In yesterday's Washington Post, accidental omission of a word from a story on the "countercyclical revenue-sharing" program left the impression that President Carter, a group of labor unions and state and city government organizations opposed extension of the program. The President and those organizations favored extension of the program and opposed an amendment by Rep. Les Aspin (D-Wis.) that would have altered its distribution formula.
In a victory for President Carter, the House voted 243 to 94 yesterday to continue for another year a special anti-recession "countercyclical revenue-sharing program," which pumps federal money to states and localities whenever the national unemployment rate exceeds 6 per cent.
The program has been running at a level of $1.25 billion a year since its creation a year ago, but was to expire soon. Carter, as part of his anti-recession package, had asked for extension with a new ceiling of $2.25 billion for the current year and $2.25 billion a year for the next five years.
Two weeks ago it looked like his request would be ignored. But the Senate tacked an emergency one-year extension into the big tax bill. The House yesterday approved a separate bill also calling for a one-year extension but with slightly different provisions. The House bill provides a total of $2.25 billion for the 15 months ending Sept. 30, 1978.
Both the House bill and the Senate tax bill provisions use the same formula for triggering the program and for distributing funds. Once national unemployment reaches 6 per cent, the program goes into effect, and the benefits can then be paid to any state or community whose local unemployment rate exceeds 4.5 per cent. The higher their unemployment in excess of 4.5 per cent, the more they get.
When it takes up the tax bill conference report next week, the House will ask the Senate to insert in the bill - in place of the Senate "countercyclical" language - the slightly different House version approved yesterday. The Senate is expected to agree, thus extending the program as part of the tax bill.
The major dispute over the bill yesterday was over an attempt by Les Aspin (D-Wis.) to install a distribution formula worked out by a House Government Operations subcommittee headed by L.H. Fountain (D-N.C.), based on the proportion of income residents of local communities pay in local taxes rather than unemployment rates. It lost, 216 to 127.
The Fountain subcommittee said unemployment rate calculations for small communities were, according to government studies, no more than guesswork, and many such units were losing out on funding because their unemployment rates appeared to be low, even though recession had cost them substabtial loss of tax revenues.
In practice, the Aspin amendament would have cut New York from 21.5 per cent of the total national pot to 17.3 per cent, cut the share of some other big states like California, Michigan, Pennsylvania and New Jersey, while raising the share of many other areas - some with quite low unemployment like Nebraska. The Carter administration, labor unions, the National League of Cities, U.S. Conference of Mayors and National Association of Counties opposed the bill.
Rep. Benjamin S. Rosenthal (D-N.Y.) said that under the Aspin formula, Montgomery County with a 3.2 per cent unemployment would get as much as Oakland, Calif., with a 13 per cent rate. Had the Aspin amendment passed, Montgomery County would have received $522,000. Under the bill, it receives nothing.