In the current mood to cut federal spending, tightening up on who is eligible to participate in government programs is one way to get at government waste.
Yesterday the administration made attempts to tighten eligibility requrements in two major programs, economic development assistance and small business disaster loans. It lost on the former and won a bit on the latter.
The president's proposed reorganization of the Economic Development Administration seeks to target development assistance to areas most in need based on levels of income and unemployment and poverty.
Under present law, which expires this year, about 80 percent of the nation's communities are eligible for EDA assistance. Under President Carter's bill that would be cut to about 65 percent. But in a bill unveiled by a Public Works subcommittee chairman, James Roe (D-N.J.), eligibility is increased to 90 percent adding about 55 million people, and adminstration efforts to cut back eligibilty were defeated in yesterday's markup, 9 to 4.
Roe's bill also says that any area now designated as eligible could never lose its eligibility.
"We should not write legislation of such loose and unfocused assistance in a time of tight budgets," said Rep. Robert Edgar (D-Pa.), who offered an amendment to cut eligibilty back to what Carter wanted. "If you have some cancer cases, you don't treat it by giving everyone cobalt treatments. In the year of Prosposition 13 and balance the budget amendments, we should be trying to spend money more wisely."
"We need to be practical and make sure we have a bill that's goint to pass," Rep. James Oberstar (D-Minn.) argued, opposing Edgar.
What that means, according to Edgar, is that some House members would yell bloody murder if their communities were cut out of the bill."This is one time where the administration took a good and creative approach and I'm afraid we didn't rise to the challenge."
The bill would increase funding authority to $3.1 billion in fiscal 1980. Carter argues that his approach would lead to new economic growth and new private sector jobs.
For two months the House Rules Committee has been sitting on a Small Business Administration omnibus bill, while the adminstration argues with Small Business Committee Chairman Neal Smith (D-Iowa).
One of the major points of contention is low-interest SBA disaster loans to farmers for even a minor crop loss, when they could get and afford credit elsewhere.
Rep. Berkley Bedell (D-Iowa), who sides with the adminstration, said that, in the 28 biggest farm loans made in his state last year under the program, the average net worth of the borrower was $2.5 million. In fact, Bedell said, the Farmers Home Adminstration has a similar program that a General Accounting Office report said was better managed, requiring farmers to show they couldn't get credit elsewhere and had suffered a certain level of loss.
Smith argued that farmers are businessmen and should not be discrminated against by SBA.
Under the compromise worked out, a farmer would have to try first for a loan at FmHA. If he were turned down, and even if he could get credit elsewhere, he could still go to SBA, but would have to pay a rate of interest that would not require a government subsidy. If he could not get credit elsewhere, he could get an SBA loan at 5 percent for a substantial crop loss.
While the adminstration said it is still looking at a few minor problems in the bill, Smith said he would try to get it cleared by the Rules Committee early next week.