Washington

FOR SOME months now the Armed Services Committee of the House of Representatives has been prodding the Pentagon to choose between competing contractors and get on with the production of the XM-1, a new battle tank for NATO forces. The chairman of that committee (Rep. Melvin Price of East St. Louis) and the Secretary of Defense (Donald Rumsfeld of suburban Cook County) happened both to be from Illinois, a rare coincidence of slight significance. For whichever company is picked, the tanks will not be made in Illinois. When it comes to defense contracts, the state ranks near the bottom — at about $60 annually per capita, compared to $446 in Mississippi and, closer to home, $ 164 in Indiana and $124 in Ohio (where the tank will be made).

The big fights that are waged in Washington over defense policy — concerning the development of supersonic bombers, more maneuverable warships, sneakier missiles, and other deadlier and more technologically advanced weapons systems — are basically economic in nature. Regional interests scramble for the jobs that are created by the manufacture of these implements of war. Despite its established industrial supremacy (by yesterday's standards at least), the Illinois stake in these contests has been largely academic. During one recent fiscal year, defense-related outlays in California were almost 10 times those in Illinois.

According to a recent compilation by National Journal, the overall federal "balance of payments" deficit was greater for Illinois than for any other state. The difference between the federal taxes collected in Illinois and the federal dollars spent in the state was a minus $5.3 million. The study documented the well recognized flow of federal funds, and of economic activity generally, from the older regions of the Northeast and Great Lakes states to the southern Sun Belt and western mountain states.

Climate and congressional clout are said to be the two reasons why military and aerospace installations are concentrated in the South and on the West Coast. The southern committee chairmen who were Price's predecessors served their constituents well. Retirement benefits also are spent disproportionately in Florida, Arizona and other warm weather states. A more surprising figure was the $152 in grant outlays per capita for Illinois, the smallest of any state. For Wyoming, the comparable per capita figure was $354. Most federal grants are distributed according to formulas devised by Congress.

Whether the ratio of expenditures to taxes is a logical yardstick for judging the fairness of federal spending is arguable. After all, national programs are supposed to address specific needs and not merely spread the funds around evenly. But there are two factors that add to the disparity. Compared to personal income, state and local taxes have been climbing much faster in Illinois and many of the other "federally-deprived" states than in the Sun Belt and mountain states. Income is equalizing among the states, but fiscal pressure is not. Taxpayers fork out more of their income for state and local governments in Illinois than in most of the states that receive a bigger share of federal aid. Secondly, the purchasing power of the dollar tends to be less in the older industrialized regions than in the Sun Belt. Thus, the "cost-indexing" issue is likely to be one route pursued by northern urban congressmen in their efforts to right the alleged wrongs of the federal aid system. If the cost-of-living is more in Chicago than in Meridian, why shouldn't the public assistance reimbursement formula reflect that?

Movement of the poor to northern cities where welfare payments were higher is one of the reasons, of course, for the regional economic imbalance, at the same time that scientific-technical industries were locating in the South to get away from pesky labor unions.

The very diversity of Illinois would seem to be another reason why the state does not pocket more federal funds. Its political power in Washington is diffused by the often conflicting interests of Chicago and the state government. Then too Chicago's commuting congressmen tend to over rely on the fabled individual clout of their mayor. They are back in the district performing as ward committeemen while the representatives of Mississippi are busy understanding and manipulating the aid formulas.

Certain trends, to be sure, are working to help the newly disadvantaged states like Illinois. With every federal budget a bigger cut is going for social welfare, less (percentagewise) for defense. As the federal government assumes more of the responsibility for social programs, and the states less, if in fact that trend continues, the industrial states presumably would gain. In the meantime it remains to be seen whether the Midwestern and Northeastern regions can patch over their own varying interests, recognize what they have in common, and reverse the payments imbalance by pooling their political influence before it is too late.

One of the ways that Illinois hopes to return more federal funds to the state is by getting in on the ground floor of a new technology: the conversion of coal into gas and synthetic crude oil (see "The coal boom has a big bite," p. 16). In next month's Washington column we will trace the politics and examine the status of legislation to assist with the financing of the new industry.