President Tom Moody, thank you for that introduction. My good friend, soon to be president, John Rousakis, Vice President Jessie Rattley, President Bill McNichols, a great help to me and all of you, I'm sure, Alan Beals, Governor Teasdale, Senator Eagleton, Senator Hatch, Senator lake Garn—former mayor of Salt Lake City, and who would have been, perhaps almost surely, president of this organization had he not been elected to the U.S. Senate-members of the board, members of the National League of Cities:
I spent this last weekend at Camp David with 30 relatives, and I'm very grateful to escape— [laughter] —and to come and join you in a wonderful city. I received the congratulations and interest of my own family. Amy said that when I got to St. Louis, I would find not only a beautiful city but one of the finest zoos in the world. My brother, Billy, pointed out there's one of the largest breweries in the world here. [Laughter] I had other comments from different members of my family.
So, I want to thank you for inviting me. It's very good to see so many old friends and to come in this delightful community to share with you my thoughts about American cities.
But in a discussion of where we have been, where we are, and what we must do to conserve the greatness of our cities, we must also deal with our number one economic problem, and that is inflation.
I admired the strength and the viability of our cities when I was a boy growing up in southwest Georgia. I first experienced it as a child when I went from Archery to Plains and then a little later to our county seat of Americus and eventually to the metropolis of Atlanta.
After I was elected President I began to realize more vividly the problems of our cities. Shortly after the election two men knocked on my door; I went outside. It was Mayor Abraham Beame and Governor Carey. I asked them what they needed. They said, "We need a loan guarantee of $1,650,000,000 and two bus tickets back to New York." [Laughter]
We have, I think, come a long way since then.
And I'm in a somewhat better position both to appreciate and to help the dynamic cities of our Nation since I have become President. I want you to help me, and me to help you, build and conserve cities that are bright, vital, filled with life, and filled with enterprise. That requires, as you know, a close cooperation between cities, counties, States, the Federal Government, private citizens, and our own free enterprise system. Essential to this partnership is a long-term commitment of efficient Federal aid to cities. This is how you and I have worked together already in the last 22 months.
After my election in 1976, I met with the board of the League of Cities. I learned then that your most urgent need was for a comprehensive local public works program. You asked for $3 1/2 billion. At my urging, the Congress added $4 billion to the local public works programs.
We've also nearly tripled the number of CETA jobs, and we have emphasized in every way permanent, private employment. We started the urban development action grant, the UDAG program. The result has been a net gain of more than 6 1/2 million new jobs since I was elected.
More important, our cooperation has resulted in the evolution of our Nation's first comprehensive urban policy—a goal of the National League of Cities for 21 years—a policy of action, not default, to enhance the quality of American cities. I've already initiated much of that program administratively. Following your advice, we made more than 100 changes to existing Federal programs, and I've issued four Executive orders to make these programs more effective.
My first order reversed the disturbing trend of moving Federal jobs and facilities out of cities into the suburbs. I directed the General Services Administration to make every effort to locate new Federal facilities and jobs in central cities. As an example, the Old Post Office Building here in St. Louis is being renovated for Federal offices under this program. Its first level, incidentally, will include restaurants and shops to help draw people downtown.
In talking to the mayor on the way in from the airport, we also discussed a vital UDAG program for this central city-$150 million, matching UDAG grants on roughly a 10-to-1 basis.
We need your help and your initiative to enhance the value of these policies and these programs.
Another Executive order directed a greater share of Federal purchases to bidders from high unemployment areas.
A third Executive order established an urban impact process for any major new Federal initiative. This was a direct result of the National League of Cities' long effort to dramatize the often unforeseen effects of new Federal programs in our cities.
The fourth order established an interagency coordinating committee to target, to package, and to coordinate Federal assistance to cities.
We also reordered the priorities of the Economic Development Administration. When I took office, only 15 percent of EDA funds went to cities. This year half, one-half of EDA funds will go to cities.
I directed the Federal Environmental Protection Agency to change the priorities of its multibillion-dollar waste treatment programs. The new emphasis will be to rehabilitate older systems in disrepair, instead of encouraging urban sprawl with new construction.
We also submitted to Congress 19 bills as the legislative program of our urban policy that you helped to evolve. It was a tough fight, still going on, but we've already won enactment of 13 of those bills. Of course, you deserve much of this credit.
We reauthorized the CETA program. There will be an estimated 660,000 jobs. We toughened requirements in CETA to eliminate fraud and abuse and to ensure that only genuinely disadvantaged workers get those jobs. And we added incentives for businesses which hire and train those same workers.
We passed a targeted employment tax credit for businesses which hire jobless young people. We also included in the tax code a credit for rehabilitation of older industrial and commercial buildings. These were the first major reforms of the tax code explicitly to help businesses and individuals stay in the cities and not move out.
The new surface transportation act, which Brock Adams is discussing with you more thoroughly at this convention, will now let us plan and build balanced transportation systems.
We worked to secure the New York City loan guarantee and initiated other measures that underscore my commitment to cities.
And we added a new emphasis throughout our urban programs to help rebuild the private economic base of our cities. I want to convince everyone that it is good business to invest in the cities.
I'm proud of these accomplishments- [applause] —I'm proud of these accomplishments, and you should be proud, too. I certainly couldn't have done it without you. The Congress has responded well. It's just a good beginning for a new and continuing partnership. I want you to know that my commitment to this partnership remains firm. Together, our progress will continue. I will not step back from this job as long as I hold office.
I'm also determined to alleviate another problem that now affects cities and every American more deeply than any other economic problem. That is inflation.
I don't need to tell you how inflation affects our cities. You can see it every' week on purchasing invoices, on utility bills, higher salaries, constantly increasing' budget costs of the same items. Inflation eats into maintenance and capital funds, and with restricted budgets your streets, buildings, and parks fall into greater disrepair. The same thing happens throughout our economy. Consumers put off needed purchases; businesses tend to postpone modernization; our factories age a few more years. For every year of this, we become much less productive.
In other words, inflation jeopardizes the economic progress we've made since the recession of 1974-1975, including the fragile recovery of our troubled cities. It means that Federal dollars sent to cities buy less. General revenue sharing, for example, has sent about $6.2 billion each year to States and cities since 1972. But by next year its purchasing power will have dropped one-third. Cities badly need these dollars. And the Federal Government cannot replace all such major losses to inflation.
Plainly, the future of our cities is at stake in our fight against inflation. And just as plainly, the people whom we serve, you and I, want something done. They will not accept Federal and local government indifference about inflation. I have no doubt that the American people want the Federal Government to act. They want greater efficiency, less waste, less corruption. They want restraints on Government spending and Government taxing. Those are demands that I cannot and will not disregard.
Last month I announced a tough program to fight inflation. I chose a course that is politically difficult, but I intend to hold to it.
The 1980 fiscal year budget will be very, very tight. I have pledged to submit a 1980 budget with a deficit of $30 billion or less. That is much less than one-half the deficit of fiscal year 1976, when I was running for office. It will not be an easy task, but I intend to do this without starving useful programs. I will not make wholesale, arbitrary spending cuts. We're simply going line by line, item by item through the budget to limit or to cut those things we cannot afford.
For the cities the impact will be clear. We will do as much as we can within the necessarily severe limits. We can and will propose new programs like the National Development Bank. We will take into account explosive growth in rapidly growing areas that bring about serious problems, as well as we take into account the problems of areas which are in distress.
But there will be little money for new initiatives next year. It will be an austere budget. However, I promise that the cities will bear no more and no less than a fair share of budget restraint.
My responsibility as President to the people of the United States is to demonstrate clearly, when the budget is presented to the Congress, that there is a sound and fair and equitable balance as we meet the needs of urban Americans and rural Americans, to provide for education, jobs, defense, domestic programs, and foreign or international programs. All will be examined very closely; all will be examined very closely. And I can assure you that the budget will be fair.
We will continue to streamline Federal aid to cities. When I ran for President, I pledged to make urban programs more efficient, more responsive, simpler, and more targeted, and to be evolved and administered in closer cooperation with you, the local officials of our country. I'm carrying out that pledge to the best of my ability.
I know from personal experience that Federal programs often cost State and local governments too much. And frankly, that is still true today. For example, for the small town of Junior, West Virginia, it took 7 years, ,$1.7 million, and five different Federal agencies to build a required sewer and treatment system.
I know that we can do better. And that's why my urban policy emphasizes less processing time, less overhead cost, less paperwork, and better coordination with you and with State officials. OSHA, for instance, has eliminated hundreds, even thousands, of unnecessary regulations. HEW is eliminating, simplifying, or consolidating about 60 percent of its nearly 1,400 planning requirements. EPA is doing the same with over half of its 300 planning requirements. We are doing that throughout the Government.
We need your continued help. You should point out specifically those planning requirements, those reporting requirements that you consider to be unnecessary, too complicated, or required too frequently.
We can also expect to benefit from our review of new Federal regulations for their cost impact. I'm going to use my power as President to stop cold any new regulation that ignores its impact on costs to cities and States. I urge you to contact Jack Watson on my staff directly, or me, if necessary, to point out where this commitment might tend to be violated. We will stop it immediately if you'll let us know.
But I also expect State government and you, the local government officials, to do your part. We've long known the inflationary impact of State or local regulations that restrict competition and raise costs.
Much of the inflation in housing, for example, comes from outmoded building codes. Productivity in building construction in the last 10 years has actually gone down, almost 2 percent each year. We will look to the cities and the counties to encourage local construction companies and unions to attack the problem of productivity directly, to reexamine the cost-inflating work practices and the possibility of adopting new technologies that will combat rising costs. We will look to the localities to attack directly high real estate transaction costs.
Similarly, the States and localities must attack other restraints on competition, both governmental and private. These include the use of licensing to restrict entry into occupations and eliminate competition, restrictions by private groups on advertising of prices by their members, insurance regulations that hold premium costs up, public utility rate structures that fail to encourage conservation and so promote the unnecessary installation of costly additional capacity.
In the next few weeks I will be calling on State and local officials and working closely with you, when necessary, to revise regulations of businesses to increase competition and reduce costs and to follow restrained, prudent tax and spending policies.
In this fight all sectors have a role. I've taken painful action at the Federal level already by reducing Federal spending, putting a cap on Federal employment, putting a cap on Federal salaries, vetoing popular legislation, and performing a tough cost analysis benefit of new regulations.
The most important things that cities can do to fight inflation is to make sure that all goods and services which you procure come only from suppliers who will certify that they are in compliance with Federal wage and price guidelines. The second is for cities themselves to abide by our wage and price standards in negotiating contracts and in setting your own fees. This will not only help hold down costs but set an example for private firms and others in your own localities. I call on you today to follow the guidelines in these two important areas. But these steps alone will not be enough.
Let me repeat what I said earlier: the 1980 budget will be very, very tight. It will disappoint those who do not take inflation seriously. It will disappoint those who expect protection from inflation while someone else bears the burden. It will disappoint those who think only of next year and not the next decade. And it will disappoint those who expect constantly expanding Federal aid and a constantly expanding number of Federal programs and agencies.
We must control inflation. We must bring it down. We must stop it from interfering with our lives, our aspirations, and our hopes for the future. That's why I need your understanding and your cooperation and your help to solve this problem once and for all.
If we fail to control inflation, we face a deeply troubled future. We would erode the commitment of the American public to helping cities, to helping the poor, to helping the elderly, the jobless, the sick, and the weak. That is a prospect we dare not face.
But as we are successful and bring down inflation, with a concerted effort, we can look back on these years with the satisfaction that we built a solid foundation that kept our country prosperous, compassionate, and strong. That will take an unprecedented effort by us all in the next few years. It will take imagination. It will require initiative, a close attention paid to local and unique circumstances. It will require sacrifice. And it will take the patience to realize that we cannot afford everything that we want now.
I believe strongly that we have the will to solve this problem of inflation in America. I believe strongly that the people are ready to make the necessary sacrifices, if only government provides the leadership and the example. I ask only that you help me in this task—that we as partners might end any drift and indecision and lead our cities and our country toward a brighter, more prosperous, and a more secure future. With your help, we will not fail.
Thank you very much.