It began as only a short-term program to combat the last recession.
This is just a temporary emergency bill to get us through the next few months until we go to work on more durable, long-term solutions," Chairman Carl Perkins (D-Ky.) of the Education and Labor Committee reassured the House in December, 1974.
But it hasn't worked out that way. The anti-recession program is outlasting the recession. The big cities among its beneficiaries have become hooked on it. And it has become potentially at least, one of President Carter's big best budget headaches.
Created by adding a new Title VI to the basic Comprehensive Employment and Training Act, or CETA, the program makes the federal government the national employer of last resort.
When unemployment rises above a specified triggering point, the Treasury sends state and local governments money to hire the unemployment recedes the federal funds stop flowing, and the program disappears until the next recession.
That is what Carter has been counting on.
When he sent Congress his plan for restructuring welfare earlier this year, one of his objectives was to hold down costs.
One component of the welfare plan is a large jobs program.
Carter said he would pay these welfare jobs with CETA money as the economy recovered, unemployment declined and Title VI spending under CETA went down.
But the nation's mayors, big-city mayors especially, have come to depend on their CETA money as a kind of supplemental revenue-sharing, a permanent part of their budgets. They are not using it to hire unemployed workers off the streets for leaf-raking; they are using it to keep some of their policemen and firemen and other municipal employees employed.
Thus the cities haave become what one wag calls "CETA junkies." A permanent and fattened Title VI is one of the things they think Carter should include in the new program of increased urban aid he has promised to send Congres next spring. That promise helped raise their expectations. And indeed, some of Carter's own urban planners have said the new plan should include some kind of increased job aid.
CETA thus illustrates exquisitely the kind of budget problems Carter is facing. To some extent, he is trying to make the same job money do two things at once, and it won't quite stretch.
Public jobs are now widely endorsed as a tool for ending welfare dependence.
"Public service employment is not necessarily a bad idea." said Sar Levitan, director of the Center for Social Policy Studies at George Washington University.
"In the best of times, you will have people who can't get jobs - people who are what we call 'structurally unemployed' because of certain social and educational impediments. One theory is that many of these people - many of whom are on welfare - want to work, could work and should work. There may be, and probably should be a continuation of public service jobs."
Carter apparently agrees. His welfare proposal seeks 1.4 million public service jobs, ranging from public safety to clean-up and pest control work, to give the welfare recipient a chance to earn a living.
Of the $8 million now spent for CETA public service jobs, $6.8 billion goes to "countercyclical" jobs (to help those temporarily jobless because of an economic slump) and $1.2 billion goes to "structural" public service work (to help the long-term unemployed or underemployed in areas of high unemployment).
By next March, CETA is expected to have a total of 725,000 public service jobs, 600,000 of them countercyclical.
The administration would like to fund its proposed welfare jobs with the CETA countercyclical money.
Besides revising the welfare system, the President said he wants to help economically distressed cities. He has appointed a Cabinet-level Urban and Regional Policy Group (URPG) to develop urban assistance proposals.
URPG has suggested that a way to help the cities is to increase CETA public service employment to 1.2 million jobs.
Thus, the President has a problem.
For one thing, he has promised a balanced federal budget by 1981. Skeptics see the longevity and expected growth of the federally financed jobs program making that extermely difficult, if not impossible.
Then there are the CETA junkies. Because cities have used the present funding to help balance their budgets and to pay regular employees, "the actual number of additional jobs created by public service employment is uncertain," according to a 1978 budget options report by the Congressional Budget Office.
A CBO official said it is difficult to determine exactly how much public job money goes to pay regular municipal workers.
"Fiscal substitution," reducing taxes in anticipation of using federal dollars to pay for regular municipal services, is not allowed. But laying off regular municipal employees and rehiring them with CETA funds in the absence of a reduction in tax effort - during a recession, for example - it not forbidden.
In 1976, Congress attempted to limit the use of CETA money for regular municipal pay be "targeting" much of it to the structurally unemployed. But federal officials suspect that many "structurally unemployed" persons are now working for local governments on CETA-subsidized salaries.
Many local officials feel they will get less federal job money if Carter is successful in shifting CETA money to welfare recipients.
Many also worry about who will control the flow of job funds to their cities if the countercyclical program is wiped out. Presently they exercise strong control, but three differing methods of distributing the welfare jobs money are reportedly under consideration in various parts of the administration:
Giving the money directly to "community based" organizations, such as those that flourished in the 1960s, on the theory that they are more likely to channel public service jobs to the "hard core" unemployed;
Using the federal Public Employment Service, which operates public job halls across the country, as the major conduit;
Giving the money to the cities but severely restricting their control.
Running counter to all this is URPG's suggestion to increase current CETA public service jobs - which pay an average annual salary of $7,566, including fringe benefits.
At the minimum wage, the welfare jobs would pay an average annual salary of $5,512 in fiscal 1978, according to CBO estimates.
The apparent conflict in administration thinking - increasing the number of higher-paying CETA jobs versus replacing them with lower-paying welfare jobs has baffled many local officials.
But Assistant Labor Secretary Arnold H. Packer thinks the consternation is unwarranted. Said the head of the Labor Department's policy evaluation and research division:
"We had all of these conferences, and anybody who could think about anything, well, it all got put into the report" by URPG. "It is not to be taken very seriously."
Commented a spokesman for the Washington-based U.S. Conference of Mayors, which represents the chief executives of the largest cities:
"I suppose that means that no one over the [in the administration] knows what the hell they're going to do about urban policy or CETA."