Whatever happened to the New Federalism?
The 1982 legislative year is fast closing with no congressional action whatsoever on President Reagan's New Federalism - a $47 billion swap of programs and revenues between Washington and the states promised last January as the centerpiece of the White House's domestic agenda.Skip to next paragraph
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The New Federalism faded from sight through the year as the bitter and Byzantine budget maneuvers on Capitol Hill stretched on and on and the deficit, jobs, and the lagging recovery emerged as the most urgent national economic issues.
The White House is expected to reintroduce the concept in its next budget, in a scaled-down version.
In 1983, the administration's selling job on federalism could prove even tougher. The new Congress will in effect be some 52 votes more Democratic in the House, after the switch of 26 seats following the election.
The nation's governors - with seven new Democrats in their ranks after Jan. 1 - are already balking. The National Governors' Association (NGA) told President Reagan Dec. 8 they've about lost interest in his New Federalism, which took up three-fourths of the organization's time this year.
The big issue now is ''budget, budget, budget,'' Utah's Gov. Scott Matheson told Reagan in a White House session. It is ''fiscal'' federalism - meaning a sustained level of federal funding for the states, not an exchange of powers or organization - that concerns governors now, said Mr. Matheson, the chairman of the NGA. Federal aid to states and localities has already dropped $17 billion in budget authority in Reagan's first two years, he pointed out.
The Democrats' new grip on governorships - 34 to the GOP's 16 - ''means President Reagan's New Federalism stands very little chance of being enacted,'' says congressional expert John F. Bibby.
Actually, the White House never did get a legislative bill up to Congress for action in 1982. The administration's bargaining with governors, state legislators, and local officials bogged down. The governors in November sent their own proposals to the White House - a three-tier swap of the states' medicaid load in exchange for the states' takeover of $18 billion in vocational aid, water and sewer grants, bridge repair, job training, and other programs now funded by Washington.
But the governors hadn't heard back from the White House this week when they went to Reagan and said their support for him in 1983 would be directly tied to his budget's funding levels for states, and that further federal cuts would have to be taken from defense or other categories.
The states would try to absorb inflation, but not more spending cuts, Matheson said. ''Half the states have had to raise taxes just to get by,'' he said. Together, 21 states have raised taxes a near-record $3 billion this year, according to the Tax Foundation, a Washington-based research group.
The governors ''are unanimous in calling upon Congress to avoid new cuts in domestic programs,'' Matheson wrote to Senate majority leader Howard H. Baker Jr. a week ago. ''In fact, several safety net and needs-tested entitlement programs such as food stamps, AFDC (Aid to Families with Dependent Children), and medicaid already require increased funding to provide basic needs to the new individuals on the growing welfare and unemployment roles due to the prolonged recession. We believe that further restraint can be applied to defense and indexed entitlements.''