THERE IS TALK again of a New Federalism.
An impressively composed Committee on Federalism and National Purpose, under the leadership of Washington Sen. Daniel Evans and Virginia Gov. Charles Robb, has proposed a new division of responsibilities between the federal and state governments. The states would both accept new obligations and be relieved of some old ones. The 25-member panel recommended that any sorting-out be fiscally neutral, adding to the burden of neither level of government. The report is a reminder that, as Congress moves again to cut the budget and deficit next year, the burden on state and local government cannot be ignored.
Adjusting the relationship between the federal and other levels of government has been a favorite Reagan theme. The president in 1982 proposed a major reordering. Part of it involved a swap: the federal government, which already runs Medicare for the elderly and disabled, was also to take over Medicaid for the poor (funded then as now half federally, half by the states). In turn, state governments were to take over Aid to Families With Dependent Children (also half and half) and the food stamp program (which has always been all-federal). The federal government was to become the main national health-care provider, the states the main source of welfare.
The second part of the Reagan plan involved bunching more than 40 other forms of federal aid to state and local governments, and financing them through a disappearing trust fund. The fund was to be fed by the federal gasoline tax and the windfall profits tax on oil. These were to be phased down. As that occurred, state governments were to have a choice: levy their own taxes to continue the programs, or let the programs expire.
The plan failed on a number of grounds. For different reasons, governors and protectors of the welfare programs were uneasy about having the states assume the welfare burden. There was also the realization that the "trust fund" was the opposite of what the term implied, less a means of sustaining programs than a form of budgetary euthanasia.
Yet the president through his budgets has been able to achieve a de facto New Federalism. When he came to office, federal aid made up a quarter of all revenues of state and local governments. It now makes up a fifth. The heaviest budget cutting in the Reagan years has been among these state and local aid programs, which still constitute about a seventh of the budget, and they are likely to continue to be prime targets next year.
The Evans-Robb committee, composed mostly of moderates from both parties, said that a lot of these programs can and even should be spun off to the states today. That is the good news for Congress. In return, however, the committee said that the federal government should take over all but 10 percent of the costs of new minimal national benefit standards under both Medicaid and AFDC. This would make the federal government mainly responsible for caring for the poor. The committee also recommended a new program of special federal payments to the poorest states, to help them keep up. That is a fairer kind of New Federalism than the president proposed. But it won't balance the budget.