Ask the Scholar
Document scope · 1 page
Scholar
Ask about this object, its catalog metadata, its source description, or the page inventory.
For page-specific OCR and visual context, open one of the page chats.
Source Description
This file contains material relating to the Domestic Council Review Group on Regulatory Reform and President Ford's meetings with regulatory commissioners.
Scholar Source Context
Document identity
localId
16988397
label
Regulatory Reform (13)
core
doc
dtoType
document
citationUrl
pageCount
1
Source metadata
id
16988397
sourceUrl
contentType
document
title
Regulatory Reform (13)
description
This file contains material relating to the Domestic Council Review Group on Regulatory Reform and President Ford's meetings with regulatory commissioners.
citationUrl
collections
James M. Cannon Files (Ford Administration)
James Cannon's Issues Files
subjects
Aeronautics, Commercial
Antitrust law
Government regulation
Independent regulatory commissions
Intergovernmental relations
Legislation
Regulatory reform
Trucking
iiifBase
thumbnailUrl
largeImageUrl
imageCount
1
hasImages
yes
source
import
hasTranscription
no
Source extras
naId
16988397
coverageEndDate
logicalDate
1976-12-31
month
12
year
1976
coverageStartDate
logicalDate
1975-06-01
month
6
year
1975
levelOfDescription
fileUnit
recordType
description
ocrSource
nara-archive
Single page context
seq
1
pageIndex
0
type
document
url
mediaId
aa425ee55f5874f7
ocrText
The original documents are located in Box 29, folder "Regulatory Reform (13)" 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States of America his copyrights in all of his unpublished writings in National Archives collections.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 29 of the James M. Cannon Files
at the Gerald R. Ford Presidential Library
THE WHITE HOUSE
WASHINGTON
TO:
JIM CANNON
FROM:
RAI HANZLIK
For your information.
Per our conversation.
Comment:
Per 1 yo quest but
Govt- bred GENALD R. FORD LTS
THE WHITE HOUSE
WASHINGTON
May 27, 1976
MEMORANDUM FOR:
JIM CANNON
FROM:
STEVE McCONAHEY
8GM
SUBJECT:
Government-to-Government
Regulations
Attached is a revised package for our government-to-govern-
ment reform program. The package includes a cover memo to
the President from you and Jim Lynn summarizing the plan in
response to his May 7th request. Included as well is a
revised description of our plan of attack including more
specific ideas on targets for action and a clearer des-
cription of how this effort will be undertaken. The third
item is a draft letter to the Cabinet outlining this program
and the assignments for each agency. Finally, there is a
list of Presidential activities associated with the start-up
of this effort.
I recommend that we agree on this package as soon as possible.
The OMB and Paul MacAvoy efforts are moving along in their
initial stages, and decisions are being made on how to
support and oversee those two efforts from the White House.
If we want to be cut into the deal, we need to act.
I recommend that you speak with Jim Lynn about this proposal
before the end of this week. He will be out of town four
days next week and then will be departing on June 10th for a
trip overseas. In the interim he is swamped with spring
reviews. We simply can not wait for his return before we
get moving.
Having seen the revised OMB and MacAvoy proposals, I am
convinced that there remains a need for overall White House
coordination of the regulatory reform efforts. This is
particularly true since all three activities will be af-
fecting the same agencies through different groups.
-2-
If I were a Cabinet Secretary, I would ask the question,
"how are all of these efforts being linked together?" At
the present time there is no answer to this question. I
anticipate that the submission of our proposal will force
this question to be answered.
Attachment
THE WHITE HOUSE
WASHINGTON
May 27, 1976
MEMORANDUM FOR:
THE PRESIDENT
FROM:
JAMES M. CANNON
JAMES T. LYNN
SUBJECT:
Government-to-Government Regulations
Reform Program
Attached to this memorandum is a plan of action and
related materials establishing a program to relieve
state and local governments of excessive Federal
regulations. This proposal is in response to your
request of May 7, 1976.
The proposed program includes the following key
elements:
Immediate attention focused on selected
priority problem areas, with initial re-
form results by September 1.
Consultation with and participation by
representative state, county and local
officials in the program, including the
final identification of program targets.
Initial focus on the three existing
block grant programs, which are experienc-
ing gradual "recategorization" through
regulations.
Primary responsibility for program results
assigned to the department and agency heads,
who will be tasked with drafting and imple-
menting individual agency action plans.
Joint Domestic Council/OMB oversight.
- 2 -
The specifics of the program are outlined and
discussed in Tab A. The program will be under the
general direction of Steve McConahey, your Special
Assistant for Intergovernmental Affairs, with day-
to-day management of the program directed by Ray
Hanzlik, who ran the Domestic Council public
hearings last fall.
Tab B is a memorandum to the Cabinet outlining their
role and responsibilities in the program.
Tab C is a suggested list of Presidential actions in
support of the program. We recommend a briefing and
discussion of this effort occur at the next Cabinet
meeting.
APPROVE
DISAPPROVE
COMMENT:
Attachments
GOVERNMENT-TO-GOVERNMENT REGULATIONS
REFORM PROGRAM
This proposal sets forth a plan of action in response
to the President's request of May 7, 1976, to initiate
a program that will relieve state and local govern-
ments of excessive Federal administration regulations.
THE SITUATION
Two major themes of this Administration have been the
reduction of big government, and the return of more
authority to state and local governments. A number of
Presidential actions has given substance to these
themes, with the block grant proposals and support for
the re-enactment of general revenue sharing being prime
examples. Moreover, this commitment to rebalance the
relationship between the Federal government and state
and local governments has gained strong bi-partisan
support.
Unfortunately, the President's initiatives and reforms
in Federal assistance to state and local governments
are seriously undermined by the administrative regula-
tions and procedures imposed on state and local officials
by Federal agencies. This problem is most acute in cate-
gorical grant programs, which represent eighty-percent
($48 of $60 billion) of the Federal aid that goes to
states and localities. However, evidence is also
available to suggest that the existing block grant
programs are becoming increasingly regulated by
administrative actions. Although some of these pro-
gram regulations reflect a Congressional mandate, a
substantial number are administratively initiated.
The administrative and management burden imposed on
state and local governments by these regulations has
reached the point where it is now the primary inter-
governmental issue for governors, mayors and county
officials.
- 2 -
Evidence of the seriousness and urgency of this
problem has come from many sources. Testimony on
the subject by state and local officials was heard
at each of the Domestic Council Public Forums held
last fall. Federal over-regulation and program
management were priority subjects discussed at the
February meeting of the National Governors Conference.
Secretary Simon, in his meetings with governors over
the past year, has collected extensive data supporting
this Federal imposition on state and local administra-
tions. The Advisory Commission on Intergovernmental
Relations, the National Commission on Productivity,
the Federal Paperwork Commission, the National Science
Foundation, and Brookings have studied this question
and urge remedial action. And, along with the profes-
sional literature, the media are giving this subject
increased attention.
The message from state and local officials can be
summarized essentially as follows: Many Federal ad-
ministrative regulations promulgated by the departments
and agencies are inconsistent, unnecessarily restrictive,
overlapping, inflexible, insensitive to local needs,
and/or unnecessary. Their impact increases program
costs, compromises program benefits, complicates pro-
gram administration, expands state and local bureau-
cracies, steals responsibility and decision-making
authority from state and local officials, and adds to
the beneficiaries' frustration and disillusionment with
government. As one Governor has stated: "The best
thing the Federal Government could do to help state
and local government would be to get some of the regula-
tions out of our hair and let us do the job."
Although the Administration is addressing the Federal
regulatory problem, the efforts to date have not focused
on government-to-government regulations. The focus of the
Agenda for Government Reform Act program, announced on
May 13, 1976, and the EPB task force effort to review
specific Federal program regulations in FEA and OSHA is
on the private sector and the general economy. Moreover,
the recent OMB proposal on management initiatives, though
including some aspects of regulatory reform, concentrates
on the control and oversight of the Washington bureaucracy.
- 3 -
As a result, a major gap exists in the overall
regulatory reform effort. To fill this gap, a
Presidentially directed and White House coordinated
effort is required to attack the burdensome problem
of government-to-government regulations, thereby
committing action and resources to the President's
policy of restoring to state and local governments
their lost authority.
The time is ideal for Presidential action on this pro-
blem. The President's long-standing position against
unnecessary Federal requirements on state and local
governments is fully consistent with the sentiments of
the people and their local officials. The current
situation provides a ready-made opportunity to take
the initiative on this big government issue -- an issue
that impacts on the lives of most Americans and has con-
tributed to the "anti-Washington" mood. Given the
supportive attitude that most governors, mayors and
county officials have for the President's intergovern-
mental policies, this opportunity affords a useful
tool to mobilize strong bi-partisan support from these
state and local leaders.
PROPOSED ACTION
In response to this situation, a joint White House-OMB
program is proposed to focus needed Presidential atten-
tion on the problems of Federal government-to-government
regulations. This program is designed to produce visible,
near-term substantive results, while simultaneously in-
stituting procedures to maintain a longer-term, compre-
hensive reform effort. Specifically, this effort is
aimed to accomplish threeobjectives:
1. Implementation of reform measures for
a select number of regulatory problem
areas, identified as the most onerous for
state and local governments, and adaptable
to prompt administrative reform.
- 4 -
2. Establishment of uniform guidelines
within the Executive Branch for con-
sultation, review and comment by
state and local officials concerning
proposed new regulations, and Secre-
tarial review and analysis prior to
promulgation.
3. Initiation of an on-going reform
program to emcompass additional
Federal assistance programs impact-
ing on state and local governments.
The timing of this program and the availability of
resources, along with the uniqueness of the problem and
the constituency affected, dictate that the proposed
program incorporate several essential elements:
Primary responsibility for the program
should be placed within the agencies
building upon existing reform activities
and stimulating new efforts where none
exist; in both cases, agency resources
and administrative mechanisms will be
utilized. The creation of a new, ad hoc
program structure should be avoided.
White House leadership (jointly by the
Domestic Council and OMB) and coordination
throughout the program are required, es-
pecially to coordinate inter-agency efforts.
The program should complement and not
duplicate the other Administration regula-
tory reform efforts in progress: the task
force program under Paul MacAvoy's direc-
tion; the management improvement effort
initiated by Jim Lynn; the Agenda for
Government Reform program headed by Ed
Schmults.
Final identification and selection of
program targets must include inputs from
state and local officials, who could also
perform an on-going advisory role. Con-
sultations with members of Congress may
also be advisable at the appropriate time.
- 5 -
PROGRAM END-PRODUCTS
As planned, this effort will aim at achieving specific
improvements in Federal government-to-government regula-
tions, including:
Reduction of grant application
paperwork and processing.
Simplification and elimination of
inconsistencies in planning require-
ments and documentation.
Elimination of unnecessary and/or
redundant reporting requirements.
Elimination of unnecessary mandates;
e.g., structural, service or organi-
zation requirements, not relating to
program performance.
Identification of legislative changes
necessary to achieve administrative
simplification.
PROGRAM TARGETS
The final selection of specific targets will in part be
determined through consultation with agency officials
and state and local government representatives. However,
at a minimum, four general target areas have been identi-
fied for initial attention:
1. The Block Grant Programs.
There is growing evidence that existing block grants,
designed to provide state and local governments maximum
flexibility in the use of Federal funds, are being en-
cumbered by administrative rules and procedures. One
frequently cited example is the reporting on Affirmative
Action/EEO compliance required by the CETA and LEAA block
grant programs; another is inconsistent rulings by
different agency regional offices through the ten Federal
regions. These programs are currently under study by
several organizations, including OMB, ACIR, Brookings and
the National Academy of Sciences, as well as the program
agencies. Results from these efforts will help determine
what changes in regulations and procedures are necessary.
- 6 -
Three existing block grants to be studied under
this effort are:
Omnibus Crime Control and Safe
Streets Act of 1968, administered
by the LEAA, Department of Justice.
Comprehensive Employment and
Training Act of 1973 (CETA),
administered by the Employment
and Training Administration,
Department of Labor.
Housing and Community Development
Act of 1974, administered by the
Department of Housing and Urban
Development.
2. Categorical Grant Programs.
The Federal categorical assistance programs for state
and local governments present a very broad target for
regulations reform, and the attention here will be
selective and limited in the initial program phase.
The breadth of this target, however, is partly offset
by the large percentage of programs administered by
one agency, the Department of Health, Education and
Welfare. Fortunately, HEW has recently initiated an
ambitious and comprehensive in-house regulatory reform
program aimed at programs considered most burdensome to
the states and localities. In this case, the White
House program is designed to further energize the HEW
effort, perhaps giving added focus to one or two key
problem areas, and to activate similar programs in the
other Federal agencies. Within this target area, specific
elements of categorical programs may be selected for ini-
tial attention, such as planning requirements and plan
utilization, reporting requirements, and audit procedures.
And, some attention will be given to the simplification
of categorical programs where block grant legislation
has been proposed but not enacted (e.g., health, social
services, education.)
- 8 -
consulting and review of new regulations vary widely,
both among and within agencies. There is near-unanimous
opinion that the established comment procedures for pro-
posed new regulations are unevenly enforced, narrow in
jurisdiction (permits comment only by the major public
interest groups), and inefficiently administered by the agencies.
Specific improvements will be sought through consistent
guidelines for Secretarial review and state and local
government consultation.
PROGRAM ORGANIZATION
The White House
Although the major responsibility for achieving the
objectives of this program will rest with the agencies,
visible and active White House leadership is essential
to:
Give the effort a clear Presidential
mandate.
Signal this mandate to the departments
and agencies.
Demonstrate to state and local officials
the priority and seriousness of the pro-
gram.
Insure that the objectives are achieved in
a timely manner.
Provide coordination among the departments
and agencies.
White House oversight will be a joint Jim Lynn/Jim Cannon
responsibility, with general direction of the effort as-
signed to Special Assistant to the President for Inter-
governmental Affairs, Steve McConahey and daily program
management provided by Ray Hanzlik of the Domestic Council.
Limited staff support will be detailed from the partici-
pating agencies, as needed, and a budget of $10-25,000
from Domestic Council funds will be available for any
meeting, travel, consultant or related administrative
expenses.
- 9 -
Management of the effort will involve monitoring of
progress, coordinating inter-agency efforts, bridging
specific ideas with state, county and local experience.
Specific corrective action will be reviewed by the
normal channels of the Domestic Council, OMB, and
other selected staff.
Office of Management and Budget
Program implementation is dependent on OMB program
co-sponsorship and assistance, particularly from the
management side of the organization. OMB will provide
several essential elements of this program:
Program expertise and analytical
capabilities needed to insure quality
control in program results.
Linkage, where necessary, with the
Federal intergovernmental field network,
including the Federal Regional Councils
and the Under Secretaries Group.
Jurisdiction and supervision of the A-85
Circular program, which is currently under
OMB review, and which will be an integral
part of the regulations comment procedures
established by this program.
Coordination with the new management initia-
tives program, which includes some regulatory
reform elements.
Reinforcement of the Presidential mandate
given this program, which would be viewed
skeptically by the Federal agencies and
by state and local officials without OMB
involvement.
A close, day-to-day working relationship between White
House program personnel and appropriate OMB staff will
be maintained throughout the reform effort.
GERALD
- 10 -
Federal Departments and Agencies
The heads of the departments and independent agencies
will be tasked with the responsibility of drafting and
implementing individual plans for agency regulations
reform, and with supporting the elements of the over-
all program involving cross-agency efforts. Each
department and agency head will be requested to appoint
a high-level subordinate, with direct access to the
Secretary or Administrator and with full authority to
direct and manage the agency program. These agency
program directors will collectively form a program
"working group" that will meet regularly with White
House and OMB program personnel to monitor and guide
the progress of the overall effort.
Advisory Resources
To insure an effective link between this effort and
(a) state, county and local officials, as well as
(b) White House policy, two advisory groups will be
utilized:
A. The New Coalition
Key to the acceptance and success of this program
is direct involvement by state, county and local offi-
cials. The New Coalition, a group of representative
governors, mayors, county executives and state legis-
lators (formed to provide coordinated response to
intergovernmental and programmatic issues) provides
an important source of ideas and advice for this effort.
(Governor Bob Ray of Iowa is its current Chairman.)
This group can assist in the identification of priority
problem areas and suggest workable reforms. It
will be called upon periodically to help select targets
and provide reactions to possible improvements.
B. White House/OMB Advisory Group
An ad hoc advisory group within the White House,
formed to provide policy guidance for the program, and
to act as a coordinative group vis-a-vis related projects
and efforts, will be convened periodically. Members of
the group will consist of representatives from the Domestic
Council, OMB, and other selected White House staff units.
MEMORANDUM FOR:
THE HONORABLE
Secretary of
FROM:
JAMES T. CONNOR
SUBJECT:
Government-to-Government Regulations
Reform Program
The President has directed the implementation of a
program aimed at relieving state and local governments
of the growing burden of excessive Federal public assis-
tance program regulations. This effort is an important
and integral part of the President's overall regulatory
reform program. It is designed to support and build
upon the individual departmental and agency reform pro-
grams already underway, providing central coordination
and integration of the overall effort. The program has
three stated objectives:
1.
Implementation of reform measures for
a select number of regulatory problem
areas, identified as the most onerous
for state and local governments, and
adaptable to prompt administrative re-
form.
2. Establishment of uniform guidelines
within the Executive Branch for con-
sultation, review and comment by
state and local officials concerning
proposed new regulations, and Secre-
tarial review and analysis prior to
promulgation.
3. Initiation of an on-going reform
program to encompass additional Federal
assistance programs impacting on state
and local governments.
- 2 -
Attached as Tab A is the plan outlining this effort,
which includes the following key elements:
Primary responsibility for program
results to rest with the department
and agency heads, who are tasked with
drafting and implementing individual
agency plans.
Immediate attention to focus on
selected priority problem areas,
with initial reform results by
September 1.
Program targets to include regulations
and procedures for the existing block
grants, selected categorical programs,
and procedures for comment and review
of new regulations.
Consultation with and participation by
representative state, county and local
government officials in the program.
Joint Domestic Council/OMB program
management and oversight.
The President has requested full support and participation
by members of the Cabinet and heads of the independent
agencies in this effort, and specifically requests the
following actions be taken:
1. Appointment of a high-level subordinate
with direct access to the department
heads, to act as the departmental con-
tact with the White House management
group and as the in-house program
director.
2. Preparation of a departmental plan of
action based on the guidelines outlined
in the attached plan and provided by
the White House management group in a
meeting scheduled for
-
Plans should be ready for review by
.
- 3 -
3. Commitment of sufficient personnel
and resources to insure substantive
reforms in the selected target areas,
with initial results evident by
September 1, 1976.
The President recognizes the differences in program
administration and regulatory practices among the
various departments and agencies, and thus is giving
maximum responsibility to agency heads to design and
implement efforts tailored to individual agency re-
quirements. White House oversight will provide
necessary program coordination, inter-agency coopera-
tion and policy guidance.
White House oversight will be a joint Jim Lynn/Jim
Cannon responsibility, with general direction of the
effort assigned to Special Assistant to the President
for Intergovernmental Affairs, Steve McConahey, and
daily program management provided by Ray Hanzlik of
the Domestic Council.
PRESIDENTIAL ACTIVITIES
Presidential
Media
Date
Event/Location
Action
Reason
Activity
Cabinet Meeting
Briefing on
Kick-off
Possible Press
(Cabinet Room)
Regulatory Reform
effort
briefing
Program
Mid-to-late
Major Speaking
Speech on
Publicize
Full Coverage
June
Forum (Before
Big Government
Regulatory
State Legisla-
Reform effort
ture or similar
body)
June
Meeting of New
Discussion
Signal priority
Press Conferer
Coalition
session with
of effort to
by New Coaliti
(White House)
group
state and local
governments
THE WHITE HOUSE
WASHINGTON
May 27, 1976
MEMORANDUM FOR:
THE PRESIDENT
FROM:
JAMES M. CANNON
JAMES T. LYNN
SUBJECT:
Government-to-Government Regulations
Reform Program
Attached to this memorandum is a plan of action and
related materials establishing a program to relieve
state and local governments of excessive Federal
regulations. This proposal is in response to your
request of May 7, 1976.
The proposed program includes the following key
elements:
Immediate attention focused on selected
priority problem areas, with initial re-
form results by September 1.
Consultation with and participation by
representative state, county and local
officials in the program, including the
final identification of program targets.
Initial focus on the three existing
block grant programs, which are experienc-
ing gradual "recategorization" through
regulations.
Primary responsibility for program results
assigned to the department and agency heads,
who will be tasked with drafting and imple-
menting individual agency action plans.
Joint Domestic Council/OMB oversight.
- 2 -
The specifics of the program are outlined and
discussed in Tab A. The program will be under the
general direction of Steve McConahey, your Special
Assistant for Intergovernmental Affairs, with day-
to-day management of the program directed by Ray
Hanzlik, who ran the Domestic Council public
hearings last fall.
Tab B is a memorandum to the Cabinet outlining their
role and responsibilities in the program.
Tab C is a suggested list of Presidential actions in
support of the program. We recommend a briefing and
discussion of this effort occur at the next Cabinet
meeting.
APPROVE
DISAPPROVE
COMMENT:
Attachments
GOVERNMENT-TO-GOVERNMENT REGULATIONS
REFORM PROGRAM
This proposal sets forth a plan of action in response
to the President's request of May 7, 1976, to initiate
a program that will relieve state and local govern-
ments of excessive Federal administration regulations.
THE SITUATION
Two major themes of this Administration have been the
reduction of big government, and the return of more
authority to state and local governments. A number of
Presidential actions has given substance to these
themes, with the block grant proposals and support for
the re-enactment of general revenue sharing being prime
examples. Moreover, this commitment to rebalance the
relationship between the Federal government and state
and local governments has gained strong bi-partisan
support.
Unfortunately, the President's initiatives and reforms
in Federal assistance to state and local governments
are seriously undermined by the administrative regula-
tions and procedures imposed on state and local officials
by Federal agencies. This problem is most acute in cate-
gorical grant programs, which represent eighty-percent
($48 of $60 billion) of the Federal aid that goes to
states and localities. However, evidence is also
available to suggest that the existing block grant
programs are becoming increasingly regulated by
administrative actions. Although some of these pro-
gram regulations reflect a Congressional mandate, a
substantial number are administratively initiated.
The administrative and management burden imposed on
state and local governments by these regulations has
reached the point where it is now the primary inter-
governmental issue for governors, mayors and county
officials.
- 2 -
Evidence of the seriousness and urgency of this
problem has come from many sources. Testimony on
the subject by state and local officials was heard
at each of the Domestic Council Public Forums held
last fall. Federal over-regulation and program
management were priority subjects discussed at the
February meeting of the National Governors Conference.
Secretary Simon, in his meetings with governors over
the past year, has collected extensive data supporting
this Federal imposition on state and local administra-
tions. The Advisory Commission on Intergovernmental
Relations, the National Commission on Productivity,
the Federal Paperwork Commission, the National Science
Foundation, and Brookings have studied this question
and urge remedial action. And, along with the profes-
sional literature, the media are giving this subject
increased attention.
The message from state and local officials can be
summarized essentially as follows: Many Federal ad-
ministrative regulations promulgated by the departments
and agencies are inconsistent, unnecessarily restrictive,
overlapping, inflexible, insensitive to local needs,
and/or unnecessary. Their impact increases program
costs, compromises program benefits, complicates pro-
gram administration, expands state and local bureau-
cracies, steals responsibility and decision-making
authority from state and local officials, and adds to
the beneficiaries' frustration and disillusionment with
government. As one Governor has stated: "The best
thing the Federal Government could do to help state
and local government would be to get some of the regula-
tions out of our hair and let us do the job."
Although the Administration is addressing the Federal
regulatory problem, the efforts to date have not focused
on government-to-government regulations. The focus of the
Agenda for Government Reform Act program, announced on
May 13, 1976, and the EPB task force effort to review
specific Federal program regulations in FEA and OSHA is
on the private sector and the general economy. Moreover,
the recent OMB proposal on management initiatives, though
including some aspects of regulatory reform, concentrates
on the control and oversight of the Washington bureaucracy.
- 3 -
As a result, a major gap exists in the overall
regulatory reform effort. To fill this gap, a
Presidentially directed and White House coordinated
effort is required to attack the burdensome problem
of government-to-government regulations, thereby
committing action and resources to the President's
policy of restoring to state and local governments
their lost authority.
The time is ideal for Presidential action on this pro-
blem. The President's long-standing position against
unnecessary Federal requirements on state and local
governments is fully consistent with the sentiments of
the people and their local officials. The current
situation provides a ready-made opportunity to take
the initiative on this big government issue -- an issue
that impacts on the lives of most Americans and has con-
tributed to the "anti-Washington" mood. Given the
supportive attitude that most governors, mayors and
county officials have for the President's intergovern-
mental policies, this opportunity affords a useful
tool to mobilize strong bi-partisan support from these
state and local leaders.
PROPOSED ACTION
In response to this situation, a joint White House-OMB
program is proposed to focus needed Presidential atten-
tion on the problems of Federal government-to-government
regulations. This program is designed to produce visible,
near-term substantive results, while simultaneously in-
stituting procedures to maintain a longer-term, compre-
hensive reform effort. Specifically, this effort is
aimed to accomplish threeobjectives:
1. Implementation of reform measures for
a select number of regulatory problem
areas, identified as the most onerous for
state and local governments, and adaptable
to prompt administrative reform.
- 4 -
2. Establishment of uniform guidelines
within the Executive Branch for con-
sultation, review and comment by
state and local officials concerning
proposed new regulations, and Secre-
tarial review and analysis prior to
promulgation.
3. Initiation of an on-going reform
program to emcompass additional
Federal assistance programs impact-
ing on state and local governments.
The timing of this program and the availability of
resources, along with the uniqueness of the problem and
the constituency affected, dictate that the proposed
program incorporate several essential elements:
Primary responsibility for the program
should be placed within the agencies
building upon existing reform activities
and stimulating new efforts where none
exist; in both cases, agency resources
and administrative mechanisms will be
utilized. The creation of a new, ad hoc
program structure should be avoided.
White House leadership (jointly by the
Domestic Council and OMB) and coordination
throughout the program are required, es-
pecially to coordinate inter-agency efforts.
The program should complement and not
duplicate the other Administration regula-
tory reform efforts in progress: the task
force program under Paul MacAvoy's direc-
tion; the management improvement effort
initiated by Jim Lynn; the Agenda for
Government Reform program headed by Ed
Schmults.
Final identification and selection of
program targets must include inputs from
state and local officials, who could also
perform an on-going advisory role. Con-
sultations with members of Congress may
also be advisable at the appropriate time.
- 5 -
PROGRAM END-PRODUCTS
As planned, this effort will aim at achieving specific
improvements in Federal government-to-government regula-
tions, including:
Reduction of grant application
paperwork and processing.
Simplification and elimination of
inconsistencies in planning require-
ments and documentation.
Elimination of unnecessary and/or
redundant reporting requirements.
Elimination of unnecessary mandates;
e.g., structural, service or organi-
zation requirements, not relating to
program performance.
Identification of legislative changes
necessary to achieve administrative
simplification.
PROGRAM TARGETS
The final selection of specific targets will in part be
determined through consultation with agency officials
and state and local government representatives. However,
at a minimum, four general target areas have been identi-
fied for initial attention:
1. The Block Grant Programs.
There is growing evidence that existing block grants,
designed to provide state and local governments maximum
flexibility in the use of Federal funds, are being en-
cumbered by administrative rules and procedures. One
frequently cited example is the reporting on Affirmative
Action/EEO compliance required by the CETA and LEAA block
grant programs; another is inconsistent rulings by
different agency regional offices through the ten Federal
regions. These programs are currently under study by
several organizations, including OMB, ACIR, Brookings and
the National Academy of Sciences, as well as the program
agencies. Results from these efforts will help determine
what changes in regulations and procedures are necessary.
- 6 -
Three existing block grants to be studied under
this effort are:
Omnibus Crime Control and Safe
Streets Act of 1968, administered
by the LEAA, Department of Justice.
Comprehensive Employment and
Training Act of 1973 (CETA),
administered by the Employment
and Training Administration,
Department of Labor.
Housing and Community Development
Act of 1974, administered by the
Department of Housing and Urban
Development.
2. Categorical Grant Programs.
The Federal categorical assistance programs for state
and local governments present a very broad target for
regulations reform, and the attention here will be
selective and limited in the initial program phase.
The breadth of this target, however, is partly offset
by the large percentage of programs administered by
one agency, the Department of Health, Education and
Welfare. Fortunately, HEW has recently initiated an
ambitious and comprehensive in-house regulatory reform
program aimed at programs considered most burdensome to
the states and localities. In this case, the White
House program is designed to further energize the HEW
effort, perhaps giving added focus to one or two key
problem areas, and to activate similar programs in the
other Federal agencies. Within this target area, specific
elements of categorical programs may be selected for ini-
tial attention, such as planning requirements and plan
utilization, reporting requirements, and audit procedures.
And, some attention will be given to the simplification
of categorical programs where block grant legislation
has been proposed but not enacted (e.g., health, social
services, education.)
- 7 -
3. Cross-Cutting Regulatory Problems.
Judging from comments and data available, one of
the regulatory problems most troublesome to the
states and localities is the inconsistencies and
overlap among regulations issued by different
Federal agencies. Several examples illustrate this
issue:
Guidelines differ across agencies
on the nature of public participa-
tion required in the development of
state plans necessary for Federal
funding.
Requirements imposed by Federal
agencies on a single jurisdiction
are in some cases duplicative,
uncoordinated and at times contra-
dictory.
OMB and GSA Circulars establish uniform
standards for Federal management prac-
tices, vis-a-vis state and local juris-
dictions. Yet in practice, Federal
rules, procedures and practices for
each program tend to evolve independently
and often at variance with the established
standards.
Agencies differ in their implementation
of the Uniform Relocation Assistance Act,
resulting in different assistance for
similar situations.
The effort in this area will focus on specific cross-
cutting regulatory problems in order to correct the
most serious duplications and inconsistencies.
4. New Regulations Procedures.
The regulations problem area that arouses the most
criticism from state, county and local officials is the
lack of opportunity to comment on proposed Federal regula-
tions and the lack of lead time to implement them. More-
over, some regulations do not receive a thorough Secretarial-
level review prior to issuance. The practices for
- 8 -
consulting and review of new regulations vary widely,
both among and within agencies. There is near-unanimous
opinion that the established comment procedures for pro-
posed new regulations are unevenly enforced, narrow in
jurisdiction (permits comment only by the major public
interest groups), and inefficiently administered by the agencies
Specific improvements will be sought through consistent
guidelines for Secretarial review and state and local
government consultation.
PROGRAM ORGANIZATION
The White House
Although the major responsibility for achieving the
objectives of this program will rest with the agencies,
visible and active White House leadership is essential
to:
Give the effort a clear Presidential
mandate.
Signal this mandate to the departments
and agencies.
Demonstrate to state and local officials
the priority and seriousness of the pro-
gram.
Insure that the objectives are achieved in
a timely manner.
Provide coordination among the departments
and agencies.
White House oversight will be a joint Jim Lynn/Jim Cannon
responsibility, with general direction of the effort as-
signed to Special Assistant to the President for Inter-
governmental Affairs, Steve McConahey and daily program
management provided by Ray Hanzlik of the Domestic Council.
Limited staff support will be detailed from the partici-
pating agencies, as needed, and a budget of $10-25,000
from Domestic Council funds will be available for any
meeting, travel, consultant or related administrative
expenses.
Management of the effort will involve monitoring of
progress, coordinating inter-agency efforts, bridging
specific ideas with state, county and local experience.
Specific corrective action will be reviewed by the
normal channels of the Domestic Council, OMB, and
other selected staff.
Office of Management and Budget
Program implementation is dependent on OMB program
co-sponsorship and assistance, particularly from the
management side of the organization. OMB will provide
several essential elements of this program:
Program expertise and analytical
capabilities needed to insure quality
control in program results.
Linkage, where necessary, with the
Federal intergovernmental field network,
including the Federal Regional Councils
and the Under Secretaries Group.
Jurisdiction and supervision of the A-85
Circular program, which is currently under
OMB review, and which will be an integral
part of the regulations comment procedures
established by this program.
Coordination with the new management initia-
tives program, which includes some regulatory
reform elements.
Reinforcement of the Presidential mandate
given this program, which would be viewed
skeptically by the Federal agencies and
by state and local officials without OMB
involvement.
A close, day-to-day working relationship between White
House program personnel and appropriate OMB staff will
be maintained throughout the reform effort.
- 10 -
Federal Departments and Agencies
The heads of the departments and independent agencies
will be tasked with the responsibility of drafting and
implementing individual plans for agency regulations
reform, and with supporting the elements of the over-
all program involving cross-agency efforts. Each
department and agency head will be requested to appoint
a high-level subordinate, with direct access to the
Secretary or Administrator and with full authority to
direct and manage the agency program. These agency
program directors will collectively form a program
"working group" that will meet regularly with White
House and OMB program personnel to monitor and guide
the progress of the overall effort.
Advisory Resources
To insure an effective link between this effort and
(a) state, county and local officials, as well as
(b) White House policy, two advisory groups will be
utilized:
A. The New Coalition
Key to the acceptance and success of this program
is direct involvement by state, county and local offi-
cials. The New Coalition, a group of representative
governors, mayors, county executives and state legis-
lators (formed to provide coordinated response to
intergovernmental and programmatic issues) provides
an important source of ideas and advice for this effort.
(Governor Bob Ray of Iowa is its current Chairman.)
This group can assist in the identification of priority
problem areas and suggest workable reforms. It
will be called upon periodically to help select targets
and provide reactions to possible improvements.
B. White House/OMB Advisory Group
An ad hoc advisory group within the White House,
formed to provide policy guidance for the program, and
to act as a coordinative group vis-a-vis related projects
and efforts, will be convened periodically. Members of
the group will consist of representatives from the Domestic
Council, OMB, and other selected White House staff units.
- 11 -
On occasion, the Advisory Commission on Intergovern-
mental Affairs, the Productivity Commission, and other
outside resources may be of advisory assistance.
TIMETABLE FOR ACTION
The program will be implemented in three phases. Phase
I is the period between now and June 30, during which:
The Cabinet will be briefed, agency
resources assigned to the program,
and individual agency plans of action
drafted and reviewed.
Specific program targets will be
identified and selected; initial con-
sultation with the New Coalition and
other advisory groups will also occur
during this period.
Working plans will be drafted for
updating procedures for regulation
comment and review.
Inter-agency groups will be organized
as needed to attack high-priority cross-
agency regulations.
Phase II begins with the implementation of the individual
agency reform plans and will run through the remainder of
the year. Initial results of this phase should begin ap-
pearing by September 1.
Phase III, which will begin sometime during Phase II,
will focus on expanding this effort to other programs
and instituting the improved procedures for the review
of new program regulations prior to their issuance.
PRESIDENTIAL ACTIVITIES
Presidential
Media
Date
Event/Location
Action
Reason
Activity
Cabinet Meeting
Briefing on
Kick-off
Possible Press
(Cabinet Room)
Regulatory Reform
effort
briefing
Program
Mid-to-late
Major Speaking
Speech on
Publicize
Full Coverage
June
Forum (Before
Big Government
Regulatory
State Legisla-
Reform effort
ture or similar
body)
June
Meeting of New
Discussion
Signal priority
Press Conference
Coalition
session with
of effort to
by New Coalition
(White House)
group
state and local
governments
THE WHITE HOUSE
WASHINGTON
May 27, 1976
MEMORANDUM FOR:
THE PRESIDENT
FROM:
JAMES M. CANNON
JAMES T. LYNN
SUBJECT:
Government-to-Government Regulations
Reform Program
Attached to this memorandum is a plan of action and
related materials establishing a program to relieve
state and local governments of excessive Federal
regulations. This proposal is in response to your
request of May 7, 1976.
The proposed program includes the following key
elements:
Immediate attention focused on selected
priority problem areas, with initial re-
form results by September 1.
Consultation with and participation by
representative state, county and local
officials in the program, including the
final identification of program targets.
Initial focus on the three existing
block grant programs, which are experienc-
ing gradual "recategorization" through
regulations.
Primary responsibility for program results
assigned to the department and agency heads,
who will be tasked with drafting and imple-
menting individual agency action plans.
Joint Domestic Council/OMB oversight.
- 2 -
The specifics of the program are outlined and
discussed in Tab A. The program will be under the
general direction of Steve McConahey, your Special
Assistant for Intergovernmental Affairs, with day-
to-day management of the program directed by Ray
Hanzlik, who ran the Domestic Council public
hearings last fall.
Tab B is a memorandum to the Cabinet outlining their
role and responsibilities in the program.
Tab C is a suggested list of Presidential actions in
support of the program. We recommend a briefing and
discussion of this effort occur at the next Cabinet
meeting.
APPROVE
DISAPPROVE
COMMENT:
Attachments
GOVERNMENT-TO-GOVERNMENT REGULATIONS
REFORM PROGRAM
This proposal sets forth a plan of action in response
to the President's request of May 7, 1976, to initiate
a program that will relieve state and local govern-
ments of excessive Federal administration regulations.
THE SITUATION
Two major themes of this Administration have been the
reduction of big government, and the return of more
authority to state and local governments. A number of
Presidential actions has given substance to these
themes, with the block grant proposals and support for
the re-enactment of general revenue sharing being prime
examples. Moreover, this commitment to rebalance the
relationship between the Federal government and state
and local governments has gained strong bi-partisan
support.
Unfortunately, the President's initiatives and reforms
in Federal assistance to state and local governments
are seriously undermined by the administrative regula-
tions and procedures imposed on state and local officials
by Federal agencies. This problem is most acute in cate-
gorical grant programs, which represent eighty-percent
($48 of $60 billion) of the Federal aid that goes to
states and localities. However, evidence is also
available to suggest that the existing block grant
programs are becoming increasingly regulated by
administrative actions. Although some of these pro-
gram regulations reflect a Congressional mandate, a
substantial number are administratively initiated.
The administrative and management burden imposed on
state and local governments by these regulations has
reached the point where it is now the primary inter-
governmental issue for governors, mayors and county
officials.
- 2 -
Evidence of the seriousness and urgency of this
problem has come from many sources. Testimony on
the subject by state and local officials was heard
at each of the Domestic Council Public Forums held
last fall. Federal over-regulation and program
management were priority subjects discussed at the
February meeting of the National Governors Conference.
Secretary Simon, in his meetings with governors over
the past year, has collected extensive data supporting
this Federal imposition on state and local administra-
tions. The Advisory Commission on Intergovernmental
Relations, the National Commission on Productivity,
the Federal Paperwork Commission, the National Science
Foundation, and Brookings have studied this question
and urge remedial action. And, along with the profes-
sional literature, the media are giving this subject
increased attention.
The message from state and local officials can be
summarized essentially as follows: Many Federal ad-
ministrative regulations promulgated by the departments
and agencies are inconsistent, unnecessarily restrictive,
overlapping, inflexible, insensitive to local needs,
and/or unnecessary. Their impact increases program
costs, compromises program benefits, complicates pro-
gram administration, expands state and local bureau-
cracies, steals responsibility and decision-making
authority from state and local officials, and adds to
the beneficiaries' frustration and disillusionment with
government. As one Governor has stated: "The best
thing the Federal Government could do to help state
and local government would be to get some of the regula-
tions out of our hair and let us do the job."
Although the Administration is addressing the Federal
regulatory problem, the efforts to date have not focused
on government-to-government regulations. The focus of the
Agenda for Government Reform Act program, announced on
May 13, 1976, and the EPB task force effort to review
specific Federal program regulations in FEA and OSHA is
on the private sector and the general economy. Moreover,
the recent OMB proposal on management initiatives, though
including some aspects of regulatory reform, concentrates
on the control and oversight of the Washington bureaucracy.
- 3 -
As a result, a major gap exists in the overall
regulatory reform effort. To fill this gap, a
Presidentially directed and White House coordinated
effort is required to attack the burdensome problem
of government-to-government regulations, thereby
committing action and resources to the President's
policy of restoring to state and local governments
their lost authority.
The time is ideal for Presidential action on this pro-
blem. The President's long-standing position against
unnecessary Federal requirements on state and local
governments is fully consistent with the sentiments of
the people and their local officials. The current
situation provides a ready-made opportunity to take
the initiative on this big government issue -- an issue
that impacts on the lives of most Americans and has con-
tributed to the "anti-Washington" mood. Given the
supportive attitude that most governors, mayors and
county officials have for the President's intergovern-
mental policies, this opportunity affords a useful
tool to mobilize strong bi-partisan support from these
state and local leaders.
PROPOSED ACTION
In response to this situation, a joint White House-OMB
program is proposed to focus needed Presidential atten-
tion on the problems of Federal government-to-government
regulations. This program is designed to produce visible,
near-term substantive results, while simultaneously in-
stituting procedures to maintain a longer-term, compre-
hensive reform effort. Specifically, this effort is
aimed to accomplish three objectives:
1. Implementation of reform measures for
a select number of regulatory problem
areas, identified as the most onerous for
state and local governments, and adaptable
to prompt administrative reform.
- 4 -
2. Establishment of uniform guidelines
within the Executive Branch for con-
sultation, review and comment by
state and local officials concerning
proposed new regulations, and Secre-
tarial review and analysis prior to
promulgation.
3. Initiation of an on-going reform
program to emcompass additional
Federal assistance programs impact-
ing on state and local governments.
The timing of this program and the availability of
resources, along with the uniqueness of the problem and
the constituency affected, dictate that the proposed
program incorporate several essential elements:
Primary responsibility for the program
should be placed within the agencies
building upon existing reform activities
and stimulating new efforts where none
exist; in both cases, agency resources
and administrative mechanisms will be
utilized. The creation of a new, ad hoc
program structure should be avoided.
White House leadership (jointly by the
Domestic Council and OMB) and coordination
throughout the program are required, es-
pecially to coordinate inter-agency efforts.
The program should complement and not
duplicate the other Administration regula-
tory reform efforts in progress: the task
force program under Paul MacAvoy's direc-
tion; the management improvement effort
initiated by Jim Lynn; the Agenda for
Government Reform program headed by Ed
Schmults.
Final identification and selection of
program targets must include inputs from
state and local officials, who could also
perform an on-going advisory role. Con-
sultations with members of Congress may
also be advisable at the appropriate time.
- 5 -
PROGRAM END-PRODUCTS
As planned, this effort will aim at achieving specific
improvements in Federal government-to-government regula-
tions, including:
Reduction of grant application
paperwork and processing.
Simplification and elimination of
inconsistencies in planning require-
ments and documentation.
Elimination of unnecessary and/or
redundant reporting requirements.
Elimination of unnecessary mandates;
e.g., structural, service or organi-
zation requirements, not relating to
program performance.
Identification of legislative changes
necessary to achieve administrative
simplification.
PROGRAM TARGETS
The final selection of specific targets will in part be
determined through consultation with agency officials
and state and local government representatives. However,
at a minimum, four general target areas have been identi-
fied for initial attention:
1. The Block Grant Programs.
There is growing evidence that existing block grants,
designed to provide state and local governments maximum
flexibility in the use of Federal funds, are being en-
cumbered by administrative rules and procedures. One
frequently cited example is the reporting on Affirmative
Action/EEO compliance required by the CETA and LEAA block
grant programs; another is inconsistent rulings by
different agency regional offices through the ten Federal
regions. These programs are currently under study by
several organizations, including OMB, ACIR, Brookings and
the National Academy of Sciences, as well as the program
agencies. Results from these efforts will help determine
what changes in regulations and procedures are necessary.
- 6 -
Three existing block grants to be studied under
this effort are:
Omnibus Crime Control and Safe
Streets Act of 1968, administered
by the LEAA, Department of Justice.
Comprehensive Employment and
Training Act of 1973 (CETA)
administered by the Employment
and Training Administration,
Department of Labor.
Housing and Community Development
Act of 1974, administered by the
Department of Housing and Urban
Development.
2. Categorical Grant Programs.
The Federal categorical assistance programs for state
and local governments present a very broad target for
regulations reform, and the attention here will be
selective and limited in the initial program phase.
The breadth of this target, however, is partly offset
by the large percentage of programs administered by
one agency, the Department of Health, Education and
Welfare. Fortunately, HEW has recently initiated an
ambitious and comprehensive in-house regulatory reform
program aimed at programs considered most burdensome to
the states and localities. In this case, the White
House program is designed to further energize the HEW
effort, perhaps giving added focus to one or two key
problem areas, and to activate similar programs in the
other Federal agencies. Within this target area, specific
elements of categorical programs may be selected for ini-
tial attention, such as planning requirements and plan
utilization, reporting requirements, and audit procedures.
And, some attention will be given to the simplification
of categorical programs where block grant legislation
has been proposed but not enacted (e.g., health, social
services, education.)
- 7 -
3. Cross-Cutting Regulatory Problems.
Judging from comments and data available, one of
the regulatory problems most troublesome to the
states and localities is the inconsistencies and
overlap among regulations issued by different
Federal agencies. Several examples illustrate this
issue:
Guidelines differ across agencies
on the nature of public participa-
tion required in the development of
state plans necessary for Federal
funding.
Requirements imposed by Federal
agencies on a single jurisdiction
are in some cases duplicative,
uncoordinated and at times contra-
dictory.
OMB and GSA Circulars establish uniform
standards for Federal management prac-
tices, vis-a-vis state and local juris-
dictions. Yet in practice, Federal
rules, procedures and practices for
each program tend to evolve independently
and often at variance with the established
standards.
Agencies differ in their implementation
of the Uniform Relocation Assistance Act,
resulting in different assistance for
similar situations.
The effort in this area will focus on specific cross-
cutting regulatory problems in order to correct the
most serious duplications and inconsistencies.
4. New Regulations Procedures.
The regulations problem area that arouses the most
criticism from state, county and local officials is the
lack of opportunity to comment on proposed Federal regula-
tions and the lack of lead time to implement them. More-
over, some regulations do not receive a thorough Secretarial-
level review prior to issuance. The practices for
- 8 -
consulting and review of new regulations vary widely,
both among and within agencies. There is near-unanimous
opinion that the established comment procedures for pro-
posed new regulations are unevenly enforced, narrow in
jurisdiction (permits comment only by the major public
interest groups), and inefficiently administered by the agencie
Specific improvements will be sought through consistent
guidelines for Secretarial review and state and local
government consultation.
PROGRAM ORGANIZATION
The White House
Although the major responsibility for achieving the
objectives of this program will rest with the agencies,
visible and active White House leadership is essential
to:
Give the effort a clear Presidential
mandate.
Signal this mandate to the departments
and agencies.
Demonstrate to state and local officials
the priority and seriousness of the pro-
gram.
Insure that the objectives are achieved in
a timely manner.
Provide coordination among the departments
and agencies.
White House oversight will be a joint Jim Lynn/Jim Cannon
responsibility, with general direction of the effort as-
signed to Special Assistant to the President for Inter-
governmental Affairs, Steve McConahey and daily program
management provided by Ray Hanzlik of the Domestic Council.
Limited staff support will be detailed from the partici-
pating agencies, as needed, and a budget of $10-25,000
from Domestic Council funds will be available for any
meeting, travel, consultant or related administrative
expenses.
y
Management of the effort will involve monitoring of
progress, coordinating inter-agency efforts, bridging
specific ideas with state, county and local experience.
Specific corrective action will be reviewed by the
normal channels of the Domestic Council, OMB, and
other selected staff.
Office of Management and Budget
Program implementation is dependent on OMB program
co-sponsorship and assistance, particularly from the
management side of the organization. OMB will provide
several essential elements of this program:
Program expertise and analytical
capabilities needed to insure quality
control in program results.
Linkage, where necessary, with the
Federal intergovernmental field network,
including the Federal Regional Councils
and the Under Secretaries Group.
Jurisdiction and supervision of the A-85
Circular program, which is currently under
OMB review, and which will be an integral
part of the regulations comment procedures
established by this program.
Coordination with the new management initia-
tives program, which includes some regulatory
reform elements.
Reinforcement of the Presidential mandate
given this program, which would be viewed
skeptically by the Federal agencies and
by state and local officials without OMB
involvement.
A close, day-to-day working relationship between White
House program personnel and appropriate OMB staff will
be maintained throughout the reform effort.
- 10 -
Federal Departments and Agencies
The heads of the departments and independent agencies
will be tasked with the responsibility of drafting and
implementing individual plans for agency regulations
reform, and with supporting the elements of the over-
all program involving cross-agency efforts. Each
department and agency head will be requested to appoint
a high-level subordinate, with direct access to the
Secretary or Administrator and with full authority to
direct and manage the agency program. These agency
program directors will collectively form a program
"working group" that will meet regularly with White
House and OMB program personnel to monitor and guide
the progress of the overall effort.
Advisory Resources
To insure an effective link between this effort and
(a) state, county and local officials, as well as
(b) White House policy, two advisory groups will be
utilized:
A. The New Coalition
Key to the acceptance and success of this program
is direct involvement by state, county and local offi-
cials. The New Coalition, a group of representative
governors, mayors, county executives and state legis-
lators (formed to provide coordinated response to
intergovernmental and programmatic issues) provides
an important source of ideas and advice for this effort.
(Governor Bob Ray of Iowa is its current Chairman.)
This group can assist in the identification of priority
problem areas and suggest workable reforms. It
will be called upon periodically to help select targets
and provide reactions to possible improvements.
B. White House/OMB Advisory Group
An ad hoc advisory group within the White House,
formed to provide policy guidance for the program, and
to act as a coordinative group vis-a-vis related projects
and efforts, will be convened periodically. Members of
the group will consist of representatives from the Domestic
Council, OMB, and other selected White House staff units.
- 11 -
On occasion, the Advisory Commission on Intergovern-
mental Affairs, the Productivity Commission, and other
outside resources may be of advisory assistance.
TIMETABLE FOR ACTION
The program will be implemented in three phases. Phase
I is the period between now and June 30, during which:
The Cabinet will be briefed, agency
resources assigned to the program,
and individual agency plans of action
drafted and reviewed.
Specific program targets will be
identified and selected; initial con-
sultation with the New Coalition and
other advisory groups will also occur
during this period.
Working plans will be drafted for
updating procedures for regulation
comment and review.
Inter-agency groups will be organized
as needed to attack high-priority cross-
agency regulations.
Phase II begins with the implementation of the individual
agency reform plans and will run through the remainder of
the year. Initial results of this phase should begin ap-
pearing by September 1.
Phase III, which will begin sometime during Phase II,
will focus on expanding this effort to other programs
and instituting the improved procedures for the review
of new program regulations prior to their issuance.
PRESIDENTIAL ACTIVITIES
Presidential
Media
Date
Event/Location
Action
Reason
Activity
Cabinet Meeting
Briefing on
Kick-off
Possible Press
(Cabinet Room)
Regulatory Reform
effort
briefing
Program
Mid-to-late
Major Speaking
Speech on
Publicize
Full Coverage
June
Forum (Before
Big Government
Regulatory
State Legisla-
Reform effort
ture or similar
body)
June
Meeting of New
Discussion
Signal priority
Press Conference
Coalition
session with
of effort to
by New Coalition
(White House)
group
state and local
governments
PROGRAM COORDINATION
President
White House / OMB
(Cannon/Lynn)
OMB Office
New Coalition
of
Management & Operations
Advisory Group
GOVERNMENT-TO-GOVERNMENT
REGULATIONS REFORM
Federal Regional
PROGRAM
Councils
Other Regulatory
Reform Programs
White House
Advisory Group
Cabinet Departments
and
Independent Agencies
New
Individual
Cross-Agency
Regulations
Agency
Regulations
Guidelines
Programs
Reform
PROGRAM COORDINATION
President
White House / OMB
(Cannon/Lynn)
OMB Office
New Coalition
of
Management & Operations
Advisory Group
GOVERNMENT-TO-GOVERNMENT
REGULATIONS REFORM
Federal Regional
PROGRAM
Councils
Other Regulatory
Reform Programs
White House
Advisory Group
Cabinet Departments
and
Independent Agencies
New
Individual
Cross-Agency
Regulations
Agency
Regulations
Guidelines
Programs
Reform
THE WHITE HOUSE
WASHINGTON
May 27, 1976
MEMORANDUM FOR:
JIM CANNON
FROM:
STEVE McCONAHEY
80m
SUBJECT:
Maintenance of Effort (MOE)
One of the recurring issues raised by state, county and
local officials is the restrictive manner of most maintenance
of efforts (MOE) requirements of the Federal Government. In
most cases, failure to provide a certain level of financial
support based on previous expenditures results in the loss
of all Federal assistance available to them under the program
involved.
At a time when state and local governments are facing severe
economic hardships, these MOE requirements limit the flexi-
bility that local governments have in using Federal funds
and in allocating their local resources. Several state
and local officials have proposed that when they reduce the
amount of the local contribution, that they receive a cor-
responding reduction in Federal share rather than a total
loss of Federal support.
The Department of Treasury has drafted a piece of legislation
to correct existing MOE requirements. I have attached a
copy of the preliminary Treasury proposal. I think this is
an item we should give serious consideration to and probably
include in our urban message.
Attachment
CC: Art Quern
forgit
UNIFORM TREATMENT BY THE FEDERAL GOVERNMENT OF MAINTENANCE OF
EFFORT REQUIREMENTS IMPOSED ON STATE AND LOCAL GOVERNMENTS
PROBLEM:
Many state and local governments during times of economic
downturns and for other reasons would like to reduce the amount
of money which they contribute toward a joint Federal/State or
local program and receive a corresponding reduction of the Fed-
eral share. Many statutes require the elimination of all Federal
funds if the state or local share is reduced by any amount. The
effect is a reduction in flexibility in the use of resources by
state and local governments.
PROPOSED SOLUTION:
The provisions of law creating this problem are numerous and
cover virtually every committee in the Congress. The problem is
clearly one of intergovernmental relations. The attached language
is submitted to the Intergovernmental Relations Subcommittee of
the Senate Government Operations Committee as a statement of
national policy which will allow proportionate reduction in the
level of Federal financial assistance equal to any such reduction
by a state or locality.
EXPLANATION OF THE PROPOSED BILL:
The proposed bill is in three sections:
Subsection (a) expresses the sense of the Congress that states
and localities not be divested of Federal financial assistance
when those governments have failed to maintain a statutory level
of fiscal or expenditure effort if such failure is due to economic
or other conditions which require an adjustment in the level of
fiscal or expenditure effort in states and localities.
Subsection (b) generally modifies each statute which contains
any such provision by requiring that it be modified as provided in
subsection (c).
Subsection (c) - the department or agency charged with the
administration of any such provision of law is authorized to issue
regulations which would specify the circumstances under which a
state or locality could be relieved of otherwise applicable
statutory requirements for maintenance of fiscal or expenditure
efforts. The regulations could provide for a proportionate
reduction in Federal financial assistance.
FORD
BERAUD
(a) It is the sense of the Congress that States and localities
receiving Federal financial assistance, in the form of grants or otherwise,
not be divested, by whatever means, of such financial assistance for a program
period because such States or localities themselves have failed to maintain
a specified statutory level of fiscal or expenditure effort for the assisted
program or project, if such failure is due to economic or other conditions
which require an adjustment in the level of fiscal or expenditure effort of
the State or locality.
(b) Notwithstanding any other provision of law, any statute here-
tofore enacted, which provides Federal financial assistance to States or
localities, in the form of grants or otherwise, and requires that, as a
condition for receiving such Federal financial assistance, the State or locality
itself maintain a specific level, as required by statute, of fiscal or
expenditure effort with respect to the program or project assisted, is
hereby modified as provided in subsection (c) of this section.
(c) The head of the Department or agency in whom administration of
a statute described in (b) above is vested, is hereby authorized to issue
regulations, in accordance with 5 U.S.C. 553, which specify the circum-
stances under which a State or locality will be relieved of the otherwise
applicable statutory requirement to maintain a level of fiscal or
expenditure effort and shall provide for reduction of the Federal financial
assistance which is proportional to the reduction in the level of fiscal or
expenditure effort by the State or locality.
FORD
REDALD
PRESIDENTIAL ACTIVITIES
Presidential
Media
Date
Event/Location
Action
Reason
Activity
Cabinet Meeting
Briefing on
Kick-off
Possible Press
(Cabinet Room)
Regulatory Reform
effort
briefing
Program
Mid-to-late
Major Speaking
Speech on
Publicize
Full Coverage
June
Forum (Before
Big Government
Regulatory
State Legisla-
Reform effort
ture or similar
body)
June
Meeting of New
Discussion
Signal priority
Press Conference
Coalition
session with
of effort to
by New Coalition
(White House)
group
state and local
governments