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 localities 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 of these reasons has to do with government itself, and the second has to do with each of us, with the individual.