Remember the New Federalism? Well, you can forget it. One of the lessons of the tax revolt - indeed one of the reasons for it - is that the doling out of authority from Washington to the states and cities has not worked to limit the national budget and make government more responsive. On the contrary, the Washington bureaucracy and the local bureaucracies have teamed up in ways that send budgets soaring and make government less comprehensible than ever.
The new federalism, as Samuel Beer of Harvard has pointed out in a recent series of articles, was an approach thought up by true believers - anmely conservative republicans - in cutting down the authority of the central bureaucracy. That quintessential Republican, former congressman and defense secretary Melvin Laird, seems to have submitted, back in 1958, the first proposal for what later became known as "revenue sharing."
President Eisenhower favored the revolution of authority to the states and localities, and President Nixon in 1969 actually proposed a "New Federalism" to promote the "restoration of a rightful balance between the state capitals and the national capital."
Ronald Reagan gave the New Federalism conservative blessing in a statement during the 1976 campaign. "It has concerned me," he said in a statement justifying a previous claim that $90 billion could be lopped off the federal budget, "that many programs Washington administers aren't efficient and don't really help the people they were designed to help. I suggested that we consider them prime candidates for an orderly, phased transfer to state and local governments."
In fact such a phased transfer has been underway for years, and was given a huge boost by the passage of revenue-sharing legislation in 1972. But the result has been the opposite of what was originally predicted. The conservative Republicans have been as wrong about the New Federalism as the liberal Democrats were wrong about The Great Society.
In the first place government spending has not gone down. All that happened was that federal aid to states and cities went up. The total increased from $7 billion in 1960 to an estimated $86 billion for the coming fiscal year. Since 1972 when revcenue sharing was first enacted, the figure, then only $34 billion, has more than doubled.
The reason for this growth emerges very clearly in the light of the tax revolt set off by the passage of Proposition 13 in the California primary. Immediately after the vote cutting property taxes by more than 50 percent, Gov. Jerry Brown indicated that the federal government should refund to California the more than $2 billion that would not be deducted from federal income taxes because of the property tax cut.
Mayor Tom Bradley called on Washington to supply additional funds to keep city employment relatively constant. The Conference of Mayors meeting in Atlanta called on the federal government to pare its expenses while at the same time asking that there be no diminution in aid to cities.
What that experience demostrates is that revenue sharing has been the occasion for an alliance between the federal bureaucracy and the bureaucracies of most states, counties and cities. Far from cutting outlays, they work hand-in-hand to maintain programs in ways that keep budgets rising.
Worse still, the bargaining process whereby Washington doles out funds to the states and cities is distinctly irrational. It does not favor the most needy - indeed there is no definition of the most needy.
On the contrary it tends to work for those areas with the most know-how, and the biggest clout in Washington. Thus in the very midst of the tax-revolt fever, New York was able to get a $2 billion guarantee for the city - in part at least because the mayor, Edward Koch, and the governor, Hugh Carey, are former congressmen with great influence in Washington.
The practical working of the New Federalism, in other words, has contributed to make government seem - and indeed be - an uncontrollable monster. And the failure of a program conceived and endorsed by leaders with an undoubted interest in cutting down big government in Washington should serve as an additional warning to those who think there are quick and easy nostrums for taming the monster.