AMONG THOSE most worried about cuts in the federal budget are -- naturally -- the nation's big-city mayors. For them, the question of the moment is whether the federal government can trim back or eliminate various programs without making things immeasurably worse for cities that are already in deep financial trouble. And the mayors also ask (intending to inspire guilt in Washington) whether programs for the cities can be cut without unfairly burdening poor people, 60 percent of whom live in metropolitan areas and 40 percent of whom live in cities. The answer is that urban programs can be cut from the federal budget without causing pain to the poor. The programs can be cut because there is excess in them. And there is excess because of the unfortunate congressional habit of spraying dollars far and wide in order to get broad support for putting some dollars -- truly important dollars -- into urban areas that are in genuine need. It's the sprayed-around, unneeded and vaguely bribish money that can be cut.
Let's look at two contrasting federal programs. One is the Urban Development Action Grant program, known by the Norse-god sounding name of UDAG. The president apparently told a group of mayors the other day that UDAG, a three-year-old Carter administration program, was high on the list of grant programs to be changed or killed. The administration's thinking is that these grants may not be needed, since there is no proof that they achieve their goal of prompting private investment in cities. Some of the private investment in cities now being subsidized by the federal action grants program might be made without any incentive, the Reagan people say. But that's not clear: both government and private studies of the program are inconclusive. What can be stated clearly in the program's behalf is as follows: UDAG is the most successful of the highly urban federal grant programs, aimed at cities that are most desperately afflicted by unemployment and poverty. It is also the only federal aid program for cities that requires some matching investment by local businesses and state or city governments, and one of the few urban aid programs that create permanent jobs in distressed areas where the residents need them most. In other words, if any development programs work at all, UDAG is most likely to be effective and efficient.
That brings us to the second federal program; it's the largest grant program to urban areas just now. It neither concentrates on the poorest people, nor demands matching investments, nor creates many permanent jobs. This is the Community Development Block Grants program -- $3.5 billion to urban areas annually -- which goes to some 3,150 cities and counties. That money goes to all those places for largely unspecified use, as is the case by definition with block grants. The result is that while cities with severe unemployment and large numbers of poor people -- e.g., Detroit -- get block grants, so do rich places, such as Montgomery County.
The fat in government aid to cities is to be found in the arrangements with thousands of cities and counties, like Montgomery County, that only marginally meet eligibility requirements for federal programs because they have small numbers of poor people. The block grants' everyone's-included criteria were designed by Congress to spread federal dollars around to as many congressional districts as possible for the sake of getting the votes to send it where it counts. If the administration is serious about cutting the federal budget, it will move to end this generalized pork barrell approach to helping urban areas.
In its three-year existence, UDAG has brought more dollars to cities than the block grants have in their seven-year life. And the action grants program has done that while expending fewer federal dollars than the block grants. With an investment of $1.9 billion over three years, the action grants have attracted $11.5 billion in private investment and $900 million in local government investment and have provided about 300,000 permanent jobs. It is true that these jobs might have been created without federal aid, but it is unlikely that they would have been located in cities where they are most desperately needed. In comparison, the block grants program has used 17 billion federal dollars in seven years, attracting no matching investment and creating few permanent jobs. The block grants have also directed money to communities that are far from being in desperate straits.
Cuts in federal aid to urban areas are necessary, and they can be made without taking money away from the people most in need. The way to do it is to cut off government urban aid grants to communities that don't really need them. c