White House Conference on Balanced National Growth and Economic Development Message to the Congress Transmitting a Report.
To the Congress of the United States:
In fulfillment of a requirement of P.L. 94-487, October 12, 1976, I am transmitting my report on the White House Conference on Balanced National Growth and Economic Development. For many weeks preceding the final Conference, there were State and regional Conferences organized like town meetings, giving citizens and elected officials an opportunity to exchange views on the critical Issues of growth and development. Held in Washington on January 29 through February 2, 1978, the Conference was attended by more than 700 individuals from all parts of the country.
An important outcome of the Conference was the general agreement among the delegates that no massive new Federal spending programs were needed. Instead, they called for more effective government, more balanced decisions, and a real partnership among levels of government and the private sector in meeting persistent social and economic problems. This theme has been an invaluable guide in helping shape the growth and development policies of my administration.
We are indebted to those who participated in the Conference. It could have been so controversial or so sterile that no useful purpose was served. Instead, it provided many constructive insights to help shape future growth and development policy in this country.
The White House,
January 19, 1979.
"SHARED RESPONSIBILITY FOR GROWTH AND DEVELOPMENT"
The President's Message to Congress on his Recommendations and Findings on the White House Conference on Balanced National Growth and Economic Development
The White House Conference on Balanced National Growth and Economic Development involved a broad spectrum of American society in considering and formulating national policy of fundamental concern to our people. At every level of government, such meetings are essential elements of the democratic process, assuring that elected officials remain in touch with those whom we represent.
A White House Conference concerning planning, growth, and economic development could have been either so controversial that its purposes were lost, or so sterile that its function came to no avail. Both extremes were successfully avoided. I commend the Congress, Secretaries Kreps, Harris and Bergland, Governor Rockefeller, members of the Advisory Committee and the 700 individuals and organizations who participated, and I congratulate the Governors who helped design the preparatory state and regional conferences.
As a participant who has already made innumerable decisions affecting balanced growth and economic development, I can say with conviction that this White House Conference has proven invaluable in shaping my Administration's policies. I am in substantial agreement with the philosophies expressed in the Conference reports, and note with satisfaction that the. Conference findings closely paralleled many of the major domestic policy initiatives underway or being planned by my Administration. I shall first describe the Conference findings, and then indicate how we have already acted and how we propose to act to implement the Conference recommendations.
II. CONFERENCE FINDINGS
Two overriding principles and growth policy directions arose simultaneously and independently among the Conference participants. They are:
• Effective national growth and development policies must be "balanced," addressing the issues of growth as well as decline, seeking the equitable distribution of economic opportunities among all people and places and capitalizing on local and regional advantages for our collective betterment.
• A "fair and flexible Federalism" is needed. The Federal Government must play a more sensitive role in the Federal system, setting national objectives while recognizing the special characteristics of particular geographic areas, and providing regions, states, and localities greater responsibility for deciding how to attain those objectives.
These principles reflect a significant change in the way America perceives the question of national economic growth. They mark a shift from a predominant concern with the economic health of the Nation as a whole to greater attention to the economic vitality of subnational units, be they regions, states, or localities. The Conference found the question of the distributional impacts of Federal policy to be of critical importance. The Conference urged improvements in the processes by which growth policy is developed. In exercising its responsibility for setting the general directions of such policies, the Federal Government should bring together and involve regions, states, localities and the private sector in a shared responsibility for planning and implementing them.
Consistent with these policy directions, the Conference identified four major issues around which their recommendations clustered. They are: Employment and Inflation: Governmental Effectiveness; Growth Policy Process; and Urban and Rural Policy.
EMPLOYMENT AND INFLATION
The Conference recognized both the necessity and the limitations of macro-economic policies. Controlling inflation and achieving full employment are national goals of paramount importance. The Conference urged Federal policies to assure a growing economy with an expanding employment base. Although unemployment problems are generally assumed to be the greatest concern of low-income and minority groups, the negative consequences of inflation on low-income families' budgets are also severe.
The Conference also served, however, to remind the Nation that, despite record growth in overall employment and a substantial drop in unemployment since January 1977, there are groups of Americans and places still experiencing Depression levels of joblessness. For these distressed peoples and places, carefully targeted remedies must be applied. The primary emphasis of employment and economic development programs should be on retaining and creating jobs where unemployed people live, although some relocation assistance may be needed for those who desire it.
The private sector must be at the core of any national effort to achieve full employment. Two major points of consensus were expressed:
• permanent, private sector jobs are more desirable than temporary, public service employment, and
• government incentives to business are needed to leverage private expansion of job opportunities for disadvantaged workers.
The Conference recognized that public monies must be used, not simply as expenditures, but as investments, linking Federal programs and local plans to stimulate private action.
The Conference participants expressed the view that there is need to take a fresh look at the present roles of the different levels of government to make them more effective and responsive. The "fair and flexible Federalism" proposed by the Conferees will require some reassignment of functions and responsibilities and reexamination of outmoded systems of revenue allocation injurious to distressed communities. The Conference urged the Federal Government to provide incentives to states to assume more responsibility for the problems of their local governments by modernizing local governmental structures and reforming inequitable revenue systems and state expenditure patterns.
The Conference recognized that uniformly applied national practices and rules ignore substantial regional differences. The Federal Government must begin to fine tune national policy and programs, taking into account substantial diversity among regions, states and localities, and encouraging through incentives more shared responsibility in the achievement of national objectives. Thus, a stronger role for states and localities in the design and management of Federally assisted programs and greater decentralization in their administration is needed. As former Massachusetts Governor Dukakis said: "We cannot leave to chance the role of state governments in the implementation of a national economic policy . . . Unless the states are involved, and involved deeply, it is doomed to failure."
In return for greater state involvement, the Conference recommended that state governments assume increased responsibility for local education costs, while the Federal Government assumes more responsibility for welfare costs.
The Conference recognized the need for greater coherence in policy-making at all levels of government. Henry Ford said, "We must know how each action affects another, and be willing to change or eliminate those that are counterproductive." The processes that shape energy, environmental, business, community, and economic growth policies in particular must be related to and support one another. The proper role of the Federal Government is to establish a coordinated policy framework to guide regional, state and local planning and decision-making, seeking insofar as possible to anticipate change so as to enable all levels of government as well as private interests to take timely actions.
Conferees asserted that growth policy processes should provide a systematic, consultative forum for the establishment of goals, the analysis of alternative policies and programs, and the reconciliation of conflicting laws, programs and regulations, thereby strengthening the capacity of elected officials to guide growth and development in beneficial ways. State and local governments should continue to have responsibility for planning, assuring participation of governmental and private interests, while responsibility for establishing policy processes, setting goals and reconciling differences should reside at the Federal, regional and state levels.
Many problems of growth and decline, the Conferees noted, are most effectively dealt with in a multi-state context. Effective regional institutions are required to attack problems that transcend state borders and which, if not sensitively handled, serve to exacerbate negative, unproductive sectionalism. The State-Federal Regional Commissions could provide a partnership means of achieving national objectives while respecting regional differences. These institutions should be strengthened to realize their full potential for helping shape Federal growth policies and development programs.
To exhibit "balance," the Conferees thought growth policies should reflect: • a concern with the problems of rural counties and small towns as well as with metropolitan jurisdictions;
• a recognition of the needs of rapidly growing as well as declining communities; and
• the opportunity to consider simultaneously environmental mandates and economic growth proposals.
Conferees felt that some Federal, State and local regulations and red tape have a dampening effect on economic growth and contribute to our inflation problem. Energy, industrial location, and transportation initiatives have been stalled or thwarted by a maze of procedures and litigation stemming from excessive regulation. The Conference urged that:
• regulations be simplified and coordinated;
• Federal, State and local regulations be periodically reviewed; and
•state and local governments and the private sector have larger roles in shaping Federal regulations.
National energy policy, according to the Conferees, is essential to a balanced growth policy. In order to curtail inflation and expand employment, the Nation needs dependable, affordable energy sources which reduce U.S. dependence on imported oil. Energy conservation and development should create new jobs to help meet our full employment goals.
URBAN AND RURAL, POLICIES
National urban and rural policies are also essential components of national growth policy, the Conferees said. The Conference favored selected targeting of Federal and State assistance to areas of greatest need, regardless of region, whether they be central cities or small cities, suburbs, rural counties or areas in decline or impacted by rapid and disorderly growth. Moreover, the Conference urged the resolution of State and local fiscal burdens through selective reassignment of responsibilities within the Federal system.
The Conference affirmed that Federal and State tax policy should help target private investment in distressed communities. Federal aid should, however, be premised on clear-cut national performance criteria concerning economic, fiscal, and employment objectives which reflect national commitments to equal opportunity, housing and jobs.
Finally, the Conference recognized the need for a balance between the national concern for large urban centers and counties, and for rural areas and small towns. It acknowledged that urban and rural development may require different tactics to address the diverse contexts in which similar problems may occur.
III. THE ADMINISTRATION'S INITIATIVES
Many of the recommendations made by the Conference have the same basis as the principles which have guided my Administration in setting new directions. The development of my domestic policy rests upon the recognition of the need for "shared responsibility" among all levels of government, and with the private sector, for the economic health and well-being of all people and places. The Conference came at an excellent time to help us think through the elements of our National Urban Policy, while it also helped launch a badly needed review of the performance of Federal programs in rural counties and small towns, largely in response to Conference recommendations, my Administration has taken the following steps toward a "fair and flexible Federalism."
INFLATION AND EMPLOYMENT
Overall, we have made dramatic gains in the past two years in expanding employment and reducing the number of jobless. In order to strengthen further the Nation's commitment to full employment while guarding against the crippling effects of high inflation I have signed into law the Humphrey-Hawkins Full Employment and Balanced Growth Act. By requiring the more systematic consideration of both concerns in developing national economic policies, it provides a framework for pursuing the more orderly and integrated growth policy process which the Conference endorsed.
The overall economic health of our Nation, however, is also founded on the economic well-being of its individual regions, communities, people and industries. This interdependence means that the distress of some people and places affects all of our people and places. Moreover, a non-inflationary national growth policy requires the efficient use of unemployed and underemployed workers and of underutilized private and community infrastructure. Federal action on the subnational economic development front, therefore, is an important, long neglected component of national economic policy concerned with stemming inflation, reducing unemployment and underemployment and increasing the productivity of our nation's industries.
In a break with past practice, the Federal Government is now deliberately and systematically pursuing "micro-economic" policies to help distressed places as well as people as an essential part of overall economic policy. This Administration has expanded and improved Federal community and economic development programs. We recognize that national development policies must link related development activities such as job creation and training, business assistance, housing and community improvements, human services, and transportation in unified state and locally planned programs. Pursuant to the Conference emphasis on private sector jobs, we have expanded the Comprehensive Employment and Training Act program, adding a new Private Sector Initiative which involves local, private sector councils in designing training and developing unsubsidized jobs. $400 million has been requested to support the new program. We have also developed with the Congress a targeted tax audit which provides a substantial tax incentive to employers to encourage them to hire poor young persons.
My Administration has also:
• Increased funding for HUD's Urban Development Action Grant and Commerce's Economic Development programs to leverage and target job-creating private investments.
• Launched the Air Quality Planning Grant program to help cities comply with the Clean Air Act without reducing needed private sector investments.
• Begun targeting $9 billion in Farmers Home Administration development funds, including over $1 billion in business and industry loans, on the most distressed rural communities and population groups.
• Established for the first time loans to farmers and ranchers for economic distress. This revolving fund of credit will strengthen the rural economy as well as the many segments of our national economy that benefit from a strong agricultural system.
• Develop a new Home Ownership Assistance Plan for very low-income rural residents, which will aid 16,000 families during 1979.
• Better targeted scores of existing programs toward urban and distressed rural areas.
My anti-inflation program includes the first systematic review of Federal regulations to reduce their cost and to eliminate those whose costs are not warranted by their effects. I urge state and local governments to join us periodically in reviewing such regulations as those affecting construction, environmental protection and energy production to speed decisions and reduce burdensome and inflationary costs.
Other elements of my anti-inflation program are:
• A restrained but fair budget.
• Review of existing and proposed regulations through the newly formed Regulatory Council which will develop for the first time a Regulatory Calendar that will present all the major regulations the government will issue in the forthcoming year. A Regulatory Analyses Review Group will review major regulations to insure they are as cost-beneficial as possible.
• Establishment of non-inflationary wage and price standards for both the public and private sectors. State and local governments are asked to comply with these standards.
• Review of health costs, State and local regulation costs, productivity within government, and the inflationary impact of Federal policies on State and local governments.
• Proposal of a program of real wage insurance by which workers who limit their raises to 7% would be eligible for a tax rebate if current prices rise by more than that amount, together with other anti-inflationary proposals such as hospital cost containment.
I am determined to make Federal programs fairer, better coordinated, more easily administered and capable of responding to regional, State and local growth strategies in a concerted fashion. Examples of Administration actions supporting Conference recommendations in this area include:
• Congressional passage of all six reorganization proposals I made last year, including civil service reform, which will help provide better incentives for productive work by Federal officials.
• An Executive Order establishing a White House led Interagency Coordinating Council. This is a new mechanism for resolving conflicts among agencies and community programs, providing a comprehensive Administration-wide response to coordinated State and local development strategies.
• The Assistant Secretaries' Working Group on Rural Development to work on major, long-standing rural problems, through links to the White House and the Interagency Coordinating Council.
• Coordination of project investment activities and joint applications among domestic departments. Commerce and HUD are working toward streamlined economic development planning requirements.
• Coordination of Federal programs to target on special rural problems. Some of the results to date are:
—EPA and Agriculture will give priority in existing loan and grant programs to rural towns to comply with the Safe Drinking Water Act.
—HEW and Agriculture have agreed that Agriculture will target a share of its community facilities loans to make possible the construction, renovation and equipping of some 300 rural primary health care clinics. The Department of Labor will support training to enable people to work in these clinics. In all, over 13.5 million previously medically underserved Americans in rural areas will now have greater access to care.
—EPA, EDA, HUD, and FmHA have adopted procedures for improving the coordination and delivery of rural water and sewer services, with emphasis on paperwork reduction (e.g., single applications, consolidated reporting and auditing requirements), simplified compliance requirements for the host of Federal laws applicable to water and sewer construction, joint agency training seminars and technical assistance materials, a common data base for needs assessments, and joint agency consultation with applicant communities to ensure that proposed facilities are affordable and suited to local needs. A companion agreement between DOL and EPA has resulted in the training of 1,750 workers in the water and wastewater treatment field to meet critical rural shortages in this rapidly expanding job market.
• Agreement between the Department of Transportation and the Environmental Protection Agency on a joint planning and funding process for air quality and transportation planning.
• Joint development and implementation of a public transportation assistance program in rural areas and small cities by the Federal Highway Administration and Urban Mass Transportation Administration.
• A "zero-based" review of Federal planning requirements governing receipt of Federal grants by State and local governments. This has produced:
—Demonstration programs in up to five States permitting a single integrated planning and budgeting process to substitute for HEW's multiple planning procedures.
—Annual program plans required by HUD are being replaced with triennial plans with annual updates.
—Approximately 165 of the more than 300 EPA planning requirements will be consolidated or simplified.
—State/EPA agreements will be negotiated to develop an integrated approach to solving water supply, solid waste, and water pollution control problems.
—Agreement between DOT and Farmers Home Administration to coordinate grants on Branch Line Railroad Investments.
The Conference urged a selected reassignment of fiscal responsibilities. I will soon propose welfare reform proposals which would increase Federal participation in public assistance and moderate the fiscal burden of hard pressed State and local governments. This program will offer jobs to those who need them and income support to families where adults are unable to engage in full-time work. The Administration recognizes the need for reform in the welfare system which is fairer to the recipient and is easier to administer at all levels of government.
This Administration will continue to help improve education, but calls on the States to do more to help meet the educational and other fiscal burdens that fall disproportionately on communities with inadequate tax bases.
The creation of more effective growth policy processes at all levels of government was among the forward-looking objectives of the late Senator Hubert H. Humphrey. Senator Humphrey co-sponsored the White House Conference legislation, and although he died before it occurred, the Conference strongly reflected his vision and concerns.
The Conference was correct in suggesting that growth policy processes at all levels of government should assist elected decision-makers and the private sector to:
• anticipate economically significant trends, such as sectoral shifts and the energy problems that have grown over the past decade;
• relate sometimes conflicting national objectives, such as regulatory and growth policies, to one another; and
• involve all levels of government and non-governmental interests in priority setting.
We have learned how important it is for business and labor, as well as the public sector, to understand how future industrial and employment changes will affect regions, states and major population centers. Furthermore, in the interest of a strong national economy and a healthier climate for investment, we must reduce to the extent possible the uncertainty and contradictory nature of public decisionmaking.
Elements that could be made part of a more coherent, forward-looking and systematic growth policy process exist now in the Federal Government. Coordinated use should be made, for example, of the policy planning processes affecting Federal energy, employment, regional, and urban and rural community responsibilities that exist in Federal statutes. To provide a basis for coordinated Federal policies, the Secretary of Commerce will oversee the development of a comprehensive information system, including a broad range of demographic and economic indicators of community conditions, along with the technological and trade data and forecasts necessary for State and regional decisionmaking.
Effective national growth policy processes require that regional, state and local growth policy processes be effective, too. Federal planning assistance programs have assisted State and local governments to develop workable systems for sensing public preferences on issues of growth and decline and translating these into longterm growth policies and development programs. In addition, however, Federal programs assisting development, direct Federal investments, and Federal regulatory actions must prove more sensitive to and support regional, state and local planning and investment policies. Therefore, I am directing the Chairman of the White House Interagency Coordinating Council and the Director of the Office of Management and Budget to work with the Departments and Agencies to accelerate progress toward this objective.
One model will be the Department of Agriculture's invitation to Governors to develop joint investment strategies with its agencies. This has resulted in a rural development cooperation agreement signed by the State of North Carolina and the Farmers Home Administration. Such opportunities will be offered to other states in the months ahead. These initiatives represent a kind of "contract federalism," providing a new predictability of Federal action and a new recognition of state circumstances.
The national energy policy I presented to Congress is another essential element in growth policy. The resulting landmark legislation will help conserve natural resources, encourage exploration for natural gas by phased deregulation, lead to reform of utility rates, and encourage the conversion to coal. I have also proposed a new five-year Energy Impact Assistance Program to increase the capability of State and local governments to manage rapid growth resulting from energy development.
URBAN AND RURAL POLICY
Last spring, this Administration framed the "New Partnership to Conserve America's Communities," the Nation's first comprehensive and unified urban policy. This partnership is being implemented through four new Executive Orders, more than 100 improvements in existing Federal programs, and 19 legislative proposals. The elements include:
• Targeted employment tax credits to encourage private sector businesses to hire unemployed youths from low-income households.
• Location of Federal facilities slated for metropolitan areas in inner cities in order to provide jobs and make those neighborhoods more attractive for redevelopment.
• Purchasing by Federal agencies of more goods and services from areas with high unemployment rates.
• Increased funding for HUD's housing rehabilitation program.
• Revisions in Commerce's Economic Development Administration programs to strengthen minority economic development and to target aid to economically distressed people and places in all regions of the country.
• Allocation of $15 million to neighborhood and voluntary organizations for housing and neighborhood revitalization projects.
• Funding joint transportation and economic development projects.
• A new system for analyzing major new legislative, budgetary or regulatory initiatives in terms of their potential adverse effect on communities, both rural and urban.
This Administration is actively reviewing rural development needs, focusing initially on four areas—health, housing, transportation, and water and sewer systems-identified by Conference participants as particularly significant.
The principles expressed in the Urban Policy have had beneficial effects on overall government operations. This initiative encouraged my Administration to undertake the rural policy review which, taken together, will comprise a balanced community policy.
The Administration expects to forward to Congress proposals for legislation which reflect the deliberations of the White House Conference. Moreover, the Administration is currently reviewing major Federal community and economic development programs, including the proper Federal organization to most effectively and efficiently develop the benefits of these programs. This effort is intended to address many of the concerns raised during the Conference—most notably the need for a balanced approach to development, streamlined government processes, and growth policy processes.
The legislation authorizing the Appalachian and Title V Regional Commissions expires next year. I am proposing new legislation which builds on the successful elements of the existing State-Federal programs, while providing the Commissions with new opportunities to shape Federal policies and programs to reflect regional differences. The principal elements of this new legislation are:
• The opportunity for all states to participate in multi-state Regional Commissions within boundaries delineated in consultation with the Governors according to minimal Federal guidelines.
• A broad definition of regional development including energy, export, and human and natural resources concerns.
• Incentives to improve the coordination of state and regional development programs.
In addition to the ongoing policy and administration responsibilities of the Department of Commerce for this program, I am expanding the role of the White House Interagency Coordinating Council to provide the Commissions with Administration-wide program and co. ordination support.
REAUTHORIZATION OF THE ECONOMIC DEVELOPMENT LEGISLATION
The future direction of the Commerce Department's economic development programs was among the primary concerns which led to the enactment of the legislation authorizing the White House Conference. The Public Works and Economic Development Act of 1965 as amended expires next year. The Administration intends to transmit recommendations to Congress concerning these important programs for building jobs and revenues in distressed communities.
The roots of this Conference lay in a series of state-organized growth policy processes that occurred over the past decade as well as in the pre-Conference meetings held by the Regional Commissions throughout the country. I commend the Governors and legislators concerned for providing excellent examples of how to make government truly sensitive to the needs and wishes of our people.
The challenge before us is to expand and systematize this process of shared responsibility among the regions, states and localities, involving private interests, and applying the results in framing national growth policies. The intergovernmental partnership must be one of shared concern and shared responsibility for reducing the disparities among people and places in our Nation. The message of the White House Conference was that subnational as well as national policies must address this need. The new urban, regional, and energy policies I have and will continue to propose, are important steps toward that objective.
There are few areas of potentially greater controversy than those that touch upon the varying economic opportunities of peoples and places. The White House Conference addressed those potentially divisive issues in a spirit of constructive accommodation. There was a willingness among those who labored in the workshops to take into account opposing views, framing reports which encourage those of us in elected office to approach these issues in a similar spirit. It is in that spirit that I forward to you my views on the Conference and my recommendations for action.
Jimmy Carter, White House Conference on Balanced National Growth and Economic Development Message to the Congress Transmitting a Report. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/249718