Monday, Feb. 13, 1978

Playing Poorer than Thou

He is a leader of the gogo, proud, successful New South, but last week Georgia's Governor George Busbee sounded downright shy about it. Speaking before 500 delegates to a White House Conference on balanced growth and development, Busbee uncharacteristically stressed what he did not like about the South: "We still have the greatest percentage of people living in poverty, with less than five years of schooling, living in substandard housing, lacking plumbing, and with more people per room than any other section of this country."

It was scarcely the standard Peachtree promotion, but it was a sales pitch nonetheless--not for new industry but for federal funds. As chairman of the Southern Growth Policies Board, a 13-state coalition established in 1971, Busbee has become a leader of the South's resistance to efforts by the depressed Northern states to shift federal spending programs from the Sunbelt to the Snowbelt. Explains a Policies Board official: "We have to defend our region." Indeed, precisely that mood is spawning an unmistakable increase in a kind of petulant, poorer-than-thou sectionalism in many parts of the U.S.

Most figures show that the economies of the Southern and Western states, unlike those of the Northern states (including states in the Great Lakes region), are well recovered from the recent recession. For example, the Sunbelt's unemployment rate has hovered around 6%, while recent Northern rates are approximately 8%. Given the South's attractions for business, including its warmer, less energy-consuming climes and nonunionized labor, the regional imbalance may grow. So increasingly Northern states are looking enviously at one Sunbelt advantage that they believe can be reversed: the hefty portion of federal spending the South receives.

For example, according to studies done by the National Journal, nine Northeastern states sent $12.6 billion more to Washington in taxes during fiscal 1976 than they received in federal expenditures; the five Great Lakes states came out $20.1 billion net losers in their dealings with the Treasury. Meanwhile, Southern states received $12.6 billion more from Washington than they paid, and the West cleared more than $10 billion. Other figures show a similar disparity: defense payrolls and contracts averaged $282 per person in the Northeast, compared with $368 in the South and $565 in the West. In a gentle debate with Busbee at the White House conference, New York's Senator Daniel P. Moynihan quipped: "Our armed forces are clearly preparing to fight the next war in Nicaragua, or at least some place where it never freezes."

Moynihan, an advocate of federal loan guarantees to avert bankruptcy for New York City, recalled that many New Deal projects, like the Tennessee Valley Authority, were designed by a largely Northern Administration specifically to aid the South to recover from the Depression. He asked: "What will become of this tradition of national liberalism if the region from whence it emerged should look up two generations later and find that... resources flowed South [but] never North?"

While stopping short of supporting New York loan guarantees, Busbee agreed that "fire and brimstone regionalism" must not be allowed to overwhelm national economic policy. But sectionalist pressures are growing fast. At least six associations of elected officials and regional experts have been created by Northern states during the past 18 months alone. The largest: the Northeast-Midwest coalition of 204 Congressmen, headed by Massachusetts Representative Michael Harrington, which seeks legislation favorable to industrial states. In newspaper ads proclaiming THE NORTH SHALL RISE AGAIN, Michigan has called for a Great Lakes area "common market." Busbee in turn has been telling colleagues, "We in the South will be eaten alive if we don't wake up and react."

Busbee complains that his group has already been "caught with our britches down" on an important issue. Backed firmly by CONEG (the Coalition of Northeastern Governors), Harrington's group got Congress to change the formula for federal community development grants to give new weight to areas where most of the existing housing was built before 1939. This is expected eventually to yield an increase of 71 % in these funds available to the North, where houses are older, compared with 12% for the South.

While conceding that Northern unemployment is higher, Southerners say they need their greater share of federal spending because they have more poverty to deal with. Nearly 14% of Southern families are classified as living in poverty, compared with less than 9% in the North, where pay packets are fatter. For example, per capita income in New England averaged $6,590 in 1976, while in the South Atlantic states it averaged $5,861. Northerners reply that their higher living costs, especially for fuel and taxes, make that statistical advantage meaningless. According to Bureau of Labor Statistics, a Boston family of four needs $19,400 to pay for the same standard of living that costs a family in Atlanta only $14,800. Says Harrington: "In reality we are partners in poverty with the Deep South."

The novelty of the Northerners' argument is their insistence that existing programs for such things as housing, education and defense be re-evaluated geographically in view of the North's currently depressed state. The South argues against giving new weight to geography in federal grants, since it benefits by the present system. How much federal grant formulas should change is a subject the Carter Administration will weigh in the nine months Congress has allowed for preparation of proposals based on last week's conference. Publicly, both sides pooh-pooh any possibility that tension between North and South will increase beyond the already ample levels. But the Southern Growth Policies Board has quietly opened its own office in Washington, just to keep an eye on things.

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