Address on "Urban Policy for the Remainder of the Twentieth Century" in New York City

I believe that the future of America is directly dependent upon the good health and welfare of our nation's cities.

Our cities and metropolitan areas are the main staff of life for the majority of Americans. They provide entertainment, employment, and housing to millions of Americans. They are the repository of our nation's cultural institutions, art galleries and symphonies. They are the economic backbone for an increasingly urbanized nation.

But our cities are facing a crisis which can no longer be avoided. Many of our major cities are rapidly losing population to smaller communities and to surrounding suburbs. It is often the affluent who have fled, robbing cities of needed talent and depriving them of a needed tax base—leaving the poor, who are more heavily dependent on local government services. Just as people have left many of our urban areas, so too have businesses and jobs, thereby further eroding the municipal tax base, and making it more difficult for localities to provide for the increased demand in municipal services. New forms of revenue have not been made available to localities to replace their shrinking tax base. Crime and the fear of crime in our major urban areas keep people out of our cities and make our cities places of forboding rather than hope.

This disturbing but very real trend has come at a time of both tremendously escalating municipal costs and a rising demand for municipal services.

If our cities fail, so too will our country.

Yet in the face of these enormous problems, our nation's cities have been faced with 8 years of self-styled benign neglect by the Nixon-Ford Administrations. In fact, the Republican policy toward our cities has been nothing short of conscious, willful indifference to the plight of urban America. They have promised new programs, such as Special and General Revenue Sharing, to supplement existing programs, and have instead used them to supplant current programs and to lower the level of assistance to cities. Two Republican Presidents have purely and simply written off our cities. They hav6 pitted our suburbs and rural areas against our major urban communities. Their policy has been divisive and disastrous. Rather than launch an attack on our cities' problems, they have declared a war against the cities of America. Our cities have needed help and the Republicans have turned their backs. Our cities needed financial assistance and the Republicans have given them crumbs. Our cities needed attention and the Republicans have given them neglect.

Between 1972 and 1974 alone, the Republican Administration cut $4.5 billion in urban programs and another $7 billion in programs to aid the poor, the untrained, the unemployed, and the medically indigent, all at a time when municipalities lost $3.3 billion in purchasing power.

Our country has no urban policy or defined urban goals, and so we have floundered from one ineffective and uncoordinated program to another. Hopes have been raised only to be dashed on the rocks of despair when promise after promise has been forgotten.

We need a coordinated urban policy from a federal government committed to develop a creative partnership with our cities for the survival of urban America in the balance of the 20th century. This policy must recognize that our urban problems stem from a variety of factors, each of which must be dealt with directly and forcefully—problems of urban decay, declining tax base, crime, unemployment, lack of urban parks and open spaces.

We must begin our urban policy by recognizing the human needs of the individuals who live in our cities. The essential building block of our urban policy must be the provision of a job for each person capable of holding gainful employment. I believe every person has a right to a job.

But our urban unemployment rate is intolerable. This high level of unemployment means less tax revenue for cities, increased social tension, and higher crime rates.

Unemployment nationally is at 7.6 percent—at least twice the acceptable level. And yet this figure, to which the Republican Administration in Washington points with pride, is itself a gross understatement of the unemployment problem afflicting our major urban areas. According to the United States Department of Labor, central city unemployment for 1975 was 9.6 percent as opposed to 8 percent for nonmetropolitan areas and 5.3 percent for the suburbs. For the poverty areas of cities that figure is 13.8 percent, and for blacks in these areas it is 17.6 percent. Overall, center city black unemployment is at the rate of 14.1 percent. In 1975, every fourth black worker was unemployed and the majority of them were ineligible for unemployment compensation. Teenage black unemployment in some areas of America approaches the staggering figure of 40 percent.

Indeed, even these figures are deceptive of the real problem, for they do not include the literally hundreds of thousands of people who have gotten completely out of the labor market due to their frustrating inability to find a job.

These are not simply figures. They represent the crushed dreams of millions of Americans ready and willing to work. The 9.6 percent unemployment rate in our central cities alone means 2.6 million people out of work.

To make dramatic improvement in the unacceptably high unemployment rate, I propose a creative, joint program of incentives to private employers and a public needs employment program funded by the federal government. Such programs will more than repay our investment, not simply in making taxpayers of those now on unemployment insurance or on welfare, and not simply in generating additional revenues to the federal, state and local governments—although each 1 percent decline in the unemployment rate will produce $13 to $16 billion in federal tax revenues; but rather in restoring the pride and self-respect of those too long ignored and cast aside.

These incentives to private industry should be geared directly toward the provision of jobs for the unemployed, and toward encouraging industry to locate new plants and offices in urban areas where unemployment is high.

Almost 85 percent of America's workers depend on private industry for jobs. Most of the unemployed will depend on recovery in the private sector for renewed job opportunities. We cannot afford to ignore well-designed, job-related incentives to private industry to help reduce unemployment. These should take the form of:

• assistance to local governments for urban economic planning and development and to help local governments, encourage private industry to invest in our cities;

• an expanded employment credit to give businesses benefits for each person they hire who had been previously unemployed;

• as a further stimulant to private industry to hire the unemployed, the federal government should increase its commitment to fund the cost of on-the-job training by business;

• encouragement by the federal government to private industry to prevent layoffs.

However, private industry cannot meet the task alone! The federal government has an obligation to provide funds for public employment of those who private business cannot and will not hire.

The Nixon-Ford Administrations' priorities have been grossly misplaced. While adequate unemployment compensation is necessary to protect the unemployed, their best protection comes from jobs. It has been estimated by the Joint Economic Committee of Congress that each 1 percent of excess unemployment adds at least $4 to $5 billion in direct costs for unemployment compensation, food stamps, and welfare.

It is an incredible misallocation of resources for the current administration to spend between $17 and $20 billion for unemployment compensation and an additional $2 to $3 billion on food stamps due to unemployment, and yet only $2% billion on public job programs.

Certainly, money is better spent in creating useful public service jobs to take people off of welfare, food stamps and unemployment compensation and make them tax contributors; yet we are asked to tolerate a policy adjusted to support an unacceptable status quo. Therefore, I propose the following program of public employment as an investment in human beings, an investment which will more than be repaid in uplifted lives, increased tax revenues, and decreased welfare, food stamp and unemployment compensation payments:

• An expansion of the CETA program [Comprehensive Education and Training Act] through which direct federal funds for municipal and other jobs have been provided, with administrative responsibility resting at the local level. This program was originally designed merely to combat structural unemployment in a period of mild recession. It cannot now deal with the cyclical unemployment caused by the severe recession we are in, without an expanded and strengthened role. It now provides only 300,000 jobs. It should produce at least twice this number of jobs. The 9.6 percent unemployment rate in our central cities could be markedly reduced by the provision of 600,000 to 700,(XX) public jobs to the unemployed for useful jobs near their homes, in the cities;

• Passage of an accelerated public works program which would help create new jobs, 80 percent in the private sector and many for our young people. Federal and state governments should also share responsibility for guaranteeing bonds for public works projects;

• Funds for 800JD00 summer youth jobs should be provided;

• Perhaps the biggest single problem created for the poor who live in our cities is the current welfare system and Welfare Reform would be the single most important action we could take.

As currently constituted, it is a crazy quilt of regulations administered by a bloated bureaucracy. It is wasteful to the taxpayers of America, demeaning to the recipients, discourages work, and encourages the breakup of families. The system lumps together dissimilar categories of poor people, and differs greatly in its benefits and regulations from state to state. It is time that we broke the welfare and poverty cycle of our poor people. My recommendations are designed to satisfy the following goals: (a) we must recognize there are three distinct categories of poor people—the unemployable poor, the employable but jobless poor, and the working poor; (b) no person on welfare should receive more than the working poor can earn at their jobs; (c) strong work incentives, job creation and job training should be provided for those on welfare able to work; (d) family stability should be encouraged by assuring that no family's financial situation will be harmed by the breadwinner remaining with his dependents; (e) efforts should be made to have fathers who abandon their family be forced to continue support; (f) the welfare system should be streamlined and simplified, with a small bureaucracy, less paperwork, fewer regulations, improved coordination and reduced local disparities; (g) persons who are legitimately on welfare should be treated with respect and dignity.

To achieve these goals, I propose a single, fair, uniform, national program of welfare benefits funded in substantial part by the federal government with strong work and job incentives for the poor who are employable and with income supplementation for the working poor, and with earnings tied so as to encourage employment, so that it would never be more profitable to stay on welfare than to work. No one able to work, except mothers with preschool children, should be continued on the welfare rolls unless job training and a job were accepted. The welfare burden should be removed from a city such as New York City with all welfare costs being paid by the Federal and state governments.

The programs I have proposed will be repaid by increased tax revenues generated by the reduction in unemployment from the jobs programs I have outlined. Their financing can be assisted by the $5 billion to $8 billion streamlining of the defense budget I have suggested.

While we must concentrate on the human needs of those who live in our cities throughout the country, we cannot ignore the fiscal plight of our cities themselves. A recent authoritative survey showed their plight dramatically. Of the cities and towns surveyed, a total of 122 began the last fiscal year with combined surpluses of $340 million and ended the fiscal year with a combined $40 million deficit. This has forced cities to raise local taxes an estimated total of $1.5 billion, or to cut back on important municipal services. These local governments experiencing fiscal difficulties, which in no way are of their own making, had to eliminate 100,000 municipal positions last year alone. The deflationary adjustments state and local governments together were required to make removed $8 billion from the economy last year.

To alleviate the suffering our cities are being put through by high inflation and continued recession, I propose the following:

• Countercyclical assistance to deal with the fiscal needs of cities particularly hard hit by the recession. The $2 billion of countercyclical assistance recently vetoed by Mr. Ford is essential and affordable. In fact, it is within the budget resolutions adopted by Congress. This aid will go to create new jobs and to maintain current levels of service in hard-pressed cities. Without such aid, cities like Detroit may have to cut back essential services;

• Extension of the revenue-sharing program for 5 years, with an increase in the annual funding level to compensate for inflation and with enforcement of the civil rights provisions of the bill to guarantee against discriminatory use of the funds. I will study whether the revenue-sharing formula should be amended in the future to place greater emphasis on areas of high need. Moreover, I believe that all revenue-sharing funds should go to the cities and that localities should be allowed to use these funds for defraying the costs of health, social services, and education, which they are currently forbidden to do;

• Study the creation of a Federal Municipalities Securities Insurance Corporation to assist localities in marketing their bonds and in reducing interest levels now faced by municipalities, and to provide voluntary selfcontrols in municipal financial matters.

The problems our cities are facing are compounded by their often deteriorating physical state.

Housing has deteriorated enormously and new housing is often unaffordable. 1975 was the worst this nation has had in 29 years on the number of housing units constructed. Although this nation in 1968 legislated a goal of 2J4 million new housing units per year to meet current needs, last year witnessed the construction of barely 1 million units. At the same time, housing costs have risen so rapidly that only 3 in 20—15 percent—of America's families can afford new housing. What is likewise appalling is that the government now has thousands upon thousands of abandoned and unused dwellings under its control and deteriorating due to bureaucratic inaction, while tens of thousands seek better shelter.

Likewise, our municipal transportation systems are faced with difficult times. For the last 20 years, more than $230 billion has been spent at all levels of government for our highway system. From 1967 to 1975, expenditures from the highway trust fund averaged about $4 billion per year; the administration's 1977 fiscal year budget outlay for highways reached $7.1 billion. From the end of World War II until the mid-sixties, no new major transit construction project was undertaken with public support. Cities were faced with deteriorating buses and subways and inadequate maintenance programs and schedules. Public transit ridership declined from almost 19 billion in 1946 to only 5.5 billion in 1973, reflecting the poor state of our municipal transit systems. By the end of 1974, operating deficits for existing public transit systems nationally were expected to have reached $900 million. We cannot continue to allow our mass transit systems to languish and remain a stepchild. Mass transit, if properly supported, can serve as the means to encourage increased use of our cities as places of business, shopping, and entertainment; and can correspondingly enable urban workers to reach jobs located in the suburbs; all with less pollution and energy use than the present system of transportation.

To help solve the physical problems confronting our cities, I submit the following agenda on housing which will, in addition, put back to work hundreds of thousands of unemployed construction workers and fulfill our national commitment to build 2J4 million housing units per year:

• direct federal subsidies and low interest loans to encourage the construction of low and middle income class housing;

• expansion of the highly successful Section 202 housing program for the elderly, which utilizes direct federal subsidies;

• greatly increased emphasis on the rehabilitation of existing housing to rebuild our neighborhoods; certain of our publicly created jobs could be used to assist such rehabilitation. It is time for urban conservation instead of urban destruction;

• greater attention to the role of local communities under the Housing and Community Development Act of 1974;

• greater effort to direct mortgage money into the financing of private housing;

• prohibiting the practice of red-lining by federally-sponsored savings and loan institutions and the FHA, which has had the effect of depriving certain areas of the necessary mortgage funds to upgrade themselves, and encouraging more loans for housing and rehabilitation to the poor.

In tandem with program, I propose to bolster our urban transportation system by:

• substantially increasing the amount of money available from the highway trust fund for public mass transportation;

• studying the feasibility of creating a total transportation fund for all modes of transportation;

• changing the current restrictive limits on the use of mass transit funds by localities so that greater amounts can be used as operating subsidies, and opposing the administration's efforts to reduce federal operating subsidies;

• achieving better highway utilization through such means as reserved lanes for bus and car pools;

• reorganizing and revitalizing our nation's railroads.

Our cities can never be what we desire so long as they remain an undesirable environment in which to live and raise a family. Yet too frequently, the specter of crime destroys this environment and creates an atmosphere in which each person lives in fear of the actions of others. All Americans have the right to live free from the fear of crime.

Surveys indicate that large percentages of the American public fear to come into the cities or walk their neighborhood streets at night. Crime has now become a suburban and rural problem as well as an urban problem. Rising crime rates give reality to these fears. Figures show that one in every four American families will fall victim to crime within the year. A child born in a large American city and remaining in that city throughout his or her entire life stands a greater chance of meeting a violent death than did the average American soldier during World War II.

In order to restore order and tranquility to our cities, I propose:

• a reform of our judicial system to insure that swift, and predictable punishment follows a criminal conviction. I believe that crime is best deterred by the certainty of swift justice;

• a revision in our system of sentencing eliminating much of the discretion now given to judges and probation officers, and insuring greater certainty in sentencing and confinement and a higher percentage of serious criminals being imprisoned;

• reasonable restrictions on the purchase of handguns, including the prohibition on ownership of guns by certain persons with criminal records;

• upgrading of the rehabilitation programs available to criminals while in prison;

• a concerted attack on the drug traffic and organized criminal activity with which our cities are afflicted;

• federal assistance to the crime prevention programs of local governments with a minimum of federal regulations;

• an attack on unemployment, the root cause of much of our urban crime, through the programs I have mentioned previously. We should recognize that $3 billion has been spent since 1967 by the Law Enforcement Assistance Administration in order to fight crime, with more than half of this amount going to the nation's police forces. This alone is not sufficient to reduce crime. We cannot seek cosmetic remedies while ignoring the Case causes of crime.

Moreover, our urban existence is often lived out in a sea of concrete. To make our cities more attractive and culturally viable, we should direct greater emphasis on the establishment of parks in urban areas, and we must also expand programs such as the urban walls program and federal assistance to the arts.

For too long, the doors of the White House have been shut to the needs of the cities and to the mayors who represent them.

Franklin Delano Roosevelt, one of the prime movers behind the United States Conference of Mayors, recognized the need for a close partnership between the Executive Branch of the federal government and the mayors of America's cities.

As President, I shall develop close, personal and continuous working relationships with you. I will beef up the role and functions of the Domestic Policy Council to serve as a direct link to you. Moreover, I will have a high-level assistant at the White House to help coordinate programs related to cities between the various government departments, and to serve as the President's direct link to the mayors and other city officials. Mayors need a Person at the White House with the President's ear to whom they can relate directly about city problems.

You are on the firing line every minute facing tough problems. I do not intend to let you stay there alone, without the full support of the President, nor disarmed, without the aid and resources to combat those problems.

You also have my assurance that the federal government itself will be pro-city. Too often the federal government has pursued policies which have encouraged urban decay, such as past procedures in the location of federal buildings and the construction of highways through urban neighborhoods. As President I intend to put a halt to such counterproductive policies.

I believe that together we can build an urban America which will be the envy of the rest of the world and, more importantly, a place where our citizens can live and play and work together as brothers in peace and harmony.