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72   HELICOPTER AIR SERVICE PROGRAM

Senator LAUSCHE. I read from your statement, on page 1:
The President, in his budget for fiscal year 1966, stated that "It appears undesirable as a matter of public interest to continue this program."
That is a direct quotation from the President's statement, is it?
Mr. GILES. Yes, and the President has recommended to the Congress the termination of the subsidy program for the helicopter carriers as of December 31, 1965, and included in his budget for the first half of the next fiscal year a sufficient amount to continue the subsidy for the first 6 months; that is, until December 31, 1965.
I would like to mention, Mr. Chairman, in connection with that, that the President probably would have been justified, on the basis of the action of Congress last year, not to have included in his budget anything at all for the next fiscal year because the conference report, which was approved unanimously by the House conferees and a majority of the conferees of the Senate, stated that they did not wish to have one penny for these three carriers in the budget next year, meaning the fiscal year beginning July 1, 1965.
The President is a little more, you might say liberal, than what was indicated in the conference report in that the President has recommended that provision be made for the first 6 months of the next fiscal year.
Senator LAUSCHE. Do you feel qualified to talk on the prospects of developing new plans under which these services could be maintained without subsidy from the Federal Government?
Mr. GILES. I will be glad to respond as well as we can. I should have mentioned, and I would like to have shown for the record that Mr. Ralph Hays, on my right, is the transportation analyst in the Undersecretary's Office, and does give particular attention to the air phase. 
Mr. O'Keefe is an attorney on my staff on transportation. I don't assume that the three of us can speak with any more expertness or perhaps as much as the previous witness, Mr. Halaby. I would say, as a general observation, from our own study of it--and we as lawyers are having to get as well prepared as we can because we are going to be representing our clients before the hearing examiner presumably--our conclusion is the same in general as Mr. Halaby stated, that is, there are other things which can be done and we think should be considered; namely, what are the airlines, the trunk airlines doing, and what can they do, and more particularly, what can the local communities do. 
 It is in our judgment a policy issue as to whether the Federal Government should continue subsidy for these three communities--these three lines.
Whatever judgment or assumption is made as to the future development, the future prospects in this area, it is the conclusion of the administration that the time has come to end this 17-year experiment.
We do think, it is our view in the Department of Commerce, that the termination of the subsidy as of December 31, this year, will not mean and does not necessarily mean at all that the carriers will have to terminate operations.
We think on the basis of our study and analysis of it, that some other arrangements can be made. If the economic need is there, and