March 15, 1973
Page 8143
SHRIVER AND BIEMILLER ON THE NEW FEDERALISM
Mr. MUSKIE. Mr. President, this morning the Subcommittee on Intergovernmental Relations concluded 7 days of Washington testimony on the impact of the new federalism on State and local governments by hearing from two distinguished Americans – Andrew J. Biemiller, director of legislation for the AFL-CIO, and R. Sargent Shriver, former Director of the Peace Corps and the Office of Economic Opportunity.
Because of the relevance and importance of their excellent statements, I ask unanimous consent that the statements of both Mr. Biemiller and Mr. Shriver, as well as my opening statement, be included in the RECORD at this point.
There being no objection, the statements were ordered to be printed in the RECORD, as follows.
OPENING STATEMENT OF SENATOR EDMUND S. MUSKIE
Today we conclude seven days of testimony in Washington on the impact the Administration's 1974 budget and its broad New Federalism proposals could have on the way America is governed. The testimony we have heard so far points to the inescapable conclusion that these programs – to the extent that Administration witnesses have even been able to define them – promote confusion, not order; retrenchment, not reform; social stagnation, not advance.
And, contrary to the President's rhetoric, his policies would in fact force increases in local sales and property taxes for millions of Americans.
On top of that evidence, we now have proof that the Administration is reneging on the income tax reforms the President promised the Nation last June 22. His top domestic adviser, John Ehrlichman, has stated that the only tax changes that could generate significant new revenues are those which are unacceptable to all of us – eliminating exemptions for dependents and deductions for homeowners' mortgage interest and for contributions to churches and the Boy Scouts.
Either Mr. Ehrlichman is ignorant of the truth or he prefers to conceal it. Maybe he really does want to end personal exemptions and deductions for homeowners' mortgage interest and for contributions to charity. But I think those ideas are preposterous, and the fact that he even suggested them shows how blind this Administration is to the interests of working Americans.
Since Mr. Ehrlichman apparently does not believe that we can – or should – restore fairness to our tax system, I would suggest he read the Congressional Record for January 23 at page 1848, where I discussed the Tax Reform Act of 1973, my proposals to attack 24 of the worst inequities in the tax code, advantages that primarily benefit wealthy individuals and powerful corporations. The reforms I proposed then would bring in $18.6 billion a year by 1975 by eliminating or narrowing the tax inequities this Administration prefers to perpetuate.
They would raise $2.1 billion in reforms of capital gains taxation. They would generate $2.4 billion from new treatment of capital gains at death and $1.1 billion from reduction of the percentage depletion allowance. Repeal of the Asset Depreciation Range System would add $4.2 billion, and $1.3 billion would come from reform of taxes on foreign investments.
None of these reforms would hurt middle-income taxpayers. All of them would affect high- bracket individuals and corporations. Those are the facts, and Mr. Ehrlichman cannot wish them away.
This Administration must be made to see the reality the rest of us cannot escape. For special Americans, there are tax privileges. For ordinary Americans, there are only tax burdens, and this administration now offers them no relief, only added distress – new taxes raised at the local level to cover obligations the Federal Government will no longer honor.
The Administration is deceptive when it complains about budget deficits and then sidelines the constructive alternative of tax reform. The Administration is deceptive when it promises to relieve high property taxes – as the President did in his 1972 State of the Union Message – and then acts in a way that forces State and local governments either to increase property taxes or abandon needed social services.
The record of these hearings will show the dangers we face unless the Administration modifies its proposals, redeems its campaign pledges and begins to tell America the truth.
STATEMENT OF ANDREW J. BIEMILLER
Mr. Chairman, the AFL-CIO is deeply concerned by the Administration's callous abandonment of social programs that is inherent in its budget for the 1974 fiscal year.
The budget presented to Congress and the nation on January 29, 1973 is not based on an analysis of the nation's needs and the federal government's responsibilities in meeting these needs; it is an attempt to conform to preordained targets of receipts and expenditures. It represents a program which will eliminate much that is good and necessary along with some waste.
Dismantling vital social programs, such as those which create jobs, promote educational opportunity and provide housing, is not the way to improve the quality of life in America and expand employment.
Measures such as general and special revenue sharing, which send federally-collected tax dollars to the 50 states and tens of thousands of local government units in the hope that they will be used in the national interest, are a facade for replacing programs and under-funding public improvements. They represent an abdication of responsibility, not a means to promote efficiency in government.
Increasing efficiency and eliminating waste are laudable and appropriate goals. The nation's taxpayers are entitled to their money's worth. We know – and the Congress knows – that simply throwing money at problems will not make them disappear.
But we also don't buy the Administration's simplistic notion that the problems of taxpayer discontent and federal financial strain should be solved by: putting a halt to the enactment of new and necessary programs; under-funding those programs already on the books; refusing to spend funds already appropriated by the Congress for essential public investments in housing, education, environment, health, manpower training and job creation.
Mr. Chairman, the only way that America is going to solve both the government's revenue problems and the country's pressing social needs is to directly face both issues. Early enactment of a substantive tax reform program could add revenues sufficient to completely wipe out the anticipated deficit, add billions to the funds available to meet national priority needs, provide the underpinning for a healthy and balanced economic expansion, as well as preclude either an across-the-board tax increase or the slashing of vital social programs.
The so-called New Federalism is really nothing new. It is the thinly-disguised "old futilism" of the states righters with their rallying cry of "let the states do it." And that slogan means the same today as it meant 15 years ago: passing the buck to avoid federal responsibility for national problems.
We would not be here today – and, indeed, there would not be this controversy – if the states had "done it" or if the states could "do it." But they haven't, and they can't.
The broad problems of education, housing, environment, health, safety and manpower are really national in scope – too big for any state or local governmental unit to handle alone. Certainly, some states and some cities have tried their best, but they could not do what their neighbors would not do.
At this stage, when the country has identified the problems, begun to attack them and, indeed, made some progress, it makes no sense to turn the clock back.
America faces vast unmet public needs – from sewer, water and waste treatment systems to jobs, housing, urban mass transit, education, health-care, public safety, roads and recreation facilities.
Fulfillment of these needs requires the cooperation of all citizens and institutions. However, the nation's major domestic problems are still rooted in the shortages of services and facilities that are traditionally and appropriately the responsibility of government. Though much that is needed can and should be administered and financed at the state and local government level, it is the federal government – which represents all of the American people – that holds the key.
The most pressing domestic issues – such as unemployment, housing, crime, pollution and health care – are nationwide in scope and impact. They do not adhere to the lines drawn to bound America's 50 states and 80,000 local government units. They require national leadership, federal programs and federal financial support.
A federal effort to create jobs and the public investments needed to modernize and strengthen the underpinnings of American society began in the 1930s, only to be brought to a virtual standstill by the shortages of money, manpower and materials during World War II. Following the end of the war and through the 1950s, only slow progress was made, at a time when the population was growing rapidly and vast numbers of people were migrating from rural to urban areas and from the cities to the suburbs.
In the 1960s, the long-delayed federal response came through enactment of numerous programs, which provide funds for state and local governments to use in meeting specific national priority needs, under federal performance standards. These programs created needed jobs and began to reduce the shortages in many public facilities and services.
Federal grants-in-aid for such programs as elementary and secondary school education, urban renewal, health care and housing underwent a more than fourfold increase in the past decade – rising from $10.1 billion in 1964 to an estimated $45 billion in fiscal year 1973, an average annual increase of 18%.
This long overdue and badly needed expansion in national programs and federal funds aroused unrealistic expectations of quick and easy solutions to problems that had been amassing for decades. In the late 1960s and early 1970s, high interest rates, inflation, recession and lack of full-funding hampered the ability of state and local governments to finance their share of public investment – further increasing the gap between expectations and what could realistically be achieved.
In the last four years, Presidential vetoes have attempted to prevent enactment of new and essential programs. Many programs already on the books have been shortchanged.
In addition, the Administration has impounded $14.7 billion that Congress appropriated for such vital programs as housing for low- and middle-income families, communities facilities, water and sewer projects, highway construction and the Appalachian Regional Commission.
Now, according to the policy set forth in the federal budget for fiscal year 1974 the growth in federal aid to the states and localities for such vital programs will come to a halt.
For the year ending June 30, 1973, the Administration proposes to reduce or terminate programs in the amount of $6.5 billion – for fiscal year 1974, the total will be $17 billion. The budget plan is for program terminations and reductions, which over the next five years, would result in a cumulative total of over $100 billion.
If the Congress were to be so short-sighted as to adopt these proposals, many vital job-creating, public investment programs would be totally dismantled and others hamstrung. Many would simply disappear through general and so-called "special" revenue sharing consolidations which obscure the national purpose, limit the power of Congress to monitor or control the programs and make federal performance standards, civil rights guarantees and labor standards difficult to enforce.
Among the numerous proposals to underfund, cut back or terminate federal programs are the following:
COMMUNITY DEVELOPMENT AND HOUSING
The proposed budget slashes in this vital area are the deepest. In effect, they would represent an end to a direct federal government role in revitalizing the nation's cities and increasing the availability of housing for low- and moderate-income Americans.
Seven programs geared to providing direct aid to the cities to improve the quality of urban living are to be completely eliminated. Major casualties in this list include urban renewal and the model cities program. In addition, programs to provide low-income families an opportunity to attain decent rental housing or to own their own homes will be terminated.
These cuts will also result in substantial job losses – in on-site construction, as well as in the production and distribution of steel, lumber, glass, cement and other building materials.
But, Mr. Chairman, what disturbs us most about these cuts is the atmosphere in which they were undertaken. Anyone who seriously believes that the hour of crisis for America's urban areas has passed is living in a dream world. The rot of the cities is spreading into suburban areas, and saying things are all right doesn't make them any better.
There has been waste, inefficiency and corruption in the government and in the Department of Housing and Urban Development during the past four years. But the Administration would deal with this problem by penalizing the victims of this waste and inefficiency; by penalizing those who look to the government as the landlord of last resort.
By penalizing the victims – those who need public housing and those communities that need low- and middle-income housing to replace ghetto slums – is the classic case of forcing the victim to pay the cost of the crime.
In effect, the Administration is saying to the governors and the mayors: "You're not going to lose by special revenue sharing. You'll get as much as you're getting now and you will be able to do what you want with the money."
The fact is, Mr. Chairman, the states and cities probably are not going to get as much. But, most important, we object to the notion that state and local governments will be able to spend it any way they want.
Quite properly, in our mind, the Congress sets the standards by which state and local governments can spend federal money. It is right and proper that the Congress should eliminate the local options to take care of the rich and forget the poor; to take care of whites and not blacks; to make things easier for those who build housing and not those who live in it.
Mr. Chairman, waste, inefficiency and corruption should be eliminated. But we fail to see how the abandonment of proper federal standards for use of federal funds contributes one iota to achieving that goal.
EDUCATION
Behind its vaguely-formulated program of special revenue sharing, the Administration is proposing the severe under-funding or elimination of programs which serve to improve the quality of education in America and to eliminate the great differences that exist in educational opportunity.
The prime target is the elimination of some 30 federal programs that provide aid to school districts for elementary and secondary education. Federal aid to school districts unduly burdened by federal government installations would also be abandoned.
Laws such as the Elementary and Secondary Education Act, the Vocational Education Act, Federal Impact aid, the Higher Education Act and the Library Services and Construction Act constitute some of the most important legislative achievements of the 1960s and they deserve a permanent place among the nation's laws. In most cases, these programs of categorical aid were enacted by Congress and to meet critical needs which had been largely ignored by state and local officials. By proposing to lump the categorical aid programs into a single blank check, the Administration would invite state and local officials to return to past practices of allocating funds on the basis of political power and whim rather than demonstrable need.
Title I of the Elementary and Secondary Education Act provides desperately needed compensatory funds for economically disadvantaged children. The Administration would abandon that effort.
Title III provides funds needed to develop innovative teaching materials and methods of learning. The Administration would drop this valuable program. The Vocational Education Act provides a workable mechanism for providing young people with the skills realistically needed in modern society. The Administration proposes to repeal the Act outright.
Undoubtedly many of these programs can and should be improved, but improvement is quite different from dismantlement. The problem, in many instances, has been that money was misspent by local officials who used it contrary to the intent of Congress. By loosening the controls, the Administration would aggravate the problem rather than contribute to its solution.
The AFL-CIO gave vigorous support to these laws when they were being considered by the Congress. Today we reaffirm that support. We will not abandon them.
Organized labor has consistently pressed for more federal funding for the schools. That is why we reject completely any Administration proposal for special educational revenue sharing. Such proposals would provide no additional funds for the schools, but would only divert funds from existing programs which Congress carefully designed to meet demonstrated needs. And, in the process, the Administration would repeal many of the most progressive laws enacted in the Twentieth Century.
The AFL-CIO therefore supports the five-year extension of the Elementary and Secondary Education Act and full funding at Congressionally authorized levels of the Act and of other federal educational programs. We will not abandon the educational programs we fought so long to achieve.
MANPOWER
The Public Service Employment Program (PEP), established by the landmark Emergency Employment Act of 1971, would be scrapped. This program represents, in effect, the only significant direct job-creation effort by the federal government. In its short two-year life span, about 150,000 jobs were created in 17,500 state and local government agencies.
The Administration, according to the budget, would decentralize the Job Corps program and severely cut back its funds. These funds are used to provide education, training and counselling for out-of-school youths who cannot find jobs.
Under the new concept of so-called special revenue sharing, the entire federal manpower training effort will be seriously endangered. At stake are several programs which help workers upgrade their skills and focus on the specific job needs of minority group youths and the elderly.
The federal government's role in planning and operating on-the-job and classroom training programs, funded under the Manpower Development and Training Act, would, in effect, be ended by the special revenue sharing proposal. The Neighborhood Youth Corps, which helps open opportunities for part-time jobs so that low-income youths can complete their education, would no longer be a federal responsibility.
The only increase in the manpower budget, of any consequence, is for the Work Incentive Program (WIN), which attempts direct job placement of welfare recipients. Since protective standards in this program are weak, welfare recipients can be placed in marginal, substandard jobs.
The Administration would also abolish the Economic Development Administration – the national economic development program, which has created jobs and public improvements in many areas that suffer from persistently high unemployment and lagging economic growth. The development program for the economically blighted Appalachian region would be cut back.
The Office of Economic Opportunity would also be abolished. The OEO and its Community Action agencies created jobs and provided a mechanism for many of the nation's poor to enter the economic mainstream.
HEALTH
The budget for fiscal year 1974 would eliminate 10 of the nation's 60 health programs. The Hill-Burton hospital and health facilities construction program would be terminated, on the false premise that the nation has more hospital beds than are needed.
Ignored is the fact that a surplus of beds in one community cannot help those in need of hospital care in another community. Moreover, in recent years Hill-Burton funds have been used primarily to modernize obsolete hospitals and to build out-patient public health centers and nursing homes. Since 1947, when the program started, 470,000 hospital beds have been provided. In the past five years, 91 percent of the funds have been used for modernization, only 9 percent for new facilities. The need for some new facilities is clear; the need for modernization is overwhelming.
The regional medical program, which coordinates efforts to treat diseases such as heart and cancer, would be eliminated and maternal and child health and family planning programs would be phased out.
A prime example of the false economy reflected in this budget is the proposed changes in Medicare. The Administration says Medicare recipients should be more "cost conscious" and that requiring them to pay more of their medical bills will reduce incidence of unnecessary hospitalization and treatment.
As we have pointed out in the past to other committees, this approach is unsound. Rather than seek treatment at an early stage when it is less costly, high deductibles encourage people to wait until illnesses become more severe and more costly to treat. Anyway, it is the doctor, not the patient, who determines if a person is to be hospitalized and for how long.
Increased social security payments, which the last Congress fought so hard to obtain, would be wiped out for those who need hospital care if these proposed Medicare changes are enacted.
ENVIRONMENT
Some of the widest gaps between Congressional intent and what the Administration plans to spend are to be found in programs enacted by the Congress to protect America's environment.
For example, approximately $10.1 billion to be allotted to the states for the construction of waste treatment plants have been made available by the Congress for expenditure in the fiscal years 1973 and 1974; yet the Administration plans to spend only half of that amount.
Match the Administration's proposals with the rhetoric of its February 15, 1973 message to the Congress on environment:
"Because there are no local or state boundaries to the problems of our environment, the federal government must play an active, positive role. We can and will set standards. We can and will exercise leadership. And we will provide encouragement and incentives for others to help with the job."
There are many other examples of the abandonment of federal responsibility that we could bring to the attention of this committee, but, for the sake of brevity, we will mention only two of grave concern to workers.
The AFL-CIO and two of its affiliates had to go to court to block the abandonment of the Occupational Safety and Health enforcement program to the states. While we are pleased that Secretary Brennan has rescinded the order we went to court to block, this incident exemplifies the vigilance necessary to protect hard-won legislative gains.
More than 3½ years ago, the President, in his Unemployment Insurance Message to Congress, urged the states to establish a state maximum weekly benefit of two-thirds of the average weekly wage in the state. He called upon the states to act within two years to avert the need for federal action. But, with a handful of exceptions, the Administration request to the states to raise benefits to a decent level has been shamefully ignored. And the President has yet to ask for the federal action he threatened.
CONCLUSION
In conclusion, Mr. Chairman, we recognize that the rapid growth, during the 1960's, in the number of federal programs to help meet the nation's public investment needs inevitably created some administrative inefficiencies and overlapping grants. However, this situation does not justify a dismantling of essential programs or an abdication of the federal government's key role in the development, financing and guiding of public investments that are essential to the nation's well-being.
The AFL-CIO has long advocated simplification of the large number of federal grants which requires consolidation of many overlapping grants, without undermining their purpose, goals and standards. Proposals to dismantle the system of federal grants-in-aid to the states and local governments for specific high-priority programs should be rejected – as should proposals to supplant the expansion of such programs with underfunded revenue-sharing measures that lack clearly specified program purposes and federal standards.
Mr. Chairman, the Administration's proposals would substitute concern for the corporate ledger sheet for the helping hand of government to people in need. These proposals constitute major surgery to remove compassion and heart from government along with the cancer of waste.
It is a blatant attempt to reorder national priorities in reverse. And we want no part of it.
The system of categorical grants to meet specific problems gave a voice to many Americans who had long been deprived of a voice because they are weak. It gave national priority to their problems and hope to their everyday lives.
Mr. Chairman, who speaks for those too weak to speak for themselves? The answer must be the Congress.
We implore the Congress not to turn a deaf ear to the pleas of those who ask only for hope from their government – those who seek nothing more than a government that is as responsive to their needs as it is to the strong and the comfortable.
The strength of a chain is in its weakest link. The strength of a country is in what it does for the weakest of its citizens. We agree with Franklin Roosevelt when he said in his second inaugural address: "The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little."
Mr. Chairman, we want America, to be strong and compassionate and full of hope for all its people. And only the Congress can assure that kind of America.
STATEMENT OF THE HONORABLE SARGENT SHRIVER, BEFORE THE SENATE SUBCOMMITTEE ON INTERGOVERNMENTAL RELATIONS
I am sorry to be here.
I believe it is a sad day for America when some of the most promising and compassionate initiatives of our time are threatened with destruction.
I would have come sooner, and I am grateful to Senator Muskie for inviting me to be among the early witnesses at these hearings. But I did not want to come charging out as a protector of my own handiwork. First, I wanted to hear the reaction of public officials who have lived with the social legislation of the 1960s – Governors like Jimmy Carter and Mayors like Joe Alioto. I also wanted to think about what I could add to what others could say. Walter Heller is more expert on the economics of the Administration's cutbacks; Moon Landrieu is more expert on their impact in the cities.
What I think I can contribute is my experience with the War on Poverty, which has become a favorite whipping boy of the White House. It is cited constantly as an example of government failure and a cause for cutbacks. I think it is now time for a reply.
From the beginning, I hoped to see the Poverty Program ended – but only after the program ended poverty. Instead, while the Administration proclaims peace with honor in a war in Vietnam that was wrong, it prepares defeat with dishonor in a war on poverty that is right. And how ironic it is that our leaders are now so willing to aid a country that was our enemy until a month ago, but so unwilling to lift the burden of deprivation from our own citizens.
The Poverty Program has not been perfect. There have been mistakes and misdirections. But the Office of Economic Opportunity has seen far fewer scandals than the Committee to Re-Elect the President; it has been far more efficient than the Lockheed Corporation; it has brought far more success at a lower cost than our $25 billion investment in a collection of moon rocks. So, I do not apologize for the war on poverty; I ask that we fight on until we win. For if there ever was a war in which there should be no substitute for victory, the war against poverty is it.
That victory will not be easy but it is not beyond our financial reach. Those who want to accept poverty and those who want to abolish it cannot be divided into budget balancers and budget breakers. All of us want to hold the line on the Federal deficit; indeed, the Congress has cut Executive spending requests by $30 billion in the last four years. The big spenders in Washington since 1969 have not been "on the Hill". The waste, the excesses, and the deficits have been Executive Department accomplishments. If Congress had not restrained the President, our country's financial condition would be even worse than it is.
And the real issue now is how we should spend what we have, and how we can raise what we need. Within a budget ceiling even lower than the President's, the Congress can find additional resources to combat poverty by cutting wasteful spending on defense. And without increasing taxes on most Americans, we can raise additional revenues from the few Americans and the many corporations who are not now paying their fair share.
So the choice is not between inflation and fighting poverty. We can have both a realistic budget and responsible priorities. We can save the $1.75 billion the Administration intends to spend on the Trident submarine next year – which is almost what a year of OEO costs at its height. We can raise $15 billion a year with the Muskie tax reform bill – which is more than OEO has cost in ten years. The true choice is between waste and special favors for some, and justice for all.
But the fact that we can afford to act does not mean that every action is right. Of each program and proposal, we must also ask: Will it work? I asked myself that question over and over during my time at OEO. And I have asked it again during this time when OEO stands at the edge of extinction.
To give a fair and sensible answer we must do these things:
We must set the record of the Poverty Program straight.
We must set the rhetoric of poverty straight.
And we must set the problem of poverty straight.
First, let's set the record straight.
This is not easy – for the Administration is not only trying to distort that record, but destroy it.
We now know that the Acting Director of OEO has suppressed a report demonstrating that Community Action Agencies across the country have raised $1.3 billion for the poor, more than half of it from outside the Federal Government. Apparently, such success must be hidden because it does not accord with the official line that CAP has been a failure.
And just last week, in preparing for this testimony, I learned how far the Administration is willing to go. I asked to see a 1967 film in which the Reverend Billy Graham praised the war on poverty. The current regime at OEO replied that all 150 copies had been discarded; I suppose the only surprise was that they did not put it in a shredder. Fortunately, I managed to locate elsewhere a print that somehow survived. Is the White House so afraid to let the American people know that Dr. Graham has said: "We have a moral and spiritual responsibility to help those who really are in need ... It takes the action of government and that is one reason why I have supported the idea of the poverty program."
Why was Dr. Graham supporting an inefficient, ineffective program that was a haven for hordes of shiftless bureaucrats? Because that was not what OEO was or is, except in the propaganda and press releases of this Administration.
The war on poverty was declared shortly after men in power learned a grim truth powerless Americans had lived with for years – there was deep and widespread deprivation in every part of the nation and among a fifth of our whole population. President Kennedy read "The Other America" and many other books analyzing and revealing the extent of poverty in our affluent society, and he commissioned Walter Heller & Kermit Gordon to research the problem and propose some solutions for his consideration. After his tragic death, President Johnson determined to pursue the initiative President Kennedy had started. He called for an all-out war against poverty in his first State of the Union message and he asked me to direct the Task Force that was assigned to develop the program.
Nobody on that task force started off with the preconception that the only solution to poverty was to give away hard-earned taxpayers' money to the poor. Instead we chose to open opportunities to them – not just the provision of help from the government, but a chance for self-help. We recognized that income maintenance was important; but in the early stages, with a budgetary limitation of $500 million, we emphasized income earning.
And nobody on the Task Force thought that the Federal government had to be the only force in this new war. Instead, what we developed was a partnership against poverty, a joint effort by Washington, public groups at the local level, and private enterprise of every size.
It is a fact – not merely a statement of hope or belief – that in the operation of OEO we made giant advances in the use of the private sector and the involvement of state and local government.
President Nixon may talk about the big Federal bureaucracies that grew "fat" on poverty; but the fact is that we had the fewest bureaucrats per billions of dollars spent of any Federal program in history – except for Social Security which, after all, is primarily a check-writing operation. Of course, we needed a central command for a war on poverty, and we had regional offices with Federal employees. But the forces waging this war were local school boards and YMCA groups and private businesses, labor unions and local governments, state organizations and the poor themselves.
For example, the Community Action Program was run and staffed by the poor. It introduced them to the world of work and opened to them a chance for a career. Last year, in New York City, 6000 of them, employed in 26 community corporations and their delegate agencies, brought help to 843,000 deprived citizens in the areas of housing, health, education and drug addiction.
We also called on corporations to lend a hand – and they responded enthusiastically.
When we first suggested contracting our Job Corps centers out to private industry, we were criticized, even laughed at. But we did persuade Westinghouse and Litton, General Electric and I.T.T. to take on that responsibility as well as trade unions and fraternities like Alpha Kappa Alpha. And the State of Texas helped create a special organization to run a large Job Corps Center when John Connolly was Governor.
Overall, we sought to enlist, and we did enlist, literally thousands of private and local public bodies to initiate, operate, or evaluate the many programs that were developed by OEO. But we never abandoned basic Federal responsibility for the integrity and effectiveness of such programs. We developed an Office of Inspection that made people mad at times – but I was determined to see that those who agreed to participate in our OEO programs would adhere to the purposes of the program and carry them out honestly and effectively.
Let me illustrate all of this by recalling the first days of Head Start. It was not until January of 1965 that we decided to launch Head Start. We had received advice from the country's leading educators, child specialists, psychologists, and health experts. We thought we would try to enroll as many as 25,000 children during the first summer, even though many experts said we could not reach more than 5,000. I decided to risk $10,000,000 on the experiment. But as the demand grew – as tens of thousands of volunteers came forward – as the churches, schools, unions, and child care agencies offered their buildings and people and energy, we enlarged the budget again and again until Head Start had actually enrolled more than half a million boys and girls.
How did we manage that? Not by hiring ten thousand Federal civil servants. It happened because our appeal to the country was picked up by private citizens in over 2000 different communities. Each of these communities developed its own program based upon Federal guidelines, and by the end of that summer the 500,000 students had the benefit not only of pre-school classes, but of a complete health check-up, hot meals, and a feeling that people cared.
And in OEO, for the first time in our history, we created a body to assure regular, continuing liaison with the nation's public officials. To be sure that our programs were administered in accordance with the interests and the needs of our states and local communities, we brought together – with the co-operation of the several national organizations that operate in this field – representative governors, mayors, county officials, and city managers. They came from both political parties and independents, and they came from every part of the country. We not only preached co-operation with states and cities. We practiced it. And it paid off – not only in terms of better programs – but in terms of support. Thus, after a year of suspicion and even rejection of the concept of community action, the mayors across the nation became its ardent champions.
In short, OEO was not more of the same old Federal approach, but the first expression of a new federalism. We, in fact, called the poverty program "creative federalism" and Republican mayors, businessmen, civic leaders and others participated in our work. OEO put money and power in the hands of the people who had problems. It mobilized states and cities and private citizens and the private sector; it gave them the tools so they could do the work.
And OEO was both efficient and experimental. It was the first Federal agency outside the Defense Department to adopt Programming, Planning, and Budgeting Systems. And it was the only agency specifically charged with devising innovative solutions to the most difficult problems of poverty.
President Nixon said in 1969 that OEO has been at the "cutting edge" of our efforts to achieve "the goal of full economic opportunity for every American." He said OEO has been "one of the most creative and productive offices in the government". I share this earlier incarnation of the President's judgement. It is supported by a truly remarkable record of flexibility and creativity in the poverty program:
OEO was the first government agency to bring and win lawsuits charging that the national program of welfare assistance was based on rules and regulations which were illegal and sometimes unconstitutional because they arbitrarily denied benefits to millions of eligible recipients of the welfare system. Can you imagine HEW or any other established government department sponsoring such litigation against itself?
OEO was the first to reveal and prove that the poor want to work and that they do good work, provided they are given jobs where they can learn and show their skills. In other words, OEO proved that the poor are not lazy, shiftless free-loaders.
OEO sponsored what has been called "the most creative program of research and evaluation on basic policy issues affecting the poor ever undertaken in our nation's history." There are many examples of this OEO research, but among them are:
The New Jersey urban and rural experiments on income maintenance to test welfare and work incentives were the first of their kind in America.
Experiments in performance contracting and vouchers to determine if there are incentive systems for encouraging better education for the poor were also the first of their kind.
In Mississippi, a farm cooperative was sponsored to deal from the ground up with the causes of the most visible and pressing form of American poverty.
OEO was the first agency of the national government to recognize that the central health question of our times is a question of delivering health services to the people, especially to the poor. And based on this insight, OEO inaugurated the first nationwide system of neighborhood comprehensive health care centers, operated by prestigious medical schools but utilizing the poor themselves in para-medical jobs.
OEO was the first to inaugurate nationwide child development centers – the Head Start and Parent and Child Center programs.
OEO was the first to return power to the American Indians over their own education, over their own lands and their own laws.
OEO was the first to turn high-school dropouts into successful college students and in the process reveal the artificiality of many college admission procedures and standards.
These efforts were uniquely non-bureaucratic. They represented a commitment which could not have been made by the Executive bureaucracies. And at least initially, they represented the commitment of the President himself through his Executive Office to the elimination of poverty.
OEO was the voice of the poor and the conscience of the nation in the heart of the White House.
Yet now it is the White House which seeks to discredit and dismantle OEO and, directly or indirectly, to destroy some of our most promising programs against poverty. Administration officials say that it cannot be demonstrated that OEO had a measurable impact on the economic status of the deprived. And, of course, that is partially true – in the sense that social science simply lacks the tools to make the measurement. Moreover, we do know that the number of people in poverty declined by fourteen and a half million between 1960 and 1968 while the number has increased in 1970, 1971 and 1972. This Administration has the unique distinction of being the first to increase poverty in America since Herbert Hoover.
I am often asked: Why has the war against poverty not brought us within sight of a victory against poverty? My answer is: Not because we have been defeated, but because we have retreated. The problem with the poverty program is not a maximum feasible misunderstanding, but a minimum financial effort. Within two years of the program's start, the danger signals were already visible.
In 1966, OEO submitted a National Anti-Poverty Plan to the Bureau of the Budget. Today, I am making that plan available to this Committee and the public for the first time because it, more than anything else, explains why OEO has not achieved its ultimate goal. In a sense, this document could be described as the Pentagon Papers of the Poverty War. It reveals that the highest officials of the Poverty Program believed that "a real start on ending poverty in the United States" required increased expenditures of $21 billion in fiscal 1972 over the fiscal 1966 figure – which was less than the cost of one year of war in Vietnam. We warned the White House: "It cannot honestly be said that current funding levels have provided more than the necessary conditions for a beginning."
And so we proposed new and far-reaching initiatives in employment, individual improvement, community support, and basic poverty research. We proposed a negative income tax to be phased in over a ten-year period – "a basic income guarantee which would remove all Americans from poverty." This plan also included work incentives and opportunity programs to assure that those who could provide for themselves would do so.
In 1966, I was criticized for saying that we could eliminate poverty by 1976, the two hundredth year of our nation's life. I still believe that at the very least we could have come close. The National Anti-Poverty Plan gave us a way, but instead the best hopes of the poverty program became casualties of a foreign conflict more than ten thousand miles from our shore. We have never waged a war against poverty comparable to the wars we have waged against people.
There are those who blame OEO for alledgedly "shovelling money at problems." But the truth is that in America we have tried every solution for poverty except money. We had a structure and a strategy, but not enough support. The remarkable thing is not how little OEO has done, but how much it has done with the little it had.
Indeed, the achievements of OEO seem to have become a cause for its destruction rather than a reason for its preservation.
The Community Action Program has not only raised $1.3 billion on its own; it has also raised the political consciousness of deprived Americans. It has enabled them to organize in their own neighborhood and to secure their own rights and progress. Somehow, this Administration seems to think it is a sin because it bypasses elected local authorities. But local officials are an integral part of the program; and in every recent year the Conference of Mayors and League of Cities has voted in favor of CAP. That is not surprising. Across the nation, CAP agencies are the glue of the anti-poverty effort. They apply for the grants and administer the programs. Hard-pressed Mayors lack the money to replace CAP, but do not want to lose the programs or benefits it brings. Yet, in defiance of the will of the Congress and the wishes of the cities, the White House has set a June 30 execution date for Community Action.
The story is much the same with Legal Services. In the Administration's eyes, its success is its fault; it is seen as subversive because it has enabled the poor to enforce their rights through the judicial system. But what is really subversive of American liberty is the attempt to restrict the rights of the poor by keeping them ignorant and keeping them from the legal protections that have been won for them by Legal Services. No other government in history had the sense of justice to finance actions against itself in the name of justice. Can anyone imagine Brezhnev financing Solyhenitsyn's lawyer? Yet our Government has had the courage of its convictions – at least until now – and has put the cause of justice for the poor above the protection of petty tyrants in their offices. I cannot imagine how this government can plot a retreat from the principle that all citizens exist under law by planning to make legal services subservient to political authority.
Finally, the White House is completing the process of dismantling the Office of Economic Opportunity by dispersing its surviving elements to other agencies. The greatest strength of OEO was its unity – its ability to speak and fight for the poor in the highest councils of government.
Apparently, the Administration regards that as a weakness. It prefers to see the war on poverty fragmented to lower levels in vast Federal departments where it can be neglected because its access and authority are gone. But this will achieve precisely the opposite of what the Administration says it intends: it will beauracratize a program that has been remarkably free of stifling bureaucracy. No longer will the effort against poverty attract the kind of talent at the top levels that OEO once did; the best people simply will not work at the bottom level of government priorities and power.
The Administration claims that OEO has been a godsend, but only for overpaid bureaucrats. The truth is that, as I have noted before, its officials were few in number – and they were superior in quality. Most of them gave up secure and important positions to join the program. Let me name just a few of them:
Glenn Olds, who headed the task force on VISTA, came from the Presidency of Springfield College and is now the President of Kent State University.
Verne Alden came from the Presidency of Ohio University to lead the task force on the Job Corps; he is now President of the multibillion dollar Boston Company.
Otis Singletary, who was Director of the Job Corps, carne from the President's office at the University of Texas and is now President of the University of Kentucky.
Ted Berry, who ran Community Action, gave up a successful private law practice and is now Mayor of Cincinnati.
Clinton Bamberger who left law practice to be the first director of Legal Services is now Dean of Catholic University's School of Law.
Dr. Julius Richmond left the Deanship of Syracuse Medical School to direct Head Start; he is now Professor of Child Psychiatry at Harvard University.
Dr. Joseph Kershaw resigned as Provost of Williams College to inaugurate OEO's budgeting and evaluation office.
And the list could go on and on. It could include a Republican Attorney General of Pennsylvania who came to Washington to head up Legal Services in the Nixon Administration and quit in disgust when his efforts were subverted from on high. Does the Administration seriously believe that it can attract officials of this caliber to poverty programs that have been consigned to the bureaucratic maze.
Of course, this may be precisely what the White House wants. Since taking office, this Administration has taken a whole series of steps that have gravely weakened and undermined our efforts to end poverty. In 1969, for example, 59 Job Corps Centers were closed, turning 17,500 corpsman out on the streets. In 1970, VISTA Volunteers were subjected to harsh guidelines on their activities, and community action was restricted and cut back. Now the Administration says it wants to reorganize OEO. I suspect that what they really want is to reorganize poverty programs out of existence.
But the White House has another answer. They call it the "New Federalism," and they tell us that what Washington gives up, the new States and localities can pick up. But there is a vast distance between this rhetoric and the reality of Administration plans.
So let's set the rhetoric straight.
This year, the White House seeks to cut domestic programs by $10 billion, while the only replacement it offers is $6.9 billion in special revenue sharing. And while most grants-in-aid experience normal growth in each year, special revenue sharing will remain the same for five years. How are the states and cities supposed to make up the difference?
At the same time, the Federal programs have been cut back so abruptly that other levels of government have not had the time to replace them, even if they could. How is a county operating on a calendar year budget supposed to fund a CAP agency after federal financing lapses on June 30?
The Nixon Administration is playing a shell game with the country. On the one hand, it says that it is merely shifting responsibility to those who are closest to the people; it will give them the money and they can decide how to spend it. On the other hand, the President says that the recent round of budget cuts will "save $11 billion in this fiscal year, $19 billion next fiscal year, and $24 billion the year after."
What this means is that the states and localities will have to make up for Washington's neglect without a sufficient increase in revenue from Washington. This is not a new federalism; it is a new confederatism. Under the old confederatism of the Articles of Confederation, which was the nation's first and failing form of government, the states had the power, while the national authority was subordinate. Under the new confederatism, the states have responsibility, but not resources, while the federal government stands aside. How different this is from the creative federalism of OEO, which was a genuine partnership among federal, state and local governments and the people. In the 1960's, we asked Mayors and Governors what they thought should be done, and they participated in our policy-making on a regular, systematic basis. In the 1970's, the Nixon Administration is telling them to do what they cannot afford without any participation in the process of policy-making.
The true federalism holds that all the people of the United States are citizens of the United States, not just of the several states; and that they have a right to certain minimum standards in life no matter where they live. The new confederatism determines their fate according to their citizenship in specific states, rather than their common citizenship in the nation.
Now I am aware of the boasts that Federal domestic spending has increased substantially since 1969. But most of the increases – particularly in Social Security and Medicare – came automatically or against the will of the White House. So to those who tout the progress of this Administration, I say: Name one new Nixon program for the poor that is on the statute books today. There are none.
Indeed, this is the first Administration in our history that has started a term of office with a summons to selfishness. The wealthy can ask what they can do for themselves and do very well. It is not the rich, but the rest of the people, who need government the most.
That does not mean that only a few among us depend upon government. The cruelest myth of our times is that only the poor draw on the spirit of public generosity. The truth is that there are few self-made men, in this country or this Administration.
Most of us have been subsidized in our education, in our housing, in our transportation, in the conduct of our business. And even if we call this by another name, it is still the government, our government, helping us to succeed. Millions of middle-class Americans have purchased homes with federal loans at lower interest rates than they would have paid in the free market – and that, too, is welfare. And we even give money to the inefficient and the ineffective – in the boardrooms of Lockheed and the Penn Central. It ill becomes those who live in glass houses built with Federal subsidies to cast stones at their fellow citizens who are poor and weak.
Yet perhaps what is right matters to some of leaders less than what will win. Perhaps, like the dictator who once asked: "How many divisions does the Pope have?", they are asking only: "How many votes do the poor have?"
I hope this is not so, for there is a decent and different path. It is the path back to the promise of America – that each may walk in freedom and pride, earning his way in dignity if he can, and living in decency if he cannot.
So let's set the problem of poverty straight.
Twenty million Americans are still poor. In fact, poverty in 1973 is even more intractable and difficult than it was in 1964. In the past decade, millions of the more productive poor have been able to escape poverty by finding work in a growing economy. But the remaining poor – the 1973 poor – are people who have been passed over by prosperity, passed by in social programs, and pushed back into poverty by higher unemployment. They tend to be less able to cope for themselves and less endowed with education and marketable skills. They are the hard core poor – and if we abandon them, they are helpless.
For the hard core poverty of 1973 is predominantly composed of families with only one parent and of workers with disabilities, health impairments, and a history of failure in the labor market.
What jobs they can find seem designed only to foster a sense of hopelessness. There is little or no training. The work is performed under bad conditions; it is often temporary or seasonal in nature; and there are few if any chances to advance up a job ladder or to be promoted. As a consequence, the labor market attachment of today's poor tends to be weaker; job changes are high; and long periods of idleness are common, especially among younger workers.
The hard core poor also confront an educational system which by and large falls to lift their sights and develop their ability to compete successfully. Moreover, as state after state is now learning, the way by which we finance education makes the wealth of a local district the prime determinant of educational quality. Since poor families live in poor districts, those who need education the most receive quality education the least.
Once again, the list of problems could go on and on, but this much should be enough to remind us that the crisis is not over; the job is not done. And it is not just a matter of implementing known solutions; in many cases, we are not certain of what the solutions are. An immense amount of testing and experimenting with new ideas is before us.
As I have noted, such innovation has been a major task of OEO. Obviously, I believe it and OEO should continue, but I am afraid we may be too late. The Congress cannot move with the speed of a President who can exercise one man rule. But we can give innovation even more importance and priority, in a new non-political agency, independent of the established bureaucracies, free to be creative, and unafraid to explore and explain every cause and solution of poverty.
The Congress can create a National Institute of Poverty with its Director and policy-making council appointed by the President, with the advice and consent of the Senate. The Institute would conduct research projects in areas of primary concern – for example, policies to improve the functioning of the labor market for low skill workers including public employment; and policies of income supplementation, including wage and earnings subsidies, cash transfers, and in-kind programs such as food stamps, public housing, and health.
The Institute would also be charged with implementing the promising findings of this research – including the wisdom and advice of the poor and the young – into nationwide innovative efforts.
When these programs prove their worth, perhaps after two or three years, they can be transferred to operating agencies, with Congressional approval, to replace programs which do not work as well – a rather different strategy than the President's practice of declaring failures and abolishing programs that Congress did not even know were in trouble. The frontier battles in the war on poverty must be waged by a single, visible, adventurous agency, responsive to local needs and responsible to Congress as well as to the White House.
But even if this proposal could not pass, and because, even if it did, the President could refuse the necessary minimum co-operation to establish and maintain a National Institute of Poverty, Congress should take two other steps, which have a general application to federal budgetary policy, as well as specific application to poverty policy.
First, the Congress should establish a Congressional Office of Research and Development.
No other major decision-making institution in our society operates without a research and development component. The Legislative Branch should have such a component, working on a day to day basis to develop new ideas and to test concepts and proposals that may be ignored, slighted, or suppressed in the Executive Branch. The initiatives taken on Capitol Hill should not depend on the decisions and priorities of Departments under Presidential control. If Congress is to take its own decisions and set its own priorities responsibly, it must examine thoroughly the entire range of options, and that requires a Congressional Research Development Office. Such an office, for example, could conduct the projects that I have outlined for the National Institute of Poverty – if there is no such Institute, or if it is prevented from achieving its purposes or perverted from them.
But Congress needs more than ideas and the capacity to test them; it needs as well the ability to implement them.
Secondly, Congress should reorganize the Office of General Accounting into the Office of General Accounting, Management, and Budget.
Today, the GAO does an outstanding job of monitoring federal expenditures – after the fact. An expanded GAO, with new purposes and powers, could provide the Congress with expert assistance in planning federal expenditures – before they are passed. As we have heard often in recent months, Congress has the authority to act; what it lacks is the means. An Office of General Accounting, Management, and Budget could give it the means – alternative budgets based on alternative estimates of needs, costs and revenues.
Planning and passing an alternative budget would be harder than reviewing a Presidential budget; just as creating a new anti-poverty program would be harder than destroying the old one; it takes no architect to tear down a house. But, somehow, in some way, the focus of national policy must be shifted from what should be abolished to what should be done. The national agenda must be restated, debated, and fulfilled. President Nixon seems to say: "If a solution does not work, let us forget the problem." We must return to the tradition of Franklin Roosevelt – and if a solution falls short, let us improve it.
We must make a fundamental choice in this country.
We can choose to abandon the weak to their poverty, driving them and those who care for them into the streets in protest or even riot, dividing our people each from each by suspicion and fear – all in the name of a false efficiency and a fraudulent economy.
Or we can see the truth and seek justice. We can see that our country cannot take more years of confrontation and keep freedom for all the years of our lives. We can seek, not repression, but liberation for all our people – a liberation of the mind from the prejudice of race and class, a liberation of the body from the pain of poverty.
The clearest moral test of our society is how we treat the poorest among us. Here in the Congress, that test must now be met. In your hands rests the final success or failure of the work we set ourselves in the 1960s. I have come here today with the hope that while others are quitting perhaps the noblest task Americans have taken up in our time, you will stay on the job.