CONGRESSIONAL RECORD -- SENATE

October 13, 1972

Page 35902

Mr. HUGHES. Mr. President, in a very short time, perhaps just a matter of days, we will probably witness via our television screens another historic bill signing. I suspect that every Governor, every county official, and every mayor throughout the land would like to be

present. For on that occasion President Nixon will sign into law "An act to provide fiscal assistance to State and local governments, to authorize Federal collection of State individual income taxes, and for other purposes." In other words, Mr. President, revenue sharing.

As revenue sharing becomes law, I think it appropriate for us to give credit where credit is due, to the man who has been consistently behind the idea of revenue sharing from the first. I refer to our distinguished colleague from Maine (Mr. MUSKIE). Senator MUSKIE introduced the first revenue sharing bill in 1969 – over 3 years ago. One of the key elements of his program then was the need factor, which has been largely carried over into today's legislation.

The story of Senator MUSKIE's involvement with revenue sharing is ably told by Don Larrabee in the Maine Sunday Telegram of September 17, 1972. I urge all Senators to read it, and I ask unanimous consent that it be printed in the RECORD at this point.

Without objection the article was ordered to be printed in the RECORD, as follows

[From the Maine Sunday Telegram, Sept. 17,1972]

REVENUE SHARING: MUCH OF IT WAS SENATOR MUSKIE'S DOING

(By Don Larrabee)

WASHINGTON.– Now that a program of revenue-sharing is about to become law, it is fascinating to look back 18 months to a time when the legislation was virtually written off as a hopeless gesture by the Nixon Administration.

While the concept of providing states and cities with large chunks of general financial assistance had bi-partisan support, there were powerful men in Congress who questioned the approach. One of these was Chairman Wilbur Mills, D-Ark., of the Ways and Means Committee who frankly agreed to hold hearings in June of 1971 only as an exercise to justify killing the bill.

The surprising conversion of Wilbur Mills to revenue sharing may well have started June 1 when Sen. Edmund S. Muskie, D-Me., jumped the gun on the Ways and Means Committee with his own revenue sharing hearings.

The Muskie Subcommittee on Intergovernmental Relations had a vested interest in the subject but, from a purely technical standpoint, it had no jurisdiction. Revenue bills must originate in the House.

But the Maine Senator informed Mills that he wanted to give mayors, governors and other interested Senators a chance to explain why they thought the revenue sharing idea would be helpful. The Arkansas Democrat interposed no objections and, in turn, invited Muskie to visit his committee and make the case at a later date.

Muskie's interest in revenue sharing was sparked during the Johnson Administration by Dr. Walter Heller, LBJ's Economic Adviser, who made the mistake of allowing his proposal to surface before the President was ready to embrace it. Johnson never sent it to Congress.

When President Nixon took office, he talked vaguely of revenue sharing but while he was trying to decide on a formula, Muskie introduced the first bill. It called for a $5.3 billion annual program, combining $3.5 billion in direct assistance and $1.8 billion in income tax credits for the states.

Joining with Muskie on the bill in 1969 was former Sen. Charles Goodell, of New York, a Republican who was purged by the White House in the 1970 campaign. There were seven days of hearings then but not much indication of a congressional groundswell for the idea.

In 1970, the President advanced a modest program which was ignored by Congress. Last year, the White House produced the $5 billion package that will soon go on the statute books, with some major refinements by Congress. Chief of these will probably be a guarantee that the greatest help will go to those cities and counties that need it the most.

The "need" factor was not in the Nixon program. It was a key element of the Muskie bill and is now a part of both the Senate and House versions, although not in precisely the form Muskie suggested two years ago.

When he went before Mills' committee on June 9 last year, the Maine senator played heavily to the Arkansan's vanity. And he played up the "deficiencies" in the Nixon Administration's proposal which were causing Mills the most concern – the failure to emphasize "need," the lack of incentives to the states to improve their own systems of raising revenue and the lack of protective provisions against the shared revenues being used in a discriminatory manner.

The Nixon formula distributed assistance at the local level solely on the basis of revenues raised.

This, Muskie said, would not get maximum help to the cities and counties that need it the most nor did it take into account the eroding tax bases of the cities.

Muskie's own bill recognized population and tax effort but also apportioned financial assistance on the basis of a "poverty" ratio – the percentage of families within a city receiving public assistance and the percentage with annual incomes below the poverty line.

The conference committee on the revenue sharing bill will probably end up with something along these lines and it may very well contain an incentive to the states to improve their own systems of taxation.

Muskie succeeded in building steam for the revenue sharing program on the Senate side. His hearings showed the extent of bi-partisan support and reflected the strong sentiment of the mayors for having a "need" factor.

When Muskie went before the Mills committee, he was ready for some tough questioning by the chairman. It never happened. Mills slipped out of the room, without as much as a comment and turned the gavel over to a subordinate, as Muskie was completing his formal presentation. Was Mills showing his disdain for the whole idea or was he trying to avoid a confrontation with the man who, at that time, was the acknowledged front-runner for his party's presidential nomination?

Later in the day, there was an auspicious meeting between several mayors, Muskie, Mills and Senate Democratic Leader Mike Mansfield. It was not generally known at the time but Mills agreed on the spot not to hold up the revenue sharing bill. He promised there would, indeed, be legislation to help the cities, particularly those in the deepest trouble.

Wilbur Mills told Muskie quietly that day that there would be a bill and that he was particularly impressed with the Muskie concept of a "need" formula. It might not be called revenue sharing, he said with a twinkle, but there would be a State and local assistance act. And it appears now, some 15 months later, that there will be.

For Maine, this will mean in the neighborhood of $30 million a year, depending upon the final settlement by the Conference Committee. The House bill allocates $19.9 million to Maine. The Senate version provides an additional $16.8 million, or roughly $36.7 million. There will be a compromise to help the larger states which suffer under the Senate version.

The bill that emerges from the House- Senate conference won't have Muskie 'a name attached but the legislative history of revenue sharing, as it is known to the bill's supporters in Congress, bears the Muskie imprint as much as anyone's.