UF00083703_00123.pdf

UF00083703_00123.txt

UF00083703_00123_pdf.txt

May 12. 1969

The Vice President
Executive Office Building
Room 271

Washington. D.C.

Dear Mr. Vice President:

In a study directed initially at improving the system of
State aid to local governments. the Advisory Omission un-
avoidably faced the question of financing public assistance.
After many hours of debate and discussion. some of which you
heard at the April 11 meeting. the emission voted to re-
commend that the Federal Government assume full financial re-

sponsibility for the provision of public assistance (including
Medicaid and General Assistance).

I thought it would be helpful to call your attention to
the Conlnission's views and to review briefly the rationale be-

hind its recommendation. The full text of the recommendation
is attached.

Vast differences have developed in welfare benefits and
eligibility requirements among States. These work in perverse
fashion and give rise to intergovernmental inequities. States
that provide a higher level of public assistance find their
welfare rolls expanding, while states that provide a lower leve
find their share of caseloads decreasing. Moreover. State poli
makers fear that tax increases dictated in large part by rapidr
rising welfare costs will tend to exert a locational push on
individuals and businesses. In addition. Governors and Mayors
point out that greater reliance on the regressive State-local
revenue system as the source of welfare financing tends to make
the rising welfare costs fall heavily on the poor. In short.
State and local governments are under heavy constraint when it
comes to providing adequate welfare assistance.

Court decisions and Federal regulations have largely re-
moved public assistance policy from State-local control. The

The Vice President '2'

recent Supreme Court decision eliminating residence requirement:
will increase the welfare caseload. It has eliminated any POBB
bility that the more generous States could use residence re-
quirements to discourage in-migration of individuals destined t4
and on welfare rolls. Both these impacts will exacerbate the
state-local fiscal strain already imposd bY Public 59919t3nc-

Federal assumption would free up nearly $5 billion of
State and local revenue. It promises (a) to banefit NOBt £5039
States and cities where the poor have tended to congregate. (b)
to reduce tax differentials between the city and suburbs. and
(c) to diminish pressures on the regressive local property tax.

Federal assumption need not be regarded as a I'final"
solution. indeed. the Commission believes it should not be so
reGarded. With complete Federal financing the Federal Govern-
ment would have a far stronger incentive to explore alternative
approaches for dealing with poverty. Federal assumption thus
stands out as the most readily available proposal both to meet
a complex problem and to establish a national commitment to aid
the poor.

I have written a similar letter to the President to infor
him of the Commission's recommendation. I have also directed
the Commission Staff to inform the Bureau of the Budget of the
Commission's action and to offer them the materials developed 1
connection with the Commission's study.

Respectfully.

Farris Bryant
Chairman

Enclosure




PAGE 1

-. -*:A1'.

PAGE 2

-a .3 -..la -] : ----a --r o 1 -r 1_ c ---.. --L ---------ir i t I -.s.-., ---13 ie. --; -----. ., -t .-1.' --.r-, I .-'.1. ---1 --1 .---