IT MAY BE a law of nature: Whenever a governor of former governor without a federal voting record runs for president, he can be expected to grandstand against the federal budget.
This year it has been California Gov. Edmund G. (Jerry) Brown Jr., who made national waves in his second inaugural address earlier this month by endorsing a constitutional amendument to require a balanced federal budget.
Three years ago it was two other gubernatorial types. One was Brown's predecessor in California, the actor Ronald Reagan. The other was the farmer from Georgia, Jimmy Carter.
Reagan in the winter of 1975-76 threatened to steal the show by calling for a $90 billion federal spending cut. But he carefully exempted defense, Social Security and Medicare, and it turned out that cutting $90 billion from the rest of the budget meant cutting the rest of the government completely in half. Reagan moved on to other, more palatable proposals.
Carter, for his part, said that he would increase federal spending in various ways (for welfare "reform" and national health insurance, to cite the two most important examples), but still balance the budget by 1980 without raising taxes. He would be able to do these seemingly contradictory things, he told nonbelievers, because the increased spending would lead to greater economic browth, which in turn would yield enough in increased tax receipts to over the extra costs.
Carter, for good measure, also said that he would cut the defense budget. The budget that he sent Congress last week does none of these things; he is still promising.
The State Contradiction
THAT IS ONE irony. But there is extra irony when governors denounce the federal budget -- because they live off it.
One-sixth of the federal budget now consists of grants to state and local governments -- and that sum makes up fully one-fourth of all the money that states and local governments have to spend.
The largest of these grants are to help the poor -- through Medicaid, welfare, compensatory education and public sector jobs. Others go for bricks and mortar -- sewers, highways, mass transportation systems. The school lunch program falls in the general grants category, and so does general revenue sharing, the $7 billion a year that the federal government now gives to states and local governments to spend about as they please.
In fiscal 1977, the last year for which official figures are available, Jerry Brown's own California received almost $10 billion in federal grants -- one-ninth of the national total. Brown's state has an office here in the national capital, one purpose of which is to steer even more grants to California.
Some critics have been so unkind as to suggest that Brown could almost balance the federal budget by himsel -- from Sacramento. Next year's projected deficit, after all, is only $29 billion. If California would just renounce its grants and the share of defense contracts that go the its large aerospace industry...
Grants Go First
GOVERNORS OUGHT to remember, too, that grants to state and local governments are perhaps the easiest part of the budget to cut. If one were serious about reducing spending to balance the federal budget, they would probably be the first items to go.
This year's Carter budget is a case in point.
After allowing for inflation, Carter recommended that Congress increase defense spending somewhat and hold non-defense spending at this year's level. But some non-defense spending has to go up -- the benefits the government pays out through Social Security and other such entitlement programs to individuals. By law these benefits, which make up more than 40 per cent of the budget, go up each year not only with inflation, but with population.
So where could Carter cut to combat inflation, which is the theme of his budget? The answer is in grants. Grants went down in real terms, and if Congress makes no change in Carter's budget, next fixcal year the federal government will be the source of 23.6 per cent of state and local spending instead of 25.4 per cent.
That is why the National Governors' Association was among the groups that squealed when the budget came out last Monday. The Carter budget would force states and cities across the country to "rewrite and rebalance their budgets," warned Kentucky Gov. Julian Carroll, chairman of the governors's group.
One presumes that Carroll speaks in this for all 50 governors -- including those of the 22 states whose legislatures have adopted resolutions calling for a constitutional convention or amendment to balance the federal budget.
Shifting Age Mix
LAST Week's/ budget documents made one other fundamental point worth remembering. They noted that, in relative terms, the shifting age mix of the population is likely to lighten state and local budget burdens in the years ahead while adding to the federal load.
Schools are what have added most to state and the care of the elderly is mainly a federal responsibility. Fully one-fourth of the federal budget is aid to the elderly now.
Brown acknowedged in his inaugural address that states bear some responsibility for the size of the federal budget.States "compete with each other to extract more and more federal grants that are financed out of the deficits and not the productivity of the nation," he said.
"It is therefore right," his particular brand of logic then led him to say, "that these same states join together to demand a constitutional amendment that will serve as the occasion for finally restraining the inflationary spending of the federal government."
Brown earlier in his speech bemoaned the loss of public faith in public institutions, an "anti-government mood" which he blamed in large part on inflation and unnamed "false prophets" who "have risen to advocate more and more government spending" to combat social problems.
He is right, of course. False prophets on questions of public spending have indeed disillusioned us all.