Plenary Session Transcripts

Governors Attending:

Guests:

Discussion Subjects:

National welfare reform: President Carter’s proposals; the state role in economic growth and development; action on the report of the Committee on New Directions for the National Governors’ Conference; tour of auto plant; potential fuel shortage in the coming winter: proposals for action; state and federal disaster assistance: proposals for an improved system; state-federal initiatives for community revitalization; work sessions with state, local, and private officials; and overcoming roadblocks to federal aid administration: President Carter’s proposals

Points of Interest:

Joseph Califano, Secretary of the U.S. Department of Health, Education, and Welfare, talked with the Governors about the welfare reform plan proposed by the new Administration of President Jimmy Carter. The plan, known as the Program for Better Jobs and Income, provided that states would operate employment programs to help people find both private- and public-sector jobs. It would create special public jobs and training positions, expand the Earned Income Tax Credit, and create work requirements for single individuals, childless couples, and family heads with children seven years of age or older. The program also proposed to consolidate Aid to Families with Dependent Children (AFDC), Food Stamps, and Supplemental Security Income (SSI) in a single cash-assistance structure. The Administration planned to separately address the question of reforming Medicaid.

The Governors' Association had adopted its own set of principles for welfare reform in 1976, followed by a more detailed set of recommendations that helped provide input into the Administration's proposals. The input had in turn resulted in such provisions as a major deduction for child-care expenses and the option for state participation in administration of the welfare system.

Among the concerns raised by Governors during discussion of welfare reform were that: (1) there be a national minimum payment level with variations in state supplements to reflect regional differences; (2) the plan to develop jobs at the local level not leave Governors without sufficient authority; (3)separate consideration of Medicaid could be problematic if health care reform was delayed in Congress; and (4) the plan would give some states a higher percentage of relief than others during transition. With respect to the last issue, Secretary Califano explained that states slated to receive more money during transition currently offered higher benefits and served a broader range of eligible recipients and/or a larger number of recipients.

Governors also discussed economic growth and development. They had endorsed calling a White House conference on balanced national growth and economic development, to focus on such concerns as: what public policy should be with regard to locales with declining or lagging economic bases; what the federal role should be in assisting local governments with depleted revenue bases and inadequate public services; what employment opportunities should be provided for people with mismatched skills, inaccessibility to jobs, or other structural problems; and how government policy should be adapted to address problems that cut across jurisdictional boundaries and levels of government.

Juanita Kreps, Secretary of the U.S. Department of Commerce, told Governors that current economic policy owed its origins to post-World War II pursuit of maximum employment opportunities and growth in real income. But conditions in the 1970s required that policy be broadened to include such issues as the environment. In addition, national economic policy had traditionally been pursued through the use of monetary and fiscal methods designed to expand or contract demand. But given the more recent focus on the scarcity of natural resources, the concern with demand must shift to recognition of supply realities. Finally, policy that had previously relied on national statistics needed to be changed to consider regional diversity.

Also discussed was the potential for fuel shortages during the coming winter in the event of terrorism or another oil embargo like the one imposed against the United States in 1973 by OPEC (Organization of Petroleum Exporting Countries). During an earlier White House conference on energy, the consensus of Governors had been to restore state set-aside provisions for the allocation of specific fuels in an emergency. Now, the Deputy Administrator of the U.S. Federal Energy Administration told Governors that the federal government was prepared to exercise emergency allocation powers in case of a fuel shortage, or—in an extreme emergency such as large-scale interruption of the nation's foreign fuel supply—to take more extreme measures such as gasoline rationing.

The President of the German Bundesrat spoke to the Governors about the comparisons between the federalist systems of the United States and Germany. Of note was that in Germany, the Bundesrat (or Federal Council) was the upper house, like our Senate. However, it was directly representative of the states, meaning that Germany's equivalent of Governors were members of the Bundesrat and as such could initiate federal legislation. In addition, each "land" (i.e., state) in Germany had a mission in the German capital to represent its interests.

During the discussion of policy positions, Governors debated whether—given the differences that had developed among state no-fault automobile insurance standards—they should support the potential for a minimum federal standard to be adopted, even if it recognized the authority of states to regulate the insurance industry. Governors particularly of states that had not adopted no-fault insurance were opposed to the idea of any federal interference, and those who shared this view ultimately prevailed. As a result, the policy position that was adopted made clear that national standards would not be an acceptable alternative to state action in the field of no-fault.

Memorable Quotes:

Joseph Califano, Secretary of the U.S. Department of Health, Education, and Welfare, said: "If we fail to pass welfare reform legislation in this Congress, then the present inequitable, inhumane, inadequate, and confusing system, with its hanging noose of perverse duplication, bureaucratic complexities, fraud, anti-family and anti-work incentives that leave the American taxpayer and millions of poor children twisting in the wind, will continue to be our method of providing basic assistance in this country for at least another decade."

Governor Hugh Carey of New York said: "Unfortunately, as we look at our great country today, there are not pockets of poverty but canyons of desperation in the major cities and in too many of the rural areas. The people are poor in spirit, and that is the basis for the social unrest, crime, delinquency, and the break-up of families."

Governor Robert Bennett of Kansas said: "We need to be much more energetic in the area of exports. We need to put additional funds into...the so-called Food for Peace program. We seem to have no difficulty in sending machine guns, hand grenades, airplanes, and bombs to other nations to provide them with the instruments of their own destruction, but we seem to be very reticent and reluctant to address the problems of the starving nations of the world and provide them at least with some tools for their own salvation."

Dr. Bernhard Vogel, President of Germany's Bundesrat, said this about the federalist system in his country: "...we share the American conviction that the federal structure of a state ensures an essential limitation and distribution of government powers which rules out omnipotent government...One appreciates that the price for a country's unity, desirable as that unity may be, should never be uniformity. A country can be united and still preserve the traditional variety of its constituents...I have learned that over the past few decades, your federation has extended its competence to include wide areas of legislation that used to fall within the purview of the individual states. It is much the same in the Federal Republic of Germany, where the member states, we call it the Laender, at times have to stand up to the superior strength of the federation, which often takes things too far, mainly by virtue of conditional financial support, which works like a golden restraint...the number of supporters of federalism in the free part of Europe is growing. Even in countries with a distinctly unitarian system, such as France and Italy, drastic reforms toward regionalization and decentralization are under way. For a united Europe, that is, a European union, a federal state would be the only appropriate form."

Governor Robert Ray of Iowa said with respect to potential fuel shortages: "There is another possibility: terrorism. In Saudi Arabia, there are pipelines that run through an area about the width of a city block. These pipelines carry about 6 million barrels of crude oil a day. In comparison, at full capacity the Alaskan pipeline will carry about 1.2 million barrels a day. Thus, terrorist activity alone in that region of the world could shut off the supply that we're dependent upon."

Governor James Rhodes of Ohio said the following about the proposal that was adopted authorizing the association's Executive Committee to take positions inconsistent with existing association policy in order to respond to federal legislative or administrative actions: "We've got to get away from the milquetoast approach in the National Governors' Conference. We raise ourselves from the dead every six months. We've filled more wastepaper baskets in Washington than any other organization. This resolution makes the National Governors' Association alive, alert, and aggressive, and that's what we need...If any governor disagrees with the [Executive Committee's] stand, he's going to say so in the local paper. But in the meantime, we have to have some way to do this, because the cities do, the counties do, everybody else does. We have to update our positions on issues that affect all of us, and we can't wait to do it every six months. We have resolutions here that will mean nothing to a Congressman in six months for the simple reason that times change."

Selected Policy Positions Adopted:
(1) Calling for a portion of any energy taxes from transportation fuels to come back to state transportation programs either directly or through preemption (2) proposing consolidation of more than thirty federal-aid highway categories into a total of four: interstate, urban, rural, and safety; (3) supporting regulatory reform of the aviation industry to remove artificial and unnecessary regulations and economic constraints; (4) calling for the inclusion of inland waterways and the intracoastal canal system in national transportation policy plans; (5) encouraging all states to adopt a toll-free system for calls to state government and supporting the integration of all interstate telephone rates into a national rate pattern; (6) urging states that without no-fault insurance to continue to examine available options and to achieve maximum interstate coordination in any actions they might take; urging each state to consider the model no-fault legislation drafted by the National Conference of Commissioners on Uniform State Laws and by the Council of State Governments; and expressing the view that national no-fault would not be an acceptable alternative to state action; (7) commending the (Carter) Administration for its efforts in the area of welfare reform and for working closely with state and local governments throughout the development of its welfare reform plan; (8) recommending that the federal government increase its financial commitment to the implementation of the Education for All Handicapped Children Act; (9) recommending that federal and state tax incentive plans be instituted to encourage families to save for the cost of higher education; (10)expressing the views that: the federal government should be responsible for developing the broad framework for manpower systems and that states should be given the authority to adapt federal policies to their own economic and social characteristics; federal manpower funds should be allocated to states through forward-funded, noncategorical grants; states should be allowed to play a strong role in the Comprehensive Employment and Training Act (CETA); and Congress should reimburse states for excess unemployment insurance benefit costs incurred in the recession of 1974‑75; (11) urging the federal government to develop improved community-based delivery systems for long-term care; (12) urging continued support for research, demonstration projects, and grants through reauthorization of the Child Abuse Prevention and Treatment Act; and (13) supporting legislation making it a federal crime to smuggle cigarettes across state lines.