Plenary Session Transcripts

Governors Attending:

Guests:

Discussion Subjects:

• Agriculture (AG) – feed grain programs and agricultural transportation system deficiencies; state and federal efforts to expand agricultural exports; and a report of the Subcommittee on Range Resource Management
• Community and Economic Development (CED) – rural policy; urban policy; regional commissions; and Economic Development Act (EDA) reauthorization
• Criminal Justice and Public Protection (CJ) – state crime control initiatives; the relation of state initiatives to the Law Enforcement Assistance Administration (LEAA); other state initiatives in criminal justice and public protection; the Model Uniform Product Liability Law; and the Subcommittee on Disaster Assistance and the report of the 1978 emergency preparedness project
• Executive Management and Fiscal Affairs (EM) – the economy and the federal budget; a balanced federal budget; and the FY81 budget
• Human Resources (HR) – committee priority issues; and a report on the work of the National Commission on Unemployment Compensation
• International Trade and Foreign Relations (ITFR) – committee priority concerns
• Natural Resources and Environmental Management (NR) – implementation of the section 601 energy impact assistance program; review of Clean Air Act amendments and solid and hazardous waste issues; and review of water issues
• Transportation, Commerce and Technology (TCT) – NGA transportation priorities; and state initiatives in transportation
• Other Governors' Sessions – Special Seminar on The Governors and International Trade: Key Policy Issues for 1979; a briefing for governors on the international fuel situation and energy emergency contingency planning; and a meeting of the NGA Executive Committee and standing committee chairmen
• Plenary Session Discussion Subjects – the state-federal partnership in a period of fiscal restraint; procedural issues associated with consideration of proposed constitutional amendments to control federal spending; national energy policy and program development; hazardous waste management; and attacking inflation

Points of Interest:

It was noted that NGA had just established a new Committee on International Trade and Foreign Relations, partly in response to increasing demand for state involvement in the promotion of U.S. exports.

Introducing a discussion of federalism, Governor Richard Snelling of Vermont noted that states managed on their own prior to 1916, given that money coming into the federal treasury was spent almost exclusively for federal purposes. But all that changed with passage of the Federal Highways Act of 1916, which was designed to ensure uniform federal standards for highway construction. This pattern of establishing federal uniformity, which later extended to education, employment security, and welfare, accelerated until the late 1970s, when 17 percent of the federal budget went to state and local governments.

But Governor Snelling added that a new era of federalism was beginning, triggered by the need for controls on spending. Accordingly, the National Governors' Association Management and Fiscal Affairs Committee had asked each Governor to evaluate the importance of federal programs in their states and to suggest where budgets could be reduced without harming programs. Among the suggestions NGA received were to continue the consolidation of federal programs, to adopt federal legislation to eliminate redundant and overlapping paperwork requirements for grant applications, to enhance the Administration's review of the impact of new federal legislation on state government, and to seek advance appropriations for such things as construction programs so as to prevent inflationary cost increases that accompanied delays in the receipt of federal dollars.

Also discussed was the potential for a constitutional amendment to balance the federal budget. U.S. Senator Henry Bellmon argued that responsibilities for national defense, full employment, and economic stabilization demanded greater flexibility than was required of other levels of government, and that a balanced budget amendment would simply increase incentives for Congress to enact off-budget programs such as loan guarantees.

James McIntyre, Director of the Office of Management and Budget, pointed out that the growth rate in the federal budget for FY80 was 7.7 percent, compared to an average of 12 percent for the previous five years. In addition, nearly 90 percent of the increase in the FY80 budget over FY79 was for entitlements that could not be controlled. At the same time, McIntyre acknowledged that consolidation of certain programs—which the Governors supported—would be difficult to achieve in the face of political pressure on members of Congress to maintain individual "pet" grant-in-aid programs.

U.S. Representative Peter Rodino, Chairman of the House Judiciary Committee, asked to address the Governors to urge that they give careful consideration to the implications of a balanced budget amendment to the Constitution. He told them that his committee was planning hearings on the subject, and emphasized the need for calm and deliberation.

In the wake of the OPEC (Organization of Petroleum Exporting Countries) oil embargo, energy-related issues remained of grave concern to the Governors. They talked about the need for greater conservation efforts, the possibility of moving more oil along the Alaska pipeline and out of the strategic reserve, the pros and cons of siting new coal mines, and the safety of nuclear energy. With respect to coal, Energy Secretary James Schlesinger emphasized that primary responsibility rested with the states for the siting of new coal-fired utilities, yet the time it took to acquire needed permits from states had risen. Schlesinger suggested that states work with the federal government to shorten those times. Representative Morris Udall of Arizona argued that safety wasn't the primary cause for delay in the use of nuclear energy. Rather, it was both a question of whether nuclear energy would ultimately be less expensive than coal and other alternatives, and concern over what would be done about nuclear waste.

Douglas Costle, Administrator of the U.S. Environmental Protection Agency, said that industry produced 40 to 45 million tons of hazardous waste annually, 90 percent of which was handled under practices that would not meet new federal standards. He went on to say that controlling such a large volume of waste would involve between 270,000 and 300,000 waste-generating facilities, 10,000 transporters, and 30,000 off-site storage or disposal sites. The greatest impediment to controlling hazardous waste was that the public did not want it managed in—or passed through—their communities.

Costle said that the Resource Conservation and Recovery Act (RCRA) gave states the predominant role in managing waste. But industry, which created much of the problem, needed to contribute to its solution. Consequently, legislation was being proposed to create a fund—based on a fee assessed on generators of waste—to help finance damage control.

Memorable Quotes:

Peter Rodino, Chairman of the House Judiciary Committee, said the following about the movement for a constitutional amendment to balance the federal budget: "What we need now is careful study and deep thought on this issue. We need to ask the reflective, responsible questions about the impact of the movement…and not lock ourselves into a fixed pro or con position now. We are all aware that we are faced with a proposal of enticing, apparent simplicity: Balance the Budget. Those three words fit with precise alliteration into newspaper headlines. They are words which, if uttered without qualification or question, probably mean public support, votes, reelection and—perhaps for some—election to higher office…Presently, the legislatures of about 25 states have called for a constitutional amendment to balance the federal budget…However, a deeper look…reveals a lack of uniformity of approach. Many of the petitions from the states…have called for a constitutional convention to achieve that purpose. Several of the states which have acted have not called for a convention…a growing number of leaders are suggesting that there is perhaps a simple way to satisfy such an amendment: slash or eliminate the federal funds now going to the states…But the danger in all of this—this climate of simplification, urgency, and tension—is that we might be tempted to rush pell-mell into a decision without even being aware of the profound consequences…In 1848, Abraham Lincoln, speaking about the ‘general proposition of amending the Constitution,' said: "As a general rule, I think we would much better let it alone. No slight occasion should tempt us to touch it. Better not take the first step which may lead to a habit of altering it…""

In response to Congressman Rodino's statement on a constitutional amendment to balance the federal budget, Governor Albert Quie of Minnesota said: "I know it is fraught with all kinds of consequences and fears, but…the people are feeling as strongly about federal government now as they did about the Government of England at the time of the Revolution."

Congressman Mo Udall of Arizona, Chairman of the House Interior Committee, said: "…we were told in the Ford Administration that by 1990 we would have something like 500 nuclear plants. For the past three years, I think there have been one and maybe two nuclear plants ordered…It has always been believed one of the big problems with nuclear [energy] is safety. This really isn't the reason nuclear is on hold. You have got 500 years now, reactor years, of operation. It is as though you started a nuclear reactor when Columbus landed here and it was still working safely and not a single person had been killed or injured. It isn't safety that is holding it back. Nuclear is being held back by two things: One is doubt in the minds of utilities about costs. Nuclear was always billed as cheap energy…[but] there is now some question…whether nuclear is really cheaper than coal with all the extra grief you get when you go the nuclear route…But the main thing [is] a feeling on the part of the public that we are doing something about nuclear waste…And the plain fact is that not many more nuclear reactors are going to be built until we grapple with this problem and come up with an answer."

Selected Policy Positions Adopted:
(1) Urging consolidation of community grant programs, and seeking to improve efforts to simplify and provide advance funding for rural development programs; and (2) reaffirming the Governors' support for deliberate, thoughtful effort to curb federal deficit spending.