The Reagan administration is moving swiftly to embrace the philosphy of a controversial presidential commission report issued last month that said national policy should not be designed to protect the declining econonies of the Northeast and Midwest.
That report, by the urban panel of the President's Commission for a National Agenda for the Eighties, was disavowed by former president Carter and roundly criticized by politicians throughout the country for its suggestion that the nation accept the inevitable decline of older cities in the Northeast and Midwest and concentrate its policies on helping people find work work where the jobs are.
But in its first month, the Reagan administration has implicitly adopted that philosophy through its budget, tax and regulatory actions. By shrinking the role of the federal government and putting more reliance on the natural forces at work in the economy, the Reagan program is providing additional stimulation to the already booming Sun Belt while reducing or eliminating programs that have cushioned the economic decline in the indutrial heartland.
There is no suggestion that the Reagan administration consciously set out to adopt policies that would favor one region over another, but the strong free market bias of Reagan, his budget director David A. Stockman and the western consciousness of other administration officials, is likely to do just that:
Reagan's proposed budget cuts -- from the elimination of public service jobs to the cap on Medicaid -- will fall most heavily on northern states and cities, which have become increasingly dependent on federal grants.
The administration's proposed increases in defense spending will be distributed more to the South and West, where there is a greater concentration of military bases and aerospace and electronics firms, than in the North and Midwest.
The action to decontrol oil prices and the planned deregulation of natural gas will further stimulate the economies of the energy producing regions and drain more money away from energy consuming states.
A commitment by Interior Secretary James G. Watt to develop additional water projects in the West to support the growing pipulation will provide federal subsidies for one of the Sun Belt's most critical long-range problems, even during a time of budget austerity nationally.
The administration's proposed changes in unemployment insurance and trade adjustment assistance, programs that now are greatly beneficial to northern states whose economies were built on basic industries like authos and steel, will force workers to accept new jobs more rapidly and might encourage migration to economically healthy regions of the country.
In political terms, Reagan's program represents a likely further transfer of wealth to the already prospering regions that formed his political base in 1980 at the expense of traditionally Democratic turf, and they could reignite regional warfare. The coming debate in Congress over Reagan's proposed budget cuts will include a struggle over where the smaller federal pie should be distributed.
"The nation is suffering unequally to begin with," said Rep. Thomas Downey, cochairman of the budget task force of the Northeast-Midwest Congressional Coalition. "Asking for across-the board budget cuts means those regions are going to suffer more. So I think there will be regional battles. A lot of the [Democratic] leadership seems to have rolled over on these cuts, but the rank and file will put up stiff opposition."
The coalition, an organization of more than 200 members of Congress, analyzed Reagan's budget cuts and found, not surprisingly, that the industrial heartland will bear the heaviest burden in the Republican's war against government.
"We found that the categorical programs that are going to be cut back are going to hurt distressed areas," said press spokesman Andy Lang. He cited the elimination of the Economic Development Administration and the consolidation of the urban development action grant program into a block grant as just two examples.
"The real issue is what is the right mix of programs, and that's the tough nut a crack," said Thomas J. Anton, a professor at the University of Michigan and coauthor of "Moving Money," an analysis of the distribution of federal funds. "We ought to join the issue of whether it is appropriate to adjust the industrial and commercial mix in one area through public policy at the expense of another, which is really what is at stake in the implicit set of purposes in the Reagan budget cuts."
Bernard Weinstein, a professor at the University of Texas at Dallas, disagrees that there is a regional bias in Reagan's economic program. "I think it's going to be pretty evenhanded," he said. "Some of the folks up North will argue differently, but that's probably a reflection of the fact that many northeastern states have been feeding at the federal trough for so long and capitalized on every federal program available."
Over the years, federal programs have had dramatic effects on regional growth; the construction of the interstate highway system and the development of huge water projects are just two examples of programs that have benefited the Sun Belt. But in the last five years, in part because of the documentation that the Northeast and Midwest have sent Washington far more money than they have gotten back, there has been a concerted effort to correct that imbalance. Many grant programs enacted in recent years have distribution formulas that favor "distressed" areas, meaning older industrial cities.
The report of the urban panel of the National Commission for an Agenda for the Eighties suggested a sharp departure from that philosophy, one that called for overall stimulation of the economy, and an acceptance of the transformation of the old northern cities from industrial centers to trade and service hubs -- which already has happened in New England -- and the growing prosperity of the Southwest and West. One of its most controversial proposals called for federal aid to help workers find and move to jobs in the economically healthy regions, taken by many politicians in the North as an abandonment of their region.
Although Reagan's program provides no explicit endorsement of this philosophy, or specific subsidy programs to encourage migration, his budget cuts will put additional strain on already weak regional economies, and the reduced aid to unemployed workers, the more stringent eligibility requirements for extended unemployment insurance and the new requirement that workers not be allowed to wait for jobs in their skills will place pressure on workers to find jobs -- any jobs -- more quickly, wherever they are.