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Revenue Sharing (14)
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The original documents are located in Box 31, folder "Revenue Sharing (14)" 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States of America his copyrights in all of his unpublished writings in National Archives collections.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 31 of the James M. Cannon Files at the Gerald R. Ford Presidential Library
hay
TITLE II - ANTIRECESSIONARY GRANTS
This title authorizes a program of emergency support grants to state
and local governments to coordinate state and local budget related
actions with federal economic recovery efforts. Funds are to be
used to maintain basic services and not for the acquisition of
supplies and materials or for construction unless this is necessary
to maintain basic services.
Funds Authorized
For each of five quarters, beginning July 1, 1976, the title
authorizes $125 million, plus $62.5 million for each one-half
percentage point over six percent national unemployment. Based on
the current unemployment rate (7.8 percent) an estimate for the
total 5-quarter period is $1.25 billion (which is the maximum
authorized). No funds would be authorized for any calendar quarter
during which the national unemployment rate averaged under six per-
cent or for any quarter in which the last month's unemployment rate
was below six percent.
Allocation
One-third for states, two-thirds for general purpose local govern-
ments (that perform "substantial" governmental functions). In order
to get funds, a state or local government must have both of the
following conditions:
(a) An average unemployment rate of at least 4.5 percent
for the quarter that ended three months before the
quarter in which payment is to be made.
(b) An unemployment rate exceeding 4.5 percent for the
last month of the quarter that ended three months
before the quarter in which payment is to be made.
In other words, if a city expects a countercyclical payment during the
third quarter of 1976, starting July 1 its average unemployment rate
for the first quarter of 1976 must be at least 4.5 percent and its
March unemployment rate must exceed 4.5 percent.
States: Formula based on excess unemployment rate (current unemploy-
ment rate minus 4-1/2 percent) and state revenue sharing payment for.
the year beginning July 1, 1975.
Local Governments: Local governments for which the Labor Depart-
ment determines unemployment rates under Titles II or VI of CETA
(most cities over 50,000) will get funds directly from Treasury
under a formula based on local excess unemployment rate (rate minus
4-1/2 percent) and local revenue sharing payment for the year
starting July 1, 1975.
All other (balance of state) local governments will receive funds
by one of two methods:
FORD
y
GERALD
LIBRARY
-2-
(1) A balance of state allocation plan that is submitted by the
state under Treasury rules; approved by the Treasury; con-
sistent with the allocation formula for the larger (CETA)
localities; developed in consultation with local officials
in the state; and approved by the state legislature (or
governor, if the legislature is not in session). This
alternative formula must be submitted to the Treasury with-
in 30 days after the effective date of the regulations.
(2) Direct allocation by the Treasury under a formula based on
(a) the individual jurisdiction's revenue sharing payment
for the year beginning July 1, 1975, and (b) the balance
of state average excess unemployment rate. The potential
inequity in this situation is great. Once the state
balance is established cities below 50,000 will receive
an allocation proportional to their revenue sharing
payments, regardless of their individual unemployment
rates.
NOTE: The secretary of Treasury does have the discretionary
authority to accept unemployment data which is certified by
the Secretary of Labor for smaller units of governments.
Cities below 50,000 should immediately contact the Governor's
Office. to find out if the state collects unemployment data
for their jurisdiction. The Labor Department indicates that
many states collect small area unemployment data, but that it
is seldom sent to Washington.
Eligibility and Participation in the Program
It is estimated that more than 25,000 local units of government are
eligible for countercyclical assistance. As soon as an appropria-
tion has been obtained, every revenue sharing recipient will
automatically receive a notification of "potential eligibility form"
along with an "assurance form" (see below) Every local govern-
ment should immediately return the forms. The Office of Revenue
Sharing will then determine which governments are eligible and will
make the first official allocation run on the computers.
The assurance form required from each state or local government under
rules developed by the Treasury Department must include the following:
Assurance that the funds will be used for the maintenance
of public employment and basic service levels;
Assurance that proper fiscal control and accounting pro-
cedures will be used for funds granted under this title;
Assurance that "reasonable reports". will be provided to
the Secretary of the Treasury containing such information
as the Secretary may deem necessary. Such reports must
be published in a newspaper of general circulation.
Assurance that non-discrimination and Davis-Bacon
requirements will be adhered to.
Assurance that any tax increases or decreases and sub-
stantial reductions in public employment or services will
be reported to the Treasury Department within six months.
FORD
GERALD
LIBRARY
-3-
Assurance that funds will be spent within six months.
Treasury indicates the definition of "spent" will be
synonymous with the actual dispersal of the funds
unlike revenue sharing. To appropriate or obligate the
funds will not meet the spending requirement.
Administration and Promulgation of Regulations
The Office of Revenue Sharing within the Treasury Department will
administer the program. Regulations will not be published until
after the appropriations bill has become law.
Payments of Funds
The Office of Revenue Sharing anticipates that the first checks
cannot be mailed until seven weeks after the appropriations bill
becomes law. Assuming that the appropriations will be securred
by mid/late September, the first checks would be mailed sometime
after the first of November. This initial payment will be for
two quarters since the program is retroactive to July 1, 1976.
Comment
Local officials should keep in mind that fluctuations in the total
amount of funds and individual government entitlements are likely
over the 5-quarter period as a result of changes in national, state
and local unemployment rates. The $1.25 billion estimate, for
example, is based on a national rate of at least 7 percent for the
5-quarter period beginning July 1, 1976. If the national rate
falls below 7 percent, the total amount available for distribution
per quarter will change from $250 million to $187.5 million. In
addition, local allocations will be recomputed every quarter in
order to reflect more current unemployment data. The degree of
fluctuations to occur cannot be predicted at this time.
GERALO FORD LIBRARY
THE WHITE HOUSE
WASHINGTON
September 1, 1976
MEMORANDUM FOR
FROM
Pal
MAX FRIEDERSDORF
JIM CANNON
I
PAUL MYER
SUBJECT:
Cost of Senate Finance
Committee General Revenue
Sharing Renewal Bill
My earlier memorandum to you on the Senate Finance Committee's
bill to revise and extend the General Revenue Sharing program
included a cost estimate of $41.61 billion for the 5 3/4-
year period, January 1, 1977-September 30, 1982. This
estimate was based upon the Committee's apparent decision
to fund General Revenue Sharing at a level of $6.9 billion
for the 9months of FY77 for which funds are not appropriated
in the current Act. However, the Committee staff is of the
opinion that the Committee decision reflected a cost of
$6.9 billion for FY77. Based upon this interpretation, the
total cost of the program would be $41.988 billion, an
increase of $378 million above my previously reported calcu-
lation.
This matter will be resolved in the drafting and review of
the actual statutory language.
Based upon the higher figure, the comparison of projected
outlays between the Administration proposal and the Commit-
tee bill is as follows:
Administration Proposal
Committee Bill
FY77
$ 6,537,500,000
$ 6,900,000,000
FY78
6,687,500,000
7,050,000,000
FY79
6,837,500,000
7,200,000,000
FY80
6,987,500,000
7,350,000,000
FY81
7,137,500,000
7,500,000,000
FY82
7,287,500,000
7,650,000,000
-2-
An important factor in resolving the actual level of funding
in the bill will be Congressional action on the 2nd Budget
Resolution which, as reported in both the House and Senate,
contains a figure of $6.65 billion, or the House-passed
figure.
Under the entitlement financing procedures of the Congres-
sional Budget Act, the bill should be referred to Senate
Appropriations since the 1st Budget Resolution provides only
$6.542 billion for General Revenue Sharing in FY77. You
may recall that this is the procedure we followed in the
House. This matter has not yet been given any serious con-
sideration and the highly technical, but sensitive in terms
of Senate politics, issue must be worked out between Senators
Long, Muskie and McClellan.
It is my opinion that even if the Senate goes along with the
$6.9 billion figure for FY77, the House conferees, given the
view of Brooks, Adams and Mahon, would never agree to that
amount. It is likely that the Senate will yield to the
House if the annual increment of $150 million for subsequent
years were preserved. This compromise would be most satis-
factory in relation to the President's legislative and
budgetary recommendations for General Revenue Sharing
renewal.
THE
WASHING Paul
JIM:
Thanks
I apologize for the leng
of the attached memprandum.
Simply, we have a potential
problem which could delay
Senate consideration of the
General Revenue Sharing
renewal bill. The document
explains the technical and
political aspects involved.
Matters could be complicated
further by White House
the problem.
signals. Max Pal is aware of
Rie
THE WHITE HOUSE
Revenue
WASHINGTON
September 2, 1976
MEMORANDUM FOR
MAX FRIEDERSDORF
JIM CANNON
FROM
PAUL MYER
SUBJECT:
Senate Consideration of
General Revenue Sharing
Legislation
By unanimous consent agreement, Senator Long has authority
to call up the Finance Committee's bill to revise and extend
the General Revenue Sharing program at any time during the
week of September 7. Although the leadership would like to
begin on Wednesday and complete action on Thursday, the
extent of work required to complete bill and report drafting
may delay action until later in the week.
Of greater consequence, however, is a problem concerning the
Finance Committee's decision on the funding level and fund-
ing mechanism of the General Revenue Sharing program which
has the potential to delay or complicate Senate floor action
on this bill.
I. FUNDING LEVEL
As reported, the Finance Committee bill provides $6.9
billion in outlays for FY77. Since $1.662 billion is already
appropriated for the first quarter of FY77 in the current
Act, the bill provides an additional $5.238 billion for the
fiscal year.
According to the Senate (and House) Budget Committee,
the First Budget Resolution allocated only $4.880 billion in
additional outlays for General Revenue Sharing. Based upon
their interpretation, the Finance Committee bill would
exceed this target by $358 million.
The Finance Committee has, however, based its action
upon a different interpretation. The section of the First
Budget Resolution covering Revenue Sharing and General
-4-
ACTION REQUIRED
Senators Long, Muskie and McClellan have not discussed
these questions. Their resolution could be handled in an
amicable manner or result in a floor fight.
It is conceivable that the Senate will simply avoid
the technical aspects of the funding level issue, adopt the
Finance Committee recommendation and then increase the
amount allocated for General Revenue Sharing in the Second
Budget Resolution to reflect that decision.
As you know, it is my opinion that even if the Senate
were to go along with the $6.9 billion figure for FY77, the
House conferees would not agree to that amount. A likely
compromise allocating only $6.65 billion but retaining the
annual $150 million increment for subsequent years would be
most satisfactory in relation to the President's legislative
and budgetary recommendations for General Revenue Sharing
renewal.
Regarding the referral issue, the waiver provision was
not exercised in the House. It is worth noting that the
Administration's legislative recommendations did include
this waiver authority in order to exempt General Revenue
Sharing from the annual appropriations process. While the
referral could be of a pro forma nature, as in the House,
Senator Long is extremely jealous of his Committee's preroga-
tives. If the Senate did include the waiver in its bill,
this provision would clearly add to our leverage in confer-
ence.
Given the personalities involved and the recent history
of dispute over the power and authority of their respective
committees, anything may happen. While it will be interest-
ing to see this situation unfold, I am concerned that it
not delay or jeopardize prompt Senate action. Particularly,
the Administration must be careful of its involvement.
OMB has already been contacted by Senator Bellmon's
office regarding the position of the Administration on the
funding level issue. To my knowledge the referral matter
has not yet surfaced. This is clearly a sensitive matter
which merits your attention. It would be useful for us to
meet with Jim Lynn and others who may be involved.
-3-
II. FUNDING MECHANISM
The Senate Finance Committee bill retains the House-
passed entitlement financing provision.
This provision would continue long-term financing for
General Revenue Sharing and is in accordance with the
Congressional Budget Act. Under the entitlement financing
provisions of the Budget Act, entitlement legislation is
referred to the Appropriations Committees if it would
generate entitlement authority in excess of the allocation
made under the latest Congressional Budget Resolution. The
legislation is referred for no more than 15 days with the
Appropriations Committee automatically discharged from
consideration if it has not reported during this period.
The Appropriations Committee may report the legislation with
an amendment limiting the total amount of new entitlement
authority; however, their jurisdiction extends only to the
cost of the program involved and not to substantive changes.
When this legislation was considered in the House, the
Government Operations Committee bill was referred to the
House Appropriations Committee under these provisions since
the bill proposed entitlement authority in excess of the
amount allocated in the First Budget Resolution. As you
know, the House Appropriations Committee reported the bill
without amendment within three days.
Pending the resolution of the funding level issue dis-
cussed above, the Finance Committee bill may therefore be
subject to referral under the entitlement financing proce-
dures of the Budget Act.
Senator Long, however, may not be inclined to allow
referral of this legislation to the Appropriations Commit-
tee. He is giving serious consideration to exercising
an exception contained in the Budget Act which would waive
referral to the Appropriations Committee. Specifically,
Section 401 (d) (2) of the Budget Act provides that the
entitlement financing procedures with respect to referral
"shall not apply to new spending authority which is an
amendment to or extension of the State and Local Fiscal
Assistance Act of 1972, or a continuation of the program
of fiscal assistance to State and local governments pro-
vided by that Act, to the extent so provided in the bill or
resolution providing such authority."
-2-
Purpose Fiscal Assistance contained $350 million in "allow-
ances" which the Finance Committee applied to the General
Revenue Sharing program to compute its higher figure. Fur-
ther, Senator Long is known to feel that since the "Tax
Reform" bill emerging from conference will produce greater
savings than anticipated, these revenues should be applied
to programs within his Committee's jurisdiction. Under
this interpretation, the $6.9 billion would be within the
Budget Resolution target.
The Senate Budget Committee has questioned the Finance
Committee's action. In a August 30, 1976 letter from
Senators Muskie and Bellmon to Senator Long, the Budget Com-
mittee advised the Finance Committee:
"
the First Budget Resolution deliberations did
not contemplate use of any of the allowances target
for general revenue sharing. In any event it is
now clear these allowances amounts will be needed
for other purposes.
"In allocating the First Budget Resolution targets
among Senator Committees, certain funds in the
allowances category were held back and not allocated
to any committee. It should be noted, however,
that the statement of managers accompanying the
Conference Report on the First Budget Resolution
stated that these sums -- totalling $2.050 billion
in budget authority and $350 million in outlays --
were to be reserved only for jobs programs, includ-
ing accelerated public works, countercyclical
assistance, public service employment, small busi-
ness assistance, or such other temporary job
stimulus programs that the Congress may enact'
(emphasis added) "
The Budget Committee had in fact earlier advised the
Appropriations Committee that in light of subsequent Con-
gressional actions, it should augment appropriations for
job creating programs by the $350 million in the allowances
category, thus earmarking these amounts for such purposes.
Further, the Budget Committee, in reporting the
Second Budget Resolution, has allocated only $6.65 billion
in outlays for revenue sharing during FY77. This figure
represents the amount contained in the House-passed
renewal bill. Senate consideration of the Budget Resolution
is also scheduled for next week.
THE WHITE HOUSE
WASHINGTON
September 2, 1976
MEMORANDUM FOR
JIM CANNON
FROM
PAUL MYER
SUBJECT:
Prospective Signing Ceremony
for General Revenue Sharing
Bill
I believe the legislation to revise and extend the
General Revenue Sharing program has progressed along
far enough for us to consider a prospective Presi-
dential signing ceremony. It would appear the
period of September 27-October 9 is a likely window.
You may recall the original enactment was signed by
President Nixon with great ceremony in Philadelphia
with a Bicentennial-type backdrop. It was a good
political event.
Among the options we have is to hold the signing cere-
mony in a large urban area (New York, Detroit or Los
Angeles would be suitable). My thinking is that such
an event might help strengthen the President's urban
credentials, particularly if the rhetoric was keyed
to the hard fiscal and economic realities facing State
and local governments and the President's commitment
to less Federal interference in community affairs. At
the same time, the strengthened civil rights aspect
of the renewal bill could also be used to his advan-
tage.
I have discussed this matter briefly with Steve
McConahey. You Paul may wish to take it further at the
appropriate time.
CC: Max Friedersdo
Feed place pean.
Mg
a
for
Jun
Rile
THE WHITE HOUSE
Gen Kev.
WASHINGTON
September 8, 1976
MEMORANDUM FOR
Pw
JIM CANNON
FROM:
PAUL MYER
SUBJECT:
Administration Position on
Senate Finance Committee GRS
Renewal Bill
In addition to the other steps I have taken in response
to the President's concern, the following statement has
been given to OMB's legislative staff for their routine
circulation of Administration views on pending legislation:
The Administration supports the General Revenue
Sharing bill reported by the Senate Finance
Committee. The legislative provisions of the
Committee bill delete or modify the objectionable
features of the House-passed bill and closely tracks
the President's recommendations for renewal of
this program. The Administration does object,
however, to the proposed FY 77 funding level of
$6.9 billion contained in the Committee bill. This
amount exceeds the Administration budget request
by $363 million.
Long today ment with $6.65 B.
Stain-step mcreane was also
modified to be $200 M.
FORD
from $150
040806
THE WHITE HOUSE
file
WASHINGTON
September 10, 1976
MEMORANDUM FOR
MAX FRIEDERSDORF
JIM CANNON
FROM
PAUL MYER
SUBJECT:
Status Report -- Senate
Consideration of General
Revenue Sharing Bill
The Senate will consider the General Revenue Sharing
bill next Monday or Tuesday, the week of September 13.
This unfortunate delay is the result of the protracted
tax conference and a Democratic Senator exercising the
so-called "three day rule". While the Senator or his
reason for using this Senatorial privilege has not
been identified, I believe it may be Senator Gravel
(D-Alaska), who is attempting to gain support for two
civil rights amendments that he apparently plans to
offer (i.e. addition of nondiscrimination prohibitions
on grounds of religion, age and handicapped status;
provide for the payment of attorneys fees).
As you know, a potential floor fight between the Finance
and Budget Committees over the funding level issue was
negated when Senator Long earlier this week agreed to
offer a floor amendment to revise the FY77 amount in
accordance with the Budget Resolution. Specifically,
the Committee bill will be modified to provide entitle-
ment payments of $6.65 billion in FY77 (as opposed to
$6.9 billion) and increased thereafter by $200 million
per year (as opposed to $150 million). This would
also reduce the total cost of the program by $750 million.
09:012
-2-
Committee Bill
Anticipated Long
Amendment
(in billions)
FY77*
$ 6.90
$ 6.65
FY78
7.05
6.85
FY79
7.20
7.05
FY80
7.35
7.25
FY81
7.50
7.45
FY82
7.65
7.65
TOTAL
$ 43.65
$ 42.90
(*includes $1,662. million in existing
authority)
A number of Senators are preparing various floor amend-
ments to modify certain aspects of the Committee bill.
None of the known amendments are considered serious
threats. However, the additional time available may
lead to more floor amendments than anticipated.
In addition, we may face the problem of certain non-
germane amendments. Since we are late in this session
and General Revenue Sharing is considered "must sign"
legislation, Senators may attempt to use this bill as
a "Christmas tree". For example, Senator Taft is con-
sidering an OSHA amendment which has been bottled up
in the Senate Labor Committee. It is conceivable that
other Senators may avail themselves of the opportunity
this bill presents.
My major concern is that the Senate may spend more
time on this legislation than is necessary or desirable
given the tight time circumstances we face and the
nature of the prospective House conferees.
The adoption of amendments would greatly complicate the
conference. I am working with Senator Long, the
Finance Committee staff, and representatives of State
and local government to limit the number and nature of
amendments which might be offered next week. Since the
funding issue has been favorably resolved in accordance
with the President's policy, we are in a position to
fully support the Committee bill.
Aw Aw Haig of thair f
THE WHITE HOUSE
WASHINGTON
what paul Trub
wread
September 10, 1976
MEMORANDUM FOR
Paul PAUL MYER
JIM CANNON
you
unting
FROM
SUBJECT:
Business Week Report
President's General Revenue
Sharing Position
on week
The September 20, 1976 Business Week contains a
report on campaign issues which does a disservice
to the President's General Revenue Sharing policy
3
(page 86). While the one sentence description is
accurate, it might be subject to misinterpretation
when viewed in the context of the revenue sharing
section which reflects little understanding of
current law.
letter
Attachment
CC: Art Quern
FORD & LIBRARY GERALD
09/01/
with two others in the Labor and Justice
notable exception of New York City "the
FOREIGN
departments.
bulk of welfare expenditures have al-
Ford's task force may also recommend
ready been transferred to either the
ECONOMIC POLICY:
altering the benefit formulas of block
state or federal level."
grant programs to put more weight on
The Republican platform opposes
Living with an
poverty and other social problems. This
"federalizing" welfare. But if elected,
would give older, needier cities a better
Ford will offer a welfare reform plan to
aggressive Third World
break than at present.
consolidate some existing welfare pay-
Carter's task force on urban policy is
ments and institute new work require-
headed by Julius Edelstein, dean for
ments to cut welfare eligibility.
In international economic affairs, Ford
urban policy and programs at City
REVENUE SHARING. Carter wants a five-
and Carter differ more in style and
University of New York, and one on land
year extension of the present program,
emphasis than in the specifics of their
use, housing, and community develop-
which is funded at something above $6
policies. Both favor liberal trade and the
ment by Charles M. Haar, a former
billion a year, with an escalator clause
system of floating currencies-with ade-
assistant secretary for metropolitan de-
for inflation, and changes to permit
quate safeguards against cheating. Both
velopment at HUD. These task forces, as
cities to use the funds for health, educa-
see a potential need for arrangements to
well as other experts, are hammering
tion, and social services. Payments
bail industrial countries out of financial
out a dozen or so papers on a wide range
would go directly to localities rather
crises such as those that hit Italy and
of urban issues, everything from land
than to states for pass-through. He
Britain, although Carter has not com-
use to urban-suburban relationships to
plans to "study" the program to see if
mented on the Ford-Kissinger scheme
reorganizing HUD. These papers, of
benefit formulas should be changed to
for a $25 billion financial "safety net"
course, could generate new Carter posi-
give needier areas more money. Carter
that is currently hung up in Congress.
tions. But a Carter aide says bluntly,
also will consider creating a new agency
The contrasts between the two men
"We've had a lot of 1960 suggestions
to help localities sell their securities.
show up most clearly in their approach
coming in, and we're not going to go that
Ford favors extending revenue shar-
to economic relations with the Third
way. There is no Hubert Humphrey
ing, plus annual increments for inflation,
World. The Ford and Nixon Administra-
Marshall Plan for the cities in the cards
and would consider formula changes to
tions, according to Carter, have concen-
at the moment." What Carter wants,
provide more help to needier localities.
trated too much on big-power diplomacy
says this aide, are program options with
MASS TRANSIT. Carter intends to make
while neglecting potentially explosive
political and economic costs clearly
more money from the Highway Trust
"North-South" confrontations. Carter is
spelled out.
Fund available for public mass transpor-
basically more sympathetic than Ford to
Against this background, the salient
tation, and he will study whether it is
poor countries' clamor for a "new inter-
proposals from Ford and Carter on
feasible to create a total transportation
national economic order." But even in
issues that affect the cities are these:
fund for all modes of transportation.
this area, differences between the candi-
HOUSING. Carter wants to return to the
Ford's position is similar. Transporta-
dates lie more in the strength of their
production subsidies that Nixon and
tion Secretary William T. Coleman Jr.
commitment to specific objectives than
Ford discarded. His aim is "to fulfill our
recently increased aid to city mass
in their overall approach.
national commitment to build 2.5 million
transit, though the Ford Administration
Commodity agreements. A case in point
housing units a year." He plans direct
has spent little from the highway fund
is U.S. participation in international
federal subsidies and low-interest loans
on such transit. In using mass transit
commodity agreements. Carter says the
for low- and middle-income housing.
funds, Ford wants to retain the 50-50
U.S. should join schemes for such
Further, he proposes expansion of hous-
balance between operating subsidies and
products as tin, coffee, and sugar. He
ing programs for the elderly; "greatly
capital projects; Carter favors spending
implies that Ford, by contrast, is cool
increased emphasis" on rehabilitation of
"greater amounts" on operations.
toward commodity agreements. But, in
existing housing, using it as a way to
Carter also calls his jobs program
fact, Ford has already won Senate
create jobs in the cities; "greater effort"
(page 77) a vital element of his urban
approval for U.S. participation in coffee
to direct more mortgage money into
policy. Both he and Ford say they will
and wheat accords, and he seems
private housing; "more attention" to the
deal strongly with urban crime.
assured of favorable Senate action on
role of local communities; and outlawing
The two candidates offer some help to
tin.
redlining.
the poor living in cities and to hard-
The difference, Carter aides maintain,
Ford, far from proposing production
pressed city officials. But measured
is that the Democratic candidate would
subsidies, is seeking ways to shift the
against broader urban problems, neither
push harder for progress on such
housing assistance programs into block
goes very far.
accords. Ford, they claim, has allowed
grants consolidated with community
The root problem of cities today is
Treasury Secretary William E. Simon
renewal grants.
that they are losing their attractiveness
and Alan Greenspan, chairman of the
WELFARE. Carter labels welfare reform
to that part of society that can support
Council of Economic Advisers, to sabo-
"the single most important action we
them: the middle class and business.
tage Secretary of State Henry Kissin-
could take" toward helping the urban
Restoring the cities to self-sufficiency
ger's initiatives on commodities.
poor. He wants a uniform national
means enabling them to compete with
A similar picture emerges on the issue
program of benefits, with strong work
the suburbs for those groups and their
of foreign aid. Carter blames Ford for a
incentives for the employable poor and
resources. Nobody knows just how to do
$500 million shortfall in appropriations
income supplements for the working
this, except that it would require federal,
for U.S. contributions, under interna-
poor, who would not be penalized for
state, and local efforts, as well as large
tional agreements, to agencies such as
working by having benefits reduced.
investment, the kind of investment that
the Inter-American Development Bank.
Except for mothers with preschool chil-
has reproduced pieces of the city, includ-
The fact of the matter, however, is that
dren, anyone able to work who refused a
ing whole business districts, in the
the Democratic Congress balked at
job or training would be denied benefits.
suburbs over the past several decades.
Ford's requests for funds. Still, Carter
Cities would be relieved gradually of all
Neither Carter nor Ford is talking about
aides charge, with some justice, that the
welfare payments. City officials would
such investment. Anything less is not
Ford Administration made only languid
applaud this, of course, but a recent
likely to make much difference to cities
efforts to defend its aid requests.
study by the Urban Institute in Wash-
as centers of business, social, and
An even more basic difference with
ington, D.C., points out that with the
cultural life.
Ford shows up in Carter's populist and
GOVERNMENT
Revenue though
THE WHITE HOUSE
WASHINGTON
September 14, 1976
MEMORANDUM FOR
MAX FRIEDERSDORF
JIM CANNON
FROM
PAUL MYER
SUBJECT:
Proposed Presidential Statement
on Senate Adoption of General
Revenue Sharing Legislation
I anticipate the Senate will complete action on the
General Revenue Sharing bill early this afternoon.
Beyond the three civil rights amendments adopted on
the floor (none of which present major problems),
the Committee bill will be approved with minor
changes. This action represents a major endorsement
of the President's own legislative recommendations
for renewal.
Attached for your review is a proposed Presidential
statement upon Senate adoption of this legislation.
I will be reachable on the Hill.
Attachment
FORD is LIBRARY GERALD
proved to 9/15
QR
PROPOSED STATEMENT BY THE PRESIDENT UPON SENATE ADOPTION
OF LEGISLATION TO REVISE AND EXTEND THE GENERAL REVENUE
SHARING PROGRAM
I am extremely pleased that the Senate has today over-
whelmingly adopted legislation to extend the General Revenue
Sharing program. The Senate bill closely tracts my legis-
lative recommendations for renewal of this important
domestic program.
Continuation of this program, which provides substantial
assistance to State and local governments remains, however,
one of the major unfinished items of business on the
Congressional agenda.
I urge the Democratic leadership in the House to take
responsible and responsive action to convene an immediate
conference on this bill. They have sought to portray them-
selves as friends of our Nation's cities. Their record on
this legislation stands in marked contrast to their
rhetoric. In delaying action on this bill for over one
year, they have jeopardized the fiscal and economic stability
of our cities. I hope the Democratic Congress will demon-
strate its commitment by moving swiftly and favorably in
getting responsible legislation to my desk for signature
before they adjourn. To do any less would only serve to
aggravate the fiscal problems of State and local governments
and undermine economic recovery.
PRESS/BACKGROUND INFORMATION --
GENERAL REVENUE SHARING RENEWAL
*
The General Revenue Sharing program was enacted
in October, 1972. To date more than $26.6 billion has
been provided to the 50 States and 39,000 units of
local government. These funds have been used by these
governments to meet their priority needs.
*
On April 25, 1975, the President recommended a
5 3/4-year renewal of the General Revenue Sharing pro-
gram. Under the President's proposal, $39.85 billion
would be distributed to eligible governments between
January 1977 and September 1982. The President's pro-
posal preserved the essential provisions of the current
Act and contained recommendations to improve and
strengthen the program.
* On June 10, 1976, the House passed a 3 3/4-year
extension of the program. The bill contains certain
restrictions and burdensome requirements which would
limit the program's effectiveness.
* On September 14, 1976, the Senate passed a
5 3/4-year extension of the program. The Senate-passed
bill incorporates many of the President's legislative
recommendations for renewal. The bill also deletes or
modifies the objectionable features contained in the
House version of this legislation.
*
According to governors, mayors and other local
government officials, failure to extend the General
Revenue Sharing program will result in increased taxes,
cutbacks in essential services or more unemployment.
THE file WHITE HOUSE
WASHINGTON
Good Paul
September 15, 1976
keep closely.
MEMORANDUM FOR
MAX FRIEDERSDORF
very
JIM CANNON
June
FROM
PAUL MYER
SUBJECT:
Senate Action on General
Revenue Sharing Legislation
(September 13-14, 1976)
The Senate yesterday adopted legislation to revise and extend
the General Revenue Sharing program by a vote of 80-4. The
Senate basically approved the bill as reported by the Finance
Committee with relatively minor amendments. Attached for
your information is a summary of the Senate-passed bill and
those amendments adopted or rejected during floor considera-
tion.
The Senate has already asked the House for a conference,
appointing Senators Long, Talmadge, Hathaway, Gravel, Nelson,
Fannin, Hansen and Packwood as its conferees. The conference
issues are clear and the differences subject to constructive
compromise. I am preparing a memorandum on this subject for
your review.
I met separately yesterday evening with Congressmen Brooks,
Horton, Fountain and Brown to discuss the conference situa-
tion. Brooks was extremely negative and indicated that he
would give the matter some thought. The other Members
expressed great concern over Brooks' anticipated selection
of conferees and conduct during the conference.
I have asked representatives from State and local government
and other organizations who have been working with us to
contact the House Democratic leadership and other Members to
urge them to impress upon Brooks their desire for an immediate
and responsible conference.
Attachment
09:503
ATTACHMENT A
SUMMARY -- MAJOR PROVISIONS OF THE SENATE-PASSED
GENERAL REVENUE SHARING RENEWAL BILL
1.
Length of Program -- 5 3/4 years (January, 1977-
September, 1982)
2.
Funding Level -- $41.23 billion; provides $6.65 bil-
lion for FY77 with stairstep increases of $200 million
in each year thereafter.
3.
Funding Mechanism -- entitlement financing (nondis-
cretionary annual appropriation of authorized amounts).
4.
Distribution of Funds -- no change in existing statu-
tory allocation formula or eligibility requirements.
5.
Nondiscrimination -- modifies current nondiscrimination
provision to add prohibition on the basis of age, handi-
capped status or religion; sets forth enforcement
procedures which could lead to the suspension of funds
where discrimination is found.
6.
Other Provisions --
A.
deletes current priority expenditure categories
and matching prohibition.
B.
simplifies current reporting, hearing and audit-
ing requirements.
C.
provides for annual, instead of quarterly, pay-
ments for small units of government.
D.
authorizes a new study of revenue sharing and
the Federal system by ACIR.
FORD
ATTACHMENT B
MAJOR SENATE FLOOR AMENDMENTS
Adopted
1.
Long amendment to reduce from $6.9 to $6.65 bil-
lion the FY77 funding level with annual increases
of $200 million each year thereafter (voice vote).
2.
Gravel amendment to restore House provisions
prohibiting discrimination on the basis of age
or handicapped status (60-15).
3.
Gravel amendment to provide for awarding of
attorney fees to the prevailing party in a suit
brought to enforce civil rights compliance
(40-35).
4.
Gravel amendment to apply existing civil rights
prohibitions and exemptions on religious discri-
mination (59-16).
5.
McGovern amendment to provide annual payments to
any recipient which receives less than $4,000 per
year.
Rejected
1.
Biden amendment to subject program to annual
appropriation process (14-62).
2.
Fannin amendment to strike Davis-Bacon coverage
(15-62).
3.
Javits amendment to provide monthly payments to
any governmental unit receiving more than
$40 million per quarter and annual payments to
any governmental unit receiving less than $4,000
per year.
[9/23/76]
REVENUE SHARING
Chairman Brooks has been trying to stall a conference
with the Senate conferees. He agreed this morning to
assemble the House conferees at 10:00 a.m. Monday, and
there is a possibility that House and Senate conferees
may meet on Monday afternoon.
Recommendation:
If the question of revenue sharing comes up in the debates
the President might want to emphasize his long-standing
leadership in this area and point out that he is greatly
concerned that the time to pass the legislation is very
short and with less than a week of this session remaining,
Congress has not yet acted.
The principal driving force for action in the House is the
fear of Albert , Tip O'Neill, and other Democratic leaders,
that if revenue sharing is not passed next week, you will
call the Congress back in special session to do SO.
Jack Marsh believes this would be an appropriate reason
for the recall of Congress, if necessary.
9/23/76
REVENUE SHARING
Chairman Brooks has been trying to stall a conference
with the Senate conferees. He agreed this morning to
assemble the House conferees at 10:00 a.m. Monday, and
there is a possibility that House and Senate conferees
may meet on Monday afternoon.
Recommendation:
If the question of revenue sharing comes up in the debates
the President might want to emphasize his long-standing
leadership in this area and point out that he is greatly
concerned that the time to pass the legislation is very
short and with less than a week of this session remaining,
Congress has not yet acted.
The principal driving force for action in the House is the
fear of Albert , Tip O'Neill, and other Democratic leaders,
that if revenue sharing is not passed next week, you will
call the Congress back in special session to do SO.
Jack Marsh believes this would be an appropriate reason
for the recall of Congress, if necessary.
FORD QUART
Rev therry
THE WHITE HOUSE
WASHINGTON
September 23, 1976
1976 SEP 24 AM 8 07
MEMORANDUM FOR
MAX FRIEDERSDORF
FROM
JIM PAUL CANNON MYER Paul
SUBJECT:
General Revenue Sharing
Conference
This will confirm my earlier conversation with
you regarding the conference on General Revenue
Sharing legislation. Chairmen Long and Brooks
have agreed to meet on Monday, September 27,
1976, at 2:00 p.m. in Room EF 100 of the Capitol.
Our Good / Jr work
FORD LIBRARY if GERALD
092403
THE WHITE HOUSE
f
WASHINGTON
September 28, 1976
MEMORANDUM FOR THE VICE PRESIDENT
FROM:
JIM CANNON
SUBJECT:
General Jim Revenue Sharing
Here is a summary of the agreement between the House and
the Senate on Revenue Sharing.
attachment
THE WHITE HOUSE
WASHINGTON
September 28, 1976
976 SEP 28 Fil 4 19
MEMORANDUM FOR
MAX FRIEDERSDORF
AIM CANNON
FROM
TRAUL MYER
SUBJECT:
Conference Action on
General Revenue Sharing
Legislation
House and Senate conferees completed action on legislation
to revise and extend the General Revenue Sharing program at
12:30 a.m., Tuesday, September 28. The Conference Report
will be filed today. However, the Conference Report is still
apparently subject to a point of order in the House and may
require a Rules Committee waiver to retain the additional
funds contained in the bill. Assuming the House rules prob-
lem is overcome, Congress should clear the measure for the
President on Thursday or Friday. I would expect that the
President could sign this bill within the October 6-16 time
frame.
The Conference bill extends the program for an additional
3 3/4 years and will provide $25.54 billion to State and
local governments. This legislation is consistent with the
President's renewal recommendations and contains a number of
important improvements in the existing program. While the
Conference bill does contain some restrictions and require-
ments not sought by the Administration, the legislation does
grant significant Secretarial discretion, including authority
to waive many provisions which may be viewed as burdensome
or unnecessary.
Attached for your information and review is a brief summary
of the major provisions of the Conference bill.
Attachment
ATTACHMENT
SUMMARY OF MAJOR PROVISIONS
I.
Extension, Funding and Amounts
*
Extends program for 3 3/4 years (January 1, 1977
through September 30, 1980).
Provides total of $25.54 billion:
FY77 - $4.99 billion 1
FY78 - 6.85 billion
FY79 - 6.85 billion
FY80 - 6.85 billion
1/ total for FY77 is $6.65 billion; $1.66 billion
already appropriated for FY77 under current law.
*
Entitlement financing (nondiscretionary annual
appropriation of authorized amounts).
II.
Distribution of Funds
*
Retains existing distribution formula, except for
certain technical amendments recommended by the
Administration:
Includes separate provision to provide a percentage
of Louisiana's funds to law enforcement officers in
that State.
Resolves dispute involving four Virginia counties
and the Office of Revenue Sharing concerning repay-
ment of $3.3 million in shared revenues. The Con-
ference provision would void the repayment.
III.
Fiscal Requirements
Eliminates priority categories, the matching pro-
hibition and related requirements. Local govern-
ments could use the funds for any purpose.
Modifies the existing State maintenance of effort
provision, making the base period a two year
moving average.
-2-
IV.
Citizen Participation and Reporting Requirements
*
Requires State and local governments to ensure
citizen access to information and participation
in decisions regarding the planned expenditure
of revenue sharing funds (including requirements
for hearings and the publication of reports con-
sistent with existing budgetary practices in
these units of government). The Conference bill
represent a much simplified version of the House
bill and grants the Treasury Secretary broad
discretionary power to issue regulations and waive
certain procedures and requirements contained in
the provision.
V.
Nondiscrimination
*
Expands the existing nondiscrimination provision to
prohibit discrimination on account of religion, age
or handicapped status. While these represent new
prohibitions in the General Revenue Sharing Act, the
Conference language is consistent with current civil
rights law and practices.
*
Continues the existing application of the nondis-
crimination prohibitions to any program funded in
whole or in part with revenue sharing funds. In
adopting this provision, the Conference rejected a
House provision which would have also included
direct or indirect funding of programs. Had this
provision remained in the bill, all programs and
activities of a State or local government would have
been subject to the nondiscrimination prohibition.
Sets forth a strong administrative enforcement pro-
cedure, including the suspension or termination of
revenue sharing funds where discrimination is
found.
*
Provides that an individual may bring suit for a
violation of the Act, but only upon exhaustion of
the extensive administrative remedies contained in
the Act.
*
Provides for the payment of reasonable attorney
fees to a prevailing party in an action brought to
enforce the nondiscrimination provision.
-3-
VI.
Accounting and Auditing Requirements
*
Requires State and local governments to conduct
financial and compliance audits at least every
three years in accordance with State or local law
and generally acceptable accounting and auditing
standards. This provision does not apply to any
government receiving less than $25,000 per year in
revenue sharing entitlements and the Secretary is
granted authority to waive the requirement in cer-
tain other circumstances.
VII.
Revenue Sharing Study
*
Authorizes the ACIR to conduct a three-year study
and evaluation of the American Federal fiscal sys-
tem with particular emphasis on revenue sharing.
9/29/76
file
TALKING POINTS:
DRS
1.
The enactment of the General Revenue Sharing
Conference Report is essential before you go
home.
2.
It is my understanding that the Conference Report
must be protected against points of order in
order to preserve the additional funds which were
unanimously agreed to by the Conference Committee.
3.
You have asked me to indicate to you today my
intentions in regard to the Public Works Appropria-
tion and CETA bills. I am prepared to do so only
if I have your commitment that the General Revenue
Sharing Conference Report is fully protected from
all points of order and cleared for my signature
this week.
rew shaving
THE WHITE HOUSE
WASHINGTON
September 30, 1976
MEMORANDUM FOR
THE PRESIDENT
FROM
JAMES M. CANNON Jain
Congressmen L. H. Fountain and Frank Horton led
the successful fight today for House adoption of
the General Revenue Sharing Conference Report
you had requested. In light of their leadership
role, I believe it would be appropriate for you
to call them and express your appreciation.
[9/30/76]
I am most pleased that Congress has today passed the extension
of the General Revenue Sharing Program.
General Revenue Sharing has proven to be a triumph of the con-
viction that state, county, city and local government can be
far more responsive and flexible in serving citizens than distant
bureaucracies and special interest programs.
Revenue Sharing has only one special interest: the return of
tax dollars to local authorities so they can best determine
how to solve community problems with community solutions.
Without the passage of this program county executives would
have been faced with cutting essential services or raising
property taxes. States which use the majority of their funds
for education would have been confronted with the possibility
of severe reductions in school aid and cities would have had
their already tight fiscal condition further burdened.
I proposed the extension of General Revenue Sharing on April 25,
1975, and have worked closely and continuously since then with
State and local officials to secure passage of this legislation.
While the bill passed by Congress today is not all that I and
the mayors, county executives and governors had hoped for, it
does assure continued growth of this vital program.
Today's action is a most significant accomplishment and all who
participated in bringing about this victory are to be congratulated.
THE WHITE HOUSE
WASHINGTON
September 30, 1976
MEMORANDUM FOR
MAX FRIEDERSDORF
FROM
PAUL TIM CANNON MYER laulton
SUBJECT:
Senate Action on General
Revenue Sharing Conference
Report
The Senate has just cleared for General Revenue Sharing
Conference Report for the President's signature by a
vote of 77-4.
Revenue Sharing
FOR IMMEDIATE RELEASE
Office of the White House Press Secretary
THE WHITE HOUSE
SEPTEMBER 740 30, 1976
STATEMENT BY THE PRESIDENT
I am most pleased that Congress has today passed the extension of the
General Revenue Sharing Program.
General Revenue Sharing has proven to be a triumph of the conviction
that state, county, city and local government can be far more responsive
and flexible in serving citizens than distant bureaucracies and special
interest programs.
Revenue Sharing has only one special interest: the return of tax
dollars to local authorities so they can best determine how to solve
community problems with community solutions.
Without the passage of this program county executives would have been
faced with cutting essential services or raising property taxes. States
which use the majority of their funds for education would have been
conf ronted with the possibility of severe reductions in school aid and
cities would have had their already tight fiscal condition further
burdened.
I proposed the extension of General Revenue Sharing on April 25, 1975,
and have worked closely and continuously since then with State and local
officials to secure passage of this legislation. While the bill passed by
Congress today is not all that I and the mayors, county executives and
governors had hoped for, it does assure continued growth of this
vital program.
Today's action is a most significant accomplishment and all who
participated in bringing about this victory are to be congratulated.
# #
FORD LIBRARY & GERALD
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Revenue Sharing
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quistite Mouse
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FORD & LIBRARY GERALD
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WHITE HOUSE DC 20500
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THE FOLLOWING TELEGRAM HAS BEEN SENT TO THE PRESIDENT:
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NATIONAL ASSOCIATION OF COUNTIES CONGRATULATES YOU AND YOUR
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ADMINISTRATION ON YOUR TREMENDOUS VICTORY IN GETTING GENERAL RENENUE
15
SHARING THROUGH BOTH HOUSE AND SENATE. THERE IS NO DOUBT THAT THIS
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VICTORY WOULD NOT HAVE BEEN ACHIEVED WITHOUT YOUR BRILLIANT
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LEGISLATIVE STRATEGY.
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FORM 0805 PRINTED BY THE STANDARD REGISTER COMPANY, U. S.
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WE ARE DEEPLY APPRECIATIVE OF YOUR DECISION TO SIGN THE PUBLIC WORKS
22
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APPROPRIATIONS AND CETA PUBLIC SERVICE JOBS BILL. THIS AGAIN SHOWS
24
YOUR COMPASSION FOR THOSE IN ECONOMIC DISTRESS.
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BERNARD F HILLENBRAND EXECUTIVE DIRECTOR
100/01
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WHITE HOUSE DC 20500
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THE FOLLOWING TELEGRAM HAS BEEN SENT TO THE PRESIDENT:
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NATIONAL ASSOCIATION OF COUNTIES CONGRATULATES YOU AND YOUR
FORD & LIBRARY
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ADMINISTRATION ON YOUR TREMENDOUS VICTORY IN GETTING GENERAL RENENUE
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SHARING THROUGH BOTH HOUSE AND SENATE. THERE IS NO DOUBT THAT THIS
17 VICTORY WOULD NOT HAVE BEEN ACHIEVED WITHOUT YOUR BRILLIANT
THE
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LEGISLATIVE STRATEGY.
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PRINTED
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0805
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WE ARE DEEPLY APPRECIATIVE OF YOUR DECISION TO SIGN THE PUBLIC WORKS
FORM
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APPROPRIATIONS: AND CETA PUBLIC SERVICE JOBS BILL. THIS AGAIN SHOWS
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YOUR COMPASSION FOR THOSE IN ECONOMIC DISTRESS.
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BERNARD F HILLENBRAND EXECUTIVE DIRECTOR
01410