Staats, Elmer, Comptroller General, General Accounting Office; accom- panied by John E. Milgate; Joseph R. Ferri; and David Wilson.. Opening statement by Senator Tunney- Bergsten, Dr. C. Fred, of the Brookings Institute_ Dent, Hon. Frederick B., Secretary, Department of Commerce; accom- panied by Robert Hagen, Bureau of the Census; Richard Hull, Assistant General Counsel; and Samuel Rosenblatt, Bureau of Domestic Com- Schultze, Dr. Charles L., of the Brookings Institute____ Stein, Dr. Herbert, Chairman, Council of Economic Advisers; accompanied by Dr. Gary Seevers, member; and Ben Massell, senior staff economist__ 255 Darden, Lloyd, western manager, Society of the Plastics Industry___. Ehrlich, Dr. Paul R., professor of biology and director of graduate studies, 263 Parry, C. W., manager, Corporate Planning, Aluminum Co. of America__ Seely, Ralph W., vice president and general manager, Western Steel Divi- sion, United States Steel Corp---- Taber, Lawrence K., secretary-treasurer, Canners League of California___ Will, Robert, general counsel, Metropolitan Water District of Southern ADDITIONAL ARTICLES, LETTERS, AND STATEMENTS Brock, Hon. William, U.S. Senator from Tennessee, statement--- Corrigan, James H., Jr., president, RJR Archer, Inc., statement--- Galbraith, John Kenneth, Harvard University, letter of April 19, 1974---- GAO recommendations to improve executive branch policy system, esti- 290 341 133 Hart, Hon. Philip A., U.S. Senator from Michigan, letter of April 30, 364 Mansfield, Hon. Mike, U.S. Senator from Montana, statement.. 214 366 Overton, J. Allen, president, American Mining Congress, statement... Peterson, Hon. Russell W., Chairman, Council on Environmental Quality, Pimentel, David, professor, department of entomology and section of of ecology and systematics, Cornell University, statement. Watts, Kenneth E. F., professor of zoology, University of California, letter 367 DOMESTIC SUPPLY INFORMATION ACT MONDAY, APRIL 29, 1974 U.S. SENATE, COMMITTEE ON COMMERCE; AND COMMITTEE ON GOVERNMENT OPERATIONS, Washington, D.C. A joint hearing of the Senate Committee on Commerce and the Senate Committee on Government Operations met at 10:20 a.m. in room 5110 of the Dirksen Senate Office Building, Hon. Warren G. Magnuson (chairman of the committee) presiding. OPENING STATEMENT BY THE CHAIRMAN The CHAIRMAN. The committee will come to order. This is the beginning of a series of hearings by the Senate Commerce Committee-joint hearings with the Government Operations Committee on shortages and the possibility of shortages control legislation. There will be some other Senators here as the hearings proceeds and we will exchange ideas during the different phases of the hearings. Some ideas might relate more to Commerce and others more to Government Operations. We have not completed our whole witness list yet, but we thought we would make a beginning today with this preliminary meeting. The Chairman has a short statement he would like to make. Looking back on the past this country has experienced periods of great recession. At other times we have suffered from serious inflation. In each case, whether it was the misery of recession and unemployment or the misery of inflation and rising prices we overcame it because of sound and responsive economic policies. But we have never before this administration experienced simultaneously the twin spectres of inflation and recession of this magnitude and duration. Never before have the people of this country been faced with the daily threat of both lost jobs and the incredible shrinking purchasing power of the dollar. In my judgment, this unique and terrible situation can be traced to at least one overriding cause, the choking off of critical raw materials and energy resources. Shortages-domestic and international shortages-are at the heart of our economic sickness. If we pinpoint the prime source of increases in the most of living, we find that 80 percent of the increases stem from higher food and energy prices. Those price increases in turn are directly attributable to the shortages and shortage-induced price escalation-in petroleum, petroleum-based fertilizers, baling wire, feed grains, and other essential building blocks of the food chain. Staff members assigned to these hearings: Leonard Bickwit, Jr., and Linda McCorkle. (1) And yet these plagues of shortages seem to have descended upon us without warning. The Arab boycott clearly dramatized and accelerated the international oil shortage. But we now know that these shortages were predictable and would have occurred in the absence of the boycott. We have slowly come to the realization that we should have begun energy and resource conservation and other appropriate re sponses years ago. This morning we are to receive from the General Accounting Office an investigative report analyzing the adequacy of the administration's performance in predicting and responding to the threats of pending shortages. I do not expect the report to be reassuring. I expect that it will document a complete lack of planning and preparation to handle these shortages; a sorry picture of misplaced priorities, fragmented, and overlapping responsibilities, misread warning signals, unfounded optimism, and windfall profits. We are not here this morning, however, to total up the balance sheet of past irresponsibility, but to determine that course of action which will prevent or defuse the impact of future shortages. Amendment No. 1069 to S. 2966, the proposal which I present to the committee this morning, would direct the Council of Economic Advisers to establish a single system for gathering and disseminating all critical data on key commodities and materials as well as the data necessary to determine projections for future needs for such commodities and materials. The legislation would impose the duty upon the CEA to identify at the earliest practicable moment anticipated future shortages. Most importantly, it would direct the Council to provide the Congress with essential recommendations for policies and legislation, if necessary, to avoid or ameliorate such shortages. To make absolutely certain that we are not again caught flatfooted, the legislation would also direct Congress' analytic, investigative arm, the General Accounting Office, to make its own independent analysis of data collected by CEA and provide to Congress its own evaluations and recommendations for remedial action. This legislation plainly is no panacea for the economic ills of the Nation. It is only one modest step in what must be a total national commitment to alleviate the crush of the two-headed inflation-recession monster, and to make certain that never again will we find ourselves a vulnerable, economic paper-tiger. Now that is the general purpose of our approach to this matter. There will be other suggestions made by Senators and members of the committees, and we welcome them. [The bills and agency comments follow:] 93D CONGRESS 2D SESSION S. 2966 IN THE SENATE OF THE UNITED STATES FEBRUARY 6, 1971 Mr. TUNNEY (for himself and Mr. MAGNUSox) introduced the following bill; which was read twice and referred to the Committee on Commerce A BILL To establish identification and reporting procedures to determine the existence and causes of shortages of products in interstate 1 commerce. Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 That this Act may be cited as the "Domestic Supply In4 formation Act". 5 6 STATEMENT OF PURPOSE SEC. 2. It is the purpose of this Act to require the 7 Secretary of Commerce to furnish to the Congress periodic 8 reports relating to the existence, causes, and future or 9 potential existence and causes of shortages of products in II |