Plenary Session Transcripts

Governors Attending:

Guests:

Discussion Subjects:

Discussion with President Richard M. Nixon; federal government reorganization; revenue sharing; and gubernatorial-congressional relations

NOTE: President Nixon met with Governors before the opening plenary to discuss revenue sharing.

Points of Interest:

Requesting support for President Nixon's plan to reorganize the federal government, John Connally, Secretary of the Treasury Department, told Governors that in the two decades since federal reorganization had been meaningfully debated, the cabinet had increased from 9 to 12 departments, the number of principal agencies had increased from 27 to 41, the budget had increased from $40 to $200 billion, the number of programs had increased tenfold from 140 to 1,400, and the number of federal employees had risen from 2 million to 2.7 million.

John Ehrlichman, Assistant to the President for Domestic Affairs, presented details of the President's plan for revenue sharing. "General" revenue sharing would total 1.3 percent of the nation's individual income tax base, distributed to the states under a per capita formula. Money was to be given by states to local governments in accordance with a pass-through formula developed by the National Governors' Conference, the National League of Cities, and the National Association of Counties. "Special" revenue sharing would represent the consolidation of categorical programs in six areas: education, rural development, urban development, manpower training, transportation, and law enforcement. Distributions formulas for special revenue sharing would vary by program area, designated for pass-through by state to local governments based on need.

Although NGA had not taken a position on special revenue sharing, the association and six other state and local government organizations were unanimous in supporting the following principles for general revenue sharing: (1) it should be a percentage of the federal income tax base; (2) it should be a substantial amount; (3) there should be a continuing and predictable annual commitment; (4) revenue should be for a general purpose of state and local governments; (5) revenue should be unrestricted as to use; (6) revenue should be allocated to states on a formula basis; (7) states should share their distribution with local governments in accordance with a prescribed formula and process; and (8) groups that endorsed the concept would work together.

Memorable Quotes:

John Connally, Secretary of the Treasury, said this about the growth of the federal government in the previous two decades, during which there had been no serious debate about reorganization: "…we have gone from nine to twelve cabinet departments. We have gone from twenty-seven to forty-one principal agencies of this Government. We have gone from a Government that employed about two million people to a Government that employs about 2.7 million people. We have gone from a Government that had a budget of forty billion dollars to a Government today that has a budget of two hundred billion dollars. And we have gone from a Government that had approximately 140 different programs and agencies to a Government that has over 1,400…I submit to you…it is not a question of the substance of the programs that have been passed that the American people are upset about. It is the manner of delivery; it is the administrative monstrosity that is now hung around the neck of this country."

John A. Volpe, Secretary of Transportation, said: "…I know that some of you may have heard of a plane called "Supersonic Transport"…this affects 44 States…by way of the various components and subcontractors that are involved…we are not asking for the construction of a fleet of two or three hundred Supersonic Transports—SSTs—we are only asking for the construction and testing of two, and instead of calling them prototypes, we call them experimental test planes because that is exactly what they are. We are just as anxious about the environment as anybody in this nation…This program has been dissected and bisected more than any program I think this country has ever undertaken, including the ABM [anti-ballistic missile], and that got a good going over, as you all remember…I think it is only [one] chance in a thousand…that when the plane is tested…it is found not to be environmentally accepted, or it is found to be economically not viable, [and if so] I would be the first one to say to the President, "Mr. President, I think you ought to scrap it." We are now three-fourths of the way down a road that [was] started by one President and carried on by three more Presidents…And I hope that each of you will take a good strong look at this before you pass judgment on whether or not you want to allow a Supersonic Transport to land in your State…As of today, I can submit to you that we now have the evidence that indicates to us that the Supersonic Transport can be built with no more noise and at the same levels of 108 decibels that we have demanded for the subsonic…I hope that the Governors of the respective states, particularly on the border, the East Coast and the West Coast, where these planes probably will be landing mostly, at least in the initial stages, would consider that it would be best to wait until the evidence comes in before we make a decision whether or not to allow these planes to land…" [NOTE: Work on the design of a passenger aircraft that could break the speed of sound began in the 1950s. The U.S. Congress funded an SST design effort in the 1960s, which led to the selection of a Boeing design for continued work. But in the face of objection to the potential for environmental degradation, Congress dropped funding for the program in 1971, and all overland supersonic flight was banned. At the same time, the European-designed "Concorde" SST was ready for service, and Washington, DC (Dulles International Airport) and eventually New York (JFK Airport) permitted its landing. Ultimately, however, the advantage of the SST’s speed and fuel efficiency were offset by the passenger load capability of aircraft such as the Boeing 747. In July 2000 an Air France Concorde crashed in Paris, killing all 113 passengers and crew and 4 people on the ground, adding to the loss of confidence in the SST. The Concorde’s last flight took place on November 26, 2003.]