
          New Federalism and Minority Rights: After Three Years
          By Willingham, AlexAlex Willingham
          Vol. 5, No. 6, 1983, pp. 3-5
          
          When Ronald Reagan was elected President, he was widely regarded as
a threat to the progressive social policies gradually put in place
over the preceding five decades. In the main these policies--in civil
rights, economic justice, environmental protection, care for the aged
and handicapped, rights of the accused--had been based on an expanding
federal role in domestic affairs. Reagan attacked these policies
directly. He criticized them as costly. He questioned the very
propriety of federal involvement. The arguments were not new but
Reagan's attack was particularly troubling because persons sharing his
views made major gains in decision-making positions during the
election of 1980.
          Furthermore there was a self-conscious effort to avoid compromise
or moderation in developing alternative policies. The new President
believed that a major part of the problem had been a reluctance even
on the part of conservative administrators, including Jimmy Carter's,
to put forth bold plans to brake the expanding role of the federal
government. His strategy was to redefine federal-state relations. Thus
the "New Federalism" of Reaganomics was a direct challenge to the
array of protections that social liberalism had valued since the
1930s.
          Reagan did make a bold step to change things, particularly in the
heady first year when his influence was highest. But in the three
years of his administration, dramatic change in federal-state
relations has been minimal--a curious circumstance given the
self-conscious attention brought to the question of federalism. We
might ask why the results have been so small? The answer lies, I
believe, in a certain contradiction within the Administration's
philosophy of government.
          We may review the record. Attempts by the Reagan Administration to
change federal-state relations started with proposals for a "block
grant" system that would continue federal funding to local govenments
but eliminate federal administration. The block grant tactic was a
sort of half-way house between the old categorical federal aid system
and a system of unregulated revenue sharing. Under the categorical
system the federal government sets specific purposes and guidelines
for administration. Under revenue sharing there are no strings
attached to federal money sent to local governments.
          Even though the latter system would fit better the "states' rights"
philosophy of Reaganism, it was unacceptable primarily because it
contradicted another of this Administration's cherished principles:
that social wellbeing is only promoted through private sector market
relations. Therefore, coupled with the return of federal power to the
states was a proposed cut in the level of funding amounting to between
twenty and twenty-five percent in the funding levels of block grant
programs in the 1981 proposals.
          Reagan's federalism reform attempted to serve two contrary
purposes. The call for local control evoked values of democracy. It
painted the traditional liberal policy with its over-reliance on
Washington as antipopulist. When pursuing this line, the
Administration tried to take advantage of a growing conviction, among
diverse local officials and community based groups, that it is
desirable to expand local initiatives. This conviction reflected a
residual American distruct of central government and a growing
confidence among some community groups that local alliance 

could be
struck to protect and expand hard won opportunities.
          That conviction was evident in several forms. During the first year
of the Reagan administration one of the more loyal spokesmen for the
reform plan was Georgia Governor George Busbee, then chairman of the
National Governor's Association. And, while national staffs of
associations of local officials remained skeptical about the proposal,
local chapters tended to support it. Civil rights groups were dubious,
especially concerning the impact in the rural South, but even in race
relations there was no denying the growing legitimacy and influence of
black voters and public officials at the local levels. Empowerment of
minorities was likely to coninue if, as finally did happen, federal
voting rights protections were reenacted.
          In this atmosphere the Reagan Administration did make some bold
moves. A specific proposal for block grants was included in the
Economic Recovery Plan put forth within months of taking office. A
more detailed plan was subsequently proposed to Congress when the
revised FY 1982 federal budget (Reagan's first) was submitted. That
budget emerged as the Omnibus Budget Reconciliation Act, still the
crowning legislative achievement of the Reagan presidency and a symbol
of his power at its highest. The Act contained nine block grants,
substantially fewer than the President wanted but still a change of
large dimensions. The $7.7 billion would eventually change hands based
on funding limits set in the Reconciliation Act.
          In 1982 the administration proposed a "revolutionary" New
Federalism plan that would replace the block grant system already in
place. This was the widely publicized proposal containing the
"swap/turnback" scheme and the federal trust fund. Under the swap, the
federal government would take full responsibility for all medical
assistance programs while the states would take responsibility for
AFDC, food stamps, and a number of other categorical programs. The
"trust fund" would be funded by federal excise taxes. The fund would
be distributed to the states over a four-year period. They could
either continue present services or divert the trust fund money to
some other area. Reagan proposed to phase out this trust fund after
four years--a firm target date when the federal role in local affairs
would end.
          The 1982 New Federalism proposal was sketched out in the January
State of the Union Address. Specific legislative proposals were to be
sent later. Meanwhile, the President continued his initiative by
proposing to expand block grants. These proposals were placed in the
Executive Budget submitted to Congress. The budgetary proposals would
follow the example of a year earlier, creating new block grants that
would in effect relinquish federal responsibility in certain program
areas. The reform of federal state relations was moving on two
tracks.
          All observers, including the President's detractors, concluded that
during the early months of 1982, he had succeeded in focusing public
attention on federalism reform. It was labeled the centerpiece of his
domestic policy. These federalism proposals were promoted with the
same optimism as the proposals in the budget battles six months
before. The sheer magnitude of the proposed changes, and a certain
regard for the president's momentum, commanded attention as many
groups debated the merits. Congress reviewed the expanded block grant
system in the federal budget while it awaited the Administration's
legislative package embodying proposals for the broader
reform. Intense public debate occurred in the context of expectations
of inevitable change in federal-state relations.
          But the federalism reform movements of 1982 never got on track in a
practical sense. By midyear the Administration had not sent a specific
legislative package to Congress as promised. Public discussion,
although intense, was limited to the proposals sketched in the January
speech. These were subject to diverse interpretations. The President
did not communicate an overriding goal for federalism reform and,
increasingly, his motives became the issue. Was he aiming to increase
local autonomy? Was he primarily concerned about reducing the role of
government?
          Local officials who would welcome the former feared the latter,
especially in an era of declining economic conditions in the
states. Many became convinced that the call for local control, while
couched in sometimes appearing philosophical terms, in fact masked a
concrete drive to cut back federal resources in the local communities
and, generally, to cripple the public effort in social development. In
this way the 1982 federalism reform proposals lost credibility with
local officials and stirred the ire of traditional liberals.
          The Administration may have been able to build a consensus had it
not met its own internal contradictions. It was unable to unify its
forces. The budget cutters supported the programs as a way to reduce
the federal budget. Conservative ideologues feared the proposal
because the expansionary implications of the swap for medical services
seemed to carry the beginnings of a bureaucracy which could ultimately
lead to "socialized" medicine. In spite of an auspicious start, no
part of the 1982 federalism reform proposals have become law. The
Reagan Administration never submitted a specific legislative package
and Congress refused to accept any of the proposed block grants in the
budget.
          The turn-around was dramatic in other ways, too. The year before,
Busbee, as chairman of the governor's group, had pleaded for support
of the federalism reform even as a member of the opposite political
party. In 1982, his replacement (Richard Snelling of Vermont), though
generally a loyal Republican, became increasingly critical of the
federalism proposals, declaring them dead in December.
          But Reagan's federalism reform was to have one more chance. In
January of 1983, the President once again called for major overhaul in
federal-state relations. In February, he submitted a comparatively
modest plan to Congress based on the block grant system. But the
debate of 1982 had taken its toll. The 1983 proposals were given a
flashy introduction and supportive testimony to Congress was made by
Budget Director David Stockman. But, after that, the proposals
received no serious attention.
          Nor are the prospects very bright for any federalism reform in
1984. An election year makes any major change difficult. Ironically,
the improved business climate argues against justifying any such
change to pecuniary enterprise. Finally the President himself seems to
have decided that foreign affairs need his attention and has entered
major engagements of American troops abroad.
          Has the Reagan federalism reform effort been a failure? The answer
here would have to be yes and no. There clearly 

has not been the whole scale reform
that Reagan wanted. In that sense he has failed. On the other hand a
fledgling block grant system is in place and the effect has been
increased latitude for local officials. It is a significant system
that will be of interest to community groups and others concerned
about empowerment at the local level.
          Does the apparent end of the Administration's states' rights push
mean an end to its challenge to federal institutions that protect the
disadvantaged? The answer is no! It only means that one tact has so
far proved ineffective. The Reagan Administration still has full
control of other federal compliance mechanisms (with the possible
exception of the U. S. Civil Rights Commission, a non-enforcement
agency), and has established a track record of lax enforcement
faithful to its anti-liberal views. The failure, so far, of the
Administration's federalism reform is merely brief respite in an
otherwise continuing attack on the rights of minorities.
          
            Alex Willingham is a political scientist currently living
in Shreveport, Louisiana. This article is drawn from his research as a
research fellow in public policy of the Southern Education
Foundation.
          
        