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Task Force Report Summaries with letter from Arthur Burns, Chairman, Program Coordination Committee, with attachments. 56 pages. [Report], 1/18/1969
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Task Force Report Summaries with letter from Arthur Burns, Chairman, Program Coordination Committee, with attachments. 56 pages. [Report], 1/18/1969
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Richard Nixon Presidential Library
White House Special Files Collection
Folder List
Box Number
Folder Number
Document Date
Document Type
Document Description
16
8
01/18/1969
Report
Task Force Report Summaries with letter
from Arthur Burns, Chairman, Program
Coordination Committee, with attachments.
56 pages.
Wednesday, June 17, 2009
Page 1 of 1
THE WHITE HOUSE
WASHINGTON
Rose
DATE
TO:
FROM: BOB HALDEMAN
FYI
PLEASE HANDLE
PLEASE REVIEW AND SEE ME
OTHER:
P's personal
file
TASK FORCE REPORT SUMMA RIES
OFFICE OF THE PRESIDENT-ELECT
Richard M. Nixon
450 Park Avenue
New York, N.Y. 10022
(212) 661-6400
January 18, 1969
The Honorable Richard M. Nixon
President-Elect of the United States
Pierre Hotel
Fifth Avenue at 61st Street
New York, New York
Dear Mr. President:
I have already sent you those Task Force
reports that I thought you would want to read
in their entirety.
The enclosed summaries of other Task Force
reports will probably suffice for your immediate
needs. Needless to say, any or all of the full
reports can be made available to you on a moment's
notice.
As the remaining reports arrive, you will
promptly receive either the full report or a
summary.
Sincerely yours,
and
Arthur F. Burns
Chairman
Program Coordination
Committee
SUMMARIES OF TASK FORCE REPORTS
1. Intergovernmental Fiscal Relations
2. Federal Credit Programs
3. Resources and Environment
4. Transportation
5. Labor, Incomes, and Manpower
6. Education
7. Urban Affairs
8. Housing and Urban Renewal
9. Health
10. Public Welfare
11. U.S. Balance of Payments Policies
Intergovt'l.
Fiscal Rel'ns
Summary
Report of the Task Force on Intergovernmental Fiscal Relations
Chairman: Richard P. Nathan
This report presents the view that the time has come for
a major reform of intergovernmental fiscal relations. The prime
need is for deemphasis of the categorical grant-in-aid approach
and for stress instead on policies leading to responsible decentra-
lization. A special Presidential message on this subject early
in the new Administration is suggested. The report presents back-
ground material on the need for this reform, a group of princi-
ples to guide reform, and a series of specific proposals, the
most important of which is the inclusion of revenue sharing in
the fiscal 1970 budget.
The report's recommendations are based on the premises
that state-local public service needs are high and rising; that
state-local tax systems are strained and that major tax sources
have inequitable features; that the use of the Federal tax system
to aid state and local governments is essential; that the present
Federal aid system has critical deficiencies; and that the ad-
ministrative machinery for achieving public purposes requires
strengthening at all levels of government.
To pursue responsible decentralization, the report sees
a need for:
(1) Strong Presidential leadership, to be promoted
through strengthening the Executive Office, to
develop and ensure implementation of policies.
- 2 -
(2) Encouragement of state and local involvement and
acceptance of responsibility in problem-solving
and program administration.
(3) Coordination among community participation programs.
(4) An advisory role for state and local governments in
the administration of specific tax incentive programs.
The report recommends nine measures for overhauling the
categorical grant-in-aid system: (1) legislation authorizing the
President to submit grant consolidation plans, the plans to be-
come effective unless rejected by either House within 90 days;
it is suggested that consolidation is needed especially in the
areas of water and sewer facilities and vocational education;
(2) legislation authorizing single applications for joint funding
of projects deriving funds from several federal sources; (3)
legislation authorizing the transfer by executives of the re-
cipient jurisdiction of up to one-tenth of the funds received
in any one grant category to other programs funded by the same
federal agency; (4) the establishment of guidelines on the use
of major types of federal grants; (5) simplification of matching
and apportionment formulas; (6) legislation to encourage more com-
prehensive planning, especially in relation to urban problems
(revision of Section 701 of the 1954 Housing Act is specifically
recommended); (7) authorization in grant legislation for Depart-
ment heads and the Comptroller General to accept the results of
state and local accounting and auditing when those results meet
-3-
appropriate standards; (8) better timing of aid fund appropria-
tions so that state and local governments can plan and budget
effectively; (9) extension of provisions for pre-financing
(such as now exist in the highway and water pollution programs)
to permit contingent approval of projects beyond currently
available Federal authorizations.
The report offers proposals for revising Federal aid
programs in two specific areas, manpower and welfare. In the
manpower area, the report recommends a study to establish cri-
teria for selecting localities in which to operate comprehensive
manpower programs; programs would be comprehensive and administra-
tion would be decentralized. In the area of welfare, the report
recommends: (1) a study to consider making the AFDC-UP program
mandatory; (2) a study to consider the development of minimum
national standards for AFDC-UP, with cost-of-living adjustments;
and (3) a study to consider administration by the Social Security
system of other public assistance programs (aged, blind, dis-
abled), with general revenue financing for those covered.
The report recommends that the fiscal 1970 budget include
a program for sharing one-half of one percent (0.5 percent) of
taxable income reported on individual tax returns (estimate:
$1.75 billion) with state and local governments. It recommends
that a major portion of these funds be allocated on the basis of
population. The use of tax credits as an alternative to revenue
sharing is discussed, but no recommendations are offered.
The report also recommends panels to study block grants,
especially in the areas of higher education and elementary and
secondary education.
It is also recommended that a study be made of the desir-
ability of legislation authorizing state-local imposition of a
surtax on those residing within a particular SMSA, the proceeds
to be distributed in accordance with state law to political units
within the SMSA.
Support for cooperative arrangements for Federal collection
of state and some local taxes is also recommended.
Finally, the report notes that the Model Cities program
offers advances in the development of an intergovernmental strategy
for an urban society through its encouragement of executive leader-
ship within local government, its offering of multifunctional
Federal grants, and its encouragement of coordination of programs
by Federal agencies and state governments to achieve locally
defined objectives. It notes that the Community Action Program
is based on sound concepts but should be restructured -- perhaps
by placing its administration in HUD rather than OEO -- so that
it does not function in competition with established state and
local governmental institutions. The report finds merit in cer-
tain aspects of the Community Self Development Act, but cautions
against accepting proposals that would utilize the funds of
Community Development Corporations to finance and operate public-
service programs.
Federal Credit
Programs
Summary
Task Force Report on Federal Credit Programs
Chairman: James J. O'Leary
Students of the money and capital markets and economists
generally have been disturbed by the way in which the Federal
credit programs have proliferated in recent years. These programs
have put considerable strain upon the nation's real and financial
resources, and they often have been inadequately coordinated with
broad economic stabilization and growth-promoting policies of the
Federal government. Financing sometimes has been dictated more
by a desire to reduce the apparent budgetary impact than to achieve
sound program funding. Finally, programs often have failed to
make adequate use of private initiative and private funds in meet-
ing credit needs.
The general principles which should guide the Federal
credit programs are as follows:
1. Federal direct loan and loan-guaranty programs are
appropriate in filling those important needs in our
society that would not be satisfied by the private
market system without Federal stimulus.
2. Nevertheless, a primary objective of the Administra-
tion and Congress should be to obtain greater involve-
ment of private funds and managerial effort.
3. As a general rule, all new and existing Federal credit
programs should rely upon Federal insurance or guaranty
of private financing rather than on direct Federal loans.
-2-
(a) The insurance or guaranty should, if possible,
be less than 100 percent. Some measure of
risk should be left to private lenders through
coinsurance to encourage careful underwriting
of loans.
(b) The programs should also, as a general rule,
require the promoter or developer of a project
aided by Federal insurance or guaranty to have
a significant equity position in the project.
4. Nonetheless, in some cases where risks are exception-
ally high, a full Government guaranty without co-
insurance or direct Federal loans with private
participation will be required to make a project
feasible.
5. Only as a last resort should there be direct Federal
loans without private participation. In no event
should these direct loan programs be permitted to
undercut viable insured or guaranteed loan programs.
6. Private investors must be permitted to invest in
Government-insured and guaranteed loans at the going
market interest rate.
Our recommendations to bring existing and new Federal
credit programs into line with the guiding principles are as
follows:
1. The President should appoint a Cabinet-level task
force to make a comprehensive reappraisal of the
existing Federal direct loan and loan-guaranty pro-
- 3 -
grams. Programs should be scrutinized rigorously
in the light of the guiding principles. The
Director of the Bureau of the Budget should serve
as Chairman of the task force, and the Secretary
of the Treasury, the Chairman of the Council of
Economic Advisers, and the Chairman of the
Federal Reserve Board should participate per-
sonally or through designated alternates
2. The President should establish machinery to make
Federal credit agencies fully responsive to the
general economic policy needs of the country. This
review machinery should probably be established
under the Chairman of the Council of Economic
Advisers; the Secretary of the Treasury, the
Director of the Bureau of the Budget, and the
Chairman of the Federal Reserve Board -- or their
designated alternates -- should be included.
3. The President should establish machinery, perhaps
by creating an office for this purpose within the
Treasury, for coordinating the money and capital
market operations of all Federal credit agencies.
This office should also consider the possibility of
reducing the number of standard categories of
borrowing instruments. The possibility of Treasury
handling of the financing activity of all Federal
credit agencies should also be considered.
Resources &
Environment
Summary
Task Force Report on Resources and Environment
Chairman: Russell E. Train
The report of the Task Force on Resources and Environment
recommends that improved environmental management - especially in
urban areas - be given high priority by the new Administration.
Although the report notes that many Federal departments
and agencies are involved with environmental problems, it recommends
postponing major reorganization in this field pending study by a
Hoover-type commission or a National Commission on Environment.
Such a commission should be concerned with more than just ef ficient
administration. It also should devote attention to structural
changes aimed at providing more effective monitoring of the major
environmental impacts of Federal programs whose basic purpose is
not environmental protection, such as highway construction.
For the immediate future, the report recommends:
- An effort to make existing programs work better by
promoting greater Federal cooperation with business and with
state and local governments.
- Increased appropriations (up to authorized levels).
- Appointment of a Special Assistant for Environmental
Affairs, who would provide a focal point for policy and planning
in this badly fragmented field.
- Broadening the responsibility of the existing inter-
agency Council on Recreation and National Beauty and designating
the new Special Assistant as its Executive Secretary. The Council
-2-
would be concerned with all environmental matters and also would
function as a vehicle for consolidating other inter-agency groups
dealing with the environment, such as the Water Resources Council
and the Marine Science Council.
- Changing the name of the Citizens' Committee on Recrea-
tion and Natural Beauty to the Citizens' Committee on the Environ-
ment, and extending its area of concern also. Private sector in-
volvement would be one of the main considerations of this committee.
- Establishing a focal point of environmental responsibili-
ty in each Federal agency whose activities significantly affect the
environment, comparable to the units now existing in the Army Corps
of Engineers and the Department of Transportation.
- A Presidential statement of goals and priorities in this
field, preferably as a message to Congress.
Finally, the report notes that many environmental bills
were presented in the 90th Congress and that voters in state and
local elections have shown great willingness to support bond issues
for environmental programs. This clearly indicates that environ-
mental problems are now of considerable concern to voters.
Transportation
Summary
Report of the Task Force on Transportation
Chairman: C. L. Miller
The most urgent problems and our recommended actions
are:
1. Public mass transportation must be guaranteed
a sustained source of funds and support for plan-
ning, research, and implementation. The creation of
a Public Transportation Trust Fund is urged; and
major strengthening of the Urban Mass Transit Ad-
ministration is needed to insure effective coor-
dination and management of its national programs.
2. The air transportation system is facing a national
crisis of insufficient capacity. Legislation to set
up an equitable system of user charges is urgently
needed to provide the essential funds (in con-
junction with other sources) for airports, airways,
and airport access. Federal executive leadership in
research, development, and implementation of measures
for improved air traffic control, noise, and air pol-
lution control, and V/STOL technology is essential.
3. The Federal-aid Highway Program is now highly con-
troversial. Citizen groups in urban areas are in op-
position. State highway officials deeply resent the
Federal handling of the program. Executive leadership
to generate public confidence and provide constructive
- 2 -
direction to the highway program is urgently needed.
4. The railroad industry is burdened with many outmoded
regulations. The nation needs a modern, efficient rail
industry and should discard archaic restrictive practices.
Early steps should be taken to relax obsolete constraints
on the rail industry and to expand reserach and develop-
ment. Expenses for social services, such as operation of
long-distance or commuter passenger trains, which the
public wishes to maintain, should be paid for by public
funds.
5. The maritime industry has a unique opportunity to
regain U.S. leadership by taking advantage of the tech-
nological revolution in shipbuilding, shipping, and
oceanography. Emphasis on meaningful incentives and
decreasing reliance on Federal funding and control is
required for the effective implementation of such a
program. Integration of all Federal agencies oriented
to the maritime industry is recommended to develop proper
overall planning and use of Federal, industry and labor
resources.
6. Science and technology programs in transportation are
far short of what is required for all modes. Priorities need
to be set. Resources should be devoted to sustained re-
search and demonstration programs. The Department of Trans-
portation should design and implement a viable national
- 3 -
program of research and fundamental improvements in
all transportation systems.
A strong Department of Transportation is the key to effect-
ive Federal action. The Task Force feels it is too early for the
new department to undergo a major reorganization, but urges
immediate steps to strengthen the Office of the Secretary of
Transportation, including the various Assistant Secretaries.
1. The modal administrations should be continued,
but this orientation should be complemented by a) equally
strong representation of inter-modal and multi-modal
functions by appropriately designated Assistant
Secretaries; and b) clear authority and the necessary
resources for the Secretary to exercise control and leader-
ship of national programs.
2. The activities of the Office of the Secretary
should be expanded to include a) responsibility for
advising the President on transportation labor-manage-
ment disputes; b) a systems planning capability and a
program of advanced research; and c) new mechanisms for
interdepartmental coordination and creation of an
advisory body to the Secretary.
3. Explicit recognition should be given in the organiza-
tional structure of the department to the special pro-
blems of a) urban transportation, to include all modes
- 4 -
and their relation to urban development; and b) the
human and environmental impact of transportation.
Finally, we urge the new Administration to take a fresh
and objective look at the role of private enterprise in trans-
portation. Specifically, we suggest:
1. Greater reliance on human desires, as reflected
by market forces, to encourage carrier ingenuity
and innovation, through a reduction of restrictive
regulations; carefully controlled rate flexibility;
and increased opportunity for intermodal service.
2. Clear incentives for private enterprise to invest
in new systems, equipment and technologies, through
aggregation of the equipment market into large units;
structuring of the market for private sector services;
and new opportunities for small businessmen in trans-
portation.
Labor Incomes
& Manpower
Summary
Report of the Task Force on Labor, Incomes and Manpower Policies
Chairman: George P. Shultz
This report presents recommendations in three areas - labor
relations policy, wage-price policy, and manpower policy. Under-
lying the recommendations in all three areas are two basic con-
victions: 1) high employment is an important goal in itself,
but is in tension with the goal of reasonable price stability -
a situation that must be recognized and dealt with; and 2) unions
and companies themselves must be made responsible for making
particular decisions free of government intervention and accepting
their consequences.
Labor Relations Policy
The members of the task force are opposed to seeking changes
in labor legislation - including application of the anti-trust laws
to unions - in the near future. (An appendix presents suggestions
for labor legislation to consider if the subject is opened up.)
Instead, they recommend seeking changes through administra-
tive means, generally following a policy of a) emphasizing resolu-
tion through free collective bargaining; b) intervening only when
absolutely necessary; and c) pursuing equitable settlements rather
than "peace without regard to its price" when intervention is
undertaken.
The task force also recommends abolition of the distinction
between the Mediation Service and the Department of Labor. The
official in charge should have a research and technical assistance
function as well as the mediation function, for the purpose of
- 2 -
studying the year's negotiating calendar in depth and doing special
studies.
The report strongly urges an almost off-the-record, internal
study of the problem of public employees at the Federal and other
government levels, including careful review of the evaluation of
Executive Order 10988 now underway.
For the immediate future the report recommends:
1) Establishing a joint (Department of Labor - Mediation
Service) study unit to study the 1969 negotiation scene. The
General Electric-Westinghouse negotiation is year's major event,
but is not an immediate problem.
2) Giving immediate attention to the airline negotiations
with mechanics, which open January 1, 1969 - a situation that could
present the Administration with a precedent-setting crisis.
3) Keeping track of the East Coast longshoremen dispute,
which may not be resolved before January 20th.
Wage-Price Policy
The report views both voluntary and statutory restraints on
wages and prices as ineffective; only restraints on aggregate
expenditure will be effective in resisting inflation.
Recommendations are offered for softening the conflict be-
tween greater price level stability and unemployment (likely to
fall most heavily on minority groups), but the report regretfully
concludes that this goal cannot even be approximated in the next
four years. The recommendations cover the areas of unemployment
compensation, training allowances, training opportunities and
programs, employment services, and moving allowances.
Although opposed to direct intervention in price determina-
tion, the task force members recommend that efforts be made to
improve the wage-price setting process in particular industries.
- 3 -
The specific recommendations are essentially methods for making the
particular industry's labor market more competitive. An expan-
sion of international competition through lowered tariff barriers
and resisting or ignoring "Buy American" clauses is also recommended.
Finally, the report advocates continued surveillance of product
price-fixing arrangements by the Anti-trust Division.
Manpower Policy
The report recommends a continuation of the emphasis on job
opportunities for the disadvantaged, suggesting that the new Ad-
ministration first make full use of the possibilities opened up by
recent legislation and administrative decisions, specifically the
Vocational Education Act of 1968, the amendment of Title I-B of
the Economic Opportunity Act (permitting comprehensive community
programs in place of various separate ones), 1968 amendments to the
MDTA. (providing for improved administration and federal matching
funds for state programs), and the decision providing for reorganiza-
tions of the Manpower Administration of the Labor Department.
Because of these opportunities, the report emphasizes the
importance of the position of Assistant Secretary for Manpower
Progress and suggests elevating it to Undersecretary status.
Long-term, the report recommends legislation authorizing a
single appropriation for all manpower services, the allocation
among programs to be made mainly by state governments in accordance
with Federal guidelines; some funds would be reserved for pass-
through to cities and for interstate programs and research. The
states would be responsible for delivery of services, either
through a state employment service or in accordance with a federally
approved plan; in either case, the job seeker should be able to gain
access to services through a single community contact point.
- 3 -
The specific recommendations are essentially methods for making the
particular industry's labor market more competitive. An expan-
sion of international competition through lowered tariff barriers
and resisting or ignoring "Buy American" clauses is also recommended.
Finally, the report advocates continued surveillance of product
price-fixing arrangements by the Anti-trust Division.
Manpower Policy
The report recommends a continuation of the emphasis on job
opportunities for the disadvantaged, suggesting that the new Ad-
ministration first make full use of the possibilities opened up by
recent legislation and administrative decisions, specifically the
Vocational Education Act of 1968, the amendment of Title I-B of
the Economic Opportunity Act (permitting comprehensive community
programs in place of various separate ones), 1968 amendments to the
MDTA. (providing for improved administration and federal matching
funds for state programs), and the decision providing for reorganiza-
tions of the Manpower Administration of the Labor Department.
Because of these opportunities, the report emphasizes the
importance of the position of Assistant Secretary for Manpower
Progress and suggests elevating it to Undersecretary status.
Long-term, the report recommends legislation authorizing a
single appropriation for all manpower services, the allocation
among programs to be made mainly by state governments in accordance
with Federal guidelines; some funds would be reserved for pass-
through to cities and for interstate programs and research. The
states would be responsible for delivery of services, either
through a state employment service or in accordance with a federally
approved plan; in either case, the job seeker should be able to gain
access to services through a single community contact point.
Education
Highlights
Report of the Task Force on Education
Chairman: Alan Pifer
The report of the Task Force on Education cannot be
briefly summarized at least not adequately mainly because
it touches on a very large number of programs and issues.
Thus, only the highlights are covered in this short memorandum.
The members of the Task Force have no essential
quarrel with the rapid expansion of Federal educational
activities that has occurred in recent years. Rather, they
believe that Washington does have substantial responsibility
for education under the "general welfare" clause of the
Constitution and they think it very important that President
Nixon continue to build on the foundation that has been
erected. This need is seen as especially compelling because
of the inadequacy of State and local financial resources.
The members of the Task Force make a variety of
proposals for enlarging Federal expenditures on educational
programs; a few of the proposals would involve immediate
supplementary appropriations for spending in the current
fiscal year, but most relate to fiscal 1970. Collectively,
the proposals would add $2 billion to the annual rate of
Federal outlays on education, with half of this to be
earmarked for special efforts aimed at strengthening
urban education, which the Task Force singles out as
demanding especially urgent attention. The members of
the Task Force express a preference for a new Urban
Education Act as a vehicle for intensifying Federal help
-2-
to inner-city schools. The alternative approach of increasing
ESEA Title I funding and rewriting that Title's apportion-
ment formula to achieve a greater concentration of assistance
money in large cities would be acceptable to the Task Force
members, but they doubt that such a route is politically
feasible.
While the Task Force report accepts as appropriate the
broad thrust of Federal educational efforts in recent years,
it does fault the mechanisms for policy formulation and for
intra-Governmental coordination that exist. The time has
come, according to the members, for consideration of a
separate Department of Education headed by an officer of
Secretary rank and also for consideration of the creation of
a National Council of Educational Advisors (modelled after
the President's Science Advisory Council) that would
conduct long-range studies of the Federal role in education
and assess the need for possible new programs; pending
study of such basic organizational reform, the rank and
salary level of the Commissioner of Education ought to be
significantly upgraded to make them commensurate with the
responsibility involved. The Task Force believes further
that the maze of existing legislation ought to be promptly
reviewed by a skilled internal Task Force to determine how.
it can be reorganized to provide for greater efficiency in
administration and less burden on state and local education
authorities.
The Task Force report stresses the desirability of
-3-
regrouping a number of categorical grant programs into what
it terms "designated block grant programs." The objective
would be to give state and local officials somewhat greater
latitude than they now have in using Federal assistance.
But the Task Force emphasizes that any regrouping of programs
must not go so far as to give Federal assistance the appear-
ance of "general aid." That, according to the Task Force,
would probably reopen the Church-State issue in aggravated
form and jeopardize all Federal educational efforts. The
Task Force explicitly takes note of Mr. Nixon's campaign
pledge to move in the direction of block grants; it urges
caution until the full implications of new departures can
be thoroughly assessed in terms of the sensitive Church-
State issue.
Urban Affairs
Summary
Report of the Task Force on Urban Affairs
Chairman: Edward C. Banfield
The report concentrates on the problem of giving the
poor and the black a sense of increasing hope and opportunity
and of greater control over their lives. It stresses the
importance of avoiding promises which cannot be fulfilled. The
report suggests that the new Administration give the public a
more balanced view of the city by stressing the city's successes
as well as its failures.
In general the report recommends using the market,
price incentives, and the principle of consumers' choice to the
largest extent possible; and, when choices are made through
political institutions, giving autonomy to the smallest possible
unit of government.
Equal Access: The Administration should commit itself
to vigorous enforcement of all laws designed to ensure equal
access to market, ballot boxes, and courts of law; as part of
this, it should encourage black economic development, not neces-
sarily in the ghetto but wherever opportunities are, by providing
access to training, credit, insurance, and other needs.
Income Distribution: The incomes of the very poor
should be raised in a manner that will leave them free to choose
-2-
how and where to live. The report comments on inequality of
opportunity between urban and rural areas, and recommends enact-
ment of legislation to equalize bloc grants to the states along
the lines of the Heller-Pechman proposals as one helpful tool.
Giving the Secretary of Agriculture a seat on the Council on
Urban Affairs and transferring the Farmers Home Administration
from Agriculture to HUD are also recommended.
The effect of certain Federal programs (e.g., agricul-
tural price supports) on the living costs of the poor should be
examined.
The task force favors moving towards a negative income
tax as a substitute for other forms of welfare, but not before
wider testing is done of its effect on incentives. It should be
instituted at once for those groups where incentive is not rele-
vant, such as the aged and disabled.
For those poor people incapable of functioning as
consumers, special arrangements should be made.
Meanwhile, the Federal government should assume
responsibility for financing welfare programs; the AFDC freeze
should be repealed; and children of an unemployed parent should
be treated as are those without fathers.
Manpower and Employment: The report recommends remov-
ing impediments to the proper functioning of the labor market as
-3-
an effective means for improving employment among low-skilled
urban workers. Specifically, racial discrimination should be
eliminated; better information about jobs should be provided;
the minimum wage laws should be repealed or limited to those
21 and over; and restrictive practices by labor unions should
be ended.
The report also urges the establishment of a small
group to review the problem of employment of Vietnam veterans.
Payments to employers for training should be propor-
tioned to the increase in the trainee's earnings in the year or
two subsequent to training.
The task force opposes incentives for locating plants
in ghetto areas on the grounds that workers should be encouraged
to move out of these areas.
Housing: The task force believes that once minimum
standards are met, government should not attempt to establish
consumption levels but rather seek to eliminate restrictive
practices, ensure a stable supply of mortgage credit, and elimi-
nate imperfections in the mortgage market. In the absence of a
national income maintenance program, the task force favors income
supplements to be used for housing purposes.
Transportation: The task force favors liquidation of
the Highway Trust Fund or some other arrangement to give states
-4-
freedom to allocate Federal funds among various transportation
modes, steps to improve competition among different modes and
reduce the preferential treatment given to private automobiles;
emphasis on traffic flow rather than new highway construction
in urban areas.
Schools: The goal should be incentives for consumer
expenditure on education and a larger variety of educational
products, so that parents, teachers and other groups do not
struggle for control of the public monopoly. The report
recommends considering:
- A tuition rebate plan.
- A rebate supplement plan for educational
activity outside the public schools.
Safety in Public Places: The report recommends that
the Federal Government make clear to black citizens its commit-
ment to law and order, including equal and vigorous enforcement
of laws for their protection. Saturation foot patrols in high-
crime urban areas are recommended. The Federal Government should
help cities recruit and pay police officers involved in safety
in public places. The task force recommends a "civilian service
corps", in which service would substitute for military duty.
Organization: The report supports the Federal grant-
in-aid program but favors consolidation of categories; the
-5-
Federal Government's policy should be to favor ward or precinct-
based election systems to ensure representation for the poor
and minorities; support should not be quickly withdrawn from
community action programs, even though there is little long-run
future in them. Eventually these groups should be absorbed into
a representative local government structure.
Evaluation and Testing: Evaluation programs, with
staffs in their own departments, are encouraged.
Housing &
Urban Renewal
Summary
Report of the Task Force on Housing and Urban Renewal
Chairman: James Wm. Gaynor
This report recommends that the new Administration:
- Establish an urban policy and urban goals relating to
housing and community improvement on a total basis, not exclu-
sively for low-income groups.
- Determine priorities among domestic and foreign programs.
The goal of the 1968 Housing and Urban Development Act - 26
million new units in 10 years - will be difficult to meet under
present circumstances.
- Stress programs in the construction field to end job dis-
crimination, increase job opportunities, introduce off-site fabrica-
tion, and expand training programs.
- Support vigorously Title VIII of the 1968 Act - providing
for a reconstituted FNMA - to attract additional funds to the
mortgage market at reasonable rates.
- Encourage government assistance to non-profit housing
sponsors through the 1968 Act.
- Establish an urban affairs advisory council composed of
representatives of leading professional and community organizations.
- Decide whether Model Cities programs or Anti-poverty pro-
grams are to be used in areas where they now compete.
- Provide in urban policy for land banks, minimum model
code standards, and effective relocation policies, with recogni-
tion of states' rights and home rule.
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- Decide policy on use of Federal block grants to the
states for welfare and health care.
- Decide whether to support new towns or satellite cities.
- Encourage the states to take a more active role in urban
problems.
- Assure revitalization of central business districts.
- Name the members of the National Home Ownership Founda-
tion and encourage Congress to fund it.
* * *
The Task Force report further recommends:
- Reorganization of HUD on a mission rather than a program
basis.
- Use of the department's electronic data processing equip-
ment to compile meaningful statistics and to measure the effective-
ness of programs.
- Unification of HUD's technical review activities.
- Intensification of research and development studies on
construction problems.
- Assignment of responsibility for administrative limitations
on development costs to regional administrators.
***
Additionally, the reports recommends that the Administration:
- Recognize the housing provisions of the welfare program
as a form of rent supplement.
- Have HEW coordinate standards for the operation and ad-
ministration of the housing provisions of welfare legislation with
HUD.
- 3 -
- Place all rent assistance programs under one administra-
tive unit.
- Encourage the turnkey program and the lease-out of private
apartments by local housing officials under Section 23.
- Make Section 235 and Section 236 programs effective by
(a) allowing the Government National Mortgage Association to sell
its mortgages at a discount and absorb the cost; (b) using sub-
sidy provisions to the maximum; and (c) recognizing differences in
construction costs in different areas.
- Stimulate acquisition of homes by ghetto residents.
- Consider new FIAA program to encourage creation and
ownership, with 100 percent mortgage and rent supplements.
- Review urban relocation programs.
- Provide a fund reserve to ensure completion of Neighbor-
hood Development Programs. Put action programs on a two-year
basis and make the cost of preparing NDP applications eligible
for reimbursement.
- Consider restricting the Model Cities program in most
cities to one phase of activity so that the original objective -
of a massive, intensive attack on a multitutde of problems - can
in fact be attained in a restricted number of cities; the Task
Force believes that too much dilution of the program has occurred.
***
A dissenting paper was submitted by one member of the Task
Force. It emphasizes the need to consider housing construction
in the context of the total environment and to establish a national
urbanization policy that would include:
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- A general resettlement policy.
- A conservation program.
- Adjustment of other social and economic programs to
ensure consistency with the urbanization policy.
- Revitalization of existing communities and plans for
new communities.
- Programs to improve the responsiveness of government
institutions.
- Programs for technological advance in areas related to
urban problems.
The dissenting paper recommends that the President's
Council on Urban Affairs be developed and asked to review programs
and make an annual report to Congress and the President. It also
recommends that the President ask Congress to create a Joint Con-
gressional Committee on Urban Policy and that he reaffirm the
housing goals of the 1968 Housing and Urban Development Act.
The dissenting paper puts more emphasis on the Model Cities
program than does the Task Force report. It acknowledges that the
program is characterized by administrative shortcomings but holds
that it should be supported as the best strategy for coordinating
Federal, state and local government programs at the community
level. The dissenting paper recommends that Model Cities be
used as the instrument for coordinated assistance to neighbor-
hoods for the entire Federal government, not just HUD.
- 5 -
It argues further that the Model Cities program should be used as
a long-term strategy applied to all major cities and urban centers,
with Federal financial support designed as part of a continuing
delivery system rather than as project grants to a short-run program.
Health
Summary
Report of the Task Force on Health
Chairman: John T. Dunlop
The report notes the rapid expansion in health expendi-
tures in recent years accompanied by sharp cost increases,
and concludes that additional funds would only increase costs
further rather than expanding the amount of service offered.
Thus, the task force strongly recommends heavy emphasis on
greater efficiency and productivity in health care through
a variety of means.
The report includes recommendations in the following
areas:
Medicaid: The report outlines five alternative approaches
to Medicaid but does not recommend any specific approach.
Medicare: The task force feels that decisions on
the financing, coverage, administration and methods of pay-
ment for Medicare should await resolution of the Medicaid
question. Suggestions are offered for legislative amend-
ments; an increased role for private enterprise, where this
would reduce costs, is recommended for consideration.
The Poor: The report recommends that the delivery of
health care for the poor be adapted to their specific needs
and cultural patterns. Neighborhood Health Centers are
suggested.
Organization and Administration: A Council of Health
Advisers is recommended. The task force also feels that the
Assistant Secretary (HEW) for Health and Scientific Affairs
-2-
should have responsibility for those health programs in
HEW that are not now under his purview; that a separate
Department of Health, or of Health and Welfare, be created;
and that other internal changes be made.
Medical Manpower and Education: The task force members
are divided on the question of whether new medical schools are
needed or whether expansion of existing schools is a better
route for increasing the supply of doctors. Support for
expansion is also recommended for training dentists and
nurses. Involvement of medical schools in the training of
new types of paramedical personnel, such as the physician's
assistant, is encouraged. The
Licensing: The report urges increasingly high
standards of licensing in the field of health care, but
notes that licensing imposes a rigidity that should not be
carried into law for those whose activities are not yet
clearly defined.
Medical Education: A proposal for financing graduate
medical education was offered by a sub-group of the task
force.
Capital: It is urged that in spending money for new
facilities, care be taken to improve the productivity of the
health system. This is especially possible in health
facility planning under HEW programs.
Research and Demonstration: The report notes that
while much has been spent on biomedical research, very
-3-
little has been spent on health service research. HEW
grants to providers of care, the tying of grants to medical
schools to a commitment to participation in delivery-system
research, and third-party grants to individual institutions
are suggested.
Longer-range Special Problems: The report comments
briefly on family planning for low-income women, environ-
mental health, accidents, and drugs.
Public
Welfare
Summary
Report on the Task Force on Public Welfare
Chairman: Richard P. Nathan
The report focuses on near-term issues and opportunities
facing the new Administration in the field of public welfare
broadly defined to encompass problems and conditions of the
poor in the United States and the government programs designed
to assist them.
Following introductory and background material, the Task
Force report makes recommendations on various near-term issues
and opportunities.
A. Public Assistance and Related Support Systems.
Three pending HEW administrative regulations are discussed.
The Task Force recommends the following actions ranked in the
order listed:
1. First, retention of the declaration (or simplified) ap-
plication procedure for Public Assistance recipients, with an
amendment to allow individual states to negotiate for limited ex-
tensions on the basis of administrative necessity.
2. Second, implementation of the pending HEW regulations
mandating continuation of assistance during the period of an appeal
of the suspension or modification of a recipient's Public Assistance
benefits.
3. Third, implementation of the HEW regulation making legal
services available to appellants, on request, in hearings on ap-
peals of suspension or modifications of a recipient's Public
Assistance benefits.
-2-
On two immediate legislative issues, the task force recom-
mends:
1. Repeal of the freeze on AFDC beneficiaries enacted in
the 1967 Social Security amendments or, as an alternative, a further
postponement of the effective date to July 1, 1971.
2. Formation immediately of a study panel to recommend a
position on the anticipated effort in the 91st Congress to cut the
Medicaid program. This recommendation assumes that the Health Task
Force does not provide specific proposals suitable for this purpose.
On the subject of basic program reform of the Public As-
sitance programs, the Task Force recommends increased federal
financial reponsibility for Public Assistance and the establish-
ment of national minimum standards for benefits under one of two
specific approaches presented in the report:
1. Alternative one would blanket-in most adults on Public
Assistance under the Social Security system, with general revenue
financing to cover the added costs, and set minimum benefit levels
for the AFDC program. The total estimated federal cost (with our
assumptions) is $1.9 billion, offset by savings to states and
localities of between $700 million and $800 million.
2. Alternative two would set minimum benefit standards for
all Public Assistance recipients. With our assumptions, it would
cost $1.4 billion, offset by savings to states and localities of
$500 million.
The Task Force report also includes suggestions for: (1)
increasing employment opportunities to remove people from the
Public Assistance rolls; (2) provision of day care and family
planning services, both of which can help reduce poverty condit-
ions and hence the need for Public Assistance; and (3) eventual
- 3 -
reform of state and local general assistance programs, which
would ultimately permit the elimination of the categorical
system and the establishment of a system with the single qualify-
ing factor of economic need based on family size and resources.
The report also recommends consideration of the following
changes in Public Assistance and related income support programs:
1. Mandating the AFDC program for families headed by an
Unemployed Parent (AFDC-UP) as a means of curbing the present
incentive of Public Assistance for men to desert their families
in order to qualify them for welfare;
2. Setting a minimum monthly benefit for each member of the
family under Social Security Survivors' Insurance, so that surviving
children in large families are not prevented from receiving bene-
fits;
3. Consideration of a proposal for the recovery, through
a tax credit, of Social Security taxes paid by the poor;
4. Increasing widows' benefits; and
5. Separating the income and social service functions of
welfare agencies.
B. Organization at the Federal Level of Service Programs for
the Poor
The Task Force recommends that planning, coordination, and
oversight functions for programs to aid the poor be assigned -
perhaps as a part of a broader assignment for all domestic programs
-- to a staff component in the Executive Office of the President
(EOP) -- although not the Office of Economic Opportunity (OEO)
- 4 -
which failed to carry out its planning and coordination assignments.
As for the future of OEO, the Task Force recommends that a
new independent agency be created -- perhaps called the Agency
for Community Development (ACD) -- which would be responsible
for:
1. The Community Action Program and some of its closely
related "national emphasis" programs, although the Task Force
recommends that several of the current "national emphasis" pro-
grams be spun off or delegated to other agencies;
2. The neweconomic self-development program along the lines
recommended in the Community Self-Determiniation Act of 1968;
and
3. The VISTA program.
The Task Force also suggests that the new Agency for Commun-
ity Development (ACD) have general responsibility for innovative self-
help programs and for the development of neighborhood service centers
in urban poverty areas.
As for the Job Corps -- presently an OEO program -- the Task
Force recommends that it be discontinued as a separate entity
and that authority for operating centers which are efficiently
administered, plus new ones for selected areas, be assigned to the
Secretary of Labor or HEW -- perferably the Secretary of Labor.
C. The Community Action Program: Its Role at the Local Level
The Task Force discusses the Community Action Program
and recommends its concentration on: (1) citizen participation
and self-help; (2) innovative local programs; and (3) the improve-
ment of program delivery in poverty areas. This section of the
report discusses CAP functions along with related federal programs
- 5 -
in order to develop a comprehensive framework for action at the
local level which maximizes program flexibility and promotes
improved planning, coordination, and program implementation
(principally through a recast Model Cities program) with the
close involvement of state and local officials.
D. The Model Cities Program
The Task Force recommends the use of the Model Cities program
-- with fundamental revisions -- as a basic federal strategy for
improving program coordination and delivery in urban poverty areas.
This requires that: (1) the states are brought into this system;
(2) Local officials have an effective role; (3) the program is
broadened; and (4) the present federal aid formula is revised.
E. The Community Self-Determiniation Act.
The Task Force endorses the Community Development Corporation
(CDC) approach for community-ownership and economic development
and recommends a two-part strategy to fulfill the basic objectives
of this proposed legislation:
1. In phase one, OEO (if it is retained) or the new Agency
for Community Development (ACD) would be directed to support on
a flexible and experiemntal basis local community organizations
(some are already in existence) to foster economic self-development
in poverty areas.
2. In phase two, the new Administation would work toward
the enactment of legislation setting up CDCs on a more formal
basiswith the necessary financial support through tax incentives,
a banking system, direct appropriations, or a combination of these
techniques. Phase two would include the careful analysis of aspects
of this legislation now being revised by its principal sponsors.
Areas for further study are indicated in the report.
-6-
Other Areas for Early Action
Early action by the new Administration is recommended in
six other areas: (1) hunger programs; (2) health services for
the poor; (3) Indian poverty; (4) "black capitalism" and economic
development; (5) rural poverty; and (6) returning Vietnam veterans.
U.S. Bal. of
Pay. Policies
Summary
Report of the Task Force on U. S. Balance of Payments Policies
Chairman: Gottfried Haberler
The present U.S. balance-of-payments position is very
precarious. Serious deterioration in the nation's trade accounts
is being temporarily camouflaged by a combination of window-dress-
ing special transactions and an abnormal inflow of foreign capital.
Existing balance-of-payments controls should be rapidly
eliminated because they are wasteful and inefficient, undermine
our free enterprise system, and thus reduce the rate of growth
in the economy. Their dismantling is further indicated because
whatever short-run payments relief they may have afforded in the
past, they are now beginning to have a delayed adverse effect.
Diplomatic efforts aimed at inducing other countries to hold more
dollars than they normally would also should be terminated.
Given the present underlying weakness of our payments po-
sition, severe foreign-exchange pressures against the dollar could
develop quickly. A series of protective actions is therefore
necessary, involving the pursuit of disinflationary economic
policies domestically and simultaneous reform of existing inter-
national monetary arrangements.
With respect to reform, confidential negotiations with
the key industrial countries through the Group of Ten should
begin immediately, with the main American objective being to
secure quickly a significant realignment of parities of some cur-
rencies. To provide continuing flexibility in the international
monetary mechanism, this one-time realignment should be accompanied
by:
- 2 -
(1) The establishment of wider permissible trading
bands for currencies under IMF rules (with
fluctuations on either side of par to range up
to 2 percent or 3 percent, instead of the present
1 percent maximum).
(2) The provision for automatic adjustments in pari-
ties by small amounts in instances where a cur-
rency remained at the upper or lower end of its
band for some specified time period.
Discussions aimed at providing wider bands and self-adjust-
ing pegs should proceed even if significant one-time realignment
of Group-of-Ten currencies cannot be successfully negotiated.
Such reform in itself would not solve the problem of out-
standing dollar balances, and consequently the present de facto
inconvertibility of the dollar into gold would continue. Never-
theless, a general increase in the price of gold should not be
undertaken because its benefits would be distributed very un-
evenly and inequitably and because it would tend to fuel inter-
national inflationary tendencies.
Continuation of de facto inconvertibility of the dollar
into gold need not be a crucial problem so long as visible pro-
gress is being made by the United States in pursuing domestic
policies that promise reduction of new infusions of dollars into
the international economy and so long as flexibility is imparted
to the international monetary mechanism. Foreigners recognize
that any large-scale attempt to convert dollars into gold would dis-
rupt international trade and payments and would lead to an immediate
- 3 -
American embargo on gold exports. If for any reason this pre-
mise proves false and a "gold rush" develops, the United States
should suspend gold convertibility before our gold stock de-
clines very much below its present level. Such suspension
would not necessarily lead to a radical depreciation of the
dollar on international exchanges. Instead, it is likely that
many countries would continue the policy of pegging their cur-
rencies at the existing parities to the dollar. In a period of
transition during which convertibility was suspended, negotia-
tions aimed at introducing new flexibility into the inter-
national monetary mechanism could proceed.