Early on in the new Washington novel by Ben Wattenberg, who became famous as a man attuned to the hearts and minds of average Mid-western Americans, a White House speechwriter has lunch at Sans Souci with a savvy New York Times reporter, the kind of character who’s obviously there to say what’s on the author’s mind. The reporter is just back from several weeks of traveling around the nation to sample the simple folks’ attitudes, and the speechwriter straightaway asks her, “How are things in the country?” Which elicits the following response:
” ‘Strange.’ Her brow furrowed. ‘I’m always amazed at how different the rest of the country is from Washington. In this town, you’d think politics was at the heart of the universe. Out there’—she waved her hand—’people manage to hold jobs, have babies, and wash their cars without thinking about Congress or the President or Washington for days—hell, years—on end.’ “
It is doubtless true that the daily concerns of the people out there are not those of Joseph Kraft and James Reston, but it’s hard for anyone to live in complete blissful ignorance of the federal government. The long arm of Washington touches almost everybody in one way or another.
At President Carter’s town meetings, people were too busy asking about federal programs that touched their own lives to worry about the burning issues of the big-think set. In Washington state, farmers are furious at the government for having encouraged them to plow under their crops in anticipation of a drought that never arrived. In Louisiana, towns live and die according to two-cent fluctuations in federal sugar supports and import taxes. In Indiana, a town is closing down because of federal water-treatment requirements it can’t meet. In California, the cancellation of the B-1 bomber threw thousands out of work.
And in La Plata, Maryland, population 1,800, the town manager says the federal government “is involved in every facet of life that we have.” La Plata is the county seat of Charles County, Maryland, population 50,000, which sits astride the Potomac south of Washington and west of the Chesapeake Bay. Charles County is an old farming area, and La Plata is the kind of town that serves most agricultural regions. Everybody knows everybody. A couple of old families (the Diggeses and the Bowlings) run most major enterprises. There is a main street, a high school, and a few stores and offices, all of which make up a commercial district about five blocks long. For half a mile on either side of the main street there are single-family houses and a few apartment buildings, which give way to miles of farms—tobacco (the county’s original economic base) and corn and soybeans.
La Plata is the kind of place that’s usually written about these days in sepia-tinted prose that is meant to indicate a quaint, remote, placid, and dying way of life; it’s well known, after all, that America is now 75-percent urban. But that’s a misleading statistic; a full 40 per cent of the population still lives outside cities of more than 50,000 and their suburbs. To people in Washington there’s a certain mystery enveloping these areas. They are known to vote against Washington—they formed the solid backbone of the Nixon-Ford constituency—but that’s usually chalked up to a general pastoral conservatism. The possibility that it might be the government’s fault is left unexamined.
$2000 a Person
The first striking aspect of the federal presence in a small, mind-its-own-business county like Charles is how large it is. These may be proud and independent people, but in the last fiscal year the government spent $97.2 million in Charles County, which works out to about $2,000 a person. In addition, it lent out $26.3 million. All this is considerably more than the county pays the government: nationwide, federal taxes in 1976 were $1,328 per capita, and in Charles County, which is fairly low-income, they were probably less.
The government’s largesse to Charles County has come gradually over the last 50 years; there have been three major waves of federal domestic spending in this century, and a county like Charles is in a position to have profited from all three.
The first wave was the New Deal, under which Social Security ($10 million a year in Charles County) and various relief programs began. The New Deal’s social programs were aimed first and foremost at building a firm economic floor under agricultural America, which they did quite effectively. The Department of Agriculture is today the most visible federal presence in Charles County, with a brand-new office building in La Plata, and it guarantees decent housing and a farm to every citizen who makes less than $15,600 a year. The chief agency of this generosity is the Farmers Home Administration (called, for some reason, the FmHA, which, its genial county director, Thomas Potter, says, can “do just about anything in a rural area as far as financing.”)
As long as they’ve first been turned down by a bank, anyone under the income ceiling, even single people, can get from the FmHA a loan to buy or rent a house or farm, at low interest and long terms, that can cost as much as $45,000 (which still does buy something in Charles County). Loans are also available to cover farm operating costs, start businesses in town, and build community facilities like sewage and water treatment plants, roads, and drainage systems. Through its price-support system, the Agriculture Department also guarantees the county’s corn and soybean farmers that they’ll never have a bad year. Should drought or heavy rain destroy the crops altogether, the government will step in with disaster relief—in fact, there are two programs, the FmHA’s and the Small Business Administration’s, that provide identical disaster loans to the same people, the only restriction being that nobody can be on both agencies’ caseloads simultaneously. In 1976, the SBA lent farmers in Charles County $28,000 in disaster loans after heavy spring rains, the FmHA (which seems to be winning the bureaucratic battle on this front) $187,000. The FmHA also lent out $300,000 to cover farm operating costs; $64,000 to buy farms; and, to farmers and townspeople, $2.5 million to buy houses.
The second and third waves of government spending—military, starting with World War II and continuing apace in the years thereafter, and social-services, taking off during Lyndon Johnson’s presidency—have bestowed their gifts on Charles County too. The Defense Department spends $50 million a year there, most of it in pay for the 2,500 employees of a Naval Ordnance Station in the town of Indian Head, and the Department of Health, Education, and Welfare chips in nearly $25 million, the biggest single chunk of which goes to Medicare ($2 million) and Medicaid ($6 million). Another $2 million in social-services programs—mainly food stamps and school lunches—comes through the Agriculture Department. Rural areas get more than their share from the federal government because it’s hard to build military installations in cities; and social-services grants, usually thought of as aimed at big cities, do a lot for the low-income country as well.
Otherwise, federal spending in Charles County is a miscellany—$6 million in insurance for low-income homeowners from the Department of Housing and Urban Development, $329,000 in unemployment compensation, $824,000 in highway construction grants. Two-and-a-half million dollars comes in from the Veterans Administration for pensions and training; $1.2 million from the Treasury in revenue sharing; $6.1 million in the Civil Service Commission in pensions on federal salaries. All eleven Cabinet-level departments and ten independent agencies put some money into Charles County.
Overall, the federal government’s spending in Charles County breaks out like this: $35 million in salaries, mostly to Defense employees (who average about $16,000 a year); $20 million in pensions; and $25 million in loans, most of which help low- and moderate-income people buy houses. In other worth;, the government primarily helps its own (which in turn helps the local economy, but also leads to resentment and inflation), the retired, and the housing industry. By comparison, only $6 million a year is for the kind of payments to poor people that could conceivably be called the dole—Medicaid, food stamps, welfare, and the like.
The Short End of the Stick
For all this government generosity, Charles County does not send its gratitude back toward Washington. In fact, both by their votes (conservative Republican) and in conversation, the county’s residents make it clear that they think they’re coming out on the short end of the federal stick. Most don’t realize that the government spends more on the county than the county gives it, but even if they did, it’s a fair bet that they’d insist the relationship isn’t worth it. The people of La Plata are glad to enumerate their theories about the federal government: that it pays people to sit around and do nothing, and that the money, it puts into the county is less than what the county has contributed because bureaucrats skim a large percentage off the top for themselves before giving it back. They resent the high salaries paid the county’s federal employees. The government “is to Charles County what Con Ed is to New York,” says Daniel Kennedy, editor of the La Plata Times-Crescent. “Everybody blames them even when they’re right.”
All these are general complaints, often arising out of no more specific a burden than paying taxes; but they certainly show that the government has a public-relations problem even if they don’t explain why. More particularly, people in La Plata, especially businessmen, complain that they are overburdened with federal regulations that were designed for giant corporations, crush the small ones, and make it impossible to earn a profit. That kind of griping goes on all over the country (the giant corporations that the rules were designed for complain the loudest) and probably always has. Recently the small-town businessman has even obtained a spokesman, in the person of Billy Carter, whose complaints about OSHA inspectors, hiring regulations, the minimum wage, unemployment compensation, and, generally, federal “paperwork” are echoed by businessmen in La Plata.
There’s no doubt that the state of bureaucratic affairs small businessmen allude to can come about; in France, reports Alain Peyrefitte in his book Le Mal Francais, the federal government closed down a small town’s only store, a cafe-grocery-general store, because it is illegal to serve liquor less than 200 meters from a school and the store was ten meters too close. But while that kind of horror story is worth keeping in mind for its cautionary value, in America the government’s oppression of the small businessman seems to be exaggerated. Its truth is mostly symbolic; to an entrepreneur who is accustomed to answering to nobody at all, even the slightest intrusion takes on an importance that those of us who are accustomed to drawing a paycheck would find hard to understand. And small-town life is a mixture of two strains, the independence glorified in Our Town and the xenophobia condemned in Babbitt and Main Street; sometimes the two work in opposition, but whenever government regulation is involved, they gang up and damn it.
A case in point is James Hancock, a weather-beaten, articulate man who runs La Plata’s shoe repair shop out of a tiny, cinder-block building on the main street. Hancock started his shop in 1949 and, he says, has made less money every year since then—mainly because the government has swamped him in regulations and paperwork. He says he’d expand his business except that, with all the regulations involved, it just isn’t worth it.
But asked to produce some of the paperwork that plagues him, Hancock can only shrug his shoulders—all he does at the government’s behest is keep books, “just like I was Ford Motor,” for income-tax purposes, something he wouldn’t otherwise do. The rest of the paperwork is more in the realm of threat than reality. It is worth noting, though, that for a really small businessman—not Billy Carter, but Hancock—the minimum wage is a genuine hindrance. He and his assistant are both below the poverty level, and the assistant has to be hired as a subcontractor rather than an employee because he can’t be paid the minimum wage.
A Little More Complicated
Hancock’s perceptions are shared by most people around La Plata. A defender of the government would say life has to be a little more complicated in order to bring about a better society—for instance, aren’t OSHA inspectors worth it if they’ll stop industrial accidents? But in Charles County there’s no perception of a reason behind the complication, and it’s seen as better just to avoid it, to keep life simple. A local lawyer told me he gave up his real-estate practice rather than comply with the “paperwork and nuisance” of the truth-in-lending act, and reported with great umbrage that the government “sent a man around with a tape measure to measure my damn farm.” The manager of the La Plata Chamber of Commerce says solemnly that there are “government agencies created just for the purpose of making more rules.” Being brought into a complex society of guarantees and strictures and subsidies designed to bring the greatest good to the greatest number is not what the people of Charles County have in mind.
The question this raises is, are perceptions of overwhelming paperwork and government interference a valid cause for concern if in fact they’re only perceptions? (In those specific cases when they’re real, as Marjorie Boyd’s article in this issue shows, they’re well worth worrying about.) Surely government officials shouldn’t spend their time trying to keep imaginary dragons away from small businessmen. More broadly, is Charles County, despite its sentiments to the contrary, really getting a good deal from the federal government when everything is taken into account?
Despite all the money that flows in, the answer is not a sanguine one for the government. What it takes out, it takes with impressive efficiency from one and all, but what it puts back, other than salaries and pensions, it does in a way that leaves much to be desired. The money that is spent to help the people in the county who need help, while generous in theory, is often bungled in practice. The fact is that when the government is bestowing its direct gifts on the citizenry, there really are a lot of rules to follow and forms to fill out—enough of them to make people shy away from the gifts, acting against their economic interest. In cases like that, the sincerity of sentiments against the government can’t be doubted, and something must be wrong.
The two major giveaway organizations in the county—the FmHA and the county department of social services (which is largely federally funded) both have caseloads that are far smaller than they should be. At the social services agency, a supervisor named Sarah Mitchell says, the forms that must be filled out to get on welfare and other public assistance programs, designed in Washington, are “quite detailed—people have difficulty filling them out, and they’re bothered by the requirement of a personal interview with a caseworker.” Welfare recipients have to submit proof of income, and forms having to do with their housing and children. “Any time you have outside forces dealing with your life in that way,” she says, “you’ll resent it.”
At the FmHA the caseload is only 650, just one of which is a loan to a local business. In 1976, Thomas Potter handed out 700 loan applications, but only 112 came back for processing, and at least part of the reason is that the applications must have held the promise of some future pain. For a housing loan to go through, for instance, the house must conform with a detailed code that specifies the kind of beams that must be used and requires a smoke detector in every room. The Agriculture Department’s farm storage loan program, which provides funding for the storage of crops, has had no applications so far—”a lot of people don’t understand it and don’t want to be bothered with the government,” the program’s director says. HUD’s block grants program is far under-utilized because, the people who run it in the county say, there is so much paperwork involved—every application has to have at least 12 forms, six statistical reports, and three copies of lease agreements, just for a grant for one house.
The Good the Government Can Do
The largest-scale case of a government program not helping people as it should in Charles County is the new sewage treatment plant in La Plata. A sewage plant project in a rural area—improving the environment, providing jobs, a big capital investment—is the kind of project liberals are accustomed to pointing to proudly as an exemplar of the good the federal government can do, and indeed there is a whole range of programs through which a town like La Plata can fund such a plant. But the plant, now under construction, is being financed locally—not out of ignorance of the government programs available or blind mistrust of outsiders, but because local financing is faster and almost as cheap for the town as federal funding.
The story of the sewage treatment plant begins in 1970, when the town of La Plata hired an intense young man from Utah, John Newman, for the one full-time administrative job in its government, town manager. At that time La Plata was short of drinking water, so Newman set out to get a new water treatment plant built—with federal money. The plant was originally estimated to cost $380,000, of which the Department of Housing and Urban Development would fund 90 per cent, leaving the town with a cost of only $38,000. Five years later, the plant was built, at a cost of $1,150,000, of which the town paid $347,500.
The huge increase in cost was due in large part to inflation, although government building requirements also played a large part. Of course, the requirements and the inflation are intimately connected; every requirement means paperwork, every piece of paperwork means delays, and every delay, in inflationary times, means the cost of a project goes up. Newman has the paperwork for the plant in a cardboard box in his office; the box is four feet long and is filled with the most detailed sort of requirements, preapplications, applications, impact assessments, engineering reports, promises of nondiscrimination. Newman says for four years he “practically lived” in the HUD regional office in Baltimore.
So in 1973, when La Plata started having sewer problems, Newman was already not kindly disposed toward the federal government. But since the town was low on money, and the plant would cost more than half a million dollars, he decided to give it another try.
First Newman took his project to the Environmental Protection Agency, which had a program that would pay directly for 75 per cent of the cost of the plant and arrange for the state to contribute another 12.5 per cent. EPA decided that perhaps a sewage plant for all of southern Charles County, rather than just La Plata, might be a good idea, so it had the County Sanitary Commission look into it. The commission contracted for a $106,000 study, which turned out to take three years to complete and to conclude that a county-wide plant wasn’t needed. In the middle of this, with annual inflation well over ten per cent, Newman decided he couldn’t wait any longer and pulled out.
He next looked into getting an HUD community facility grant, although with extreme trepidation, because from his experience with the HUD-funded water plant he knew all his plans, bids, and pay vouchers would have to be federally approved at great additional time and cost. But in the midst of the application process HUD replaced its community facility grants with block grants, which were billed as a streamlining of the bureaucracy. To get a block grant, a small community had to have a certain level of unemployment, which La Plata, though above the national average, then did not meet (it now does). Newman had to go elsewhere.
Having given up on the idea of a grant, he went to the FmHA for a loan—the terms were good (40 years at five-percent interest) and he imagined that a loan would be simpler in the processing than a grant. In April 1976 he approached Tom Potter about applying.
Here came a rude awakening for Newman, for he found that the instructions for filling out the loan application ran to 50 single-spaced pages. Among other forms, he had to fill out a preapplication, a full application, a balance sheet, an engineering contract, an operating budget, contracts for professional services, evidence of compliance with various rules, preliminary reports, and a project summary—quite a load on a one-man government. All plans had to be reviewed by FmHA architects and engineers. Every step of the process took time. For example: Newman had to send all his plans for approval to a state clearinghouse, which in turn sent them to five separate state agencies for their approval. Everybody approved in the end, but the process took months.
Finally, in April 1977, the FmHA sent the town a request for form FmHA 442-46, Letter of Intent to Meet Conditions; this was a final step to make sure the town understood it had to submit to the FmHA details like all construction contracts, an accountant agreement, monthly progress reports for each contractor, and non-discrimination reports. (Bear in mind, this is a program only for towns of less than 5,500 people, a group in which La Plata is a rarity for having any full-time administrative staff. In most places, all these forms would have to be filled out after hours by someone with a full-time job.) A month later, the grant was approved.
‘For Our Approval’
In the meantime, however, as Newman grew impatient, he had been talking to a local financial firm about floating a bond issue. He found the terms wouldn’t be quite as good-20 years at 5.85 per cent—but that the bonds could be out on the market by July 1. He submitted a short report on the financial condition of the town, which the firm used to write a bond issue report. That was the only information La Plata had to submit. When the bond issue papers were ready, Newman says, “They brought it down for our approval”—and he decided to forget about the FmHA. On June 3, he wrote Tom Potter that he was going on the open market. “I’m appalled,” Newman wrote, “at the amount of paperwork that is required by the United States Government through the FmHA for a loan… levels and levels of bureaucrats seem to feed on themselves as make-work projects to justify their own existence.”
Potter says now that the processing of the La Plata loan application was among the fastest he’s seen. As for the plant, construction is now well along and should be finished by the first of the year.
The forms and regulations in which the government enshrouds its gifts are not without some logic, of course: the theory is that if Washington is going to pay for something, it is its duty to make sure the project conforms to various noble social goals. Would it be right, the planners think, to fund a building on which there’s discrimination by the contractor, or faulty construction, or an incompetent architect, or unsafe working conditions? But what this attitude does is effectively take federal programs out of the reach of small-scale America—there are few small towns whose governments can keep up with all the paperwork for every federal program they’re eligible for. By not being able just to grit its teeth and give away money, Washington is short-changing small-town America on a major category of its benefits.
A good example of the problem is the impoverished shoemaker, James Hancock, who complains that the government is biased against a small businessman like him. To be sure, Hancock suffers a little under the burden of taxes and the minimum wage law—but that ought to be countervailed by a helping hand from the government when he can’t make ends meet. Poor as he is, he’s eligible for a number of federal loans and perhaps even subsidies to finance the expansion and operation of his business— and personally, he could get food stamps and housing subsidies. The government should buoy him up far more than it grinds him down.
But Hancock participates in none of these programs designed to help people like him. “I haven’t looked into it,” he says. “I think it’s wrong. If the government robs you so you have to go beg ’em for something to eat, that’s wrong. You don’t take anything free without controls.” Maybe that’s an emotional view, but the evidence in Charles County shows that there’s a lot of truth to it.