Much like undertakers chasing an ambulance, the press is now rushing in to declare the death of the "new federalism." One is impressed by the swiftness and clarity of this editorial judgment, since so little was known about the illness that had afflicted this presidential initiative.
There is, of course, a plague in the land. Inflation and recession have bedeviled our economy for more than a decade. As a result, business is responding to tax cuts by lowering new investment. Unemployment is at a postwar high. And interest rates keep consumers at bay and workers idle. That our papers should be filled with obituaries is no surprise.
But the new federalism? Governors and mayors were under the impression that it was the old federalism that had given up the ghost. After two decades of boundless growth, federal assistance to state and local governments began to decline in 1979. Unable to control the uncontrollables, Congress was controlling the deficit by cutting the 500 grant programs that send 85 billion discretionary dollars through the intergovernmental pipeline. And state and local officials had launched a determined assault on the mandates and regulations that had tied the federal partnership into paralysis.
It seems only a few short weeks ago that the president offered a "bold stroke" to remedy these troubles of the old federalism. Far from being ill-considered, his framework was based on a decade of recommendations made by state and local interest groups. He offered full federal responsibility for the rapidly growing Medicaid program. He offered to return without strings programs that have always been administered by state and local government. He offered to share federal tax resources to finance these programs. And he offered to negotiate the particulars and make the transition gradual.
Apparently, some believe that a remedy for our ills is not possible. Changes in the direction of American government, they insist, must be incremental. Going bankrupt a dollar at a time is possible because it is incremental. Taking bold action for recovery is a waste of time when all of us are so busy calculating the precise size of the deficit and guessing the day on which the debt will exceed $2 trillion.
There are those who ask that we put off any policy debate until we balance the budget. We are wasting our time pretending that we can balance the budget without making policy changes. As the Congressional Budget Office has reported, current policies mean that the budget is permanently out of balance and the deficits grow year by year. Scraping together a few revenue enhancers and denying cost-of-living increases for this year and next does not restore an underlying balance to the budget process.
The president has proposed that we return some important responsibilities to state and local officials. We have reached the point where very few Americans can comprehend the scope of federal activities. In addition to the 500 grant programs for state and local government, there are another 500 to assist businesses and individuals. The defenders of the status quo say that we dare not change these programs, because we do not understand them. What the American public understands is that the federal government is trying to do so much that it no longer has the understanding to do anything well.
The president has proposed that we make better use of all of our institutions including the marketplace, the voluntary association and the family to achieve our goals. We can no longer afford to doubt the capacity of these institutions to meet the needs of the American people. The balance we seek in the government's budget depends on a balance of reponsibilities among all of our institutions. Income security for all Americans should be a first priority of the federal government. But that does not mean we should measure our security by the size of the Social Security check or the number of our citizens dependent on public assistance. Income security is part social insurance and part public assistance, but our goal as a nation should be for as many Americans as possible to achieve income security through their own earnings and savings.
Sweeping changes in health care, income security and federalism are risky propositions, if we can only trust the federal government. Those who doubt that consumers can make wise health care decisions, will defend the sick care system run by the federal government. Those who doubt that Americans can achieve income security through earnings and savings, will insist that taxes be raised until jobs are scarce and saving beyond the reach of most families. Those who believe that state and local governments haven't changed in 50 years will pronounce an early death for any "new federalism."
Remedies for a troubled society are needed now. The Reagan remedies seek to decentralize America, relying on the health of our families, voluntary associations and local governments to give direction to our future. That congressional politicians and purveyors of public opinion fail to see renewed health by this remedy is no surprise. In the world of ambulance chasers, no remedy is appreciated.