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Urban Development and Neighborhood Revitalization Committee (4)
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Urban Development and Neighborhood Revitalization Committee (4)
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The original documents are located in Box 38, folder "Urban Development and
Neighborhood Revitalization Committee (4)" of the James M. Cannon Files at the Gerald
R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 38 of the James M. Cannon Files at the Gerald R. Ford Presidential Library
PRESS CONFERENCE NO. 38
of the
PRESIDENT OF THE UNITED STATES
7:31 P.M. EDT
October 14, 1976
Thursday
In Room 450
The Old Executive Office Building
Washington, D.C.
THE PRESIDENT: Good evening. Will you please
sit down.
I do have a brief opening statement., When I was
chosen to be Vice President, I underwent the most intensive
scrutiny of any man who has ever been selected for public
office in the United States. My past life, my quali-
fications, my beliefs all were put under a microscope and in
full public view. Nonetheless, all of you here tonight --
and many in our listening audience -- are aware of
allegations that came forth in recent weeks involving my
past political campaigns.
As I have said on several occasions, these rumors
were false. I am very pleased that this morning the
Special Prosecutor has finally put this matter to
rest once and for all.
I have told you before that I am deeply privileged
to serve as the President of this great nation. But, one
thing that means more to me than my desire for public
office is my personal reputation for integrity.
Today's announcement by the Special Prosecutor
reaffirms the original findings of my Vice Presidential
confirmation hearings. I hope that today's announcement
will also accomplish one other major task -- that it
will elevate the Presidential campaign to a level
befitting the American people and the American political
tradition.
For too many days this campaign has been mired
in questions that have little bearing upon the future
of this nation. The people of this country deserve
better than that. They deserve a campaign that focuses
on the most serious issues of our time -- on the purposes
of Government, on the heavy burdens of taxation, on the
cost of living and on the quality of our lives and on the
ways to keep America strong, at peace and free.
MORE
Page 2
Governor Carter and I have profound differences
of opinion on these matters. I hope that in the 20 days
remaining in this campaign we can talk seriously and
honestly about these differences so that on November 2
the American people can make a clear choice and give
us, one of us, a mandate to govern wisely and well during
the next four years.
Ladies and gentlemen, I will be glad to
answer your questions.
Fran?
QUESTION: Mr. President, would you also like
to set the record straight tonight on an issue that John
Dean has raised?
Did you at any time use your influence with any
Members of Congress or talk to lobbyist Richard Cook
about blocking a 1972 Watergate break-in investigation
by Wright Patman's House Banking Committee?
THE PRESIDENT: I have reviewed the testimony
that I gave before both the House and the Senate
committees and those questions were asked. I responded
fully.
A majority of the Members of the House
committee and the Senate committee, after full
investigation, came to the conclusion that there was no
substance to those allegations.
I do not believe they are any more pertinent
today than they were then, and my record was fully
cleared at that time.
MORE
Page 3
QUESTION: Mr. President, in the past several
days you have made two major decisions, one to sell
Israel compression bombs, sophisticated weaponry, even
though their request had been hanging fire for many
months. You also decided to give the wheat price support,
the 50 percent boost, even though the Agriculture
Department said the day before that there was no economic
justification for these.
Can you state flatly that none of these decisions
was designed to enhance you politically?
THE PRESIDENT: Categorically, those decisions
were based on conditions I think justified fully the
decisions that I made. In the case of the four items
that were cleared for delivery to the Government of
Israel, those items have been on the list for consideration.
Those items have been analyzed by the various departments
in our Government. And the net result was that I
decided, after discussing the matter with my top advisers,
that those items should be cleared for the Government
of Israel.
QUESTION: On what justification do you give
such weapons and why did you bypaes the Pentagon and
the State Department?
THE PRESIDENT: I made the decision, and that
decision is mine and they may have been a little
disappointed that they did not have an opportunity to
leak the decision beforehand--and I felt that it was a
decision only for the Commander-in-Chief, and I made
it as such, and based on recommendations that were
made to me by responsible people, the top people, giving
me. advice in this regard.
On the other question regarding the increase
in the loan rates, in May of 1975 I vetoed an agricultural
bill on the basis that I thought it was not good
legislation at that time. But I said at that time
in the veto message that I would be very watchful to
make certain that if conditions changed we would increase
the loan rate.
In May of 1975, for example, the price of wheat
was about $3.35 a bushel. Recently, the price of wheat
was about $2.79 a bushel. There was a very severe drop.
And in order to make certain that wheat will be marketed
properly and the farmer will have an opportunity to
market that wheat which he produced at our request of
full production, and in order for the farmers, the wheat
farmers, to have adequate financing to proceed with their
fall planting of winter wheat, I decided that it was in
the best interest of full production for the American
farmer that those loan rates be increased. They were
based on a commitment I made in May of 1975, and changed
conditions today.
MORE
Page 4
QUESTION: Mr. President, in the course of the
Watergate Prosecutor's investigation of your income taxes,
your taxes were made public, leaked to the press at one
point, and in those taxes, it showed at one point you took
money from your political organization and used over $1,000
for a family vacation to Vail and several hundred dollars
for personal clothing.
I wonder if you would address the propriety of
action like that.
THE PRESIDENT: I think you have to bear in mind,
as I recall those initial payments, for airline tickets
and for the others, were made out of what we call the
Fifth District account, and within, I think it was a week,
or two weeks at the most, I reimbursed that account fully
in both cases.
QUESTION: In the case of reimbursements, the tax
information also showed that your personal bank account,
if it were, went down in the red something like $3,000, but
it was soon reimbursed, and there was a question left as
to how you reimbursed that $3,000.
THE PRESIDENT: That was my next paycheck. (Laughter)
I think a few people in this country have written
checks and then waited until the end of the month and then
mailed the checks -- maybe you haven't done it, but I
suspect a few people have -- and we mailed those checks after
we had the money in the bank account. But I wrote the
checks before the end of the month. It is a perfectly
legitimate thing and there was never an overdraft in my
account. (Laughter)
QUESTION: Mr. President, there have been some
questions a few weeks ago about your taking, accepting,
golfing vacations and travel from lobbyists and corpora-
tions. It has been quite some time since these allegations
were made. I wonder if you can clear this up tonight.
Just how often, how many times, did you accept free travel
and golfing vacations from lobbyists and corporations?
THE PRESIDENT: To the best of my recollection,
the ones that came to light are the ones involved --
there might be one or two more, but I can't recollect
the instances.
QUESTION: Mr. President, if I may follow up on
Frances Lewine's first question, I don't think you quite
answered the question. The question is not about your
testimony at the time specifically, it is about the new
allegations from John Dean that, in fact, you did discuss
six times with Mr. Cook the matter of blocking the investi-
gation by the House of Watergate and at the time you said,
at the time that you went through your investigation, you
mentioned, you said you did not recollect such discussions.
Do you now recollect discussions with Mr. Cook on that
subject?
MORE
Page 5
THE PRESIDENT: I will give you exactly the same
answer I gave to the House Committee and the Senate Committee.
That answer was satisfactory the House Committee by a vote
of 29 to eight, and I think a unanimous vote in the Senate
committee.
The matter was fully investigated by those two
committees and I think that is a satisfactory answer.
I am not going to pass judgment on what Mr. Dean now alleges.
QUESTION: Mr. President, would you oppose, on
the Dean matter, would you oppose a review of White House
tapes and investigation by the Special Prosecutor an
investigation that has been called for by Congressman
Conyers and Congresswoman Holtzman?
THE PRESIDENT: That is a decision:for the Special
Prosecutor to make. I have never, at any time, in the
just previous investigations or at any other time, inter-
fered with the judgment or the decisions of the Special
Prosecutor, and I wouldn't in this case.
MORE
Page 6
QUESTION: Mr. President, you have been going
up and down the country, most recently in New York and
New Jersey, saying things are getting better, things
have improved and there is a definite difference between
you and your other candidate, Mr. Carter.
There is a 7.8 percent unemployment rate. The
Commerce Department today announced that retail sales
fell by 1.1 percent. The stock market took a nose dive.
Mr. Friedman, a conservative economist, says nothing that
either you or Mr. Carter offers will cause a change in
the rise of Federal spending, and finally Mr. Greenspan --
your own advisor -- predicted today a continued 6 percent
inflation rate.
THE PRESIDENT: Let me set the record --
QUESTION: I don't understand how things are
getting better.
THE PRESIDENT: Let me set the record straight.
There is a very distinct difference between Federal
spending proposals by President Ford and those of Governor
Carter. Governor Carter has endorsed, embraced, sponsored,
60-some new programs that will cost $100 billion a year
at a minimum and $200 billion probably on an annual
basis. So, there is a distinct difference between
Governor Carter on the one hand and myself. He wants to
spend more and I want to hold the lid on Federal spending.
Let's talk about the status of the economy. In
the first quarter of this calendar year, the rate of
growth of GNP was 9.2 percent. It fell in the second
quarter to 4.5 percent. It looks like the third quarter
will be in the range of about 4 percent.
I have checked with the responsible advisors
to me in this area and they expect a resumption of the
rate of growth of GNP in October, November and December
of over 5 percent and probably closer to 6 percent, and
they expect that same rate of growth in 1977.
We have had a pause, but we could not sustain
the rate of growth of the first quarter of 1976, when
it was 9.2 or .3. We are now coming out of the dip or
the pause that we had, and I believe that all, or
practically all, economists recognize that the economy
is continuing to improve and will get better in this
quarter and in 1977.
MORE
PRESIDENT'S PRESS
CONFERENCE
Page 7
QUESTION: Mr. President?
THE PRESIDENT: Yes?
QUESTION: Mr. President, in keeping the
lid on Federal spending, are you willing to accept the
continued physical and social deterioration of the big
cities of this country? A Marshall plan sort of approach
has been offered. Would you, if elected, move in that
direction?
THE PRESIDENT: I would not embrace any spending
program that is going to cost the Federal Treasury and
the American taxpayers billions and billions and billions
of dollars. We have good programs for the rehabilitation
of our major metropolitan areas. I just signed a
general revenue sharing bill. We fully fund the
Community Development Act. We fully fund the mass transit
legislation.
We have a number of very good programs that are
in operation today, and about three months ago I
appointed the Secretary of HUD, Carla Hills, to head a
Cabinet Committee on Urban Development and Neighborhood
Revitalization. That committee is working together
very closely so that we get the full benefit out of all
the Federal dollars now available to help our inner
cities and major metropolitan areas.
I think we are doing a good job and to all
of a sudden just throw money in doesn't make any sense
because you are bound to have more deficits, more taxes
and more inflation.
So, I think we ought to make the programs we
have today work and they are working and will solve
the problem.
Yes?
QUESTION: Mr. President, a review of your
travel logs from this fall and last fall shows that
for a comparable period last fall you spent exactly as
much time on the road -- 15 days last fall -- when there
was no campaign and no election than you have this
fall when there is a hotly contested Presidential
election.
Doesn't this lend a little bit of credence to
Governor Carter's charge that you have been hiding in the
White House for most of this campaign?
MORE
Page 8
THE PRESIDENT: Tom, didn't you see that
wonderful picture of me standing on top of the limousine
with the caption "Is He Hiding?" The truth is, we are
campaigning when we feel that we can be away from the
White House and not neglect the primary responsibilities
that I have as President of the United States.
I think you are familiar with the vast number
of bills that I have had to sign. We have done that.
That is my prime responsibility, among other things.
We do get out and campaign. We were in New York and New
Jersey earlier this week. We are going to Iowa,
Missouri and Illinois between now and Sunday.
We will be traveling when we can, but my prime
responsibility is to stay in the White House and get
the job done here, and I will do that and then we will
campaign after that.
MORE
Page 9
QUESTION: Mr. President, how do you account
for, at this rather late stage in the campaign, so many
voters are telling pollsters that they remain undecided
and many more are saying that they may not bother to
vote at all?
THE PRESIDENT: It is disturbing that there are
these statements to the effect that voters are apathetic.
I believe we have tried to do everything we possibly
can to stimulate voter participation. I want a maximum
vote in this election on November 2 and in every way I
possibly can we are going to stimulate it between now
and November 2.
I can't give you an answer as to why there is
apathy. I am going to do what I can to overcome that
apathy and, naturally, I hope to convince 51 percent of
the people in enough States so that we get enough
electoral votes so that we can continue the policies
of trust, peace and growing prosperity in the United
States.
QUESTION: Mr. President, do you think it is
proper for a Member of Congress to accept a golfing
vacation or golfing weekend trip, and would you, now
that you are in the White House, accept such a trip?
THE PRESIDENT: I have not accepted such a trip
since I have been Vice President or President. And when
I was in the Congress I have done as I said in the
limited number of instances that have been in the paper.
Yes?
QUESTION: Mr. President, you said that in your
debate with Jimmy Carter, your statement on Eastern
Europe demonstrated a certain lack of ability to think
fast on your feet. Without intending to once again
review the merits of that debate, how important, in
your judgment, is it for a President to think fast
on his feet to do his job properly?
THE PRESIDENT: I think it is vitally important
for a President to make the right decisions in the Oval
Office, and I think I have made the right decisions
in the Oval Office. I have admitted that in that
particular debate I made a slip in that one instance,
but I would like to compare that one slip with the
documented instances that we found in Governor Carter's
presentation a week ago when he made some 14 either
misrepresentations or inaccurate statements.
MORE
Page 10
And while we are on that subject, I would like
to say that I feel very strongly that the attitude
that he took on that occasion, where he said America
was not strong, where he said the United States
Government had tried to get us into another Vietnam
in Angola, and where he said the United States had lost
respect throughout the world.
I don't approve of any candidate for office
slandering the good name of the United States. It
discourages our allies and it encourages our adversaries.
Yes?
QUESTION: Mr. President, on the debates, two
of them have happened and one is to come. Do you have
any thoughts perhaps on changing the rules for the
third debate, and also, do you feel impeded since you
are President and know more than you can say in public?
THE PRESIDENT: About the only improvement I
would make is to get Mr. Carter to answer the questions.
(Laughter)
QUESTION: Mr. President, could you tell us why
it took you six days and four clarifications before you
finally admitted that you had in fact made a mistake
in the debate in your remarks on Eastern Europe?
THE PRESIDENT: I think it took some thoughtful
analysis because, as someone may have noticed, there was
a letter to the editor in the New York Times a day or
two ago by a very prominent ethnic, a man by the name
of Janovitz, as I recall, who said that my answer was the
right one. But it all depends on how you analyze the
answer.
But I wanted to be very clear to make certain
that the Polish-Americans and other ethnics in this
country knew that I knew that there are some 30 Soviet
divisions in Poland and several of the other Eastern
European countries.
On the other hand, I want to say very strongly that
anybody who has been in Poland, for example, as I have in
1975, and seen the Polish people, the strong, courageous
look in their face, the deep feeling that you get
from talking with them, although they recognize that
the Soviet Union has X number of divisions occupying
their country, that freedom is in their heart and in
their mind, and they are not going to be dominated over
the long run by any outside power.
Now we concede for the time being the Soviet
Union has that military power there, but we subscribe
to the hopes and the aspirations of the courageous Polish
people and their relatives here in the United States.
MORE
Page 11
QUESTION: Mr. President, if they tried to
overthrow that power, would you look favorably on helping
them in some way?
THE PRESIDENT: I don't think we should answer
that question. I don't think it is going to happen.
I don't think we should respond to thatkind of a question
in a press conference.
Yes?
QUESTION: Mr. President, you have had some
harsh words for your opponent's performance in the
second debate, and yet every public opinion survey that
I have seen showed you lost that debate and it was one
that was on foreign and defense affairs, which are
supposed to be your strong suit.
Do you agree that you lost that second debate
and, if so, why? Or, if you think you won it, why
do you think that happened?
THE PRESIDENT: I think there is a poll that
shows the conclusion you have just set forth. I don't
necessarily agree with that, but there were some very
specific answers that were given by people who were
interrogated afterwards. If you will look at that
list of special questions that were asked of people who
responded, it showed that in those cases -- and I
think they were the very fundamental ones on specific
issues -- knowledge, firmness, strength -- that a majority of
people thought I had prevailed.
QUESTION: Mr. President, the Federal Power
Commission has authorized the increase in the price of new
natural gas. That is something you favored. The original
estimate was that it would cost the American consumer
$1.3 billion a year. Now we are told that it may be as
high or higher than $3 billion a year. Do you think
that price increase should be rolled back or should it
stand?
THE PRESIDENT: The fundamental issue is, if
you don't get a price increase you are not going to
have any new natural gas. So, the question is, are you
willing to pay for enough gas to heat our homes and
to heat our factories so people will have jobs? We have
to give an incentive to people to go out and find
new natural gas sources, and if you don't give them
that incentive, there won't be any heat for their homes
or heat for their factories and will lose the jobs.
MORE
Page 12
QUESTION: Are you willing to risk another
jolt to the economy from this large price increase?
THE PRESIDENT: I think a bigger jolt would
be to have the jobs lost and the houses cold.
QUESTION: Mr. President, earlier in your
campaign you said you intended to stress positive
themes. Yet, in your most recent campaign appearance
you concentrated on attacking Governor Carter. Tonight
you accused him of slandering the name of the United
States.
Do you think you have done all you can to
elevate the level of this campaign and can we expect
you to continue the way you have been in the last week or
so?
THE PRESIDENT: I think it is very positive to
talk about tax reductions, as I have recommended to the
American people that we increase the personal exemption
from $750 to $1,000. That is very positive and very
affirmative, and certainly in contrast to what Mr.
Carter wants, which is to increase taxes for people with
a medium or middle income level, which is about $14,000.
That is a distinct difference.
I am on the affirmative side. He is on the
negative side.
QUESTION: Mr. President?
THE PRESIDENT: Yes, Sarah? (Laughter)
You knew I would get around to you.
QUESTION: Thank you. When you were in
Congress you filed an income tax return for those
years saying that you had very little money left over.
Like a lot of us, you have about $5 left over for
spending money, I believe.
I wonder if you had included your golf fees
and your dues at Congressional and Burning Tree? I
believe you belonged to both of them, didn't you, and
they are very expensive. You must have been strapped
for funds. Who was helping you pay those large golfing
expenses? You golfed three to five times a week, I
believe.
THE PRESIDENT: First, that is an inaccurate
statement and you know it, Sarah. (Laughter) When you
are the Minority Leader of the House of Representatives
and on the job, you don't play golf three to five times a
week. I.am sorry you said that because you know that
is not true.
Now, let me just say that I paid for those golfing
dues or charges by check, and the committee and everybody
else, the Internal Revenue Service, the Joint Committee on
Internal Revenue Taxation, the FBI and now the Special
Prosecutor have all looked into those in depth and in
detail and they have given me a clean bill of health, and
I thank them for it.
MORE
Page 13
QUESTION: Mr. President, the Washington Post
had an article today which noted that Ford Motor Company
paid no taxes last year, paid no taxes the year before.
Do you think that is fair and what are you going to do
about it?
THE PRESIDENT: Well, I think it is proper to
remind the American people that those tax laws which are
on the statute books were written by the Democrats who
controlled the Congress for the last 22 years. If they
are wrong, it is the fault of the majority party in the
Congress.
QUESTION: What are you doing to change that?
THE PRESIDENT: We have made recommendations to
the Congress over the last year and a half for some modifica-
tions in the income tax legislation, but how that would
affect that particular company I can't give you
the answer.
QUESTION: Mr. President, in a recent speech --
I am afraid I don't recall where -- you cut a line from
your text in which you said something about the campaign
should not be just a quiz show to see who gets to live
in the White House for the next four years. And I assume
you stand by that advance text. Were you trying to
suggest that the debates have not been as effective as
they should have been, they have not kept up the level of
the campaign?
THE PRESIDENT: Ann, you know, you read the
advance text. I hope you are listening when I speak.
You know, on many occasions, I add a little here and I
take something else out. Oftentimes, I don't get those
texts until maybe a half, three-quarters of an hour before
I make the speech. So, I make the judgment myself. Those
are the recommendations of the speechwriters.
Now, I didn't think that was an appropriate
thing to say and, therefore, I didn't include it in the
text that I gave to the meeting that you referred to.
QUESTION: Let me put it this way: Do you think
the debates have helped keep up the level of the campaign?
THE PRESIDENT: I think the debates have been
very wholesome. I think they have been constructive.
I was the one that initiated the challenge. I believe
that they ought to be an institution in future Presidential
campaigns. I really believe that. And for that reason,
I didn't think that sentence in that prepared text which
I deleted reflected my own views.
MORE
Page 14
QUESTION: Mr. President, thank you. A little
while ago you gave us an idea of how you balance your
family budget, you kite checks. (Laughter)
THE PRESIDENT: Oh, no, I don't. No, I don't.
I have never been overdrawn, young lady.
QUESTION: The question is, then, how is it
that you are able to live on from $5 to $13 a week in cash
as has been reported by the Washington Post and the Wall
Street Journal in 1972?
THE PRESIDENT: I repeat that the Internal
Revenue Service, the FBI, the Joint Committee on Taxation,
two committees in the House and in the Senate, and an
overwhelming majority of the Members of the House and
Senate, believed the testimony. They went back and
checked every one of those income tax returns from 1973
back six years, and they gave me a clean bill of health.
Now, it has been reinvestigated for the fourth time by
the Special Prosecutor and he concurs with the previous
investigations.
Those are the facts of life. I write checks.
Thank you all. Thank you very much.
THE PRESS: Thank you.
END
(AT 8:00 P.M. EDT)
U.S. DEPARTMENT OF NOUSING * AND
THE SECRETARY OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON, D. C.. 20410
Determined to be Administrative Marking
CONFIDENTIAL
Date 5/14/81 By as
October 15, 1976
MEMORANDUM FOR: Honorable James M. Cannon
Executive Director
Domestic Council
The White House
Attached is a second draft of a proposed report
to the President from the Committee on Urban Development
and Neighborhood Revitalization. It has been substantially
revised to take into account the comments made by you as
well as other members of the Committee with the exception of
the comments made by the Office of Management and Budget,
which in essence suggested deletion of the specific recom-
mendations for action. As each change was made, my staff
cleared the change with the staff of the Committee member
whose comments prompted the change.
an Carla A. Hills
Attachment
FORD & GERALD LIBRARY
INTERIM REPORT
OF THE
PRESIDENT'S COMMITTEE ON
URBAN DEVELOPMENT AND NEIGHBORHOOD REVITALIZATION
OCTOBER 1976
MEMBERS OF THE PRESIDENT'S COMMITTEE ON
URBAN DEVELOPMENT AND NEIGHBORHOOD REVITALIZATION
Carla A. Hills, Chairman
Secretary
Department of Housing and Urban Development
John A. Knebel
James M. Cannon
Acting Secretary
Executive Director
Department of Agriculture
Domestic Council
The White House
Elliot L. Richardson
Secretary
James T. Lynn
Department of Commerce
Director
Office of Management and
F. David Mathews
Budget
Secretary
Department of Health, Education,
William J. Baroody, Jr.
and Welfare
Director
Office of Public Liaison
Edward H. Levi
The White House
Attorney General.
Department of Justice
Michael P. Balzano, Jr.
Director
William J. Usery, Jr.
ACTION
Secretary
Department of Labor
Samuel Martinez
Director
William T. Coleman, Jr.
Community Services
Secretary
Administration
Department of Transportation
Russell E. Train
William E. Simon
Administrator
Secretary
Environmental Protection
Department of Treasury
Agency
Mitchell P. Kobelinski
Administrator
Small Business Administration
I.
Introduction
President Ford created the President's Committee on
Urban Development and Neighborhood Revitalization on
June 30, 1976. The President stated in his announcement:
"The cities of this nation and the neighborhoods which
are their backbone today face increasingly difficult
problems of decay and decline." He pointed in particular
toward the nation's older cities, those which are forced
"to cope with the potentially devastating pressures of
a stagnant or declining economic base coupled with a
growing need for services which are becoming more and
more expensive."
The President's action to establish the Committee
was a response to leaders of neighborhood organizations
who came to the White House on May 5, 1976, for a
conference on "Ethnicity and Neighborhood Revitalization".
Participants in the conference recommended that the
President set up a task force within the Government to
review all major Federal programs that have an impact upon
urban and neighborhood life.
The backdrop for the Committee's mission is Federal
policy in the 1950's and 1960's. During those years,
in the older central cities, the Federal government's
emphasis was on massive "slum" clearance and new social
-2-
programs; at the metropolitan fringe, the emphasis was
on providing inducements for rapid growth. Sound
neighborhoods, which looked like slums to planners, were
leveled; their residents were scattered to adjacent stable
neighborhoods or the suburbs. Federally-financed freeways
ploughed through other neighborhoods, causing further
displacement and upheaval and providing convenient avenues
for suburban commuters. Freeways also provided a new
"Main Street" for expanding commercial and industrial
development outside the old city limits. Federal mortgage
insurance provided by the Federal Housing Administration
(FHA) and the Veterans Administration (VA) helped to spur
development and push metropolitan boundaries farther and
farther out.
In the middle, between downtowns cleared and rebuilt
by urban renewal and the new "outer city", lie the older
neighborhoods of our central cities and inner suburbs.
These are the places which have historically provided homes
and a sense of community for millions of Americans who came
from foreign countries and rural areas to seek opportunities
in our urban centers.
As Monsignor Geno C. Baroni, President of the National
Center for Urban Ethnic Affairs, has said: "[T]he richness
of any city is epitomized by healthy neighborhoods, a sense
of place in which the human dimensions of family, friendship
and tradition can be maximized
"
-3-
"It is not an exaggeration to say that historically
our cities have offered unequaled physical, social and
cultural richness. Even today, despite the staggering
difficulties under which they labor, the urban areas of
our country retain the potential for offering that wealth
and there is growing agreement that a major national effort
is in order so that such potential may be restored and
utilized."
The long-range goal of the President's Committee is
to shape policies and programs which make the most of the
economic and social resources of the cities, recognizing
the unique assets of the cities' diverse neighborhoods
and people. To achieve that goal will take time: the
problems are profound, the issues complex. Instant solutions
do not leap out from analysis.
This interim report deals primarily with Federal
programs; however, we recognize that action by State
and local governments and the private sector are also
critically important. Moreover, certain major issues,
such as welfare reform and reform of the criminal justice
system, which the Committee believes are important to
urban development and neighborhood revitalization, are
being considered in other forums and are not specifically
addressed in this interim report.
-4-
The report also does not cover the same ground as
the President's 1976 Report on National Growth and
Development submitted in February, a report which compiles
and analyzes a large volume of information relevant to
cities. Nor do we review here the massive amount of data
gathered by such agencies as the Advisory Commission on
Intergovernmental Relations, or by research centers such
as the Urban Institute and the Brookings Institution,
although their research and analyses have been helpful
to the Committee.
Nor is this report intended to serve as a statement
of a total urban strategy for this Administration.
Rather, the report is intended as the preface to what
must be a longer-range agenda. Its purpose is to sum up
the Committee's initial observations, to assess some of
the Federal policies and programs which most directly
impact on cities, to make preliminary recommendations
based on those observations and assessments, and finally,
to suggest an agenda for moving toward national urban
policy reform.
In looking ahead, the Committee recognizes the need
to stay generally within existing funding levels. Sharp
increases in Federal spending for new programs would mean
one of two things: higher taxes on individuals and the
job-producing private sector, or a new inflationary spiral
-5-
caused by a huge Federal deficit. A thriving national
economy, with increasing employment and decreasing inflation,
will do more for our cities and neighborhoods than a panoply
of new programs.
Just as important, we do not know whether substantial
additional Federal expenditures for the cities would bring
any significant long-term improvement in their condition.
The tens of billions of dollars now expended each year by
the Federal government for the cities are spent in a tangled
and often contradictory fashion. Properly targeted, in
accordance with locally conceived long-range plans, these
monies may prove to be quite ample.
Accordingly, a massive expansion of resources for
central cities is neither feasible nor wise at this time.
Instead, there should be a better targeting of existing
resources. Although the flow of Government spending may
need to be changed, such decisions cannot be made until
the Committee has completed its task.
II. Summary of The Committee's Observations
The President's charge to the Committee directed us
"to seek the perspectives of local officials and neighborhood
groups on Federal programs which affect them," and carrying
out that charge has been an important part of the work of
the Committee during its first months of operation.
-6-
The Committee also has compiled and begun to analyze
information on the Federal programs which have an impact
on cities and neighborhoods, and there have been numerous
ad hoc meetings between Committee principals, as well as
at the staff level, to explore opportunities for improved
interagency cooperation. For example, Secretary Coleman
(Transportation), Secretary Hills (Housing and Urban
Development), and Secretary Richardson (Commerce) are
discussing possibilities for improving the focus of their
departments' programs in five cities (Buffalo, Atlanta,
Baltimore, Washington, D.C., and Miami) where the Department
of Transportation is committing over $5 billion for new
mass transit development.
Between August 2 and September 24, individual members
of the Committee visited the following cities: Boston,
Cleveland, Baltimore, Hartford, Newark, San Diego, New Orleans,
Pittsburgh, Oklahoma City, and Springfield, Illinois. The
purpose of these visits was neither to defend old policies
nor to unveil new ones, but rather to listen to what people
had to say about their cities and neighborhoods, to see what
they wanted to show us, and finally, to discuss with them
how the Federal government's efforts might more effectively
be directed.
-7-
The city visits provided members of the Committee
direct contact with mayors, key city officials, neighborhood
leaders, businessmen, and individual citizens. We talked
at length with mayors about their struggles to make ends
meet, about State constitutional and statutory restrictions
on city powers, about their efforts to work with State
governments to achieve greater understanding and responsiveness
to city problems, and about their frustrations in dealing
with the multitude of Federal programs--each with its own
requirements and regulations, and many outside of their
management control entirely.
The Committee also visited neighborhoods and talked
with neighborhood leaders about their efforts to fight decay
and restore stability and vitality, about their problems
with City Hall, about Federal programs and tax policy which
seem to be hindering their efforts, about "redlining", and
about crime and racial tensions which threaten their
neighborhoods.
We talked with civic leaders and businessmen concerned
about the viability of central city investments, about the
availability of good housing and healthy neighborhoods for
workers, about traffic congestion and mass transit and about
the quality and growing costs of public services. All of
these discussions provided the Committee additional insights
into the complex long-term problems with which city leaders
and citizens must cope.
-8-
At the heart of the problem facing the older central
cities and inner suburbs in recent decades has been their
inability to compete successfully for the people and
investments they need to maintain an adequate tax base to
support needed public services. Nationwide, employment
grew in the suburbs by 3.2 percent between 1973 and 1975,
and declined in the central cities by 3.7 percent. More
importantly, there has been a general shift of population
and development from the Northeast and North Central States
to the South and West. More than 80 percent of the nation's
population growth since 1970 has occurred in the South and
West. Thus, some cities face problems that are much more
severe than others. Among the eastern and northern cities
visited by the Committee, for example, Baltimore lost 7
percent of its population, Pittsburgh lost 21 percent, and
Cleveland lost 23 percent since 1960. Total employment has
decreased by almost 7 percent in Boston, by 10 percent in
Hartford, and by almost 21 percent in Newark.
Typically, central city population losses have been
disproportionately high among middle and upper income groups,
resulting in an even larger proportion of poor among those
that remain. For example, the number of single parent and
elderly households has increased significantly in the cities,
and many of these households have only marginal incomes.
-9-
Between 1970 and 1974, the income of families moving out
of central cities throughout the nation averaged $1,034
more per family than the income of families moving in.
The movement of jobs and wage earners out of the
central city has produced a corresponding erosion in its
tax base, leaving fewer resources to pay for needed public
services. As the cost of government in older cities has
been going up, due in part to inflationary pressures, the
property tax base which generates most local revenue has
not kept pace. For example, between 1965 and 1973,
Baltimore expenditures grew by 172 percent, but its assessed
value increased by only 11 percent. In some cities, such as
Newark and Cleveland, there has been an actual decline in
assessed value. The fiscal position of many cities worsened
during the recent recession, and the older cities were hit
especially hard by the resulting unemployment and reduced
revenues, forcing painful budget cuts and public employee
layoffs.
Complicating the fiscal and economic plight of central
cities is a tangle of social problems which threaten to
stifle the civic morale of many neighborhoods. For example,
racial discrimination in jobs and housing persists, closing
off opportunities for improvement to those located in
central city ghettos. At the neighborhood level, tension
between racial and ethnic groups can cause rapid population
-10-
turnover destroying the fabric of community life and the
stability of once sound neighborhoods.
Crime is another intractable problem plaguing the
cities. The national crime rate is about 41 major crimes
per 1,000 residents, but cities such as Baltimore, Boston,
and Newark have about double the national rate. Crime
and the fear of crime are having a devastating impact on
neighborhoods which could otherwise remain stable or attract
middle-income people back into the city.
Education is another major concern. Cross-city busing,
violence in and around schools, and decline in educational
quality have put center cities and older suburbs at a
disadvantage relative to suburban schools, which are viewed
as safer and of better quality. Widespread reliance on
private schools in many large cities raises the cost of
living for middle-class families who might otherwise choose
to live there.
In spite of the problems described by the hundreds of
officials and neighborhood residents with whom we talked,
members of the Committee did not leave the cities with a
litany of despair ringing in their ears.
Mayors showed us exciting examples of thriving downtown
redevelopment including new parks and successful commercial
enterprises. In Baltimore, a new convention center complex
-11-
provides an important anchor for the downtown commercial
area, and complements other housing and renewal efforts
centered around the thriving Baltimore harbor. The Gateway
Center in Newark offers stores, restaurants and excellent
new office space--all convenient to bus and'rail
transportation serving not only the metropolitan area but
the entire Eastern Seaboard. Boston's new Government
Center adds vitality to its downtown area, as do nearby
renovations of historic Quincy and Faneuil Hall Markets.
Oklahoma City has just developed a long-term growth
and development plan, and made some tough decisions in
the process. It is overhauling its regulatory system to
control growth, and linking this system with economic
incentives and better planned uses of the city's spending
capacity.
In their visits to neighborhoods, members of the
Committee saw additional signs of progress and hope. In
many cities, they visited.stable and attractive neighborhoods
which have provided vibrant community life, sometimes for
generations, and show little or no sign of decline. Some
of these are stable ethnic neighborhoods of long standing
such as Little Italy in Baltimore, and some are racially
integrated, such as the Garden District in New Orleans.
These are the neighborhoods which must be preserved and
which can be the foundation of future recovery.
-12-
The Committee also visited neighborhoods where
significant revitalization is taking place--not just upper-
income enclaves such as Beacon Hill in Boston and Bolton
Hill in Baltimore. Neighborhoods proving to be particularly
attractive are frequently located near downtown offices,
and near universities, medical complexes, and other
institutions which require a skilled or professional work
force. Many of these neighborhoods, such as Stirling Street
in Baltimore, Manchester in Pittsburgh, and the South End
in Boston, contain historic or architecturally stunning
buildings which appeal to young professionals and others
attracted to city living.
The Committee saw signs of hope and tenacity even
in the more troubled neighborhoods where outmigration,
housing abandonment, commercial strip decline and racial
tensions present an enormous and complex challenge.
In Hartford, for example, thirteen neighborhood
associations have banded together into the Hartford
Neighborhood Coalition in cooperation with the Greater
Hartford Process, Inc., an organization of Hartford's
business leadership. Secretary Richardson met with the
Coalition and heard about efforts to revive commercial
strips and to stabilize neighborhoods, about cooperative
efforts between black and Puerto Rican businessmen, and
about progress toward establishing an Urban Reinvestment
Task Force program serving three Hartford neighborhoods.
-13-
In Baltimore, Secretary Hills met with the Executive
Director and the President of the South East Community
Organization, which is working to encourage homeownership
and neighborhood stabilization in a predominantly white,
working class community of about 78,000 persons. A
particularly important SECO objective is to improve the
economic base of South East Baltimore, and it has joined
with the East Baltimore Community Corporation, a black
community organization, to form a joint community development
corporation.
The Committee believes +hat these signs of progress
provide support for the hope that over the longer term some
economic and demographic trends may be shifting toward the
cities' favor.
For example, as the cost of new housing, gasoline,
and other energy sources goes up, existing housing in
central cities becomes a bargain in terms of basic living
space, quality of construction, and location. A well-
maintained, single-family home can be bought for under
$20,000 in most large, older cities, and a home needing
upgrading can cost much less. The market for these homes
is often weak for a variety of reasons, including concern
for personal safety, and the quality of public schools
and other public services. However, the number of young
-14-
adult households without children has increased sharply
in recent years and will continue to increase. Since
1970, such households account for 58 percent of the total
increase in new households. It is this group of households
which may turn increasingly to urban neighborhoods as their
preferred living environment. Between 1970 and 1973, young
people, ages 20 to 25, made up the largest group of in-
migrants to urban areas. Such a trend could contribute
significantly both to preserving older housing and to
strengthening the urban tax base.
Another potential asset of older cities is the
availability of large tracts of land which are either
vacant or occupied by obsolete facilities such as railroad
yards. This land typically is already served by roads,
sewers, and utilities, and therefore offers good
opportunities for eventual development or redevelopment.
It would be naive to expect instant productive use of this
resource, but its potential value in future decades should
not be dismissed. The rising cost of new infrastructure
and energy may once again give a competitive edge to central
cities for some types of industrial, commercial and
residential development.
Finally, the slowing growth and even population losses
in some urban areas are not entirely a cause for despair.
In the long run, slowed growth or population declines, if
-15-
accompanied by an increasingly heterogenous urban
population, could decrease demands on the cities for
expensive public services, reduce congestion and improve
the quality of urban life.
In summary, the Committee found that the problems
of cities and neighborhoods are severe, but that their
prospects are hopeful. The next section of this interim
report will address briefly the role of the Federal
government in the cities.
III. The Federal Government and the Cities
The Federal government has been deeply involved in
the shaping of our cities and metropolitan areas.
Federal policies, particularly since World War II, have
greatly contributed to the rapid expansion of metropolitan
boundaries, through construction of the interstate highway
system, and generous tax incentives which favored the
building of new housing and commercial development rather
than conserving the old. Even when the thrust was toward
redeveloping blighted areas of the cities, the first
response was urban renewal: tear down the slums and
replace them with new buildings.
During the 1960's, the older central cities were
being engulfed by problems of continuing deterioration,
middle-income population loss, economic decline, and
profound social stress. The Federal response was an
-16-
ambitious but frenetic outpouring of new Federal programs,
targeted at narrow and specific aspects of the urban
predicament.
Today, an estimated 80 percent of Federal assistance
to State and local governments is still delivered through
categorical grant programs. There are over 1000 such
programs, administered by over 50 agencies, each with its
own set of administrative guidelines designed to accomplish
specific operational or service responsibilities. The
Committee found there were complex, varying application
and administrative processes and narrow, restrictive
program guidelines. This morass of conflicting requirements
is more likely to prevent than to assure effective use of
Federal resources at the State or local level. Many of
these programs also by-pass State and local elected
officials, eliminating a locus of coordination and
accountability for success or failure.
As local leaders, both public and private, confront
their problems, they find themselves in a double bind.
First, they have very limited influence on the tax and
other incentives which are pulling people and jobs out
of their communities; and second, they have limited
management control over a large share of the very resources
intended by Washington to help them.
-17-
The Committee found, however, that cities can begin
to attack their problems much more effectively when
substantial Federal assistance is provided on a flexible
basis. Mayors were unanimous in their enthusiastic
support for the General Revenue Sharing Program, which
has helped them maintain vital services and stave off
debilitating tax increases. In Newark, for example, where
over 60 percent of the land is occupied by tax-exempt
government buildings, public housing, hospitals, transportation
facilities, and educational institutions, the city was able
to reduce an extremely high property tax rate.
Nationally, more than $6 billion a year in General
Revenue Sharing funds have been funneled to over 38,000
units of State and local government through an automatic
formula that frees the recipients of cumbersome application
requirements and administrative expense. This program
combines the efficiency and accountability that comes from
allowing local governments to determine their own
priorities, and respond to their own individual needs.
Mayors and local officials also say their cities and
neighborhoods have benefitted from the increased flexibility
provided by two major block grant programs- the Community
Development Block Grant Program (CDBG), operated by HUD,
and the Comprehensive Employment and Training Act (CETA),
operated by the Department of Labor. These programs
-18-
replaced about 24 categorical programs, and provided funds
for broad purposes on a formula basis relatively free of
onerous Federal requirements.
The CETA program has transferred to local and State
elected officials the resources to develop and implement
a comprehensive program for employment opportunities and
job training for unemployed, economically disadvantaged
and underemployed persons. CETA consolidated 17 special
purpose programs which had been funded through a bewildering
array of general purpose governments, community action
agencies, labor unions, private corporations and nonprofit
contractors, allowing local elected officials little
leverage for coordinating such programs or using them in
combination with other Federal programs.
Under the Title I CETA job training program, about
$3.5 billion will be spent in FY 1976 and 1977, permitting
445 city, county, and State prime sponsors to serve in
FY 1977 an estimated 1.3 million economically disadvantaged,
unemployed, and underemployed persons. 7 The CETA public
service employment programs (Title II and Title VI) will
provide a total of $2.5 billion to support 310,000 public
service jobs by the end of 1976 in areas of high unemployment.
The Community Development Block Grant Program, signed
into law by President Ford in August of 1974, consolidated
-19-
seven categorical programs for community development into
a single block grant. Over $3 billion a year goes to
communities across the country--double the funds provided
under the categorical programs in 1970. Local officials
have wide latitude in setting local priorities and deciding
what kinds of programs they want to fund.
City officials have also observed a substantial
reduction in red tape in the CDBG program. It has only
about 120 pages of regulations, compared to about 2600
under the categoricals. It requires only one application
each year, compared to an average of 5 per year for cities
previously. Applications average about 40 to 50 pages,
compared to 1400 under the previous programs.
The popularity of CDBG among local officials rests
on its successful use by local governments in creative
neighborhood preservation strategies. For example, the
City of Baltimore is allocating $800,000 from its block
grant to reduce the interest rate on rehabilitation loans,
using a sliding scale of from zero to seven percent,
depending on family income.
Boston and Newark are using block grant funds to make
grants to homeowners who fix up their property. These
grants take the form of a cash rebate for a portion of
the cost of improvement. In Newark's Cleveland Hill
-20-
neighborhood, Secretary Hills (HUD) and Secretary Coleman
(DOT) visited a family that is improving its home with
new gutters, porch replacement, a new electrical system,
bathroom renovation, and painting. These improvements
are valued at $7,633; after they are completed, the city
will provide the family with a $2,030 cash rebate.
Secretaries Hills and Coleman also met with residents of
Newark's Roseville and Ironbound neighborhoods who praised
the program for helping them improve their homes and
communities.
In New Orleans, CDBG funds have been combined with
city funds and general revenue sharing funds to build the
Louis Armstrong Park and Recreation Center which will
complement the adjacent commercial and tourist district.
Mayor Landrieu of New Orleans has also established a joint
planning office to administer the CDBG, CETA, and Department
of Commerce economic development programs SO that community
development projects can be tied into job training for the
unemployed and strengthening the city's' economic base.
Because the Committee recognizes that some communities
have had more difficulty in linking their Federal block
grants, the four agencies with major block grant programs
have begun to assess the constraints to such linkages.
-21-
One of the key issues the Committee discussed with
neighborhood groups was whether the Federal government
should require local governments to allocate block grant
funds to the neighborhood level. In the Baltimore and
Hartford neighborhood revitalization efforts described
earlier, city governments did allocate CDBG funds directly
to neighborhood organizations SO that neighborhood leaders
and residents could determine their own priorities for
revitalization. Oklahoma City, in particular, seems to
have been successful at involving its neighborhoods in
planning for the community's growth and development.
The fact that the block grant provides annually to the
city a publicly known amount of flexible funds provides
the opportunity for neighborhood groups to take their case
for support to City Hall.
Reports to HUD indicate this is occurring in many
other cities as well. Since money is necessarily limited
and needs are great, there is not always consensus and
harmony between the neighborhoods and City Hall. Some
neighborhood people would like to see direct or mandated
funding of neighborhood groups by the Federal government.
But the preponderance of opinion is that the block grant
approach is preferable because of its certainty and
flexibility. There is growing recognition that cutting the
-22-
pie should be the mayor's job--not a Federal bureaucrat's--
and the mayor who ignores well-organized and motivated
neighborhoods can and should expect retribution at the polls.
Federal grant programs cannot in themselves solve the
problems of the cities, local officials emphasized in
discussions with Committee members. Longer-term economic
development is essential, and this involves the effective
combination of both public and private efforts. A number
of Federal initiatives is being used to achieve such
public-private action.
The programs of the Economic Development Administration
(EDA) have demonstrated a wide variety of approaches to
economic stabilization and job creation in urban areas.
In a number of cities, abandoned, underutilized or blighted
industrial areas have been upgraded to encourage firms to
remain in the city and to attract new firms. Such industrial
areas are often adjacent to residential neighborhoods and
afford residents permanent private sector jobs.
In some cases the location or expansion of firms has
been aided by EDA business development loans and loan
guarantees. EDA industrial redevelopment funds also have
been used to upgrade and replace community infrastructure,
including industrial access roads, building site preparation,
sewer and water lines, streets, sidewalks and street lights.
-23-
Another focus of recent Federal action has been the
revitalization of neighborhood commercial strips. A
healthy commercial area not only has a positive impact on
the economy of the neighborhood, but also can serve as a
catalyst for more general neighborhood improvements to
housing and public services. Neighborhood businesses
provide employment opportunities and income for residents;
help to generate a supply of capital to the area; and
provide a convenient place for residents to purchase
necessary goods and services. A program to further this
type of neighborhood commercial revitalization requires a
strong local merchants' association, neighborhood support,
working capital and rehabilitation assistance to individual
businessmen. EDA is presently carrying out a demonstration
program using technical assistance funds to help neighborhoods
develop local programs which employ EDA business loans and
loan guarantees for such revitalization activities. As part
of this program, the Office of Minority Business Enterprise
is providing technical assistance to help minority
entrepreneurs to form such local business associations and
to develop programs.
The Small Business Administration (SBA) is another
Federal agency which is stepping up its support for commercial
-24-
and industrial development aimed at revitalizing
neighborhoods. For example, the SBA has taken its Local
Development Company loan program--rarely used in large
cities until recently--and is directing it toward
neighborhood-based economic improvement. SBA Administrator
Kobelinski is currently working with a selected group of
target cities to involve neighborhood organizations, local
officials, and financial institutions in private sector
development.
Another economic development initiative designed to
create more jobs, mainly in the private sector, is a new
demonstration program jointly funded by the Departments
of Commerce, Labor, and Housing and Urban Development.
This program will help cities coordinate the use of community
development, economic development, and employment and
training funds, together with strong private sector
involvement and cooperation, to strengthen local economies.
The three Departments have made demonstration grants which
are expected to total $4.8 million over two years to the
following ten cities: Albuquerque, Baltimore, Bridgeport,
Buffalo, Chicago, Dayton, Kansas City, Oakland, Philadelphia,
and Pittsburgh.
Central business district improvement is the
objective of innovative transit projects sponsored by the
-25-
Department of Transportation. DOT is funding transit
malls in several cities in which major shopping streets
are closed to auto traffic, and the street space reserved
for pedestrians and shuttle bus systems. Some of these
grant funds are being used for special paving, lighting
and street furniture which supports the mall concept.
Communities throughout the country are also using
Federally-initiated demonstration programs to help
stimulate and support local efforts to improve and
rehabilitate housing in neighborhoods threatened by
deterioration. The Committee found that the Urban
Reinvestment Task Force has been an effective local tool
for counteracting disinvestment trends in potentially
sound, but endangered neighborhoods. The Task Force,
which is a joint effort by HUD and the Federal Home
Loan Bank Board, provides revolving loan funds, technical
assistance and other financial aid to partnerships of
local residents, financial institutions and local
governments which have developed promising strategies to
arrest early neighborhood decline. Over 30 cities are
now involved in programs sponsored by the Task Force.
HUD is increasing its support for the Task Force from
$2.5 million in FY 76 to $4.5 million in FY 77, so that
the Task Force's programs can be expanded to a total of
-26-
55 cities. Of the cities visited by members of the
Committee, Boston, Cleveland, and Baltimore have operating
Urban Reinvestment programs, as well as Pittsburgh, whose
local innovation served as the national model. Newark,
New Orleans, and Hartford are commencing programs.
The Urban Homesteading program, administered by HUD,
also helps to revitalize neighborhoods and recapture
deteriorating and abandoned housing stock. Twenty-three
cities selected in a national competition in 1975 are now
using HUD-acquired properties and subsidized rehabilitation
loans in coordinated neighborhood preservation programs.
Urban Homesteading represents a $65 million Federal/local
investment: HUD is awarding $13 million in rehabilitation
loans, and $11.25 million in properties to the participating
cities, and the cities are spending more than $40 million
of their own funds to restore and recycle selected ailing
neighborhoods.
The Committee recognizes that demonstration programs
are small in scale relative to the problems they address.
Yet they can provide models for achieving substantial
progress, and can point the way toward program changes
which will benefit cities and neighborhoods across the
nation.
-27-
IV. Defining the Federal Role
The Committee believes that national policy on urban
development and neighborhood revitalization must be based
on certain basic principles concerning the proper role of
the Federal government. We are in agreement on those
basic principles, as well as on a set of preliminary
recommendations for action, and an agenda for future study.
The principles which the Committee believes should
govern the Federal role in urban affairs are as follows:
A.
The Federal government should establish, as a
national priority, the preservation of the nation's
existing stock of housing, the restoration of the
vitality of its urban neighborhoods, and the promotion
of healthy economic development for its central cities.
The nation has entered a period of scarce resources
and simply cannot continue to absorb either the social
or economic costs of throwing away whole neighborhoods.
Accordingly, the preservation of our nation's cities and
neighborhoods should be added to other national policy
objectives, such as decent housing, environmental protection,
and economic growth.
Since Federal policy is only one of the factors which
will determine the future of our urban centers, that policy
must envision a partnership with the private sector and with
State and local governments
-28-
The Committee believes that a lasting solution to
the urban crisis cannot rely on massive Federal funds for
temporary public service jobs or on underwriting existing
municipal debt, insulating local governments from the
responsibility to weigh carefully local needs. Rather,
the Committee believes that the Federal funds should be
funneled to help cities build and modernize their capital
infrastructure and in so doing expand jobs for construction
workers, the poor and unemployed as well as to provide new
opportunities for small business, including minority
contractors.
B.
The Federal government should target Federal
resources to areas of greatest need, recognizing the
disproportionate social and economic burdens borne by
individual communities or classes of citizens.
The Federal government has a continuing responsibility
to back up its policy commitments with financial assistance
on a scale large enough to make an impact. But public
funds are limited, and they should be directed to the areas
of greatest need. Generally, formula allocations should
replace grantsmanship to assure fairness in the distribution
of Federal funds.
-29-
C.
The delivery of Federal assistance to urban
areas should be made more efficient by adhering to
sound management principles.
The delivery of Federal assistance to the cities
should be improved by strengthening the decision-making
roles of general purpose State and local governments.
The present Federal delivery mechanism is frustrating to
public officials at all levels of government and baffling
to citizens at the neighborhood levels who are searching
for ways to improve their communities. The duplicative
and restrictive requirements of current Federal categorical
programs diminish both their effectiveness in meeting local
problems and the capacity of State and local government to
link Federal, local, and private resources in dealing with
the complex problems of urban areas. Based on its contacts
with public officials and neighborhood groups, the Committee
believes that the following principles, while not universally
applicable to all situations or programs, should generally
guide the delivery of Federal assistance.
1. Preference for Block Grants
The Committee believes that the chief elected officials
of State and local governments, working with their citizens,
should have more discretion to plan and manage their own
strategies to meet national objectives, rather than being
burdened by Federal dictates often ill-fitted to their
communities.
-30-
Many Federal categorical grants should be simplified
and consolidated into block grants which afford greater
flexibility to State and local government. For most
service and developmental activities, State and local
governments should be able to make decisions on the
specific services to be funded within broad Federal
guidelines as to the purposes and beneficiaries intended
to be served. Block grants should be flexible SO that
the recipients can adapt Federal resources to the needs
and conditions of their communities and can maximize the
linkage of Federal resources and other local, private,
and public resources.
2.
Electoral Accountability and Citizen Participation
Accountability for the use of Federal block grant funds
should be clearly fixed, usually in the local or State chief
elected official. However, those officials should seek the
participation of citizens in the planning and management of
Federal funds. Citizens in affected neighborhoods, in
particular, should have a voice and the impact of Federally-
funded programs on their neighborhoods should be carefully
considered. In appropriate cases, neighborhood organizations
should play a direct role in program planning and management.
-31-
The result should be an expansion of meaningful
participation in the use of Federal resources, a
strengthening of the State and local political process,
and a reduced ability of narrow special interests to
dominate Federal program decisions.
3.
Preserving Federally-Guaranteed Rights
Although block grants are intended to afford the
widest possible local discretion, national policy requires
that the rights and interests of minority citizens be
protected. Therefore, Federal block grant programs should
ensure that the needs of minority groups are considered
in the allocation of funds and that minority rights are
guaranteed in the management of Federally-funded programs.
4.
Support for Local Management and Planning Capacity
The Federal government should help to ensure that local
planning and management capacity exists to implement
additional block grant programs. The Committee believes
that present block grant funds are generally being managed
effectively. However, State and local governments may need
further planning and management capability as new block
grant programs are created. The Federal government should
help to build that capability.
-32-
5.
Facilitating Program Linkages
The Federal government should increase the
opportunities for State and local government to use
different Federal programs in a flexible and coordinated
manner. The difficulty of creatively linking the many
existing categorical programs is one of the major
problems of such grants, and block grants must be
designed to avoid similar problems. In some cases, this
will mean the establishment of new cooperative
relationships between States and localities.
Similarly, it is essential that both State and local
recipients of block grants are encouraged to work
together in making program decisions involving areawide
problems. Decisions involving transportation facilities,
pollution control, economic development and housing will
have major regional impacts. The Federal government
should design its programs to encourage consideration of
such regional effects and to promote effective
intergovernmental cooperation.
6.
Research and Development
The Federal government should have a coordinated
program of research and demonstrations aimed at finding
out which approaches to solving problems work best. In
addition to sponsoring its own research and demonstrations,
-33-
the Federal government should work with communities to
identify promising innovations initiated at the local
level. The results both of Federally-sponsored and
locally initiated demonstrations should then be widely
distributed so that communities across the nation can
build on successful techniques and avoid mistakes.
V.
Recommendations
1.
The Committee recommends the following steps
towards the consolidation of existing categorical
programs into block grants.
In city after city, Committee members were told
about and saw evidence of the success of the present
Federal block grant programs. For example, community
development block grants, in their first two years, have
proven to be a far more effective means of delivering
Federal aid than the séven narrow categorical programs
they replaced. The Committee recommends building on
this demonstrated success by consolidating other Federal
aid programs into functional block grants. In general,
the Committee believes that such program consolidation
will substantially increase the effectiveness of the
Federal funds now being expended.
-34-
The following list of possible functional block
grant proposals is intended to be suggestive rather than
definitive-- a starting point in giving more control over
public funds to State and local governments and to the
individual taxpayer.
a.
Housing Assistance Block Grants
Several existing housing subsidy programs could be
consolidated into a housing assistance block grant,
providing cities and States with formula-determined
allocations of long-term funding for housing assistance.
Such a consolidation would reduce the complex Federal
regulations and "red tape" that now attend the various
Federal housing programs. Responsibility and accountability
for the delivery of housing assistance would be lodged where
it belongs--with local and State chief elected officials.
Mayors could develop their own innovative housing programs
suited to local market conditions and local needs as well as
better coordinate housing assistance with other community
development activities.
b.
Urban Surface Transportation Block Grants
Several current urban highway and transit assistance
programs also could be consolidated into block grants,
allocated on a formula basis to urbanized areas. These
-35-
block grants could be available for a broad range of
activities including planning, resurfacing, and rehabilitating
roads; acquiring, constructing, rehabilitating and maintaining
transit facilities; and transit operating subsidies (the
latter category perhaps being limited to some percentage of
an area's allocation each year). Of course, the block grants
would not affect funding for the completion of the Interstate
Highway System or the Rural Highway System.
C.
Health Services Block Grants
Because Congress has not yet acted on the Administration's
recent health block grant proposal, the Committee recommends
resubmittal of health services block grant legislation to the
next Congress.
d.
Education Block Grants
To improve the quality of education in urban neighborhoods,
the Committee recommends resubmitting to the Congress the
education block grant proposed last year which would consolidate
several categorical assistance programs into a single block
grant.
2.
The Committee recommends a comprehensive review
of present Federal aid formulas to determine their impact
on "declining" cities and the States in which they are
located.
For example, the Administration has already proposed
raising the per capita ceiling on general revenue sharing
-36-
grants to localities from 145% to 175% of the State's
average per capita amount. This formula revision would
direct more Federal Revenue Sharing funds to a number
of large cities: Philadelphia ($10.6 million), Detroit
($8.2 million), Baltimore ($4.4 million), Boston
($4.4 million), St. Louis ($2.9 million).
Similarly, in its coming Report to the Congress,
HUD should consider the extent to which the community
development block grant funding formula recognizes the
relative needs of different cities, particularly older
declining cities. The Department should recommend
changes to the formula based on this analysis. Among
the criteria that might make the formula a better measure
of need are the age of a city's housing stock and whether
it is losing non-poverty population. Similar changes
may be warranted for formulas in other programs providing
funds for physical or economic development.
The extent to which any of these formula revisions
can be accommodated within approximately the same program
funding currently provided should be determined on a
program-by-program basis after further analysis.
-37-
3.
The Committee recommends a general review of
Federal tax policy with a view to providing greater
incentives for the preservation and rehabilitation of
homes and buildings.
As a general principle, the tax system should not
make maintenance or rehabilitation of existing housing
less attractive than investment in newly constructed
properties. Because the tax system is SO complex, however,
the ramifications of this principle may be difficult to
determine. Moreover, tax incentives, because of their
impact on the Federal budget, require the same scrutiny
as new spending programs.
Based on its work so far, the Committee believes the
following specific areas of Federal tax policy hold the
most promise for encouraging the preservation and
revitalization of cities and neighborhoods.
a.
The Committee recommends that the tax provisions
governing depreciation be reviewed to determine their
effect on investment in the rehabilitation and maintenance
of existing structures in central cities.
The Committee's preliminary review indicates that the
current rules for calculating depreciation allowances under
the income tax may favor new construction over the maintenance
of existing structures, with negative consequences for central
cities. The desirability of review is suggested by the
following brief summary of present provisions.
-38-
The tax code allows accelerated depreciation on
various property investments. Accelerated depreciation
allows larger tax deductions for depreciation to be taken
in the early life of the investment. The resulting
postponement of tax liability amounts to an unsecured
interest-free loan from the Treasury. Generally,
investors in newly constructed residential properties may
take a faster rate of accelerated depreciation than
second and subsequent purchasers of existing residential
properties. Only straight-line depreciation (non-accelerated)
is allowed to the purchaser of an existing structure with
less than 20 years of remaining useful life. A still
greater difference in tax depreciation treatment exists
between purchasers of newly constructed and existing non-
residential property, with the former allowed to use
accelerated depreciation and the latter only straight-line
depreciation. By altering the owner's cash flow, these
rules affect the timing and location of new construction,
the rate of turnover of ownership, and, especially, the
incentive to maintain existing structures to prolong their
lives. To the extent that tax policy makes investment in
new construction more attractive than the maintenance or
rehabilitation of existing structures, that policy may
exacerbate the decline of central cities by encouraging
businesses and people to locate in newer structures in
outlying areas.
-39-
b.
The Committee recommends a detailed study of
tax policies to encourage. homeowners to invest in the
preservation and improvement of older housing.
The revitalization of an urban area depends on the
preservation and rehabilitation of its stock of existing
structures. The Committee is particularly concerned
about the older homes in urban neighborhoods owned by
lower and middle income families. Federal, State and
local tax policies can affect significantly private
decisions to invest in the maintenance and rehabilitation
of these structures. The tax laws and their inter-
relationships are complex, but tax policies to encourage
maintenance and renovation of the existing housing stock
deserve further study.
C.
The Committee recommends that tax incentives
for business investment in areas of chronically high
unemployment, along the lines already proposed by
President Ford, be explored.
To revitalize our older declining cities, more jobs
must be generated. Many urban areas, with high unemployment
levels, require new incentives to attract business location
and expansion. Such incentives could be made available
through the tax system, with the provision of more liberal
depreciation deductions for new plant construction, expansion
or rehabilitation in jurisdictions with unemployment rates
-40-
consistently above 8 percent. President Ford presented
a similar, but more broadly focused proposal in his Budget
for Fiscal Year 1977. Alternative incentives which
should be considered include an additional investment tax
credit for business investment in declining areas. The
tax credit could be progressive with respect to an area's
unemployment rate, with higher tax credits in areas with
higher unemployment rates.
4.
The Committee recommends that the public and
private sectors seek new ways to increase employment
opportunities for inner-city youths.
The labor force is now swollen by a disproportionate
number of young adults born during the post World War II
baby boom. In 1974, more than 2.5 million young people
between the ages of 16 and 24, half of all unemployed, were
seeking work and unable to find it. Among black teenagers
the unemployment rate is more than five times the national
average. These young unskilled workers seeking employment
are located disproportionately in our central cities. As
industries providing jobs for unskilled labor have
increasingly deserted the central cities of the North Central
and Northeastern States, the problem of unemployment in
those areas has become even more serious.
-41-
As the growth in the labor force tapers off in coming
years, the problem of unemployment among these entry level
workers will diminish. In the interim, new ways should be
developed to mitigate the costs this problem imposes on
our urban centers. The magnitude of Federal spending on
employment and training in general and on youth employment
in particular (for example, over $1.2 billion in CETA
programs serving youth) attests to the recognition this
problem is receiving, but several new avenues of
experimentation should be explored.
First, the Department of Labor's current demonstration
of the use of relocation information and assistance as an
adjunct to job training should be carefully evaluated to
determine its impact on high unemployment areas and
expanded if justified by the results.
Second, consideration should be given to ways of
facilitating the transportation of inner-city residents
to new jobs in the suburbs.
Third, further careful study should be given to
mechanisms, such as Defense Manpower Policy #4, for
harnessing Federal procurement policies to provide jobs
in high unemployment areas.
-42-
Finally, a high priority should be given to developing
approaches for encouraging greater private sector
participation in the economic redevelopment of inner-cities.
The recent report of the municipal task force of the
Business Roundtable, representing several of the nation's
major corporations, called for a broader, deeper commitment
by the corporate community to our central cities. From
that commitment should be forged a public-private partnership
to revitalize our older urban areas.
5.
The Committee favors a standby program of
countercyclical block grant assistance to urban areas
with high unemployment along the lines of legislation
introduced by Congressman Brown and Senator Griffin.
The Administration's current economic policies should
continue to reduce unemployment, eliminating the need for
countercyclical assistance. Over the past 18 months the
national economy has improved dramatically. Unemployment
is down from 8.9 to 7.8 percent; employment has increased
by 3.7 million; the Gross National Product has increased
by $264 billion, or 18 percent; and per capita disposable
personal income is up by $719, or 15 percent. Simultaneously,
the rate of inflation has been cut in half.
At the same time, the recovery has been geographically
uneven. While the national unemployment rate has declined,
there are areas where high unemployment rates have not come
-43-
down because the overall recovery has not yet fully taken
hold. In some areas, including Detroit, Buffalo, and
Miami, there has been marked improvement, but the
unemployment rates remain high relative to the rest of
the nation. In many cases, these geographical disparities
have been translated into serious fiscal problems for the
affected cities.
A multi-billion dollar countercyclical public works
and public service employment bill has been enacted.
Despite its cost, however, that legislation is a poorly
designed response to the problem. The legislation is not
sufficiently targeted at areas of serious unemployment and
has categorical restrictions which will hamstring local
officials in making efficient use of the available funds.
Moreover, no jobs will be created by the public works
program for several months. The last accelerated public
works bill, passed in 1962, did not have a job creation
impact until late 1964, and disbursements for public
works projects funded under that bill are still ongoing.
In contrast, the flexibility provided to local
officials by a countercyclical block grant would greatly
enhance their capacity to use Federal aid to their
communities' best advantage and to convert those funds
into private sector jobs quickly and efficiently.
-44-
A countercyclical block grant bill passed the House
of Representatives in 1976, only to be eliminated in a
conference committee. This bill, sponsored by Congressman
Brown and Senator Griffin, would have provided an overall
level of assistance on the basis of the national
unemployment rate and allocated that assistance to
recipient communities on the basis of their individual
levels of unemployment. Thus, Federal funds would have
been provided when and where they were most needed.
These countercyclical block grant funds could have been
used for any local physical or economic development
activities, providing private sector jobs and at the same
time improving the long-term economic health and physical
infrastructure of economically troubled recipient cities.
To avoid cities exacerbating their economic distress
by firing public employees and cutting public services in
a recession, the Brown-Griffin proposal also allowed a
proportion of each city's funding to be used to maintain
public employment levels, complementing 'local uses of
CETA Title II and VI funds in maintaining public services.
-45-
This limited voluntary use of block grant funds for public
employees' salaries would have provided cities with needed
flexibility during periods of temporarily decreased
revenues, without creating a dependency on Federal aid or
swelled public payrolls.
We do not believe that further countercyclical aid
will be necessary, but we do believe a countercyclical
block grant program should be available on a standby
basis.
6. + The Committee recommends that requirements under
the Home Mortgage Disclosure Act of 1975 and the Equal
Credit Opportunity Act Amendments of 1976 be vigorously
enforced, and that the information generated be systematically
assessed with a view to eliminating "redlining".
The arbitrary denial of home mortgage and commercial
lending based solely on location has been a serious problem
in some older urban neighborhoods, but there has been little
evaluation of its scope, impact, or causes. The Home
Mortgage Disclosure Act provides an important first step in
determining the dimensions of this problem. The data
generated by the Act also should provide locally elected
officials with an early warning of threatened disinvestment,
so that timely remedial actions can be taken.
-46-
7.
The Committee favors a law permitting nonjudicial
foreclosure on abandoned structures.
One of the frustrating and demoralizing problems of many
urban neighborhoods is the presence of abandoned buildings
which are frequently vandalized and are havens for drug addicts.
In many States, lengthy and complex foreclosure procedures
prevent local governments from getting rid of these blighting
structures. The Committee recommends legislation establishing
a nonjudicial foreclosure procedure allowing city governments
to move promptly to demolish abandoned buildings.
8.
The Committee recommends an expansion of HUD's
Urban Homesteading Demonstration, begun in late 1975,
within currently participating communities and to
additional cities.
The Urban Homesteading Program currently operates in
23 cities, which have received voer 2,000 homes valued at
$11.25 million from the HUD-owned inventory. The program
has been extremely successful, both in providing home
ownership opportunities for a limited number of moderate
income Americans and in eliminating the blighting influence
of boarded-up HUD-acquired properties. Cities have developed
ambitious plans for the revitalization of homesteading project
neighborhoods involving total public and private investments
of over $40 million and have shown an impressive ability to
develop creative local variations on the homesteading theme.
-47-
VI. The Committee's Future Agenda
The Committee has not, in the time available for this
interim report, dealt fully with many of the issues and
questions raised in its preliminary investigation of urban
and neighborhood problems. The Committee's next steps will
be to appoint task forces to develop further its interim
recommendations and, in addition, to undertake a more
thorough and systematic analysis of the complex conditions
contributing to the urban predicament.
Our longer-term investigation should focus on the
fundamental causes of urban and neighborhood decline, and
propose a coordinated strategy involving the Federal, State,
local and private sectors. Ideally, the Committee's study
will spark national discussion on the urban condition, so
that the recommendations emerging from its study will have
the advantage of broad consensus and will be based on deeper
understanding of the problems of our urban centers.
For example, the Committee should assess carefully the
causes and impact of the weakening commercial and industrial
bases of older Eastern and Northern cities. On the basis of
a study of the dynamics of economic change in these hard-
pressed cities, the Committee should develop a strategy to
harness Federal resources and encourage private sector action
to reduce unemployment and ameliorate the problems caused by
-48-
industrial and commercial relocation. This strategy would
address the problems of obsolescence of urban industrial
plants and the shifts in transportation patterns which have
adversely affected central cities in general and older
Northeastern urban centers in particular.
Second, the Committee should explore the complicated
interrelationship of center cities and their outlying
suburbs, including the demographic trends which have
concentrated low-skilled, relatively immobile and often
minority populations in the central cities, while more
affluent households have migrated outward. It has been
charged, for example, that suburban dwellers often reap
employment and cultural benefits from living near a city,
but resist contributing to its maintenance.
Third, the Committee should study the causes of
residential neighborhood decline. Individual neighborhoods
are the building blocks of the urban structure and their
decline an integral part of the urban crisis. An aging
housing stock, the burden of property taxation, possible
"redlining" by financial institutions, the loss of
neighborhood schools, the quality of public services and
the accessibility of commercial facilities are among the
factors whose impacts on neighborhood transition should
be addressed. The Committee should evaluate successful
techniques for neighborhood preservation or revitalization,
-49-
giving particular attention to the potentially important
role of cohesive neighborhood organizations. The continued
encouragement of and reliance upon local leadership that is
politically sensitive to neighborhood groups could prove to
be one of the keys to the successful rebuilding of our cities.
The Committee is aware of the large body of public and
private research on many of these topics. That research,
however, is too fragmented to be immediately useful for
policy purposes. It also leaves several important gaps and
unanswered questions, which the Committee believes must be
dealt with more systematically before formulating a
comprehensive strategy for urban development and neighborhood
revitalization.
While the immediate fiscal problems and deterioration of
many older urban areas demand attention, the Committee
believes that the needs and problems of more stable and even
growing urban areas should not be ignored. Virtually all
local governments have suffered the effect of rising public
expectations and increasing costs for public services.
Perhaps even more significantly, many fast-growing
cities have been unable to adopt realistic growth management
policies to accommodate their new patterns of growth.
Uncontrolled development is already producing inefficient
patterns of service delivery which will burden governments
for decades to come. The costs of environmental degradation
-50-
permitted under the pressure of development will be borne
by local taxpayers for generations.
Finally, the diversity of Federal assistance demands
the development of improved linkages among programs which
flow to different levels of government for different specific
purposes but with common objectives.
We wish to repeat our opening observation. When
existing Federal funding is targeted in such a fashion as
to meet the specific problems of given cities by politically
responsive local leaders, we may well find that the tens of
billions of Federal dollars spent each year in the cities is
adequate to the task. All that we can be certain of now is
that the continued uncoordinated spending of the past must
be discontinued.
The Committee members have returned from their visits
to American cities with a much stronger sense of the vitality
of many cities and urban neighborhoods, and with a greater
awareness of both the strengths and the limitations of Federal
urban policy. We intend to continue our efforts to improve
Federal policies and programs, so that our cities and their
neighborhoods can become more prosperous and more exciting
places to live.
THE WHITE HOUSE
WASHINGTON
October 16, 1976
MEMORANDUM FOR:
JIM CANNON
FROM:
LYNN MAY
Lynn mg
SUBJECT:
Briefing Paper and Interim Report
Attached is the briefing paper for the President's meeting
with the principals of his Committee on Urban Development
and Neighborhood Revitalization. Included in the briefing
paper is a copy of a summary of the interim report under
discussion. Your copy of the full interim report is attached.
CC: Art Quern
options
UT
this
area.
TWO or the report
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
ITEM TO BE PICKED UP or rew
REQUEST FOR SPECIAL SERVICE
INSTRUCTIONS: Indicate sequence of action by inserting a "1" in appropriate box
below to show which action is first and "2" for that which follows. ti-vear
fundir
DELIVER TO
X
PICK UP FROM
NAME
:
Recommendation
that block grant funding
James Cannon urnish more funds to older cities
LOCATION Domestic this Council issue
LOCATION
The White House
should be studied).
NAME
DATE
REC'D REQ'D
BY
Carla A. Hills - HUD
10/14/76
DATE-TIME
BY
TRIP
NAME NO YELLOW COURIER WHITE
AM
PINK
To be signed and returned to Courier
For receiving unit
Pending copy for Office Services
HUD-33 (12-67) Previous editions may be used
Sunday
INFORMATION
REQUESTED
THE WHITE HOUSE
WASHINGTON
pm.
column
3
October 14, 1976
OMB
MEMORANDUM FOR:
JIM CANNON
Bovordy
FROM:
LYNN MAY hym n
SUBJECT:
Interim Report of President's Committee
on Urban Development and Neighborhood
Revitalization
Secretary Hills has sent to you a revised draft, reflecting
major member agency comments, including those from the
Domestic Council staff. She recommends that the report be
submitted to the President with the understanding that it
will become a public document.
The revised report lays out the initial observations of the
Committee. It contains an assessment of urban problems, as
well as a review of past and present Federal policies and
programs relating to cities. It closes with a recommended
set of principles to guide future Federal urban policy and
specific programmatic changes.
According to Secretary Hills, the major agencies belonging
to the Committee only recommended specific language changes
(largely reflected in this second draft) but had no problem
with submission of the report to the President or public
release. OMB, on the other hand, objected to several aspects
of the report and recommended that the report not be submitted
to the President, because the report would ultimately become
a public document and thus might tie up the President's
future options in this area. Two of the report's aspects
which OMB objected to have been omitted or rewritten in the
second draft:
-- Stated preference for multi-year funding (omitted).
-- Recommendation that block grant funding be revised
to furnish more funds to older cities (new draft
says this issue should be studied).
FORD & LIBRARY GERALD
101428
The second draft makes no condescension to OMB's objections
that:
The tax reform recommendation should seek to remove
current incentives to new construction rather than
give equal tax incentives to existing construction,
(HUD claims Treasury agrees with the report's
recommendations).
-- Support of the Griffin Brown countercyclical block
grant legislation may be unnecessary given, the
cumulative aid to cities contained in the other
recommendations.
-- The recommended expansion of urban homesteading
program is premature.
-- All of the recommendations for block grant approaches
to housing, urban surface transportation, health
services and education require more analysis.
The real disagreement between OMB and HUD concerns the
timing of the report's submission to the President and the
nature of the public release. Secretary Hills believes the
complete report should be submitted now as an affirmative
Ford Administration approach to urban problems. OMB maintains
that the recommendation contained therein requires greater
review and if released now would restrict the President's
flexibility.
You might want to discuss the matter with the President and
other senior advisers to determine whether or not the interim
report should be formally submitted and made public, containing
recommendations that have not gone through the normal decision
process.
THE WHITE HOUSE
WASHINGTON
October 16, 1976
MEETING WITH PRINCIPAL MEMBERS
OF YOUR COMMITTEE ON
URBAN DEVELOPMENT AND NEIGHBORHOOD REVITALIZATION
Sunday, October 17, 1976
2:00 p.m. (1 hour)
The Cabinet Room
From: Jim Cannon
I.
PURPOSE
To discuss the content and disposition of the Committee's
interim report.
II. BACKGROUND, PARTICIPANTS, AND PRESS PLAN
A.
Background:
You have met twice with the full Committee since
its creation on June 30, 1976. The Committee,
under the chairmanship of Secretary Hills, has
developed a draft interim report for you which
sets forth its assessment of urban problems,
reviews past and present Federal policies and
programs related to cities, makes recommendations
for national urban policy reform, and identifies
areas for further study. See Tab A for a summary
of the report.
Secretary Hills recommends that the report be
formally submitted to you, with the understanding
that it will become a public statement of your
deep concern that Federal dollars be more responsive
to local needs. Director Lynn, on the other hand,
objects particularly to the report's recommendations
advocating (i) countercyclical assistance to cities;
(ii) various block grant proposals; and (iii)
expansion of the Urban Homesteading demonstration
-- all on the grounds that such recommendations
would prejudice your future flexibility. OMB
further believes additional analysis of these
proposals is required, since some very specific
changes in current policy are recommended, which
may or may not be in accordance with your 1978
budget decisions. All of the block grant pro-
Page 2
posals, except the housing and urban surface
transportation initiatives, are modifications of
prior proposals advocated by your Administration.
Your guidance on the disposition of the report
will be requested at the meeting.
B.
Participants:
Carla Hills
William T. Coleman, Jr.
James M. Cannon
L. William Seidman
Paul O'Neill (in place of Jim Lynn)
Secretary Richardson was invited but is unable
to attend.
C.
Press Plan:
None
III. TALKING POINTS:
None
Attachment