President Carter asked Congress yesterday to pass legislation that would provide $400 million over the next two years to more than 1,200 communities "experiencing severe fiscal distress."
Under the proposal, the District would receive $3,976,635 this fiscal year, and Baltimore $3,960,127.
The president, who met with state and local officials to outline the measure, told them, "It's not going to be easy to get [it] passes. I think we're going to have to mount a very strong lobbying effort on the Hill."
His proposal is greatly reduced from the program he proposed last year, which would have cost $1 billion for each of two years. A cut-back version of that measure passed the Senate but stalled in the House in the final moments before it adjourned.
Carter, who is now asking $250 million for the program this year and $150 million for fiscal 1980, which begins Oct. 1, noted that a similar antirecession fiscal aid program funneled about $3 billion to states and localities between 1976 and last year.
Most communities have revived from the recession, he said, but he added that some "are experiencing severe fiscal problems and need more time to recover.
"The unexpected and abrupt termination of this program last fall has threatened many of these localities with painful reductions in vital services and with costly layoffs."
As if to underline those remarks, Mayor Kenneth Gibson of Newark said he had "already laid off 44 employes, including 200 policemen." Newark, which has a 13 percent jobless rate, would get $2.7 million under the new proposal, and Gibson said the money would help him lower property taxes. Owners of a $20,000 house in Newark now pay $2,000 a year in property taxes, Gibson said.
Rep. Jack Brooks (D-Tex.), chairman of the House Government Operations Committee who last year led opposition to Carter's bill [which would have aided 26,000 communities], said yesterday he dislikes the new measure as well.
Last year, pointing, out that the program was first called counter-cyclical aid and then renamed supplemental fiscal assistance, Brooks said, "I call it a snake."
Yesterday, he quipped, "It's now a smaller snake. But a snake is a snake is a snake."
He said the new measure has "improved targeting" -- that is, it would go to more communities that really need it. But he charged that "it is still based on factors that have little or no relationship to fiscal needs of cities and it relies on 'guesswork' unemployment figures which just do not exist."
Brooks said the federal government gives states and localitirs more than $80 billion a year. "I find it most disturbing for us to seriously consider handing out even more to local governments and at the same time try to convince the public we are serious about attacking double-digit inflation and the government's $49 billion deficit," he said.
However, Sen. Daniel P. Moynihan (D-.Y.), who plans to introduce the bill in the Senate today, said it "preserves the principle that the federal government should level out the ups and downs of the economy. In a big country, places can have downs while everyone else has ups." He said he thinks the bill will pass the Senate.
The first part of Carterhs program would provide funds to 1,231 local governments with jobless rates that averaged at least 6.5 percent from last April through September. The second part, called a "safety net," would go into effect only if the national unemployment rate, now just under 6 percent, averaged at least 6.5 percent in any quarter.
Then, $500 million a year would go to states and localities with jobless rates of at least 5 percent, and an extra $100 million a year would be available for each 10th of a percentage point that the national jobless rate exceeded 6.5 percent. For example, if the rate hit 6.8 percent, $800 million would be released.
According to Treasury Department figures, the nation's 10 most "distressed" cities (in terms of unemployment) would get the following amounts under the first part of the program: Boston, $2.95 million; Buffalo, $1.5 million; Chicago, $12.2 million; Cleveland, $1.3 million, Detroit, $7.8 million; New Orleans, $2 million; New York, $42.8 million; Newark, $2.7 million; Philadelphia, $8.7 million, and St. Louis $2 million.
Localities in California and New York together would get 43 percent of the funds.