The Fight over Funding
GLASS, ANDREW J.
Washington-USA THE FIGHT OVER FUNDING BY ANDREW J. GLASS Washington A decade ago, Walter Heller, the New Frontier braintruster, helped to launch the revenue sharing idea by reporting that...
...In some cases, the votes will be mustered to override the expected string of Nixon vetoes...
...Whatever "fiscal dividend" might have been employed for this purpose was sopped up by the war in Indochina and accelerating military budgets...
...Yet under the disbursement formula the town was entitled to merely $10,000, an amount insufficient to cover half the cost of digging the ditches, much less the purchase of plans, pipes and pumps...
...A Montana town that had secured a Federal sewer subsidy, for example, found out the funds had been frozen just as construction was due to begin...
...As Nixon would have it, the Pentagon budget is due to go up by $4 billion on top of a presumed $4 billion saving in Indochina...
...If one allows for inflation and national growth, the projected cuts actually go much deeper...
...has suggested what he calls "counterimpoundment...
...Yet the blacks as a group have fallen far behind their white counterparts in income, housing and education...
...But there's no comparable ruthlessness, no comparable relentlessness, in paring military fat or challenging tax favoritism...
...LBJ's people called the program Demonstration Cities until that word had to be dropped from official lexicons...
...If they won't help the farmers, then let's cut defense...
...For the blacks who often run Federally subsidized programs locally—and gain rapid upward mobility for themselves in the process—are the real targets of the second Nixon Administration...
...To offset anticipated cost increases in certain sectors, like Social Security payments, the President proposes slashing about $17 billion from Federal domestic programs during the coming fiscal year...
...Meanwhile, the President may be found in Washington, Key Biscayne or San Clemente, more likely than not preparing a radio talk on the need for continued fiscal responsibility...
...But what can Congress do when the President impounds the money after it passes an appropriation again over his veto...
...Still another target is the approximately $7.5 billion in economic assistance for the two Vietnams that the President wants...
...And though most mayors want both flexibility and operating control, that isn't always the case...
...As chairman of President Kennedy's Council of Economic Advisers, Heller saw no reason to rejoice about the fact that a newly booming economy and a progressive income tax system were working in league to fill the Treasury's coffers to overflowing...
...Senator William Proxmire (D.-Wis...
...A net total of $50 billion in Federal tax cuts made over the last 10 years accounted for the rest...
...With plenty of help from liberals in Congress—who were motivated by a different set of pressures—Nixon succeeded last year in pushing through a five-year, $30 billion, "no-strings" package for the states, counties and cities under the heading of New Federalism...
...True enough, there is little proof that Federal programs by themselves are able to eradicate poverty...
...Given its present mood, however, Congress can hardly be expected to go along without attaching strings cf its own...
...In several places between its blue and yellow covers, the 1974 Nixon budget document thoughtfully points out that revenue sharing funds are available should local officials insist on retaining one or another of the dropped programs in their communities...
...Nixon is hoping the mayors will pipe down once they receive word of his "special revenue sharing" plans—in reality, bloc grants aimed at removing the strong Federal hand from municipal projects...
...The President likes the scheme because it fits in nicely with his belief that the Federal government should be the party of last resort in most domestic undertakings...
...official estimates project another $12.7 billion of red ink in the coming fiscal year...
...Washington-USA THE FIGHT OVER FUNDING BY ANDREW J. GLASS Washington A decade ago, Walter Heller, the New Frontier braintruster, helped to launch the revenue sharing idea by reporting that large Federal budget surpluses were at hand...
...These words offer limited solace...
...Revenue sharing is being repeatedly cited as the justification for cutting back or axing outright programs for libraries, recreation centers, public employment, and community action—a particular bug-gaboo for our Calvinist President...
...As a result, spending on Great Society programs, with few exceptions, was restricted to demonstration levels...
...Then the political stage revolved and it fell to Richard Nixon to convert revenue sharing from an idea into a reality...
...To cite one case, as initially conceived, Model Cities funding was to go to only a handful of localities...
...In the process, he would drop some long-standing services while forcing others to make do on half-rations...
...The White House knows all about these subleties, but it chooses to ignore them...
...The Southern bloc, a frugal yet practical group, is fining up with the liberals on this issue...
...But like many other cities, his is probably divided about equally along racial lines...
...So, as it turns out, revenue sharing is being funded out of deficits rather than surpluses...
...Congress' potential targets in the military shopping list are juicy enough: nuclear aircraft carriers at $1 billion apiece...
...Reviewing those heady times, another capable economist...
...The White House cites inflated costs, the need to finance an all-volunteer Army and the general wear-and-tear on military hardware caused by a decade of war...
...Now the Nixon White House has put Model Cities on ice...
...Minn...
...a new-generation bomber force to be developed at an overall cost of $11 billion...
...Others could be cut, but only at the risk cf alienating their beneficiaries, many of whom vote...
...Testifying at a recent hearing convened by Senator Edmund Muskie, he pointed out how the Administration has perverted his revenue sharing ideas: "What we find in the Nixon budget is that it is relentless, even ruthless, in pursuit of evil in social programs: public service jobs, health, pollution, education and the like...
...recently recalled that the anticipated surpluses were regarded as a bad thing because they could be expected to create a fiscal drag on spending, dampen employment, curb production, and eventually bring on a recession or worse...
...But congressional leaders are far from satisfied with these arguments...
...Moreover, a host of mandatory Federal spending obligations, ranging from military pensions to interest on the national debt, arc waiting to swallow every bit of new revenue, even under the sunniest of economic climates, for the next three or four years...
...He prefers this arrangement to revenue sharing, although he cannot say why openly...
...Senator Walter Mondale (D...
...As the mayors see it, some of their programs are so much a part of the local scene that it would be impossible to abolish them...
...To the extent the programs are continued, money to pay for them must be raised through new taxes—and property owners also vote...
...As he put it the other day: "They don't worry about words and resolutions [at the White House...
...The President maintains that the Great Society failed, couching his arguments in terms that assume they are beyond challenge by reasonable men...
...Grants were provided to test, say, what an efficient mass transit system could do in altering commutation patterns...
...So the money had to be spread around hundreds of cities, never leaving enough in any one pot to accomplish the original task...
...Unhappily, by that time cumulative budget deficits under the Nixon Administration had climbed above $75 billion...
...So the lines for the coming battle of the budget are being ever more firmly drawn...
...Then politics got in the way...
...Thus it is hardly surprising that Democratic governors and big-city mayors, many of whom were instrumental in moving the revenue sharing legislation through the 92nd Congress, now say they have been double-crossed by the White House...
...Housing and Urban Development officials suggested the town employ revenue sharing moneys instead...
...It was a rational concept in terms of the sums involved but irrational in terms of securing Congressional approval...
...Democratic majorities in the House and Senate are prepared to reverse many of these decisions...
...When a big chunk of revenue sharing money arrives, municipal politics dictate that it be distributed more or less evenly between projects benefiting blacks and those aimed primarily at helping white residents...
...On the other hand, at no time have they been given sufficient fiscal clout to determine what they could accomplish at fully funded levels...
...The sum includes $6 billion aimed at cleaning up the nation's waterways, which the Administration left off its impoundments list on the dubious premise that Congress never meant the President to release the full amount anyway...
...Since Federal categorical aid remains closely tied to need, much more of it tends to go to blacks—and in a manner that protects the mayor's political head...
...Nixon's response to these realities was to fashion a fiscal '74 budget that, with the gimmicks stripped away, sets spending for all civilian programs at a level about $2 billion below current outlays...
...A similar approach has been advocated by Walter Heller, now a university professor...
...The mayor of a large Southern city, for instance, will frequently insist he desperately needs Federal dollars earmarked for specific purposes, the so-called categorical grants...
...Triton subs with MiRV-type missiles at $1.3 billion each...
...As a further measure of his earnest resolve to destroy New Deal, Fair Deal, New Frontier and Great Society works, Nixon ordered his budget handlers to impound nearly $15 billion previously voted by the Congress and either signed into law by his own hand or else passed over his veto...
Vol. 56 • March 1973 • No. 6
