There is general agreement that the growth of the federal budget is out of control and surprisingly wide support for the president's efforts to restrain that growth. Yet there seems to be a corresponding level of misunderstanding of the president's plans to the states and to provide funding for those programs in the form of block grants. Some consider this merely an opportunistic political ploy. Others even suspect a sinister alliance with the specter of racism, with which the call for states' rights is often associated.
The fact of the matter is that controlling federal expenditures and what is called Reagan-federalism are inextricably connected. Without a structural shift of the sort the administration is emphasizing, there is little hope for long-term resistance to the burgeoning of the federal budget. Without sturctural reform, one can at best hope for restraint this year and next year, with the same irresistible pressures building irresistibly in the near future.
The administration's cure grows out of a sound diagnosis of the disease. Behind most federal social programs stands a good idea, and behind all social programs stand overlapping armies of direct and indirect beneficiaries -- in each case reaching into the millions. Included in these ranks are not only truly needy persons, of course, but always (asnd sometimes preponderantly) bureaucrats, experts, consultants, providers and their paid lobbyists. Since each program has a nationwide constituency of this size, every program can enlist a few congressmen as its champions. And at the federal level, experience teaches that it is far easier to placate even a small number of determined congressmen, thereby winning their support for some countervailing program, than to have a fight to the finish over what, after all, is a matter of no more than a few billion dollars.
Thus, while everyone seems to agree that federal spending should be reduced in the aggregate, there has been total paralysis in the face of burgeoning claims in every specific. In other words, we have here a classic example of an overgrazed commons. It is in everybody's interest to reduce the level of grazing on the federal commons, but each individual cattleman only has the incentive to graze more and more. This is why the administration had to come in with one total program of massive cuts affecting everybody. But the overgrazed commons analysis also stands behind the long-range strategy of devolution of responsibility for social programs on the states.
The more remote the level of government and the more unimaginable the amounts of money, the harder it becomes to grasp (much less to act on) the connection between any one program and the overall disarray of our national budget. Experience has shown, however, that at the state level the painful truth that 2 billion + 2 billion = 4 billion is much more likely to sink in. Through governors, mayors and state legislators don't like balancing their books anymore than do congressmen -- through the hard choices and their human costs are no easier at the state level -- the understanding of the need for hard choices is much greater there provided that the sums available are known to be limited and determined. Thus, for political and psychological reasons, a more national attitude toward expenditures and trade-offs in a period of limited resources is likely to prevail at lower levels of government, among smaller units.
There is another, more creative, less defensive aspect to the administration's federalist strategy. If the federal government makes the wrong choices, favors the wrong beneficiaries, the result is a uniform, inescapable disaster. Mistakes made at the state level are more easily correctable. They are recognized by other states with similar problems, the mistakes perhaps are not duplicated, and the overall impact of one mistake in 50 on the national life is contained.
Just as important is the fact that if a state makes foolish or burdensome choices, there is, after all, a way out. Workers can and do migrate -- as census figures have amply demonstrated. Industry can be repelled or attracted. In short, there can grow up something akin to the discipline of the market to control the excesses of politically unreasonable decisions.
On the national level, this discipline of choice and diversity cannot walk at all. On the contrary, the forces operate all in the opposite direction -- constantly shoring up what is wasteful and inefficient, constantly increasing the burdens on industries and producers who are effective and productive.
A serious problem in the administration's strategy has to do with identifying those areas in which block grants are not sufficient to ensure a safety net under the truly needy. It is not possible to do wholly without federally mandated programs or federally mandated standards. Another problem relates to the size of the block grants. The size of the grants must reflect not only the relative contribution of each state's economy to the federal Treasury, but also the differential levels of need and capacity to bear the burdens of social programs. It is not the purpose of the block grants to deprive the needy or depressed communities of necessary aid. Rather, it is a strategy for bringing about a rational and responsible attitude toward the utilization of and the claims for aid, whatever the aggregate amount.