State of the Union | Page 9

separate States,
without a workable central government. At that time, the mark of its
leaders' vision was that they quickly saw the need to balance the
separate powers of the States with a government of central powers.
And so they gave us a constitution of balanced powers, of unity with
diversity-and so clear was their vision that it survives today as the
oldest written constitution still in force in the world.
For almost two centuries since--and dramatically in the 1930's--at those
great turning points when the question has been between the States and
the Federal Government, that question has been resolved in favor of a
stronger central Federal Government.
During this time the Nation grew and the Nation prospered. But one
thing history tells us is that no great movement goes in the same
direction forever. Nations change, they adapt, or they slowly die.
The time has now come in America to reverse the flow of power and
resources from the States and communities to Washington, and start
power and resources flowing back from Washington to the States and
communities and, more important, to the people all across America.
The time has come for a new partnership between the Federal
Government and the States and localities--a partnership in which we
entrust the States and localities with a larger share of the Nation's
responsibilities, and in which we share our Federal revenues with them
so that they can meet those responsibilities.
To achieve this goal, I propose to the Congress tonight that we enact a
plan of revenue sharing historic in scope and bold in concept.
All across America today, States and cities are confronted with a
financial crisis. Some have already been cutting back on essential
services---for example, just recently San Diego and Cleveland cut back
on trash collections. Most are caught between the prospects of
bankruptcy on the one hand and adding to an already crushing tax
burden on the other.

As one indication of the rising costs of local government, I discovered
the other day that my home town of Whittier, California-which has a
population of 67,000--has a larger budget for 1971 than the entire
Federal budget was in 1791.
Now the time has come to take a new direction, and once again to
introduce a new and more creative balance to our approach to
government.
So let us put the money where the needs are. And let us put the power
to spend it where the people are.
I propose that the Congress make a $ 16 billion investment in renewing
State and local government. Five billion dollars of this will be in new
and unrestricted funds to be used as the States and localities see fit. The
other $11 billion will be provided by allocating $1 billion of new funds
and converting one-third of the money going to the present
narrow-purpose aid programs into Federal revenue sharing funds for six
broad purposes for urban development, rural development, education,
transportation, job training, and law enforcement but with the States
and localites making their own decisions on how it should be spent
within each category.
For the next fiscal year, this would increase total Federal aid to the
States and localities more than 25 percent over the present level.
The revenue sharing proposals I send to the Congress will include the
safeguards against discrimination that accompany all other Federal
funds allocated to the States. Neither the President nor the Congress nor
the conscience of this Nation can permit money which comes from all
the people to be used in a way which discriminates against some of the
people.
The Federal Government will still have a large and vital role to play in
achieving our national progress. Established functions that are clearly
and essentially Federal in nature will still be performed by the Federal
Government. New functions that need to be sponsored or performed by
the Federal Government--such as those I have urged tonight in welfare
and health--will be added to the Federal agenda. Whenever it makes the
best sense for us to act as a whole nation, the Federal Government
should and will lead the way. But where States or local governments
can better do what needs to be done, let us see that they have the
resources to do it there.

Under this plan, the Federal Government will provide the States and
localities with more money and less interference-and by cutting down
the interference the same amount of money will go a lot further.
Let us share our resources.
Let us share them to rescue the States and localities from the brink of
financial crisis.
Let us share them to give homeowners and wage earners a chance to
escape from ever-higher property taxes and sales taxes.
Let us share our resources for two other reasons as well.
The first