Remarks to the Advisory Commission on Intergovernmental Relations

Thank you very much. First, Governor Winter and to all the other members of the Commission, let me thank you for your willingness to serve. I very much believe in the potential of this group, both because of the quality of the individuals on it and because of the way it's constituted, with representatives from the Federal, the State, and the local government and with both Democrats and Republicans here. I also want to say a special word of thanks to my friend, Bill Winter, for being willing to serve as Chair. He is one of my closest personal as well as political friends. When he was willing to do this, because I knew that he had spent years thinking about a lot of these issues, I felt that we had a chance to make this group succeed.

When we began to talk 2 years ago, more than two years ago now, about whether I would run for President, he and I agreed that one of the things that we needed to do was to somehow restore the integrity, the strength, the vitality of the relationships between the various levels of government.

One of the biggest problems we've got in this country today is that everybody knows that there are a lot of things that the government has to be involved in at some level, but there is a great skepticism about the ability of government to do its job, particularly here in Washington, a skepticism not without foundation, I might add.

There was a wonderful article in the Wall Street Journal the other day, talking about the attitudes of people in a town in Illinois about the health care issue. And one of the people who was quoted in the article had a one-sentence quote that I thought summarized in a way the dilemma that we all face, at least those of us who go to work here in Washington every day. The man said, "I believe in government, but I'm not sure I trust it." You know, in other words, I believe in the idea; I know that there are some things a government has to do that can't be done without the government, but I'm not sure they get done right, either because people will not do the right thing or because it won't be confidently done.

Because I served a dozen years as a Governor and worked on these federalism issues from another perspective and because I worked in a, I think, considerably less partisan atmosphere— it's just the nature of State and local government to be more problem-focused and somewhat less ideologically oriented—I think I've got a pretty good sense about what the potential is of this group to try to help us in our efforts to redefine what we should be doing here in Washington and how we can be working with you better.

The first thing I want to tell you is that I'm very serious about these issues and that I want to pursue them vigorously, thoroughly, consistently, and with the appropriate level of visibility. I'm glad to see my good friend Secretary Riley here, who also has shared the experience with Bill Winter and I—we were Governors together for a long time—and who has a good feel for these things, too.

Carolyn Lukensmeyer is here to report to you on the federalism suggestions that came out of the National Performance Review, the Vice President's reinventing Government report. He wanted to be here personally, but I asked him to go to Mexico today to deliver an important speech in the aftermath of the passage of the North American Free Trade Agreement legislation last week, and that's why he's there today and not here. But there are some important recommendations in the National Performance Review that I hope (a) will be endorsed by this group, (b) may be amplified on it, and (c) that you may have some ideas about how we can actually implement them. We get a lot of wonderful ideas up here, but there's a lot of slips between the cup and the lip. So we need your help on that.

Secondly, there are a whole series of empowerment initiatives that we have tried to take to enable State and local governments to do their jobs better by creating a different environment. The empowerment zone legislation is one. If these empowerment zones work to actually get private sector investment and public-private partnerships at the local level going in otherwise economically distressed areas of our country, then I think you will see them sweep the country. I think the Congress will be more than willing to vote more of the empowerment zones if we can prove it works. Well, that requires a level of partnership and followthrough that the Federal Government alone can certainly not provide.

The community enterprise board we've set up, designed to see what we can do to sort of push down more decisionmaking at the governmental level and to require more partnerships to build from the grassroots up, is an important thing.

I issued an Executive order on unfunded mandates which a lot of you were involved in helping me put together. Our administration has been quite vigorous in granting waivers to States for welfare reform experiments and for some health care reform experiments. I want to continue to do that, and I want you to explore with me what we can do to help you do your jobs better.

Perhaps the most important recommendation of the reinventing Government commission was that we consolidate a lot of these grants and let you fashion your own use for the Federal money that's been set aside in too many little discrete pieces for the benefit of people at the local level. So there are a whole lot of issues we can deal with.

The main point I want to leave you with today is that I haven't forgotten what it was like to be on the other end of this relationship, first. Secondly, my appointment of Bill Winter and the quality of this Commission demands that we take your work seriously. Thirdly, we actually need for you to think about what specific steps ought to be pursued in defining what the Federal role ought to be.

And let me just say one thing in closing out of respect to the Members of Congress who are here. There's been a lot of discussion in this town which will give way to reality as we move into the first budget year and as we move into next year's budget about how much we did or didn't cut spending. I asked yesterday Leon Panetta to tell me how many Federal accounts there are, you know, separate lines in the appropriations bill, where there's actually less money this year to be spent than there was last year. And the answer is 356 specific Federal accounts will have less money in this fiscal year than they did in the last year. Notwithstanding that, in the coming budget year, under the budget plan we now have, we're going to have to have significant other budget cuts in various areas.

Now, what I'm interested in doing is figuring out—and what the Members of Congress will have to help do—is to figure out within a Government Department and then across departmental lines, what is it that the Federal Government should be doing, and if not doing, what should the Federal Government be funding for you to do? And what things are we doing that may be nice but are relatively inessential at a time when we clearly have—the biggest dilemma for the Congress is this: almost every person in the Congress, without regard to whether they're a liberal or a conservative or a Democrat or a Republican, believes that we have to continue to reduce the deficit. We know that the serious efforts we've made have produced low interest rates, higher investment, housing starts, the biggest in 14 years; the beginning of this lumbering big economy coming back. On the other hand, virtually every Member of the Congress, including the most conservative Republicans, believe we are not investing enough in certain areas that prevent bad things from happening, that develop the capacity of people, and most importantly of all, help us to make this transition from a defense to a domestic commercial economy.

The great gaps in structural unemployment from California to New York and Connecticut, occasioned by the big cutbacks in defense spending, have made most everybody in the Congress quite sensitive to what kinds of investments we ought to have at the national level to generate jobs and high wage jobs.

So in order to achieve both those objectives, we have to be much more disciplined about what our job is and what your job is; about which of our programs really make a difference and which are nice but don't make that much of a difference; about how we can shift Federal spending to more investment and relatively less consumption, to make it more forward-thinking. And there is a real willingness, I think, in the Congress, to listen to and learn from the shared experiences of people in State and local government as we are forced to make these decisions. And believe me, whatever targets we do or don't adopt next time, if we just stay with the budget we've got, there is going to be an extremely rigorous and difficult budgetary process beginning here early next year. Anyone who's really studied the numbers knows that when you get beyond the rhetoric to the reality, there are a whole lot more reductions that are going to have to be made.

So on the other hand, everybody wants to increase funding in some areas. To whatever extent we are in sync with that and we are building the kind of partnership we ought to be, this country's going to be much better off. And to whatever extent you feel that the Government in Washington is doing the right thing, given its difficulties, and you can communicate that, we will collectively begin to rebuild the confidence of the American people that we're doing the best we can with the tax money they give us and in operating the Government in a more efficient and effective way.

I personally believe the consolidation of a lot of these discrete programs is very important. But if we do it, we have to find a way, and I hope that there will be candid conversations about this. I hope the Members of Congress will be candid with the State and local governmental representatives about this.

There are reasons why these programs get created in the way they do—where you have 150 separate training programs; we shouldn't, but we do—why we have all these other programs in little pieces, when it would be better if they were in one big piece and you had a laundry list of permissible things that could be done with this money. And then you would design what's best for your city, your county, or your State. And I hope we can get into exploring that, because I'm convinced, with the amount of money fairly fixed and with the demands on the money and with the differences, the drastic differences in economics from place to place, you need a lot more flexibility than you've got. But we need to be candid here about why the laws are the way they are, what the problems have been in the past, and what kind of new arrangements we can make if we're going to have any hope of implementing the reinventing Government recommendations on consolidating the grants.

So that, in short, Mr. Chairman, are some of the things that I wanted to say. I believe in the potential of this group. I want to work with you. I want to help to make sure that you have both consistent support and the appropriate level of visibility so that we send the message out to the country that we are trying to work through these things and give the American people a Government that they can not only believe in but also trust.

Thank you very much.