Hearings on the Federal Role, Commission Report

Hearings on the Federal Role

ADVIsOnvCOYYIsslO* on I*TsnQOVsnYYsllTAL nsl.ATIOns Washingtoin, D.C. 20575 l October 1980 A-87 Preface

T he Advisory Commission on Intergovernmen- sponsibilities, and revenues among the tal Relations (ACIR) was established by Public several levels of government. Law 380, which was passed by the first session of Pursuant to its statutory responsibilities, the the 86th Congress and approved by the President Commission from time to time has been requested on September 24, 1959. Section 2 of the act sets by the Congress or the President to examine par- forth ~the following declaration of purpose and ticular problems impeding the effectiveness of the specific responsibilities for the Commission: federal system. The 1976 renewal legislation for Sec. 2. Because the complexity of mod- General Revenue Sharing, Public Law 94-488, ern life intensifies the need in a federal mandated in Section 145 that the Commission: form of government for the fullest coop- . study and evaluate the American fed- eration and coordination of activities be- eral fiscal system in terms of the alloca- tween the levels of government, and be- tion and coordination of public resources cause population growth and scientific among federal, state, and local govern- developments portend an increasingly ments including, but not limited to, a complex society in future years, it is es- study and evaluation of: (1) the alloca- sential that an appropriate agency be es- tion and coordination of taxing and tablished to give continuing attention to spending authorities between levels of intergovernmental problems. government, including a comparison of It is intended that the Commission, in other federal government systems. (5) the performance of its duties, will: forces likely to affect the nature of the (1) bring together representatives of American federal system in the short- the federal, state, and local governments term and long-term future and possible for the consideration of common prob- adjustments to such system, if any, which lems. may be desirable, in light of future de- (5) encourage discussion and study at velopments. an early stage of emerging public problems that are likely to require intergov- The study, “The Federal Role in tbe Federal ernmental cooperation; System: The Dynamics of Growth,” with which (6) recommend, within the framework this hearing dealt, is part of the Commission’s re- of the Constitution, the most desirable sponse to this mandate. Staff were directed to: [a) allocation of governmental functions, reexamine the present role of the federal govern- ii merit in the American federal system; (b) review and now serving witb the Department of Public theoretical perspectives on American federalism, Affairs, University of Minnesota, Minneapolis, the assignment of functions, and governmental MN; and Neal R. Peirce, consulting editor, Na- growth; and (c) identify historical and political tional Journal, Washington, DC--on the summary patterns in the development and expansion of na- findings and initial draft recommendations con- tional governmental domestic activities. sidered by the Commission at its 69th meeting This hearing was held to elicit the views of four held on March 13-14, 1980. Hence, it serves as intergovernmental authorities-William G. Col- part of the Commission’s response to the Congres- man, consultant and ACIR’s former executive di- sional mandate. rector; Prof. Daniel J. Elazar, director of the Center for the Study of Federalism, Temple University, Philadelphia, PA; Prof. Arthur N&din, a former Abraham D. Beam Commission member and Mayor of Minneapolis Chairman Acknowledgments

T.his volume was prepared by the governmental demon, Gov. Bruce Babbitt, State Sen. Jason Boe, structure and functions section of the Commis- Supervisor Lynn G. Cutler, Gov. John N. Dalton, sion. Major responsibility for the staff work was Freeholder Doris W. Dealamen. Rep. L. H. Foun- shared by David R. Beam, Cynthia C. Colella, end tain, the Honorable Bill G. King, Mayor Tom Bruce D. McDowell. Lyon C. Schwalje assisted in Moody, Mayor John P. Rousekis, and the Honor- editing and provided secretarial support. able Mary Eleanor Wall, as well as Deputy Mayor This~ hearing focused on the draft recommen- Ray Remy of Los Angeles, representing Mayor dations [see Appendix A) presented for Commis- Thomas Bradley, end Assist. Sec. Donna Shalala, sion consideration and was designed to help fa- representing Secretary of Housing and Urban De- cilitate its deliberations on these proposals on velopment Moon Landrieu. March 14, 1980. Therefore, special thanks go to The Commission gratefully acknowledges the the four witnesses who helped make this pro- assistance and cooperation of the witnesses, both ceeding the lively and informative event that it in preparing their statements end in editing their was: William G. Colman, Prof. Daniel Elazar, Prof. respective portions of the recorded trtiscript. Arthur Naftalin, and Neal R. Peirce. Commission Full responsibility for the accuracy of the hearing members attending the hearing included Chair- record rests, of course, with the Commission and man Abraham D. Beame, State Sen. Fred E. An- its staff.

Wayne F. Anderson Executive Director David B, Walker Assistant Director

iv Contents

Chairman’s Opening Remarks ...... 3

StaffPresentations ...... 5

Statement Presented By Professor Artlmr Naftalin, Hubert H. Humphrey Institute of Public Affairs, University of Minnesota ...... 15

Statement Presented By William G. Colman, Consultant...... 23

Statement Presented By Professor Daniel J. Elazar, Director, Center for the Study of Federalism, TempleUniversity ...... 29

Statement Presented By Neal R. Peirce. Syndicated Columnist, Conkibuting Editor, National Journal ...... 39

Appendix A: The Federal Role in the Federal System: Analysis of Basic Findings, Key Questions Raised, and Recommendations ...... 45

Appendix B: Reshaping the National Government’s Role in the Federal System

Formal Statement of William G. Colman, Consultant...... 73

Appendix C: Is the Federal System Still There?

Formal Statement of Professor Daniel J. Elazar, Director, Center for the Study of Federalism, Temple University...... 83

A Hearing on The Federal Role in The Federal System Conducted by the Advisory Commission on Intergovernmental Relations

March 13,198O New Executive Office Building, Room 2010 17th and Pennsylvania Avenue, NW Washington, DC

Chairman’s Opening Remarks

B efore we have the hearing on this very important major subject-“The Federal Role in the Fed- eral System”-I’d like to take this opportunity to welcome to the meeting two new Commission members: Gov. John N. Dalton, who had been appointed prior to this meeting but couldn’t attend the last one, and Ms. Mary Eleanor Wall, who is the newly appointed public member of the Com- mission. We welcome you here. We know that we’re going to get a great deal of help from both of you. The program for today, incidentally, does+ not require a quorum because a hearing under our rules is permissible if two members are present. The plan first provides for a staff briefing of this long study, and then we will hear from four witnesses whom we’ve asked to appear, each of whom is expert in the field and is very well- known to the Advisory Commission of Intergov- ernmental Relations (ACIR). They will be intro- duced as they are called, and each will make a presentation of about 10 or 15 minutes, or whatever time that is necessary. Following each presentation, discussions and questions from Com- mission members will be appropriate. It is expected that no action will be taken at this meeting in connection with this subject, but we will meet tomorrow at 9:OO a.m., 6s is indicated in the docket book. That meeting will take place in the Rayburn Building, Room 2154. Now, if there’s no question that anyone wants to ask, we can begin by having the staff, led by Dave Walker and followed by Bruce McDowell, Cindy Colella, and Dave Beam, make a brief presentation on the subject of the federal role in the federal system.

Staff Presentations

INTRODUCTION BY DAVID B. WALKER

Mr. Chairman, members of the Commission. 1x1approximately 40 minutes, we’d like to highlight two years of work. This will be done in four parts. In a moment Bruce McDowell will highlight major findings as we’ve discovered them, using some graphics that have been passed out to you. Subsequently, Cindy Colella will suyarize a very difficult chapter that she did and which you have received, describing the process, and political dynamics by which the federal role has become what it is. This is largely an input type of analysis that Cindy will get into. Next Dave Beam will highlight the outputs and some of the criteria relating to functional assignmentthat we’ve looked at and made judgments on. Finally, there will be a brief windup on my part. At this point I’ll turn it over to Bruce McDowell, who will begin to highlight the graphics that you have in front of you. PRESENTATION BY BRUCE D. MCDOWELL

This is a little booklet entitled “Briefing on In- dicators of Federal Gmwth.” I’ll :o through it quite quickly, with the idea of simply orienting you to some of the data that we have available. If these data seem appropriate during your discussion tomorrow, we can go into it in more depth, and I’ll be happy to answer any questions that might be pertinent.

5 This is a briefing on Chapter 2 of Volume I of If we look at federal employment per thousand this series-A Crisis of Confidence and Compe- population, it’s been declining for soma, time. If tence. Chapter 2 is one of three chapters that was we look at it in terms of per million dollars of mailed to you in a separate package, at about the outlays of the federal government, it’s really gone same time as your docket book. down steeply. So there is an awful lot more The chapter is broken into three parts. The first money than people in the federal government. part deals with the size of the federal government. The story is beginning to be somewhat the same The second part deals with the increasing scope with regard to federal aid. If you look at page 48, of activities, the broadening functions of the fed- Figures II-19 and 11-20, you’ll see on the left-hand eral government. The third deals with what we’ve side, in actual dollars, that federal aid is still called “The Depth of Federal Influence”-that going up, as is the number of programs. But if you is the pervasiveness of the effect that federal pro- switch over to page 61, Figures II-38 through II- grams and policies have on all of us. 41, you’ll see in every case+percent of GNP, per- Let’s start by taking a brief look at “size.” cent of federal outlays, percent of state and local The federal government, obviously, has gotten expenditures, and in constant dollars--that fed- much larger in many ways. This has happened eral aid has begun to decline. This has been going mostly since the 193Os, but with increasing rapid- on for two or three years now. Some people be- ity since the 1960s. You can see that on page 41 in lieve that perhaps we are past the big growth pe- Figure 11-1: those bars indicate the period of rapid riod in federal aid. It certainly seems so this year. growth in current dollars or in actual numbers of Well, so much for size. Let’s take a brief look at employees or whatever the indicator is there. You the scope of the federal government. If you turn can sea that all of those indicators up toward the to page 66, Figure II-54, you’ll see the point in top have had rapid growth since the 1930s. As we history at which each of the federal departments go down the list, there is more recent growth. But was established. in almost every case, that growth continues right You can see that there are three stages. First is up to the present time in current dollar or actual the institutionalization of the federal govern- number terms. ment-that is, State, Defense, Treasury, and Jus- Now, if you take into account the growth in the tice were created early. Then the big middle size of the nation and the economy, as measured group was economic development, with I&nterior, by the Gross National Product (GNP) and other Agriculture, the Post Office, Commer& and relative ways of looking at this growth, there is Transportation, and Energy later. The mora recent much less startling growth than you might otb- kind of department has been in the area that might erwise think. That’s indicated to you cm page 67, be termed “social benefits,” with Labor, Health, Figure 11-31. The blank space toward the right- Education, and Welfare (HEW), Housing and Ur- hand side of those bars indicates that the rapid ban Development (HUD], and the new Education growth has begun to level off, or in some cases is Department coming along in Stage III. even in decline at the present time. Figure 11-7, on page 43, includes not only de- There is therefore quite a difference between partments of the federal government, but also ma- looking at these in figures straight out of the bud- jor agencies. As you can see, although this graph get and looking at them in relative terms-per- only goes up to about 1974, the 1970s saw a real centages of GNP, of population, of state and local surge in the development of new agencies. There expenditures, of all government, and so on. were sane other smaller surges earlier. I think one of the most startling things you can On federal aid, prior to 1960. federal aid pro- see on page 63 is that civilian employment in the grams were rather few and far between. Not too federal government really passed its peak growth many functions were receiving federal aid prior quite some time ago, particularly in relative in- to 1960. In 1978, however, there ware multiple dicators, which are the four boxes toward the top programs in almost every category that you can of the page. think of. The federal grant programs actually Employment in all governments together-fed- funded in 1978 for state and local governments eral, state, and local-is pretty level now. The fed- numbered 492 categorical aids. To that. you add eral government experienced a jump during World five block grants and General Revenue Sharing for War II, but otherwise has been pretty level. a total of 498. There is really a graat deal more

6 variety occurring in federal aid in recent years out to others as transfer payments, aid programs, than there ever was before. or incentives in the tax system. Thus, 70% of the On page 70, Figure 11-59, you can see that not federal influence isn’t through services it pro- only are there more types of federal aid, but more vides itself. This means that we have to look in a a& getting big money. If you look at the graph at pretty broad way across the activities of the fed- the top, 80% of federal aid went for income se- eral government to see what its full impact is. curity and transportation in the mid-1950s. That Very briefly, concerning the depth of federal in- has dropped to about 30%. Big new categories fluence, federal taxing and spending is affecting have developed for education, training, health, everyone. Page 83 shows how it affects individ- general fiscal assistance, and community and re- uals. Through income tax, about 80% of us are gional development. We’ve really branched out. involved. Through social insurance programs, If you look at Table 7 below, in 1950 there was around 90% of payrolls are subject to Social Se- only one program, one type of aid, that was get- curity and unemployment insurance. Almost all ting over a billion dollars. If you look at 1980, people 65 years and older are beneficiaries one there were saven areas of federal aid that big. way or another of federal financial aid. And wel- Pages 52 and 68 examine the total budget of the fare, of course, has grown quite substantially. federal government, not just aid. You can see on In terms of the effect of regulation, the vertical page 68, Figure 11-57, that defense programs really lines on page 85, Figure U-89, show the tradi- have moved down, while domestic programs have tional kind of regulation-where a regulation af- moved up, particularly for income security, health, fected a single industry. If you look at the hori- and education. In types of expenditures on page zontal lines, on the other hand, these regulations 52, Figure B-26, you can see that grants-in-aid and really affect all of us. The Consumer Product domestic transfer payments have been the big Safety Commission affects all consumers. OSHA gtiwth areas. affects all workers. Equal employment opportu- Page 50 shows that there’s been a tremendous nity affects everyone that is in the job market. En- growth in the use of loan guarantees and the use vironmental protection affects everyone that lives of tax expenditures to carry out federal policy, in our environment. Thus, the effect of these rather than always using direct grants. newer federal regulatory i . programs is much The top graph on page 77 shows how new reg- broader than the more tradItIonal, single iddustiy ulatory programs of the federal government have ones. been established. Economic regulation was big All this results in a lot of paperwork and com- back in the early part of the century. But the ones pliance costs. These are outlined for you on pages that have been growing recently have been health 47, 98, and 100. I don’t have time to detail them. and safety regulation-with agencies such as the You can see on pages 48,61, and 85 that federal Environmental Protection Agency (EPA), the Oc- aid dominates more and more agencies. This~ data cupational Safety and Health Admininstration is just for state agencies. But Figures II-21 (page (OSHA), and the Consumer Product Safety Com- 48) and II-90 (page 85) show that 75% of all state mission-and social equality regulation consist- agencies are receiving some federal aid in one sort ing of programs for civil rights, the handicapped, or another, while about 25% of state agencies re- and the disadvantaged. ceive 50% or more of their budgets from federal The lower graph on page 77 shows that admin- dollars. istrative funds to run these regulatory programs On page 89, Figure II-92 roughly correlates the have increased only very recently, particularly in enactment of some major federal bills with the the areas of consumer safety and health. That’s growth of litigation. See civil rights in 1961. the really big one. Others have grown, too. Around 1970 environmental protection comes in. If you turn back just a moment to page 52, Table Amund 1974 or so, consumer product safety 4, If you look at the right-hand side of this table, comes in. There sre other laws indicated also. Lit- you will see that 30% is for ditict federal opera- igation has continued to increase as these laws tions, or what you might term the services that have come along, and much of it can be attributed the federal government itself provides. That’s to them. only 30% of the total federal financial influence, Despite all this federal growth, a look at some whereas 70% is in financial benefits that are given individual functions, on pages 72 and 73, shows

7 that the federal financial share turns out to be rel- up with a composite picture of the policy pro- atively small in most functions. On 72, the only cess-of the actors, forces, and political dynamics function that shows up with significant federal that have shaped the current federal role. participation is welfare, where about 50% of the As might be expected, the picture was very money going out from state and local expendi- complex. Policies are made in an interactive and tures has a federal origin. On 73, you can sea the reactive environment. Yet, despite this complex- two functions in which the federal government ity, we were able to discern some very clear policy really dominates--social insurance grants, as well determinants and dynamics that were commcm to as housing and urban renewal grants. But, by and all or most of the cases studied, particularly over large, most programs aren’t dominated by federal the past tan to 20 years. money. They have more state and local money, For the next few minutes, I’d like to present our mom private money, or a combination of both. major findings in the realm of political dynam- Finally, concerning employment, page 76 shows ic-r who and what make government grow. that only one major intergovernmental function Since the mid-1960s and continuing at an ac- has large federal employment in relation to state, celerated pace through the 197os, two factors or local, or other. That is natural resources, where forces have been the major contributors to the the federal government is a large land owner, with growth of the federal government. Ths first and the federal forest and reclamation projects, Na- most important in the sense of program initiation tional Parks, and so on. Most of the rest are run or first generation policymaking has been the largely by state and local employees. widespread existence of policy entrepreneurs That is a brief summary of the chapter. I can within government. A policy entrepreneur is so certainly take questions tomorrow or anytime that named because he or she acts in the public sector you care to pose them. much like an entrepreneur or producer in the private sector. That is, the policy entrepreneur par- MR. WALKER: Thank you, Bruce. ceives something to be a problem or a potential Next, we will have Cindy Colella give us a brief national public issue, devises a strategy (such as description of her chapter from Volume X of the a regulatory or grant strategy) for solving the series, which deals with the dynamics and the problem, and then seas or attempts to~see the &at- primary, secondary, and tertiary actors in this egy through to programmatic or policy fruition. drama. This provides a perspective of about 30 to Obviously this sort of entrepreneurship is not 40 years, really. a new phenomenon, and in one of our case studies, we identified an instance of individual policy PRESENTATION BY entrepreneurship as early as the 1650s. But in the CYNTHIA C. COLELLA past 20 years, and even more so in the past ten Thank you. Bruce has just given us the broad years, such entrepreneurial activity has distin- picture or macro view of the current size, breadth, guished itself in two very important ways, and and depth of the federal government. But our with profound consequences for the current size study also tried to determine on a micro level how of the federal government. and why this growth occurred, and what have First, although policy entrepreneurs are found been its effects. throughout government, they are primarily, and We attempted to do this through a series of especially since the 197os, found in Congress. In functional case studies covering a broad and rep- fact, in each of the case studies, Congress played resentative range of federal policy endeavors- the most consistently crucial role, and in all but fkom the very large to the vary small. These seven one, the Congressional iole was manifest most case studies, six of which you have received, de- often not in the form of Congress as an institution, tail the federal role in public assistance (both cash but rather in the form of Congress as au individ- categorical and food stamps], unemployment, el- ual. In other words, through Congressional entre- ementary and secondary education, higher edu- preneurship or issue activism. cation, environmental policy, library assistance, The other and more significant characteristic of and fire protection. modern policy entrepreneurship, however, is its From these studies, each of which was entirely frequency, and by and large, this frequency has unique in certain respects, we were able to come been due to the breakdown of certain traditional barriers to new program initiation. The weaken- program alive, enlarge the policy arena, and/or ing of constraints began slowly in the mid-1930s add on to it with additional programs. At that with the virtual demise of Constitutional limits to point, for all practical purposes, the interest, and federal activism. Gradually, this legal unfettering consequently the policy, will have become en- was bolstered by changing public attitudes and trenched. expectations and, consequently, the breakdown of Professor Aaron Wildavsky of Berkeley has re- most political constraints to program activism in cently written that, “because policy is evermore the 1960s. Moreover, in the 1970s the trend to- its own cause, programs depend less on the ex- ward widespread policy entrepreneurship was ternal environment than on events inside the sec- encouraged even further by the dismantling of tors from which they come.” In other words, pol- many institutional and leadership constraints. Fi- icy, once begun, tends to achieve its own internal nally, the whole process was abetted, until very momentum. It becomes its own reason for being. recently, by the lack of immediate fiscal con- After initial enactment, through intense group straints. maintenance and expansion efforts, a program or As a result of all these factors, program initia- grouping of programs rapidly tends to become in- tion has become a relatively unrestrained activity. stitutionalized, or put less kindly, it becomes in- There seem to be no mechanisms left for separat- tractable. ing large-scale injustices from small grievances, The fallout from hyper-responsiveness in the important issues from trivial questions, or prob- first generation of policymaking becomes a kind lems of national significance from those of local of policy obstinance in the second generation- interest. Every problem becomes a national action an obstinancy in which unworkable programs item, often with little thought of the practical flourish along with the good, in which the system post-enactment consequences, and quite often all too often is overloaded with unmanageable with the result that the large array of minor issues and nationally unnecessary programs. frustrate efforts to devise solutions to large, gen- The practical, the programmatic, and the im- uinely national problems. plementation results of this policy dynamic will In short, the old complaint about government now be discussed by Dave Beam. not being responsive has been turned upside down. Through the process of unconstrained pol- MR. WALKER: Thanks, Cindy, very mudh. icy entrepreneurship, government has become al- From Dave we will hear more on the fallout. most indiscriminately hyper-responsive. Our second major finding in the realm of political dynamics deals with existing policies. In this post-initiation or second generation policy phase, PRESENTATION BY an entirely different dynamic takes over-one that DAVID R. BEAM tends to change first generation hyper-respon- sivaness. into policy intransigence. There has been an organization that we are It has become nearly common wisdom that new trying to follow here in the three presentations. programs are made by, and for special interests. In Bruce McDowell was explaining the changes in fact, in most instances, the case studies demon- the size and scope and regulatory depth of the strated the opposite causal pattern-new special federal role-especially over the past 20 years, but interests are formed, more often than not, by and a broader sweep of history as well. Cindy Colella for new programs. For example, a common policy was describing the political patterns we found to scenario sees the creation of a program by a policy be typical in policy development, who the actors entrepreneur, and upon creation of the program, were, and how things occurred on the political groups+&m entirely new groups-who per- front. ceive themselves to be potential program benefi- The chapter I want to describe is the third of ciaries will rush to fill the newly created policy the background chapters that were mailed out to space. you. It attempts to be evaluative and judgmental Having built themselves rapidly around the about the results of the political patterns and the program and into the policy space, these “result- changes in governmental activity that we’ve stud- ant interests” thereafter will strive to keep the ied. It’s the only one which really takes an ex-

9 plicitly nmnative and explicitly evaluative cast I think it’s fair to say that in past years, when to it. the intergovernmental sector was smaller, less The chapter is the “Federal Role; Criteria, As- complex, and less overloaded than it is now, the sessment, Analysis” from Volume X of the federal descriptions were a little more accurate. But as role series. If you want to follow along, you can time has passed and as we look at current con- look at the summary bullets that are in the last ditions, all of these norms or ambitions become couple pages. less and less descriptive. Some perhaps were The question really is: “How well does all of never really very descriptive of actual existing this work?” What are the programmatic implica- grant programs, as opposed to what an ideal sys- tions of the political patterns that we have de- tem might be like. The shortcomings that we scribed, of the entrepreneurial pattern of program found are greatly associated with the problems in initiation, and the rigidities of the second gener- the political process or the characteristics of the ation policymaking? political process that have already been de- I think the summary judgment would be that scribed. we found very serious deficiencies in many of the Let me try to give you an example of a typical program areas, as well as in the political process grant program. There is no one pattern, of course. that led to creation of many of the programs we Every program in every functional area has its studied. unique features. Still, it is possible to put together There have been five standards that ACIR has a story that has elements in ccmmmn with many used in previous studies to evaluate assignment- real programs. of-function issues. The terms will be familiar to A typical program is established, as Cindy Co- you instantly. One is the concept of “national pur- lella suggested, through the activities of one or a pose.” Others are the idea of “fiscal equity,” of small group of entrepreneurs, most commonly in “administrative effectiveness,” of “economic ef- the Congress, perhaps with some support from a ficiency,” and of “political accountability”al1 few affected interest groups, perhaps with a mod- standard norms that can be applied to govern- est Presidential push-a Presidential endorse- mental programs and decisionmaking. ment--at one point or another, but with very little In the past we have tried to show or suggest consideration of real national needs and priori- how these might be used to evaluate or assess the ties, and what would be the best mech+nism for proper activities of government at different levels, addressing them. especially within states-state and local levels, There is another way, a reverse way, of stating metropolitan, and so forth. Here we try to use the same idea. It’s been possible to justify an en- them as evaluative standards for the intergovern- actment of almost any character in almost any mental system as a whole and see how it stacks area as in some manner addressing one or another up in the five criteria in that manner. Each stan- generally accepted national objective or goal; dard frequently has been used in political rhetoric helping to reduce unemployment; helping to ad- and argumentation for the creation of new pro- vance national defense in some fashion: helping grams, as well as in the literature on intergovern- to protect the environment; and so on. Some of mental relations. the case studies-for example, fire protection- It’s been hoped or thought that intergovern- offer a fascinating story. It showed how some mental programs can be used to advance major global types of national concerns can be inti- national goals and leave other matters to state and mately involved with a very local service. local decision; to help equalize income among The typical program employs an allocational poor people, as well as among states with lower formula. Or if it’s a project grant, the funds are fiscal capacity; to help equalize service levels; to allocated by federal agencies in a manner that provide an effective and efficient means for ad- ends up dispersing moneys very, very broadly ministering services on a cooperative basis; and among states and localities, rather than targeting to assure the responsiveness of the political sys- funds to the areas that have the greatest fiscal tem and the needs of all other systems. Our find- need or the greatest programmatic need. This is ings, however, cast serious doubts on all of these necessary, or at least it happens frequently, be- propositions. We found serious deficiencies in cause it speeds passage in Congress and helps these five areas. maintain a supportive political coalition. But the

10 politics of the situation work against the ideals of grams are adopted and developed in the initial equity. instance and thereafter. The problems of Intergov- A typical program is created without very much ernmental programs and the intergovernmental attention to its probable effectiveness in solving system, and problems of which we’re all aware of the problem that it addresses; its possible costs or in the political arena, in the national policy pro- disadvantages which might be imposed either di- cess, are very, very closely related. rectly or through various side effects: and the problems that might occur in implementation, SUMMARY COMMENTS BY either at the federal, state, or local levels. There DAVID B. WALKER is little attention as to whether or not the capacity to effectively implement the program is available; To complete tbis presentation on behalf of the what the courts might make of it should they be- staff, simply project yourself back in time to the come involved; and little consideration of alter- year 1960, or even as late as 1963, and then place native mechanisms that might be employed for yourself where we are now in the year 1980; ob- accomplishing the same objective. serve the changes over the past 17 to 20 years. Finally, the political accountability point. You These, I personally feel, are more dramatic and remember that we’re talking about something ap- have had more impact on the system than those proaching 500 grant programs. A few are well- of any other 20-year period in American history. known, but the typical program is largely invisi- Most of this change has occurred In ways that ble to the general public: does not get much at- permit us to think we are still pretty much under tention on the floor of Congress, within the White the same system that prevailed under Presidents House, or by the political parties: does not become Dwight Eisenhower or John Kennedy. an election issue; and, instead, is chiefly the prov- Now, how does one paint this extraordinary ince of a comparatively small group of special- picture of change vis&vis the federal role? ists-people with expertise who usually have If you go back to 1960, aware of points that some kind of direct and professional or occupa- Bruce McDowell made, the federal government tional stake in the issues involved. Each program then had assumed a significant role in promo- is a little political arena of its own. tional activities, subsidies. and regulation, pre- For this reason-Cindy Cole& was describing dominantly in the economic area. Its intergovern- this in the terms of the resultant group or the in- mental role was small, and its direct servicing mle stitutionalization of policy-me a program is in wes minimal. It had only a couple hundred thou- place, it tends to become very resistant to reforms sand employees less than we have now. or to termination in the light of changing national If you look again at the picture in 1960. federal needs, because it involves a problem that is of aid amounted to $7 billion and included about lesser priority, or one that has been solved or re- 132 programs, three-quarters of which were fo- duced, because of actual program performance. cused into four areas. In an administrative sense, To reverse the logic and state this in a positive those areas really were old ones. ranging from way, we found very few programs that have been over 50 years in one instance, to 27 for another, adopted with a careful weighing of national prior- to two standing with 33 years in terms of admin- ities, in which there was a well designed alloca- istmtive linkages with state government. tion program that targets funds to the most needy These were primarily federal-state relation- jurisdictions, where the program was very care- ships. Local governments at that point were caught folly conceived and thoughtfully developed or up in approximately only 8% of the aid in a few devised in a manner that takes full account of the programs-urban renewal, public housing, a little problems that might occur in the implementation, bit of airport aid, one or two natural resource pm- and which was adopted in a manner that gave it grams that reached rural counties. That was it in full consideration by a broad range of affected in- terms of federal-local assistance. In terms of total terests and by the public. dollars, 1% of local revenues from own sources In short, a lot of deficiencies of particular in- derived was represented by federal aid in the year tergovernmental programs or in the intergovern- 1960. One percent! mental arena as a whole are closely related with At this juncture, 20 years later, there’s no n&d political deficiencies in the ways in which pro- to regale you with the numbers. There’s no need

11 to regale you with the cost. There’s no need to That’s just the tip of the peak in the assistance regale you with the ins and outs of the “explosion iceberg in terms of the c~ncems of the Congress in the eligibles.” There’s no need to regale you and of some folks in all Administrations. These with the significant shift in the regulatory role- grants suggest what passes for the national inter- from the economic into the social. Nor is it nec- est and the concern for the national interest. essary to highlight the way in which, at this Immense intergovernmental areas exist that are point--and it’s emerged only within the past 12 a source of fundamental, major national concern, years-we utilize grants-in-aid as a new regula- but these seem to become trivialized in the same tory technique. sense that these trivial issues have erupted on the In the old days, this was the job of independent national level. I won’t say they are all treated on regulatory commissions or of units within the De- a par. There’s a dollar differential between them, partment of Justice directly impacting on the pri- thank goodness, with about 440 on one side ag- vate sector, but not utilizing grants in any sense gregating about $8 billion, and about 56 on the for national regulatory purposes. To put it differ- other side, aggregating about $72 billion. ently, the conditions attached to grants in 1960 We have reached, therefore, a point where there were specific to the program, were of a financial, are similarities with the past. The politics look managerial, or programmatic character. The con- familiar. It’s mostly the traditional technique by ditions now encompass these older concerns of a which we get things done in this country. There’s government disbursing funds to another jurisdic- nothing particularly new about it. And it’s called tion, plus an army of conditions that do not relate log rolling. But at this point, to use the grant-indirectly to the purpose of the program at all. So a aid system in the same fashion that we used to new style regulation, in addition to the old style treat rivers and harbors--and that’s exactly the economic regulation, has emerged which utilizes way in which the aid system has been working- an intergovernmental technique rather than the to treat it in the same fashion in which we used direct to private sector approach. pork barrel legislation (and we haven’t eliminated If one had to highlight the fallout, I guess one omnibus rivers and harbors legislation) is to den- would have to draw back and ponder the way in igrate the national interest. which the roles have changed. There is the illu- It’s brought us to a point politically where Con- sion-some would say delusion, but I’ll say illu- gress sometimes resembles a municipal br county sion-that there is, and has been an extraordinary council: where Presidents frequently behave, act, centralization of policymaking as a result of what’s and talk like Mayors or neighborhood council- transpired in the past 20 years. Among the activi- men; where Governors and Mayors occasionally ties of the courts, of Presidents, or of Congresses, play President, discussing national policy, with- one might have that illusion. out holding the office that presumably deals with But draw back. Unlike any other system on the such policy. face of this Earth that has experienced growing Finally, if one puts it in political theory terms, centralization in the past 30 to 40 years, we still the paradox of why things worked in 1960 and do rely upon-and more so at this point in history not work now is the paradox of understanding than any other timethe intergovernmental tech- what has been termed by the academicians as nique to resolve not simply national problems but “cooperative federalism”-that is, the sharing of an array of extraordinary local problems. program goals, the sharing of personnel, and the If one goes through the listing of current pro- sharing of the public purse was relatively modest grams that highlight the degree to which we have in 1960, but massive now. And with this triumph confused national interest with parochial and mi- came its collapse. nor ones, we run from urban gardening to noise To put it differently, there were significant ma- control, to arson, to home insulation, to jelly fish jor elements of dual federalism left in the system control, to snow removal, to aquaculture, to rat right through 1963. Whole areas of governmental control going back to 1966, to museums, to pot- services were untouched by federal grants or reg- hole repairs almost every year in March, to run- ulations. At least one-half of the state government away youth, to school security, to art education, departments in 1960 could not get a federal dollar and as we mentioned more than Once thus far, to for anything. There was not one judicial or tra- rural fire protection. ditional municipal function that could get a fed-

12 era1 dollar for anything. And the array of tradi- there is a direct relationship between current pop- tional county functions, other than those which ular attitudes and the fact that the system to most were channeled through state government in the people--even those allegedly running it and welfare area, couldn’t get anything. With the sometimes running for office-is essentially in- school districts, other than impact aid, nothing. comprehensible. In a democratic system, and this Nothing! is a democratic federal republic, if the system is Through the year 1963, therefore, a whole array incomprehensible, not only to the electorate, but of servicing activities-the bulk of domestic also to the vast number of people who are office- American government-was fundamentally un- holders, where do we stand and where does the der the old orbit of dual federalism. These were system stand? not encompassed by the sharing of programs, It isn’t, therefore, so much cooperative federal- powers, and the purse. Cooperative federalism, ism. Cooperative federalism conquered in the then, encompassed very little of the domestic gov- 1960s and collapsed in the 1970s. It’s our view ernmental sector in 1960 or 1963. Now it encom- that a new descriptive phrase is needed. Perhaps passes nearly every program activity one could “dysfunctional federalism” best highlights the imagine. Again, the results have brought about a elimination over the past 20 years of any residuals change in role playing by all of the participants. of dual federalism that were very much present in If federalism historically was meant to mean the year 1960 and that provided the basis then for anything, it was meant to achieve a certain divi- assuming that cooperative federalism was a viable sion of labor. That division of labor no longer ex- way of doing things. ists. Everybody is laboring in everybody else’s Thank you, Mr. Chairman and members of the vineyard. And the vineyard is producing a vine- Commission. gar not a wine if my sensing of the public opinion polls on this issue is correct. That perhaps is the point to draw in my con- CHAIIWAN BEAMB: Thank you very much, clusion, since I have only 30 seconds more. Look Dave. I want to thank the rest of your staff for at the public opinion polls in 1960. Analyze summarizing what is a very intricate and complex the summary volume of the surveys of the 1950s problem. I just wondered whether we shouldn’t that were brought forth in the American Voter. leave our questions of the staff until tbmorrow, Compare the findings with today’s polls of public when we will again be discussing this topic, and opinion, as they relate to the system as a whole when they will provide some additional briefing. and to the political parties. As of 1960, you find Let’s go on right to the hearings. Any question on three-quarters of the electorate having very favor- that? able, loyal, and deeply emotional commitments to If not, we have as our first invited witness-Mr. either one or the other or to both of the parties. Arthur Naftalin, professor of public affairs at the At this point, if you can find 25% of the electorate University of Minnesota, a former Mayor of Min- with comparable sentiments, you’re doing very neapolis, and a former member of ACIR (from Au- well. Faith in the system at this point need not be gust 1, 1962, until June 17, 1969). I know that highlighted. We have chronicled and John Shan- Prof. Naftalin knows our problem as much as he non has probed the decline on that particular knows the general subject, so that I’m sure he will front. cast all possible light on it. I want to thank you All this is not simply coincidental. We believe for appearing.

Statement Presented By Professor Arthur Naftalin

Hubert H. Humphrey Institute of Public Affairs, University of Minnesota

MI. Chamnan, members of the Commission. I’m pleased to be back with ACIR again. I recognize a number of people here. If what I have to say sounds like a continuation of Dave Walker’s statement, you’ll know that I was trained well by him, by Al Richter, and by others on the staff when I was a member of the Commission. I believe, if memory serves right, that the only current Commissioner who was a member when1 served is Congressman Fountain. I’m glad to see Del Goldberg, his long-time aide, with us. I must say, although I’m pleased to be here, I’m greatly intimidated by the assignment, especially to be termed a “thinker!” I can assure you that my being considered a thinker will be of great SUP prise back at the University of Minnesota and the City of Minneapolis. The report is superb. I’m greatly impressed with its candor and its passion. It serves us very well to have ACIR make such an unusually clear and articulate statement about the character of our federal system. Clearly, our federal system is out of control, as Dave Walker said in his oral statement. ACIR’s detail in this regard is compelling, but the Com- mission is better at cursing the darkness than in lighting candles. That’s, of course, true of all of us; we are all finding it difficult to work our way through the problem of federalism, because what we are talking about involves a convergence of so many economic, social, and political factors along with philosophical, psychological, and ethical concerns. Our objective is little short of restruc- and in a way that is consistent with our traditions. turing the entire political and governmental world. The forces at work today have increased special- But ACIR has made an auspicious start. ization, particularization, and individualization. My views concerning federalism were very This is pluralism in action, and pluralism is cen- much influenced by my experience as Mayor of trifugal in effect. It tears us apart as we seek to Minneapolis. I early discovered that the Mayor of respond to all the particularized demands. We a major city is trapped in a federal system that in need to generate countervailing forces against the some ways is overresponsive, and in other ways centrifugal pressures. We need centripetal pres- not responsive enough. I discovered that the im- sures that will serve as a brake on our undisci- portant problems I had to deal with-whether plined use of resources and on the reckless way transportation or waste disposal or finding ade- in which we make public policy. quate resources--were beyond the city’s control. But where shall we intervene? How can we as They were metropolitanwide or statewide or na- a nation achieve some measure of cohesion, of tional in scope. Like everybody else, I rushed off discipline, of reintegration? I give my response to Washington to try to get help. most tentatively and with an awareness that much There’s good reason why the federal govem- of what I say may strike you as very extreme. I ment has been overresponsive. We need to un- have four observations, the first of which ad- derstand what ACIR has been trying to say ever dresses the need for greater internal cohesion at since it began its work: For 200 years our federal the national level. system served us very well. While we were build- For ZOO years, our fundamental doctrine of the ing as a nation, the private interest and the public separation of powers served us very well; it pro- interest were at one and it was possible for the vided the cracks in the system that I mentioned. nation’s many wide-ranging private interests to But now the gaps have grown too large and today have what the late Morton Grodzins called a we have, in effect, two national governments-the “crack” at the system. With our enormous re- government of the Presidency and the govern- sounxs, with our boundless frontier, it was pos- ment of Congress. As a result, we are unable to sible to respond to the proliferating demands of fashion national policies or to develop effective a restless and energetic people. go”ernance. The federal government’s response persisted, in ACIR addresses this condition with a variety of good measure, because the states and local gov- incremental and specific proposals, and many of ernments wouldn’t or couldn’t respond. It’s a fa- them are very good. But some of them move us in miliar story; state legislatures were controlled by an opposite direction. To create, for example, a rural influences at a time when the nation’s urban national referendum that would enlarge public centers were developing and they did not re- participation in policymaking, as the report sug- spond. Over the years federal programs and proj- gests, will push us in the direction of greater dif- ects multiplied as the national government did fusion. It is important that all of the Commission’s respond. proposals be examined against the test of whether The report speaks convincingly, as did Cindy they will help us achieve a new coherence as a Colella in her testimony here, of the emergence of nation. policy entrepreneurs. They are familiar figures in I have a modest proposal in this connection, American government. We should remind our- which to my knowledge has never been suggested selves that they are not motivated by personal before, probably because nobody has been quite mendacity but by the needs of the system. Jet air- as foolhardy as I’m about to be. I would propose craft, television, and computers widen the range that instead of selecting Presidential nominees of those seeking a fair share of the economy. As through primaries-which are enormously cen- more and more groups come into the picture, de- trifugal, which I believe destroy rather than build manding a response from government, seeking to a sense of national unity, and which leave us with penetrate a crack in the system, the policy entre- candidates that offer only the fuzziest of policies preneur plays a larger and larger role. and no proof of their capacity to govern-that the In the process, as the AClR report makes clear, members of the two houses of Congress in each the system has become fragmented. It has become party choose their party’s Presidential nominee. imperative that we find a way to reintegrate it, I believe this would bring a measure of coherence

16 to our parties and to national leadership. It I would like to see one state (I would hope it wouldn’t require a Constitutional amendment, might be mine) amend its Constitution to estab- only statutory implementation. lish a parliamentary form of government under I would hope that ACIR might consider serious which the Governor would be selected by a uni- attention to proposals of this sort. Even if they are cameral state legislature and major departments unlikely to be adopted, wide discussion would headed by key legislators. It would be an attempt help to lead the American people to an under- to achieve party responsibility, which we do not standing of the need to achieve some form of po- now have either in the states or nationally. litical cohesion to counteract the pluralistic pres- My third approach to achieving a new cohesion sures that are dividing us. We need proposals that in the federal structure would involve a reversal will help us work toward a positive and construc- of trends that atomize political power. We suffer tive form of intergroup mediation and policy bro- in this nation from enormous diffusion of political kerage. Today there is no party accountability, no power. We now have, for example, 37 Presidential party responsibility, and, in the end, no direction primaries, and most states use primaries for the for the nation. election of nominees for state office. Many states My second observation involves states and local have the initiative and referendum, and-I’m dis- governments. For a long time states have been an- appointed to not-the report suggests that a na- achronistic in our system. In recent years many of tional initiative and referendum might be a good them, thanks in part to ACIR’s good work, have reform. roused themselves and have embarked on con- I think we should reverse these trends. I believe structive programs. But the fact remains that we should seek to rebuild the political party and states lack the capability of coping with the crit- make it a responsible agent for policysetting, both ical needs of their citizens. Their elevation to the nationally and within the states. I think we should status of effective partners in the federal system abandon primaries at all levels and reestablish the would constitute a most compelling counterpres- convention system. We should get rid of subcau- sure to the forces that pull at the national center. cusing. We should make it possible and necessary But for the states to become effective, certain fun- for our political parties to establish policies and damental conditions must be satisfied: economic platforms that give voters a meaningful choice. disparities among them must be overcome, and I would go so far as to have total publip financ- they must make appropriate and equitable use of ing. It is enormously alarming, the amount of their own resources. money that corporations are now pouring into our As part of our national policy, we should seek political framework. They are making our elected the reconstruction of local government, giving officials their captives. primary attention to substate regionalism. In many Finallyand here I may really be soaring-1 places the city or the county is no longer the nat- would like to see us consciously strive for a new ural community. Local governments as we know political and governmental ethic, to find a way of them can’t reach the resources they need to sup- using our magnificent communications system to port essential services. The natural planning area internalize a new form of behavior with respect is no longer the city but rather the region. There- to governmental and political policy. fore, helping the region, whether urban and met- Alvin Toffler has written a new book, The Third ropolitan or rural, should be high cm our agenda. Wave, in which he advances the thesis that we Once we have achieved a larger viability at the may be undergoing a major psychological trans- state and local levels, we can begin to devolve formation in reaction to the pressures that are cre- effectively many national programs, and thus beating individuation. In the process we may achieve gin to counteract the proliferation that gives us so a new capability for reconciling our individual much concern. interests with our collective needs. At least that Incidentally, the separation of powers problem is one possible interpretation that gives a measure also afflicts the states. Governors and legislatures of comfort to my hope that a new political ethic tend to be at war with each other; one reflects at- may emerge. large concerns, the other interests of limited con- What happens if the centrifugal forces go un- stituencies, and their reconciliation becomes more checked? What happens when the proliferation of difficult, as witness the rise of one-issue politics. interests becomes so engulfing that we’re no

17 longer able to govern? A breakdown in national structure is if you produce different kinds of out- civility could happen here just as it is already be- puts, a better set of programs, a more rational in- ginning to happen elsewhere. tergovernmental system. The answer, as I see it, must involve e new Is there some evidence, looking at parliamen- sense of interpersonal relationships, a new sense tary systems in other parts of the world, that they of the importance of democratic government that both have more compassionate and better targeted is not responsible and effective. This means sus- programs than we have with our system, or lack tained mutual education in which we come to the kind of intergovernmental problems that we’re understand national policies that speak to fun- concerned about? As far as I know, there is not. damental issues and to understand how they can PROF. NAFTALIN: Yes, I think I would con- be achieved democratically, informed by a na- cede that. I think what one engages in here is a tional sense of equity, fairness, and basic human certain amount of deductive reasoning. COIltXTIl. In times of civil disorder and threatened break- I believe a basic shift in outlook is not entirely down, we know what has happened in some Pres- unrealistic or beyond realization. In recent weeks idential countries where there is no sharing of the we’ve witnessed the rise of John Anderson as a ultimate authority. We had some signal of the major Presidential challenger. Whatever the suc- problem in the Watergate episode, where the Pres- cess of his effort, he has demonstrated that shifts ident was not held accountable to a political in outlook can happen quickly. party. There is no way for the government to be It is important, I think, to understand that there brought to terms except through an elaborate im- is a deep ambivalence in this nation. The people peachment process. I think that’s highly danger- who seek the many programs that create the pro- ous, especially in a volatile period. liferation are the same people who don’t want tax When I say a parliamentary system, I mean a increases: the people who press for more response system in which the government would fall if that from government are often the same people who government was no longer-in the view of the call for a greater measure of governmental disci- public’s representatives-meeting the nation’s pline and restraint. There is frustration and con- fundamental problems. I think that’s the case to- cern, but there is not despair. The people, I be- day. If our government were compelled to con- lieve, are prepared to support constructive efforts front our basic problems in a responsible way, I to achieve a new national cohesion. What the pub- think it would do a better job. lic wants is for agencies, such as ACIR, to think We give the President and members of Congress in creative and constructive terms and recom- an easy ride. We do not compel them to answer mend measures that offer some rational response for their failure to deal with major problems. to our dilemmas. I commend ACIR for producing We’re not compelling them to answer why we a report that seeks to respond to that challenge. don’t have an energy policy, why we are not fight- You have undertaken an extraordinarily impor- ing inflation. tant bit of work. SECRETARY SIWLAIA I thought that was Thank you. what the election was about? PROF. NAFMLIN: Is it? I do not see in the election any coherent relationship to policy, if by CHAIRMAN BEAME: Thank you, professor, for the election you mean the Presidential primaries. a very interesting and challenging presentation. I see quite the opposite. The premium is entirely Incidentally, while you were talking, I just thought upon trying to create some illusion of capability that if we had a convention setup, we wouldn’t without any meaningful commitment to program have John Anderson. implementation, such as a party is compelled to PROF. NAFTALIN: Well, that may be true. do under a genuine party system. I think that’s CHAIRMAN BEAME I think it would be ap- highly dangerous. propriate at this time for the Commission to pres- MAYOR ROUSARIS: Professor, I’m curious as ent any questions they might have. to what sort of reaction you get from other think- SECRETARY S&kLALA: I’m interested in your ers and students, citizens in general, to these pro- recommendation for a parliamentary system. As posals that you make. Before you answer, how far as I know, the only justification for changing many terms did you serve as Mayor?

18 PROF. NAFTALIN: Four terms, four two-year terms. If my ideas aren’t so good, come up with terms. yours and we’ll have it out. We aren’t going to do MAYOR, ROUSAIUS: Did you bring any of it if all we do is reflect the Gallup poll. these into play? SUPERVISOR CUTLER: I can always count on PROF. NAFK4LIN: Well, not these particular our good neighbors to the north to come up with ones, but some equally crazy. something wonderful. I can answer your question by saying this, that I am from Iowa, professor. I had to take eicep- in 1961 when I became Mayor, I was an early ad- tion to your suggestion that Congress nominate vocate of metropolitan government. When1 would the Presidential candidate-ven as crazy as the go about the community talking about metropol- current system is, and our having been through itan government, there was a lot of feeling that what we went through recently in tbe Iowa cau- the idea was far out. I was viewed as a nice fellow, cuses. Frank Mankiewicz came in right after; but way out. when everyone else was going east, he came west I am amazed today-there were other forces that to do an instant analysis. The thing that he ob- converged to produce our metxopolitan council- served were basic changes in behavior because. of but it has been established and now the feeling is the process. It’s infinitely true that those pro- entirely different. I’ve spoken in many places on cesses really have moved beyond the realm of, I metropolitan government, end I find a vast differ- think, real policy discussions. ence today from what it was in 1961. I see a dia- I served on the Platform Committee of the Dem- lectical relationship between leaders and follow- ocratic Party in 1972 and honestly believed I was ers. If leaders are constantly handing back what writing national policy and some great document the Gallup poll says, that’s all their followers will for the future. Nobody paid any attention to it, believe in. But if leaders set out advance posi- least of all our nominee. He was not alone in that. tions, argue for them, educate for them, by and by I’m not sure anybody’s nominee pays attention to people begin to support and work for them. it, least of all the members of Congress. 1 don’t re- The answer to your question is that most people call the last time I heard anybody reference a party are amazed, sometimes bemused, and at times put platform. It’s fun for those of us who care about off. They will say, “Well, it’s a great idea but you those things to engage in writing them, and for can’t make it work because it’s not feasible and those people who like to appear before party plat- it’s just not within the realm of possibility, so let’s form writers. go on to something that is.” But I guess my point is: I fail to see how having I have often said that I can think of nothing that the members of Congress-who don’t appear to will serve us well that is feasible. Many ideas I be tied into the party platform, that statement of had as Mayor seemed very unlikely, but by and principles of the party---will do anything more to by some of them became feasible because it was tie the candidate to it. clear that action needed to be taken. What once PROF. NAFTALIN: In my mind it would be a seemed impractical over time became more prac- step in the direction of party responsibility. I tical. think that once the members of Congress had the I’ve had a lot of experience with our Citizens nominating responsibility, we would know where League in Minneapolis and St. Paul. Very often to apply pressure and we would soon be psrtici- the league has shaped proposals and recommen- pa&g in the nominating process in a represen- dations that are way ahead of public opinion: the tative way. When we voted for members of Con- proposals have been out there dangling. By &d gress, we would want to know how they stood by public opinion has come around to them as the with respect to the top leadership of the party and problem worsens and as more and more people the nation. I think it would be a positive step to- begin to think about possible approaches. ward achieving party responsibility. But it’s not This is the function of leadership. I think that’s perfect, and I would certainly entertain alterna- what the President should do. I think that is what tive suggestions. It seems to me that my idea has the Commission should do. I think that’s what merit and would be fairly simple to achieve. teachers should do. Address the problems hon- SEN. BOE: Professor, would you carry your estly as they see them. You don’t always have to analogy back to having the state legislatures elect win, but at least you get people talking in realistic or choose the nominees for the U.S. Senate? I say

19 that from the historical point of view; prior to the CHAIRhMN BFAMJ? May I ask you one ques- Constitutional amendment that allowed the free tion? and open election of U.S. Senators, the Senate as In sorting out the responsibilities of the federal a body was far more responsive to state and local government and local governments, do you see governments than it has been since that time. any justification where if any local governments After that time came the domination of the Sen- throughout the country are picking up, assuming, ate Foreign Relations Committee. They got away national responsibilities, that there would be from the problems on the state and local level, logic in setting up a class of cities that might be and were looking at the “big picture in the U.S. known as national cities, and treatment given to Senate.” Would you carry your analogy that far? them in accordance with the burdens and respon- PROF. NAFTALIN: I would examine it with sibilities they carry out? some sympathy, because I think the reestablish- PROF. NAFTALIN: Mr. Beame, this carries me ment of that old-time relationship might help back a few years ago. When I was Mayor of Min- achieve a degree of party responsibility. I’m pre- neapolis, I talked in those precise terms. This was pared to examine any idea that would help move during the 196Os, when I felt acutely the threat us in that direction. our cities were under. I believed then and still do that the embattled cities ought to be protected by FREEHOLDER DRALAMAN: I have a concern the nation. about, again, your thrust to reenforce, if you will, What happens to New York City, Chicago, the political structure, and get some kind of de- Cleveland, Newark, and other cities is enor- finitive ideas. What do we do, and how do we mously important to the entire nation. This is not respond to the overwhelming number of indepen- inconsistent with our tradition. The problem is dents that we currently have who are unwilling, that special help is not consistent with our Con- either because they are not involved enough to stitution, so we may have to add this item to our know the platform or they are just not interested list of unlikely solutions. enough to do it? In my state they think they’re I would, in any event, like to see our state gov- going to get called for jury duty, so they’re not ernments develop sufficient capability and com- going to sign up. We have got the driver’s licenses mitment so that they would assume the appropri- on them now. How do you weave that into the ate responsibility. framework that you delineate? CHAIRMAN BEAME: Sometimes, it isn’t the PROF. NAFTALIN: You’re absolutely right. Constitutional problem, but the political one. Many millions of Americans abdicate their re- PROF. NAFTALN That’s true. sponsibility as citizens. They say they’re indepen- GOV. DALTON: Professor, would you limit dent and let others choose the nominees: they your Presidential candidates to members of Con- might not even vote in the general election. gress? I favor a political system in which the cam- PROF. NAFTALIN: In the initial go-around, no. paigns for office provide a genuine educational I would permit Congress to choose the candidate experience unlike the Presidential primaries, from within the entire citizenship that qualifies. which just obscure the issues. Participation in GOV. DALTON: Do you really think that would them is not a meaningful exercise in citizenship. happen? If they all know each other and see each They just throw dust in everybody’s eyes. I’d abol- other every day, do you think that they would ish them. Independents by and by would find that pick somebody outside their own ranks? the only meaningful participation is involvement PROF. NAFTALIN: I think they would very in the party caucus. likely pick one of themselves and that might not I want enlarged not diminished participation. be a bad idea. Today we have only meaningless participation. MAYOR MOODY: You know my great affection It’s just a lottery, a grab bag. I want participation and my great admiration for your powers. through clearly structured and representative party PROF. NAFTALIN: It’s mutual, Mr. Mayor. mechanisms, so that people will attend caucuses, MAYOR MOODY: And I do agree substantially ward meetings, and county conventions and be with all of your analogies. I almost totally dis- genuinely involved in the shaping of the party agree with your proposed solutions. program. I would ask for your comments on an exactly

20 opposite view shared by many people. You men- form of cohesion for our system doesn’t mean that tioned something about the President and the per- I embrace the extreme in that direction any more sonality and strength of that person. A great num- than your challenging it means that you embrace ber of people, in my judgment, really want a king, the extreme in the other direction. but don’t want to admit it. To them the Congress MAYOR MOODY: I’m concerned also about the or the parliament is essentially irrelevant. They point regarding a republic. As a matter of fact, I would deny they want a king, and that they want think a large part of the disaffection of our elec- an imperialist, but yet, in practice, they seem to torate has to do with their distaste for the repre- want the imperial kind of leader, until they find sentative system. For example, all the surveys that he’s abusing the office somehow and not sat- seem to show that they like their own represen- isfying their needs. tatives, but they don’t think much of the Congress. They reach that conclusion on the same evi- They like their own representative in the state, dence that you use to reach your conclusion about but they don’t think much of the state legislature. the parliamentary system. I am just very curious You’d rather quickly reject the idea of a pure what your views are on that. democracy, I assume, on the basis of the present PROF. NAFTALIN: On the monarchy? state of knowledge and an affection of the elec- MAYOR MOODY: Yes. torate. Would you care to examine that just a little PROF. NAFTALIN: I believe in representative *0P3? government. I believe in enlarging and making PROF. NAFTALINz I’m sorry, Mayor. I don’t citizen participation more meaningful. In a few quite get the question. minutes, it’s difficult to spell my idea out fully, MAYOR MOODY: Well, you indicated that you but the thrust, the ultimate objective of what I’m would not like the system where we turned every- seeking is a more coherent relationship between thing over to the people to vote on. the government and the citizens, a more under- PROF. NAITALIN: Right. standable, rational, and meaningful one. MAYOR MOODY: I’m a little puzzled about I completely reject the notion of any authoritar- that, because it would seem to me that’s a natural ian government, whether it’s a monarchy or any conclusion of the direction in which you’re going. other kind. My whole thrust is to make the gov- PROF. NAlTALJNz I would just say again that ernment more democratic and more representa- I believe that the problems we face are extm- tive. I believe that given the pluralism of this na- ordinarily difficult and are getting more and more tion, what I called its centrifugal tendency, my difficult, requiring careful thought, analysis, and recommendation whould help move us in that mediation. It gets more and more difficult and direction and in a fashion consistent with demo- places greater and greater premium on leadership cratic principles. that is skilled, informed, and prepared to com- Now I do not say that if you disagree with me, municate with the public and to make tough de- you believe in anarchy or in the politics of the cisions. jungle. Some people believe that we should to- I believe that if we are to have effective and tally dismantle the federal government, that we meaningful governance, we just can’t throw it up ought to restrict greatly the scope of government, for grabs and say come and express your senti- that we ought to require unusual majorities to in- ments, your prejudices, and your preferences. The crease taxes, that we ought to permit referenda on government has to make hard choices and it everything the legislature does. Their purpose is should make them in a responsible and repre- to prevent the government from doing very much. sentative way. If it makes the wrong choices, it I reject that just as I reject a monarchy. And I falls. Then the people should have the opportu- suspect you reject that, too, even though you may nity to txy something else. 1t’s going to be an im- have some concern about government becoming perfect relationship, but at least it keeps the sys- too powerful. tem open in a way that I think our system is MAYOR MOODY: Well, that certainly is true. closed. But we are examining your ideas, rather than Take one complicated problem, like hazardous mine. waste disposal. If we leave this problem to an in- PROF. NAFTALIN: I understand. I’m just trying itiative or referendum, we will never arrive at a to illustrate my point. The fact that I suggest one policy. Government must make tough decisions.

21 Either we will stop producing hazardous waste or forces that preserve our traditions of individual we will put it somewhere. Government must de- liberty and at the same time make it possible for cide; there is no way for the people to decide. The us to govern ourselves. function of government is to moderate, amelio- I offer my ideas tentatively with no confidence rate, adjust the conflict between our private inter- that they’re necessarily going to improve our sit- ests and public necessity, and this involves tough uation. If they’re not acceptable, I’m happy to hear choices. We’re not coping with our problems pre- other proposals. That’s why I think the debate that cisely because OUT government is not held ac- the ACIR report is generating is an important one. countable under our political system for making CHAIRMAN BEAMS: Thank you very much, the decisions. Professor. I appreciate your presence and your I’m proposing a system under which I think we ideas. might get cohesion and coherence and still pre- PROF. NAFTALIN: Thank you very much. serve our basic freedoms. We’re not going to solve inflation, we’re not going to protect our environ- CHAIRMAN BRAh4R: The next invitee is Wil- ment and meet our other problems by putting liam G. Colman. h4r. Colman is known to ever- them on the stomp and having 200 million come body here. He is a private consultant, and was the and vote on them. That’s my case in a nutshell. first executive director of ACIR from 1960 until To restate my basic premise, the centiifugal January 31, 1970. He’s the author of a book on forces that are fragmenting our nation are going cities, suburbs, and states. Thank you very much to continue. Our task is to find countervailing for coming.

22 William G. Colman Con8ultanl

T hank you, h4r. Chairman, members of the Com- mission. I have submitted a prepared statement, and in the interest of time, I’ll just try to hit the highlights of that statement and make myself available for questions.* I will try to deal with four areas in my comments. First, to give certain suggestions with regard to making the report that’s before you more m&nage- able and somewhat narrowing and focusing its scope. Second, to point out some additional problems of intergovernmental relations that do not seem, at least in my view, to be addressed adaquately in the draft report. Third, to make some additional suggested cri- .@a for sorting out the grant system and the func- Sonal and financial responsibilities among our major levels of government. Finally, and in my own view most importantly, to recognize the need for basic Constitutional and statutory changes to redress growing imbalances in the structure of federalism, including provision of a stronger framework to tighten fiscal discipline within the national government. Now, I want to second what Prof. NatWin said about the quality of this report. I think it’s very good. I’m going to be emphasizing criticisms here

23 rather than singing praises, but the draft that’s or any level of government is to enter a new field. before us represents a lot of very good and careful The extent to which the use of the private sector thinking. can achieve all or part of the results that are striv- Now for the criticisms and suggestions. First, en for is the initial issue, and only after a negative I think the report endeavors to cover too much. I finding do we consider what level or part of the think that it should concentrate on issues that are public sector is to be given responsibility. uniquely intergovernmental. Instead, in at least I would also agree strongly with the draft re- three areas the report endeavors to grapple with port’s conclusion that the intergovernmental grant the problems of OUT whole political system and system is overloaded and overcongested, and that American politics in general, as the preceding in quite a number of areas, transfer payments to disussion with Prof. N&din has illustrated. Those individuals, firms, or other nongovernmental or- issues range far and wide and are much larger ganizations need to be considered as an alterna- than the issues of federalism and the relationship tive to transfer payments to state and local gov- among national, state, and local governments. ernments. I could point to the fields of job training, I would respectfully recommend for your con- housing assistance, and several others where that sideration that those broader areas dealing with might be the case. politics, the party system, the general structure of Mr. Chairman, and members of the Commis- government, participatory democracy, and so on sion, a very important political fact is at the basis be deleted OI narrowed to only the federalism as- of this suggestion: the demonstrated inability pects. Room would be created thereby for two or time after time and year after year on the part of three areas that are really and strongly intergov- the Congress, and to a lesser extent of state leg- ernmental and that are not addressed in the re- islatures, to legislate selectively among places. On port. the other hand, these legislative bodies (both the Finally, with regard to the report in general, Congress and the state legislatures) have shown there is an inconsistency between the rhetoric themselves much more able to legislate selec- that’s used to describe the damnable shape that tively when it comes to classes of people, the we’re in and to set forth the range of recommen- handicapped, the hard to educate, the low in- dations for the Commission’s consideration, which come, and so forth. This issue of targeting gov- are kind of pale if we’re in as bad a shape as the ernmental assistance to places rather than to report alleges. classes of people is a rather pervasive problem of I believe that we are in as bad, or nearly as bad, the federal system today. a shape as the report alleges. Consequently, I I have some comments in the statement about think there needs to be a greater emphasis on the disarray into which economic and fiscal in- some really basic and fundamental questions dices in our government has fallen. Although very about our federal system. important, I won’t go into those issues here: the To go now to some two or three areas that need Congress has some of them under consideration additional attention. I would suggest, and I won’t presently, including the use of the Consumer make too much of this, but I think that the role of Price Index (CPI) versus the GNP deflator when the private sector as it relates to federalism needs it comes to adjusting Social Security benefits, vet- to be addressed in the report. The alternatives as erans’ benefits, federal retirement benefits, and so presently given tend to present the options, as far forth. as the national government is concerned, of either Let me move to another area that I think has performing a function directly or giving grants- gotten short shrift in the report and is truly inter- in-aid to states and local governments to have it governmental. That is the role of federal and state carried out. regulation under the interstate commerce clause I would submit that the provision of economic of the Constitution, including the preemption of incentives, the play of the marketplace through regulatory authority by the national government. some stimulus or deterrents placed by govern- There are a great many federalism problems in the ment, and a greater degree of self-financing in a regulation area. Examples of those problems are number of areas are alternatives that also should given in my statement. be considered whenever the question is consid- One current example relates to hazardous ered of whether or not the national government wastes, about which Prof. Naftalin was just talk-

24 ing but in another context. The Secretary of Trans- before the Congress for assigning responsibility to portation has published or is about to publish in a lead agency. This lead agency business has been the Federal Register a regulation that preempts to tried on many occasions, and it’s very sticky to the national government the responsibility for make work with any degree of productivity. regulating the interstate transportation of hazard- Please keep in mind a cardinal principle of public ous wastes. Now, I would not argue about the administration: equals cannot coordinate equals! merit of national action in this field. But the very I would suggest finally, Mr. Chairman and idea of preempting state powers under the inter- members of the Commission, some additional cri- state commerce clause by administrative fiat rather teria with regard to this grant sorting-out process, than by act of Congress goes, I think, far beyond as set forth in my statement. I would particulary the pale of what the founding fathers had in mind encourage the Commission to formulate some in delineating national and state powers in this new criteria, updated from those enunciated a field. quarter of a century ago by the Kestnbaum Com- First, I think that among the alternatives the mission, as to the conditions under which entry Commission might wish to consider in regulation by the national government into a new field of is~a Constitutional amendment providing that any enterprise would be warranted. preemption by the national government must be Now let me mov+because I know the time is by statute, and that such statute explicitly state pressing here this afternoon-to my fourth major the intent to preempt so that you don’t have de- suggestion: that is, to address the Constitutional cades and generations of litigation, with federal fundamentals of our federal system. Like a lot of judges trying to fathom the intent of the Congress. the public school partisans say, “Let’s get back to In essence such an amendment would assure that the basics.” any future preemption of regulatory power under There are several key provisions in the Consti- the interstate commerce clause was explicit rather tution that constitute the very foundation of the than implicit. federal system. One of the most important is Ar- Secondly, a sorting out process is badly needed ticle V, which sets up the procedure for amending in regulatory fields, comparable to what is dis- the Constitution. This is very important, ladies cussed in the draft report on the grant programs, and gentlemen, because throughout our history, and some criteria for this sorting out should be up until the present time, amendments t6 the Con- proposed. In this connection, let me refer you to stitution have been initiated solely by the Con- a chapter of the 1955 Kestnbaum report dealing gress. Under this approach, if any basic structural with this issue. change is to be made in the Constitution with re- Thirdly, we need the enactment of some parts gard to the federal system, that decision has to be of the Ribicoff-Mathias bill providing for cost ben- made by the folks at the center who have been efit analyses of new governmental regulations. centralizing this governmental system for the past And finally, with regard to this terrible problem 30 or 40 years. of crosscutting requirements in federal grants There is another avenue for change provided in that is treated in the report, I don’t believe it’s the Constitution, emanating from the bottom up, sufficient to say, as the draft now does, that the and that is the initiative of Constitutional change regulatory agencies ought to come back to the by the states. This approach causes members of Congress with some recommendations as to what Congress extreme pain. We are talking about the to do about mitigating their own sins. I think that well-known section on state petition for a Consti- the Executive Office of the President needs to tutional convention to deal with a particular sub- have a strong role in this. I realize that’s very con- ject or subjects. Three times in the past two de- troversial. But there needs to be lodged, either in cades, a score or more of states have initiated an the Executive Office of the President or at some amendment petition-on legislative reapportion- other point, the authority to lay down simplifi- ment, on revenue sharing, and now on balancing cation proposals with regard to these crosscutting the federal budget. requirements, and have them go into effect unless There are three or four key questions on Article they’re vetoed by the Congress. V that the Commission ought to address. It is hard I believe that this is a better approach than the to conceive of a study of the operation of the fed- one in the current intergovernmental legislation eral system that can duck them. I make no sug-

25 gestions here about which way the decisions in appropriation bills. This clearly is warranted. ought to go. Question one is: Should the states It is the same power that most Governors have continue to have the power to initiate amend- now and that has been exercised very effectively. ments to the Constitution? You see no efforts anywhere in the country to re- If your answer is no, they should not continue peal those gubernatorial item veto powers. to have this initiating power, then you would Secondly, an amendment prohibiting a deficit need to make a recommendation for repeal of that except with a three-fifths or two-thirds vote of the clause in Article V. If they should continue to Congress, or a majority vote if the nation were at have the power, should it be strengthened or mod- war, has much to command it. Extraordinary ma- ified? Is the current provision in Article V the jorities are as old as the Republic. It takes a two- most desirable way for the states to have a role in thirds vote to override a Presidential veto. In Constitutional change, or should it be by some many local governments it takes an extraordinary other means? Unless you decide that the clause majority to adopt zoning provisions contrary to in Article V should be repealed or modified, it master plans or to make emergency appropria- would be very much in order for you to reaffirm tions. In many states, certain kinds of actions the urgency of enacting the Ervin bill, which has must be passed by an extraordinary majority of been before the Congress for quite a long time and the legislature. Such a Constitutional requirement which sets up ground rules for handling state pe- would slow down the runaway growth of public titions for a Constitutional convention. expenditures, but it would also enable the Con- A second area of possible change in the Con- gress to incur a deficit whenever an etiaordinary stitution for strengthening the federal system is majority of its members felt it in the national in- with regard to the uniformity clause in connec- terest to do so. tion with national revenues. The uniformity clause I would suggest also that the Congressional might well be amended to authorize state govern- Budget Act be strengthened with regard to mul- ments, local governments, and intentate compact tiyear appropriations. the off-budget items, the agencies to piggyback on the federal personal in- loan guarantees, the tax expenditures. and the en- come tax for financing projects of a strictly re- titlement programs. If Congress is ready to bite gional or interstate nature. This would provide the bullet, it can amend the Budget Act and bring flexibility in the pooling of regional resources for these and other aspects of the budget ahd appm- regional projects. Secondly, it would provide priation process under tighter control. more flexibility to the federal government’s own Now, these things that I have brought up, Mr. financing system, so that if the Congress wants to Chairman and members of the Commission, for do something for Appalachia, it can do so without the most part are neither original with me nor having to do it for the rest of the country whether new. Deficit spending has brought this nation to the other areas need it or not. The Congress would the very brink of fiscal and economic disaster. be enabled to legislate and to fund programs on More than half the states have called for a budget a regional basis rather than covering all 50 states, balancing amendment. Several of the serious sug- the District of Columbia. and Puerto Rico under gestions in the draft report for decongestion of the a national program. intergovernmental transfer system become, unfor- Finally, Mr. Chairman--and I’ll close withthis- tunately, largely rhetorical unless placed in a fis- Constitutional change of some kind is certainly cal framework that is conducive to careful choice warranted with regard to the whole problem of rather than an atmosphere of a continuing fiscal discipline. Again, the Congress has shown Congressional invitation to all and sundry in this itself absolutely incapable, politically and sub- nation to the proverbial free lunch. stantively, in managing the national budget in a Thank you very much, Mr. Chairman. responsible way. Only once, I believe, since 1968 has the federal budget been balanced. Several CHAIRMAN BJiAMEz Thank you. Mr. Colman. times during that period you’ve had periods of Any questions from any of the members? full employment, flourishing economic growth, MS. WW: I would like to ask you what, in and general prosperity. your own analysis, do you think are the reasons The draft report alludes to a Constitutional for this proliferation of grants in the past 15 years? amendment providing for a Presidential item veto MR. COLMAN: I think one of the major reasons.

26 Ms. Wall, is that the Congress has not had to count that end put in the CPI. For FY 1980, the first time the cost when enacting a new grant program. It in about ten years, we adopted a county budget has not had to make choices. So, when Congress that did not grow faster than the CPI. It not only has been faced with an array of choices, it’s cho- got five votes, it got seven on the seven-member sen everything, not the most urgent. county council. The ready availability of deficit financing is a Yes, I support extraordinary majorities for pur- very great factor in the proliferation of grants. poses of fiscal discipline, as long as there’s e rea- There are various other reasons that are given in sonable safety valve, and as long as you’ve got it the draft report that are also highly contributory. tied to a proper measure. But to just slam the The report points to what John Gardner has celled brakes on a particular property tax rate and freeze the “Iron Triangle”-interaction among the bu- it at a numerical level is highly inequitable, and reaucracy, the Congressional subcommittees, and it produces a lot of bad results. the special interest groups on the outside. Now this is hindsight, but I believe that local There are a number of other factors that are governments in California made a real bad mis- pointed out in the dreft report. But I don’t think take in poor-mouthing Proposition 13 before it that the fiscal side of this phenomenon and the was voted on. They predicted all kinds of disaster, ready availability of deficit financing as a primary and the disasters did not arise due to the state reason for the proliferation has been given its due bailout. Now the lid is about to go on at the state in the draft. That is the reason I am pressing on level. The services, probably, are going to be hurt it here. in some cases. Even in California, I would argue QMlRMAN BEAME: Mr. Remy? that this fiscal austerity that now pervades the MR. REMY: Mr. Colman, in California we’ve state, or soon will prevade the state, is going to had a redistribution of income through Proposi- force much tougher priority setting than local tion 13 and potentially another redistribution governments in California have had to face up to through Proposition 9, involving roughly $12 bil- for a long, long time. lion. We built into our Constitution by those CHAIRMAN BEAME: Ms. Shalala. measures the super majority of two-thirds to mod- SECRETARY SHALALA: I have only one ques- ify that system. tion. In the report, state and local government is In essence, people who I think are losing by the lumped together as one word. Do you think loss of services and other things are not the people there’s a need to sort out the federal role in rela- who are distributing income. Yet, it’s going to be tionship to state and local governments sepa- very difficult to undo that system. In light of that, rately, as well as a need for some insights in re- would you support the super majority redistri- lation to the two of them, typically? bution of income? MR. COLMAN: Yes, I do. The reason that I MR. COLMAN: Absolutely. I do not support the didn’t get into that is that from time to time this Proposition 13 route, because it’s aimed at the tax Commission has made recommendations about rate rather than expenditures. But I do look at an the channeling of federal grants and the role of expenditure level tied, as many other states are the state government therein. A number of years doing, to the growth in personal income and so ego, it offered a provision that states could “buy on-a sliding type of scale, but nothing as arbi- into” federal programs, and if they bought in, trary and as drastic as Proposition 13. then you would channel the federal money In my own county (Montgomery County, MD)~, through the state with all of the policy and prior- where I served in elective office for e while re- ity setting that goes with that. A number of local cently, I initiated, got on the 1978 ballot, cam- officials, particularly Mayors and so on, viewed paigned for, and got passed a charter amendment this recommendation as rather infamous, as did requiring an extraordinary majority anytime that certain Governors and state legislators. the budget increase amounted to more than the Well, that is one of the examples. I think by increase in the CPI. implication you raise another question: If the Now, the CPI is not the best measure or bench- Commission is going to look at some Constitu- mark. The GNP deflator would be much better. tional restructuring, whether or not local govern- But I had the political problem of explaining what ments should be named, recognized, and so forth, in the devil the GNP deflator was. So I dropped in the U.S. Constitution? That is a very good ques-

27 tion. There are stmng arguments for and against you agree with what he says or not, any counsel doing that. I would like to see that question added he gives this Commission, or any part or branch to this list of Constitutional issues that I have been of government, is worthy of objective, very careful talking about. consideration. REP. FOUNTAIN: Before he leaves, Mr. Chair- MR. COLMAN: ti. Chairman, I appreciate the man, I’d like to take this opportunity to welcome generous comments of Congressman Fountain. our friend, Bill Colman, back before the Commis- His generosity, I think, illustrates why he has sion. He and I started out together here. As a mat- been returned to the Congress so many times. ter of fact, I was a member of the selection com- CHAIRMAN BRAME: I was just going to sug- mittee that picked Bill Colman as the first exec- gest that I’m sure all members of the Commission utive director. It was a unanimous selection, and would join Cong. Fountain in what he said, t@ we had a lot of highly competent people. after what you said, it would look as If we are all I think, as the years passed, we were all ex- looking for something. tremely grateful that we had a man of Bill Col- MR. U&MAN: Thank you, very much. man’s caliber, because during that time, we felt CHAIRMAN BJiAME: Thank you, very much, that had we not had him, the Commission could for coming. not have survived. It had to have a strong, intel- Our next invitee is Prof. Daniel J. Elazar, direc- ligent, wise counselor to begin. tor of the Center for the Study of Federalism at I’d like to say it’s just delightful, a privilege, for Temple Univeristy. He’s editor of Publius and au- me to see him back. He has kept in touch with the thor of American Fedemlism in the States and work of this Commission. I would say that whether The American Partnership. Welcome. Statement Presented By Professor Daniel J. Elazar DhCtOr, Center for the Study of Federalism, Temple University

T hank you, very much, h4r. Chairman.* It’s a pleasure to be here. It’s been .some time since I have had that pleasure, and I am very happy, indeed, to have this opportunity. I only apologize for being a little late for the beginning of the session. I came down from Philadelpia by Amtrak&w of the classic examples of direct federal administration of a service, and perhaps one of the better ones when you consider others. It did not sway me, however, from my earlier position that that generally is a bad idea on the domestic side of things. Indeed, Amtrak operates on a principle that seems to be a growing principle of government in the United States. It’s like the old dart game in the pub-first you throw the darts; then you draw the bull’s eye. Their schedule has been length- ened at least four times in the past year so that the trains will arrive more or less on time, and today we were still 40 minutes late. Chairman Beame, I’m very pleased to be able to compliment ACIR on what I believe is an admirable report--one that certainly in its first section, closely reflects views that I have come to during my own work over the past 25 years in the study of American federalism.

* Prof. Elamr’s formal statement appears as Appendix C, “Is the Federal System Still There?”

29 I have come to such conclusions, very sadly, is going to ask me whether I did my job. At least from what was once perhaps a more optimistic you have to let me present my case so he can think look at the situation. Today one has the sense that I did my job.” one can only be optimistic in Daniel Boone’s The judge allowed that this was fair. So the law- way-and I’ll explain that in a minute--because yer proceeded to give what is known, I believe, as I think that the American people and their rep- a Confederate speech, evoking shades of Jefferson resentatives have lost their way, are lost in the Davis and Robert E. Lee, “the lost cause,” and woods with regard to what the federal system was ending it all with a rebel yell. The judge, being a intended to be, and what it should be. Confederate veteran, wiped his eyes and said, “If Daniel Boone once was asked if he was ever lost that doesn’t beat all. Case dismissed.” in the woods. He looked around and said, “Well, Well, we can start with the Confederate speech, I have never been lost. That would really not be but in the end we have to come back and consider my way. But once I was bewildered for three the cow and decide whether the cow has really days.” At the very best, I think we have been be- been treated properly when we get right ~down to wildered for a good while. I hope that perhaps it. I have, indeed, some reservations and questions this report will be a first step in dealing with this about that. bewilderment. In this regard, I think I’ll be neither as radical I’m not going to repeat the valuable comments as my good friend Arthur Naftalin, nor as specific in the first section of the report with its analytical as Bill Colman, whose words, as Congressman section and basic findings. As I indicated, they Fountain has said, are always worth listening to really square with my own findings and percep- closely. I will try, however, to tread some ground tions to a very, very great extent. In fact, I might in between. restate some in even more emphatic terms, be- I believe that the essence of the situation is that cause I strongly believe that the cardinal question we have crossed a line-horn what once was con- before us transcends the specifics of this massive sidered to be the legitimate dimensions of coop- effort: Whether or not the federal system in the erative federalism to an unrestrained process that United States still exists as such? goes every which way. Unlike the tone of the re- In that regard, I do have to raise some ques- port and much of the discussion on the subject, tions-in some cases minor ones, in some cases however, I don’t believe we would fall Apart if serious ones-about the recommendations of the this situation were to continue one minute longer. report. Are we dealing with the right questions in I think that there’s every possiblity for this system the recommendations, and are the results likely to continue and to work for the indefinite future. to be the intended results? The problems that may or may not transform I’ll tell a North Carolina story very briefly to the United States are not problems of the red tape illustrate this point. It’s about a North Carolina surrounding grant programs, the proliferation of courtroom after the Civil War in which a case was such programs, or the confusion of responsibili- being tried about a railroad train that killed a local ties in the narrow progr ammatic sense. They are farmer’s cow. The farmer’s lawyer, a local man, not even the problems of ways. For example, The got up before the judge and described the virtues New York Times this morning reported a billion of this cow in great detail-how it gave milk, kept dollar overpayment in welfare payments on the the family sustained in all the good things, and part of the federal government. I don’t know was very friendly to everybody. But it had been whether that’s an accurate figure or not, but this killed and the railroad was liable. is not even a problem of ways. (I have had the The judge was so moved by this argument- opportunity to study other political systems considering how important this cow was, how lo- around the world in the last number of years, and cal this family was, and how much of a voting believe me, we are far from being the worst.) family it was-that he turned to the railroad law- In nearly all cases, the changes raise one class yer and said, “You might as well not even present of entrepreneurs to power instead of another class your case, because there’s no point in it. I’m going when it comes to making the system work. The to find for the plaintiff in this.” people who learn how to make it work tend to The railroad lawyer says, “Look, your Honor, adjust and to achieve the appropriate positions in I’m down here from the big city, and my employer the legislative and executive branches of the gov-

30 emment and in the bureaucracies and the admin- the report can say, given the mandate of the Com- istrations of local government, provisional or state mission about that problem, but as a result, we governments, and national governments. Those are left with something of an anticlimax. who do not, sit outside and in some cases rail Moreover, perhaps we have omitted the most against the system, saying that it’s unworkable. important recommendation of all. I will get back I don’t thi&, therefore, that the immediate is- to that. sue is whether the system is going to continue to I believe the heart of the issue is that some- work. The real question is larger, more important. where along the line the sense that the federal And that is the question so admirably addressed government was Constitutionally limited has dis- by the first part of the report: Is this the right way appeared. The report states this, clearly. I think to work? Is this the way to achieve the larger goals that it is correct. It is not only the Supreme Court for which the American federal system was seeking to take its Constitutional role seriously in brought into being? the same way that earlier courts might have, but Here we come to a problem that I think is not also the fact that the executive and legislative one of structures or of procedures, but a problem branches of the federal government have abdi- of people. Here, in effect, we confront the essence cated their roles as Constitutional interpreters. of the American problem today-n a whole va- Nowhere in the Constitution or in tbeFedemlist- riety of fronts and not just on this one. which comments on the Constitution and is, shall Although it may sound trite, I think we have to we say, the authoritative commentary on the Con- start from this point, even if we are frustrated in stitution insofar as there is on-nowhere does it dealing with it. We are back to the Pogo syn- say that the interpretation of the Constitution is drome: “We have met the enemy and they is us.” the sole and exclusive responsibility of the U.S. Without dealing with that questionand I don’t Supreme court. think we have the answers, frankly, that we would Quite to the contrary, in previous periods the like to have-all the rest of the report becomes, in President and certainly Congress have understood a sense, a series of palliativeHome of which are their functions to include preserving and protect- desirable, some of which won’t make any differing the Constitution. Indeed, it’s in the Presiden- ence, some of which, indeed, may be counterpro- tial oath. I believe there’s a similar phrage in all ductive. But they are still only palliatives. other oaths of those holding high federal office in I think the comment has been made-by Bill the United States. Colman just a moment or two agwthat once one Today we have a situation in which Presidents finishes with the Confederate speech at the begin- and Congresses will do anything and say, “Well, ning of the report--and I don’t say this in a sub- if it’s unconstitutional, we’ll let the court declare stantive sense, but only in the symbolic sense- it unconstitutional.” I don’t have to cite chapter then ona reads the~recommendations and gets the and verse to this distinguished body, but once impression of a large gap between the two. I think that happens, there’s no sense of Constitutionality the situation has been analyzed properly and crit- and everything goes. ically. We have stated that the problem is a seri- The natural history of this situation is easily ous one, but we have very little to say. Indeed, the traced. In the 1950s the federal government be- closer we come to the heart of the issue, the less came actively involved in a supportive role in vir- we really can recommend. tually every field of governmental endeavor other For example, the report properly comments on than the most utterly local. The 1960s witnessed the important role that U.S. Supreme Court has a shift in that involvement--from supporting state played in this changing circumstance, adding that and local initiatives to taking the initiative and the Court has moved from being an umpire to requiring the states and localities to conform to being a spectator or a participant. But it’s not only federally established directions. This, in turn, the Supreme Court; it’s also lower federal courts. lead in the early 1970s to increasing federal I’m not going to tell you some of the horror stories preemption of state and local powers, and in the that I have heard from judges in describing their mid-1970s to the notion that the federal govern- role, which I believe would clearly document this ment was the policymaker by right; the states and statement. Yet, there’s very little that the report localities were merely viewed as convenient ad- says on this matter. Maybe there’s very little that ministrative arms to be subjected to all kinds of

31 federal regulations, whether authorized by Con- did we get? We got people. We got people who gress or not. The report certainly addresses this do what people normally do. What came out was situation. a kind of perversely arranged system. Vulgar de- By the end of the decade, we had reached the centralization would not be too strong a word for point whereby the states increasingly were being it-maybe even vicious decentralization. excluded by federal preemption, formal or infor- In other words, Presidents and Congresses in- mal, from fields that were considered their exclu- creasingly acted on the basis of the following sive prerogative until relatively recently. It seems principle of decentralization: “What I or we can to me that this is the key change that has taken improve upon, we will do; what is likely to cause place. us loss or pain or bring dissatisfaction on the part Elsewhere I have suggested that at this time, of our constituents, we will give to the states and when the rhetoric on behalf of federalism has localities to do.” grown-and the report admirably refers to this- That is a normal human reaction in a variety of we have a substitution of decentralization for fed- situations. We cannot fault people for being hu- eralism under the slogans of “creative federal- man. It is for that reason that we established the ism,” “new federalism,” or whatever. It’s been Constitution in the first place--to deal with hu- going on since the Johnson Administration. And man frailties and failings that affect and afflict it is a bipartisan matter. Indeed, I think there is US. almost no distinction between the parties on this The end result was, of course, the kind of uned- issue. Anybody who reads the hesitancies SUT- ifying controversy that arose during the energy rounding the statements of even the conservative crisis of the past summer. The President was trying Republican candidates, or the ringing generalities to stick it to Governors with the powers, indeed, of even the most liberal of Democratic candidates, the necessity, to control prices, set allocations, will see how little difference exists. and so forth. This was explained on the grounds What these slogans masked was an attempt to that he was being a federalist and wanted to give change a noncentralized system-a system in responsibilities to the states. But the Governors which powers and functions were really dis- said, “No, this is a national responsibility, and the persed, not separated. I think they have not been President should keep it.” separated significantly since the beginning of the Having given up the Constitutiona; theory of Republic. federalism, and replaced it with a half-baked the- In this respect I differ, I think, from the implicit ory of decentralization (under whatever name), assumptions underlying the report. In my view we have come to a natural conclusion, which, of the old system was one of dispersed, noncentral- course, any one of the founders of this Republic, ized powers, and the new is one of decentralize- federalist or antifederalist, would have predicted, tion. That is to say, a central government-for- simply on the basis of being a fairly intelligent merly known as the federal government and still judge of human nature. Beyond that, I think we referred to es such in official documents--decides have discovered something else. This will be my what shall be done at the center, and what shall last general observation before I try to make a few be given out to the states and localities in the per- recommendations. My formal statement cites some ipheries. Anything in the peripheries, by defini- other examples. tion, is peripheral; therefore, it cannot command We have reached the point where even the best respect or talent or interests or long-range con- arguments on behalf of a greater federal role have cern. It can only be treated as one treats branch become problematic. If all this centralization had offices-that is to say, is it working well or isn’t led to the desired improvements that originally it? Is it productive or isn’t it, based upon a series were touted by its advocates, perhaps even those of measures that are derived from one place or an- of us who are committed federalists-who believe other? that the federal system is one of the fundamental The interesting thing is that this is not noble bulwarks of liberty, who support it for that reason decentralization. There are those who advocated and not because of vested interests, who still be- the change because they wanted noble decentral- lieve that liberty remains a principal goal of the ization for noble reasons. They thought that the American experiment--even we might be pre- states and localities really weren’t doing well, and pared to pay the price. Alas, the true record is that a strong federal hand was needed. But what now emerging. 32 Again, I give you only some immediate exam- Where does that leave us? If we’re to accept ples. The New York Times of March 8, 1980, in- Alexander Hamilton’s minimalist definition of a cludes an article on the increase in traffic deaths federal polity in Federalist Number 9, in 1979, which quotes Howard L. Anderson, the recently retired Federal Highway Administration Simply. .an assemblage of societies or associate administrator for safety: “Much of our an association of two or more states into present highway design criteria is based on what one state. The extent, modifications, and is now an obsolete design vehicle [the large au- objects of the federal authority are mere tomobile]. . . .Concrete median barriers which matters of discretion. So long as the sep- safely redirect the two-ton and larger vehicles arate organization of the members be not have shown a disturbing tendency to cause the abolished: so long as it exists, by a Con- subcompact car to roll over.” stitutional necessity, for local purposes; ,Those of us who are witness to the defacing of though it should be in perfect subordi- miles and miles of highway with ugly concrete nation to the general authortity of the barriers, destroying green median strips, at untold union, it would still be, in fact and in costs because the federal government required theory, an association of states or a con- that change if the states were to continue to re- federacy. . ceive highway funds, are now faced with the then we can be confident that we still have a fed- spectacle of those barriers serving as killers rather eral system. than the safety purposes for which they were pre- If, however, we modify that definition with sumably designed. It is important to recollect that Madison’s in Fedemlist Number 14, which de- those barriers were being erected in the mid- scribes what the American federal system should 197Os, after the energy crisis of 1973-74, and pre- be: cisely when the country was being pushed by other federal agencies--quite properly, in my The general government is not to be opinion, if not sufficiently-to shift to smaller charged with whole power of making CWS. and administering laws. Its jurisdiction One also can talk about the deinstitutionaliza- is limited to certain enumerated objects, tion policy mandated upon the states. The as- which concern all the members of %e sumption. of course, was that the best would hap- Republic, but which are not to be at- pen, that the communities would rise up and care tained by the separate provisions of any. for the deinstitutionalized. Now we know this is The subordinate governments extend not the case; there have been a spate of news ar- their care to all of those other objects ticles on this in recent weeks. Once again, the which can be separately provided for, but assumption that we would get perfection was the retain their due authority and activity. . enemy of the good. One can forgive all the well-meaning people then we have much to worry about indeed. who are involved in making these mistakes. None We have long since encroached on the Madi- of us can foresee the unanticipated consequences sonian definition, which if one notes carefully, of our acts. I would hate to be called accountable limits national intervention to those objects that for every decision that I made, nor would I expect concern all the members of the Republic, but anybody else to be accountable in that sense. One which are not to be obtained by the separate pro- cannot forgive them, however, for arrogating to visions of any. Lately we’ve been saying that any themselves and to the federal government a pre- little thing, because it doesn’t concern all the sumed omniscience that they did not have--all at members of the Republic, must be done by the the expense of the federal system. federal government. So here, I submit, we have a federal government Education, for example, concerns all members unrestrained in all three branches-one in which of the Republic, but under this definition, and ac- the Constitutional issues are never raised and are cording to the founding fathers, it was held to be considered irrelevant by those who presumably separately attainable by each state-yea, by each have taken an oath to preserve, protect, and da- locality-acting separately. It’s not simply the na- fend the Constitution. tional interest, but the national interest that can-

33 not be attained by separate provisions of any of of the conditions described in the report--such as the constituent units. the prevalence of individual policy entrepre- We have long since encroached on that stand. neurs, state and local lobbies, iron triangles, in- The fact is that we are now encroaching on the tergroup pressures-are endemic to American po- Hamiltonian definition by indirect mean-with litical life and are not likely to be altered by federally mandated commissions to implement anything that we do. They can only be stopped or the latest federally supported fads in governmen- restrained by Constitutional barriers, as they have tal structural reform, which are likely to become been in the past. What is crucial is which Consti- the concrete barriers and deinstitutionalization tutional barriers are there to stop them. programs of tomorrow, and federal executive ov- A campaign to restore those barriers is the only errides of legitimate state laws to expedite this hope that we have. I’m going to recommend a project or that. campaign for public education. That must be the What would I recommend? Permit me to dis- last desperate straw, but I think we are down to cuss this for a minute or two. Here, unfortunately, it. We need to develop a constituency that looks the report and I diverge in our prescriptions. The for those barriers; that allows a Congress to say, range of options offered in the report is, in my “Sorry, it’s a real urgent problem, but it’s not in opinion, incomplete. Indeed, the most important our bailiwick;” that allows a President, when option is missing. asked on the campaign trail what he is going to I repeat, the most important point to be made do about the street sign that’s down, to say, is that the old palliatives will not work. Nor will “That’s a wonderful question, but ask me about transferring welfare, health insurance, and social Afghanistan.” insurance programs to exclusive federal control Such a campaign must begin by developing an with the concomitant expansion of a bureaucracy understanding of what those Constitutional bar- already too big at specific points, even if its total riers are, and an interest in restoring them. Such size is no greater than it was 30 years ago. From a campaign can only be undertaken, it seems to the perspective of federalism, that will only pro- me, by people in institutions disengaged from the vide further reason for turning public attention to interest group struggle. Washington, something which the report explic- Those whose main concern is the system-the itly~ decries. Whigs of our tim+must launch it. The American Even the case for transfer rests on an unproven people and their representatives may not have the assumption. Moreover, in today’s climate, such a interest or the will to respond to such a campaign, transfer or any other transfers will simply especially in a time of alienation, cynicism, and strengthen the centralizing tendencies--which self-indulgence, part of which, of course, are re- the report has presented so well-by knocking out flected in the very way in which the system has the last prop and of maintaining a semblance of been operating. But those of us who have these the old federalism-namely, the still accepted Whiggish tendencies can do no less than try. idea that domestic social functions ara primarily Somewhere in the report it talks about restoring the province of the states, and if no longer theirs power to the sovereign citizen. That is precisely exclusively, are at least to be treated or handled the problem. In the founding of the United States, intergovernmentally. I would be very careful be- Americans became a sovereign people. We did fore we knock out that last prop, unless we are not develop sovereign citizens, each of whom can confident that other props have come to take their go about and do whatever he or she chooses. In- place. deed, it is the reinterpretation of the notion of Indeed, the fact is that it is precisely those so- popular sovereignty and its transference from the cial program areas which in the United States are people to individual citizens that has destroyed taken for granted by many as being naturally na- the very sense of public in this country, that tional. In most other federal systems, they are nat- makes it so difficult to talk about the kind of pub- urally intergovernmental, with the programmatic lic educational campaign, which I would submit burden falling on the intermediate planes of gov- is the only way to deal with this problem. ernment, the equivalent of our states. Specifically, then, in addition to such a politi- I would submit that only a restoration of Con- cal education campaign to advance the under- stitutional good sense can save the situation. Most standing of Constitutional federalism, we should

34 probably do relatively little. We have been, per- I’m intrigued by that. I agree with it. I just haps, too activist, too interested, too unrestrained. couldn’t help but play with the scenario where What we can do is rewrite certain aspects of the people who would develop that educational federal legislation that have interfered with the program came together to decide which view- possibility of a more state-centered political sys- point they were going to put forth, and how they tem. We can perhaps restrict the scope of condi- were going to do it. He mentioned using tele- tions attached to federal grants-in-aid. And we vision. I just cannot imagine-maybe it’s the hour cm cull federal grant programs to drop those that and the gloomy day-1 can’t imagine any coming do not deal with any substantial federal question to a consensus about what should be contained in [along the lines of the Madisonian definition), or such a program-the National Advertising Coun- that are explicitly directed toward the institutions cil sitting down to draft a Sesame Street-type. of state and local government. By being directed “Know Your Government” program. to those institutions, they make those institutions I guess I sense that people are giving up; for themselves dependent upon the federal largess example, The Empty Polling Booth-if you have and federal policy direction to far too great an not read it, I recommend it to you; it will ruin extent. your day. But with the growing influence of sin- If we can achieve these great although seem- gle interests, especially interest groups affecting ingly modest-sounding reforms, then perhaps we voting behavior, and other people sitting it out, can help along an increasing public-mindedness I just wonder if you or Prof. Naftalin have given on the subject-with some even more active steps any thought to the kind of format that it might later. take. Forgive me for taking so much time. Thank you I guess I still believe-and this may sound very much. really utopian-that only by finding really good people to run and to present the case through can- didacies are we going to get people believing CHAIRMAN BFAME Thank you. again in the system. I’m not sure they would even Questions? listen to it if you put it on television. Maybe you SIN. ANDERSON May I ask one, Mr. Chair- have some more hopeful thoughts. DlWl? PROF. RLAZAR: I don’t think we are read) to Dan, when you were talking about your edu- put it on television, so I agree with you in that cation program on restoring federalism I wasn’t sense. Starting from the other side, people would quite clear whether you thought that some Con- not listen to it. Again, I think that Prof. Naftalin stitutional change to better spell out the func- made a very strong point and a correct point about tional responsibilities of the federal and state gov- leadership. That is to say. leadership following ernments is required, or whether it’s a straight Gallup polls or other polls is not leadership. Lead- matter of education. ers have to lead. PROF. ELAZAR: At this point, 1 would say it’s This is the time, I think, when leaders really do a straight matter of education. I don’t think that have to lead. There are times when the public is one can undertake Constitutional change unless sound enough, perhaps, in its own mind so that one has an educated community that can consider leaders could rely on such devices. But this is not those changes. one of those times. Indeed, it’s more and more I don’t think we should ever rule out Consti- Eric Hoffer’s old statement that seems to ring tutional change. That is why we have an amend- true-“only a people that don’t need great leaders ment clause and a long appendage of various get them.” interpretations. I think the need now is for a con- I would say then that the first task is not to use stituency, for a public, that understands the Con- television, but to start a public education cam- stitution before it contemplates whether or not paign-not about what the prescriptions should changes are necessary. be, not even about what the federal government SUPRRVISOR CUTLER: I raised the same pro- should do and the states should do in that specific posal with Prof. Naftalin about education. The sense, but simply to deal with the Constitutional point is that we need to be educating people. dimensions of the question.

35 There are some clear-cut Constitutional pre- a state-centered intergovernmental program. There scriptions that in application lead to a lot of vary- was an argument over whether or not there should ing opinions. But at least the prescriptions are be patronage appointments in the welfare offices. fairly well accepted for what they are. There was an argument over how high the bene- I said at the beginning, “Lord help me for rec- fits should be. But no state tried to abolish the ommending a public education campaign.” I con- program. sider it to be a desperate step, even though I’m a This situation was the old federalism, as it teacher by profession. If you have to launch an were-when the federal government sometimes education campaign, it already means that the reflected a national consensus, which somehow problem has gotten extraordinarily severe. And I had to be stated nationally, as well as expressed think it has. But perhaps the initial steps need not through the individual states and localities. So be, and should not be, as I said, to jump to the I’m not entirely convinced that welfare should be television before we have some sense of what we transferred to Washington. want to say. Beyond that, if, at the same time, Social Secu- CHAIRMAN BEAME: Gov. Babbitt? rity had been set up on a federal-state basis-so GOV. BABBITT: I’d like to try a little defense that the whole income maintenance framework of the Commission’s position on transfer pay- would have been as it is in other federal systems ments. I’d do it by adding to Mr. Madison’s cri- (routed to the states with federal funding or sup- teria another one, where we’ll say that we should plements]-then I think the states would have leave at the local level-and, indeed, ought to built themselves up to deal with the range of such transfer to the local level right now-all the pro- problems (just as their counterparts abroad have), grams in which there is, or reasonably ought to because they would have touched the whole com- be, broad-based community interest and support. munity that way. On that basis, I would send back education; I’d I would argue that we had the opportunity. We send back the arts; I’d send law enforcement back may not want to do that at this stage of the game tomorrow; probably highways, and waste water with Social Security. It probably wouldn’t even treatment. All those things that benefit the whole be considered. But sooner or later we’re going to constituency. have some kind of national health insurance, I My concern about transfer payments is if you believe, and we have an opportunity f&r doing send welfare back to my state, there may not be this with health insurance. I think it would be a any welfare. It’s a small constituency, and it’s his- useful thing to do in this area. I think it would torically not been of interest to the large consti- provide a better health insurance system than any tuency. I sense that that is the criteria that lies at of the proposed options, which essentially are the divergence here. built upon direct federal control. I don’t know if PROF. ELAZAR: I have two responses. One is this is the place to go into that, but I’d be happy a very narrow, pragmatic response. That is, as- on another occasion to do that. suming there’s going to be a two-way transfer, as CHAIRMAN BF.AME: Gov. Dalton. you’re suggesting (and the report comes down GOV. DALTON: I was interested in what you hard on a transfer of income maintenance, health had to say, and what one of the other speakers insurance, and welfare to the federal authority), had to say, about forgetting the polls, being a then it gets very blurred with regard to transfers leader, and doing what you think is right. I don’t that should go in the other direction. know what the other members have experienced My own guess is that the transfers, if they come in their states, but certainly in my state, anybody about at all, would only go one way. The whole who doesn’t conduct a poll before he starts run- history of our experience in the past one-and-a- ning for statewide office better stay home. Do you half generations demonstrates that quite clearly. really believe that you can ignore what the people So this is a strictly pragmatic consideration. think and still get elected, that you can do that in But beyond that, there’s another interesting is- America today? sue to consider. Maybe there would not be the PROF. ELAZAR: I don’t think I said that. If I constituency for welfare that would exist for other did, let me correct that. programs. By the way, I think what is really quite No, I don’t think you can. I’m not even sure if clear is that after the 1935 federal act was passed, you can ignore it and get reelected. Unfortunately, there was almost no resistance to implementing many of the Governors who have been leaders-

36 and Governors are a particularly vulnerable group; people are going to say, “We want some leader- Mayors too, perhaps a little less so, because ship. We need it because we don’t have the an- they’ve had a little less opportunity-have suf- swers to this. And we can’t even judge what the fered as a result. That is a sad commentary on the answers are, because we’re not privy to every- present attitudes of the American people. And it thing that we need to do so.” At that point some has to do with some things the report highlights. people hopefully will come along who will be real As I mentioned, today we talk about sovereign leaders, and we’ll say, “By golly, he’s a leader.” citizens instead of sovereign people. Now, it’s That’s nice, you know. It hurts for a moment, but easy for me to sit here and say what has to be said. it’s like when you put medicine on a sore: It feels It’s much more difficult for somebody who is on good afterwards. the firing line like yourself to have to confront the &AH&UN BFAME: Thank you very much. reality of it. I’m perfectly aware of that. But I think GOV. DALTON: I think you can be a leader, but the job, at the very least, involves having to say without relying entirely on what the polls show it. you. I think if you get too far out front from what Sooner or later, we must note what Thucydides the people are looking for, you’re going to be re- warned of in his Peloponnesian Wars: “At every tired. crucial case, the people of Athens chose the pop- PROF. ELAZAR: I couldn’t agree with you ular course rather than the necessary course, which lllOP3. lead to their destruction.” CHAIRMAN BEAhlE: Our final invitee is Neal Maybe Thucydides’ formula is going to be ours. R. Peirce, a contributing editor of the Notional But if that doesn’t happen-and I have faith in the Journal, a nationally syndicated columnist, and American people that it won’t-at some point author of several books on state governments.

Statement Presented By Neal R. Peirce Syndicated Columnist, Contributing Editor, National Journal

T.his afternoon I will not be taking issue with the Commission staff’s basic analysis of the present-day ills of the American federal system. You are fortunate to have on your staff David Walker and other persons who have watched, analyzed, and red-flagged the evolution of American federalism in the past few years-more and better, indeed, than any other group in American society. 1n that sense, the experiment of having ah Advi- sory Commission on Intergovernmental Relations has proven its worth. Part of my admiration of the staff work is also gratitude, I might add. Late last year, for instance, I was able to write a four-part series on the mounting problems of American federalism by relying to no small degree on ACIR materials and staff wisdom. Now, having said a complimentary word or two about your Commission, I will also suggest this afternoon that ACIR is going to have to take at least one very bold, innovative, high-visibility step if it hopes to gain the broad national attention necessary for any serious consideration of reforms in the federal system. But more of that in a bit. Your briefing paper defines two extreme schools of thought on possible chang-ither “the system requires drastic Constitutional change” or “the system is already responding.” The paper implicity rejects both; I would too. I read over “Alternative Strategy A-Incrementally Improve the Present Intergovernmental System,” and found it terribly weak tea; about equivalent to the status

39 quo. On the other hand, “Alternative Strategy C- derstand HEW’s 300 categorical grant programs- Toward a Second Constitutional Convention” from adult education to the needs of handicapped seems both unnecessary and far too likely to raise children to research funds to combat leukemia- fears. The very idea of a fresh Constitutional con- well enough to weigh seriously the claim of one vention causes people to quake, as we learned in program against another. the debate over a balanced budget amendment to The pmbl&, said Richardson, is compounded the Constitution. Moreover, I’m not sure that the at the state and local levels, where programs are specific reforms a convention might adopt-short actually delivered. Their profusion, he added, of a parliamentary system of government-would “makes a responsible, democratic system impos- make all that much difference in the year-to-year sible” because Congress, in its “distrust” of May- functioning of federalism. ors, county executives, and Governors, has in- The most interesting ideas are in what your staff sisted on “the piling up of reporting requirements, paper calls “a more surgical school of thought systems of oversight and audit, and creating new that calls for fairly drastic change” in specified agencies regardless of whether they make sense.” areas, or “systemic reforms, short of total over- Richardson alleged that because of proliferating haul.” I’ll comment for a moment on those re- subcommittees, “the claims on the time of the forms brought up in tbe paper, and then irrever- Senate and House have multiplied to the point ently add a couple of my own. where Senators and Congressmen don’t have time Recommendation 1 is for some sorting out of to discharge their duties.” That, ladies and gentle- the grant system by tradeoffs. This is a bully idea, men, seems to me to be a pretty serious charge. and one with which I assumed ACIR already iden- Yet when I have spoken personally with members tified itself. The present-day “marbleization” of of Congress, all confess to an enormous overload government functions does make it virtually im- in their work. possible for a citizen to know which level of gov- Recommendation 3, on the Supreme Court as a ernment can be held definitively responsible and neutral arbiter, sounds alright to me, but I would accountable for any function. The management be amazed to see the Justices taking a new turn in efficiencies flowing from a sorting-out process decisions because of a recommendation by any could also be quite impressive. And I find it quite outside source. healthy to acknowledge that some functions, such Recommendation 4(afito strengthen the party as income imnsfer, must be federal, while others, system-1 hope might be possible. We are suffer- education included, are intrinsically local. Sort- ing because of the atomization of the parties, the ing out should be attractive to elected officials, proliferation of single-purpose interest groups. because they would have clear, unimpaired au- We could stand a strong, fresh infusion of party thority over an activity assigned to their level of discipline. government. Of course, they could also be held I shudder at your alternative Recommendation more clearly responsible, so that some might shun 4(b), to increase public participation in national the privilege of clear authority! policymaking, because the specifics therein-+ Recommendation 2 is for strengthening the in- national initiative and referendum process, for internal processes of the national government and stance-would be destructive of representative includes the Presidential authority to institute government in this country. I am distressed that categorical consolidations subject to Congres- the staff has listed preservation of the current sional veto, sunset legislation, clearer definition electoral college as one way to strengthen parties, of “national purpose” in new legislation, reduc- and a direct popular vote for President as a way ing the number of Congressional subcommittees to strengthen citizen participation under 4(a). As and subcommittee assignments, and fiscal notes you may have concluded from my remarks, I be- on new bills. All are stellar ideas. lieve strongly in American federalism. But I think At a federalism conference held at the Wood- that using the electoral college as a way to pre- row Wilson International Center for Scholars a serve federalism is foolishness in the extreme. couple of years ago, Elliot Richardson noted that Federalism has suffered a lot with the college in when he was Secretary of Health, Education, and place. If the electoral system blew up in our faces, Welfare, only a handful of persons from Capitol federalism would be blamed, because there would Hill and the executive branch even began to un- be no rational way to explain an election outcome

40 that defies the popular vote plurality-where elements now found in multiple categorical pro- votes in Wyoming for some reason are more im- grams, and reflecting that state’s own particular portant than those in California or New York. I needs and priorities. A team of federal officials believe the electoral college should be abolished might then negotiate with state officials: to agree to strengthen federalism and our political parties. on the state plan as reasonably responsive to na- I would totally reject the method in which it is tional policy goals, to set down benchmarks for treated in your staff paper and suggest you simply state use of the federal funds as well as use of its excise all mention of the electoral college in this own funds in a complementary manner, and to debate. establish in later years that the state is living up On the other hand, I would say “right on” to to the performance standards it has agreed to. your Recommendation 5-21 more assertive re- There might possibly be a “carrot and stick” fund- sponse on the part of states and localities to the ing formula, with states that live up to their ne- overloading of the system.” There are clear-cut, gotiated goals receiving a bonus in subsequent sound, specific proposals in the paper: for states years’ funding, while those that do not are pen- and localities to assess short and long-term fiscal alized to a degree. costs and benefits of federal programs with a view Such a process would allow substantially dif- to withdrawing from those found to be cost-ben- ferent plans in different states or regions of the efit negative; a joint state-local legal defense foun- nation, recognizing the vast social, economic, and dation to fight off coercive elements of federal political differences among states. It would per- policy: identifying in two years 25 federal grant mit the targeting of funds and effort to areas of programs for recommended termination; and so legitimate need in states, obviating the flow of 0*. money [as the present categoricals dictate) in Concurrently, I would hope states and localities ways that distort state or local priorities and gen- would move rapidly to make their national-level erate the growth of unneeded state and local bur- associations independent of direct federal fund- eaucracies. The negotiation of a clear-cut state ing. There is a kind of soapbox hypocrisy about plan would permit citizen groups to hold state state and local spokesmen proclaiming their in- governments clearly accountable for the use of dependence, state sovereignty, and so on, and federal funds that they are receiving. then not even coming up with the modest amounts You may say, the federal goverm&t still required to run their national-level lobbies and maintains the upper hand under such a system research arms. of negotiated federalism. Ultimately, of course it So much for the specifics of the staff paper. would-and so it will until the states say “no” Again, let me say it contains many most valuable to federal funds and determine to collect their ideas. Let me now add two of my own before clos- own revenues. From this Commission’s own ing. stiong support of federal revenue sharing, I One I would label “negotiated federalism.” It gather that even you are unwilling to contem- seems to me that the present forms of federal aid plate such a revolution. to states and localities undermine accountability Finally, I believe that if reform is going to in two ways. The categoric&, with their countless achieve any significant advance in the 198Os, rules and regulations, weaken the accountability of there must first be a convocation of the Consti- state or local officials to their own constituencies. tutional partners to identify the problems in the But block grant programs, to the extent they aren’t system and to chart out paths of reform. There is tied down with various “strings,” offer no assur- presently a glaring absence of any highly visible ance that important national goals-the sustenance “neutral” forum in which the key partners in of cities, land conservation, social equity-will be American domestic policy-the Congress, the respected by the recipient governments. President, Mayors, county executives, and Gov- A possible alternative lies with active negotia- ernors--can meet to thrash out problems in the tions between the federal government and its state operation of the federal system. White House partners, and concurrently between states and lo- meetings, Congressional hearings, and meetings calities. In a major grant area, such as economic of Governors or local officials all have obvious, development or social services, for instance, the severe drawbacks as a neutral setting in which a federal government might invite a state to draw relaxed conversation and planning for the future up a comprehensive general plan, consolidating can take place. And the meetings of this Commis-

41 sion, as its history has shown, simply do not at- were to formulate a proposal for some type of Con- tract enough public attention. stitutional convocation, to throw that idea out like Yet we see the crying need, implicit in all ACIR bread upon the waters, and to wait for citizen research, for some form of negotiation between groups and political leaders to take the bait and the partners, addressing areas such as sorting out start the process of reform moving forward on a of functions, forms of negotiated federalism, and fast, visible, and thus potentially~effective track? other ways to return clearer authority to all levels These are my remarks. 1 thank you. of government. So I believe serious consideration should be CHAIRMAN BEAME: Thank you, very much. given to a convocation of the federal partners, re- SEN. BOE: First of all, let me compliment you, quiring the personal participation of the President as I have before, on your filling the void in na- himself, Congressional leaders, and state and lo- tional publications on state and local government. cal government leaders, early in this decade. The We are appreciative of it. meeting should be planned to last several weeks. I must take issue with you on at least one of the It would be an ideal forum to start some hard- points you covered. I go back to Bill Colman’s headed bargaining and trade-offs, to see just which testimony. I don’t know if you were here. functions of government should be the responsi- MR. PEIRCE: Yes, I was here. bility of what levels within the federal system. SEN. BOE: I guess I asked the question or made Your own Commission would be the ideal the comment that it was a rather cavalier manner group to do the background studies and staffing. in which you threw out the idea of a Constitu- The product of the convocation should be an tional amendment. Other than by the Congres- agenda for reform of American federalism. Out of sional method, as I understood your remarks, you this, a principal goal for the years leading up to are ignoring that part of the Constitution that pro- the 200th anniversary of the Constitution in 1987 vides the state legislatures with an opportunity to could be the effort to implement the reform initiate amendments because of the actions that agenda. Indeed, to underscore its importance and you see down the road that this unbridled, un- relationship to the Constitution’s bicentennial, principled body might or might not take. the convocation might well be held in Philadel- MR. PEIRCEt Might I interject. I WEISsaying that phia rather than in Washington. others are very fearful of a convention. 1% not so Any political realist knows the odds are high sure whether that is a terrible idea. I believe prob- indeed against getting such a convocation called, ably if you had a Constitutional convention that and then against any proposals it might make to came up with a bunch of kooky ideas, they’d be change existing power relationships. But who can turned down. argue, as your own studies have shown so clearly, SEN. BOE: That is the safeguard. My point is that the fundamental nature and operation of that the 75% ratification process of whatever the American federalism has been radically altered by convention does is a tremendous safeguard. Yet, the events of the past 20 years? And, if that is so, I would say that the very heart of the reason we’re what could be more appropriate than to have the here discussing this report is that the system isn’t highest leaders of the branches and levels of working, 01 at least isn’t working very well any- American government gather together to examine more. It very well may take a tremendously visible and debate those changes and hopefully map out Constitutional convention, whether the proposal an appropriate reform agenda? is ever adopted or not, but the visibility of that At a minimum, the convocation would provide Constitutional convention idea. And it would a bully forum for the airing of the problems of have to be called by the state legislatures, because American federalism. At a maximum, it could be I think Congressman Fountain would agree with the first step-perhaps with subsequent meetings me that it wouldn’t be called any other way. during the decade to check on progresstoward So I would take issue with the tenor of your a number of timely, important, systemic changes. remarks with respect to the possibility and the No lesser proposal from your Commission is probability. In my mind, before this century is likely, in these confused and hectic times, to gen- over-in fact, much sooner, whether it’s the bal- erate a sufficiently high level of public attention. anced budget or some other item that comes up What could be the harm, I would ask, if ACIR under this agenda that we’re on now-that there

42 will be a Constitutional convention called by the then be in a better position to deal with the local state legislatures. governments, talking to them about what their MR PEIRCEz That is an interesting point. When priorities are in their particular localities. The ob- the balance-the-budget amendment was being jective of such negotiations would be less dupli- pressed by a number of persons, including your- cation of effort than exists in the picket-fence fed- self, it was made quite clear to everyone that the eralism, multiple categorical program approach. convention would consider that one matter alone. But I haven’t thought it out more fully than that. If one wants to have a convention that is going to CHMRMAN BEAME: Mayor Moody. look into the broad nature of the system, I guess it would have to be proposed in that manner. That MAYOR MOODY: I’m sure you have scune would raise, I suppose, more fears at the outset, awarsness that the “negotiated investment strat- although it presumably would gather more atten- egy” is at work in three American cities. While tion than any other step you might take. it’s too early to draw any conclusions about that SEN. BOE: I think most of us have always pred- process, with the single exception that it’s a very icated the call for the Constitutional convention difficult process, it does offer some of the hope upon Congressional enactment of the Ervin bill, that you suggest. And it also offers the opportu- or some type of a Congressional guideline that nity for all local governments to negotiate with presumably would be tested Constitutionally be- the state, with the federal government, and with fore a convention came. I think that’s a given for each other. most of us, at least for what I would call the re- I would indicate that I’m mildly optimistic that sponsible group of legislators and others who the process offers some of the things that you have been calling for this. A call then would be think it might. One of the difficulties, however, predicated upon that issue, decided prior to the is that the negotiators at the federal and state lev- Constitutional convention being convened. els are seldom in a position to keep their com- QMIRMAN BEAME: Lynn Cutler. mitments. They must always trot back and get ap- SUPERVISOR CUTLER: Now, I’m just wonder- proval. I don’t know yet what all this means. hit ing, in your idea of negotiated federalism, I can certainly indicates, however, that the process think of one program that begins to get to a little would be a difficult one, simply becausf of the bit of what you’re saying-Title XX on social serv- great number of jurisdictions in which the federal ices. Here each state must devise a plan with cer- government would have to negotiate, unless they tain federally stated goals and prove performance. give a greater authority farther down the line. I think it begins to get it, but we are leaving out a That brings up the question then of whether layer. national purpose is maintained. It’s a comment, What provision do you see for the further ne- only, and I don’t have any conclusions to draw gotiation between the state and locals as to the from it or any point to make, except that it’s hap- fulfillment of those goals: how that happens? pened. How far down does the carrot and stick go? From MR. PEIRCE: I find the negotiated investment our perspective, which Dan said a little bit earlier strategy a most interesting development, and I’ve about federal mandates to the states, what the been writing about it. It seems to me that it is states don’t like, they pass to the locals. I submit quite different from all of the more grandiose pro- that all this budget cutting is simply passing in- posals that anyone might make here, including flation down to many of us at the local level who mv own convocation idea. are faced with looking people in the eye. What do Instead, the negotiated investment strategy you see as the intergovernmental play between moves quietly, surreptitiously. and potentially or the states and the locals? hopefully effectively. It seeks to undermine all of MR. PEIRCE: I haven’t thought it out fully, to the categoric& and all the federal rules and reg- be honest with vou. If the state has gone through ulations by burrowing in at the local level, if pos- the exercise of laying down a fairly well-thought- sible, without Congress or other major national out plan, and been required to go through the CN- interest groups noticing until it’s gone a long a cible of negotiating with its federal partners and little ways, creating some rationality in terms of showing how that plan is consistent with the priorities and where the funds flow at the local state’s own funding and priorities, the state would level, and hoping that gradually that would create

43 a beachhead of rational negotiation that would that we have taken since or just what, but it was not be overturned. I’m afraid, however, that the a broad-based educational effort. Kind of interest- negotiated investment strategy may also prove ing to think about in terms of what you were get- politically vulnerable when those who are the ting at. guardians of specific federal categorical aid pro- MR. PEIRCE: Was it related to overall govern- grams realize that what the federal negotiator is mental systems or overall goals of society? I must being requested to do is to wash out the effective confess I had forgotten about it. intent of one or more federal programs in order to MS. WALL: Well, it’s really long ago. I don’t let something larger and more important go for- think I could be very specific except to say that ward at the local level. experience at the local level involved much of the MAYOR MOODY: The Feds have rather quickly community. recognized that, that’s right. SEN. ANDERSON: It produced a major chapter MR. PBIRCE: But that raises the other interest- on federalism. ing questions. Are those laws real, and can those SUPBRVISOR CUTLER: I just have to say, Neal, regulations and all those programs really be ef- that I really did not anticipate such harassing as fectively applied? for you to walk in here and suggest that the Na- CSURMAN BEAM& Any other questions? Ms. tional League of Cities and the Governors’ asso- Wall. ciation and the county officials and the Mayors MS. WALL: A brief comment. The call for pub- wean themselves away from federal funds. lic education reminds me of 20 years ago at the CHAIRMAN BEAME: I want to thank you very close of Eisenhower’s Presidency, when we went much for your ideas and suggestions. I again want through a program at the local level called “Goals to thank all of you. for Americans.” This was what everybody was to We will break until tomorrow. do in their local community. Now, I don’t know (Whereupon, at 5:00 p.m., the meeting was ad- if that was the beginning of this disastrous turn journed, to reconvene on Friday, March 14,198O.)

44 Appendix A The Federal Role in the Federal System: Analysis of Basic Finbings, Key Questions Raised, and Recommendations*

FINDINGS

In this study, “The Federal Role in the Federal System,” the Commission has identified drastic changes in the system that have OCCUIIXXI during the past two decades. These changes, when combined with some key standpat political attitudes and practices, have produced neither a dual nor cooperative brand of federalism but an increasingly dysfunctional form of federalism. Contem- porary intergovernmental relations, our research shows, have become more pervasive, more i&u- sive, more unmanageable, more ineffective, more costly, and above all, more unaccountable. The Signs

The prime symptom of this deepening dysfunc- tionalism is the continuing tendency to “intergovernmental&e” seemingly everything that becomes a public issue-and, increasingly, everything becomes a public issue. Its signs are everywhere, as

* The following draft version appears BF it did in the “Docket Book to the Witnesses” prior to the hearing on March 13, 1980. and to Commission members on March 14. When it has been revised in light of Commission deliberations, it will be the final chapter in Volume X of this study--An Agenda For American Federalism: Restoring Confidence and Competence.

45 previous chapters have documented; hence, there federal involvement, but most always in a regu- is no need to detail the degree to which: latory or grant assistance role, not in a direct servicing capacity. . the old line between private and public con- Judicially, the Supreme Court has ceased to be cerns has been obliterated, the “umpire” of the federal system, and is more . the very real distinctions between federal and accurately described as either spectator or player. state-local matters of the early 1960s have From an intergovernmental perspective, this is been lost; reflected in its fairly steady adherence to the old . state and local budgets have become ever New Deal Court’s passivity regarding Congress’ more fiscally dependent on grant revenues: seemingly unbridled right to regulate commerce, . state and local programs are involved in in- even for mandating purposes, and Congress’ will- tergovernmental fiscal transfers, conditions, ingness to use it in areas undreamed of before and court orders; 1960. Only a few decisions of the ZO-year period suggest some sensitivity regarding the states’ po- . state and local regulatory processes are cir- lice power and only the National League of Cities cumscribed by federal statutory and court- case suggests an actual judicial willingness to sanctioned constraints; curb the commerce power. . state and local policies and administrative This absence of an umpiring role is even more processes have been affected by the Supreme dramatically reflected in the federal judiciary’s Court’s extraordinary expansion of what is unwillingness to check Congress’ power to spend “absorbed” within the orbit of the Fourteenth for the general welfare, even when some of the Amendment; conditions attached to grants in the 1970s have . federal grants-in-aid have been “used” dur- amounted to coercion or arbitrary intrusion into ing the 1970s to serve national regulatory- the administrative and decisionmaking processes not promotional, supportive, or additive of state and local governments.’ The Tenth purposes: Amendment’s basic protection in the grant-in-aid l state and local governments have been “used” area, the judicial theory still holds, is the pre- to implement wholly national policies; and sumed capacity of the state and localities to say “no” to a grant. l the federal government has been “used” to The third major manifestation of a nonjudicious further what not so long ago would have been approach to federalism is reflected in the activist a wholly local or, at best, a state concern, stance of the High Court in its extraordinary ex- The details of these manifestations of incessant pansion of what is subsumed under the Four- intergovernmentalization are variously chroni- teenth Amendment. This includes not only broad cled in the 11 volumes that comprise this ACIR interpretations of the “equal protection” and “due study. process” clauses, but also the steady “absorption” within the amendment of most of the federal Bill of Rights.* Some Underlying Causes Fiscally, the federal government began the period with a much stronger revenue system than The underlying reasons for them are high- that of the states and the localities. Buttressing lighted throughout the seven case studies and &e the federal fiscal strength in the 1960s were its two background volumes, and they are analyzed broad-based income tax, the responsiveness of in son18 depth in the two previous chapters. To this levy to conditions of growth and inflation, recapitulate briefly, it has been the collapse of cer- the growing acceptance of deficit spending, the tain basic constraints in the Constitutional, fiscal, separate system for financing social insurance, and political areas that have nurtured these trou- and the ability to shift funds from defense to the blesome trends, along with the rise of relatively domestic sector. These combined to produce the unfettered individual policy entrepreneurs-usu- notion in the 1960s that “the resources are there, ally but not always in Congress, each pushing his if only we have the political will to tap them.” or her own favorite program initiative from con- The myth of the federal cornucopia thus was born. ception to enactment-that has spurred greater Politically, the changes in attitudes, in the

46 mode and extent of participation, and in the pro- Republicans in the Congress on federal role cess itself over the past two decades probably and grant-in-aid issues; and have been the most dramatic. American political history suggests that the major parties either sin- l the slow, but clear change in the manner that gly or in combination have provided their own Congress handles grant and grant-related leg- self-serving cluster of constraints on the expan- islation-from a largely partisan and ideolog- sion of the federal role in the federal system. Po- ically dominated, usually executive branch initiated, yet geared to reaching a rough con- litical forces and factors, after all, made questions of federalism a perennial source of campaign and sensus process in the 196Os, to a functionally Congressional debate from Washington to Ken- oriented, Congressionally dominated, coop- nedy, and they combined to keep the federal in- tive process in the 1970s.” tergovernmental role a comparatively modest one Some explain all this in terms of the Goldwater clear through to the mid-1960s. The Constitu- candidacy in 1964 and the resultant Johnson land- tional constraints, after all, had collapsed by the slide victory and the overwhelming Democratic late 193Os, and the fiscal were largely conditioned margins in the 69th Congress. For the first time, by the political. Yet, over the past decade and a an activist Democratic President could rely, if half, most of these political curbs have disinte- need be, solely cm northern party members. The grated. Witness the: product by 1968 was over 240 new aid programs and the concomitant piercing of dozens of here- l steady decline in the strength of local and tofore impregnable program “legitimacy” bar- territorial interests in the governmental and riers. political processes; The causes of these developments, we find, are l rapid rise recently of a host of newer types of morevaried and more complex. Preeminent among interest groups based on socio-mgralistic the forces shaping these developments has been (anti-abortion, etc.) and demographic [black, the most complex of all our national institutions: Hispanic, Indian, women, youth, and senior the Congress. As Table 1 shows, only Congress citizen) causes, alongside the traditional eco- played a consistently crucial role in each of the nomic (business, labor, farmers, doctors) and seven program areas reviewed in the Coplmis- programmatic [highways, welfare, public sion’s case studies. The Congressional role was health, etc.) groups; particularly significant in the originating phase of . increased efforts on the part of state and local the policy process, for in the initiation of pro- governments to lobby Washington, even as grams, no other actor eclipses the individual their own traditional strength at the national Congressional entrepreneur or issue activist. Our level was growing weaker, thanks to this findings belie the notion that Congress acts as a growing array of programmatic, socio-mor- great rubber stamp for Presidential, bureaucratic, alistic, and demographic groups that are ver- or interest group initiatives. In fact, in many in- tically organized and usually aligned against stances the opposite would be far closer to the them; truth. Hence, increasingly over the past 15 years, leg- . steady erosion in the capacity of the two ma- islation encompassing every conceivable subject jor parties to “absorb” and “reconcile” all of matter has spewed forth from Capitol Hill. Be- these interests in primaries and in national cause of this hyper-responsiveness, everything conventions assembled; reaches the national agenda: there is little order- ing of priorities (the SALT debate rages side by l steady deterioration of the capacity of the po- side with debate over federal funds for the repair litical branches of the national government to of local potholes, and jellyfish control succeeds “pacify” this plethora of pressure groups, es- while welfare reform fails), and there is little time pecially in a period of ostensibly “demo- or capacity for understanding the consequences cratic” and “open access” Congressional “re- of legislation. Policy is made in a “pass now, pay forms” and of a populist Presidency; later” atmosphere. l steady decline since the early 1960s in the Other key contributing factors include the basic voting differences between Democrats and shifts in popular attitudes regarding what is a

47 Table 1 MAJOR ACTORS AND FORCES IN POLICY DEVELOPMENT AND GROWTH

Functional Fields-ACIR Case Studlea

Elementary and Public !sw¶mdary Higher unempky FlW Assistance Education Education Envlmnmem merit LIbraties ProtectIon Internal Policy Actors Congress x x x x x x x President x x Interest Groups x x x x2 Bureaucracy x x x courts x x External Policy Actors Public Opinion x’ x Elections Political Parties x Press x’ x Environmental Influences Demographic & Social Trends x x x x Dislocations (War, Depression) x x x

1 Food stamps only. 2 IntereSt groups were crudal in the creation of the U.S. Fire Administration only. ‘ Source: Advisory Commission on Intergovernmental Relations. public issue and the need for an activist govern- gress’ role as the master architect of the current mental role, especially on the part of the federal anarchic pattern of intergovernmental relations. government;” the progressive narrowing of partisan differences in the Congress on federal role What flows from this, of course, is a national questions (even as the political rhetoric on the party system that no longer can perform its twin campaign trail seems to get even more polemical historic missio -f serving as an interest group and punitively anti-Washington): the ease with broker and of building (or preserving) national which almost every interest group in the 1970s consensus. It leads to the quip that, “The Demo- could establish a Washington office and the equal cratic Party is no party, but merely a collection of relative ease with which many of them “get a antagonistic interests held together for election hearing” before Congressional committees and purposes by categorical grants and their condi- administrators; the pulverizing in the 1970s of the tions.” It leads to a total confusion in official role- already heavily pluralistic power structure of the playing. Presidents act almost as frequently in a Congress, thanks to reforms and a soaring rate of mayoral or a gubernatorial role as in a national retirements; and the emergence of a totally de- Presidential one, and Congress plays municipal mythologized Presidency, especially in his roles and county council, not to mention the state leg- as policy initiator and program manager. All of islative role, as often as it acts as a national delib- these have combined to erode most of the older erative body. All these political changes have political constraints that kept the bulk of domestic combined to produce a process wherein incessant governmental issues and programs completely and intrusive intergovernmentalization is the in- out of the Washington arena and to reinforce Con- evitable result.

48 The Crucial “No Change” Area is a first-rate way of alleviating their fiscal pressures and that with a few more “push Even with the drastic changes in the Constitu- ups” and “jogs around the track,” especially tional, fiscal, and political areas, the dysfonc- if a President or a key committee chairman is tional traits of contemporary American federalism exercising with them, federal aid can be had would not be as pervasive and as potentially dan- without federal conditions. gerous as they are if continuing elements of “standpatism” also were not present. Where then These continuing attitudes and conditions, have there been no basic changes, when seem- along with their very real policy and political im- ingly all there has been throughout the 20 years plications, have complemented extreme individ- is incessant, if not mindless, change--and always, ual Congressional activism, the passivity/activity of course, under the banner of progress? The crit- dichotomy of the federal judiciary, the earlier comfortable condition of the federal Treasury, and ical cluster of static attitudes and practices include: the almost blinding flowering of fragmenting interests in “explaining” the critical contemporary l no basic change in the size of the federal bu- state of the system. In their own way, these atti- reaucracy and in the Presidential and tudes and practices have permitted the impres- Congressional desires (regardless of party or sion that the system still functions pretty much as ideological persuasion) to keep it relatively it did in the Eisenhower and Kennedy years. But small, despite an ever mounting number of anyone who can count the number of state and assignments given to it: local bureaucrats, of federal programs, of federal mandates and across-the-board conditions at- l no basic change in relying almost exclusively on grants-in-aid as the primary instrumental- tached to federal grants, and of instances where ity for carrying out the national government’s the federal courts are actually running certain prime domestic servicing responsibilities;5 state and local operations, knows better.

l no basic change, as the above would suggest, in the national government’s direct servicing Where Stands the System? role from that of 1960 (or of 1940, for that 1 matter); In combination, these attitudes along with the . no basic change in the Congressional and changed political and earlier economic condi- Presidential view that relying on state and lo- tions, noted above, have led to an overloading of cal governments and administrators even for the intergovernmental system. The most national the most “national” of programs is “admin- of concerns (income maintenance, health insur- istratively convenient,” cheap, a curb on fed- ance, and welfare] are still intergovernmentalized eral bureaucratic growth, and clever politi- and the most local of matters (potholes, rat con- cally; trol, libraries, police officer’s pensions, jellyfish . no basic change in the dominance of the old control, and the like) have become intergovern- public administration approach to intergov- mentalized. The most major as well as the clearly ernmental program management-that with minor are all part of what cooperative federalism adequate conditions and sanctions, state and now encompasses. Yet, in truth, there is precious local administrators can be rendered properly little cooperation and a lot of inevitable conflict. accountable, hence a part of a “chain of com- Cooperation after all rests on shared goals and mand” whose pyramidal peaks are in Wash- mutual trust-rare commodities in this period of ington: controversial and conflicting program goals, creeping conditionalism, and chronic buckpass- . no change in the belief of liberals that with ing. the right formula or the right administrator A rather fanciful form of federalism, then, has [depending on the form of the grant), equity emerged. Basic policies in most program areas and “targeting” can be achieved: and appear to be made in Washington, either by the . finally, no basic change in the belief of most Supreme Court or the Congress, and their imple- state and local officials and their representa- mentation is achieved through decisions, orders, tional groups in Washington that federal aid mandates, conditions, regulations, and the lure of

49 federal loot to 12 million state and local civil ser- equity, accountablility, and any operational no- vants, All this is fanciful, of course, because the tion of national prioritie-e lost from sight, the subnational governments, their elected officials, same question arises: Where stands the system? and bureaucracies are capable of a highly differ- entiated response to all this-in terms of compliance, cooperation, participation, and conflict. Summary Commission Findings Equally fanciful is any notion that the federal In light of these various findings and our inter- aid system as a whole protects the interests of the needy or equalizes levels of public service. The pretation of them: logrolling style-whether explicit or, more often, . The Commission concludes that the current implicit-through which most grant programs are network of intergovernmental relations has adopted simply precludes any careful “targeting” become dangerously overloaded, to the point of fiscal resources. “What’s in it for me?” is the that American federalism’s most trumpeted watchword for Congressmen (and their folks back traditional traits-flexibility and workabil- home], for special interest lobbies, and for bu- ity-are critically endangered. reaucrats as well. Questions of equity are largely l The Commission further concludes that this ignored in the scramble for benefits. If they were threatening condition largely has coma about a genuine concern, direct federal performance of as a consequence of a rapid expansion in the the function at least would be raised as a serious overall scope, range of specific concerns, and issue, but the last time this occurred was in the coercive character of the federal role in the mid-1950s. federal system, thanks to the collapse of var- Matters of operational efficiency also are sel- ious political, judicial, and fiscal factors that dom brought into focus, either before or after the formerly disciplined the national political fact. Potential benefits are usually dramatized; process. potential costs are frequently ignored. Not only are many intergovernmental programs poorly de- l The Commission obviously recognizes that signed to accomplish their stated objectives, most while certain governmental activities neces- sitate an intergovernmental approach, it be- are not “designed” at all; their objectives are sel- lieves that the almost unbridled tenc$mcy on dom specified in operationally meaningful terms. Furthermore, few programs are evaluated onca the part of the national government and the political process that sustains it to thrust they are in place, and fewer still are modified or nearly all of the nation’s most national do- scrapped in consequence. Above all, perhaps, no mestic concerns, as well as an ever-multiply- real debate has occurred regarding the question- ing number of parochial and even private able administrative assumptions on which grants management rests. concerns, into the intergovernmental arena reflects a feeble faith in the problem-solving But where does this leave the electorate? Con- capacity of the various partners in the federal fused and alienated! The system has become largely incomprehensible even to those whose job system. it is to have an overview understanding of it. No . The Commission believes further that this wonder the average citizen, who is skeptical of permits the national government to avoid politics and politicians but who still trusts CJUT some of its most basic domestic governmental basic governmental institutions, is endlessly frus- responsibilities, while cluttering up its agenda trated by the complexity, confusion, and not-so- with issues that nmre properly belong on that occasional corruption of the system. If in a dem- of a municipal or county council, a school ocratic federal republic, the citizensnot to men- board, or a state legislature. tion its key administrators and prime politi- l Finally, the Commission concludes that nei- cians-are unable to comprehend the most basic ther equity (in the sense of giving due atten- aspects of policy formulation and implementation tion to jurisdictions or people in need], nor [other than in terms of personality appeals, “pork,” administrative effectiveness, nor economic and rhetoric relating to leadership), where stands efficiency, nor above all political, electoral, the system? If all of the norms relating to a func- or administrative accountability are furthered tioning system--again, effectiveness, efficiency, by this tendency to intergovermnentalize

50 practically all domestic questions, nearly all ply to apply for them and keep required records. subnational governmental functions, and the Grantsmanship has become a recognized profes- bulk of the national government’s own civil sion. Many private consultants make a living at governmental obligations. it. Federal grant programs are available for a very wide range of programs. They encompass such KEY QUESTl~M&SED BY THE fields as agriculture, community and economic development, education, employment and training, fire safety, food and nutrition, health, hous- How then is the system to be rendered more functional, more accountable, and more compre- ing, law enforcement, occupational safety, social services, transportation, and welfare. Many of hensible? Both the distant and the immediate these fields are traditional provinces of the state past, as well as the present, provide fairly clear and local governments. Federal entry has oc- reasons as to why this now is the prime issue fac- curred primarily in recent decades. Now, the fed- ing American federalism. We think we under- eral government simply is into everything. stand the dynamics of contemporary change, the Although federal grants are voluntarily ac- prime actors, and the consequences of our recent cepted by state and local governments, as a legal actions. Yet, we see the future no more clearly matter, the practical reality is that many must than anyone else. The foreign policy impondera- bles, the domestic political and economic uncer- have the federal funds to make ends meet. This necessity for state and local participation in the tainties, the course of the Supreme Court [and per- federal aid system has been used by the federal haps a possible switch in time to save far more government to multiply the effects of its policies than nine, to revise the old saying] are all prob- throughout the nation fm out of proportion to the lematic. But the present condition of American amount of federal funds and personnel commit- federalism is clear to us. Our diagnosis is that it ted. is seriously ill. As a practical matter, the federal government Sensible prescriptions, however, are not easy to has taken over policy leadership in virtually every come by, but the following probe of seven of the functional field in which it offers aid, despite the basic problems generated by these developments fact that its funding is predominant only in the can facilitate and focus the effort to identify the income maintenance and housing fields. General proper cures. In this probe, Commission members national policies on matters such as civil rights, are urged not only to weigh the merits of the spe- opportunities for the handicapped, and protection cific proposals advanced under each of the topical of the environment-to cite only a few of 30-odd areas, but also to add your own recommendations. such requirements-are attached to most grants, Empty blanks are left at appropriate places for along with each grant’s own program require- your additions. ments. Thus, even when a grant is small, the national policy component is large. For example, the Problem 1: federal government provides only about 8% of The Federal Grant System public primary and secondary education funds in Is Overloaded the nation, but has heavy influence over nearly every public school. The national government offers state and local Administratively, federal grants too often frus- governments nearly 500 separate grant programs. trate effective and efficient public service by the These range in size from nearly a dozen large state and local governments. Some are so nar- multibillion dollar programs to nearly three dozen rawly drawn that what needs to be done is ineli- small programs of less than one million dollars, gible for funding. Most bear so much red tape as each at the national level. to waste time and resources that should be spent It is estimated that approximately 63,000 of the on program objectives. Many are spread so thinly nation’s 80,000 state and local governments re- and targeted so poorly that they do not meet their ceive one or more such grants. Many states and objectives. large local governments receive so many different Political accountability often is confused when federal grants that they have hired specialists sim- program dollars, policymaking, and administra-

51 tion are shared so widely. Under these conditions, reaucracy. This array of potential support for na- no one is sure exactly who should be held re- tional programs, they point out, often is more ef- sponsible when the aided program falters. In fact, fective than that found at the state or local levels. no single body or official can be tagged or ex- It is not likely, then, in the view of these observ- pected to remedy the difficulty single-handedly. ers. that the grant system could be made less per- In short, the seemingly endless proliferation of vasive. Perhaps its growth may be slowed some- aid programs into areas wholly national (like so- what, as the new federal fiscal constraints now on cial insurance programs] and wholly local and the horizon become stronger and as the potential even private, as well as to activities that inevitably range of federal aid fields is filled, but actual de- are of an intergovernmental nature; the expansion creases in money amounts or the range of program of eligibility to reach directly practically all of the concerns would not be expected. categories of subnational government: the advent Middle-range reformers, however, are less pas- of more conditions and more national policy re- simistic about change and claim that real oppor- quirements; the mounting difficulty of any level tunities for improving the grant system could be or unit within a level to keep track of, not to men- expected in the realms of program simplification tion oversee, this system; and the public’s grow- and consolidation. These would reduce some of ing disenchantment with a system that seems out the administrative burdens now associated with of control--all suggest an overloaded condition. federal grants, and allow greater policy discretion Some feel this can be corrected by strengthen- to be exercised by state and local grant recipients. ing the processes in the Congress and executive Critics of these incrementalist and consolida- branch that bear directly on the enactment and tionist approaches believe that, as difficult as it reenactment of grant programs and regulations. may be to accomplish, considerably more is Others focus on the need for a strong, pervasive, needed. The simplification and consolidation ap- persistent, and popularly as well as public inter- proach, even with a heavy dose of federal con- est group-supported drive for grant consolida- sultation with grant recipients, they assert, will tions. A third group argues strongly that incre- not be enough to convert the present array of mental procedures and even grant mergers are grants into a smoothly functioning, manageable inadequate and call for a dramatic decongestion system of federal aid. They propose, thergfore, a of the intergovernmental arena. In ita view, the major reassignment of functions, in which the functional assignment pattern has become almost federal government would take full responsibility totally botched up by the federal aid system, and for certain functions now aided (like welfare, some sorting out of programs and activities is health insurance, and other social insurance pm- mandatory if any semblance of an authoritative, grams), while eliminating the federal role and aid sensible, national government and of state and lo- in a range of petty grants where the federal con- cal governments with some genuine discretion is tribution is minor, in those programs where the to be resurracted. administrative costs are disproportionately high, To still other observers, the forces that have cre- an&or in those that are funded at $100 million or ated the present federal aid system seem irrevers- less. Such actions not only would reduce the ible. Increasingly, the nation’s economy, sense of scope of the federal aid, but also would substan- community, and debates on public policy issues tially increase the size of the federal budget and have been coalescing at the national level, they bureaucracy, as beneficiary payments are brought contend. Airplanes. the national press, television, up to equitable and reasonable levels and as fed- mass marketing, influential books, the ascen- eral “administration” becomes something more dency of national interest groups of all types, plus than checkwriting. At the same time, state and other technological and social factors, they feel, some local bureaucracies could be reduced. More- are unifying the nation and pushing increasing over, the funds freed up at the state and local lev- numbers of public policy issues to the national els would be available for the range of activities level where they receive greater attention. This now aided by hundreds of project and small for- attention comes from the national media, entre- mula grants. On balance, proponents of such preneurial members of Congress, national interest functional trade-offs believe than that the grant groups, and the national Administration which is system and the nation would be well served by backed up by a professional and well-paid bu- this decongesting strategy.

52 Despite these differing views about what is re- For the Parties alistic and what is necessary, the present overload on the grant system cannot be ignored. The fol- . Address the problem of overload in tbe fed- lowing proposals have been suggested for consid- eral grant system in their platforms; eration by, and counsel from, Commission mem- . bers: For the State and Local Governments For the Congress and . Full federal assumption of financial’ and ad- Their National Associations ministrative responsibility for public assistance through the creation of an adequate, . Participate in developing grant merger pro- uniform, national income support system; posals; . Participate in developing grant tradeoff pro- l Creation of a nationally financed and admin- posals through identification of low-priority istered system for health, unemployment, and other social insurance: programs; l Working out on a state-by-state basis ail eq- . A substantial reduction through termination uitable formula for allocating any funds freed in the number and range of other federally up as a consequence of a significant func- aided activities, with the prime candidates tional tradeoff with the federal government;. coming from approximately 466 programs that account for less than one-fifth of all fed- . eral grant outlays, from those functional fields in which the federal share of governmental expenditures at all levels is less than [5%] [lo%], from those programs that lack appropriations, from those whose annual appropri- Problem 2: ation amounts to $100 million or less, and/or Future Congestion of from those whose authorizations bear no re- The Intergovernmental System lationship to their stated objectives; . A drastic decrease in the number of separate The accomplishment of certain fundamental authorizations for federal grants through program trade-offs or decongestive strategies, as large-scale consolidation;’ described above, does not preclude future re- . A “sunset” review process providing for the congestion. Indeed, the undisciplined state (or automatic termination of grant-in-aid pro- perhaps more accurately, the lack of parameters) grams at regularly scheduled intervals unless of the national policy process itself is, in large their performance evaluations indicate that part, responsible for that congestion. Hence, since reauthorization is warranted:* the 1960% and continuing at a vastly accelerated . pace through the 197Os, the federal role in the federal system has grown not only financially big- ger, but also functionally broader and systemi- For the Executive Branch cally deeper. As was illuminated in the case studies, much, if not most, of this “growth” has been . More conscious use of the executive budget accomplished through legislative and administra- process to reshape and restrain grant programs and to propose appropriate consoli- tive processes that result in generally incoherent intergovemmentalized aid systems. dations: A major cause of this incoherence has been the . Use of Presidential reorganization powers increasing prevalence of individual policy entre- and of grant consolidation authority that Con- preneurs, particularly in Congress, and their frag- gress should provide to help streamline tbe menting effect upon the policy process. Relatively grant system; unencumbered by any procedural or political con- . straints at this point, this sort of policy entrepreneurship tends to produce reams of unrelated

53 piecemeal legislation-responsive in the short subcommittee assignments requires some abso- run to particular interests or constituencies but lute numerical reduction. often oblivious in the longer run to the broader Nor are Congressional processes and structures national interest. Large policies and, even more alone in need of reform. Policy development and significantly, small programs are increasingly procedures for reviewing the national policy “fit” born in a “pass now, pay later” atmosphere. More- of proposed legislation in the executive branch over. such piecemeal legislating tends to spawn have also lacked discipline and effectiveness. Fi- expedient, “quick fix,” and seemingly “cheap” nally, the governments and interests who lobby implementing solutions. Ostensibly, grants-in-aid for additional small programs and the public and are both easy answers and proven methods of gar- party system that condones them all have contrib- nering political support. uted to the current state of disarray. Yet, these implementing “solutions,” involved Hence, to help prevent future congestion of the as they are in an almost unfathomable array of intergovernmental system, the following reform “national” undertakings-large and small, impor- proposals, addressed to the institutions and actors tant and trivial, of national significance and of in tire policy process, are advanced for Commis- local interest-have done less to solve problems sion consideration and debate: than to create the over-intergovernmentalized, unaccountable, inequitable, and inefficient con- For the Congress dition that faces today’s increasingly alienated American public. l “Sunrise” legislation which would require Whether or not any procedural or structural formal Congressional consideration of: (a] the remedies can be devised is, of course, highly un- “national purpose” or “national objective” of certain. Process and organization are, by no means, new legislation, (b) alternative implementa- mere sterile managerial problems. Quite the con- tion mechanisms for achieving that purpose, trary, they are the most political of issues. Pro- and (c) the possibility of altering or expand- cedural strictures, some allege, make even the ing related preexisting legislation when it most genuinely compelling and coherent policies may be used to achieve the same purposes; difficult to enact. And, individual policy entre- l Prohibition against enactment of any pro- preneurship-attached as it increasingly is to un- gram or policy (except research), the federal precedented numbers of near-autonomous sub- funding of which would amount to less than committee chairmanships-is power not readily ($100 million); relinquished. l Adoption of binding rules of germaneness Nonetheless, the need for such remedies is with reference to committee and floor amend- clear. Hence, to stem future intergovernmental ments; congestion, legislators need mechanisms through l Reduction of the number and autonomy of which they may formally appraise the real na- Congressional subcommittees in related functional purpose and future intergovernmental im- tional fields: pact of laws before enactment. Furthermore, they l Reorganization of functionally related sub- need processes that assure fuller consideration of committees together under appropriate func- alternative implementation techniques, and they tional committees; desperately need ways and means of identifying related preexisting legislation, the altering or ex- l Reduction in the number of subcommittee pansion of which might achieve the same purpose and committee assignments per member of as proposed new legislation. tbe Senate and House; Moreover, inasmuch as institutional fiagmen- . tation, legislative overextension, and lack of internal discipline have contributed to the intergovernmental policy morass, the structure of For the Executive Branch Congressional committees requires some func- l Strengthened “foresight” procedures for re- tional rationalization and jurisdictional coordi- viewing legislation proposed by the Congress nation, while the number of subcommittees and or agencies;

54 l Extension, by Constitutional amendment, of of national income or would enforce budgetary the President’s veto authority to apply to spe- balances, and thus impose external discipline on cific items within legislation; the nation’s political actors. A more modest re- . form strategy calls for the “indexation” of the federal income tax. As matters stand, the progressive structure of the income tax forces taxpayers into For the Courts steadily higher brackets automatically, without l In relevant cases coming before it, more bal- overt Congressional action. anced Court consideration of the terms and Others contend that the real problem is not the conditions of federal grants-in-aid in light of overall size of the federal fiscal role, but poor fed- the “inducement” vs. “coercion” test; eral performance. What angers voters, they be- . lieve, is not so much that government costs too much as that it provides too little for the money. They note that public opinion polls have sup For the Political Parties ported high and rising levels of expenditure in most major functional fields for many years, and l Adoption of measures that would strengthen the parties as forums for the regular consid- that American government is a low-cost operation eration of major policy issues; compared to that in many other nations. Further- more, they argue, artificial restraints would thwart . efforts to stabilize employment and price levels through macroeconomic policy. What is more generally conceded is that outlays Problem 3: in many program areas have grown unexpectedly Excessive Federal Expenditures, and perhaps excessively, regardless of budgetary Taxes, and Debt priorities. Indeed, three-quarters of federal spending is now beyond effective control through the The post-Proposition 13 “tax revolt” has fo- annual budget and appropriations process. Enti- cused nationwide attention on the growing fiscal tlement programs, including federal payments to role of governments at all levels. Many believe individuals (among them Social Securfty and that current levels of federal expenditures, taxa- Medicare) and open-ended grants to states (in- tion, and debt are too high. Federal spending has cluding Aid for Families with Dependent Cbil- increased sharply since the mid-1950s. even in dren and Medicaid) make large tax cuts, a bal- constant dollar terms, with most of the increase anced budget, or the creation of major new federal involving payments to individuals and grants-in- spending programs difficult, if not impossible. aid. As expenditures have risen, tax and debt lev- Although uncontrollable spending has risen as els necessarily have increased as well. a proportion of federal outlays with each passing The normal process for the control of federal year, the problem is not a new one. Traditional outlays is the annual budget. In recent years, ef- reform efforts have focused on reducing outlays forts have been made with some degree of success by reducing the number of beneficiaries or con- to improve budgeting in the executive branch trolling factor costs in the principal fields of con- (PPBS, zero-base budgeting] and on Capitol Hill corn. Thus, there have been continuing efforts to (the Congressional budget process). Some believe reduce the welfare rolls through tighter manage- that these innovations have considerable promise, ment, social services, education and training, particularly in the view of popular demands for work requirements, and public service jobs-all federal fiscal restraint. Yet to others, the budget largely unsuccessfully. In health, cost control has process seems wholly inadequate, especially for been sought through regulation, planning, and my restructuring of intergovernmental programs the encouragement of new forms of medical pmc- and of the federal role in the system. tice-again, to this date, largely unsuccessfully. Hence, several proposals have been advanced Some now view welfare reform and a unified sys- for Constitutional or statutory restraints on federal tem of national health insurance as essential tools tax levels, expenditures, or deficits. Most of these in the cost control struggle. would tie spending or tax levels to some measure More recent proposals attack the entitlement

55 problem in toto, rather than on a function-by- l Improving multiyear budgeting efforts; function basis. The Congressional BudgetAct pro- . vided some procedural restrictions on the creation of new entitlement programs, but has not limited outlays for those already in place. Other For the State and Local Governments possibilities include making most entitlement and programs subject to the annual appropriations Their National Associations process; the elimination of automatic cost-of-liv- . More effective control of costs in open-ended ing adjustments; and a movement toward multi- federal aid programs; year, rather than annual, budgeting. . All of these proposals face common political difficulties. Entitlement programs are very popular in Congress and among the large number of people who benefit from them. Efforts at control have been, and will be resisted. Especially during Problem 4: a period of general budgetary constraint, entitle- Imposition of Excessive Costs on ment programs have strong appeal because they State and Local Governments assure continued funding. Finally, the design of payment programs for individuals that do not The “pass now, pay later” atmosphere referred utilize the entitlement approach is conceptually to in the description of Problem 2 above means difficult. that other levels of government, unexpectedly, do If entitlement spending is not contained, how- much of the “paying.” The continual and even in- ever, federal tax increases may be more likely than creasing use of seemingly “cheap and easy” grant cutbacks. In recognition of the increasing number and regulatory mechanisms may, in fact, impose of elderly, the Congress presently is exploring ad- very “expensive and difficult,” though initially ditional revenue measures, including a value- hidden, costs upon state and local governments. added tax. Nor are these hidden, often massive, costs part Hence, to control excessive federal expendi- of some insidious plot on the part of the,Wash- tures, taxes, and debt, the following reform pro- ington establishment td weaken or financially ov- posals have been advanced for Commission con- erburden the nation’s Governors, county officials, sideration: and Mayors. Rather, the very lack of planning and analysis, which expedites the consideration and For the Congress passage of national policies and in which broad . A strengthening of the Congressional budget idyllic goal statements pass for solutions, is to process; blame. Indeed, it might be said that the political l Constitutional or statutory tax, expenditure, process provides considerable incentives for ex- or debt limitaticn& aggerating the potential benefits of new programs while minimizing their potential costs. And, if . Indexation of the federal income tax? this is true throughout the policy process, it is . Control of health and welfare spending particularly true in the development of regula- through programmatic reforms; tions and particularly true of the 1970s. l A fully federally financed welfare program” Hence, Congress often seems to view regulatory and national social insurance; proposals and unilateral moral issues as oppor- . Further controls on the creation and funding tunities for “position taking.” Yet, as the case of entitlement programs; studies have revealed, from such symbolic rhetorical commitments flow major enactments--en- . actments imbued with profound economic implications. Further, while this tendency to ignore For the Executive Branch potential costs is most visible in overt regulatory law, it is equally as true of the myriad of national . A strengthening of the zero-base budget pro- policy objectives and conditions now attached to cess; grant programs-all of indisputable moral, social,

56 and physical worth; some imposing ill-consid- For the Executive Branch ered costs on recipient jurisdictions. Agency estimation and publication of pro- Whether or not such hidden costs can be iden- jected and current costs, benefits, and other tified and mitigated is less than certain. Skeptics impacts of proposed and ongoing regula- argue that preenactment procedures that truly re- tions: flected future costs would mean the virtual end of social and environmental progress or, at the very least, reduce the pace of that progress, while lengthy cost-benefit analyses ensued. Others contend that the current state of the forecasting art is For the Courts simply incapable of accurately or even closely More balanced consideration in relevant cases predicting future costs and needs. of the degree to which inducement amounts Nonetheless, the need for some method or set to coercion when judging the required terms of methods to ensure more thoughtful prior and and conditions of federal grants to be met by current consideration of regulatory costs, partic- their recipients: ularly as those costs are imposed by federal mandate upon other levels of governments, seems em- More careful weighing of the claims of na- inently clear. Thus, Congress might institute some tional necessity and of the counterarguments prelegislative mechanism for assessing the costs that state sovereign interests have been im- to state and local governments of legislation that paired by national mandates; affects those jurisdictions and. thereafter, require appropriate agencies to estimate and publish projected costs, benefits, and other impacts of proposed and ongoing regulations. For the State and local Governments In addition, to ease their own fiscal burdens, the states and localities might engage in more ag- Assess &e short and long-term fiscal costs gressive legal actions against “coercive” condi- and benefits of participating in each of the tions attached to federal grants. And, finally, in federal aid programs wherein they are actual such cases. the Supreme Court might attempt a or potential recipients and establish f&al more balanced consideration of the degree to guidelines on when participation is not suf- which ostensible inducements actually amount to ficiently in the recipient’s interest: coercion. Establish a joint state-local legal defense unit Thus, to ensure that excessive and unforeseen to monitor and institute legal actions involv- costs are not imposed on state and local governing “coercive” conditions attached to federal ments by federal regulations and grant condi- grants and intrusive exercise of the commerce tions, the following reform proposals, addressed power; to the institutions and actors in the policy process, are advanced for Commission consideration and counsel:

For the Congress Problem 5: Neglect of State and Local . Require an assessment of initial, as well as Interests in the Political Process projected, ongoing costs to state and local governments of legislation affecting such ju- Paralleling the shift in governmental authority risdictions when reported by House and Sen- toward Washington over the past 20 years has ate committees: been a shift in political power. The traditional, . Require regular reports by Congressional staff strongly decentralized political system has be- agencies on current costs of ongoing grants come a heavily pluralistic, more national one, and regulations; with power organized more on a vertical and . functional, rather than on a territorial basis. The result is that state and ~local governments play a

57 far less authoritative role in national policy de- lobbying units as well. But for several reasons, cisions than formerly. Although their capacity to they have not been effective in interjecting the say “yes” to federal dollars may have increased, full range of state and local concerns into the fed- their capacity to say “no” to federal intrusions has eral legislative, regulatory, and administrative sharply declined. And this, despite or perhaps processes. First, they lack the firm electoral power because of their expanded representational ef- base which the party system formerly provided. forts. Second, the Washington representatives of state Until comparatively recently, full consideration and local governments often seem more con- of the interests of state and local governments and cerned with obtaining additional funds than with their officials within the councils of the federal protecting the autonomy of the jurisdictions they government was assured by the territorial orga- represent. While deploring federal mismanage- nization of campaign politics. All candidates for ment and the diminution of state-local autonomy, national ofice depended for their election on they eagerly support the creation and expansion state or local constituencies, and a strongly de- of federal aid programs. Finally, the associations centralized party system. Consequently, for many themselves have not devised any unified view of purposes, U.S. Representatives could be and were the proper operation of American federalism and regarded as local rather than national officials, the role of the national, state, and local govern- and U.S. Senators, as spokesmen for their states. ments within it. Agreement on priorities-aside Presidential nominees were selected in national from the renewal of General Revenue Sharing- party conventions in which state and local offi- has been difficult to attain. cials were well represented, and of course Presi- Proposals to strengthen the political process dential campaigns have always been conducted face in two directions simultaneously. One ap- on a state-by-state basis because of the nature of proach seeks to bolster the role of the political the electoral college system. parties and the position of state and local governments within them. For example, a reduction in No longer does the party system serve as an the number and duration of Presidential primaries informal bulwark of federalism, however. Over might refocus attention on the national convan- the past 20 years, the political parties have be- tions, and changes in convention rules could income weaker functionally and more centralized crease the role of state and local party officials organizationally. Candidates for national office and elected officeholders. The maintenance of the have coma to rely upon personal followings, the electoral college is an essential component of this media, and campaign contributors in their drive strategy, since direct popular election of the Pres- for election. The old coalitions of state and local ident would undercut a major remaining element officials and power brokers are not necessary and, of political federalism. Yet, all such proposals indeed, barely exist. have but an indirect connection to the condition Formal processes of intergovernmental consul- of federalism and seem dubious in light of public tation have been established in the interim. The attitudes about the parties and politicians. Executive Office of the President has offered a Other proposals are intended to increase the contact point for state or local officials for some autonomy and influence of the organizations that 15 years, and intergovernmental liaison units represent state and local governments in Wash- have been created within most federal depart- ington. Critics call for improvements in their pol- ments as well. The ten federal regional councils icy processes, a redoubling of efforts to monitor (FRCs) also have a firm mandate to improve in- federal regulations and program implementation, tergovernmental communication. Unfortunately, and less dependence on federal grants and con- none of these mechanisms is linked directly to the tracts to support their own research and training national policy process, and their record over the activities. One innovative idea, aimed directly at years has been mixed at best. the growing use of federal aid as an instrument of During the past 20 years, all of the major asso- federal regulation, calls for the creation of a per- ciations of state and local governments have era- manent state-local legal defense committee, fol- ated or strengthened their Washington offices. lowing the tactic employed so successfully by More than half of the states, and several hundred civil rights and environmental groups, and by other jurisdictions, have established their own state and local governments for a few specific le-

58 gal suits. Since the mid-197Os, many individual For the State and Local Govemmmts state and local governments have instituted suits and against federal policies that encroach on their Their National Associations sphere of authority. Yet the legal battle has been . Creation of a state-local legal defense unit to pursued primarily on an ad hoc basis, and some monitor cases that have serious intergovern- cases have not been pushed for lack of financial mental implications and to initiate suits in support or necessary expertise. instances where the commerce or conditional Whether or not any of these measures would be spending powers are exercised in a way that effective is open to doubt, however. None would compromises the integrity of state-local pol- be easily implemented. More importantly, the icymaking: heavy fiscal dependency of state and local governments on external funds makes it less likely l Aggressive efforts to monitor and report on that they will reassert themselves. This is espe- the impact of federal regulations and pro- cially true in a period of fiscal constraint and pop- grams: ular demands for state and local tax reductions. . A better sorting out of the basic program In summary, the following reform proposals are priorities of state and local governments and geared to assuring fuller consideration of fimda- a better reflection of these in their represen- mental state and local interests within the na- tational efforts; tional political system. Commission considera- . Reduced reliance on federal funding sources tion of and counsel on them is crucial to their to support association activities; proper presentation in the final report. .

For the Executive Branch

l Improved opportunities for consultation with Problem 6: state and local governments; The Excessive Power of Special Interest Groups . Strengthening the federal regional council 1 system by expanding its inputs into the na- “Atomization, ” “overload,” and “alienation”- tional budgetary and regulatory processes, by these are the terms that describe coritemporary depoliticizing its leadership, and by placing American politics. Over the past 20 years, power it on a statutory basis; has been fragmented among a host of contending l Maintenance of the electoral college system interests; policymakers have come to be belea- for Presidential elections, but scrapping the guered by more numerous and strident demands one-state-one-vote formula in the House for for federal action on every front; and the public- breaking any impasse in the electoral college; at-large has grown increasingly dissatisfied with . the outcome and disenchanted with the process that produces it. Inside the halls of government, as well as outside them, fears of “special interest” domination have replaced the earlier view that For the Political Parties most lobbying was simply a healthy expression of the nation’s social pluralism. . A reduction in the number and duration of Evidence of this dramatic change may be found Presidential primaries and a strengthening of in the manner in which the public’s business is party conventions: conducted in the Capitol, the White House, and . Increased opportunities for participation by on the campaign trail. The two major political state and local officials in party conventions; parties-always weak by European standards- l Fuller debate and consideration of national- have become pale shadows, commanding little state-local priorities at party conventions; loyalty anywhere, unable to organize either the government or the electorate. The stature of the . old triumvirate of organized interests-business, labor, and agriculture-representing major eco-

59 nomic classes also has diminished. But new sin- Another strategy calls for the refurbishing of the gle and multiple-interest lobbies, proclaiming political parties as a counterforce to special inter- themselves to speak for almost every occupa- ests. Only political parties, it is argued, can pro- tional, social, and demographic sector of the na- vide meaningful policy alternatives for electoral tion’s population, have blossomed everywhere. choice and assure their execution through the Most now have direct ties to specific federal aid machinery of government. To this end, an exten- or regulatory programs. sive range of measures to strengthen the consid- The case study findings suggest that the role of eration of policy issues within and between the interest groups in the creation of new federal pro- parties and to bolster their role in the conduct of grams is frequently overstated. While groups political campaigns have been called for. Alter- sometimes do play leading roles in policy initia- nately, the opportunities for political participation, more often they are simply secondary and tion by individual citizens might be increased di- supportive actors, with entrepreneurs in Congress rectly. A range of techniques for greater citizen or elsewhere in government occupying center involvement in the legislative, budgetary, regu- stage. Yet, the power of interest groups during the latory, and electoral processes have been ad- “second generation” of policymaking, when pro- vanced. Characteristic of these are calls for a na- grams are renewed and expanded, is incontesta- tional initiative and referendum process to cir- ble. Regardless of their origin, programs quickly cumvent or overturn the actions of national become encrusted in “iron triangles” of benefi- legislators. ciary groups and their allies in the bureaucracy These latter two sets of proposals frequently and Congress (and their counterparts at the state conflict. Indeed, the “responsible party” advo- and local level). These tripartite alliances usually cates often regard the proponents of further “di- are able to mobilize effective opposition to pro- rect democracy” as their most serious opponents. posals, jeopardizing the programs that aid them. Past efforts to strengthen individual participation What interest groups do, then, is “rigidify” the in party affairs, they believe, have contributed to system, making it unresponsive to political lead- the demise of party government. On the other ership and the prevailing political climate, and hand, the advocates of “citizen power” fear a re- resistant to policy reforms. turn of the smoke-filled rooms and backroom It is by no means clear that the tight grip of deals that too often characterized party prbcesses organized interests can be effectively reduced. in the past. Furthermore, all of these sorts of pro- The process of political fragmentation is now well posals may be expected to be opposed by those advanced, and may well be irreversible. “More of groups which think their status would be threat- the same” does seem the most likely scenario ened. The record of similar populist reforms of throughout the coming decade. the past inspires little confidence. On the other hand, a variety of institutional and For this reason, then, it may be that the prin- procedural constraints on group activities has cipal responsibility rests with the public and an been proposed. Aimed most directly at interest aroused electorate. So long as apathy--or a “what’s group lobbying are calls for tougher registration in it for me” mentality-prevails, curbing the and disclosure standards and measures limiting power of special interests may be impossible. campaign contributions from group sources. The After all, one person’s “special interest” is an- latter objective might be most readily advanced other’s “favorite cause.” A shift of attitudes and by extending the system of public campaign fi- priorities by the people themselves may be the nancing for Presidential candidates to members basic prerequisite to a restructuring of political of the Congress. pOWIT. Another very traditional approach urges the In summary, the following reform proposals consolidation of decisionmaking authority into directed toward reducing the excessive power of larger ~aggregates: the reorganization of Congres- special interest groups in federal policymaking sional committees and subcommittees and of ex- have been advanced for consideration: ecutive departments. Reorganization is intended For the Congress to shift effective authority into broader arenas- arenas which presumably are more responsive to . A reorganization of Congressional commit- the general public interest. tees and subcommittees;

60 . Public campaign financing for Congressional mental relations asserts that it is an overbureau- candidates; cratized, grossly mismanaged “system” tangled . Tougher lobbying registration and disclosure together by a maze of red tape. No longer am fed- laws; eral programs thought to be well-oiled tools of efficiency or effective mechanisms for a congenial . partnership among levels of government. On the contrary, in field after field, implementation and For the Executive Branch evaluation studies reveal serious shortcomings in program execution. Increasingly, programs fail to l A further reorganization of executive depart- meet their objectives; waste and fraud have be- ments by major functions; come commonplace; regulatory detail has esca- l Increased periods of service for political ex- lated sharply: and relationships between grant re- ecutives; cipients and Washington have deteriorated, frequently taking on an adversarial character. l Traditional solutions to these problems have concentrated on improvements within the exec- For the Political Parties utive branch. Proposals for departmental reorganization, civil service reform, and tighter manage- l A reduction in the number and duration of ment are the stock-in-trade of administrative party primaries; reformers. Many of these have been advanced in . More frequent policy conventions and con- recent years, some adopted. ferences; Although the bureaucracy bears the brunt of l A reinvigoration of party caucuses in Con- criticism for federal mismanagement, the purely gress; bureaucratic “solutions” mentioned above have . Enhanced opportunities for participation by done little to mitigate the problem, perhaps be- individual party members and small contrib- cause the origins of the problem lie elsewhere. utors; Hence, many of the case studies reveal that pro- . grams were poorly designed to accomplish their purposes and, indeed, many can hardly be paid to have been “designed” at all. Administrative fea- For the General Public tures were often inserted almost incidently, with . A national initiative and referendum process; little regard for ease of implementation either in Washington or at the recipient level. l Opportunities to indicate their budgetary In the realm of regulatory law particularly, the preferences on income tax returns; Congressional tendency has long been to write . Direct national election of the President by and pass broad, symbolic legislation devoid of popular vote; much substantive content. It is, after all, difficult l Financial support to citizen advocates ap- to vote against good intentions. Yet, in recent pearing in regulatory proceedings; years regulatory law, like all legislation, has pro- . Standardized and simplified voting registm- liferated at a greatly accelerated pace and with tion procedures; that proliferation the problems of such legislation are magnified tremendously. Thus, it falls in- . A reordering of public priorities in support creasingly to administrative agencies to define the of primary national needs; intent and scope of more and more regulatory law. . Such broad delegation of Congressional authority has been called by political scientist Theodore J. Lowi, “policy without law.” It is the institu- Problem 7: tional, often systemic, dispersion of legal respon- Bureaucracy, Red Tape, and sibility and accountability-dispersion resulting, The Dispersion of Accountability more often that not, in irresponsible policy and unaccountable administration. Indeed, in a num- A common description of current intergovern- ber of cases studied, the substantive results of

61 nonsubstantive regulatory language “horrified” sunset legislation. To aid Congress in its massive even the authors of the legislation. oversight responsibilities, they contend, its own Nor is the problem merely one of Congressional staff agencies, as well as those of the executive “foresight” or preimplementation specificity. If branch, should assess costs, benefits, and other the prelegislative policy process has become frag- impacts of regulations under their jurisdictions mented, so too has the post-legislative oversight and should report regularly to Congress on im- process. In Congress, oversight responsibility has plementation difficulties and proposals for legis- become diffused with the proliferation of subcom- lative clarification of regulatory directives. Critics mittees, and agency implementors, for their part, of these approaches, however, note that the obsta- have failed to formally identify implementation cles are numerous. Oversight has never been pop- difficulties. ular with members of Congress, and resources Whether or not any concrete remedies can be aimed at this objective often are turned to other devised to correct these problems of regulatory ends. Moreover, they emphasize, major program- responsibility and accountability is uncertain. matic overhauls are politically difficult once the Needless to say, Congress cannot implement its “players and rules of the game” have been estab- own laws, nor foresee every potential conse- lished. quence of its legislation, nor specify every single Finally, some argue that state and local govern- administrative detail. It is properly in the nature ments bear important responsibilities for improv- of legislative bodies to delegate. Yet, clearly, that ing the management of intergovernmental pro- delegation must be surrounded by parameters, by grams. First, despite significant improvements some explicit and understandable set of standards over the past two decades, some are still poorly that Congress itself sets forth in the legislation. organized and staffed. Second, only state and lo- Moreover, and in the absence of such Congres- cal governments are aware of many implementa- sional self-discipline, there exists a need for more tion problems, and only they may be in a position thorough court consideration of the possible in- to identify potential solutions. Finally, too many validity of excessively broad delegations of leg- state and local governments have regarded federal islative power. dollars as “funny money,” to be handled with less A number of institutional and procedural rem- care than locally raised revenues. edies have been proposed. One approach urged Hence, to ensure more effective managefoent of by advocates of “sunrise” legislation would re- intergovernmental grant and regulatory pro- quire the fuller advance specification of the pre- grams, to help assure the administrative fulfill- cise objectives of every program, which after all ment of Congressional intent, and to guard against provide the standards by which their performance the overly broad dispersion of responsibility and is to be evaluated, and identification of possible accountability, the following reform proposals are alternative implementation mechanisms. An al- advanced for Commission consideration and de- ternative strategy would assure consistency with bate: legislative intent by strengthening and formaliz- For the Congress ing Congressional review of agency program regulations, perhaps through the “legislative veto” l Enactment of “sunrise” legislation: process. Opponents of these proposals, on the . Setting of clear standards of implementation other hand, regard them as inappropriate and un- in each new piece of aid and regulatory leg necessary legislative “meddling” in administra- islation; tive affairs, even as Constitutional violations of . Enactment of “sunset” legislation;” the separation of powers-“violations” whose ef- . Reorganization of functionally related sub- ficacy has not yet been demonstrated. committees under appropriate functional An alternative approach concentrates attention committees; on after-the-fact program improvements. In Con- gress, some feel oversight of existing programs . Oversight by full committee of programs and should be strengthened through organizational regulations stemming from separate pieces of reforms which would assure complete legislative legislation; oversight of a particular policy by a single com- . Congressional veto of administrative regula- mittee and through procedural reforms such as tions based upon the intent of Congress;

62 . Greater coordination of oversight among the sential unaccountability of current intergovern- standing committees; mental relations suggests that sanguine standpat- . ism is an untenable position to assume. Yet, what should and can be reformed? The probe of seven basic problems generated by For the Executive Branch the sad state of contemporary intergovernmental

l Periodic Presidential or agency reporting to sffairs highlighted specific proposals for possible Congress on the costs, benefits, and other im- remedial action in each of the saven. It also in- pacts of regulations, as well as on the diffi- dicated that a range of viewpoints exists regerd- culties in implementing regulations and pro- ing what should be the focus of reform efforts; posalsforlegislativeclsrificationof directives: what specific implementing actions are desirable and possible; and what degree of optimism is re- . alistic with reference to each of these proposals. For all of these reasons, the following must be For the Courts considered, at this stage, to be merely tentative recommendation strategies and proposals. The l A greater willingness to declare invalid and unconstitutional Congressional delegations Commission’s consideration of the previous seven of power to administrative agencies which problem areas no doubt will modify some, if not are not accompanied by clear standards for all, of them and might even produce a recasting implementation; of the scenarios. On the basis of a careful reading of the recent . intergovernmental record, however, and a con- fronting of the critical questions raised by it, three For the State and Local Governments basic reformist strategies do seem to emerge: an and incrementalist approach, a more surgical school Their National Associations of thought that calls for fairly drastic change in five basic areas, and a full-scale reform of our . Assessing costs and benefits and potential basic charter view. I management problems in each of the federal At the two extremes, then, stand the “system is aid programs wherein they are actual or po- already responding” and the “system requires tential recipients. drastic Constitutional change” schools of thought. l Establishing joint state-local legal defense The former is based on a reading of recent events committees to monitor and institute legal ac- that suggests the hyper-responsiveness of the sys- tions involving “intrusive” exercise of the tem in the 1970s to the immediate concerns of a commerce power and coercive use of the con- plethora of pressure groups also applies to the ditional spending power; basic concerns of the majority of the electorate . Achieving full fiscal support of the national that now seems opposed to such public sector associations: growth. Advocates note the emergence of some . elements of fiscal and political constraint. The early 1970s witnessed the disappearance of the “fiscal dividend” that the prosperity of the 1960s had generated and which fueled the expansion of TENTATIVE RECOMMENDATIONS the public sector. Growing pressures for budget balancing as a means of curbing inflation have The Commission’s fundamental finding that the arisen and inflation is now deemed the number system is overloaded and increasingly dysfunc- one public finance agenda item. In addition, de- tional suggests the need for changes, even drastic fense outlays are slated to rise and the Social Se- changes. The concomitant finding that the ever curity system appears to be in need of alternative widening scope of the federal role in the federal sources of funding, both probably at some cost to system has been the prime creator of increasing domestic programs. The Carter budgets for FY intrusion, greater unmanageability, mounting 1981 and 1982, Congress’ handling of its own re- program ineffectiveness, costliness, and the es- formed budget procedures this past year, and talk

63 of a revamped Congressional power structure this they contend, the existing system would already year are cited in evidence of a new behavioral have responded without having to tinker with our pattern. These incrementalists also warn that no basic charter. drastic reform proposals are really necessary and Between these two extreme schools stands the that continuing political pressures will correct the “basic reform short of Constitutional change” imbalances, inefficiencies, and ineffectiveness of school of thought. Five approaches, however, are the present system-thus rendering it more ac- encompassed within this school (which raises a countable and simpler to the electorate. number of questions about which approaches are Opponents counter with the argument that fis- compatible and reinforcing). Each approach rests cal retrenchment in domestic program areas need on a rejection of the extremes and on the accep- not involve intergovernmental program and reg- tance of a particular view of how the system got &tory reform, but merely a cutback in aid dol- to where it is. Some of the specific proposals ad- lars. On the basis of current and projected expe- vanced ace clearly rooted in the Commission’s re- rience, it only adds up to as many (if not more) search; others rest on the work of others; and still aid programs, and more conditions attached others have no foundation in research or in actual thereto, but less money in constant dollar terms. experience because they never have been tried or From the state and local perspective, as well as tested and rest on faith alone. that of the system as a whole, this would be the One of these middle perspectives on how to car- worst of all possible worlds except for sudden, rect the system’s present deficiencies concen- massive cutbacks. To accept the “system is al- trates on surgical ways of decongesting today’s ready responsive” thesis, they claim, is to ignore overloaded intergovernmental network. Advo- the dynamics of interest group lobbying and Con- cates of this approach reject incremental methods gress’ recurring tendency when confronted with of reform, contending that these miss the mark. fiscal constraints to adopt “the parity of pain prin- Improved Congressional oversight and proce- ciple.” This leads to no real assessment of inter- dures, better OMB circulars, effective departmen- governmental programs and regulations, to avoid- tal inspector generals, and more pointed General ing the choice between those grants that make Accounting Office (GAO) audit reports in no way sense and those that are nonsense, of ignoring the can cope with a system whose dynamics lead to differences between those that are fat and these more government programs, more conditions and that are lean, of separating those that are genu- mandates, more interest groups,‘3 more political inely intergovernmental from those that We pat- posturing on the part of all the players-federal ently parochial and political. as well as state and local- but at the same time At the other extreme, the Constitutional reform- to fewer dollars. ers contend that the political pressures are too What is needed, this group urges, is a sorting great, that the system’s responsiveness continues out of roles and of sane of the functions that un- to be excessive, and that only Constitutional curbs wisely have become intergovernmentalized. This can foster an environment in which national de- is no return to the old-style dual federalism, they cisionmakers can say, “No!” The curbs range from caution. Instead, this strategy seeks to place the less dramatic, like a Presidential item veto; to squarely on the federal government’s shoulders the more drastic, like Constitutional limitations the full fiscal and administrative responsibility on taxing or spending and the changing of the for key national functions (like public welfare and terms of House members (and sometimes of the health insurance) and to recognize the ineffec- President); to the most drastic, which involve the tiveness, the inequities, the inefficiencies, and the instituting of a quasi-parliamentary system, and unaccountability that the present patchwork ap- the redrawing of state boundaries and clarifica- proach to these two multibillion dollar programs tion of state powers. has produced. This is no call for retreat for the Opponents argue that none of these is feasible federal government then, but rather is a facing, or even desirable, that they depart drastically for the first time really, of its full responsibilities from the American tradition, and that reforms- in these areas of clear national concern and obli- short of the Constitutional varietydan do the gation. The myths of managerial convenience, of job. Before any one of these Constitutional reform bargain basement administration, of intergoveru- approaches could muster significant strength, mental equity must be identified for what they

64 are, so this group maintains, as myths, just myths. whatever passesmuster in the chambers and car- At the same time and as a trade-off, these surg- riders of Capitol Hill and is signed by a F’resident ical reformers also call for a devolution of a range is still a good test of what is in the national in- of activities the federal government now is aiding terest,they believe, and arbitrary, across-the-board and pretending to “run.” But the details at this efforts to reduce the pressureson the national leg- point become somewhat blurred. Some argue for islative and administrative processes, especially grant consolidation (and, in effect, the elimina- as they are presently conditioned, will come to tion of certain narrow categoricals). Others call naught. for a trade-off: consolidations for a cut in their Another of these “middle” scenariosfocuses on funding. Still others focus on the 440 grants that the collapse of internal governmental constraints. account for 10% of the federal aid total and urge Hence, it calls, among other things, for “sunset their elimination through mergers 01 devolution legislation,” income tax index&ion, grant consol- to state and local governments. idation, fiscal notes, a regulatory budget, statutory Using the percentage of state-local outlays that taxing and spending limits, Congressionalveto of specific federal aids provide is yet another ap- administrative regulations, and committee rear- proach, advocated by some. If it constitutes less ganization on the Hill, as ways of building greater than 10% say, of the total of state and local ex- discipline into the operations of the political penditures in the affected program area, this branches of the national government. In essence, group would say “scrap it.” The subnational gov- all of these are geared in one way or another to ernments already are the dominant providers and making it easier, or at least possible, for national all the federal aid provides is marginal fiscal help decisionmakers to say “no.” with controls and major administrative head- Opponents of this approach contend that pm- aches.” cedural changeswithout basic attitudinal and po- Advocates also point out that several functions litical ones will accomplish nothing but more end by their very nature would remain intergovem- runs and charades, more complex and unfath- mental-transportation, the environment, energy, omable national governmental operations, and natural resources, and community development, more intergovernmental uncertainties. to mention only the more obvious. The goal of A third reform approach centers on the role of this partial sorting-out strategy, they insist, is to the federal judiciary and emphasizes that its au- decongest the system, to reduce the focus on thoritative power should be utilized to render the Washington for a range of secondary public pol- system more accountable, more balanced, and icies and programs, to enhance the discretion of more effective. The present system, they note, is subnational governments, and, above all, to inject in large part a byproduct of Supreme Court deci- greater accountability into the system. sions relating to the commerce and the condi- Critics of this approach contend that is totally tional spending powers. More balanced and re- infeasible, untraditional, and undesirable. Once alistic future decisions in these twin Constitu- an issue gets to Washington or an aid program tional areascould establish a new climate for, and gets started there, it is nigh impossible to push it some enforceablemeans of curbing the seemingly back into the state and local realm, they warn. uncontrollable assertion of national authority. Only the elimination in the early 1940s of the Critics of this strategy claim that it would lead public works and relief programs of the Depres- to even greater judicial intrusion into essentially sion years can be cited as the major example of political matters than prevails now and that it closing down federal aid programs. The effort of rests on the hope that the Supreme Court can be the Eisenhower Administration with the Joint Ac- a neutral arbiter of intergovernmental conflicts tion Committee to devolve certain program re- rather than a national body which, with only a sponsibilities along with funding sources was few historical lapses, has favored national power a waste of time, they remind us. Moreover, the and growth over its nearly ZOO-yearhistory. number of programs and especially the large A second mid-range scenario assumes that the number of puny aid programs is a small price to problems are basically political and that if they pay for political accommodation, for pressure are corrected, the other difficulties will be re- group pacification, for achieving a rough appmx- solved fairly easily. One group here focuses on imation of some consensus. The old theory that party reform and advocatesrestiictions on the po-

65 litical action committees of pressure groups, closed Periodic pushes for more populism and more par- primaries, a reduction in the number of Presiden- ticipatory democracy, they point out, from Jack- tial primaries, enhancing the role of officeholders son to General Weaver and from Theodore Roo- in all conventions, mid-term conventions, public sevelt and Hiram Johnson to John Gardner, have financing of Congressional candidates but with done little but to enthrone a new breed of special funds donated to the parties, and retention of the interest group politics, not the politics of the peo- electoral college with minor changes. ple. If any contemporary case study is needed to A very different group within this political pm- verify this generalization here, California inevi- cess group centers its attention on the sovereign tably is dragged out as exhibit number one. citizen, not the major parties. For it, a few of the A final middle-range reform strategy concen- above proposals are appropriate, but the direct trates on state and local governments and their election of the President, public financing of representatives and national associations in Congressional and other campaigns, a national in- Washington. Its underlying thrust is to challenge itiative and referendum process, easier and sim- the subnational governments to find ways and pler voter registration, the easy creation of new means of saying “no” (where appropriate) to fed- political parties, and public financing of citizen eral programs, dollars, and conditions. Deconges- witnesses before regulatory agencies are central tion should be as much, if not more, a part of the points in the reform agenda. agenda of state and local governments as it should Opponents of the strengthened parties alterna- be uppermost with the national government. A tive argue that procedural props are no substitute somewhat changed role for the national associa- for the performance of needed functions and that tions is envisaged--one that is conscious of, and the national parties perform no functions pres- vigilant about, the long-term consequences of an ently that other mechanisms and groups could not ever-accelerating federal role, of the need for trade- provide. To call for a more responsible, account- offs and bargaining, of the costs as well as the ben- able two-party system at this point in history, they efits of federal subventions. Moreover, a greater claim, is to ignore the reality of contemporary capacity and willingness to resort to the courts, American politics and the attitudes of the elec- when unjustified or excessively burdensome con- torate toward the parties and the system they pre- ditions are attached to grants and when Congress tend to constitute. exercises its commerce power in a m&dating fashion, is sought. Critics of any further focusing on the voter *s sovereign policymaker in the system point to re- Critics of this approach claim that the real prob- cent efforts to enhance his or her direct role in the lem is with the array of interest group-co- system and their disappointing results. To project nomic, program, social, and single issue-that Jefferson’s image of the commonsensical, rational have no hesitancy in undercutting and undermin- yeoman farmer into today’s hyper-complex gov- ing state and local governments and their role in ernmental system without at least Madison’s sup- the system if doing so will advance their own porting concept of factions (interest groups) is, to causes. The excessive responsiveness of federal this group, the essence of a romantic, hence un- policymakers to such pressures, they maintain, real democracy. Recent experience with citizen has pushed the states and the localities to mount participation requirements in federal programs greater representational efforts over the past de- (over 150 of them), the decline in voter partici- cade and a half. Moreover, some within this group pation (even among the well-educated), opinion argue forcibly that the rivalries between and polls on voter awareness, and basic sociological among the subnational governments and their na- studies on the collapse of intermediate and for- tional associations and the differing needs and fis- merly buttressing social institutions (which per- cal positions of some states and many localities mitted the myth of the discerning, dependable, assure a continuing focus on Washington-its and independent citizen voter to arise in the first programs, moneys, and politicians. By now, they place) combine, in the minds of these critics, to argue, it is plausible to believe that state and es- suggest that placing any more burdens and reli- p&ially local reliance on federal moneys and pol- ance on the individual voter is asking the impos- icy dictation has become so habitual that no turn- sible, if not beating a very dead democratic horse. about is feasible.

66 Alternative Strat y A: sible for the system overload, on approaches to an Incrementally Improve Yt e Present appropriate and feasible reform strategy, and on Intergovernmental System whether more than one strategy should be pursued simultaneously during the 1980s. The fol- The Commission concludes that both the na- lowing scenarios, which may be treated as com- tional interest and the need to enhance the capac- patible, incompatible, or perhaps mutually ity of state and local governments to meet their dependent strategies, attempt to reflect these dif- responsibilities require the national government’s ferences in diagnosis, in focal points of reform, involvement in a broad range of domestic matters. and in their political feasibility. The Commission concludes, further, that the present intergovernmental system represents a real- Recommendation 1: istic and workable response to the nation’s needs, Some Sorting Out of despite serious acknowledged difficulties in in- The Grant S stem terlevel coordination, administration, and ac- By Trade- 8ffS countability. The present system does incorporate processes for addressing these difficulties, which The Commission concludes that the federal over time and with persistent effort cm produce government has overused the grant-in-aid mech- a more manageable and accountable intergovern- anism, sometimes giving state and local governmental system. Hence, ments roles in certain programs which would be The Commission recommends that the federal handled best by the federal government itself, mle in the American intergovernmental system while at other times establishing a federal role in he maintained essentially in its present fo- programs better left to state and local govern- relying upon General Revenue Sharing, block ments themselves. In these cases, the grant mech- grants, categorical grants, and other forms of fed- anism unnecessarily complicates the administra- eral aid, plus federal regulatory activities, and tion of the programs, confuses political and other means to address national, state, and local program accountability, reduces effectiveness, in- interests in relation to one another. The Commie- terferes with economic efficiency, and rarely sion recommends, further, that present efforts at achieves equity goals. Hence, Congressional oversight, executive and Congres- The Commission recommends that the Rderal sional budgeting, program evaluation and sim- government assume full f+mncial apd adminis- plification, program consolidation, agency reor- trative responsibility for programs which are of ganization, federal consultation with national paramoImt national importance, are national in and subnational interests in developing new pm- scope, and which require uniform levels of ben- posds, impact analysis of such pmposals (ad- efits and [/or1 consistent nationwide administrs- dressing fiscal, intergovemmerltai, envtmllmerl- tion by federal employees, including public as- tal, urban, and mml policy considerations), and sistance, health benefit payments, and other regulatory reform be pursued vigomusly in order appropriate social insurance programs. At the to accelerate improvement in the intergovem- same time, the number of remaintng federal as- mental system, thus making it mom effective, ef- sistance pmgrams should be reduced very sub- ficient, and responsive to the needs of the nation stantially, with the primary candidates for ter- and of all levels of government. mination to include: (a) the approximately MO small federal categorical grant pmgrams which Alternative Strategy B: account for only ten percent of all grant funds Systemic Reforms, (excluding programs supporting research and Short of Total Overhaul demonstrationl, (b) programs in functional fields in which the federal share amounts to less than Some sense the urgent need for some sharp and [five] [ten) percent of the combined national- substantial, not just slow and incremental, shifts state-local outlays; (c) pmgraiu which do not in our political system and the federal role in the embody essential and clearly stated national ob- intergovernmental system-short of basic Consti- jectives, or which are too small to significantly tutional change. But this group divides over address the need to which they relate; (d) pm- which of the critical conditions is most respon- grams, especially small ($100 million or lees)

67 ones, which have high administrative costs rel- the President to make moditications or revisions ative to the federal financial contribution; (e) proof plans submitted to Congress any time within grams which obtain-or could obtain-most of 30 days after such submission.‘6 their funding fmm state and/or local govem- merits, or fees for service, or which could be Furthermore, in order that tbe Congress may shifted to the private sect~r.‘~ The Commission more adequately perform its vital oversight func- urges that this strategy of full national mspon- tion: sibility for certain pregrems combined with devolution of responsibilities for others to the state The Commission recommends that Congress and local levels, or to the private sector, be ac- enact “sunset” legislation providing, at regularly complished by Congress and the President scheduled intervals, for the termination, thor- through one or mere of the following approaches: ough reassessment prior to tbe slated expiration unilateral federal legislative enactments; dates, and reauthorization, where warranted, of enactment of legislation after full consulta- all grant-in-aid programs by functional area. . . .I7 tion with tbe effected subnational governments and with a view toward arriving at a Finally, in order that personal income tax rates meaningful bargaining ever the trade-offs; or should only be increased by overt Congressional action and should not be an automatic conse- enactment of legislation providing for a pro- quence of inflation, and so as to make the national cess in which state and local officials from income tax system more equitable and accounta- each state, es a unit, would be [allowed to) ble to the nation’s taxpayers: [encouraged to] negotiate a trade-off package. The Commission. . . recommends that the Con- gress give early and favorable consideration to index&ion--the annual adjustment of the personal exemptions, the low-income allowance, Recommendation 2: and the maximum limit of the standard deduc- Strengthening the Internal Processes tions, and per capita credits, and the tax rate Of the National Government brackets of the federal individual income tax by tbe rate of increase in the general price level.‘* In the past, the Commission has recommended certain basic improvements in the operations of At the same time, the Commission now con- tbe national government. The following recom- cludes that additional major improvements in tbe mendations, if anything, are more relevant now national legislative and regulatory processes are than when they were initially advanced and the essential to the development of more effective, ra- Commission reaffirms its strong support for them. tional, and publicly accountable national policies Hence, in order to rationalize and simplify an in- and to the restoration of a mme balanced and tergovernmental system which spawns too many functional federalism. Hence, separate and narrowly drawn federal grant programs and is heavily burdened with excessive pa- The Commission recommends that Congress or perwork requirements, regulations, and controls: the executive branch, as appropriate, adopt pm- cedural and organizational reforms which will instill greater discipline in the policy develop- The Commission recommends that Congress ment and renewal pmcesses of tbe Congressional enact legislation authorizing the President to and executive branches, strengthen the internal submit plans for consolidating categorical grant organization of Congress, end provide for more programs to Congress, that Congress be required adequate assessments of the costs. imposed by to approve or disapprove such plans within 90 federal legislation OIL state and local govem- days of submission, and that if approved, such merits end the private sector. plans go into effect upon approval by the Presi- [To instill greater discipline in tbe policy de- dent of the Joint Resolution. The Commission fur- velopment and renewal processes of the Congres- ther recommends that the legislation authorize sional and executive branches of the national

66 government, tbe Commission urges that consid- committee assignments per member of tbe eration be given to tbe following spoctfic propos- Senate and House: and als: c. Reexamine and provide for tbe greater a. When drafting new legislation or reau- coordination of the general oversight role tborizing existing legislation tbe effect of of four sets of standing committees (op- which is to expand the federal role in the erations, budgetary, appropriations, and federal system, tbe Congress and its ap- revenue raising) in the Senate and House.1 propriate committees and subcommittees (To pmvtde for mom adequate assessments of should be required to give fuller consid- costs imposed by federal regulations and by other eration to the “nationad purpose” or “lm- legislation on state and local governments and tional objective” to be attained by the leg- the private sector, tbe Commission urges that islation; all alternative mechanisms for consideration be given to the following spectfic achieving the best balance of equity, effi- proposals: ciency, effectiveness, and public accountability in the implementation phase of a. when reporting legislation which will af- policy including, but not limited to, direct fect state and local governments, tbe ap federal servicing, grants-in-aid, taxes or pmpriate committees of the Senate and tax expenditures, loans or loan guaran- House should be required to evaluate the tees, and regulations; and the possibility costs which will accrue to tbe affected ju- of altering or expanding related, pmex- rtsdictions; and isting programs when they may be used b. tbe regulatory arms of the national gov- to achieve tbe same purposes. ernment--the independent regulatory agencies and tbe executive line agencies- 6. With reference to committee and floor should report to Congress, on a regular amendments to pending legislation, tbe basis, regarding the costs, benefits, and Senate and the House of Representatives other impacts of regulations under their should adopt binding rules of “germane- jurisdictions, as well as difficulties in im- neas.” plementing regulations and proposals for c. In order to provide for the continual im- legislative clarification of regulatory di- provement of Congressional operating rel3lves.l procedures, tbe Senate and the House of Representatives should institute perma- Recommendation 3: nent mechanisms of procedural review. The Supreme Court As a Neutral Arbiter d. Extend, by Constitutional amendment, tbe President’s veto authority to specific items The Commission finds that the federal judici- within legislation. ary, though to a somewhat lesser extent than the political branches of the national government, has e. In order to provide for greater executive exerted both directly and indirectly a profound branch “foresight,” executive branch pro- influence on contemporary intergovernmental re- cedures for reviewing legislation pro- lations and has contributed to their growing imposed by the Congress and the agencies balance and dysfunctionality by its interpretation should be strengthened.1 of the commerce and conditional spending pow- (To curb tbe further fragmentation of the Con- ers. Hence, gress and to strengthen generally its internal organization, the Commission urges that consider- The Commission recommends that tbe Su- ation be given to tbe following specific pmposals: preme Court assume tbe role of arbiter of the fod- era1 system. In pertinent cases and controversies a. Reduce tbe number and autonomy of coming before it, which involve Congress’ power Congressional subcommittees in related to spend for tbe general welfare, the Commission functional fields; urges balanced Court consideration of the “rea- b. Reduce the number of committee and sub- sonably related” doctrtne and of the degree to

69 which inducement amounts to coercion when for tbe votinn on budnet ceilings umvided for in judging the required terms and conditions of federal grants to be met by their recipients. In those in the number and duration of %~idential pri- cases involving the commerce power as a basis maries either by state actions or by creation of a for national mandates on state and local govern- national primary day, a series of multistate re- ments, the Commission urges careful Court gional primaries, or a single national primary for weighing of the claims of national necessity and both parties, while requiring that all primaries of the counterarguments that state sovereign in- be closed; (e) enhanced status and participation terests have been impaired, with a view toward of individual party contributors in party affairs protecting tbe integrity and discretion of tbe by providing, in exchange for a modest dues pay- states’ (and localities’) political processes while ment, the right to vote on the selection of a pm- not unduly restricting the ability of tbe national tion of each state’s delegates to mid-term confer- political pmcess to produce national policies and ences and a proportion of the members of the programs that are genuinely national. national committees, as well as specifically designed informational services; (f) a system of pub- Recommendation 4(a): lic financing for Congressional candidates which Strengthening the Party System channels funds through the two major political parties while sharply limiting contributions fmm The Commission finds that the current philo- interest group sources; (g) the elimination of the sophical and organizational disarray of both of the electors as such from the electoral college, and major political parties minimizes their contribution to the appropriate consideration of the size the replacement by Constitutional amendment of tbe present one-state-one-vote formula for break- of the public sector and national-state-local re- ing electoral college impasses in the House of sponsibilities within it, has weakened the ac- Representatives with a runoff national election countability of officeholders at all levels to citi- between the two major candidates or with a ma- zens, and has undercut the traditional position of jority vote of Congress in joint session on a one- states and localities as strong political partners member-one-vote basis.] within the American federal system. Hence, The Commission recommends that the two ma- Recommendation 4(b): ii jor political parties, the Congress, or state legis- Increasing Public Participation in latures, as appropriate, adopt measures which National Policymaking will strengthen the parties as forums for the reg- The Commission finds that the present national ular consideration of major policy issues by pub- representational process generally and the polit- lic officials at all levels of government and citizen ical parties particularly have failed to hold na- party members; protect and enhance the status of tional policymakers closely accountable to the the political parties as essential bonds between electorate, and that they provide insufficient op- the governors and the governed in a healthy rep portunities for citizens, in contrast to organized resantative democracy; and maintain the historic interests, to express their views on major issues role of tbe states in the Presidential selection proof national policy. Hence, the Commission rec- cess tbmunh the electoral college. ommends that the Congress adopt measures that will provide the general public with more direct consideration be given to the following propos- and more meaningful opportunities for partici- als, among others: (a) mid-term party convan- pation in the federal legislative, budgetary, regu- tions in both political parties, with procedures latory, and electoral processes. assuring adequate representation of those in the non-Presidential wing of the incumbent party, as [gpecifxally, the Commission recommends that wall as more frequent party issue conferences at consideration be given to the following pmpos- the state and local levels: (b) the facilitation of als, among others: (a) (an advisory) (by Consti- greater participation by national, state, and local tutional amendment. a bindi& national initia- elected officeholders in party conventions; (c) tbe reinvigoration of party caucuses in Congress as (b) federal financial support to a&ocates instruments for disciplining party members and participating in executive branch and judicial

70 regulatory decision wocesses: (13 direct election their national associations during the next two years in identifying at least [teal I251 federal of the electoral college; (d] a single national pri- grant programs based on surveys of the member- mary to replace state Presidential primaries; (e] ships of their associations that they will recom- standardized and simplified voting registration mend terminating; (41 participating with appro- processes for all national, state, and local elec- priate federal officers in identifying those aid tions; (fJ public financing for Congressional can- programs and conditions that are most appro- didates; and (g) allowing taxpayers to indicate priate for (a) fall federal assumption, or (b) fall their own budgetary priorities among major pro- devolution to state or local governments or the gram areas on their annual income tax returns. private sector; (5) (authorizing) (requiring] their respective chief executive officers to review and Recommendation 5: approve all presentations by their line agency A More Assertive Response on spokesmen before Congressional committees and The Part of States and Localities to federal agencies and requiring their respective The Overloading of the System legislative bodies to give specific approval for governmental contributions to national associa- The Commission believes that the states and lo- tions of line agency officials: and (6) revising tbe calities also have contributed, both by acts of objectives and policies of their respective na- omission and commission, to the incessant “in- tional organizations in Washington to give prior- tergovernmentalizing” of their own processes, ity to protecting and enhancing the status of state programs, personnel, and budgets. Despite their and local gbvemments within our federal system increased representational efforts in Washington, and to “decongesting” tbe federal aid system and and thanks to the growing strength of vertical associated regulations, as detailed in (1) through functional and single issue interest groups, the (5), and providing that their national organiza- Commission finds that the sensitivity of national tions shall accept no federal grants where there policymakers to the role and needs of subnational may be a conflict with these objectives. governments is less now than it was a generation ago, when there were few sustained representa- Alternative Strategy C: p tional undertakings. Hence, Toward a Second Constitutional Convention The Commission recommends that the states The Commission finds that the present pattern and their localities adopt policies and proce- of intergovernmental relations is inefficient, in- dures that will strengthen the autonomy of their effective, inequitable, and essentially unaccount- decisionmaking processes and that will protect and enhance their authoritativeness as govern- able, and this is the inevitable byproduct of the growing inability to apply successfully .the tradi- ments witbin tbe American federal system. tional Constitutional principles of a partial sepa- Specifically, the Commission urges the states and their localities to give serious consideration ration of powers, checks and balances, and a geographic division of authority in a post-industrial, to: (1) assessing tbe short and long-term fiscal interdependent, media-conditioned, mass society. costs and benefits of participating in each of the The Commission believes that the Constitution in federal aid programs under which they are ac- its formal and informal operations does not meet tual or potential recipients and establishing fis- present day needs or reflect contemporary reali- cal guidelines with a view to withdrawing from ties. Hence, those that am cost-benefit negative: (2) establishing jointly on a permanent basis a state-local le- The Commission recommends that tbe Con- gal defense organization, with adequate funding, gress or the reaoisite number of states call for the professional staffing, and appropriate assistance from the states’ attorneys general and local legal to consider amendments to our basic charter officers, to monitor and to institute legal actions that, among other things, would (I) eliminate the opposing “coercive” conditions attached to fed- separate, fixed, and overlapping terms of the eral grants and “intrusive” Congressional exer- Presidency, the Senate, and tbe House of Repre- cise of the commerce power; (3) joining through sentatives; (2) provide for a fusion of political ex-

71 ecutive end legislative authority; (3) redefine the states and their locelities); (5) stipulate a Bill of boundaries of the states to reflect current human Rights that would be binding on both the national settlement patterns, common regional interests, and state governments; and (6) establish a Su- and a rough numerical parity; (4) (incorporate a preme Court, half of whose membership would doctrtne of national reserved powers, while set- be appointed from lists submitted to the President ting forth a list of expressed powers of the states) by the Association of State Supreme Court Joe- (update the list of Congress’ expressed powers, tices and whose power of judicial review of cases while including a “necessary end proper” clause and controversies arising out of interlevel juts- end a listing of tbe basic powers reserved to the dictional contlicts is detailed in full.

FOOTNOTES ‘Adopted by the Commission, October 1967, and reaffirmed in May 1977. ’ This judicial “passivity” in the ~mnmerce and conditional ‘Adopted by the Commission, day 1977. spending areas has had the practical effect of accelerating ‘Rejected by the Commission, December 19%. the activism of the federal political branches, and in the ‘oRecommended by the Commission, August 1976. latter it reflects a sustained effort to ignore the great changes ” Recommended by the Commission. April 196~. in the grant system since the early 1960s. “The Commission previously endorsed “sunset” legislation ‘Some slight backing off from the expansionist tendencies of on Ma” 6.197,. the Warren court, it should be noted. can be detected in ‘* Many of the aid programs of 1960s and the 19708, we have some of the procedural due process cases decided by its found, were not generated by outside interest groups, but S”CCeS*DI. rather by administrative or Congressional entrepreneurs and 3 Most of this has escaped the notice of even the closest the so-called “iron triangle” was established after enact- Chgressional observers. since much of the legislation of the ment, not before. 19708 appears to he merely a renewal of the legislation “Yet, if this approach were adopted, federal aid to education launched in the 1960s. Yet the dramatic shifts, the major and the Law Enforcement Assistance Administration would expansions. the much greater role of narrowly based func- be dropped. tional interests, the lesser role of federal adminisimton, and I5 Adoption and successful pursuit of Recommendation 2 un- the greater tendency to insert constraining conditions in der this Alternative Strategy B also would be expected to these renewals, make the process of the 1970s a very differ- reduce the number of federal grant programs significantly ent, a less difficult. a more cooptive, and to many. a far less through consolidation, sunset, and reduced rates of new constrained one than its predecessor of the past and all ear- program creation. In that case, this recommendation simply lier decades. When totally new grant or other novel propos- would apply to a smaller set of programs. als come up, however, the older “veto group politics” still I6 Advisory Commission on Intergovernmental &elations emerges. (ACIR), Categorical Gmnts: Their Role and Design. A-52, ’ This continued throughout the period, although the majority Washington, DC, U.S. Government Printing Office, 1977, p. now wants the programs at less cost and with less ineffi- 303. ciencies, “Ibid.. p. 305, ’ Medicare and the SSI program are the only basic exceptions ‘* ACIR, Inflotian and Federal and State Income Taxes, A-63, to this generalization. Washington, DC, U.S. Government Printing Office. 1976, p. ‘Adopted by the Commission, April 1969. 9.

72 Appendix 6 Reshaping the National Government’s Role in the Federal System

Formal Statement of William G. Colman, Consultant

F or the record, my name is William G. Colman, residing at 9605 Logan Drive, Potomac, MD. For ten years I had the privilege of serving as the executive director of ACIR-from its activa- tion in early 1960 until my retirement from the federal service in early 1970. Since leaving the Commission I have been a consultant in governmental management, growth policy, and urban problems, working mostly with state and local governments and organizations thereof-inter- spersed with visiting professorships at the uni- versities qf Virginia (Charlottesville) and Mary- land (College Park) and with service as an elected local government official, first as a member for four years of the Montgomery County, MD, Board of Education and more recently as a member of the County Council, filling out an unexpired term of one of the Democratic seats. The opinions and recommendations that follow are reflective of inevitable biases and other influences growing out of these various experiences in national, state, and local government and in academia. in this statement I will try to provide some re- actions to, and counter-recommendations for, the draft chapter before you, particularly with respect to (1) the organization and manageability of the report, including deletion of certain fields of in- quiry that seem marginal to intergovernmental relations: (2) additional treatment of some key intergovernmental issues that are omitted or treated lightly in the report, including private sector interface, skewing of economic and public finance statistics to accommodate political pressures, and

73 intergovernmental regulatory reform; (3) aug- subject as the federal role in our governmental mented criteria for sorting out grants; and (4) need system: one might favor small change on the ju- for Constitutional and statutory change to redress dicial side and drastic change in the administra- growing imbalances in the structure of federalism tion of crosscutting grant requirements. Options and to provide a framework for strengthened fis- for the degree of change are better reflected in cal discipline within the national government. alternative recommendations addressed to partic- Let me emphasize here that my statement con- ular issues (e.g., the Presidential veto: status quo, centrates upon perceived sins of omission and item veto on appropriation bills only, on all leg- commission in the draft in the belief that specific islation). Second, “strategies” invite retreats into criticisms and suggestions would be of most help generalities so broad as to be meaningless to those to the Commission and staff. A great deal of very concerned with translating recommendations into good work obviously has gone into the material draft legislation or other implementing instro- before you; the writing is clear, and for the most merits. part goes to the heart of the federal role in the Finally, there is a serious inconsistency be- federal system. Now for a few friendly brickbats. tween the rhetoric used to describe some of the problems and the sharpness and fundamentality of several of the alternate recommendations; occasionally, fundamental changes are set up as IMPROVING MANAGEABILITY, straw men, couched in such extreme and provoc- ORGANIZATION, AND CONSISTENCY ative language as to invite early dismissal from OF REPORT consideration [e.g., Constitutional change essentially confined to a transparently unacceptable Problem areas No. 5, “Neglect of State and Lo- wide-open Constitutional convention). Several of cal Interests in the Political Process;” No. 6, “Fx- the recommendations to the courts could better cessive Power of Special Interest Groups:” and be stated as Constitutional changes. (How could No. 7, “Bureaucracy, Red Tape, and the Disper- a recommendation for a different interpretative sion of Accountability,” deal with subjects of stance on the part of the courts be translated into keen interest in the reorganizing and strengthen- an implementary instrument?) In any event, either ing of national governmental institutions and pro- the range of alternate specific recommendations cesses and for the entire governmental system, but should be broadened or the descriptive material for the most part are not uniquely intergovern- should be revised to a less sweeping and crisis- mental. This is the case especially for changes in laden content and tone. I happen to believe that the structure of political parties and their conven- the problems are indeed serious, warranting a tions, the consolidation of Congressional subcom- more specific and fundamental attack and focused mittees, the deploring of single-issue politics, and sharply upon the significantly intergovernmental. various proposals for direct as contrasted to rep- The suggestions that follow are directed toward resentative democracy. The particular aspects of that objective. these broad areas that are of major significance to intergovernmental relations (e.g., electoral college, clear standards of implementation in new ADDITIONAL TREATMENT OF intergovernmental legislation, sunset provisions) PRIVATE SECTOR INTERFACE, could be pulled out and treated under other ex- SKEWING OF STATISTICS FOR isting or modified headings, and all other material INTERGOVERNMENTAL PURPOSES, in the three broad areas deleted. This would keep AND REGULATORY REFORM the Commission from getting bogged down in the far ranging fields of political and general govern- Through the deletion of material related to cam- mental reform; it would also create room for paign finance, primary election and political added treatment of other issues more central to party reform, and most aspects of Congressional federalism. reorganization, room can be created for further The grouping of alternate “strategies” is a mis- treatment of certain issues more basic to federal- take, in my opinion. First, the options of status ism, keeping within bounds the “digestibility quo slightly improved, incremental change, and scope” for both the Commission and future read- drastic change are not applicable to such a broad ers.

74 Public Sector Interface Corruption and Politicization of Economic and Fiscal Indices A major part of the functional sorting-out process set forth in the report is the consideration of Revenue sharing, countercyclical fiscal assis- alternatives to governmental service delivery tance, governmental pay scales based on “com- through direct performance or grants-in-aid. These parability,” cost of living adjustments to Social additional alternatives include: Security, civil service, and military retirement all are marked by dependence upon increasingly du- l Reliance upon the private sector to provide bious economic and fiscal indices and consequent services or perform functions through the cumulative unnecessary spending running into play of the market place, augmented in some the billions. Federal measures of poverty do not cases by governmentally provided economic count public assistance in kind-only cash. Com- incentives or penalties (e.g., day care, hospi- parability data on which federal pay is fixed can- tals, police protection in commercial and in- not include state and local employment, pay dustrial sreas, health insurance, mental health scales of smaller firms, or private industry fringe services). benefits (because such inclusions would make the statistical result less favorable to the employees). l Use of indirect governmental assistance (tax Unemployment data, especially substate, are credits, loan guarantees, pollution taxes, etc.) highly questionable, and pension benefits are tied with performance and service delivery rest- to the Consumer Price Index instead of to the ing on private profit or nonprofit institutions, Gross National Product deflator. The usual but unspoken reasons for all of these kinds of inten- l Increased use of volunteers. tional skewing is to achieve a higher level of pay- out. An important criterion that might well be tied l Self-financing through user charges and to grant initiation or continuance is the existence greater use of special taxing districts. or ready availability of statistically reliable date for each formula factor. Among the criteria for grant initiation or retention at the national level might be a required Regulatory Reform * showing that private sector use or stimulus cannot achieve adequate (not necessarily optimal or Regulatory conflict and overlapping is fully as maximum) results toward the national objective contributory to intergovernmental imbalance as involved. Such a criterion would be a crucial ad- the increasing “marbelization” of service delivery ditive toward the highly commendable and ur- responsibility and financing and should be ac- gent goal of decongesting the intergovernmental corded something approaching equivalent treat- fiscal transfer system. ment in the Commission’s report. For example: A related aspect of potential decongestion is the substitution of transfer payments to individuals, l Concurrent regulatory jurisdiction of national firms, or nongovernmental institutions for certain and state governments increases costs for existing or yet to be proposed intergovernmental those regulated, which in turn raises con- transfers. Such substitutions are especially rele- sumer prices. vant to training, placement, and employment of the hard-to-employ (especially as the emphasis l Especially critical is state regulation of prod- shifts from public service to private sector em- uct manufacture and product specifications ployment), to housing assistance, and to certain with respect to goods moving in interstate kinds of education assistance. Experience has commerce. Several federal regulatory statutes shown the consistent inability of the Congress to not only permit but encourage states to im- target assistance to places without unconsciona- pose equal or higher standards, thus breaking ble waste in spreading the funds around to prac- up economies of scale involved in the mass tically every unit of government, regardless of production for a national market. need; on the other hand, Congress has shown a much greater ability to target funds to disadvan- l Mistaken striving by regulators for a risk-free taged people-poor, handicapped, etc. society or for incremental levels of protec-

75 tion, the economic costs of which far exceed criteria, also should include an intergovern- the demonstrable social benefits. mental consultative process to precede or ac- company the Presidential recommendations. . The virtual absence of any machinery at national or state levels for an impartial cost-ben- . Enactment of those parts of the Ribicoff-Ma- efit analysis~ and decisionmaking to which thias bill (S. 262) imposing economic cost proposed new regulations or changes are sub- benefit analyses by regulatory agencies and jected. review by the Congressional Budget Office amended to include an appropriate review . On not infreqknt occasions, regulatory fields and recommendation role by the Council of occupied by state governments ‘are pre- Economic Advisors (CEA) and any other ap- empted-not by act of Congress, preceded by propriate unit of the Executive Office of the careful deliberation, but sometimes casually President.* and often cavalierly by adminisimtive regu- l Enactment of legislation authorizing the Pras- lation. (For example, Federal Trade Commis- ident to formulate and submit to the Congress sion activities concerning the funeral, eye grant simplification proposals covering reg- glass, and hearing aid industries and a pend- ulatory and other Congressionally enacted re- ing action by Secretary Golds&mitt of the quirements applicable to two or more agen- Department of Transportation concerning the cies, whereunder varying statutory language movement of atomic wastes are recent cases is ,rendered internally consistent and more in point.) conducive to effective administration and . As pointed out previously by ACIR, several compliance by recipient state and local gov- national regulatory objectives are linked to ernments; any such simplification proposal the intergovernmental bansfar system, often to become effective within a specified period; with consequent friction, excessive adminis- unless disapproved by a vote of either house trative costs, and lowered productivity. Del- of the Congress. egation of enforcement powers to each grant- ing agency for governmentwide statutory en- AUGMENTED CRITERIA FOR vironmental, civil rights, affirmative action, SORTING OUT GRANTS + planning, and other requirements presents recipient state and local governments with administrative chaos defying description. The draft chapter includes proposals for decongesting the grant system by a more clear-cut Among remedial measures that the staff should assignment of functions to either the national or develop for Commission consideration are the fol- state-local lavel-a relaywing, if you will, of the lowing: federalism cake. Unfortunately, in my opinion, ACIR in its numerous reports in recent years has . A Constitutional amendment providing that not tackled head on the problem of realignment national preemption of any regulatory field of functional responsibilities except in terms of pursuant to the power of the Congress to reg- structure and process. Some earlier functional ulate commerce among the states shall be ac- studies-welfare, medicaid, poverty programs, complished by a statute. stating explicitly the education finance, law enfokement, and mass intent to preempt and the reasons therefor.

. A sorting-out process (comparable to that ’ Pert cd the bill is highly cnntioversiel, barring any direct or indirect involvement of the President in cost-benefit anal- prbposed in the draft chapter for functions yses by the independent regolatory commissions. I believe and service delivery grants) to be established CEA end office of Management and Budget concern with by statute for recommendations by the Pres- economic affairs should be gove~entwide end not fenced off from the “indapendent commissions.” For useful corn- ident to the Congress as to respective regu- mentery on both sides of this question, see Ribicoff, A., “For latory fields that should be preempted or va- RffectIveness end Effidency: S. 262,” Regolation, Weshing- cated by the national government (possible to,,, DC, American Entmprise Institute, May-June 1979, pp. 17-20: end De Moth, Christopher C., “Conetining Rego- criteria set forth subsequently in this state- letory Caste-The White House Programs.” Regulation, Jem ment). The statute, in addition to substantive wry-February 1980. pp. X-26.

76 transportation-looked at functional substance ‘the first two sets of criteria and additional factors and characteristics, but most of these are more or peculiar to the function and subfunction and in- less outdated. dicating the direction of the proposed action- Some functional “case studies” are a part of the elimination, reduction, retention, or other change. present report, but the functions involved are not The staff members concerned are no doubt rather mentioned in the recommendations. Instead, more thoroughly versed in the program characteristics. general criteria are submitted for someone to ap- already having reviewed the history and written ply to the existing grant spectrum, These criteria, up the descriptive detail. (Later in this section, an as far as they go, are well stated and mostly de- illustrative rough cut is taken on three elementary fensible, but I would suggest substantial augmen- and secondary education programs.] The result- tation. The agency or official charged with iden- ing recommendations would constitute a sizeable tifying specific functions, subfunctions, and grant running start for the implementors and would be or regulatory programs associated therewith for sufficiently specific for the drafting of proposed which the federal role should be eliminated, ra- White House recommendations to the Congress duced, or redirected must have criteria and other and the attendant pieces of proposed legislation. policy guidance sufficiently specific as to make the identification and frame the rationale therefor. The criteria and other guidelines are of at least NATIONAL ACTIVITY ENTRY three levels or kinds: 1. Situations warranting national govern- Here are some beginning criteria related to ap- ment entry into a new activity (grant, reg- propriate national government activity (grant, ulatory, or other): regulatory, or other); these are lifted from the 1955 2. For existing programs, general considera- report of the (Kestnbaum] Commission on Inter- governmental Relations. tions of a fiscal/administrative character calling for elimination, retention, or other . the following conditions justify na- change in the federal role; and tional action within the national govem- 3. For each existing program, question if one merit’s delegated powers, when the lower or more of the initial rationales still exist levels of government cannot or wil\ not and to what degree, and see what other act: functional and programmatic characteris- (a) When the national government is the tics call for withdrawal, retention, or redi- only agency that can summon the re- rection of the federal role. sources needed for an activity. For this reason the Constitution entrusts defense As presently constructed, Recommendation 1 encompasses primarily the second group, relates to the national governmeni. Similarly. exclusively to grants, concerns mostly existing primary responsibility is given to the national government because it alone can programs, and provides no guidelines of a functional-specific character. If the recommendation command the main resources for the were adopted, who would be responsible for tak- task. ing the next step and what would it be? By ACIR, (b) When the activity cannot be handled in a future report, finally getting down to brass within the geographic and jurisdictional tacks on a few specific functions? By OMB, in limits of smaller governmental units, in- assembling a catalog of grants broken down by cluding those that could be created by the quantitative measures proposed? Or by the compact. Regulation of radio and tele- governmental affairs committees of the Congress, vision is an extreme example. in holding hearings to ask interested parties what (c) When the activity requires a nation- they think? wide uniformity of policy that cannot be I would urge strongly [a) the development of achieved by interstate action. Sometimes some additional guidelines relating to national there must be an undeviating standard activities [some suggestions are resurrected be- and hence an exclusively national pol- low), and (b) the evaluation of the respective pro- icy; as in immigration and naturaliza- gram areas covered by the case studies in light of tion, the currency, and foreign relations.

77 (d] When a state through action or inac- and continuing decrease, per capita income ratio tion does injury to the people of other between Connecticut (high) and Mississippi (low), states. One of the main purposes of the down to 1.6 to 1 and dropping, as the Sun Belt commerce clause was to eliminate state continues to economically outstrip the Frost Belt. practices that hindered the flow of goods In light of substantial decrease in rationale, re- across state lines. On this ground also, duction in magnitude and diversion of much of national action is justified to prevent un- remainder from direct distribution to districts to restrained exploitation of an essential incentives for intensified state assumption of fis- natural resource. cal responsibility or other forms of intrastate re- (e) When states fail to respect or to pro- source, equalization would be among the prom- tect basic political and civil rights that ising options. apply throughout the United States. IMPACT AID The foregoing need to be amended and updated, but they represent the hind of qualitative Rationales for construction aid have all but dis- characteristics that need to be used in addition to appeared because of enrollment declines, as have fiscal and administrative guides included in the justifications for Category B of P.L. 674. Phasing draft recommendations and to individual pro- out or redirecting the money has been recom- gram characteristics and considerations, as well mended repeatedly. Some phasing out of Cate- as comprising benchmarks for the vacation or gory B in wealthier jurisdictions already has been preemption of regulatory activity. voted: perhaps the present budget crunch will kill it off completely. illustrative Factors in Three Education Programs ASSISTANCE FOR EDUCATION OF THE HANDICAPPED Three of the “larger ticket” grants in the ele This is part mandate and part assistance. Fed- mentary and secondary education field are: Title eral court decisions, in addition to Congress, are I of the Elementary and Secondary Education Act requiring large increases in outlays. Spillover and (ESEA) (P.L. 96-561); impact aid (P.L. 815 for con- humanitarian justifications are very strong. These struction and P.L. 874 for operations); and assis- and other factors weigh heavily toward continu- tance to education for the handicapped (P.L. 94- ance and possible increase when fiscal conditions 1421. permit or perhaps drawing from Title I and impact aid in the interim. ESEA TITLE I The foregoing am illustrative of the kind of ad- Factors justifying initial enactment of this pro- ditional criteria, specifically related to the func- gram included (a) pervasive positive and negative tion or program, that must be included if the sort- benefit spillover of the elementary and secondary ing-out proposal is to have any utility other than function; [b) large and growing number of “pov- rather sparse fodder for further study or hearings. erty children” in the public,schools, especially in inner cities and depressed rural areas; (c) wide intrastate and intrametropolitan tax base and per CONSTiTUTiONAL AND STATUTORY pupil expenditure disparities: and (d) wide inter- CHANGES FOR REDRESSING state disparities in financial resources available FEDERALISM IMBALANCES AND for, and devoted to, public elementary and sec- STRENGTHENING FISCAL DISCIPLINE ondary education. AT NATIONAL LEVEL Factor (a) is still present to some degree; (b) is present but somewhat abated in magnitude along “Let’s get back to the basics!” This call to action with declining enrollment; (c) is substantially that resounds through many school districts across lessened due to a wave of school finance reform the country is equally applicable in another con- in many states, often accompanied by weighted text: to the growing concern about the severe ero- pupil formulas and shifts in financing from pri- sion of the American federal system that has been marily local to substantial and in some cases to taking place over the past two decades. Here we predominantly state level; (d] shows a substantial are talking about the key Constitutional and other

78 structural principles that distinguish the federal tide cases and controversies of an intergovern- from the unitary form of domestic governance. mental character; and in general, an attempted In the Constitution, of course, we have (1) state overhaul of the complete governmental system, control of election machinery (Art. I, Sec. 4); (2) not just the intergovernmental aspects thereof.) Congressional power to regulate commerce among Following are some additional alternatives that the states (Art. I, Sec. 6): (3) prohibition of state might merit the Commission’s consideration. boundary changes by national action without con- sent of the state or states concerned (Art. N, Sec. Question of State Responsibility for 3): (4) authorization for two-thirds of the state leg- Initiating U.S. Constitutional Change islatures to initiate amendments to the U.S. Con- stitution via a convention mandatory upon the In Article V the founding fathers endeavored to Congress (Art. V); (5) providing that the U.S. Con- provide protection against undue national gov- stitution and laws pursuant thereto are supreme, ernment encroachment upon the spheres of activ- the constitution or laws of any stete to the con- ity reserved for the states and their local govern- trary notwithstanding (Art. VI); and (6) powers ments in two ways: first, by requiring legislative not delegated to the national government by the ratification by three-fourths of the states of Con- Constitution sre reserved to the states or to the stitutionel amendments put forth by the Congress, people (Tenth Amendment).* Additionally, and and second, state initiation of Constitutional especially pertinent to the draft report before the change through the petitionfconventiotiatifica- Commission, is [a) the power of the Congress to tion process. with Congress impliedly in a min- provide for the general welfare, any spending for isterial rather than a substantive role. Several such purpose having been given an unlimited questions of a key intergovernmental character green light by Supreme Court decisions, and (b) are involved; these are not theoretical-they are the uniformity clause in Art. I, Sec. 6, as it may here and now. On three occasions during the past apply to national taxation. two decades, the number of petitioning states has If the foregoing and other provisions of the Con- come within shouting distance of the required stitution are the substantive and legal bases of two-thirds (reapportionment, revenue sharing, American federalism. and if federalism is in the and balanced federal budget). dire simits depicted in the draft report, why are not some alternatives provided for strengthening . Should the states continue to have the initi- or updating the Constitutional parameters of the ating power? If not, repeal of the relevant por- federal system? Aside from changes in the election of Article V would be called for. toral college and mention of a Presidential item . Should the initiating power be strengthened veto, there are no alternatives provided for Con- [e.g., making the ministerial, nonsubstantive stitutional changes addressed to the problem role of Congress explicit; eliminating the con- areas other than a transparently unacceptable pro- vention step, with Congress perfecting the posal for a wideopen Constitutional convention. proposed amendment and sending it back for (The convention would consider such things as ratification)? a “fusion of political executive and legislative au- l Should the initiating power be weakened thOIity,” a thoroughly discredited idea of the (e.g., explicitly giving Congress a substantive Council of State Governments in the early 1960s role)? for what it termed a “Court of the Union” to de- l Unless repeal is called for, ACIR in this report should reaffirm the urgency of enacting the Fxvin bill. * Rank Bane, the tkst chairman of ACIR, has often smpha- sized that from B substantive and political standpoint. four powera and functions of state gov-ant constitute the pil. Greater Inter overnmental lms of American federalism: Con current taxhlg powen, (except for customs) with national *overmnent; primary re Revenue B lexlblllty sponsibility for public primary, secondary. and higher education; control of ehtion machinery; and. except for a One of the Constitutional propellants for an un- handful of fdeml crimes and for US. Co~MItutional safe guards as to due pmcess. control of the criminal justice sys- necessarily wasteful grant system has been the tern. taxation uniformity clause that many argue pw-

79 eludes any form of regional taxation earmarked duced. The following alternatives should be infor federal projects of a strictly regional (metro- cluded in the draft report and given serious con- politan or multistate) character. The local piggy sideration by the Commission. back upon state income and sales taxes has been . A Constitutional amendment providing for an outstandingly successful aspect of fiscal fed- sn item veto of appropriation and appropri- eralism. In its absence many more state aid pro- ation-authorization bills. The item veto has grams would have become necessary, wit71 con- proven to be an effective fiscal management sequent inequities and complicated administra- tool at the state level and is contained in tion. many state constitutions. . Amendment providing an exception to the l A Constitutional amendment prohibiting ap- uniformity clause by authorizing Congress to propriations in excess of estimated revenue, create opportunities for state, interstate, or unless the Congress by a [three-fifths) (two- metropolitan piggy backing cm the federal thirds) vote of each house finds a deficit to be personal income and other taxes in order to necessary to assure national economic stabil- finance projects and activities of a regional ity. Most states require a balanced budget in nature. their constitutions; to say that such a “detail” Such an amendment would permit special tax- does not belong in the national Constitution ation to fund various multistate programs such as or would hamstring the government in time Appalachia. [When Appalachia was established, of emergency overlooks [a) the contrasting part of the justification for subsequent expansion state and local experiences where such a of regional commissions was that if some states stricture is in effect, (b) that requirements for could get money for regional programs, all other an extraordinary legislative majority are as states should be in some kind of regional program old as the Republic (any demonstrable emer- too! Hence, Four Corners, Ozarka, Upper Great gency condition can be met through such a Lakes, etc.) majority), and (cl the record of the Congress since 1940, proving beyond a shadow of a doubt that statutory enactments and resolu- Strengthening Fiscal Discipline in tions of good intentions are inaderfuate for National Government fiscal self-discipline, because of the ready availability of the printing press. One of the major reasons for the growing overload upon the federal aid system has been the l A Constitutional amendment or statutory ease with which members of Congress can per- amendment to the Congressional Budget Act suade one another to support the launching of to (a] require inclusion of projected obliga- new programs, very often concealing the true an- tional authority for future years in appropd- nual cost under deceptively low first-year startup ation and authorization bills carrying initial funding. New programs are easy to launch in Con- funds for multiyear programs; (b) authorizing gress, because there is no final point, after the pro rata reductions in supplemental funding appropriations committees have done their work, of entitlement programs if found necessary by at which expenditures must be brought into line each house in order to avoid a deficit; or (c) with revenues, with the attendant painful review some comparable provision that would as- and readjustment of priorities that nearly all state sure appropriation control over entitlement and local governments must undergo. Not since programs and back-door financing unless 1969, despite a number of intervening years of waived specifically in a particular year for a economic growth and essentially full employ- particular program by a vote of each house. ment, has the federal budget been balanced. Only with new Constitutional and statutory fiscal safe- The foregoing are neither original nor new. Def- guards can the runaway growth in federal grants icit spending has brought the nation to the very be slowed, real priority setting among competing brink of fiscal and economic disaster: more than needs effected, and current financial waste and half the states have called for a budget balancing fraud in the intergovernmental transfer system re- amendment. The several meritorious suggestions

80 in the draft report for decongestion of the transfer sional invitation to all and sundry to the prover- system become largely empty rhetoric unless bial free lunch. placed in a fiscal framework that is conducive to Thank you for this opportunity to comment on careful choice rather than a continuing Congres- the draft report now, before the Commission.

Appendix C Is the Federal System Still There?

Formal Statement of Professor Daniel J. Elazar, Director, Center for the Study of Federalism, Temple University

I have been asked to appear before you today to discuss the admirable ACIR report on “The Fed- eral Role in the Federal System.” So much of the basic analysis in that report squares with my own studies and observations that I must carefully avoid mere repetition of them in my remarks. I have decided to restate some of that analysis in even more emphatic terms, because I strongly believe that the cardinal question before u$ tram scends the specifics of the massive effort before you and goes to the very heart of whether or not the federal system in the United States still exists as such. Those of you who know me, or know my work, know that during the 25 years that I have devoted to the study of the American federal system, I have consistently struck an optimistic note with regard to developments within it. Indeed, with my mentor, the late Morton Grodzins, I was active in promoting the idea that the cooperative approach to federal-state relations, including the involvement of local governments as partners, was as viable a form of federalism as the older dualistic approach, calling for maximum separation of governments and their functions. When President Lyndon Johnson stated that the “creative fedm- alism” of the Great Society was to be seen not as redividing the same pie but expanding the pie for federal, state, and local governments alike, I ap- preciated his confirmation of the cooperative view. However, certain very drastic changes occurred along the way-most of which are admirably summarized in the draft report before you.

83 When I wrote in The American Partnership excluded by federal preemption from fields that about the way in which cooperative federalism until relatively recently were considered their ex- was in fact the standard pattern of behavior dur- clusive prerogative. In recent years Congress has ing the era when the theory of dual federalism acted with no restraint and the Court with vir- was dominant, apparently I did not sufficiently tually none, despite the efforts of some justices to appreciate the importance of the theory function- revive the idea that there are indeed Constitu- ing as a restraint upon behavior. As long as there tional questions to be faced. was a pervasive and unchallenged sense of the There were those of us who raised the issues Constitutional division of powers between federal contained in the report at the beginning of the and state governments, of Constitutional limits on decade, but our words apparently fell on the deaf federal action, and of the federal role as support- ears of a Congress whose members no longer seem ive rather than domineering-as long as the rel- to know or care what federalism is all about. This atively powerful federal government in all its occurred despite the fact that every President branches had to be somewhat apologetic about since Lyndon Baines Johnson has paid obeisance getting involved in any particular function, it was to the federal principle and has claimed to stand possible for Washington to work with the states four square on the side of a healthy and vital fed- and localities on a partnership basis. Somewhere eral system in all its parts. Our warning then, along the line, however-perhaps with the death which I would suggest is even more correct now, of the dualistic doctrinethe sense that the fed- is that what the Presidents were advocating was eral government was Constitutionally limited es- decentralization, not federalism. sentially dIsappeared. In great part this was a re- Once upon a time we had a Constitutional shar- sult of decisions of the U.S. Supreme Court, of its ing of powers in which each partner was given becoming too active a partisan and abdicating its due respect-%11 faith and credit” in a real umpire role, as the report suggests. But, beyond sense-by every other partner and in which the that, it was also an abdication on the part of the federal government, as the strongest partner (if executive and legislative branches of the federal only because it has always had an easier time rais- government, who refused to accept their role as ing revenues, and since 1862, the exclusive power interpreters of the Constitution. Instead, they to print money), was prepared to exercise self-re- demonstrated a willingness to reflect any interest straint in dealing with the states. More retxntly that could move them, leaving it entirely to the we have moved to a system whereby it is taken as Court to determine questions of Constitutionality. axiomatic tbat the federal government shall initi- The natural history of this change is easily ate policies and programs, shall determine their traced. In the 1950s the federal government be- character, shall delegate their administration to came actively involved in a supportive role in vir- the states and localities according to terms that it tually every field of governmental endeavor, other alone determines, and shall provide for whatever than the most utterly local. The 1960s witnessed intervention on the part of its administrative a shift in that involvement-from supporting state agencies as it deems necessary to secure compli- and local initiatives to taking the initiative and ance with those terms. requiring the states and localities to conform to Elsewhere I have suggested that the proper federally established directions. This led, in turn, model of a federal system is a matrix of govern- in the early 1970s to increasing federal preemp- ments serving larger and smaller arenas, with the tion of state and local powers, and in the mid- federal government as the framing institution 1970s to the notion that the federal government serving the largest arena, but with no greater le- was the policymaker by right, while the states and gitimacy outside the spheres of its principal re- localities were merely convenient administrative sponsibility than the other governments serving arms to be subjected to all kinds of federal regu- smaller arenas in the spheres of their principal relations, whether authorized by Congress 01‘ not. sponsibility. It is most emphatically not a power Even Governors came to believe that the states pyramid consisting of higher and lower levels, could not initiate programs on their own but had with the federal government presumably on top to wait for, or seek, Washington’s lead. and the states and localities tiered below it (and By the end of the decade, we had reached the the people presumably underneath tbe entire point at which the states increasingly were being structure). The operative ideology today begins

84 with the pyramid model and leads to the effort to This latter represents another effort in a grow- substitute decentralization for federalism. Even ing series of attempts to influence the very strut- our language reflects it. The American people ture of state and local governments-not merely have drawn the right conclusions--coming to their functions but touching matters that were look upon all government as simply a pyramid sacrosanct even in the heyday of New Deal inter- weighted down upon them; one to be milked for ventionism. And this is only what has happened whatever a person or group can get; the lesser of since Congress reconvened in January of this year. evils or the path of least resistance since there is As PUBLRJS’ Annual Review of the State of no way to get it off our backs. American Federalism has indicated for the past Not only has the Constitutional theory of fed- two years and will again this year, the list of sim- eralism been replaced by a half-baked theory of ilar examples is growing longer all the time. decentralization, but it is a vulgar and, at times, Moreover the state and local response to all this vicious theoryas well. What it has meant is that seems to be merely acquiescent. Thus, the Na- Presidents and Congresses have done exactly tional Governors’ Association (NGA) Governors’ what common sense would have suggested they Bulletin of February 29, 1980, reporting on the would do: namely, used decentralization in an NGA winter meeting, reports that the Governors effort to keep the political “goods” for themselves indicated their willingness to accept the Carter and pass the tough problems on to the states and Administration proposal requiring states to estab- localities. President Nixon even articulated this lish commissions to encourage structural change, approach, indicating that he would keep those re- “but only if such commissions did not hamstring sponsibilities that brought his Presidency credit the states with unreasonable and unnecessary but pass on the other ones, tbe difficult ones, to controls.” The most they could do is criticize the the Governors and Mayors. Subsequent Presidents Administration’s draft proposal, which authorizes and Congresses have done the same thing without the Secretary of the Treasury to intervene in, and saying so. approve state procedures and decisions, and the Witness the sorry spectacle of summer 1979, requirement that the commissions be dominated during the height of the gasoline shortage when by representatives of the localities. the President tried to force the Governors to estab- The Governors were on tbe defensive in almost lish and enforce unpopular control mechanisms, every respect. They bad to publicly oppos2. fed- and the Governors refused to accept the political eral efforts to circumvent substantive provisions liability of doing so. The President self-right- of state water law and urged that the President, eously proclaimed his devotion to federalism in not the Administrator of the Environmental Pro- order to “stick” the Governors with this unenvia- tection Agency, have the authority over laws is- ble task, while the Governors self-righteously sued by Governors to facilitate the use of coal. evoked the idea of federal responsibility to pass And so it went. The plaintive cry of the Governors the buck back to Washington. to be included as partners at a time when all During the past year, this trend has reached a knowledgeable observers agree that most states new high. Indeed, in the first few weeks of 1980 are functioning as well as, if not better than, the alone we have seen the advancement or enact- federal government itself reflects the present state ment of legislation substituting national for state of affairs all too clearly. standards for highway truck weight-most as- If all of this centralization had led to the desired suredly not for tb.e benefit of the highways so improvements, perhaps even those of us who are much as for tbe benefit of the truckers; expanding committed federalists-who believe that tbe fed- the federal “right” to intervene in the manage- eral system is one of the fundamental bulwarks of ment of state institutions, presumably to protect liberty, which for us remains a principal goal of tbe rights of U.S. citizens incarcerated within the American experiment-might be prepared to them; providing for federal override of state leg- pay the price. Alas, the true record is now emerg- islation and local ordinances in certain energy- ing. related matters; and requiring each state to estab- Again, looking only at the most immediate ex- lish a commission to study ways to improve state amples, The New York Times of March 8, 1980, and local government operations as a condition includes an article on the increase in traffic deaths of receiving its share of federal revenue sharing. in 1979 which quotes Howard L. Anderson, the

85 recently retired Federal Highway Administration care was absent. The result was that city associate administrator for safety: “Much of our streets became wards of mental hospitals, present highway design criteria is [sic] based on and it was out of the snakepits and into what is now an obsolete design vehicle con- the gutter for victims of the deinstitu- crete median barriers which safely redirect the tionalization policy. two-ton and larger vehicles have shown a disturbing tendency to cause the sub-compact car to roll In more than a few cases, those deinstitutional- over.” Those of us who were witness to the defac- ized include people who have committed violent ing of miles and miles of highway with ugly con- criminal acts. But even if that is merely random, crete barriers, destroying green median strips, at we are left with the sadness of the nonviolent suf- untold cost, because the federal government re- fering from a process that never took into consid- quired that change if the states were to continue eration the fact that, given the human condition, to receive highway funds, are now faced with the perfection was not obtainable either inside or out- spectacle of those barriers serving as killers rather side of institutions. than the safety purposes for which they were pre- The list of federally generated mistakes grows sumably designed. It is important to recollect that longer and longer every day. One can forgive all those barriers were being erected during the mid- the well-meaning people who are involved for 197Os--after the energy crisis of 1973-74, and pre- making those mistakes. None of us are immune cisely when the country was being pushed by from the laws of overly high hopes and unanti- other federal agencies (quite properly, if not suf- cipated consequences. One cannot forgive them, ficiently) to shift to smaller cars. however, for arrogating to themselves and the fed- Similarly, The New York Times has printed a eral government a presumed omniscience that series of articles on the untoward consequences they did not have at the expense of the federal of deinstitutionalization, another major federal system. effort, revealing case after case of people wander- So here we have ita federal government un- ing the streets or being left to shift for themselves restrained in all three branches, one in which the without proper care. Two colleagues at the Uni- Constitutional issues are never raised and are con- versity of Southern California, Arthur J. Naparstek sidered irrelevant by those who presumably have and David E. Biegel, have written as follows: taken an oath to “preserve, protect, aLdefend the Constitution.” Where does that leave us? If we Federal mental health planners envi- are to accept Alexander Hamilton’s minimalist sioned the flowering of a network of sup- definition of a federal polity in Fedemlist No. 9: port services to care for deinstitutionalized patients at the community level Simply an assemblage of societies or through the stimulus of federal seed an association of two 01‘ more states into money. But 1,300 of the 2,000 ccmunu- one state. The extent, modifications, and nity mental health centers projected for objects of the federal authority, are mere 1980 have failed to materialize and many matters of discretion. So long as the sep- that did have failed to service this chron- arate organization of the members be not ically ill population. Deinstitutionaliza- abolished; so long as it exists, by a con- tion, an ostensibly humane treatment stitutional necessity, for local purposes; program, has degenerated into a tragic though it should be in perfect subordi- crisis. Public scrutiny of the situation nation to the general authority of the needs to begin now. union, it would still be, in fact and in Planners, without real consultation, as- theory, an association of states, or a con- sumed that strong communities would federacy. accept the chronically ill. When few wel- comed large numbers of these troubled then we can be content that we still have a federal people, patients were steered to transi- system. If, however, we modify that definition tional neighborhoods that would not put with Madison’s in Federalist No. 14, which de- up a fuss, but the strong community sup- scribes what the framers expected the American port factor essential for successful after- federal system to be:

86 The general government is not to be concomitant expansion of a bureaucr acy already charged with the whole power of making too big at specific points, even if its total size is and administering laws. Its jurisdiction no greater than it was 30 years ago. From the per- is limited to certain enumerated objects, spective of federalism, that will only provide fur- which concern all the members of the re- ther reason for turning public attention to Wash- public, but which are not to be attained ington. Even the case for transfer still rests on by the separate provisions of any. The unproven assumptions. Moreover, in today’s cli- subordinate governments extend their mate, such a transfer will simply strengthen the care to all those~ other objects which can centralizing tendencies, the report has presented be separately provided for, but retain so well, by knocking out the last prop maintaining their due authority and activity. a semblance of the old federalism-namely, the idea that domestic social functions are primarily then we have much to worry about indeed. the province of the states, and if no longer theirs We have long since encroached on the Madi- exclusively, are at least intergovernmental. sonian definition, which if one notes carefully, The real problem is clear. It is not a question of limits national intervention to those objects that structures, nor of procedures, but of people-peo- concern all the members of the Republic but ple in government who in certain respects are too which are not to be obtained by the separate pro- activist, too eager to do more; people in and out visions of any. (Education, for example, concerns of government who have too many vested inter- all the members of the Republic, but was held by ests; and people everywhere who are too unres- the founding fathers to be separately attainable by trained in their demands. It is the problem of peo- each state-yea, each locality--acting separately.) ple who have lost their public-mindedness, who The fact is that we are now even encroaching on may no longer even sea themselves as part of an the Hamiltonian definition by indirect means, American public, not to speak of state publics or with federally mandated commissions to imple- civic communities. At one point the report refers ment the latest federally supported fads in gov- to proposals to strengthen the rights of the “sov- ernmental structural reform, which are likely to ereign citizen.” It is a telling phrase and one very become the concrete barriers and deinstitution- much of om- times. In the basic documents of the alization prograins of tomorrow, and federal ex- American founding fathers and their commentar- ecutive overrides of legitimate state laws to ex- ies, there was never any discussion of the sover- pedite this project or that. eign citizen as an individual, although there was I like to think of myself as a perennial optimist full and emphatic discussion of the sovereign and am even on record as such. In that spirit, I people. The American tradition of popular sov- would suggest that if this great federal republic ereignty, however interpreted, is just that-a tra- ha.5 not lost its way, then at the very least we are dition that the people as a community, as a public, in the position of Daniel Boone who, when asked not as individuals, are sovereign. if he had ever been lost in the woods, retorted, Our problem today is precisely that every citi- “Nope, but once I was bewildered for three days.” zen believes he or she is sovereign to do what he We have been bewildered for longer than that. We or she wishes. How did this come about? There are so bewildered that with all their importance, is no single cause, but no doubt the diminution specific palliatives will no longer save the federal of local loyalties has played its role. The Ameri- system. Only a clear restoring of a sense of Con- can people is a people precisely because it is com- stitutionalism and Constitutional priorities can pounded of the several state and local publics. possibly do so. John Dewey, who in so many respects was a pre- Here ACIR and I begin to diverge in our pre- cursor of contemporary notions, noted this well scriptions. The~range of options offered in the re- in his now neglected classic, The Public and Its port, in my opinion, is incomplete. Indeed, the Problems. When that compounding was lost, we most important option is missing. I repeat, the became too diffuse as a people, which is now most important point to be made is that the old leading us to become a nonpeople. palliatives will not work. Nor will transferring This report implicitly recognizes that the issue welfare, health insurance, and social insurance is no longer simply one of intergovernmental re- programs to exclusive federal control with the l&ions. In fact, one of its heartening aspects is

87 that it concerns itself with the federal system as was contingent upon the existence of those Con- a whole, moving away from an earlier stage in the stitutional barriers. Grodzins, who was always Commission’s life when it joined in the general wise in such matters, conceded the point, al- trend of trying to reduce federalism to intergov- though perhaps never to the extent that Diamond ernmental relations. This report helps restore the or I would have wished. original Constitutional intentions of the American Diamond understood what the founding fathers founders, who understood federalism to be the understood-namely, that people will be people form of the American polity (John Adams’ termi- and that the only way to make them live up to nology) pervading virtually all, if not all, its as- their better natures in matters governmental is pects. That is another reason why the recommen- through proper Constitutional structures properly dations seem so pale in comparison with the maintained. Only a restoration of Constitutional problem. good sense can save the situation. Nothing less In my considered judgment, the possibility of will do. Most of the conditions described in the continuing the governmental system in its present report-such as the prevalence of individual pol- form for day-to-day governance is far greater than icy entrepreneurs, state and local lobbies, and in- the report suggests. If we compare the problems terest group pressures-are endemic to American of governing in the United States to those of other political life and are not likely to be altered where countries, one sees immediately that the nuisance or when they should, to be restrained, or to be problems to which most of the proposals in the redirected by Constitutional barriers as in the report are addressed are hardly more than that. past. People on all planes of government and in all In that connection, my recommendations are: branches can live with those nuisance elements. They can even live with the waste and inefficien- 1. Undertake a major political education cam- cies. They make life less pleasant and have their paign to advance the understanding of Constitu- costs, but they do not prevent governing. They tional federalism. Such a campaign should be di- simply elevate to positions of power those people rected principally toward those involved in public who are best able to cope with the conditions life who hold or will hold public office, will be around them and exclude those who are not, employed in the public service, or will be active strengthening one class of entrepreneurs as dis- in the various public institutions and organiza- tinct from another. What is missing in such a sit- tions of American civil society. These are the peo- uation. however, is effective government and, ple who are most involved in the consideration of most important, government that serves the ends public issues and whose opinions [not in the for which government was instituted in the United sense of polling but in the original sense of op- States. That is the nub of the problem. ining) have been crucial in bringing the old sys- The missing option in the report is that of res- tem to its present state. They will be equally cru- toring Constitutional barriers. In my opinion it is cial in making any changes in the future. Thus, the most important option of all. Reference was public education in this case is not a television made in the report to the way in which some quar- blitz prepared by the Advertising Council to sell ters strongly believed that the political parties a candidate or a slogan, but a process of opinion were sufficient barriers to centralization and how formation that does not attempt to suggest a doc- this has proven inaccurate, at the very least be- trine of federalism so much as to revive a sense cause of recent changes in the party system. I am of the place of federalism in the American polit- reminded of an exchange between Martin Dia- ical tradition, to help increase the public-mind- mond and Morton Grodzins in the mid-1950s, edness necessary to make that tradition and the subsequently published in part in Cooperation system linked with it work toward the achieve- and Conflict [which I and my colleagues of the ment of its proper ends. University of Chicago Workshop in American Federalism edited some 15 years ago]. Grodzins 2. Write or rewrite federal legislation to restore was a foremost proponent of this view of the par- the possibility of a more state-centered political ties’ role and seemed to denigrate the importance party system. There are many steps that can be of Constitutional barriers. Diamond took him to taken in that connection, some of which are men- task, pointing out that even the role of the parties tioned in the report. They do not include moving toward what has been defined as a more respon- without any touch of patronage. But as a political sible party system based upon nationally set pol- scientist, I also know that there are cultural and icy guidelines. Indeed, those recommendations historic reasons why that is so. III other states the out of the grab bag of the past do a disservice to same cultural and historic reasons not only do not the cause of federalism, because they would only exist, but also have little chance of developing, enhance centralization. All the historical and given strongly rooted political cultures and tra- comparative evidence at our command, without ditions of their own. It is no crime to recognize exception, leads to the conclusion that the more the existence of those cultures and traditions and policy-oriented (read ideological) a political party to take them into account. is, the less open it is not only to new ideas but even to new people. 3. Restrict the scope of the conditions attached It is possible, and may even be desirable, to fos- to federal grants-in-aid. Here I refer particularly ter responsible state political parties. That is to those general provisions attached to all grants- where they have worked best in the United States, in-aid that have nothing directly to do with the precisely because they are part of a larger federal implementation of programs but which utilize the framework that acts as a countervailing force to grant mechanism to advance other goals. These the centralizing tendencies already noted in the other goals may indeed be laudible. I tend to iden- report. Given such state parties, the iron law of tify with virtually every one myself, but there is oligarchy would tend to work along with them. a time and a place for everything. The grant sys- Responsible state parties can achieve the goals tem is a convenient but inappropriate mechanism that advocates of responsible parties seek to pro- for advancing those purposes, given the other mote in the realm of policy formulation and citi- purposes that it abuses in the process. zen involvement. Responsible national parties 4. Cull federal grant programs and drop those will defeat the purposes toward which every other that do not deal with any substantial federal ques- recommendation is directed. tion or are explicitly directed toward the institu- So, too, would more federal funding of cam- tions of state and local government. Here, Madi- paigns. Indeed, them should be less. We are rap- son’s definition of a proper federal role becomes idly becoming aware of how the present federal very important. Together with some of thecon- laws providing for the financing of Presidential crate recommendations presented in this report campaigns discourage party organizations and regarding program size, it is possible to fashion the activity of individuals, and encourage the a basis for doing just that. power of single-interest political action committees (not to speak of the problems they have cre- 5. It would be counterproductive to make any ated with regard to the length and rigidity of the current intergovernmental domestic programs into Presidential races themselves). Short of abandon- wholly national ones. On the contrary, for any ing any federal oversight over public funds, there national health insurance program that emerges is little that can be done about this under present out of Congress, efforts should be made to vest conditions except to make the regulations even primary responsibility in the states, with appro- more complex and thus entangle Presidential priate federal funding. This is done in Canada, campaigns in the same thicket that ensnares the which has one of the most successful national administration of programs in the federal system. health programs in the world. Past experience has This Commission could hardly recommend that shown that any effort to separate functions by and be true to the findings of its own research. governmental plane is more likely to lead to Again, the presumed evils of private financing greater decentralization. All the evidence indi- pale into insignificance before the actual evils of cates that it is easier to transfer functions to the public financing. If anything, we should be mov- federal government than to return them to the ing in the other direction. states. The draft report alludes to this when it sug I would be so bold as to suggest that there gests that there is general agreement about trans- should be greater encouragement of political pa- ferring income maintenance, health insurance, tronage in certain circumstances. As a native of and welfare programs to the federal government, Minnesota, I know that in some states political but no agreement as to what should be returned parties not only function, but also become great to the states. I venture to predict that were the

89 first transfer to take place, nothing would happen barriers can be developed once again. with regard to the second. The states would sim- Second, I also would suggest the development ply lose another and perhaps the final prop in of a new doctrine based upon a new interpretation supporting whatever semblance of federalism of the principle of full faith and credit. This prin- now exists. ciple, which is included in the Constitution with regard to interstate relations, also could become 6. All three branches of government, but partic- very important with regard to federal-state and ularly the U.S. Supreme Court, must be encour- even federal-state-local relations. If the federal aged to reassume their responsibilities as inter- government serving the larger arena would, as a preters of the Constitution from a federalist matter of Constitutional comity, extend full faith perspective. Although it is possible to narrow and credit to the actions of the state and local broad interpretations developed over the past governments, serving the smaller arenas, the generation or two (and this should be encouraged) problem of federal encroachment would be re- in other ways, we cannot go back to earlier times. duced substantially. It seems unlikely that dual federalism in the 19th This idea of full faith and credit is something Century style could become even a predominant on the order of the principle of bundesfreund- theory, much less a predominant form of practice, lichkeit, which the German federal constitutional which it was not then either. Thus, it is necessary court has developed into a constitutional doctrine to develop new doctrines or expand old ones. to foster better intergovernmental relations. It is I would suggest two: First, following Madison’s the kind of comity based upon constitutional ob- definition from Fedemlist No. 14, we can once ligation that prevents overly *arrow, self-serving again begin to ask of a particular piece of legis- interpretations of constitutional matters by the lation, regulation, requirement, or procedure parties involved. It is another way in which to whether a substantial federal question is in- demonstrate Chief Justice John Marshall’s great volved. Thus, in the right way-one that recog- dictim that, “it is a Constitution we are expound- nizes the inevitability and logic of intergovern- ing.” Just as that means bmad powers of interpre- mental sharing in a dynamic civil society located tation to keep the Constitution from becoming too in an increasingly complex environment-new narrow a contract, so too should it mean broad limits can be established with regard to the ex- willingness to be considerate of one’s partners in pansion of federal powers, and real Constitutional the federal system.

90 COMMISSION MEMBERS

Private Citizens Abraham D. Beame, ACIR Chairman, New York. New York Bill G. King, Alabama Mary Eleanor Wall, Illinois

Members of the United States Senate Lawton Chiles. Florida William V. Roth, Jr., Delaware James R. Sasser, Tennessee

Members of the U.S. House of Representatives Clarence 1. Brown, ]r., Ohio L. H. Fountain, North Carolina Charles B. Rangel. New York

Officers of the Executive Branch, Federal Government Moon Landrieu. Secretary, Department of Housing and Urban Development James T. McIntyre. Director, Office of Management and Budget G. William Miller, Secretary. Department of the Treasury

Bruce Babbitt, Arizona John N. Dalton. Virginia Richard W. Riley, South Carolina Richard A. Snelling. Vermont

Mayors Thomas Bradley, Los Angeles, California Richard E. Carver, Peoria, Illinois Tom Moody, Columbus, Ohio John P. Rousakis, Savannah, Georgia

State Legislative Leaders Fred E. Anderson, Pfesident. Colorado State Senate Jason Bee. President. Oregon State Senate Leo McCarthy, Speaker, California Assembly

Elected County Officials William 0. Beach, County Executive, Montgomery County, Tennessee Lynn G. Cutler. ACIR Vice-Chair. Board of Supervisors. Black Hawk County, Iowa Doris W. De&man, Freeholder Director, Somerset County. New Jersey