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Northeast-Midwest Weekly UPdate -- 21 July 1997

                          WEEKLY UPDATE

                           21 July 1997

                         TOP OF THE NEWS

     Low federal spending levels in the Midwest and high federal tax
burdens in the Northeast resulted in below-average rates of return on
federal tax dollar for the region as a whole in fiscal 1996,
according to a new report by the Northeast-Midwest Institute. 
Continuing a long-standing pattern in which the Northeast-Midwest
financially subsidizes the rest of the country, the Midwest received
the nation's lowest level of per-capita federal spending, while the
Northeast experienced the nation's highest per-capita tax burden.

     For every $1.00 paid to Washington by residents of the
Northeast-Midwest region, only $0.88 made its way back in spending **
the same level as in fiscal 1994 and fiscal 1995.  The South and
West, in contrast, received $1.11 for every $1.00 paid in taxes.

     The Institute's report, FLOW OF FEDERAL FUNDS TO THE STATES: 
FISCAL 1996, shows that Northeast-Midwest states experiencing the
largest improvements in their rates of return included New York,
Delaware, Connecticut, Vermont, and Maine.  States that had the
largest drops in return rates were Michigan, Massachusetts, and New

     In fiscal 1996, the Northeast-Midwest region, with 41.0 percent
of the nation's population, paid 45.3 percent of total taxes to the
federal government.  It received back only 40.2 percent of total
federal spending.  The South and West, with 59.0 percent of U.S.
population, contributed 54.7 percent in taxes, and received 59.8
percent of spending.  If the Northeast-Midwest's percent of federal
spending in fiscal 1996 had equaled its percent of taxes paid, the
region would have received an additional $76.0 billion in federal
funds that year.

     The Institute's annual report will be distributed on Wednesday,
July 23, to Northeast-Midwest subscribers and on Friday, July 25, to
regional reporters for a Sunday AM release.  The fiscal 1996 study,
in comparison to previous Institute reports, provides more analysis
of trends over the past decade.

     CONTACT:  Paula Duggan at the Northeast-Midwest Institute (544-

     A record 55 senators signed on to a Northeast-Midwest Senate
Coalition letter that requests $1.2 billion in regular funds for the
Low Income Home Energy Assistance Program (LIHEAP) in fiscal 1998, an
amount approximately equal to current allocations thus far this year. 
The letter was sent on Friday, July 18, to Senator Arlen Specter,
chairman of the Appropriations Subcommittee on Labor, HHS, and
Education in advance of that panel's anticipated markup on Tuesday,
July 22.

     The Senate Coalition letter also urges the appropriation of at
least $1.2 billion in advance LIHEAP funding for fiscal 1999.

     The bill marked up by the Senate Interior Appropriations
Subcommittee last Friday, July 18, contains $129 million for the
Low-Income Weatherization Program and $31.1 million for the State
Energy Conservation Program.  There was some indication at the markup
that these programs might receive additional funds before the bill is
brought to the Senate floor.  The House voted to fund the
weatherization program at $123.9 million and the state grant program
at $30.0 million.

     The Department of Energy's Office of Industrial Technologies
received $124.5 million in funds for its energy-efficiency work.  The
Senate subcommittee also allocated an additional $9 million above the
president's request for a program on industrial turbines.  The House
allocated $124.4 million for the industrial energy-efficiency
programs and an additional $10 million for the turbine work.

     The Senate Appropriations Committee is scheduled to take up the
Interior bill on Tuesday July 22.

     The Senate Interior Appropriations Subcommittee decided to fund
the Energy Information Administration (EIA) at the president's
requested level of $62.8 million.  It is anticipated, but not yet
clear, whether EIA also will receive, as it did last year, an
additional $5 million in funds from the energy-efficiency budget.

     At the request of several Northeast-Midwest Coalition members,
the Senate subcommittee's bill also includes report language of great
importance to the region, noting its reliance on imported oil.  The
report states that the panel "is concerned about the reduction in
State-level data collection on fuel use and pricing.  The Committee
urges the EIA to include in its Fiscal Year 1999 budget request a
discussion of its ongoing work in this area, as well as an estimate
of the additional resources required to upgrade its State-level data
collection capabilities."

     CONTACT:  Geoff Brown at the Northeast-Midwest Senate Coalition