States' Reply

Governors debate federalism

When the nation's Governors arrived in Washington last week for their annual winter meeting, they were far more concerned about the immediate implications of Ronald Reagan's red-ink budget and its drastic cuts in domestic spending than his heralded long-term plans for a New Federalism. But since the Governors had long complained about Washington's heavy hand on a multitude of federal aid programs for the states, they could scarcely ignore Reagan's potentially historic proposals. In something of an Administration victory, the Governors wound up spending most of their three days debating federalism rather than berating the budget.

The result, however, was far from a ringing endorsement of Reagan's New Federalism proposals. The keystone of the Reagan plan was that the Federal Government would assume all costs of the fast-growing $30 billion Medicaid program, which benefits some 22 million poor people. In return, the states would take over the full burden of the nation's basic welfare program, Aid to Families with Dependent Children, which costs about $13 billion a year, and pick up the entire tab for the $ 11 billion food stamp program.

The Governors had no quarrel with Washington's willingness to finance all of Medicaid, but, by a vote of 36 to 5, they rejected the idea that the states should assume the AFDC and food stamp burden. This was in keeping with the traditional position of the National Governors Association that income-support programs for the poor are logically a national responsibility. Instead, the Governors offered to accept as state responsibilities a wide variety of other programs, including education, transportation, child nutrition and criminal justice. Total cost of those programs: about $31 billion.

To the surprise of the Governors, their counterproposal was not immediately rejected by the President when they presented it to him in a White House meeting. Instead, both sides agreed to engage in more detailed bargaining before any legislation is presented to Congress. After that, predicted Vermont's Republican Governor, Richard Snelling, chairman of the Governors Association, "the Congress will decide, and it won't be what the President wants, and it won't be what we want."

One reason the Governors did not spend more time addressing the Reagan budget, noted Tennessee's Republican Governor, Lamar Alexander, "is that none of us expects the President's budget to pass." After meeting with the President, Democratic Governor John Carlin of Kansas reported that Reagan showed he had not lost touch with reality, admitting he did not expect his New Federalism to pass both the House and Senate this year either. Thus the debate was taking place in something of avoid. Observed Carlin: "When I talk to the Kansas farmer or small businessman, there's not too much concern about the New Federalism. They want to know about interest rates and the economy."

While Democratic Governors tended to be more critical of the Reagan plan than their fewer Republican colleagues, Democrats from the West and South, reflecting regional differences, generally supported it. "We are tired of playing 'Mother, may I?' with federal bureaucrats," said Colorado's Democratic Governor, Richard Lamm. At the same time, a common Republican view was expressed by Indiana Governor Robert Orr, who contended: "A New Federalism is a must or else we'll just blow the lid off the cost of these programs."

Senate Republican Leader Howard Baker promised to seek a congressional vote this year on the federalism proposals. House Speaker Tip O'Neill, while expressing considerable skepticism, nevertheless pledged that Democrats would not try to bury federalism. In a talk to the Governors, he complained that Reagan had passed his tax and budget slashes in "a great rookie year" in 1981, mainly by maneuvering members of Congress into voting simply for or against the President. Vowed O'Neill: "This country will not make the same drastic mistake this year with New Federalism and the budget. The American people will know what's in them and how they add up." That, of course, was a partisan view. Yet on the New Federalism, O'Neill seemed in step with most of the Governors. They like the principle, but they care even more about what is in the package and how it adds up. sb

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