Statement on Signing the Rural Development Act of 1972.

DURING the last year and one-half I have on three separate occasions sent to Congress proposals designed to marshal more effectively the energies of the private sector and of government at all levels in a cooperative program of rural development. The most important of those proposals are:

--Rural community development special revenue sharing to provide additional financial resources to State and local government without counterproductive Federal strings attached.

--The creation of a Department of Community Development to coordinate and focus all Federal programs for rural and urban community development.

--New loan authority for commercial, industrial, and community development under a credit-sharing system which would allow the States themselves to select most of the loan recipients. And strengthening certain of the Department of Agriculture's conservation and environmental programs.

The Rural Development Act of 1972 which has finally been enacted by the Congress--H.R. 12931-- incorporates some of the important provisions which I originally proposed:

--It authorizes new loans for commercial and industrial development in communities whose population is under 50,000, as well as for various local facilities in communities whose population is under 10,000. These new loans represent a major potential for increasing employment opportunities and modernizing our communities in rural areas.

--The new loans which it authorizes would be insured and guaranteed, rather than direct, Federal loans. This means that the private sector can play a major role in rural development and that the inflationary impact on the Federal budget will be reduced.

--It authorizes new cost-sharing provisions including those related to improving water quality and conserving natural resources which I proposed on February 1 of this year in my message to the Congress on rural development.

--And, it includes various improvements in the administrative machinery of the Farmers Home Administration which would facilitate more effective program administration.

The most disconcerting feature of this act is that it does not include one of my most important proposals for rural development, the substitution of special revenue sharing for categorical grants, and instead creates a number of new categorical grant programs. That means more decision making in Washington instead of decentralized decision making at the State and local level where the pressing needs actually exist. While this act is praiseworthy in providing additional Federal funds for community development, it unfortunately will also bring Federal decision makers into fields of community activity that were previously free from such outside involvement. In addition, this act-if fully funded--would add $400 to $500 million in expenditures to the Federal budget at a time when it has already been overloaded with large spending increases by the Congress this year.

In short, while I would have much preferred that this act contain the provisions which I proposed and reiterated last February, I believe that it probably represents the best compromise which could be enacted by this Congress. Even with the shortcomings I have noted in this act, it is a significant first step in our determination to strengthen economic opportunity and community life through rural America. I do strongly urge, however, that the Congress act quickly and affirmatively on my government reorganization and special revenue sharing proposals related to rural development. They hold substantially greater promise than this act does for community development in rural and urban areas. Because this act represents an important step--but only the first of several essential steps--I take pleasure in signing it today. But I look forward to early Congressional action on my other proposals which would provide our communities with the tools so desperately needed to attain this Nation's objective of balanced and beneficial growth.