The MacNeil/Lehrer Report; Carter's Urban Policy

PRESIDENT CARTER: Today marks the turning point, for today we commit the federal government to the long-term goal of making America`s cities more attractive places in which to work and to live, and helping the people who live in them lead happier and more useful lives. With your help, we will not fail. Thank you very much. (Applause.)

ROBERT MacNEIL: Good evening. Well, President Carter`s long-awaited policy to save American cities was unveiled in that White House ceremony this afternoon. Mr. Carter promised his leadership to reverse the deterioration of urban life and to put an end to seesawing federal policies. He said a year-long study had revealed no quick or easy solutions. Instead, a creative alliance of federal, state and city governments and a reorientation of federal policies would produce long-term solutions.

In addition to that upbeat rhetoric, the President proposed this concrete help:

(White House, earlier today.)

CARTER: $4.4 billion in budget authority, $1.7 billion in new tax incentives, and $2.2 billion in loan guarantees are designed precisely to fill those gaps. To make government at all levels more efficient, I propose incentives to cities with coordinated economic development plans; a simplification of planning requirements, and a new coordinating mechanism for federal programs to help relieve the distress of the most fiscally strained communities; replace the expiring countercyclical aid program with a new fiscal assistance program targeted on those communities with the highest unemployment rate; to encourage the states to channel additional resources into their own distress areas; a new incentive grant program to provide increased opportunities for our unemployed; a new employment tax credit to encourage private industry to hire jobless young people whose plight is among the most serious human problems of our whole society; and a new program to encourage private industry; a new partnership with mayors to hire and to train more disadvantaged workers; to strengthen the economic base of cities; major incentives to private investment in urban areas through increased and affordable credit from a new national development bank, expanded grants and a new tax incentive; and an innovative program of labor-intensive public works aimed at repairing and rehabilitating the existing facilities in our urban communities; an inner city health and social service initiative, together with expanded support for mass transit, housing rehabilitation and urban parks and recreation initiatives; and a new arts and cultural program to promote community and human development and preserve historic buildings in our urban areas. And to marshal the thousands of Americans who want to contribute their time and energy to the betterment of their own neighborhoods, I`m proposing neighborhood rehabilitation and anticrime projects and a new urban volunteer corps.

Although we recognize, again, that the federal government does not have the resources by itself to do the job, we are ready to provide the leadership, the commitment and the incentives which will encourage all sectors of our country to rebuild and to maintain the quality of America`s communities.

MacNEIL: That was the red meat of the Carter policy, the actual figures and the form of federal aid he proposes. The President said that contrary to previous reports, the urban policy has come through strong and unscathed. Tonight we examine how strong, how unscathed, and how it will work. Jim?

JIM LEHRER: Robin, the President`s plan is contained in this neat and tidy eighteen-page booklet entitled, "New Partnership to Conserve America`s Communities." The process which resulted in this booklet and this policy was understandably anything but neat and tidy. It took a year to work out, a year of some intense infighting within the federal bureaucracy over the competing interests and ideas of various department and agencies and a year of deflecting and reflecting on all of the other interests which were in there lobbying -- the governors wanting state involvement, the mayors wanting more direct money, the neighborhood groups wanting more recognition, and there were the views of organized labor and business to consider, as well as those of civil rights, minority enterprise and urban policy organizations.

During the last few weeks, as the March 27 deadline approached, the President reportedly turned more and more to one man to put the plan in final order. He`s Stuart Eizenstadt, the President`s chief assistant for domestic policy. Mr. Eizenstadt, my first question would be, how did you get to be so lucky to be able to put it together, but...

STUART EIZENSTADT:(Laughing.)

LEHRER: ...let`s talk about the money. The President cited those three figures, $4.4 billion, $1.7 billion and $2.2 billion. What does that mean in terms of real new money, other than money that has been redirected through existing programs from existing programs?

EIZENSTADT: The three figures that the President cited are all new money, over and above the substantial increases that we had already requested for our fiscal `79 budget back in January, so this is all new money based on fresh initiatives.

LEHRER: All right. The mayors, of course, had asked, through their Conference of Mayors, for $11 billion. Why did you and the President decide against going that high?

EIZENSTADT: Well, first of all, when you total these figures up and look at the total impact of the guarantees, the tax credits and the budget authority, you get over $8 billion, so that we`re not far off. Secondly, we have to live within budget constraints, and indeed the whole basis of our policy is that the federal government can`t do it alone. What we have to do is provide the leadership and the federal financial incentives to leverage the involvement of the private sector, states, neighborhoods and others to get them involved and to target their resources to cities, that the federal government simply doesn`t have the financial wherewithal to do it all themselves; and I believe it`s fair to say that when the mayors presented their program on the Hill to the respective Congressional committees, they were told in no uncertain terms that given federal budget deficits and constraints, we had to live within our means.

LEHRER: Was that the major consideration in holding down the cost, the budget constraints, rather than the idea that money wasn`t the final answer anyhow?

EIZENSTADT: Well, I think we felt that money certainly was a help but that it was not the final answer. In fact, we spent most of our time trying to re-examine our existing programs. There is now some $85 billion going to states and localities, about $30 billion of which goes to localities. That is about a twenty-five percent increase since we took office. We wanted to make sure that money was utilized most effectively before we located gaps and produced new initiatives. We did find that there was a need for new initiatives; I think the new initiatives are bold, and I think they`re reasonable and I think that they are affordable within our budget limits.

LEHRER: Mr. Eizenstadt, let`s go to another, non-financial, aspect of what the plan has to do, and this has to do with changing attitudes within the federal government itself. Here`s how the President put it this afternoon:

CARTER: In developing this national urban policy, we took a long, hard look at the work of every single major department in the federal government. In the process, agencies ranging from the Defense Department to the General Services Administration have been made more sensitive to urban concerns. This is the beginning of a long-term change in the attitude of the entire government bureaucracy toward urban communities. Our review generated a large number of proposals for changes in existing programs. Some will require legislation; most of them can be done through immediate administrative action. There are more than 150 of them.

Let me mention just three or four. All agencies will develop goals and timetables for minority participation in their grants and contracts. Five major agencies have already taken such action. The Defense Department will set up a new program to increase purchases in urban areas. The Environmental Protection Agency will modify its water and sewer programs to discourage wasteful sprawl. The General Services Administration will retain facilities in downtown urban areas, and will also put new ones there.

If the kind of review that led to these changes had been done on a regular basis in the past, our urban problems would be much less severe today. As a key component part of the comprehensive urban policy I`m establishing a continuing mechanism involving many of you to analyze the effects of new federal policies and programs on our communities. Once that mechanism is in place, analysis of the urban and regional impact of new programs will be an integral and a permanent part of all policy development throughout our government. I believe that this reorientation of federal activities to take account of the needs of other communities will be as significant as any action the federal government could take.

LEHRER: Mr. Eizenstadt, I will not ask you what the other 146 parts of that particular plan are, but on this question of sensitizing the bureaucracy: is that going to have that much impact in the long run, really?

Has that become a serious problem in terms of what the federal government itself is doing?

EIZENSTADT: In our study we found that one of the major problems that urban areas had had in addition to the demographic and economic changes was that federal programs from year to year that often on their surface were neutral were actually having an anti-urban impact.

LEHRER: Give me an example.

EIZENSTADT: Some of our tax policies, some of our FHA housing policies, some of our highway programs, some of our urban renewal programs. And what we needed to do was develop a mechanism by which all domestic programs could be measured for their urban impact, so that in the future we would not be repeating the mistakes of the past in proposing legislation which on its surface was not anti-urban but which in practice would be. And I think that if there is one signal achievement that we`ve had, it is sensitizing the entire federal bureaucracy to the fact that they must undergo that urban analysis before they propose something to the President for his approval, and my staff and the Office of Management and Budget will monitor those analyses to make sure that we are not proposing legislation which is anti-urban.

LEHRER: That was my next question: who oversees these urban analysis statements? Who decides whether or not that program or this new building or whatever fits the urban plan? Your office?

EIZENSTADT: Each agency, when they initially submit legislation for the President`s approval, must initially give such an analysis, and then jointly the Office of Management and Budget and my staff will review that analysis to make certain that the President is aware of whether or not there is an anti-urban bias in the particular program being proposed.

LEHRER: In terms of this total program, who`s going to run it?

EIZENSTADT: Well, one of the beauties of the program is that it requires a cooperative spirit on the part of sectors that have not previously been involved. It gives incentives for the private sector to invest in urban areas, it gives incentives for the states to channel additional resources into their distressed areas, it gives incentives to neighborhood groups and voluntary organizations. So in a sense it is a program that depends for its success on all sectors of our society being involved and on the success of these incentives.

LEHRER: Who`s going to make sure on a day-to-day basis that this policy is actually implemented in all its many ramifications?

EIZENSTADT: One of the things that the President proposed today and which is set out in more detail in our message to Congress is an interagency coordinating committee that will be made up of the assistant secretaries of the major domestic agencies. They will meet on a weekly basis with a chair from the White House, and they will in effect sit in a room and make sure that programs are not overlapping and that they are acting in a consistent way. We think that this is one of the most important parts of our policy, because it will begin to channel and coordinate what had previously been often overlapping federal programs.

LEHRER: All right, thank you. Robin?

MacNEIL: As Mr. Eizenstadt just said, one feature of Carter`s plan is the emphasis it places on neighborhoods, or communities. Last year the Congress set up the U.S. Commission on Neighborhoods to study the effect of federal policy on the nation`s neighborhoods. Its chairman is Joseph Timilty, a Massachusetts State Senator who ran unsuccessfully against Kevin White for Mayor of Boston three years ago. Senator, your group appears to have been listened to. Are you pleased with the Carter plan?

JOSEPH TIMILTY: Very pleased. Talking to Stu and Carl on the way in, there`s a lot of people who thought that this would never happen. And seeing the President stand up today and try to sensitize the whole bureaucracy about the need of getting the federal programs that have been going on for a whole host of years into that neighborhood revitalization -- we`ve just come a long way. We also have another opportunity: as indicated, in a lot of the broad language that was enunciated today there is still a lot of room for neighborhood input into how the guidelines -whether it be (unintelligible) or whatever the other programs are -- how the neighborhood input causes direct impact on the neighborhoods.

MacNEIL: Excuse me, Senator. Why direct emphasis on the neighborhoods, even speaking of direct aid to neighborhoods? Why not the cities?

TIMILTY: Well, what are cities? Cities are a collection of neighborhoods, neighborhoods across the country. And if you can take a look at the recent polls that have been done, people closer identify with the neighborhoods than they do with anything else. They think their neighborhoods can put it together. They`re a lot closer to the neighborhood bank and the neighborhood stores than they are to the central locations.

MacNEIL: But cities have the traditional political structure through which federal aid has come, except for some programs in the sixties. Is this not bypassing, and therefore damaging, the structure of local government?

TIMILTY: We don`t see that. The official announcement today calls for a partnership, and that`s all we`ve ever wanted. We don`t want things to happen to neighborhoods, we want things to happen about neighborhoods.

We want the neighborhoods to be able to participate in the planning process. If they`re going to build highways, do it with testing the impact that it has on the neighborhood residents. So when we say neighborhood partnership, we want a re-emphasis on the urban strategy to be about people rather than bricks and mortar.

MacNEIL: Now, in the case of direct aid to neighborhood groups, what sort of groups, and what would they be spending the money on?

TIMILTY: They`d be spending the money on technical assistance. If you`ve ever seen one of the applications that it takes to get to commerce for economic development, you have to be a lawyer in order to address that. What we`d be asking for is just a little bit of seed money so that you put neighborhood groups in a position to apply for some of the commercial revitalization they need for their own neighborhood shopping centers. It`s very easy for the large firms to be in the business of filing for those grants because they have a host of lawyers at hand. To have that kind of organization, capacity building for neighborhoods is in the best interest of not going around city hall but in a partnership with city hall and the state government. In the past, people have always talked about a partnership and an urban strategy, and meaning a partnership between the private sector and the government sector. In this case, for the first time it talks about the partnership not only with the private sector, but a partnership between the federal government, the state government, the city government and those neighborhoods where the programs should be helping.

MacNEIL: Wasn`t that part of what discredited some of the Great Society programs of the sixties, that a lot of money was sent to neighborhood groups, poverty groups and other groups to rehabilitate neighborhoods and in some cases was very severely mismanaged-- if not ripped off?

TIMILTY: These are different times, and they were channeled for specific programs. When we talk about neighborhoods there are diverse neighborhoods and diverse needs for neighborhoods, whether it be in a city like Boston, for example. There are different strategies for different neighborhoods. There`s a mechanism there to build a constituency that helps the city government rather than is hostile or in confrontation with it. That partnership means that city halls participate with the neighborhoods and vice-versa, rather than having the federal government set up some kind of a structure that provides for absolute distrust between those two agencies.

MacNEIL: Thank you. Jim?

LEHRER: One of the private organizations which consulted with the administration in drafting the new plan is the National Urban Coalition, and Carl Holman is the coalition`s president. First, in general terms, what do you think of the President`s plan?

CARL HOLMAN: I can hardly disagree with the policy as the policy is laid out, since so much of that represents the kinds of things we`ve been suggesting year in and year out. I think the fact that the administration did not back off this notion of targeting, which we were, frankly, very afraid they would -- we saw so much during the Nixon period of trying to give money thinly to 35,000 districts, jurisdictions, whether they needed them or not. If you have limited money, put the money with the people in the places where it`s needed. We were concerned, too, to see to it that the federal government did try to see if it could leverage more activity, more movement by the private sector and by the states. And most of all I was concerned that there be some sustained, continuing mechanism, because we`ve seen so many things get started and then fall away. Needless to say, our biggest quarrel is always going to be on the level of funding.

LEHRER: Do you have a quarrel with this particular funding on those grounds?

HOLMAN: Well, they`re closer to our figures than we had at first heard. We once heard there`d be only about one billion, and maybe perhaps only three billion. Interestingly enough, time was when our board would have come in asking for $40 billion -- and we consulted very close ly with them -- they came in asking for about $9.8 billion.

LEHRER: Meaning your coalition, the Urban Coalition.

HOLMAN: Yes. We`d like to see more money in housing, because we think the housing programs are working well -- in some of them we`ve got a bad rap. When you talk about what neighborhood groups didn`t do, there are a lot of people out of the federal government who went to jail for fraud in terms of those other kinds of programs -- housing programs. We take a risk as minorities when we ask for stronger state involvement, but the states are in surplus, states have great power over what cities can do, and I`m anxious to see how much buying in they`re going to do. We are not especially strong at state levels, and so to bring the states into the act is necessary but it`s also risk-taking for us.

LEHRER: The key word in all this is the term "partnership." It`s the title on the plan itself; the Senator just talked about it, too. Do you have a feeling that this partnership can actually work, with all these many diverse interests that come into play?

HOLMAN: Well, I work with an organization that sort of lives and dies by that. And I think unfortunately, or fortunately, there is no other way to do it. The city I grew up in, St. Louis, for example, got some money for crime control. However, it is the state that decides who shall be on the Public Safety Commission, and they set the salaries for the police. So it`s very important that you get the states involved. We`ve been for five years running a school finance program. Only the states can see to it that we have some sharing of expenditures and tax revenues on a metropolitan basis. So like it or not, that`s the game we`ve got to get into.

LEHRER: In a word, do you see this as the President describes it, as a major new shift in the whole approach to the urban problem, or is it just a small step in that direction?

HOLMAN: I think it`s an important beginning step. It`s a smaller first step than we would have taken if we`d had the control of the total machinery, but I think it`s an important step and it`s a long, long way from saying that the urban crisis is over or the (unintelligible) of let the weak cities go to the wall.

LEHRER: All right. Thank you. Robin?

MacNEIL: Mr. Eizenstadt, the President listed so many sort of sub-programs, or plans, for which the funding sounded to my ears rather small. Is there not a danger that spread so thin, as Mr. Holman has just suggested some of the earlier programs were, through so many communities the funds will just trickle away like sand between the fingers? For instance, how many community health centers can you fund for $50 million?

EIZENSTADT: Well, what we attempted to do is to pick out those programs that we thought could best be targeted, and the reason that the funds simply won`t be dissipated is for just the reason that Carl mentioned, and that is that we have bitten the bullet and we have decided that funds should be spent in areas where they are most needed and not simply spread throughout each one of the 435 Congressional districts on an equal basis. Secondly, in terms of economic development, which is the core of this program, there is really a substantial increase in funding.

In fact, the funding level for the bank that we have proposed has a guaranteed level of $11 billion over three years. In terms of the inner city health initiative that you mentioned, this will build more than, we think, dozens and dozens of health centers in poor neighborhoods. It`s a beginning. It is again a retargeting; this is not a new program. There is already such a community health center program. This is taking $50 million and, instead of spreading it widely, targeting it in those cities where it`s most needed. So in that way the million goes a lot further than if you tried to simply place one in each Congressional district.

MacNEIL: Does that sound like a sufficiency to you, Mr. Holman -dozens of community health centers for $50 million?

EIZENSTADT: I`d like to add that that is an increase over and above the budget that we had already asked for.

MacNEIL: Right. Mr. Holman?

HOLMAN: I think that that really represents much less of course than we originally were asking for. And I suppose what it really comes down to is this: sooner or later, we may get to what we have long seen as necessary, something almost as massive as a Marshall plan for our cities that will do for them what was done for the European cities. I have come to believe we`re not going to get to that point until we can build a sufficiently large constituency for the cities that will be willing to project and to vote that kind of money. And therefore I kind of believe somehow we`re going to have to get some new partners into the act. I was interested that no reporter seemed to have asked Mr. Shapiro today what he thought of the President`s plan, and I`m very interested as to whether or not an additional five percent in terms of investment tax credit will cause major firms or job-creating firms to stay in the cities when they can take a ten percent investment credit and go elsewhere. And so we`re all being tested in terms of that. I think that it`s going to be very, very necessary to see if we can, from these smaller beginnings, build something which in the next fiscal year and the year thereafter will be larger. But this is the first time that we have gotten as many agencies involved and gotten the President to change from what he was saying earlier, when he said that government can`t lead in this and make those decisions and say he will lead.

MacNEIL: Thank you. Jim?

TIMILTY: Can I try that?

LEHRER: Yes, go ahead, Senator.

TIMILTY: This is where the neighborhood groups come in. As we`ve been given new license to participate, we recognize it carries a certain level of responsibility. Now, for the small $50 million factor, neighborhood groups could -- and they can do it best -- go to some of the local hospitals within their cities and get a participating grant-- maybe it`s just some small start-up money -- and getting some of the larger medical institutions within those urban areas to live up to their responsibilities to those communities and be participating on a community health center level. That`s how I think the partnership should work.

LEHRER: Let me ask you in the minute or so we have left, first to you, Mr. Eizenstadt, do you feel that you have, after all this year and all the agony that you-all have gone through, your political ducts inline to get this thing through Congress?

EIZENSTADT: Well, we think we do. We`ve had extensive consultations with the Congress, as well as with private groups such as Carl`s. But one of the beauties of this program is that much of it -- indeed, a majority of it -- can be implemented without new legislation and without major Congressional battles because of the major changes we`re making in existing programs. And so therefore we think that we can get in place a lot of this urban policy very quickly and begin going about the work of conserving America`s communities.

LEHRER: What do you see as the political problems lying ahead on this, Mr. Holman?

HOLMAN: I think that the efforts which we and others might make to expand, certainly within this fiscal year, the dollar amounts, will run us up against some pretty tough opposition in the Congress, but I`m willing to see this thing shift to the Congress now and start reminding people that a number of city people and minorities elected Congressmen as well as a President.

LEHRER: We have to go. Robin?

MacNEIL: Thank you, gentlemen, all very much. Good night, Jim.

LEHRER: Good night, Robin.

MacNEIL: That`s all for tonight. We`ll be back tomorrow night. I`m Robert MacNeil. Good night.