Interview with Ken Auletta in "New York" Magazine

In an interview aboard his chartered 727 jet as it soared between Seattle and Des Moines, Jimmy Carter sketched an urban policy that reached beyond anything he has said before. He claimed that as President he would: be inclined to favor stretching New York City's current fiscal plan from 3 to 5 or more years, allowing the city more time to balance its budget;

• favor the eventual assumption by the federal government of the full cost of the "basic welfare package." Previously he spoke of eliminating the city's share and the "phased reduction" of the state's contribution;

• support special federal aid to carefully targeted urban areas, much as special assistance was provided Appalachia in the 1960's. Previously he favored aid based on some "national criteria" such as poverty or unemployment rates;

• seek to forge minimum federal standards to encourage productivity and management improvements by state and local governments. Previously he had spoken of improving the management of just the federal government

The interview was taped on August 24, as the coatless Carter relaxed in his usual seat in the front row of the first-class compartment.

Q. You have opposed legislation mandating where people live; yet you are also committed to an integrated society. For the last 20 years our cities have become more racially polarized. What would you do, as President, about cities that are becoming less integrated?

Governor Carter. Well, one of the important aspects of housing as it relates to community evolution is the legal, constitutional right of a family to live where it pleases, not to be excluded by the residents of a particular community because of race or ethnic background. That would be enforced under my administration. I was aggressive in doing this in Georgia, and it was accepted by my own people.

Second, the provisions of the 1974 Housing Act are adequate; die act provides that when federal money is spent for housing, there has to be an affirmative action program presented by the community—using the term "community" in the generic sense—to insure that housing is available for families with different levels of income and different ethnic backgrounds scattered throughout the community. That doesn't mean that every block has to have different kinds of races represented, but it does mean, in general sections of a community, that the housing has to be dispersed with affirmative action efforts. I would insist on that also.

A third aspect of integration would be a deliberate act by a government to change the ethnic character of a neighborhood by encouraging, artificially, different kinds of families to move into a neighborhood that might be different from the ones already there. I would not do that. I think that it's all right in this society, within the bounds of the first two positions that I described to you, to have the ethnic character or history or background of a community preserved.

Q. America's older cities are losing their jobs, middle-income taxpayers, and businesses. As they lose their tax base, they lose their ability to pay for the increased services needed for those poor people who remain. You favor the lifting of the cost of welfare from the backs of local government. Would you ask the state to pick up any part of the city's current welfare costs?

Governor Carter. Most states have already done this. And in the Constitutional Convention 8 or 10 years ago in New York, it was proposed that over a period of time the city's contribution to welfare be paid by and shifted to the state. I would anticipate, under a comprehensive welfare reform package I intend to propose to Congress, that the contribution of the state and city, combined, be frozen, and that over a period of time, the total levels be absorbed by the federal government

Q. Are you not for the immediate removal of the 25 percent of welfare costs New York City now pays?

Governor Carter. I don't see how that could be done abruptly. Obviously, that would be a major goal of mine. But the phasing in of a new welfare system would have to encompass 2 or 3 years, and the first step should be to set up a minimum payment to meet the necessities of life of a family that deserves such assistance, and the alleviating of the payment of this cost by the property tax, and later, over a period of time, the reduction [of the amount] that would be paid by the state.

Q. Do you favor the idea of the state and city eventually paying nothing for welfare and the full cost being picked up by the federal government?

Governor Carter. Of the basic welfare package, yes. But I would never remove the constitutional right of a state or city to vote bonus payments, or additional payments, above and beyond what is established as adequate for the whole nation by the Congress.

Q. Many people wonder whether we should continue to tinker with welfare reform proposals rather than replace the current system with something very different. How do you feel about a guaranteed annual income?

Governor Carter. Well, there are three categories of persons who need and deserve assistance. One is the working poor, those who work full-time but still have an income level below the poverty level as defined at that moment. Here, some supplement to their income would be advisable. Secondly, the parttime employees—those who are physically and mentally able to work, but because of inadequate training, inadequate education, and inadequate motivation, or because of lack of knowledge about job opportunities, don't work full-time—they ought to be cared for with training programs, matched for the job, and offered a job. If they don't take a job, I would cut their payments off.

The third category is those who will be permanently on welfare. Those are the ones also who ought to stay under the present framework of the welfare system—the other two would have it removed. [In the third category] are women with, say, two or more dependent children, where an outside job might be more costly than the woman taking care of her own children: or the elderly, or the blind, who are severely handicapped and can't work fulltime.

But in all those instances, there ought to be, as I've expressed many times, one basic income level to meet the necessities of life, varying in amount only enough to accommodate the cost-of-living standards as you go from one community to another.

Q. New York State and its local governments pay about $3 billion a year for Medicaid. Obviously they want to be relieved of some of that cost. What relief does a Carter Administration promise?

Governor Carter. Well, again, as a general premise, the thing that bothers local and state governments most is the unanticipated and very rapid increase in their contributions to health care. My custom, as governor, in this and other areas of life, was to freeze the amount that the local government paid. I would do the same thing with the state. And in a very carefully planned way over a period of, say, 4 years, projecting to the fiscal year 1981 budget, let them know what anticipated payments they would have to make.

I would not favor an immediate takeover of welfare or Medicare or Medicaid costs by the federal government. If you did that, you would have an enormous increase in the federal budget with no increase in the quality of services. So a predictable absorption of those increased costs by the federal government would be the best approach.

Q. You say "increased costs"; what about current costs?

Governor Carter. I can't promise that. I would guess that over a period of time we might actually reduce the total amount of contribution of the local and state governments to health care.

Q. In the Northeast we are in a sort of depression, with unemployment rates 2 percent above the national average and the growth rate lagging behind the nation's. In terms of federal aid formulas, you have talked about having some national criteria, such as poverty or unemployment levels, to give extra aid to areas that need it most. Would you also favor special federal aid to depressed regions, such as the federal government gave to Appalachia during the sixties?

Governor Carter. I would rather allot special federal aid to much narrower targets than the entire 11 or 12 or 15 state regions of the country, as was the case with Appalachia. We also need, under existing federal programs regarding pollution control, housing, law enforcement, and so forth, to concentrate those allocations of funds where they are most needed, which would fall within the inner-city areas. In the past, when we passed a housing program, quite often it was the Congress' intention that that money go to the people who needed it the most. But because of the intelligence and educational level and the political influence and good organizations, say, in the suburbs, they sapped away a great deal of the available federal assistance for housing and other programs, to the detriment of the inner cities, where the concerted grantsmanship was not so well developed. Those two forces would be what I would pursue: immediately to let existing aid go where it is needed the most, and, secondly, to have regional aid designed but [focused] on much narrower targets than the one you described.

Q. Could you define a narrow target?

Governor Carter. A city, or it might even be a particular industry, or it might be a particular age group. But let me add one thing. My own economic advisers say that if we do this targeting of job opportunities, we can reach at least one-half percent lower unemployment without increasing the inflationary pressures by targeting. If you do something nationwide, you get high inflation pressures. If you target it, the inflation pressures are much less for a given level of unemployment.

Q. In terms of federal aid formulas, New York and parts of the northeast region have a roughly 20 percent higher cost of living than the rest of the nation. Would you favor federal aid formulas which take into account that higher cost of living?

Governor Carter. In some categories of assistance, yes. Welfare would be one example.

Q. A chief cause of the decline of older cities is the real—and perceived— threat of crime. Since the police and criminal justice systems are primarily local functions, what role can a President play in combating crime?

Governor Carter. Well, there again I think we've had an inappropriate allocation of Law Enforcement Administration funds. Quite often they've been allotted without regard to the crime rate existing within a certain community. And this was the case with housing which I described earlier. I think that these available federal funds ought to go where the need is greatest. We also can concentrate the services of our national law enforcement agencies—for instance, the Treasury Department and the FBI—in areas where a crime rate is higher. I think that would help. There's another aspect of it and that is that the root of the rapid increase in the crime rate, in my opinion, is high unemployment. To the extent that we can alleviate unemployment by the targeting of job opportunities, that would help reduce the crime rate. The last thing is this: we have inadequate cooperation between poor families and police officers, and an inadequate assignment of police officers within a city or perhaps a state, to the areas where the crime rate is highest. By just using my own expressions of opinion, publicly, I think I can call attention to those facts, still leaving it up to the local and state government to make that ultimate decision. I would also pursue the possibility of having minority groups—low income areas where black citizens or those who speak foreign languages [live]—help police themselves. And I think if we put a major responsibility on the shoulders of leaders within those communities, it would help a great deal. A domestic Peace Corps-type effort, with a heavy concentration of volunteers as policemen's aides, would help.

Q. Would you set federal standards, say, for local crime control efficiency or government productivity or regional cooperation? Do you believe in the federal government's setting standards as a way of forcing state and local governments to be more efficient?

Governor Carter. Well, if those standards are reasonable and acceptable to the vast majority of state government officials, yes, I would consider their use.

Q. As you know, the greatest growth in government is at the local and state government levels. Would you try to set federal standards for better management and productivity at those levels?

Governor Carter. I have never hesitated to do this as Governor of Georgia. But I've always been very careful to let the local officials have the major voice in establishing those standards. When that's done, there's a much more ready acceptance of them. If there is an adamant opposition to the initiation of those standards, which there inevitably would be if the government in Washington imposed them arbitrarily, then the effort would be doomed to failure.

Q. Governor, you said that if elected you plan to meet with Mayor Beame and Governor Carey in order to devise what you call a 5 to 8 year plan for New York City. Does this suggest that you favor stretching the city's current 3 year plan?

Governor Carter. Well, I can't answer that question yet. My hope is that the present schedule can be maintained. I have not monitored the progress that is being made. But I think when I made that statement—I don't back off on it— my guess then was that the 3 year plan was too rigid. My guess is still that it is. If I can see, after meeting with Mayor Beame and Governor Carey and with the economic advisers who would help us all, that the 3 year plan can be met, I will stick with it. If it cannot be met, then I would go along with a longer period of time.

Q. And you would ask Congress to stretch the federal loan program beyond the current 3 years?

Governor Carter. That's correct.

Q. The New York State Constitution prohibits the state from making long-term loans for the city of New York. You had previously opposed direct federal guarantees of municipal securities. Because of New York's peculiar situation, does that mean you would favor direct federal guarantees for New York City securities?

Governor Carter. Not necessarily. The statement I have always made is that I would never bypass the state and deal with a city unilaterally. I think a lot of the city's problems have originated in Albany, in the state legislature, particularly when Rockefeller was governor. And so I think that it would be a serious mistake for me, as President, working with the Congress, to circumvent the responsibility and the authority of the governor and the State Legislature to deal directly with New York. And if there is a technical prohibition, which, I understand, there is in the New York Constitution, I believe that can be handled as well. New York State has shown a remarkable ability in the past, by the way, to circumvent the bonding restrictions when it chose.

Q. The SEC is currently investigating whether federal fraud was involved in the sale of city securities. As President, would you favor pursuing that investigation?

Governor Carter. Yes, I would. I also favor the SEC or some other entity—maybe the Congress itself—setting the same kind of standards on the revelation of circumstances surrounding the integrity of bonds to be issued as are now required with municipal and privately issued bonds.

Q. The governors of the northeastern states have proposed a Regional Reconstruction Finance Agency for economic development. Would you favor that or some kind of a federal RFC, patterned after the New Deal?

Governor Carter. I can't answer that question yet. ... It would be a mistake for those who live in New England to assume that local unemployment is a unique problem under the Republic Administration. It's nationwide, with a few pockets of prosperity.

Q. The problem in all cities across the country is how to retain—if not attract—income-generating businesses or middle-income taxpayers. A Reconstruction Finance Agency of some kind might create the ability to help capital investments. Would you favor it on a national level, much as was done during the New Deal?

Governor Carter. I hate to tie myself to the exact framework that was started in the RFC. As I've said, a federal guarantee of local bonds would probably be advisable.

Q. You have talked about having a Special Assistant for Urban Affairs if you are elected. Would you go beyond that, with say, a Cabinet office for Urban Affairs?

Governor Carter. Well, my establishing new departments in the federal government would be rare. My own inclination is to reduce the total number of boards, agencies, bureaus, commissions, and departments that we have now and make those that are presently extant workable and efficient There needs to be much greater attention given, as I said earlier in the interview, to assuring that the programs designed to help the most needy people in this country actually go to those who have the greatest needs. That has not been the case in the past with transportation funds, law-enforcement funds, pollution funds, education funds, health funds, welfare funds, housing funds. That ought to be done first. Then if we see that's inadequate to meet the needs in areas such as you describe, I would consider a second step.

Q. Whom do you listen to for advice on the cities?

Governor Carter. Well, I listen to a lot of people. I have 300 or 400 persons now, from the academic world and from within the structure of the mayor's councils, who volunteered to help me. And I deal directly with leaders who happen to serve in public life. Obviously, one of my good advisers would be [Mayor] Henry Maier from Milwaukee; [also Mayor] Pete Flaherty from Pittsburgh, and Mayor Beame from New York. My inclination is to combine the practical approach from public officials who have the responsibility to administer municipal affairs with the academic and nationally experienced persons who served in the past in agencies in government.