rapidly, and its use of private contractors coupled with tough audit and control procedures should enable the program to purge itself regularly of dishonest business practices. When it has gone through its shakedown period, the program should offer special incentives to states willing to abolish their present welfare systems and transition to a new two-track system: disability payments for those unable to work, and Job Corps or NRCS for those able to work.

3. Most existing federal job training programs should be sharply scaled back, or put on a retrospective performance reimbursement basis: i.e., when the trainee is trained, placed, and survives a year on the job, then the State or local government is reimbursed.

4. The unemployment insurance system should be revised so that unemployment compensation is normally available only if it is used for training or retraining in addition to income substitution.

The 50-year old assumptions underlying this program have changed dramatically; in the present economic context it is far better for a person laid off to have 13 weeks compensation plus skills acquisition or upgrading, than to have 26 weeks compensation with no skills improvement. This is particularly true for the low-income portion of the population. The $20-billion per year which presently flows through the unemployment insurance system has no positive effect at all on improving skill levels; this proposal would change that.

5. As part of a national investment program, there should be a 10-15-year program of capital investment in physical infrastructure at a minimum level of $20-25 billion per year. This program should be part of a broader national investment program and like the rest of the program should be technologically innovative and internationally competitive. Therefore, this should not be a make-work program. It would, however, be heavily concentrated in the nation's metropolitan areas, and hence can have a sustained, positive effect on employment in urban areas. The federal government should encourage, with modest incentives, those states which are willing to build in quality vocational apprenticeship dimensions, and must be disciplined and merciless in application of the uniform non-discrimination provisions described below.

CRIME

Crime is the hardest issue to attack; yet in some ways it is the most important. To begin to deal effectively with the crime problem in our cities is to reduce fear, restore confidence, and address the divisiveness caused by ethnic and racial tensions through joint action in pursuit of objectives urgently sought by all racial and ethnic groups. We have not changed our thinking, our rhetoric or our action on crime in a quarter of a century. That is a sign that we are really in a deep rut and that it will be hard to get out. It will require a gradual refashioning of our ideas about responsibility, at both the neighborhood and individual levels, and it will force a searching examination of some of the sacred myths of both conservatives and liberals. It need not require much more spending, unless we repeat the LEAA mistake of the 1970s and pour billions into traditional police forces and squad cars.

Police is a local function in the United States, and routine criminal justice functions-courts, probation, parole, corrections-are distributed among state and local agencies differently in each state. The federal government's role, therefore, needs to be highly targeted, and to rely on incentives where it cannot usefully intervene directly. I advocate action in two categories: neighborhood involvement and a track out of crime and the ghetto for youth.

Neighborhood Involvement. Cities need to evolve systems of greatly strengthened neighborhood responsibility for deterring crime. This means everything from community policing, neighborhood patrol programs to after school programs for youth. The federal role here should be limited to analyzing, documenting and publicizing what works-and there is a lot that works. But only