THE I FEDERAL ROLE IN THE FEDERAL SYSTEMu THE DYNAMICS OF GROWTH

A Crisis of Confidence and Competence

GIFT RECO MAY 28m1

ADVISORV COMMISSION ON INTCROOVCRNMLWTAL RlLATlONS Wl+hington, D.C. 2W75 July 1980 A Crisis of Confidence and Competence

ADVISORY COMMISSIOM OM INTIRQOVIRNMRMTAL RIUTIOMS Washington, D.C. 20575 July 1980

PREFACE

TheAdvisory Commission on inter- tiveness of the federal system. The 1976 re- governmental Relations was established by P.L. newal legislation for General Revenue Sharing, 380, which was passed by the first session of P.L. 94-488, mandated in Section 145 that the the 86th Congress and approved by the Presi- Commission: dent on September 24, 1959. Section 2 of the study and evaluate the American act sets forth the following declaration of pur- . . . federal fiscal system in terms of the pose and specific responsibilities for the Com- allocation and coordination of public mission: resources among federal, state, and Sec. 2. Because the complexity of local governments including, but not modern life intensifies the need in a limited to, a study and evaluation of: federal form of government for the (I) the allocation and coordination of fullest cooperation and coordination of taxing and spending authorities be- activities between the levels of gov- tween levels of government, including ernment, and because population a comparison of other federal govern- growth and scientific developments ment systems. . . . (5) forces likely to portend an increasingly complex soci- affect the nature of the American fed- ety in future years, it is essential that eral system in the short-term and an appropriate agency be established long-term future and possible adjust- to give continuing attention to inter- ments to such system, if any, which governmental problems. may be desirable, in light of future de- It is intended that the Commission, velopments. in the performance of its duties, will: The study, The Federal Role in the Federal 1)bring together representatives of System: The Dynamics of Growth, of which the the federal, state, and local govern- present volume is one component, is part of the ments for the consideration of common Commission's response to this mandate. Staff problems. . . ; were directed to: (a) examine the present role of 5) encourage discussion and study at the federal government in the American federal an early stage of emerging public system; (b) review theoretical perspectives on problems that are likely to require in- American federalism, the assignment of func- tergovernmental cooperation; tions, and governmental growth; and (c) iden- 6) recommend, within the framework tify historical and political patterns in the de- of the Constitution, the most desirable velopment and expansion of national gov- allocation of governmental functions, ernmental domestic activities. This volume in- responsibilities, and revenues among troduces the subject of the federal govern- the several levels of government. . . . ment's growth. It is one of ten volumes pre- pared by Commission staff pursuant to this as- Pursuant to its statutory responsibilities, the signment. Commission, from time to time, has been re- quested by Congress or the President to exam- Abraham D. Beame ine particular problems impeding the effec- Chairman

ACKNOWLEDGMENTS

This study was prepared by the gov- ernmental structure and functions section of the Commission staff under the general direc- tian of Assist. Dir. David B. Walker. David R. Beam prepared Chapters I and 111. Bruce D. McDowell prepared Chapter II and edited the volume. Frank Tippett and Kathleen Behringer assisted in updating many of the statistical ta- bles. Kathleen Behringer, Delores Dawson, and Lynn Schwalje provided secretarial support. Chapter I was critiqued on December 13, 1978, at a meeting with the following partici- pants: William G. Colman, Ross D. Davis, Paul R. Dommel, Delphis C. Goldberg, William Gorham, Patrick Henry, Edward K. Hamilton, Everett C. Ladd Jr., Richard H. Leach, Robert Levine, Guy Peters, and Deil S. Wright. Com- ments were received on Chapter I1 from George F. Break, William G. Colman, Laszlo Ecker- Racz, Roger A. Freeman, Richard R. Hite, Law- rence W. Hush, Herbert Kaufman, I.M. Labovitz, Catherine Lovell, and Lee Schoenecker. The Commission gratefully ac- knowledges the assistance of all those named above. Full responsibility for content and accuracy, of course, rests with the Commission staff.

Wayne Anderson Executive Director David B. Walker Assistant Director

Contents

Introduction ...... 3 Chapter I . The Question of Federalism: Key Problems ...... 3 The Changing Context ...... 3 Four Problems ...... 5 Red Tape. Confusion. and Administrative Tension: "The Implementation Gap" ...... 5 Inadequate Results: Evaluation Issues ...... 9 Excessive Cost and Fiscal Inefficiency ...... 13 Responsiveness and Accountability ...... 19 The Federal Role in the Federal System: The Need for Reassessment ...... 25 Four Problems and the Status of Federalism ...... 25 What Can Be Done? ...... 28 Chapter I1 . Indicators of Federal Growth ...... 35 Historical Perspective ...... 36 The Size of the Federal Government ...... 39 Unrefined Indicators of Federal Growth ...... 40 The Scope of Federal Activities ...... 64 Recent Periods of Programmatic Expansion ...... 65 Shifting Federal Budget Priorities ...... 65 Shifts in the Composition of Federal Aid ...... 69 The Significance of Federal Aid in Major Functions ...... 69 Functional Shifts in Federal Employment ...... 74 Expansion in the Scope of Federal Regulation ...... 74 Implications of the Expanding Scope of Federal Activities ... 80 The Depth of Federal Influence ...... 80 Incidence of Federal Influence ...... 82

vii The Nature of Federal Influence ...... 88 Summary: Bigger. Broader. and Deeper ...... 102 Chapter 111 . The Scope of the Federal Role Report ...... 107 Appendix TabIes ...... 111

viii In 1976 Congress directed the Advisory Commission on jntergovernmental elations (ACIR) to prepare a major, multipart study of the American federal system. Consideration was to be given to the relative roles of the vari- ous levels of government, fiscal relationships among them in good and bad times, citizen participation practices, and the future well- being of the system. The present ten-volume report on the na- tional government's role in the system-of which this is Volume I-is part of ACIR's re- sponse to the broader study mandated'by Con- gress in 1976. Other parts of the study are: Citizen Participation in the American Fedeml System (adopted by the Commis- sion on March 23, 1979, with recommen- dations). Stabilization Policy (Countercyclical Aid and Economic Stabilization, adopted in December 1978, with recommendations, Report A-69; and State-Local Finances in Recession and Inflation, completed in May 1979, no recommendations, Report A-70). Comparative Fiscal Federalism: An Overview and case studies of Australia, Canada, West Germany, .and the United States (in process, no recommendations). The Roles of State and Local Govern- power centers. This centralization tendency ments, Assignments of Functions (in has placed the national government: (a) di- process, recommendations expected). rectly in charge of an increased proportion of The Future of Federalism in the United the nation's gross national product, (b) in a po- States (in process, no recommendations sition to affect an even larger proportion of the expected). economy indirectly, and (c) at the center of a complex intergovernmental system that now makes almost all of the nation's 80,000 units of Perhaps the most noted characteristics about government interdependent. the federal government are: (1) its great growth This portion of the Congressionally man- since the 1930s; (2) its assumption of new roles dated study-dealing with the national gov- for providing social benefits, managing the ernment's role in the federal system-measures economy, protecting the environment, and pur- these growth trends, probes some of the major suing other innovative goals-so that now it is reasons for the growth, examines the inter- involved in virtually every function of govern- governmental problems caused, and recom- ment; (3) the dramatic growth of the federal aid mends policies to help overcome such prob- system in the past two decades; and (4) the 1ems. mounting burden of federal regulations, pa- This introductory volume is organized into perwork, and intrusion into the activities of three chapters. The first poses a set of key virtually every individual, business, nonprofit questions to be explored. The second presents a corporation, and state and local government. reasonably comprehensive set of indicators de- These trends add up to a very real shift of scribing the various ways in which the growth governmental responsibilities in the United of the federal government is manifested. Fi- States-toward national government and away nally, the third delineates the approach taken from state and local governments and private in the ful1,ten-volume report. Chapter I THE QUESTION OF FEDERALISM: KEY PROBLEMS

The Changing Context

The federal government unquestionably has grown bigger since its founding. It also has extended the breadth of its activities very sub- stantially, and has become a larger influence on the daily lives of its citizens, businesses, and state and local governments. Many view this growth with alarm. American concepts of liberty and personal freedoms tra- ditionally have been translated into political principles like "the best government is the government which governs least," or "the best government is the one closest to the people." When President Eisenhower called for the establishment of the Commission on Inter- governmental Relations (Kestnbaum Commis- sion) in 1953, he did so in terms of his "deep concern for the well-being of our citizens and . . . our social rights" and to achieve "a sounder relationship between federal, state, and local governments."' When that Commission sub- mitted its final report in 1955, it noted the tre- mendous growth of the federal government even then, including its expansion into social and economic problem solving. The Kestnbaum Commission laid down the following basic principles for returning the nation to a sounder federal system: Leave to private initiative all the to establish a greater national role in such functions that citizens can perform fields as education and health. At the same privately; use the level of government time entirely new areas of public concern have closest to the community for all public gained priority on the national political agenda functions it can handle; utilize cooper- and been dealt with by federal assistance pro- ative intergovernmental arrangements grams: employment and training, environ- where appropriate to attain economical mental protection, community and regional performance and popular approval; re- development, food and nutrition, public safety, serve national action for residual par- and others. To further these objectives the ticipation where state and local gov- number of grant-in-aid programs has increased ernments are not fully adequate, and from about 160 in 1962, to 379 in 1967,5and to for the continuing responsibilities that 498 in 1978.'j Over this same period, federal aid only the national government can outlays rose from $7 billion in 1960 to $85 bil- ~ndertake.~ li0n.7 Since 1955 the federal government has con- Federal regulatory activities also have tinued to grow in size, in the scope of its ac- soared. Beginning in the 1960s a wave of "new tivities, and in the depth of its effects on indi- social regulation" established federal viduals, businesses, and the lower levels of guidelines and requirements in such fields as government. In fact, the growth has accelerated environmental protection, employment dis- in many respects. crimination, safety, and consumer protection.* The period since about 1960 has been an era Many of these acts affect state and local gov- of dramatic, even drastic, change in American ernments as well as businesses and private citi- federalism. The key fact, in a host of fields, has zens. One consequence is that grant-in-aid pro- been the emergence of the national government grams, including the more "flexible" forms, as an important-sometimes even the now carry with them a broad range of national senior-partner in determining domestic policy conditions or across-the-board regula- policies, providing funds, and setting admin- tions dealing with these concern^.^ istrative standards. The resulting transforma- No less importantly, an "activist" Supreme tion in fiscal, administrative, and political ar- Court has enunciated new Constitutional doc- rangements has left no governmental jurisdic- trines restricting state and local discretion (and tion, and very few citizens, untouched. The often overturning long-established policies) in rate and magnitude of change has been so great such fields as public education, criminal jus- over this period that some observers contend tice, voting and political representation, wel- that an entirely new intergovernmental system fare, civil rights, health care, obscenity, hous- has emerged.3 ing, and employment. Like the other two Regardless of the interpretations it is uncon- branches of the federal government, the testably true that intergovernmental relations judiciary has contributed significantly to the have become much more complicated and "nationalization" of domestic social policy.10 numerous than they were during the 1950s, or The historical record also indicates that the even ten years ago: "never has the maze of fis- legacy of these experiments in "creative cal, functional, regulatory and administrative federalism" and "new federalism" has not been links between and among the federal govern- the expanded sense of governmental partner- ment, the states, and all substate units been ship, political vitality, and far-reaching social more complex, costly and convoluted than it is progress which had been anticipated. On the now."4 This was a principal conclusion of the contrary the tangible results have been far more Advisory Commission on Intergovernmental meager than expected, and there has been a Relations' (ACIR) 14-volume study of the inter- steady loss of confidence in public officials, governmental grant system published in agencies, and programs, as well as continual 1977-78. intergovernmental conflict. Indeed it is the The scope and pace of change may be mea- view of many informed observers that Ameri- sured in many ways. Most dramatic, perhaps, can federalism (and other major political in- has been the culmination of decades-old efforts stitutions) is now in zrious disarray. Proposals to reduce the scope and cost of government- the clearest, and most serious, evidence is pro- never absent from the American political vided by the general public through various arena-have gained widespread attention and survey studies. The marked shifts in public detailed scrutiny. opinion relating to governmental performance The national government has been the target are summarized in Figure 1-1, and are pre- of the most intense rebukes from experts, sented in more detail in Volume 11. politicians, and the citizenry alike. Its size and Since the early 1960s, concern about the cost, performance were principal issues in the 1976 effectiveness, and efficiency of governmental Presidential election-and these concerns have activity has risen sharply while trust in gov- since grown even more urgent. None of the ernment has fallen off. According to the most three levels enjoys much popular esteem, ac- recent surveys, 70% of the population believe cording to recent polls.ll Given the intricate that their income taxes are "too high," and interlacing of responsibility for most major 80% think that government wastes "a lot" of domestic services-producing an unresponsive tax money. Only 34% of the citizenry trusts system, according to some-it may be under- government to do what is right at least "most of standable that all governments have shared the the time." These negative appraisals are shared recent criticism. by many within government itself, and by lead- ers in other social institutions. FOUR PROBLEMS The testimony of the general public on these four aspects of governmental performance From an intergovernmental perspective four seems quite clear. Evidence from other sources, major areas of concern may be identified. Each principally the writings of scholars and gov- raises questions about the federal role in the ernmental analysts engaged in the study of American federal system, and about the exten- public policy, is presented below. sive network of assistance and regulatory pro- grams through which the nation provides many "Red Tape," Confusion, and of its most important public services. These Administrative Tension: four are: The "Implementation Gap" administrative failures, red tape, and ten- sion between the levels of government- The most immediate consequence of the the problem of "implementation;" rapid expansion of federal activities in the 1960s was increased tension between adminis- poor performance and inadequate results trative officials and political leaders at the -the question of impact of "evaluation;" three governmental levels. The "explosion" of excessive cost and waste-the matter of new grant-in-aid program&n part because of fiscal "efficiency;" and their newness and number, in part because of lack of adequate control and responsive- their inconsistencies and poor design- ness through the political process-the produced a "management muddle," which was issue of "accountability." recognized as such by federal, state, and local officials. "Better coordination" became a In simpler terms the contemporary problems of watchword for reform. Repeated studies dem- intergovernmental relations have fundamental onstrated the need for administrative clarifica- administrative, programmatic, fiscal, and tion, standardization, and simplification.12 political dimensions. Tensions were high, and events belied the The evolution of these four problem areas common characterization of the emerging in- may be traced in the speeches of Presidents and tergovernmental system as one of "partner- candidates for that office; in the annals of the ship" or "cooperative federalism." As Sen. Congress; in statements by state and local offi- Edmund Muskie (D-ME) observed in 1966, after cials; in the columns of thoughtful journalists; a thorough Congressional review, in past reports of this Commission, as well as of other research institutions; in the scholarly ar- [We] found conflict between profes- ticles of political scientists, economists, and sional administrators at the federal sociologists; and in opinion surveys. Some of level and less professional adminis-

trators at the state and local levels, down, owing to the political autonomy of state between line agency officials and and local governments in the federal system. elected policymakers at all levels, be- Separate administrative, personnel, and politi- tween administrators of one aid pro- cal systems are involved and-regardless of gram and those of another, between federal requirements, conditions, or even specialized middle-management offi- mandates-these jurisdictions are not simply cials and generalists in the top- administrative agents of the national govern- management category, and between ment. Effective implementation thus requires a standpat bureau heads and innovators judicious balancing of fiscal and political in- seeking to strengthen the decision- centives, coupled with an awareness of possi- making process at all levels. ble constraints at the recipient level. The The picture . . . is one of too much Brookings Institution's Martha Derthick, tension and conflict rather than coor- perhaps the leading investigator of these ques- dination and cooperation all along the tions, comments: line of administration-from top fed- To achieve many of its domestic eral policymakers and administrators purposes . . . the federal government to the state and local professional ad- relies on local governments. However, ministrators and elected officials.13 because of the division of authority Mayors and Governors voiced urgent pro- among governments in the federal tests, seeking grant consolidation and admin- system, the federal government cannot istrative streamlining to ease their burdens. At order these governments to do any- the same time the inability to carry out prop- thing. It gets them to carry out its pur- erly complex, multilevel programs became a poses by offering incentives in the growing concern to federal policymakers and form of aid, which they may or may analysts. As Graham Allison, now the dean of not accept, and by attaching conditions Harvard University's Kennedy School of Gov- to the aid. To achieve results, federal ernment, has put it, the issue became one of officials must have enough knowledge "whether the U.S. government is capable of of local politics to perceive what in- translating intentions into outcome^."^^ centives are necessary; they must sup- This problem of "implementation"- ply the incentives in sufficient quan- bridging the gap between idea and tity; and they must direct the incen- execution-became a new focus for analytical tives to those holders of local power research. Walter Williams and Richard F. El- whose support is required to achieve more have gone so far as to contend that: the federal purpose. In short, they must implementation problems in the intervene successfully in local poli- . . . tics.17 social policy areas are the major sub- stantive . . . hurdle to better programs Under these demanding conditions, as Der- in the future. . . . The greatest diffi- thick's study of the failure of the "new towns culty in devising better social pro- in-town" program showed, implementation grams is not determining what are rea- may be extremely difficult. Indeed the separa- sonable policies on paper but finding tion of responsibility inherent in inter- the means for converting these policies governmental programs "makes it hard for fed- into viable field operations that corre- eral policymakers to know what must be done spond reasonably well to original in- to achieve their objectives locally, and for ad- tentions.15 ministrators to bring federal resources, how- While implementation often is not ever scarce or plentiful, effectively to bear in straightforward even in programs administered local settings."18 Harvard's Jerome T. Murphy, directly by the national government,16 the dif- who has examined other instances of im- ficulties are multiplied many times in the in- plementation failure, agrees: tergovernmental arena. Here the traditional The federal system-with its disper- administrative "hierarchy of command" breaks sion of power and control-not only permits but encourages the evasion Excess reporting and paperwork re- and dilution of federal reform, making quirements must be met by states par- it nearly impossible for the federal ad- ticipating in federal programs. ministrator to impose program Funding and program implementation priorities; those not diluted by Con- held up by lengthy approval processes, gressional intervention, can be ignored absence of program guidelines, and other during state and local implementa- administrative practices causes serious tion.19 dislocation and inequities at the state level. Given the multiplicity and independence of the Lack of federal coordination and consis- actors involved in many intergovernmental tency in implementing indirect cost de- programs, it may well be "Amazing That Fed- termination procedures creates continu- eral Programs Work At All," as is argued by the ing administrative confusion for states.23 subtitle to one pioneering ~tudy.2~ Although this problem of implementation A similar catalog of red tape and administrative has been a preeminent management concern in shortcomings is provided in the 1977 reports of recent years, the administrative tension caused the Commission on Federal Paper~ork.~~ by new national initiatives was noted a dozen One result of this continuing administrative years ago, as the earlier comment of Sen. Mus- conflict and frustration is that federal and kie indicates. Yet it still persists, despite re- state-local officials now view each other more peated attempts since to cope with the man- as adversaries rather than as partners. "Cooper- agement challenge. For each step forward- ative federalism," some say, has degeuerated halting steps, in practice-new areas of con- into a "paranoid partnership" of conflict be- cern have arisen. The welfare arena, an ancient tween two levels: "them" and "us." Note the problem, remains an "administrative night- following assessments of tension in the fields mare" and a "legal swamp," according to ex- of higher education, welfare, health, food perts in the field.2' Newer regulatory stamps, and environmental protection: measures-in fields such as equal employment Environment opportunity, equal services, benefits to the [Nlow there is a difference in the kind handicapped, environmental protection, and as well as the degree of federal control. others-provoked similar criticism. Small Whereas past policy reflected a sort of towns now experience the same sort of man- "cooperative federalism" consisting in agement dilemmas once confined to major some national but also considerable cities.22 state authority, that of the present un- Recent reports prepared by the National Gov- derscores "federal" and, as one might ernors' Conference (now Association) iden- tified the following contemporary administra- expect, is distinctly uncooperative. Pollution policy is national policy, and tive issues: the states are little more than reluctant Lack of coordination among federal de- minions mandated to do the dirty partments or agencies limit the effective- work-to implement federal directives ness of programs in addressing problems often distasteful at the local leve1.25 they were designed to solve and in- Health creases the administrative burden on the In the early years of the program, states. Medicaid was clearly a state program The federal executive branch has ex- with federal support. Little control was ceeded its proper authority in some areas, exerted by the federal agencies, other encroaching on matters which are in the than what was required by statutes proper jurisdiction of the states. . . . . In effect, as Medicaid matured, it Federal regulations are prescriptive in became a federal program, but the methodology rather than oriented toward states continue to believe they have end results. sovereignty. The situation has created a wide gap in expectations and an ad- Inadequate Results: Evaluation Issues versary relationship between the fed- eral agency and the states.26 During the '1970s the question of program effectiveness joined and even superseded the Higher Education administrative challenge as a concern of inter- Already underway is a painful and governmental policymakers. In field after field wrenching change in the relationship the results of new federal-state-local assistance between the American research uni- and regulatory programs have fallen well short versity and the federal government. . . . of initial expectations. Despite the infusion of The great postwar partnership between new funds and programs, many social and eco- them turned sour after 1968. The re- nomic problems remain, and indeed now seem lationship between them that has since to many as intractable. As Charles L. Schultze, emerged is in part almost adversary. now the chairman of the President's Council of The new American university cannot Economic Advisers, has written: afford either the embrace with the fed- There is a growing body of objective eral government that characterized the evidence that government is not per- decades of affluence, or open hostility forming its new tasks effectively. The between itself and government. Re- counter-productivity of governmental quired are the terms of a new partner- regulation of transportation is well ship, more distant than that of 20 years documented. Efforts to improve the ago, less abrasive and potentially environment, while far from a failure, sterile than that of the present.2' are unnecessarily expensive and in- creasingly bogged down in Rube Welfare Goldberg regulations, legal snarls, and Welfare is virtually a policy area games between regulators and industry under seige. The welfare system works as enforcement deadlines draw near. to the satisfaction of no one. . . . [It] has While Medicare and Medicaid have become the Guadalcanal of American improved access to health care for the poor and the aged, government at- tempts to deal with rapidly escalating Food Stamps health costs have produced only bur- In October 1975, the U.S. Treasury geoning volumes of regulations and no Department released a special report. results. Professional evaluations of Illinois had the highest error rate in manpower training, work experience, eligibility determination (51.5%) for and related federal job programs usu- the Food Stamp Program of any state in ally find that their payoffs are low. the country. When asked to comment, Although the compilation of absur- James L. Trainor, director of the 11- dities perpetrated in the name of in- linois Department of Public Aid which dustrial safety often emanates from administers the program, said: suspect sources-the industries being regulated-even the sympathetic ob- I'm afraid the only response server finds it hard to recognize many that I can make is in four letter of the regulations as anything but ab- words. It's a lot of nonsense, surdities.30 but nothing the USDA (United States Department of Agricul- The "objective evidence" to which Schultze ture) or the Feds do on this refers is provided by the very substantial surprises me anymore. number of evaluative studies prepared by so- He added that the reporting require- cial science "think tanks," consulting firms, ments are "mickey mouse and stupid" and federal agencies. These have introduced and make it impossible to run an "ef- complex and rigorous analytical techniques fective program."29 into the political debate surrounding many programs. The effect has been largely dis- eradication of poverty by 1976 and adopted couraging: by far the most common findings that specific objective.35 In fact by some mea- have been "no effect" or "nothing works."31 sures, real economic poverty has been elimi- This has undercut the pragmatic consensus on nated substantially, although the distribution which many of the new national programs of personal incomes is still very unequal. As rested. In the field of education, for example, Robert H. Haveman, the former director of the one recent Rand Corporation study of federally Institute for Research on Poverty, observed, sponsored innovations concluded that these: "fewer than 5% of the nation's households re- main in income poverty when the value of in- efforts to stimulate education . . . kind transfers is taken into acc0unt."3~ change have been disappointing. Al- Yet this "success" has been realized largely though evaluators of federal programs through the expansion of income transfer pro- may disagree about questions of evi- grams (such as Aid to Families with Dependent dence and measurement, no analyst Children (AFDC), food stamps, and Medicaid) seriously contends that these programs most of which were unplanned and largely have produced the massive improve- unintentional. The "enrichment" strategy that ment in student achievement or other the poverty warriors devised, aimed at making student outcomes that were forecast the poor employable and fully productive par- during more optimistic times. The ticipants in the economic mainstream, has track record casts doubt about the ef- proven less ~uccessful.3~Henry M. Levin has fectiveness of federal intervention in observed that the Great Society programs: reforming elementary and secondary education and about the wisdom of any . . . were predicated on the view that continuing federal role.J2 the poor are poor because of their low productivities resulting from personal Such skepticism may be counterbalanced by incompetencies. By providing more noting desirable side effects: few governmental education and training it was hoped to programs lack benefits (or beneficiaries), re- raise competencies, productivities, and gardless of whether they accomplish their earnings of the imp0verished.3~ stated objectives, and the latter often are un- clear. But repeated negative findings do at least Yet his review of research findings regarding suggest a serious need for "rethinking" and more than 30 separate federal job training and "reorienting" federal involvement, as Berman education programs initiated during the an- and McLaughlin concluded in this assessment tipoverty decade indicates that "their effect on of education programs.33 the reduction of poverty was minimal."39 Much the same might be said of recent fed- The reduction in the poverty population has eral efforts in regional development, employ- been purchased instead by a substantial in- ment training, crime prevention, health care crease in federal (and state) transfer payments delivery, comprehensive planning, new com- and much higher, rather than reduced, welfare munities, mental health, or urban development. rolls. Cash payments to the poor (such as In each of these fields and others, negative AFDC) grew very rapidly in the 1960s and early performance audits suggest to critics that fed- 19709, but even more important was the expan- eral intervention has proven to be unwarranted sion of in-kind transfers such as food stamps or even undesirable. This constitutes a major and Medicaid. Between 1965 and 1975 cash as- shift in expert opinion, because a dozen years sistance expenditures targeted primarily on the ago it was widely believed that an infusion of poor rose four-fold, but in-kind benefits grew federal dollars in such fields would result in 16-fold, from $2.3 billion to $37.9 billi~n.~O substantial social progress.34 The haphazard expansion of this ill- Neither the "war on poverty" nor the "war" coordinated set of programs has left many in- on urban problems-the two principal foci of equities and deficiencies, however, and the the intergovernmental policies initiated in the potential of still greater costs. President Car- 1960s-realized their principal goals. The an- ter's proposed "Better Jobs and Income Act" tipoverty effort, begun in 1964, anticipated the contemplates additional federal outlays after 1982 estimated at between $8.77 billion and Ironically the growth in federal-urban ex- $17.2 billion annually.41 penditures after the mid-1960s may actually The attempt to revitalize urban areas, also have contributed to the fiscal crisis in some launched with great fanfare a dozen years ago, older central cities. George E. Peterson, a pub- has not prevented a continuing sense of lic finance specialist with the Urban Institute, "crisis" in our central cities. President Johnson points out that intergovernmental aid played a proclaimed that 1966 could be the year that major role in fueling the expenditure growth of "set in motion forces of change in great urban old industrial cities in the period 1965-73. areas which will make them the masterpieces This fiscal stimulation brought these com- of our ci~ilization."~~But many contemporary munities to a "high-spending plateau," leaving assessments find little evidence of success. On them vulnerable to a slowdown in aid growth the contrary, in the opinion of urbanist Louis and the economic recession. In 1975 these twin H. Massotti: forces were a source of genuine "fiscal

. . . urban policy in America, by and Such critical assessments of federal efforts in large, has been designed to be antipoverty and urban policy, as well as in therapeutic, i.e., to treat the symptoms other fields, together with everyday percep- of the urban malaise rather than to un- tions of continuing social problems, have pro- cover its fundamental causes and to duced a marked shift in the nation's mood. The engage in preventive action. It is clear "simple faiths of the early 1960s" clearly have that, since the rediscovery of the urban substantially eroded.47 Henry J. Aaron, a crisis in the early 1960s, our approach Brookings Institution economist and recent has been to develop more programs, U.S. Department of Health, Education, and create more bureaucracy, and spend Welfare (HEW) assistant secretary, has ob- more money in an effort to stem the served: tide of urban decay; and most of this If a modern day Rip Van Winkle had behavior was a political response to fallen asleep in the United States in pressure from the cities and their ad- 1965 and awakened in 1976, he would vocates. For the most part the result of have observed a striking change in the all this activity has been to develop a national mood. A country that in 1965 programmatic, bureaucratic, institu- had seemed confident of its military tionalized failure. In general, the cities strength and purposeful in its missions and their residents are less well off abroad, that was embarked on a series than they were before the flurry of of efforts to solve problems that had urban policies. Those policies have long troubled a newly ascendant been ineffective and inefficient in pur- majority of the American people and suit of the ostensible goals-the im- was dealing at last with a shadowed provement of the quality of urban lives legacy of racial discrimination, seemed and the support of cities as economic to be moving forward with resolve. But entities.43 by 1976, Americans, divided and un- Massotti has expressed concern that distres- certain about what to do abroad and sed cities, like poor individuals, show signs of fearful of military inferiority, had be- growing fiscal "dependency" on a steady infu- come equally despairing of their sion of federal urban action funds.44 Anthony capacity to deal affirmatively with Downs, a noted urban analyst at the Brookings domestic problems. At every turn Rip Institution, agrees. Downs believes that "fed- Van Winkle would encounter lamenta- eral place-oriented spending is vital to the sol- tions about the failure of all national vency of most central-city governments, and its efforts to reduce inequality and elimi- importance is rising. . . . Given these condi- nate poverty, to improve schools, to tions, the idea that central-city governments reduce unemployment and its can soon-or ever-become economically hardships; he would find a sense that self-sufficient is absurd."45 not only had past efforts failed, but future ones were also doomed by the bidding in education, health, and other incapacity of the government to act fields, and to futile efforts to regulate effecti~ely.~~ the behavior of millions of businesses, individuals, and government entities. Evaluative research itself might be chalked On the other hand, legislation enacted up as one more black mark on this record of in the past decade has strengthened policy innovation. Very few programs have the system of cash assistance and in- ever been terminated as a result of negative kind benefits for temporarily or per- findings.49 In this respect evaluation seems to manently needy households. Even be a paper tiger. Furthermore it was expected where administratively cumbersome that demonstration projects and evaluation techniques have been used-as, for studies would be the basis of an "experimen- example, to limit pollution and slow tal" approach to policy development and, like environmental degredation-signifi- laboratory experiments in the natural sciences, cant improvements can be noted. add significantly to social understandings0 But Strains in these systems have ap- in practice knowledge of what fails has greatly peared, but in all cases they can be outstripped knowledge of what works. The ex- remedied by revisions or reform of perience of the past decade has demonstrated, existing programs. A balanced judg- as Alice M. Rivlin (now the director of the ment of Great Society legislation Congressional Budget Office) has observed, would have to be mixed.S3 that "little is known about how to produce more effective health, education, and other so- Levitan and Taggart enumerate the achieve- cial service^."^^ Similarly William Gorham, the ments of social policy which, when weighed president of the Urban Institute, and Harvard accurately against more realistic standards than sociologist Nathan Glazer indicated in 1976 many critics employ, seem to them to override that there was then: the recognized shortcomings. "The fundamen- tal issue," they add, . . . less consensus on the ultimate causes of many serious urban prob- . . . is the choice of the null hypothesis. lems, and even less consensus on the Are we as a nation to assume that ef- measures that would ameliorate them, forts meeting recognized and critical than there was in 1966, or in 1956. needs are worthwhile unless proven Confidence in our ability to frame so- otherwise, or must there be unim- lutions has declined as understanding peachable evidence that they are suc- of problems has grown.S2 cessful before they can be accepted? While these critical assessments are wide- The choice of perspectives is funda- spread, some social policy analysts-Henry J. mentally political and normative. It Aaron, Sar A. Levitan, and Robert Taggart, has been demonstrated that social among them-believe that they are over- welfare programs substantially im- generalized. Partial successes, these experts prove the well-being of most benefi- argue, have been more numerous than usually ciaries and that retrenchment does has been recognized. Aaron cautions that the have serious repercussions. It has been "global view" of the critics of federal social demonstrated also that the negative programs: spillovers and costs of the Great Soci- ety's initiatives have been overrated. It . . is partly right and partly wrong, . remains, however, a matter of judg- partly clear-sighted and partly dis- ment whether the consequences of er- torted. On the one hand, critics of fed- ring on the side of generosity are con- eral red tape and regulations can point sidered more serious than results of er- justifiably to the multiplicity of small ring on the side of parsimony.S4 grants-in-aid through which Congress has attempted to compel state and Still others take the view that apparent pol- local governments to do its detailed icy failures actually reflect the half-hearted commitment to most social programs, as mea- governmental performance. One aspect of. sured by expenditures or the "incremental" na- this-the inadequate results obtained in many ture of typical reforms. Sociologists Berk and social and urban programs-already has been Rossi state this position: discussed. Another important consideration is the belief that government has become very in- [Tlhe intractability of social problems efficient, that administrative waste is exces- in the face of what appears to be all-out sive. In addition the cost issue appears to be efforts at reform may merely reflect the associated with perceived inequities in the tax timidity of policymakers. The almost system and the problem of inflation. consistent finding of evaluation re- searchers that programs work weakly, Total governmental expenditures have risen if at all, may bolster a view that social from $131 billion in 1959 to an estimated $685 problems are considerably more in- billion in 1978, or by a factor of more than five tractable to ameliorative efforts than in times. If adjustments are made for the growth fact may be the case were bolder pro- of the economy and population and changes in grams enactedmS5 the cost of living, this increase appears more modest but it is still substantial. As a percent- Yet whether the cup is half empty or half full, age of the Gross National Product, the hike was and whether greater efforts, especially fiscal, from 26.9% to 32.5%. On a per capita basis and might have been more effective, the gap be- in constant dollars, a jump from $844 to $1,604 tween expectation and results remains. Even occurred-almost a doubling.57 Levitan and Taggart concede that: More striking still is the increase in federal . . . the most pervasive shortcoming of domestic expenditures (including inter- the Great Society was its underestima- governmental programs) over this period, up tion of the scale of domestic problems from 7.7% of GNP to 15.1%.58 On a per capita and the distance to be covered in pro- and constant dollar basis, the rise was more viding even minimally for the welfare than three-fold, from $241 to $748. of all citizens. More was promised than Taxes also have risen during this period. The could be delivered, and the failure to total direct tax burden (federal, state, and local) achieve overly ambitious goals on the average family rose from 11.8% of fam- obscured the substantial progress ily income in 1953, to 17.8% in 1966, to 22.5% which was being made.56 in 1977.59Changes in federal personal income tax liabilities contributed only modestly to this This fact, perhaps more than any other, has increase over the past ten years, however; the spurred the present analytic reassessment of lion's share was accounted for by Social Secu- federal domestic programs. rity and state-local property, income, and sales tax increases. Excessive Cost and Fiscal Inefficiency The rising cost of government, therefore, has become a major concern, for both economic and Rising costs are a third aspect of the current political reasons. President Carter believes that controversy over the federal role. Indeed in the federal expenditures have grown too large in wake of the June 1978 "Proposition 13 tax re- relation to the economy, and he seeks to reduce volt" and the nationwide reaction that it governmental outlays to about 21 % of the GNP, sparked, this appeared to be the principal com- roughly the level which prevailed during ponent. Numerous proposals have been ad- 1968-74.60 Many analysts-not just fiscal vanced to constrain federal, as well as state and conservatives-have come to believe that ex- local, taxation and expenditures. Figure 1-1 cessive governmental spending and taxation illustrates the high level of public opposition hamper national economic performance by to their federal income tax payments. This stimulating inflation and reducing the incen- clearly is a potent political issue. tives to work and invest. The economic histo- At the same time-and as Figure 1-1 again rian Robert L. Heilbroner, for example, argues reveals-concern about the costs of govern- that "the effect of the growing size and scope of ment parallels a growing dissatisfaction with government policy has been to set the stage for an inflationary propensity where no such tend- The problem is that spending of the former ency had existed previously." Government character is believed by more and more citi- spending, he says, generates inflation "because zens, political leaders, and expert observers to the political motivation behind it has a stub- have substantially outstripped the latter. born inertia that contrasts with the more vol- A second source of popular discontentment atile spending behavior of the private sector."61 lies in the belief that the tax burden is not ap- Yet levels of spending and taxation, although portioned fairly. Taxpayer's groups and public important in and of themselves, do not seem to officials alike trade charges that federal taxes be the principal causes of recent public pro- are inequitable; President Carter has termed the tests. Survey studies of public opinion indicate national income tax a "disgrace." A Roper poll that fiscal waste or inefficiency is a greater conducted in May 1978, found that the public concern than big budgets and high taxes. Ac- regarded tax rate reform as far more important cording to a recent Washington Post survey, for than tax reduction. Burns Roper concluded: example, seven of every eight citizens believe In the view of the American public, the that "the way local, state, and federal govern- major problem with the federal income ments use tax money" is a greater problem . . . tax system in this country is its unfair- than "the amount of local, state, and federal ness. . . . A growing majority sees mid- taxes" paid.62 Other polls reveal that there is a dle income families as overtaxed, very widespread belief that the nation is not re- while upper income people and large ceiving its "money's worth" from its substan- businesses are seen as undertaxed. tial and steadily rising governmental outlays. . . . The public places high priority on The proportion of the population believing that tax reform to make the system fairer.65 "government wastes a lot of tax money" has risen from 46% in 1958 to 80% today (see Fig- ure 1-1). The federal government is identified In fact shifts in the tax burden have borne as the "biggest waster" of tax funds by 67% of down heavily on middle income families. Be- the populace.63 tween 1953-77 the tax payments of average in- These survey studies, moreover, continue to come families rose from 11.8% of family in- show-as they have for many years-that the come to 22.7%, an increase of 92%. During this citizenry desires greater, rather than reduced, same period the taxes of above-average income expenditures in many domestic fields. The families rose from 16.5% to 24.8%, just a 50% public thus seems willing to support a public hike. High income families fared even better.66 sector of considerable size if it feels that an Overall the tax system now is considerably less adequate return is received on every dollar progressive than it was in the past. spent. Protests about the rising costs of government In short many citizens seem to accept the also appear to be connected intimately with view of governmental spending and taxation concern about inflation, for which the govern- once enunciated by President Johnson: ment is thought to bear the brunt of responsi- bility. Figure 1-1 points up the fairly close cor- respondence between public concern over in- [Slpending by the federal government, flation and taxes: in the early 1960s, both were in and of itself, is neither bad nor comparatively low, and both have risen in the good. It can be bad when it involves period since. Shortly after the California Prop- overstaffing of government agencies, osition 13 tax revolt, 60% of a nationwide sam- or needless duplication of functions or ple described inflation as the nation's most im- poor management, or public services portant problem.6' which cost more than they are worth, This has led political commentator Robert D. or the intrusion of government into Novak to suggest that the current criticism of areas where it does not belong. It can the federal government is largely divorced from be good when it is put to work effi- traditional liberal-conservative ideological ciently in the interests of our national considerations. Instead, he believes strength, economic progress, and human compassion.* . . . the key point is that today's Ameri- can is obsessed with his inability to these programs are fragmented among cope with cancerous inflation, which four separate organizational units. is reducing his standard of living today Each program (1) involves different and threatens far worse in the future.68 federal-state sharing arrangements, different eligibility requirements, and Furthermore, as Novak adds, government is different degrees of federal adminis- widely regarded as "part of the problem in- tration; and (2) operates autonomously stead of the solution" on the inflation issue. with little coordination between the Fifty-one percent believe that the government organizational units. The lack of a is responsible for the nation's economic trou- centralized organizational structure bles, while business and labor are blamed by causes increased administrative costs only 16% and 33O/0, re~pectively.~~ and duplicate or overlapping services. Many professional economists share this as- For example, under one program sessment. Barry Bosworth, when director of the $490,000 was awarded to a hospital U.S. Council on Wage and Price Stability, district to provide countywide family stated that "government itself has become a planning services. Within the same major source of inflationary pressures, par- county, about $550,000 under another ticularly in the last decade." Federal taxes and program was awarded to two different regulatory policies add to living costs, as does organizations to provide similar family an increasing variety of "special interest legis- planning services to recipients of Aid lation," including trade restrictions and price to Families with Dependent Children. supports.70 One of these two organizations also Although the concern about governmental provided family planning services costs and inefficiency certainly extends to under a $242,000 grant from the same many matters that are wholly internal to each program funding the hospital dis- of the governmental levels, this issue obviously tri~t.~~ has a major intergovernmental dimension as well. Grants-in-aid (along with Social Security benefits) have been among the fastest growing The same report also described an early child- components of federal outlays.71 Furthermore, hood education project operated by a local although fully accurate and objective data are school district, with funds provided from four difficult to obtain, there is reason to believe separate federal agencies and programs, as well that costs in some intergovernmental programs as state and local sources. Each program had are excessive. differing guidelines, objectives, grant periods, As ACIR has emphasized in numerous re- and administrative procedures and control^.'^ ports, one major problem stems from the sheer Much of this extra administrative expense is number of specific-purpose or categorical unnecessary, and could be eliminated if more grants. The proliferation of programs serving grant programs were consolidated, stan- similar objectives and the extraordinary spe- dardized, and decentralized. The merger of cificity of numerous program efforts, all in the seven older categorical programs into the same functional area and each with its own community development block grant has administrative requirements and procedures, realized a number of management economies. results in unnecessary duplication of effort in Regulations governing the first year of the pro- applications, operations, and audits. These gram were reduced from 2,600 pages in the costs are borne to varying degrees by govern- Federal Register to a mere 25 pages. Entitle- ments at each level. This example was pro- ment applications were shortened to about 50 vided by a General Accounting Office (GAO) pages-far below the average 1,400-page appli- report: cation filed annually for their earlier categori- cal programs. As a result, application costs in Multiple funding sources and vari- staff time and dollars were reduced consid- ous administering agencies also exist erabl~.~~Although pressures for "recategoriza- for programs providing funds for fam- tion" have appeared in many block grants, ily planning services. Within HEW, grant consolidation and "blocking" still are de- Figure 1-2. Administrative Levels Used in Providing Assistance to Program Beneficiaries

OFFICES

LOCAL AGENCIES (CITIES. COUNTIES, NONPROFIT IORGANIZATIONS, ETC.)

PROJECT OPERATORS I (STATE AGENCIES. CITIES. COUNTIES. NONPROFIT ORGANIZATIONS. ETC.) I

PROGRAM BENEFICIARIES (INDIVIDUALS, CITIES, BUSINESSES, ETC.)

Source: Comptroller General of the United States, The Federal GovernmentShould But Doesn't Know the Cost of Administering Its Assistance Programs, GGD-77-87, Washingtorl, DC, US. General Accounting Office, 1978, p. 3. sirable reforms in a great many program areas. Gregg points out in particular that the federal The multiple layers of bureaucracy in inter- government reaps the fiscal returns from any governmental programs-involving, in some improvements in program administration, instances, processing at the national, regional, while state officials bear the costs. This makes state, substate, and local recipient levels-may it "very difficult for state administrators to jus- incur large and perhaps needless administra- tify spending more of their bitterly contested tive costs. Figure 1-2 illustrates the com- tax dollars to upgrade a program of the national plexities which can occur. Unfortunately not government." 78 enough is known about administrative ex- The root problem, then, is that, in inter- penses in grant-in-aid programs. However a re- governmental programs, no level bears full cent study by GAO of 72 programs found ad- administrative responsibility for the use of ministrative costs above the project operator public funds. Fiscal accountability is divided level ranging from 0.3% of available funds (for and confused. As a consequence it is widely public assistance) to 28.5% (for water supply believed that local officials "gold plate" their research grants).75State and local paperwork federal grant applications and are willing to costs, according to a study prepared for the incur costs that would be unacceptable if they Commission on Federal Paperwork, seem to were wholly financed from local tax revenues. range from about 1% to 10% of total assistance Similarly federal officials can not really be held program outlays, but generally are concen- responsible for the uses made of funds by lower trated in the 5-7% range. Altogether these may levels of government, as they can in the federal total to about $5 billion a year. Other adminis- government's own direct activities. trative costs, of course, are passed on to private Ironically there is some evidence that both individuals and businesses. If these are in- federal and local officials regard their counter- cluded, "the federal paperwork burden may parts at the other level as wasteful of public approach 50% of some program budgets," ac- funds. Political scientist Jeffrey L. Pressman cording to the study.76 describes the "image" that local officials in the The complexity of intergovernmental ar- Oakland area have of Washington bureaucrats: rangements in some fields tends to limit both A veteran local official observed that the incentive and the capacity to root out er- "the feds are concerned that the money rors, fraud, and other forms of maladministra- is spent at the proper rate. This is a tion. A recent study of the troubled Food Stamp shift-to a concern with spending Program in Illinois by political scientist Phillip money. This is a reversal of roles for M. Gregg stressed this issue. Illinois has had an us; we're normally concerned with error rate of 51.5% in eligibility determination, saving money." Another local execu- the highest in the nation, and recent estimates tive expanded on this theme, con- suggest that recipients obtain up to 15% of trasting federal and local attitudes to- their food coupons illegally, at a cost to the na- ward spending: "It's a whole shift of tional government of $25 million annually. philosophy for our more traditional Gregg writes: guys. As you know, we have a severe financial crisis in the city. We've had These are the problems of inter- to watch every dime. Now along comes governmental administration. The a federal agency and says (spend)- Food Stamp Program is a national pro- you're not spending enough, you're gram that states administer. Congress not spending fast enough. It's a real and the U.S. Department of Agriculture clash of philosophies." establish and revise extensive rules, An exasperated city councilman, to regulations, and instructions to control whom the federal government often and monitor the states' administration appeared to be giving away money for of benefits. Much of what the press no particular purpose, registered his calls the "food stamp mess" originates opposition: "Money should not be in the intergovernmental arrange- given out-it should be creative. In ment~.~~ private business, you don't dole out money just to dole it out. You might A variety of fiscal problems are associated give it away for tax deductions, but the with particular types of grant programs. The government doesn't need tax deduc- "open-ended" provisions of some of the major tions." In contrast to their high- social welfare programs (AFDC, Medicaid, so- spending federal counterparts, locals cial services) resulted in explosive cost in- see themselves as people who know creases that were virtually uncontrollable by the value of a dollar and the impor- the President or C~ngress.~~State and local tance of thrift.79 governments also have experienced difficulty constraining costs in some of these areas.83 At the same time the federal administrators Federal costs for Medicaid-originally esti- interviewed by Pressman regarded local offi- mated at just $238 million annually-have cials as more interested in hustling aid than risen to an estimated $12 billion in FY 1979, dealing with serious urban problems: while the social services program-initially Federal officials see their local coun- intended to help cut welfare rolls-became in- terparts as desiring infusions of federal stead a form of "back door revenue sharing," dollars. A federal project operator de- until a statutory ceiling was imposed in 1972. clared: "Every city official I've talked The major capital grant programs (for the to is concerned with money-the more construction of mass transit, hospitals, and the better. The only limiting factor is waste treatment facilities) may be inherently the tax rate-they can't come up with inefficient. They seem to encourage excessive the local share." But a desire for fed- capital spending, which the national govern- eral dollars is not, federal officials say, ment aids, and lower outlays for maintenance necessarily linked to enthusiasm for and operations, the costs of which are borne operating programs and solving prob- chiefly by local taxpayers.84 lems. "As a rule," said one federal rep- Critics also charge that many social programs resentative, "I don't think that city deal with matters that are not truly of national managers and certainly city councils concern. Charles L. Schultze believes that are interested in problem solving. But many categorical grants: they want money and they don't want . . . probably serve no major national to take the heat of raising it them- purpose but simply reflect the sub- selves."80 stitution of the judgment of federal legislators and agency officials for that Although this fragmentation of administra- of state and local officials about what tive responsibility among programs, agencies, specific local services should be avail- and governmental levels may be a principal able. No one can say, a priori, who is source of fiscal inefficiency in grant-in-aid the wiser. But there seems little reason programs, critics have identified many others. not to leave thls kind of judgment to The allocation of grant funds among states and state or local officials, who are much localities is another cause for concern. Few closer to the people being served, and programs are effectively "targeted" to the most much merit in consolidating these needy jurisdictions, as measured either in numerous grants into a few broad terms of fiscal capacity or substandard public groups supporting the delivery of edu- services. Instead, the overall pattern of grant cational and social services at the state outlays appears almost random, and in the past and local level, with discretion for the ten years the higher income states have ac- precise allocation of funds left to the tually tended to receive somewhat greater per recipient go~ernment.~~ capita grants than middle and even lower in- come states. Critics-President Carter among Thus the fiscal dimension of the current them-charge that political pressures, rather controversy regarding the federal government's than national needs, too often determine how domestic and intergovernmental role has mul- grants-in-aid are distrib~ted.~'The result is tiple aspects. It is concerned in part, but only that scarce resources are wasted. in part, with the size of the public sector. Equally important are questions of economic verdict is a vote of "no confidence" in recent efficiency-the value obtained for each dollar political leadership. spent. For a variety of reasons, the efficiency of This criticism applies, it should be noted, many intergovernmental programs appears to principally to the governmental elite, rather be too low. Questions of governmental cost also than to governmental institutions. Most citi- are related intimately to the problem of infla- zens still believe that the "system" could be tion and to the manner in which the tax burden made to work if better leaders are found.88 De- is allocated. spite rampant dissatisfaction, basic democratic As in other areas, of course, not all analysts values still remain fundamentally unshaken. accept the critics' charges of excessive cost and Secondly, it also seems plain that much of waste. First, it may be noted that total public the public is quite uncomfortable with the expenditures in the United States still are gigantic governmental apparatus that has been rather low in comparison to those of many erected in Washington. Although most of the other economically advanced democracie~.~~citizenry has actively supported federal inter- This nation, many believe, can well afford an vention in major domestic problem areas, many even higher level of public services and social also adhere to traditional American beliefs re- welfare programs. Other observers believe that garding limited government and individual the charges of inefficiency are greatly exagger- self-reliance. In this respect there seems to be a ated. High costs, they believe, have been con- conflict between values at the operational level fused with excessive waste. of day-to-day politics and the ideological level of fundamental values.89 In the past such Responsiveness and Accountability philosophical doubts were set aside in the name of pragmatism and national needs, but A fourth aspect of the controversy regarding the gap now seems too wide. This point has the status of American federalism concerns the been stressed by Edward K. Hamilton, the effectiveness of the representative process it- former deputy mayor of New York City, who self. Many concerned critics believe that there believes that "the more durable part of the deep has been a substantial weakening in the re- malaise now evident in popular attitudes to- sponsiveness of government and its account- ward government probably represents the price ability to the public at large. Government, they of sustained incrementalism" in the piling up believe is growing-or has grown-aut of ef- of programs-onto programs.90 He observes that: fective democratic control. The net legacy of these fits and starts This problem is perhaps less inter- is a federal "system" that bears little governmental than supragovernmental. Al- relation to the pre-1935 model or, more though each governmental level is affected to importantly, to the model that most some degree, the problems do not arise wholly Americans carry around in their from shared programs. Yet the issue is quite heads. . . . The more thoughtful have intimately connected with questions of long since abandoned hope for federalism, the transformation of federal re- simplicity, an inevitable casualty of sponsibilities in recent decades, and the re- industrialization. There is, however, a sulting increasing complexity of the system. yearning, as yet unfulfilled, for some One psychological dimension of this issue is set of consistent principles that can at revealed in Figure I- 1, as well as other opinion the same time order the meshing of poll results. Contemporary public opinion is governmental fiefs and provide a characterized by high levels of political aliena- rationale for their future evolution that tion. The percentage of the citizenry that be- promises to bear some reasonable rela- lieves that it can trust the government to "do tion to real prospects rather than to what is right" fell from a high of 77% in 1964 empty exercises in nostalgia.91 to 34% in 1976. Other polls show a substantial increase in the belief that public leaders are in- A third related point is that many citizens different to the welfare of the citizenry and that seem to believe that the processes of gov- they lack ~ompetence.~~All in all the popular ernmental expansion have acquired a momen- tum of their own, an inner dynamism that has and its aftermath could only consoli- little regard for the general welfare. The gov- date this belief-and to judge from ernment appears unresponsive to the needs and survey data, this is just what hap- concerns of ordinary citizens and taxpayers. ~ened.9~ Public authority is thought to have been vested There is ample testimony, then, that some- in self-serving minorities-"special interest thing is now seriously amiss within the Ameri- groups" and their supporters in the bureau- can political process. Suspicion rather than cracy and Congress. Thus the public sector trust is the new bond between the governors takes on the guise of a beast that must be caged, and the governed. rather than a workhorse to be led. Political sociologists Seymour Martin Lipset CAUSES and William Schneider believe that these The perceived lack of governmental account- questions of responsiveness and accountability ability can be explained in part, perhaps, sim- lie at the heart of the present political discon- ply by the psychological impact of government tent. "What bothers the public," they have con- size, distance, and complexity. As Archibald cluded, "is the apparent growth of concentra- Cox has commented, "modern government is tions of power and the seemingly cynical, simply too large and too remote, and too few self-interested abuse of that power by those at issues are fought out in elections, for a citizen the summits of government, labor, and busi- to feel much . . . sense of participation in the ne~s."~~Wisely or not, unsatisfactory social, legislative process. . . ."94 In the same vein, economic, and political conditions have been political opinion analyst Everett C. Ladd, Jr., blamed on self-seeking behavior by public offi- observes that: cials and leaders in the private sector. Political scientist Walter Dean Burnham ag- . . . some measure of demoralization in rees with this assessment and has attributed the public opinion is bound to occur in a Democratic nomination of Jimmy Carter to this democratic system when it is per- fundamental concern. Following the gov- ceived that popular wishes or expecta- ernmental expansion of the New Deal, the Cold tions are very imperfectly translated War, and especially the Great Society, Burn- into institutional response. It can never ham says, be easy in a diverse, pluralistic nation of 215 million people to achieve a high . . . the middle-American man in the measure of popular control over the street, in quite unprecedented numbers main public institutions and the con- and intensity, came to see himself as tinuing responsiveness of these in- victimized by the poor and their elite stitutions to popular wishes.g5 patrons, and victimized also by ever Yet many political analysts also believe that more pervasive, arbitrary, and im- there are sound, objective reasons for the pub- penetrable bureaucracies. The basic lic's concern.96 Ladd adds that "in our time, axioms of self-regulation, the essence control and responsiveness have proved in- of the American political value system, creasingly elusive. . . ."97 He (and many were seen to be violated daily by others) stress especially the weakening of the politicians, bureaucrats, and courts. political parties, which traditionally have The key to the drastic escalation of served as the most meaningful link between the group conflicts which spilled over into governors and the governed and as a curb on and wrecked the Democratic conven- special interests. Ladd writes that: tions of 1968 and 1972 was the perva- sive belief of millions of Americans . . . over the past decade and a half the that they had lost control over their parties have manifested a diminished own lives, that they had no leverage capability. The party system is not over the political process, and that functioning well. It is not doing a good they were the victims of the illegiti- job in performing those tasks which mate exercise of raw power. Watergate are uniquely its own. This failure car- ries with it serious consequences for that "it has been estimated that in the last few popular confidence in go~ernment.~~ years more than two thousand new lobbies have come into existence."lol Charles Peters, What are these "unique tasks" of the political editor of Washington Monthly, charges parties? For Ladd and many others the party he that: system has "exclusive custody" of the "core democratic function," . . . America is no longer a nation. It is . . . of aggregating the preferences of a committee of lobbies. In Washington, the mass public for political leadership the lobbies have taken over. Tax reform and policy choice, and converting bills turn into Christmas trees with what was incoherent and diffuse to gifts for every special interest. Defense specific, responsive public decisions. appropriations have less to do with real defense than with having some- Today, the parties simply are not thing for everyone-a military base in doing a good job in this their primary some districts, airplane contracts in area, and as a result, popular control another. and responsiveness suffer.99 And higher loyalities are out. Even Other political analysts express concern loyalty to a political party is being re- about the declining levels of electoral partici- placed by a narrower loyalty to one's pation. Nearly 70 million eligible voters failed interest group, with political power to cast ballots in the 1976 Presidential election shifting. . . from the parties to the and over 100 million in the 1978 midterm political action committees that repre- election. Curtis B. Gans suggests that: sent special interests.1°2 . . . the central and perhaps the greatest The increasing intensity and fragmentation single problem of the American polity of these contending interests appears to some today is. . . the degree to which the to be the motive force for governmental expan- vital underpinnings of American de- sion, and has produced "overload" within the mocracy are being eroded. The legiti- political arena. A report to the Trilateral Com- macy of a democratic leadership and mission on the "governability of democracies" the health of the democratic process states the issue in these terms: depend squarely on the informed and Recent years in the Trilateral coun- active participation of the electorate. tries have seen the expansion of the Yet the level of political participation demands on government from indi- is now sinking and the decline seems viduals and groups. The expansion irreversible.100 takes the form of: (1) the involvement As the political importance of political par- of an increasing proportion of the ties and voting participation has seemed to population in political activity; (2) the wane, that of organized lobbies and gov- development of new groups and of ernmental bureaucrats has appeared to grow. new consciousness on the part of old Neither of these sets of actors, of course, is di- groups, including youth, regional rectly accountable to the public-at-large. groups, and ethnic minorities; (3) the Interest group lobbying and new gov- diversification of the political means ernmental activities have seemed to increase in and tactics which groups use to secure tandem. Every program, every protective regu- their ends; (4) an increasing expecta- lation, every tax loophole appears to have ac- tion on the part of groups that govern- quired its coterie of organized beneficiaries. ment has the responsibility to meet Although there is no accurate tabulation of the their needs; and (5) an escalation in number of such organizations, many political what they conceive those needs to be. observers-journalists, public officials, social The result is an "overload" on gov- scientists-agree that they are rising in number ernment and the expansion of the role and influence. Columnist Richard Rovere says of government in the economy and so- ciety. . . . This expansion of gov- velopment and unintended social ernmental activity was attributed not costs.106 so much to the strength of government Bureaucrats and interest groups are often in- as to its weakness and the inability and terconnected. Robert Bork, a professor of law unwillingness of central political lead- and formerly the U.S. Solicitor General, attrib- ers to reject the demands made upon utes to these ties both excessive governmental them by numerically and functionally spending and a fundamental breakdown in the important groups in their society.1°3 representative process: Sociologist Daniel Bell describes the same At this point, we must know that phenomenon as the "revolution of rising enti- representative government is not tlements." The focus of American social con- working terribly well. At the national flict, he believes, has shifted from the private to and state levels, we have the problem the public sector: of intense interest groups coupled with The major conflicts, increasingly, are segments of the bureaucracy who have not between management and labor interests in particular programs and within the framework of the economic press for one program at a time. enterprise but between organized Each interest group has its interest. interest groups claiming their share of The rest of us are' generally unhappy government largess. The political about the growth of spending, but we cockpit in which these battles are can't focus on any one particular pro- fought is the government budget.1O4 gram, so we keep losing. The overall result is one that nobody wants. Power also seems to be exercised increas- Thus, there are structural defects in ingly by those within government itself. The representative democracy.107 initiative in many program areas has shifted to governmental bureaucrats and allied profes- Similar problems though, in a somewhat sionals, according to Samuel H. Beer, a profes- different guise, have been noted by public offi- sor of government at Harvard. He contends cials themselves. Many attest to their increas- that: ing inability to meet the ever-growing political demands placed upon them. Each of the major . . . government itself-the public decisionmaking centers appears increasingly sector-has become such a large pro- inadequate to its tasks. portion of the total society that it gen- Several members of the Congress have been erates within itself powerful forces outspoken on this point. Former Sen. James A. leading to further government action. Buckley (R-NY) believes that the Congress Centralization . . . breeds further cen- simply cannot cope effectively with its exten- tralization. 1°5 sive responsibilities in the new federal system. "The Congress itself," he says, Public agencies and programs, Beer believes, . . .represents the major limitation on . . . continually threaten to break loose the number of responsibilities that from the purposes of public policy and the federal government can effec- to follow their own chaotic and unin- tively discharge. This is not an in- tended course. In the days of laissez- dictment of the men and women faire, men rightly feared the unregu- who currently constitute the Con- lated economy as the source of coer- gress. It is merely a recognition of cive social forces. Today, the pol- the limitations inherent in the ity. . . has joined and in some coun- legislative function. These lim- tries superseded the economy as the itations cannot be overcome by re- machine that threatens to master man. working organization charts and Bureaucratization matches indus- procedures. It is in the nature of a trialization as the source of blind de- legislative body that each member is required to make a judgment on The subcommittees push out legis- each in the entire spectrum of is- lation, the full committees pass it on, sues and concerns that comes to the and the Rules Committee sends it on to floor for a vote. the floor.' We're swimming weakly against a tide of legislation. Some of The simple fact of the matter is the younger members are so disturbed that the Congress has involved itself about the amount of legislation we're (and therefore the national govern- passing that they're starting to sound ment) in so vast an array of con- like old curmudgeons.110 cerns that no one member can any longer concentrate on and master Many agree that the number and complexity of more than a small fraction of the issues has shifted responsibility away from the legislative business that comes be- "average" member of the Congress and toward fore it. Members of Congress have the issue specialists and staff experts, includ- become so embroiled in the myriad ing Congress' own. Sen. Daniel P. Moynihan details once thought to be the sole (D-NY) admits to finding much contemporary province of state and local au- legislation incomprehensible. Most laws and thorities (e.g., employee safety regulations, he says, standards in the corner drugstore) that they haven't the time to truly . . . are probably comprehensible to the study or understand such uniquely committee staff of the Congress, who national concerns as the need for a draft the legislation which the regula- comprehensive energy policy or the tions carry out. But I know it to be true consequences of the growing imbal- in my own case, and I cannot suppose I ance between Soviet and American am alone, that most legislative lan- arms. guage is incomprehensible to me. I de- pend utterly on translators. . . . The Demands on the time and atten- end result of all of this is surely pre- tion of the members have grown to dictable, almost, again, tautological: a the point where they exceed the great falling away of democratic, elec- Congress' collective capacity to op- tive government.ll1 erate with any degree of delibera- tive thought. . . . As a result of these Many others describe the "overload" prob- pressures, too much of the work of lem in terms of the intensity of group pres- the Congress is now dominated by sures. "Representative government on Capitol professional and highly partisan Hill is in the worst shape I have seen in my 16 staffs. Too many of its laws are years in the Senate," Sen. Edward M. Kennedy poorly conceived. Too many essen- (D-MA) recently stated. tially legislative responsibilities are delegated to bureaucratic rulemak- The heart of the problem is that the ers who too often end up fashioning Senate and the House are awash in a and imposing their own independ- sea of special interest lobbying and special interest campaign contribu- ent policies. lo8 tions. . . . We're elected to represent all Other legislators of varying ideological per- the people of our states and districts, suasion have echoed components of Buckley's not just those rich enough or powerful criticism. Some, including Rep. Edward Patti- enough to have lobbyists holding son (D-NY) complain of "the incredible over- megaphones constantly to our ears."2 load that we deal with every day. There's no Others stress the psychological impact of the way that a member of this body can honestly new group demands. "The single-interest con- say that he fully understands what he's voting stituencies," says Sen. Wendell Anderson on."lo9 Another (an unidentified Democrat) has (D-MN) "have just about destroyed politics as I commented, knew it. They've made it miserable to be in office-or to run for office-and left me feeling charged with representing the broader it's hardly worth the struggle to survive."113 public interests-the President of the Similar observations could be made about the United States, Governors, and executive branch and the White House itself, Mayors-and those such as budget of- where identical pressures are felt. Joseph A. ficers who assist political executives in Califano, Jr., when Secretary of HEW, described a general staff capacity. . . . Hostility the pattern of "molecular politics" dominant in to political executives is shared and Washington: encouraged by committees and sub- committees of the Congress and state Political party discipline has been legislatures which are as preoccupied shattered by the rise of special interest as the administrators with protecting politics in the nation's capitol. Wash- and promoting the purposes of the in- ington has become a city of political dividual programs under their respec- molecules, with fragmentation of tive jurisdictions. The bias against power, and often authority and respon- politicians does not extend to legis- sibility, among increasingly narrow, lators who often are eager and power- whats-in-it-for-me interest groups and ful allies in the fight against the com- their responsive counterparts in the mon enemy.115 executive and legislative branches. This is a basic-perhaps the basic- The byzantine linkages of the present inter- fact of political life in our nation's governmental system make these dilemmas capit01."~ more serious than they were a dozen or so years ago, when they were first highlighted. Indeed the nation may now have reached the situation THE IGR COMPONENT foreseen by William G. Colman in 1962, where: The intergovernmental system reflects, and substantially contributes to, each of these . . . grants-in-aid are an impenetrable political tendencies. Narrow-purpose categori- jungle of legal, financial, and political cal programs have long been the preferred in- and professional interlacings which strument of special interest lobbies; hence, will sorely try the minds of officials at these have multiplied as the number of groups all levels-Congressmen, Cabinet has grown. Many analysts have described the members, Governors, Mayors, and tendency of such programs to be protected and county officials-in trying to maintain expanded by "iron triangles" composed of any kind of rational legislative and Congressional committees, interest groups, and administrative direction of the areas of program bureaucrats, and by "guilds" or "ver- government affairs in which grants tical functional autocracies" which include play so large a part.*16 similar specialists at the state and local level. Ties of accountability to the public through Edward K. Hamilton, in a contemporary elected and appointed "generalists" thereby commentary, describes the problem in both its are reduced greatly. Harold Seidman, a public official and electoral dimensions: administration scholar and a former U.S. budget official, describes grant politics in these The extended initiation and con- terms: trol linkages in so large and diverse a [federal aid] "system," together with Federal "professional" agencieir state the long lead times implied by the and local counterparts may have their necessity to coordinate so many un- differences, but they are as one when it synchronized units, has greatly re- comes to combating attempts by out- duced the influence of elected offi- siders to encroach upon their fiefdoms. cials upon real-world outcomes, and Outsiders include lay administrators severely diluted the capacity for de- and competing professions, but the liberate and predictable influence by most feared are elected executives any individual or faction. This prob- lem has been compounded in recent tions of political legitimacy-the ultimate years by a marked tendency toward "consent of the governedw-are being badly shorter average tenure in elective and strained. These concerned critics believe that appointive office at all levels. . . . the linkages of' political accountability and The commingling of governmental responsiveness-in particular, the party levels seems to have severely at- system-are no longer performing their tasks tenuated the link between the intent adequately. Power, they say, has shifted from of voters and the postelection se- the people and their elected representatives to quence of events, particularly at the interest groups and bureaucrats. local level. The "ambassadorial" Rising group demands and the ever-growing function of local elected and ap- breadth of federal responsibilities has pro- pointed executives (to the state and duced, according to some of these assessments, national capitals) is often as invisible a serious problem of political "overload." to the electorate as it is critical to There is, indeed, a fear that the nation is be- meaningful action. In general, candi- coming increasingly "ungovernable." dates' programmatic platforms con- The fragmentation of federal aid programs, tinue to ignore the necessity of inter- and the complicated linkages of inter- governmental cooperation to effect governmental operations, contribute signifi- any major change, so that voters have cantly to this problem. Neither public officials little sense of how many cooks are nor the general public can comprehend fully required to produce edible broth.l17 the new complexities of domestic public pol- icy, or adequately control (or even check) the Although the focus of most analyses has been myriad forces that have generated it. at the Washington level, evidence of "over- load" also exists in some urban communities, fostered in part by the expanding array of in- THE FEDERAL ROLE IN tergovernmental programs. Political scientist THE FEDERAL SYSTEM: Douglas Yates argues that: THE NEED FOR REASSESSMENT . . . the legacy of a half-century of fed- Four Problems and the eral and state policy has been to make Status of Federalism city government bear even more func- tions, programs, and responsibilities There are, in summary, four strong reasons for administrative control, regulation, for concern about the present status of Ameri- and evaluation. Moreover, the city has can federalism, and especially the unpre- been the cockpit of American social cedented role of the national government that policy where the different levels of has evolved since 1960. These pertain to prob- government try out and fight over lems of administration, effectiveness, cost, and urban problem solving strategies. The accountability. Each has been identified as an impact of this intergovernmental con- area of serious shortcomings by concerned test has been to increase the overload scholars, public officials, and the citizenry at at the center of urban policymaking in large. Together these four problem areas city hall.118 suggest the need for a thoroughgoing reconsid- Large cities, he believes, are increasingly "un- eration, reaffirmation, or redefinition of public governable." purposes and responsibilities within the American system. The problems identified, however, can be re- SUMMARY garded as symptoms, not root causes. What are The present concern about the role of the the more fundamental issues? On this question federal government extends to questions even no consensus emerges. There are almost as more fundamental than those of administra- many interpretations as there are interpretors. tion, policies, and finance. It includes, on the Yet, the contributing factors, as variously part of many observers, a fear that the founda- identified, can be classified, and include: over-expectation and under-effort in In Buckley's mind the solution is straightfor- dealing with chronic social problems; ward, and is implied in the diagnosis. There is the assumption of governmental respon- an "urgent need," he believes, "to rediscover sibilities for meeting complex human or the principles of federalism, and to redefine, in societal needs in areas where the knowl- the light of modern experience, the appropriate edge of effective policies is lacking; limits of federal authority."lZO This assertion represents a serious challenge inadequate recognition of the limitations to both those who may be inclined to accept of administrative agencies-especially and those who reject it. Its importance is networks of administrative agencies-in performing complex and sensitive new suggested by the fact that each of the difficul- ties found in contemporary governance can be tasks; correlated in some degree with the potential an inability to define objectives and an advantages that scholars sometimes have excessively fragmentary, unplanned ap- claimed for a federal system. Federalism has proach to the formation of public policy; been said to provide a substantial degree of and administrative decentralization, making the improper design of many public pro- national government more manageable; it per- grams, including inadequate attention to mits experimentation in order to devise the expected costs as well as benefits and most effective governmental policies; it in- possible unintended consequences. creases efficiency by matching public activities more closely to real public and areal needs; and Each of these interpretations has its advocates. it fosters high levels of participation and a What necessarily is of concern to ACIR, how- sense of effective democratic citizenship.lZ1 ever, is the view now expressed with renewed Yet Sen. Buckley's statement does not com- frequency that changes in-or the decay of- mand unanimous assent. On the contrary it our system of federalism are a fundamental touches the heart of most current political con- cause. This position, for example, has been troversies. The appropriate allocation of fed- stated clearly by former Sen. James Buckley: eral, state, and local functions has been, in fact, a preeminent political and theoretical issue The major complaints about gov- since the founding of the Republic. It was ernment that we hear these days- practically buried during the period 1960-76, complaints about the size and com- but now has reemerged as a (if not the) central plexity and cost of the federal estab- question on the nation's agenda of major un- lishment, the arrogance and ineffi- finished business. ciency of runaway bureaucracies, the growing apathy of the American The Constitutional Dimension public-are all in significant degree manifestations of a single phenome- At the Constitutional level there is substan- non: the withering away of a system of tial agreement among informed scholars. Few federalism in which a hierarchy of question the assertion that the Constitutional governmental responsibilities is foundations of federalism, as traditonally un- clearly recognized and respected. derstood, no longer bear much direct relation The resulting proliferation of federal to questions of public policy. Questions of gov- powers on the one hand, and the sub- ernmental responsibility have been shifted ordination of state and local govern- from the judicial to the legislative arena. Those ments to federal edict on the other, have created institutional stresses that who condemn or applaud this tranformation agree to its reality. Indeed many believe it oc- cannot be fully resolred simply by curred some time ago, in the midst of the Great hiring efficiency experts to reorder the Depression and the years following. By the way the executive and legislative early 1950s a leading scholar could write: branches are going about their current busines~."~ I consider the Constitutional issue set- tled against the states. The national posed by the Bill of Rights and other government can now go a long way specific limitations spelled out in the under the interstate commerce clause Constitution itself. From a government and the general welfare clause; and by of delegated powers it has become a grants-in-aid it can buy whatever ad- sovereignty with jurisdiction no differ- ditional authority Congress believes ent from that of the nation from which desirable. The future of the states rests it seceded in 1776.126 not on Constitutional protection but on political and administrative decisions. Although these fundamental legal issues . . . The issues of the future in this area were largely disposed of four decades ago, the are consequently political and admin- full policy implications were not apparent until istrative in nature.122 the 1960s. It was during this period, as James L. Sundquist has written, that: The 1955 report of the Kestnbaum Commission echoed this reality: . . . the American federal system en- tered a new phase. Through a series of The organs of the national government dramatic enactments, the Congress as- determine what the Constitution per- serted the national interest and au- mits the national government to do and thority in a wide range of governmen- what it does not, subject to the ulti- tal functions that until then had been mate consent of the people. And under the province, exclusively or predomi- present judicial interpretations of the nantly, of state and local governments. Constitution, especially of the spend- The new legislation not only estab- ing power and the commerce clause, lished federal-state-local relations in the boundaries of possible national ac- entirely new fields of activity and on a tion are more and more subject to de- vast scale but it established new pat- termination by legislative action. In terns of relationships as well. brief, the policymaking authorities of the national government are for most purposes, the arbiters of the federal system. 123 The dramatic expansion of the range of concern of the federal government Most contemporary students agree.124Political in the 1960s can be seen as the culmi- scientist Michael D. Reagan asserts that: nation of a historic trend-the final [Wle have arrived at a point in our burial, perhaps, of traditional doctrines constitutional history when no sphere of American federalism that, for a long of life is beyond the reach of the na- time, had been dying hard.12' tional government. Since we no longer This trend, which Sundquist declared in 1969 question the Constitutionality of fed- to be "irreversible," clearly has continued to eral acts, the deciding factor becomes the present time. one of policy rather than legality.125 Similarly Philip B. Kurland, a specialist What Can Be Done? Constitutional law, has concluded that: The spending power and the com- This substantial agreement on legal facts and merce power as construed by the Su- trends in no way implies agreement on possible preme Court have afforded national solutions. No single course of action com- government hegemony over all affairs mands unanimous assent. In particular many of the citizens and residents of this analysts believe that it would be impossible nation. The national government is and inappropriate to turn back the clock of free to regulate everything, except that federalism to the patterns of an earlier and it must conform to the Supreme Court's much simpler era. Both politically and analyt- interpretation of the limitations im- ically any such attempt would confront obsta- cles that many have judged to be quite insuper- before the Constitution, a statute of able. 1785, reinforced by the Northwest Or- First, it seems unlikely that a resort to the dinance of 1785, gave grants-in-land to nation's first and fundamental principles can the states for public schools. Thus the shed much light on current problems. The national government was a prime force founding fathers did not-and could not- in making possible what is now taken have contemplated most of the issues involved to be the most local function of all, in governing an urbanized, industrialized, and primary and secondary education. increasingly post-industrial society of conti- More important, the nation, before it nental dimensions and possessed of important was fully organized, established by international obligations. On the contrary, as this action a first principle of Ameri- Edward K. Hamilton has observed, "The fram- can federalism: the national govern- ers did not construct a governmental ment would use its superior resources framework for a predominantly urban nation;" to initiate and support national pro- indeed, they "would be uniformly aghast at the grams, principally administered by the living patterns which characterize 20th Cen- states.130 tury America."lZ8 James L. Sundquist remarks that: Contemporary theories of government, like those of the founding fathers, also seem in- . . . an ideology based on invoking the adequate to the present task. Alan K. Campbell, distant past gives us few workable an- a distinguished educator and currently the Di- swers in dealing with the everyday rector of the Office of Personnel Management, problems of federalism. It simply is not has warned that: useful to engage in Constitutional exegesis, asking ourselves, "Now, how [Tlhere is no internally consistent did the founding fathers instruct us, theory which can be used to guide two centuries ago, to handle this 20th either the placement of functions or Century problem?" . . . [Wlhat did the the design of a system in which to founding fathers have in mind re- place those functions. . . . Taken to- garding the control of deadly indus- gether the criteria drawn from political trial chemicals that did not then exist? science and economics provide little How did they intend for nuclear wastes consistent guidance for drawing gov- to be disposed of? We are without in- ernmental boundaries or assigning structions. We are on our own.129 functions among the levels of govern- ment.131 Others take the view that the American sys- tem never approximated the traditional "layer Political realities also seem to impose a very cake'' model of "dual federalism" or divided substantial constraint. Morton Grodzins (and (and largely compartmentalized) respon- many others) believed that attempts to "un- sibilities. This position was expressed most wind" the complex system of intergovernmen- forcefully by the late Morton Grodzins and a tal relations are necessarily foredoomed. Past former student, Daniel J. Elazar, who now di- American experience seems to conform to this rects the Center for the Study of Federalism at assessment. Four attempts to separate the na- Temple University. To these scholars, the tional and state spheres over the years 1947-59, sharing of domestic responsibilities has a culminating in the work of the Joint Federal- lengthy history. Grodzins wrote: State Action Committee (JFSAC), all proved unsuccessful.~32 The American federal system has The JFSAC-composed of ten Governors and never been a system of separated gov- seven high-ranking federal officials-after two ernmental activities. There has never years of concerted effort was able to propose been a time when it was possible to put only two federally aided activities for return to neat labels on discrete "federal," the states: a program of vocational education "state," and "local" functions. Even and one for municipal waste treatment plant construction. (Even these proposals were not ward; at least, its psychological results, accepted by the Congress.) In other areas the especially in an age of crisis, are de- Committee was stymied by the inability of its pressing to a democracy that needs the members to commit their governments to par- drama of positive achievement to re- ticular actions and by divergent views among tain its faith.134 the Governors themselves, as well as opposi- Similarly, a more recent theorist, William H. tion from local governmental officials and vari- Riker, has argued that the federal "bargain" is ous specialist professional groups. Grodzins not worth keeping, because federalism is de- has explained why: structive of both majority and minority rights, [Wlhere national programs exist, any without any compensating virtues. Writing in attempt to give them to the states is a 1964, Riker concluded that "if in the United threat to recipients of services, and States one disapproves of racism, one should therefore, a threat to the Governor's disapprove of federali~m."'~5 elected position. A Governor may in This charge that federalism is fundamentally good faith promise that his state will out of character with contemporary social, eco- assume a federal function, but there is nomic, and political requirements often is re- no guarantee that he can fulfill his peated. For such reasons a respected contem- promise because even when a Gover- porary student, Richard H. Leach, has com- nor and a majority of the state legisla- mented that: ture are members of the same party, he It is very possible that today, were cannot control the party members in the choice still open, the United States the legislature and therefore cannot would not opt for federalism. America guarantee passage of the necessary today is virtually a national state in legislation. This accounts for the Gov- terms of economics, culture, educa- ernors' reluctance. They ask: "Why tion, athletics, labor unionization, em- alienate a significant fraction of vot- ployer organization, and most of the ers ?" 133 other indices that could be used to Grodzins thought that efforts of this kind could measure nationalization. That it would be effective only if the political parties were seem desirable now to begin a nation more disciplined and united than they actually with a pledge to small constituencies are. and a division of power in their behalf Finally many experts see little merit in any is d0ubtful.*3~ attempt to rationalize or reorder the federalist structure of American governance, and espe- The Present Need cially to reserve any areas of full autonomy to the states or localities. Dissatisfaction with the Although each reservation cataloged above is complexity and delays inherent in the tradi- important and, to many, extremely persuasive, tional division of sovereignty was expressed by such arguments cannot dispose of the issue. Harold Laski four decades ago. "The epoch of The inadequacies of federalist theory and the federalism is over," he said. Federalism: serious political hurdles must be weighed against the rampant dissatisfaction with the . . . is insufficiently positive in actual performance of the present inter- character; it does not provide for suffi- governmental system. cient rapidity of action; it inhibits the Most important, perhaps, has been the sub- emergence of the necessary standards stantial shift in the tone and character of the of uniformity; it relies upon compacts federalism debate as a consequence of the ex- and compromises which take insuffi- perience of the past dozen or more years. Until cient account of the urgent category of the mid-1960s the advocates of a more exten- time; it leaves the backward areas a re- sive federal role could point a stern finger at straint, at once parasitic and poison- the shortcomings of state and .local govern- ous, on those which seek to move for- ments, at the seriousness of domestic problems and the very limited national responses to Other organizations that have recently them. In the late 1970s many of the domestic examined major problem areas in domestic problems still remain, and a new generation of policy have reached similar conclusions. The critics is quick to point up the inadequacies of final report of the Commission on Federal Pa- the extensive range of federal regulatory and perwork indicated that paperwork and red tape assistance programs. are "out of control" in part because of "new so- Furthermore, given the tensions in the sys- cial goals." More precisely the report indicated tem and the rising level of public discontent, that "government is involved in everyone's life glib references to a "sharing" of respon- and work to a degree never before known be- sibilities, to the "partnership" of governments, cause of our developing social goals in educa- no longer provide an adequate touchstone for tion, social security, welfare, health, and busi- evaluating intergovernmental activities. ness regulation."138 The Paperwork Commis- Exactly what is to be shared, and precisely how sion's report, FederallStateLocal Cooperation, the sharing is to occur, have been found to be identified as a "root cause" of much red tape matters of considerable importance. and paperwork within the intergovernmental Present circumstances suggest the need for a system the "concurrent jurisdiction of the fed- thoroughgoing reassessment of the status of eral level and the state level over the lives of American federalism. It seems unlikely that citizens within their respective geographic any of the intergovernmental shortcomings areas." It suggested the need for a: cataloged here will be resolved easily, or by minor tinkering with the details of federal ad- . . . study to establish criteria for the ministrative practice. This, indeed, was a major degree of federal involvement appro- conclusion of the 14-volume study of the priate in assistance activities, taking grant-in-aid system completed by ACIR in into account such factors as the ulti- 1978. The findings of that comprehensive re- mate user of the assisted activity, the port indicated the necessity for the President amount of federal funds involved, and and Congress to provide for: whether the assisted activity is essen- tially state or local in character, or has a reexamination of federal, state and local interstate or national imp1i~ations.l~~ roles in, and contributions to the princi- pal functional areas of public policy, in- The White House Conference on Balanced cluding assessments of the desirability of National Growth and Economic Development, fully nationalizing some functions while which brought to Washington 500 citizens and reducing, eliminating, or forestalling state-local government officials in early 1978, federal involvement in others; identified numerous inadequacies in federal an assessment of the interrelationships policies and management. Although the Con- among the full range of programs in each ference did not make specific recommenda- policy field; tions, its delegates in workshop sessions indi- A consideration of the possibile use of cated the need for a "reassignment of fiscal instruments other than grants-in-aid to functions" and new system of "fair and flexible realize national objectives.137 federalism," including greater decentralization within the federal system, the assumption of This recommendation contemplates the possi- greater responsibility by state governments, bility of far-reaching changes in the present and the assumption by the federal government system of intergovernmental relations, without of welfare and Medicaid costs.140 specifying the precise direction. In this study Finally, Congress itself recognized this same the Commission focuses on this critical ques- need to reassess the federal system when it tion of direction. mandated ACIR to prepare the present study. FOOTNOTES Program Failed, Washington, DC, The Urban Institute, 1972, p. 84. la Ibid., p. 93. I9 Jerome T. Murphy, "Title I of ESEA: The Politics of Implementing Federal Education Reform," Harvard Commission on Intergovernmental Relations, The Educational Review, 41, February 1971, p. 60. Final Report of the Commission on Intergovernmental 20 Jeffrey L. Pressman and Aaron B. Wildavsky, Im- Relations, House Document No. 198, 84th Cong., 1st plementation: How Great Expectations in Washington Sess., Washington, DC, U.S. Government Printing Of- Are Dashed in Oakland; Or, Why It's Amazing That fice, 1955, p. vii. Federal Programs Work At All, This Being A Saga of Ibid., p. 6. the Economic Development Administration as Told Advisory Commission on Intergovernmental Relations By Two Sympathetic Observers Who Seek To Build (ACIR), Summary and Concluding Observations: The Morals on a Foundation of Ruined Hopes, Berkeley, Intergovernmental Grant System: An Assessment and CA, University of California Press, 1973. Proposed Policies, A-62, Washington,. DC, . U.S. Gov- 21 A staff study prepared for the Subcommittee on Fiscal ernkent printing office, 19781 pp. 65-78. For a Policy of the Joint Economic Committee, Studies in somewhat parallel discussion of changes in the major Public Welfare, Paper No. 5, Part 1, Issues in Welfare political institutions during this period, see Anthony Administration: Welfare-An Administrative Night- King, ed., The New American Political System, mare, 92nd Cong., 2nd Sess., December 31, 1972; and Washington, DC, American Enterprise Institute for Kirsten A. Gronbjer, Mass Society and the Extension Public Policy Research, 1978. of Welfare: 1960-1970, Chicago, IL, The University of * ACIR, A-62, op. cit., pp, 67-68. Chicago Press, 1977, pp. 141, 143. "UR, Fiscal Balance in the American Federal System, 22 J.C. Doherty, "Problems with 'The Feds': An Over- A-31, Washington. DC, U.S. Government Printing Of- view," Small Town, July 1978, pp. 4-9. fice, 1967, Vol. I, p. 151. 2%ational Governors' Conference, Roadblocks to Effi- * ACIR staff tabulation for January 1,1978. cient State Government: A Sampling of the Effects of 'Office of Management and Budget. Special Analysis: Federal Red Tape, Washington, DC, National Gover- Budget of the United States Government: Fiscal Year nors' Conference, 1976, p. 2. See also, Vol. 2, Agenda 1979, Washington, DC, U.S. Government Printing Of- for Intergovernmental Reform, issued February 1977. fice, 1978, p. 184. 24 Impact of Federal Paperwork on State and Local Gov- 'For an overview of this legislation, see Murray L. ernments: An Assessment by the Academy for Con- Weidenbaum, Business, Government, and the Public, temporary Problems: A Report to the Commission on Englewood Cliffs, NJ, Prentice-Hall, Inc., 1977, pp. Federal Paperwork, Washington, DC, U.S. Govern- 3-23. ment Printing Office, 1977; and FederallStatelLocal ACIR, Categorical Grants: Their Role and Design, Cooperation: A Report of the Commission on Federal A-52, washington, DC, US. Government Printing bf- Paperwork, Washington, DC, US. Government Print- fice, 1978, Chap. VII. ing Office, 1977. lo For summariei and assessments, see Archibald Cox, 25 James E. Krier and Edmund Ursin, Pollution and Pol- The Role of the Supreme Court in American Govern- icy: A Case Essay on California and Federal Experi- ment, New York, NY, Oxford University Press, 1976; ence with Motor Vehicle Air Pollution, 1940-1975, Philip B. Kurland, Politics, the Constitution, and the Berkeley, CA, University of California Press, 1977, p. Warren Court, Chicago, IL, The University of Chicago 297. Press, 1970; and Martin Shapiro, "The Supreme Court: 26 Beverlee A. Myers, "Health Care for the Poor," Pro- From Warren to Burger," in King, op. cit., pp. 179- ceedings of the Academy of Political Science, 32, No. 211. 3, 1977, pp. 76-77. l1 ACIR, Changing Public Attitudes on Governments and 27 Steven Muller, "A New American University?" Taxes: 1978, S-7, Washington, DC, U.S. Government Daedalus, 107, Winter 1978, p. 31. Printing Office, 1978, p. 5. 2a Tim Shay, "Organizational Innovation in Welfare, Vo- I2 ACIR, Improving Federal Grants Management, A-53, cational Education, and Relocation: A Study of Washington, DC, U.S. Government Printing Office, Grant-in-Aid Programs in Urban Areas," paper pre- 1977, Chap. I. See also James L. Sundquist, Making sented at the 10th Annual Regional Sciences Conven- Federalism Work: A Study of Program Coordination at tion, 1978, pp. 38-40. the Community Level, Washington, DC, The Brook- 29Phillip M. Gregg, "Food Stamp Administration and ings Institution, 1969, Chap. I. Reform: The Intergovernmental Perspective From 11- I3 Sen. Edmund Muskie, "The Challenge of Creative linois," paper presented to the 39th National Confer- Federalism," Congressional Record, Vol. 112, No. 52, ence of the American Society of Public Administra- March 25, 1966. tion, Phoenix, AZ, April 9-12, 1978, p. 1. Graham T. Allison, Essence of Decision: Explaining 30 Charles L. Schultze, The Public Use of the Private the Cuban Missile Crisis, Boston, MA, Little Brown, Interest, Washington, DC, The Brookings Institution, 19.71, p. 265. 1977, p. 4. IS Walter Williams and Richard F. Elmore (ed.), Social For a summary of much evaluation research, see James Program Implementation, New York, NY, Academic E. Prather and Frank K. Gibson, "The Failure of Social Press, 1976, p. xxi. See also the special issue on im- Programs," Public Administration Review, 37, plementation of Policy Analysis, 1, Summer 1975, SeptemberlOctober 1977, pp. 556-63. edited by Williams. 32Paul Berman and Milbrey McLaughlin, "Rethinking l6 See Morton H. Halperin, Bureaucratic Politics and the Federal Role in Education" (p-6114), Santa Foreign Policy, Washington, DC, The Brookings In- Monica, CA, Rand Corporation, 1978, p. 1. stitution, 1974. "'bid., pp. 2, 17, 18. "Martha Derthick, New Towns In-Town: Why A Federal 34 See Alice M. Rivlin, Systematic Thinking for Social Action, Washington, DC, The Brookings Institution, Examined," Social Problems, 23, February 1976, p. 1971, pp. 68-69. 339. 3s See ACIR, A-53, op. cit., p. 52. 56 Levitan and Taggart, op. cit., p. 290. 36Robert H. Haveman, ed., A Decade of Federal An- 57 ACIR, Significant Features of Fiscal Federalism: tipoverty Programs: Achievements, Failures, and Les- 1978-1979, M-115, Washington, DC, U.S. Govern- sons, New York, NY, Academic Press, 1977, p. 18. Es- ment Printing Office, May 1979, p. 9. timates do differ. Those of the Congressional Budget 58 Ibid.. P. 10. Office suggest that 8.3% of all families remain in pov- 59 lbid., P. 31. erty after inkind transfers are considered. In 1965 6'JEc~n~micReport of the President: January 1978, 19.1% of the nation's families had incomes below the Washinnton, DC, U.S. Government Printing Office, poverty level. See Congressional Budget Office, Pov- 1978, py 86. See also the Economic ~e~ort,-January erty Status of Families Under Alternative Definitions 1980, p. 104. of Income, Washington, DC, U.S. Government Printing 61 Robert L. Heilbroner, "Reflections: Boom and Crash," Office, 1977. On the other hand there has been little The New Yorker, August 28, 1978, pp. 57-58. The reduction in poverty as measured by relative rather evidence on this point is by no means conclusive, than the official absolute standards. See Robert D. however. For a discussion and criticism, see Herbert Plotnick and Felicity Skidmore, Progress Against Stein, "Spending and Getting," Contemporary Eco- Povertv: A Review of the 1964-1974 Decade, New nomic Problems 1977, William Fellner, (ed.), Wash- York, NY,Academic Press, 1975. ington, DC, American Enterprise Institute for Public s7Plotnick and Skidmore, op. cit., pp. 5, 26; Haveman, Policy Research, 1977, pp. 53-81. Stein finds little op. cit.. pp. 7-9. support for the notion that rising governmental ex- Henry M. Levin, "A Decade of Policy Developments in penditures have increased inflation or lowered pro- Improving Education and Training for Low-Income ductivity (except during the Viet Nam war period). Populations," in Haveman, ed., op. cit., p. 179. 62 Barry Sussman, " 'Tax Revolt' Targeted at Poor Ser- 39 Ibid. vice," The Washington Post, Washington, DC, The 40 ~KgressionalBudget Office, op, cit., p. 5. Post Publishing Co., October 1, 1978, pp. Al, A16. 41 Congressional Budget Office. The Administration's 63PubIic Opinion, JulylAugust 1978, p. 33. State gov- welfare Reform ~roposal:An Analysis of the Program ernments were called the biggest waster by 13%, local for Better Jobs and Income, op. cit., 1978, p. 38. governments by 5%. 42 U.S. President, Message Transmitting Recommenda- e4 1965 budget message, quoted in Levitan and Taggart, tions for City Demonstration Programs, 89th Cong., op. cit., p. 25. 2nd Sees., House Document No. 368, Washington, DC, 6s Barrv Sussman, "Sur~rise:Public Backs Carter on U.S. Government Printing Office. January 26. 1966. ~axes-~o~erSurvey-Shows Fairness Rated Above 43 Louis H. Massotti, "Toward a Viable Urban Future in Tax Cut," The Washington Post, Washington, DC, The a Society of Limits: Possibilities, Policies and Poli- Post Publishing Co., August 6, 1978, p. D-5. tics," paper presented at the Annual Meeting of the 66 ACIR, M-115, op. cit. American Political Science Association, New York, 67Public Opinion, op. cit., SeptemberlOctober 1978, p. NY, August 31, 1978, p. 2. A detailed assessment of 23. urban problems is provided in William Gorham and 68Robert D. Novak, "What's Happening Out There?," Nathan Glazer, eds., The Urban Predicament, Wash- Public Opinion, op. cit., SeptemberlOctober 1978, p. ington, DC, The Urban Institute, 1976. 3. Ibid., pp. 1-2. 69 Survey data for April 1978 in Public Opinion, op cit., 45 Anthony Downs, "Urban Policy," Setting National SeptemberlOctober 1978, p. 25. Priorities: The 1979 Budget, Joseph A. Pechman (ed.), ?0A Conversation with the Honorable Barry Bosworth: Washington, DC, The Brookings Institution, 1978, p. Coping With Inflation, Washington, DC, American 183. Enterprise Institute for Public Policy Research, 1978, 46 George E. Peterson, "Finance," in Gorham and Glazer, pp. 7-8. op. cit., pp. 59-62. 71 ACIR, Significant Features of Fiscal Federalism, Vol- 47 Henry J. Aaron, Politics and the Professors: The Great ume 1: Trends, M-106, Washington, DC, U.S. Gov- Society in Perspective, Washington, DC, The Brook- ernment Printing Office, 1976, pi. 1, 14. ings Institution, 1978, p. 159. 72 Comptroller General, Fundamental Changes Are 48 Ibid., p. 1. Needed in Federal Assistance to State and Local Gov- *9 Prather and Gibson, op. cit., p. 562. ernments (GGD-75-75), Washington, DC, U.S. Gen- 5O The classic statement is Donald T. Campbell, "Reform eral Accounting Office, 1975, p. 40. as Experiments," Urban Affairs Quarterly, 7, De- 73 Ibid., p. 42. cember 1971. An earlier version of this article ap- 74ACIR, Community Development: The Workings of a peared in American Psychologist, 24, April 1969, Federal-Local Block Grants, A-57, Washington, DC, pp.409-429. See also Daniel P. Moynihan, Maximum U.S. Government Printing Office, 1977, p. 44. Feasible Misunderstanding: Community Action in the 75 Comptroller General, The Federal Government War on Poverty, New York. NY, The Free Press, 1969, Should But Doesn't Know the Cost of Administering pp. 193-203. its Assistance Programs (GGD-77-87), Washington, sl Rivlin, op. cit., p. 7. DC, U.S. General Accounting Office, February 14, sa Gorham and Glazer, op. cit., p. 2. 1978. ' SJAaron, op. cit., p. 5. 761mpact of Federal Paperwork on State and Local Gov- 54Sar A. Levitan and Robert Taggart, The Promise of ernments, op. cit., pp. 6-7. Greatness, Cambridge, MA, Hward University Press, 77 Gregg, op. cit., p. 1. 1976, p. 283. Ibid., p. 28. Very similar problems of perverse incen- s5 Richard A. Berk and Peter H. Rossi, "Doing Good or tives have been noted in shared cost programs. See Worse: Evaluation Research Politically Re- John Holahan, Willian Scanlon, and Bruce Spitz, Re- structuring Federal Medicaid Controls and Incentives, lo4Daniel Bell, "The Revolution of Rising Entitlements," Washington, DC, The Urban Institute, 1977, and Marc Fortune, April 1975, p. 99. Bendick, Jr., Abe Lavine, and Toby H. Campbell, The 1°5 Samuel H. Beer, "The Modernization of American Anatomv of AFDC Errors, Washington,- DC, The Urban Federalism," Publius, 3, Fall 1973, p. 75. ~nstitute,1'977. lo6Ibid., p. 91. 79 Teffrev L. Pressman. Federal Programs and Citv Poli- lo7Taxpayers' Revolt: Are Constitutional Limits Desira- tics: ?he ~~namiciof the Aid hocess in oakland, ble?, Washington, DC, American Enterprise Institute Berkeley, CA, University of California Press, 1975, pp. for Public Policy Research, 1978, p. 13. 93-94. lo8 James L. Buckley, "The Trouble With Federalism: It Ibid., p. 88. Isn't Being Tried," Commonsense: A Republican For an overview, see ACIR, A-52, op. cit., Chap. VI. Journal of Thought and Opinion, 1, Summer 1978, pp. 82 An excellent case study is Martha Derthick, Uncon- 12-13. trollable Spending for Social Services Grants, Wash- Elizabeth Drew, "A Reporter At Large: A Tendency to ington, DC, The Brookings Institution, 1975. Legislate," The New Yorker, June 26, 1978, p. 83. 83Holahan, Scanlon, and Spitz, op. cit. This is one of llo Ibid., p. 84. several related reports on the Medicaid program by 111 Daniel P. Moynihan, "Imperial Government" Com- Urban Institute staff. mentary, June 1978, p. 31. 84 Charles L. Schultze, "Federal Spending: Past, Present, 112 Robert G. Kaiser and Mary Russell, "A Middle-class and Future," Setting National Priorities: The Next Congress-Haves Over Have-Nots," The Washington Ten Years, Henry Owen and Charles L. Schultze (ed.), Post, op. cit., October 15, 1978, pp. Al, A15. Washington, DC, The Brookings Institution, 1976, p. 113 David S. Broder, "The Frustrations of Single-Interest 367. Politics," The Washington Post, op, cit., September Ibid., p. 367. 13, 1978, p. A27. 86 "The Rise in Public Expenditure-How Much Further 114 Remarks of Secretary Joseph A. Califano, Jr., U.S. De- Can It Go?," OECD Observer, 92, May 1978, pp. 8-14. partment of Health, Education, and Welfare, before Of the 18 OECD nations, public expenditures relative the Economic Club of Chicago, IL, April 20, 1978, p. 6. to GDP ranked the United States 14th (near the bot- l15Harold Seidman, Politics, Position, and Power: The tom) in 1974-76. Dynamics of Federal Organization, New York, NY, 87 See Public Opinion, op. cit., MarchlApril 1978, p. 23. Oxford University Press, 1976, 2nd Ed., pp. 161-62. Walter Dean Burnham, "Jimmy Carter and the Demo- 116 U.S. Senate, Subcommittee on Intergovernmental Re- cratic Crisis," The New Republic, 3 and 10 July 1978, lations, Committee on Government Operations. Prob- p. 18. Louis Harris, "Despite Skepticism, Americans lems of Federal-State-Local Relations, 88th Cong., Still Believe System Can Work," Washington Post, op. 2nd Sess., September 18, 1962, p. 13. cit.. 13, November 1978, p. A10. See also Seymour 117 Hamilton, op, cit., p. 123. Martin Lipset and William Schneider, "How's Busi- 118 Douglas Yates, The Ungovernable City, Cambridge, ness? What the Public Thinks," Public Opinion, op. MA, The MIT Press, 1977, pp. 168-69. tit., JulylAugust 1978, pp. 41-47. 119 Bucklev, op. cit., -pp. - 11-12. 89This theme, now very widely accepted, was first lZ0Ibid., 6.15. enunciated in Lloyd A. Free and Hadley Cantril, The 121 Arguments of this kind appear in George C.S. Benson, Political Beliefs of Americans: A Study of Public "Values of Decentralized Government-1961 ," Es- Opinion, New York, NY, Simon and Schuster, 1968. says in Federalism, Claremont, CA, Institute for 90 Edward K. Hamilton, "On Nonconstitutional Man- Studies in Federalism, Claremont Men's College, agement of a Constitutional Problem," Daedalus, 107. 1961, pp. 1-18; and Robert A. Dahl, Pluralist Democ- Winter 1978, p. 111. racy in the United States: Conflict and Consent, 91 Ibid., pp. 121-22. Chicago, IL, Rand McNally, 1967, pp. 172-73. See also 92 Lipset and Schneider, p. 47. Robert E. Merriam, "American Federalism: A Paradox 93 Burnham, "Jimmy Carter," op. cit., p. 17. of Promise and Performance," American Federalism: 94 COX,op. cit., p. 116. Toward a More Effective Partnership, ACIR, Wash- 95E~erettCarl Ladd, Jr., Where Have All The Voters ington, DC, U.S. Government Printing Office, 1975, Gone?: The Fracturing of America's Political Parties, pp. 21-32. New York, NY, W.W. Norton, 1978, p. xvi. 122Leonard D. White, The States and the Nation, Baton 96 A more detailed and comprehensive summary of ex- Rouge, LA, Louisiana State University Press, 1953, p. pert views on the operation of the policy process is 4. See also Edward S. Corwin, "The Passing of Dual presented in Volume I1 of this report. Federalism," Virginia Law Review, 36, February 1950, 97 Ladd, op. cit., p. xvi. pp. 1-24. 98 Ibid., p. xiii. See Message from the President of the United States 99 Ibid., p. xvii. Transmitting the Final Report of the Commission on loo Curtis B. Gans, "The Empty Ballot Box: Reflections on Intergovernmental Relations, The Commission on In- Nonvoters in America," Public Opinion, op. cit., tergovernmental Relations, 84th Cong., 1st Sess., June SeptemberlOctober 1978, p. 54. 28, 1955, p. 59. lo' Richard Rovere, "Affairs of State," New Yorker, May lZ4S. Rufus Davis, The Federal Principle: A Journey 8, 1978, p. 145. Through Time in Quest of Meaning, Berkeley, CA, lo2Charles Peters, "The Solution: A Rebirth of Pa- University of California Press, 1978, p. 182. triotism," The Washington Monthly, October 1978, p. 125 Michael D. Reagan, The New Federalism, New York, 37. NY;Oxford University Press, 1972, p. 13. lo3Michael J. Crozier, Samuel P. Huntington, and Joji Watanuki, The Crisis of Democracy: Report on the 126Philip B. Kurland, Watergate and the Constitution, Governability of Democracies to the Trilateral Com- Chicago, IL, University of Chicago Press, 1978, p. 174. mission, New York, NY, University Press, 1975, pp. 127 Sundquist, op. cit., pp. 1, 6. 163-64. 128Hamilton, op. cit., p. 112. 129 James L. Sundquist, "In Defense of Pragmatism: A Re- 135 William H. Riker, Federalism: Origin, Operation, Sig- sponse to Daniel J. Elazar's 'Is Federalism Compatible nificance, Boston, MA, Little, Brown and Company, With Prefectorial Administration?'," paper prepared 1964, p. 155. for delivery at the Annual Meeting of the American '"Richard H. Leach, American Federalism, New York, Political Science Association, New York, NY, August NY, W.W. Norton, 1970, p. 9. 31-September 3, 1978, p. 5. l3'ACIR, A-62, op. cit., p. 78, "0 Morton Grodzins, The American System: A New View ~38Commissionon Federal Paperwork, Final Summary of Government in the United States, Chicago, IL, Rand Report, Washington, DC, U.S. Government Printing McNally and Company, 1966, p. 17. Office, 1977, p. 8. 131 Alan K. Campbell, "Functions in Flux," American 139 Commission on Federal Paperwork, FederallStatel Federalism: Toward a More Effective Partnership, op. Local Cooperation, op. cit., pp. 2, 5. cit., pp. 34, 36. 140 White House Conference on Balanced National 132 This account follows Grodzins, op. cit, pp. 307-16. Growth and Economic Development, Final Report, 133 Ibid., pp 313-14. Vol. I, Summary of Conference Proceedings, Wash- ls4Har0ld J. Laski, "The Obsolescence of Federalism," ington, DC, US. Government Printing Office, 1978, p. New Republic, May 3, 1939, p. 367, quoted in White, 5. op. cit., p. 1. Chapter II Indicators of Federal Growth

There are a variety of indicators of the fed- eral government's great growth in the past two centuries. The nation's increasing size has been accompanied by an expanding scope of its gov- ernments' activities, the result has been a deeper federal influence in the daily lives of its citizens, businesses, and state and local gov- ernments. Thus three basic dimensions need to be measured-size, scope of activities, and the depth of influence. By most indicators rapid growth of the fed- eral government began in the 1930s as the scope of its activities was broadened by the New Deal, but the deepening of the federal government's effects on individuals, busi- nesses, and subnational levels of government has been occurring mostly since 1960. Of course the nation's population and economy also have been growing, and so have its state and local governments. The result is that some federal growth is accounted for by the expan- sion of the nation, and some by the shifts of governmental roles within the American fed- eral system. To lay a basis for sorting out the diverse causes of federal growth, this chapter describes a variety of measures of these three basic di- mensions. Quantitative indicators are used wherever possible, and they are compared to the growth in the nation's population, econ- omy, and subnational governments, and to the levels. Now public budgets and ex- public sector in other nations. Size is treated penditures, especially for the national first-in terms of federal spending, taxes, debt, government, that reach astronomical aid programs, employment, bureaucratic or- figures. ganization, regulatory activity, legislative ac- Then (before 1789) no national taxes tivity, and judicial caseloads. The scope of fed- at all; for decades after 1789, only eral functions also is examined, including new customs and excise taxes on a very areas of federal aid, regulation, court jurisdic- limited scale, with state and local gov- tion, and organizational structure. The impact ernments relying almost entirely on di- of these federal activities on individuals, busi- rect property taxes. Now tremendously nesses, and state and local governments is increased and diversified taxes at both probed next, focusing on the burdens in time national and state levels, with a na- and cost or in loss of freedoms imposed by the tional government rising swiftly to a federal government. Finally a brief summary of dominating position with respect to all findings is included. taxes except those directly on prop- erty. HISTORICAL PERSPECTIVE Then (before 1789) state grants to the Congress of the United States for de- Before beginning a systematic look at avail- fense and debt purposes. Now able data, mostly for the years following 1900, grants-in-aid by the national govern- it is instructive to take a brief look at an even ment to states in increasing amounts longer time span. Comparing governments in and with steadily tightening national the United States from 1789 to 1942, William controls over state action.' Anderson noted these changes: Then inactive, negative, laissez-faire The early years of the national government government with very few functions, under both the Articles of Confederation and and with only business leaders favor- the present Constitution have been described ing a national government, and they by James Young in terms completely consistent desiring to give it only enough vigor to with Anderson's description of "Then."z Under protect commerce, provide a nation- the Articles, the national government had no wide free home market, and a sound permanent home. It went from city to city, at currency and banking system. Now ac- the sufferance of state and local officials, to tive, positive, collectivist government, conduct its business. The inconvenience and especially at the national level, ren- dishonor suffered in this period led to a provi- dering many services with the support sion in the Constitution to establish a federal of powerful labor and agricultural ele- district and to create a permanent seat of gov- ments, while many business leaders ernment. Finding a suitable site and develop- have reversed their position. ing it became one of the national government's Then local law enforcement with prime concerns in the 1790s. state protection of liberties guaranteed By 1802 the seat of government in Washing- in bills of rights. Now increasing na- ton, DC, housed a headquarters establishment tional law enforcement and national of only 291 officials. The members of Congress protection of civil liberties even constituted about one-half of this number. against state and local action. Total federal employees throughout the nation Then practically no employees of the numbered fewer than 10,000, and more than national government and very few two-thirds of these were uniformed personnel state and local employees. Now a na- of the Army, Navy, and Marine Corps. Table tional civil service of normally over a 11-1 shows how limited the functions and million persons reaching into every staffing of the national government were at this county of the country, plus extensive time. National defense, minting money, col- state and local civil services. lecting revenue, postal services, foreign rela- Then small public budgets at all tions, lighthouses for navigation, and law en- Table 11-1 THE GOVERNMENTAL ESTABLISHMENT, 1802

Percent of Percent of Nonuniformed Number Total Total Fighting Establishment Nonuniformed Personnel: War Department, Washington War Department, Field Navy Department, Washington Navy Department, Field Uniformed Personnel: Army Navy Marine Corps SUBTOTAL 70.1% 4.1% Revenue-Producing Functions Treasury Department, Washington Coiiectors of Revenue Deputy Postmasters Land Offices SUBTOTAL 24.6 78.9 Leadership Congress Supreme Court Presidency SUBTOTAL 1.7 5.6 ' Foreign Relations State Department, Washington Ministers and Legations Consulates Treaty Commissioners and Agents SUBTOTAL 1.3 4.0 Social Control and Law Enforcement Attorney General, Washington District Judges District Attorneys Marshals Clerks SUBTOTAL 1 .I 3.6 Citizen Benefits and Nonrevenue Services Lighthouses, Navigation Pension Administration SUBTOTAL 0.8 2.7 Miscellaneous U.S. Mint Purveyor of Public Supplies Territorial Administration (civil employees) Commissioner of Patents SUBTOTAL 0.4 1 .I TOTAL, ALL PERSONNEL 1 oo.oO/o 1 oo.oO/o TOTAL, NONUNiFORMED PERSONNEL

SOURCE: Civil and Military List of February 17, 1802, ASP, Misc. Ser., I, pp. 260-319, as reported in James Sterling Young, The Washington Community: 1800-1828, New Yo&, NY, Harcourt, Brace, Jovanovich, Inc., 1966, p. 29. Table 11-2 THE HEADQUARTERS ESTABLISHMENT AT WASHINGTON, 1802 and 1829

lxecutive Branch Presidency Treasury Department and General Post Office War Department Navy Department State Department, Including Patent Office Attorney General's Off ice SUBTOTAL ,egislative Branch Vice President Senators Representatives Ancillary Personnel (clerks, officers, librarians) SUBTOTAL udicial Branch Supreme Court Justices Clerk SUBTOTAL OTAL

OURCE: For 1802, the Civil and Military List of February 17, 1802, ASP, Misc. Ser., I, pp. 260-31 9; for 1829, A Register o fficers and Agents, Civil, Military, and Naval in the Service of the United States, on the 30th of September, 1829; both a: !ported in James Sterling Young, The Washington Community: 1820-1828, New York, NY, Harcourt, Brace, Jovanovich LC., 1966, p. 31. forcement practically constituted the whole of an instrument of social control is indi- government. Although the headquarters staff cated by the fact that there were more more than doubled by 1829, most growth cen- people making the law than enforcing tered in treasury and postal services, and in the it, Congress outnumbering the whole number of members in Congress. The functions law enforcement establishment in- of government changed very little during that cluding marshals, district attorneys, time (see Tab1e 11-2). and federal courts. As a provider of In interpreting these figures, Young notes services and benefits to citizens, the that: national government was insignificant, unless one counts the postal service, . . . the early government was an or- which was then looked upon, and ac- ganization principally of warriors and tually was, a profit-making enterprise revenue collectors. Approximately of the Treasury Department. And a 95% of its manpower was assigned to government could not be very much military functions and to the produc- more than a debating society which tion of revenue, with more than four had, at its headquarters, a Congress times as many personnel engaged in larger than its administrative ap- servicing the national treasury as were parat~s.~ assigned to all other civil functions of government, foreign and domestic. Thus the federal government began very How attenuated were its functions as small. In fact it was small not only in absolute terms but also in relation to state and local toward city living grew strong national roots governments. As Young explains: during the 19th century, while the federal gov- ernment remained largely aloof from domestic Almost all of the things that republi- affairs.' can governments do which affect the It was this early era that can be described ac- everyday lives and fortunes of their curately as dual federalism, wherein the func- citizens, and therefore engage their tions, funds, and personnel at the federal and interest, were in Jeffersonian times not state levels were largely separate. Little sharing done by the national government. The occurred because there was not much to share, administration of justice, the mainte- especially from the federal perspective. If a nance of law and order, the arbitration layer cake metaphor is applied, it had two of disputes, the chartering and super- separate layers, but the top was fairly thin vision of business enterprise, road throughout these 110 years. building and the maintenance of The remainder of this chapter explores the transportation systems, the schooling 20th century, in which the indicators of growth of the young, the care of the indigent, show a very substantial change in the federal even residual control over the bulk of government's size and role. the military forces-these functions fell principally within the province of state and local governments to the ex- THE SIZE OF tent that any governmental bodies THE FEDERAL GOVERNMENT performed them.4 No single measure of the size of the federal Nevertheless the federal government con- government is adequate to give an accurate tinued to grow throughout the 19th Century picture. The federal government uses a number and to develop some relationships with the of different approaches in seeking to reach its state^.^ The expanding frontier, of course, in- goals. In a few cases the federal government volved federal territorial jurisdiction, federal performs a governmental function itself- land grants for several purposes (including free national defense, postal services, Social Secu- public education, roads, flood control, drain- rity. In such cases the size of federal expendi- age, canals, and railroads), growing popula- tures and federal departments or agencies fairly tion, encouragement of immigration, and ad- directly reflects the size of the federal govern- mittance of new states. Cash grants from the ment's role. federal government to the states also emerged Much more often, however, the federal gov- (although briefly); receipts from the sale of fed- ernment seeks to enlist the efforts of other eral lands were being shared as early as 1818, levels of government or the private sector in while excess federal revenues first were shared attaining national objectives. It may do this with the states in 1837. The first permanent through grants-in-aid, credit assistance, tax in- cash grants-in-aid program began in 1887. Di- centives (often referred to as tax expenditures), rect federal regulation of certain economic ac- and regulations. In these cases the size of the tivities also began in the 1880s. federal bureaucracy and budget may not reflect Despite these beginnings, growth of the fed- accurately the size of the federal influence over eral government was very limited until the the affected activities. The intent is to "lever- 20th century. Federal expenditures remained age" a modest federal government effort into a low up to 1893, and they were concentrated much larger national effort to attain national largely on pensions, public buildings, and river goals. Thus a number of separate indicators of and harbor improvements. During this time the these types of federal activity must be probed states were spending heavily for internal im- to arrive at a realistic estimate of what the fed- provements, while the federal government con- eral role may be. sciously refrained because it was considered an In addition to looking at several different inappropriate national rolea6Industrialization, types of growth indicators, a careful distinction large-scale interstate and foreign commerce, must be made between unrefined aggregative the centralization of business, and the move figures, which look at the federal government in an isolated way (numbers of current dollars, Significant expansion in the number of ad- people, agencies, etc., from one year to the ministrative law judges, Congressional staff, next), and more refined data, which relate the the number of federal court cases, and federal growth of the federal government to growth in aid funds all occurred in the 1950s. Rapid in- the population, the economy, state and local creases in the number of federal aid programs, governments, and other factors. the percent of state agencies receiving federal aid, the number of federal mandate^,^ and the Unrefined Indicators of size of the Federal Register were contributions Federal Growth of the 1960s. The 1970s have seen rapid in- All of the unrefined indicators of federal creases in federal payments to individuals, fed- growth compiled for this chapter are sum- eral loans and loan guarantees, federal tax ex- marized in Figure 11-1 by showing the time penditures for regulatory activities, and the periods in which the various indicators evi- number of Congressional committee meetings. denced significant growth.8 Although short In addition to examining these general trends periods of rapid increases occurred in the of federal growth by decades, it also is instruc- number of federal departments and agencies in tive to examine more precisely the data the 1860s and early 1900s, and in substantial gathered for the six subject areas: (1) overall fi- new initiatives in federal regulation beginning nancial growth, (2) growth of the federal in the early 1900s, major growth in the federal bureaucracy, (3) growth in the activities of establishment began with the Depression of the Congress and the federal courts, (4) growth in 1930s and World War I1 in the 1940s. Since that federal regulatory activities, (5) growth in fed- period each decade has witnessed the addition eral aid, and (6) growth in the use of new fed- of new federal activities, with almost no drop- eral financing mechanisms in recent years. ping off of growth in the indicators that began OVERALL FEDERAL FINANCIAL GROWTH rising earlier. The only exceptions appear in: The rapid growth in both federal revenues (1) civilian employment in the federal govern- and expenditures began their ascents in the ment which began slacking off in the late early 1930s and have closely paralleled each 1960s; (2) federal aid funds (and perhaps num- other since then (see Figures 11-2 through 11-5). bers of programs, too) which began to level off The national debt was very modest until World in the late 1970s; and (3) the number of bills War 11, when a drastic increase occured. Efforts and resolutions introduced in the U.S. House of to retire the war debt were somewhat success- Representatives. ful until the early 1950s, when the Korean War When examining this growth by decades, the intervened. By 1960 a federal budget surplus 1930s emerge as an era of steep growth in fed- had become almost extinct. By the mid-1960s eral revenues, expenditures, and civilian em- the cumulative national debt (in current dol- ployment. Expansion in the number of federal lars) had begun a steep rise which continues to departments and agencies began anew in this the present. Financially the federal government decade and has continued to the present. The now operates at a scale totally unknown prior same can be said of the hike in the number of to World War 11. regulatory agencies and budget deficits. Al- though significant short-term deficits had been GROWTH OF THE associated with the Civil War, the recession of FEDERAL BUREAUCRACY the 1890s, and World War I, a much more sus- Federal civilian employment roughly fol- tained succession of deficits was created by the lowed the increases in overall financial growth Great Depression of the 1930s, the wars that of the federal government until the late 1960s followed, and the economic uncertainties of the (see Figure 11-6). Then it began to fall from its 1970s. peak and has leveled off in the 1970s. Military The 1940s saw the mounting accumulation of employment is excluded because it varies too federal debt, which continues to the present widely between times of war and peace. time. The number of bills and resolutions in- The number of federal departments, agen- troduced in the House also began growing sig- cies, bureaus, and other organizational units nificantly by this decade. also increased, as shown by Figure 11-7. Figure 11-1. Periods of Significant Federal Growth in Unrefined Indicators

Number of Federal Departments and Agencies (Figure 7)

Sreation of Federal Regulatory Agencies (Figure 14)

Federal Revenues (Figure 2)

Federal Expenditures (Figure 3)

Federal Civilian Employment (Figure 6)

Federal Debt (Figure 5)

Federal Budget Deficits (Figure 4)

Number of Federal Administrative Law Judges (Figure 16)

Number of House Bills and Resolutions Introduced (Figure 9)

Congressional Staff (Figure 8)

Number of Cases Filed in Federal District Courts (Figure 12)

Federal Aid Funds (Figure 19)

Number of Federal Aid Programs (Figure 20)

Percentages of State Agencies Receiving Federal Aid (Figure 21)

Number of Federal Mandates (Figure 17)

Number of Pages in the Federal Register (Figure 18)

Federal Payments to Individuals (Figure 22)

Federal Loans and Loan Guarantees (Figure 23)

Federal Tax Expenditures (Figure 25)

Federal Expenditures for Regulation (Figure 15) Figures 11-2-11-5. Overall Federal Financial Growth

500 Figure 2. Federal Revenues '0° Figure 3. Federal Expenditures Source: Appendix Table A-1 . Source: Appendix Table A-2. I

-80 Figure 4. Federal Surplus (+) or Deficit Figure 5. Cumulative Federal Debt (-) in Individual Years Source: Appendix Table A-4. - 70 Source: Appendix Table A-3. I

Examining the births and deaths of these fed- national commissions, committees, and boards eral units from the time when the Constitution established by Congressional or Presidential was adopted through 1973, Herbert Kaufman action and having functions independent of found that most federal organizations have any other department or agency. There are also been immortal.1° Although a few organizations 1,240 advisory committees serving almost went out of existence from the 1920s through every part of government. Finally, there are the 1950s, their number was small relative to four quasi-official agencies. The current United those created during that period; the rest of the States Government Manual in which all of nation's history has been marked by increases these departments and agencies (except the ad- without any offsetting decreases. Small peaks visory committees) are listed runs over 900 in the creation of new federal agencies oc- pages in length.13 curred in the 1860s, the first two decades of the GROWING ACTIVITY IN CONGRESS AND 20th Century, and the Depression and war THE FEDERAL COURTS years, but the most startling growth in the number of new federal agencies took place in As the nation expanded in territory, popula- the 1960s. During 1961-73 a total of 141 new tion, and number of states, the Congress grew agencies were created (nearly 36% of the 394 from its original 1789 composition of 20 Sena- existing in 1973), and none disappeared during tors and 59 Representatives, to its current com- that time. l1 (Of course, this organizational ex- position of 100 Senators and 435 Representa- pansion reflects a great deal of programmatic tives. During the same period the federal expansion, as will be described later in this judiciary grew from six Supreme Court justices chapter.) and 36 district judges to a total of 112 separate Through this cumulative process, the federal courts encompassing 574 judges.Table 11-3 government has become much more complex. lists the present U.S. courts and shows the dis- The Congress now is served by eight agencies; tribution of judges among them. the judicial branch has two agencies in addi- In addition to the increases in legislative and tion to all the courts; and the executive branch judicial officers, there have been increases in has an Executive Office of the President with staff and work loads. Figure 11-8 shows rather 12 agencies, 13 departments12 (each containing steep growth in staffs of Congressional mem- many different offices and bureaus), and 56 in- bers and committees since the 1940s. This was dependent agencies. In addition there are 81 accompanied by an equally steep growth in the

- - Table 11-3 STATUS OF U.S. COURTS, 1978 Number Number of Courts Type of Court of Judges 1 U.S. Supreme Court 9 11 U.S. Circuit Courts of Appeals 97 91 U.S. District Courts (includes Puerto Rico) 401 1 Temporary Emergency Court of Appeals 8 1 U.S. Court of Claims 23 1 U.S. Court of Customs and Patent Appeals 5 1 U.S. Customs Court 9 4 Territorial Courts-Guam, Canal Zone, Virgin Islands, Northern Mariana Islands 5 1 U.S. Court of Military Appeals 3 1 U.S. Tax Court 16 113 TOTAL 576 SOURCE: U.S. General Services Administration, National Archives and Records Service, United States Government Manual 1978179, Washington, DC, US. Government Printing Office, 1978. Figures 11-8-11-13. Growing Activity in Congress. . . Figure 8. Staff of 25 Figure 9. Number Figure 10. Increases in 18 Congressional Bills and Congressional Members and Resolutlons Activity 1955-76 16 Source: Patlerson. Samuel C.."The Semi- Committees 20 Introduced, U.S. Sovereign Congress." The New American 14 Source: Appendix Table A-7. House of Political System. American Enterprise Insti- tute lor Public Policy Research. Washington, Representatives DC, 1978, p. 159.

Hilsman p. 227 5 / Source: Appendix Table A-8.

11955-561 Sessions . . . And the Federal Courts Figure 11. Employment in Figure 12. Civil Cases Figure 13. Cases the Federal Filed in U.S. Docketed in Judiciary District Courts Federal Source: Appendix Table A-5. Source: Appendix Table A-9. Appelate Courts Source: Appendix Table A-10.

U.S. Circuit Courts of Appeals

/u.s. Supreme Court IL Figures 11-1 9-11-21. Growth in Federal Aid

Figure 19. Amount of Federal Aid Source: Appendix Table A-13.

Figure 20. Growing Number of Figure 21. Percent of State Agencies Grant-in-Aid Programs Receiving Federal Aid 1902-74 Source: Appendix Table A-1 5. Source: Appendix Table A-14. I confirm this slowdown, ACIR's most recent been the loan guarantees. Of course they do not counts of actually funded grant programs for necessarily result in federal expenditures for state and local governments (using a different the face amounts quoted. Nevertheless there is definition than Figure 11-20) indicates con- a potential budget commitment in the future tinued strong growth-from 448 programs in and a very real and immediate facilitation of 1975 to 498 in 1978.lSThus the number of pro- credit that otherwise would be more expensive grams may still be increasing while funds are or unavailable. getting tighter. How these federal loans and loan guarantee With the enactment of the General Revenue commitments have accumulated over time is Sharing Program in 1972, every state, as well as shown in Figure 11-23. Figure 11-24 shows that virtually every municipality and county in the the annual increases in both types of activities nation, now receives federal grant funds. Fig- continue to increase. Total federal obligations ure 11-21 shows that during the 1960s and under these federal assistance programs, other 1970s, federal aid found its way into three- than those reflected in the regular budget, quarters of all state agencies, many of which amounted to about $70 billion in FY 1979. were recently established. Thus federal aid has Federal tax expenditures, although analyzed become a big and pervasive force in the federal in connection with the budget since 1974, also system. are not reflected in the federal budget itself. These indirect expenditures (revenue reduc- RECENT INNOVATIONS IN tions) very substantially benefit many indi- FEDERAL FINANCING viduals, businesses, and nonprofit corpora- Although federal transfer payments to indi- tions. Such expenditures consist of foregone viduals, federal credit assistance programs, and federal tax collections resulting from the spe- federal tax expenditures are not new inven- cial treatment of various types of individual tions, rapid increases in their utilization are and corporate income and expenses in the fed- products of the 1960s and 1970s. These trends eral tax laws.16 The federal tax system now of- are shown in Figures 11-22 through 11-25. fers 87 different types of tax credits, exclu- Federal transfer payments to individuals (see sions, deductions, deferrals, or preferential Figure 11-22) consist of Social Security, several rates, resulting in about $150 billion of "lost federal retirement systems, unemployment revenue" in FY 1979." It is commonly con- benefits, Medicare, food stamps, Supplemental ceded that, "Many spending programs could be Security Income, workmen's compensation, recast as tax expenditure programs, and the veteran's benefits, and several small entitle- goals of most tax programs could be pursued ment programs. In 1975 these transfer pay- through direct spending."ls Present tax ex- ments for the first time surpassed federal ex- penditures cover virtually every sector of fed- penditures for the purchase of goods and ser- eral program activity, and they have been vices. In other words the federal government growing in dollar volume at a rate faster than spent more on direct entitlement payments to direct federal spending. citizens than on employing, equipping, and The off-budget portion of the federal gov- supplying its own federal work force to carry ernment's credit assistance programs and tax out federal programs. Furthermore these trans- expenditures totals about $221 billion. This fer payments have continued to grow as a pro- amount equals nearly half again as much as Portion of the federal budget since 1975. total FY 1979 budget outlays. Federal credit assistance consists of direct IMPLICATIONS OF THESE FEDERAL loans and guaranteed loans. Direct loans are GROWTH FIGURES made to individuals and organizations by both regular federal agencies and independent fed- The federal government today is fundamen- eral corporations whose activities are not in- tally larger than that which existed prior to the cluded in the regular federal budget. Federal 1930s. It is big government, on a scale with big guarantees of loans are made in the private business, big labor, a large national population, sector of money markets. By far the fastest and major foreign and domestic respon- growing sector of federal credit assistance has sibilities. It has a large and sprawling organi- Figures 11-22-11-25. Recent Innovations in Federal Financing

Figure- 22. Federal Transfer Payments Figure 23. Federal Credit Assistance to Individuals Outstanding Source: Appendix Table A-1 6. Source: Joseph Scherer, "How Big is Government? Challenge, September-October, 1975, pp. 60-62.

FY '80 Budget / Guarantees/ Direct Loans/

I 1 1 I I Figure 24. Annual Federal Participation Figure 25. Federal Tax Expenditures in U.S. Source: Appendix Table A-18. Source: Appendix Table A-17.

30 Total Federal Participation I/

20

Other Federally Sponsored Loans, 10 Loan Guarantees Direct Loans f I zational structure, a big work force, a big that the federal government is now conducting, budget, and an influence on the natibn much or helping to accomplish, are not being done larger than reflected by the size of its budget or on the strength of the federal bureaucracy its bureaucracy. This results from the govern- alone. ment's extensive and growing use of the tech- Figure 11-27 shows the great extent to which niques of regulation, transfer payments to indi- federal employees are devoted to direct opera- viduals, off-budget credit assistance, tax ex- tions of the federal government, such as de- penditures, and federal aid to state and local fense, postal services, and a portion of the Vet- governments (as well as to certain private or- eran's Administration program. This leaves a ganizations). These latter techniques of indirect minority of federal employees to oversee the governance have become particularly promi- 70% federal financing devoted to other pur- nent since 1960. Along with a fundamental poses. l9 change in the scale of government-from small Table 11-5 shows how these federal employ- to large (rooted in the 1930s)-has come an ees are supplemented by state and local gov- even more fundamental change in the nature of ernment and private sector employees, whose federal activities (rooted in the 1960s). salaries are paid indirectly by the federal gov- Figure 11-26 shows how federal purchases of ernment through grants and contracts, even goods and services (which indicate the direct though they remain primarily under nonfederal operations of the federal government) have de- jurisdiction and guidance. Of course some of creased over the past three decades as a percent these supplemental personnel work on jobs de- of the total budget, while domestic transfer signed to help the federal government in its payments and grants-in-aid (representing fed- own operations, but it is estimated that five eral financial influence on others, including million are working toward other shared ob- substantial redistributions of funds and pur- jective~.~~Thus the number of indirect federal chasing power) have grown. Table 11-4 takes "employees" working toward shared functions this analysis one step further by adding the may approximately equal the total employees federal government's off-budget financial ac- directly on the payroll plus those "indirect tivities. This shows that the federal govern- employees" engaged in federal operations. Be- ment's direct operations account for only about cause no precise figures are kept by the federal 30% of its financial activities, while 70% of its government with respect to this phenomenon, effort finances the activities of others. Thus the the estimates presented are only rough ap- same federal government that once devoted al- proximations. Nevertheless they hint at the most all of its attention to providing national emergence of a significant trend. defense, running the post office, conducting A final implication of these federal growth foreign affairs, and raising taxes through cus- figures is that the federal government has toms (as separate functions minimally affecting grown so intertwined with state and local gov- or affected by other levels of government and ernments and the private sector that its budget the private sector) now devotes more than and its program activities are no longer within two-thirds of its financing to shared functions, its own control. Obviously whatever the federal in which other levels of government, individu- government does affects the whole nation, not als, and the private sector have major roles as just the federal government. Others have come beneficiaries andlor cooperating partners. This to depend on federal transfer payments, grants, change has developed over many decades, but contracts, or simply on the overall level of fed- the trend accelerated greatly in the 1960s and eral spending and its effect on the national 1970s, and the predominance of shared func- economy. To the fundamental changes in the tions and financial redistribution over direct scale of the federal government and the nature operations is a recent occurrence. of its activities must be added the fundamental This change in emphasis at the federal change in its interdependence with the nation's level-from direct service provider to banker, other governments and the private sector. equalizer, regulator, and mobilizer of shared The greatly broadened scope of federal ac- functions-helps to explain why federal em- tivities that has developed over the past several ployment has leveled off. Many of the activities decades, and the depth of these new inter- Figure 26. Distribution of Federal Sector Expenditures by Category

Percent 5-Year Averaaes

lnterest and Other

Grants-in-Aid

Domestic Transfer Payments

Non-Defense Purchases of Goods and Services

Defense Purchases of Goods and Services

1951-55 1956-60 1961-65 1966-70 1971 -75 1976-80 F~scalYear Estimates Source: U.S. Office of Management and Budget, Special Analysis, Budget of the United States Government, Fiscal Year 1980, Washington, DC, U.S. Government Printing Office, 1979, p. 50.

Table 4. FEDERAL FINANCIAL INFLUENCE, FISCAL YEAR 1979

(In billions of dollars)

Types of Transactions Amounts

( Purchases Direct Federal Federal Interest and Other Operations Budget Transfers (30%) (69%) ( Grants Federal Financial off Benefits, Aid, and Budget Credit Assistance Incentives 221 (31%) { Tax Expenditures (70%)

100% $71 7 Total Federal Financial 1OO0/o Figure 27. Federal Civil Employees, Table 5 Executive Branch THE 10 MILLION FEDERAL EMPLOYEES? Source: Appendix Table A-19. The first column of the table below shows the number of civilian employees on the payrolls of the departments and four major independent agencies in fiscal 1978. Nearly three million military and postal employees are excluded. The second column shows employees in the state, local and private sectors whose salaries were paid indirectly by the federal government through grants and contracts. The final column shows the number of these indirect employ- ees who were doing work that the federal government needed for its own operations. The figures are in thousands of employees. lndlrect Employees lndlrect employees on the federal doing payroll employees federal work Departments: Agriculture 85 88 88 Commerce 30 ? ? Defense 933 1,775 1,775 Energy* 19 109 109 HEW 144 1,044 95 HUD** 16 953 8 Interior 55 ? ? Justice 53 ? ? Defense Labor 21 732 1 State 23 ? ? Transportation 7 1 ? ? Treasury 109 ? ? Agencies: EPA 10 ? ? Post Office GSA 35 ? ? NASA 23 101 101 Veterans Admlnlstratlon 198 ? ? CL Others 314 ? ? Veterans Total government 2.139 8,000'"' 3,000"' -Administration yAII Other 'represents only the Office of Industrial Affairs "1977 "'extrapolations based on agencies providing data Source: Department and agency estimates. dependencies, are examined more fully later. governmental expansion as a percentage of Before proceeding with those examinations, population and economic growth. however, the overall size of the federal gov- A further indication of the effects of inflation ernment needs to be looked at from the on government growth is shown in Figure II- perspective of additional indicators that take 29. Clearly by the mid-1970s inflation was by into account the growth of the nation itself and far the largest factor in the increase of federal of the other governments to which the national civilian payrolls. government is related. Figure 11-30 shows how the growth of gov- ernment in the United States (federal, state, and RELATIVE INDICATORS OF local combined) compares with government FEDERAL GROWTH expansion in other major industrialized nations when measured by total governmental outlays Government, obviously, does not grow in in those nations as a percent of their gross isolation. It responds to real world conditions. domestic products. Only Japan-which has Since its beginning the United States has been virtually no military establishment and uses its expanding its population, and throughout most private business structure to meet social wel- of its history its economy also has enlarged fare costs to a much greater extent than other rapidly. Recent decades have been charac- nations-devotes a smaller portion of its na- terized by substantial inflation, especially the tional output to governmental activities. Other 1970s. In addition technological advances, in- nations (including Great Britain, France, Bel- dustrialization, and the post-industrial de- gium, Canada, West Germany, Denmark, Italy, velopment of service industries have moved and Norway) consistently devote greater por- people out of agricultural settings into urban tions of their economy to government. In Nor- areas where they live more closely together, way this overage was more than 10 percentage under altered life styles that create much points (or nearly one-third) greater than in the greater social interdependence-and con- United States by 1973. Compared with other sequently, a larger role for government. Under industrialized nations, America has shown these circumstances it would be very surpris- constraint in the growth of its governmental ing if government did not grow. But the gov- sector since 1965. ernment expansion that is in response to growth in the population and economy, and to Periods of Significant Growth inflation, can be separated out statistically from the remaining growth that might be termed Figure 11-3 1 depicts the periods of significant "real. " expansion for all the indicators of relative fed- eral growth compiled for this study, going back This section presents data that draw these to 1930.21 This figure reveals that the federal distinctions and that relate the growth in U.S. government has gotten bigger even when government to that in other nations; it also re- measured by indicators that have been adjusted lates federal government expansion to that of to eliminate or reduce the effects of a growing state and local governments. For the most part, population and a growing economy. It has in- federal growth seems much smaller from this creased in terms of revenues and expenditures, perspective. federal aid, federal debt, and federal employ- Figure 11-28 shows that the U.S. population ment. This figure also shows that the periods of has been increasing steadily throughout this major growth in these adjusted indicators have century, and that the Gross National Product been in the past for the most part. Although (GNP) (which measures the size of the total na- rapid increases in several such indicators of tional economy) has been growing even more federal expenditures and aid extend into the rapidly throughout most of this period in cur- 1970s, they now appear (at least tentatively) to rent dollars. Nevertheless when the GNP is be slacking off, leveling out, or declining. Only adjusted to eliminate the effects of inflation two still show strong growth at the end of the (constant dollars), its rate of increase more decade-local dependence on federal and state nearly parallels that of the population. These aid (with state aid becoming an increasingly trends will be reflected in later figures showing important part), and interest paid on federal Figure 28. Population and Gross National Product Source: Appendix Table A-20.

Figure 29. Payroll Costs of Federal Civilian Employment in the Executive Branch and Sources of Increase Source: Congressional Budget Office, The Federal Work Force: Its Size, Cost, and Activities, Washington, D.C.: U.S. Government Printing Office, March, 1977, p. 16.

.-0 necessary to keep pace

. . due to emolovment increase A\\-

Growth of payroll COGSdue to growth in, real incom? and other factors I Figure 30. Total Governmental Outlays (all levels) as a Percent of Gross Domestic Product, Selected Countries

Source: Appendix Table A-21 and Joseph Scherer, "How Big is Government?", Challenge, September-October, 1975, p. 67

Japan

10 Figure 31. Periods of Significant Federal Growth in Relative Indicators

Revenues and Expenditures

Federal Revenues as Percent of GNP (Figure 32)

Federal Revenues as Percent of All Government Revenues (Figure 33)

Federal Expenditures as Percent of GNP (Figure 34)

Federal Expenditures as Percent of All Government Expenditures (Figure 35)

Federal Expenditures Per Capita (Figure 36)

Social Security Payments as Percent of GNP (Figure 37)

Federal Aid: Federal Payments to State and Local Governments as Percent of GNP (Figure 38) Federal Aid as Percent of State and Local Expenditures (Figure 40) Federal Aid in Constant Dollars (Figure 41) State Dependency on Federal Aid (Figure 42)

Local Dependence on Federal and State Aid (Figure 42)

Federal Aid as Percent of Federal Outlays (Figure 39)

'ederal Credit Assistance and Debt:

Percent of Credit in US. Market Having Federal Participation (Figure 44) Federal Debt as Percent of GNP (Figure 45)

Interest Paid on Federal Debt as Percent of GNP (Figure 46)

lnterest Paid on Federal Debt as Percent of Federal Expenditures (Figure 47) bderal Employment:

Government Labor Force (Federal, State, Local) as Percent of Population (Figure 48)

Federal Employment as Percent of Labor Force (Figure 49)

Federal Employment per $1 million Outlays (Figure 51)

:ederal Legislative Activity: Percent of House Bills and Resolutions Reported by Committees (Figure 52) Congressional Enactments (Figure 52) debt as a percent of both federal revenues and sources) now are rising faster than those on the GNP. federal level. This is in keeping with the Examining the relative growth of the federal peacetime trend throughout the 20th century. government by decades, Figure 11-31 shows The rate of federal revenue growth has out- that major growth in federal revenues, em- stripped state-local growth only during war- ployment, and debt occurred mostly in the time (as shown in Table 11-6). 1930s and 1940s. Federal expenditures also On the expenditure side (see Figures 11- grew significantly in those decades, but con- 34-37), similar trends are noted, but with some tinued into later periods-up until the mid- modifications. Federal expenditures as a per- 1970s. Federal aid was the big contributor to cent of GNP (Figure 11-34) leveled off from the expansion in the latter decades, along with mid-1950s to the mid-1960s, but grew moder- continued rises in Social Security payments ately again in the latter 1960s and early 1970% and interest on the federal debt. peaking in 1975 before they began to decline. Of the 21 indicators presented, only ten Deficit spending and countercyclical policy showed rapid growth in the 1960-80 period, objectives (aimed at controlling unemployment and only three continued to show rapid growth and inflation in the national economy) account by 1980. A more detailed examination of these for this departure from the federal revenue indicators follows. trend (compare Figure 11-34 with Figure 11-32). Federal expenditures as a percent of all gov- RELATIVE GROWTH OF ernment expenditures (federal, state, and local) FEDERAL REVENUES AND EXPENDITURES follow almost the same trend as was found on Figures 11-32 and 11-33 reflect a leveling off the revenue side (compare Figure 11-35 with of federal revenues, both as a percentage of Figure 11-33). GNP and as a percentage of all government Federal expenditures per capita (in constant revenues-federal, state, and local. In other dollars) continued to grow rather rapidly until words state and local revenues (from their own the mid-1970s, when they began to level off

Table 11-6 RATEOFREVENUEINCREASEANDDECREASEOF FEDERAL AND STATEILOCAL GOVERNMENTS IN PEACETIME AND WARTIME, SELECTED PERIODS, 1902-72

State and Local Federal Governments Fiscal Period Government (from own sources) GNP Peacetime + 53% + 188% - 5 + 170 +314 + 1032 Wartime + 640% + 33% + 99% +671 + 30 +I22 Exhibit: Breakdown of Post-World War II Period - 19% + 65% + 25% + 71 + 32 + 36 +201 + 419 +207

SOURCE: Reproduced from Roger A. Freeman, The Growth of American Government, Stanford, CA, Hoover Institution Press, Stanford University, 1975, p. 217. Figures 11-32-11-37 Relative Growth of Federal Revenues and Exr Figure 32. Federal Revenue as Figure 34. Federal Figure 36. Federal a Percent of GNP Expenditures as a 1,800 Expenditures Per Source: Appendix Table A-1 . Percent of GNP Capita From Own 40 40 Source: Appendix Table A-2. 1,600 Funds Source: Appendix Table A-2. {

i Federal, State, / Local Local II / I

ACIR, M-115, p. 7 5

Figure 33. Federal Revenues as Figure 35. Federal Expenditures Flgure 37. Social Security and Federal a Percentage of all as a Percent of Ail Aid Emerge as the Fastest Growlng Government Revenue Government Components In Our Steadliy Source: Appendix Table A-1 . Expenditures Expandlng Federal Domestic Sector, Source: Appendix Table A-2. 1954-1 978 Source: Appendix Table A-22. (Own Source Expenditures as Percentages of Gross National Product)

- Total Federal C Domestic Expenditure e L Federal

,/@/

s)0

Calendar Years (see Figure 11-36). Nevertheless compared with United States (including corporate and con- federal, state, and local expenditures per capita sumer borrowing) is so large, and expanding so (in constant dollars), the federal portion began rapidly, that there is no clear trend in federal to grow at a slower rate in the mid-1950s. The participation in this market when measured as total for all governments was continuing its a percentage of total public and private bor- rapid rise at the end of the 1970s. These trends rowing (see Figure 11-44). (in Figure 11-36) are shown in constant dollars With respect to the federal government's own to eliminate the effect of inflation. As Figure borrowing, Figure 11-45 indicates that federal 11-37 shows, the growth in Social Security and debt (as a percentage of GNP) has been de- federal aid have been the major factors raising creasing and leveling off since about 1945. total federal domestic expenditures. While federal interest payments on this debt (as a percent of GNP) also declined for awhile, RELATIVE GROWTH OF FEDERAL AID Figure 11-46 shows that they have been in- Federal payments to state and local govern- creasing rapidly since the mid-1960s, as inter- ments as a percent of GNP peaked in the 1930s est rates have climbed. Figure 11-47 confirms as GNP bottomed out, and again in the late this rise with interest payments increasing as a 1970s as a result of the rapid growth of federal percentage of the federal government's own aid programs. Figure 11-38 shows these peaks. general revenues. Moreover these payments are Figure 11-39 reveals that federal aid grew as a becoming a somewhat larger portion of the fed- percentage of federal outlays, both in terms of eral budget. By contrast state and local interest the domestic sector and total. But Figure 11-40 payments began to level off in the 1970s. At demonstrates that federal aid increased even least part of this difference stems from the more rapidly as a percentage of state and local pay-as-you-go nature of state and local gov- expenditures. Both of the figures indicate that ernments, in contrast to the purposeful deficit federal aid has begun to level off or decrease in spending of the federal government for eco- relative terms, however, as the 1970s ended. nomic stabilization and other purposes. This is confirmed by Figure 11-4 1, which shows a late 1970s drop in the constant dollar value of federal aid. Figure 11-42 discloses that the RELATIVE GROWTH OF FEDERAL growth of federal aid had its biggest impact on EMPLOYMENT AND LEGISLATIVE ACTIVITY state government in the late 1950s, but the Figure 11-48 shows that total government local impact was delayed until the mid-1960s employment in the United States (federal, state, and 1970s. These trends reflect a mixture of: (1) and local), measured as a percent of popula- improved state revenue capacity, (2) increased tion, increased very slowly until the 1940s, and federal aid going directly to local governments then rose rapidly until the early 1950s, when it or having a required pass-through from the resumed a very slow rate of growth. Figure states to localities, and (3) weakened revenue 11-49 indicates that the federal portion of the capacities at the local level. Figure 11-43 shows rise in the nation's total labor force has been the growing importance of state aid in the relatively constant [except for the years of overall mounting reliance of local governments World War 11), while the state-local portion has on outside aid. Thus even as the real buying been increasing steadily. power of federal aid begins to slacken, local By a somewhat different measure (employ- dependence on outside aid (from all sources, ment per 1,000 population), Figure 11-50 re- including a large state component) continues flects a slow decrease in federal civilian jobs in its rapid rise. recent years, along with a more erratic decline in total (civilian plus military) federal em- ployment. At the same time state and local em- RELATIVE GROWTH OF FEDERAL CREDIT ployment per 1,000 population has been in- ASSISTANCE AND DEBT creasing at ever more rapid rates throughout Despite the very significant increases in fed- this period. Total (federal, state, and local) em- eral loans and loan guarantees in the 1970s ployment dropped, by this measure, until about (noted earlier), the total credit market in the 1960, then increased rapidly through the Figures 11-38- 11-43 Relative Growth of Federal Aid ------Figure 38. Federal Payments to Figure 39. Federal Aid as a Figure 40. Federal Aid as a State and Local Percent of Federal Percent of Governments as a Outlays State-Local Percent of GNP Source: Appendix Table A-1 3. Expenditures Source: Appendix Table A-13. Source: Appendix Table A-13.

Outlays ---I ---u.,.A- - Figure 41. Federal Aid Is Figure 42. The Growing State Figure 43. State Aid as Percent Declining in and Local of Own Local Constant Dollars Dependency On Revenue 40 Source: Appendix Table A-23. Outside Aid, Source: Appendix Table A-25. A Selected Years, 1948-78 (Outside Aid as a Percent of General Revenue From Own Sources) Source: Appendix Table A-24. Local Governments1

/* State---- Governments ,--,-,- -' -

Fiscal Years est. 1900 1920 1940 1960 1980 1948 50 52 54 58 58 60 02 64 66 68 70 72 74 76 1978 Figures 11-44-11-47. Relative Growth of Federal Credit Assistance and Debt

Figure 44. Percentage of Credit in U.S. Figure 45. Gross Federal Public Debt as Market Having Federal Percent of GNP Participation Source: Appendix Table A-26. ISource: Appendix Table A-1 7.

1 L I I Figure 47. Government lnterest Percent of GNP Payments on Debt as Percent Source: Appendix Table A-26. of Own Revenue Source Source: Appendix Table A-27.

State \& Figures 11-48-11-53 Relative Growth of Federal Employment. . . Figure 48. Figure 49. Federal (and : Government 190 State-Local) 11 6 z Labor Force / j Employment ~15~andasa/ I8O as a

14 Percent of / Total ~7o Percentage [13 + ~opulation I of Labor - - 60 Force + I Source: r50 Appendix Table A-29. 140

~30

I -20 Total, / r\ , I I 1 L' 1'0 1'0 -istate & Local 1 Federal 1

and Legislative Activity Figure 50. / Figure 51. I

Governmental Total Federal I Employment Employees Per $1 I 80 Per 1000 Totalp ,80 Million of Outlays 70 Population 1 Source: 60 Appendix ',/ Table A-30. I State &j Local, All 1

Federa"% 20 Federal ! Civilian I Source: I 10 I r1 Appendix Table A-31.

,A,, , Figure 53. State and , 90 Figure 52. I r Federal I Disposition Legislative of Bills and Enactments ~ r70 Re~~lufion~Percent of , Source: Appendix Table A-33. Introduced I in U.S. ~roposa~s House of Reported '50 Representatives ~40Source. I Append~xTable A-8 I -30 and A-32. - 20 Percent of All ~10 1 ,Reported Congressional Enactments 1, 1960s, only to decrease again as the Viet Nam SUMMARY OF RELATIVE War ended. FEDERAL GROWTH FIGURES Figure 11-51 shows one additional measure of By the late 1970s almost all of the indicators federal employment-the number of federal of relative federal financial and employment employees per $1 million of federal outlays. By growth were slacking off, leveling out, or de- this measure federal employment has been de- clining. At the same time similar indicators of creasing rapidly since the early 1950s, reflect- state and local activities continued to climb. ing the growing emphasis in the federal budget The private sector remains larger in the United on: (1) grants and other forms of assistance to States than in most comparable nations. In the state and local governments, and (2) payments past two decades, the federal government has to individuals (like Social Security) which are moved rapidly to provide financial assistance essentially check-writing activities. Because of to state and local governments and payments to the relative roles of the federal, state, and local individuals, and the basic governmental work governments, actual service delivery is con- force increasingly is located in the state and centrated at the local levels, and financial and local governments. These trends suggest that regulatory responsibilities more frequently are the federal government with all its recent retained at the upper levels. Local govern- growth, may be entering a period in which ments, as a consequence, are more labor- growth according to the traditional measures intensive than state governments, and state will be much slower. As will become apparent, governments are more labor-intensive than the however, the federal government's scope of ac- federal government. tivities and depth of influence are continuing Figures 11-52 and 11-53 show the output of to expand significantly. Congress in contrast to how busy it is, as de- picted earlier by the rapid increase in Congres- sional staff (Figure 11-8), the rising number of THE SCOPE OF FEDERAL ACTIVITIES bills and resolutions introduced (Figure 11-9), and the increased number of committee meet- As has been shown, the federal government ings and hours in session of both the House has grown very large and become a powerful and the Senate (Figure 11-10). Congress is in influence-even beyond what might have been session virtually year round now, with shorter expected from the size of its budget and its breaks than in earlier years. Nevertheless Fig- bureaucracy. This growth has been especially ure 52 shows that about the same percentage of rapid in recent decades. Nonetheless when this major legislative proposals is being reported growth is measured by indicators that take into out of committee, and the percentage of all bills account the increased size of the population, and resolutions reported has been steadily de- the economy, and other levels of government, creasing since 1950.22Figure 11-53 shows that federal expansion has not been quite so star- Congressional enactments also have been tling, and now appears to be slowing, leveling slowly decreasing, while legislative enact- off, or even declining in certain respects. This ments by the state governments have been in- suggests the possibility that a maturing process creasing rapidly. Of course it should be recog- may be taking place. One way to explore this nized that major Congressional legislation now possibility further is to examine the growth of is frequently in the form of highly complex and individual federal functions. long omnibus acts which cover what might The federal government has expanded sub- have been several laws earlier, and Congress' stantially its scope of activities by enacting important investigatory and legislative over- new programs, by spending more on them-in sight functions are demanding increased time direct expenditures and income transfers as and attention without necessarily increasing well as in federal aids-and by expanding the the output of laws. Some also would argue that scope of its regulatory activities. The early what the nation needs is fewer laws, not more. years were devoted primarily to defense and Thus legislative restraint by Congress may be foreign affairs, to raising revenues, and to pro- viewed as a positive contribution in some viding postal services, but now the federal gov- ernment pursues a broad and varied set of ac- tivities that leaves few, if any, concerns of its tinued to increase substantially throughout this citizens unattended. whole period. Defense and veterans' benefits In expanding the functional scope of its ac- had some growth periods in the 1940s and tivities, the federal government appears to be 1950s, but since have been in decline as a per- following the general pattern evidenced by cent of total federal outlays. Commerce and European and other western-style democracies, transportation outlays have not been increasing as they have developed over the past 130 years. as a percent of total outlays, although there In a detailed study of 32 such nations from were brief periods of relative growth in high- 1848 until recent times, Richard Rose has way grants. Federal aid for agriculture has de- shown that these nations tend to work succes- creased in relative terms. Economic regulation, sively toward three goals (which he calls as measured by the creation of new federal reg- Stages I, 11, and 111). These are: (I) to secure ulatory agencies, has not expanded rapidly their existence as a nation, (11) to mobilize their since the early 1940s. In summary the indi- physical resources for economic development, cators of Stage I and Stage I1 have not been the and (111) to provide social benefits for their citi- big gainers in the 1940-80 time span. zen~.~~These constitute stages of development Augmenting the steady rise of income secu- to be achieved sequentially in the order named. rity programs throughout this time have been Certainly the early history of the federal gov- more recent periods of growth in educational ernment, cited above, indicates that it over- and health outlays by the federal government. whelmingly was concerned with defense, Federal aid also expanded most rapidly in the foreign relations, establishing a capital city, 1960s and 1970s in the fields of education, and caring for its policymaking machinery- training, employment, social services, health, clearly ensuring its own existence, as would be general fiscal assistance, community and re- expected in Stage I. Later years brought em- gional development, and environmental pro- phasis upon westward expansion, coastal and tection. Most of the growth in federal regula- inland waterways, encouragement to the rail- tory agencies has been in the health, safety, and roads, assistance in developing a national social equality areas. This regulatory expansion highway system, and (later, after the technol- has been backed up by very substantial in- ogy had developed) assistance in developing a creases in the funding of these regulatory agen- national airport system. Only in recent decades cies in the late 1970s. By most measures, (since the 1930s) have Stage I11 concerns such therefore, Stage I11 activities have been the big as income security, housing, health, and edu- gainers in recent decades. cation received major attention at the federal Only in federal employment is the picture level. Figure 11-54 shows how the creation of more mixed-largely because of the steady re- departments in the federal government gener- liance upon state and local bureaucracies for a ally has followed this three-stage pattern. range of aided program activities. All functions As Rose points out in the case of 32 nations, (whether typical of Stages I, 11, or 111), however, these stages are cumulative. New functions are showed some increases during part of the added, while old functions are retained. Thus period. the proportional emphases among programs Overall it is clear from Figure 11-55 that the shift. federal government now is performing or as- sisting major functions related to all three RECENT PERIODS OF stages of growth, and that much of the Stage I11 PROGRAMMATIC EXPANSION growth occurred in recent decades-especially in the 1960s and 1970s. The periods of programmatic expansion by the federal government since 1940, for a Shifting Federal Budget Priorities number of major functional areas, are sum- marized in Figure 11-55.25 Income security pro- The results of these programmatic shifts grams and the social insurance receipts to pay show up dramatically as changing priorities in for them (a major part of the income redis- federal budgets over the past 25 years (Figures tribution function) are the only ones that con- 11-56 and 11-57). As a percentage of the total

Figure 55. Periods of Major Federal Program Expansion, by Sectors

Types of Federal Receipts, as Percent of Total (Flgure 54) Social Insurance Individual lncome Corporate lncome Excise Other Federal Outlays. by type, as Percent of Total (Flgure 55) lncome Security Interest Education Health Veterans Benefits Defense Commerce and Transportation Other Federal Aid, by type, as Percent of Total (Figure 57) Transportation Income Security Education, Training, Employment, and Social Services

Health General Fiscal Assistance Community and Regional Development Natural Resources and Environment Agriculture Other Federal Employment, by Function (Flgure 72) Postal National Defense Education, Highways, and Police Natural Resources Health and Hospital Other Creation of Federal Regulatory Agencies, by Type (Flgure 79) Economic Health and Safety Social Equality Admlnlstratlve Costs of Federal Regulatory Agencles, by Type (Flgure 80) Consumer Safety and Health Job Safety and Other Working Conditions Energy and Environment Other Shifting Priorities in Federal Budgets Elements of income and spending as percentages of budgets

Figure 56. Receipts Figure- 57. Outlays # -- Veterans Other Commerce anc Excise taxes - 80% Corporation income taxes - -70% 60% Social insurance taxes - 50% - 40%

-30 '10 Individual income taxes - -20% 10%

By reading across the squares, one can see how various elements in the budget have grown or diminished over the years. For example, social insurance taxes have increased markedly as a source of income, while corpora- tion income taxes have provided less and less a share of all receipts. It can also be seen that the defense share of all outlays has been more than halved since 1954, while income security, health, and education have grown steadily as objects of spending. (Unlike those shown in the budget-dollar chart, receipts in this case do not take account of the borrowing necessary for deficit spending.) Source: Office of Management and Budget, as reported in The New York Times, January 24. 1978. D. 13.

Figure 58. The Growing Domestic Public Sector- The Relative Decline in Defense Expenditure,

(expenditures as percentage of Gross National Pro 36 l Total/ Public Sector

24 - Defense Expenditures 22 - 5 (Federal) 20 - g 18- CC~C 16 - /*@ee 14 =C-ee Domestic Expenditures, (Federal, State, and 12 - Local Levels) 10- 8 - Source: Appendix Table A-34.

Calendar years

1954 58 62 66 70 74 1E budget, defense spending has dropped from The Significance of Federal Aid in nearly 70% to only a little over 20%. At the Major Functions same time the combined expenditures for in- come security, health, and education have in- Figure 11-61 through 11-72 show the federal creased from about 10% to about 50% of all share in a number of individual functions. This outlays. Figure 11-58 shows that all levels of federal share is measured in two different ways government combined (federal, state, and local) in these figures. First, expenditures for four spend about 27% of the GNP for domestic pro- functions (education, health, social welfare, grams, as compared to 7% for defense. and income maintenance) by the private, fed- eral, and state-local sectors are compared. Shifts in the Composition Then, for these same four functions plus four of Federal Aid additional ones (highways, airports, natural re- A similar program diversification has oc- sources, and housing and urban renewal), the curred among federal grants. Dominated to the significance of federal grants as a percentage of extent of almost 80% by transportation and in- total state-local expenditures (from own come security programs in the late 1950s, the sources) for the functions is shown. Although grant system became much more diversified by this second type of measure provides only the late 1970s. As Figure 11-59 indicates in- fragmentary indications (excluding direct fed- come security and transportation programs eral expenditures), it highlights the inter- together-while still growing, themselves- governmental influence of the federal govern- had fallen below a 30% share of all grants by ment on the state-local sector. 1976, while the social benefit programs (in- Of the functions for which figures are pro- cluding health, education, training, employ- vided, the federal government plays a domi- ment, and social services) had grown to over nant role in only two-income maintenance 40% of the total. and housing and urban renewal. In the case of Table 11-7 shows the budget functions with income maintenance (which includes private big money grant programs (over $1 billion pensions and related benefit programs as well each) as they have developed since 1950. In as social security, public assistance, and re- 1950 only income security was in the big lated cash benefit welfare programs), the fed- money category. By 1960, only one other func- eral government dominates all three spending tional assistance category had reached the $1 sectors, and its grants approximately equal billion level-commerce and transportation, state-local own source expenditures. By com- due primarily to the interstate highway pro- parison the more broadly defined function of gram. By 1970 three more had reached this social welfare (which includes the whole array size: (I) education, training, employment, and of health, education, and welfare service pro- social services; (2) health; and (3) community grams in addition to income maintenance) and regional development. By 1975 two addi- shows relatively equal participation by the fed- tional functional classifications had been eral, state-local, and private sectors. Federal added: (I)revenue sharing and general purpose grants within this broader definition are equal fiscal assistance; and (2) natural resources, en- to roughly half of state-local expenditures, and vironment, and energy. they are rising. Figure 11-60 shows a similar diversification The other function in which the federal gov- in the use of federal loan guarantees. The al- ernment shows some dominance-housing and most complete dominance (97.4%) of this form urban renewal26-is measured only by federal of aid in 1950 by the U.S. Department of grants. These have grown very rapidly in re- Housing and Urban Development (HUD) and cent years, and by 1977 funded about 85% of Veterans Administration programs had been the amount spent by state and local govern- reduced to about a two-thirds share by 1979 as ments from their own funds. Of course the significant programs had been added by the public sector is dwarfed by the private sector in Export-Import Bank, the U.S. Department of this functional area. Agriculture, the Small Business Administra- In the other activities the federal govern- tion, and HEW. ment's role (both in total expenditures and in Figure 59. Percentage Distribution of Federal Grants, by Function

Fiscal Assistance

- 50 Social Services

Income Security -40

- 30

- 20

Transportation

-10 I Source: Appendix Table A-35. 1

Table 7 Grant-in-Aid Outlays of $1 Billion or More, by Function, Selected Years, 1950-80 (millions of dollars) Function 1950 1955 1960 1965 1970 1975 1980 Income Security $1,335 $1,715 $2,648 $3,530 $5,813 $9,279 $18,364 Commerce and Transportation 3,001 4,100 4,545 5,872 11,520 Education, Tralnlng, Employment and Soclai Services 5.745 11,638 21,865 Health 3,831 8,810 16,209 Community and Regional Development 2,428 3,335 5,786 Revenue Sharing and General Purpose Flscal Assistance 6,971 8,763 Natural Resources, Envlronment, and Energy 2,479 5,293 Total $2,253 $3,207 $7,020 $10,904 $24,018 $49,723 $88,945 Source: Office of Management and Budget, "Federal Government Finances," unpublished tables, January 1976, pp. 51-53, and 1981 Budget, Special Analysis 1-1, p. 251. Figure 60. Relative Shares of New Commitments for Guaranteed Loans, by Agency, Fiscal Years 1950 and 1979 (in millions of dollars) Fiscal Year 1950

Housing and Urban Developmentb $5,684 67.5%

Veterans Administration

Fiscal Year 1979

Veterans Health, Education and Welfare Administration $2,135 $1 6.704 Other 15.6% $3,155

Small Business Administration $3,530 Urban Development $54,415 Agriculture 50.8% $13,314 12.4%

Import Bank /

Source: Budget of the United States Government, Fiscal Year 1952, Special Analysis E; and Budget of the United States Government, Fiscal Year 1979, Special Analysis F. 'Data for 1979 are estimates. bcomprised of those agencies now included in the Department of Housing and Urban Development.

Source: Congressional Budget Office, Loan Guarantees: Current Concerns and Alternatives for Control, Washington, DC, US. Government Printing Office, August 1978, p. 7. The Federal ~hkeof individual Functions Figure 61. Pubilc and Private Sectors Figure 63. The Recent Dramatic increase Flgure 65. The Increasing Federal Share Finance Reiatlvely Constant in the Federal Share of Health of Social Welfare Expenditure Shares of School Expenditures and Medical Care Expenditures Selected Years. 1950-78 Selected Years,1950-79 Selected Year.1950-78 (Publ~cand Private Expenditures for Social Welfar~ (Publlc and Private Expendllures for Education as a (Public and Private Expenditures for Health and Programs as a Percent of GNP) Medical Care as a Percent of GNP) Percent of GNP) 'Studies on the private sector are not available ;ource: Appendix Table A-36. 'Studies on the private sector are not available for for years after 1975 'ercent years after 1975. Source: Table VIII. M-106. Source: mndix Table A-39.

------7 5 -

6 0 Total Publlc and -Pr~vateSectors 4 5

3 0

15

0 0 1 1 I I I I I 1950 1955 1960 1965 1970 1975 1981 -- - -- Figure 62. Federal Grants for Figure 64. Federal Grants for Figure 66. Federal Grants for Education, as a Health, as a Percent Public Welfare as a Percent of State-Local of State-Local Health Percent of Education ~x~enditures State-Local Publlc Expenditure Source: Appendix Table A-37. Welfare Source: Appendix Table A-37 Expenditures 60 60 Source: Appendix Table A-37. ~igures11-67- 11-72 The Federal Share of Individual Functions (cont.) --- Figure 67. The Federal Government Is Figure 71. Federal Grants for the Primary Underwrlter of Highways, as a Income Maintenance 90 Natural Resources, Programs, Selected Years, Percent of as a Percent of 1950- 75 80 State-Local Highway 80 State-Local Natural Expenditures Resources 70 Source: Appendix Table A-37. 70 Expenditures Source: Appendix Table A-37. 50

1950 1955 1960 1965 1970 197 F~scalYears

0 1 -) '- Figure 68. Figure 70. Federal Grants for Figure 72. Federal Grants for Federal Grants for 90 Airports, as a I0 Housing and Urban Social Insurance, as Percent of ~enewi,as Percent a Percent of BO State-Local Airport of State-Local State-Local Social Expenditures Housing and Urban Insurance 70 Source: Appendix Table A-37. Renewal Expenditures I Expenditures Source: Appendix Table A-37. 60 Source: Appendix Table A-37.

50

40 grants) is small. Education is dominated by the fense and postal services, which are preemi- state-local sector, and the federal contribution nently federal. These figures indicate that natu- is even smaller than the private sector's. Health ral resources is the only function in which the and medical care are still primarily private, federal employment is dominant. In this case although federal contributions have been there also is substantial state employment, but growing so that they now are much larger than very little local. Federal employment in health those of the state and local governments. Fed- and hospitals is significant, but still very much eral grants for highways, airports, and natural less than either state or local. Roughly the same resource programs still are small (about picture emerges for the category of "other" 20-30%) compared with state-local expendi- domestic functions, although a larger share is tures for these functions. local and the state share is similar to the federal one. Federal employment in education and highways is very small, with local government Functional Shifts in dominating the education function while the Federal Employment state and local governments divide highway employees almost equally. Local employees Figures 11-73 and 11-74 compare employment dominate the police protection function, with in various functions between the federal gov- the state and federal governments having ernment and all governments combined (fed- roughly equal small shares. eral, state, and local). From the 1950s through In summary, state and local employees the 1970s, there has been relatively little dominate all functions except national defense, change within the federal government. A mod- foreign affairs, postal services, and natural re- erate overall decline, reflecting the long-term sources. reduction in national defense forces along with very modest increases in some other functional Expansion in the Scope of fields, has left federal employment very largely Federal Regulation in two functions-national defense and postal service. Modest growth from a relatively large Figure 11-81 shows that the federal govern- base has been recorded in postal employees ment's earliest regulatory agencies were and in the category of "other," while modest created for purposes of economic regulation. growth also has been recorded from a small Later agencies began to be added for health and base in health and hospitals and natural re- safety regulation. Finally units began to be es- sources, and from a very small base in police. tablished to apply pressure for greater social Federal employment in education and high- equality. Of course there is substantial overlap ways is very small and fairly stable. of new initiatives among these three fields as By contrast total public sector employment older programs are updated and augmented in the United States (aside from defense and and as each field expands to meet present postal services, which are preeminently fed- needs. The 41 major federal regulatory agencies eral) has been rising substantially. In two created since 1863 are listed in Table 11-8 by categories-education and "other"-this the three categories of regulation and the year growth has been on top of a large base of pre- in which the agency (or its predecessor agen- viously employed workers. Total public em- cies) was established. Of the 14 new regulatory ployment in health and hospitals also has been agencies created in the 1960s and 1970s, just increasing substantially, but from a small base. one was concerned with economic issues, six The remaining functions of natural resources, with health and safety, and seven with social highways, and police have expanded moder- equality. ately from a small base. Figure 11-82 shows that the funding for all Total public sector employment is much regulatory agencies at the federal level in- more diversified and balanced than federal creased very rapidly in the late 1970s. The con- employment alone. Figures 11-75 through 11-80 sumer safety and health agencies' expenses show the federal share of public employment in were the largest and have the second most these same functions, excluding national de- rapid growth. The energy and environmental Figures 11-73- 11-74 Government Employment, by Function

- -- - 73. Government Employment, by Figure 74. Federal Employment, by Function Function (federal, state and local combined) Source: Appendix Table A-41. 118 Source: Appendix Table A-41. / Total

Other

Natural Resources Highways Health & Hospitals \ Education - 6 ,3 National Defence

- 4

National Defense -2 1 Health and Hospitals Natural Resources Education, Highways Postal and Police I I I 1940 1950 1960 1970 19 Figures 11-75- 11-80 - Composition of Public Employment, by Level of Government, Selected Functions I Figure 75. Government Figure 76. Government Figure 77. Government 7 Employment in Employment in Employment in Police - 700 Education, by Level Highways, by Level 700 Protection, by Level Source: Appendix Table A-41. Source: Appendix Table A-41. Source: Appendix Table A-41. 6 / 600 600 - U) Locat C J .-0 4 f E .-C - Local 3 2 i PState 100 , lFe?eral Federal I I I I I I I I Figure 78. Government Figure 79. Government Figure 80. Government Employment in I 1400 Employment in Natural Employment in All Other and Hospitals, Resources, by Level Domestic Functions, by Level Source: Appendix Table A-41. Excluding Postal 1200 3 Services, by Level Source: Appendix Table A-41. Local Source: Appendix Table A-41. / 000 / Local

1State Figures 11-81 and 11-82 Growth of Federal Regulation, by Type 20 Figure 81. Creation of Federal Regulatory Agencies by Type (graphed cumulatively over time) Source: Table 8.

I Economic I Regulation / / Health & Safety / Regulation 0 J 0' I I I R0 ' I t I J /' Social Equality /

Figure 82. Administrative Costs of 41 Federal Regulatory Agencies, by Type (fiscal years; dollars in billions) I5 Source: Appendix Table A-42.

other/ Energy & / Environment

WorkingJob Safety Conditions & other/ Consumer Safety & HealthJ: Table 11-8 MAJOR FEDERAL REGULATORY AGENCIES, BY TYPE AND YEAR FIRST ESTABLISHED (counting predecessor agencies)

I. Economic (20 agencies) Comptroller of the CurrencyIDepartment of the Treasury Interstate Commerce Commission Federal Reserve System Federal Trade Commission Packers and Stockyards AdministrationIDepartment of Agriculture Federal Maritime Commission Federal Grain Inspection Service Agriculture Marketing Service Federal Energy Regulatory CommissionIDepartment of Energy Commodity Futures Trading Commission Federal Home Loan Bank Board Federal Deposit Insurance Corporation Commodity Credit Corporation Agricultural Stabilization & Conservation Service Securities and Exchange Commission Federal Communications Commission National Labor Relations Board Civil Aeronautics Board Council on Wage and Price Stability Cost Accounting Standards Board

11. Health & Safety (13 agencies) 1883 Animal and Plant Health Inspection Service 1907 Food Safety and Quality Service 1907 Food & Drug Administration, Department of Health, Education and Welfare Drug Abuse, 1962 Cigarettes, 1966 1910 Mining Enforcement and Safety Administration, Department of the Interior Coast Guard, Department of Transportation (Boating Safety) Federal Aviation Administration, Department of Transportation (Air Safety) Nuclear Regulatory Commission National Highway Traffic Safety Administration, Department of Transportation Federal Railroad Administration, Department of Transportation (Rail Safety) Environmental Protection Agency Air Quality, 1970 Water Quality, 1972 Noise Abatement, 1972 Drinking Water, 1973 Occupational Safety and Health Administration Consumer Product Safety Commission Drug Enforcement Administration, Department of Justice

Ill. Social Equality (8 agencies) 1931 Employment Standards Administration, Department of Labor 1 964 Civil Rights Division, Department of Justice 1 964 Equal Employment Opportunity Commission 1 968 Consumer Credit Protection 1973 Office of Human Development, Department of Health, Education and Welfare (Handi- capped) 1974 Energy Conservation 1974 Labor-Management Services Administration, Department of Labor (Employees Pen- sion Programs) l974/76 Federal Election Commission

SOURCE: Office of the Federal Register, 1977178 United States Government Manual, Washington, DC, U.S. Government Printing Office, 1977; and Louis M. Kohlmeier, The Regulators, New York, NY, Harper 8 Row, 1969, Appendix, pp. 307-12. agencies' expenses were rising most rapidly, THE DEPTH OF FEDERAL INFLUENCE putting them in second place by size. The job safety and other working conditions agencies Up to this point the growth of the federal rank third and were growing nearly as fast as government has been described largely apart the consumer safety and health regulatory from its effects. It has been shown that the fed- agencies. The "other" agencies bring up the eral government now is: (1) purchasing more rear in both present size and rate of growth. goods and services than ever-although its As with the creation of federal agencies in own direct employment has not increased general, the establishment of regulatory agen- much in recent years; (2) regulating and taxing cies has been cumulative, adding new func- more than ever before; (3) providing more aid tions while rarely subtracting old ones. New to a wider range of governmental units; and (4) types of federal regulatory activity initiated for redistributing income increasingly through the the first time in the 1960s and 1970s (as op- rapid rise in transfer payments. These various posed to being expanded from an earlier estab- means of influence not only have grown in tra- lished base) were almost exclusively in the so- ditional program areas, but also have been cial benefits realm, rather than economic de- applied to a rapidly expanding array of re- velopment (using Rose's terms). Overall the cently enacted programs, in the effort to in- federal government now has a very diverse and crease benefits and services. Some of the newer broad-ranging set of regulatory agencies. program areas (such as civil rights and en- vironmental protection) have been subject to heavy litigation in courts where a rapid in- crease in the number of civil cases filed has Implications of the been noted. The federal government clearly is Expanding Scope of Federal Activities using more means of influence, using them more frequently (except for performing services By any measure except employment, the fed- directly using its own employees), and is ap- eral government has become a Stage I11 opera- plying them to more program areas-all for the tion. It now has a broad array of programs, purpose of providing public benefits. spread among all three of the basic goals of The overall effect of this enlarged federal government stipulated by Prof. Rose. This was presence is much larger than could be exerted accomplished largely by the addition of social by those programs that the federal government benefit programs since the 1930s, with the pace operates itself. More important than these are accelerated in the 1960s and 1970s. Neverthe- the impacts of regulatory programs, tax incen- less the federal government's employment tives (sometimes referred to as tax expendi- characteristics remain similar to those estab- tures), financial assistance to others (combined lished at the nation's founding-heavily with the various administrative requirements oriented toward national defense and postal and contractual conditions attached thereto), services. Most domestic programs, even where plus the associated paperwork and litigation in federal expenditures are very significant, the courts. Obviously the total influence is largely rely on state and local employees for large. Yet this still is not the full story. their implementation. This section probes two additional questions: This situation suggests the continuing vital- who is affected by the federal presence? HOW ity of the federal principle and the distinctive are they affected-for good or for ill? Quan- way in which the United States has pursued titative answers to these questions are not as the three-stage developmental pattern. It also available as are the measurements associated underscores some of the basic challenges con- with the size and scope of federal influences. fronting contemporary public service arrange- Nevertheless, there are some, and they can be ments in the United States, for inter- supplemented with descriptive information. governmental administration of programs is a Figure 11-83 illustrates graphically how the very different (and infinitely more difficult) one-dimensional analysis of the growth of fed- method of implementation than direct admin- eral activities (means of influence) interrelates istration. with the frequency of effects on outside parties 1 I Figure 83. Factors in Federal Influence and with the nature of these effects. This (which has leveled off just above 90%); the suggests the need for a three-dimensional anal- most rapid periods of increase for the income ysis which can yield some approximate overall tax and social insurance were in the 1940s and measurements of the effects and influence of 1950s, and for welfare in the 1960s. The high the federal government. Ideally this analysis levels of participation indicate that saturation would be carried out separately for each federal may be nearing. program or group of programs and then aggre- Business gated to create a composite picture of federal influence. Such a detailed analysis, however, is Businesses and other private sector organiza- beyond the scope of this study. Instead a more tions are equally caught up in the web of federal general approach is taken. influence. Herbert Kaufman of the Brookings In- This approach entails examining: (1) a few stitution has described this in his recent seminal indicators of the extent to which individuals study of red tape: and families, businesses (and other private or- Today, you can hardly turn around ganizations), and state and local governments without bumping into some federal re- are caught in the web of federal influences; and straint or requirement. It wasn't always (2) a few indicators of the different types of so; there was a time you could embark federal influence and the benefits and burdens on almost any venture without encoun- they create. tering a single federal constraint. Now, As this brief and general analysis unfolds, it however, if you should take it into your will become clear that virtually all individuals, head, say, to manufacture and market a businesses, and state and local governments in new product, you would probably run the nation are affected in a variety of different into statutes and administrative regula- ways by federal programs that impose burdens tions on labor relations, occupational while they create and redistribute benefits. safety, product safety, and air purity. These burdens appear inherent in the process Your advertising would probably fall of government.27 The challenge, then, is to within the jurisdiction of the Federal maximize benefits and distribute them equita- Trade Commission. The Department of bly while minimizing unnecessary burdens. Justice would be interested in your rela- The first step toward this goal would appear to tions with your competitors. Should you be developing more and better measurements want to raise capital by the sale of stock of these benefits and burdens as they affect the or bonds, you wo-ld fall under the Se- various segments of the public. curities and Exchange Commission. You would need export licenses from the Incidence of Federal Influence Department of Commerce to sell your product in some areas of the world. Fed- Individuals eral prohibitions against race, age, and Most individuals in the United States now sex discrimination in hiring and promo- are directly affected by federal activities. This tion would apply to you. If you were to situation is indicated by a few examples in extend credit to your customers, you Figures 11-89 through 11-88. These figures indi- might fall under the truth-in-lending cate that a little over 80% of the population is laws. You would have to file sundry re- covered by the individual federal income tax, ports for tax, social security, pension, while about 90% of the persons on payrolls are and census purposes. In some fields- covered by the Social Security system and un- communication, transportation, energy, employment insurance, and nearly 8% of the insurance, and banking, for instance- population receives some form of public assist- restrictions and oversight are especially ance. Of those persons 65 years of age and stringent. But firms of all kinds, large older, slightly over 90% are receiving Social and small, are subject to diverse federal Security payments. All of these figures have requirements. You can't just start and continued to grow in recent years, except the run a business without reference to fed- percent of payrolls covered by Social Security eral specifications and officials. Income Tax Social lnsurance Welfare Figure 84. Percent of Figure 85. 90 Population Covered by -90 Percent of Assistance Federal Individual Civilian Recipients 80 IncomeTax A -80 Payrolls l6Source: Appendix Table A-46. Covered by : OASDHI -70 Major Social / Unemployme Insurance : lnsurance -60 Programs / I I -50 II I I I - 40 I I II I - 30 I I II I - I 20 II Source: Appendix ,I' Source: -10 Table A-43. ,' Appendix Table A-44 I 1 I 1920 1940 1960 19 A 1'000 Figure 86. (OASDHI) Figure 88. Number of Public -goo Number of -90 Assistance Federal Social Participants per -80° lnsurance - 80 1,000 Population Beneficiaries per Source: Appendix Table A-46. -700 1,000 Population 65 and Older -.600 Source: Appendix Table A-45. -500

-400 -300 / Business is not the only activity af- goes directly from the federal government to the fected this way. Labor unions, founda- school system.31 Federal aid distributed by the tions, political parties, universities, lob- states is virtually universal among the 15,174 in- byists, and even farmers are similarly dependent school districts, and also is quite constrained. Every recipient of govern- prevalent among the 1,386 dependent school ment subsidies, loans, and other forms systems. Even private schools are deeply en- of public assistance finds these benefits meshed in federal aid; almost 82 % of those at the come with conditions and obligations elementary and secondary levels receive such that have to be satisfied. The govern- aid.32 Yet according to the 1977 Census of Gov- ment's reach is very long.28 ernments, only 8.1% of all public school system revenue is derived from federal aid. Still, this One of the reasons for this all-pervasive pres- small amount brings these units under numerous ence of the federal government is the change in detailed grant requirements. recent years from regulating only specific indus- Finally, special districts, which are the most tries to regulating a number of general concerns, numerous type of government in the United which cut across all industries. This situation is States, also share in federal aid to a large extent. shown graphically in Figure 11-89. In this figure The figures are imprecise, but it is known that the vertical lines indicate the traditional regula- intergovernmental revenues (including state and tion of individual industries or sectors of the local as well as federal) account for 30.1% of economy, while the horizontal lines indicate the special district reven~es,3~and about 10,000 of newer cross-cutting regulations aimed at pro- the 26,000 special districts (38%) are eligible for tecting consumers, workers, minority groups, federal aid. These include districts for soil con- and the environment. These add to the burdens servation, housing and urban renewal, sewerage, of previously regulated sectors of the economy, hospitals, libraries, and transit systems. and they bring many new sectors under federal influence. But, obviously, they also attempt to Adding the 50 states and totaling the above protect the broad spectrum of consumers, work- mentioned governments yields an estimate that ers, minorities, and citizens. about 63,000 of the nation's approximate 80,000 units of state and local government (nearly 80%) State and Local Governments probably are receiving federal funds. In addition Most state and local governments also are virtually all of the increasingly numerous sub- under heavy federal influence, often at their own state regional organizations are dominated by request. Nothing demonstrates this better than federal aid, which contributes well over 80% (on the growth of federal aid previously noted in this the average) of their budgets. This adds almost chapter. Prior to 1972 many of the smaller coun- another 2,000 governmental organizations to the ties, municipalities, and townships did not re- total public recipients of federal aid.34 ceive federal aid, perhaps largely because of con- Federal aid obviously has a pervasive effect on straining eligibility requirements and the spe- state and local government. The substate regional cialized staff effort required to apply for, and organizations, with such a high percentage of administer the available funds.29With the advent their budget coming from federal aid, probably of the General Revenue Sharing program in that are the most greatly influenced of the state and year, however, all the states and virtually all of local units. Their funds are mostly categorical these general purpose local governments now re- grants which have quite firm and detailed pro- ceive and spend regular quarterly payments from gram requirements, as well as a number of gen- the federal government without even applying eral requirements affecting virtually the whole for them. At latest count 37,704 state and local federal aid system. Table 11-9 shows the broad governments receive these payments, out of a range of these generally applicable grant re- total of 38,776 such government^.^^ quirements. They cover nondiscrimination, en- Public school districts also are deeply embed- vironmental protection, planning and project ded in the federal aid system. Virtually all of the coordination, relocation and real property ac- nation's 16,500 public school systems receive quisition, labor and procurement standards, federal funds. About 80% of this aid is distrib- public employee standards, and access to gov- uted through the states, while the remaining 20 % ernment information and decision processes. Figures 11-89-11-91 Growing Federal Influence over Business and Government Regulation Affects All

Figure 89. Variations in Federal Regulation of Business Category of Industry or Sector of the Economy

Railroads Radio Manufacturing and and Defense Interest Regulatory Agency Trucking Airlines TV Utilities Drugs Autos Products Other Group -- --pp--p

Consumer Product Safety Consumer Groups Commission Occupational Safety and

Health.~ Administration Labor Unions Equal Employment Opportunity ,------Civil Rights Commission Groups Environmental Protection I Ecoloaists Agency - ICC CAB FCC FERC FDA Traffic Renego- Safety tiation Admin. Board

Source: Murray L. Weidenbaum, The Costs of Government Regulation of Business, A Study Prepared for the Use of the Joint Economic Committee, 95th Congress, 2nd Session, Joint Committee Print, April 10, 1978, Washington, DC, U.S. Government Printing Office, 1978, p. 9.

Federal Aid Dominates More Litigations Spreads -- Figure 90. Percent of State Agencies Receiving 50% or More of Appellate Courts, Per Budget from Federal Aid Million Population Source: Appendix Table A-1 5. i 1 Source. Appendix Table A-1 0. I

U.S. Circuit Court of Appeals

U.S.J Supreme Court I Table 11-9 MAJOR SOURCES OF GENERAL NATIONAL POLICY OBJECTIVES APPLICABLE TO GRANT PROGRAMS Nondiscrimination Age Discrimination in Employment Act of 1967 Architectural Barriers Act of 1968 Civil Rights Act of 1964. Title VI, VII Education Amendments of 1972, Title IX Education for All Handicapped Children Act of 1975 Equal Pay Act of 1963 Executive Orders 11141 (1963) and 11246 (1965), Nondiscrimination in Employment by Government Contractors and Subcontractors, Executive Order 11764, Nondiscrimination in Federally Assisted Programs, 1968 Executive Order 11914, Nondiscrimination with respect to the handicapped in federally assisted programs, 1976 Rehabilitation Services Act of 1973, Section 504 State and Local Fiscal Assistance Act of 1972 Urban Mass Transportation Act of 1964, as amended 1970, Section 16 Environmental Protection Clean Air Act of 1970, Section 306, and Federal Water Pollution Control Act, Section 508, 1970 Endangered Species Act of 1973 Flood Disaster Protection Act of 1973 National Environmental Policy Act (NEPA), 1969 National Historic Preservation Act of 1966 Planning and Project Coordination Demonstration Cities and Metropolitan Development Act of 1966, Section 204 lntergovernmental Cooperation Act of 1968, Title IV Relocation and Real Property Acquisition Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 Labor and Procurement Standards Davis-Bacon Act, 1931, (as incorporated into individual grants when enacted) Office of Federal Procurement Policy Act, 1974 Urban Mass Transportation Act of 1964, as amended, Section 13c Work Hours Act of 1962 Public Employee Standards Anti-Kickback (Copeland) Act (1934, '46, '60) Hatch Act (1939, '40, '42, '44, '46, '62) lntergovernmental Personnel Act of 1970 Access to Government Information and Decision Processes Citizen Participation (numerous grant programs in past three decades) Family Educational Rights and Privacy Act of 1974 (Buckley Amendment) Freedom on lnformation Act, 1974 Privacy Act of 1974

SOURCES: The Federal Grants Reporter. National Reporter Systems, Inc., 1976; Evelyn Idelson, "1976 Perspective of Title VII," County News, Washington, DC, National Association of Counties, April 19, 1976, p. 9; and AC~Rstaff, Even the school districts, which receive only no particular direction. 8.1% of their funds from federal aid, are subject Programs in this field make an unpre- to many of these same requirements. And the dictable impact on our society and our General Revenue Sharing program, which affects economy. The world of inter- almost 38,000 state and local units and was de- governmental relations is represented by signed specifically to have the fewest possible no policymaking body-there is no federal requirements on recipients, carries with it executive, no legislative, and no the following restrictions: a prohibition on the judiciary . . . . use of funds for lobbying purposes, requirements Evidence that this field makes a major for citizen participation, restrictions on debt re- impact on the lives of all Americans can tirement with revenue sharing funds, compliance be found in its involvement in such with the prevailing wage provisions for con- matters as highways, housing, public as- struction projects under the Davis-Bacon Act, re- sistance, hospitals, airports, public quirements with respect to wage rates for em- health, unemployment compensation, ployees of recipient governments, protections education, agricultural extension, and against discrimination in recruitment and em- waste treatment facilitie~.~~ ployment of various sectors of the population, This was before President Johnson's "creative prohibitions against discrimination by subcon- federalism," Nixon's "new federalism," and tractors, and restrictions against discrimination Carter's "new partnership." These recent trends in the provision of municipal services or the magnify the concerns of many observers about selection of facilities to be financed with federal the complexity and centralizing tendencies of the funds. Although this list leaves out some of the contemporary system of intergovernmental re- generally applicable requirements, there is still a lationships. very substantial federal presence in even this It is little wonder, therefore, that the national "least intrusive" federal program, and it affects associations of state and local governments have more subnational governments than any other. been providing, in recent years, special annual Figure 11-15, presented earlier, showed that conferences on national affairs, with urgent ap- about 74% of the total state agencies now receive peals for their members to attend. In a recent ad- federal aid. Figure 11-90, also included pre- vertisement for its annual legislative conference, viously, indicates that the percentage of state the National League of Cities posed this rhetori- agencies receiving 50% ,or more of their budget cal question: "What is the most powerful influ- from federal aid has increased from about 10% in ence on your city today?" The answer provided the mid-1960s to over 25% in the late 1970s. was: Thus the states also face growing federal influ- ence within their programs. The single most important influence In brief, the growing federal influence on state on most American cities is the federal and local governments, which worried Sen. government. Daily in Washington, Con- Muskie in 1962 when the Senate Subcommittee gress, the federal agencies, and the on Intergovernmental Relations was established, White House make decisions that effect has intensified. At that early date he described the way your city is run. intergovernmental relations as the "hidden di- The federal government . . . mandates mension of government" and expressed the hope costs that influence the way you allocate that his subcommittee would help to define and your city's budget. It has a lot to say identify it, "to understand what it is and what its about whether your city can proceed potential is, and in what directions it is moving." with maintenance or construction of He went on to explain: sewers, streets, and other essential Performing as almost a fourth branch facilities. It affects your local decision- of government in meeting the needs of making process in a hundred other our people, it [intergovernmental re- ways.36 lations] nonetheless has no direct electo- rate, operates from no set perspective, is The growth of federal regulation and of the under no special control, and moves in rules and regulations accompanying the growth of federal aid have spawned a great deal of addi- means that, on the average, these major functions tional civil litigation. Although there is no pre- of government lie somewhere between equal fed- cise measure of how much litigation has grown eral and state responsibilities, and federal pre- out of federal relationships with the business dominance supplemented by a significant, community and the state and local governments though secondary, role for the state and local on these counts, Figure 11-91 (presented earlier) governments. does indicate that increasing numbers of civil All of the functional shifts occuring since cases are reaching the federal appellate courts, 1964 are toward greater federal influence. With even when adjusted for population growth. Fig- regard to civic rights (function 4, which in- ure 11-92 correlates the recent caseload increase cludes basic civil rights and voting rights), with the enactment dates of major new federal basic policy now is controlled by the federal regulatory programs. government, with the state and local govern- Considering all forms of federal influence in ments in an administrative posture. As to mor- relation to the activities of the state and local ality (function 5), the federal government has governments, the federal government had been begun to take a significant role in issues such growing more important throughout its history. as abortion, ethics in government, fair cam- Table 11-10 shows this situation in terms of the paign practices, truth in lending, truth in degree of centralization in the United States for labeling, and violence on television. Under 17 basic functions of government. This rating utilities (function 9), the federal role has in- system was devised by William H. Riker over a creased with respect to the regulation of decade ago, and he defined the degrees of cen- drinking water; control of water pollution; as- tralization as follows: sistance for sewerage systems; increased influ- ence over energy allocations, prices, and usage; 1. The functions are performed exclu- and the predominant role in nuclear power sively or almost exclusiviely by the production and safety. Finally in health (func- federal government. tion 16), the federal role in financing health 2. The functions are performed perdo- care services has become predominant. minantly by the federal government, With the movement of the federal govern- although the state governments play ment into the function of morality, the state a significant secondary role. and local governments no longer are exclu- 3. The functions are performed by fed- sively or almost exclusively responsible for any eral and state governments in about of these 17 functions. Yet the federal govern- equal proportions. ment retains only two functions in which it is 4. The functions are performed pre- exclusively or almost exclusively responsible- dominantly by the state govern- external affairs (function 1) and money and ments, although the federal govern- credit (function 7). Thus most programs are ment plays a significant secondary partnerships in the American federal system. role. The federal government is the senior partner in eight programs, an equal partner in three, and a 5. The functions are performed exclu- junior partner in only four. sively or almost exclusively by the state governments. The Nature of Federal Influence - The functions were not recognized to The results of federal activities are both exist at the times3' positive and negative. On the positive side, Using the same scheme, the ACIR staff brought benefits obviously are created and redistributed the table up to date by indicating its judgment and services are provided to improve the well- about the centralization of functions in 1979. In being of the nation and its citizens, although the decade and a half since 1964, when Riker's some would argue that this applies only to book was published, the centralization trend has some, not all, of the federal government's direct continued, with the average degree of centraliza- and intergovernmental activities. On the nega- tion moving toward the federal government from tive side, however, federal actions can limit the a measure of 2.8 to the figure of 2.5. This result discretion of other parties about what they do Fiaure 92

Fiscal 1960-76

('effective 7/4/67) Source: Administrative Office of the US. Courts. ource: Linda E. Demkovich, "The Clogged Federal Courts-Who Are the Culprits?", National Journal, 211 1/78, p. 223. Table 11- 10 THE DEGREE OF CENTRALIZATION IN THE UNITED STATES, BY SUBSTANTIVE FUNCTIONS AND AT POINTS IN TIME

Circa Circa Circa Circa Circa Functions 1790 1850 1910 1964 1979

1. External affairs (militaryldipiomatic) 2. Public safety 3. Property rights 4. Civic rights (liberties and voting) 5. Morality (social values and norms) 6. Patriotism (instill allegiance and pride) 7. Money, credit, and banking 8. Transport and communication 9. Utilities (sewices and regulation) 10. Production and distribution 11. Economic Development (subsidies) 12. Natural resources 13. Education 14. indigency (aid, including the handicapped) 15. Recreation and culture 16. Health (services and regulation) 17. Knowledge (research, patents, copyrights, etc.) Avewe

SOURCE: William H. Riker, Federalism: Origin, Operation, Significance, Boston, MA, Little, Brown & Co., 1964, p. 85; 1979 judgments supplied by AClR staff. and how they do it, and can also place burdens number of examples of the language used in on their resources while creating side effects in formal federal preemption statutes.39 The the economy such as inflation and loss of pro- examples include the following: ductivity. These negative effects are depicted The Flammable Fabrics Act stipulates: in Figure 11-83 under the "nature of influence" "This act is intended to supersede the where they are called policy overrides, detail of law of any state or political subdivision requirements, costs, and side effects. thereof inconsistent with its provisions." There is no doubt that these negative effects exist. Table 11-21 lists some of the most fre- The United States Grain Standards Act quent ways in which the burdens of federal in- forbids states or political subdivisions to fluence on affected parties (individuals, busi- "require the inspection or description in nesses, and state and local governments) are accordance with any standards of kind, expressed. There is an exclamation point at the class, quality, condition, or other end of each statement, because these burdens characteristics of grain as a condition of frequently are expressed as screams of anguish. shipment, or sale, of such grain in in- They are cries against federal preemption of terstate or foreign commerce, or require state and local responsibilities; against heavy any license for, or impose any other re- handed federal supervision over how national strictions upon, the performance of any goals should be accomplished; against feder- official inspection function under this act ally imposed red tape, delays, and cost over- by official inspection personnel." runs; and against counterproductive effects of The Radiation Control for Health and federal activities on the economy. Each of these Safety Act of 1968 forbids state and local four negative effects is examined briefly below. governments "to establish . . . any stan- dard which is applicable to the same as- FEDERAL PREEMPTION OF POLICIES pect of the performance of such product Although federal regulatory activities, aid and which is not identical to the federal programs, and tax incentives long have had the standard." objective of substituting federal policies for Zimmerman's examples of more limited those of other governmental levels or the natu- types of federal preemption are: ral inclinations of individuals and businesses, both the scope and intensity of these objectives The Gun Control Act of 1968: "No provi- have increased in recent years to the point sion of this chapter shall be construed as where it is common now to hear this phenome- indicating an intent on the part of the non discussed in terms of federal preemption Congress to occupy the field in which and supersession. Quite a body of literature has such provision operates to the exclusion grown up along these lines since 1975. of the law of any state on the same sub- ject matter, unless there is a direct and This literature points out that the substitu- tion of federal policies sometimes is accom- positive conflict between such provision plished directly, through statutory language and the law of the state so that the two that explicitly states that it supersedes state can not be reconciled or consistently and local legislation, and indirectly by offering stand together." grants and other benefits to those who follow The Drug Abuse Control Amendments of federal policies.38 In addition it has been 1965 contains a provision similar to that shown that some federal preemptions are com- in the Gun Control Act. plete, occupying the whole field and leaving The Federal Railroad Safety Act of 1970 no room for additional policies to be estab- specifically authorizes states to adopt lished by others. At the same time others sim- laws, rules, regulations, orders, and ply establish minimum standards and allow standards relating to railroad safety that such standards to be exceeded or supplemented are more stringent than the counterpart in ways not inconsistent with stated national federal ones "when necessary to elimi- objectives. nate or reduce an essentially local safety Prof. Joseph Zimmerman has compiled a hazard, and when not incompatible with Table 11- 11 SYMPTOMS OF THE BURDENS OF FEDERAL INFLUENCE (as frequently expressed by affected parties)

Individuals The federal government is slowing busi- Federal taxes are too high! ness volume and employment! Federal tax forms are too complicated! Federal burdens discriminate against It takes too long and is too hard to fill them small businesses, making it hard for out! them to form and continue to exist! Some federal programs are demeaning! Federal benefits are inadequate! State and Local Governments Federal protections from bad business The federal government is altering our practices are inadequate! own priorities! Certain types of basic needs are not being The federal government allows too little addressed at all by federal programs! state and local discretion concerning The federal government is too remote! how to meet national objectives! Congress is too insensitive! We must spend too much time (and Federal program administrators are insen- money) on federal red tape and pa- sitive and ignorant of the system they perwork! work under! Federal assistance is hard to get and ad- The federal courts are simplistic, overly minister! It requires too much assertive, and overbearing! grantsmanship! The federal government is unable to set The federal government mandates too realistic priorities; it can only orchestrate many activities on us without paying for interest group pressures! them! (or with inadequate reimburse- ment!) Businesses The federal government makes too many The federal government is costing us decisions affecting state and local gov- money; reducing profits! ernments, without consulting them! Federal papenwork is too burdensome and The federal government shows little much of it is unnecessary! Too much capacity in implementing its own pro- time is spent keeping records, filing re- grams, but pretends to possess it with ports, and responding to government ours! surveys! The federal government is increasing the costs of our products! SOURCES: Murray L. Weidenbaum, The Costs of Federal regulation is reducing competi- Government Regulation of Business, A study tion! prepared for the Subcommittee on Economic Stabilization of the Joint Economic Committee, The federal government is causing infla- 95th Cong., 2nd Sess., Washington, DC, U.S. tion! Government Printing Office, April 10, 1978; Ad- The federal government is reducing pro- visory Commission on Intergovernmental Rela- tions, The Intergovernmental Grant System as ductivity! Seen by Local, State, and Federal Officials, The federal government is slowing inven- A--,Washington, DC, US.Government Printing tion, innovation, and entrepreneurial ac- Office, March 1977; Advisory Commission on lntergovernmental Relations, Changing Public tivity! Attitudes on Governments and Taxes: 1979, S-8, The federal government is slowing capital Washington, DC, U.S. Government Printing Of- formation! fice, 1979. any federal law, rule, regulation, order, court from asserting jurisdiction under or standard, and when not creating an state law over any occupational safety or undue burden on interstate commerce." health issue with respect to which no The Safe Drinking Water Act stipulates [federal] standard is in effect." that "A state has primary enforcement re- Many other federal laws fail to contain sponsibility for public water systems" explicit preemption language, but have been provided the Administrator of the En- interpreted by the courts to supersede state and vironmental Protection Agency deter- local laws that are inconsistent with their na- mines that the state "has adopted drink- tional objectives. ing water regulations which . . . are no The net result of these complete and partial less stringent than" national standards. federal preemptions of both the direct and indi- Should a state fail to adopt or enforce rect types has been the creation of five classes such standards, the agency would apply of federal preemption. These have been stated national standards within that state. in layman's terms, with examples, by Jason The Wholesome Meat Act grants the Sec- Boe, president of the Oregon Senate, as follows: retary of Agriculture the authority to in- spect meat and transfer the responsibility 1. "If you don't, we will." to a state that has enacted a law requiring The Occupational Safety and Health meat inspection and reinspection con- Administration and the recent effort sistent with federal standards. This act to impose federal "minimum" also allows states to transfer responsibil- standards for no-fault auto insurance ity for inspection of meat for intrastate are outstanding examples. commerce to the U.S. Department of Ag- 2. "If you don't do this, you won't get riculture. To date, 18 states have initiated this." such a transfer. Or, if you don't pass a maximum 55 The Poultry Products Inspection Act mph speed limit, we won't give you contains provisions similar to the Whole- federal highway funds. If you don't some Meat Act and a total of 26 states institute annual audits of all your have transferred responsibility for in- programs, you won't get you+ rev- specting poultry products to the U.S. De- enue sharing funds . . . . partment of Agriculture. 3. "If you don't do this, others will lose The Occupational Safety and Health Act that." of 1970 encourages states to assume re- If a state does not meet federal sponsibility for the development and standards under the unemployment enforcement of safety and health stan- compensation program, employers dards meeting federal standards by sub- in the state lose valuable federal tax mitting a state plan to the Secretary of credits. This approach is currently Labor for approval. To date, 24 states favored as a means to force federal have submitted plans that have been ap- worker compensation standards. Re- proved by the Secretary (but the strict cent Internal Revenue Service nature of the federal standards, difficulty rulings-which we are contesting- of enforcement, and inadequacy of fed- hold that if states don't file detailed eral financial support have not attracted reports and meet other federal many other states to participate, and at standards for their employee pen- least three states-New York, New Jersey, sion benefits, employees will be and Illinois -have been prompted to taxed on their contributions. withdraw entirely from programs they 4. "If you will, we will put up most of had been pursuing40). This act differs the money." from the Wholesome Meat Act and Poul- If you, the state governments, will try Products Inspection Act by containing spend a million dollars on social a section stipulating that "nothing in this services, we, the federal govern- act shall prevent any state agency or ment, will add $3 million to make a Table 11-12 BREAKDOWN, BY CATEGORIES, OF SUPERSESSIVE LEGISLATION,* 1965-73

Health and Safety (18-37.5%) Federal Water Pollution Control Act Amendments Drug Abuse Control Amendments of 1965 of 1972 Federal Cigarette Labeling and Avertising Act Marine Mammal Protection Act of 1972 Federal Coal Mine Safety Act Amendments of Marine Protection Research and Sanctuaries Act 1965 of 1972 National Traffic and Motor Vehicle Safety Act of 1966 Consumer Protection (7-14.6%) Highway Safety Act of 1966 Fair Packaging and Labeling Act Federal Metal and Nonmetallic Mine Safety Act Flammable Fabrics Act, Amendment Child Protection Act of 1966 Wholesome Meat Act Omnibus Crime Control and Safe Streets Act of Consumer Credit Protection Act 1968 Poison Prevention Packaging Act of 1970 Natural Gas Pipeline Safety Act of 1968 Motor Vehicle Information and Cost Savings Act Radiation Control for Health and Safety Act of Consumer Product Safety Act 1968 Gun Control Act of 1968 Agricultural Standards (3-6.2%) Federal Coal Mine Health and Safety Act of 1969 Food and Agriculture Act of 1965 Public Health Cigarette Smoking Act of 1969 United States Grain Standards Act Federal Railroad Safety Act of 1970 Egg Products Inspection Act Occupational Safety and Health Act of 1970 Federal Board Safety Act of 1971 Civil Rights (3-6.2% ) Lead Based Paint Poisoning Prevention Civil Rights Act of 1964 Amendments Voting Rights Act of 1965 Health Maintenance Organization Act of 1973 Voting Rights Act Amendments of 1970

Environmental Protection and Conservation Miscellaneous (8-16.6%) (9-18.7%) Atomic Energy Act of 1954, Amendment Water Quality Act of 1965 Uniform Time Act of 1966 Highway Beautification Act of 1965 Employment Security Amendments of 1970 Clean Air Act Federal Deposit Insurance Act, Amendment Clean Air Act Amendments of 1970 Horse Protection Act of 1970 Federal Environmental Pesticide Control Act of Federal Election Campaign Act of 1971 1972 Emergency Petroleum Allocation Act of 1973 Noise Control Act of 1972 Emergency Highway Energy Conservation Act

'Although some acts can fall into more than one category, the thrust of the article is not affected. SOURCE: James B. Croy, "Federal Supersession: The Road to Domination," State Government, Winter 1975, p. 35. total of $4 million. These "matching named in the cases are in effect man- grant" programs, however, must be dated to change their behavior, too, considered a mixed blessing. Al- since not to do so would expose them though these federal funds are more to court challenge.42 subject to legislative authority, they Another major class of federal policy man- also tend to skew state spending dates emanates from the bureaucracy acting priorities toward federal ones. under broad, and sometimes very general, 5. "We will go ahead if you, the legis- delegations of power from the Congress. Fed- lature, don't object-that is, if you eral regulatory commissions and agencies have find out about it!" issued many such orders and have been upheld One hundred percent federal grant by the courts. Most federal regulatory activity programs are a form of preemption has been directed toward the private sector, but because the federal government is a number-primarily in fields of environmen- frequently able to conduct programs tal protection and civil rights-also affect state by bypassing the legislatures en- and local governments. These include admin- tirely. Even if it does not, the money istrative regulations emanating from the Clean is so entwined with red tape, strings, Air Amendments of 1970, the Federal Water conditions and frustrations that state Pollution Control Act of 1972, the Safe Drink- programs begin to become indistin- ing Water Act of 1974, the Equal Employment guishable from federal ones.41 Opportunity Act of 1972, and the Age Dis- crimination in Employment Act of 1967.43 Table 11-12 shows an inventory of nearly 50 These are direct orders to be complied with ir- federal laws that were enacted between respective of any federal aid programs. 1965-75 and that supersede state legislation. Of course the rules and regulations as- Such laws continue to be enacted. For example sociated with federal grant programs and other there is the Safe Drinking Water Act mentioned types of federal financial assistance also ema- above, the Voting Rights Amendments of 1976, nate largely from the bureaucracy, under dele- and the currently debated energy bill, which gations of power from the Congress that often would establish an energy mobilization board are quite general. Although these are not direct that could expedite the approval of energy orders, the lure of federal funds is so strong in products by superseding state and local laws to most cases that the effect is almost the same. some greater or lesser extent, as the situations The conditions of federal aid, in fact, are the warrant. largest source of federal policy substitution for As already mentioned, legislation is not the state and local government^.^^ They also have only route to federal preemption. Others stem the advantage of escaping strict judicial in- from judicial interpretation of the Constitution, terpretations, which might limit the federal and: government's ability to give direct orders to . . . in particular, the Bill of Rights and state and local governments based on a fresh the 14th Amendment. A wide range of reading of the 10th Amendment. state and local activities have been af- Federal preemption has progressed so far in fected by such rulings. For example, so many fields that state and local governments the Supreme Court has ordered that frequently take a "wait and see" attitude, de- electoral districts be redrawn, schools laying their own action when it is known that be desegregated, free counsel be pro- new federal laws, regulatory actions, or ad- vided for indigents, juvenile court pro- ministrative rulemaking are imminent for a cedures be reformed, and prisons and given policy area. mental institutions be upgraded. The power of the federal government to pre- While direct court orders are issued empt or supersede state and local laws is well to certain specific jurisdictions named established from a legal point of view, although in adjudicated cases, the principles ar- its form has shifted from time to time. This ticulated in court opinions often have power rests upon the Constitutional provisions general applicability. Jurisdictions not for raising and spending money, regulating commerce, providing for the general welfare, In the policy sense federal preemption is a making necessary and proper laws, and estab- very complex phenomenon, with many more lishing the "supreme Law of the Land." Robert issues and significant nuances than have been List, the attorney general of Nevada, has traced presented above. No brief treatment can fully the legal evolution of federal preemption plumb the depths of these issues. The Southern through four periods of time:4s Legislative Conference has studied the problem and made recommendations.46 The National In- First, prior to 1930, the U.S. Supreme stitute of Municipal Law Officers has prepared Court "held that the mere fact that Con- a legal case book on it and held a special semi- gress regulated in a particular field was nar in Washington to sensitize local officials to sufficient to preclude concurrent state the issues.47Law school journals have begun to legislation." publish very lengthy articles on federal In the 1930s the Court's doctrine changed preemption of particular type~.~aIn addition, to insist that Congress provide a clear in the 1973-76 edition, the Index to Legal expression of its intent in the enacted Periodicals began to recognize the subject of legislation to "occupy the field." This, in "federal preemption." Federal preemption of effect, "created a presumption in the governmental policy roles clearly is a growing favor of a validity of state laws in the and increasingly recognized phenomenon. exercise of the states' police powers," but did not challenge Congress' preemptive Federal Specification of authority if it chose to use it deliberately. Administrative Details Then, following a 1941 decision, the Federal laws and regulations often specify a Court's philosophy changed again, this single specific means of accomplishing a time to "one of ensuring that a state stat- broader national objective. This shows an in- ute does not stand as an obstacle to the sensitivity to the diverse needs, resources, and full purposes and objectives of Con- capacities of state and local governments par- gress." This put the courts into an active ticipating in the grant system.49This can, and stance of interpreting legislative objec- does lead to federal aid recipients going tives and results. through the paces of meeting the letter of the Finally, according to List, 1973 marked law, while either ignoring its spirit or having to still another change by the Court. Now it rely on supplementary means of their own to appears that with respect to the preemp- meet the objective. tion of state laws, the doctrine is to rec- Matters are made worse when the specific oncile the federal supremacy clause with provisions in one federal program differ from the 10th Amendment guarantees of state those in another, and when parallel state and sovereignty on a case-by-case basis. local provisions contain still other provisions. Perhaps the best known case in which In such cases compliance often must be estab- state sovereignty triumphed was the 1976 lished separately through duplicative proce- decision in National League of Cities vs. dures and documentation. Examples are: (1) Usery. This case invalidated the 1974 separate environmental impact statements to amendments to the Fair Labor Standards meet state and federal standards, and (2) dupli- Act that extended minimum wage and cate public hearings, advisory committees, and overtime pay protection to nonsupervi- published notices to meet differing citizen sory state and local government employ- participation requirements of federal, state, and ees, based upon a finding by the Court local laws. that these provisions vitally interfered Federal requirements that are too specific with the integral functions of state and may also limit state and local creativity and local governments and threatened their effectiveness in using limited resources to meet "separate and independent existence." common objectives. For example, the mandat- Thus, the Court now seems to be shying ing of a single type of public transit bus by the away from an automatic predisposition in U.S. Department of Transportation for all fed- favor of either the Congress or the states. erally assisted bus jstems may be one of the costliest ways for local communities to assure continues to rise overall, even though the gov- mobility to their handicapped citizens. Yet no ernment and consumer sectors have leveled off. alternative is provided if federal funds are to be This leveling effect is most obvious in Figure retained. Likewise federal requirements for ret- 11-96, where the costs are measured in constant rofitting all public buildings for total access by dollars. the handicapped may not be the only or best Regulatory costs, however, are not the only way to assure equal opportunities to the handi- ones resulting from federal influence on others. capped. On still another front the rather com- The total federal paperwork burden on indi- mon federal requirement in many aid programs viduals, businesses, and state and local gov- for a state to have a single agency to address ernments emanates from several other sources the aided program sometimes stifles efforts at as well, and is quite substantial. The Commis- state government reorganization.S0 Federal sion on Federal Paperwork estimated these laws requiring payment of prevailing wages costs in 1977 at more than $100 billion a year sometimes are tied so directly to wage levels and found that $10 billion of this burden was for broad geographic areas, and union signoffs, unnecessary.S2 Breaking these costs down for that wages must be paid at levels either above some of the major segments of society, the Pa- or below those actually existing in a local mar- perwork Commission's figures are: ket area. The federal government: $43 billion per From these examples it is clear that federal year. requirements that are too specific may be counterproductive andlor duplicative. They can Private industry: $25 to $32 billion per cause unwarranted red tape, and they may not year. be particularly effective in achieving the de- State and local government: $5 to $9 bil- sired result. A state or local government that is lion per year. subject to such requirements may agree com- Individuals: $8.7 billion per year. pletely with the national objective but still find Farmers: $350 million per year. the particularistic nature of the federal re- quirements onerous and burdensome. Labor organizations: $75 million per year. The Costs of Federal Requirements. The Paperwork Commission went on to ex- The costs of federal requirements have not plain further some of the burdens implied by been tabulated in a systematic way, although these costs: there are indications that such costs are quite Federal paperwork hurts most those least high. For example, Figures 11-93 through 11-96 able to fend for themselves: the poor and show some estimates of the costs of federal disabled, the small businessman, and regulatory activitie~.~~Figure 11-93 shows that small institutions in the health and edu- the administrative costs to the federal govern- cation areas. ment are quite small in comparison to the com- pliance costs borne by businesses and by state The nature of burden varies by type of re- and local governments. spondent. But the biggest distinctions are Figure 11-94 indicates the total impact of fed- between the problems of individuals, eral regulations in the safety and environmen- small businessmen, and small institu- tal fields on the cost of an automobile over sev- tions, and the problems of large organi- eral years. From 1968-78 these federal regula- zations, whether they are state and local tions added $666 to the cost of a car (in con- governments, businesses, or institutions. stant 1977 dollars). Some respondents face very special Figures 11-95 and 11-96 depict who pays the problems with red tape. For example, costs of federal regulation in the pollution programs for the disabled should not re- abatement and control field-consumers, gov- quire much travel in their application ernment, and business all share in substantial procedures; government should limit amounts. The growth in these costs was fairly questioning farmers during harvest sea- rapid during 1972-75 for all three sectors, and son. Figures 11-93- 11-96 Costs of Federal Regulation Total Automobiles Figure 93. Annual Cost of Federal Regula- Figure 94. Cumulative Increase in Retail tion Price of Automobiles Due to Source: Appendix Table A-47. 700 Federal Requirements, 1968-78 Source: Appendix Table A-48. /

Compliance Cost

Administrative Cost 1 I I 1 I I 1974 1975 1976 1977 1978 1979

Pollution Abatement and Control Figure 95. Private and Public Spending for Figure 96. Private and Public Spending for Pollution Abatement Pollution Abatement and Con- and Control trol Source: Appendix Table A-49. Source: Appendix Table A-50.

30

- -.- lo = Government

Consumers Consumers Economic burdens include, but go be- Cumulative burdens occur when the sum yond, the dollar costs of filling out a re- of requests becomes overwhelming. Some port: examples are: -Recordkeeping systems must be set up -One company had to comply with fed- when the requested information is not eral requests for 8,800 reports from 18 available. different agencies in one year. -Outside professional, legal, and ac- -Some welfare and service programs re- counting help may be required to "de- quire separate applications even when, code" or interpret federal require- by law, eligibility for one program ments. confers eligibility for others.53 -Multiple copies may be needed. These excessive paperwork costs result from -Costs of traveling to government of- lack of communication, governmental insen- fices to complete paperwork may be sitivity to the problems caused by paperwork, prohibitive for the poor and disabled. poor design of governmental forms and in- -Delays due to paperwork increase structions, overlapping government organiza- costs. tions and programs, poor program design, poor -Resources spent on paperwork are not information practices, and inconsistent and in- available for other, more productive effective confidentiality policies. According to purposes. the Paperwork Commission, although 90% of this paperwork probably is necessary to meet Examples of economic burden are: government objectives, that makes it even more -A school disregarded a $4,500 grant important to pursue the potential 10% reduc- because it would have required $6,000 tion. in paperwork. The U.S. Office of Management and Budget (OMB) has been charged by legislation with -Fifteen employees lost their pension promoting the realization of the potential sav- plan because the small company could ings identified by the Paperwork Commission. not handle the paperwork. As part of its charge, OMB must report to the Congress and the President every six months Psychological burdens may be more im- on progress toward fulfilling the recommenda- portant than dollar costs to individuals tions of the commission. Figure 11-97 shows who experience: graphically the types of reports being sub- -frustration when completing complex mitted in accordance with federal require- forms; ments, the federal agencies requiring them, and -anger when faced with multiple re- the number of hours required to prepare these quests for similar data; reports, as found by OMB in its first six-month -confusion in reading unclear instruc- report. It can be seen that taxes and regulatory tions; activities -require the most time, but the total burden includes applications for federal bene- -anxiety that errors may result in denial fits, research and evaluation reports, and of benefits or legal consequences; and statistical surveys. -fear that confidential information may Figure 11-98 illustrates how the number of be abused. pages in the Federal Register has grown from 1970 to 1978.54 Examples of psychological burdens are: According to OMB's third semi-annual re- -the frustration and anger of a family port, 269 of the 520 recommendations (52%) that must spend 35 hours filling out a addressed to the executive branch by the Pa- student aid application, and perwork Commission have been implemented, -the confusion and anxiety of an indi- while 80 (15%) have been rejected, and 171 vidual filling out a complicated tax (33 %) remain under active consideration.55 return. A different type of federal pressure that is Figures 11-97 and 11-98 Burdens of Federal Paperwork and Salary Influences

PERCENT OF REPORTS, Independent PERCENT OF REPORTS, Figure 97. Federal Reporting Burdens, by TYPe

Tables show, clockw~sefrom top left: The number of reports ~ssuedby the government IS evenly distr~buted Execut~edepartmens among four categories, most of the reports come from Appllcatans and agencles execut~veagencies, but most of the average person's tlme IS spent on IRS tax forms, and the remainder of t~mespent fllllng out government forms IS used mostly

Stahstlcal surveys axnmlswns (Indudlng for regulatory, financlal and management reports. 6% *SA 8 2 Source: office of Management and Budget, as reported in The Washrngton Post, June 24, 'Regulatory Execut~e 1 978. ~~d~~m~and financ~aland

PERCENT PERCENT OF REPORTING HOURS, OF REPORTING HOURS. BY BY REPORT TYPE (except IRS tax) TYPE OF AGENCY BY en Burgers-The Washington Post

Figure 98. Explosive Growth in the Size of the Federal Register

The Federal Register in 1970 The Federal Register Today exerted on state and local governments is il- motorist, the businessman, the consumer, the lustrated by Figure 99. This shows that federal worker, the investor, and the nation as a payroll increases (in dollars) have nearly whole.S6 He describes these effects in economic paralleled the increases in state and local terms, concentrating on the costs imposed, al- payrolls, even though the number of federal though he also recognizes that benefits exist. employees continues to lag farther and farther His purpose is to focus on the cost side to behind. This means that in most cases, federal stimulate analyses of governmental regulations pay scales have outstripped those of most state that eventually might be seen more in the light and local governments. Although there are of benefit-cost relationships. some logical reasons for this situation, related When Weidenbaum looks at the cost of gov- to the more highly skilled nature of many fed- ernment regulation, he finds that the taxpayer eral jobs, these federal pay scales tend to exert is paying more to support it; the motorist is upward pressures on salaries of state and local paying more for his new car; the businessman governments, making it more difficult for them has been bureaucratized and saddled with to attract and keep well qualified personnel. higher costs, more red tape and paperwork, and Unintended Federal Effects on a loss of time for innovation and entre- the Economy preneurship; the homeowner is paying more for the same house; the consumer faces higher Murray Weidenbaum has made the point to prices; the worker faces a greater likelihood of the Joint Economic Committee of Congress that being laid off; the investor finds it more dif- government regulations affect the taxpayer, the ficult to accumulate capital for increased pro-

Figure 99. Government Payrolls, 1950-78 (Logarithmic Scale) MONTHLY PAYROLLS Billions of Dollars

0 111111111111111111111111111l 1950 1955 1980 1965 1970 1976 1978 Note: Data are for month of October; 1957 data were reported for April and have been adjusted for comparability to October. Source: Appendix Table A-51. duction; and the nation as a whole faces infla- scope of federal activities has broadened tre- tion and lowered productivity. mendously, adding a massive social welfare Phillip Cagan has prepared a similar analysis dimension heretofore reserved almost exclu- of the inflationary effects of government inter- sively to the state, local, and private sectors. It ference in markets.S7 While offering no easy has placed the federal government in major answers, he finds that higher prices have re- new areas-federal aid, income redistribution, sulted from agricultural price supports, trans- and regulation-which affect most state and portation regulation, import restrictions, en- local governments, businesses and other pri- vironmental and safety regulations, sales and vate organizations, and families or individuals. payroll taxes, labor restrictions (such as As has been shown, the federal government minimum wage laws and support of unioniza- has grown, partly because of this increased tion), the failure to enforce antitrust and trade scope of activities, but also because of in- laws as originally intended, federal subsidies creases in the size of the nation, in its world of medical costs, and legal remedies for prod- responsibilities (defense and foreign affairs), uct and service liability (including medical and in the deepening of the nation's commit- malpractice awards and recalls of manufac- ments to maintaining a healthy national econ- tured products). He also sees a connection be- omy and enhancing the opportunities for, and tween higher prices and the expansion of gov- general well-being of, all Arnerican~.~~The ernmental and nonprofit sectors in the econ- forces of urbanization, technological advance, omy (which are characterized by low incen- improved information and communications tives and fewer opportunities for improved systems, changing population characteristics, productivity). Growth in these sectors, he be- and rising standards of living undoubtedly all lieves, tends to hold down overall productivity have contributed to this growth of government improvements in the economy. and the expanding role of the federal govern- These effects, noted by Weidenbaum and ment. Cagan, were not intended. The government was The 1960s and 1970s saw particularly rapid simply trying to help the farmer, protect the growth in federal government use of loans and consumer from monopoly prices in the trans- grants, transfer payments to individuals, off- portation field (or the failure of transportation budget loan guarantees, tax expenditures, and industries), provide safer automobiles and bet- regulation. This growth moved the federal gov- ter houses, protect domestic firms from unfair ernment predominantly away from activities in foreign competition, protect and adequately which it is the principal service provider, to- compensate workers, create a healthy environ- ward activities in which it shares respon- ment, make medical care more readily avail- sibilities with the state and local governments able, and protect consumers from medical mal- and the private sector. Although growth in fed- practice or injury due to the use of defective eral employment has leveled off, federal aid products. Nevertheless perceptible impacts on has helped state and local employment to spurt the economy have resulted. This has spawned ahead. In relation to the economy and to proposals for deregulation, the streamlining of growth of the state and local governments, fed- regulatory processes, greater reliance on free eral growth generally has leveled off by most market mechanisms, and widespread use of financial and employment measures. economic impact statements as a means of As a result of these recent trends, jnter- confronting the economic side effects of gov- governmental relationships have become in- ernmental activities before new programs are creasingly important. Interdependencies be- undertaken. tween the federal government and the other sectors of the economy (both public and pri- vate) have intensified. The federal govern- SUMMARY: ment's influence is felt throughout the nation BIGGER, BROADER, AND DEEPER by virtually all individuals, businesses, other The federal government has grown much private organizations, and state and local gov- larger than it was even a few decades ago. The ernments. This increased influence causes both 1930s were the turning point. Since then the pleasure and pain. Income assistance, federally created jobs, a cleaner environment, safer era1 decisionmaking at the expense of private products, better working conditions, needed freedoms and policymaking discretion by the community improvements, and the like are ac- state and local Undoubtedly the companied by complaints of excessive pa- federal government affects more individuals, perwork, unnecessary delays, unexpected costs businesses, and subnational governments more and losses in productivity, and too much fed- intimately and more intensely than ever before.

includes, for example, personal incomes that fall below the taxable amounts. It should be noted that FOOTNOTES defining and estimating tax expenditures are complex and somewhat controversial tasks. Essentially such William Anderson, "Federalism-Then and Now," estimates are hypothetical; they reflect what might State Government, Vol. 16, May 1943, pp. 107-12, have been, but never was; and they do not take ac- quoted in Edward S. Corwin, "The Passing of Dual count of secondary effects, interactions among sepa- Federalism," Virginia Law Review, op. cit., Vol. 36, rate provisions, or taxpayer reactions that might affect February 1950, pp. 23-2411. the actual amounts of their tax liabilities under vary- James Sterling Young, The Washington Community: ing conditions. 1800-1828, New York, NY, Harcourt Brace ''The U.S. Office of Management and Budget cautions Jovanovich, A HarvestlHBJ Book, 1966. against adding up the estimates of individual tax ex- Ibid., pp. 30-31. penditures, because their interactions would not be Ibid., p. 31. taken into account. Thus the total used here should Council of State Governments, Federal-State Relo- not be considered to be a precise figure. tions, a report of the Commission on the Organization la Congressional Budget Office, Five-Year Budget Pro- of the Executive Branch of the Government (Hoover jections and Alternative Budget Strategies for Fiscal Commission), Senate Document No. 81, 81st Cong., Years 1980-1984: Supplemental Report on Tax Ex- 1st Sess., Washington, DC, U.S. Government Printing penditures, Washington, DC, U.S. Government Print- Office, March 25, 1949, pp. 2-19. ing Office. June 1979, p. 2. See also Special Analysis, 61bid., pp. 11-12. Budget of the United States Government, 1980, "G. Ibid., pp. 20-21. Tax Expenditures," Washington, DC, U.S. Govern- The concept of "significant growth" used here is not a ment Printing Office, 1979. methodologically precise one. Basically, it denotes l9 Of course two-thirds of this amount (transfers and tax upward trends of a large and sustained nature, in- expenditures, per Table 11-4) consists of basic eligi- cluding in some cases the beginning phase of such bility determination, check writing, and tax enforce- trends, even though these may have been modest ini- ment processes, which require substantially less ad- tially. No rigid criteria for rates of change have been ministrative effort than the other one-third (grants applied. Only a general overview of major trends is and credit assistance). intended here. Some argue that the large-scale use of consultants and Federal mandates are of two types. First, there are di- other contract personnel by the federal government rect orders as occur in regulatory decisions. Secondly, results from ceilings imposed on agencies regarding there are conditions that must be met in connection the size of their permanent staffs. See Keith A. Sin- with eligibility for federal aid. These will be exam- zinger, "Staff Ceilings Major Cause of Contracting- ined more closely in a later section of this chapter. Out Abuses: Witnesses Testify on Hill," Federal loHerbert Kaufman, Are Government Organizations Times,Vol. 15, No. 30, Washington, DC, September 24, Immortal?, Washington, DC, The Brookings Institu- 1979, pp. 1, 6. tion, 1976. 2' As was the case with description of Figure 11-1, the l1 Ibid., p. 49. concept of "significant growth" used here is not a 12 Including the U.S. Department of Education, estab- methodologically precise one. Basically it denotes lished in 1979. upward trends of a large and sustained nature, in- '3 U.S. General Services Administration, National Ar- cluding in some cases the beginning phase of such chives and Records Service, United States Govern- trends even though these may have been modest ini- ment Manual: 197811979, Washington, DC, U.S. Gov- tially. No rigid criteria for rates of change have been ernment Printing Office, 1978. applied. Only a general overview of major trends is I4Catherine H. Lovell, et. al., Federal and State Man- intended here. dating to Local Government: Impacts and Issues, Of course many identical or similar bills are intro- Riverside, CA, University of California, 1979 draft, p. duced. Thus it would not be expected that they all 57. would be passed. '5 ACIR, A Catalog of Federal Grant-In-Aid Programs to 23 Bayless Manning, "Hyperlexis: Our National Dis- State and Local Governments: Grants Funded FY ease," The Congressional Record, Washington, DC, 1978, A-72, Washington, DC, U.S. Government Print- U.S. Government Printing Office, March 16, 1978, pp. ing Office February 1979, p. 1. S3948-S3952. 16 Of course there also is a substantial amount of other 24 Richard Rose, "On the Priorities of Government: a De- untaxed income in addition to tax expenditures. This velopmental Analysis of Public Policies," European Journal of Political Research, Vol. 4, No. 3, September Government Printing Office, March 1979; Lovell, et. 1976, pp. 247-89. al., op. cit.; Joseph F. Zimmerman, "Partial Federal 25 For a more thorough history of the relative growth of Preemption and Changing Intergovernmental Rela- the various federal, state, and local activities in the tions," a paper prepared for the 1979 Annual Meeting period 1900-50, see Solomon Fabricant, The Trend of of the American Political Science Association, August Government Activity in the United States Since 1900, 31-September 3, 1979. New York, NY, National Bureau of Economic Re- 39 Zimmerman, ibid, pp. 17-19. search, Inc., 1952. Rose F. Kaiden, "American Federalism: Its Impact on 26 This is a functional category maintained by the Cen- OSHA Legislation," unpublished class paper, Temple sus Bureau up through 1977. It does not coincide with University, Center for the Study of Federalism, the changing names of federal grant programs. While Philadelphia, PA, January 1978, pp 18-19. there has been no federal program called "urban re- 41 Jason Boe, "Federal Pre-emption Threatens to newal" since 1974, urban renewal projects still are Undermine State-Federal Partnership," State Legis- being funded through the community development latures, October 1978, pp. 7-8. block grant program. 42 U.S. Congressional Budget Office, Federal Con- 27Herbert Kaufman, Red Tape: Its Origins, Uses, and straints on State and Local Government Actions: A Abuses, Washington, DC, The Brookings Institution, Background Paper, op. cit., p. 6. 1977, pp. 60-61. 43 Ibid., p. 7. Z8 Ibid., pp 5-6. 44 Lovell, op. cit., p. 57. 29 Richard P. Nathan, Allen D. Manvel, Susannah E. Cal- 45 Robert List, "Federal Preemptive Actions," State kins, and Associates, Monitoring Revenue Sharing, Government, Winter 1977, pp. 29-32. Washington, DC, The Brookings Institution, 1975, p. 4.5 Neal Peirce, "Federal Preemption and the States' 281. See also: Robert D. Lee, Jr., The Impact of Gen- Role," State Government, Summer 1978, pp. 176-77. eral Revenue Sharing on Local Jurisdictions in 47 Charles S. Rhyne, Federalism: Recent Developments, Pennsylvania: Initial Findings, University Park, PA, Future Directions, Washington, DC, National Institute Institute of Public Administration, The Pennsylvania of Municipal Law Officers, 1977. State University, October 1974, p. 3; and G. Ross 48 Richard B. Stewart, "Pyramids of Sacrifice? Problems Stephens and Gerald W. Olson, State Responsibility of Federalism in Mandating State Implementation of for Public Services and General Revenue Sharing, National Environmental Policy," The Yale Law lour- Final Report, Kansas City, MO, University of Mis- nal, Vol. 86, 1977, pp. 1196-1272; James D. ~utchin- souri, June 15, 1975, p. vii. son and David M. Ifshin, "Federal Preemption of State 30 U.S. Department of the Treasury, Office of Revenue Law Under the Employee Retirement Income Security Sharing, "Revenue Sharing Funds Distributed," News Act of 1974," The University of Chicago Law Review, Release dated October 11, 1979, Washington, DC. 46, 1978, pp. 23-80. 31 U.S. Department of Commerce, Bureau of the Census, 49 ACIR, Categorical Grants: Their Role and Design, 1977 Census of Governments: Finances of School A-52, Washington, DC, U.S. Government Printing Of- Districts, Vol. 4, Governmental Finances, No. 1, fice, 1977, p. 238. Washington, DC, U.S. Government Printing Office, So Such requirements may be waived in certain circum- March 1979. stances under a provision of the Intergovernmental " U.S. Department of Health, Education, and Welfare, Cooperation Act of 1968. Education Division, National Center for Education 5' While these estimates have been questioned on the Statistics, The Condition of Education, 1978 Edition, basis of inadequate data and deficient methodology, Statistical Report, Washington, DC, U.S. Government there currently are no similar ones available. See Printing Office, p. 49. Julius W. Allen, Estimating the Costs of Federal Reg- 33 U.S. Department of Commerce, Bureau of the Census, ulation: Review of Problems and Accomplishments to 1977 Census of Governments, Vol. 4, Governmental Date, Report No. 78-205E. Washington, DC, Congres- Finances, No. 2, Finances of Special Districts, Wash- sional Research Service, U.S. Library of Congress, ington, DC. U.S. Government Printing Office, May September 26, 1978. 1979, p. 2. s2 U.S. Commission on Paperwork, Final Summary Re- 34 U.S. Department of Commerce, Bureau of the Census, port, Washington, DC, US. Government Printing Of- 1977 Census of Governments, Vol. 6, Topical Studies, fice, October 3, 1977, p. 5. No. 6, Regional Organizations, Washington, DC, U.S. 53 Ibid., pp. 5-6. Government Printing Office, August 1978, p. 74. See Figure 11-18 and its source table in the appendix 35Problems of Federal-State-Local Relations, Hearing for actual numbers. By 1975 the number of pages before the Subcommittee on Intergovernmental Rela- published annually had topped 60,000. tions, Committee on Government Operations, U.S. Senate, 87th Cong., 2nd Sess., September 18, 1962, 55U.S. Office of Management and Budget, Paperwork p. 4. and Red Tape: New Perspectives, New Directions, 36 Nation's Cities Weekly, January 8. 1979, p. 3. Washington, DC, U.S. Government Printing Office, September 1979, p. 9. 37 William H. Riker, Federalism: Origin, Operation, Sig- nificance, Boston, MA, Little, Brown and Company, 56 Murray L. Weidenbaum, The Costs of Government 1964, p. 82. Regulation of Business, A Study Prepared for the J8These and the immediately following points about Subcommittee on Economic Stabilization of the Joint full and partial preemption are made in the following Economic Committee, 95th Cong., 2nd Sess., Wash- references: James B. Croy, "Federal Supersession: The ington, DC, U.S. Government Printing Office, March Road To Domination." State Government, Winter 1977. 1975, pp. 32-36; U.S. Congressional Budget Office, 57 Phillip Cagan, "Inflationary Effects of Government Federal Constraints on State and Local Government Influence in Markets," Inflation and National Sur- Actions: A Background Paper, Washington, DC, U.S. vival, Proceedings of the Academy of Political Sci- ence, Vol. 3, No. 3, edited by Clarence C. Walton, New S8 These factors are more deeply explored in Fabricant, York, NY, The Academy of Political Science, 1979, op. cit., pp. 140-55; and Freeman, op. cit., pp. pp. 26-41. 153-82.

Chapter 111 The Scope of the Federal Role Report

This ten-volume report reviews the present role of the federal government in the federal system and the nature of needed changes. His- torical and political perspectives are used to examine the processes and forces that have en- couraged federal assumption of new or ex- panded national responsibilities for many domestic services. The primary focus of the re- port is on the contemporary era-since 1960. In keeping with the Congressional mandate to the Commission, an attempt is made to identify the forces that have affected American federalism in the recent past and to project these into the future. A better understanding of where we are now, how we got here, and where we appear to be heading seems an essential component for developing wiser and more effective inter- governmental policies. Many of the points mentioned briefly in this introductory volume are examined in consider- able detail in other volumes of this report series, where the format shifts-from the gen- eral, to the functionally specific, and back to the general. This volume has outlined the scope and the character of federal growth- programmatic, fiscal, functional, regulatory, and administrative-largely in quantative terms. Volume I1 examines in some detail: (1) the principal traditional and modern theories of federalism to determine their contribution to applied to the recent American experience and the current debate on the appropriate allocation is intended as a prelude to the series of case of functions; (2) the Constitutional, political, studies that are the analytic heart of this federal and fiscal constraints that limited federal ac- role study. tivities in the past but have been weakened in The case studies in Volumes I11 through IX recent decades; and (3) the sizable social sci- provide some examples of both "major" and ence literature, principally by economists and "minor" fields of federal activity. They offer political scientists, dealing with the size and much more detailed and specific information growth of the public sector. This social science on the evolution of national assistance pro- literature provides a substantial range of grams. Each case study stresses the dynamics interpretations-"hypothesis," really-as of program development and the political ac-

Table 111-1 THE FEDERAL ROLE IN THE FEDERAL SYSTEM: THE DYNAMICS OF GROWTH

Volume I A Crisis of Confidence and Competence 1. The Question of Federalism: Key Problems 2. Indicators of Federal Growth 3. The Scope of the Federal Role Report Volume 11 The Condition of Contemporary Federalism: Conflicting Theories and Collapsing Constraints 1. Alternative Perspectives on Federalism 2. Breakdown of Constitutional Constraints; Interpretive Variations from the First Constitutional Revolution to the "Fourth" 3. Government UnLocked: Political Constraints on Federal Growth Since the 1930s 4. Financing Federal Growth: Changing Aspects of Fiscal Constraints 5. Governmental Growth: Conflicting Interpretations in the Social Sciences Volume 111 Public Assistance: The Growth of a Federal Function Volume IV Reducing U?employment: Intergovernmental Dimensions of a National Problem Volume V Intergovernmentalizing the Classroom: Federal Involvement in Elemen- tary and Secondary Education Volume VI The Evolution of a Problematic Partnership: The Feds and Higher Ed Volume VII Protecting the Environment: Politics, Pollution, and Federal Policy Volume Vlll Federal Involvement In Libraries Volume IX The Federal Role in Local Fire Protection Volume X An Agenda for American Federalism: Restoring Confidence and Com- petence 1. American Federalism 1960-1 980: Contrasts and Continuities 2. The Dynamics of Growth in Federal Functions: An Analysis of Case Study Findings 3. The Federal Role: Criteria, Assessment, and Analysis 4. Issues and Recommendations tors, as well as the political circumstances, that number of study and advisory committees. At seemed most fundamental to the growth of the that time the aid system was far less complex, federal role in the functional areas probed. embracing a much narrower range of functional Volume X-the final element in the report responsibilities than is the current case: in series-recapitulates the basic findings of the 1955 the CIR identified only 61 grant-in-aid preceding volumes, analyzes them in relation programs; today, nearly 500 exist. to each other, examines criteria that might be Given the very substantial resources that a applied in sorting out appropriate federal roles, new comprehensive investigation would re- and presents the Commission's position on the quire, it has been the practice of ACIR to ad- principal findings, issues, and related recom- dress, individually, issues of functional re- mendations. sponsibility, as they pertain to specific problem This report does not attempt a program-by- fields and as they arise. A substantial number program review of federal aid and regulatory of past Commission reports and recommenda- activities or other aspects of the national gov- tions have dealt with particular fields of federal ernment's domestic role. The latest com- policy; these are referenced in the final volume. prehensive effort at that scale was conducted Additional fields undoubtedly will be exam- by the Commission on Intergovernmental Re- ined in the future. The present ten-volume re- lations (CIR) in 1953-55. The resulting 16- port, as outlined in Tab1e 111-1, is only a begin- volume study involved 43 professional and 33 ning in the effort to decongest the federal sys- administrative staff, outside consultants, and a tem.

APPENDIX TABLES

Table A-1 GOVERNMENT REVENUES IN THE UNITED STATES, SELECTED YEARS, 1902-80 Federal All Federal All Federal Government Government Revenue Fiscal Governments Government (as percent ot (as percent of (as percent of all Years (millions) (milllons) GNP) GNP) Government) 1902 1913 1922 1932 1942 1952 1962 1972 1973 1974 1975 1976 1977 1978 1979 est. 1980 est.

SOURCE: 1902-72 figures as cited in Freeman, Roger A., The Growth of American Government, Stanford, CA, Hoover Institution Press, Stanford University, 1975, 1973-80 figures compiled by AClR staff. Table A-2 GOVERNMENT EXPENDITURES, SELECTED YEARS, 1929-79l Federal Expenditure as Percent of all Exhlblts: GNP, Total Government Product, Populatlon Years Public Sector Federal Expenditures and Personal lncome (billions of current dollars) GNP (In bllllons) 1929 $ 10.2 $ 2.6 $ 103.4 1939 17.4 8.9 90.8 1949 59.3 41.3 258.0 1954 97.0 69.8 366.3 1959 131 .O 91 .O 486.5 1964 176.3 118.2 635.7 1969 285.6 188.4 935.5 1974 458.2 299.3 1,412.9 1975 532.8 356.8 1,528.8 1976 570.3 385.2 1,700.1 I 977 621.8 422.6 1,887.2 1976 Preliminary 685.0 461 .O 2,106.0 1979 est. 764.5 507.0 2,343.0 As percent of GNP Populatlon (000) 1929 9.9 2.5 121,767 1939 19.2 9.8 130,880 1949 23.0 16.0 149,767 1954 26.5 19.1 163,026 1959 26.9 18.7 177,830 1 964 27.7 18.6 1 9 1,889 1969 30.5 20.1 202,677 1974 32.4 21.2 21 1,901 1975 34.9 23.3 213,540 1976 33.5 22.7 21 5,078 I 977 32.9 22.4 21 7,329 1976 Crellminrry 32.5 21.9 21 9,068 1979 est. 32.6 21.6 220,714 Per Caplta In Constant Dollars (1 967 dollars) Personal lncome (PIC)' 1929 $1,359 1939 1,330 1949 1,923 1954 2,196 1959 2,461 1964 2,781 1969 3,351 1974 3,690 1975 3,647 1976 3,766 1977 3,876 1978 Prellmlnary 4,003 1979 est. 4,057

National income and product accounts. Based on consumer price index.

SOURCE: AClR staff computations based on U.S. Department of ~ommerce,Bureau of Economic Analysis. The Na- tional lncome and Product Accounts of the United States, 1929-74, Statistical Tables and Survey of Current Business, various years, Washington, DC, U.S. Government Printing Office; U.S. Bureau of the Census, Department of Corn- merce, Governmental Finances, annually, Washington, DC, U.S. Government Printing Office; Budget of the United States Government, various years, Washington, DC, U.S. Government Printing Office; Economic Report of the Presi- dent, January 1979, Washington, DC, U.S. Government Printing Office; and AClR staff estimates. Table A-3 GROWTH IN FEDERAL DEFICIT SPENDING, SELECTED YEARS, 1929-80 (receipts, outlays in millions of dollars) Fiscal Surplus/ Fiscal Surplus/ Year Receipts Outlays Deficit Year Receipts Outlays Deficit 1929 $ 3,862 $ 3,127 $ 734 1959 79,249 92,104 - 12,855 1933 1,997 4,598 -2,602 1960 92,492 92,223 269 1939 4,979 8,841 -3,862 1961 94,389 97,795 -3,406 1940 6,361 9,456 -3,095 1962 99,676 1 06,813 -7,137 1941 8,621 13,634 -5,013 1963 106,560 11 1,311 -4,751 1942 14,350 35,114 -20,764 1964 1 12,662 1 18,584 -5,922 1943 23,649 78,533 - 54,884 1965 1 16,833 1 18,430 - 1,596 1944 44,276 91,280 -47,004 1966 130,856 1 34,652 -3,796 1945 45,216 92,690 -47,474 1967 149,552 158,254 -8,702 1946 39,327 55,l83 - 15,856 1968 153,671 178,833 -25,161 1947 38,394 34,532 3,862 1969 1 87,784 184,548 3,236 1948 41,774 29,773 12,001 1970 193,743 1 96,588 -2,845 1949 39,437 38,834 603 1971 188,392 21 1,425 -23,033 1950 39,485 42,597 -3,112 1972 208,649 232,021 -23,373 1951 51,646 45,546 6,100 1973 323,335 247,094 - 14,849 1952 66,204 67,721 -1,517 1974 264,932 269,620 -4,688 1953 69,574 76,107 -6,533 1975 280,997 326,185 -&,I 88 1954 69,719 70,890 -1,170 1976 300,005 366,439 -66,434 1955 65,469 68,509 -3,041 1977 357,762 402,725 -44,963 1956 74,547 70,460 4,087 1978 401,997 450,836 -48,839 1957 79,990 76,741 3,249 1979 465,940 493,673 -27,733 1958 79,636 82,575 -2,939 1980 est. 523,829 563,583 -39,754

Note: Data for 1929-39 are according to the adminis- not significant. Refunds of receipts are excluded from trative budget, and those for 1940 according to the uni- receipts and outlays. fied budget. Certain interfund transactions are excluded from receipts and outlays beginning with 1932. For SOURCE: Department of the Treasury and Office of years prior to 1932 the amounts of such transactions are Management and Budget. Table A-4 PUBLIC DEBT OF THE FEDERAL GOVERNMENT, SELECTED YEARS, 1902-77 (as of June 30)

Amount Amount (billions of (billions of Year dollars) Year dollars) 1916 $ 1.2 1947 $255.4 Table A-5 1917 3.0 1948 251.6 PAID CIVILIAN EMPLOYMENT OF 1918 12.5 1949 256.1 THE FEDERAL GOVERNMENT, 1919 25.5 1950 255.4 SELECTED YEARS, 1910-79 1920 24.3 1951 258.1 (thousands of persons) 1921 24.0 1952 266.2 Judicial Judicial 1922 23.0 1953 273.8 Year Branch Total Year Branch Total 1923 22.3 1954 277.2 1910 2.4 388.7 1955 4.1 2,397.3 1924 21.2 1955 279.1 1915 2.2 395.4 1960 5.0 2,398.7 1925 20.5 1956 275.5 1920 2.0 655.3 1965 5.9 2,527.9 1926 19.6 1957 274.2 1925 1.8 553.0 1970 6.9 2,981.6 1927 18.5 1958 282.2 1930 1.8 601.3 1975 10.0 2,882.0 1928 17.6 1959 288.7 1935 1.9 780.6 1976 11.0 2,879.0 1929 16.9 1960 287.7 1940 2.5 1,042.4 1977 12.0 2,855.0 1930 16.2 1961 293.6 1945 2.7 3,816.3 1978 13.0 2,875.0 1931 17.8 1962 300.2 1950 3.8 1,960.7 1932 20.8 1963 306.0 1933 23.8 1964 31 4.3 SOURCE: US. Bureau of the Census, Department of 1934 28.5 1965 31 7.2 Commerce, Historical Statistics of the United States, 1935 30.6 1966 325.6 Colonial Times to 1970, Washington, DC, U.S. Govern- ment Printing Office, 1975; and Statistical Abstract of 1936 34.4 1967 341.8 the United States, 1979, Washington, DC, U.S. Depart- 1937 37.3 1968 356.2 ment of Commerce, U.S. Government Printing Office, 1938 39.4 1969 367.4 1979. 1939 41.9 1970 388.3 1940 45.0 1971 423.4 1941 57.9 1972 448.4 1942 108.2 1973 469.1 1943 165.9 1974 492.7 1944 230.6 1975 576.7 1945 278.1 1976 653.5 1946 258.9 1977 71 8.9

SOURCE: U.S. Bureau of the Census, Department of Commerce, Historical Statistics of the United States, Colonial Times to 1970, Washington, DC. U.S. Govern- ment Printing Office, 1975, and Treasury Department. Table A-6 BIRTHS AND DEATHS OF FEDERAL ORGANIZATIONS, BY PRESIDENTIAL TERM, 1789-1 973a

Net Cumu- Percentage Presidential Increase or lative Increase or Term Births Decrease Total Decrease 1789-92 11 - - - 1793-96 - - 11 - 1797-1 800 - - 11 - 1801-04 - - 11 - 1805-08 1 1 12 9% 1809-12 1 1 13 8 1813-1 6 - - 13 - 1817-20 2 2 15 15 1821-24 1 1 16 7 1825-28 - - 16 - 1829-32 1 1 17 6 1833-36 5 5 22 29 1837-40 1 1 23 5 1841-44 - - 23 - 1845-48 - - 23 - 1849-52 4 4 27 17 1853-56 5 5 32 19 1857-60 2 2 34 6 1861-64 11 11 45 32 1865-68 5 5 50 11 1869-72 10 10 60 20 1873-76 4 4 64 7 1877-80 4 4 68 6 1881-84 5 5 73 7 1885-88 4 4 77 5 1889-92 7 7 84 9 1893-96 4 4 88 5 1897-1 900 2 2 90 2 1901-04 15 15 105 17 1905-08 9 9 114 9 1909-1 2 15 15 129 13 1913-16 17 17 146 13 1917-20 16 16 162 11 1921-24 14 10 172 6 1925-28 3 -2 170 -1 1929-32 - - 170 - 1933-36 11 8 178 5 1937-40 20 18 196 10 1941 -44 9 5 20 1 3 1945-48 22 22 223 11 1949-52 13 10 233 4 1953-56 22 16 249 7 1957-60 4 4 253 2 1961-64 28 28 28 1 11 1965-68 33 33 314 12 1969-72 57 57 371 18 1973 23 23 394 6 aData do not include organizations that were born and died between 1923 and 1973. bMortality figures for 1924-73 only.

SOURCE: Kaufman, Herbert, Are Government Organizations Immortal?, Washington, DC, The Brookings Institution, 1976, pp. 48-49. Table A-7 GROWTH OF CONGRESSIONAL STAFF, SELECTED YEARS, 1947-78

Senate House Personal Committee Personal Committee Staff Staff Staff Staff Total 590 222 1,449 182 2,443 1,115 371 2,441 348 4,275 1,749 448a 4,055 506' 6,758 2,426 814 5,280 727 9,247 2,600 1,120 6,114 952 10,786 1978 est. 5,000 2,250 7,000 1,750 16,000

a Figures are for 1968.

SOURCE: Hilsman, Roger, To Govern America, New York, NY, Harper and Row, 1979, p. 227, as adapted from Harri- son W. Fox, Jr., and Susan Webb Hammond, "The Growth of Congressional Staffs," in Harvey C. Mansfield, Sr., ed., Congress Against the President, New York, NY, Praeger, 1975, p. 115. Figures for 1978 projected from Milton S. Gwirtzman, "The Bloated Branch," New York Times Magazine, New York, NY, Times Publishing Co., November 10, 1974, and interviews by the author.

Table A-8 NUMBER OF BILLS AND RESOLUTIONS INTRODUCED IN THE U.S. HOUSE OF REPRESENTATIVES AND NUMBER REPORTED BY STANDING COMMITTEE, BY CONGRESS, 1947-74

Number of Bills Number of Bills Percent Reported and Resolutions and Resolutions of All Bills and Introduced in Reported by Resolutions Congress and Years House House Committees Introduced 80th, 1947-48 81 St, 1949-50 82nd, 1951-52 83rd, 1953-54 Wth, 1955-56 85th, 1957-58 Wth, 1959-60 87th, 1961-62 88th, 1963-64 89th, 1965-66 90th, 1967-68 91St, 1969-70 92nd, 1971 -72 93rd, 1973-74

SOURCE: Matthews, Donald R. and Stimson, James A., Yeas and Nays: Normal Decision-Making in the U.S. House of Representatives, New York, NY, Wiley-Interscience, 1975, p. 6. Table A-9 U.S. DISTRICT COURTS-CIVIL CASES COMMENCED, 1941-78 Thousands Thousands Year of Cases Year of Cases 1941 38.5 1960 59.3 1942 38.1 1961 58.3 1943 36.8 1962 61.8 1944 38.5 1963 63.6 1945 61 .O 1964 66.9 1946 67.8 1965 67.7 1947 59.0 1966 70.9 1948 46.7 1967 70.9 1949 53.4 1968 71.5 1950 54.6 1969 77.2 1951 51.6 1970 87.3 1952 58.4 1971 N.A. 1953 64.0 1972 96.2 1954 59.5 1973 98.6 1955 59.4 1974 103.5 1956 62.4 1975 117.3 1957 62.4 1976 130.6 1958 67.1 1977 130.6 1959 57.8 1978 138.8

SOURCE: U.S. Bureau of the Census, Department of Abstract of the United States, 1979, Washington, DC, Commerce, Historical Statistics of the United States, Department of Commerce, U.S. Government Printing Colonial Times to 7970, Washington, DC, U.S. Gov- Office, 1979, p. 192. ernment Printing Office, 1975, p. 418; and Statistical Table A- 10 CASES DOCKETED IN APPELLATE COURTS, SELECTED YEARS, 1936.78

United States Supreme Court Circuit Court of Appeals Number Cases per Number Cases per Year Population of Million of Million (millions) Cases Population Cases Population 980 7.65 - - 973 7.27

' Figures after 1969 are not comparable.

SOURCE: Hazzard, Geoffrey C., Jr., The Courts, the Public and the Law Explosion, The American Assembly, Colum- bia University, Englewood, NJ, Prentice Hall, 1965, p. 76; U.S. Bureau of the Census, Department of Commerce, Historical Statistics of the United States, Colonial Times to 1970, Washington, DC, U.S. Government Printing Office, 1975; and Statistical Abstract of the United States, 1979, Department of Commerce, Washington, DC, U.S. Govern- ment Printing Office, 1979, p. 191-92. Table A-12 PAGES CONTAINED IN THE FEDERAL REGISTER AND CODE OF Table A-1 1 FEDERAL REGULATIONS, NUMBER OF FEDERAL MANDATES SELECTED YEARS, 1936-75 BY ESTIMATED YEAR OF IMPOSITION, BY DIRECT ORDERS Code of AND CONDITIONS OF AID, 1941-78 Federal Federal Year Register Regulations Years Direct Conditions Total 1936 2,355 - Orders of Aid 1946 14,736 - 1941-45 - - - - - 1956 10,528 1946-50 8 8 1966 16,850 - 1951-55 - 2 2 1970 20,036 54,105 1956-60 2 2 4 1971 25,447 54,487 1961-65 5 24 29 1972 28,928 61,035 1966-70 43 92 135 1973 35,592 64,852 1971-75 109 559 668 1974 42,422 69,270 1976-78 57 354 91 1 1975 60,221 72,200 SOURCE: Lovell, Katherine, et. al., Federal and State SOURCE: Fiorina, Morris P., Congress: Keystone of the Mandating to Local Government: Impact and Issues, Washington Establishment, New Haven, CT, Yale Uni- Riverside, CA, University of California, 1979 draft, p. 71. versity Press, 1977, p. 93; and the Public Interest, Number 47, National Affairs, Inc., New York, NY, Spring 1977, p. 50. Table A- 13 FEDERAL AID TO STATE AND LOCAL GOVERNMENTS, SELECTED YEARS, 1902-80 Federal Aid* Federal Aid as a Percent of: to State Total Domestk State and and Local Federal Federal Local Year Governments GNP Outlays Outlays Expenditures 1902 $ .028 0.1 O/o - - - 1913 ,039 0.1 - - - 1922 .242 0.3 - - - 1927 ,249 0.3 - - - 1932 .593 1.o - - - 1934 2.4 3.7 - - - 1936 2.2 2.7 - - - 1938 1.8 2.1 - - - 1940 2.1 2.1 - - - 1942 1.8 1.1 - - - 1944 1.9 0.9 - - - 1946 1.4 0.7 - - - 1948 2.3 0.9 - - - 1950 3.0 1.1 5.3% 8.8% 10.4% 1952 3.1 0.9 - - - 1953 3.4 0.9 - - - 1954 3.4 0.9 - - - 1955 3.5 0.9 4.7 12.1 10.1 1956 3.7 0.9 - - - 1957 4.1 0.9 - - - 1958 5.1 1.1 - - - 1959 6.5 1.4 - - - 1960 7.0 1.4 7.6 16.4 13.5 1961 7.1 1.4 7.3 15.4 12.6 1962 7.9 1.4 7.4 15.8 13.2 1963 8.6 - 7.8 16.5 13.3 1964 10.1 - 8.6 17.9 14.6 1965 10.9 1.6 9.2 18.4 14.6 1966 13.0 - 9.7 19.2 15.6 1967 15.2 - 9.6 19.5 16.3 1968 18.6 - 10.4 20.9 18.2 1969 20.3 - 11.o 21.3 17.4 1970 24.0 2.4 12.2 21.1 19.4 1971 28.1 2.6 13.3 21.4 19.9 1972 34.4 2.9 14.8 22.8 22.0 1973 41.8 3.2 16.9 24.8 24.3 1974 43.4 3.1 16.1 23.3 22.7 1975 49.8 3.2 15.2 21.3 23.2 1976 59.1 3.5 16.1 21.8 24.7 1977 68.4 3.6 17.0 22.8 26.4 1978 77.9 3.7 17.3 22.9 26.7 1979 82.1 3.5 16.6 22.1 25.4 1980 82.9 - 15.6 20.9 23.6

'Billions of 1961 dollars through 1959, current dollars after that point.

SOURCE: Wright, Deil, "The Administrative Dimensions of intergovernmental Relations," Draft for: Contemporary Public Administration, Vocino, Thomas and Rabin, Jack, eds., Harcourt, Brace Jovanovich, Inc., New York, NY, July 1979; and Mosher, Frederick C. and Poland, Orville F., The Costs of American Governments: Facts, Trends, Myths New York, NY, Dodd, Mead and Company, 1964, p. 162; and AClR staff computations. Table A-15 FEDERAL AID TO STATE AGENCIES, SELECTED YEARS, 1964-78 Percent of State Agencies Receiving Percent of State Half or More of Their Agencies Receiving Budget from Year Federal Aid Federal Aid

Table A-14 SOURCE: Wright, Deil, "The Administrative Dimensions of Intergovernmental Relations," Draft for Contempo- RISE IN THE NUMBER OF rary Public Administration, Vocino, Thomas and Robin, GRANTS-IN-AID, SELECTED YEARS, Jack for Harcourt, Brace, Jovanovich, Inc., New York, 1902-74 NY, July 1979. Year Number 1902 5 1912 7 1920 11 1925 12 1932 12 Table A-16 1937 26 CHANGING COMPOSITION 1946 28 OF THE FEDERAL BUDGET, 1968-75 1952 38 (in billions of constant 1972 dollars) 1964 51 379 1967 Percentage 1971 530 Total of Total 1974 550 Federal Transfer Federal SOURCE: Jacob, Herbert and Vines, Kenneth N., eds., Year Outlays Payments Outlays Politics In the American States, a Comparative Analysis, 3rd Edition, Boston, MA, Little, Brown and Company, 1968 1976, p.21. 1969 1970 1971 1972 1973 1974 1975 est.

SOURCE: Shariff, Zahid, "How Big is Big Government?" Social Policy, Social Policy Corp., New York, NY, MarchIApril 1978, p.26. Table A- 17 FEDERAL PARTICIPATION IN DOMESTIC CREDIT MARKETS, 1969-80 (in billions of dollars)

Actual Estimates Total Funds Advanced In U.S. 1973 1974 Credit Markets1 (Includes equities) ...... Advanced under Federal Auspices ...... Direct Loanr: On-Budget ...... Off-Budget ...... Guaranteed Loans ...... Government-Sponsored Enterprise Loans ...... Federal Paftldpatlon Rate Including Government-Sponsored Enterprise8 (percent) ......

Total Funds Raised In U.S. Credit Markets1 ...... Ralaed under Federal Ausplces ...... Federal Borrowing from Public ...... Guaranteed Bonowlng ...... Government-Sponsored Enterprise Borrowing ...... Federal Partlclpatlon rate (percent) ......

lNonfinancial sectors. SOURCE: Federal Reserve Flow of Funds Accounts. SOURCE: Special Analysis of the Budget of the United States Government, Fiscal Estimates from Table E-10. Year 1980, Special Analysis F, Washington DC, U.S. Government Printing Office. 2Not Estimated. p.135. Table A- 18 TAX AND DIRECT SPENDING TOTALS, FISCAL YEARS 1968,1975-84 (in billions of dollars) Year 1968 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 Tax Expenditures $44.0 $92.9 $97.4 $1 13.5 $123.8 $1 50.1 $1 68.8 $1 91.2 $214.9 $240.6 $269.0 Direct Outlays 178.8 326.1 366.4 402.7 450.8 493.4 544.1 597.3 649.3 696.7 744.7 Total 222.8 419.0 463.8 516.2 574.6 643.5 712.9 788.5 864.2 937.31,013.7

SOURCE: Congressional Budget Office Supplemental Reports on Tax Expenditures, Washington, DC, US. Govern- ment Printing Office.

Table A- 19 FEDERAL CIVIL EMPLOYEES, EXECUTIVE BRANCH, SELECTED YEARS, 1930-79 (thousands of persons)

Veterans All Year Defense Post Office Administration* Other Total

'Veterans Administration figures calculated with "All other" prior to 1960. SOURCE: U.S. Bureau of the Census, Department of Commerce, Historical Statistics of the United States, Colonial Times to 1970, Washington, DC, U.S. Government Printing Office, 1975, Part 2, p. 1102, and Statistical Abstract of the United States, 1979, Washington, DC, Department of Commerce, US. Government Printing Office, 1979, pp. 277-78. Table A-20 POPULATION AND GROSS NATIONAL PRODUCT OF THE UNITED STATES, SELECTED YEARS, 1910-79 Gross National Product Gross National Product (billions of dollars) (billions of dollars) Population Current Constant Population Current Constant Year (milllons) Dollars 1972 Dollars Year (millions) Dollars 1972 Dollars 1910 91.97 - - 1970 204.88 982.0 1,075 1920 105.71 - - 1971 207.05 1,065.0 - 1929 $ 103.1 - 1972 208.85 1,171.O 1,171 1933 55.6 - 1973 210.41 1,307.0 1,235 1940 99.7 - 1974 21 1.90 1,413.0 1,218 1945 21 1.9 - 1975 213.56 1,528.0 1,202 1950 286.0 $ 534 1976 215.15 1,700.0 1,271 1955 399.0 655 19TI 21 6.88 1,900.0 1,340 1960 506.0 737 1978 21 8.72 2,128.0 1,399 1965 688.0 926 1979 220.58 2,369.0 1,432

SOURCE: U.S. Bureau of the Census, Department of Commerce, U.S. Government Printing Office, 1979, Commerce, Historical Statistics of the United States, Economic Report of the President, 1981, Washington, Colonial Times to 1970, Washington, DC, U.S. Govern- DC, U.S. Government Printing Office, 1980; and Survey ment Printing Office, 1975; Statistical Abstract of the of Current Business, Vol. 58, No. 7, Washington, DC, United States, 1979, Washington, DC, Department of Bureau of Economic Analysis, July 1978.

Table A-21 I TOTAL GOVERNMENT OUTLAYS AS A PERCENTAGE OF GROSS DOMESTIC PRODUCT, SELECTED YEARS, 1965-73

United States United Kingdom West Germany France Italy Canada Norway Belgium Denmark Japan

'Data for 1972, latest available. SOURCE: OECD, National Accounts Statistics, 1960-71 and 1962-73, national tables, as cited in Joseph Scherer, "How Big Is Government?", Challenge, M.E. Sharpe, InC., White Plains, NY, September-October, 1975, p. 61. Table A-22 FEDERAL DOMESTIC EXPENDITURE, SELECTED YEARS, 1954-78 (Social Security and federal aid emerge as the fastest growing components in our steadily expanding federal domestic sector1)

Federal Domestic Expenditure Federal Domestic Expenditure Social Social Calendar Securlty Federal All Securlty Federal All Year (OASDHI) Aid2 Others (OASDHI) Aid Others Amount (in billions) As a Percent of GNP 1954 $ 3.7 $ 2.9 $ 16.1 1 .O% 0.8% 4.4% 1964 16.3 10.4 27.5 2.6 1.6 4.3 1969 33.8 20.3 38.8 3.6 2.2 4.1 1970 39.4 24.4 46.3 4.0 2.5 4.7 1971 45.5 29.0 54.7 4.3 2.7 5.1 1972 50.9 37.5 60.8 4.3 3.2 5.2 1973 61.7 40.6 64.7 4.7 3.1 5.0 1974 71.9 43.9 78.2 5.1 3.1 5.6 1975 83.3 54.6 104.4 5.4 3.6 6.8 1976 94.9 61.1 109.1 5.6 3.6 6.4 1977 107.1 67.4 118.3 5.7 3.6 6.3 1978 est. 120.0 77.0 122.5 5.7 3.6 5.8 Percentage Distribution Annual Percent Change 1954 16.3% 12.8% 70.9% - - - 1964 30.1 19.2 50.7 16.0% 13.640/0 5.54% 1969 36.4 21.9 41.8 15.7= 14.3= 7.1" 1970 35.8 22.2 42.1 16.6 20.2 19.3 1971 35.2 22.4 42.3 15.5 18.9 18.1 1972 34.1 25.1 40.8 11.9 29.3 11.2 1973 36.9 24.3 38.7 21.2 8.3 6.4 1974 37.1 22.6 40.3 16.5 8.1 20.9 1975 34.4 22.5 43.1 15.9 24.4 33.5 1976 35.8 23.0 41.2 13.9 11.9 4.5 1977 36.6 23.0 40.4 12.9 10.3 8.4 1978 est. 37.6 24.1 38.3 12.0 14.2 3.6

1 National Income and Product Accounts. ?Federal aid under this series "National lncome Account," differs slightly from the federal payments (Census) series used in a subsequent table showing federal aid by major purpose. The major difference is the inclusion of federal payments for low-rent public housing (est. at $1.6 billion in 1976) in the Census series but excluded by definition from this series. Includes federal General Revenue Sharing. 3lncludes direct federal expenditure for education; public assistance and relief, veteran benefits and services, com- merce, transportation, and housing, etc. 'Annual average increase 1954 to 1964. 5Annual average increase 1964 to 1969. SOURCE: AClR staff compilation based on U.S. Department of Commerce, Bureau of Economic Analysis, Benchmark Revision of National Income and Product Accounts: Advance Tables, Washington, DC, U.S. Government Printing Office, March 1976; Survey of Current Business, Washington, DC, Bureau of Economic Analysis, annually; Budget of the United States Government, Washington, DC, US. Government Printing Office, various years; and AClR staff esti- mates. Table A-23 FEDERAL DOMESTIC EXPENDITURE, SELECTED YEARS, 1929-80 (in billions of dollars)

Federal Aid Constant Current 1967 Year Dollars Dollars2

Federal aid under this series "National Income Ac- count," differs slightly from the federal payments (Cen- sus) series used in a subsequent table showing federal aid by major purpose. The major difference is the inclu- sion of federal payments for low-rent public housing (est. at $1.6 billion in 1976) in the Census series but excluded by definition from this series. Includes federal General Revenue Sharing. 2Based on the Consumer Price Index. SOURCE: Advisory Commission on Intergovernmental Relations, Significant Features of Fiscal Federalism 1978-79 Edition, M-115, Washington, DC, U.S. Gov- ernment Printing Office, May 1979, p. 10, as updated by staff. Table A-24 THE GROWING STATE AND LOCAL DEPENDENCY ON OUTSIDE AID, SELECTED YEARS, 1948-78 (in millions of dollars) State and Federal Aid to Federal Aid to States Local Governments As a Percent of State As a Percent of Local General Revenue General Revenue Fiscal Year Amount from Own Source Amount from Own Source

1975 1976 1977 1978 est.

1 Includes the following federal General Revenue Sharing payments (in billions): 1973-state $2.2, local $4.4; 1974- state $2.0, local $4.1; 1975-state $2.0, local $4.1; 1976-state $2.1, local $4.1; 1977-state $2.3, local $4.4; 1978-state $2.3, local $4.5 2The $85.5 billion of intergovernmental aid received by local governments in 1978 can be broken down as follows: $20.5 billion direct federal aid, approximately $15 billion indirect federal aid (passed through the state-estimated on basis of 1967 data, latest available), and $50.0 billion direct state aid. SOURCE: AClR staff compilation based on U.S. Bureau of the Census, Governmental Finances, Washington, DC, US. Government Printing Office, various years; and AClR staff estimates. Table A-25 STATE AID OUTLAY IN RELATION TO LOCAL OWN SOURCE REVENUE, SELECTED YEARS, 1954-78

Total State Aid As Percent of Local General Revenue from Year Amount Own Sources

SOURCE: AClR staff compilation based on U.S. Bureau of Census, Governmental Finances, Washington, DC, U.S. Government Printing Office, various years; and AClR staff estimates. Table A-26 GROSS FEDERAL PUBLIC DEBT AND INTEREST ON THE PUBLIC DEBT AS A PERCENT OF GNP, 1942-80 Interest on Interest on Gross Fed- The Public Gross Fed- The Public era1 Public Debt as a era1 Public Debt as a Fiscal GNP Debt as a Percent of Fiscal GNP Debt as a Percent of Year (billions) Percent of GNP GNP Year (billions) Percent of GNP GNP

1942 1.67OIo 1943 1.72 1944 1.73 1945 1.73 1946 1.67 1947 1.73 1948 1.76 1949 1.84 1950 2.01 1951 2.06 1952 1.97 1953 1.95 1954 2.1 6 1955 2.24 1956 2.29 1957 2.27 1958 2.36 1959 2.59 1960 2.91 1961

SOURCE: Department of the Treasury, Annual Report of the Secretary, 1978, Statistical Appendix, and The Treasury Bulletin, February 1980, Washington, DC, US. Government Printing Office; Executive Office of the President, Office of Management, and Budget, the United States Budget in Brief, 1981, Washington, DC, U.S. Government Printing Office; and U.S. Department of Commerce, Bureau of Economic Analysis, The National Income and Product Accounts of the United States, 1929-74, Statistical Tables, Washington, DC, U.S. Government Printing Office. Table A-27 INTEREST PAYMENTS ON GOVERNMENT DEBT, SELECTED YEARS, 1929-78 (government interest payments are increasing at a faster rate than government revenue)

Fiscal Year Federal1 State2 Local2 Federal State Local

Amount (in millions) As a Percent of GNP $ 678 $ 95 $ 550 0.7% 0.1 % 94 1 129 534 1.1 0.1 5,339 97 330 2.0 * 6,382 193 525 1.8 0.1 7,593 453 963 1.6 0.1 10,666 765 1,590 1.7 0.1 16,588 1,275 2,457 1.8 0.1 19,304 1,499 2,875 2.0 0.2 20,959 1,761 3,328 2.1 0.2 21,849 2,135 3,894 2.0 0.2 24,167 2,434 4,351 2.0 0.2 29,319 2,863 4,803 2.2 0.2 32,665 3,272 5,511 2.2 0.2 37,063 4,140 6,129 2.3 0.3 41,900 5,136 6,257 2.3 0.3 48,695 5,268 6,714 2.4 0.3

Percent Distribution As a Percent of General Revenue3

'Less than .05 percent. 'Interest on the Public debt. Data for 1929-49 are administrative budget figures; for 1954-76, unified budget figures. 21nterest on general debt. =General revenue from own sources (before intergovernmental transfers).

SOURCE: AClR staff compilation based on U.S. Bureau of the Census, Governmental Finances, Washington, DC, U.S. Government Printing Office, various Years; Office of Management and Budget, Special Analysis, Budget of the United States Government, Washington, DC, U.S. Government Printing Office, 1980; US. Treasury Department. Treasury Bulletin, Washington, DC, US. Government Printing Office, various issues; and AClR staff estimates. Table A-28 GOVERNMENT EMPLOYMENT, -- SELECTED YEARS, 1870-1977 Table A-29 Total Government PUBLIC EMPLOYMENT AS Government Labor Force as APERCENTOF Labor Force Population a Percent of LABOR FORCE, Year (thousands) (thousands) Population SELECTED YEARS, 1929-62 Total Total State Total Federal and Local Public Em- Government Government Year ployment Employment Employmenl

SOURCE: Freeman, Roger A.. The Growth of American SOURCE: Mosher, Frederick C. and Poland, Orville F., Government, Stanford, CA, Hoover Institution Press, The Costs of American Governments: Facts, Trends, Stanford University, 1975, p.203, and Appendix Table Myths, New York, NY, Dodd, Mead and Company, 1964, A-41 ; and Special Analysis of the Budget of the United p.170-71. States Government, Fiscal Year 1981, Washington, DC, US. Government Printing Office, 1980, p.288. Table A-30 GOVERNMENT EMPLOYMENT AND POPULATION, 1952-72 Governmental Employment Governmental Employment State per 1,000 Population Federal and Popu- Totai Civilian Locai lation Federal State and Year (1000's) (1000's) (1000's) (1000's) Total Civilian Local 1952 - - 157,553 1953 5,940 2,385 4,126 160,184 1954 - - - 1 63,026 1955 - - - 165,931 1956 - - - 168,903 1957 5,237 2,439 4,793 171,984 1958 - - - 1 74,882 1959 - - - 177,830 1960 - - - 180,671 1961 - - - 183,691 1962 5,347 2,539 5,958 186,538 1963 - - - 189,242 1964 - - - 191,889 1965 - - - 194,303 1966 - - - 1 96,560 1967 6,370 2,993 7,455 198,712 1968 - - - 200,706 1969 - - - 202,677 1970 - - - 204,878 1971 - - - 207,053 1972 5,117 2,795 9,237 208,846

SOURCE: Freeman, Roger A., The Growth of American Government, Stanford, CA, Hoover Institution Press, Stanford University, 1975, p. 209; Special Analysis of the Budget of the United States Government, Fiscal Year 1981, Wash- ington, DC, U.S. Government Printing Office, 1980, p.285; and AClR staff estimates. Table A-32 NUMBER AND PERCENT OF "MAJOR" PROPOSALS REPORTED BY COMMllTEES OF U.S. Table A-31 HOUSE, BY CONGRESS, 1957-72 INDICATORS OF THE SIZE OF Number of Number of FEDERAL GOVERNMENT, 1947-77 "Major" "Major" ~tol Total Proposals Proposals "Major" Total Federal Congws According to R0port.d by PmpO8ala Federal Federal employees and Years C.Q. Almanac Comm~Rop0rt.d Employees Outlays per $1 million 85th, 1957-58 m, 1958-60 Year (billions). 87th, 1961-62 1947 $69.5 m,1963-64 1948 56.0 89th, 1965-66 1949 73.9 gOttr, 1967-68 1950 79.4 9l.t 1989-70 92nd, 1971-72 1951 79.5 93rd, 1973-74 1952 1 16.7 Total 1953 129.3 1954 1 18.8 SOURCE: Matthews, Donald R. and Stimson, James A., 112.3 Yeas and Nays: Normal Decision-Making in the U.S. 1955 House of Representatives, New York, NY, Wiley- 1956 112.0 Interscience, 1975, p. 8. 1957 1 18.0 1958 125.0 Table A-33 1959 136.4 STATE AND FEDERAL LEGISLATIVE 1960 134.3 ENACTMENTS, SELECTED YEARS, 1961 141.2 1950-76 1962 151.4 1963 155.2 State 1964 1 63.1 Congressional Leglslatlve 1965 159.4 Year Enactments Enactments 1966 175.4 1967 200.3 1968 21 6.6 1969 21 2.8 1970 21 5.2 1971 220.2 1972 231.9 1973 233.0 1974 230.6 1975 255.1 1976 est. 4,975 277.5 1977 est. 4,936 275.3

Computed by author. blnclude civilian employees, active military personnel, and the Coast Guard.

SOURCE: Shariff, Zahid, "How Big is Big Government?" SOURCE: State and Local Government Review, Insti- Social Policy, Social Policy Corp., New York, NY, tute of Government, University of Georgia, Athens, GA, MarWApril, 1978, p. 23. May 1979, p. 75; and U.S. Bureau of the Census, De- partment of Commerce, Statistical Abstract of the United States, 1979, Washington, DC, U.S. Government Printing Office, 1979, p. 502. Table A-34 THE GROWING DOMESTIC PUBLIC SECTOR-THE RELATIVE DECLINE IN DEFENSE EXPENDITURE, SELECTED YEARS, 1954-79 (as a percent of GNP) Domestic Domestic Total (federal, state Total (federal, state Year Public Sector and local) Defense2 Year Public Sector and local) Defense2 1954 26.5% 13.6% 12.9% 1974 32.4 24.9 7.5 1964 27.7 17.7 10.1 1975 34.9 27.4 7.5 1969 30.5 20.3 10.2 1976 33.5 26.5 7.1 1970 31.7 22.2 9.6 1977 32.9 26.1 6.9 1971 32.0 23.4 8.6 1972 31.7 23.5 8.2 1978est. 32.5 25.9 6.7 1973 31 .O 23.5 7.5 1979 est. 32.6 26.0 6.6

I National Income and Product Accounts. United States, 1929-74, and Advance Tables, March, 1976, Statistical Tables and Survey of Current Busi- 2National defense, international affairs and finance, and ness, Washington, DC, U.S. ~~~~~~~~~t Printing Office, space research and technology. Also includes the es- various years; US. Bureau of the Census, Department of timated portion of net interest attributed to these func- Commerce, Governmental Finances, Washington, DC, tions US. Government Printing Office, annually; Budget of the United States Government, Washindon, DC, US. Gov- SOURCE: AClR staff computations based on U.S. De- ernment Printing Office, various Economic Repoflof partment of Commerce, Bureau of Economic Analysis, The President, Washington, DC, US. Government Printing The National Income and Product Accounts of the Office, January 1979; and AClR staff estimates.

Table A-35 PERCENTAGE DISTRIBUTION OF FEDERAL GRANT-IN-AID OUTLAYS, BY FUNCTION, SELECTED YEARS, 1958-78 Actual Function 1958 1963 1968 1973 1978 Natural Resources and Environment Agriculture Transportation Community and Regional Development Education, Training, Employment, and Social Services Health lncome Security General Purpose Fiscal Assistance Other

Total

SOURCE: Special Analysis, Budget of the United States Government, Washington, DC, US. Government Printing Office, Fiscal Year 1980, p. 223. Table A-36 PUBLIC AND PRIVATE SECTORS FINANCE RELATIVELY CONSTANT SHARES OF SCHOOL EXPENDITURES, SELECTED YEARS, 1950-79

Total Fiscal (public and Public Year private) Total Federal State-Local Private Amount (in billions) 1950 $ 10.9 $ 9.4 $ 2.9' $ 6.5 $ 1.5 1955 14.2 11.9 1.2 10.7 2.3 1960 21.7 18.0 1.3 16.7 3.7 1965 34.2 28.1 2.5 25.6 6.1 1970 62.4 51.9 6.9 45.0 10.4 1975 100.8 85.3 13.1 ' 72.2 15.5 1979 135.2 113.7 16.2 97.5 21.5 As a percent of GNP 1950 4.1% 3.5% 1.1% 2.5% 0.6% 1955 3.7 3.1 0.3 2.8 0.6 1960 4.4 3.6 0.3 3.4 0.7 1965 5.2 4.3 0.4 3.9 0.9 1970 6.5 5.4 0.7 4.7 1.1 1975 6.9 5.9 0.9 5.0 1.1 1979 5.8 4.9 0.7 4.2 0.9

l The larger Federal expenditures in 1950 and in recent years can be attributed in part to veterans' educational pro- grams.

SOURCE: AClR staff compilation based on Skolnick, Alfred M., and Dales, Sophie R., Social Welfare Expenditures, 1950-75, Social Security Bulletin, Washington, DC, U.S. Department of Health, Education and Welfare, U.S. Govern- ment Printing Office, January 1976; U.S. Department of Commerce, Bureau of Economic Analysis, Benchmark Revi- sion of National Income and Product Accounts: Advance Tables, Washington, DC, U.S. Government Printing Office, March 1976; and U.S. Bureau of the Census, Department of Commerce, Statistical Abstract of the United States, 1979, Washington, DC, U.S. Government Printing Office, 1979. Table A-37 FEDERAL GRANT OUTLAYS AS RELATED TO STATE-LOCAL EXPENDITURES,' SELECTED YEARS, 1953-77 Fiscal Years 1953 1969 1974 1977 Federal Federal Grants Grants Federal as Per- as Per- Grants as Federal Total cent of Total cent of Percent of Grants as State- state- state- state- state- Percent of Local Local Local Local Local State-Local Federal Expendi- Expendi- Federal Expendi- Expendi- Expendi- Purpose Expenditures Grants tures tures Grants tures tures tures Educatlon 5% $ 4.8 $ 47.3 1 0% $ 7.5 $ 75.9 10% 10% Highways 10 4.4 15.5 28 4.6 20.0 23 27 Publlc Welfare 46 6.4 12.3 52 12.8 25.0 52 56 Health and Hospitals 5 0.7 8.6 8 1.1 16.1 7 10 Natural Resources 8 0.3 2.6 12 0.8 3.7 20 19 Housing and Urban Renewal 48 2.4 3.5 69 85 Air Transportation 16 0.3 1.3 19 29 Social Insurance 4 Administration 92 0.8 1.3 63 90 Other 6 12.6 45.1 28 33 Interest 0 0.0 7.7 0 0 Total 10% 1 7% $42.9 $1 98.6 22% 27%

1 Billions of Dollars. State-local expenditures are from own sources.

SOURCES: U.S. Bureau of the Census, Department of Commerce, Governmental Finances Annually, Washington, DC, US. Government Printing Office, various years, and AClR staff estimates. Table A-38 THE RECENT DRAMATIC INCREASE IN THE FEDERAL SHARE OF HEALTH AND MEDICAL CARE EXPENDITURES, SELECTED YEARS, 1950-78 (public and private expenditures for health and medical care)*

Total Public Fiscal Year (Public-Private) Total Federal State-Local Private Amount (in billions) $3.1 $1.4 4.4 1.9 6.4 2.9 9.5 4.6 25.2 16.6 51.2 34.1 58.9 40.6 67.3 46.1 76.2 32.5 As a Percent of GNP 1.200/0 0.50% 1.20 0.50 1.30 0.60 1.40 0.70 2.60 1.70 3.40 2.20 3.50 2.40 3.60 2.50 3.60 2.50

Studies on private sector discontinued after 1975.

SOURCE: AClR staff compilation based on Skolnick, Alfred M., and Dales, Sophie R., Social Welfare Expenditures, 1950-75, Social Security Bulletin, Washington, DC, U.S. Department d Health, Education and Welfare, US. Govern- ment Printing Office, January 1976; U.S. Department of Commerce, Bureau of Economic Analysis, Benchmark Revi- sion of National Income and Product Accounts: Advance Tables, March 1976, Washington, DC, US. Government Printing Office, Bureau of the Census, Department of Commerce, Statistical Abstract of the United States, 1979, Washington, DC, U.S. Government Printing Office, 1979, p. 439; and Social Security Administration, Office of Research and Statistics, Research and Statistics Note, Washington, DC, U.S. Government Printing Office, Note no. 2, February 14, 1980. Table A-39 THE INCREASING FEDERAL SHARE OF SOCIAL WELFARE EXPENDITURES, SELECTED YEARS, 1950-78 (public and private expenditures for social welfare programs)*

Total2 Public Fiscal Year (Public-Private) Total Federal State-Local Private Amount (in billions) 1950 $23.5 $1 0.5 $1 3.0 $12.2 1955 32.6 14.6 18.0 18.0 1960 52.3 25.0 27.3 27.8 1965 77.2 37.7 39.5 42.8 1970 145.8 77.3 68.4 68.0 1975 290.1 167.5 122.6 107.8 1976 332.0 197.4 134.6 1977 361.6 21 8.5 143.0 1978 394.5 240.5 154.0

As a Percent of GNP

'Studies on private sector discontinued after 1975.

Includes: Income maintenance, health, education, and welfare and other services. 21ncludes the following amounts of duplication resulting from use of cash payments received under public and private social welfare programs to purchase medical care and educational services: 1950-$0.4 bit., 1955-$0.6 bil., 1960-$1.4 billion, 1965-$2.0 bit., 1970-$2.8 bil., and 1975-$5.6 bil.

SOURCE: AClR staff compilation based on Skolnick, Alfred M., and Dales, Sophie R., Social Welfare Expenditures, 1950-75, Social SecurQ Bulletin, Washington, DC, U.S. Department of Health, Education and Welfare, US. Government Printing Office, January 1976; U.S. Department of Commerce, Bureau of Economic Analysis, Benchmark Revision of National lncome and Product Accounts: Advance Tables, Washington, DC, US. Government Printing Office, March 1976; U.S. Bureau of the Cen- sus, Department of Commerce, Statistical Abstract of the United States 1979, Washington, DC, U.S. Government Printing Office; and McMillan, Alma W., and Bixby, Ann Kallman, Social Welfare Expenditures, Fiscal Year 1978, Research and Statis- tics Note, Washington, DC, U.S. Department of Health, Education and Welfare, U.S. Govemment Printing Office, February 14, 1980. Table A-40 THE FEDERAL GOVERNMENT IS THE PRIMARY UNDERWRITER OF INCOME MAINTENANCE PROGRAMS, SELECTED YEARS, 1950-75 (public and private expenditures for income maintenance programs)

Total Public1 Fiscal Year (Public-Private) Total Federal State-Local Private* Amount (in billions) $ 9.7 $ 5.6 $ 4.1 $ 1.0 15.4 11 .I 4.3 * 1.9 26.3 20.1 6.2 3.5 36.6 28.9 7.7 6.0 60.8 48.2 12.6 11.6 132.1 1 02.4 29.7 20.7 As a Percent of GNP

Includes cash benefits and administrative costs under social insurance, public assistance, supplemental security in- come, and veterans' and emergency employment programs. Excludes cost of medical services provided in conjunction with these programs and for other welfare programs. 2lncludes employee benefits under private pension plans; group life (including government civilian employee pro- grams), accidental death and dismemberment, and cash sickness insurance; paid sick leave; and supplemental un- employment benefit plans. 3Preliminary.

SOURCE: Skolnick, Alfred M., and Dales, Sophie R., Social Welfare Expenditures, 1950-75, Social Security Bulletin, Washington, DC, US. Department of Health, Education and Welfare, U.S. Government Printing Office, January 1976; and U.S. Department of Commerce, Bureau of Economic Analysis, Benchmark Revision of National Income and Prod- uct Accounts: Advance Tables, Washington, DC, U.S. Government Printing Office, March 1976. Table A-41 GOVERNMENT EMPLOYMENT BY FUNCTION, SELECTED YEARS, 1952-77' Natlonal Defense National Defense Nondefense and Year and Inter- Health Level of Armed Natlonal Edu- Postal High- and Police Natural All government Total Total Forces Relations Total cation Service ways Hospitals Protection Resources other (Thousands of Dollars)

1952 Total 1,760 Federal 1,342 358 State 267 Local 1,135 1957 Total 1,994 Federal 1,222 322 State 314 Local 1,358 1962 Total 2,240 Federal 1,135 395 State 356 Local 1,489 1967 Total 2,711 Federal 1,351 418 State 477 Local 1,766 1972 Total 3,306 Federal 1,112 514 State 642 Local 2,150 1977 Total 17,538 Federal 4,980 3,122 2,133 State 3,467 Local 9,091

(Per 1000 Population 1952 Total 68.2 Federal 39.3 31.4 22.9 State 6.8 Local 22.1 1957 Total 63.7 Federal 30.7 23.6 16.4 State 7.6 Local 25.3 1962 Total 65.7 Federal 28.9 21.3 15.2 State 9.0 Local 27.8 1967 Total 77.4 Federal 32.5 24.2 17.4 State 11.8 Local 33.0 1972 Total 77.8 Federal 25.2 17.1 11.8 State 14.2 Local 38.5 1977 TOW 81.1 Federal 23.0 14.4 9.9 State 16.0 Local 42.0

1 Full-Time and Part-Time. SOURCE: U.S. Bureau of the Census, Department of Commerce, Public Employment, Washington. DC, U.S. Government Printing Office, various years; and Economic Report of the President, 1979, Washington. DC. U.S. Government Printing Office, 1980. Table A-42 FEDERAL EXPENDITURES FOR REGULATION OF BUSINESS, 1974-79 (millions of dollars)

Fiscal Year Agency 1974 1975 1976 1977 1978 1979 Consumer Safety and Health 1,302 1,463 1,613 1,985 2,582 2,671 Job Safety and Other Working Conditions 31 0 379 466 492 562 626 Energy and Environment 347 527 682 870 989 1,116 Other 28 1 314 323 367 41 0 41 0 SOURCE: Subcommittee on Economic Growth and Stabilization of the Joint Economic Committee, Congress of the United States, The Cost of Government Regulation, Washington, DC, U.S. Government Printing Office, April, 1978, pp.57-59.

Table A-43 GROWTH OF FEDERAL INDIVIDUAL INCOME TAX, SELECTED YEARS, 1913-76 Percent of Population Year Covered 1913 less than 1.0%a 1918 7.7 1926 4.2 1939 5.0 1945 74.2 1950 58.9 1960 73.1 1970 80.8 1976 75.5 "Author's approximation.

SOURCE: Goode, Richard, The Individual Income Tax, Washington, DC, The Brookings Institution, 1976, p.4; and U.S. Internal Revenue Service, Statistics of In- come, "Individual Income Tax Returns," Washington, DC, US. Government Printing Office, May, 1978, p.258. Table A-44 PERCENT OF CIVILIAN PAYROLLS COVERED BY SELECTED SOCIAL INSURANCE PROGRAMS, SELECTED YEARS, 1950-77 .

Program 1950 1960 1965 1970 1972 1973 1974 1975 1976 1977 OASDHI (excludes armed forces) (taxable plus nontaxable) 77.2% 89.6% 88.4% 91.3% 91.4% 91.3% 91.4% 91.2% 91.7°/092.2% Unemployment Insurance (taxableplusnontaxable) 76.3 82.3 81.0 80.0 86.1 86.8 87.9 86.9 87.2 87.5 Note: Federal participation in permanent welfare and/or Social Insurance did not began until 1935 with the Social Security Act (as explained in Historical Statistics of the United States, Colonial Times to 1970, series H i-411).

SOURCE: U.S. Bureau of the Census, Department of Commerce, Statistical Abstract of the United States, 1979, Washington, DC, U.S. Government Printing Office, 1979, p.333.

Table A-45 ESTIMATED NUMBER OF THE POPULATION AGED 65 AND OVER RECEIVING OASDHI CASH BENEFITS, SELECTED YEARS, 1940-77

Number of Persons per 1,000 Receiving Year OASDHI 1940 16 1945 73 1950 205 1955 422 1960 638 1965 765 1967 839 1969 854 1971 853 1972 865 1973 884 1974 888 1975 90 1 1976 906 1977 913

SOURCE: U.S. Department of Health, Education and Welfare, Social Security Bulletin, Vol. 42, No. 6, Wash- ington, DC, U.S. Government Printing Office, June 1979, p.75.

Table A-46 PUBLIC ASSISTANCE,' RECIPIENTS AS RELATED TO POPULATION, SELECTED YEARS, 1940-78

Number of Number of Percent of Public Assistance Pubiic Assistance Population Recipients Population Recipients per Receiving Pubiic Year (millions) (millions) 1,000 Population Assistance 1940 6.983 132.6 52.79 5.3% 1945 3.578 140.5 25.62 2.6 1950 6.052 152.3 40.05 4.0 1955 5.81 9 165.9 34.96 3.5 1960 7.098 180.7 39.29 3.9 1965 7.802 194.3 40.1 4 4.0 1970 13.823 204.9 67.35 6.7 1975 16.708 213.6 78.18 7.8 1976 16.371 21 5.2 76.21 7.6 1977 15.870 21 7.4 73.14 7.3 1978 15.336 21 9.2 69.80 7.0

Total includes programs: Old Age Assistance, Aid to the Blind, Aid to the Permanently and Totally Disabled, Families with Dependent Children, and General Assistance Recipients.

SOURCE: U.S. Department of Health, Education and Welfare, Social Security Bulletin, March 1978, pp.55, 60 and Special Analysis of the Budget of the United States, 1981, Washington, DC, U.S. Government Printing Office, 1980; and U.S. Bureau of the Census, Department of Commerce, Historical Statistics of the United States, Colonial Times to 1970, Washington, DC, U.S. Government Printing Office, 1975.

Table A-47 ANNUAL COST OF FEDERAL REGULATION, 1976 AND 1979 (billions of dollars)

Administrative Compliance Year Costs Costs 1976 3.2 62.3 1979 4.8 97.9

SOURCE: Subcommittee on Economic Growth and Stabilization of the Joint Economic Committee, Con- gress of the United States, The Cost of Government Regulation, Washington, DC, U.S. Government Printing Office, April, 1978, pp.35, 46. Table A48 INCREASE IN RETAIL PRICE OF AUTOMOBILES DUE TO FEDERAL REQUIREMENTS, 196G78

Initial Total Model Year and Action Retail Year Adjusted for Cumulative Price Total Total

1968: Seat and shoulder belt installations $1 1.51 HEW standards for exhaust emissions system 16.00 1968-69: Windshield defrosting and defogging systems .70 Wirldshield wiping and washing systems 1.25 Door latches and hinge systems .55 Lamps, reflective devices and associated equipment 6.30 1969: Head restraints 16.65 1970: Lamps, reflective devices, and associated equipment 4.00 Standards for exhaust emission systems 5.50 1968-70: Theft protection (steering, transmission and ignition locking and buzzing system) 7.85 Occupant protection in interior impact (glove box door remains closed on impact) .35 1971: Fuel evaporative systems 19.00 1972: Improved exhaust emissions standards required by Clean Air Act 6.00 Warranty changes resulting from federal requirement that all exhaust emissions systems be warranted for five years or 50,000 miles 1.oo Voluntarily added safety features in anticipation of future safety requirements 2.00 Seat belt warning system and locking device on retractors 20.25 Table A-48-(Continued) INCREASE IN RETAIL PRICE OF AUTOMOBILES DUE TO FEDERAL REQUIREMENTS, 1968-78

Initial Total Model Year and Action Retail Year Adjusted for Cumulative Price Total Total 1972-73: Exterior protection (standard No. 21 5) 69.90 69.90 283.36 1973: Location, identification, and illumination of controls improvements .60 - - Reduced flammability of interior materials 5.80 6.40 292.08 1969-73: lmproved side door strength 15.30 15.30 31 2.93 1974: Interlock system and other changes to meet federal safety requirements 107.60 - - lmproved exhaust emissions systems to comply with the federal Clem .Air Act 1.40 109.00 446.43 1975: Additional safety features associated with federal motor vehicle safety standards Nos. 105, 208, and 21 6 10.70 - - Installation of catalytic converter 1 19.20 129.90 593.09 1975-76: Removal of interlock system (quality decrease) and additional installation of catalytic converters net effects (October 1976) 18.00 - - 1976 FMVSS No. 105 hydraulic brake system 6.50 - - FMVSS No. 21 5 improved bumpers 4.80 - - FMVSS No. 301 leak resistant fuel system 2.10 - - lmproved emissions control system 7.60 39.00 634.63 1977: FMVSS No. 215 improved bumpers 1.30 - - FMVSS No. 219 structural changes .95 - - FMVSS No. 301 leak resistant fuel system 4.70 - - lmproved emissions control system 14.30 21.25 655.88 1978: Redesign of emissions control systems to meet HEW air quality standards 9.99 9.99 665.87 Total 51 9.65 51 9.65 665.87

1 Yearly totals are expressed in 1977 dollars by use of the consumer price index.

SOURCE: Subcommittee on Economic Growth and Stabilization of the Joint Economic Committee, Congress of the United States, The Cost of Government Regulations, Washington, DC, US. Government Printing Office, April, 1978, p. 44. I Table A-49 ' NATIONAL EXPENDITURES FOR POLLUTION ABATEMENT AND CONTROL, CURRENT DOLLARS, 1972-77 (billions of dollars)

Private Year All Sectors Government Business Consumers

SOURCE: Rutledge, Gary L., "Pollution Abatement and Control Expenditures in Constant and Current Dollars, 1972-77," Survey of Current Business, Washington, DC, Bureau of Economic Analysis, February 1979, p.14, 15.

Table A-50 NATIONAL EXPENDITURES FOR POLLUTION ABATEMENT AND CONTROL CONSTANT 1972 DOLLARS, 1972-77 (billions of dollars)

Expenditures by Private Year All Sectors Government Business Consumers 1972 $1 8.687 $5.495 $1 1.594 $1.598 1973 21.055 5.825 13.182 2.048 1974 21.232 6.356 12.692 2.185 1975 22.803 6.982 13.122 2.699 1976 . 23.950 7.184 13.763 3.004 1977 24.459 6.981 14.388 3.091

SOURCE: Rutledge, Gary L., "Pollution Abatement and Control ~xpendituresin Constant and Current Dollars, 1972-77," Survey of Current Business, Washington, DC, Bureau of Economic Analysis, February 1979, p. 14, 15. Table A-51 GOVERNMENT EMPLOYMENT AND PAYROLL, 1950-78

Number of Employees Monthly Payroll (thousands) (millions) Year Federal State and Local Federal State and Local 1950 2,117 4,285 $ 613.4 $ 914.6 1951 2,515 4,287 857.4 1,008.0 1952 2,583 4,522 855.9 1,123.7 1953 2,385 4,663 793.1 1,220.5 1954 2,373 4,859 784.8 1,318.3 1955 2,378 5,054 845.7 1,418.8 1956 2,410 5,275 943.7 1,565.7 1957 2,432 5,665 953.0 1,669.0 1958 2,405 5,892 1,091.4 1,885.8 1959 2,399 6,088 1,072.7 2,041.7 1960 2,421 6,387 1,117.8 2,215.0 1961 2,484 6,616 1,213.6 2,419.9 1962 2,539 6,849 1,346.9 2,619.3 1963 2,548 7,188 1,423.0 2,840.3 1964 2,528 7,536 1,475.2 3,097.2 1965 2,588 8,001 1,483.7 3,400.3 I966 2,861 8,618 1,664.8 3,798.2 1967 2,993 8,874 1,842.3 4,213.2 I968 2,984 9,358 2,137.3 4,751.9 1969 2,969 9,716 2,335.3 5,252.3 1970 2,881 10,147 2,427.9 5,906.3 1971 2,872 10,444 2,528.7 6,382.2 1972 2,795 10,808 2,709.6 7,240.0 1973 2,786 11,353 3,012.0 8,014.9 1974 2,874 11,754 3,294.3 8,791.5 1975 2,890 12,084 3,583.8 9,640.1 1976 2,843 12,169 3,564.6 10,359.1 1977 2,848 12,611 3,918.4 11,420.0 1978 2,888 12,743 4,343.9 12,139.1

SOURCE: U.S. Bureau of the Census, Department of Commerce, Public Employment Annually, various years, Wash- ington, DC, U.S. Government Printing Office. COMMISSION MEMBERS

Private Citizens Abraham D. Beame, ACIR Chairman, New York, New York Bill G. King, Alabama Vacancy

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 j. Brown, Jr.,Ohio L. H. Fountain, North Carolina Charles B. Rangel, New York

Officers of the Executive Branch, Federal Government Juanita M. Kreps, Secretary of Commerce James T. McIntyre, Director, Office of Management and Budget Vacancy

Governors 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. Colorado State Senate Leo McCarthy, Speaker, California Assembly Vacancy

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. Dealaman, Freeholder Director, Somerset County, New Jersey L:3t is ACIR? The Advisor Commission on l ntergovernmental Rr lations (ACIIi ) was created by the Congress in 1959 to monitor the operation of the American federal sys- tem and to recommend improvements. AClR is a per- manent national bipartisan body representing t he ex- ecutive and legislative branches of Federal, state, and local government and the public. The Commission is composed of 26 members-nine representing the Federal government, 14 representing state and local government, and three representing the public. The President appoints P- three citizens and three Federal executive officials 8'~rectly ivat and four governors, three state le islators, four may- on, and three elected county o7 ficials from slates nominated by the National Governors' Conference, the Council of State Governments, the National League of Cities/U.S. Conference of Mayors, and the Nat~onalAssociation af Counties. The three Senators are chosen by the President of the Senate and the three Congressmen by the Speaker of the House. Each Con~missionmember serves a two year term and may be reappointed. As a continuing body, the Commission approaches its work b addressing itself to specific issues and prob- lems, t 1: e resolution of which would produce im- proved cooperation among the levels of overnment and more effective functioning of the fe dera1 system. In addition to dealing with the all important functional and structural relationships among the various gov- ernments, the Commission has also extensively stud- ied critical stresses currently being placed on tradi- tional governmental taxing practices. One of the long range efforts of the Commission has been to seek ways to improve Federal, state, and local governmental tax- ing practices and policies to achieve equitable alloca- tion of resources, increased efficiency in collection and administration, and reduced compliance burdens upon the taxpayers. Studies undertaken by the Commission have dealt with subjects as diverse as transportation and as spe- cific as state taxation of out-of-state de sitories; as wide ranging as substate regionalism to t I? e more spe- cialized issue of local revenue diversification. In select- in items for the work program, the Commission con- s'2 ers the relative importance and urgenc of the roblem, its manageability from the pant oI view of rmances and staff available to AClR and the extent to which the Commission can make a fruitful contribu- tion toward the solution of the problem. 1 After selecting specific intergovernmental issues for investigation, AClR follows a multistep procedure that assures review and com'nent by representatives of all points of view, all affected levels of government, tech- rts, and interested roups. The Commission thennica' exgede ates each issue and 7 ormulates its policy po- sition. Commission findings and recommendations are published and draft bills and executive orders de- veloped to assist in implementing AClR policies.