Remarks and a Question-and-Answer Session During a White House Briefing for the National Association of Counties

March 9, 1981

The President. Well, the Vice President and I are delighted to be here. I know he's speaking to your entire group tomorrow, but I appreciate the opportunity for a dialog with you, who are county officials, and to reaffirm that, if you haven't been told already, that we really intend a working partnership with you as we attempt to solve our nation's economic problems.

Restoring a balance between the Federal Government and other levels of government is and will continue to be the policy of this administration. And the White House Intergovermental Affairs Office, under the leadership of Rich Williamson, will be playing a key role as liaison with you. As a part of restoring the balance, we intend to establish a coordinating task force on federalism and have already been in touch with representatives of your organization to seek advice on how that task force should be organized.

In developing the economic package that -- today's the day it goes up there -- we've tried to be fair and evenhanded. We created a special safety net to protect the truly needy. And we have just one department that, as you well know -- because it's been heralded in the press a number of times -- the Defense Department, that will not be cut back. But even there, Cap Weinberger -- you can count on it -- has already identified and gone to work to make cuts of $3 billion that he believes are unnecessary in there, which, thus, reduces the net increase that we would have for the improved weapons that we think are necessary.

I know there's been a great deal of talk and your concern about the UDAG function. That has not been eliminated. It's combined into a community development support program, and we're sending legislation up to the Hill to carry that out.

With respect to payments -- if this hasn't come up this morning -- in lieu of taxes, the Department of Interior has restructured its budget authority to allow for payments in lieu of taxes for counties which have Federal lands within their jurisdictions. We feel that making payments in lieu of taxes by the Federal Government is part of a being good neighbor. Responsibility of ownership requires landholders to pay their fair share of the cost of local government, and Federal Government shouldn't be exempt.

Now, Vice President Bush will be addressing, as I said, tomorrow, and I'll jump the gun and tell you, he's in charge of a task force on regulatory relief, and I think that indicates the importance we place on that. Now, most of the attention seems to be given when this is discussed to what it's done to the private sector and to business and so forth, but you, county government, know how much unnecessary paperwork has been generated by the Federal Government, and we intend to change that.

I, having mentioned a dialog, I'd better stop having a monolog here now and whatever questions you have, be happy to field them.

Yes?

President's Advisory Committee for Women

Q. Katie Dixon, Salt Lake County, Utah. I'm chair of the elected women of NACO, and we would like to know if you are going to continue the President's Commission on Women?

The President. The President's Commission on Women -- you know, I have to say I don't know whether that subject has even come up, so I would assume that we probably are. I think so, yes, because I have -- being notorious for not supporting the amendment, during the campaign I made it plain, and I meant this very much -- having passed 14 statutes in California where, to eliminate particular discriminations that we found in State law, I said then that we are going to have liaison with the States to pursue that course and someone in the White House to direct this and to help other levels of government find, where maybe in their own regulations without their realizing, they have such discriminatory practices. And it worked just fine for us -- changing those 14 statutes.

Employment Programs

Q. Mr. President, we support your program to cut Federal spending, especially the CETA/PSC jobs, but we'd like to know what kind of programs you're proposing to take the disadvantaged off of welfare and to give them meaningful work.

The President. Well, one of the things that we're talking about now is based on something we did in California in our welfare reforms. As we give the States more authority in administering these programs by way of block grants, we are working on legislation right now that would further give flexibility to the States and allow them to require able-bodied welfare recipients to work at useful community projects in return for their welfare grants. And in California, even though the 1974 recession was coming on -- in the '73, '74 recession -- and unemployment increasing, in only 35 counties of California would they permit us to have an experiment of that kind. And we funneled 76,000 people through that program into private enterprise jobs.

What we did was not only require the work in useful community projects but then we assigned -- and I throw this out for a suggestion -- we assigned people from our labor department, State labor department, as what we called job agents to be given a list, a group of these people, to keep an eye on them, and then to go to work to see how quickly, based on what they saw of their abilities and so forth, they could move them out into private employment. And as I say, it was 76,000, and we think that this was the best thing that we had found in all the years that we were battling with this particular problem. So, if we can get that through, that will be one of the further flexibilities that you will all have. And, remember, we only had it in 35 counties. They wouldn't even let us have it in the great metropolitan areas like San Francisco and Los Angeles County.

Budget Reductions

Q. Mr. President, I don't know if sitting in the back is an advantage or not, but first of all, we appreciate very much your taking time to visit with us this morning. I'm Bob Eckels from Harris County. In the conference which we had with you, several of us, a few weeks ago, we mentioned two things: One was the creation of the position which Rich Williamson is doing now, and we appreciate that very much and look forward to working with him. The second thing that we were looking for was as these cuts are instituted, that they be done in a slow fashion, not a cold turkey, necessary situation, but allowing the local governments time to find a method for either substitution or elimination of the program without the catastrophic political effects that it can have on the local offices. Has anyone in the staff had an opportunity to review the time factors in coming into this?

The President. I'm sure that is being considered. I can't say that I participated in a meeting where that has been discussed, but I'll tell you now, I will look into that, see what I can find out about it. Because having been back there at the State level, I know what you mean.

Mass Transportation

Q. Al Delbello, Westchester County, New York. We're having a great deal of trouble in sustaining our mass transit system in that metropolitan New York area, particularly the commuter rail and the commuter bus services. I'm very unclear with regard to the direction you will be taking on commuter rail subsidization programs in the near future.

The President. Well, I have to tell you that I know, I can't give you the detail on all that -- I know, however, that there are going to be cutbacks in that, and some features will be incorporated in the block grants for your own discretion about using those.

Federal Loans

Q. Mr. President, I'm Jack Brock from eastern North Carolina, and I understand the administration is going to give us a 10-percent interest on Farmers Home Administration money. It's been 5 for many years and most helpful. I wonder if there would be any chance of the administration reconsidering maybe 7 or 7\1/2\ percent money. This has a great effect on rural homes and our water and waste water treatment systems, and this money does flow back. I would like for the President, if you would, to respond to those interest rates.

The President. Let me say this one thing on those loans and where we felt that we had to come up closer to the market rate on them. At the time, the original 5 percent was in keeping with what was pretty much the private interest rate, and no change was ever made. Now, the situation for us and for all the citizens is this: that when we approve those loans at that lower interest rate, the Treasury Department doesn't have any money to loan, running in a deficit situation, it has to go out into the market and borrow the interest at the high-interest rate and then turn around and lend it at this lower rate. And, perhaps not in this particular program, where homes and things are involved, we've actually found that there are some people that have discovered that it's just fine to get one of those loans, and then they go around on the other side and buy the government securities at the higher rate. And it makes a nice circle and a profitable one for them.

But we feel that what we're doing -- whether that's the right figure or not, I'm sure that will be discussed and debated on the Hill -- but to bring it up, because it always had been pretty much consistent with the going rate of interest. And the main purpose of it was not to give low-interest money; it was for those people that did not have the assets that they would need to cover going into the private fund market. Well, that provision still remains, but we believe that it is fair to bring that up closer to the going rate.

Agriculture Prices

Q. Mr. President, I'm Ray Nelson, chairman of the Rural Affairs Committee of NACO, from Kansas. And my biggest concern for the rural problem or the rural counties is that for the producers of food and fiber, the price has been -- continuously since the first of the year, been going down. All the commodities and the prices of everything that they purchase has been going up considerably. We've had 10-percent and probably and average of 12-percent increase in everything they buy. And they feel that we sure need to open up some export markets or something to get this thing moving. For instance the price of wheat has dropped 75 cents since the first of the year back at the local elevators, and this is causing a lot of sale bills to go up on the wall. And I'm very concerned about the younger generation that's just trying to get into the operation of farming.

The President. Sir, I wish right now that I had John Block here, because we've got a working farmer today as Secretary of Agriculture, and he's completely aware of these problems. And all of us have been made aware that in food pricing, with all of the talk of prices up and down -- it's an amazing thing that what happens from after it leaves the farm until it gets to the customer at the supermarket shelf, the fluctuations in price and so forth. But it hasn't been reflected for the farmer. And there's no question about him probably being caught the worst in the cost-price squeeze of anyone in this inflationary time.

I do a little ranching myself out there in California, and I realized one of the real problems of the farm when the second-hand 1953 tractor, which I bought 20 years ago for $1,200 -- someone in the tractor business told my wife that they thought I really ought to have something better than that, and they'd make me a great deal. So, they sent a man up, and he did. He offered a great deal on that $1,200, 20-year-old, 1953, secondhand tractor. He'd give me $4,000 in trade-in, and then it would only cost me $13,000 more to get a tractor. [Laughter] I'm still driving the 1953 Ford.

But I can tell you that we are -- and opening up foreign markets is one of the things where we think government really does have a place for involvement.

Funding of Local Programs

Q. Bob Honts from Texas. Most local governments harvest most of their revenue from a regressive and inflexible property tax. We don't have a lot of room to go. We hear the good news: You're going to cut the budget and balance it at the Federal level. But the bad news is that it looks like those programs are headed our way, and we don't really see the revenue sources that were supposed to come with them yet.

The President. We think that the block grants and the flexibility they give you is going to be more helpful than we realize, because a lot of the cuts that are being made in the overall size are in administrative overhead that was accumulated from this end, and giving you the flexibility to set your own priorities without the rigid requirements of the past would help. But I only tell you what -- and we can get over this hurdle and get this government back down to the size it should be and start.

No, I have a dream of my own. I think block grants are really only an intermediate step. I dream of the day when the Federal Government can substitute for those turning back to local and State governments the tax sources that we ourselves have preempted here at the Federal level so that you would have those tax sources.

Economic Development Grants

Q. President Reagan, I'm Tracey Owen from King County, Washington, president of the Western Region and chairman of a four-county district in economic development. You had made reference to UDAG being integrated with, perhaps, an expansion block grant. Is that similar approach in mind for at least funding of those things that are in the pipeline and had the communities' expectation raised that they would get funding for it -- basic economic development grants?

The President. I don't know that I have the answer to that. We're dealing right now, of course, with 1981. We're making some cuts, but as far into the year that we are, it isn't anything like the cuts that we intend for the 1982 budget. So, I can't believe that there would be too much of a change for things that are already in the pipeline at all. You have a better answer to that?

Mr. Williamson. Yes, if I could just comment on that slightly. [Laughter]

The President. He's been working on it firsthand.

Mr. Williamson. That's right. See, eventually it'll percolate up to the man, but the work that's being done, that Ed Meese mentioned earlier with Dave Stockman, the UDAG function -- the existing grants that have been committed and those applications in the pipeline would be funded enough within the ceiling that the President has established so that the administration would meet the existing commitments and be able to process the commitments that are now in the pipeline.

Q. Okay, I understand that with regard to UDAG. I think that was explained to the mayors or the city people when they met. I'm talking about the Economic Development Administration's funded programs that have been so important in helping to be the seed money for long-term productive employment in the private sector, because we know for every 1 percent of unemployment, it's going to cost the Federal Government maybe upwards to $25 billion a year. And I have a report of our four-county district which indicates that the seed money has been less than $1,000 per job created from the EDA grants. And there's about 15 projects that are in the pipeline that have been prioritized locally, and I'm sure that's true all across the country. And our concern is that they might not be able to all be funded out of the '81 allocations, and it might need to run into '82 before it's phased out.

Mr. Williamson. Well, just to respond to that quickly, and I'll sit back down. [Laughter] The task force that Ed Meese has together with Dave Stockman and Malcolm Baldrige and Sam Pierce working on the details of the community development support program for, hopefully, as soon as possible, to pass on to the President -- that has been discussed with respect to the economic development grants and, in fact, met with the mayor of San Juan with respect to a particular problem they had just last week, and we're attempting to get a resolution. The only one that there's been a final signoff within the task force for recommendation to the President has to deal with the UDAG aspect. But there are three other aspects that will go into the larger block grant community development, and there's not been a resolution. It would be very helpful if at the end of today you would pass that on to me, because no decision finally has been made yet.

The President. Let me just say, if I seem to be flying blind here, it isn't that. We've had hours and hours of Cabinet meetings -- and the major issue on each one of these cuts does come there, and all of the input and sometimes pro and con within the Cabinet discussion -- and based on all of that input I finally make a decision. But coming from 739 billion down to 695, I have to tell you honestly, some of the details on these things I can't remember. I just have to assume we've made the decision with the information that we have.

Interior Secretary Watt

Q. Mr. President, Cal Black from San Juan County, Utah. I don't have a question, but I want to compliment you on your appointment of Secretary of Interior, Jim Watt, and just encourage you to support him. Thank you.

The President. Well, thank you very much. He's a good man.

Programs for Minorities

Q. Mr. President, Chuck Williams, chairman of the National Association of Black County Officials. Since the thrust of the block grants has been directed toward the States, what kind of direction is going to be provided to the States to make sure that they filter down through local governments kinds of moneys that we need to provide the programs that we're most responsible for?

The President. Well, very obviously, I think I can say -- if I interpret what might be your concern there -- obviously, the State government, who wants to give all the flexibility it can, is certainly not going to hold still for anything being used at a different level of government in a discriminatory fashion. We won't permit that. And I think we have a right to say that.

So, I have every confidence that the flexibility that is given will be one that will allow the utmost in economies and so forth. But that will not allow any retreat from where we are and what we are and what we want to do for all the people of this country.

Mr. Williamson. One more question and then -- --

The President. Well, I was going to take this lady's question.

Education Programs

Q. Elizabeth Cofield, from Raleigh, North Carolina, county commissioner. And I haven't heard anything pertaining to education, and I'm very concerned about that. And I know that education in the terms of grants and loans have to suffer just as all others. But I would like to encourage you, Mr. President, to encourage those who will be making the reduction in loans and grants and other titles to look at it very carefully so that we don't throw the babies out with the wash water. Otherwise, we won't have anyone to be in this room 2 years from now.

The President. I couldn't agree more, and I assure you, we're not going to do that. Now, I just heard someone on the air yesterday and talking about tremendous cuts in educational funding and so forth. What they forget is that Federal funding of education only amounts to 10 percent of the cost of education, and they don't make that plain. This man was talking as if, why, there's going to be a 25-percent cut in the overall support for education. Well, 25 percent of 10 percent is 2\1/2\ percent. And we feel that a lot of the Federal Government's aid to education has resulted in unnecessary interference in education, which, in reality, has probably undone a lot of the help that the money would be by forcing added expense on the schools.

I had a college president tell me the other day that the paperwork, the administrative work required now for government help in his college has made his administrative cost for that go from $50,000 a year in his campus to $650,000 a year. Now, that'd hire a lot of professors that could teach. And so, we feel that we're not going to do anything to hurt education, and we think we are going to put it back in the hands of people that are closer to the scene and out of here. And I'm confident -- we have an educator as the Secretary of that department right now. So, believe me, education has a good voice in our circles.

Mr. Williamson. Mr. President, this is Roy Orr. The president of the association will make a brief comment, and then I think we're going to have to move you on to your next appointment.

The President. All right.

Mr. Orr. I just want to say, Mr. President, on behalf of the National Association of Counties, that we appreciate you very much for taking your time. We realize that it's tough to face this many people -- the directors of our national association, that reaches from the south to the north, to the east, to the west -- and have all the answers that everybody wants. But we assure you that we want to be a good partner, and we will. And you thrill us when you say that you're going to return some of the authority back to the States and back to the local authorities and back to the counties, where we know that we're the government that's closest to the people.

You know, when you have a pothole in a road, they don't ask the President of the United States to patch that pothole; they ask a bunch of these people. So, consequently, we feel that we do know more about -- whether it be Travis County or Dallas, Texas, or Sacramento, California, whatever -- what it takes to please the people and to serve the people than maybe some bureaucrats in Washington. And we appreciate that partnership. The only thing we ask is that if it's not a good deal for both, it's not a good deal. That's a good county statement -- --

The President. That's right.

Mr. Orr. -- -- that we make. And we tell our State legislators, ``If you're going to cut us, don't mandate us, because that's not a real good deal.''

The President. No.

Mr. Orr. And we've often said that we can do more with half the money than the Federal bureaucrats can do with all the money, and is an alternative we've even talked about, is that we might even say, ``Mr. President, cut all the grants and give us half of what you cut in general revenue sharing, and we'll serve more people than they're serving [with] all the rest, and you cut out a bunch of bureaucrats.''

The President. Thank you. This is what we're counting on.

Mr. Orr. I want to take this minute to introduce my officers. Do you know Sandy Smoley, from the Farmers' Committee?

The President. Hi, Sandy, hi. How are you?

Ms. Smoley. Hi. It's nice to see you.

The President. Nice to see you.

Ms. Smoley. Thank you very much.

Mr. Orr. And this is Dick Conder, from North Carolina, our first vice president; Bill Murphy, from New York; and you know our great hired hand, Bernie Hillenbrand.

The President. I sure do. You bet. How do you do?

Mr. Orr. Again, we appreciate -- we'll be looking for the Vice President tomorrow, and we appreciate it.

The President. Well, thank you. You've inspired me with that pothole. I'm just going to take one second and tell you my first -- [laughter] -- as a small boy, my first experience with hearing about county problems.

My brother, who was just a few years older than me, had gotten a job, he and another teenage kid, sitting on the back of a truck. And there was a fellow running for the Illinois State Legislature, and he was campaigning. And while he was speaking in each town, at outdoor rallies, they were to get off and pass out the leaflets in the town. He came home that night scared to death. They'd gotten out of town under a shower of rocks and paving stones and so forth.

It seems that this State legislator -- they were building a State highway in Illinois at the time, and his district crossed a county line into two counties -- and in each county he promised them that the State highway was going through their county. [Laughter] But my brother and the other kid got the leaflets mixed up and passed them out in the wrong county. [Laughter]

Thank you all very much.

Note: The President spoke at 11:33 a.m. in Room 450 of the Old Executive Office Building.