A Spoonful of Sugar

What is the relationship between inflation and Dutch elm disease in Chicago? Answer: none now, but there soon could be. Congress and the Ford Administration are sympathetically considering a variety of proposals for a massive increase--up to $6 billion--in federal spending to hire the unemployed for public-service posts and thus help offset the rise in joblessness that is sure to result from a determined campaign against inflation. A relative trickle of federal money already is going to cities and counties, enabling them to hire the unemployed for such jobs as library clerks, garbage collectors, paramedics, even zookeepers. Local officials say they could expand such programs if they had the money. Says Joe Hill, a U.S. civil service official in Chicago, "Thousands of diseased Dutch elms have to be cut down before the snow falls."

The notion of at least a modest increase in public-service jobs got a nod last week from Labor Secretary Peter Brennan. In a television interview, he favored a $1 billion program to create 200,000 jobs if the unemployment rate reaches 6% (it was 5.4% in August). Federal Reserve Chairman Arthur Burns is an ardent backer of an even bigger plan.

He wants a $4 billion program to create 800,000 jobs if unemployment hits 6%; the first $1 billion would be "triggered in" when the rate got to 5.5%.

In the Senate, a public-service employment bill has been introduced by New York Republican Jacob Javits and Wisconsin Democrat Gaylord Nelson. Javits and Nelson, like Burns, call for $4 billion but only 500,000 jobs; they are thinking of average salaries of $8,000 while Burns' plan contemplates only $5,000. Illinois Republican Charles Percy has advocated the spending of an even greater sum: $6 billion.

Where would the money come from?

The initial funding might not be too much of a strain on the federal budget; it is obvious that the Government could not spend $4 billion this fiscal year even if Congress were to pass a bill tomorrow, though nearly $1 billion left over from existing appropriations could be spent to fund public-service jobs. But unless the Ford Administration is to abandon its drive to balance the budget it seems obvious that an ambitious program eventually would require either higher taxes or extra-deep cuts in other federal spending. Burns and Brennan have not said how they would arrange the financing, but Senator Percy has tackled the problem. He would close tax "loopholes" that favor the oil industry in order to raise the $6 billion.

Liberals have favored such programs since the crisis years of the Depression and the New Deal. What is surprising now is the willingness of conservatives to consider funding jobs that they have long regarded as dead-end tasks, which produce paychecks but little training. President Nixon vetoed a measure in 1970 that would have provided $10 billion for public-service jobs over four years, but later relented and signed the Emergency Employment Act of 1971, which has now expired. It spent $2.4 billion in putting more than 650,000 people (37% Viet Nam veterans) to work. The EEA was replaced in 1973 by the Comprehensive Employment and Training Act, under which the House has voted $650 million for public-service jobs this year and next. The legislation set up "prime sponsors" --around 400 city, county and state agencies--to receive the money, and established a long list of job areas, among them health care, housing and neighborhood improvement and recreation.

Revenue Sharing. Yet Alan Fechter, an economist with the Washington-based Urban Institute, concludes that a lump-sum $1 billion outlay would not create the 200,000 new jobs that Labor Secretary Brennan foresees, but only about 50,000. Local officials, he argues, tend merely to substitute the federal funds for state and local money that would have been spent anyway.

Despite such skepticism, some attempt to fund more public jobs seems certain. The ambitious proposals amount to a spoonful of sugar to make the bitter medicine of big budget cuts easier to swallow. Congressmen, reasons George Washington University's Sar Levitan, a manpower expert, would be less reluctant to make large and politically sensitive spending cuts in some areas if they could also create jobs for constituents.

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