Urban Uprising

Brickbats for New Federalism

Ronald Reagan’s vision of his New Federalism had sounded almost idyllic. He would cut the nation’s states and cities loose from the oppressive purse strings of the Federal Government, leaving them with fewer federal dollars but more freedom to decide how they would be spent, and he would lower the burden of all taxpayers at the same time. Thus it came as quite a jolt to the President last week when some of the beneficiaries of this new freedom protested loudly that the President’s plan was hastily conceived, harshly implemented and downright unworkable. The chorus of protests rose at a Detroit conference of the National League of Cities, an assembly of 2,500 local officials, many from the medium-sized communities where grass-roots support for Reagan policies is supposed to run high.

“We must say to the President that the dream is going sour,” declared Minnesota Republican Senator David Durenberger, one of several guest speakers. “The tax cut has made it more difficult to finance state and local government. One more round of this New Federalism—conducted in the frenzy of the budget process—will discredit the concept entirely.”

A number of speakers argued that Reagan’s across-the-board cuts in federal programs fail to distinguish between those that are ineffective and those that work well to meet the minimal needs of the poor. Republican Mayor William Hudnut of Indianapolis endorsed the trend toward decentralization of government, but warned: “You cannot dismiss the poor. It’s like saying ‘Let them eat cake’ when they don’t even have bread.” Protested Cleveland’s Republican Mayor George Voinovich: “If you’re going to cut programs it should be done with a scalpel and not a meat ax . . . Otherwise, we’re in the strange position where a single national purpose is supposed to be pursued in 50 different ways with 50 different degrees of enthusiasm.”

One of the most carefully reasoned dissections of the New Federalism came from Vermont’s Republican Governor Richard Snelling, chairman of the National Governors’ Association. While the U.S. should not return to “the pork barrel and grant-in-aid grab bag” that had characterized federal-state relations in the 1970s, Snelling said, neither should “our sacred union of states become a confederation of competitors in which only the footloose can flourish.” He assailed Reagan’s contention that a person who does not like governmental programs in one state should “vote with his feet” by moving to another. He also criticized the President’s argument that using federal funds to aid particularly poor localities was a breach of the Constitution. Any reading of the Federalist Papers, said Snelling, shows that the founding fathers knew that “promoting the general welfare would require the Congress of the U.S. to take actions beyond those required to provide for defense.” The President’s policies, he charged, were leading toward “an economic Bay of Pigs.”

The sharpest, as well as longest, speech was delivered by a big-city Democrat, Mayor Ed Koch of New York. Terming “this so-called New Federalism a sham and a shame,” Koch predicted that “the dark side of President Reagan’s supply-side economics will be the further decay of our cities, the poor growing poorer, a decline in the education of our population and a more lonely and poorly serviced elderly.” Moderate Republican Senator Mark Hatfield of Oregon was just as biting, contending that Reagan’s policies boiled down to “cutting from the truly needy and giving to the truly greedy.”

The conference ended as the delegates passed a resolution asking the President to convene a domestic summit conference of federal, state and local officials before he proposes even deeper cuts in the 1983 budget. There to take the message back to Washingtion was Rich Williamson, the President’s Assistant for Intergovernmental Affairs. Williamson conceded that “two-thirds of the cuts we have made have come from state and local government,” but he argued that as inflation and interest rates decline, communities will be able to offset the loss in federal funding. That is a contention that local officials would like to debate with the President.