A HOUSE SUBCOMMITTEE gave the Carter administration and urban lobbies very short shrift on Wednesday by abruptly shelving the administration's $1-billion-per-year plan for supplementary fiscal aid to local governments that qualify as distressed. Subcommittee chairman L. H. Fountain (D-N.C.) did not even entertain much debate or any amendments before the 7-to-6 vote. But the outcome was not a big surprise. The Fountain panel has never been too hospitable to urban-aid plans. And the administration's proposal was very vulnerable to attack as just another handout to greedy local governments.
The administration started out with the laudable aim of funneling some extra help to cities beset by chronically high joblessness and economic strains. Such communities have been getting grants through the countercyclical program enacted during the last recession. However, that law expires on Sept. 30 - and its outlays would be stopping in any case because the national unemployment rate has dropped below 6 percent. Thus the administration proposed to base the next rounds of special assistance on local - not national - economic distress.
The concept is sound. Though the overall fiscal health of state and local governments has improved in the last year or two, the special woes of cities such as Cleveland, New Orleans and Buffalo - to name a few - obviously persist. Yet this approach has political perils that the administration has not managed to avoid. The emphasis on careful "targeting" of aid, a theme of the whole Carter urban policy, runs directly against the grain of Congress and the nation's local officials, who vastly prefer programs with something for everyone. Thus, in an effort to round up broad support for the bill, the administration defined "urban distress" so indiscriminately that over 25,000 of the country's 39,000 local governments - including some affluent suburbs - could qualify. And that lack of "targeting" made the bill an even easier target for Rep. Fountain and other opponents in the House.
To salvage anything this year, the administration must now rely on the Senate to initiate a bill. And that brings another complication into play, because Sen. Edmund S. Muskie (D-Maine), the champion of the original countercyclical program, does not want to have its basic concept changed. Sen. Muskie does seem quite willing to provide transitional grants to cities that would be badly hurt by a sudden cutoff of this aid. However, he has sharply criticized the administration's desire to set up a new program that could easily become perennial - instead of being reserved for seasons of nationwide economic strain.
There ought to be some room for negotiating here - assuming that the mood in the Senate is more reasonable than that in the House. The Senate Finance Committee, which takes up the matter on Wednesday, ought to recognize that cities that are genuinely distressed do not suddenly become well because the national unemployment rate drops from 6.1 to 5.9 or 5.7 percent. What is needed, and what we urge that panel to devise, is a program aimed squarely at poor, stagnant communities that have already tightened their budgetary belts - and still need help.