The Federal System Gets a Shaking

January 16, 1995|By NEAL R. PEIRCE

WASHINGTON — Washington. -- Along with its shift in rules and the bid to pass a balanced-budget amendment to the Constitution, the new Republican majority on Capitol Hill is moving with lightning speed to effect a historic shift of power from Washington to the states.

Significant action is coming almost daily. Consider for example unfunded mandates -- Congress' habit of imposing social and environmental regulations without paying the increased costs incurred by state and local governments.

An anti-mandate bill was introduced opening day January 4, got a Senate hearing January 5, was set for House floor debate within a week with congressional leaders saying they expected both houses' approval before President Clinton's State of the Union address January 24.

But anti-mandate legislation alone leaves the governors uneasy -- worried, as Republican Gov. George Voinovich of Ohio puts it, that the states may be victims of ''shift and shaft,'' whereby Congress tries to balance the federal budget by mandating more and more costs to the states.

So in a surprise move January 6, just two days after he became house speaker, Newt Gingrich promised to hold hearings and schedule a floor vote on an unfunded-mandates constitutional amendment. His endorsement was clearly designed to get governors on his side before the balanced-budget amendment moves out to the states for ratification.

Indeed, January 6 was the first day of what are promised to be quarterly meetings between Republican congressional leaders and the nation's Republican governors. In the partisan spirit of the times, the Republican national chairman gets to come, but Democratic governors and mayors -- regardless of party -- are being shut out. The exclusion has triggered strong complaint from National Governors' Association chairman Howard Dean, D-Vt.

Simultaneously, welfare reform is barreling down the new congressional track, with Gingrich & Co. promising action within the first 100 days. Radical action now seems all but sure to result, prompted by general concern over rising costs and conservatives' special desire -- spelled out in the House Republicans' ''Contract With America'' -- to cut off payments to unmarried teen-age mothers and deny them aid increases when they have more children.

Some pull-and-tug is emerging on the welfare issue. The governors have already been inundating the Clinton administration with requests for waivers to limit welfare. But governors don't like the idea of Congress setting the rules for them.

''Every city and state is different,'' Michigan's John Engler insists: ''That's why we need the flexibility to be different and to be creative in our strategy to reform welfare and restore hope.'' ,, Says Wisconsin's Tommy Thompson, who's won broad national notice for welfare reforms he's already been trying: ''I'm opposed to a national package. I don't want to export and force Wisconsin's ideas on other states.''

However the welfare-rules issue is settled, what does now seem likely is that the basic AFDC (Aid to Families with Dependent Children) and some six other welfare-oriented programs will be rolled into one block grant to the states.

Indeed, as many as eight new block grants, encompassing almost all federal aid to lower-income people, were on the table as the congressional leadership and Republican governors conferred January 6.

Examples: 10 federal food and nutrition programs, including food stamps (current cost $38 billion); 45 child-care programs, including Head Start and Title I school aid ($11.8 billion); 33 miscellaneous social-service grants including help for runaways ($6.6 billion); 38 child-welfare and child-abuse programs ($4.3 billion).

To top that, block grants incorporating 154 employment and training programs ($24.8 billion), 27 housing programs ($17.5 billion) and 22 health programs ($5.1 billion) are being considered.

''The reduction in federal personnel and federal bureaucracy is simply staggering when we start talking about collapsing some 336 programs down into roughly eight block grants,'' said Governor Engler.

Indeed, what's on the table is a revamping of American federalism, and a challenge to states to become true policy entrepreneurs. Last year's flurry of waiver requests to Washington will look almost quaint; now experimentation, by necessity, will become the norm.

One has to wonder how many states are ready to consider such a gigantic agenda of change so fast. It's still unclear what requirements will be laid on states to deal counties and cities into the action, so that the local governments that work daily with the poor don't discover they're just trading an indifferent Washington bureaucracy for an indifferent bureaucracy in their own state capital.

There's sure to be a spirited debate about the overall level of federal and state funding, and whether it's sustained well enough so that states can experiment effectively. Governor Dean is already complaining that the Republican's welfare-reform package would ''starve children and kick old people out of their houses.''

What now seems indisputable is that we're at a once-in-a-generation watershed point in American federalism. The question is no longer whether there'll be radical decentralization of power. It's how it will work.

Neal R. Peirce writes a column on state and urban affairs.

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