Plenary Session Transcripts

Governors Attending:

Guests:

Discussion Subjects:

• Agriculture Subcommittee (AG) – farm policy issues
• Community and Economic Development (CED) – the state role in national community and economic development
• Criminal Justice and Public Protection (CJ) – the President's message on crime and the proposed reorganization of the Law Enforcement Assistance Administration (LEAA); and the proposed reorganization of federal disaster assistance programs
• Executive Management and Fiscal Affairs (EM) – tax reform and antirecession fiscal assistance; and federal budget issues
• Human Resources (HR) – state-federal aging policy; state-federal community service issues; and state-federal human resources issues
• Natural Resources and Environmental Management (NR) – proposed NGA water policy position and energy production issues
• Transportation, Commerce and Technology (TCT) – agendas of Air and Rail Transportation Subcommittee, International Trade and Tourism Subcommittee, Task Force on International Trade, and Task Force on Tourism
• Other Governors' Sessions – Energy Production Conference, and meeting with President Jimmy Carter on energy production
• Plenary Session Discussion Subjects - The states and domestic priorities; the states and international priorities; national community development policy; and the state-federal partnership in 1978

Points of Interest:

Governors participated in an energy production conference at the Old Executive Office Building on Sunday, February 26. Prior to the conference, briefing sessions were held on the issues to be discussed, including: oil and natural gas, coal, and nuclear energy; facility siting; the Outer Continental Shelf; and renewal resources. Governors also held a conference with President Jimmy arter at the Old Executive Office Building on Monday, February 27.

Vice President Walter Mondale reminded Governors that Jimmy Carter was the first Governor to be elected President in nearly 50 years. He said that just one month after taking office, President Carter had issued an order to all executive departments and agencies, requiring ongoing consultation with Governors about major programs of interest to the states.

The Vice President also referred to efforts to streamline and improve federal functions via paperwork reduction, incentives for federal workforce productivity, cutting red tape that strangled programs, and reorganizing federal development and grant-in-aid programs.

Reverend Benjamin Hooks, Executive Director of the National Association for the Advancement of Colored People (NAACP), spoke to Governors about his organization's history and activities. He noted that the NAACP, which had long been interracial, suffered criticism during the 1960s by African-Americans who advocated separatism. But the organization was now thriving again, with 400,000 dues-paying members and 1,700 chapters in all 50 states.

Rev. Hooks argued that the most pressing issue for the black community was "jobs." And he expressed concern that affirmative action was under attack, referring specifically to the case of Allan Bakke, a white male who had charged reverse discrimination after he was denied admission to the University of California at Davis medical school while minorities with lower academic averages than his were admitted.

Several Governors pressed Hooks on the affirmative action issue, in response to which he pointed out that 32 white students with lower academic averages than Bakke had been admitted to UC Davis, which demonstrated that reverse discrimination was not the issue. He also argued that academic average should not be the sole determining factor in medical school admission, and he noted that there had long been preferences—such as those for veterans—in education and employment. Hooks emphasized that he was opposed to quotas but felt that doors of opportunity needed to be opened for those such as African Americans who had been the victims of systemic discrimination.

[At the time of Hooks' address to the Governors, the Bakke case was awaiting a decision by the Supreme Court. Later that year, the Court ruled in a split decision that although admission quotas could not be used, race could be considered as a factor in achieving a diverse student body.]

Governor Michael Dukakis of Massachusetts observed that minorities were not sharing in the nation's prosperity in part because states had not been sufficiently involved in national economic and urban policy. Hooks responded that for a long time, the NAACP looked to the federal government rather than to the states because of hardened racial attitudes at the state level. But there was a new responsiveness among states, and Hooks said he looked forward to working with both state legislators and Governors to achieve his organization's goals.

Secretary of State Cyrus Vance asked for the Governors' support in maintaining openness to international trade in the face of a movement toward protectionism. If the U.S. were to impose trade restrictions, Vance argued, our major trading partners would respond in kind. The Secretary noted that: (1) one out of every eight manufacturing jobs in the U.S. depended on exports, and for each of those jobs, another one was created in a supporting industry; (2) every third acre of U.S. farmland produced for export, and every dollar of exports stimulated more than a dollar's worth of output in a food-related industry; (3) one of every three dollars of U.S. corporate profits was derived from international activity; (4) exports of goods and services now contributed nearly $200 billion to the nation's gross national product; and (5) about two-thirds of U.S. imports were essential raw materials or goods we could not readily produce.

Vance went on to offer details on the benefits of trade for specific states and noted that 25 states had established offices in Europe and Asia to promote trade and encourage foreign investment in the United States.

At the same time, he expressed recognition that some imports posed a threat to specific sectors of the American economy. To help deal with this problem, the Carter Administration proposed during multilateral trade negotiations in Geneva to seek a reduction and possible elimination of industrial tariffs and easing of barriers to our vital agricultural exports as well as reduce or eliminate other nontariff barriers to trade. The Administration would also fully enforce laws designed to stop unfair trade practices aimed at U.S. industries. Temporary relief would be provided to industries negatively affected by imports, in accordance with the Trade Act of 1974, and the Administration was committed to accelerating the delivery of benefits to displaced workers and communities.

During a discussion of community and economic development, Governor Dukakis argued that Great Society programs had failed in part because of contradictory federal programs that tried to help people in urban areas while at the same time encouraging suburban sprawl and flight of urban jobs—and all without state involvement. Dukakis recommended federal incentives in the form of a supplement to revenue sharing of roughly one-half billion dollars, consolidation of Economic Development Administration grants totaling as much as two billion dollars, and consolidation of Housing and Urban Development Department discretionary funding totaling roughly three billion dollars.

Governor George Busbee of Georgia noted that at its 1977 Annual Meeting, the National Governors' Association had adopted principles for economic development reform, out of which task forces on urban and rural/small town affairs had proposed reform legislation—the first time that the association had drafted legislation as opposed to policy proposals. As previously outlined by Gov. Dukakis, the legislation sought to provide incentive grants to states for local economic development projects and consolidate federal economic development programs. To receive federal funds, states and local governments would be required to develop short- and longer-term economic development strategies, subject to approval by the U.S. Department of Commerce.

In response to the Governors' presentations on economic development proposals, Patricia Harris, Secretary of the U.S. Department of Housing and Urban Development, suggested that although the federal government had failed to include states in development efforts, states were in part to blame for choosing not to be included. As a starting point in their involvement, she urged Governors to give attention to where state facilities were located.

Stuart Eizenstat, Assistant to President Carter for Domestic Affairs and Policy, asked what Governors planned to do to end fiscal disparity among cities and to liberalize authority to municipalities in such areas as taxing. He also wanted to know if in addition to providing fiscal incentives, the federal government should impose penalties if states failed to come up with satisfactory economic development plans. And he wanted to know whether the Governors' legislative proposal should be available to states that directed resources to distressed rural, rather than urban, areas.

Governor Dukakis responded first that most states were already working on eliminating fiscal disparity, and he agreed that doing so should be a precondition of receiving federal funds under the Governors' proposed legislation. As to the issue of penalties balancing incentives, Governor Busbee pointed out that Governors were not seeking any additional funds, but rather the consolidation of existing federal programs under which money to the states was already authorized. Governor Richard Snelling of Vermont suggested that in place of withholding funds to a state whose plan was not approved, perhaps money could be redistributed to other qualified states, a proposal that Eizenstat said would be taken into consideration. Governor Jim Hunt of North Carolina argued that there was no reason why distressed rural areas should be any less qualified than urban areas to be targeted for assistance.

Governor Jerry Brown of California brought up the taxpayers' revolt going on across the country and proposed adoption of a federal program modeled after his own state's law prohibiting unfunded state mandates on cities. It was noted that the National Governors' Association Fiscal Affairs Committee and the Advisory Commission on Intergovernmental Relations were indeed reviewing recommendations with respect to unfunded federal mandates.

Memorable Quotes:

Rev. Benjamin L. Hooks, Executive Director of the NAACP, said: "Many of us came over on immigrant ships; others came over on slave ships; and some may trace their ancestry back to those who came over on the Mayflower. But let me suggest to you today no matter how you came over, in what ship your foreparents rode, we are all in the same boat now. And somehow we must build this nation and give to it the hope and promise that the Founding Fathers had in the sweltering heat of that Philadelphia summer when they proclaimed loudly and unafraid that we are all created equal, and the time has come for America to redeem those promises."

Vice President Walter Mondale told Governors: "At the end of the first year [in the White House]…I said, "Mr. President, now that you have had a year in office, what is your impression of Washington? How do you view your job now as compared to your governorship?" He said, "Well, they are very, very similar….Washington is really just like Atlanta…The Congress is like the Georgia State Legislature. And you remind me a lot of Lester Maddox."

The Vice President went on to say: "In almost every State, new leaders are shaping the machinery of government to make new beginnings. They have brought us sunshine legislation, sunset legislation, zero-based budgeting, financial disclosure requirements, and widespread electoral reform. And the time has come…to do the same at the Federal level."

Selected Policy Positions Adopted:
(1) Outlining principles for national water policy; (2) reaffirming support for maintenance of the dual banking systems of federal and state chartered banks; (3) favoring continuation of the procedure for states to make quarterly Social Security payments over the federal proposal to require monthly deposits; (4) urging the Administration to appoint a commission to study the structure of the federal budgeting system; (5) supporting federal legislation authorizing commercial banks to underwrite state revenue bonds; (6) endorsing extension of multistate regional commission programs and calling on the federal government to equitably allocate funds among them; (7) urging the consolidation of federal community and economic development grants; (8) recommending that national economic policy to reduce unemployment and underemployment give priority to stimulating private investment in natural resources and public services; (9) supporting restoration of funding for the State Science, Engineering and Technology Program (SSET); (10) opposing federal bypassing of states in favor of direct surface transportation funding to local governments, and supporting increased funding for interstate resurfacing, restoration, and rehabilitation programs; and (11) recommending consolidation of federal emergency preparedness and disaster relief into one office.