The Streets Were Paved with Gold - Ken Auletta [85]
Today, the Northeast, and particularly New York, is like the Old South. Its living costs, taxes, climate and aging physical structure are no longer competitive. Its tax base has shrunk as its service needs have expanded. New York, like many small farmers, can no longer compete. Left alone—through a policy of “benign neglect” advocated by laissez-faire professor and occasional Wall Street Journal columnist Irving Kristol—the “economic imbalance in the nation” will probably tip further. The nation’s real per capita income grew 6.5 percent between 1970 and 1975, reported Bernard Gifford for the Russell Sage Foundation. Yet in the same period New York City’s income dropped 1.4 percent. “Had the city grown in tandem [roughly parallel] with the national economy,” Gifford writes, “as it had for more than 20 years, its per capita personal income would have increased by 3.9 percent between 1970 and 1975….”
Stating the problem is not the same as stating the solution. The era of massive 15-point programs, of neat panaceas, of soaring optimism, seems to have ended. Like many, I have learned there is a difference between what should and what can be done, between what’s needed and what’s possible. “If the President called me in tomorrow and asked what the solution is for the nation’s aging cities,” Assistant Secretary of Housing and Urban Development Donna Shalala told me in late 1977, “I wouldn’t know. Nor does anyone else.”
As a Presidential candidate, Jimmy Carter seemed to be struggling to redefine liberalism, to approach problems with a fresh sense of humility; to marry a desire to right wrongs with a sense of fiscal responsibility. He took care, in a May 25, 1976, letter to Mayor Beame promising the federal assumption of local welfare costs, to strike the promise of a “prompt” takeover from a draft and substitute the phrase “as soon as possible.” Mindful that promises cost money, he toned down a staff-drafted speech on national health insurance, as well as language committing his Presidency to a sweeping Humphrey-Hawkins full employment bill. He seemed to understand that declaring health care or a job a right was different from telling people how to pay for that right, or how to set up a system to deliver that right. Many ADA liberals took this as a clue that Carter was not one of them. As a reporter covering Carter, I took it as a clue that he had a realistic sense of limits, an engineer’s concern with how things worked, not just how they sounded. The first nineteen months of his Presidency suggest that I may have been wrong. Carter may not have known what he was doing, may just have been struggling not to offend moderate and conservative voters.
In the campaign, Carter’s letters to Mayor Beame promised: “As soon as possible the federal assumption of the local government’s share” of welfare would be picked up. Pressed to explain, Carter told me (and a roomful of reporters), “The local government should pay no part of the costs … and over a period of time the federal government should pay an increasing proportion of the cost, which would mean the state would pay a lesser amount of the cost.” Almost exactly one year later, Presidential press secretary Jody Powell declared that Jimmy Carter never promised a federal assumption of local welfare costs and instead had said the state should assume these costs. At about the same time, the President promised his long-delayed welfare reform proposals would entail “no additional cost above and beyond what we presently spend on welfare.…” That August, after a torrent of criticism from the Urban League’s Vernon Jordan and others reminding him of his campaign pledges, he suddenly added $6.2 billion to his welfare reform proposal. By 1978, that sum had mysteriously ballooned to over $20 billion more, though it was hardly a