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in jobs for which they were not properly trained and, in many cases, at reductions in grade.
We have put into effect several programs to correct the adverse impact of those personnel actions and these are detailed in my statement.
I am pleased to report that employee morale is building again.
1981 APPROPRIATIONS REQUEST
With respect to our authorization request, we are requesting two appropriations totaling $419.5 million.
One is an appropriation of $394.5 million covering both operational and capital requirements of the Commission. Of that amount, $23 million is for capital equipment and construction, to remain available until expended.
A second authorization of $25 million is requested to establish the Panama Canal Emergency Fund. All funds authorized for appropriation to the Commission are to come from the Panama Canal Commission Fund or, in other words, from canal revenues.
The appropriation required for operating expenses is $371.5 million. The major cost components of this total are $184 million for personnel compensation, $78 million for treaty payments to Panama, and $38 million for supplies and materials.
The $23 million requested for the capital program will be dedicated primarily to meet the needs of the canal in terms of increased traffic capacity and safety and efficiency in operations.
The $25 million requested for establishment of the emergency fund is to be financed from the Panama Canal Commission Fund.
REVISIONS TO HOUSE BILL
I wish to join with Secretary Blumenfeld in soliciting the assistance of this committee in revising the language and provisions of the House bill that he has previously identified in his brief statement and which are addressed more fully in my statement.
Additionally, I did provide a letter to the chairman of this committee, June 2, outlining the same requests.
Mr. Chairman, this concludes my brief summary. We stand ready to answer any questions.
[The prepared statement of Mr. McAuliffe follows:]
PREPARED STATEMENT OF DENNIS P. MCAULIFFE, ADMINISTRATOR, PANAMA CANAL COMMISSION
INTRODUCTION
Mr. Chairman, Members of the Armed Services Committee, I am Dennis P. McAuliffe, Administrator of the Panama Canal Commission I am pleased to appear before you today to request authorization for the fiscal year 1981 budget programs of the Panama Canal Commission, the agency responsible for operation of the Panama Canal. Attending with me are Michael Rhode, Jr., Secretary; and Myron A. Schroeder, Chief, Financial Planning Division. I would like first to provide you a brief assessment of the general situation in the Panama Canal area in the period since the Panama Canal Treaty took effect.