Remarks to State and Local Officials on Proposed Federalism Legislation

Welcome to the White House. I told some people the other day that Nancy and I managed to be very happy here, in spite of having a hundred MX's in the basement. [Laughter]

You know, I come into that hall and I-George, you were doing right well, and I wanted to stay back there. And I didn't even think you'd recognize me with the false mustache on. [Laughter]

But I'm delighted that all of you were able to be here today for briefings on many of the initiatives that we're undertaking. Of course, it also leaves me in a position of not knowing whether I'm plowing the same ground with whatever I say here. But I'll be brief. They've seen to that with the scheduling.

I'm also pleased to tell you that, if you haven't been told already, that today we're transmitting to the Congress our revised federalism initiative, which incorporates four major megablock grants to State and local governments. These legislative proposals represent a continuation and expansion of our efforts to return authority, responsibility, and revenue resources to State and local governments.

You know, Bernie Baruch once said something to the effect that people who believed that they could lean on government would find that when you lean on government, government begins to lean very heavily on you. And in the two decades between 1960 and 1980, we saw ever-accelerating encroachment by the Federal Government on State and local prerogatives. Narrow and restrictive Federal grant-in-aid programs grew from less than 50 to more than 500, pervading such Federal—or such obvious local concerns as rat control and sewer extension. The cost of these programs exploded from around $7 billion in 1960 to $95 billion in 1981. And the Federal Government had too much control.

The programs lacked flexibility, the regulations were restrictive, Federal mandates were depleting State and local treasuries. Expenditures were being made for programs that weren't really needed, in particular, communities and localities. State and local officials began calling for a reordering of priorities and a sorting out of responsibilities among various levels of government. Well, we're attempting to address those concerns.

In '81 we were successful in consolidating 57 categorical grant programs into 9 block grants. Our regulatory relief effort, directed in large part to removing regulatory manacles which bind State and local governments-this effort continued in 1982 with the enactment of the Job Training Block Grant and the Urban Mass Transit Block Grant.

The legislative proposal that I'm sending to Congress today will contain four megablock grants, and they are a Federal-State Block Grant, a Federal-Local Block Grant, a Transportation Block Grant, and a Rural Housing Block Grant. It incorporates the input that we've received from State and local officials during the course of the last 2 years. It'll provide stable and certain funding sources for State and local governments by guaranteeing funding for the programs at levels enacted for fiscal year 1984. And it's not a vehicle for budgetary savings.

It'll provide greater flexibility to State and local officials. It'll provide a pass-through to local governments for programs which have historically gone to the States but where the States have passed through the funding to local governments. It provides special protections for revenue sharing and the entitlement portion of the Community Development Block Grant program. The program will be phased in to avoid dislocations on the State and local governments.

And I don't know whether, when George was talking to you up here—I'll go back a paragraph or two, when I was talking about regulations. I think you know how much has been achieved under his leadership in a task force there to reduce the paperwork and the regulations that have been tying your hands so much, and that effort will continue. There are still too many.

Now, that, in short, is the package that we're sending up, and I'm asking Congress to give the legislation its immediate attention.

Working together, you and I can make government work more effectively for all Americans. I think one of the great things that probably came out of the traumatic experience of the Great Depression was, with the best of intentions, the Federal Government moving in where they saw these great emergencies, then made what was supposed to be temporary medicine for the illness permanent medicine, even after the patient got better. And the result was a drastic distortion of the historic relationship between State and local entities and the Federal Government. And we want to get back to what was the original purpose and the original idea of our separation of government levels in this country, because I think they're unique in all the world, and they were the greatest guarantee of individual freedom that this country has ever known.

So, we're going to keep at that, and I thank you all for being here.

[At this point, reporters covering the President's appearance at the briefing asked him the following questions as he was leaving the room.]

Q. Mr. President, is there a scandal brewing over at EPA, sir?

The President. What?

Q. Is there a scandal brewing over at EPA?

The President. No, there's one brewing in the media that's talking about it. [Laughter]

Q. Are you still 100 percent behind Mrs. Burford?

The President. Yes.