CONGRESSIONAL RECORD -- SENATE

August 10, 1967

Page 22177

FEDERAL-STATE RELATIONS -- AN AREA OF RAPID CHANGE

Mr. MUSKIE. Mr. President, the critical dimension of improved intergovernmental relations is better Federal-State relations. Many recent developments give us some optimism about solid, long-range improvements. But other trouble spots still exist.

Because of the constant change and challenge in Federal-State developments, we must constantly update the methods by which American federalism seeks to discharge its responsibility for our domestic governmental needs. Enactment of pending legislation on intergovernmental cooperation, manpower, and coordinating machinery in the Executive Office of the President would be a significant step toward further improving Federal-State relations.

Albert J. Richter, a senior analyst of the Advisory Commission on Intergovernmental Relations, of which I am a member, recently delivered a speech which highlights many of the points of friction in contemporary Federal-State relations, along with efforts at the national level to deal with them. Mr. Richter's well-developed and balanced speech also identifies other tension points which still require concerted attention and action from the administration and Congress.

Mr. President, I commend this address to the Senate and ask unanimous consent that it be printed in the RECORD.

There being no objection, the address was ordered to be printed in the RECORD, as follows:

CHANGING FEDERAL-STATE RELATIONS AND THE WORK OF THE STATE BUDGET ANALYSTS -- AN ADDRESS BY ALBERT J. RICHTER, SENIOR ANALYST, ADVISORY COMMISSION ON INTERGOVERNMENTAL RELATIONS, BEFORE INSTITUTE FOR BUDGET ANALYSTS, UNIVERSITY OF KENTUCKY, LEXINGTON, KY., JULY 10, 1967

Einstein postulated a fourth dimension in what we normally conceive as our three-dimensional world. Change, he said, is this fourth dimension and it affects all things, including inanimate objects.

Discussing change in Federal-State relations is difficult, not because there is so little going on, but because there is so much. Intergovernmental relations are in a high state of flux, as much in the relationship of the States to the National Government as anywhere. These changes are important to all of State government, but particularly to Governors and to their key staff assistants, not the least of whom are their budget staffs.

Many of these changes are favorable to the role of the States in our Federal system, and specifically to the role of the Governors in that system. But by no means are they all favorable. Our dynamic federal system is constantly evolving in response to contending forces at all three levels, and sometimes the balance of these forces works against as well as for the role of the States.

For purposes of this presentation, I have divided the changes favorable to the States into three groups: first, those representing the Federal Government's increasing sensitivity to and concern for the States in the development and execution of National programs; second, those reflecting an explicit desire of the Federal Government to have grant-in-aid programs make a constructive impact on the States; and third, those reflecting Federal actions helping to build up State governments into fully viable partners in the federal system. The three groupings obviously overlap, but each has its particular emphasis. Finally, I will comment on what appear to be significant trends in State government itself affecting State-Federal relations.

THE EXPANSION OF CONSULTATION

Last fall President Johnson designated Farris Bryant, former Governor of Florida and now Director of the Office of Emergency Planning, to be the day-to-day contact between the White House and the Governors. Assisted by top staff aids and departmental representatives, Gov. Bryant has visited 40 State capitals on the invitation of Governors, discussing matters of concern to them and particularly problems involved in State administration of Federal grant programs and Federal coordination of those programs. A number of the trips also resulted in joint meetings with State legislative leaders. Further liaison activities are planned by units of the Executive Office of the President, which will be expanded to include meetings with county and municipal leaders and their staffs.

The President has taken a keen interest in these liaison meetings, and recently directed Cabinet members to make visits to State and local governments in order to further broaden field exposure of top Administration leaders.

The National Highway Safety Act of 1966 marked a departure in Federal legislation affecting the States by requiring that the Secretary of Commerce (now Transportation) cooperate with the States in promulgating uniform standards for driver and pedestrian performance. The DOT has held two meetings with Governors' representatives for this purpose, and it seems that the administration of the new program will be the better for it. Among the practical questions raised at the meetings, for example, was the problem of States' meeting Federal requirements when new State legislation was required by July 1, 1967 but biennial legislatures did not meet until January 1968.

One of the practices instituted by that innovative agency -- OEO -- is the establishment of a Public Officials Advisory Council, which includes five Governors among its members. Sargent Shriver has used the Council as a sounding board for new OEO proposals, as well as a regular source of reaction to OEO legislative and administrative policies affecting State and local governments. On the staff level, moreover, OEO has established a regular, bi-weekly series of meetings with representatives of national associations of public officials, such as the Council of State Governments, for the purpose of taking up more day-to-day and detailed matters and deciding which issues should be referred to the POAC.

The Department of Housing and Urban Development, with responsibility for intergovernmental relations formally assigned to an Assistant Secretary, also has recently moved to institute a continuing liaison with national associations of public officials. In recent months the Secretary of HUD had a meeting with Governors' representatives to discuss their role in HUD programs and specifically the implementation of the new HUD program for State technical assistance to local governments on urban problems.

Probably one of the most significant findings brought back by Gov. Bryant from his State visits is Governors' belief that their advice is too infrequently sought in the development of new Federal legislation and the promulgation of implementing administrative regulations. Their enthusiastic response to special meetings with the President and the visits of Gov. Bryant are indicative of how much they value the opportunity to voice their views on policy matters to top officials in the Federal government. In regard to administrative regulations, the President took an important step on November 11, 1966 by asking the Director of the Bureau of the Budget and department and agency heads administering grants-in-aid to establish a procedure whereby Governors and city and county chief executives will be consulted before issuance of new and revised administrative directives. This consultation procedure supplements rather than replaces the established channels of consultation on functional problems between State and local officials and their representatives and Federal administrators. But for the first time it will provide a regular method whereby State and local officials will have an opportunity to voice their views on important proposed changes in administrative directives.

I am sure you are all familiar with how voluminous and detailed are Federal rules and regulations, so you can appreciate that the administrative job of handling this procedure will take a while to work out. The ACIR is directly concerned, for the President has requested that we serve as an intermediary between the administrative departments and the public officials groups in channeling proposed administrative changes and transmitting to the departments questions and comments raised by the latter. It will take time to develop effectively this consultative procedure and doubtless some stress and strain will be generated at the outset. But there is no doubt about the President's determination to see that it works, and we share his belief that it has great potential for better Federal-State relations. As the President stated at the recent Democratic Governors' Conference:

(The procedure) will strengthen your ability to plan, to budget, to coordinate, to an extent never possible in the State House before ...

Finally, increasing consultation with State officials has by no means been confined to the

Executive Branch of the Federal Government. The hearings on "Creative Federalism" conducted by Sen. Muskie's Subcommittee on Intergovernmental Relations turned an attentive ear to the views of Governors on how to bring a greater degree of order to the burgeoning Federal grant-in-aid system. A number of Governors submitted their own ideas on how to overhaul the grant system and to lessen the intergovernmental frictions that plague it at the State and local levels.

THE IMPACT OF GRANT PROGRAMS ON STATE GOVERNMENT

This brings us to the second major group of developments in Federal-State relations: the impact of Federal grant programs on State policy and administration. This subject, of course, is the underlying focus of much of the recent concern with consultation. What we are concerned with now are the other concrete steps that have been taken recently to make this impact constructive from the viewpoint of State government.

The Federal categorical grant system is one of the subjects being given intensive review by the Advisory Commission in a current broad study of fiscal federalism. The Commission will have before it later this month a first stage report, the major part of which is directed toward the features, trends, and problems of the existing categorical grant system. Included is specific consideration of the impact on State and local governments. The Commission staff found, in this connection, that:

Most State and local officials believe that the increasing number of grant programs -- now near 400 -- has led to greater Federal interference in their administrative and policy roles and has tended generally to be less stimulative and more coercive.

The grant-in-aid principle is accepted by State and local officials, but specific reforms are desired, including greater flexibility in organizational, personnel, and fiscal requirements; greater uniformity in matching and apportionment formulas; broader grant categories; better program coordination; and greater certainty in Federal grant funding practices.

Grants often have accentuated cleavages between line agency administrators and political decision-makers and between the States and their localities.

We repeatedly hear from State and local officials that excessive proliferation and categorization of grants impose rigidity on their planning and performance and tend to "skew" their budgets in directions that might not always correspond with State and local needs. The cry has been for more flexibility and vesting more responsibility in grant recipients concerning how Federal grant funds should be used in meeting the national program objectives set forth by Congress. In response, there have been some encouraging recent developments at the Federal level.

Last year, through the leadership of HEW Secretary Gardner, Congress passed the Partnership in Health Act, providing grants to the States for comprehensive health planning and comprehensive health services, and permitting them, subject to federally approved plans and programs, to use discretion in allocating funds to meet health needs that formerly were specifically earmarked for such programs as tuberculosis prevention and control, venereal disease, and heart disease. This is a pioneering program, and its implementation is still being worked out. Certainly there is a challenge to State budget officers to help make it work and thus encourage similar legislation in other fields. Secretary Gardner has indicated his interest in promoting additional consolidation steps in other HEW programs, and a departmental task force is working closely with the Bureau of the Budget to this end. A like effort is planned with HUD on urban physical development grant programs.

Last year, at the instigation of the Governor's Conference and the ACIR, President Johnson instructed the Director of the Bureau of the Budget and the heads of seven Federal departments and agencies administering planning and development programs to coordinate development planning for programs based on multijurisdictional areas. The Bureau has now issued a circular implementing the Presidential directive, and requiring Federal agencies to consult with Governors before designating planning and development districts or regions. Where the State has established such districts, the boundaries of new districts designated by Federal agencies will conform to them unless there is a clear justification for not doing so.

The Budget Bureau is also participating in a Planning Coordinating Committee established by HUD which includes representatives of other Federal agencies with grant programs aiding or requiring development planning. The committee plans to (a) act as a clearinghouse of information on grants awarded to State and local governments for development planning assistance; (b) monitor the creation and adjustment of substate and multi-county planning jurisdictions supported by Federal planning territories; and (c) conduct a comprehensive survey of Federal planning requirements in order to ease the burden of applicant State and local governments in justifying planning activity.

Among the various "gaps" that we hear about in Washington is the "information gap" with respect to the availability and requirements of grant-in-aid programs. Part of the problem is that sometimes there is too much information rather than too little, coming from too many sources and leaving potential State and local grant recipients confused as to just what is available and how to go about getting it. Early this year steps were taken to avoid unnecessary duplication in the production of general catalogs of Federal grants-in-aid. Under coordination by OEO, a single revised catalog listing all Federal programs of the agencies which bear on individual and community development is being published now and will be available this month. Further, an interagency task force has been designated to develop a general catalog of Federal grants-in-aid which will meet effectively the total information needs of both State and local government and the Federal agencies concerned.

A number of other developments in the Federal government have potential of producing additional advances in making grants easier to obtain and to administer at the State and local levels:

The Bureau of the Budget is developing a plan and implementing legislation for simplifying the processing of grant-in-aid applications. The legislation emphasizes the combination of separate categorical grants into single packages by applicants, to be singly funded by Federal agencies.

HUD commissioned a report on The Posture of the Department Toward the States which produced recommendations for ways of making the States full partners in executing HUD programs, overcoming the HUD tradition of by-passing the States.

Another Budget Bureau project involves a study of the difficulties States experience because Federal-funds for grant programs are delayed by late Congressional appropriations and executive branch delays in processing applications. As part of this study the Bureau is giving careful attention to Gov. Nelson Rockefeller's "prefinancing proposal", whereby a State would finance the Federal share of grant project costs prior to Federal grant payments, with the expectation that the Federal Government would reimburse at a later date. The study of delays is making good use of case materials previously collected by the Council of State Governments through your organization.

Finally, working closely with HEW grant administrators, the Budget Bureau is trying to set uniform standards and formulas for determining allowable costs for administrative and other program-related expenses under the full range of Federal grant-in-aid programs.

FEDERAL ACTION TO STRENGTHEN THE STATES

All the foregoing should have a salutary effect on the States' role in the federal system by helping to overcome some of the most vexing intergovernmental problems produced by the present categorical grant system. Yet there is a third set of developments at the Federal level which is aimed more directly at strengthening the capabilities of the States. Again, some of these are already in effect; others are in the planning or study stage.

First, is the new program of grants to States to help them provide technical assistance on urban problems to their smaller communities -- Title IX of last year's Model Cities Act. One reason often cited for States' losing ground in the federal system is their failure to meet the critical needs of their urban areas, and the development of direct Federal-local assistance programs in such areas as public housing, urban renewal, planning, and community action has resulted. The States have a very important role to play in meeting urban problems, however. They have the authority and the territorial adequacy to deal with local problems that extend beyond the boundaries of individual localities. They have experience, born of long responsibility for such important functions as education, hearth, and welfare, to contribute considerably to local governments' attack on problems of human development. Title IX is designed to help States reassert this historic responsibility. It offers Federal grants to States to provide technical assistance to communities of 100,000 population or less. It can be used to foster the development of State offices of community affairs or community development, which is, by the way, a most encouraging development in State-local relations.

In an area of general interest to you, the Bureau of the Budget is cooperating in an intergovernmental effort to apply the new PPBS techniques to the solution of State and local problems. The Ford Foundation has made a grant to The George Washington University State and Local Project to conduct a pilot demonstration of the feasibility and usefulness of program budgeting for State and local governments in five States, five counties, and five cities. An allocation has been made from the President's Management Improvement Fund to assist in financing the project. The Bureau has also contracted with a private firm for development of cases on various aspects of PPB activities in the Federal Government. The cases are to be offered to universities for use in training students for State and local government posts where knowledge of the PPB system will be increasingly important.

On another front, the ACIR is working closely with a task force organized by the Budget Bureau and including State and local government associations to identify possible improvements in intergovernmental information systems, prepare a work program, and suggest priorities with respect to compatibility of data which governments collect and use; joint utilization of automatic data processing facilities; coordination of five-year development efforts in order to conserve on scarce manpower skills in the statistical field; and the possibility of extending the central data bank concept.

A related development is the OEO Information Center's work with States in setting up State information systems. OEO's interest is not unselfish. To get valid information on grant-in-aid expenditures by county it depends on good State and local reporting. The results of the current project, however, can be immensely helpful to States for their own policy, management and coordination purposes.

Finally, the Bureau of the Budget has just launched a statistical program for reporting

all Federal outlays -- direct expenditures as well as grants -- by geographic location. The system aims to provide a report on Federal expenditures in States, counties, and incorporated cities over 25,000 population. It should add greatly to State and local capability to plan adequately, knowing definitely what Federal funds and programs are working within their jurisdictions. The system is to be administered by the OEO Information Center.

SOME NATIONAL LEGISLATIVE PROPOSALS AFFECTING THE ROLE OF THE STATES

We can not leave this quick review of trends at the Federal level tending to strengthen the States without mentioning important legislative proposals pending in Congress. The first is the Intergovernmental Cooperation Act of 1967, S. 698, introduced by Senator Edmund S. Muskie and endorsed by the ACIR. This measure represents an expanded version of a similar proposal passed by the Senate in 1965. Of immediate interest to those concerned with improved State management of grants-in-aid is the provision for informing governors of all grants that are made to their States and for payment of such grant monies to State treasurers instead of to a variety of individual State agencies. The legislation also permits waiving of the "single State agency" requirement, when the Federal administrator concerned is satisfied that the objectives of the grant program will not be damaged. Also carried over from the last year is the proposal for allowing all Federal departments to provide technical assistance to State and local governments on a reimbursable basis, so long as such services do not compete with private enterprise.

The 1967 version contains a new title which would authorize the President to submit to Congress proposed consolidations of categorical grant programs which would become effective within 90 days if neither House objected. This proposal, patterned after the present Presidential authority to submit proposals for executive reorganization, is one additional approach to the urgent problem of reducing the excessive categorization of Federal grants and giving States and localities more flexibility and less confusion in use of such funds.

Another piece of proposed legislation with important implications for State government is the Intergovernmental Personnel Act, introduced by Senator Muskie, and the parallel Intergovernmental Manpower Act sponsored by the Administration. These bills would, among other things, provide grants for improvement of State and local personnel administration, authorize Federal assistance in training State and local employees, and facilitate the interchange of Federal, State, and local personnel.

In the planning field, the Comprehensive Planning and Coordination Act introduced by Senator Scott would overhaul the responsibilities for encouragement of development planning at the Federal level and seek to encourage establishment of a comprehensive planning, programming and coordinating unit in each State government responsible to the governor.

Finally, of course, there have been many proposals in Congress for sharing Federal revenues with State and local governments largely stimulated by Walter Heller's suggestion of a couple years ago. The ACIR staff tried to keep track of all the tax-sharing bills introduced, but gave up on March 15 when the list reached 25. The whole issue of revenue-sharing will receive prime attention in the Commission's current fiscal study.

SOME "ANTI-STATE" TENDENCIES IN FEDERAL STATE RELATIONS

At this point I would not be surprised if you suspected me of looking at the world of Federal-State relations through rose-colored glasses. So it is time to mention some

negative items. As the foregoing implies, proliferation of categorical grants is an outstanding one.

Another is the growing tendency within the grant system toward the development of direct Federal-local grant programs which by-pass the States -- so-called "direct Federalism". From 1944 to 1965 direct Federal grants to local government rose from $53 million to $1,155 million. Among the existing 379 separate grant programs, 40 planning, operating, and construction programs go directly to local governments without touching base in any way with State government.

Equally serious is the tendency toward what has been called "private federalism", that is, Federal grant programs that by-pass both State and local governments and go to private profit and non-profit groups. Admittedly, most of these grants go to institutions of higher education for research and development projects that State and local governments are not ideally equipped to handle. On the other hand, some, like the community action program and the Job Corps, involve the type of activities that State and local governments are established to conduct. Certainly there are good reasons why such programs have largely used non-governmental agencies, but their effects on the role of State and local governments can not be dismissed.

An important part of "direct" and "private" federalism is the increased use of project grants in place of formula grants. Project grants dispense with the State's role as the basis and mechanism for distributing funds. Moreover, they place much more discretion and authority in Federal administrators in Washington.

A condition of long standing which continues to bedevil State-Federal relations, and particularly the Governor and his executive office in their overall job of management and fiscal coordination, is the relationship of functional specialists at the State and Federal levels. You may be familiar with the 1965 Senate Subcommittee on Intergovernmental Relations study of the attitudes of middle management officials in the Federal Government toward Federal aids. These officials evidenced a discouraging lack of awareness and concern for the broader implications of their particular functional programs on the total coordinating job of Governors and mayors in the States and cities affected by their special programs. With long-established professional ties to their counterparts in State and local government, their major if not exclusive concern was with the narrow workings of their specialized programs.

Finally, and also stemming from the categorical grant system and the persisting power of functional specialists, is the proliferation of separate planning requirements for many Federal grant programs administered by the States. As you know, State plans under these grants are often little more than proposals for implementing program objectives, hardly deserving the name of plans. The important thing, though, is that they are functionally oriented, with little relation to overall State planning or programming. Several of the actual and potential developments I mentioned earlier are directed at bringing some consistency to these plans and toward relating them to comprehensive programs and plans. Nevertheless, as long as they exist and particularly if they continue to multiply they will make more difficult the policy-preparation and overall coordination talk of the Governor and his management and fiscal staff.

STATE ACTION TO STRENGTHEN FEDERAL-STATE RELATIONS

Thus far we have concentrated on the Federal side of the Federal-State equation. What actions have been occurring on the State side to strengthen Federal-State relations? I feel somewhat more presumptuous in trying to comment on this subject before a group whose business is to know about what goes on at the State level. I shall try, however, to offer some comments from a nationwide perspective.

Many of the favorable trends delineated at the Federal level are of course responses to efforts of the States to improve Federal-State relations. State and local governments, for example, long have sought consultation by Federal officials. Likewise they have pressed for grant simplification and consolidation, and for important provisions of some proposed new Federal legislation, such as the modification of the single State agency requirement.

But equally important are the trends toward strengthening State government itself, making it capable of carrying its share of the federal system. What we are concerned with here is overcoming the weaknesses that former Governor Sanford of North Carolina had in mind when he said, "the States are their own worst enemies." As he said:

No State can be strong with a weak legislature, a hamstrung chief executive, a harassed judiciary, a chaotic administrative structure, an invidious interest group atmosphere, weak political parties or public apathy.

What are some encouraging trends toward overcoming these shortcomings?

Legislative reapportionment is one. By now the wave of reapportionment actions set off by the historic 1964 court decision is nearly completed. There is of course some debate on what the "one man-one vote" realignment will mean ultimately so far as improved state government is concerned. Some doubt exists, for example, on whether legislatures will become more sensitive to urban needs. One result seems clear, however: the rapid pace of legislative reapportionment has tended to generate efforts in a number of States for the overhaul of State government and its role in domestic affairs. This may prove to be much more important in the long run than a numerical realignment of urban and rural representation.

Overhauling State government in many cases means constitutional revision, and there has been impressive activity on this front. Revision was undertaken or underway in 20 States last year. The New York Convention went to work this spring and the Maryland convention is due to begin in September.

Contributing to the renewed interest in State constitutional revision, but with additional salutary effects as well, is the number of organized efforts to improve the image and performance of State legislatures and State government generally. You are doubtless familiar with one or all of these, such as the Citizens Conference on State Legislatures, supported by the Ford Foundation and the Carnegie Corporation; the Ford Foundation supported study by the National Municipal League of constitutional and other barriers to legislative effectiveness; and the Study of the States, under the direction of former Governor Sanford, conducting a two-year study of the administration of State Services. One of the latest activities of the Sanford group is to project a series of institutes, established at various universities and under the leadership of former Governors, to develop studies and proposals and to promote action on major issues of State government. The first, concerned with State planning, has been set up at the University of North Carolina under the leadership of former Governor Jack Campbell of New Mexico.

Another significant development toward a stronger State role is the recent establishment of a Washington Office of the National Governors' Conference. This office conducted its first national conference in Washington recently, a workshop for Federal-aid coordinators appointed by the Governors. In the same general area, the Council of State Planning Agencies, created in 1964, established a National Office on July 1 of this year.

In this connection, HUD recently announced a grant of $83,000 to the Council of State Governments underwriting a study of ways of strengthening the role of the States in administering federally assisted grant programs. One of the major objectives is to develop suggestions for methods of relating functional programs more effectively to overall State comprehensive planning.

I mentioned earlier the critical issue of State activities in behalf of their local governments as one of the determinants of the continuing strength of the States in the Federal system. The ACIR has concluded that one of the key measures of this activity is the degree to which States provide financial assistance to their localities, either by "buying-in" to Federal-local grant programs, thereby helping to provide the non-Federal share, or by direct programs of assistance. We have seen some State participation of this kind in the past several years, particularly in certain functional fields, such as water supply and pollution control, low-income housing, and urban mass transportation.

In all candor, however, and considering the nationwide picture, States’ initiative in providing financial aid to their political subdivisions has not been good. It led the ACIR to comment in its 1967 annual report, with specific reference to metropolitan problems, that "The States are on the verge of losing control over the metropolitan problem; if they lose this control they lose the major responsibility for domestic government in the United States and in turn surrender a vital role in the American federal system."

SOME IMPLICATIONS FOR STATE BUDGET ANALYSTS

Summing up this brief sketch of a very broad field, it seems to me that the current is flowing strong at both the Federal and State levels for both improved Federal-State relations and a more important role for State government, which some would argue are the same thing. Of course, the picture has some serious cracks in it. Perhaps the chief deterrent to over optimism is the question of whether States themselves are going to exercise enough initiative in reforming themselves and particularly whether they are going to face up to the needs of their metropolitan areas.

Now what does all this mean so far as the work of State budget analysts is concerned? I will venture a few generalizations.

First, there is a clear movement to strengthen the role of the Governor in policy initiation and administration. Many changes point in this direction: Federal consultation, the movement toward possible consolidation of Federal categorical grants with greater devolution of authority to the States, the interest in PPBs, and the drive for State constitutional revision, with emphasis on administrative integration under the Governor. Considering the key role of the budget agency for the chief executive's policy initiation and overall management function, it would seem that this trend can not help but portend an increasingly important role for State budget offices.

Second, there are hopeful signs of increasing flexibility being injected into the Federal categorical grant system. The Partnership in Health Act; the current effort of the Bureau of the Budget to develop possible additional consolidations and joint applications; the interest in bringing more consistency to the many planning requirements and to relate program planning to comprehensive planning; and Congressional dissatisfaction with the manageability of the present categorical system-all are straws in the wind. Flexibility should have a favorable effect on States' ability to order their own affairs and make more effective use of Federal grant funds. At the same time, it will place a premium on high caliber fiscal and program planning, putting it squarely up to the States to really demonstrate what they have long contended, namely, that given more flexibility they would be able to do a better job of meeting local needs up to nationally determined minimum standards. The challenge to budget officials here is also clear.

Third, it seems inevitable that there must be a greater rapprochement between budget and planning officials. Budgeting is planning, and planning without consideration of budgetary consequences is an exercise in futility. PBB is certainly aimed at bringing these two activities together to the benefit of both. Other developments, such as the CSG study of State planning, and the interest of the Federal government in encouraging State planning and rationalization of many individual planning requirements in Federal programs are other steps in the same direction. I would not guess where this growing together of planning and budgeting will end, but it seems pretty clear that it can have momentous consequences for budget officials and should receive their closest attention.

Finally, State budget personnel have a great opportunity to have an impact on the administration of Federal grant programs through the new consultation procedure being set by the Federal Administration. As I explained earlier, this procedure contemplates fanning out to representatives of State and local government associations copies of proposed administrative directives for their comment and review. Many of the critical issues arising in these directives have to do with fiscal requirements of immediate concern to State budget officials. Members of NASBO obviously would do well to alert your representatives in the consultation process -- namely, the Council of State Governments and perhaps the Governors' Conference -- to your particular interests so that you can take maximum advantage of this new opportunity to affect administration regulations before they become frozen into place.