GOP to Shift Power to the States

But some governors worry that New Federalism era in Washington will mean bigger burdens for them

NEWT GINGRICH and company may be drawing the attention these days, but if the new Republican barons of Capitol Hill are as good as their word, power will shift out of town to places like Trenton, N.J., Madison, Wis., and Sacramento, Calif.

Ask a Republican Party pro where the future of the party lies, and the answer is often, with the governors - state executives who in various instances have cut taxes, reformed welfare, and won reelection this month by thunderous landslides, although few paid attention.

For the moment, at least, the public seems to agree with this view. According to a post-election study by Ed Goeas of the Tarrance Group for the Republican National Committee, voters were even more strongly Republican at the gubernatorial level than at the House or Senate level.

Voters tend to judge Republican governors, such as Christine Whitman of New Jersey, Tommy Thompson of Wisconsin, John Engler of Michigan, William Weld of Massachusetts, and George Voinovich of Ohio, to be performing in a way Congress is not, Mr. Goeas says.

Governor Whitman, who has cut New Jersey income taxes by 15 percent in less than a year in office, was one of the party's star fund-raising speakers this year.

The promise of the new Republican sway in Congress and statehouses around the country is of greater freedom and power for state governments - resuming a trend toward decentralizing government that began under President Reagan.

The risk is that small-government conservatives in Washington will leave more tabs for the states to pick up without giving them the leeway to cut their costs.

``Some good things could come out of this for the states, but these guys have got to settle down,'' says Vermont Gov. Howard Dean (D), chairman of the National Governors' Association, referring to the new leadership in Congress.

When Ronald Reagan began his New Federalism program to shift power back to state and local governments, he was reversing 50 years of massive growth in federal power. By cutting taxes and allowing large deficits, Reagan weakened the main lever of federal power: money.

But Washington began relying on another tool: mandates. What the federal government could no longer afford to do, it could require of others. ``Indeed, when its ability to make grants declined, the federal government turned increasingly to mandates as a means of controlling state and local activity without having to pay the bill,'' wrote White House budget director Alice Rivlin in a recent book promoting stronger state governments.

Federal money with strings attached became strings with no money attached.

Governors could not have been happier when top Senate Republican Robert Dole of Kansas promised that the first bill to reach the Senate in January will propose barring federal mandates that cost states money - the top concern of state and local officials.

GOVERNORS also generally support a balanced-budget amendment to the federal Constitution, which Mr. Gingrich (R) of Georgia, the next House Speaker, has promised to introduce in the first weeks of January. ``But we want to make sure the federal government doesn't pass the cost down to the governors,'' Mr. Dean says.

Governors have formed a bipartisan task force to draft phrasing for a balanced-budget amendment that protects states from being forced to pick up the cost of federal programs.

The political trap for states is that Congress could decide to cut funds to states for joint programs such as Medicaid without changing the benefits or qualifications. States might be required to pick up the slack without the authority to make cuts.

``We understand that the federal government needs to be cut,'' Dean says. ``What the states want is to be able to make cuts.'' He is concerned that the House Republican plan for welfare reform includes putting federal funds for school lunches for poor children, now pegged to the number of children who qualify, into a lump sum that would not necessarily expand when poverty spreads during a recession. ``I don't believe in cutting taxes for investors [as Republican leaders have proposed] while starving schoolkids,'' Dean says.

If Republicans in Congress give states more leeway, they will be sharing power with the likeminded. Beginning next January, 30 of the nation's 50 governors will be Republicans, a net gain of 10 from the current number. Republicans also will move from controlling less than half as many of the 98 state legislative chambers than do Democrats, to a 48 to 47 majority with three evenly split.

Mr. Gingrich told Republican governors this week: ``We can't be here - Senator Dole and I - talking about how we've won, now we're going to have Republican micromanagement from Washington to replace Democratic micromanagement.''

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