AFTER YEARS of rapid expansion, federal aid to state and local governments is likely to get closer and less friendly scrutiny on Capitol Hill this year. Public service job programs, which got cut last year, are already under a new attack. And beyond the general pressures to keep federal spending down, Senate Budget Committee Chairman Edmund S. Muskie (D-Maine), Sen. Lloyd Bentsen (D-Tex.) and others have been warning that if state officials keep pushing for a balanced federal budget, Congress might well respond by slashing grants to the states.
Before any indiscriminate anti-grants campaign gains steam, it's useful to think about what's involved. Federal aid to state and local government has swelled from $20.2 billion in fiscal 1969 to $49.7 billion in fiscal 1975 to $77.9 billion in this fiscal year to a proposed $82.9 billion for fiscal 1980. But that is not merely largesse to client states. It includes a great swarm of programs to meet human and community needs, programs Congress decided were desirable and should be funneled through other levels of government. Over half of that $82.9 billion is meant to provide income, jobs, education, food, housing, health care and other services for people in need. About $13 billion more is for public works, with $6.8 billion of that for roads and most of the rest for sewage treatment and mass transit.
In some areas, such as education, recent increases mainly offset inflation. The largest expansions from 1975 through 1978 were for jobs and economic-stimulus programs, now being cut back, and for health programs. The federal share of Medicaid alone is projected to rise from $10.7 billion to $12.4 billion next year.
If Congress wants to cut grants sensibly, the most important single step is to get health-care costs under control. Beyond that, before reducing what actually. gets to people and projects, Congress should cut down what does not, by tackling seriously the myriad tangles and inefficiencies that almost everyone involved has been complaining about for so long. That means, of course, taking on the various subcommittees, agencies and interest groups that have sponsored and sustained each narrow program and burdensome requirement. And it means stepping back in many cases and giving state and local officials more leeway to design programs and allocate funds -- something Congress is often loath to do.
That sums up the challenge for those who seek overhauls -- including the nation's governors, who are meeting here for the next few days. Like mayors and county officials, the governors have a long list of generally sound suggestions for paring down overhead and combining programs in seeral fields, notably economic development and health. The Carter administration has given them a sympathetic hearing, some improvements and a promise of more extensive changes during fiscal 1981.
But there's no reason for the governors to wait. The current atmosphere gives them every reason to press their case with Congress and the public right now. Next to budget-cutting, the most popular theme on Capitol Hill is "oversight." The governors should help Congress along by amassing specific examples of unnecessary costs, seeking real legislative commitments to change, and pointing out publicly where resistance lies.