Governors dust off Reagan's New Federalism for another look

Whatever happened to President Reagan's ''New Federalism''? The President's formal plan to hand more responsibility (and the dollars or taxing power to go with it) back to the states was torpedoed two years ago before it really got off the ground. The recession, federal deficit, and a philosophical disagreement between the states and Washington on who should tackle and pay for which functions of government is essentially what did in the plan. Vermont Gov. Richard Snelling (R), once a major booster of the idea, says: ''The climate for discussing issues of fairness and substance just hasn't existed.''

But several governors say that partly because of Washington's financial problems, the transfer of power from Washington to the states continues to some degree without the formal push. And the formation of a new blue-ribbon commission to study the New Federalism concept suggests it could yet be revived.

''I'm not sure the governors feel the withdrawal has been as smooth as it might be, but I think Washington has given us more responsibility and is rightfully getting out of a lot of programs it shouldn't be in,'' says Oklahoma Gov. George Nigh (D), who was here with his colleagues to attend the National Governors' Association meeting.

''It's not negotiated, and it's not the result of particular policy decisions , but it's happening,'' says Washington Gov. John Spellman (R), who credits state initiatives for much of the change. He notes that the states now jointly spend more to promote international trade than Washington does.

Tennessee Gov. Lamar Alexander (R) says he sees signs of slow progress in more state administrative freedom. ''The changes are as much in giving us more discretion as in any actual changes in the laws,'' he says, citing more state decisionmaking power under the Job Training and Partnership Act as an example.

Iowa Gov. Terry Branstad (R) agrees that he has noticed the change recently more with the jobs program than with any other. Congress's ''strings'' on block grants to states, however, are still as strong as ever, in his view. ''I guess it's the nature of the beast. Iowa's legislature is prone to do the same thing.''

The issue that caused formal negotiations to break down in 1982 was the Reagan administration's proposal to take over responsibilities and funding of medicaid in Washington while the states assumed the burden of Aid to Families with Dependent Children. Most states have long felt that they should shoulder the primary responsibility in such areas as education, transportation, and development, but that Washington should take over the welfare job, for fairer distribution of funds.

Michigan Gov. James Blanchard (D) terms the administration's original New Federalism plan a ''financial sham'' aimed at ''shoving Washington's problems on the states.'' He suggests facetiously that since the states are faring so much better financially these days than the federal government, a reverse transfer of funds might be in order. In his view, the time may not be ripe to push ahead with New Federalism. Citing stepped up global economic competition, he says: ''It's probably not the best time for decentralized decisionmaking.''

In an effort to settle such mixed reviews on the status and worth of New Federalism, a new committee of 22 state and federal leaders headed by Virginia Gov. Charles Robb (D) and Sen. Daniel Evans (R) of Washington is about to embark on an 18-month probe of the subject in the broad context of the nation's purpose. Funded by the Sloan Foundation and called the Advisory Committee on Federalism and the National Purpose, it held its first meeting last week at the Smithsonian Institution. Governor Robb says the group will look once again at the question of who should perform and finance which functions. ''It's clear that the federal government, for lack for resources, will continue to reduce its role,'' he says.

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