On Sept. 27, more than 300 Republican lawmakers signed a "Contract With America," pledging to pass what they called "common-sense legislative reforms" in the first 100 days of the 1995 legislative session if the party won control of the House of Representatives.

At the time, skeptical Capitol Hill watchers dismissed the contract as a vote-getting ploy that would be forgotten as soon as the elections ended.

But the naysayers can't ignore it any loger: Having gained control of Congress, the Republicans haven't forgotten their pledge, and are still vowing to put those pieces of legislation in place.

That has left plenty of people struggling to figure out what the contract means for them. They include city officials all around the country, who are trying to find out how passage of those bills would affect their jurisdictions.

The answer is that, from municipalities' point of view, some of the changes would be good and some bad, but all would be very big, according to Washington lobbyists and organizations representing local governments

Of the 10 bills, four would have the strongest impact on local finances: the Fiscal Responsibility Act, the Personal Responsibility Act, the American Dream Restoration Act, and the Job Creation and Wage Enhancement Act.

Under the Fiscal Responsibility Act, House Republicans are promising to pass a balanced budget amendment and a measure to give the president a line-item veto. The Personal Responsibility Act is another name for welfare reform. The American Dream Act would offer a middle-income tax cut and a tax break to spur savings, while the Job Creation Act would give tax incentives to businesses and end unfunded federal mandates.

On the positive side, municipal officials and lobbyists said eliminating mandates on state and local governments would be a welcome change in the new Congress.

Ending such mandates "is going to mean great relief for cities across America. It will free up dollars to do things on different priorities that we set" said Victor Ashe, the mayor of Knoxville, Tenn., and the president of the U.S. Conference of Mayors, at a Nov. 14 press conference about the Republican takeover.

State and local governments have waged a campaign for several years to force the federal government to stop saddling them with costly mandates, like those included in the Clean Air Act and Clean Water Act, without offering federal aid to help compliance.

Congress' leading proponents of anti-man-date legislation are Republicans moving into key positions in the House and so will have a good opportunity to push the legislation through next year, according to Frank Shafroth, the chief lobbyist of the National League of Cities.

The two are Rep. Thomas Bliley, R-Va., who is expected to become chairman of the House Energy and Commerce Committee, and Rep. Bill Clinger, R-Pa., who is slated to chair the House Government Operations Committee, said Shafroth, who is the league's director of policy and federal relations.

But there may also be a lot in the Republicans' contract to cause concern among city officials.

For example, the Republicans' desire to overhaul the welfare system could come back to haunt other branches of government. Among their proposals, the Republicans want to place a cap on the amount of welfare benefits received by individual families, and to eliminate certain types of welfare payments for very young unwed mothers.

While city officials have said they want to see the welfare system reformed, those changes would shift some burdens back to the states and localities, said Norm Rice, the mayor of Seattle, during the Nov. 14 press conference.

"Clearly, if you don't have some balance, cities will carry the brunt. We also believe that if you go too far in welfare reform it also is an unfunded mandate, giving us the responsibility without the dollars to take care of the problem," Rice said.

Local officials appear to have mixed feelings about the balanced budget amendment. While they have urged the federal government for years to get its fiscal house in order, they seem to be worried that the spending cuts needed to balance the budget would saddle them with expensive new responsibilities.

Many local and state officials "are philosophically in favor of the balanced budget amendment, but they want to make sure it doesn't come out of their hides," said Milton Wells, the director of federal relations for the National Association of State Treasurers.

Furthermore, the Republicans don't seem to have figured how to pay for a balanced budget while furnishing business tax incentives and a middle-class tax cut.

In the end, the party's pledge to balance the budget "may be more of the old budget shell game," Shafroth said in the Oct. 31 edition of the organization's publication, Nation's Cities Weekly.

Shafroth explained that idea further in the paper's Nov. 14 edition. "A combination of unpaid-for tax cuts and a balanced budget amendment would impose a huge burden on the federal deficit, almost certainly leading to further unfunded federal mandates on state and local governments and sharply reduced federal resources," Shafroth said.

Local officials, meanwhile, have said they are worried that the costly tax breaks proposed by the Republicans would have to be paid for by cuts in key domestic programs that provide aid to municipalities, such as the HOME housing affordability program, the Community Development Block Grant program, and the enterprise zone program.

The middle class tax cut alone would cost the federal government billions of dollars, said John Murphy, the executive director of the Association of Local Housing Finance Agencies. "That certainly means programs like housing could be vulnerable" to the budget ax if revenues are needed to pay for the tax cut, he said.

In some areas, such as welfare and housing, Congress may shift funding to a block grant system, which would give state and local governments more flexibility but probably also added responsibility for various programs.

"I think most mayors would tell you that a block grant approach and greater flexibility is the preferable way to go," Ashe said during the mayors' press conference. "Obviously, the level of funding is an issue for debate, but the concept of block grants is one I think most mayors of both political parties would favor."

But Catherine L. Spain, the chief lobbyist for the Government Finance Officers Association, said state and local officials should be wary of the new responsibilities that may be handed to them by the federal government.

"The problem is, as the pendulum swings back toward more responsibility for state and local governments, it's not clear how that fiscal equation is going to work out in terms of the money available to do things," Spain said.

Contract with America Signed Sept. 27, 1994

We've listened to your concerns, and we hear you loud and clear. On the first day of Congress, a Republican House will:

* Force Congress to live under the same laws as every other American

* Cut one out of every three congressional committee staffers

* Cut the congressional budget

Then, in the first 100 days, we will vote on the following 10 bills:

1 Balanced budget amendment and line-item veto: It's time to force the government to live within its means and to restore accountability to the budget in Washington.

2 Stop violent criminals: Let's get tough with an effective, believable and timely death penalty for violent offenders. Let's also reduce crime by building more prisons, making sentences longer and putting more police on the streets.

3 Welfare reform: The government should encourage people to work, not to have children out of wedlock.

4 Protect our kids: We must strengthen families by giving parents greater control over education, enforcing child support payments and getting tough on child pornography.

5 Tax cuts for families: Let's make it easier to achieve the American Dream, save money, buy a home and send the kids to college.

6 Strong national defense: We need to ensure a strong national defense by restoring the essential parts of our national security funding.

7 Raise the senior citizens' earning limit: We can put an end to government age discrimination that discourages seniors from working if they choose.

8 Roll back government regulations: Let's slash regulations that strangle small businesses, and let's make it easier for people to invest in order to create jobs and increase wages.

9 Common-sense legal reform: We can finally stop excessive legal claims, frivolous lawsuits and overzealous lawyers.

10 Congressional term limits: Let's replace career politicians with citizen legislators. After all, politics shouldn't be a lifetime job.

After these 10 bills, we'll tackle issues such as common-sense health care reform, tax rate reductions and improvements in our children's education.

Source: Republican National Committee

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