The Legislation

CETA and CDBG were compromises reflecting the tension between Nixon's "no federal strings" approach and the desire of Congress to retain some federal control over use of federal funds, although less than in categorical programs. At issue was how this uneasy partnership between federal and local governments was going to evolve in these complex, controversial programs run by local governments but with the federal hand still in the game.

The Comprehensive Employment and Training Act of 1973 combined programs from the Manpower Development and Training Act, the Emergency Employment Act of 1971 (a public employment program), and portions of the Economic Opportunity Act. CETA, now amended several times, remains the basic piece of federal manpower legislation. Its stated purpose is "to provide job training and employment opportunities for economically disadvantaged, unemployed, and underemployed persons, and to assure that training and other services lead to maximum employment opportunities and enhance self-sufficiency by establishing a flexible and decentralized system of Federal, State, and local programs."^[11]

[11] U.S., Public Law 93-203, 93rd Congress, S. 1559, 28 December 1973 (87 STAT 838) p. 1.

Title I, the key provision for our purposes, provided funds to state and local governments, labeled "prime sponsors," to offer comprehensive manpower services including training, employment, counseling, testing, and placement. Prime sponsors include units of general local government in areas with populations of 100,000 or more; combination of units of local government which includes at least one unit in an area where the population is 100,000 or more (called a "consortium"); a state; and special areas designated by the Secretary of Labor. Most prime sponsors are either local governments or consortia.

The overall CETA legislation combined a broad block grant program with several categorical programs. Title I decategorized the Manpower Development and Training Act and portions of the Economic Opportunity Act. Further, the prime sponsors were given much more authority than in the past over the most important of the categorical programs, the two public service employment titles in the legislation. This shift to local government was referred to as decentralization.

The most basic change under CETA was the provision of block grants to local units of government. The prime sponsor had to submit a comprehensive plan on manpower services for approval by the Secretary of Labor. However, prime sponsors were empowered both to determine the mix of manpower services offered in their communities and the organizations that would deliver these services. The prime sponsor had the option either of providing manpower services directly or of contracting with outside organizations for such delivery.

The original CETA legislation in 1973 brought basic changes in institutional relationships. First, rather than dealing directly with well over 10,000 grantees for specific manpower projects, DOL would administer slightly over 400 grants to prime sponsors. These prime sponsors in turn administered and/or operated the specific manpower projects. DOL was now one more layer removed from actual project operations. Second, local manpower projects had to negotiate directly with local governments rather than with DOL regional and area offices or headquarters. Prior to CETA, national organizations such as the National Urban League

had been able to negotiate directly with Washington for the funding of their organization's local projects; CETA now meant that local organizations had to work out their own arrangements at the local level. Finally, manpower funds no longer would go directly to local nongovernmental organizations, such as Community Action Agencies, that represented geographic areas. The major thrust of the 1960s to get funds to poor neighborhoods was weakened.

The Community Development Block Grant program—Title I of the Housing and Community Development Act of 1974–decategorized the following programs: urban renewal under Title I of the Housing Act of 1949 and the Neighborhood Development Programs, which were made part of the urban renewal provisions in the Housing Act of 1968; public facilities loans under Title II of the Housing amendments of 1955; open space land grants under Title VI of the Housing Act of 1961; rehabilitation loans under Section 312 of the Housing Act of 1964; water and sewer facilities grants under Section 702 of the Housing and Urban Development Act of 1965; neighborhood and facilities grants under Section 703 of the Housing and Urban Development Act of 1965; model cities under Title I of the Demonstration Cities and Metropolitan Development Act of 1966.^[12] A major initial result of the decategorization was simplified requirements, as this HUD statement indicates: "CDBG regulations printed in the Federal Register total 25 pages as compared to about 2,600 pages of regulations in HUD handbooks for categorical grant programs."^[13]

The legislation states that the primary objective of CDBG is "the development of viable urban communities, by providing

[12] For a summary of the decategorized programs as originally passed, see Evolution of Role of the Federal Government in Housing and Community Development: A Chronology of Legislative and Selected Executive Actions, 1892–1974 , Subcommittee on Housing and Community Development of the Committee on Banking, Currency and Housing, U.S. House of Representatives, 94th Congress (Washington, D.C.: Government Printing Office, October 1975) pp. 25–26, 51–52, 79–80, 98–99, 114–119, and 135–136.

[13] U.S., Department of Housing and Urban Development, Community Development Block Grant Program: First Annual Report (Washington, D.C.: Government Printing Office, December 1975), p. 3.

decent housing and a suitable living environment and expanding economic opportunities, principally for persons of low and moderate income."^[14] CDBG is a most tangled and complex piece of legislation, but this summary statement by Frieden and Kaplan captures its essence: "The important news is: (1) there is less Federal red tape than in the older categorical programs; (2) hardware expenditures and public works are back in fashion; (3) poor people and minorities are no longer in fashion."^[15] Although the program as finally enacted ended up placing far more restrictions on local governments than Nixon intended, CDBG through its decategorizing and decentralizing thrusts still altered the basic federal-local power arrangement in roughly the same way CETA had a year earlier.