TESTIMONY BY THE DIRECTOR OF THE BUREAU OF PRISONS STATES THAT THE BUDGET REQUEST FOR FISCAL YEAR 1980 IS $334 MILLION AND 10,361 POSITIONS. THIS IS REPORTED AS A DECREASE OF $26 MILLION AND 127 POSITIONS OVER THE CURRENT FISCAL YEAR APPROPRIATION. THE REDUCTION IS SAID TO RESULT FROM THE TRANSFER OF THE NATIONAL INSTITUTE OF CORRECTIONS FROM THE BUREAU OF PRISONS TO THE NEW PROPOSED OFFICE OF JUSTICE ASSISTANCE, RESEARCH, AND STATISTICS, AS WELL AS FROM THE BUREAU'S DECISION NOT TO REQUEST AUTHORIZATION FOR CONSTRUCTION OF NEW INSTITUTIONS FOR FISCAL YEAR 1980. CONCERN IS EXPRESSED OVER A PRISON POPULATION 14 PERCENT ABOVE CAPACITY IN EXISTING INSTITUTIONS, EVEN THOUGH THE INMATE POPULATION HAS DECREASED BY 4,500 IN THE PAST TWO YEARS. SOME RELIEF IS ANTICIPATED FROM EIGHT NEW FACILITIES CURRENTLY UNDER CONSTRUCTION OR DESIGN AND FROM CONVERSION OF TWO DEACTIVATED MILITARY BASES TO MINIMUM SECURITY FACILITIES. TESTIMONY FROM PRIVATE ORGANIZATIONS AND INDIVIDUALS DEALS WITH INADEQUATE GENERAL MEDICAL AND DRUG ABUSE TREATMENT IN FEDERAL CORRECTIONAL FACILITIES, AND THE PROPOSAL TO PUT 1980 WINTER OLYMPIC FACILITIES TO CORRECTIONAL USE AFTER THE GAMES. OPPOSITION TO THE USE OF THE LAKE PLACID, NEW YORK FACILITIES IN THIS MANNER IS BASED UPON PERCEIVED DEMEANING OF OLYMPIC SYMBOLISM AND THEIR DISTANT LOCATION FROM THE COMMUNITIES WHERE INMATES ORIGINATE. WRITTEN TESTIMONY STATEMENTS ARE INCLUDED. (RCB)