The Robert MacNeil Report; 19; New York City and C367 Bailout

our laws our senators senator arnstein this is robert mcneill in new york can you hear me yes i can their conversation first of all it will be a brief interview with you alone served between you and me and then the other guests on the program or senator jake garn of utah in washington high and mr friedman the deputy mayor and congressman pfizer were both here in new york a line and we will be doing little interviews with them and having conversation with you and don't worry about following any directions or just leave you in another the conversation away all tech lean lean years

it's bad the peak to peak weekend and i think it looked today as all the ford administration were tuning out for carefully orchestrated climb down on federal aid to new york city and washington the white house said the situation has changed press secretary ron nissen said the president was encouraged by the latest fiscal rescue plan drawn up by new york governors hugh carey nelson indicated that the president believed his tough stand and produce the stringent new measures are blind by the governor and all the names to carry convened a special session of the state legislature to approve the package

when he talked with county and municipal officials during the day the governor seemed encouraged but they have been able i think now to reach the understanding that earned the cooperation of high officials in our government what's going on upstairs today in for the hours that they will be to do all the things that are reasonable and indeed necessary and their estimate to see is if you're the kind of federal support mean the weekend the precise about that because i stand before you all can say that i have no commitment from the officials in washington as to what they may do i can only say that we're hard because they have taken very careful or steps to examine and reasserts the details iraq where they've asked us to reduce that plan to pledges and commitments what kind of opinions by enacting certain statutes that says the lord trying to stretch out of there

by enacted statutes that the us will close the gap the city revenues that are being proposed by the chief executive of that simply by looking as well at our state because we must be a position that the state budget in balance something darker in the spring as we do written almost borrowing to start a mistake for our local needs all these things are being expanded in the special session is gathered here at this time the governor's new plan to convince washington that new york can discipline itself is sparking a one year wage freeze on all state employees five hundred million dollars in new taxes including another one percent on the sales tax in new york city bringing it to nine percent balding city bonds coming you would be asked to wait longer city workers would have to contribute to their own pensions which are now free and the city pension funds would have to lend the city two hundred point five billion dollars this

provision for seasonal borrowing to cover delays and revenue collection it is that borrowing which could need the federal guarantees new york city is seeking manfred orenstein is the democratic minority leader in the state senate and he's now with us in albany where the special session of the legislature understand is just in recess to separate that's correct we recess for the night and probably will be meeting sometime early tomorrow afternoon what's actually happening has the package been agreed now between the two parties there no there is no agreement whatsoever that the governor met with us this afternoon for the first time an outline of what those discussions were with people in washington and then outline the details of a plan which are he fails what move washington and into an all specifically the president into a more positive direction was the only feel that senator or did you say that he had some

actual commitment from the president well and it's a very difficult to describe it i think you have to understand that this whole effort over the last thirty six months in so far as the city is concerned was on safari state agency problems there's been a very delicate effort of balancing many many pieces so the banks the unions the city government the state government the two parties appear and now oil with the federal piece and that this problem has gotten even more complicated thought the president took a very firm position several weeks ago that the congress is moving in another direction in a more positive direction i think the governor is trying to it's a hercules and task of moving all of these actors together so that it would be politically possible for the president to change his mind and to go along with a loan guarantee for the city of new york and consequently

what he is doing here and what he did the stunning last weekend is to say that only the president strongly that many of the conditions which he outlined in his address before the national press club could be met by the state in advance of the fort rather than subsequent and before that as the president and i can honestly say that is that that's the scenario are targeted nor are we what is the point of the governor i understand he's going to washington tomorrow why sea going back before the package has been agreed by the two parties and all that well again i think he has made some judgments as to what might be possible or what might not be possible after talking to the leaders and it is obviously conveying his judgment as to what might be possible up in albany to the people in washington because i think he realizes but in order to pass the kind of comprehensive and very difficult legislative package is proposing here he must bring back

to albany and more positive signal from washington i say and could you just one leon talley what is the two stumbling block on getting agreement on that package in albany well i would say the j sun when blocked obviously is a a tax package for the state of new york which in the governor's mind is is rather sizable and also a tax package for the city of new york which would be very difficult for the legislators representing the city of new york to vote on that list white also about a guarantee that we can put a cap on this whole situation of like a sen webb we'll come back how are all these shifting winds affecting the members of congress will actually have to vote on the controversy laid in new york but first to jim lehrer in washington robin as senator jake garn republican of utah is back with us tonight the senator was here for weeks ago our premier program as a matter of fact senator you said that and that you join the present and main adamantly

opposed to any kind of federal assistance to avoid new york city's to fall is that still your position tonight yes that's still absolutely my position i'm very sorry that the president seems to be softening at this point the last four weeks as we met with hearings on the banking committee on which i serve and i have not seen anything yet that convinces me the federal government ought to provide loan guarantees what about this us six billion dollar plan that governor kerry is a proposed and that doesn't just been talking about with that convention now that they are now coming up with this i think proves my point i feel very strongly that if public officials started to face this problem last spring or earlier it's been coming for a long long time as you know i was mayor of salt lake city former vice president the national league of cities most of us were aware more than a year ago and what was developing no one wanted to come to grips with some way they'd hoped it would just disappear and they wouldn't have to make a hard tough decisions well the point i'm trying to make rather quickly is that it's time we have said now on the

position has been firm it's amazing to me how new york has been able to come up with just a little bit more do more than they did before and if we had a couple of months ago of steel cases like selling insurance try to sell half a million dollar policy maybe a cell and twenty five thousand i think we're going to get it to death can you conceive of any situation where you personally fonder jagger of utah would stop sign no one would say yes is there anything in other words that new york city or state could do to change your mind there's one thing in this package that might not only say might because i look over what the governor has proposed i'm pleased i'm frankly please that they have even now it's been step by step rather forcing them into it by saying all here in washington and i'm pleased that they're making more stringent demands and i think that's important that they do so but i'm looking at the overall package to memorize has greatly distress with the municipal unions and they are under stress with municipal unions all over the country

and public officials to yield to them for political purposes to get re elected then they'll yield foods are exorbitant ways demands of the fringe benefits pensions there's an upset in my opinion about that i still feel that they are so absorbing now the union's ought to be willing to renegotiate some of those contracts there ought to be more employees are released i think they have far too many for the services that they provide i think the pension plans in addition to having some contributions need to have some expletive i know senator orenstein from albany and of the discussion centered on what one question would you have for the senator is out there trying to grapple with this new tone in there maybe some things at questions or comments for him directly oh i would just ask him what i've been talking about is there any plan or any willingness to put it very bluntly to clamp down on the radar new york city's treasury these changes are not got let's put it that way to say no we're not going to continue to yield in fact we're going to

backtrack a little bit and start solving those problems and ornstein well i would like to respond i understand what some of the guys talking about and i don't mean to be presumptuous but i like the rear i like to really respond by question that i'd like to ask him a number one how is the federal government going to respond first of all for instance to pick up the millions of dollars that new york's brands bought in protecting and servicing the united nations how is the federal government going to respond to the millions of dollars that new york spends every year in dealing with foreign visitors which are important to the foreign policy of this country and which are important to the commerce to the international commerce of this country finally i'd like to know how a senator john has gone to respond to the question that new york which has been an open haven to immigrants which have made this country great for decades has become over the

last thirty or forty years a haven for the ny gration off black citizens who were discriminated in the south and who came to new york as a result of national policies of discrimination and cause so many of our problems here and there are resulting in billions of dollars of wealth their expenditures that were not created by the city of new york but were created by discriminatory federal policies finally i like the accent and i'm prepared to respond to his questions as well what do you have to say when i'm in the city of new york every two dollars that we spend on the federal government income tax dollars that our citizens and our business is scented the federal government we get about fifty percent we're about one dollar for every tool we get one i don't believe i don't have the statistics on utah but i'd like to get them from senator dodd i am

willing to bet that's utah gets more from the federal treasury and they sent to add those are legitimate questions we are entitled as we have problems of municipal mismanagement but those problems are being put in place there is a wage freeze the unions have now a great euro vision of the pension plans the city is on the strange and a fiscal control now by the state so that they cannot continue to overspend but until we get some failing that our government is willing to return dollars to ours for services which are clearly being rendered by the city of new york which are national in nature i think we have to have a meeting of the minds on that level as well or some other i certainly agree with you that you know new york city has some unique problems of my city did not have in other cities around the country did not as far as the un particularly after their action this week on labeling and zionism has raised in the

magic course is to protect our cause and when the leader of the family of the palestinian liberation movement came to the city it we spend in three days seven hundred and fifty thousand dollars just to protect this one man we haven't got a penny back from the federal government now that isn't going to start up a budget problem but i think it's a legitimate question we might well you ask a number of questions and he would give me another surgery interaction the other day that i think was huge in seriously consider getting out of the united nations for my brand zionism is racism that's an extremely bad policy of rivals but as far as the un expenditures i definitely agree with you senator there are some programs in nashua major just like in my city where was the state capital of utah there were some functions that we performed on the statewide basis or for state residents that i felt we should really remember so i can't dispute that part of what you say sir and we think that should be an

offset you should have some names of being reimbursed for extra expenses that have nothing to do with the municipal operations city their immigration minorities coming in rep watt a statistics on that and we've been led to believe that new york as an inordinate problem in that area new york is down the list from washington they say from philadelphia from some other cities they do not have an unusually high number or percentage of people as i remember the figure at twelve point four percent for new york city or other large cities around the country so i think way that is not the problem i would not agree with you that is the major problem in new york city i get back to the major municipal services abu ali's employees extra employees per thousand population of the vest that wage increases pension funds and senator you're not on the program i spoke a month ago that if i wanted to eliminate these things you've talked about that are peculiar to new york city and that i did

not have in my city to make a very fair comparison i would've had to have the same number of employees or thousand and pay them the same friends benefits the same in my city just on the municipal functions police fire garbage collection the normal thing cities do across this country by nine hundred percent and i think something needs to be done about that and i think we have a philosophy in this country that is shown by new york city is rampant in washington we don't have the ability to say no we got a bunch of political animals in both parties republicans and democrats are more interested in getting elected and i think of the citizens of new york city and new york state and across this country had to start biting the ball and finding out what their public officials are doing to them we would solve future problems like new york city as having your difference in these days we have a printing press senator don we have one of the men was biting the bullet right now i know new york city and he's the new york city deputy mayor stanley friedman and he's also served in the city's near albany liaison

office needs a close adviser to mayor been first of all i just want to ask one question on the current situation and we can respond to these others is the governor's plan acceptable to the city as it stands well the part of the government plan that were fully aware of rare exceptional except for the part about the one cent sales tax for new york city residents new york city now has an eight percent sales tax which is one of the highest in the country if not the highest another sense done that would make it nine percent that one percent use two hundred million dollars but it's an honor as taxes are regressive tax it doesn't help the economy of the city is it puts new york city merchants an unfair competitive disadvantage when our neighbors in that store itself open westchester where verdi were portrayed name at this particular point as opposed to the increase in the sales tax and everyone knows that a sales tax is regressive taxes the poor it's the same amount of money for man goes and make seven thousand dollars a year and buys a sandwich for a dollar what if he pays the same as the men making fifty thousand dollars a year what we want is the usual progressive taxes you know increasing the income tax

and charisma commuter has there been proposing that was absolutely maybe ms in the care to the government and legislatively it is that if we have them to join me in the tax incentives should be broad based and it should be an increase in income tax and the computer and the commute attacks the media as you're aware lawrence's living in new york and spends a minimum of ten hours a day in new york is about one eighth of what the new york city residents has been i'd like to respond to senator graham who refers to political animals a new york city and new york state and the senator speech was beautiful in his constituents and it's all love them will probably be reelected year in and year out of course that the hundred and seventy five thousand people that they have in salt lake city them a little different situation in addition sen guy was a member of the nationally citizens a member of the us conference of mayors i think it's significant for our audience to know that both those bodies came out in favor of federal aid for new york city for guarantees for new york city bonds and notes but just you know in the

brief time that we have and i know cause some prizes here is very helpful to just introduce it because sitting is about your prizes republican congressman and suburban westchester county outside new york he's been touring the country in recent weeks trying to drum up support for the city dui do you find a lot of support for senator barnes position around the country are feeling that new york hasn't done them if you're well you know it's been interesting for me to listen to listen unfortunately i feel that senator garn and unfortunately the president are coming out of touch with what the people of america saying right now in new york city and i've traveled over six thousand miles the last four or five days or two cities and places in our country talking to people where there was an iowa kansas and chicago then her los angeles and the amazing thing to maybe go out there thinking that you know we're gonna hear all these things about new york and the people on the street what they were saying working men and women they were saying you know we can understand it now that we

understand that new york is really going into bankruptcy that the federal government is going to stand by with their hands in their pockets and let the great city a great state but now now they say we'll excuse new york for many problems a vet we think they were correct but how do we give billions of dollars and the foreign aid and how we make guarantee loans to foreign nations running into the billions and turn our back on a major city in our country and what really gets me when i hear senator dodd talk like this is you're talking about people in new york city you're talking about eight million people who are in a real squeeze and when this government starts turning its back when americans were faced with this kind of a crisis we've got a real problem and i would just one area of touch on a non stop for a moment and that's the schools right now we're running in new york city about forty to forty five kids in the classroom because of the cuts have already been made during the first of january it will be forty five to fifty kids in a classroom

based light on the existing program today because of what we're making on cuts now you take the middle income families are left here in new york who are gonna look at those classrooms and see fifty kids in the classroom and they're gonna move and the people have to stay here to make this city a viable city along with the low income just interject here that we have to say a good night to senator arnstein in albany who has to leave that studio there for the excellent program inside albany which is coming up immediately after this program let's carry on this discussion now senator garn can i ask you what you think is going to happen and in washington you can feel the changing winds know you may know that changed your own lines are we going to get a bill out of congress helping new york city in advance of default yes i think that the president changing i do expect that you will see some kind of are paid and i might just respond if i could get some of these comments of a major salt lake city is only hundred and seventy five thousand people within the corporate limits of been the same since before the turn of the century well another half a

million people who think they live in salt lake city and the commute to the city every day on a small scale very much like new york or hundred thousand people who work in the city every day do not live in the city and so on a small scale we have some of the same problems of the commuters the national league of cities us conference of mayors board of directors didn't go to a new york city that's hardly representative of the fifteen thousand cities a vote will not be taken until december of delegates to the convention so what we're saying is the board of directors by majority vote well i went to the doctor the general question that the congressman pfizer has raised which is that what you're really talking about car and the car's windows ok so somebody blow up in your the politicians as they already considerable that politicians have made mistakes aren't you punishing the wrong people you know politicians are not helping the city of new york at which is really what the carney responded about what was being said susan i was ignoring the

people no i'm not not having been in my hair and certainly not to say i'm just not convinced that all the horrible consequence one says will occur if they get their classrooms what a horrible consequence i think that we have got the ice at it as hard as it may sound to take this is an object lesson across the country because there i didn't say this new york irresponsible volunteers and i said all over the country i didn't say in one party and the other neither party has a monopoly on that and i think we have a political sickness in this country and we'll give back to some of the days when politicians have the guts to say now we're going to take a tough stand on this we're not going to fund this program unless there's lesson starts to be learned not just for new york city unless we remove this burden depp and taxation politicians manipulating their citizens is going to continue it's going to happen in the country i don't i wouldn't feel so strongly about new york city as i do in opposition over one isolated case it's a fiscal sickness we have in this country is worse in congress than it is in new york city

we got to stop it or we're going to destroy this country economically as new york city but one of what i think is one of your points to a mr friedman the deputy mayor the impression is not only an in the mind of people like senator garn mr friedman but in papers like the new york times that although the city has done a lot and it is mainly visiting the the pain on the recipients of various social services and now perhaps on some taxpayers and some city employees but the job is still a great deal of fat in the city that could be cut out and in the bureaucracy of the city how could us an attack ad on to senator garn sport that has the city done enough yet well we think that we've done enough and we're doing more as you know out of a twelve billion dollar budget is eight million eight billion dollars in tax levy fines ever that that eight billion dollars is about three points or three points for which we call controllable now add that amount we've already cut since january first of this year thirty five thousand city employees either by les also by attrition wicked seven thousand police elmo's fire and sanitation workers

more than that and sanitation in their education and social services there's a hiring freeze complete hiring freeze and has a high wage freeze and the furrow of low wage increases that was collectively bargained at the reasons posited july first transit fare went from thirty five cents to fifty cents there was a year state and city cut in the city university budgets will win fifty two million dollars which is the equivalent of the tuition high eight firehouses will close schools have been closed in a small hospitals have been closed real estate taxes have gone up ten percent new taxes would generate it's only three hundred and fifty million gallons a day care centers and closing its innocence and visibly close what is the city all about it's not the service people wouldn't expect you to go through the whole list or you know your list is pure history west point of the listeners should know is that new york city's sends to washington sixteen billion with a b dollars a year and we get back to the president's own faith is three point six billion dollars a year that's not an equitable iowa and everywhere and others paraded

in a little protection from the wild and start with congressman pizer the way things look tonight is new york city with federal help going to be able to avoid default i believe that if the year a legislature acts in albany the federal government will act right now congress will act on convinced that very clearly that the president as the one thing that senator garn i seem to agree with the president has made eight change is a i think his outlook and he will approve legislation i think we can avert that before and i think it's essential that we do is that you're feeling senator john very briefly yes i agree with the exception and i don't think we need over the fall i don't see the consequences of the fall to most of the proponents of this legislation the new york state does pass this bill i would expect the congress would pass in loan guarantees and the president would sign it even though i will probably still be voting against and get a few words with a fragrant you feel sensitive and i feel the same guy the only way we can avoid default is with some federal action coupled with state and city and we're going to get we're always helpful

with eternal optimists ok well thank you all gentlemen thanks to one little footnote on a news item congress today approved and sent to president for a bill raising the national debt limit to a record five hundred and ninety five billion dollars the treasury said the new ceiling would barely cover its financing needs between now and next march course thats something new york state and city can't do is print their only american male july and i'll be back tomorrow evening speaking to be the case but the peace prize

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