States Balk at Federal Goals

American history is marked by a constant tug-of-war between Washington and the states over who should wield how much power.

But in this new era of devolution - in which the states have won greater freedom from Washington's mandates and the elimination of the federal guarantee of welfare - the details are beginning to rankle.

The governors are united in opposition to President Clinton's proposal to cap federal spending on Medicaid, which they say would boost costs to the states in health coverage for the poor. They are also balking at some provisions of welfare reform, which gives states greater flexibility - and responsibility - in managing their case loads.

As the governors meet here for their annual winter meeting, the divergence of priorities is evident. Both Mr. Clinton and the Republican Congress are focused on balancing the federal budget. The governors want to make sure they can provide for needy citizens.

"We are in full agreement that a balanced budget and the elimination of the deficit can and should be reached," says Gov. Bob Miller (D) of Nevada, chairman of the National Governors' Association (NGA). "But we think it's achievable without placing undue burdens on the states and on the recipients of the social programs."

This tension in the new federalism is fueled by tax-cutting priorities in both parties at both the federal and states level - which could leave governments at both levels with less money. This puts added pressure on local governments, which are already being asked by the states to take greater responsibility for social welfare programs. Cities, in particular, stand to lose out.

But the concerns of cities, a declining national priority since the Reagan administration, have not been a central focus at the NGA meeting. Rather, the states' chief executives have their own budgets to keep in order. And, having made their pitch a year ago for greater control of social programs, they now have to show they can handle the responsibility.

Under pressure from GOP congressional leaders, the Republican governors ruled out a full reopening of the six-month-old welfare reform legislation on the opening day of their meeting. Rather, they will push for aid in specific areas that they fear could cost the states billions of dollars. The governors will meet today with both the president and Senate majority leader Trent Lott (R) of Mississippi.

The NGA staff had drafted a bipartisan proposal recommending that Congress restore major cuts in food stamps and disability benefits to legal immigrants, an idea Clinton supports. But the Republican governors unanimously rejected the proposal, since it would have eliminated a major portion of the savings from the welfare reform and been seen as a rejection of a policy they had so vocally supported just last year.

The Democratic governors supported the plan, but because they are in the minority - 18 of the 50 governors are Democrats - their position was defeated.

Still, some Republican governors are open to smaller changes in last year's welfare reform bill.

"I'm in favor of sitting down and looking at some of the perhaps unanticipated ramifications of it and seeing if there's some tweaking that could be done that can take care of some tough situation that perhaps weren't given consideration at the time the bill was going through Congress," says Gov. George Voinovich (R) of Ohio, co-chair of the NGA.

Governor Voinovich noted in particular the case of elderly legal immigrants in nursing homes who would have a hard time getting citizenship, and therefore would stand to lose their benefits.

Democratic governors are more blunt about the burden welfare reform places on states, particularly those with large populations of legal immigrants. It's "the mother of all unfunded mandates," says Gov. Lawton Chiles (D) of Florida.

Republican governors of states with large immigrant populations - such as California and New York - had not arrived at the NGA meeting in time for the vote on the immigrant funding proposal, so it is unclear how they feel about it.

"I don't think the governors thoroughly thought through the impact of some of the changes for them or their budgets," says Margaret Weir, a policy analyst at the Brookings Institution. "To the extent that they can just shove some of these costs down to a lower level of government, that might be the solution for them."

Having wrested a lot of control over social policy from Washington, the governors are not going so far as to regret they got what they wanted. "I see no evidence they're backing away from devolution," says Alan Weil, a health policy aide to Gov. Roy Romer (D) of Colorado. Rather, he notes, "we are going through an inevitable shakedown period when policymakers consider the fine points of a welfare bill that was finalized quickly."

Besides welfare and Medicaid, the governors targeted transportation policy, job training, clear air, clean water, and the Superfund toxic cleanup program in their agenda for the 105th Congress.

As Clinton prepares to deliver his State of the Union address Tuesday night, and then unveil his proposed federal budget on Thursday, the governors are using their time in Washington to do a bit of arm-twisting. But what they are likely to discover is that Clinton the ex-governor is now firmly Clinton the president, with his own interests to promote.