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Revenue Sharing Renewal Legislation (1)
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1563141
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Revenue Sharing Renewal Legislation (1)
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The original documents are located in Box 29, folder "Revenue Sharing Renewal Legislation (1)" of the John Marsh 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 Gerald R. Ford donated to the United States of America his copyrights in all of his unpublished writings in National Archives collections.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 29 of The John Marsh Files at the Gerald R. Ford Presidential Library [1976] PROJECTED TIMETABLE AND PROCEDURES FOR CONGRESSIONAL LIBRARY ACTION ON GENERAL REVENUE SHARING RENEWAL LEGISLATION GERALD NOVEMBER JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER -DECEMBER (15-23 Recess) (5-16 Recess) (II-20 Recess) 15th 15th 13th 15th 25th 1st 31st HOUSE GOVERNMENT SUBCOMMITTEE FULL COMMITTEE MARK UP OPERATIONS MARK-UP COMMITTEE COMMITTEE CONSIDERATION OF RULE2 HOUSE RULES FLOOR CONS IDERATION COMMITTEE LINAL COMMITTEE VIEWS AND ESTIMATES ON 1977 FUNDING LEVEL DUE TO BUDGET COMMITTEES REPORT AND MARK CONGRESSIONAL ADOPTION ACTION COMPLETED ON 1ST BUDGET RESOLUTION FESOL AND DEADLINE for REPORDING AUTHORIZATION Bills PREPARATION AND ADOPTION OF HOUSE BUDGET COMMITTEE HEARINGS UP OF 1st BUDGET RESOLUTION 2ND BUDGET RESOLUTION COMMITTEE HOUSE APPROPRIATIONS COMMITTE MARK UP AND FLOOR CONSIDERATION OF APPROPRIATIONS BILL3 COMMITTEE ACTION BILLS COMPLETED ON ALL ALL BUDGET AND S ACTION COMPLETED ON 2ND PUDGE RESOLUTION: ACTION RESOLUTION SNOTE ATHIK SENATE FINANCE "WILL NOT CONSIDER BILL UNTIL HOUSE ACTS, MUST FULL COMM TTEE MARK UP AND FLOOR CONSIDERATION COMMITTEE OBTAIN WAIVER TO CONSIDER BILL AFTER MAY 15. REPORT AND CONGRESSIONAL PREPARATION AND MARK ADOPTION OF FIRST ADOPTION OF 2ND SENATE BUDGET COMMITTEE HEARINGS UP BUDGET RESOLUTION BUDGET RESOLUTION COMMITTEE SENATE APPROPRIATIONS COMMITTEE MARK UP AND FLOOR CONSIDERATION OF APPROPRIATIONS BILL3 COMMITTEE 1The General Revenue Sharing program, authorized by the State and Local Fiscal Assistance Act. 2No new budget authority or spending bills may be considered prior to adoption of May 15th 3 Appropriations Committee action necessary if existing GRS authorization/appropriations expires on December 31. 1976 As a combined authorization/appropriations measure, existing 1st Budget Resolution; waiver procudure necessary for either earlier consideration and the provision IS modified by renewal bill. funds are not subject to the Congressional Budget Control Act. However, any renewal appropriation of funds by an authorization committee. legislation is subject to the various constraints of the Budget Act. 1. Ford's background 2- Budget V. W+M/App. MAR 3 1976 THE WHITE HOUSE WASHINGTON March 3, 1976 MEMORANDUM FOR PAUL JACK MYER MARSH FROM SUBJECT: General Revenue Sharing Legislative Situation Attached for your information are some current docu- ments which relate to our discussion with the President last night. You may know that I received a phone call from Cong. Fountain's office last night informing me that the Democratic Subcommittee Members will be holding at least one more private caucus. He anticipates the beginning of Subcommittee mark-up next week, but could not give me a firm commitment. Attachments GERALD R. LIBRARY FORD March 2, 1976 MEMORANDUM FOR MAX FRIEDERSDORF FROM PAUL MYER SUBJECT: GRS -- Potential Motion to Discharge Government Operations Committee from Consideration Following our brief discussion this morning on the President's expression of interest in House action to discharge the Government Operations Committee from consideration of General Revenue Sharing bill, Jim Cannon discussed this with me in even greater depth. This matter will be the subject of discussion with the President today at 5:00 p.m., and I believe that this attempt should be given the most careful con- sideration with respect to timing, support of the Republican Leadership, the potential to attract Democratic support, and our ability to win. The use of the discharge motion is really the ultimate weapon and should only be used if we believe there will be no other opportunity to ensure House con- sideration of the legislation. At the present time, I am awaiting word from L. II. Fountain with respect to completion of private deliberations among his Subcommittee Democratic colleagues and announcement of a firm mark-up schedule. For Jim's background information on the procedures governing a discharge motion, I have sent him the attached memorandum. Attachment GERALE FORD LIBRART March 2, 1976 MEMORANDUM FOR JIM CANNON FROM PAUL MYER SUBJECT: House Rules Governing the Discharge of Com- mittees Procedures to discharge a House committee from the consideration of a public bill or resolution are governed by Clause 4, Rule XXVII, of the Rules of the House of Representatives. In outline form, the following steps are involved: 1. The filing of a motion to discharge. 2. Accumulation of 218 signatures. 3. A vote to approve the motion to discharge. 4. A vote to consider the bill should a motion to discharge be successful. 5. Consideration of the bill under the general rules of the House. Attached for your information is a more detailed explanation of the discharge procedures. As you know, a discharge motion is presently pending in the House. If a decision were made to take this approach, the existing motion would become the vehicle for this effort. Attachment FORD LIBRARY RULES OF THE HOUSE OF REPRESENTATIVES RELATING TO MOTIONS TO DISCHARGE A COMMITTEE (Clause 4, Rule XXVII) Any Member may file a motion to discharge a committee from the consideration of a public bill or resolution which has been pending in a committee for at least thirty days. Only one such motion may be presented for each bill or reso- lution. This motion shall be placed in the custody of the Clerk of the House and made available for Members to sign. (A Member may also remove his name.) When a majority of the total Membership of the House shall have signed the motion (218 Members), it is then placed on the House Cal- endar of Motions to Discharge Committees. No subsequent action may be taken for at least seven legislative days. On the second and fourth Mondays of each month, any Member who signed the discharge motion may be recognized for the purpose of calling up the motion and the House shall proceed to its consideration without any intervening motions. Following 20 minutes of debate, the House pro- ceeds to an immediate vote on the motion to discharge. If the motion prevails, it shall then be in order for any Member who signed the motion to move that the House proceed to the immediate consideration of such bill or resolution. This motion is of high privilege and is not debatable. If this motion is decided in the affirmative, the bill shall be immediately considered under the general rules of the House. If the House should vote against immediate consideration, the bill is then referred to its proper calendar and be entitled to the same rights and privileges that it would have had if the committee to which it was referred had duly reported it to the House for con- sideration. This rule would not apply to a bill that has been reported by a committee during the interval between the placing of the motion to discharge on the calendar and the day when such motion is called up for action in the House. FORD & LIBRARY 07V835 THE WHITE HOUSE INFORMATION WASHINGTON February 28, 1976 MEMORANDUM FOR: JAMES M. CANNON FROM: PAUL MYER SUBJECT: General Revenue Sharing--House Legislative Status On Thursday, February 26, Democratic members of the House Subcommittee held a private caucus to discuss legislation to renew the General Revenue Sharing program. Committee Chairman Brooks also attended and played an active role in the meeting. The purpose of this session was to determine the interest and concerns of the majority and develop a course of action. It is their intention to seek a consensus on the content of a renewal bill. No date for formal, public mark-up meetings has been scheduled, and no such announcement is anticipated until the Democrats have concluded their private deliberations. Officially, Subcommittee Chairman Fountain noted that "substantial progress" is being made and that the Democrats will meet again on Monday, March 2, to continue their discussion. Based on available information about the meeting, the following facts are known: 1. The Democrats are committed to reporting a bill by May 15; however, they want it to be a "Congressional" bill as opposed to the President's proposal. 2. Chairman Brooks wants the Subcommittee to draft a bill which recognizes his personal views and would enjoy his support. 3. The major issues they are seeking to resolve reflect opposition to key points in the President's proposal: length of program authorization; amount of funds to be made available and the manner in which such appropriations are made; modification of the existing formula in order to allocate more funds to jurisdictions of greater "need"; possible inclusion of a "countercyclical aid" provision; and stronger civil rights enforcement and citizen participation requirements. GERALD FORD LIBRADE -2- Personal discussions with all members prior to and after this meeting, as well as the observations of others, indicate that the Democrats are under great pressure to move, but are uncertain as to how they can accommodate the competing and diversified demands now associated with this issue. According to one source, the Democrats are clearly "frightened" by the prospects confronting them. Strong Committee leadership is lacking, and staff support is weak. Few of these Democrats have any experience in dealing with legislation involving such political or substantial issues. Importantly, there is little confidence that whatever they do would be acceptable to a majority of their colleagues in the House. I will have an additional report for you following the Democrats' Monday caucus. BERALD FORD LIBRARY MAR 12 1976 THE WHITE HOUSE WASHINGTON FOR JACK MARSH FYI FORD LIBRARY is GERALD THE WHITE HOUSE WASHINGTO: March 11, 1976 MEMORANDUM FOR MAX FRIEDERSDORF JIM CANNON FROM PAUL MYER SUBJECT: Review of House Subcom- mittee Actions on General Revenue Sharing Renewal -- Thursday, March 11, 1976 The House Government Operations Subcommittee met this morn- ing to begin mark-up of General Revenue Sharing renewal legislation. Only one Democratic Member was absent (Glenn English) and both Jack Brooks and Frank Horton, as ex officio members, actively participated in the session. The Subcommittee tentatively decided two major issues: (1) to extend the program's authorization for a 3 3/4-year period and (2) to "freeze" the level of funding at the current amount with no annual increment; however, providing an unspecified authorization of additional funds in order to "hold harmless" any recipient governments who would lose funds as a result of prospective formula changes. The Subcommittee is now working off an "issues paper", not an actual bill. Under this procedure, these and all subse- quent decisions will be reviewed when the Members are pro- vided with a staff draft of a clean bill reflecting the Subcommittee's actions on specific issues. The Subcommittee will meet again on Monday, March 15, at 2:00 p.m. and will be moving into various proposals to change the allocation formula. The following is a more detailed analysis of the Subcom- mittees actions: 1. Duration of Extension: The Subcommittee voted to extend the program's authorization for an additional 3 3/4 years (January 1, 1977-September 30, 1980). FORD is LIBRARY GERALD -2- This vote followed the defeat of an earlier motion to extend the program for only 1 3/4 years. Essentially the Subcommittee felt that the duration of extension was an arbitrary decision and that the period adopted was an acceptable compromise. However, a number of Democrats clearly desire the shorter period on the basis that the next President would be able to affect any future decision on the desirability and nature of the program during his term. The Presi- dent has proposed a 5 3/4-year extension, reflecting a balance between a permanent program and the need to review all Federal programs. 2. Level of Funding: The Subcommittee voted to authorize funding the program at the current level ($6.35 billion) with no annual increase, providing that a separate unspecified amount would be authorized to "hold harmless" any recipient jurisdiction from a reduction in the first year due to anticipated allocation formula changes. In effect, this "freeze" means a no-growth, phased-down program. Compared to the President's proposal to con- tinue the current funding level with an annual $150 mil- lion increase, all recipient jurisdictions will lose funds, including those which might gain slightly due to any changes in the allocation formula. This decision reflects the clear desire of the majority to allocate anticipated domestic appropriation increases in other programs, such as existing categorical grants and a countercyclical aid program. This latter program was briefly discussed and will be reviewed in greater depth next week when formula issues are considered. Attached is a complete record of all actions and roll call votes taken by the Subcommittee. Attachment FORD & LIBRARY I. Duration of Extension 1. Motion by Brown to extend program authorization for 5 3/4 years (President's proposal). Defeated Jordan amendment for 1 3/4-year exten- sion by vote of 5-9: YEA NAY Mezvinsky Fountain Jordan Fuqua Burton English (proxy) Drinan Levitas Brooks Wydler Brown Steelman Horton Adopted Drinan amendment for 3 3/4-year exten- sion by vote of 7-6: YEA NAY Mezvinksy Fountain Jordan Fuqua Burton Wydler Drinan Brown English (proxy) Steelman ) Levitas Horton Brooks 2. Adopted amended Brown motion for 3 3/4-year extension by vote of 7-5: YEA NAY Fuqua Fountain Mezvinksy Wydler Jordan Brown Drinan Steelman English (proxy) Horton Levitas Brooks PASS Burton STATES FORD LIBRARY II. Level of Funding 1. Defeated Horton motion to fund program at current level with annual $150 million increment (Presi- dent's proposal) by vote of 5-7: YEA NAY Fountain Fuqua Wydler Mezvinsky Brown Burton Steelman (proxy) Jordan Horton Drinan Levitas Brooks NOT VOTING -- English 2. Defeated Horton motion to fund program at current level with annual $150 million increment, plus an unspecified "hold harmless" amount by a vote of 5-7: YEA NAY Fountain Fuqua Wydler Mezvinsky Brown Burton Steelman (proxy) Jordan Horton Drinan Levitas Brooks NOT VOTING -- English 3. Adopted Drinan motion to freeze funding at current level (no annual increment) with an unspecified "hold harmless" amount by a vote of 7-5: YEA NAY Fuqua Fountain Mezvinsky Wydler Jordan Brown Burton Steelman (proxy) Drinan Horton Levitas (proxy) Brooks NOT VOTING -- English FORD & LIBRARY GRAND THE WHITE HOUSE WASHINGTON March 10, 1976 MEMORANDUM FOR MAX FRIEDERSDORF JIM CANNON FROM PAUL MYER SUBJECT: GRS Mark-up - Possible Subcommittee Actions Based upon my most recent discussions with Members and staff, the following appears to be the general direction which the Democrats will seek to move as GRS mark-up begins tomorrow, Thursday, March 11. The Subcommittee will continue mark-up on Monday, March 15 at 2:00. 1. Duration of Extension: 4 3/4 years (if authoriza- zation only); some support for 1-1 3/4 years only. (Administration Position --- 5 3/4 years.) 2. Level of Funding: continue at present level, use $150 million stairstep increment as "hold harmless" pot to lessen possible formula change impact; add some funds in required Budget Committee estimate for a countercyclical program. (Administration Position -- $6.5 billion for FY77; $39.85 billion permanent appropriations for 5 3/4 years, including $150 million annual increase.) 3. Method of Funding: authorization only, Appropria- tions Committee jurisdiction with 1-2 years advance funding; some support for combined authorization/appropriations for 1-1 3/4 years only. (Administration Position -- combined authorization/ appropriations.) FORD :- LIBRARY GERALD -2- 4. Formula Changes: a) redefinition of eligible units of government to drop many townships; b) substitute poverty population for per capita personal income factor; c) raise 145% per capita ceiling to 175-300%, reduce and/or re-order application of 20% floor-50% limitation, establish "hold harmless" provision (see #2 above) (Administration Position -- No change, except raise 145% ceiling to 175% by 6% over 5 years.) 5. Priority Expenditures: eliminate categories. (Administration Position -- no change.) 6. Non-discrimination: strengthen civil rights provi- sions, probably along lines recommended by House Judiciary Subcommittee, to remove discretionary authority and require more forceful enforcement. (Administration Position -- authorize Treasury to withhold funds, require repayment and terminate payments where civil rights violations are found.) 7. Citizen Participation: adopt Administration proposal plus additional provisions similar to CD block grant program; perhaps require "advisory committees" and improve existing reporting requirements. (Administration Position --- require certification of public access to decision-making on use of funds.) 8. Reporting Requirements: revise reporting require- ments to provide more useful information for citizens, Congress and the Administration. (Administration Position -- give Treasury discretion to determine form and content of reports.) FORD & BENALD LIBRAR THE WHITE HOUSE WASHINGTON March 15, 1976 MEMORANDUM FOR MAX FRIEDERSDORF JIM CANNON FROM PAUL MYER SUBJECT: Review of House Subcom- mittee Actions on General Revenue Sharing Renewal -- Monday, March 15, 1976 The House Government Operations Subcommittee met this after- noon to continue mark-up of General Revenue Sharing renewal legislation. Mayors and city officials from all States and districts represented by Subcommittee Members were in attendance. The Subcommittee tentatively decided (7-6) to draft a General Revenue Sharing renewal bill as authorization legislation only. Although the question of advance appropriations was discussed, the adopted motion is silent on this point. This decision followed defeat of the President's proposal to con- tinue the present combined authorization/appropriations method of funding the program (6-7) and a compromise pro- posal providing for a 1 3/4-year authorization/appropriation with annual appropriations thereafter (4-9). The Republican Members held firm for the President's pro- posal throughout the mark-up session. A review of the votes indicates that additional support might be obtained from the Democratic side for the President's proposal in subse- quent Subcommittee mark-up sessions or at the Full Committee level. It is obvious from the two meetings that the two Freshmen Subcommittee Democrats, English and Levitas, will be swing votes on these and other issues. The only two Democrats to vote consistently with the President were Sub- committee Chairman Fountain and Don Fuqua. The Subcommittee will continue its deliberations on Tuesday, March 16, at 10:00 a.m. to consider the allocation formula. larger delegation of mayors and other city officials is anticipated. FORD is LIBRARY GERALD -2- Attached is a complete record of all actions and roll call votes taken by the Subcommittee today. Attachment FORD & LIBRARY GERALD Method of Funding 1. Defeated Horton motion to continue present com- bined authorization/appropriation method of funding for duration of extension (President's proposal) by vote of 6-7: YEA NAY Fountain Mezvinsky Fuqua Jordan Wydler Burton Brown Drinan Steelman English Horton Levitas Brooks 2. Defeated Levitas motion to provide combined authorization/appropriation method of funding for 1 3/4 years with annual appropriations in subse- quent years by a vote of 4-9: YEA NAY Fountain Mezvinsky Fuqua Jordan English Burton Levitas Drinan Brooks Wydler Brown Steelman Horton 3. Defeated Wydler motion to designate GRS as an "entitlement" program in accordance with Congres- sional Budget Act provisions, in effect providing combined authorization/appropriations for duration of extension by vote of 6-7: YEA NAY Fountain Mezvinsky Fuqua Jordan Wydler Burton Brown (proxy) Drinan Steelman English Horton Levitas FORD & LIBRARY 570239 Brooks 4. Adopted Burton motion to provide for an authoriza- tion only for duration of extension by vote of 7-6: YEA NAY Mezvinsky Fountain Jordan Fuqua Burton Wydler Drinan Brown (proxy) English Steelman Levitas* Horton Brooks *Note: passed on first round. FORD & LIBRARY SERVIC MAR 16 1976 THE WHITE HOUSE WASHINGTON March 16, 1976 MEMORANDUM FOR MAX FRIEDERSDORF JIM CANNON FROM faul PAUL MYER SUBJECT: Review of House Subcom- mittee Actions on General Revenue Sharing Renewal -- Tuesday, March 16, 1976 The House Government Operations Subcommittee continued to mark-up General Revenue Sharing renewal legislation today, considering various allocation formula modifications. The key action taken was defeat of a proposal to substitute a "need" factor (number of individuals below poverty level) for the current per capita personal income factor; and thus, shift substantial funds to large urban areas and drop one-third of the present recipients from the program. This was a proposal included in the Fascell bill and endorsed by those Congressmen and national organizations seeking to modify the program. The decision came on a 10-1 vote in support of continuing to use the present data ele- ments. This was a major endorsement of the President's proposal. In addition, the Subcommittee unanimously agreed to retain the 1/3-2/3 State-local split distribution of funds. Also discussed were changes in the definition of eligible units of government. At issue is the inclusion of town- ships. Although the Subcommittee defeated a motion to leave the definition unchanged, they agreed to delay action on this issue until the next session when more detailed information will be available. Pending is a Drinan motion to remove townships. FORD LIBRARY is 038870 -2- The Subcommittee will reconvene on Thursday morning, March 18, to continue its deliberations. Additional formula modifications will be considered at that time. Attached is a complete record of all actions and roll call votes taken by the Subcommittee today. Attachment FORD is LIBRAST 076830 Eligible Units of Government 1. Defeated Wydler motion to retain existing defini- tion by a vote of 5-7: YEA NAY Fountain Mezvinsky Wydler Jordan Brown Burton Steelman Drinan Horton English Levitas Brooks NOT VOTING -- Fuqua 2. Agreed by unanimous consent to Levitas motion to delay vote on a Drinan motion to modify existing definition and possibly exclude townships. Formula Provisions 1. Adopted Jordan motion to retain 1/3-2/3 State- local split by unanimous voice vote. 2. Adopted Wydler motion to continue the use of per capita personal income instead of poverty data as a major formula factor by a vote of 10-1: YEA NAY Fountain Burton Mezvinsky Jordan English Levitas (proxy) Brooks (proxy) Wydler Brown (proxy) Steelman (proxy) Horton PASS -- Drinan NOT VOTING -- Fuqua FORD & LIBRARY GIVEN MAR 18 1976 THE WHITE HOUSE WASHINGTON March 18, 1976 MEMORANDUM FOR MAX FRIEDERSDORE JIM CANNON FROM PAUL MYER SUBJECT: Review of House Subcom- mittee Actions on General Revenue Sharing Renewal -- Thursday, March 18, 1976 The House Government Operations Subcommittee continued to mark-up General Revenue Sharing renewal legislation today. As a first order of business, the Subcommittee resumed consideration of possible changes in the definition of eligible units of government. Pending was a Drinan motion to continue to limit eligibility to States and general purpose local governments, but re-define the latter to mean local units which meet Census Bureau criteria and also perform, or impose taxes to provide, two or more municipal-type services. After consider- able discussion, the Subcommittee approved this motion. The new definition would become effective October 1, 1977, and, depending on the availability of data, could drastically affect townships and smaller communities. The Administration's position on this issue should have prevailed. However, due to the unresponsiveness of certain "departmental experts", particularly those of Treasury's Office of Revenue Sharing, the issue was greatly confused and resulted in a shift of three Democratic votes in favor of Drinan's motion. The Subcommittee also decided to retain the existing 145% per capita ceiling. The Administration had pro- posed to gradually raise the 145% ceiling to 175% in an effort to permit some hard-pressed urban jurisdic- tions now constrained to receive more money. The FORD i LIBRARY -2- Subcommittee's action was somewhat surprising since many of the Democratic Members had previously indi- cated a desire to raise the constraint beyond the Administration request. It was obvious from the debate today that the desire to avoid the expenditure of additional funds on revenue sharing (i.e. the need for a "hold harmless" provision) and a growing sensi- tivity to the political impact of any formula changes led to their decision to leave this formula element unchanged. The Subcommittee will reconvene on Tuesday morning, March 23, 1976, to continue its deliberations. Addi- tional formula modifications will be considered at that time. Attached is a complete record of all actions and roll call votes taken by the Subcommittee today. Attachment 3 R. FORD LIBRARY Eligible Units of Government Adopted Drinan motion to modify definition of eligible units of government in order to make certain townships and smaller communities ineligible to receive funds by a vote of 8-5: YEA NAY Fountain English Fuqua Wydler Mezvinsky Brown (proxy) Jordan Steelman (proxy) Burton (proxy) Horton Drinan Levitas Brooks (proxy) Formula Provisions Adopted Fuqua motion to retain 145% per capita constraint by a vote of 7-5: YEA NAY Fuqua Fountain Mezvinsky Wydler Jordan Brown (proxy) Burton (proxy) Steelman (proxy) English Horton (proxy) Levitas Brooks (proxy) PASS -- Drinan FORD it LIBRARY JackMarsh THE WHITE HOUSE WASHINGTON March 23, 1976 MEMORANDUM FOR MAX FRIEDERSDORF JIM CANNON FROM PAUL MYER SUBJECT: Review of House Subcom- mittee Actions on General Revenue Sharing Renewal -- Tuesday, March 23, 1976 The House Government Operations Subcommittee resumed con- sideration of General Revenue Sharing renewal legislation today. The Subcommittee completed action on the remaining formula issues, deciding by voice votes to retain major features of the existing formula (20% per capita floor, 50% limita- tion and $200 minimum entitlement provisions). In a related decision, the Subcommittee rejected an attempt to add "user charges", such as those for water, sewage and sanitation services, to a local government's tax effort calculations. This calculation is one factor in determining the allocation each local government receives and was the subject of lengthy debate. Although the Subcommittee voted to retain the existing language, additional amendments to revise this provision are antici- pated. The Subcommittee also decided to eliminate the priority expenditure categories for which local governments may now use shared revenues. Many Members believe that the categories are meaningless in light of the "fungibility" or displacement factor; others strongly supported elimi- nation as being more consistent with the revenue sharing concept. The President had rejected this option in con- sidering his proposals for renewal legislation, and it is likely that the Subcommittee will carefully re-examine this action following consideration of proposals to GENAL FORD LIBRARY -2- revise the nondiscrimination and citizen participation requirements. The extent and nature of those decisions could have far-reaching implications if the existing categories are eliminated. The Subcommittee is presently considering the matter of prohibiting use of revenue sharing funds to meet the matching requirements of other Federal programs, and will be moving into the nondiscrimination, citizen participa- tion and reporting requirement issues in subsequent ses- sions. The Subcommittee will meet again tomorrow morning at 10 a.m. to continue its deliberations. It is possible that all actions will be completed this week on their issue working paper, enabling the staff to draft a bill reflecting those decisions for final Subcommittee con- sideration and reporting prior to the April 15 recess deadline. Attached is a complete record of all actions and roll call votes taken by the Subcommittee today. Attachment FORD & LIBRARY GENALD I. Formula Provisions 1. Adopted Levitas motion to retain the 20% per capita floor on minimum allocations to local governments by voice vote. 2. Adopted Wydler motion to retain the exist- ing limitation providing that no allocation to a local government can exceed 50% of its adjusted taxes by voice vote. 3. Adopted Mezvinsky motion to retain provi- sion for a $200 minimum entitlement by voice vote. II. Priority Expenditure Categories Adopted Levitas motion to eliminate the priority expenditure categories for revenue sharing funds by local governments by a vote of 10-3: YEA NAY Fuqua Fountain Mezvinsky Burton Jordan English Drinan Levitas Brooks Wydler Brown Steelman (proxy) Horton FORD i LIBRARY GERALD Jack march THE WHITE HOUSE MAR 24 :376 WASHINGTON March 24, 1976 MEMORANDUM FOR Part MAX FRIEDERSDORF JIM CANNON FROM PAUL MYER SUBJECT: Review of House Subcom- mittee Actions on General Revenue Sharing Renewal -- Wednesday, March 24, 1976 The House Government Operations Subcommittee met this morning to continue mark-up of General Revenue Sharing renewal legislation. In actions taken today the Subcommitiee agreed to con- tinue various operating provisions of the existing program without modification: 1. Retain prohibition on use of revenue sharing funds to fulfill the local matching requirement for Federal categorical grant programs; 2. Retain mainterance of effort require- ment on State assistance to local units of government; and 3. Retain Davis-Bacon Act coverage for construction projects funded with shared revenues. The Subcommittee also considered the required reporting by recipient governments, adopting a modification of the present provision which incorporates some of the Administration's recommendations, specifically contain- ing language giving Treasury flexibility in establish- ing such requirements in the case of smaller jurisdictions. FORD LIBRARY s DERALD -2- The Subcommittee will not meet again until the after- noon of Monday, March 29, 1976. At that time, the Subcommittee will consider the two remaining issues: proposals to modify the nondiscrimination and citizen participation provisions. An effort is being made to reach a compromise on the civil rights issue. This issue was the subject of some private discussions I initiated this morning with Wydler, Brown, Fountain, Jordan, Levitas and Dick Albrecht of Treasury. As a result of these discus- sions, consideration of the issue was delayed until Monday. Action today may have resulted in the adop- tion of unacceptable provisions. I believe that the private discussions which will take place between now and Monday may fashion an approach which will be acceptable to the Administration and a majority of the Subcommittee. Attached is a complete record of all actions and roll call votes taken by the Subcommittee today. Attachment FORD & LIBRARY 93 I. Matching Provisions Adopted Horton motion to retain prohibition on use of funds to meet matching requirements for Federal grant programs by voice vote. II. Maintenance of Effort Adopted Mezvinsky motion to retain present maintenance of effort provision requiring State to maintain the aggregate level of assistance it provided local govern- ments during calendar year 1976 by voice vote. III. Davis-Bacon Act Adopted Wydler motion to retain present Davis-Bacon Act applicability by voice vote. IV. Reporting Requirements Adopted Wydler motion to expand content of reports with respect to the relationship of revenue sharing funds to the budget of a recipient government and grant Treasury discretion to draft more flexible regulations by voice vote. FORD is LIBRARY SALD MAR 30 1976 THE WHITE HOUSE WASHINGTON March 29, 1976 MEMORANDUM FOR MAX FRIEDERSDORF JIM CANNON FROM PAUL MYER SUBJECT: Review of House Subcom- mittee Actions on General Revenue Sharing Renewal -- Monday, March 29, 1976 The House Government Operations Subcommittee continued con- sideration of General Revenue Sharing renewal legislation this afternoon. The only issue considered was the scope of citizen participation provisions. The Subcommittee adopted a concept which is somewhat broader than that proposed by the Administration; however, it incor- porates a number of the President's recommended changes in the existing program. Under the Subcommittee concept, more detailed public information would be made available and related to the revised reporting requirements. Treasury and the public interest groups believe the approach is con- sistent with existing regulations and should not be unduly burdensome. The Subcommittee had earlier rejected a proposal to require the establishment of local government budget process stan- dards and the creation of citizen advisory committees to govern the decision-making on the use of revenue sharing funds. The Subcommittee will resume its deliberations on Tuesday morning, March 30. Discussion of the nondiscrimination provisions is the only remaining substantive item on the agenda. Attached is a complete record of all actions and roll call votes taken by the Subcommittee today. Attachment FORD LIBRARY + QERALD Citizen Participation 1. Defeated Drinan motion to establish local govern- mental budget process standards and create "citizen advisory committees" with respect to uses of revenue sharing funds by a vote of 4-8: YEA NAY Mezvinsky (proxy) Fountain Jordan Fuqua Burton English Drinan Levitas Wydler Brown (proxy) Steelman (proxy) Horton NOT VOTING -- Brooks 2. Adopted Levitas motion to broaden existing require- ments in order to provide information and access regarding revenue sharing funding decisions by a vote of 10-3: YEA NAY Fountain Burton Fuqua Drinan Mezvinsky (proxy) English Jordan Levitas Brooks Wydler (proxy) Brown (proxy) Steelman (proxy) Horton FORD LIBRARY MAR 31 1976 THE WHITE HOUSE WASHINGTON March 30, 1976 MEMORANDUM FOR MAX FRIEDERSDORF JIM CANNON FROM PAUL MYER SUBJECT: Review of House Subcom- mittee Actions on General Revenue Sharing Renewal -- Tuesday, March 30, 1976 The House Government Operations Subcommittee met this morning to continue consideration of General Revenue Sharing renewal legislation. The only action taken was adoption, by voice vote, of a Wydler-Mezvinsky pro- posal to revise the program's auditing and accounting provisions. As adopted, the present provisions governing fiscal accounting and audit procedures would be retained; however, the Secretary of the Treasury would be required to promulgate regulations to insure an independent audit of a recipient government's finan- cial accounts where revenue sharing funds are involved and provide assurances for the public disclosure of such information. The Subcommittee once again deferred action on the non- discrimination provision in an effort to give Members more time to work out a satisfactory compromise. Fountain, Jordan, Wydler, Horton and Brown are meeting this afternoon in a final attempt to secure an agree- ment. This effort was undertaken in order to avoid a serious civil rights fight that could hamper the progress of this legislation in committee and on the floor. The Subcommittee will meet again on Wednesday morning, March 31, 1976. FORD is LIBRARY QERALD ms. marsh APR 1 1976 THE WHITE HOUSE WASHINGTON March 31, 1976 MEMORANDUM FOR MAX FRIEDERSDORF JIM CANNON FROM PAUL MYER SUBJECT: Review of House Subcom- mittee Actions on General Revenue Sharing Renewal --- Wednesday, March 31, 1976 The House Government Operations Subcommittee continued its mark-up of legislation to extend the General Revenue Shar- ing program, adopting a revised approach to prohibit the discriminatory use of revenue sharing funds. The Subcommittee adopted a Jordan proposal which reflected a concensus agreement supported by most Democrats and all Republicans on the Subcommittee. It was strongly opposed by Drinan. In concept, the Jordan proposal extends the prohibition against discrimination to all activities of a recipient jurisdiction, except where a recipient government can pro- vide "clear and convincing evidence" that the program or activity in question was not funded with revenue sharing funds, and require the suspension of revenue sharing pay- ments where compliance is not secured. The Administration did not take a position on this specific approach and will withhold comment until actual legislative language is drafted. This matter will require review by representatives from Treasury, Justice and the White House. A tentative review indicated that the proposal was consis- tent with the Administration's objectives but went beyond the proposed legislative recommendations. The Republican Members worked with Jordan to reach a concen- sus in order to avoid a major civil rights dispute. The fact that Jordan introduced this amendment and argued against Drinan and other proponents of stronger language FORD i LIBRARY 033470 -2- was an important development in the mark-up of this legis- lation. The Subcommittee is scheduled to meet again tomorrow morning to resolve miscellaneous issues and should conclude this first phase of its mark-up process. Attached is a complete record of all actions and roll call votes taken by the Subcommittee today. Attachment FORD :- LIBRARY CIVE Civil Rights 1. Adopted Jordan motion to clarify and strengthen the present nondiscrimination provision by voice vote. 2. Rejected Brooks motion to amend the Jordan proposal significantly broaden the nature and scope of the program's nondiscrimina- tion provision by a vote of 5-8: YEA NAY Mezvinsky Fountain Jordan* Fuqua Burton English Drinan Levitas Brooks Wydler Brown Steelman (proxy) Horton * (Jordan was prepared to pass if necessary to defeat this amendment. ) FORD & LIBRARY 078838 & mr. march APR 2 1976 THE WHITE HOUSE WASHINGTON April 1, 1976 MEMORANDUM FOR MAX FRIEDERSDORF FROM PAUL JIM CANNON MYER Paul ton SUBJECT: Review of House Subcom- mittee Actions on General Revenue Sharing Renewal -- Thursday, April 1, 1976 The House Government Operations Subcommittee met this morn- ing, ending the first phase of its General Revenue Sharing renewal legislation mark-up. Staff has been directed to draft a clean bill reflecting the Subcommittee's tentative substantive decisions on various issues. It is anticipated that the Subcommittee will resume formal mark-up of the actual bill next Wednesday, April 7, 1976, and complete action just prior to the scheduled recess. In actions taken today, the Subcommittee rejected motions to prohibit recipient governments from using their revenue shar- ing funds to lobby and to require a reduction in General Revenue Sharing funding equal to any prospective Congressional tax reduction. This latter motion was the subject of con- siderable partisan debate. Also discussed was the intention of some Members to re-offer a modified "need" distribution formula amendment next week. The amendment will be a form of countercyclical-type assistance program with a cost of roughly $400,000,000. Attached is a complete record of all actions and roll call votes taken by the Subcommittee today. Attachment GERALD FORD LIBRARY 1. Rejected Brooks motion to prohibit recipient governments from using revenue sharing funds for lobbying purposes by a vote of 6-7: Yea Nay Mezvinsky Fountain Burton Fuqua Jordan Levitas Drinan (proxy) Wydler English Brown Brooks Steelman (proxy) Horton 2. Rejected English motion to require reduction in General Revenue Sharing funding level to reflect any Federal tax reduction by a vote of 5-7: Yea Nay Jordan Fountain Burton Fuqua Drinan Mezvinsky English Wydler Brooks Brown Steelman (proxy) Horton PASSING -- Levitas FORD & LIBRARY exprag arex APR 8 1976 THE WHITE HOUSE WASHINGTON April 8, 1976 MEMORANDUM FOR MAX FRIEDERSDORF JIM CANNON FROM PAUL MYER SUBJECT: eview of House Subcom- mittee Actions on General Revenue Sharing Renewal -- Thursday, April 8, 1976 The House Government Operations Subcommittee resumed consideration of legislation to extend the General Revenue Sharing program this morning. Pending before the Subcommittee was a draft bill reflecting their earlier "conceptual" decisions. In the only action taken today, the Subcommittee reversed its earlier decision to subject General Reve- nue Sharing to the annual appropriations process and voted to redesign General Revenue Sharing as a 3 3/4- year entitlement program. No action was taken to increase the level of funding. While there is little difference between the entitle- ment approach and the combined authorization- appropriation method of funding proposed by the President, the Democratic Members advocating this amendment stressed that it was a satisfactory response to charges that the current funding provision by-passed the traditional Congressional appropriations process and circumvented newly-established Budget Act procedures designed to control long-term spending actions. Although the Republican Members voted for this amendment, they established an excellent record for future reconsideration of the President's proposal in the full committee. Prior to the adoption of this entitlement amendment, the Subcommittee rejected, on a straight party roll call vote, the President's proposal, and a Drinan amendment by voice vote. FORD & LIBRARY 078870 -2- The Subcommittee will not meet again until Monday afternoon, April 12, 1976. Brooks urged the Subcom- mittee to complete its mark-up prior to the Easter Recess in order to allow time for all Committee Members to study the bill and proceed to early con- sideration after the recess. If the Subcommittee does not reconsider today's action or get delayed over the controversial civil rights issue, it should be possible for them to report a bill by April 14. Attached is a complete secord of all actions and roll call votes taken by the Subcommittee today. Attachment FORD & LIBRARY 1. Adopted Levitas amendment making General Revenue Shar- ing a 3 3/4-year entitlement program by a vote of 7-6: YEA NAY Fountain Mezvinsky Fuqua Jordan Levitas Burton Wydler Drinan Brown (proxy) English Steelman (proxy) Brooks Horton 2. Rejected Wydler amendment to adopt 5 3/4-year program with combined authorization-appropriation funding pro- vision (President's proposal) by a vote of 9-4: YEA NAY Wydler Fountain Brown (proxy) Fuqua Steelman (proxy) Mezvinsky Horton (proxy) Jordan Burton Drinan English Levitas (proxy) Brooks 3. Rejected Drinan amendment providing that GRS be an entitlement program for 1 3/4 years with annual appro- priations thereafter by voice vote. FORD + LIBRARY DERALD APR 16 1976 THE WHITE HOUSE WASHINGTON April 15, 1976 MEMORANDUM FOR: MAX FRIEDERSDORF JIM CANNON FROM: PAUL MYER SUBJECT: Review of House Subcommittee Actions on General Revenue Sharing Renewal On Wednesday, April 14, 1976, the House Government Operations Subcommittee completed markup of legislation to extend and revise the General Revenue Sharing program. A clean bill will be introduced and reported to the full Committee after the recess. During the final days of the markup, the Subcommittee reversed a number of earlier tentative decisions, taking actions which improved the bill. While it does not en- dorse the President's proposal, it is generally consistent with its basic principle and represents a good markup vehicle in the full Committee for purposes of strengthen- ing the bill further. In summary, the Subcommittee bill would: * extend the program's authorization for 3 3/4 years; * establish entitlement financing for the program, providing funds for the total authorization period; * freeze funding at its present level $6.6 billion) specifically rejecting any annual increase; * retain the present distribution formula); * delete present priority expenditure categories and matching prohibition; FORD i LIBRARY DERALD - 2 - * strengthen scope and enforcement of non- discrimination provisions, however, providing that all administrative remedies be exhausted prior to court action; and * expand present, reporting, auditing and citizen participation requirements. I have asked Treasury to prepare a detailed analysis of the Subcommittee bill. Full Committee markup should begin shortly after the recess. Jack Brooks and the Subcommittee's liberal Democrats are not happy with the final bill. Brooks will clearly revisit all the major issues in Committee (i.e., method of funding and civil rights) and liberals may seek to revise the distribution formula in some way. It is anticipated that the Committee will report a bill prior to the May 15 deadline. FORD & LIBRARY APR 28 1976 THE WHITE HOUSE WASHINGTON SCHEDULE PROPOSAL DATE: April 28, 1976 FROM: Jim Cannon VIA: Bill Nicho son MEETING: Staff briefing on General Revenue Sharing legislative situation. DATE: Saturday, May 1, 1976 or Tuesday, May 4, 1976 PURPOSE: To brief the President on status of General Revenue Sharing renewal legislation. FORMAT: Oval Office Participants: See Tab A Time: 20 minutes CABINET PARTICIPATION: None SPEECH MATERIAL: Briefing paper to be submitted. PRESS COVERAGE: None STAFF: Paul J. Myer RECOMMEND: Jack Marsh Max Friedersdorf Ed Schmults FORD is LIBRARY SERALD OPPOSED: None PREVIOUS PARTICIPATION: The President last discussed this matter with staff on March 2, 1976. BACKGROUND: On April 25, 1976, the President asked Congress to continue the General Reve- nue Sharing program. The House Govern- ment Operations Subcommittee is finally scheduled to begin consideration of a renewal bill recently reported by the Fountain Subcommittee. PARTICIPANTS The Vice President Jack Marsh Max Friedersdorf Jim Lynn Paul O'Neil Jim Cannon Ed Schmults Paul Myer FORD & LIBRARY G7V878 [Rev, sharing mtg] APR 28 1976 Possible THE WHITE HOUSE Sat/Tues WASHINGTON Full Commit April 28, 1976 next week MEMORANDUM FOR JACK MARSH MAX FRIEDERSDORF JIM CANNON ED SCHMULTS FROM PAUL MYER SUBJECT: Background for General Revenue Sharing Meeting Wednesday, April 28 4:30 p.m. The House Government Operations Committee will soon begin consideration of the General Revenue Sharing renewal bill reported today by the Fountain Subcommittee. Although the Subcommittee did not endorse the President's proposal, the reported bill is not far from his position. Attached for your review is a comparative analysis of the current program, the President's proposal and the Subcommittee bill. (Attachment 1) The following issues are relevant to our discussion of a legislative strategy from this point: 1. Length of Program and Level of Funding langth President's Proposal: 5 3/4 years; total fund- ing of $39.5 billion, including $150 million annual level increase. Subcommittee Bill: 3 3/4 years; total funding of $24.9 billion, with no annual increase (funds frozen at 1976 level of $6.65 billion). Comment: 3 3/4 years represents a compromise after Democratic attempt to get only 1 3/4-year period. PIGS support compromise in light of fund- ing level problems; longer extension obtainable in FORD & LIBRARY GERALD the Senate. All attempts to increase funding, including those advanced by those wanting to change allocation formula to help big cities, were rejected. -2- $150 million increment provision is not worth a fight; PIGS want greater increase; liberal Demo- crats want major formula change or add-on funds for distribution on basis of need. Unless a substantial annual increase or other "sweetener" is advocated, it is advisable to hold Subcommittee position in House. 2. Method of Funding President's Proposal: Continue present com- bined authorization-appropriation approach. Subcommittee Bill: Establish "entitlement" financing approach. Comment: Clearly the most controversial and sensitive issue. The entitlement financing approach adopted by the Subcommittee was developed as a realistic approach to the highly controversial ques- tion of how General Revenue Sharing should be funded. It does not substantially modify the basic tenets of the revenue sharing concept, but it does answer the argument of those Members who have charged that the existing funding provision by-passes the traditional Congressional appropriations process and circumvents the newly-established Budget Act procedures designed to control long-term spending actions (e.g. Brooks, Mahon). See Attachment 2 for a detailed explanation. The entitlement financing approach is desirable because -- a. its impact is identical to the President's proposal; b. it does not by-pass appropriations and is consistent with the new Budget Act; C. it negates the need for a special rule waiving points of order; and d. its chances of adoption are far greater than the combined authorization- appropriations approach and would place us in a favorable position in the Senate. FORD LIBRAS -3- 3. Civil Rights President's Proposal: Clarifies the Secretary's authority to invoke one or more remedies where a reci- pient government is found to have used revenue sharing funds in a discriminatory fashion. This includes the authority to withhold all or a portion of entitlement funds due to the government and to require repayment of funds expended in a discriminatory fashion. Subcommittee Bill: Discrimination prohibited on basis of handicapped status, age and religion in addition to race, color, sex, and national origin under all State and local programs except where recipient can prove "with clear and convincing evi- dence" that program was not funded, directly or indirectly, with GRS monies. Extensive hearing and compliance procedures are spelled out requiring time limits for investigations, compliance, administrative procedures and court actions. Private civil suits are authorized after the exhaustion of administrative remedies. Comment: There has been a substantial amount of criticism, much of it legitimate, about the failure to enforce the nondiscrimination provision of the current Act. The Subcommittee bill contains a greatly strengthened provision, originally viewed as a compro- mise which would neutralize the issue. Civil rights community now opposed, particularly to restriction on right of private action, but is a reflection of their total opposition to the program; most moderate and conservative Members may feel that Subcommittee provision goes too far. Effort should be made to return to a position more consistent with, but stronger than, the President's proposal (e.g. a variation of Senate countercyclical bill nondiscrimination provision). All other issues and points of difference are either relatively technical in nature or do not involve substantial policy decisions and may be worked out in Committee or can be easily revised in the Senate (e.g. citizen participation and reporting requirements). FORD LIBRARY - -4- Recommendation: The Subcommittee bill, with some modi- fication, should be viewed as the best vehicle available to insure House passage of a General Revenue Sharing bill which maintains the basic program concept and will enable us to work for Senate adoption and eventual enactment of a bill consistent with the President's objectives. Attachments FORD & LIBRARY STREET #1 FORD i LIBRARY DERALD BASIC PROVISIONS CURRENT LAW PRESIDENT'S PROPOSAL SUBCOMMITTEE DRAFT BILL (P. L. 92-512) H. R. 6558 LIBRARY Funding level $30.2 billion to be distributed $39.5 billion to dis- $24.9 billion to be distributed Jan. 1, 1977 Jan. 1, 1972 to Dec. 31, 1976. tributed Jan. 1, 1977 to Sept. 30, 1980. FORD to Sept. 30, 1982. Funding 5 year trust fund. 5 3/4 year trust fund. 3 3/4 year entitlement. (Note: an entitlement 073835 Mechanism (Funds authorized and (Funds authorized and program is not the same as annual appropriations. appropriated for entire appropriated for entire Under the entitlement provision, the Appropria - period.) period.) tions Committee would only have jurisdiction if the amount authorized by the legislative committee (Government Operations) is greater than that approved by the Budget Committee. Under such circumstances the Appropriations Committee would have 15 days in which to adjust the legislative committee's action. If they do not, the dis- crepancy must be reconciled on the Floor.) Annual $150 million per year. No change. No increment. Funds are frozen at the 1976 Increment level of $6.65 billion. Eligibility All units of general purpose No change. To participate local government recipients must: government are eligible to 1) Be defined as a unit of general purpose participate in the program. government by the Census Bureau. 2) Impose taxes or receive intergovernmental transfer payments. 3) Provides "substantially" for at least two of the following services: police, courts and corrections, fire protection, health services, social services, recreation, libraries, sewage disposal and water supply, solid waste dis- posal, zoning or land-use planning, pollution abatement, roads, mass transit, and education. 4) Spend at least 10 percent of their total ex- penditure for two of the services or provide four of the listed services. Formula Money allocated by formula based No change. No change. Provisions on population, per capita income and tax effort. States receive 1/3 of funds No change. No change. distributed; local governments receive 2/3. Sets maximum entitlement to local Raised to 175 percent Retains 145 percent maximum limitation. government at 145 percent of the by 6 percentage points average statewide per capita per entitlement period entitlement. in five steps. Sets minimum entitlement to local No change. No change. government at 20 percent of the average statewide per capita entitlement. No local government to receive No change. No change. revenue sharing funds in excess of 50 percent of its own source non-school revenues plus any intergovernmental transfer. Any general purpose government No change. No change. due to receive less than $200 annually will not participate in the program. Citizen Recipient governments must publish Same, but Secretary of a) Recipient governments must hold public hear- Participation Planned and Actual Use Reports in the Treasury may autho- ings on the Proposed Use Report at least 7 and Public newspapers of general circulation. rize other methods to days before the submission of the report to ORS. Hearing publicize use information b) Recipient governments must hold a second hear- tion where such are ing, at least 7 days before the adoption of appropriate. their budget, showing the relationship of GRS funds to functional items in their budget. c) Thirty days before the second hearing, the govern- ment must publish a summary of its budget and Proposed Use Report in a general circulation newspaper. d) Hearings must be at a place and time that "permits and encourages citizen participation." No requirement for public hearing Requires assurance that or other means of public partici- there will be a public pation in use of funds. hearing or other method by which the public may participate in deciding how the funds are to be spent. Allocation of GRS monies must be in No change. No change. accordance with State and local law. Reporting Law prescribes reports on amounts No change. Proposed Use Report must include comparative data Requirements and purposes of planned and actual use of GRS funds for the current and the two previous expenditures. entitlement periods and must compare them to items in budget. Proposed Use Reports must specify whether the use is for new or expanded program, a continuation of activity or tax stabilization or reduction. Actual Use Reports must be filed with ORS. Any differences between planned and actual uses must LIBRARY be explained. FORD Budget documents and Use Reports must be available at principal government office and libraries. GERALD Budget summary must be published in newpaper 30 days after adoption with explanation of changes between the Proposed and Actual Use Reports. Anti- Law contains strong anti- Clarifies the Secre- Discrimination prohibited on basis of handicapped Discrimination discrimination requirement where tary's authority to in- status, age and religion in addition to race, Provisions activity is funded with revenue voke one or more reme- color, sex, and national origin under all State sharing. Secretary's enforce- dies where a recipient and local programs except where recipient can ment powers are stated in general government is found to prove "with clear and convincing evidence" that terms: to refer matter to Attorney have used revenue shar- program was not funded, directly or indirectly, General, to exercise powers and ing funds in a discrim- with GRS monies. functions provided by Title VI inatory fashion. This of Civil Rights Act of 1964, or includes the authority Extensive hearing and compliance procedures are to take such other action as may to withhold all or a spelled out requiring time limits for investiga- be provided by law. portion of entitlement tions, compliance, administrative procedures, and funds due to the govern- court actions. ment and to require re- payment of funds expended Private civil suits are authorized after the ex- in a discriminatory haustion of administrative remedies. fashion. Matching Revenue sharing funds may not be No change. Matching prohibition eliminated. Prohibition utilized to meet Federal grant matching requirements. Davis-Bacon Davis-Bacon (minimum-wage) applies No change. No change. Provision to construction projects funded 25 percent or more with revenue sharing monies. Priority Local governments may use funds for No change. Priorities eliminated. Categories any capital projects but only for oper- ating and maintenance expenses of pro- grams in eight priority expenditure categories (public safety, environmen- tal protection, public transportation, health, recreation, libraries, social services for the poor or aged, and financial administration.) Congressional No general review of program Secretary of the Treasury Secretary of Treasury must make an annual report Review is required. to report to Congress two on program. Comptroller General is to review years before expiration ORS compliance activities. date. State LIBRARY States must maintain level of No change. States must maintain level of funds transferred Maintenance fund transfers to localities to localities as of Fiscal '76, FORD of Effort as of Fiscal '72. it Auditing Recipient governments must No change. Annual "independent" audit required of all State Requirements follow standard fiscal and local finances except where the cost of such OFFICE accounting and auditing audits is disproportionately large in relation procedures. Federal govern- to GRS funds. ment is permitted to audit any recipient. Anti-lobbying No provision. No provision. No recipient governments may use, directly or in- Provisions directly, any GRS funds for "lobbying or to influence any legislation regarding the Act." Z # & FORD CERALD POROTIBRARY LIBRARY THE WHITE HOUSE WASHINGTON April 9, 1976 MEMORANDUM FOR Paul PAUL O'NEILL FROM PAUL MYER SUBJECT: Entitlement Financing for General Revenue Sharing The funding provision of the current Act and the President's proposed legislation to extend General Revenue Sharing providing combined authorization- appropriation of funds over a long-term period has generated considerable opposition among many Mem- bers who otherwise support the revenue sharing concept and those Members who strongly oppose the program's continuation for other reasons. After rejecting the President's proposal, the House Sub- committee had tentatively adopted a short-term extension of the program's authorization only, making its funding subject to the annual appropri- ations process. The Subcommittee has now reversed that decision, voting to authorize continuation of General Revenue Sharing as a 3 3/4-year entitlement program. The entitlement financing amendment adopted by the Subcommittee was developed as a realistic approach to the highly controversial question of how General Revenue Sharing should be funded. The amendment does not substantially modify the basic tenets of the revenue sharing concept, but it does answer the argument of those Members who have charged that the existing funding provision by-passes the traditional Congressional appropriations process and circumvents the newly-established Budget Act procedures designed to control long-term spending'actions. LIBRARY BERALD ? FORD -2- One of the principle objectives of the Budget Act was to bring so-called backdoor spending within the scope of the appropriations process. The Budget Act (section 401) defines three types of "new spending authority" and sets forth their relation- ship to the appropriations process in order to promote more comprehensive and consistent control over spending actions. The Budget Act draws dis- tinctions between these types of spending legislation and establishes special, procedures for their consider- ation. With respect to*new contract authority and borrowing authority legislation, such bills must contain a provision that funding is effective only to the extent or in such amounts as are provided in appropriations acts. However, the Budget Act established different procedures with respect to the third type of new spending authority, entitlement financing. As defined in the Budget Act (section 401 (c) (2) (c)), entitlement legislation provides temporary or perma- nent authority to make payments (including loans and grants), the budget authority for which is not provided for in advance by appropriation acts, to any person or government if, under the provision of law contain- ing such authority, the Federal Government is obligated to make such payments to persons or governments who meet the requirements established by such law. In recognition of the need to provide for long-term funding of certain Federal programs, the Budget Act established specific procedures for consideration of legislation providing entitlement authority (section 401 (b) (1), (2) and (3)). First, since legislation providing entitlement authority could not become effective prior to the start of the new fiscal year, the Budget Act provides that such legislation would be fully subject to the reconcilia- tion process. Second, legislation providing entitlement authority would be referred to the respective Appropriations Committees if it would generate new budget authority in excess of the allocation made under the latest Congressional Budget Resolution for the new fiscal FORD is LIBRARY -3- year. Such legislation would be referred for no more than 15 days, with the Appropriations Committee auto- matically discharged from consideration if it has not reported during this period. The Appropriations Com- mittee may report the legislation with an amendment limiting the total amount of new entitlement authority; however, their jurisdiction extends only to the cost of the program involved and not to substantive changes. Further, entitlement financing does not violate either the jurisdiction of the Appropriations Committee or Rule XXI of the House. Appropriations Committee juris- diction was specifically rejected by the House-Senate Conference Committee on the Budget Act (the House- passed bill would have made all new entitlements effective only as provided in appropriation acts), except to the extent that entitlement authority is contained in annual appropriations acts (and therefore consistent with Rule XXI). Not only is legislation providing entitlement authority clearly recognized as a form of spending and within those provisions of the Budget Act designed to control long-term spending actions, the Budget Act specifically contemplates the application of the entitlement financing approach to legislation extending the General Revenue Sharing program. In fact, when stipulating certain exceptions to the Budget Act provisions for consideration of entitlement programs (e.g., Social Security), Section 401 (d) (2) specifically provides that the current Act authorizing General Revenue Sharing payments or legislation extending it could also be exempted from these procedures if Congress were so inclined. Based upon this analysis, it appears that the entitle- ment financing approach for General Revenue Sharing represents both an acceptable legislative and substantive resolution of the funding method issue. The approach is consistent with the Budget Act and the President's objective. While subject to the provisions of the Budget Act and the annual appropriations process, in practice, since these are entitlement payments which the Federal Government is obligated to make to eligible FORD : LIBRARY -4- recipients, the annual process is pro forma and the results would be nearly identical to the funding provisions of the current Act and the President's renewal bill. Attached per your request is a copy of the entitle- ment financing amendment adopted by the Subcommittee on Thursday, April 8. As I noted in our phone con- versation, it does not address the level of funding or duration of the program issues. These matters are still open and will, be considered in full com- mittee. Attachment CC: Jim Cannon Max Friedersdorf Art Quern FORD : OTHER LIBRARY orts Drin enset al associa founds ed bluow adiseex to enolalvorg .ffid Iswanex add 10 e et desupos sway reg hamoodu? Hatch and vd Bedgebs /Them - looks good Snow esed? пазрозд orts to moldsmub TO 1107 ni bas nogo Day Can - looks bad For aid - veto quick Comes mic IDD xsM day FEC- - TRANSIS DEBUTO GNOF Marsh THE WHITE HOUSE WASHINGTON April 30, 1976 STAFF BRIEFING ON GENERAL REVENUE SHARING RENEWAL LEGISLATIVE SITUATION Saturday, May 1, 1976 The Oval Office From: Jim Cannon June I. PURPOSE To brief the President on the status of General Revenue Sharing renewal legislation, and to get Presidential guidance on strategy as the bill is taken up by the full Committee. II. BACKGROUND, PARTICIPANTS & PRESS PLAN A. Background: On Tuesday, May 4, the House Government Operations Committee will begin consideration of the General Revenue Sharing bill reported by the Fountain Subcommittee. Although the Subcommittee did not endorse the President's proposal, the reported bill includes most of the major elements proposed by the President. Congressmen Frank Horton and Jack Wydler, ranking minority members of the Committee and Subcommittee respectively, need guidance on your strategy for the Committee sessions next week and the floor battles to follow. Four major issues will dominate full Commit- tee consideration: 1. length of program and level of funding; 2. method of funding; 3. civil rights; and 4. formula revision. Tab A is a summary of these points. FORD & LIBRARY EARAD B. Legislative Assessment: There has been a 36.5% turnover in the House since 1972 when General Revenue Sharing was enacted. The key House vote in 1972 was on a motion to adopt a "closed rule" for consideration of the General Revenue Sharing bill. In 1972, the motion passed by a vote of 223-185 (R 113-57; D 110-128). Today, 63% of the Members (141 Members) who supported General Revenue Sharing on this critical vote are still serving, while nearly 70% (126 Members) of those opposed remain Members. There are 157 new Members since 1972 (103 D; 54 R). Tab B is a statistical display of the key rule vote. The opposition represented a coalition of liberal Democrats opposed to "no strings" spending, and conservative Democrats and Republicans who opposed the program for a variety of philosophical reasons including increased spending and the funding method which by-passed the traditional appropriations process. With respect to the latter, current Members of the Appropriations Committee voted 31-15 (R 8-7; D 23-8) against General Revenue Sharing on this vote. Members of the new Budget Committee voted 14-9 (R 4-4; D 10-5) against. Tab C is a list of all current Republican Members who voted "wrong" on this rule vote in 1972. The nature of the opposition in the 94th Congress closely parallels that expressed in 1972, reflecting the same philosophical differences over the control and distribution of Federal funds and appropriate Congressional procedures. C. Participants: See Tab D. D. Press Plan: To be announced. GSRALO FORD LIBRARY TAB A -- REVIEW OF MAJOR ISSUES 1. Length of Program and Level of Funding President's Proposal: 5 3/4 years; total funding of $39.5 billion, including $150 million annual increase. Subcommittee Bill: 3 3/4 years; total funding of $24.9 billion, with no annual increase (funds frozen at 1976 level of $6.65 billion). Comment: Committee Democrats may attempt to get a 1 3/4-year extension. Governors and Mayors are willing to accept a 3 3/4-year compromise. A longer extension may be obtainable in the Senate. All attempts to increase funding, including those advanced by Members wanting to change the formula, were rejected. No serious effort is anticipated to increase the level of funding, except to the extent the formula is modified. 2. Method of Funding President's Proposal: Continue the present combined authorization-appropriation approach. Subcommittee Bill: Establishes an "entitlement" financing approach. Comment: The entitlement financing adopted by the Subcommittee was developed as a realistic approach to the highly controversial question of how General Revenue Sharing should be funded. It does not substantially modify the basic tenets of the revenue sharing concept, but it does answer the argument of influential Members such as George Mahon and Jack Brooks who have charged that the existing funding provision bypasses the traditional Congressional appropriations process and circumvents the newly-established Budget Act procedures designed FORD to control long-term spending actions. LIBRARY 3. Civil Rights President's Proposal: Retains current nondiscrimination requirement, but clarifies the Secretary's authority to withhold all or a portion of entitlement funds, 2 to require repayments, and terminate eligibility where revenue sharing funds have been expended in a discriminatory fashion. Subcommittee Bill: Expands nondiscrimination requirements to cover all State and local programs except where recipient can prove "with clear and convincing evidence" that the program was not funded, directly or indirectly, with revenue sharing funds. Extensive hearing and compliance procedures are spelled out requiring time limits for investigations, compliance, administrative procedures and court actions. Private civil suits are authorized only after the exhaustion of administrative remedies. Comment: There has been substantial criticism of the enforcement record under the current Act. The subcommittee provision was drafted as a compromise which the Members hoped would neutralize the issue and gain some liberal support. It now appears that the civil rights community and their Congressional allies will not support the bill without more drastic changes, and the Subcommittee provision may go too far for most moderate and conservative Members. An effort will be made to return to a position more consistent with, but possibly stronger than, the President's proposal. 4. Formula Provisions President's Proposal: Retains current formula with a slight increase in upper constraint. Subcommittee Bill: Retains current formula without change, but attempts to tighten eligibility criteria. Comment: Liberal Democrats will renew their attempts to modify formula or add a new provision for the distribution of increased payments to "needy" governments. FORDO & GERALD LIBRARY TAB B -- STATISTICAL DISPLAY House vote on motion to end debate and adopt "closed rule" for consideration of H. R. 14370. Motion agreed to, 223-185, June 21, 1972. A yea vote was in support of General Revenue Sharing. Republicans Democrats Total 1972 1976 1972 1976 1972 1976 YEA 113 57 110 84 223 141 NAY 57 32 128 94 185 126 NOT VOTING 8 2 16 6 24 8 TOTAL, 92nd 178 91 254 184 432* 267 Congress "NEW" MEMBERS -- 54 - 103 -- 157 TOTAL, 94th -- 145 -- 287 -- 432* Congress * 2 vacancies, Speaker not voting. GERALD ? FORD LIBRARY TAB C - ALL CURRENT REPUBLICAN MEMBERS VOTING AGAINST GENERAL REVENUE SHARING ON KEY VOTE IN 1972 Republicans Andrews Hutchinson Archer Lujan Ashbrook Michel Broyhill Myers (Ind.) Burke Rhodes Carter Robinson Cederberg Rousselot Clancy Ruppe Clawson Schneebeli Collins Sebelius Crane Skubitz Derwinski Spense Devine Snyder Edwards Talcott Findley Vander Jagt Frey Young (Fla.) FORD is LIBRARY GERALD TAB D -- PARTICIPANTS The Vice President Jack Marsh, Counsellor to the President James Cannon, Assistant to the President James Lynn, Director of the Office of Management and Budget Ed Schmults, Deputy Counsel to the President Paul O'Neill, Deputy Director of the Office of Management and Budget Charles Leppert, Deputy Assistant to the President Robert Wolthuis, Deputy to the Assistant to the President Paul Myer, Assistant Director, Domestic Council Richard Albrecht, General Counsel, Department of the Treasury FORD & GENALD LIBRARY