Remarks at a White House Briefing for State and Local Officials on the Economic Bill of Rights

 

July 22, 1987

 

Well, thank you all, and welcome to the Old Executive Office Building. We have officials here today representing States from Maine to California, and I want to thank you all for taking the time out from your busy schedules to join us. But, Governor Orr, ladies and gentlemen, I have to tell you that wherever Americans from different States -- or whenever -- get together, I always find myself enjoying the sense of diversity and the different outlooks, different approaches to problems, and even different accents.

 

And would you be surprised if I told you that reminded me of a story? [Laughter] It has to do with a farmer from Vermont who was talking with a rancher from Texas. ``And just imagine,'' the Texan boasted -- he'd seen the Vermont farm there -- he said, ``I can get in my truck in the morning and drive all day and still never get to the other side of my ranch.'' The farmer from Vermont said, ``Yes, I know; I've got an old truck just like that.'' [Laughter] Well, to all of you here today from Texas, I don't mean to tell stories at the expense of your great State. I'll tell you the truth; I'm a little annoyed about what happened the last time I visited Texas. Air Force One landed at the airport, I got off the plane, and a Texas Ranger asked me for my passport. [Laughter]

 

But this diversity is important, because it's one of our chief strengths as a nation. And from the first, our administration has worked to restore federalism to its rightful place at the very heart of our system of government. We shifted certain programs from Federal to State management. We reduced a large number of complicated programs involving State and local governments into a much smaller number of block grants. And today we're still working to give greater power and independence to State and local governments. As part of our effort to achieve welfare reform, earlier this week I established an Interagency Low Income Opportunity Advisory Board. And this Board will help to coordinate existing waiver authority, providing what might be called one-stop shopping for State officials seeking to try local solutions to welfare problems.

 

Earlier this month, our Task Force on Regulatory Relief, chaired by the Vice President, made its recommendations on the use of alternative fuels, such as methanol, ethanol, and compressed natural gas. This may sound like a technical issue, but it has dramatic implications for virtually every aspect of American life. You see, used correctly, these fuels can reduce pollution significantly, and the Task Force recommendations would allow States to include alternative fuels as a central part of their air quality attainment plans, if they so choose. This would prove crucial in helping a number of States avoid nonattainment sanctions and the imposition of other, more costly and intrusive regulatory burdens.

 

Perhaps the most significant step we've taken to return power to the State and local governments has been our effort to limit the growth of the central government here in Washington. Now, it's true that in the early days many of you faced difficulties as we cut back Federal financing of some State and local affairs. But since then, we've seen 55 months of economic expansion: inflation and interest rates down, the stock and bond markets up, over 13 million jobs created, and unemployment at the lowest level in just about 8 years. From your point of view, it's especially important to note that this expansion has put State and local governments in good economic shape. It's economic growth, more than anything else -- more than Federal grants and programs -- that is required to keep the finances of State and local governments healthy. Even in the large cities that demand special attention from so many of you, a study last year by the Urban Institute concluded that budgets are, by and large, in good condition. Indeed, the study found that as early as the end of 1982 America's major cities were financially better off than they had been at any time during the 1970's.

 

Well, as we've limited government here in Washington, you in State and local governments have been taking the lead on issue after issue. In Governor Orr's Indiana, we've seen merit pay for State employees. We've seen the teacher career ladder in Tennessee. We've seen job programs in Oregon, New Hampshire, Illinois, and elsewhere. And we've seen tax incentives used to promote economic growth in programs like Pennsylvania's economic revitalization tax credit. At last, power has stopped flowing to Washington and begun to flow back where it belongs: to you, in your State and local governments. In the words of the Christian Science Monitor: ``Decentralization of power could be one of the most long-lasting effects of the Reagan Presidency.'' If I'd ad-libbed that instead of quoting that I would let my name out, but -- [laughter].

 

This brings me to the reason I asked you here today, and that is our Economic Bill of Rights. You see, today all the accomplishments of these past 6\1/2\ years -- the economic expansion, the shift of power away from Washington and back to State and local governments -- all these are threatened. For make no mistake, there are those in Congress who would impose tax hikes and fatten the Federal budget still more, weakening the economy and gathering ever greater power to the banks of the Potomac.

 

Our Economic Bill of Rights would prevent this, putting in place constitutional and other changes that would make the accomplishments of these past 6\1/2\ years secure, for our own time and generations to come. More than that, the Economic Bill of Rights would affect each of you directly, giving you still greater scope for taking the initiatives so important to the American people at the State and local level.

 

The Economic Bill of Rights itself has 10 points, and I know that Ken Cribb has gone over these in some detail for you. But there are two areas in particular that I'd like to draw to your attention. First, the burden of government shall not be hidden from view. The Congress shall require that a financial impact statement accompany each bill, specifying the effect on economic growth and employment. Second, there will be truth in Federal spending. At last, Congress will specify how every single new program is to be paid for.

 

As I've said, these two points bear directly upon your work as State and local officials, for as I pointed out when I spoke to the National Association of Counties last week in Indiana, in recent years Congress hasn't been satisfied with just spending hundreds of billions of dollars of Federal funds. Congress has wanted to spend still more money, including the funds of State and local governments. And you all know only too well how it works. The Federal Government appropriates millions for this or that program, then mandates that your States or local governments participate in the program by spending millions of your own dollars or by complying with certain national standards to avoid the loss of Federal funds. Well, whatever the fancy technical explanation, what it comes down to is the Federal Government spending your money for you.

 

Our proposals would change all that. Under legislation that we'll submit shortly, whenever Congress considered bills that would impose costs on State and local governments, a statement of those costs would appear in the bill itself, not buried in some obscure committee report. Still more significant, Congress would be required to state where it expects needed State and local funds to come from, not leave you to try to explain to your constituents why you're forced to raise taxes because of something that happened in Washington. These simple measures would force the Federal Government to stop treating you like bureaucrats whose job it is to do Washington's business and start treating you with the respect that is the simple right of democratically elected officials playing a central role in the American way of government. Isn't it about time Washington put its own house in order and stopped pushing you around? [Applause]

 

But now, in closing, there's one more thought I'd like to share with you. Weeks before we've even submitted the legislation, the pundits have already begun to say of this Economic Bill of Rights: It can never be done. Well, at this point in my career, I'm used to a certain amount of skepticism. [Laughter] Back in 1966, when somebody told my old boss, Jack Warner, that I was running for Governor of California, he thought for a minute and said, ``No, Jimmy Stewart for Governor, Reagan for best friend.'' [Laughter] And then there was our proposal for tax reform, and that was supposed to be impossible, too. The trouble is it made so much sense to the American people that Congress was just forced to go along. The headline in the Washington Post read simply: ``The Impossible Became Inevitable.''

 

Well, I just have to believe that if we get away from Washington and out to the State and local levels where you live and work, that if we ask the American people whether it isn't time at last to do things like pass a balanced budget amendment, the American people will say yes. My friends, there is still a thing called common sense in America. You know, I can't help but point out to you -- maybe I don't need to remind you -- but back, oh, before all this great increase in the Federal Government's power began, born of the Great Depression, the total tax dollar in United States -- Federal, State, and local -- two-thirds of it was for State and local governments, and only one-third for the Federal Government. That's just about been reversed. You're now on the short end of the stick at the State and local level.

 

As a matter of fact, I remember a President ran for election in 1932 on the platform that he would cut Federal spending by 25 percent, that he would restore to States and local communities the authority and autonomy that had been unjustly seized by the Federal Government. Well, that's our program now. Didn't seem to work out back then. Matter of fact, it seemed to be reversed. But this is what we believe in: federalism. That is the great, unique thing that gives this country its hold on freedom and everything else. We are a federation of sovereign States. And too many people in Washington over the years have tried to make the States simply administrative districts of the Federal Government.

 

Well, don't you let that happen. And we're not going to let it happen as long as we can fight back and get it back to the federalism the way it's supposed to be. Sooner or later, that common sense I mentioned has a way of making itself felt, even in Washington. For the cause of fiscal reform, I think these are very exciting days ahead. And, again, I just want to thank you all for being here and letting me get this off my chest to you. And if we all stick together, it's going to have to happen in spite of some objection from Capitol Hill. [Applause] Thank you all very much.

 

Somebody brought a speech in to my desk last night, and it was one that I'd made in 1964, before I ever thought I would be in public life. But I was out traveling the mashed potato circuit -- you know, in Hollywood, if you don't sing or dance, you wind up as an after dinner speaker. [Laughter] And I was pretty interested, I had kind of forgotten about this. In those days I'd prepare my own words I was going to speak. But I saw one that was criticizing the Federal Government in that speech. And one little incident you might enjoy. I had found an actual incident of a man in Washington who sat at a desk, and his job was receiving papers that came from various areas, reading them and seeing where they were supposed to go, initialing them and sending them on to the proper department and agency. And then one day he got a paper, he did that, he sent it on. And 24 hours later it came back to him. It was a classified paper -- says, ``You weren't supposed to read this. Erase your initials, and initial the erasure.'' [Laughter] Well, we'll get things like that all stopped one of these days.

 

Again, thank you. God bless you all.

 

Note: The President spoke at 12:59 p.m. in Room 450 of the Old Executive Office Building. In his remarks, he referred to Indiana Governor Robert D. Orr and T. Kenneth Cribb, Jr., Assistant to the President for Domestic Affairs.